Local Governments Weigh Eminent Domain to Stop Foreclosures

Featured Products and Services by The Garfield Firm

——–>SEE TABLE OF CONTENTS: WHOSE LIEN IS IT ANYWAY TOC

LivingLies Membership – If you are not already a member, this is the time to do it, when things are changing.

For Customer Service call 1-520-405-1688

Editor’s Comment:  

Picking up on a thought from Schiller, San Bernardino County is taking a long hard look at invoking the government’s power of eminent domain to seize mortgages, sell them to investors at market value and provide a basis for the homeowners to stay in the home based upon the reality of the marketplace without the corruption of data created by the Wall Street banks.

I did a little research on this idea and while it is a bit of a stretch it does not appear to be excluded from the power of eminent domain to claim the right to purchase the loans at fair market value and resell them to investors. Many properties have been seized by local government only to allow private developers to build highrise luxury towers on the same property.

All this does is force the issue of an open fair free market system and take away the power of the banks to manipulate the market for mortgages and housing. As it stands, these mortgages are blighting hundreds of neighborhoods in hundreds of cities. The basis of invoking the power is classic and permissible. Whether it can be or will be allowed by the courts is another matter.

One way of looking at it is to presume to know the defense: that eminent domain is not used for mortgages and then split hairs as to whether a mortgage is an interest in property that could be subject to eminent domain. That fails because nearly all properties taken by eminent domain have mortgages on them and the mortgages get paid in the same way — fair market value. What happens to the rest of the mortgage balance claimed by the lender? Well that remains to be seen.

If many local governments start invoking this power, it will gain momentum.

San Bernardino County Weighs Eminent Domain to Fight Foreclosures

The county, along with Ontario and Fontana, wants to use eminent domain to seize underwater mortgages from investors and restructure them to help borrowers keep the homes.

By Alejandro Lazo

A plan by San Bernardino County to seize mortgages and restructure them for underwater homeowners using eminent domain is perhaps the most aggressive example of how local governments are seeking new ways to combat foreclosure.

The cities of Ontario and Fontana are partnering with the county to create a Homeownership Protection Program that would use private funds to acquire underwater mortgages from investors. The county and the two cities have created a joint authority to explore and possibly enact the plan, and the first public meeting of that authority will be held next week.

David Wert, a spokesman for the county, said the program is worth exploring because it could offer a solution to one of the region’s most entrenched problems: the vast number of loans that are stuck underwater, with more money owed than the property is worth. If the program were to go countywide, it could benefit 20,000 to 30,000 homeowners, he said.

“The only thing we are doing at this point is conducting a conversation,” Wert said. “But the reason the county is interested in talking about this is because this is a proposal that could — if everything checks out — address the problem on a fairly large scale.”

Although still in its initial stages, the aggressive proposal has attracted controversy. A number of banking, financial and business groups oppose it, contending that seizing mortgages would raise constitutional issues and could increase lending costs in those cities.

The California Mortgage Bankers Assn., the American Bankers Assn. and the American Securitziation Forum, along with several other financial groups, sent a letter of opposition to the county and the two cities.

“We believe that the contemplated use of eminent domain raises very serious legal and constitutional issues,” the letter read. “It would also be immensely destructive to U.S. mortgage markets by undermining the sanctity of the contractual relationship between a borrower and creditor, and similarly undermining existing securitization transactions.”

Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn., said the program also could hurt the local housing market.

“It could be devastating,” Hobbs said. “If investors are unsure as to the disposition of mortgages in San Bernardino County and in Fontana and Ontario, it could really curtail lending in the area, and if not curtail, certainly increase costs for new loans.”

San Bernardino County’s plan is the latest of several measures by local governments to fight foreclosures and the problems often associated with resulting neglect: crime and blight.

Chicago passed an ordinance last year that requires banks and other financial institutions to maintain vacant properties that have been foreclosed upon.

Oakland has instituted a blight program that would require banks to register, inspect and maintain homes that are in foreclosure. Cleveland has been using a land bank program to tear down foreclosed homes.

Legal experts said the San Bernardino County proposal was one of the first initiatives to try to strike at the problem before a home is in the foreclosure process.

At this point in the planning, only homeowners who are current on their mortgage payments would be allowed to participate in the program, which would target mortgages that have been securitized and sold to private investors. That would exclude loans owned or backed by mortgage titans Fannie Mae and Freddie Mac. The acquired loans would be restructured, lowering the amount owed, with the intent of helping the owner keep the home.

The plan was first proposed to the county by a San Francisco firm named Mortgage Resolution Partners. The firm has employed investment banks Evercore Partners and Westwood Capital to raise money for the initiative from private investors.

Kurt Eggert, a professor of law at Chapman University, said a sticking point could be whether the investors are able to make a profit on the transactions. He said he liked that the plan, unlike efforts elsewhere, was an attempt to get ahead of the problem.

“The alternatives too often are just cities cleaning up afterward, and getting stuck with the mess, and getting stuck with the foreclosures and the abandoned buildings,” he said. “It is good to see cities trying to do something proactive.”

Cornell Law Professor Robert C. Hockett advised Mortgage Resolution Partners on the design of the proposal. The initiative should pass muster in courts because they have had a long tradition of upholding cities’ eminent domain powers as long as the valuation methods used to acquire properties are sound, Hockett said.

It particularly makes sense to use eminent domain to seize underwater mortgages that have been securitized, he said, because often those mortgages can’t be sold at market value for legal reasons. Often, those loans must be sold at face value — a higher price — because of the contracts governing them, he said.

“The fact they can’t be marketed is the reason we are using eminent domain,” Hockett said. “This is actually a pro-market solution.”


BUY THE BOOK! CLICK HERE!

BUY WORKSHOP COMPANION WORKBOOK AND 2D EDITION PRACTICE MANUAL

GET TWO HOURS OF CONSULTATION WITH NEIL DIRECTLY, USE AS NEEDED

COME TO THE 1/2 DAY PHOENIX WORKSHOP: CLICK HERE FOR PRE-REGISTRATION DISCOUNTS

41 Responses

  1. […] Read more… Posted in Banks, MERS, News Around The Country, States « Wells Fargo to Pay up to $50,000 per person in bias case against blacks, Hispanics “A day of reckoning may soon be coming.” Yves Smith » You can leave a response, or trackback from your own site. […]

  2. […] | money trail, pretender lender, waiver of subrogation, wire transfer instructions « Local Governments Weigh Eminent Domain to Stop ForeclosuresLocal Governments on Rampage Against Banks’ Manipulation of Credit […]

  3. And speaking of biting yourself in the ass. http://livinglies.wordpress.com/2012/07/18/local-governments-on-rampage-against-banks-manipulation-of-credit-markets/#comment-154460 This should effect the government represenatives and judges that have enabled and protected the crooks. This is going to effect a lot of innocent government workers and good judges and the very few government people that stood up for us. So many victimes. Here is just one innocent victim and his wife. Just one of thousands this will happen to. Join the victims club! http://nationaljournal.com/features/restoration-calls/in-nothing-we-trust-20120419

  4. My exact thoughts. I believe the foreclosers to be debt collectors that did in fact not own the loans and have no right to foreclose. I believe they are telling the truth this time, only because it fits their needs right now. However it will be interesting on how they prove they dont own or service the loans. Their lies are coming back to haunt them. It is only a matter of time when a lie is covered up by a lie and so forth, their is no happy ending. n We will be watching! Just like Chase told Deutsche bank they are not the owners of any of the WAMU loans, just assumed servicing rights. And Deutsche Bank tried to sue FDIC,CHASE/WAMU for not timely transferring the loans to them causing all the WAMU loans to be faulty. Tattle tails and lies get ya in the ass.

  5. @shelley – that’s going to be interesting as it unfolds. US bank doesn’t own them; it’s the alleged trustee for the trust, which does allegedly own them. Put in a box, the trust owns the houses. The servicing agreement MAY provide that the servicer is to maintain foreclosed properties (not a fact in evidence – need to see the agreement). But, that really does not absolve the trust of its responsibility to maintain the properties, any more than it would you or I if we owned properties and contracted out the maintenance. The city or county isn’t going after the wrong party as alleged in that article. The city or country wouldn’t go after our maintenance company – they would come after us, the titled land owners. Because the secn trustee has a fiduciary imposed on it by common law (unless there may be some exception for sec’n trustees of which I’m not aware), the secn trustee has a responsibility to maintain the properties for the benefit of the trust investors, whether it does it itself, hires it out, or gets on anyone with a current contract to maintain: the buck stops at the trustee. imo. If the maintenance exceeds the secn trustees expressed responsibilities, and no maintenance is provided for in any other agreement between the investors and the servicer or anyone (and who else would that be?), this is gonna get interesting and we may find out just who the hey actually owns these f/c’d properties alleged to be owned by the trusts. Someone in this act is going to be doing quite a tapdance, but this time on a high-wire with no net.

  6. YES! Corruption is imbedded in every county every city everty state and the White house. The codes officers in this little city I live have black mailed the citizens trying to get permits for over the last thirty years. One of the mail it companies here was black mailed for a thousand cash, not to have to forego a new permit submittal,due to the first permit for a sign that was approved and the sign already hung, then the codes officer tells Steve the sign is to long you have to do the permit and approval all over again. Steve asks the codes officer what will it take to get this sign left up? He puts up ten fingers and Steve pays the codes officer onethousand dollars in cash and the sign is immediately approved. One of many stories I could tell you. This same codes officer has a Harley from one of his extortians. A retired police officer that worked on the Green River murderer case told me the officers were told to carrie unregistered guns incase they had to cover up for an accidental death. Course this is just me saying this with no back up so this could all be just a crazy woman claiming false claims, due to no one in their right mind will ever back up my statements here. So this could be fiction, but it isnt. American is not the home of the free and the brave. Everyone payiing into this extortion is guilty of enabling the crime.

  7. AMEN…SHELLEY!

  8. Orange County: a history of fraud: http://www.salon.com/2007/07/10/orange_county_subprime/

  9. Trouble is the mayor belongs in the jail. I just sent proof to the prosecuting attorneys office. Perhaps that is why Pete is promoting closing down jails and court houses.

  10. http://www.huffingtonpost.com/2012/07/18/bank-contractors-break-ins_n_1682672.html

    Bank Contractors Break Into Occupied Homes, Terrify Residents, Lawsuits Say

    Nancy Jacobini was in her Orlando home on a cloudy afternoon in September 2010 when she heard someone rattling the handle of her front door. “I heard aggressiveness at the door. I heard the chain being chopped off,” she recalled. “I grabbed my cell phone and went into the bathroom, and called 911.”

    She didn’t come out until three sheriff’s deputies standing in her living room told her it was safe, she said. Jacobini moved the biggest piece of furniture in her living room, a 7-foot console and coat rack, in front of the door for extra security.

    In April 2011, it happened again. “I hear someone wrestling with the door,” Jacobini said. “All of a sudden there is a boom and it opens. I scream. I see the console moving. A big guy with dark hair pushes into the room.”

    At that point, Jacobini was making payments on a trial loan modification to JPMorgan Chase, and had filed a lawsuit against the bank in Orlando federal district court based on the earlier break-in. She didn’t realize, she said, that the lock the first worker put on her door could be opened by other preservation workers working for the same company, a fact pointed out to her when she struck up a conversation with a contractor working next door.

    Jacobini was shocked, she said, when the worker strolled over to her house and was able to open the lock on her front door with his key.

    “You need to get a new lock,” he said.

  11. @ Shelly: Rite On: + your area mayors are probably doing the right thing closing corrupt courts & other places. People can probably be much better off with all courts & Gov. offices shut-down than open…

  12. The Federal reserve is not the government, it is a private entity theif, owned by the big bankster families, illuminati/cabal, that also has taken over the government offices that are to protect the people who run the government. Just like all cons the fed is called the fed to make us think it is government owned. All an illusion.

  13. The crime is imbedded into every mainstream government to the white house, you are not alone. The mayor of our little mafia town just closed down the jail house and court house here in this town. The mayor of the next town, locked the city council out of his office and is dictatiing from his desk, in the little mafia town of Pacific WA.

  14. I read an article on a friend computer today or something that resembled a large phone / computer, that Barrack Obama was telling small businesses, we exhist due to the government allowing us to exhist. The government is the reason we are successful or not successful. What his speech should have said, was due to the criminal overtaking of the government, the behavoir of the government has killed massive small businesses that managed to survive the over taxation of the small businesses. That only a small portion of small business survive the heavy taxation by city and state. He thinks we should be thankful to this government if we are still in business. I have news for him, the people put this government together for the people, and did not plan on this government to decieve us, by putting us outof business or running our businesses down to ten percent of the businesses we were doing, nor did we plan the luminatti and cabal to who runs this government to put us out in the streets and make millions homeless. who are they kidding, that there are that many dead beats in this world? I have worked so hard all my life it has been worse than a prison sentence with the retirement I thought was coming to have no coming in sight. Barrack Obama needs to be thrown out of office, not voted into office. Hugh big businesses owned by millionaires are telling me it is the slowest they have seen their businesses in sixty years.

  15. sorry about the double posting within the re-post…;

  16. @Nora—unfortunately I think the “right burglar” is our government…

  17. Elaine Williams, on July 18, 2012 at 11:54 am said:
    @tnharry – excellent explanation.

    @elaine—you can thank ANONYMOUS for that…
    (thanks for the copy/paste, tn—you’re awesome 😉

    IN ADDITION:

    “…Search Maiden Lane. Maiden Lane is the purchaser of all the security tranches that the banks could no longer hold. Maiden Lane has “restructured” those tranches into one big TRUST, that is now sold to other distressed debt buyers by the management of distressed debt buyer bigwigs. You certainly cannot have pass-through of “cash flows” to the old (dissolved trust) and to Maiden Lane managed by distressed debt buyers.
    But, the problem is that these trusts, dissolved and Maiden Lane, is only for pass-through of current cash flows. They were not, and are not, the current creditor/lender as now defined by the Federal Reserve. The Federal Reserve has long stated that security investors are not the creditor/lender and that collection rights are not passed along with cash flow pass-through. This is clarified by the Fed Res Opinion (now Rule) to the TILA Amendment. This is quite clear, and as I posted elsewhere, recently clarified by a Federal District Court (as to the Fed Res Opinion and TILA).
    The biggest mistake we have made is to EVER claim that security investors are the lender/creditor. This has been a disaster, in error, and absurd.
    I can only surmise that those that continue to believe the dissolved trusts still exist, and that security investors are the creditor/lender, have a self interest that has been extremely counter-productive to fighting foreclosure fraud…”

    ANONYMOUS, on December 11, 2011 at 5:36 pm said:

    Testimony??? Yeah, by debt buyers themselves. Is it not ironic that the “goal” by these so called “investors” is to “keep people in their homes?” That should NOT be the “goal”, because “keeping people in their homes” by their terms, means continued victims and continued fraud. The goal should be to EXPOSE THE FRAUD and to allow people to rightfully OWN their homes. You cannot promote home ownership by continued fraud. The goal MUST BE to expose the fraud that has been perpetrated by the “investors” and then let the people “KEEP their homes” — not “keep people in their homes” by continued fraud.
    We are not talking securitization of cash flows, that is a separate issue, and those are “security investors” that are not the lender or creditor. We are talking debt buyer “investors” of (fraudulent) collection rights.
    Debt buyers do not want homeowners to keep their homes because to rightfully keep their homes, the fraud MUST be exposed. And, certainly, debt buyers have no incentive or desire to expose that mass fraud…”

    “…if the actual party does not come forward claiming that the debt is owed to them, and the actual party cannot prove how they came to own the collection rights — borrower does not owe the debt to anyone. That party is never going to able to demonstrate that collection rights belong to them because they would have to divulge the above fraudulent process and that the “mortgage loan” from onset was not a mortgage but, instead, collection rights…”
    carie, on June 2, 2012 at 5:44 pm said:
    “certificate purchasers” are the banks themselves (security underwriters), and they only purchase a “pro-rata” share to a “pool” of cash flows —- that is all — they are NOT the mortgagee/creditor—the trust is assigned the loans from which the pass-through cash flows are derived—it is the DEPOSITOR (subsidiary), that owns the collections rights (they are not mortgage loans), and the Trust itself. The “certificate purchasers” (the bank security underwriters (another subsidiary) themselves) then repackage the certificates to “pro-rata” cash flows into CDOs that are marketed to security investors — who are also never the mortgagee/creditor. According to all PSAs — there must be a documented valid sale of the “loans”, with supporting Mortgage Schedule to the Depositor in order for any Trust to be valid. There was never any valid sale of loans — and the loans were never actually loans — they were collection rights.”
    carie, on June 2, 2012 at 5:41 pm said:
    “…since the “loan” refinances (subprime/alt-a), and jumbo new purchases were non-compliant and non-performing manufactured defaults, no funding at all was necessary (except for the cash-out for the loans). The warehouse lines of credit never actually transferred any actual cash for funding. These lines of credit were simply “credit lines” that the “Depositor” would provide to their correspondent lenders. Once the “loan” refinance origination was completed the Depositor would then reverse the “credit” owed by the correspondent (originator). This never involved any actual deposit of cash proceeds —- the “funding” payoff check is never “deposited” into any bank account. The check is routed to a security derivative clearing house — who then simply cancels the credit-line transaction.”

    “…if the actual party does not come forward claiming that the debt is owed to them, and the actual party cannot PROVE how they came to own the collection rights — borrower does not owe the debt to anyone. That party is never going to able to demonstrate that collection rights belong to them because they would have to divulge the above fraudulent process and that the “mortgage loan” from onset was not a mortgage but, instead, collection rights…”

  18. […] to strike at the problem before a home is in the foreclosure process. … Read the rest here: Local Governments Weigh Eminent Domain to Stop Foreclosures … ← Short Sale Myths | Chico Real Estate – Jodi Buda How to Avoid Foreclosure […]

  19. There seems to be a difference in the intent, between comment and article: Seizing the properties FROM the investors, or seizing the properties FROM the “borrowers”. I start to frown whenever I read about any intention of government to seize anything. Even local ones.
    Why can’t the courts just stop rewarding thieves with free houses? It’s clear that the government has not and will not step in and stop the foreclosure of a financially devastated family’s home in this depression, like it did in 1929. Farmers survived that one intact thanks to this kind of intervention. So why not this time? There is a Federal Reserve System in place this time, who through direct involvement is transferring all the wealth of the middle and lower classes to the elite. So if we want to stop the theft of homes, we need to go after the right burglar.

  20. San Bernardino County and Orange County are two of this country’s capitals of fraud and hubs of forgery and robo-signing by design. Please see my introduction to the proof of these corrupt counties on page 16 under “Other supporting information” in this publication- http://kareemsalessi.files.wordpress.com/2010/04/file0004.pdf

  21. [NO] RULE OF LAW ALLOWED FOR THE HOMEOWNER IS WHAT I SEE HERE. STOLEN PROPERTY EQUITY, STOLEN PROPERTY, BUT THE LAW IS NOT GOING TO SUPPORT THE RULE OF LAW FOR THE HOMEOWNER. ONLY IF THE JUDGE GETS TIRED OF ALL THE FRAUD. STOLEN PROPERTY, STOLEN INCOMES/JOBS /CLOSED BUSINESSES, LOST HOMEEQUITY, EGREGIOUS STRESS BEYOND MEASURE, BUT NO RULE OF LAW APPLICABLE FOR THE HOMEOWNER UNLESS THE JUDGE GETS TICKED OFF. WOW! LOOK AT WHAT IS BEING SAID HERE? AND GOVERNMENT POSSESSING OUR PROPERTY? UNLAWFULLY FORECLOSED ON PROPERTY. THE JUDGE IS GOD AND THE RULE OF LAW DOES NOT APPLY.

  22. @TH
    “Because the prior loan is not paid off and the prior Mortgage is not validly discharged, no new note can be validly executed at the time of the last refinance.”

    if I understand this referes to the fact that a condition of the agreement was that the execution of the new “note” was accomplished to satisfy the old? Thus if that did not happen the new note was procured by fraud in the inducement and is void?

    The UCC re notes as negotiable instruments seemingly contradicts all of those rights to know chains of this and that—-if its bearer paper–isnt that the essence of being negotiable?

    And how as a practical matter can one determine if all of a chain of indorsements were made by authorized persons–and not one or two thieves in there?

    The essence of it seems to me that the ORIGINAL NOTE must be produced—–my only interest as a maker is to extinguish that documented liability–and if i cant get the verified original note–then I must have a lost note affidavit and economic protection by bonding as provided by UCC.

    Now i certainly understand why a bank-collection agency–psuedo trust–whatever–would not want to post that bond—–the bond company might want some ironclad sworn statements about the capacity of the claimant–or at least his financial standing. It is no problem for these claimants to lie wilfully to homeowners–but another thing entirely to do it to a surety

    Or maybe the chain stuff is just a stopgap measure to try to determine if that nice copy on your desk TH is the ORIGINAL—because if you pass it off as the origininal TH—–thats called Uttering a Forgery—-and you lose your license–next thing you know–that banker rep is throwing your stuff in the back of his truck.

  23. @tnharry – excellent explanation.

  24. @JG
    I agree with your assessment that this is a blatant public relations kneejerk –top of the pile–response. The threat of failure to extend loans wholsale is well-worn. It was a familiar refrain during tthe Dodd-Frank Debate—now CPFB regs—–increasing reserve requirements—you name it if it is not part of a bank-plan it will reduce lending. It goes farther—any regulation–investigation or assignment of responsibility for wrongdoing will affect lending.

    Well actually in my opinion based on years of observation these large lenders should be banned from lending to consumers. Let the money trickle down through the local-funding sources you noted. We all would be better off if we could go to a local office with authority–when we have a short-term problem. The chances of that occurring over a 30 yr loan are pretty high. The securitization limits supposedly imposed—no authority by the servicer to do anything but foreclose–ignores the realities of real long term banking. That model is unrealistically rigid. We all would be better off without it–even if we have to pay an extra 100 basis points.

    Better than facing a thug in your bedroom asserting he has a right to be there but you dont. Better than being afraid if you go on vacation your home will be cleaned out while you are gone. Better than being lied to and repeatedly cheated every way imagnable—the situation has become untenable. With no pushback these thugs just get more aggressive–and the nmbers of foreclosures are picking up again–more people afraid of bankers —-if they arent they should be.

    they have now moved past siezing homes and are after savings and retirement accounts. MF Global—-Peregrine, Barclay, the FOREX manipulator BNY—JPMorgan—-the moneylaudering HSBC—on and on

    Really local communities should start licensing the originators and servicers and forcing them to agree to conditions to do business there–not argue in court later. A local county would never license a convicted criminal to sell beer–why mortgage products. We still control local politics dont we?

  25. Here’s some more Fannie/Freddie (GSE’s) FRAUD (as in false default fraud and insurance fraud, etc.):

    “What many are not understanding is that the Note is invalid. There can be no valid Note on collection rights. Because the prior loan is not paid off and the prior Mortgage is not validly discharged, no new note can be validly executed at the time of the last refinance. What we have is described in the second half of Footnote 35 of the November 2010 TARP Inspector General Report —-”Without the note, a mortgage is unenforceable, while without the mortgage, a note is simply an unsecured debt obligation, no different from credit card debt.”

    If anyone has ever encountered credit card collection for default, they will understand what happens. With credit card default, the collection rights are sold to distressed debt buyers — at a discount. This is accomplished by either direct sale of the collection rights, or by a credit default swap derivative. The bank, who sells collection rights (cannot sell the account itself since the account is charged-off), considers the debt paid — just not paid by you. This is the same thing with the subprime refinances, and many subprime purchases. Subprime is simply charged off GSE debt, with collection rights passed to a third party — most often the bank who was borrowers prior mortgagee. Only servicing rights are sold/transferred in subprime refinance because the loan is already in default. Borrowers just never knew, and will likely never know, what was reported about them to the GSEs.

    What happened with the subprime trusts is that they did not have to be funded at all. No notes were actually conveyed because there was no valid Note. The refinance Note was invalid because the prior note is never paid off, and the mortgage is never validly cancelled/discharged. The banks, by the subprime refinance securitization were selling securities for pass-through of collection rights payments (cash) ONLY. Security investors thought that these were backed by valid mortgage but, they were not. The trusts themselves do not transfer collection rights to security investors. The collection rights belong to the bank who purchased them from the GSEs. Again, each subprime refinance transferred the right to service those collection rights — that is all. However, banks also dispose of collection rights, and collection rights could be sold again and again. The important thing to remember is that the trusts have nothing to do with the sale of collection rights. The trusts were set up to pass-through cash payments to those collection rights only —- nothing more.

    People have to stop thinking in terms of “getting paid” twice, or that the Note “has already been paid.” This thinking has led down a very wrong path. As with credit card debt, if you do not pay the debt — you still owe it — even though a distressed debt buyer has already “paid” the bank for the right to collect. The same with the subprime refinance — still owe it — even though someone else has paid for collection rights. However, in both cases, you have a right to know WHO you currently owe. A right to know your “CURRENT” creditor. A right to know how much the current creditor PAID for the debt. A right to know the complete chain of mortgage title from the purchase of your home to current date. A right to know if your loan was ever sold to a GSE, and when that GSE disposed of your loan along with collection rights, and what was reported to that GSE about you. A right to know your real and current creditor in bankruptcy. A right to know that your “debt” is unsecured.

    Stating that the NOTE was already paid is simply incorrect and wrong. And, it is this thinking that has prevented exposure of the truth. When you start saying “I owe nothing” — you have lost from the onset. You owe, but under fraud, and violation of the law. You owe — unsecured debt procured by fraud…”

  26. “It could be devastating,” Hobbs said. “If investors are unsure as to the disposition of mortgages in San Bernardino County and in Fontana and Ontario, it could really curtail lending in the area, and if not curtail, certainly increase costs for new loans”.

    Poppycock! That is not a fact in evidence. It’s a self-serving bs ploy. That threat is the go-to one for people opposing help to homeowners. Even if it such a plan did ‘curtail lending’ in the area,
    we’d survive. Local banks and credit unions would still make loans they could portfolio. Probably create local jobs with attendant contribution to tax coffers. National banks just couldn’t compete because they might not be able to foist loans off on investors. The nat’l banks ability to garner ridiculous fees at someone else’s expense is the real threat – to them.
    FNMA was supposed to keep down the cost of home loans. How’s
    that worked out?

  27. WOW —an economic review of litigation? I did not think that this industry did it—

  28. @TH
    but wouldn’t the borrower just be trading the devil he knows for the devil he doesn’t?

    TH—its clear that you havent been on the receiving end of the actual street thugs that your servicer-collection agencies hire /contract to intimidate the average homeowner—–personal threats——breakins–on and on——thet are as unrestrained in street tactics as the HSBC was in moneylaundering terrorist loot. As Barclays was in fixing interest rates—-etc etc

    I wouldnt wish it on you–hope you have a good job and your savings are under your matteress where the banks cant get it—unlike the poor spanish depositors that had their pension savings siezed last week to pay their banks’ bond pmts to foreign investors–read cartel–hedge funds, mideat potentates and london banks

    With this device the Spanish bankers have been able to sieze the homes of people who had money in the bank [ha] ——extending the siezure opportunities way beyond the unemployed and wage-reduced workers. Novbody is safe from foreclosure in spain except those who own their seaside villas outright–or keep their money in offshore camani accts.

    Which devil do you prefer? There was a poll last week on this exact topic in Spain. The spanish poll indicated that the average spanish citizen fears bankers far more than terrorists–despite the decades of Basque bombings. Certainly any system of government and finance that sees that sort of poll should make sure that all the pols have one way tickets to faraway destinations at the ready.

    To your point ab

  29. @dcb – i’ve actually given away a few “free houses”. either the balance was low enough or the value was low, and we just released the lien rather than litigate the issues

  30. @TH
    The eminent domain device is imperfect as I see it—sure there should be apportinment of proceeds–the advantage i see is that the collection agency must prove its right to proceeds —it must actually prove ownership of the note that gave it authority–its standing.

    Most of the time they dont come close—its as if a presumption works for them–anything they say is presumed right–evidence be damned—Bank v broke City is a whole lot more level than bank v broke homeowner. So the process should be sieze the house—lease it to the homeowner —-and put an IOU in a cookie jar for when the bank proves its interest——-if it drags its feet or fails –then escheat lies.

  31. This is the “free house” fallacy. It has not happened in 7 years and its not going to happen. the only way it is even possible is if the local court becomes so aggravated by noncompliance with his discovery orders etc that he dsmisses the claimant with prejudice—

    That is rare—i cant even point to a case.

    The other is if you have been abused in tort so badly that you win the house back in lieu of damages–eg the servicer’d bad boys come out and just beat you to a pulp –cause a miscarriage in so doing–or physically kill the homeowner—the widow might get the house as damages.

    This site never suggests you get a free house–it describes ways you delay—in the end they can assert a lost note affidavit and post a bond and there is little you can argue about. Otherwise–technically its none of your business who gets the proceeds of the lon.

    The suggestions that there never was a loan—where you got a purchase money mortgage–or a refi—assuming you got the old note back of course–these assertions of no loan having been made are great to sell pamplets but will just aggravate any lawyer–which includes the judge. If this were true there would be no more mortgages–no more loans————-sure they were predatory when made–the collection is predatory–you get damages—not a free house

  32. *should have been “how DO you have a discussion WITHOUT mentioning Kelo”

  33. how to you have a discussion about eminent domain with mentioning Kelo? I’m actually not following how this qualifies as eminent domain anyway. in a traditional “taking”, the homeowner is compensated for what is taken, and all DOT’s have a provision for that award to be split according to the loan to value ratio. seems like it could work under that scenario, but wouldn’t the borrower just be trading the devil he knows for the devil he doesn’t?

    and i don’t know much about California, but is this the same San Bernadino that’s on the verge of filing Chapter 9 bankruptcy?

  34. The California Mortgage Bankers Assn., the American Bankers Assn. and the American Securitziation Forum, believe that the contemplated use of eminent domain raises very serious legal and constitutional issues. Really? Since when are they concerned about these two issues? It’s a little late for that. They state further that it would also be immensely destructive to U.S. mortgage markets by undermining the sanctity of the contractual relationship between a borrower and creditor, and similarly undermining existing securitization transactions. Huh? Isn’t this what they did? They only things these guys are “concerned” about is their bottom line. Apparently the idea of living is a neighborhood that’s been blighted by foreclosures is inconceivable to them in as much as doing the right thing and playing fair is.

  35. Is there not an inherent conflict if the mortgage does’t exist due to all the reasons you have laid out on this site? The city seems to be looking to sell something they don’t own to another party that will help people by charging them for something they already own. The eminent domain is to be used to create multiple revenue streams at the expense of the property owners? Thus the citizenry is going to be forced to pay mortgage payments and taxes, when the taxes are likely to be all many of them owe.
    Have we foreclosed on the dream of law?

  36. This could be a scam—–collection agencies screaming “dont throw me in the briar patch” —-they get paid——-and close the book on these propertiies—-the normal cash flows that paid their fees from non-defaulting parties are running out–between refis and the defaults over past 5-7 years–the trust mortgages are winding up–they need to liquidate this stuff to get their fees out of current ash flow which is withering

    this would have the govts borrowing money–litigating—[so the collection agencies can run up more fees] and then if the miniciplality wins of settles —the collection agencu wins a cash payout–they dont care if its half value—they just want more fees paid now while the getting is good

    these govts should be stepping in and siezing these properties for free as lost–stolen abandoned property—forec the purported trust to prove it owns the note or property siezed [fruits of crime] —-why give the thieves money for stolen goods–wont help the tite one bit

Leave a Reply

%d bloggers like this: