Bombshell Admission of Failed Securitization Process in American Home Mortgage Servicing/LPS Lawsuit


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EDITOR’S NOTE: It is comforting to know that at least some people are paying attention. From one of the largest servicers in the country comes an admission that securitization of mortgage loans was an illusion. The facts alleged by AHMSI  in its lawsuit against LPS are true in virtually all cases in which any bank or other entity has claimed an interest in a mortgage loan.

They are actually saying two things: first, they are saying that their practice was to create the documents supporting the foreclosure by an entity that was essentially picked at random and that these documents were created only as necessary in foreclosure litigation (otherwise they just proceeded with any old documents); second, they are saying that the people who signed those documents lacked any authority or appointment to represent any real party in interest and that the signature was forged on behalf of other people who also lacked any authority or appointment to represent any real party in interest.

In the four years that I have been analyzing and writing about this mortgage crisis it has been my consistent opinion that the original mortgage transaction was a single transaction between a borrower and the lender. The single transaction doctrine or the step transaction doctrine utilized in a myriad of other cases involving both real property law and commercial transactions create simplicity out of what appears to be a complex series of transactions. I have repeatedly said in my writings and in my presentations at seminars that those who participated in the securitization scam would prevail as long as they were able to direct the attention of a judge to only one part of the transaction, to wit: the part where the borrower receives the benefit of funding a loan. The burden is on borrowers to redirect the attention of the judge to include both sides of the transaction.

The lender’s side of the transaction is as simple as the borrower’s side. The lender funded or advanced money for the purpose of funding a mortgage loan. The pretender lenders don’t want any judge looking behind the veil. But the facts are clear. The lender in the transaction was a group of investors who never received any notice of the transaction with the borrower, much less the actual note and mortgage. The investor/lender received a mortgage bond that was supposedly backed by a perfected mortgage lien on the property owned by the borrower. Instead of naming the lender as the mortgagee, nominees were inserted into the documents executed by the borrower. The failure to disclose both the identity of the lender and the terms under which the lender advanced money (contained in the prospectus and the pooling and servicing agreement) results in an imperfect lien. (The test for a perfected lien is being able to determine the identity of the party from whom you would obtain a release).

At the time of the original transaction the party designated as the “lender” was powerless to execute a satisfaction of mortgage. By definition this means that the lien was never perfected. With few exceptions all of the entities that have been involved in the initiation of foreclosure proceedings have been nothing more than middlemen pretending to represent the investor/lender when in fact their intent was to divert money, proceeds, and property from the investor/lender into their own pockets. In order to do this the pretender lenders must actually foreclose on property and conduct what purports to be a foreclosure sale and continue billing fees against the revenue stream that is due to the investor/lender. When they get to zero balance because the property value is lower than the amount due to the servicer or other middleman, the property goes to the middleman instead of the investor/lender.

This is why there can be no widespread modifications, short sales, or any mediated settlement in which the immediate result is either reinstatement of the mortgage or cash proceeds–both of which would have to be reported and paid to the investor/lenders. Nobody on Wall Street wants the investors to get anything and the borrowers are viewed with complete disdain. Who cares about them?

If the original transaction is simply viewed for what it is–a transaction between the borrower and the investor/lender the solution to the mortgage mess becomes clear. The only actual function of the intermediaries in the securitization process is to act as conduits for clearing transactions. It is obvious that they have intentionally failed to act in accordance with the requirements of the pooling and servicing agreements and the prospectus that was given to the investor/lenders. If they were playing fair they would have disclosed the identity of the actual lender and the terms of payment to the actual investor/lender. That would include payments received from the borrower as well as numerous third parties based upon factors that were not necessarily related to payments by the borrower. The transaction in which the investor/lender advanced money was based upon liability and guarantees from multiple parties.

The facts here are actually quite simple. The wrong party was designated on the note and the mortgage. Vital terms of repayment or omitted from both the note and the other disclosure documents in violation of the requirements of the federal truth in lending act. The intermediaries were only interested in the money trail and they knew they would create whatever document trail was necessary to support what they had done with the money. This is like your bank failing to post a deposit transaction or making claims on a transaction between you and a third-party in which a payment by check was involved. The bank is merely a conduit and has no rights in the principal contract between you and that third-party. This is established law. Yet in the mortgage mess the banks have succeeded in convincing judges that their mere presence as intermediaries is sufficient to establish themselves as agents for everyone. This success has not been without substantial rewards. It is the intermediaries who are taking the houses and eventually the proceeds at a cost to and detriment of the investor/lenders and the borrowers.

The borrowers have no way of knowing the actual balance due on their obligation since the intermediaries refused to provide any accounting for the receipt of any funds from any party other than the borrower. This keeps the judges attention focused on the borrower and whether the borrower made payments–instead of requiring proof that a payment was due, and if due, to whom? By requiring borrowers to deal with intermediaries instead of the principals the banks have succeeded in creating an impenetrable barrier to modification or settlement of these defective mortgage loans.

 The bottom line is that the securitization of mortgages loans never actually happened. The defects in the origination process, the absence of transfer documents and delivery in accordance with the pooling and servicing agreements are incurable. It is simply not possible to require an investor/lender to accept the transfer a loan, obligation, receivable, note or mortgage that is already in default and that had never been perfected as a lien. This leaves the record clouded with a “mortgagee” or “payee” to whom no money owed. While it is possible for the investor/lenders to assert claims and perhaps establish equitable or judgment liens, they have not shown any desire to do so. The record is devoid of any attempts in the last 10 years of any such attempt.

Thus the lien is (a) unenforceable by anyone and (b) being enforced by parties who wouldn’t have the right to try, but for the willingness of the Courts to look at only the whether the borrower made payments instead of requiring proof as to whether a payment is due, the actual balance and to whom it is owed.


Bombshell Admission of Failed Securitization Process in American Home Mortgage Servicing/LPS Lawsuit

Wow, Jones Day just created a huge mess for its client and banks generally if anyone is alert enough to act on it.

The lawsuit in question is American Home Mortgage Servicing Inc. v Lender Processing Services. It hasn’t gotten all that much attention (unless you are on the LPS deathwatch beat) because to most, it looks like yet another beauty contest between Cinderella’s two ugly sisters.

AHMSI is a servicer (the successor to Option One, and it may also still have some Ameriquest servicing). AHMSI is mad at LPS because LPS was supposed to prepare certain types of documentation AHMSI used in foreclosures. AHMSI authorized the use of certain designated staffers signing with the authority of AHSI (what we call robosinging, since the people signing these documents didn’t have personal knowledge, which is required if any of the documents were affidavits). But it did not authorize the use of surrogate signers, which were (I kid you not) people hired to forge the signatures of robosigners.

The lawsuit rather matter of factly makes a stunning admission (note that PSA here means Professional Services Agreement, and it was the contract between AHSI and LPS, click to enlarge):

Did you get it? They said that these procedures were standard between the two companies, which was to “ memorialize the transfer of ownership lender to the securitization trust” right before initiating foreclosure. If you are a regular reader of this blog, you know that is impermissibly late. The note and mortgage had to get to the trust by a clearly specified date, usually 90 days after closing. As we’ve written numerous times, in the overwhelming majority of cases, the securitization entity was a New York trust, and New York trusts are like computer code, they can only operate exactly as stipulated. The exception was trusts by Chase and WaMu, which did allow for the originator to serve as custodian for the trust.

So AHMSI has just admitted that all of its foreclosures done with LPS were completed by the wrong party. In Alabama, wrongful foreclosures are subject to statutory damages of three times the value of the house, and recent cases have awarded much higher multiples of the property’s value. This little paragraph is a litigation goldmine for the right attorneys. I hope they have fun with it.

I’ve included the entire filing.

AHMSI v LPS File-Stamped Petition

48 Responses

  1. This case was dropped 3 months after filing for “lack of prosecution” … AHMSI put a shot across LPS’s bow in an effort to innoculate themselves from the robosigning , “surrogate signing” , and outright fraud in the creation of documents by LPS and DocX . Dallas County Texas case “DC-11-10440” I don’t know from the info at the Dallas County site if arbitration ever took place.

  2. Who EXACTLY is this Sen Moore and Exactly Who is this Rainy Fellah ? Laws Changed to Make Legal the Illegal are Against Public Policy and the Federal Constitution. The Making of Laws That Impinge or Invalidate the Validity of Contracts is Immoral and Illegal. The Caveat is Making Invalid … Magically … Valid is twice as worse. …. This is Constitutional Law 101 and touches upon International Laws that Violate Human Rights <—<<<

  3. […] Bombshell Admission of Failed Securitization Process in American Home Mortgage Servicing/LPS Lawsuit MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE EDITOR’S NOTE: It is comforting to know that at least some people are paying attention. From one of the largest servicers in the country comes an admission that securitization of mortgage loans was an illusion. The facts alleged by AHMSI  in its lawsuit […] […]

  4. […] 28 Aug MOST POPULAR ARTICLES GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE EDITOR'S NOTE: It is comforting to know that at least some people are paying attention. From one of the largest servicers in the country comes an admission that securitization of mortgage loans was an illusion. The facts alleged by AHMSI  in its lawsuit against LPS are true in virtually all cases in which any bank or other entity has claimed an interest in a mortgage l … Read More […]

  5. @Anonymous! Thanks that is sure what I see. Even the HAMP was a farce. I truly believe the HAMP was a pretend to help homeowners, and used for what it was intended. To line more money in the pockets of the crooks. It was used to dupe people to believing they were being helped. To make it look good while looting the investor and paralleling foreclosure, while adding up the fees for the servicer to profit even greater profits. In my case and thousands of cases it was a dupe to promise us help and to get us into foreclosure by pretending we had relief, when our incomes had been ruined by these greedy crooks. Telling us to fall behind in order to qualify for the loan, then giving us a loan for five months to drag us into foreclosure. Turning the mod payments into partial payments and claiming we were in default. It took three different servicers telling me that before I complied believing the bank knew what it was doing. Well they did and when your gut says no you should go with your gut. And not trust a bank. A new friend I have met through this hell, has told me her brother is disabled and had a 450.00 mortgage payment. Citi has sent him a letter due to some insurance mis- payment his mortgage is now 1,700.00 a month, which means ruin for him. I am so sick of these crooks. Another long time friend who has had a business as long if not longer than my thirty year business has a brother fighting cancer and fighting to save his home due to the fraud. Her and her husband just filed bankruptcy to save one of their three homes. The stories are endless. I have eight grandchildren and five adults living at my home who had great businesses and homes and they are living in a house I was mod frauded and trying to save. No one sleeps at night. When I am on the web people are answering me at 3:00 am my time and some of them are on the other side of the U.S. All of us trying to put the puzzel together to stop this crime. And our Senators tell us they do ‘not have the time to read the investigative Senate report, that spells it out in black and white the banks have pre planned this entire con job. Wall Street and the Financial Crisis; Anatomy of a financial Collapse.” I have yellowed in the major parts and delivered it to my Senator, to help her get the picture. My business is at a tenth of what it was due this financial collapse this report blames on the banks.

  6. Angryand not takingit:

    Case law for your question about the note and deed:

    U.S. Bank National Association vs Antonio Ibanez : In order for the bank to foreclose they must show a perfection of chain of title both in the Security Deed or Deed of Trust and the Promisory Note. It was ruled that a blank assignment is not legal proof of perfection of title for the promisory note. County records with true dates and signatures are the only acceptable proof of claim, including allonges attached to the physical note when room to record on the document itself has been exceeded. Georgia law is specific:
    Section OCGA § 44-2-15 list the officers who are authorized to attest to the authenticity of a mortgage deed., or acknowledged before an officer, such as a notary public, and in the case of real property and § 44-14-33 provides that to admit a security deed to record, the deed must be attested by by a second withness.
    Plaintiffs motion the court to take “mandatory judicial notice” of this ruling.
    The promisory Note and the deed of trust must be together at all times and there mus always be a clear and unambiuous chain of title, traceable in Public Records for all t parties of interest in real property.

    Cranston vs Gonzales :

    Carpenter vs Longan : Where the note goes, the Deed Of Trust/Mortgage must go. If the note has been securitized, then the note has been destroyed, making the Deed Of Trust invalid and unenforceable, since the DOT gives the right of sale to the lender.

    Chancey VS FDIC :

    Brumby vs Deutshe Bank National Trust :

  7. The bank’s General Counsel is actually intrigued by my allegations. I think the foreclosure mill sued for foreclosure on behalf of a bank which it does not represent. The Mill made itself the trustee of the loan foreclosure (so do the proceeds go to mill)? Is it conceivable the foreclosure mill sues in the name of unrelated bank, never says anything to them, doesn’t give me their contact info., gets a foreclosure order in bank’s name, sells home at foreclosure and somehow collects the proceeds without this bank ever knowing (that is until I told them)?

  8. Anonymous

    Then why when sued don’t the banks cave in or countersue the servicers for pretending the foreclosure is on behalf of the bank. This has been going on a long time

  9. Nora

    Custodian is meaningless. EXCEPT — they have records.

  10. jordana lipscomb

    Your comment –“is it possible this bank doesn’t even know the foreclosure mill has filed this suit?”

    Absolutely –YES. Bank that purchased the “collection rights” — to fake “mortgage” — has long disposed of those collection rights before foreclosure action takes place.

    The question is — how did the bank get the fraudulent “collection rights” to begin with — and how did they subsequently dispose of the fraudulent collection rights??? And, that includes the entire path of the fake securitization chain — including Depositor – trustee — and servicer. SERVICER. SERVICER TO WHO???

    Open up those mortgage data bases.

    Massive fraud upon the courts. Whether courts are compliant or not —

    And, let’s open up the insurance records.

  11. But where does this leave those of us who closed with WaMu and were handed over to Chase, if their trusts allowed for the originator to serve as custodian? Are we sunk, as far as overturning our foreclosure with a non-perfected lien on an illegal mortgage?

  12. So what you’re saying is that the investor indicated on the MERS site is not the proper party to foreclose. But I ask how this assignment of mortgage only creates a legal interest to foreclose by a bank which has no other documentation attaching it to the loan? Under what authority does this bank file foreclosure lawsuit against me? And also, is it possible this bank doesn’t even know the foreclosure mill has filed this suit?

  13. zurenarrh,
    “… there a law–federal or state–that says the mortgage follows the note?”

    no law – fed or state.[that i have ever found nor recall ]

    Gary H,- this is a case precedent not “law”
    U.S. Supreme Court
    Carpenter v. Longan, 83 U.S. 16 Wall. 271 (1872)….. @274

  14. The “investor” is a scam artist.

    The “creditor” is the one:

    “…whose balance sheet the mortgage loan lies on.”

    Can he show you a verifiable ledger and a balance sheet? NO.

  15. Neil said:

    “…While it is possible for the investor/lenders to assert claims and perhaps establish equitable or judgment liens, they have not shown any desire to do so. The record is devoid of any attempts in the last 10 years of any such attempt….”

    I think the record is no longer devoid of such attempt. A couple of months ago, I was sued by the investor claiming to be “the creditor to whom the debt is due,” representing the certificate holders. Oddly, the investor claims to be a successor of MERS. If MERS has bare legal title, is that what the investor has as its successor?

  16. tollbooth, harry is not the devil. SYNONYMOUS, your argument as to dual funding/defaulted collection rights/resecuritization is re-inforced by the HOPENOW solicitations dated 3 days apart that came for 10 months. different account numbers. I’m also convinced that the original obligations are extinguished and the cash has been secreted off shore to the Caymans and to Europe.

  17. @zurenarrh,

    “… there a law–federal or state–that says the mortgage follows the note?”

    U.S. Supreme Court
    Carpenter v. Longan, 83 U.S. 16 Wall. 271 (1872)….. @274

    “The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”

  18. Another by-product of the fake mortgage/collection rights selling shyster money-laundering wall street/bankster/government greedy bastard thieves:

    U.S. Cities Criminalize Homelessness, Violate Human Rights Agreements

    “…The most recent federal homeless count data available is from January 2010. It shows there were 700,000 individuals in the U.S. who were homeless. The Department of Housing and Urban Development report found that homelessness grew very little between 2009 and 2010. But the share of families who lack a place to sleep continued the rapid expansion that began during the recession. Between 2007 and 2010, the number of homeless families grew by 20 percent.

    The nation’s elevated unemployment rate and the large number of foreclosures have increased demand just as municipal and state budget problems have led to a reduction in services available to the poor and homeless. As a result, many communities — in particular suburban communities where services for the homeless are often nonexistent — are confronting an increasingly visible homeless population forced to sleep in city parks or take up residence in one of a growing number of tent cities, Tars said.”

  19. Davies910

    Unfair business practice? Seems a stretch whatever they did

    Odd case

  20. Thank you Carrie and Anon.

    Anon has been saying it for quite sometime and as I have been working in that direction, it is proving to be so.

    Look at it from all angles and it is easier to understand and to believe.

  21. By the way, ANONYMOUS has been “digging” for YEARS into all this stuff…and has uncovered the WHOLE truth. To all the “naysayers”—the “powers that be” have done a great cover-up job…after you understand what really happened and get your jaw up off the floor—PLEASE help in whatever way you can to spread the truth…’cause the banks and the government definitely don’t want the truth, the whole truth, and nothing but the truth out there…so it’s up to “We the people”…

  22. B R I L L I A N T

    Charley Reese’s Final column!
    A very interesting column.. COMPLETELY NEUTRAL
    Be sure to Read the Poem at the end.

    Charley Reese’s final column for the Orlando Sentinel…
    He has been a journalist for 49 years.
    He is retiring and this is HIS LAST COLUMN.
    Verified as authentic

    Be sure to read the Tax List at the end.

    This is about as clear and easy to understand as it can be. The article below is completely neutral, neither anti-republican or democrat. Charlie Reese, a retired reporter for the Orlando Sentinel, has hit the nail directly on the head, defining clearly who it is that in the final analysis must assume responsibility for the judgments made that impact each one of us every day. It’s a short but good read. Worth the time. Worth remembering!

    545 vs. 300,000,000 People
    -By Charlie Reese

    Politicians are the only people in the world who create problems and then campaign against them.

    Have you ever wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits?

    Have you ever wondered, if all the politicians are against inflation and high taxes, WHY do we have inflation and high taxes?

    You and I don’t propose a federal budget. The President does.

    You and I don’t have the Constitutional authority to vote on appropriations. The House of Representatives does.

    You and I don’t write the tax code, Congress does.

    You and I don’t set fiscal policy, Congress does.

    You and I don’t control monetary policy, the Federal Reserve Bank does.

    One hundred senators, 435 congressmen, one President, and nine Supreme Court justices equates to 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

    I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.

    I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a President to do one cotton-picking thing. I don’t care if they offer a politician $1 million dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes.

    Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.

    What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for creating deficits. The President can only propose a budget. He cannot force the Congress to accept it.

    The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? He is the leader of the majority party. He and fellow House members, not the President, can approve any budget they want. If the President vetoes it, they can pass it over his veto if they agree to.

    It seems inconceivable to me that a nation of 300 million cannot replace 545 people who stand convicted — by present facts — of incompetence and irresponsibility. I can’t think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.

    If the tax code is unfair, it’s because they want it unfair.

    If the budget is in the red, it’s because they want it in the red.

    If the Army & Marines are in Iraq andAfghanistan it’s because they want them in Iraq and Afghanistan …

    If they do not receive social security but are on an elite retirement plan not available to the people, it’s because they want it that way.

    There are no insoluble government problems.

    Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like “the economy,” “inflation,” or “politics” that prevent them from doing what they take an oath to do.

    Those 545 people, and they alone, are responsible.

    They, and they alone, have the power.

    They, and they alone, should be held accountable by the people who are their bosses. Provided the voters have the gumption to manage their own employees…

    We should vote all of them out of office and clean up their mess!

    What you do with this article now that you have read it… is up to you. This might be funny if it weren’t so true. Be sure to read all the way to the end:

    Tax his land,
    Tax his bed,
    Tax the table,
    At which he’s fed.

    Tax his tractor,
    Tax his mule,
    Teach him taxes
    Are the rule.

    Tax his work,
    Tax his pay,
    He works for
    peanuts anyway!

    Tax his cow,
    Tax his goat,
    Tax his pants,
    Tax his coat.

    Tax his ties,
    Tax his shirt,
    Tax his work,
    Tax his dirt.

    Tax his tobacco,
    Tax his drink,
    Tax him if he
    Tries to think.

    Tax his cigars,
    Tax his beers,
    If he cries
    Tax his tears.

    Tax his car,
    Tax his gas,
    Find other ways
    To tax his ___.

    Tax all he has
    Then let him know
    That you won’t be done
    Till he has no dough.

    When he screams and hollers;
    Then tax him some more,
    Tax him till
    He’s good and sore.

    Then tax his coffin,
    Tax his grave,
    Tax the sod in
    Which he’s laid…

    Put these words
    Upon his tomb,
    ‘Taxes drove me
    to my doom…’

    When he’s gone,
    Do not relax,
    Its time to apply
    The inheritance tax.

    Accounts Receivable Tax
    Building Permit Tax
    CDL license Tax
    Cigarette Tax
    Corporate Income Tax
    Dog License Tax
    Excise Taxes
    Federal Income Tax
    Federal Unemployment Tax (FUTA)
    Fishing License Tax
    Food License Tax
    Fuel Permit Tax
    Gasoline Tax (currently 44.75 cents per gallon)
    Gross Receipts Tax
    Hunting License Tax
    Inheritance Tax
    Inventory Tax
    IRS Interest Charges IRS Penalties (tax on top of tax)
    Liquor Tax
    Luxury Taxes
    Marriage License Tax
    Medicare Tax
    Personal Property Tax
    Property Tax
    Real Estate Tax
    Service Charge Tax
    Social Security Tax
    Road Usage Tax
    Recreational Vehicle Tax
    Sales Tax
    School Tax
    State Income Tax
    State Unemployment Tax (SUTA)
    Telephone Federal Excise Tax
    Telephone Federal Universal Service Fee Tax
    Telephone Federal, State and Local Surcharge Taxes
    Telephone Minimum Usage Surcharge Tax
    Telephone Recurring and Nonrecurring Charges Tax
    Telephone State and Local Tax
    Telephone Usage Charge Tax
    Utility Taxes
    Vehicle License Registration Tax
    Vehicle Sales Tax
    Watercraft Registration Tax
    Well Permit Tax
    Workers Compensation Tax

    Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world.
    We had absolutely no national debt, had the largest middle class in the world, and Mom, if agreed, stayed home to raise the kids.

    What in the heck happened? Can you spell ‘politicians?’

    I hope this goes around THE USA at least 545 times!!! YOU can help it get there!!!


  23. Thank you carie ! Very useful!

  24. usedkarguy—you are right to believe…sometimes the whole truth is hard to believe…but that doesn’t make it not so. Wall Street/Banks (in collusion with the government entities), were allowed to play fast and loose ILLEGALLY with our “signatures”…and America is paying the price…and will for a long, long time…

  25. tnharry,

    Ad nauseum??

    First -tired of parties here working for the crooks –so tired of some here trying to make a business on fraud against homeowners. It simply is not acceptable.

    Second, once all proprietary “records” are finally divulged, subprime refinancing fraud is exposed — game over for those who are still trying to making a buck on the fraud.

    Third, the securitization of fraudulent “collection rights” — was a scam from the onset — never MBS — get your heads out of MBS — these “refinances” (not actually refinances) — were “loans” REJECTED from traditional MBS — credit enhancement was created from layers of mezzanine tranches for credit default swaps — (purchase of collection rights) — and were NEVER secured mortgages. This is what caused the financial crisis FALL. Understand that subprime securization was manufactured securitization fraud.

    Fourth — the direction in courts — has been fraud upon the court — over and over — and, this is finally surfacing. There was no “funding” — PERIOD. —- All that existed was a purchase of collection rights from GSEs — by which “purchase” was covered by insurance for fabricated default and rejects.

    Fifth — if you want to say that any borrower is responsible for any non-“funded” loan — that fabricated “funded” loan is unsecured — because there was NO VALID MORTGAGE.

    Sixth — There is NO lender. NO LENDER. NO FUNDING — NO MORTGAGE — Just your good “ole” debt buyer shyster — for unsecured fraudulent collection rights.

    If anyone hear chooses to think otherwise — you are — and have been — barking up the WRONG tree — and not battling the battle that needs to be fought. You are, instead, feeding the “investors” to falsified collection rights — and giving credibility to a loan that is not a loan — and not a mortgage. You are feeding the homeowners to “wolf” debt buyer “investors” — as they prefer to be called.

    Proof?? in the mortgage data base proprietary files.

    usedkarguy — BELIEVE IT. Wild ride?? Only starting. Magic carpet is not with debt buyer “friends” —–


    “Without the NOTE, a mortgage is UNENFORCEABLE, while without the MORTGAGE, a NOTE is simply an UNSECURED DEBT OBLIGATION , no different from credit card debt.”

  27. […] Livinglies’s Weblog Filed Under: Foreclosure Law News, Foreclosure News Tagged With: crisis, foreclosure, […]

  28. Tnharry, is there a law–federal or state–that says the mortgage follows the note? Or is that more of a custom? I’m not trying to be snarky, I’m really asking. I have been looking for such a law without much success.

  29. tnharry, your statement, “if it’s okay for homeowners to file docs they absolutely know are fraudulent or to otherwise forge signatures onto, then it’s also okay for the banks to do so”, shows your back story very well. Since when did tnharry become judge and jury? How do you know with such conviction that the homeowner must “absolutely know are fraudulent”? You have a magic 8 ball? Tea leaves?

    Why did you make it plural? There was one homeowner mentioned, not homeowners. What’s with your conclusion that if the borrower gets away with it the banks should also? Rubbish! Balderdash! And whatever other highbrow words denounce this that end in ish.

    @Marie, I was referencing your humor with the Cubed statement. Not meant as a slam.

  30. wow e. tolle. my comment was “…as far as the courts are concerned…” and “…the judge referred them…” somehow you’ve decided i’m pure evil as well. i made no judgments or personal statements

  31. and another thing: these judgments being handed down are being based on “political grounds”, not “legal grounds”. The illegality of it all is being brushed aside because “62 million mortgages” handled by MERS can’t possibly be deemed “unsecured”. Legal or not, we’re losing.

  32. @ tnharry, you wrote:

    “no matter how evil you think the bank is, two wrongs don’t make a right as far as the courts are concerned.”

    Really? Two wrongs? How about ONE lawsuit that has 150 separate depositions from people who are testifying that they had NO IDEA what they were signing and filing on behalf of the banks? We all know that on record there are hundreds of thousands of false filings. Behind the record it’s probable easily in the millions, as the banks were running full tilt long before any recognition of the problem.

    The banks countered the 50 AGs with a statement that said the banks…. “shall implement processes reasonably designed to ensure the factual assertions made in…sworn statements…are accurate and complete…” Reasonably designed? What they’re really saying here is that they don’t consider it perjury if they make a reasonable effort not to lie under oath and if they get caught they don’t consider the lie to be that important. Were you taught that in Law and Ethics 101?

    So your two wrongs don’t make a right statement should actually read conservatively somewhere around a half million wrongs don’t make a right.

    For my part, I’ll just agree to disagree, not matter what your rebuttal. I believe all of you people that worked at foreclosure mills have blood on your hands plain and simple. I’d rather clean septic systems with a spoon and beach bucket before taking employment at any such place. No, it’s not meant to read as a high and mighty stance, just a belief that what goes around comes around. And I’d rather not do that to my friends and neighbors or even strangers.

    I’m sure you’re right. The borrower has probably already been prosecuted and is more than likely serving 20 years for the crime. All the while the bankers who orchestrated the entire fraudulent framework mentioned above are doing 20 minutes at the gym on their way to the country club for 18 holes.

  33. @harry, carie’s arguments are based on the ANONYMOUS argument that the loans were “refinances” It’s a wild ride, a real stretch, but I can almost make that apply to my case. I don’t “believe” it, but, if it were true, it would fill in some of the holes in my research.
    1) loan originated by WFHM, mortgage recorded Wells Fargo Home Mortage. June 2005
    2)check at closing from Deutsche
    3)after months of trying to keep up with bogus “default charges”, made last regular payment July 4, 2008
    4)foreclosed by HSBC as Trustee for WFHET 05-2 in February 09
    5)loan appears in a Wells Fargo 1999 Trust (Norwest Asset Sec.Co.)
    this fact makes me think that the loan was defaulted and “re-booked” as a current asset after the WFHET incurred a “trigger event”. The trust performance stats show over 30% defaults in the first two years after closing.
    6)Judgment of foreclosure obtained (1-26-2010)
    7)Stopped three sheriff’s sales and filed motion to vacate for fraudulent docs; denied 12-14-2010
    8)January 18, 2011, plaintiff withdraws foreclosure and lis pendens pending “settlement” (aka loan modification)
    9)made last modified payment May 2011
    10)June 2011 filed lawsuit for fraud/inducement/fiduciary/failure to supervise employees

    where I’m going with this is that the loan was defaulted prior to MY DEFAULT and trust assets transferred to the 1999 trust.

    gotta go. see if you can figure this one out. No claim ever filed with the PMI carrier (Triad)

    gotta go. be back later

  34. Tnharry,

    Where in any law does it say that the mortgage follows the note? I agree that that is the general principle, but I don’t know of any particular place in the law which states that in those terms. I’m not saying that such a law does not exist, I’m just saying I don’t know of it.

  35. @carie – you must have more than that. just because they haven’t given it to you doesn’t mean that it doesn’t exist. where’d you get all of the fake default/buyback of servicing rights stuff?

  36. To Carrie:

    You say : “ask creditor/lender ” for ledger……Which creditor/lender are you referring to, the Plaintiff creditor/lender that was allegedly assigned the mortgage , who is foreclosing or the alleged creditor/lender who is listed on the note/mortgage at closing?

  37. The bottom line:

    Ask supposed creditor/lender for proof of ledger and balance sheet the supposed mortgage loan lies on…they don’t have it…because it’s all FRAUD.

  38. @e tolle – and I’m not sure Jordana’s post goes right to the heart of the davies link at all. to make that comparison, you have to hang on every word, including that the MERS records don’t identify the mystery bank. it’s a common theme on this site every day that the MERS records are not complete and are otherwise not reliable.

  39. touche e. tolle. if it’s okay for homeowners to file docs they absolutely know are fraudulent or to otherwise forge signatures onto, then it’s also okay for the banks to do so. you either keep the moral high ground or you don’t

  40. Jordana’s post goes right to the heart of the argument in the papers filed by BAC in Davies post. The bank is quick to sue the homeowner for doing EXACTLY what the banks are doing thousands of times per day, filing false claims of assignment, of ownership, trustee flipping, you name it. Of course tnharry approves this message.

    If the banks had their way, the court system would be ruling in their favor nearly every time, against the hapless homeowners of America. Oh wait….the banks do have their way, and the courts are ruling against the hapless borrowers in almost every decision going across their desks time and time again. Even when nullifying age old law that people have hung their hats on for generations.

    Tnharry points out that he’s seen criminal charges referred on borrowers recording bogus docs. Let’s count together exactly how many bankers have been busted and run through the wringer for the hundreds of thousands of false filings recorded by them….ready, here goes everybody… one….. uh…do In hear a one? Anyone?

  41. In this instance it’s unclear who owns the note at all … AHMSI bought Option Ones’ assetts ,, but Option One shouldn’t have owned anything but servicing ,,, The VEAL case showed that Option One didn’t transfer/deposit the note so did they (Option One/Sand Canyon/H&R Block) really have the note? Did they intentionally defraud the security investors?

    Hypothetically Speaking (wink wink)

    If one were to be sued for foreclosure by AHMSI (although they only named the trustee , WF , as plaintiff) , on a loan originated by Option One .. and there were numerous assignments required to make a chain of ownership complete… What would be the proper legal path to take to really soak these bozos? I’m tired and could use a few years on a sunny beach.

    I’m thinking all payments paid in need to be refunded since they couldn’t have gone to the rightful owner of that income stream , a few multiples of the appraisal valuation of the house plus the note marked “paid in full” ..

    My law firm has “unfinished business” with LPS. I’m sure they’re all tingly about this..

  42. In my situation the assignment of the mortgage (which occurred post BK discharge and right before foreclosure) was done in favor of a bank which has nothing to do with my loan. It is not the owner or investor trust per the MERS records. Why didn’t the servicer simply assign the mortgage to itself? I have reason to believe the assignee bank never even knew about the transaction or even that it is a plaintiff in this case. Anyone have thoughts or advice?

  43. @carie – where are you getting that position? i’ve seen you discuss it ad nauseum, but i admit i’ve never really following the reasoning

  44. More of the same BS:

    Neil said:

    “The bottom line is that the securitization of mortgages loans never actually happened. The defects in the origination process, the absence of transfer documents and delivery in accordance with the pooling and servicing agreements are incurable.”

    Neil—who are you protecting??? The securitization never happened, because the LOANS NEVER HAPPENED—

    THIS IS WHAT HAPPENED…and you know it:

    “…Subprime refinance was unsecured — a false and fraudulent mortgage — and nothing more than debt collection on a fraudulent transfer of collection rights to a false default debt. Everyone (in subprime refinance) was in (false) default before they even refinanced.
    The banks (as debt buyers) accomplished this by falsely placing borrower in current default (and never telling them) — and then the servicer purchases the collection rights from either Freddie or Fannie. Then the servicer “reinstates” the false default debt with a fraudulent refinance. And, if there is a subsequent refinance, that is just another transfer of collection rights. Servicer reports original F/F mortgage as “paid” — but it is “Paid-OUT” — by servicer purchase — and not “Paid-OFF” by the borrower as it should have been by the (fraudulent) subprime refinance. . Thus, borrower remains in default on F/F loan – despite a subprime refinance — and borrower can never refinance with an F/F again — They are doomed if they miss even one payment on the false collection rights — and will never recover because always held in default — on both the F/F loan and the collection rights. BUT BORROWERS should not be paying on fraud!!!! They have a right withhold payments on fraudulent debt.
    All fraudulent, all in violation of consumer protection laws — and, because the “creditor” of collection right never validates the “debt” — by disclosing the actual creditor to the false default debt — in violation of FDCPA and May 2009 TILA Amendment. Meaning borrowers should not be paying anything — because of fraud and violation of federal statutes.”

  45. @davies – indeed. no matter how evil you think the bank is, two wrongs don’t make a right as far as the courts are concerned. i’ve seem similar schemes result in a referral to the district atty from the judge

  46. Homeowners beware of filing any documents on the land title record that are bogus. It will eventually catch up with you and the law.

    Bank of America N. A. as successor in interest to Countrywide Bank N. A, and Bank of America Home Loan Services vs. Denise Honc, Dan Shabtai, Boyan Panajotov, Moonraven Medicine Bird, Does 1-100.

  47. Neil Garfield, you are an angel for pointing things out and pointing people in the right direction, Lawyers too. This is great news and I hope as you do too that lawyers get this and use this information to help homeowners who need this break! Thank you for being there.

  48. so many moving parts here, but how do you reconcile this with the premise that the security follows the note generally?

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