Why we need an audit of the public title records

By Robin C. (Cole) Sunbeam, RN

Robin Sunbeam contends that recording fraudulent property documents undermines the integrity of the public records. Considering that the big Wall Street banks have admitted fraud, it would be considered prudent quality control to do an audit of property records to gauge the extent that fraud has clouded Mendocino County property titles. Current property transactions depend on the accuracy of previous documents.

There has been a massive transfer of wealth of real property through foreclosures with documents in which irregularities nullify the sale and thus the transfer of title. This poses a serious risk to the integrity of public records, the future transfer of properties, as well as the property values of every land owner in America, even those who currently have properties with clear titles.

In the Nueces decision, the judge said: NUECES COUNTY, TX v. MERSCORP July 3, 2013
The filing of fraudulent liens undermines the reliability of the public records system on which so many rely, including landowners, purchasers, local governments, title companies, insurers, and realtors. filings of inaccurate or fraudulent property records is alleged to be so wide spread and pervasive as to have damaged the integrity of Texas' real property records and to have all but collapsed the real property recording system in the County. the County has been harmed, first, because it relies on accurate property records in conducting its own business, and because the value of this essential public service and the County's value as an institution has been damaged if people and institutions can no longer rely on the accuracy of the property records it maintains.

Government Code 27201 says that every "recordable" document must be accepted for recording, and shall not refuse to record any document on the basis of its lack of legal sufficiency, it also says that the documents must have original signatures.

Government Code 27203 says that a Recorder is liable for neglecting to record a "recordable" document within a reasonable amount of time. If the document is found to be unrecordable, the Recorder must notify the person that they have the right to judicial review in court of the recorder's refusal to record the document. The notification form shall include a section stating the recorder's reason for refusing the document and shall provide notice that it is a public offense to further attempt to record the document without an order of the court. Documents lacking original signatures, unless otherwise authorized, renders a document unrecordable. In the case of robosigned documents, an Affidavit of Authority can confirm that the robosignatures have been authorized.

There are actions a County Recorder can take to protect the public by assuring the integrity of the public records. A competent administrator understands the need to perform periodic quality control audits. An independent audit of a random selection of property titles transferred within the last 6 years would give us a gauge of the extent of fraud in Mendocino County. I am running for this office to protect the integrity of our County's property records and expose the bank frauds for investigation, if there are any. Until the audit, we won't know.

Filing false and fraudulent documents is a felony according to CA Penal Code 115. According to Government Code 27201(b)(1), the document must have original signatures to be "recordable." Robosigning foreclosures has been a common practice among the Wall Street banks. I will not be complicit in these crimes. In light of the documented culpability of the Wall Street banks, there is good reason to suspect fraud. Penal Code 475 implies that a Recorder that receives suspected forged documents for recordation can be considered complicit in the felony of forgery.

Recorders throughout the country are refusing to record robosigned documents without an Affidavit of Authority, or an Affidavit of Authenticity, proving they are who they say under penalty of perjury. In California, this action is justified in one part of the CA Homeowner's Bill of Rights, specifically in S.B. 900 which states:

Sec 20(a) "...a notice of default, notice of sale, assignment of a deed of trust, or substitution of trustee recorded by or on behalf of a mortgage servicer in connection with a foreclosure subject to the requirements of Section 2924, or a declaration or affidavit filed in any court relative to a foreclosure proceeding shall be accurate and complete and supported by competent and reliable evidence." The Affidavit of Authority/Authenticity is part of the competent and reliable evidence.

The following is the justification for Recorder John O'Brien in Essex County, MA refusing to record some documents:

"It is without question that a Register of Deeds has an important and fiduciary relationship and responsibility - especially to the Commonwealth where his position is elected - to all of his constituents, as well as the public at large, all of whom rely, and should be able to rely on the Register's efforts, supervision and oversight in assuring, maintaining, and promoting the integrity, transparency, accuracy, and consistency of a County's land Records.

"The Register's work and supervision of his Registry most often revolves around tasks and responsibilities that are generally ministerial in nature. The Register is typically concerned with the daily task of recording legal documents and/or instruments affecting real property where such documents and/or instruments are properly presented to the registry for recording on the public land records.

"However, the Register's fiduciary duty goes beyond these usual ministerial acts in circumstances in which the Register has actual knowledge or a subjective good-faith belief/basis for believing that documents and/or instruments being presented for recording or registration in the registry for which he has responsibility are fraudulent or otherwise not executed or acknowledged under applicable law. In such cases the Register may lawfully refuse to record such a document and/or instrument."

When elected, I will take a multi-prong approach to this problem:

a. I will conduct a quality control audit of the title records to see exactly how many have been compromised. This will reveal how bad things are, and will help to determine a course of action to stop the hemorrhaging, or to sue for retribution.

b. I will refuse to record known fraudulent documents without and accompanying Affidavit of Authority as have been done by Essex County Recorder, John O'Brien, and by all recorders in Nevada.

c. I will be proactive in lobbying Sacramento to pass laws that allow all CA Recorders to defend the integrity of the public records.

d. I will educate the public on what to look for on their own documents to identify forgery, false assignments, MERS loans, etc.

From the Mendocino County Recorder's webpage "This Division performs the mandated duties of recording, indexing and maintaining for public access, all documents authorized by law to be recorded. Records in this office date back to the beginning of the County. It is imperative that records be well-preserved and easily accessible as current property transactions depend on the accuracy and availability of previously recorded documents." Even on the Recorder's job description, it agrees that current property transactions depend on the accuracy of previous documents.

CA Government Code 27201
(a) The recorder shall, upon payment of proper fees and taxes, accept for recordation any instrument, paper, or notice that is authorized or required by statute, or court order to be recorded, or authorized or required to be recorded by a local ordinance that relates to the recordation of any instrument, paper, or notice that relates to real property, if the instrument, paper, or notice contains sufficient information to be indexed as provided by statute, meets recording requirements of state statutes and local ordinances, and is photographically reproducible. The county recorder shall not refuse to record any instrument, paper, or notice that is authorized or required by statute, court order, or local ordinance that relates to the recordation of any instrument, paper, or notice that relates to real property to be recorded on the basis of its lack of legal sufficiency.
"Photographically reproducible," for purposes of this division, means all instruments, papers, or notices that comply with standards as recommended by the American National Standards Institute or the Association for Information and Image Management for recording of records.
(b) (1) Each instrument, paper, or notice shall contain an original signature or signatures, except as otherwise provided by law, or be a certified copy of the original.
(2) A facsimile signature shall be accepted on a lien recorded by a governmental agency when that facsimile signature has been officially adopted by that agency. The lien shall have noted on its face a statement to that effect. The officially adopted facsimile signature shall be provided to the county recorder by a letter from the agency. A facsimile signature shall continue to be valid until the agency notifies the county recorder that the facsimile signature has been revoked.

27203. Any recorder to whom an instrument proved or acknowledged according to law or any paper or notice which may by law be recorded is delivered for record is liable to the party aggrieved for the amount of the damages occasioned thereby, if he or she commits any of the following acts:
(a) (1) Neglects or refuses to record the instrument, paper, or notice within a reasonable time after receiving it. This subdivision shall not apply to an instrument, paper, or notice that the recorder has determined to be an unrecordable document pursuant to this chapter. Nothing in this subdivision shall preclude the application of Section 27201.
(2) The recorder may provide, to any person presenting a document the recorder determines to be an unrecordable document, a form stating that the person has the right to judicial review in a court of competent jurisdiction of the recorder's refusal to record the document. The form shall include a section stating the recorder's reason for refusing the document. The form shall provide notice that it is a public offense to further attempt to record the document without an order of the court as provided by Section 27204. The recorder shall keep a correct copy of the refused document. In the event the document is determined by the court to be a recordable document, the recorder shall pay the filing fees for the review, and shall record the document within a reasonable time.
(b) Records any instrument, paper, or notice, willfully or negligently, untruly, or in any manner other than that prescribed by this chapter.
(c) Neglects or refuses to keep in his office or to make the proper entries in the indices required by this chapter.
(d) Alters, changes, obliterates or inserts any new matter in any records deposited in his office. The recorder may make marginal notations on the records in his office indicating the affixing of internal revenue stamps to documents subsequent to recordation or the affixing of such stamps to original deeds on file in the office of the registrar of titles.

CA Penal Code 115 implicates the mortgage servicing agencies and the title insurance companies
(a) Every person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony.
(b) Each instrument which is procured or offered to be filed, registered, or recorded in violation of subdivision (a) shall constitute a separate violation of this section.
(c) Except in unusual cases where the interests of justice would best be served if probation is granted, probation shall not be granted to, nor shall the execution or imposition of sentence be suspended for, any of the following persons:
(1) Any person with a prior conviction under this section who is again convicted of a violation of this section in a separate proceeding.
(2) Any person who is convicted of more than one violation of this section in a single proceeding, with intent to defraud another, and where the violations resulted in a cumulative financial loss exceeding one hundred thousand dollars ($100,000).
(d) For purposes of prosecution under this section, each act of procurement or of offering a false or forged instrument to be filed, registered, or recorded shall be considered a separately punishable offense.

Penal Code 470 makes robosigning a crime of forgery
(a) Every person who, with the intent to defraud, knowing that he or she has no authority to do so, signs the name of another person or of a fictitious person to any of the items listed in subdivision (d) is guilty of forgery.
(b) Every person who, with the intent to defraud, counterfeits or forges the seal or handwriting of another is guilty of forgery.
(c) Every person who, with the intent to defraud, alters, corrupts, or falsifies any record of any will, codicil, conveyance, or other instrument, the record of which is by law evidence, or any record of any judgment of a court or the return of any officer to any process of any court, is guilty of forgery.
(d) Every person who, with the intent to defraud, falsely makes, alters, forges, or counterfeits, utters, publishes, passes or attempts or offers to pass, as true and genuine, any of the following items, knowing the same to be false, altered, forged, or counterfeited, is guilty of forgery: any check, bond, bank bill, or note, cashier's check, traveler's check, money order, post note, draft, any controller's warrant for the payment of money at the treasury, county order or warrant, or request for the payment of money, receipt for money or goods, bill of exchange, promissory note, order, or any assignment of any bond, writing obligatory, or other contract for money or other property, contract, due bill for payment of money or property, receipt for money or property, passage ticket, lottery ticket or share purporting to be issued under the California State Lottery Act of 1984, trading stamp, power of attorney, certificate of ownership or other document evidencing ownership of a vehicle or undocumented vessel, or any certificate of any share, right, or interest in the stock of any corporation or association, or the delivery of goods or chattels of any kind, or for the delivery of any instrument of writing, or acquittance, release or discharge of any debt, account, suit, action, demand, or any other thing, real or personal, or any transfer or assurance of money, certificate of shares of stock, goods, chattels, or other property whatever, or any letter of attorney, or other power to receive money, or to receive or transfer certificates of shares of stock or annuities, or to let, lease, dispose of, alien, or convey any goods, chattels, lands, or tenements, or other estate, real or personal, or falsifies the acknowledgment of any notary public, or any notary public who issues an acknowledgment knowing it to be false; or any matter described in subdivision (b).
(e) Upon a trial for forging any bill or note purporting to be the bill or note of an incorporated company or bank, or for passing, or attempting to pass, or having in possession with intent to pass, any forged bill or note, it is not necessary to prove the incorporation of the bank or company by the charter or act of incorporation, but it may be proved by general reputation; and persons of skill are competent witnesses to prove that the bill or note is forged or counterfeited.

Penal Code 475 applies to the role of the Recorder
(a) Every person who possesses or receives, with the intent to pass or facilitate the passage or utterance of any forged, altered, or counterfeit items, or completed items contained in subdivision (d)of Section 470 with intent to defraud, knowing the same to be forged, altered, or counterfeit, is guilty of forgery.

The California Homeowner Bill of Rights The California Homeowner Bill of Rights became law on January 1, 2013 in response to the widespread mortgage fraud perpetrated by the big Wall Street Banks to ensure fair lending and borrowing practices for California homeowners. California is the only state in the Union that passed a law protecting homeowners from predatory banksters. We have Senator Noreen Evans to thank for this temporary legislation.

The laws are designed to guarantee basic fairness and transparency for homeowners in the foreclosure process. Some provisions include:

Verification of documents: Lenders that record and file multiple unverified documents will be subject to a civil penalty of up to $7,500 per loan in an action brought by a civil prosecutor. Lenders who are in violation are also subject to enforcement by licensing agencies, including the Department of Business Oversight, the Bureau of Real Estate.

Enforceability: Borrowers will have authority to seek redress of material violations of the new foreclosure process protections. Injunctive relief will be available prior to a foreclosure sale and recovery of damages will be available following a sale. (AB 278, SB 900)

Tenant rights: Purchasers of foreclosed homes are required to give tenants at least 90 days before starting eviction proceedings. If the tenant has a fixed-term lease entered into before transfer of title at the foreclosure sale, the owner must honor the lease unless the owner can prove that exceptions intended to prevent fraudulent leases apply. (AB 2610)

Tools to prosecute mortgage fraud: The statute of limitations to prosecute mortgage-related crimes is extended from one to three years, allowing the Attorney General's office to investigate and prosecute complex mortgage fraud crimes. In addition, the Attorney General's office can use a statewide grand jury to investigate and indict the perpetrators of financial crimes involving victims in multiple counties. (AB 1950, SB 1474)

Tools to curb blight: Local governments and receivers have additional tools to fight blight caused by multiple vacant homes in their neighborhoods, from more time to allow homeowners to remedy code violations to a means to compel the owners of foreclosed property to pay for upkeep.

The California Homeowner Bill of Rights marked the third step in Attorney General Harris' response to the state's foreclosure and mortgage crisis. The Mortgage Fraud Strike Force was created in May 2011 to investigate and prosecute misconduct at all stages of the mortgage process. In February 2012, Attorney General Harris secured a commitment from the nation's five largest banks for up to $18 billion for California borrowers. <https://oag.ca.gov/hbor>