- Court of Appeals of Ohio – HSBC BANK USA v. THOMPSON AFFIRMED – HSBC Failed to Establish that it was the Holder of a Promissory Note Secured by a Mortgage
- Promissory Note Fraud | Bondi Capitulates, Admits Promissory Note Transfers Invalidated by Fraud
- Action Alert | The Case of The Disappearing Docket Entry re: Alleged Original Note & Mortgage
Jan
13
Action Alert | Washington SB6199 Makes it a Felony to Claim Actual Holder Status of a Promissory Note When Not
Heh, Lookie Here (Felony For False Swearing) Well what do we have here! 23 (ii) A declaration by the beneficiary made under the penalty of perjury stating that the beneficiary is the actual holder of the promissory note or other obligation secured by the deed of trust shall be sufficient proof as required under this … Read more
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Jan
05
Adam Levitin | The Restatement of Property and the Road to Mortgagocracy
Mortgage may not be enforced except by a person having the right to enforce the obligation or one acting on behalf of such a person…[including an agent or a trustee for the noteholder.] The trust or agency relationship may arise from the terms of the assignment, from a separate agreement, or from other circumstances. Courts … Read more
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Dec
13
Christiane Amanpour out as host of “This Week”? Update: Stephanopoulos in?
Finally.
As with any dull, lifeless marriage, it’s probably better that this one ends than that they stay together out of obligation. I want to try an idea out on you, but really think it over before you say no. Okay? “This Week with Chelsea Clinton.” Christiane Amanpour is preparing to leave as the anchor of [...]
Aug
17
Knights of Columbus File Amended Complaint | “It is apparent that the defendant knowingly failed in its obligation to receive, process, maintain, and hold all or part of the mortgage files”
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ——————————————————- KNIGHTS OF COLUMBUS, Plaintiff, v. THE BANK OF NEW YORK MELLON, Defendant. ——————————————————- AMENDED COMPLAINT SUMMARY 1. This action originally requested the Court to order an immediate accounting of two trusts known as CWALT 2005-6CB and CWALT 2006-6CB. These trusts hold residential … Read more
Aug
15
Registers of Deeds, Andrea F. Nuciforo Jr. Says Southern and Northern District Registries Owed a Collective $775,000 in MERS Fees
Registers of deeds usually remain out of the political spotlight, unless up for re-election, but Nuciforo believes he and his colleagues must prevent MERS alleged deceptive practices. “I have an obligation to make sure our [registry's] documents are an accurate reflection of who owns the mortgage to a property,” he said. ~ Mortgage business ‘stiffing’ … Read more
Apr
26
Defendants in Foreclosure Get Attorney Appointed For Them (An Attorney Recommended and Paid For By The Bank)
TAMPA – When a lender fails to find a homeowner to notify them of a foreclosure lawsuit, a judge often appoints a guardian ad litem. That attorney is supposed to represent the property owner’s interests.
But guess who typically picks the guardian? The lender’s attorney.
Foreclosure is the only court proceeding in Florida where the plaintiff routinely chooses the attorney ad litem to represent the defendant, according to court records and interviews.
GOT THAT? ONE MORE TIME….
TAMPA – When a lender fails to find a homeowner to notify them of a foreclosure lawsuit, a judge often appoints a guardian ad litem. That attorney is supposed to represent the property owner’s interests.
But guess who typically picks the guardian? The lender’s attorney.
Foreclosure is the only court proceeding in Florida where the plaintiff routinely chooses the attorney ad litem to represent the defendant, according to court records and interviews.
(Before you log on to read the rest of the story, please make sure you leave comments in the story which share your thoughts on the foreclosure process. Remember, we all have an obligation to make sure truth about what is happening in our courtrooms is being told.)
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Apr
12
OUTRAGE! Of The Day- Forced Place (Insurance)
The banks are jacking Americans every single chance they get. There really is no holding them back. No self-imposed restraint and not a single elected or government official that is standing up to protect consumers. At some point in time, the cumulative effect of all the abuses will build up and Americans will finally rise up against the tyranny….until then the American people will continue to take gut punches at every single corner….And this story comes from American Banker Magazine…..read on:
The first time Luis Juarez heard of force-placed insurance was when he received a $25,000 bill for it in the mail.
A Florida doctor and homeowner, Juarez had been dropped by his previous insurer over a roofing issue. Though that lapse violated his obligation under the mortgage to maintain coverage on the property, he was current on his loan payments and heard nothing from the servicer Wells Fargo & Co. for more than a year.
Then on May 10, 2010, Juarez got a note from QBE Specialty Insurance, a partner of Wells. It said that QBE was retroactively charging him $25,000 for a policy that had expired two months earlier, according to court filings.
Neither the price tag — nearly quadruple his original policy’s rate, according to court papers — nor the expired status of the QBE policy were a mistake.
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Feb
18
2nd DCA SMACKDOWN- Attorney’s Fees Due in Foreclosure Cases!
Florida’s Second District Court of Appeals continues to hammer away at the foreclosure mills…..read on…..
At oral argument, the bank’s attorney tried to justify this improper filing due
to the vast volume of foreclosure cases in the judicial system. While this court is well
aware of the volume of these cases, that circumstance is not a matter that relieves the
bank and its attorneys of their obligation to file pleadings that are adequately supported
by a reasonable investigation prior to suit. If anything, the volume of these cases and
the obvious detrimental effect that such volume has upon the legal system should be a
factor requiring attorneys who file the actions to engage in a higher degree of
professionalism.
South Bay Lakes Homeowners Association
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Feb
16
Thomas v. Flagstar- More Opposition to Taylor v. DeutscheBank, MERS Gets Gutted.
Furthermore, CitiMortgage may not rely on the recorded assignment of the plaintiffs mortgage from MERS to CitiMortgage as evidence that the note was transferred to it. While the assignment purports to assign both the mortgage and the note, MERS, which is a registry system that tracks the beneficial ownership and servicing of mortgages, was never the holder of the note, and therefore lacked the right to assign it. While MERS was the mortgagee of record, it was acting only as nominee for Allied, its successors and assigns. MERS is never the owner of the obligation secured by the mortgage for which it is the mortgagee of record. See, e.g., Landmark Nat. Bank v. Kesler, 289 Kan. 528, 536, 216 P.3d 158, 164 (2009) (providing a profile of MERS).
Thomas+v+Citimortgage,+Flagstar+Bank,+Bankr.+D.+Mass.+Feb.+9.2011
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Dec
23
Courts That Care—About Real Issues Like Who’s Suing On Mortgage Debt
One of the biggest (and largely unaddressed) issues affecting all of Foreclosuredum is the inability to get a clear idea who owns the note and mortgage being sued upon. In many cases, it feels like a moving target and in an alarming number of cases the alleged ownership really does change right in the middle of the case.
In state courts there are alarming numbers of Ex Parte Substitutions of Party Plaintiff and assignments of bid and other very clear and specific actions taken by the dark and shadowy forces that operate the American mortgage market to shift and change and exchange the ownership of millions (billions?) of dollars in mortgages in property in foreclosure.
The fact that not many people care about this major issue is truly disturbing. Some folks are still stuck in the “the borrower owes this money to someone” mode, while others clearly get the fact that we owe a very real obligation to our national economy and probably to our national security and sovereignty to have real answers to the most basic question…
“Who Really Owns All This Mortgage Debt?”
Two opinions, two courts from either side of the country……..
US+BANK+V+EMMANUEL+RE+MERS+SLIPOPINION+Baum+Law+Firm+Conflcit+May+112010
In+re+Reyes+no+standing+for+servicer+in+absence+of+proof+of+assmts-1
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Sep
28
Will The Florida Bar Really Take Action Against The Foreclosure Mills? Stay Tuned.
Although the Florida Supreme Court has declined to take any affirmative action against the widespread fraud and abuse that is occurring in Florida courtrooms, all attorneys should be reminded that they have an obligation under the Rules Regulating the Florida Bar to report all potential ethical violations of other attorneys.
As reported in the attached article that appeared in the Florida Daily Business Review, I recently filed a complaint with the Florida Bar requesting that they look into the very unusual situation involving the Law Offices of David Stern and the non-legal component (whatever that is) of that practice, David J. Stern Enterprises. I encourage everyone to read this article carefully (especially US Congressman Grayson) then stay tuned to see if the Florida Bar actually takes any interest in the very real issues that provoked the complaint…..
For comprehensive reporting of many complex issues that relate to our courts and foreclosure in particular, please visit the website of the Daily Business Review Here.
While I’m certainly glad that national and statewide press have now picked up on the issues relating to foreclosure and foreclosure fraud, we cannot forget that the excellent regional press sources like Daily Business Review have been tracking and reporting on these issues for quite some time. Please support their reporting and effort by subscribing to their excellent paper.
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Sep
19
WATCH OUT~ Keep your eyes out for this interesting development!
It’s been some time since I talked about Capacity, so I want to do a new post here on the subject. The bottom line is this, hundreds of thousands of foreclosure judgments are being entered based on complaints that lack one of the most basic elements of EVERY SINGLE OTHER LAWSUIT FILED IN THIS COUNTRY. The critical piece of information I’m speaking about is the identification of the parties to the lawsuit. Now in most cases, the borrower defendants are known and identified. They’re easy because the live in the home. The second lienholders are never properly identified and they are almost always only served through MERS, so it is questionable whether the real owner of the debt obligation secured by the second mortgage is notified, but that’s a subject for another blog.
Today I’m talking about the failure to specifically and accurately identify who or what the plaintiff corporation is, where they are located and under what authority they assert the capacity to sue. Now in this Twilight Zone world of mortgage foreclosures, our judges have no idea what the answers to those questions are so all across this state our judges are busy transferring millions of dollars in judgments and property to entities with long, confusing, abbreviated, obfuscated, mutilated, desecrated (whatever) names. Just last week a client came in with a JP Morgan as trustee for 123 trust in its capacity as receiver for XYZ bank, trustee or some such nonsense. Problem with that is no one could even pretend to know who or what was responsible for trying to throw a neighbor onto the street, but left unchallenged a judge somewhere will just grant that shadow entity a judgment.
Look carefully at the names that are listed on the attached documents that are registered with the Secretary of State. You think you recognize those names don’t you….Well Look Very Carefully at the owner’s name. Now I want to know what legitimate purpose a person would have for registering the names that are indicated there. I can certainly think of several improper reasons for having such names, but I cannot think of a single legitimate purpose. Look carefully at the names there people, then consider how that could come into play in our courtrooms across the state and in the current state of this mortgage environment.
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Aug
20
LivingLies UPDATED Plan of Engagement: What to Do
UPDATE: This is THE OUTLINE of a plan that is current in its evolution but by no means complete or the last word. It replaces the entry I made in February of this year. The assumption here is that even without taking mortgage foreclosure cases into consideration, the percentage of cases that actually go to trial is between 5%-15% depending upon how you categorize “cases.” On the other hand, if you are not prepared for trial and counting on settlement, your opposition will generally know it and have the upper hand in negotiating a settlement. They are going to play for keeps. You should too. Don’t assume that the note in front of you is the actual original. Close inspection often reveals it is a color copy.
And for heaven sake don’t stand there with your mouth hanging open when someone says you are looking for a free house. You are looking for justice. You had your purse snatched in this transaction, you know there is an obligation, but you also know that they didn’t perfect the security interest (not your fault) and they received multiple payments from multiple parties on these securitized loans. You want a FULL accounting of all such transactions to determine what balance is due after insurance payments, who is subrogated or substituted on claims, and an opportunity to negotiate a settlement or modification with someone who actually has advanced money on THIS transaction and can show it to be so.
WORD OF CAUTION: IF YOU ARE ALREADY IN PROCESS, YOU ARE REQUIRED TO ACT WITHIN THE TIMES SET FORTH BY STATE LAW, FEDERAL LAW, OR THE LAWS OF CIVIL PROCEDURE. FAILURE TO DO SO LEAVES YOU IN AN UPHILL BATTLE TO REVERSE ACTIONS ALREADY TAKEN. ON THE OTHER HAND ACTIONS ALREADY TAKEN “FIX” THE POSITION OF YOUR OPPOSITION, SINCE THEY CAN NO LONGER ASSERT CHANGES IN CREDITOR, LENDER OR TRUSTEE. THUS IT MIGHT BE EASIER, ACCORDING TO SOME SUCCESSFUL LITIGATORS OUT THERE, TO WAIT UNTIL THE SALE HAS OCCURRED AND THEN ATTACK IT AS A FRAUDULENT SALE, THAN TO TRY TO STOP IT WITH A TEMPORARY RESTRAINING ORDER ETC.
CONSIDER BANKRUPTCY, ESPECIALLY CHAPTER 13, WHERE THERE ARE MORE REMEDIES THAN YOU MIGHT THINK IF YOU FILL OUT YOUR SCHEDULES PROPERLY. WE ARE SEEING BETTER RESULTS IN SOME BANKRUPTCY COURTS THAN FEDERAL OR STATE CIVIL COURT PROCEEDINGS.
- Get your act together, stop fighting amongst the members of your household and make a decision as to what you want to do — fight or flight?
- GET SOME HELP NO MATTER WHAT YOU DECIDE. GET THE LOAN SPECIFIC TITLE SEARCH, GET A SECURITIZATION SEARCH, AND GET A LAWYER LICENSED IN THE COUNTY WHERE YOUR PROPERTY IS LOCATED AND MAKE SURE HE/SHE IS NOT STUCK ON THE PROPOSITION THAT YOU SHOULD LOSE.
- If you choose flight, then by all means try the short-sale or jingle mail strategies that have been discussed on this blog. Do not try to make money on the short-sale, since nobody is going to give it to you. You can make a few dollars by riding out the time in foreclosure without making payments (and hopefully saving the money you would have paid) and by negotiating as high a price (a few thousand dollars) as you can in a deal known as “cash for keys.” Even for this, you should employ the services of a local licensed attorney — at least for consultation. There are several short-sale options that have evolved. Google Edge Simonson or Prime financial. I’ve been working on a short-sale-leaseback option that seems to be picking up steam.
- STRATEGIC DEFAULTS RISING: More and more people of all walks of life including those that have some considerable wealth, are walking away from these properties that were the subject of transactions in which the presumed value of the property was preposterous. This is an option that scare the hair off the pretender lenders because it pouts the power in your hands. They in turn are trying to scare the public with threats of deficiency judgments etc and collections. It is doubtful that many or indeed any deficiency judgments would be awarded, even if they were allowed. But in many cases, particularly in non-judicial states, deficiency judgments are NOT allowed. A version of the strategic default that many people like is to stay as long as possible without paying and then walk. If you are smart about it, you raise your own capital by socking away the payments you would have made.
- If the decision is fight — then the second decision to make is to answer the question “fight for what?” If you want to buy time, there are many strategies that can be employed, which basically are the same strategies as those used if you are fighting for real. And you might be surprised by the result. Some people get a year or two or even more without payments. You are going to take a FICO hit anyway so why not put some cash in your pocket while you hold back payments.
- AVOID crazy deals where you give your property or share your property with a stranger. If you persist in engaging such people at least call references and make sure the references are real. Ask questions about their situation and how they feel it worked out to them. Get as much detail as possible.
- AVOID mortgage modification firms. If you persist in engaging such people at least call references and make sure the references are real. Ask questions about their situation and how they feel it worked out to them. Get as much detail as possible. My opinion is that if they don’t pursue an aggressive litigation strategy the statistical probability of you accomplishing anything by going to them is near zero.
- In all cases, if at all possible:
(a) Get all your information together along with a short executive summary of your “journal” (even if you create the journal now). That means all closing documents, any information you have on title, recording in the county recorder’s office, the names of all parties who were “at” closing (that means not just the actual people who were there, but he names of companies that were represented or mentioned at closing). Also, include in the file any notices of default(NOD) or notice of Trustee sale (NOTS) or summons from a court.
(b) Get a MORTGAGE ANALYSIS of the loan transaction itself. THIS INVOLVES THREE PARTS — (1) LOAN SPECIFIC TITLE SEARCH AND CHAIN OF TITLE, EXAMINATION OF THE DOCUMENTS, SIGNATURES, AND DATES OF DOCUMENTS PURPORTING TO BE REAL, (2) SECURITIZATION SEARCH THAT CHASES THE MONEY TRAIL AND WILL PROBABLY LEAD YOU TO SOME IMPORTANT ISSUES LIKE THE VERY EXISTENCE OF THE “TRUST” ASSERTING IT HAS THE RIGHT TO FORECLOSE AS WELL AS MONETARY ISSUES SUCH AS APPLICATION OR ALLOCATION OF PAYMENTS RECEIVED BY THE INVESTOR WHO ADVANCED THE FUNDS FOR THE LOAN AND (3) COMMENTARY AND ANALYSIS THAT IS USABLE BY AN ATTORNEY IN COURT SUCH THAT HE/SHE CAN ARGUE THAT THERE ARE QUESTIONS OF FACT ENTITLING YOU TO PURSUE DISCOVERY. IF YOU WIN THAT POINT YOU ARE ON YOUR WAY TO A SUCCESSFUL CONCLUSION. BUT NOBODY IS GOING TO MAKE IT EASY FOR YOU.
(c) Who is your creditor? The TILA Audit alone does nothing without taking further steps. The Trustee’s “Take-down” report should be demanded in non-judicial states and if the house is in foreclosure, your written objection should be sent to the Trustee.
(d) If someone tells you they are “pretty sure” or can “definitely” stop your foreclosure or promises a favorable outcome, and asks for money up front, then run like hell. This is a scam. IF THEY TELL YOU THEY WILL DO WHAT THEY CAN, AND THEY GIVE YOU SOME EXAMPLES OF WHAT THEY WILL BE DOING FOR YOU THEN LISTEN AND GET REFERENCES.
(e) Only a Court order stops foreclosure or a Trustee Sale. No letter of any form or substance will stop it unless the other side is intimidated into stopping the action, which sometimes happens when they know their paperwork is “out of order.”
(f) Get a Forensic Mortgage Analysis Report OR AN EXPERT DECLARATION that summarizes in a few pages the potential issues that you should be investigating AND WHICH LENDS SUPPORT TOY OUR DENIAL OF THE DEFAULT, DENIAL OF THE RIGHT OF THE OPPOSING PARTY TO CLAIM A DEFAULT, DENIAL OF THE RIGHT OF THE OPPOSING PARTY TO FORECLOSE.
(g) Get an Expert Declaration that uses the forensic report and the expert opinions of specific experts (like appraisers, title analysts) and which identifies the probable chain of securitization and the money trail. You’ll be surprised when you find out there were two yield spread premiums not disclosed to you and that they can total as much or more than the “loan” itself. GET EXPERT OPINION ON PROBABLE DAMAGES INCLUDING RETURN OF UNDISCLOSED FEES, INTEREST, ETC. (SEE LAWYER’S WORKBOOK FROM GARFIELD CONTINUUM).
(h) Send the Forensic Report and expert declaration to the known parties, with an instruction to forward it to all other parties known to them in the securitization chain. Include a Qualified Written Request(QWR) AND a Debt Validation Letter(DVL) (which is really a debt verification letter). Don’t be surprised if your pretender lenders will come back and tell you your QWR is defective or improper in some way, but that’s OK, you have followed statutory procedure and they didn’t. With the help of an attorney and with consultation with your experts decide on what resolution you will demand — damages, rescission, etc.
(i) Don’t believe a word about modification. Practically none of them go through. They are leading you into default so they can collect more service fees, and get money out of you that you think is stopping the foreclosure.
(j) Don’t believe a word that any pretender lender or representative says or represents, even if they are a lawyer, particularly verbal communications that they refuse to confirm in writing. Challenge everything.
(k) Don’t accept any document as authentic. Many documents are being fabricated or forged, including affidavits. This is why you need a lawyer and an expert and a Forensic mortgage analysis — to determine what documents and parties are suspect and what you should be asking for in discovery and in the QWR and DVL.
(l) YOUR FIRST STRATEGY IS TO RAISE NOT PROVE ISSUES OF FACT. BY PRODUCING A FORENSIC REPORT AND EXPERT DECLARATION, NEITHER YOU NOR YOUR LAWYER NEEDS TO ACQUIRE EXPERTISE IN SECURITIZED LOANS. YOU ONLY NEED TO RAISE THE ISSUE OF FACT BY SHOWING THE COURT THAT YOU HAVE EXPERTS WHO SAY THE PRETENDER LENDERS/TRUSTEES ETC. ARE NOT CREDITORS AND NOT AUTHORIZED AGENTS WORKING FOR THE CREDITORS. THEY SAY THEY ARE IN FACT THE CREDITORS OR HAVE SOME AUTHORITY GRANTED BY AN ALLEGED CREDITOR. IT IS NOT FOR THE COURT TO ACCEPT ONE VIEW OR THE OTHER, BUT RATHER TO ALLOW DISCOVERY AND AN EVIDENTIARY HEARING ON THE ISSUE OF STANDING (SEE MANY RECENT CASES REPORTED SINCE FEBRUARY ON THIS BLOG).
(m) Be very aggressive on discovery. They will argue that even if they are not the creditor and even if they refuse to disclose the identity of the creditor, they are still entitled to disclose because they are the holder of the note and/or mortgage. Your argument will probably be that they still have a duty to disclose the identity of the creditor and the source of the their authority to represent the creditor, along with proof that the creditor has received notice of these proceedings.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: debt validation, expert declaration, forensic analysis, qualified written request, TILA audit, trustee
Aug
16
Countrywide settlement pays fraction to investors – Shell Game Continues
EDITOR’S NOTE: The shell game continues. While the media picks up stories about “settlements” giving rise to the presumption that Countrywide Home Loans and Bank of America and the rest of the securitization players committed various violations of statutes, duties, rules and regulations, the main point gets lost. Where is this money going and WHY? What is the tacit or express admission in paying that money and what effect does it have on the average homeowner sitting with a loan whose obligation is being paid in these settlements?
Think about it. If Bank of America, which now owns Countrywide, is paying “fractions” to investors who purchased mortgage bonds then who is it that owns the underlying mortgages and loans? Did Bank of America pay the investors do it under a reservation of rights (subrogation) to enforce the underlying loans? If not, then why are they foreclosing? All evidence is to the contrary. There is no subrogation under these purchases, insurance, credit default swaps or any other contract — not that I ever saw and not that my sources in the industry tell me was ever even contemplated much less executed. The same holds true for all those bonds the Federal Reserve is holding.
If Bank of America is paying “fractions” to investors who purchased mortgage bonds, why was it a fraction? Is it because the value of the bond was much lower than the price paid by the investor? Is it just a convenient settlement? Or is it because the investors have also received funds from other sources?
This is what I am referring to when I address “factual constipation.” How are these payments being allocated? Did the owners of the bonds actually have any definable interest in the underlying mortgage loans? If they did, why are these payments not being allocated to the obligations or payments due under those underlying mortgage loans? If they didn’t, why did they get paid anything? How will we ever know without getting a full accounting from all the parties that claim some stake or ownership interest or receivable interest in me is underlying mortgage loans?
It is black letter law as well as common law dating back centuries that nobody can collect the same debt more than once. If they do collect more than once there is a clear right of action by the borrower to collect the excess payment through a lawsuit for unjust enrichment, breach of contract and other causes of action. Here we have an intentional act designed to collect the same debt multiple times. In my opinion this does not merely indicate the presence of an action for fraud, it clearly shows an interstate pattern of racketeering that at one time in our history had the Department of Justice and the FBI busy putting people in jail.
Only in America where the news has turned into an entertainment blitz used by those with the most power and the most money to get their message across, even if it is a total lie. Somehow many if not most people have the impression that the borrowers and the securitized mortgages executed between 2001 and 2009 are not entitled to the relief that any other debtor is entitled to receive––that is the obligation has been reduced for any reason, the borrowers should get credit and if any party receives money in excess of the net amount due after credits, the creditor becomes the debtor owing money to the former borrower.
The bullet point that is being used to distort the perception of our citizens and policymakers is that these borrowers should not get a “free house.” Without getting a full accounting from all parties that advanced funds to and from the original investors who purchased mortgage bonds or collateralized debt obligations and related hedge products, there is no way of knowing the amount of the credit which is due to the borrower. Yes, it is possible that the amount received by the various intermediaries in the securitization chain exceeded the original obligation due from the borrower.
In that case, the borrower owes nothing to the originating lender or the successors to that lender. But if there is still a class of investor or institution that can prove a loss resulting from the nonpayment of the obligation by the borrower (as opposed to non-payment from other parties in the securitization chain) then the law allows that party to recover the loss from those that caused it. That probably includes the borrower, which means that we are not seeking a free house, we are seeking a truthful accounting.
BUT the fact that this obligation theoretically exists does not mean and never did mean under any legal decision in existence that the obligation should be paid to anybody who claims it. By all substantive and procedural law, the obligation is payable to one who proves the obligation and to one who proves it is owed to them and nobody else.
Yet in the view of many judges the challenge by the borrower is viewed as a delay tactic or an attempt to use technical deficiencies to a gain a free house on a lawn that the borrower sought but could not pay. No doubt this is true in some cases. But in nearly all the cases, armies of salespeople using names like “loan expert” pounded on doors and rang the phones of people who had no thought of borrowing money on homes, in many cases, that were debt-free and had been in the family for generations. Now many of those homes are bank owned property.The simple question that needs to be posed to anyone who looks at the borrower as anything other than a victim is which is more likely? Did the owners of 20 million homes enter into a conspiracy to defraud the financial system, half society and our taxpayers? Did these people have the sophistication, education, knowledge, experience or training to pull off such a caper? Or is it more likely that the Wall Street titans stepped over the line and instead of increasing liquidity for the benefit of consumers and small businesses, used their position to deplete the resources of unsuspecting citizens, pension funds, financial institutions and governmental units from the top federal levels down to the smallest local geographical areas?
Countrywide settlement pays fraction to investors
By ALAN ZIBEL (AP) – Aug 3, 2010
WASHINGTON — Former shareholders of fallen mortgage giant Countrywide Financial Corp. are in line to recoup a fraction of their investments now that a Los Angeles judge has approved a settlement worth more than $600 million settlement.
The payoff doesn’t come close to compensating for the money lost by investors. But it could prompt more lenders to settle legal disputes at the center of the housing bust.
Bank of America, which bought Countrywide two years ago, agreed to pay $600 million to end a class-action case filed against the company. KPMG, Countrywide’s accounting firm, will pay $24 million.
Several New York pension funds who served as lead plaintiffs alleged that Countrywide hid how risky its business had become during the housing market’s boom years. Calabasas, Calif.-based Countrywide was once the nation’s largest mortgage lender.
The agreement stands to return about 40 cents per share of Countrywide’s common stock, before legal fees and expenses. Consider that the stock peaked at $45 a share in February 2007, before the financial crisis. So an investor who held 100 shares could bank on receiving $40 for an investment that was once worth $4,500.
Shareholders did receive 0.1822 shares of Bank of America’s stock for each share of Countrywide they owned when Bank of America acquired Countrywide. That worked out to about one share for every 5.5 shares of Countrywide stock. Shares of Bank of America closed at $14.34 on Tuesday. So that same 100 shares of Countrywide would be worth about $261 today in Bank of America stock.
Add the $40 from the settlement and those shares are now worth little more than $300.
Lawyers for the pension funds are requesting $56 million, or 4 cents per share, for fees and other costs.
Investors “will be compensated for a significant portion of the legal damages that they suffered as a result of what we believe was a violation of the securities laws,” said Joel Bernstein, a lawyer for the pension funds. “They won’t be compensated for every penny of that.”
Bank of America has been trying to put Countrywide’s legal problems behind it. In June, the Charlotte, N.C.-based company agreed to pay $108 million to settle the Federal Trade Commission’s charges that Countrywide collected outsized fees from about 200,000 borrowers facing foreclosure.
It reached a settlement Monday primarily to keep legal fees from escalating, a bank spokeswoman said.
“Countrywide denies all allegations of wrongdoing and any liability under the federal securities laws,” said Shirley Norton, a spokeswoman for Bank of America. “We agreed to the settlement to avoid the additional expense and uncertainty associated with continued litigation.”
Plaintiffs attorneys have pursed lawsuits against numerous lenders and investment banks in the wake of the housing market’s devastating downturn, and the Countrywide settlement could encourage even more such cases, said Paul Hodgson, a senior research associate at The Corporate Library, an independent corporate governance research firm.
“There are a lot of suits out there waiting to get launched,” Hodgson said. “I think this is the opening of the floodgates.”
Former Countrywide CEO Angelo Mozilo, former President David Sambol, former CFO Eric Sieracki and former board members were named in the litigation but are not contributing to the settlement.
But it does not end their legal problems. More than a year ago the Securities and Exchange Commission brought civil fraud charges against Mozilo and the two other former executives. Mozilo, the most high-profile individual to face charges from the government in the aftermath of the financial crisis, has denied any wrongdoing.
For Countrywide, “This is only a chapter and not the end of the book,” said John Coffee, a securities law professor at Columbia University.
Filed under: bubble, CASES, CDO, CORRUPTION, education, evidence, expert witness, foreclosure, foreclosure mill, foreign relations, GTC | Honor, HERS, investment banking, Investor, MODIFICATION, Mortgage, Servicer, trustee Tagged: ALAN ZIBEL, AP, Bank of America, countrywide, Joel Bernstein, KPMG, New York pension funds
Aug
14
Fixing the Principal Deficit Problem
I’m not sure I deserve credit for this entry from Richard Widmark, but it has a great deal of merit. It should be expanded and I’ll publish it. His is a bare outline with not much to show the reasoning behind it. Yet I see glimmers of a solution if anyone would listen.
The presenting issue is that none of the homes are worth the paper that was written and signed. We all know that. But we also know that prices vary from place to place. And we know the appraisal fraud was worse in some places than in others. So without establishing another federal agency to go through each closing, how do you fix this? Richard sees a possible way. He gives me credit but I’m not sure why.
Summarizing what I see in Richard’s comment you start with each homeowner using a “stated value” of their home that they come up with. The program could be further refined by use of appraisers, but his point is well taken — if the homeowners can be kept honest we instantly have a correction to reality pricing and that is the only correct starting point for this nonsense.
The offset for the homeowner is that if they state the value too low, then the government or anyone else could come in and buy it. The homeowner is out. The more they want to keep the home, the higher the value they place on the home. In theory this makes sense and while neo-cons would be quick to point out moral hazard, I would be just as quick to point out that any moral hazard would be a drop in the bucket compared to what Wall Street did with these “values.”
A new obligation, note and mortgage is created at the real fair market value of the property. I would argue that the best stimulus for the economy is to use 80% loan to value since the prices are still going down anyway. The creation of a feeling of equity, even if it wasn’t all that solid would do more to prop up the confidence in the economy and confidence in a government that is dealing with reality.
The new loan would be funded. The proceeds would go to anyone who could prove they actually lost money on this deal starting with the purchase of mortgage bonds and ending with the new loan and the new valuation. I would argue that the investors should be required to use their “credit standing” if they can prove it, to hold a portion of the new loan rather than receiving funding from it. The funding would come from conventional lending, especially if you use 80% loan to value and conventional underwriting standards. I would argue that it is in the best interest of the country to make some accommodation (perhaps a lease) to those homeowners who cannot afford to own the property even if the terms are drastically turned in their favor.
Government guarantee programs, as opposed to actual funding will cause actual liquidity in the housing market and allow these deals to go forward and the regular purchase and sale of homes to go forward using a higher degree of certainty about prices. The actual out-of-pocket government cost would be minimal.
But here is the rub. If we don’t adopt the approach used in Germany which was to create and maintain jobs at all costs, then there won’t be anyone to pay rent, mortgage payments or anything else. Housing prices have long been known to vary directly with median income, which in this country has been going down for over thirty years. The drop in median income was “offset” with credit, but we all know how that turned out. So the only way we are going to see our country survive as anything more than a banana republic is by raising median income through jobs programs, new business stimulus, small business loan liquidity and housing liquidity.
The neo-cons can scream all they want about how this is against American principles of self-reliance and small government. This is NOT an ideological question. It is a practical one — do we want recovery or do we want ruin?
FROM RICHARD WIDMARK (ANY RELATION TO THE ACTOR?)
I propose the Neil Garfield bottoms-up and top-down split mortgage options program.
Each underwater home owner is given the right to fix a fair value on his home.
The US Government will guarantee a mortgage on that homeowners own value with the full faith and credit of the US Government: I propose 5-year T-Bond rates for that underlying mortgage.
And then the US Government will give a lesser guarantee on a 2nd mortgage to fill the difference.
The rub: the US Government may condemn the property at will and on 60-days notice at the the price set by the homeowner. And third parties may force than condemnation procedure as well.
And in that fashion – homeowners will be very honest about their homes value.
Homeowners may adjust their value upwards if prices rise – as they will under this propgram.
Filed under: foreclosure
Aug
10
FLA State probes whether three law firms falsified foreclosure documents
Editor’s Note: The REAL BOTTOM LINE POINT is not some technicality wherein the paperwork wasn’t done right, which frankly is reason enough to deny the foreclosure, it is that this “technical” deficiency is “derived” from the fact that there is no note or mortgage or deed of trust that can be enforced. There might not even be any obligation at all if the creditor received payment in full.
LAWYERS TAKE NOTE: Go back to the law books. There are essential differences between the obligation that arises as a matter of law, the note that is offered as proof of the obligation, and the mortgage or deed of trust which is incident to the note.
Don’t dispute the obligation. It DID arise by operation of law. And by operation of law it may still exist, be partially extinguished or entirely extinguished. The documents signed at closing were only PART of the deal in a securitized residential loan. The borrower signs a note and the lender (investor) gets a bond (or evidence of a bond). [THE NOTE AND BOND HAVE DIFFERENT TERMS AND PARTIES BUT THE BOND REFERS TO SECURITIZATION DOCUMENTS THAT IN TURN DESCRIBE LOANS OF WHICH THE BORROWER'S LOAN IS ONE CLAIMED TO BE IN A POOL FORMING THE SOURCE OF REVENUE].
WITHOUT REAL DOCUMENTS SIGNED BY REAL PEOPLE WITH REAL AUTHORITY WITH REAL EFFECTIVE DATES, THE CHAIN IS BROKEN.
The borrower signs the note to a party whom the investor never heard of nor could the investor have uncovered the payee on the note because the information was withheld. The investor receives a bond which is an assignment of all right, title and interest to the receivables, but the security instrument is left where it always was — with the mortgage originator (the only one in county records with an interest). The lender (investor) doesn’t know the borrower and the borrower doesn’t know the lender, while each of them receives different terms and [promises from different parties.
But by operation of law, the originator’s interest is extinguished the moment it arises because it is in most cases a table funded loan in which the originator acted as a broker not a lender, and performed no underwriting tasks. So the legal obligation is extinguished at the same time that the legal obligation arises.
BUT that is not the end of the story.
The equitable powers of the court come into play to prevent unjust enrichment. So the next time a Judge says he doesn’t want the borrower to get a house for free, your answer should be you don’t want anyone to get the house for free. And if the Court wishes to exercise its equitable powers to allocate any equity in the home, after due consideration for the obligations of the borrowers and many others who promised to pay the bond holder then the party seeking affirmative relief must make a short plain statement of ultimate facts upon which relief could be granted and then prove their case.
What these law firms and fabrication mills are doing is fabricating and forging documents to create the illusion that those complexities don’t exist — a conclusion that every Judge would like to reach.
Ultimately, the die is cast — the Courts are required to consider the complexity and force the real party in interest, the party with standing to say they lost money on the deal and to show exactly how they did lose money — not merely point to the borrower’s non-payment.
The non-payment by borrower ONLY comes into play if the payment is due and the “creditor” can prove their standing and prove the obligation, complete with an accounting from beginning to end. The fact that the note SAYS the payment is due does not make the payment due — not if the payment was made or the obligation has been changed or satisfied.The note is evidence that must be proffered though the rules of evidence with authentication from competent witnesses or admission from the borrower. Don’t be so quick to admit that they have the note. Even if it is right in front of you, close examination may well reveal that it came off a color printer that morning.
The reason the die is cast is that ultimately this comes down to property law. The breaks in the chain of title render every title in whichever a securitized loan was involved susceptible to being identified as unmarketable or defective title. This threatens the entire marketplace. It is this issue that these firms and the large banks are continuing to finesse with their freshly color-printed “original” documents, indorsements, assignments and powers of attorney.
NEWS RELEASE
For Immediate Release
August 10, 2010
Contact: Sandi Copes
Phone: 850.245.0150
Sandi.Copes@myfloridalegal.com
FLORIDA LAW FIRMS SUBPOENAED OVER FORECLOSURE FILING PRACTICES
——————————————————————TALLAHASSEE, FL – Attorney General Bill McCollum today announced his office has launched three new investigations into allegations of unfair and deceptive actions by Florida law firms handling foreclosure cases.
The Attorney General’s Economic Crimes Division is investigating whether improper documentation may have been created and filed with Florida courts to speed up foreclosure processes, potentially without the knowledge or consent of the homeowners involved.
The new investigations name The Law Offices of Marshall C. Watson, P.A.; Shapiro & Fishman, LLP; and the Law Offices of David J. Stern, P.A. The law firms were hired by loan servicers to begin foreclosure proceedings when consumers were in arrears on their mortgages.
Because many mortgages have been bought and sold by different institutions multiple times, key paperwork involved in the process to obtain foreclosure judgments is often missing. On numerous occasions, allegedly fabricated documents have been presented to the courts in foreclosure actions to obtain final judgments against homeowners.
Thousands of final judgments of foreclosure against Florida homeowners may have been the result of the allegedly improper actions of the law firms under investigation.
The Attorney General’s Office is also investigating whether the law firms have created affiliated companies outside the United States where the allegedly false documents are being prepared and then submitted to the law firms for use.
Subpoenas have been served on each of the law firms listed above, and the investigations are ongoing.
For an official, downloadable photograph, please visit http://www.myfloridalegal.com/picture.html. Also, follow the Attorney General’s Office on Twitter! http://www.twitter.com/myfloridalegal
Palm Beach Post Staff Writer
Posted: 11:48 a.m. Tuesday, Aug. 10, 2010
The Florida Attorney General’s office announced this morning investigations into the state’s three largest foreclosure law firms for allegations of unfair and deceptive actions.
The firms, sometimes called “foreclosure mills,” are the Fort Lauderdale Law Offices of Marshall C. Watson, Tampa-based Shapiro & Fishman, and the Law Offices of David J. Stern, based in Plantation.
Last month, a lawsuit seeking class action status was filed by a Fort Lauderdale attorney against Stern claiming the firm generated fraudulent mortgage assignments when pursuing foreclosures.
An assignment is held by the entity that has the right to receive mortgage payments.
Stern’s practice, which the lawsuit claims filed up to 7,000 foreclosure cases in Florida every month last year, also is alleged in the suit to have pursued foreclosures for lenders that didn’t own the debt on the homes.
Miami attorney Jeffrey Tew is representing Stern. Last week, he said Stern and his company have done nothing wrong.
“This foreclosure crisis was not created by David Stern, but it is so huge and a lot of people are in very bad shape, so some of the finger-pointing goes to him,” Tew said.
Tew called portions of the lawsuit that claim Stern conspired to confuse ownership of homes “fantastical.”
A press release from Attorney General Bill McCollum’s office says because many mortgages have been bought and sold by financial institutions multiple times, key paperwork involved in the process to obtain foreclosure judgments is often missing.
“On numerous occasions, allegedly fabricated documents have been presented to the courts in foreclosure actions to obtain final judgments against homeowners,” the press release states. “Thousands of final judgments of foreclosure against Florida homeowners may have been the result of the allegedly improper actions of the law firms under investigation.”
Filed under: CASES, CORRUPTION, Eviction, evidence, expert witness, foreclosure, foreclosure mill, GTC | Honor, HERS, Investor, Mortgage, Motions, Pleading, trustee
Aug
04
Yes They ARE Willing to Lie
see this site www.conorix.com
A quick look at the above link shows game in full play.
- Mr Dinan, in an affidavit in Israel stated that UBS paid to the trust “to compensate the trust for it’s overpayment on the purchase on the UBS pool”. The Judges don’t want to hear about this complexity. The fact remains that the LEGAL documents stayed at the bottom of the securitization chain while the money and the receivables were traveling around at light speed at the top. Here is a direct statement of an “overpayment” which we have been talking about on these pages for years. The strategy of the pretender lenders has been to direct the attention (much like a magician does) on the borrower and whether the borrower made payments. The real question is whether any payments were due. If the real lender received real money and was satisfied that the obligation is terminated regardless of the source of the payment. Here we have an overpayment. Who is entitled to that overpayment? This seemingly innocuous statement also reveals and confirms that pools are being dissolved and paid off at the top of the securitization chain while at the bottom the pretender lenders are representing to the court that nothing has changed.
- The language in the pleading which is shown in the above site is obvious doublespeak that is intended to confuse the court and confuse homeowners and their attorneys. The reason they use it is that it works! If you want to win these cases you need to follow the rule: ASSUME NOTHING AND CHALLENGE EVERYTHING.
Filed under: foreclosure
Jul
29
No Mediation Without True Lender
EDITOR’S NOTE: It wasn’t so long ago that I had to practically pulled teeth to get her attorneys to agree with the proposition that nearly all of the foreclosures were fake. Matt Wiedner seems to have his finger on the pulse of what is really happening. I think the most important feature of this article is that mediation is a farce unless the real parties in interest are in the room. It’s really the same issue as we encounter in litigation: STANDING. The fact remains that the great mortgage sting leading to the great recession is still very much in progress. It starts with the servicing companies along with other intermediaries that have no financial interest in either the loan or any mortgage bond purporting to claim ownership of the loan. They have a vested interest in making certain that the home goes all the way through the process of foreclosure because for them that is where the money is. By the time they are done with the foreclosure process they have imposed so many fees, costs and surcharges that there is nothing left to pay the investors who advanced money into a pool from which some mortgages were funded.
When these intermediaries intervene in the process of foreclosure, modification, short sale, or mediation they are merely creating the appearance of good faith when in fact they have no business being involved at all. They continue to waste the time of everyone involved in the process. They are successful in creating the illusion that they are the right people to conduct negotiations or litigation. In fact, their only interest lies in obstructing the process long enough to impose fees that eliminate any value of the loan and eliminate any possibility of a conclusion in which the homeowner is able to achieve a reasonable settlement with the real lender.
Investors, borrowers, and attorneys should aggressively act to enforce the obligation of the party alleging that it is the lender to prove that it is in fact the lender. You can start with a simple question to the company that services the mortgage. To whom have you been paying the borrower’s monthly loan payments? Then ask for proof. Chances are they will do almost anything to avoid answering that question. It is is a simple question. I think that there are many judges that would find it difficult to understand why any “lender” or servicing entity objected to answering that question. It goes to the heart of jurisdiction and to the heart of the illusion which thus far has been successfully created in the minds of most judges and many lawyers.
Matt Weidner Blog
Today, July 28, 2010, 2 hours ago
Fight The Mortgage Servicers Who Bring These Foreclosure Actions
Today, July 28, 2010, 2 hours ago | Matthew D. Weidner, Esq.
The vast majority of foreclosure cases are brought not by the real
parties that have any interest in the outcome of the litigation, but
by nominal, shell Plaintiffs that have been propped up by the
investors or the real parties in interest to pursue the litigation.
Because the vast majority of foreclosures go undefended, this
important point is missed in the vast majority of cases. While it may
be missed in cases, the consequences of this phenomena are profound
and broad reaching.
The failure to identify what parties are really at risk in litigation
prevents courts, policy makers, investors and the general public from
knowing who stands to win or lose in litigation. Concealing the
identity of the real party in interest allows those who made bad
decisions to shirk their responsibility in the litigation, a fact that
is more important when their conduct could very well make them
complicit in creating the situation that led to the litigation. On a
very practical level, litigation pursued by servicers probably
prohibits effective settlement or mediation discussions because they
lack the risk of loss that forces effective resolutions. The
consequences of this are played out hundreds of thousands of times a
day as homeowners try futilely to negotiate a short sale or
modification with the lender. This is especially important now that
circuits across the state are rolling out mediation programs.
FORECLOSURE MEDIATION IS NOT GOING TO WORK UNLESS THE REAL PARTIES IN
INTEREST ARE IN THE COURTROOM
The fact that mediations are not going to work until we have real
players at the table will be borne out in the months to come.
Certainly borrowers will share some of the blame for not actively
participating in the mediation and settlement discussions, but at the
end of the day, another bank owned property is a loss for all parties
involved….there are too many of these properties already.
The key to addressing this problem is to first attack the Plaintiff’s
capacity. The first part of the attack is the fact that most
Plaintiffs are never properly identified in the lawsuit. Courts must
begin to demand knowing just exactly where this company comes from
that is bringing this action. Courts must begin to ask, “Who am I
about to grant this $250,000 judgment to?” then not let the case
proceed until they have a very clear answer to that question.
Our State Division of Corporations or Department of Financial Services
must begin to demand registration of all these nominal and real
plaintiffs. Specific laws are already on the books that demand
registration of foreign corporations and of all trusts, but these
registration requirements are being totally ignored.
OUR STATE IS IGNORING MILLIONS OF DOLLARS IN TAX REVENUE AND FAILING
TO PROVIDE APPROPRIATE REGULATORY OVERSIGHT BY IGNORING THESE LAWS.
Once the nominal plaintiff is properly identified, it’s time to demand
proof that they have the authority to maintain the litigation on
behalf of the real party in interest. This too is addressed by the
capacity argument, but you must also be thinking about this in the
context of preparing discovery, because the proof demanded will come
in the form of the Plaintiffs responses to the discovery requests.
I have previously attached my capacity Motion to Dismiss and I can
tell you that when the facts support this Motion, it is nearly
impossible for the Plaintiffs to wiggle their way around. Even the
most bank-friendly judge will have problems denying this Motion and if
the motion is denied, it sets up a very significant summary judgment
or appeal issue. I’m going to work on this motion again to put some
more recent circuit court cases into it, but as I’ve stated before…
CAPACITY IS A CASE KILLER!
Keep up the good fight!
–
Jake Naumer Union Capital
Licensed Financial Advisor
3187 Morgan Ford
St Louis Missouri 63116
314 961 7600
Fax Voice Mail 314 754 9086
Filed under: foreclosure
Jul
21
MERS CLAIMS VICTORY — AND I CAN FLY
Despite hundreds of decisions over the last three years stating in no uncertain terms that MERS can’t assign anything because it doesn’t have anything to assign, they found this one case to crow about. It all boils down to the fact that since their name is in the title record, they are entitled to notice — something which I doubt will stand very long even in Missouri. Their claim about “due process” is in my opinion a desperate grab for continued existence. MERS will be out of business, in my opinion, within 1 year and probably less. Their records are bogus and unsecured and no not qualify as either public records nor as business records. MERS information is inadmissible as evidence. They disclaim any actual interest in the obligation, note or mortgage, they never touch the documents and they never touch the money nor do they have any record of monetary transactions. The best anyone can say about them is that anyone who is offering a document or testimony based on MERS authority or data is an incompetent witness. The worst I won’t mention here.
Filed under: foreclosure
Jul
21
What if the loan was not securitized, PART three
This week we are examining the consequences of the proposition that the entire securitization chain is in fact a fabrication. I have likened the situation to a trust, interestingly enough, that has never been funded. The intent to fund the trust does not justify treating the asset as owned by the trust. The intent to execute a deed does not justify the intended grantee claiming the property as LEGALLY his. And the INTENT to assign or indorse or deliver a note, does not justify treating it as though the act was completed. Anyone who has been active in the field of mortgage examination, analysis or litigation knows that they have been frustrated in their attempts to receive actual documentation demonstrating the assignment, endorsement, and delivery of the evidence of the obligation that arose when the borrower executed the closing documentation.
In case after case we find that the status of the obligation is at best questionable. The assignment of the note does not appear to be in existence. No evidence appears showing an endorsement of the note. No evidence appears showing that these security instrument has in any way been transferred, nor has such a transfer been recorded. The only time we see such documentation is in the course of litigation. As long as the party making the representation has the word “Bank” in its name the Judges are understandably influenced to believe that such a party would not take the risk of misrepresenting their status intentionally. But they are wrong, as many recorded cases have shown as reported on this blog.
There is a steadfast refusal to respond appropriately to a qualified written request or a debt verification letter. Even when a case goes to litigation, there is a steadfast refusal to respond to discovery. It is only when a court has ordered the showing code actual executed, notarized documentation that these documents of transfer miraculously appear.
The only way we know that a loan has been allegedly securitized news if someone makes that representation in court, usually without the slightest presentation of evidence in support of the representation. We must believe the representation. The courts are inclined to believe the representation; but in case after case, where a judge has taken the time to actually examine the documentation closely, it has repeatedly been shown that the intermediary parties in securitization have clearly fabricated the documents of transfer solely for the purpose of supporting their position in litigation.
This means that at the time a default is declared, or a notice of default is delivered, it is on behalf of an entity with which the borrower has never done business. These entities suddenly flood the room claiming they are part of a securitization chain when no prior notice has been given in any manner, shape or form, despite vigorous attempts on the part of the borrower to discover the identity of the parties involved and the status of their obligation after third-party payments have been recorded and allocated to the loan.
The intermediary securitization parties steadfastly refused to account for third-party payments and affirmatively represent that such payments are irrelevant to the balance of the obligation. Examination of the facts indicates that their reason for taking that position is that they have kept the third-party payments and neither distributed same to investors who advanced to the pool of money from which the loans were funded nor did they even give notice to those investors that they had received such payments.
In fact, there is ample evidence to suggest that the servicers are in many if not most cases simply keeping the money they receive from borrowers and neither forwarding it to the original “lender” on record (the originating lender) nor to any other party.
Therefore we have actual facts emanating from both sides of this confrontation that suggests a legal paradox. On the one hand, it is apparent that the originating lender has been paid in full but remains on record where it is public notice to all interested parties that the originating lender legally owns the obligation, note and security instrument (deed of trust or mortgage). On the other hand, it is equally apparent that the originating lender did not in fact fund the loan made to the borrower. In virtually all cases the loan was a table funded loan as a matter of practice. Under regulation Z a of the Federal Reserve, this is presumptively a predatory lending practice, giving rise to a variety of remedies under the Federal Truth in Lending Act, which the courts have been reluctant to enforce. The act has teeth, and so does the RESPA, but the courts have mistaken the status of the parties and regard those remedies as windfall to the borrower when they are in fact providing a windfall to disinterested parties.
I am now of the opinion that virtually every document executed after the closing that recites some provision for assignment or transfer of the obligation, note or security instrument is void. The substitution of trustee, the notice of default, the introduction of previously unknown parties are all without substance.
Filed under: foreclosure
Jul
15
JPMorgan Chase: We Had So Many Buy-Backs That We Had to Put This Policy in Place
JPMorgan Chase apparently has a new policy that homeowners and their attorneys should know about related to postponing the scheduled dates of trustee sales.
It seems that the giant financial institution screwed up so many times, selling homes they had promised not to sell, and then having to buy them back to fulfill their obligation, that they decided that a new policy was needed to prevent this from happening in the future. Now, they could have considered policies that would have lead to improved internal operations, perhaps as a result of the left hand knowing what the right hand is up to at any given point in time. That line of thinking, however, was obviously abandoned, if it was considered at all, in favor of a policy that would lay blame for the problem at the feet of the homeowners.
CHASE now says that their new policy prohibits the postponing of sales, regardless of the reason, if the request to postpone is made within 7 days… or maybe 5 days… or it could be 2 days (depending on who you talk to at CHASE), before the scheduled sale date.
“We had so many buy-backs that we had to put this policy in place,” explained a CHASE employee, speaking with an attorney who was calling to postpone a sale after hearing that his client had just been approved by CHASE for a loan modification.
“It just seems ridiculous,” said the attorney, who asked to remain nameless so as not to damage his relationship with CHASE. “How can they think it makes sense in today’s environment to refuse delaying the sale of a home, regardless of the reason, based solely on an arbitrary number of days? What’s the big deal, like they need another foreclosure?”
I couldn’t agree more with that sentiment, it should go without saying, but it’s more than that. Over and over again, I see clear evidence that the banks and servicers are not in touch with the reality of the situation in which they are embroiled. As a group, they quite obviously believe that they are doing just fine and therefore free to act as they please. It’s we the people that are having problems that are totally unrelated to them, and they will try to contend, but frankly are getting a headache.
When dealing with Bank of America, on the other hand, you cannot call to postpone a sale, unless you do so WINTHIN 72 hours of the scheduled date.
What do you suppose Wells Fargo’s policy is? I don’t know, but this whole issue is so rational and well thought out that I figure it could be that if you want to postpone a sale with them, you have to call twice on the 15th day before the sale, once on the 9th day, and then the day before, you call after 7:00 AM but before 9:00 AM, let it ring twice, hang up, and then do the hokey pokey and turn yourself around… that’s what it’s all about. This entire subject is completely insane, and anyone who doesn’t see that… well, is a banker.
I have a newsflash for banks and servicers about how the public views what’s going on as related to the foreclosure crisis and the corresponding free fall in housing prices that is causing acute pain to everyone, including most of those working for banks and servicers, although admittedly not those at the very top:
Regardless of what you bankers and servicers think, and regardless of what the letter of the law says is acceptable in terms of attitude or behavior, you are not islands in our society or economy, you will not survive as such, and we expect you to act like you’re citizens of this country, willing to pitch in and lend a hand for the greater good when our nation is under siege. Do you guys get that at all?
Like, remember the afternoon of 9-11? Would Bank of America have told people who walked in on that day that the bathroom was for employees only, that they couldn’t let non-employees use the phone? Did CHASE return checks that day on overdrawn accounts, or report late payments to the credit bureaus? I would certainly hope not, and I don’t think so. Banks would have certainly been within their rights to follow the rules on that day, like any other, but they realized, were they to do such things, the people would be shocked and offended.
Well, the foreclosure crisis is much worse that 9-11 in every way. It has taken more lives, caused more pain, and most certainly will have a much longer lasting impact. I don’t really mean to compare the two, but I’m not sure what else to do in order to make my point clear. The President of the United States wants you guys to modify loans when it makes financial sense to do so, he really does. He can’t make you do anything, I realize, but he’s asked awfully nicely on several occasions, and with good reason.
We’re circling the drain in this country, economically speaking; have you guys at banks and servicers even noticed? It’s true… almost all of us are not doing well at all. We look okay, perhaps, and we don’t tell others how totally freaked out we are, but don’t let the façade fool you. We’re changing too, starting to figure things out, more and more each day. Most of us now know its been you guys all along, and many, many, many of us are going to remember the way you’ve treated homeowners for a long, long time.
And since it’s not even close to being over, and since you guys at banks and servicers are obviously not changing your attitude… here’s a few things you might want to think about…
Consumer spending is roughly 70% of this country’s economy, so as the television commercial says… if we don’t look good, you don’t look good. And we’ve got lawyers now. I know you tried to stop that trend, but you failed. And the court decisions are going our way more and more every day, have you noticed that?
Frankly, you’re not looking all that good at this point, in fact, if I were a betting man, I’d have to say that whatever it is you think you’re winning, may not be worth having. But, as always, it’s up to you.
Mandelman out.
Jul
04
Principal Reduction is Both Fair and the Only Practical Solution
From “Anonymous” in Response to Post about PAID IN FULL
Editor’s Note. I might have misstated the case when I said that investment banks are buying up the lower tranches. It’s not them. It is the people in the investment banks because they have another gambit to run on this. Anonymous, I would appreciate it if you would inquire and confirm, corroborate or rebut this statement.
The rest of your points are of course pearls. AND the specifics you offer make it increasingly clear that a principal reduction at the borrower’s end is only a reflection of the reality of the reduction on the creditor’s end — whether through payment, credit enhancement or waiver of rights that are questionable but nonetheless part of the deal.
One – in response to — “investment banks that are buying up the toxic waste tranches, ” —–investment banks are not buying up toxic tranches -they are consolidating these tranches onto their balance sheets -and writing them off the former receivable pass-through.
Two – we do not know what AIG (or other insurers) were entitled to once they honored the swap protection contract (they actually did not honor – the US Government did) – this information is not available. AIG could be entitled to whole loan collection rights. But, AIG “Obligations” are now owned by the US Government – who, by the way, is the party rejecting loan modifications – despite their law to promote them.
Three – paying an obligation for another party does not release action against the borrower. The debt remains. However, the real party must follow the law. The real party remain undisclosed. The real creditor must be divulged. And, any failure to disclose the real and current creditor deprives the borrower of the right to a modification negotiation with the actual creditor. We all know, by know, servicers are not the creditor.
Four- Use the paid “tranches” as evidence that the structure of the REMIC – as once originated (by cut-off date – ha ha) – is gone. Mezzanine tranche holders are only paid – if there is anything left after the A tranches holders are paid. And, this is ONLY for current pass-through. If the A tranches have been paid – in full- by swaps -there is nothing left to be paid to any M tranche holders. The “waterfall” structure is gone – thus, so is the pass-through REMIC that once organized the structured tranches.
Five – Balance sheet accounting is critical – who is accounting for the right to collect the loan? That is the fundamental question.
Six – As to “holder” of the note – there have been good challenges to the negotiability of the note posted here (see Collete McDonald). and post re- Professor at Pepperdine.
If you try to challenge strictly on fact that someone else “paid” the loan amount for you – you will not win. This has already been tested in debt collection. It will not work. But, this is greater than “debt” collection – as the current creditor is supposing to be negotiating with you according to Congressional law. You need to know your creditor – until you find that out – the foreclosure is a farce and and a fraud – upon you – and upon the court.
Finally, as Neil has stated many times, trying to get a complete discharge or “free home” will not work. Thus, trying to say the DEBT does not exist – will not hold. Only way you can possibly go this route is to claim that the account does not belong to you. And, that could be a focus – when a loan number has been changed (need less to say – your new loan number is not in the PSA “attached” “Mortgage Schedule.”
And, as PJ has also said – principal reduction is the key. There needs to be principal reduction with a fair interest rate.
Judges will not like hearing that the debt has been paid – and, therefore, you owe nothing. Need to shatter their “trustee” bogus Trust structure – and demand to know the current creditor. And, pursue counter-claims for a fraudulent foreclosure and fraud upon the court.
TO quote trespass unwanted,
I know nothing, and if I think I know something I know nothing. I don’t give legal advice because I don’t know legal things.
Filed under: foreclosure
Jun
28
WITHOUT RECOURSE: Hangman’s Noose
By Collete McDonald
Editor’s Note: Ms. McDonald hits the nail on the head with this article. You should incorporate it word for word in any relevant memoranda. Why is this important?
Because most of the “notes” (assuming they were the real notes and were timely indorsed and not back-dated) are presented as having been indorsed “without recourse.” Your opposition is counting on the fact that you don’t know the UCC, and you don’t know anything about indorsements.
This is another case where the instrument could appear valid on its face but for the fact that it is a fake. In this case the words “without recourse” on a note (executed as evidence of an obligation on a home loan) is contradicted by the very instrument that authorizes the indorsement — the PSA (Pooling and Servicing Agreement). The PSA ALWAYS provides for conditions, terms and provisions that are exactly the opposite of “without recourse.” These conditions have a negative effect on the negotiability of the instrument. So not only do we have a case where the “assignment” or indorsement” was merely an offer that was never accepted (and could not be accepted as per the terms of the PSA) but you also have an instrument that could not be negotiated under the terms expressed on it.
WHAT ARE THE CONDITIONS EFFECTING THE INDORSEMENT “WITHOUT RECOURSE?”: Well the main one is that the pooling and servicing agreement states that if the loan becomes non-performing, the assignor must replace it with either cash or another performing loan. Nothing could be more clear that the indorsement was WITH RECOURSE.
The bottom Line: Most if not all “assignments” or “indorsements” are without effect, which means that the party having legal title to the instrument is the party named on it. And THAT means that each time the opposition attempts to establish authority under the chain of securitization, they are actually making the case that they have no such authority. You can’t come to court and say I am the Trustee for asset backed Pool XYZ which has ownership of this loan” and then turnaround and say you also have authority (legal authority supporting the power of sale in non-judicial states and the standing to foreclose in judicial states) to represent the “lender.” Not if the “lender” is named on the note as payee and on the mortgage or deed of trust as the lender.
If they want to establish some equitable right to enforce the note, they MUST file a judicial action.
WITHOUT RECOURSE:
A phrase used by an endorser (a signer other than the original maker) of a negotiable instrument (for example, a check or promissory note) to mean that if payment of the instrument is refused, the endorser will not be responsible.
An individual who endorses a check or promissory note using the phrase without recourse specifically declines to accept any responsibility for payment. By using this phrase, the endorser does not assume any responsibility by virtue of the endorsement alone and, in effect, becomes merely the assignor of the title to the paper.
A without recourse endorsement is governed by the laws of commercial paper, which have been codified in Article 3 of the Uniform Commercial Code (UCC). The UCC has been adopted wholly or in part by every state, establishing uniform rights of endorsers under UCC § 3-414(1).
A without recourse endorsement is a qualified endorsement and will be honored by the courts if certain requirements are met. Any words other than “without recourse” should clearly be of similar meaning. Because the payee’s name is on the back of the note, he is presumed to be an unqualified endorser unless there are words that express a different intention. The denial of recourse against a prior endorser must be found in express words. An implied qualification, based on the circumstances surrounding the endorsement to a third party, will not be recognized by the courts. An assignment of a note is generally regarded as constituting an endorsement, and the mere fact that an instrument is assigned by express statement on the back does not make the signer a qualified endorser.
The qualification without recourse, or its equivalent, is limited to the immediate endorsement to which it applies. It may precede or follow the name of the endorser, but its proximity to the name should be such as to give a subsequent purchaser reasonable notice of the endorsement to which it applies.
A person might agree to accept a check without recourse if the person believes she could collect the money in question. Often the purchaser of such a note will acquire it at a substantial discount from the face value of the note, in recognition that the purchaser can only seek to collect the money from the original maker of note.
An example of a without recourse note is a personal check written by A, the maker, to B, the payee. B, in turn pays off a debt to C by endorsing the check and adding the without recourse phrase. If A’s bank refuses to pay C the check amount because A has insufficient funds in his checking account, C cannot demand payment from B. C will have to attempt to collect the money from A.
Filed under: CDO, evidence, foreclosure, foreclosure mill, GTC | Honor, HERS, Investor, Mortgage, Pleading, STATUTES, trustee Tagged: assignment, Collete McDonald, conditions, indorsement, legal title, negotiable instrument, PSA, UCC, UCC § 3-414(1)., without recourse
Jun
03
In States Requiring Mediation
More and more states are following the example set by the federal government in requiring mediation or modification attempts before going forward with litigation. We think that is a good idea in theory, but without the teeth that is in the enabling rules and statutes in Florida, you are just going to end up playing the same game of “who’s my lender.?”
Even in Florida, as in all cases, YOU must bring up the the issue of the authroity of the person being offered as a decision-maker.” 99 times out of a hundred they are not. The most they have is some authority from a dubious source to agree to some minor adjustments, like adding the payments to the back end of the mortgage.
Make no mistake about it — there is no decision-maker unless they have full power over that mortgage. That means they could if they want to, reduce the principal. They will argue that nobody has that power because the securitization documetns prohibit it. That is their little way of getting your eye off the ball.
Of course the securitization documents don’t allow certain things to be done to the mortgage. Those documents are aimed at restricting the actions of the agents of the principal (i.e. the creditor/lender).
It is ONLY an authorized representative of the investors who DO have the final say over any settlement that is needed in that mediation room and proof of that authority, which means notice to the investors, which means disclosing that notice to the investors and proof that a sufficient number of investors under the documents have approved the grant of decision-making authority to modify, amend, alter or change the obligation, note and/or mortgage.
Unless the person offered for the mediation has the authority to sign a satisfaction of mortgage on whatever terms he/she sees fit, they are not the decision-maker. If the other side refuses to comply move for contempt, sanctions and to strike their pleadings with prejudice.
If the other side fights this and they probably will, you should probably argue that this is a flat out admission that the principal (i.e., real party in interest, creditor, lender) is not represented in the proceedings because the other party in your litigation refuses to disclose them contrary to the requirements of federal law, state law and the rules of civil procedure.
If they can’t produce this authority then they also lack authority to foreclose. It might even be an admission that they are seeking to steal the house, put in their own entity and keep the proceeds of sale contrary to the interests of the investor who is entitled to be paid and contrary to the borrower who is entitled to a credit against the obligation that is due.
Filed under: CASES, CORRUPTION, Eviction, expert witness, foreclosure, foreclosure mill, foreign relations, Forensic Analysis Workshop, GTC | Honor, HERS, investment banking, Investor, MODIFICATION, Mortgage, Motion Practice and Discovery, securities fraud, Securitization Survey, Servicer, trustee, workshop Tagged: authority, decision-maker, Florida Modification, investors, mediation, modification, Mortgage, note, Obligation
Jun
02
Fannie Mae Policy Now Admits Loan Not Secured
29248253-Mers-May-Not-Foreclosure-for-Fannie-Mae
Editor’s Note: Their intention was to get MERS and servicers out of the foreclosure business. They now say that prior to foreclosure MERS must assign to the real party in interest.
Here’s their problem: As numerous Judges have pointed out, MERS specifically disclaims any interest in the obligation, note or mortgage. Even the language of the mortgage or Deed of Trust says MERS is mentioned in name only and that the Lender is somebody else.
These Judges who have considered the issue have come up with one conclusion, an assignment from a party with no right, title or interest has nothing to assign. The assignment may look good on its face but there still is the problem that nothing was assigned.
Here’s the other problem. If MERS was there in name only to permit transfers and other transactions off-record (contrary to state law) and if the original party named as “Lender” is no longer around, then what you have is a gap in the chain of custody and chain of title with respect to the creditor’s side of the loan. It is all off record which means, ipso facto that it is a question of fact as to whose loan it is. That means, ipso facto, that the presence of MERS makes it a judicial question which means that the non-judicial election is not available. They can’t do it.
So when you put this all together, you end up with the following inescapable conclusions:
- The naming of MERS as mortgagee in a mortgage deed or as beneficiary in a deed of trust is a nullity.
- MERS has no right, title or interest in any loan and even if it did, it disclaims any such interest on its own website.
- The lender might be the REAL beneficiary, but that is a question of fact so the non-judicial foreclosure option is not available.
- If the lender was not the creditor, it isn’t the lender because it had no right title or interest either, legally or equitably.
- Without a creditor named in the security instrument intended to secure the obligation, the security was never perfected.
- Without a creditor named in the security instrument intended to secure the obligation, the obligation is unsecured as to legal title.
- Since the only real creditor is the one who advanced the funds (the investor(s)), they can enforce the obligation by proxy or directly. Whether the note is actually evidence of the obligation and to what extent the terms of the note are enforceable is a question for the court to determine.
- The creditor only has a claim if they would suffer loss as a result of the indirect transaction with the borrower. If they or their agents have received payments from any source, those payments must be allocated to the loan account. The extent and measure of said allocation is a question of fact to be determined by the Court.
- Once established, the allocation will most likely be applied in the manner set forth in the note, to wit: (a) against payments due (b) against fees and (c) against principal, in that order.
- Once applied against payments, due the default vanishes unless the allocation is less than the amount due in payments.
- Once established, the allocation results in a fatal defect in the notice of default, the statements sent to the borrower, and the representations made in court. Thus at the very least they must vacate all foreclosure proceedings and start over again.
- If the allocation is less than the amount of payments due, then the investor(s) collectively have a claim for acceleration and to enforce the note — but they have no claim on the mortgage deed or deed of trust. By intentionally NOT naming parties who were known at the time of the transaction the security was split from the obligation. The obligation became unsecured.
- The investors MIGHT have a claim for equitable lien based upon the circumstances that BOTH the borrower and the investor were the victims of fraud.
Filed under: foreclosure
May
27
VICTORY IN MONTANA: PRELIMINARY INJUNCTION ISSUED AGAINST MERS, RECONTRUST, AND COUNTRYWIDE
VICTORY IN MONTANA: PRELIMINARY INJUNCTION ISSUED AGAINST MERS, RECONTRUST, AND COUNTRYWIDE Today, May 25, 2010, 4 hours ago | Jeff Barnes May 25, 2010
A Montana Circuit Judge entered a preliminary injunction yesterday enjoining MERS, Recontrust, and Countrywide from undertaking any action to sell, encumber, or transfer the borrower’s property during the pendency of the borrower’s lawsuit challenging a non-judicial foreclosure. The Notice of Trustee’s Sale fraudulently represented that there was an “obligation owed to MERS” when there was never any such obligation, and there is no evidence of any lawful assignment of either the Note or the Deed of Trust from the original lender to anyone. None of the Defendants appeared for the hearing.
The borrower had previously obtained a Temporary Restraining Order which stopped the Trustee’s Sale. Yesterday’s ruling converted the TRO into a preliminary injunction for the duration of the litigation.
This is FDN’s second victory in Montana. The borrowers in both cases are represented by Jeff Barnes, Esq., assisted by local Montana counsel Eric Hummel, Esq.
Filed under: CASES, CDO, CORRUPTION, Eviction, foreclosure, foreclosure mill, Forensic Analysis Workshop, GTC | Honor, HERS, MODIFICATION, Mortgage, Motion Practice and Discovery, securities fraud, Securitization Survey, Servicer, STATUTES, trustee, workshop Tagged: assignment, countrywide, Eric Hummel, fraudulent representation, HERS, Jeff Barnes, lawful assignment, MERS, Montana, notice of trustee sale., Preliminary Injunction, ReconTrust, TRO
May
26
MERS Bashed Again as Not Owning Anything
Therefore they cannot convey any interest in a note, mortgage, debt or obligation since they expressly do not own it and in fact openly disclaim it.
And stating the obvious the decision says that that note is payable to a specific payee. It must therefore be endorsed by that payee for it to be transferred.
SEE MERSdecision 5-20-10
Filed under: CASES, CORRUPTION, Eviction, expert witness, foreclosure, foreclosure mill, Forensic Analysis Workshop, GTC | Honor, HERS, investment banking, Investor, Motion Practice and Discovery, securities fraud, Securitization Survey, Servicer, STATUTES, trustee, workshop Tagged: assignments, Bayshore, debt, endorsements, HERS, MERS, Mortgage, note, Obligation, REAL PARTY IN INTEREST, standing
May
21
Assignments: Why Were They Needed?
Since the entire scheme was based upon using money advanced by investors, why are they not the beneficiaries on the mortgage or deed of trust and why were they not the payee on the note?
The investors would not have advanced any money without getting a certificated or non-certificated interest in the pool of assets “purchased” with money from a pool of money collected from a group of investors.
There could be no certificate of asset backed series xxx-2006A without there being something in existence bearing the name asset backed series xxx-2006A.
There could be no entity (SPV) bearing the name asset backed series xxx-2006A without a framework of securitization of money (SIV) and assets (SPV).
That framework could not exist but for the existence of securitization documents including the pooling and service agreement.
Thus all this must be in place before accepting the first application for a loan.
Therefore when the loan closed the true beneficiaries and payees on the note were known and should have been named as such without a nominee (MERS) or any other intermediaries. Of course THAT would have ceded control over the pool of assets to the owners of that investment, something that neither the investment bank nor any of the other intermediaries wanted. It would mean that loans and claims could be modified or settled easily since all parties are known.
It would also mean that if the intermediaries did anything wrong, like for example investing only part of the money into mortgages and keeping the rest, BOTH the investor and the borrower would probably find out. And it would mean that third party payment would be made to the investors and the investors would deduct those payments from the balance due on the obligation and statements sent out to borrowers would reflect the change _ i.e., either a deduction or subrogation of rights, spreading the ownership out to the third parties who made the payments.
And THAT would mean all those illicit profits would be the subject of liability and damages in lawsuits and maybe criminal liability. So the pretender lenders are right. This is a simple matter — or would be — if they had played by the rules and named the right parties to begin with. Maybe they would even have used industry standard underwriting principles since there was real risk involved.
Filed under: foreclosure
May
19
House for Free? Don’t get Caught in that Trap
I’m probably partly to blame for this notion so I want to correct it. The goal is NOT to get your house for free, although that COULD be the result, as we have seen in a few hundred cases. The simple answer is “No Judge I am not trying to get my house for free, I’m trying to stop THEM from getting my house for free. They don’t have one dime invested in this deal and payments have been received by the real creditors for which they refuse to give an accounting.”
The obligation WAS created. The question is not who holds the note but to whom the note is payable, and what is the balance due on the note after a full accounting from the creditor.
So don’t leave your mouth hanging open when the Judge says something like that. Tell him or her that they have the wrong impression because they are getting misinformation from the other side which is trying to get a lawyer’s argument admitted as evidence. Tell him you want the deal you signed up for — including the appraised value that the lender represented to you at closing.
Don’t say you won’t pay anything. Offer to make a monthly payment into the court registry — not in the amount demanded, but for perhaps 25% of the amount demanded. Tell him you refuse to pay someone who never lent you the money, who is not on the closing documents and is relying on securitization documents which contain multiple conditions, many of which they have violated.
Tell the Judge you deny the default because you know they received third party payments and they refuse to allocate the payments to your loan, and they refuse to inform you or the Court as to whether these third party insurers and guarantors have equitable or legal rights of subrogation. Subrogation is taking the place of another person because you are the real party in interest.
“Why should I lose my house just because I didn’t pay them. The note isn’t payable to them. Even if they have an assignment, it violates the terms under which they are permitted to accept it, and even if they were permitted to accept it, it wold be on behalf of the true creditors who were the investors who advanced the funds and now could be anyone because of the transactions in which the investors were paid or settled.
“The question is not whether I made a payment, it is whether a payment is due after allocation of third party insurance, credit default swap and guarantee payments. Who are they to declare a default when they refuse to give a full accounting?”
Filed under: foreclosure
May
12
Shack; JPM, Trustee Lacks Standing, Vacates Foreclosure
The true answer is that securitization is a process that is still on going and not an event.The Real Party in Interest (and the real amount of principal due, if any) is in a state of flux hidden by obscure, hidden or “confidential documentation.” Don’t make it your problem to unravel it. Use your strength to force THEM to prove their claim whether it is in a judicial or non-judicial proceeding.
Editor’s Comment: In case you haven’t noticed, this case, along with some others I’ve heard about but not received, closes the loop. The Pretender Lenders have now tried to use all the major parties and some of the minor parties in foreclosures and when tested have failed to prove standing. standing is a jurisdictional matter and it basically boils down to “You don’t belong here, you have no rights to enforce, you have no interest in this litigation, so get out of here and don’t come back.”
They tried MERS, Servicers, Foreclosure Specialty processors, Trustees, originating “lenders” and they come up empty. why because they are all intermediaries and as Judge Holloway put it, the note is not payable to them, the mortgage does not secure them, the obligation is not due to them and therefore they can’t proceed. In non-judicial states they get around this requirement unless the homeowner brings suit.
So who is the real party in interest? See the Fordham Law Review article posted on this blog more than two years ago “Will the Real Party in Interest Please Stand Up.”
The answer isn’t easy, but the strategy is very simple — don’t accept responsibility for the narrative or you will be taking on the burden of proof in THEIR case. They have the information and you don’t. The true answer is that securitization is a process that is still on going and not an event. The Real Party in Interest (and the real amount of principal due, if any) is in a state of flux hidden by obscure, hidden or “confidential documentation. Don’t make it your problem to unravel it. Use your strength to force THEM to prove their claim whether it is in a judicial or non-judicial proceeding.
The real reason for them NOT simply bringing in the investors who at least WERE parties in interest is multifold:
- The meeting of the investor with the borrower will result in comparing notes and the fact that not all the money advanced by investors was actually invested in mortgages will be “problematic” for the investment bankers who put this scheme together.
- The meeting of the investor and borrower could result in an alliance in litigation in which the shell game would be impossible.
- The meeting of the investor and the borrower could result in a settlement that cuts the servicers and other intermediaries out of the gravy train of servicing fees, foreclosures with rigged bids, etc.
- The conflict of interest between the intermediaries and the investors might become evident, and lead to further litigation both from the investors and the SEC, state attorneys general and Department of Justice.
- The investment vehicle (the “trust” or Special Purpose Vehicle) might have been dissolved with the investors paid off and/or with the “assets” resecuritized into a new BBB rated vehicle. This could lead to the nuclear question: what if any, is the balance due in principal on this OBLIGATION. Warning: If you let the narrative shift to the NOTE (which is merely evidence of the obligation) you risk being entrapped by the simple question “Did you make your payments under this note?” This immediately puts you on the defensive BEFORE they have established THEIR case. Since THEY are the party seeking affirmative relief, THEY should establish the foundation first.
- And the last thing that comes to my mind is the last thing anyone wants to hear — was this obligation satisfied in whole or in part by third party payments through credit enhancements or federal bailout?
Hon. Arthur M. Schack does it again!
JP Morgan Chase Bank, N.A. v George
2010 NY Slip Op 50786(U)
Decided on May 4, 2010
Supreme Court, Kings County
Schack, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.
Decided on May 4, 2010
Supreme Court, Kings County
JP Morgan Chase Bank, N.A., AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-AR4, Plaintiff,
against
Gertrude George, IVY MAY JOHNSON, GMAC MORTGAGE CORPORATION, DANIEL S. PERLMAN, et. al., Defendants.
10865/06
Plaintiff- JP Morgan Chase Bank
Steven J Baum, PC
Amherst NY
Defendant- Gertrude George
Edward Roberts, Esq.
Brooklyn NY
Defendant- Ivy Mae Johnson
Precious L. Williams, Esq.
Brooklyn NY
Arthur M. Schack, J.
_______________________________________________
Accordingly, it is
ORDERED, that the order to show cause of defendant IVY MAE JOHNSON, to vacate the January 16, 2008 judgment of foreclosure and sale for the premises located at 47 Rockaway Parkway, Brooklyn, New York (Block 4600, Lot 55, County of Kings), pursuant to CPLR Rule 5015 (a) (4), because plaintiff, JP MORGAN CHASE BANK, N.A., AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-AR4, lacked standing to commence the instant action and thus, the Court never had jurisdiction, is granted; and it is further
ORDERED, the instant complaint of plaintiff JP MORGAN CHASE BANK, N.A., AS TRUSTEE FOR NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2004-AR4 for the foreclosure on the premises located at 47 Rockaway Parkway, Brooklyn, New York (Block 4600, Lot 55, County of Kings) is dismissed with prejudice.
This constitutes the Decision and Order of the Court.
ENTER
___________________________
Hon. Arthur M. SchackJ. S. C..
Filed under: CASES, CORRUPTION, Eviction, expert witness, foreclosure, foreclosure mill, GTC | Honor, HERS, investment banking, Investor, MODIFICATION, Mortgage, Motion Practice and Discovery, securities fraud, Servicer, STATUTES, trustee Tagged: Arthur M. SchackJ. S. C, Fordham Law Review, George, GMAC MORTGAGE CORPORATION, JPM, lender, loan originator, MERS, NOMURA ASSET ACCEPTANCE CORPORATION MORTGAGE PASS-THROUGH CERTIFICATES, non-judicial, originator, Precious L. Williams, REAL PARTY IN INTEREST, SERIES 2004-AR4, servicer, shack, standing, Steven J Baum, trustee, vacate, Vacate foreclosure judgment
