Evidence Suggests Romney Finance Chair Conspired With Another GOP Donor To Help Clients Commit Tax Fraud

Steve Dibert, MFI-Miami

In 2010, while doing research for my client, Lynne Lucas, her attorney and I discovered many problems with the way Orlans Associates, operated by Linda Orlans,  a major GOP donor and former Chair of the Michigan Chapter of Americans For Prosperity, handled her for foreclosure including robo-signing, document fraud, etc. and this led to other major issues when it comes to Fannie Mae and Freddie Mac.

My staff at MFI-Miami soon discovered that not only was Orlans Associates exploiting the ignorance of Michigan Treasury officials who were under the false impression that Fannie Mae and Freddie Mac were government agencies but another foreclosure mill, Trott & Trott operated by David Trott, Chairman of Mitt Romney’s Michigan Finance Committee was also using his political influence among members of GOP to exploit this misconception.  During the course of the investigation, MFI-Miami also learned that both Orlans and Trott were exploiting the inability of the County Register of Deeds offices across Michigan to refuse the recordation of documents by filing mortgage assignments and affidavits with forged signatures and bogus notary seals.

They also exploited the limited legal authority of the County Register of Deeds by claiming on property transfer affidavits and other documents a tax exemption under Michigan law that exempts government agencies from having to pay the Michigan Real Estate Transfer Tax.

Orlans Associates and Trott & Trott claim on thousands of documents they filed across Michigan that both Fannie Mae and Freddie Mac are government agencies due to their status as a Government Sponsored Enterprises or GSEs.  Therefore, both Trott and Orlans claim any mortgage servicers assigning properties to or from Fannie Mae or Freddie Mac are exempt from paying the Michigan Real Estate Transfer Tax.

However, this contradicts what executives from both Fannie Mae and Freddie Mac have acknowledged in depositions and in public since the 1990s that they are not government agencies.  Fannie Mae was privatized in 1968 and Freddie Mac was privatized in 1980.  Even now in this post economic apocalypse era we live in, they are still considered private companies with the federal government owning the majority of the stock.

As my staff began looking at the dollar amounts that are owed to the state and the counties, I was shocked at the dollar amount.  Given Michigan’s economic problems, I was more surprised that the Michigan Department of Treasury who has a reputation for pursuing business owners for not paying state sales taxes like mafia capos, had not used their resources to collect this money.  After all, the banks along with Fannie Mae and Freddie Mac have cheated the state out of roughly $1.2 billion in unpaid state and county Real Estate Transfer Taxes since 1999.  Yes, that is billion with a “B”.  From that $1.2 Billion nearly $800 million should have been contributed to the School Aid Fund.

Romney also took a hefty check from T. Martin Fiorentino Jr., who raised $102,900 for Romney from Lender Processing Services, the notorious contract processing company that both Orlans and Trott & Trott utilize to to expedite foreclosure processing and who was reprimanded for “unsound practices related to residential mortgage loan serving and foreclosure processing’’  when the government began investigating them.

After what seemed like an Arthurian quest for the Holy Grail,  I did find a County Register of Deeds, who did listen and actually understood what was going on because unlike most of his colleagues, he had been following what Essex County Register of Deeds John O’Brien was telling the media in Massachusetts and what Guilford County Register of Deeds Jeff Thigpen was telling any one that would listen to him in North Carolina.

After giving him the Reader’s Digest version of Mortgage Funding 101, Ingham County Register of Deeds, Curtis Hertel, Jr. felt strongly enough to proceed with legal action against the banks, Fannie Mae, Freddie Mac, MERS, about a dozen mortgage servicers, Orlans Associates and Trott & Trott for failure to pay state and county real estate transfer taxes on properties in Ingham County.  Hertel was quoted in the now defunct Michigan Messenger when the case was filed last year:

“I am thoroughly disgusted by the actions of Fannie Mae, What these internal documents show is that while Fannie Mae was being bailed out by taxpayers they were systematically pushing for citizens to be foreclosed. The reason for this is even worse. Right now we as taxpayers pick up the cost of every foreclosure, because we pay Fannie Mae’s loss in the foreclosure process. In other words they actually get paid more for a foreclosure than for a reasonable modification.”

In Fannie Mae and Freddie Mac’s defense they may have not known what was going on because like in most mortgages sold into mortgage backed securities controlled by the GSEs, the day to day servicing of each individual loan is left to mortgage servicer and mortgage servicer is responsible for hiring the specific foreclosure mill to handle mortgage assignments and foreclosures.  Because foreclosures are handled differently in each state, the servicers are at the mercy of the foreclosure mill handling the paperwork for them and it’s assumed that the lawyers for the foreclosure mill know what they are doing.