ALLSTATE FILES SUIT LAYING OUT ALL THE ALLEGATIONS YOU NEED

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

REQUIRED READING

2.24.2011 Chase -Allstate-Complaint

JUST LOOKING AT THE TABLE OF CONTENT WILL TELL YOU WHAT YOU NEED TO KNOW

NATURE OF ACTION …………………………………………………………………………………………………….1
PARTIES ………………………………………………………………………………………………………………………..7
JURISDICTION AND VENUE ……………………………………………………………………………………….16
BACKGROUND ……………………………………………………………………………………………………………17
A.    THE MECHANICS OF MORTGAGE SECURITIZATION …………………………………….17
B.    SECURITIZATION OF MORTGAGE LOANS: THE TRADITIONAL MODEL ……..19
C.    THE SYSTEMIC VIOLATION OF UNDERWRITING AND APPRAISAL STANDARDS IN THE MORTGAGE SECURITIZATION INDUSTRY …………………..21
D.    DEFENDANTS WERE AN INTEGRATED VERTICAL OPERATION CONTROLLING EVERY ASPECT OF THE SECURITIZATION PROCESS…………..24
(1)    JPMorgan Defendants……………………………………………………………………..24 (2)

WaMu Defendants ………………………………………………………………………….26 (3)

Bear Stearns Defendants ………………………………………………………………….27
E.    DEFENDANTS’ OFFERING MATERIALS…………………………………………………………..29 (1)

The JPMorgan Offerings………………………………………………………………….29 (2)

The WaMu Offerings………………………………………………………………………30 (3)

The Long-Beach Offering………………………………………………………………..32 (4)

The Bear Stearns Offerings………………………………………………………………32
SUBSTANTIVE ALLEGATIONS …………………………………………………………………………………..34
I.    THE OFFERING MATERIALS CONTAINED UNTRUE STATEMENTS OF MATERIAL FACT AND OMISSIONS ABOUT THE MORTGAGE ORIGINATORS’ UNDERWRITING STANDARDS AND PRACTICES, AND MATERIAL CHARACTERISTICS OF THE MORTGAGE LOAN POOLS ……………..34
A.    Defendants’ Misrepresentations Regarding Underwriting Standards And Practices …………………………………………………………………………………………………..34
(1)    JPMorgan Defendants’ Misrepresentations Regarding Underwriting Standards And Practices………………………………………………35
i
(2)    WaMu Defendants’ Misrepresentations Regarding Underwriting Standards and Practices……………………………………………………………………35
(3)    Long Beach Defendants’ Misrepresentations Regarding Underwriting Standards and Practices……………………………………………….36
(4)    Bear Stearns Defendants’ Misrepresentations Regarding Underwriting Standards and Practices……………………………………………….39
B.    Defendants’ Misrepresentations Regarding Owner-Occupancy Statistics …………40
(1)    JPMorgan Defendants’ Misrepresentations Regarding Owner- Occupancy Statistics ……………………………………………………………………….40
(2)    WaMu Defendants’ Misrepresentations Regarding Owner Occupancy Statistics ……………………………………………………………………….41
(3)    Bear Stearns Defendants’ Misrepresentations Regarding Owner Occupancy Statistics ……………………………………………………………………….41
C.    Defendants’ Misrepresentations Regarding Loan-to-Value and Combined Loan-to-Value Ratios…………………………………………………………………………………42
(1)    JPMorgan Defendants’ Misrepresentations Regarding LTV and CLTV Ratios………………………………………………………………………………….42
(2)    WaMu Defendants’ Misrepresentations Regarding LTV and CLTV Ratios ……………………………………………………………………………………………42
(3)    Bear Stearns Defendants’ Misrepresentations Regarding LTV and CLTV Ratios………………………………………………………………………………….43
D.    Defendants’ Misrepresentations Regarding Debt-to-Income Ratios …………………44
(1)    JPMorgan Defendants’ Misrepresentations Regarding Debt-to- Income Ratios ………………………………………………………………………………..44
(2)    WaMu Defendants’ Misrepresentations Regarding Debt-to-Income Ratios ……………………………………………………………………………………………44
(3)    Bear Stearns Defendants’ Misrepresentations Regarding Debt-to- Income Ratios ………………………………………………………………………………..45
E.    Defendants’ Misrepresentations Regarding Credit Ratings……………………………..46
(1)    JPMorgan Defendants’ Misrepresentations Regarding Credit Ratings ………………………………………………………………………………………….46
(2)    WaMu Defendants’ Misrepresentations Regarding Credit Ratings………..47 ii
(3)    Long Beach Defendants’ Misrepresentations Regarding Credit Ratings ………………………………………………………………………………………….48
(4)    Bear Stearns Defendants’ Misrepresentations Regarding Credit Ratings ………………………………………………………………………………………….48
F.    Defendants’ Misrepresentations Regarding Credit Enhancements……………………49
(1)    JPMorgan Defendants’ Misrepresentations Regarding Credit Enhancements ………………………………………………………………………………..49
(2)    WaMu Defendants’ Misrepresentations Regarding Credit Enhancements ………………………………………………………………………………..50
(3)    Long Beach Defendants’ Misrepresentations Regarding Credit Enhancements ………………………………………………………………………………..50
(4)    Bear Stearns Defendants’ Misrepresentations Regarding Credit Enhancements ………………………………………………………………………………..51
G.    Defendants’ Misrepresentations Regarding Underwriting Exceptions………………51
(1)    JPMorgan Defendants’ Misrepresentations Regarding Underwriting Exceptions …………………………………………………………………51
(2)    WaMu Defendants’ Misrepresentations Regarding Underwriting Exceptions ……………………………………………………………………………………..52
(3)    Long Beach Defendants’ Misrepresentations Regarding Underwriting Exceptions …………………………………………………………………53
(4)    Bear Stearns Defendants’ Misrepresentations Regarding Underwriting Exceptions …………………………………………………………………53
H.    Defendants’ Misrepresentations Regarding Alternative Documentation Loans ……………………………………………………………………………………………………….53
(1)    JPMorgan Defendants’ Misrepresentations Regarding Alternative Documentation Loans ……………………………………………………………………..54
(2)    WaMu Defendants’ Misrepresentations Regarding Alternative Documentation Loans ……………………………………………………………………..54
(3)    Bear Stearns Defendants’ Misrepresentations Regarding Alternative Documentation Loans …………………………………………………….55
I.    Defendants’ Misrepresentations Regarding Full-Documentation Loans……………55
iii
J.    Defendants’ Misrepresentations Regarding Adverse Selection of Mortgage Loans ……………………………………………………………………………………………………….56
K.    Defendants’ Failure to Disclose the Negative Results of Due Diligence …………..57
II.    ALL OF DEFENDANTS’ REPRESENTATIONS WERE UNTRUE AND MISLEADING BECAUSE DEFENDANTS SYSTEMATICALLY IGNORED THEIR OWN UNDERWRITING GUIDELINES ……………………………………………………58
A.    Evidence Demonstrates Defendants’ Underwriting Abandonment: High Default Rates And Plummeting Credit Ratings ……………………………………………..59
B.    Statistical Evidence of Faulty Underwriting: Borrowers Did Not Actually Occupy The Mortgaged Properties As Represented……………………………………….62
(1)    The JPMorgan Offerings………………………………………………………………….64 (2)

The WaMu Offerings………………………………………………………………………64 (3)

The Bear Stearns Offerings………………………………………………………………65
C.    Statistical Evidence of Faulty Underwriting: The Loan-to-Value Ratios In The Offering Materials Were Inaccurate ………………………………………………………65
(1)    The JPMorgan Offerings………………………………………………………………….66 (2)    T

he WaMu Offerings………………………………………………………………………68 (3)

The Bear Stearns Offerings………………………………………………………………71
D.    Other Statistical Evidence Demonstrates That The Problems In Defendants’ Loans Were Tied To Underwriting Guideline Abandonment………..72
E.    Evidence Demonstrates That Credit Ratings Were A Garbage-In, Garbage-Out Process …………………………………………………………………………………75
F.    Evidence From Defendants’ Own Documents And Former Employees Demonstrates That The Representations In Defendants’ Offering Materials Were False ……………………………………………………………………………………………….76
(1)    The JPMorgan Offerings………………………………………………………………….76 (2)

The WaMu Offerings………………………………………………………………………80 (3)

The Long Beach Offerings……………………………………………………………….87 (4)

The Bear Stearns Offerings………………………………………………………………92
iv
G.    Evidence From Defendants’ Third-Party Due Diligence Firm Demonstrates That Defendants Were Originating Defective Loans………………….94
H.    Evidence Of Other Investigations Demonstrates The Falsity Of Defendants’ Representations ………………………………………………………………………97
(1)    The WaMu and Long Beach Offerings………………………………………………97
(2)    The Bear Stearns Offerings………………………………………………………………99
III.    DEFENDANTS’ REPRESENTATIONS CONCERNING UNAFFILIATED ORIGINATORS’ UNDERWRITING GUIDELINES WERE ALSO FALSE ……………102
A.    Countrywide ……………………………………………………………………………………………104
(1)    Defendants’ Misrepresentations Concerning Countrywide’s Underwriting Practices…………………………………………………………………..104
(2)    These Representations Were Untrue And Misleading………………………..105 B.

GreenPoint ……………………………………………………………………………………………..109
(1)    Defendants’ Misrepresentations Concerning GreenPoint’s Underwriting Practices…………………………………………………………………..109
(2)    These Representations Were Untrue And Misleading………………………..111 C.    PHH……………………………………………………………………………………………………….115
(1)    Defendants’ Misrepresentations Concerning PHH’s Underwriting Practices ………………………………………………………………………………………115
(2)    These Representations Were Untrue And Misleading………………………..116 D.

Option One……………………………………………………………………………………………..118
(1)    Defendants’ Misrepresentations Concerning Option One’s Underwriting Practices…………………………………………………………………..118
(2)    These Representations Were Untrue and Misleading:………………………..120 E.    Fremont ………………………………………………………………………………………………….122
(1)    Defendants’ Misrepresentations Concerning Fremont’s Underwriting Practices…………………………………………………………………..122
(2)    These Representations Were Untrue and Misleading…………………………124 IV.

THE DEFENDANTS KNEW THEIR REPRESENTATIONS WERE FALSE ………….126
v
A.    The Statistical Evidence Is Itself Persuasive Evidence Defendants Knew Or Recklessly Disregarded The Falsity Of Their Representations………………….126
B.    Evidence From Third Party Due Diligence Firms Demonstrates That Defendants Knew Defective Loans Were Being Securitized …………………………127
C.    Evidence Of Defendants’ Influence Over The Appraisal Process Demonstrates That Defendants Knew The Appraisals Were Falsely Inflated …………………………………………………………………………………………………..130
D.    Evidence Of Internal Documents And Former Employee Testimony Demonstrates That Defendants Knew Their Representations Were False ……….131
(1) (2) (3) (4)
JPMorgan Defendants Knew Their Representations Were False…………131 WaMu Defendants Knew Their Representations Were False ……………..133 Long Beach Defendants Knew Their Representations Were False………138 Bear Stearns Defendants Knew Their Representations Were False ……..140
V.    ALLSTATE’S DETRIMENTAL RELIANCE AND DAMAGES ……………………………144

VI.    TOLLING OF THE SECURITIES ACT OF 1933 CLAIMS …………………………………..146

FIRST CAUSE OF ACTION …………………………………………………………………………………………149

SECOND CAUSE OF ACTION …………………………………………………………………………………….150

THIRD CAUSE OF ACTION………………………………………………………………………………………..152

FOURTH CAUSE OF ACTION …………………………………………………………………………………….155

FIFTH CAUSE OF ACTION …………………………………………………………………………………………157

PRAYER FOR RELIEF ………………………………………………………………………………………………..157

JURY TRIAL DEMANDED………………………………………………………………………………………….158

73 Responses

  1. […] HELP FOR HOMEOWNERS By admin on February 28, 2011 11:48 pm on California Foreclosure Research ALLSTATE FILES SUIT LAYING OUT ALL THE ALLEGATIONS YOU NEED Posted on February 24, 2011 by Neil Garfield  COMBO Title and Securitization Search, Report, […]

  2. This is from a Supreme Court decision:

    “When two or more persons have jointly perpetrated a fraud with intent
    to injure others, justice and law combine to entitle injured parties to
    recover from any or all of the conspirators…. When, as here, two corporations, acting through authorized agents, have jointly perpetrated a fraud which was intended to — and did — injure others, a just rule of law should likewise hold both corporations jointly and severally responsible for the damages inflicted by them upon innocent parties.”

  3. How does one get a copy of the lawsuit itself? Is it a federal case or state case? If federal I can retrieve it off of the PACER system (you have to pay to view and print pages, after you set up your account with them).

  4. @Bob G – you said

    “…. What I find interesting is when an “assignment” occurs after default, the servicer often executes the “assignment” on behalf of the “assignor” (as attorney in fact) while the servicer, at all times pertinent, performed servicing duties on behalf of the “assignee”. This clearly appears to be a conflict of interest……..”
    Can you refer me to such an assignment? Thanks

    I can’t keep up with much of the discussion here, but I can definitely get this part.

  5. I have a lot of problems with IndyMac/OneWest Bank, I requested the Promissory Note an all documents related with my mortgages in January 2011, so far they have no answer me. I need to do something but I do not know what I can make them send me these documents. Could you indicate me something. Thanks for your attention to this message. LN

  6. ANONYMOUS SAID: “As to trustees purchasing properties — this is just bogus. Trustees recent certification to NJ court supports their extremely limited role.”

    Please speak to this document “FORECLOSURE DEED, UNDER POWER OF SALE IN MORTGAGE,” and the thousands of others like it where the servicer (OneWest) sells a foreclosure deed to a trustee (Citibank) on behalf of a MBS trust (LXS 2006-13): http://www.scribd.com/doc/40502900/Chamagne-Williams-Assistant-Vice-President-of-OneWest-Bank-FSB-6-15-2020

    This language seems pretty clear to me: “for consideration paid in the amount of One Hundred Eight Eight and 52/100 ($234,188.52) (sic.) grants to Citibank, NA, as Trustee for the LXS 2006-13 Trust Fund . . . the following property . . . “

  7. EVERYTHING YOU EVER WANTED TO KNOW ABOUT LIS PENDANS OR A TREATISE ON LIS PENDANS LAW

    http://www.scribd.com/doc/50024333/A-Treatise-on-the-Law-of-Lis-Pendens-REDUCED

  8. @ Bob G from 2/26 comment
    An attorney in Upke successfully forced dual litigants (BONY and some foreclosure mill) to get independant counsel, citing conflict of interest between the two (since at least one of their heads was expected to roll). Of course it was fought like he–, but to no avail. He is a link to the motion:

    http://www.scribd.com/doc/49015828/GETTNG-RID-OF-MERS-ATTORNEY-HIT-EM-WHERE-IT-HURTS

    We must divide to conquer

  9. Bob G

    Do not need any help here – Ian has more than adequately responded.

    Bob — 1066 – in an income tax form — required to be filled out by the ENTITY that owns the TRUST – as to income gains and loss to the trust. IT is not a part of corporate financial statements (balance sheet) — but — a form to be filled out by REMIC owner (Depositor’s parent) – in order to assure income taxes are not withheld from the IRS. IT IS NOT A CORPORATE BALANCE SHEET.

    It is now easier for the IRS to obtain tax information — since the REMICs have been moved from off-balance sheet to corporate on-balance sheet.

    You are not reading the TILA Amendment correctly. First, it is an Amendment to the TILA – which means all violations of TILA and penalties – also apply to the Amendment. What do you mean consumer loans? — Mortgages are consumer loans and subject to TILA.

    And, Ian is entirely correct. The Congressional intent of the Amendment, according the the FR Opinion, was to assure that consumers could deal directly with their creditor for loan modifications. If consumers are deprived of that right, that is, for failure to identify the creditor — then this is a violation of the law — and, certainly, is not a “so what” to the consumer.

    The unique part of the Amendment – it that is always stood that creditor must be identified — but, under Amendment — it is the Creditor itself — that must IDENTIFY itself.

    Servicers have incentive to keep fees going and never grant a loan mod. However, dealing directly with the creditor could be more beneficial to the homeowner – and could avoid foreclosure. If this is denied to consumer — it is a violation of the law.

    Real creditor cannot assign or subrogate rights to third party – including servicers — without now identifying itself as the current creditor. And, by law, cannot rely on third party to identify the current creditor, the current creditor MUST identify itself to the CONSUMER/Home Owner.

  10. ANONYMOUS AND IAN …

    Take a look at IRS Form 1066 “U.S. Real Estate Mortgage Investment Conduit (REMIC) income Tax Return.”

    On page 4 you will see the Balance Sheet that you are looking for.

  11. Ian

    I don’t have any take. These types of questions should be addressed either to ANON or Neil.

  12. Bob G- said “…its only when the party suing cannot show that they are the real party in interest that the case gets tossed” . Okay, this is pretty easy to grasp. But do you mean as part of “real party in interest” to include the obligatory sales from originator to sponsor, and sponsor to trust, which are almost always ignored? There have to be at least 2 true sales in order to render the trust as a bankruptcy-remote entity. What’s your take on this as it applies to both current and already adjudicated cases?

  13. Ian

    The real creditor has assigned or subrogated his rights to a servicer or other third party. That party is acting either for itself as the holder or owner of the note and mortgage, or for the creditor. It’s only when the party suing can’t establish that they are the real party in interest, that stuff gets tossed out.

    I think that this is an exercise in tilting at windmills, this TILA thing, at least in state court. You see, nobody is being prejudiced. That’s how the state court is seeing it. And where is the TILA penalty stated in the link that Anon sent on. I don’t see it. Nobody is going to get a free house or a dismissal with prejudice based on a TILA violation.

  14. Bob G- I understand your analogy re: “owning” a car. But to further illustrate my point I would add the following; I buy a new car with a downpayment and 4 yr financing. The title is in my name with whomever as lienholder. The car is registered in my name,and insured in my name by me. If I get into an accident and someone is maimed, no-one goes after the lienholder. They go after me. In a securitized mortgage, the purported noteholder,who should be the lender, or the creditor,or the person who suffers financial loss,should come after the borrower. But the person coming after the borrower is the servicer,the trust,or a law firm disguising the identity of the creditor. So we really don’t know who the creditor is, let alone the lender,which the 2009TILA was meant to address. But didn’t.

  15. Ian

    I think you are correct re REMIC gains/losses re investors only. REMIC creditor status question: I don’t need to have any gains/losses on my car in order to own it. Same thing i would imagine with REMIC trusts. Remember, REMICs are creatures of tax law. State courts don’t have to take their status into consideration in a foreclosure proceeding. Your remaining questions are better answered by Anonymous than by me. He has quite a bit more experience on that front than i do.

  16. Bob G- thanks for the illustrative response. Please correct my following observation as well- all the REMIC grantor trusts are not subject to federal tax, just the investors’ gains/losses on pass-through gains/losses. I have been unable to find an example of what a REMIC balance sheet would look like. Further, if a REMIC has no gains or losses for tax purposes, then how would they account for creditor status? An actual creditor would of course suffer financial injury if “loans” were not repaid. If the trust used its’ own cash to fund 100 loans, and all 100 loans defaulted,the trust would lose every cent. And then some. But we know that that isn’t the case because the trust isn’t the creditor. So what gives here? They are being represented to be the creditor. The 2009 TILA was put in place in conjunction with HAMP so that borrowers would be able to contact and speak directly with their lender,the creditor, who would suffer economic harm if the borrower defaulted. We know how well HAMP worked. What gives?

  17. Ian

    With all due respect to you and ANON, these statements that trusts don’t have income statements or balance sheets are untrue.

    I’ve been personally engaged in trust litigation in NY courts now for over 8 years. I have been compelled via court order to produce accountings and balance sheets for the two trusts of which I am a trustee and beneficiary.
    The trusts have bank accounts. I write checks against these bank accounts. The checking accounts and cash balances are listed on the trust balance sheets. Right now I am looking at IRS Form 1041, U.S. Income Tax Return for Estates and Trusts. I signed this document and filed it with the IRS.

    If what you and Anonymous are saying is true, then all the foregoing is merely a figment of my imagination.

    Unlikely.

  18. BOB G- what ANONYMOUS has been underscoring on this site for some time regarding the 2009TILA amendment(now law) is that the “covered person” is that person who can account for a particular loan on their balance sheet. And since trusts have no balance sheet,as they are pass-throughs, foreclosure actions brought under the guise of a trust are not valid,per the FRB’s own rules. The fact that many if not all loans never made it into the trusts is irrelevant as to the trust’s creditor status,which is nonexistent.

  19. ANON

    Not to put too fine a point on it, but so what if they don’t tell the debtor who is the creditor? They say it’s X and you say it’s not X. Unless you can prove that it is not X, then the case is not going to get dismissed. And even if it does get dismissed, it typically is not dismissed “with prejudice.” So they get another bite at the apple. State courts hearing these foreclosure cases aren’t going to pay much attention to this TILA defense. I don’t think that I’ve ever seen a dismissal with prejudice because of a TILA violation.

  20. ANON – RE TILA

    1. Only applies to Consumer Loans

    2. Don’t see any penalties listed for violations, or who has a right of action

    3. Wells F as ttee bought a prop from its servicer via an assignment of credit bid in my case.

  21. Bob G

    Link for Fed Res Opinion (now Rule) is —

    http://www.ots.treas.gov/_files/86442.pdf

    Read the “Section by Section Analysis – iV”

    As to IRS – do not know what they are doing — or should be doing. But, if anyone else is fooling the IRS — they would get caught.

    As to trustees purchasing properties — this is just bogus. Trustees recent certification to NJ court supports their extremely limited role.

    Watched Academy Awards — highlight for me was that — “Inside Job” won best Documentary. Director’s first words “three years into the crisis – and not one CEO is in jail.”

  22. Bob G,

    Its globetrotterz1@yahoo.com. Thank you much!!

  23. Make it Happen

    give me an email address and i’ll forward the doc to you.

  24. Bob G.

    Sorry, I’m asking you to elaborate on how the trustee’s functions differ after a loan goes into default? Thanks Again

  25. Anon,

    If old REMICs are dead, how are “credit bids” being assigned to the REMIC “trusts”? Why are “trusts” purchasing properties they should already own? If we are to rely on the “trustees” responses to NJ’s Amin Order, how can the “trustees” blame the servicer for assignments and purchases regarding the “trusts” without the “trustees” knowledge? Even when it happens in the foreclosure process? How are the foreclosed properties then sold through the Multiple Listing Service listing the REMIC “trusts” as the seller? Where are the proceeds going? Wouldn’t closing attorneys have this information? They do forward proceeds to the seller right?

  26. Hi Bob G.,

    Will you elaborate on the following statement, or point me to your previous post?

    “Take a look at NY trust law. It is well settled. In these biz trusts the ttees have a ministerial function until defaults occur. See my prior post. I litigate in NY courts. Trust me on this one.”

    Thanks

  27. Dear Moderator,

    What’s happening to my posts? Am I saying something that I shouldn’t?

  28. ANON

    Ok, so tell me how if the old REMICs are dead, can the IRS impose the 100% tax on all the distribs that they made to investors?

  29. Bob G

    Agree with you that judges are hitting the “Next” button – and TILA Amendment — will be difficult to get a ruling on. I have only seen one case where it was utilized — and believe case was settled. In fact, courts could entirely avoid rulings on new law – by either ignoring — or pushing cases toward settlement. Nevertheless — it should be used more frequently.

    We have discussed before that the old Remics are dissolved and dead. They have been torn apart by swap payout – with the waterfall structure completely dismantled. Default “Trigger” events – effectively leave the REMIC — in default – and non-operating. Any home owners who are still paying — those payments are not being forwarded by servicer to trustee — for original trust REMICs. In fact, government has confirmed to me — for those tranches they hold — that they cannot verify where any “current” cash payments are flowing.

    The problem is that servicers will state that the REMIC is the creditor because it may have been intended to be (right or wrong) – the original creditor. Servicers ignore law (both FDCPA and TILA Amendment) to identify the current creditor – this is both for paying home owners – and those in default. And judges contention “that you owe the money” — does not help. This is why success we are seeing is more likely in BK — where current creditor MUST be identified. Of course, up until know – servicers were also getting away with concealment in BK courts.

    Have strong reason to believe that many F/F loans were falsely placed into default – with fraud in insurance collection (believe there is a current investigation) F/F would normally do a refinance – but loans that were within loan limits — were not always refinanced by F/F – at subsequent refinance. The question is — Why?

    F/F were losing ground to bank securitizations. As a result, F/F starting working with banks – purchasing some MBS tranches from banks. That is called a “wrap” – and different from your guarantor description – since subordinated bonds (similar to support tranches) were not guaranteed. Check out Wisconsin Avenue Securities – Fannie Mae “wraps.” May even be able to find exact tranches from bank REMICs that were purchased and included in wraps..

  30. ANON

    Good postings. Knew that L.R. was engaged differently today, in fix up mode.

    I will take a look at the TILA statute again. Not sure that the Fed’s rule will carry the day for anyone here. Banksters just claim they are the creditor. Hard for a homeowner to prove otherwise, especially with oral and written fabrications from the banks and their mills. Judges are just hitting the “Next” button.

    What do you mean by this statement: ‘many loans were falsely “bumped” from Fannie/Freddie qualification.’ ??? Please clarify.

    Also, please clarify and elaborate on the following, as there may be some real gold in this one: “Old REMICs are dead.”

    And this one: ‘ There were what you call “wraps” – certain single tranches in SPVs — sold to Fannie/Freddie REMICs. But, those tranches sales were for pass-through of receivables to Fannie/Freddie only — not a sale of of the loan/note directly to Fannie/Freddie. Which is why Fannie/Freddie — may claim your loan/note is NOT a Fannie/Freddie loan. ‘ F&F do biz 2 ways: they buy the whole loans for their own account, securitize the loans and sell the MBS to investors, or they act as the ttee for the lender, guarantee the MBS as to P&I for a fee paid by the lender. Is this what you mean when u say they bought the pass-thrus?

    Thanx.

  31. usedkarguy,

    REMICs — can acquire REO (bank-owned) properties – at the time of the REMIC set-up. However, this is limited to a very SMALL percentage of total loans. And, they cannot acquire foreclosure properties with any knowledge of default of the loan — and cannot acquire after the 90 start-up date of the REMIC. That is — no assignments afters 90 days. However, there is a 2 year exception — for qualified substitute loans. Meaning — loan cannot be in default when assigned after 90 days – and MUST meet criteria for a qualified substitute for a repurchased (removed) loan.

    13 months rule applies to loans that were qualified for REMIC inclusion – thus, not in default within 90 day of acquisition — but later defaulted. Under this rule — default, foreclosure, purchase of property — MUST all occur within 13 months — or not qualified as a REMIC investment status.

  32. Bob G.

    Louis Ranieri is still in the business — distressed debt buying – and restructuring business. Actually – neighbor – of a friend. “Lew” did not put financial structures together — without legal advise.

    Believe “Lew” – is trying to help fix much of what went wrong. Believe he did not intend for all to have gone wrong — the way it did. The process, however, was a free-for-all – a place for interception of loans – a place for intrusion of fraud.

    As to Fannie/Freddie – yes some tranches were sold to Freddie/Fannie — but MOST did not qualify for sale to Fannie/Freddie – whether or not Fannie/Freddie actually purchased. And, many loans were falsely “bumped” from Fannie/Freddie qualification.

    There were what you call “wraps” – certain single tranches in SPVs — sold to Fannie/Freddie REMICs. But, those tranches sales were for pass-through of receivables to Fannie/Freddie only — not a sale of of the loan/note directly to Fannie/Freddie. Which is why Fannie/Freddie — may claim your loan/note is NOT a Fannie/Freddie loan.

    TILA Amendment should be important to you – it is this amendment that requires identification of the current creditor to borrowers. It is RULE – it is law – it stands. You have to take a look at it — and realize that this is now law. Congressional intent was to — provide borrowers with the identity of the CURRENT creditor – including address and contact information. Courts have just not been forced to confront – because no one has used to date. They will. The Amendment has nothing to do with consumer credit. That is the OLD TILA law.

    With respect to REMIC laws — IRS is catching up. Old REMICs are dead. IRS is relentless — they will eventually prevail. Once courts catch up — a big problem for concealed creditors. Maybe why – foreclosure attorneys conceal the current creditor in courts across US.

    Everyone is trys for bailouts — for swap bailout – for pension bailout – for bonus bailout – for investor bailout – for bank bailout — for government worker bailout – etc etc.. Only the home owners have been left in the cold – they are NOT bailed out — despite fact they are victims of fraud. This will not last. Why?? Economy will not survive without government addressing fraud against home owners and foreclosure fraud. As Mr. Ranieri states — these are PEOPLE – and economic devastation will result if all is continued to be ignored.

    You can try to bleed as much as you can from the American public — until there is no more American public. Serves no purpose or function – and produces no profit for anyone — when fraud is utilized. The people are the source of profit – without them – there is no profit to investors — no matter how you label “investors”. Without people – there is NO economic growth — industries, banks, economies, and – distressed debt buyers– cannot profit.

    How many more home owners will be sabotaged before banks/debt buyers realize — there is no more future profit?? Time for debt buyers to come forward – and negotiate. Once this is done – perhaps there can be a return to profit — for all. Settle — or keep going as is — which is not productive for anyone.

    Thank you for your response — appreciate it.

  33. ANONYMOUS, my PSA states up to three years for disposal of REO. WFHET05-2

  34. Oh shit! That WAS SYNONYMOUS. Thanks for the time you invest here.

    You too, Bob.

    That’s better.

  35. Bob G: thanks for that, and I’m reading as long as you’re writing.

    You too, SYNONYMOUS.

  36. Feedback

  37. Bob G.,

    1. Will you elaborate on “Take a look at NY trust law. It is well settled. In these biz trusts the ttees have a ministerial function until defaults occur. See my prior post. I litigate in NY courts. Trust me on this one.”? Or will you point me to your prior post? How do Trustees’ functions differ after a default?

    2. Is the servicer the agent of the “trust”, the “trustee”, both or neither? What I find interesting is when an “assignment” occurs after default, the servicer is often executes the “assignment” on behalf of the “assignor” (as attorney in fact) while the servicer, at all times pertinent, performed servicing duties on behalf of the “assignee”. This clearly appears to be a conflict of interest, but more importantly, once the “assignment” occurred after default, under what authority is the servicer performing its duties? In other words, if an “assignment” occurred (whether the servicer executed it or not), how does the servicer’s agency transfer from the assignor to the assignee without any documentation or disclosure to the homeowner?

    3. BTW, the “Trusts”, “Trustees”, “Servicers” and their legal counsel are all JOKES and LIE THROUGH THEIR TEETH!!! They like to pass the buck, but the truth is…THEY’RE ALL IN BED TOGETHER!!! I challenge Mr. Ronaldo Reyes of Deutsche Bank National Trust Company to explain why DBNTC would hire the same defense attorney as the Servicer to represent DBNTC in a case to enjoin a foreclosure action based on fraudulent documents submitted to the court (including an Assignment of Deed of Trust). If Mr. Ronaldo Reyes’ averments in the Admin Order are true, why hire the same attorney as your adversary? And even more puzzling is the fact that Mr. Ronaldo Reyes executed the PSA pertaining to the alleged trust, so he would know the Assignment was a fraud better than anyone….unless he ROBO-SIGNED the PSA….which would not surprise me at all!!!
    All feedback is welcomed…

  38. ANON

    TILA refers to consumer credit only. Not of too much use to me. Ranieri. Think I met the guy once at Salomon Brothers back in the mid-1980s. Lew didn’t put these structures together from a legal standpoint. He put them together from a financial, logistical and economic standpoint. Nevertheless, I think that he wrote a book on this subject. I’ll have to get it and review. But Lew has also been out of the biz for quite a few years…i’m guessing that his successors on the Street have added a few wrinkles and “improvements” to Lew’s original constructs.

    In any event, my guess is that the senior bank held tranches that you refer to may have been originally held by the banks, but not any more. my guess is that these A+ credits were sold to Fan and Fred. This would account for BA and WF selling F&F $600B in mortgage notes last year, and probably more in prior years.

    With respect to REMIC laws and conformance, forget it. No one is abiding by these laws, and the Feds aren’t going to pull the plug on all the players and impose 100% taxes on all the deals, because that would mean that they would just end up bailing out all the banks and pension funds all over again.

    I will think about the rest of your statements and get back to you later.

    thanx for your contributions.

  39. Bob G.,

    Sorry this is so long — and sorry if I repeat myself. I think we are both trying to get at the truth – and do not intend to be confrontational with you. You make important points. We all have a right to our conclusions – and, I respect yours.

    Louis Raniere (think he should know) made an important point about how subprime securitizations were set -up. He explained that the process was quite different from traditional underwriting. The difference – he said – was that the “Support” tranches were sold first. – and that the banks then purchased the senior pass-through tranches. Putting this together with what we do know — reveals the following process.

    1) Banks purchase mortgages/loans from originators. Likely purchased at or shortly after closing, thus, involving table-funding.

    2) The banks accomplish the purchase via it’s subsidiary “Depositors.” Thus,the “seller” (originator) sell the loans to the Depositors.

    3) Depositors set up trusts (thus they own the trust – know you disagree – but that is OK) and assign loans to the trust. There is a difference here between “assign” and “sale” — although courts rarely understand the difference – and makes little difference in debt collection – but, as you will see – it does make a difference as to the current creditor – which affects debt collection). In an assignment, the loan ownership can (not always) remain with the assignor. But, with a REMIC trust — only the cash proceeds may be passed through to beneficiaries. Therefore, there cannot be a sale of loans/notes to beneficiaries. The trust may hold legal title – with trustee acting in a fiduciary capacity — but the trust is only a holding place for the actual loans/note. Legal title is not passed through to beneficiaries.

    4) All certificates to the trust are sold to banks -other subsidiary — it’s security underwriter. In this process it is accounting conversion – loan receivables converted to securities.

    5) The security underwriter sells the support tranches first (according to Ranieri) . It was the support tranches that formed the basis of subprime securitization. These support tranches were a small percentage of the total dollar amount that was to allow pass-through of cash proceeds. The bank then kept the senior tranches itself – although they could – and may have – sometimes sold senior tranches to another financial institution. Thus, since senior tranches composed most of the total funding — and banks kept those tranches — and the assignment to trusts was only an assignment — and there was only an accounting conversion in the process — the trust did not need actual funding – it funded itself.

    6) The support tranches, also according to Ranieri, where then used for CDOs. For subprime “investment” – this is where the bulk of outside (bank) investment was — CDOs.

    7) When crisis hit – government provided swap protection (AIG bailout) – thus bailing out “derived” investors — and took the toxic “securities” — off the books of the banks. The banks were given time to bring the trust securities back onto their books — thus a conversion back to the receivables they “assigned” and converted.

    8) Before the crisis – banks just removed non-performing loans from the trusts (they actually just zero-balanced) and sold collection rights in bulk to distressed debt buyers. It is for these distressed debt buyers that servicers continued to service for – only they never tell you this. When the crisis hit – the capital to purchase collection rights also dried up — and it was the government who continued that process. However, the process has returned to the banks.

    Putting the structure of a trust aside, foreclosure/debt attorneys, and government agencies for that matter, will always say the “loan” is not sold. This is true –as charged off loans cannot be sold. The trick is that collection rights to the charged-off debt are sold. And, servicers refuse to divulge who currently owns collection rights.

    If you want to say no one owns the trust — that is a point that really is not relevant — as these trusts have been torn apart and, therefore, dissolved. It is, however, important as to who owns the collection rights to the loans. Depositors (parent bank) always own the loan/note UNTIL they dispose of collection rights — at which point – loan becomes unsecured. As a result, foreclosure attorneys need to (falsely) state that the loan remained in the trust in order for a loan to be “secured” – otherwise could be a subject of discharge in BK. Foreclosure attorneys do not like BK.

    It is likely that CDO investors lost their principal investment – although many were paid principal back. Investor lawsuits are largely for interest that was promised — but not fulfilled.

    As to your “credit bidder” and assignment to trustee. Do not dispute your process. However, there are strict rules as REMIC rules regarding foreclosure property as an investment. In order for a REMIC to hold foreclosure property as an investment – 1) the foreclosure must be fully completed within 13 months – from default to sale of property 2) the REMIC – must, of course, be a performing REMIC. So what can the fiduciary trustee do with it’s assignment?? – Assign it back to the Trust? Trustees cannot assign anything — they are just a fiduciary. And, the only tranche likely surviving — is the bottom “equity” tranche – which is servicer owned. Thus, it is the servicer that receives foreclosure proceeds – and either keeps for itself (if collection rights have not been sold) — or the servicer is acting on behalf of an undisclosed distressed debt buyer — who has made a nice profit in the whole process.

    Agree with you — about lying through teeth. And, will add that the attorneys for “plaintiff” is doing a lot of the fraud in court. This is why NJ is asking for attorney certifications as to information provided to courts. Hope this holds — and believe it will – in NJ. And, if other states implement this process — we will see a big change in how foreclosures are conducted.

    The important is issue is the identification of the current creditor is being concealed in foreclosure actions. This is fraud. And, by the way – the Fed Res Opinion to the TILA Amendment is now RULE — meaning it holds as law. It is NOT just an Opinion — it is now law. As a result, every foreclosure victim has a right to have their current creditor — identified.

    Finally, Neil posted an important article, yesterday, about phantom loans and it is his belief that this had to do with “over-collateralization.” May be — but believe the issue is far more serious and may involve insurance fraud, as I have discussed before, and/or loans that were falsely placed in default and, therefore, removed from securitization, with collection rights falsely sold to third parties. This is an issue we should all be looking at.

    Thank you for your response to me. Again, appreciate and respect – all views.

  40. I have my feelings on what is taking place. But will hold that for judgment day.

    What a tangled web they weave.

  41. ANON

    Work with my little pea brain on this.

    First of all…you’re preaching to the choir…I know that the investors don’t own the notes. I got that. The investors are like annuity purchasers. So let’s strip out of the discussion all the stuff about investors owning the notes and having foreclosure rights. They don’t. That’s a given.

    But someone has to own the notes, however. You say that it is the Depositors. You say that the Depositors own the trust. But that cannot be correct, because nobody OWNS the trust. There is no such thing as “owning” the trust. Think of the TRUST as nothing more than the INTERIOR of a legal vessel. Nobody owns the empty interior space. What is owned is what is put INSIDE the empty legal vessel. And that is the notes themselves. And the legal title to those notes is owned by the Trustee.

    If you are going to say that the Depositor owns the Trust, then legally you are not describing a legal entity known as a trust. There is no trust to be owned…only the assets placed in the trust, and the trustee is the legal owner of those assets.

    Now for a little legalese: Forget about what the Fed Reserve says. It’s their legal opinion, nothing more. Just because they say it is something does not make it that specific something. Ditto for whatever the private equity guys are telling you. Some of these guys have come to me for explanations of what’s actually going on in a legal sense.

    You say that the security investors have been paid by swaps. I don’t necessarily see it that way. What I see is certain tranches were covered by swaps, the swaps at the bottom that were owned by the deal principals themselves. Everybody else got “waterfall coverage” to the extent that it existed to service their tranches. If all the security investors got swap coverage, there would be no investor lawsuits against the banks, because there would be no damages to recover.

    Take a look at NY trust law. It is well settled. In these biz trusts the ttees have a ministerial function until defaults occur. See my prior post. I litigate in NY courts. Trust me on this one.

    Here’s what I’ve observed. A servicer conducts the foreclosure on behalf of the originating bank or the trust/trustee. The servicer obtains a foreclosure judgment. At the foreclosure judgment, the servicer or originating bank or trust/trustee is the winning bidder (at least in today’s environment). This winning “credit bidder” then assigns its bid to the trustee. This might be a private bank trustee such as Wells Fargo…or it might be Fannie or Freddie, the party that really owns the note, and carries it on its balance sheet.

    Now I can prove this with hard evidence. I’m not speculating, nor am I making any conclusory statements. A synthesis of our respective positions may be in order. I don’t know.

    But here’s what I do know: the banks and the deal principals lie through their teeth. You cannot take as gospel what you read in Complaints or in Answers to the Complaints. I’ve read them all. I know whereof I speak on this issue.

  42. mary,

    Aahh — this is the problem — who is the real plaintiff??? The Trust — the trustee – the servicer — undisclosed current creditor — originator ???— WHO IS THE REAL PLAINTIFF— Will You Please Stand UP???

    (Investors — please sit down).

  43. Bob G

    Oh – Bob — No — mortgage note never leaves the Depositor — who owns the trust. Trustees have now testified that the Trust own the loans/notes — not the security investors. But, someone owns the Trust. Beneficiaries of trusts — are not the owners — they are only beneficiaries — this is standard. and confirmed by the Fed Res. This has also been confirmed to me by private equity firms. The note is not passed on in securitizations — securitization only means pass-through of cash proceeds. The note ownership remains with the owner of the trust — the DEPOSITOR owns the trust. This is the cause for all the “foreclosures” reflected on banks balance sheets (if they have not already disposed of) – that are causing havoc. NO investor reflect a foreclosure on it’s balance sheet — they HAVE NO balance sheets (unless they are an investor debt buyer). .

    Security Investors NEVER own the note. Security Investors can only be investors in cash -flow proceeds — NOTHING MORE. This is what I have tried to convey for a long time. And, trustees have just confirmed to NJ Court. Security Investors have NO right to foreclosure proceeds. Security investors have been paid by swaps – and never had right to foreclose..

    The money flow has nothing to do with note ownership. And, this is whether or not money flow was properly administered – or not. Money flow is only for pass-through of proceeds. Again – NO NO NO — the notes are NOT given up in exchange for money flow. This is what they have wanted YOU to believe. IT is false.

    Trustee’s function is NOT ministerial — the servicers function is ministerial. Trustee function – – is a legal representative — an attorney – if you may – an agent — for the trust owner – the Depositor.

    And, Trustee’s role ends upon default – and removal of note’s collection rights from the trust. Servicer takes over — either for itself – or for an undisclosed default debt buyer.

    This is the way it is – Bob — any other speculation is just false. And, has been false in courts across the US. This is now changing.

    Do not know how many times I can say it — SECURITY INVESTORS DO NOT OWN THE NOTES. – and NEVER DID.

    Finally, – servicers cease payments to trustee – after 3 months. THREE MONTHS — after which default loan is removed.

    Bob — you need to keep an open mind. Please — forget the money flow — and focus on corporate balance sheets. .

  44. ANON

    I’m a bit confused by your post. Trustee may be the legal rep of the trust, but that does not mean that the trustee does not hold legal title to trust assets. How do you figure that the Depositor owns the trust assets? Didn’t the investor money flow through to the Originator, Depositor or Sescuritizer? That money ended up somewhere, and whoever got it gave up the notes in exchange, right? So if the Depositor or any of the other deal principals got the cash, they had to give up the notes. And monthly P&I pmts are being made to the servicer, that was hired by the trustee or custodian to perform that function. The trustee’s function is ministerial until such time as a default occurs, then under NY law it must swing into action as a full fledged fiduciary with all the attendant obligations.

  45. Homeowners must track down other that have been foreclosed on in the same trust and make a database and it will be easier to pull those resources toghether to prove that you were forced by servicer to default not counting a risky mortgage was written by a devious warehouse lender or corresponding mortgage broker. lets prove that 6000 homes were foreclosed on a trust that only had 2000 loans 1st and seconds or helocs they know we have no unity or organization to put the real fact toghether. Finally when 6000 foreclosed pissed ex homeowners show that theywere foreclosed on . Are the investors going to ask for proof of home that were really in the trusts. The mills know these trust dont even exist assymetrical info lawyers know free money. Lets track were the funds go when someone sell a foreclosed house.What aaccount is the money going to. Huge thefts they would sell you any house at any price because the house was free the servicer or goverment already picked up the lawsuit to foreclose fees and trash out better than goverment grants or medicaid money. Maybe better that military money tax money is the best profit ever.

  46. The Gomes decision in CA was an Appellant Court decision. It takes precedent in CA courts now, until it is overturned by another court, ie the CA Supremes.

    This ruling was inevitable. Almost every civil court has ruled like Gomes for decades. Only in three BK courts have other rulings occurred. Dependent upon whether those courts ruled under Federal or State Statutes, those rulings may now be subject to being overturned, according to my best attorneys.

  47. Question: Is is a normal practice, for Plaintiff trust
    to take the deposition of defendants in a foreclosure suit?

  48. cubed2k,

    Your point is important. Servicers can only verify “payment history” — they have no personal knowledge of the validity of assignments – and PSAs do not grant the servicer, by power of attorney, the authority to execute assignments.

    Christine and John Gault – we do not have attorneys bringing cases to highest courts to resolve issues of conflict in different jurisdictions. We only have “investor” class actions — and any class actions for borrowers usually results in settlements that benefit the attorneys — and with no legal decision on major issues.

  49. M.Soliman,

    I do not say it — the trustees – both US Bank and Deutsche Bank – say it. That is what is in their response to NJ Court. I say – since the Depositor is last to supposedly purchase loans in the chain — and the Depositor sets up the trust – the Depositor owns the Trust — and loans are not passed through to beneficiaries — only cash proceeds passed through.

    The Depositor is owned by the parent bank. Yes, shareholders own the parent bank — but we, in counter-claims, do not sue shareholders. And, foreclosures would never be filed by shareholders – part of the reason I never believed beneficial investors in trusts — were filing foreclosures — and recovering proceeds in the process.

    If shareholders (and security investors) have an action for fraudulent investment — they sue the bank — as a legal entity (corporation) – and do not sue the bank’s “customer borrowers”. And, our actions for fraud are against the bank — not the shareholders – although shareholders will suffer if claims against bank are large enough. We also do not sue security investors. We sue the entity that holds the loan – or collection rights on its balance sheet – whether or not it is on balance sheet – or in off balance sheet conduit. We are separated from shareholders and security investors – as to legal process.

    By not naming the actual party in foreclosure actions – including falsely named trustee/trust and/or MERS as the plaintiff – the servicers (who the trustees admit in response to Court – are bringing the foreclosure actions) prevent a direct counter-claim by homeowners because the current creditor and true party is concealed.

    Also, MERS is not one of six banks who are largest subject of the NJ OTC – because they filed the most foreclosures (BofA, Wells Fargo, Chase – among the six). MERS responded to NJ court – as a minor player in foreclosures in NJ (as did the trustees). In addition, many mortgages do NOT use MERS as nominee.

    It is clear from the responses to NJ Court that it is servicers that are bringing all the foreclosure actions. The servicers then falsely name the trustee/trust or MERS (or the servicer themselves) as the plaintiff – and fail to name current creditor – as mandated by the 2009 TILA Amendment. Do not believe this false practice will survive in NJ – as a result of the responses to the court. This does not mean the practice will not continue in other states. But, NJ is national leader – and the end result of the OTC – should eventually affect other states.
    .

  50. Okay — so lets clarify — US Bank, NA, is only acting in trustee capacity — and has nothing to do with foreclosure actions – because the trust owns the loans.

    When you say trust owns the loans – what are you saying? The common stock shareholders own the loans who are one in the same with the banks prinicipals . Its a TRS (your winging it)

  51. Where the beneficiary is represented by a nominal interest MERS, therein have parties willfully obstructed a litigant from its right to due process of law. A registration under MERS for purposes of the transfer of interest in a security is verifiable and will show the true holder in due course is not an interested party to the foreclosure.

    M.Soliman
    expert.witness@live.com

  52. John Gault,
    I understand Judicial Districts across the country, but how about across Ca? Usually, (I say usually becasue I am convinced that everyone involved in the courts (most attorneys exlcuded)or government in this State should all be placed in asylums due to their being certifiably nuts) once one court in Ca determines something, it stands as precedence if not formally written into law. So how could one CA court determine MERS has no standing, yet another CA court (that is not above the first court) basically reverse that decision? Does it have to do with if it is a BK court or not? Or does is really have to do with each individual case at this point because there is no “real law” on the books regarding this situation other than “precedence or case law”? I am not in the legal field, however, do have a paralegal certificate, so I have a little bit of knowledge (albeit very rusty I must admit as it has been 15 years or so since gettiing that certificate), which is why I am confused with the two rulings from the same state. Now that I have typed this, I have realized that it must have to do with the particular CA case/CA court. Or am I way off base? I am still trying to decide if I want to consider a lawsuit against MERS and this may make me wait a bit longer to see what else comes out of the courts, or should I not wait and “go for it” and keep my fingers crossed? It seems at this point that any case in CA will be a 50/50 proposition at this point.

  53. Keeping up with new foreclosure rules is like ‘nailing Jell-O to the wall,’ lawyer says

    http://www.housingwire.com/2011/02/24/keeping-up-with-new-foreclosure-rules-is-like-nailing-jello-to-the-wall-lawyer-says

  54. usedkarguy
    I have started putting up pleadings at scribd. But, the problem is one can’t know they’re reliable, that is, if the issues have been properly plead and will lead to the desired result, or even if they ARE properly plead if the court will see things your way. The ones I posted and will continue to post are informational only. Procedure is the tricky thing. And the other guys generally have it down cold.

  55. Christine, they are different ‘judicial districts’ and different courts within those jurisdictions. One court’s determination is not binding on all other courts. Like if Colorado rules ‘yes’, New York may not rule ‘yes’ on the same issue. But, one court at a time, we’re getting there. As far as I know, that’s all we can do.

  56. There was a huge article in the Contra Costa Times stating the another Judge in Ca just last week ruled that MERS CAN foreclose on people. I am starting to get confused, can they or can’t they? In the last couple of months we have had different judges rule differently. Any body have some insight?

  57. Anon, it still boils down t assignments. Where are the assignments, land records? From my point of view per the land laws, where are the assignments? No mention in the lawsuit? I looked it over and never saw mention about assigning loans. God damn it, in Calif assignments are supposed to be recorded. That Allstate lawsuit talks about improper loan writing, but what about assignments? They keep bypassing that, not paying attention to it, right? If I were ALLstate attorneys I would ask these questions, how were mortgages transfered per land records recording laws. If a loan is paid off by borrower, then the original note, if requested by borrow and per the UCC in Calif should be forwarded to the borrower from the creditor, the guy who loaned the money. Right?

  58. This is why we must comb the major blogs newspapers and comment.

  59. This is what we need.

    New York Councilman storms Chase Bank.
    This is the Real World We Need the People The Masses on our side.

    Law + The People = Victory

    We have the Law but we are only now getting the people.

    http://www.huffingtonpost.com/2011/02/24/new-york-councilman-storms-chase-bank_n_827942.html

    NEVER AGAIN
    BE STRONG.

  60. This is what we need.
    New York Councilman storms Chase Bank.

    This is the Real Wo We Need the People The Masses on our side.

    http://www.huffingtonpost.com/2011/02/24/new-york-councilman-storms-chase-bank_n_827942.html

    NEVER AGAIN
    BE STRONG.

  61. I can think of several defenses here. It speaks to the systemic predatory lending that was occurring. The banks were anxious to sell loans ESPECIALLY bad ones because they purchased CDS (bets that the loans would fail). They knew they were going to fail because they handpicked the loans to do just that, fail and then collect the rigged bet.

    Plain and simple they cheated. They cheated the investors and they cheated the homeowners. They should be in jail as far as I’m concerned for what they did. They set up the investor to fail and the homeowner to fail and they sat back and waited for the proceeds of their immoral behavior to come to fruition.

  62. G: agreed. How about putting up some pleadings of real cases filed by homeowner attorneys? This investor stuff is useless. We know they misrepresented the quality of the loans. But that in and of itself provides no cause of action for a borrower.

  63. HI Ian

    I try to separate my comments — from their formal response to the court. Responses by trustees were delayed.

    You can find all responses by going to NJ Courts — and clicking on “HERE” – under — “In the Matter of Residential Mortgage Foreclosure Pleading and Document Irregularities.”

    Would really like other comments on this — but – absolutely convinced — “investors” — have nothing to do with foreclosures. The mortgage loans themselves — were NEVER sold to investors. But, collection rights — may be sold — outside the trust. It is the Depositor – and Depositor alone – who owns the trust — and only Depositor has personal knowledge has to whether loan was sold to them – and part of their so-called set up trust — and whether or not the loans were subsequently disposed of. Servicers have no knowledge — only ministerial – however, it is the servicers that are falsely bringing foreclosures — and servicers producing false assignments.

  64. ANONYMOUS-good post,but where did this explanation come from? good counterpoints as well. Now,are their responses and explanations legally accurate? Or is this just spin? In other words,what they are alleging that their responsibilities are or are not may be just a play on words or a grey-area legal interpretation. Thanks for posting.

  65. May want to post elsewhere — Response from “trustees” ( US Bank, NA and Deutsche Bank, NA) filed in NJ — for Order to Show Cause. Link for US Bank, NA response:

    http://www.judiciary.state.nj.us/superior/cert_us_bank.pdf

    Numerous important issues here —

    1) US Bank only responds in capacity as trustee – not “Individual standing” entity.

    2) US Bank states — “In its capacity as RMBS Trustee, the Trustee, as the legal representative of the securitization trusts, holds legal title to pools of mortgage loans OWNED by the securitization trusts for the benefit of investors.” (my emphasis)

    Comment — the trust – not investors – owns the mortgage loans — and, the Depositor owns the Trust (according to law of Trusts — there must be a owner — and it is not the investors — who are only the beneficiaries of pass-through (and never the creditor).

    2) Trustee is “legal representative” for the Trust — not investors — and, since someone must own the trust – (Depositor) — trustee is legal rep for Depositor.

    3) Servicers duties under PSA are only ministerial. Servicers cannot cause assignment — and cannot verify as to current whereabouts of loan. Assignment, according to PSA, is caused only by the Depositor — which, it is now clear — owns the trust – and loans. Loan ownership is NOT passed onto investors — investors are only beneficiaries of cash proceeds generated from loans.

    4) US Bank, NA – as trustee — “did not file any mortgage foreclosure actions in NJ in 2010”

    Comment — Huh?? do they mean they filed before 2010??

    5) US Bank — also states — “Confusion may arise from the fact that loan servicers bring foreclosure actions in the name of “trustee” – as trustee for “trust”., because a trustee in its capacity as the legal representative of the trust, owns the collateral that evidences the trust’s interest in the mortgage loans being foreclosed.” ….”Thus, trustee did not file any residential mortgage foreclosures actions in NJ in 2010.”

    Comment — Okay — so lets clarify — US Bank, NA, is only acting in trustee capacity — and has nothing to do with foreclosure actions – because the trust owns the loans. However, US Bank, as legal representative – owns the collateral?? How did they get to own the collateral? And, simultaneously have nothing to do with the foreclosure? . Must be talking about all those indorsements to the “Trustee” on notes. Thus, trustees, in this instance, are not acting in trustee capacity — they are acting as “Holder is Due Course” — which means they are initiating the foreclosures.

    What we do know according to the testimony is that — the trust owns the loans — not investors. And, therefore, someone else must own the “Trust” — who owns the loans— have always said — it is the Depositor.

    We also know that servicers’ jobs are ministerial — but they are the ones filing the foreclosures. And, according to PSA/Prospectus — no servicer can attest to “mortgage assignments” or conveyance of mortgage loans to a Depositor – or to the Depositor owned trust. .

    Also calls into play the role of the “securities administrator.” (in affidavit – not attached).

    US Bank, NA — tells NJ court — to inquire more from the servicers. MY own works — “I didn’t do it , don’t ask me, blame someone else.” — Hmm Bart Simpson replied??

    Further, no “trustee” can purchase foreclosed homes – “on behalf of ” — anyone.

    So — who currently owns the mortgage loan??? Need on whose balance sheet the collection rights currently lie!!! PERIOD. Is the loan still on the Depositor’s balance sheet (on – or off) — or has collection rights (most likely) been sold??

    Not the trustee, not the investors, not the servicer — and not the trust (without a disclosed owner – which we know is the Depositor) — is anyone’s creditor. And, ONLY Depositor has personal knowledge of any transfer of mortgage loan – and removal thereof.

  66. After reading the complaint, I don’t believe that there is anything here that is going to be of any help to anyone here.

  67. Is there a link to the full complaint?

  68. Are homeowners making any progress?

Leave a Reply

%d bloggers like this: