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M&I Marshall v Mueller Anti-Deficiency Statute upheld CV100804

One of the scare tactics that the Banks are using to confuse homeowners is that they will come after the homeowner after foreclosure claiming that they are entitled to a Judgment for the deficiency — the difference between the amount recovered from the foreclosed property and the amount they alleged was due. This case from Arizona squarely comes up in favor of the borrower. The mere intention to use the property as their principal dwelling is sufficient to invoke the statutory protection. Check the statutes of your state and consult an attorney before you assume you are protected.

But the protection is broader than that as a practical matter. The last thing the usual pretender lender wants to do is start a lawsuit where they are subject to the requirements of pleading a cause of action upon which relief could be granted. That is because they need to prove each and every allegation. And it is because they would be subject to discovery requests tracing the money on ALL transactions, direct or indirect affecting the balance due from the borrower. In virtually all cases it would be found that the amount claimed by the forecloser is different than what they reported to investors. THAT means the entire foreclosure is wrongful.

In addition, the great likelihood is that the money trail will lead to an inescapable conclusion — the documents in the securitization chain refer to transactions that never occurred. Each “endorsement” or transfer or sale is a document that refers to a transaction.  The transaction is the sale of the note and mortgage. The transaction did not occur if nobody actually paid for it. And they didn’t pay for it because the consideration was supplied long ago by the investors whose money was used to fund the mortgage. Thus each document in the claimed securitization chain refers to a transaction that did not ever happen and can’t happen.

(And the reason they didn’t do it right is because they needed to have some colorable right to claim rights to the loan even though they were only intermediaries. Their purpose was selling the loan multiple times, a process that would have been impossible if the investors were given the documents called for by the PSA. They needed a gap in time between the time of the closing with the borrower and the time that the actual transfer documents were created in favor of the investors or the investor pool).

And THAT in turn means that the substitution of trustee in non-judicial states is bogus. If the transaction transferring the loan never occurred then the documents of transfer are worth less than the paper they are written on, and the forgery, robo-signing and fabrication of documents is almost besides the point. If the substitution of trustee is bogus then all actions conducted by that “trustee” are equally bogus. That includes foreclosure, eviction etc.

NOTE: The same logic applies to the origination of the loan. In most cases the documents refer to a transaction that never occurred —- the loan of money to the borrower BY THE PARTY NAMED ON THE NOTE. At the very least, this fact alone should be sufficient to remove the foreclosure from non-judicial procedure and require the “creditor” to foreclose judicially. In court, parole evidence would allow the borrower to show that the “creditor” is relying upon a faulty transaction. At most, this fact might be sufficient to invalidate the mortgage lien and perhaps the note itself, leaving a naked obligation for which there is no documentation and for which there is obviously no collateral.

18 Responses

  1. @dee,
    No, I didn’t. It was my first home and it was built. Any title issues on the land would have been verified by the builder before .

    I was the only owner; there was no assignment, the notice of sale was posted before the substitute trustee was assigned, so minus the defects in the process, the thief didn’t have standing to do what they did.

    I spoke to someone who ‘I think’ told me that when we purchase our home they did a title search and we paid for it. We can request a copy of the report they performed since we paid for it.

    I never did it, but I have been told there is ‘something’ you can get from them because it was paid for.

    Opinion –
    I thought I’d seen every layer of the process, including the judge and the real estate agent declaring the home vacant. It was a year later that I saw the same title company I used for my home, cleared the title for someone else to qualify for a loan to move into my home.

    No lender should qualify/would a home for sale if the title is not insured by the title company. The lender wants to be covered for losses in title defects. It would be nice if we could trip all of those defects and force the title companies out of business. That would force lenders to stop taking homes because they can’t sell them to anyone else.

    Someone I know purchased a foreclosed home before they realized this mess. I think they couldn’t purchase homeowner’s insurance.
    They had lost their home in a hurricane and it took them like 8 months to find a home they could afford and it was a foreclosure. The home had been stripped of all wiring and copper pipes.

    That’s when I learned they didn’t have homeowners insurance.

    I thought it’s ironic, no insurance company will let them insure ‘what they thought was their home’ from any loss so they can get a replacement built.

    Now this someone is not rich enough to move once they realize the home is not theirs. They are pretty much in the same boat as someone who’s trying not to be evicted by a bank or servicer that shouldn’t have the home.

    They are paying and sitting there hoping no one knocks on the door and reclaims the home, but they know they would not want the shoe on the other foot where instead of losing their home in a hurricane, someone who had no right to it took it from them…an act of God they can deal with, a theft with no restitution is harder to live with.

    You’d think we could capitalize on that information somehow.

    That new bill for US Citizens who are terrorists, does it recognize financial terrorists for who they are and will it do an indefinite detention of those ‘US Citizens’ who are financial terrorists and have initiated a financial war against the inhabitants of this country.

    Light and Love,
    Trespass Unwanted, corporeal, life, Free and Independent State

  2. all those rich people have inside knowledge while we just work to earn a living,,,,,,,,,,,,,

    no doubt about it………….even said gambling, trading is all gambling Karl Denninger…………..

    get out from those those debt instruments, IOU’s —-one way or the other,,,,,,,,,,and live life, and be happy………..and forget about it.

    no debt, and screw them all……….because they have not earned their way, but exploited your income……………

    see you later………..

  3. what say you soliman

  4. Time to go all cash, no credit, no debt, one way or the other,,,,,,,,,,,

    debt is the system,,,,,,,,,,,

    do not do it…………..

  5. This will make your blood boil————–341/

  6. from above———-

    colorable right——–

    what does it mean?

    “In U.S. law, the term color of denotes the “mere semblance of legal right”


    There you go———–it is whatever you can get away with—–the mere semblance of legal right……….whoa dude. What does that mean?

    It’s a joke………and I am still laughing my ass offfff,,,,,,,,unbelievable. Yes indeed. But, infortunately it is real in the dumb downed Judges who know nothing about wall st and their games—their view is simply this, No pay, no own no more, and you must pay some debt collector of which we do not know if they are entitled. Oh, how it has become hidden in the laws passed by the banks and central banks to COLOR it all. HAHAHAHAAH.

    “In addition, the great likelihood is that the money trail will lead to an inescapable conclusion — the documents in the securitization chain refer to transactions that never occurred.”

    from above.

    DOCUMENTS in the securitization chain?

    OK. It is just paper (documents, but they were lost) chasing IOU’s, and IOU’s chasing money or credits and debits on some accounting of it all…………but

    when has to ask the question, the question of where is the simple exchange of all this paper, and IOU’s, what does it have to do with the people working? The people who just work for a wage, no leverage, to make money? Why everything the people do to make money and pay their bills gets turned into paper, into IOU’s one way or the other,,,,,,,,,,,,,to be traded on Wall Street. Even your home gas bills are being turned into Wall St securization. Do a google search and see for yourself. It is called serfdom.

    but the bottom line is what does WALL ST do? What do they do that exchanges back with the people who work? Something is out of whack here, don’t you think?

    Yes, I am speaking in very simple terms, which the others do not want one to speak in such terms.

  7. @ Trespass Unwanted did you do your own title search?

  8. Laughing out Loud.

    No one wants the banks money any more, so they are dealing with a deck of cards they didn’t stack.

    I’m laughing. It’s so easy to do a title search to see all the past foreclosures are void, they can barely sell any home they’ve foreclosed on, and if they do they sold it to a new owner who knows he doesn’t own the home. New owner makes a few payments and stops paying and sits there for free. They got so little on the securitization of the resale of the home and it lacked all the insurance and protections it had prior to the fraud foreclosure that there isn’t a government plan in the world to work with the new purchaser and it’s too expensive to evict them.

    Laughing out loud at the mess they’ve made.

    Now the judges who protected their real estate portfolios by kicking living male and female who are endowed by their Creator with the right to that property have to live with choices they made. They had the Creator in their courtroom and ruled that he had no right to peacefully enjoy his own Creation.

    People have rejected their money supply. No countries will accept their credit (thin air money) for goods and services, and people who know there is two money supplies available one by the private bankers in the form of paper currency, and one belonging to the Nation, the land, the United States of America that had a Constitution and a Mint with currency in the form of coins, dollars, quarters, nickles, dimes, pennies.

    When someone is really serious about not helping the bankers, they start learning alternative ways to do business and live their life. The people in some areas realized that if they didn’t spend ‘real’ money, all the stores around them would start laying off workers and that would make less money to be spent around there and then the stores would start closing. It’s all connected.

    People know there ain’t nothing like a $20 bill in the wallet, but to spend it is to continue to provide energy to the machine that has caused you to lose your home and is affecting other people’s way of life and survival.

    They are taking a little suffering and opting to spend a $25 roll of dollar coins instead. Did you know cash is not taxed like paper currency. If you only spent money from the Mint, the IRS could not knock on your door and ask for anything? It’s not their money, it belongs to the United States of America Mint. At the end of the year if you made $50,000, you’d have the ability to spend it all and only pay taxes for the goods you purchased or the services received. They could not claim a dime of your income if you received it in currency from the Mint.

    That’s how you vote. You vote with your wallet, well in this case you vote without the convenience of a wallet. You alter what they consider masculine, a wallet in your back pocket so you can be trapped in their system of currency, you get yourself a pouch and put in the coins and keep more of your money to spend on you and yours.

    What you don’t remember from the past, when gold and silver was being spent our country was prosperous. When paper currency was introduced, it introduced a lot of hidden obligations you didn’t know anything about and for the convenience you were robbed, not just in taxes, but in reducing the amount the currency could buy and you worked the same number of hours to receive the same amount of paper currency and got less for it.

    That’s the system behind the veil. There are some that say it’s too inconvenient to ‘do the right thing’. It’s too much to spend coins. My pockets will bulge, it’s too heavy.

    Well those people need to stop pointing outside them selves at everyone else as the reason for any problem.

    When we see where we play a role and its all connected, then we can see where we can tilt the table, stack the deck a different way, remove the obstacle that is causing the problems.

    They say, you want their money because you haven’t said you don’t want it. The Mint will stamp out coins every year and only a collector will ask for it. The Federal Reserve is holding $1 billion dollars in coins in their vaults knowing that if their currency fails, and it will fail, that they’ll have $1 billion dollars in real money waiting to start over, and the only way they can pull that money out is if there is a demand out here to spend it over what they are currently holding.

    They’d have to send it to the banks, and the banks would have to release it to us to spend.

    It’s when we start looking that we start finding things we never knew existed.

    A republic is where everyone has a right to govern their self or be part of a government where someone governs you. A democracy is where majority rules. If a bunch of people like fried green tomatoes and you like ripe tomatoes then they can out vote you and you don’t get the ripe tomatoes because you don’t agree with the majority of them. (It works for everything…if you look at the world you’ve help create, you’ll see how your agreement with the masses has co-created the world we live in now with screeners digging on people at the airport because the masses say if they have nothing to hide then they should mind being dug on to prove it.

    Laughing at all all things created, the co-creators have no idea the role we play in everything that is going on around us.

    Laughing and happy…because we all have free will to do things ‘our way’.

    On a more serious note:

    That’s Perfect. Life is beautiful. If you were in your immortal spirit form now, could you enjoy the ‘smell of rain’, or the taste of a good meal or the laughter from a good joke that can only be heard if you have a body that can make sound with a voice to speak the words a certain way to make them appealing to your ears and then you laugh. If you were in you immortal spirit now, could you feel the joy of a laugh as your body moves and shakes and your mouth widens and the energy that flows from that physical and chemical action takes over and lifts you up and you have that shared experience with others who are in physical form just like you? Could you enjoy the beauty of a flower, that selected that location to bloom and let you see the beauty of it’s design and provide a fragrance, a meal for insects, transfers energy from the sun, manipulates the soil, provides color and brightness.

    If you were in you immortal spirit now, you could not see the physical world. You would be in a different realm a realm that’s maybe of light, air, ether, gas, but definitely not physical.

    We are loved because we get to experience the physical.

    These things going on are to distract you to keep you from enjoying what’s already here for you now. You spend so much time focusing on the negative, you miss all the life and energy going on around you that was Created for you to enjoy.

    Bit of history. The Declaration of Independence was written while there were still colonies, yet they declared themselves as Free and Independent States. Ever wonder why? I did some looking around.

    Legal definition of State (at least in Black’s Law 5th edition) is People.
    So unless they formed the states by land boundary, they had declared themselves, individually and collectively as free and independent people.

    It’s the existence of things we don’t desire, that helps us realize what we desire out of this life we are living. In that sense, the dark plays a role to help us see the light.

    There is an old quote – don’t know who said it.
    How can I know where I am going, if I haven’t been where I’ve been?

    I’ll add, it’s because I’ve been where I been that I know there are places i don’t want to go to again. That sure helps one on the journey of life.

    Spending coins has tilted the tables and that’s why there is not another QE. Each lawful money (dollar coin or dollar’s worth of coins) spent removes a fiat dollar from circulation. Removing one, removes the monetizing they do with the one, where they take a bill and monetize it ten times.

    Spending one dollar coin removes more than $1 dollar in Federal Reserve note, it removed the monetized amount too, reduces the federal debt, and removes the tax liability with the IRS that was tied to that dollar of fiat/paper currency.

    The remedy to this problem has always been there. There is a lot of Undue Influence and we get to decide how we will let it all go and get a nice ‘reboot’ and a nice do over, or maybe we try to do a clean shut down and come up on an earlier program that was not so destructive, or maybe we go along with their ‘war’ machine where there is a new enemy and a new threat and more lives are lost but more jobs are created because more money is printed to pay for us to fight our brothers and sisters over there, to pay for the weapons and gas and machines needed to kill our brothers and sisters and destroy their homes and infrastructure, and to give them money to fight us for fighting them, and to give them money to rebuild what we destroyed, which will employ them, those that are alive, and they’ll have money to bury their dead, and money to repave their streets, and to rebuild their buildings and their phone and electricity and water systems, and they’ll have money to import goods and we’ll export goods and take the money.

    We can always go the route they planned to jump start the economy again and have money flowing freely again.

    The world is working on the reboot. But not everyone is paying attention that we have a role in what we help create this time around.

    What you see in the public is not everything that other country leaders are doing to make sure this never happens again. They started by rejecting the credit and demanding real money. Only so many printed dollars in circulation is accepted, the rest is digits in a computer.

    A war will keep the status quo, it’ll cost some lives but what war doesn’t mean someone’s gonna die?

    A reboot will come at a cost, but we’ll finally get where if we want it. We are trying to get if we can shut down this program and start with the one we had before. This one has run so long it’s slowed down the progression of human awareness and distorted our connectedness to each other, and has us deciding who deserves to die or who deserves to be without a home or who deserves to have their rights violated.

    It a weird way, A reboot is like another ‘big bang’.

    In the beginning there was nothing, then EVERYTHING existed at the same time, with the potential for more to be created from what was already created.

    Is this the program we all want? It’s is the collective. You, me, everyone. Unless we agree on a new program, this one will continue. Because we are all equal, no one can over rule another on what they want. We all have to want something different to get something different. There is no fence sitting. To not decide is equivalent to them as a vote that they can do what they want which is another enemy, another war, and more deaths and destruction to generate more money in the renew/rebirth/regrowth.

    Light and Love,
    Trespass Unwanted, Corporeal,Life,Free and Independent State, jure divino, in jure proprio.

  9. I wish the local Occupyers would go after our state legislators such as Senator Harper who is trying to present a bill that would do away with the anti- deficiency protection.

    Or the senator who wouldn’t let the “homeowners protection bill pass the Banking Committee so it could be voted on by the House.

  10. Here’s a judge who can see through the fog……I wish I had him on my case……..

    Mortgage Fraud Suit Can Proceed, Appeal Court Rules
    Kate Moser
    The RecorderDecember 21, 2011
    SAN FRANCISCO — The Sixth District Court of Appeal tossed out a summary judgment for Citibank and a loan servicer in a foreclosure case on Wednesday, giving a plaintiff another shot to prove he was a victim of predatory lending.

    Jonas Lona — who claimed he was bamboozled in a mortgage refinancing scheme — had demonstrated triable issues of fact as to whether the loans were procedurally and substantively unconscionable, the three-judge panel concluded.

    “And while this evidence may not ultimately be persuasive at trial, in this case, it was sufficient to defeat the motion for summary judgment,” wrote Santa Clara County Superior Court Judge Brian Walsh, sitting by assignment.

    Lona, a native Spanish speaker with an eighth-grade education, said mortgage broker First Net Mortgage enticed him in 2007 to refinance his Hollister home, leaving him owing $1.25 million. Lona failed to make the $12,000 monthly payments with his $3,000 monthly income, so the house was sold at a nonjudicial foreclosure sale in August 2008.

    After Lona sued, San Benito County Judge Harry Tobias granted the motion for summary judgment for the lender, noting that Lona and his wife had other property that had also been foreclosed upon, and that “it’s hard to believe that they, based on these bare allegations, aren’t responsible for their own conduct.”

    The appellate panel balked at Lona’s argument that the trial court was biased against him, noting that Lona had taken $1.5 million from the lenders and hadn’t made any payments since 2007, yet still lived in the home rent-free.

    But the court said the bank hadn’t adequately addressed Lona’s evidence that the loan was unconscionable.

    A lawyer for Citibank, AlvaradoSmith partner S. Christopher Yoo, said he didn’t have any comment on the decision.

    Lona’s lawyer, Adlore Clarambeau, said he wasn’t surprised by the court of appeal’s ruling. The trial court, he said, “really should have allowed it to go to trial.”

    Clarambeau, who said he’s primarily worked on loan modification cases in the past three years, has himself been on the defense due to his role in this kind of work.

    In August State Bar prosecutors charged him with 35 counts of professional violations for work on loan modification cases.

    Clarambeau said he resolved the pending actions and will be suspended this spring. The attorney representing him in the matter was Scott Drexel, the former discipline chief for the State Bar.

  11. In court, parole evidence would allow the borrower to show that the “creditor” is relying upon a faulty transaction. At most, this fact might be sufficient to invalidate the mortgage lien and perhaps the note itself, leaving a naked obligation for which there is no documentation and for which there is obviously no collateral.

    But if the note’s ownership was lost —-abandoned or otherwise——what then——-if the note is not settled—–it will be enforced ——is this to say in this sort of state the bankruptcy ct wont touch the home as an asset which can be liquidated—-this is more than no deficiency.?

  12. The MIN is the MERS #. It is usually on your DOT.

    You can cross reference it with the MERS database under the homeowner tab. It will make you check a box and agree to get the info as to who is the supposed servicer and investor.

  13. “…supplied long ago by the investors whose money was used to fund the mortgage…”

    Wrong, Neil. You know the investors didn’t “fund” anything…give it up.

  14. @Tony,

    “xyz” being the name of your lender, right?
    I did just that. In my case, it is Fannie Mae. However, what I don’t have is the MIN. Is this the Mers number?

  15. Enrage,

    Just get my combo analysis… jk 🙂

    If your loan was in a trust check for what is called NIM trust. This will show you the other side of your “securitization trust”. Just type NIM xyz trust on google should lead you some places. This is a good start.

  16. Great post Neil, but what does it have to do with this case?

  17. I do have a question…

    Can anyone find out how many times the same loan was sold and to whom? If yes, how does one go about it?

    Thanks a lot.

    PS: Please, don’t try to sell me your product. Just let me know how to find out. I don’t have any money to buy anything from anyone and if you have the information and are keeping it close to the vest only because I can’t pay, you’re no better than the banks and you don’t deserve any better.

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