Reynaldo Reyes, VP asset Management for Deutsch Bank said it best. “It is all very counter-intuitive.”
The borrower naturally assumes that the loan contract is complete when the money hits the closing table. Offer, acceptance and consideration — all the basics of an enforceable contract appear to be present. The borrower assumes the money was loaned by the party whose name is on the note as lender and named on mortgage as mortgagee.
What the Borrower does NOT know is that there is a previous agreement between the “originator” (whether licensed as a lender or not) that control the entire transaction with the borrower. It is frequently called an assignment and assumption agreement or purchase and assignment agreement. You can see what I have to say on this on YouTube or use the search engine on this blog for previous articles on the subject.
The previous assignment and assumption agreement calls for a table funded loan. A table funded loan is improper simply under Florida property law, contract law, and deceptive lending laws. It is also PER SE a void contract because it commits the parties to perform acts contrary to law. Then the originator, closing agent and third party aggregator (the other side of the assignment and assumption agreement) go ahead and act in accordance with the illegal assignment and assumption agreement. In my opinion all actions at closing should be considered void, subject to equitable doctrines.
Putting the name of the originator on the note instead of the source of funding and subject to repayment terms that are different than what the true lenders or true creditors required, is a void act against public policy and illegal per se. It is also PREDATORY PER SE which is more than just “wrong.” it entitles the borrower to justice and requires the perpetrators be punished by treble damages, disgorgement of undisclosed fees etc.
The note and mortgage are therefore in my opinion VOID not voidable. AND the absence of offer and acceptance on the same terms also means the loan documents are unenforceable. And further and most importantly, the absence of consideration at the alleged loan closing means that no contract was formed, the creation and signing of the note were a sham, and the creation, signing and recording of the mortgage were also a sham.
The closing agent assumes the same thing. He gets the money usually in the exact amount required by the settlement statements which were “approved” by the originator. He either doesn’t notice or doesn’t care who gave him the money to close the transaction. He also has the motivation to close because he gets paid out if the closing proceeds. At this moment it is difficult to say with certainty if the closing agents were negligent or participated intentionally in an illegal scheme.
Lawyers and the courts presume that the closing was real because the documents are facially valid.
But the facts are different. There is no doubt that a debt exists — the receipt of the benefits of the loan creates a debt where the borrower is the debtor. The debt is the amount of money that hit the closing table modified by the settlement statements. The net debt matches the amount set forth on the note. But this debt, as we learned in law school arises by operation of law, where it is presumed under these circumstances that a loan was made. But the statute of frauds requires that the loan contract be supported by written instruments. Notice the words “loan contract.” The only thing governing the validity of actions performed at a loan closing is contract law — not the UCC.
This is the point where the facts don’t match the documents. The banks are resisting at all costs, allowing the borrower to see the transaction trail. If an order is entered requiring compliance with the homeowner’s discovery demands, the case is settled under confidentiality. But the facts remain. The party with whom the borrower has settled actually has at best a questionable right to enter into a settlement. So the issue of title is not actually addressed in hedge settlement or modification, leaving the homeowner or any subsequent buyer or bank financing a loan using the property as collateral, in a grey area at best.
Since the assignment and assumption agreement effectively transfers “ownership” at the moment the documents are signed, the originator is not able to execute a satisfaction of mortgage — or an assignment or endorsement. It is prevented from doing so by the terms of the assignment and assumption agreement. And neither the borrower nor the closing agent knows who does possess the right to execute a satisfaction, assignment or endorsement.
The party who has apparently funded the loan is actually in the same position of the originator. The reason is that the broker dealers were careful to avoid any appearance that they were involved in loans that violated the promises they made to the lenders (investors) and which violated laws against predatory lending and rules requiring industry standard underwriting.
Thus there is no legal nexus between the broker dealer and the closing, no nexus between the trust and the closing, no nexus between the investors and the closing. This happened solely because the investment banks acted like pirates. Using the money from investors, who are the real lenders, they interposed a cloud of entities whose relationship appears murky but in reality is actually quite clear if you view it from the perspective of intentional fraud, as alleged by investors, regulators, guarantors, and other parties who were drawn into this cloud.
Thus far, those cases have been settled, but like the lawsuits with the borrowers, they are all settled under confidentiality. At this point the amount paid out in settlements appears to be over $300 billion and will eventually total over $1 trillion. This doesn’t prove anything of course. But it does corroborate that the banks saw their vulnerability and instead of litigating they settled. This should lend some comfort to borrowers who are wading into that cloud, that what they are looking for they will find — or receive a settlement offer that cannot be refused.
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Filed under: foreclosure |
experiencedprey: all the transactions are fraudulent right from the moment you applied for a loan. All the documents are fraudulent, forged and reforged. Look at all pertinent documents esp. assignments and read they very carefully. The last assignment in my case transfers on the mortgage and not the note, because they used another forgery factory to create it. The entities on the note do not exist and the same person signed every signature or just a squiggle.
With Assumption what could be possible?
I was pushed to settle. The stipulations were not met, and I was forced to hand over my property by order of the Civil Court Judge. This a Civil Suit I filed. I, unlike most, do not have a confidentiality, I fought for this and was granted by Judge. So, it is stated No Confidentiality.
I have a lot of evidence, including transaction history in ledger form, book-entry receivables.
I see what Neil is saying, I’m not sure I fully understand this, but it is making me ask myself some interesting questions.
I wanted to share the file history in transaction entries that are among the documents from discovery, the format is not really translated will here on the blog.
a little background…The Mortgage, in my name, my husbands name was forged, I alledged, but we did not go to trial so… I of course still believe that and so much more now. Nothing of merit, (and there was PLENTY), was addressed, and the party who claimed to have “bond” ended up being the grand prize winner of my home, courtesy of a joinder, by the Judge, to my civil suit.
We were in Civil Court, 2 years into it, all kind of tricks having been pulled, including foreclosure attempt, ordered by Judge (my first Judge) to have no right to file foreclosure. But then in 2009, as I said 2 yrs into the case, a party, claiming to be the subsidiary, Equity One Inc, filed (an unserved) foreclosure. It was a weak case, so I thought, the Servicer Popular, acted surprised, even claimed Equity One, was not supposed to do this, should he talk to them, Popular Atty asked, like an idiot, I thought it best if I dealt with the Chancery Judge myself, this was the way it should be, or so I thought, to make sure it would not happen again. I was now in between lawyers, and my Civil Court Judge got transfered. Now a new Judge for Civil, it took two years this and the Chancery Judge, said it could go uncontested to the state for foreclosure. Just as it won motion, it became the NEW party, just introduced in a motion as a new party. The new party was a claimed “bond holder”, I never bought that whole story line. They claimed to have assignment one year before, just weeks after this subsidiary who was not ever mentioned, despite mention of many other parties, by the Servicer was now added, according to MERS, just in time. There is even contradicting documentation, by other parties, including the “Servicer” itself. The Judge wanted no part.
This had been a rescinded mortgage, that supposedly could not be sold, the Servicer agreed to rescind, we were in court working it all out, or about to go to trial if not. All parties knew it was an agreed rescission, there was encouragement to consider a settlement. Before we could go further it all changed. This interfering party changed all… The supposed subsidiary, I question this, was it really Equity One.
This article made me think. Why couldn’t a party pose as a subsidiary. When I called this company, Equity One, because I had not been served foreclosure but was receiving the typical foreclosure scam mail at my home, so I went searching. I called the state and found there was a foreclosure filing. So I called the company, they said, they didn’t know about it.
I hired a new attorney and he filed reconsideration after I lost. Reluctantly, and I don’t know exactly what happened because as far as I know there is no documentation of Judges opinion or orders, on the reconsideration, it is just paused, is that a thing? paused, hmm. Then the Civil Judge joined the party, the new junk paper holder, Asset Recovery, it had never gone through any discovery, but the Judge said it will chip in, a very measly amount too. But the Judge was extremely eager, and made it obvious there was no good end. Wrong, he was wrong.
After noncompliance he said I could make motion for further damages, damages on the damages, is that a new one?
In the book-entry account, which is how they kept my records.
Combined with my payments and disbursements, insurance, taxes, and full payment receivables, multiple times, $460,000. or less as my payments were also deducted, some of the full payments made a day apart.
I tried to copy but the format does not copy in an easy to read format. I can create a link if anyone is
interested.
Suffice to say it is 6 full payments, 2 of the payments are a day apart.
I’m wondering, with this type of Assumption, after the Servicer is no longer reporting the certificates with the SEC,(because)
1. They have been sold off in another country via bookrunners to brokerages as pass-through book-entry certificates, in the European market.
2. Then, any number of possible scenarios for those claiming to still have control over something useful… but now ready to retire the mortgage
for it’s civil case involvement, etc, could it be sold
to a party, collection agency type, as a distressed debt.
As a side note, one year after the loan closed, there is an audit that includes a new account number with a different opening date and a different, slightly different Social Security Number. That’s not at all suspicious, is it?
3. Could the party, owner of paper, said to be “bond”, pose as a subservicer, or “assumed” Servicer from the original paperwork at settlement, with the cooperation of this assumed Servicer.
There is a notation on my file… “Asum”
4. Then takeover, as self, in one of those magical but forgotten year ago assignments, and foreclose?
I have found new party, warehouse lender and other info that shows this Servicer could not, based on all we see, have been the party to put out loan money. The received funds, in book-entry form, happen prior to the sale of the loans, all poorly underwritten by Deutsche, to Euroclear/Clearstream. It is endlessly fascinating and enigmatic.
In NJ it feels like it doesn’t matter how much I have learned, or that I was naive and uninformed because I hire attorney, and spent nearly 80k, these parties were quickly jumping ahead and sabotaged my case. I still have hope that I can turn it around somehow.
I believe this is a fraudulent transfer.
I’m just saying…
Neils article is very interesting and insightful, as always.
I don’t want to be afraid of them. People that can do these things, and get away with it are scary to me though. The getting away with it makes it more scary.
I did have a settlement, which I believe was made by the wrong party and that my property was fraudulently transferred. I am attempting to address this.
Neidermeyer- thanks for the offer. I will take the loan number off an OO assignment. I have had the purchase mortgage and two subsequent refi’s but have 9 different loan numbers. Also will try to spe your name correctly
@ IAN ,
That doesn’t sound right at all … can you e:mail me your loan number at brian.tracy1324 AT gmail.com ,,, Option One barely made their quota filling the trusts it had ,, there shouldn’t have been any “extra” loans to dispose of when they crashed.
Neidermeier
My loan went from OOne to AHMSI to SPS. Never involved w any option one trust. That’s always puzzled me.
@ Ian ,
I only have one Option One name on any document (and it’s a good one to have) ,, the branch manager in Orlando ,, she was a friend of my wife when they worked in a restaurant business together years ago … I have her letter stating that the physical docs were always shredded at the local office after scanning … nobody wanted to pay FedEx …
According to the AIG lawsuit against Bank of America that was dropped (2012? in New York?) ,, AIG claims (and they should know) that BAC actually processed the loan applications and did the underwriting on many of the late Option One “trusts” , AIG had an independent team do a “blind” study of a large sample of loan folders that they acquired from AHMSI in TX for my trust , “Option One MLT 2007-FXD2” ,,, (AHMSI was sued by WF for making it too easy for legitimate investor parties to get the docs!) ,, bottom line , 82% of the sample had major flaws and failed even loose underwriting standards.
Louise-
Financial Dimensions in Pittsburgh- I think this is a resurrected Financial Express which went belly up in 07 or 08. Do a search and see if the same operators involved.
I tried to locate a person named Leticia N. Anas as Assistant Secretary of MERS. Could not find her on the Internet anywhere. Also a new company similar to LPS/DOCX– Financial Dimensions, Inc. in Pittsburgh, PA which is on my latest assignment which only assigns the mortgage and NOT THE NOTE, Lots of squiggles for signatures that look like the same person did all the squiggles whether as a witness or a notary.
The entire debt collection business is illegal the way it is run in violation of the FDCPA. The debt collectors buy the loan unseen and without the underlying essential documents and then, hoping the person they are trying to collect from, is dumb enough to pay. Happens every day all over the country. We need new legislation and laws that prevent the debt collectors from running amok. We do have a very powerful law called the Fair Debt Collections Practices Act but many do not know about it.
Neidermeier- good timeline there. Did you come across an Option One person named Dafnis Benn? Her husband, Oscar Benn, made 1/2 billion in bad Option One mortgages in Fla. Also, Scott Anderson on any of your docs and does he in fact exist as a living person? Thx
Neil said-“there is no doubt that a loan exists” with one caveat : if the borrower was refinancing a “loan” which had already defaulted from the trust, was charged to zero on someone’s balance sheet, ( with that entity receiving 100 cents on the dollar as a charge against earnings), and then sold to a debt collector for 2 cents on the dollar, then the loan doesn’t, or should I say shouldn’t, exist. I noticed in my PSA that the loan defaults on the 31st day of delinquency. So my loan has defaulted about 40 times.
Neil is right on the money in his summation of the transaction… I agree 100% with his assessment of the responsibilities and duties of the closing agent/attorney firm.
I wish to engage the people here in a game of “What if” and “What should Neidermeyer do?”
COMMENTS PLEASE :
My case touches on everything here …
1.) storefront “lender” representing Option One
2.) Option One is actually table funded by BAC
3.) Unknown to me Option One was going bankrupt and couldn’t pay back BAC but they obviously had purchase and assumption agreements in place and really buggered up the submissions to the trust in regards to making valid transfers since the money didn’t flow right.
4.) My first legal team was K.E.L. in Orlando , I specifically requested that the “lender” be pressed for answers on X Y and Z , legal team did nothing but negotiate with a servicer that was not a lender… 🙁
4a) This same legal firm ran a title/closing business that actually closed my loan in 2007!! The paperwork from them demonstrates the table funding wire from BAC via their account at BONY Mellon to TD bank…
4b) The legal firm collapsed the title/closing company a few years ago and it went into state receivership … I believe it was purposeful to distance themselves from the illegalities at closing they were party to.
5.) The actual “loan” (as demonstrated by Neil it never existed due to fraud) was funded by BAC thru O-One and was assigned to a non-existent (unfunded) trust
5a) O-One fraudulently used BAC table funding money to buy new loans to patch up failed and failing trusts which had loans failing in large percentages from payment # 1
5b) O-One was unable to complete funding “my” trust because they burned through the BAC money ,, had to borrow money from parent H&R Block to hide the slow motion crash long enough for the syndicate to sell out the certificates to investors , H&R Block immediately starts firefighting the situation and puts O-One for sale.
5c) My trust crashes and burns (early summer 2007) with 7% of loans not even making their first payment.. BAC was not paid back on the table funding since O-One is effectively bankrupt (insolvent) and H&R Block is balking at giving them more money, “loan” is officially owned by WF as trustee …. following the money I would say BAC owns the loan.
5d) WF as master servicer submits an insurance claim with AIG , AIG pays the settlement (at least in part) to BAC … So whats up with the fraud assignments to WF when O-One never owned anything…
6) Approx 1 year later (May 2008) Wilbur Ross buys “loans” direct from “Option One” ??? at approx. a 75% discount for his servicing company AHMSI … WHO OWNED WHAT AT THIS TIME AND COULD SELL ANYTHING?
7) Obviously the title is not just corrupted but shredded at this point ,, AHMSI sells out to OCWEN in 2012 ,,passing along the “loans” as a party favor like a bottle of peppermint schnapps at a frat party
MY QUESTION IS WHO GETS SUED AND WHAT IS ALLEGED? I am currently still in FC but am making good progress with new counsel and do expect discovery to be granted… My original firm , K.E.L. is a nuisance to the courts (from the courts perspective,, slowing down the rocket docket) and not likely to be given much leeway by the court… They should have known about the agreements behind the agreements and they did know about the table funding as it is documented in my file..
Neidermeyer
Well louise you pay a nitwit to sign as having personal knowledge and get another nitwit to notarize / in quantum time. Its pretty magical actually !
D, in my case, the lender American Brokers Conduit went into bankruptcy in August 2007 and came out in 2010 as out of business. How can you assign a note/loan from a nonexistent entity into a trust that closed in 2006? You can’t. It is over 30 days (1 month) since submission of Mot to Compel and hearing and still no ruling from the Judge. Very interesting.
Agree
Fdcpa – servicer meets definition
Yet declares itself as lender on 1099a
I dont believe they are
The settlements with the borrower have to be confidential as it is just another case of forged documents and a settlement with an entity that is a stranger to the transaction and does not have the right to sue you, foreclose on you or collect your money. Please read the Fair Debt Collections Practices Act on Wikipedia.
Funny thing is the first time I went In front of a federal judge the opposition gave the game away in the elevator whilst leaving court ,
” you know there will be costs”. And then ” It’s contract law”
I pay attention to detail- because this attorney was one of the best but on the wrong side !