Nardi Depo Vol 1 - WaMu To JP Assignments

Lawrence Nardi - 5/9/2012
Page 1 IN THE CIRCUIT COURT OF THE FIFTH JUDICIAL CIRCUIT, IN AND FOR LAKE COUNTY, FLORIDA CASE NO.: 2009 CA 005717 JPMORGAN CHASE BANK, N.A. as Successor in Interest to WASHINGTON MUTUAL BANK, Plaintiff, VS SHERONE D. WAISOME, et al, Defendant. * * * * * * * * * * * * * * * * * * * * * * * * * * DEPOSITION OF: LAWRENCE NARDI, VOLUME 1 OF 2 DATE TAKEN: TIME: PLACE: MAY 9, 2012 9:03 A.M. 121 SOUTH ORANGE AVENUE SUITE 800 ORLANDO, FLORIDA CINDY CONNER, CSR, RPR AND NOTARY PUBLIC
REPORTED BY:
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www.firstchoicereporting.com
First Choice Reporting & Video Services Worldwide Scheduling
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A P P E A R A N C E S
RACHEL CREWS, ESQUIRE Gray Robinson, P.A. 301 East Pine Street Suite 1400 Orlando, Florida 32801 APPEARING ON BEHALF OF THE PLAINTIFF JACQULYN MACK, ESQUIRE Mack Law Firm Chartered 2022 Placida Road Englewood, Florida 34224 APPEARING ON BEHALF OF THE DEFENDANTS
ALSO PRESENT:
Mr. Sherome Waisome Mr. Nye Lavalle
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C O N T E N T S
TESTIMONY OF LAWRENCE NARDI, VOLUME 1 of 2 Direct Examination by Ms. Mack 5
- - - - E X H I B I T S PAGE DEFENDANT'S EXHIBIT 1 Letter dated 10/10/08 from Chase to Mr. Waisome DEFENDANT'S EXHIBIT 2 Fixed/Adjustable Rate Note DEFENDANT'S EXHIBIT 3 Prepayment fee note addendum DEFENDANT'S EXHIBIT 4 Mortgage DEFENDANT'S EXHIBIT 5 8/16/07 document with FHA identifiers DEFENDANT'S EXHIBIT 6 8/29/07 letter from Washington Mutual DEFENDANT'S EXHIBIT 7 Authorization for release of information DEFENDANT'S EXHIBIT 8 Loan history DEFENDANT'S EXHIBIT 9 Residential broker price opinion DEFENDANT'S EXHIBIT 10 3270 Explorer screen shot DEFENDANT'S EXHIBIT 10A 3270 Explorer screen shot 60 64 66 78 106 120 124 130 184 184 187
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- - - - DEFENDANT'S EXHIBIT 12 3/18/11 Reconciled market value DEFENDANT'S EXHIBIT 13 9/1/11 reconciled market value 190 198 DEFENDANT'S EXHIBIT 11 Income report card 187 E X H I B I T S (continued)
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BY MS. MACK: Q Hi, Mr. Nardi. My name is Jacqulyn Mack. And have you ever had your I P R O C E E D I N G S (On the record at 9:03.) LAWRENCE NARDI, having been first duly sworn to testify the truth, the whole truth and nothing but the truth, testified as follows: THE WITNESS: I do.
DIRECT EXAMINATION
represent the Waisomes. deposition taken before? A Q I have. Okay.
If you don't understand my questions,
please let me know because if you answer, I will assume that you understood it. If I am talking too fast, I'm But, again,
sure the court reporter will let me know. if you don't understand, let me know.
Please don't
answer with a shake of your head or an "uh-huh" or "huh-uh," because it doesn't come out very well. I will do my best to make sure that I wait until you are done with your answers. And if you could
please just try and do the same, that would make our record a lot clearer than if we talk on top of each other. If you need a break, you can just let me know or
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get up and walk out. That's up to you.
I think that covers it, so let's start with the basics. A What is your current occupation?
I work as the operations unit manager and a
mortgage officer for the bank. Q A Q And the bank is? JPMorgan Chase Bank, NA. Okay. And could you please tell me what your
job duties are? A I work with inside and outside counsel on I review business Basically
contested and litigated matters. records.
I review customer service logs.
anything that will get to the bottom of any given litigation situation or potential litigation situation in hopes of defusing it or coming to some type of resolution settlement before it ultimately ends in trial or litigation. necessary. Q school. A I attended high school at Fort Union Military I graduated in 1996. I went I appear on behalf of the banks when
That's generally what I do. And what is your education? Start with high
Academy Central Virginia.
to the Merchant Marine Academy in Kings Point, New York, class of 2000. And I took some additional postgraduate
studies in business management, but not to the degree
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level of at this point. Q And did you work while you were in college or
the marine -A While I was in college, I technically did work I was also I
as part of my -- I was a naval reservist.
working on a ship as part of my time at the academy.
also worked odd jobs and parked cars on the weekends to make extra money. Q What type of job duties did you have when you
were with the academy working with the Navy? A Well, I was in an engineering program, so I
worked in the engineering department on the ship. Q Okay. After you were -- after you graduated,
what jobs did you have after that? A I determined that my interest in engineering
was more personal than actually career, so I went to work for Citi -- Citi Cards. I started working on
their -- this was a -- this was, you know, right around 2000. The Worldwide Web was really starting to pick up, So
and online customer service was starting to pick up. I started to help them implement some online customer service, really rudimentary stuff, you know, review balances and chat with representatives and things like that. Q Nothing like you see today, but early stages. Okay. And was that from a technical aspect
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A Q A Q as -- when you -- you said you helped develop this customer service -- web-based customer service -A Q Right. -- is that correct? Is that fair enough -Correct. -- to describe it like that? Yes. Were you actually involved in the software and
programing of the customer service aspects or was it more just dealing with people? A More along the lines of developing it based
upon customer input and giving the software designers an idea of what we needed them for really, at that time, was basically like HTML coding -- which I didn't have any background in -- but letting them know what our customers were looking for, testing it, implementing it, and getting feedback from the customers on that side of it. Q A Q A Q A How long did you work in that position? About two years. Okay. I did. Okay. And what did you do next? And did you leave voluntarily or --
From there, I went into mortgage originations.
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A Q Q Q A Okay. I did that for a couple of years with a small They are also a service --
originator called ABN AMRO. I'm sorry. Q A I just misspoke. That's okay.
PHH Mortgage, which is now -- I think they're
called (inaudible) PHH now, but -THE REPORTER: saying. A PHH Mortgage. THE REPORTER: THE WITNESS: (By Ms. Mack) You're going kind of fast. I'm sorry. PHH Mortgage. Now, when you I can't understand what you're
were working with Citi, where was that -A Q Jacksonville, Florida. Jacksonville. Okay.
PHH, were you also in Jacksonville? I was. And as a mortgage -- working with the
origination at PHH, what were your job duties? A I was the originations officer there. I
worked with the borrowers on collecting documents, getting them prepared for their, you know, eventual closing of their loan; working with underwriting and making sure that the documents they needed to push the
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loan package forward were provided. Basically kind of
the air traffic controller of the loan originations part of the business. Q Okay. Now, at PHH -- are you from
Jacksonville? A I am not. I lived there for basically since I
got out of college. Q A Q Okay. About 12 years or so. Okay. With regard to PHH, did you -- were you
a supervisor or were you supervised? A I was not a supervisor. I had a -- I had
support staff, but they were pooled into groups that supported basically five or 10 other loan officers. I was supervised. I had kind of a head loan officer So
that was -- so we were in a pool. Q at PHH? A Q I would say it was also about two years. Okay. And were you let go or did you leave Okay. And how long did you perform that job
voluntarily? A Q A I left voluntarily. Okay. What did you do next?
Well, we -- that -- PHH Mortgage was leasing
space from Merrill Lynch, who has a large campus in
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that. Q And if you could just generally describe your Jacksonville. A friend of mine was working for Merrill
Lynch as a broker and investment adviser and got me interested in doing that, so I applied and became a broker and investment adviser for Merrill Lynch. Q Did you have to take any type of tests to
become a broker? A Q A Q I did. I took a Series 7 and Series 66 exams. Do you still have those licenses?
All right.
They are not current, no. Okay. And with regard -- and please don't With
take offense, but I have to ask these questions.
regard to those licenses, were they ever suspended for any reason? A Q No. Okay. And how long did you work with Merrill
Lynch as a broker? A Q A I'd say also about two years. Okay. It may have been a little bit longer than
job duties at Merrill Lynch. A My job duties were -- we worked with the
retirement services -- or I worked with the retirement services. I worked on the 401(k) and stock trading
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A Q portfolios for companies like Coca-Cola, Daimler Chrysler. It was just Chrysler at the time, I believe. Some of those plans
Kind of their major employee plans.
had actual trading accounts within them that allowed their borrower -- I should say their employees to trade live stock within their 401(k) plan, which was very interesting. But you basically had to have a broker,
someone licensed to actually complete those transactions. Q Okay. So that's where we came in. And I believe you said you were in that
position for about two years as well? A Q A About two years. And what did you do next? After that, I started work -- went back into I worked for a company
mortgages on the servicing side.
called ABN AMRO, which was the servicing division of LaSalle Bank. years. And I did that for, again, about two
I worked in their property preservation area,
working with abandoned and neglected homes that were in some stage of default. Q Okay. With -- let me just -- sorry. Go back
to Merrill Lynch. Did you leave voluntarily Merrill Lynch? Yes. Okay. The job with ABN AMRO, what -- if I am
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doing my math right, this is about 2008? A Coming into -- because we were purchased by And this was
Citi Mortgage and they laid everyone off. like late 2007, I believe. Q A Okay.
In fact, the reason I remember this is that I
walked out of ABN AMRO on -- I think it was September, one weekend in September '07. And then on Monday, I So I basically had
already had my job lined up at WAMU. no down time. 2007. Q
But I think it was basically the end of
Did you know that they were going to be
restructuring at ABN AMRO? A We were told -- when they first announced the
purchase, we were told nothing was going to change; that everything would be okay. And then within about 60
days, they came back and said, We changed our mind, we don't need anybody, and you are all going to lose your jobs, and basically said -- and then they said, Oh, but we need you to stay here until we close the doors, so please don't leave. I stayed on. I stayed on and took calculated
risks because they promised a pretty nice little severance package if you stayed on to the end. I kind
of rolled the dice on whether or not I would have a job
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walking out, and it just turned out just right. So I
walked out Friday and walked into the new job on Monday. Q A Q A One of the lucky ones -I think. -- at that time, it sounds like. A lot of the people left. The building was
pretty bare for a number of months after they made the announcement. Q find it? A A lot of people from -- Jacksonville is a There's a lot of How did you get to the WAMU job? How did you
pretty small -- I shouldn't say small.
jobs there, but it's a small world in mortgages there. Once you start working in mortgages, you're going to know just through, you know, attrition people that leave and come and go to different businesses. You're going
to have connections after you have been there a year. So I had people who had gone to WAMU years ahead of me, and then some had recently gone just after they made the announcement. So I had some connections there, and I
said, What can you get me into? And then I got a call from one of the managers there who asked if I was interested in this position. said, Yes, but I can't start for 90 days. out that way, so it's a pretty small world. I
And it worked
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Q A Q What was the position that you began -- what
was the first position that you held at WAMU as far as title and duties go? A Title and duties? The first position I held, I've
I think it was like senior -- I've got to think.
got to think a minute because those titles don't exist anymore since the purchase. Senior lead operations specialist. Okay. And the -- but that covered probably 100
different positions, so the title didn't really mean much. Specifically, my duties were to work with
deceased borrowers' estates on these loans where we really didn't have a borrower anymore, but we potentially had some recovery because the family members either wanted to keep the home -- you know, it was one of the things where the family wanted to keep it -- or figuring out a way to make the loan perform, or at least collect on it in some way. So I would work with the family, hopefully, you know, with the executor or executrix of the estates, getting them documented on the loan to really work with us, and then kind of moving down the line where loss mitigation or somebody in recovery could get that loan to perform. So I was kind of on the front end working
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me. A with the estates and trying to establish who we needed to deal with and then push it on down the line to some kind of loss mitigation. Q Now, aside from that, were you doing any other
type of loss mitigation or was it just focused on the -on the deceased borrowers? MS. CREWS: Object to form.
I was only doing -- really, just focusing on
establishing that line of communication, verifying that these people had the authority to act on behalf of the deceased. Beyond that, I didn't have anything to do
with the loss mitigation. Q (By Ms. Mack) Okay. What else did you do
when you first became employed with WAMU? A That was pretty -- I mean, I was -- that was
That was -- it was me, and I had one direct report
at that point, and we were handling that entire operation. So it kept me busy for a time, and I was
actually going back and kind of redoing some of the filing systems that they had and kind of getting that more modernized. And that probably took me through the
first year-and-a-half or thereabouts. It seems like I was still doing it at the time that we were -- that we were purchased by Chase, but -so I didn't change jobs until after the Chase purchase.
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Q A Q Okay. Which was in September 2008. With regard to your -- with WAMU. So who did
you work with? employees were? A
Do you remember who your fellow
Well, in that -- in my department, which was,
like I said, just very small, just two of us, it was me and a friend -- she remains a friend -- Nefreta. She
worked with me in that particular area of the business. Q Okay. And who was your supervisor when it was
still WAMU? A Q Rocky Zaida was our supervisor. Okay. And did you report to anyone else
besides Mr. Zaida? A Q No. Okay. The -- were you on salary at WAMU or
was it a -A No. It was -- at that point, it was hourly.
I was nonexempt employee. Q Okay. And did that ever change before Or
September 25, 2008, the salary part of it? compensation, I should say? A
As far as being salaried or hourly?
No, that
did not change. Q All right. And when you were -- right around
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Q A overnight. the time that the FDIC took the bank over, WAMU, did you know that was going to happen? A No, we didn't know that was going to happen.
Clearly, there was, you know, some indications that the bank wasn't doing well. slipping. You could see the stock
I think at that point we were like at, you
know, $4 a share, where at the beginning of that year we started out at a much larger number. So, clearly, there
was some indication that something was going on, but there was no telegraphing of what was going to happen. What took place took place literally We came in the next day and, I mean, people That's
were like, Did you hear about it on the news?
how fast it really happened, and we had no really warning. But in the end, nothing really changed at all
because we continued to do our duties and things went on as they did the day before that and the day before that. Q With regard to the day or week of the
receivership of WAMU, first -- let me back up. The place where you worked at WAMU, could you describe it to me? Is it a campus in Jacksonville? I
know that y'all like to call them -MS. CREWS: Object to form. -- campuses.
(By Ms. Mack)
There are actually -- at the time -- we'll say
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at the time. At the time, the buildings were all
situated in a building or an office -- what's the word I'm looking for -- complex called, like, Deerwood Park or Deerwood. it. And it's got all kinds of businesses in Citi for a
State Farm has a business there.
long -- I think at this time, Citi still had a big building there, and WAMU had buildings there. WAMU was also renting space from other businesses as well because they had grown out of their own space. So we were actually working -- or I was
actually working at the time in one of the rented buildings called the Charleston Building, which was just down the street from the main building. Q Okay. When the -- it's my understanding that
the receivership began on a Thursday; is that correct? A Q A Q I don't remember the day of the week. Okay. It was like September 25th, you know. Were you actually still at work when the FDIC
came to seize the bank? A Well, I don't know if they ever physically
came to the buildings, and I probably wouldn't have really paid attention anyway. I -- so I don't know I mean -- and
whether I was actually in the building.
my understanding of the transaction is that, apparently,
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it may have happened like after hours or overnight. probably after 5:00, I wasn't there. So
So if the actual
seizure took place after 5:00 p.m. on any given day, I probably wasn't there. Q Was it your practice to leave before or after
5:00 when you were working with WAMU? A Well, generally, if -- you know, unless you
had some type of overtime approved, you were going to be leaving, you know, sometime around 5:00. Q Gotcha. Now, when you came back to -- to your
job and it was Chase, could you just describe what happened? I mean, how did you know that you weren't
working for WAMU anymore? A Well, probably the first thing is what you
normally get in any office environment is the hushed tones and the whispers and, Did you hear this and did you hear that? So nothing official right off the bat.
I think probably more -- I don't watch the news in the morning, so probably people had a leg up on me watching the news and hearing something that happened. So for me, all I heard was kind of the third-party information. There had not been any
official announcements through e-mail or had not gotten a manager or senior managers of the building to announce anything. So, really, it was kind of business as usual
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A other than the obvious disruption of kind of having people wandering around going, What's going on? But it
was business as usual, and nothing really changed. Q When did you first have a change either in
your job description, your compensation, your manager? Do you remember when that would have been? MS. CREWS: Object to form.
The -- well, you know, honestly, for the most They --
part, nothing changed for a matter of months.
they let us know shortly thereafter -- probably either later that day or sometime that week, they came out with some official announcement saying, This is what has happened. It's business as usual. Do your duties as
described, and nothing is going to change right now. Probably months later, they started to roll out plans, letting people know that they're aligning the -- the -- I guess what you'd call the human capital. You know, the human resources with what was -- what Chase already had in the area. So the biggest impact
was probably to the retail branches because they had a WAMU branch across the street from a Chase branch. clearly, that's kind of a waste. impacted more heavily. From the mortgage servicing side, there was some realignment in small areas, but no one really lost So,
So those people were
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their job. They may have been reassigned to a different
job because that function was no longer going to be handled in Jacksonville and maybe it was moving to Lewisville or Columbus. in the same desks. paychecks. But people were still sitting
People were still receiving their
I think at some point months later, the
paychecks may have changed as far as, like, who was cutting the checks. But as far as compensation level Titles remained Not a lot
goes, all of that remained the same. the same. changed.
Department names stayed at same.
I mean, if you walked into that building three or four months later, the only thing you may have noticed is maybe a lot of the signage changed and they had taken down the WAMU signs and replaced with Chase signs. But that's about the extent of what you would
see right on the surface. Q (By Ms. Mack) Okay. Now, did there come a
time when either your job position changed after the -after Chase took over the WAMU, did that come a time when you either became salaried or had a different title? A Not -- not by force or by change of business.
I actually applied for another position within the bank and moved into that position, so my -- I don't think my
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salary changed. My title -- I don't even think my title
changed because, like I mentioned before, the titles were kind of used for all kinds of positions. certainly changed and supervisors changed. My duties
But at the
time, my move was considered lateral, so I didn't get a bump or I didn't change from salary to hourly or hourly to salary. Q Okay. So at this time, at the lateral move,
you're still on an hourly -- you're still doing an hourly -- sorry. of salaried -A Q Correct. -- is that correct? That was tough. Okay. So the lateral move, your supervisor, I Compensation was still hourly instead
believe you just said, changed. A Q A Q Yes. Who was your new supervisor? Shelly Thevin became my new supervisor. Okay. And did the -- did your fellow
employees that you worked with change? A Yeah. I moved out of the team that I was
working with into a completely new team. Q Okay. Who -- do you remember who you were
working with with the new team?
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A It's been -- it's been a couple of years now Probably first names, I worked with a lady
since I worked with these folks. I worked with a guy named Vinnie. named Laura. on the team.
There was probably about 20 to 30 people Some of the people I worked with daily,
but not -- not every one I came in contact with all the time. Q position? A This was a function of kind of early dispute I worked -- at that time, What were your job duties at this new
resolution and Chase legal.
it was basically my first step into working with contested and litigated home loans. Q A Okay. A lot of these were contested foreclosures.
There were also some eminent domain cases, some title cases. So I was working a case load of, you know, We
somewhere around 2- to 300 cases at any given time. were -- we were split up by state, so I would be assigned to a few states.
I think I had Florida and a
couple of other smaller ones because Florida was a pretty large volume state. So I would work on these cases with inside and outside counsel and try to come to some resolution and do some drill-downs to find out what caused the issue
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and recommend maybe some resolution tactics, whether it be -- you know, if it was something we could make go away quickly by doing something simple or whether or not we are going to have to litigate to the end because of whatever issue. So working with inside and outside
counsel on those cases and appear on these cases when necessary. A lot of -- basically a lot of what I do now
is kind of -- is rooted in what I was doing then. Q Okay. And I'm just going to go back to a When Washington Mutual became
couple of questions.
Chase in 2008, did the policies and practices that -that would have been, I guess, taught to you or you would have been trained in the policies and practices of Washington Mutual -- well, let me back up. I'm sorry.
Did you have any training when you became employed with Washington Mutual? A Yes. I went through some -- everyone goes
through some on-boarding just to give you an idea of the culture. And then depending on what kind of job duties
you're going to be doing, give you some systems overview so you can become familiar with the systems if you hadn't already become familiar with them. Q What -- okay. Let's unpack that. What type
of training with regard to systems did you have when you were hired by WAMU?
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A Well, of course, I had the benefit of having So what you may
worked with the servicer previously.
have found is that a lot of the servicers use the same systems. So specifically we were using -- at ABN, we
were using MSP. Q A Q A Is that the mortgage servicing platform? Correct. Okay. Actually, to be technical, I believe it's Platform was
called mortgage servicing package. incorrect. Q A Okay.
The -- so it's a widely used system.
In fact,
all of the major servicers I have ever worked for have used it. So WAMU was using it. Chase was also using So the training for
it, so I had the benefit of that. that for me was kind of redundant.
Some of the other things like some of the imaging software, obviously, you know, people that have worked in the office environment know how to use e-mail and things like that. So a lot of the systems training It's a
for me was kind of redundant, but it's required. formality.
And then, you know, like I said, kind of the
things to get you used to the culture of the company and those things.
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So, yes, there is -- there is technically training for systems; however, for me, it was pretty much redundant except for a few things. Q Now, the MSP system that you're talking about,
is that the Fidelity Lender Processing Services' MSP? A I am not an expert on everything at Fidelity.
My understanding is that Fidelity developed the software and licensed it to individual servicers. So that's my It's
understanding, is they actually -- they own it. their property. Q We're leasing it as a servicer.
But this is -- this software that we've been
talking about, it is -- it's the same for each of the servicers you've worked for as far as MSP? WAMU, it's the same MSP as JPMorgan Chase? A My understanding is they are exactly the same. Maybe at
When I was working with both systems at some point before the -- before this last year, the loans were maintained on different servers, but the software interface is exactly the same. for ABN. There may be some minute details on how certain data fields are used. But when you look at the And the same thing goes
screens and the software and the way you navigate through it, it's exactly the same. Q Okay. The scanning that you have referenced,
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what type of programs did you use to scan documents at WAMU? A At WAMU, I believe it was called Image Web, if And Image Web was the default
I'm not mistaken.
software for anytime you need to look up imaged documents, whether it be notes, mortgages, origination packages, applications. You know, whatever was deemed
worthy of saving or necessary to save for servicing purposes. Q Okay. And would there have been any other
system -- computer system that you would have used at WAMU other than the two that you've just described? A They had a separate servicing system for the I think it was called ACLS. ACLS.
home equity loans.
And they had a customer service collections system called CACS that was used for home equity collections. Those are examples of systems that we would have used at WAMU that didn't -- that weren't the majors. the major being MSP. And then other -- we used other things. mean, Outlook e-mail is a major. I I guess
You know, that's the
line of communications of people within Chase, so you use Microsoft e-mail. So, really, the MSP is really the
central repository for all information related to a loan, so most people work out of that anytime they're
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okay. coming in contact with, you know, servicing. Q Okay. And, now, when you accessed MSP, did
you have a user number or identification? A Yes. Everyone has a unique identifying So they sign
usually three-digit code assigned to them.
in, and they also given -- you know, they also -- they have to set their own password. So, yes, every time you
sign into the system, you have to sign in and use the identifier. Q Okay. And did you have the -- when you signed
into MSP, did you have the ability to enter data or just review it? A I had the ability -- you know, part of my
duties were to document the things that I was doing. So, yes, I had the ability to enter data into certain areas. Not all areas can be manipulated. I could enter
notes into the system.
I could change stop codes so
that if I was dealing with a loan that was in litigation and it needed to stop certain things like collection activities or foreclosure processing, I could put stops on the system. Q Okay. The WAMU -- at WAMU, the MSP was for --
For the type of loan that we are here on today
such as the Waisome loan, which is a residential first lien loan, right?
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A Q A Q Yes. Okay. Was MSP the only servicing system that
would have been used at WAMU for that type of a loan when you were there? A As far as I know, yes, because it wouldn't
have -- it's not a home equity loan, so it would have been -- although the loan was a cash-out refi, it wouldn't be considered a home equity. It wasn't a So it
revolving line of credit, so it was a static.
would have been on the MSP and really no other servicing system. Q You know, just MSP. So if we were looking for all the information
contained on any computer system at WAMU from the date that the Waisome loan originated, which was in August of 2007 -- so from August of 2007 to September 25th of 2008, the MSP system was one system. And then I believe
you said the -- the Image Web was the imaging system? A Q Correct. And then, of course, you've got Outlook. Is there any other system that would have been used to transmit or store data regarding the Waisome loan at WAMU during that timeframe? MS. CREWS: Object to form.
Not that I can think of, no. (By Ms. Mack) Thank you.
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Chase. All right. Now, let's go over to JPMorgan
Did anything change from September 25, 2008 to
date with regard to the MSP servicing program? A The -- initially, no. For a long time after
the purchase, the loans were maintained on their separate -- and this probably isn't technically the right word, but the servers. So we had different
client -- the client numbers that were assigned to different sets of loans. Chase client was like 465. So those were maintained separately for a period of time up until, I think, just recently in the past probably, like, 10 to 12 months. There was an The WAMU client was 156. The
ongoing project in the first several years to get -you're talking about millions of loans in each -- in each client, so it took a while. maintained separately. Now, initially, you would log into the separate clients. The same software, but these loans But, yes, they were
are basically just segregated WAMU heritage and Chase heritage loans. So, really, nothing changed for a
number of years up until, really, this last year where they finally completed the project. And now you go into
one client, and you can view the Chase loans and the WAMU loans all under one client instead of toggling back
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A and forth. Q Now, the -- is the system -- I guess, is it -Or
would you say it was a consolidation or conversion? do you have another word for it? MS. CREWS: Object to form.
I'm trying to recall what they actually -- the It wasn't part of the project, so I And I don't -- you
term they used.
couldn't say what term they used.
know, I would look at it as just the elimination of something that was really unnecessary because at that point -- you know, prior to the purchase, they were using the same systems, so -- and that was great because you didn't have to retrain employees on different systems. They were all using the same ones. I think it
was just elimination of an otherwise extra step that someone had to take to toggle back and forth between these different clients. Q (By Ms. Mack) Okay. And approximately when
did that elimination of that extra step occur? A It was within the last 12 months. It may have
been late last year when, I think, they finalized it. It was a big project. It was -- you know, it took a lot
of time and a lot of effort, but I think it was -- it may have been late last year when they finalized it. Q Who -- what department would have been in
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Q A charge of that project that you just described? A My understanding is that they drew resources I don't think there was
from all areas of the business.
any one department that was involved in handling that transaction or that project. Q Do you know who -- was there a person that was
in charge of it? A I don't know if there was -- if there was a I -- I could imagine
specific person in charge of it.
based upon my experience in some of the projects that I've seen in other places, that there is probably a project manager and several business -- business -- head of business people that were running it, but I wasn't in charge. I wasn't part of the project specifically, so I
don't really know. Q Okay. The -- did you have any role aside With regard
from -- and we're going to do WAMU first.
to Washington Mutual, did you have any role in entering data into the MSP such as payments -MS. CREWS: Object to form. -- from the borrowers?
(By Ms. Mack)
There would be times where I would process
payments for the estates of the borrowers in my duties at WAMU. payments. It wasn't -- I wasn't crediting them with I was processing. Basically they were trying
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platform? A Q No. I keep calling it platform. Okay. Sorry. to keep the loan current. They don't want to go into
default or they want to avoid an acceleration, so they may make a phone payment or something like that. This
won't go to regular customer service because at this point, they're probably -- I haven't been able to vet them enough to give them authorization to speak on the loan, but the rule is if they want to give us money, we will take the money. So we will take their payment over the phone, but that's pretty much as far as I went. As far as MSP
and the loan being credited for that payment, that's someone on down the line that handles that portion of it. Q Now, at Chase, did you ever perform any type
of payment entry duties from borrowers when a borrower -A Q No. -- paid their loan? Did you ever enter that into the servicing
The -- do you know how the end -I'm sorry.
how -- let me back up.
Do you know how the entries for either WAMU or
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Q A Q Chase into the MSP would get reflected in, say, a subledger? A Q ledger? A Q A I am. What is your understanding of that? My understanding is probably very rudimentary. Do you know what I mean by subledger? I do not. Okay. Are you familiar with the term general
My understanding of a general ledger is just the -- it's a general accounting of funds either coming in or going out of the loan. That's pretty much as far as my
understanding goes. Q Okay. Do you know if the -- if there is a
separate system other than the MSP that would account for payments -- and I guess payments going to the loan or expenses, say, perhaps P & I advance or escrow? Is
there a separate system other than the servicing system you are aware that would record that type of data? MS. CREWS: Object to form.
Not that I am aware of. (By Ms. Mack) Is there a separate accounting
system that you're aware of other than MSP? A No. MS. CREWS: Object to form. Okay. And is it no, you're not
(By Ms. Mack)
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Q A aware of it or no, you don't -- no, there isn't one? A I -- I don't know that there isn't one. I am
just not aware of another accounting system.
I have
never encountered it or been provided any records or documentation that there would be another accounting system. Q Okay. Okay. How -- sorry. With regard to WAMU versus Chase, was
there any change in the procedures or policies as an employee that you thought was, you know, extreme? don't know, maybe they wanted you to wear blue on Fridays? I'm giving -MS. CREWS: Object to remember. -- you an example. Like I said, the The policies and I think -I
(By Ms. Mack)
Not -- not really.
day-to-day business remained the same.
procedures really didn't change radically.
anecdotally, I'll say that the one thing that probably rubbed people the wrong way was under WAMU, day one, you have three weeks of vacation, no matter your level. Under Chase, if you are under five years of service, you have two weeks of vacation unless you're management. So instead of grandfathering all the existing folks in, they decided to pull back a week of vacation from I don't know how many people. I was one of them.
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So that -- that is probably the only thing that sticks out, is some of the -- some of the HR, you know, policies, probably changed more than anything else. But
from a business -- running the business standpoint, you know, the servicing is servicing no matter where you go. And, you know, my experiences working with, really, three different servicers is that the procedures and the policies are really geared towards meeting requirements of the regulatory agencies, investors on the loan if there's investors. You know, all the folks who you need to perform up to their standards drive your metrics. So
when you go see these different servicers, you're going to see the same policies and procedures generally because they are driven by all of these other forces. So the Chase policies and procedures, although they may be called Chase policies and procedures, are not going to be all that different from the WAMU policies and procedures. Q Okay. All right. Let's -- I -- I appreciate
that -- the very comprehensive answer. Now, you had made a distinction in the answer that you just gave between an investor -- and I would -would that be opposed to a, I guess, portfolio-type loan where the bank actually holds the loan on its books?
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bank? A Q I do. Okay. What's your understanding of the Q MS. CREWS: Objection. Form.
(By Ms. Mack)
Do you know what I mean when I
say "portfolio loan" -A Q Yes. -- versus a loan that is just serviced by a
distinction? A Well, we refer to it as an asset loan. If we
own the asset, it's ours.
We don't have to -- we are
not meeting someone else's standard of servicing. Whereas if it's a loan that's either been securitized or is backed by one of the GSEs, we have servicing standards that we have to meet. So we may have to do
certain things that are extra and excess of what we would normally do for our asset loans. Or, you know, rarely is it we don't have to do something that we would do for ourselves on GSEs. But
normally the restrictions are, you know, set the bar a little higher or some special tweak or interesting twist. But, yes, I understand the differences between
the asset loans and, you know, the investor-backed loans. Q And how can you tell if a loan is an asset
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loan or a loan that's just serviced by the bank? A Well, generally, the easiest way is to go into
the servicing platform and access the proper screens. It will tell you who the loan is owned by. Q A And what screen would you access? Well, if you were looking for specific
investor or owner information, you would go into a screen called MAS1. And then there's a subscreen within
that called INV1 which would tell you, if there is an investor, who it is. say Chase owned. Q A Okay. But there are other indications. When you're And if it's Chase owned, it would
looking at just, like, the customer service screen which shows loan balance, who the borrower is and general loan information, there is investor codes at the top of most of the screens. But unless you know the codes, you may
not be able to just look at the codes and say, Oh, the investor is such and such. You may need to dig down
deeper into the IMD screen, and it will tell you who it is. Q So is there like -- is there a screen that
has, I guess, a key for the codes where if you had, say, your code was, I don't know -- I think you said WAMU had a three-digit number, and you referred to that as --
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when we were talking about the different MSPs between -I think you said WAMU was 156? A Q A Q A Correct. Is that an investor code? No. Okay. So 156 is a WAMU client number. 465 was the 156 a client -- is a client number.
Chase client number, completely separate and apart from the individual identifiers, which I have a three-digit code assigned to me so that if I put entries into the system, it memorialized that entry with my name or my code, and then date and time stamp I put that in there. But, again, that's still aside and separate from the investor codes, which are codes identifying investors. And more to the point, your question was is there a place where these investor codes are laid out? I don't know that they are within the system. I believe
that we keep records of these investor codes potentially outside the system. I just don't -- I've never accessed
an investor list with an MSP, so it's possible it's there. Q I just don't know. Now, you have a three-digit code. Is that
something you can tell us? A I think mine -MS. CREWS: Are you sure you're okay with
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A that? THE WITNESS: Yeah. I don't care.
I mean, I'm guessing what mine is right now,
but I think it's like OY$ or something like that. Q A (By Ms. Mack) Okay. So --
It's not something you necessarily have to
memorize because when you log in using your password, it's going to tell you -- it's going to memorialize everything. it's OY$. Q Okay. So with regard to if you were looking You don't have to memorize it. I think
at -- I think you called it an investor MAS1? A Q Yes. MAS1. Okay. Three
Are the investor codes three digits? characters? A How do they look?
I believe they are also three digits for the But when you -- and then as you go into
investor codes.
MAS1 and INV1, it actually spells out the name of the investor. So if it's, for instance, a Chase loan, it If it's Bank of America, it It will spell out the name
will say JPMorgan Chase. will say Bank of America.
and the address of the investor or owner for you right there on the screen. code. So you don't have to interpret a
It's right there.
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Q A Q Okay. And you said that's the INV1?
MAS1 and INV1. MAS1 and INV1. Okay.
With regard to -- have you -- have you ever serviced a loan that had a private investor? know what I mean when I say that? A I know what you mean by a private investor. I mean -And this is not a Chase or And do you
Have we ever serviced one? Q In your career.
WAMU specific question. A I mean, I don't remember a specific instance
where I was dealing with a private investor loan, so -but I have worked for three fairly large -- I mean, two majors and one, you know, fairly large servicer. And I
have to imagine at some point, I must have come across it, but I don't recall specifically. Q Okay. So -- okay. The -- and I'm going to
ask you some specific questions about the screen shots that your attorney has provided to us. A Q Okay. Let me do that in a block. Let me ask you a
question off the record. (Discussion off the record.) Q (By Ms. Mack) What would you do to
determine -- or what steps would you take to determine
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Q say that? A I think I do. And if I had access to MSP on who owns a loan, the beneficial interest in a loan? MS. CREWS: Object to form. Do you know what I mean when I
(By Ms. Mack)
that -- if it's an MSP, I'm going to go to MAS1 and INV1 and that will probably be my primary indicator as to who has beneficial interest. That would be the -- you know,
the best piece of information I could find is what is in the servicing platform, because that is what we're depending on day-to-day to run our business. Q Have you ever -- and specifically either at
WAMU or Chase, have you ever been -- now, you had said that you have a group of loans that you handle. And I I
believe you had indicated they were litigated loans. think you said there were 2- or 300 loans? A
And just to define, in my previous role when I
had a case load, yes. Q A 300 loans. Okay. I would have, you know, somewhere around 2- to And, you know, they were incoming. And I
had several cases, and they would be out.
So there was
a constant flow in and out of this portfolio that I was managing. Q When you were handling a loan -- when you were
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A handling the portfolio that we just talked about, would there ever be times when a loan maybe was sold while you were dealing with it, and there would be a change in an investor that you recall? MS. CREWS: Object to form.
I do recall in one particular instance, we had And I -- and I don't know if that
a service transfer.
qualifies under your question, because it may not have been sold, but the servicing was transferred to another servicer. So we didn't own it. It was service
transferred.
So, yes, you know, there -- we got, you
know, we were notified last minute that there was a service transfer, and I advised the borrower and the attorneys working with us that were no longer servicing, so we can't talk to you about this litigation anymore and you're going to get a note. Someone from the other
service is going to have to assign counsel or retain this same counsel, but we are not done anymore, so -Q (By Ms. Mack) When the servicing would
transfer, would the actual note and I think -- I think -- would you agree with me a collateral file is the note, the mortgage and, I think, it's the title policy? A Q That is a fair representation, yes. Okay. When servicing would be transferred,
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would the collateral file also get transferred? A same day. Generally, yes. It may not be on exactly the
A lot of it depends on the -- what the owner
wants and what -- you know, because they are making the -- they're calling the shots as far as, you know, what deadlines need to be met. So we may get a service transfer that is effective on the 4th of the month, and the note, the mortgage and the trailing documents may be shipped out, you know -- maybe the requirement is within 15 days or whatever it may be. So yeah. But, generally, yes, they
are sent along to the new servicer for their own document custody. MS. CREWS: I just want to interject for a
minute because I know we have an agreed order of the scope of topics. MS. MACK: MS. CREWS: Right. And these are very -- and it's
been almost an hour, and I understood you need to get into his background and resume. And I think all
of your questions are appropriate, but I just want to make sure we stick to this loan and these topics and not just a ton of, you know, more general questions on process. MS. MACK: I'm just trying to get an idea of
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here. Have you -- okay. With regard to the Waisome Q what Mr. Nardi knows other than just looking at MSPs. And it sounds like -MS. CREWS: No, I understand. I understand
you need his background, but -MS. MACK: Yeah. Okay. Sorry. Let me regroup
(By Ms. Mack)
loan, did -- have you ever seen the original collateral file documents? A Q No. Okay. Have you ever examined -- with WAMU or
JPMorgan Chase, what would have been an example of a time when you would have had to look physically at the original collateral file, if there was one time? A There would have been countless times where I
would have needed to look at the physical file or the actual file. A lot of those are related to cases that
are going to trial or heading into a mediation or even sometimes depositions that for, whatever reason, there is some question as to whether or not we have the original. Here it is. So we bring the original with us and say, A lot of times that helps to facilitate the
process of, you know, the -- hopefully, settling the case, knowing that, you know, giving the other side --
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A giving the other side the piece of mind that we are, indeed, the rightful parties at interest. Q Okay. So the -- with regard to obtaining the
collateral file, the actual original documents, what is the process that you would take to actually physically get them? MS. CREWS: Object to form.
The process right now is a request -- there's
two separate kinds, because there's -- you referenced a collateral file. There is also a credit file.
Sometimes you need stuff from the credit file, and sometimes you don't. sometimes you need it. The collateral file, you know, Sometimes you don't. So
depending on what you need, there's an electronic request for each one. You send it to the customer service folks. The credit file -- and there's certain restrictions as to who can actually order it. authorization. You have to have certain
You can only send it certain places.
You have to either send it to someone -- if you are sending it to someone within the company, they have to have -- it's a very short list of people within the company who can get it. Generally, we ship it only to
counsel when it needs to go out of custody and services. So you would include your identifier so that,
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you know, they can say, yes, you have the authority to order it. You need to identify where it's going so the
firm that it's being shipped to, custody services, will accept that. Basically it's an e-mail transmission, and So they will go in, pull up
they work those constantly.
the work order, have a person that's designated to be able to actually enter the file room, go in and pull the file, and then ship it off to the firm who's requesting it. Q (By Ms. Mack) Okay. And with the shipping of
the collateral file, is that by FedEx or some other method of mail? A I'm trying to think. Currently, I believe
it's FedEx.
I'm almost 100 percent certain that they
use FedEx almost exclusively for the shipping. Q But it's some -- it could be some sort of
tracked mail, right? A Certainly. They don't drop it into a postal There is actually a site in Monroe,
service box, yeah.
Louisiana where all of the document services are -- or document custodian services are handled now. They have
their -- you know, they work in such large volumes with FedEx, they actually have their own plane that brings in these documents specifically for Chase. So when it
comes in and out, it all comes through a very controlled
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A channel with the -- with these courier services. Q Okay. Have -- how long have you been working
on the Waisome file? A I would say it's been at least a couple of I couldn't tell you exactly the day I
months now.
became, you know, really intimately involved with the case, so I couldn't pinpoint a day. it's been at least several months -Q A Q A Okay. -- at this point. Do you think it was going back to 2011? I -- I would have to -- I would have to go But I would say
back and look at some e-mail records because my -- I'm so e-mail driven, everything is really there. couldn't say for sure. So I
That may be on the outer edge of
when I became involved, but I couldn't say for sure. Q Do you know who -- do you know who was working
on the file before you? MS. CREWS: Object to form. I know -- I
I don't know all of the people.
know who I was working with when I became involved with the file, so they must have been working -- I mean, I -I would have to -- I have the understanding that they had the file -- they were working on the file prior to my involvement. So, yes, I -- I think I do know who was
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sure. working on the file before me. Q A (By Ms. Mack) Who was it?
Inside counsel that I recall is Anita Smith,
and then Kendall Foster was another member of our legal team who was not an attorney who was working on the file. There may have been some other people, but those
are the people that I -Q A Q Okay. -- that I kind of worked with on the file. Have you ever physically seen the Waisome
collateral file or the credit file, the actual physical file, not an image of any of the documents? A Q No. Okay. Do you know what documents are
contained in the Waisome collateral file? A At this point, my understanding is that the
collateral file -- they're no longer in the collateral file, so to speak. They have been deposited, or at I
least the note has been deposited with the court.
don't know if the mortgage has been deposited with the court. So right now, the collateral file would just
have the policy in it, from my understanding. Q A Okay. But I've not seen it, so I couldn't say for
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Q If the note -- and I think you're right. If
the note was taken out, would there be some indication in the file that the note was taken out and given to counsel or the court or whatever happened to it? A Yes. There is a very thorough check-in and
check-out process where all of this is very well documented. So the file -- the collateral file itself
generally on its -- on its left-hand inside cover has a sheet which basically says where the documents have gone. And then in addition to that, there's an
electronic system which tracks all of this information as to where it's gone to. So there's duplicative
efforts to make sure we know where these things are at all times. Q transfer? A I know it as Docline, but I think the database But I -- I -- when I look at What system is it that tracks the document
is called something else.
it, I go into a system called Docline, which is -- my understanding of it is that when I log in, I get basically a web application. That web application is
basically like a prettyfied version of this underlying database which houses all of the information, which the name escapes me at this point. So I plug in a loan number, and it tells me
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where -- basically the history of this collateral file. You know, when the note was received; if it's been checked out, where to; where it was checked out. You
know, all of the pertinent details of the information. But I don't recall the name of the actual underlying database, and I should because I recently did some research. Q But I don't remember it. Okay. Is that -- if you know, this Docline,
is that D-o-c-l-i-n-e? A Q Yes. Okay. Is that a system that was at Washington
Mutual as well as Chase or is that just Chase? A I've only ever seen it at Chase. And from my
understanding, it's a fairly new -- the underlying system is not new. It's the access. It's really just
making it easier for people -- people to access the information without having to know how to use a database and open up the database to people who you may not want to open it up to. But I don't believe it was in use at
WAMU because I think, like I said, it's fairly new. At WAMU, there was a very similar system which I also used to check and check out files and also to query on stuff. But what I would do is I would send it
to someone in the custody services area who would produce for me a report, send it back to me and say,
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today? A Well, I reviewed the business records on MSP I looked at here's the results. access to it at WAMU. Q A Q A Q A Q What was the name of the system at WAMU? I don't know, because I didn't access it. Oh, okay. I would just send an e-mail request -Gotcha. -- to the person that had the access. Okay. Gotcha. So I didn't have the realtime
What did you do to prepare for this deposition
just to familiarize myself with the loan.
origination file, the application and some of the pertinent details. I've reviewed some interrogatories.
Well, I don't know if that was in preparation for today, but I went over some documents that I previously executed in the case. Just, you know, my general
preparation which includes just trying to familiarize myself as much as possible with the documents and with the -- you know, in this case, I think the ownership of the loan. You know, where things have been checked out
to, and trying to nail down certain dates for certain events. Q Okay.
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A Q A Just kind of a general preparation. What dates did you nail down? I wanted -- well, one of the things I always
want to make sure of is that the breach letter corresponds with the date that's in MSP as far as the last payment made or the last payment due. It's one of
those things I've learned that can come back to haunt you. If you don't know when the breach letter went out
or you don't know that it matches the details in the MSP, that can come back to bite you. things. So just little
And sometimes it's not pertinent to the case I
might be appearing on on a given day, but you never know when you get the question why are these dates different? And if you can't explain it, you know, it's -- that type of thing. Q Do you know if when the FDIC took over
Washington Mutual if this promissory note, the Waisome promissory note, was actually an asset of Washington Mutual? A Q A question. Q A My understanding is that yes, it was. Okay. And let me make sure I understood the You said prior to the FDIC seizure? Correct. Yes, my understanding is that it was.
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A Q Okay. And what would you look at to determine
if it was -- if the Waisome note was -- and I'm talking about the note itself -- was actually an asset of WAMU? A The same system of record we used to determine Really, the MSP is going
that at any other given time. to tell us.
You can also take a look at any -- any
other loan records that we have that would indicate transfers. You would look for things like, you know,
any changes to the documentation, to the servicing requirements. You know, notes in the system might
indicate any changes. So there's -- there's just a lot of different information that you can go to or a lot of different sources of information within MSP that you can refer to. Q What -- well, if it was -- if it was an asset
loan, I think you called it before, for WAMU before the FDIC took over, was -- would there have been a specific investor number? MS. CREWS: Object to form.
I believe there would have been a specific I don't know what the investor number
investor number. was for WAMU. Q
(By Ms. Mack)
You don't -- you don't know
what the investor number was for WAMU? A No.
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A well? A I think they're -- my understanding is that I don't think there are any Q Would it have been a three-digit number as
they are all three digits. that are not.
So I think they are all represented in a
three-digit format. Q Would you look at any type of general ledgers
to determine if the Waisome loan was an asset of WAMU at the time that it was seized? MS. CREWS: Object to form.
That's not really something I would look at,
and I don't know that anyone that would go looking -that wanted to verify or was looking for that specific piece of information would look at any type of general ledger. Q (By Ms. Mack) Okay. Are you familiar with
the purchase and assumption agreement between the FDIC, JPMorgan Chase and WAMU? A I've seen it before. I've not memorized it.
But I'm aware it exists, and I'm generally familiar with it. Q Are you -- do you know anything about the
accounting records as they're defined in the purchase and assumption agreement between FDIC, JPMorgan Chase and Washington Mutual?
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A Q No. And do you know anything about the loss-share
agreement, specifically the calculation of losses and how they are shared with the FDIC? A Q knowledge? A I don't know of a specific name. It sounds No. Okay. Who in the bank would have that
like the items that you're looking for encompass more than just the mortgage banking portion. It probably
encompasses all of the bank's losses in the loss sharing, so I -- you know, it would likely be someone quite a bit higher up the chain and, you know, probably in a -- in a much larger office than mine. Q A Okay. So I don't know any specific names, but it
would be someone who's in a control position in the bank, I imagine. Q Okay. The -- are you aware of any type of
schedule of loans that would have been created to represent the -- either the loans that were asset loans or the loans that were serviced by WAMU? Are you -- was
the -- do you know if there is a schedule or database of loans like that? MS. CREWS: Object to form.
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WAMU? A Q A For the individual loan level? Yes. I -- the answer is I don't know if there was My Q A I know that there was a schedule contemplated That We've
in certain documents related to the purchase. schedule has never materialized in any form. looked for it in countless other cases.
We've never It would
been able to produce it in any previous cases.
certainly be a wonderful thing to have, but it's -- as far as I know, it doesn't exist, although it was -- it was contemplated in the documents. Q (By Ms. Mack) Do you -- do you know how
the -- well, okay.
If -- for purposes of this question,
let's assume that the Waisome loan was an asset of WAMU. Okay? A Q Okay. And if it was assumed by JPMorgan Chase
because of the purchase and assumption, how would you be able to tell what the book value was at the time -MS. CREWS: Object to the form. -- of the closure of the bank,
(By Ms. Mack)
any book level assigned to individual loans.
understanding of the transaction is it was a whole bank purchase, and there was not individual values assigned
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to any -- any portion of the loan of the bank, because the bank is even beyond the mortgage lending portion. There's, you know, other portions of the bank. I don't
know that they got down to the point where individual loans were valued and assigned a value for that transaction. Q Okay. Do you know how the -- okay. Well,
would you agree that when your loan is in default, at some point, there's going to be a charge-off? know what I mean by charge-off? A I do. Do I agree that at some point in the I would Do you
default, there is going to be a charge-off? say I wouldn't take it for granted.
I wouldn't assume
that every one of them is going to have a charge-off. The potential for a charge-off is there, but I don't know that in every case there would be a charge-off. Q With regard to the loss-share, how -- if -- if
the Waisome loan, for example, doesn't have a specific value associated with it at the time of closure, how would the loss that is to be shared be determined? MS. CREWS: Object to form. And I'm not sure
how this fits into any of our topics. A Yeah, you know, honestly, I think my previous
answer reflects that I am not really aware of how the loss-sharing was handled, so I wasn't party to that
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1. (Defendant's Exhibit 1 was marked.) Q (By Ms. Mack) Mr. Nardi, if you could please particular portion of the purchase. know. Q (By Ms. Mack) Okay. Mr. Nardi, I'm going to So I just don't
hand you a document that has been produced to us with regard to this case. Have you had an opportunity to review that document, sir? A Q Yes. Okay. And I've seen it before today too. That was my next question. We're going to mark that as Exhibit
MS. MACK:
just tell me what we have marked Exhibit 1, what is that? A Well, I normally refer to this as like the
hello letter, and this is just to let the borrower know -- really, this letter goes out to -- and let me step back. This letter contains a lot more information than a typical hello letter might that you might get if you're being service transferred from Bank A to Bank B and there did not happen to be a bank failure. wouldn't, you know, mention it. They
This letter goes into a It
lot more detail, but it serves the same purpose.
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A basically puts the borrower on notice that the servicer has changed and that, you know, if they need to make changes to where they make their payments to, it describes that. It basically gives, you know,
introduction to here is who we are and here's what's happened, here is how to contact us if you have questions, and here is where to send payments if it's changed, and here is how to get ahold of us. purpose of the later. Q of 2008. A Q Yes. Would you agree with me that the letter The letter is dated -- I believe it's October That's the
indicates that the servicing is going to be transferred? A Q It does. Okay. Now, if the -- the note, as in the
ownership of the note, was going to also be transferred, would that have been something that would have been contained in that letter that is marked as Exhibit 1? MS. CREWS: Object to form. Not in my experience. The --
Generally not.
the servicing information is important to the borrower because it does relate to how their loan is going to be serviced as far as collecting payments, who can answer their questions as to, you know -- let's say they had a
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A question about their homeowners insurance and how it's being paid or their taxes. Basically from the customer
view, the servicer is the important party. The owner of the loan really doesn't make any difference to the borrower because they are never going to have any interaction with the owner of the loan if there is an underlying owner or investor. You wouldn't
call Fannie Mae, generally, for a question about your payment. You're going to call your servicer. So generally, I have never seen a letter -- a hello/goodbye letter that says, We are the servicer or not your servicer anymore, and your owner is such and such. Q It always refers to servicers. (By Ms. Mack) Okay. Do you think it's
important for an individual borrower such as Mr. Waisome to know who the owner of the loan is, the owner of the promissory note? MS. CREWS: Object to form.
Not nearly as important as it is for them to Like I said, in an average
know who their servicer is.
life of loan, the borrower is going to talk to the owner of their loan, unless it happens to be the servicer, probably next to no times. You know, you're generally
never going to have interaction with Freddie or Fannie. If they are the backer of your loan and if your loan
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A happens to be securitized, you are not going to call Wells Fargo as trustee for, you know, WAMU pass-through certificates, you know, 2007-2. your servicer. So, no, I don't think it's important for them to -- from a -- from a customer standpoint, to know who their -- who their owner is, no. Q (By Ms. Mack) Would you agree with me that if You are going to call
you pay off a note, it would be cancelled? A cancelled? If you paid off the note, would it be You know, the debt goes away. Certainly,
the obligation of the note goes away when it's paid off. I don't know if it's stamped cancelled or what the physical disposition of the note is, but the debt is certainly cancelled once you pay it off with that lender. You may -- if you refied it to another lender,
the debt may still exist in another form under a different contract. But as far as the contract that we
hold, the debt no longer exists. Q A Q to mind. Are you familiar with the Waisome note? I've seen copies of it, yes. Okay. Well --
Does that answer your question? Kind of. But, actually, you brought some more
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Q Q Okay. This is a copy that was actually
attached to the plaintiff's motion for summary judgment, which just happens to be the one I found the quickest. This is -- this note bears the endorsement of Ms. Riley as well. And I think I've got the prepayment and fixed
rate rider. I'm going to -- I'm not going to ask questions about that, so we will take prepayment away because I'm not going to ask you questions about that. A Q Do you want her to mark this? Yes, please.
(Defendant's Exhibit 2 was marked.) Q A Q Have you had an opportunity to review it -Yes. -- Mr. Nardi? Okay. I think that's Exhibit 2. Now,
Mr. Nardi, would you agree with me that the note provides for assumptions by third parties that are not parties to the note? MS. CREWS: Object to form. I'm sorry. It's not -- let me
(By Ms. Mack)
find my note, if you can hang on one second. A Q Sure. There we go. It is -- let me ask you a In the note,
question about the prepayments first.
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Paragraph 5 that's on Page 3 of the note. A Q Yes. Okay. If a borrower wanted to make a
prepayment or if they wanted to pay off the note entirely, how would they do that? to? A If they're calling in to make -- and I'm -If they are Who would they talk
and I'll approach this from two scenarios.
calling in to make extra payments to their loan, they would generally talk to the customer service department about how to designate where that money goes, because it -- if you make a payment -- and I'm going to make up some numbers. If your mortgage is $1,000 and you send
in $1500 and you don't designate where the 500 extra is to go, the bank may apply it to different areas where you may not have wanted it. So if you want it to apply
strictly to principal, you have to designate it as such. So that's the answer on half of it. The other half is if you're making a payoff, an early, complete and total payoff, again, you would want to contact customer service, advise them you're going to be paying off the loan, and you would ask for a payoff demand. And you would say, I'm going to pay it
off on or about this date, and they would generate a payoff demand that would be good through on or about
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whatever date you provided, which would account for any interest, any escrow advances, and basically all of the transactions that would take place in the loan up until that date. And then they would give you instructions. Included in the payoff demand, you would get instructions on how to submit that payment. You know,
what kind of payments are permitted, where to send it, where to wire it and mail it, all the details. So
that's really how we would want the borrower to go about either paying off early or doing, you know, early -accelerated payoff. Q Now -- and, I'm sorry, I said I wasn't going
to ask you questions about the prepayment addendums, but the question I want to ask you is actually in it. thought it was in the note. MS. MACK: Sorry about that. I
That will be Exhibit 3, please.
(Defendant's Exhibit 3 was marked.) Q (By Ms. Mack) The prepayment addendum, does
it allow a borrower to make a full prepayment or a partial prepayment? A partial. I think this kind of plays both full and So it looks like it kind of plays both types
of prepayment s. Q Okay. And if a borrower wants to make a
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prepayment, they have to contact the note holder, right? A The prepayment addendum does indicate that the
borrower will notify the note holder in writing that they are doing so. So it, indeed, does say that the The note also goes -- the
note holder must be notified.
actual note which is Exhibit 2 goes into definitions of who the note holder is. And it says, The lender or
anyone who takes this note by transfer and who is entitled to receive payments under this note is called the note holder. Q Do you know what that -- what that means, that
portion of the promissory note that you just read of how -- how would a borrower determine who that entity was, if it wasn't the original lender? A Q Whoever is receiving their payments. So is it my -- is your answer that the person
receiving the payments is the note holder? A I don't know in every case that it would be.
In this particular instance, which is the only one I can really speak to, the note holder is the person who is collecting payments. are one and the same. Q Okay. Let's go back to Exhibit 2 since you So the answer would be yes, they
have it in your hand. A Sure.
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her. Q A How do you know of her? She endorsed -- or her -- she's -- she's the I'm not sure if she Q Is that note that you have in your hand as
Exhibit 2, is it endorsed in blank? A Q A It is endorsed in blank, yes. Do you know where it's endorsed in blank? The pattern or the policies and the procedures
at WAMU at the time and actually continue to be, really, Chase's policies and procedures are to endorse these in blank as they come in. Generally -- to give you an idea
why, the bank doesn't want to own every piece of collateral that it closes on. So a lot of these loans In order to
are destined for the secondary market.
facilitate the ease of transfer to either a bundler, a trust or another lender who wants to purchase, an investor who wants to purchase, they are endorsed in blank as a normal part of our business practice. that was true for WAMU, and it's true for Chase. Q note is? A Q A Cindy Riley is the endorser on the note. Do you know Ms. Riley? I have never met her in person. I know of Okay. Do you know who that endorser on that And
endorser of a lot of WAMU notes.
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A Q still endorses for Chase or not. But a lot of my -- a
lot of my cases have endorsed notes endorsed by her. Q Okay. Do you know if the note -- now, the
plaintiff in this case is taking the position that this note is an asset of WAMU and, therefore, became an asset of Chase. Would you agree with me? Yes. As an asset loan, why would the -- why would
there be an endorsement in blank on the note? A Again, when the loan is originated, it is
assumed that it's going to be sold off at some point to an investor at some point in the future. So the loan
comes out of originations and goes -- you know, goes to closing. Immediately the -- that note is endorsed in
blank, contemplating that the loan is going to be sold off. Whether or not it's ever sold off, we don't know for sure if it's ever going to be sold off. When
it -- it only becomes an asset loan basically at the point where we have either not been able to sell it, or later on it's determined we don't want to sell it, or it doesn't meet investor criteria and they don't want it. It could be any number of reasons. But in the end, it
stays in-house and maintains itself as an asset loan.
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kept? A I don't know that they would be -- that it Q A Q Do you know why this loan was not sold? Not particularly, no. Do you know where that information would be
would be kept at all because, really, what we would do is we would look at the requirements of any given investor bundler who is putting together the trust, one of these 2007 trusts or whatever it may be. They're
going to give us a list of criteria that says, Here is what we -- this is what we will purchase, and it has to meet these guidelines. So if they run these loans through all these guidelines and for some reason it rejects based upon a certain issue, it just never gets bundled into one of these trusts or never gets sold off to any other investor. It didn't meet a requirement. We don't
necessarily document why it didn't.
In other words, we
don't go into MSP and say, Loan unsellable and this is why. Q It just never sells. Okay. Are attempts to sell it recorded in any
of the databases we've discussed? A Q Not to my knowledge, no. Okay. Well, how would a -- how would WAMU or
Chase -- for example, the Waisome loan, it originates.
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A A Q And it's not the only loan, of course, that would have been originated in August of 2007 for Washington Mutual. Would you agree? Correct. Okay. The -- the sale of the -- of the loans, Do they run it through a
do they have an auction? program?
I guess I'm trying to determine who makes the
decision about whether the loan is going to be sold? MS. CREWS: Object to form.
I have a basic working knowledge of this,
so -- and I've never worked in the area where the investor relations are, you know. They're -- the
investors determine -- they determine they're going to -- they want to put together a pool of loans and they want to securitize these loans and sell them off in a market somewhere. So the bank has an idea of the
current pools that are going on and the current demands of the investors. They will go through the portfolios
and see what meets these criteria and what it's supposed to meet. And basically they are -- so someone inside the bank is going to be doing this. They're going to be
going through our portfolios alone to determine eligibility, and then bundling them off and sending them to the investor for final approval, you know, for them
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Q to include it in their investment pool or if they are buying the asset and not securitizing, or whatever they might be doing. Q (By Ms. Mack) So it sounds like there is some
sort of like a checklist or -- I mean, I don't want to put words in your mouth. But there is criteria that a
specific investor pool would want for loans, and the loans would be run through that criteria? MS. CREWS: Object to form. Is that how it works? I'm just
(By Ms. Mack)
trying to understand the process. A That -- again, I have a very rudimentary But, generally, yes. They have, for
understanding.
instance they -- they only want loans that are under $250,000, or they may only want loans that are under a certain acreage property-wise. Maybe they only want
loans that are -- maybe they don't want any loans in a hurricane zone or maybe they don't want loans in any tornado zones. You know, they come up with whatever requirement that they have, and it's basically up to us to basically offer them loans that, you know -- that meet their requirements generally, and then they will do their own review and determine the eligibility. Q Okay. All right. So as far as the offering
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A Q of the loan, are there any documents or databases, any indicia that you know of that the loan was offered for sale to anybody since origination? A Q Not that I'm aware of, no. Okay. Do you know who is in charge or was in
charge of the Washington Mutual loan sale department? A I don't. MS. CREWS: Object to form. Okay. And when I say "loan Like, for
(By Ms. Mack)
sale," do you know what I'm talking about? purposes of selling to an investor -A Q A Q Yes.
-- or a government-sponsored entity? Yes. Okay. MS. MACK: Sure. Do you want to take a short break?
(A recess was taken.) Q (By Ms. Mack) Mr. Nardi, Exhibit 2, the note, Do you see at the top left
let's start at the top.
corner of the first page of the note there is a 19FL M05? A Q stand for? Yes. Do you know what those numbers and letters
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know. A Q A Q A Q I don't. Okay. Now, if we go over to the right side of
the page, there are some handwritten numbers. Do you know who put those on there? I do not. Do you know what they stand for? I don't. Okay. The numbers right below it that are
printed beginning with 301, do you know what that is? A The first portion before the hyphen is the
loan number, I believe. Q A Q A What is the portion after the hyphen? I don't know. Do you know who would know that? I don't know anyone specifically that would It's probably something I can research and
determine, but I just don't know what the numbers after the hyphen mean. Q Okay. What would you look at to research to
determine what the 097 represents on that note? A I would probably -- well, I don't know that I I would probably
would research any particular system.
just ask somebody who I think might know, but -Q A Okay. Who would that person be?
I haven't contemplated that at this point.
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And I might go back and look at other notes in this date range to determine if they are similarly marked or whether or not this was something that was done to every note or not to try and nail it down. explanation is probably pretty simple. occur to me what the last three are. Q Okay. Is it fair to say that that is not a But I'm sure the It just doesn't
question you get asked very often? A It's not. In fact, I don't really recall ever I think I may have
having been asked the question.
personally asked the question before and at one time maybe knew the answer, but it wasn't important enough for me to retain. Q A Q A Okay. So today, I couldn't say what it is. Okay. But generally, I can tell you that in my
experience in these notes, is that sometimes there is extensions even on the front or the back. know what significance that plays. with the left-hand connotations. Q A Q Okay. -- what significance they have. All right. Now, going down below the block of And I don't
And the same thing I just don't know --
bold typeface, you have the date and the city?
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A A Q A Q address -A Q A Q Correct. -- below that as well? Correct. Do you know why the property address city is Yes. The city is Maitland, correct? That's what it says, yes. Okay. And then you've got a property
different than the city indicated next to the date on the first page of the note? A On that first line or -- let me make sure I
understand the question. Q Yeah. Would you agree with me that Clermont
is not Maitland? A I would agree that they're not -- I don't know I don't know if they are close
where these places are. to each other. same place. differently. Q Okay.
I would have to assume they're not the It's described
They are different places.
Is it common with regard to Washington
Mutual notes for the city to be different than the property address location? MS. CREWS: Object to form.
Well, I think that would depend on what the
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top. date and the city designation -- especially specifically the city in the top is where -- what this is describing is the top line is describing where the document was executed. question. And so I don't know the answer to the I'm just theorizing, I guess, as to why they
would be different. So I don't know why it says Maitland at the So I couldn't even tell you. So that would mean I
can't tell you why it's Clermont in the second line. Q (By Ms. Mack) Okay. I was wondering perhaps
if there was some, you know, policy or procedure you knew that would explain why they were different locations. A I couldn't tell you. Maybe there's some So maybe the
additional -- there is not a notarization.
mortgage has a notarization that says where the -- maybe that's where the loan was closed, actually signed. know, I -Q to guess. A I'll get the mortgage for you so we don't have How's that? Could be a number of reasons why. That may be You
the branch where the loan was originated from. Q Okay. MS. CREWS: county. I was looking. It just says the
It doesn't say which city.
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MS. MACK: Exhibit 4. (Defendant's Exhibit 4 was marked.) Q (By Ms. Mack) And that is a copy of the We're going to mark the mortgage as
mortgage that was produced by your counsel to me in preparation for this deposition. A Q A Yeah, it just makes reference to Lake County. Okay. On the front part of the mortgage is a stamp
from I've seen is the closing -- the title office that closes in Maitland. Q A Okay. So it looks like this is where the document
was prepared. Q Okay. Well, while you've got the mortgage in
your hand, if you could turn to Paragraph -- let me get a copy of it. It's probably easier if I take a look at
your copy, and I can tell you what paragraph to look at. Let's look at that for a second while my expert is looking for the particular paragraph. go back to the note which is Exhibit 2. A Q Okay. And the paragraph I would like to talk about It's entitled Obligations of Persons I'm sorry. Paragraph 9 on Page 3. Let's
is Paragraph 8. Under the Note.
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A Q A Q A Do you see it? Yes. Okay. Are you familiar with Paragraph 9? I'll read it really
I haven't read it yet.
quickly and tell you. I've now read it. Okay. What is your understanding of what
Paragraph 9 -MS. CREWS: Object to the extent it calls for
a legal conclusion. You can answer. I think it speaks for itself. It's pretty
plain English.
It states that the persons who sign the
note either as -- in basically all capacities; guarantor, surety or endorser, basically have the obligation to perform under the -- under the note. Q (By Ms. Mack) Okay. Now, on the Waisome And
note, the signature on the note, there's only one. that's indicated as being Mr. Waisome.
With regard to
the endorsement of Ms. Riley, the endorser under Paragraph 9 would also be obligated under the note? MS. CREWS: Object to form. It also calls for
a legal conclusion. A That's what the paragraph says. I don't know
that the -- I mean, Cynthia Riley is not identified as
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A Q an endorser in her stamped signature. they're intended to be the same party. I don't know if In other words,
I don't know that the endorser as defined in Paragraph 9 is Ms. Riley. Q (By Ms. Mack) Okay. Let's see. With regard
to any system or accounting, whether it's on a database or on paper, if that's even used anymore, what does JPMorgan Chase use to account for a promissory note as an asset on its books? MS. CREWS: Object to form.
I don't think I understand your question. (By Ms. Mack) Okay. Do you know what I mean
when I say "asset"? A I -- I really have -- well, let's say no.
Define what you're -- define what you're using the term "asset" to describe, and I'll adopt it and answer the question. Q Well, what is your -- what's your -- do you
understand what the term "asset" means at all? A Well, I have a couple of definitions that I In -- in my day-to-day
could, you know, use for asset.
work, an asset loan is a loan that is owned by Chase. That's the working definition I come in contact with. But if I was saying personally what my assets are, I'm talking about things that I own that possibly could be
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A Q A okay. liquidated into capital. So it's my -- my worth or
my -- you know, monetary description. Q Okay. So with an asset, like, you could -A car that
Let's just use a simple example.
doesn't have any lien on it, that would be an asset that, if you owned it, it would be an asset that was worth whatever it was worth. A Q A Q I would agree with that. Would you agree with that? Yes. So if you wanted to, say, borrow money and use
the car as collateral, you wouldn't give the car to the bank you were borrowing the money from. pledge it. Do you understand what I mean by that? I do. MS. CREWS: Object to form. Okay. Do you know if this note And You would
(By Ms. Mack)
in this case was ever pledged as opposed to sold? do you know the difference? MS. CREWS: Object to form.
I have not seen any indication that that was
pledged at any point. Q (By Ms. Mack) What would you look at to Or what -- if this
determine if it had been pledged?
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A loan had been pledged, what screen would show if it had been pledged? MS. CREWS: Object to form.
As far as I know, there's nothing in the
servicing platform that would contain the information because it's really not related to the servicing of the loans. It's something that's a separate and removed.
If the bank wants to leverage their assets, it's not something that would be retained in MSP and the servicing platform, as far as I know. Q (By Ms. Mack) Okay. What -- okay. So do you
know -- do you know who would have that information at either -- well, at JPMorgan Chase? MS. CREWS: I'm going to object because I
don't think it's related to any topic that we have listed in our court order. MS. MACK: to answer? A Q And the question is who would know? (By Ms. Mack) I'm just trying to, you know, Are you going to instruct him not
unpack the whole concept of the purchase and assumption, which would be A under the order. The information
related to the chain of custody, which would be B. MS. CREWS: I don't see what -- whether a bank
has pledged certain assets of its portfolio, or
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it. WAMU. A whatever, what that would have to do with the FDIC transfer or the chain of custody of servicing of this loan. Q (By Ms. Mack) Well, with regard to the chain
of custody, would you agree with me that when you sell a note as opposed to keep it as an asset, you physically transfer the paper? MS. CREWS: Object to form.
If we sold the loan, we would generally
physically transfer the paper because the new owner is going to want to have possession of that. Q (By Ms. Mack) Okay. Now, are you familiar
with the concept of pledging a note as collateral as opposed to selling it? A I -- I understand the concept as you described
I don't know this to be a practice of Chase or I've never come to -- I've never worked on a case
or been advised that this is a practice of Chase or WAMU. Q A Okay. So, really, the concept, I understand. The
practice, I don't know if it goes on or not. Q Okay. So you don't know if that happened in
this case with either WAMU or Chase, if this loan was ever pledged as collateral?
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A There is nothing in the -- there would be
nothing that I would have access to that would memorialize such a transaction because it's not related to the servicing of the loan. And, again, I've never in
five years of working for the combined businesses been aware of any such practice or been advised of any such practice taking place. I've never heard of it. I mean, your description to me today is the first time I've ever even heard of it. happens, I would be very surprised. it before. Q Do you read any of the Security and Exchange So if it I don't know that it goes on.
I've never heard of
Commission filings for either WAMU or JPMorgan Chase? A Do I read them? MS. CREWS: Objection to form. What does that
have to do with anything? A I've read them as it relates to cases I have
prepared for, but I don't read them as -- you know, it's not something I wake up on Sunday morning and read, no. Q (By Ms. Mack) Okay. Did you read the
Levin -- we call it the Levin Report, but I believe it's called the Anatomy of a Financial Crisis. A large part
of it was dedicated to what caused the failure of WAMU? Did you happen to read that?
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A assets? Q A (By Ms. Mack) Yes. A Q I did not. Okay. Thanks. With regard to assets, what is Are
All right.
your understanding of mortgage servicing rights? they considered assets? MS. CREWS: Object to form.
Whether the servicing rights are considered
I don't know whether or not servicing rights
would be considered assets by the bank. Q Okay. Now, with regard to the purchase and
assumption agreement, do you know what certain assets were purchased by the bank? A purchase. My understanding is it was a whole bank So pretty much everything under -- in my The -- my understanding
understanding, was purchased.
of the whole backs of things -- it's easier -- I think it is easier to define the things that were not purchased as opposed to things that were, because it would be outweighed, clearly. Certain things, in my knowledge, that were not purchased were certain -- certain loans that were involved with certain types of litigation that the FDIC sought to retain. So, again, I'm working in the
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A Q A mortgage servicing. I don't know what -- and WAMU was a
large bank which had other divisions which I am completely unaware of, so those whole -- the whole bank purchase included those things as well. But as far as what was not included as far as mortgage servicing was, to my knowledge, things that were tied up in litigation that the FDIC saw better of and wanted to hold onto and manage themselves. Q Okay. Do you know if Washington Mutual -- or
sorry -- JPMorgan Chase serviced those loans the FDIC retained? MS. CREWS: Object to form.
I haven't seen any, but I would have to say I
don't know. Q (By Ms. Mack) And "I don't know" is a good
answer, because I prefer "I don't know" to guessing. What accounting or financial records did Washington Mutual have that evidenced Mr. Waisome's note as an asset on the books and balance sheet of Washington Mutual prior to the FDIC takeover? MS. CREWS: Object to form.
Again, I think the answer is I don't know. (By Ms. Mack) Okay. What accounting and
financial records does Chase have of Washington Mutual -- so this would be Washington Mutual records or
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A accounting records, financial, any type of record -that would have been created by Washington Mutual and is now in Chase's custody that would prove that Mr. Waisome's note was an asset of Washington Mutual at the time that the FDIC took the bank over? MS. CREWS: Object to form.
Well, let me go back to your previous question
because in asking your current question, I think I -- I think I may know what you're looking for or at least have some information. If we go back to the previous question which was what records did WAMU have prior to the FDIC seizure, they were working in the same servicing platform as Chase. So the records would have been
retained there as far as whether or not Mr. Waisome's loan was an asset loan or investor loan. They would
have -- they have a document facility which would have housed the original mortgage, all the collateral docs that would have basically shown that that was in our possession and shown -- you know, it would have been proof of ownership at the time. And then really rolling that all forward, Chase purchased and assumed all of the records. And
just to give you an idea, like, we have copies of all the checks for all the payments that Mr. Waisome made in
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the two years that his loan performed. Those are, So I
clearly, WAMU records that passed on to Chase.
think those would have qualified as records that would have shown that we were, indeed, at the very least servicing the loan. And then forward, again, when we talk about post purchase by Chase through the FDIC, we would have -- we take possession of the note, the mortgage, the original collateral documents and all of the -- of the credit file and all of that. The information in the
systems that WAMU was using is the same thing that Chase was using. So I think as I previously testified, we
maintained the system separately up until a period of time until pretty recently in the last year where eventually they were converged into one. So, really, the servicing never went through any major changes. The data is the data, the past
unchanged from WAMU to Chase. Q (By Ms. Mack) But I think we've already
established that you can have a servicing of a loan and not own it. A Q A Certainly. Okay. But the servicing platform and the servicing And that's, I
records are going to reflect ownership.
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A A think, what we are getting at, is that the ownership is shown as being WAMU and Chase throughout. There is no
indication that it was ever sold to another owner. Q Can we agree that the FDIC did not take over
the Washington Mutual holding company? MS. CREWS: Object to form.
Can you -- I don't know what you mean by
"holding company." Q (By Ms. Mack) What's your understanding of For
the FDIC's receivership of Washington Mutual?
example, did it include the Washington Mutual mortgage securitization corporation? Mutual Bank, FA? All the above? Or was it just Washington
Or was it Washington Mutual Bank, FSB? More? Less? Object to form.
MS. CREWS:
I haven't memorized the document which
probably spells out the entities and leaves out those that were not included in that. don't know. So my answer would be I
I don't have a full at -- on-demand
recollection of every entity of WAMU that was taken over by the FDIC and at which point. Q (By Ms. Mack) Fair enough. Okay.
And are you -- have you had the opportunity since you've been working in the last five years of working on a loan where the collateral file was at the
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Q A bank at the time of seizure, okay, the note, mortgage and the title policy, the originals, and they were not actually owned by the bank? MS. CREWS: Object to form.
Where they were -- where they were being
housed by the bank and not owned by the bank? Q A Q (By Ms. Mack) Absolutely. Okay. So how did you determine that that -Correct.
say it was a -- let's just for purposes of this next couple of questions, if Washington Mutual had originated a loan and then securitized it into a Washington Mutual trust -A Q Yes. -- the trust documents provided that the
Washington Mutual Bank, FSB would be the custodian of the documents, the collateral file, so they would be housed in the bank. A Okay?
That's correct. MS. CREWS: Object to form. However, if they were -- if
(By Ms. Mack)
they were sold to a trust, then the trust would own the loan including the note, correct? A Q Correct. But they would -- the originals would still be
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at the bank; is that correct? A It depends on the designation of the trust.
And typically these PSAs designate who the custodians are going to be of the documents. Generally, the But,
servicer of the loan is going to be the custodian. you know, that's the general practice.
But there are
cases where the custodian is going to be different from the servicer. But in most cases, I would say 9 out of
10, 99 percent of the time when we were servicing the loan and the loan was owned by a trust, we're also going to be charged with document retention and custodianship. Q Okay. So in that scenario, that hypothetical
scenario, how would you be able to determine if the loan was owned by a trust as opposed to being an asset of the bank? A A couple of different -- well, MSP is going to
tell you who the investor is, if there is an investor and if there's a separate owner other than WAMU or Chase at the time, whoever it may have been. And then
secondly, there is also a system that we use to determine loan ownership and specifically servicing guidelines as it relates to -- I'll use it for relating to default -- that tells me, like, the name it foreclosed in. So it's going to name the owner and So there's a number of
whose name to foreclose in.
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other systems that are used to, you know, document who the owner is. Q described? A I know it as LISA. I think it's an acronym I can't remember What's the name of that system that you just
for something else, but I forget. exactly what it is. Q LISA?
Is there any other system besides LISA
at MSP that you could look at to determine if there was an investor? A There -- you may -- depending on the
individual loan, if you have access to the MERS registration, you know, I would be able to determine ownership through MERS. MERS was not a party to this
one, but I'm just saying in general MERS, LISA, MSP. I think our -- I think the document -- the Docline system I made the reference to earlier may also reference ownership, but I -- but I may be wrong on that one. Q A Okay. I think that you can run certain reports out
of that database that will produce ownership information. But I know certainly MSP, which is the
go-to system of record, is going to show clearly without any question who the owner is.
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A Q Okay. What I -- I guess what I'm looking for
is did Washington Mutual -- did Washington Mutual have any proprietary system, either database or paper, to determine who owned a loan, owned the note? MS. CREWS: Object to form.
I would consider -- I would consider MSP a
proprietary system because each individual servicer has their own client. cutter. So they're not -- it's not cookie So I would consider it
You can customize it.
proprietary and I would say that would be your -- a prime example of a system that will show you who the investor and who the owner is on every single loan that's documented in MSP. Q (By Ms. Mack) Okay. And so with regard to
Chase, the MSP system, is that the only proprietary -and when I say "proprietary," I mean it's something owned by Chase and that only Chase and its employees or counsel have access to? A Q A That would show that same information? Yes. It's the -- well, I'm not sure if LISA is the I -- but I would say that
proprietary system or not. will also show you. I don't believe.
The MERS is not really proprietary,
So that's the one I'm aware of, or
those would be the two I would be aware of for the most
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A part. I don't know that there's not any others. I just
know that, you know, affirmatively they -- I can tell you from those records that, you know, who the owner is. Q Okay. All right. Other than Washington
Mutual employees and now JPMorgan Chase employees, would there be any other folks that could input data into either MSP or LISA that would change the identity of the investor or any of those types of information? MS. CREWS: Object to form.
I don't know if there's going to be any other
employee -- any other employees of any other companies that would have the ability to do that, no. don't know. Q (By Ms. Mack) Do you know if -- if either I just
Washington Mutual or JPMorgan Chase keeps a log, a computer log, of access to either MSP or LISA or Docline? A Yes. Actually, there are very strict controls Not everyone who walks in the door They have to be For instance, if you
over who has access.
at Chase can access these systems. ordered with specific privileges.
want someone to have read only privileges, they can be read only. If you want them to have edit privileges, It runs the gamut. We
they can have edit privileges.
have to affirm every year that our -- that our accesses
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A are appropriate for our position. We have to affirm for
our employees, if we have any direct reports, that, you know, their accesses are appropriate for their position. They are constantly being reviewed, and they're always looking for ways to limit access to the bare minimum of what is needed to get your job done. Q Who -- if I wanted to get a list of access to
the Waisome collateral file or servicing history, who would I -- or what department would that be kept in, if that's how you keep it? MS. CREWS: And what is it called?
Object to form.
Well, you're dealing with multiple systems Some of it is in
maintained by some inside people. partnership with LPS Services.
And I would say from the
MSP standpoint, because I think that's, you know, heavily partnered with LPS, it's probably LPS who would provide us a list. If we needed a list of everyone who
has ever touched the loan in MSP and the individual identifiers, they would probably be able to run a report and tell us that. The other system such as, like, Docline and who has got access to that, that would probably be internal. And that system, as far as I am concerned, is So
run by the custodianship, Chase custody services.
Chase custody would provide a report on who has accessed
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the file room to pull up the room or who has accessed the loan for whatever reporting they were looking for and so on. So it would be the administrators of the
particular systems. Q (By Ms. Mack) Okay. Any other systems that
you haven't just mentioned that I would -- for log-keeping purposes? A There are -- again, because there are certain
folks who can access view only and there are certain folks who can change, when you are looking at things like iVault, which is the imaging system, you really can't change anything there. It's just a picture of
what document you're looking at. So, certainly, I am sure you can get a list of the people who have accessed the loan from that point, but the purpose would be I don't know what, because they can't change anything or manipulate anything there. They probably do have a list of people who can upload images to the loan records into iVault, which is handled still out of Monroe, which is Chase custody services. Q A Q In Monroe, Louisiana, right? Right. Okay. Now, with regard to the placement of
the endorsement, have -- let me just back up for a second.
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In this case, are you aware of the initial pleading by plaintiff, the complaint that was filed and served? A pleading? Q lawsuit. A I believe I have seen and read it. I mean, I The first one. The one that started the All of the pleadings or just a specific
don't know it through and through. Q A Okay. I think there was -- what sticks out to me, I
think, there might have been a lost note claim in there somewhere. Q Do you know -- do you remember if there was a
note attached? A Q A Q A To the original one? To the initial complaint. I don't think so. Okay. I don't know for sure, but I don't think so.
Why would they do that if they have a -- well, maybe a copy. Q They may have, but I don't know. Okay. Are you aware that one of the issues in
this case is whether Ms. Riley's endorsed -- endorsement on the promissory note existed before the lawsuit was
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A A filed? A I understand that to be a point of contention
in the case, yes. Q Okay. Do you know what document or system you
would look at to determine when Ms. Riley's stamp was placed on the promissory note in this case? MS. CREWS: Object to form.
I am not aware of any system or document that
is going to memorialize when her stamp was placed on the note. Q (By Ms. Mack) Do you know if Washington
Mutual had any system in place for tracking when a note was endorsed? A I would say generally there were systems and
processes in place that define when it should be endorsed as a matter of the normal business practices, but not specifically as to the moment they -- or even the week or month it may have been physically stamped. Q A Those practices, were they written? I've never seen the written -- I've never seen
them, so I don't know. Q Would you agree with me that Washington Mutual
bank's business practices were not sound? MS. CREWS: Object to form.
I would probably not agree with you as to the
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Q loan servicing portion. As to whether or not their
decisions on the types of mortgages they may have been writing, I think that may be a conversation separate and apart from what we were doing as a servicer. But
servicing, certainly, is not impacted by the types of loans that were underwritten. regardless. Q A (By Ms. Mack) Okay. They service the same,
So, again, your question was were WAMU's And I think that would be a
business practices unsound.
very general and broad, sweeping statement that doesn't apply to servicing in particular. Q Now, with regard to the mortgage and
underwriting practices specifically, do you have an opinion about the soundness -- safety and soundness of those -MS. CREWS: Object to form. -- parts of the business?
(By Ms. Mack) MS. CREWS: MS. MACK:
Are you talking about origination? Well, yeah. I mean, origination,
underwriting. whole category. MS. CREWS:
It's going to all fall into that
He's not here to testify about
anything that happened at origination. MS. MACK: You don't think this falls under
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general information and facts related to the loan and borrower as maintained in the plaintiff's business records? MS. CREWS: If he can answer the question,
that's fine, but he -- I don't think he is going to know about specific things about origination. MS. MACK: Okay. Well, we have facts relating
to the endorsement of the note and WAMU's typical business practices relating to loan originations and endorsement. MS. CREWS: And he can testify to that topic
if you want to ask him about that. Q (By Ms. Mack) What do you know about WAMU's
typical business practices relating to loan origination? A question. Q A Q A Well, I know quite a bit. That's a very broad
Are you looking for something -Yeah. -- in particular or -The -Loan origination is a long process and
involves a lot of steps. Q I'm probably going to want to get some
documents out so I can ask this next round of questions. Give me a second. Actually, while I'm looking for those,
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A Q A Q Mr. Nardi, I'm going to ask you some more questions about the mortgage itself, which is Exhibit 4. Specifically, Paragraph 10, 18, 20 and 22. So here you go. 20 and 22? Yes. Okay. Okay. With regard to Paragraph 10, are you
familiar with what mortgage insurance is? A Q insurance? A My understanding of mortgage insurance is Yes. Okay. What is your understanding of mortgage
depending on the requirements of the lender, the borrower may be required to pay an additional amount on top of the regular mortgage payment that is not -what's the word -- doesn't apply to their payment -doesn't apply to their mortgage. It's basically a fee,
for all intents and purposes, that will basically ensure losses that the lender, if the lender remains the owner or -- you know, basically, you know, if I had to use the term "party in interest" to the loan. Like I say, any
losses that may occur from the borrower defaulting on the payments early, you know, or basically a loan not performing.
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Q Q A Q Okay. That's my understanding. Now, do you know the difference between lender
placed mortgage insurance and private mortgage insurance? A I've not heard the term "lender placed
mortgage insurance," so -- and maybe the terms are getting mixed up. Usually, like, forced placed
insurance relates to property coverage, not insurance related to the performance of the loan. PMI versus MPI, I don't know if that's the question you are asking, mortgage insurance, you know, PMI versus MPI. Is that the question you're asking? Well, it depends on what lender you are
working for, I guess, because there's -- I think MPI and lender placed mortgage insurance have been referred to, in my experience, interchangeably. A Okay. I haven't heard and I didn't want to So I'll -I appreciate that.
confuse the issue. Q A Thank you.
-- assume you are not referring to actual
coverage of the property -Q A Correct. -- and you're talking about -- do I know the
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head. Q A What's your understanding of FHA loans? Well, in -- and this is just because I've The difference between those two? Let me -- I have to run
some definitions in my head, so hang on. Q A No problem. Take your time.
I don't deal with the issue very often, so I
I -- my understanding is probably fairly rudimentary. have an idea in my head about MPI as it relates to -for some reason, FHA loans pop in my head. sure if it only relates to FHA loans or not. So I'm not And then
PMI relating to other types of perhaps privately owned loans. So I don't -- I don't think I have a really good
working -Q A Okay. -- definition or a way to divide those in my
recently researched some case that had an FHA loan.
loan to value or -- the borrower didn't have enough to make the 20 percent down payment on the loan, so you basically had a larger than 80 percent loan to value. They were financing, you know, 90 percent of the loan. So basically the -- the backer, the guarantor of the loan, required that they pay an additional, like, $98 a month. That didn't apply to the mortgage payment but
basically covers an insurance policy that, you know,
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loan? case. that basically said it will cover you in case there is, you know, a payment default or some issue with the loan. And then even further, I researched that after a period of time, the borrower or -- the borrower can basically have that removed once they hit a certain percentage of equity in their home or a certain number of years goes by. So my understanding is very specific to this There is probably a lot of other nuances that I
am not aware of, but that's -- that's what I learned in order to -Q A Q insured? MS. CREWS: THE WITNESS: MS. MACK: Are we talking about this loan? No, we're -How did you --- to become knowledgeable. How did you determine that the loan was FHA
I'm asking him what his
understanding of FHA because he was describing it in terms of the insurance. A How was I able to determine if it was an FHA I could look at origination documents, and it
will easily -- I think it's right on the application. It will say FHA on it. Q (By Ms. Mack) Okay.
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A So it's pretty easily identifiable. And
systemically, I think it's there as well. tell you where in MSP I would look at it.
I just can't But from my
research, I was looking at origination documents which clearly identified the loans as FHA. Q Okay. Now, the -- do you know if
Mr. Waisome's loan was an FHA loan? A I would have to look at the application again, It would only take
but I don't -- I don't think it was. me a moment to look. Q A Do you know --
It was a cashout refi, so I don't know that it I'm almost positive it couldn't,
could be an FHA loan. but I could be wrong. Q Okay.
So do you -- okay.
So let me back up.
Are FHA loans identified by loan number or is it an indication on the loan file? Let me ask you -This is one
tell you why I'm asking you this question.
of the documents that was produced to us in preparation for this deposition. A Q What's the question? Okay. The question is: Well, first, have you
ever seen that document before? A I have not, but it was probably in a big pile
of documents that I had.
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A Q means? A I don't know anyone -- I mean, not off the top MS. MACK: We're going to mark that as -- I
think 5 is the next number. (Defendant's Exhibit 5 was marked.) Q (By Ms. Mack) The document we've marked as
Exhibit 5 was a document produced in preparation for this deposition. It indicates that there is an FHA
lender identifier number associated with this loan. That's exactly what it says. Do you know what that means? I don't. Okay. Do you know who would know what that
of my head, I don't know who would know. Q A Okay. I'm sure I could find out, but I've not --
looking at the term FHA lender identifier, it -- it appears that it's identifying a lender that is associated with FHA -- FHA funding by a certain number. So, again, I'm only looking at this for what it is. looks like it's identifying a lender by number. I'm It
sure there are a lot of lenders who work with the FHA processes that have to be identified uniquely, so it could be that. Honestly, I don't know for sure. I would have
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look. to do some additional research. It would be nice to
say, yeah, that's WAMU's FHA lender identifier, but I just don't know that to be the case. Q Okay. So what would you look at to determine
if that was the lender identifier number as opposed to an FHA loan identifier number? A I wouldn't -- I wouldn't even know where to go I would basically start to talk to who I think
would be in the know -Q A Q an answer? A Q A I'm sure I could. Okay. I'd have to find somebody knowledgeable enough Okay. -- regarding FHA loans. All right. But you think that you could get
and hopefully with this -- you know, this is, obviously, a 2007 document, so this would be a Chase document -excuse me -- a WAMU document. So I would probably
identify or try to find someone who was working FHA loans at the time. Q A Q When -- with WAMU? Correct. Okay. Let's see here. Are you
familiar who -- who would be -- who would be the people,
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as you put it, in the know? Do you have people you are
thinking of as we're sitting here today? A Well, not in particular. I have -- working in
and around Chase legal, you tend to find people who worked in other parts of the business at some point. helps when you get people that are just not legal experts. You need to have people who are experienced in It
loan servicing and, you know, all areas of originations and loss mitigation. And so what I do is just try to
maintain a network of people that I can go back to and say, Hey, I've got this issue and I've got a question. Can you tell me what this was about? Basically just
network and be able to verify that some way through business records. See, a lot of these questions just come up like this one. What is this? Well, I don't know what
this is, but I can backtrack and find what the number represents and then go back and find somewhere in the system of record where I can verify the information is what someone has told me that it is. Q Okay. All righty. So if we're talking about
the origination of this loan, then it's fair to say that you don't know everything about it. go talk to some other folks? A Well, I -You would have to
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A MS. CREWS: Object to form.
-- can tell you what -- as far as the I
origination goes, what's included in the documents.
think everything is well-documented in the origination file. I mean, it's all there. I've seen copies of the
application, what the loan was intended to do, what -I've seen copies of the closing documents. So it's all well-documented, so there is nothing I couldn't answer as far as the originations for this loan goes, you know, given the amount of documentation that we have. to go to anyone else. I wouldn't necessarily have
I would need to refer to
documents and business records. Q (By Ms. Mack) Okay. And would one of those
business records be Optis? A Q I haven't heard of Optis before. So if I asked you questions about Optis Center
regarding this loan, you wouldn't know anything about it? A Q A Optis Center? No, I wouldn't.
It's a proprietary WAMU software. Okay. What was it used for? You're asking
the questions. Q I was going to ask you. But since you don't
anything about it --
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A A Q I don't know anything. -- I'm kind of stuck there. Okay. Well, I'm glad I didn't ask a bunch of That would have
questions and you said "I don't know." wasted a bunch of time. MS. MACK: 12:00.
Let's see what time it is.
10 to
I have a big chunk of questioning, and I'm
trying to decide when to get to it because it's all regarding the same stuff. some smaller things. Q questions. A Q Okay. Do you know if there was any insurance at all, (By Ms. Mack) Going back to the insurance And sometimes I can do
FHA, PMI, MPI -A Q I don't recall. -- regarding the alleged default and what
would happen in the event of alleged default? MS. CREWS: Objection. Form.
I don't recall seeing anything in the
documents that would reflect there was some type of insurance premium being paid by Mr. Waisome or by anyone or if there was any coverage in the event of default or anything like that. I would certainly like to say for
sure I would like to definitely see the documents --
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means? A I believe that the paragraph clearly usually the origination documentation will describe any type of insurance premium the borrower had to pay, and then remove from that if there was anything that the bank was paying, which is generally not the case. usually the borrower paying for the insurance. just review the system of record. to this point, nothing. Q A (By Ms. Mack) Okay. It's
I would
But in my review up
Nothing that I have identified shows there is
any insurance paid. Q Okay. So going on to our mortgage, I think With
we've got -- 18 is next -- the next paragraph.
regard to Paragraph 18, if the borrower wanted to transfer the interest in the property, they had to get permission from the lender. Would you agree with me that's what that
contemplates transfer of the property and the obligations of the borrower under the mortgage to consult with the lender ahead of time, yes. Q So for purposes of transfer, it would be
important for the borrower to know who actually owned the note or, I guess, the deed of trust? the deed of trust as well. They reference
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A that here. A question. Q MS. CREWS: Object to form.
I just want to make sure I understand the It would be important for them to know who -(By Ms. Mack) The owner of the note, because And so if you're trying
the mortgage follows the note.
to transfer the interest on the property pursuant to Paragraph 18 under the mortgage, you would have to know who owned the note. MS. CREWS: Object to form.
I don't know that -- I mean, it doesn't say It doesn't say you need to identify or It just identifies the lender. Okay.
inform the note holder. Q A Q A Q A Q (By Ms. Mack)
So I'm not going to interject -Okay. -- words there. How about Paragraph 20? 20? I do. Do you have a question? I just didn't know if you need to
review it first. A Q Go ahead. The sale of the note, change of loan servicer.
What is your understanding of the -- of the loan sale? Is that something -- I think you already said that the borrower does not need to be apprised of the loan sale.
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A MS. CREWS: Object to form.
I will try and just recap my previous answer.
As far as the servicer goes, clearly, there is a need for the borrower to know who their servicer is because that's who they make their payments to. That is who is
handling all of the customer service level issues and basically all the interactions with the customer. As far as who owns the loan, they are not necessarily going to have contact with the owner of the loan itself. As I gave an example before, if the loan
has been securitized and now is in -- you know, involved in a trust, Joe Borrower is not going to pick up the phone and talk to Wells Fargo as the trustee. They are
still going to be contacting Chase as the servicer for whatever issues that might come up in the life of the loan. Q (By Ms. Mack) How would Mr. Waisome, if he
wanted to speak with his lender -- the owner of his note under Paragraph 20, before, say, suing them, okay, if Mr. Waisome hypothetically wanted to speak with the owner of the -- you know, the note -- not the servicer, but the owner -A Q Okay. -- under the second paragraph of Paragraph 20
in the mortgage, the borrower has a duty to actually
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A A know who the owner is and touch base with them before he sues them. MS. CREWS: Object to form.
As far as finding out who owns your note, I --
I've never had to do it personally, and I have really not run into a situation where I have had to answer a question like that before. But there's no reason the
borrower can't call their servicer and ask who owns their mortgage or owns the note, you know, who the investor is. locked down. Q (By Ms. Mack) Are you aware that Mr. Waisome It's not secret information. It's not
attempted to determine who the entity was in this case prior to the lawsuit being filed? MS. CREWS: Object to form.
I'm aware of some communication with the bank.
I don't know when it was in relation -- I don't recall when it was in relation to the suit, and I don't remember specifically him asking for who is -- who the owner was. But I'm not saying it wasn't there. I'm
just saying I recall some communication specific -- very specific and detailed questions being asked. I don't
recall what timeframe it was in relation to the suit or whether or not he specifically asked, Is there an investor, who is it?
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Q A Q (By Ms. Mack) Yes. -- would that have been something you would But if he had --
expect would have been answered? A There is absolutely no reason not to answer Like I said, it's not -- now, the
the question.
question is how -- if the question is who is my -- who owns the note, certainly, there is no need to hide that. You can just answer the question. Now, if you asked, How do I contact such and such, then the question may not be answerable because Wells Fargo as the -- and, again, I'm going to go back to the Wells Fargo as trustee for WAMU pass-through certificates. They're not going to have contact They are not going to They are
information for the borrower. take the borrower's call.
It's not their job.
not -- they are basically removed from the borrower through -- by the servicer. The servicer is there to answer any questions and take care of anything that can be handled. There is
no relationship between, really, the borrower and the underlying owner of the note at that point while the loan is performing or is in some type of, you know, default status, wherever the life of the loan. why the servicer is the servicer. That's
They are handling
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A process. that relationship in lieu of Wells Fargo as trustee. Q But under Paragraph 20, the borrower has an
affirmative duty -- and I'm reading the paragraph -- to contact the lender prior to commencing any type of a judicial action over an alleged breach. And if
Mr. Waisome had written these letters before he was sued, seeking to contact that lender, that owner, do you know if he was given an answer? MS. CREWS: Object to form.
I believe the answer is -- there is a specific And if it's -- if this is the specific
instance I'm thinking of, it's pretty well-documented that there were responses initially. And then I believe
that the answers may have come through counsel because of -- I'm not -- again, this is my lack of understanding of the exact timing. But I think if we're represented
by counsel, a lot of these requests come through after the point or they are being processed to the point where we are then represented by counsel. So the answers
would have been funneled through counsel. I can't say definitively whether or not he was answered directly by the bank or if the questions were answered through communications with our counsel at the time. And as far as being able to contact the lender, I
think I pointed out a section of the documents that
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Q A A Q A Q identifies the lender as anyone who has a note at the time or -- you know. So the lender is really, you know, The servicer is the lender. So he would have been There was no separate
in this case, the servicer. They are one and the same. contacting the same people. servicer or separate lender. Q (By Ms. Mack)
Okay.
Well, if I could just
point your attention to Page 1 of the mortgage. A Q Bank, FA. Would you agree with me? Yes, it is. Okay. Are you aware of the fact that Sure. The lender is defined as Washington Mutual
Washington Mutual Bank, FA did not exist after April 4, 2005? MS. CREWS: No. (By Ms. Mack) No? But hypothetically, if Object to form.
Washington Mutual Bank, FA was no longer an entity named Washington Mutual Bank, FA as of April 4, 2005, who would Mr. Waisome then contact? MS. CREWS: Object to form. Okay. Let me just give --
(By Ms. Mack)
Well, I mean, the answer is the folks who are
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A servicing his loan, the people who are sending him statements every month for his loan, and the people who are sending him letters about his loan status. It's the
same folks he had been dealing with in the two years prior to his default. I don't think it was a big -- yeah. The same
folks he had had been dealing with two years prior to his default. Q Okay. So if the -- if Mr. Waisome was dealing
with an entity other than Washington Mutual Bank, FA as loan servicer, then from your answer, you believe that those two entities would be one and the same? MS. CREWS: Object to form. I am just pointing
I don't think I said that.
out the obvious that he wouldn't necessarily find someone else to tell about whatever issues that had come up. If he was going to sue -- and, again, I'm still
kind of -- I'm referring back to Paragraph 20 when you said he has an obligation to inform the lender that he is going to sue. If he's had no other contact with
another party, there is no reason for him to go out and seek another party to inform. the right folks all the time. As to whether or not these parties are one and the same, I didn't say that. And I don't know whether He has been dealing with
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Washington Mutual, FA existed at the time. I know that
Mr. Waisome was making payments to Washington Mutual and was getting correspondence from Washington Mutual. And
basically if his loan was in all other forms and manners being serviced by Washington Mutual, there would be no reason to think he needed to go anywhere else. Q (By Ms. Mack) Are you aware of the fact that
this loan was originated through NAMCO? A Q A Q I'm sorry? Do you know who NAMCO is? NAMCO? I don't.
So if I told you that Mr. Waisome's loan was
originated through NAMCO and then transferred to Washington Mutual Bank, you wouldn't know anything about that? MS. CREWS: scope. A NAMCO yet. I don't know. I haven't seen the reference to Object to form and beyond the
The -- Washington Mutual did a lot of what
is called correspondent lending, so they may have -and, again, I have not seen NAMCO before. But I know
that WAMU didn't have branches and locations everywhere in the country, so they did a lot of correspondent lending. And a correspondent lender will start to
process the loan with the contract with Washington
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Mutual that says, Hey, you can write loans for us and you can use our paperwork. And we will agree to
purchase those loans and basically fund those loans as long as you meet all the criteria. But I don't see any documents -- I haven't seen any documentation where NAMCO was listed as a lender. The note and the mortgage show Washington
Mutual, so -MS. MACK: That will be marked as Number 6.
(Defendant's Exhibit 6 was marked.) A Q Go ahead. (By Ms. Mack) Mr. Nardi, did you have an
opportunity to read Exhibit 6? A Q I did. Okay. And does that refresh your recollection
or help you understand why I asked you questions about NAMCO? A Well, I think it's pretty clear the letter is
from Washington Mutual identifying a purchase they made of Dime Bancorp and explaining the relationship between NAMCO and Washington Mutual. Q Okay. Sure.
So, now, with regard to the origination
of the loan, what is your understanding of the position that NAMCO, a subsidiary of Dime Bancorp, had with regard to the origination of this loan?
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A A A Q MS. CREWS: Object to form.
Will you repeat the question? (By Ms. Mack) Yeah. What's your
understanding of NAMCO's role with regard to the origination of this loan? A itself. Well, I think the document has to speak for It simply states that WAMU purchased Dime And it goes
Bancorp, and NAMCO is a subsidiary of them.
on to describe that this letter is informational only and doesn't change any terms and conditions to your loan application or written commitments previously issued -THE REPORTER: THE WITNESS: You're going too fast. I'm sorry.
This will not -MS. CREWS: Do you want to just read it into
the record? THE WITNESS: Sure.
Dear Mr. Waisome, as you may be aware,
Washington Mutual, Inc. acquired Dime Bancorp, Inc. and its subsidiary companies. One of Dime Bancorp's
subsidiaries, North American Mortgage Company, NAMCO. As part of this acquisition, NAMCO's assets and liabilities were transferred to Washington Mutual Bank, FA, Washington Mutual, a subsidiary of Washington Mutual, Inc., so that Washington Mutual is now
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conducting business under the names Washington Mutual and NAMCO, a division of Washington Mutual as a result -- excuse me -- as a division of Washington Mutual. As a result of these transactions, the mortgage loan application you filed with NAMCO will now be processed by a Washington Mutual Bank, FA. letter is for information purposes only. This
There will not
be any changes to the terms or conditions of your loan application or any written commitments previous issued to you by NAMCO. You may, however, receive information
or documents regarding your loan application from us either under the -- under either the name NAMCO or Washington Mutual as we continue the integration of our company -- excuse -- the companies. Please direct any questions you may have to customer service at 1-866-WAMU-YES. We appreciate this
opportunity to serve you and thank you for utilizing the power of yes with Washington Mutual. Q A Q (By Ms. Mack) Sure. With regard to the letter that's been marked Okay. Thank you, Mr. Nardi.
as Exhibit 6, would you agree with me that the letter references the prior commitments and terms and conditions of the loan applications submitted to NAMCO?
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A A changes. Q I think it says that there would not be any It doesn't refer to them specifically. My next question is: Where are those
commitments and loan applications? MS. CREWS: Object to form.
The only loan application I'm aware of is I
the -- I think the one that's already been produced.
think this letter, although very informative, leaves out the timeframe in which Dime Bancorp was purchased by WAMU. It may very well be years prior to the actual In fact, there is a date at the bottom of
application.
the letter that's dated September 4, 2002. So it would -- it may not be such a -- such a jump to show that this transaction actually took place five years prior to the origination of this loan, so Mr. Waisome may never actually have gotten anything under the name NAMCO. And this letter was just for
informational purposes only as it points out, not that he actually received documentation or commitments or loan applications or any documentation under the name NAMCO. I'm just pointing that out as a possibility. I don't know that to be the case. I only know that the
documentation that I reviewed, to my knowledge, has been exclusively Washington Mutual documentation.
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Q move on. Are you aware of any other loan numbers associated with Mr. Waisome's loan other than the one that we've identified in the promissory note? A Q I am not. Okay. The next round of documents are A Q Q (By Ms. Mack) But in light of what you just
read in that letter, it could actually be NAMCO under the name Washington Mutual, right? MS. CREWS: Object to form.
I -- I don't understand the question at all. (By Ms. Mack) Okay. Well, I think the letter
indicates that you could have a NAMCO loan that would be called Washington Mutual. MS. CREWS: Object to form. It speaks for itself. I'll
(By Ms. Mack)
documents that were not provided to me during discovery. However, they do concern this loan. MS. CREWS: MS. MACK: MS. CREWS: MS. MACK: Is this going to be a composite? Yes. Okay. We want to mark it.
(Defendant's Exhibit 7 was marked.) Q (By Ms. Mack) Mr. Nardi, have you had an
opportunity to review Composite Exhibit 7?
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A Q before? A Q A Q I don't believe so, no. Do you know where they came from? I don't. Okay. I haven't seen them before, so -Sorry. Yes. Okay. Have you ever seen those documents
That was a bad question.
Would you agree with me that the account number indicated on those documents is different than the account number indicated on the promissory note and mortgage? A Q Absolutely. Okay. And would you agree that the number is
not just truncated, it's just completely different? A Q It's an entirely different one. Do you know, as you're sitting here today as
the corporate representative for JPMorgan Chase as the acquirer of assets of WAMU, why there are two account numbers? A Well, I can't say with any specificity. I can
give you examples of why that might be. Q A Okay. First of all, I would like to point out we're
looking at -- like, the first page is an unsigned authorization for release of information. Let's say
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that Mr. Waisome applies for a loan and decides that, you know, I think I can get a better deal on another lender, stops that process and starts it with another lender and says, you know what? you guys are doing business. I don't like the way
He goes back to the
original lender and says, I want to do this loan again. He is going to have two different loan numbers because the first time he originates, he's assigned a loan number. And the second time he originates, he is going
to get a loan number. Again, these documents -- which, again, I don't know where they came from or what loan they are referring to -- could have been a separate origination. So that would be like if I was to -- you know, in a vacuum, I would say that probably the most likely scenario was that there was two tracks going on. He
applied at either two different times, or maybe there were two different types of loans. Maybe he was
applying for revolving line of credit and then reapplied for refinance. I don't know, because I don't know where
these documents came from. But there are a lot of -- not an infinite number of explanations. But in a vacuum, I couldn't say
specifically why this has a different loan number on it. With additional research, I'm sure I could probably
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Q provide you an answer. Q Okay. The loan number in the format that is
indicated on Exhibit 7, it appears to be a different type of format. And I'm just going to ask you if you
have ever -- if you have any idea why the format is in this format without having the three numbers at the end. MS. CREWS: Object to form. And if you don't know, I'm
(By Ms. Mack)
just -- you know, just let me know. A No. And just to kind of give you an idea,
when I deal with loans and anyone in the company who deals with loans on a day-to-day basis, they are always 10-digit loan numbers. Exhibit 2 are not used. These last three digits on I don't know what they are The
there for to begin with, but they are not used. 10-digit identifier is how we use.
So although I agree they are in two different formats in -- let's see -- Exhibit 2 as opposed to Exhibit Number 7, I'm sure there's probably other documents which will show just the 10-digit loan number on the document itself. number on this letter. So there's examples where it would most likely actually -- if you looked at the documents in totality, you would most likely see the 10 digits as opposed to Let's see if it's got a loan
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the 13 digits with the hyphen. Q Okay. And we are -- I think we are going to
see some of those documents that have the 10 digits on the note. So you think -- and I'm not asking. You can
clear it up later.
But you think that might be the
reason there is the difference in the two, other than the numbers themselves? A No, no. The fact that they are both 10 digits
indicates to me that these are, you know, assigned loan numbers. They are generally 10 digits long. They
are -- whether or not -- as far as formatting, the only difference between Exhibit 2 and Exhibit 7 is that this hyphenated last three digits is not present. But
otherwise, the formatting of the 10-digit section, there is no formatting differences. Q A Q A Q Okay. It's just 10 digits of numbers. Okay. There is no formatting at all. Okay. Fair enough. All right.
MS. MACK:
Now would be probably a good time
to break because the next -MS. CREWS: MS. MACK: Okay. -- group of questioning is going to
be about numbers and stuff that you guys produced.
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A It's going to be the account stuff. MS. CREWS: MS. MACK: MS. CREWS: MS. MACK: Okay. Lunch? Sure. Are we off the record? We are off.
I'm sorry.
(A recess was taken.) MS. CREWS: Before you start, if we can put To figure out why that loan
this on the record.
number was different, you asked about Document Number 7. And he figured out what that was, if you
want him to explain. MS. MACK: Great.
I did some research while eating lunch, and it
appears that this -- these documents are a part of a larger document group which contemplate a completely different mortgage, an actual fixed rate mortgage which Mr. Waisome applied for at some point. loan number is different. That's why the
It would have been a It never actually I
completely different transaction. consummated.
So the documents we have are very few.
think some of these documents were included in what I viewed. There's some additional documentation. But
it's a completely different type of mortgage, so it's not related to the actual mortgage that closed. Q (By Ms. Mack) Okay. And you didn't happen to
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yes. Q Okay. And we're going to -- I'm going to ask If you much. A Q No problem. Okay. These are documents, Mr. Nardi, that -find out what that 097 is, did you? A No, I did not. I was actually more interested
in this because I thought this might have been more of an interesting topic, the extension. Q Thank you. I appreciate that. Thank you very
actually, unfortunately, I punched a hole, so I'm going to have to share mine with you. Actually, those are the
documents, but I'm going to actually ask -MS. MACK: copy of this? (Discussion was held.) (A recess was taken.) Q (By Ms. Mack) Mr. Nardi, have you ever Is there a way we can get a clean
seen -- we're going to mark this as Exhibit 8, this loan history. (Defendant's Exhibit 8 was marked.) Q (By Ms. Mack) Have you ever seen a loan
history like this before? A I've seen loan histories like this before,
you what the numbers mean as we go line by line.
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yes. Q Okay. Now, the next thing is that INV. What look at the top left corner of Exhibit 8, there is a number. A Q A Q A Q It's I9081-721. Yes. Do you know what that means? I do not. Do you know who would know what that means? I don't. Okay. Now, if you go across that same line
past the Washington Mutual Bank, FA where it says, Loan history YTD, that's year to date, right? A It appears to be representing year to date,
does that mean? A Well, usually when I see the letters INV
together with a code behind it, it generally indicates an -- it's indicating an investor or ownership indicator. Q A It's a code to indicate who owns the loan. Okay. And what does A11 mean next to the INV?
I don't know what it means, but it would
probably be a code to identify, like I mentioned, the owner or investor on a given loan. Q A Where would we find what A11 means? I don't know if the information is within MSP,
but there are records kept as to individual loan
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investors and what their designations are as far as within MSP. Q Now, if the investor was Washington Mutual,
would A11 mean Washington Mutual? A Mutual. The code would probably designate Washington I don't know that to be the case because I
don't know what A11 was at the time, and those codes can change. So conceivably from 2007 when WAMU had investor
code A11 identifying itself as the investor or the owner, to what would be represented in the system today would be different. So I would have to go back and
determine and research how WAMU identified itself in these loans. So I can't say for sure because I just
don't know for sure. Q Okay. Now, the next indication is CAT. What
does that mean? A Q A Category. And 058? What does that mean?
Again, I don't know what the code means, but
generally that would categorize the loan as a specific type, if it was FHA, Fannie Mae, Freddie Mac. It could
have connotations as to whether it was a fixed or adjustable rate. So anything that -- anything that anyone wanted to put down as the code or anything that the bank
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wanted to describe it as, a code would be assigned to that descriptor and put into the category. Q And I know I asked you if there was, like, a
master -- a key for all of these codes. A Q A Uh-huh, yes. And you said that you weren't certain or -I said I know that the records are kept as to I don't know
what the codes meant at any given time. where it's located.
I know it's not -- I don't think But I think that given
it's within MSP specifically.
enough time to do research, I could determine and provide the list or codes. Q Okay. Do you know if there is some reason why
it's not provided to, say, someone like me who is coming to ask your deposition questions about documents like this? key. A I think it -- well, I think there's probably a But probably the most important thing It would make our life a lot easier if we had a
number of things.
is these codes change from time to time, especially since the records we are looking at right now would have been produced by WAMU, and it's not 2007 anymore. So
not only do we have several years of time elapse, but also the ownership has changed. So what WAMU has used as Code A11 may not
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translate directly to what Chase was using for A11. the answer is time and changes. static. Q So if I wanted to get those, say -- when I say These things are not So
"key," I mean, like, the translation for each of the codes that we're talking about -- I would want to ask for a date range and indicate -A Q That would be the best way, yes. I'm sorry.
I'm just trying to figure out how to get the Thank you.
information. A
The best way to determine investor by code in
a given date time would be to ask specifically for that because it's going to change in the transition from WAMU to Chase, because we would have had a different investor code on ours. Q Gotcha. Now, going over on that same line, we Now, correct me if I'm wrong, but it
have INV number.
appears to be the account income. A number. Q A Why is it called INV number? Inventory number. I mean, it may not always As far as I can tell, yes, it is the account
be referred to as a loan number. Q So INV for purposes of A11 and INV for
purposes of the INV number, INV doesn't mean the same
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A thing? A Q Is that what you're telling me? That would be correct. Okay. MS. CREWS: MS. MACK: MS. CREWS: MS. MACK: Why make it easy? What's that? Why make it easy? Yeah, really.
Well, these types of transactions histories
are very difficult to read and understand if you're not doing it all the time. And there are several --
actually, you will probably find several different versions of transaction and payment histories that have come out of the same exact system. just a little different. So some people get used to reading certain ones, and some people never get into it. This isn't one The formatting is
I particularly am fond of and would refer to if I was trying to study up on a loan. I would try to find one
that was a little neater and wasn't as header intensive. But there are a lot of things that are not applicable. Q (By Ms. Mack) Do you know what the T13 means
next to the date? A Q I don't. Okay. Then down here going to the next -Is that -- I know it's the
well, it says Page 90118.
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page number because if you turn to the next page, it says 90119. Does this mean that there are 90,117 pages before this? A Well, the short answer is yes. The longer
answer is this is most likely a purged history which would have gone into a set of documents that would have included unrelated pay history. So at some point, there
is going to be a header break where you'll see documents that are from different borrowers' loans before and after that. So this is a -- this is a, like I said, These
what I would consider like a purged document.
are -- these are representations of what is on the electronic system. Q Let me ask you with regard to -- okay. So
this is -- okay.
So this is -- there's probably -- this
is the part of the history that pertains to Mr. Waisome's -A Q A Q Correct. -- loan. Correct. So if we were going to ask you, Mr. Nardi,
could you go -- and, obviously, through your counsel. But we would like to know -- we want every piece of paper that has Loan Number 3018341986 in your files.
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How long do you think it would take to retrieve that? A Given what I know of the document retention
and processes, retrieval processes and the age of this loan, probably not more than about a week because the -even the documents that are in cold storage, what's called like -- and these are all kept in Monroe. So
even if a document is very aged, we do keep things, at a minimum, seven years past the loan being paid off or whatever the end result -- the end of life of loan. Q A Okay. So even those documents are kept seven years I can still order docs on one of these, you
after that.
know, dead loans, and it wouldn't take more than a week for them to go into this roomful of boxes of files and pull out this stuff and get it to me. Q A Okay. So within a week. And most of the stuff is I can log into an imaging
actually at my fingertips.
system and pull off probably 95 percent of every document that was ever produced on the loan. The things
that are not always at my fingertips are going to be things like the transaction histories, things that would be too lengthy just to scan into the system continuously. The note, the mortgage, the -- you know, all
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the documents from origination, those are static documents. They don't really change. But these things There's
change because the transactions are continuous. charges for insurance.
Borrowers make payments or, you It's all, you know, in a
know, whatever takes place. large set of documents. Q Okay.
Going on to the next lines. So let's see.
And things This
that I know, I will skip over.
is -- going to the line below the address, the one that begins with First Mortgage, if you go all the way over, it has a due date of 1/1/2008. Is that the next payment due date as of the date that this was printed, which appears to be 12/31/2007? A Q A Is that what that is?
Let me read into the document a little bit. Sure. Unless I am incorrect, I believe that January I
1, 2008 is actually the date that is due now.
probably want to look at a copy of the breach letter to determine that, but I don't think it's actually the date the loan was due for as of -- well, December 31, '07. Then, you know, in this case, it would -- okay. It
would make sense because this document is dated December 31st, and January 1st is clearly a future date and, really, a very near future date. So it very well could
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be. I guess I'm hesitant to say because this document -- this document in -- you know, if it was requested the year before, it could say 06. Or if
it's -- if this date is not actually the date the document is produced. And, for instance, I can go back
and query a transaction history given a given window. So it would give me the date, a transaction history in that window and show me when it's due for today. So it -- you know, it will show you what is going on today, but given a given window. But it makes
sense in this particular instance that the due date here, it was reflective as of December 31, '07. Q Now, if you go down to -- and I'm not going to I just want to make sure we are on the Let me see.
mark this up. same page here.
Down to -- I'm reading upside down, which is always interesting. There we go. These two columns
right here that say DT and BM, what do those mean? Start with DT. A Sure. Let me see. I'm going to read the
whole line across to see if it starts to make sense -Q A Sure. -- in what they are accounting for in each of
these little buckets here.
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A Q A too much. Sure. The descriptors are not really helping me out The rest of that line is pretty clearcut, but
the DT BM don't give me enough information to be able to tell you for sure. Q Going -- okay. Let's go back to the line What does
right above it, because I have a question. ESC BAL mean? A Q A Q A Q A Q
That would typically refer to escrow balance. Okay. The REST ESC?
Restricted escrow balance. How about REPL RES? I don't know. Okay. What about the HUD BAL?
I don't know. Okay. If you go past all the way to the right
of that same row, there's a PRT, and then OF and M. Do you know what those mean? Well, I think first of all, they're three Even though it looks
separate fields, PRT, OF and M.
like it may say PRTOFM, it's actually three different fields. Q I don't know what they mean. Going back to the line right below that, P &
I, that's principal and interest, right? A Correct.
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Q A Q A Q Okay. Yes. All right. Yes. And I think MIP is that mortgage insurance we HAZ INS is hazard insurance? And then CO TAX is county taxes?
were talking about earlier? A Q A Yes. And LIEN? What does that mean?
If you continue on down the line, it seems to
indicate that there are some other potential insurance policies. Like, you may be -- I know, for instance, you
can actually purchase, strangely enough, a life insurance policy attached to your home mortgage that will pay off your mortgage in the event you die midstream or whatever. So it looks like if you follow -- I mean, if you are following these things, these are identifying different insurances that are attached to the loan. I
can't say what the -- what the lien insurance might be or whether or not that is actually the descriptor, but it kind of follows the trend here that these are describing different types of insurance, but I can't say with certainty. Q A Do you know what BSC stands for? No.
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Q A Q A indicator. Q A Q How about REP RES? No. And the DT and the BM, we already established
you don't know what those mean? A Q Yes. Going to the next line, first original
mortgage is the note amount, 584? A Q Yes. Okay. And then there's no second mortgage.
Principal balance is the note amount, right? Correct. Okay. And INT IND? What does that mean?
I believe that's the -- the interest From my recollection, it indicates whether
or not it's a fixed or an adjustable rate loan. Q A Q Okay. What about the CAP FLAG?
I don't know. Okay. MTGR SSN, that would be (inaudible). Say it again, please?
THE REPORTER: MS. MACK:
Sorry. MTGR SSN would be the
(By Ms. Mack)
mortgagor's SSN? A Q A Correct. Okay. DEF INT BAL?
That looks like deferred interest balance.
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A Q A Okay. From the negative amortization?
I'm not sure if this note calls or
contemplates negative am, but very possibly. Q A Okay. The amount that would have been basically
building up towards the negative amortization, if he had been paying that amount. Q And I think you told me that before you came
to this deposition, you had not read the note or you were not completely familiar with it right off the top of your head or something like that? MS. CREWS: Object to form. I've seen a
I hadn't seen the original note.
copy of -- I've seen a copy of the note, but not the original. Q (By Ms. Mack) Okay. I just want -- I didn't
know if you needed to look at it to see if it was a negative am loan. A I can take a look at it. It's usually spelled
out in the paragraph -Q A Q A Q Yeah. -- pretty -- pretty upfront. Okay. It's not hidden anywhere. Okay.
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A tell you. Q Yeah. If you could, go ahead. I want to try If you would like me to take a look, I can
and nail that down, if we can. A Sure. Paragraph 3, Subsection (e)
contemplates additional -- additions to unpaid principal each month that I -- that my monthly payment is less than the interest that has accrued on my loan, the unpaid interest shall be added to my principal balance as provided in Section 3(b). So it does contemplate what I would consider negative amortization. I'm not sure it actually says
the words "negative am," but that's my understanding of the principle of it. Q Now, would you have reviewed that before you
verified the complaint in this case? A Q A Q Read the note? Uh-huh. Yes. Okay. Going on to the next part of that line, Do you know what that means?
sir, there is a GPM ORG. A Q I don't. All right.
Going down below that next -- the
next line that starts with ASSUM DT, can you tell me if that's where those columns begin and end, if you know?
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Or is it just all one section from ASSUM to NUM? A fields. Q A Q A Q A I think those are separate columns as far as Let's say fields. Okay. ASSUM/DT would be a field. What does it mean? (Witness shakes head.) You don't know? I could only -- I could only speculate. I'm
pretty good at deciphering the truncations they use, but this one looks like an assumption date or something to that effect. Q A Q A Okay. XFER-DEED?
Correct. What does that mean? I don't know for sure. If I was to use my
best deduction, transfer date or transfer deed. Q A Okay. If there was any information put in there,
they would have. Q A What about FHA SEC/NUM? Again, I think that contemplates if this was a
loan that has a separate identifier for either an investor or other interested party. For instance, when
we service Fannie Mae and Freddie Mac, they have their
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own loan numbers they work off of. So we have to keep a
record of how to address them on their loan numbers because we can't send our loan numbers and say, Hey, can you answer a question on this? That's not our loan number. So if that makes sense. They are going to say,
Send us our loan number.
So if we have to keep track of
a secondary loan number, that is a field where we keep it up. Q Okay. Lender -- LIP -- sorry. LIP PAYOFF.
What does that mean? A Q A Q A I don't know. How about FC-TRK-SW? I don't know. How about YE-ACQ-RPT/DATE? I can -- the first or the middle, clearly, is ACQ would be
contemplating a date of some sort.
acquisition date, but the YE and the RPT, I'm not sure exactly what those are. So if there is some acquisition
dates or dates to memorialize acquisition, that would be there. Q A But I'm not sure what YE or RPT is. How about SALE ID? I don't know what -- what that means. I just don't know. Again,
I don't want to speculate. Q A Okay.
How about EXEMPT?
I don't know.
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Q A Q A Q Okay. How about PLGD LN?
I don't know. Do you know what the B means underneath it? I don't. Okay. Could -- do you know if that stands for
pledged loan? A Q I don't. If you'd just go over to the next page real
quick of Exhibit 8. A Q Sure. Do you see how there's like letters down here
at the bottom? A Q Well, that's convenient. Unfortunately, it's not quite as informative
as we would like. A Now that I'm looking at it, you're right.
It's not exactly helpful. Q A Q A Q Do you know what BSC is? BSC, you're talking about -Yeah. BSC? Okay. B equals BSC. I don't. Going back to Page 1 of the Exhibit 8, What does that mean? And then --
there's PMT OPT. A option.
It looks like it's contemplating a payment Some of these loans had some interesting
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features, like pick a payment and -- a lot of that stuff has gone away nowadays, but pick your payment option. Q A Do you know if this was a pick a payment loan? I don't recall off the top of my head whether
it was a pick your payment loan because I have a pretty narrow definition of pick your payment loan. Usually
it's pretty well-spelled out in the origination documents, but I don't -- if I -- you know, I don't want to say for sure yes or no right now. It's not what I
believe is a traditional pick your payment loan. Q Would it be something that you would find in
the promissory note? A Q A Very possible. Do you want to look? Sure. I wouldn't -- in my definition of pick
your payment note, I really wouldn't consider this a pick your payment note -- a pick your payment option. The pick your payment ones I have seen usually give you three choices. This one is really saying this is the minimum you have to pay that we will accept. You're not required to. You can make more.
But that's not really pick your
payment because you are really not given a choice. You've got to make at least this payment. And some of these pick your payment loans, you
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METH. A can make, really, any payment you want for a period of time. adjust. And then, you know, things will eventually And depending on what choice you made, you may But
have a good outcome and you may have a bad outcome.
let's just say you have an outcome at a certain point in time. Q A Q A Okay. This one I wouldn't call a pick your payment. Okay. The more you pay, the better off you will be,
obviously, but I wouldn't categorize it as a pick your payment loan. Q Okay. Let's see here. The next thing is CALC
Does that mean calculation method? It appears to be contemplating, you know, at
least the option of documenting some calculation method. I don't know. There is so much -- there's so much not
there, but I can certainly say that it's -- the field there is to be able to identify some calculation method. What they're calculating, I don't know, but a calculation method is certainly what it's intended to indicate. Q Okay. The next field appears to be equity
line of credit -A Right.
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Q A Q A Q -- ELOC? Right. And the next field looks like bankruptcy? Correct. Okay. And then the next field CH/DT? Change
date maybe? A I -- when we get down to less than three --
you know, three characters, it's really hard to make that jump. Q A Q Okay. So I don't want to speculate. All right. Fair enough.
Going to the next line, you've got payment periods, 12. A Q A Q A Q A Like, 12 months?
Well, basically that it's due once per month. Okay. So 12 payments a year. As opposed to, like, biweekly? Right. Okay. You know, some of these loans are set up so,
you know, there's all different types of payment periods or -- you know, we require two payments a month. all dependent on the note. Q Right. It's
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A But generally, for most loans, you are going
to see 12 monthly periods. Q And next to that field is 1098 DET HIST.
1098, I think, is what, tax related, like IRS? A I believe the 10 -- if I am not completely
incorrect, 1098 is the -- I think it's the interest statement that is sent out to the borrowers every year showing how much interest they paid. Q A Okay. I could be wrong. There's all -- there's I'm pretty sure.
another document that is sent out if the borrowers realize -- well, if they gain, but if -Q A Q A Oh, right. 1099?
You can be taxed on -Right. -- you can 1099 for the value of your home if It doesn't happen
certain -- the planets have to align.
very often, but basically you can incur taxes on basically the remaining unpaid balance of your loan given a certain set of circumstances, but I think that's a different form. form. Q Okay. So then points paid and then -- points Is that -I believe the 1098 is the interest
paid, I would assume means points paid. A Yeah.
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Q A Q A Q A Okay. That's spelled out. RPTG, reporting year? Yes, ma'am. SUPPR MICR STMT? What does that mean?
I believe that refers to any special statement
types that may have to go out. Q A Oh, okay. Like for the hearing -- not hearing impaired.
For sight impaired or language indicators, things like that, may be require -- maybe contemplating the special requirements. Q A Q reason? A Yeah. I think there's a reason and a cause. But they may relate What about the DI NOT RPT YR? I have -- I don't know. Okay. Next to that is REAS. Is that like a
The next two are reason and cause. to that previous. Q A Q A Q The DI NOT?
Yeah, which I don't think I can define. What about the RI HDR SW next to CAUS? I don't know. Okay. I think the next one is pretty
self-explanatory.
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A Q A Uh-huh. How about REO STAT/COMPL DT? I believe that field is contemplating, you
know, if -- if the loan ever enters into REO, what the status is, whether or not it's a completed, sold out of REO for instance. Q YTD/WH. A before. Q A Is that interest on escrow? You know, I think that would be a great guess, But I know that -- that in I'm trying to think if I have seen that Down in the next line below that is IOE credit
but I couldn't say for sure.
some cases -- I don't know if all cases -- the escrow balances run pretty high, depending on the values of the property and the taxes paid. So there may be some
interest that runs, especially if there comes a time we have to hold escrow for a longer than normal period of time. Then you may have to credit some interest there.
But I don't want to -- I don't want to say for sure and be wrong, so I'll say I don't know. Q A Q A What about the SW WH balance? I don't know. Okay. IORE credit year to date?
It would make sense to me that would be
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A interest on restricted escrow -Q A holding. Okay. -- which would be a different type of escrow I'll give you an example. If the house burns
down and the insurance company cuts a check, it goes to restricted escrow as opposed to regular escrow. Q And I think you said you don't know what the
SW WH balance means. CONSTR CD? Is that construction?
You know -- and I can -- if we go back to the I think it was withholding and state
previous ones. withholding. Q A
Oh, okay. So those might be amounts that are held back
for tax purposes -Q A Oh, okay. -- which is why they probably don't want to
have any interest on escrow paid because then it just complicates things even further than that, because you have to pay interest -- or you have to pay taxes on that interest. But that seems to me to be a pretty good
explanation of state and federal withholding on those interest amounts. Q A Okay. What about CONSTR CD?
Usually that will indicate whether or not the
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loan was a construction loan, and it may actually have a certificate -- whether or not the loan was actually issued a certificate for completion. Q A Okay. Because usually they -- they won't -- the They are not boarded
construction loans are separate. until they are completed.
So when they come into the
servicing realm, they become a permanent loan and no longer a construction loan, but they want to memorialize that it was at some point a construction loan. Q that mean? A Well, generally, these loans -- the servicing Okay. No Purge Flag Slash/Year. What does
platforms have limited capability to hold data in the life system for long periods of time. So generally, if
I go into any given loan in our system, the loan may have been on our books for 10 years, but I'm only going to get live system information probably about 12 to 24 months back, depending on the volume of notes and transactions. Transactions are generally 24 months.
Notes could be as little as six months or they could go back. It depends on volume. So they're measured
differently. So at some point, they will purge the system of old data. It doesn't just go away. It's not
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Q deleted. It's just moved off the live system into what So in
we call, you know, archives or cold storage.
order to get access to that, you just need to put in a request, and they can either load it back up into MSP or they can give you something like this, which is, you know, a printout. Q A Okay. So basically we can also flag it so stuff Like, if there is a reason we need
doesn't get purged.
to be able to retain the documents in the live system for a period of time, we can flag it. So for instance,
if I'm -- if I'm loss mitigation and I am working with a borrower, the notes on the system are only going to go back -- like my customer service notes and my memorialization of conversations may only go back, you know, for the first 300 entries. Well, I can put 300
entries in in six weeks, but that doesn't mean I want the stuff six weeks older purged. So I can flag it and
say, I want everything kept on for two years so I can refer back to notes and it's not falling off the system, and I am not repeatedly having to go back and pull stuff out of archives. Make sense? It makes sense. Yeah. So if you want, you
can look at all your flag stuff and --
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A Q A Q A Q A A Q A Q A Q A Right. -- do a search of the flag stuff. Right. And litigation has the same -- the
same thing too, because we want to be able to view stuff and not have to go back and constantly pull archived data. system. Q Thank you. BNKRPT, bankruptcy status -Bankruptcy status. -- right? Okay. Yeah. Then LAST DEF DUE, it looks like that's the I'm glad I got that one right. So we have to flag it so it doesn't fall off the
last payment date because of the 37. Am I right or wrong? 2037? Well, that -September -Since the loan originated August 29th -I would have to look at an amortization table. Okay. It makes sense that would be about the last It's a guess.
payment due because the first payment was -- let's see. September 2012, 30-year --
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BAL? A Q balance? A There are certain -- there are certain Recoverable corporate advanced balances. What is a recoverable corporate advanced A sense. Q Q A Q No, it was -Oh, I'm sorry. The first payment was due September of 2007.
I think that's the first -A Q The change date. -- change date. THE REPORTER: MS. MACK: You're talking over each other.
Sorry. That would make
So that would make sense.
September of 2037 would be the last payment. (By Ms. Mack) Underneath that, REC CORP ADV
expenditures that a servicer has to undertake in order to service a loan properly. Some of them are
recoverable from the borrower and some of them are not. The ones that are recoverable from the borrower are kept track as such; that, you know, in the event of a default, they can be recovered through -- basically they can be recovered through the judgment process. Okay?
Then there's nonrecoverables, which are going to be things that if there is a backer like Freddie Mac
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or Fannie Mae, we can go to them and say, We've serviced this loan for you and we've done what we were supposed to do. We have to spend this much money. We can't get
it back from the borrower, or you're not going to be able to get it back from the borrower in a judgment, so we need you to pay for those things. So there's going to be a recoverable and a nonrecoverable, and that's really -- from the borrower's point of view, is can we recover this from the borrower under the law, yes or no. Q Okay. Now, you had the -- sorry. The next
thing is this third -- the third, 3rd. for third? A Q It does. Okay.
Does that stand
And recoverable corp advanced balance.
Now, is that a third-party recoverable corporate advanced balance? A Right. In some cases, there are expenditures And I can give you a random
taken on by third parties. example.
If we're attending to a property that's been
abandoned -- and, you know, those are attractive to vandals and basically just fall into disrepair in general. So we'll have -- contractors will go out there
and fix things, and basically they are given certain allowables to get things done. And then they will send
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Q A Q A Q A it back to us for billing. So there are certain things recoverable from third parties that we didn't pay directly, but some of them -- you know, LPS Field Services had to pay a field contractor to go mow the lawn or something. We don't
see a lot of that because most of that does come back through LPS billing directly. things get kind of urgent. But sometimes we get --
Like, the code enforcement
has been out there and they're going to tear down the property if we don't do something the next day. Q Where if -- if this was a -- can you tell from
looking at this document if LPS did spend any money that would be recoverable by Chase -MS. CREWS: Object to form. -- on this loan?
(By Ms. Mack)
From this document? Yeah. I mean, I know it says 0.
This document is pretty limited. Okay. And also, I think, given it's a snapshot of
what is a very specific point in time, I think as well. Q A for sure. Q Okay. So I don't think on this document I could tell This wouldn't be where I would look anyhow. Okay.
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A I would be looking in other areas with an MSP.
There's very specific areas that tell me who we paid to do what. So there will be areas where I can see what we
paid attorneys to do what, what we paid LPS to do what. So that's memorialized in different areas. There are also -- you know, we can look at work orders and invoices and things like that that will tell me what's been paid. go-to place. So this wouldn't really be my
This is a -- I mean, I think if this was a
larger snapshot, we could probably tell because I think it contemplates dollars and cents here in the document. But I think it's too narrow of a view. Now, if we took the same snapshot today, I think -- well, here's another. Depending on the status
of the property, if it's occupied, they are not going to go mow their lawn. They may do inspections to determine
occupancy, which they bill -- they bill, I think, 6 or $8 per time they go out. So there would likely be in
the event of a delinquency in 60 days an inspector go out there. So if this document contemplated the entire lifetime of the loan, there would probably be some charges there that would be under third-party, or they may be -- they may be there from LPS. percent sure. I'm not 100
But there would be other places that I
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Q would look anyway because they're where I would go look for that information. Q Who puts the numbers in, like -- okay.
Assuming -- and I know that, you know, that Mr. -- that the Waisome house is occupied. But -- okay. So if
you -- if Chase wanted to see if it was occupied, they would send a -- would they send a message to LPS Field Services to -- I mean -- I'm sure they don't just do it one loan at a time, but, like, I don't know, a geographical area they would say to -- how would they transmit that -MS. CREWS: Objection. -- direction to LPS that, We
(By Ms. Mack)
want you to do this? A We will run a report of all the loans that are
in delinquency at any given point in time. Q A Okay. We will scrub those loans for loans that don't
qualify for occupancy checks, like -- like if it's investor loan and an investor doesn't require it until they're 120 days past due and they are only 60 days past due, that gets scrubbed and it doesn't go out. Q A Okay. So eventually it gets to the point where we They will
have a list of loans that need an inspection.
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forward that to LPS. It's generally uploaded to their
LPS desktop, which is their web-based software that we contact and communicate with them through. get that. And from their end, you know, basically they have these contractors locally. So they will figure out They will They will
who is our contractor local to this loan.
send them the information, We want you to go do a drive-by inspection to determine occupancy. And they
will go do the drive-by inspection to determine occupancy. That contractor will then report back to
LPS, and LPS will report back to us and send out whatever billing is necessary. Q Do they -- do they report back -- do they call
you up or use the MSP system? A They will report back through the LPS D system
with results. Q A desktop. Q A Okay. It's our communication software with them. So they will transmit that back to us. So we The what? LPS D. LPS is the company, and LPS D is the
can go on LPS D and view it, but it's also loaded into MSP as well. So I go into -- I have to remember the
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A property. PIR1 property inspection results. And I can
view the property inspection results. vacant or occupied.
It will tell me
It will tell me how much they
billed for it and what day they completed the inspection. Q A Q Is PIR1 a screen name? That's a screen name within MSP. Okay. Now, you had been -- when we were --
when I was talking to you about the advances, you said there was another screen you could go into that would be more -- it would be easier to determine to answer my question. Is that the SER1 screen? SER1 screen is really kind of a general loan It's where you can look at loan balance,
status screen.
what the escrow condition is, what the -- when the loan is due for, how much is due currently to either reinstate or -- if it's a performing loan, it will say what the next due date and show everything. SER1 is really kind of a starting point snapshot of what is going on. It's not going to show
the history of, let's say, transactions from inspections. PIR1. In order to see inspections, I would go to
If I was looking for other more detailed
expenditures, I could go to -- it's kind of -- it's
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escaping me. There are other screens which will show
advances made for, like, attorney's fees if there's -if one is in litigation, what we paid in attorney's fees. There is going to be screens that show other contractors that we've retained, like BPO or appraisal services. Things like grass cuts or if we had to reroof
a house because the house was destroyed in a hurricane or something. So those things are memorialized in other SER1 is not -- it's not
screens other than SER1.
formatted in such a way, nor was it ever designed to contain transactional entries like that. Q on MSP? A Q A Q A Q Okay. How many screens do you have access to
And what are they called? All of them? Okay. If -And I couldn't name all of them.
I have access to everything in MSP. You do have access -Yeah. -- to everything? If you wanted to review all the screens in the
Waisome loan or regarding the Waisome loan on MSP, do you know what they are called as far as like SER1, for example, and what they represent? A I know -- well, I know the screens that I need
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to use -Q A Okay. -- because I have to use them as part of doing There are screens that exist that I just
my job duties.
don't ever use because I never have any need to. So to answer the question -- well, I don't know what all the screens are called because there are way more screens than I ever use on a day-to-day basis. And I -- I -- I hope that answers the question. I have
access to it all, anything I need in MSP, but I don't need access -- like, I don't need access to certain things. For -- I'm trying to think of an instance of
something in MSP that I really just don't have any use for. You can look up -- rarely do I ever use, like, hazard insurance information like HAZ1. I can look up
who the current hazard carrier is and what they are paying and when their last -- when their insurance expires, but I rarely use it because I don't have a need to have access to it. Q A Okay. But, like, you know, the screens that I would
use every -- you know, pretty much every time I access a loan investor screens, I need to know -Q What are those calls?
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A Q then INV1? A Q A It's a subscreen of MAS1. Okay. That shows the investor information. I can MAS1, INV1. INV? I think you told me what MAS1 was. And
look at -- you know, if there's -- if the loan has been bought and sold, I can look at acquisition dates. look at -Q What about -- have you ever seen a screen I can
called P190? A Yeah. I think it's a -- it's a
transactional -- I'm not sure if it's relegated to payments only, but it's a transactional screen that shows transactions. I think it's just the -- if I'm not
mistaken, I think it's just payments, but I could be off. There's a couple of -- there's several different ways you can make MSP produce to you a transaction history, and you can -- you can have that be all transactions or you can limit it to just certain types of transactions. Q Okay. So any other screen that you can
remember off the top of your head that you would look at for purposes of the Waisome loan?
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for. A It would be depending on what I was looking The ones that I definitely accessed, I definitely
accessed SER1 and I definitely accessed the MAS1 and INV1 screen. I accessed some of the customer service
notes just to see how far back they went, loss mitigation notes, the loss mitigation history. Q A Anything else? I'm trying to think. I think I went into PL5
online letter writer that tells me what correspondence has gone out to the borrower in the course of the loan lifetime. Q A That's all I can think of right now. Okay. I mean, there are a lot of other screens and
things that I just don't -- like, I don't really get into a lot of escrow analysis, but there are escrow analysis on MSP. Q Okay. Going back on our sheet, I think that
the next entry -- the next field is foreclose, FORECL WKST? A Q A Q A Q Uh-huh. Is that the end of that field? It's actually a combined field, I think. With the next -Right. With the field next to it?
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A It stands for closure workstation code
reinstatement date. Q A Okay. So they're related. Foreclosure workstation
code would tell you the current status of the foreclosure workstation and describe that. Depending on
the status of the loan, different workstations with MSP would be activated. If the loan goes into foreclosure, So it opens
the foreclosure workstation is activated.
up different tracking mechanisms within MSP to determine where the loan is in the foreclosure process. And the same thing when the loan starts into loss mitigation. The loss mitigation workstation will
be activated, and it will track the loan through loss mitigation. So at some point, the loan will come out of loss mitigation or out of foreclosure and go into someone else's basically area. So whether it be REO
after the foreclosure sale or loss mitigation fails or succeeds, there is a definite, you know, lifetime to these workstations. So this thing is contemplating the foreclosure workstation code, whether it's active or not active or what have you. And the reinstatement date would
contemplate the date the loan reinstated to bring it out
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of the foreclosure workstation. Q Now, going next to that is INIT ESC, and it's Do you know what that means?
got a 9 underneath it. A Q A I don't. Okay.
Do you know what the INIT ESC means?
You know, I'm not sure it's actually the same
field either. Q A Okay. I don't know what they mean, but I don't know
they are the same field. Q Okay. What about STMT CODE? Do you know what
that means? A I think it's also referring to some state -I'm not going -- I'm
some mortgager statement coding.
not sure if it's for language or special needs or what it is, but it looks like it's contemplating some type of -- or some mortgages opt out of the statements altogether and would rather get an e-mail. Q A Gotcha. So that might be opt out for statements. I
don't know, but it looks like it's contemplating that. Q 9/8/07 it. A Okay. Now, the next thing is DATE. It's got
What does that mean? I think -- well, from what I am looking at
here, I think that's the -- that's the statement code
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A Q date. I think that relates back to whatever statement
code is in place, if any, what date it was. Q A Q A LOSS MIT STATUS/COMPL DATE. Right. And that means loss -Loss mitigation status and, you know, So whatever date that workstation was
completion date. closed out. Q Okay.
The next, like, line of -- I'm going to The
ask you about the ones that are not really clear.
PROC, does the date that is underneath the PROC -- is that one field? A Q I'm sorry. That's okay. Do you see how it says due and then PROC? Yeah. Okay. So underneath due is date, and then Would you repeat the question?
underneath PROC is also date. A Q PROC date? A Q A Right. Okay. Process date or -- you might hear it called Right. Are those each fields? Like, is it due date
PROC, but it's the (inaudible).
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A A THE REPORTER: to me. THE WITNESS: I'm sorry. Some people PROC date I can't hear you with your back
It's due date and process date.
will say PROC date, but it's kind of jargon. means process date. Q A (By Ms. Mack)
What about the TP next to it?
It's actually a -- TP and TR are actually two The three digits put together
parts of the same thing.
when you see TP TR 142, 170 -THE REPORTER: you going that fast. THE WITNESS: I'm sorry. Slow down. I really cannot get
The TP and TR fields are really two parts of When we read these internally, I would Those are what
the same field.
look and see transaction 142, 170, 171. we refer to as transaction codes.
So they actually
identify the type of transaction within the system. And then there is another digit. I think the
S2 number is like a sequence number or something like that. It's not really something that we use a lot. But
the TP and TR are actually what we refer to together as transaction codes. And I wouldn't -- honestly, I
couldn't tell you what the TP and TR stand for separately. But I can tell you that internally, they
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are used together to identify a transaction. So 171,
you know, 351, 173, those indicate a transaction. Q (By Ms. Mack) So if you go back to due date
and next to it PROC date, are they related to the transaction code? A The process date is related to the transaction
code because the process date is actually the date that the transaction is processed. The due date is actually
the date as of the day of the process code -- the process date is the date that the loan is due for at that point in time. So the reason they're handled separately is because you can have a payment come in two months after it's due. It's going to have a process date of the date
it's received and processed, but it's going to apply to a due date in the past. So you will see that those So you will
dates, depending on the line, will differ.
have a due date one day and a process date that is a different date. They are not always the same date. But
the due date always refers to the date that the loan is due for at that particular time. Q Okay. Now, is there a master list of
transaction codes? A codes. There actually is a master list of transaction
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Q Codes? A You know, I think it's just called -- we call Okay. Is it called Master List of Transaction
it a Trans Code List or -Q A Q Okay. Do you --
-- Transaction Code List. -- know what these transaction codes mean off
the top of your head? A The ones are usually -- if it starts with a 1,
it's usually some type of transaction that is going to affect the balance of the loan, a balance related. it may be a payment. payments. Like, I think, like, 173s are So
And then there's -- it gets really There's like -- there's probably 20 There is like
complicated.
different codes that relate to payments.
the payment that comes in that is coded as a regular payment where the loan is current and it's applied to the loan. That may be like a 173. I haven't done this And then
in a long time as far as coding payments.
there might be a 172 which might be a loan payment that is coming in while the loan is in default or under loss mitigation. So there's a bunch of different codes that are related to just payments. And then a bunch of other
codes that are not payment related, they might be escrow
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codes. But every transaction has a -- basically has,
like, a first digit code which, again, I think 1 is like -- it's either payment related or related to the balance. And then you get some that start with 3s or
other numbers that may be unrelated to payments but related to escrow or some other. code list in a long time. Q A Okay. Well -I haven't seen a trans
And here's another -- here's another little
lump is that, again, we are dealing with -- the snapshot in time here is 2007. So today's trans codes may be
completely changed and different, so we may be in a different ball field altogether. Q A Q Okay. But those are transaction codes. Thank you. I appreciate that explanation.
With regard to -- if you go all the way to the right side of the piece of paper under -- or I should say -- sorry. DCT. A Q A Yes. Is that a field? Yeah. One entire field? Next to Other Amounts, there is a CFD
The way -- the way -- and this is why I
don't like this particular format of these transaction histories is because at a certain point, you have things
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A Q A reading kind of left to right at the top of the page. And now you can see more like a column effect. So this
header, the CFD DCT is one field, and so like basically it accounts for everything in the column right below it. And it stays true throughout basically the second two-thirds of this document. Q Okay. What does the -- do you see underneath
Other Amounts there are like an AB, AC, AE and AF? A Q Yes. Okay. Now, if you go down to the second page, Are those supposed
there's AE, AB, AC and AF as well. to tell me what those letters mean? A Let me take a look.
Are you talking about the little legend here? Yeah. On Page 2 of 8. Oh, I see. It
That's what I was looking for.
looks like the legend does account for -- I'm looking for AB. page. Okay. Yeah, AB, AC, AE and AF on the first
So it looks -- it appears it does translate to
the definitions provided on the second page. Q Okay. Now, the definitions provided on the
second page, AB says it equals deferred interest paid. Is that paid by the borrower? From the -- well, just looking at the first
transaction in the -- that has that breakdown, it looks
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A Q A Q A like a 171 trans code. So it's some type of -- it
appears some type of payment is made, because it contemplates the amount received. I don't know that it
says received from the borrower, so I think that's really kind of the question is whether or not this is paid by the borrower. Is that your question? Yeah. I don't know. You can't tell? No. If I knew off the top of my head what 171
was, it would probably tell me if it was a borrower made payment or whether or not the money was being transferred from a different pool of money within the loan. But 171 is certainly going to affect the balance,
but I don't know if it's actually received from the borrower. Q Okay. AC appears to stand for LIFE DEF INT.
Does that mean deferred interest? It looks like just a further truncated
deferred interest category, but I don't know what the life stands for. Q A Okay. But it looks like it's referring to some type
of deferred interest, but I don't know what the life is.
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see. A Q A Q A Q And AE, which is deferred INT LTD PD, is that I don't know. And this does -- I think
deferred interest loan to date? A It very well may be.
this is showing the very first payment on the loan, if I am not incorrect. So it would kind of make sense that
those numbers would be the same since they're all the first payment. Q Okay. Yeah. If I was a betting person,
that's what I would have thought. Okay. AF, following the same logic, is Or did I
probably life deferred interest loan to date. miss something? A Q Yeah, that would make sense. Okay. All right.
Let's go to Page 2.
If you
could look over at where it says Status Amount at the top of the page. Do you see that? Yes. What does that MPL ID AE01 mean? I don't know. Do you know what status amount means? I'm going to read the rest of the headers to Off the top of my head, I don't know. I think
I've done the research on that before, and I'm sure I can provide it in pretty short order. I just don't
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Q A recall what it is off the top of my head. Q Okay. The -- it's been -- I've been informed
that there are specific manuals for MSP by bank or servicer, depending on -- for example, Chase. Does it
have its own MSP manual to help decipher maybe not this type of document, but if -- I know -- we have one like that that y'all produced from Chase, so it looks like this except it says Chase at the top. A Q Right. Do you have a -- is there a manual that you
either have access to or were trained on or using, trained with, that would tell you how to use MSP and understand the screens -MS. CREWS: Object to form. -- and the codes? And, again,
(By Ms. Mack)
I've never seen a Chase manual.
this kind of -- and the reason is I've known how to use MSP from previous jobs. So the use of MSP really The changes are really
doesn't change all that much.
more specific to the codes and things that we have mentioned and different -- the very small details that each individual servicer uses. So I've never actually
had to be trained by Chase on MSP because I've known how to use it, so I've never seen a manual. I think that there are certain online
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resources I can go to to get, like, the trans codes, so a current list of trans codes and definitions or, like, an investor code list that is current. So there are
certain online resources, but I don't know of the existence of a manual because I've never been through MSP training at Chase or WAMU because the system knowledge I had was in place prior to working for either company. Q Okay. So I think you already answered this, Have you ever -- even
but I have to ask you anyway.
going before WAMU to when you first started using MSP, did you ever use a manual called Introduction to Systems and Resources? A Q No. Okay. What about Getting Started in MSP?
Have you ever used it or even seen it? A Q A Not that I recall, no. Okay. How about --
And I started using MSP in excess of eight
years ago -Q A Okay. -- at some point. So it's been a while since And a lot of my training, You
I was initially training.
just like anywhere else, is kind of on the job. don't necessarily work out of a manual.
You work with
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that. Q A Q A Q A How about Reviewing -No. Sorry. No. I didn't mean to cut you off. I was trying to think of anything else that I somebody who knows more than you and pick up from there. A certain amount of knowledge is just gained over time through experience and using different screens. And you can go through a whole career and
never have accessed the screens that I would use because your job function just never required you to. So there
are very few, you know, people who just have complete knowledge of MSP. From a working perspective, you're
not going to know everything about it unless you work in every single part of our business. Q Okay. Researching Transaction History. Have
you ever seen the manual or -A Q Researching -- no. Using the Common MSP Screens? Have you ever
heard of that one or seen it or used it? A Not like a training schedule or anything like
may have seen reference to. Q How about Reviewing Supplemental Loan Data?
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hand. A Q A Q Script? A Amount Due Affidavit Director Script? I'm No. It's a manual, apparently, Chase uses. Okay. How about Amount Due Affidavit Director
familiar with the director script and the purpose of it, and I -- I don't actually run the script myself. I have
access to basically what is the end result product of that script, but I -Q A What is the purpose of the script? The purpose of the script is to get basically
the system to generate the figures that are going into an affidavit of a debts due and owing. A debts due and
owing are basically a sworn document that is going to say, This is what is due at this time so that we have a systematic record so it memorializes the request and puts it in the record. So the person who is going back
and reviewing the loan records can compare what is going into that sworn document. They will have the sworn document in their They will review the director script product,
which is where the numbers came from that are in this document now, and then compare that with what is on the live system in MSP. So it's basically a way of just
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making sure that what we are producing to the court is 100 percent accurate beyond any shadow of a doubt. Q Now, with regard to other sworn documents such
as -- you know, in Florida, we have verified complaints now. Do you have a similar script or program for
preparing a verified complaint? A No. No. The script in MSP is simply just
running numbers out of the servicing platform based upon every transaction and the history. A verified complaint
is a completely different animal altogether. Q A Okay. It includes things that are beyond the scope.
The MSP is good, but it's -Q It's not that good? Okay. I just have a
couple of more questions, and then we can take a short break. Okay. Do you know, Mr. Nardi -- let me ask a This is also a document It looks like a BPO
quick question here about this. that was produced in discovery.
that would have been ordered by Chase. MS. CREWS: right? MS. MACK: No, it's just a piece. I just want This isn't the full document,
to -- I'm going to ask a real quick question about it, and we will probably come back to it.
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Q 9. (Defendant's Exhibit 9 was marked.) Q (By Ms. Mack) My question has to do with this Do you know That will be 9. Just the first sheet will be
number up here in the top right corner. what that is? A Q A Q The WAM120229-02499-2? Yes.
I do not know what that number is. Okay. MS. MACK: If we can just take a five-minute
break. (A recess was taken.) Q (By Ms. Mack) Mr. Nardi, this is -- you can
probably just move that over to the side, and then we'll go back to Number 9. MS. MACK: This will be Number 10.
(Defendant's Exhibit 10 was marked.) Q (By Ms. Mack) MS. MACK: to you first. MS. CREWS: This is -- do you recognize -I should have handed it
I'm sorry.
It's something y'all produced. Okay. 3270 Explorer, a screenshot.
(By Ms. Mack)
Is that off of the MSP system? A Yes.
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A Q And we'll label these two pages Exhibit 10. Is that a screen that you use in your job? These are actually -- this is two different
screens entirely. Q A Oh, okay. This isn't the same screen at all. One is
a -- one is actually just a portion of the -- a larger series of screens. here. So let's take the first one right That is actually a
It says PAY4 at the top left.
payoff calculation screen.
You basically start at -- if
I was going to calculate a payoff or get the system to generate me a payoff to where I could send it to the borrower, if they ask for a payoff and want to know how much it costs to pay off their loan, if I am customer service, I go to PAY1, which basically says you are going to request a payoff. proceed? Are you sure you want to
Then I say -- I press, like F1 to proceed.
And it says, What date do you want this to go through? So I put in my as-of date, and I hit F1. And the next screen takes me to -- actually, it's usually pretty long because I don't know if everything is here. me see. This one is probably pretty -- let
Depending on the number of expenditures, that I've seen some take three.
may be one or two pages.
But basically you get a breakdown of, like, what the
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principal balance is, escrow advances. be good through a certain date. pages. And then, you know, on the screen it will say, Do you want to fax this? Mail this? Press F1 to mail Everything would
Maybe a couple of
it, and it will go out to the primary mailing address and so forth. So this is actually just setup screens
that are used to generate payoff demands. Q A Okay. So the next page is actually an escrow So that's ANA1.
analysis page. Q A Okay.
And I have used most of these.
I don't use
them a lot.
Generally, I'm dealing with -- when I'm
going to deal with litigated loans, I want to deal with the director script provided payout information for the loan, which will cover, like, any attorney's fees and stuff. I don't -- the PAY4, at least in this instance,
I'm not sure if it would have included the attorney's fees or other type of fees that would have accumulated. So I would use the actual director script, which is the affidavit of amounts due and owing script, because that would give me everything in a nice little breakdown format. Q Okay.
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Q to time. A This one, not so much. So I do use this one, I'm familiar with it.
but not as much as the other one.
The escrow analysis screen, I do use from time It's not something I use every day. But
these -- this is actually two separate screens. MS. MACK: Maybe we can call the PAY4 screen
10 and maybe the escrow analysis 10A, please. (Defendant's Exhibit 10A was marked.) Q (By Ms. Mack) If you could look through that.
It's something -- this is also -- these are all documents produced from -- from your attorney, so -MS. CREWS: MS. MACK: I produced this? Yeah. If you could just take a look
(By Ms. Mack)
at it and tell me if that is all one document. A Well, the first indication is the first page
is dated 1 of 4 and the last page is dated 4 of 4, so it appears to be the same document. MS. MACK: Let's call that 11.
(Defendant's Exhibit 11 was marked.) Q (By Ms. Mack) What is that, Mr. Nardi,
Exhibit 11? A Well, it's entitled Income Report Card, and
it's representative of what I tend to see in loss mitigation efforts, trying to determine if the borrower
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A is going to be able to keep their house through some type of loss mitigation. So they -- generally the
information that is used to populate these types of reports and is furnished by the borrower, we will ask them either on the phone or send in documentation of their income, and then we will be able to place them to these types of reports, which will give us an indication of, you know, combined with other considerations whether or not the borrower is going to be able to retain and what type of modification I might be able to get them. Q What other considerations are -- what other
things are considered besides the income report card if a borrower is seeking some sort of forbearance or modification? MS. CREWS: Object to form. As an example, whether or
A number of things.
not the home is occupied by the borrower, whether it's their residence or not. important factor. Q A That's usually a pretty
Their -- their other obligations. Like kids?
(By Ms. Mack)
Well, you know, children -- cost of living for
them, you know, what their output is for maybe their child care or private school, whatever those things are. They also might have healthcare considerations to take into account. Basically all their -- really, the whole
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financial situation is taken into account. know, specifically things like that. But, you
How much they are How much they
paying in rent -- I shouldn't say rent.
are paying for child care, how much they are paying for the utilities. You know, if they have medical bills So it's all taken into account.
that have to be paid. Q
I'm sorry to go back to 10A real quick, but I
just realized I meant to ask you about Chase Home Finance, LLC, which is indicated. it's on actually 10 and 10A. Why is it Chase Home Finance and not JPMorgan Chase Bank, NA? A Well, at the time of this document, which And I believe that
appears to be April of 2010, Chase Home Finance, LLC was the mortgage servicing division of JPMorgan Chase Bank, NA. Q A Okay. They have since been reabsorbed into the bank
proper, which I think was last year, maybe May, midyear or so. arm. Q So Chase Home Finance existed as the servicing They no longer exist today. Okay. Thank you. And let
Thank you for explaining Number 11. me ask you about the next set of documents. A I'm ready.
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Q Oh, okay. MS. MACK: Do you recognize -We'll mark that as Exhibit 12.
(Defendant's Exhibit 12 was marked.) Q (By Ms. Mack) With regard to Exhibit 12,
Mr. Nardi, have you ever seen that document before? A I believe I have seen it before, yes. And
I've seen similar documents typically prepared in anticipation of or in the process of some type of loss mitigation review. Q Okay. And could you just tell me what -- does
the document have a name that y'all call it in Chase? A Well, it's entitled Reconciled Market Value, You
so this would probably just fall into valuations. know, some type of -- this isn't a full BPO.
This may
be taking information from a larger document that is provided by a broker, but it doesn't include photos and other things you would see in an appraisal or BPO. Q The full-on BPO and appraisal, those are done
by third-party contractors? A Q Generally, yes. Okay. So the document we've labeled as 12,
was that created by Chase? A It says this is for Chase internal business,
so -- I'm looking at the document and, I mean, it's consistent with documents that I know to be produced by
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A Chase, yes. Q Okay. And I -- that was -- does it appear to
be, is what I meant to ask you. The indication with regard to the fair market value, is yours dated September 1, 2011, by any chance? A Q That says prepared on 18 March 2011. Okay. Would there have been a series of those
Chase -- Exhibit 12s prepared, like, at various dates? MS. CREWS: Object to form. Potentially, yes. One might
There may be -- well, yes.
There may be a couple of factors that apply.
be depending on the amounts of the loan and the numbers at play, there may be a requirement for multiple BPOs to be done. So if it's over 500,000, they may want at If it's over a million,
least two independent reviews. they may want three.
So that type of thing.
Then secondly, depending on the length of time that the review goes on, the loss mitigation review, they may require updated values because the market is pretty volatile. So if they do -- if they start loss
mitigation in January of a given year and it gets to, you know, March or April or June, they may want some new values because in six months, the market may have drastically changed for the better or for the worse. Q (By Ms. Mack) Okay. The market value in
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A Q A March of 2011, the fair market value, is that indicated? A Yes. It does say -- it reflects an as is and
as repaired, 315,000. Q A Q 315? 315. Okay. If you can go down to the next box
under current information. A Q number. A Q Correct. Okay. Now, it says next to that, Channel, and Yes. The loan identifier appears to be the loan
it's FFIEC. Do you know what FFIEC stands for? I don't. Do you know what channel means? When I see the word "channel" as it refers in
regards to these loans, I -- in my mind, it typically triggers on the lending channel that it came through, you know, where this loan came through as far as where it came from. For instance, if it was a loan that was brokered by a third party authorized to do business for Chase that purchased loans, or whether it was done at the branch level, or if it was a phone call they made to
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the 1-800 number because they don't have branches in their area. So that's what comes to mind when I hear channel, but I can't say from this document, because I don't prepare them, what channel is actually referring to. Q Okay. What about Servicing ID? It's blank on
mine, but what does that usually stand for? A I made reference to it earlier. If there is
another party interest, let's say, for instance, Fannie Mae or Freddie Mac, they will have their own assigned loan number. So, again, that's my -- that's my
best -- I don't want to say guess, but, really, I don't know exactly what that Servicing ID is for. It
certainly could be for, you know, the underlying investor or owners and individual identifier for that loan. Q Okay. Next to Servicing ID is System. Do you know what -And it
has a P next to it. A Q A Q A Q
Mine has an S next to it. Oh, does it? Yeah. Okay. Well --
But I wouldn't know what it was for anyway. You don't know. Okay.
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CMS Doc ID is underneath Servicing ID. know what that means? A Q I don't. Okay. And next to that is an investor number, Do you
and it's got A01 next to it. A Q A Right. Do you know what that stands for? I don't know what the A01 stands for, no. I
don't have a current list or a list at the time of this transaction of investors. Q A Q Okay. But yours -- does yours say A01?
It does. Okay. Well, if the investor -- if this was an
asset loan on March of 2011, would it say investor number and Chase's investor number? A Q If it was -- can you repeat the question? Sure. The date on your -- on your document is
March of 2011? A Q Right. Okay. So in March of 2011, it's the
plaintiff's position that -- at least according to their pleadings, that they owned the loan -- or, sorry, the promissory note, and they were the investor in the loan. So if in March of 2011 Chase was the investor in the loan and owned the note, would the investor
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A Q A appraisal. A Q for? A Q I don't. Okay. Now, the next -- there's -- underneath number be representative of Chase? A I wouldn't see any reason why it wouldn't be.
I don't know why -- for instance, I couldn't tell you -there would be no reason that, for instance, Fannie Mae or Freddie Mac number would be there. Q Right. But you don't know what A01 stands
the box that's called Intended Use, there are origination comments. Do you see those? Yes. Okay. Yes. Now, the origination comments appear to
be a after-the-fact review of the appraisal done at origination. Would you agree with that? MS. CREWS: Object to form.
Let me read the comments. (By Ms. Mack) Sure. Yeah.
I mean, it does reference the original It does reference the date. It does
contemplate the fact that there are -- they used it within the acceptable practices and guidelines and that it's consistent with what, apparently, looking -- a
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A look-back review was true -- you know, true to be the case at the time. So there was no value So that's what the
misrepresentations suspected. paragraph states. Q Okay.
Do you -- okay.
So do you know if that
was something that was -- if that was an issue for this particular property? Or do you know if that was, you
know -- being an issue, I mean, when they're -- they're looking -- I think you call it look-back at the origination appraisal. Was there something that would have caused this review? Or was that something that is done in --
with loans that are in default that have these kinds of reviews done? MS. CREWS: Object to form.
Well, part of the process of going through
these loans -- and there's a constant kind of quality assurance going on and quality reviews. So when they
are going back and they are doing things like loss mitigation, it's a prime opportunity to discover all types of things, you know, from -- anything from, you know, the borrower didn't give us their actual income information, or the appraisal was inflated or, you know, any number of things that may have skewed the decision to make the loan.
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So this is just a normal course of action. This is a normal process for us to go back and look at because, again, this document is created in the hopes we can modify the loan for the borrower. So if we can find
out that someone wasn't giving us the right information and the house wasn't actually worth 800 grand in 2007, that might give us more ability to be flexible in our modification terms. Because if we find it was actually
worth more than 800,000 or significantly less, it would certainly impact our ability in really getting the loan modified to a point that was reasonable. Q (By Ms. Mack) Okay. Do you know if -- that
Mr. -- Mr. and Mrs. Waisome's loan was ever evaluated for a modification? A I think not only were they mod -- or
evaluated, they were offered a trial modification and decided not to engage in that. Q Okay. And so the trial modification, do you
recall what program it would have been under? A Q No, I don't. Okay. All right. If you could just turn to And does yours have a box
the next page of Exhibit 12.
called Original Appraisal Integrity section? A Q No. Okay.
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Q you. A It's not on the next page and not on the Is it at the top of one
following page that I can see. of those boxes like there? Q A Q Yeah.
You don't have a box like that?
There is nothing like that. Okay. All right. I'm going to switch with
I just want to make sure I don't have any more
questions. MS. MACK: I'm sorry, Rachel. I did not mean
to leave you out. (Defendant's Exhibit 13 was marked.) A Q I'm ready. (By Ms. Mack) Okay. Mr. Nardi, is that
another one of those like Exhibit 12? A Yes. MS. CREWS: Object to form. Whatever Exhibit 12 -- I don't
(By Ms. Mack)
know what you called it. A It's titled Reconciled Market Value, and it
appears to be the same type of document. Q A Q And the reason why -- I'm sorry. Go ahead. The reason I'm having a problem with what the
title of the document is is because that's just the top box.
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A Is that what you guys call it? I mean, this would just fall under
valuation -- valuation reports or summaries of valuations provided to us by third-party appraisals or BPO brokers. Q Okay. That valuation report we marked as
Exhibit 13, it appears to be it's dated September of 2011, correct? A Q correct? A Q That is correct. Okay. And it looks like the price -- or the It is. Okay. So that's after Exhibit 12 in time,
appraised value, I should say, of the property has gone up a little bit. A It is currently -- according to this
particular broker or appraisal, it is 330. Q Okay. Now, is there something else that you
would look at, perhaps a BPO, to determine why there was the change in the value in the six-month, more or less, period between the two valuations? A Is there something that -- well, first I would
take into consideration that we're dealing with a $20,000 difference in opinion. upon individual opinions. These reports are based The
So opinion is just that.
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salt. market is going to decide what the value of the property actually is. These are individual opinions. So I
wouldn't necessarily have any reason to go back and question a difference of $20,000 over six months, you know, positive or negative because I have to have an understanding that these are opinions of professionals in their field. Q A Okay. So I have to take everything with a grain of I don't have any firsthand knowledge of the
market that this guy is going into to analyze. MS. MACK: Just off the record real quick.
(Discussion off the record.) Q (By Ms. Mack) Just a couple of more questions
on that document.
The next page, it looks like the
appraisal -- origination appraisal, there were no -- and I'm paraphrasing because I don't have it in front of me. But it appears that there were, again, no discrepancies in the original appraisal that were noted by this valuation expert for Exhibit 13. A Q That's correct. Okay. Now, that -- this Exhibit 13 has that
box about the interior appraisal on Page 2? A Yes.
(Conclusion of Volume 1 of 2.)
800.939.0093

Nardi Depo Vol 1 - WaMu To JP Assignments

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Lawrence Nardi - 5/9/2012

First Choice Reporting & Video Services Worldwide Scheduling

Lawrence Nardi - 5/9/2012

Mr. Sherome Waisome Mr. Nye Lavalle

Lawrence Nardi - 5/9/2012

TESTIMONY OF LAWRENCE NARDI, VOLUME 1 of 2 Direct Examination by Ms. Mack 5

Lawrence Nardi - 5/9/2012

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Lawrence Nardi - 5/9/2012

represent the Waisomes. deposition taken before? A Q I have. Okay.

If you don't understand my questions,

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Lawrence Nardi - 5/9/2012

I work as the operations unit manager and a

contested and litigated matters. records.

I review customer service logs.

Academy Central Virginia.

studies in business management, but not to the degree

First Choice Reporting & Video Services Worldwide Scheduling

Lawrence Nardi - 5/9/2012

as part of my -- I was a naval reservist.

working on a ship as part of my time at the academy.

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Lawrence Nardi - 5/9/2012

From there, I went into mortgage originations.

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Lawrence Nardi - 5/9/2012

PHH Mortgage, which is now -- I think they're

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Lawrence Nardi - 5/9/2012

Jacksonville? A I am not. I lived there for basically since I

a supervisor or were you supervised? A I was not a supervisor. I had a -- I had

voluntarily? A Q A I left voluntarily. Okay. What did you do next?

Well, we -- that -- PHH Mortgage was leasing

space from Merrill Lynch, who has a large campus in

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Lawrence Nardi - 5/9/2012

take offense, but I have to ask these questions.

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Kind of their major employee plans.

mortgages on the servicing side.

I worked in their property preservation area,

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Lawrence Nardi - 5/9/2012

In fact, the reason I remember this is that I

already had my job lined up at WAMU. no down time. 2007. Q

But I think it was basically the end of

Did you know that they were going to be

of rolled the dice on whether or not I would have a job

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Lawrence Nardi - 5/9/2012

pretty small -- I shouldn't say small.

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I think it was like senior -- I've got to think.

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I was only doing -- really, just focusing on

That was -- it was me, and I had one direct report

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Lawrence Nardi - 5/9/2012