FROM: Robin Basichis
Case Letter for Joe Jones
April 21st, 2021
To the Honorable Judge Swigert,
Your honor, in 2009 I became one of the first loan modification specialists licensed by the State of Nevada - under 645F of the Nevada Revised Statutes. This license was assignment allowed me to assist homeowners who found themselves in financial hardship due to the economic turndown of 2008. My role was to act as a negotiator between the borrower and the banks represented council or counselors at closed door AB149 Hearings.
When I first began as a negotiator, I found it difficult to help borrowers who were in financial duress and losing their homes. Homeowners fell victim to the banks, and the banks were unscrupulously lying and illegally foreclosing on homes at random. There was little being accomplished to help borrowers receive a reduction in principle, or any help restructuring the loan, such as a loan modification.
For several months I became frustrated and was at a loss. But, one day I got lucky. A client came to me with a report, they received from a company called Property Defenders, owned by John Stellate. The report was called a Forensic Audit. Forensic audits are created by accountants, private investigators, and professional auditors, some, former IRS agents. The audit demonstrated the loan level data files of the tranches where the loans were being held. These reports clearly revealed where the loans were and who owned them, solving the biggest riddle of them all, who owned the Note and who owned the Deed of Trust?
In most cases, the asset (Your Mortgage) was sold off so many times that the deed of trust became separated from the note. The note identifies the debtor, and the deed of trust secures and protects the note. There were countless banks, all laying claim to ownership of the same property without documental proof, many of them performing illegal foreclosures and getting away with it because no one was guarding the gate.
These forensic audits quickly became the holy grail for future negotiations at these hearings. With this documentation, I was able to disclose to a bank’s representative that the loan they were laying claim to, was in fact not their property without them being able to produce the original note and the deed of trust right there at the negotiator's table. It became the exception, rather than the rule when a bank was in procession of both the note and deed of trust. They still continued doing illegal foreclosures on-masse, until the state of Nevada made it a requirement that banks must produce both instruments before moving forward with a Notice of Default and a Foreclosure Sale.
When banks did not have the documents, which was normally the case, they were faced with two choices. They could either return at a later date or go look for the proper documents, which they didn’t have. Or they could negotiate with the homeowner right there and then during the mediation. Once the rules were changed the AB149 mediation process gave the homeowner a huge advantage.
To make the public aware that I had discovered a way to save their properties, I began broadcasting over the radio, on KDWN in Las Vegas. It was a call-in show, and I did everything I possibly could to educate the public on their property right and how to defend them. We had several guests on the program, such as top real estate brokers, high profile CPAs, real estate attorneys, politicians, casino owners, IRS agents, and the list goes on.
During the show, I would continually plug Property Defenders and push people who were losing their homes to acquire a work product from them. When they did get their work product and brought it to me, I would use it as my main negotiating tool. No note, no deed of trust – no foreclosure.
The banks were encouraged by the state to soften up their stance, and they did. Property Defense was not the only company producing forensic audits, and I wasn’t the only one using them. Word spread, and when that happened the banks were put in a position where they had to play ball. Quite often I was able to get homeowners substantial loan reductions, and have their loan restructured at a lower rate - fixed rates that were congruent with the interest rates of the time. Overall, I was able to keep 125 to 150 people in their homes by negotiating sensible terms. There were very few losses on my end. The only time I did lose is when the homeowner did not have the means to pay or was in so much personal debt they couldn’t qualify for the program.
Here is my question; How could someone be arrested and indicted for something when they weren’t breaking the law? There was no law in place regarding the production and sale of forensic audits. The audits assembled by Property Defense found relief for over 600 homeowners in the Las Vegas Valley. Out of all the clients that were served only four complained. All of those who did complain admitted to a grand jury during testimony, that they never read or even looked at the documents that John had given to them. They were instructed on how to use the work product but did not listen or care to understand what they were purchasing. They were just looking for a quick way out to save their home without doing their homework. They neither scheduled nor attended a mediation, the place where the forensic audits could be applied.
These clients never came to me or any other foreclosure specialist to seek remedy because they didn’t understand what they had purchased. Many people panicked, paying out money for bogus programs that went nowhere. Homeowners were being duped time and time again by rogue companies, who promised the world and produced nothing.
This was not the case with Property Defense. If you listened when the audit was explained, you would move on to the next step and find a professional to work with you. It would have been interesting and advantageous to have had access to the minutes from the testimonies given by these four witnesses who faced the Grand Jury. It is my belief that the Attorney General’s Office used these plaintiffs as a foil and overreached their authority by indicted John. It was an incitement conducted under false pretenses. It was wrong to indict a man for a crime he didn’t commit. There were no laws on the books that made selling forensic audits a crime, without taking the time to ever look at the law.
Prosecutors indicted 123 foreclosure specialists for similar counts of alleged crimes. To my knowledge, most of them plea-bargained to avoid jail time, to yield to a law that at the time was nonexistent. During John’s Grand Jury trial, not one of the alleged victims ever mentioned anything about going after a loan reduction by way of the AB149 program. None of them mentioned trying to restructure their loan through a modification that would reduce the rate and term. Some of the plaintiffs admitted openly they were not sure what they were getting when purchasing the forensic audit.
Right at the beginning of the Property Defense contract, it states in uppercase bold letters that this agreement does not include loan modifications, loan forbearance, or that any negations be held on behalf of Property Defense. Why didn’t they read and understand this disclosure? Property Defense made it plain as day that negotiations would be done on behalf of the borrower either by themselves or with the aid of a third-party entity, such as an attorney or foreclosure specialist.
Anyone who has applied for and received a mortgage should know that when they sign a contract they must abide by the rules and conditions of that contract. These four clients who stood in front of that Grand Jury apparently did not grasp the concept. Some even took their case to small claims court, where they all lost. The HDF has a much lower burden of proof than the higher courts, and the judges threw the cases out. After exhausting this remedy, they decided to use the Attorney General’s office as a collection agency on their behalf.
The rules were spelled out quite clearly in layman’s terms within the Property Defense contract. I could read it, the client could read it, and I’m sure your Honor could read certainly read it without question. But The Attorney General’s office read the case, looked at the counts, and still decided to indict. And why not, they figured no one would notice. It was the political hot spot of Catherine Cortez Masto's campaign.
In the October before the November election Senator Masto ran for office, she had her task force arrest 42 individuals on mortgage fraud. Every case was touted by her in the paper and in the press. She seemed so revved up to indict people in an area of the law that she, her investigators, and research team failed to discover that there was no such law on the books at the time to force indictments on a work product like John’s.
Many names were tarnished, many lives were ruined, not all were innocent, but many were falsely accused. I have to ask myself, what happened to the real players who caused this mess in the housing industry by playing games with the lending laws? The bankers, financial service professionals, speculators, lawmakers, or the group of financiers who created the mortgage-backed security in the first place. Where are the ones who caused the mess of the housing bubble, and threw the country into one of the worst recessions in history? Where are they now? My guess is they are living comfortably in the Hamptons during the winter and summering in warm places like Miami during the winter. Meanwhile, the government was content to go after the little guy to advance a political agenda.
At a time when the rules were vague and there were large patches of grey areas in the financial space. The Federal government had no rules or contingencies in place for this, a housing meltdown. A meltdown that carried a magnitude of shockwaves that this country had never experienced before – so for a while it became a free for all on both sides of the spectrum.
Your Honor, John and I were in the midst of this horrible crisis, and we were both looking for answers that would save homes. We went above and beyond our fiduciary duty to educate the public about their property rights. Property Defense spent 14 months to create a patent (A Method and Process of Removing a foreclosure Via Judicial Determination.) In one case Property Defense paid a lawyer out of pocket to defend an older woman and her husband from being evicted from their home. It was a special case, where the homeowners were about to be foreclosed on a few days. John stepped in and stopped the sale using his own dime.
It would be hard for me to believe or understand why someone who has been accused of stealing would pay out of pocket to rescue an older couple in crisis. I know from personal experience that this program works. It is my belief that Mister Stellate fell victim to a political advantage during election time. He found himself in the crosshairs of some immensely powerful people that did become scandalized with the information that Property Defense was giving. Nevadans over the radio, and by way of mouth and seminars. He had every right to say what he was saying, and the public had every right to hear it. I ask for you to take all of this into consideration and let Mr. Stellate go free. Let him go back to his life and put all this behind him. I am sure he has learned his lesson that no good deed goes unpunished.
He never regretted what he had done to help homeowners, even after facing a grueling seven to eight years of pure stress and misery over this trumped-up legal threat.
I ask your Honor, on behalf of myself and the Las Vegas community to let him go. Free him from all of this. You have the power to decide.
Hopefully one day the legal system will investigate these prosecutors who have done horrible things to innocent people. It would only be fair to hold those accountable and responsible for their pretense in a fight for justice. The facts should be known that they were using their prosecutorial powers for political gain at the expense of others.
Kindest Regards,
Word Wizard
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