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Gonzalo Lira On What Brian and Ilsa Said To Their Bank: “Show Me The Note”

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Submitted by Gonzalo Lira

This Is What Brian and Ilsa Said To Their Bank: “Show Me The Note”

So the week before last, I wrote about Brian and Ilsa, a retired couple in their mid-to-late sixties, living in a house in the Southwest that had—unremarkably—gone underwater.

They had tried to refinance their home mortgage, under the auspices of the HAMP, the Home Affordable Modification Program. HAMP was part of the Financial Stability Act of 2009—the famed “Stimulus Package”.
Under this program, the principal of Brian and Ilsa’s mortgage loan would remain the same—they would not be getting a free ride. (Some readers mistakenly thought that they would. See note at bottom.)
But though the principal of their mortgage loan would remain the same, the period of their mortgage would be extended—and the loan itself would be refinanced with a lowered mortgage rate of 2.75%, from the 6.25% of the original mortgage.
Therefore, their monthly payments would go down roughly 40%—a significant amount for them, especially after their retirement savings had taken a big hit following the Global Financial Crisis.
What had been dreadful about Brian and Ilsa’s case was that, though they qualified for HAMP—and indeed, HAMP had contacted them, at least initially—they were given the bureaucratic runaround for several months, before they were finally allowed into the program.

And then, three months after their mortgage had been lowered, with no warning, they were told that they in fact did not qualify—even though the program fit them like a glove.
Indeed, the program had been tailored for people exactly like them: Retirees, who had suffered unforseen medical expenses on top of having their house go underwater. People who weren’t looking for a handout, but just to refinance so as to take advantage of the now-lower interest rates, and thereby lower their monthly payments.
But now, the bank was saying that they didn’t qualify. Out of the blue, no explanation, no appeal, nothing: They simply no longer qualified. To add insult to injury, they were also told that not only did they owe the difference in mortgage payments—they also now owed a penalty fee, for “incomplete payment”.
Brian and Ilsa tried complaining about the unfairness of the situation, but once again, they were given the runaround.
Then, they and I both discovered that a lot of the people who were initially said to qualify for HAMP in fact did not qualify—they were added to the program so that banks and servicers could collect Federal government bonuses, then bumped off the program once their three-month “trial mod” was over.
It didn’t matter if they qualified or not—it was all just some sort of sick game with these people, done so that they could get some of that Federal government bonus money. The proof of this was the undisputed testimony of a whistleblower—whose testimony was of course ignored by the mainstream media.
After all this heartbreak and frustration—and fear—Brian and Ilsa had reached the end of their tether: Ilsa had said, essentially, Fuckit, and was urging her husband Brian for them to strategically default. Brian was wavering, though he was as equally outraged as his wife.
The point of my piece was, If and when solid upstanding middle-class people such as Brian and Ilsa ever do throw in the towel and let out a collective Fuckit, then it’s curtains for the American Republic: You cannot have a viable society where the backbone of the country thinks that following the rules and the law is for suckers and chumps.
With the facts of their story in hand, I went off and wrote up my piece, posted it—and watched as it garnered 50,000 hits in a matter of days—over 70,000 hits as of today, eleven days later—and it’s still going strong.
I’m a pretty good writer—but I’m not that good of a writer: Clearly, my piece touched a nerve. Touched a nerve? More like gouged it out, put electrodes to it, then went all Abu Ghraib on it—that’s how vehement some of the reactions to my piece were.
Life goes on. Between when I last spoke to Brian and Ilsa, and when the reactions to my post started rolling in, Brian and Ilsa’s story continued, of course—
—and it took quite the amazing turn over the last couple of weeks.
“And we have you to thank,” Ilsa told me.
“Oh?” I said.
“Yes indeed,” said Brian—and then he explained:
While interviewing them, I had also been working on my “The Second Leg Down of America’s Death Spiral” post—the one where I swore up a storm.
In that piece, I discussed the mechanics of the Mortgage Mess, and how a seemingly trivial issue—chain-of-title—could well clog up the system and bring a collapse in the mortgage market.

I had explained how the banks, in their urge to securitize, had been sloppy with the mortgage notes. I explained how, potentially, this could mean that homeowners with mortgages might well be able to get out of their debt, since no one could now show who legally owned the note. Not just people in foreclosures—everyone with a mortgage that had been improperly handled.
While interviewing Brian and Ilsa, I had talked about these issues to them, at some length. Whenever they needed to take a break from telling me their own story—which as you can imagine got them wound up to high heaven with frustration and worry—I would stop and tell them about the Mortgage Mess, and what I was finding out about it: The crooked law firms manufacturing documents, the shyster banks who owned—outright—Congress. The whole sordid mess.

Also, talking to Brian and Ilsa about the ins and outs of the Mortgage Mess was my way of wrapping my head around the complicated issues at hand, and making sense of it before I wrote about it.
I thought that Brian and Ilsa were only half-listening to me, out of politeness, whenever I rambled on about MBS’s and chain-of-title and MERS and all the rest of it—but they paid me a lot more attention than I realized, at the time.
(Note to self—consider adding another aphorism: Always assume people are listening to you more closely than you realize, even if they seem to be distracted.)

A desperate person with a little bit of knowledge can be a dangerous thing—as Wells Fargo, Brian and Ilsa’s bank, soon found out.
Last Monday, October 4, after I had finished interviewing them and was busy writing my original post on the pair, Brian mulled over what I had told him about chain-of-title and the Mortgage Mess—I can just see him, head lowered, looking up: The epitome of the Kubrick Stare.
Brian dashed off an e-mail to his bank that night—a quick post, where he explicitly said, “I want to see the loan note where it says I owe you money, or else I’m contacting my lawyer and halting payment on my mortgage.”
The very next day, someone from Wells Fargo called them.
Not a machine, not a customer service rep in India—an actual, honest-to-God, alive-and-kicking bank executive.
She apologized profusely about the HAMP screw up—said that Brian and Ilsa qualified, they qualified, they qualified!, and that she would be the one to “straighten out their situation”.
Brian and Ilsa couldn’t talk that Tuesday, when the bank executive called. And for various reasons, they couldn’t talk Wednesday either—they finally talked to the bank executive on Thursday . . .
. . . and during those three days, it was the executive who chased them: Two e-mails to their AOL account, two phone calls on their answering machine.
On Thursday, when they spoke, the bank executive was sweetness and light—she told them that Ilsa and Brian qualified for HAMP, that they would get refinanced, that they would not have to pay the difference in mortgage of the last three months—“Your lower mortgage rate is locked in!”
And as to the $84 penalty fee, which had driven Brian in particular up the wall: It was waived.
Ilsa told me, “It was the nicest conversation we’ve ever had with a bank executive.”
The executive promised to have the papers drawn up, ready to be signed before November 1.
That’s right: November first. After dicking them around for months on end, Wells Fargo all of a sudden went from turtle-speed to light-speed—to warp-speed—boom!—just like that. They didn’t even engage thrusters, Captain—it was warp drive the instant Brian e-mailed that threat.
Threat?, you say. What threat was that?
The threat Brian laid down, in the e-mail he sent Monday night:
Show me the note, motherfucker!
That threat.
As I discussed in some detail in my “Second Leg Down” piece, the process of creating Mortgage Backed Securities inherently created ambiguity as to the note holder. This ambiguity in and of itself was not the problem—the problem was, along the way, the chain of title of the note was broken in a lot of mortgages. Thousands of them—maybe even millions.
At the same time, there was massive fraud by so-called “foreclosure mills”—bottom-feeding law firms hired by the banks to carry out the judicial process necessary for foreclosure and eviction. According to credible reporting (as I have mentioned, Yves Smith at naked capitalism has been all over this), the foreclosure mills were not only falsifying signatures, but they were outright fabricating documents—in short, committing massive perjury.
So between these two issues—broken chain-of-title, and systematic document forgery by the foreclosure mills—all of a sudden, the banks have a massive problem on their hands: Legally, their ownership of the note can be challenged—and if the blatant illegalities of the foreclosure mills touched the particular note, then its foreclosure could be in question.
All of a sudden, massive numbers of foreclosures and mortgages could be called into question.
So when Brian e-mailed and asked about the note of his mortgage loan? That was like a cattle prod to the crotch—that woke up Wells Fargo.
There was a reason the bank executive called them back the very next day, and warp-speeded their HAMP refinance: Brian and Ilsa’s note is probably either lost, or it’s been irretrievably besmirched by the broken chain-of-title mess, or the foreclosure mills mess, or perhaps both.
By refinancing, a new note is generated on Brian and Ilsa’s mortgage loan: Pristine and copacetic. They have to sign this new note in order to get the refinance. It doesn’t matter how the loan is refinanced—under HAMP auspices, or by any other means—once the homeowners sign on the line which is dotted, all of Wells Fargo’s troubles with that particular loan vanish—
—but they have to get people like Brian and Ilsa to sign: No tickee, no laundry.
I explained this issue to Brian and Ilsa, and furthermore told them that, insofar as their relationship with the bank is concerned, they’re in the driver’s seat:
If they wanted to? They could insist on seeing the note, hire lawyers, and take this to court—where Wells Fargo would lose.
The bank would lose because, once Well Fargo fails to produce their note, or the note’s chain-of-title is shown to be irremediably broken, the judge would be left with no choice but to declare that Wells Fargo has no standing to foreclose and evict Brian and Ilsa from their home. If Wells Fargo can’t produce a valid note, who are they to claim Brian and Ilsa owe them money?
This is how Brian and Ilsa—and the millions of other homeowners with mortgages, not just people being foreclosed upon—could wind up with their house scot-free, while the banks—and the Mortgage Backed Security holders—would be left eating the losses.

(Very important note: In my previous post, I skipped these specific legal steps, concerning how exactly homeowners could potentially wind up walking away from their mortgage loans, yet keeping their houses. Most important of all, I failed to explain how a broken chain-of-title nullifies a bank’s standing in court to bring about foreclosure and eviction proceedings. This failure of mine happened because I was so into the material that I didn’t realize that ordinary readers might not see or know the specific steps that would lead to a homeowner giving the shaft to their bank. I hope I have clarified the issue with the above explanation. Please accept my apology, and excuse my mistake.)

“If you play your cards right,” I told Brian and Ilsa over the phone, “you could get your house for free.”
Like I said in my first post about them: Brian and Ilsa are salt-of-the-earth people.
“But we took out a mortgage—we owe that money,” said Brian. Ilsa said, “All we want is what we were offered: A lower monthly mortgage payment.” Then Brian added, “We don’t want to take advantage of anybody—that would be wrong.”
Wells Fargo is lucky—how many other people are going to act as decently as Brian and Ilsa?
Actually, that’s the wrong question: Which of the banks, or the bank executives, deserve to be treated so decently?
I can’t think of a one.


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Mon, 10/18/2010 - 13:24 | 658619 Oh regional Indian
Oh regional Indian's picture

The PTB have an end game in this one. Like they have had for all their scenario planned model driven decisions on the macro level till date.

Do not underestimate your opponent.

We have not seen anything yet. The power to set laws is controlled by whom again?

This is actually just kabuki...


Mon, 10/18/2010 - 13:27 | 658622 cossack55
cossack55's picture

If this is Kabuki, can I be a bit player.  I would love to get on this stage.  Got to go call my lawyer.

Mon, 10/18/2010 - 18:51 | 659688 Buzz Fuzzel
Buzz Fuzzel's picture

I don't think so.  Just because the Bank can't show the note does not make the home the property of the people who are occupying it.

If you have never lived in a lawless time in a lawless land get ready for the shock of your life.

Mon, 10/18/2010 - 21:28 | 660051 The Rogue Economist
The Rogue Economist's picture

Agreed, the history of payment et. al., could be used to reasonably establish a debt agreement, but without the note, it would likely only prove an unsecured debt, with no right to foreclose in the event of default. That would be enough to scare a bank exec right there.

A bigger concern is if the national government enacts new laws to reestablish the chains of title, which would effectively say that they believe the banking crisis to over ride more than 200 years of states' property rights while quietly saying that they don't need the interstate commerce excuse anymore to impose regulation on the states.

And that would be a huge deal.

Tue, 10/19/2010 - 03:59 | 660582 66Sexy
66Sexy's picture

i think this bears repeating:


"Then, they and I both discovered that a lot of the people who were initially said to qualify for HAMP in fact did not qualify—they were added to the program so that banks and servicers could collect Federal government bonuses, then bumped off the program once their three-month “trial mod” was over. "


fuckin banks.

Mon, 10/18/2010 - 13:29 | 658629 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The power to set laws?  Just the question begs for a solution but there is no solution, because there was no problem in the first place!  It is not to, 'not have fear' but not to fear fear.  Fear is in the anxiety and it will be in the light, but we must understand that it is in our power to know, because we at first do know, we do understand.  For it is our power.

Mon, 10/18/2010 - 14:04 | 658737 Oh regional Indian
Oh regional Indian's picture





Mon, 10/18/2010 - 16:07 | 659083 AcidRastaHead
AcidRastaHead's picture

Allow me to elucidate: The fear is in the anxiety which is the path to the light and therefore power.  Now look over there into the light, yup that's power and fear holding hands and wearing overalls.

Mon, 10/18/2010 - 14:39 | 658877 whatsinaname
whatsinaname's picture

But as Bruce K. has posted last week, what's to prevent WF from nullifying the mod that they gave to this couple ? If WF does that what is their recourse ? Walk out as they most likely were gonna do anyways ?

Mon, 10/18/2010 - 13:55 | 658709 Hdawg
Hdawg's picture
by Hdawg
on Mon, 10/18/2010 - 12:52


just doing god's (cough Rothschild's) work.


This site is a conspiracy.


by Hdawg
on Mon, 10/18/2010 - 12:54

forget all the other anti-zionist noise...this is the truth.

Mon, 10/18/2010 - 14:14 | 658788 kathy.chamberli...'s picture

well, i learned about ask to see the note, more than a year ago. i asked everyone but was totally avoided. i wrote to the Colorado FBI about my mortgage fraud that occurred throughout my entire buying process of real estate contract. i was using words like title fraud, mortgage fraud everybody looked at me like i was the criminal saying those are pretty harsh words and accusations. yea, that is what this country reacts to, me blatantly using the correct english language to describe what happened to me. i learned all this by reading professional people that get license in colorado are suppose to adhere to a standard or code of ethnics. that is why i was accussing Chase of fraud and i wanted a title and mortgage forensic done on my loan. they just ignored me. then evicted me from my condo by entering  through the front door on dec. 28, 2008 and changing the locks and putting a lock box on my door without telling my attorney who was working with them the code. can you imagine if i could take this to a court, cause it is also elder abuse. i just start to go back into my deep depression when i read this story about this couple. at least they have each other. all my friends deserted me and my daughter because they thought i was the criminal. well it is good to know i can start talking about my experience and maybe it can help someone. i have been so embarrassed for the last three years of my life because of my mistakes buying this toxic fume condo, i just stopped communicating with people cause i don't hang my wash outside to dry. oh brother.

Mon, 10/18/2010 - 15:07 | 658956 Bryan
Bryan's picture

I'm sorry if you went through that mess, especially as a single mother (and senior?).  But your story doesn't sound like one that would come from someone whose avatar is a pair of braless boobs.

Mon, 10/18/2010 - 16:18 | 659129 percolator
percolator's picture

Grandma Kathy is just showing off what her cash out re-fi bought her.

Tue, 10/19/2010 - 03:42 | 660574 The Navigator
The Navigator's picture

You assume to know something by her avatar? - Not cool, but cruel when you "kick 'em when they're down". How about a little compassion.

Tue, 10/19/2010 - 13:31 | 661824 Temporalist
Temporalist's picture

Kathy that is the best thing I've read from you...and saddest.

Buck up your time will come and things will get better.  Fuck those people that didn't listen and the bankers and your so called friends. 

Hold your head high for being right and watch as everyone else around you learns what you already knew but were defrauded on.

Mon, 10/18/2010 - 15:11 | 658964 Pituary Retard
Pituary Retard's picture

More like Bukaki.  This time the commoner gets to make the money shot.

Mon, 10/18/2010 - 13:26 | 658620 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Yeah that is right!  The banks are here to steal your real wealth!  The same question that was asked about the note should be done about monie.  Do not use the banks ways, ever!  Take your homes and your wage and your monie back! 

Mon, 10/18/2010 - 13:57 | 658714 Victorio
Victorio's picture

Exactly, show them no mercy.  Certainly they do not deserve to be treated with any decency, or perhaps as much decency you would show a granny looting grifter theif. 

Mon, 10/18/2010 - 13:26 | 658621 bugs_
bugs_'s picture

There must be an internal "high priority" escalation path for any customer that mentions their note.

Mon, 10/18/2010 - 13:27 | 658623 kengland
kengland's picture

Where the hell did the money go after the foreclosed house was sold? Still haven't answered that question.


I suppose it would behove the bank to funnel the proceeds back to the "trust" in order to right each one off as a potential put back but I doubt it. I want an accounting of the proceeds for the last 3 years

Mon, 10/18/2010 - 13:27 | 658624 RobotTrader
RobotTrader's picture

It's only a matter of time before the mortgage industry is nationalized via a Fed takeover of MERS.

Too close to the election, and Bernanke absolutely will not be embarrassed by a crash in the XLF the last 20 days into November.

Mon, 10/18/2010 - 13:57 | 658715 FEDbuster
FEDbuster's picture

Then it will become a federal vs. state issue.  States have traditionally made laws regarding real estate.  I cannot imagine a situation in which the states will rollover and give property rights up to fedzilla.  Of course they could say that states that don't give control of real estate law up, will not be able to participate in any federal mortgage programs.  The 800 lb. fedzilla would use the power to print "money" to once again pimp slap the states into submission.

Mon, 10/18/2010 - 14:14 | 658783 B9K9
B9K9's picture

He's trolling.

Mon, 10/18/2010 - 14:29 | 658844 FEDbuster
FEDbuster's picture

You don't think the federal government would like to have control of real estate law?  Explain the "trolling" comment.

They have taken all kinds of powers from the state with the threat of cutting off the money flow, why would real estate be exempt?

Mon, 10/18/2010 - 14:44 | 658897 Crime of the Century
Crime of the Century's picture

Meredith Whitney just released a forensic evaluation of the states entitled "Tragedy of the Commons". Basically it says, states might do whatever they're told because they can't make it without Uncle Ben. Look for a quid pro quo on the mortgage mess.

Mon, 10/18/2010 - 15:25 | 658992 NotApplicable
NotApplicable's picture

Ding, ding, ding, Winnah!

Given that all states are insolvent due to pension funds alone (regardless of asset "quality"), they will certainly roll over and play dead for the right payout amount. Not to mention, at least half of the states are on the hook to the Treasury for unemployment funds. They have no choice other than to rely on Uncle Sugar.

Besides, the voting sheeple love it when states are subdued under the guise of federalizing a problem in order to make a "fair" solution across all fifty states.

Mon, 10/18/2010 - 16:34 | 659122 B9K9
B9K9's picture

Not you - Robo. He's throwing out ridiculous scenarios in order to justify his cynical portrayal of the Fed's boundless 'power'. Anyone hanging out @ ZH (and has image posting rights) is just like everyone else in terms of understanding what's goin' down. But in order to gin up reactions, he's got to bait readers. Hence, the trolling remark.

Now, whether or not wants to take over more state responsibilities is debatable. The only reason they were able to pass O-care was that the Dems presented themselves as a reform party in 2008. Fool me once, shame on you, fool me twice, shame on me. If the 112th Congress reneges on their reform platform, I'm not sure anyone is going to want to be around to see the fireworks.

Rather, all the new Congress has to do is nothing, and the whole shabang finally comes down. These things tend to go in cycles - the banker-govster crime syndicate is done. It's time to come to grips with what comes next, not indulge in some fantasy about how they are so omnipotent that they will crush all before them without resistance.

Mon, 10/18/2010 - 14:36 | 658867 Careless Whisper
Careless Whisper's picture

MERS has no employees! It is just a web site that allows for the transfer of mortgage notes in a parallel universe.

Mon, 10/18/2010 - 16:09 | 659094 Ned Zeppelin
Ned Zeppelin's picture

Fedes have power under Commerce Clause to nationalize the mortgage and foreclosure process.  Just need CONgress to act.  They will validate otherwise non-compliant transactions, even retroactively.  As long as the "deadbeat borrowers" drum keeps a-beating, which if you recall was first beaten on by Santelli on CNBC, and started the Tea Party movement, this will fly.  This legislation will also allow another time window for REMICs to be fixed. Oh, and that pesky electronic notarizations act will pass as part of it.

What it won't repair is where the same mortgage was sold twice or more.

Mon, 10/18/2010 - 16:54 | 659252 B9K9
B9K9's picture

Just need CONgress to act.

OK, let me get this straight. Are you suggesting that the new Congress, which just happens to be running on an anti-TARP platform will, once sworn into office, turn around and:

  • Authorize Ben to print $trillions to purchase compromised MBS?
  • Destroy the dollar and drive gas over $5/gallon?
  • Weaken our mission objectives in the ME?
  • Further undermine states' rights? AND
  • Once again save the hated TBTF?

Ain't gonna happen Charlie - and I have one FRN I have promised to eat if it does. Realistically, this is all that has to happen once the 112th is seated: nothing. Doing so will then launch this cycle:

  • Ben is told to knock off QE ... or else
  • Dollar strengthens, driving gas below $2-3/gallon
  • Improve our mission objectives in the ME
  • Provide greater support to states' rights, AND
  • Destroy once and for all the hated TBTF

Edit: Or are you suggesting a lame duck Congress does something of monumental significance in its last two months following a historic shellacking?

Mon, 10/18/2010 - 19:59 | 659863 Mad Mad Woman
Mad Mad Woman's picture

It's going to happen in the lame duck Congress. They're going to rescue the fraudsters with new legislation that will pass so quick it will make your head spin.

Mon, 10/18/2010 - 20:38 | 659948 FEDbuster
FEDbuster's picture

B9K9, I admire your faith in politicians to solve problems and control situations.  With the single exception of Ron Paul, I have no such faith in any of them.  If you think the whores are going to stand up to their pimps this time around, I think you will be sadly disappointed.

On the bright side FRNs go down much easier than gold coins (you know you can't eat em).


Mon, 10/18/2010 - 20:33 | 659936 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

 I cannot imagine a situation in which the states will rollover and give property rights up to fedzilla

Put a couple billion dollars of fed money tied to following the rules they make and states will trip over themselves to get it. No matter how unlawful or damaging to the electorate. One billion, of the billions, will go straight into the pockets of local politicians explaining that we must accept the new law. SEIU, UAW, NEA, AFL-CIO, get their cut first

California would kill you for 25 cents. Union bosses for 2 cents

Mon, 10/18/2010 - 14:00 | 658726 Oh regional Indian
Oh regional Indian's picture

"It's only a matter of time before the mortgage industry is nationalized via a Fed takeover of MERS."

Spot on Robo. That is what I was trying to allude to, they have all the bullets and the guns, regulatory, legislative, military, business.....

C'mon folks. It's definitely tipping time, but not as chaotic to PTB as it seems to us, down here.


Mon, 10/18/2010 - 14:23 | 658812 B9K9
B9K9's picture

Look, India got lucky by sitting around and waiting for the Brits, who had just been bled to death, were dealing with the same stuff in Palestine, and were operating in a post-Buchenwald world, to just get up and walk away from the sub-continent.

Evidently you didn't stay here long enough to meet any of the brawlers who are descendants of the same people who physically kicked out our prior masters. While admittedly the country has changed a lot, there are still a significant number of Americans who think this way:

Men, this stuff some sources sling around about America wanting to stay out of the war and not wanting to fight is a lot of baloney! Americans love to fight, traditionally. All real Americans love the sting and clash of battle. America loves a winner. America will not tolerate a loser. Americans despise a coward; Americans play to win.

Mon, 10/18/2010 - 14:38 | 658876 Oh regional Indian
Oh regional Indian's picture

B9, not sure where you came up with that idea and tone.

Since you have, I'll say this... brawlers don't win wars. They win brawls.

Real world is different from UFC and brawling.

Warriors win wars.

And I'll tell you what, I stayed long enough to see that wrriors were in short supply there. As they are here, in India, as well. 

No need to get all Jingoistic on me.


Mon, 10/18/2010 - 16:01 | 659070 B9K9
B9K9's picture

Sorry, it's just that when someone suggests yet another state takeover by the federales, it demonstrates either too much hyperbole or plain ignorance.

Rather than further usurpation of states' rights, the trend is actually reversing. O-care is now being challenged on a federal basis; whether or not it survives is moot, because it will eventually be repealed simply due to lack of funds.

The trend is deflation, which means order (ie the center) is disintegrating.

Mon, 10/18/2010 - 21:20 | 660040 robobbob
robobbob's picture

"Men, this stuff some sources sling around about America wanting to stay out of the war and not wanting to fight....Americans despise a coward; Americans play to win. "

General Patton, May 17th 1944 to the assembled American D-Day forces

they brawled rather well I think, and yes, Americans talk this way in real life SHTF moments

If you are not a US citizen, you get a pass for not knowing quintessential moments in great American speeches-even if re-enacted in famous movies

Mon, 10/18/2010 - 16:21 | 658778 B9K9
B9K9's picture

I enjoy the way you play devil's advocate with yourself. The problem is, ZH gets many readers who may believe that you're sincere about what you're writing. So, to clarify the issue for these readers, what Robo is actually saying is this:

Neither Congress or Bennie & the Fed are going to do anything before 11/2, other than attempt to maintain the status quo. That is, small scale QE in the form of POMO & front-running the mortgage mess PR aka "nothingburger".

Depending on the outcome of the election, if the TEA party sentiment (expressed as anti-incumbent) captures large gains, nothing is going to be done by a lame duck Congress nor Ben, other than try and eke out another 2 months of the same old, same old.

The reason neither Congress nor the Fed won't do anything drastic is because they know they are literally playing with fire. IOW, they aren't the only game in town, because there's this other guy down the road who goes by the name of Mic that just might get involved.

You see, he's taken this pledge about enemies, foreign & domestic, that just might get a hearing if gas ends up north of $4-5/gallon. (Stations around SoCal are now up to $3.25+ in some spots.) Secondly, he's got his own operational issues that require the $USD to remain some semblance of value. Trash the dollar, compromise mission objectives ... um, I don't think so.

If & the Fed had all the power they claim, or that some people seem to think they actually have, we wouldn't even be here in this situation right now would be? The truth is, the ingenious model the banking state devised is going all to shit, and there's nothing they can do to stop it.

We're melting! Melting! Ohhhhh, what a world, what a world! Who would have thought that some little serfs like you could destroy our beautiful wickedness. Ohhhhhh!!! No!!! No!!! We're going. Ohhhhhhh. Ohhhhhhhhhhhhh...."

Mon, 10/18/2010 - 14:26 | 658833 ATG
ATG's picture

Can't fool Mr Market.

Banks down -27% since failed QEII first began.

Targeting -40% and then some

Mon, 10/18/2010 - 14:41 | 658889 whatsinaname
whatsinaname's picture

Robo your tone has shifted lately ? Time to trade the other way around now ? Kudos to your strategy all year around. Wonder if the watershed moment is coming to the markets come November..

Mon, 10/18/2010 - 16:04 | 659077 tallystick
tallystick's picture

Fed won't commit suicide.

Mon, 10/18/2010 - 16:32 | 659169 Rotwang
Rotwang's picture

Hey Robo,

It all depends on what mortgages (dependencies) are leveraged on.

So much restructuring in society has taken place since actual land was conveyed for money and consideration. That's why we have 'REAL ESTATE'.

Which is a construct built upon an edifice.

But 'REAL ESTATE' and 'land' (the stuff that humans can kiss the dirt of) are not synonoumous. Why don't you dig it out?


Mon, 10/18/2010 - 13:28 | 658626 Ricky Bobby
Ricky Bobby's picture

Maybe this MBS cluster will be the spark to a real honest to God Rebellion. What if? The little people just decided one day to not pay the mortgage and in addition clog the courts with legal resistance.

Mon, 10/18/2010 - 14:26 | 658832 kathy.chamberli...'s picture

the courts are already cogged my court date was 13 months out from when my attorney applied. imagine.

Mon, 10/18/2010 - 13:30 | 658631 diesel1104
diesel1104's picture

I agree with your assessment 100%.  

Mon, 10/18/2010 - 13:31 | 658632 weinerdog43
weinerdog43's picture

Well done Gonzalo, but one quibble.  I think you need to be a little more clear about how/why Brian & Ilsa came to have a mortgage in their 'mid to late 60s.'  It is one thing to have to mortgage the house to afford critical medical care.  It is quite another to be buying a house w/a 30 year note at age 60 with the hope of flipping it for one's retirement 'savings'. 

Mon, 10/18/2010 - 13:38 | 658661 sethco
sethco's picture

now why would they ever think they could do such a thing? Why were they allowed to? let's get to the root of the problem...

Mon, 10/18/2010 - 14:00 | 658728 FEDbuster
FEDbuster's picture

Shouldn't there be a law that no one over age 50 can get a 30 year mortgage.  What we need is more laws to solve these problems.  (sarcasm off)

Mon, 10/18/2010 - 14:04 | 658738 blunderdog
blunderdog's picture

This view seems odd to me.

MANY older people have mortgages with terms longer than they may expect to live.  There's nothing wrong with such a circumstance.  Life insurance benefits sufficient to cover the outstanding lien address the problem of a death, and low mortgage expenses which can be covered by predicted SocSec and pension payments ensure that payments can be made until liquidation or death.

Admittedly, most buyers didn't likely expect housing prices to drop off a cliff, but that's not at all relevant to the ultimate "settlement of all accounts." 

The net effect of this situation is just to reduce the size of the estate as passed on to heirs.

What business of that is anyone else's?

Mon, 10/18/2010 - 14:12 | 658766 packman
packman's picture

It is one thing to have to mortgage the house to afford critical medical care.  It is quite another to be buying a house w/a 30 year note at age 60 with the hope of flipping it for one's retirement 'savings'.

My guess its it's neither.  They were probably like millions of other Americans who had been sold on the prospect that housing is a good investment vs. pretty much everthing else, including the stock market.  And whatever's a good investment is even better when it's leveraged (say via a mortgage) - right?

Specifically - if you can get a tax-deductible loan for 4-5% and invest it in the stock market, which goes up 8% over time - why wouldn't you?

That's the preschool-level economics that have been sold to the American public by the bankers, and it has worked.  ("Worked" meaning enriched the bankers)

Perhaps in Brian and Ilsa's case there's more to it than that - but I'll bet not.  At least with tens of millions of others - they've been sold on the matra "why tie up that money that's locked in equity in your house?"

In short - probably only about 10% - maybe 20% - of the people who own a house in the U.S. understand that it's actually wise to pay it off, rather than maintain (and renew) mortgages into infinity.

Mon, 10/18/2010 - 15:33 | 659006 aerojet
aerojet's picture

You forgot the part about the idiots who took HELOCs and put those into the stock market as well.  Fucking genius!

Mon, 10/18/2010 - 15:35 | 659011 weinerdog43
weinerdog43's picture

Sorry, I should have been more clear.  You are of course, correct.  It really is none of our beeswax why they have a mortgage.  The banksters have screwed the pooch.  Full stop.  My point really goes toward optics.  I can try a case with the facts AND the law on my side and still lose because I didn't convince 12 people why they should side with my client.  Regardless of how Geo. and Ilsa got in their predicament, while it should not matter, it really does if you have a story to tell.  House flippers are unsympathetic, but folks that people can identify with tell a great story. 

Mon, 10/18/2010 - 18:59 | 659711 Canoe Driver
Canoe Driver's picture

Not among the ranks of sympathetic witnesses are also penniless semi-employed lawyers such as yourself.  How does it feel to be invested in yet another collapsed industry? 

Mon, 10/18/2010 - 22:28 | 660176 RockyRacoon
RockyRacoon's picture

how/why Brian & Ilsa came to have a mortgage in their 'mid to late 60s.'

I'm 62 and working on a conventional 30 year refi.

Ain't none o' yore bidness why.

Why would I still have a going business when I'm supposed to be "retired"?

Tue, 10/19/2010 - 04:10 | 660590 The Navigator
The Navigator's picture

In Europe, the old you get the harder it is to get a mortgage. In the US, age discrimination plays into it.

IMO as long as the borrower can pay it off (either thru life insurance or cash in estate) and not encumber the taxpayer, fine with me.

Mon, 10/18/2010 - 13:31 | 658634 kdervin
kdervin's picture

Brian & Ilsa should still demand to see the note.  After all, the bank tried to take advantage of them.

Mon, 10/18/2010 - 13:50 | 658690 rumblefish
rumblefish's picture

"Brian & Ilsa should still demand to see the note.  After all, the bank tried to take advantage of them.

" - I don't understand statements like this. How is a bank taking advantage of them by trying to get theM to pay what they owe and agreed to repay?

Mon, 10/18/2010 - 14:10 | 658764 sweet ebony diamond
sweet ebony diamond's picture

How did they get into the mortgage contract in the first place?

I think that should be your first question.

Mon, 10/18/2010 - 15:01 | 658942 MachoMan
MachoMan's picture

their own volition?

Mon, 10/18/2010 - 14:45 | 658898 MsCreant
MsCreant's picture

Start with that $84 penalty they were being asked to pay, and multiply it by the other HAMP people that were later told they did not qualify and were asked to pay $84 too. Start there.

Some of you folks defending the banks blow my mind. Does the conditioning run this deep? Brian and Ilsa probably can't sell that fucking house without extensive title research which may or may not be resolvable. THEY WERE TAKEN ADVANTAGE OF.

I wish they'd go all 1776 on those bankers' asses. Strike them where they live.



I hope this is not moving the couple from a non-recourse loan to a recourse loan. That is my worry for them. Do they know the property is probably going to go deeper underwater? I hope they do. I admire integrity, but the bank sure will screw them in the blink of an eye and think nothing of it. They think too much of the bank. I just hope they know.

Mon, 10/18/2010 - 16:13 | 659113 Ned Zeppelin
Ned Zeppelin's picture

If Wells is bending that far over backwards, they don't have the note, and Ilsa and her hubby should go see a good lawyer.  They might get out of the obligation.

If you think anyone in business wouldn't attempt the same manuever, and especially someone at JPM, Goldman, etc. you live in a different world than me. 

"Nothing personal, strictly business, you know."

Mon, 10/18/2010 - 16:40 | 659189 rumblefish
rumblefish's picture

"Some of you folks defending the banks blow my mind. Does the conditioning run this deep? Brian and Ilsa probably can't sell that fucking house without extensive title research which may or may not be resolvable. THEY WERE TAKEN ADVANTAGE OF."

Its not conditioning and I don't think its defending the banks to say that these folks took on a debt and promised to repay the debt on their own. They were not taken advantage of. This we're a victim BS is exhausting.  



Mon, 10/18/2010 - 22:33 | 660192 RockyRacoon
RockyRacoon's picture

You are stubborn aren't you?  I would surmise that you have a mortgage, and that you are current.  You've paid all your bills all your life.  Someone else, regardless of the circumstances, who fails in their obligations are low-life.   Know what that's called?

A holier than thou attitude.

Mon, 10/18/2010 - 16:46 | 659216 Max Hunter
Max Hunter's picture

Some of you folks defending the banks blow my mind. Does the conditioning run this deep?

Yes.. sadly even deeper.. The guy you replied to conveniently skipped over the part about qualifying and getting a lower rate for 3 months only to have it jerked away..

Mon, 10/18/2010 - 14:46 | 658904 poorold
poorold's picture


try to understand this...the BANK asking them for their money CANNOT PROVE the money is owed to them.

Mon, 10/18/2010 - 15:05 | 658947 MachoMan
MachoMan's picture

No, but routinely paying it to the bank is substantial proof of the existence of an obligation to pay...

Mon, 10/18/2010 - 15:08 | 658957 Gordon_Gekko
Gordon_Gekko's picture

No, it is only a proof of gullibility of the alleged "debtors".

Mon, 10/18/2010 - 15:26 | 658994 Pituary Retard
Pituary Retard's picture

Let's not put the cart before the 500lb gorilla.

What "obligation to pay"? Obligation to whom? Ah, yes, the holder of the paper.  What's that you say, you don't know where the paper is?

So sorry, if you're that irresponsible (in this case greedy as all get out) on due diligence, you deserve what you get.

Mon, 10/18/2010 - 16:53 | 659247 MachoMan
MachoMan's picture

You have to pay the holder or his/its assigns.  You have to receive notice by the bank of who to send your payments to, or otherwise you keep sending them to the original bank and should be given credit for any payments in the interim (possibly in a very roundabout nature).  If you sign a promissory note with me and the note gives me the option of assigning it to anyone I choose and also you acknowledge that you will pay my assignee(s), then you have no right to question my assignees...  all you need is a statement from me that I assigned the note and person/entity X is servicing it now.

It's not that simple...  do not confuse the cloud of title (improper mortgage/foreclosure) with the obligation to pay the promissory note...  trust me, someone out there is the "agreed" holder of the note...  they paid for it...  other people received consideration for it...  that's what's so goofy about this whole thing.  The holder of the note is not in dispute among the chain of sale...  

Mon, 10/18/2010 - 15:51 | 659042 NotApplicable
NotApplicable's picture

They aren't the same banks. You pay your mortgage servicer, not the investor.

Hell, I don't even know who my investor is, as they've chosen non-disclosure. All I know is that every month I pay WF, and they pay out to whatever derivative my note is bundled with.

Which means, I can pay the note off yet still, never, ever comfortably have a clear title.

Having a debt is one thing, having a lawful title transfer process is another.

Mon, 10/18/2010 - 17:04 | 659300 MachoMan
MachoMan's picture

If a mortgage is originally recorded by WF and it's the only mortgage ever recorded...  and then you pay off your note and WF issues a release, practically speaking, you're good to go.  Just need an affidavit that WF is authorized to bind all the "owners/investors" and include a copy of the contract that authorizes them/trust/etc.

The other issue is that defenses exist in perpetuity (only causes of action have statute of limitations).  Meaning, I paid X to the bank I was supposed to, I get foreclosed on, I have right to set off for X from whomever challenges.  So, when they come in and attempt to foreclose, you just assert your defensive rights, show proof of payment, testify that you never received notice of an assignment, and tell them to eat it.

You can also attempt a quiet title action...  but that will only be as good as your service and will cost quite a bit.  But, it should be conclusive once done and you'll have a helluva lot of favor in the court's eyes if you paid off your note.

Mon, 10/18/2010 - 22:39 | 660201 RockyRacoon
RockyRacoon's picture

So, when they come in and attempt to foreclose, you just assert your defensive rights, show proof of payment, testify that you never received notice of an assignment, and tell them to eat it.

The Sheriff ain't gonna be interested in looking at your cancelled checks while the locksmith is working.

You can also attempt a quiet title action...  but that will only be as good as your service and will cost quite a bit.

With proper title assignments having been done, this procedure would be unnecessary.  You're advocating more legal expenses when none should be needed.   This is not what the laws already on the books concerning real estate ownership is all about.   Equity in these cases is not something that one should have to sue for.

Tue, 10/19/2010 - 10:35 | 661127 MachoMan
MachoMan's picture

I work with the sheriff's office routinely on foreclosure/ousting matters.  If you show a deputy cancelled checks, they're going to back up and call the attorney attempting to oust the present possessor of the premises.  Do you realize how rare it would be for someone, instead of solely saying "but I paid, I PAID, I SWEAR, I PAID!", they say "here are my cancelled checks"????  The deputy is going to stop in his tracks and pick up his jaw before calling the attorney handling the foreclosure.

Further, the sheriff's department gets involved after you've been given notice of the lienholder's/owner's intent of removing you from the premises.  When you get that notice, YOU HIRE AN ATTORNEY or file for an injunction/determination as to your payments and/or send them a certified letter back with copies of the cancelled checks.  This will cause them to back up.

Also, as a purchaser at a foreclosure sale, YOU PRICE IN TITLE ISSUES.  In other words, the legal expenses will not be born by the purchaser, but the seller...  Further, this is precisely why there are quiet title actions, to clear title in the event something goes wrong...  it's a safety net to "reset" the chain of title... 

Wed, 10/20/2010 - 19:30 | 665570 RockyRacoon
RockyRacoon's picture

I was the principal broker in my real estate firm and have had to evict many tenants with the Sheriff present.  He had no interest in checks or receipts or any other document.  His orders were to evict -- and he did.

Thu, 10/21/2010 - 09:31 | 666476 MachoMan
MachoMan's picture

The problem with this approach is that, although civil servants following a court order are likely going to be absolved of any liability, that will not stop them from being listed as defendants in a lawsuit for failing to question the evidence presented to them.  In other words, they too must act in a reasonable fashion enforcing the law.  Generally, here anyway, the plaintiff's/bank's attorney is the person in contact with the sheriff/pd.  If something seems fishy to the deputy, then the attorney gets a call and is asked how to proceed.  At that point, it will be the attorney's call.  It is not out of the ordinary for the sheriff to show up and the tenant/homeowner to have already sent a check to the attorney after getting notice to vacate....  once the tenant/homeowner tells the deputy he/she paid the bill, then we get a call to verify if this is correct... 

Whole point being, it does not have to be a rigid and robotic process...  the police are not there to screw people over and do not enjoy kicking people out of homes.  Likewise, lawyers don't want this either. 

Although, I'm confident that the degree of congeniality is directly linked to the "to do" list of the police department...  if they have 30 families to boot out today, probably don't have too much time to listen to excuses.  At least in my experiences anyway, the authorities have been incredibly congenial to both sides, e.g. providing their direct cell numbers to all the parties involved, actually answering their phones in a timely manner, notifying other deputies of the situations if they will not be present at the time of an event, providing signed documentation/narratives, etc.  (of course, even though I practice in a non-judicial state, we do all our foreclosures through the court just as a CYA measure and to ensure everything is straight on the back end).

Mon, 10/18/2010 - 16:13 | 659108 tallystick
tallystick's picture

The banking practices you advocate are about as tasty as the fake beef jerky you sell to kids. Sorry it's tough to maintain the practice of selling shit in a pretty wrapper with the internet around.

Mon, 10/18/2010 - 16:54 | 659207 MachoMan
MachoMan's picture

What the fuck are you talking about?  J6P got his "dream house" in the deal.  This isn't a case where J6P was promised X but received Y.  As a result, J6P owes someone or something for the payments thereon.  Further, the note and mortgage instruments contained assignment clauses, allowing the banks to assign them to whomever and also requiring J6P to pay whoever it is assigned to...  and, if not, then this is a rudimentary function of the law.

The issue is that in order to foreclose, the holder of the note has to prove his position...  simple as that.

I don't advocate any banking practices...  I think, in general, they're deplorable and push a drug upon us whose allure is far greater than our discipline....  and that, in general, the entire industry is but a tool for pillage and plunder by the PTB.  I'm on your side here, I just think a lot of people get carried away about this stuff...  and leap from objectivity at every possible turn.

Mon, 10/18/2010 - 15:21 | 658986 TemporalFlashback
TemporalFlashback's picture

If WFC did not have the note, that would be the same thing as some random person or company demanding your mortgage payment on a monthly basis.

Mon, 10/18/2010 - 15:43 | 659024 NotApplicable
NotApplicable's picture

Because "a bank" is just one of thousands of banks, and without one of them actually holding the note, you have NO IDEA which one you owe.

You can make every single payment to your servicer, but if they do not know who to pay, you are not paying on your mortgage, but instead, providing a free loan to the servicer.

Besides, the bank that initially created the loan has already been paid, settling the debt with them. Just because some entity buys up all of the loans without keeping a title chain it does not give them a claim on the property of any other. The banks engaged in this illegal behavior on purpose, because they made risk-free money while the game lasted. They claimed they had eliminated risk. What they did though, was merely transfer it to the entire system.

Mon, 10/18/2010 - 18:33 | 659333 RECISION
RECISION's picture

" - I don't understand statements like this. How is a bank taking advantage of them by trying to get theM to pay what they owe and agreed to repay?

No, there is quite a lot you don't understand isn't there.

However, let me try and explain for you in simple words.

The Bank is taking advantage because the Bank doesn't own the note. The Bank is wanting them to pay money to it for something it has no ownership right in.

How's that?

Do you understand that?

Now if there is some-one who does own the note and has legal and moral right to claim the  mortgage repayments, then fine, let them stand up and do so (and prove it). 

The issue is that it isn't the clowns/crooks who are currently claiming it.

Mon, 10/18/2010 - 22:31 | 660188 RockyRacoon
RockyRacoon's picture

How is a bank taking advantage of them by trying to get theM to pay what they owe and agreed to repay?

Did you read the article?  If so... well, never mind.

Where are all the people who commented in previous articles about them being deadbeats?  Whassamatta?  Too tight-assed to apologize?

Mon, 10/18/2010 - 14:45 | 658895 Cognitive Dissonance
Cognitive Dissonance's picture

Brian & Ilsa should still demand to see the note.

"Where's the beef" works better if the banker is over 50 years old. Trust me, they'll understand. :>)

"Hey, where's the beef. I don't think there's anybody back there."

Mon, 10/18/2010 - 14:45 | 658900 whatsinaname
whatsinaname's picture

Again as BK posted earlier, the moment these guys sign the mod papers, WF does not need to show them the old note and a new contract is in place. Atleast thats how I see it.

Mon, 10/18/2010 - 13:31 | 658635 tmosley
tmosley's picture

I knew I should have bought that country estate with 40 rooms instead of living within my means!

Instead, I paid off my mortgage with Wells Fargo last year, some 25 years early.  Oh well.  At least I own it now.

Mon, 10/18/2010 - 13:51 | 658696 faustian bargain
faustian bargain's picture

Sortof, except I assume you still have to pay property taxes and get permission from the local jurisdiction to change your property in any significant way.

Mon, 10/18/2010 - 14:25 | 658826 tmosley
tmosley's picture

The property tax in my jurisdiction is probably the lowest in the country.  I only pay a hundred dollars a YEAR in taxes.  Also, I don't need any sort of permission to do anything so long as it is non-commercial and does not impede the county's easements.

We're a low tax, low benefits county in a low tax, low benefits state.  Hard to find a place in the US that is any freer.  The fact that it is close to a large town (200K population) makes it all the more amazing.

Mon, 10/18/2010 - 14:30 | 658850 kathy.chamberli...'s picture

i never knew what a horror HOA's are until 3 years ago. oh my god they are satan and they have worshippers. this place i am renting has $350.00 monthly dues. it is the most sterile environment to suppose to live in. god i loved my messy vitality homestead.

Mon, 10/18/2010 - 14:42 | 658894 Big Corked Boots
Big Corked Boots's picture

I'm curious... what county/state is that? Do they offer allodial title?

Mon, 10/18/2010 - 16:56 | 659272 iconoclast63
iconoclast63's picture

My understanding of allodial title or land patent is that it conveys actual, permanent ownership of the property forever, unlike a deed which is defined as "color of title". This means the property can never be seized under any jurisdiction and is free from taxes and zoning requirements. I think it's even free from eminent domain.

The only state that I have heard that offers it is Nevada, but you must prepay 100 years of property tax to get it.

If anyone has more information I would love to see it.

Mon, 10/18/2010 - 17:31 | 659441 tmosley
tmosley's picture

Lubbock County, Texas.

It also helps that the tax assessors consistently assess property values far below their actual value.  I was actually really surprised at it when I moved out here.  I don't think I would ever move anywhere else.

I'm pretty sure you can't get allodial title in Texas, unless you are a descendent of one of the original land grantees who has managed to hold on to their land this whole time (I think King Ranch is this way).  If I could get allodial title in Nevada, it might be worth moving out there.

Mon, 10/18/2010 - 18:51 | 659684 Big Corked Boots
Big Corked Boots's picture

Somehow I thought it was Texas. Y'all too free for the rest of us Amerikans....

And I did read, somewhere on the Interwebs, that alloidal title was available to Texans provided you were ready to make a lump-sum payment equal to something like 20x the current property tax. I apologize for not being able to provide a link, but I believe it was on a rural-life website thread on

Mon, 10/18/2010 - 14:56 | 658933 faustian bargain
faustian bargain's picture

Yeah, I was thinking of that in the back of my mind when I wrote that...good for you. You must be in Wyoming or somewhere like that.

Mon, 10/18/2010 - 13:57 | 658713 Shakey
Shakey's picture

You think you own it?  Stop paying rent to the State in the form of property taxes and see what happens.  You cannot own real property in America.

Mon, 10/18/2010 - 15:07 | 658953 MachoMan
MachoMan's picture

The banks are going to do this and this is where they'll get into trouble...  maybe the whole securitization bit and fraudclosuregate finish them off first, but someone has to pay those taxes and the state cares not who.

Mon, 10/18/2010 - 13:58 | 658724 1100-TACTICAL-12
1100-TACTICAL-12's picture

AS long as we pay property tax, we are renters....

Mon, 10/18/2010 - 14:05 | 658743 FEDbuster
FEDbuster's picture

You have got that right!  I have a friend in IL who bought his house in 1985, paid it off around 1998.  His current taxes and insurance are now more than the original principle, interest, taxes and insurance payment was in 1985.  Of course adjusted for inflation it may be less, but it's still a bitch when you are paying more each month with your home "paid off".

Mon, 10/18/2010 - 13:31 | 658636 Old School
Old School's picture

Power to the people!

Love your writing style, Gonzalo. Keep it coming!

Mon, 10/18/2010 - 13:54 | 658638 williambanzai7
williambanzai7's picture

This note business is really a chance to grab them, the banks, by the balls and slap them over the head.

Just make sure the mod is irrevocable before you sign a new note. I wouldn't put it past them to try to get a new note signed before anything actually changes.

Mon, 10/18/2010 - 13:32 | 658639 faustian bargain
faustian bargain's picture

Well written.

Mon, 10/18/2010 - 13:32 | 658641 SimpleSimon
SimpleSimon's picture

Help me understand.  If WF has lost the old note, or messed up, and re-financing generates a new note, what happens to the old note?  The bank cannot discharge it if it does not have it.  What if the old note owner shows up later and exerts their rights on the house?  How would it unbreak a broken chain of title?

Mon, 10/18/2010 - 14:15 | 658789 FEDbuster
FEDbuster's picture

Wells Fargo won't have to produce the note to release it.  I think they just have to reference it in the release.  The release will be recorded at the same time the new note is recorded.  Copies of notes and deeds of trust are recorded at the County Clerk's office.  The banksters just cannot produce the original notes with the original signatures.  Plus, due to the repackaging and reselling of the notes a clear chain of title with assignments is not always available (if ever even done properly). 

Most of this will be up to the judge who handles the forclosure.  If you decide to go down this road in court, I would hire the BEST real estate lawyer you can find to handle your case.  They will have to be very smart to beat the bankster's law firms now that this fight is getting real.

Mon, 10/18/2010 - 14:22 | 658814 packman
packman's picture

It's probably the legal equivalent of squatter's rights and abandoned property.  If the previous owner had tenuous rights, and the property is "lost" (e.g. by a broken chain of title), and a new right of ownership is estsablished (the new note) - it is legally stronger than the previous right of ownership, as long as no one actually shows up to claim the previous rights.  In 99.9% of these cases that's true.  There is no "other owner" to contest the new ownership claim.,_mislaid,_and_abandoned_property

(layman's view)

Mon, 10/18/2010 - 15:14 | 658972 MachoMan
MachoMan's picture

WF owns the note.  WF got the note because it paid someone else for it or initially generated it and kept it.  If the former, then the chain was likely broken through unrecorded sales/assignments/etc. 

The chain of title can be recooperated through affidavits...  this is done very often in estate matters when a decedent's predecessors (grandpa) did not have a formal estate upon death, but still had real property...  essentially, the land records say nothing for a generation (father).  Well, generally the laws of intestate descent and distribution take over and whoever was a descendant of grandpa may have a claim to the property.  As a result, if you want to clear up title, you have to go get what is often referred to as an affidavit of heirship, which attests to the children/heirs of grandpa.  Then, you get a quitclaim deed recorded for every heir...  title recooperated.  Generally, this is good enough for title companies/underwriters to issue insurance.

I suspect a similar process for WF.  The trick is to do it BEFORE you file a foreclosure action...  If you file a lawsuit against WF to attempt to clear the title on your property, then they'll get the paperwork in order and get attorney's fees, costs, and the judge will ask why the fuck you aren't paying your note...

Mon, 10/18/2010 - 16:01 | 659067 NotApplicable
NotApplicable's picture

WF owns nothing. It is working on behalf of MERS, which is supposed to allow for the notes to be transferred to the trusts for securitization, but they didn't bother with that part, as it is too slow and expensive. Also, the way the trusts are formed, they cannot go back and add the notes now (there is a 90 day limit). So the trusts don't own them now, and cannot ever in the future.

Hence robo-signing to fabricate the documents they should've done from the beginning.

Honestly, it's enough for me to want to sue my loan originator, who knew all of this reselling was going on.

Mon, 10/18/2010 - 16:15 | 659124 Ned Zeppelin
Ned Zeppelin's picture

That long, expensive process of cleaning up the paperwork is precisely what destroys the value of the MBSs.

Mon, 10/18/2010 - 17:32 | 659417 MachoMan
MachoMan's picture

Ned: Yes, but it's vastly cheaper than the alternative... 

N/A:  Right, WF doesn't own the note, it just has the right to collect your payments from the owners of the note...  (good enough if you got notice).

Here's the thing about the securitization formalities...  virtually any informalities can be cured through an agreement by the parties.  The problem here is that whoever has mbs probably wants to get the hell away from them.  My guess is that a simple agreement between the GSEs/FED + servicer will knock out a ton of the potential impact.  Basically, "we agree to act as though this was done from the start."  Now, whether or not this complies with securities laws in another issue...  but, my guess is that without a party complaining, no prosecution will be done.  Now, if a person is hell bent on getting out of a mbs that wasn't formally originated properly, then maybe you got an issue...  No telling what will be done...  I suspect though that whatever "solution" is presented, it will be one of legislation and not monetary policy/purchase/helicopter drop (we're out of money).

Also, unless you have reason to believe your note payments are going to the wrong party and you're not getting credit, then I'd keep paying them...  I wouldn't sue them, it will just alert them to your particular case/paint a target on you.  I'd wait for them to foreclose if you're going that route.  (hint, be sure not to have any equity in it or they'll foreclose asap).

Mon, 10/18/2010 - 13:32 | 658643 Cheyenne
Cheyenne's picture

Dynamite, GL.

Oh, and we can add another name to the pantheon of truth-telling jurists like Judges Rakoff, Preska, and Boyko, that of Judge George H. Painter:

(Link from Jesse's Cafe.)

Mon, 10/18/2010 - 13:32 | 658644 Edmon Plume
Edmon Plume's picture

Only the government could come up with a scheme that rewards people who are in danger of default, when without being a few months behind, I couldn't walk in and demand a deal like they got.  It just encourages people to stop paying their mortgages so they can qualify for yet another government handout.

When banks are backstopped by taxpayers, the real tragedy is why the government is sticking their nose into it to begin with.  There is no "modification" with payment of some kind - cash or political, take your pick.  HAMP is another welfare program.  That's not cause for joy.

Mon, 10/18/2010 - 13:33 | 658646 carbonmutant
carbonmutant's picture

If the bank can't show the note who does Brian receve the title from when the mortgage is paid?

Mon, 10/18/2010 - 23:50 | 660105 harveywalbinger
harveywalbinger's picture

I'm quite  interested in this myself...  Bought in '99.  Refi'd a few years later.  Paid off last year. 

FWIW when I paid off the crappy little house *that I could afford*... WF did not provide title nor deed, just a notorized lien release IIRC. 

correction:   All I received was a "confirmation of loan payoff" statement.  Was not notorized

Mon, 10/18/2010 - 13:34 | 658647 Captain Willard
Captain Willard's picture

When Congress comes back in session, it will still be owned by the Banks. Congress will ram through Federal mandatory arbitration/modification procedures for all outstanding disputes. The bankers will draft the legislation.

As Oren Ishii says in Kill Bill: "You didn't think it was going to be that easy?"


Mon, 10/18/2010 - 22:48 | 660234 RockyRacoon
RockyRacoon's picture

Old news, dude.   Sides have already been taken on the issue.  You are left standing out in the cold -- nobody wants you on their team.

Mon, 10/18/2010 - 13:34 | 658648 nope-1004
nope-1004's picture

As if a bank with leverage over a customer would be so kind.  Banks are out to screw the gov't and you and I.

Brian and Isla are obviously noble people.

I probably would have made the asshole corrupt bank squirm a little more, perhaps throw them a shit bid as to what the "new" principle amount should be according to my analysis of current market conditions.  But that's just me.... I hate banksters.



Mon, 10/18/2010 - 14:20 | 658808 FEDbuster
FEDbuster's picture

They should go for principle reduction, too.  Why not, they have nothing to lose.  Knock a $100K off the note and give me 2.75% 30yr. fixed, and we will see you at the title company. Let the "lender" pick up all the title and recording fees, too.

Mon, 10/18/2010 - 13:34 | 658649 Burnbright
Burnbright's picture

@ Lira,

You could also inform the couple that the bank never gave them consideration for the mortgage, so the bank can't prove they would suffer a loss if they didn't pay. Banks have no standing if you understand law and how money is created.

Mon, 10/18/2010 - 16:20 | 659133 aerojet
aerojet's picture

I'm aware of the case you are talking about, but I doubt that it is a strong enough precedent to make a strong argument out of.  If it were truly the case that banks creating money out of thin air in order to lend it out, then why hasn't it been aruged over and over again in thousands of other cases contesting a foreclosure or similar action?

Mon, 10/18/2010 - 13:34 | 658650 NoLongerABagHolder
NoLongerABagHolder's picture

The banks got their money from the sheeple already with the bailouts, we're just ready to take it back now.

Mon, 10/18/2010 - 22:00 | 660114 harveywalbinger
harveywalbinger's picture

Wrong.  The banks get their money out of thin air.  It's their labor that is stolen from the sheeple via taxation. 

Mon, 10/18/2010 - 13:35 | 658652 diesel1104
diesel1104's picture

I stopped paying my note 4 months ago.  Sent in paperwork to bank to see about modification, no word back yet.  Here in FL, house appraisal is about 33% lower than mortgage, and I put 15% down originally.  MERS is the mortgagee according to documents I hold, I assume that means title is broken and no one can recover?  Also have HELOC, not sure where that stands

Mon, 10/18/2010 - 14:24 | 658823 FEDbuster
FEDbuster's picture

HELOC will come after you after the first is modified or defaulted on.  Plus, I am pretty sure FL is a recourse state, so the banksters may foreclose, sell the property, then come after you with a deficiency judgement.  I would also look into what the current IRS ruling on this is, because they may be able to crawl up your ass, too.  BK will wipe out the mortgage companies, but IRS is like herpes, they are with you forever.

Mon, 10/18/2010 - 14:49 | 658914 kathy.chamberli...'s picture

colorado too, recourse state. Chase threatened me for years they were going to prosecute me for the most they could get because the fraudster mortgage broker filled in a residential loan application with fraudulent numbers and i never signed it. she also skipped coming to the closing with a final loan application that Chase Home Finance said was mandatory. nope no signed application by me on record. but Chase said i was worth over 2 million dollars and i made $8000. a month. so they were quite sure they would come after me. I finally got to see the one and only application that Chase had on file, nope no kathy chamberlin signed on the last line. plus this fraud mortgage broker checked the box married woman. even the title insurance, title and whatever all said married woman. i know this mortgage broker wrote it as such to get approval. when Chase was threatening me with a deficient they kept wanting to know my husband line of work and bring in his salary to access my worth. she also wrote down a home line of credit i had taken on my NM house as an asset not a liability. actually everything on the loan application was fraud and falsified numbers dreamed up by this dumb ass mortgage broker. but Chase just ignored me and never addressed any of the evidence and proof from documentation i had kept, that she committed identity theft or credit score application theft. someone needs to tell me the proper name of what this mortgage broker woman did to my life to ruin it. she single handed wrote in numbers that she knew Chase would accept probably robo style. not one single line on this loan application was correct, she didn't even use my legal name that i gave her. of course she is out of business and being sued a lot. still i got nothing and no more 820 fico score. that is how she pulled it off, she called me golden. i had the high fico, $100,000. down payment and lots and lots of stock in a wealth management firm. that is the only way i got approval cause i don't have a job always just rental income.

Mon, 10/18/2010 - 13:37 | 658656 No Mas
No Mas's picture

“If you play your cards right,” I told Brian and Ilsa over the phone, “you could get your house for free.”

Interesting statement, but I doubt we will see anyone getting a house for free because the bank cannot produce the note.  If it happens, go ahead and write the story.  I won't hold my breath while I wait.

Mon, 10/18/2010 - 14:28 | 658841 Augustus
Augustus's picture

What could become the real problem is that the bank hs so screwed up the mortgage / note chain that no one can be established as the "legal" lender and that no one can be estblished as having the capability of releasing the mortgage or note.

Possibly, in that case, the old saying that possession is 9/10ths of the law will be applied.  Certainly there is not a question that brian and Ilsa were deeded the property.  Clearing up the incumberances might not matter much unless they have a need to sell it.

Mon, 10/18/2010 - 13:38 | 658659 jal
jal's picture


A very simple explanation.


If I borrowed $400,000 from a bankster.

The bankster borrowed the $400,000 from 40 people.

The bankster made the claim, to the 40 people, that their loans would be secured by the ability to seize an asset that is worth much more than what they are lending. He tells them that he has the ability to seize that asset. (A lien that is recorded at the land and title office), and that he will transfer that ability to seize that asset to those 40 people.


The bankster lied. He did not transfer the lien. In some cases he did not even have a lien.


The bankster lied by saying that he verified that I was a capable regular, standard, as expected risk of being able to pay back a loan of that size.


Therefore, The lenders do not have a secured loan. They cannot seize that asset. 

They must go to court, (bankruptcy), to get some of their money back.


The lenders must also go to court to try to get their money back, from the bankster, by proving that the bankster lied.




Mon, 10/18/2010 - 14:05 | 658741 Bartanist
Bartanist's picture

I think it goes beyond that. The entire securitization process was seemingly flawed because the banks did not have title to what they were selling.

So, first we found out that they were repackagin BB rated mortgages as AAA and they got away with it without admitting any admission of guilt. Now we find out that they were selling something that they did not actually own.

My guess is that any buyers of the MBSs have a very good case to get their money back.

Unfortunately, most likely the bankers will have their bought and paid for politicians change the laws to legalize their fraud... and the Fed will try to buy the liability of the fraud and make it disappear... But, there should be bank executives serving hard time and we have not seen that due to the complete breakdown of the rule of law.

Mon, 10/18/2010 - 16:29 | 659158 tallystick
tallystick's picture

The MBS prospectus my mortgage originator used clearly states that the notes were used as collateral for a loan to the mortgage originator to issue it's own debt in the form of a MBS.  I assume this was used for tax avoidance in some way. In this case the MBS is merely a derivitave of the notes, and the MBS investors never bought anything except a security that would track the performance of the pool of mortgages.  Incidentally this mortgage  originator went bankrupt in 2007.

Mon, 10/18/2010 - 13:40 | 658665 rumblefish
rumblefish's picture

Good for your friends. Good to see people Acknowledge what they owe something rather than try to get out of it.

Question: I live in Arizona. Here, the deed of trust is filed with county recorder. So potentially, if wells Fargo lost all my paper work, there is still the deed of trust on file with the county. Would this not suffice to be a claim on the collateralized property.

Is this different from how RE transactions are done in the rest of the country?

Mon, 10/18/2010 - 14:11 | 658769 PlausibleDenial
PlausibleDenial's picture

As already posted, ask for your "original wet ink signature promissory note". If MERS is mentioned in your deed of trust (usually as nominee) then they will most likely not have "proof of ownership" thus no "standing" to do anything.

Mon, 10/18/2010 - 14:12 | 658773 Dr. Richard Head
Dr. Richard Head's picture

That is exactly where the chain of title NEEDS to be filed in order to prove claim.  I talked to the county recorder and asked for a copy of all items related to my mortgage on file with the county.  She emailed it to me for no charge.  Not ONE third-party assignment was recorded with the county for my mortgage.  I'm in Ohio and Ohio Revised Code requires that all third-party assignments HAVE to be recorded with the county.  Our local sherrif is signing off on foreclosures where the bank doesn't have standing according to the county records, let alone their own records.

Mon, 10/18/2010 - 16:11 | 659104 PlausibleDenial
PlausibleDenial's picture

Tomorrow I am sending a certified letter to my friend's servicer as well as meeting with a real estate attorney.  I have also read that if a servicer cannot provide proof of ownership that you can ask for all monies paid to said servicer as they had no "standing" to receive your payments. 

I don't have any debts, make a tidy sum for living, and, now will spend my time fucking with the banks as they have fucked the US for years.  Moreover, I find it interesting that some on this site offer a morality issue supporting paying one's current mortgage while at the same time bash the same banks that are responsible for the manipulation of our markets.

Mon, 10/18/2010 - 22:55 | 660249 RockyRacoon
RockyRacoon's picture

You should start a blog and document your journey!  I'd read it.

Mon, 10/18/2010 - 13:41 | 658667 CitizenWest
CitizenWest's picture

I'll be praying for your safety, Mr. Lira.  Take good care of yourself.  You do us all a great service!

Mon, 10/18/2010 - 13:43 | 658672 ebworthen
ebworthen's picture

We can only hope.

More than likely getting them to sign off on a new agreement that WF will scan in triplicate and sign in blood and then come up with another arcane legal sleight-of-hand to scale payments back up or steal their home.

I have to agree with Captain Willard above that no matter the election results the Banks and other Financial Giant Evil Squids who own CONgress will make sure they get what they want - and another bailout via the taxpayer.

Mon, 10/18/2010 - 13:47 | 658684 Milestones
Milestones's picture

The people of this country have been presented with a very straight forward way to !) Serevely damage if not kill off this reptile that has seized us by the throat and: 2) Collapse the whole crooked banking system worldwide. If the U.S. goes, so will the entire world banking order.

Simple reclaim our Due Process rights and force the legal system (Judicial system was lost 50 years ago) to obey what is left of our Constitution and if necessary, enforce it with brute force, which would mean severe depopulation of D.C. and certain parts of N.Y.C.

By shear blind luck, we have been presented with the sword that Alexander so fatefully used when faced with the Gordeon Knot. But we must use it--Now. This chance will not be available again. Do it America-do not lose sight of the prize!! Milestones

Mon, 10/18/2010 - 13:48 | 658686 centerline
centerline's picture

I wish they had pushed it further.  But, they did what most, honest, typical middle class people do.  They played nice.  I had a similar situation about 15 years ago or so.  The bank failed to fill out the conversion rate for a mortgage (from variable to fixed) plus points.  When I went to convert, I pointed out the omission to the bank exec.  He simple said "what do want?" in a voice that indicated he was over a barrel.  Similar to the above couple, I did not go for the jugular.  I simply requested (and was given) the best competitive fixed rate at the time without the added points.  I was happy and I am sure the bank was happy.


This time around things are different though.  This is quickly becoming a "us or them" situation.  On our current course, the middle class is going to be wiped out in short order.  It is time to go for the jugular.   And it is not our fault it has been reduced to this level.  No mercy folks.  No mercy.  On the flipside, mercy would not be offered to you.

Mon, 10/18/2010 - 13:56 | 658708 diesel1104
diesel1104's picture

+1.  This is a simple contract issue.  Banks broke the contract.  Problem is, it wasn't an accident, it apparently was pre-planned fraud in order to avoid the recording fees due at the county level each time the property changed hands.  Not only should the bond buyers be asking the banks for their money back, but county clerks should be asking for all of the recording fees for every transaction.  This wasn't an "oops", it was fraud.

Mon, 10/18/2010 - 16:56 | 659264 WhiskeyTangoFoxtrot
WhiskeyTangoFoxtrot's picture

+ 1000. I've seen lots of talk on ZH (and in other places) of a "new rebellion" against this unjust system that was built on the backs of average everyday schleps. Well, guess what people - we may not need to storm DC or Wall Street with force. Let's use the means that are available. This is the achilles heel. Now is the time to strike. 

And like others have stated, this is no place for any morality arguments. That shit went out the window a long time ago. Eye for an eye, motherfuckers.

Mon, 10/18/2010 - 17:29 | 659423 RECISION
RECISION's picture

It is time to go for the jugular.  No mercy folks.  No mercy.  

On the flipside, mercy would not be offered to you.


Mon, 10/18/2010 - 13:51 | 658697 shushup
shushup's picture

Great for Brian and Ilsa but what about the rest of us schmucks whose notes and chain of title can be produced - we just get screwed by the banks.

Mon, 10/18/2010 - 14:27 | 658836 packman
packman's picture

Great for Brian and Ilsa but what about the rest of us schmucks whose notes and chain of title can be produced - we just get screwed by the banks.

Yes that's a bit of a pickle, eh?  Brian and Ilsa can "screw over the bank" - but in doing so they also screw over everyone else who hasn't had this gift given to them on a silver platter; the ones who (unlike the banks) will ultimately have to pay for these mistakes.

That's why I'm not rooting for them to just stop paying.  It ain't the bank they'd be screwing over - it'd be you and me.


Mon, 10/18/2010 - 14:50 | 658921 Big Corked Boots
Big Corked Boots's picture


My fault for selecting a well run, carefully-screening bank to write my note. I suppose I should just bend over.

Mon, 10/18/2010 - 13:53 | 658702 tahoebumsmith
tahoebumsmith's picture

Sounds to me like we got some WF shill amoung us. The private phone call from an executive only means one thing...They read the original story and were just waiting for their chance to snuff out the fire. Congrats to Zero Hedge for bringing this situation to light for these nice people.

Mon, 10/18/2010 - 13:55 | 658704 buzzsaw99
buzzsaw99's picture

You cannot have a viable society where the backbone of the country thinks that following the rules and the law is for suckers and chumps...


I want a fucking 2.75% mortgage too bitchez! Fuck them. Die brian and ilsa! 

Mon, 10/18/2010 - 14:12 | 658777 Horatio Beanblower
Horatio Beanblower's picture

"Better to remain silent and be thought a fool, than to open your mouth and remove all doubt" - Solomon

Mon, 10/18/2010 - 14:13 | 658782 buzzsaw99
buzzsaw99's picture

nice quote

bite my scrote

Mon, 10/18/2010 - 14:24 | 658809 Horatio Beanblower
Horatio Beanblower's picture

...I'll get my coat.

Mon, 10/18/2010 - 14:36 | 658870 ozziindaus
ozziindaus's picture

Watch out for curley caught in you throat

Mon, 10/18/2010 - 15:04 | 658946 Bam_Man
Bam_Man's picture

Thought that one was from GB Shaw.

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