Expert Witness Report of Zachary Allen Bumpus Filed As Ex. 28 MRS V JPM-D.E. 363

Case 1:15-cv-00293-LTS-RWL Document 363-28 Filed 03/08/19 Page 1 of 22
([KLELW
UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
S&A CAPITAL PARTNERS, INC.,

MORTGAGE RESOLUTION SERVICING,
LLC, and 1ST FIDELITY LOAN
SERVICING, LLC,
Plaintiffs
No. 1 :15-cv-00293-LTS-JCF
v.
JPMORGAN CHASE BANK, N.A.,

JP MORGAN CHASE & COMPANY, and
CHASE HOME FINANCE LLC.
Defendants.
EXPERT REPORT OF ZACHARY ALLEN BUMPUS

JULY 9, 2018
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I. INTRODUCTION
I am Zachary Allen Bumpus. I have expertise in mortgage banking as a chief financial

officer, treasurer and financial institution board member. My experience includes
managing and hedging multi-billion-dollar mortgage origination pipelines and mortgage
servicing assets and portfolios, including servicing distressed mortgage loans, as well as
managing and building operations designed to implement the best-in-class business
practices needed for corporate finance, treasury management, mortgage operations and
secondary mortgage marketing functions. My business address is Pinpoint Operations
& Strategies, LLC, 6870 Elm Street, McLean, VA 22101.
Assignment
I have been retained by Walker & Di Marco, P.C. to review and evaluate how JPMorgan
Chase Bank, N.A., et al. (“JPMC” or “Defendants”) continued practice of “robo-signing”,
as set forth in the National Mortgage Settlement Consent Judgement, announced by the
U.S. District Attorney February 9, 2012, “Servicing Standards Highlights,” 1 , and
Defendant’s servicing operations may have impacted the Plaintiff’s, S&A Capital Partners,
Inc., (“S&A”), Mortgage Resolution Servicing, LLC (“MRS”) and 1st Fidelity Loan
Servicing, LLC (“1st Fidelity”) (collectively “Plaintiffs”), purchase of specific mortgage
loans, including mortgage servicing rights, and interfered with contractual rights for those
specified mortgage loans, from JPMC.
I am compensated at the rate of $400 per hour for my time on this matter. Research and
analysis for this report was also performed by consultants under my direction and guidance.
Hourly rates for these consultants range from $400 to $495 per hour. My compensation
and that of my consultants is not determined by the outcome of this case.
Summary of Opinion Rendered

S&A, 1st Fidelity and MRS (collectively “Purchaser”) entered into purchase agreements to
acquire mortgage loans from JPMC (“Seller”). The agreements were:
a. JPMC and S&A agreed to sale of mortgage loans pursuant to an agreement dated
April 12, 2005 (“Master Mortgage Loan Sale Agreement”)(“MMLSA”) between
Chase Home Finance LLC and S & A Capital Partners, Inc.;
b. JPMC and 1st Fidelity agreed to sale of mortgage loans pursuant to an agreement
dated September 20, 2010 (“Master Mortgage Loan Sale Agreement”)(“MMLSA”)
between JP Morgan Chase Bank, NA and 1st Fidelity Loan Servicing, LLC.; and
1
http://www.nationalmortgagesettlement.com/files/Servicing%20Standards%20Highlights.pdf
(accessed 4 July 2018)
Page 2 of 21
c. JPMC and MRS agreed to sale of mortgage loans pursuant to an agreement dated
February 25, 2009 (“Mortgage Loan Purchase Agreement”)(“MLPA”) between
Chase Home Finance LLC and Mortgage Resolution Servicing, LLC.
All three contracts are collectively referred to as the “Agreements.”
It is important to note that JPMC, through its Board of Directors, executed a “Stipulation
and Consent to the Issuance of a Consent Order,” dated April 13, 2011 (“Stipulation
Agreement”, Consent Order from the Department of the Treasury, Comptroller of the
Currency, In the Matter of: JPMorgan Chase Bank, N.A., New York, NY; AA-EC-11-15)
which was found acceptable by the Comptroller of the Currency of the United States of
America. The pertinent part of the Comptroller’s findings with respect to JPMC is as
follows.
“ARTICLE 1 - COMPTROLLER’S FINDINGS (Stipulation Agreement, page 2):

. . . (2) In connection with certain foreclosures of loans in its (i.e., JPMC’s)
residential mortgage servicing portfolio, the Bank: (a) filed or caused to be filed in
state and federal courts affidavits executed by its employees or employees of third-
party service providers making various assertions, such as ownership of the
mortgage note and mortgage, the amount of principal and interest due, and the fees
and expenses chargeable to the borrower, in which the affiant represented that the
assertions in affidavit were made based on personal knowledge or based on a review
by the affiant of the relevant books and records, when in many cases, they were not
based on such personal knowledge or review of the relevant books and records;“
[Note: The practice of affiants representing knowledge and/or review where none
existed or had occurred became known in the press as “robo-signing” because
affiants made assertions automatically without sufficient consideration.]
Though JPMC neither admits nor denies the Comptroller’s findings above relating to its
mortgage servicing operations, the findings regarding (per Article 1 above) the basis of
affiant assertions, without sufficient consideration, regarding ownership of the mortgage
note and mortgage prior to releasing mortgage notes and mortgage liens or deeds of trust
that had been previously transferred to Plaintiffs is consistent with the Comptroller’s
findings. Additionally, such actions establish the Defendants’ transactional control
environment for mortgage notes and mortgages sold to the Plaintiffs.
The Agreements were executed in advance of the Comptroller’s findings and were a
product subject to the same transactional control environment the regulators had criticized
JPMC.
Pursuant to the Agreements JPMC and Plaintiffs agreed that all loans were sold “AS IS,
WHERE IS, WITH ALL FAULTS” and with limited representations and warranties.
Tantamount among these representations and warranties was that the Defendants had
provided information electronically that was materially correct and that JPMC was the sole
owner, having full right to transfer and sell the mortgage loans to the Plaintiffs. The
February 25, 2009 “Mortgage Loan Purchase Agreement” between Chase Home Finance
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LLC and Mortgage Resolution Servicing, LLC provides for Plaintiffs to purchase “closed-
end first lien mortgage loans that are or have been 180 days or more in default.” The other
two Plaintiffs Agreements were generally assumed to be for non-performing mortgage
loans, with first and subordinate liens, in default at some level. All purchases were assumed
to have been mortgage loans being serviced and recorded in JPMC’s RCV1 non-
performing database.
The Comptroller’s findings also include, on page 2, an observation that JPMC’s

“foreclosure inventory grew substantially from 2008 through 2010.” Due to this growing
volume of foreclosures to manage, it can be assumed that JPMC’s operational management
decision to add systems outside the JPMC primary mortgage loan servicing system of
record was the result of needed accommodation to better manage the specific tasks
surrounding the increased volumes of foreclosures in-process and other mortgage loan loss-
mitigation techniques available. RCV1 was one such system. RCV1 contained certain
information regarding mortgage loans in default and included partial payment histories. It
is not clear that JPMC staff using RCV1 understood who was responsible for identifying
mortgage loan assets in RCV1 that had been transferred to Plaintiffs or how RCV1
consistently denoted mortgage loans assets that had been transferred to Plaintiffs.
Because JPMC mortgage loan servicing released liens attached the underlying collateral as
security interest for mortgage-assets sold to Plaintiffs, Plaintiffs’ capacity to perfect its
security interest in the mortgage asset and collect the mortgage debt represented by the
borrower’s promise to pay, either through borrower payments, foreclosure or other loss
mitigation techniques, was diminished. JPMC’s servicing operations released liens serving
as the security interest for loans JPMC had sold to Plaintiffs. It is unclear whether JPMC’s
foreclosure, collections and other loss-mitigation teams using RCV1 were aware of specific
mortgage assets being sold to Plaintiffs. The depositions and exhibits provided for review
exhibited a focus on rapidly assigning and recording loan documents to release liens in
sufficient volumes to meet corporate objectives for loan lien releases. There was limited
focus as to due diligence before execution of lien releases referenced in the materials
reviewed. JPMC’s stated design for its RCV1 database was to manage non-performing
loans. Loss mitigation efforts on each of these non-performing loans were generally taking
multiple, independent paths in the JPMC’s corporate objectives to minimize losses. These
independent paths range from collection of payments under forbearance plans (e.g., plans
offered from JPMC collections efforts, plans offered from third-party vendors of collection
services), loan modifications offered through multiple avenues, foreclosures (sometimes
going through multiple iterations because borrowers went in and out bankruptcy over the
foreclosure timeline), borrower incentives to relinquish ownership in lieu of foreclosure
and, the issue in this matter, selling discounted mortgage loans to third parties.
Since materials supplied support the myriad of activities in and uses of the RCV1 database,
a coordinated review of each loan’s status as to loss-mitigation activity is needed before
actions were taken. Failing to coordinate the loss-mitigation activities, including selling
mortgage loans in default to third-parties, can and did confuse borrowers. In an attempt to
mitigate borrower confusion, the Comptroller required JPMC, in Article III of the
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Stipulation Agreement, borrowers with a “single point of contact.”2 The RCV1 database
is presumed to have often used to query lists for multiple loss-mitigation activities
including offering loans to potential purchasers while continuing the foreclosure or other
loss mitigation technique, confirming JPMC’s ownership before releasing the lien and/or
mortgage loan is fundamental to the selling mortgage loans. Even with JPMC’s Intact Lien
Validation Process, beneficial ownership of the mortgage loan assets transferred to the
Plaintiffs did not appear to be part of the operating procedures when JPMC RCV1
operations released liens.
My overall opinion in this matter is that JPMorgan Chase’s mortgage servicing procedures
relating to the sale of mortgages in default to Plaintiffs were fundamentally flawed and did
not provide the appropriate tools to detect when JPMC had sold a mortgage asset to
Plaintiffs and, in such cases where JPMC no longer had the right to release mortgage lien.
JPMC also did not have the appropriate tools to prevent JPMC from executing a mortgage
lien release for a mortgage asset JPMC had transferred to Plaintiffs. This opinion is based
on lists of loan units the Plaintiffs allege to have purchased and evidence that these same
loan units have recorded releases by entities other than the Plaintiffs.
II. QUALIFICATIONS
I am licensed as a Certified Public Accountant in Virginia. I am certified in financial

forensics by the AICPA. Representative engagements in the financial sectors have involved
testing, analyzing, designing, creating and implementing enhanced procedures required for
regulatory enforcement actions (e.g., OCC, FDIC, FRB, SEC and FTC), consent orders
and issuance of specialized U.S. Treasury products (e.g., HAMP, TARP). Engagements
required interpreting CFBP rules to enhance procedures and business practices that are now
designed to prevent and detect violations of CFBP rules as well as promote compliance
needed for:
a. National Mortgage Servicing Operations - to manage: i) cash remittance technologies
for performing and non-performing mortgage loans; ii) loss mitigation for mortgage default
servicing (e.g., regulatory mandates resulting from consent orders requiring banks to
implement procedures designed to remediate inappropriate, sometimes illegal, residential
mortgage servicing and foreclosure practices); and, iii) apply forensic accounting
techniques testing the efficacy of how refinance programs, both government and
proprietary, are offered (including Regulation Z, Regulation B and Regulation Y).
b. Mortgage Asset and Impairment valuations - designed and implemented regulatory
mandated to define the value of embedded derivatives for representations and warranties
made pursuant mortgage loan sales and mortgage loan servicing rights.
c. Government-Sponsored Enterprises and Government offerings - to systematically
back-test and re-formulate mortgage credit procedures, loss mitigation processes and
2
“Stipulation and Consent to the Issuance of a Consent Order,” dated April 13, 2011
(“Stipulation Agreement, Consent Order from the Department of the Treasury, Comptroller of
the Currency, In the Matter of: JPMorgan Chase Bank, N.A., New York, NY; AA-EC-11-15),
pg. 5, Article III, (3) (c).
Page 5 of 21
operational risk-management for multiple government-sponsored enterprises. Procedures

included anti-predatory lending programs, credit-risk programs and anti-money laundering
potential with TARP and TALF products.
d. BSA/AML for Large, Complex Financial Institutions - to enhance: i) customer
identification programs; ii) customer due diligence and enhanced due diligence programs;
and, iii) transaction processing, both domestic and cross-border, that include the exchange
of cash, demand drafts, wire funds and letters of credit (with procedures designed to detect
OFAC violations associated with trade sanctions and prohibited transfers of sanctioned
technology).
I have a Bachelor of Science in Business Administration and Accounting from the University of
North Carolina, Chapel Hill, NC.
I have not authored any publications in the last ten (10) years, nor have I testified as an expert at
trial or by deposition in the last four (4) years.
III. DOCUMENTS REVIEWED
I have reviewed the Complaint as presented in the:

A. Fourth Amended Complaint - No. 1 :15-cv-00293-LTS-JCF filed 04/28/18
B. Answer to the Fourth Amended Complaint - No. 15-cv-00293-LTS-RWL filed 5/11/18
I have reviewed depositions from:

A. Defendants:
1. Nationwide Title Clearing (NTC):
a. Bryan J. Bly dated 21 March, 2017
b. Erika Lance dated 21 March, 2017
2. JPMC Employees:
a. Launi Solomon dated 17 May, 2017
b. Victor Fox dated 12 January, 2018
c. Patrick Michael Boyle which includes reference to emails exchanged with Omar
Kassem, a JPMC employee, and, among others, Laurence Schneider, of Plaintiffs
S&A Capital Partners, Inc., dated 23 June ,2017
d. Omar Kassem dated 22 June, 2017
e. Jason Oquendo dated 19 May, 2017
B. National Mortgage Settlement Independent Monitor - Joseph Anderson Smith, Jr. dated 9
February, 2017
C. Plaintiffs:
a. Laurence Schneider dated 28 July, 2017
b. Brad Axel dated 11 July, 2017
c. Caroline Iacino dated 17 October, 2017
I have reviewed the purchase and sale agreements (collectively the “Agreements”) between the
Plaintiffs and the Defendants:
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A. A bulk sale of mortgage loan assets - Mortgage Loan Purchase Agreement (“MLPA”) entered
into 25 February, 2009 by Chase Home Finance, LLC. (“Seller” per cover) and Mortgage
Resolution Servicing, LLC (“Purchaser”); Nonperforming Closed End First Mortgage Loans.
B. A flow sale of mortgage loan assets agreed through a Master Mortgage Loan Sale Agreement
(“MMLSA”) entered into as of 12 April 2005 between Chase Home Finance, LLC (“Seller”)
and S & A Capital Partners, Inc. (“Purchaser”).
C. A flow sale of mortgage loan assets agreed through a Master Mortgage Loan Sale Agreement
(“MMLSA”) entered 20 September 2010 between JPMorgan Chase Bank, NA (“Seller”) and
1st Fidelity Loan Servicing, LLC (“Purchaser”).
As background for commenting on residential mortgage servicing operations, I also reviewed:

A. In the Matter of: JPMorgan Chase Bank, N.A. a "Stipulation and Consent to the Issuance of a
Consent Order," dated April 13, 2011.
B. In the Matter of: MERSCORP, Inc. and the Mortgage Electronic Registration Systems, Inc. a
"Stipulation and Consent to the Issuance of a Consent Order," dated April 13, 2011.
C. The Office of the Comptroller of the Currency (OCC) Interim-Status Report: Foreclosure-
Relate Consent Order dated November 2011 summarizing actions taken by JPMC and 11 other
national banks and federal savings associations to correct deficiencies in mortgage servicing
and foreclosure processing identified on consent orders issued on April 13, 2011.
D. Consent Judgement (also referred to as the “Joint State-Federal National Mortgage Servicing
Settlement”) alleging that J.P. Morgan Chase & Company and J.P. Morgan Chase Bank, N.A.
(collectively, “Defendant”) violated, among other laws the Unfair and Deceptive Acts and
Practices Laws, the False Claims Act, the Financial Institutions Reform, Recovery and
Enforcement Act of 1989, the Servicemembers Civil Relief Act, and the Bankruptcy Code and
Federal Rules of Bankruptcy Procedure.
E. National Mortgage Settlement Agreement (“NMSA”), 2012
F. MERSCORP, INC. RULES OF MEMBERSHIP, June 2009
IV. BACKGROUND
Local jurisdictions have managed the chain of title for real property for centuries. Prior to the late
20th century, managing this chain was accomplished generally through paper documents that
acknowledge title in the real property and, where mortgage liens or other liabilities of the real
property owner may restrict the real property, perfect a security interest in a specified parcel of
land and improvements. The paper documents are recorded and saved by the local authority
appointed by rule of law. Not much has changed as to documenting the chain of title and
evidencing any liens perfected against title; however, many jurisdictions, though far from all, are
automated in way that may provide chain of title information electronically. Nonetheless,
evidentiary support from mortgage lenders, also known as mortgagees, to secure an interest in real
property in exchange for a real property owner’s promise to repay money borrowed from the
mortgagee. This willingness to loan the money to the borrower is, in part, based on the mortgagee’s
ownership interest of the estimated value of the real property securing mortgagee’s beneficial
ownership of the mortgage note payable (i.e., the borrower’s promise to pay) and the future
payments expected, (i.e., the mortgage deed or mortgage deed of trust) on that real property to
support the real property owner’s promise to pay. So, a mortgage deed or mortgage deed of trust
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is recorded with the chain of title and demonstrates the lender has some hold over the real property
in the event of property sale or in the event of the borrower’s default.
With residential lending, the mortgagor is generally an individual borrowing money, making a
promise to repay and the lender, also known as the mortgagee, may place a hold in the form of a
lien on his or her real property until the borrowed money is repaid. So, residential mortgagors are
typically people who need only attest to who they are and their signatures are accepted. Lenders,
on the other hand, are generally corporations whose agents act on the mortgagee’s behalf to loan
money and perfect interest in the real property, also known as collateral, that supports the
borrower’s promise to repay the loan, also known as the mortgage note. So, mortgagee authorizes
agents through its corporate governance structure to execute paper documents that represent the
mortgage note agreement and the mortgagee’s lien on the real property. The mortgagee’s lien could
be in the first position or in a subordinate position as to mortgagee’s right to recover under the lien.
These agents may be either employees/officers or third-parties. Critical to this process is corporate
authority to act on behalf of the mortgagee.
When mortgage notes are held by the mortgagee until the mortgagor pays-off the mortgage, the
paperwork attendant to mortgage loans and mortgage liens is straight forward. Once the mortgage
debt was repaid, the mortgagee cancelled the debt by way of a satisfaction of mortgage or lien
release or similar instrument depending on jurisdiction and released the mortgage lien or lien on
the deed of trust. But the Federal Home Loan Bank Act of 1932 (which eventually led to the 1970
creation of Federal Home Loan Mortgage Corporation also known as “Freddie Mac”) and the
creation of the Federal National Mortgage Association (“Fannie Mae”) in 1938 with the New Deal,
expanded dramatically a secondary market for mortgage loans to be sold. Mortgagees could and
did sell mortgage notes and assign liens to Fannie Mae and Freddie Mac and use the proceeds from
such sales to make more mortgage loans. The velocity of the paper going through local
jurisdictions maintaining evidentiary support as to the chain of title for real property and liens
against that real property increased. However, there was no change to the mortgagee’s
responsibility, through appropriately authorized agents, to transfer the mortgage note (may also be
referred to as the promissory note) and assign the mortgage deed or mortgage deed of trust, with
knowledge as to the lien position, to the secondary market mortgagee. The following generally
describes expectations with mortgage loan sales and lien assignments:
When selling mortgage loans, the documents the buyer requires may vary. However, typically the
buyer wants the origination package along with an endorsed mortgage note and a recorded
assignment of the lien. the buyer requires endorsement of the mortgage note.
1. The origination package contains information to underwrite the mortgage loan
including mortgage application (e.g., Fannie Mae 1003 or Freddie Mac 65),
documents meeting the three “C’s” of lending. The three “C’s” are: i) Capacity to
repay or borrower’s regular income and asset positions; ii) borrower Character
commit to the promise to pay (e.g., credit reports and past-lending references); and,
iii) Collateral sufficient to recover the loan in the event the borrower is unwilling or
unable to repay.
2. The endorsed mortgage/promissory note may be in blank, and where so desired,
may include the original allonge that shows the trail of previous endorsements and
most current holder-in-due course.
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3. The secondary mortgage loan purchase and sale agreements typically include an
agreement or operational requirements to provide to the purchaser’s custodian an
original assignment of the lien or other security instrument and that the seller verify
that there is no break in the assignment chain (i.e., assignments should begin with
the original mortgagee, meaning the mortgagee on the Note).
A number of documents are needed to: i) underwrite a mortgage loan; ii) close the mortgage loan
with the exchange of money and promises; iii) perfect interest in the mortgage note, the lien on
underlying collateral and mortgage servicing rights (i.e., management of collecting payments from
borrowers to pay to investors); iv) sell mortgage loans and mortgage servicing rights in the
secondary market; and, if necessary, v) foreclose using the mortgage lien to recover liabilities due
from the borrower. Because the originating mortgagee often sells the loan or the right to service
the loan months after the origination of the mortgage, payment histories, monies collected to pay
taxes, interest and mortgage or hazard insurance must also be communicated and reconciled to the
mortgagee buying the loan. The Real Estate Settlement Procedures Act of 1974 (RESPA), as
implemented by Regulation X and as amended, and the Truth-in-Lending Act of 1968 (TILA), as
implemented by Regulation Z and as amended, require mortgagee’s to clearing communicate to
borrowers how and where to make mortgage payments as well as ensure mortgage servicer’s
collecting payments promptly and properly apply borrower payments to the appropriate accounts.
The volume of documents and the velocity of mortgage paper transactions caused jurisdictions to
take more time to record mortgage liens and deeds of trusts. Depending on the jurisdictional
requirements as to “Wet Settlement” or “Dry Settlement,” recording the origination of a mortgage
and mortgage lien were taking days to complete and often created iterations of trailing documents
post-mortgage settlement transactions that were then send back for assignment to a secondary
marketing mortgagee and a mortgage loan servicer. Warehouse lenders and institutions allowing
mortgages to be pledged against borrowings (e.g., Federal Home Banks), who plan to hold the
mortgage note and the lien or other security interest in mortgage note and underlying collateral for
a short period, can ease the demonstration of ownership. Because of the typical shorter time-frame
of credit risk exposure or because of additional collateral positions, warehouse lenders and
institutions where mortgage loans are pledged may allow for a blanket assignment of the security
interest and generally will ask custodians of the mortgage asset documents to keep such assets so
pledged segregated in the custodians vault in the event those assets need to be individually assigned
and recorded. But this slight ease to having to properly record mortgage documents, the acceptance
of mortgage participation certificates and residential mortgage-back securities in the 1980’s and
the enactment of the Garn-St Germain Depository Act of 1982 increased the velocity of mortgage
money and documents increased significantly enough to inspire the creation of the Mortgage
Electronic Registration Systems, Inc. (MERS) by 1995.
MERS membership-based group was designed, through the concept of nominal ownership, to
provide a quick way to transfer ownership rights to mortgage loans and/or mortgage servicing
rights 3 among several members who were either mortgagees, mortgage servicers or both.
However, again here was no change to the mortgagee’s responsibility, through appropriately
3
MERS management of the transfer of servicing (TOS) did not appear to be a concern for the
sale of non-performing loans to the Plaintiff and is not discussed herein.
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authorized agents, to transfer the mortgage note and assign the mortgage deed or mortgage deed
of trust, with knowledge as to the lien position, to the secondary market mortgagee.
MERS, a product of the late 20th century, was created in a time where national home price
appreciation had, on average for the United States, been increasing for over sixty years. Risk
management in mortgage lending and mortgage ownership became sufficiently complacent with
the knowledge that should the mortgagee be forced to foreclose on the lien, any errors in mortgage
origination, mortgage loan servicing and mortgage-default management would not eliminate
recovering from underlying collateral mortgage because house price appreciation would provide a
value cushion for the mortgagee or investor.
But, by 2007, sustained house-price depreciation on average for the United States began a crisis in
the mortgage industry that caused the federal government, to bail-out borrowers and mortgage
lenders, to enact the Making Home Affordable (“MHA”) Program and the Home Affordable
Modification Program (“HAMP”). Even though local jurisdictions recording titles and other
records becoming more automated, distressed borrower activities and nonperforming loan
transfers continued to increase the velocity of paper through the mortgage lien process.
As the number of mortgage defaults increased, the number of mortgage foreclosures also
increased. The core national financial institution regulators began operational review of mortgage
servicing activities that resulted in consent orders with the top 12 mortgage servicers in the United
States by 2011; the Federal Trade Commission was also involved in reviewing mortgage service
fees during the foreclosure process. And, MERS, being questioned as to its capacity to act in
judicial and non-judicial foreclosures as trustee on the deed of trust, was compelled to change, in
2009, its rules reminding members about how “Certifying Officers’ should conduct business.
Maintaining corporate governance as to who specifically could authorize transactions came into
clearer focus as home prices deteriorated and foreclosure actions were required.
RULE 8 FORECLOSURE4
Section 1. (a) With respect to each mortgage loan for which Mortgage Electronic
Registration Systems, Inc. is the mortgagee of record, the beneficial owner of such
mortgage loan or its servicer shall determine whether foreclosure proceedings with respect
to such mortgage loan shall be conducted in the name of Mortgage Electronic Registration
Systems, Inc., the name of the servicer, or the name of a different party to be designated
by the beneficial owner.
(b) The Member servicing a mortgage loan registered on the MERS System shall be
responsible for processing foreclosures in accordance with the applicable agreements
between such Member and the beneficial owner of such mortgage loan.
(c) In the State of Florida, the authority to conduct foreclosures in the name of MERS
granted to a Member’s Certifying Officers under Paragraph Three of the Member’s MERS
Corporate Resolution is revoked. Effective June 1, 2006, the Member shall be sanctioned
$10,000.00 per violation for commencing a foreclosure in Florida in the name of MERS.
(d) In the event that the beneficial owner or its designated servicer determines that
foreclosure proceedings shall be conducted in the name of a party other than Mortgage
4
MERSCORP, INC. “RULES OF MEMBERSHIP”, June 2009, page 25
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Electronic Registration Systems, Inc., the servicer designated on the MERS® System shall
cause to be made an assignment of the mortgage from Mortgage Electronic Registration
Systems, Inc. to the person designated by the beneficial owner, and such beneficial owner
shall pay all recording costs in connection therewith.
Section 2: (a) If a Member chooses to conduct foreclosures in the name of Mortgage
Electronic Registration Systems, Inc., the note must be endorsed in blank and in possession
of one of the Member’s MERS certifying officers. If the investor so allows, then MERS
can be designated as the note-holder.
Historically, mortgage servicers could expect the repayment of the borrowed money to generally
trigger the release of the lien, either through the real property sale or direct payment from the
borrower which provided funds to satisfy the mortgage; however, in the event of default, the
properly recorded lien would be used to foreclose on or take the real property and the lender then
would extinguish the lien through the foreclosure process. But the 2008 advent of national loan
modification programs and the volume of distressed borrowers, mortgage servicing became a
multi-faceted loss-mitigation effort. Loss-mitigation strategies were being executed
simultaneously and independently on the same borrower loans. Borrowers were being contacted,
in a disjointed manner, by multiple groups within the servicer regarding:
1. Loan modifications (e.g., HAMP).

2. Loan forbearance plans designed to reduce payments.
3. Signing over deeds in lieu of foreclosure:
a. Quit Claim deed where allowed by law;
b. “Cash for Keys” where borrowers were paid to cooperate with the foreclosure process.
4. Agreed upon Short-sale of underlying property to receive partial payment.
5. Both internal JPMC collectors and 3rd-party Collection Services were contacting the
borrowers regarding delinquent loan payments.
6. Discounted non-performing loan sales to third-parties.
Because of loss mitigation practices, distressed borrowers were often confused regarding where
payments should be sent, what forbearance plan was acceptable, how to modify the loan and many
other questions regarding an inability to pay as promised to the mortgagee of record. The
Comptroller’s findings manifest requirements in the Stipulation Agreement to mitigate borrower
confusion:
(3) The Action Plan shall address, at a minimum:

(a) financial resources to develop and implement an adequate infrastructure to
support existing and/or future Loss Mitigation and foreclosure activities and ensure
compliance with this Order;
(b) organizational structure, managerial resources, and staffing to support existing
and/or future Loss Mitigation and foreclosure activities and ensure compliance with
this Order;
(c) metrics to measure and ensure the adequacy of staffing levels relative to existing
and/or future Loss Mitigation and foreclosure activities, such as limits for the
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number of loans assigned to a Loss Mitigation employee, including the single point
of contact as hereinafter defined, and deadlines to review loan modification
documentation, make loan modification decisions, and provide responses to
borrowers;
(d) governance and controls to ensure compliance with all applicable federal and
state laws (including the U.S. Bankruptcy Code and the Servicemembers Civil
Relief Act (“SCRA”)), rules, regulations, and court orders and requirements, as
well as the Membership Rules of MERSCORP, servicing guides of the Government
Sponsored Enterprises (“GSEs”) or investors, including those with the Federal
Housing Administration and those required by the Home Affordable Modification
Program (“HAMP”), and loss share agreements with the Federal Deposit Insurance
Corporation (collectively “Legal Requirements”), and the requirements of this
Order. 5
V. OPINION
The Defendant’s non-performing loan system was described in depositions from JPMC
employees, including Launi Solomon, Patrick Michael Boyle, Victor Fox and Omar Kassem.
Their statements were then further supported by depositions of employees at Nationwide Title
Clearing, a JPMC vendor used to facilitate document filing, Erika Lance and Bryan Bly. How
loans sold to the Plaintiff were identified and segregated in the non-performing system was not
clear per the depositions except there was a general assumption that the RCV1 sub-system
designated loans sold to other investors as “SOLD.” The exhibits included with Launi Solomon’s
deposition discuss system needs to transfer data elements regarding charged-off loans from the
Defendants’ legacy servicing systems to RCV1 and provide evidence of how required
communications to borrowers and local jurisdictions could occur. Keeping the corporate advances
synchronized with the JPMC general ledger was also mentioned as to how non-performing loans
were accounted for in RCV1. How payments linked to specific loans received, either intentionally
or by mistake, from the Plaintiff’s borrowers, insurance companies and other escrow items was
not part of the discussion. This lack of a link translated directly to the lien release issue that
impacted the Plaintiff’s capacity to seamlessly begin servicing the mortgage loans and
implementing its own loss-mitigation activities.
When inquiry was made into the process that occurred for these lien releases to be filed, Erika
Lance, an NTC employee, stated in her deposition that “[w]ell, what we do is, when we ingest
orders. They are automatically assigned an order number that is a random number. Obviously,
5
“Stipulation and Consent to the Issuance of a Consent Order,” dated April 13, 2011
(“Stipulation Agreement, Consent Order from the Department of the Treasury, Comptroller of
the Currency, In the Matter of: JPMorgan Chase Bank, N.A., New York, NY; AA-EC-11-15),
pg. 6-7, Article III “Comprehensive Action Plan,” (3) (a)-(c).
Page 12 of 21
there are no duplicates of that number, but that's how we track it through our system instead of
utilizing the loan number which can be considered proprietary.” 6
She was then asked, “So with regards to the order number, would a client such as Chase be able to
track this particular order number in TrackingLINK?” Ms. Lance replied “yes”. 7
Also in the deposition of Erika Lance, she admitted that the mail merged documents prepared by
NTC and sent to the lien release group in Monroe, LA, Q. It's the lien release group. A. That's
the group out of Monroe, Louisiana? I believe so, yes.”.8
“There is a 30-day SLA to begin the review. A Third-Party Vendor (NTC) validates the lien and
prepares the Lien Release documents. Once prepared, the documents are printed to PDF and sent
via sftp to Lien Release team to sign and notarize. The executed documents are shipped via Fedex
to the vendor. The vendor files the lien release documents with the appropriate county recorder
within in two to three business days.” 9
Erika Lance further states, “When we create them lien releases, vacations of lien releases and
vacations of modifications of mortgage, we send them via secure FTP. They print them and then
they execute them and notarize them and return them to NTC.”10
This process then continues with Chase employees executing the documents without review. As
stated by DeAndrea G. Chapman, Loan Administration, Lien Release, “I only sign the documents.
I do not do any research on the documents.”11
In a deposition, Brian Bly, an NTC employee, states that NTC did not engage in any quality control
prior to creating the documents, had no personal knowledge of the contents of the documents and
did not check to determine if Defendant owned the mortgage prior to releasing the lien.12 With
neither Chase nor NTC engaging in any quality control, there appear to be no checks on how sworn
documents were verified before execution and recording.
The “Certification of Patrick M. Boyle as to JPMorgan Chase, N.A.’s Intact Lien Validation
Process” signed (9/06/14 exhibit 43, 11/8/13 exhibit 42 of Solomon deposition) references using
CoreLogic and Decision Science as outside vendors to scrub data. Internal reviews by Chase’s
MIS Scrubs were used to review bankruptcy status, POTS Lien Release and indicators as to
excluding loans coded “repurchased, part of a note sale, or in a litigated status.” Despite this
6
See, deposition of Erika Lance taken on October 15, 2017 (Bly Tr.), at 63:3-12
7
Id.
8
9
See, JPMC-MRS-00084196
10
11
12
See, deposition of Brian Bly taken on March 21, 2017 (Bly Tr.), at 14:15-25 and 15:1-8
Page 13 of 21
certification, and though details may have been summarized in the designation “part of a note
sale,” training as to responsibilities for recording assignments of mortgage deeds for the Plaintiff
was unclear. It is telling that Mr. Jason Oquendo states in his deposition that loans in the RCV1
“SOLD” queue are excluded from lien release projects, though how these loans were reviewed
against mortgage loan sales agreements was not clear. Limited system description documents and
training materials were provided to review.
While there were no external or internal audits assessing the efficacy of training and execution of
operational protocols available for my review, the internal audit report provided rated the “current
operational and technology controls over Recovery operations . . . [as] inadequate” and points out
that “[a]dequate controls do not exist to ensure sworn documents (e.g. Affidavits) are completed
appropriately and in adherence with Bank’s procedures, and all laws, regulations and statutes.”13
How procedures and systems, beyond the “SOLD” queue in a secondary system of record for non-
performing loan units, were designed to prevent or detect when mortgage liens being released after
the loan asset was sold to another entity was not described in procedures reviewed. Recovery
operations had not yet responded to internal audit as of January 1, 2013. The response to internal
audit dated January 1, 2013 states management’s action plan to remediate audit findings was
“TBD” regarding deficiencies noted for “Bankruptcy/Foreclosure Activities performed by
Recovery Operations,” “. . . Specifically, chain-of-title reviews are not being performed to verify
and document ownership of Notes prior to a POC or a surplus funds foreclosure filing.”14
When loan portfolios, including non-performing loan portfolios are sold, the loans should be
removed or at least segregated from the loans owned by investors being serviced by another. The
Plaintiff has identified 780 loan units where Defendant released the lien or provided the borrower
with a forgiveness letter even though the loan asset had been sold to the Plaintiff. These releases
were noted from review of Defendant’s iVault system and from the POTS system. These releases
are noted to have generally been executed after the Defendant sold the loan to the Plaintiff;
however, whether the lien release occurred prior to the sale or after, the Plaintiff’s capacity to
perfect interest in the underlying collateral is difficult not only because of the cloud on title but
also because the borrower is confused about their continued obligations to pay the Plaintiff and
the consequences of the release on the mortgage lien.
In paragraph 201 of the Defendant’s response to the Fourth Amended Claim, the Defendant
indicates that an offer was made to the Plaintiff to repurchase certain loans sold and handled in
error. Plaintiff also identified as many as 202 incidences where the Defendant took corrective
action for mortgage liens released or mortgage notes modified via a “Vacation and Rescission of
Lien Release” or a “Vacation and Rescission of Modification of Mortgage” presumably after
JPMC identified an error releasing a lien or modifying a mortgage note it did not own.
The Defendant’s mortgage servicing control environment for foreclosure processes during the
period of these loan sales to the Plaintiff came under the scrutiny of its regulators, as advocates for
the U.S. public. The Defendant’s operational controls environment to file appropriate documents
for foreclosure activity is sufficiently like transferring mortgage notes and liens to a mortgage
13
14
Page 14 of 21
purchaser to serve as a proxy for having authorized agents assign mortgage deeds or deeds of trust
pursuant to the Agreements. In the Matter of: JPMorgan Chase Bank, N.A. a "Stipulation and
Consent to the Issuance of a Consent Order," dated April 13, 2011, page 2, that while the Defendant
neither admits or denies, the Comptroller found:
ARTICLE I COMPTROLLER’S FINDINGS

The Comptroller finds, and the Bank [JPMC] neither admits nor denies, the following:
(1) The Bank is among the largest servicers of residential mortgages in the United States,
and services a portfolio of 6,300,000 residential mortgage loans. During the recent housing
crisis, a substantially large number of residential mortgage loans serviced by the Bank
became delinquent and resulted in foreclosure actions. The Bank’s foreclosure inventory
grew substantially from 2008 through 2010.
(2) In connection with certain foreclosures of loans in its residential mortgage servicing
portfolio, the Bank:
(a) filed or caused to be filed in state and federal courts affidavits executed by its employees
or employees of third-party service providers making various assertions, such as ownership
of the mortgage note and mortgage, the amount of the principal and interest due, and the
fees and expenses chargeable to the borrower, in which the affiant represented that the
assertions in the affidavit were made based on personal knowledge or based on a review
by the affiant of the relevant books and records, when, in many cases, they were not based
on such personal knowledge or review of the relevant books and records;
(b) filed or caused to be filed in state and federal courts, or in local land records offices,
numerous affidavits or other mortgage-related documents that were not properly notarized,
including those not signed or affirmed in the presence of a notary;
(c) litigated foreclosure proceedings and initiated non-judicial foreclosure proceedings
without always ensuring that either the promissory note or the mortgage document were
properly endorsed or assigned and, if necessary, in the possession of the appropriate party
at the appropriate time;
(d) failed to devote sufficient financial, staffing and managerial resources to ensure proper
administration of its foreclosure processes;
(e) failed to devote to its foreclosure processes adequate oversight, internal controls,
policies, and procedures, compliance risk management, internal audit, third party
management, and training; and
(f) failed to sufficiently oversee outside counsel and other third-party providers handling
foreclosure-related services.
And, in 2014, three years later, while JPMC continued to neither admit nor deny, NSMA called
for JPMC to:
RETURN INTEGRITY & ACCURACY TO FORECLOSURE AND BANKRUPTCY

PROCEEDINGS
A. Put an end to robo-signing - signing affidavits filed with the court without personal
knowledge.
Page 15 of 21
• Affidavits/sworn statements utilized in foreclosure proceedings must be accurate

as to the amounts owed and the standing of the bank/servicer to file for foreclosure
and must be based on the signor’s personal knowledge of the facts. The affiant must
review the bank/servicer records before signing.
• Assertions made in foreclosure or bankruptcy proceedings shall be accurate,
complete and supported by competent and reliable evidence. Affidavits shall be
signed in the presence of a notary.
• Banks/servicers may not rely on an inaccurate affidavit to obtain a foreclosure
judgment.
• Banks/servicer must have standards for qualifications, training and supervision of
employees that sign affidavits; and shall ensure that they have an adequate number
of employees with reasonable time to prepare, verify and execute affidavits.
• Banks/servicers shall not pay incentives to employees or third parties to
encourage speed in the signing of affidavits.
...
C. Banks/Servicers shall properly document their authority to file a foreclosure action.
The bank/servicer must document its right to foreclose on a borrower.
The bank/servicer must plead the basis for its authority to foreclose.
The bank/servicer shall summarize this authority to foreclose in the 14-day pre-
foreclosure notice to the borrower.
It is therefore clear that the Defendants were aware of the requirements for sufficient analysis
of and proper research necessary to support the accuracy of documentation recorded to
establish loan ownership and monies due and owing to various parties. The regulatory
expectations that the execution of sworn documents related to mortgage loans and liens,
including lien releases, include the affiant’s personal knowledge regarding the standing of the
bank/servicer and after conducting an actual review of the bank/servicer records are clear.
Maintaining standards of employee-training and supervision of the those signing affidavits are
also a clear regulatory mandate regarding mortgage lending activities. While the regulatory
mandates are directed primarily at mitigating the consumer mortgage borrowers, failures in the
mortgage loan servicing environment as to non-performing loan sales impacted distressed
borrowers as well as buyers of mortgage loans like the Plaintiff. JPMC’s actions against the
Plaintiff’s assets is therefore indicative of a failure to meet known obligations.
Mortgage Loan Ownership and Authority to Execute Mortgage Assignments, Releases,
While questions were asked, and answered regarding authority of Ms. Solomon and other
employees as agents JPMC, I have not read corporate resolutions stating that the NTC or JPMC
employees, both JPMC corporate officers and employees without title, are granted authority to act
on JPMC’s behalf. Statements from Ms. Launi Solomon specify no responsibility for assigning
MRS MLPA liens, no procedures, training material or audit findings as to the efficacy of training
and supervision of employees that sign affidavits were reviewed for purposes of this document.
Page 16 of 21
Anecdotally, and as evidence of affiants asserting facts without sufficient research as to the validity
of the facts, an “Affidavit of Lost or Missing Assignment”, stamped “Inactive Purge”, dated 20
February, 2013, and recorded by Deandrea Chapman, Vice President of JPMortgage Chase Bank,
N.A. was provided my review (see copy below).
The loan, executed by Allen Bradley and Gloria Bradley, secured by a Mortgage recorded in Lima,
Ohio on 05/02/2000 by Bank One, N.A., the originating mortgagee. Assignment from JPMorgan
Page 17 of 21
Chase as the successor by merger (“s/b/m”) to BankOne N.A., to Plaintiffs is noted in paragraph
2. of the “Affidavit of Lost or Missing Assignment” and recorded. Plaintiffs state that this loan
was purchased from the Defendant and the mortgage was properly assigned to Plaintiffs as 13
September 2007.
Paragraph 3. of the “Affidavit of Lost or Missing Assignment,” counter to JPMC’s assignment to

Plaintiffs presented in Paragraph 2., states that the Plaintiffs did not properly record an assignment
to JPMC.
The confusion between statements in paragraphs 2 and 3 is exacerbated by the implication that “S
and A Capital Partners, Inc., is no longer in business or a representative of the Assignor cannot be
found or has not responded to our request.” The Plaintiffs does not indicate any attempt was made
to contact S&A Capital Partners, Inc. regarding this alleged missing assignment. Plaintiffs state
also that the Plaintiffs had not, pursuant to contractual representations and warranties, returned or
attempted to sell this loan back to JPMC. This “Affidavit of Lost or Missing Assignment” appears
to have been recorded with little regard as to the JPMC books and records after researching the
original assignment to the Plaintiffs.
And, as further evidence of robo-signing, on July 2nd, 2018 Mr. Ronnie Sanders, purporting to be
a Vice President of JPMorgan Chase Bank N.A., S/B/M Chase Home Finance LLC, S/B/M to
Chase Manhattan Mortgage Corporation, assigned, via a “California Assignment of Deed of
Trust,” to Plaintiffs Capital Partners, Inc. a Deed of Trust dated August 4, 1994 and recorded on
August 17, 1994, made and executed by BETTY DEAN BROOKS. This assignment was in error.
Page 18 of 21
Page 19 of 21
The Brooks loan had been noted

as sold in the MLPA to Plaintiff
Mortgage Resolution Serving,
LLC (MRS) on 25 February
2009. There are several issues
with this loan, now recorded
under the name of “In the estate
of Ms. Brooks.” Defendant,
while working through the
issues with a second mortgage in
foreclosure, knew the loan sold
in 2009 had not been assigned to
MRS per the MLPA and that
MRS could not provide first lien
mortgage satisfaction until it
was assigned to MRS. The
Defendant’s staff, Ronnie
Sanders, who may be a Vice
President, assigned the deed of
trust to Plaintiff S&A Capital
Partners, Inc., rather than the
owner of the mortgage, Plaintiff,
MRS.
The Plaintiff identified 780 loan

units where the Defendant
released the lien or provided the
borrower with a forgiveness
letter even though the loan asset had been sold to a Plaintiff entity. These loan units represent at
least a 17% error rate for asserting ownership where Defendant cannot assert ownership. The error
rate might be considered 12.7% after subtracting the 202 incidences identified where the
Defendant took corrective action via a “Vacation and Rescission of Release of Lien” or a
“Vacation and Rescission of Modification of Mortgage” and assigned the mortgage and mortgage
deed or deed of trust but only if that “Vacation and Rescission of Release of Lien” or a “Vacation
and Rescission of Modification of Mortgage” was effective in doing so.
Page 20 of 21
Conclusion
Because JPMC mortgage loan servicing released liens that represented the security interest for
mortgage-assets sold to Plaintiffs, the Plaintiffs’ capacity to perfect its security interest in the
mortgage asset and collect the mortgage debt represented by the borrower’s promise to pay, either
through borrower payments, foreclosure or other loss mitigation techniques, was diminished.
JPMC’s servicing operations released liens serving as the security interest for loans JPMC had
sold to Plaintiffs without adequate controls to prevent such occurrences. It is unclear whether
JPMC’s non-performing and foreclosure employee operations teams using RCV1 were even aware
of mortgage assets being sold to Plaintiffs. The Defendant’s beneficial ownership of the mortgage
loan asset was not considered when JPMC default servicing operations and loss mitigation groups
modified loans sold to the Plaintiff, released liens on loans sold to the Plaintiff and/or forgave
loans sold to the Plaintiff. This seeming lack of knowledge and lack of due diligence to verify and
document ownership of mortgage assets meant that the lien releases filed against the Plaintiff’s
assets was unavoidable and entirely foreseeable by Defendant.
I respectfully reserve the right to revise or expand my opinions to reflect any additional opinions
I may formulate based upon newly acquired information, including responding to opinions of
expert witnesses for the Defendant.
Dated July 9, 2018

McLean, VA
___________________________
Zachary A. Bumpus
Page 21 of 21

Expert Witness Report of Zachary Allen Bumpus Filed As Ex. 28 MRS V JPM-D.E. 363

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Case 1:15-cv-00293-LTS-RWL Document 363-28 Filed 03/08/19 Page 1 of 22

UNITED STATES DISTRICT COURT

S&A CAPITAL PARTNERS, INC.,

JPMORGAN CHASE BANK, N.A.,

EXPERT REPORT OF ZACHARY ALLEN BUMPUS

I am Zachary Allen Bumpus. I have expertise in mortgage banking as a chief financial

Summary of Opinion Rendered

All three contracts are collectively referred to as the “Agreements.”

“ARTICLE 1 - COMPTROLLER’S FINDINGS (Stipulation Agreement, page 2):

The Comptroller’s findings also include, on page 2, an observation that JPMC’s

I am licensed as a Certified Public Accountant in Virginia. I am certified in financial

operational risk-management for multiple government-sponsored enterprises. Procedures

III. DOCUMENTS REVIEWED

I have reviewed the Complaint as presented in the:

I have reviewed depositions from:

As background for commenting on residential mortgage servicing operations, I also reviewed:

1. Loan modifications (e.g., HAMP).

(3) The Action Plan shall address, at a minimum:

ARTICLE I COMPTROLLER’S FINDINGS

RETURN INTEGRITY & ACCURACY TO FORECLOSURE AND BANKRUPTCY

• Affidavits/sworn statements utilized in foreclosure proceedings must be accurate

Mortgage Loan Ownership and Authority to Execute Mortgage Assignments, Releases,

Paragraph 3. of the “Affidavit of Lost or Missing Assignment,” counter to JPMC’s assignment to

The Brooks loan had been noted

The Plaintiff identified 780 loan

Dated July 9, 2018

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