Case 1:15-cv-00293-LTS-RWL Document 428-12 Filed 09/30/19 Page 1 of 7

PLA,NTIFF’S EXHIBIT 12
 Case
Case1:15-cv-00293-LTS-RWL
1:15-cv-00293-LTS-RWL Document
Document428-12 Filed08/20/18
310 Filed 09/30/19 Page
Page1 2ofof6 7

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

S&A CAPITAL PARTNERS, INC.,

MORTGAGE RESOLUTION SERVICING,
LLC; and 1ST FIDELITY LOAN No. 1 :15-cv-00293-LTS-JCF
SERVICING, LLC,
DECLARATION OF
Plaintiffs
LAURENCE SCHNEIDER
V.

JPMORGAN CHASE BANK, N.A.,

JP MORGAN CHASE & CO., and
CHASE HOME FINANCE LLC

Defendants.

DECLARATION OF LAURENCE SCHNEIDER

I, LAURENCE SCHNEIDER, state that the following is true:

1. I am the President and shareholder of S&A Capital Partners, Inc. ("S&A"), the
st st
President and managing member of 1 Fidelity Loan Servicing, LLC ("1 Fidelity"), and the

President and managing member of Mortgage Resolution Servicing, LLC ("MRS")(collectively

"Plaintiffs"). I own ninety-nine percent of MRS together with my wife, Stephanie Schneider, as

tenants in the entirety.

2. I am a real estate specialist and I work and reside in Boca Raton, Florida.

3. I have personal knowledge of the facts set forth in this Declaration, which I make

in order to place before the Court certain information and material relevant to Plaintiffs

Response to Defendants' Motion for Partial Summary Judgment.

 Case
Case1:15-cv-00293-LTS-RWL
1:15-cv-00293-LTS-RWL Document
Document428-12 Filed08/20/18
310 Filed 09/30/19 Page
Page2 3ofof6 7

4. Part of the business model for the companies listed above was rehabilitating

troubled home mortgage loans that were purchased from major banks, such as Chase, and

servicing them in such a way that they would turn a profit.

5. In 2008, I started working closely with Eddie Guerrero to review, and ultimately

purchase, a large number of home mortgage loans that Chase believed to be very high risk, low

reward loans.

6. Around the same time, in October of 2008, Chase was engaged in a "lien release

project" to rid itself of exposure to properties that represented a liability to the bank. As part of

this project, Victor Fox, a Chase employee, assembled a list of more than 20,000 loans from

RCVI that he believed held such liability.

7. In my review of the loans, it became clear that a large number of the loans were

for second mortgages, or had already been foreclosed by other mortgage holders.

8. None of the approximate 6,000 loans that I reviewed from a list provided to me in

November 2008 were acquired from Washington Mutual ("WaMu").

9. After reviewing the loans, I offered to purchase several thousand loans for

$100,000.00.

10. Chase, through Eddie Guerrero and others, negotiated aggressively and threatened

to cease doing any and all business with my companies if I did not move forward with acquiring

the pool of loans.

11. I refused to purchase the loans unless they were first lien mortgages, and unless

Chase could give me assurances that they would provide the necessary information to adequately

service the loans.

12. Eddie Guerrero told me that Chase was scrubbing the list ofloans they had

2
 Case
Case1:15-cv-00293-LTS-RWL
1:15-cv-00293-LTS-RWL Document
Document428-12 Filed08/20/18
310 Filed 09/30/19 Page
Page3 4ofof6 7

previously provided to me in the November Data Tape to ensure that only closed end first lien

mortgages were included, and that the final list would be provided after the agreement was

signed.

13. Based on Chase's threats, and Guerrero's steadfast pressure and assurances that

the loan pool would include only closed end first-lien mortgages, I agreed to move forward.

14. After Chase gave me those assurances, we entered into the Mortgage Loan

Purchase Agreement ("MLP A"), and I purchased the loans for $200,000.00.

15. In October 2009, Guerrero passed away.

16. I expected to receive a sufficient number of first lien mortgage loans to meet an

aggregate unpaid principal balance of roughly $100 million, which would be the amount left

after I had done my due diligence to identify which loans did not conform to the terms of the

MLPA.

17. After we signed the MLP A, I repeated! y asked Chase to provide me all of the

necessary information to properly service the loans.

18. Chase ultimately rescinded several of the better quality loans they had originally

sold to me, lowering the quality of the loan pool significantly.

19. While I was concerned that I might not get the information as quickly as I would

like and/or need, I was committed to working with Chase to perform under the MLPA.

20. Through 2011, Chase continued to tell me that it wanted to continue working with

me and sell me more loans, and we even went on a business trip to Las Vegas, which delayed my

discovery of the fraud as Chase was actively trying to conceal its fraud.

21. In fact, I continued to buy over one hundred additional individual or "one-off'

3
 Case
Case1:15-cv-00293-LTS-RWL
1:15-cv-00293-LTS-RWL Document
Document428-12 Filed08/20/18
310 Filed 09/30/19 Page
Page4 5ofof6 7

loans from Chase through the RCVl system, through S&A and First Fidelity, and with those

loans I received what I negotiated for, giving me hope that Chase would provide the missing

information with respect to the MLP A.

22. I frequently reached out to Launi Solomon, another Chase employee who I had

worked with after Eddie Guerrero died, trying to get more information about the MLP A loans,

and she always assured me that she would get me the necessary information.

23. She sent me some information as late as February 2013 for the MLP A loans,

although it wasn't all of the information I needed.

24. Based upon Chase's continued assurances that it would comply with the MLPA,

and Chase's various rationales for its delay, I did not consider litigation, or consider Chase in

breach of the agreement and/or suspect that I had been defrauded until Omar Kassem sent me an

email on March 1, 2013 stating, "I've been asked to step aside as it doesn't appear we're going to

get things resolved as we originally intended per the original agreement."

25. It was not until Chase stopped working with me in March 2013 that I truly began

to understand and investigate whether Chase had intended to defraud me from the very start with

the MLPA.

26. As I did more research in to the loans with the minimal information I had from

Chase, I discovered that Chase had released liens and extinguished the debts of many of the

MLP A loans, rendering them worthless.

27. I also discovered that Chase had got a nearly $557 million benefit from the MLPA

by selling me the loans, getting them off of their books in order to qualify for Government

incentives under RMBS and HAMP.

28. Later, in August 2013, I reached out to Solomon again, my last contact at Chase,

4
 Case
Case1:15-cv-00293-LTS-RWL
1:15-cv-00293-LTS-RWL Document
Document428-12 Filed08/20/18
310 Filed 09/30/19 Page
Page5 6ofof6 7

and she told me that she "got in trouble" for helping me and that she wasn't allowed to talk to me

anymore.

29. On May 6, 2013 I filed an FCA lawsuit against Chase in the United States District

Court, District of South Carolina.

30. The FCA case was almost immediately sealed as required under the FCA statute,

and the Department of Justice instructed me not to disclose the FCA case and any related facts.

31. This prohibition against filing a private action was not lifted by the Department of

Justice until December 9, 2014.

32. As a result of my companies attempting to service loans that Chase falsely

claimed it transferred to MRS, my companies have had to defend law suits, respond to inquiries

from Attorneys General and expend immeasurable man hours addressing disgruntled borrowers.

33. My companies have had to abandon their usual business of mortgage investment

in order to manage the difficulties brought about by the MLP A transaction.

5
Case
Case1:15-cv-00293-LTS-RWL
1:15-cv-00293-LTS-RWL Document
Document428-12 Filed08/20/18
310 Filed 09/30/19 Page
Page6 7ofof6 7

Signed under the pains and penalties of perjury this 20 th day of August, 2018.

·-
Laurence Schneider