Tuesday, March 10, 2009

"Live Free or Die"

"If the American people ever allow private banks
to control the issue of their money,
first by inflation and then by deflation,
the banks and corporations that will
grow up around them (around the banks),
will deprive the people of their property
until their children will wake up homeless
on the continent their fathers conquered."

Thomas Jefferson  (1743-1826), US Founding Father, drafted the Declaration of Independence, 3rd US President
in 1802 in a letter to then Secretary of the Treasury, Albert Gallatin

"To Free From Oppression"

"Veritas Vos Liberabit - The truth shall set you free"


"Justitia nemini neganda est" - Justice is to be denied to no one
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  6067.  Oath.  Every person on his admission shall take an oath
  to support the Constitution of the United States and the
  Constitution of the State of California, and faithfully to
  discharge the duties of any attorney at law to the best of his
  knowledge and ability.  A certificate of the oath shall be
  indorsed upon his license.  (Added by Stats. 1939, c 34. p. 354, Sec. 1.)


BREAKING NEWS!!!!!!    February 18, 2010

Presently, “cramdown/lien stripping” has been limited to Chapter 13 cases; however the analysis of this recent NY bankruptcy opinion may, if accepted in our California and other Bankruptcy Districts, provide the legal basis  to “strip off” wholly unsecured junior liens, such as HELOCS in Chapter 7 and Chapter 11 cases.

This would have profound significance in the development of new and more powerful weapons in the War Against Foreclosures.

From Gretchen Mortensen of the NY Times - again !!

If Lenders Say ‘The Dog Ate Your Mortgage’

FOR decades, when troubled homeowners and banks battled over delinquent mortgages, it wasn’t a contest. Homes went into foreclosure, and lenders took control of the property.
On top of that, courts rubber-stamped the array of foreclosure charges that lenders heaped onto borrowers and took banks at their word when the lenders said they owned the mortgage notes underlying troubled properties. (Editor’s Note: INFORMATION VS. EVIDENCE: THE REPRESENTATION IS USUALLY A FINESSE ACCOMPLISHED BY A LAWYER REPRESENTING THE BANK MAKING THE REPRESENTATION OF OWNERSHIP. The representation is not only false, it isn’t evidence unless the lawyer is a competent witness — i.e., one who has personal knowledge through personal perception of the facts being asserted, and swears to it under oath, subjecting himself or herself to cross-examination)

In other words, with lenders in the driver’s seat, borrowers were run over, more often than not. Of course, errant borrowers hardly deserve sympathy from bankers or anyone else, and banks are well within their rights to try to protect their financial interests.
But if our current financial crisis has taught us anything, it is that many borrowers entered into mortgage agreements without a clear understanding of the debt they were incurring. And banks often lacked a clear understanding of whether all those borrowers could really repay their loans.

Even so, banks and borrowers still do battle over foreclosures on an unlevel playing field that exists in far too many courtrooms. But some judges are starting to scrutinize the rules-don’t-matter methods used by lenders and their lawyers in the recent foreclosure wave. On occasion, lenders are even getting slapped around a bit.
One surprising smackdown occurred on Oct. 9 in federal bankruptcy court in the Southern District of New York. Ruling that a lender, PHH Mortgage, hadn’t proved its claim to a delinquent borrower’s home in White Plains, Judge Robert D. Drain wiped out a $461,263 mortgage debt on the property. That’s right: the mortgage debt disappeared, via a court order.
So the ruling may put a new dynamic in play in the foreclosure mess: If the lender can’t come forward with proof of ownership, and judges don’t look kindly on that, then borrowers may have a stronger hand to play in court and, apparently, may even be able to stay in their homes mortgage-free.

The reason that notes have gone missing is the huge mass of mortgage securitizations that occurred during the housing boom. Securitizations allowed for large pools of bank loans to be bundled and sold to legions of investors, but some of the nuts and bolts of the mortgage game — notes, for example — were never adequately tracked or recorded during the boom. In some cases, that means nobody truly knows who owns what.
To be sure, many legal hurdles mean that the initial outcome of the White Plains case may not be repeated elsewhere. Nevertheless, the ruling — by a federal judge, no less — is bound to bring a smile to anyone who has been subjected to rough treatment by a lender. Methinks a few of those people still exist.

More important, the case is an alert to lenders that dubious proof-of-ownership tactics may no longer be accepted practice. They may even be viewed as a fraud on the court.
The United States Trustee, a division of the Justice Department charged with monitoring the nation’s bankruptcy courts, has also taken an interest in the White Plains case. Its representative has attended hearings in the matter, and it has registered with the court as an interested party.

THE case involves a borrower, who declined to be named, living in a home with her daughter and son-in-law. According to court documents, the borrower bought the house in 2001 with a mortgage from Wells Fargo; four and a half years later she refinanced with Mortgage World Bankers Inc.
She fell behind in her payments, and David B. Shaev, a consumer bankruptcy lawyer in Manhattan, filed a Chapter 13 bankruptcy plan on her behalf in late February in an effort to save her home from foreclosure.

A proof of claim to the debt was filed in March by PHH, a company based in Mount Laurel, N.J. The $461,263 that PHH said was owed included $33,545 in arrears.
Mr. Shaev said that when he filed the case, he had simply hoped to persuade PHH to modify his client’s loan. But after months of what he described as foot-dragging by PHH and its lawyers, he asked for proof of PHH’s standing in the case.

“If you want to take someone’s house away, you’d better make sure you have the right to do it,” Mr. Shaev said in an interview last week.
In answer, Mr. Shaev received a letter stating that PHH was the servicer of the loan but that the holder of the note was U.S. Bank, as trustee of a securitization pool. But U.S. Bank was not a party to the action.

Mr. Shaev then asked for proof that U.S. Bank was indeed the holder of the note. All that was provided, however, was an affidavit from Tracy Johnson, a vice president at PHH Mortgage, saying that PHH was the servicer and U.S. Bank the holder.
Among the filings supplied to support Ms. Johnson’s assertion was a copy of the assignment of the mortgage. But this, too, was signed by Ms. Johnson, only this time she was identified as an assistant vice president of MERS, the Mortgage Electronic Registration System. This bank-owned registry eliminates the need to record changes in property ownership in local land records. (Editor’s Note: Many foreclosure mill law firms are now establishing “one-stop shopping” where the assignments are fabricated, executed by their own employees, who then file affidavits in court. The defense lawyer or bankruptcy lawyer who takes this “information” at face value has forgotten basic rules of evidence. His client is prejudiced by his ignorance)
Another problem was that the document showed the note was assigned on March 26, 2009, well after the bankruptcy had been filed.
Mr. Shaev’s questions about ownership also led to an admission by PHH that, along the way, it had levied an improper $450 foreclosure fee on the borrower and had overcharged interest by an unstated amount.

John DiCaro, a lawyer representing PHH at the hearing, was in the uncomfortable position of having to explain why there was no documentation of an assignment to U.S. Bank. He did not return a phone call seeking comment last week. Ms. Johnson, who couldn’t be reached for comment, did not attend the hearing.
According to a transcript of the Sept. 29 hearing, Mr. DiCaro said: “In the secondary market, there are many cases where assignment of mortgages, assignment of notes, don’t happen at the time they should. It was standard operating procedure for many years.” (Editor’s Note: This is why a COMPLETE forensic review and analysis is required rather than just a TILA AUDIT).
Judge Drain rejected that argument, concluding that what had been presented to the court just did not add up. “I think that I have a more than 50 percent doubt that if the debtor paid this claim, it would be paying the wrong person,” he said. “That’s the problem. And that’s because the claimant has not shown an assignment of a mortgage.”

Mr. Shaev said he was shocked when the judge expunged the mortgage debt.
“We are in uncharted territory,” he said. “Right now I am in bankruptcy court with a house that has no discernible debt on it, yet I have a client with a signed mortgage. We cannot in theory just go out and sell this house because the title company won’t give a clear title on it.”
Among the next steps Mr. Shaev said he would take is to file an amended plan or sue to try to get clear title to the property.

Late last week, PHH appealed the judge’s ruling. But Mr. DiCaro and PHH are in something of a bind. Either they will return to court with a clear claim on the property — including all the transfers and sales that are necessary in the securitization process — or they won’t be able to produce that documentation. If they do produce it, they will then have to explain why they didn’t produce it before.

Oh, what a tangled web these mortgage lenders weave.

September 17, 2009

The Supreme Court of Kansas has issued a landmark decision which, although decided on a narrow legal issue involving a request by MERS and Sovereign Bank to set aside a default and intervene in a foreclosure action, essentially invalidates all MERS assignments based on the Court’s finding that MERS never had any legal interest to assign the note. The full text of the Court’s opinion and additional commentary may be found by contacting mortgagefrauds@aol.com.

In the case, which is styled Landmark National Bank v. Kesler, Supreme Court of Kansas No. 98,489 (Opinion released August 28, 2009), MERS and Sovereign Bank sought to overturn lower court rulings that a non-lender is not a “contingency necessary party” (also termed an “indispensable party” in other jurisdictions) in a mortgage foreclosure action, and that due process did not require that a non-lender be allowed to intervene in a mortgage foreclosure action. Although not appealed on the specific ground of MERS’ legal authority to assign mortgages and notes, the Supreme Court of Kansas went to painstaking detail to discuss this alleged authority in connection with MERS’ claim that it had the right to intervene in and be made a party to the foreclosure action, ultimately finding that MERS had no such authority and thus the lower courts properly denied MERS’ and Sovereign’s requests.

The borrower took out a first and second mortgage with two different lenders, each of which recorded their mortgages. The original lender on the second mortgage, that being Millennia Mortgage Corp. (of Laguna Hills, Orange County, California), allegedly assigned, through MERS, the mortgage and note to Sovereign without either MERS or Sovereign recording the alleged assignment. A foreclosure was instituted by the original lender on the first mortgage which named the borrower and Millennia. Neither MERS nor Sovereign was named in the action as the alleged assignment of the second mortgage from Millennia to Sovereign by MERS was never recorded. MERS and Sovereign thereafter found out about the foreclosure and sought to set aside the default against Millennia (which obviously did not respond to the lawsuit as it had assigned the mortgage to Sovereign, or so it thought) and intervene in the foreclosure action, doing so well after the Sheriff’s sale of the property.

The MERS assignment contained the typical language where MERS was the alleged “nominee” and functioned solely in that capacity for Millennia. The Kansas Supreme Court noted that the attorneys attempted to define what a “nominee” is “in much the same way that the blind men of Indian legend described an elephant-their description depended on what part they were touching at any given time”. Notwithstanding the strained attempts of the attorneys, the Kansas Supreme Court held that “The relationship that MERS has to Sovereign is more akin to that of a straw man than to a party possessing all the rights given a buyer”, and that the mortgage document consistently limits MERS to acting “solely” as the nominee of the lender (and not with any authority to assign).

The Court further held that “in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable” as “The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Without this agency relationship, the person holding only the note lacks the power to foreclose in the event of default”. This holding is particularly significant in securitized mortgage loan transactions where the mortgage was assigned to a securitized mortgage loan trust as collateral in connection with the issuance of mortgage-backed securities (also termed “certificates”), and the purported “assignment” of the Note by MERS was ineffective due to a lack of authority, thus severing the note from the mortgage.

The Kansas Court further held, citing legal decisions from other jurisdictions, that because MERS was not the original holder of the promissory note and because the record contained no evidence that the original holder of the note authorized MERS to transfer the note (as MERS’ authority, as set forth in the mortgage document itself, was “solely as nominee”), the language of the assignment purporting to transfer the promissory note was ineffective. The Court held that for there to be a valid assignment, there must be more than just the assignment of the deed alone and that the note must also be assigned, and although MERS purportedly assigned both the note and deed of trust, there was no evidence that established that MERS either held the note or was given the authority to assign the note, resulting in the assignment being ineffective.

The Court went on to note that “The practices of the various MERS members, including both the original lender and the mortgage purchaser, in obscuring from the public the actual ownership of the mortgage (as the MERS assignment from Millennia to Sovereign was not recorded), thereby creating the opportunity for substantial abuses and prejudice to mortgagors, should not be permitted to insulate the mortgage purchaser from the consequences of its actions in accepting a mortgage from an original lender that was already the subject of litigation in which the original lender erroneously represented that it had authority to act as mortgagee”.

We presently have several cases where different foreclosing parties, most notably IndyMac Bank, are engaging in this type of wrongful action: that is, attempting to foreclose representing that they have an interest in the mortgage when they previously “assigned” their interest to one or more third parties, including securitized mortgage loan trusts, through MERS.

We have also previously reported that a Federal Court in Nevada similarly attacked MERS’ purported “authority”, finding that there was no evidence that MERS was the agent of the note’s holder (In Re: Joshua and Stephanie Mitchell, Case No. BK-S-07-16226-LBR [U.S. Bankruptcy Court, District of Nevada, Memorandum Opinion of August 19, 2008]. The Court of Common Pleas of Sumter County, South Carolina also found that MERS’ rights were not as they were represented to be; that MERS had no rights to collect on any debt because it did not extend any credit; none of the borrowers owe MERS any money; that MERS does not own the promissory notes secured by the mortgages; and that MERS does not acquire any loan or extension of credit secured by a lien on real property. Mortgage Electronic Registration Systems, Inc. v. Girdvainis, Sumter County, South Carolina Court of Common Pleas Case No. 2005-CP-43-0278 (Order dated January 19, 2006, citing to the representations of MERS and court findings in Mortgage Electronic Registration Systems, Inc. v. Nebraska Dept. of Banking and Finance, 270 Neb. 529, 704 NW 2d. 784). As such, ALL MERS assignments are suspect at best, and may in fact be fraudulent.

The importance of the findings of the Supreme Court of Kansas cannot be overemphasized. It is generally the law in all states that if the law of one state has not specifically addressed a specific legal issue that the court may look to the law of states which have. The Kansas Court acknowledged that the case was one of “first impression in Kansas”, which is why the Kansas Court looked to legal decisions from California, Idaho, New York, Missouri, and other states for guidance and to support its decision. As we have previously reported, the Ohio Courts have looked to the legal decisions of New York to resolve issues in foreclosure defense, most notably issues of standing to institute a foreclosure.

It is practically certain that this decision will be the subject of review by various courts. MERS has already threatened a “second appeal” (by requesting “reconsideration” by the Supreme Court of Kansas of its decision by the entire panel of Judges in that Court). However, for now, the decision stands, which decision is of monumental importance for borrowers. It thus appears that the tide is finally starting to turn, and that the courts are beginning to recognize the extent of the wrongful practices and fraud perpetrated by “lenders” and MERS upon borrowers, which conduct was engaged in for the sole purpose of greed and profit for the “lenders” and their ilk at the expense of borrowers.

Onward and upward!!!

Jeff Barnes, Esq.


E-mail: info@ForeclosureDefenseNationwide.com

And the Supreme Court of Arkansas now concurs:


A general description and analysis of the Kansas Supreme Court
decision regarding MERS


Read the Rolling Stone Magazine Article.



Bailout? What Bailout:
Following the Boyko decision, in December 2007 attorney Sean Olender suggested in an article in The San Francisco Chronicle that the real reason for the bailout schemes being proposed by then-Treasury Secretary Henry Paulson was not to keep strapped borrowers in their homes so much as to stave off a spate of lawsuits against the banks. Olender wrote:
“The sole goal of the [bailout schemes] is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value – right now almost 10 times their market worth. The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.

“. . . The catastrophic consequences of bond investors forcing originators to buy back loans at face value are beyond the current media discussion. The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail, resulting in massive taxpayer-funded bailouts of Fannie and Freddie, and even FDIC . . . .

“What would be prudent and logical is for the banks that sold this toxic waste to buy it back and for a lot of people to go to prison. If they knew about the fraud, they should have to buy the bonds back.”

Needless to say, however, the banks did not buy back their toxic waste, and no bank officials went to jail. As Olender predicted, in the fall of 2008, massive taxpayer-funded bailouts of Fannie and Freddie were pushed through by Henry Paulson, whose former firm Goldman Sachs was an active player in creating CDOs when he was at its helm as CEO. Paulson also hastily engineered the $85 billion bailout of insurer American International Group (AIG), a major counterparty to Goldmans' massive holdings of CDOs. The insolvency of AIG was a huge crisis for Goldman, a principal beneficiary of the AIG bailout.

In a December 2007 New York Times article titled “The Long and Short of It at Goldman Sachs,” Ben Stein wrote:

“For decades now, . . . I have been receiving letters [warning] me about the dangers of a secret government running the world . . . . [T]he closest I have recently seen to such a world-running body would have to be a certain large investment bank, whose alums are routinely Treasury secretaries, high advisers to presidents, and occasionally a governor or United States senator.”

The pirates seem to have captured the ship, and until now there has been no one to stop them. But 60 million mortgages with fatal defects in title could give aggrieved homeowners and securities holders the crowbar they need to exert some serious leverage on Congress – serious enough perhaps even to pry the legislature loose from the powerful banking lobbies that now hold it in thrall.
AIG - America's Blackhole

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/28/AR2008122801916.html">How your government failed you.



USBC Judge Samuel L. Bufford has the correct analysis.

Google where's the note and who is the missing note holder





Qualified Written Request - What it is/is not

Important information about the "QWR"
There are a number of widely circulated assertions regarding the content, scope, and effectiveness of a Qualified Written Request" (QWR). The following will correct a number of these errors and give you the tools you need to articulate an effectual QWR.
What is a QWR?
A "Qualified Written Request" is a tool provided to consumers under RESPA Section 6, added in 1990, for the consumer's protection. Generally speaking, Section 6 affords borrowers a dispute resolution mechanism that gives rise to specific duties on the part of servicers where certain conditions are met. This part of RESPA generally imposes standards and requirements regarding the assignment sale or transfer of mortgage loan servicing (12 USC Section 2605).
RESPA's Section 6 and Section 3500.21(e) of RESPA's implementing regulations (Regulation X) provide that consumer inquiries would constitute QWRs where:
1. They are submitted in writing
2. They include, or allow the servicer to identify, the name and account of the borrower
3. They include a statement of the reason 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 USC Section 2605(e)(B)(ii)).

If all items are included the servicer must then provide written acknowledgement to the consumer within 20 business days of receipt. This triggers an affirmitive 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.
Under RESPA borrowers can file a private lawsuit for a Section 6 violation and can potentially recover actual and statutory damages (up to $1,000. per violation) plus attorney's fees. Additionally, 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 (Section 2605(e)(3)).

A QWR must specify the particular errors or omissions in the account, along with an explanation from the borrower of why he/she believes an error exists. Regulation X explicitly recognizes that borrowers may use the QWR process to generally access information about the loan's escrow account (see 24 CFR Section 3500.17(l)(4)). In summary, requests made in a QWR must relate to servicing and escrow matters.
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 Section 10 of RESPA, and making the payments of principle and/or interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the loan (See 12 USC Section 2605(i)(3)).

What a QWR is *not*:
A QWR can not be a list of unsupported demands for information.
Requests related to origination do not qualify as QWRs.
The QWR process does not require a lender or servicer to stop foreclosure proceedings or other legal action on the loan.
A QWR which requests no information related to servicing is not a valid QWR.
A QWR applies only to mortgages secured by a first lien.
Correspondence about the validity of a loan does not constitute a QWR.

Oh. Gretchen and the NY Times get it. You should too.

But Matt Taibbi and Rolling Stone Magazine get it even more.

The first step - a shot heard around the world:


The RESPA Qualified Written Request.

(I'd say "don't try this at home, folks" because the so-called and now popular "produce the note" mortgage defense is not as simple as nonlawyers would have you believe,nor do very many others if any at all possess my nuclear weapon. But, like homemade bombs, not all of you will take this advice for various reasons. Good luck to you in this case. You will need it.)

UPDATE: Key to Highway


Unless you went to law school, took and understand mortgage law and UCC
you'd better get yourself an A-list attorney. For real.


You have enemies? Good. That means you've stood up for something, sometime in your life. Winston Churchill

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1 comment:

Hill said...

Looking for help with California Bankruptcy Lawyers? Not sure bankruptcy is the right choice?