WHY ALL THE ROBO SIGNING?
In Jamie Dimon’s annual letter to shareholders, he talks about JP Morgan’s part in all of that. Essentially it was “not our finest hour,” he said, but at least JPM wasn’t as bad as other banks (even their subprime mortgages performed better than theirs). Plus JPM got a ton of crappy mortgages from WaMu and Bear Stearns.
But then there’s what happened once all those mortgages started going to hell:
“…when delinquencies and foreclosures grew dramatically, we were ill-prepared operationally to deal with the extraordinary volume of troubled mortgages and upset borrowers. Our servicing operations left a lot to be desired: There were too many paperwork errors, including affidavits that were improperly signed because the signers did not have personal knowledge about what was in the affidavits but, instead, relied on the company’s processes. However, the information in the affidavits was largely accurate – i.e., the borrower, in fact, was in default, we did have the mortgage and so on.”
Not sure if a lot of Americans would be satisfied with the “however” bit.
UPDATE- FEB. 9, 2012-THE RIGHT QUESTION NOW IS “WHY NOT ROBO SIGN?-
“Let me help a few victims I created by ripping them off and illegally throwing them out of their homes by false court filings that I swore were true.” That’s what the so-called mortgage settlement talks are really all about: fraud, perjury and crimes. That’s what these banks did and that’s what they are trying to buy their way out of.
The settlement discussions are the same: eliminate all or almost all liability for the bank and, most importantly, all bank officers and employees in exchange for a loan forgiveness or modification program. Think about this: the banks engaged in a years’ long pattern and practice of what can only be described as fraudulent if not criminal conduct that would put anyone else in prison for years if not decades, yet banks get to buy off the cops with some money to help just a few of the victims they created.
Worst of all, there is no requirement in any of these talks that I’m aware of that require the banks to come clean, publicly release all the relevant documents and provide sufficient information on their conduct so that anyone can evaluate whether the sell-out, I mean, pay-off, oops, I mean, “settlement” is anywhere near adequate.
And they get to buy their way out of prosecution for chump-change. It’s reported that the settlement is going be $25 billion, with only $5 billion in cash and $20 billion in “loan forgiveness.” That’s nothing. There are more than 10 million homes under water where the amount they owe on their mortgages is more than the house is valued, i.e., could be sold for. $20 billion doesn’t make a dent in that: 1 million homes at $20,000 loan forgiveness is it. And, remember, $20 billion in loan forgiveness to the banks is not equal to $20 billion in cash. It is probably more like $10 billion, if that, due to accounting, prior write-downs and similar shenanigans.
There is also the risk of a tacit conspiracy here. The banks want to “put this behind them” (gee, who wouldn’t) and escape from real liability (criminal and civil) and the prosecutors (many of them politicians) and the administration want to claim victory. You will hear that the settlement was the largest, one of the largest or the greatest settlement in history that will help millions or billions or trillions of people who need help — you get the point: no hyperbole will be spared.
As if all that wasn’t bad enough, the most egregious aspect of all this may be the reporting: stories repeatedly use innocuous, but grossly misleading words that obscure what really happened here. For example, so-called “robo signing” is massive, systematic, fraudulent, criminal conduct. This is where banks themselves or their contractors sign legal documents to file in court swearing under oath that the facts are true and therefore support the legal application to take someone’s home away from them, i.e., foreclose.
Can you think of anything more despicable? Lying under oath to get someone thrown out of their home and onto the street. That’s what robo-signing means and what it obscures every time that word is used. Then, there’s always someone saying, basically, no harm, no foul because it’s just a “paper work” problem and these people are all delinquent and “deserve” to be thrown out on the street. Really? Since when does saying “trust us” while we lie to you under oath make illegal conduct acceptable?
And, the fraudulent if not criminal conduct occurred throughout the boom as well as the bust (when the robo-signing and other criminal conduct occurred). For example, there are unending examples of mortgage brokers changing income, job history and other material terms in mortgage applications without the person having any knowledge of it. Another example is putting large amounts of unqualified mortgages into packages that were securitized in violation of the required representations and warranties.
Anywhere else this would be called lying, cheating and stealing and it’s past time it gets called by the right name. And, everyone should insist on no settlements by anyone that includes the elimination of liability for a corporation or any of its officers or employees unless it also includes a requirement that all documents related to the conduct are all publicly disclosed on a central, searchable website. That won’t happen because they the conduct of the prosecutors and politicians in the sellout, err, settlement could be evaluated along with the conduct of the banks — see the problem here?
If they are getting any legal immunity, which is what they are demanding, then the American people deserve to at least know what laws they violated and how they did it so everyone knows what they are getting immunity for. That simply must be a price for forgiving what has been years of unconscionable fraudulent and almost certainly criminal conduct that has victimized tens of millions of American families, hollowed out neighborhood after neighborhood, and stuck millions more homeowners with underwater mortgages through no fault of their own.
UPDATE- FEB. 2, 2012-(Reuters) – The attorney general in Illinois on Thursday sued a mortgage document firm and said it filed “faulty” documents with local governments in a rush to process mortgages and foreclosures.
Nationwide Title Clearing Inc was a “key contributor” to the mortgage crisis by “undermining the integrity and accuracy of the mortgage servicing and foreclosure process,” Attorney General Lisa Madigan said in a statement.
The Palm Harbor, Florida-based firm prepares documents for mortgage servicers to use against borrowers who are in default or foreclosure.
A spokeswoman for Nationwide Title said the firm had not yet seen the lawsuit.
The lawsuit comes as Illinois and other states are close to signing an agreement with five top U.S. banks to resolve allegations of mortgage servicing and foreclosure abuses.
Those negotiations began more than one year ago, after reports emerged that workers had “robo-signed,” or signed without reading, thousands of pages of mortgage documents, which in some cases led to unlawful foreclosures.
That multistate settlement does not include contractors used by the banks in some of the questionable practices.
Nationwide Title works for eight of the 10 largest lenders and mortgage servicers, according to the lawsuit.
Its employees often signed documents as “vice president” of other companies, even though they were Nationwide Title workers, the lawsuit said.
Crystal Moore, for example, signed documents as a vice president of Citi Residential Lending Inc, even though she was an employee of National Title.
The employees sign a few thousand documents each day, and do not read and verify the documents they sign, according to the lawsuit.
The documents often include statements that the signatory has personal knowledge of the facts in the document, the lawsuit said.
The company is a “document production factory,” Madigan said in the lawsuit.
The lawsuit, filed in Cook County Circuit Court, accuses the firm of violating the Illinois Consumer Fraud and Deceptive Practices Act and the Uniform Deceptive Trade Practices Act.
Through the lawsuit Madigan asked the court to require the firm to review and fix documents it unlawfully created and recorded, and pay back revenue and profit it gained through the practices.
The suit also seeks civil penalties of up to $50,000 per violation.
Madigan has stepped up her state’s efforts to punish companies for what she views as their role in the 2007-2009 financial crisis.
She sued Standard & Poor’s last week, for example, and said it fueled the nation’s housing and financial crises by assigning inflated credit ratings to risky mortgage-backed securities.
Madigan also appeared with Attorney General Eric Holder and other top U.S. officials in Washington last week to announce a new federal-state working group that would investigate misconduct in the packaging and sale of home loans to investors.
The Wall Street Journal reports that the Obama administration is now engaged in heavy arm-twisting to get the 50 state attorneys general to agree to a settlement with five major banks in the “robo-signing” scandal. The scandal involves employees signing names not their own, under titles they did not really have, attesting to the veracity of documents they had not really reviewed. Investigation is revealing that it did not just happen occasionally but was an industry-wide practice, dating back to the late 1990s, and that it may have invalidated the titles to tens of thousands of homes.
The settlement would let Wall Street bankers off the hook for crimes that would land the rest of us in jail – fraud, forgery, securities violations and tax evasion – raising some interesting legal issues. But the question explored here is something else: Why were the banks doing it? The alleged justification – that they were so busy they cut corners – hardly seems credible given the extent of the practice.
The robosigning largely involved assignments of mortgage notes to trusts, representing the investors who put up the money for the note. Assignment is necessary to give the trust legal title to the note. But according to consumer attorneys April Charney and O. Max Gardner III, who have reviewed large numbers of these cases, the banks that signed the notes with the homeowners virtually never assigned them over to the trusts. Robosigning occurred long after the fact, and it was an industry-wide practice; so it must have served some industry purpose. But what?
Here is a working hypothesis, suggested by Martin Andelman: Securitized mortgages are the “pawns” used in the pawn shop known as the “repo market.” “Repos” are overnight sales and repurchases of collateral. Yale economist Gary Gorton explains that repos are the “deposit insurance” for the shadow banking system, which is now larger than the conventional banking system and is necessary for the conventional system to operate. The problem is that repos require “sales,” which means the mortgage notes have to remain free to be bought and sold. The mortgages are left unassigned to be used in the repo market – until they go into default, when they are robosigned over to the trusts for purposes of foreclosure.
The evolution of the shadow banking system:
Gorton observes that there is a massive and growing demand for banking by large institutional investors – pension funds, mutual funds, hedge funds, sovereign wealth funds – which have millions of dollars to park somewhere between investments. But FDIC insurance covers only up to $250,000. FDIC insurance was resisted in the 1930s by bankers and government officials and was pushed through by a populist movement: The people demanded it. What they got was only enough insurance to cover the deposits of individuals. Today, the large institutional investors want similar coverage. They want an investment that is secure, that provides them with a little interest, and that is liquid like a traditional deposit account, allowing quick withdrawal.
The shadow banking system evolved in response to this need, operating largely through the repo market. “Repos” are sales and repurchases of highly liquid collateral, typically Treasury debt or mortgage-backed securities – the securitized units into which American real estate has been ground up and packaged sausage-fashion. The collateral is bought by a “special purpose vehicle” (SPV), which acts as the shadow bank. The investors put their money in the SPV and keep the securities, which substitute for FDIC insurance in a traditional bank. (If the SPV fails to pay up, the investors can foreclose on the securities.) To satisfy the demand for liquidity, the repos are one-day or short-term deals, continually rolled over until the money is withdrawn.
This money is used by the banks for other lending, investing or speculating. Gorton writes: “This banking system (the ‘shadow’ or ‘parallel’ banking system) – repo based on securitization – is a genuine banking system, as large as the traditional, regulated banking system. It is of critical importance to the economy because it is the funding basis for the traditional banking system. Without it, traditional banks will not lend; and credit, which is essential for job creation, will not be created.”
Behind the curtain of MERS:
These shady practices were concealed behind an electronic smokescreen called MERS (an acronym for Mortgage Electronic Registration Systems, Inc.), which allowed houses to be shuffled around among multiple, rapidly changing owners while circumventing local recording laws. Title would be recorded in the name of MERS as a place holder for the investors, and MERS would foreclose on behalf of the investors. Payments would be received by the mortgage servicer, which was typically the bank that signed the mortgage with the homeowner. But the servicer was not actually the lender, which was the investment trust that put up the money.
This all worked well until courts started questioning whether MERS, which admitted that it was a mere conduit without title, had standing to foreclose. Courts have increasingly held that it does not.
On top of that, Fannie Mae sent out a memo telling mortgage servicers that in order to be reimbursed under HAMP, a government loan modification program designed to help at-risk homeowners meet their mortgage payments, the servicers would have to produce the paperwork showing that the loan had been assigned to the trust.
The hasty solution of the servicers was a rash of assignments back to the investment trusts by an army of “robosigners.” But besides the blatant forgeries entailed, this meant violating the terms of the trusts and state real estate law. The result has been to make a shambles of county title records. Delaware Attorney General Beau Biden, one of the holdouts from the robosigning settlement, says, “Since at least the 1600s, real property rights have been a cornerstone of our society. MERS has raised serious questions about who owns what in America.”
The banks not only have not met state law requirements but cannot meet them, if they are to comply with the tax laws for mortgage-backed securities.
Since 1986, mortgage-backed securities have been issued to investors in SPVs called REMICs (Real Estate Mortgage Investment Conduits). REMICs are designed as tax shelters; but to qualify for that status, they must be “static.” Mortgages can’t be transferred in and out once the closing date has occurred. The REMIC Pooling and Servicing Agreement typically states that any transfer after the closing date is invalid. Yet few, if any, properties in foreclosure seem to have been assigned to these REMICs before the closing date, in blatant disregard of legal requirements. The whole business is quite complicated, but the bottom line is that title has been clouded not only by MERS but because the trusts purporting to foreclose do not own the properties by the terms of their own documents. Most average homeowners have no idea what a REMIC is – actually most attorneys have no clue …. so, you know many of the Judges are completely in the dark. REMICs are a form of IRS tax shelter sold to investors as part of the mortgage-backed securities package (Real Estate Mortgage Investment Conduit (“REMIC”) pursuant to I.R.C. §§860A-G).
The documents that killed the REMICs may actually help save your home.
The largest key to REMICs is that they are required to be passive vehicles, meaning that mortgages cannot be transferred in and out of the trust once the closing date has occurred, unless the trust can meet very limited exceptions under the Internal Revenue Code. I.R.C. §860G. The 90 day requirement is imposed by the I.R.C. to ensure that the trust remains a static entity. However, since the mortgage-backed securities trust controlling documents, the Pooling & Servicing Agreement (PSA), requires that the trustee and servicer not do anything to jeopardize the tax-exempt status; PSAs generally state that any transfer after the closing date of the trust is invalid.
What does that mean to the average homeowner in foreclosure? Check the recordation office and look for the “Assignment of Mortgage” on your property – generally found just before the Notice of Foreclosure is filed with the State if your loan was securitized. Looking through hundreds of these beauties there have been few, if any, that were timely assigned to the trusts. How can you quickly tell if the Assignment of Mortgage has failed to make it timely to the trust?
The Assignment of Mortgage [below] shows a 2006 Trust – and a fraudulent assignment in 2009 – 3 years AFTER the Trust had CLOSED! Not only was it too late – but the Trust could not accept it pursuant to the REMIC of RFMSI 2006SA4 PSA and as further defined in the Oppenheim Law report. Assignments of Mortgage are public documents.
What was not known until very recently, in fact Delaware Attorney General Beau Biden brought it out in his case Delaware v. MERS, lenders generally failed to follow the PSA and properly assign the mortgage loans to the Trusts. In the transcripts that AG Biden cited from In re Kemp, 440 B.R. 624, 626 (Banker D.N.J. 2010) (No. 08-18700) (Aug. 11, 2009), an employee for Bank of America responsible for servicing the securitized Countrywide mortgage loans testified under oath that Countrywide did not have a practice of delivering original documents such as the note to the Trust and was not in the habit of endorsing notes at the bottom, but favored allonges that they made as they went along. She further testified that allonges are typically prepared in anticipation of foreclosure litigation, rather than at the time the mortgage loans are purportedly securitized. Both of these facts are contrary to the requirements of the PSA that the note be endorsed in blank and delivered to the trustee at the time of securitization. Thanks to foreclosure defense attorney, Bruce H. Levitt, of South Orange, NJ - Bankruptcy Chief Judge JUDITH H. WIZMUR totally got it! See her Opinion here.
The trust investors have been suing Countrywide and other Wall Street banks for inflated appraisals, systematically abandoning underwriting guidelines and over-rated bonds. The investors did not yet know that many of the mortgage loans failed to make it timely into the trusts and that the REMICs had been damaged. In fact, recently the IRS has taken notice and already initiated an investigation into the “active” activities of these trusts and the tax implications from them. Scot J. Paltrow, Exclusive: IRS Weighs tax penalties on mortgage securities, REUTERS, April 27, 2011.
Here’s a fine example of a (too) late Countrywide Assignment of Mortgage made in 2010 to a CWABS 2005-3 Trust. Did they just figure the courts were going to be oblivious?
This is FIVE (5) years too late! Oh yeah, the REMIC has or should have failed. And it appears there are thousands, if not millions of these gems filed all across America in every state property recordation office – you just have to look.
Law Professor Adam Levitin, Georgetown University, describes the conflict the following way: “The trustee will then typically convey the mortgage notes and security instruments to a “master document custodian” who manages the loan documentation, while the servicer handles the collection of loans. Increasingly, there are concerns that in many cases the loan documents have not been properly transferred to the trust, which raises issues about whether the trust has title to the loans and hence standing to bring foreclosure actions on defaulted loans. Because, among other reasons, of the real estate mortgage investment conduit (“REMIC”) tax trust of many private-label securitizations (“PLS”) . . . it would not be possible to transfer the mortgage loans (the note and the security instrument) to the trust after the REMIC’s closing date without losing REMIC status.”
Levitin further points out: “As trust documents are explicit in setting forth a method and date for the transfer of the mortgage loans to the trust and in insisting that no party involved in the trust take steps that would endanger the trust’s REMIC status, if the original transfers did not comply with the method and timing for transfer required by the trust documents, then such belated transfers to the trust would be void. In these cases, there is a set of far-reaching systemic implications from clouded title to the property and from litigation against trustees and securitization sponsors for either violating trust duties or violating representations and warranties about the sale and transfer of the mortgage loans to the trust.”
Without valid assignments, attorneys say that standing and jurisdiction issues rise to the top and may be asserted at any time – even first time on appeal. If the pretender lender did not have a standing to non-judicially foreclose because the assignment of mortgage is void, logically everything thereafter would be a nullity – that could open up a can of worms beyond the pretender lenders’/servicers’ repair.
These documents appear to have been fraudulent and as lawsuits assert – were intentionally prepared and executed to unlawfully confiscate the property from the homeowners. It appears it was easier to create the fraud and get paid by default insurance or credit default swaps than it was to modify they loans with the homeowners. Not only was there fraud on the homeowners, but also on the investors.
But could REMICs be why the investors don’t partner up with the borrowers? They were both duped. The borrowers unwittingly relied on the [inflated] appraisals and had no idea that the underwriting guidelines had been “systematically abandoned” – just like the investor claims. But there is one big difference…
If the investors include the borrowers, the fraudulent assignment of mortgages will surface and the REMIC fraud will float to the top like a dead body in a botched murder case…. and somebody will be stuck with paying the IRS – even if the investors win the case and get their investments back.
Could these fraudulent assignments save your home or undo the foreclosure? That’s a question to ask a competent foreclosure defense attorney and have him review your file.
Next, we need to follow the money… who actually got paid, how much and when??
From lending machines to borrowing machines:
The bankers have engaged in what amounts to a massive fraud, not necessarily because they started out with criminal intent, but because they have been required to in order to come up with the collateral – in this case real estate – to back their loans. It is the way our system is set up: The banks are not really creating credit and advancing it to us, counting on our future productivity to pay it off, the way they once did under the deceptive but functional façade of fractional reserve lending. Instead, they are vacuuming up our money and lending it back to us at higher rates.
The banks are not really creating credit and advancing it to us, counting on our future productivity to pay it off, the way they once did. Instead, they are vacuuming up our money and lending it back to us at higher rates.
In the shadow banking system, as in the old fractional reserve system, the collateral is being double-counted: It is owed to the borrowers and the depositors at the same time. This allows for expansion of the money supply, but the system is vulnerable to bank runs when the borrowers and the depositors demand their money at the same time.
“Instead of lending into the economy,” says British money reformer Ann Pettifor, “bankers are borrowing from the real economy.” She wrote in the Huffington Post in October 2010: “[T]he crazy facts are these: Bankers now borrow from their customers and from taxpayers. They are effectively draining funds from household bank accounts, small businesses, corporations, government treasuries and from e.g. the Federal Reserve. They do so by charging high rates of interest and fees; by demanding early repayment of loans; by illegally foreclosing on homeowners, and by appropriating and then speculating with trillions of dollars of taxpayer-backed resources.”
Unlike the conventional banking system, the shadow banking system is largely unregulated. It doesn’t have the backup of FDIC insurance to prevent bank runs, making it inherently prone to systemic failure. Gorton explains that it was a run on the shadow banking system that caused the credit collapse of September 2008. It happened before and it could happen again. The question is how to eliminate this risk.
Banco do Brasil, a public-owned bank that operates as a commercial venture, is Latin America’s biggest bank by assets. It is doing so well it is eying possible acquisition targets and opening branches in the United States.
As noted by The Business Insider: “Regulate shadow banking more tightly, and you probably have to also provide government backstops. Shudder. Try to shut the thing down or restrict it and you suck credit out of the system, credit which much of the non-financial ‘real’ economy uses and needs.”
Whatever the solution, a system that requires the slicing and dicing of mortgages behind an electronic smokescreen so they can be bought and sold as collateral for the pawn shop of the repo market is fraught with perils and is unsustainable.
A system that requires the slicing and dicing of mortgages behind an electronic smokescreen so they can be bought and sold as collateral for the pawn shop of the repo market is fraught with perils and is unsustainable.
Interestingly, countries with strong public sector banking systems largely escaped the 2008 credit crisis. These include the BRIC countries – Brazil, Russia, India and China – which contains 40 percent of the global population and is today’s fastest growing economies. They escaped because their public sector banks do not need to rely on repos and securitizations to back their loans. The banks are owned and operated by the ultimate guarantor – the government itself. Perhaps the public sector banking model deserves further study.
In case you’re interested in checking out the links provided in this article, you can find an online version of this article at www.FraudStoppers.org. Just click the “additional resources” tab on the homepage.
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65 SIGNS THAT YOUR MORTGAGE LOAN & FORECLOSURE DOCUMENTS COULD BE FRAUDULENT
Here are some signs of mortgage fraud:
1. The Mortgage or Deed of Trust is assigned from the Originator directly to the Trustee for the Securitized Trust.
2. The Mortgage or Deed of Trust is assigned months and sometimes years after the date of the origination of the underlying mortgage note.
3. The Mortgage or Deed of Trust is assigned from the initial aggregator directly to the Securitized Trust with no assignments to the Depositor or the Sponsor for the Trust.
4. The Mortgage or Deed of Trust is executed, dated or assigned in a manner inconsistent with the mandatory governing rules of Section 2.01 of the Pooling and Servicing Agreement.
5. The assignment of the Mortgage or Deed of Trust is executed by a legal entity that was no longer in existence on the date the document was executed.
6. The assignment of the mortgage or Deed of Trust is executed by an entity whose name is different than the entity named in the original document (i.e., National City Bank Corporation in lieu of ABC Corporation as a division of National City Bank).
7. The assignment was executed by a party pursuant to a Power of Attorney but no Power of Attorney is attached to the instrument or filed with the instrument or otherwise recorded with local land registry.
8. The mortgage note is allegedly transferred in a single document along with the Mortgage or Deed of Trust (i.e., “Assignment of the Note and Mortgage”). You cannot “assign” a mortgage note. You can only “negotiate” a mortgage note under Article 3 of the UCC.
9. The assignment is executed by a party who claims to be an “attorney in fact” for the assignor.
10. The assignment is notarized by a notary in Dakota County, Minnesota.
11. The assignment is notarized by a notary in Hennepin County, Minnesota.
12. The assignment is notarized by a notary in Duval County, Florida.
13. The assignment is executed by an officer or secretary of MERS.
14. The assignment is notarized by a secretary or paralegal employed by the attorney for the mortgage servicer.
15. The assignment is executed or notarized by an employee of MR Default Services, Promiss Solutions LLC, National Default Exchange, LP, LOGS Financial Services, or some similar third-party.
16. The endorsement on the note is actually on an allonge affixed to the note. In most states, an allonge cannot be used if there is a sufficient amount of room at the “foot” or the “bottom” of the original note for the endorsement.
17. The allonge is not “permanently” affixed to the original note. The term permanent excludes the use of staples and tape and as a result you must use a sold fastener such as glue. Allonges are commonly referred to “in the business” as “tear-off fraud papers.”
18. The note proffered in evidence is not the original but a copy of the “certified copy” provided to the debtors at the closing.
19. The note is endorsed in blank with no transfer and delivery receipts. It is fine to endorse a note in blank, in which case it becomes “bearer” paper under the UCC. However, in order to prove a true sale from the Sponsor to the Depositor you must have written delivery and transfer receipts and proof of pay outs and pay in transactions.
20. The note proffered in evidence is not endorsed at the foot of the note or on an affixed allonge.
21. The assignment of the mortgage or deed of trust post-dates the filing of the court pleading.
22. The assignment of the mortgage or deed of trust is executed after the filing of the court pleadings but claims to be “legally effective” before the filing. For example, the deed of trust is assigned on June 1, 2009, with an effective date of May 1, 2007.
23. The parties who executed the assignment and who notarized the signature are in fact the same parties.
24. The signor states that he or she is an “agent” for the executing entity.
25. The signor states that he or she is an “attorney in fact” for the executing entity.
26. The signor states that he or she is an employee of the executing entity but claims to have custody and control of the records of the entity.
27. The signor of the document makes statements about the status of the mortgage debt based on his or her review of the “records of the plaintiff” or the “records of the moving party.”
28. The proponent of the original note files an Affidavit of Lost Note.
29. The signor claims that the allegations in the court pleading are correct but the assignment of the mortgage and/or delivery and transfer of the note occurs after the law suit or the motion for relief from stay was filed.
30. One or more of the operative documents in the case is signed by one of the attorneys for the mortgage servicer.
31. The default payment history filed in the case is prepared by the attorney for the mortgage servicer or a member of his or her staff.
32. The affidavit filed in support of legal fees is not signed by an attorney with the firm involved in the case.
33. The name of one or more of the signors is stamped on the document.
34. The document is a form with standard “fill-in-the-blanks” for names and amounts.
35. The signature of one or more parties on the document is not legible and looks like something a three year old might have done.
36. The document is dated and signed years before the document is actually filed with the register of real estate documents or deeds or mortgages.
37. The proffered document has the word C O P Y stamped on or embedded in the document.
38. The document is executed by a notary in Denton County, Texas.
39. The document is executed by a notary in Collin County, Texas.
40. The document includes a legend “Hold for” a named law firm after recording.
41. The document was drafted by a law firm representing the mortgage servicer in the pending case.
42. The document includes any type of bar code that was not added by the local register or filing clerk for such instruments.
43. The document includes a reference to an “instrument number.”
44. The document includes a reference to a “form number.”
45. The document does not include any reference to a Master Document Custodian.
46. The document is not authenticated by any officer or authorized agent of a Master Document Custodian.
47. The paragraph numbers on the document are not consistent (the last paragraph on page one is 7 and the first paragraph on page two starts with number 9).
48. The endorsement of the note is not at the “foot” or “bottom” of the last page of the note. For example, a few states allow an endorsement on the back of the last page of the note but the majority requires it at the foot of the note.
49. The document purports to assign the mortgage or the deed of trust to the Trustee for the Securitized Trust before the Trust was registered with the Securities and Exchange Commission. This type of registration is normally referred to as a “shelf registration.”
50. The document purports to transfer the note to the Trustee for the Securitized Trust before the date the Trust provides for the origination date of instruments in the Trust. The Prospectus, the Prospectus Supplement and the Pooling and Servicing Agreement will clearly state that the pool of notes includes those originated between date X and date Y.
51. The document purports to transfer the note to the Trustee for the Securitized Trust after the cut-off date for the creating of such instruments for the Trust.
52. The origination date on the mortgage note is not within the origination and cut-off dates provided for the by terms of the Pooling and Servicing Agreement.
53. The “Affidavit of a Lost Note” is not filed by the Master Document Custodian for the Trust but by the Servicer or some other third-party.
54. The document is signed by a “bank officer” without any designation of the office held by the said officer.
55. The affidavit includes the following language on the bottom of each page: “This is an attempt to collect a debt. Any information obtained will be used for that purpose.”
56. The document is signed by a person who identifies himself or herself as a “media supervisor” for the proponent.
57. The document is signed by a person who identifies himself or herself as a “media coordinator” for the proponent.
58. The document is signed by a person who identifies himself or herself as a “legal coordinator” for the movant.
59. The date of the signature on the document and the date the signature was notarized are not the same.
60. The parties who signed the assignment and who notarized the signature are located in different states or counties.
61. The transferor and the transferee have the same physical address including the same street and post office box numbers.
62. The assignor and the assignee have the same physical address including the same street and post office box numbers.
63. The signor of the document states that he or she is acting “solely as nominee” for some other party.
64. The document refers to a power of attorney but no power of attorney is attached.
65. The document bears the following legend: “This is not a certified copy.”
20 Overlooked Foreclosure Defenses
- Loan modifications do not first require payment defaults.
- Limitations on the recovery of foreclosure attorneys’ fees.
- The estates of deceased joint homeowners are still necessary and indispensable parties.
- Service by publication is unconstitutional absent clear evidence of exhausted due diligence attempts at personal service first.
- Expungement actions are more effective than mortgage and deed of trust misnamed “quiet title” actions.
- Lawyers are prohibited from appearing in Court as both foreclosure attorneys and material witnesses.
- Pretender lenders in order to support standing are required to prove that they paid for the loan before being able to show injury as a result of loan default.
- Judges owning stock in a party, if researched and proven, should recuse themselves or be disqualified.
- Violations of the AG Settlement and other Sanction Orders can be enforced in individual cases by suing State Attorneys General for negligence in non-enforcement.
- Individual whistle blowing REMIC actions can be effective regarding nonpayment of State taxes.
- Foreclosure attorney representation needs to supported by disclosure of legal services agreements between lenders, loan servicers, government sponsored entities, and foreclosure law firms.
- Homeowners are a protected class under federal and state securities laws since securitized loans are securities from their inception.
- Various provisions of federally sponsored mortgage and deed of trust forms are unenforceable against borrowers as adhesion clauses.
- The affirmative defense of anticipatory breach, sometimes called anticipatory repudiation, can be used to attack pretender lender standing in several effective ways.
- Most promissory notes are not negotiable instruments and therefore cannot be enforced merely by endorsement or possession.
- Foreclosure deficiency judgments are unconstitutional when not based on the true value of the foreclosed property at time of sale confirmation.
- There are state public policy abstention objections to federal court removal of foreclosure related cases.
- There are securitized trust REMIC violations that can be objected to that prove a lack of standing to foreclose which are unrelated to the enforcement of securitized trust contract agreements of which borrowers have no standing otherwise to object to.
- Insurance proceeds as well as government and assignor discounts diminish pretender lender claims to loss, barred by the affirmative defense of unjust enrichment.
- The remedy against robo-signers and robo-endorsers and robo-notaries is suing the head of the recording office for expungement at the recording office.
How to Respond to a Notice of Default
Now let’s talk about the foreclosure laws as they relate to everybody. If you have received a Notice of Default (NOD) or Notice of Acceleration (NOA), then time is short and you need to do something. And the only thing that will get the banks attention is a lawsuit. If you have an impending sale there are a number of things you can do. If you haven’t done anything concerning the foreclosure process as yet, there are some things you have to do simultaneously.
The first thing you want to do is send out a number of letters. Whoever is attempting to foreclosure on you, on that person you should send a debt validation letter (DVL). Often, a debt validation letter (DVL) will stall the foreclosure. Because when a debt validation letter is filed, the lender is obligated by the Fair Debt Collections Practices Act (FDCPA) to validate the debt.
A presentment under the Uniform Commercial Code (UCC) is defined as a demand for payment on a debt in us dollars. If your sent a presentment (a demand for payment) from anyone, you may dispute the debt with that person, and if you send them a letter stating that you dispute the debt and a demand that the claimant prove up their claim, then the debt collector is required to seize all collection efforts until they have proved up the claim.
So if your lender is in the process of foreclosure, and you send them a debt validation letter, they’re going to claim that in this case they are not debt collectors, but in fact they are merely attempting to recover collateral. The courts across the country are split on this issue. Some states say yes they are a debt collector, and some say no they are not a debt collector. For our purpose we don’t care either way, because we’re going to make the claim and by law once the demand is made they must prove up their position either way. The issue that we’ve been making with the lawsuits we’ve been helping people produce is that they are a debt collector until they show that they are not a debt collector. Usually they like to reply with a Rule 12 (motion to dismiss for failure to state a claim), alleging that they are NOT debt collectors and therefore they do not fall under the FDCPA.
So the argument that we’re making here is that in order to implement the intent of the legislator (and that intent was to prevent someone with no claim on a debt from collecting on a debt), you are demanding they prove their position.
If you have a debt with GMAC and I call you from Joe Blow collections, or send you a letter claiming I’m collecting for GMAC and you need to send all your future payments to me. Well if you send your payments to them and they are not collecting for GMAC the payments you send to them do not extinguish the debt; and that’s in the Uniform Commercial Code.
You see the foreclosure mills and the banks agents are trying to squeeze in under that exclusion, and claim that they are not trying to collect money; rather they are attempting to recover property. But in order to recover the property you have to get a notice of intent to foreclose in the form of a notice of default (NOD) and opportunity to cure the default (by paying money). This is stated in the mortgage.
Now we are saying that makes you a debt collector. Because the bank is saying you better pay a certain amount in U.S. dollars, or else they will become a collateral collections agent, and take the property as collateral. So the argument you will be making to the court is even if the jurisdiction says that the debt collector, and the foreclosure agent falls under the exclusion, until such time as they prove that they are actually in that position, they fall under the FDCPA.
If you get a phone call, you will use the: “Let’s Play a Little Q & A” on them. YOU must take control of the situation.
Write down their name, and the time and date they called. This is very important. (If you can record the conversation it will help you to transcribe to a ledger, the reason for this is that generally a recorded conversation is not admissible in a court room (the Judge will not allow it) however a transcript is admissible with no problem).
- What is the name of the company that you work for (where you work)
- What is their address
- What state are they in
- What is the zip code
- What is the phone number
- What is the name of the creditor (originally claims the debt)
- What is their address
- What state are they in
- What is the zip code
- What is their phone number
- What is the Account number
- What is the amount that you (or they) claim that I owe
The purpose of this is that there are certain things they must do during the telephone conversation and the primary one is as follows. The very first thing they must do after identifying themselves is to read you your consumer warning.
This is also referred to the “Mini-Miranda” “This is an attempt to collect a debt and any information obtained will be used for that purpose”.
If they do not inform you of your rights they have violated section § 807 of the DCPA and is a $1,000.00 violation.
On top of that, in your Debt Validation Letter you should request that they only contact you by U.S. Mail. This way each phone call could result in you being paid up to $1,500.00 for each violation of the Federal Telephone Consumer Protection Act 47 U.S.C. § 227.
Moving along! Think about this, if someone could be excluded from proving their position, just by making the claim that they weren’t a debt collector, and not have to prove it up the claim, then the statute requiring someone’s to prove their position would have no force in fact. In other words the law would be meaningless. So you’re saying that the bank is a debt collector, until they prove they are not. So now the burden of proof shifts to them proving they are not.
Either way it does not matter because this is just round one. In your lawsuit you can stipulate that IF they prove up their position you will dismiss this issue.
What you’re claiming here is you don’t know who the real holder of the note is, and for good reason. With all this robo-signing, and loan securitization, and transferring these loans, mortgages, and deeds of trust all over the place, you don’t have a clue to who the real holder of the note is. So you don’t know who has the actual authority to perform the foreclosure, so you’re asking that they prove up their position. Until they do this the foreclosure should be halted. Some people have been able to stop the foreclosure for years with this one simple step.
Remember your lender or loan servicer sent you a notice of default (NOD) and opportunity to cure; and you just need to make sure that if you send the amount necessary to cure that it will actually cure the debt; and you won’t have somebody coming back next week trying to foreclose again.
So the first thing you need to do is send the a good Debt Validation Letter; because when your lender or loan servicer receives it they are essentially statutory estopped from any and all further collection efforts until they answer.
After you mail your Debt Validation Letter, if they send you an answer, more than likely it will be a “non-responsive answer”. They may send you a copy of the deed of trust/mortgage, and maybe a copy of the note (if they have one). But they will not send you the originals that you requested, and they will not make originals available for your inspection, because in all likelihood they do not have them.
In fact the Bankers Association testified to the Florida Supreme Court in CASE NO.:09-1460 that “The reason many firms file lost note counts as a standard alternative pleading in the complaint is because the physical document was deliberately eliminated to avoid confusion immediately upon its conversion to an electronic file.”
So in order to address that issue in the debt validation letter you demand that they produce the original note for inspection by you; as is your right under Federal law. Now this is governed by Uniform Commercial Code 3-501; and it says that when a creditor sends a presentment to a debtor, and the debtor demands production of the original security instrument, the creditor must make the instrument available for inspection by the debtor. They do not have to give it to you; they just have to show it to you. If they fail to do so, the debtor can cease all payments without dishonor.
Now this creates Statutory Estoppel on two different fronts, and it will almost always stop the foreclosure, at least the first time you send them it. It usually takes them a little bit of time to get regrouped. Once they send you this bogus answer they may try to go ahead and start the foreclose process again. And there are things you can do if and when they do that.
But first things first, send the debt validation letters. Then as soon as you can you want to get a suit filed under the Fair Debt Collections Practice Act (FDCPA). When you send in your Debt Validation Letter (DVL) and then file suit for the same purpose. File suit demanding that the person claiming authority to foreclosure prove up their position; demand that they prove they are actually a bonafide agent for the true holder of the note.
Now this could be a big problem for the bank. The bank may actually be, or whoever the alleged principal for the agent is, may actually be the true holder of the note. But their problem is, in the last 13 years or so, after the repeal of the Glass Steagall Act and the repeal of the prohibition against derivatives, it sort of unleashed the money changers on us and they got themselves into such a glut of swallowing all of the equity of this country, that they just didn’t take care of business. They didn’t take care of the bookkeeping very well and usually they cannot legally prove up their position.
So when you file suit for this, and we’ve done a bunch of them, you have to understand that the courts are absolutely totally corrupt. They will dismiss your case no matter what, even if you have an attorney. Because the banks have money and power, and they can apply political pressure. And don’t forget that some of the federal judges are dirty rotten scoundrels. Maybe they can’t help it, maybe their position depend on them being dirty rotten scoundrels, but in the end…..they’re dirty rotten scoundrels; and they will rule against the Pro Se at every turn. So you have to expect that, and be prepared for that.
But don’t worry because the How to Win in Court Course will teach you how to argue your case, for the record, so you can win on appeal. Get this amazing course right now at https://fraudstoppers.org/education/
And keep in mind that you have some things you can do as Pro Se to tilt the scales of justice in your favor. As a Pro Se you don’t have to worry about that scoundrel judge pulling your bar card, because you don’t have one! Generally you don’t have to worry about the judge sanctioning you, because for the most part, the things that will get someone sanctioned only apply to lawyers. As long as you don’t curse the judge out, and you put on the appearance of civility, they’ll have no way to sanction you.
When you start filing judicial conduct complaints against a judge every time they squeak, every time they do something to deserve it, they can do nothing to stop you. If you file a judicial conduct complaint against the judge, and the judge says one word to you, that’s obstruction of justice and tampering with a witness and that can get them into big trouble real fast.
The same goes for bar grievances against attorneys. Bar grievances can affect attorney’s malpractice insurance. So these are just a few of the things that you can do to them as a Pro Se, which lawyers can’t do. If you have a lawyer, they can’t do any of these things, because if they do anything the judge doesn’t like, the judge can jerk their bar card away, almost at whim. But you’ll have to worry about that, and we will show you how to take some actions that will make up for a lot of these problems we have with corrupt judges and courts. I’m hoping that if we can get enough people doing this, that we can put enough pressure on the judges, that they will stop playing these shenanigans, in order to get us to stop filing judicial conduct complaints against them every time they turn around. But that is a discussion for another day.
Once you file your lawsuit you can expect a rule of 12 motion (dismiss for failure to stay to claim); and they will have 21 days to file that answer. So if you’re facing foreclosure they generally have to give you 21 days notice; and they generally time it so it’s exactly 21 days notice. So you will want to file a federal (or state) lawsuit fast, and that will almost certainly stop the sale.
Now it may NOT statutorily stop the sale. The only thing you can do to legally stop the bank from foreclosing on your property is to get a court order; like a temporary restraining order signed by a judge. Or you can also file for bankruptcy to temporarily stop the sale!
However, once you sue them, the reality is that win lose or draw, you’ll probably come out ahead because civil litigation takes time; and time is money!
So once you file an action against them, if the bank goes ahead and forecloses on the property while the litigation is going on, they could have opened themselves up for even more damages. Plus nobody in their right mind would purchase the property; because there would be a Lis Pendens filed against the property; and we’ll show you how to file a Lis Pendens (Latin for “suit pending”) later.
So after you mail your debt validation letter, you want to go to the local register of deeds (or your county recorder of deeds office) and get a copy of every document that has been filed in the county records for your property, from the date you purchased the property to present.
You’ll look for a deed of trust, or a mortgage, depending on what state you live in. If you live in a judicial state you have a mortgage. If you live in a non-judicial state you have a deed of trust.
If you are not sure if your state is a judicial or non-judicial, here is a list: https://fraudstoppers.org/foreclosure-laws-by-state/
You should get a copy of every page of each document recorded against your properties chain of title, from the time you purchased the home until present. Print the Search Results, with your name as GRANTOR and GRANTEE, and your wife’s name as GRANTOR and GRANTEE, then search the property address, and print the search results.
Take your camera and take a picture of every page starting with the index or the cover page of your deed record file and save each picture by:
Yr-mo-day, YOUR LAST NAME, Name of Doc, Page of Doc:
[Example: 2013-07-04, Smith, Original Deed of Trust, 17 Pages]
You should end up with copies of your Original Warranty Deed, Deed of Trust (or Mortgage, as it is called in some states).
While looking at the Deed of Trust or Mortgage, click on the button or link for “RELATED DOCUMENTS” and print the search results, then get a copy of any “Assignments of Deed of Trust or Mortgage” and any “Releases of Liens”,” Appointments of Substitute Trustees”, “Trustee Deeds”, and Law Firm Letters, like Default or Acceleration Letters from Attorneys who are hired to collect the debts from you.
Get a copy of everything in the file to the present date. You’ll also look for an assignment of substitute of trustee, an appointment of the note, and an appointment of the deed of trust or mortgage.
You may be able to get free copies of your county recorder of deeds documents online. Here is some information on how to do that: https://fraudstoppers.org/how-to-get-free-online-copies-of-your-county-recorder-of-deeds-land-record-documents/
These are the primary documents you’ll look for. And you may see a notice of default, or notice of intent to foreclose. Basically you want to get a copy of every document filed against your property from the time you purchased it until the present.
Then once you get a copy of these documents look at the authentication, which is the notary. Documents filed in the county record are not self authenticating. Since these documents are filed by someone that just comes down to the court, or hands it to the court, or they send it by mail, someone has to sign the document for it to be valid.
An authentication is when a person goes before someone who is authorized to do this, authorized to verify that the person who is claiming to sign the document, is in fact the person they claim to be. Essentially that’s all the authentication is. The notary will authenticate that this person came before me, and either I knew them personally or they identified themselves to me by this method; and I made the determination that this person is who they say they are.
This is one of the biggest areas of fraud in the whole foreclosure issue and it is absolutely the dumbest place to commit fraud. It’s arrogance beyond belief, its total reckless disregard for our laws and our courts. To file a document with a fraudulent identification is a felony; and the banksters have filed millions of them!
If you remember back to the 60 Minutes’ episode The Next Housing Shock a young guy got on television and bragged that he could sign Linda Green’s name, something like 360 times an hour. Think about it, in just one hour he committed enough felonies to put him in a federal penitentiary for several life sentences. This guy was no rocket scientist, but he could write fast! And the notaries, it’s a relatively minor thing, and its standard business procedure. But these guys are cranking out foreclosures so fast that having to wait for a notary, or having to wait for a notary to sit across the table from you as your signing these documents, and take the time to fill out their ledger and have you sign the ledger, while that’s inconvenient, and it’s not efficient.
So the foreclosure mills will hire somebody, at the entry level position who doesn’t know anything, and they come to them and say: “Hey we need a notary, and if you want to be a notary we can pay for your application fee, and your bond, and everything you need like your stamp and your ledger, and we’ll make you a notary.” And the new entry level clerk says “wonderful, I’ll be a notary”. And then the company comes to them with a big stack of documents and says “here you go, we need you to notarize these for us.” And generally this is a law firm, so the entry level clerk believes that this must be legal, and they do what there told and they notarize the stack of fraudulent documents. So now when the foreclosing agency needs a notarized document they just pull one off the shelf and fill it out.
What the notary is required to do in a number of states is to keep a sequential ledger. Anybody who has taken a document to get it notarized will recognize the procedure. You sign your document in front of the notary, after you have identified yourself to the notary, and then the notary will fill out some stuff on this ledger, and turn around and have you sign it. And now they even have a fingerprint pad where they will have you put your fingerprint or thumbprint on it. And that’s so if anyone ever has a question about the authentication, the notary can prove up the authentication.
Well the first thing you need to do is to pull every notary name off of every document that’s been filed in the county records office against your house, and send them a letter requesting a copy of their sequential ledger, from the day before to the day after any authentication appears in the record. And we suggest that you do not send it yourself. Have someone you know send it. And be sure to send its certified mail. Anything that you cannot conclusively prove that you sent and was received will go into the trash. Now that may not be right, but that’s the way it works. So always send all of your legal correspondences Certified Mail Return Receipt Requested!
The Post Office will give you a tracking number. Write that tracking number on the top of your letters & correspondences. Make a copy of the letter with the tracking number written on the top, then mail the letter. This provides you proof when they sign for the letter, and what the substance of the letter was.
You may get an answer back from them, but it will most likely be non-responsive. If they send you an answer and it is not the sequential ledger, or if the record shows that the ledger is incomplete, then the answer is non-responsive! To date, we have yet to receive a single responsive answer to this request. If you don’t receive a responsive answer, you will have a valid reason to believe that the authentication is invalid.
Now there is one particular notary that most people will have a question about, and that’s the one on the deed of trust or the mortgage. When you signed that at closing there was a notary sitting at the table across from you, as a rule. There’s required to be, but not always. Sometimes the lender will come to your house and have you fill out all the documents at your kitchen table. Well, that’s not quite legal because that deed of trust or mortgage must be authenticated; because that document is intended to be filed with the county register. And documents filed at the county register or are not self authenticating and they must be authenticated by a notary.
If there was no notary, than the document is not authenticated; but if there was a notary, you have to ask “was that a notary?” Because you don’t really know, they look like notaries and they act like notaries; but what we have found in sending these letters out, is that they are not necessarily notaries. Or even if they were notaries often they’re not notaries any longer. And when a notary cases to be a notary, the notary is required to send their substantial ledger to the clerk of the court, or county clerk. We’ve never found the county clerk who has one.
What we have found more often than I would have expected, is that we send a request from a notary on the deed of trust, and would get a letter back saying that our letter is undeliverable. So we contact the secretary of state who oversees notaries and who issues the notary authority and we asked the secretary of state for an address on the notary; and the secretary states because we don’t know who this person is. Now we are not exactly sure what is going on here. It may be that once a notaries’ commission expires, and it hasn’t been renewed, the secretary state may not maintain information on them. We don’t know if that’s the case or not, or if the secretary of state never had any information on the person. We don’t know what the deal is!
But what we do know is that the secretary of state says to us, “we don’t know anything about this person, and they’re not a notary, and we don’t have any record of them.” And for us, that works GREAT! We can live with that; because that creates an adverse inference that whoever sat across from us at the closing table, posing as a notary, was not in fact a notary.
Now maybe they were, but there’s no evidence to indicate that. So you can go back to the court, and say that you have reason to believe, and you do believe, that this document was never properly authenticated, and that the acknowledgement on the document was fraudulent, and you ask that the document be stricken from the record. Now what the court is likely to come back and say is: “well did you sign it?” To which you should reply: “Objection relevance!”
It’s irrelevant because the document must be authenticated, or proven, and it is not. You do not know if that is precisely the document that you signed at closing. Your bank may have made up another one. You can never know what the document your bank is reporting to have is, unless they bring you the original; and they will NEVER do that!
But you raise the issue so that if you can get the deed of trust, or mortgage, to be declared by the judge to be of no force and effect; your bank will have a real big problem! But generally the one that we can go after is not good deed of trust, or mortgage, in this particular regard. There are other places to go after the validity of the deed of trust, or mortgage.
But for now the documents that were really looking for, is the assignment of substitute trustee and the assignment of deed of trust. Now that one, we don’t know who signed at one, and this is the issue that goes to robo-signers. The problem with going to the court and accusing somebody being robo-signers, is you can go to the judge and say this person is a robo-signer and his name is splattered all over the Internet. And the judge is going to say “so, what does that have to do with this issue? Just because he’s accused of being a robo-signer doesn’t mean he didn’t have authority to sign this document. What evidence do you have to show that he did not have authority to sign this document?”
To which you can reply while Your Honor, this guy is a robo-signer and his name is all over the Internet. So I sent a letter to the company, for whom this person acted as an agent, and I requested evidence of the power of attorney for this person, and on these letters we have never received a responsive answer yet.
So after you complete the above mention step, you can then go to the court and say your Honor, I think this guy is a robo-signer (his name is splattered all over the internet), so I sent a letter to the company for whom he signed, asking them for proof of power of attorney, and I didn’t get any response. And this creates the adverse inference that the guy did not have power of attorney.
Furthermore, you’ve looked in the county record and expected to find evidence of power of attorney, as is required by law for anyone who files this type of document, that is specifically referenced by our state law, and I did not find any such evidence that he had power of attorney.
This creates a prima fascia case for this document being insufficient for filing in the record and I ask the court to rule that it’s insufficient, and is therefore void and of no force and effect.
This is all you want the judge to rule on at this time, and this is where you’re filing a petition for declaratory judgment. You’re not asking for any damages, at this time. You’re only asking that the judge make a declaration; and the only declaration we want the judge to make is that this document, as it exist by looking at the four corners, is insufficient for filing. Doing these steps as soon as possible can cause big problems for your bank and their foreclosure efforts.
Remember these steps are only the start to defeating your fraudulent mortgage or foreclosure. The banks have paid lobbyist to help Congress pass laws that benefit the banks and their foreclosure efforts, so you will need to do more to reach a successful outcome and a happy ending.
For more information on what you should do if you receive a notice of default or foreclosure complaint watch this video: https://fraudstoppers.org/how-to-respond-to-a-notice-of-default-or-foreclosure-complaint
If you are thinking about filing a lawsuit against your lender or current loan servicer for mortgage or foreclosure fraud register for a free mortgage fraud analysis and we will help you determine what legal options your loan qualifies for.
Facts About Bad Mortgage Loans
How significant a risk is noncompliance with consumer protection laws?
The mortgage industry is struggling to comply with consumer protection laws. A remarkable report published by the FDIC Office of the Inspector General reveals that during 2005 (which was the peak year of the mortgage boom measured by number of loans originated), 83% of federally supervised banks that made loans were cited for patterns of "significant compliance violations." The percentage was presumably higher for state-licensed, non-depository lenders who were responsible for originating 52% of subprime mortgages and are subject to a much broader patchwork of state regulation. Violations of consumer protection laws can result in rescission (effectively canceling the loan), defense against foreclosure, fines, penalties and (both civil and criminal) damages that can exceed the original principal balance of the loan.
You may download the report (Report Number 06-024) from the FDIC website. There are also additional reputational risks associated with charges of predatory and discriminatory lending. Investors - including anyone in the chain of title for whole loans and the securitization trust for securities - can be liable, even though the violator waste broker or originating lender. In other words, the investor can be held liable and suffer damages for actions outside its control and for which had no knowledge. What consumer protection laws does FRAUD STOPPERS PMA cover and how are these compliance requirements applied to a mortgage loan?
FRAUD STOPPERS PMA provides a comprehensive analyzes of electronic loan data to determine whether a mortgage transaction complies with over 300 federal and state consumer protection laws related to mortgage lending. Specifically, FRAUD STOPPERS PMA automated mortgage compliance audits reviews mortgage loans for compliance with the following consumer credit issues: truth-in-lending disclosures, usury, predatory lending, impermissible fees, interest rate accrual restrictions (such as negative amortization and balloons payments) and prepayment penalty enforceability.
It is important to understand that any number of laws may apply to a particular mortgage transaction. Knowing which laws apply is not a simple task, since it depends on how the lender is licensed or chartered. Licensed lenders operate under the licensing authorities of the various states with which they do business. Most states have multiple licenses granting lenders the authority to make loans. Each such license imposes different substantive requirements governing loan terms. For instance, certain licenses allow subordinate lien loans while others govern loans with higher interest rates.
In some states, more than one license may authorize lenders to make the same loan, although subtle differences in the consumer protection requirements apply to the loan terms. FRAUD STOPPERS PMA determines if lenders and brokers are properly licensed (and in good standing) or exempt, and then applies the correct laws based on that licensing status. It does this by leveraging its proprietary nationwide licensing database, described in the License Verification and Monitoring section of this site.
Chartered financial institutions—such as state and national banks and federal savings banks—are subject to different regulatory requirements. For instance, most chartered institutions “export” interest rates from their home state to the target state in which the loan is made. This results in a complex synthesis of both the home state’s and target state’s consumer protection laws —an analysis that is difficult to perform efficiently without automation. Likewise, chartered institutions may in certain cases preempt states laws and in other instances must observe them. Again, FRAUD STOPPERS PMA bases its reviews on how an institution is chartered and what permissible regulatory elections it is making.
Once the lender’s license or charter authority is known, as well as its elections, the review must consider the specific transaction terms—such as the APR, interest rate, loan balance, lien position, occupancy type, etc.—to determine which out of the several laws that might apply to the lender govern a particular mortgage loan. No other automated compliance solution provides this degree of detail and precision to its analysis, and this is the reason no other provider equals FRAUD STOPPERS PMA in quality.
Who Has The Burden of Proof in a Foreclosure Case?
Who Has Legal Standing to Foreclose?
Who has legal standing to foreclose? Only the mortgagee has standing to foreclose. Look, if you are planning to sue someone and you accuse them of some wrong doing, you better have proof. The person doing the accusing (the Plaintiff) has the burden of proof. Before you can go to court, you must have some sort of grievance that you are seeking relief on; in other words you must have legal standing. For example, if you had a contract and the other person broke that contract causing you to suffer as a result of that breach. This is called a Cause of Action. In other words, “why are you suing this guy? What wrong did he do to you?” You must have a valid reason to bring your suit.
There are a number of different causes of action you can accuse the other party of. For example, breach of contract, fraud, tortious interference, etc. Another very special type of cause of action is called a Quiet Title Action. These types of “Actions” (an “Action” is just legal jargon for a civil action…or a civil suit) are done when there is a cloud of title issue that needs to be resolved. As a title owner, you have an obligation to defend your title against encroachments. For example, if I started to build a fence three feet into your land and you say nothing… then five years later, I sell my land, and change the legal description to include that extra three feet…and you say nothing, then that extra three feet is mine.
Let’s discuss the Deed of Trust and Mortgage to see how this all fits in.
The Deed of Trust or Mortgage:
The Deed of Trust is a special Trust that is created specifically so that you (the landlord) temporarily grant your title in trust to the new Trust to secure against the promissory note. When you create a Trust, you appoint a Trustee. You also give that Trustee the power to sell your property in the event of a default of the promissory note. This is the vehicle and mechanism your “lender” uses to foreclose and sell your house. The same goes with a Mortgage in a Judicial State, except there is no need for a Trustee.
In the event that there is a problem with the promissory note or deed of trust, then there is an issue called “cloud of title”. When a title is clouded, you will have a problem selling your house. Let me give you an example.
Let’s say the County places an imminent domain claim on a strip of land on your property to lay down some pipes. They then record this on your county records. But because of budget cuts, they decided not to lay the pipes, but forgot to give you your land back. 2 years later, you are trying to sell your house. It will be stopped because you are selling part of a land you don’t own (i.e. the strip for the un-laid pipes). In order to un-cloud the title, you will need to seek a Quiet Title Action.
As we discussed, your promissory note has been permanently converted into a stock. It has also been fully discharged. The language on your Deed of Trust says “This Deed of Trust secures a promissory note”, and if the promissory note is destroyed through permanent conversion, then the Deed of Trust secures nothing. This is just like the situation with the strip of land with the un-laid pipes. It’s lost property. It’s unclaimed land. As the Title owner, you have an obligation to defend your land and title.
This is why we need to do a Quiet Title Action to reclaim our land to resolve the controversy. In a Quiet Title Action, you basically issue a challenge to all parties wishing to lay a claim on our property to come forth and provide the proof of their claim(s).
However, remember the rule of court is the Plaintiff has the burden of proof. In the following parts, we will go into uncovering proof. If you haven’t done so, we recommend that you purchase a chain of title & securitization analysis because once you have real evidence that your mortgage contains fraud, legal violations, and or has been securitized you will have a much better chance at beating your foreclosure and saving your house.
Federal Rules of Evidence:
You can sue your lender in federal court and/or state court (this is called circuit court). Typically, the State Rules of Civil Procedure and State Rules of Evidence will govern state courts. However, since we don’t know which State you are in, and for the most part, these rules are pretty similar, we’re going to talk about the Federal Rules of Evidence governing the admissibility of photocopies. Specifically, we want to talk about Rule 1002 and Rule 1003. Please click on these and read up on them. These should be similar with your State Rules of Evidence. You should consult your own State’s Rules of Evidence to confirm.
Basically, what will happen is your “lender” will bring to court photocopies of the Deed of Trust and Promissory Note to claim their rights as proof of claim in your Quiet Title Action.
These are admissible, unless you learn to object!
The rules of evidence are simple. A photocopy is admissible unless it is unfair to admit the photocopy in lieu of the original. What you need to know is, under Uniform Commercial Code, your promissory note is a one of a kind negotiable instrument, just like a check. You cannot go down to a bank and cash a photocopy of a check. It has to be the real thing. Your promissory note contains the only legally binding chain of title. A photocopy made years ago does not contain the chain of title.
Basically, the argument is “sure, I signed a loan with you then, but we know you sold it. Can you prove that you still own it?”
Opposing Counsel will say, “But Your Honor, the plaintiff has the burden of proof. They are alleging that we sold the note. Where’s the proof?”
And that’s where most Pro Se Litigants get stuck!
If you do not have the proof (evidence) when you file your civil action, your case will be tossed out, and classified as “failure to state a claim”.
What typically happens when you file an action is opposing counsel (the dirty rotten lawyer working for the bank) will file a Motion to Dismiss. They ALWAYS DO IT; so expect it. In order to survive the Motion to Dismiss, you must have sufficient proof.
If you haven’t already purchased your copy of Jurisdictionary, do it now because you have no chance of winning your case if you don’t know the rules of the game. This is a mandatory resource if you’re serious about defeating your foreclosure and saving your house. I cannot stress how much you need this product!
Evidence of Movement:
The first and simplest evidence we can bring to court is called Evidence of Movement. In an Evidence of Movement situation, you closed with Bank A (let’s say Stearns Lending), who sells it to Countrywide (Bank B), who then got acquired by Bank of America (Bank C) ….who then securitizes the note into New York Mellons Bank Trust Series 12345.
So, the Deed of Trust names Bank A as the Beneficiary. But Bank C wants to foreclose. Bank C comes to the court with a Deed of Trust pointing at Bank A (Stearns Lending). Where is the Chain of Title on the Promissory Note that gives Bank C (BofA) the Right to enforce the note?
If you have a situation like this, you might not need to get a securitization audit, although getting one may make your case stronger and more likely to succeed.
Often times, Bank C would come to the Court claiming “Your Honor, we have reacquired the note and now have the right to foreclose.” If you encounter this situation, you must learn to object.
1) Show me the perfected chain of title. If you have sold it, then you lost your right to enforce.U.S. Code Title 12: Banks and Banking PART 226—TRUTH IN LENDING (REGULATION Z), a servicer does not have the rights of a lender if it has acquired the note for the purposes of administration.
2) Please stipulate for the record whether the note is part of a pooling and servicing agreement. Please stipulate whether the note has been securitized. Please stipulate who “New Your Big Bad Bankers Trust Series 12323 (of course yours will be different)” is, are they a REMIC?
3) If the loan has been securitized, did you reacquire the note as an unsecured debt in the secondary securities market? Are you acting in the capacity of a debt collector as governed under 15 U.S.C. §1692?
Remember, this is fraud at its greatest. Only the top echelon bankers know this scam. Even their Counsel does not know the scam that is being perpetrated here. He is just taking his client’s word at face value. He is hearing “we bought the note back” and accepts that the bank now has the right to foreclose. They don’t. Most homeowners who are confronted with this situation don’t know the scam either and run out of juice.
Do you see how we structure our arguments here? It was never “Show me the note”. We are attacking them on the “show me standing” and “show me that you are the real and beneficial party of interest who has the right to enforce the note”.
MERS is Mortgage Electronic Registration Systems it was created by banks in order to “streamline” the warehousing of loans and mortgage documents. Basically MERS is a front organization that was created to defraud homeowners and government agencies. It pretends to hold your note, but in fact holds nothing. Banks set up MERS in the 1990s to help speed the process of packaging loans into mortgage-backed bonds by easing the process of transferring mortgages from one party to another. But ever since the housing crash, MERS has been besieged by litigation from state attorneys general, local government officials and homeowners who have challenged the company’s authority to pursue foreclosure actions. Recently there have been many court decisions delivering death blows to MERS and their 70,000,000+ mortgages they claim to hold.
For example in MERS Is Dead: Can Be Sued For Fraud: WA Supreme Court we learn that the Washington State Supreme Court dealt a death blow to MERS: “The highest court in the state of Washington recently ruled that a company that has foreclosed on millions of mortgages nationwide can be sued for fraud, a decision that could cause a new round of trouble for the nation’s banks.
The ruling is one of the first to allow consumers to seek damages from Mortgage Electronic Registration Systems, a company set up by the nation’s major banks, if they can prove they were harmed.
Legal experts said last month’s decision from the Washington Supreme Court could become a precedent for courts in other states. The case also endorsed the view of other state courts that MERS does not have the legal authority to foreclose on a home.
“This is a body blow,” said consumer law attorney Ira Rheingold. “Ultimately the MERS business model cannot work and should not work and needs to be changed.”
A spokeswoman for MERS said the company is confident its role in the financial system will withstand legal challenges. The Washington Supreme Court held that MERS’ business practices had the “capacity to deceive” a substantial portion of the public because MERS claimed it was the beneficiary of the mortgage when it was not.
This finding means that in actions where a bank used MERS to foreclose, the consumer can sue it for fraud. If the foreclosure can be challenged, MERS’ involvement would make repossession more complicated.
On top of that, virtually any foreclosed homeowner in the state in the past 15 years who feels they have been harmed in some way could file a consumer fraud suit.
“This may be the beginning of a trend,” says Elizabeth Renuart, a professor at Albany Law School focusing on consumer credit law. The company’s history dates back to the 1990s, when banks began aggressively bundling home loans into mortgage-backed securities. The banks formed MERS to speed up the handling of all the paperwork associated with recording the filing of a deed and the subsequent inclusion of a mortgage in an entity that issues a mortgage-backed security. MERS allowed the banks to save time and money because it permitted lenders to bypass the process of filing paperwork with the local recorder of deeds every time a mortgage was sold.
Instead, banks put MERS’ name on the deed. And when they bought and sold mortgages, they just recorded the transfer of ownership of the note in the MERS system.
The MERS’ database was supposed to keep track of where those loans went. The company’s motto: “Process loans, not paperwork.”
But the foreclosure crisis revealed major flaws with the MERS database.
The plaintiffs in the Washington case, homeowners Kristin Bain and Kevin Selkowitz, argued that the problems with the MERS database made it difficult, if not impossible; to determine who really owned their loan. It’s an argument that has been raised in numerous other lawsuits challenging the ability of MERS to foreclose on a home.
“It’s going to be very easy for consumers to say they were harmed because it’s inherently misleading,” says Geoff Walsh, an attorney with the National Consumer Law Center. If consumers can’t identify who owns their loan, then they don’t know whom to negotiate with, and can’t even be certain of the legitimacy of the foreclosure.
In a statement, MERS spokeswoman Janis Smith noted that banks stopped using MERS’ name to foreclose last year. She added that the opinion will “create confusion” for homeowners in the state of Washington while the trial courts consider its effect on pending cases.
Meanwhile, MERS is attempting to remake itself. The company has a new chief executive and a new branding campaign. In Washington D.C. federal lawmakers have recognized the need to create a national mortgage-recording database that would track all U.S. mortgages. MERS is lobbying to build it.
The case is Bain (Kristin), et al. v. Mortg. Elec. Registration Sys. et al., Washington Supreme Court, No. 86206-1.” (Reuters).
This information about MERS is very important for you to understand, if you are going to successfully defend your points in court. For a list of some FACTS about MERS check out https://fraudstoppers.org/a-few-facts-about-mers and also pay attention to: MERS-and-Citibank-are-not-real-parties-CA.pdf
IF you would like to see if your loan is serviced by MERS, click here: https://www.mers-servicerid.org/sis/.
Or you can also purchase a professional Securitization Audit, a Robo-Signing Check, or a Forensic Audit from Fraud Stoppers.
Who is the Investor?
There is a good chance Fannie Mae or Freddie Mac owns your loan. If you can find your properties here, then you can present this as evidence that your servicer (so called “lender”) is not a real party of interest. This is critical evidence to bring forth in your civil action. You must include this as a claim in your suit.
To find out whether Fannie Mae owns your note, please come here.
Freddie Mac’s database is here.
IMPORTANT: DO THIS NOW. Research whether these guys own your note. If so, then you have a vital piece of evidence to present to the court.
Why is this so important? This is a US Supreme Court ruling that says the Deed of Trust is the peripheral, and the Promissory Note is the “Thing”. Imagine if you will, that the Deed of Trust is the tail, and the Promissory note is the dog. He who owns the dog controls the tail. He who controls the tail does not wag the dog.
Your lender will want to come in to lay claim on your title only showing ownership to the Deed of Trust without disclosing who the real and beneficial owner of the promissory note. This is admissible unless you know to object. If you quote this law when there is evidence of movement, then this will stop them in their tracks. Basically, it’s the same thing. ”Show me you have subject matter jurisdiction over this controversy”, “show your proof of claim and title”. He, who controls and owns the promissory note, controls the Deed of Trust.
Getting County Records:
Look, State Civil Code requires that every party of interest in your property must record their interest at County Records. So, any loan assignments must be recorded. Any notices must be recorded. To gather your evidence, you should head down to your local county recorder’s office and request for a complete printout of all recorded documents for your property from the date of subject loan. Go down and talk to your county recorder. They will usually be able to help you get the “title search dump”. You don’t need certified copies. Just the copies are fine, but it is a good idea to get all these documents handy so you can see what’s been recorded against your property.
What you are trying to find is instances where there is evidence of movement…i.e. the loan has been sold or securitized, but there was no corresponding evidence recorded at the County. So the next step is to go to the County Recorder’s Office for the DEED RECORDS and get a copy of every page of each document that is in the deed records of your home, since you got your last loan.
Print the Search Results, with your name as GRANTOR and GRANTEE, and your wife’s name as GRANTOR and GRANTEE, then search the property address, and print the search results.
Take your camera and take a picture of every page starting with the index or the cover page of your deed record file and save each picture by:
Yr-mo-day, YOUR LAST NAME, Name of Doc, Page of Doc:
[Example: 2013-07-04, Last Name, Original Deed of Trust received from ABC Brokers for Countrywide, 17 Pages]
You should end up with copies of your Original Warranty Deed, Deed of Trust (or Mortgage, as it is called in some states).
While looking at the Deed of Trust or Mortgage, click on the button or link for “RELATED DOCUMENTS” and print the search results, then get a copy of any “Assignments of Deed of Trust or Mortgage” and any “Releases of Liens”,” Appointments of Substitute Trustees”, “Trustee Deeds”, and Law Firm Letters, like Default or Acceleration Letters from Attorneys who are hired to collect the debts from you. Get a copy of everything in the file to the present date.
Calling a Title Company:
If you don’t want to do it yourself, then you can call a local Title company for a complete title research. A complete title research includes a report of all activities on your title from the date of sale. They will also print copies of these documents for you.
Writing a Foreclosure Timeline:
A timeline is a chronological structure and is frequently the way cases are presented to juries and judges of fact. Visual representations are important and they make it easy to share the details of you case with others. It sometimes becomes the underlying foundation for the flow of all information related to a case. Therefore, it is important that care be given in the creation of visual timelines. Here is a Sample Timeline.
The Chain of Title & Securitization Analysis:
For those of you who do not have clear evidence of movement, for example, you closed with Countrywide and the loan got acquired by Bank of America. Or your loan went through Chase and is now Chase is just a servicer, or GMAC (and GMAC is now servicing), then getting a Securitization Audit might be a way to go. Remember, as the Plaintiff, you have the burden of proof.
It will be like having a photo of a bank robber with a gun aimed at a teller. It’s them caught with their hands in the cookie jar…and it puts opposing counsel in a position of having to explain to the judge why he should not be sanctioned for bringing fraud before the court. Fraud Stoppers Foreclosure Defense System includes one of the most powerful Chain of Title & Securitization Analysis available today. Banks hate it because it’s preformed by licensed professionals and includes the admissible evidence that you need to save your house from foreclosure. Banks HATE these because it exposes their fraud.
In today’s world of securitized residential mortgages, a Secured Mortgage Loan consists of two parts: (A) the financial obligation (created by the Tangible Promissory Note) which operates in accordance with Federal and State Law, and (B) an enforceable contractual lien instrument (i.e. Tangible Security Instrument, Mortgage, Deed of Trust) intended to provide an alternate method of collection of payment to the Holder of the financial instrument in accordance with State Law. In reviewing the transfer and ownership history of a Secured Mortgage Loan, one must evaluate the negotiation of the financial instrument and consider the laws applicable to the Security Instrument upon said negotiation of the financial instrument.
Our Competent Evidence Package looks at the true sequential ownership of a Securitized Mortgage Loan Security Instrument as evidenced by the documents related to the client’s property filed with the County Recorder’s Office, and compares it to the claims of ownership made by the party attempting to foreclose. The Competent Evidence Package shows what steps SHOULD have been taken in the securitization process in order to become a proper party to enforce the mortgage contract, according to both statutory and case l aw. More importantly, the Competent Evidence Package shows what steps were ACTUALLY taken in the securitization process, and what steps were NOT taken, and the results of these actions/inactions on the Chain of Title as shown by the County Records.
Many times clients and their attorneys lack competent evidence. The term “competent evidence” is used to refer to evidence that is directly relevant and of such nature that it can be admitted into evidence in a court of law. For a client considering going into litigation, a prior assessment of the potential violations surrounding the Chain of Tit le of a Securitized Mortgage Loan is a much-needed tool for determining whether there is a valid basis for proceeding with a legal action.
The goal is to arm one’s self with indisputable evidence so they may clearly and accurately demonstrate that the claims made by the foreclosing party may be inaccurate and/or fraudulent. In addition to the written Chain of Title Analysis, our Investigators also create a customized infographic/flowchart/schematic to visually represent their findings regarding the path taken by the various parts of the client’s Mortgage Loan and the parties involved in the securitization process. This visual representation is invaluable in making the arguments indisputable and understandable to the clients, attorneys, and judges – A picture is truly worth a thousand words.
Now, let’s continue with a little role playing.
Opposing Counsel:”but Your Honor, the plaintiff has the burden of proof. They are alleging that we sold the note. Where’s the proof?”
You:”Your Honor, please see Exhibit C in our evidence as part of our initial complaint. On Page X, you will find our loan listed as a permanent fixture in an SEC filing for the New York Mellons Bank Trust Series 1232342 REMIC in which this loan has been securitized.”
Judge: “Counsel, what do you have to say to that?”
Opposing Counsel:”I don’t know about this you’re Honor; I was informed by my client that they bought back the loan.”
You: “Counsel, are you aware of FAS 140? Under the Financial Accounting Standard 140, it says that once a loan has been sold into a pooling and servicing agreement, the lender forever loses control of the asset.”
“Are you aware that this loan is a permanent fixture of the New York Mellons Bank Trust Series 1232342 REMIC?”
“Where is the Chain of Title that gives your client the right to enforce the promissory note?”
“Are you aware that the promissory note has been discharged in the REMIC as a bad debt and that the individual share holders have received tax credit for this loss?”
“Are you aware that once a debt has been discharged, it loses its ability to collect?”
“Are you aware that your client bought the note as a discharged debt and an unsecured instrument?”
“I motion the court to have Counsel stipulate that you know with firsthand knowledge that the note has not been discharged as a non-performing asset. “If he cannot, then say… “I move the court to sanction opposing counsel for bringing fraud before the court. Counsel misrepresents the facts in order to deceive the court.”
Keep in mind that the courts are absolutely corrupt and will try to rule against you at every opportunity. Therefore it is vital that you not only learn the rules of the game Jurisdictionary…but you must also learn how to land on them like a ton of bricks when they try to break the law and violate your legal rights!
FRAUD STOPPERS Private Members Association (PMA) has a PROVEN WAY to help you save time and money, and increase your odds of success, suing the banks for mortgage and foreclosure fraud.
Our primary focus is helping you get clear and marketable title to your property by arguing that the actions of the banks have made the security provisions of the mortgage/deed of trust unenforceable as a matter of law.
Take action right now and get the FACTS and EVIDENCE that you need to gain the legal remedy that you deserve!
Who Owns Your Mortgage Note?
Have you ever asked who owns your mortgage note? A better question to ask is, “If I paid off my mortgage loan tomorrow, would I get clear and equitable title to my real property?” If your mortgage loan contract was converted into a mortgage backed security and sold to an investment trust on Wall Street you might not!
If you are thinking of applying for a loan modification, or refinancing through the Home Affordable Refinance Program (HARP), Home Affordable Modification Program (HAMP), or other program(s) under the Making Home Affordable (MHA) initiative there are a few things to consider.
First, remember that the entity who claims to own your mortgage loan is not automatically the same entity that may be servicing your mortgage loan. A loan servicer is a debt collections company that sends you mortgage statements, takes your payments each month, and if you have an escrow account, pays your homeowner’s insurance and property tax bills. But who really owns your mortgage loan?
If you want to find out here are a few things you can do:
- Ask the servicer. Your loan servicer is legally obligated to tell you the name, address, and telephone number of the owner of your loan as shown in their records. It’s a good idea to ask them in writing officially with a “Qualified Written Request” via certified mail while keeping a log of your communications. The name of your servicer should be on your mortgage statement, but you can also use the MERS link below.
- Original lender. Your loan may have never been sold, and still kept as a “portfolio loan” with the original lender. That’s the way loans used to be done!
- Fannie Mae. In reality, many loans are sold to FNMA aka “Fannie Mae”. See Fannie Mae loan lookup tool.
- Freddie Mac. Similar story with Federal Home Loan Mortgage Corporation (FHLMC) aka “Freddie Mac”. See Freddie Mac loan lookup tool.
- Mortgage Electronic Registration Systems, Inc. (MERS) is a big online registry designed to replace the costly process of publicly recording mortgage ownership at the local government level with a private electronic version that allows the swapping of mortgages with no friction at all. MERS tracks both the servicing rights and ownership of mortgage loans in the United States, although the accuracy has been called into question. See MERS ServiceID lookup tool. You can also call them at 888-679-6377 FREE.
- Search the Securities and Exchange Commission (SEC) for the alleged trust that claims they are the owner of your mortgage loan: https://fraudstoppers.org/how-to-search-the-sec-for-a-securitized-trust
- Register for a Free Mortgage Fraud Analysis and Securitization Search. Complete our Mortgage Fraud Analysis form and we will conduct a free securitization check to see if your mortgage loan contract was converted into a mortgage backed security and who really owns your note. If your loan was securitized than you may have legal standing to sue your lender, or current loan servicer, for mortgage fraud and quiet title. Find out more by completing our Mortgage Fraud Analysis form or call us at 773-877-3655 and we will help you get the facts and evidence you need to get the legal remedy you deserve.
Cases like the Glaski v. Bank of America and Jesinoski v. Countrywide Home Loans may have provided hope for homeowners who were victims of mortgage and foreclosure fraud. But they did not strike at the heart of the real problem behind the securitization of millions of mortgage loans.
The Glaski decision states that if some entity wants to collect on a debt they must first legally own that debt. Furthermore, if that entity is claiming ownership by way of an Assignment, it must prove that Assignment is legally valid.
The Jesinoski case addressed a borrower’s right to rescind, or cancel, their mortgage loan contract under the Truth in Lending Act (TILA) by only providing written notice to the lender, without filing suit. A loan is rescinded at the time the rescission letter is mailed. If the lender wants to refute or fight the rescission they must file an action to do so, and they have limited time to do so.
If your mortgage was securitized (the practice of pooling mortgages and selling their related cash flows to third party investors as securities) then it was part of a table funded transaction. In a table funded transaction the borrower named on the note is NOT in debt to the lender ("Pretender Lender") because they signed the note in the capacity of an Accommodation Party, or co-signer for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument!
The broker, or originator, of the loan is pretending to loan money to the alleged "Borrower", but in reality they trick the alleged "Borrower" into co-signing on a note that is pledged as collateral on a warehouse line of credit with the funding bank.
It is illegal for banks to loan credit, they can only loan money!
But if the Pretender Lender is not the entity putting up the funds, then there is no underlining indebtedness between the alleged "Borrower" and the originator who is named on the note. And if there is no underlining indebtedness between the parties named on the note, then the mortgage (or deed of trust) vaporizes into nothingness, and is legally unenforceable as a matter of law.
If your mortgage loan contract was part of a table funded transaction and converted into a mortgage backed security that was sold to an investment vehicle, or trust, on Wall Street, then you may have legal standing to rescind your mortgage loan contract, and sue your "Pretender Lender" for Special Damages equal to triple the original amount of your note, plus clear and equitable title to your home!
Fraud Stoppers is part of a National Private Members Association that provides back office litigation support to law firms, foreclosure defense advocacy groups, and pro se litigants nationwide. Our Private Members Association can help you sue your lender for mortgage fraud, with or without an attorney.
Then after our free mortgage fraud analysis is done, we can scheduled a free potential cause of action consultation to discuss your loan and lawsuit in detail and help you get started filing your state and federal lawsuit for the remedy that the law entitles you to, and that you deserve!
You can save 60% to 70% in legal fees when you get your lawsuit started yourself, Pro Se, (without an attorney), and then bring in a local attorney to help you at trial, where you need them the most! This way you can get the best of both worlds: Save money in legal fees, and get the professional help you need at the same time!
FRAUD STOPPERS Private Members Association (PMA) has a PROVEN WAY to help you save time and money, and increase your odds of success, suing the banks for mortgage and foreclosure fraud.
Our primary focus is helping you get clear and marketable title to your property by arguing that the actions of the banks have made the security provisions of the mortgage/deed of trust unenforceable as a matter of law.
Lack of Standing to Foreclose
The requirements set forth in the pooling and servicing agreements were not followed, and they were not followed in the following way.
The pooling and servicing agreements says that when the notes are transferred to the trust there needs to be an endorsement in blank to the trust, as well as a complete chain of endorsements for all proceeding transfers.
That means that the originator of the loan has to have a specific endorsement transferring it from the securitization sponsor, the sponsor to the depositor, and then the depositor in blank to the trust.
What I am told is that in the majority of the cases that chain of endorsements is not there. There is simply a single endorsement in blank. That creates a problem because it does not comply with the trust documents.
That is a severe problem because most pooling and servicing agreements are trust that are governed by New York law, and New York law says that if you are not punctilious in following the trust documents for a transfer, the transfer is void.
It doesn’t matter if you intended it or not, it’s void.
That transfer is void even if that transfer would have otherwise complied with law.
And if the transfer is void that would mean that the trust does not own the mortgages, and therefore lacks standing to foreclose.
It’s axiomatic that in order to bring a foreclose action the plaintiff must have legal standing.
Only the mortgagee has such standing.
Thus various problems like false or faulty affidavits, as well as back dated mortgage assignments, and altered or wholly counterfeited notes, mortgages, and assignments all relate to the evidentiary need to prove standing.
What’s in a Qualified Written Request (QWR) Letter
- “Qualified Written Requests” under RESPA put mortgage servicers in a troublesome place. But there’s law on their side to help distinguish legitimate issues from abuse and harassment
- A bank will receive a letter from a mortgage borrower, or from an attorney or other agent purporting to act on behalf of that borrower. The letter will generally demand that the lender provide the inquirer with a wide-ranging amount of information concerning the borrower’s loan and the transaction in general.
- The communication may assert that there is a defect or mistake in the borrower’s account, and then demand that immediate action be taken to correct that mistake.
- Asserting only slight oversights in the borrower’s escrow account calculation.
- The letters are marked as “Qualified Written Request” under Section 6 of RESPA.
- The “QWR” label stirs legal consequences that servicers and lenders cannot ignore.
What the law says:
- QWRs are special and important because they arise under specific consumer protection law contained in Section 6 of the Real Estate Settlement Procedures Act (RESPA). Section 6 was added to RESPA in 1990, and generally imposes standards and requirements regarding the assignment sale or transfer of mortgage loan servicing. (12 U.S.C. Section 2605.) Under Section 6 of RESPA, borrowers are afforded a dispute resolution mechanism that gives rise to specific duties on the part of servicers where certain conditions are met.
- RESPA’s Section 6 and Section 3500.21(e) of RESPA’s implementing regulations (Regulation X), provide that consumer inquiries would constitute QWRs where:
- They are submitted in writing.
- They include, or allow the servicer to identify, the name and account of the borrower.
- They include a statement of the reasons for the borrower’s belief that the account is in error or must provide sufficient detail to the servicer about other information the borrower is seeking. (12 U.S.C. Section 2605(e)(1)(B)(ii))
- Where all such items are included in correspondence to a mortgage loan servicer, the servicer must then provide written acknowledgment to the consumer within 20 business days of receipt of the request. The receipt of a QWR triggers an affirmative duty to investigate the problem identified by the consumer, which must be rectified or explained not later than 60 business days after the receipt of the request.
Unlike other inquiries from consumers, the duties that arise from inquiries that qualify as a QWR have potent legal consequences.
- Under RESPA, borrowers can institute a private lawsuit for a Section 6 violation. They can potentially then recover actual and statutory damages (up to $1,000 per violation), plus attorney’s fees.
- Furthermore, class-action lawsuits are available in instances of pattern and practices of non-compliance, within three years, of the violation against a loan servicing company who refuses to comply with Section 6.
- Lawsuits for violations of Section 6 may be brought in any federal district court in the district in which the property is located or where the violation is alleged to have occurred.
- Finally, either HUD, a state attorney general, or state insurance commissioner may bring an injunctive action to enforce violations of Section 6 within three years.
- Clearly then, any correspondence received by a bank that is marked as “QWR” should not be ignored.
- The important question for compliance professionals is, therefore, how should an institution respond to the QWR, and equally important, how should the institution handle requests that are plainly abusive or harassing?
How do you spot a true QWR?
- As a preliminary matter, a request must specify the particular errors or omissions in the account, along with an explanation from the borrower of why he believes an error exists, in order to qualify as a QWR. A list of unsupported demands for information is not sufficient.
- “A qualified written request must … include a statement of the reasons for the belief of the borrower that the account is in error.” Walker v. Equity 1 Lenders Group, 2009 WL 1364430 *4-5 (S.D.Cal. 2009).
- Please note that if your institution is not a mortgage loan servicer, these provisions do not apply to you.
- By coverage and definition, the RESPA provisions under Section 6 apply to only “servicers” as defined by the statute. If you do not service mortgage loans, the requirements described herein are inapplicable to your institution.
- The QWR provision applies only to mortgages secured by a first lien, thereby excluding subordinate-lien loans and open-end lines of credit.
- RESPA requires a QWR to request information “relating to the servicing of the loan.” (See 12 U.S.C. Section 2605(e)(1)(A)).
- “Servicing” is defined as “receiving any scheduled periodic payments from a borrower pursuant to the terms of any loan, including amounts for escrow accounts described in Section10 [of RESPA], and making the payments of principle and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the loan.”
- A QWR which requests no information related to servicing is not a valid QWR. In particular, requests related to origination do not qualify as QWRs.
- A leading case discussing this issue, MorEquity v. Nameem (118 F. Supp. 2d 885 (N.D. Ill. 2000), reached the important conclusion that borrowers fail to state a claim where the borrower’s request merely seeks information concerning the validity of the underlying loan and mortgage documents, but does not seek any information as to the status of the account balance.
Requests made in a QWR must relate to servicing and escrow matters; those requests that relate to extraneous issues dealing with the items relating to the loan’s settlement or secondary market information, for instance, are simply outside the proper scope of the QWR process.
- As a final, critical, note, if after considering all the elements listed above, a bank discards a request as not qualifying under RESPA’s QWR provisions, most legal experts recommend that the bank’s rationale should be well explained, and that the bank should document the reasons for rejecting the supposed QWR. Such rejections should, where possible, be sent back in writing. Legal counsel should be involved in ensuring that this procedure meets legal standards.
Dealing with the legitimate QWR
- When a servicer receives and properly identifies a valid QWR, the servicer must, by law, both acknowledge receipt of a QWR and respond to the substance of any claims or requests included in the QWR.
- In addition, the law directs servicers not to provide information to a consumer reporting agency during the 60 days following receipt of the QWR concerning overdue payments related to that period or to the QWR. (See RESPA Section 2605(e)(3) )
- In establishing procedures to comply with RESPA’s QWR provisions, banks should keep in mind that, contrary to some claims, the QWR process does not require a lender or servicer to stop foreclosure proceedings or other legal action on the loan.
- To properly respond to the QWR:
- A servicer must, within 20 business days, provide a written response acknowledging receipt of the QWR. (12 U.S.C. Section 2605(e)(1)(A))
- Within 60 business days the servicer must investigate the account, make any appropriate corrections, and provide the consumer with a report of their action. (Id. at Section 2605(e)(2)(A))
- If the servicer corrects the account, the servicer must provide a written explanation of the corrections. (Id.)
- If the servicer does not correct the account, it must provide an explanation or clarification that includes a statement of reasons why the account is correct and the name and telephone number of an employee of the servicer who can be contacted to further assist the borrower.
You can get a FREE Qualified Written Request (QWR) Letter at https://fraudstoppers.org/free
What is MERS?
What is MERS? MERS is the Mortgage Electronic Registration System and it is an electronic database that holds digitized mortgage loan documents. You can search the MERS Database here: The MERS Servicer ID to identify the servicer associated with a mortgage loan registered on the MERS System.
Bankers Association testified to THE FLORIDA SUPREME COURT (in CASE NO.: 09-1460) that the physical loan documents were deliberately destroyed to avoid any confusion upon their conversion to electronic files. CASE 09-1460 COMMENTS OF THE FLORIDA BANKERS ASSOCIATION
In other words, the Banksters deliberately destroyed the wet ink signature loan documents for millions of mortgages in MERS the Mortgage Electronic Registration System.
A Few Facts about MERS
- Mortgage Electronic Registration Systems (MERS) is incorporated within the State of Delaware.
- Mortgage Electronic Registration Systems (MERS) was first incorporated in Delaware in 1999.
- The total number of shares of common stock authorized by MERS’ articles of incorporation is 1,000.
- The total number of shares of Mortgage Electronic Registration Systems (MERS) common stock actually issued is 1,000.
- Mortgage Electronic Registration Systems (MERS) is a wholly owned subsidiary of MERSCorp, Inc.
- MERS’ principal place of business at 1595 Spring Hill Road, Suite 310, Vienna, Virginia 22182
- MERS’ national data center is located in Plano, Texas.
- MERS’ serves as a “nominee” of mortgages and deeds of trust recorded in all fifty states.
- Over 50 million loans have been registered on the Mortgage Electronic Registration Systems (MERS) system. (UPDATE 9/11/2011: 70 MILLION American Mortgages)
- MERS’ federal tax identification number is “541927784”.
- Mortgage Electronic Registration Systems (MERS) does not take applications for, underwrite or negotiate mortgage loans.
- Mortgage Electronic Registration Systems (MERS) does not make or originate mortgage loans to consumers.
- Mortgage Electronic Registration Systems (MERS) does not extend any credit to consumers.
- Mortgage Electronic Registration Systems (MERS) has no role in the origination or original funding of the mortgages or deeds of trust for which it serves as “nominee”.
- Mortgage Electronic Registration Systems (MERS) does not service mortgage loans.
- Mortgage Electronic Registration Systems (MERS) does not sell mortgage loans.
- Mortgage Electronic Registration Systems (MERS) is not an investor who acquires mortgage loans on the secondary market.
- Mortgage Electronic Registration Systems (MERS) does not ever receive or process mortgage applications.
- Mortgage Electronic Registration Systems (MERS) simply holds mortgage liens in a nominee capacity and through its electronic registry, tracks changes in the ownership of mortgage loans and servicing rights related thereto.
- MERS© System is not a vehicle for creating or transferring beneficial interests in mortgage loans.
- Mortgage Electronic Registration Systems (MERS) is not named as a beneficiary of the alleged promissory note.
- Mortgage Electronic Registration Systems (MERS) is never the owner of the promissory note for which it seeks foreclosure.
- Mortgage Electronic Registration Systems (MERS) has no legal or beneficial interest in the promissory note underlying the security instrument for which it serves as “nominee”.
- Mortgage Electronic Registration Systems (MERS) has no legal or beneficial interest in the loan instrument underlying the security instrument for which it serves as “nominee”
- Mortgage Electronic Registration Systems (MERS) has no legal or beneficial interest in the mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
- Mortgage Electronic Registration Systems (MERS) has no interest at all in the promissory note evidencing the mortgage indebtedness.
- Mortgage Electronic Registration Systems (MERS)is not a party to the alleged mortgage indebtedness underlying the security instrument for which it serves as “nominee”.
- Mortgage Electronic Registration Systems (MERS) has no financial or other interest in whether or not a mortgage loan is repaid.
- Mortgage Electronic Registration Systems (MERS) is not the owner of the promissory note secured by the mortgage and has no rights to the payments made by the debtor on such promissory note.
- Mortgage Electronic Registration Systems (MERS) does not make or acquire promissory notes or debt instruments of any nature and therefore cannot be said to be acquiring mortgage loans.
- Mortgage Electronic Registration Systems (MERS) has no interest in the notes secured by mortgages or the mortgage servicing rights related thereto.
- Mortgage Electronic Registration Systems (MERS) does not acquire any interest (legal or beneficial) in the loan instrument (i.e., the promissory note or other debt instrument).
- Mortgage Electronic Registration Systems (MERS) has no rights whatsoever to any payments made on account of such mortgage loans, to any servicing rights related to such mortgage loans, or to any mortgaged properties securing such mortgage loans.
- The note owner appoints MERS to be its agent to only hold the mortgage lien interest, not to hold any interest in the note.
- Mortgage Electronic Registration Systems (MERS) does not hold any interest (legal or beneficial) in the promissory notes that are secured by such mortgages or in any servicing rights associated with the mortgage loan.
- The debtor on the note owes no obligation to MERS and does not pay Mortgage Electronic Registration Systems (MERS)on the note.
- Mortgage Electronic Registration Systems (MERS) is not entitled to receive any of the payments associated with the alleged mortgage indebtedness.
- Mortgage Electronic Registration Systems (MERS) is not entitled to receive any of the interest revenue associated with mortgage indebtedness for which it serves as “nominee”.
- Interest revenue related to the mortgage indebtedness for which Mortgage Electronic Registration Systems (MERS) serves as “nominee” is never reflected within MERS’ bookkeeping or accounting records nor does such interest influence MERS’ earnings.
- Mortgage indebtedness for which Mortgage Electronic Registration Systems (MERS) serves as the serves as “nominee” is not reflected as an asset on MERS’ financial statements.
- Failure to collect the outstanding balance of a mortgage loan will not result in an accounting loss by Mortgage Electronic Registration Systems (MERS).
- When a foreclosure is completed, MERS never actually retains or enjoys the use of any of the proceeds from a sale of the foreclosed property, but rather would remit such proceeds to the true party at interest.
- Mortgage Electronic Registration Systems (MERS) is not actually at risk as to the payment or nonpayment of the mortgages or deeds of trust for which it serves as “nominee”.
- Mortgage Electronic Registration Systems (MERS) has no pecuniary interest in the promissory notes or the mortgage indebtedness for which it serves as “nominee”.
- Mortgage Electronic Registration Systems (MERS) is not personally aggrieved by any alleged default of a promissory note for which it serves as “nominee”.
- There exists no real controversy between MERS and any mortgagor alleged to be in default.
- Mortgage Electronic Registration Systems (MERS) has never suffered any injury by arising out of any alleged default of a promissory note for which it serves as “nominee”.
- Mortgage Electronic Registration Systems (MERS) holds the mortgage lien as nominee for the owner of the promissory note.
- Mortgage Electronic Registration Systems (MERS), in a nominee capacity for lenders, merely acquires legal title to the security instrument (i.e., the deed of trust or mortgage that secures the loan).
- Mortgage Electronic Registration Systems (MERS) simply holds legal title to mortgages and deeds of trust as a nominee for the owner of the promissory note.
- Mortgage Electronic Registration Systems (MERS) immobilizes the mortgage lien while transfers of the promissory notes and servicing rights continue to occur.
- The investor continues to own and hold the promissory note, but under the MERS® System, the servicing entity only holds contractual servicing rights and MERS holds legal title to the mortgage as nominee for the benefit of the investor (or owner and holder of the note) and not for itself.
- In effect, the mortgage lien becomes immobilized by Mortgage Electronic Registration Systems (MERS) continuing to hold the mortgage lien when the note is sold from one investor to another via an endorsement and delivery of the note or the transfer of servicing rights from one Mortgage Electronic Registration Systems (MERS) member to another Mortgage Electronic Registration Systems (MERS) member via a purchase and sale agreement which is a non-recordable contract right.
- Legal title to the mortgage or deed of trust remains in MERS after such transfers and is tracked by Mortgage Electronic Registration Systems (MERS) in its electronic registry.
- Mortgage Electronic Registration Systems (MERS) holds legal title to the mortgage for the benefit of the owner of the note.
- The beneficial interest in the mortgage (or person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note and/or servicing rights thereunder.
- Mortgage Electronic Registration Systems (MERS) has no interest at all in the promissory note evidencing the mortgage loan.
- Mortgage Electronic Registration Systems (MERS) does not acquire an interest in promissory notes or debt instruments of any nature.
- The beneficial interest in the mortgage (or the person or entity whose interest is secured by the mortgage) runs to the owner and holder of the promissory note (NOT MERS).
MERS as Holder
- Mortgage Electronic Registration Systems (MERS) is never the holder of a promissory note in the ordinary course of business.
- Mortgage Electronic Registration Systems (MERS) is not a custodian of promissory notes underlying the security instrument for which it serves as “nominee”.
- Mortgage Electronic Registration Systems (MERS) does not even maintain copies of promissory notes underlying the security instrument for which it serves as “nominee”.
- Sometimes when an investor or servicer desires to foreclose, the servicer obtains the promissory note from the custodian holding the note on behalf of the mortgage investor and places that note in the hands of a servicer employee who has been appointed as an officer (vice president and assistant secretary) of MERS by corporate resolution.
- When a promissory note is placed in the hands of a servicer employee who is also an Mortgage Electronic Registration Systems (MERS) officer, Mortgage Electronic Registration Systems (MERS) asserts that this transfer of custody into the hands of this nominal officer (without any transfer of ownership or beneficial interest) renders Mortgage Electronic Registration Systems (MERS) the holder.
- No consideration or compensation is exchanged between the owner of the promissory note and Mortgage Electronic Registration Systems (MERS) in consideration of this transfer in custody.
- Even when the promissory note is physically placed in the hands of the servicer’s employee who is a nominal Mortgage Electronic Registration Systems (MERS) officer, Mortgage Electronic Registration Systems (MERS) has no actual authority to control the foreclosure or the legal actions undertaken in its name.
- Mortgage Electronic Registration Systems (MERS) will never willingly reveal the identity of the owner of the promissory note unless ordered to do so by the court.
- Mortgage Electronic Registration Systems (MERS) will never willingly reveal the identity of the prior holders of the promissory note unless ordered to do so by the court.
- Since the transfer in custody of the promissory note is not for consideration, this transfer of custody is not reflected in any contemporaneous accounting records.
- Mortgage Electronic Registration Systems (MERS)is never a holder in due course when the transfer of custody occurs after default.
- Mortgage Electronic Registration Systems (MERS) is never the holder when the promissory note is shown to be lost or stolen.
MERS’ Role in Mortgage Servicing
- Mortgage Electronic Registration Systems (MERS) does not service mortgage loans.
- Mortgage Electronic Registration Systems (MERS) is not the owner of the servicing rights relating to the mortgage loan and Mortgage Electronic Registration Systems (MERS) does not service loans.
- Mortgage Electronic Registration Systems (MERS) does not collect mortgage payments.
- Mortgage Electronic Registration Systems (MERS) does not hold escrows for taxes and insurance.
- Mortgage Electronic Registration Systems (MERS) does not provide any servicing functions on mortgage loans, whatsoever.
- Those rights are typically held by the servicer of the loan, who may or may not also be the holder of the note.
MERS’ Rights To Control the Foreclosure
- Mortgage Electronic Registration Systems (MERS) must all times comply with the instructions of the holder of the mortgage loan promissory notes.
- Mortgage Electronic Registration Systems (MERS) only acts when directed to by its members and for the sole benefit of the owners and holders of the promissory notes secured by the mortgage instruments naming Mortgage Electronic Registration Systems (MERS) as nominee owner.
- MERS’ members employ and pay the attorneys bringing foreclosure actions in MERS’ name.
MERS’ Access To or Control over Records or Documents
- Mortgage Electronic Registration Systems (MERS) has never maintained archival copies of any mortgage application for which it serves as “nominee”.
- In its regular course of business, Mortgage Electronic Registration Systems (MERS) as a corporation does not maintain physical possession or custody of promissory notes, deeds of trust or other mortgage security instruments on behalf of its principals.
- MERS as a corporation has no archive or repository of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
- Mortgage Electronic Registration Systems (MERS) as a corporation is not a custodian of the promissory notes secured by deeds of trust or other mortgage security instruments for which it serves as nominee.
- Mortgage Electronic Registration Systems (MERS) as a corporation has no archive or repository of the deeds of trust or other mortgage security instruments for which it serves as nominee.
- In its regular course of business, Mortgage Electronic Registration Systems (MERS) as a corporation does not routinely receive or archive copies of the promissory notes secured by the mortgage security instruments for which it serves as nominee.
- In its regular course of business, Mortgage Electronic Registration Systems (MERS) as a corporation does not routinely receive or archive copies of the mortgage security instruments for which it serves as nominee.
- Copies of the instruments attached to MERS’ petitions or complaints so not come from MERS’ corporate files or archives.
- In its regular course of business, Mortgage Electronic Registration Systems (MERS) as a corporation does not input the promissory note or mortgage security instrument ownership registration data for new mortgages for which it serves as nominee, but rather the registration information for such mortgages are entered by the “member” mortgage lenders, investors and/or servicers originating, purchasing, and/or selling such mortgages or mortgage servicing rights.
- Mortgage Electronic Registration Systems (MERS) does not maintain a central corporate archive of demands, notices, claims, appointments, releases, assignments, or other files, documents and/or communications relating to collections efforts undertaken by Mortgage Electronic Registration Systems (MERS) officers appointed by corporate resolution and acting under its authority.
Management and Supervision
- In preparing affidavits and certifications, officers of Mortgage Electronic Registration Systems (MERS), including Vice Presidents and Assistant Secretaries, making representations under MERS’ authority and on MERS’ behalf, are not primarily relying upon books of account, documents, records or files within MERS’ corporate supervision, custody or control.
- Officers of Mortgage Electronic Registration Systems (MERS) preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS’ authority and on MERS’ behalf, do not routinely furnish copies of these affidavits or certifications to MERS for corporate retention or archival.
- Officers of Mortgage Electronic Registration Systems (MERS) preparing affidavits and certifications, including Vice Presidents and Assistant Secretaries, and otherwise making representations under MERS’ authority and on MERS’ behalf are not working under the supervision or direction of senior Mortgage Electronic Registration Systems (MERS) officers or employees, but rather are supervised by personnel employed by mortgage investors or mortgage servicers.
This should be a pretty good start for those of you faced with a foreclosure in which Mortgage Electronic Registration Systems (MERS) is falsely asserting that it is the owner of the promissory note. Whether Mortgage Electronic Registration Systems (MERS) is or was ever the holder is a FACT QUESTION which can be determined only by ascertaining the chain of custody of the promissory note. When the promissory note is lost, missing or stolen, Mortgage Electronic Registration Systems (MERS) is NOT the holder.
By William A. Roper, Jr. Excerpted from the MSFraud Forum thread “Facts about MERS / MERS Unmasked”
Is Your MERS Mortgage Status Designated Inactive?
Many homeowners find out their existing mortgage is listed as “inactive.” An inactive status can refer to the transfer of their mortgage to another loan servicer, or to a few other factors as noted below.
The difference between having an inactive or an active MERS (Mortgage Electronic Registration System) loan may determine if the property owner has any improved or worsened home equity, or a truly saleable asset.
What is MERS?
MERS functions as a centralized electronic registry of mortgages, and it was supposed to track the ownership of these mortgages, which are typically sold multiple times during the loan’s life. MERS potentially affects upwards of 70 million residential mortgage loans nationwide, and almost completely crashed the U.S. housing market by itself because of so many problems with the packages.
MERS was created by lenders and title insurance companies, so it would be easier to transfer the beneficial interests to other secondary market lenders. Yet, some mortgages ended up significantly discounted due to packaging problems, which made them inactive.
Where’s the “IOU” for the mortgage debt?
The MERS Scandal
Missing documents, notary fraud, and “robo-signing” led the way.
There was a lot of chaos involved with MERS mortgage packets, which contained no original promissory notes (the “IOU” for the mortgage debt) in these same MERS files.
Knowledgeable homeowners were able to completely stop their home foreclosures by pointing out that the foreclosing entity, such as the mortgage servicing company, didn’t have a legal right to foreclose on their homes, since they didn’t have all of their valid mortgage paperwork in their files.
These questionable ownership interests in the mortgages led to foreclosure moratoriums, court settlements, and inactive statuses.
There were a large number of allegations of notary fraud in which real or fake notaries such as “Linda Green” were allegedly part of the massive “Robo-Signing Scandal” nationwide.
It has been suggested that promissory notes, deeds of trust or mortgages, and other loan or title documents were forged, left blank, or illegally assigned to numerous mortgage investors. Since MERS was set up to become as paperless, speedy, and efficient as possible, there was not enough third party oversight to check whether these documents were valid.
Questionable Beneficial Interests
“No Note = No Debt” became the mantra for homeowners who were in the midst of their own foreclosures due to the weaker U.S. economy. Some savvy property owners were able to legally void their existing mortgage debt altogether by proving that the foreclosing mortgage company had no valid beneficial interests in the existing mortgage, and thus had to legal right to collect any payments.
Other homeowners were able to show that their MERS files had fraudulent notary signatures signed on behalf of both owners and lenders, which moved their file designations over to “inactive” as well.
Mortgage lenders that have collapsed or imploded since the official start of the Credit Crisis back in 2007, such as Countrywide, Indy Mac, Lehman Brothers, World Savings, Downey Savings, and Washington Mutual still figuratively exist by way of their asset or beneficial interest transfers to the “strawman” named MERS.
MERS may pay no taxes or employ anyone. Without the proper assignment of these MERS mortgages, these same imploded mortgage companies’ loans could have ceased to exist.
The Shadow Inventory & MERS
Instead of upwards of 60 million residential MERS mortgages becoming inactive or possibly even completely voided and worthless, many of the largest banks and mortgage service companies worked closely with the U.S. government to create the National Mortgage Settlement in early 2012. This insanely small $25 billion settlement is but a mere fraction of the potentially trillions of dollars of MERS mortgages nationwide.
The National Mortgage Settlement of 2012 and MERS Scandal were two of the primary reasons why home listings nationally dropped dramatically.
There were potentially millions of Shadow Inventory homes (mortgage payments are more than 90 days late), which may not have valid promissory notes, or other mortgage or title instruments or documents, in the files. The lack of listed home inventory led to a rapid increase of home prices between 2011 and 2013 (also partly due to the record low mortgage rates).
The “Inactive” MERS Designation
An inactive MERS designation may relate to the loan having been refinanced or paid off, discounted, or completely voided due to the invalid mortgage documents in the file. Or, the mortgage loan was assigned out of the MERS system to a completely new mortgage servicing company.
A property owner with a MERS mortgage can find the status of their loan by searching for their 18-digit Mortgage Identification Number (MERS MIN). Then, the same person may search online for the MERS Servicer ID system in order to check the status of their mortgage.
Before attempting to pay off a MERS loan, it’s very important to find out if all of the mortgage payments have been properly applied to the account. The vast majority of MERS mortgages have been assigned to multiple mortgage investors over the years, so it is very important to check your own payment history over the years in order to determine if all of your payments have been credited to every mortgage servicing lender’s accounts.
It’s imperative that the owner pays off the correct amounts, which may mean more money back to the owner and much less money for the current mortgage loan servicer. As such, a little research and loan analysis by a property owner on their personal payment histories can save them a lot of money and headaches.
Here is some additional information on MERS:
- MERS Is Dead
- MERS Admits NO Interest in Mortgage and No Loss on Default
- Consent Order for MERSCORP and Mortgage Electronic Registration Systems, Inc. (MERS)
Take action right now and get the FACTS and HELP that you need to gain the legal remedy that the law entitles you to, and that you deserve!
MERS and the problem of false agency
Posted on April 19, 2022 by Neil Garfield
Since the beginning of this century, The initial transaction with homeowners was the product of multiple layers of paperwork, most of which were neither identified nor accessed by consumers or their professional advisers.
Here is the deal:
As was typical during the “securitization” era, the application for a loan is received as the commencement of the transaction. It is not the “closing.”
From your perspective, you asked for a loan, and you were given false paperwork for you to read and sign. From the perspective of the disclosed counterparty to your transaction, the originator was merely paid a fee for the service of selling the transaction to you as a “loan.”
The funding for your transaction is an elaborate scheme unto itself. Once the paperwork is completed by the investment bank, the investment bank borrows the amount of money needed to pay homeowners at or near the time of closing. There is frequently a waiting period after what the homeowners perceive as a loan closing. This is the final check to make sure that there are not multiple entities named as Plaintiffs or beneficiaries on mortgages and deeds of trust respectively.
The loan from, for example, Credit Suisse, is collateralized by the impending sale of certificates to investors. The certificates do NOT represent any status as beneficiaries of a trust nor any status as a creditor to whom the homeowners ‘payments set forth on the homeowners’ note are payable.
Payments of money to the investors are discretionary but they usually are made by the investment bank regardless of whether or not any homeowner makes a scheduled payment on the schedule described in the promissory note issued by the homeowner. Investors were sold and contractually accepted the idea that they and no right, title or interest to any homeowner payment, legal debt, underlying obligation, note, or mortgage (or deed of trust).
So investors are paid not by homeowners but by various undisclosed intermediaries who have access to the funds paid by homeowners and access the funds generated by sales of certificates that are frequently mislabeled as Mortgage-Backed Securities. The fact the payments are frequently made as “Servicer advances” (as though the money came from companies who were named as “servicers” is the foundation for framing this deal — taken as a whole — as at least part of the PONZI scheme.
The sale of the certificates pays back the loan to Credit Suisse, plus a fairly large (e.g. 30%) profit partly directly arising from a yield spread premium (the difference between the amount of money paid by investors for unsecured IOUs from the investment bank and the amount paid to homeowners. Additional money is generated as the proceeds or revenue of either sale of the additional derivatives securities created and issued by the investment bank.
The problem for laypeople or even lawyers is that there is a choice between whether to analyze your transaction from the perspective of what you were seeking or whether to analyze the group of transactions from the perspective of the securitization scheme, without which there would have been no homeowner transaction. The consensus in the media and courtrooms is to simply analyze the transaction from the perspective of what the consumer wanted when he or she applied for a loan, regardless of where that is an accurate description of the transaction.
Contemporaneously with the origination of the transaction, several things are happening. In broad strokes, they are divided into the money trail and the paper trail. In the paper trail, none of the documents correctly identify or describe a transaction much less “memorialize” any transaction. Because everyone has received all the money they intended from participation in the “securitization” scheme the essential ingredient of a loan account receivable is eliminated thereby making nobody the “lender.”
Simply stated, since there isn’t anyone who maintains any record on the accounting ledger of an account receivable owed by you, there is no creditor. Nonetheless, in order for the securitization scheme to work (justifying more sales of certificates and other derivatives to investors), it must appear as though (a) an underlying obligation is created, owed to a specifically named lender and (b) that it has been transferred to a named business entity with caveats on the sale — namely that there is no warranty of title to the claims against homeowners.
When the origination cycle is complete, the status of the transaction is that there is no counterparty who has a stake in the viability or success of that transaction because nobody loses money if the homeowner does not make a scheduled payment — one that I maintain is simply not due to anyone. The absence of a lender — and all that entails under law — means there is no loan. The finance side of the transaction knows this but sets out to create a false paper trail to make it seem like “this is a standard mortgage loan” or ” this is standard foreclosure action.”
The financial community in coordination with lawyers willing to play the “game” used strategies and tactics to not only make it appear that the transaction was a loan but to actually have the court presume that the transaction was a loan and that the complaining party has hired counsel to seek a remedy. The status of such claims is always this: there is no obligation, loan account, or other claims for money allegedly due from the homeowner.
The primary tactic utilized by the financial community is the volume of paperwork. the thicker the pile of paperwork the more likely it is that a layperson sitting on the bench, will conclude that the transaction was real as a “loan.” And that is why we witnessed the birth of a major industry — creating false, fabricated, backdated documentation making it appear that several brand name institutions were trading, purchasing, and selling the “loans”. In reality, no such transactions existed, but the paperwork said the t transactions had occurred.
Considerable effort and coordination were devised by the financial sector to mislead the court system and they did so successfully in most cases. But even a casual look at your chain of title for the mortgage or deed of trust reveals inconsistencies in the paperwork especially when one realizes that the signature block one each document is on behalf of entities that (a) don’t exist at all, (b) exist but are irrelevant to the transaction and (c) are unclear from the face of the document.
Your case is almost certainly closely aligned with the typical playbook of strategies and tactics. Examining the document assignment of mortgage you find what is typical:
No consideration. the law requires that value be paid by the claimant before it can file suit to enforce the claim. But that law does not impact the ability of the foreclosure players to make false claims of authority to administer, collect or enforce in correspondence, notices, and statements.
“Corrective instruments” that correct nothing in order to establish more paper volume.
Execution of assignment by a business entity that has no right, title or interest in the alleged obligation. For example, MERS is used to launder titles.
People from FINTECH companies regularly access the main servers that are maintained by MERS for the sole purpose of getting themselves automatically appointed, without board resolution, as an officer of MERS.
MERS always is described as the nominee for the specifically named “lender” who is just an originator selling a financial product as described above. MERS is used as a cover-up. It effectively hides the title gap in plain sight.
The execution of an assignment or corrective assignment presumes that it is acting as an agent for whoever is currently named as the current claimant, beneficiary, or Plaintiff. But no such agency exists in fact or at law.
The execution of a security instrument (mortgage or loan) by a self-proclaimed “servicer” (which performs no servicing duties with respect to receipts data processing and disbursement of money from homeowners) on behalf of a new entity appointed to be the claimant, beneficiary or Plaintiff. But the execution of the assignment by MERS on behalf of Countrywide after the collapse of countrywide. it does not exist.
And Bank of America did not acquire any ownership interest in any homeowner transactions because countrywide didn’t own any such interest.
So while Bank of America was a successor to Countrywide, the foreclosure team is relying on appearances — in order to get the court to presume that the merger created a transfer of the ownership of the unpaid nonexistent loan account receivable of the mortgage rights from Countrywide as originator to Bank of America.
In such mergers, there is no Mortgage Loan Schedule, nor any written assignment of mortgage. Since the law requires the assignment, the presumption that the transfer could occur without an assignment of mortgage is erroneous. But that fact will not stop foreclosure unless it is aggressively contested.
The document is supposedly executed by someone calling themselves an “assistant secretary.” But note that it does not say that the signor was the assistant sectary of MERS.
Every time there is mention of MERS it includes the phrase “its successors and assigns” such that it is unclear from the grammar utilized whether there is a successor to MERS or a successor for the principal in the agency agreement between MERS and the originator (Countrywide in this scenario).
But there is no succession to either one unless (a) someone bought or merged with MERS or (b) someone bought loan accounts receivable from Countrywide. Such a sale would’ve been impossible because, by the time of the merger, Countrywide had only reserved “servicing rights” which really only meant the claim to receive “servicer advances” upon liquidation of a foreclosed property. So there is no MERS successor and there is no Countrywide successor as it relates to either the actual pr presumed transfer of the alleged underlying obligation.
Any endorsements are undated. Under current law, this means that parole evidence must be offered to prove that the promissory note was transferred and delivered to the party named as claimant, beneficiary, or Plaintiff.
Documents requiring the signature of the homeowner are in most cases completely fabricated even if the homeowner did sign similar documents. This has been sued to change the fact relevant to execution and delivery of the promissory note that in approximately 95% of all cases is destroyed within days of the time of closing that transaction with the homeowner.
This becomes clearer when the homeowner is able to lay hands on the original note at least as an original, and when the original note contains coloration of signature or other marks that do not appear on the refabricated note made by electronic manipulation of images.
The foreclosure mill will often utilize such fabricated documents even when they contain glaring facially invalid errors. For example, where a parent was the owner of the property and signed the “mortgage” paperwork, the instructions received by the law firm are turned into correspondence, notes, statements, and pleadings that reflect the grantors under a deed of trust or the mortgagors under a mortgage instrument become the heirs or successors to liability under the note.
MERS Is Dead
MERS Is Dead: Can Be Sued For Fraud: WA Supreme Court
Countdown to banks forcing Congress to protect MERS in 3,2,1...
State Court Ruling Deals Body Blow to MERS
(Reuters) - The highest court in the state of Washington recently ruled that a company that has foreclosed on millions of mortgages nationwide can be sued for fraud, a decision that could cause a new round of trouble for the nation's banks.
The ruling is one of the first to allow consumers to seek damages from Mortgage Electronic Registration Systems, a company set up by the nation's major banks, if they can prove they were harmed.
Legal experts said last month's decision from the Washington Supreme Court could become a precedent for courts in other states. The case also endorsed the view of other state courts that MERS does not have the legal authority to foreclose on a home.
"This is a body blow," said consumer law attorney Ira Rheingold. "Ultimately the MERS business model cannot work and should not work and needs to be changed."
Banks set up MERS in the 1990s to help speed the process of packaging loans into mortgage-backed bonds by easing the process of transferring mortgages from one party to another. But ever since the housing crash, MERS has been besieged by litigation from state attorneys general, local government officials and homeowners who have challenged the company's authority to pursue foreclosure actions.
A spokeswoman for MERS said the company is confident its role in the financial system will withstand legal challenges.
The Washington Supreme Court held that MERS' business practices had the "capacity to deceive" a substantial portion of the public because MERS claimed it was the beneficiary of the mortgage when it was not.
This finding means that in actions where a bank used MERS to foreclose, the consumer can sue it for fraud. If the foreclosure can be challenged, MERS' involvement would make repossession more complicated.
On top of that, virtually any foreclosed homeowner in the state in the past 15 years who feels they have been harmed in some way could file a consumer fraud suit.
"This may be the beginning of a trend," says Elizabeth Renuart, a professor at Albany Law School focusing on consumer credit law.
The company's history dates back to the 1990s, when banks began aggressively bundling home loans into mortgage-backed securities. The banks formed MERS to speed up the handling of all the paperwork associated with recording the filing of a deed and the subsequent inclusion of a mortgage in an entity that issues a mortgage-backed security.
MERS allowed the banks to save time and money because it permitted lenders to bypass the process of filing paperwork with the local recorder of deeds every time a mortgage was sold.
Instead, banks put MERS' name on the deed. And when they bought and sold mortgages, they just recorded the transfer of ownership of the note in the MERS system.
The MERS' database was supposed to keep track of where those loans went. The company's motto: "Process loans, not paperwork."
But the foreclosure crisis revealed major flaws with the MERS database.
The plaintiffs in the Washington case, homeowners Kristin Bain and Kevin Selkowitz, argued that the problems with the MERS database made it difficult, if not impossible; to determine who really owned their loan. It's an argument that has been raised in numerous other lawsuits challenging the ability of MERS to foreclose on a home.
"It's going to be very easy for consumers to say they were harmed because it's inherently misleading," says Geoff Walsh, an attorney with the National Consumer Law Center. If consumers can't identify who owns their loan, then they don't know whom to negotiate with, and can't even be certain of the legitimacy of the foreclosure.
In a statement, MERS spokeswoman Janis Smith noted that banks stopped using MERS' name to foreclose last year. She added that the opinion will "create confusion" for homeowners in the state of Washington while the trial courts consider its effect on pending cases.
Meanwhile, MERS is attempting to remake itself. The company has a new chief executive and a new branding campaign. In Washington D.C. federal lawmakers have recognized the need to create a national mortgage-recording database that would track all U.S. mortgages. MERS is lobbying to build it.
The case is Bain (Kristin), et al. v. Mortg. Elec. Registration Sys., et al., Washington Supreme Court, No. 86206-1.
Stop Foreclosure, Sue for Breach of Contract
Now is the perfect time to stand up for your legal rights and sue for beach of contract, mortgage fraud, and foreclosure fraud because the legal tide is beginning to turn, and homeowners are starting to win! In 2016 the California Supreme Court ruled in Yvanova v. New Century Mortgage Corporation (Case No. S218973, Cal. Sup. Ct. February 18, 2016) that homeowners have legal standing to challenge an assignment of the mortgage loan contract in an action for wrongful foreclosure on the grounds that the assignment(s) is/are void. Obviously if the court had ruled differently, the banks would have had carte blanche to forge mortgage assignments with wild abandon. In fact, without a system of endorsements and assignments it would be impossible to determine who has a legitimate interest in the property!
In THE PAPER CHASE: SECURITIZATION, FORECLOSURE, AND THE UNCERTAINTY OF MORTGAGE TITLE ADAM J. LEVITIN writes "the mortgage foreclosure crisis raises legal questions as important as its economic impact. Questions that were straightforward and uncontroversial a generation ago today threaten the stability of a $13 trillion mortgage market: Who has standing to foreclose? If a foreclosure was done improperly, what is the effect? And what is the proper legal method for transferring mortgages? These questions implicate the clarity of title for property nationwide and pose a too- big-to-fail problem for the courts.
The legal confusion stems from the existence of competing systems for establishing title to mortgages and transferring those rights. Historically, mortgage title was established and transferred through the “public demonstration” regimes of UCC Article 3 and land recordation systems. This arrangement worked satisfactorily when mortgages were rarely transferred. Mortgage finance, however, shifted to securitization, which involves repeated bulk transfers of mortgages.
Like many other cases, current trial court decisions are getting reversed because the courts are waking up to the reality of the rule of law. What they have been following is an off the books rule of “anything but a free house.” However a recent Yale Law Review Article eviscerates the assumptions of a free house for the homeowners and destroys the myth that somehow that policy has saved the nation. You can read the Yale Law Review article “In Defense of “Free Houses” for more information on this tide change.
To facilitate securitization, deal architects developed alternative “contracting” regimes for mortgage title: UCC Article 9 and MERS, a private mortgage registry. These new regimes reduced the cost of securitization by dispensing with demonstrative formalities, but at the expense of reduced clarity of title, which raised the costs of mortgage enforcement. This trade-off benefited the securitization industry at the expense of securitization investors because it became apparent only subsequently with the rise in mortgage foreclosures. The harm, however, has not been limited to securitization investors. Clouded mortgage title has significant negative externalities on the economy as a whole.
If your loan contains fraud or it was securitized then your lender may have breached your mortgage loan contract, and therefore your mortgage loan contract could be legally challenged in a court of law. If your mortgage loan contract is declared legally void, then any assignments of the mortgage loan contract, or subsequent assignments, could also be declared legally void.
Securitization is the process of taking an asset and transforming them into a security. A typical example of securitization is a mortgage-backed security (MBS), which is a type of asset-backed security that is secured by a collection of mortgages. Keep in mind that it is perfectly legal for banks to create mortgage-backed securities (MBS's); however there are significant legal ramifications that will either harm you, or benefit you, depending on what actions you take in response to the fact that your mortgage or deed of trust is legally void resulting in your property, in reality, being unsecured, just like a unsecured credit card debt. What's in your wallet?
This is why we recommend that you take immediate action and sue for the remedy the law entitles you to, and that you deserve. Treble damages and clear and free title to your home. Not sure if your loan contains mortgage fraud or if it was securitized, no problem, we will do a free mortgage fraud analysis and free Bloomberg securitization search for you.
Many of the programs that had modest success in the early days have fallen into disfavor as banks have enacted strategies to counter their progress. The banks are not going to go down without a serious fight. They have a large arsenal of tools to use, and the legal muscle to keep the industry off balance. This is not a static game. The reason that banks have been successful, for the most part, in protecting the large number of mortgages that were securitized is that there is an intricate web of legal theories that they hide behind to justify what they have done. In effect, they have created a shell game where the ball seems to move around in defiance of the laws of physics.
The banks are relying on a complex interaction between UCC 3 commercial paper law, UCC 9 securitization law, bailment law, agency law and local laws of the jurisdiction where the property is located. They would have us believe that what they have been doing since the 1970’s is perfectly legitimate. Many lawyers who have challenged the banks have gotten close to exposing the scheme only to find that judges retreat away from the complexity of the legal theories involved and fall back on procedural barriers under the auspices of protecting the equitable interests of the banks and their agents.
FRAUD STOPPERS Foreclosure Defense Program has moved the bar forward in many substantial ways:
- Our Private Administrative process is a targeted approach to Informal Discovery:
- 3-501. PRESENTMENT or States equivalent
- Mortgage Error Resolution/Request for Information: If you believe there is an error on your mortgage loan statement or you’d like to request information related to your mortgage loan servicing, you must exercise certain rights under Federal law related to resolving errors and requesting information about your mortgage loan. If you think your credit report, bill or your mortgage loan account contains an error, or if you need more information about your mortgage loan, you send a written letter concerning your error and/or request.
- Cutting edge mortgage fraud examination and court ready lawsuits and trial ready evidence to win your case
- Nationwide foreclosure defense attorneys and Pro Se litigation education and support products and services
Subsection of Presentment (example Covenant 8 of UCC3 Note) shows NOTE and under paragraph 1 states: “BORROWER’S PROMISE TO PAY: In return for a loan that I have received, I promise to pay….
MULTI STATE FIXED RATE NOTE--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3200 1/01 (page 1 of 3 pages) Covenant:
I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. “Presentment” means the right to require the Note Holder to demand payment of amounts due. “Notice of Dishonor” means the right to require the Note Holder to give notice to other persons that amounts due have not been paid.
- 15 U.S. Code § 1692g - Validation of debts
Often a debt collector cannot validate a debt and therefore cannot legally enforce collections.
- Truth In Lending Act (TILA RESCISSION) codified in 12 CFR Part 226 (Regulation Z); particularly§ 226.34 Prohibited acts and §226.32 sub-paragraph (ii) et seq. predatory lending practices
A mortgage loan covered by the Truth in Lending Act may be rescinded by mailing a Rescission Letter to the purported lender, forcing the purported lender/creditor to oppose that rescission with a lawsuit within 20 days or lose all opposition rights.
- The primary focus of the legal aspect of our program revolves around taking the theories and best practices that have been most successful around the country and make refinements.
“Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.
- Our program seeks to avoid getting mired in the complexity of the various areas of law involved, instead focusing on a simple, focused approach that makes it harder for judges to avoid the strength of our core arguments.
- The PMA trustees and executive team have a diverse set of skills and significant experience in the core areas that will improve the success factors for our operations.
We have spent an exhaustive amount of time analyzing all of the cases that have been successful in resolving mortgage securitization problems. We have designed our legal information litigation strategy to hit the banks hard and fast where they are most vulnerable.
Our primary focus is on getting clear and marketable title to the property by arguing that the actions of the banks have made the security provisions of the mortgage/deed of trust unenforceable.
Instead of fighting the foreclosure itself head-on, we argue that none of the banks or their agents has the right to enforce the foreclosure provisions of the Mortgage/Deed of Trust. In effect, if none of the banks have standing to enforce the foreclosure provision, we are entitled AS A MATTER OF LAW to a declaratory judgment of Breach of Contract (Security Agreement) that is res judicata, i.e., a permanent ban on foreclosure.
The Stand & Fight Program is a complete program that provides you with everything you need:
- Administrated Process
- Court Ready Chain of Title Investigation and Signed Affidavit
- Complaint along with all exhibits
- Legal Research
- Legal Briefs
- Case Management for Local Civil Rules of Procedures
- Training and Support
COMMON CAUSES OF ACTION
AMICUS CURRIE BRIEFS
ASSIGNEE NOT REGISTERED WITH SECRETARY OF STATE
BREACH OF CONTRACT
BREACH OF DUTY TO ACT IN GOOD FAITH AND FAIR DEALING
BREACH OF FIDUCIARY DUTY
DECEPTIVE TRADE PRACTICES
DEFECTIVE DEED CONVEYED TO NON-INCORPORATED ENTITY
DEFECTIVE MORTGAGE OR NOTE
FAILURE TO COMPLY WITH FHA PRE-FORECLOSURE REGS
FAILURE TO ESTABLISH CONDITIONS PRESCEDENT
FAILURE TO RESPOND TO QWR
FAILURE TO STATE A CLAIM
FAILURE TO VERIFY INCOME OR ASSETS
FEDERAL FALSE CLAIMS ACT
FRAUD IN THE CONCEALMENT
FRAUD IN THE FACTUM
FRAUD IN THE INDUCEMENT
FRAUD UPON THE COURT
FRUITS OF THE FRAUD
GRAMM, LEACH, BLILEY ACT
HOME EQUITY LOAN CONSUMER PROTECTION ACT
INCORRECT ARM ADJUSTMENTS
Infliction of Emotional Distress
INSUFFICIENCY OF PROCESS
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
LACK OF NOTICE OF RIGHT TO RESCIND
LACK OF STANDING/INTEREST
NEGATIVE INFLICTION OF EMOTIONAL DISTRESS
NON BENEFICIAL RELIEF
Reg X (defective or unreceived notice)
SLANDER OF TITLE
Learn how Cancel Secured and Unsecured Debt Obligations through Strategic Litigation
Scope of the FRAUD STOPPERS Bloomberg Securitization Audit
FRAUD STOPPERS Evaluation for Violations of “RESPA” The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. It requires lenders to give a good faith estimate (GFE) of all closing costs that borrowers must pay. It was designed to help borrowers from being forced to pay “hidden fees” at closing. Typical violations of RESPA include (1) Statutory Damages, (2) Attorney’s fees, and in many cases (3) Treble Damages [i.e., 3 times the amount.]
FRAUD STOPPERS Evaluation for Violations of “TILA” The Truth in Lending Act (TILA) requires lenders to disclose the terms of a loan, including the total amount of the loan, the annual interest rate, and the number, amount, and due dates of all payments necessary to repay the loan. The TILA also requires additional disclosures and places many restrictions on mortgages. The most often sought remedy under TILA is rescission of the loan.
FRAUD STOPPERS Evaluation for Violations of “FCRA” The Fair Credit Reporting Act (FCRA) was designed to prevent inaccurate or obsolete information from entering or remaining on a credit report. The law requires credit bureaus to adopt reasonable procedures for gathering, maintaining, and disseminating information. Commons remedies for violating FCRA are (1) statutory damages and (2) Attorney fees
FRAUD STOPPERS Evaluation for Violations of “ECOA” The Equal Credit Opportunity Act (ECOA) was designed to ensure that all qualified people have access to credit and prohibits discrimination based on sex, marital status, age, race, national origin, or public assistance benefits received.
FRAUD STOPPERS Evaluation for Violations of “HOEPA” Home Ownership Equity Protection Act state and local high costs. Federal (HOEPA), state and local high-cost thresholds.
FRAUD STOPPERS compares the loan data collected during a forensic loan audit to the calculated high-cost thresholds as defined by the Home Ownership and Equity Protection Act (HOEPA) and applicable state and local jurisdictions.
FRAUD STOPPERS Evaluation for Violations of “Underwriting Standards” The purpose of an underwriter is to determine whether the borrowers can qualify for a loan and if the borrowers can repay the loan. This determination of the ability to repay a loan is based upon employment and income in large measure, which is proved by getting pay stubs, 1040’s, W-2’s and a Verification of Employment and Income on the borrowers.
If an underwriter has evaluated the loan properly, then there should be no question of the ability of the borrower to repay the loan. Debt ratios will have been evaluated, credit reviewed, and a proper determination of risk made in relation to the loan amount. Approvals and denials would be made based upon a realistic likelihood of repayment.
The terms “abusive lending” or “predatory lending” are most frequently defined by reference to a variety of lending practices. Although it is generally necessary to consider the totality of the circumstances to assess whether a loan is predatory, a fundamental characteristic of predatory lending is the aggressive marketing of credit to prospective borrowers who simply cannot afford the credit on the terms being offered. While such disregard of basic principles of loan underwriting lies at the heart of predatory lending, a variety of other practices may also accompany the marketing of such credit.
Targeting inappropriate or excessively expensive credit products to older borrowers, or to persons who are not financially sophisticated or who may be otherwise vulnerable to abusive practices, and to persons who could qualify for mainstream credit products and terms
Loan Flipping & Equity Stripping
Repeated refinancing of borrowers into loans that have no tangible benefit to the borrower. Can be the same lender or different ones. Loans and refinances whereby equity is removed from the home through repeated refinances, consolidation of short-term debt into long term debt, negative amortization, or interest only loans whereby payments are not reducing principle, high fees and interest rates. Eventually, borrower cannot refinance due to lack of equity.
High Debt Ratios
This is the practice of approving loans with high debt ratios, usually50% or more, without determining the true ability of the borrower to repay the loan. Can often be seen with Prime borrowers approved through the Automated Underwriting Systems.
High Loan to Value loans
Loans offered to a borrower having little or no equity in the home. Usually, adjustable-rate mortgages that the borrower will not be able to refinance out of when the rate adjusts due to lack of equity.
Fraudulently Caused to Execute Loan Documents
Adjustable-rate mortgage loan was an inter-temporal transaction on which Plaintiffs had only qualified at the initial teaser fixed rate and could not qualify for the loan once the interest rate terms change.
Deception, Fraud, Unconscionable
Is marketed in a way that fails to fully disclose all material terms. Includes any terms or provisions which are unfair, fraudulent, or unconscionable. Is marketed in whole or in part based on fraud, exaggeration, misrepresentation, or the concealment of a material fact. Includes interest only loans, adjustable-rate loans, negative amortization and HOEPA loans.
Stated or No Income/No Assets
Is based on a loan application that is inappropriate for the borrower. For instance, the use of a stated-income loan application from an employed individual who has or can obtain pay stubs, W-2 forms and tax returns.
Lack of Due Diligence in Underwriting
Is underwritten without due diligence by the party originating the loan. No realistic means test for determining the ability to repay the loan. Lack of documentation of income or assets, job verification. Usually with Stated Income or No documentation loans but can apply to full documentation loans.
Inappropriate Loan Programs
Is materially more expensive in terms of fees, charges and/or interest rates than alternative financing for which the borrower qualifies. Can include prime borrowers who are placed into subprime loans, negative or interest only loans. Loan terms whereby the borrower can never realistically repay the loan.
All claims and defenses the borrower may have against the mortgage lender, mortgage broker, or other party involved in the loan transaction.
FRAUD STOPPERS Evaluates Each File for Violations of “Common Law Principles”
Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which a reasonable borrower would want to know before accepting the loan. Did the broker or loan officer or anyone working for the broker or loan officer fail to disclose any material facts to the borrower?
FRAUD AND NEGLIGENT MISREPRESENTATION
Were any representations, statements, or comments, written or made by the loan officer, broker, notary or anyone else who contradicted the terms of the documents?
When a mortgage professional makes errors which a reasonably diligent mortgage professional would not have made, he or she may have made a negligent misrepresentation.
BREACH OF CONTRACT
The note and its attachments are a contract. The broker must follow all the terms of the contract such as the way the interest is calculated, and the penalties it assesses. Were there any terms in the contract which the lender failed to follow?
BREACH OF FIDUCIARY DUTY
And many, many, more…….
This is a court ready trial evidence audit & expert witness affidavit that you and your attorney can use to win your case.
Breaking News - What the Bank Does Not Want You to Know:
CONFIDENTIAL SETTLEMENT AFTER ORDER ON JUDGMENT inFlorida - CFLA Client Gets Huge Damage Award against JPMCB and WellsFargo for multiple fraudulent misrepresentations in loan documents and bylender[s] to homeowner[s]. The following is an exert from the Court's Orderin Florida. This case has reached CONFIDENTIAL SETTLEMENT andtherefore some information is redacted:
"Defendants JPMCB and Wells Fargo were involved in fraudulent recordeddocuments in violation of 15 USC §1611, and is entitled to damages forclouding title and to cure/Quiet Title. Plaintiffs are entitled to the reliefrequested herein to quiet title and for award of costs under FS §57.041"
Homeowner Quiets Title to Real Property in Florida Court and Liable forDamages for Fraudulently Recording Documents, Fraud, Misrepresentation
What if you could wipe out your mortgage in a bankruptcy and still keep your home?
You may be able to use a little know bankruptcy technique to get clear and free title to your home, and become debt free at the same time!
Some savvy real estate investors got free properties by listing them as unsecured debt on schedule F in chapter 7 bankruptcy filings to eliminate the entire mortgage debt and walk away with clear and free title to the property.
Filing for bankruptcy can stop a foreclosure sale and or eviction, and if you do it right, could result in you getting 100% clear and free title to your home, and your mortgage totally wiped out too!
According to a University of Iowa Legal Research Study nearly 40% of the bankruptcy cases that involved foreclosures, creditors couldn’t produce the original loan documents when asked.
By the way, is how some savvy investors got properties for free, by listing them on Schedule F, as unsecured using bankruptcy rule 3001.
When "lenders" or mortgage companies would challenge this claim, the investors would simple say show me the note… and when the bank couldn’t, BINGO another free house.
Unfortunately for the average American homeowner the good old bankruptcy boys club has made it find a lawyer to help you use this technique to getting clear and free title to your home.
However now you can do it yourself Pro Se with FRAUD STOPPERS Bankruptcy and Audit Combo Package. Get your bankruptcy documents professionally prepared and get the evidence you need to get the legal remedy you deserve by clicking here.
"I cannot decide for you the moral obligations you should pursue; but if a wrong has been committed against you (such as a clouded title or a fraud resulting from a mortgage loan) you have the duty as an American property owner to correct it. Filing a lawsuit (in my book) reflects one’s personal responsibility.".
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