ALABAMA Appelate Court Deals Death Blow to Thousands of Foreclosures


COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary CLICK HERE TO GET COMBO TITLE AND SECURITIZATION REPORT

 EDITOR’S NOTE: “Because GMAC Mortgage lacked standing to bring the ejectment action, the trial court never acquired subject-matter jurisdiction over the ejectment action. Accordingly, the judgment of the trial court is void and is hereby vacated. Moreover, because a void judgment will not support an appeal, we dismiss this appeal. Id.

GMAC Mortgage, like BAC in Sturdivant, had not been assigned the mortgage before it initiated foreclosure proceedings. Consequently, under our holding in Sturdivant, GMAC Mortgage lacked authority to foreclose the mortgage when it initiated the foreclosure proceedings,

With those words tens of thousands of foreclosures, if not millions, are cast into doubt and, in Alabama — arguably the most conservative state in the nation, thousands of foreclosures can be overturned after eviction, after the sale at “auction” because if the creditor did not have proof of the sale of the loan (including payment, to complete the transaction, then they couldn’t very well initiate any Notice of Default, Notice of Sale, or submit a “credit bid” at auction, simply because they were not the creditor.

This is why homeowners, investors and banks looking to refinance property that was ever subject to claims of securitization and foreclosure must have the information contained in our COMBO title and Securitization report (see above). That house you think you lost or are in the process of losing or are in the process of buying or are in the process of refinancing needs to have these questions cleared up before anyone can proceed.

Alabama Court of Civil Appeals.
Decided January 20, 2012.

On appeal, the Pattersons assert, among other things, that the trial court erred in determining that the foreclosure was valid. While the Pattersons’ appeal was pending, this court delivered its decision in Sturdivant v. BAC Home Loans, LP, [Ms. 2100245, Dec. 16, 2011] ___ So. 3d ___ (Ala. Civ. App. 2011). In Sturdivant, BAC Home Loans, LP (“BAC”), initiated foreclosure proceedings on the mortgage encumbering Bessie T. Sturdivant’s house before the mortgage had been assigned to BAC. BAC then held a foreclosure sale at which it purchased Sturdivant’s house, and the auctioneer executed a foreclosure deed purporting to convey title to Sturdivant’s house to BAC. BAC was assigned the mortgage the same day as the foreclosure sale. Thereafter, BAC brought an ejectment action against Sturdivant, claiming that it owned title to her house by virtue of the foreclosure deed. After the trial court entered a summary judgment in favor of BAC, Sturdivant appealed to the supreme court, which transferred her appeal to this court. We held that BAC lacked authority to foreclose the mortgage because it had not been assigned the mortgage before it initiated foreclosure proceedings and that, therefore, the foreclosure and the foreclosure deed were invalid. We further held that, because the foreclosure and the foreclosure deed were invalid, BAC did not acquire legal title to Sturdivant’s house through the foreclosure deed and thus BAC did not own an interest in the house when it commenced its ejectment action. We further held that, because BAC did not own any interest in Sturdivant’s house when it commenced its ejectment action, BAC did not have standing to bring that action and, consequently, the trial court never acquired subject-matter jurisdiction over the ejectment action. Because BAC did not have standing to bring its ejectment action and the trial court never acquired jurisdiction over the ejectment action, we held that the judgment of the trial court was void, and we vacated that judgment. Moreover, because a void judgment will not support an appeal, we dismissed the appeal.

In the case now before us, GMAC Mortgage, like BAC in Sturdivant, had not been assigned the mortgage before it initiated foreclosure proceedings. Consequently, under our holding in Sturdivant, GMAC Mortgage lacked authority to foreclose the mortgage when it initiated the foreclosure proceedings, and, therefore, the foreclosure and the foreclosure deed upon which GMAC based it ejectment claim are invalid. Moreover, under our holding in Sturdivant, because GMAC Mortgage did not own any interest in the house, it lacked standing to bring its ejectment action against the Pattersons. Because GMAC Mortgage lacked standing to bring the ejectment action, the trial court never acquired subject-matter jurisdiction over the ejectment action. Accordingly, the judgment of the trial court is void and is hereby vacated. Moreover, because a void judgment will not support an appeal, we dismiss this appeal. Id.


Pittman, Thomas, and Moore, JJ., concur.

Thompson, P.J., concurs in the result, with writing.

Bryan, J., dissents, with writing.

THOMPSON, Presiding Judge, concurring in the result.


44 Responses

  1. […] ALABAMA Appellate Court Deals Death Blow to Thousands of Foreclosures […]


    …………..President, National Association of Bankruptcy Trustees


  3. @E. Tolle – AG’s have , if not must use, the authority to prosecute violations of certain statutes. All? I don’t know. This AG authority is also found in statute, as far as I know, at least I have seen it in statute relevant to two issues. I remember the two “authorizations” specifically, in reference to issues miles apart. There are torts and there are crimes. AG’s don’t prosecute torts, of course. When a citizen brings a crime to the attention of the guy with the authority to prosecute it, must he? Is there some discretion? I don’t know, but it’s an interesting avenue.
    You got a shrug. In 2008, someone I know whom I’ll call “Henry” took a TILA violation and or predatory lending complaint to the AG in his state (there’s my waning memory again) because the statute said its violation was to be prosecuted by the AG; the statute in that state clearly identified the AG as the party to prosecute the violation. A couple weeks later, Henry got a letter from the AG’s office referring him to other state agencies, who in turn referred him to each other.
    If I had known then what I know now, I would have encouraged Henry to cite chapter and verse with the AG’s office for what that might have been worth. But even so, what is the standard of evidence or whatever you must present to the AG to get him to act? “Look here, they did this, and it violates blah blah?” I think when civil courts see a violation of state law, they can (must?) make a referal to the AG, but how often is that actually done? If civil courts aren’t “seeing” these
    state law violations in all this crud (civil court sees argument ‘this doc is bs and does nothing’), it might be that no one is pointing them out.
    Probably should be done a whole lot just now – pointing out the criminal violations to the civil court. I don’t think that should be ( a referal from civil venue) the only way for an individual to get an AG’s attention. I guess we could try citing chapter and verse (including the
    AG’s authority) and sit / lean on them til they act.

    I don’t know if prosecution is discretionary or the law says the AG
    must prosecute. If you look into it, like to hear what you learn if I may.

  4. .
    This is a milestone ruling.

    Finally, the contents of these posts of nearly 1 1/2 years ago have now been vindicated:

    CEA, on July 29, 2010 at 2:04 pm said:

    “It is satisfying to know that the issue of [subject matter] jurisdiction is finally being addressed at the national level. Thank you Neil & Matt. and also taught us long ago that most cases in the courts today result in void judgments.”

    and in

    “The point and fact is that courts do NOT HAVE SMJ. Plaintiffs have to INVOKE SMJ through SUFFICIENCY OF PLEADINGS when filing a complaint.”

    That’s all there is to it.

  5. A law suit currently underway has alleged that a failure to record an assignment, being identified as a “material matter”, violates 205.095.
    This should be interesting.

    This one I really like:

    NRS 205.372 Mortgage lending fraud; penalties; civil action.

    1. A person who is a participant in a mortgage lending transaction and who:

    ……. (e) Files or causes to be filed with a county recorder any document that the person knows to include a misstatement, misrepresentation or omission concerning a material fact,*

    commits the offense of mortgage lending fraud which is a category C felony and, upon conviction, shall be punished by imprisonment in the state prison for a minimum term of not less than 1 year and a maximum term of not more than 10 years, or by a fine of not more than $10,000, or by both fine and imprisonment.

    The only question as to this one’s application is are these banksters
    “participants” in a mortgage lending “transaction”. Mr. G certainly thinks they are.

    *self-assignment is bogus in the first place, plus they allege to assign the note in all those assignments.

    zurenarhh, you might want to look up “statement against interest” to see if it’ll be of any value to you.

  6. color me a dummy, but I didnt’ get it that putting one’s autograph on a false instrument ( no right to sign what one’s signing, stating a falsehood in the doc) constitutes forgery in addtion to what else we can find. I know it’s a crime to record a false instrument. It’s also a crime to keep false records in private books (!) That last ones probably relevant to money laundering and rico.

  7. hey, zurenarrh, how about this (in your state):

    NRS 205.090 Forgery of conveyances, negotiable instruments, stock certificates, wills and other instruments; utterance of forged instrument.

    A person who falsely makes, alters, forges or counterfeits any record, or other authentic matter of a public nature, or….note…..
    with the intent to damage or defraud any person, body politic or corporate, whether the person, body politic or corporate, resides in or belongs to this State or not, or utters, publishes, passes or attempts to pass, as true and genuine, any of the above-named false, altered, forged or counterfeited matters, as above specified and described, knowing it to be false, altered, forged or counterfeited with the intent to prejudice, damage or defraud any person, body politic or corporate, whether the person, body politic or corporate, resides in this State or not, is guilty of forgery, and shall be punished for a category D felony as provided in NRS 193.130. In addition to any other penalty, the court shall order the person to pay restitution.”

    NRS 205.095 Other acts constituting forgery. Every person who, with intent to injure or defraud, shall:

    1. Make any false entry in any public record or account;

    2. Fail to make a true entry of any material matter in any public record or account; or

    3. Forge any letter or written communication or copy or purported copy thereof,

    this part’s for carie:

    OR send or deliver, or connive at the sending or delivery of any false or fictitious telegraph message (?) or copy or purported copy thereof, whereby or wherein the sentiments, opinions, conduct, character, purpose, property, interests or rights of any person shall be misrepresented or may be injuriously affected, or knowing any such LETTER, communication or message or any copy or purported copy thereof to be false, shall utter or publish the same or any copy or purported copy thereof as true,

    Ê shall be guilty of forgery and be punished as provided in NRS 205.090.

    I listed another one under a diff post from today fyi. These guys are guilty of all kinds of stuff. We just need to put it in the judge’s face imo.

  8. @tony

    Unfortunately, that doesn’t work in California…

  9. dang, zurenarhh – if the attorney represented he was rep’ing MERS to the court, but isn’t, that strikes me as pretty serious. It’s certainly an ethics violation. I don’t even know what you’d try looking that up under. But I do think it’s no small deal, even if your court is acting like it is. (Sometimes courts make us make every argument or allegation ourselves, but don’t I recall that judges have a duty to report unethical conduct themselves to the bar? Pretty sure I do.) Something like that is probably actionable itself. I’d sure look into it. Besides ethics, the word canons comes to mind. Oh, I know: used to be called canons of ethics. Now called code of professional responsibility. Liked the old name better. But that is prob only for ethics breach and not whatever else such a gross misrepresentation is. *&^%!@#,! These guys just do anything, anything at all they want. It’s just about unbelieveable.

  10. Its funny how the court dismissed this case for lack of subject matter jurisdiction. Like I said before this is the way to get a case dismissed. Always fight the court over jurisdiction.

  11. IF (when) the S hits the fan and lenders may no longer hide behind MERS, what do we suppose the owners of MERS will do? MERS probably doesn’t have one stinking asset. It is owned by Merscorp. Inc, which probably has minimal assets. I think MERScorp’s interest extends to the database in its own right, not just by way of owning MERS. Hmmm… I just think MERS knows this is coming, so am trying to anticipate what that’s going to look like. Won’t be able to sue them – prob nothing to get and those good folks prob don’t even have any kind of insurance. Pierce corp veil? Even if we could, the real officers have almost assuredly made themselves bullet-proof by now. R.K. Arnold probably got off his yacht in the Bahamas long enough to make a final deposit a year or so ago. I sure hate to say this, but other than by criminal charges, MERS may never pay. But get your suits lined up anyway because the officers will become hard to find in a hurry (no depo’s, no nada).
    Okay, so moving right along. What else? If and when the S hits that fan, what will become of “MERS” and its infamous database? Will the banksters make a rush for possession? Is a plan to sell it outright to the banksters already underway, or worse, a done deal?
    That database needs to be commandeered yesterday. Or does it?
    Take MERS out of the picture instead and start thinking about who’s going to execute assignments previously done under its cover? With MERS gone, what all changes? Nothing should change if laws had been followed, both in practice and adjudications , but they weren’t, so what changes? I go for the commandeer the database yesterday. That’s what happens to criminal enterprises, right? If all of us filed suit against MERS and forced the attorneys to prove they represent MERS and each of us got one other person to do the same, I bet we could hasten their adieu. Someone make a template! We get asked to make phone calls or write or whatever here about this and that, right? so I’ll throw this in: If you do so, please add that you want
    MERS’ database commandeered.

  12. Also–johngault, you said: “And by the way, 1000 to 1, MERS doesn’t even know your bankster is taking action in a court in its name…”

    They admitted that too.

  13. Thanks for the information, johngault. That’s good stuff!

  14. zurenarhh – you may have a pretty big stick over MERS and thus your bankster. The bankster does not want you going after MERS, trust me. How big depends on what you come up with on false documents, pretending to have an interest, etc. that you can find in your state laws. There are statutes which provide for pretty big awards, some treble damages if you successfully tie the act done to the statute. Start threatening to nail MERS (no, not pretender hiding behind Mers, MERS – Roanoke, VA – try Sharon Horstcamp.) for all there is to nail them for and this might be a new ball game. In the scheme of this big stick issue, a minor irritation to banksters is if MERS feels like enforcing its agreement (yeah, right, usually), it can fine the bankster up to 10k per ‘infraction’, think it is.

    And by the way, 1000 to 1, MERS doesn’t even know your bankster
    is taking action in a court in its name, unless mers has changed this, too, since its consent order, so the first time they will know about this admission is when YOU tell them right after some time spent looking at your state statutes. MERS by any wholecloth argument in the world has no interest in the note – nothing they purport to do as to the note is based in any contract with you, which means a law like this might apply imo:
    “NRS 42.005 Exemplary and punitive damages: In general; limitations on amount of award; determination in subsequent proceeding.

    1. Except as otherwise provided in NRS 42.007, in an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud or malice, express or implied, the plaintiff, in addition to the compensatory damages, may recover damages for the sake of example and by way of punishing the defendant. Except as otherwise provided in this section or by specific statute, an award of exemplary or punitive damages made pursuant to this section may not exceed:

    (a) Three times the amount of compensatory damages awarded to the plaintiff if the amount of compensatory damages is $100,000 or more; or

    (b) Three hundred thousand dollars if the amount of compensatory damages awarded to the plaintiff is less than $100,000……..”

    But what obligation, you say, did MERS have to you that they breached? Haave to look at, scour your state laws. You’ll come up withh some. Even if this path – the recited statute above – strikes out, there are others found in other state laws – just have to look for them. I rattled that off because I had it handy.

  15. Hey, in case anyone was reading my comment on confessing judgment to an unsecured creditor, it might be that the action has to be taken in a court by suit and a consent judgment would not work. I don’t know. Be worth it to people with tons of unsecured debt and no recorded assignment to find out, though, keeping in mind that there may be other statutes in play which either do or don’t support the need for a suit-to-judgment.

  16. johngault

    And this bit in the Article 9 regarding the “sworn affidavit” by the “secured party” – “stating that default has occurred”. So who has recorded the NOD to who and what does it say? Who are you supposed to call to find out how much you owe? Not the “secured party”. Where is the “sworn affidavit” that a default occurred to the “secured party” by the “secured party”? How much is owed him today?

  17. @jg

    I will weigh in later on that…in bit of a fog from medication for ear infection/strep throat medication…
    but—wanted to share—I just got the original re-recorded Grant Deed (I recorded it AFTER “their” Trustee’s Deed Upon Sale was recorded), in the mail from the recorder’s office today.
    All I did was change our names to ALL CAPS (lawful). How can “they” get title insurance with that in the chain?

  18. @john gault they can’t go after folks for the deficiency or debt forgiveness because there is none. The seller bank is cashing in on the swaps and synthetic swap bets. They are not claiming it as income on their balance sheet at corporate rate. they claim it as investment income so they do not have to forward to the pool investors.

    They make it as if they are doing the homeowners a favor when it is to their benefit. My favorite is still; We will limit the pay of the officers of the TARP loans, until the Fed can ramp up the legacy program and they can use cheaper facilities to pay back TARP and start taking homes. Have to find the name of the banker back in the 30’s that said; Get it back… get the house back as quickly as possible.

  19. @johngault:

    “The security agreement” (transferring an interest in the note) ? I don’t know what that would be. what?”

    Two things are required when “In some states, a party without a recorded interest in a mortgage may not enforce the mortgage non-judicially”:

    “(i)a copy of the security agreement transferring an interest in the note to the secured party and

    (ii)the secured party’s sworn affidavit in recordable form stating that default has occurred and that the secured party is entitled to enforce the mortgage non judicially”

    When I first read that I thought it meant the copy of the wet ink note with all endorsements should be recorded but Ron Ryan’s letter to AZ AG posted by Neil (see quotes from this below) says “Neither the Note nor the DOT qualifies as this writing” So I wonder is it the Mortgage Loan Purchase Agreement signed by Depositor and the Mortgage Loan Purchase Schedule signed by Depositor???? Or the PSA???? Aren’t these the “The security agreement”? (also “intentionally omitted” from the SEC files?) Have no idea….

    But the second requirement for the sworn affidavit is important (without perjury – supreme fabrication).

    In the letter to the AZ AG posted on livinglies “UCC Article 9 Explained…” Ron Ryan said:

    “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 NONJUDICIAL FORECLOSURE STATES. The Claimant cannot record the necessary documents, including the required affidavit, without perjury, unless it purchased the loan and security interest from the party that owned it. By the application of legal reasoning, the Claimant seeking to foreclose must have evidence and a good faith belief that it has knowledge fo the entire chain of ownership of the loan all the way back to the loan Originator (“Lender” in the DOT). They must be able to provide the information and their evidence to support their belief if challenged in a Court proceeding.”………

    “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”….

    Of particular importance to the foreclose non-judicially is the “security agreement” referred to in § 47-9607(b), governing the ability to hold a non-judicial foreclosure. By following the definitions in the above cited provisions, the “security agreement” is a writing between the seller and buyer that details that there was in fact a sale of the Loan that included the DOT rights. Neither the Note nor the DOT qualifies as this writing. There must be a separate and special writing. Furthermore, in there must be an affidavit by the party seeking to foreclosure non-judicially. 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. See U.S. Natl. Bank Assn., Trustee, v. Ibanez, For ABFC 2005-0PT 1 Trust, ABFC Structured Asset Securities Pass-Through Certificates, Series 2005-0PT 1, No. SJC 10694, (Mass.S.Ct. 2011)(decided together with another consolidated case, LaRace)(sometimes referred to herein as Ibanez).”

  20. @joann – re: your comment at 3:08, see my post re protection of one class at the expense of another at sourceoftitle. That’s sure as hey how I see it. No one wants to deal with those tax consequences to the investors. They may think it’s not entirely unfair because on info & belief, the IRS isn’t sticking it to the homeowner for debt relief, either.
    But what such a lousy, for lack of better word, view of fairness ignores is that, for one, homes are being taken in a manner which is most accurately described as theft. I’d rather pay the tax on debt forgiveness if it ever came to that (which it probably wouldn’t).

  21. @joann – re: trusts not mentioned in refi’s. You’re just full of good insights. People with title commitments / policies from those days could tell us. Who’s listed as needing to be paid off? See requirement page of title commitment. And significantly, WHO issued the reconveyance (which some people refer to as a ‘release’) of the old deed of trust, I do so wonder.
    Anonymous, carie, where you hiding? What do your title documents say? At least one of you never saw a reconveyance after ‘pay off’, as I recall, when you refi’d.
    But, dang, original loan probably showed MERS on dot. But still , I wonder who executed the reconveyance. MERS (read servicer)? Those titles are really messed up. You sure can’t reconvey the collateral if you have no interest in the debt it secures. Strikes me as just plain criminal.

  22. @ joann, unfortunately AG’s are also elected and at the mercy of the party. Look no further than Newt Gingrich to see who has been siphoning money off this scheme to defraud for years.

    They are all one and the same. The judges are smarter than you think. Most turned a blind eye because they are invested in some of the companies being investigated. Second, many of the bank (if you will) attorney’s have practiced before these guys for years. They all swap spit while burning an owl out in CA.

    Actually, the Judge does not want to pit a pro se / per se homeowner against one of their friends, so I found it is best to get an attorney who bills by the hour to go in and you do the research.

    Don’t ever let them withdraw their case without suing the law firm, servicer, investor, fdic, fannie and freddie, if applicable and most important file suit against the attorney that was standing across the table so these guys start to get it too.

  23. @johngault, I spoke (in person) to my AG’s deputy about a recordation filing that is fraudulent, and he simply shrugged his shoulders. It’s against another attorney in town at the mill. I guess they’re a brotherhood.

  24. @Johngault,

    Your 726 makes a lot of sense and, when you think about it, it’s like a “reverse” HELOC. Inother words, we are using exactly what the banks did to get money out of us. Except that now, the bank has to pay back.

    I think it’s brilliant! And it would banks well for having sold “reverse” mortgages to unsuspecting elderly who didn’t have a clue what they were in for.

  25. iwantmynpv

    Thanks excellent explanation – it’s just that when you put a single individual case together to defend your individual home – trying to get the judge to go from a to z you have to start from what is in front of him and work backward (all the way to who funded it at origination) and compel the documents (no assignments or endorsements because no conveyance) and the accounting money trail from who to who when – it is especially difficult in some states. Not a reason to give up even there though especially not now. Even in non judicial judges are starting to get it on appeal it seems.

    There are always two conversations going on at the same time. What is the reality and what part of it do you need to get across to the judge and when in order to acheive an individual objective.

    “The Notes never left the Seller Bank, and they never intended for them to leave the seller bank. They hold the assets on their books and leverage them to the hilt, through the swaps. they make the real money on the synthetic swaps.” Exactly. Now how to get that accross to AG’s? Mainstream? 99%? Govt? Judges? Different strokes. I cotinue to think we should try any way we can. Already have too much salt in the wounds…

  26. johngault–

    I totally feel you. My case is now in its 3rd year and it has been almost a year since the MSJ was filed–still undecided. The trial has been postponed once already and is soon going to be postponed again. All over one of these fraudulent assignments, which, as I said, MERS has now admitted in no uncertain terms that it couldn’t do what it said it did.

    Yet here we are…we shall go on to the end. Resistance is victory. And I enjoyed your “jealousy day” post yesterday. I know exactly what you mean!

  27. joann – what such buyer or secured creditor?

  28. from joann:
    ……enforce a mortgage non-judicially,” the secured party may record in the office in which the mortgage is recorded

    (i)a copy of the security agreement transferring an interest in the note to the secured party ……..

    jg: “The security agreement” (transferring an interest in the note) ? I don’t know what that would be. what?

  29. zurenarhh: if that is true, then surely you of all people would be interested in your state laws against recordation of a false instrument and other laws, remedies, and consequences thereto?
    I can’t just record a doc against your home granting an interest to myself – especially when I tried to have it relied on in any manner- and then say “oops! or psche! it didn’t really grant me any interest.” What would you do to me if I recorded such a false instrument in my favor and you found out I was trying to get a loan on my alleged interest? Or what if I had gotten a loan on my alleged interest? What would you do? Let me say oops or psyche? What if you had to pay an attorney to defend against that false instrument or even if you had to miss work doing it yourself or missed a 50th anniversary party and three birthday parties and a trip to tahiti? What if you hocked your car to
    miss work to stay home and deal with it? If one has no interest, one has no interest and the fact that their name is mentioned somewhere in the lending world, unlike mine, say, changes nothing.

  30. You guys miss it entirely. The Notes never left the Seller Bank, and they never intended for them to leave the seller bank. They hold the assets on their books and leverage them to the hilt, through the swaps. they make the real money on the synthetic swaps.

    Forget the PSA, Prospectus and Supplemental Prospectus for one moment. Yes, they all do clearly indicate that the donor/seller bank is the only entity that can convey the “pooled” loans to the Trust. This what everyone looks past, Delaware and NY Trust law is explicit about the time in which any assets must be conveyed to any trust. So, whether is is grandma sschmeigel leaving it for the rotten greedy grand-kids or he BAC SPV, the law is the same 90 days. That is why the cut off date and closing date for every pool is 90 days. These guys don’t care about a couple loans, that are frightened that the public demand they pay the taxes at the alleged trust level since they are no longer REMIC qualified.

    Moreover, we talk about originators as if New Century and Option One originated the loans, these smaller sub-prime banks operated as agents for the Originators of the trust and did nothing more than market and underwrite files (however poorly) for the actual originators. They were paid handsomely but made nothing in comparison to the next couple banks up the chain.

    Remember, the Notes never get conveyed, not even to Freddie or Fannie. Now, more important,are we going to give Newt Gingrich a pass on this crap about being a consultant to the former GSE. This is the proverbial salt in the wound.

  31. I sure don’t want to convey bad info. It certainly appears to me that the
    plain language of the statute would include interests received by way of assignment, not just flowing from the original deed of trust. I feel pretty good that it does. The reason I do is because this law and ones like it are the reason – lack of notice – debtors in possession and C-11 and C-7 trustees may avoid the lien of a claimant where it’s interest is dependant on an assignment and the assignment has not been recorded (no notice).

  32. @joann – that’s interesting, that 726 in CA. It is saying if you have an interest in my house but you have not recorded it, and Joe Brown gets a judgment against me, it is against your interest, also. Joe did not have to name you in the suit against me or even tell you about it to get that. The reason is because by your failure to record your interest, Joe had no Notice of it, and therefore was not bound to it. By my reading of this statute, Joe doesn’t even have to record his judgment to be ahead of you (and that’s pretty huge itself). Not sure;
    people should record. It’s all about Notice and this sure as heck proves it.
    No recorded assignment on your home and your other bills killing you? Cut a deal with your unsecured creditors. Confess a judgment (or several) with a reduced payoff on the debt and or easier terms and get that sucker recorded or at least something which leads to a duty of inquiry by the bankster et al.

    “I’ll take you, credit card holder, from an unsecured creditor on this 25k I owe you to a secured creditor on 10k at 5% by way of a judgment, otherwise I’m advised bk is my best bet, and by the way, I need our agreement to include that you will report my credit as “paid as agreed and nothing but when I make these payments as now agreed ” (and this should be okay because that WILL be the new agreement) and it needs to be binding on your successors and or assigns). They may make you agree to reconfirm the 10k if you do end up filing bk. Don’t know that that’s enforceable, tho. Probably not.
    The bankster will have to pay off the 10k to get to his interest in your home, and that is only after proper recordation of his interest (the assignment). They won’t like that at all because someone is going to have to actually part witih some money, and that’s not in their m.o. They already have to do this with the IRS generally, but the IRS has to do certain things when foreclosure is involved. You can eliminate those certain things by confessing judgement (with favorable terms)and you might want to hire someone to do an offer in compromise first. If it’s enough money, the bankster may not mess with it at all.

    Don’t do this without an attorney, but good luck getting one to get it.
    If more attorneys got it, it would be happening a lot just now. You win –
    pay off some debt you actually owe, creditors you would have bk’d but now because of the badly needed reduction in monthly outlay get some of their money, if bankster forecloses anyway, they have to pay that now secured debt which is ahead of their undisclosed interest.
    This is great. Check you state. Croak if it’s not the same because it’s all about Notice.

    Filing bk will not protect people from the IRS but you can see to it that when your home is snarfed, your IRS and other debt goes with it when there is no assignment of the deed of trust because the bankster will have to pay it. That’s my take on the consequences of that statute.

    I’m not an attorney and this is not legal advice. But, dang Jim, wish we’d known this before so many of our homes were snarfed.

  33. johngault

    Here is a question I wanted to ask you or anyone else that might have the answer.

    Why is it that when a securitized mortgage – as almost all were for the last 10 years or so – was refinanced into another securitized mortgage – for the sake of the question assume 2003 or 4 or 5 was refied in 2006 or 7 or 8 – the securitized trust is not mentioned anywhere in the refi – there’s no assignment – no refi from trust to new “lender”. The substitution of trustee happens as always done (Neil gives good reasons for this) in every “new” mortgage transaction for the last 10 years or so and in foreclosures but the trust only gets named in any recorded documents when there is a foreclosure – never in a refi?

  34. @johngault:

    “And get your resume ready for a recorder’s office,also”

    You read my mind. Massive nationwide job training program for the unemployed paid for by “banks” “banksters” or the 1% as the case may be. Emergency assistance job corps. Real property land registers in the heart land were attacked by alien invaders.

  35. And get your resume ready for a recorder’s office,also.

  36. joann raised a very, in fact hugely significant and dispositive fact: the assignment to the sec’n trust of the deed of trust must come from the Depositor, who is likely not a mers member. Assignment to ‘not-mers-member’ triggers mers rule for assignment of deed of trust to that non-member (Depositor) and must 86 loan from MERs database = MERS is toast and may not do anything at all, like authorize a mers-member to assign the dot in its name to the pretender or even to anyone who actually is a bona fide noteholder. (If anyone in the act were not a MERS member, that was the end of MERS).

    Assignments under cover of MERS imo are soon to be a thing of the past. People need to get ready and courts should be taking resumes for qualified personnel.
    The foreseeable upcoming loss of “MERS” to provide cover is why the banksters want the dot to follow the note, which it doesn’t as seen in this decision and will soon be found to be the rule of law. It’s already the rule of law; it just hasn’t been universally ‘found’ yet. (Although if a dot did follow a note, and the note were owned by the Depositor or another non-member along the way, MERS even by its own rules, is toast.)
    If courts are making decisions against us, is there any possibility it’s because we might be skipping some crucial issues, such as this one?

  37. @Phred:

    “Then the judges came along with an inane decision that loans with deeds of trust don’t even HAVE to be recorded.”

    Ok anyone just trying this out as usual:

    First bankster attorneys like to quote these but there is a flip side…

    CA Civil Code section 2934 states: “Any assignment of a mortgage and any assignment of the beneficial interest under a Deed of Trust may be recorded ….” May being the keyword….

    Government Code section 27280 states: “(a) Any instrument or judgment affecting the title to or possession of real property may be recorded pursuant to this chapter.” Again may…


    CA Civil Procedure section 726(c) states:
    (c) No person holding a conveyance from or under the mortgagor of real property …, or having a lien thereon, which conveyance or lien does not appear of record in the proper office at the time of the commencement of the action need be made a party to the action, and the judgment therein rendered, … are as conclusive against the person holding the unrecorded conveyance or lien as if the person had been a party to the action.

    If the sale/assignment from the originator/sponsor/seller to the depositor to the trust was never recorded, the lien that it represents is no longer in a priority position. The new assignment now takes priority and voids the prior lien that was never recorded.

    The new lien says nothing about “memorializing” “backdating” the prior sale and assignment from abcd. On it’s face it is a new sale: “For Value Received” and assignment is only now being made from the originator/purported successor originator directly to the trust (impossible by the rules of the trust agreements, sec and irs anyway).

    It wipes out the history of the trust owning the mortgage prior to this new “sale” purchase for value. It also wipes out any tax benefits they received and the destination of the homeowner payments from day one is now also in question.

    The PSA states (just one sample):

    “Recordation of Agreement. To the extent permitted by applicable law, this Agreement is subject to recordation in all appropriate public offices for real property records in all the counties or the comparable jurisdictions in which any Mortgaged Property is situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Company and at its expense on direction by the Trustee, but only upon direction accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interests of the Certificateholders.”

    The servicer debt collector has just nullified the interest of the certificateholders by making this bogus assignment and the “Counsel” did not uphold the interests of the certificateholders and instead allowed their interest to be forfeited.

    Wondering why there is no fuss from investors about this – thinking there is no more interest anyway that can be forfeited. It’s already been paid off or written off or released or satisfied ect. and the servicer debt collector is collecting on the full amount plus penalties, fees, foreclosure mill add ons ect and just hi jacking the name of the trust so he can get away with it.

  38. @phred – could you point me to something in CA which says assignments may be back-dated, even a case. Maybe they can, but I wouldn’t know why. I would really like to see some more reference. It’s very important for us to understand why the law / a court says back-dating is okay.
    Got anything?

  39. @phred – assignments of deeds of trust don’t have to be recorded in probably most if not all states. It’s found in state statutes* That is really not news. But it’s also not news that the assignments must be recorded to enforce. That is the distinction rampantly being ignored. What makes it so confusing is that these rules are not listed together in state statutes (and pretenders are quick to cite the first one, while the homeowner isn’t even aware of the second). It comes down to Notice of that interest by way of the assignment.
    No notice = no right to enforce.

    Further, no notice = interest not protected from other borrower creditors. That’s a fact and this is found in state statutes, also. The only ones generally taking advantage of this one are chapter 11 debtors-in-possession and the C-11 trustee under bona fide purchaser without NOTICE rules ( C-7 trustees may exercise this right, also). An unrecorded interest may be avoided by other creditors of the borrower. That’s a fact.

    *This stands in conflict with certain actions being undertaken just now
    by some recorders offices. Those recorders want the monies they feel is due on assignments which were not recorded. Honestly, I don’t know if money is due on the assignment itself or just upon its recordation. (though to establish a legitimate chain of title, they must all ultimately be recorded (notice, notice, notice) for enforcement and they must then pay the recorder for all of them)
    In order for the recorders to prevail if the answer is the money is due on the assignment, recorded or not, they will have to first establish that the assignments had to be done, even if not recorded concurrently, which is where I have always stood. They must all have been executed. MERS didn’t just purport to be the public-record placeholder to avoid recordation fees, the truth is, MERS stands for the proposition assignments didn’t need to be done at all, except since its Consent Order, to the “end user”. Imo this proposition when taken literally comes from a horrific misunderstanding of real property laws on the part of MERS and theoretically it’s attorneys. Either that, or it was by design to accomplish that which they’ve accomplished. “Foreclosure Under Cover of”. Those are really the only two choices.
    I suppose it could be found or is just simply true that the deed of trust itself doesn’t have to be recorded, but this is at the very significant peril of the party who chooses to not record. There is no Notice of that interest (other than to the guy who granted it) so no protection against other subsequent secured creditors or unsecured creditors who get and attach judgment liens.

  40. @Phred:

    “Yet in California the laws were changed to allow back-dating of the ‘effective date’ of an assignment”

    Backdated or not the only party who can assign or sell a mortgage to a trust is the “Depositor” clearly identified as such in the PSA (and trust is now identified in the assignment made by the servicer pretender successor originator and this is not hard to find on SEC site using the name of the trust). Originator can’t assign anything – he sold it and assigned it to the Depositor (purportedly) years ago and servicer pretender successor originators can’t sell or assign anything either. Depositor would not sell or assign to a trust years later and would not backdate or face serious consequences. Even in CA the secured party (pruportedly now the trust represented by the trustee bank that has now received an “assignment” of beneficial interest from the servicer pretender successor originator) has to record evidence of their secured interest. It isn’t being done. It must be challenged by the Plaintiff.

    From the “Draft Report of the PEB 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”:

    “Article 9 of the UCC provides such a buyer or secured creditor a mechanism by which it can record its interest in the realty records in order to conduct a non-judicial foreclosure. UCC Section 9-607(b) provides that “if necessary to enable a secured party [including the buyer of a mortgage note] to exercise…the right of [its transferor] to enforce a mortgage non-judicially,” the secured party may record in the office in which the mortgage is recorded (i)a copy of the security agreement transferring an interest in the note to the secured party and (ii)the secured party’s sworn affidavit in recordable form stating that default has occurred and that the secured party is entitled to enforce the mortgage non judicially”

  41. CA. is a state that has little regard for the Constitution or the Democratic principles we struggle to hold onto. Most of our elected officials do not hear the people and as PUBLIC SERVANTS have no regard for what that position actually means to all our “legal” citizens. People committing fraud, theft, tax evasion, forgery, etc…in any civilized/decent society would be punished accordingly.

    CA. is rampant with legislative process run amok, while banksters and illegal squatters, get the benefit of taxpayers hard-earned money and produce little to nothing in the way of benefits to the CA. economy. It is a drain on every taxpayer/citizen in this country and the reality of the situation is, we need to demand this change, not just request it!

  42. Most of us, if not ALL of us, have assignments that were recorded but DID NOT actually assign anything. I know I do–MERS openly admitted that fact in my case

  43. This is the GOOD kind of conservatism–the kind in which the laws are upheld!

  44. Yet in California the laws were changed to allow back-dating of the ‘effective date’ of an assignment. Then the judges came along with an inane decision that loans with deeds of trust don’t even HAVE to be recorded. In many ways California has slipped past Alabama in becoming a third world state.

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