Citi Article —FORECLOSURE GONE WILD— Tells ALL: Use this MEMO to make your case



Submitted by Jon Lindeman, Esq. Florida

So with the chain of documentation now in question, and trustee ownership in question, here is one legal scenario, according to Prof. Levitin:

The mortgage is still owed, but there’s going to be a problem figuring out who actually holds the mortgage, and they would be the ones bringing the foreclosure. You have a trust that has been getting payments from borrowers for years that it has no right to receive. So you might see borrowers suing the trusts saying give me my money back, you’re stealing my money. You’re going to then have trusts that don’t have any assets that have been issuing securities that say they’re backed by a whole bunch of assets, and you’re going to have investors suing the trustees for failing to inspect the collateral files, which the trustees say they’re going to do, and you’re going to have trustees suing the securitization sponsors for violating their representations and warrantees about what they were transferring.

Foreclosures Gone Wild

“Three Potential Outcomes — Levitin articulated three possible outcomes to the aforementioned issues and assigned an equal likelihood to each. In his best case scenario, these issues are deemed merely technical in nature and are successfully resolved but it takes at least year to do so and all foreclosures are delayed by at least a year. Levitin disputed the claim by banks that these issues can be resolved in a month or so and attributed the banks’ claims to “legal posturing.” In the medium case scenario, litigation ensues and it takes years to sort out these matters. In the worst case scenario, the aforementioned issues become a “systemic problem” which causes the mortgage market to grind to a halt as title insurers refuse to insure mortgages involving existing homes.”

“Most mortgage trusts were set up as REMICs (Real Estate Mortgage Investment Conduits) which are special purpose vehicles used to pool mortgages. Under the IRS code, REMIC confers a special tax status in which the cash flows to the trust are not taxed. Investors in the trust pay taxes. The tax exempt nature is important. If the trusts were in fact to be taxed, the taxes would distort the yields required by investors.”

“To qualify as a REMIC under the IRS code and enjoy the beneficial tax treatment, the trust (1) must be passive and (2) cannot acquire any new assets 90 days following the trust’s creation.

“When a home with a mortgage on it is sold, the mortgage must be released at closing by the current mortgage owner before a new mortgage with title insurance is issued. If it is not known with certainty who owns the mortgage in question, it cannot be released. If the title company is not satisfied that there is a good release on the old mortgage, it will refuse to insure the new mortgage.

27 Responses

  1. What is the time limit to file the sale with the Registry of deeds? If anyone knows can you please let me know. I am in MA

  2. In Bk court this week, Citi has to brief the court on how they can own the note and Freddie Mac owns the loan or mortgage.

    In my response to whatever they come up with, I’m wondering if I should attach this memorandum to my reply, as an attempt to show that Citi even admits that ownership is difficult to prove.

    Any comments?

  3. To Lucy:
    The law suit is a good one; the fact is that HAMP was created for the home owner, the intended third party. Therefore, when you have not been afforded the proper opportunity for relief under the HAMP guidelines, there is a breach of the banks contract with the government as it relates to the intended third party beneficiary (the home owner). These lawsuits have all been settled when brought by the individual. There are quite a few lawyers specializing in this area, it is a single issue and one the criminals cannot circumvent. There are quite a few class action suits as it relates to the HAMP and as a matter of fact the Attorney General here in MASS has done a tremendous job with predatory lending and in March this years, entered into a settlement with Bank of America/BAC home loans/ Countrywide for a 3.1 Billion in relief for violation of the HAMP guidelines. Read the HAMP guidelines, if an application is made for relief, all foreclosure processes are halted. HAMP is a joke, but Martha our AG refused to let that dog fly, she has held these bastards’ feet to the fire.
    And Neil, if you want the agreement I have it, tell me where to send it so it can be posted. How would I send that to Neil Lucy??

  4. Pelucheven

    Sorry about that, the website still under construction. The website will be updated shortly. If you would like to send me your email address let me know and I will send you where to send it.

  5. Dear Debbie, I went to the blog but I was unable to register, It may be me. I am a little slow with technology.

  6. Pelucheven please go ahead and vent. We have to take back what’s rightfully ours. We are entitled to Due Process and the Courts have forgotten about our rights under the Constitution. Once a date has been set for the Rally the information will be released.

  7. Ok people,

    Now all 50 of the AGs are starting the investigations.

    We are all veterans here, so…

    Lets all write letters to our local AGs and post them as templates here. I know that everyone of our cases are different, but there are millions of people that could use them as a base.

    Frankly, I thought that this day would never come…

    Now that is here, lets all make the best of it!

  8. Thanks for the info Debbie,

    the lawyers I have talked to have seen a realxing of the judges attitudes in PW, LOUDOUN, Stafford counties, however, Fairfax remains a snake pit. as you may know according to the foreclosure attorneys and some judges, you in Virginia have no right to know who you owe money to, who gave you the money at the table, they can freely use any shell Pretender Lender on the note and foreclose on you without the original note and even with fraudulent documents, and even if your loan is unsecured and the lien was not perfected, even if the notes were not transferred to the trusts, they have somehow decided to over rule the IRS and federal law accepting the foreclosure mill argument that they can put the notes into the trusts after the fact even after the trust has been dissolved and even if there is no trust, no known investor they can foreclose on you in Virginia.

    In MD things are a bit easier but the real challenge if for the judges to allow and compel discovery, they still seem not to grasp the fact that these loans were part of single transaction with many layers and many hands getting all the juicy cookies from the jar.

    some lawyers were sanctioned with a $10,000 fine for bringing up suits on behalf of consumers.

    The whole thing is really sinister. But these lawyers have been pushing back thank god. At one point in time, I was about to throw the towel. But I do thank the courageous lawyers and pro se litigants all over the country for fighting and helping bring the truth afloat.

    Good job!!! and there still a long road ahead. These pretenders will continue to fight for what they consider their birth right, to financially rape and pillage this country as long as the political and judicial elite allows them to.

    I THINK JP MORGAN CHASE closed their quarter with a 25% increase in profits. I wonder if this number coincides with the 25% increase in foreclosures and the 25% foreclosure sales have in the real estate market.

    I also became taken aback by the NINE MILLION FORECLSURES in process right now being reported in Bloomberg today.

    That is on top of the 7 million already stolen.. But I guess the definition of insanity is to continue to do the same stupid thing expecting different results, We already have foreclosed on seven million families, let us repeat the process and foreclose on nine million more because since we are the only bastards making a killing it is OK, the hell with America and its Citizenry, we just put some PR out there making the victims the evil doers and dead beats and we would have just realized the successful completion of the greatest ponzi scheme ever and all of this on the backs of the ignorance of the American people and the complicit behavior of our judges, lawmakers and regulatory agencies.

    Good Job Wall Street and in the process you killed to goose that laid your golden parachutes.

    I truly hope you get your orange suites delivered on time for Christmas and that a “technical” issue gets you assigned to the rapist and child molester wing of the state or federal jail you should be assigned.

    And by the way we will make sure we will properly securitize your jail terms and thorw away the key.

    we will create the FCJTSS (Financial Crimes Jail Terms Securitization System)

    And I will hire Barnie Madoff and Keneth Starr ( the investor for the Stars) to do the robo signing for us!!!!

    We will sell the rights to your asses in the grocery stores located in the minority neighborhoods your financial mobsters targeted.

    i am so mad today!!!!!!!!!!!!!!!!!!!!!!!!

    Sorry i had to vent

  9. OK David/Wordpress – since you don’t give me a way to contact you regarding your cloudedtitle purchase – please correct two things:


  10. David: Thanks for reading my note to you about putting your book in .pdf downloadable format and lowering the price for us – now I’m going to buy it. Looking forward to checking it out. Deby (readers: check out this site:

  11. Maryland, D.C. and Virginia the following website is under construction for our area:

    We are thinking of hosting a conference where everyone could get together. Neil who has been at the forefront of this war would be invited to participate as we owe a debt of gratitute for his help. Is anyone interested?

  12. Steve Forbes what a F@#$g
    tool. for him the rule of law is to continue with the fraud put more people out on the street.

    when you see what he just said on fox you will realize that that is the message that they will be putting out. he at least should have the decency, a very foreign concept on wall street (I get it),to disclose his positions on all the lenders, Servicers, stocks, etc.

    sue them all including this clown



    Is is a good time to ask the judge if he/she has a mortgage or if their is a conflict of interest?

    This is a matter of National Security out hole democracy is in question? This sounds like we are in the Czar of Russias time.

  14. fonews on satelite has an upcoming segment in five minutes

  15. David Cho from the Washington Post just said on CNBC this morning that the bigger problem is not the paperwork so much but rather the responsibility of the servicers to the investors. People are starting to get it…

  16. There is a ‘gross’ distortion going on. I know many don’t want the ‘so called promise to pay’ to disappear, but that’s what’s got to happen.
    To save face, they want to rewrite the entire mortgage process to work out for the banker. I say, an unconscionable contract is void. We’ve been placed in unconscionable contracts, if you lose sight of that, you will be placed in another unconscionable contract. K.I.S.S. (keep is simple s…pid).
    I don’t want a modification, I don’t want a H.A.M.P. I had a contract.
    Now when the beneficiary goes away, and the trustee has no beneficiary to manage assets for, the trust is dissolved. OR if the Trustee is managing a trust for a beneficiary and it has no assets, it’s dissolved. Once that dissolves, that’s the same as ‘game over’. An the original note was the negotiable instrument, not copies of that note, and I should not have to learn about ‘Secured Transactions’ to know whether I’m bound by the ‘holder in due course’ of such note, and if it doesn’t exist, I should not have to learn whether the fact that it ‘once’ exist, and the expiration date hasn’t surfaced that it should still exist and I’m still bound.

    For that matter, I had $1million dollars under a mattress, and a house fire destroyed it, and since it used to exist, someone needs to give it back, because the world will be short $1million dollar bills if it isn’t replaced by someone. I have evidence of it, I wrote it down on a piece of paper….right here it says…I have $1million dollars under my mattress starting 1/1/2007, and I won’t spend it or remove it from the mattress until 1/1/2015…since I have evidence that I had it, but I don’t have the money, someone needs to replace that money…maybe the bank will do it? You think?

    The home is mine. The title is mine. I will accept nothing less than that. Money has already been made, and if I get caught up into who got cheated on the up swing, I’ll be the last one considered on the down swing, and this never could have been created if I hadn’t made the purchase of the home.

    Last I checked, there was a ‘sold’ sign and keys in my hand, and the county recorder showed me as the owner, with a lien. Now that the lien is invalid, the county recorder should show me the owner without the lien. Period.

    I’m not interested in anyone else’s business who got in on my contract without my knowledge, and got gypped in the process of gambling or trading on whether I would make my payments or default before my 30 years was up.

    Light and Love,
    I love you, even if your own greed sent you on the road to Hell. That’s not my problem…but……..Thou shalt not steal!
    Trespass Unwanted, allodial, in jure proprio, corporeal, free, freeman, whole blood, born alive, live born, life

  17. According to CItigroup, Mr. Levitan claims it will take a year to fix the document chain. Problem with this is that they are trying to recreate the “scene” that occurred years ago. There were certain representations and warranties that were supposed to have been incorporated into the agreements at that time. Things have changed, representations and warranties are NO longer accurate (actually, they were never accurate), players are not the same, and the original intended structure of the Trust is gone via default swaps and sale of collection rights.

    Trying to recreate the “scene” is like trying to recreate a crime scene. While one might be able to speculate as to what happened at the crime scene from a fabricated recreation, the crime itself can never be replicated. Too late.

  18. i got a preliminary title report from Chicago. I alleged as the last paragraph in my quiet title tha Chicago title had said too many exceptions and unnsurable. I then asked for a declaratory judgment action asking the court to determine ownershi of the note and value forcing the defendants as an affirmative reply to show the value in the note–i also filed suit against the trustees on the note claiming they assisted in the clouding of thetitle and the filing of a false foreclosure–since the foreclosure was stopped by my brining it up to date, i alleged they then failed to see the value of the note and continuined to assist in requirng payment with the servicer which led to fraud. there is silence so far on the other side. this is the way to go on this. see

  19. The point everyone seems to be missing is that the pretend lenders and servicers are foreclosing on the mortgage. The mortgage by itself is worthless. The mortgage is cross collateralization for the note. This is the key point.

    People often say they took out a mortgage on the property. This is not correct. They took out a note on the property and mortgage the property to collateralize the note. The mortgage has no terms listed. But refers to the note. If the borrower does not honor the note the lender can foreclose on the mortgage. Key word here is lender which means holder in due course.

    The problem for the pretend lenders and servicers is that most times the mortgages were assigned and the notes were never assigned to the same party the mortgage was assigned to. In fact most times the note was never assigned to any other entity. The notes are usually only endorsed by the originating lender and is never assigned to any other entity which can be proven by lack of enlongments on the note. This is why the pretend lenders do not want to produce the original note. The original note will show that the pretend lender has no standing in court. If the pretend lender that is foreclosing has the mortgage assigned to them but not the note the mortgage is not worth the paper it is printed on. This is where the title companies are going to run into problems. Assignment of Notes are not recorded at the county register of deeds. If the mortgage is recorded at the county register of deeds the title will show there has been an assignment and thus a new lender which is misconceiving. Just because the mortgage has been assigned does not mean the note has been assigned to the same entity or that the note was assigned at all. And that is the heart of this whole problem.
    A simple analogy. There is a cow and the cow has a tail. If you separate the tail from the cow the cow will survive but the tail will not. The Note is the Cow and the Mortgage is the Tail. Without the Note the Mortgage cannot survive and is worthless.
    More food for thought. I have not seen much written about this fact. A note that lists terms such as interest rate and payment schedules such as monthly payments for 30 years is the definition of a non-negotiable note. Non-negotiable notes cannot be legally securitized.

  20. At the moment, if a homeowner in foreclosure or heading for foreclosure wants to fight back in a nonjudicial state, they will have to file a Quiet Title action of their own. This moves the foreclosure from a nonjudicial to a judicial, which will slow down the process of foreclosure immensely. A previous comment made on this subject matter mentioned the fact that most homeowners do not have the money to defend themselves. We offer a Quiet Title pleading customized for the plaintiff at a very reasonable cost: $600. You represent yourself or file the document in the appropriate county and get a lawyer after the filing.

  21. the IRS is too busy going after small businesses, poor and middle class Americans.

    This filthy rich and corrupt bankers and foreclosure mill lawyers apparently are inmune to criminal charges.

    you see, you are starting to hear the matrix of opinion that will polarize the country even further
    members of the admnistration and the TBTF banks have been saying that if they stop the foreclosures the US banking and lending will colapse.

    scaring the hell out of the half ofthe country that has as yet not realized they have been screwed already by the big banks and keeping of the table local banks and credit unions

  22. ignore the big elephant in the room.
    hide n seek.
    see no evil, hear no evil, speak no evil, it’s still evil !!

  23. The chain of documentation that Jon Lindeman, Jr. is talking about here is supposed to be recorded in your county courthouse. The “unsigned lottery ticket” has been passed around so many times that the scenarios that Professor Levitin speaks of is certainly at best, convoluted in a maze of agency relationships.

    I wrote about this in Clouded Titles, which is now out and online at Beth Findsen and I have been discussing agency assignments for quite some time and she eloquently brought this up to the Arizona AG’s office in the letter recently published on this blog.

    Again, I spoke with an attorney from Lathrop & Gage in Kansas City, that has over 300 attorneys who represent the banks … this gentleman told me that there is no way that the banks can legally reconstruct a chain of title. This is what the quiet title actions seek to discover. What I predict you will see is more robosigned documents appearing during the “answers” filed by these claimants. With all of the suspicion surrounding these robo-mills, the courts are going to be forced to more carefully scrutinize the documents.

    To say the least, we must become proactive if we are to make our point. Politically, the banks did what they did as a form of PR/damage control. They got caught. Now they have to re-strategize. This is why they put a temporary hold on foreclosures. Isn’t it amazing how this happened right before the November elections? Now ask yourself who this is intended to help … the homeowner? Really?

    I agree with this blog sites assessment that “fixing” this problem in short order is delusional. It can never happen, not without the cooperation of a title company. Which brings me to my next question … how can a bank “invade” a county courthouse … fix the records … and “clean up a title to property” without implementing a quiet title action of their own?

    The only way I have found through all of my research is through a decree issued by a county court. Without that, they would be altering, removing and destroying records (just like they may have done when this whole mess started 1999) … which by most state laws is a felony.

    Filing corrective paperwork to defeat older recorded assignments is also up for challenge by title companies, unless the banks are going to overrun the existing title companies with their own corporate pursuits and compete directly with them. What E&O carrier is going to insure a bank’s title company under those pretenses?

    My push is going to be to warn consumers about which title company they utilize to close their loans. If they use a bank’s in-house title company, they may be in for a real shock. The title companies are now freaked out over the real possibility of exposure and this is now all about agency folks! Disconnect the agency relationships and you’ve got clouds on titles!

    More of this scenario, which agrees in part with Prof. Levitin, in the book. While it may not have committed fraud as asserted in the multi-district litigation that Judge Teilborg in Arizona just ruled on, MERS’s agents, who are blindly assigning and conveying interests are directly culpable. Supposedly, they have no E&O coverage from MERS. Now we’re back to the Law of Agency again.


  24. An obligatin of payment, based on fraud, is Not owed to anyone, in this case, by the “borrower” regardless of the transaction! Furthermore “We, as borrowers, did NOT knowingly put ourselves into this position” to begin with…..the entire structure of these OPM “loans”is to be deaply questioned.


  25. Why haven’t we heard from the IRS about this mess and the tax evasion that has been going on. Once they get into the picture this is all going to go south for the banks.

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