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The proposed foreclosure fraud settlement the Department of Justice has been pushing, the one that would basically let banks completely off the legal hook for defrauding mortgage holders, apparently won't have Catherine Cortez Masto, Nevada's attorney general, signing on.
Carson City, NV – The Office of the Nevada Attorney General announced today that the Clark County grand jury has returned a 606 count indictment against two title officers, Gary Trafford and Gerri Sheppard, who directed and supervised a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008. [...]

”The grand jury found probable cause that there was a robo-signing scheme which resulted in the filing of tens of thousands of fraudulent documents with the Clark County Recorder’s Office between 2005 and 2008,”said Chief Deputy Attorney General John Kelleher.

The indictment alleges that both defendants directed the fraudulent notarization and filing of documents which were used to initiate foreclosure on local homeowners.

David Dayen comments:

LPS hasn’t been indicted, but you can see where this is going. We know enough now to know that this casual forgery and document fraud was official policy for the company. Indictments of Trafford and Sheppard will almost certainly not end there. Everyone who worked for LPS in Nevada will be culpable. [...]

The fact that they are LPS employees also suggests this is just a first step. This could be a way to get at the software that LPS uses to create documents, which would prove pattern and practice. LPS was central to the entire robo-signing scheme across foreclosure mill law firms and mortgage servicers. And they consistently maintain that they worked at the direction of the servicers and with their full knowledge. So that ropes in the servicers as well.

And Yves Smith compares this to mob prosecutions: "[Y]ou start by going after the foot soldiers in the hope that they roll people higher up on the food chain." But most importantly, it's showing that at least at the state level, the law still matters.

Originally posted to Joan McCarter on Thu Nov 17, 2011 at 09:31 AM PST.

Also republished by Daily Kos.

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