WHO OWNS THE MORTGAGE?

MOST POPULAR ARTICLES

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

SERVICE 520-405-1688
John Kevin Kennedy was an engineer at Anheuser Busch for 30 years. Then came the sale to InBev, and the big downsizing at the brewery left Kennedy out on the street along with much of his department.

With no job, he asked his mortgage lender for a lower payment on his home in Barnhart.

What happened next set in motion a lawsuit challenging the way foreclosures are done in Missouri. By raising questions about which lender actually owns the mortgages, the suit claims certain foreclosures weren’t properly done and it asks the courts to give “hundreds, even thousands” of Missourians their foreclosed homes back.

Kennedy’s is part of a broader legal movement nationwide challenging the foreclosure process, which debtors say is slanted against them.

“We’ll put an end to this,” vowed lawyer Stanley Wallach of the Wallach Law Firm in Creve Coeur. “The capes-and-crusaders mode . . . is to put this back on a level playing field.

Kennedy says Bank of America agreed to reduce his mortgage payment to $624 from $823, and that he made the lower payments through 2009 and 2010. Such modifications are often done on a trial basis pending a permanent decision.

So, he was shocked when the sheriff arrived with a notice that the bank was starting the foreclosure process.

Kennedy called the bank. “I kept getting the runaround. I probably logged 100 to 150 hours on this cellphone,” he said.

In Missouri, lenders can foreclose without a judge’s order. Unless the homeowner files suit to stop it, the house can be sold at a foreclosure sale on the mortgage holder’s word alone. People who can’t pay their mortgages usually can’t afford lawyers, so foreclosures almost always go unchallenged. In Illinois, court approval is required before a foreclosure.

But Kennedy, 62, had something that most troubled homeowners don’t – money in a 401(k) retirement plan. He used it to hire lawyer Greg White, who specializes in fighting foreclosures.

White teamed up with three other law firms to file a lawsuit challenging the state’s foreclosure system. They hope to convert the case into a class-action suit.

A Bank of America spokeswoman said the bank hasn’t yet seen the suit and wouldn’t comment. An attorney at Kozeny & McCubbin, a creditors’ law firm also named a defendant, also declined to comment.

At the heart of the challenge is MERS, the Mortgage Electronic Registration System. It is the mortgage industry’s system for tracking ownership of perhaps 60 million mortgages.

These days, lenders that make mortgages sell them off to Fannie Mae, Freddie Mac or other large operators. There, many mortgages from many states are packaged into securities. Shares in those securities are sold to multiple investors. In the process, the ownership of a particular mortgage can change several times.

For example, Kennedy’s $86,500 mortgage was made by Quick Loans. But he ended up making payments to Bank of America.

Across the country, however, homeowners lawyers claim MERS muddies the legal ownership of loans.

As a result, the lawyers say, lenders trying to foreclose on homeowners often can’t prove that they own the mortgage in question.

“They were pretty sloppy on the way they did it,” said White, Kennedy’s lawyer. MERS is “an end run around the records requirements,” he says.

WHO OWNS THE MORTGAGE?

With millions of mortgages being mixed into thousands of securities, the industry faced a problem in keeping track of who owned what loan, who had the job of collecting payments, and who had the right to foreclose.

The industry’s solution was MERS, formed in 1995. Not only did it ease record keeping, but it was supposed to simplify legal requirements that changes in mortgage ownership be recorded at local courthouses.

The idea was that MERS would represent all its member lenders. The “deeds of trust,” mortgage ownership documents that let the holder foreclose, would all be recorded just once in MERS name, no matter how often the loans changed hands. As a result, MERS shows up in public records as the holder of claims on property, although it doesn’t really own the loans.

The system held up well, until the Great Recession brought on a landslide of foreclosures.

Wilson Freyermuth, law professor at the University of Missouri and an authority on real estate law, says the MERS system in theory seems compatible with the law.

“There’s not necessarily a legal problem with the structure of MERS,” says the professor, who is not involved in the case. “All MERS was originally intended to do was to serve as an agent for the actual owner of the loan.”

Lenders could trade mortgages among themselves without filing papers at the courthouse, as long as they were members of MERS. Or that was the idea.

But MERS produced a field day for homeowners’ lawyers around the country.

Challenges are underway in several states, and judges have gone both ways on the issue. For instance, the California Supreme Court upheld the MERS system, and the U.S. Supreme Court declined to review it. But last August, a judge in Massachusetts let a woman keep her home, after Deutsche Bank tried to foreclose. MERS, not Deutsche Bank, actually held the mortgage, he ruled.

The law on real estate ownership is quite technical, opening the door to technical challenges. In some Missouri suits, homeowners lawyers claim that legal paperwork needed to transfer loans was never actually done within the MERS system, so lenders claim to own loans they actually don’t.

The MERS system is also entangled in the so-called “robo-signing” scandal, in which employees of mortgage servicing operations and law firms swore to the accuracy of loan ownership records that they hadn’t checked.

Kennedy’s challenge claims that Bank of America can’t foreclose because MERS is recorded as the owner of the mortgage. The Kozeny & McCubbin law firm is a defendant because it handled the foreclosure.

Though the bank foreclosed on his home, Kennedy still lives at the house while the two sides face off in court.

“Hundreds, even thousands,” of Missouri families may have lost homes under similar circumstances, the suit says. The suit asks the court to give them the houses back. The law suit, filed in November, is in its beginning stages.

Read more: http://www.stltoday.com/business/local/suits-challenge-missouri-foreclosure-law/article_e2cb9724-4784-11e1-8c48-0019bb30f31a.html#ixzz1lBhK0V00

52 Responses

  1. @ chris

    I’m so sorry to hear about the loss of Malibu. I’ve had dogs all my life but always small dogs. Almost four years ago we added a black lab rescue puppy to our already two small dog family. I have to tell you she is one of the best dogs I’ve ever had…not that I don’t love them all. Wish I could somehow rescue all dogs and kids from horrible environments they are stuck in. But then I would just end up one of those animal horders that even though the intent was good the result is bad. Please post when you get the new puppy! It is a nice refresher from all the awful news.

  2. @ Katheryn

    Seems to me ranting and venting helps. You’re okay, I really, really get it.

    This behavior is as you pointed out unconscionable, disgraceful, vile and treason against human kind-the largest in the history of the civilized word, in my humble opinion. From where I sit every entity is selling us out. You are right, what the hell has become of OUR country?

    Footnote: Getting a white lab puppy in 2 weeks…my baby Labrador Malibu, passed away. Crazy, but a loss that I will never get over.

  3. @ chris

    This wide scope fraud, and we always knew it was massive, but as more rocks are lifted through the hard work and efforts by all of us, the more massive it becomes. With each day as more and more join the fight against this treason of massive theft, opression and violation of our basic civil rights, the more betrayal and collusion we uncover by very same people and agencies we pay with the sweat of our hard work and tax dollars for our protection. It is unconsionable as well as nauseating to see those politicians, who get enormous salaries for life,the best health coverage for life, perks, pay to work only a few months a year; go on TV and spout their SHEEPLE rehtoric that unions must go, school teachers, firefigthers and police need to make less money, the poor need to pull their weight and pay more taxes, the middle class should feel obligated to do their part and sacrifice…and, oh, by the way, we the elite politicians and 1% need a just a bit more of a tax break and, please, just a few more loopholes so we can keep our off shore accounts pumped up. And as our fine candidate, Obamrhey, Mr. ” issues” flipper, stands up with glee as he is endorsed by the money making egotistical ass; donald trump. Yea..that’s a guy to mold oneself after. His form of entertainment and money making is going around firing people on his silly reality TV show. My God, what has this country become. And people actually watch this trash. Maybe that’s part of the problem, if they spent less time watching realty TV and concentrated on what is going on that will affect them, we could get more people on board our ship. It is way past time for the 1% to make their demands known, refuse to be placated with a mediocure pretense of justice and flatly refuse to negotiate with white collar criminals. The US does not negotiate with foreign terrorists, but yet our own citizens are being terrorized from within and they are allowing the terrorists to call the shots and steal the very roofs over our heads. People, unlike us that have chosen to take a stand, need to pull their heads out of the sand and ask “WTF” happened to MY country????? I read the few posts here and there that brave to publically spout the enemy rehtoric and you know that there are masses behind them that still have their head’s buried who refuse to look around and see the truth. It goes to show as it has been throughout history, too many people blindly follows even when it leads nowhere but to their own demise. Who can figure. Sorry Chris, I am done ranting now!

  4. @ Katheryn

    In Federal Court, right now in the discovery process, Ha, Ha, Ha…

    I am looking under every rock, to include filing suit against the AG’s if needed. No attorney, to include the AG, in my humble opinion, should be making deals with Felons. It is against the rules of the bar and the rule of law. If memory serves me; no attorney should be a party to criminal acts and if discovered needs to promptly reveal those facts to a criminal investigator, the police! The fraud is evident and the attorneys should not be exempt from responsibility to report these crimes and never enable them.

    I am also prepared to ask for a judge to step down, if I hear him/her say, no one gets a free house. That is a personal comment and does not qualify as a judicial interpretation of the law.

  5. Love the labs. I have a black one. She is a really great and smart gal.

    The public will only become aware if there is mass media coverage. The coverage needs to focus not only on the issues we on these sites discuss, but how the general public has been harmed also. It needs to be hammered over and over and over how these mobsters also took billions of taxpayers money and have also ruined the equity in their homes even if they are not having financial problems. We all know and live the truth and the facts. Those not affected do not pay the same kind of attention unless it is put in front of their faces on a daily basis. What I’m trying to say is using the same tactics as the Romney camp. The massive media campaigns have crushed Newt. Mass intrusive media works. The same needs to be with regards to this fraud. The challenge is getting it out there with the emphasis placed on the general taxpaying public not just those of us who have been damaged. Massive media playing up the notion of what America has become and how that will affect the lives of their children and not in a good way. People, for the most part, care greatly for the future lives of their children and grandchildren. Media needs to play to that. The general public needs to pull their heads out of the sand and look around!

  6. oops..i’m not proofing again; i meant gigantuous black hole

  7. @johngault

    Why only MERS. That was not the only fraud. The purpose was to get as many signatures on bogus notes to launch into the gagatuous black hole known as securitization. They then sell the same note over and over as well as placed bets on the ones they knew would fail. Then they receive taxpayer bailouts and now form new corps to buy back the foreclosures at “blue light” special pricing..just special for them and will rent them back to “responsible” renters. Ain’t life grand!

  8. kathryn,

    read up again on the Masto complaint. thanks. While i never asked for HAMP I did send 3 QWR’s saying if Wells Fargo does not say to me that they are authorized to negotiate or approve HAMP etc then I can not do anything. Masto essentially states this exactly. I am in fight mode like the rest but i think there is huge value to moving on also. I am prepping myself for DIL or whatever options may eventually come along. Good Luck!

  9. NY AG in new action says the banksters saved 2 billion in recording fees and thus achieved their primary goal. Well, I beg to differ. That was not their primary goal. Their primary goal was to steal our homes.
    Steal means take something which is not yours, right? Right. The 2 billion saved was a perk. The real value was the perception of legitimacy they foisted on everyone in the first place and all the bad acts which could be perpetrated under cover of that perceived legitimacy. This misperception of the primary goal as stated is damaging to the case, imo, as the bad acts will apear to flow from the primary goal to save 2 billion, and that was not the primary goal at all.

  10. started reading the NY AG’s action against MERS, et al. He identifies MERS as a shell entity. I’m going out to dance in the street.

  11. @carie at 11:31 – that’s an interesting question, one we pondered a while back and, as so many other issues here, quickly abandoned.
    Most of us, and that would certainly include me, can only speculate about this. Of course, if the answer is yes or it’s true, it would be game over, wouldn’t it? The answer is that big.
    It appears a legitimate question, but only someone who really has a handle on securitization, maybe an insider, could render an intelligent opinion, no?

  12. @chas404

    I know they use scare tactics and it probably is an attempted debt collection violation. I have been thinking about filing another suit under the fair debt collection act in Superior Court as my lawsuit is in Fed just to run them around a little more. I just have to decide if I want to put myself through more agony!

  13. Plus more fun to fight than beg for a mod.

  14. ali

    Ditto. They did the same thing to us. I found a lot of good information in Kathryn Masto’s (Nevada) lawsuit against BoA when I formulated my complaint. It is probably worth a read by you as her suit revolves around these same things.

  15. Katheryn.

    The letter I got was not a real demand letter. Only a scare tactic I believe. You have to be formally served the paperwork in order to start the 20 day process.

    I personally think this letter is a violation of fair credit rules bec of the way it is worded. It is set up to scare the homeowner yet says “This is for information purposes only and not a demand for payment”. So it is BS.

    Have to be served or noticed to start the lawsuit. I am not lawyer I just slept at a Holiday Inn last nite and don’t respond to servicer scare tactics. C

  16. ali,

    I am not a lawyer just a homeowner with situation like yours. I struggled with what path to choose and I will tell you about it. You have to chose your own but here is my thinking…

    I called HAMP/HARP when i had perfect credit and was current. After talking to a lady who sounded uneducated and had no idea about even the proper terminology for mortgages etc, I decided not to apply. I also had read horror stories online.

    HAMP/HARP is 4% effective. Maybe not even that. I don’t like Obama and I don’t trust him but maybe that is a side issue. If your house is $100k upside down you can pay 0% modified mortgage and you are still not going to make it.

    So rather than pay into a bad asset I stopped paying altogether and hired a local lawyer that works on a yearly fee system that is affordable.

    I can not predict if I made the right decision but so far I am confident I made the right decision. Five months later I have not been sued yet. My credit is destroyed but all those options including HAMP etc do the same thing.

    Each state is different and each person’s financial situation is different. All I can say is dont even stress yourself out with HAMP.

    From what I have heard from 2 attornies is that all you can do is stop paying and later down the line when you get to a DECISION MAKER on their end they will then possibly negotiate and waive back fees and offer a real modification.

    C

  17. Interesting reading and info…my recommendation would be to allow the homeowners to stay in their homes which would ensure the maintenance of those properties and keep their value while the dispute continues and the homeowner has less stress of having to deal with not having elsewhere to live while fighting to keep their home. They should not leave their home and the sheriffs should boy cut the banks and these eviction notices and stand up for the rights of the homeowners.

    Freddie macs sent 2 of its senior fraud investigators to visit me recently…they said they purchased (if I understood them correctly) the mortgage and note?

    but they do not own the property. How is that?

    The were investigating a foreclosure of someone I know …they said Freddie purchased the loans within days of the loan been approved so how come the property foreclosure by someone else sometime after???…

    so I asked…how come Wamu and Chase are claiming ownership and filed the foreclosure even without the knowledge of the buyer of the property? And why is Chase sending out notice to the original buyer that was foreclosed upon and whose name is no longer on the property since it was bought by someone else and Chase is sending out notice to the old owner saying the property is abandoned and will secure the property? Interesting but no answers…and the tax roll showing the new buyer and not the foreclosed buyer???

  18. @ chase

    I got those same demand letters with the exact same wording. Unfortunately, I could find no attorney to help me. One thing I did know from following these sites is that you have to respond within 20 days if you object to the demand. I’m sure your attorney knows this but there are so many stupid things they can try and get you on you have to keep your guard up 24/7. Just a suggestion. I try and make sure that I don’t leave one stone unturned and have them prevail on some little detail like this one.

  19. Iwantmynpv,

    Your NY 2005 situation sounds like my 2005 FL situation. I got the bogus demand letter from Wells Fargo that states on the top “This is not a demand for payment”.

    Then it goes on to list the local lawyer they selected and that due to default the “entire balance is due and payable”.

    Haha. To who? I want to write the lawyer so bad but I have a defense lawyer on retainer and my lawyer would kill me if I stirred the nest so to speak.

    I am fascinated with your and Anonymous’ theory of repackaging the old loan and disbursing only the cash out. It seems to me you could subpoena the title agency for the wire funds etc.

    If they did not fund the entire new loan it is going to be a big big mess.

    I will be dancing in the streets if I can prove this.

    C

  20. @ chris

    I sorta touched on that in my complaint. I served it on Moynihan because BoA refused to tell me which of the attack dogs (oops, I meant attorneys) I should cause service on. Ignored. So it went to the CEO. Taking it one step further, I know how they try to hide and claim they didn’t know anything and should not be responsible. I researched and found Federal as well as State law and cases to plead that he nor any of their officers or managers could hide. I’m not sure about suing him personally, I guess based on the law I just referred to, it would be possible. Are you in Fed or State court? I will be happy to give you my case number if you want to read how I handled it in my complaint. Did you register on PACER? I’m happy to share any way I can to nail these SOB’s. I may be middle aged, but thank God still healthy and ready for a good fight!

  21. Carie
    keep in mind that some originators scanned the promissory notes into a digital format. thus we see these being printed and used in court filings.

  22. Is this a true statement:

    “The promissory notes had to have all been destroyed because when the “loan” (negotiable instrument), was converted into the publicly traded stock certificates, the note and stock certificate can’t exist at the same time because that would be “double-dipping”…”

    Because if that is true, then since the note is destroyed, we have a definite broken chain of title, and the mortgage loan would be invalid… and suing for quiet title would be the remedy?

    So, the question becomes how to PROVE original promissory note was destroyed…? How do we do that?

  23. I agree with allmost every comment postes tdy. I tried to put together my chain of title and everytime it led back to the origination of the loan. They had not thought this through. We bought at the end of 2005 from a man who was selling by owner. We used my husbands VA benefits and put a large amount of money down to make sure our monthly pymts were reasonable. We had representation at closing and made it clear what we wanted was a trationonal 30 year fixed rate loan. Instead the loan we got was immediatedly funded by the the morgage broker @ First Morgage Corp. They have tried since to keep thier name obfuscated in any recording of the events since closing. They immediately assigned the loan to MERS as nominee. They assigned the loan to Washingtonton Mutual and even tried to and maybe succeeded in appling for a home equity loan from Washington Mut. Never recorded, cannot find any info on WAMU records about thier involvement at all, not through MERS or my local Recorders office. Its as if this part of the chain of title never existed. Our loan was assigned many times, and that is only what we know. The next servicer they trid to unload the loan on was Wells Fargo. The next thing we find is a release of morgage from the title company, “Loan pais in full”, a letter and certificate from Wells and MERS that the loan was no more. But that didn’t stop the assingments of the loan. However the it did reference the recordation in the County recounds that the VA , sid ,”this loan is NOT assumable without the express consent of The Department of Veterans affairs”, back in the same year we closed. So it seems to me that the originator sat on this loan foe a year till they thought they could dump it on someone who would not do a title search. They were wrong. So now the loan was paid in full twice. We did not suspect anything till 2007 when we decided to refinance because of the recession and our payments had become to much. Our loan was assigned to Countrywide. The “dream” had become a nightmare. Applied to Countywide for loam mod. Countrywide was assumed by BOA, applied for loan mod with BOA and was given the run around multiple losses of paperwork, worked with “Hope for Homeowners” who assigned us to “Money Management International” Got no where with them, in fact my case worker whom I had become close to called to say goodbye and that she was tired of being “reprimanded and bitched at for taking too much time with clients”. This was devastating to us as we thought we were following the rules and had Money Management on our side. Thier report showed that we were in fact eligible for a loan mod. Then b of a offered us aforbearance agreement that didn’t reduce our monthly pymt, we declinced and then were told that we were not eligible for the so called “HAMP” program becauce we were in arreares of 12 months,
    we were in arrears for over 12 months because of the lost paperwork and many other hoops BOA made us jump through. After all of that , we were sent an email “congrdulations, you have been approved for a loan mod and after you sent in “upfront money of almost 1800 dollars by a certain due date you will be approved. We were tired and beaten down so we wired the money, only to be disaproved because of a “Cap Fee Error” commited ny BOA and told we had to start the nightmare all over again. Put in complaint to OCC, they sided with BOA, sent appeal, sided with BOA again. Next offeered a mod again, no reduction in monthly payment and this time with an upfront fee of 2500 hundred dollars. Thats when we said enough and statrted inveatigating our loan and its chain of title. Got our records from the Recorders office, the only legal Recorder of Home Loans unless there is some legislation saying otherwise. So I am waiting to be served with foreclosure papers which since I live in IL. I will have a chance to tell my side and produce the evidence and more of many different frauds commited in our home loan. I know I will need a forensic audit but the paperwork I have in my possession is very telling. So just last week I recieved another Fed Ex packet, not the foreclosure papers I was hoping for, but paperwork for us to fill out for yet another loan mod. They must be completely deranged to think that I am going there again. It is now going on over three years, will be 4 in July. They realy must be crazy, Iam giving them no more personal info and certainly no sigatures to recreate another loan that in my opinion has benn payed in full twice!!!!!! All this without our knowlege. So folks please don’t walk, run to your County Recorders office and get your records.

  24. @Davies910,

    Congratulations!!!!!

    Keep the fight on, keep the pressure on and keep us abreast.

  25. i HAVE MADE IT TO THE 9TH CIRC. COURT OF APPEALS. WOW IT IS QUICK. HERE ARE THE STATEMENT OF ISSUES ON APPEAL.

    1) Whether the “Bankruptcy Courts” erred in dismissing Davies’ Truth in Lending (“TILA”) Claim 15 U.S.C. § 1641(g) [Sept. 20, 2010 assignment] on May 3, 2011, at the “Judgment on the Pleadings” hearing or does an earlier [Aug. 10, 2009 assignment] qualify and fall into the Category of “Equitable Tolling” as discussed in the Federal Reserve’s Opinion.

    2) Whether the “Bankruptcy Courts” erred in dismissing Appellant’s “Declaratory Relief Claim” as duplicative when the “Quiet Title Claim” was dismissed for lack of tender, and when the ripe “Declaratory Relief Claim” does not require tender to survive.

    3) Whether the Bankruptcy Courts misapplied the facts presented in the Appellants Judicially Noticed a) Pooling and Servicing Agreement (“PSA”); b) Bankruptcy Subpoena of Mortgage Electronic Registration Systems, Inc. (“MERS”) including the “MERS Audit Trail”; and c) Bankruptcy Subpoena [pre-adversary] of Deutsche Bank National Trust Company to determine the validity of the endorsed notes and proper assignments for a perfected security interest, and do the two denied Motions for Relief of Stay (“MFRS”) have any preclusive effects if subsequent to the hearings no additional documents were considered.

    4) Did the Bankruptcy Appellate Court error by failing to consider individually, Universal American Mortgage Company of California, a California Corporation (“UAMCC”) [the purported original lender] and Universal American Mortgage Company LLC, a Florida Company (“UAM”) [the original Security Instrument Trustee], instead they were collectively referred to as “Universal Mortgage” while the record demonstrated that “UAMCC” was not a “MERS Member”, and if MERS as a Nominee of “UAMCC” [the non member] enjoyed the authority to assign either of Deed of Trusts along with the Note to create the necessary perfected interest claimed by Deutsche Bank National Trust Company.

    The Case Management Conference Schedule [at Excerpts of Record (“ER”), Exhibit (“EX”) 17, Pages 0462-0465) set forth: 2. All “Motions on the Pleadings” which Plaintiff intends to file in reference to the Third Claim for Relief under 15 U.S.C. § 1461(g), shall be filed by April 5, 2011. The hearing on all motions on the pleading is scheduled for May 3, 2011 at 1:30 pm. 3. The discovery cut-off shall be June 30, 2011. All motions related to discovery shall be concluded by that time. No exceptions will be granted. 4. Any Motions for Summary Judgment or related motions shall be filed no later than July 6, 2011, and all hearings on all Motions for Summary Judgment and related motions shall be heard on August 11, 2011 at 10:00am.

    Codified by Federal Reserve Rule, 74 Fed. Ref. 60143 (November 20, 2009), App. at A-13; Final Rule at 75 Fed. Reg. 58489 (September 24, 2010) (and subject to 60 day compliance).

  26. @john Gault

    Fannie and Freddie used to take possession of the notes,but stopped when they were forced to compete with private securitization trusts in a lower interest rate climate.

    In fact, many of the loans alleged to be now onwed by fannie and freddie went through through two securizations. Fannie and Freddie would buy GSE certificates inside of private pools, whereby they would ahve an entire tranch of loans called GSE certs which would meet the watered downed lending guidelines created by Congress. The GSE would resecuritize these issues and offer their own GSE Bonds / Securities to MBS investors with the backing of the U.S. they would make the spread difference and also buy contracts betting the Debt Series, certificates, bonds would default. That is why HAMP is not being administered, except sparingly to appease the public.

    Ask fannie and freddie about the refi swaps they would buy so they could sandbag quarters, pay a small vig to Goldman Sachs so they could hold funded loans until the next reporting cycle and present the appearance of controlled constant growth. This pushed the equity share prices up tremendously and allowed the officers and members of Congress to recognize tremendous wealth when selling shares to an unsuspecting public.

    The fraud was allowed to continue because they all received huge campaign contributions from the former GSE’s. We need an investigation of Eric Holder, Treasury Secretary Paulson, Treasury Secretary Geithner, all members of the Senate and Congress, Alan Greenspan, ben Bernanke, all sitting board members of the former OTS, all current members of the FHFA and every damn CEO of commercial banks, mortgage banks and investment banks since 1999.

    We may not be able to fix the current mess, but indicting the main actors would go a long way to preventing this from happening again. Nothing has changed except the greedy at the top of the food chain, absorbed the greedy below them that did not have fed access, or political connections to keep their insolvency hidden from the public.

  27. @anonymous

    They are already trying to circumvent disclosing. I helped a friend challenge a demand letter about two years ago since it named Wells Fargo Home Mortgage as Creditor / Mortgagee, and we already knew the cash flow had been purchsed by fannie and freddie through a conventional pool / package Well Fargo bank, N.A, had passed through to the former GSE.

    In Court recently, we challenged the Demand Letter since Freddie Mac dicslosed themselves as Mortgagee and that Wells was acting as Servicer. For two years he tried to modify under HAMP, so we challenged the structure demanding full dislcosure knowing that Freddie had purchased float swaps creating a huge conflict with the HAMP initiative. The Judge demanded the Plaintiff produce the entire chain and also wanted wet-ink evidence that the Note and collateral docs had been sent to Freddie, if they now claimed to be the damaged party. On Monday, he received a new acceleration letter / demand which now no longer names Wells Fargo or Freddie mac as the creditor. The letter (sent by a new law firm) merely states; “Your mortgagee has chosen to accelerate the terms of the loan” They go further to protect disclosing Freddie as the interested party by not ioncluding the full mortgage loan number, because as we know the collection company (Wells fargo) loan number is different than the investor (Freddie Mac) loan number.

    This was a New York purchase loan from 2005 and thus was a new loan in the entirety. i am trying to find the name of the party that authorized the satisfaction of mortgage from the folks that sold them the house to see if it was a credit balance entry that created the transaction. it is important to Note: when ylou sell a house in New York, although the Seller of the property does not have an assumable mortgage, if you take the proper steps you can have the NOTE consolidated to avoid paying the obscene mortgage tax, even though the mortgage is not assumed.

    So,to be clear, if the capacity to facilitate a transcation whereby the Note is consolidated and the purchaser of a home assumes the old note plus new monies to achieve the entire purchase price of the property in one transaction, than the remittance / new money refi structure is certainly accurate and the only new monies on a refi transaction is what the new lender provides above what is simplhy credited /cleared at the old lender. They are simply making obscene amounts of money on a loan that they cleared the majority through a balance sheet credit / debit entry in the clearing cycle.

    The worst part is, the bank that loses the loan gets paid through a default swap because they purchased contracts which pay them if a loan in the pool pays off early / defaults.

    This is all going to unwind badly.

  28. @ All

    This may sound crazy, but I am rethinking my strategy. In essence, I have been suing an entity, a proposed assignee, trustee, POA, etc…this is just paper. Someone made the choices and is responsible for the transaction/movement of these documents. The question I am beginning to ask, who did what and why? I want to sue the person(s) responsible for the sale, transfer, assignment, etc…right now I am chasing my tail, with no end in sight. This might be the wrong avenue, but the way this is going, I am still going down the wrong avenue….It may be worth a try.

    Thoughts anyone?

  29. The article above talks about Wilson Freyermuth, law professor, Missouri stated he thinks MERS system is compatible with the law. He needs to talk to Bill Black who works there too and get the real story. I so wish Bill Black was running this mortgage investigation.

  30. Carie – FYI I was looking online at my property tax records and there was listed Corelogic who paid my property taxes 3 mths. after closing. I think they are listed as several entities one of which a debt collector. They were not on DOT, Note or anywhere. You might check your county property records.

  31. @johngault

    My Deed Of Trust states:

    “MERS is the beneficiary under this security instrument.”
    “MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns.”

  32. @e tolle – i agree with you about Eaton. Your willingness to travel to MA (unless you’re already there) to demonstrate against an adverse ruling is commendable. ‘Fraid my reaction might be to head for the first foreign beach I can get to.

  33. @joann – I really am starting to believe there is no original beneficiary shown in the deed of trust and no beneficiary in dot means no deed of trust on our property. The language MERS used to describe itself is on its face all messed up. They could have accomplished, maybe , what might have been intended, but taking the language they actually used, there may truly be no beneficiary. Even if it were not messed up, a party with no interest in the debt, imo, may not be named the original ben in a dot. Remember, for a year after mers was formed, the note payee was the ben in deeds of trust and did an assgt to
    MERS. They got greedy and careless in my opinion and changed it to the mers’ original dot, wherein they did NOT call MERS the nominee of the beneficiary, which language would have maybe given them some mileage for certain things. It might take some work to support this argument and the backlash would be deafening.

  34. @anonymous – I thought an assignee stood in the shoes of the original lender on loans as to tila, respa, etc. violations , but can’t swear to it or prove it this minute (thought I read ‘any claim one can make against the orignal lender, one may make against an assignee?) But, a business plan not of the borrowers making which found a borrower without remedy for those violations can’t be right, or legal, or something, seems to me.

  35. MERS is a database, with no human employees. How does a
    database own, hold, possess, or foreclose? How can a court
    come to the conclusion a database can do any of these activities?
    And on some contracts it states MERS is both trustee and
    beneficiary.
    What is it going to take to get the truth out, and the tax paying
    public made aware of this truth?

  36. @E. Tolle

    “If that court rules against Eaton,”

    I don’t think that court will rule against Eaton. Just wish that ruling would come down before Feb 6!

  37. Oui, E.Tolle…it is NOT going to “end well”…but, end it must…or, rather, the truth will come out, eventually…slowly, but…eventually…has to.

  38. MERS Membership Rule 9….. “MERS shall have no ownership rights whatsoever in or to any information contained on the MERS System.”

  39. @johngault

    addendum previous post:

    More “lender” quotes from the DOT:

    “Upon payment of all sums secured by this Security Instrument, Lender shall request Trustee to reconvey the Property”

    “Lender at its option, may from time to time appoint a successor trustee to any Trustee appointed hereunder by an instrument executed and acknowledged by Lender and recorded in the office of the Recorder”

  40. It should be painfully obvious to all mon petit tete de chous, there’s a multi-trillion dollar f*** up here, and either the investors who have all the money, influence, and campaign cash will win the day, or the hapless deadbeat borrowers will. The money bet’s not looking good for us low-lifes.

    They will do anything to preserve their wealth and lifestyles. They don’t give a flip about rule of law or the masses underneath them. This is not going to end well.

    The arguments coming from F&F and the FHFA in the Eaton case are stating very matter-of-factly that to let the borrowers have an inch will destroy the ability to foreclose forever, i.e. destroy their cushy investment schemes. It’s all about maintaining their securitization pyramid, and it’s all plain out balderdash, but they’re pushing it with all their might. If that court rules against Eaton, there should be an occupation of the entire state, by everyone who can travel. It’s that important on a national scale.

    The fatal note transfer defect in the securities reminds me of the end of The Poltergeist…except instead of moving the graves and leaving the bodies, it’s, “You moved the cash flows but you didn’t move the notes, did ya’!”

  41. @johngault

    “The dot (of which page 1 language is ‘problematic’ for them) alleges to authorize MERS to foreclose.”

    Thinking the DOT is the key. The homeowner’s signature encumbered the real asset in a transaction with a “lender”. If MERS was not a lender or for that matter anyone else was not a lender they have no business being on the DOT. a The note was linked to the DOT which secured the real property and the note merely defined the terms of payment. Excerpts DOT :

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

    …. This Security Instrument secures to Lender: (i) the repayment of the Loan, and all renewals, extensions and modifications of the note;”

    “…Lender at its option may require immediate payment in full of all sums secured by this Security Instrument…”

    “The note or a partial interest in the note (together with this Security Instrument) can be sold one or more times ….”

    …“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….

    Thinking when the banksters and the judge try to say the homeowner wasn’t party to the psa (even though there would be no psa without the homeowner’s signature and no security without the asset and no income without the homeowner payments – no investors – no beneficiary – no trustee- no servicer-no right to foreclose anything ) the homeowner should say the banksters were not party to the DOT. No free house.

  42. You know how we sometimes suspect loans were sold 2 to 100 – who knows – many times, and that’s certainly possible I’d say, it just occurred to me that given the way it appears they operated, if a 10 million dollar commitment (or even 50 million or 100 million) were short say a million or two in loans, what would stop them from making up a loan and entering it into that database from hell? It’s not like it’s going to get caught, when there is no delivery of docs along the line. And then what if they insured these non-existant loans? They would, because no one doing the insuring knew they were fabricated (or likely cared) First payment default! Yikes, what a terrible mess.

  43. @carie – unless things have changed, fnma and fhlmc do in fact purchase the loans.** Many loans go from broker to wholesaler to one of them (f or f). That’s why they (f & f) were ostensibly set up (and for years, things were just fine), to free those funds for more lending, which then became securitization’s claim to fame – so that only some gazillions of investors’ funds were tied up and with shared risk. That was the justification for sec’n.
    Aggregators take ‘forward’ positions with F and F to get better pricing, generally. They want to lock in a favorable sale’s price of those loans to F and F. If they committed 10 million at X price (“stike price”) for delivery by April 3, 2004, which might represent a 60 day delivery, they have to deliver or there are financial ramifications. And this has got to be true all the way up the line and that’s why I don’t believe they did or could have done everything “right”. They can’t just pretend these strike prices and delivery dates didn’t apply from A to D or like that. Well, yes they can pretend, because I believe that’s just what they did by logging things in on a computer data-base in lieu of delivery. (Risky business, even to them – idiots) Instead of delivery of hard copies or any docs, including endorsed notes, entries were made and this to them was to stand in place of the UCC, for starters, maybe under we’ll “fix “it later, which is apparently what they ar trying now, if even that. But when time is of the essence and laws are involved which require certain performance / acts, a thing alleged to be done which had to be done can’t yet be done. And those things need to be identified.
    The actual live docs went straight to hell or to some warehouse “un-anything’d.”

    Back to F and F. F/F re-sells them on their way to sec’n or else they securitize themselves) Given that bankruptcy-remote thing, I think there were intermediaries between F/F and securitization. Don’t know, tho. I do not know how it is that F/F came to guarantee payment on those loans, if they did, and it appears they did. Or, the servicer does contractually (with F or F on the other end of that servicer agreement to advance F or F’s guarantee payments and be reimbursed by F or F) at least for sometime and then is contractually reimbursed by F or F (we don’t appear to see the ben of those guarantees in the amts we allegedly owe). Is FNMA reimbursed by anyone itself? Got me and I sure wouldn’t know why if so.

    Because of my severely limited understanding of securitization, the only reason I have so far for guarantees is what I was told by someone who is ahead of me on secn’ stuff, and that is the loans had to be seasoned by borrower (only) payments for six months before they qualified for mbs’s. The banksters did not want to wait those six months, so devised their own hasty cure, and that was the guarantee. If so, isn’t that patently illegal (a question to the ‘it was just unethical’ gang). And if so, does it also mean that as a matter of law (not contractual breach – LAW), the unseasoned loan cannot be in a trust? Would seem so to me.

    ** NG argues the investors funded the loans at closing. Did the investors pay first (90 days to get loans in a trust) and then the money went down the chain to the closing table? Got me, but it seems difficult in a word.

  44. I am tired of officals claiming an inability to, or helplessness about, the, now ancient, internet or electronic age. The computer did it is the new cry. Come on!!!!!!! There used to be inter office memos, coffee breaks and business meetings, (in person). And you know what. Secrecy was kept in tact, nothing was leaked, and the review of property ownership was taken care of. QUIT BUYING THE PC DID IT. Our officals, bank and other wise, pretend they aren’t smart enough the do an end run around the net. Well if they aren’t smarter than the net what the hell are they doing running my life. Get out of MY life, and get the freak out of China.

  45. This could be a big problem for that gang:

    The dot (of which page 1 language is ‘problematic’ for them) alleges to authorize MERS to foreclose.* It can be reasoned imo that’s some kind of big fraud (and this, fwiw, from a person who usually avoids that word) given that MERS knew IT was never, ever, ever going to foreclose – a party not a party to the instrument would and the INTENT was to make the borrower believe he had given a right to one party (subject to the “by law or custom” provision) when it truth it was carte blanche to any MERS’ member, and as it turned out, non-members, all with their 10.00 an hour clerks , to the borrower’s significant detriment.Dang. I say it’s fraud and it’s certainly been detrimental. On this one, because of the intent to deceive (and was malice involved? , I’m not sure one would have to show detriment, tho it as I said and we know, it certainly has been. No one in their right mind would have entered into such an agreement had they known the truth.

    * “if by law or custom”. Intelligent judges have said there IS no law or custom, so get lost, though inherent but not expressed (as I recall) in there is an admission by the judge that MERS is not the beneficiary. That, while related, is another story and may be another matter apart from the fraud perp’d on the borrower by that MERS’ foreclosure language in the dot. Avoid recording fees? I don’t think so. I think now the whole deal was for that (fraudulent) sentence in the dot and what it could and did do for them.

  46. carie

    You are correct. Paying a false party MEANS you are not paying. You cannot pay a false party. If you do, you will ALWAYS be in default.

  47. Quote —- “These days, lenders that make mortgages sell them off to Fannie Mae, Freddie Mac or other large operators.” No. They sell the cash flows off to Freddie/Fannie. Freddie/Fannie is a “security investor” in the cash flows – and they guarantee those cash flows. Look at it this way —- who would you name in a TILA violation lawsuit??? Not Freddie/Fannie — they would scream — we are not the lender/creditor. Your lender/creditor remains the party on your documented loan/mortgage until it is assigned to another party. And, that assignee is NOT Freddie/Fannie. Of course, we assume that the loan was not “table-funded” — that is, the actual creditor lender is identified to you at closing (NOT!). This is an issue I brought up a long time ago. Said — well if you claim the security investors are the “creditor/lender” — but, they cannot be named in a TILA violation, are our TILA violations then non-existent? Admitted problem. But, I still see here the false claim that the “investors” put up the money — and, therefore, they are your creditor/lender even though the Federal Reserve says no to this. Of course, have still not seen – here – a response to the distinction between security investors and investors — which is the crux of the problem.

    So, where do we stand?? We stand with fake assignments to trustees to fake SPVs, who claim – falsely- to be your creditor/lender. This was NEVER the intended purpose of securization to take away your rights to TILA violations as to the creditor/lender. Without a valid creditor/lender — you have no right to TILA violations. Problem is — the subprime securitizations were NEVER valid. The “loan” was not valid. Nothing valid anywhere.

    If there is any time to regroup, and as to reasoning here, it is NOW. Do not be like the government — “cannot go back.”

    I have much respect for Neil and this blog. Think it is the single most fundamental avenue to address the fraud. And, I am grateful. But, the curtains are coming down. And, going along with a false creditor/lender in courts, is NOT the solution. Our TILA rights are being taken away by the false notion that security investors are the creditor, and now being taken away by an AG settlement that purports to “settle” origination fraud, but does not specifically address our TILA violation rights. Attorneys here — is this constitutional?? .

    According to some — erroneously — there is no creditor/lender — only security investors — who can NEVER be the creditor/lender. If this is the premise — then we never had rights to TILA violation. IS this what the AG settlement is telling us??? And, have we, here, contributed to that false notion?

  48. This is exactly why I refused to do the “trial payment plan”—BECAUSE I DIDN’T TRUST THEM!!! Suppose I had dutifully paid on my trial plan for the six months it took them to finally “get me”—that would have been $10,500 in THEIR pockets—and they would have gone ahead and stolen my house anyway—behind the scenes!!! You just can’t trust these morons…they are insane.

  49. Again just my $.02…we are talking about Obamaism, his new form of government. A cross between Communism and Socialism, with a twist.

    Where fascists make policy and tyranny becomes the norm.

    If he is elected again, wait and see the devastation. He is going to change the entire country, it will be unrecognizable as the United States of America!

  50. what about that fucker obama, didnt he tell everyone he was going to help 4 million homeowners get MODIFICATIONS…..basically he setup the citizens of the USA to be foreclosed by the banks…..whether intentional or not is really not important !

  51. @ Enraged

    Right again…so I say!

    We have a trial modification, which was paid on time and under the conditions of the contract BOA initiated themselves. Okay folks, we have a breach of contract, if the owner made the payments faithfully. Trail modification, my arse.

    Then they take the money and foreclose anyway. Okay, obtaining goods under false pretenses, intent is here.

    If the banks, per Supreme Court decision are persons, then the CEO’s are personally responsible for the behavior of their institution. Go after the people, not the paper.

    My $.02

  52. “Kennedy says Bank of America agreed to reduce his mortgage payment to $624 from $823, and that he made the lower payments through 2009 and 2010. Such modifications are often done on a trial basis pending a permanent decision.

    So, he was shocked when the sheriff arrived with a notice that the bank was starting the foreclosure process.”

    To me, that is where our government really sold us out to the banks. That’s where the biggest scandal is: after getting the money, banks treated homeowners with an unconscionable cruelty and in violation of every existing contract law. Anyone to whom this happened should file suit or try to get on an existing class action. And because this happened after the bailouts, I really believe that banks CEOs should be personally named on such lawsuits. It happened under their watch and they got bonuses for a job so well done. They must pay!

Leave a Reply

%d bloggers like this: