BAD FAITH: Shack Decision Unravels the Chase-Wamu Mystery -At least in Part

Shack Blasts Chase, Fannie Mae for Bad Faith on Wamu Merger

It is obvious that documents were produced for Shack to issue these rulings. The affidavits to which he refers should be obtained in their entirety. There is lots to take away from this decision, but most important, is that Chase never acquired the loans from WAMU. The loans originated or acquired by WAMU were already sold to investors, trusts and Fannie or Freddie. The issue with Fannie and Freddie of course is that they were merely fronting for “private label” securitizations hiding behind the veil of the GSE’s who were mere guarantors and not lenders. I’d like to see any agreement and transactional documents showing the alleged purchase by Fannie, but it is presumed in the Shack Order and Findings.

It is also obvious that the finding that Chase was not the owner of the debt at any time came from an admission from both a Fannie Mae representative in an affidavit from an alleged Fannie Mae representative. We should direct discovery in Chase cases to that person in Fannie Mae who says they acquired the subject debt and that Chase merely received the servicing rights in the Chase-WAMU merger.

Note that Fannie Mae is considered by Shack to have acted in bad faith, and that Fannie was less than forthcoming in its description of itself stating that they might be the owner or they might be the trustee (pursuant to the Master Trustee Agreement published in 2007) for a securitized trust. Note also that Fannie at no time was chartered as a lender. Thus it could not originate any loans and never did so. The vagueness with which Fannie Mae addresses the issue of ownership shows that the hiding and non-disclosure in bankruptcy courts and state courts continues across the country.

The admission from Fannie that they “might” be the Master trustee for allegedly securitized assets (debts arising out of fictitious transactions on paper that looked like mortgage loans) is both alarming and encouraging. The rush to foreclosure is partially explained by this chaotic pile of fraudulent paper trails.

When you take into account the non stop servicer advances, you can see what the parties are hiding — that the real creditor on those debts, has been paid all the interest they were expecting, that the principal is being paid in settlements with pennies on the dollar, and that the default alleged in notices from servicers and informing the borrower of the right to reinstate were defective, to wit: that the amount stated as required to cure the alleged default was and remains incorrect. The amount should have been reduced by third party payments including but not limited to the servicer advances which were not loans, and thus could only be characterized as PAYMENT, which is the ultimate defense against a lawsuit or any enforcement mechanism designed to collect a debt.

The dirty little secret is that they diverted title and money from the investors and converted what could have been a secured loan into an unsecured loan. The advances and payments by third parties satisfied the debt that arose when the borrower took the loan. They in turn MIGHT have claims for contribution or unjust enrichment but they are most certainly not protected by a pledge of collateral either as mortgage or assignment of rents or anything else.

Note that it could not have acquired loans except with money from what were represented as securitized trusts with Fannie as master Trustee. Therefore there are no circumstances under which Fannie or Freddie could be owners of the the debt with rights to enforce except upon the only event in which money is paid by Fannie for the loan — a guarantee payment AFTER FORECLOSURE) that is the only transaction permitted under its charter. This point was missed by Shack or ignored by him, because he had bigger fish to fry — the lawyers for Chase itself with a copy of the order to be served upon Jamie Dimon, the head of Chase.
The fact is that with the WAMU bankruptcy, seizure by OTS and appointment of FDIC, there were no assignments, agreements of sale or even a permission slip under which Chase could or did acquire loans from WAMU. But that didn’t stop Chase from claiming exactly that in tens of thousands of foreclosures.
In cases where Chase is allegedly at the root of title through the merger with WAMU, it would be appropriate to site to the Shack case, get the case documents, get a Title and Securitization report (see http://www.livingliesstore.com) and lawyers should look into a motion for summary judgment, or a motion for involuntary dismissal with prejudice. Even where Chase might allege that it is filing the foreclosure as a representative of Fannie or Freddie, the basis for that allegation needs to be in their pleading or it is not an ULTIMATE fact upon which relief could be granted. Discovery should be aimed at getting the documents upon which Chase allegedly relies in showing that it has the authority to represent Fannie — and don’t stop there. The truth is that nearly all the so-called Fannie and Freddie loans were veils for the private label securitization in which the money was diverted from the trust, as was the title, leaving Fannie and Freddie as well as the investors and the buyers holding nothing.

In cases where the statute of limitations has already run, the dismissal of the foreclosure action, is barred in most cases from ever being brought again by anyone. But the dismissal against Chase should be with prejudice in all events because it isn’t the creditor and therefore does not satisfy the statutory requirements in Florida, and I presume all other states, to submit a credit bid at auction in lieu of cash.
The Judges are beginning to understand that by applying basic contract law, they can clear their dockets. It is up to us to help them. The offer of a loan was met with acceptance by the borrower but the loan never occurred. The transfers also had offer and acceptance but again no money because the investors’ money was used (outside the trust) directly to fund the origination or acquisition of the loan. This was part of a larger scheme to defraud to investors whose money was to have been deposited into the trust and then used to fund origination or acquisition of the he loans within 90 days (the cutoff).

The investment bank fraudulently induced (see complaints filed by investors, insurers, government guarantee entities etc.) the investors to give them money for an investment into a controlled trust when in fact they diverted the money for their own purposes, taking outsized fees for themselves as the toxic loans materialized to “support” the alleged investment into loans. That is the “mismanagement” part of investors’ allegations — diversion of money into a PONZI scheme.

The investment bank fraudulently diverted title to the loans to strawman entities or were — sometimes even by name (see American Brokers Conduit) — mere conduits for undisclosed third party lenders. The argument that the parties managed to hide this from the borrower long enough for the statute of limitations to run out on TILA claims is an affront to the court system and to the statutory scheme enacted by Congress to protect borrowers from predatory lenders and “steal” deals where huge fees were taken, rather than earned, without disclosure to the Borrower.

So the first element of fraud alleged by investors is diversion of the the money. The second is diversion of the paperwork that would have protected the investors at least to some extent. In this scheme title to the loan papers was intentionally diverted from the owners of the the debt, thus rendering the so-called mortgage documents unenforceable — all alleged by investors, insurers and other co-obligors who have discovered to their chagrin that each of them paid the investment bank 100 cents on the the dollar on each loan multiple times.

And yet borrowers continue to seek modifications, which means they are not looking for free houses. Even knowing they are dealing with criminals the borrowers are willing to start paying these thieves if the terms can be adjusted to give them the benefit of the bargain that was intended at origination of the purchase money mortgage or refinancing or second mortgage or HELOC.

That leaves the servicers and their lawyers being the only ones who want Foreclosures because they want a free house and/or they want the foreclosure to recapture Servicer advances to the creditors — advances that vastly reduce the amount owed and which cure the alleged borrower default. That has now become a foreclosure folly in which the servicers and their lawyers are the only parties who want it. The investors don’t care because they are getting settlements for the fraud of the investment banks for creating unenforceable loan documents (that are frequently enforced anyway because of judicial ignorance) and diversion of investor money.

In the end, the “clean hands” that Shack talks about are clearly absent from both Servicer and government sponsored entities and as judge Shack states in his decision, wrongdoers should not be permitted to profitf or their wrongdoing. If that means a windfall to the borrower, so be it. It can be likened to the old usury laws and the current usury laws where the principal of the debt is wiped out and the fraudster is hit with a judgment for three times the principal, three times the interest or both.

WHY JOIN ORIGINATOR AND THE PARTY WHO PARTICIPATED IN THE ILLEGAL TABLE FUNDED LOAN

Amongst the cases I review and manage, the question was raised by one of the homeowners as to why I insisted on holding both the originator and subsequent intermediaries in the alleged securitization chain and/or table-funded loan where both the party alleging having (1) the capacity to sue see SEC Corroborates Livinglies Position on Third Party Payment While Texas BKR Judge Disallows Assignments After Cut-Off Date, (2) the standing to sue and/or the authority to initiate foreclosures and (3) financial injury where they allege sale or assignment of the note. The reason is simple from a tactical and legal point of view. I wish to close out their options to keep moving the goal posts.

Here is the answer I wrote to the customer, whose property is located in a judicial state. This particular person is being pro-active — always a wise choice — in that he has been making his payments, was told to to stop making payments if he wanted a modification which he did initially and then changed his mind and reinstated, and remains convinced he was the victim of various forms of fraud and crimes including false Appraisals of the supposedly fair market value of the property at the time of the loan closing or the alleged loan closing. His goal is not a free house. His goal is to pursue any rights you might have for modification or settlement of his claims with respect to the illusion of a loan closing and the office of a closing agent. As any reader of this blog knows, it is my opinion that any such loan closing was in fact an illusion and that all the parties participating in that illusion were paid actors pretending to be something they were not —  less creating plausible deniability for any of the improper actions of the intermediaries at the “loan closing.”

There is a reason why I insist on continuing the joinder of those two defendants. Embrace wants to be dismissed out with prejudice because it says that sold the loan to Wells. I want to say that they didn’t sell the loan to Wells.  If I prevail on that point then Wells Fargo is out as a plaintiff in any foreclosure they might file, and potentially out as a servicer since they might not be able to show any authority.  If that is the case then they owe you an accounting for all of the money they collected from you and a statement of what they did with the money that they collected from you. You might well have a cause of action against Wells Fargo for taking money under false pretenses.

 If I don’t Prevail on that point and somehow they are able to show that Wells Fargo paid for the loan and owns the loan by virtue of that payment, then Embrace is still a proper party in the action because they are the owner of record of a mortgage based on a note that was never funded by Embrace.  The issue here is whether or not the mortgage was transferred with the debt and that issue is tied closely with the issue of securitization, which both of them deny. I believe that I will be able to show that the loan is subject to claims of securitization on behalf of a loan pool that may never have existed or which might not exist now.  and if I am able to show that the loan pool was never funded and therefore could never have paid for the loan then the apparent authority of both defendants is eviscerated.

  Either way, I don’t want to let either of them out of the litigation quite yet.  If we prevail on the question of whether or not there was an actual sale and the sale was authorized (see my blog article from yesterday) then Embrace is the only party left on record in the recording office. At that point I would drill down on them to see whether or not they can show that they fulfill their part of the bargain with you, to wit: that you sign a note and they give you adequate disclosure under the law and they fund a loan to you. It is my position that they did not give adequate disclosure and that they did not fund a loan to you even if the loan was not securitized. The best they can say is that this was a table funded loan which is according to Reg Z of the Federal Reserve a predatory loan  per se if it was part of a pattern of conduct.

 Given the statistics and information we have about both defendants it is my opinion that the chances are 96% that the loan was allegedly sold into the secondary market where it is the subject of a potential claim from an asset pool. The problem I wish to reveal here is that the entire chain of ownership collapses on itself. The other problem that I want to addressed is who actually received the money that you pay every month and what did they do with it (who did they pay).  the strategy here is to show that regardless of whether or not a claim of securitization exists, there were co-obligors (Wells Fargo),  insurance payments and proceeds of credit default swaps and multiple resales all of which should be applied against the amount owed to the real creditor, whoever that might be, thus reducing the loan receivable.

 If I can tie the loan receivable to one which derives its value from the alleged loan made to you, even if the originator paid for it, then there is a strong argument for agency and allocation of receipts under which the payment of monthly payments and the receipt of insurance proceeds and the proceeds from other obligors (including but not limited to counterparties on credit default swaps) were received and kept, like in the Credit Suisse case. 

From that point forward it is a simple accounting task to allocate third-party receipts of insurance and hedge money to the benefit of the investors whether they received it or not. The auditing standards under the rules of the financial accounting standards Board would require a further analysis and allocation of the money received —  specifically the reduction of the loan receivable or bond receivable held by the investors (directly if the REMIC trust was ignored or indirectly if the agents for the trust purchased insurance and hedge products, the proceeds of which should have been credited to the investors.

 If the investors are the real creditors than the amount that they are entitled to have repaid to them does not exceed the amount they advanced. It practically goes without saying that if the money advanced from investors was based on their reasonable belief that they were acquiring title to the loans funded by the money advanced by the investors, they should recover part or all of their investment to the extent that the other players (see the SEC order against Credit Suisse) paid for insurance and hedge products using the money of the investors and kept the proceeds for themselves —-  thus explaining rising reports of profits in the banks who are supposedly merely intermediaries in the conduct of commerce which was in sharp decline.

 In the end, under a series of unjust enrichment and other common-law actions, as well as the requirements of statute and the terms of the promissory note executed by the borrower, all money received in that manner should reduce the principal balance due from the borrower because the creditor has already been paid either directly or indirectly through its agents who were either authorized or possessed of apparent authority.

In fact , the great likelihood is that the banks received substantial overpayments amounting to multiples of the original principal amount of the loan.  According to both law and the terms of the proposed agreement between the borrower and the apparent lender, subject to the terms of the documents themselves as well as state and federal law, the borrower is entitled to recover all such undisclosed payments and receipts which are defined under the truth in lending act as “compensation.”

 Thus while the creditors not entitled to any more recovery than the amount advanced under an alleged loan, the borrower is entitled to full recovery of all money paid in connection with or related to the loan received by the borrower, regardless of the original source of the loan and any agreements between the intermediaries in the alleged securitization chain that do not have the signature of the borrower on them. The reason is public policy. While securitization was not considered in the original passage of laws  it was the overreaching by banks to the disadvantage of consumers and borrowers that was sought to be discouraged by penalties that would be so great as to prevent the practice altogether.

 Usually it is money that is taken under false pretenses and the illusion of securitization claims is no exception. But in the case of the borrower it is the signature of the borrower that was obtained under the false pretenses that  the party obtaining the borrower’s signature. The consideration was the money advanced by an unrelated party tot he transaction (investor) who thought their money was first going through a REMIC trust that would give them certain tax advantages.

Regards

Neil

 Garfield, Gwaltney, Kelley & White

4832 Kerry Forest Parkway, Suite B

Tallahassee, Florida 32309

(850) 765-1236

STRATEGY: FORECLOSURE BY PRETENDER LENDER FOLLOWED BY BORROWER’S ACTION FOR DAMAGES

OCC: 13 Questions to Answer Before Foreclosure and Eviction

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available TO PROVIDE ACTIVE LITIGATION SUPPORT to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

EDITOR’S ANALYSIS AND PRACTICE TIPS FOR LAWYERS: One of the things that I noticed about the cases which I have followed or which have been reported to me anecdotally is that the borrower or borrower’s attorney invokes defenses and counterclaims that makes the case far more complex than the judge is willing to hear.

If you really want to win on the trial court level or make a good record for a successful appeal, the legal and factual argument needs to be simplified. I have previously made a big point about how a judge has very little choice but to allow the foreclosure to proceed once the elements of a foreclosure have been admitted by the borrower or borrower’s attorney. All the other issues are really the basis of a lawsuit in which the causes of action seek the remedy of monetary damages.

Foreclosure is an equitable remedy which calls for less judgment on the part of the judge that it does for him or her to perform a ministerial act. The mistake that is being made by most attorneys (and perhaps I added to the confusion unintentionally) is that  they have failed to distinguish between the equitable and legal remedies. This calls for some careful action by the lawyer or else he or she will be open to a later argument of collateral estoppel or res judicata.

In the nonjudicial states the equitable remedy of foreclosure is made even more ministerial and less subject to challenge based upon the merits of the claim of the pretender lender to collect payments from the borrower and to foreclose when the borrower ceases to make payments. The fact that the system was not set up by the legislature to accommodate or regulate wrongful foreclosures by non-creditors is not a basis for asking a judge to rewrite the law.

In Massachusetts this issue was highlighted in the Eaton case. Before that case Massachusetts specifically allowed the equitable remedy of foreclosure merely upon allegation and proof that the foreclosing party possessed the mortgage document under circumstances where there was at least probable cause to believe that the foreclosing party had the right to enforce it and use it.

In the Eaton case the court was careful to state that the ruling applied only prospectively and not retroactively. In that case they attempted to deal with the issue of whether an actual debt existed,  whether a creditor debtor relationship existed between the foreclosing party and the homeowner, whether the note and mortgage were valid, and whether a foreclosure could go forward without any showing that the foreclosing party was a creditor or even had possession of the note. The court decided that ownership of the note was essential to allowing the foreclosure to proceed.

Based upon the huge volume of statistical and anecdotal evidence there can be little doubt that most of the foreclosures and foreclosure sales have been illegally conducted and wrongful. That doesn’t mean they are void. The purpose of the statutes as they are written is to enhance  liquidity and certainty in the marketplace; thus they allow almost every type of foreclosure to proceed through the conclusion of those proceedings as set forth in the statutes, with the added presumption that if malfeasance lay at the core of the foreclosure proceeding, the borrower would have an adequate remedy at law, to wit: a lawsuit for compensatory damages, punitive damages and exemplary damages.

Of course we all know that an action for damages is not an adequate remedy for somebody who has been evicted from their own home. But the problem is that before the securitization scam, the idea that anyone would attempt to foreclose on a mortgage without being a creditor and having no relationship to a creditor and without having a single cent invested in either the origination or acquisition of the loan would have been regarded as pure fantasy. From that standpoint the legislation makes sense. If you feel you are fighting an uphill battle, look at it from the point of view of the legislature and the banks that were making conventional loans and you can easily see why the law facilitated the mortgage foreclosure process.

When I was first interviewing law professors and judges back in 2007 and 2008 the unanimous opinion was that it would be very difficult to stop the foreclosures from proceeding but very easy to win an action after the foreclosure seeking monetary damages. The interesting thing here is that these people instantly understood that the lawsuit would have alternative counts. Either the pretender lender had an actual interest in the loan as evidenced by the note and mortgage or they didn’t.

If they did have an interest in the loan then the causes of action would be based on breach of contract and perhaps unjust enrichment along with statutory violations taken from federal and state law. There could also be an action for wrongful foreclosure that is recognized to exist in the common law and appears to be more of an action in tort than contract.

If they didn’t have an interest in the loan then there would be no action in contract since you would be alleging a lack of privity and defects in the disclosure documents, and closing documents including but not limited to the note and mortgage. It appears to me that this action would be based mostly on intentional interference in the contractual relations of another and both statutory and common law fraud in the inducement and fraud in the execution. Statutory actions brought under the truth in lending act might be sufficient to state a cause of action for treble damages, interest, costs of the action and recovery of attorney’s fees.

The point raised by the law professors and other experts with whom I consulted was that the goalpost would constantly be moved as the borrower attempted to stop the foreclosure and sale from going forward. Once completed, however, the actions of the pretender lender are essentially engraved in stone.

The action for damages should of course be accompanied by a demand for jury trial. The liability portion of the trial should be relatively simple involving simple arithmetic and a logical progression of claimed ownership of the loan. The last defensive strategy of the banks is going to be based on circular logic, to wit: that there is no damage because the foreclosure sale was valid and that the sale must be considered valid because it is already done; and if it is already done the deed issued upon foreclosure sale at the alleged auction is presumptively valid. In other words “what we did was valid because we did it.”

In my opinion there is big money in these lawsuits for damages and lawyers are encouraged to do the research and analysis. My firm is taking these cases on contingency where the right elements are present. So far everyone who has done their own research and analysis has arrived at the same conclusion expressed in this article. But there is a huge trapdoor that litigators must avoid.

Just like a petition for bankruptcy creates an administrative proceeding before a bankruptcy judge which is not the same as a civil litigation proceeding which would be filed in front of the federal district judge, a litigator in a foreclosure action must be careful to narrow the issues such that the foreclosure proceedings do not include allegations and proof directed against the pretender lender for not being the creditor and not having any authority to represent a creditor.

In judicial states this would mean a motion to dismiss or motion to strike any allegation that might lead to a final judgment in which the court finds a debt owed  to the pretender lender from the homeowner.

The point must be made that the preoccupation of the judge with the payments from the borrower should mean that “payments” are at issue. If payments are at issue than the payments made and received by the pretender lender and its predecessors or successors must be given equal time in a court of law — not just payments made and received by the alleged borrower.

Strategically the litigator should point out that the foreclosure process is essentially an administrative process involving ministerial duties by the judge. It should be argued that if the judge wants to allow the foreclosure to proceed and to allow the sale at auction to proceed, that is one issue.

But if the judge wants to enter a judgment based upon a debt, and a note and mortgage which supposedly describe the debt and the repayment terms, and based upon alleged ownership of the debt —  then the party intending to foreclose must allege injury which means that they too are required to produce evidence of payment and evidence of loss. The only acceptable evidence for that would be a canceled check, wire transfer receipt or other actual document generated by a third-party showing the actual movement of money.

Thus the judge should be guided towards a judgment that he or she already wants to enter, to wit: allow the foreclosure to proceed. In the lawsuit filed by the borrower after the foreclosure sale a different judge will probably hear the case. If presented skillfully, the judge may react warmly to the opportunity of getting another case off of their docket.

Critics say Michigan foreclosure bills seek to ‘get people out of their homes quicker’
http://www.mlive.com/politics/index.ssf/2013/05/critics_say_michigan_foreclosu.html

Keeping The ‘Recovery’ Dream Alive; 3 Big Banks Halt Foreclosures In May
http://www.zerohedge.com/news/2013-05-28/keeping-recovery-dream-alive-3-big-banks-halt-foreclosures-may

Banks Snap Up Foreclosure Aid Meant for Borrowers
http://www.hispanicbusiness.com/2013/5/28/banks_snap_up_foreclosure_aid_meant.htm

Activist homeowners take foreclosure fight to the DOJ
http://www.housingwire.com/fastnews/2013/05/28/activist-homeowners-take-foreclosure-fight-doj

Regulators probing banks for faulty debt collection practices
http://www.washingtonpost.com/business/economy/regulators-probing-banks-for-faulty-debt-collection-practices/2013/05/28/9f40bca2-bbd0-11e2-89c9-3be8095fe767_story.html

 

Quiet Title Claims Explained

see also http://livinglies.me/2013/04/29/hawaii-federal-district-court-applies-rules-of-evidence-bonymellon-us-bank-jp-morgan-chase-failed-to-prove-sale-of-note/
If you are seeking legal representation or other services call our Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.
The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Analysis: If you are thinking that with all the publicity surrounding the obvious fatal defects in the millions of foreclosures already completed, quiet title should be unnecessary, you are probably right. The fact is that the real world is more complicated and as Elizabeth Warren and several dozen bloggers and journalists have pointed out the average of $300 per homeowner being paid to settle the matter is not just inadequate it is stupid. No amount of money will actually cure the current title corruption on record in all 50 states due to practice of allowing complete strangers to the transaction to self-anoint themselves as creditors, foreclose on property and submit a credit bid at auction when they were not owed any money and there was no credit relationship between the homeowner and the bidder.

Quiet Title is an effective tool but it is not a silver bullet. It is about what is contained in the county records. If someone accidentally (or on purpose) records a lien against your property and they refuse to retract it, then you are forced to file an action with the Court that says I own the property and my title is clouded by documents that were recorded as liens against my title.

Those liens are not lawful, and they should be declared null and void or at a minimum the court should issue a declaratory statement based upon facts of the case that sets forth the stakeholders in the property and the nature of their claim.

In order to claim the latter, you would need to state that while the lien is unlawful, the party named on the lien, or the party claiming to hold the right to the lien, refuses to cooperate with clearing title or to explain the nature of their claim. Thus the homeowner is left with a lien which is unlawful and a claimant who insists that it is lawful. The homeowner is in doubt as to his rights and therefore asks the Court to quiet title or declare the rights of the parties.

In filing quiet title claims the mistake most often made is that it is being used defensively instead of offensively. The complaint that fails merely attacks the right of some pretender lender to foreclose. That is not a quiet title action. That is a denial of the debt, note, mortgage, default, notice etc.

And the Courts regularly and correctly dismiss such claims as quiet title claims. You can’t quiet tile because someone does not have a right to foreclose. You can only quiet title if you can assert and prove to the Court that the items on record do not apply to you or  your property and therefore should be removed.

AND you can’t get through a motion to dismiss a declaratory action if you don’t state that you are in doubt and give cogent reasons why you are in doubt. If you state that the other side has no right to do anything and end it there, you are using quiet title defensively rather than offensively in a declaratory action.

Stating that the pretender lender has no right to foreclose is not grounds for a declaratory action either. If you make a short plain statement of FACTS (not conclusions of law) upon which the relief sought could be granted you survive a motion to dismiss. If you only state the conclusions of law, you lose the motion to dismiss.

In such a declaratory action you must state that you have doubts because the pretender lender has taken the position and issued statements, letters or demands indicating they are the owner of the lien but you have evidence from expert analyses from title and securitization experts that they are not the owner of the line and they never were.

Remember in securitized transactions you would need to name the original named payee on the note and the secured party(ies) and state that they never should have recorded the lien because they did not perform as required by the agreement (i.e., they didn’t loan you money) and/or because they received loss mitigation payments in excess of the amount due. If you want to get more elaborate, you can say that they now claim to have nothing to do with the loan and refuse to apply loss mitigation payments to the loan even though they were received.

The problem in Florida is that such claims may be interpreted by the Clerk as claims relating to land and title which requires the ungodly amount of $1900 in filing fees alone, which I personally think is an unconscionable and unconstitutional denial of access to the court to all except people with a lot of money.

So you might want to go with slander of title seeking money damages or failure to refund over-payments received from sale or mitigation payments relating to your loan. That COULD be the basis of a claim in which the property is already sold at auction, short-sale, or resale. If the pretender lender received the payoff or the property illegally and then fraudulently executed a satisfaction of mortgage even though they were never the lender nor the purchaser of the loan, then you, as the owner of the property are probably entitled to that money plus interest and probably attorney fees.

PRACTICE NOTE: Strategically it seems like it is tough going if you attack the title under correct but unpalatable causes of action (i.e. actions that the judicial system already has decided they don’t like the outcome — a free house to the homeowner). So the other way of skinning the cat is to file actions for damages and that I think is the future of mortgage litigation. The basic action is simple breach of contract (the agreement to enter into the loan transaction and/or the note).

Filing suit for damages AFTER the sale gives you playing field without moving goal posts and allows fairly simple straightforward causes of action which many attorneys will soon realize they can take strictly on contingency or mostly on contingency. The net result may well be either the tender of money and/or the tender of the property back to the homeowner or former homeowner in lieu of payment for damages.It also opens the door to the possibility of punitive, treble, or exemplary damages or some combination of those.

At my firm we are looking hard at closings where the pretender lender took the money and ran on a short-sale or resale. It is clear-cut. They either had a right to the money or they didn’t. IF they didn’t have the right to execute the satisfaction of mortgage or if they fraudulently diverted the money to their own benefit in lieu of the creditor from whom they did receive authority, then you still have a right to refund of the money that unjustly enriched the pretender lender.  The money goes to the former owner/seller and to nobody else. If there is a claimant that wishes to step forward to attack the award, then we will deal with it, but based upon my information such claims will not be made.

More News:

Error Claims Cast Doubt on Bank of America Foreclosures in Bay Area
http://www.nbcbayarea.com/investigations/series/mortgage-mess/Error-Claims-Cast-Doubt-on-Bank-of-America-Foreclosures-in-Bay-Area-204764581.html

Number of homes entering foreclosure plunges in California
http://www.latimes.com/business/la-fi-foreclosure-report-20130424,0,6017958.story

Politics: While Wronged Homeowners Got $300 Apiece in Foreclosure Settlement, Consultants Who Helped Protect Banks Got $2 Billion
http://m.rollingstone.com/?seenSplash=1&redirurl=/politics/blogs/taibblog/while-wronged-homeowners-got-300-apiece-in-foreclosure-settlement-consultants-who-helped-protect-banks-got-2-billion-20130426

Minnesota Supreme Court Affirms That Foreclosing Parties Must Record Mortgage Assignments Prior To Initiating Foreclosure By Advertisement
http://www.jdsupra.com/legalnews/minnesota-supreme-court-affirms-that-for-50369/

Presenting: The Housing Bubble 2.0
http://www.zerohedge.com/news/2013-04-29/presenting-housing-bubble-20

 

CLASS ACTION: PA COUNTY RECORDERS WIN RIGHT TO SUE MERS FOR FEES

For legal representation in Florida Call 520-405-1688

Consult with Neil F Garfield, MBA. JD

MORE REASONS TO DENY AND DISCOVER

The usual stuff from MERS: We’re right and everyone else is wrong. Except that not so many people are taking them at their word. The MERS “Business Model” was simply a vehicle to hide a simple PONZI scheme. This class action lawsuit aims to show that you cannot pick up one end of the stick without picking up the other. If MERS wants to take the position that the transfers on their books are valid, which they must or there wouldn’t be any foreclosures, then they must pay the transfer taxes and recording fees required under Pennsylvania law. It is pretty simple, and the order allowing the class action to proceed is basically a final decision waiting to be made final.

The case also goes forward on unjust enrichment, declaratory and injunctive relief. Now comes the decision where the MERS entity must decide whether and when to assert that MERS shouldn’t be sued because it was only acting as agent of the members. If they do that then they are admitting they were acting for a undisclosed principal at the closing of the loan, a clear violation of the Truth in Lending Act. If they don’t do that they get a judgment that puts them out of business and which will be executed and enforced against those who organized MERS — Title companies, banks, servicers included — when  it comes out that this is indeed the case during discovery.

It is difficult to conjure up a scenario where this case won’t be settled. The facts are devastating to the banks and servicers and title companies. They can’t go to trial. And THAT is the same strategy I am pushing lawyers to use in individual cases in DENY AND DISCOVER.

CLASS ACTION FORM: HAMP and UNJUST ENRICHMENT

class_action_against_boa1_kahlo HAMP

Editor’s Note: Excellent Pleading on HAMP, TARP and related matters. They also bring up unjust enrichment which might also be applicable to the receipt and non-disclosure of third party payments.

Good facts on illicit “modification” practices and the reasons why the modifications usually don’t become permanent.

KAMIE KAHLO and DANIEL KAHLO, on
behalf of themselves and all others similarly
situated,
Plaintiffs,
v.
BANK OF AMERICA, N.A. and BAC

HOME LOANS SERVICING, LP,
Defendants

HAGENS BERMAN SOBOL SHAPIRO LLP
By: s/ Steve W. Berman
Steve W. Berman, WSBA #12536
Ari Y. Brown, WSBA #29570
HAGENS BERMAN SOBOL SHAPIRO LLP
1918 Eighth Avenue, Suite 3300
Seattle, Washington 98101
(206) 623-7292
steve@hbsslaw.com
ari@hbsslaw.com

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