Fixing Massachusetts Foreclosures Won’t Be So Easy
By ABIGAIL FIELD Posted 10:15 AM 01/14/11

See full article from DailyFinance:

Why Completed Massachusetts Foreclosures Are a Big Problem

One problem in the Massachusetts cases is that the foreclosing banks were assigned the mortgages after the foreclosure was completed. An assignment can’t happen after the foreclosure starts, much less after it’s been completed, the court explained, unless the assignment is essentially a redo of an existing assignment. Then the late assignment would just “confirm” the original.

Since the “typical” securitization involved assignments in blank, I’ll bet very few of the trusts that foreclosed in Massachusetts had the mortgages when they foreclosed. If the banks had been aware of the issue and were dealing with it, it’s hard to understand why they would have told the Massachusetts high court that assignments in blank were legit.

That would mean any assignment to a securitization trust that happened after the foreclosure started — apparently “typical practice” in Massachusetts, as it is elsewhere in the country — wasn’t “confirming” an existing assignment, despite K&L’s claim to the contrary in its newsletter:

[I]n the context of securitization, such confirmatory assignments will serve to validly confirm the language of assignment contained in the underlying securitization agreements and can thus properly confirm the earlier assignment of mortgage which itself bestowed the authority to foreclose.

Unless the original assignments weren’t in blank, the late assignments aren’t “confirming” anything. They’re the first time the trust is being given the mortgages.

K&L gets one thing right: A foreclosed homeowner probably has to go to court to show that the foreclosure was invalid. That’s because just showing the assignment to the trust occurred after the foreclosure started — an easily determined fact in the land records — isn’t enough. The homeowner has to find out if that late assignment to the trust was the first one or a “confirmatory” one. That is, did any assignment in blank break the chain or not?

Since such assignments were typical, then most if not all of the foreclosed homeowners should be able to invalidate their foreclosures. Precisely what that means for the foreclosed homeowner, the foreclosing trust, the servicer and the purchaser of a foreclosed Massachusetts home isn’t clear. At a minimum, the new owner doesn’t have good title because the bank that sold it didn’t have it to give.

Problems Elsewhere?

K&L also points out that the case hinged on Massachusetts law, which is true — and the firm tries to reassure people that, for that reason alone, its consequences are limited. Well, maybe. Maybe the securitzers ignored only Massachusetts law.

Speaking of which, how did that happen? The Massachusetts high court emphasized that the illegality of assignments in blank was basic real estate law. How on earth did the big firms advising on securitization deals — and it’s many sophisticated firms, not just K&L — not realize the “typical” deal violated Massachusetts law?

Boston alone is chock-a-block with big corporate law firm headquarters and branches. Surely, they had partners who knew better. Since the banks’ lawyers blew it in Massachusetts, can we really take their word that they didn’t blow it any place else? I wouldn’t.

See full article from DailyFinance:


32 Responses

  1. I do agree with all the concepts you’ve offered in your post. They’re really convincing and will certainly work.

    Nonetheless, the posts are very quick for novices. May just you please extend
    them a bit from subsequent time? Thanks for the post.

  2. Just found that someone with a similar name to mine who lives in a different area filed A BK. The bank filed another assignment in the wrong county recorder office, after this gentleman filed for a BK to show they had standing for the motion for relief to go after MY property.

  3. Can Quiet Title be filed after the home is foreclosed, sold at auction, then sold to a new buyer? I made sure the foreclosing attorney for the Servicer and Trustee knew forgery and fraud was in the documents.

  4. The assignment in my case is dated a few days after the Lis Pendens was filed. However, it was not recorded with Registrar of Deeds for six months. Consequently, AHMSI did not have the right to file a Lis Pendens on an unrecorded Assignment.

    In addition, the Assignment has been signed by a robosigner, created in Greenville, SC and notarized in Texas. The witness to the robosigner in Greenville is the same witness to the notary in Texas. Only if she could be beamed down from the mother ship.

  5. @ vegasdude

    Remember, there is a big difference between what’s supposed to happen and whatinf fact actually did happen. What’s supposed to happen is governed by all the SEC documents. We all know it never happened this way.

    You have to respond accordingly.

    In reference to the tender rule we have it here in california as well but I do think there was a recent case maybe Mabry that tender wasn’t required.

    In any event, did you do a RESPA to get the true and accurate accounting? Even if you didn’t I would state in the QT action that you have and are willing to tender once the correct party is located and the accounting has been analyzed by a forensic auditor and all thirty party payments have been accounted for.

    That’s why we are going to attack the unlawful foreclosure in the UD case because they haven’t perfected the title as required by statute. They are plaintiff and must prove their case. Just like in Ibanez the banks sought QT and couldn’t prove clear title and we know what happened there.

  6. vegasdude,
    Whosoever raises the defense of “Tender” must prove that it is actually due, they are the party rightfully entitled to it and that it is a right enforceable in a court of law.

  7. So….what I’m reading here goes against an earlier post about “destruction of the Note” by operation of law….I think.

    Let’s see….

    1. The Note is transferred from party to party, eventually ending up in a securitization trust.

    2. The borrower misses a few payments.

    3. The servicer says this is a “default.”

    4. So now, the Note comes out of the pool?

    First, this would mean that the Note is NOT “forever converted” into certificates (shares).

    But also, what about Notes that were NEVER DELIVERED to the trusts?

    It would sure help if someone could post some kind of a flow chard or timetable on this, because heads start spinning once terms like “removable of receivables” and “swap insurance” enter the mix.

    Also — I’ve noticed a defense for a claim of Quiet Title — “Tender.” It might be obvious to some of the great legal minds posting here, but how best to fend off this attack? How can we place the burden of proof on the pretenders if, as in Nevada, we have to become Plaintiffs just to stop the abuse of non-judicial foreclosure statutes? Once they yell “tender!” can we FORCE them, or have the Court compel them, to PROVE the identity of the creditor and the remaining amount, if any, of the obligation? And if so, HOW???

  8. jjg007

    I agree, I’m also in the health care industry and sometimes “scientists” try to over complicate things. Most times the answers and solutions are the simplest things.

    Why even go into securitization in most cases? This is the arena that Judges still don’t get. Even in Ibanez the justices still think the homeowners were in default. I don’t think after listening and reading the briefs that the homeowners lawyers disagreed with that.

    They still don’t get it that no obligation exists any more. It was either extinguished when the note was truly transferred in and the bond was created or it was never transferred.

    The simplest thing is to show slandered title and the wrong party in interest. When you do that you can always go back and file a separate suit for fraud but at least your home is protected.

  9. @ anonymous

    absolutely agreed. Also, the fact the original warehouse lender bank that actually funded loan and is not listed is the first missing link with Indorsements

    angry & NOT TAKING IT

    yes, standing or lack of standing needs to be plead first and settled. Without standing nothing else matters.

    That’s why I don’t understand when I see so many pleadings where standing is an issue but then they plead all these other acts against a party who has no standing.

    The acts that occurred at origination are against those entities and the current true “party in interest” and 99% of the time it is not the party who is trying to foreclose. So why would you file claims against this entity? You give the court the impression they have standing and you then have an uphill battle.

    Just my two cents.

  10. DyingTruth & Anonymous:

    Why is the obvious not noticed? By the media, Judges , Government Officials -anybody.
    One can surely understand a few notes lost and /or not assigned/conveyed to the trust or MBS or Fannie Mae or whatever. Of the millions of Mortgages written, one can even understand a 1000 lost notes, but maybe that is stretching it. So how come there are thousand and thousand lost notes, why are their foreclosure mills set up to foreclose? You would think somebody would say Now wait a minute here, there are too many lost notes, something is not right. How come we do not see proper recording in County Land Records?

  11. DyingTruth

    Yeah — but the MBS beneficial pass-through security investors have been paid their principal in full by the swaps. What they lost was the higher interest that they thought they could earn on subprime higher risk/return interest rates — that were falsely rated AAA – thus allowing pension investments.

    The employees maybe have action against their own pension investment administrators for such lack of due diligence for investments. But, likely would not stand. The administrators will not be able to earn 13 or 15% on mortgages for a very long time.

  12. A new trend gaining momentum: bank puts you on a dual track loan-mod/foreclosure system. Fight back and put YOUR bank on a dual track system:

  13. Sen. Jeff Merkley asks Obama for sharper focus on foreclosure crisis:

    Here is Merkley’s suggestion which would be excellent for both judicial and non judicial states: “Establish a third-party review prior to foreclosure and fully enforce existing law.”

  14. It all boils down to the Pension Fund loss claims incurred for investing in Subprime MBS all of which should be heard and decided before any foreclosure litigation moves forward and the clock stopped for all litigation that has taken place. Because nobody is going to get any fair “Due Process” until the truth is exposed that the Trusts which Pensions had invested in are completely empty and the MBSs they hold are backed by nothing and worthless.

    The Pension Funds are being strung along in an illusion that they are the Beneficiaries, Note Holders and Real Parties in interest to the Trusts entitled to Principal and Interest, but behind the curtain are multiple Trustees and Servicers ficticiously manipulating the appearance of income revenue going into the Trusts in a gradually declining fashion. And they obviously of course (not aware of the illusion) blame it on the Homeowners, causing every Public Employee from Police and Sheriffs to Court Clerks and Judges to have strong resentment towards Homeowners because of pension losses and their salaries are being cut. Making “Due Process” and the idea of “Justice” mere fairy tales.

    And when all is said and done, having manipulated the Public Servants to facilitate their crimes against the People. After all Residential Property Ownership has been Purged of the individual rights of the People and held in the hands of the Corporate collective then they will reveal that the Trusts are empty and they hold the rights to nothing.

    Come on now, do you really think that the people who are pulling off the most complex fraudulent scheme in history didn’t transfer and assign any of the Mortgage rights over because they were LAZY? They didn’t sign over the rights to anything because they were GREEDY, and once their done with us they’ll have all the Public Employees to victimize and abuse.

  15. Dear Angry and Not Taking it, You raise a very good point. How can a servicer declare a default if by nature of a PSA servicer must continue making payments on behalf of borrower to the TRUST as borrower stops making payments. In essence, servicer claims default but the TRUST has been receiving payments by servicer. Therefore, borrower is in default to SERVICER not TRUST. Servicer does not have standing to foreclose. Proving payments to servicers and to trust’s are not the issue. We aren’t arguing the indebtedness owed by the borrower. The assignments and chain of title are the argument. They (assignments) never happened. Banks are hard pressed to surrender this information because it incriminates them by proving the assignments never HAPPENED. The debt is now unsecured. They can not foreclose on a property. Then document fabrication begins along with the courtroom circus. Read Dave Krieger’s book “Clouded Titles”.com. We need not complicate things and try to educate judges on mortgage securitization. Proving “DEFECTIVE TITLE” is the “Mother Lode”. Don’t go into court trying to get a free house. You’ll get run out. Expect however, when arguing defective title and pushing the bank to “CONNECT the DOTS” (assignments) and to prove agency, you will be put you in a much better position for negotiation or whatever it is you are looking for. Neil Garfield says that the bank cannot afford to lose ONE case where the bank produces documents establishing whether assignments were made. The implication if proven will bring down Wall Street. This is why banks settle if “YOU GOT THE GOODS” on them.

  16. […] This post was mentioned on Twitter by alan baron and Teri Sherwood, Theresa Bastron. Theresa Bastron said: BANKS CAN'T CORRECT ERRORS CITED IN IBANEZ CASE: […]

  17. “standing” if not raised – will not be brought up or contested by the court [as far as my experience ].
    although i raised the standing issue in my response to lift stay [judge never read] & the bk judge ignored everything like i wasn’t even in the court,but his comment of “my house worth more than his”
    whatta jackwagon!

  18. mike maunu,

    Case law to support that TILA/RESPA should be filed against the originator — that is the only party you really know. Successors then have liability — but can only determine successor through adequate discovery.

    And, there also should have been assignments/sales — including the one most clearly omitted from PSAs – sale of the loan to the Wall Street Bank. PSAs acknowledge sale to Depositor — that is from originator to seller to depositor. But, seller to Depositor — is likely in a a MLPA. But, in order to be securitized — there must be removable of receivables from a balance sheet — and Depositors do not have their own balance sheet.

    So — either originator or seller, actually retained — or the parent of Depositor purchased — but this is not disclosed. Also MLPA cannot be an “intent” to sell — but must be a valid and executed document attached to PSA..

    And, according to PSA, all assignments must be complete, and executed, and transferred to custodian and/or trustee. None of this was done.


    Chase never assumed the note and DOT from Wamu so going after them for Wamu’s fraud would not be correct. Also, I know if other cases Chase has denied assuming Wamu’s liabilities. However, in another case the FDIC has filed a brief that says they absolutely did take on the liabilities and Chase’s actions and filings verify this. Tough battle.

    So who would you sue for Wamu’s action? I think the only place you could go is to file a claim in their BK proceeding. Trying to sue the REMIC trust would be to costly and they would say the transaction didn’t happen.

    So I think the path of least resistance and easiest to prove is to sue Chase and California Reconveyance, their trustee for the wrongful foreclosure.


  20. angry & NOT TAKING IT

    My error – it is a copy of the orig note and DOT.

    At this juncture the plan is to simply get quiet title and that can be done based on the lack of proper indorsements, assignments, etc of the DOT. Once this happens then the note is another issue and unsecured.

    Who’s gonna try and collect? My guess is no one. Who would want to and then subject themselves to the liability that attaches to it?

    That’s why I have never understood the AP and the complaint rational of all the attorneys we have talked with and cases I have read where they allege all of the fraud, TILA, RESPA violations, etc. against in most cases a party who has no standing to be foreclosing.

    By doing this aren’t you telling the court they have standing to be foreclosing because you are alleging all the violations that occurred at origination?

    My understanding is that only those that are the true holder in due course would be liable. Is this inaccurate?

  21. mike
    sorry that last post was a reply to yours not sf_dan.

    this is “Nothing filed at the recorder except original note”
    there is a copy of the NOTE recorded?? odd!
    i dont believe this is proper.

  22. Dan-this is from todays other post here@LL
    re-loan in default and [isolating it from the trust]

    ANONYMOUS, on January 20, 2011 at 3:59 pm said:
    angry & NOT TAKING IT,
    Okay — but charge-off usually occurs after the securitization (removal of receivables from balance sheet – which is just an accounting coversion) — that is, the default loans are then removed from securitized trust (no longer a receivable) by servicer — and entity who securitized – gets write-off. Only receivables of promissory note is securitized – thus, once in default — no longer a security. . The only glitch is that the servicer owns the tranche that removes the non-performing loans. But, this tranche is not a pass-through certificate — it is an equity residual tranche. So – servicer THINKS they can cover-up for whoever is now collecting (and it is not the trustee to trust). Again, the role of the subordinated tranche is to REMOVE non-performing loans.
    Work that in –otherwise — good points.

  23. SF_Dan

    I should clarify, there should have been 4 more Indorsements instead of assignments.

    According to our PSA there were 4 transactions that should have occurred between the various parties before the note was accepted by the trust..

    angry & NOT TAKING IT

    in our case the note was definitely in default as the loan level files (master service report) shows the loan in BK back in May of 2009 at the same time Chase was filing/arguing their claims with the BK court they owned the note thru the WAMU assumption agreement.

    Love to see them explain how the trust that supposedly owned the note had to have Chase assign it to them the day after they bought it back at auction.

    Nothing filed at the recorder except original note, NOD, NOS, Deed upon Sale, Assignment.

  24. jjg007 & ANONYMOUS

    but… without an accounting of both servicer & MASTER SERVICE said loan may have been [purportedly] kept current by payments advanced by either of course only recouped @ liquidation [foreclosure] of the asset!

    ANONYMOUS please correct me if this is wrong

  25. @ mike maunu,

    For clarification and confirmation, can I ask you to please elaborate on this statement, in terms of perfecting the chain:

    “and as we all know there are 4 other assignments into the trust that need to have been done.”

    Thank you.

  26. Also, let’s not forget that just beacause the note was allegedly assigned, by in our case Chase, to the REMIC trust that the trustee has accepted it. We know they havn’t because they can’t. I’m also willing to bet they have no knowledge any of this. Wouldn’t this criminal activity as well?

    Then we have CRC filing documents wih the county recorder that the note was purchased with a credit bid at an auction that didn’t take place. Again, the REMIC trust would have no knowledge and would also be criminal.

    Would you file with local DA, state AG and FBI? It might even fall under RICO violations.

    Any attorneys interested in a class action against Chase in Cali like the one filed in Florida against B of A? I’ve done the homework and we’re ready to go.

  27. jjg007,


  28. Thanks Lucy for the post.

    Very difficult to go back and now try to do what was never done. Oh, and while looking at Mortgage Loan Purchase Agreements — which should be attached — do not forget that a MLPA is also a repurchase agreement– with many stipulations as to when a loan is mandated to be repurchased. So – have to find out if it was repurchased — and, hmmm, has anyone else asked for a repurchase??? Further complications in an already BIG mess..

  29. U.S. Bank, NA as Trustee ot the RASC Series 2227-EMX1 Trust vs Erica Congress et al. Testimony by Professor Ira Bloom, Law Attorney, Albany School of Law, NY. “Because the promissory note was not actually transferred to the Trustee by the closing dates of said Trust, the promissory note did not then become an asset of the Trust”. Professor Bloom continues in his affidavit by stating, “The Trustee’s post-assignment action of receiving the note from another party, would have been void in contravention of the Trust Agreement for which no exception applies. Because the Mortgage loan was in default, the Trustee was effectively barred from accepting the contribution as it would have caused adverse tax consequences for Remic status”. “Whenever the promissory note was delivered to the Trustee, the Mortgage loan was in default and therefore could not have qualified as a “qualified” mortgage loan” for REMIC purposes.

  30. We have the exact same situation in my lady’s case. We let Chase continue to tell the world and the BK court they received the note through the Assumption Agreement. (We know different because we ordered Neal and Dan’s Securtization docs and commentary.) We never disclosed we knew.

    Then we let them allegedly foreclose last month and guess what? They learned nothing from

    Chase assigned the note the day after the Trust bought the note back at a trustee sale and California Reconveyance had issued a Trustee’s Deed upon Sale to the REMIC Trust as the foreclosing beneficiary, not Chase.

    They can’t even argue it was confirming an existing assignment because the assignment would have had to been from WAMU and as we all know there are 4 other assignments into the trust that need to have been done.

    It should not be difficult to argue an unlawful foreclosure has taken place even in Cali.

    Either they haven’t learned a thing or they think they are still above the law.

    I guess Judicial Notice of the Ibanez case would be a good thing. lol

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