The beginning of a snow ball?
Quoting myself from earlier in this thread:
[quote=SK in CV]
Another party that may have some interesting input is the office of the US Trustee, as they did in this case. I spent a lot of time working in the bankruptcy system in the early 90’s, and their aggressiveness varies dramatically from district to district. But there will be cases where they have standing. And it wouldn’t surprise me if they’re the ones that get the snow ball rolling. Bankruptcy judges tend to give them more respect than either debtors or creditors. And there is nothing more dangerous than a pissed off bankruptcy judge.[/quote]
This time, a case in Connecticut, where a lender seems to have some severe conflicts as to when documents were created, possible purjury, and the Office of the US Trustee is getting involved with a Rule 2004 exam.
For those not familiar, the US Trustee is an office controlled by the DOJ, in charge of administering and overseeing some functions within the bankruptcy system. Among other things, they appoint trustees and examiners (with court approval). They have standing in every bankrupcty case, and the bankrupcty court generally give them great deference.
Their involvement in bankruptcy cases varies from almost invisible to heavily involved at every stage. In this case, the US Trustee seems to have called bullshit on a lenders submittal of what appears to be either wrongly dated, recreated, or totally falsified documents.
The United States Trustee has reviewed the documents filed by Deutsche in this case and
has concerns about the integrity of those documents and the process utilized by Deutsche….Bankruptcy Courts have discussed the need for secured lenders to provide accurate information in filings before the Court… Consequently, “cause” exists authorizing the issuance of a subpoena to compel document production under Bankruptcy Rules 2004(c) and 9016…
This is bad news for lenders. It is more than a few isolated incidents now. It seems that for at least a few years before the shit hit the fan, originators, lenders, and subsequent note buyers (usually securitized mortgage trusts) totally ignored rules, regulations, in some cases, laws, and almost always the trust agreements and loan servicing agreements governing the handling, recording and endorsements of original loan documents.
If the involvement of the heavily independent office of the US Trustee continues, it may just bring the loan securitization industry down.
