poverty and homelessness and hunger. it is so important that we have to do our part, not only to continue to serve meals with dignity and respect, but to wipe out hunger. it is so important to the i am so excited about shari's leadership. i cannot have left the foundation in better hands. she has hit the ground running, and i look forward to seeing this new building come up. unfortunately, i might be complaining, because i live right next door. larry, if you could keep the noise down when you're building, i would really appreciate it. or ed least cut it off so i can sleep at night. god bless you all and thank you for coming. [applause] >> again, i want to make sure that we recognize the fire chief. hopefully we have not exceeded

the number of people in our space. [laughter] and i know we have a member from the police chief's office as well. thank you for joining us today. one of the things i also want to make sure is that getting all of this work done takes a lot of hands, a lot of people working together. i want to acknowledge suzanne sw vice-presidentift, of our board. [applause] and then i want to also ask all of the staff who are here to please raise your hands, because day in and day out, raise them high. [applause] day in and day out, they're the ones that are truly making sure that everything runs very smoothly and gets done, and we

cannot do it by ourselves. this is truly a team effort. we talked a lot about teens and putting together a winning team. certainly, this is a winning team in st. anthony's. as we wrap up our press conference today, i just want to display for you, this is our final tourre for service today. and then it will go on display. this will be the inaugural tray for our new dining room at st. anthony's in 2014. meantime, we will fill it with that final $5 million for the capital campaign. off we go. [applause] thank you. >> for those of you who would like the opportunity --

>>ç good afternoon. today. i am phil ting. çwe are happy to announce the first audit of foreclosure records in the state of california. what we startedç with, we have been facingç this foreclosure crisis for a number of years. little by little, we had çtaxpayers come in who were either refinancing or pursue foreclosures, and wanted our

assistance in looking at their çdocuments and county land records. historically, the process we have in california is a non- judicial foreclosure process. çyou do not need to go to court if you do not want to. what developed quite a while ago, beforeç security, mortgag- backed securities, fannie mae, freddie mac. it is a peer the antiquated system that has not kept up with the changes in the industry. i think what this report shows is that the system is completely broken, for us, as county recorder, the mortgage industry, the system is broken for consumers. we have plenty of laws on the books but they are clearly not being followed. equitas reviewed this together

with us. each of those records show at least one clear violation of the law. çanother percentage applied to suspicious activities. that is like backdating documents. not a violation of law, but odd when you submit documents that are backdated two yearsok prior, submitted on behalf of the agencies that no longer exist. almost every single document we reviewed of the 2405 foreclosuresç between january 2009 and november 2012 showed that. a sample of 382 documents

between -- of that total -- 2405 foreclosure sales. the main challenge we face is we want to ensure, asñr reporters, that we have a clear and transparent title process. i think we owe that not just to the taxpayers and property owners in san francisco, but we owe that to the entire state. state lawç governs everything e do. it is so important, in a state that has a non-judicial foreclosure process, that the law is followed. the reason other states have been able to pick up on these items faster is because people have to go in front of judges. they understand what all laws are and have shown less tolerance for people not following the law than here in california.

we have an issue of assignments. 75% of the assignments we looked at show the issues. for one example, we have a category of self assignments of the deed of trust. 21% of deeds of trust were self assigned. what that means is the lender of record is not signing it over to a new lender. it is the new lender signing the document over to him or herself. it would be like me taking your home but assigning it to myself without your authority. it seems very odd that 21% of the time that occurred. obviously, that is highly problematic, a violation of the law. 85% of the time there was a substitution of trustee.

the trusty that file the notice of the fault was not the same name on the deed of trust. that means the actual trustee in charge -- almost being an independent third-party to foreclose on somebody -- was not the trustee of record. somehow, they are taking this property. if you are buying a foreclosed sale, basically, we have institutions that are saying, you are buying this, but for whatever reason we do not own this property, all you get back is your deposit. we are not saying that we do not own the property there. that is problematic. that is 85% of the time, page 9 of the reports. to give you an idea of this

suspicious activity, false claims of beneficiary status. the entity claiming to be the beneficiary of the deed of trust is not the actual current beneficiary on file with the property is sold at auction. you actually have a party that is selling a home that -- at an auction, that according to our land records, has no connection to it. you may ask yourself -- as i have, walking through this report -- how did this happen? clearly, there is no oversight. there is a process that is pretty strict, in terms of what the law says, but a complete lack of oversight. the only oversight that can happen is, if i, as a consumer, was foreclosed on, and i brought it to a court of law where they

would enforce this process. we are not saying contracts were not broken in terms of whether people were able to pay their loans or not. we are not saying whether anybody individually, parties as a whole were bad actors. what we are saying is, on the whole, california has borne the brunt of this foreclosure crisis. what we are seeing is the process of where we are foreclosing property, taking property from the county land records is 100% broken, and is not working for any of us at this point. çwe obviously know there was a recent settlement from the attorneyç general's, 49 states across the country. çobviously, we think it did a good job of getting retribution back for homeowners who were

perhaps victims of this process. obviously, no settlement can encompass everything, which is impossible. what the settlement did not do is look at, in the future, what this foreclosure process should look like in the state of california. what we have for the first time is hard data. in the past, we have anecdotal evidence. a homeowner here or there, institution here, home loan there. we have statistical analysis now of records in our county that point out the level that the law has been followed or not, in a variety of texts. we hope this report will be used by policy makers, by attorney general's, city attorney, to be looking at future action, as well as the industry, to look at

what theñr process should look like. i am now going to ask lou to walk through the report. by the way, these are all the documents that we reviewed. >> that is a very small sample. from this, we produced about 4000 pages of analysis that we condensed into this 20-page report we are releasing today. good afternoon. lou pizante. i am a partner at equitas. my name is on the back of the report as well. there has been a lot of anecdotal evidence about

foreclosure irregularities, as bill said. where there is smoke, you naturally expect to find fire. what thisç report uncovered was an honor inferno. what we did was we looked at 60% of foreclosure sales over a three-year period and focused on six areas. we actually have that. we look at documents that were recorded at the county recorder's office and we also looked at public information federal filings, such as sec filings in connection with securitization. the first page is an introduction that just gives some summary statistics. then we go into each area and talk about the topics in each area and explain them with the knicks -- exception rates that we found.

çgenerally, assignments, loans- in today's modern market, they are sold to various parties. most of them are ultimately securitized. every time there is a sale, the seller assignsç to the buyer a document. we look bad relations with that assignment. we looked at disclosure requirements that must be given to the borrower. we looked at substitutions. when a foreclosure is initiated, generally, there is a trustee. the trusty oversees the foreclosure process. when foreclosure is initiated, there is substitution of the original trustee to a firmç tht specializes in 0 closure defiled services and processing. there are regulations around that because only one entity can be in charge of the process. we looked at the notice that had to happen, timing and notice

requirements, before a trust sale, foreclosure sale happens. we then lookç at suspicious activity, robo-signing, backdating, suspicious signatures. and then we looked at the electronic registry maintained by the mortgage industry that tracks loans. we tracked what was in the county record to see if there were conflicts. we found a significant number of complex there. 58%. -- conflicts there. we go into each of these in the report and talk about what we're looking at. we try to explain it in plain english, showing you the different exceptions within each of the subject areas. not only did we findq issues and 99% -- irregularities in 99% of

loans. 84% appeared to be clear violations of law. but it was not that we found one issue in 99% of those loans. two-thirds of them had four or more issues. four of irregularities, violations of law, or more. more than 75% of the loans had violations within three or more subject areas. it is not that we found -- these loans did not have one thing wrong with them. they had many things wrong with themç across different subject areas, across different parts of the foreclosure process. that goes further to substantiate the conclusion we made, which is that the foreclosure process in the merit -- california, which is basedçn laws dating back over 100 years,

no longer adequately regulates the current mortgage market. these laws were promulgated before there were things like securitization and real estate capital markets. we are not here to indict the mortgage industry or to say that all people who lost their home did not deserve to lose their home. certainly, there was a reckless borrowing. there were good actors with in the mortgage industry that have just been caught up in a situation where the boom in production of the originations could not stand the ultimate pressure on the for closure system in california once the boom turned into a slump. >> thank you. i know we have a lot of information and a lot to digest.

it has taken me quite a while. i am happy to openç up to questions. >> you sense this data is representative of california. the cost of properties in san francisco, was that a factor, too? >> what we are looking atç is e process of foreclosure. we are actually having fewer foreclosures in san francisco thant( riverside, sacramento, stockton. weç did look at some of the higher propensity for closure areas, to look at that, but i believe these are factors that not only act locally, but nationally. when we have seen is, there were studies done in massachusetts, north carolina, where similar

trends have happened. what we are seeing is literally the industry following -- not followingç certain laws in plae in this foreclosure process. you see people saying they represent an agency they do not, and work for another agency. one of the many examples is if i were acting on behalf of the new lender but said i was working for the old lender that is now bankrupt, saying that they sign the property over to me. that would not happen if i asked for your home. ok>> is the pure volume of foreclosures a factor in this? >> and that might be one of the reasons. i do not think the system was prepared for this level of volume. what we are seeing across the country, in terms of real

estate, is not a cyclical bust. there are ups and downs,ç just like any economic situation. this is a huge correction, an industry correction. this is not just a regular cyclical correction. for example, to give you some numbers, during the dot com bust, we had 2400 people applying for assessment appeals. two years ago, we had 6600 people file. we are doing about four ti dot com bust. >> about the irregularities, i wonder if it is something that is prosecutable? >> i am not a lawyer. clearly, we see across the board was that were not

followed. i think it will have to be up to our local district attorneys, attorney-general to make surseer they believe this is prosecutable. >> and why does this matter if you can not validate the sale? >> these transactions, based on many of the laws that were not followed -- >> if nothing can be done about it, if you're law -- if your office cannot write a letter to somebody and say that the filing was incorrect, the sale is not valid, therefore, you do not own the property -- >> absolutely.

we cannot do is help people who may have moved away. i think we will be able toç hep people who currently own çproperty in san francisco, trying to get loan modifications, in the middle of foreclosure process. çfor the first time, there is real evidence to demonstrateç w ñrbroken the@]emq we really need sacramentoç, our legislature, governor, and legal entities to look at the heart of what this intermission says, to see what the next steps are. no question, there needs to beç an organizational restructuring of thisç industry because it is not a market >> [inaudible] your office is going to do when they come in with papers. will you be looking for certain things, telling people involved that this is incorrect?

>> we have legislation that we sponsored last year. what it does is solve many of these issues. we need to record all of these various documents a( áru@&e%ei time during the foreclosure process. it doesñr not mean that every ln needs to do this. for those that are not facing problems, we will not force the industry to do it. but if you are going to foreclose on people, you should be able to fill in these gaps. we are in conversationç with te industry to figure out how we can do that soç that it does nt skyrocket cost for lending. i do not think we want that for home owners, butç also, we cano it so the detective do notw3 hae to sniff out these things. there will also be other legislation we will be looking at, whether we co-sponsored it

orç not in sent to cisco, to se if it can address these other issues. >> certainly, some of these violations result in foreclosure sales that may be unavoidable, but their real purpose of this was to try to quantify the nature and frequency of issues in california and san francisco generally. çwe are improving the market. fundamental to this is the notion that a clear chain of title, integrity of public records, isç essential forç a stable housing market. until we correct that, we have no way of insuring this crisis does not happen again in the future. there are other agencies been

that are going to look at this from the press editorial standpoint. çour viewpointñr is really froa policy standpoint to stop public this from happeningiwç again, ad to modernize california real- estate laws to reflect them. ç>> could somebody come to your office and say, iç went through foreclosure. i understand there isçñr some paperwork. do i hire a lawyer and go through this? >> that is how a lot of this started. people would come inç for a refinance, they could not find their original lender. çthey did not know who owned te loan. they just asked us to print out the documents for us. there are many gaps. ççif anybody wanted to, they e welcome to.

they can go through their records, and beer have been to present. they can decide what other future action to do. while i feel bad for the folks that may have faced in ballot foreclosures, this is all about moving forward. we have hundreds of thousands of homeowners in san francisco today. we need to make sure, moving çforward, that the process is transparent and fairç in the future. right now, this report demonstrates that it is not. >>ç do you see this being doney a private financing agency? what kind of violation to you see? >> multiple violations from multiple parties of parties in

the value chain. we certainly had issues by a purported beneficial interest holders. entities that had reportedly purchased the loan and were entitled to the loan. in many cases, they do, but there were not able to document. we also saw. laird is by the servicers and trusties, the entities that specialize in tearful services and foreclosures. -- the fall services and foreclosures. çyou asked earlier, is this jut a matter of the volume of foreclosures? it is also a matter of the bottom of originations. the production machine was running at 126% of capacity. they were having some problems documented and archiving documents.

when things turn bad andç the have to recreate that chain of title and you have to lookç at the documentation around the assignments, who owns the loan, some of the documents were missing or was not prepared. çit does not mean the sale did notç happen, but there is no evidence of it. >> are we talking about criminal problems, or are we just talking about other problems flowing over -- >> sometimes there is no çdistinction. if you have intent to compromise the integrity of the public system, that is criminal. >> [inaudible] >> that is an excellent question. that is one question i asked as we were going through this. are these minor violations, is

this is sort of jaywalking, or is this much more serious? i think what you see is a series of violations where partiesç ae been in three parties they are not. -- pretending to be parties they are not. it is like if i sign your home over toç myself, using my signature, but -- attending tö be you. we saw that over and over again we have parties representing affiliation with. ççi'll let you use your judgmt to determine the severity of that. çmany of these actions, if not all, render many of these foreclosures invalid. again, we are not saying whether or not thesi