Tag Archives: closing date

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

WELLS FARGO, CARRINGTON MORTGAGE SERVICES GET A $5,000,000+ BEAT DOWN BY HOUSTON, TEXAS JURY!

The issues discussed in this post are for educational research purposes only and does not constitute the rendering of legal advice.

It was a glorious day for David and Mary Ellen Wolf when a Houston, Texas jury awarded them in excess of $5-million in damages in their case against Wells Fargo Bank, N.A. and Carrington Mortgage Services.  See the Charging Instrument here: Wolf v Wells Fargo Bank et al_2011-36476_Nov. 6, 2015_Charge of the Court

At issue for the jury to determine was whether the Assignment of Lien was valid under Texas Law … you be the judge: Wolf-Transfer-of-Lien-NCMC-to-WF-10.15.2009

If you’ll notice the robosigned signature of Tom Croft, claiming to have some authority vested in him by the then-defunct New Century Mortgage Corporation, it contains rubber stamped “markers” on the document and is overwhelmingly TOO LATE to be transferred into the Carrington Mortgage Loan Trust, Series 2006-NC3, whose cut-off date was August 1, 2006, as shown on page 9 of the pooling and servicing agreement (“PSA”), attached here: SEC Info – Carrington Mortgage Loan Trust, Series 2006-NC3 – ‘424B5’ on 8:8:06.

If you’ve never read a PSA, you’ll find it in an easy-to-read format on SECINFO.COM.  Once you get inside of the trust pool (all you have to do is conduct a search using the series number of your trust, e.g. “2006-NC3”) information, look up the “424(b)(5) prospectus” information.  The PSA is buried inside of that document, as attached above in the Wolf case.  Some of you may have had the pleasure of navigating this site already, so please forgive my indulgence on behalf of those who have not done so.

The reason these documents have to be filed with the trust by the Cut-Off Date is because on the Closing Date, which is the start-up date of the REMIC trust, the bond certificates are issued by the Trustee of the Trust to the certificate holders (the investors who put their money into the REMIC that allegedly funded your mortgage loan).  For those of you who do not know, “REMIC” is an acronym for Real Estate Mortgage Investment Conduit.

All documents, including the Assignment or Transfer of Lien, and the Note, have to be conveyed BY THE CUT-OFF DATE (which in this case was August 1, 2006) into the trust pool in order to be accepted into the REMIC and receive tax-exempt status, according to the Internal Revenue Code and through congressional mandates found in 17 CFR 210, 228, 229, et seq.  This CFR reference (Code of Federal Regulations) is a 127-page document that was given legal effect when in was published in the Federal Register.  You can find it online simply by Googling it and asking for it in “pdf” format.  This is one of the items we will be sharing with you in more detail in the upcoming online COTA Workshop, being published in sections, on the CloudedTitles.com website.  I highly encourage you to sign up for it if you haven’t attend a live COTA Workshop in the past.

There are many of you reading this blog for the first time that may not even know that DK Consultants LLC has held workshops of this nature since May of 2012.  We no longer hold them in live fashion because of the out-of-pocket expenses for the attendees for coming to these 3-day events.  However, the Quiet Title Workshops have been fine-tuned to a 2-day event (Saturday and Sunday), to allow you to fly or drive into an area and stay a night or two if that’s your choosing (and your schedule can accommodate it).  We are finalizing the 2016 Quiet Title Workshop schedule for the following cities and months:

  1. Redondo Beach, California (Crowne Plaza Hotel & Marina), January 30-31, 2016
  2. Tampa Florida, Tampa Airport Marriott Hotel, April 2-3, 2016
  3. Chicago, Illinois, May, 2016 (location TBA soon)
  4. Las Vegas, Nevada, July, 2016 (location TBA soon)
  5. Baltimore, Maryland, September, 2016 (location TBA soon)

Now that you have the tentative scheduling, you can make plans to attend one or more of these workshops. Al West and I will be lecturing at these events.  You get to ask questions about quiet title actions and learn how they are processed.  Subscribe to these posts for more updated information as it becomes available.

Sum and Substance of the Transfer of Lien

The problem with the transfer of the lien in the Wolf case is that the jury determined the transfer was fraudulent at the time the document was executed and the parties executing it knew it was fraudulent when they executed it.

This is one of the key issues portrayed in the OSCEOLA COUNTY FORENSIC EXAMINATION conducted by DK Consultants LLC, released to the Clerk of the Circuit Court on December 30, 2014.  You will also notice that the law firm’s name is mentioned on the Transfer of Lien as well.  This was done for a purpose: to create standing for the named entity (the “assignee”) to foreclose on the Wolf’s property.  Whenever a law firm’s name is mentioned on any assignment, you can bet: (1) the law firm had a hand in drafting the assignment; (2) the law firm had a hand in directing the execution of the assignment; and (3) the law firm had a hand in causing the assignment to be recorded in the land records where the property is located. This would make the law firm criminally liable under the RICO statutes.  There are over two dozen law firms mentioned in the Forensic Examination from Osceola County, Florida that are soon-to-be-scrutinized by the Justice Department, who the report was recently referred to by Congressman Alan Grayson’s office.

One of the other patterns demonstrated in the Forensic Examination was that it was customary to see an assignment “pop up” shortly BEFORE or AFTER the foreclosure sale or judicial foreclosure action was commenced in order to facilitate “phony standing” for the foreclosing party.  Ask yourself, “Why did it take them so long to issue the assignment, if they knew exactly when the transfer of the note and mortgage took place”?  Because the parties executing the assignment DID NOT KNOW WHEN the actual transfer occurred!  How can you testify to something you have no knowledge of?  I think there’s enough case law establishing that.  Give me any state, I’ll find you a case that says that you can’t testify to something you have no knowledge of.  This could be construed as hearsay, which is inadmissable in court in virtually all instances.

So the sum and substance is (for your direct benefit) … always check the real property records at or near the time of foreclosure to see WHAT “pops up”.  You may have similar issues as the Wolf’s.  They were lucky in the civil realm that this case went before the jury. You can bet Wells Fargo will appeal the verdict as will Carrington.  I still want to see criminal indictments handed down for the fraudulent filings because there are criminal penal codes in place for that very reason. I’ll bet you do too!

 

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Filed under Breaking News, Chain of Title Education, Financial Education, Quiet Title Education

Glaski is only a “baby step”!

Foreclosure defense advocates are hailing the California Supreme Court’s decision NOT to depublish the Glaski v. Bank of America, N.A. case.   Once the decision (significant in its own right) was published (July 31, 2013), the foreclosure mills set about to upend it before the California Supreme Court in a major letter writing campaign.  The major banks and their trust counterparties certainly couldn’t have another “nail in the coffin” driven into their game plan to screw American homeowners now, could they?  They failed when yesterday’s decision to depublish Glaski was denied.   For those of you just now getting your head around this decision, here’s the sum and substance of it:

“Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.

We conclude that a borrower may challenge the securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under the trust instrument are void under New York trust law (New York Estates & Trusts Section 7-2.4) and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement. We therefore reverse the judgment of dismissal and remand for further proceedings.”

In line with that thinking, U. S. Bank Global Corporate Trust Services published a four-page piece entitled, “Role of the Corporate Trustee”, wherein the following section (on Page 4 of 4) was noted under the heading, “Parties to a Mortgage Backed Securities Transaction”:

Borrower
The person or entity responsible for the mortgage note and making
principal and interest payments in accordance with the underlying
mortgage documents.

Courts in other states are not seeing this the same way California courts do.

The U.S. Fifth Circuit Court of Appeals for example, isn’t letting homeowners in Texas, Louisiana and Mississippi get to “square one” when it comes to challenging assignments.  I believe that this is largely due to the thinking that “the banks can do no wrong”.  I would surmise that the judiciary in New Orleans has bought into the misconception that if the trust fails, their retirement investments will go right out the window (that is, if any investments they have are parked in one of these trust vehicles).  This is typical behavior of conservatism. Again, I say, how stupid is it to invest in something so volatile?   Check your investments folks!

Much of these beliefs is due to fearmongering by bank attorneys that if the mortgage-backed securities “go South” the judges and others who invested in RMBS will be left penniless and that the banks would fail.  Many judges actually buy into this crap.  The banks made over $53-trillion in side bets called Credit Default Swaps, remember?  Then they were bailed out by the American taxpayer!  Many of these trust pools suffered losses, but many tranches were paid off.  It is estimated that 99.9% (or better) of all of the loans never made the trust pools anyway, based on what investor lawsuits are saying!  This would appear to indicate that all the trusts have in them are empty loan numbers with no backing, based on Glaski!

The Borrower’s Signature

I find it odd that most courts overlook the simple fact that in order for the trust to even consider getting the borrower’s loan allegedly transferred into a trust pool, the borrower would have to sign the promissory note.  This is like writing a check, promising to pay some party at some point in time in the future when they decide to negotiate the instrument.  When you fill out the front of the check, you sign it, right?  Without your signature, you have a check with no “maker” on it.  Sure, the check may have all of the pertinent details, but without a signature, you can’t negotiate the instrument.  Thus, it would stand to reason that in order to negotiate the instrument once it’s signed on the front, whoever is negotiating the instrument must then now sign the back of the check when cashing it.

This is how a mortgage promissory note must also work!

When the borrower went to the closing table, he was presented with a note and security instrument (mortgage or deed of trust) to sign.  The security instrument represents the collateral promised as security for the note in case the borrower failed to make his payments.  The lender (who is named on the note and the security instrument) then gets to record their interest and thus, is in possession of a signed promissory note, which is what the Lender will foreclose on if the borrower defaults.   Many borrowers think that the Lender is foreclosing on the mortgage or deed of trust but that is not true!  The Lender is foreclosing on the note because the security instrument FOLLOWS THE NOTE, not the other way around!

Thus, the note is what is securitized, allegedly.  In Glaski, which is still an ongoing case, California’s Fifth Appellate District (where this appellate ruling is now binding as mandatory, while in other districts it is persuasive) reversed the lower court’s decision (against the homeowner) and sent the matter back to the lower court for continuation of the trial.  This is one step closer to Central California homeowners’ successful challenges but when you compare it to the “screw job” other American homeowners are getting, this is a baby step.  Still, other districts in the State can consider the case.  Once it’s been fully adjudicated, there might be an appeal; however, based on the current climate with the decision by the California Supreme Court, the Fifth Appellate District may stick to its guns and toss the appeal out.

The one thing this tells the author here is that the State Supreme Courts are more likely (than not) to back their appellate back panels.  The more of these types of published cases there are, the more nails that are driven into the bank’s arguments that the borrowers have nothing to do with the securitization or assignment of their loans.

Pencil in a reminder for March 3, 2014 … this is the date when MERSCORP has to amend its pleadings in the MERS v. ROBINSON case in California, or get its case dismissed with prejudice!  See my blog post on that!   Hey MERS … yeah, I’m watching you … just like you’re watching me!

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Filed under Breaking News, Financial Education