Warning: this is a long, long post. Please be patient, absorb the information presented, and weigh in with your opinion if you like. And JOIN the Yahoo group if you are a victim of Fairbanks; your participation (or lack of) is being monitored and used to generate Fairbanks propaganda!
What a difference a few months can make to some people's ideals. Craig and Brian, formerly known as consumer advocates for victims of Fairbanks Capital, now seem to be the strongest of Fairbanks supporters!
There is much fanfare surrounding the "fact" that Craig and Brian are "unpaid by Fairbanks". How are these two living if they are unpaid?
Brian is farting around building houses for Habitat for Humanity (AKA PMI) and rubbing shoulders with Haughton. And writing "positive PR for PMI". Craig seems to be hiding out in Maryland, spewing out pro-Fairbanks press releases!
If these two folks have figured out how to live in today's society with NO MONEY, I wish they would share their secret. That would render the whole Fairbanks issue immaterial. Meanwhile, I have to assume that they are receiving funds enough from somewhere to at least pay their electric bills.
The letter below was written in November by Craig Kenney to Roger Haughton (link is provided for verification purposes to ensure that no changes have been made to this document by me):
Http://www.conti-fairbanks.com/PMI-Haughton-FOR-RELEASE. Doc
W. Craig kenney
November 19
Via federal express
Mr. W. Roger Haughton, CEO
PMI GROUP, INC.
3003 Oak Road.
Walnut Creek, California 94597-2098
RE: Fairbanks Capital Corporation
Dear Mr. Haughton:
As a concerned shareholder of record of PMI Group, Inc., and in the sprit of Sarbanes-Oxley Act of I would like to bring to your attention my concerns surrounding your majority ownership of Fairbanks Capital Corporation as well as the 120 million dollar outstanding loan. As I am sure you are aware the Sarbanes-Oxley Act requires that you fully investigate allegations of corporate wrongdoing. Failure to do so could involve civil and criminal penalties.
I have been investigating the business practices of Fairbanks for the past two years via my website www.conti-fairbanks.com. The behavior and conduct of this company is outrageous and I feel it is time you address the issues and justify your at risk financial involvement. The current mountain of State and Federal borrower litigation is very alarming. It is not out of the question that The California Attorney General, as well as the AG's of other states, may join the recent California Class Action of Anders, et al v. Fairbanks Capital Corporation. The San Francisco law firm of Jenkins and Mulligan is representing the Plaintiffs. Mr. Mulligan was the lead Plaintiff's counsel in the successful action against First Alliance which resulted in the liquidation of the company and was involved in the recent CitiFinancial Mortgage and Household settlements.
Just consider the economic impact of the three aforementioned high profile settlements on the sub-prime lending industry and the resulting loss of shareholder equity: First Alliance over $70 million, CitiFinancial Mortgage over $210 million, and Household over $550 million. These three settlements alone represent more then three quarters of a billion dollars in lost equity. There are fighting similarities between the allegations brought against these three companies and that of Fairbanks. Most likely Fairbanks would not survive a comparable settlement. As a result, I believe PMI's investment in Fairbanks is at great risk and your continued support of Fairbanks is inappropriate. Additionally, your involvement in Fairbanks could expose PMI to shareholder litigation.
November 18
Page Two
Learning what I have about Fairbanks in the past two years, including their operation of shadow companies owned by Fairbanks and/or their corporate officers, are the topics of a massive amount of State and Federal litigation. Although these ancillary activities are profoundly profitable, the courts may find these shadow companies to be highly illegal. I would also question how the revenue derived by companies, including RRReview, Mountain West Real Estate, ALTA, and NSF of Atlanta, is being accounted for, exactly where the revenue is shown and who may be personally profiting.
NSF of Atlanta, ALTA and Keystone are three additionally named entities together with several un-named entities which we believe Fairbanks may have a concealed ownership in for the purpose of providing services such as title work, title insurance, and property rehabilitation. I believe Fairbanks' senior officers regularly accept high value incentives including airline tickets purchased with cash, hotel accommodations, fishing trips to Alaska and other entertainment items from title insurance providers and others. Additionally, I believe Fairbanks is provided zero cost employees by vendors. These things of value could be a clear RESPA violation, and depending on the total annual value could present an IRS reporting issue. Fairbanks' horrific mark-up of forced place insurance premiums is also the topic of litigation. A public statement made by Bill Garland, President of Fairbanks, indicates they retroactively apply forced placed insurance premiums to borrower's accounts. I am sure you recognize the potential issues raised by making insurance premiums retroactive
RRReview is nothing more than an Internet website, which is owned by Fairbanks, and is operating from a fictitious physical address in Hatboro Pennsylvania. It appears it was designed to create the appearance that the property valuations and appraisals are being preformed by a neutral and independent third party vendor. Whereas the real estate agents who are sub-contractors to RRReview, and who are performing the valuations for RRReview, may be unbiased, the fact is the requests made for property valuations are originated by Fairbanks' employees and then go directly to the RRReview website. The completed valuations are then returned to Fairbanks' employees though the same website. This process allows unconscionable and concealed markups on BPO's and appraisals which borrowers are forced to pay.investors also pay these marked up fees on a routine basis. I believe many times the borrower and investor are both charged for the same BPO that in turn double the excessive markup. Many asset purchase agreements relieve Fairbanks of the requirement of having to pay servicing advances to their investors when BPO's come back near or below the unpaid principal balance of the loan. I have documented proof of a property with a market value of $1,200, 000.00 and where the BPO's consistently came back at or near the loans unpaid principal balance of $350,000.00. It is a short leap to conclude that the RRReview system allows for internal manipulation of property valuations, a process that is very detrimental to investors who need to accurately manage the collateral protecting viability of their loan portfolios.
November 18
Page Three
I believe that Fairbanks may be using the understated valuations created by RRReview to allow them to buy back foreclosed properties at auction, take their unearned fees off the top, and give the investor what's left over. It appears Fairbanks then resells the properties at a great profit. This process not only harms the investor but at the same time robs the borrower of excess equity. I have many examples where borrowers have been robbed of their equity. One recent example involved a Michigan homeowner who had an unpaid principal balance of $89,000.00. The property sold at auction for $88,000.00. I suspect Fairbanks deducted about $7,000.00 in fees (plus real estate commissions) leaving about $77,000.00 for the investor. It appears that two weeks later BankOne sold the house for $131,000.00. I feel the borrower's negligence in this example caused a justifiable foreclosure, however I am not sure that the borrower's actions justified his loss of equity.
Mountain West Real Estate is another shadow company that causes me great concern. Mountain West requires the selling agents and/or brokers of foreclosed properties to kick back 1% of their sales commission. I have evidence that this fee splitting is not reported on the HUD disclosure statements at settlement which is a clear RESPA violation.
I have documented proof that Fairbanks applies between $1,000.00 and $5,000.00 in legal fees to a borrowers account when the borrower is between 30 and 60 days delinquent. Borrowers are forced to pay these fees as part of bringing their loans current. The issue here is that no legal fees have been incurred by Fairbanks at the time the borrowers are required to pay them as a condition of bringing their loan current. These legal fees far exceed the statutory maximums allowed by most all states. Additionally, most judicial foreclosure states and many non-judicial foreclosure states require that a court approve all legal fees in conjunction with foreclosure actions. The fact that many of these legal fees are applied to a borrowers account long before a foreclosure action is even referred to outside counsel and obviously long before as formal foreclosure action is filed with the court, makes this practices even more egregious.
I have what I believe to be documented proof involving a Missouri borrower where it appears that a loan document was altered and the original due date for the first payment was changed by six months. The loan document in question was produced by Fairbanks who sent it to their foreclosure law firm, who in turn sent it to the borrower's attorney. These sorts of actions cause me grave concern regarding the ethical behavior of Fairbanks as well as that of their foreclosure attorneys.
I fully realize that companies such as Fairbanks are necessary evils in what has become a very complex playing field. Unfortunately many borrowers leave lenders with no option short of then foreclosure and the system must have an efficient method of liquidating hopeless loans. However no matter what the task, it needs to be preformed both legally and ethically.
November 18
Page Four
The question is simple: When a borrower falls 30 to 90 days in the arrears he or she is naturally obligated to pay 100% of the of P&I due, as well as all late fees, in order to bring the loan current. It would not be unreasonable to ask the borrower to pay a reasonable fee that would allow the borrower to enter into a workout or forbearance agreement. Typically a borrower owing two $600.00 payments, plus late fees, is offered a forbearance agreement, but not before Fairbanks adds thousands of profit motivated and unearned fees. Therefore rather then having to pay a hundred dollars or so over their regular monthly payment for the next six months to successfully complete a forbearance agreement they are required to pay as much as three to four times their regular monthly payment.in this situation a cash strapped borrower is doomed for failure but nonetheless enters into the agreement under the threat of foreclosure and is lead to believe the fees are permitted under the terms of their note. Fairbanks also adds a hold harmless clause to the forbearance agreement which further robs the borrower of their rights and hinders their post agreement remedies for Fairbanks' wrongdoing.
Jay D. Gurmankin of the Salt Lake City law firm of Holme Roberts & Owen LLP is the outside general counsel for Fairbanks. Mr. Gurmankin's wife, Pamela, is a senior officer of Fairbanks. My website fully documents Fairbanks' purchase of approximately 80,000 loans from CitiFinancial Mortgage in April. It appears from the documents that Ms. Gurmankin played a central role in this transaction while physically in Tampa Florida. It is further my belief that this transaction could represent about 80,000 RESPA violations. As this issue continues to be litigated, a conflict of interest could arise surrounding Mr. And Ms. Gurmankin's relationship with Fairbanks. It appears that Mr. Gurmankin's priorities favor his personal economic goals rather then resolving issues for his client.
My final concern relates to late and improper posting of payments. I appears to me, based on the information gathered, that Fairbanks has a pattern and practice of posting payments late or not posting them at all. The positive effect of this problem to Fairbanks' bottom line is obvious. The question is how they do it. I believe the answer is quite simple. They know the system is broken and allow it to remain broken. This problem is also compounded by poor customer service.
I have information from thousands of borrowers who claim the average hold time when calling Customer Service can exceed 45 minutes. When a borrower does finally connect with a live person they are most often transferred to a dead end voice mail or disconnected entirely.
All of the above issues will continue so long as Fairbanks treats the cost of borrower litigation as the cost of doing business.
November 18
Page Five
In conclusion I would like to quote the Judge's opinion in the mater of Maxwell v. Fairbanks Capital (United States Bankruptcy Court, D. Massachusetts - No. 00-14283-jnf, adv. 00-1568):
Nevertheless, Fairbanks, in a shocking display of corporate irresponsibility, repeatedly fabricated the amount of the Debtor's obligation to it out of thin air. There is no other explanation for the wildly divergent figures it concocted in correspondence with the Debtor and her agents and in pleadings and documents filed with the bankruptcy court.
I believe it is clear that the behavior of Fairbanks Capital Corporation is contrary to PMI Group's key mission of promoting home ownership.
Off balance sheet assets held by publicly traded companies are now under the microscope. No longer can publicly traded companies take the position of it's making money so we don't care how they make it. My website is visited regularly by one or more people at PMI. As a result you have been technically on notice as to what I believe are the unethical and illegal practices of Fairbanks for more than a year now. I realize that PMI's investment in Fairbanks is relatively small; however the Sarbanes-Oxley Act does not measure its penalties in the dollars involved..
I respectfully request that you investigate these allegations. I further request that you contact me in writing within 10 days of receipt of this letter with a comprehensive outline of the steps you plan to take to address the issues and include a timetable for doing so.
Very truly yours,
Enclosures: Inside Conti-Fairbanks.com
Cc: Senator Paul Sarbanes
Jonathan G. Katz, Secretary, United States Security and Exchange Commission
*
This is the clearest, most concise listing of Fairbanks transgressions that I have seen to date. This tells me that Mr. Kenney is fully cognizant of the wrongdoings of this company. Or was in November. Mr. Kenney mentions at least three times information gathered through the former conti-fairbanks site, from victims of Fairbanks.
Mr. Kenney seems to have had a change of heart on this issue, demonstrated by the press release dated July 15 (keep in mind that this only a 7-8 month period). The link for this release is:
Http://www.borrowerhelp.com/BH-PressRelease071503. Pdf
July 15
To: all media
For immediate release
Re: Fairbanks Capital Corporation
For a number of years, we have helped lead the way in bringing the issues facing borrowers to the attention of state and Federal regulators through our former website, conti-fairbanks.com. We garnered a reputation for being highly critical of the techniques of Fairbanks Capital. With that goal having been accomplished, we have now directed our attention to helping in a far more effective way.in early June of this year, we made an agreement with Fairbanks whereby we would work together to resolve the problems, which were the subject of numerous media reports and had caught the attention of The Federal Trade Commission and The Department of Housing and Urban Development.
The overriding goal of any "consumer advocate" is to insure that consumers achieve resolution of their issues; in this instance, those issues involve homeownership. Here, we are not dealing with improper late fees being added to cable-TV bills, being overcharged for useless diet pills, or finding a $9.95 fee wrongfully charged by a credit-card company. Class-action law suits may, sometimes, be effective tools in these sorts of cases because they punish the wrongdoer and can give each class member a few dollars in recompense. Such suits, also, make a great deal of money for the lawyers.in some cases, those lawyers can collect scores-of-millions of dollars in legal fees, leaving ten or twenty-dollars for each "class member".
In our view, the issues facing Fairbanks Capital and their customers cannot be solved through litigation. It is even possible that the continued burden of needles litigation could cause Fairbanks to fail as a viable business. We know that the failure of Fairbanks would not be in the best interest of their customers. A failure may bring joy to a few borrowers, however that joy would be short lived. The result of such a failure is absolutely predictable: The subject loans would simply be sold to another servicer, with all the mistakes fully intact. Not a single borrower would receive even a glimmer of hope that their problems would be satisfactorily resolved.
Fairbanks' principal shareholders have. The original founder and CEO of Fairbanks - as well as several layers of top management - have been removed, in the last 60 days.
July 15
Page Two
The new management team, under the skilled leadership of Brad Schuster and Jim Ozanne, are committed to making Fairbanks work to the benefit of all concerned, and to bringing a new level of quality customer service to the mortgage-servicing industry. We fully support their efforts and believe the task can be accomplished. But, we also recognize that it will take more time to completely refocus the company than anyone involved will find entirely desirable.
On June 4, a YAHOO message board devoted to Fairbanks began.in that time, there have been about 600 postings. However, all of those postings have been made by fewer than 50 people. Another highly visible complaint website has collected over 800 complaints in more than a year. All of these numbers must be seen in the context of the fact that Fairbanks services more than 525,000 loans. We are certainly not attempting to diminish the importance of the fact that Fairbanks must continue on its responsible path toward equitable change. Nor, are we attempting to put a spin on things because we are now working with Fairbanks for the benefit of their borrowers. Our mission is, was, and will continue to be to protect the rights of borrowers, and to help ensure that they are treated fairly.
As we monitor the progress of the very positive changes that we see now taking place at Fairbanks Capital, we will continue to apprise the public of our views in the matter. Fairbanks knows full well of the potential dispositive results with respect to our monitoring of their customer-service practices. We now believe that the company is acting in absolute good faith, but if we, at anytime henceforth, were to determine otherwise, we would be the first to call attention to that circumstance.
Fairbanks has asked its customers-and those agencies that regulate and rate its performance - to give the company a fair chance to prove that its current efforts will prove worthwhile. We believe that both the company and its customers deserve that opportunity.
Contact Information:
W. Craig Kenney
BorrowerHelp.com (formally www.conti-fairbanks.com)
Post Office Box 925
Glencoe, Maryland 21152
Fax: 410-472-4774
Website: www.borrowerhelp.com
Email: [email protected]
*
These two documents must be read together to demonstrate the full about-face that Mr. Kenney seems to have undergone. No spin my Aunt Fannie; this guy is spinning so fast that he is dizzy and attempting to make us dizzy, too! And the fact that he keeps referring to we and us means, I suppose, That Brian is in agreement with this pile of bull-hockey! How is it that Fairbanks collection practices are suddenly "allegedly over-aggressive"? And all mistakes are now "alleged"?
Craig seems to think that fewer visits to the Borrower (un) Help site indicates that there are fewer complaints. Hmmm, could it be that everyone is sicked-out over Brian's oh-so-sweet propaganda for PMI and it's Habitat for Humanity program? Starfish, give me a break! More likely, everyone has realized that there is no real help there and has moved on. DUH, stupid!
As for Fairbanks cleaning house, read this:
"SALT LAKE CITY, May 8 / PRNewswire / — The Board of Directors of Fairbanks Capital Holding Corporation (Fairbanks) today named Brad Shuster as Chairman and James Ozanne as Chief Executive Officer of the Company and its operating subsidiaries. Tom Basmajian, former Fairbanks Chairman and CEO, will assist Fairbanks with its constituent relations, working directly with Mr. Ozanne"..."The restructuring of the executive management team marks a new era for Fairbanks. We have an extremely talented group of executives and employees with whom I am proud to be associated. My top priorities are to augment the compliance and control functions within the Company and make certain that our investors are fully informed, " said Mr. Ozanne. "I wish to recognize Tom Basmajian for his efforts in growing Fairbanks to its present position and his commitment to assist the Company in its constituent relations."
Basmajian is still in a position of power at Fairbanks, right up there with Ozanne. The cleaning seems to have consisted of swishing the dirt around and then letting it resettle in slightly different locations. It is still the same dirt!
The real questions are:
(1) Which hapless, homeless former Fairbanks borrower/hostage will get to live in the next House That Brian Builds?
(2) How can 800 postings on a complaint forum (I assume that Craig means consumer complaints) in a little over one year be viewed by anyone, in any context, as a positve thing? That is about 66.6 complaints every month! If the ED were to put a link in a search engine inviting folks to post their troubles with Fairbanks as some attorneys have done, I imagine that the complaints might double or even triple! There are bound to be many people who have not yet discovered the consumer complaints. It would be an interesting experiment
(3) If Brian is off building houses in Oxford, Alabama and Craig is in Glencoe, Maryland, WHO is advocating? Neither one of these guys are AT FAIRBANKS. How would either one of them even know what is going on in the offices of Fairbanks Capital?
(4) How much "more time" does Fairbanks need to clean up its own mess? While we sit back and wait, how many foreclosures are being prepared/done on a daily basis? Fannie Mae is already requiring Fairbanks Capital Corp. To refund money to borrowers and rectify deficiencies in its servicing practices. Freddie Mac will not be far behind... Hud... Ftc... Fairbanks has had years of laughing all the way to the bank, and it took an "uprising" to get it this far. There is no sense in giving Fairbanks one more minute to torment and harrass their hostage borrowers!
(5) When are we going to hear of even one verifiable case of a borrower who has gotten affairs with Fairbanks straightened out? One year, two years... Never??? Those books are so messed up that an army of auditors would have nervous breakdowns trying to sort it out!
(6) And the question I most want to see answered: How much money does it take to create amnesia? How much to quell a conscience? How much to stifle ideals? And how much to buy a soul?
We will probably never know the answer to all these questions. But, perhaps Brian and Craig will see this post and think about what they are doing and saying. There is ample evidence that information gathered on the former conti-fairbanks site was used to promote the agenda of these two turncoats. And they are still trying to use websites to present "factual" numbers. What are they hiding?
Fairbanks has had its chance, Craig and Brian. Now its time for their borrowers to have a chance!
Brian and Craig are "users" and there are far too many of those in the world already! What they have done and are doing to Fairbanks victims cannot be justified by any number of "Press Releases"; it makes me sick!
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