Foreclosure News Roundup

As a result of an unexpected scheduling conflict tonight’s show is postponed until next Thursday.

The news over the last week has been largely good. While many judges are still entering judgments against borrowers by rote, the truth about securitization is oozing out of the court system. A Tax court found that the investors were not secured creditors against the home and could not foreclose. That means that any claim “on behalf of the certificate holders” is false and perhaps void.

The CFPB is starting to ban servicers from accepting new loans to service until they can prove they cleaned up their act — especially with respect to modifications. A California court wrote that they were on the verge of finding that the modification process is a sham. That means that there are potential claims for damages, which have reached as high as $39 million thus far and that means that lawyers are starting to take notice of the pot of gold on contingency cases.

Wells Fargo and Bank of America in particular are taking hits practically every day leading them to file last minute voluntary dismissals. While this might cost as much as $100,000 in attorney fees to homeowner’s counsel it avoids a judgment for the homeowner, which preserves their gaming of the system and the investors and insurers and the government — most particularly the Federal Reserve who paid 100 cents on the dollar for worthless mortgage bonds — issued by REMIC Trusts whose assets consisted of derivatives or whose assets consisted of nothing at all. The fee awards are leading some attorneys to take cases entirely on contingency — just for the fee award.

We are on the verge in my cases and others I have been following of getting court orders for the response to discovery that includes the money trail. Thus for cases in which a nonexistent entity is named on the note and mortgage, it is plain as day that there is a high probability that although their name was used on the note and mortgage, no money funding the loan can be attributed to any entity using the name of the “lender” hence the term “pretender lender”.

There are many findings that there is a lack of continuity between the claims of the foreclosing party and the actual authority of the Plaintiff to be in court. Slowly the Courts are pushing the banks back, step by step. If the loan never made it into the Trust, as seems to be true on most cases, then the servicer might be the servicer for the trust but lacks any authority to claim representative authority for processing loan payments or enforcing the loan documents. So it might be the servicer for the trust, but NOT the loan, which is not in the Trust.

The case finding that the holder must control the note is particularly interesting because Wells Fargo used all the usual tricks and presumptions only to find that it still lost. This is because of the line of cases dating back centuries regarding commercial paper. A courier has no right to enforce the note even though he has it in his possession. But he can still file a case and even survive a motion to dismiss. Summary Judgment would be entered against the courier (along with some free bracelets and free room and board provided by the state or Federal government) because while the courier has the possession, he could not prove he had the “right to enforce.” Like the servicers and Trustees, he could allege that he was the possessor of the note and therefore presumed to be the holder. But that is not enough. He must allege and prove that he has the right to enforce — or that he is the holder in due course (or owner) of the debt and note. CONTROL therefore becomes the key byword out of that decision and it is supported by cases dating back many decades.

Yet opposing counsel for the banks still insist that they can rely on  documents that talk about the transaction in which the loan was transferred but insist that they have no obligation to show the actual purchase of the loan. This is absent from their allegations and they say it is not necessary for their prima facie case. But the courts are starting to peek under the hood and they are starting to reject the bank’s assertion that the demand for proof of the payment in the alleged purchase of the loan is not discoverable because it won’t lead to information that might be admissible evidence that the presumption relied upon by the bank has been rebutted.

Lawyers framing their arguments in that fashion are finding more friendly responses from the court. What could possibly be the harm in finding out if the presumed transaction actually took place? And if it didn’t take place then why was the endorsement placed on the note and mortgage with an assignment as well?

So what the bank lawyers are finding is that they cannot pick up one end of the stick without picking up the other. If they are going to rely upon legal presumptions about the transaction for which they are submitting evidence (e.g. the note) then they must respond to discovery that seeks information to rebut those presumptions. The day of treating the presumptions as irrefutable is essentially over. The courts are catching up. Legal presumptions force the burden of proof onto the other party. But they do not eliminate the defenses. Hence demanding discovery relating to facts that would rebut the presumption is entirely correct and it would be error of the trial court to prevent the homeowner from seeking facts that are entirely within the care, custody and control of the foreclosing party.

If there is an original note then it is not unreasonable to trace the chain of possession of that note. Nor is it unreasonable to ask for proof that there was consideration for the loan in the first instance. And even if the borrower received money, that doesn’t automatically mean they received that money from the party whose name appears on the note and mortgage. And that matters because the enforcement of the note and mortgage by anyone other than the owner of the debt or the holder in due course or a holder with rights to enforce requires false representations and presumptions in court.

It also negates the authority of “servicers” who claim authority for representing the REMIC Trust when in fact their relationship with the trust is irrelevant because the debt and loan papers were never actually transferred into the trust. None of the people in the chain relied upon by the forecloser ever had legal control over the debt because they used investor money, contrary to their agreement with the investors, to fund the loans or acquisition of the loans. They cannot ignore the Trust in the actual transactions and then prevail in the case based upon the presumption that the Trust owns the loan.

And as we have seen in the tax cases published on this blog, the investors are NOT secured by the mortgage nor do they have any control over the note or mortgage. But they remain the owner of the debt because their money was sued to fund the origination or acquisition. And since the real control over the note and mortgage was never transferred to the Trust or the Trustee on behalf of the Trust, it cannot be said that the Trust, the Trustee or the servicer has any legal authority to do anything with respect to the loan even though there exists a pattern of behavior based upon false representations of authority.

The only negative factor looming on the horizon is the fact that the money for the hiring of extra retired judges is about to be cutoff and the pressure is on to terminate these cases any way the judge can do it — which usually means ruling against the borrower. This is a clear denial of due process and probably grounds to assert systemic bias which several attorneys in Florida and across the country are pursuing. The big problem is that this “extra money” is coming largely from the banks themselves who in effect are paying the salaries of the retired judges. This raises the possibility of individual bias. It might be time to voir dire the judge regarding the source of payment for his salary. The fact that it comes from state coffers is not sufficient if in fact the money is traceable to the banks themselves and the judge knows that.

15 Responses

  1. DwightNJ I am married too and I understand. I would if I were you ask for a dismissal because as Wells Fargo is in court at the “holder in due course” (get a copy of the assignment of mortgage from the records office) as it should show that MERS assigned to Wells the assignment. The judge needs to understand that Wells has not approached the court for another, or another would be on the assignment as being assigned the mortgage.

    If I understand you correctly Wells Fargo is saying that they are working for Fannie, and if that the case and everything is to be done right then Fannie would have had the assignment from when they purchase the loan already filed out and had it recorded when you defaulted.

    So you are asking the court that Wells Fargo not presented any thing that show that Fannie Mae has purchase anything as they are not placed in the endorsement spot on the Note as owner of.

    Go to google look up UCC 3-302 says that a “holder in due course” took the instrument “loan/note” for value! So at what value did Fannie take the instrument for? Show me the Money!

    Here what you are saying is that the Note in evidence show a blank endorsement from WaMu and does not on the face of the who has taken the Note for value. The mortgage assignment from MERS shows Wells Fargo in title as the owner of the debt and they have a attached lien, and not Fannie Mae. Fannie Mae has not presented to the court that they own any debt, and all they is present to the court is maybe hearsay from a party in Wells Fargo who in title illegally as they have have recorded a false (forged) document in Assignment of Mortgage!

    So until Wells Fargo can provide the court as to what granted them power to foreclose them, they are to be treated as criminals! Why? because the assignment been defaced by the non “holder in due course”! The issue is that Wells Fargo not even the rightful servicer as it stands because WaMu is dead and they are the entity that is on the face of the Note!

  2. Charles … I just read your post to my wife and she threw the laundry she was folding in my face and told me to get in gear and win this case. It aint easy .. it aint easy just being married, and it sure aint easy being married when you’re in foreclosure and acting as your own attorney.. I’m sure this crap has cost people their marriages. But Brother Charles , you are the man, I believe in what you’re telling me .. but I need to see it written in the law or UCC so that I can show it to the Judge when I make this argument.
    I still haven’t worked on my discovery yet, my interog questions to send to Wells Fargo , I’m thinking it should all be directed at the money trail right? Proof of purchase of the debt? But I don’t want to tip them off to where I’m going with this, I don’t trust them..that they’ll fabricate a purchase document and business records .. or do I file a Motion to Dismiss and bring it all to a head right now before discovery?

  3. DwightNJ the argument to get to the assignment is through the Note, and that done by showing who is actually the “holder in due course” and looking up that legal definition of “HIDC”! The owner of the Note and the borrower sign into the assignment to allow it to be recorded that why you signed the security instrument (mortgage, deed of trust, security deed) so your not a third party to a document you signed. Your the owner of the property, and the one to make the payments and there are instruction to the securities instrument and how thing are to go. So for a court to say your a third party to something you are the owner of and payment maker too, does not make sense.

    I don’t think that they have a fake stamp, but the Notes have been stamped when the loan were placed into the securities. I would not bring a fake stamp up because you cannot prove it unless you got a insider saying the were stamping these Notes after the fact. But the stamp actual help you that its stamped with WaMu who not in court with you and cannot and did not claim you were in default.

    Dwight all you can and want to do is prove at this point that the wrong party is in court with you and the stamp proves that. All the other matter we are discussing here have nothing to due with because you not been foreclosed.In your case it not like your going to get the court to rule that the property is clear of any debt ever. But I do see if Fannie cannot get put on title that you can never be force to foreclosed, as there in no endorsement listing Fannie as the owner on the Note which means they cannot be in title and cannot authorize another to act for them!

  4. I just pRay for the justice system to hold up the burden is placed heavily on the judicious to stop the madness. I mean it when I say it’s like giving a hardened heroine addict the keys to pharmacy and the formulary including discounts for volume – the greed is same- there isnt enough for them ever and it escalates, and here we are a broken former glorious nation. Unless they are called to justice and punished like the savings and loan scandal it’s going to escalate. Ask Bill Black ask Eves Smith Ask Matt tiabbi to name but a few that are far more in the know than any of we humble bloggers pro se “rs” that have been on a very sharp learning curve not to mention full of abuses, in our efforts to get a just and equitable conclusion for the wrongs done to us.

  5. Deb, this will all blow up eventually, and it is getting closer every day.

  6. And that ” third party ” argument can be defeated
    Our names backed everything that went wrong by their hands.
    Check your credit reports check your IRS documents and the dates and amounts and compare then with your credit reports. The word identity theft comes to mind.
    Not an attorney. Just utterly disgusted.

  7. Dwight
    the word fraud was just too shocking five years ago when I filed suit, thing is as they present THEIR exhibited evidence further down the road – if you persist and walk in truth despite setbacks the ” wrongful actions” speak for themselves.

  8. See the thing about telling untruths is that you then must keep it up and tell 10 more untruths to cover up the first untruth and because they know the truth it gets tougher to cover their Tracks. So we now see the emperor was naked all along.

  9. The fraudulent documents are still being used in the court rooms, but most homeowners don’t have the forensic document examiners to inspect the docs and show the fabricated evidence like fake notes or fake stamped endorsements being added by servicers, etc.. And the battle over the Assignment of Mortgage documents have not gone well for homeowners , many courts are now ruling against homeowners who try and raise the fraud issue in the AOM .. the courts are saying we are only third parties to that contract between other parties, and we have no legal standing to argue about it during a foreclosure case.
    So as of right now the answer is yes, fraud is still being allowed.

  10. Right Louise
    The emperor is naked NAKED.

  11. Things are going to get real interesting when the first judge/attorney gets nailed for fraud on the court, admitting fraudulent documents into the court and on the record in foreclosure or foreclosure-related lawsuits.

  12. And the servicer can’t be the lender if we have a purported trustee fora trust for “certificate holders” waltzing into court a) as representing the trust and court b) as a buyer ( bank NA) to 1. Remove Lis pendens which was entirely legal to protect MY interest and the public record and 2.without service of process amongst other serious anomalies get a default judgement and sell the house when they never legally had right to possession. I can’t think of anything more legally egregious regarding my right to defend my property under due process of law and the United States constitution. Bad very very bad if they get away with this. Like I said it’s not over yet.

  13. On the other hand as in my cases (s) the fraud upon the court has placed at least two judges in very bad positions because they were tricked into decisions that had they been better informed I believe would not have made the rulings that they did against me. I’m still batting , this is not over by a long way.

  14. Neil getting there but he ignore the fact that unless you are a registered lender can you originate a loan, and even if funds were misused by a registered lender. The lender is authorized to lend, so it not that Countrywide or whatever lender could not lend but they misused funds in making the loan if this was the case.

    What I think happens is that the investors like Fannie & Freddie up front the monies for the loans to be originated, which maybe the reason there is no proof of a purchase of the loans after the fact! Fannie & Freddie are in business to get more loans into the system to create more and make monies on the by-product of the securities.

    I believe what Neil may fine was that the lenders were short cutting the process of a bank originating the loan only to sell them to Fannie and Freddie in the first place. However I don’t see how these funds coming into the bank and the bank making loan with it would be illegal because this is what a bank does!

  15. Well, looking at the last paragraph of this post that retired judges may be receiving money for their salary from the banks, does that also go to judges working in other capacities other than “retired”? Is there money being funneled from the banks to judges who are not retired? If so, this makes even more sense than that the judges’ only conflict of interest is that their pension plans are invested in mortgage backed securities. I have also noticed that some judges are invested in real property/foreclosures behind the scene and are doing just fine from the suffering of Americans who are losing their homes.

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