Fighting Back: Reversing Foreclosure and Eviction


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EDITOR’S NOTE: If you don’t fight, you are giving a gift to Banks who don’t have a dime in your deal. They didn’t lend any money and they never paid a dime for your loan. It seems impossible but it is true in most cases. So as more and more homeowners fall  victim to wrongful foreclosures (8.9 million foreclosures reported by ReatyTrak) there are more people who are willing to stand up for their rights. They are the ones leading the charge for the rest of the homeowners who give up prematurely either because they don’t have any fight left in them or because they believe the myth that these Banks are perpetuating.
The bottom line is that if you fight and you persist, the evidence is that you will eventually win or settle on favorable terms. But the Banks, who of course know these statistics, make it as hard as possible on you so you won’t fight. They will lie, cheat and then steal. And being an average person, you have no way of knowing that the person on the phone or who writes a letter to you is merely following a script that is designed to demoralize you and surprise you with foreclosure even after you thought the process of modification or settlement had begun.
The people in the winner’s circle are those who don’t believe a word of what is said to them orally or in writing and who demand proof of everything. They challenge everything. And they get the information they need to challenge everything. They get a title and securitization report, loan level accounting and forensic TILA analysis. They get a lawyer and they fight hard.
And then, after being ridiculed as dirt bags and deadbeats who are trying to get out of a legitimate debt, they receive an offer they can’t refuse under seal of confidentiality. Why? Because the original obligation that arose when you took the loan was paid or settled in full, and because the owner of that obligation does not want to pursue claims against you or can’t because they waived that right. The obligation is discharged by payment which means that there is nothing for the mortgage to secure. That leaves it as an unsecured obligation and the amount demanded is far more than the amount shown on the creditor’s books as still due from you.
Your signature enabled the investment banks to sell your loan multiple times under various securities that nobody understood. You funded the Banks’ profits with your signature. You are not getting credit for the reduction in your obligation after they received payment from third parties whom they fleeced just like you. There is no reason for you to shoulder the entire burden of this bad deal but that is what they are doing. They are getting payment over and over again and then to add insult to injury they are taking the house too. Do you still feel  guilty that you didn’t make a payment? Why feel guilty when the payment was not due?

COLUMBIA — Mohamed Sultan turns his car in to a small Hallsville subdivision and slows to a stop outside of a one-story, light blue house with panel siding. The lights are out. He doesn’t get out of his car or turn off the engine.

Sultan, 55, has a key but hasn’t been inside the house in months.

Related MediaThe Sultan family showed this house in Hallsville as a down payment for the Columbia house they bought and now live in. After the foreclosure, Mohamed Sultan said, “Why do we have to remove something? This house is supposed to be ours. This house is ours.”

One day around the beginning of May, he came home and found new locks on the doors. The back window was broken. Inside, a drill, ladder and table saw were missing. The wallpaper had been ripped off in one room. A Centralia real estate firm left a note on the front door. “URGENT! PLEASE CONTACT US IMMEDIATELY,” it read.

As the car idles, he begins to tell the story of the mess he and his family are in and how he still doesn’t completely understand what happened.

Four years after they borrowed against that home to help purchase another, they have had two homes foreclosed on, have thousands in debt, have ruined their credit and are suing Bank of America — who they say took advantage of them — in hopes of canceling a loan and holding onto whatever they can.

Bank of America is among five banks being investigated by all 50 states’ attorneys general for fraudulent and sloppy foreclosure practices.

The Sultans are among the countless homeowners who overextended themselves during the era of subprime lending. The circumstances surrounding the loans they took out and the foreclosure of their Hallsville property are unusual. In court records, Bank of America denies it was at fault. Officials from the bank and their law firms did not respond to or declined interview requests from the Missourian.

In 2007, Mohamed and his wife, Wanda, owned their three-bedroom Hallsville home free and clear. But with their five children, the husband of their oldest daughter and a grandchild also living under their roof, they needed a larger home.

When the Sultans first sought to buy a new home, they had no debts or liabilities but little savings and a modest income, court records show. Wanda earned $1,685 per month as an animal caretaker at University Hospital. Mohamed didn’t work and says he received about $1,250 per month in Social Security disability checks stemming from a 1989 work-related injury that mangled his left hand.

To help them finance the purchase of a new home, their real estate agent referred them to a loan specialist at a local branch of Countrywide Financial.

In May 2007, they found a five-bedroom home in north Columbia with a price tag of $208,000. They thought they could afford the home and say the Countrywide loan specialist told them they’d be able to make the payments. They took out a $165,000 loan to buy the property, according to court records.

On the advice of the loan specialist, the Sultans also borrowed $60,000 against their home in Hallsville. Part of the money was to be used as a down payment for the new home, and the rest was to make repairs to the Hallsville property, which they wanted to rent out.

After two years of making payments, the Sultans fell behind. They say they tried to negotiate a lower payment with the bank but failed and soon stopped making payments altogether.

“We exhausted everything we had,” Mohamed says. “We exhausted everything to keep the house.”

On and off over the years, Mohamed has been studying petroleum engineering, first at MU, then at Moberly Area Community College and then Missouri University of Science and Technology. He expected to be graduated and working — and earning an income — soon after taking out the loans.

But a series of misfortunes forced him to repeatedly withdraw from classes. In 2004, he dropped out after his mother was diagnosed with cancer. He stayed home to take care of her until she died in 2007.

In the spring of 2008, he says, an illness forced him to drop out. Each time Mohamed withdrew, he says, he stopped receiving student loans, which the Sultans were using to help with mortgage payments.

In 2009, he was diagnosed with kidney cancer, though he continued to take classes. But after receiving a foreclosure notice for his Columbia home in March 2010, he dropped out under the stress.

On the day they received the notice, their 11-year-old son went missing. In the middle of the night, they found him in a nearby park.

“I have no home to go back to,” Mohamed recalls the boy saying.

Mohamed didn’t want to file bankruptcy and hired a local consumer protection attorney to help.

All signs of his cancer disappeared in 2010, he says, but his anxiety about their financial problems was growing. In October 2010, he suffered a heart attack while sitting at his dining room table, forcing him to withdraw from school again.

In December 2010, the stress was compounded when his oldest daughter’s husband died.

Qualifying for the loans

The Sultans admit they aren’t knowledgeable about the home-buying process, and say they assumed the bank was acting in their best interest.

“We don’t know about these things,” Mohamed says. “We thought they were supposed to be on our side.”

“We trusted Countrywide,” Wanda says. “Why would they lie to people and tell them they can afford something? You put your faith in them.”

And while no one forced the couple to take out two unaffordable loans, a review of their loan applications filed in court shows there’s much more to the equation than financial naivety.

Matt Wilson, the Sultans’ attorney, says the Sultans should have never qualified for this loan and the bank knew that.

In May 2007, when the Sultans closed the two loans, Mohamed says Countrywide rushed him and Wanda through the process, pressuring them to sign and date numerous forms with little explanation of what they were. It was late in the afternoon, Mohamed says, and the bank told him they had to get everything signed by the end of the day for the loans to go through.

The Sultans didn’t realize what they’d signed until after hiring Wilson.

Countrywide didn’t want to take the chance that they’d walk away, Wilson says. “This was a cram-down.”

The $165,000 loan the Sultans took out for the Columbia home was backed by the Federal Housing Administration, so if they defaulted on the loan, the government repays the bank and taxpayers pick up the tab.

To limit the risk of default, FHA loans require a certain debt-to-income ratio to qualify. During 2007, when a borrower’s monthly debt divided by their monthly income was more than 0.43, they typically couldn’t qualify for an FHA-backed loan.

On a Countrywide loan analysis report for the Columbia home, the Sultans’ ratio is listed at 0.39. But the report understates the monthly payments for the Hallsville home: It says they have $110 per month in expenses for the property, but the actual monthly payment for the home was $463.

This difference is possibly due to the fact that the Hallsville loan application says the Sultans were earning $600 in gross rental income, presumably from the Hallsville property. They weren’t renting out the home, Mohamed says, and the bank knew that.

When the monthly debt for the Hallsville property is changed from the listed amount of $110 to the actual amount of $463, the Sultans’ debt-to-income ratio jumps from 0.39 to 0.49 — above FHA’s threshold to qualify.

The analysis report also lists that they have $54,5000 in an account — presumably the amount from the Hallsville loan— but doesn’t state that the money is borrowed.

Adding another strange twist, the Hallsville loan application says the Sultans own $288,000 in real estate. The only home they owned, in Hallsville, was worth $80,000. Mohamed says he never told anyone at Countrywide that he owned any property outside of the Hallsville home.

The same application lists Wanda’s address as a home in Rocheport the Sultans almost purchased but ultimately didn’t.

The Columbia loan applications said they were earning $475 per month in gross rental income. It also included a $7,849 loan discount fee the Sultans didn’t realize they’d paid. They say nobody at Countrywide ever mentioned the fee before or during the signing of the documents.

“I honestly feel like we’re just the new rookie on the block, and they’re the big bully,” Mohamed said.

The Sultans’ troubles with Countrywide, and now Bank of America, are not isolated incidents.

Countrywide, which was purchased by Bank of America in 2008, has been widely criticized for loose lending practices that contributed to the surge in foreclosures across the country. Boone County, which had a record of 349 foreclosures in 2010, didn’t escape the reach of the housing crisis.

In 2008, to settle a lawsuit over deceptive lending, Bank of America agreed to spend $8.4 billion to modify loans for nearly 400,000 Countrywide customers.

All 50 attorneys generals are investigating the foreclosure practices of the nation’s five largest banks, and on Dec. 1, Massachusetts filed a lawsuit against the banks for improperly foreclosing on borrowers by relying on fraudulent legal documentation.

The legal fight

When the Sultans closed their loans, they say Countrywide never sent them any closing documents. After Mohamed called and complained, the bank mailed them, more than a month after the closing. Countrywide hadn’t even told them what their monthly payments were, he says.

One document the bank never delivered, Wilson says, was a notice of a right to cancel the Hallsville loan. This document lets borrowers know that they have three days after the issuing of a loan to cancel it. If borrowers are never notified of this right, they have three years to cancel the mortgage, according to the Truth in Lending Act.

In May 2010, just weeks before the three-year period expired, Wilson sent the bank a letter on behalf of the Sultans to cancel the $60,000 loan.

In December 2010, the Sultans sued Bank of America in federal court for its failure to notify them of their right to cancel. They also sued the bank for unjust enrichment because of the $7,849 loan discount fee.

The Truth in Lending Act says that the right to cancel applies to a borrower’s “principal dwelling.” At the time the Hallsville loan was originated, the home was the Sultans’ only residence. Bank of America’s legal response is that because the Sultans intended to make the Columbia home their permanent residence, they have no right to cancel the Hallsville loan. If the bank wins this argument, the Sultans could lose both homes.

In April 2011, while the lawsuit was pending, Kozeny & McCubbin, a law firm representing the bank, sent the Sultans a foreclosure notice for their Hallsville property.

Wilson thought the notice was a mistake. When he notified Bryan Cave LLP, the law firm representing the bank in the federal case, one of its attorneys sent an email implying that indeed, a mistake had been made: “Thank you for bringing it to our attention,” the attorney wrote. “I talked to our client, and she assured me she would clear up the confusion.”

When the Sultans received another collection notice from Kozeny, Wilson again notified one of Bryan Cave’s attorneys, who said in an email, “I believe we have resolved the confusion that led to this issue. … Please pass along our apologies. Again, I believe we have resolved the issue.”

About two weeks later despite their attorney’s assurances, the bank had foreclosed on them. Their home was sold for $71,427.

Wilson says the Centralia firm that left a note on the door wouldn’t say who had hired it to lock up the home.

The Sultans were living in the Columbia home at the time but hadn’t abandoned the Hallsville property and were arguing in court that the mortgage they’d defaulted on had been canceled.

In June, after the home had been foreclosed on and locks had been put on the doors, Bank of America filed a lawsuit in state court to obtain possession of the home.

Regardless of whether the foreclosure was legitimate, Wilson says, without a court order granting them the right to possess the property, the bank couldn’t have lawfully entered the home.

“You can’t go into someone’s house without a court order to steal their stuff,” he says.

MU law professor and property law expert Dale Whitman says that because the Sultans weren’t living in the home, the bank’s actions might have been legal. “On the face of it,” he says, “the foreclosure transfers title to the bank.”

With regards to removing possessions from the home, Whitman says it’s a bit of a gray area. “You can take stuff out of a house if you store and secure them in a safe place,” he says.

But the Sultans have heard nothing from the bank about where the missing items are. So far, Bank of America has refused to provide Wilson any documents disclosing details about the Hallsville foreclosure.

Bank of America and the law firm Bryan Cave didn’t respond to interview requests from the Missourian. A Kozeny attorney declined to answer any questions regarding the Sultans.

The bank dropped the suit against the Sultans’ Hallsville property on Dec. 9. It dropped a similar suit regarding their Columbia home in September 2010.

A trial is scheduled to determine the Sultans’ fate in April, and Bank of America has filed a motion to dismiss the case. If a judge rules the Sultans didn’t have the right to cancel the loan, there will be no trial, and the only remaining option for the Sultans might be bankruptcy court.

Wilson says it might be impossible to keep both homes and that they’re hoping to get a new mortgage at a fair amount and interest rate for the Hallsville home.

“All we want is the status quo,” he says.

The Sultans aren’t contesting the foreclosure of their Columbia home. Even if a jury rules in their favor, they probably will still lose it, though they’re hoping a court might give them some leniency due to what they allege was a fraudulently created loan.

But if the ruling goes against them, Wilson says, there will probably be no way to save either home. The Sultans could end up not only losing both properties, but having to pay the difference between what they owe on their mortgages — after not making payments for two years — and what the bank was able to sell the homes for during foreclosure.

If that happens, Wilson says, the Sultans would never be able to repay their debts.

If they can’t even keep their Hallsville home, they’re not sure what they’ll do. Mohamed says they don’t have friends or family with the money to help them or space to accommodate them.

66 Responses

  1. @joann – no doubt LS is a smart cookie. It may not occur to everyone to challenge the very language in the deed of trust. Imo, the document is a wretched piece of recklessly crafted illigitimacy and possibly just plain unenforceable at the extreme. It’s no secret most courts wouldn’t like to make that acknowledgement; I don’t know an alternative to such a finding just now, but bright people might work on either ‘forcing’ such an adjudication or alternatives which best satisfy the law.

  2. Nora C

    You are right. Securitization — is the least of the problem.

  3. More snapping at the heels, rather than just bashing the banksters over the head with a hammer.

    What was securitization? It was a scheme the banks used to get that huge pile of money the investors held. They appealed to the greed of investors who would jump at a chance to get a higher return on their money, and underplayed the true risk–that they were going to lose almost EVERYTHING if they got in bed with the banksters.

    What are home loans? They are one sided contracts, designed to get all the equity in the real property, and then Title to the property without having invested a single penny of their own capital. They did this by changing the nature of the currency involved, through a clever bank scheme that allows them to create money out of thin air. This is a FACT, not speculation. Look it up. They converted your Note to money of exchange and forced you to labor to pay interest on it. Jesus ejected the moneychangers from the Temple for this, calling it an “abomination”. Andrew Jackson killed the central bank for this. Lincoln and Kennedy tried.

    Securitization was a scam, made deliberately confusing and complex to hide simple criminal activities; Fraud and Theft, Usury, Breach, Racketeering and Conversion. These financially sophisticated thugs devised a clever scheme–it was brilliant–to steal everything of value in the world without anyone realizing how they did it. They used our signatures on a worthless document to convince a court of law that we had defaulted and they were suffering a loss, when they didn’t lend any money and had no loss, and weren’t entitled to a judgement of foreclosure under any circumstances. More smoke and mirrors. What they counted on was the borrower’s ignorance of how the banks truly operate, and the courts willingness to take their word for it that they had suffered a loss. They puff out their chests and thumb their cigars and portray themselves to be superior–“I OWN YOU,” they say. Like everything else this is a lie. They own nothing. Because of their own arrogance they thought they would be able to get away with it forever, because THEY’RE THE BANK.

  4. Tents are exempt unless; you pitch the tent as structure, secured by a permanent foundation, then it is theirs too.

    I wish these guys would just take their football and go home.

  5. Here is the best idea. Everyone in foreclosure just saunters down to the county recorder and files a satisfaction of mortgage. We get a fake notary stamp and it is signed simply with the letter “C”, as are many of the alleged assignments of mortgage.

    You make the satisfaction returnable to original fetch bank after recording, and when the pool trustee tries to push forward on the case, just tell em the mortgage has been satisfied.

    When they say it is a fraudulent satisfaction, just look the opposing counsel straight in the eyes and say. “This is a case of the pot calling the kettle black”and we need discovery to sort this all out” You can than decide if you want to sign a new mortgage, because legally that is what they are trying to make you do anyway through modification and HARP 1 & 2. Harp 3 will be out after the election and it will simply be: pay us back all the money at this new rate with a balloon payment, we do not care what the house is worth, if you are employed, have assets or anything, please just sign this so we can show the court in the future that you gave away the right to sue by acknowledging through this new instrument that we own the loan.

    Notice the final mods are never signed by the Trustee!
    Notice the HARP refi’s does not have the Trustee sign a Sat. The trustee need not sign anything because they only are entrusted with cash flow. Guess who has the Notes on their balance sheet as leveraged assets, protected by counter party insurance. Guess why the mortgage / dot is irrelevant for anything other than Standing?

    DCB hit is right on the head, go look at the supplemental prospectus for any trust and you will see that only 1 % includes an actual loan list filed with the SEC. They contain a description, but no loan numbers, property address. The older pools are even better that do include a loan tape. i have found many cases where they claim the loan was owned by the pool and it is not listed on the description with the other alleged conveyed loans.

    The loans are not there, the swap providers have no money, and now you have FHFA suing these guys for underwriting failures because the cash flow is no longer being sent by the Master Servicer.

    The next President, regardless of who wins will come out with a program that simply states sign here, and keep your house. This works well for banks since; they can’t foreclose in judicial states if the folks simply answer with a general denial, they can’t find a home for the inventory already sitting, so this gives them a cushion to unwind, they have been suing one another to get in under the time window, and the FDIC is getting pounded for wiping out smaller banks who are no more insolvent than the reserve system banks. They will celar the glut by having you sign a new doc (credit) stating you owe X amount and we have a right to collect for the benefit of whomever, even if we not disclosing that the actual whomever is us, the servicer.

    “Swap Wars”, the movie.

  6. @DCB

    “Are tents exempt from seizure to pay off an unsecured note—maybe need to move to a homestead state and buy an RV.–or houseboat–something you can move when they cut back the exemption”

    I still have some equity in my car. Maybe they would like that. It has held its value better than the house. I would trade it for the house perhaps instead of having to move the car out of the country. Might even give them brand new paper too if they also paid me enough for my signature…..only would I go to jail for helping them launder their fraud?

  7. @NPV

    “I am getting my tent ready”

    Are tents exempt from seizure to pay off an unsecured note—maybe need to move to a homestead state and buy an RV.–or houseboat–something you can move when they cut back the exemption

    these beasts are goingto come back with a vengeance [literally] after election–every person MUST do as much between now and election to get the info in coherent form to press to do as much to break this grip now—i keep arguing for escheat because it is much better to put the state between you and the thugs than have the thugs reinforced by your own county sheriffs

  8. @ NPV

    Is that why if i pull up semi-secret trust loan lists today —rather than accting for the manner of disposition of a line item loan—the line is totally deleted??

  9. @ JOANN
    “and you have to wonder why – maybe no actual ownership even though investors bought something – mbs – or thought they did”

    Because the truste “abandoned” the note and real interest to the psuedo-servicer after the bkrty ct allowed a sale of the collection rights w/o any duty——-the collection agency lacks a clear claim–and tries to assign the rights as if UCC did not exist—–

    its all about this acquiescence to servicer seizure —thats what is driving this mess—–servicers that only get paid –only get all the proceeds if they foreclose—the separation of interest from the investors by the servicer creates a conflict of interest that defeats investor recoveries as well as bargained solurtions designed to preserve property and yield most value to investors–the servicer is happy if he can get a seize and freeze casualty insurance claim plus the proceeds of a salvage operation–a portion of the monies from stripping the pipes, wires, fixtures, prehung doors, cabinets, windows.

    why is the state interest not compelling—state intervention in its historic role as escheat beneficiary is whats missing here—neither homeowner lawyers nor servicers want to open this ancient remedy–because greed not law animates both

  10. @JG
    the rights upon adjudication of abandonment might, but not the property per se

    The rule of escheat originated with abandonment of fee interests in the heirs’ bloodline —when no blood heir of the body existed the estate reverted to the King so he could put another Norman noble family in the castle.

    So a mortgage DOT etc can escheat—typically happens today frequently if a decedent has passed w/o known heir–then publication is used to perfect the state interest. Usually invoked by a 3rd party that wants to buy the property and cant because no title to buy.

    Today more often its abandoned financial interests–deposits, insurance proceeds etc

    In this context I think you would have to prove the note was in fact abandoned which is difficult—–then state moves in–in all quiet title statutes the law recites that you must name all govt entities with an interest–that includes state escheaters, but they are not familiar with it—nobody wants to push this button–but it has the result you noted—you can bargain with the state–but never with a servicer.

  11. Everyone talks about CW, as if BAC made a bad decision. Guess who pooled all the CWBC loans and was on the hook for the underwriting as the Sponsor / Seller Bank. Why do you think a war broke out between John Stumf and Jamie Dimon over Wachovia. Well had been securitizing Wachovia garbage for years and they knew James was looking to back-door them on the counter-party claims.

    Bernanke and Geithner had to intervene to stop the squabble, and to further set the rules on how the reserve system banks would split the spoils of swap wars. That’s actually a great name for a book, “Swap Wars” – devaluing America one home at a time

    The nice thing is; the banks own both candidates in the coming election, so we should expect congress to vote us onto the streets. We must move to start questioning both candidates about mortgages and how they will deal with the massive fraud if elected.

    Will they leave it to the State, or will we see a wave of equitable claims being filed in the federal system. I think they judge shop, on a mass scale beginning in November 2012. i am so sure this is their last recourse to circumvent judicial procedure, I am getting my tent ready.

  12. @ Ed Tolle, that is the real problem – we are not 4 years down the road – we are 11 years down the road. Yves is wrong, many times a Note is securitized and sold to separate warehouse clients of originating banks. Yes, it was in error but these fetch banks have long since dissolved and you have two pools claiming rights to loans in many cases. We do not hear about it because it is fought out in the backrooms of wall street among close friends who know theoretically that anything they can capture is gravy.

  13. The trust purportedly already holds the beneficial interest – secured interest – but the assignment comes from the servicer (who has no secured interest) many years after the trust already purchased it from the depositor who purchased it from the sponsor-seller – assigned by the servicer using fraud against all kinds of laws and rules (and you have to wonder why – maybe no actual ownership even though investors bought something – mbs – or thought they did?). Then the trustee bank for the trust doesn’t even show up in court or sign his name to anything and the servicer attorney pretends he represents the trust and the foreclosure proceeds in the name of the trust…or there is no assignment before the trustee sale….anyway…

    Ron Ryan had this to say in a letter to the AZ attorney general posted in a previous article on Livinglies regarding Arizona:


    “This refers to the impact of Article 9 to the transfer of security interests in real estate incident to the sale of promissory notes, as brought home perfectly by the extremely timely March 29, 2011, Draft Report of the Permanent Editorial Board on the UCC Rules Applicable to the Assignment of Mortgage Notes and to the Ownership and Enforcement of Those Notes and the Mortgages Securing Them (the “Report”), a copy of which is attached hereto.

    Being the Holder of the Note does not carry the security interest with it. Article 9 of the UCC governs in cases involving the sale of Notes [it is actually the debt or the Loan that is sold, while the Note is only evidence of the debt] secured by real estate. These Article 9 provisions cannot be avoided under any circumstances as it trumps all other law and agreements between the parties.

    The Report makes it clear that OWNERSHIP OF THE NOTE AND LOAN is required to have a security interest. It specifically states that there is no security interest unless the party purchased the Loan from the party that previously owned it, and that this sale was made pursuant to a special writing that stated that the purchase of the Note included the security interest in real estate represented by the deed of trust. THERE IS A SPECIFIC PROVISION PERTAINING TO THE RECORDING OF DOCUMENTS NECESSARY TO FORECLOSE IN NON- JUDICIAL FORECLOSURE STATES.

    The Report makes it clear that OWNERSHIP OF THE NOTE AND LOAN is required to have a security interest. It specifically states that there is no security interest unless the party purchased the Loan from the party that previously owned it, and that this sale was made pursuant to a special writing that stated that the purchase of the Note included the security interest in real estate represented by the deed of trust.

    ARS § 47-9607(b)(1), governs the ability to hold a non-judicial foreclosure, and it precisely defines the necessary documents to be recorded. The Claimant cannot record the necessary affidavit, without perjury, unless it purchased the loan and security interest from the party that owned it. It cannot record the “security agreement,” without supreme fabrication of documents, unless there was a real purchase contract with a separate entity from whom it paid value for the purpose of purchasing the Loan and security interest in the DOT. And that other party had to be the party that owned the Loan and security interest at the time of purchase.

    In order to execute the Affidavit in § 47-9607(b)(2), Claimant must purchased the Loan for value from the party that owned it previously, pursuant to 47-9203(b). Both the “Security Agreement” and the Affidavit had to have been recorded prior to posting the Notice of Trustee Sale. The required § 47-9607(b) writings were not recorded. Therefore, Claimant has no right to foreclosure non-judicially.

    Pursuant to ARS § 47-9203(b)(UCC 9-203(b)), in order for Claimant as purchaser of the Note, regardless of whether it is negotiable or non-negotiable, to obtain the security interest in the Property and the right to enforce the security interest, three criteria must be met for the security interest contained in the DOT to attach: 1) value must have been paid for the Note; 2) the party from whom Claimant purchased the Note must have had ownership interests in the Loan and DOT rights; and 3) the party that sold the Note to Claimant must have provided an authenticated writing that provided assurances that the selling party owned the Note and DOT rights. See ARS §§ 47-9203(b)(3)(A)-(B). When reading 47-9203(b),

    Eisele v. Kowal, 465 P.2d 605, 609 11 Ariz.App. 468 (Ariz. App., 1970). The often cited rule or law that the security interest follows the note needs clarification. The meaning of the rule is not that the security interest follows the “holdership” status of the note. It follows ownership of the loan, or the note, of which the note is evidence. This principal is codified at ARS § 33-817.

    Assignment of mortgage without ownership of the underlying debt evidenced by the note is a mere nullity, or vice versa, is a mere nullity.

  14. “If the true owner abandons it” is another story, and not terribly short.
    The property would not go to the state by escheat imo. If your general proposition is correct, the rights upon adjudication of abandonment might, but not the property per se. fwiw. But Good, then the gov can demand the return of our stinking HAMP etc funds and they can modify our loans. And now that I think about it, haven’t the banksters abandoned the HAMP etc funds by their miserable failures to modify (read subsidize) loans?
    And who says one must cut off a sleeping noteholder? I don’t know if one could, either, but I believe there’s a path. In the meantime, let em sleep. No one wants to live in uncertainty for stinking ever, that’s for damn sure. But if a homeowner can’t cut off a sleeping noteholder, than neither can the state to score some escheat.

  15. @joann – I don’t get that, especially the first line under B, unless it is referring to what one party as a holder of security interests in stuff actually owned by another can do (because then the owner of the first debt becomes the debtor of the second debt (his own) to the secured party) in that scenario of hypothecation or cdo or whatever it is. Looks like some kind of subrogation right expressed / provided by / as a matter of law without the necessity of a court battle. (But I still shudder when I see the word “mortgage” instead of deed of trust. Because of my view of dot’s, I can’t help wondering how many times – and where – the words which are not interchangeable are actually used as if they are, and if in this context, it would matter.) The default referred to is the default of the debtor who has made his own interests collateral for his own debt? That’s my take without seeing the a(3) referred to. So a secured party could (“may”) record the contractual collateral interest, for lack of savvy on better words, and go after the property himself? But that is only one remedy, isn’t it? It’s not required / mandatory to seek remedy in this fashion. If I gave Henry 100k and took a pledge or something like that on Henry’s 250 note and dot on Clem Kadiddlehopper’s property which is now worth 50k, I wouldn’t pursue that remedy if a better one were available, especially if doing so would or might diminish a full recovery of the amt I’m owed. ……? .

  16. @JG
    I did not mean to suggest that forfeiture to a collection agency on a naked claim was appropriate–just that the maker of a note and mortgage cannot in equity or stable business environment simply wipe out the debt by technicalities. Even double recoveries–simply that the naked claimant and homeowner stand on equally soft ground vis equity. If the true owner is established to have abandoned the asset the state gets it–not the homeowner.

    “And ruling that one party has no interest is not an adjudication that NO one has an interest other than the homeowner, anyway, although I would argue there’s a path to that adjudication.”

    This bothers me too. I do not know how to cut off a sleeping noteholder that has the paper in his safe –UCC —I do not think that publication can cut the sleeper off–but id love to be correceted–please

  17. @E. TOLLE;
    “You can’t magically multiply the cash flows to have the actual cash go in multiple securitizations”

    If the same servicer is handling the trusts as mere groups of accounts and allows an account in trust a to be in default–or in suspense—while treating the receipts on 2nd acct in 2nd trust–you can fill the both pools——–sell the same note with diferent acct #s to 2 sets of trst investors—thats the purpose–a classic PONZI

    The originator fires up in 2003—runs till 07 then “burns out” –nobody audited the trusts–off balance sheet——or the missing loan schedules that halted comparisons would have shown up–in one case an originator actually received a qualified opinion on basis of double counting warehouse financing and sold to REMIC—-fast and furious facilitates fraud

  18. @johngault

    “The statute of frauds would dictate that an assignment of that beneficial interest in real property must be in writing. Maybe that’s it. Maybe that in writing requirement was the safeguard against false claims of interest.”

    The UCC also requires a “writing” in non -judicial states (“secured party” – NOD and ADOT by pretenders – not that writing)

    UCC Section 9-607(b)
    (b) [Nonjudicial enforcement of mortgage.]
    If necessary to enable a secured party to exercise under subsection (a)(3) the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded:
    (1) a copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and
    (2) the secured party’s sworn affidavit in recordable form stating that:
    (A) a default has occurred; and
    (B) the secured party is entitled to enforce the mortgage nonjudicially.

  19. @joann – if I recall right, one reason I didn’t like Veal was that the court said a servicer had enough of a pecuniary interest to have standing to foreclose in its own right, something like that, which to me is bench law aka crap. The rest of it was not ‘news’, so only this ruling stood out like a sore thumb, at least to me.
    @dcb – not sure what exactly you’re saying there, but equity can abhor a forfeiture all it wants to no end if the law must find in favor of a “free” home, this time to a homeowner. Not giving a home to one with no right to it is not a forfeiture, anywho. And ruling that one party has no interest is not an adjudication that NO one has an interest other than the homeowner, anyway, although I would argue there’s a path to that adjudication. A homeowner should not be made to bear the inequity, speaking of ‘equity’, of a free home to a stranger, or to a party even with rights otherwise, who set out in a business plan which circumvented his ability to establish a rightful claim. The bad actors and defeasors cannot and should not win for their own legal, factual defeasance and unclean if not filthy or even legally remiss hands.

    There were assumed risks with that whole mess for all of them and they went in and hit the pavement running in pursuit of the quick bucks. If notes were properly endorsed in title-theory states and those involved neglected the assignments to which they were entitled and they may no longer get them, why should a homeowner pay for that major negligence and deriliction? If the statute of frauds is at issue in states which require assignments, and I say it is, they blew it. Their laches and negligence and misperceptions of real property laws go beyond contributory imo. I appreciate that argument more than you know tho, because if I had heard it, I forgot it, and it will be argued sure as spit. One must know thine enemy.
    I think you made reference to the Magna Carta about which I can spell the name. And unlike you, I don’t know much about lien states, especially those still using mortgages, which may follow the note for all I know.
    The deed of trust document and whole deal is a weird one to me in the first place. From one stance, it appears the foreclosure is actually itself a quiet title action. The dot trustee has either equitable or legal title and forecloses the homeowner’s converse title and re-unites them in his trustee’s deed to the successful bidder. The trustee was put in to accomodate the whole schematic of ‘non-judicial foreclosure by a neutral party’ if not a fiduciary to the other two parties. Okay. But I still haven’t ‘wrapped my head around’ why this would or should have required a transfer of one of the two forms of title by and in the dot.
    Why not create an instrument of non-j foreclosure which didn’t pass one form or another of title? It has got to be that it’s because of the statute of frauds. The statute of frauds would dictate that an assignment of that beneficial interest in real property must be in writing. Maybe that’s it. Maybe that in writing requirement was the safeguard against false claims of interest. Glad we had this chat!

  20. @DCB

    void ab initio——-where does predatory loan fall in this continuum?”

    The predatory claims are about “meeting of the minds” and don’t know if this has ever voided a mortgage or not. But as to “meeting of the minds” – person expected and desired to be able to pay their mortgage and the lender expected and desired them not to be able to pay it (because he made money on inflated property value producing inflated mortgage amount – got points and fees ect on the inflated amount especially from the most toxic products given to the least qualified if they knew how to sign their name and shoved onto those who qualified for better “we never write fixed rate loans anymore” “this is a better product and you qualify for more and a lower interest rate and payment” – had further reasons to profit on the default, had already got his money several times over by selling in advance to investors for several times the mortgage amount and also got his trading profits in advance and never had any skin in the game).

  21. @johngault
    “joann – are you advocating that a dot follows a note?”

    I know nothing and advocate nothing (other than a basic faith that existing laws also protect the property rights of owners and not just “lenders” and that they are there to prevent anyone from getting a free house) .

    Just trying to work it out and understand. Seems to me the note is nothing without the deed. The deed secures the note. I might currently be understanding that there can be no separation by definition but that is what has happened which is perhaps “illegal” or impossible. Seems to me the party entitled to enforce the power of sale is the only party entitled to the income as per deed and note (the servicers-collectors-pretenders of any sort – and MERS is a pretender – do not have this and pretend they do and if they have no power of sale as per deed they are toast).

    Why don’t you like Veal? Thought it clarified many things. Sorry I will read back to find your posts.

    From Veal v. American Home Mortgage Servicing:
    The concept of a “holder” is set out in detail in UCC § 1-201(b)(21)(A), providing that a person is a holder if the person possesses the note and either (i) the note has been made payable to the person who has it in his possession or (ii) the note is payable to the bearer of the note. This determination requires physical examination not only of the face of the note but also of any indorsements…
    …under the common law generally, the transfer of a mortgage without the transfer of the obligation it secures renders the mortgage ineffective and unenforceable in the hands of the transferee. Restatement (Third) of Property (Mortgages) § 5.4 cmt. e (1997) (“in general a mortgage is unenforceable if it is held by one who has no right to enforce the secured obligation”). As stated in a leading real property treatise: When a note is split from a deed of trust “the note becomes, as a practical matter, unsecured.” Restatement (Third) of Property (Mortgage) § 5.4 cmt. a (1997). Additionally, if the deed of trust was assigned without the note, then the assignee, “having no interest in the underlying debt or obligation, has a worthless piece of paper.”

  22. the next round might be about notes and notes only

    Thats where we always have been in the judicial states where mortgage follows note

  23. @JOANN
    void ab initio——-where does predatory loan fall in this continuum?

  24. A note–“I promise to pay to bearer 6 merchantable sheep upon presentment”
    Its a trade draft
    Not really a contract–its consideration for a contract–if its “we promise to pay to bearer $100 on presentment”–its a Ben Franklin

  25. simple bill—if plaintiff attempts to foreclose and cannot prove title to note then note and real estate interest securing said note escheat to state after some proof period

    that would make banks be careful–balance the scales—and not uppend 1000 years of common law

  26. correct me if im wrong–but under this proposed bill—-wouldnt the house title just hang in limbo–or become a windfall to the homeowner—the lenders would simply refuse to lend on real estate in that state–i dont like to beat an old drum–but this is creating some entirely new law–stuff simply does not forfeit to private parties–it hasnt since 1066–or earlier

    “equity abhors a forfeiture” —-most basic of legal principles–drilled into every lawyers head from day one at law school–and easy to remember ——-im extraordinarily sympathetic on these issues–but i could never accept the free house thing—-ok ill accept a house earned by setoff of damages–but not a forfeiture –it begets different frauds–think about it

  27. @jg
    “A bankster has but one remedy for breach under the election of remedies doctrine. (and that reminds me why banksters trying to foreclose based on a dot only is absurd – the obligation doesn’t arise in the dot – it is only in the note that the obligation secured by the property arises)”

    In judicial states which is all i pretend to understand—they must accelerate and get judgement on the note–all of it as a condition to enforceing the foreclosure

    if they want they can go after everything else too–but marshalling required as an equitable limitation on creditors–not a defense of homeowner

    even if the debtor files bankruptcy–absent the state homestead exemption stuff–most of our german farmer states dont allow any exemptions—-the home loan collection agency has the largest proprotional claim–even if you can strike the mortgage—-so no solution there—-and in many of the states the mortgage follows the note—-so the assignment of mortgage is meaningless except for intimidation value–and giving a really skinny claim to standing along with the attys word on it

    its so hard to generalize on state matters–its tough interagency federal–but really tough state—-and it really gets me that i could move from california no deficiency state to ohio a ok –no deficiency–but not the other way around which to me is not equal protection or free movement

  28. joann – are you advocating that a dot follows a note? That would be pretty handy if true (altho still somewhat problematic to banksters who snarfed homes based on “MERS”, who would then be toast since beneficial interest in notes owned by non-member investors), but it isn’t, imo, even if that were the interpretation of the recitation. A ‘mortgage’ per se might. Dot? No. A DC judge I consider banker-friendly recently surprised me by stating in a decision that MERS isn’t the beneficiary, regardless of any recitation in a dot, for instance. Could be another pig in lipstick case, tho, like was my take on Veal when I read it.

  29. Jan van Eck, — is right again.

  30. Homeowner signed deed of trust and note (neither was signed by the “lender” but setting that aside)…

    Deed of Trust clearly states note cannot be sold without the Deed of Trust ie “Security Instrument” ie “this document” (“can be sold” – “together with this Security Instrument”). Doesn’t it come down to what was signed? Where does it say the note can be sold or enforced separately?

    “20. Sale of note; Change of Loan Servicer; Notice of Grievance. The note or a partial interest in the note (together with this Security Instrument) can be sold one or more times ….[parenthesis not added]

    (A) “Security Instrument” means this document, which is dated…..together with all Riders to this document.….

    Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security….”

  31. When MERS was allowing its members to do foreclosures in its name, it’s because MERS audaciously decided what constituted the unity they KNOW is necessary to enforce a note and deed of trust. The interests created in those instruments must be held by the same party to go after collateral and they know it.
    MERS members all have mers’ straw-officers, right? thanks to the alleged appts by William Hultman. The servicer, for instance, tacitly (by their actions) implied possession to MERS of a bearer note, so this to MERS equated unity of the note and deed of trust: the MERS’ straw officer at the servicer had alleged possession of the bearer note and MERS is named in the dot = “unity” to MERS. Now they can’t pretend this particular unity because of MERS not allowing foreclosures in its name as a result of the Consent Order last year or 2010, one of those. So now the unity pretense is the servicer or other pretender claims poss of a bearer note (skipping its mers-pretend/straw officer for alleged poss of the note) and does a self-assignment of the deed of trust = new version of “unity”. That’s the racket, and speaking of tacit, it’s also their very loud, telling and not tacit at all acknowledgement of the unity mandate to enforce the note by way of foreclosure on the dot.
    It’s interesting to note that further, just ignorant shanigans are actually their undoing. If they hadn’t gotten just plain stupid like with robo-signing, this ill-conceived, bogus “unity” business plan of theirs might never be outed.

  32. If a judge were inclined to recognize wrongful foreclosure based on a mol recurrent fallacy in the foreclosures, would you argue the decision should apply retroactively? If a court finds 1 + 1 is not 3, does that apply yesterday, also? If you could stand before a court and explain your view of why this should be applied retroactively, what might you say, may I ask? Or if you think not retroactively, why not?

    That was a nice explanation of the diff between void and voidable joann posted.

  33. Remember that case in AZ a week or so ago (was it) where the bankster didn’t want a case published about notes – something like that? The writing is on the wall, I tell you, as to MERS. It’s around the corner. This may likely leave the banksters to in fact prosecute the breach of the note in lieu of foreclosure. And we might still be sitting ducks. Or will we? They’ll rely imo on possession of the note otherwise interpretted as holder status pursuant to the UCC, which holder word is found in the negotiable instrument provisions of art 3, not 9?) to do this. And if I got Max Gardner right from my extremely, hugely limited understanding of his ‘stuff’, that could be a challenge. But if the holder status prevails, we’ll be found to have breached the note provisions, they’ll get judgments, and go after our homes that way (but I admit this gets tricky because just because abc couldn’t prove it has no interest doesn’t mean some xyz out there couldn’t and courts would know this), so what ELSE do they have up their sleeves?) If I smell this right, that’s what might be coming.
    So how to defeat a note-based judgment? If they are suing under the note, and not with the dot, it will be because the assignments aren’t recorded, weren’t done, can’t legitimately be done, and there is no proper chain of title for the dot. So if one could manage to get another voluntary dot on one’s home, no court will as an equitable consideration give the bankster suing under the note (only) an equitable lien senior to the new dot one got. The judgment on the note when attached to the home would be junior to the ‘new’ dot. But don’t make up a dot. We could get creative, and still act legally. Probably go to jail if cross the line. If banksters begin pursuing actions on the note only, how about spending some money on a true-trust- pro to put homes in trusts, potentially out of the reach of judgment creditors? I can’t swear, but I thought I read putting a home in a trust does not trigger a due on sale clause, fwiw, and anyway, the due on sale clause is a provision of the dot, not the note, and it’s the note they’ll be suing on IF I see this right. And you could even sell your home if you could find a buyer willing to assume the risk the real lender won’t be showing up. Courts hold a note owner responsible for the actions of anyone allegedly acting on that note who shouldn’t, at least the Nosek court did. I’m thinking about the near impossibility of what would have to be done for a real party to show up if laws are actually followed mol once MERS is obliterated. Well, what’s the benefit of title insurance, for instance, if it has a million exceptions in it and doesn’t it unless they are getting off the radar indemnifications from banksters playing the odds against getting nailed for wrongclosure?
    I’m not an attorney and this is not legal advice. I just think the next round might be about notes and notes only, and if so, we should get as ready as we can.

  34. From Wikipedia “Void (Law)”;
    (Bevilacqua v. Rodriguez, 10880, Supreme Judicial Court of Massachusetts (Boston) October 18, 2011 comes to mind)

    “In practical terms, void is usually used in contradistinction to “voidable” and “unenforceable”, the principal difference being that an action which is voidable remains valid until it is avoided. The significance of this usually lies in the possibility of third party rights being acquired. For example, in Cundy v Lindsay (1878) 3 App Cas 459 a fraudster induced Messrs Lindsay & Co to sell to him a quantity of handkerchiefs. The fraudster then sold the handkerchiefs on to an innocent third party, Mr Cundy. The fraudster was convicted, and the money was never recovered from him. Lindsay sued claiming ownership of the handkerchiefs. If the contract of sale was held to be voidable for fraud, the fraudster could pass good title Mr Cundy (provided that the contract had not yet been avoided), and Lindsay & Co would only have recourse against the insolvent fraudster. However, if (as was in fact held) the contract of sale was void ab initio, then title did not pass, and Lindsay could claim back the handkerchiefs as their property, and Mr Cundy was left with only a claim against the insolvent fraudster.
    However, the right to avoid a voidable transaction can be lost (usually lost by delay). These are sometimes referred to as “bars to rescission”. Such considerations do not apply to matters which are void ab initio.”

  35. What is the law which says that if a contract, like a note, does not describe the real transaction, x is the consequence? If one could prove cw did not fund the loan, did not in any way provide the funding to where the ‘facts’ recited in the note do not recite the transaction, which might mean cw was a straw party (got me, and what’s that mean), where is it written the note is unenforceable? Trust me – I am not arguing against; in fact I like the argument. But what is the argument based on? If I remember correctly and got me if I do, if a party named in a note is a fictitious person (not just a phony name for someone who exists, but someone who exists by NO name at all, i.e., does not exist) there is no contract. But what is this doctrine which puts the kabosh on a note which does not reflect the ‘true transaction’? As I’ve said, in the ‘old days’, this was done a gazillion times with no adverse consequences to anyone that I know of. The long and the short of it, I would say, is it was done for street cred. And btw, I don’t remember those contracts to a t between the originator and the supplier of funds, but the originator may have operated as the authorized agent of or under another cognizable relationship to the supplier of funds. fwiw. I’m only asking because you have to list some causation for an action. What is it?

  36. sorry, dcb, have to part company on that one. I didn’t say the note is not enforceable (if everything done right – uh huh). The debt is not gone, just the path to the home as collateral. No scholar on this, but foreclosure is not the only remedy for breach of the provisions of the note-contract.
    At any rate, the homeowner has not abandoned title to his real estate nor is such a finding available upon a finding there is no enforceable interest of anyone else’s in his home. A bankster has but one remedy for breach under the election of remedies doctrine. (and that reminds me why banksters trying to foreclose based on a dot only is absurd – the obligation doesn’t arise in the dot – it is only in the note that the obligation secured by the property arises) I think the “one-action rule” is in every state’s laws. If he attempts foreclosure, and loses, it’s my understanding it’s over, at least to that bankster and then a quiet title action would be appropriate against that bankster if one wanted one. I think. Not sure on quiet title stuff. If he does not attempt foreclosure and sues for judgment on the note, then he may get it and can try to seize on the assets of the homeowner that way like any other judgment creditor (including the now unencumbered home, assuming – big assumption – there’s some adjudication NOone else in the world has a collateral interest or rights in the home). There are ways to protect unencumbered (by dots) properties and one of them is a homestead, which protected amt of equity by way of the homestead varies from state to state. Nevada’s is ‘helpful’ at 550k. Some states homestead exemptions are so small, there’s not much value to them. Case law holds that a homestead will trump a judgment if filed prior to attachment.
    But escheat? Nah. I dont’ see it, anyway.

  37. Here’s the real kicker for the Sultans: their loan was probably not even with Countrywide, and if you were to study the Note carefully, it probably reflects some other entity as the “lender.” My guess is that their counsel was not wise to the shenanigans pulled by Countrywide in its heyday. And to no surprise, Bank of America is not about to tell.

    Just because Countrywide says it is their loan, doesn’t mean it really is.

  38. @johngault

    “The resolution, I would think, has to start with an assessment of the very legitimacy of the language in the deed of trust document created by MERS and a determination of the answer to ‘who is MERS in the dot?’ Nominee? Agent? Beneficiary? No one really? MERS could be a nominee of the beneficiary, but that’s not how they framed the dot. MERS could have been the agent of the beneficiary in the deed of trust, but that’s not what is recited / expressed nor were other lawful agency tenets followed. (for instance, agency when it comes to real property may not be found impliedly – it must be clearly expressed) MERS is not the beneficiary, having no interest in the collateral instrument. (If it is, the note and dot are bifurcated imo for the failure to legitimately state a cognizable relationship between MERS and the true beneficiary)”

    Thanks johngault!

    MERS can’t pass the muster by any determination. Not a beneficiary and anyone who says they are under penalty of perjury or who commits fraud hiding under the curtain of MERS should pay the consequences. Someone should draft legislation that makes MERS illegal.

    Note: I really didn’t analyze my posts deeply today – just interested in any sample attempts at legislation by anyone (Neil should take a shot at it)…I think it is just way past time to get bills drafted, debated and passed in every state and these attempts are worthy for discussion and debate. Even if futile it is time congress and the mainstream are forced to focus on “rule of law” already in place – not being followed. My bill would be “from now on courts must follow the rule of law or the judge goes to jail”.

    Lynn Szmoniak is a smart cookie and blew up robo signing in the mainstream and she is a fan of Neil. I would be surprised if she doesn’t “get it” about MERS.

  39. FYI readers –copied from another site re consumer cases of distinction

    “I recognize that this is a tricky question, as what fits into “consumer finance” is an open question, but I have in mind the field broadly defined including state and federal law dealing with credit, payments, insurance, and debt restructuring (other than bankruptcy).
    Here’s what comes to mind immediately for me:

    Williams v. Walker-Thomas (unconscionability)
    Marquette Nat’l Bank v. First of Omaha (Nat’l Bank Act preemption)
    Watters v. Wachovia (OCC preemption for nat’l bank operating subs)
    Smiley v. Citibank (OCC preemption for late fees)
    AT&T v. Concepcion (availability of class actions)
    Heintz v. Jenkins (FDCPA)
    Swarb v. Lenox (confession of judgments)
    Lynch v. Household Finance (pre-judgment garnishment)
    Fuentes v. Shevin (repos under writ of replevin

  40. @e tolle – the only ref in the world I have is In re Vargas (CA) or it might have been Nosek (MA). Some bankster filed a poc and stay relief and didn’t tell the court the loan had been sold to FNMA. That court recognized that FNMA does not portfolio loans, either, so knew
    it had gone ‘down the line’. What that judge knew is of course not precedent, but if I were desperate, I’d cite it anyway. Both those decisions are at scribd. FNMA’s website (have fun) may support a contention that fnma does not continue to own the loans it buys. Let’s say fnma is claimed to one’s loan. Let’s say one could demonstrate by at least a preponderance that it doesn’t. One has to anticipate the bankster’s next move made in the ungodly and unconscionable amt of wiggle room being afforded banksters, otherwise known as lying with impunity, to stay alive. Banksters suck it out of us and then conform their “facts” to fit.

  41. “Will the judiciary who will instantly recognize the enormity (if they haven’t already) come down on the side of the law for this and other statutory reasons if doing so results in ‘free’ homes to citizens?”

    Simple answer–no—there can be no free homes to homeowners by technical defect–even fraud. The best you can get out of common law is escheat. A judge could answer all his constituents with confidence then–“the homeowner owes debt to somebody, the collection agency cant prove they own the debt, nobody else can—ans as in all the other instances in the judge’s career the default winner is the state–by escheat

    until you accept this you people are going to lack credibility

  42. @angryandnottakingit – that is exactly right. You said a whole lot in your short comment.


    I cant speak of real banks but the small independent fly by nites used exemptions from the electronic filing requirements in the earliest days of 03, 04 —small hardship exemption—-to use a “manual filing” option for the loan schedules.

    What that meant was run off a list of 10,000 -20,000 lines of data on an excell-style spreadsheet printout and hand this hard copy printout to SEC–which then had to scan each page onto the EDGAR database along with the 10K for the trust.

    Problem was that the filers just did not get around to making that “manual” filing very often. Missing loan schedules are common in these types of originations/securitizations—iv not seen it where a real bank that could not claim the exemption was involved –they just filed really sparse lists electronically—zip code, loan #, and amount. These are enough together with the description of the loan group in the prospectus to allow you to locate your loan.

    If it was manually –UNfiled—-then you have a problem–who is in control of your destiny??? anybody with access to a database–or your county records? beware the nots still there

  44. @joann – I could never make ( least I think not) myself endorse anything which allows an assignment of a collateral instrument by someone momentarily donning a MERS officer hat – regardless of any disclosure of one’s real employer. I doubt if I would ever support a real MERS officer assigning a collateral instrument. That, of course, is problematic, since MERS is listed on the deeds of trust. Have to figure out a remedy for that illegitimate piece of crud. The resolution, I would think, has to start with an assessment of the very legitimacy of the language in the deed of trust document created by MERS and a determination of the answer to ‘who is MERS in the dot?’ Nominee? Agent? Beneficiary? No one really? MERS could be a nominee of the beneficiary, but that’s not how they framed the dot. MERS could have been the agent of the beneficiary in the deed of trust, but that’s not what is recited / expressed nor were other lawful agency tenets followed. (for instance, agency when it comes to real property may not be found impliedly – it must be clearly expressed) MERS is not the beneficiary, having no interest in the collateral instrument. (If it is, the note and dot are bifurcated imo for the failure to legitimately state a cognizable relationship between MERS and the true beneficiary) Of all the ways the dot could have been written by MERS with legitimacy, none of them was implemented, whether out of ignorance or some intent to cause confusion. The confusion has allowed the theft, or at least apparent theft, of thousands if not millions of home… so far. A nominee may do certain limited things, but only a true agent may assign an interest in real property and those rights and obligations must similarly be expressed. An expression of alleged rights without an expression of agency is worthless because agency itself, as I say, may not be found impliedly. Mers’ crafted dots say MERS may do what is necessary to foreclose (disregarding for discussion the illegitimacy of MERS stated identities in the instrument). That does not at any rate include assigning interests. An assignment is necessary, of course, but even though it’s legally necessary to establish rights, an assignment itself is not an act of foreclosure. One of these days, a first court is going to fully recognize the MERS’ illegitimacy, both as to the verbage in the dot itself and then as to the straw-officer business. So there has to be resolution on how to treat the deed of trust in the first place (is it even a legally binding collateral instrument?) and then how must assignments be done sans “MERS”. If it were found, which imo it should be for these and other reasons, that all assignments from A to D had to be done, but A, say, is out of business, what then? * Will the judiciary who will instantly recognize the enormity (if they haven’t already) come down on the side of the law for this and other statutory reasons if doing so results in ‘free’ homes to citizens? It’s my opinion that would be a hellofa boost to our economy, although I know that’s not a reason to make legitimate
    * It’s my understanding that normally when one has a right to rights like those (legitimately) stated in a doc like a dot, one may sue to get an assignment of that right. Dunno how that works when “A” is toast so can’t get it. Probably SOL for one’s own “laches”, which is a legal doctrine which finds a party failed to assert its rights in a timely fashion mol?

  45. to create laws to accommodate mers is to validate mers.BS.
    the better method is plain on its face. owners of property signing transfers not an agency, agency is method that got us here.

  46. WA state bill for False Swearing (from Market Ticker):

  47. From Fraud Digest and Lynn Szmoniak:

    Legislation needed in every state:

    The Truth-In-Mortgage Documents Act

    1. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must sign his or her own name, regardless of any authorization by any individual or entity to sign any other name.

    2. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must set forth his or her actual job title, and the name of his or her actual employer, regardless of any authorization by any individual or entity to state any other job title or employer. Any individual signing as an officer of Mortgage Electronic Registration Systems, Inc. (“MERS”) must state the name of the Nominee/Lender in addition to setting forth his or her actual job title, and the name of his or her actual employer.

    3. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness, must set forth his or her actual work address at the time of the signing, regardless of any authorization by any individual or entity to state any other address.

    4. On every Mortgage Assignment filed in the Official Records of any county in this State, or filed in any Court in this State, the effective date of the Assignment must be plainly and exactly set forth by day, month and year. Effective dates such as “On or before” are not permitted.

    5. On every Mortgage Assignment, and every Missing or Lost Assignment Affidavit, filed in the Official Records of any county in this State, or filed in any Court in this State, each signer, including any witness or notary, must sign his or her own name, using a full signature stating first and last name, and may not use initials or abbreviations or marks, regardless of any authorization by any individual or entity to sign using initials, abbreviations or marks.

  48. there is some question wether 3rd party payments would effect the stated debt..but i degress
    im not sure if any of the so call trans-action was legit,
    was it trans-action or trans-fer both would seem to carry different rules and outcomes if theory is applied correctly . it seems all of the matter[s] are hypothetical and simple acknowledgment of which one applies may very well steer the entire narrative & outcome.
    perception or misconception??????

  49. @ E. Tolle

    Can your friend share this information with the rest of us?

  50. My note’s supposedly in Fannie, but it’s highly doubtful that it resides there knowing the originator. However, the opacity of that whole system makes me want to storm the castle and spare no lives.

    Disgusting that we are majority owners of F&F and can’t get transparency out of the deal. Just like the Fed, TPTB have too much to lose by sheer honesty. It wouldn’t even dawn on them to lean that way. Thieving rat bastards one and all.

    As to tracing the notes into trusts, a friend with a Bloomberg terminal swears they can see the individual notes spread across multiple trusts. I was told of one note residing in 18 separate trusts, whole. Anybody have anything to say about this? Speak up before everyone’s foreclosed. Clock’s ticking.

  51. Can someone point me toward those arguments / cases wherein it was found B of A did or didn’t acquire CW’s stuff?

  52. @joann – I like this except that it requires the homeowner to do something against a false and or unsubstantiated claim. A certain class of people will suffer for this. Maybe that’s just life and litigation. I have no alternative language this minute. Anyone?

  53. I don’t think there’s any way to tell if one loan were sold to multiple trusts. All entries of sales of loans were entered into MERS database by its members as voluntary entries with no oversight. The oversight which would have prohibited such duplicate selling (even in error – don’t gag) was ‘truncated’ when MERS got in the act and the assignments, and thus alleged ‘final homes’ to loans, were no longer public record. There is no real interface on the planet with psa’s or documents listing loans in trusts. No software program I’m aware of is capable of searching Edgar stuff looking for multiple entries, not to mention the sometimes sparce identification of loans in a pool. In discovery, and I’m not making this up, the bankster’s idea of identification of a loan in which I was interested was identified by loan amt and zip code only.

    As to the case in the post, unless the court applies nothing but bench law, the lender on the first home will lose. It doesn’t matter one rat’s that the family intended to move. I have to say – it truly is difficult to read some of the horse-manure stuff that gang comes up with. I really had to bite my tongue on that one. (And I can almost promise you the application for the loan on the existing home did not indicate such intent – the conniving broker would have made sure that wasn’t on the app) If they lived there, it was an owner-occupied refinance to which the right of rescission applies. If they lived there that moment, the right of rescission applied. Period. If bench law is applied, I hope they can appeal.
    I have never, to tell the truth, read much of Yves Smith stuff, but by all appearances, she is quite credible, so I am incredulous at what I take to read is an argument against one loan being sold down the road to multiple entities. Maybe I got it wrong. Really, you gotta be kidding me based just on that gang’s inability to walk and chew gum at the same time. And also it looks to me like that’s the real reason for TARP bail-out gimme funds. Ponzi deals, whether created brazenly and willfully or as a result of ‘systemic failures’ only work as long as someone feeds the kitty. The brakes go on, game over. So then I ask myself where in the world, then, did all that money go from multiple sales?
    It just must’ve been corporate salaries, bonuses, leer jets, and mojitas…or out of the country for the same or similar purposes.

    People in MA should get their wrongful foreclosure suits lined up. MA may be about to lead the charge. At the risk of sounding dramatic, Dear God, let it be so.

  54. who is suing you?

  55. @E. Toile,

    Frustrating as hell, isn’t it? I can’t even find out if my loan went in any one trust… ‘cuz no one tells me how to go about it! I ask for step-by-step but… no! Nobody wants to give that answer.

    I wonder if Neil doesn’t ignore those questions in the hope that we’ll buy his audit…

  56. This is from Market Ticker:

    The Legislature finds that:

    The practice of failure to accurately record the real parties at interest in mortgages and other secured real property transactions has led to clouded titles and foreclosure actions that are of questionable legality;


    The maintenance of clear, complete and accurate real property records forms the basis of private property rights and is a fundamental liberty interest secured under the State Constitution.

    Therefore it is the law of this state upon the effective date of this legislation that:

    1.All real property land title records evidencing an indebtedness shall require public filing at the county level documentary evidence of the indebtedness claimed to be secured by said real property;

    2.All such filings shall name the real party or parties at interest with reference to the full legal name of the entity the security interest is in favor of;

    3.Such filings shall be updated on a contemporary basis when debt instruments are sold, securitized, traded or otherwise transferred, with a deadline of not more than thirty (30) days after the effective date of said transaction.

    4.A release shall be filed and returned to the property owner within thirty (30) days upon the event of payment in full or extinguishment of the debt secured by the property by any means, including but not limited to payment through a credit-default instrument, swap, deed-in-lieu proceeding, insurance payment or otherwise. The release returned to the property owner shall include the original wet-ink mortgage documents marked “PAID IN FULL” and signed by an authorized signatory of the holder in wet ink.

    5.In any action for foreclosure the moving party shall present to the court in their original filing:

    The original, wet-ink mortgage agreement signed by the mortgagor and mortgagee or their agent(s).

    A full, complete and correct accounting of all monies transferred, paid, or received in reference to the indebtedness, including all securitization cash flows, payments in kind from third parties, credit protection payments under default swaps owed or paid under events of default or other arrangements, sufficient to establish as a matter of forensic proof through accounting that the monies claimed to be owed at the time of the default and foreclosure that are prayed for are in fact owed and outstanding and have not been satisfied and that the economic injury alleged has in fact occurred.

    Evidence of the full, complete and unbroken chain of assignments in the public records as required in items 1-3 above.
    A true, certified, dated and correct copy of the Notice of Default meeting the requirements of (6) below.

    Evidence documenting that any available Federal and State programs for foreclosure and default mitigation such as but not limited HAMP and HARP have been complied within in full and, if insufficient to resolve the default, the specific reasons for the failure or denial shall be included in the initial foreclosure pleading.

    A foreclosure action shall be commenced within 120 days of the event of default giving rise to the action under the contract of mortgage, except that the time shall be tolled during the pendency of any HAMP or similar program not to exceed 90 additional days. Due to the deleterious effects on neighborhoods and the certainty of title and property within this state a tardy foreclosure action shall be barred as contrary to public policy of this state. The barring of said foreclosure actions shall not operate to prevent other lawful and permissible collection actions such as suits at law or in equity for recovery of money damages.

    6.Any “Notice of Default” or similar tendered to a defaulting mortgagee shall set forth the amount(s) necessary to cure the default, if default can be cured or the mortgage redeemed, in exact dollars and cents and in the form of payment accepted, during any available cure period. A default shall be curable for at least 30 days following the Notice of Default. A mortgagor or the subsequent assignee or transferee shall be required to accept payment at an office within the county where the property is located during the hours of 9:00 – 5:00 local time at least four days per calendar week, or if there is no such office at a designated office within 100 road miles of the property address.

    7.A foreclosure action that is filed and fails to satisfy the requirements of (5) and (6) above shall be dismissed upon the pleading by the defense alleging said deficiencies, and upon sustaining such a defense the defendants shall be entitled to all reasonable attorney fees and costs from the plaintiff.

    8.Within 180 days of the effective date of this legislation all existing property records that bear a mortgage and do not conform with the statutory documentation requirements for chain of title under clauses 1-4 shall be brought into compliance. Any landowner or mortgagee may sue for quiet title once the 180 day cure period expires from the effective date of this legislation and such a suit shall be sustained, removing any mortgage cloud upon the title, with reasonable attorney fees and costs taxed to the defendants.

  57. I’d have liked this article better if the Sultans had prevailed, already.

  58. @ Eugene, and your point is????

  59. E.Tolle ,
    I’m not a securitization wizard or a foreclosure genius but, I know the difference between Neil Garfield and Yves Smith.

  60. you would go to jail for like 10-15

  61. @HMAN
    What does recording a bogus release do for you unless you are trying to defraud a buyer?

  62. Hello everyone. I like this article but I have another hypothetical question.

    Assuming the lender on your deed of trust went out of business years ago and the name is no longer registered…could you reregister the name?

    What would happen if ABC mortgage went out of business. I registered the name under ABC mortgage. Than I recorded a lien release?

  63. @ e tolle ….the loans were pledged as collateral and sold multiple times by the i banks when they were melting down fall 08…

    then the investors were busted out for the most part…

    that is why the sec filings went blank then and that is why there is no loan schedule for the trusts…

    yves was talking about originators multiselling…the i banks didnt allow much of that…they did it themselves when survival was in question

  64. “In May 2007, when the Sultans closed the two loans, Mohamed says Countrywide rushed him and Wanda through the process, pressuring them to sign and date numerous forms with little explanation of what they were. It was late in the afternoon, Mohamed says, and the bank told him they had to get everything signed by the end of the day for the loans to go through.”

    this was standard practice—-papers hot off printer–no time for review–much more complex than ever before

  65. This article fails to disclose that even insiders at CountryWide/Bank of America describe ALL the mortgage modifications that were SUPPOSED to occur as a result of the 2009-announced SETTLEMENT were supposedly ‘CANCELED’ (read that as actually the agreements that were offered and accepted by borrowers were UNIFORMLY BREACHED).

    The ‘CA CW AG Mods” which Jerry Brown crowed so much about were a BIGGER JOKE than HAMP.

  66. Neil, I know you don’t answer comments like these, at least not like you used to in the beginning days of your blog when the banksters ran amuck and foreclosed on all us deadbeats at will. Oh, those days are still here years later? Imagine that, some things never change.

    However, you have raised a subject repeatedly such as in the above post, where you state emphatically that:

    “Your signature enabled the investment banks to sell your loan multiple times

    On this subject, it would appear that Yves Smith differs from your view, when she writes in a comment:

    No, the idea that loans went into more than one trust is very much exaggerated as a concern. Only one originator seems to have done this, and it wasn’t one of the biggies (I can’t recall the name now….). And even then, I suspect it was driven more by their mortgage brokers (the low-life firms did not have their own origination but used third parties) than an attempt by the originator to defraud (will check with my sources on this and may add another comment later). In the later stages of the bubble, you’d have, no joke, former pizza delivery guys becoming brokers. Some of them figured out they could make as much money selling the same loan 2-2 times as finding 2-3 borrowers for far less work.

    The reason is that mortgage notes are actual documents, wet ink signatures, exempt from Federal digital signature law. The whole point of a securitization is to structure the cash flows. You can’t magically multiply the cash flows to have the actual cash go in multiple securitizations.

    It’s hard to imagine that here we are four years down the road and we still don’t know what in the hell is going on, or at least, no one has been able to force the hands of the banksters to reveal their fraud.

    The question was and remains, is there any definitive way to show whether or not a loan has been placed into multiple trusts, or simply sold multiple times? And if so, how? And if not, why not? And if not, how do we embarrass our reps in Congress into doing something about it?

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