Alabama Appeals Court Slams U.S. Bank Down on “Magic” Fabricated Allonge

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NY Trust Law — PSA Violation is FATAL

RE: Congress (yes that is really her name) versus U.S. Bank 2100934

Alabama Court of Civil Appeals

Editor’s Comment:

Yves Smith from Naked Capitalism has it right in the article below and you should not only read it but study it. The following are my comments in addition to the well written analysis on Naked Capitalism.

  1. Alabama is a very conservative state that has consistently disregarded issues regarding the rules of evidence and civil procedure until this decision from the Alabama Court of Civil Appeals was handed down on June 8, 2012. Happy Birthday, Brother! This court has finally recognized (a) that documents are fabricated shortly before hearings and (b) that it matters. They even understand WHY it matters.
  2. Judges talk to teach other both directly and indirectly. Sometimes it almost amounts to ex parte contact because they are actually discussing the merits of certain arguments as it would effect cases that are currently pending in front of them. I know of reports where Judges have stated in open Court in Arizona that they have spoken with other Judges and DECIDED that they are not going to give relief to deadbeat borrowers. So this decision in favor of the borrower, where a fabricated “Allonge” was used only a couple of days before the hearing is indicative that they are starting to change their thinking and that the deadbeats might just be the pretender lenders.
  3. But they missed the fact that an allonge is not an instrument that transfers anything. It is not a bill of sale, assignment or anything else like that. It is and always has been something added to a previously drafted instrument that adds, subtracts or changes terms. See my previous article last week on Allonges, Assignments and Endorsements.
  4. What they DID get is that under New York law, the manager or trustee of a so-called REMIC, SPV or “Trust” cannot do anything contrary to the instrument that appointed the manager or trustee to that position. This is of enormous importance. We have been saying on these pages and in my books that it is not possible for the trustee or manager of the “pool” to accept a loan into the pool if it violates the terms expressly stated in the Pooling and Servicing Agreement. If the cut-off date was three years ago then it can’t be accepted. If the loan is in default already then it cannot be accepted. So not only is this allonge being rejected, but any actual attempt to assign the instrument into the “pool” is also rejected.
  5. What that means is that like any contract there are three basic elements — offer, consideration and acceptance. The offer is clear enough, even if it is from a party who doesn’t own the loan. The consideration is at best muddy because there are no records to show that the REMIC or the parties to the REMIC (investors) ever funded the loan through the REMIC. And the acceptance is absolutely fatal because no investor would agree or did agree to accept loans that were already in default.
  6. The other thing I agree with and would expand is the whole notion of the burden of proof. In this case we are still dealing with a burden of proof on the homeowner instead of the pretender lender. But the door is open now to start talking about the burden of proof. Here, the Court simply stated that the burden of proof imposed by the trial judge should have been by a preponderance (over 50%) of the evidence instead of clear and convincing (somewhere around 80%) of the evidence. So if it is more likely than not that the instrument was fabricated, the document will NOT be accepted into evidence. The next thing to work on is putting the burden of proof on the party seeking affirmative relief — i.e., the one seeking to take the home through foreclosure. If you align the parties properly, all of the other procedural problems disappear. That will leave questions regarding admissible evidence (another time).
  7. Keep in mind that this decision will have rumbling effects throughout Alabama and other states but it is only persuasive, not authoritative. So the fact that this appellate court made this decision does not mean you win in your case in Arizona.
  8. But it can be used to say “Judge, I know how the bench views these defenses and claims. But it is becoming increasingly apparent that the party seeking to foreclose is now and always was a pretender. And further, it is equally apparent that they are submitting fabricated and forged documents. 
  9. ‘More importantly, they are trying to get you to participate in a fraudulent scheme they pursued against the investors who advanced money without any proper documentation. This Alabama Appellate Court understands, now that they have read the Pooling and Servicing Agreement, that it simply is not possible for the investors to be forced into accepting a defaulted loan long after the cut-off date established in the PSA.
  10. ‘If you rule for the pretender creditor here you are doing two things: (1) you are providing these pretenders with the argument that there is a judicial ruling requiring the innocent investors to take the defaulted loan and suffer the losses when they never had any interest in the loan before and (2) you are allowing and encouraging a party who is not a creditor and never was a creditor to submit a credit bid at auction in lieu of cash thus stealing the property from both the homeowner and in violation of their agency or duty to the investors.
  11. ‘This Court and hundreds of others across the country are reading these documents now. And what they are finding is that pension funds and other regulated managed funds were tricked into buying non-existent assets through a bogus mortgage bond. The offer and promise made to these investors, upon whom millions of pensioners depend to make ends meet, was that these were industry standard loans in good standing. None of that was true and it certainly isn’t true now. Yet they want you to rule that you can force investors from another state or country to accept these loans even though they are either worthless or worth substantially less than the amount represented at the time of the transaction where the investment banker took the money from the investor and put it into a giant escrow fund without regard to the REMIC’s existence.

We don’t deny the existence of an obligation, but we do deny that this trickster should be given the proceeds of ill-gotten gains. The actual creditors should be given an opportunity to reject non-conforming loans that are submitted after the cut-off date and are therefore indispensable parties to this transaction.”

Alabama Appeals Court Reverses Decision on Chain of TitleCase, Ruling Hinges on Question of Bogus Allonges

In a unanimous decision, the Alabama Court of Civil Appeals reversed a lower court decision on a foreclosure case, U.S. Bank v. Congress and remanded the case to trial court.

We’d flagged this case as important because to our knowledge, it was the first to argue what we call the New York trust theory, namely, that the election to use New York law in the overwhelming majority of mortgage securitizations meant that the parties to the securitization could operate only as stipulated in the pooling and servicing agreement that created that particular deal. Over 100 years of precedents in New York have produced well settled case law that deems actions outside what the trustee is specifically authorized to do as “void acts” having no legal force. The rigidity of New York trust has serious implications for mortgage securitizations. The PSAs required that the notes (the borrower IOUs) be transferred to the trust in a very specific fashion (endorsed with wet ink signatures through a particular set of parties) before a cut-off date, which typically was no later than 90 days after the trust closing. The problem is, as we’ve described in numerous posts, that there appears to have been massive disregard in the securitization for complying with the contractual requirements that they established and appear to have complied with, at least in the early years of the securitization industry. It’s difficult to know when the breakdown occurred, but it appears that well before 2004-2005, many subprime originators quit bothering with the nerdy task of endorsing notes and completing assignments as the PSAs required; they seemed to take the position they could do that right before foreclosure. Indeed, that’s kosher if the note has not been securitized, but as indicated above, it is a no-go with a New York trust. There is no legal way to remedy the problem after the fact.

The solution in the Congress case appears to have been a practice that has since become troublingly become common: a fabricated allonge. An allonge is an attachment to a note that is so firmly affixed that it can’t travel separately. The fact that a note was submitted to the court in the Congress case and an allonge that fixed all the problems appeared magically, on the eve of trial, looked highly sus. The allonge also contained signatures that looked less than legitimate: they were digitized (remember, signatures as supposed to be wet ink) and some were shrunk to fit signature lines. These issues were raised at trial by Congress’s attorneys, but the fact that the magic allonge appeared the Thursday evening before Memorial Day weekend 2011 when the trial was set for Tuesday morning meant, among other things, that defense counsel was put on the back foot (for instance, how do you find and engage a signature expert on such short notice? Answer, you can’t).

The case was ruled in favor of the US Bank, in a narrow and strained opinion (which was touted as significant by reliable securitization industry booster Paul Jackson). It argued that the case was an ejectment action (the final step to get the borrower out after the foreclosure was final) so that, per securitization expert, Georgetown law professor Adam Levitin,

..the question of ownership of the note was not an issue of standing, but an affirmative defense for which the homeowner had the burden of proof…Crazy or not, however, this meant that the homeowner wasn’t actually challenging the trust’s standing. From there it was a small step for the court to say that the homeowner couldn’t invoke the terms of the PSA because she wasn’t a party to it…..

The case has been remanded back to trial court, and the judges put the issue of the allonge front and center.

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31 Responses

  1. […] Alabama Appeals Court Slams US Bank Down on – Livinglies’s …Alabama Appeals Court Slams U.S. Bank Down on “Magic” Fabricated Allonge. Posted on June 11, 2012 by Neil Garfield … […]

  2. I was just served Wells Fargo trust option one 2005-1
    The complaint includes an assignment dated June 2012. A bit late.

    So should I just move to dismiss rather than answer?

    tks

  3. Neil, do you have anything written on how to write a letter to the SEC for information regarding trusts to find out if a particular mortgage was admitted to it etc? Are there certain questions that need to be asked to get the right info? What account number to send, the one from the servicer or from the original note/mortgage?

  4. Neil, what if an attorney sent in a Request for Production and Demand for Written Verification and it has 30 days to respond and no response at all even after 2 months from the banksters attorney? Should he continue to wait and just let the case stay as is until a response? Does not make sense to me. Your thoughts?

  5. Do all the judicial states use the same rules etc? Can we site cases from those states in Florida? What state is the closest to Florida in how foreclosures or other cases like quiet title etc is rule?

  6. The other day, I opined that the head-honchos who sold the sec’n investors those messes might / should file requests for notice (of default). Someone else has a better idea (but I wasn’t totally out to lunch, I’m happy to see). I just heard about the Chicago Policemen’s Fund, abbreviated, case against BONY Mellon (as trustee).
    Haven’t read the April ruling yet, but in dkt 96, the Fund opines the sec’n trustee has a duty under section 315(b) of the Trust Indenture Act to notify the investors of defaults. I hope like hell that the failure of the trustee to do so is upheld as a cause of action in the ruling. It may depend on whether or not the investors have to and can demonstrate that they were damaged by the failure to notify. Don’t know – not yet, anyway. The memorandum argues in favor of common law duties, mol, in addition to those recited in the PSA. This should be interesting. It is especially significant these days, since more now than ever, there may be benefit to everyone if we could work together and get rid of the jerkies. (Not sure that’s possible, but maybe it is). I mean, at least we’d have a shot of dealing with the people who actually put out the dough instead of criminals, and if everyone else wants to pretend the loans made it to the trusts, maybe we will do the same for a good reason: a shot at legit modification including the ‘re-direction’ of HAMP funds..

  7. Also, in an ongoing case, the bankster was in possession of a note it apparently did not own and sought to enforce it. The bankster got the usual “MERS” – read: self – assignment to itself. The homeowner argues the note and dot are now (for sure) bifurcated because the same party does not have an interest in both. Bankster must have done assgt because they can’t assign the dot to the trust at this date and lot of explaining to do about why MERS, the alleged ben or agent for the note-owner or w/ever story, can’t f/c. Had to assign dot to SOMEone. And that’s why they want the dot to follow the note – want to skip that sticky wicket altogether and rely on enforcement of a bearer note alone. (that’s when they aren’t angling for enf of a dot alone elsewhere) The case unfortunately made a left turn and now won’t be even close to decision til the fall. I am waiting with baited breath, tho I have little doubt with all the time they have, in true form, the bankster will come up with some form of evil-wicked bs tapdance. That’s an odd expression…kind of like “cat got your tongue?” for which I have never been able to find a reasonable explanation.

  8. @Jim – I haven’t seen that case, only read the bit posted here, so I don’t know what the homeowner’s arguments were or weren’t. But this I do know: the banksters, all of them, now that MERS is toast as to foreclosures, are going to come up with real or fabricated or partly-fabricated (and therefore still false) notes. They’re gettiing away with the production of those notes left and right. Then they argue the coll instrument follows ‘possession’ / the right to enforce a note, which it doesn’t as I advance day in and out. That’s why I say the ALA (was it?) court got it partly right – the part about possession of a negotiable instrument entitling the possessor to enforce a bearer note (assuming these notes are in fact negotiable instruments). But those rat b’s have an unsecured note and it’s my missing to prove it. Plus there is the conflict with FRCP 17 and others regarding real party in interest. If I am im possession of a bearer note, but I don’t own it, though under the UCC I am entitled to enforce it, am I the real party in interest?

    But at any rate, what they’ve got is an unsecured note, with no right to the assgt of the collateral when that party is not the transferee (requires negotation, right?)*. It was a hell of a dangerous thing allowing those guys to have possession of the notes (not counting that they just produce fabulous imitiations), including the sec’n trustee and or his alleged custodian as it turns out. Could anyone have imagine the abuses which would flow from that arrangement? Who thought allegedly venerable institutions would participate in criminality?
    For that matter, who knew MERS was really no one, just a shell corp with a computer program, would never perform one act allegedly agreed to by the borrower. MERS is a front, a facade, a trick, and number one on my list is to support a finding that for that reason alone, the dot as it relates to MERS anything is a legally unconscionable document. (And just as a reminder, the dot says MERS may do this-or-that-something-specific “by custom or law”. What custom or law would that have been? Seems like a rather large, glaring caveat to me: even they knew it was crap, but then yahoo got away with it on an unsuspecting, unknowledgeable public).

    *This is one big reason why I am hell-bent on the diff between a holder and a hidc. Besides the defenses available against a mere holder, it is an opportunity imo to get unavoidable discovery regarding dates of endorsement, negotiation, etc. If a note were negotiated even ( as opposed to possession) after it was in default, i.e., endorsement added for litigation or non-j f/c, the holder is not a hidc. One in mere possession is not a hidc, on info and belief, but can’t recall just now.
    Should be a logical conclusion, but I can’t get clarity on it.

  9. @ETolle

    Did you ever in your wildest dreams imagine this new reality: that the US would abandon the rule of law as too expensive or difficult to enforce when invoked by the “little people”?

    What the hay, we most assuredly don’t need law schools any more. Especially Real Property, now the most worthless class a “law” student will ever take

  10. Thank you JGault and ETolle for your clarity here. In Virginia, it’s wild west time. Find a note on the street (or fabricate it) you’ve got yourself a house. The mortgage follows the note so forget about assignments and all those useless documents. Don’t worry about paying value for the note either. However you come in possession of the note you have a bonanza

  11. “This whole thing can’t blow up soon enough for me. I look forward to the day Eric Holder and Jamie Dimon try and trade some of their stock certificates or CDO’s for lettuce or beans and are told their collateral is worthless. I’d like to see them refused a flat spot in tent city after their crimes. Bring it on.”

    Death penalty is all they deserve. Unfortunately, doesn’t happen here. Let’s just send to them to China.

  12. Here is where the attorney in the Bama case committed a class 2 felony.

    Yes, but will anyone charge her with the crime? It’s a slant on the old question of the tree falling in the forest….if there’s a crime, actually, millions of crimes committed, and no one in law enforcement cares, what’s a mortgagor to do, besides end up a renter against her will? Especially when the highest law enforcement officer in the land not only believes that no crimes were committed, but considering that he’s complicit in the criminality by signing off on the criminal apparatus in the first place (MERS) when he was at Covington and Burling, fat chance that he’ll rule against the wolf pack.

    As to the Bama case, I too have several undeniable felonious acts committed by the foreclosing mill attorneys….and yet the FBI, the county attorneys, the AG….none of them care. It’s as if there are some laws on the books which they believe should be enforced, and others that are allowed to be broken, all in order to benefit the larger picture i.e. housing and therefore the banking industry. A society ruled in this manner is toast… it’s very much akin to the last days of the Soviet Union when a select few picked the laws to enforce according to their own benefit. It never turns out good that way.

    But another real crime here is that the courtrooms vary from jurisdiction to jurisdiction, so that a homeowner (former homeowner) is left to her own devices to try and parse out who-what-when-where and how to determine what her rights are at great expense. It’s ludicrous, and would be laughable if we were talking about lawn ornaments, NOT the place where she lays her head at night and raises her kids. It becomes a crime and a sin when the latter is brought into the mix.

    Non-judicial v. judicial, pre-sale v. post sale, DOT v. mortgage, lien v. title, so many variables….add to all that that MERS suddenly appears with absolutely NO statutory or regulatory authority, simply due to a legal opinion letter from Covington and Burling…. the foxes OK’d the henhouse directive.

    This whole thing can’t blow up soon enough for me. I look forward to the day Eric Holder and Jamie Dimon try and trade some of their stock certificates or CDO’s for lettuce or beans and are told their collateral is worthless. I’d like to see them refused a flat spot in tent city after their crimes. Bring it on.

  13. I believe you can get the fraud via securities fraud. I have yet to see anyone argue that it is illegal under every state’s securities regulations to NOT register the notes begin sold to the investor when the mortgages are not recorded at the same time. It is illegal to sell/offer to sell unregistered securities. The size of the total deal kills any exemption aside from it moving as a unit with the mortgage.

    If they dont move as a unit, then the note has to be registered. Here is where the attorney in the Bama case committed a class 2 felony. She admitted assisting in the sale of an unregistered security by assigning the mortgage at a much later date.

  14. E. Tolle said the ASF’s position is:
    “right to a mortgage follows the sale of the promissory note it secures, and so whomever holds the notes should be deemed to have the mortgage…”
    I agree and disagree with the ASF then. The ‘right’ to a mortgage does follow the ‘sale and transfer’ of the note, a noteworthy distinction itself from mere possession. Possession does
    not accord the possessor that right to the coll instrument for the absence of transfer, a fact I am working on supporting (and wouldn’t mind any help). One who is not a transferee but
    is in mere possession of a note may be able to enforce an UNsecured note (and in that regard, unfortunately that court, was it ALA? had it right, even about a thief. Partly. Mere possession does not find the possessor with the collateral instrument nor the right to an assgt of the collateral instrument.
    An actual transferee of a note ‘only’ has the right to an assgt of the coll instrument and may sue for it if necessary if he didn’t get it, but does not have the mtg itself without an assgt of the instrument because the coll instrument is an interest in real property, unlike a
    note, and is not regulated by the UCC. That was the black letter law I was taught starting in the 70’s (well, that dates me) over quite a few business law and r.e. courses. The question which needs answering is: Is the collateral instrument regulated by the statute of frauds? I say it is – primarily because that’s what I was taught and it reads.

    “The purpose of a ‘statute of frauds’ is, as the name suggests, to prevent injury from fraudulent conduct. The abuses these statutes were designed to prevent are quite real.”

    The dot as we know it was formulated in response to lenders’ objections to the time and cost of judicial foreclosure. So they created a new doc and introduced a third party, the dot trustee, who was given the right and duty to enforce the terms of the dot,
    including foreclosing on the collateral: non-judicial foreclosure. Looking at the language in the dot, it’s clear a dot is a conveyance of one form of title to real property, subjecting the instrument to the statute of frauds. Imo, this was done with intent to in fact
    subject the dot to the S of F. But, even if it weren’t a conveyance, since it impacts and comprises an interest in real property, it would still be subject to the S of F. A foreclosure is mol a quiet title action: the homeowner’s title, either legal or equitable, is quieted (against him) by the foreclosure sale and the trustee’s deed.
    If the dot is regulated by the S of F, then while the transferee of a secured note is entitled to the benefit of the collateral instrument, he must get a written assignment.
    Imo the next essential querry is ‘must the homeowner have notice’? Again I say yes, because while an unrecorded assgt is binding on the parties thereto, it is not binding on others.

  15. Correct, but that was not argued in the case. I said he should have attacked MERs, which was moving or not moving the mortgage.

    You have to put it together, not simply say no endorsement, no right to enforce note.

  16. @BEB, I won’t presume to speak for Jim, but I do understand his point here, and I don’t get yours. You seem to follow the American Securitization Forum’s stance….that the “right to a mortgage follows the sale of the promissory note it secures, and so whomever holds the notes should be deemed to have the right to the mortgage”.

    The opposite was found in Mass with the Ibanez ruling…. “where a note has been assigned but there is no written assignment of the mortgage underlying the note, the assignment of the note does not carry with it the assignment of the mortgage.”

    Why have assignments of mortgage at all if they are meaningless? I’m sure the ASF would love that as the end result. The Securitization Machine would do without mortgagors altogether if they could develop a higher risk ratio. It’s all about Maximum Plunder.

  17. @Jim – this is not some vast conspiracy but legal concepts that have stood for hundreds of years, a blank endorsed note is redeemable by the holder.You cant expect courts to ignore this portion of legal transfers, and only accept others.

    @enraged – use Moodys, Fitch, etc to assist you. Their ratings are based on information provided and paid for by servicers. (Yes, I can see the conflict and it is wrong) However, they provide this information so Moodys, etc will wrtie a ratings report for them to get to investors.

    Get a copy of the report and you will be able to offer to the court a conflicting accounting of loans provided by the same entity attempting foreclosure.

    @ Everyone – quit being a victim….

  18. “These issues were raised at trial by Congress’s attorneys, but the fact that the magic allonge appeared the Thursday evening before Memorial Day weekend 2011 when the trial was set for Tuesday morning meant, among other things, that defense counsel was put on the back foot (for instance, how do you find and engage a signature expert on such…..”

    I’m confused. Trial exhibits are due to the other guy, what is it, 10 days? prior to trial (with the list of exhibits to have been shown in the trial statement well before that). Was some unknown exception (at least to me) cited by the bankster, or did the homeowner simply fail to object to introduction / admission of the (out of time) allonge on the available procedural grounds?

    “If you rule for the pretender creditor here you are doing two things: (1) you are providing these pretenders with the argument that there is a judicial ruling requiring the innocent investors to take the defaulted loan and suffer the losses when they never had any interest in the loan before and…..”

    That seems a valid point. But how does the investor suffer a loss when he had no interest before? Isn’t it likely that the innocent investors have gotten the benefit of the deal, right or wrong, already by way of the payment stream for these loans-that-didn’t-make-it-into-the-trusts? Under NY trust law, that isnt’, I understand, relevant to their actual rights or ownership, but it’s imo one of our problems: the tax ramifications to the investors when it’s acknowledged these loans didn’t make it and the investors have been getting moolah which has no tax benefit whatsoever and possibly getting funds(pymt stream) to which they weren’t entitled at all. The investors can take that up with the banksters, of course (and imo they sure should be, but do NOT want to), but it has seemed like class warfare to me. A blanket acknowledgement that the trusts never got the loans has significant tax consequences (and maybe others – I don’t know) to one group, the investors, does it not, which is being favored over another group / class, the homeowners. But the point is the judiciary may be part of the gang who does not want to make that acknowledgement (no loan in trust, no favored tax treament, etc.), which, also imo, is unavoidable when these arguments are made. The arguments have to be made. I just think it’s best to acknowledge what all we’re saying and be ready.

  19. Moody’s Blues: Major U.S. Banks Prepare For Possible Downgrades
    June 11, 2012

    Several major U.S. banks, including J.P. Morgan Chase, Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., and Morgan Stanley, are preparing for the possibility of a downgrade by Moody’s Investment Service that could come by the end of this week, the Wall Street Journal reports.

    The looming downgrades, which have been in the works since February, have leaders on Wall Street up in arms.

    Citigroup chief financial officer John Gerspach said last month that the Moody’s ratings method “is backward looking and does not provide adequate credit to the strength and diversity” of Citi’s business or its main banking subsidiary, Citibank, according to a recent Dow Jones report.

    “Every time Moody’s downgrades, it’s going to lower our universe of what we can buy,” David Fishman, co-head of global liquidity management for Goldman Sachs Asset Management, told the Journal.

    http://being1732.com/?p=14305

    I find that so nervy! The Moody’s method was good enough as long as those banks were getting AAAs but now that they may get downgraded, Moody’s standards stink. Lord, have mercy!

    Anyway, the collapse is coming. I want it all over and done with so that we can (finally) start rebuilding!

  20. Off topic,

    Unable to sign on to Mandelman Matters (we know he filed all kinds of legal actipons against a crook who defrauded people by using his name and site) but also unable to sign on to http://www.Americanbanker.com

    That, on the other hand, is really odd…

  21. @BEB
    Mers is not involved in every assignment. I can speak from experience.

    Anyway, read horvath. The case says the assignment, bogus or not, is irrelevant, which eliminates challenges based on faulty securitization and just about everything else. The reasoning is ridiculous but the court did a terrific job of boiling foreclosure down to its original issue, who holds the note. Congratulations to thieves everywhere

  22. @ Jim – I would suggest you seek legal advice. Virginia dealt with who had a blank endorsed note. Not only a security issue, but also common in every state under UCC.

    Neil has been very direct in telling everyone you have to make the right argument.

    Looks like Horvath attacked the note and not MERs. Most people are failing to understand the registration of the note is for the issuer (homeowner), not the buyer/seller. Today 100s of millions of securities are traded around the world in electronic form. Registration is kept by the DTCC (in the US) for the issuer.

    Horvath should have argued he (the issuer) gave no such authority for MERs to electronically keep records of his mortgage, and therefore MERs is not reliable. The issuer, not the buyer/seller has to provide MERs authority.

    Think of it this way…you buy 100 shares of GE on Jan 1. You then sell on Jan 10. Why the hell would you keep a record of who bought your shares for the next 10 years? GE does care, they want to know shares outstanding in case of redemption. MERs cannot maintain accurate accounting….

  23. http://www.huffingtonpost.com/news/foreclosure-suicide

    Yep, they’re calling it “foreclosure suicide” now—and the numbers are climbing…and HOW is this not civil and human rights violations as well as “crimes against humanity” by our beloved government?

  24. http://www.scribd.com/doc/96454240/An-Open-Letter-to-the-State-of-Rhode-Island-Superior-Court-June-9-2012-Regarding-Foreclosure-Fraud

    from link:

    “…Superior Court has no authority whatsoever to ignore an entire statutory enactment that deals with notes and other negotiable instruments and use its ownperception of indebtedness
    to dislocate clear legislative intent and enactments. In all MERS cases, it is also clear that there can never be compliance by MERS with 34-11-24. The Court seeks to get around that by ratifying its own unique theory of an indebtedness
    secured by a mortgage. In cases such as Hagen, where there is not one scintilla of proof that the party that foreclosed held the note, the Court has once again made its opinion clear that the note is not relevant but only that the party that foreclosed automatically owned the indebtedness simply because they said so.”

  25. What about Virginia. The 4th circuit (horvath) decision held that the person holding the note could foreclose. In Virginia you aren’t required to show ANYTHING to foreclose other than you possess the note. That’s it. They couldn’t care less about securitization, standing, assignments, allonges. All you need is simple possession of the note. The case actually stated that a thief could enforce the note.

  26. Also, quit looking at ‘Trust” law, this is all securities law, more importantly UCC Chapter 8. The notes are securities (in correct mortgage lending exempt from registration) as well as in the case above financial assets.

    Ms. Congress’ note was moved without the mortgage, violation of Alabama securities law. The closing attorney admits to a class 2 felony.

    The chain of custody does not work. In order for 2006-EMX1 to have offered the note, it would have to have had it assigned to it prior to Oct 2006.

    The assignments that can be track indicate her loan is in a Bear Stearns trust.

  27. um, maybe the exact reason why MERs is flawed? Searching the actual offering of 2007-EMX1, clearly states that RASC is the depositor, not Residential Asset Funding, LLC. how did US Bank control?

    What is interesting is that Mortgage Lenders Network originated 2 2007-EMX1 deals. One was RASC, the other Bear Stearns!

    By the time the attorney needed an indorsement, Bear Stearns was gone….

    US Bank admitted confusion on this…why because MERs was not doing its job.

    Nor was her attorney.

  28. Good point, Joann. WaMu’s PSA states that the loans must be transferred in 180 days, not 90–very different variable which affects the manufactured default of loans in the pool. Delaware trust law will control how a great many securitized Chase loans qualify for inclusion in the pools, (or don’t.) Certainly WaMu knew the loans would fail and when (when the interest rate reset) and built a window for the paper trail that would benenfit themselves and allow them to swap a few performing loans for the appearance of propriety. Hopefully someone who went to one of Max’s seminars will weigh in on this issue.

  29. Ok I found this from Max. Excellent article. He mentions New York and Delaware law.

    http://www.avvo.com/legal-guides/ugc/the-rules-of-the-road-for-securitization-of-residential-mortgage-loans

    “The applicable state Trust law really imposes nothing new or different on this analysis other than the imposition of traditional duties on the Trustees with respect to their fiduciary obligations to the investors or bondholders. In other words, strict compliance with the transfer and delivery rules of the PSA also comports with strict compliance with the common law imposed on Trustees under both New York and Delaware law.”

  30. Could someone weigh in on Delaware trust law. Alll discussions out there just mention New York trust law. 20% of trusts are governed by Delaware trust law. Chase trusts are Delaware. Wamu trusts are Delaware. I think Max Gardner had something to say about this in his seminars available to attorneys only….

    Thinking many of the same rules apply but could be critical differences. Rules for tax breaks and bankruptcy remote ect for mbs are probably the same – psa wording could be different. What takes precedent….how are late date transfers and bogus recordings affected if no assignment, no endorsement, no wet ink docs existing anymore ect (violation of investor agreements as per psa to protect interest if nothing else). Help appreciated.

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