Tag Archives: chain of title

POINT – COUNTERPOINT: SECURITIZATION FAILURE EXPLAINED

“JANE … YOU IGNORANT SLUT!”

(As exclaimed by Dan Akroyd to Jane Curtin on Saturday Night Live …)

Sorry … I had to do that because you can’t say that to opposing counsel in foreclosure court … as much as you’d like to!  Still, I’m not an attorney, I can’t render legal advice, but I have been listed on at least one attorney’s “expert witness list” for upcoming trials! 

My blood boils when I’m consulting at a foreclosure trial and I hear the bank’s attorney claim that the borrower has nothing to do with the PSA because I know damned well that the borrower (nor his counsel) has a comeback that they can waylay on the bank’s attorney in point-counterpoint fashion, which is why I went with the opener that I did.

The bank’s attorney doesn’t want the borrower opening up the subject of securitization failure, because in so doing, the REMIC finds itself without standing to foreclose.  End of story … because the last attempt is always (when Fannie Mae and Freddie Mac aren’t involved) the use of MERS (through servicer fraud) “assigning” a note a mortgage years later into a REMIC trust. Securitization failure may look obvious on paper (what’s recorded in the land records) but it cannot account for the path the note didn’t travel.

The last trial I attended, I saw the bank’s attorney “step in it”.  You could hear her tiny little heels squish in the pile of dung she just sunk into asking the expert witness (who understands securitization) about the “closing date”, then suddenly realizing that she opened Pandora’s Box.  Sadly, the foreclosure defense attorneys need to climb on board with this thought process, as elaborate as it might be.  I’m going demonstrably put it into as easy a graphic as I can, using various scenarios (“submitted for your approval”, as the Twilight Zone‘s Rod Serling would say from the grave). You have to educate the judge!  You have to!  I don’t care if the other side jumps up and down with objections, you have to keep on keeping on.

FEW ATTORNEYS REALLY “GET IT”

First, let me share a pdf with you, written by (in my book) one of the most brilliant attorneys on record:

charlies-wallshein_securitization-fail-part-one-001

The foregoing even has “affirmative defenses” included in this paper, if you know what you’re looking for.  Thanks to Charlie, I used a chunk of his explanation and diatribe in a Texas Rule 736 motion I drafted for use by counsel, which, when coupled with a Rule 12 motion by the attorney (a motion demanding to know who the law firm was representing in its Application to foreclose), the law firm “non-suited” the foreclosure case (made it go away)!

I shall further elaborate, as I do in chain of title assessments where the last party to allegedly have the note and mortgage transferred to them is the REMIC … years after the fact.  The borrowers and their attorneys focus on the Pooling and Servicing Agreement and miss the whole enchilada completely.  It’s not just the PSA we’re talking about here folks!  It’s the entire “sales pitch” … I’m talking about the 424(b)(5) prospectus (and none other than).

The PSA does NOT contain your loan number!  The prospectus contains your loan number!

The prospectus contains well more of the governing regulations than the PSA, all neatly signed under penalty of perjury under the Sarbanes-Oxley Act!   When the bank’s attorney says the Borrower has nothing to do with the Assignment, why then are you stumped?  Why can’t your attorney object?  It can’t be because of ignorance, right?

However, just because your loan number is listed within the prospectus doesn’t mean that your loan is actually in the pool (or made the pool before the cut-off date).  Look at it in the simplest of terms:

  1. Why do lenders use the MERS® System?  

The lenders use the MERS® System as a means to register and securitize mortgage notes within the secondary markets.  However, before the note (and its accompanying electronic paperwork) can be traded (transferred, sold, resold, multiple times over), it has to be digitally uploaded into the MERS® System, which was created for the purposes of electronically transferring the note!  

This is why (when you look at your loan on the MERS® Servicer ID page, the loan reads “ACTIVE”.   That means, it’s “actively” being transferred (potentially multiple times over) from one entity to another while the Servicer’s name remains constant.  When you see the word “INACTIVE”, it means the loan is no longer being traded, most likely because it is NON-PERFORMING!  Who could get away with selling non-performing loans?  Only in the securities market can you get away with that!  This goes back to the late Judge Arthur Schack in the HSBC v. Taher case, which was reversed and assigned to another judge, because the powers that be (the Appellate Department) said Schack went too far (in vetting the truth about robosigning using parties claiming to be officers of MERS). So, as long as the note doesn’t end up in its “final resting place” (as claimed by REMICs in millions of foreclosures), we have an “ACTIVE” note trading within the MERS® System.

2. The servicers who subscribe to the MERS® System purposefully abuse it!

The MERS® System, as I have previously noted in other posts, as well as in the OSCEOLA COUNTY FORENSIC EXAMINATION, allows servicers and their minions and subordinates within their default divisions or their contracted third-party document mills, to “manufacture” standing by creating assignments out of thin air, utilizing the name Mortgage Electronic Registration Systems, Inc., accompanied by what is proclaimed an “official title”, with only flimsy, non-notarized proclamations by William Hultman or his “successors” within MERSCORP Holdings, Inc. potentially attached to the pleadings as a means of “verification” of the use of the title by the “nominee” (who also thinks it’s a beneficiary, which it’s not).

Regardless of their “signing authority” or other Limited Power of Attorney proof of anything (as Limited Powers of Attorney can be falsely created to reinforce a claim by the REMIC that certain servicers are covered to do exercise certain powers under the power of attorney), there is nothing in the MERS Rules of Membership that forces the users of the MERS® System to “play by the rules”.  In fact, all of the users of the MERS® System have to “indemnify” MERS and its parent of any liability in connection with the creation of these documents, which means it’s “open season” in the fraud department in the creation of these documents.

   3. Parties outside of the MERS® System are allowed to participate with the servicers in creating the documents employing the use of the MERS® System! 

During the Osceola County Forensic Examination, my team discovered (in hundreds of assignments) the use a law firm in the creation of the assignments.  Many times, the assignment itself contained the words, “Prepared by:”, with either the name of the law firm, a law firm attorney or a non-lawyer working for the law firm.  My take here is that this is where you have RICO issues because the servicer, a law firm, a notary and multiple employees of both, are tasked with the creation of the document.  We are not just talking civil RICO issues here, but also criminal RICO, because the document is generally created under the direction of the law firm handling the foreclosure (in mortgage states), or in the alternative, a document processing company (e.g. LPS, CoreLogic, etc.) being involved in engineering the “proper parties” onto a piece of paper that is going to be relied upon in court to foreclose on the property.  The law firm handling the foreclosure will then rely on an assignment that it was involved in creating to steal the home, knowing full well that the assignment contains multiple misrepresentations which are not provable because the assignments clearly show the note and mortgage were transferred into the REMIC years after the Cut-off Date!

This is why I intend to write a follow-up paperback aptly titled, “How To Screw MERS!” (or something like that), to explain how to circumvent the MERS®System in your dealings in real estate (part of your due diligence before you buy a piece of property using a “MERS Member”, which is false, because the alleged “MERS Members” aren’t really “members”; they’re user-subscribers of the MERS® System, through the use of an executory contract with MERSCORP Holdings, Inc. (which is nowhere to be found on your note, your security instrument or the assignment).

4. The “Electronic Tracking Agreement – Warehouse Lender” clearly shows who the “players” are … and MERSCORP Holdings, Inc. is one of them!

If you look at the attached: eta_warehouse_template_v6-mers-and-borrower4, you will see what I am describing here, as to who the “electronic agent” really is. Is this disclosed to you at closing?  Hi there boys and girls, can you say “Truth-in-Lending Act violations right out of the gate?” … sure you can!  (playing on Mr. Rogers’ voice).

Do you see where your “name” is inserted as to “Borrower”?   Didn’t think so.  That’s because you’re not the Borrower, the originating lender or mortgage broker (like that pesky “Rocket Mortgage” and other digital online services that make it so easy to “get approved in minutes” for a mortgage loan).

Notice in the third paragraph where it says, “the Borrower is obligated to pledge the Mortgage Loans to the Lender”?  Notice the term used “Loans” is in the plural?  That’s because the “Borrower” in this agreement is the originating mortgage broker/lender and the “Lender” in this agreement is the “Interim Funding Lender” (like Countrywide, WaMu, IndyMac, etc.).  Look who the “Electronic Agent” is:  MERSCORP Holdings, Inc.!   What is an agent?  (hint: a nominee)

Then why isn’t MERSCORP Holdings, Inc. (the parent of MERS, the entity with all the money) plainly stated on your loan paperwork, including your Note? Where is the Truth-in-Lending Act when you need it regarding non-disclosure of the real “truth”.  It was hidden from you at closing?  That might even bring about suspicion for a RESPA violation as well.

Notice within Paragraph 4 of this agreement where it says that the “Lender and the Borrower desire to have certain Mortgage Loans registered on the MERS® System (defined below) such that the mortgagee of record under each Mortgage (defined below) shall be identified as MERS;”   Did you ever sign a paper like this at closing?   I’ll save you the time looking for it.  You didn’t.  That’s because the “Borrower” in this agreement, involving the placement of your loan into the MERS® System IS NOT YOU!  Did you agree to that?   Didn’t think so.  But it sure the hell explains how your loan got “registered” on the MERS® System, doesn’t it?

This was all created to be part of the securitization process.  This is why the entire process is flawed … and why it needs to be eliminated … and why the parties who created it need to be in prison!  The MERS®System is the platform through which the RICO acts were committed.  Indemnification or not, the platform is there … and it’s knowingly being abused.

YOUR NAME AND ORIGINAL LOAN NUMBER IS ON THE ASSIGNMENT!

This begs the question: How can you NOT be involved?  The assignment is talking about your very loan and mortgage (or deed of trust) being conveyed by the employees of the mortgage loan servicer (who can’t get the originating lender to do it because it’s more than likely defunct), whose employees create the document out of thin air, under the instruction from: (a.) one of the major title companies; (b.) the foreclosure mill attorneys involved in the litigation; and (c.) a third-party document mill tasked by the servicer to keep the transaction at arms length to avoid suspicion.  In any case, the document is a fraud.  They know it. And you know it.  But the judges don’t know it because no one knows how to tell the judge a thing or two about the real aspects of securitization because they know that 99% of these assignments are fraudulent and by ruling against the bank on securitization failure, they would open up a “three-ring circus” in their courtroom while jeopardizing their political futures.

The servicer uses its own “loan number” which generally does not match yours.  But when the bogus assignment is drafted (and many times backdated for a purpose) by the servicer’s employees or that of the law firm or third-party document mill, your original loan number and name is on the assignment.  Why not simply ask the judge to take your name off that document (since you’re not involved in it) and we’ll call it a day?   You know how that will end up, right?

You first have to object to the attorney’s comment that you’re not involved in the PSA, because technically, the PSA talks in general about operations within the REMIC itself.  If you’re going to enter the PSA as evidence, you’re shortchanging yourself and your case.  What you should be entering is the entire 424(b)(5) prospectus.  It still costs $4.00 a copy from sec.gov on their forms page.  They have a contract with United Parcel Service to ship it to you at no charge.  You pay $4.00.  Get the whole prospectus.  The front end of the prospectus is what contains the cut-off and closing date, not the PSA.  Have you ever noticed that, or did you just take someone’s word for it?

exhibit-9_occ-asset-securitization-comptrollers-handbook

Notice the foregoing “Page 8” and where it came from … the 1997 Comptroller’s Handbook issued by the Office of the Comptroller of the Currency.  This handbook was issued before MERS Version 3 came into being.  Notice how the first paragraph below the diagram talks about the Borrower being a party to the securitzation chain?   Do you understand why?  Because in simple fashion, in order to make the chain work (the whole system), the Borrower’s payments facilitate the income stream to the investors, who received non-recourse bonds on the Closing Date (or Start-up Date, according to IRS terminology) of the REMIC.

That is, unless securitization failure occurred at the Start-up Date.  This begs the use of an expert witness at trial to can testify as to the facts, followed by the use of depositions of the parties creating the document (the assignment) to reinforce the fraud being plied on the court.

Actually, securitization failure occurred BEFORE that!  It occurred at the Cut-off Date!

It couldn’t have happened because after the note and mortgage was uploaded into the MERS® System database (owned by now-MERSCORP Holdings, Inc.), I believe the original paperwork was no longer needed and was shredded.  My forensic examiners and I have heard this on more than one occasion, right out of the mouths of the bankers!  Thus, when the Borrower went into default: (a.) the servicer handling the loan dummied up an assignment, knowing already that it didn’t have the original loan; (b.) the servicer went into the MERS® System and downloaded the “uploaded electronic copy” and printed it out and took it into court (after adding a bunch of other “allonges”, “indorsements” to the note to try to tie the chain of title together with the chain of custody of the note.

Let me be clear here!  I do not believe that the allonges and the indorsements were completely added until AFTER the original note was retrieved from MERS. The latest article by Neil Garfield, which contains a statement: “I have obtained confirmation from a large bank vendor (Visionet Systems, Inc.) that it rectifies “lost notes” by reapplying the “signature images” upon stored copies. –Bill Paatalo, December 10, 2016.” goes to the core of the following scenario:

My wife and I attended a trial in Fort Myers, Florida where Bill Paatalo was admitted as an “expert witness”.  I went for two reasons.  First, I wanted to see what kind of questions the bank’s attorney and the judge were going to ask Bill about his expertise and the facts of the case; and second, we had dinner with Bill after that to further discuss the case, which ended up without a Final Judgment being issued that day (in court) because the judge wanted more education, in the form of trial briefs by the attorneys, which were due yesterday (I have not seen the brief).

This clearly also shows that the Notes were, at one time (as I suspected) electronic copies.  And riddle me this (as the Riddler said to Batman) … where do you think Visionet Systems, Inc. got the copy of the note?  Visionet is NOT a user of the MERS® System (check for yourself like I did) and therefore, they had to get the note from somewhere (more than likely the servicer, who IS a user of the MERS® System).  This now begs the deposition of someone at Visionet Systems, Inc. to verify this chicanery.

There are at least two cases supporting this conclusion! 

If you’ll simply Google a pdf of “In re Saldivar” (Texas) and “Glaski v. Bank of America” (California), you can see from these two cases that the court finally recognized that if the note and mortgage (or deed of trust) weren’t assigned until years after the Cut-off Date”, there is no verifiable evidence of WHEN or IF the note and security instrument actually “made it into the pool of loans” within the REMIC trust! This is what Bill Paatalo testified to at trial in Fort Myers.  When attacked by the bank’s attorney on the possibility that the note and mortgage made the cut-off date and that the assignment was strictly a memorialization of that fact, Paatalo responded to the “fact” that the assignment itself shows the date of the assignment being two years after the REMIC closed; thus, there is no possibility that the governing rules of the REMIC were complied with.  I am referring to the entire 424(b)(5) prospectus here, NOT just the PSA!

The OCC clearly contemplated that the Borrowers were the parties signing the notes and security instruments, which contained the provision (in paragraph 19 or 20, depending on which long form security instrument was employed at that time) that “the note, or a partial interest in the note” may be sold or transferred. It says nothing about the parties involved in that transaction, the “boss of the note” at foreclosure proceedings, or securitization of the loan.

Not only is the chain of title screwed up (because the right hand doesn’t know what the left hand is doing), certain parties came in contact with each other to “dummy up” paperwork to steal the house.  It’s that plain and simple.

That my friends, is a short-form explanation of the formula for securitization failure in roughly 3200 words, despite the fact I’m not an attorney nor do I render legal advice.  Share this with everyone because the life you save may be that of someone you don’t know that desperately needs to view this educational post!

BTW: For those of you wanting a progress report on the new FDCPA book I’m working on … I’ve about 40 pages to go!  I’m trying to get it done by the end of the year!  It contains some real damning information every “consumer” should know about, from foreclosures, to credit cards and car loans to student loans … all of which have been securitized … including relevant case law to back up the education I provide in this book! 

Dave Krieger, Clouded Titles

 

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Filed under Chain of Title Education, Op-Ed Piece

ANOTHER CLASSIC EXAMPLE OF WHY I BELIEVE YOUR PROMISSORY NOTE WAS SHREDDED …

OP-ED — The author of this post is a consultant to attorneys in quiet title actions and foreclosure defense matters involving chain of title. However, in this particular instance, I accidentally stumbled upon this federal circuit ruling that merits consideration as to why I believe that your MERS-originated mortgage loan NOTE (and potentially your security instrument that went along with it). You can read it here:

first-am-bank-v-fed-res-bk-of-atlanta-et-al-7th-app-cir-no-16-1122-nov-22-2016

I customarily do not read the entire piece of litigation unless there are specific things regarding real property law I’m looking for; however, in this case, I found some interesting UCC citations specific to Illinois that were referenced by the 7th Circuit Court of Appeals (which I deem fairly conservative in their holdings on cases), in extrapolating what further happens when physical paper is converted into electronic paper, as noted here:

“…banks would drown in paper”

In this particular suit brought by First American Bank, it accused Citizens Bank of destroying a check; in other words, a spoliated (an albeit fraudulent) check, as it had been honored and then “truncated”.  This term (in quotes) is important to understand. To clarify, I’ll use the Court’s own wording in the suit:

“The Federal Reserve Board’s Regulation J, 12 C.F.R. § 210.6(b)(3)(i)(A), provides that when a Federal Reserve Bank presents an electronic check (such as the check drawn on First American) for pay- ment, “the electronic image … [must] accurately represent[] all of the information on the front and back of the original check as of the time that the original check was truncated.” By “truncated” is just meant that an electronic image is substituted for the original paper check.” Id. at 3.

Since your mortgage promissory note is also considered in the realm of debt as a negotiable instrument (even the banks will agree with me on this), the MERS® System relies on the conversion (or truncation) of the note into electronic form in order to be stored on its system. However, you and I both know that MERS does not do the conversions, right?  The users of the MERS® System do the conversions and then upload those conversions into individual files within the database known as Mortgage Electronic Registration Systems, Inc.  That is what this database was created for, for the storage of electronic files.

Now for the truth of the matter … here is the Court’s own wording:

“There is no duty to retain paper checks after an electronic substitute has been made—otherwise banks would drown in paper—provided there’s a record of the contents of the paper check, as there is of course in this case; we know what the electronic check omitted, and knowing that, we know the information that the original, the paper check, contained.” Id at 5.

I hope you caught the highlighted phrase as to my realization that spoliation of the original note and mortgage (or deed of trust) happened in all MERS-related cases.  When you compare how banks used to do business, when you borrowed money from a bank, they would issue a check payable to the seller on your behalf, store the hard documents in their vault … and at least you’d know WHO you were making your payments to every month.

Caveat to this story …

There was also another interesting notation I picked up on while reading through the opinion of the Court:

“Some information that was on the original check was missing from the electronic version, but unavoidably so be- cause it was information consisting of characteristics of the check, such as watermarks, microprinting, or other physical security features that cannot survive the imaging process,” and their absence from the electronic image, being inevita- ble, was not actionable. See Regulation CC, 12 C.F.R. Part 229, App. E, § 229.51(A)(3).” Id at 3

If you continue reading onto page 4 of the Opinion, First American Bank could have demanded a “substitute check”, which is a paper printout “is deemed the legal equivalent of the original paper check.”

The foregoing statement would clearly tell me that a challenge is necessary to all promissory notes contained within the MERS® System because there is no “paper printout” or “substitute check” other than a copy of the electronic note downloaded by the foreclosing entity (most likely a REMIC), which in most cases is clearly missing certain items not found within the original note. Let’s revisit one of the previous mentions of items that cannot survive the imaging process.  One of them could seriously be an indorsement on the note, if you consider the current round of “indorsement-in-blank” arguments as to their lack of dating.  This is another one of the key reasons I believe that servicers, working in conjunction with the foreclosure mills, deliberately and purposefully create documents out of thin air for the purposes of manufacturing standing.

Also revisit the statement the Court made about what the electronic image must accurately represent (all of the information from the front and back of a check). Why do you think that when you access your online banking checks, you see both sides of the check’s image?  You never see that with a promissory note, do you?

A promissory note operates just like a check!

It has to be endorsed among the parties to show the custody of the chain of the note; otherwise, someone could come in at a point in time uncertain to a future borrower and attempt foreclosure upon their home because the chain of custody of the note was not preserved, especially in a “failed beta system” like MERS, which relies on its user-subscribers to “do the right thing” in managing their online transfers; however, there is no requirement by MERS that its user=subscribers even use the MERS® System, so long as they sign an executory contract naming MERSCORP Holdings Inc. (its parent), as the “electronic agent” in the transaction.

And you never see MERSCORP Holdings, Inc. anywhere on your paperwork, do you?  Further, once you realize that MERS and MERSCORP require its user-subscribers to indemnify MERS and MERSCORP from all liability for the errors and atrocities in its “system”, you’d also have to believe that MERS and MERSCORP have little (if any) idea what transactions are submitted by its user-subscribers unless they are actually made aware of it.  How then can MERS come into Court and say they have an interest in a promissory note they don’t even know is in their own database (or not) or was traded out of its database, when MERS itself did NOT input said data into the database?  How’s that possible?   Plainly, it doesn’t appear to be the case.

Mortgage States versus Deed of Trust States

Sadly, the difference between the two is that in a Mortgage State, you at least get your day in court.  In Deed of Trust States, all foreclosures are deemed to be legal unless otherwise legally challenged.

So the next time you’re looking at your promissory note that you managed to retrieve from the Servicer in a Qualified Written Request, remember what “version” of the promissory note you’re likely to get back.  If you lost or destroyed your copy of the files you got at closing, we need to go no further because you have no physical proof of any of the items that could or could have not reproduced on the electronic version.  This entire sham process is as bad as the sham check that was tendered to the attorney in this story.

This case does represent a mild test of the Uniform Commercial Code, at least as far as Illinois was concerned.  It merits further analysis by your attorney of record, especially when it comes to evaluating what is and isn’t contained within your promissory note.

How then can allonges (as well as indorsements) be attached AFTER the note has been scanned and uploaded into the MERS® System?  I don’t see too many attorneys revisiting that angle. Even though I predominantly deal in chain of title issues, this case tells a story of proportions equal to the sum of many promissory notes and merits further research for your understanding into the flow of promissory notes and what you’re actually presented with in Court, especially when MERS is involved.

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Filed under Financial Education, Op-Ed Piece

IF YOU ARE FACING FORECLOSURE, YOU SHOULD READ THIS!

NOTE: This post is only for the 95% of the homeowners who plan on vacating their homes as the result of pending foreclosure actions.  Don’t bother reading this post if you’re not one of those homeowners. 

So, you got a foreclosure notice in the mail?

You may be exploring this blog site for the first time.  Why?  Because you are behind in your mortgage payments and you’ve just received a Notice of Default and Sale (or a dunning letter from a law firm threatening foreclosure, claiming default and/or acceleration).

That sinking feeling …

You are not alone in your thinking.  In fact, millions of Americans have received this type of correspondence in the mail or tacked up on their door.  95% of those receiving such notices (of which you may qualify) know that their days of residence in their home is now limited because they are fully aware of their mortgage deficiencies.  Many have lost their jobs, have suffered a serious medical emergency or even have become underemployed.  Whatever the case, having no money means giving up and running away from your problem.

The bank is counting on it! 

Let’s face it … it’s a numbers game.  The mortgage servicing companies handling your loan payments and paperwork know this.  They know that 95% will capitulate and move out willingly.  This violates the terms of the security instrument.  Thou shalt not abandon thy residence, for insodoing ye shall do so at thy peril.  The fact that the mortgage payments can no longer be paid means the end of the line for many Americans. They have lost hope in surviving the legal system and start packing.  They can’t afford to hire an attorney, let alone make the payments and leaving is the ONLY option.  Many see serious legal trouble on the horizon and plan for what I call a strategic default.  I describe this in the book Clouded Titles.   If this is you, I want to hear from you!

Your lack of faith (or finances) in saving your home creates future legal problems!

What happens to your house when you leave?  There are a number of things that could go wrong without you even being there.

  1. When you move out, you still owe the payments, along with any deficiencies and service charges tacked on by the servicer.
  2. The yard becomes neglected.  That is the first sign of trouble to vagrants, druggies and homeless people.  They would love to simply move in and squat on your premises.
  3. You are still personally liable if anyone gets injured on your property.  The banks do not take title to the property until they’ve about got the home sold.  Many banks transfer title because a foreclosure has occurred and this leaves the new owner with the issues rather than the banks.
  4. The area you live in becomes blighted, creating tax deficiencies for the county, who depends on your property taxes to exist.
  5. The home itself, which many Americans have invested time and money fixing up and “making it their own”, starts to deteriorate and becomes economically stressed, losing value rather than gaining value.

The banks are counting on you simply walking away, because the party coming to claim your home may not be legally entitled to it! 

As mad as that may make you (some of you may have done some research on the Internet and have come to realize this), most of the foreclosures that occur in the United States are illegal because the paperwork is missing.  Sure you can stay in the house until the Sheriff kicks you to the curb, but the title is still screwed up.  Rather than succumb to this embarrassment, you decide to pack up your things and get while the getting is still good.

In the alternative, if you elect to do a short sale, the bank (actually, it’s the servicer) directing the activity may not be entitled to even authorize a short sale of your property!  Still, there is nothing you can do about it.

If you are one of these 95% that intend on moving out of your property, please contact me to discuss options at cloudedtitles@gmail.com.

 

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Filed under Financial Education

NO FREE HOUSES? THAT GOES FOR THE BANKS TOO!

Op-Ed (… meaning the opinions expressed herein are that of the poster and should not constitute the rendering of legal advice!)

One of the key opportunities that homeowners in Florida should be aware of is the chance to observe “how the other side thinks”, especially in the most recent Florida Supreme Court decision in Bartram.  See the opinion here if your mind needs refreshing: bartram-v-us-bank-na-et-al-fl-sup-ct-no-sc-14-1265-nov-3-2016  If not, keep reading, because there’s the “other side of the coin” that isn’t being discussed.

For the purposes of this discussion, I included two recent posts, probably designed by law firms representing the banks, to gloat over the recent decision and surmise what was and wasn’t answered in the Supreme Court’s ruling.  You can read those posts here and surmise what the bank’s attorneys are now thinking:

no-free-houses-florida-supreme-court-approves-fifth-dcas-bartram-decision-and-extension-of-singleto

no-free-house-in-florida-balch-bingham-llp-jdsupra

If anything was meant to get you “off track” on rightful thinking, it would be this case!  Why?

It doesn’t matter whether Florida even has a statute of limitations available, because only those who can actually prove they own the loan have the right to enforce the terms of the mortgage!  Why this case had to even develop into what it was is beyond comprehension.  Even the attorney litigating this case told me that the Nash decision would be reversed, because, that’s just the way the courts are around here.

So the real issue rises to the level of scrutiny … standing.   Rightful thinking should be based on any Florida homeowner’s understanding of jurisdiction.  A court cannot rule on a case when an alleged party to the case (the complaining bank, servicer, etc.) cannot prove that it has a right to even file the complaint in the first place!

When the alleged aggrieved party cannot prove it has possession of the note … 

Nine times out of ten, Florida Circuit Judges don’t give a shit … they give your house to the bank because you owe someone and why would this bank file a foreclosure complaint if they didn’t own it?

Because it’s easy to steal someone’s property in Florida!  … and that’s no joke, folks!  

Here’s how they do it:

  1. Servicers analyze properties that have been sitting idle in the securitization pools without payments being applied (no matter whose fault it is).  They don’t care whether or not other sources of income (like credit default swaps, default insurance … PMI, LPMI, etc … shared loss agreements with the FDIC) are applied to the bottom line or not; so the loan number is flagged and further scrutinized.
  2. Servicers’ IT departments then dig up as much information as they can to see who and when the last time the property was attacked via a foreclosure complaint. The Bartram decision now gives lenders and their servicers the right to as many “bites at the apple” as they want.  They will flag and further scrutinize loans where cases have been dismissed (it doesn’t matter whether the homeowner won or not, voluntary, involuntary or through summary judgment) and place them in a “pending litigation” file.
  3. The servicers then enlist the help of the major title companies and foreclosure mill law firms to review and analyze what was wrong with the cases that were dismissed. They will check into the status of the note, who might possibly own it, whether the note was lost (or shredded), what assignments have been filed in the real property records where the property they want to steal is located and what actions might be needed to correct the issues to make it easier to convince a judge to allow them to steal the property. After all, why would a judge who is drawing a pension steeped in RMBS-type securities even think about siding with the homeowner, especially in Florida?
  4. The servicers then employ the major title companies and foreclosure mill law firms to “take corrective measures” to move the foreclosure cases forward (vis a vis David J. Stern “procedures”), like: (a.) manufacturing fraudulently-misrepresentative assignments of mortgage that assign the mortgage and note (often using MERS, whether MERS is involved or not) to the “servicer” or new “lender” whose intention is to come in and foreclose on the property; or in the alternative, (b.) to direct the manufacture of said document(s) by the servicers own teams of “robosigners” and “robonotaries”, like those situated in Palm Beach County, Florida.
  5. The servicers then cause the phony documents to be filed in the real property records where the property is situated and then direct the foreclosure mill law firm to start sending notices (following the notices being sent by the servicers to the borrowers).  It doesn’t matter what the alleged “default date” is … because they keep changing it … and thanks to Bartram, nothing else matters.
  6. The foreclosure mills then look at the promissory notes to make sure there is at least an “indorsement-in-blank”, so they can claim that entitles them to foreclose on the property. This, despite the fact the “indorsements” are undated, which prove no effective date of transfer. It doesn’t matter, because whatever the argument that might come from the homeowner or their attorney, the bank’s attorney can simply say, “They just want a free house, your Honor!”, just to piss off the judge!

The homeowner, who by this time has done some Internet research, has deemed himself “entitled” to a free house because a “fraud” was committed against him.  However, the fighting homeowner is living in the house (still) and the judge knows this, which makes the crime against the homeowner even worse in the judge’s mind.  Whether or not the claims made by the lender are factually based, all they have to do is show up with manufactured documents, claim some REMIC trust owns the property, and they rely on the judges to do their bidding.  After all, the judge doesn’t want the banks to “bankroll” his opponent in the next election, so, “what’s fair is fair”:

  1. The homeowner borrowed the money.  It doesn’t matter where the money came from (e.g., out of thin air-created-credit, interim funding lender, REMIC investors, etc.), the homeowner’s loan was funded.
  2. The homeowner got something of value.  Namely, the home they’re living in.
  3. The homeowner hasn’t made his payments.  Regardless of the fact that the burden of proof is on the lender to prove the homeowner is in default, the judge starts asking the questions of the homeowner/borrower to help the bank’s attorney prove their case.  The ill-informed homeowner and/or their attorney doesn’t know HOW to answer the judge’s questions, mostly out of fear.
  4. The lender is getting screwed and is therefore entitled to the house.  It doesn’t matter whether the note is credible or not.  The fact it is attached means something to the judge.  95% of the time, the judge is not going to ask any questions because the Florida Supreme Court has directed him to “get the case off his docket”! and
  5. No matter how many times an attempted foreclosure has taken place … and no matter how many times that case may have been dismissed (for whatever reason) … the lender(s) get multiple bites at the apple.  Some party is eventually going to end up with the property, while draining the homeowner of available funding so at some point, the homeowner can’t fight back. The servicers know that it’s a “numbers game”.  95% of homeowners in Florida “run away” when served with a foreclosure complaint.  The other 5%? A percentage of them will spend thousands of dollars (after reading stuff on the Internet) hiring a lawyer that is ill-prepared to defend the foreclosure and believes the same thing as the bank is alleging (“you owe somebody”) and (“no free house”).  A small fraction of that 5% are prepared financially to appeal the case, which could result in a reversal of their foreclosure.

But no matter … with Bertram, banks get more and more bites at the apple … with more phony documents and fabricated arguments relying on those phony documents.  No one will prosecute those phony documents to stop this nonsense from happening over and over again, so the judge’s dockets keep getting jammed up with foreclosure complaints … a scenario created by the Florida Supreme Court itself, who then issues mandates to clear the dockets.  This creates new bad case law upon new bad case law, to where “standing” is the only viable counterattack available to homeowners.

As nice as the Sunshine State is to live in, why would anyone want to buy a house here, knowing that:

  1. The legal odds are that the chain of title is all F**KED UP on 90% of the properties!
  2. Because it’s the Sunshine State, there’s a desire for more investors to buy these properties; thus, burying the frauds committed by the banks and their servicers deep within the F**KED UP chains of title.
  3. Prosecutors (who like being in power) don’t want to prosecute document manufacturing frauds because “that would be bad for business” because we need more banks operating out there to take advantage of homeowners, giving them loans they’re not entitled to, just because they can.
  4. Homeowners don’t understand that when you borrow money from a bank, security instruments guarantee that “someone” can steal the house down the road, whether you’ve made your payments or not.  There are cases in Florida where banks have attempted foreclosure on homes where the homeowners borrowed nothing … they paid cash for the house!
  5. Living in Florida may be really nice, except when you have a bank riding your ass all the time! Still thinking about moving here just because medical marijuana has been legalized?  Think about where you’re going to live, because only a certain percentage of Florida homeowners will be able to leave an estate to their children, largely due to the fact that foreclosure mill law firms need something to do to stay in business, whether they’re entitled to a “free house” or not!  Most people move to Florida because of estate planning advantages, except when there’s a “subject to” riding on a mortgage loan or a reverse mortgage.  This is the financial raping of America folks!

If the government can’t (or won’t) deal with the foregoing issues, in any state for that matter, what makes you think your life is “secure”.  Security is only perception that your living conditions are unchecked by some bank, because when banks don’t know who owns what, your living conditions could be disrupted.  So, even if you paid cash for the house, decisions like Bartram are irrelevant and take a back seat to standing issues.   You should simply come to the understanding that banks can do whatever they want in Florida, including fund judge’s retirement pensions with accounts laced with residential mortgage-backed securities!  What a conflict of interest, eh?

99% of the time, whether you have the funds to fight the banks and their servicers in court, YOU are probably NOT the party who’s going to end up with the “free house”. Until judges put the screws to these banks in court, or the law firms and the servicers that manufacture the phony documents get sent to prison, it’s going to be “status quo” in Florida … and elsewhere across this damaged America.

I don’t care who you voted for.  When are you going to wake up and realize that BOTH SIDES OF THE AISLE (in Congress) are responsible for the mess you’re in?  It doesn’t really matter WHO the Chief Executive is, does it?  The power elite in DC have this country right where they want it, because now everyone’s arguing over who should be in the White House … again, distracted from the real truths!

Pretty soon, you’ll be so distracted you won’t be able to see the real enemy coming.

If you want change, stop borrowing money from banks!  Let’s see how long you can survive without altering your lifestyle.

 

 

 

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IF YOU THINK THE DECK IS STACKED AGAINST YOU IN A FORECLOSURE, YOU’RE RIGHT!

Op-Ed!

It pains me to have to read some of the posts on this blog, because I see that foreclosures are starting up again and many people are finding themselves without a clue as to what their odds are if they decide to fight, or not.  To that end, I’m posting my “Top 10” observations (not legal advice) here:

  1. You are not alone in your fight. Know that other homeowners are also considering the same options that you are, whether to “fight” or “flight” (run away, which 95% of homeowners do, spineless wimps).
  2. You will have to get rid of many ill-conceived misconceptions. Because we live in the “Age of Entitlement”, everyone thinks: (a.)  the bank did me wrong; and (b.)  I deserve a free house.  Wrong! You signed a contract and a security instrument!  No one held a gun to your head!  They dangled “the carrot” and you bit into it, hook, line and sinker!  You have to have a “Come to Jesus” meeting with you and your family and chuck all of these preconceived notions because without an open mind, you will dig yourself an even deeper hole!
  3. You have to understand that judges are homeowners too. Most of them probably still pay on a mortgage. This means you will have to understand how to overcome the conjecture and speculative arguments and derogatory comments that the bank’s attorneys (who have had years at this to perfect their craft) will make in court to sway the emotions of the judge.  You borrowed the money from someone, but maybe it’s not just “that guy”, your Honor.
  4. You at least have your day in court if you live in a judicial foreclosure state.  It really pisses me off when homeowners don’t show up in court and least say something!  You have your day in court as mandated by law, but sadly, 95% of homeowners freak out and run away.  The banks are counting on this. So are the courts. It’s a numbers game folks.  The less cases that judges have to hear, the better.  They know it.  I know it.  But you won’t know it if you don’t at least show up and say something!
  5. If you live in a non-judicial foreclosure state, you have to initiate proceedings to stop the sale of your home!  This means you either have to have a lot of time on your hands to do research or you will be like most of the 95% of homeowners who do nothing and wait for the county sheriff to show up and put you (and your family) to the curb.  Filing a Notice of Lis Pendens does nothing but “gum up” title temporarily.  Filing that means a “suit is pending” and if there is not suit, you filed a fraudulent document in the land records that could land you in jail, where you will do no one any good, especially those who depend on you for survival.  You are the Plaintiff and only a temporary restraining order will stop a foreclosure sale!  The burden of proof is on you unless you know how to turn the tables on the bank.  This is a fact, not legal advice!
  6. When it comes to foreclosure, apathy reigns supreme!  I have never seen a situation more tenuous where people become so in denial about life.  Instead of doing something about the scenario when it presents itself, many people go into this “woe is me funk”.  As a responsible American homeowner, that is really messed up.  Buying a home is one of the biggest, major decisions you will make in your life and most homeowners bit off more than they could chew (when credit was so readily available).  The banks are not all to blame.  They are crooks (true) … and I don’t trust them.  It’s bad enough that this election cycle gives us so little (the lesser of two evils) to choose from, but to have the banks controlling all of the behaviors of Congress and our presidents for the last two centuries is so appalling and what’s even more damning is that homeowners who have the power of the vote, do nothing.  So when you’re left with few choices in a time like this, remember, the collective body politic voted to set the system up this way.  The “system” has no mercy for those who think they’re “entitled” because someone else has to pay for it.
  7. The second wave of “foreclosure fraud” starts with unscrupulous foreclosure defense attorneys!  They’re out there and these are the types that want to make you their “monthly annuity”.  Foreclosure defense is big business and if you’re going to make monthly payments to an attorney to stave off a foreclosure, you’d better have an “end game”.  The real attorney will demand you have an end game before even taking your case and if you don’t have one, you’re likely to end up on the street anyway.
  8. Most people don’t even have an “end game”!  This is even more sad in a land where we have lots of hidden opportunities.  What I did when I looked at my own scenario, which I discussed in my book Clouded Titles, was to: (a.) examine my finances to see whether I could fight a foreclosure in the first place; (b.) look at my other options as to living scenarios (I had a rental property I could move into, which was becoming vacant, which made my choice easier); and (c.) I had to look at what if any equity I was giving up.  Most people took out 30-year mortgages.  I find 30-year notes to be a waste of time and money (in interest, which makes most of the 30-year period giving up little equity; just like renting).  I only do 15-year notes if at all anymore.  If you can’t afford the 15-year note payment, then rent! You may find yourself having a large yard sale and liquidating what possessions you don’t need and then using those proceeds to find yourself other “opportunities”.  The opportunities are there if you’d just look for them and stop whining about the dilemma you’re in!  If you think things are “hunky dory” right now, wait until the sheriff shows up and moves you out on the lawn.  Watch the “99 Homes” movie trailer if you want a real vivid picture!  (I still can’t watch it without tearing up and getting an aching feeling in my gut!)
  9. BOTH SIDES of the political aisle put this whole thing into motion!  If you think that either political candidate for president is the “right one”, think again.  When’s the last time you studied the Constitution?  If you read the manner in which the Founding Fathers set this country up, you would understand that Congress makes the laws, NOT the president.  Sure, the president may “influence” what laws get propounded, but the president’s job is to “enforce the law”, as the Chief Executive.  Congress voted to repeal the Glass-Steagall Act, not just one side or another.  The two-party system has failed us folks!  Your average congressperson is the bank’s “bitch” and has been for quite a number of decades!  The only way to stop this is to do what California and Illinois are doing to Wells Fargo Bank now … change banks!  The mega-banks got us into trouble in 2008 and nothing has changed.  Servicers are still robosigning documents and foreclosure mill attorneys are “in it up to their necks” in fraudulent documents in their reliance of such to steal borrower’s homes.   The whole thing has turned into one big criminal RICO issue and MERS is the platform, the business model, that facilitates it!  When homeowners wake up and smell what is really going on, AND DO SOMETHING ABOUT IT, then things will change, not until.  I moved all my money and investments out of the major banks, why aren’t you doing that?   The big banks are your enemy!  The faster you realize this, the better.
  10. It’s hard to be right when the government is wrong!  The government bailed out the banks.  This was all an artificial ploy upon the American taxpayer anyway, as the banks paid the government back.  Those who screwed the government out of TARP funds are being (or have been) prosecuted and put in jail.  The government is in bed with the banks, otherwise, you wouldn’t have 12 USC (Banks and Banking) passed as law.  The banks are the most heavily-regulated industries in the country, but we disrespect ourselves when we stoop so low as to “borrow money” from them and dig ourselves in over our heads and makes ourselves destitute (by design).  Those who borrowed to pay for their education are now financial “slaves to the rhythm”.  Sorry, but the government’s answers to everything are Hegelian in nature and were put there to make you a slave.  I can’t help it that you didn’t do your homework!   No one taught you any better.  No one taught you finance in school.  No one told you that you had to read the damned documents at the closing table before you signed them and if you didn’t understand what you were getting yourself into, then it’s on you. However, the government allowed this mechanism to be put into place for a reason.  This is why Snowden is now in Moscow.  The only person who can change their life destiny is YOU! 

The other side of the coin with Wells Fargo?  I wonder … given the 2-million or so phony accounts they set up … how many mortgages did they rehypothecate?   Congress hasn’t even started looking into that.   Chase has a patented template for creating “ghost accounts” ( jp-morgan-chase-rehypothecation-2 ) … makes you wonder what’s really inside the databases of the DTCC and Cede & Co. huh?  I know from talking to other homeowners that dummy mortgage loans have been set up too, not just bank accounts.  Maybe Congress is turning a blind eye, maybe they’re just ignorant.  Don’t blame me. You elected them.  And this is why I don’t trust banks!  You are a fool if you think that your money is “safe and sound”!

So, the bottom line here is … not everyone’s strategy is the same as everyone came from different walks of life, has different resources available to them and can think clearly under pressure.  Put all your fears aside and analyze your scenario and come up with an “end game”.   I don’t want to see you end up in a tent city.

 

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