COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary
READ FULL DECISION HERE—-> MA S Ct 1-7-11 usbank
see ibanez-decision-analyzed
see CNN Report and Video
NOTABLE QUOTES:
“Where, as here, mortgage loans are pooled together in a trust and converted into mortgage-backed securities, the underlying promissory notes serve as financial instruments generating a potential income stream for investors, but the mortgages securing these notes are still legal title to someone’s home or farm and must be treated as such.” (e.s.)
“The executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder,” Gants wrote. “However, there must be proof that the assignment was made by a party that itself held the mortgage.“
“ The PPM, however, described the trust agreement as an agreement to be executed in the future, so it only furnished evidence of an intent to assign mortgages to U.S. Bank, not proof of their actual assignment. Even if there were an executed trust agreement with language of present assignment, U.S. Bank did not produce the schedule of loans and mortgages that was an exhibit to that agreement, so it failed to show that the Ibanez mortgage was among the mortgages to be assigned by that agreement. Finally, even if there were an executed trust agreement with the required schedule, U.S. Bank failed to furnish any evidence that the entity assigning the mortgage–Structured Asset Securities Corporation–ever held the mortgage to be assigned.”
Courts in other U.S. states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly.
Friday’s decision may also threaten banks’ ability to package mortgages into securities, including whether loans that were transferred improperly might need to be bought back.
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EDITOR’S COMMENT: I TOLD YOU SO!!!! This decision was inevitable. The Banks believed their political clout would outweigh the third branch of government — the judiciary — and it just doesn’t work that way. Not here in the USA.
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Top Massachusetts court rules against foreclosing banks
By Jonathan Stempel and Dena Aubin
NEW YORK | Fri Jan 7, 2011 1:10pm EST
NEW YORK (Reuters) – In a ruling that may affect foreclosures nationwide, Massachusetts’ highest court voided the seizure of two homes by Wells Fargo & Co and US Bancorp after the banks failed to show they held the mortgages at the time they foreclosed.
Bank shares fell, dragging down the broader U.S. stock market, after the Supreme Judicial Court of Massachusetts on Friday issued its decision, which upheld a lower court ruling.
The decision is among the earliest to address the validity of foreclosures conducted without full documentation. That issue last year prompted an uproar that led lenders such as Bank of America Corp, JPMorgan Chase & Co and Ally Financial Inc to temporarily stop seizing homes.
Courts in other U.S. states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly.
Friday’s decision may also threaten banks’ ability to package mortgages into securities, including whether loans that were transferred improperly might need to be bought back.
Wells Fargo and U.S. Bancorp lacked authority to foreclose after having “failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph Gants wrote for a unanimous court.
Wells Fargo was not immediately available for comment. U.S. Bancorp spokesman Steve Dale said the ruling has no financial impact on the bank, which has “no responsibility for the terms of the underlying mortgage or the procedure by which they were transferred” into a mortgage trust.
“What they were doing was peddling these mortgages and leaving the paperwork behind,” said Michael Pill, a partner at Green, Miles, Lipton & Fitz-Gibbon LLP in Northampton, Massachusetts, who represents homeowners and is not involved in the case.
In early afternoon trading, Wells Fargo shares were down nearly 4 percent at $30.92, while U.S. Bancorp was down 1.4 percent at $25.93.
Bank of America stock was down 2.8 percent, JPMorgan fell 3.7 percent, and the KBW Bank Index, which includes all four lenders, was down 2.3 percent. Major U.S. stock indexes were down 0.6 percent to 0.8 percent.
‘UTTER CARELESSNESS’
In the Massachusetts case, U.S. Bancorp and Wells Fargo had said they controlled through different trusts the respective mortgages of Antonio Ibanez as well as Mark and Tammy LaRace, who lost their homes to foreclosure in 2007.
The banks bought the homes in foreclosure, and sought court orders confirming they had title. A lower court judge ruled against them, and Friday’s decision upheld this ruling.
In a concurring opinion, Justice Robert Cordy lambasted “the utter carelessness” that Wells Fargo and US Bancorp demonstrated in documenting their right to own the properties.
Massachusetts is one of 27 U.S. states that do not require court approval to foreclose.
Gants did suggest in his opinion how banks might properly transfer mortgages via securitization trusts.
“The executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder,” Gants wrote. “However, there must be proof that the assignment was made by a party that itself held the mortgage.”
The cases are U.S. Bank N.A. v. Ibanez and Wells Fargo Bank NA v. LaRace et al, Massachusetts Supreme Judicial Court, No. SJC-10694.
(Reporting by Jonathan Stempel and Dena Aubin; Editing by Lisa Von Ahn and Matthew Lewis)
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: Assignment. Notice, foreclosure, Foreclosure of mortgage., Ibanez, Massachusetts, Mortgage, non-judicial, ownership, Real estate, real property, Record title. Mortgage | 27 Comments »