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IND EX PAGETESTIMONY OF ER[CA A. JOHNSON-SECKDirect Examination by Mr. Ice 4CERTlFICATE OF OATj1 215CERTIFICATE OF REPORTER 2 16ERRATA SHEET 217ERRATA CERTIF[CATE 2 18READAND SIGN NOTIFICATION 219

IN n lECIRCUIT COURTOFlHEFIFTEENTH JUDICIALORCUTT INANDFOR PALM BEA01 COUNTY, FLORIDACASENO.SO 2008 CA037322XXXX MBAWINDYMAC FEDERAL BANK, FSB,Plaintiff,vs.ISRAEL A. MACHADO; NEENAM. MACHADO;MolY MolD ALLUNKNOWN PARTIESClA IMINGBY,lHROUGi , UNDER,MolD AGAINSTn lEHEREINNAMEDINDIVIDUAL OE FENDANT(S)WHOARENOTKNOWN TOBEDEADORALIVE, WHETHERSAIDUNKNOWN PARTIESMAYCLAIMANINTERESTI>S

SPOUSES, HBRS, DEVISEES, GRANTEES, OROn lERQ.AlMANTS; TENANT' 1, TENANT #2 , TENANT ' 3 ,andTENANT' 4, too namesbeing fictitiousto account for parties in possession,Defendants.

n lEDEPosmQNOFERICAA. JOHNSONSECXVOLUME IPages 1 - 8"lJuly9, 20091655 PalmBeachLakesBoulevardwest Palm Beach, Florida12:S'I p.m. 2:59 p.m.

REPORTEDBY:DeborahH. Rodgers, CSRCorser & Associates Reporting & Transcription1655 PalmBeachLakesBoulevard, SUite SOOWest Palm Beach, Aorida 33401Phone: 561.682.0905Page 2

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E X H [ B [ T SNUMB ERDefendants' Exhibits A - QDefendants' Exhibit RDefendants' Exhibit SDefendants' Exhibit TDefendants' Exhibit UDefendants' Exhibit VDefendants' ExhibitWDefendants' Exhibit XDefendants' Exhibit YDefendants' Exhibit Z

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APPEARANCES:On behalf of the Plaintiff:JOSEPH MANCILLA, JR , ESQ .Florida De fault Law Group, P.L.9 119 Corporate Lake DriveSuite 300Tampa , Florida 33634On behalf of the Defendan ts:THOMAS E. ICE , ESQ.DUSTIN A. ZACKS, ESQ.Icc legal , PA1975 Sansburys Way, Su ite 104West Palm Beach, Flor ida 33411

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THEREUPON.(Thereupon, Defendants' Exhibits No. A

through Qweremarked for identification.)THEREUPON.ER[CA A. JOHNSON-SECK.

was called as a witness herein, and after being firstduly sworn, testified as follows:THE WITNESS: Yes.DIRECT EXAMINATION

BY MR. ICE:Q. Could you state your full name for therecord, please.

A. Erica Antoinette Johnson-Seck.Q. And what is yourbusiness address?A. 7700 West Parmer Lane, PA -RM-ER, Building

D, Austin, Texas. 78729.Q. And who is your employer?A. OneWest Bank.Q. How long haveyou been employed by OneWest

Bank?A. Since March [9th, 2009.Q. Prior to that you were employed by IndyMac

Federal Bank, FSB?A. Yes.Q. And prior to that you were employed by

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IndyMae Bank, FSB? 1A. Yes. 2Q. Your ti tle with Onew esr Bank is what? 3A. Vice pres ident , bankruptcy and foreclosure. 4Q. That hasn't changed in all the various 5

IndyMae camamicns -- incarnations. I sho uld say? 6A. No . 7Q. Now, the IndyMac Bank, FSB ceas ed to exist 8

July llth of'Iast year , correct? 9A. Yes. 10Q. That was taken ove r by the FDIC . correct? 11A. Yes. 12Q. And that's when IndyMac Federal Bank, Federal 13

Bank. FSB took over? 14A. Yes. 15Q. And then as of March 19th of this year, 16

OneWest came in and purchased the asse ts of IndyMac 17Federal Bank? 18A. Yes. 19Q. Now, the plaintiffin this case is IndyMae 20

Federal Ba nk, FSB, correct? 21A. Yes. 22Q. When I say th is case , I know we're scheduled 23

fo r two depositions. I don't know if yo u know we're 24starting with the Machado case. 25

Mellon?A. I don't know .Q. When you say you ha ve signing authority, is

your authority to sign as an OlliCLT o f thosecorporations?A. Some . Deutsche Bank I h ave a POA to sign as

auorney-in-facr. Others I sign as an officer. TheFDIC I sign as attorney-in-fac t IndyMac Bank andIndyMnc Fe dL'TU1Bank I now sign asauomcy-in-fact.And now I only sign as a vice president for OneWL"S\.Q. As p art of your j ob , how often do you give

depositions?A. Tw ice a month.Q. SOyou're familiar wi th the deposition

proces s and what the rules are and what the courtrepor ter is doing and that you're under oath?

A. Yes.Q. Okay. I don't need to explain all of thosethings to you?

A. No.Q. Your job duti es include supervision of three

direct reports and 52 employee?A. It did.Q. Okay . Ho w's that changed?A. Let's sec. Now I have two di rect reports and

Page 6 Page 8Q. Would you agree with me that the plaintiffin

this case. the Machado case. no longer exists?A. Yes.Q. Are you also an office r ofMortgage

Electronic Registration Systems?A. No.Q. You have signing authority to sign on behalf

ofMortgage Electronic Registration Systems as a vicepresident, correct?

A. Yes.Q. Areyou an officer of any other corpo ration?A. No.

47 people with 17 openings.Q. Openings meaning you're looking for someone

to filltho se pos itions?A. Yes.Q. Arc you in charge of the loss mit department?A. No.Q. Who is?A. Karen Mastro is the senior vice president of

los s mit .Q. Can you spell the last name, please?A. M-A-S-T-R-Q. Oh , I'm sort)' . She is the

first vice president.Q. Is she nevertheless in charge of the loss mit

department?A. Yes.Q. Do you have the authority to settle anyforeclo sure case?A. Up to a certain doll ar amount of loss, yes.Q. How is that dollar amount of los s determined?A. It depends on what the settlement offer looks

like . Are you asking me how I mean , it depends.Q. Who sets the dollar amount?A. TIle senior executive committee.Q. OfIndyMac?A. Of IndyMac, b ut it was adopted by lndyjvlacs that Bank of New York

A. Bank ofNew York.Q. Bank of New York.

A. Okay. 12345678910111213

Q. Do you have signing authority for any other 14corpo ration? 15

A. Yes. 16Q. What corpo rations are those? 17A. IndyMac Federal Bank. IndyMac Bank. FSB, FOI 18

as receiver for IndyMac Bank. FDIC as conservator for 19IndyMac, Deutsche Bank. Bank of New York, Ll.S . Bank. 20And that 's ali i can think ofolfthe top of my head. 21Q. What was the one before U.S. Bank of New 22

York? 232425

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Page 9Federal and has been adopted by OneWe st, yes. 1Q. I'll probabl y be doing that all afternoon. 2So thank you for co rrecting me . I fOnewesr is the 3correct answer to that . please feci free to let me 4know . 5As part of your job duties .you personally manage 6

the attorney network? 7A. Yes. 8Q. What other job dutie s do you have? 9A. I manag e the bankruptcy and the foreclo sure 10

process. I also manage the breach process, the 11compliance of the breach letters as changes arc made by 12different states and jurisdictions . And I manage a 13default , a forensi c default group, research group that 14handles everything that's high loss related , compliance 15related , high level research. 16Q. Can you give me an example ofwhat this 17foren sie group default would be researehing? 18A. We foreclose on a property where the investor 19

won't cover the advances we've made. So one of the 20auditors would look to see if we got approval to make 21that adva nce. if there's some reason we wouldn't be 22getting approval for it, work with the investor to try 23to get approval or work to bill it baek to our 24outsource vendor or one of the firms -- now, this is 25

Page 10one of very many things that they do -- were at fault 1for a reason why we can't claim for the advances; 2taxes. let's say . 3Q. SOwhen you say high loss, you're referring 4to the losses that Oncwest is experiencing versus the 5investor that you're doing the work for? 6

A. That's another facet of what' s managed in 7that group. That example I gave you is not nece ssarily 8a high-loss example. High loss is anything with a loss 9between the total debt and the current value of250 or 10more . So those loans. whether it is owned by the bank 11or owned by an investor, are scrutinized because the 12losses are large . 13

Q. And you said that's losses greater than 14250,000 ? 15

A. Yes. 16Q. If a property goes to foreclosure and the 17ultimate recovery is more than $250.000 of the debt on 18that property. is that something that the foren sic 19default group would study? 20

A. Not from that perspective. 21Q. In other words. they're not concerned about 22losses due to propert y value s going down ? 23

A. That' s economic, so it's baked into the 24equation ofwhat they would review, but an economic 25


reason, like the property values going down in thestate of California. if something statistical, itdoesn't mean that they don't review it the same waythey would review something that was not statistical,but we do -- we are keeping in mind that propertyvalues are decrea sing everywhere . The high-loss valueused to be $ 100,000 when I first started working atlndylvlac Bank and has increased to 250,000 for thatreason.Q. Would it study a case where a volunta ry

dismissal was entered and the opposing counsel had tobe paid fees?

A. No.Q. No?A. No.Q. Any other job dut ies that we haven't talked

about?A. No.Q. O ne of your job duties is to sign document s?A. Yes.Q. Do you still spend an hour a day sign ing

document s?A. No.Q. Okay. How much time do you spend a day now?A. Ten minutes. maybe.

Page 12Q. Is that because you're signing fewer

document s?A. Actually , from the last time we spoke, thereare more that have to be signed by the bank. The FD[C

did not agree that our outsourcc vendor, who had powerof authority to sign for some docs, that they didn'tlike that idea so all the docs came in-house. We losta couple ofVPs, which is why l , at that time, was themain signer. Now there are four VPs signing documentsor that can sign foreclosure documents, and most do,and my supervisors are now approved signers.Q. Those are among the four that you mentioned?

A. ln addition to.Q. Okay . So howmany total in your departmenthave authority to sign documents?

A. In my depanmcnr.just specifically in mydepartment for foreclosure- and bankruptcy-relateddocument s, four of us, but my peers are alternati vesigners to me, and I have three peers that can signasan alternative to my signature .Q. And when you say peers , these arevice-pre sidents -

A. Yes.Q. --of other departments?A. Yes.



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Page 13Q. Okay. How is the decision made as to who 1

will sign what documents? 2A. There really is not a matrix. Onl y so many 3

of us can sign Lost Note Affidavits. I happen to be 4the only one in my department, besides my boss, that 5can sign a Lost Note Affidavit, so all those would corne 6to me . Other than that, there' s not a v- I think they 7ju st try to make it even. 8

Q. Just distribute them evenly? 9A. Yes. 10Q. Okay. How many documents would you say tha 11

you sign on a week on average, in a week on average? 12A . I could have given you that number if you had 13

that quest ion in there because I would have brought the 14report . However, I 'm going to gue ss, today I saw an 15e-mail that 1,073 does are in the office for signing. 16So if wejust-, and there's about that a day. So 17let's say 6,000a week and I do probably -- let's sec. 18There' s eight of us signing documents. so what' s the 19math? 20Q. Six thousand divided by eight , that gives me 21750. 22A. That sounds, that sounds about right. 23Q. Okay. That would be a reasonable estimate of 24

how many you sign, you personally sign per week? 25Page 14

A. Yes. 1Q. And that would include Lost Note Affidavits, 2

Affidavits of Debt? 3A . Y ~ 4Q. What other kind of documents would be 5

included in that? 6A. Assignments, declarations . I can sign 7

anything related to a bankruptcy or a foreclosure. 8Q. How long do you spend executing each 9

document? 10A. I have changed my signature considerably . 11

It's just an E now. So no t more than 30 seconds. 12Q. Is it true that you don't read each document 13

before you sign it? 14A. "I1mt's true . 15Q. The procedure that we talked about last time , 16

and I will go over it again to see if that's still the 17procedure, before you would sign an Affidavit of 18Debt 19

A. Yes. 20Q. -- it goes to your foreclosure specialist who 21makes sure that the informationis correct? 22A . 'I11C figures arc correct, yes. 23Q. It is fair to say that you don't personally 24

check the accuracy of anything in the documents that 25


you re signing?A. Not, it's not clear that I don't check

anything. The ligures [ don't , I do not check . Wehave a QC process around that used to be a [00 percentof theAffidavits of'Dcbtsand any ligures for loansand bankruptcy, that have now been reduced to 10percent because the errors were relatively low. Now Ipay, what [ pay most attention to is the jurat and whatentity I'm signing for, which is why [said 30 secondsinstead of two seconds.Q. Right. Now, when you say 10 percent , that

means that they're spot checking [0 percent of thedocuments to make sure thatthey're accurate?A. The outsource or our outsource vendor checks

the document completely. I'mQCing my outsource vendo rwith the 10percent. yes.Q. When you say outsource vendor, you re talkingabout LPS?A. Yes.Q. Does LPS put the ligures in the affidavit?A. No.Q. Who puts the figures in the affidavit?A. It depends on what relationship we have with

our firrus. Usually we download the information throughprocess management, the system we use to communicate

Page 16with our firms, and they will populate the document.Or sometimes we get it in blank and a foreclosure or abankruptcy specialist would populate the document.Q. And when you say "they" would populate thedocument , you're talking about the attorneys?

A. Someone in the finn, yes .Q. Might be a paralegal, correct?A. Maybe.Q. Then those are sent , after they're populated

or filled out by someone at the law finn, those arcsent to LPS?

A. They're sent-. they're uploaded into thesystem, like an image copy. and then LPS prints it olT,and they go through their various checks and balances,and then based on a matrix that we have provided, theywilllock to see if this is an entity any of us cansign for. They may reject it back to the firm and sayIndy OneWest Bank can't sign for it, or they willship the document to our v- because these documents getprinted in Minnesota. The documents get shipped to ourAustin office. Those folks again look to make sureit's something that an oflicerofOneWest Bank inAustin can sign for it and , I mean , that's basicallyhow we get it.Q. When you say "those folks" check again,

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Page 17you're talking about your 0\\11staff when the document 1arrive? 2

A. No . we have LPS on site. 3Q. In Austin ? 4A. Yes. 5Q. Take me through the procedure for getting 6

your actual signature on the documents once they've 7gone through this quality control process. 8

A. The documents are del ivered to me for 9signature and I do a quick purview to make sure that 10I'm not signing for an entity that I cannot sign for. 11And I sign the document and [ hand it to the Nota ry, 12who notarizes it, who then hands it back to LPS . who 13uploads the document so that the firm s know it's 14available and they send an original. 15Q. "They" being LPS ? 16

A. LPS, yes. 17Q. Areallthe documents physically , that you 18were supposed to sign. arc they physically on your 19desk? 20

A. Yes. 21Q. In your office? 22A. Yes . 23Q. You don't go somewhere else to sign 24

documents? 25Page 18

A. No . 1Q. When you s ign them, there's no one else in 2

your office? 3A. Sometimes. 4Q. Well, the Notaries arc no t in your office, 5

correct? 6A. They don't si t i n my office, no . 7Q. And the witnesses who , if you need witnesses 8

on the document , are no t sitting in your office? 9A. That's right. 10Q. SO you take your tcn minutes and you sign 11

them and then you give them to the supervisor of the 12Notaries, correct? 13

A. I supervise the Notaries, so I just give them 14to a Notary. 15

Q. You give all , you give the whole group that 16you ju st signed to onc Notary? 17A. Yes. 18Q. Last t ime wc talked about that there were a 19

group ofNotaries and that you had a supervisor that 20manages a group of loans and passes them out to the 2 1different Notaries. Has that changed? 22

A. It used to go to -- well , a little bit. It 23used to go -- and that' s with the shift of people 24leaving and people coming with everything that's been 25


going on with the bank . All the documents went to oneof my supervi sors. who manages the defa ult forensicgroup , and she would pass it out. That's what [ wasdescribing to you.

We don't have to have a process like that any morenow because everyone's in a g roove now with what theprocess should be. So we don't have to manage someonephysicall y making sure everyone's notarizing . So now [just walk out of my office and hand them to one of myfolks that can notari ze that don't report directly tome. They still report up to their supervisor and thenthose direct report s report to me .Q. And doe s that Notary notarize all of thosedocuments, or docs she then distribute them to variousNotaries?

A. He or she would notari ze all the documents Ihanded them.Q. Do they still have the requirement ofreturning them notari zed within 24 hours?

A. That got tough . That is tough. That' s wherewe would like to be but we aren't. lt takes us about aweek for it to go through the proce ss of verifying theinformation, gel ling it on my desk , me signing it,gelling it to a Notary. and gelling uploaded. So wehave document delays.

Page 20Q. I'm mostly interested in how long it takes

for thc Notary to notarize your signature .A. I can't say categoricall y because the Notary,that' s no t the only job they do, so.Q. In any eVL111 , it doesn't have to be the same

day?A. No .Q. When they notarize it and they pu t a date

that they're notarizing, is it thc d ...nc that you signedor is it the date that they're notarizing?

A. I don't know .Q. When you execute a sworn document, do youmake any kind of a verbal acknowledgment or oath toanyone?

A. I don't know if J know what you're talkingabout. What's a sworn document?Q. Well , an affidavit.

A. Oh. No.Q. In any event , there's no Notary in the room

for yo u to -A. Right.Q. + + take an oath with you, correct?A. No , there is not.Q. In fact , the Notaries can't sec you sign the

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A. Not unless they made it their busine ss to do 1_ 2Q. To peck into your office? 3A. Yes. 4Q. At what point docs the document get to the 5

witnesses for signature? 6A. The witnesses are, generally, are LPS 7

en-sites, but if'irs a witncss.Lkc if'it has to be 8an authorized wimcss, then it would have my name and 9one of my peer's names or my name and my boss's name. 10And [ would have a cover sheet on top of a stack that 11would say Eriea and Erie. So after I signed, I would 12walk them over to my boss for him to sign. 13Q. Okay. But you're talking about documents 14

that have dual signa tures? 15A. Some that require dual signatures. lfit's 16

just a witness. it doesn't have to bc an authorized 17signer. then other LPS en-sites will witness . 18Q. And do they do that before or after the 19

notarization? 20A. [don't know. [ want to say after, but [ 21

really don't know. I haven't picked apart that 22process. 23

Q. Well, it seemslogically . whcn you get the 24document. there'sno witn ess signatures on there. 2 5

that it' s supposed to include. They check that thedocument has the appropriate cover letter with the loannumber on it and that document does not have the loannumber on it for states that have the privacy act . Iwent through a presentati on with what they do, and [want to say there was eight or nine differentcheckpoints.Q. Did that presentati on, was a report includedwiththat that you could read whatthey were saying?

A . Yes,and there actually is a report that theLPS folks use in Minnesota for what they rej ect back tothe firm s because the documents aren't accurate.Q. Do you still have a copy o f that report?

A. I can lind one. You didn't list that in yourlist of thin gs.Q. Yeah. I didn't mean do yo u have it in here,but is it somewhere where you could get it for us ifweneeded it?

A. Yes.Q. Okay. Did they say that they cheek thenumbers that are in the affidavits?

A. There's no way they can check the numbers.no.Q. Do they have access to the computer programthat tracks all the debt numbers?

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do?

correct?A. No.Q. And yo u said that you take them and you givethem to the Notary. You don't give them to the witness

to sign, correct?A. That'Sright.Q. SO logically it would have to go from the

Notary then to the witness?A. Well , yes. Yes, that's logical. I ju st

really don't know .Q. Let mejump back a moment to ourdiscussionabout the quality control that goes on at LPS. Do youhave any familiarity wi th what they do per the qualitycontrolin Minnesota?

A. I've been told what they do, yes .Q. And what is it that you were told that they

A. LPS, in itself, has access to its client'ssystem mainframe because they do screen scrapes fromthe systems to get data. [d on't know if theindividual person that docs docs has that access.Q. Okay. Do you know who overa t LPS would knowthat in formation?

A. How high do you want to go? Do you want thepresident of.Scott Barns, president of default?Q. Okay. I'd like to talk about the procedure

for referring a loan for foreclosure. That s done inyour department. correct?

A. v .Q. It's done by a person with the title of

foreclosure specialist?A. Yes .Q. And foreclosure specialists are folks thatreport to you?A. They report to one of the supervisors who

reports to me. yes.Q. To one of your two direct reports?A. Yes.Q. The decision is made to send the case to LPS .

That's that first step in the procedure, correct?A. No. The first $IeI' is to see if the loan is

ripe for referral; and, in conjunction with that. if

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A. For each of their clients. they have a matrix 18of who that client can sign for. And the processors 19that work in Minnesota, when they print the documents 20off line, they're checking to sec if it's a document 21that their client can sign for. They're checking to 22sec if that the document is aes thetically correct, 23looks, you know, looks like it should look . They check 24to sec that the document includes the number of pages 25

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Page 25that were following the investor's guidelines for its 1prescribed plan to refer the loan. 2Q. Whcn you say "ripe for referral," what sort 3

of things determine whether it's ripe? 4A. Is the loon delinqcr.mt. How much contact 5

have wc had with the, have wc, at Onewcsr Ba nk, had 6with the borrower. Is there anything unresolved. Did 7the borrowe r ca ll in and has been expec ting a phone 8call back. in which ca se we 're not going to refer it 9until the borrower received that phone ca ll. Is there 10anything unresolved.fikc a payment plan, some 11discussion about a payment plan and a payment was to be 12expected, you know, three-days from today, in which 13case the referral specialist won't refer it because 14we're expec ting a paymen t. 15So they're like. they are really the first 16

gatekeepers to insure that nothing gets referred that 17shouldn't be, because then we pay attorney fees and we 18have to take that out, you know, that comes straigh t 19from the bottom line. 20Q. when you say whether it's delinquent, is 21

there a certain amount of time it has to be delinquent 22before it qualifi es for referral? 23

A. Yes. depend ing on the investor. Usually 60 24days, but government loans go up to 120 days. 25

Page 26Q. How much for Deutsche Bank, if Deutsche Ban ' 1

is the investor? 2A. Deutsche Bank, we our PSA for Deutsche 3Bank is that we service their loans as we would o ur 4

own. So we refer it, we try to refer it no sooner than 5day 60 of delin quency and no later than day 120, unless 6there is a reason. There has to be a reason it's 7fallen out. 8

Q. Okay, When the decision is made to refer a 9loan to foreclosure -- well . let me strike that. 10Once the decision is made that it's ripe and all 11

of these conditi ons are met, then it gets sent to LPS? 12A. Yes. 13Q. And LPS, in return . refe rs it to an attorney? 14A. An attorney tha t we have adv ised them tha t we 15

want the file sent to, yes. 16Q. You have your 0\\11stable of preferred 17attorneys? 18A. Yes. 19Q. In fact, that's part of your jo b to manage 20

that network? 21A. Yes. 22Q. At what point in this process does OneWest 23

start looking for the original note? 24A. For an original note in a state like Florida, 25


as soon as the loan is referred to foreclosure becausethe foreclosure attorney can't do what they need to dowithout it.

Q. SOon the day that it's referred to LPS,OneWest beg ins the process ofgett ing a hold of theoriginal note?

A. So what happens is it gets referred, and astate like Florida, a loon in Florida goes to a queue.It's also an LPS employee that's on site. She's onsite in Pasadena, Sylvia Carballo. It goes in herqueue and she begins ordering the original documents.wherever they may be. And she manages tha t proce ss ofreceiving the original documents, preparing the baileelette rs, getting then sent to the firms, and sendingthat all to the firms.

Q. At the point that Onewcsr is referring theloon to LPS for foreclosure, is any kind ofrepresentation made to LPS abo ut whether the originalnote cannot be found?

A. Say that one more time.Q. Does OneWest tell LPS, when it' s referringthe case for foreclosure, anything about the status ofthe original note?

A. No. it's the other way around. So if Sylvialearns that the original note cannot be found . that the

Page 28doc custodian docs not ha ve record of the originalnote, or it might be that there was a previousforeclo sure and the origina l note never made it back,she is mfonned and she log s into a database.

Q. Sylv ia is that LPS onsite person ?A. Yes .Q. And it's on sit e, but not on yo ur site?A. She' s in Pasadena, right.Q. Oncwest has one main custodian, Deutsche

Bank?A. One bigger one of our biggest is Deut sche

Bank , yes.Q. That's where mo st of One -A. Yes.Q. West documents arc hou sed?A. Yes .Q. And would that be the custodian for any

documents where Deut sche Bank and Nationa l TrustCompany is the investor?A. Not necessarily.Q. Is it the mo st probable custodian?A. Yes.Q. When Well s Fargo is the investor, there might

be a different custodian?A. Wells Fargo is a good example. It could be



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Page 291 at Wells Fargo or i t could be at Deutsche Bank. 12 Q. But what you're telling me, [j ust want to 23 make sure [ understand, what you're telling me today is 34 that a loan where Deutsche Bank National Trust Company 45 is the investor, the custodian may be Deutsche Bank or 56 it may be Wells Fargo or someone else? 67 A Yes. 78 Q. It's Sylvia with LPSwho dete rmine s which 8s custodian to ask for the document? s10 A. Based on in formation she receives from 10

11 OneWe st Bank's computer sy stem, yes. 1112 Q. When we talked last time, you said her name 1213 was Sylvia Carballo? 1314 A Yes. 1415 Q. Her supervisor was Luis Tcna ? 1516 A Yes. 1617 Q. You had ncr -. 1718 A. l'm sony. 181. Q. That's all right You hadn't had much ,.20 contact with LuisTenn. I think he had just started 2021 then? 2122 A We are close friends now. yes. 2223 Q. He works in the LPS office, but he's employed 2324 by Oncwest? 2425 A. No, he works in the LPS office employed by 25

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Q. That screen-- and I'm saying it right ? lsitMAS1? How do you say that?A. MAS1INVlQ. INVI . Okay . It says who the inves tor is?A. Yes.Q. Sylvia, or whoever the specialist is that' s

doing this job, then c-mails the custodian to ask forthe documents, correct ?A. Yes.Q. And she e-mail s you a copy of the list

because you have to approve it before the custodianwill release the records?A. That' s changed too.Q. Okay. What happens now?A. Now the list has to be approved by treasury

Because of other thing s out side of the scope of, youknow , what' s going on here, the doc custodians will nowonl y release them to one person and that person is intreasury.Q. When you say treasury, you're talking aboutUnited States Department ofTrea sury?A. No, at Oncw est Bank 's treasury department.Q. The what?A. OneWest Bank's treasury departmentQ. Who is it at the trea sury department they

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LPS, but supervises the on-sites in Pasadena. 1Q. And is that in Minne sota or Florida that he 2docs that? 3A. He lives in Jacksonville. Excuse me. 4Florida, yes. 5

Q. And Sylvia is in the Pasadena office? 6A. Yes . 7Q. Okay. The way that Sylvia would determine 8

who the custodian was, or what entit y is function ing as 9the custodian, is to look at a computer screen called 10theMAS1INV1 ? 11A. That' s her beginning point, yes. That 12

process has actually changed. 13Q. Okay. What's the process today? 14A. What we discussed last time is sti11 the 15

underl ying , the foundation, but there' s a database now 16that goe s out , and based on the loan numbers in her 17queue, it pulls the original doc , the original document 18custodian information and the original investor , to try 19to help her determine faster where the document might 2 0be, and it has eliminated some of the errors that we 21found in the past. 22Q. SO is it correct to say that that proces s has 23been automated somewhat? 24A. Yes . 2 5

release it to?A. Sandy Schneider. Well, it's not that they

release it to her. She has to -- she takes over thatwho le approving it.Q. Right. I'm sony. So Sandy Schncidcr-.A. Schneider.Q. -- approves the release of the original

documents?A. Yes.Q. The custodians then will pull it from the

fireproof vault that it' s required to be kept in?A. J hope so.Q. And they package it up and mail it to

Oncwcst?A. They ship it Fed Ex or UPS to Sylvia's

attent ion , and she sits outside of the office of one ofthe corporate compliance VPs. There is a room of f tothe side that has a fireproof cabinet where she storesthe documents if she can't get them tumcd around andout with the bailee letterto the finn via UPS or FedEx the same day .Q. When the custodian ships the originaldocuments, do they ship it in a manner that can betracked?A. Yes.



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Page 33Q. And do you -- you, OneWest -- keep records of 1

that tracking? 2A. Yes. 3Q. Do you keep the records even i f it's safely 4

made it from the custodian to Onewcst? 5A. Yes. 6Q. How are those kept? 7A. In that database I mentioned. 8Q. SOit's a computer record of it? 9A. Yes. 10Q. How docs that record get into the database? 11A. Sylvia entered -- well, Sylvia or one of the 12

three people that work with her enters the information 13in the database. 14

Q. You mentioned that she gets -- wants to tum 15around and get it out with the bailee letter to the 16attorneys . 17A. Yes. 18Q. I imagine she also sends it in a way that it 19can be tracked? 20A. Yes. 21Q. ts it Ups? 22A. UPS. 23Q. Okay. The custodians can choose, use the UPS 24

or Fed Ex; is that right? 25Page 34

A. Yes. 1Q. Whatever they feci like using? 2A. Yes. 3Q. ButOncwest uses UPS? 4A. Yes. 5Q. And you keep the records of that tracking, 6

correct? 7A. Yes. 8Q. If the note is not received from the 9

custodian in ten days , then you , Oncwcst, follow s up 10with the custodian? 11A. That's been changed. 12Q. Okay. wharsthc ncw rulc ? 13A. Seven days . There arc three checkpoints back 14

to the doc custodian. So that by day 21, after the doc 15custodian has not returned it, Sylvia is looking for an 16e-mail message or something in writing that explains, 17you know, why can't you find it, whore's the note, so 18that we have better tracking, of not only the follow-up 19attempts, but what the responses were. 20Q. ThL,1 is there a second follow-up? 2 1A. There's three follow-ups: Seven-day, Ia-day, 22

and 21-day. 23Q. What happens after the 21 or2lstday? 24A. ThL,1 we scud a request to the firms to 25


prepare a Lost Note Affidavit.Q. Before the first follow-up, or I should sayat the time of the first follow-up, does Sylvia notifyanyone else that the document hasn't shown up yet?A. No.Q. When is the first time that the law firm

would know that the original documents hadn't arrivedat OneWest?A. They would receive an issue through process

management to prepare a Lost Note Affidavit . Thatwould be their indication.

Q. SOthat would be on the 2 lst day?A. Or thereabouts, yes.Q. Is it still true that Onewesr isn't satisfied

if the custodian just says they couldn't find it; inother words , you want them to come back and tell youwhy they couldn't find it?A. That's true , yes.Q. You would hope that they would tell you thatsomebody cheeked it out and didn't return it?A. Yes.Q. The custodian is required to keep the

original documents in a special fireprooflocked vault?A. Yes.Q. Is it pretty unusual that the original

Page 36document doesn't show up?A. Unusual for whom or what? [mean, at what

circumstances?Q. Let me rephrase that. Is it unusual for thecustodian to report back that they don't have it?A. lt happens. Does that answer your question?

It's not that it's unusual. It's not like warningbells and whistle s go or r because the doc custodiancouldn't find one. Because it happens with multipleforeclosure filings. with the bankruptcy filing, wherean original document, and with the hand-offs and with abank like OneWest who has several location s, ananomey might get the original document and send it toPasadena and it should have come to Austin and it saton somcone's desk and no one opened the mail. I meanjust, all the things that, you know, that managing amail sys tem, that happens with managing a mail sys tem.So we try to make changes in our process to eliminatesome of the getting the notes back. That's where wehave found we have the issue with a lot of our lostnotes, is that there was some legal action previous.In some cases we found, after going back two and

three times to the doc custodian , that the document wasthere. It was the doc custodian who just, for whateverreason, whoever they used to pull the document, that



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Page 37person didn't pull the right document and we ended up 1gelling the document. So [ don't think it' s unusual. 2

One of the things, though, from the lastrime wc 3spoke till now, l ncticed a gap in our procedure. I 4think we were vel) ' aggressive at reques ting a Lost Note 5Affidavit at day ten, seven or ten, and with the 6volumes happening all over the country, we probabl y 7should have taken it out to 21 days a while ago because 8the notes are there . It jus t was they hadn't found it 9by the time we already shot of f the request to the 10firms. 11

Q. Well , when you say found it, it's not that it 12was lost . you ju st hadn't got it transferred from -- 13

A. That' s right. 14Q. -cthe custodian to Oncwcst, correct? 15A. Yes. 16Q. I'm stilltrying to get a senscofhowoftcn 17this happens, though. Is it something that happens 18

evcry dayat Onewcator-, 19A. No. No, but it happened more as we were 20

going through our transition with the fcds taking over 21and losing a significant amount of stall'. Now that we 22arc OncWest Bank, I can't even remember the last time 23saw a Lost Note Affidavit, honestly. 24Q. Over the last year, let's say, what 25

Page 38percentage of the loons that you've been involved in 1started out with being unable to find the original 2note ? 3A. What do you mean by involved in? 4

Q. In your dcpartrucut. 5A . [don't know. 6Q. Doyou have any sense? Is it [ percent , 5 7

percent. 10 percent? 8A. [don't know. There was a time, before we, 9

you know, became less aggressive with our procedure to 10do the Lost Note Affidavit, assuming that Deutsche Bank 11couldn'tlocate it. that I signed Lost Note Affidavits 12more frequentl y than I do now. And [ think changing 13the procedure has made a big difference, because, like 14I said, [ can't even remember the last time I signed 15one. Or it could be now when I get one , [ won't sign 16it until I see that that custodian really can't find 17it, which is something that [ wasn't necessarily doing 18before unless prompted to do so. 19

So I don't know, out of 77.000 loons in 20foreclosure. well, then thcrc was probabl y 60.00 0 loons 21in foreclosure, [ did several a week, but now [can't 22even remember, I can't remember what that number is, 23and now I do zero. 24

Q. Well , you're giving me a total of the loons 25


in foreclosure. How many in foreclosure. how many newones in foreclosure each week?

A. Today?Q. Yes.A. lt depend s on the time of the month because

of the investor guidelines with referrals, but [ cantell you that overall , across the nation. we referred[2,000 loons into foreclosure for the month of June.California is our largest footprint, so 40 percent ofthose were in California.Q. Now, some of those you wouldn't know whetherthey needed a Lost Note Affidavit yet?

A. That's right.Q. But so far, what your testimony is, is thatof the ones that you would know about. none haverequested a Lest Note Affidavit?

A. It's been a long while.Q. More than a month?A. Yes, more than a month .Q. And it's certainl y safe to say that it would

be untrue that a 100 percent of the loans that you havein foreclosure had any lost original note?

A. Right, that would be untrue.Q. The custodian normally has some sort of

checkout procedure that people can't just come in andPage 40

take a note , take out a notc without s igning for it?A. vcs.Q. Is there a certain time frame that aforeclosure suit must be filed after the borrower has

defaulted?A. Are you talking about the firstlegal action

in the foreclosure or whar-,Q. The filing , the actual filing ofthc suit , istherc a time frame rcquircd?

A. See , oka y, I'm dealing with 50 states in mymind , so can you get more specific? Are you talkingabout the first legal action or >-Q. Let's stick with Florida for right now.

A. Okay.Q. But reall y the que stion is directed to your

investors and whatthcir guidelines arc and what you'rerequired to do. Are you required to get a case filedby 60 days. 120 days after default--

A. I sec what you're saying.Q. -- or you aren't compl ying with your job?A. Yes. That' s true, yes.Q. And is that governed by the PSA?A. Usually. but it's Fannie and Freddie

typicall y that have very strict guidelines about when afile should be in foreclosure and very specific

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Page 45I don't understand. 1

BY MR . ICE: 2Q. Wcll, you're the vice president of the 3

department of foreclosure at oncwcs, correct? 4A. Yes. I didn't check to see i f an issue was 5

raised because you didn't write that in your paper. So 6I don't know at this moment if an issue was raised for 7that. 8

Q. Are you aware of any communication to the 9attorney that the note had been lost? 10

A. No, but _ well, no, I didn't, I didn't look , 11I didn't look into the loss note aspect for these two 12files. 13

Q. When plaintiff says in this complaint that 14they didn't have a copy, that's not true because a copy 15is on the computer that can be printed out and attached 16to the complaint, correct? 17A. Gcncrally,ycs. Usually. yes . 18

Q. Take a look at paragraph 18of the complaint. 19Do you sec thc last SL11lL11CCthere, it says: Aller due 20and diligent search, plaintiff has been unable to 21obtain possession of the mortgage note? 22

A. Yes. 23Q. What due and diligent search was performed in 24

this case? 25Page 46

A. Excuse me. At that time the due and diligent 1search would have consisted of an e-mail request to the 2doc custodian, a time period for which to expect a 3response back. And at the conclusion of that time 4period, ten days, I believe -- I'm not sure ifit's 5seven or ten days anymore -- that the assumption was 6then made that the note could not be found. 7Q. Okay. So what this is saying. then, is that 8because it's aller the due and diligent search, that 9means all of that had been completed by the time the 10attorney filed this on November 21st. 2008? 11

A. Yes. 12Q. And your testimony is, as of that time, the 13custodian was reporting that it was lost? 14

A. Can I just look at the time line? 15Q. Sure. 16A. I'm sorry. I want to check before I say I 17

don't know. This complaint was filed on November -- 18Q. Twenty-first. 19A. -- 21st. Well, they breached this loan on 20

September 30th. I have to do the math. Florida is a 213O-day breach state, so we wouldn't have had it in 22foreclosure anytime sooner then October 30th. And irs 23possible, as we still have 21 days of play, and we were 24too aggressive before with raising the issue to say 25


that the note couldn't be found.Q. Whcn was it decided back then, under therules back then, that the notc couldn't be found?

A. Just the initial didn't get a response fromDeutsche Bank within seven or ten days.

Q. You had mentioned the ten days in the lastone.

A. Is it ten days? Okay. I couldn't remember.Ten days. And as soon as she didn't get response onthat tenth day, Sylvia was to raise the issue with thefirm. Now, the process management is realtime. So ifSylvia raises the issue at 10:00 o'clock, at11:00 o'clock in Florida -- well , she's in Pasadena at10:00. So at 12:00 o'clock in Florida they would havebeen able to sec that the note couldn't be found.Q. Is there a field somewhere in the computerscreen where she inputs that there's a problem findingthe note?A. The process thcn-c that process is true

today. The process then was she just raised the issueto the finn. And what the issue says is prepare a LostNote Affidavit. So the assumption is we need toprepare this because we can't locate it.Q. SO if I'm understanding your testimony, forthis count to be in the complaint, someone would have

Page 48asked, Sylvia would have asked for a Lost NoteAffidavit?

A. Yes.Q. Okay. Did anyone ask for a Lost NoteAffidavit in this case?

A. I don't know because I didn't look at that.When I was reviewing the file, I was justlooking attheAffidavit of Debt.Q. Where would you go to look for thatinforrnation?

A. In process management.Q. That's the computer program?A. Yes.Q. What screen would you look at?A. I would just pull up the loan number. This

is LPS's system. I would just pull up the account bythe loan number. And within it there's differentmodules. There's a foreclosure module. And then eachaction is broken down by section. So there would be anoriginal doc process, and that's where I would go tosee what happened during that process, if it was openand closed.

Q. I wasn't sure the court reporter got it.What you said was that this program that you'redescribing is an LPS system?

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Page 49A. Yes. 1Q. And is it just a notes field or something in 2there that someonewould type a mes sage, or is it l ikc 3

a ycs/no togglc in the computerprogram? 4A. How can I I'm not a system person, so you 5have to excuse the way I'm going to describe this. 6It's kind of like template-based . So you know that in 7the state of Florida you're going to go through these 8particular steps. and within these steps there might be 9sub steps. So ill order to go 011 to the next step, 10somcouc has to address thepredecessor step. So that 11means that your ycs/no question is accurate, but 12there's also thc capabilit y to put notes. So if you 13mise an issue you can put note s. There 's a whole 14notes screen . You can send an e-mail from the system 15which copies back ove r to the note s, and it 's the 16e-mail between our foreclosure counsel, the client, 17which would be us, and the LPS reps. 18Q. I think you described thc system as it was 19

back then. What' s the difference wi th how it is now? 20A. Their system? The LPS's system? 21Q. Well. the reporting that the custodian was 22

not able to find the note to the law finn . 23A. The new databa se, that' s ours . That' s 24

Onewcst Bank's s stem , es. 25Page 50

Q. And what's that sy stem called? 1A. It's an access database. It s not called 2

anything. It's just an access database that one of my 3analysts -- it was created by someone else. Oneof my 4analysts tweaked it nnd-. one of the analysts that 5report directly to me tweaked it so that it's more 6meaningful and has thc controls in place that we 7needed. 8So now what itdoes, like [ said, is it takes a 9

lot of the manual-ness out of it. Sylvia doesn't have 10to go TO MASI JNVI The system looks at our, the 11mainframe -- okay. I'm not a systems person, so. you 12know -. where allthe data is and it's scrubbing, based 13on the loan number, to pull inwho the doc custodian is 14and then it creates the list. Now, Sylvia doesn't have 15to create a spreadsheet. It creates a listthat is 16attached to the e-mailthat Sandy approves that then 17goes to thedoc custodian to getthe documents back. 18And whenthe documents come in. there is a. [ike a 19

gun thing that they hook up to the computer, and so 20from thc bar codes fromthe FedEx or UPS or however 21the doc, they can scan it and itputs the tracking 22number on the system. And she does the same thing when 23she gets ready to send the document out. So now we are 24keeping track of, we havemuch better controls over thc 25


process and better follow-up and follow-through.Q. What does the attorney seeof that to knowthat there's a lost note?

A. Today, nothing. What we're working on,however, we're just not quite there yet, is an overlayof the back and forths, or whatever communicationSylvia has to the firms, so that they know how manyattempts we made and, you know, ultimately where thedocument is. And it would probably -- the idea is toupload this into process management, this document intoprocess management.Q. Okay. What I'm understanding from you, then,correct me if I'm wrong, the only time the attorneywould know that there's a lost note, either the way thesystem was then or even the way it is today, is thatsomeone requests a Lost Note Affidavit?

A. Yes.Q. Look back at paragraph 4 of the complaint.It says: Plaintiffis now the holder of the mortgagenote and mortgage andlor is entitled to enforce themortgage note and mortgage. Do you see that?

A. Yes.Q. Do you know which of those options it is,whether it' s they're the holder and entitled to enforcethe mortgage note and mortgage. or they're the holder

Page 52or ent itled to enforce the mortgage note and mortgage?A. I'm going to read this. Okay .ln this case it is. or is entitled to enforce themortgage note and mortgage.Q. And whydo you say that?A. Because Deutsche is the investor and we're

servicing, the servicing agent.Q. Right. Oncwest is not the holder o f themortgage note and mortgage?A. Right.Q. And even ifit was, it couldn't be the holder

of the mortgage note because the mortgage note waslost?A. Is that a question?Q. Would you agree with that?

f'.AR. .MANCILLA: No, the mortgage notewasn't ultimately lost. It may have beenmissing or it may not have been found at thetime the complai nt WaS filed, but it WaSultimately found .

BY f'.AR. . ICE:Q. My question is as of the time that theattorney penned his name onto this complaint and madethese allegations to the Court , made factualrepresentation s to the Court , as an officer of the



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Page 53court. it wasn' t holder o f the note because it was 1lost. Would you agree with that? 2

A. Well, I don't understand that NO. 4 to be 3that , to mean what you are saying. 4

Q. Okay . How do you understand it? 5A. I understand NO. 4 to be the holder, as in 6

who rightfull y can enforce the terms, not so much as 7who physically had the document. That's just my 8understanding. 9

Q. I would tend to agree with you on that. I 10thin k your attorneys might differ with you and 11ce rtainly differ with me. 12

All right. You've kind o f anticipated my next 13series of questions, which was, it's true that Onewcsr 14docs not 0 \111 the loan in this case? 15

A. That's true. 16Q. Neither Onewe st nor ludylvlac Federal Bank, FS 17nor IndyMac Bank, FSB, none of tho se entities 0 \\11 the 18

loon in this case? 19A. 'rhers right. 20Q. The loan has been securitized? 21A. Yes. 22Q. The loan is owned by a trust? 23A. Yes. 24Q. The tru st is Deutsche Bank National Trost 25

Page 54Compan y? 1

A . ~ . 2Q. I should have said the trustee is Deut sche 3Bank National TrostCompany, co rrect? 4A. Let me ju st look at that real quick. Yes. 5Q. In your computer systems, the owne r ofthe 6

note is ca lled the investor? 7A. Yes. 8Q. You r computer systems sho w that Deutsche Bank 9

National Trust Company is the investor? 10A. Yes . 11Q. Deutsche Bank National Trost Company is the 12

creditor under the Fai r Debt Collection Practice s Act? 13A. I don't, I don't know. 14Q. As your attorneymentioned earlier, I don't 15

want you to guess at anything. If you don't know. 16please just say you don't know. However. if you can 17es timate something for me and that's relevant, we would 18like for you to do that . 19

The trust in this case. the Machado case, is the 20IndyMac INDX Mortgage Trust 2006-AR4. mortgage 21pass- through ce rtificates series 2006-A R4. 22

A. Yes. 23Q. The PSA that governs the relationship between 24

Oncw cst and the trustee is da ted March tst, 2006? 25


A. Yes.Q. Ar e there any terms o f tha t particular PSA-and for the benefit of the j udge or a ju ry , whoever mayend up reading this, PSA stands for the Poo ling andServicing Ag reement?

A. Yes.Q. Ar e there any terms o f the Po oling andServicing Ag reement tha t restrict the manner or amountthat a loan , that this loan may be modifi ed?

A. I don't know. I don' t kno w because I didn' tread the PSA for this loan.

Q. Do you have it wi th yo u today?A. I don't. Did you ask me to brin g that ?

MR. MANCILLA: No.BY f'.AR. . ICE :Q. Please , man y times I'll ask yo u if you havesomething because I see you have things in front ofyou. It's not inten ded to suggest that you weresupposed to bring anything with you. l'm j ust.jusro ut of curiosity do yo u have it?

A. I don't.Q. Okay.A. And -- wcll>-Q. I'm so rry, do you have something to add to

yo ur answer?Page 56

A. That question is even outside the realm of myresponsibilit y. Lik e so in terms o fl ike what's in thePSA agreement, what I'm always looking for is how I canvest and how I can do the action. where the loss mitgroup is more lookin g at sections of the PSA thatgovernwhat you're speaking to.Q. Okay. When you go to look at the Pooling andServicing Agreement -- well. sorry . strike that .

Doyou sometimes look at the Pooling and ServicingAg reement as part of your job?

A. Yes .Q. When you do that. do you pull it up on your

system or --A. Yes .Q. Doyou ever look at what's available on the

Internet?A. No.Q. Are there any c onractual restrictionsoutside the PSA that you're aware of that restrict theway that this loan may be modified?

A. You mean from a loss mit perspective when yousay modify?Q. Yes .

A. Today, yes .Q. What contractual provisions are those?



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borrower doc s that for three months, then their loan ismodified to a lower interest rate. And there's a rangefor that lower interest rate, and I don't know exactlywhat that range is.

And in some cases some ofthc principal balance is110t forgiven , but a separateloan is made out of itthat the borrower doe sn't have to pay unless they sellthcir home. I'm foggy on that. I'm foggy .

Thc FD[C modification plan [ know less about , butit is what Sheila Bai r came out with when the FDIC too

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Page 57A. Obama's I [AMP program, and also the FD[C los 1

mit program. but I'm not the subjec t matter expert on 2any of those. l j ust know that those now govern what 3and how loans can bc modified. 4Q. Do you have a general idea of what those 5programs do? 6

A . Ycs. 7Q. Can you take me through the Obama one? 8A. This is rough . because l've already admitted 9

that's not my area of expertise. So the IIAMP program 10that is administered by Fannie and Freddie. and it's on 11those two investors that we are required to behave a 12certain way, but for other investors, other investors 13can opt in. Ofcourse, the President wants all the 14loans to be looked at under his plan . And so if there 15is a -- let me try to get this right. 16

The DTI , debt to income , has to be 3 \ percent 17I'm probabl y about to get into trouble because I'm 18trying to go somewhere that I don't know categorically. 19And if it is and the borrower has, you know, the reason 20for a default is catastrophic, or it doe sn't have to be 21catastrophic , but, you know, loss of income, divorce, 22those such thing s, the borrower is put on a three-month 23payment plan. The payment mayor may not be a full 24payment. It might be less than a full payment . lf the 25

Page 58123,5B789

10over IndyMac Federal Bank. It has the same general 11idea The borrower has to meetthis criteria of debt 12to income, but the outcome is the same, without the 13principal reduction. 14

The HAf'.AP program, I'm going back to the other one 15also has an area that a borrower doesn't havc to be 16delinquentto qualify for it as long as the borrower 17can show that they will become delinquent, severely 18delinquent in the future because they just lost their 19job yesterday So rhcy don't have to be delinquenttc 20be approved. 21Q. Did I understand you correctly to say that to 22your understanding the Obama program can involve 23principal reductions, but the FD[C program doc s not? 24

A. Yes. And you said can . You didn't say 25


always. Possible.Q. It's possible.A. Okay.Q. I think you told me last time Sheila Bair was

very much against principal reduction?A. And stilli s. yes.Q. But she doesn't call the shots at Onewest

anymore?A. Shc docs no tQ. Whcn it comes to principal reductions, or a

principal reduction in this case. ultimately that wouldfall to Deutsche Bank to decide whether they want todothat, correct?

A. Well. since Deutsche Bank has. and the PSAtold us to service this loan diligently as we would ourown loons. then they are delegating that authority toOneWest Bank. Today a Deutsche Bank loan would gothrough an FD[C model. lt would not go through a HAMPmodel because today it' s justthe Fannies and Frcddicsthat are requiring that it is happening on. That willchange . It's justthey're not there yet.Q. SO it 's safe to say that today Onewcsr is notdoing any modifications that involve principalreductions ?

A. I didn't say that.Page 60

Q. Well, that's why I asked.A. I have seen loans in thc HAMP program where

borrowers have rcccivcd-. or they were offered . \don't know if one actuall y accepted, accepts the plan.but they were offered one that had the principal. Andit's not really a principal forgiveness . It' s there .It's kind of just the borrower is making a payment , ofCOUTSC. on a less. you know. their payment is much-is greatly reduced because that piece of the principalbalance , that's not necessarily forgiven . It's kind ofju st moved into thc shadows .

Q. lt's capitalized into the loan?A. No, it's not even capitali zed into the loan.

It's like a second loan. And ifthc borrower ever paystheir loan of f, they have to pay back that money, butif they're just going to live in the house forever.they would always be making that lower payment. That 'smy understanding. That's my loose understanding.Q. Is that an option for any loan owned byDeutsche Bank?

A. Today. no, but it could change tomorrow. I'mgoing into unchartered waters again. When Obama cameout with this plan, thc HAMP plan, it was required thatany Fannie and Freddie investor loan. it had to abideby these rules. It has taken time for the other



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Page 61investors to be a part of the required. 1

OnewestBankwants to help the borrowers stay in 2their home. Obviously, you know,OnewesrBank is no 3in the business of taking homes back . But we do have 4some investors, and I can say this beeausc of some of 5the mediations I've gone where Deutsche Bank has been 6the investor, where the loan can't go through the HAMP 7plan , it has to go through the FDIC plan, which still 8does not approve principal reductions. 9

The meeting that I was in yesterday morning is 10that we are close to gel ling to a point where all the 11investors will be included in the HAMP plan , but I 12don't manage that process and I don't have any say-so . 13I'm just waiting. 14Q. And the loss mit department is a separate 15department from yours? 16

A. Yes. 17Q. However, you would become aware ofa 18successful loss mit program or plan -- 19

A. Yes. 20Q. -- because it's no longer in foreclosure; is 21that right? 22

A. Yes. 23Q. And you have personally attendedmediations 24

at which loan modifications were entered into? 25Page 62

A. Well , not entered into, but discussed. You 1know, when we go to a mediat ion in Florida, the 2required mediation, the mediator. of course, wants to 3know what it is we can do. We come with everything 4that it is we can do. So I know that Deutsche Bank, 5because of one of these mediations, those loans are 6still going through the FDIC model. 7Q. And the way you described it before, is that 8something that Deutsche Bank can sort of opt into and 9say , [ want to do the OOOma program? 10

A. Deutsche Bank could, yes, Deutsche Bank 11could, any inves torcan do that and we would follow 12suit. We do have some inves tors, for example, Lehman 13we have a group of their loons that they service that 14they want us to treat their loans through the HAM]> 15program. 16Q. Do you know how OneWest get s paid for the 17service of servicing the loans for Deutsche Bank? 18

A. No . 19Q. You don't know ifit's a percentage of the 20pool or anything like that? 21

A. No . 22Q. Who would know that at Onewest? 23A. Someone in secondary marketing. 24Q. Do you have a name? 25


A. I want to say Aaron Wade , but I'm not sure ifhe's there anymore. It's in Pasadena . I 'm too busywith all my foreclosures an d bankruptcies.

MR . ICE: I don't know if you, I'm aboutto move to another exhibit, I don't know ifanybody wants to take a break?

MR . MANCILLA: I 'm all right.THE WITNESS: I'm okay .MR . ICE: Keep going .

BY MR . ICE:Q. Okay . Take a look at Exhib it B to yourdeposition. Do you recognize that document?

A. Yes .Q. What is it?A. It is the Affidavit of Debt in the Machado

loan, on the Machado loan .Q. Is that your signature on the final page?When I say f inal, there's a service list that's

attached to my copy , but the final page of theaffidavit?

A. Yes .Q. And thai's the long fonu signature?A. Yes .Q. The old way yo u signed yo ur name?A. Yes .

Page 64Q. Do you still use this old form of signature

for anything?A. No.Q. Okay. Do you know who prepared this

affidavit?A. Someone at the firm.Q. The law firm?A . The law firm , yes.Q. In this case it would be Florida Default?A. Yes.Q. How do you know that?A . Because I'm sit ting here with Joe and I know

I didn't t ransfera file in the middle ofaforeclosure .Q. Okay. And you see down at the bottom thefile number -A . Yes .Q. -- and the doc lD number?

Are you familiar enough with these documents torecognize that as a Florida Default doc number, a menumber?

A. No.Q. You don't know one way or the other?A . No .Q. Do you know why the numbers are treated there



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Page 65in big, bold letters with the asterisks? 1A. No. 2Q. Is that some sort of computer scanning 3

prOCL"SS? 4A. I have no idea, because when I get it, it 5doesn't have that on it. Oh , yes it does. Ycs, it 6docs. I'm sorry. Sorry. 7

Q. In paragraph I - well, before I go into the 8specifics, again , I know we covered some of this when 9we were talking about Lost Note Affidavits and things 10like that, but just to be clear, the proCL"SS here is 11the firm, the law firm, perhaps the affidavit, correct? 12A. Based on data that was providedto them from 13

our system of record. 14Q. Right. And they have access to the computer 15

screens to fiJI in the numbers in the affidavit? 16A. Well , we actually give them copies of 17computerscreens, yes. 18Q. SOthey don't have +. they C1Ul'tjUSt log on 19

and sec the same computer screens? 20A. No, they can't. 21Q. The numbers that are on the computer screen 22

come from where? 23A. Okay. So when the file -- when the attorney 24

is about to do this part in the process, LP5 will 25Page 66

upload certain screen prints that we've already -. 1(Thereupon . there was a brief pause in 2

the proceedings. beginning 2:26 p.m. resuming 3at 2:48 p.m.) 4(Thereupon, the designated answer was 5

read back by the Reporter.) 6THE WIlNESS: -- have told them need to 7

go with each packet every time a firm is 8getting ready to do an Affidavit ofDcbt. 9And then it's from those screen prints that 10the firm can fill in the accurate 11information, the accurate information. 12

BY l'v1R . ICE: 13Q. SOthe screen prints aren't physically sent 14to them, they're just on another system that they can 15pull up the image? 16A. Both . Well, I don't know. Actuall y, I don't 17know . You definitely -- they definitely can pull up 18the image, because when I was preparing for the case. I 19copied the images and-. but I'm-. that makes the most 20sense. I 'm sure they're not printing the things of f 21the system and mailing them. 22Q. Okay. The numbers that are on those screen 23prints arc both calculated numbers and input numbers, 24correct? 25


A. What are we talking about?Q. Well , I was trying to talk about all of them.A. The numbers usually come straight of fof the

screen print , so they're not .+can we take one for anexample?Q. Yes .A. Which one do you want to take?Q. PrincipalA. So that' s an easy one. That's just coming

straight 00' from the system and there's no calculationinvolved.Q. Well , that's not original principal. That's

principal still owing, correct?A. Right.Q. SOat some point the computer has to subtract

whatever payments have been made?A. Oh , see , that's what you meant. Okay. Whenyou log onto the system and look at this loan, just at

a general information screen, what you will sec is theunpaid principal balance. 50 the user doesn't have tocalculate anything, it's there.Q. Oka y. Someone originally had to put in the

amount of the original principal balance, the originalprincipal of the loan, correct?

A. When the loan boarded?Page 68

Q. Yes.A. Yes.Q. And by boarded, I assume you meant it was putinto the system because it became part of OneWest's

servicing responsibility?A. Yes. And I don't know that someone manually

did it. I believe that happen s by tape.Q. How docs the information get onto the tape?A. I believe . this isn't my area ofcxpcrtise.1

believe that if we're purchasing a loan, theinformation is provided to usby tape from the sellerand then uploaded automatically into our computersystem.Q. Okay. The original lender in this case wasIndyMac, correct?

A. I think. Let rnc just make sure. Have tolook at my papers. Because one of these we bought fromAegis. Yes, the original is IndyMac, yes.Q. SO in this case, somebody from IndyMac, who'snow Onewest, would haveat some pciut input--

A. Yes.Q. the information physically into the

computer?A. Yes, that's true.Q. And we don't know who that was now?



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Page 69A. No. 1Q. Then the computer is programmed to, as 2

payments are made and logged into the computer, to 3~ ~ l p r i n c ~ l 4

A. Yes. 5Q_ -- from the original principal? 6A. Yes. 7Q. Which requires someone else to physically 8

type in when a payment is made, correct? 9A. Yes. 10Q. Arc there any, like ifit's an electronic 11

payment or something, does it go automatically into the 12computer from the bank where the borrower is paying 13from? 14

A. [ believeso. 15Q. The interest rate, again the-. or the 16interest per diem that's calculated, the number here of 17$16,088.21, is computed from the originaltenus of the 18loon, correct? 19

A. Well, the interest would be. in thaI 20equation, it would be the unpaid principal balance, nOI 21the original principal balance. 22

Q. Right But a t somepoint , someone had to put 23in what the rate was go ing to be? 24

A. Yes. 25Page 70

Q. And then the computer docs the resr-. 1A. Yes. 2Q. -- and ca lculates what that represents? 3A. Initially, or arc we talking about if we were 4

to look at thi s today? 5Q. Right now I'm ju st asking about how these 6numbers go t onto this a ffidavit. 7

A. So we have a wo rkstation within our system of 8record that ge nerates payoff statements. That's the 9information that we provide to the firms because wc ca l 10put in an as -o f date . and then the sys tem, yes , based 11on the inte rest rates that are already cataloged in the 12system for prior months and future months will do the 13ca lculations . 14Q. Bec ause there 's a time lag to ge t these int o 15the affidavit and for yo u to sign it , the computer 16system is actually projecting ahead a lilli e bit as to 17how much interest is go ing to be due and ow ing on a 18dare in the futur e? 19

A. It depends. Let's see. On thi s one, the 20intere st is, as of 2/9, 2009, so, yes, i t was projected 21out And as long as the interest rate is available , 22meaning it's not an adj ustable, a monthly adjustable 23intere st rate , then it will do that accurately. There 24arc time s when the syst em can be offif' thc interest 25


rate is not ava ilable, depending on when th is requestis mad e, and then what the sys tem is go ing to do is usethe interest rate it has av ailable to calculate.

Q. And that's because the adjustablcs arcsometimes tied to rates that you ca n' t possibly projectinto the future?A . RighI. Right , onc e the U.S. Treasury

publi shes them , thcn -.Q. Okay . So ba sed on the se reen print , someonea t the firm puts these num bers in and then theytransfer thi s to LPS or back to Onewcat , or. pardon me ,I think you said it' s uploaded to the computer?

A. It' s uploaded back , beca use the document hasto be signed. it now goes through its -- and [ don'tknow what kind of QC process it goes through on thefirm s ide, so just speaking from wha t I know, the firmwould upload it back through LPS's system for thedocument to ge t signed.Q. And it ge ts print ed o ut in Austin for you tosign?A. It ge ts printed in Minnesota-Q. Okay . You sa id that .A . . . and gets shipped to A ustin.Q. And at tha t point you sign thi s without any

kind of your per sonal verification that any of thesePage 72

numbe rs are correct?A. There will be a sticky on it, on this . And

what I have is okay to signby the foreclosurespecialist that owns this dig it And based on that, [won't double check the numbers.Q. Do you ever double cheek any of the numbe rs?A. No. because our QC process that used to be a

[00 percentthai's now [0 percent, it has really zerolevel of error because the numbers are really corningright offo f -. no one's manuall y doing this. So Iju st look for that sticky so that I know that theperson I charged with checking it is doing what I'mexpecting them to do.Q. SOwhen the finn prepare s this, is thissomehow drawing from the bank's computer system to putthese numbe rs in here or is there a paralegal somewhereand typing these in?A. I don't know. I don't know,which is why [

have a specialist double check to make sure. I mean.they re to look at this and say, if f was doing thisall from the beginnin g, would I corne up with the samenumber. That' s why we have that double check.Bu t [ don't want to represent that errors aren't

ruadc and errors aren't caught and we don't take lossesbecause of errors.



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Page 73Q. Do yo u know whether this was prepared during 1

the 100 percent QC pha se or the 10 percentQC phase? 2A. This would havc -. the 100 percent QC phase. 3Q. SOsomeone at OneWest would have checked 4

these numbers before giving them to yo u? 5A. Yes. Let me backtrack , make sure that [ was 6

clear. A [00 percent of the time someone has to double 7check these numbers be fore I sign. 8Q. Right. 9

A. We have a QC proce ss on top of that, that 10they were QCing how many times we had to reject the 11document because the numbers were incorrect. That 12process has gone from a 100 percent to 10 percent. but 13a 100 percent of the time a specialist looks at these 14numbers before I sign. 15Q. Okay. But bot h back then and today, the 16numbers, OneWes t checks every single number every 17single time? 18

A. Back then and, yes , today. 19Q. However , yo u're not the one doing that? 20A. No. As the vice president of the department , 21

no, [d on't. [h ave employees that report to me that 22do that. 23Q. Right. And do you have any way of knowing 24who did it on thi s document ? 25

Page 74A. I don't. 1Q. In the first line yo u say: This affidavit is 2

submitted in support of Plaintiffs Motion for Final 3Judgment for the purpose of showing: That there is no 4genuine issue as to any material fact, that plainti ff 5is entitled to enforce the note and mortgage and 6plaintiff is entitled to a judgment as a matter of law. 7Do yo u see that? 8

A. Yes . 9Q. Is there anywhere in the a ffi davit where you 10

actually declare that Onew esr -- the basis for Onewcst 11being entitl ed to en force the not e and mortgage? 12

A. I'm sorry , what now? 13Q. In other words. the way I read it, that's 14

sort o f an introductory paragraph as to why this is 15being filed . 16A. Okay. 17

Q. SOmy question is, do yo u say anywhere in 18here as to what the basis is for plaintiff', which is 19IndyMae Federal Bank, FSB, being entitled to enforce 20the note and mortgage? 21

A. Being entitled to enforce . I'm looking for 22the sentence that says -- if yo u say No. I is an 23introductory paragraph , then I don't see a statement 24that categorically re fers back to the fact that OneWest 25


can enforce the note , but I'm not reading it like anintroduct ory paragraph because it's numbered.

Q. Okay. Yeah, you don't have to adopt myinterpretati on of it.

A . SO, no.Q. The question is, regardless, viewing thedocument as a whole, any paragraph, where do you givethe basi s that the plaintiffis entitled to en force thenote and mortgage?A . It's not given in this particular affidavit.Q. Even though it says that that' s the reason

that this is being given?A . It's in support of our motion, the motion.

yes.Q. Right. At the time this was signed, IndyMacBank was the scrvicer- . IndyMac strike that.Who wha t company waa-. the plaintiffisIndyMac FederalBank. FS8. correct?A . Yes.Q. But yo ur a ffidavit is talking abo ut IndyMac

Bank as servicer o f the loan. Would that be incorrect,in paragraph 2?A. I don't know tha t thar-. I think tha t's an

interpretation of whether that is necessarily incorrectbecause it doesn't the plaintiff says IndyMae

Page 76Federal Bank. [ signed in the capacity as lndylvlacFederal Bank in No.5 , so I think paragraph 2 doesn'tgo to the validity of the document. [think it's anerror. What do you call those? Scribner error.Q. Right. lt should be lnd ylvlnc Federal Bank.

correct?A. I would [ike to have seen it be lndylvlac

FederalBank, yes .Q. Because when we started this whole

deposition, you agreed with me that lndylvlnc Bank ceasedto exist in July oflas t year.A. Yes. but the plaintiffis IndyMac Federal

Bank on the document.Q. Right. So as of December 15th, 2008, when

you signed it ludylvlac Bank wasn't the service r of theloan. They didn't even exis t is that correct?A. That's right.Q. Is that something that your QC people look

for?A. It is my understanding that it is a QC point

for Fidelity LPS, yes.Q. Going on in paragraph 2, it says that you are

familiar with the books of account. What are books ofaccount?A. The system records.



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them the people who put the in formati on into thecomputer?

A. It's possible . Probably not the mortgagebroker. My best gue ss is it would have been an IndyMacBank employee .

Q_ And would that have been based on thedocuments that were physicall y signed and physicallydelivered to lndylvlac?

A. That would be my understanding, but, again,thars h I don't know the front end .

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Page 8112345676s10

Q. And when that was done, whether it was close 11to the time of the loan or a long time from the time of 12the loan. you would have no personal knowledge of. 13correct? 14

A. No. I mean, personal knowledge in this case 15of when, how. or when the documents were uploaded? 16

Q. Right. 17A. No, I don't. 18Q. You have no personal knowledge of that? 19A. Ihave no personal knowledge. 20Q_ In paragraph 4 you say: Plainti ff IndyMae 21

Federal Bank. FSl3, is owed the following sums of money. 22A. Um-um. v . 23Q_ The truth is, is that that money was owed to 24

Deutsche Bank , correct? 25Page 82

A_ I guess it depends on how you inte rpret that 1word "owed." As the servicing agent for Deutsche Bank. 2OneWest Bank would be collecting the funds. 3Q_ For Deut sche Bank? 4

A. To pass through to DeutscheBank. 5Q. And it's really the same for this foreclo sure 6

action , too . IndyMac is the plaintiff, but if you win 7this lawsuit, it's Deut sche Bank that collects the 8proceed s or the house at the end of the day, correct? 9

A . Yes. 10Q. Okay. Let's just see what's been marked as 11

Exhib it C to your deposition, ask you if you recognize 12that document? 13

A . Yes. 14Q. What is it? 15A_ The responses to the inter rogatories. 16Q_ Do you recognize the signature on that 17

document? 18A . That 's my new signature. 19Q_ The new and improved? 20

MR. MANCI LLA: Thc new and shorte ned. 21anyway. 22

BY MR. ICE: 23Q_ Arc those the only two signatures that you 24

usc? 25


A. Yes.Q. And this is the one yo u use from now on on

everything?A. Yes, except for my checkbook.Q_ And 0 11 these interrogatories you signed as

attorney-in-fact. Do you sec that?A. Yes.Q_ Who are youthe attorney-in-fact for?A. IndyMac Federal Bank.Q. Why did you not sign as the vice president o f

IndyMac Federal Bank?A. At the lime that I signed this -, doe s that

say May 29th. 2oo9?Q_ I think so.A. As of March 19th. I could only do

attorney-in -fact for IndyMac, IndyMac Federal. and FDICas recei ver, and FDIC as conservator.Q. BU at that lime it had already becomeOncwcsr, correct ?

A. Yes, but since the actionc- yes. BUI sincethe action. the plainti ff in the action was IndyMacFederal. I can still sign for IndyMac Federal asattorney-in-fact until 2010_

Q_ Who granted you the power of attorne y to signfor a nonexistent entity?

Page 84A. FDlC_Q. Do you have that powerof attorney with you?A. I do. I brought itjust for you.Q_ Thank you.A. Hold OIL I'm tryingto makesure I give you

theright one. Hold on. I'm sorry.THEWITNESS: Arc wc going tobreak

right now?MR MANCILLA: Yes_MR. ICE: Okay.(Thereupon, there WaS a brief pause in

tlteproceedings, beginningat 2:59 p.m .,resuming at 3:14p.m.)

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