Fortress Investment Group, Nationstar Mortgage, the City of Oakland, and Alameda County; What Could Go Wrong? Everything!

It looks like Alameda County and City of Oakland officials will be falling all over themselves to approve a deal to potentially keep the Oakland Raiders football team in Oakland. Unfortunately City and Alameda County staff have done nothing to investigate the potential pitfalls of the proposed deal. What could go wrong? The Fortress Investment Group (Fortress), who is proposed to be the major funder of the project has a bad history in previous deals involving the development of sports facilities. Nothing in the staff reports for the meetings discusses these previous projects where the public was left holding the monetary bag.

Fortress is a publicly traded corporation that was founded in 1998 by among others, Wesley Edens. Mr. Edens is currently a member of the board of directors for Fortress and his LinkedIn account lists him as the chairman and founder of the company. Prior to founding Fortress, Mr. Edens was a partner at BlackRock Financial Management, Inc, and prior to that he was a partner and managing director of Lehman Brothers. Fortress purchased Nationstar Mortgage in 2006 in what the Fortress website describes as an “opportunistic buyout.” In 2014 Mr. Edens was part of a group that purchased the Milwaukee Bucks basketball team.

On Tuesday December 13, 2016, both the Alameda County Board of Supervisors and the Oakland City Council will have both closed session and open session agendas to discuss and approve a Term Sheet for the development of a new Oakland Raiders stadium at the current Coliseum site. (The County staff report is here. The City Staff Report is here.)

To date I have seen no mention in the press of the significance of Fortress being involved in the proposed Oakland Raiders stadium deal. The City of Oakland and Alameda County should be looking very carefully at the proposed deal, and more specifically looking at the involvement of Fortress given the history of recent events in Milwaukee, Wisconsin and previously in Vancouver, Canada. A simple internet search would have disclosed a plethora of previous questionable deals involving Fortress.

During the preparation for the Vancouver Winter Olympics in 2010, Fortress became a major player because is owned the Whistler Blackcomb ski area where many of the events were to be held. Fortress was involved in the development of housing in Vancouver for the athletes participating in the Olympics. Because economic factors were not favorable at the time, Fortress was unable to fulfill their commitments to funding the development of the housing, and the City of Vancouver and the province of British Columbia were left filling the financial void. Do some internet searches and see all the stories out there about the Olympics incident. You will see how Fortress overestimated its abilities and left others with the responsibility of cleaning up the economic mess.

As the LA Times reported, in 2012 Fortress was sued over a deal involving a financing deal involving Sony Pictures.

The most recent activity that relates to Oakland involves the Milwaukee Bucks professional basketball team. After purchasing the team in 2014 the ownership group decided a new arena was needed for the team.  When it was all said and done the State of Wisconsin agreed to put $250 million into the new $500 million arena in downtown Milwaukee. Some have speculated that the money for the arena came from cuts to public education; the New York times reported on it here.

Fortress is the majority stockholder in Nationstar Mortgage, possibly the worst mortgage servicing company in the country. Because of the impact Nationstar has had on Milwaukee, a local group, Common Ground, pressured Nationstar, Eden, and the City to negotiate a deal that brought $30 million of relief to Milwaukee homeowners.  The people of Milwaukee and Wisconsin are still subsidizing the new arena, but the community was able to get a little something back.

Our involvement with Nationstar goes back to the loan we obtained in 2005 to purchase our home. There was fraud during the origination of the loan and we have been in court for the last five years trying to resolve the problems. Unfortunately the California court system is unfriendly to any homeowner and the process is slow and difficult. Nationstar assumed the servicing of our loan in 2013 after purchasing the mortgage servicing rights from Bank of America.  We have battled with Nationstar for over three years, and the problems are never ending. Most recently we lost $89,000 in mortgage assistance because Nationstar Vice President Marisa Barker misled us about the necessity to sign a recast for our loan in order to finalize the award of $89,000 in Keep Your Home California money. Our travails with Nationstar were documented in a previous post.

Why didn’t city or county staff do a simple internet search to learn about the past dealings of Fortress, Edens, Nationstar and others? Shouldn’t the elected officials making the decisions about this potential development be informed about the past financial debacles involving Fortress and related entities? It’s time for the elected officials in Oakland and Alameda County to hold staff responsible for failing to fully inform them of all the potential pitfalls of the development, and the possible problems with the parties involved.

Finally the City and County should demand Fortress provide relief to homeowners at least equivalent to what was provided those in Milwaukee. An Urban Strategies report concluded there were 10,500 completed foreclosures in Oakland between 2007 and 2011 and we know to total count has gone higher since 2011. Given how severely Oakland was impacted during the mortgage meltdown, Nationstar better show up with more than $30 million. But most importantly the Oakland City Council and the Alameda County Board of Supervisors must stop and investigate whether Fortress can be trusted to not leave the city and county left holding the bag, responsible for financial overruns and shortfalls like those in the Vancouver and Milwaukee.

Nationstar Mortgage Cost us $89,000 and a HAMP Mod!

Open Letter to Jay Bray, CEO, President and Chairman of the Board of Nationstar Mortgage, LLC

Dear Mr. Bray,

On July 1, 2013 your company, Nationstar Mortgage, LLC took over the servicing of our home loan. Our loan was originated in 2005 by a local company that was working for Countrywide Home Loans and, as with so many mortgages at the time, there was fraud in the origination of the loan when someone forged the signature on the loan application and did other sleight of hand tricks to qualify us for a loan for which we did not actually qualify. Countrywide was the original servicer of our loan.

Jay Bray

Jay Bray

Bank of America purchased Countrywide in 2008 and took over servicing of the loan until selling the servicing rights for the loan to Nationstar in 2013. While we had some problems and complaints with how Bank of America serviced our loan, those problems now seem inconsequential when compared to what we have experienced with your company. Since taking over the servicing of our loan Nationstar has committed at least 23 violations of mortgage servicing laws, including not sending monthly statements on 16 separate occasions. Bank of America never failed to send us a monthly mortgage statement. I cannot say Bank of America violated any mortgages servicing laws, but with Nationstar the violations are coming at a rate that defies common sense.

Below is a list of the mortgage servicing violations committed by Nationstar since taking over the servicing of our loan on July 1, 2013:

Failure to send monthly mortgage statements

12 C.F.R. § 1026.41 requires the servicer to provide monthly mortgage statements. The only exception is for a borrower in bankruptcy; we have never filed for bankruptcy. Nationstar did not send mortgage statements to us in the following 16 months:

  • August 2013
  • September 2013
  • November 2014
  • December 2014
  • January 2015
  • August 2015
  • September 2015
  • October 2015
  • November 2015
  • December 2015
  • January 2016
  • February 2016
  • March 2016
  • April 2016
  • July 2016
  • August 2016 

Failure to send initial rate change disclosures

12 C.F.R. § 1026.20(d) requires the servicer to provide disclosures regarding changes in interest rate and monthly payment 210 to 240 days prior to the first change in interest rate. Our first change date was July 1, 2015 and the disclosures should have been provided between November 3 and December 3, 2014. We did not receive the required disclosures.

Failure to send subsequent rate change disclosures

12 C.F.R. § 1026.20(c) requires the servicer to provide disclosures regarding subsequent changes in interest rate and monthly payment 60 to 120 days before the change. The second change was set for July 1, 2016 and no disclosures were provided.

Failure to respond adequately to a Qualified Written Request

12 U.S.C. § 2605(e), part of the Real Estate Settlement Procedures Act (RESPA) allows a borrower to submit a Qualified Written Request (QWR) to their servicer requesting documents and information pertaining to the servicing of their loan. We submitted a QWR on January 10, 2014. The January 17, 2014 response from Nationstar was a boilerplate response that did not specifically address the issues raised in the QWR, including failure to provide a copy of the Note as requested, thereby violating the law. Nationstar is well aware of its responsibilities under RESPA given the recent ruling in the case of Renfroe v. Nationstar Mortg., LLC (11th Cir. 2016) 822 F.3d 1241 wherein the court found the exact type of response we received can be the basis for a cause of action in litigation.

Failure to respond adequately, or at all, to Notices of Error

Another provision of RESPA contained in 12 U.S.C. § 2605(e) allows borrowers the right to submit a Notice of Error (NOE) identifying apparent errors committed by the servicer. Over the last two years we have sent Nationstar three NOE’s. The response to the first did not address the errors identified in the letter, and the other two NOE’s did not receive a response at all, despite the legal requirement that Nationstar respond.

Failure to provide a true and correct copy of the Note

California Civil Code § 2943(b)(1) requires a servicer to provide a borrower a copy of the mortgage Note including “any modifications thereto.” After making multiple requests to Nationstar for a copy of the Note consistent with the requirements of the law, Nationstar refuses to produce a copy. The only copy provided by Nationstar is a copy of a copy that Placer Title made immediately after it was signed. We have never received a copy of the wet-ink Note that includes assignments/endorsements/transfers that would be found on a copy of the Note “with any modifications thereto.” On February 18, 2016, Nationstar Vice President Marisa Barker stated that she could not say with certainty who owns our mortgage, only that “our records indicate” that a securitized trust, SARM 2005-15, owns the Note. Barker also said she thinks Wells Fargo, the trustee of the securitized trust might have the original Note, but she was not sure. As I am sure you know the only way to definitively determine the owner of a Note is to inspect the original and see who it has been assigned to. 

Failure to provide consistent information regarding the loan

Nationstar has committed multiple violations of California’s Rosenthal Fair Debt Collection Practices Act (Rosenthal Act). Examples of Rosenthal Act violations by Nationstar include providing statements in May and June 2016 with contradictory interest rates and monthly payments. The May 2016 statement shows an interest rate of 3.000% and a monthly payment of $1925.05 through 07/01/2017. The June Statement shows an interest rate of 3.500% and a monthly payment of $1517.23 through 07/01/2017.

Our Attempts to Resolve Problems

Over the past three years, besides contacting Nationstar directly regarding all of these violations, we have filed eight complaints with the Consumer Financial Protection Bureau (CFPB), and three complaints with the California Department of Business Oversight (DBO). In general Nationstar’s responses to our complaints have ignored the issues raised or been incomplete and/or evasive. One example of this is the May 13, 2015 letter Nationstar sent in response to our May 2, 2105 CFPB complaint. Nationstar’s letter, signed by Chris Pereira, states, “[w]e have conducted an investigation and it was determined the error asserted within your correspondence did not occur on the account.” Two days later on May 15, 2015 Nationstar sent a letter signed by Chandler Williams responding to a DBO complaint. “We have conducted an investigation and determined the errors asserted within your correspondence regarding the request for information about the monthly statements occurred.” Both the CFPB and DBO complaints concerned the same conduct, not sending monthly statements and not providing the disclosures prior to the first change in interest rate and monthly payment on the loan. Nationstar’s answers are clearly contradictory.

As a result of Nationstar’s numerous violations of the law and unresponsiveness to our inquiries and concerns we were left no choice and commenced litigation against Nationstar in July 2015. Currently no one at Nationstar will discuss our situation because of the litigation, meaning Nationstar is not responding to questions that must be answered in order to fulfill their mortgage servicing obligations. Multiple times Nationstar employees have made promises to respond to inquiries, and still we wait. One example of the many failures to respond was the promise by Nationstar Vice President Marisa Barker to consult with the litigation department about our request for a copy of the Note and get back to us with an answer. We have been waiting since February 18, 2016. The last contact we had with Nationstar  was on September 27, 2016 when I spoke with Christopher. He refused to discuss anything about our account because of the litigation and said to call the attorney defending Nationstar in our case, but he then promised to have your litigation department respond. We are still waiting. Unfortunately the lawyer and his law firm have also failed to respond to requests for information. As an example on March 30, 2016 we sent a lengthy letter to Jason M. Richardson the attorney at Severson and Werson in San Francisco handling the matter but received no response. On June 7, 2016 I had a phone conversation with Mr. Richardson again asking for a copy of the Note consistent with the requirements of California law. Mr. Richardson promised to pass the request along to Nationstar and get back with a response. We are still waiting. In a more recent conversation when we asked Mr. Richardson for a copy of the Note consistent with the requirements of California law he stated, “it’s just not done.”

Who is the Note Holder?

One of the most troubling parts of our conflict with Nationstar concerns the identity of the current Note Holder. Despite the fact that California Civil Code section 2943(b)(1) requires you provide us a copy of the Note, Nationstar has refused to comply with the law. The table below shows all of the conflicting information we have received over the years concerning the identity of the Note Holder:

Date of Identification                   Identified Note Holder             Documents or Party [Disclosure Date] (if different)      or Investor                                Disclosing Identity

May 12, 2005


Najarian Loans Note and Deed of Trust at signing of documents
May 18, 2005

[May 14, 2013]

Najarian Loans MERS Milestones
May 31, 2005

[May 14, 2013]

Countrywide / Bank of America, N.A. MERS Milestones
July 2, 2005

[May 14, 2013]

Lehman Brothers Holdings MERS Milestones
December 10, 2009


Aurora MSF Lehman BAC Home Loans Servicing
June 15, 2011


Aurora MSF Lehman Letter from BAC Home Loans Servicing
August 17, 2011


Aurora MSF Lehman Letter from Bank of America, N.A.
September 11, 2011


Lehman Brothers Holdings MERS Online
September 20, 2011


Aurora Bank Letter from Bank of America, N.A.
September 29, 2011


Aurora MSF Lehman Bank of America, N.A. Letter
October 7, 2011


Wells Fargo Bank, N.A. Bank of America, N.A. Letter
March 22, 2012 Wells Fargo Bank as Trustee for SARM 2005-15 Wells Fargo, Bank of America, and MERS
July 31, 2012 Wells Fargo Bank, N.A. Bank of America, N.A. Letter
September 12, 2012

[May 14, 2013]

Wells Fargo as Trustee MERS Milestones
January 17, 2014 Wells Fargo Bank as Trustee for SARM 2005-15. Address is in Minnesota Nationstar Letter
February 20, 2014 Wells Fargo Bank as Trustee for SARM 2005-15. Address is in Minnesota Nationstar Letter
August 11, 2015 Wells Fargo Bank as Trustee for SARM 2005-15. Address is in Maryland Nationstar Letter
February 26, 2016 Wells Fargo Bank as Trustee for SARM 2005-15. Address is in Maryland Nationstar Letter

Nationstar Vice President Marisa Barker said no transfers are done on paper, only electronic transfers through MERS. This is not the case, but if it were true, then the MERS Milestones prove that the SARM 2005-15 does not own the Note.

We were provided a copy of the MERS Milestones for the Note in May 2013, so the information is possibly incomplete. Regardless, there is a clear conflict over the identity of the current Note Holder for the following reason: the Prospectus for the SARM 2005-15 Trust designates the depositor into the SARM 2005-15 Trust as Structured Asset Securities Corporation. Per trust law, information provided by Najarian, and the Prospectus for the SARM 2005-15 Trust, the Note must have the following chain of title/assignments in order to be securitized and placed in the Trust:

(1)       Najarian Loans, Inc. (Original lender and agent for Countrywide)

(2)       Countrywide Home Loans, Inc. (now Bank of America, N.A.)

(3)       Lehman Brothers Holdings, Inc.  (Sponsor and Seller)

(4)       Structured Asset Securities Corporation (Depositor)

(5)       Wells Fargo Bank as Trustee for SARM 2005-15

The chain of title for the Note according to the MERS Milestones is:

(1)       May 18, 2005:  Najarian Loans, Inc.

(2)       May 31, 2005:  Countrywide Home Loans, Inc.

(3)       July 2, 2005:    Lehman Brothers Holdings, Inc.

(4)       September 12, 2012:  Wells Fargo as Trustee

The Closing Date for the SARM 2005-15 was June 30, 2005, and according to law and the SARM 2005-15 Prospectus, assets had to be placed in the SARM 2005-15 no more than 90 days after the Closing Date in order for the asset to have favorable tax status. The Note could have been placed in the SARM 2005-15 at any time, but after Lehman Brothers declared bankruptcy in 2008, if Lehman still owned the Note, as the MERS Milestones assert, sale of the Note to the SARM 2005-15 would have been controlled by the bankruptcy court. We have never received any notification that the loan was involved in the Lehman Brothers bankruptcy. Outside of the MERS Milestones we have never received any communication indicating Lehman Brothers was involved in any way with our loan.

To date there are no recorded documents in Alameda County disclosing an assignment of our Deed of Trust from Najarian to another Note Holder. If the Note was transferred to Wells Fargo as Trustee in 2012 when the SARM 2005-15 Trust is alleged to have become the Note Holder, we did not receive the notice required by federal law (15 U.S.C. § 1641(g)). Bank of America sending us a letter in July 2012 stating that Wells Fargo Bank, N.A. was the Note Holder, not Wells Fargo as Trustee further muddies the waters. The Note could have been transferred to another Note Holder since 2012 but we have not received notice of a transfer from a new investor that federal law requires. The chain of title in the MERS Milestones for the Note does not show the requisite transfer to the Depositor, Structured Asset Securities Corporation, before being placed in the Trust. If this break in the chain of title is accurate, the Trust cannot be the Note Holder. The Prospectus for the SARM 2005-15 requires that along with the Note endorsed to Wells Fargo as Trustee or in blank, each step in the securitization of the Note would be evidenced by Mortgage Loan Purchase Agreements with accompanying Mortgage Loan Schedules identifying each loan that was a part of each purchase agreement. The current record concerning ownership of the loan could be a mistake because the MERS system was not updated in a timely fashion. But because the Note is a negotiable instrument, the only way of determining the current Note Holder is to produce a copy of the original blue-ink version of the Note with any assignments/endorsements/allonges or other evidence of transfer to the current Note Holder.

Nationstar Cost Us $89,000 and a  HAMP Modification

In August 2015 we applied to Keep Your Home California (KYHC) for principal reduction funds (PRP). As you know the KYHC program is part of the federal program financed with Hardest Hit Funds (HHF) from the Troubled Asset Relief Program (TARP) that is administered by the Treasury Department. We applied for the KYHC PRP funds because my wife became disabled as a result of rare auto-immune disease, microscopic polyangiitis, in 2013 and is no longer able to work.. In late October 2015 we were provided $89,000 in KYHC PRP funds. We signed a Deed of Trust (DOT) with the California Housing Finance Agency Mortgage Assistance Corporation (CalHFA MAC) in October 2015 that provided the money would be provided to Nationstar to reduce the principal on our loan and we would not have to pay interest on the KYHC PRP loan.

Part of the KYHC process is a requirement that the borrower sign a “recast” of their existing loan. The recast document memorializes the amount of the new payment the borrower will be paying after the application of the KYHC PRP funds. After signing the KYHC loan papers in October, KYHC provided Nationstar with the $89,000 and on November 6, 2015 the funds were applied to our account. In November 2015 Nationstar sent us a letter with a proposed recast agreement. On November 30, 2015 we sent Nationstar a letter detailing multiple errors and problems with the recast agreement. Nationstar sent the identical recast agreement again in late December 2015 and we sent a second letter explaining the problems. A third copy of the identical recast agreement was sent to us by Nationstar In February 2016 with a letter from Eric Rittmueller stating ” Your original Recast document was not able to be processed. This is not a denial letter, your recast request is still valid and can be processed. Please return either a copy of the Recast Agreement that you already signed and had notarized, or re-execute the Agreement included in the package (it is the same document). You may use the return UPS label and envelop (sic) included.” Because none of our concerns about the recast agreement had been addressed, we sent your company a third letter detailing the problems with the document on February 15, 2016.

On February 18, 2016 I received a phone call from Marisa Barker, who is apparently Nationstar’s Community Outreach Vice President. Ms. Barker declared that Nationstar no longer requires a signature for a recast agreement. Further she stated that signing the recast agreement is not a requirement of KYHC and that Nationstar was adhering to the guidance from Treasury and KYHC. She said she would email us a document with this information. We never received an email. We never signed the recast agreement because of Ms. Barker’s assurances that our signature was not required and that all would be well.

Based upon the representations of Ms. Barker and account information available to us online showing the principal had been reduced we were confident our $89,000 from KYHC was secure in our account and we could move forward. Applying for the KYHC PRP funds was to reduce the principal on our loan and then, after applying those funds to the account, we would apply for a Home Affordable Modification Program (HAMP) modification to our reduced principal loan. This was an approach that had been recommended to us by attorneys with Housing and Economic Rights Advocates (HERA) who counsel and work with individuals trying to stay in their homes.

In August of this year we submitted our HAMP application to Nationstar. In a letter dated September 15, 2016 Nationstar informed us that we had been approved for a HAMP modification of our mortgage. The information regarding the monthly payment for the HAMP Trial Payment Plan suggests that the HAMP modification was based upon a calculation that included the $89,000 of KYHC PRP being applied to our account. We have not been able to confirm this or get answers ti sine addutuibak qyestuibs we had with the HAMP Trial Plan because neither Nationstar or your attorney will communicate with us about what happened. On September 16, 2016 Nationstar returned the $89,000 to KYHC without providing us notice or an explanation. Because we had significant unanswered questions regarding the HAMP mod we could not submit the first trial payment and the offer has been rescinded.

After consulting with attorneys at HERA we believe the following occurred. Federal programs prohibit accessing two federal mortgage relief programs simultaneously. Because we had not signed a recast agreement, under federal rules the KYHC process was considered incomplete, and therefore when we applied for the HAMP modification, it appeared we were applying for two federal programs simultaneously. We received no warning from anyone anywhere alerting us to this possibility. Marisa Barker, as a Vice President of  Nationstar who works with these issues on a daily basis should know how the system works, but her representation that we did not need to sign a recast was incorrect. The reconveyance of our CalHFA MAC loan was recorded in Alameda County on October 27, 2016.

We have been told by KYHC that we can reapply for the PRP funds. The problem is that that process takes two to three months, and the HAMP program expires on December 31, 2016. As of this date we do not have enough time to reapply to KYHC, get the paperwork and approvals in place, and be able to reapply for a HAMP modification before the expiration of the program. Therefore, our attempts to work with Nationstar to make our mortgage payments affordable so we can stay in our home have been thwarted due to our reliance on statements made by a Vice President of your company and Nationstar’s overall unwillingness to communicate with us regarding the status of our account in a responsive and meaningful manner.

The Customer is Always Right, Right?

In a December 7, 2015 article in the National Mortgage News you are quoted saying, “Our view is the customer is always right and that’s what we’re preaching. We want to treat these customers in the best way possible. I don’t want to ever take the attitude that the customer is wrong. A lot of time the customer just needs to be better educated.”[1] Mr. Bray, I believe you need some educating. Nationstar’s customer service is wretched and beyond any morally reasonable standard. If the customer is always right why haven’t you made changes in the three years we have been “serviced” by Nationstar. No amount of complaints to government agencies, or letters and complaints to your company have resulted in any change in your incompetent and illegal practices.

Prove to us that the “customer is always right” by actually responding to our inquiries and the issues we raise and providing the information we request. Then produce a copy of the original Note identifying the current holder as required by California law. A true and correct copy of  the Note is the only way to positively prove the identity of the Note Holder. Until we receive the copy of the Note you have not provided the verification of the debt that was promised in a number of letters we received from Nationstar. Since there exists doubt as to who actually owns the Note then it follows that there is doubt as to whether Nationstar even has standing to service our loan.Assuming you do, please follow all of the laws that apply to the servicing of our loan. That alone would be an improvement over the current situation. Nationstar has willfully failed to follow the law, and repeatedly refused to communicate with us about our loan. The contracts involved in this matter require Nationstar to follow all applicable mortgage servicing laws. We wrote Nationstar in April 2015 informing you that you had breached the contracts, the Note and the Deed of Trust. If the breaches had ended at that point and there had been a good faith effort to do the right thing we could accept it. But instead Nationstar appears to have doubled down on mortgage servicing violations.

I look forward to your response.

Sincerely yours,

Ralph Kanz


(I am not an attorney. Nothing in this post should be construed as legal advice of any kind. If you are having problems similar to ours, please consult a legal professional.)

Oakland Fraud Destroys Endangered Species


If you think the Oakland Police Department scandal is unique, and that other parts of Oakland government operate without similar corruption you are sadly wrong. The Planning Department has hit a new low with the production of a fraudulent document designed to obfuscate the fact that Planning screwed up on the approval of a project that could impact an endangered species. This is not the first time the City of Oakland has shortchanged the State and federal endangered species acts (ESA) and the California Environmental Quality Act (CEQA).

Presidio clarkia

Presidio clarkia

Presidio clarkia (Clarkia franciscana) is a diminutive annual flowering plant that occupies about five acres on the planet and is found in only two areas. One is the namesake Presidio in San Francisco where the plant was first found in 1956. Years later, in 1980 the species was first described in the Oakland hills in the Crestmont area on the Serpentine Prairie that is part of Redwood Regional Park. Due to its limited distribution and the threats to the species, Presidio clarkia was listed as endangered by the State of California in 1978 and by the U.S. Fish and Wildlife Service in 1995. Presidio clarkia is the only clarkia species that grows on serpentine soils. The Oakland population has been highly fragmented by development, much of which took place before ESA’s and CEQA. For more on Presidio clarkia the US Fish and Wildlife Service 5-year review of the species is available here.

A big feature of the ESA’s and CEQA is the philosophy that the impacts of a project should be mitigated to ensure the continued existence of the species even if take of the species occurs during development. The intent of mitigation measures is to insure the long-term survival of a species; projects should not lead to declines in the viability of a species.

I have gone through the City’s files for all of the developments that have taken place in the Oakland Hills that impacted Presidio clarkia and what I found is frustrating and unconscionable. The City has never enforced the mitigation measures for any project that has impacted Presidio clarkia. Never. Ever. The 1988 Oakland Hills Tennis Club expansion proposal led to the discovery of a population of Presidio clarkia on the site, at the time only the third known population of the species. The California Department of Fish and Wildlife, then the Department of Fish and Game, made recommendations that caused the project to be redesigned so as to reduce the potential for impacts to the species. As the documents for the project show, one of the requirements in the City’s approvals states, “[t]he project sponsor shall develop a management plan for the ongoing protection of the plant population and its potential habitat. The plan shall be reviewed by the State Department of Fish and Game and shall be approved by the Director of City PIanning prior to issuance a certificate of occupancy.” After multiple requests to the City no record of the Plan can be found, and in the years since the 1998 project was completed, the Tennis Club has added a deck to the end of the building that impinges on the Presidio clarkia population.

Next door to the Tennis Club is the Sunrise Assisted Living Care Facility. In 1997 during biological surveys for the project Presidio clarkia was found on the site. The City’s approval of the project included a mitigation measure providing a “plan shall be submitted to the California Department of Fish and Game (CDFG) and the Zoning Manager for review prior to the issuance of any grading or building permit and no such grading or building permits shall be issued until both the CDFG and the Zoning Manager have approved the plan.” No plan can be found in the City files, and there is no evidence any of the required Presidio clarkia mitigation measures were implemented.

On September 3, 2015 while driving up Redwood Road I observed a notice for a project application posted at the corner of Old Redwood Road. Old Redwood Road has a population of Presidio clarkia that was first documented in 1991. The project site at 5150 Redwood Road has in the past had Presidio clarkia present on the property. When I got home I emailed the planner for the project, Aubrey Rose, about the presence of Presidio clarkia on the site and the need for environmental review to insure appropriate mitigation measures would be implemented to protect the species. Mr. Rose responded on September 4, 2015, “[t]his is a second story addition to an existing single story home – upper story additions are posted on site and closest property owners are notified by mail – the posting contains a preliminary determination, although the zoning approval did rely on this exemption – however, the building permit has not been issued; therefore, a HOLD has been placed on it while we investigate this matter further – talk to you soon.” When I contacted Mr. Rose on July 1, 2016 and asked to inspect the file for the project, I found no record of a HOLD from the City.

There was nothing further from the City, and on April 20, 2016 when I passed the project site, I noticed that construction was underway. I again emailed Mr. Rose to see what mitigation measures had been put in place to protect Presidio clarkia during construction. He responded later in the afternoon “Good to hear from you, thanks for checking in – the zoning approval is attached – condition of approval #23 on pages 9-10 relates to the issue you raise; please take a look and advise, do you feel there is non-compliance with that condition?” I responded back the same day: “To be clear, even though there are endangered species on the site, no CEQA review was complete for this project? Please provide copies of the biologist reports for their surveys. I could not see any fencing in place at the site. What did the biologist find?” Rose responded shortly thereafter, “Thanks for the quick response – this particular project was exempt from CEQA; there was no biologist review or report – is there a breach to a condition of approval you noted? thanks again for your help on this.” My response: “It appears the City under condition 23.b. should have ‘evidence of compliance with these requirements to the City for review and approval.’ If you do not have the evidence, a report from a biologist, then the project is in violation of the COA’s [Conditions of Approval]. Additionally, my understanding of the CEQA Guidelines is that any project site with endangered species requires at minimum a mitigated negative declaration, if not a full EIR. This site has Presidio clarkia present. CEQA review is required. Presidio clarkia have just started blooming, making them identifiable. Any survey would have to have been done in the last week, and prior to the weed eating that took place on the site. Any report on the presence of the species should include mention of a reference site where the species is known to occur. The reference site is next door at what is known as the Old Redwood Road site. The CNDDB [California Natural Diversity Data Base] has all the information on local occurrences of Presidio clarkia. At the Old Redwood Road site today the species was in bloom.” Rose’s response: Thanks for responding, we share your concern for PC as well as any endangered or even threatened species of plant or animal in Oakland – as a 45 year resident of Oakland who grew up in the south hills, hiked Redwood and Joaquin Miller too many times to count, and attended Skyline high, I’m with you – I have a few quick questions that would help a lot:

-what would you consider evidence?

-what as you see it triggers the requirement for a report if a condition is not met?

-what proof do we have to provide to code enforcement staff that a condition was not met?

-have you noted the PC on this property?

-if so, have they recently removed some or all of the PC on site?

Thanks! we’ll get to the bottom of it, talk to you soon.”

On April 21, 2016 the dialog with Rose continued with my response: “In past years Presidio clarkia have been observed on this property and the adjacent property. This site is noted in the CNDDB as having Presidio clarkia present and is called the Old Redwood Road population. The requirements clearly state a qualified biologist was to survey the site. That means there would be a written report with the results of the survey. If the City does not have a copy of that report, the terms have been violated. The COA’s do not address the impacts to habitat for the species, and how habitat should be protected. Because Presidio clarkia is an annual species, the protections put in place have to protect habitat more than individual plants. The CEQA Guidelines make it clear that when a special status species is involved, CEQA review is required. CEQA review still needs to be done on the project.” Rose responded: “That’s good information, so you do feel the applicant is out of compliance – maybe I should make a site visit right away, are you available to meet me?” My response: “If the biologist has not surveyed to site, then they are out of compliance. I am not available today to visit the site. This project requires CEQA review. I was never sent a copy of the approval, or any other information about the project approval, even though I had inquired about the project. When was the project approval issued? The date of the approval is August 11, 2015, but I corresponded with you on September 4, 2015, and the Presidio clarkia conditions were not in the permit at that time.” The response: “Correct, and the approval was amended, your help on that was appreciated – fast forward to now: I communicated with the applicant this morning who put me in touch with the contractor – I put the contractor on notice to respond how they are or are not meeting the condition – sounds like you feel they will not be able to demonstrate, so we’ll be looking at next steps right away such as SWO, etc – talk to you soon.” My response: “What is the latest on this? The conditions of approval, if not followed, should be amended to make sure the habitat for the species on the site is not impacted by the project. Water run-off into the habitat area should be prohibited/limited since it is the time the plants are blooming and setting seed.” Rose Response: “They responded but it was inadequate – I asked for more information and did not receive – so I’ll go see the Inspections Dept for next steps – talk to you soon.”

My April 25, 2016 communication to Rose: “I drove by the site on Saturday and it appeared some work was being done. What is the current status of the project?” Rose response: “I spoke with the contractor today: there is no work or staging at the unimproved area (upslope beyond a retaining wall)” My response: “Where is the biologist’s report, and where is the fencing around the potential habitat for the special status species?” April 26, 2016 reply from Rose: “There is no report, but I can speak with them about fencing” My reply: “The biologist’s report is how the fence location would be determined. Will you be stopping the project until there is the required CEQA review?” Rose’s reply: ” If we need to; but, wouldn’t the fence encircle all undeveloped area? There is no work or staging in the undeveloped area btw” My reply: “CEQA review is the process by which it is determined what mitigation measures are appropriate to protect a species on a particular project site. Without CEQA review the project is in violation of the law.” I received no response from Rose to this last email.

On May 10, 2016 I received an email from Scott Miller the Zoning Manager for the City stating in part, “I am reviewing the situation at 5150 Redwood Road and hope to have a formal response to you in the next few days.” This was followed by Mr. Miller’s letter of May 19 where he mentions condition of approval #23, but does not explain why a biological survey of the site never occurred.

After more refusals to answer why a biological survey was not performed, even though the COA’s do not make the survey optional, on July 1, 2016 I went to the offices of planning and asked to review the file for the project. There was nothing in the file but my email correspondence with Rose and Miller and the original application and a set of plans. The signed copy of the Approval was nowhere to be seen. There was no communication from the project applicant, no records of phone calls, no record of the September 2015 HOLD, or the May 13, 2016 site visit referred to in the letter. I asked Mr. Rose where a  signed copy of the Approval was and he said he did not have a copy, which I found hard to believe. COA #6 requires a copy of the approval be attached to the submitted plans. As a result I went over to the building department and got a copy of the plans for the project with a copy of the approval attached. The copy of the approval attached to the plans does not have COA 23. As anyone can see when looking at the Approval sent to me by Rose, there is a large blank space on Page 8 of the document after COA #22. COA #23 start on the next page and then the signature line is on Page 10. The Copy of the Approval that  is attached to the plans in the Building Department stops at COA 22 on page 8 with a signature line right below the conclusion of COA #22. Mr. Miller’s signature is on Page 1 of the copy attached to the plans, so it is a signed copy.

The project at 5150 Redwood Road is minor, and the impact to Presidio clarkia during construction could easily be mitigated. COA #23 would be similar to what the mitigation measures for the project would have been had CEQA review taken place. But without the biological survey of the site, it is impossible to know what impacts to Presidio clarkia have occurred. More importantly, and probably the reason the City cut corners, is that CEQA requires biological surveys before project approvals. Because Presidio clarkia is an annual species, and it blooms between April and July, and surveys must take place during the blooming season to ensure proper identification of the plant, the project would have been delayed a year.

Ultimately, what occurred with this simple problem is reflective of the ethical climate in the City of Oakland where we have a police department scandal and a Mayor more concerned with City employees leaking scandalous information than the public’s right to know.

There can be no conclusion other than the document sent to me on April 20, 2016 that purported to be the Approval for the project at 5150 Redwood Road is a FRAUD. What will the City of Oakland do?



DOJ Confirms: Holders of Securitized Loans Cannot Be Traced

In a filing unsealed on June 3, 2016, the Department of Justice (DOJ)  confirms what many of us have known for years. Nobody, not even the government with massive resources can determine who owns your loan has the right to collect on your mortgage.

The information comes from case files unsealed on June 3, 2016 by  federal Judge Yvonne Gonzalez Rogers of the Northern District of California in the case of the United States v. Discovery Sales, Inc. The case involves some 325 fraudulent loans originated by Discovery Sales, Inc. (DSI) between 2006 and 2008, many of which were then sold to Wells Fargo Bank and JP Morgan Chase who eventually sold them into securitized trusts.The Discovery Sentencing document on page 9 states:

The originating lenders who made loans to purchase DSI properties, including Wells Fargo and  J.P. Morgan Chase, generally would not keep the mortgages and thus did not end up losing money as a result of the DSI fraud scheme. Instead, they would sell the mortgages to other banks who would package them in securities that were sold to other investors. These securities failed when the underlying mortgages went into default. It was impossible to trace the majority of the mortgage loans on the over 300 homes sold by DSI that were the subject of the FBI investigation; it would have been harder yet to identify individual victims of the fraud given that the mortgages were securitized and traded. (Emphasis added.)

 To add more outrage to this case, while the government acknowledgedownloads the damages from the fraud scheme resulted in $75 million in damages, the amount being paid by DSI in restitution is $3 million to Fannie Mae and Freddie Mac. That is all, along with an $8.5 million fine that the government will pocket. Once again the government is taking all of the money from a settlement with a fraudulent mortgage lender, and giving nothing to the people who were damaged.The banks were not charged even though it states in the sentencing document:

During the time of the information, DSI worked with two “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase. Certain employees and managers of those two preferred lenders knew about the incentive programs offered by DSI and the builders, and knew that the incentives were not being disclosed in the loan files.

Even though Wells Fargo and JP Morgan Chase had the information that the loans were fraudulent, as per what has become standard procedure, the DOJ brought no charges against the banks. There is nothing new about banks selling off defective, fraudulent loans to securitized trusts, and once again the DOJ has found no reason to prosecute too big to fail banks for fraud.

There is much more to this story which we will not delve into at the moment, including the history of the Seeno family who owns DSI and their connection to other funny business.

Disorder in the California Courts

We assume when we go to court the judge will be impartial and give equal weight to both sides arguments and make a thoughtful, just decision based on law and precedent. If you go to court in California as a self-represented litigant as we did, you soon learn that justice is a myth. Between judges who assume you do not have an attorney because you do not have a viable case or other reasons, and the corporate law firms that will lie and cheat to win their cases, people in court without attorneys representing them have little chance of success.

Judges have a duty to make disclosures of potential conflicts of interest anytime “a person aware of the facts might reasonably entertain a doubt that the judge would be able to be impartial.” The California Code of Judicial Ethics canon 3.E(2)(a) provides “[a] judge shall disclose information that is reasonably relevant to the question of disqualification under Code of Civil Procedure section 170.1, even if the judge believes there is no actual basis for disqualification.”

Our nightmare began in 2005 when we purchased our home in East Oakland, California.  Unknown to us at the time, the mortgage broker we used forged, backdated and altered figures on the loan application used to obtain the mortgage. We did not learn about this fraudulent document until 2011 when we received the forgery along with other loan related documents. In 2005 when we were going through the loan process I had a feeling that something was not right, but nothing about the process caused us to see a red flag warning of the fraud.

After receiving the forged document we started investigating how to go forward. I spoke with attorneys, none of whom were willing to take on the case because as one told me “you cannot win.” I assumed with such a blatant case of fraud, the case would be winnable. What those attorneys did not explain was that the reason you cannot win. Because of the bias of judges and the court system the system is corrupted. The courts in California have been taken over by the influence of the big law firms that represent the banks and big corporations. Judges rely on clerks and others to do the work for them. Corners are cut by all in the court system, and often judges fail to even read papers, and leave all the work to clerks and research attorneys. Assumptions are made and facts are ignored. Judges and justices take the easy way out based on the parties and the attorneys representing them. Those viewed as the most powerful, win. Underlying this shortcut is the appeal process where the party who is the respondent in the appeal becomes the representative of the court’s decision.  No judge wants a non-attorney defending their decision in an appellate court.

We made the decision to go forward on our own and filed a case in Alameda County Superior Court in February 2012. The case was assigned to Judge Marshall Ivan Whitley. I can now say that I doubt Judge Whitley read a single document in the case. Because Judge Whitley never disclosed his connection to defendants in the case I assume all the work was done by clerks and research attorneys and the judge never reviewed any of the papers in the action.

Judge Marshall Whitley

Judge Marshall Whitley

Judge Whitley had connections to three defendants in our case that required disclosure on the record. Two of those defendants, Najarian Loans, Inc (now NL, Inc.) and RPM Mortgage (RPM) are effectively the same company, alter egos in legal terms, because they have the same board of directors and operate from the same address. Wells Fargo Bank was named as a party because in October 2011 Bank of America told us Wells Fargo owned our mortgage. After we filed suit Wells Fargo alleged that a securitized trust they are trustee for, SARM 2005-15, owned the mortgage. To this date no one has been able to provide definitive proof of the identity of the owner of our loan. What we were unaware of at the time was that Judge Whitley had multiple loans with these parties, and in March 2012, the month after he was assigned the case, he signed for a new loan with RPM and Wells Fargo agreed to subrogate the loan they had previously made to Whitley to the new RPM loan. Considering ours was a case involving fraud in the origination of the mortgage for our home purchase, the fact that the judge was involved in originating a new home loan with defendants in the action while handling our case is important. This is exactly why “a person aware of the facts might reasonably entertain a doubt that the judge would be able to be impartial.” Even though Judge Whitley had a duty to disclose this information he was silent. Most of the defendants demurred to our complaint, but three parties did answer. In October 2012 Whitley sustained the demurrers allowing us leave to amend. As a result we filed a first amended complaint (FAC). All of the defendants demurred to the FAC and instead of consolidating the hearings as he had done with the demurrers to the original complaint, Whitley bifurcated the hearing dates. About half the defendants had a hearing in early January 2013 and the others for April 2013. At the January hearing Whitley sustained the demurrers but without leave to amend the complaint. He dismissed our complaint against those defendants. Bifurcating the hearing dates meant we would not be able to appeal all the decisions in a single action because the time limit to appeal is 60 days after the ruling. We filed an appeal to the first dismissals in March 2013. Before the hearing on the second set of demurrers, Whitley retired as a judge. The case was assigned to Judge Ballachey, who immediately disqualified himself and the reason for the recusal was never disclosed.

Judge Lawrence John Appel

Judge Lawrence John Appel

The case was then assigned to Judge Lawrence John Appel. In May 2013 Judge Appel sustained the demurrers without leave to amend, citing in his ruling Judge Whitley’s October rulings as a major part of the basis for his decision. We then appealed Appel’s decision, creating a second case in the appellate court.

The first appellate case was assigned to a three judge panel that included an Alameda County Superior Court judge, Steven Brick, who was serving as a Justice Pro Tem for the appellate court. Unknown to us at the time, Ju[dge]stice Brick was retired from the law firm of Orrick Herrington & Sutcliffe (Orrick). One of Orrick’s long-time and ongoing clients is Wells Fargo. That would not create a conflict, but what does create the conflict is that according to Brick’s Statement of Economic Interests, Form 700, he receives between $10,000 and $100,000 in retirement income from Orrick each year. That does create a conflict because Brick is compensated by Wells Fargo through Orrick. Under the California Code of Judicial Ethics canon 3E(4) appellate justices are charged with disqualifying “himself or herself in any proceeding if for any reason: (a) the justice believes his or her recusal would further the interests of justice; or (b) the justice substantially doubts his or her capacity to be impartial; or (c) the circumstances are such that a reasonable person aware of the facts would doubt the justice’s ability to be impartial.” Brick had more conflicts than the Orrick money. Whitley was Brick’s supervising judge when Brick was first appointed to the bench in Alameda County. Given that Whitley had just retired, it would have been a slight to rule against his former supervising judge in ruling on the appeal. Brick wrote the opinion for the appeal that affirmed Whitley’s ruling with the other two justices agreeing. Unfortunately, in September 2013 when the appellate decision was issued, we did not know about any of these conflicts. We did not research the issue of judicial conflict because a judge has a duty to disclose his conflicts or to recuse him/herself.

Judge Steven Brick

Judge Steven Brick

Further research revealed that Brick has another troubling conflict in his resume. According to his resume he is a founding member, past President, and presently a member of the Board of Governors of the Northern California Chapter of the Association of Business Trial Lawyers (ABTL). Because of his membership in the ABTL and his position as a judge Brick receives “education” from the exact groups of lawyers we were battling in our case. On its website the ABTL declares it is “dedicated to promoting a dialogue between the California bench and bar on business litigation issues.” According to financial disclosures, Brick has regularly attended the annual meeting of the ABTL and ABTL has paid his way to the event, an amount that is near $2000 dollars annually. The Code of Civil Procedure section 170.9 prohibits a judge from accepting “gifts from a single source in a calendar year with a total value of more than two hundred fifty dollars ($250).” Unfortunately, the same code section provides a loophole that allows for unlimited spending on judges when it is for certain purposes, like attending an ABTL event .

Justice Therese Stewart

Justice Therese Stewart

The second appeal in our case went to the same division of the appellate court, but this time two of the justices on the panel hearing the case were not involved in the first appeal. The newest member on the panel was Therese Stewart, the first openly lesbian justice in the State of California who was appointed to the court in 2014 shortly before our case was heard. Shortly before the hearing on our case, the law firm of Bryan Cave which was representing Bank of America, MERS, and Wells Fargo substituted in a new lawyer, Robert Esposito, to handle the oral arguments. Esposito had worked with Stewart in defending gay marriage. Stewart had led the City of San Francisco effort to defend gay marriage, and Esposito was working with attorneys at his law firm Bryan Cave filing briefs in support of the positions Stewart was advocating in representing the San Francisco. Clearly they know each other and have worked together on finally legalizing the emotional issue of gay marriage. There is no doubt gay marriage is very important to Justice Stewart and Mr. Esposito, and that is exactly why Justice Stewart should have recused herself.

We learned of Judge Whitley’s disqualification just before we were to file our reply brief in the second appeal. We raised the issue at that time. In the ruling that affirmed the trial court ruling, the appellate court said we had not brought the issue to them in our opening brief and therefore they would not consider the issue. Case law is very clear, the rulings of a disqualified judge are void or voidable, either way they do not count.

We went back to Judge Appel and asked to have the earlier rulings thrown out because of the disqualifications of Whitley and Brick. After filing the writ proceeding to get the earlier rulings thrown out, we looked into Judge Appel’s economic disclosures. What we found was that he has between $300,000 and $3 million in money market accounts being managed by Bank of America and their subsidiaries. We then filed a verified statement objecting to the hearing before Judge Appel, as provided for in the Code of Civil Procedure section 170.3. The statement set forth the facts constituting the grounds for disqualification of the judge. Under the code a judge has ten days to respond with “a written verified answer admitting or denying any or all of the allegations contained in the party’s statement and setting forth any additional facts material or relevant to the question of disqualification.”  At the last minute on the last day to respond, Judge Appel responded, but did not admit or deny the allegations in our statement, but instead made claims about the evidentiary value of the facts contained in our verified statement. Appel could have asked another judge to rule on the matter, or he could have recused himself, but he did neither. Instead he forced us to go the next step which was to file a writ of mandate with the appellate court to disqualify the judge. The case was again assigned to the First Appellate District, Division Two, where we had been with both of our appeals.

The appellate court summarily denied the writ. This meant there was no written ruling explaining why Judge Appel was not disqualified. The justice who signed the order? Therese Stewart who has a conflict through her connection to Mr. Esposito.

After four years in the court system, we did not have a single ruling issued that did not involve a judge or justice who did not have some reason to disqualify themselves. I have filed complaints with the California Commission on Judicial Performance. I wrote three letters to the presiding judge of the Alameda County Superior Court. No one has done anything about these abuses. As the Commission on Judicial Performance (CJP) admitted in its June 2012 report, over a 20 year period the CJP dismissed over 90 percent of the complaints it received but even worse the CJP dismissed over 98 percent of complaints received from litigant/family/friend were dismissed. The CJP does not provide explanation for dismissals.

The Center for Judicial Excellence put out a report last month using the CJP’s own data showing how few complaints are investigated. This report followed up on a a report by Joseph Sweeney of Court Reform LLC that compared the prosecution of judges in California by the CJP to prosecutions of judges in Arizona, Texas, and New York. California has by far the lowest rate of judicial discipline.

The California Supreme Court explained the purpose of the CJP: “In making our independent determination of the appropriate disciplinary sanction, we consider the purpose of a Commission disciplinary proceeding-which is not punishment, but rather the protection of the public, the enforcement of rigorous standards of judicial conduct, and the maintenance of public confidence in the integrity and independence of the judicial system. (Adams v. Commission on Judicial Performance (1995) 10 Cal.4th 866.)

The checks and balances built into the Code of Civil Procedure and the Code of Judicial Ethics are not working. It is time to change the laws to restore public confidence in the judicial system.  It is time for the legislature to clean up this mess and bring justice to the so-called system of justice we have in this state.