Best Post of the Week: Houston, We’ve Got A Problem – Bevilacqua


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EDITOR’S NOTE: Tyler Durden on ZERO HEDGE has written the best current status report for the mortgage mess that I’ve seen this week or for that matter, this year. It’s worth studying because it fills in a lot of spaces with real information and reality applied to the gaslight environment created by Wall Street. I’ve highlighted those things that I thought were especially helpful for lawyers, pro se litigants and really all homeowners or for that matter anyone with debt — because it was claimed as securitized but now we know that for the most part it wasn’t.

Guest Post: Houston, We’ve Got A Problem – Bevilacqua

Tyler Durden's picture

Submitted by Tyler Durden on 10/19/2011 23:25 -0400

Submitted by Greg Lemelson of Amvona

Houston, We’ve Got A Problem – Bevilacqua

KranzConsoleOn Oct. 18th, 2011 the Massachusetts Supreme Judicial Court handed down their decision in the FRANCIS J. BEVILACQUA, THIRD vs. PABLO RODRIGUEZ – and in a moment, essentially made foreclosure sales in the commonwealth over the last five years wholly void. However, some of the more polite headlines, undoubtedly in the interest of not causing wide spread panic simply put it “SJC puts foreclosure sales in doubt” or “Buyer Can’t Sue After Bad Foreclosure Sale

In essence, the ruling upheld that those who had purchased foreclosure properties that had been illegally foreclosed upon (which is virtually all foreclosure sales in the last five years), did not in fact have title to those properties.

Given the fact that more than two-thirds of all real estate transactions in the last five years have also been foreclosed properties, this creates a small problem.

The Massachusetts SJC is one of the most respected high courts in the country, other supreme courts look to these decisions for guidance, and would find it difficult to rule any other way in their own states. It is a precedent. It’s an important precedent.

Here are the key components of the Bevilacqua case:

1. In holding that Bevilacqua could not make “something from nothing” (bring an action or even have standing to bring an action, when he had a title worth nothing) the lower land court applied and upheld long-standing principles of conveyance.

2. A foreclosure conducted by a non-mortgagee (which includes basically all of them over the last five years, including the landmark Ibanez case) is wholly void and passes no title to a subsequent transferee (purchasers of foreclosures will be especially pleased to learn of this)

3. Where (as in Bevilacqua) a non-mortgagee records a post-foreclosure assignment, any subsequent transferee has record notice that the foreclosure is simply void.

4. A wholly void foreclosure deed passes no title even to a supposed “bona fide purchaser”

5. The Grantee of an invalid (wholly void) foreclosure deed does not have record title, nor does any person claiming under a wholly void deed, and the decision of the lower land court properly dismissed Bevilacqua’s petition.

6. The land court correctly reasoned that the remedy available to Bevilacqua was not against the wrongly foreclosed homeowner but rather against the wrongly foreclosing bank and/or perhaps the servicer (depending on who actually conducted the foreclosure)

When thinking about the implications of Bevilacqua – the importance of point six cannot be overstated.

The re-foreclosure suggestion is not valid

Re-foreclosing on these properties in not likely as has been suggested by bank layers in light of the Bevilacqua ruling. We aren’t talking about Donald Trump here and we have a funny feeling he won’t be affected either. Mostly it’s guys like Bevilacqua who bought single or multi units, in the “hundreds of thousands” range. It seem unlikely that the majority of these folks would have the capital to eat their existing loses, re-foreclose at great expense, and on top of all of that come out as the highest bidder on the very property they formerly thought was their own. In many cases, as was the case in Bevilacqua, the original purchaser of the foreclosure may have already resold the property and moved on, thus leaving in their wake an even more serious problem; the likelihood of a property owner, who had nothing directly to do with a foreclosure, but is left with all the fallout of a post-Bevilacqua world.

Re-bidding on these properties in a re-foreclosure scenario would be done in what is soon to be a new inflationary environment (most originally bid in a deflationary environment for housing), thus making the “re-foreclosure” blank threat all the more unconvincing and unlikely.

However, it should be easy enough for investors similarly situated to Bevilacqua to simply hire fee contingent attorneys who can sue the banks and servicers for conveying fraudulent deeds – that seems like a much easier and logical proposition. When the potentially millions of lawsuits are added to the complaints filed by investors in MBS, we think the banks will finally be revealed as wholly insolvent. The only other way it could happen faster, is if the average American home owner, realizing he may never obtain clear title to his home (short of an indemnity from his bank), finally stops making his monthly payments on his invalid note (which completely lacks a valid security instrument). In this way, the existing insolvency of banks would be recognized in a matter of days rather than months or years.

The act of denial does not actually alter reality

Ostriches are said to have discovered this the hard way. On November 12th, 2010 in our article “Tattoos, Pyramid Schemes and Social Justice” we advocated that home owners, with securitized mortgages, regardless of their ability to pay, consider suspending their mortgage payments, and place those funds into a private escrow account instead. We wrote:

“Radical though it may seem, we believe the only way to stop the chaos of fraud and the breakdown of the rule of law in our courts, and most importantly to ensure that we ourselves are not participants in the fraud, is for homeowners who can afford their mortgage to stop paying it…”

The article goes on to say:

“For example, what is easier; to scorn those who are being foreclosed on because they can no longer afford their mortgage or to accept the possibility that our entire financial, and maybe justice system might be badly corrupted? Across all spectrums of crime, victims are often blamed, just ask attorneys who represent rape victims. This phenomenon is by no means unique to mortgage fraud, or those who have been raped by the institutions who carry out this trade. It has been made to appear as if those who have fallen on hard times are a matter of “incidental” inequalities in an otherwise procedurally just system. However, it is precisely the opposite which is true. Our financial institutions have created deliberate inequalities, through the use of procedurally unjust systems.”

We pointed out that suspending such payment might be done for the following reasons, which in light of the recent Bevilacqua decision, and the pending Eaton Decision, are increasingly being proven correct:

“1. They are not sure where or if their payments are going to the true note holder.

2. They no longer know who the true note holder is.

3. They have a legitimate concern that they may not be able to ever obtain clear title and/or title insurance (in the event of a sale) given what we now know about improperly conveyed titles and the illegitimacy of “MERS”.

4. They do not want to be an unwitting or passive participant in fraud.

5. They care about America, want our culture to be healed and recognize the dignity of every human being.”

Long before the Ibanez decision was handed down we wrote the following (taken from the same article):

“If these legitimate reasons are the cause to suspend mortgage payments, then what attack on these “non-co-operators” character can be levelled? In these cases, Judge’s will have to allow for proper civil procedure to take place in order for the legitimate inquiries of concerned Americans to come to light. Since banks virtually never produce adequate documentation (which appears to be by design), chances are things will escalate.”

We went on to discuss the unique risks of apathy and denial in the following:

“…Americans have a duty to ask critical questions about the operations of their financial institutions, and if evidence has been presented that a deal was made, but not everyone was playing by the rules, than those deals need to be looked at again. It is not good enough any longer to say, if it doesn’t affect “me” than, I’m not getting involved. We have a duty to one another as Americans, and more importantly as human beings, to care about truth and justice. What’s more, apathy, so long as we are not affected, is a short lived consolation. Ultimately, this crisis will affect everyone sooner or later.”

Certainly when the SJC handed down their opinion affirming Bevilacqua, perhaps hundreds of thousands, and ultimately millions of people who previously thought they were not affected, were suddenly well, affected. That is because there has been about six million foreclosures since the current economic crisis began, and those foreclosures may have resulted in many more interested parties, as was the case in Bevilacqua, who sold the subject property to four new owners, thus multiplying the number of parties involved, and ultimately the number of legal actions which could be brought. It is not hard to see where six million voided foreclosures might well result in new lawsuits in excess of that number – and if the courts advice is taken, these complaints would be directed, and properly so, at banks and servicers.

We expanded greatly on the themes of fraud, denial, and the likely economic consequences in our articles “Ibanez – Denying the Antecedent, Suppressing the Evidence and one big fat Red Herring” and “Eaton – Dividing the Mortgage Loan and Affirming the Consequent” which covered the other two recent landmark SJC cases – these may be worth reading in tandem with the present article in order to understand the full breadth of the problem.

In the Ibanez article, which was written in January of this year we wrote the following:

“If you live in Massachusetts and your mortgage has been securitized, or if you have purchased a foreclosure property, we think it would be wise to consider suspending your mortgage payments if you haven’t already.”

We believe these particular words have become incredibly relevant given the implications of Bevilacqua.

Finally, In our article “On the ethics of mortgage loan default” we tried to cover any outstanding inhibitions homeowners might have about the advice we were giving.

A few phone calls opens a whole new world

We decided to call a few title insurance companies to get their “take” on it all. We made the mistake of identifying ourselves as “bloggers” in the first phone call – that call may well have set a new land speed record for the fastest time from answering to hanging up. Thinking there might be a smarter approach, we decided to identify ourselves as homeowners (equally true) on the next call – the results were a little better, but only slightly.

The underwriters and title examiners we spoke to kept asking if we were attorneys, or if we represented the home owner as “council”. We thought this was curious because we kept pointing out that we were ourselves just homeowners. Then it hit us, they have never actually spoken to a real, live, breathing customer on the policy origination side, they had only ever spoken to lawyer-brokers. We thought; what an interesting confluence of incentives this must create, and why is the buyer of the policy necessarily so far removed from the seller?

the_money_trailFollow the money trail – that’s what they say. Looking for answers, follow the money trail. What is the one piece of the equation upon which all else hinges? It’s not the lawyers, it’s not the judiciary, the answer lies in the investment banks – but they must first pass through the gatekeepers of real estate; title insurance companies. To understand the problem does require some understand of law, but really mostly it’s an understanding of finance and of business that is required above all else. Money in this case, cannot pass from bank depositor, to banker, to bank borrower in real estate transactions without the all-important “title insurance policy”.

So maybe there will be a happy ending after all, for once upon a time didn’t the likes of AIG insure a whole lot of CDS’s for Goldman Sachs who was then paid 100 cents on the dollar (in a 43 cents on the dollar world)? That worked out well – just think of the benefits of insurance – AIG is still around, Goldman’s stock price went on to quadruple in the following 18 months. The cost was relatively low, and mostly out of sight – voluntary shareholders in AIG were emancipated from their money-investment in AIG stock, and were swiftly replaced with involuntary shareholders – also known as; tax payers. It’s the bankrupt companies definition of “preferred” shareholder – although it veers slightly from the traditional one.

bridge_jumpingSo does it matter what lawyers, bankers, bloggers and judges think? This is America and America is all about business, and in this case, business cannot be transacted without title insurance companies, and the good thing about insurances companies is they have actuaries, and actuaries calculate risk, this is especially important since the banking community has proven that they either cannot calculate risk or are not interested in doing so. Actuaries are not exciting people, they are number crunchers, they don’t do bridge jumping and they would never take inordinate risk, right?

The insurance business is interesting, even if their actuaries aren’t’. That’s because it’s really not about making money off writing policies, anyone who knows the insurance business (or has read a 10Q, an annual report or listened to a conference call of one) knows that insurance companies make their money from investing the “float“, that is to say the funds held in trust between the time policy revenue is paid in, and the time claims are paid out. It’s a good business, in fact it is so good – almost everyone wants in. this business has become so robust that it even supports its own cottage industry in off-shore jurisdictions where the return on the “float” can even go untaxed – or did you think those insurance executives jets just happened to have Bermuda, The British Virgin Islands, and the Caymans stuck in their GPS just because those places have nice beaches? Although we concede they also have very nice beaches.

Needless to say it’s an even better business, when you almost never have to pay out on a policy. Title insurance is unique in that way. Even the SJC conceded in Bevilacqua that this sort of “Try Title” action had not been presented before the SJC in over a hundred years. In fact, business is so good, that there is really no entry on the Profit and Loss statement of these firms for marketing expense – when was the last time you saw a TV ad, or an AD on the Internet for a title insurance company which had a better product at a better price? There is no Geico Gecko for the title insurance business.  For that matter, don’t hold your breath on finding a deal on title insurance through Groupon either.

This piqued our interest. We were so drawn to the prospect that the answers to a multi-trillion dollar question may lie in this little known, little observed, obscure industry that we decided to pick up the phone and call a few title examiners, underwriters and brokers. What we learned was nothing short of fascinating. First they all clammed up and didn’t want to talk SJC cases. Second, they affirmed, after a bit of cajoling, that they will write a policy if any servicer gives them a “pay off” letter – we’re talking a one page letter from one perfect stranger to another – insuring ownership in hundreds of thousands if not millions of dollars in real property (per transaction), and of course trillions at the nation level. This one pager could then be recorded at any local registry with precisely zero oversight.

In a world where you can’t take hair conditioner on to a flight (even in all your barefoot glory), it turns out anybody can record title to a property worth large sums with absolutely no oversight or security checks. Frankly, we’re beginning to feel like we’ve been in the wrong business all these years.

the_matrix_3When pressed on the Eaton case, and the fact, that servicers cannot actually discharge anything (as Green Tree Servicing, LLC admitted in the uber-important Eaton case), certainly not the debt, most hung up the phone quickly – although we were exceedingly polite, professional and even gentle in our approach. These conversations, where something like being in the twilight zone. Just when we thought we had contemplated the last layer of the onion, we couldn’t believe it, with just a few phone calls, the matrix of lies came streaming down before our face yet again, like vertical lines of green computer code – apparently the underwrites took the wrong pill.

How hard would it be for the title examiners and underwriters to simply go deeper than one page, or contemplate the importance of the decisions coming out of the land court and the SJC?

The failure to perform risk assessment in the insurance underwriting business really means a lapse in fiduciary responsibility. The Absence of fiduciary responsibility means the possibility of shareholder class action lawsuits.

Conflict of Interest? You think?

So if the insurance business isn’t about making money on writing policies (predicated on sound actuarial work), and if an insurance company can even lose money on underwriting as many often do, and still make a profit by investing “the float”, then there may be an incentive to write policies, that reflect less than prudent risk management – that is to say losses on the underwriting side of the business would be made up on the investment side. As long as this is successful, shares in these companies can be sold to investors. The best investors are large funds like mutual funds because they buy in large junks of shares, are run by investment managers who are generally not very shrewd, and they hold long enough for insiders to sell. Large mutual funds are also the ideal investors because they have a steady stream of cash from IRA’s and 401k’s. IRA’s and 401k’s are steady sources of cash to mutual funds because most of those folks who were wise enough to envision saving, were also determined to buy and own a home (rather than rent one), thinking (perhaps wrongly), that it represented a sound investment. In this way, the loop from policy purchaser, to indirect title insurance company shareholder is complete. It’s almost like a double tax on the unsuspecting home purchaser, which is subtle and goes almost entirely undetected. That’s is why most homeowners have no clue who their title insurance company is, but can tell you in half a second who insures their car, their health care, or their home.

So what sort of investments are the investment managers at insurance companies making? Well, we know the insurance culture isn’t fond of extreme sports, and as it turns out their not very enterprising when it comes to their investments either – let’s just say their passive, they like fixed income, you know, a few muni’s, maybe some treasuries, but above all, they like commercial bonds for their fixed income (and perceived safety), especially those which are derived from Residential Mortgage Backed Securities, or RMBS’s. The feeders of these funds – the mortgage origination and securitization industry, is none other than their very own customers – think of it as one big happy love triangle, or if you happen to live in Utah and prefer their par lance “plural marriage”. The title insurance companies, the mortgage origination and securitization industry and policy purchasers are like sister wives. Of course the husbands in these relationships of Asymmetrical Power, are the alchemists of the modern era, they are the engineers of derivatives, and they hide behind curtains in tall shiny buildings in an emerald city called wall street, turning their Copper into Gold.  For more on this activity, it might be worth reading the article “Three Card Monte and other efficient ways of parting with your money

Historically, title insurance companies almost never pay out. When was the last time you heard of a title insurance policy actually being used? Over the decades, it was nothing more than a simple entry on the closing HUD statement when real estate was bought or sold. Homeowners didn’t’ “shop” the policy, and they had no idea that when it showed up on their closing statement, that their lawyer was also a broker for the title insurance company, collecting some 70% of the premium – if they knew that, than they would know that their attorney might also have a conflict of interest when he oversaw / received the title exam, and the selection of the policy. Finding a defect or cloud on title in this circumstance meant no policy and therefore no commission – so the closing attorney’s themselves were incentivized not to scrutinize too much – and why was this agency relationship never revealed? Isn’t that in direct opposition to consumer protection laws?

So why were those underwriters so quick to get off the phone, as soon as we “dug a little deeper” into their criteria? Well, it’s because their options don’t look too good – in fact there are only two:

a) Acknowledge that the titles to 60 mln. plus homes are badly clouded and not insurable. In which case the entire operation of writing policies, taking in premiums, investing the float in MBS’s, so that mutual funds can take in funds from various and sundry retirement accounts of home owners and buy your stock suddenly stops.

b) Pretend like your not aware of the problem and deny or use the more complex version “deny, deny, deny”.  In this operation, business can continue, at least for a while – although when the final reckoning comes, the problems will be many orders of magnitude larger.

We believe plan “B” has been the modus operandi of the industry for sometime now. However, like all parties, and indeed everything which has a beginning, this too must come to an end.

Title insurance underwriters and drug addicts; just likes peas in a pod

enabler2Why is the role of insurance companies in all of this not more closely examined? If it was an addiction we were speaking of (and maybe it is), we could think of the insurers as the “enablers”, and as any good interventionist, support group, or sponsor will tell you, the enabler is as much of an addict as the addict themselves.

But what is the addiction? In a way it’s money, but in another way it’s something more than that. It’s really power. Money of course, is power, because at the end of the day, its really a redemption slip on society, and when you possess many of these tiny slips of paper, you effectively have much you can ask of the society around you – and that is power. The Alchemist-Engineers know this, so the jig in title insurance is really no different than the funny business that took place during the “Golden Age” of loan origination – they both follow what we might call the “the Mozilo principle”.

How could we look at the addicts without looking at the enablers? Where are the insurance regulators? We marveled at the discovery that there may well exist an entire insurance industry that is predicated upon the complete lack of any sort of actuary role in it’s calculation of risk, or oversight in it’s conduct of business, an entire sub-species of the insurance animal where policy payouts are unheard of. In such an industry it’s easy to imagine that there would be total lethargy, apathy, and greed and accordingly there is.

Further to this point, it’s important to note that Bevilacqua did not just turn up yesterday, he turned up five years ago – his case was never really a true legal question, it was always a business question.  It seems more business is conducted inside a court room than in marketplaces nowadays – we wonder what the chinese must be thinking of the efficiency of this model.

It could all come tumbling down suddenly

The banks settlement negotiations with the 50 states AG has focused on refinancing as a solution; why? Because refinancing ratifies, and puts good paper over bad fraudulent paper. As pointed out in “On the ethics of mortgage loan default” – that’s a bad deal for homeowners. Taking an asset with bad pricing, and which had a commensurate and corrupt security interest, and improving and perfecting the security through “refinancing”, but leaving the bad pricing in place (which is a direct derivative of fraud) is not a good deal for the homeowner. For a modest decrease in the monthly mortgage payment, the homeowner pays the price of somebody else’s fraud (although he may not know it).

Further it may be a mistake to speak of buyers of these foreclosure properties as “innocent third parties” as the banks suddenly (at least since Bevilacqua emerged) are fond of doing. Is this characterization really accurate? We know that about two-thirds of real estate transactions over the years have been foreclosure properties; we also know that a good deal of those transactions were cash deals. Does that sound like “the Joneses“?

The buyer of a foreclosure is somewhat more enterprising than his average home buying family man cousin who buys a home because he happens to like it. The buyer of a foreclosure is by definition more of an investor than someone merely looking for shelter. This is especially true in the case at hand – Bevilacqua – who was a developer, and who turned the subject property into four separate units with four separate buyers – probably at a profit to himself, but at great harm to the buyers. In this way, the banks fraud is magnified, through the buyers of foreclosures who are more often than not, enterprising, investment minded persons, with the ability to move at greater speed than the average homesteader.

Of course nearly all home buyers are functioning in some way as investors, in so far as the overwhelming majority are purchasing the largest investment of their life. So the buyer must do proper due diligence, regardless of their place on the investor spectrum. Where there is a failure to do even basic due diligence, there is at least some accountability. However, it is not as great as the accountability of the title insurers, or the bank-sellers, who maintain superior knowledge about the “back-room dealings” of these transactions.

We only point this out so that prospective buyers of foreclosures (and also all homeowners) will pause for a moment and consider the possibilities that Bevilacqua gives rise to. The buyers of foreclosures at least are not entirely innocent as has been suggested by an industry which seeks to persuade a panel of judges and deflect away from itself the possibility of legal reprisals. Why else would the American Land title Association, and the Mortgage Bankers Associations along with their TBL’s (Tall Building Lawyers), spend the time, energy and resources to file lengthy Amici Curiae briefs in Bevilacqua? It was a like a free legal defense for a small-potatoes property developer that no one had ever heard of.

It’s worth contemplating before making out that next mortgage payment. Maybe “home ownership” in the very near future simply means staying right where your at – or in the spirit of the protesters which has gripped our world – “occupying” the house your already in.

Can a valid policy be written on securitized mortgage loans in light of Bevilacqua? Without the enablers, no transactions would or could ever get done. Without policies getting written, no real estate would be transacted, and yet another Pyramid would come tumbling down.

34 Responses

  1. Its really nice posting. I think it would be helpful for all. Thank you for sharing with us.
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  2. Crappy mortgage fraud settlement deal gets worse
    October 20th, 2011 · from — Matt Browner Hamlin Blog

    There have been new reports of an evolved deal between Iowa Attorney General Tom Miller, the Obama Department of Justice, and the nation’s five largest banks regarding the 50 44 state investigations into robosigning and other fraudulent behavior by the banks. New developments include expanding the release beyond robosigning to cover fraudulent mortgage orgination as well. Professor Adam Levitin has a pretty definitive takedown of the various components of the deal that have been leaked.

    One of the pieces of the deal, according to Shahien Nasiripour of the Financial Times, is to include about $2 billion for refinancing borrowers who are current but underwater.

    About 150,000 borrowers could benefit from the refinancings, as the vast majority of US home loans are owned by investors and government-controlled mortgage giants Fannie Mae and Freddie Mac. By comparison, nearly 11m US borrowers are underwater, according to CoreLogic, a data provider. The average underwater homeowner owes $258,000 on his mortgage.

    So the plan here is to help around 1% of homeowners who are underwater. That’s before we give any consideration to the administration’s horrible track record when it comes to actually implementing programs aimed at helping homeowners to their full capacity. Levitin thinks it will, at best, help around 60,000 homeowners.

    And again, what are the states and the federal government giving up in exchange for a couple billion that will barely help any homeowners? Levitin:

    now we learn that this settlement is going to include a release of origination fraud claims against the banks in exchange for an additional $2B-$4B. It’s Keystone Cops worse than Keystone Cops. For a while the AGs just looked incompetent in the settlement negotiations. But now it’s gone from incompetence to outright malfeasance. To contemplate a release of origination claims that have never been investigated for an additional $4B is so shocking that I have trouble finding genteel words to say about it. To paraphrase Rep. Elijah Cummings, “Is Tom Miller a chump?” Why on earth does he feel compelled to even discuss such a patently bad deal?] [Emphasis original]

    It’s truly hard to capture how bad a deal this is on many levels. It’s a bad deal for homeowners, who aren’t going to get the help they need to keep their homes. It’s a bad deal for the rule of law, where yet again massive corporate criminality is swept under the rug (remember FISA in 2007-2008?). It’s a bad deal for investors, who will likely lose out by not having the knowledge that would come from attorneys general bringing civil suits in every state. It’s just a bad deal.

    I’m not convinced that this will actually happen. We’ve heard about imminent deals coming out of the Miller talks for almost as long as they’ve been going on. Thanks to the leadership of AGs who care about their job responsibilities – people like Eric Schneiderman, Beau Biden, Catherine Cortez Masto, Lori Swanson and others – the odds of their being a deal is greatly reduced. But the fact that Miller and the Obama administration keep trying to give away more to get any deal for the banks is sickening. This won’t help anyone, that is, unless you think providing protections to keep bank executives rich and out of jail an important service of government.

  3. But…we bought a foreclosure (for far more than it was worth) and spent seven years repairing and remodeling it over the course of time. It was a single investment to eventually sell for a better one.

    We are not investors. We made a downpayment, and got a “loan” on which we made payments, just like everyone else. The money we put into it came from wages. It took all those years of working on it every weekend to get it “livable” because it was in terrible disrepair. (Termite damage, water damage, leaky roof, crumbling foundation, rotted windowframes, wiring issues, no insulation)

    To suggest that we should have no recourse simply because we got stung in the securitization game is outrageous. The Title company admitted we may have a valid claim if the previous homeowner comes forward, but their liability is limited to twenty five thousand dollars; We put more than that into it in ONE YEAR. They will only pay if the former homeowners challenge our Title, they say.

    We did not pay ourselves any labor. If you compensated us for the thousands of man-hours plus the materials, we invested probably $400,000 in a home that was worth maybe $40,000 towards the end of the project. This conflicts with the op ed in this article putting all investors who buy foreclosures are on a par with the banks. We’re no radical exception, either. There are plenty of people who bought foreclosures to live in with no bankroll, and built “sweat” equity. What happens to us?

    This is just one more case in which anyone who bought anything from the late 1980’s forward got screwed. It’s sickening how badly viral corporate greed frayed the fabric of society, and the love of money has eradicated morality, accountability and justice.

  4. @E.Toile,

    Finally someone who speaks my language!
    Now I get it!

  5. Ha ha—just like in Vegas, eh? The house always wins…

  6. @ enraged, don’t make it harder than it is. It’s really elementary. A simple formula will suffice, where h = homeowner. Hope this helps.

    h^(-t²)mers = x – x^3 / 3 + x^5 / 10 – x^7 / 42 + x^9 / 216=bank win

  7. @Angry

    Thank you for your clarification. One of my biggest pet peeves is that this blog is supposed to be for the average American who can think for himself but never studied economics, mortgages and isn’t a real estate agent. Knowing that, some people feel the need to throw at them information without making sure that it is clear enough for EVERYONE. What is the point? Fulfil some hidden inferiority complex? The need to come across as an erudite? What strange insecurity is fed by acting that way (especially under an anonymous name…)

    As someone said once, the one who speaks has the responsibility to make himself understood. Requiring from us that we graduate to someone else’s level of economic understanding overnight is preposterous and unfair.

    How would people like it if, overnight, I asked them to become fluent in Spanish and to translate an economic article? We all have different talents and skills. Please, appreciate that fact and make sure you do not ask us to pick yours up overnight. So, be fair to everyone and make yourself understandable to everyone. That’s what communication is all about.

    Thanks you.

    That being said, MA is taking some strong positions. I may win my bet…

  8. enraged..
    terms such ads “establish ‘good title’ commitment ” and
    “POA of Premier Asset Services REO Brokers ‘Assignment’ short sale in which property good title commitment” are for the most part “players” previously not exposed to the public scrutiny ; to determine “theses players” roles in the demise of our homeownership, these are the $ laundering syndicate at the end of the foreclosure cycle that i’m sure you will find on closer examination a insestual or even the tbtf name[s] come screaming back to center stage. tha da!!! look who is really stealing your property [ the same scumbags using different names ] all roads lead to Rome as the saying goes!!!

  9. @Nancy Drewe

    Who are you writing for? Yourself or the rest of us, poor peons not privvy to that insufferable and pretentious jargon? Make it simple and understandable, shall you? Thank you in advance.

  10. Article incorrect ‘Servicer’ nor bank does foreclosure. Party in court legal counsel represents Escrow Company interests. They have to payout on claim covering costs to establish ‘good title’ commitment letter during substitute trustee ‘repurchase’ of loan (converting options back into ‘loan?’) exatly when does that happen? Know how they get good title? MERS MEMBERS contractural agreement with SHAREHOLDERS affix MERS tm as GUARANTEE to every loan for life of loan (10 Digit alone) or with MERS SERVICER ID. MERS is a title registry record of private ETF exchange.

    Servicer not in court.

    Counsel represent ‘Escrow Company’ dba Premier Asset Services and/or RELS …

    Example: Wells Fargo Bank NA dba RELS TITLE assigns substitute trustee c/o ‘xxx’ symbol – who will create under POA of Premier Asset Services REO Brokers ‘Assignment’ short sale in which property good title commitment again issued merely based on MERS tm title exchange registry formerly MORSERV Inc owned by Chase.

    OREXCO and FAFXCO 1031 exchanges ….

  11. Our government is bought. That is why there is NO RELIEF for the homeowners.
    We HAVE to get money OUT of politics.

    Please help with your signature if you haven’t already—thank you.

  12. Our government has become a giant DEBT COLLECTOR of UNSECURED DEBT (using whatever unscrupulous tactics they can think of—just like any old debt collector), due to Wall Street getting millions and millions of signatures from borrowers who THOUGHT they were getting an actual “mortgage”—when instead they signed on to a giant PONZI SCHEME without knowing it.
    The ponzi didn’t work out so well—and the banksters KNEW it wouldn’t—they even BET that the scheme would fail—and now they are taking the houses without revealing the TRUE accounting of what really happened.


  13. If these insurance companies aren’t protecting our interest and our homes from anyone messing with and defecting titles to our properties all around the country can they be held liable. Shouldn’t we start suing these companies for aiding and abiding in the fraudulent scheme? We should hold them responsible because it’s obvious they know they did something wrong, if they don’t even want to talk with people.

    And how is it that the county recorder’s officers never check on paperwork for assignments and notary documents. They never check signature coming from an insurance co. or from a bank always believing that they are legit. while if we were to register something, anything, we are questioned right and left.

    Now that everyone knows the banks are run like a mafia, I would think that their actions would be questioned. Recently I went to the county recorder’s office looking for Notary Book that was supposed to be saved there, they could not find most of them. Those books are either kept by the banks or the employees of the banks who were sworn in, years after their license were expired.

    I would think that the county would go after them and find them and demand those books that should be brought back and preserved. That really made me mad, on top of that they never look at signatures on any documents, they just file them. those assignments and NOD filings come in in bunches, all the country register does is stamp them and send them out! What a system, no wonder fraud is so rampant, and everything is up for grabs.

  14. I had to laugh when I read this article because it so mirrored the EXACT treatment I got from multiple title companies when I tried to research my clients loans (previous mortgage broker in another life) for a break in the chain of title as well as any robo signed doc’s. And even when I called their attention to fraudulent assignments, they acted completely ignorant, but could not get off the phone fast enough from speaking to me, and refused to take my calls afterwards. Now mind you, these are title companies that I had previously done business with for almost two decades. All those years of bringing them clients and all of a sudden, they got nothing to say to me. I would have laughed if it was not so maddening. The relationship between title companies and pretender lenders is highly incestuous, and all those title policies they are writing now contain exception language that lets them off the hook in the event the previous mortgage was a securitized loan or if there were any assignments….which pretty much covers every single home. This is a USELESS product that people literally pay thousands and thousands of dollars for that gives them absolutely NOTHING.

  15. Great article, and I do hope that the Bevilacqua’s case cause similar issue to rise up all around the country, perhaps that we can use this as an example in our court cases. It takes one good case, that can make a difference, they knew it, that’s why they fought it so hard, but they lost. The truth has a way of coming out sooner or later.

    The banks made so much money already, they need to let go of some of it and give us our share. It’s not called forgiveness, it’s not a hand out, it’s our money back. they gambled, they screwed up their own game, they need to admit it and move on. The longer they fight the worse things get for them, this is a mess that cannot just be cleaned up.

    We already lost faith in them, and in our government, and in our judges, and in our consumer protectors, and in our insurance co.’s and in the system as a whole. They cannot win us over unless they play fair. They are trying to sell us new products and stop us from removing our money from bank’s branches, good luck!

    Anyone read the Mandelman Matters blog last night, it’s about how the Republican front runner views the housing crisis. Romney thinks that the foreclosures process should just be done with quickly so that some other well fitted investor can come in and refurbish the property and turn it around so the economy can improve and things can just get back to normal.

    These were not his exact words, but very much what he meant. So yes some politicians are trying to do something about this mess. In their sense of business ideas, and in their capitalistic way of dealing with issues that seriously affecting Millions of americans, their solution is move on and let business take its course.

    I truly think that sometimes when a politician is being interviewed, he/she are not speaking to the people on the issues, I thing their answers are directed to those who are paying for them to run. They don’t have the guts to speak the truth, they are in there for the position and the back-handed money they get. they are all crooks and no one should believe anything they say.

    The politicians and the financial institutions as well as the judicial system are so far removed from the people of this country. No one is really looking out for what they call the “consumers”, that’s what we all are to them. We are just consumers, we have no right to speak up or fight for, or voice our opinions, etc. God forbid, we go into the streets and demand to right the wrong, then we are a bunch of idiots! there’s no doubt about it we have gotten their attention now.

    Only when we get together as a whole, we we run in groups, and when we show solidarity, then they pay more attention. The idea that homeowners should stop making payments is a good one, but only if a whole slue of them do it together. And the idea of making a difference in any way or an impact on any certain organization is to stop supporting them, whether they”d be feeding us corn or selling us insurance or entertaining us; all the same.

    We have the power to make a difference if we keep saying NO! I’m not banking with you, I am not eating your garbage, I am not supporting your bad habits, etc. Just in the last 2-3 weeks I have gotten calls from banks I closed accounts with, asking me why. That’s all I wanted to hear!

  16. Try here. Otherwise, key in “William Black BofA bang whimper” and it’s all over the internet…

    Censorship or mishandling on my part…? The plot thickens.

  17. enraged, no, I mean….the link didn’t open. Is it me?

  18. Yeah E.Toile. And you do understand (in case Neil posts it…) that it is written by William Black, right? I have NOTHING to do with it except to share it with you guys and give you (some) hope that someone really understands what the issues are. Right?

  19. I stand corrected: Obama still doen’t get it. He’s just paving our way to hell, one inch at a time…

  20. I rest my case. And the guy was the governor of the state in which the Bevilacqua case was just decided…

  21. @ enraged, I was outraged to find that your link didn’t work 🙂

    Bill Black for prez

  22. I posted yesterday a great link to William’s Black take on B of A. If you haven’t read it, here it is again.

    “Off topic but a great read to get a clearer idea of what was taking place while we were sleeping and why big banks have to fail. It really isn’t a question of if but rather of when. This focuses on B of A but I expect it to reflect the motivations behind the purchase of Wamu by Chase as well.

  23. A Man, you’re barking at the wrong tree. Judges are not the problem anymore than homeowners. Judges are as ignorant as everyone else of what has been happening and they are doing exactly what this entire country keeps doing every step of the way: cover their asses. They will decide what the majority of them decides until it becomes uncomfortable and risky. Then, they will change their course. Remove the judges from our system and you have absolutely no chances of ever getting any justice whatsoever.

    This is the American way. The great “cover-your-ass-and-throw-smoke-screens-every-chance-you-get-at-every-important-issue”.

  24. @ Robert J Koenig, right you are my friend. But it goes even deeper than that. There’s a white paper out, written by a large national surveyor group, that speaks to the fact that when one property is screwed by MERS, then ALL OF THE OTHER SURROUNDING PROPERTIES ARE AS WELL!

    This is not a mere technicality! For how can one argue a property dispute under these circumstances? Who argues? Do they have the right to argue? Who says? Standing?

    And given that there are double digit millions of properties that have been locked and loaded by all that is MERS, everyone else’s properties, even those who HAVE NEVER BEEN SECURITIZED are in the cross hairs.

    Welcome one and all to a national crisis.

  25. E.Toile,

    I agree with your pissed-off post: it’s been irking me to no end not to be able to find who the author of anything posted by Neil really is. Why is it so f’ing difficult for people to give credit where it is due? What do they fear is being taken away from them when they credit the right people? Is this again one of those unlimited American insecurities that brought us the collapse?

    The “standard” of the world can’t even abide by the most elementary decency?

  26. @ enraged, please rest assured that the dozing that banks are considering, and the reach out to foreign monies, and the donation of housing that banks occasionally do ….none of this has anything whatsoever to do with “real” inventory as you and I would label it, or the interest of doing the right thing. Especially when it involves charity or bull dozing, this is simply low end housing that the banks don’t want to carry liability on. B of A is now the biggest REO ever, and they aren’t in the business of property management, nor do they want to be.

    The day these financial institutions “care” about returning homes to rightful owners, or talk openly about doing the right thing will be the day that they’ve found a way to profit in some new paradigm that we simply haven’t figured out the angle on yet.

    They are low life scum sucking assholes who don’t deserve to breathe the same air as the rest of life on this planet. They’ve sold the entire globe’s wealth and its future so far down the road that our children’s children will be accustomed to serfdom with no hope of breaking free, UNLESS WE SIMPLY DELETE THE DEBT.


    Of course the governments, being bought and paid for, continue to spout the meme that debt obligations absolutely must be kept and met, even when those same governments and institutions gamed the entire arena upon their initial execution. The only way we can co-exist, people and these TBTFs, as well as a captured government, is for the people to spend their days working for the annihilation of the TBTF. Only then can the flowers bloom for future generations. NO PEACE!

  27. A new owner can not even “try title” . . .

    If the title is tainted by just even an improper foreclosure – then we have a national crisis on our hands.

    It seems that both the press and the judicial establishment are covering up this looming crisis.





    I now return to normal font. Sorry.

  29. Re-reading this article makes me think of something: banks have un unsellable inventory of houses they are now considering bulldozing and/or selling to foreigners willing to invest $500,000, in exchange for an American citizenship (don’t think for one minute that the two clowns who came up with that ludicrous idea did it on their own. That’s what lobbyists are for: think for our brainless and IQ-lacking representatives).

    Makes absolutely NO difference who lives in/occupy those houses: it’s not the house, it’s the land it stands on. Bulldoze away. And then what? You’re gona try to sell those pieces of land to investors so that they can build new houses and condos where old ones were taken away and razed? On a land they cannot call theirs?

    It is high time all those house that can be tracked down and still stand be returned to their rightful owners and that banks/lenders/title insurers and everyone else having profited from this horrible scam and scheme pay to reverse thie situation they created, by dismantling their corporations and going after their personnal assets. As it stands, the choice is very limited: we do nothing and the world collapses. Everyone loses it all and many even lose their life. OR we work at correcting this situation at best we can and we try to indemnify/compensate the true losers with what we can, even it is is only $.10 to the dollar: regardless of who does what to fix our huge artificially-created problem, there will be true losers. That’s the price to pay for being apathetic, ignorant, gullible, self-serving and self-absorbed for those many years. Let that be a lesson for everyone.


    Can this case be used in California (give the Bankruptcy Court in response to a relief from stay Judicial Notice re this case when the Pretender is relying on an assignment from MERS for standing)

  31. Awesome article…

  32. It is amazing that I just recently started questioning how my lender was also my title insurer and what the real interest was to own both companies. Both outfits were founded by the same individual and both outfits always appear together on the paperwork of any financing/refinancing I was able to track down, involving either one of the two. Simply by researching both companies on internet, i was able to find the clear confirmation that officers of one are also the officers of the other and the founder of both is clearly the same guy! (He does boast about it too…)

    Obama just nominated Hoenig, an outspoken detractor of the TBTF and a proponent of their dismantlement, to the position of chairman of FDIC.

    Is he finally getting it? He is finally realizing that creating jobs without tackling first the foreclosure crisis is not only a complete exercise in total futility but, more importantly, it serves only to compound the economic problems of this country without any permanent solution whatsoever?

    No problem reaches the magnitude of our crisis without it being a long-term, concerted effort to defraud and cover up and without having the blessings of ignorant, apathetic, self-absorbed and self-serving people and their representatives. While the “righteous” christian wing of this country spends its life looking into our underpants and our beds and deciding what we may or may not do in them, the real fraud is allowed to go on. Talk about sex and everyone is up in arms. Talk about mortgage fraud and they ALL run for cover. Still today, not ONE candidate will talk about foreclosure and the destruction of our economic system. Nope! Way too busy deciding when “conception begins” and trying to dictate on issues absolutely irrelevant to the world at large and today’s situation!!!!!

    If this country self-destructs, it will be its own doing and its own fault. At this point, I don’t care: I have 2 valid passports!! What I will not forgive it for is that it took down, along with it, the rest of the world while moralizing everyone and everything and posing as the standard by which everything else must be allowed to exist and function. What a bunch of hypocrites. What a terrible spin they have put on christianity. No wonder we are all hated so much!

  33. Banksters, Politicians and especially Judges, You still have time to repent. Dont go down like Gaddafi Sadam Hussein, Pharoah, Hitler. History is not on your side.


  34. LivingLies is a great resource for homeowners!

    Thank you for posting the Bevilacqua article – and for the comments…

    The original article can be found here with a few updates:

    …Tyler Durden is not actually the author… ;o)

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