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EDITOR’S NOTE: The one thing that the media hasn’t quite grasped is that the issue is not nearly so much as that people can’t pay their monthly mortgage payments but rather that the monthly payment may not be due. In fact, nothing might be due. $16 trillion in insurance, bailouts, proceeds from credit default swaps and other “credit enhancements” have reduced the amount due to the creditor for reasons wholly apart from the original deal relating to the loan. $13 trillion in mortgages were funded in the mortgage mess. $125 Trillion in credit derivatives and hedge products were issued.

So the amount received by the world of finance exceeds the total amount loaned, let alone the “defaults” on only $2.6 trillion of those mortgages. Where did the rest of the money go and why? Taxpayers and Borrowers have a right to know the true and complete accounting for all money received or disbursed in connection with their loan. Investors have that right too. Those are the only two real parties in interest to the original transaction — investors who loaned the money and borrowers who used it. Everyone else was an intermediary. To allow the Banks to treat the excess as trading profits instead of crediting the investors and borrowers is absurd. And to further allow them to take homes they have no loss on is a tragedy.

If the creditor(s) or its agents have received payment and they don’t owe the money back, then that creditor is not owed the money. The servicers are required under the provisions of most pooling and servicing agreements to keep making the payments. If they are doing that, there is no default. There might be an obligation due to the servicer, but it isn’t secured by the mortgage because it is a different debt — not covered by the mortgage. It’s unsecured which means there can’t be a foreclosure.

Sorry Banks, I didn’t make this stuff up, you did. To ask the people to pay even more money from the bottom of the ladder you used to make multiple sales of the same loan is neither fair nor, as it turns out, legal. In order to foreclose you need the right creditor with the right mortgage suing to collect on a debt that is due — not one that was merely created. If you have no loss, you have no right to be collecting on the debt.

If the debt is not due or has moved to another party then you don’t have a valid foreclosure action and you never will. If the debt has been paid and the original borrower gets the collateral benefit of a reduction in the principal amount due under the note, it is only because the banks set it up that way but are now trying to avoid that result by getting even more money out of the borrowers.

The bottom line is that whether you are paying or not paying, you don’t know the true balance due to any creditor and you don’t know who the creditor is — and quite probably neither do the Banks. There has been a lot of talk about personal responsibility to pay a debt which is being used to divert attention from the fact that the debt has already paid down or paid off. What about the moral responsibility to tell the borrower what money you received that reduced the damages or money due?

Written by
Patrick Peterson | FLORIDA TODAY

The homes haunt neighborhoods with their dark windows, overgrown lawns and science-experiment swimming pools.

Sometimes a family remains inside, waiting for the phone call or knock on the door that signals their eviction.

That could’ve been the case with Mike and Janet Doty. The Port St. John couple avoided foreclosure by having their mortgage modified in bankruptcy, which became necessary after Mike Doty, 58, became ill with diabetes. In the legal action, their house note was reduced by nearly a fourth and they got a better interest rate on the balance of about $100,000 they still owe.

“I’m not one of those horror stories,” Mike Doty said.

But there are plenty out there.

Several years into a nationwide foreclosure crisis, about a fourth of all mortgages in Florida, and about 18 percent in Brevard County, are either delinquent or in foreclosure, according to the Federal Reserve Bank in Atlanta.

Though foreclosures and related filings have slowed since the avalanche of 2009, statistics show that they still loom for many Brevard homeowners who are missing mortgage payments for reasons of illness, unemployment or, with greater frequency, an unwillingness to pay for a home that has lost its value.

Doty assumed his sister’s home loan in 2007, after she died. He paid off her debts, which contributed to his financial trouble. Though he’d developed diabetes, he worked in the service department of a car dealership and in a call center until 2009. Eventually he was unable to work and couldn’t pay his health insurance premiums or his house note, though he made partial mortgage payments to the bank. His wife worked and he received disability payments, but the couple fell further behind.

Doty felt desperate and trapped by creditors. He mostly feared he would break a promise to his late sister, who asked him to take care of her home.

“I swore to her I wouldn’t do anything to lose this house,” he said.

But foreclosure seemed likely, as doctors, the mortgage company and even the IRS wanted money he didn’t have.

13 Responses

  1. Interesting article. How does one prove the debt was paid off? Case law? Settlements? Give us something we can use in CA.

  2. So, kill MERS. Isn’t that what Biden is trying to accomplish? And the guy in Ohio going after all the unpaid recoding fees on behalf of all the counties? And Schneiderman? We’ll get there…


    MERS is a title exchange

    MERS is a contractural arrangement
    Qualified Intermediary (Title Company) (1031 Exchange)
    Require all transactions for life of loan to record MERS as GRANTEE – Beneficiary – Trustee any of the ‘ee’s

    MERS Title Exchange records Exchanges’
    between Shelf Companies and Investors


  4. “Once again,Neil- under the UCC- ” any payment made on an obligation reduces the obligation by the amount of the payment, even if made by a stranger to the transaction”. How come this isn’t getting any “traction” as you would say?”

    I’ve yet to see a Court accept this argument, any case law on this?

  5. Enraged

    Can repeat over and over — until people get it — subprime mortgages — were already in default — whether borrower knew it or not. That is what subprime was —- collection rights to default debt. And, you though you were getting a mortgage???? Not if it was subprime.

  6. @Carie

    I could swear I’ve already read that post from you… a few times. Like, maybe, six times a day or so? How does that work? Do you have it on speed-post or some system that allows you to bang it automatically with your eyes closed?

    How did it go with your attorney? Did you hear what you wanted? I can tell you that it took me a long time and a lot of money to finally find someone who “got” it and was willing to risk his reputation on a not-so popular move at the time. But it’s taking sooooooo long, I really don’t enjoy the damn house anymore. A terrible weight around my ankle. That, i can’t forgive the bankers for: they literally stole my years! I almost look forward to some serious violence. And yet, I know it isn’t the answer either.

  7. Interesting…except “investors” did NOT “loan” any “funds” to any “borrowers”.

    “…As to subprime (refinance AND purchase), — nothing more than collection rights were securitize­d. Remember, securitiza­tion is simply a method of pass-throu­gh of CURRENT cash flows. Anything with a cash flow can be securitize­d. The problem is — that securitiza­tion is meaningles­s as to the creditor. Security investors — and trustees — in any capacity — are NEVER the lender/cre­ditor.
    The fraud lies in the securitiza­tion fraud “process” — and the means by which the “loan” was procured. The “loan” — in subprime — was never a “loan” at all — at least NOT a secured loan — by mortgage or DOT. .NEVER went “into” any TRUSTS…T­hus, unsecured and dischargea­ble by BK.
    That is the issue…”

  8. This is all a scam, and we must fight on! No matter what it takes! Bring the banks to their knees!

  9. Once again,Neil- under the UCC- ” any payment made on an obligation reduces the obligation by the amount of the payment, even if made by a stranger to the transaction”. How come this isn’t getting any “traction” as you would say?

  10. Without the so called Borrower. Neil you should probably call the “borrower” “Pretender Borrower” signature. The Banksters could not perpetrate the big Ponzi Scheme.


    “Loan to own” “Predatory Lending” is a crime against humanity

  11. The only way out of this mess. Is to declare the MERS LOANS what they are.

    “Unenforceable Loans”

    The banksters with the help of alot of Attorney Generals are using the divide and conquer tactic. Pitting homeowners who pay against homeowners who dont pay.

    All loans student credit card automobile commercial real estate Owner Occupied Real Estate etc….

    Why should the Banksters get away with Breaking the law?
    Why should the investors (sophisticated) get away with breaking the law?

    Put the Banksters, Politicians and Homeowners if applicable in Jail.

    Without the so called Borrower. Neil you should probably call the “borrower” “Pretender Borrower”.


    “Loan to own” “Predatory Lending” is a crime against humanity

  12. Where is the rest of this article?

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