Loan Servicer's Attorneys Face Criminal Contempt ... · PDF file08/12/2017 · The...
Transcript of Loan Servicer's Attorneys Face Criminal Contempt ... · PDF file08/12/2017 · The...
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source=https://www.law.com/dailybusinessreview/sites/dailybusinessreview/2017/12/08/loan-servicers-attorneys-face-criminal-contempt-arraignment-in-miami/)
By Celia Ampel (/author/profile/Celia Ampel/) | December 08, 2017
Loan Servicer's Attorneys Face CriminalContempt Arraignment in Miami
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Miami-Dade Circuit Judge Beatrice Butchko.
Photo by J. Albert Diaz
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Two attorneys for a loan servicer and a company representative are scheduled for a
criminal arraignment in Miami for failing to turn over evidence in a civil foreclosure
case.
The Dec. 14 contempt hearing was set after Ditech Financial LLC failed to comply
with a Miami-Dade judge’s order to produce training manuals discussed by company
representative Christopher Ogden in a deposition. Ogden and Boca Raton attorneys
Yacenda Hudson and Amina McNeil of Tromberg Law Group were ordered to show
why they shouldn’t be held in indirect criminal contempt of court.
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The case is part of a broader issue in foreclosure litigation: Are loan servicers
misleading courts about the process they follow to ensure records are thorough and
accurate when mortgages are transferred from one servicer to another?
“I have been arguing for quite some time that there is a problem with what these
banks’ witnesses are putting forward about the way that they get the prior servicers’
records into evidence,” said Miami attorney Bruce Jacobs of Jacobs Keeley, who
represents the borrowers in the case.
Ogden testified, as many loan servicers’ representatives do, that Ditech uses “red-
flag” software to catch any problems with previous servicers’ records during the loan
boarding process, Jacobs said. Such problems could include errors or gaps in the
payment history.
The witness said he saw training manuals that included a flow chart outlining the
verification process, Jacobs said. But after he persuaded Miami-Dade Circuit Judge
Pedro Echarte to order Ditech to produce the training manuals, things started to go
awry.
Echarte instructed the parties to arrange a new deposition to go over the training
manuals. The judge said if they could not agree on a time, he would set the
deposition for a Saturday evening at midnight. It’s a tactic he uses to motivate
litigants, and it’s always worked.
So Echarte was miffed to find the parties didn’t agree on a time and wound up
dragging a court reporter to a deposition in the middle of the weekend.
“I want you guys to know that I’ve been doing that for 20 years and you two are the
first that couldn’t agree on a normal, reasonable date and time for a deposition,” he
told Jacobs and McNeil at a Nov. 16 hearing(http://images.law.com/contrib/content/uploads/documents/392/7785/GRE-1116.pdf). “Shame on both of you. … Why did all of you idiots go to a deposition at
midnight on Sunday?”
Then the parties told the judge Ditech, formerly Green Tree Servicing, did not bring
the training manuals to the deposition.
After discussion with its legal department, the company decided not to turn them
over because it planned to argue they were protected by work-product privilege,
McNeil said. Echarte said that argument had not come up in any court filings and
Ditech was disobeying his order to turn over the records.
“Who decided?” the judge asked. “Give me the name of a person because I want to
know who goes to jail, along with the lawyer.”
Later in the hearing, when the judge announced he would issue a show-cause order,
his words were more conditional: “If you’re found in contempt of court … you may be
facing jail. You may be facing an adjudication. You may be facing probation. You may
be facing other sanctions. If I find any lawyer to be in contempt of court, the matter
is going to be referred to the Florida Bar.”
But Echarte’s earlier comments spurred Ditech to move for his disqualification, and
he recused himself. The case was transferred to Miami-Dade Circuit Judge Beatrice
Butchko, who on Thursday told the parties she would sign an order keeping the
arraignment on the calendar for Dec. 14. A trial is set for Feb. 1.
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In the midst of all this, Ditech produced a training manual: a 16-page document with
no flow chart mentioning a “red-flag” system, according to the order to show cause(http://images.law.com/contrib/content/uploads/documents/392/7785/2017_11_20-Order-to-Show-Cause-Why-Ditechs-Witness-and-Ditechs-Atty-Should-not-be-Held-in-Indirect-Criminal-Contempt-of-Court.pdf) Butchko was preparing to sign
Friday.
McNeil and Hudson did not immediately respond to a request for comment. A
message sent to Ditech also went unreturned.
Ogden is represented by Greenberg Traurig attorneys Patrick Broderick, Jason
Okleshen and Brandon Leon of West Palm Beach, who did not immediately respond
to a request for comment.
The legal dispute is all part of a broader industry problem, said Jacobs, who obtained
an order from Butchko(https://www.law.com/dailybusinessreview/almID/1202755595786/home-foreclosure-fails-on-ocwen-servicing-records/?back=law) in a separate case
against loan servicer Ocwen Financial Corp. finding ”this boarding process is a legal
fiction.”
Jacobs said loan servicer representatives travel around the country testifying they
know their records are accurate because they’ve been through a “vigorous” loan
boarding process. These witnesses say they are familiar with the process,
but they often cannot explain glaring errors in the records, he said.
“You don’t bend the hearsay rules for anyone, in civil or criminal, whether it’s murder
or mortgage,” said Jacobs, a former state prosecutor who has been fighting
foreclosure cases since 2008. “I think that we need to challenge the idea that wealthy
people are above the law.”
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Celia Ampel
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Celia Ampel covers South Florida litigation. Contacther at [email protected] or on Twitter at@CeliaAmpel.
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