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Some Very Bad News For The "Sweep Fraudclosure Under The Rug" Brigade
*BANKS LOSE PIVOTAL FORECLOSURE CASE IN MASSACHUSETTS HIGH COURT
*MASSACHUSETTS TOP COURT DECIDES CLOSELY WATCHED IBANEZ CASE
*MASSACHUSETTS DECISION MAY AFFECT FORECLOSURE-CRISIS CASES
Here is why this is relevant:
This was an Amicus Curiae brief (friend of the court) filed by the Massachusetts Attorney General Martha Coakley. (see attached)
Page 10:
“Plaintiffs’ claims that the Land Court’s ruling will cause widespread confusion or significant cost to innocent parties are greatly exaggerated, and such reasoning does not warrant ignoring the plain requirements of the law designed to protect Massachusetts consumers. Indeed, it is the foreclosing entities themselves who will bear the greatest cost of clearing titled from their invalid foreclosures. Having profited greatly from practices regarding the assignment and securitization of mortgages not grounded in the law, it is reasonable for them to bear the cost of failing to ensure that such practices conformed to Massachusetts law.”
Page 4-5:
“Rose Mortgage was the original lender for the Ibanez mortgage and Option One Mortgage Corporation was the original lender for the LaRace mortgage. Rose endorsed the Ibanez note and property assigned the mortgage to Option One. Option One then executed an endorsement of both promissory notes in blank, making each “payable to bearer” and negotiated by transfer alone until specifically endorsed.” In both cases, Option One also executed an assignment of the mortgage in blank (i.e. without a specified assignee). These blank assignments were never recorded and were not legally recordable because they failed to identify the assignee [cites state law].”
“After Option One sold the Ibanez mortgage to Lehman Brothers. Lehman Brothers then sold the mortgage, together with hundreds of other loans, to Structured Asset Securities Corporation (“SASC”). SASC then sold these loans to the Structured Asset Securities Corporation Mortgage Loan Trust 2006-Z, of which plaintiff U.S. Bank National Association (“U.S. Bank”) was the Trustee. All off the supporting documents concerning the Ibanez mortgage were placed into a “collateral file” and presumably were transferred between the entities listed above as each transaction was completed. This collateral file contained the original promissory note, the Rose Mortgage endorsement of the promissory note to Option One, Option One’s blank endorsement of the promissory note, the mortgage issued to Rose Mortgage Inc., the assignment of the mortgage from Rose to Option One and Option One’s blank mortgage assignment”
[Goes through similar for the LaRace mortgage]
Page 8:
“The Land Court was correct to invalidate the foreclosure on two distinct grounds. First, the plaintiffs lacked the legal authority to conduct the foreclosures because they were not among the parties authorized to do so under either the statutory power of sale or under G.L.c. 244 §14. Second, even if the plaintiffs had the legal authority to foreclose (which they did not) the foreclosures would still have been invalid because the notices issued by the plaintiffs failed to name the present holder of the mortgage as required under G.L. c. 244 §14. To foreclose on a mortgage securing property in the Commonwealth, one must be the holder of the mortgage. To be the holder of the mortgage, one must be the original mortgagee or be the assignee under a valid assignment of the mortgage. It is not sufficient to possess the mortgagor’s promissory note. The Land court correctly held that the plaintiffs, U.S. Bank and Wells Fargo were not holders of the Ibanez and LaRace mortgages at the time of the foreclosure because they were not assignees of valid assignments of the mortgages. Without valid assignments, the plaintiffs lacked the legal authority to foreclose the mortgages. This, without more, is sufficient grounds on which to invalidate the foreclosures and the Land Court was correct to do so.”
Page 10:
“Plaintiffs’ claims that the Land Court’s ruling will cause widespread confusion or significant cost to innocent parties are greatly exaggerated, and such reasoning does not warrant ignoring the plain requirements of the law designed to protect Massachusetts consumers. Indeed, it is the foreclosing entities themselves who will bear the greatest cost of clearing titled from their invalid foreclosures. Having profited greatly from practices regarding the assignment and securitization of mortgages not grounded in the law, it is reasonable for them to bear the cost of failing to ensure that such practices conformed to Massachusetts law.”
Page 11:
“Plaintiffs had no legal authority to foreclose because they were not the original mortgagees, were not authorized by the power of sale, and because they lacked valid assignments of the Ibanez and LaRace mortgages.”
Page 12:
“Plaintiffs are not the mortgagees of the Ibanez or LaRace loans.”
Page 16:
“Neither plaintiff was authorized by the power of sale in the respective mortgages.”
Page 17:
“The assorted securitization documents do not establish or compromise valid assignments.”
Plaintiffs contend that various securitization documents constructively assigned to them the Ibanez and LaRace mortgages. Specifically, the plaintiffs contend that the Ibanez mortgage was assigned to U.S. Bank by way of a Trust Agreement that is not part of the record, but is purportedly evidenced by a Private Placement Memorandum. They contend that Wells Fargo received the LaRace mortgage via a Purchase and Sale Agreement. In each case, plaintiffs’ argument is without merit.”
The LaRace Securitization Documents
As the Land Court found, the LaRaces gave a mortgage to Option One when the loan was initially made. Thereafter, Option One executed an assignment of the mortgage “in blank,” i.e., without naming the party to whom the mortgage was to be assigned. As detailed above and by the Land Court, this “assignment in blank” was ineffective to transfer any interest in the mortgage. Wells Fargo contends that the LaRace mortgage was assigned to it by the Pooling and Servicing Agreement it entered into with Asset Backed Funding Corporation (“ABFC”). This agreement purports to transfer and assign all of the rights of ABFC to Wells Fargo. However, there is nothing the record that ABFC had any interest in the LaRace mortgage. Thus, even if the language in the Pooling and Servicing agreement was sufficient to transfer all of ABFC’s interests in the LaRace mortgage, the assignment would be ineffective because ABFC had no interest in the LaRace mortgage to transfer.”
Page 20:
“Not only did plaintiff’s lack legal authority to foreclose, but the foreclosures are invalid because the notices published prior to foreclosure are fatally deficient.”
- G.L. c 244, §14 requires that the notice identify the “present holder” of the mortgage
- Plaintiffs’ false identification of themselves as the “present holders” in their foreclosure notices renders the notices fatally deficient
- Plaintiffs’ argument that they held the mortgages notwithstanding the lack of valid, written assignments as of the date of the foreclosures is unsupported by law.
Page 27:
“There are no grounds on which to limit the Land Court’s decision to future cases”
- Plaintiffs request that if the Land Court’s decision is upheld, this Court limit its application only to future foreclosures. This argument is without any basis in law and should be rejected.”
- Notwithstanding the “industry practice” of subprime lenders and other who created mortgage backed securities, the statutory requirements at issue int his case are long –settled.
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I like the words "fatally deficient."
Humbly submit you have it wrong. The ZH vernacular is: "fatally deficient"... bitches
Robo...we need you to post bank charts today.
Thanks.
Cdad
what we need is for Robo to start posting his daily summaries again as a full contributor instead of down here amongst us lowly commentors
I am current in my mortgage, albeit upside down, and I requested the note from them. Turns out they sold the note without any documentation and continue to receive payments on this note without fowarding said payments to the investor os this security. That being said, here is what is going out to them today. I pieced this together from the ruling of the MA court on the referenced foreclosure. I ain't no attorney, but I will give it a shot while I am current and in no danger, as of yet, ofdefault. Sorry for the length.
On October 14, 2010, a qualified written request under Section 6 of the Real Estate Settlement Procedures Act (RESPA) was sent to the attention of REDACTED. In response to the inquiry, two different departments within REDACTED have indicated opposing views as it relates to holder of the mortgage. One response indicates that REDACTED is currently the holder of the mortgage and no assignments of the mortgage had taken place regarding the above reference property. This response was received within 60 days of the aforementioned request. In late December of 2009, a second response indicates an alleged assignment to REDACTED, as well as written confirmation that no recording of the assignment had taken place.
This latter response is indicative of the recent widespread failure of securitization industry participants to adhere to their own agreements. Furthermore, Ohio Revise Code requires that an assignment must be in writing and recorded. A mortgage may be assigned or partially released by the holder of the mortgage, by writing the assignment or partial release on the original mortgage or upon the margin of the record of the original mortgage and signing it. Also allowed by separate instrument, see code sections 5301.31 and 5301.32. A search of documents at the County Recorder Office, as well as a search of the documents REDACTED presented in response to the RESPA request indicate no such required recording of the assignment on the original mortgage or through any separate instruments.
While it is understandable that lenders, or holders of mortgages or deeds of trust, often assign mortgages or deeds of trust to other lenders, or third parties, appropriate documentation must be provided and recorded in order for the investor to take place of the original lien holder. To effectuate an assignment, the general rules is that the assignment must be in proper written format and recorded to provide notice of the assignment.
Once a mortgage or deed of trust is paid, the holder of the mortgage is required to satisfy the mortgage or deed of trust of record to show that the mortgage or deed of trust is no longer a lien on the property. The general rule is that the satisfaction must be in proper written format and recorded to provide notice of the satisfaction. If the lender fails to record a satisfaction within set time limits, the lender may be responsible for damages set by statute for failure to timely cancel the lien.
There is no document in the record establishing that either the note or the mortgage was assigned to REDACTED, hence no legal documentation to indicate that the note was assigned. If, as the RESPA response indicates, REDACTED is the investor on this mortgage and REDACTED is not the holder of the note, then there is no basis for the claim of continued receipt of the borrowers payments. As such, REDACTED would not be considered a creditor of this debtor and lacks statutory authority to file a proof of claim on this property.
This letter is a formal written request for a Satisfaction of Mortgage on behalf of REDACTED so as to remove REDACTED from the lien position on the mortgage. Please also provide an accounting of all payments paid to the investor listed in the response to the October 14, 2010 RESPA request.
+10^100
Go for it!
Dr. Head--on the same road you are on. would love to compare notes. my email: patejw@gmail.com
Dropped you a line just a moment ago.
Just as a street tactic, because the assignments are unrecorded or not recorded properly, one could in theory begin a process of filing junk assignments to close parties or other lenders that have no standing to simply cloud title. It would be rather funny to have a foreclosing attorney run title on behalf of his bank client only to find the loan had been sold 3 times and also had re-conveyances filed again and again. The property could become so radioactive that just the noticing of parties alone would demonstrate the utter confusion and otherwise subvert/postpone the foreclosure. There is another larger issue here in going after attorneys themselves when they are fully aware that they/their client has no standing whatsoever. That is the problem with the US legal system. There is no base punishment to legal practitioners for starting actions that they professionally know are defective.
Much of the abuse of common law and property law comes from the unbridled ignorance of the population that lacks education on these matters. I used to be one of them until I met ZH. Since then my life has been filled with reading code (aka the law) on a village, state, and federal level. The piles of paper containing the bull shit is unbelieveable. Ignorance, of course, would not excuse someone in breaking any one of these codes contained within thousands of papers with fine print. FUCK AMERICA. We are not, nor have we, ever been free in the 32 years of my life on in the kleptocracy.
It irritates me that the lawyers respresenting average J6P may not even be aware of esatblished law either. Just like I am ignorant of spelling.
I requested my note almost 60 days ago. I have not yet received it and was unsure what my next step would be once I do. Thanks to you, I now know.
Be sure and call your County's Recorder Office and ask for all materials as it relates to your property. On file, they should have a copy of your mortgage and a copyof the deed. On the mortgage, at least in Ohio, is where all assignments are required to recorded. Either in the margin or on a seperate sheet, all documents are generally required to be filed with the county office to substantiate lien.
Keep in mind, I ain't no lawyer, nor do I wish to be one. This does notconstitute legal office and I cannot offer any. I can, however, notify others as to what I am currently doing and keep, those who are interested, apprised of the happenings as it relates to my actions and requests of the fractional reserve monsters.
If this doesn't work, I will also be requesting documentation as it relates to the financial consideration that the banks extended during the loan origination process. With the reserve ratio being the way it is for FDIC insured banks, chances are great that the loan was a created reserve, hence no initial financial consideration on the part of the banks.
I am done getting punched in me sphincter without so much as taking a swing back. I will keep swinging in the meantime.
If I needed a lawyer (and the only reason for not hiring one would be abject poverty), I'd give these guys a call for a referral:
http://www.bloomberg.com/news/2010-10-27/foreclosure-woodstock-lures-law...
Just my opinion. Good luck, Dick.
Grassy ass! So far my good friend, who is a real estate attorney, has told me that I am close enough that I don't need him. He said call for advice, but he wouldn't accept retainer. Not sure what to make of that, but a couple of letters to the bank is worth my time Ibleieve.
I think it is possible that gold and silver are moving on some of this news. The more doomy the news about this issue, the more they go up. If the "sweep it under the rug" meme looks like it will prevail, it seems to trend down. Both metals just popped which caused me to consider this possibility. I do think it is a driver.
The state want's it's fucking money...EVERY time the title get's transferred...the bank lawyers should have been all over that right from the beginning. They screwed themselves trying to screw the state out of their transfer taxes. Follow the money...
As I and others have pointed out, if the transfers were not legal then technically the counties are owed nothing. Either the transfers were legal and the counties are owed their fees, or the transfers were illegal and the counties are owed nothing.
Bank bitches ... "Flame On!"
How sad it is our nation when it is actually completely refereshing to see a tiny bit of real justice served?
Eliminate the mortgage interest deduction NOW !
Agreed
why ? (serious question)
Inflates home values, among other reasons.
Wow, posted at 10:35 when WFC was still above 31.90. Could have made a bundle with an instant short. Never thought of ZH as a source of day trades !!
We'll be green before day's end. Too many dipshits who will buy the fucking dips.
If by dipshit dibbuyers you mean the POMO bunch, then I agree with you. If you mean the retail investor, then I disagree. Retail investors are selling their first born to get an iMaxiePad to mop up the blood from their anal ramming from the Fed and Tubro Timmy.
Couple questions/issues:
1. Was Option One a Plaintiff? If not, Option One should institute an action to foreclose given it now has been declared the holder... and default likely admitted by the Defendant...
2. The ruling shouldn't preclude the purported note holders from naming the entire chain of assignment as plaintiffs and getting a preliminary ruling from the court as to the proper holder and then foreclosing... [the parties can sue each other later for the put backs].
3. I've been arguing with another idiot on another thread, but essentially this is recognition that title has been impaired. In other words, given it is fundamentally impossible to determine the chain of assignment (since nothing is recorded), the proper party to issue a release is unknown as well as any ancillary persons/entities that may have an interest. In short, every mortgage now requires an action to quiet title before title can be cleared, at least in Massachussetts. With this precedent, I would feel comfortable filing a lawsuit in Mass. as a homeowner, regardless of whether any foreclosure action has been instituted against me. It would help if I was attempting to sell the property or a title insurance company had thrown its hands up and said, "we have no idea who may have an interest and cannot insure against the possibility someone pops their head up in the future claiming an interest".
>> Was Option One a Plaintiff? If not, Option One should institute an action to foreclose given it now has been declared the holder
Option One is out of business.
Its assignees/purchasers should have a cause of action. Amend the above to include assigns (kinda ironic) of the business.
So for those who have been in their houses for some time, a Quiet Title along with Adverse Possession?
Adverse possession is nearly universally out of the question for a present homeowner. Essentially, adverse possession generally may not arise from permissive use of land by the mortgagee/lender and, if the alleged adverse possession does emerge from a permissive use of the land, then the party claiming adverse possession will likely have a much higher evidentiary burden. In Arkansas, it is practically impossible to prove adverse possession that arises from permissive use. I suspect we're not alone in this regard, as we're mostly parrots in our law.
A quiet title action can be filed by anyone... it basically asks the court to determine the true owner/lienholders. You might even be able to seek declaratory relief... present your note and mortgage and get a court to determine what rights the documents give your originator, given the assignments... maybe slander of title... just spitballing here.
The problem with being proactive about any of this is that if you're planning on defaulting, you're setting yourself up to have a precedent entered that determines the holder of the note, and thus the proper party to foreclose. I'm of the mindset that it's best to default and then let the monkeys try and fuck the football in front of the court. If you live in a state where the lender can come after you for a deficiency, then maybe it would be possible to enter into a settlement given the issues with title.
Further, anyone who knowingly declares title to their house is impaired through public court documents, is just asking for a lawsuit from a potential buyer... which is something else to consider... there's no going back.
Of course, all of this will come at considerable expense to your credit... among other things.
Look at the bullshit on the REITs...completely flat. Unreal.
IYR and RMZ keep getting jammed back to parity for the day.
sold sold and sold that dip
sold sold and sold that dip
Correction, REITs now positive and climbing. LMFAO. Really...
Rose Mortgage properly signs over the mortgage and note to Option One Mortgage Corp, which signs blank assignments and passes along the paperwork. Option One still legally owns the claim, will show valid ownership to the court and settle up the proceeds with the bond buyers. No?
See posts above, but Option One is apparently out of business. So, its purchasers/assigns should have a claim... The mass. supreme court has now set the law of the case and the holder of the note can no longer be questioned... rock and roll.
I'll bet my paycheck that this same shit is going on with student loans...
Someone will throw water on this before the close. Watch the "miracle" pump in the last half hour today as the dip buyers jump in en masse.
"Buyers"...man, that shit's funny right there.
If you listen closely you can almost hear cnbs whispering buy the dip, buy the dip, buy the dip. Rumor that the SEC may replace scrolling ticker on Down days with buy the dip until stocks go green. Flash crash - solved
Ahoy! Black Swan sighting confirmed, on the horizon!
So what does this mean for the mortgaged back securities issued from the banks "securing" these mortgages? Are they not really backed by anything? Are they worthless paper? And who is now holding the bag? Do we see QE x to infinity? Or does Congress grow a set and end the TBTF saga? Inflate or Deflate?
Putbacks. Worthless paper.
Putbacks = Fed printing new money to buy shitbacks.
Depends. If the putbacks are to a TBTF, then yes. If the putbacks are to a TSTS (too small to survive because it doesn't pose enough systemic risk), then the analysis may be different... the FED would have to either pump it into the FDIC or pump it into a TBTF depending on the size of the haircuts imposed... if the conservator comes in and hands it to someone else for pennies on the dollar, might not need much printing.
The point was made about "radioactive" real estate, and I have always believed that is what we will get...a huge amount of property in this nation which will cost more than its worth to cleanse its title record.
2/3rds of total mortgage loans were securitized. And potentially one could argue that unless and until each mortgage was inspected and remediated like toxic waste there is no use in obliging yourself to a mortgage to buy these properties due to the multiple levels of encumberance or purported emcumberances which might be claimed AT ANY TIME IN THE FUTURE.
This ruling is interesting academically, but all the banks will be bailed out by taxpayers regardless.
Count on it.
I've heard it's 20 trillion to do that, just here in the USA.
I don't about the UK, but I believe the American people would burn down Washington DC first. We're pretty pissed off!
Speak for yourself dude, the playoffs are on tomorrow.
Hilarious, true, and unbelievably sad all at the same time. All in just nine words. Well done.
ROFL and in the eyes of the court, it wasn't even close.
Well Citizen's United gave them the court, and the ball is bouncing. Let's hope they're as bad at bribing as they are at banking.
I had watched the oral arguments before the ruling, even then it was clear which way the Court was headed:
http://www.suffolk.edu/sjc/archive/2010/SJC_10694.html
Here is the published opinion:
http://weblinks.westlaw.com/result/default.aspx?action=Search&cnt=DOC&db...
Question - Since the Mortgage backed security business was based on mortgages for new homes, seconds and thirds on existing homes, fraudulent mortgages on other peoples homes, how likely is it that tens of thousands of mortgages, or more, were written for homes that were built but never actually sold, and for homes that were neve built? All the big banks had to do was electronically fill out the mortgage for homes that never existed since they knew they were going to dump them at full value to Fannie mae and Freddie Mac, and the securities would be picked up at full value by the Fed. I wonder if I can get the addresses for hundreds of vacant, never sold new homes and run them through MERS to see if someone wrote a mortgate for it, or can I tell if MERS has home addresses for homes that do not exist? Anyone? Anyone? Bueller?