Two Foreclosures, One Property, One Owner, Both Claiming Possession of the Original Note, Neither Claiming Ownership of the Debt

Originally posted in November, 2008 this illustrates what happens when you destroy notes and then “recreate” them for purposes of claiming you have the original in court. The fact remains that neither of them had the original note because, as the Florida Bankers Association told the Florida Supreme Court, it was industry practice to destroy the notes and then rely on the image. [NOTE: An error occurred in which it was printed here that they relied on the original. This was an error].

Had it not been for a judge who was alert and had a good memory BOTH would have received a foreclosure judgment and possibly the clerk would have sold it twice, once to each claimant under a “credit bid” signifying that it was the owner of the debt — a blatant lie by both claimants.

Foreclosure Mess: Two Different Plaintiffs Claim to Own Same Mortgage
Posted By Amir Efrati On November 14, 2008 @ 1:38 pm In Global | No Comments
It’s been a while since we revisited the foreclosure crisis, which has obviously gotten worse. Foreclosure numbers are skyrocketing, while numerous states, the federal government and financial institutions are tackling the issue in various ways.
For the legal beagles at so-called foreclosure “mills,” which do assembly-line lawyering for lenders and other mortgage owners, the crisis has meant lots of work but also woes, including sanctions and stern lectures from judges (examples here, here and here). Why are judges so frustrated? The increased volume is leading to mistakes and irregularities, which we’ve chronicled before.
Now comes the foreclosure case of Joanne Fredenburg, a widowed homeowner in Lehigh Acres, Fla., where real estate prices have plummeted. Last month Ms. Fredenburg was served with not one but two foreclosure lawsuits from two different plaintiffs that both claimed to own her promissory note and mortgage and said she owed them each more than $276,000. That, of course, is impossible. (Click here and here for the two complaints.)
One lawsuit seems to make sense. The plaintiff is a unit of Deutsche Bank that acts as a guardian or “trustee” for investors of mortgage-backed securities. Those investors collectively own loans such as Fredenburg’s. But the other lawsuit was filed by a mortgage-servicing company that collects borrower payments on behalf of investors. Surely that is a mistake, as servicers don’t typically own loans.
Indeed, following an inquiry by the Law Blog, we’re told that the servicer, American Home Mortgage Servicing, will withdraw its lawsuit, which was filed by Miami-based Adorno and Yoss LLP. (We’ve put out calls to both and will let you know if we hear back.)
But Ms. Fredenburg’s lawyer is none too happy. Even after American Home withdraws its suit, J. Rex Powell of Cape Coral says he will ask for discovery to find out what payments his client made, whether they were paid to the right entity and whether she was given the proper credit. Given that most people don’t defend against foreclosure lawsuits and the plaintiffs are awarded default judgments, Powell says the case raises an interesting question: Are entities wrongly filing foreclosure suits and collecting on notes they don’t own?
Perhaps Florida Circuit Judges Jay Rosman or Michael McHugh, whose dockets include the Fredenburg foreclosure suits, will be able to shed some light.

6 Responses

  1. corruptionpedia2, — thanks for the article.

    I have been saying for a long time that the loans were placed (or manufactured) to be in default before anyone actually defaulted or refinanced. These loans then become what is called “distressed” debt, and lots of distressed debt company “buyers” such as Countrywide, Ameriquest, New Century, etc. made a lot money (or their creators did).
    They restructured the debt at fake refinance closings. . .

    It is unthinkable that these millions and millions of loans, who had no real asset balance sheet accounting, were all actually in default. If people were actually defaulting at that rate, the economy would have collapsed long before the financial crisis was actually disclosed. It did not.

    Then these non-bank originators sold the cash flows to the investment banks (security underwriters), which enabled then to purchase more “distressed debt” that they would restructure with the help of the “servicers” they hired. It is easy to manufacture default debt without the borrower ever even knowing it happened. The trusts and trustee were the “shell” to pass through cash flows to investors who claimed to be duped. Title was not passed through, because there is no “Title” for distressed debt. These trusts are now closed, with no cash flow pass through. However, rights to foreclosure by the shell trust are still falsely claimed.

    Although Investors claim to have been duped, I don’t find this persuasive. These were sophisticated investors who knew what they were investing in — cash flows of alternative investments with higher rates of return then the standard GSE mortgage securities provided. GSEs themselves invested in these shell conduits. Hedge funds loved, and continue to love, these distressed debt “investments.”

    Does the government know all this? Yes. Did they do anything about it? No. They acted quickly and irrationally to cover up what they had failed to regulate. What they had failed to stop. Congress not only allowed it, but also passed legislation to promote it. They will not help now.

    The good news is – thanks to Neil and others (including a few good judges), people are finally discovering what really happened. All those bogus documents (the effect) are for a reason (the cause). Maybe, the truth will finally get exposed.

    Thank you.

  2. A good article about Caliber Home Loans foreclosures fraud

    https://parkplacesecurities.com/caliber.html

  3. Participating parties are Judges; and Wall Street collusion is with the Courts

  4. @Fred Schneider I’m submitting the “Wall Street and Government Collusion” to Congress. Will be posting. Start researching local areas big and small and flood elected official co conspirators!

  5. Good old days when it was presumedca trustee was a gatekeeper

  6. We always hear talk of “foreclosure mills” but do they actually exist and what has been done to identify, track down, and actually prove they exist?
    Was the David Sterm Lawfim one of these mills and how did they finally get him?
    There needs to be a nationwide blitz to go after, expose, and disban these illegal and partisipating parties.
    I see there are more and more foreclosures immerging again in our little area and I would supspect this is true all over our nation??
    Really sad about crooked, fraudulent Seterus allegely sellling out to Nationstar Mortgage LLC who just recently changed their name of all things to “Mr. Cooper”!! Mr. Cooper already as several lawsuits against them and it is crasy now many Nationstar has had and who the execs are at Mr. Cooper with history and background with Bank of America, Bear Sterns, and Washington Mutual!! Now really get crazy and probaby paranoid and search very deep to see what Bank of America and Zillow are doing!!! Little wonder out wonderful country has been conned over and over again!! When the stock market and the lenders are in cahoots it is NOT good!!! Semper Fi

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