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Janet Tavakoli On Next Steps In The Foreclosure Scandal
The inception of the mortgage fraud crisis has been extensively documented by pretty much all media outlets now. The question that everyone is grappling with is what happens next. Janet Tavakoli writes in with some suggestions, more at the thought experiment level, as to what the next steps in fraudclosure/fauxclosure may be.
From Janet Tavakoli
Obviously banks that kept their own sound mortgage originations or always properly handle the paperwork won’t have any problem. For the rest, courts will enforce the law, which means there must be full recording of note transfers (the deed of trust and the promissory note). Again, there won’t be a problem with many mortgages if the paperwork was properly transferred. But I believe there was a NJ judge who found more than 40% of the foreclosure docs weren’t in order, but he didn’t keep track of how many were later successful after having obtained the necessary docs.
[Obviously, banks made their self-inflicted plight worse by 1) forging docs or presenting fraudulent docs and 2) aggressively trying to seize property.]
Regarding securitizations - the problem with this multi-faceted fraud is that securitization “professionals” got so sloppy with the necessary documentation that perfecting the security interest in the collateral was among the many things not done properly, but it is unclear how many mortgages are affected. There is so little transparency, that I cannot say, and if anyone else is saying they know, I’d like to know how they arrived at their conclusions. Ironically, the banks that enabled fraud-riddled mortgage lenders are the ones having the most problems with the documentation, and that is no surprise.
What happens next?
Really, it’s a mess, and no one is exactly sure. I believe it is likely the following will happen. First, if a “lender” tries to foreclose, it will have to have the proper signed paperwork showing it has the right to foreclose. If the note transfer wasn’t recorded, the bank can’t foreclose. But this is the most fundamental part of banking, so it is entirely the banks’ fault. We know how much they love “sanctity of contracts” when it comes to bonus agreements, so the same applies here.
But it doesn’t mean the borrower doesn’t owe money. Obviously there will be records of payment and loan statements and evidence of delinquency. It will be difficult for the borrower to deny the existence of the debt and the obligation to pay. [If it is in doubt to whom the money is owed, then courts might put future payments in escrow, but it seems likely that it will be easier to establish debt/payment than foreclosure rights. Really, I don’t know, but to say the loan will be unenforceable when one can prove payments were made, doesn’t seem like it will fly in the courts.] But absent proper paperwork, a bank cannot take a house in satisfaction of the debt, so the bank will be an unsecured creditor. Once this is established as the case, if the borrower has the wherewithal to pay on say, a reduced principal balance and a lower fixed coupon, then the borrower will be in an excellent position to renegotiate the terms of the loan by offering to sign a properly documented mortgage. This may succeed where HAMP failed. I’m not saying it will be easy to sort this out, only that this has potential.
In some cases, the borrower is a hopeless case, now unemployed, broke, and drowning in credit card debt and other debts. Yet, a bank cannot seize the house, and the borrower still owes the money. In that case, it might be a good idea to negotiate a deal with the bank. Take the house, but erase all credit blemishes, and if the loan balance exceeds the recovery on the house, then the bank has to eat the loss with no blemish on the borrower.
Obviously, I don’t have the answer to the problem, and nothing suggested so far to courts (by the banks) is as reasonable as the above, but we’ll have to see what develops. In any case, states will insist that everyone follow the law.
This fits with the expectations summarized by Adam Levitin during Citi's recent call with clients on the same issue, which we posted on previously. On the other hand, as even as benign outcome will likely mire the legal system for years in sundry legal cases, and result in a major impairment to the banks, we would not be surprised if the administration does nonetheless opt for a shotgun approach seeking wholesale settlements, which Levitin summarized as the possibility of “some payment” being exacted from the lenders and servicers, followed up by the Administration bargaining for more mortgage principal write downs, which will force a broad-based reduction in wholesale private sector debt. Whether that approach has any success of passing is likely mostly correlated to the president's approval rating. Unfortunately, per the latest Reuters/Ipsos, Obama's disapproval rating is currently at 53%, the highest since he took office, and that 63% of Americans say country on wrong track, highest since Obama took office. So, alas, a shotgun solution is certainly not looking good.
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"Again, there won’t be a problem with many mortgages if the paperwork was properly transferred."
More incorrect or false information. Sorry lady the note lies in the REMIC WITHOUT recourse, typically.
The original Deed of Trust document was endorsed by the obligor in blank, which then sits about until such time as the current claimant, more than likely operating as the loan servicer claims rights of assignment. Meanwhile unbeknownst to most obligors, there over in the REMIC, known as the loan trust, sits the Mortgage without recourse to the Registered Certificate Holders.
The monthly contribution by the obligors are passed through the loan servicer to be deposited, minus the servicing fee (generally two percent) as a net deposit into what most know as the “loan trust”.
How may the Trustee, or its nominee the Substitute of Trustee move a non judicial foreclosure sale when the loan servicer has no standing?
"Obviously, I don’t have the answer to the problem"
No lady, it is obvious you don't have a clue.
whoa ..you really something..
frankly dont have a clue what half of words even mean,,
thanks god for lawers
alx
Don't listen to her. She appears to be putting up smoke screens.
In a federal bankruptcy setting the goal is simple, defeat the loan servicer’s standing to perfect a proof of claim, and/or the lift of the automatic stay.
Secured creditor becomes unsecured creditor, homeowner gets house, all the bloodsucking ticks die off.
Janet Tavakoli, how may the loan servicer move a proof of claim or a motion to lift the automatic stay, when the promissory notes sits elsewhere, beyond said servicer’s statutory reach, in a separate legalistic formed entity, statutorily defined as the Real Estate Mortgage Investment Conduit without recourse?Robo-signer is a smoke screen.
MERS is a smoke screen.
"Yet, a bank cannot seize the house, and the borrower still owes the money."
There is no borrower Janet. There is an obligation that the holder in due course can enforce. Correct, the loan servicer can't foreclose because they lack "standing". Homeowner can either just stop making payment and wait for the statutue of limitations to expire and go on with their life or if they must sustain the lack of "standing" of the bloodsucking debt collector in court.
There are no loans originated by a “lender”. There is “money creation” hidden under the color of an obligation imposed within the Financial Service Agreement, moving as the Mortgage that empowers the amortization of that which it has no standing in law. An obligation is not a loan, it is a thirty-day payment schedule amortized over a time period, such as five years, ten years, and/or thirty years.
you do not deserve the junking
Mako gets junked because he used to just come on an holler about the equation being the end of everything and not going any further..a lot. He definitely doesn't deserve it anymore, he's bringing A-game to this fight.
A homebuyer, by signing the mortgage note, is in fact issuing a land backed debt and the deed of trust is the collateral backing, and the mortage note is the debt. The bank doesn't extend any credit to the homebuyer in this process. The homebuyer is allowed to issue his own credit at a rate determined by his credit score and market rates. The aforementioned debt and collateral are then ledgered as a debit and credit on the banks balance sheet. The homeseller is then paid with the newly created debt(money) from the debit created by the homebuyer's issued debt (mortgage note). The bank can then keep the Deed of Trust (collateral) in it's portfolio (subject to capital requirements) or sell the Deed of Trust and it's associated mortgage note to another party.
Banks still call this lending even though the bank doesn't transfer any of it's own capital. I think more accurately, the bank assists in the creation of the new credit=debt=money expansion into the system. The bank does not lend it's own capital to fund these mortgage originations.
The MBS holders and the homeowners are both being defrauded by the banks.
I don't know why you are getting junked, this is correct (barring unknown details).
It's hard for one to accept the Truth at times. Basically, most people believe what they are taught or told, instead of learning for themselves. Everyone knows everything because their lawyer told them... like Karl.
No one wants to admit they were fooled, and were dumb and stupid.
I put on CNBC a little while ago, their so called Real Estate and banking expert doesn't know dick. Funny stuff. She just thinks anyone can has "standing" to enforce a contract on anyone else. I am sure this Janet lady is nice and all but she don't know what the hell she is talking about.
If what you said is all true, then I can understand why banks control the lending standards so tight now. Sounds to me like due to some paper work mess, the MOST irresponsible house buyers/flippers, who have not paid their mortgage for at least 6 months (in BoA case, around 18 months), can acutally stand tall and claim they were the victims.
LOL. Talk about moral hazard. Banks are NOT the only one guilty here!! Many irresponsible house buyers who default on their houses are just as guilty as bank crooks. They are ALL CROOKS! And they are ALL stealing from other tax payers!
All that may be true, Mako. But with a court order the Sheriff will move your raggedy ass out of a house right into the street. That's where the battles lay. All the legal crap means nothing when the locks are being changed.
Yesteray, Bloomberg had a lady on, she broke the lock and took her 9-kid family back to her foreclosured house, and she spoke like a hero, and as if she were a big victim. What a joke! She is just as bad as those Wall street crooks, only much poorer!
how many waco's do you think?
Do you mean Waco, as in Waco Texas, or Wacko??
yeah as in waco, ruby ridge, come into my house and get face full of lead, it's in the courts now....but....legal will get thrown out the window and perception is all that will matter soon m'thinks.
Rocky, how many law enforcement do you think have scaMERS on their assignment docs? You think they are going to be enforcing shit on behalf of the banks once they realize their Deeds of Trusts are lost and assignment docs fraudulantly filed on their own homes?
Good luck with that......
I said that the officers were not enforcing the removal of the family.
Probably for the reasons you cite.
Mako, thanks your input. Your posts are very helpful in increasing my understanding. While ZH is not formatted as a classroom, it serves me well.
I agree with you on Mako's comments. My only quibble would be that his theory does not work well in real life. On the streets nobody cares about esoteric law and economic theory. It's about family, home, food, and safety. The law tends to diminish at the barrel of a gun.
I think you and KD are on the same page for the mechanism of the fraud in the securitization process, at least post mortgage origination.
+1
Those who junked Mako, has to explain why he is wrong otherwise everybody will think you have an agenda, you are on the bankers side.
We don't, we don't, and we aren't.
The reason he's getting junked should be obvious: He's trying to interject well-reasoned, informed arguments based on fact to a group of subadolescents who operate principally on emotion.
On many occasions I've tried to point out the utter fallacy of the nonsensical arguments put forth by the charlatans at GATA, citing clear and indisputable evidence that their assertions are factually inaccurate and easily disproven. That sort of logical, informed, and polite discourse is not tolerated by this community, and my posts have been junked and then deleted within hours.
If I could just learn to end every sentence with "bitchez!" perhaps my views would be taken seriously here...
Mako, what’s your take on this…
Guy is down 6+ payments with Ally. Had the loan for 5 years. Decides, screw Ally – brings his property taxes current and files a motion to “Quiet Title”. Invoking “adverse possession” (only 5 years in California).
This should be a slam dunk, no?
I am not going to give specific legal advice and I don't take on these obligations but...if it were me...
I would probably just wait for the statute of limitations to expire and stash my cash. Generally the statute of limitations is six years from the last payment debt on a consumer credit obligation. In many States, such as California, and Texas the tolling period is four years.
Once the statute of limitations tolls, remedy to clear the title may be moved under a Quiet Title action which requires notice to all, even though the statute tolled, who may consider themselves to be the holder in due course.
Of course, elimination of the simple fee(ie property tax) is also possible but that is another story. :)
Hope that helps, you appear to be somewhat on the right tracking thinking wise.
Thanks Mako.
If the debt collector claiming to be an Attorney at Law starts a legal process and the county court are a bunch of retards, you might consider a BK action to slow the process down or even have a federal question as to the status of the DEBT Collector. Any immediate foreclosure action should be handled promptly.
Many lemmings are figuring this out if they are not getting cooperation at the county level and you might be able to see from BK filings how they removing the debt collectors from the process.
I’m with you on the federal question approach. California being a non-judicial foreclosure State and with established case law killing the “Real Party in Interest” argument just about requires a BK filing to invoke “Real Party in Interest” under Federal Rule 17(a).
"In a federal bankruptcy setting the goal is simple, defeat the loan servicer’s standing to perfect a proof of claim, and/Ior the lift of the automatic stay."
I'm under the impression that foreclosures are covered under State laws, not Federal. And that we're talking about foreclosures here, as far as the Title goes. Perhaps that's incorrect, or I'm misunderstanding your point?
Instant stay of foreclosure once you file for BK. The debt collector also known as an Attorney at Law will most probably ask to lift the stay on the foreclosure, it is the responsiblity of the homeowner to sustain that Debt collector has no "standing". Alleged secured creditor goes to unsecured creditor status.
http://openjurist.org/443/f3d/373/wilson-v-draper-and-goldberg-pllc
An attorney at law that regularly collects a debt is a debt collector and is subject to FDCPA.
Federal Law may only determine if a right to property exists, where as state law determines absolute rights to property. Hope that helps.
Gotcha. Thanks for the clarification.
[Edit]: And fascinating stuff, btw. Thanks.
I am certain with the commentary that I read you are familiar with the UCC, the Supreme Law of United States Inc. (28 USC 3002 15(a))
From what I see as the first course of action is from UCC 3-501(b)2 (i, ii, and iii):
Upon demand of the person to whom presentment is made, the person making presemtment must (i) exihibit the instrument [promissory note] (ii) give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so, and (iii) sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.
This provision would allow for a person to demand the original ink signed promissory note be produced and a payment be recorded, or in the event of ANY, I REPEAT ANY, negotiation for re-financing the previous instrument be surrendered. In the event that this is the case, and it more than likely will almost always be the case, until the original ink signed note is produced no one can come forward with a claim and reach proper standing.
This would be followed with an immediate QUITE TITLE ACTION that would remove all previous liens from the property and leave the title free and clear.
What do you think? Any ideas?
Thank you.
Sorry bud, but the UCC applies to "transactions in goods." UCC § 2-102. A "good" is defined as "
all things . . . which are movable at the time of identification to the contract for sale . . . ." UCC § 2-105.
Property belongs to the Restatements of the Law: The third series of Restatements was started in 1987. The Restatement Third now includes volumes ... Property (Mortgages, Servitudes, Wills and Other Donative Transfers)
I'm not a lawyer (I'm a probabilist/statistician), but my father was. Picked up a few acorns along the way.
Whatever she may have got right or wrong about American RE law, it seems unlikely that Janet Tavakoli has chosen this moment to start covering for the banks ...
Easy,
Mako is right, insightful, principled and a jerk.
If you don't want to be called stupid, don't do or think stupid things.
I hate calling people stupid, but that is really what they are in many cases. They can either wake up and learn, or remain sleeping and stupid. Being nice to someone that is trying to convince me a lie is a waste of time, and yes the person is stupid.
Either take what I have to say and "walk through the door" that I show, or remain outside continue to believe that I want the world full of stupid people. I don't, but being nice to a stupid person really doesn't help much.
Danggggg....!
You can call me stupid... As long as you explain what I don't know :).
I think you are alluding above to what I am asking below, but if you can again in plain english it would be appreciated.
The Traning text below is posted on the MERS site under Forclosure. (there's also an interesting legal precedent document for why MERS has standing to forclose. It appears the RE lawyers have been fighting them for some time). From what this says to me MERS is aware they need to be the holder of note & mortgagee before filing .
My question is if MERS is the mortgagee, who's the holder of the note that can endorse the note to them after the sale of the mortgage occurs? Hasn't the note been sold by the originator? So who can endorse it? I assume it's like a check, I endorse to you... If the trusts don't even know they don't have the notes? Are they being asked to endorse? Probably not. So who has the note and the right to endorse it before forclosure starts and they robo signing begins?
Motions for Relief for Stay and Proofs of Claim can be filed by Mortgage Electronic Registration Systems, Inc. (MERS). Each MERS member, through its duly appointed MERS officer(s), is responsible to ensure that outside counsel that files pleadings on behalf of MERS properly describes MERS and attaches all necessary proof to show MERS has standing at the time the pleading is filed. This means that if MERS is the movant on a motion for relief from stay, in addition to being the mortgagee, MERS will need to be the note-holder for a particular loan transaction prior to filing a motion from relief from stay. Endorsing a promissory note in blank and delivering it to a duly appointed MERS officer is sufficient to make MERS the note-holder entitled to enforce the note. A copy of the note with the blank endorsement needs to be attached to the motion as an exhibit. Also, any transfers of the note must be disclosed in the motion for relief from stay. If the MERS member decides not to make MERS the note-holder, then MERS will not file the motion for relief from stay in MERS’ name. As assignment of the mortgage lien from MERS to the applicable note-holder must then be executed and recorded in the applicable land records. When MERS files proofs of claim, MERS does so as the mortgagee of record pursuant to either a recorded MOM (MERS as Original Mortgagee) mortgage or an assignment. MERS holds an
"in rem" mortgage interest in the property on behalf of the note-owner. Under the United States Bankruptcy Code, such an interest constitutes a claim in bankruptcy, and as such, MERS qualifies as a creditor for purposes of filing a Proof of Claim. A proof of claim filed in MERS’ name is based upon the mortgage lien. Therefore, the claim is considered a secured claim. If the proof of claim is seeking more than the right to enforce the mortgage, and is also seeking to collect against the borrower personally, in what is known as an "in personam"
claim, then the lender will need to be added to the claim for full disclosure. Each member’s duly appointed MERS officer(s) that is designated by the member to be responsible to oversee and supervise the compliance of MERS filings shall conduct an audit on all active bankruptcy cases by reviewing all Proofs of Claims and Motions for Relief from Stay to be sure that the above guidelines are being met. If a duly appointed MERS officer fails to make sure that the above guidelines are followed by the MERS member and retained outside counsel, MERS will revoke that officer’s authority and MERS will no longer file motions for relief from stay or proofs of claim for mortgage loans serviced or owned by the applicable MERS member. If you have any
After rereading Mako's posts for the 3rd time. I think what you are saying, to answer my own question, is that the MERS member (the servicer) has no right/standing to foreclose as the REMIC is supposed to have the note. But what then happens , as Karl D., is saying the note never made it into the REMIC?
If that's the case, then maybe the Servicer has the note, because they screwed the REMIC, and kept the note to themselves. So they can endorse it back to MERS and they go ahead with the foreclosure.
So the homeowner has no chance? Not sure what the status of the REMIC is, but if they foreclose and keep paying nobody is the wiser.
= cluster fcuk
word
Stop junking Mako!
~Misstrial
I tend to agree-- this person has no clue.
I have experience in California (US) Bankruptcy Courts with the issue of standing for loan servicers trying to get relief from stay to enforce home mortgage obligations. This in a non-judicial context so it's a bit different than the judicial states but the concepts are the same.
First, we objected to motion for relief from stay on the grounds that the servicer was not in possession of the note nor were they the holder in due course. An Orange County BK judge had ruled all services must provide proof of the note. My judge told me I was way off base and about threw me out of court when I tried to argue the point. The judge just did not want to open that can of worms and was happy with Servicers making the motion for relief from stay without the note.
Second, we told many of the foreclosure mill law firms that to avoid an objection for relief from stay that they needed to produce the notes. THEY WERE ABLE TO PRODUCE THEM ALL! ORIGNAL SIGNED AND STAMPED COPIES WITH ENDOSREMENTS! I believed they were original and genuine as well. This shocked me because I assumed they were all lost in the sudden collapse of the originators back in 2007.
Third, I'm not sure why nobody talks about this, but foreclosed homeowners have LIMITED RECOURSE where Servicers proceeded without the note. For foreclosures which occured in the past, the time homeowners could challenge the foreclosure was before the sale. They should have had plenty of notice of default and notice of sale. Their remedy then would be an temporary stay of the foreclosure and an action to quiet title where they would go to court and say, I don't owe money to BofA, I owe it to Mega bank. Here is a copy of my mortgage. BofA would then have to prove they had standing to proceed with the non-judicial foreclosure by producing the note and their authority to prosecute it (Power of attorney or assignment). But when homeowners ignore the process and allow the foreclosure to proceed to sale, their remedies become limited. They cannot reverse the sale or go after the property, they can only proceed against the party that wrongfully ordered the sale (BofA in this example). But what are they going to prove and how were they harmed? I can see a class action against the Servicers, but for what damages? The borrowers didn't pay their loans and someone had the right to foreclose their property. How have they been harmed?
Fourth, going forward I see Servicers obtaining the note and proper assignment prior to ordering a sale to commence. This is doable (see my Second point above) but will add time and costs to the process.
Fifth, as to judicial states, I think these concepts will apply as well. In the case of a foreclosed home, what remedy does the homeowner have against the new owner? I think none. Their chance was when the case came to trail. They most likely defaulted. Maybe they can argue against the service or process and get the default set aside. Then they would have to argue that the Servicer had no standing. Again, I think the Servicer can find the note, get proper assignment and prove up the default. So how was the borrower harmed and what is his remedy against the new owner or the property? I don't there is one.
Finally, if a new homeowner finds their title clouded do to the foreclosure process, their remedy is an action to quiet title. They find and serve the previous homeowner and probably take a default judgement (who is going to fight that? With what money?) and they are done. If they have to fight, what is the foreclosed homeowner's case where they allowed a default judgment against them? I think none.
My conclusion: Much more smoke than fire here. Not a huge headache for current homeowners who bought foreclosed homes and a little more work for the servicers going forward. They simply will have to produce the note WHICH THEY HAVE PROVEN THEY CAN DO!.
I do see some regulatory fines, some added process costs and some attorneys getting disbarred, but not the armageddon many have proposed.
Good synopsis, Dallas.
For the rest, courts will enforce the law, which means there must be full recording of note transfers (the deed of trust and the promissory note).
Sorry lady, the promissory notes do NOT get recorded at the county. I stopped reading at that point.
It's time for the banks to re-learn what moral hazard means.
.. or "risk" for that matter.
Even more, the banks and their overpaid CEOs need to shut up about "sanctity of contracts" as it concerns their pay.
I continue to suspect that the previously discussed "October Surprise" global FNM/FRE refinance was a thought experiment on how to fix this mess. A waiver from the borrower for prior claims, a new mortgage, etc.
But where does that leave the MBS "empty box" trusts? How do you arrange payments between the IB's and the MBS's?
Trouble with any 'global' solution is that it will raise the issue out loud ("where's the note?") and ppl will likely realize that a refinance would be giving up their lottery ticket to 2-3 years of free rent. Also, it would raise howls from the taxpayers who don't have a mortgage.
I've heard the "systematic" thrown out by Liesman on CNBC today. Slowly, the MSM is getting the picture.
FUBAR.
Obama said we wouldn't have to pay mortgages anymore.
The beauty of this whole thing is that the banks, in trying to screw the people, put the gun to their own head and pulled the trigger. Gotta love genius in action! Milestones
Call 1-800-4closure to see if you qualify for a settlement :-)
The first law firm to sign up the Sham-wow guy is going to make a killing.
Is he the same guy who does Slap Chop?
no the other one that slaps hookers I think
http://www.youtube.com/watch?v=UWRyj5cHIQA
A delicious remix
Oddly enough, that's been on my Ipod for a long time.
lawyers will find a way to get contingency deals and then they will be the new lenders, without MERS.
SRS (inverse housing ETF) should be screaming higher on all this Mortgage-Gate news. But no, it's down 24% over the past 3 months. Silly me. I bought it 6 months ago. Shame I didn't know about POMO at the time.
Everywhere you look there's fraud and lawlessness.
Amazing save Timmy and Ben! Looks like the U.S. avoided socialism by capitulating to fascism.
The real estate leveraged shorts will not pay off until the banks and CDO machines actually write down the diminished/vanishing value of their loans. So, it doesn't matter how many tent cities you see on disaster blogs. It doesn't matter how many houses they build or bull-doze, what the National Realtors Liars Club says or how many people got screwed out of or into their foreclosed houses and loans. Our bleeding real estate shorts won't ever pay off until someone with some balls makes them do the accounting and take the fucking losses. Don't hold your breath.
So true. It appears you took the red pill before I did.
Hmmm...unsecured creditors.... Does anyone really, credibly believe the banks (such as JPM as recently reported) have set aside enough to cover the write-downs, didn't think so. But please bankers, go ahead and pay yourselves billions in bonuses for jobs well done. Frickin' thieves.
"liar loans." ZH'es finest hour this one. Mako we don't need to understand you. You need to understand "there are no State AG's on this site" though they are listening and at least as far as Ohio is concerned "looking for some action in these here parts." LOVE IT. More to the point "the banks have INCLUDING GOLDMAN have already announced voluntarily a halt." Dis be goobermint business so "go ahead and lawyer up all you want" cuz they got DIA, CIA, FBI, AIG, DOD, DEA....
Idiot.
DIA, DOD, CIA - This foreclosure mess is not their deal.
~Misstrial
Whoa. This is where life gets real interesting. *lol*
I miss Tanta
Roger that.
Same!
~Misstrial
From Bloomberg...
In December, an employee at Ally’s GMAC Mortgage unit said his team of 13 people signed about 10,000 documents a month without verifying their accuracy, according to a deposition taken in a foreclosure case filed in West Palm Beach.
Burn baby...
They never say how many months.
The haircuts have to come directly from the underwater home owners and from the banks, otherwise it's time to go European - savers and taxpayers should NOT bail out the underwater and banks.
Very easy to fix this problem, keep the government out, and let the banks and home owners take the hit. No one will get in the way of that perfectly fair solution.
Anyone seen the ES today?
All you need to know about market sentiment.
There are so many players with conflicting interests: home buyers, servicers, senior vs. lower tranch holders, trusts, securitizers, originators, title insurers, MERS, the IRS, and so on. This could explode into a firestorm of litigation.
At least it will put every attorney in the country back to work.
Of course, Wall Street and the TBTF banks will be bailed out because they are essential to our economy. After all, if we let them go under, who will be left to engineer our next financial crisis?
Fuck 'em. Its time this eCONomy got back to producing real goods and service, not Ponzi Paper full of Fraudulent Misrepresenations.
If you think banks and financial sector are the only ones getting hurt from this, you should think again!
The more I read this board, the more I understand that why the U.S. of "A." is going down the drain faster and faster!
Many People who calling banks "crooks" are crooks themselves!
Yes, banks and mortgage lenders mess up their paper work on this. But that does NOT mean people who borrowed the money should get away with NOT paying their debt!
This country is really really screw up!
George C. - I'm with you, but they won't go that way. The poor downtrodden homebuyer was lied to, the banks must pay....but they can't...so we'll bail them out (after bonus time) and then we'll fine them bigtime, er - uh....I mean we'll fine ourselves! The banks knew this would go to hell, and they knew once again bad debts would be transferred to the public due to none other than too big to fail.
I looked up my info 6 months ago and Fannie Mae held my mortgage and it was being serviced by Saxon and the info was registered with MERs as well
Just for fun I looked it up today on Fannie and it was no longer there.
MERs has me with Morgan Stanley Mortgage Capital Holdings, LLC
So now I am with a Remic. At this point I am going to ask for the paperwork. No payments until I see the
paperwork.
Let the good times roll.
Keep us updated
Make sure to check the date it was allegedly transferred to the REMIC. There are limits to the time allowed. This could be a huge can of worms. If they missed the deadline then they illegally transferred your mortgage and the REMIC shouldn;t be holding your paper. If they backdated then that is probably a felony (but would be hard to prove).
But my advice is to keep paying until you get the details.
Someone posted this over at Karl's Market Ticker in the new ForeclosureGate forum:
I contacted my State's Superior Court Clerk's office to inquire as to the proper procedure for reporting a suspected fraudulent notarization. I was told you should first file a police report, and then report it to the Notary Division of the Court Clerk's office in whatever state the notarization supposedly occurred.
That lays part of the groundwork in advance of any civil action you would take in your home county, and gives the police the opportunity to launch a criminal investigation.
On mine they tried to file an assignment effective 2007 on my paper that was supposedly bundled into a MBS that closed in 2005.
Excellent! I have done the same thing. No payments until I see the wet-ink note.
Unfortunately I have fantastic credit, so they probably kept my loan without trying to sell it. I'm tired of good behavior not being rewarded. Bad credit probably equals lottery ticket on this. I think I'm done being good.
I'm studying as fast as I can. I referenced U.C.C. - ARTICLE 3 -§3-501 (b) 2 (1) as described above.
I have a fantastic form letter.. try me at gmail if you want a copy.
"Really, I don’t know, but to say the loan will be unenforceable when one can prove payments were made, doesn’t seem like it will fly in the courts."
This is flat out wrong. The first duty of a court is to make sure it has jurisdiction to hear a suit. To have jurisdiction, there must be a case or controversy between two real parties with standing. To have standing, the foreclosing party must have both the mortgage and the promissory note. In many instances, these instruments ended up in the hands of two separate parties, neither of which has, or can have, standing to sue in the first place.
Any "judgment" rendered by a court that lacks standing is void as a matter of law. That's what's not gonna fly here. Standing is a constitutional requirement for Article III courts, not some procedural gimmick.
The banks have royally fucked up.
Not wrong. Above quote is not a jurisdictional issue.
Implied-in-fact. Look it up.
~Misstrial
It seems to me that how this pans out depends mainly on the state attorneys general. If they want to prosecute notary fraud, that could cause some serious financial pain. (Or, I suppose, if the Mers system is ruled to be illegal by state supreme courts, that would cause serious havoc - but I doubt that will happen, as Mers has been operating since 1997, and only a few local judges have had any problems with it.)
If all the state attorneys general want to do is find a few vote-winning example cases where Mr and Mrs Earnest American were ramrodded into foreclosure despite making a reasonable offer to the bank, then this is a much more containable crisis.
I haven't heard yet of any stampede by GSEs, monolines and RMBS trustees to push back loans on banks. The longer foreclosures are delayed, the more risk of growing push-backs, as that would make a case of material losses from inability to foreclose.
But at least so far, what I mainly see here is a growing but statistically small number of activist homebuyers seeking leverage to renegotiate or simply delay foreclosure. They just won a big victory by uncovering widespread notary fraud, and that's going to give them more leverage and encourage more people to join their movement. The banks are conducting a damage assessment and studying their options. I suppose greater willingness to renegotiate will be part of their response, but I don't see them coming out and offering it to people who don't ask. Even today, a lot of foreclosures are still moving through the system and the vast vast vast majority of them are uncontested.
I don't understand how the bank *can* renegotiate. Let's say Citimortgage sold my $250K mortgage to a REMIC. Assuming they actually transferred the note, as opposed to registering it with MERS, the REMIC has my note and Citi is servicing said note. Let's say my house has dropped in value to $200K and my wife has been laid off and I can no longer make payments, nor do I have an interest because my house isn't worth the amount I owe. Who is going to renegotiate what? The REMIC doesn't want to lower its asset value. Citi doesn't even own anything to renegotiate.
I hope Janet keeps at it...
Karl just reported NY state dropped the gate.
This is no longer voluntary:
This is no longer a "voluntary" action; we now have a state regulatory agency dropping the gate.
In addition all servicers are now being required to report on the quality of their work and the review process to the NY State Banking Department.
It's about damn time. 49 more please.
Obama’s approval rating fell to a new low of 43 percent since he took office, down from 47 percent last month, according to a Reuters-Ipsos national poll.
So? Whassat got to do with mortgages?
1) Mortgage Co or Bank created a mortgage instrument with property as collateral.
2) Instrument was bundled as a group and "sold".
3) Appears that the mortgages as financial documents were not individually transferred. Basically, the documents, perhaps across many states with many differing requirements, were merely referenced.
4) The current owners of the bundled instruments may not "own" the mortgages as they were not legally transferred.
5) Big question??? Were the bundled instruments in fact interstate fraud/wire fraud/ ????????
Seems to me that, when questioning what will happen next in the mortgage scandal/gate/what have you, the author skipped over the first thing that would happen next...that being the widening out of Credit Default Swaps on US Banks.
Couldn't happen to a better bunch...and it seems that little move is gaining traction at the market draws towards close.
It is so awesome in the awesomest sense of awesome. Right smack dab at the hot end of elections.
All this big hub bub over some Triple "A" securities??
porno for chaos lovers.
plus 10^10 Mako
Smarter monkeys: Some states have fairly protective declarations of homestead, designed to protect the domicile against most liens, save those of ad valoreum taxes, mortgages o r mechanic's liens.
Ok, but the mortgages referenced in (for example) state of FL Homestead declaration refers to a secured mortgage.
So, question: Would it be worth filing declaration of homestead as a general protection against crazed pretender-lenders while one waits for a reply from produce-the-note letters, or in a truth-in-lending case?
Would this give any protection at all? Reason I'm asking, is that I am in FL, home of the horror stories and don't want to fall victim to the rocket docket or summary judgement in error.
thnx
I'm sorry, I just don't get it.
If the lender-bank transferred the mortgage to an MBS doesn't it mean that it has received the money from the CDO and therfore is not party to the foreclosure?
Or is Janet talking about the banks that have issued the CDOs?
When do we start hanging the crooks?
Really this is a great post from an expert and thank you very much for sharing this valuable information with us.
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