COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

Special Kudos to Charles “POPPA KOPPA” for bringing the credit bid to my attention and the interesting fact that the minimum bid instruction comes from Wall Street corresponding with securities reports and has nothing to do with the real estate market.


EDITOR’S ANALYSIS: Sorry to keep throwing terms around that nobody used to talk about but the CREDIT BID is one of the weakest points in the pretender lender game and it should be exploited by those seeking to protect their homes. A Credit Bid is a bid at the auction of a foreclosed home that says “I’m buying this house — with no money.”THE CREDIT BID IS THE ACHILLES HEEL OF SECURITIZATION.

Silly as that sounds it actually usually makes sense in conventional mortgages — because the creditor is the lender and the source of funds and the holder and possessor of the note and mortgage each of which accurately describe the true transaction. So when the Judge says OK this house will be sold on a certain sale date, the bank goes to the auction and bids the amount that the borrower owes, including fees, costs etc. If someone bids higher, the bank is thrilled — it gets paid in full and the whole thing is over. (By the way you are entitled to ask for the original note after the sale.)

But now we have something far different. It is a sleight of hand trick in which the wool is pulled over the eyes of everyone and the result is that a free house goes to a bidder who never offered or paid a penny for the house, the loan, the obligation, the note or the mortgage. By pointing out that the case needs to be either bifurcated into the right to foreclose and the right to submit a credit bid OR that the Plaintiff must prove that they are a real bona fide creditor to begin with, the Judge is more likely to see where you are heading. It underscores the point that you are not seeking a free house, you are looking to clean house, and prevent a completely disinterested party from taking title.

You can point out, accurately that the the parties who actually advanced the money are not being represented and that their interests are adverse to the party seeking foreclosure. You can cite to the many lawsuits of investors (now joined by Trustees) against the investment bankers and servicers. You can further point out that when the investors are done with the investment banks they still will have the option of coming after the homeowner whether he is dispossessed of the house or not.

And you can get a little high brow by pointing out that it is against public policy to allow the Court’s ruling on the right to INITIATE  foreclosures is being misinterpreted as a finding that the would-be forecloser is a real creditor with money and risk in the game. Because that leads to corrupting the county’s title system.

Thus the non-creditor who manages to get by the Judge with artful argument on the issue of whether they can BRING suit, sidesteps the essential question of what can and should happen if an auction date is set. It is essentially the same as when a pretender convinces a Judge in a non-judicial state that they can start the foreclosure proceedings, and they use that innocuous order to bootstrap themselves into being perceived as the creditor who can submit a credit bid. Your answer to a Judge who is hostile to your position should be something like this “If you want to let them order the foreclosure sale date to go forward, fine Judge. But are you willing to let them say you specifically found that they are a creditor who could submit a credit bid instead of cash at the auction? Because if you want that, then you need something in the record here that shows they are a true creditor with risk on the table.” (make sure the proceedings are recorded)

If that party wants to submit a credit bid, the foreclosure judgment needs to say that they are the creditor and not that the borrower failed to pay and the house is subject to forced sale. And if the Judge wants to put that in the FINAL Judgment or Order, then he/she needs to have something in the record that shows that the forecloser is the creditor — or else when they show up at auction they have to bid with MONEY like everyone else. Check your state statutes and you’ll see what I’m talking about.

The current status quo is corrupting title every day there is another “sale” at auction that goes to a party submitting a “credit bid.” That sale is NOT subject to the issuance of title and is either voidable or void depending upon which state the property is located in. Either way title is clouded or defective. AND THAT means title IS unmarketable.

It all comes down to the same thing no matter how you approach it. The origination of the transaction was defective if it was intended to be treated as a secured mortgage loan transaction. Each document produced that was based upon the faulty origination simply compounded the stupidity of the process further. By piling up the paper the pretenders gave the appearance that they had done their homework and that everything was in order. In fact they had been engaged in monkey business with fraudulent notaries (18 notaries took the fifth Amendment in Maryland recently), robo-signed documents and otherwise defective affidavits that cannot be fixed.

And THAT brings us to the political decision that needs to be made. If justice takes its course, it is obvious that most courts are going to overturn the foreclosures and stop the rest that are in the pipeline. If the legislature pushes the reset the button then they are giving a legislative pardon to the perpetrators of the worst fraud in human history.


The Market Ticker – Counties Engaged In Tax Fraud?


The Market Ticker – Counties Engaged In Tax Fraud?

Today, February 07, 2011, 7 hours ago | genesisGo to full article

So alleges a new lawsuit…

Last spring, Morris filed suit against the Fulton County Board of Tax Assessors, alleging the county inflated values in scores of neighborhoods by using foreclosures seizures as comparable sales. The seizures, termed credit-bid sales, represent not money changing hands, but unpaid mortgages when a bank takes over a house. He also says appraisers are disregarding valid sales and arbitrarily setting neighborhoods’ average prices.

These “credit-bid” sales are frauds.  They should not be permitted in the first place, and are a big part of the scam that is going on with bank balance sheets.

Here’s how it works:

You lose your house to foreclosure.  You owe $300,000 on the house at the time, but the only reasonable comparables in your area have sold for $150,000.  You either have lost your job or walked off, it doesn’t really matter in this instance.

The bank puts the property up for auction.  But it refuses to take less than the balance owed, because doing so causes an immediate mark-to-market on the property and hits their balance sheet.  So it “bids” the entire outstanding balance – in this case, $300,000.

The bank obviously gets the house back.  It shouldn’t be able to bid at all, as this is not an “arms length” transaction, but the counties don’t care.  A bid is a bid, even if its a sham bid.  The problem is that no money changes hands, because the actual holder of the note did the bidding (the proper way to do this, incidentally, is to set a reserve price and refuse to sell at less.)

The county folks have been counting this sham transaction as a “sale” for tax purposes.  The banks have been counting this sham transaction for balance sheet valuation purposes.  The county residents have been getting royally screwed, as the actual sales that subsequently take place are being ignored as comparables and thus the correct tax base against which property taxes are set.

This is yet another example of the perversity in allowing shams and scams in our financial system and how it screws the common man.  You can be entirely innocent of anything in this case – you never overextended yourself, you bought the house in the 1990s before it all went nuts, you didn’t play HELOC ATM games, and yet your property tax bill is several times what it should be based on actual comparable sales.

How long will this sort of screwing continue before the people rise en-masse and say ENOUGH DAMNIT!

36 Responses

  1. […] be exploited by those seeking to protect their homes. A Credit Bid is a bid at the auction of a foreclosed home that says “I’m buying this house — with no money.”THE CREDIT BID IS THE ACHILLES HEEL OF […]

  2. Hey Anonymous,
    You are very astute, however, you are not at the 10,000 foot view. Ever heard a description of the incredible beauty observed rafting the Grand Canyon? Compare it to the incredible beauty standing on the top looking down into the gorge. Apples/Oranges-Beautiful but two different planets; sights, flora, fauna. What’s my point? Go to SEC filings and depending on how furious you care to become, check out the 10,000 foot view. More than likely when you find your Trust Vehicle, you won’t find your loan anywhere in it. ‘Securities Fraud’ If you are as p-o’d as I, you will be unable to stop peeling back the onion. Amended filings, SEC sanctions / partial payments only to say ‘who me?’ without missing a beat. If you really dig, you can also find the obscure (but apparent) contract agreements between the parties who set you up at the gate. That’s right, you never refinanced away from the manipulative & aggressive collections and fraud that led you to think you were refinancing away from the criminals. Just another piece in the puzzle. One of countless pieces that systematically ate your equity, (while bleeding you dry paying to play), stole your home, then tricked you into handing over more under HAMP. It only gets better if you end up in court and throw more money at the system, which while I wait for the decision, the 1099C is already at the IRS, the final nail in the coffin. Obvious question, what kind of dimwit am I to uncover so much only to find myself at the end of a dead end street because CEDE Co. allows Deutsche & lawfirm to claim they represent a secret. Nice that the judge considers me a dead beat behind on payments, when I have been denied the right to question the crooks who have been sucking up my money for years!!!! QWR replied ‘not my fault’, just a servicer…..uh i mean creditor!” Have your cake and….. The best part, once I’m down, (homeless), unlike a thug, put the boot to me & add 69K onto tax liability to pay from retirement income!
    God Bless America!

  3. So, do I understand correctly that home was obtained in non judicial state using deed on sale. Summary judgement is granted and UD doc says grantor is grantee. (in this case ncm home equity asset backed…blah blah. Actual value around 100K, ramped up to almost 200K, however, fair market value is listed as 129K.
    Here is the deep part. 1099C from Ocwen who claimed to be servicer says 69K forgiven. Shortly after second loan sent letter saying I also owe them 20K. I called them and was told, pay no attention as second was dismissed in chapter 7 I filed in 08. Am I being set up to be sued again (as creditor), after losing home of 32 years. What can I do to protect myself if my attorney refuses to address case beyond her predetermined approach. P.S. Nothing free going on here as never missed payment but was told by Ocwen to stop payments to apply for HAMP, and after dragging out, adding more they convinced me to dismiss chap 13, to complete the approval then foreclosed. (although backdated transfer over four years ago leave the actuaI who or when a question…QWR from previous firm should be included, but she has never been interested in seeing it; I have paid more than 25K to loan mod / attorneys and current attorney is leaving me open to future issues via narrow argument. I understand there was an offer in compromise, but it was summarily dismissed and worries me further that it hasn’t been addressed. (After paying her in excess of 11K, she will not appeal and unless I pay a two month security in advance, refuses to continue beyond UD that has gone on for months and months. I pay by the month and don’t have a clue as to what is happening or how to protect myself from losing good case or future lawsuit. Questions or requests for rulings etc are ignored and if I wait for phone call about my payment to get an answer, it comes with threats to quit because she is working for free?? (Since hired in 2010, have paid just her 1/3+ of yearly income. however, this approach works well as I am disabled, alone, and afraid. Since this style effectively puts me in a fearfully defensive posture (begging, weeping, and complying), I continue to hand over each months check while remaining clueless as to what is happening or what to expect. Suggestions?

  4. Ian and E. Tolle,

    The security investors have been paid back — will state this 1000 times. They just did not earn the interest rate they would have liked — thus, in finance/economics — we call this “lost opportunity” — they lost out on alternative investments because they were locked into an investment that failed to perform as they believed. Of course, they had the prospectus right in front of them. .

    The only investors left in the securitization remnants— are not security investors — but, instead, distressed debt investors — “derivative” swap holders — who are profiting by the foreclosures.

    This is the way it is — and, if anyone denies — they just do not know what is really going on.

    My issue is — if these distressed investors want to make money off of victims and hardships –then identify yourselves — so we know who you are and we know who we are dealing with.

  5. Please correct me if I’m wrong, but it seems homeowners have yet another foreclosure defense when a credit bid is Assigned/transferred to a third party (usually the “trust”). It appears homeowners can use a wrongful eviction/unlawful detainer defense (among others of course) because the assignee is not the “landlord”, which means default managers and real estate agents performing evictions have no legal authority to do so. BTW, how is it that the same foreclosure atty/trustee represents the assignor for the foreclosure proceeding and then his authority is magically transferred to the assignee for the eviction process???

  6. E.Tolle- your valid points can be simplified by stating that “you can’t defraud the investor without defrauding the borrower” So both sides of the scam should be reimbursed.

  7. It’s no secret that mortgage fraud was a major player in the financial metdown. It’s also no secret that EVERYONE is turning a blind eye to this fact, without so much as a mention from our so-called legislators about peeling back the layers and prosecuting the frauds and their creators.

    However, the fraud is discussed openly when it comes to the investor side of the equation. Systems are in place to “make right” the wrongs dealt the upper class, at the expense of those initially wronged, the lower and middle class.

    In a white paper released by the Federal Reserve Bank of New York entitled “Understanding the Securitization of Subprime Mortgage Credit”, they write:

    “Also the originator typically makes a
    number of representations and warranties about the borrower and the underwriting process. When these are violated, the originator generally must
    repurchase the problem loans.”

    This is precisely what needs to happen both from the investor side, AND the borrower side. When misrepresentations have occurred and warranty agreements have been broken, the borrower should be “made whole” by a repurchase of the faulty (read fraudulent) mortgage exactly as investors are. Plain and simple. Why should one benefit at the expense of the other?

    This isn’t algebra. It’s very simple math. -A- (bankster) created a product and in exchange for that product took money from -B- (borrower) and -C- (investor). The product turned out to be defective. Therefore, -A- should return any and all proceeds to -B- and -C-. Only then should they all be tossed in the slammer!

  8. Ian, never thought of that on refinances. I always thought it is a rip off. I mean to refiance and pay all those fees including the hefty broker fee, I mean give me a break, all those fees should come out of the loan interest, the money supposedly lent. A 30 year loan will generate tons of interest money and those fees should come form that part you would think. But, they need their fees to be tacked onto the loan balance so as to generate even more interest money plus so they can flip the loans, the originator, cuz they ain’t interested in keeping a loan for 30 years.

    I think if people really knew what is going on with ABS & MBS and their loans actually sold to Investors all over the world, maybe they would think twice about using their credit cards, getting a bank loan for a car, mortgage, etc. Maybe people would say no wonder the rich keep getting richer at my expense for going into debt. Not too much because the loan money was easy to get for awhile which actually creates artifical demand which jacks the price on everything. But none of this is disclosed on your credit card app or any other loan app. What the hey? Jeez, I’m 50 years old and now I find about this crap. High finance my arse, high rip-off if you ask me.

    You know what should be taught to our kids in school – the IRS code, the SEC code, the lawyer code, the finance code – accounting standards. And now you have to learn the heathcare bill code. This is what you need to know to survive in the modern world (of finance). Just 100 years ago cars, telephone, electricity was becoming mainstream. To survive you still had to best the elements, the environment of wild animals, etc. We sure licked that problem. Now our problem is the damn CODES.

    See, it says here you can’t do that. Yah, well it says here I can do it and this as well. Oh yah, well based on what is written over here, I certainly can do it. No you can’t. We’ll let Judge decide. Well based on this and that decision, both you guys are wrong, See. But I don’t know, we’ll let a Jury decide. They can’t decide either so they flip a coin. Outcome is 50/50 or who can talk the most BS.

  9. It is all in the politicians hands.


  10. Obama and his friends are letting the crooks off the hook.

  11. It’s the politicians stupid

  12. cubed2k- you are dead right, every time a borrower refinances, they should see a satisfaction of mortgage recorded in the county courthouse. Unless, of course, they “refinanced”, paid origination fees, points, title insurance,credit report fee, broker fee, fedex fee, recording fee, appraisal fee, copying fees for a new mortgage, and instead the “loan” was just modified. Same loan, the existing loan wasn’t paid off. Check your loan #s, MIN# on MERS loan lookup site, the loan application was a fraud, because you never got a new loan. Just changed some numbers on the old loan, collect 25-60k in fees for nothing.

  13. Just to expand on what Ian said, CDS are not looked at like insurance because if they were they would need to be regulated and there would need to be reserves in the bank to cover for losses. This is why AIG had to get bailed out to the tune of 160+ billion from the Gov’t. They had no $$ to cover the losses, But the Big Boys(Goldmen and others) needed to get paid off in full for their bets!!!

  14. Scot –

    in calif it is civil code section 2941 & 2939 , just google search, just highlight above, right click and google search if you use google browser. In fact, everytime you refinanced, the old loan should have been recorded as paid off and you should get a copy of the original note if you request it. So, if you refinanced 6 times, it should be recorded 6 times in the land record.

    How come nobody mentions this in the media?

    Like the media never mentions that if you defaulted on a credit card and the credit card bank (servicer since it is ABS) sends you a 1099C and you are supposed to count the default as income on your tax form. Well there is IRS form 982 that you fill out if you are insolvent, more debts than assests, and you don’t have to count the 1099C as income.

  15. Here’s a robosignor I hadn’t heard of before, Dick Garza of the SF Bay area, apparently worked with Marilyn Infante of WaMu, FBI has been investigating for some time, Garza signed for WaMu, Countrywide and others. Infante of WaMu orchestrated the phony evidence presented in court.

  16. Deb Wynn- a credit default swap (CDS) is unlike insurance in several ways. You can insure your car and collect payment in case of an accident,theft,etc. However,I cannot put insurance on your car and collect payment, nor can anyone else, because they don’t own your car. With a credit default swap, I can bet against pools of mortgage loans even though I don’t own them. I can take out one bet, 100 bets, or 100,000 bets or more. And to make sure my bets pay off, I can fill the pools of mortgage loans with loans made to dead people, people with stolen SS #s, people who neither speak nor understand English, people who can’t read, etc. And I can make sure that most of the loans are adjustable rate 2/28 loans, so I can time the purchase of my CDS accordingly, and for the cheapest price. If I could take out an insurance policy on your car, I could cut the brakelines, which would be a guarantee that my insurance policy would pay off. You would just be collateral damage,like all homeowners in the fraud.

  17. Scot- what entity is listed on the 1099C? Is it the servicer? The trustee? Someone else? Like many IRS rules, there is alot of information to digest. However, a person (entity) who is not in the business of lending money cannot file a 1099C. This would include MERS, or your servicer. Additionally, REMICS or other pass-throughs, while they are supposed to file 1099Cs, there is no penalty for failure to file, providing that they have at least 20 investors in the REMIC.

  18. I’m confused, Under what statue does it show that after a foreclosure sale that the bowwoer can get the orignal note back? And what happens if the bank buys the property for less than owed on it?(owed 286,000.00 bank bought it for 170,000.00) then sent a 1099 to me for what they wrote off. I know they did a partial charge off for 123,000.00 4 months before the sale. I am in Wisconsin

  19. Normally I hate funerals, they’re usually sad. This one isn’t. And it’s a long time coming. Let’s just hope that the future rights this wrong many times over. Perp walks are overdue…


  20. Anon…. The defsult swaps the insurance paid only the previledged have this info (FDIC perhaps) know, unless s court orders it as for accounting fraud…. There are so many ways the banks can operate on those accounting margins between black white and ” grey” so It seems
    I keep going back to fraud in the inducment they pretended to lend
    I will hold that entity accountable they set it up they set me up.

  21. Pelucheven- when did First Magnus re-emerge from ch11? I know they were in bk ct in 08. In bk proceedings they stated that they presold the notes prior to closing, but they weren’t asked who they sold the notes to? Alot of times this info is in the bk trustee’s report, if it is, you could square that with the NODs filed. Just a thought.

  22. Thanks Neil, and thanks to all the warriors…or should I say “leprechauns” for all of your commments and contributions. I’ve learned so much from this site and for that, I am forever grateful. But I’m confused as to why we warriors or “leprechauns” have not mobilized around the country to show Wall Street and ignorant judges who the real government is…For The People, BY THE PEOPLE!!! Families are suffering from illegal foreclosures every single day, most of whom have no clue as to what’s going on, I know I didn’t…. Am I missing something??? What are we waiting on??? Politicians to do something??? Pleassse don’t hold your breath…

  23. The issue I have is that these thieves are bringing the notes with blank endorsements, the judges do not want to hear it, once the pretenders portray themselves as the creditor, the holder and the owners of the note. Regardless of whether they have been paid in full or not.

    That is what First Magnus Financial is doing, Kondaur Financial Capital.

    There is a market out there for these notes and fraudulent loans.

    Firt Magnus in their closing instructions expressly told the closing company who was going to be the next servicer, and who the probable investor may have been, or at best who the securitizer was.

    They also indicated in their BK filings that they did pre sold the loans prior to settlement. This practice prevented them from actually contributing with their haircut to the loan. They sold all the loans for 103% of the loan amount.

    Now they are using the same notes they got paid for, as a tool to capitalize by foreclosing on homeowners who do not owe them anything and using the credit bid scheme to accomplish the deed. These are the same notes they never transferred to the TRUSTS.

    Now how can anyone fight this crime in court???

  24. Anonymous The stock market crashed a few years ago. It went down to what 7500? So it could go back up. We live from Virtual bubble to virtual bubble.
    Food prices has been relatively low for the past what 10 years at least? Now it it going Up.


    Houses will be low now for a few years and then it will go back up.


  25. Deadbeat borrower vs Bankster Debate.

    A must see.

  26. HI — THE A MAN,

    What a sad story. What has this country come to?? But, the stock market keeps sailing!!!!! Until the market crashes (and it will)– the government will do nothing. Politics as usual. .

    We have lost our way.

  27. Deb wynn

    If only you could find out what the loan and property was really written down to — and who really owns any collection rights – if they all. Believe courts would have different view — IF the truth were told.

  28. It’s the politicians stupid. The politicians are our only hope.

    Enron went down because of Grey Davis Ex Governor of California. When Davis went down Enron went down.

    The politicians have finally figured it out in the last election.


    Your wisdom is wonderful, but what do you do with it?
    I just saw in the tax assessors site that the bank, “us bank as trustee, IS the quote owner of my home after paying over 8,200 hundred for last years taxes with the servicer showing it for the owner! Foreclose sale in nov.-2010.
    The names mean everything?
    I also checked with the title see the copy of the original wire. One part was rubbed out.
    SO, WHO do you tell it’s fraud at this point?

  30. The FDIC said they could

  31. Anon…. Right, wish I could get it down like that
    concept .., the trustee for the foreclosure mlll or the attorney infact who is also attorney for one west bank ( debt collector – for who … Who do I owe?remind me who loaned me the money. Who lost money????? They sold my home because one west said they could because lender processing services said they could or maybe god said they could I’m waitin on thst excuse seriously

  32. E. Tolle

    Agree with you. Something missing here. There should be no bids at auctions — period — since the trust (actually DEPOSITOR) already “SUPPOSEDLY” owns the property/collection rights/etc. Of course, this is “SUPPOSEDLY”. Nevertheless — there is NO reason for a trustee to trust to bid on any property. This process is simply a maneuver because the “default” loan has already been removed from the trust. Thus, trustee has to re-establish a position — that it never held in the first place.

    In addition, see IRS rules and regs for REMIC — pass-through is for current cash flows only. Temporary investment rule allows some extension — but — this extension no where near covers — time for default, time for processing, and time for sale of property — IN THE NAME OF THE TRUST — to distribute proceeds to so-called “investors” (who have already been paid). THE PROCEEDS CANNOT BE DISTRIBUTED TO THE TRUSTEE FOR THE NAMED TRUST. PERIOD.

    Does not matter who fraudulently bids at auctions — the sale of home proceeds (and any profit) WILL NOT BE PASSED BACK TO THE TRUSTEE TO THE TRUST — who claimed to be foreclosing in the first place.

    Agree the “sales” are fraudulent — but the sales should NOT be taking place under the name of trustees — TO BEGIN WITH.

    The BANK does not do have anything to do with the property “sale” — it is gone from their control. The BANK has long disposed of collection rights. The BANK — is finished — but the current creditor still hides behind the bank name — because they know — the courts want to see a “BANK” name — in the foreclosure action/sale.

    Problem is the “BANK” — has long hit the road – AND attorneys —- “forgot” to tell the court..

    You have to understand that this is what IS happening – and HAS been happening for a long time.

    That is the way it is. And, E. Tolle —your senses are right.

  33. Must give “CREDIT ” where it is due. I remember Maher Soliman ” expert witness ” bringing up this topic almost a year ago. Enjoy reading his material, just decoding it would be helpful. Kudos to him !!!!

  34. Because it’s not mortgage backed and only the charard they put on very badly is all these criminals can do thing is when it’s all said and done there is a record of the fraudulent steps they took to get the house if your atty is smart he or she will get it in the record for another fight another day. They are going gown eventually.

  35. Wednesday 9 February 2011

    What seems like a year ago, many were ranting about marching in the streets, and I suggested that the solution would be found in the court room, one case at a time…not that I am saying I was the only one.

    Since, after a few cases, more and more and more kept coming, turning into an avalanche of very pointed cases and successes, more than most
    thought, and the tide is turning.

    This post is yet another important arrow in the proverbial quiver to arm anyone who wants to defeat the, many times incompetent foreslosure attorneys.

    Bravo to this site and all who have participated to make it stand out as an important resource.. You
    all deserve a pat on the back, as well as Mr Gartner and his staff responsible for maintaining this site.


  36. I’m missing something here….how would making them show up with real money harm them? Wouldn’t they just be paying themselves to buy the house? It’s all Monopoly money to them anyway. Or am I looking at this wrong?

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