Documents You Might Not Have Asked For Could be Key to Case

One of the interesting things that nobody is talking about yet is the fact that the “business records” are either not complete or the foreclosing party is producing documents that serve its purpose when it knows that it holds documents that would negate the very proposition they are proffering in court.

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One of the interesting things that nobody is talking about yet is the fact that the “business records” are either not complete or the foreclosing party is producing documents that serve its purpose when it knows that it holds documents that would negate the very proposition they are proffering in court. Certainly a void assignment fills that bill.


Business records that are incomplete are objectionable because they are not complete. It undermines the trustworthiness of the party proffering the use of those so-called business records. It requires much more foundation to admit partial business records. Or at least it should require it. But judges are not likely to be very receptive UNLESS you asked for these documents in discovery. That could tip the other way for you, of course, because you are tipping your hat on your trial strategy. But this might be an opportunity to bar the use of their business records altogether.
So here is something more important, I think. NOBODY ever sells a mortgage loan with just an assignment. Not now, not ever. People are saying that these loans are sold without documentation and that IS the way it looks sometimes. But we all know that the banks are masters of illusion.
They have previously entered into purchase and assumption agreements that provide for the “purchaser” to underwrite a loan before it is made and THEN the “purchaser” will “purchase it” in some scenarios, but in most scenarios there is no purchase because there was no loan from the “assignor” to the maker of the instrument.If there were no purchase and assumption agreements many household name originators wouldn’t exist. Sometimes actual banks served in the role of originators. It is all the same. None of them were on the hook for the risk of loss and THAT is the true test of a real party in interest. Bank regulators were either asleep or paid off to look the other way when they looked at the purchase and sale agreements which were a covenant to violate federal and state lending laws.


The “purchaser” is really a conduit for investor funds that have been laundered six times before they got to the closing table. But regardless of how many items it is laundered it still comes down to the same thing — the Payee on the note never made the loan. Someone else did, using money from an unidentified and perhaps unidentifiable group of investors/victims.


The only REAL reasons why a bank would not demand all the actions, documents, representations and warranties (warrants) is that it already knows what you are getting and you have already performed the due diligence in another transaction cycle. These are things that could be pursued in discovery, but you must assume that what I am saying is true if you are going to fight for them. And you must commit to being very aggressive in fighting for them.


The banks will say “we complied” when they give you nothing. You should have an expert affidavit that says the banking industry doesn’t work that way. They always perform due diligence unless they control the entire transaction cycle — in which case they still have documents to give you showing they controlled the transaction cycle.


Here is the normal track for the sale of a mortgage loan:

Take this quote from one of many websites that “assist” in the sale of mortgage loans:

“If you’re like us, you can’t really start your due diligence until you reference your MLSA (Mortgage Loan Sale Agreement) and check over to see what representations (reps) and warrants are contractually included or not. It’s a given that you must know your note seller as this is absolutely a relationship based business. Remember that collateral comes post closing, so you can’t just trust everyone without some sort of verification. Sure you can have safeguards like a Bailee letter, exceptions reports, Power of Attorney’s (so you can create your own assignments and allonges as opposed to waiting for the note seller to create them), and even escrow accounts, but at the end of the day know who you’re dealing with. It’s also important to know the cure periods and terms with any buyback scenarios or missing collateral. Back in 2007 contracts looked much different than today when there were plenty of reps and warranties. Today it’s mostly buyer beware with few reps and warranties at all. If you are ever in need of document retrieval, I highly recommend trying Orion Financial.”

More Investors Are Suing Chase: Cheer them on!

Submitted by Beth Findsen, Esq. in Scottsdale, Az


One of the many things I find interesting in this lawsuit is that FINALLY the pretender lenders are at least being referred to as originators and not banks, lenders or any of the other things that had most people believing.

Here too investors sue the rating agencies, Moody’s, S&P, Fitch paving the way for borrowers to make virtually the same allegations against the appraisers and the pretender lender who hired the appraiser.

The only thing left for the investors is to realize that the only way they are actually going to mitigate losses is by creating an entity that negotiates modifications directly with borrowers. Otherwise these intermediaries in the securitization chain are going to continue cleaning their clocks.

Here are some morsels you too might find interesting

7. The true facts that were misstated in or omitted from the Offering Documents
(1) The Originators systematically disregarded their stated underwriting
standards when issuing loans to borrowers;
(2) The underlying mortgages were based on appraisals that overstated the
value of the underlying properties and understated the loan-to-value ratios
of the Mortgage Loans;
(3) The Certificates’ credit enhancement features were insufficient to protect
Certificate holders from losses because the underwriting deficiencies
rendered the Mortgage Loans far less valuable than disclosed and the
credit enhancement features were primarily the product of the Rating
Agencies’ outdated models. As such, the level of credit enhancement
necessary for the Certificates’ risk to correspond to the pre-determined
credit ratings was far less than necessary; and
(4) The Rating Agencies employed outdated assumptions, relaxed ratings
criteria, and relied on inaccurate loan information when rating the
Certificates. S&P’s models had not been materially updated since 1999
and Moody’s models had not been materially updated since 2002. These
outdated models failed to account for the drastic changes in the type of
loans backing the Certificates and the Originators’ systemic disregard for their underwriting standards. Furthermore, the Rating Agencies had conflicts of interest when rating the Certificates.
8. As a result, Lead Plaintiff and the Class purchased Certificates that were backed by collateral (i.e., the Mortgage Loans) that was much less valuable and which posed greater risk of default than represented, were not of the “best quality” and were not equivalent to other investments with the same credit ratings. Contrary to representations in the Offering Documents, the Certificates exposed purchasers to increased risk with respect to delinquencies, foreclosures and other forms of default on the Mortgage Loans.

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