June Clarkson and Theresa Edwards Were Fired After Revealing Widespread Foreclosure Fraud

June Clarkson and Theresa Edwards Were Fired After Revealing Widespread Foreclosure Fraud

June Clarkson went to Ernie's Bar-B-Q in Fort Lauderdale to have lunch with her supervisor, Bob Julian; and some coworkers. It was a Friday in May 2011, the end of a hectic workweek at the local economic crimes unit of the Office of the Attorney General.

Clarkson, a small, lively woman with glasses and blond hair, had left a private law firm to accept the sub-$60,000-a-year job. She relished the idea of being a public watchdog, of digging into the records of companies to catch them trying to cheat customers.

"It was just right up my alley: people defrauding other people, companies defrauding the public. I thought it was the best thing that had ever fallen into my lap," Clarkson recalls.

After getting booted from the Attorney General's Office a year ago, June Clarkson (left) and Theresa Edwards started a private law partnership in Fort Lauderdale.
After getting booted from the Attorney General's Office a year ago, June Clarkson (left) and Theresa Edwards started a private law partnership in Fort Lauderdale.
Lisa Epstein was one of the first people to bring faulty documents to Clarkson and Edwards and is currently running for Palm Beach clerk of courts.
Lisa Epstein was one of the first people to bring faulty documents to Clarkson and Edwards and is currently running for Palm Beach clerk of courts.

She worked closely with colleague Theresa Edwards. Their typical assignments involved consumer fraud, but in 2010, they started getting calls from hard-up homeowners. Millions of families had faced foreclosure in the wake of the housing collapse; most had capitulated under the power of giant banks and simply surrendered their homes. But more and more, Clarkson was hearing from individuals who were fighting back.

These homeowners noticed mistakes in the documents that the banks were using as the basis to seize people's homes: strange signatures, missing information, notary seals with no signature, dates in the future. Skeptics began wondering whether these were in fact not innocent mistakes but symptoms of intentional and possibly systemic fraud. Clarkson and Edwards were some of the first public officials willing to listen to these accusations.

Clarkson noticed Julian's phone ringing during lunch but didn't pay much attention. They drove back to the downtown Fort Lauderdale office building they shared with several of the area's most powerful law firms.

Clarkson returned to her desk, reading through piles of documents. Recently she had been investigating Lender Processing Services (LPS), a company that, by some estimates, helped prepare paperwork for half the foreclosures in the country. Every time she found a red flag — a suspect signature, perhaps, or an intriguing memo — she went next door to Julian's office and showed him. But since lunch, he hadn't been acting normally, she thought. Clarkson came back a couple of times, and each time she announced a discovery, it seemed to pain Julian. Eventually he closed his door, but Clarkson knocked again. Julian just looked up at her. She thought he might be sick. "What's the matter?" she asked. "I'm doing a good job!"

"I know," she remembers him saying. She left and closed the door.

Edwards came back from a morning of depositions and stopped by Julian's office. She was tall and calm-voiced with reddish-brown hair, more experienced at the AG's office than Clarkson.

"Get June and come in here," he told her.

He cut straight to the chase: "You're both done at the end of the day. It's a done deal, all the way up to Tallahassee. You can either quit or be terminated," they remembered him saying.

Clarkson and Edwards left the office, stunned. Edwards had known Julian since law school, and the three of them had worked closely together. The two investigators considered themselves the hardest-working people in the office and had recently received a commendation for their work. Julian had encouraged them to go after the foreclosure-fraud cases with all they had, and they even helped win a $2 million settlement with the foreclosure law firm of Marshall Watson, which had been accused of fudging its documents. So what happened?

The women say that, at the time, they had no idea. But over the past year, as supporters have rallied to their side, they've started to believe they were ousted for political reasons. Going after powerful law firms and banks didn't sit too well with the state's new, business-friendly Republican administration, including Gov. Rick Scott and Attorney General Pam Bondi.

Since their ouster, the women have moved on to private practice and become heroes to some, though their power in court is a shadow of their former influence. Meanwhile, the mortgage industry has not exactly gotten its papers in order.

The complicated system of investments that underlies the industry — mortgage-backed securities, government-sponsored enterprises — may seem distant and fanciful to buyers when they sign on the dotted line and buy into the American dream of home ownership. But the demanding letters that can suddenly show up in the mail — pay now or lose your home — are undeniably real.

What if the documentation to back up the bank's claim to your house were missing or incomplete, if the bank was deriving its power from a few pieces of paper slapped together at a document mill? How would you know?

One Saturday afternoon in May 2010, Clarkson was manning the attorney general's table at a mortgage-fraud seminar at Florida International University in Miami. Much of the discussion was about two-bit scams, like companies offering too-good-to-be-true loan modifications. A woman came up to the table. "I've been trying to get in touch with you," said Lisa Epstein, a sharp-eyed brunet in her 40s.

Epstein, a registered nurse, was going through a divorce and had started to worry about money. She asked her lender, Chase Bank, to help work out a solution that would lower her monthly payments. "I had excellent credit and had never paid a bill late," she says. That inquiry led to two surprises: First, Chase told her that another bank, Wells Fargo, was involved and would not allow any sort of loan modification. Second, after weeks of persistence, Chase suggested that no modification would ever happen unless she stopped paying her mortgage for three months.

1
 
2
 
3
 
4
 
5
 
6
 
7
 
All
 
Next Page »
 
My Voice Nation Help
10 comments
Stefan Kamph
Stefan Kamph

Sam, Lynn Szymoniak stopped paying her mortgage to protest a raise in her rates that was not in accordance with the foreclosure terms; as an attorney she knew what she was getting into with the risk of foreclosure. Lisa Epstein's house went to her ex-husband in a divorce, and she had only stopped paying because the bank told her to. Amos Delva is still in his home, paying a negotiated $600 in rent to the third-party buyer who bought his home for 60k last year, not realizing the owner was still fighting to stay in it. They're waiting for the case to be resolved. Delva voluntarily moved for a loan adjustment anticipating a decline in the construction industry; he made payments at a new "trial rate" on time before the bank announced that it was foreclosing. None of these homeowners are faultless but they do not have traditional defaults along the old "deadbeat" model you hear about.

Sam Smith
Sam Smith

Very interesting article.  But I wish it continued into whether or not the home owners had defaulted, were in default, and how to address that issue.  Is it fair for banks to press forward with foreclosure if they don't have all the paperwork in order, I would say no, but is it fair for home owners not to pay their mortgage for years and years and expect to modify a mortgage in default or get a home scott free?   I wonder where this whole mess leaves the rest of us, those that pay our mortgages?  The banks are not going to lose money on this deal, they will raise the cost of borrowing and refinancing on the rest of us.  

iced tea party
iced tea party

But these bankers omitted important information from loan applications -- you know, like INCOMES -- so that they could make it seem as though folks earning $40K annually could afford a $650K house on an adjustable rate mortgage set to balloon to 5 to 10 to 15 percent over the course of a few years. When the person filling out the documents tells you to "leave that space blank," what are you supposed to do? It's your American dream, after all. That "first wave" is over, and they're foreclosed (or in the process -- validity of the paperwork be damned).Now we're getting to the point where prices are *temporarily* stabilizing. So underwater homeowners are the ones who need help. Why not renegotiate the principal balance for those who have continued to pay and were RESPONSIBLE to begin with? Not to pay off the banks or state governments in hopes that they use the money to aid homeowners (instead of sitting on capital or plugging those state budget holes). You make it seem like everyone who is underwater is just looking for a handout. I think underwater homeowners who are current on their mortgages are looking for a correction to their principal balances where the prices reflect *real* market value, while taking in mind the amount which they've already paid. Because we know that the home "values" from 2003 to 2008 were deeply skewed by greed.

Aaa
Aaa

What a crock. You either pay your mortgage or you don't. If you don't, then the bank should take their security back. Fake papers or not, were the funds provided at closing by the bank fake? This is just a ploy for underwater homeowners to try to keep their homes a little longer at the expense of the banks. Man up people, you failed on your part now it's time to leave. You gambled and came up short; don't blame the casino, it was you rolling the dice. What a society we live in. Everything is becoming an entitlement....

Sean
Sean

I had an in-office interview with Clarkson and Edwards, both because I worked with David Stern's office and also because I had an insane mortgage case from Marshall Watson's office.  Sad that the Florida AGs office is covering all of this up and letting the crooks get away with stealing peoples lives and homes.  We can't stand for this, as a society. My case, 3 years later is still open in the courts - even though Watson's office sent me a motion to dismiss that they filed.  Still major problems in our foreclosure systems today and none of our government officials will stand up for us, their constituents.  They're too indebted to the companies paying for their elections.

nats
nats

 Thank you.

Frank Welles
Frank Welles

The Office of the Florida AG is now covering up the new wave of commercial RoboSigning. Basically they are ignoring all the small business owners who have discovered fake assignments from commercial lenders, the moment an attorney finds a fake banker, a backdated document, the bank or servicer just resubmit new assignments. The next wave is in commercial lending and its funny how the AG who took bank money for the election now fails to look at the bogus assignments and the fake bank signatures being submitted. No investigation. I just read online the residential settlement money is being used to plug budget holes. Florida is beyond a Banana republic, its a republic of private interests, foreclosure mills who bought the Florida AG and the banks that supported them.

Crmgrdsprt
Crmgrdsprt

Edwards & Clarkson, 412 NE 4th Street, Fort Lauderdale 33301 Phone: 954-463-5266

nats
nats

Any idea how to contact their firm if someone wanted to hire them? They don't seem to be in the phone book, and internet searches only turn up reams of articles about them and this fiasco.

kumite
kumite

@Aaa hey stupid who ever you are....who signed the note at closing ?...how many people are needed to make a contract..did they disclosed" at the table "on a liability instrument Article 3...then The Banks..( depositories)...write on back PAY TO THE ORDER OF....the banks...securities...NO DISCLOSURE UNDER RESPA 12 CFR 226...CREATOR THE SIGNOR...ISSUER...CREDITOR....IS THE BUYER...with his signature !...the Note is then pooled Art 8 becomes a security....not disclosing these facts and make changes to a note..."extinguishes the liability of the buyer"...since they actually are "third parties investors in transaction ..." with a superior claim on that not...not only that.."the deal becomes NULL AND VOID BY INITIO"....from the beginning....for who you working ?...is your revenue investment damaged ?...how about JUSTICE ? ...in a society  where...things are looking real but are not...Public Policy 73-10...read and ...learn and shut up !

 
Miami Concert Tickets
Loading...