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Guest Post: Houston, We've Got A Problem - Bevilacqua

Tyler Durden's picture


Submitted by Greg Lemelson of Amvona

Houston, We've Got A Problem - Bevilacqua

KranzConsoleOn Oct. 18th, 2011 the Massachusetts Supreme Judicial Court handed down their decision in the FRANCIS J. BEVILACQUA, THIRD vs. PABLO RODRIGUEZ – and in a moment, essentially made foreclosure sales in the commonwealth over the last five years wholly void. However, some of the more polite headlines, undoubtedly in the interest of not causing wide spread panic simply put it "SJC puts foreclosure sales in doubt" or "Buyer Can't Sue After Bad Foreclosure Sale"

In essence, the ruling upheld that those who had purchased foreclosure properties that had been illegally foreclosed upon (which is virtually all foreclosure sales in the last five years), did not in fact have title to those properties.

Given the fact that more than two-thirds of all real estate transactions in the last five years have also been foreclosed properties, this creates a small problem.

The Massachusetts SJC is one of the most respected high courts in the country, other supreme courts look to these decisions for guidance, and would find it difficult to rule any other way in their own states. It is a precedent. It's an important precedent.

Here are the key components of the Bevilacqua case:

1. In holding that Bevilacqua could not make "something from nothing" (bring an action or even have standing to bring an action, when he had a title worth nothing) the lower land court applied and upheld long-standing principles of conveyance.

2. A foreclosure conducted by a non-mortgagee (which includes basically all of them over the last five years, including the landmark Ibanez case) is wholly void and passes no title to a subsequent transferee (purchasers of foreclosures will be especially pleased to learn of this)

3. Where (as in Bevilacqua) a non-mortgagee records a post-foreclosure assignment, any subsequent transferee has record notice that the foreclosure is simply void.

4. A wholly void foreclosure deed passes no title even to a supposed "bona fide purchaser"

5. The Grantee of an invalid (wholly void) foreclosure deed does not have record title, nor does any person claiming under a wholly void deed, and the decision of the lower land court properly dismissed Bevilacqua's petition.

6. The land court correctly reasoned that the remedy available to Bevilacqua was not against the wrongly foreclosed homeowner but rather against the wrongly foreclosing bank and/or perhaps the servicer (depending on who actually conducted the foreclosure)

When thinking about the implications of Bevilacqua – the importance of point six cannot be overstated.

The re-foreclosure suggestion is not valid

Re-foreclosing on these properties in not likely as has been suggested by bank layers in light of the Bevilacqua ruling. We aren't talking about Donald Trump here and we have a funny feeling he won't be affected either. Mostly it's guys like Bevilacqua who bought single or multi units, in the "hundreds of thousands" range. It seem unlikely that the majority of these folks would have the capital to eat their existing loses, re-foreclose at great expense, and on top of all of that come out as the highest bidder on the very property they formerly thought was their own. In many cases, as was the case in Bevilacqua, the original purchaser of the foreclosure may have already resold the property and moved on, thus leaving in their wake an even more serious problem; the likelihood of a property owner, who had nothing directly to do with a foreclosure, but is left with all the fallout of a post-Bevilacqua world.

Re-bidding on these properties in a re-foreclosure scenario would be done in what is soon to be a new inflationary environment (most originally bid in a deflationary environment for housing), thus making the "re-foreclosure" blank threat all the more unconvincing and unlikely.

However, it should be easy enough for investors similarly situated to Bevilacqua to simply hire fee contingent attorneys who can sue the banks and servicers for conveying fraudulent deeds – that seems like a much easier and logical proposition. When the potentially millions of lawsuits are added to the complaints filed by investors in MBS, we think the banks will finally be revealed as wholly insolvent. The only other way it could happen faster, is if the average American home owner, realizing he may never obtain clear title to his home (short of an indemnity from his bank), finally stops making his monthly payments on his invalid note (which completely lacks a valid security instrument). In this way, the existing insolvency of banks would be recognized in a matter of days rather than months or years.

The act of denial does not actually alter reality

Ostriches are said to have discovered this the hard way. On November 12th, 2010 in our article "Tattoos, Pyramid Schemes and Social Justice" we advocated that home owners, with securitized mortgages, regardless of their ability to pay, consider suspending their mortgage payments, and place those funds into a private escrow account instead. We wrote:

"Radical though it may seem, we believe the only way to stop the chaos of fraud and the breakdown of the rule of law in our courts, and most importantly to ensure that we ourselves are not participants in the fraud, is for homeowners who can afford their mortgage to stop paying it..."

The article goes on to say:

"For example, what is easier; to scorn those who are being foreclosed on because they can no longer afford their mortgage or to accept the possibility that our entire financial, and maybe justice system might be badly corrupted? Across all spectrums of crime, victims are often blamed, just ask attorneys who represent rape victims. This phenomenon is by no means unique to mortgage fraud, or those who have been raped by the institutions who carry out this trade. It has been made to appear as if those who have fallen on hard times are a matter of "incidental" inequalities in an otherwise procedurally just system. However, it is precisely the opposite which is true. Our financial institutions have created deliberate inequalities, through the use of procedurally unjust systems."

We pointed out that suspending such payment might be done for the following reasons, which in light of the recent Bevilacqua decision, and the pending Eaton Decision, are increasingly being proven correct:

"1. They are not sure where or if their payments are going to the true note holder.

2. They no longer know who the true note holder is.

3. They have a legitimate concern that they may not be able to ever obtain clear title and/or title insurance (in the event of a sale) given what we now know about improperly conveyed titles and the illegitimacy of "MERS".

4. They do not want to be an unwitting or passive participant in fraud.

5. They care about America, want our culture to be healed and recognize the dignity of every human being."

Long before the Ibanez decision was handed down we wrote the following (taken from the same article):

"If these legitimate reasons are the cause to suspend mortgage payments, then what attack on these "non-co-operators" character can be levelled? In these cases, Judge's will have to allow for proper civil procedure to take place in order for the legitimate inquiries of concerned Americans to come to light. Since banks virtually never produce adequate documentation (which appears to be by design), chances are things will escalate."

We went on to discuss the unique risks of apathy and denial in the following:

"...Americans have a duty to ask critical questions about the operations of their financial institutions, and if evidence has been presented that a deal was made, but not everyone was playing by the rules, than those deals need to be looked at again. It is not good enough any longer to say, if it doesn't affect "me" than, I'm not getting involved. We have a duty to one another as Americans, and more importantly as human beings, to care about truth and justice. What's more, apathy, so long as we are not affected, is a short lived consolation. Ultimately, this crisis will affect everyone sooner or later."

Certainly when the SJC handed down their opinion affirming Bevilacqua, perhaps hundreds of thousands, and ultimately millions of people who previously thought they were not affected, were suddenly well, affected. That is because there has been about six million foreclosures since the current economic crisis began, and those foreclosures may have resulted in many more interested parties, as was the case in Bevilacqua, who sold the subject property to four new owners, thus multiplying the number of parties involved, and ultimately the number of legal actions which could be brought. It is not hard to see where six million voided foreclosures might well result in new lawsuits in excess of that number – and if the courts advice is taken, these complaints would be directed, and properly so, at banks and servicers.

We expanded greatly on the themes of fraud, denial, and the likely economic consequences in our articles "Ibanez – Denying the Antecedent, Suppressing the Evidence and one big fat Red Herring" and "Eaton – Dividing the Mortgage Loan and Affirming the Consequent" which covered the other two recent landmark SJC cases - these may be worth reading in tandem with the present article in order to understand the full breadth of the problem.

In the Ibanez article, which was written in January of this year we wrote the following:

"If you live in Massachusetts and your mortgage has been securitized, or if you have purchased a foreclosure property, we think it would be wise to consider suspending your mortgage payments if you haven't already."

We believe these particular words have become incredibly relevant given the implications of Bevilacqua.

Finally, In our article "On the ethics of mortgage loan default" we tried to cover any outstanding inhibitions homeowners might have about the advice we were giving.

A few phone calls opens a whole new world

We decided to call a few title insurance companies to get their "take" on it all. We made the mistake of identifying ourselves as "bloggers" in the first phone call – that call may well have set a new land speed record for the fastest time from answering to hanging up. Thinking there might be a smarter approach, we decided to identify ourselves as homeowners (equally true) on the next call – the results were a little better, but only slightly.

The underwriters and title examiners we spoke to kept asking if we were attorneys, or if we represented the home owner as "council". We thought this was curious because we kept pointing out that we were ourselves just homeowners. Then it hit us, they have never actually spoken to a real, live, breathing customer on the policy origination side, they had only ever spoken to lawyer-brokers. We thought; what an interesting confluence of incentives this must create, and why is the buyer of the policy necessarily so far removed from the seller?

the_money_trailFollow the money trail – that's what they say. Looking for answers, follow the money trail. What is the one piece of the equation upon which all else hinges? It's not the lawyers, it's not the judiciary, the answer lies in the investment banks – but they must first pass through the gatekeepers of real estate; title insurance companies. To understand the problem does require some understand of law, but really mostly it's an understanding of finance and of business that is required above all else. Money in this case, cannot pass from bank depositor, to banker, to bank borrower in real estate transactions without the all-important "title insurance policy".

So maybe there will be a happy ending after all, for once upon a time didn't the likes of AIG insure a whole lot of CDS's for Goldman Sachs who was then paid 100 cents on the dollar (in a 43 cents on the dollar world)? That worked out well – just think of the benefits of insurance - AIG is still around, Goldman's stock price went on to quadruple in the following 18 months. The cost was relatively low, and mostly out of sight - voluntary shareholders in AIG were emancipated from their money-investment in AIG stock, and were swiftly replaced with involuntary shareholders – also known as; tax payers. It's the bankrupt companies definition of "preferred" shareholder – although it veers slightly from the traditional one.

bridge_jumpingSo does it matter what lawyers, bankers, bloggers and judges think? This is America and America is all about business, and in this case, business cannot be transacted without title insurance companies, and the good thing about insurances companies is they have actuaries, and actuaries calculate risk, this is especially important since the banking community has proven that they either cannot calculate risk or are not interested in doing so. Actuaries are not exciting people, they are number crunchers, they don't do bridge jumping and they would never take inordinate risk, right?

The insurance business is interesting, even if their actuaries aren't'. That's because it's really not about making money off writing policies, anyone who knows the insurance business (or has read a 10Q, an annual report or listened to a conference call of one) knows that insurance companies make their money from investing the "float", that is to say the funds held in trust between the time policy revenue is paid in, and the time claims are paid out. It's a good business, in fact it is so good – almost everyone wants in. this business has become so robust that it even supports its own cottage industry in off-shore jurisdictions where the return on the "float" can even go untaxed - or did you think those insurance executives jets just happened to have Bermuda, The British Virgin Islands, and the Caymans stuck in their GPS just because those places have nice beaches? Although we concede they also have very nice beaches.

Needless to say it's an even better business, when you almost never have to pay out on a policy. Title insurance is unique in that way. Even the SJC conceded in Bevilacqua that this sort of "Try Title" action had not been presented before the SJC in over a hundred years. In fact, business is so good, that there is really no entry on the Profit and Loss statement of these firms for marketing expense – when was the last time you saw a TV ad, or an AD on the Internet for a title insurance company which had a better product at a better price? There is no Geico Gecko for the title insurance business.  For that matter, don't hold your breath on finding a deal on title insurance through Groupon either.

This piqued our interest. We were so drawn to the prospect that the answers to a multi-trillion dollar question may lie in this little known, little observed, obscure industry that we decided to pick up the phone and call a few title examiners, underwriters and brokers. What we learned was nothing short of fascinating. First they all clammed up and didn't want to talk SJC cases. Second, they affirmed, after a bit of cajoling, that they will write a policy if any servicer gives them a "pay off" letter – we're talking a one page letter from one perfect stranger to another – insuring ownership in hundreds of thousands if not millions of dollars in real property (per transaction), and of course trillions at the nation level. This one pager could then be recorded at any local registry with precisely zero oversight.

In a world where you can't take hair conditioner on to a flight (even in all your barefoot glory), it turns out anybody can record title to a property worth large sums with absolutely no oversight or security checks. Frankly, we're beginning to feel like we've been in the wrong business all these years.

the_matrix_3When pressed on the Eaton case, and the fact, that servicers cannot actually discharge anything (as Green Tree Servicing, LLC admitted in the uber-important Eaton case), certainly not the debt, most hung up the phone quickly – although we were exceedingly polite, professional and even gentle in our approach. These conversations, where something like being in the twilight zone. Just when we thought we had contemplated the last layer of the onion, we couldn't believe it, with just a few phone calls, the matrix of lies came streaming down before our face yet again, like vertical lines of green computer code – apparently the underwrites took the wrong pill.

How hard would it be for the title examiners and underwriters to simply go deeper than one page, or contemplate the importance of the decisions coming out of the land court and the SJC?

The failure to perform risk assessment in the insurance underwriting business really means a lapse in fiduciary responsibility. The Absence of fiduciary responsibility means the possibility of shareholder class action lawsuits.

Conflict of Interest? You think?

So if the insurance business isn't about making money on writing policies (predicated on sound actuarial work), and if an insurance company can even lose money on underwriting as many often do, and still make a profit by investing "the float", then there may be an incentive to write policies, that reflect less than prudent risk management – that is to say losses on the underwriting side of the business would be made up on the investment side. As long as this is successful, shares in these companies can be sold to investors. The best investors are large funds like mutual funds because they buy in large junks of shares, are run by investment managers who are generally not very shrewd, and they hold long enough for insiders to sell. Large mutual funds are also the ideal investors because they have a steady stream of cash from IRA's and 401k's. IRA's and 401k's are steady sources of cash to mutual funds because most of those folks who were wise enough to envision saving, were also determined to buy and own a home (rather than rent one), thinking (perhaps wrongly), that it represented a sound investment. In this way, the loop from policy purchaser, to indirect title insurance company shareholder is complete. It's almost like a double tax on the unsuspecting home purchaser, which is subtle and goes almost entirely undetected. That's is why most homeowners have no clue who their title insurance company is, but can tell you in half a second who insures their car, their health care, or their home.

So what sort of investments are the investment managers at insurance companies making? Well, we know the insurance culture isn't fond of extreme sports, and as it turns out their not very enterprising when it comes to their investments either – let's just say their passive, they like fixed income, you know, a few muni's, maybe some treasuries, but above all, they like commercial bonds for their fixed income (and perceived safety), especially those which are derived from Residential Mortgage Backed Securities, or RMBS's. The feeders of these funds – the mortgage origination and securitization industry, is none other than their very own customers – think of it as one big happy love triangle, or if you happen to live in Utah and prefer their par lance "plural marriage". The title insurance companies, the mortgage origination and securitization industry and policy purchasers are like sister wives. Of course the husbands in these relationships of Asymmetrical Power, are the alchemists of the modern era, they are the engineers of derivatives, and they hide behind curtains in tall shiny buildings in an emerald city called wall street, turning their Copper into Gold.  For more on this activity, it might be worth reading the article "Three Card Monte and other efficient ways of parting with your money"

Historically, title insurance companies almost never pay out. When was the last time you heard of a title insurance policy actually being used? Over the decades, it was nothing more than a simple entry on the closing HUD statement when real estate was bought or sold. Homeowners didn't' "shop" the policy, and they had no idea that when it showed up on their closing statement, that their lawyer was also a broker for the title insurance company, collecting some 70% of the premium – if they knew that, than they would know that their attorney might also have a conflict of interest when he oversaw / received the title exam, and the selection of the policy. Finding a defect or cloud on title in this circumstance meant no policy and therefore no commission – so the closing attorney's themselves were incentivized not to scrutinize too much – and why was this agency relationship never revealed? Isn't that in direct opposition to consumer protection laws?

So why were those underwriters so quick to get off the phone, as soon as we "dug a little deeper" into their criteria? Well, it's because their options don't look too good – in fact there are only two:

a) Acknowledge that the titles to 60 mln. plus homes are badly clouded and not insurable. In which case the entire operation of writing policies, taking in premiums, investing the float in MBS's, so that mutual funds can take in funds from various and sundry retirement accounts of home owners and buy your stock suddenly stops.

b) Pretend like your not aware of the problem and deny or use the more complex version "deny, deny, deny".  In this operation, business can continue, at least for a while – although when the final reckoning comes, the problems will be many orders of magnitude larger.

We believe plan "B" has been the modus operandi of the industry for sometime now. However, like all parties, and indeed everything which has a beginning, this too must come to an end.

Title insurance underwriters and drug addicts; just likes peas in a pod

enabler2Why is the role of insurance companies in all of this not more closely examined? If it was an addiction we were speaking of (and maybe it is), we could think of the insurers as the "enablers", and as any good interventionist, support group, or sponsor will tell you, the enabler is as much of an addict as the addict themselves.

But what is the addiction? In a way it's money, but in another way it's something more than that. It's really power. Money of course, is power, because at the end of the day, its really a redemption slip on society, and when you possess many of these tiny slips of paper, you effectively have much you can ask of the society around you - and that is power. The Alchemist-Engineers know this, so the jig in title insurance is really no different than the funny business that took place during the "Golden Age" of loan origination – they both follow what we might call the "the Mozilo principle".

How could we look at the addicts without looking at the enablers? Where are the insurance regulators? We marveled at the discovery that there may well exist an entire insurance industry that is predicated upon the complete lack of any sort of actuary role in it's calculation of risk, or oversight in it's conduct of business, an entire sub-species of the insurance animal where policy payouts are unheard of. In such an industry it's easy to imagine that there would be total lethargy, apathy, and greed and accordingly there is.

Further to this point, it's important to note that Bevilacqua did not just turn up yesterday, he turned up five years ago - his case was never really a true legal question, it was always a business question.  It seems more business is conducted inside a court room than in marketplaces nowadays - we wonder what the chinese must be thinking of the efficiency of this model.

It could all come tumbling down suddenly

The banks settlement negotiations with the 50 states AG has focused on refinancing as a solution; why? Because refinancing ratifies, and puts good paper over bad fraudulent paper. As pointed out in "On the ethics of mortgage loan default" – that's a bad deal for homeowners. Taking an asset with bad pricing, and which had a commensurate and corrupt security interest, and improving and perfecting the security through "refinancing", but leaving the bad pricing in place (which is a direct derivative of fraud) is not a good deal for the homeowner. For a modest decrease in the monthly mortgage payment, the homeowner pays the price of somebody else's fraud (although he may not know it).

Further it may be a mistake to speak of buyers of these foreclosure properties as "innocent third parties" as the banks suddenly (at least since Bevilacqua emerged) are fond of doing. Is this characterization really accurate? We know that about two-thirds of real estate transactions over the years have been foreclosure properties; we also know that a good deal of those transactions were cash deals. Does that sound like "the Joneses"?

The buyer of a foreclosure is somewhat more enterprising than his average home buying family man cousin who buys a home because he happens to like it. The buyer of a foreclosure is by definition more of an investor than someone merely looking for shelter. This is especially true in the case at hand – Bevilacqua – who was a developer, and who turned the subject property into four separate units with four separate buyers – probably at a profit to himself, but at great harm to the buyers. In this way, the banks fraud is magnified, through the buyers of foreclosures who are more often than not, enterprising, investment minded persons, with the ability to move at greater speed than the average homesteader.

Of course nearly all home buyers are functioning in some way as investors, in so far as the overwhelming majority are purchasing the largest investment of their life. So the buyer must do proper due diligence, regardless of their place on the investor spectrum. Where there is a failure to do even basic due diligence, there is at least some accountability. However, it is not as great as the accountability of the title insurers, or the bank-sellers, who maintain superior knowledge about the "back-room dealings" of these transactions.

We only point this out so that prospective buyers of foreclosures (and also all homeowners) will pause for a moment and consider the possibilities that Bevilacqua gives rise to. The buyers of foreclosures at least are not entirely innocent as has been suggested by an industry which seeks to persuade a panel of judges and deflect away from itself the possibility of legal reprisals. Why else would the American Land title Association, and the Mortgage Bankers Associations along with their TBL's (Tall Building Lawyers), spend the time, energy and resources to file lengthy Amici Curiae briefs in Bevilacqua? It was a like a free legal defense for a small-potatoes property developer that no one had ever heard of.

It's worth contemplating before making out that next mortgage payment. Maybe "home ownership" in the very near future simply means staying right where your at – or in the spirit of the protesters which has gripped our world - "occupying" the house your already in.

Can a valid policy be written on securitized mortgage loans in light of Bevilacqua? Without the enablers, no transactions would or could ever get done. Without policies getting written, no real estate would be transacted, and yet another Pyramid would come tumbling down.

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Wed, 10/19/2011 - 23:30 | 1791422 Terminus C
Terminus C's picture

Horry fuck Batman... shit storm ahead!

Wed, 10/19/2011 - 23:46 | 1791454 DoChenRollingBearing
DoChenRollingBearing's picture

YES, Terminus, a VERY UGLY problem.

Good catch Tyler!

Thu, 10/20/2011 - 00:29 | 1791552 Harlequin001
Harlequin001's picture

Well DoChen, I now rent, and my money's in gold and silver in Switzerland so,

'couldn't care less' really...

Thu, 10/20/2011 - 00:58 | 1791602 Philippines
Philippines's picture

Seems you couldn't care less about your gold and silver... unless you're living close to the Swiss bank to get it at anytime ;)

Thu, 10/20/2011 - 01:13 | 1791629 flacon
flacon's picture

It's like I said on another thread. It's a matter of OWNERSHIP...


You tell your son to go to the store to buy a bag of wheat. But you don't have money to pay for it, but you give him a note that says: "Dear store owner, I promise to pay you for this bag of wheat when I get the money". Your son goes to the store, and presents the note to the store owner. He gives the bag of wheat to your son. Half way home, your son puts down the bag of wheat to rest a while. Then he has a thought: "WHO OWNS THIS BAG OF WHEAT?".  
1. Who ever is in posession owns it 
2. Who ever has paid for it owns it. (does a promisary note connote "paid in full"?)
3. Who ever has produced it and has NOT received just compensation owns it.  
There are three owners of the bag of wheat, but only one mouth will eat it.

Thu, 10/20/2011 - 01:57 | 1791686 Michael
Michael's picture

What a fucking mess. This bankster fraud has got to be stopped. How much longer are we going to have to live with these improperly functioning markets?

Looking forward to the second tsunami wave of foreclosures in prime and jumbo.

Prime-X bitches!

Thu, 10/20/2011 - 04:17 | 1791754 Michael
Michael's picture

Everyone is going to vote for Ron Paul just to piss off the establishment!

Thu, 10/20/2011 - 05:24 | 1791778 jeff montanye
jeff montanye's picture

there is nothing more powerful than an idea whose time has come.

Thu, 10/20/2011 - 05:42 | 1791784 clymer
clymer's picture

Aaahhhh. The banking establishment has not yet imagined what the future might men for them..!


Thu, 10/20/2011 - 09:40 | 1792518 Philippines
Philippines's picture

Agreed. If/when TSHTF, if you don't have your gold/silver/food/whatever in possession, you're too late. Especially if your stuff is overseas lol

Thu, 10/20/2011 - 06:47 | 1791820 MarkS
MarkS's picture

Maybe, maybe not.  MA SJC is NOT all that highly respected.  On their rulings a landlord usually has to go for a year before they can have a non-paying tenant removed from their property.  They are a bunch of clowns that continuously make politically active rulings.

While the foreclosure sales and robosignings were atrocious, the vast majority were likely foreclosed on for cause.


Thu, 10/20/2011 - 08:04 | 1792025 WonderDawg
WonderDawg's picture

While the foreclosure sales and robosignings were atrocious, the vast majority were likely foreclosed on for cause.

Cause isn't the issue. The issue is, does the entity enforcing the foreclosure actually have "interest", i.e. the right to foreclose. In many cases, evidently, no they don't, because the mortgage has been resold and resold again, so the actual owner of the mortgage has been clouded, and conveyence of title has never been properly recorded.

Thu, 10/20/2011 - 08:17 | 1792098 Crisismode
Crisismode's picture

It matters not whether a property was foreclosed "for cause."


If the title was not clear, throughout the entire history of the transaction, the conveyance is fraudulent.



Thu, 10/20/2011 - 09:51 | 1792582 MachoMan
MachoMan's picture

A fraudulent conveyance is something altogether different...  this would be a void conveyance...  you're using legal terms of art...

Wed, 10/19/2011 - 23:31 | 1791427 Cliff Claven Cheers
Cliff Claven Cheers's picture

Fuck it.

Thu, 10/20/2011 - 01:01 | 1791608 unununium
unununium's picture

But, but, but ... Calculated Risk is a blog, and it tells me there is no systemic problem with foreclosures!

Wed, 10/19/2011 - 23:39 | 1791443 b-rad-is-rad
b-rad-is-rad's picture





You are being misleading. This does set precedent, for "Massachusetts."

You implication that other states have and will follow their lead is, well misleading.

Most states will not follow this precedent. Many states have already ruled this out.


You also ignore the fact the Mass legislature can overule this legislation, and I will not be surprised if they do so very soon.


Normally I agree with what you say, but you are off base with your assertion here. Way off.


Wed, 10/19/2011 - 23:50 | 1791463 JLee2027
JLee2027's picture

Most states will not follow this precedent. Many states have already ruled this out.

I can't agree with that.  The foreclosures must first be called illegal and then the sales can be overturned. Mass is way ahead of most states.


You also ignore the fact the Mass legislature can overule this legislation, and I will not be surprised if they do so very soon.

Legalize what the court declared as fraud you mean?  I don't think so - do you want riots in the streets?

Thu, 10/20/2011 - 00:31 | 1791557 b-rad-is-rad
b-rad-is-rad's picture

By who?

The people who took out loans they couldn't afford and didn't make their payments...(who the banks foreclosed on but fucked up the paperwork.)


Or the people who bought their dream house for their family (with the money they saved and busted their asses for) who are now being kicked out of their homes?


Which people are going to riot over this?


There is tons of shit to be pissed off at the banks about. This is not one of them. Almost all of the defective titles were due to minor paperwork mistakes, and everyone foreclosed upon (with a few VERY rare exceptions) were not paying their mortgages and living in their houses payment free for months/years before being foreclosed on.

Thu, 10/20/2011 - 01:02 | 1791596 FinalCollapse
FinalCollapse's picture

Lex retro non agit.

They can make new laws, but the new laws cannot go backwards. Contract is a contract. 

There a two title theory systems in this country. The Mass precedent will apply to significant part of USA (New York, Illinois, Maryland, Florida, etc.). SHTF now.

Thu, 10/20/2011 - 01:05 | 1791618 b-rad-is-rad
b-rad-is-rad's picture


Thu, 10/20/2011 - 10:02 | 1792635 MachoMan
MachoMan's picture

I'm not sure who else on this board has won an appeal from their highest state court this year representing the buyer at a foreclosure sale, but I have...  I cannot see any difference whatsoever in this Massachussetts decision and well established law in my state...  If a judgment is void, then any transactions stemming therefrom are likewise void.  A void transaction cannot be cured.

Generally speaking, there is an important decision to make between "void" and merely "voidable" judgments.  In the event service was not properly made upon an adverse party, then the judgment would be "void" (due process failure).  However, if that same person had notice of the proceeding, then the judgment might be merely "voidable."  Generally speaking, in the event a judgment is anything other than void ab initio or fitting into particular categories, then the party seeking to set aside a judgment must show a "meritorious defense."  In this case, that would be that the party foreclosing did not have standing.  [this requirement is implemented for the policy reason of judicial expediency given there is no reason to over turn a previous judgment so that a party may lose the lawsuit twice].

However, there is also a very important exception to the requirement that a meritorious defense be shown...  fraud upon the court.  Where in order to foreclose a party has to swear and affirm to the court that it has standing to foreclose, but yet it has no such standing, then you've got a pickle.  Where fraud upon the court can be shown, generally speaking, the judgment is void and no meritorious defense need be shown.

Again, I see nothing in the bullet points of this article that lead me to believe this case sets any unique precedent...  my guess is that most all states have made similar decisions over the last few decades...   

Thu, 12/15/2011 - 19:21 | 1985402 jcaz
jcaz's picture


When you get to your 3rd year of law school, you'll start getting a clue.....

Thu, 12/15/2011 - 19:43 | 1985486 MachoMan
MachoMan's picture

He would be the first law student to get a clue while in school...  maybe after about 7-8ish years of practice he'll finally get it...  like most lawyers...  although some never do.  Too bad he isn't going to get a job after graduation...

Thu, 10/20/2011 - 01:00 | 1791606 bruinjoe93
bruinjoe93's picture

It doesn't change the fact (according to Massachusetts) that the banks broke the law when they failed to transfer the title correctly.

Thu, 10/20/2011 - 02:27 | 1791713 JLee2027
JLee2027's picture


This is not a "paperwork" issue.  It is massive fraud, and the MASS SJC won't play along.

Thu, 10/20/2011 - 08:06 | 1792040 Calmyourself
Calmyourself's picture

While I agree it is a fraud issue.  The banks once again took shortcuts to save money and circumvent state law, they are above it after all..  This will be papered over Brad is right, here is no one outside of these digital walls who will do anything.  The anesthesia machine reigns in this country..

Thu, 10/20/2011 - 08:23 | 1792129 Crisismode
Crisismode's picture

Don't forget that there are thousands of lawyers who stand to make massive fees litigating the banks.


They will not be turned aside from their rightful rewards.

Thu, 10/20/2011 - 10:19 | 1792687 MachoMan
MachoMan's picture

This isn't a fraud issue....  fraud on the securities side maybe...  but, on this side, who is the fraud against exactly?  How does a down stream mortgagee defraud a homeowner when there is no privity between the two?  Are you alleging a civil conspiracy between creditors to shoot themselves in the feet?  [this fact alone is probably enough to get the charge dismissed via 12b6].

Remember, the fraud in order to render a previous judgment void must be ON THE COURT, not on the person. 

The court does not prosecute a cause of action of "fraud"...  it has no capacity to do so...  it has inherent contempt powers...  but for any fruitful use of the word fraud, this could only be a cause of action for the homeowner...  and none exists.

I know I've harped on it in the past, but people on this site have to learn the difference between a cause of action and a defense...  a cause of action is to be used as a sword, in an offensive measure against your opponent...  a defense is something you assert as a shield to prohibit or mitigate the effects of the cause of action of another.  There is no cause of action for a homeowner for "lack of standing"...  this is a defense to a foreclosure action...  it's not a doorway, necessarily, to a free house or an unencumbered house, it's simply a stopgap measure to defend against a foreclosure action.

Wed, 10/19/2011 - 23:55 | 1791471 Miles Kendig
Miles Kendig's picture

Submitted by Greg Lemelson of Amvona

You also ignore the fact the Mass legislature can overule this legislation...

THIS legislation?  It's a court ruling.  Strike that, THE SUPREME COURT ruling not only on property rights in the Commonwealth, but everything else at state level.

Thu, 10/20/2011 - 00:08 | 1791502 b-rad-is-rad
b-rad-is-rad's picture



with legislation*


sorry for the confusion.

Thu, 10/20/2011 - 00:13 | 1791512 b-rad-is-rad
b-rad-is-rad's picture

love the down vote for correcting my typo. lol. sorry, long day at law school, and I've had some wine.

Thu, 10/20/2011 - 00:16 | 1791517 Cliff Claven Cheers
Cliff Claven Cheers's picture

Well that fuckin explains it all - a fucking law student.

Thu, 10/20/2011 - 00:17 | 1791522 Cliff Claven Cheers
Cliff Claven Cheers's picture

A Constitutional Lawyer, a Communist and a Muslim walk into a bar.  The bar tender says "What can I get you Mr. President?"

Thu, 10/20/2011 - 00:26 | 1791544 delacroix
delacroix's picture


Thu, 10/20/2011 - 00:20 | 1791530 b-rad-is-rad
b-rad-is-rad's picture

Eh. You got me there. If it makes you feel any better, getting the MBA at the same time, I don't plan on practicing. Just trying to get in on the student loan bubble before, well you know, Pop.

Thu, 10/20/2011 - 00:25 | 1791543 Cliff Claven Cheers
Cliff Claven Cheers's picture

Oh your going to be one of those extra devious fuckers.  I may need to hire you in the future.

Thu, 10/20/2011 - 10:24 | 1792745 MachoMan
MachoMan's picture

As someone who has both...  I would say you are crazy at this juncture to attempt it on credit.  I would not have even started the path so many years ago if I was going to have to borrow to do so...  and I was oblivious to many of the ills of the maco economy.  Now it is suicide.  Hope you have your job lined up already.  Also hope your undergrad degree is in something more useful than basket weaving/philosophy...  you might need it.

PS, the combo J.D./MBA is not a real MBA...  go get a real, stand alone MBA not that truncated bullshit...  not that I fault you for diving at the cheapest paper.

Thu, 10/20/2011 - 00:34 | 1791560 Miles Kendig
Miles Kendig's picture

Make sure you get the whole big three and secure the CFA to go with...


Thu, 10/20/2011 - 01:25 | 1791650 jdrose1985
jdrose1985's picture

You don't plan on practicing law?

I thought all law abiding citizens practiced law?


Thu, 10/20/2011 - 07:00 | 1791834 j0nx
j0nx's picture

Haha you think that this foreclosure ruling will go nowhere yet you seem to think that you won't have to pay your student loans back because the bubble will pop? ROFL. Good luck with that. Sounds to me like you need to study harder in law school.

Thu, 10/20/2011 - 09:46 | 1792559 b-rad-is-rad
b-rad-is-rad's picture

I never said that dumbass. You need to practice your reading comprehension.

Thu, 12/15/2011 - 19:23 | 1985411 jcaz
jcaz's picture

LOL- sorry dude- no decent Law school allows you to "diversify" while you're attending their school-

Why not add Med school next quarter?


Wed, 10/19/2011 - 23:57 | 1791481 Careless Whisper
Careless Whisper's picture

None of the Tylers wrote this. It is a re-post from another blog. The article was written by a non-lawyer about legal issues. Pure trash. The Court ruled that you can't sell something that you don't own. What a surprise. What happens in Massachusetts, stays in Massachusetts. The writer claims that other states look to Massachusetts courts for guidance. Laughable!

Thu, 10/20/2011 - 00:05 | 1791499 mt paul
mt paul's picture


Thu, 10/20/2011 - 00:19 | 1791528 Careless Whisper
Careless Whisper's picture

Un poco más de palabras y se puede componer una frase.

Thu, 10/20/2011 - 00:32 | 1791558 Miles Kendig
Miles Kendig's picture

Stir the pot CW.

good to see yaz

Wed, 10/19/2011 - 23:59 | 1791487 john39
john39's picture

True, each state will handle this mess under it's own laws. Decisions from other states might get looked at, but are not binding. These issues are incredibly complex from a legal standpoint. We are inuncharted waters. That alone hurts the real estate market.

Thu, 10/20/2011 - 00:35 | 1791565 wisefool
wisefool's picture

Mass. is judicial, many other states are not.

Can you blame young people for not wanting to buy a home?

  • in any condition
  • at any price
  • at any tax credit "if you buy on thursdays in odd number months"
  • at any promise that property taxes will go down
  • at any promise that the school district is great
  • at any commute from the temp job they might have for  next 6 months
  • at any interest rate that helecopter ben sets
  • etc.

And most of these cases have institutions involved that no longer exist. And we have new, never lived in construction, on ultra pure titles, sitting empty in ghost towns.

And homeless I stood near a thousand homes. Hungry next to a thousand tables.

Thanks Sen. Dodd and Mr. Mozillo! It was a great Idea to put Dr. Krugman in charge of bartertown!

Thu, 10/20/2011 - 00:08 | 1791504 Cliff Claven Cheers
Cliff Claven Cheers's picture

b-rad quit being such a downer and the let the guy tell his story. 

Thu, 10/20/2011 - 00:16 | 1791518 b-rad-is-rad
b-rad-is-rad's picture

Just trying to shed some light on a bullshit story/premise. Thought what this site was about, cutting through the bullshit you hear in the media 24-7.

Thu, 10/20/2011 - 00:21 | 1791531 Cliff Claven Cheers
Cliff Claven Cheers's picture

I'm just giving you some shit, it is called love around here.

Thu, 10/20/2011 - 00:34 | 1791563 b-rad-is-rad
b-rad-is-rad's picture

I shit you too man.

Thu, 10/20/2011 - 07:06 | 1791837 j0nx
j0nx's picture

Why don't you two get a room.

Thu, 10/20/2011 - 00:26 | 1791547 caconhma
caconhma's picture

It appears that ZH is enjoying the disintegration of the US economy and legal system.

ZH salivates the situation when people who took advantage of the legal system using fraud and misrepresentations and refusing to pay their mortgages will be highly rewarded.

ZH logic is puzzling at least.


Thu, 10/20/2011 - 00:49 | 1791582 Cliff Claven Cheers
Cliff Claven Cheers's picture

Mocking it is all we've got left.

Thu, 10/20/2011 - 05:36 | 1791782 Ronaldo
Ronaldo's picture

ain't that the truth

Thu, 10/20/2011 - 07:30 | 1791882 Schmuck Raker
Schmuck Raker's picture

The disintegration of the US economy and legal system is a continuing process begun years before ZH was here. Rather than enjoying that, I would suggest TD, and ZHers in general, are actually cheering the transparency we are finally starting to see, the light being shed into the darkest corners of the realm of TBTF/TPTB - wishing that our more ignorant fellows will soon come to realize what is actually happening to our country, and world. And then, we can HOPE...

Thu, 10/20/2011 - 07:50 | 1791965 Raging Debate
Raging Debate's picture

Shooting the messenger? I see a number of motivated people here shining light on the situation. It is called truth. A group can't ever solve a problem without facts. To me, the ZH people just have some extra confidence in preparation for hard times.

So they take a victory lapse for presciense once in awhile in exhange for a lot of toil at their own expense to provide facts and event based news.

Destroying the rule of law which is a method of escaping with bags of loot and getting off Scott-Free (actually rewarded) creates law of the jungle. If some feel they are afraid of radicalism then you should be. Try starving your 17 year old son by stealing his lunch money every day and see what eventually happens.

Thank you for reporting this piece. Even Jay Rockefeller misses his event-based news and facts these days.

Thu, 10/20/2011 - 12:23 | 1793456 IH10
IH10's picture

You're 100% clueless dude.  The banks are the ones that engineered this fraud so they could sell the same bundles of mortgages over and over.  Read my post below. You think it was a coincdence they were giving loans to anyone with a pulse last decade.  Use your head. 

Thu, 10/20/2011 - 07:42 | 1791926 i-dog
i-dog's picture

"You implication that other states have and will follow their lead is, well misleading."

It is your reply that is misleading! The guest article (not written by Tyler, BTW), does not imply anything beyond what is normal: That other superior courts will either tend to follow this ruling or make a strong case against it. Superior courts take all cited precedents into account, so that they don't make absolute fools of themselves.

Which states have rejected it? And why?

Thu, 10/20/2011 - 07:55 | 1791979 Cheyenne
Cheyenne's picture

What's to overrule? This is a straightforward application of black letter law. Without a promissory note, the foreclosing plaintiff has no legal injury, i.e., the plaintiff lacks standing. Standing is a requirement for an action to qualify as a "case or controversy" under article III of the constitution. With no case or controversy before it, the court lacks jurisdiction to rule. Without jurisdiction, all of a court's subsequent rulings--including the foreclosure judgment--are void as a matter of law.

If a judgment is void, it's open to subsequent collateral attack as a legal nullity. That's essentially what happened here. This case the logical extension of Ibanez.

A legislature (article I) has no business tinkering with the boundaries of article III under separation of powers.

Thu, 10/20/2011 - 09:49 | 1792570 b-rad-is-rad
b-rad-is-rad's picture

Article three courts are federal courts. Dumbass.

Thu, 10/20/2011 - 12:19 | 1793433 IH10
IH10's picture

It's not misleading at all.  The state of Utah is the polar opposite of Mass in about every way imaginable, and state judges here have been fighting this fraud / ponzi tooth and nail.  No, it's only a matter of time before the money trail has been followed and this thing blows sky high.  Everything is a conspiracy until it's not.  It's really simple.  When MERS was engineered they took land title laws going back to the Old World and tossed them.  EVERY mortgagor has the right to know where their money is going when they make a payment for this very reason.  Only a fool could not see the reason banks bastardized these mortgages beyond all recognition was to facitilate selling these same bundles of mortgages to different investors over and over.  In reality, many of these mortgages have already been paid via the ponzi and then they are going back to the mortgagor for a final round of payment.  When will bankers do jail time in this country?

Wed, 10/19/2011 - 23:40 | 1791444 X.inf.capt
X.inf.capt's picture

sh*t, meet fan....

its about time....

Wed, 10/19/2011 - 23:40 | 1791446 Mitch Comestein
Mitch Comestein's picture

Title insurers are fuuked.

Wed, 10/19/2011 - 23:56 | 1791455 Miles Kendig
Miles Kendig's picture

They've been fucked.  Chris Whalen has been writing TONS on that.

This will go directly to servicers for more than 85% of the cases  I wonder if they'll try and push it off onto FNM/FRE as much as possible as another bail-out?  Or better yet, the fed since they hold more than a trillion in MBS

Wed, 10/19/2011 - 23:44 | 1791450 Miles Kendig
Miles Kendig's picture

Smoke 'em if ya got 'em

Just because fraud is not only endemic, but systemic does not make it too deep to root out.

Now we know where QE3 is going

Wed, 10/19/2011 - 23:50 | 1791462 Snidley Whipsnae
Snidley Whipsnae's picture

Soverign nations who have no, or weak property rights are usually known as 'banana republics'.

1) No property rights... or, property rights that are now in question.

2) No jobs and no drivers of job creation on the horizon.

3) An economy based on paper issuance based on far too little tax revenue to back up the paper

4) A world reserve currency also based on paper issuance backed by 'the full faith and credit of the government'... but not enough taxes to back it up.

5) A financial system that does little or nothing for the real economy...and, in fact, has now become a burden on the real economy.

6) A justice system that will not prosecute the worlds biggest theives while imprisoning minor criminals for using 'illegal substances'...or, in some instances handing out life terms for 'three misdemeanor strikes'. After the creation of the worlds largest private prison system that has more citizens per capita locked up than any other nation on the planet.

hmmm... Perhaps it's time for a new catagory... 'Super Banana Republic'?


Thu, 10/20/2011 - 00:40 | 1791569 Harlequin001
Harlequin001's picture

it's called F.R.E.E.D.O.M!

Thu, 10/20/2011 - 00:54 | 1791591 Cliff Claven Cheers
Cliff Claven Cheers's picture

The ironic thing about what Snidley has pointed out, he has now become an enemy of the state for the saying the truth.

Thu, 10/20/2011 - 03:12 | 1791732 Harlequin001
Harlequin001's picture

We all have, or will, if you are a patriot of course...

Thu, 10/20/2011 - 07:00 | 1791835 Snidley Whipsnae
Snidley Whipsnae's picture

Cliff... I would rather die for telling the truth than live under the tyranny that I see now...and, it's only going to get worse.

An enemy of the state? Damn right I'm an enemy of the azz hats that passed the Unpatriot Act, decided we needed continuous wars in multiple countries, decided that torture of citizens and 'terrorists' (now one and the same) is ok, let Wall St bankers wreck the world economy, ad infinum.

The azz hats are hoping that they can frighten citizens of using their right to free speech. That's what this entire 'terrorism' scare is about. I feel sure that we could all be classified as terrorists now...and if not now then soon.

I've been 'speaking out' since Viet Nam and am not going to stop now.

Go OWS... and occupy DC also! Tell the azz hats 'I'm mad as hell and I'm not gonna take it anymore!' 


Thu, 10/20/2011 - 01:06 | 1791620 Antipodeus
Antipodeus's picture

'Banana Superpower' ?  ;=))

Thu, 10/20/2011 - 02:43 | 1791717 i-dog
i-dog's picture

'Super Banana Power' is more like it.

Thu, 10/20/2011 - 06:57 | 1791830 spankfish
spankfish's picture

"Super Banana Power"... isn't that a frozen  protein drink?

Thu, 10/20/2011 - 07:15 | 1791843 OldPhart
OldPhart's picture

Yay!! We're 'special' again.  Now let's find us some 'super' friends!!

Thu, 10/20/2011 - 07:15 | 1791844 daily bread
daily bread's picture

A banana republic with more nuclear weapons than all other nations on earth.  This banana is not to be laughed at.

Thu, 10/20/2011 - 13:36 | 1793823 Raging Debate
Raging Debate's picture

It's funny but Super Banana is actually the reflection of a Super Pyramid. And that pyramid is a paradigm in how mankind builds any organization. For several hundred years we have been using a mix of 3d pyramid tools and 4d box tools. The innovations created as tools are a direct reflection of mankind's evolutional progress.

The 3d pyramid era has entered its final closing period. Man and religions confuse the ending of this era with the end of the world. Read this if you actually want to 'get it':

Thu, 10/20/2011 - 08:22 | 1792122 moneymutt
moneymutt's picture

We are now becoming a banana republic because that is exactly what a few connected parasites, those that get rich off valueless activities, politicos taking bribes, businesses get bloated contracts or govt Sui widows, finacial guys making guaranteed returns on taxpayer lent money etc...those folks want us to be more like a banana republic, it's good for their line of "work"

Listen how they talk, they basically say, plead for us to be more like messed up decking third world nations:

They say we have to lower taxes on rich, and spend less on government functions that serve everyday needs of ordinary people.

They say we should have no govt run social safety net for regular folks that lost money on their retirement savings or are suffering because there is no return on investments whilemthey say we should bail out connected crony businesses and banks, give them 0 interest loands that they can buy tbills with, make guaranteed returns.

They also say we must reduce of labors wages so we can be competitive with third world nations labor, they don't want us to consider how, say, German or Japan manages to massively export, have a robust business economy even while their workers, their middle class makes great wages, has great benefits. Instead they suggest we emulate Vietnam and have our workers make wages lower than Chinese workers.

They want to dismantle public education, just like most third world nations, where kids only go to school, even elementarynschoool, if their parents can afford to pay for private school, so there is little opportunity to break out of poverty.

They want regulations (policing of fraud, risk at taxpayer expense etc) to go away. That way rich can violate contracts, committ fraud, ciliate anti trust laws without being held into account. Meanwhile, the want tough on crime (street crime, petty drug use etc) and massive prison system.

They want taxpayers to fund overpriced wasteful govt programs like massive defense industry, unnecessary wars, massive private prison complexes holding illegal immirpgrants rather than deporting them so that they can make money off of building weapons, prison beds etc, just like a bad banana republic dictator giving his friends and cronies special contracts to build repressive army. They want tax ayes to waste a billion dollars, so they can make million, they don't care how valueless and bloated and hard on the countries finances it is. But they sure don't want to pay taxes to support these wasteful govt contracts.

Wed, 10/19/2011 - 23:51 | 1791465 Frank N. Beans
Frank N. Beans's picture

house of cards , bro, house of cards.

Thu, 10/20/2011 - 00:21 | 1791532 upWising
upWising's picture

Cards made out of rotten banana skins,  Be careful!  Don;t slip and fall.

but above all....

Wed, 10/19/2011 - 23:51 | 1791467 Jay_Son
Jay_Son's picture

This is not news, the court just stated long-standing law.  Most people don't pay attention, that's why it seems like it might mean something.  For subsequent purchasers of foreclosed properties, it might mean something...might.  For title insurers, they may have to charge a little more per policy.  Get your shit straight people...also, see the comment from B-rad-is-rad, its spot on.

Wed, 10/19/2011 - 23:53 | 1791468 Yen Cross
Yen Cross's picture

 That read took a bit. I feel like a " Vampire", made a " open ended contract".

      With Humanity!




                           Who negotiated that deal?

Wed, 10/19/2011 - 23:52 | 1791469 spencer
spencer's picture

blah blah blah

yeah right, We've Got A Problem - you wrote a book on issue that could fit a page.

Thu, 10/20/2011 - 13:41 | 1793875 Raging Debate
Raging Debate's picture

Spencer. Your a conceptual level thinker but don't have enough consideration to explain the process of how those at the top of the pyramid push the wedge issues down onto the population. Shame on you

Wed, 10/19/2011 - 23:52 | 1791470 AAA21
AAA21's picture

Uuuf!  Most posts on Zerohedge are good (particularly Tyler D.'s), but this absolute baloney!  None of this will hold.  What is funny is that while everyone is crying for the poor boob that got foreclosed on, they all seem to forget one little detail:  THE GUY WAS NOT PAYING HIS MORTGAGE.  Anything else is irrelevant.

Wed, 10/19/2011 - 23:59 | 1791486 Miles Kendig
Miles Kendig's picture

It's called THE RULE OF LAW for reason.  What the Supreme Court of Massachusetts ruled is that such actions are fraud, hence the remedies.

Thu, 10/20/2011 - 00:06 | 1791501 sunnydays
sunnydays's picture

So it is irrelevant that the banks have commited massive fraud upon the people who purchased homes but also all their investors?  They knowingly set up MERS to save themselves billions on transfer fees of which they were charging the homeowners.  So I guess, all the bank fraud and illegal activity is okay in your book, so you think "screw the homeowner" or anyone else who signed what they thought was a legal contract that was actually fraud through and through by the banks.    So then any contract in your opinion should always be upheld for a bank even if it is not legal and it is based on fraud.  That would make all contracts null and void for the individual.    Oh, I assume you are saying "screw all the funds, retirement accounts and so on" that invested in MBS.  Oh lets not forget this fraud is what is actually causing countries to go under too.  So screw all those countries and people who are suffering due to the bank fraud?  

Thu, 10/20/2011 - 00:11 | 1791509 Cliff Claven Cheers
Cliff Claven Cheers's picture

Right on. This whole enchillada is an Epic Fucking Fail!  All this after the fact shit still never addresses the original fruad that is now taking down countries.

Thu, 10/20/2011 - 00:30 | 1791554 eatthebanksters
eatthebanksters's picture

Hey AAA21, I have one question for you...if the lenders had made prudent loans (like they are suposed to do) would our country be in the current economic situation?

Actually, I have on more question for you...would Angelo Mozillo, Jamie Dimon, Ken Lewis and/or any other senior executive of a lender that made subprime loans, have made those subprime loans with their own money? 

Thu, 10/20/2011 - 00:48 | 1791580 Peter_Griffin
Peter_Griffin's picture

Crying for the one who got foreclosed on?  How about the person who bought the foreclosed property?  What this says is nothing got sold to me at a great cost.

Thu, 10/20/2011 - 01:06 | 1791621 Moon Pie
Moon Pie's picture

AAA21 is a bot bitch.  Has to be and should be immediately downgraded to Baa. 

YOU FUCKING TOOL:  Of course he wasn't making payments.  Maybe he elected NOT to.  That is not the issue, yet that is exactly what the EVERY argument the banks, MERS and foreclosers make in court.  They shout loudly, too, at the judge, when what they are really asking the judge NOT to do, is to consider examining the underlying documents and conditions.  Sub Prime, Pay Option, No Doc, etc. loans that were made.  Yeah, some people took advantage, but some just wanted a little better payment based on the pitch from the "loan officer" they were sped-dialed to.  Some saw their 300k casa go to 600k...based on what the bank's "loan officer" and its minions said.  That same casa is selling for 189.999.99 on fucking eBay now.

FUCK YOU.  The "originators" who shillled TBTF money are ALL gone now.  Countrywide, et. al.  Now the TBTF's are left defending their whore's actions and are rightly being ruled against.


Wed, 10/19/2011 - 23:56 | 1791480 Lester
Lester's picture

Motherfuckers who would buy foreclosed properties during this real estate shitstorm deserve to reap what they have sewn.


What we must end in America is the prevalence of destruction of one party to provide a gain or profit to another.

Void all the fucking sales.  The sellers who likely didn't own the property because of CDO and failure to preserve title chain are guilty of ruining both parties whom they owed a fiduciary duty...

Thu, 10/20/2011 - 01:05 | 1791612 MisterMousePotato
MisterMousePotato's picture

sowed? sown?

Wed, 10/19/2011 - 23:58 | 1791485 YesWeKahn
YesWeKahn's picture

As always, this must be bullish, right?

Thu, 10/20/2011 - 00:01 | 1791494 Miles Kendig
Miles Kendig's picture

Actually, yes.  this brings us one step closer to getting a true clearing event so the RRE market can find its bottom and rebuild.

This is why there is supposed to be such a thing as failure in capitalism.  Both for borrow and lender.

Thu, 10/20/2011 - 00:16 | 1791519 kito
kito's picture

Not for gold. Dowwwwwwwnnnnnnnnn it goes. Get out while ya can.

Thu, 10/20/2011 - 00:45 | 1791577 Harlequin001
Harlequin001's picture

Absolutely old stick, and make it quick before it goes back up!

Wed, 10/19/2011 - 23:59 | 1791490 bill1102inf
bill1102inf's picture

They are making the largest "DURABLE GOODs" PURCHASE of their lifetime.  Not investment.  

99% of this article is great.

The other 1% makes it sound like buying overpriced FSBO properties from the origonal owners is the only way to get a clear title.  I say, fuck that.  If I buy the foreclosure from the bank for cash down the street and the bank thinks they are coming and taking it back,  Im very bullish on Smith and Wesson, Barrett, H&K, etc.


So, now what we have is this, not only have the banks fucked us all, the title companies are the longest cocks in the room??? lovely

Thu, 10/20/2011 - 00:10 | 1791506 Snidley Whipsnae
Snidley Whipsnae's picture

Buy a house, pay for it, make repairs on house as needed, paid for from personal savings...

It's really very simple. My family and I have been living in our house since 1983 and it's a better home today than it was when built.

I see no reason to move unless a job requires a move. Moving is an expensive proposition, even in good economic times.

Put ego in cold storage, sit tight...and avoid all debt.


Thu, 10/20/2011 - 00:48 | 1791581 Harlequin001
Harlequin001's picture

'Im very bullish on Smith and Wesson, Barrett, H&K, etc.' - I normally try to avoid any financial plan that might involve my untimely death, just sayin'...

Thu, 10/20/2011 - 07:21 | 1791851 OldPhart
OldPhart's picture

Is $720 for a 1911 .45 bullish or bearish?

Picking up tomorrow.

Thu, 10/20/2011 - 00:01 | 1791495 jdrose1985
jdrose1985's picture

Wait until everyone finds out that the alleged loans were paid in full when your promissory note was deposited, making it a cash equivalent.

You see, the 30 year payment plan was just an insurance policy in the event that you failed to pay the full value of the property at the closing. Once the first so called monthly mortgage payment was tendered, that was accepted as your ratification of that insurance contract and now you are the debtor, never realizing you've were the creditor the entire time along...

Thu, 10/20/2011 - 00:32 | 1791559 jdrose1985
jdrose1985's picture

“The doctrine of ultra vires is a most powerful weapon to keep private corporations within their legitimate spheres and punish them for violations of their corporate charters, and it probably is not invoked too often… “ Zinc Carbonate Co. v. First National Bank, 103 Wis. 125, 79 NW 229 (1899). Also see: American Express Co. v. Citizens State Bank, 181 Wis. 172, 194 NW 427 (1923).


Stop clinging to your 14th amendment benefits and privileges and begin learning your equitable rights. We have spent our entire lives being batteries powering the grid.

Only knowledge of real truth and enforcement (under protective orders in chambers or you waive it) of your inherent pre-Constitutional rights as outlined in the Declaration of Independance   will set you apart and free.

Thu, 10/20/2011 - 00:43 | 1791575 Cliff Claven Cheers
Cliff Claven Cheers's picture

JD you just responded to your own post.  Did you forget to sign back in as a different user befor you responded?  You employer is not going to like this fuck up.

Thu, 10/20/2011 - 00:56 | 1791600 jdrose1985
jdrose1985's picture

Well thanks for pointing that out, capt obvious.

I've been using the same handle for about 2 years now, and you?

Thu, 10/20/2011 - 01:08 | 1791627 Cliff Claven Cheers
Cliff Claven Cheers's picture

I'm just giving you some shit.  I am on my 4th handle now after almost 2 years.

Thu, 10/20/2011 - 13:50 | 1793966 Raging Debate
Raging Debate's picture

Ya Cliff. Reminds me of Return of the Living Dead: Send more cops... Send more paramedics....

Thu, 10/20/2011 - 00:49 | 1791585 b-rad-is-rad
b-rad-is-rad's picture

;See also*---- lol. Sorry, couldn't help myself. Fucking bluebook. Could be worse, I guess. See blueballs.

Thu, 10/20/2011 - 01:06 | 1791611 jdrose1985
jdrose1985's picture

sure ;)

Thu, 10/20/2011 - 07:10 | 1791839 spankfish
spankfish's picture

It is actually Blue Ball, PA., but it is called blueballs when you have bird in hand.

Thu, 10/20/2011 - 00:01 | 1791496 catacl1sm
catacl1sm's picture

Ruh roh.

Thu, 10/20/2011 - 00:06 | 1791500 mt paul
mt paul's picture

glad i live 

on an ice berg..

Thu, 10/20/2011 - 00:10 | 1791507 knukles
knukles's picture

Betcha it'll all get neatly swept under the rug, as in some asinine convoluted dissimulation of No Harm No Foul, Law of Agency and a whole buncha other Extraneous Garf rotating about Grandfathering, Complexity and maybe even National Security.
Or, the already Bought and Paid For and if Not Bought and Paid For, it Shall Be a Very Profitable Campaign Contributions Season, what with Elections coming up, just Around the Proverbial 24/7/365 Corner, shall deem such to be Inopportume for some Cloudy Reasons, the Rules Changed to Protect the Guilty.

So, society is faced with a choice(s).
Will the Law actually be Enforced Equitably and Fairly, Properly Redressing Eggregious Wrongs or,
Will the Kleptocracy Emerge Victorious Once Again, Literally Acting as Frosting Upon the Cake in the Charade of Grand Theft Country?   

And it shall not be easy.
It shall probably be politicized as much as is possible.  Just think of elections... OWS, etc., gaining traction, a populist Revenge Upon The Manifestly Evil Bankers....
The political Rollerball, Pabulum and Spin. 
Great for the Entertainment of The Peasantry.
High Drama during High Drama Times in a particularly Hypercharged Enviornment.

Nonetheless, will Justice Be Served?
Will America Maintain (for it certainly is not apparetly the case at this very moment) as a Home to a Rule of Law or Perish as Minor Bananna Republics/Empires of the Past?
If it's even hinted at as the latter, the GM and Chrysler fiascos, abrogating secured debtholders rights by the Government shall be in comparison, nothing... the dollar plumet, risk premia expand, money flight form the US at breakneck speed. 

Holy SHit Batman, Indeed.
A Test of the Sanctity of the Entire System.
Of Empire.

Thu, 10/20/2011 - 00:14 | 1791514 Cliff Claven Cheers
Cliff Claven Cheers's picture

I'm leaning towards the Perish as a Bananna Republic.

We have all ready been tested and failed.

Thu, 10/20/2011 - 00:41 | 1791572 jdrose1985
jdrose1985's picture

This has been a banana republic ever since the allodial titles were split in 1933.

The counties and states already hold legal title to everything you've ever registered. Whoops!

Thu, 10/20/2011 - 07:17 | 1791849 spankfish
spankfish's picture

Knukles... from Monty Python's Flying Circus "Nudge, Nudge, wink wink, Say no more".  After all, mobsters have a saying "its never a contract till we say it is".

Thu, 10/20/2011 - 00:11 | 1791508 whaletail
whaletail's picture

Shorten the statute of limitations on adverse possession as carve out for homes foreclosed between x date and x date. It will clog the shit out of the court system, but it would go somewhere to clearing title.

That being said, the secondary effect of chilling title insurance or increasing the price on title insurance premiums will be no bueno for the real estate market. These costs will be spread throughout the states.

This is a great example of Taleb's anti-fragile versus robustness argument. 

Thu, 10/20/2011 - 00:16 | 1791516 TheLooza
TheLooza's picture

This is interesting for MA, but otherwise over-hyped.  As a *gasp* lawyer I can tell you, any litigant in a non Mass. court that comes into court or files a brief citing as binding precedent Mass. supreme court jurisprudence is gonna get fucking yelled at and possibly sanctioned.  If there's one thing courts don't like doing, its making a courageous decision that fucks up the status quo in a way that will further jam the docket.

Thu, 10/20/2011 - 01:04 | 1791579 jdrose1985
jdrose1985's picture


Thu, 10/20/2011 - 01:36 | 1791665 Seasmoke
Seasmoke's picture

no lawyer here, just pro-se......and ive already been yelled at by a stuck up, biased big deal.......she still had to follow the law and motion was denied......

Thu, 10/20/2011 - 03:47 | 1791714 slewie the pi-rat
slewie the pi-rat's picture

it doesn't say that all foreclosed property titles are voided, it simple re-affirms that they are voidable if some aspect of the conveyance lacks legal conformity

other states may have different standards, but who has a right to foreclose & why would need to be addressed somehow, in any locality or proceeding, it seems

CA has trustee sales, but many homeowners are now fighting the trustees in court and adding about a year to losing the ponderosa

Thu, 10/20/2011 - 07:35 | 1791901 i-dog
i-dog's picture

I think your reply is over-hyped! ... there is no mention in the article of binding precedent, only as a precedent (that can be cited in other superior courts to steer subsequent rulings to either follow it or put up a strong argument against it).

Thu, 10/20/2011 - 00:22 | 1791534 Westcoastliberal
Westcoastliberal's picture

Oh yes, this is the aroma of burning banksters. I agree with Tyler, this is the unleashing of the hounds.  How can the 50 minus 7 state whitewash continue in light of this. Bought a previoiusly foreclosed home in the past 5 years? Step up and collect your treble damages + principle.

Thu, 10/20/2011 - 00:23 | 1791535 bill1102inf
bill1102inf's picture

There is enough money sitting in Title Insurance coffers to bail out the United States Of America.  In fact, that was the goal all along.  I mean, isnt that the problem that you see here?



Title Insurance companies collecting $$ since forever, but never paying out claims and able to afford Gulf Stream Jets on the 'float'.  WTF is going on here.

Thu, 10/20/2011 - 00:38 | 1791568 whaletail
whaletail's picture

"There is enough money sitting in Title Insurance coffers to bail out the United States Of America.  In fact, that was the goal all along.  I mean, isnt that the problem that you see here?"

I'm not sure about the first sentence of what's emphasized, above, and I haven't read the decision, but I'm assuming, whether it is explicit in the decision or it simply ran through the Court's head, title insurance was dubbed as the deep pocket who should shoulder the burden. As others on this thread have pointed out, the legislature, in MA and other states, will likely take some sort of action. Because, with the money in those coffers, comes lots of lobbyists (read: cunts with money, hookers and blow)

Thu, 10/20/2011 - 05:15 | 1791776 krispkritter
krispkritter's picture

I'd wager that if this were all dumped in the laps of the title insurers that they'd fold like a house of cards. And then you'd have the banks with a decision that says they don't owe, insurers that are 'bankrupt', and a bunch of taxpayers left holding an empty bag. I'm pretty sure that FedCo is not going to bail out the taxpayer because they've already blown their wad on the banks. (I'm basing part of this on what insurers did in S. FL during Andrew. When left holding the bag on huge claim numbers, most folded or ran. Those that stayed cried 'poor' and recouped their losses on huge increases afterwards.) I'd like to see the banks deal with their own mess for once but I'm guessing they'll go for TARP2 should they have to shoulder that burden. What a clusterfuck.

Thu, 10/20/2011 - 09:41 | 1792524 OldTrooper
OldTrooper's picture

Sorry, Bill.  Check out the latest from one of the largest insurers.

Unfortuantely 5 billion doesn't go as far as it used to.  I'd be surprised if the industry as a whole had more than 15-20 billion - or - about enough to run the government for 2 days - or - enough to pay off 0.14% of the 'official' national debt.  I'm just guessing on the total cash so feel free to provide more accurate information.  But the point is that I don't think these companies have too much cash on hand and the author of this article was wrong about their financial resources.

Let's deal in facts, not hyperbole.

Thu, 10/20/2011 - 14:06 | 1794059 Raging Debate
Raging Debate's picture

Good man Trooper! 10+. The sentiment of what is right or wrong is much clearer than 2008. But problem solving does require facts to complete the half-truths pushed on the people. The devil indeed is in the details. I like to start with the concepts and work down to the issue level and finally details.

Thu, 10/20/2011 - 00:35 | 1791566 palmereldritch
palmereldritch's picture

The what the SJC really meant to say was,

Ya cahn't pahk ya cah heah yoo fahking reetahd

Thu, 10/20/2011 - 00:45 | 1791576 William Murderface
William Murderface's picture

Occupy Hearst Castle...............DIBS!!!!

Thu, 10/20/2011 - 07:22 | 1791856 spankfish
spankfish's picture


Thu, 10/20/2011 - 00:52 | 1791589 wisefool
wisefool's picture

And dont forget about all the college tuition, trips to vegas, new cars, bunga-bunga and more that some -- but not all -- of the folks who were levered up enjoyed, while the foreclosure purchasor was renting and saving cash, that they are now going to loose. Not to mention any additional improvements they have made to the properties since aquisition.

And the banks/servicers/insurere involved were rolled up and no longer exist, after initial bailouts and bonuses though ..... This is not Moral Hazard. This is not slavery. This is one of the first layers of hell.

Thu, 10/20/2011 - 00:56 | 1791598 whaletail
whaletail's picture

Fucking A. When the big willies go free, their crimes are disbursed to the rest (of us). Those that played it smart (sic) get pinched and end-up paying the price, one way or another. Makes me want to occupy stuff.

Thu, 10/20/2011 - 01:32 | 1791661 wisefool
wisefool's picture

I think we are going to have a lot of "Judgements of Solomon" in the next few years. How about if there was fraud, we have the judges monte hall it.

Current and previous owners: We have here the house in question. you can decide between yourselves who gets what is behind 

Curtain A: The house Curtain B: Any currently unoccupied new contruction in the country

If you can not decide amongst yourselves I will award:

Curtain C: The ammount of money that changed hands at forclosure sale + improvements. Redeemable in FRNs (QE3) or the value in gold from fort knox at the spot price on the day of the transaction.

Thu, 10/20/2011 - 00:54 | 1791592 UGrev
UGrev's picture

buy uhaul now!!

Thu, 10/20/2011 - 01:08 | 1791626 Seasmoke
Seasmoke's picture

actually sell it......aint no one going to be buying or selling for the next 30 years

Thu, 10/20/2011 - 07:19 | 1791850 UGrev
UGrev's picture

sell it after the mass exodus from the foreclosed houses. 

Thu, 10/20/2011 - 00:57 | 1791597 bruinjoe93
bruinjoe93's picture

Good bye banks.

Thu, 10/20/2011 - 01:07 | 1791622 Blorf
Blorf's picture

The author should have finished the essay with the answer to the most relevant question raised by this whole shit storm (although it was implied):


Q:  "What is the value of an asset that can't be sold?"

A: $0


That's going to leave a mark on the balance sheet.

Thu, 10/20/2011 - 01:24 | 1791649 Pike Bishop
Pike Bishop's picture

When was the last time you got a stock tip on a hot Title Insurance company? Their margins suck because there is nothing fancy you can do with Title Insurance. Most of the time their basis is a filed legal document. They are looking for liens and esoteric nonsense.

They aren't  personal lines like car and home insurance which isn't hit too bad on cyclicals. when the real estate market craters, TI does too. and remember, it's a one time fee, not an annuity like auto, home etc.

I don't know if they would have to pay off, if their basis was a "fraudulent" legal filing. At minimum they would file a subordinate suit, if they did have to pay out because the document was an intentional fraud. They would go after the fraudster.

What they don't want to lose, which can put them out of business, is a reputation that they miss bad title transfers. Their reputation and "trust" lets them make small, but "easy" money.

As many of us enjoy upset of the status quo, here's the pay-off....

1) Fraudulent foreclosures will have to do a do-over. Everybody will have to be put back to whole as before the foreclosure. the complications will be insane.

2) The bank/serviceprovider will get litigated (and possibly criminal-charged (I know..hopium))

3) But here's the killer.... as a buyer, if there is a huge outbreak of flummuxed titles, and potential legal nightmares for you... How is that going to effect you putting down all your long green on a foreclosure house?

There are some part of 6MM of them out there, plus they are being added to at an alarming rate. that should be good for an extra 10% in home price drops.

Another reason Banks and RMBS holders are going to hate being in the real estate business.


Thu, 10/20/2011 - 02:15 | 1791704 Dirt Rat
Dirt Rat's picture

Title insurance is a highly profitable business. You collect that one time premium, plus search and commitment fees. All goes well and you never hear anything again, AS LONG AS YOU HAVE PERFORMED A PROPER TITLE SEARCH. (Sorry, I had to scream.) These TBTF banks, as well as all the subprime lenders, failed to get proper title searches. You know that first mortgage? Well, it's behind a couple judgment liens and maybe a mortgage or two that were missed. So it's not a first mortgage. Bummer.

When these sorts of things happen, your title insurance company tends to go bankrupt. Like this august insurer way back in 2008 when bad things were beginning to hit the fan.

Thu, 10/20/2011 - 01:26 | 1791652 bankonzhongguo
bankonzhongguo's picture

This is just a little extra water for the NY and CA attorney generals to wet their beaks for the 2012 'end of days' settlements for the smiling banks.

There are so many criminal acts across the entire spectrum of real estate financing since 2001; banks, title insurance, mortgage "brokers," bogus FHA underwriting from the banks, robo-signers, MERS and non-existent assignments, fraudclosure, etc, etc, etc.; that the only solution is to fine the banks a billion dollars per state, say "shame on you," and let them continue with whatever they want.

No single executive or policing authority will ever get their hands around any of this.  The politicians know it. the banks sure know it. So the solution to "pay-off" the power brokers of today so that the banks can move forward with raping the Republic tomorrow.

People complain about "the banks," but you are going to have to make your decision for The Christ.  When are  you going to take it to the; lawyers, apprasiers, title officers, servicers, the bank "regulators," the trustees, real estate agents, the guy mowing the yard for that 2 year boarded-up shadow inventory on your block, etc?  They are all equally complicit in enabling "the banks" to rape the country.

Stop using the banks!  Stop working for the banks!

Shut it Down!

The excuss of 'I am just doing my job' is not going to hold too much more water.

Next time you encounter a lawyer reping some bank in this whole fraudclosure mess - refuse to serve them. Show them out of the door of your home.  Throw a drink in their face.

Make a difference. Let them know THEY are doing a shitty job being a human being.

Its not just "the banks."  Its a host of other creepy-agents that are making this all happen on a practical level. 

Pick a side.

Thu, 10/20/2011 - 01:32 | 1791659 virgilcaine
virgilcaine's picture

Makes you want to go buy a house..not..

systemic re failure.

Thu, 10/20/2011 - 01:32 | 1791662 Seasmoke
Seasmoke's picture

Ding-Dong.....Hello , i love all the upgrades you made to the house.......Now please leave !

Thu, 10/20/2011 - 14:16 | 1794125 Raging Debate
Raging Debate's picture

Ya Seasmoke and don't forget skimming a large portion of productive labor to even afford that first pad.

Thu, 10/20/2011 - 01:52 | 1791667 virgilcaine
virgilcaine's picture

Until 'the Guvment recognizes there is a full on banking crisis via real estate, the economy is toast.  At the rate they close banks now, 4 per week on avg. , expect a recovery around 2050. The Courts can issue decrees all day long... as the systemic crash continues around them

Until then..keep buyin those ipods/pads.. keep on truckin to the beat.

Thu, 10/20/2011 - 01:51 | 1791679 o2sd
o2sd's picture

Hang on, Massachusetts has a Torrens system, which means that the property in question was on a Torrens Title, which means that any change of title ownership must be recorded in the Registrar of Titles.

How did the foreclosing party take title from the original mortgagee without changing the title owner at the registrar? Or does Mass. not have a Land Titles Registrar?


Thu, 10/20/2011 - 02:03 | 1791695 Dirt Rat
Dirt Rat's picture

Cook County, Illinois also has the Torrens title system. Last I heard their records were caught up to about 3 deeds prior. These places get that far behind in recording.

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