BANKRUPTCY PRACTICE: NAME ONLY THE ORIGINATING LENDER OF RECORD

submitted by Brian Davies

EDITOR’S NOTE: By naming only the originating lender of record — that is, the only instrument in the title record as per the county recording office, you immediately shift the burden onto any pretender lender to explain what they are doing in court. If you look down into the records in the link below you’ll see Davies objection and some excellent points he raises. My opinion is that the property value is unknown and unencumbered by a mortgage, if you know about the securitization path. Combine that with our loan specific title review, you get a value to put in if you want to, and then name only the originating lender as a creditor under unsecured claims because the mortgage was split from the note and note was split from the obligation. The MERS assignment is icing on the cake.

It’s my opinion that if you show the home as encumbered by the mortgage it is an admission of the validity of the encumbrance. That is an admission of a “fact” that is probably false. Why would you do that? In my opinion, generally speaking, NONE of these securitized “mortgages” are secured, NONE of the obligations are properly or legally described in the note and NONE of them are properly secured with a perfected lien in favor of an actual creditor. The security instrument is an “incident” to the note. But the note neither names the actual creditor nor discloses the true facts of the deal. The note is contrary to the Good Faith Estimate in that respect as well (a TILA violation).

So the obligation that arose when the borrower took the money is NOT described in the note, at least not completely. That means that the note, which is normally presumed to be evidence of the obligation, is not a complete description of the obligation and in fact is not even correct insofar as it identifies the creditor or lender. The note also does not contain the terms of the mortgage bond given to the lender (investor).

The mortgage bond received by the lender (investor) contains terms and parties that are not included in the note. Neither the bond nor the note are complete descriptions of the obligation.

Thus neither the note nor the bond can be accepted into evidence as the complete statement of the obligation. Even together they fail to show the actual path that the money traveled and they provide the context and conditions under which the note or mortgage could be accepted by the pool —- conditions that were in nearly ALL cases unfulfilled. There can be no proper accounting of the amount due nor a determination of whether there is  an actual default (failure of the CREDITOR to receive payment, not merely the the failure of the borrower to make a payment which might not be due).

MOTION FOR RELIEF FROM STAY BY ONEWEST. A PARTY NOT EVEN MENTIONED IN THE CHAPTER 7 FILING. HOWEVER, MOVANT ONEWEST COMES INTO THE COURT WITH 1) NO STANDING, 2) FALSIFIED AFFIDAVITS 3) DISCOLORED NOTES NOT COPIES OF THE ORIGINALS 4) SIGNED AFFIDAVITS BY BRIAN BARNHILL THAT ARE INACCURATE 5) DEED OF TRUST THAT IS FAULTY AND NOT PERFECTED 6) A SECOND ASSIGNMENT OF THE DEED OF TRUST WHICH TRIES TO CORRECT SECURITY INTEREST AND TITLE ISSUES.. DEBTOR ASKS FOR SANCTIONS. READ THE ENTIRETY AS IT IS LISTED AS UNSECURED DEBT, ONLY ORIGINATOR IS LISTED

http://www.scribd.com/doc/39002836/ONEWEST-HAS-NO-STANDING-MOTION-FOR-RELIEF-FROM-STAY-WITH-OBJECTIONS

They will get caught

Reg Z TILA Amendment requires new owners and assignees of mortgage loans to notify consumers of the sale or transfer

The Federal Reserve Board has issued an interim final rule under Regulation Z to implement the recent Truth in Lending Act (TILA) amendment that requires new owners and assignees of mortgage loans to notify consumers of the sale or transfer.

While mostly helpful in foreclosure defense,  the rule leaves open the question of ownership of the loans. Because of the practice of “assignment” of the loans to a special purpose vehicle, the Fed stopped there in its inquiry. If it had taken one step further it would have seen that the indenture to the mortgage backed bond conveyed an ownership interest in the loans supposedly assigned. it also leaves open the problem of whether the loans were accepted into the pool or were time-barred or were defective for failure to meet the requirements of recordation or recordable form set forth in the enabling documents.

The TILA requirement has been in effect since the May 20, 2009, enactment of the Helping Families Save Their Homes Act of 2009. Compliance with the specifics of the new rule is optional until January 19, 2010. As a result, new owners may (but need not) rely on the new rule immediately to ensure they are in compliance with TILA. Violations give rise to liability for statutory damages, including up to $4,000 per violation in individual actions or up to $500,000 in a class action.

The transfer notice requirement applies to all closed-end and open-end consumer-purpose mortgage loans secured by a consumer’s principal residence. It requires any person that acquires more than one mortgage loan in any 12-month period to provide a transfer notice without regard to whether the new owner would otherwise be a “creditor” subject to TILA. Mere servicers of mortgage loans and investors in mortgage-backed securities or other interests in pooled loans do not acquire legal title to loans and are not subject to the new rule. However, trusts or other entities acquiring legal title to the securitized loans are subject to the rule. The notice requirement is triggered by a transfer of the underlying loan, regardless of whether the assignment is recorded. Thus, assignees are not exempt from the duty to provide notice merely because the mortgage (as opposed to the note) is in the name of Mortgage Electronic Registration Systems (MERS), for example.

The new rule does not affect the separate notification requirement under the Real Estate Settlement Procedures Act (RESPA) for servicing transfers on mortgage loans. Accordingly, new owners who acquire both legal title to a mortgage loan and the servicing rights will need to satisfy both the TILA and RESPA notification requirements.

  • The notice must be given on or before the 30th calendar date after the date the new owner acquires the loan, with the acquisition date deemed to be the date that the acquisition is recognized in the new owner’s books and records. In the case of short-term repurchase agreements, the acquirer is not required to give the notice if the transferor has not treated the transfer as a loan sale on its own books and records. However, if a repurchase does not occur, the acquirer must give the notice within 30 days after it recognizes the transfer as an acquisition on its books and records.
  • The notice must be given even where the new and former owners are affiliates, but a combined notice may be sent where one company acquires a loan and subsequently transfers it to another company so long as the content and timing requirements are satisfied as to both entities.
  • The notice must contain the information specified by the new rule, including contact information for any agents used by an owner to receive legal notices and resolve payment issues.
  • The required information also includes a disclosure of the location where ownership of the debt is recorded. If a transfer has not been recorded in the public records at the time the notice is provided, a new owner may satisfy this requirement by stating that fact.

Cramdown in Chapter 13!!

see Bradsher Cramdown in Chapter 13

This case is an example of why forensic audits need to go much further than they currently do. Brad Keiser’s Workshop on forensic analysis will focus on the important issues that are usually missed in TILA or other reviews.

As the case points out, the usual rule is that lien stripping and cram-down on residential loans in a Chapter 13 are not possible. BUT in this case they did exactly that. The astute lawyer read the documents. It turns out that the “security instrument” (mortgage or deed of trust, depending upon where you are) secured not only the payment of the note but also the payment of taxes, insurance and other things. Thus, the court reasoned that the debt COULD be bifurcated into secured and unsecured.

The debt was originally $65k, but it was reduced to $22k as against the property because that is all the property was worth. The rest was unsecured, subject to normal Chapter 13 plan and treatment. Thus the debtor/petitioner got to keep their home, make the payments on the new secured loan balance and treat the rest as unsecured debt.

Most mortgages seem to have similar provisions. Forensic analysts should look carefully at the wording, since a lawyer or expert evaluating the case would need to know if the mortgage is subject to cram-down in this fashion.

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