Foreclosure Defense and Offense: A Duty to Disclose and a Duty to Record


See also cyruswellstexascase-excellent-verbiage-on-securitization-conspiracy-with-charts-and-causes-of-action

Nobody named Gator Bradshaw should be anything but a lawyer from Florida. He is, and a pretty good thinker. He suggests that the statutes governing title agents and recording, and specifically those making it a crime to fail to record or to use a recorded instrument in an illegal way, provide potentially a silver bullet. It isn’t something that I had considered before, but on reflection it appears that Gator is on to something here. Here is his latest comment and my response to him thus far:

GATOR: Chapter 701 should cover assignment of mortgages just as chapter 517 should cover the notes. That being said though the rest of 701 is silent as to the way a transfer should be conducted 701.041 is illustrative of the legislatures concern in adding an orderly system to the process (arguable for the benefit of title agents) however I intend to argue that it should also apply to all assignments. Especially when there is no documentation that the entity that is bringing the action is the proper party. If they are not named in the mortgage then there should be, recorded, a record of the transfer so that the requirement of chapter 701.04 can be met.
I will give a more lengthy explanation later when I have an opportunity to draft it. I realize that this is as new idea but sometimes new ground needs to be plowed. The worst thing that can happen is for the court to tell me no. But I think that if I can argue that this interpretation is necessary to allow some minimum notice to the home owner I may find a sympathetic ear. Just a thought.

Gator Bradshaw

NEIL: I agree with that. And it does add to what I have developed so far. So you are creating a statutory duty to record everything that goes on with the mortgage note because everything that happens to it, produces an effect on the enforcement or enforceability of the mortgage. You are echoing the issue that numerous scholars and academics have raised, as an aside, as to whether mortgage notes were EVER meant to be negotiable instruments at all. Your proposition also raises the level of credibility of the argument in the Creighton Law Journal that there ought not to be a holder in due course, although their argument is a bit twisted and the conclusions obscure.

Perhaps their meaning is that their ought not to be consideration of the status of the holder — in which case your proposition goes from possible or probable to mandatory — i.e., if any holder can enforce the note and foreclose the mortgage, then the original borrower once sued should not be able to be sued again by someone else making a claim through the chain of title even if they are a bona fide purchaser for value (without notice of fraud, statutory violations or other irregularities at the loan closing) and thus a holder in due course. And whoever gets title from either a foreclosure or deed in lieu of foreclosure or short sale, should be able to get title insurance without exceptions for whatever happened in the securitization process.

Your proposition is supported by and lends support in a positive circular way to the notion that the borrower and subsequent title holders of the property or the mortgage (which is an interest in property) is/are entitled to full disclosure and notice, by virtue of state property law, TILA and fiduciary responsibilities of the lender to the borrower and the same fiduciary duties assumed by the Trustee(s) involved — i.e., (Deed Trustee in non-judicial states and perhaps the Pool Trustee of the mortgage aggregator). What I think you are zeroing in on here, Gator, is that the borrower was entitled and continues to be entitled to know who it is that he is doing business with. Clearly an attempt is being made here through slight of hand to distract us from the fiduciary duties of the “lender” and the duties on all participants at closing (title agent, appraiser, mortgage broker, real estate broker, seller etc.) who had knowledge or who come into the knowledge that things were not as they appeared at closing. The idea is to get us to look at the risk of loss rather than the duties of disclosure and fair dealing.

As for criminalization of the conduct, there are statutes in Florida and elsewhere that specifically provide for civil remedies for victims of criminal acts. Thus damages would obtain. However the greater strength of your proposition, as it appears to me, is that the title agent and the lender were under a statutory duty to “report” by way of recording, all transactions relating to the mortgage note. That duty would run all the way up the chain of securitization. Thus when AMBAC was paid a premium to insure the revenue or the principal of the note, this should have been disclosed — something obviously nobody upstream wanted as it would be a disincentive to the borrower to make the payment. The same would hold true for cross guarantees and credit default swaps or other options, agreements or additional derivative instruments that spread the risk of loss to third parties upon payment and receipt of fees generated out of the single transaction wherein the investor in asset backed securities was the source of the loan and all expenses associated with the loan, which would include those fees paid to offset risk of loss, fees paid to perform the closing, and fees paid for pooling, collateralization and issuance of asset backed securities etc..

And then of course, it occurs to me, the question might evolve into the use of proceeds from the investor that overfunded and overcollateralized this and other loans. If the criminal act in the first instance created the start of the chain of events, then the extra money that went as profit into the seller of the securities might also be criminal, perhaps theft.

I would like very much for you to expand upon this and submit an article to the Blog on this issue.

13 Responses

  1. Please tell me who Gator Bradshaw is.

    I need to contact him asap.

    Thank you.

  2. Wow Steve Dye,

    That was nice,breath-taking thanks for letting me in on the details,they help.Keep on working and keep informing.

  3. Oh, also Trustee says assignments do not have to be recorded, just have to had exist at some point in time.

  4. Hello Mario Kenny,

    In response to your inquiry — My Chapter 13 became converted to Chapter 7 based upon motion of Deutsche Bank – the “purported” owner of the first mortgage on our home. [ I never heard of them before foreclosure notice mailed to me.]

    As things evolved – Chapter 7 Trustee testified in April 2007 regarding his
    title report as to the “purported” ownership of the Deutsche’s mortgage.

    Trustee testified his title report (from early 2007) showed Deutsche as the proper party.

    In May 2007, after introduction of evidence questioning the position Deutsche asserted, and upon further questioning by the Court, Trustee finally informed the Court he had just discovered that there was a problem as to the true validity of the Deutsche position. He told the Court, he would deal with the Deutsche problem later. While, at that time he began his “scorched earth” strategy and put our family on the street, eventually giving us a two hour notice to leave, he then threw our family out of our home, even though he knew that Deutsche was a disinterested party.

    A year later, in April 2008 Trustee submitted his compromise and settlement agreement (the Deutsche agreement).

    Trustee again testified about the Deutsche problem mortgage.
    His motion and the Court’s decision based upon his sworn testimony, paved the way to let Deutsche appear to be the true party in interest, let them off the hook, and set forth the opportunity for the Trustee to get $100,000 in settlement from Deutsche.

    I have questioned what documents the Trustee reviewed. [no public docs exist to support Trustee’s decision].
    Trustee has steadfastly refused to supply documents confirming his decision Deutsche is proper party in interest.

    The Chapter 7 Trustee continues to log hours to extract more than the $100,000 fee paid to him by Deutsche:

    The answers to the following questions remain:

    a) Did the Trustee lie under oath to the Court about the above referenced title report as to our home, and/or

    b) Does Trustee or his firm have a conflict of interest because it appears that either he and/or his law firm owns stock [an estimated $10,000,000.00] together with a creditor of my bk estate – Bank of America.?

    Trustee states the answers to these questions are “irrelevant”.

  5. Hello, I have the MERS 2005 User Conference Resource Handbook and found something that I thought might be of interest.

    In Section I. Introduction to MERS, it gives a brief history. It describes itself as a two-tiered corporate structure. MERSCORP, Inc is currently owned by 28 companies, including Fannie Mae, Freddie Mac, the Mortgage Bankers Association of America, the American Land Title Association, First American Title, Stewart Title, MGIC, PMI, Chase Manhattan Mortgage, Citimortgage, Countrywide, Merrill Lynch, and various other mortgage companies (large and small).

    What caught my attention was the following two sentences that I believe are very important to the issues being discussed on this website.

    “This two tiered structure was approved by the three major rating agencies: Standard & Poor’s, Moody’s, and Fitch. The rating agencies have eliminated the requirement to have an assignment to a securitization trustee prepared and recorded when MERS is the Mortgagee of record.

  6. Is it legal for the mortgage lender to collect funds from an entity like AMBAC and foreclose on the property. Isn’t that a form of double dipping.

  7. Nuckels,

    I have been at it for about 2 years and to date I have not answered this question. I started by going to the public record to see who has registered an assumption on my home and it was a fake assumption, signed by a person who did not have permission to do so.

    The person who signed my assumption of Mortgage was working with the bankster to commit fraud on me and the court, well I caught them red handed.

    To date no one bankster owns my home, nor do I as a matter of fact. The bankster who attempted foreclosure on me was a fraud and a brazen thief. I caught them.

    I think that it is impossible to find out who owns your Promissory Note, but someone does and this is a huge problem.

    As for the Assumption of Mortgage you may go to the Public Record in your downtown to see if the Bankster who you pay the death note to has assumed your mortgage and if that bankster does really own the thing.

    I doubt that though, no one owns the Note or Mortgage and since you live in your home you may be just a squatter at the moment.

  8. we would love to learn more about these assignment issues, it sounds too good to be truw but does make sense. how does one find out who in fact does own the rights to a mortgage?

  9. Hi Steve Dye,

    Can you explain a little more detail on your post please.

  10. Mario has already helped me a great deal, in the form of how to acquire information and how to put it to good use, not to mention being a great source of inspiration. I’m now in the process of trying to take my case on the offensive against the lender, instead of waiting for them to come back at me. This is going to be a blood-bath. They’ve committed fraud and racketeering, and now at least they know that I know it. I’m not finished with them by a long-shot.

  11. Indeed, Deutsche Bank.

    Our family’s personal experience with Deutsche started with them foreclosing our home – even though we never heard of them or ever made payments to them.

    From there it went to Chapter 13, then based upon a motion of Deutsche to a Chapter 7.

    At this point the Chapter 7 trustee admits there is no evidence that Deutsche is legally entitled to one red cent, Deutsche promissed to pay the 7 trustee $100,000 and the Trustee has apparently agreed not to request any documentation to provide evidence that Deutsche has standing to do ANYTHING or should be a party to my case.

  12. Thank You Neil.

    It is my pleasure to help, more than any effort I offer is my Endeavour to remind readers of their right to fight the banksters.

    I would like very much to understand better the above writing. I am a slow learner but I do learn in the end.

    I am very happy to see other minds coming to add to this work in progress.

    This information is very helpful to us laymen in understanding the fraud and racketeering conducted by the banks et al.

    It has been years that most of these seasoned criminals have stayed out of jail.

    Most people are very intimidated by their power and deep pockets, in most cases people are really afraid to stand to the bank.

    I think it is really important that every borrower go to the public record to see what is recorded, in most cases the assumption of mortgage is a FAKE.

    I also urge the readers to Google the name of the Plaintiff’s, look for, read and understand the SEC 10K and 8K filings, they hold a lot of mystery, the language is somewhat difficult to understand and it takes a lot of clicks to get the information, ALOT of clicks, but keep on clicking in the end the information comes up very clear.

    I have come a long way, the Author of this site has caused me to learn a lot and I am forever very grateful.

    I am amazed that each and every day I learn something new, when I first stumbled on the SEC filings I became very inquisitive on this complicated filings, the information is about 500 pages long, displayed in tiresome manner with respect to reading and understanding by laymen, I think..

    Reading is very important in this effort; rereading is suggested to gain more understanding of the subject matter.


  13. Hi,

    A very distinctive view over foreclosure, thanks a tonne for sharing

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