Tag Archives: Fannie Mae

EXIT STRATEGIES

(OP-ED) — The author postulates the following for things you might want to consider when all else fails. None of this commentary should be taken as legal or financial advice. If you’re a homeowner who is hurting financially, you should at least consider these options before the ship sinks.

IN THE WORLD OF FORECLOSURE

Welcome to my world of the last 12+ years. I use the “+” sign because my foreclosure scenario started back in 2003, which, upon reflection, caused me to start researching into what turned into the book Clouded Titles. That was back in October of 2008, when I began compiling all of my research into the cause and effects of the 2008 financial collapse and by December of 2010, the book was released in its 254-page format. It’s now 432 pages.

I write this post in earnest because this is the other way of saying, “What’s your end game?”

YOUR END GAME AND THE PRACTICE OF LAW

Most attorneys dealing in foreclosure defense will ask you that very question when the time comes for you to deal with someone claiming you’re in default and they want their house back. They want to know how long they can count on you to be their client.

Most attorneys won’t take your case unless you can actually tell them a valid reason WHY they should take your case. If you don’t have one, the honest attorneys will move on. Most attorneys also want to know if you intend on fighting until you can’t fight any longer. Some attorneys don’t care how long you fight, they’ll just suck your bank account dry anyway.

A lot of your response depends on whether it’s fueled with emotion, entitlement or serious legal logic. If there is a forensic issue with your property, such as dealing with failed mortgage loan servicer accounting issues, that is different than attacking the foreclosure mill law firm based on other more complex grounds, like tortfeasor claims. Sometimes you can actually settle your differences with the other side’s attorneys. More often than not however, the servicer wants your house and will stop at nothing to get it, including dummy up phony land record documents.

At the end of 2020, a lot of my investor buddies think the banks will be doing a lot of loan modifications with those who, even though they got behind in their payments, can start paying again. But there’s still that handful of tens of thousands that are the exception to the idea and won’t qualify. These folks still may have “exit opportunities”. They just haven’t realized it yet.

A lot of exit strategies are based on lack of finances altogether. The stimulus checks could never be enough. Thus, you must first sit down and have your “Come to Jesus” meeting with yourself and your spouse and family, if that’s applicable. You cannot … and should not … hide the fact that a legal action has been commenced against you, hoping it will go away because it won’t.

I talk about various “exit strategies” in my book Clouded Titles for a reason. Back in 2003, I did what’s known as a “strategic default”. I walked away from a high-priced, 80/20 predatory mortgage loan, knowing I had a better deal elsewhere. But, at least I had a better deal elsewhere. Most of those reading this post will not and/or do not. My “end game” was to walk away. No cash for keys. Nada. I was already upside down from the word “go”, so leaving was a no brainer. Unless I did something drastically sensible, I would continue to throw good money after bad. I moved into one of my rental properties and sent Ocwen the keys. Not that many are fortunate enough to have that kind of “back door” but it doesn’t mean there couldn’t be one.

The way I look at it, if you have no equity in the house to begin with, whatever money you threw at the property initially amounts to nothing more than short-term rent payments. That money is gone. What you do with the rest of your funds means everything at this point.

HISTORY DOES REPEAT ITSELF

Because of the fact history repeats itself and the Glass-Steagall Act has still not been reinstated, the banks are still playing in the securities business and REMIC trusts abound. As long as there is an “arm’s length” issue that keeps the borrowers away from the investors of these trusts, courts will continue to kick people to the curb at the whims of the REMICs’ trustees.

Because of the Spokeo v. Robins case, injury in fact has to be proven. This is where the Exit Strategy is most important because attorneys don’t recognize that the investors aren’t the ones that are being harmed, at least not always. Yes, there have been lawsuits by investors against these REMIC pools because there were discrepancies in the quality of the loans they “bought into”. I don’t personally feel the least bit sorry for any of the greedy bastards. They deserved what they got. They saw a way to piggyback on top of the banking industry’s profits. But were they injured? No one is asking them or their trustee to prove it. Why not?

Think about that. If the REMIC’s trustee or some third-party junk debt pool is dragging you into a foreclosure process, it’s because the trustee (who claims to represent the certificate holders of a certain trust) says you’re in default and the certificate holders were harmed, when in fact, just the opposite is true. You may not have made your payments, but the servicer of the REMIC trust was required to make them for you anyway, regardless of whether you paid or not. So, it’s really not the certificate holders that were harmed, it was the servicer (or sub-servicer) who had to shell out millions of dollars out of its coffers to cover the advances due on the Distribution Date every month. THAT’S who is coming after the homeowners in foreclosure, not the “lender” REMIC. The REMIC is an entity that is tax-exempt as a pass-through trust. Nothing more. It made misrepresentations to the certificate holders about what they were investing in. That’s not our problem. We have to show our payments were paid whether we’re the ones who paid them or not. But what does the servicer do? Its attorneys bring in pay statements, showing the judge when was the last time you paid on your mortgage … then they call you a deadbeat … and just like that, you lose your home.

What’s wrong with that picture? Sometimes, the servicer doesn’t even bring in pay statements and the court still gives away your home … to an entity that actually may not deserve it.

Your time to discover that there was an issue with your mortgage loan was the first time you got notice that your servicer changed and another servicer started demanding money from you. But instead of researching the land records and looking for bogus assignments to do a C & E on, most homeowners were too self-absorbed to realize what was going on until it was too late to do anything about it.

THE GSE’S ARE NO DIFFERENT … THEY JUST HIDE IT BETTER!

If you go to irs.gov and type Publication 938 for any given year in the search tool and look at the documents that come up, you’d be amazed to see how many Fannie Mae, Freddie Mac and Ginnie Mae REMIC trusts there are in existence. These are the REMIC trust that each of these government-sponsored entities (GSE’s) are the administrators for. They are like a trustee except when they come into court, they come in on their own behalf … most of the time. In non-judicial settings, it’s always the servicers that come knocking, preceded by suspect documents being recorded in the land records. When you’ve seen as much of this bullshit as I have, all of this becomes “old hat”.

I might as well be the judge that says, “What else ya got?” It’s the same shit. Just a different day. And no one is the wiser when the servicer transfers ownership of your property to the GSE when it’s all done because you’re too busy trying to figure out your exit strategy, after it’s too late and you’re treading water.

WHY DO WE CAPITULATE TO THESE BANKS?

There’s just something inside each one of us that twists our stomach in knots when we finally realize what’s happened. We can no longer be in denial. Some entity out there (run by a bunch of misguided minions who think everything they’re doing is legal) is coming to take our most precious commodity away from us … shelter.

Remember when I previously stated that the three most precious commodities in America today are food, water and shelter. Anyone who deals in these businesses will continue to survive because they have access to those three commodities. There is a fourth commodity that shouldn’t be overlooked: transportation. A lot of people have depended on their cars for a place to live because there was nowhere else to go. Sadly, I had to live in my car for a month (back in the 70’s). It wasn’t any fun. Going to gas station rest rooms to clean up was no fun either.

Those who have no “end game” when the time comes will be scrambling at the last minute, driven by panic and not common sense, to play in a condition I have previously described as the Titanic Syndrome. In other words, it’s every man for himself … man the lifeboats. Wait! There aren’t enough lifeboats and the ship has just hit an iceberg and is listing. The band strikes up with Nearer My God To Thee as passengers fight each other for space. Those who didn’t make the lifeboats get sucked down into the ice cold depths of hell when the ship finally turns on its end and sinks to the bottom of the Atlantic Ocean. Those who remain are floating on the surface are left clinging onto pieces of driftwood, which is what My Heart Will Go On-type movies are made of. And doesn’t all of this just tug at your emotions?

Instead of doing something productive to get away from this situation, we keep clinging onto what’s left of our scenario, when we should have damned well realized that the mortgage loans we took out are going to be the death of our equity in life. We were too slow to react, which is why I write this column. Yes, we need shelter; however, HOW and WHERE we get it should have been more thoughtfully researched … and weren’t … because, again, most of us got caught up in the emotion of buying more home than we could afford. As a result, we’d rather be all stressed out, suffer from heart attacks, family discord, suicide, murder-suicide … all thanks to a situation that was created by the banks and made all too easy for folks to access. Every day you do nothing means your equity (that which you still have in yourself, I like to think of it as sweat equity) is going to waste.

The first time we capitulated to the banks is when we took out a securitized mortgage loan that was registered in the MERS® System. The second time we capitulated to the banks is when 97%+ of us bugged out when we got a foreclosure notice. We did all of this out of ignorance and false hope because we were promised things that did not come true for our futures. Putting false hope that a bank is going to come and rescue you or even cares about you is your first mistake, which is why you have to strategize about your own realistic future and make a decisive move towards that end.

SINCE I GOT INTO BUILDING HOUSES … MY THOUGHT PROCESS HAS BEEN ALTERED SOMEWHAT

Tiny homes are nothing new; however, the idea that you could scale down into one and tell the bank to piss off seems to ring true with a lot of folks these days. This is why banks don’t want jury trials in foreclosure cases because chances are, there are a lot of folks that hate banks as much as the foreclosure-affected person does. We all have our reasons for doing what we do. However, imagine being able to use your resources to acquire a small plot of land somewhere and put a temporary shelter on it that you could live in while you build a bigger home from the ground up and you could use that shelter for an office or guest cottage later. How does that sound? What if you could mount that cottage onto a trailer and tow it around with you and go mobile? A lot of people are doing that these days, except they’re buying big, bulky RV’s that suck gas and are in no way energy efficient, are cumbersome to navigate and are a waste of money anyway (I’ve had RV dealers tell me that personally).

To me, tiny homes are just a way of temporarily downsizing until the moment comes where you can seize a better opportunity for yourself.

IT’S JUST STUFF …

Another thing folks have a problem with is letting go of material possessions they don’t need. If you’re a hoarder, your scenario becomes more than a mental challenge. You’re in a world of your own and anything that disturbs it will cause serious health complications.

Downsizing is one thing if you have time to part with your property before the bank does, especially if there’s that much equity to be had. But could you imagine being able to become self-employed and work out of your own portable home? You could rent a space in an RV park and take on work locally for that matter. There are a lot of ways to turn lemons into lemonade if you just put your mind to it. Since food is one of the key ingredients in the game, your plot of land could serve as a garden and supply you with an income doing truck farming, an all cash business.

Or if you have a professional service you could offer where you don’t spend a lot of time in any one area (like handyman, painting or other simple construction work like day laboring, it would be nothing to be able to pick up cash to stay afloat while YOU decide HOW you want to live … and not the bank or its servicer deciding HOW YOU SHOULD LIVE (broke and homeless in a tent city somewhere). To the banks, it’s a numbers game. You’re just a number. Don’t you just hate that thought?

I like what I’m building now, because the house is made out of steel SIPS panels. The walls are 4″ thick with EPS foam insulation and have 6″ in the roof. The panels are made from 26-gauge Galvalume® steel, sandwiched around the insulation to provide airtight and watertight, non-toxic living! These homes are Category 5 hurricane resistant and have no termites because there’s nothing to feed off of within the entire structure itself. The structure will also save 50-60% on energy bills, which means nothing if you’re renting an RV space but everything if you’re on the grid in a fixed location. Yet, you can take this same concept and for way less money, construct a portable home that is energy efficient in almost any climate.

The alternate exit strategy here would be to downsize to something smaller more manageable or even mortgage free (having a free small home to live in, even if temporary, is better than having to pay rent), despite having to make a small land payment every month. At least, that’s manageable.

I did that very thing in 2007. Back in 2003, I acquired a 12-acre parcel of land, which I later sold at a handsome profit. By the time 2007 arrived, I had acquired a used, single-wide mobile home and fixed it up to the point you couldn’t even tell it was a mobile home when you set foot inside. I had a land payment of $222 a month for 10 years for almost an acre of land. I lived in that mobile home for 4 years and lived within my means while I continued to help homeowners fight foreclosure. I made use of the barter network too. I use this example to illustrate what a little imagination and creative financing can do to make you mortgage free. As part of the land sale in 2007, I had the buyer pay off all my existing debt and move the mobile home from the 12 acres to the 2/3rd’s acre and connect the septic and utilities and make the land downpayment. What the buyer couldn’t pay for in cash, I had him pay off using his credit cards and sweat equity on trade! How’s THAT for creative financing? There are ways to do a lateral move that will cost you way less money if you’ll just strategize HOW you’ll get there, HOW LONG you’ll stay in that situation and HOW you’ll survive while you’re in that situation. I made it work, so can you.

There are places where land is cheaper to acquire and many times, owners will finance it if you have any kind of down payment. You might have to relocate to a different part of America but if you’re in a situation where there’s no income in one given area doesn’t mean there won’t be in another. You have to do your due diligence. Maybe the market you’re living in has outlived YOUR usefulness and it’s time to seriously seek out greener pastures.

BEING NOMADIC DOESN’T MEAN YOU’RE A GYPSY

There’s other interesting ideas about being nomadic:

  1. One could go “off grid”, so to speak, because the utilities used to power a portable home are rented and not in your name (for cash);
  2. One could remove the SIM card and battery from a cell phone making it difficult for one’s movements to be tracked or contact traced (or get disposable burner phones) and only return calls from a central number, like that of an answering service;
  3. If a given state allows a property to be placed in a land trust, putting the property in a trust name that can’t be tracked to an individual personally serves as an asset shield (vehicles can be put into trusts too);
  4. One could easily turn a portable home into a Faraday cage with very little effort, especially if it’s built out of steel SIPS panels;
  5. There are ways to disable a vehicle’s GPS system so the vehicle can’t be tracked (if it is equipped with such);
  6. The nomad is mobile and can navigate into areas under quarantine for any reason without too much difficulty and still conduct business;
  7. Since the nomad would travel with the home, it’s always close by and easier to monitor no matter where the location;
  8. There’s nothing stopping one from taking “extended vacations” when not tied down to a mortgage loan;
  9. The vehicle and the home it’s tied to is 100% owned and not mortgaged; and
  10. The idea of being nomadic is that life is too short and should be lived to the fullest when not being encumbered by the problems of the world.

It’s really hard for most people to come to grips with the fact that everything in life is temporary and that we only have it for a short while. The thing is … one of the oldest principles my dad taught me was to pay for what you want with cash and not use credit. Credit could become the devil’s playground if not used wisely.

While this may seem extreme to some, I’ve known folks who have made a living working flea markets all over the country and have managed just fine. They’ve figured out a way to sell collectibles or some other disposable product and make a living out of it. Many set up accounts on eBay and you’d be surprised how many single moms actually go to the garage sales and flea markets, buy a lot of items in bulk and sell them online at a huge profit. It’s a great way to navigate and make an income during a lockdown. People get frustrated when they’re cooped up, so they go online and shop, many times buying stuff they don’t need. Conversely, most Americans are so frustrated and upset because of the political climate that surrounds them they miss opportunities that are right in front of them because they worry about things that are beyond their control and it consumes them.

The one thing about being nomadic, you only need internet access to run an eBay account. If anything, I might add that there are mechanisms the government can use to track a person’s income, especially if they had an eBay account. But no one said someone couldn’t run it as a home-based business and take advantages of all that Uncle Sam’s tax deductions have to offer. Ponder that for a minute. I know a guy that worked out of a satellite postal store for years, re-established credit in the name of his business and paid no income tax because he didn’t make the minimum required to even file a tax return. But this is why “the system” keeps toying with the idea of a cashless society, so it can track every single movement and control the individual. Doesn’t that kind of sound like Communism to you?

And just look what’s going on in Russia today. The country has a huge underground economy and a lot of organized crime that has taken over government. And the sheeple here do not realize what they’re in for. Concern for your safety should also drive your thought process when it comes to the “end game” as to where to relocate to start over.

The beauty of an exit strategy is … you have the opportunity to reinvent yourself.

Leave a comment

Filed under I'm not posting any more stuff on here!

COVID, COURTS, CIVIL UNREST, PANIC, FEAR AND FORECLOSURES = A COMBINATION FOR DELAY; UPDATE!

(BREAKING NEWS – OP-ED) — The author of this post brings you this not-so-humble opinion without the slightest intent of giving you legal advice.  The system has it all set up to favor the attorneys for that purpose, so that’s where you get legal advice.  On this blog, you get news, opinions and suggestive commentary and education, which is perfectly legal because freedom of speech … as I believe we still have freedom of speech … exists in a forum of expression as we know it. 

UPDATE: 

Regarding foreclosure potential … 

Remember Plan B?  Home prices are taking off, upwards, up 4.8% in May (from last year).  Much of this is due to two things: (a.) the low interest rates being offered home buyers, even in this “false flag pandemic attack”; and (b.) low inventory.  This means that home prices could stay “up” as long as the stimulus packages keep coming.  According to Black Knight Financial Services (who likes to make up shit documents catering to foreclosures and monitor its brouhaha and later brag about it), 4.1-million forbearance agreements have been inked.  This means homeowners will still have to pay all the back payments at some point in time.  With the economy still in the tank (somewhat), it’s highly likely that foreclosures will skyrocket towards the end of the year when this “thing” subsides.

I’m saying this because NOW is a great time to sell your home and scale down.  Move to the country.  Start a home-based business.  Move family in with you if possible and share in the savings.  There are a lot of things that can be said for creating a Plan B, instead of being stubborn about staying put.  If you’re seeing any kind of equity in your home, now might be a great time to cash it out and scale down to something more affordable.

I remember moving out of a bad situation in San Antonio, where I was facing a huge increase in my mortgage payments and I sold the house the day before the new rate kicked in. I moved to the country and ended up mortgage-free. Yes, I had to scale down.  It was a learning curve.  Some lessons were good, others not so much.  But my key point here is that this can be accomplished if you just put some effort into creating a Plan B and then ACTING ON IT!  While the moratoriums are in place is the time to start rethinking your financial strategies for the future, especially in lieu of potential anarchist behaviors (and not just in the major cities).

Regarding civil unrest … 

Two areas of particular interest to AVOID moving to … Minneapolis and Seattle.  Both are run by Democratic mayors.  President Trump just told Minnesota’s Governor (Tim Walz) to go piss up a drainpipe (Walz wanted $500-million from the federal government to repair the damage caused by rioters).  No federal funding for you sir! You sat idly by while Minneapolis burned, as did Minneapolis’s mayor.  You get no funding.  Why should we reward your bad behavior for failing to act in a time when your community needed you?

The same goes for Seattle, whose city council seems to think that cutting its police department budget to zero now will send a message.  It will alright.  1,100 police officers are going to lose their jobs.  Some officers will be transferred.  Analysts say that the major crimes unit (assault, murder, rape) will become virtually non-existent.  Is this a place you’d want to live in?  I look for a mass exodus from both locales.  Soon, we’ll have Democratic sanctuary cities which will have to self-fund and repair their own messes created by gangs, bands of thieves and repeat criminal offenders.  No police means no security.  Add the COVID panic created by the respective state and federal governments (I wonder when the new vaccine will come out and how many Democrats will rush to get it), and you have more political polarization afoot.

No police means increased crime and the federal government will respond only if asked.  Just ask the hierarchy in Kansas City, Missouri. 100 federal agents are moving into the area to arrest repeat offenders and help lower the crime rate.  Kansas City’s Mayor had to ask the Governor to ask the feds for help.  That’s how the system works.  As much as I used to work in media in Kansas City and lived in that area for many years, I’ve got a lot of reservations about ever moving there again.  Like Minneapolis, the riots were bad there too.

For those of you who haven’t heard the new Trump campaign commercial … it really drives home a point about police response (“Your estimated wait time is 5 days.”). I am not saying we can’t recover from this pandemic. But once the evil genie is out of the bottle, it’s hard to stop him from creating mayhem.  If you’re not in a “safe area” now, understand what future repercussions may occur (higher taxes to pay for the residual fallout from neglect) and why it may be best to rethink just how safe you really are.  I’m still a big fan of acreage in the country with a house parked in the middle of it.  It’s not a move to escape from reality.  It’s a way to grow food and survive.

END OF UPDATE!

FEDERAL GOVERNMENT EXTENDS MORATORIUMS DUE TO COVID

The Federal Housing Finance Agency (FHFA) has extended moratoriums on foreclosures and evictions until at least August 31, 2020.  If you have a mortgage that is backed by Fannie Mae and Freddie Mac, rest assured that single-family homeowners got a reprieve, at least temporarily. Roughly 2-million homeowners are affected by this extended moratorium. You can go do a loan look-up on the Fannie Mae or Freddie Mac websites to see whether this applies to you.  I would think by now, you’d know that, especially because you read this blog. You can anticipate that the moratoriums on the federal level will probably continue to be extended as long as we’re in the middle of a perceived pandemic.

STATE GOVERNMENT MORATORIUMS … NOW THAT’S ANOTHER STORY ALTOGETHER

Virginia’s moratoriums ended in May and eviction hearings have resumed. Some 3,000 people are facing being kicked to the curb, mostly for nonpayment of rent. Landlords are reportedly filing lawsuits to overturn the states’ moratoriums, all the while sending tenants threatening letters and text messages demanding rent in lieu of locking the tenants out of their homes. The Low-Income Housing Coalition published a partial list below:

In the following states, the courts have suspended evictions: California (indefinite on evictions), Connecticut, Delaware, Kentucky, Minnesota and Pennsylvania.

In the following states, the governors have suspended evictions and foreclosures: Florida, Indiana, Maryland, New York, New Jersey and Washington State.

In the following states, the legislatures enacted (or are enacting) laws to suspend evictions and foreclosures: Massachusetts and New Jersey (for an indefinite period of time in New Jersey, due to the COVID pandemic).

You should probably check with your individual state’s websites (I’m not going to do all the work for you) to see what moratoriums are in effect and for what purpose and for how long, especially if you’re delinquent in paying either your mortgage or your rent.

In non-judicial states, the banks don’t need the court’s permission to conduct a non-judicial foreclosure; however, where the governors have imposed moratoriums, the banks simply cannot act outside of that mandate.

All of this is because of COVID-19, stay at home orders, lockdowns and loss of income.

Many foreclosure courts have suspended or limited (to Zoom conferences) foreclosure and eviction proceedings because of COVID. Check with your local court to see whether it’s open for business or is conducting emergency petitions as needed.

There are certain states that are definitely NOT homeowner/borrower friendly, where it will be extremely difficult (if not impossible) to get a case fairly decided upon in  the lower court systems without having to resort to the appeals process … my picks are (1) Maryland; (2) Minnesota; (3) Michigan; (4) California; and (5) Washington State.  These are the worst in my opinion, given current case law.  The states that actually have judges who can get past their biases and get to the truth of the matter, or in the alternative, make getting an appellate reversal possible include (my picks): (1) New Mexico; (2) Maine; (3) Tennessee; (4) Florida; and (5) New York (especially in the boroughs). Most of my picks are based on how the courts treat the MERS System® and securitization.  Moreso, it’s about how one approaches the courts and how much attention is paid to their Rules of Civil Procedure and Rules of Evidence. When the judicial prejudices creep in … and you’re not smart enough to object to these prejudices as they apply to civil procedure or evidence, you end up getting screwed with no chance of appeal (all the legal doors are closed) … at least, that’s what the courts want you to think.

In my book, the States that have the MOST corrupt judges are (my picks): (1) Alabama; (2) Georgia; (3) New Jersey; (4) Colorado; and (5) California.  I ranked Alabama first because of its staunch prejudices. Georgia was ranked second because of its history (debtors’ prisons).  New Jersey was ranked third because of several cases I’ve been involved with that should have gone in favor of the homeowner but even in light of the Kemp decision, judges there are all pro-bank … and there’s no getting around that stigma. In Colorado, judges there can get you killed without any remorse from them or political blowback on them.  I base that on the several cases, including the death of Martin Wirth, which seemingly never got justice because the homeowners got boo-f00ed in the Rule 120 courts.

Add COVID-19 to the mix … given the fact that 99% of all government-paid employees … and that includes judges … believe everything their government tells them, even if it has no scientific basis in fact.

NOW THAT WE’VE COVERED COVID AND THE COURTS … LET’S TALK ABOUT CIVIL UNREST

The Mayor of Atlanta (who is of African-American descent … shit … you mean if I’m not politically correct, I’m screwed?) has urged her city’s residents to stop the violence.  21 people were shot overnight, including an 8-year-old girl who was a passenger in a car.  None of the shootings involved police officers, but rather what appears to be black-on-black crime.  How can you even think the BLM movement can sustain its credibility when shit like this is perpetuated?  I see her point.  BLM made their point.  Everything else past that is nothing more than hate crimes against society.  If the anarchists want Civil War (even on a limited basis), those cities run by Democrat mayors are breeding grounds for it because police response has been limited and no one is calling for federal help to stop the violent behavior.  Those in the major cities are probably stocking up on whatever guns and ammunition they can get their hands on and frankly, I don’t blame them.  They see what I see as a potential for spread of the violent behaviors to the suburbs and even the urban and rural areas as anarchists unite to spread their agenda, which rests on NO law and order.

The real problem with BLM is they’ve allowed (collectively) the anarchist movement to infiltrate their ranks and change their “direction”, which had … and is still having … a diametrically opposed negative effect.  It’s driving prejudices deeper underground and making people more “aware”.  It’s enough to be scared of getting COVID, which most have little understanding of it.  But then compounding that with unrest extrapolates that fear mongering into perceived action (uptick in gun and ammo sales).

For every action, there is an equal and opposite reaction.  If the sheriffs can’t grow a pair, the citizens will do it for them by taking matters into their own hands, vigilantism or not.

I was shocked to learn (earlier last month) that the Austin Police Department Headquarters (at I-35 and 8th Street, Downtown Austin), which I visited a time or two as a news reporter-news anchor for KLBJ (the station Pres. Lyndon Johnson used to own), was destroyed by rioters.  Knowing what I know about APD, I’m still in shock and surprised that this was allowed to happen.  It’s no wonder Governor Greg Abbott (who rules the Executive Branch from a wheelchair) is under fire for not doing enough in some areas while doing too much in other areas.  He didn’t do more to stop the violence in his own state capitol.  But then again, Austin’s “Keep Austin Weird” slogan speaks volumes when it comes to indifference.

Civil unrest can be predicated on civil disobedience.  Civil disobedience basically means ignoring government mandates in protest.  The right to assemble is protected by the U.S. Constitution. The right to riot, burn down buildings and shoot people is not protected.  Folks are still blaming President Trump for not doing enough; however, the 10th Amendment clearly reserves those powers not vested with the federal government to be reserved solely for the states themselves. If you’re going to blame anyone, look at your own town Mayor and commission first, then your state reps, then your Governor.  This is where the blame lies on the state level … first.  Not with the President.  Mr. Trump is doing exactly what he’s supposed to be doing … running the executive branch of the United States Government as promulgated under Article 1 of the U. S. Constitution.  You may not like the way he does things.  He’s a CEO remember?  He’s not a politician.  But like politicians, he plays favorites. What politician hasn’t, especially if there’s under-the-table sex involved?

Civil unrest is further precipitated because Americans (a majority of them, you decide if you’re one of them) are quick to place blame on everyone but themselves.  Given what is going on in Atlanta and the fact that 1,000 National Guard troops have been called out there, the BLM movement’s credibility is tanking.  Not only that, the systemic violence has further driven prejudice deeper into the souls of most of the citizenry.  The way I’m starting to see things (and you can disagree if you like), anyone who talks about their rights being infringed upon or oppressed because of their race … is espousing racism.  Anyone who feels as if they’re entitled to free shit because of their race (they got a bad break) espouses racism.  Anyone who thinks they’re more “privileged” than their fellow man because of skin color espouses racism.  Civil unrest and the propensity for it is exacerbated by racist behavior.  Racist behavior begats violence.  Racist behaviors are learned.  They do not occur in the natural state of things. They are taught.  White supremacists teach their kids to love the “white race” and that they are the only race that matters.  Kind of like Hitler.  That’s where the anti-fascist movement came in because every action brings an equal and opposite reaction.  With Congress polarizing America with its inept behaviors, it’s no wonder the “trickle down effect” has brought with it a different, diametrically opposed outcome.

We all have to sit back and examine where we learned these behaviors and why we were taught these behaviors.  I remember my own father taking offense to an activist who was invited into his church in order to survey the congregation to see how many “white folk” would sit down to dinner with a black person.  THIS is how these types of behaviors are engrained into society (and this was back in the late 60’s).  My dad worked with black people in his office (corporate America) and he respected them for what they stood for and knew they had the same opportunities as everyone else to succeed.

But NO!  We’d rather have a pity party and rant about how we were (and are) being oppressed.  Yet, admittedly, certain public figures of African-American descent have outspokenly told their kids how to react when stopped by the police. Now why on earth would they do that?  What precipitated the thought process that cops weren’t human?  Could it be that society gave a gun and a badge to citizens who didn’t (and shouldn’t) deserve one?  One of the most dangerous precepts of a civilized society is to let someone with severely-repressed racial attitudes play God in a squad car with someone else’s life.  We know that behaviors are learned.  Now we have to restructure what we’ve created, take out all the “bad apples” and move forward.

AS TO THE PANIC AND FEAR … 

These two processes drive stupidity.  Panic is what happens when you are not comfortable with the situation you’re in and if something went wrong, you couldn’t cope.  Fear is what it is … False Evidence Appearing Real.  Panic is the precursor to fear because the person displaying the mindset overcome with panic will allow fear to creep in based on the perception of what he sees and hears around him.  Assumptions can get you killed … as much as they can make you a perpetrator.  False beliefs not corrected will jeopardize a civilized society because people aren’t thinking rationally because they’re being “programmed” by what they see and hear on TV (mostly).  This is why cop shows and violence-filled sitcoms are more popular because people are being “conditioned” and “desensitized” to what is really happening in the real world. This is how governments take advantage of their citizens.

FORECLOSURES … SAVING THE BEST FOR LAST … 

While foreclosures are no laughing matter, being in denial that they could occur in one’s life is fundamentally bad for society, especially in communities where they are randomly prevalent.  Knowing your financial position in life should be your first priority because it is how you are able to develop a Plan B.  As much encouragement as I can muster here, nothing can compensate the loss of a home, especially if it has a lot of equity in it.  This offers you (if you’re in that position) a unique opportunity to get yourself upright and mortgage free!

A reader of my blog called me one day to ask about fighting a foreclosure on her rental property.  I asked her to weigh the possibilities based on the facts.  She had $150,000 in equity in the home and it was rented.  It’s just that with COVID, her renters weren’t making the payments, so the renters decided to vacate at the end of the month.  I asked her to evaluate the stress that would be added to the equation if she were to compare the monthly rent versus the amount spent in litigation trying to save that monthly rent. We both came to the conclusion that while the market was short of inventory, NOW would be the time to sell the property, pay off the note (and stop arguing whether the lender screwed you or not), save the stress, take the equity … and find a place in the country where you can park that equity and live within your means or at best, mortgage free.

People get frustrated examining situations like this because there are options to litigation but they won’t entertain them, even if it means simply staying put in your home (that’s going to be foreclosed on) while trying to make a Plan B work. Nope. That’s their home and they’re staying put until the sheriff kicks them to the curb.  That’s the opposite of why I started this blog in the first place.  If you had 10 rental properties that were all going to be foreclosed on, but they could bring you a net equity of $25,000 each … sell them, take the $250,000 out of the deal and restructure your life with it.  The Chapter 11 case in Tampa that I wrote about on this blog in earlier posts, where 52 properties were put into the BK and a fourth of them had their liens disallowed by the court and they did cram downs on the rest of them and got an angel to buy the paper on the remaining properties and refinance them all at a lower rate cost $160,000 to complete.  You can only do this if you have the reserves.  It’s a great Plan B and the judge loved it!  It was the chief judge too!

But seriously, how many people have 52 houses to put into a Chapter 11?   You have to scale down those factors and figure your litigation costs, whether you’re going to answer pleadings pro se … plan on how much time you need to “re-group” … and execute on your plans.  The bank doesn’t have to win the way they think they should. You can win by flushing your equity out ahead of time, scaling down … and restructuring your life.

With COVID-19 and the courts being stymied, you do have time to act.  However, this “pandemic” isn’t going to last forever and at some point, you will have to face the music.  How you deal with it is what makes you a winner or a loser.

As a parting thought … DON’T TAKE A VACCINE THAT YOU DON”T KNOW WHAT’S IN IT!  They’re looking for “test subjects” now and I’m not sure they’re paying. Not a good plan if you intend on enjoying any plausible future, eh?

Leave a comment

Filed under BREAKING NEWS, OP-ED

AMERICA BRACES FOR MASS FORECLOSURES AS ECONOMY RE-OPENS!

(UPDATE: SEE ADDENDUM TO THIS POST AT THE BOTTOM!)

(BREAKING NEWS — OP-ED) — The author of this post has spent the last 12 years researching securitization, foreclosure issues and other consumer-related, debt collection topics.  The opinions offered here are the authors and should not be construed as legal advice. 

FOR MANY BORROWERS, THE SHIT WILL HIT THE FAN! 

As expected, I’m getting backchannel feeds on the serious uptick in foreclosures, especially in the GSE-related foreclosure arena.  So here’s the immediate concerns, based on my current research:

  1. The government (through Congress) issued a moratorium on foreclosures due to the corona-crisis.  You can anticipate that it’s the calm before the storm because when the moratorium is lifted, the mortgage loan servicers for Fannie Mae, Freddie Mac, Ginnie Mae and conventional lenders have already made plans to ramp up on those lulled into a false sense of security. Congress will not interfere with the “pulse of the economic backlash” when it comes to the government’s own interests, FHFA or not.
  2. The mortgage loan servicers have been paying advances to the GSE’s REMICs (Real Estate Mortgage Investment Conduits) since Congress imposed the moratorium. Under their contracts, the servicers and/or subservicers  are required to pay investors the principal and interest on every loan alleged to be in “default” under the terms of the mortgages and deeds of trust these mortgage loan servicers are collecting payments from borrowers on that are allegedly contained within the REMICs.
  3. The longer an extended moratorium lasts, the more “in the soup” the servicers become because their surplus funds accounts they use to pay the advances with are being further depleted and they would logically be forced to “borrow” from everyone’s escrow accounts (“rob Peter to pay Paul”) to make good on their contracts, knowing full well that when (not IF) the moratorium is lifted, they will force the shit to hit the fan in order to foreclose, sell and reimburse themselves for all their losses.
  4. Those who have been able to make their mortgage payments every month despite the moratorium might want to check their escrow accounts to make sure they are solid and accurate and haven’t been “borrowed from” (the “robbing Peter” side of the equation). The servicers will emphatically deny they’ve raped every account they could grab money from; however, if notations aren’t made of the alleged “robbery”, how would the servicer actually know WHICH ACCOUNT they borrowed from, meaning the innocent borrowers who’ve made their payments every month will see a shortfall in their escrows, which could inadvertently put their accounts in default, which in turn could force borrowers to have to make up the shortfalls (through no fault of their own) to make up the difference to bring their accounts current.  This may be one of the reasons that Ocwen Loan Servicing and its parent issued $600-billion in securities to shore up their “advance” payments.
  5. Because the moratorium is set for 60 days out, whatever delinquencies occurred during that time will be calendared for default on that magic date I’ve talked about before … DAY 91!  Expect a rash of threatening letters from the mortgage loan servicers to borrowers in trouble as they push their collection activities forward another 30 days past the moratorium to hit that magic date!

DAY 91 FACTORS INTO THE ACCOUNTING, MORATORIUM OR NOT! 

It matters not whether you were given a “grace period” with this moratorium, the mortgage loan servicers are in business to make money by foreclosing on properties they can’t resolve; thus, if you don’t have a windfall to bring your loan delinquencies current, it will trigger DAY 91.

Prior to “DAY 91”, you may see the following actions taken by the mortgage loan servicers:

  1. DSNews is already reporting intended aggressive pricing on foreclosed properties to sell to third-party investors as quickly as possible.
  2. Anticipate MERS-related documents, particularly REMIC transfers and indirect transfers to the servicers themselves, as a means of justifying the upcoming foreclosures, which means those assignments are going to hit the land records just prior to the start of the actual foreclosure process.
  3. The faster the servicer can sell the property to the third-party investor, the faster it can convert title to the GSE “after the fact” and “lose” that REO inventory to the new buyer (with transfer of title) before the homeowner even knows what hit them. The GSE will then do a direct title transfer (through the mortgage loan servicer) directly to the third-party investor who will assume all risk of acquisition of a property stained by title issues.

THE GSE’S HAVE REMICS TOO!

One thing most people don’t realize (and this can be verified) is that the government sponsored entities set up REMIC trusts to obtain investor money they use to back the loans they guarantee.  If you’ll go to irs.gov and type in Publication 938 for 2009 forward in the search engine, you’ll see the listings (by quarter) LOADED with GSE-backed REMICs!  Depending on what year you took out your loan is the year you’d search for on that website, plus subsequent years in case your loan was traded into another related REMIC until trading stopped within the MERS System®.  The securitization process is a virtual “shell game” until the foreclosure starts and the roulette wheel stops on the particular REMIC the servicer is paying.  The servicer will then move toward the final DAY 91 objective … to cash in on the credit default swap, default insurance, PMI, LMPI or whatever other cash cow it can get its hands on to reimburse itself for all of the advance payments it made during the absent of the borrower’s payments.

In the meantime, Fannie Mae and Freddie Mac are now going to buy home loans going into the government’s forebearance program just after they close, something neither had done before, in order to provide liquidity to the mortgage markets so originators can keep lending.

So as not to keep regurgitating a point, I put a news story in the top link so you can see where the forbearance programs are headed.  The CNBC article (above) affirms everything I’ve been saying … as noted in the following paragraph:

“The four-month servicer advance obligation limit for loans in forbearance provides stability and clarity to the $5 trillion Enterprise-backed housing finance market,” said FHFA Director Mark Calabria. “Mortgage servicers can now plan for exactly how long they will need to advance principal and interest payments on loans for which borrowers have not made their monthly payment.”

So you see, the servicers took a gamble on the advances and went into the hole doing it … and the government is in bed with this.

Some friend the government is, huh?  They claim to give you relief yet who’s really getting relief?  The banks and their minions.  The Fed claims to have loaded $2.3-trillion into the economy, yet where did that money go?   Not into our pockets I can assure you.

Know this … no matter what administration is running the United States, the end result is the same … protect the government at all costs … screw the dumb-ass taxpayer who doesn’t know any better (the way “they” think).  These Congresspeople think they know more than you do. Could they be right?  After all, who’s the smarter … the ones who got elected or those who elected them?  Based on what promises?  The existing Congress, a majority of whom have been serving for decades, have done their best to protect their power bases while kicking the can down the road … in the name of politics.

And we collectively let them do it.  We have collectively fallen for their bipartisan, two-party, political crap.

Congress made a deal with the banks … to protect the banks … it’s in 12 United States Code … Banks and Banking.  Congress has repeatedly let the banks screw us.  And we collectively keep letting them do it.  When is the merry-go-round of craziness going to stop?  When we have a civil war?  Or maybe a revolution?  At the polls?  Or in the streets?

And we should not worry about the mortgage loan servicer’s accounting practices, right?

IF YOU’RE NOT IN DEFAULT, HOW IS IT THEY’RE TRYING TO FORECLOSE ON YOU?

All the while the moratoriums have been in place, the servicers were stuck paying the advances on the mortgage loans, whether borrowers paid their monthly payments or not. Now the piper is coming to collect. If you didn’t (or couldn’t) work out a forbearance proposal or loan modification during the time you were a shut-in, the foreclosure process (unknown to you) was probably on the back burner and now things just got fired up again.

Those in non-judicial states will be suffering more dramatically as they try to figure out how to cope with aggressive mortgage loan servicer activities in stopping courthouse step foreclosures by publication and sale.  These borrowers are in a definite time crunch as they don’t have the luxury of court hearings unless they create them through the filing of a lawsuit. That means money spent out of pocket in order to stay in the current “survival mode” we’re already experiencing as the economy starts to bounce back from quarantines and lockdowns.

Those borrowers residing in judicial states will ultimately “have their day in court”.  It will be a 90-120 day average by the time the case gets to trial.  Keep in mind that most courts will be closed until at least mid-July 2020, so the uptick in foreclosures will probably start after the 2nd quarter ends (in 2020).

But if the advance payments were being made … how is it you’re in default and the investors have been harmed?

That’s something the banks and their servicers say is not up to you to decide … as you don’t have a contract with the investors!

You have a contract with the originating lender, which in a securitized mortgage … is a corresponding lender!

And logically, you’re going to be searching the land records trying to find that pesky assignment, right?

But wait!  The servicer’s attorney’s are going to argue that you’re not a third-party beneficiary; thus, you don’t have a right to bring a claim against the assignment.  How is that relevant?  Your name is on the assignment, right?  The originating mortgage or deed of trust is referenced on the assignment, right?  Who said anything about being a third-party beneficiary?  You see … this is how the bank’s attorneys get the courts to agree with them, because your loan was securitized and you and the investor have no “nexus” or commercial connection to each other.

POTENTIAL SOLUTION … ATTACKING THE DOCUMENT ON DIFFERENT GROUNDS!

We are starting to see results in the use of the C & E (Cancellation & Expungement) Action as a viable way to throw a “monkey wrench” into the grind of the foreclosure machine.  The questions about this process vary but the crux is the same … what is it and how does it work?

In a brief step-by-step process …

  1. The borrower goes to the public record and obtains an office copy and one certified copy of the assignment(s) in question.  These are the suspect assignments, which may contain up to a dozen or so false statements and/or misrepresentations.
  2. The borrower then researches and procures evidence showing the statements contained within the assignment(s) are false and/or misrepresentative. You can bet that no right-minded cop or detective is going to investigate anything without being fully “briefed” on the subject matter showing why you believe the public record to be false and misrepresentative, constituting a felony recording under most state statutes.  Developing harder-to-find evidence may require the services of a private investigator.
  3. The borrower (still on title, generally) goes to the local police department and files a criminal complaint on the assignment(s). The complaint filing is designed to generate a police department case number.  The borrower can be expected to spend time with a detective or officer explaining the nature of the complaint, which is most likely going to be hand written on their complaint form. You can do this before or after you file (or respond to) a foreclosure action.  I generally prefer to do it BEFORE I file the action, that way, I can include the criminal complaint in my civil action for damages.
  4. I file a declaratory relief action against those responsible for the assignment(s). I would suggest following the criminal statute religiously and if applicable, couple it with the consumer protection act statute individually for the State (of the Union) I’m in, in a claim for damages.  I do NOT sue for wrongful foreclosure because the foreclosure hasn’t occurred yet.
  5. Make sure the other side’s lawyers get the criminal complaint included with the exhibits.  This not only lets the court know a crime may be connected with the foreclosure filing, but that the attorney for the servicer may be held as an accessory if they keep trying to insist the document is legal. No right-minded attorney, bank lawyer or not, isn’t going to risk being disbarred for going up against a criminal complaint.  If anything, it will certainly “shake them up”, possibly forcing a settlement.
  6. Make sure all parties (the party who prepared the document, the party who executed the document and the party who notarized the document) are served.  I find suing the servicer themselves is a moot issue if the foreclosure hasn’t occurred yet.  If the servicer sues and you find the assignment in question was prepared or ordered by the servicer or its law firm, then the law firm, if it prepared the assignment(s) are also named defendants because they knew or should have known that the information was false and/0r misrepresentative.  Include the law firm and the lawyer who prepared the document in the criminal complaint.
  7. If at all possible, keep the civil action and the criminal action going simultaneously.  Do not drop the civil complaint if the DA decides to prosecute the document and those responsible for creating it and recording it, in violation of the penal code.  By dropping the civil complaint, you’re sending a signal to the DA that you’re not serious about pursuing damages.  Two-pronged attacks are better than one.
  8. Prepare your deposition list.  You’d be surprised once you start moving for depositions of the parties involved they don’t come at you with a settlement, rather than risk a criminal complaint against them moving forward, thus reinforcing the civil action in the judge’s mind as being even more legitimate.  Do not hold back on the other side’s lawyer if the law firm prepared the document(s) that are suspect.
  9. Follow the court docket religiously.  That means twice a day for the entire duration of the lawsuit. Once in the morning and once in the late afternoon, before the court closes.  The other side will wait until the last minute to file stuff to screw with you, especially on Friday afternoon, when they can buy time over the weekend to screw with your calendar (your time off relaxing) and your ability to respond to their motion or brief.
  10. Be prepared for oral argument.  You never know when you’re going to get called into a hearing to determine the validity of your lawsuit. The judge may also query law enforcement to see what they’re doing about your criminal complaint.  In one instance we’re aware of, the local police department forwarded the complaints to the DA … AND the State Attorney General’s office for follow-up!  Also, make sure you have expert witnesses lined up that can validate both your criminal and civil complaint information.

I know we haven’t taught HOW to set up the criminal complaints in our regular C & E classes; however, this new injection of the police report does add a certain flavor of suspicion in our civil claim, don’t you think?  Imagine the consequences:

  1. The attorney handling the foreclosure matter attempts to interfere with the criminal investigation of the matter and ends up making the matter worse, potentially putting himself in a position of obstruction of justice.  The attorney for the bank cannot attempt to persuade authorities from looking into your complaint without lending suspicion of them being involved.
  2. The law firm or the attorney preparing the document ends up being indicted by a grand jury as part of the grander scheme of things.
  3. The judge handling the civil matter is found to be “side dealing” and interfering with the criminal case in order to further the civil case along to help the bank out, either through direct interference in the criminal investigation or by pushing the civil case forward in favor or the bank knowing a criminal prosecution is likely, which would make him an accessory to a felony … enough to remove him from the bench and potentially put him in prison!

There is also a potential chance that the criminal investigation will go nowhere because the investigators: (a.) weren’t provided with enough evidence or information by you to establish probable cause; or (b.) didn’t understand the nature of the complaint because of the way it was presented.

I have 18 sets of the C & E class (8 DVD-video set and the book, The C & E on Steroids!) available online on the Clouded Titles website.  Once these are gone, they will take time to re-order, more time than you might have. I don’t have to tell you that following this moratorium’s end, those in trouble … their days are numbered.

Remember, when you get the kit, I give you an hour of consulting on your specific case, which may include a call to a criminal attorney who can give me ideas as to how to posture your criminal complaint based on what evidence you have! 

UPDATE ADDENDUM:  As I mentioned on City Spotlight – Special Edition on WKDW-FM, which will repeat this coming Monday, May 4th at 2:00 pm. Eastern Time, CLICK HERE TO LISTEN, attorneys now have a duty to inquire whether the client is using their case to commit fraud or some other crime upon the defendant in a suit.  The American Bar Association’s Standing Committee on Professional Responsibility has issued Formal Opinion 491, to clarify this requirement in the wake of increased reporting of individuals using legal services for money laundering and terrorist financing.  But it goes beyond that definition, especially if the attorney(s) or their law firm participated in the drafting of the bogus assignment and then had it sent back to them once it was executed and recorded.  This is a way to: (a.) name the law firm in the suit; (b.) name the attorney in the suit; and (c.) force the attorney to inquire as to whether he knew before submitting the document to be executed that it contained misrepresentative statements, which could warrant criminal legal action against him and/or his firm.  This is where things get dicey for the other side because depositions and discovery can now target counsel who participated in any way in the drafting, execution and recording of a document that could be construed to be a third-degree felony in many states!

Here’s the formal opinion: aba-formal-opinion-491

 

 

 

 

 

 

Leave a comment

Filed under BREAKING NEWS, OP-ED, Securitization Issues

FANNIE, FREDDIE AND MERS: RECIPE FOR COLLUSION TO SCREW AMERICA!

(OP-ED) — The author of this post is a consultant to trial attorneys and author of Clouded Titles – Mayday Edition, which exposed the corruption in banking in tandem with darker forces within the U.S. Government to fuel the largest housing grab America has ever seen.  The opinions expressed here are his own and do not constitute legal advice or seek to draw and conclusions of law. 

There has been a recent unveiling of sorts that discusses the conflict between the two GSE’s (government-sponsored entities) and MERS, which clearly shows who in fact spearheaded the push to turn the secondary residential mortgage market into a lying, conniving, deceiving bunch of thieves that have promulgated the use of electronic promissory notes (“eNotes”), which are uploaded into an electronic database called Mortgage Electronic Registration Systems, Inc. (hereinafter “MERS”), which, at its conception, was owned by MERSCORP, Inc.   Both of these entities were Delaware corporations based in Reston, Virginia.  But no longer.

After being merged into MERSCORP Holdings, Inc. in February of 2012, nearly seven years into the eRegistry (the database itself, which operates electronically to store information on the mortgage loans; e.g. the note and the security instrument), MERSCORP Holdings, Inc. was acquired by Intercontinental Exchange, Inc. (hereinafter “ICE”), which also owns the New York Stock Exchange.  All of MERSCORP’s Reston, Virginia operations were moved to ICE’s data centers in Mahwah, New Jersey, where they exist today.

Collectively, MERS members pay $7.95 every time they enter a transfer of the eNote and its accompanying paperwork in the MERS® System.  Herein lies the rub.  The banking industry, in at least one letter to a judge (in 2009, in Florida), has admitted that once the paper “notes” are uploaded into the MERS® System and become “eNotes”, they don’t need the paper notes anymore and thus, they brag about shredding them.  On another note, there are “archives” all over the country that the megabanks claim hold the originals of the notes and mortgages, available within a reasonable time frame (to be retrieved) as a mortgage foreclosure case develops and the documents are called for.  But is that really the case?  What if these documents were actually “downloaded” from the MERS® System, printed out, and claimed to be (by the lender’s/servicer’s) the originals?

eNotes versus the Uniform Commercial Code (the “U.C.C.”), UETA and e-Sign

This recent article, authored by lawyers within the law firm of Dorsey & Whitney LLP, unveiled an eAlert which seeks to address potential issues which I thought might be useful for you and your attorney to know, or should they?  Due to the nature of the banks and their attorneys to play games with us and misdirect us at every turn with their propaganda … this article, whose link can be found here …

Potential Issues for Warehouse Providers with Electronic Mortgage Notes | Dorsey & Whitney LLP – JDSupra

… could be one major misdirect, according to our UCC guru Bob Janes, author of SHELLGAME MERS, Contrived Confusion, which can be found on the Clouded Titles website!

Here’s what Bob has to say about this article:

This paper shows an ignorance of negotiable instrument law and its interaction with Art 9 of the UCC. It appears to be a continuation of the effort to give appearance (operative word) of merit to the MERS system and the mortgage finance industries desire to profit by ignoring existing law and creating an sham appearance that might be able to help take people’s homes in future foreclosures without adherence to applicable law.

Secured interests under Art 9 are trumped (or is that a dirty word now?) by Art 3.  Only the person entitled to enforce the negotiable instrument has a right in the collateral (mtg or dot).  Whether the name of that person is in the chain of title for the mtg/dot is not important. 200 yr old common law, now codification by 9-203(g) are in unison: the collateral pledged to secure payment of the debt under a negotiable instrument always belongs the person entitled to enforce the debt pursuant to Art 3 of the UCC.  This paper does not address nor even encourage that the new e system design compile factual information necessary to determinations of enforcement right under the negotiable instrument law of Art 3.  The paper’s discussion of ‘perfection’ and ‘controller’ are irrelevant to determination of enforcement right under Art 3.  The paper shows no understanding of the importance of ‘possession’ of the note under negotiable law nor how and when possession is connected to the right to enforce the note.

The paper’s discussion of ‘holder in due course’ (“HDC”) also reflects the author’s ignorance or desire to misstate law.  The many elements of status as holder in due course are not addressed, nor is the system of maintaining eNote or eVault  requisite information/proof of the legal elements necessary to the right to enforce the note.   HDC is a subset of holders under the UCC.  Any person entitled to enforce the note pursuant to 3-301 (holder, nonholder in possession with rights of a holder, a person not in possession but with overwhelming evidence of having been the holder or nonholder entitled to enforce when the note was lost, stolen or destroyed) has priority rights in the mtg/dot regardless paperwork ‘perfection’ under Art 9.

The paper does not address the subservient role of Art 9 to negotiable instrument law and enforcement rights of Art 3.  This paper neither discusses the article 3 requirements for a person to be a holder in due course, nor does it demonstrate that information gathered and retained by the e-system will be useful in determining who has a right to enforce the note, and thereby, to enforce the mtg/dot.

Whether or not the enote/evault system becomes a reality, the homeowner defense against negligent or fraudulent foreclosure remains unchanged as long as the UCC remains as currently in the statutes of every state.  Merit requires discussion of the Art 3 detail necessary to establish enforcement rights in the note, and this paper is without demonstrated knowledge or effort to address the Art 3 requirements, policies, etc.

What do I think of this paper?  Not much.

The Continued Screw Job! 

So you see, Fannie and Freddie continue to peddle their toxic paper into our economy, further screwing with chains of title all across the country with every property their servicers stole on the back end of the foreclosure, which ended up getting transferred to Fannie Mae and Freddie Mac. You only see these two hoodlums on the back end of foreclosures, as they certainly wouldn’t rear their ugly head in the middle of one for fear of giving the government a black eye … and we wouldn’t want that now, would we?

It’s bad enough we have politicians polarizing America and screwing up everything they touch!  They don’t have the decency to quit interfering with the housing market by continuing to allow Fannie and Freddie to exist.

What’s worse, judges don’t really care about the UCC and are quick to misapply it.  Those who aren’t smart about what the UCC says (and turn their lamebrain lawyers loose in the courts repeating this bank’s diatribe) are sure to lose.  Yet we keep going to banks that don’t portfolio their own loans and keep doing business with them.  That’s on us!

 

 

Leave a comment

Filed under OP-ED, Securitization Issues

FDCPA CAN STILL APPLY TO NON-JUDICIAL FORECLOSURES!

(OP-ED) — The author of this post is the author of The FDCPA, Debt Collection and Foreclosures … and posits the following for educational purposes and for your consideration in the paradigm shift that has now become the focus of thousands of consumers.

I’ve noticed an uptick in the number of pro-bank/pro-debt collector law firm postings regarding the U.S. Supreme Court’s latest narrow ruling in the Obduskey case (out of the 10th Circuit Court of Appeals).  I love how these folks like to “pat themselves on the back” for their observations that non-judicial foreclosure proceedings can still be business as usual, despite the caveats their posts now contain.  Why on earth would they post “caveats” to the debt collection industry (which includes law firms like the one Dennis Obduskey filed an FDCPA action against) if they were so sure of themselves in being able to just walk all over borrowers they claim are in default?

Despite the fact the nation’s highest court resolved the federal circuit split on whether non-judicial foreclosures can continue as “business as usual”, the ruling was “narrow in scope” regarding the enforcement of security interests as defined under 15 USC § 1692f(6), which is what the Court focused on in its decision: Obduskey v McCarthy & Holthus LLP, 586 U.S. ___ (2019)

What Congress intended … 

Creditors used to love the idea that they could open up a can of “whoop ass” on debtors any time they felt like it, even late-night, repetitive or threatening phone calls (“I know where you live” and “your mommy’s going to jail” and “we’re going to sue you if you don’t pay” or “we’re going to bomb your office building if you don’t come down here and pay this bill” or “you !@)#(%^!”.)  The caveats I’m seeing in these law blog posts still make reference to the fact that the latest FDCPA-related ruling DOESN’T mean “business as usual”.  It simply means that debt collectors trying to enforce deeds of trusts have to be extra careful NOT to step over that well-defined line of intended “abuses” that do in fact, fall under the FDCPA!

Enforcing a recorded security interest (deed of trust, security deed, HELOC, etc.) in a non-judicial state means just that.  If a third party (the trustee, NOT MERS) intends on using the terms of the security instrument to act as the third party in taking back collateral, the collection activity has to specifically and purely involve that process.  The narrow ruling still prohibits abusive debt collection practices, whether or not a non-judicial foreclosure is still the intended outcome.  The abusive debt collection practices fall under 15 USC 1692d and 15 USC 1692e, as well as portions of 15 USC 1692f (1) through (5) and (6)(B)(C) and (7) and (8).  See here for clarification: FAIR DEBT COLLECTION PRACTICES ACT 09-1996

If you have a case … you have a case … 

Every time the debt collection industry scores a narrow victory, they pontificate their accomplishments as soon as humanly possible, almost to the point of bragging rights (see, I told you so … lemme rub your nose in it) kind of stuff.  This is typical of the legal profession, especially the kind that can operate unchecked when it comes to carrying out enforcement actions.

One of the more remarkable things I find is that all non-judicial foreclosures are assumed to be legal unless otherwise challenged.  One of the things I put forward in the book (mentioned above) is that careful analysis of the debt collection laws needs to be strictly adhered to (the letter of the law), which you are attempting to assert was violated.

How the “chain of title” points to potential suspect violations of 15 USC 1692e(5) … 

Here’s where the latest ammo we’ve been sharing on the C&E comes into play.  Cancellation and expungement (C&E) actions are used to disable and destroy the authority these debt collectors rely on to even enforce a security instrument.  Under “False or misleading representations” (§ 807 of the FDCPA), section 5 prohibits false, deceptive or misleading representation in threatening “to take any action that cannot legally be taken” … which would mean to me that if you could strip away the lies contained within the assignments that generally precede the initiation of a non-judicial foreclosure action through a C&E, the authority of the debt collector would be void and the debt collector’s representations would then be false and misleading, which IS a violation of the FDCPA!

Champagne budget … Beer Belly Pocketbook! 

A C&E action is definitely a cheaper way to wage war on an unsuspecting servicer (who is really behind the scenes of the debt collection/non-judicial enforcement proceeding), stripping away whatever rights it thinks it has to steal your house on behalf of party or parties unknown (which could be Fannie Mae or Freddie Mac, lest we hold the GSEs unaccountable in the end) than waging an all-out FDCPA battle in federal court, which costs substantially more money.  Try to keep the emotions in check for the moment while I finish.

The document the servicers are creating is the assignment of deed of trust (much like the assignment of mortgage), which they claim gives them the authority (on behalf of the alleged “lender”) to appoint a substitute trustee to initiate a non-judicial foreclosure.  Do you have a contract with the mortgage loan servicer?   (Didn’t think so.)  However, servicers have Limited Powers of Attorney, which they claim give them the authority to do whatever they want, including wading into the shark-infested waters of violations created under the FDCPA.  Strip away their authority under the assignment as void … they’re like “chum in the water”.

This is why I’m releasing a two-day training video DVD set with the latest book by attorney Al West and myself, The C&E on Steroids! in very short order.  What better a way to deal with America’s tainted real property records than to fight the good fight head-on in state court, rather than wage a flimsy, unsupported war in federal court without first demonstrating the ultra vires behavior of the trustee thanks to a phony assignment, which you’ve knocked out FIRST in a C&E action!

2 Comments

Filed under BREAKING NEWS, OP-ED