Do Equitable Mortgages Exist?

Posted on May 29, 2014 by Neil Garfield

Consult with a lawyer licensed in the jurisdiction of the dispute before deciding or acting upon anything on this blog.

I was taken to task for one of my comments by a person who is extremely knowledgeable in the banking industry and with respect to mortgages. He was thrown off by appellate assertions that in certain states and in certain situations assignment of the note is a virtual or “equitable” assignment of the mortgage as well. That is true certainly as between the parties to the sale of the loan — if a sale of the loan occurred. That is my point. If a genuine sale occurred the presumption of enforceability is almost irrefutable. Without the sale of the loan, an assignment is virtually nothing. All you need is a warm body to deflect the spurious assertions of the would-be forecloser.

It is true that endorsement and delivery of the note allows the holder to sue on the note. But it is also true that some appellate courts have gone off the reservation allowing foreclosure (enforcement of the mortgage) even in the absence of a genuine transaction anywhere in the chain of “securitization” . That is not what was intended by commercial transaction law, the UCC or anything else. In some states the presence of facially valid documents may allow for suit to be brought — subject to all possible defenses of the “borrower” including his denial that he is a borrower. “Did you get the money” is used synonymously with “then you owe the debt” with horse blinders on the question of to whom the debt is owed.

One lawyer in New York seemed to have gotten the Judge’s attention when he asked the Judge who was his cellphone carrier. The Judge said it was AT&T. And then the lawyer said, so what would you say  to Sprint if they came in and demanded payment? You would say that as to Sprint, you are NOT a cell phone customer just as you are NOT a borrower in relation to someone who has neither loaned you money nor spent money purchasing your debt.

Starting with a fraudulent transaction and allowing it to be compounded by wrongful foreclosure is clearly not what any legislature, any court precedent, or any government policy was intent on doing.

Equitable mortgages do not exist in the law, per se. But there are numerous cases in which the idea was used to justify the result sought by the Court as the “proper” result.

And while if you push it there is no such thing as an equitable mortgage, there are particular circumstances under which it will be regarded as such — namely between a limited number of parties as litigants in the same lawsuit rather than “notice to the world” with nobody else on the horizon making a claim. In other words for purposes of a specific case and specific parties the mortgage is deemed effective — much as one might do when they enter into an IT agreement and they agree to treat the idea or business plan as patented in favor of one of the parties even though no application was made.

Thus spawns the idea that equitable mortgages are permissible. They are not. Equitable assignments operate in much the same way. They cannot operate against the world, but they can operate against specific parties because the circumstances are deemed to demand it. The error in the courts is that are skipping a step and lured into doing so by skillful avoidance of the distinction between a holder, a holder with rights to enforce and a holder in due course.

To that extent, appellate courts who have either fallen into that trap or been trapped by the lack of proper presentation by the borrower, have nonetheless committed a grievous error based upon the assumptions that there PROBABLY WAS A REAL TRANSACTION INVOLVING THESE PARTIES OR SOMEONE IN THEIR CHAIN. MY POINT IS THAT IN MOST INSTANCES NO SUCH TRANSACTION EXISTS AND FORECLOSURE DEFENSE ATTORNEYS AND BANKRUPTCY ATTORNEYS SHOULD STOP ADMITTING ALLEGATIONS THAT ARE UNTRUE AND UNSUPPORTABLE.
If an attorney doesn’t understand securitization, fact and fiction, then he or she should neither render an opinion nor act on it.

So the analysis comes down to the fact that there are no equitable mortgages, and there are no equitable assignments of mortgage — or else public records don’t mean anything — and then the entire marketplace would be uncertain as to title to virtually anything where a loan was collateralized. BUT a party can show that the instrument should nonetheless be enforced against a specific party whether properly executed, properly recorded or not using parol evidence, circumstantial evidence etc. to arrive at the truth. Just because it wasn’t in writing, unless the statute of frauds applies, doesn’t mean you don’t have a duty to perform under an oral contract. And if the writing was wrong and it is obvious from the facts presented by the parties that the writing was incorrectly drafted, then it is the SUBSTANCE that counts, not what is in writing.

To be specific, imagine that in an ordinary loan, the bank forgot to record the mortgage. Without some third party interposing a claim of superiority over the bank, the bank can nonetheless enforce the mortgage. If there were mistakes made, then the bank could simply ask for reformation of the contract and then foreclosure.

THE BURDEN OF PROOF (PERSUASION) IS ON THE BANK NOT THE BORROWER: In order to do ANY of the things described above the bank would be required to show the real transaction and the real facts and the real money trail — unless the “borrower” failed to deny the allegations and object to anything but best evidence, non-hearsay, credible testimony and real business records presented by someone with complete access to all the records relating to this particular loan. 

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Filed under: foreclosure |

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21 Responses

  1. Scott Thompson, on June 3, 2014 at 10:27 am said:

    Ethical Attorney’s? Honest Mechanic’s and Sane Women. It is gonna be a good day, tater.

  2. E. ToLLe, on June 2, 2014 at 3:25 pm said:

    Do ethical attorneys exist?

  3. The A Man, on June 2, 2014 at 1:30 pm said:

    Isn’t Conflict of Interest by a public servant synonymous with Bribery?

    Food For Thought.

    GOD BLESS AMERICA

  5. Deborah wynn, on June 1, 2014 at 2:13 pm said:

    So is as NG states
    “, doesn’t mean you don’t have a duty to perform under an oral contract. And if the writing was wrong and it is obvious from the facts presented by the parties that the writing was incorrectly drafted, then it is the SUBSTANCE that counts, not what is in writing”
    Then the critical issue would be whether their claim could be substantiated AT the time it was made.
    I have so much on the record to say about that. ( forest)

  6. Deborah wynn, on June 1, 2014 at 11:36 am said:

    NG said
    “Starting with a fraudulent transaction and allowing it to be compounded by wrongful foreclosure is clearly not what any legislature, any court precedent, or any government policy was intent on doing.”

    I like this post for the reason it makes you focus on the issue of contract law and obligation under the contractual agreement ( good faith n all aside)

  7. Scott Thompson, on May 31, 2014 at 1:14 pm said:

    How did they get this far in life with that bizarre frontal lobotomy condition HOW IS THAT EVEN POSSIBLE?????

    Because they really ARE retarded enough to think they have the exclusive franchise on doing extremely illegal things ?? Really?

    Big, fat, fake foreclosure files and everything out of their vile mouths is a gigantic lie.

    And everybody on the planet is painfully aware of this EXCEPT FOR JUDICIAL ????????? NO THAT IS NOT ALARMING NOOO.

  8. mycookiejars, on May 30, 2014 at 5:31 pm said:

    Gene, I guess my lawsuit ruffled their feathers and that was their answer. You mess with my family . . . You deal with me! There will be hell to pay. Many. Blessings to All.

  9. mycookiejars, on May 30, 2014 at 5:18 pm said:

    I like your Honesty. My husband was to, he now manages one of our communities largest employers And takes those boys under his wings and gives them what he was given, a second chance. They sold our pensions those bogus bonds. Recently they put force placed ins and file FC. My husband had A heart attack and will have to take meds for the rest of his life. BOA. Will pay dearly! Yes Sir!

  10. Scott Thompson, on May 30, 2014 at 2:03 pm said:

    What can I say .. yes I did juvenile delinquent things WHEN I WAS A JUVENILE WHAT THE HELL THESE MOUTH BREATHERS ARE IN THEIR 40’S??? WHAT?

    It would be nothing to go jam them up with an absolute finality from some other dimension they never dreamed possible.

    And I am not the only one totally done with their mega-special-ed condition. There’s all kinds of people with much more on the ball than I have that completely aim to screw them into the ground.

    Make it a Great Day.

  11. The A Man, on May 30, 2014 at 1:44 pm said:

    George gets it in San Diego, CA.

    http://nodirtydeeds.com/what-will-george-do/

    ACHTUNG
    NEVER AGAIN

  12. mycookiejars, on May 30, 2014 at 1:38 pm said:

    How do you know?

  13. James Smith, on May 30, 2014 at 1:38 pm said:

    Need some assistance. I need to find specific laws that state that it is illegal for Servicers and thier attorneys to create fraudulent Allonge’s and Assignments in order to foreclose on a homeowner. Thanks jsmith5915@msn.com

  14. Scott Thompson, on May 30, 2014 at 10:55 am said:

    I know the obvious gets redundant – but has anybody considered how stone simple and painfully elementary it would be to go rob THEM????? A stoned 8th grader could do it *cough* ASK ME HOW I KNOW.

    And these are educated adults? Are you kidding me?

    Make it a Great Day.

  15. hammertime, on May 30, 2014 at 12:18 am said:

    Very timely. I have proof that a loan was not paid off and the “lender” rep actually said it wasn’t since it was a WaMu loan they took over when it wasn’t.

    Lawyers in the Los Angeles area are saying that judges say nothing matters just that borrowers benefited and someone has to be paid.

    Lawyers are saying however that Assignments don’t matter but Substitution of Trustees do. At the same time they acknowledged the settlements, HBOR require a valid transaction. We’re being screwed!

  16. Trespass Unwanted, on May 29, 2014 at 9:18 pm said:

    I like the BRAG … “IN PRISON” (statement)

    Watching and waiting.
    Sometimes if someone robs another, they can claim they didn’t know what they were doing, or it was a mistake, or they are sorry or apologetic, or someone is incorrect in their presumption of the thing done.

    Not here.
    Not now.

    I hope they all enjoy the ‘grey bar motel’ and their pre-washed wardrobe,

    Trespass Unwanted, Creator, Corporeal, Life, People, State, Free, Independent, In Jure Proprio, Jure Divino

  17. Scott Thompson, on May 29, 2014 at 1:46 pm said:

    The lovely Milsap & Singer recently filed a foreclosure action on behalf of BofA naming Susan Oppenheim (property owner) and MERS and about 3 other groups as the defendant. Kansas deal, judicial State.

    Case #14CB00845

    Bad pad. 2006 Countrywide cash out refi around 600k. Purchased in 2001. Spouse deceased in 2001.

    *My late stepfather along with a group of doctors owned the dirt out there years ago – we used to shoot skeet back in the day.

    Make it a Great Day.

  18. Deborah wynn, on May 29, 2014 at 1:09 pm said:

    The problem began when the services held a fake hand shake for possibility of modification – we started to deal with a party with no authority. Letters I have state ” this company is a debt collector”
    Turns out on the 1099a they declare they are the Lender. I stuck my teeth into that one. Up on appeal naturally.
    Judges are not all bad, they are human regular people too and whilst I accept that bias may exist in the mind of a judge we all must understand this was an ” inside job”. Foreclosure mills are scum as far as I’m concerned. I think judges who don’t understand securitization should take all their decisions under advisement – I would love judge Shack to be their advisor.

  19. Scott Thompson, on May 29, 2014 at 11:33 am said:

    It is no joke. These mega-goon foreclosure firms will BRAG about all the houses they robbed, IN PRISON. True story, they will go on and on about it and how amazing it was they got away with it FOR SO LONG.

  20. The A Man, on May 29, 2014 at 10:43 am said:

    I am not making this up. Do your do diligence. This also applies to all Public Servants.

    http://www.judicialwatch.org/judicial-financial-disclosure/

    NEVER AGAIN

  21. The A Man, on May 29, 2014 at 10:41 am said:

    Do your due diligence.
    California Fair Political Practices Commision.

    http://www.fppc.ca.gov/%5C/index.php?id=6

    NEVER AGAIN

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