Squatters Benefits and Adverse Possession: Show Me the Money!


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 EDITOR’S COMMENT: It is difficult to compute because of the very nature of the problem. But from my perch it looks like more and more people are standing up to the Banks and getting their pound of flesh back one way or another. By staying in, moving back in, or even taking over the abandoned property next door, innovative homeowners are striking back at the Banks and more of them each day are apparently doing very well.
It’s what Reagan called “Voting with your feet.” Call it what you will, tens of thousands of homeowners are recovering at least part of their investment through non-payment of rent or mortgage. Some are passive, just waiting out the times for foreclosure and eviction, which ordinarily buys them 8-12 months. Some are more pro-active sending letters that the pretenders don’t know what to do with because they don’t have a script for the notices and letters being invested by homeowners.
And more and more people, in a rising tide, are directly confronting the pretenders in court as they realize that the “default” may not be a default, the payment might not be due, and the foreclosers are not who they say they are, even if they have brand names that are 150 years old. The stories about robo-signing, surrogate signing, and fabricated, undated, back-dated or otherwise defective documents are taking their toll on the supremacy that the Banks counted on.
The essential question that is starting to emerge, although often mistakenly skipped by attorneys, is “where is the money?” The fabricated documents all refer to a transaction that did not occur — the sale of the “note”. By asking for proof of payment, and by asking for proof of funding when the loan was originated, lawyers are beginning smell blood. There was no payment for the “sale” of the note and hence no sale. And the funding of the loan came from parties who were not disclosed at closing, using a third party strawman to make it look real, but it wasn’t.
Don’t misunderstand me though. As I said in a recent article, if you receive money in what is couched as a loan transaction, any attempt to make it a gift is going to be met with an angry face on the Judge who hears that argument. And the Judge will be right. But the same Judge will react quite differently when confronted with the question of why the funding source was not named on the note and mortgage (deed of trust) — especially when the position of the Banks is that the funding source — the REMIC pools — did fund the loan and do own it.
It’s getting more complex out there in litigation land. Judges are confronted with notes and mortgages that are defective on their face because there was a known source of funding that was not named on the note or mortgage or otherwise disclosed contrary to the requirements of TILA and other statutes, rules and regulations regarding lending. With the obligation already owned by the investors to begin with, what effect does an assignment between the intermediaries have on the chain of title, standing and the the right to submit a credit bid at auction?
With all of that in play now, which will come up in today’s members’ teleconference, some people are getting even more bold by playing the system to achieve clear title through adverse possession — a process that boils down to trespass turned into title. I know of several businesses that are using the same tactics as the Banks to establish some colorable right to title, then taking over the property, renting it out or using it and putting signs out that say “Adverse Possession” and “NO Trespassing.”
It’s weird but it’s working — especially where both homeowner and the Bank have abandoned the property after the foreclosure “auction” which we all know is a farce. By paying the taxes and maintaining the property, these risk-takers are having some success holding onto properties that are producing rental income and they are headed toward a valid claim for adverse possession after they have boldly claimed the property as their own. I offer no opinion as to whether this trend will continue, and no opinion as to whether it will work, but it is working now and the the number of people squatting and exercising even more claims over the property is rising rapidly.

Foreclosure “Squatters” Goad Lenders and Stand Pat

By MICHELLE HIRSCH, The Fiscal Times

Delinquent borrowers are beginning to see a bright side to foreclosure — they can stay in their homes, often living rent-free as courts and banks bat around their cases for months if not years.

As of last November, it took a mortgage lender an average of 646 days to process a foreclosure and reclaim the property, according to recent data from LPS Applied Analytics, a mortgage and loan processing service firm.  That compares with 394 days as of Nov. 2009 and 251 days in January 2008.

Housing analysts and lenders agree that one of the main causes of  the hold-up is simply the sheer volume of post-2008 housing crash defaults overwhelming mortgage lenders and servicers—the companies to whom borrowers directly pay their loans.  Currently, between 4.5 and 6 million homes are either in foreclosure or 90 days past due on paying their loans, according to estimates from Mark Dotzour, chief economist and director of research at Texas A&M University’s Real Estate Center.

But there are other factors: It’s become much more difficult for lenders to reclaim properties as foreclosed homeowners have become more emboldened. Rather than packing up and leaving their homes, many of these delinquent mortgage holders are seizing on recent legal and marketplace trends to fight back in court while remaining in their homes.  According to figures from the law firm Patton Boggs, foreclosure litigation cases rose 26 percent in the second quarter of 2011, more than doubling from one year earlier, and reaching the highest level since the firm began indexing cases in 2007.

“Not only are consumers getting savvier on fighting back and protecting themselves, but in many cases, we actually have people who are sort of gaming the system now,” said Rick Sharga, Executive Vice President of Carrington Mortgage Holdings.  Sharga says he has come across increasing numbers of delinquent  borrowers intent on defaulting.  “These are borrowers who aren’t interested in loan modification, short-sales, or negotiating settlements—they’re mostly interested in not paying until the foreclosure is over,” he said.  In many cases, the borrower is completely off the hook on making payments during and after a foreclosure since mortgage loans are non-recourse, meaning the lender is only legally entitled to collect the property, and the borrower has no personal financial liability.

To be sure, not all foreclosed homeowners pursue these bold strategies, and many do in fact want to stay in their homes and make their loan payments, said Jonas Jacobson, a Boston attorney who represents foreclosed homeowners.  “These homeowners are not malcontents scrubbing off the man….Everybody I work with says the same thing to me: ‘I want to pay my mortgage, but the banks won’t modify my loan,’” he said.

Jacobson says bank disorganization and inability to follow through on loan modification promises are to blame for the foreclosure lags.  “The bottom line is that people are staying in their houses because the banks do not have their crap together and are falling all over themselves.”

What is clear, however, is that the 2010 “robo-signing” scandal did open delinquent homeowners’ eyes to the prospect that banks had taken shortcuts with their mortgages.  During 2010, banks nationwide were caught ordering   employees sign hundreds of foreclosure documents and affidavits a day without verifying that the information was correct.

The finding led federal regulators to allow millions of foreclosed homeowners to have their cases reviewed in court. To date, very few foreclosure rulings have been reversed, but the exercise has gobbled up mortgage lenders’ time and resources, said Celia Chen, a senior economist with Moody’s Analytics who specializes in housing.  “It did slow down new foreclosures because servicers took extra bandwidth to make sure everything was signed perfectly,” she said.


17 Responses

  1. “where’s the money”? you ask… it’s in our fungible pockets is where. all debts through this underwriting system called ‘central banking’ are monetized at issue. the money is in your wallet, relatively; look no further.

  2. in PA and probably most States just waiting the mandatory periods, wrangling by letters and negotiations, making them deliver service by Order; Answering the Complaint, following the preliminary mediations and such; going up to Trial or Summary Judgment, and filing a Notice of Appeal; will be TWO YEARS AT LEAST.

    Then the Appeal, and maybe get into the Federal Court; 1-2 MORE years. Then a Motion to Void Judgment, plus Appeals… another year at least.

    Then Bankruptcy filed by the OCCUPANTS, the OWNERS, one at a time, testing the same issues in the “Proof of Claim”, and appeals; another 2 years?

    Then a Petition to Set Aside the Sale or a Preliminary Injunction, Appeals etc over 1 year… adding also to contest the Writ for Possession, with more Bankruptcy stays and litigations and the time it really takes to get someone out of a house, another 2 years.

    At least 8 years!!! With a good chance of winning at any given point. paying no taxes or utilities, filing mechanic’s liens and other superior devices (hoa liens, advanced tax liens… give the equity to the county)

    In 8 years we are talking about 1000 hours of legal work, @ $400/hr… plus opportunity cost. plus maybe they lose.


  3. Yeah, and there would be a lot more people challenging the banks in a court of law if the stealthy destruction of all American jobs by huge corporations hadn’t left “borrowers” destitute. This was more than financial crime, it was meant to demoralize and disintegrate us as well as leave us too broke to fight an organized crime ring this large. Most people love their home for good reasons and dubious reasons, but losing what we cherish was intended to be a form of control of the herd to weaken it and ruin morale. Thing is, Americans didn’t get depressed and demoralized, they got angry. We are a nation with spirit, conviction and determination. Look at how we rally to support one another! When there is a time of crisis, Americans show what they are made of. This one’s no different.

    This crisis boils down to a corrupt government, who either doesn’t get it, or doesn’t want to because the bankers own their souls. Now we need to throw the bums out and start over, and never let money and politics be bedfellows again.

    When we keep pounding on the heads of the people who can bring criminal charges, we will either get charges filed or we will get new people. Keep pounding and keep refusing to give in to criminals.

  4. I paid my property taxes right before the trustee’s sale…I recorded a new grant deed…I asked them in writing for PROOF of lender, creditor, owner of promissory note and beneficiary. They repeatedly LIED and said the “investor” of the MBS was the creditor/lender/owner…and then a debt collector sold my house…
    And that’s how they do it in good ol’ California…

  5. I tried delaying a foreclosure by sending my “servicer” a lease agreement with one of my tenants. They sent me a letter back saying they did not have to honor the lease because at the time of execution I was already pass due on my payments therefore I was in breach of contract and the lease did not have to be recognized.

    I wondered about the adverse possession too. In AZ I believe you have to be paying the taxes and maintenance on the property for 3 years. It would probably work if you could be there that long. However, my “servicer” sent me a letter advising me to quit paying my taxes. They said they wanted proof of payment and they would issue me a refund. They do not want me paying my own taxes.

    If you do pay your own taxes the servicer will find out eventually and from there I don’t know what will happen. I received a letter about a month ago and still nothing has happened.

    Very interesting ideas. Hope it works for some. Good Luck everyone

  6. @concerned ,

    I was trying to keep it generic ,

    AWL , Option One originations and any bank with “MERS as Mortgagee” / MOM language in their standard contract … like SunTrust for instance… would be on my short list. AWL is best because of what is in the public domain.

    Plenty of million dollar homes to be had for $20k+ if I only had $20k .. many people want finality and to move to a new state/location but feel trapped .. They are eager to be freed.

    I have a commercial property that is soon to be “deconstructed” and will yield $$$$$$$ , hope it gets to me sooner rather than later.

    To me the biggest obstacle is finding a lawyer for the QT filing , I was looking for one a year ago and never found one that I was comfortable with.

  7. @neidermeyer,

    You would have PLENTY of properties to start into that ‘funnel’ of offers by simply looking for all distressed mortgages where the original LENDER is identified as “America’s Wholesale Lender Corporation”. Since that lender did not exist in the cited state until AFTER the dates when the loans were originated, those loans are all based on FRAUD.

    The mortgage or Deed of Trust for these loans reflect the Lender as a New York Corporation. Yes, it NOW exists, but the corporation that now exists was not formed by Countrywide which does have D/B/A filings all over the place. Countrywide can not prove any relationship exists between MERS and that “America’s Wholesale Lender Corporation”. That has even shown up in court cases such as Alderazi in NY (April of 2010 and 2011).

    BTW, CW has filed assignments (using the MERS nominee role) from “America’s Wholesale Lender Corporation” to “Countrywide D/B/A America’s Wholesale Lender” in numerous cases. That fact underscores the point that they are actually VERY aware that the loans without the D/B/A are distinct. BTW, if “America’s Wholesale Lender Corporation” was actually a part of Countrywide, or if those D/B/A filings were proper to claim the loans where the loan documents identify the lender as AWL Corp were written by a part of Countrywide, then CW would not need to use the supposed MERS nominee to do the assignments. They could simply file an assignment from one entity to the other as successor without MERS, right?

    Basically, the big misconception has been that Countrywide legally controls “America’s Wholesale Lender Corporation” when it does NOT.

    Those “America’s Wholesale Lender Corporation” loans were never perfected, CW, BofA and others have no valid standing, and the investors and the borrowers are both being defrauded by the pretenders. No one can actually provide a satisfaction of mortgage that is really valid without going to court to Quiet Title.

    The investors should be taking note of these “America’s Wholesale Lender Corporation” loans. They are very likely to have paid an additional ‘fee’ that looked like CW was paying an outside broker to write a wad of loans that CW then was ‘purchasing’ with a supposed profit to the “America’s Wholesale Lender Corporation”, as far as the investors knew.

    It is theory that there was a fee paid but these loans were originated in quantity over an extended number of years, even after courts were refusing to allow foreclosure in the name of the “America’s Wholesale Lender Corporation”. So CW modified the means used to try to foreclose, but continued to write the loans naming a non-existent AWL corporation. To me that spells out a financial motivation for the duplicity.

    Yes, I know that other lenders used a corporation or company to write mortgages and then those entities have typically gone out of business. But they actually did exist as a real company.

    Somehow, CW was able to use the smokescreen of the D/B/A relationship to fool almost everyone. I see publications where Countrywide and the “America’s Wholesale Lender Corporation” loans were tabulated separately. See http://goliath.ecnext.com/coms2/gi_0199-1667535/Marketrac-R-Brief-Article.html

    How could these “America’s Wholesale Lender Corporation” loans be traded without tax filings of the “America’s Wholesale Lender Corporation” being needed?

    Of course, filing taxes in the name of a corporation that did not yet exist would have been a problem, but somehow, they were showing the name of a non-existent corporation on numerous documents and should have also had to have a balance sheet to show for that CORPORATION.

    Should CW/BofA be asked to show how they held these loans on any balance sheet?


  9. Today was a good day, indeed…

    Southern Essex District (MA) Register of Deeds John O’Brien Calls for Criminal Action against Big Banks
    Written on January 18, 2012 by Editor in Uncategorized 0 Comments – Leave a comment! .Salem, MA – January 18th, 2012

    O’Brien calls for criminal action against the Big Banks
    Says they acted like “criminal enterprise”

    Saying that the time has come for a full scale criminal investigation, Southern Essex District Register of Deeds John O’Brien, today has sent some 31,897 of what he says are fraudulent documents that have been recorded in the Salem Registry to Massachusetts Attorney General Martha Coakley, U.S. Attorney General Eric Holder and U.S. Attorney Carmen Ortiz. O’Brien said that he is asking these officials to impanel a Grand Jury to look into the evidence that he has presented.“I am confident that these documents will show a pattern of fraud, uttering and forgery. These documents are signed by known robo or surrogate signers, whose signatures were supposedly witnessed by notary publics. In addition, these documents may contain fraudulent information in the body of the documents. I believe that a criminal investigation is the next step to hold the perpetrators responsible.”

    O’Brien praised Attorney General Coakley for her aggressive pursuit of wrongdoing in her civil action but noted that other states such as California, Nevada, Illinois and Michigan have launched criminal investigations, and O’Brien is hopeful that Massachusetts will do the same. O’Brien strongly suggests that the Grand Jury should subpoena both the past and present Chief Executive Officers (CEOs) of the Mortgage Electronic Recording Systems, Inc. (“MERS”), Bank of America, JP Morgan Chase, Citibank, Wells Fargo, Countrywide, Washington Mutual among others.

    In addition, he is asking that the top officials of DOCX, Nationwide Title Clearing, Inc. and LPS also be subpoenaed. “These companies have been retained by MERS and its member-banks to produce the documents that I am alleging contain fraudulent information. It is one thing to go after these institutions with a civil action, but the only way to let them know that you are serious is to call them before a Grand Jury.” O’Brien said, “There is no question in my mind that the officers of these banks and loan processing servicers made a conscious decision to commit fraud and participate in a scheme to deprive the public from knowing the true holder of their mortgage while at the same time avoiding paying billions of dollars in recording fees. It is my opinion that they acted as a criminal enterprise, crossing state lines to commit their crimes and in most cases using the U.S. Postal Service to send these documents to registries of deeds, thereby committing mail fraud. We need to know what they knew and when they knew it. Until the CEOs who allowed these fraudulent activities to happen under their watch are sent to jail for what they did, these types of illegal behaviors will continue.”

    Just last week, O’Brien’s Registry received 3 documents from Bank of America, all signed by a known robo-signer, Linda Burton. O’Brien said, “If they are sending them to me, of all people, it is safe to assume that they are sending them to registries across the country.” O’Brien refuses to record any documents signed by a robo-signer on his list unless those documents are accompanied by an affidavit attesting to the signature. So far, he has not received one affidavit. “That clearly shows me that those documents were in fact fraudulent.”

    O’Brien said that if he or anyone else went into one of these major banks and forged a signature on a loan document they would be arrested and sent into jail. So it begs the question, why haven’t these CEO’S been held accountable? O’Brien cited the case of the individual who walked into a Walmart and tried to make a purchase using a fraudulent One Million Dollar bill. He was arrested and charged with attempting to obtain property by false pretence and uttering a forged instrument. O’Brien said, “As far as I am concerned, this is what these banks have been doing for years. Make no mistake, MERS and its member-banks are taking people’s homes using fraudulent documents and that is something we do not do in America.”

    In addition, O’Brien is zeroing in on the major foreclosure law firms that he believes have acted as a co-conspirator in flooding the registries of deeds with these fraudulent instruments. “These attorneys should know better. They have acted as co-conspirators in perpetrating this fraud. I am sending a letter to the Massachusetts Board of Bar Overseers asking that they conduct an independent investigation into the activities of these firms. Unlike our Massachusetts Attorney General Martha Coakley, I understand that there are other Attorneys General and other public officials across the country who would like nothing better than to sweep this matter under the rug and grant these lenders, loan servicing companies and their foreclosure-mill attorneys immunity for the damage that they have caused, not only to our economy but to people’s property rights. They would be willing to accept pennies on the dollar, a slap on the wrist, and a promise to never do it again. If that should happen, it would be the biggest sellout of the American People that I have ever seen. It would send the wrong message that the big boys can get away with anything. As I have been saying all along, they may think they are too big to fail, but as far as I am concerned, they are not to big to go to jail. The top officials at MERS, its member-banks, servicers and foreclosure-mill attorneys must be prosecuted and held accountable for their fraudulent schemes that brought profits to their institutions by cutting corners, circumventing land recordation systems through fraud, uttering and forgery.”

    Contact: Kevin Harvey 1st Assistant Register

  10. Neil ,

    Did you ever get the document fab business up and running to support this? I understand the basic steps are:

    1.) identify property “in default” but not yet in the legal system .. most likely a property already in a short sale situation.
    2.) verify docs on file with county to determine if the bank has a weak hand.
    3.) offer cash for :
    a.) keys
    b.) quit claim signed by all parties on note/deed
    c.) assignment of litigation rights
    4.) immediately file a QT suit or a Lis Pends, record a lease with a long expiration 1/2/5 years in the name of someone you know (make sure that you have a clause allowing them to sublet..) , record QC , record Assignment of rights…

  11. Neidermeyer great link. Very important link.

    Be Strong and Courageous

  12. Ah, Schneiderman! The man, the man, he’s the man!!!


    (Has that been posted yet, by the way? I don’t remember reading it here…)

  13. And… that grossly inadequate AG settlement that was supposed to be concluded, jeez, wasn’t it in… last July or August?

    It is no more! RIP and bring up the investigations.


  14. Another one for the homeowners…

    Moving on. Next!


  15. enraged ….well said

    neil ya know we all luv ya for exposing this… but sheeeeeesh! its a dis-service to re-propagate propaganda ,
    foreclosure ???…- NOOOO FRAUDULENT conveyance is closer to the truth so…
    retitle it – foregousher “Squatters” Goad Lenders and Stand Pat

  16. Neil, you can’t be for real!

    The essential question that is starting to emerge, although often mistakenly skipped by attorneys, is “where is the money?”

    That’s been the ONLY question from the get go! Where have you been? I don’t get it: I’ve said over and over that, in America, when you want to catch the whoddunit, you “follow the money” as opposed to… France, for example, where you “cherchez la femme” (find the woman).
    This is the American way. Follow the money. Nothing less. Nothing more. It will lead you to the truth any day of the week. “What have you done with my money?”

    “The bottom line is that people are staying in their houses because the banks do not have their crap together and are falling all over themselves.” Wrong. The bottom line is that people are staying in their houses because they were lied to, stole from, cheated on and screwed over and there comes a time in the life of anyone when he has to declare: “Enough is enough”.

    Most nations wouldn’t have showed the patience this country has showed with such an incompetent Congress, such an obvious refusal to ruffle banks feathers and such a callousness in mishandling inequities and unjustice.

    They’ve proved themselves. Now, people are (peacefully) taking over.

    This country doesn’t have enough cops and military to kick everyone out in the street. People are starting to understand it. And anyway, with Congress so adamant that we need to cut, cut, cut, many of those jobs are disappearing as well… So there!

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