COMBO Title and Securitization Search, Report, Documents, Analysis

EDITOR’S NOTE: Now Banks are facing the consequences of their own wrongful actions in originating, servicing and foreclosing on homes. They are carrying property on their balance sheet as “real-estate owed” (REO) when in fact they don’t own it, they never financed it and they never bought any receivable coming out of it.

In turn, the inflated appraisals, defective mortgages have left homeowners with the need and desire to get or take what they can from the house before the “Bank” moves in. 

Instead of correcting the problem and enabling an economic recovery, the government is compounding the problems, essentially increasing leverage again through loan guarantee on homes that can’t support even today’s prices. Rolled into each 30 year loan under the 203(k) program are unrecoverable costs of replacement of appliances, carpeting and window treatments that the prior occupant took with him.

Same old Same old. Those that fight for  their homes will get, collectively, better results than those who don’t. But the majority of homeowners don’t know or don’t care whether they have remedies and real defenses to foreclosure, much less counterclaims for amounts that are multiples of the principal balance on the mortgage claimed to be enforceable.

The title problems that will come up over the years will also be an interesting show to watch as legislatures are pressed to reset the title chains artificially to make up for the fact that the mortgage before was invalid, the note was invalid, the obligation was not in default, and the owner of the obligation didn’t want to get involved in the messy foreclosure market.

The failure of a creditor to submit a credit bid combined with the fact that nobody paid cash means that the auction was conducted out of bounds and that any title derived from the  auction process is at best problematic and most probably fatally defective, meaning that the old homeowner still owns the property and the new buyer is sliding into den of snakes.

May 12, 2011

Financing Foreclosed Homes


FORECLOSED homes don’t show very well — financially strained borrowers may ignore maintenance; lenders turn off the water and power to cut the cost of letting the place sit. A poor appearance can complicate financing, but it doesn’t prevent sales.

Most of what people call foreclosed homes are being sold by lenders saddled with a property because there were no other takers at the foreclosure auction. The borrower on such a house owes more on it than the house is worth. These are known as R.E.O. houses, short for “real estate owned” on a bank’s balance sheet.

Distressed properties — those sold at a discount — made up 40 percent of resales in March, up from 35 percent a year earlier, according to the National Association of Realtors. (That includes not only R.E.O. but also short sales, in which a buyer pays less than the loan balance, once it gets the bank’s blessing.) Though not a record, it is a huge portion of sales compared with what used to be considered normal.

Where the money comes from depends on the buyer and the property. If a house was in relatively good physical shape — with water and power turned on — it could be eligible for standard financing.

Otherwise, right now, all-cash sales are at their highest level ever — 35 percent of total sales, according to the Realtors. Cash buyers, often investors who don’t plan to live in the home, “are a major player in the R.E.O. market,” said Tom McGiveron of Realty Connect in Hauppauge, N.Y., a real estate agent who specializes in foreclosures on Long Island. “Asset managers want to move their portfolios as fast as possible,” he added.

For would-be owner-occupants without cash, the federally insured 203(k) loan is key, said Mark Yecies, the president of SunQuest Funding in Cranford, N.J. Borrowers can roll projected rehab costs into the loan.

As Mr. McGiveron put it, “Since most R.E.O.’s are as is, and the heat, plumbing and electric are turned off frequently, a 203(k) loan is necessary to cover the borrower and the lender — a lender will not lend money on a home where the major heating and electrical systems are not operable.”

Buyers generally hire an independent consultant certified by the Federal Housing Administration to review contractor cost estimates and architectural plans for things like whether the work will bring the property up to minimum standards while not going overboard on improvements.

“In other words,” Mr. Yecies said, “if you’re buying a home in Newark and you want to put in a Viking range, it’s not going to happen.”

Yet in a higher-priced neighborhood like Short Hills, N.J., he added, you probably would be able to borrow for more upscale appliances. The F.H.A. appraiser takes the consultant’s report into account when reviewing a property and determining how big the loan can be.

Not all R.E.O. properties are eligible, Mr. Yecies pointed out. For instance, a partially built house that has never had a certificate of occupancy requires a construction loan of the kind that a commercial developer would use.

Mr. Yecies estimated that an F.H.A-certified consultant would cost $500 to $1,200, depending on the extent of the repairs and the number of units in a property.

The interest rate on a 203(k) loan is about a quarter of a percentage point higher than on a standard F.H.A.-insured loan, and a buyer also can expect to pay 1 or 2 points, he said. (A point is an upfront charge equivalent to 1 percent of the loan amount.)

As with other F.H.A.-backed loans, down payments may be as low as 3.5 percent, and loan limits apply. Currently, most F.H.A. loans in the area are capped at $729,750. (Energy-efficient rehabs may be eligible for more.)

Despite the extra steps, these loans work, Mr. Yecies said. “We’re doing a half dozen a month here,” he said. “They can be done in a normal period of time, as long as everyone cooperates.”

70 Responses

  1. Mr Gault

    Thanks for your encouraging, nonjudgmental response. And the advice about pacer is definitely welcome. I’ll make that a priority.

    Interesting you mentioned res jud and estoppel. I’ve worried about that. I also worried about intrinsic vs extrinsic issues of evidence until I remembered that I’ve not had my day in Ct in this hated, nonjudicial southern backwater. My BIGGEST mistake was buying my “retirement” property there. Now there will be no retirement. Talk about chasing your tail

    My apologies to tnharry if I overreacted. I’m crabby and chronically fatigued

    Thanks again. It’s hard to sort all these issues out in a vacuum

  2. I hate to say this, but it’s my observation being pro se works against a litigant. The judge knows there’s little chance of beng overturned on appeal.
    And maybe it puts an additional and unwelcomed burden on the court. Sad but true.

  3. and tnharry isn’t contemptuous – he’s been on the ropes himself is my guess and understands the traps of the rules of procedure involved and that pro se litigants get messed not because they’re not brilliant, but because it’s just so tricky, those rules.

  4. Marie – one way or another, I admire your tenacity in going for it. Please be aware when crafting your complaint that the first thing the bad guys do is file a mtn to dismiss based on some version of
    res judicata or estoppel. If your arguments are those which you could have made prior to the foreclosure, the ct is likely to rule in the bad guys’ favor. It’s really messed what is going on right now in that vein.

    Wrongful f/c can’t exist as a tort (or w/e it is) until there’s been one, yet courts dont’ want to recognize it as a legit claim by the homeowner. Keep at your state statutes. I think I can speak for a number of people here and say we’re rooting for you.

    tnharry is right about the procedural issues being tough, which unfortunately means one may be procedurally duped or done in even if one ‘has the goods’.

    I strongly urge you to get a Pacer account. You can look up post foreclosure arguments made by your banksters. It’s easy. Get an account and just enter their name in the state you’re in – you’ll see links. You could look them up in other states if you don’t find a lot in your state. Decisions don’t give you the ammo you need -one needs to read the actual pleadings. It’s 8 cents a page and takes a debit or credit card. Cash? Maybe if one sent it to them ahead of time – like prepayment? Don’t know.
    What you want to read when you get to the ‘docket’ is the bad guys’ motions to dismiss (complaints like yours). Then you can anticipate their defenses. To save money, don’t read what you dont’ need. Scroll down on the docket to look for ‘memorandum decision’ around an entry for an order. This will tell you how the court ruled and, theortically anyway, the reasoning behind the court’s decision.

    Or try scribd if you can deal with that website. It’s pretty pokey. Just yahoo “my bankster motion to dismiss scribd” or
    ” v. my bankster scribd’ or even ” v. my bankster’.

  5. Tnharry

    Sorry you’re so contemptuous of my ability to forestall what is pretty much inevitable. I think you ignored my prior statements that I have no money for attorneys. Most of them are not experienced enough or just want gobs of money. The property in question is in a rural area. No attys I’ve talked to want to be subject to driving there and all the attendant inconvenience of dealing with a rural court. (judges still “ride the circuit”). Getting this set aside will be almost impossible. Nevertheless I’m going to give it a whack pro se. I know the old saying and I perceive a certain contempt in your response. Don’t underestimate me. In any event I am quite aware that undermining bfp ststus is difficult

    An NOI provides constructive notice. I gave the realtor actual notice via a certified letter that I would be suing for fraud etc etc., that I have animals on the property, that they’re moving at their peril. I expect to file next week. I wouldn’t be able to move any faster with an NOI. It seems problematic to me to waste even more time fiddling around with this issue. I’d rather get the complaint finished and spend my time thinking about the interesting issue I just discovered of the sufficiency of the wording of the assignment from Ahmsi to DB where they conveniently didn’t follow the wording required by the statute, thus leaving out any mention of anyone being the creditor..sorry your honor, it was just a harmless oversight by DOCX. No prejudice to that deadbeat over there.

    I work nights seven days a week and have been
    doing so for years It addles the brain and shortens the temper. I’m keeping my expectations quite low.

  6. Get an attorney Marie. You’re going to need one sooner rather than later.

  7. Marie – that definition of notice is good with the exception of real estate. Just about the only thing that matters with respect to “notice” concerning real estate is what is turned up in a search of the land title records. Letters just don’t cut it. Good luck to you.

  8. Marie – As I have said, it’s been many years since I studied a lot of this stuff. Can you explain please what you read which lead to your assessment a NOI would be “ineffective”? And filing a suit surely opens the door to counter-claims, but how would the NOI?

  9. Sorry, end was chopped off

    ……That buyer is not a BFP.

  10. Daniels v. Anderson, Supreme Court of IL (1994)
    Author: Bram
    Rule: A BFP takes takes title to real property w/o notice of the interests of others.  Any notice prior to the payment of any consideration pays at their own risk with respect to the holder of the outstanding interest.  That buyer is not

  11. Bfp status can be defeated by actual notice:

    Conveying facts to a person with the intention to apprise that person of a proceeding in which his or her interests are involved, or informing a person of some fact that he or she has a right to know and which the informer has a legal duty to communicate.

    When such notice has been given to someone personally, it is called express actual notice or express notice. If a tenant notifies a landlord that the elevator is broken, the landlord has express actual notice of the defect. Should the landlord fail to repair the elevator and another tenant is injured while riding it, the landlord would be liable for the tenant’s injuries.

    Actual notice can be presumed if an average person, having witness of the same evidence, should know that a particular fact exists. This is called implied actual notice or implied notice. If the landlord had been with the tenant when the tenant discovered the broken elevator, the landlord would be considered to have implied notice of the defect.

    West’s Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
    actual notice n. having been informed directly of something or having seen it occur, as distinguished from constructive notice (e.g. a notice was mailed but not received, published in a newspaper, or placed in official records). (See: notice)

    Copyright © 1981-2005 by Gerald N. Hill and Kathleen T. Hill. All Right reserved.

  12. Thanks tnharry

    You may very well be right. This is Virginia you understand. Very little hope against those good ol boys. Also as i mentioned while I was fiddling, Rome burned. Spent way too much time looking for help. Called umpteen Attys. No luck. They all said it’s pretty much hopeless; dont waste your money and so on I have no choice at this point. I must file something next week

    Surely with Linda green as “visiting” Robosigner on the assignment I can make some small impression. Well see I guess

  13. and Marie, I don’t think your letter puts them on “notice” sufficient to defeat BFP status. a complaint, lien, or possibly John G’s “notice of intent to sue” (although i think that would be very dependent on local rules) all should satisfy notice. I wouldn’t count on a letter doing the same. just a word of advice…

  14. Marie – I would encourage you as strongly as I could to get an atty for your case. The disadvantages you will find yourself in going pro se may prove to be insurmountable. Surely someone will take your case for a monthly retainer amount. Even if they aren’t completely well-versed in the FC defense, they know procedure and rules that you really can’t afford to teach yourself by trial and error. If you can handle the facts and theories and they handle the courtroom, you may be able to make a more affordable solution work.

  15. To Mr Gault

    Thanks for your excellent advice. What little ice been able to gather after reading your responses and looking online is that any such filing would be ineffectual and could set me up for distracting counterclaims. I really wanted to get their attention. I believe a bfp is one “without notice”. Well the listing agent now knows the docs are questionable; I pray that that consternation gives me a week or so until I can get the blankety blank paperwork done.

    This is all uncharted territory for me, especially procedurally Every attorney I’ve spoken with had a very closed unreceptive attitude toward the situation. One told me it would cost conservatively 40k to litigate, and by no means a sure thing. I’ll have to take my chances.

    You’ve been very helpful; others have been helpful. If only these sites were organized around giving people more substantive guidance on the basic strategies to go forward. Mock hearings, seminars, good adaptable generic pleadings. I rewrote my complaint 3 times and in the meantime they stole my home!!

    I think I need to get the thing filed and pursue lis pendens. Thanks again

    By the way has anyone considered a group approach to the more receptive recorders of deeds with “outreach” to all recorders, they seem to be in an interesting position: not really political types and familiar with the issues. And apparently some are even public spirited!

  16. Okay, Monday is May 23rd. Friday is the 27th.
    Here is a link to all state government officials:

    The list includes email and phone numbers.

    Right this minute look up your’s and write them down and stick them on the refrigerator. Get up! Do it! Please – It will take all of 2 minutes.

    Cut and paste the link to everyone in your address book. Send the link with the request for action. If you are on Twitter, Facebook, other blogsites, paste the link there, also .with the request to call or email.

    From the 23rd through the 27th, everyone man woman beast and child in this country needs to call their state officials. The message may be as simple as:

    My name is Mary Brown. I have a message for governor, senator ,representative Joe Smith. I am a registered voter and I want something done about MERS as to foreclosures and I want its contract with Genpact truncated. I want the records of the ownership of American property handled by Americans on American soil and I want those records back in the land records where they belong.
    Thank you for your time. Have a nice day. Caio.

    We don’t have the bucks for lobbyists. but we have numbers. We can lobby in our own fashion. We have the power of our votes and our voices. We’re only helpless if we act as if we are.

    You can cut and paste the message. Or make your own, of course. Just call it in or email it. It will take another 2 minutes.

    This is OUR land. I think to keep it that way, we have to fight, however we can.

  17. “Heaven, I’m in heaven……..”
    Washtenaw County Sheriff:

    Sheriff Ceases Sales & Enforcement of MERS Foreclosures
    This applies to all Mortgage Electronic Registration Systems foreclosures, with a few exceptions.

    May 13, 2011
    Recently, the Michigan Court of Appeals rendered its decision in Residential Funding Co., LLC v. Saurman, 2011 Mich. App. LEXIS 719 (Mich. Ct. App. Apr. 21, 2011), the Washtenaw County Sheriff’s Office will immediately cease all sales and enforcement of MERS foreclosures by advertisement unless one of the following conditions exists:

    1. MERS is not the sole foreclosing party as disclosed by the Affidavit of Publication and the Sheriff’s Deed. Such documents must list the name of the lender which holds the debt itself and that entity will be named on the Deed; or

    2. MERS is the only foreclosing party and there is recorded documentation that MERS holds not only the security interest but the underlying debt as well.

    On April 21, 2011, the Michigan Court of Appeals rendered the decision of Residential Funding Co., LLC v. Saurman, 2011 Mich. App. LEXIS 719 (Mich. Ct. App. Apr. 21, 2011) which invalidated certain foreclosures by advertisement initiated by the Mortgage Electronic Registration Service (MERS). The Court also indicated that such proceedings were “void ab initio” and thus enforcement of foreclosures which have already occurred will also be suspended. If the Michigan Supreme Court or the Michigan Legislature takes some action to reverse or modify the decision of the Michigan Court of Appeals, this Office will revisit these issues.

    For more information, contact James Damron at 734-973-4937

    But what has taken so long? MERS entered into a Consent Order months ago and in March, told its members no more (bogus) foreclosures in its name.
    Did anyone get it when I posted the info about MERS’ contract with Genpact, allegedly a Cayman Island business which has delegated THE RECORDS OF THE REAL PROPERTY OF THE UNITED STATES OF AMERICA to workers in INDIA??
    Am I the only one this is making nuts? This is at least as outrageous and traiterous as what they’ve already done. OUR LAND RECORDS HAVE LEFT OUR SHORES, are in the hands of FOREIGNERS?

    America, the land of the what, the home of the what? I feel like the punch line in a bad joke. As an American, I feel humiliated as well as outraged.

  18. Just one more – Before one records a notice of intent, it is probably so that one must have made an attempt at resolution with the alleged wrong-doer prior to resort to the notice. And, if one is alleging someone else is in possession of one’s property, a demand for its return should likely have been or be made. The Notice should probably be sent to the proposed defendants, as well.
    I recognize that finding competent legal representation is difficult as to foreclosure issues these days, but it is always best to seek legal advice. The Notice is a relatively vanilla matter, so a consultation shouldn’t break the bank.

  19. Marie – I think you actually get your original back, but I would still ask and pay for several certified copies.

  20. Marie – first of all, remember I am not an attorney. But since you have the time and initiative to write a letter to the listing agent, maybe you wll go ahead and file the Notice of Intent to File Suit since you are actually working on one and intend to file it at some time? In other words, I am not encouraging you to do something, but it sounds like you’re doing it, anyway.

    It’s my layperson understanding that the parcel number should be on the top left of the cover sheet (this is very important) and that cover sheet entitled Notice of Intent to File Suit should include the legal description and street address of the property. If I were doing one myself, I guess I would then on the 2nd page or even the first and only page write a short description of all the parties I intended to name in the future suit and add ‘not inclusive’ to leave the door open to add others even if I said “and John Does 1 – 1000″, and a brief description, also stated to be Not Inclusive of my claims. What are they? Of course I don’t know. Wrongful foreclosure? Conversion? The Depauw case I linked provides some clues. But since I’m not an attorney, I can’t vouch for anything in that case. It hasn’t been decided yet. And I dont”even know if you have to describe the claims at all.

    I dont’ know if it needs to be notarized, but I would get it notarized to be safe.
    County recorders generally have rules about margins, like 1 or 2 inches, and if you ‘invade’ that space, they will charge you extra to record it. I would call and ask my county recorder what their margins are.

    Again, I am not an attorney and this is not legal advice. If I were actually filing one myself, I would
    look online for Notice of Intent to File Suit and do my best to fall in line. There may not actually be a ‘right’ way to do it as long as a notice in fact imparts notice.

    If I were filing one, I would wait for it to be recorded and leave there with my certified copy of the recorded Notice.

  21. if it’s not of record in a court or the land records, then it doesn’t exist, period. certified letters really don’t impact good title in my opinion.

  22. Why not write a certified letter to the listing agent/broker as i did advising that there are fraudulent docs recorded against title and that suit is in train? Hoping to slow them down while i finish my complaint. I know it’s only a temporary impediment but it seems as if it is a form of notice….

  23. @tnharry

    I understand what you are saying. There is no way I am going to come on this board and give out all the facts that have come to light. My point here is I am a victim no longer. I am a big girl who can take constructive criticism even from people who know nothing about me. I speak up when I feel I need to. So thanks tnharry for your comments. No pro se here.

  24. all i’m saying is that if there’s nothing in the recorded chain of title, then no one is on notice. i don’t know the circumstances of your clouded title, but if it only consists of the mortgage and foreclosure deed, then it’s not clouded. don’t be deluded by the ideas propagated here about the securitization being flawed and creating clouds on title. none of that stuff is in the title. if i can’t walk into the land records office where you live and find something to put me on notice, then it i can take title in REO and be a bona fide purchaser. blogs, 60 minutes stories, and newspapers don’t count. do nothing and you lose. see statutes of limitations, duty to mitigate damages, laches, waiver, and the list goes on…

  25. @tnharry

    I know that there is a clouded title on my property, very easy to see. I agree, there are first time buyers who think they made a find and are none the wiser. These are clueless people who did no research, and the realtors keep silent. If I sit back and do nothing, then yes, they think they have a clear title. That is until they decide to sell and a clouded title shows up. These people are now real concerned as to whether they own the property.

    I WAS a victim of illegal foreclosure process. If I sit back, complain and do nothing then I continue to be one. My time will come real soon.

  26. and really, if both of you weren’t so busy playing the pissed off victim role you might recognize when someone is speaking from experience and knowledge and genuinely offering advice. or you can just keep stirring the pot with pro se litigants who don’t have a clue that they are their own worst enemies

  27. @carie – you really must let go of the dogma and be objective sometimes. Johngault reaffirmed what I said and I was just trying to offer some advice.

    @dodododo – c’mon, not everyone is out to get you. and once the properties get into REO and for sale signs are in the front yards, yes, regular non-evilbank people buy them that don’t understand anything other than they are buying their first house. get over the victim mentality and read my post. file suit. record a lien lis pendens. do something, anything to record in the chain of title to put people on notice. THEN you will preserve your claim. do nothing, and you have a bona fide purchaser and the house is gone

  28. Instead of styling a post-foreclosre action as one for “wrongful foreclosure”, perhaps one framed as a complaint for Conversion would be more appropriate. Here is the abbreviated definition of conversion from

    Torts. The unlawful turning or applying the personal goods of another to the use of the taker, or of some other person than the owner; or the unlawful destroying or altering their nature.

    When a party takes away or wrongfully assumes the right to goods which belong to another, it will in general be sufficient evidence of a conversion but when the original taking was lawful, as when the party found the goods, and the detention only is illegal, it is absolutely necessary to make a demand of the goods, and there must be a refusal to deliver them before the conversion will be complete. The refusal by a servant to deliver the goods entrusted to him by his master is not evidence of a conversion by his master.

    The tortious taking of property is, of itself, a conversion and any intermeddling with it, or any exercise of dominion over it, subversive of the dominion of the owner or the nature of the bailment if it be bailed, is evidence of a conversion.

    In Equity. The considering of one thing as changed into another; for example, land will be considered as converted into money and treated as such by a court of equity………………”

    Here is a link to a case wherein Conversion is alleged, among other things, like THEFT. I don’t know the disposition of this 2011 case.

    If you don’t like scribd, just google or yahoo Depauw v MERS etal

  29. So, doesn’t that mean that everyone that is dutifully paying their (underwater) “subprime” mortgage at the moment is actually just paying a servicer/debt collector since their original mortgage/loan (whatever it was), was actually paid off some time ago? Yup, that’s what it means…scary, isn’t it?

  30. @ dodododo—sorry, couldn’t resist—it was cute, though, coming out of commas…

    Anyway—back on topic:


  31. @carie

    Thanks for the correction. I noticed it after I had already posted. My bad. I can admit I made a mistake unlike the banksters.

  32. @dodododo…comas…

  33. Here’s another thought. And that notice of intent is “Notice of Intent to File Suit”. And by the way I would name everyone and John Does 1 – 1000, I think.
    So, you didn’t file a lis pendens before or you did and it was or wasn’t truly expunged. Let’s say you didn’t.

    I am wondering if you could now record a lis pendens in conjunction with your Notice of Intent to File Suit to cement further alienation of your property by the bankster? I dont’ know if this is a gray area or not. The distinction is that a law suit is not actually pending, but notice has been given of the intent to bring an action. Would a lis pendens under these circumstances be appropriate? Anyone?

    Because if you can, record a lis pendens, I don’t think the lis pendens could be expunged until the suit you’ve stated its your intent to file has been resolved.

  34. @tnharry

    There is no “Innocent” 3rd party buying the property. Even you know of the possibility of a clouded title, althought you won’t admit it. These innocent 3rd party buyers know this. If they don’t know this, then where have they been the last year? Did they just come out of commas?

  35. But wait! There’s another possibility, I think. Instead of filing a lis pendens after f/c which might p.o. a judge, there is a thing called “notice of intent”. It’s a document one may record in contemplation of filing a lawsuit and has something to do with the statute of limitations on an action, in this case the wrongful foreclosure. It’s been awhile since I studied it. If I remember correctly, you can file a notice of your intent to file a lawsuit at some point in the future. You then dont’ actually have to file the lawsuit just then, but it would probably queer the title all the same by noticing your intent (and thus interest) to defend your interest in the future. Any purchaser thus has notice and takes the property with notice, defeating one of those three tenets of bonafide purchaser. I’m hard pressed to believe any title company would not except the notice of intent from its policy, thus it is not an
    insured ‘risk’.

    Then when we have found the proper avenues to sustain wrongful foreclosure, you would actually file the suit within the statute of limitations. It seems to me that the notice of intent tolls the SOL but I can’t remember. Any attorneys remember this stuff?

  36. Am I losing it? Under courts’ current rulings, there wouldn’t be any such wrong as “wrongful foreclosure”. Courts say well you should have raised these issues prior to the foreclosure.
    But, if I were a DA, I couldn’t charge you with a murder you hadn’t committed yet, right? I could only charge you with attempted murder or like that if I heard of the intent, a difference not without distrinction. Once a murder is committed, it’s a diff charge.
    There just must be lawful avenues to prosecute a wrongful foreclosure action. I mean as I said, otherwise there is no such thing as wrongful foreclosure and I just don’t believe it. Since wrongful foreclosure doesn’t arise until there’s been a foreclosure and the alleged power of sale has been invoked and executed upon, there must be a remedy. It’s likely found in overlooked state statutes? Maybe just something to chew on.

    As to the issue of the innocent purchaser’s good title to the property after foreclosure, the only attack I’m aware of which could come into play is the bonafide purchaser one. The tenets for bonafide purchaser are 1) good faith 2) for value and 3) without notice of any third party claim or interest.

    The best attack, if any, would be on the third. If you filed an action for wrongful foreclosure and recorded a lis pendens (at your own risk) pursuant to that suit, then a purchaser is on notice because recordation is statutory notice. I’m thinking if you filed a lis pendens prior to the foreclosure and the f/c went thru anyway as I have heard, then there is notice of your interest at least until the lis pendens is lawfully expunged.

    If none of this is possible, then the purchaser would in fact be found to be a bonafide purchaser and any remedy would not include the return of the property, as tnharry stated.

  37. Sorry, tnharry, not buyin’ it…

  38. @Ian – yes, it’s my understanding from what I’ve read there is. I will have to dig thru ‘stuff’ today to find it.

  39. @carie – I stand by my point. An “innocent” third party buying the property that the records say is free and clear would lock up that property and convert any claims away from regaining the property to money judgments.

  40. John Gault- you said “under the UCC, payment on a note by anyone reduces the note dollar for dollar. Is there a specific statute? And any other applicable statutes? This will help us all as we dig deeper into the insurance-fraud aspect of this nightmare. Thanks

  41. E. Tolle:

    What’s seemingly myopic about those BK decisions is what is unsaid, i.e., “WITH WHOM does the “servicer” have a “servicing” contract?” – Certainly not with the “borrower” on the note and mortgage. (Exactly what documents grant the “servicer” any authority whatsoever?) So who then is the real party “injuring” the “servicer?” Also, notice both of the BK decisions you cited also used the word “MAY,” as in “MAY have Constitutional standing,” “MAY be injured” – don’t appear to confident “findings of fact” by the Courts.

    ALSO – Absent a direct and currently valid contract with the “borrower,” I haven’t seen the “servicers” claiming an “equitable lien” against the “borrower” either, something that my limited (non-lawyer) experience tells me is more difficult to plead and prove than these fraudclosures.

    (As I mentioned, I’m not an attorney either, so I’m probably wrong.)

  42. johngault, actually, servicers have been allowed constitutional standing in some cases due to the money stream owed. I’m not an attorney so don’t know the extent of these instances or the exact circumstances, therefore would not attempt a comment. Anyone?

    In re Raintree:

    Furthermore, while BAC’s title indicates it is a loan servicer, this by itself is insufficient to establish BAC’s standing. A loan servicer may have constitutional standing because it has a right to payment pursuant to its duties as a servicer on a loan. See, e.g., In re Conde-Dedonato,
    391 B.R. 247, 250 (Bankr. E.D.N.Y. 2008) (collecting cases). The loan servicer’s interest in the note is “by virtue of its servicing activities for which it receives compensation.” In re Viencek, 273 B.R. 354, 357-58 (Bankr. N.D.N.Y. 2002). Thus, a loan servicer may be injured by a debtor when it loses its servicing fees as a result of the debtor’s nonpayment on the loan.

  43. Now here’s a gruesome thought. Which of these insurance benefits etc I listed were supposed to benefit the note-owners? Not credit default swaps, I think, but surely the rest of the list. Now if Joe Bankster KEPT the ‘insurance proceeds’ (by any other name) and did not apply it to the note, the note is still outstanding, is it not?

    In such a scenario, would a homeowner have standing to go after the bankster who snarfed these proceeds? Or would that right belong exclusively to the note owner? The note owner won’t , unless of course it isn’t made whole or payments stop. So has Joe Bankster kept the insurance proceeds, then forecloses and uses some of the dual funds (all tax free no doubt) to continue the payment stream or essentially retire the note (pay the trust off however that’s done), pocketing the difference? Nice gig.
    If banksters are keeping these insurance funds on senior tranches, are they not stealing from junior tranches who really then get the shaft even worse?
    Who would know?

    Now as to the homeowner’s standing, I know there’s a path. I just can’t think of it just now.

    Just a reminder – the IRS hasn’t decided if it’s going after the taxes for the ramifications of SEC rules and regs violated by the trusts (or whomever). They better.
    The people cannot be made to lose their homes while another group collectively duped gets a pass
    How are we to be sympathetic to the burden of tax consequences against the loss of our homes?
    As I’ve said, those groups have recourse and it’s recourse that will benefit everyone except the bums
    who will at least in some small way have to pay for some of their multitude of sins. Look at it like this:

    Those groups duped are also entitled to recover from the banksters along with other funds the tax amounts they are going to owe. This country does not run on an empty tank. If the IRS does not enforce against the SEC violations, just who does that leave, as usual? And it’s the only shot at getting those pilfered funds back in circulation.

  44. Neil raises an interesting question. Well, actually several. If a yeahhoo goes in there and snarfs a house on especially a credit bid, what is the accounting on anyone’s books? The servicer’s books don’t hold the loan. The only alleged ‘default’ or loss suffered by the servicers is that in servicing, not default on an asset it doesn’t own. Whose books are impacted by a trustees sale? Given all the credit default swaps, pool insurance (the alleged within-an-inch-killer of AIG) the guaranteed payment streams, pmi, FHA insurance, the VA guarantee (remember those?) and GNW’s, what exactly is the loss and who is taking it? And pursuant to the UCC, payment made by anyone against/ on a note reduces the note dollar for dollar. Clearly the servicer does not own the note, so in this fiasco, who is first of all showing the f/c sale as an accountng entry and who is then trying to take a write-off for the fictional loss? Even if it’s the alleged trustee of an alleged trust, the same questons are legitimately raised.

    WHO the heck’s books are being impacted by all this bs?
    Since there are other sources of funds impacting a note’s balance, there has got to be accountng / tax
    fraud going on here. I telll you, we need to join the IRS as a co-plaintiff or co-defendant depending n one’s position or some kind of interpleader.

    And yes, Virginia, this is straight from Wikipedia

    “Interpleader is a form of action originally developed under equity jurisprudence. It allows a plaintiff to initiate a lawsuit in order to compel two or more other parties to litigate a dispute. An interpleader action originates when the plaintiff holds property on behalf of another, but does not know to whom the property should be transferred. It is often used to resolve disputes arising under insurance contracts.”

  45. The truth of the matter is that securitization is illegal, plain and simple. But it’s way too lucrative for the gentlemen’s club members who play at the casino, they’ll never stop unless it all blows up big time.

    The securitization model is now TBTF, without causing massive destruction and collateral damage beyond imagination, and yet it needs to happen, as it’s a totally unsustainable system thaty sucks everything from the bottom constantly upwards in a never ending swoosh of monies up the ladder.

    The sooner we just let it all fail, the faster we can rebuild a different system, only next time not built upon usury and corruption, but a system of fairness with no chance for regulatory, legislative, judicial, and the executive branch being captured like a hilltop in battle.

    Screw the elite. Bring on class warfare. It’s 99% to 1%. We’ll see how far their money goes with those odds.

  46. How does the government investigate itself? The slow movement in all this MUST be because of their fear of their own fraud being exposed—so WHO will find and expose the truth? The FBI? What’s it going to take?

  47. carie

    That will happen —and also in origination fraud — and in insurance fraud. Have to keep all alive.

    We are dealing with investigators that have been clueless for years. And, of course, politics.

    Much will eventually surface. And, “investors”?? — subprime debt investors — insurance?? fraud.

    Need to stay focused. Need to steer away from investor protection — and direct to “INVESTOR” fraud.


  48. tnharry—

    What if pervasive and systemic illegalities were eventually proven in the previous owners’ mortgage/foreclosure paperwork?

  49. @dny – I still think that absent pending litigation and a lis pendens or something to put a purchaser on notice, that house is gone and the prior owner would be limited to money damages. Frankly, if the house like so many others was at or near underwater anyway, the money is an improvement in position. That was my real point – that the contest over ownership and true/pretender lender argument does have an expiration date, and that date is the REO closing.

  50. tnharry:

    “And c’mon @dny – “money laundering” and “filthy titles coming sparkling clean”??? That’s pretty much the whole point of the foreclosure process. If there is a lis pendens or something else of record, then great. If not, then if it gets sold to BFPs in the REO closing it’s gone for good. You may still have a case against the mortgagee for money damages, but the house is gone at that point.”

    – OK, some hyperbole in my comment, but c’mon, tnharry, is it REALLY business as usual for title insurance companies – for example, those in Massachussetts? Especially after the recent Mass Supreme Court decisions? REALLY? I think that Massachussetts is dealing with this very “true owner” argument, and so far, it doesn’t look good for the REO purchasers. That’s only my non-lawyer opinion, subject to sniping from others.

    And pardon me if I mistook friendly sarcasm for a condescending teaching moment.

  51. Thank you, E., for the kind wishes! I don’t know if this just drags the case out longer and then I have to pay more and more, as I’m paying monthly. What I am wondering is how many days in BK (AP) court does a defendant have to get new representation, if they have been advised that their counsel is terminating representation? If they don’t get representation, then do I win by default? Somehow I don’t think it can be that easy. I wish…
    On the other hand, more and more fraud is coming to light EVERY DAY and maybe that’s a good thing too.

  52. leapfrog, I’m having a case of schadenfreude envy. I hope this development helps your case. We all need all the help we can get against the gangster bankers. Good luck!

  53. Yes, angry, I noticed that. At any rate, her career is probably fried! I wonder what this means for my case? She terminated counsel in March and there has been no replacement. Hmmm. I’m trying to get an answer from my attorney right now.

    I was hoping that Gwen C. from Missouri would see this info. She has done battle with Bryan Cave before and I’m sure she would LOVE this news!

    Sometimes there’s just nothing like a good heaping helping of schadenfreude. I’m reveling in it.

  54. I don’t know if the “true owner” argument will fly once the banks have resold them in REO. “Normal” citizens buying through the REO process should take free and clear of any issues as a bona fide purchaser so long as there isn’t pending litigation and a lis pendens down against the property.

    And c’mon @dny – “money laundering” and “filthy titles coming sparkling clean”??? That’s pretty much the whole point of the foreclosure process. If there is a lis pendens or something else of record, then great. If not, then if it gets sold to BFPs in the REO closing it’s gone for good. You may still have a case against the mortgagee for money damages, but the house is gone at that point.

  55. dis beotch-
    ever notice ..when ever attorneys are pressed with a lawsuit against THEM it is always “VIGOROUSLY ” they fight! ? ah…yea ..sure..
    i have this vision of a guy rolling on the floor with arm & legs thrashing around wildly..hmmmm maybe its just me hahaha but i’d just love to watch em squirm!


    Any of you doing battle with this beotch, be of good cheer!!! : ) : ) : )

  57. The inmates are truly running the asylum…no one in power has any balls…what a bunch of cowards…they’re all nail-biting behind the scenes, going “what do we do? what do we do?”—as the problems get worse and worse…

  58. Looks like these REO sales are attempts to money-launder the sales of foreclosed-upon properties to get the filthy titles to come sparkling clean, all with the assistance of the federal government (again), insuring short-term loans at taxpayer expense (again).

    The properties are “flipped” by entities (“major players”) who after quick purchase and resale (“Asset managers want to move their portfolios as fast as possible”), will, no doubt, crawl back into the woodwork or dissappear completely by the time that the future owners get a knock on the door by the (wrongfully foreclosed) previous and still true owner(s).

    I guess this is the way the great money-laundering shell game of “mortgage origination” that led to the great money-laundering shell game of fraudclosure gets resolved by the banksters: by utilizing a great money-laundering shell game of REO sales with “investor” and FHA assistance.

  59. Anyone dealing with Ocwen? please email me

  60. Our house was sold in auction for $79,000 to an Investor bidder who in turn sold it to another party for $179,000 financed by Mutual Michigan with no down payment. This third party got buyer got a “Special Warranty Deed” which means that the title only covers the few months the investor kept our house on his inventory

    My original loan mortgage nor the judgment appear as satisfied in the land records, which makew me wonder where did the $79,000 paid in auction go.
    I am sure it was kept in the pockets of Florida Default Law Group.

    My husband and I are working on a Quiet Title and a suit for damages in the Federal Court. We do not give up and will continue fighting until we get our house back.

    In other words, back to the Title issue. These bidders are selling the houses with a Special Warranty Deed.

  61. Unfortunately Foreclosures will simply be neutralized at some point by government fiat. Such as, In order to get further federal largesse, states will be required to order local governments to reset or quiet tltlre to all properties that were subject to foreclosure from 2000 to 2010. Etc etc. Let’s start the new century on the right foot. What?

  62. Exactly—I mean, who are you really buying a foreclosed home from? The chain of title is SHOT—The Los Angeles City Attorney is suing Deutsche Bank for letting thousands of foreclosed homes just rot in the sun, and they say: “It’s not our problem—we don’t own the loans—the servicers are supposed to take care of that!! Servicers?????? WTF??????? NOBODY REALLY OWNS THESE HOUSES!!!??? They just took the money from foreclosures and ignored whatever happened next…..

  63. Our house was well maintained when we got f/c on. There were 2 small minor things that needed fixing, but had to be done because of code. So the cost to the REO was minimal. We did the cash for keys, which I am sorry we did. One thing the REO agent insisted on was that all applicances stay. We had been in our home for 12 years and just bought a new fridge 2 years earlier (We paid cash for it). Now thinking back, how could he demand that we keep all applicances with the home when I paid for all our applicances with cash, no credit card or loan, our own money?

    We had our own well so turning on and off the water was no problem. When we called the electric company they said they could not turn off the electric because it was already transferred. To whom, I have no clue.

    Why in the world would anyone even consider buying a foreclosed home with all the problems that are going to baloon into even bigger problems in the future? Crazy!!!

  64. If ” lenders turn off the water”, the house is condemned, that’s how it is in my community.
    (Yes, they still put it on sale.) It pisses me off no end – non-resident owner/landlords that never give a crap about the property swoop in and steal it. Making matters even worse is that the family whose house was stolen, probably bought the house in an attempt to escape ever renting again, particularly from abusive slum lords.

  65. Still no one percieves as to how to get title insurance and not title exception.The two are worlds apart and make any foreclosure an impossibility.People looking at purchasing a foreclosed home need thier heads examined.In fact anybody purchasing a home of any kind need to take great care as to not find themselves where all of us are .Take great care or you will be the next unwilling wave.

  66. Cry me a river. Do most of us care about the problems of resale? It’s just another slap in the face.

    I wish my house wouldn’t sell. I wish I had the nerve to bulldoze it like someone I saw on the news. That would be infinitely satisfying instead of how I feel right now. Full of impotent rage

  67. Obama and his crew needs to understand


    This is a threat to National Security. When the World sees our diminshing economic power. Our Military might is perceived to be weak and this puts our soldiers in harms way.


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