By masaccio, first posted at FireDogLake.
Yves here. Note that masaccio uses “indorsed” when laypeople would use “endorsed”. For some weird reason, in bankruptcy matters, the term of art is “indorse”. To masaccio’s post:
The administration and the banks want you to believe that there is nothing more to foreclosure fraud than just mere paperwork. I point out here that the false affidavits and rocket dockets can rob people of their legal rights. But that was just the first grade primer. When home mortgages are securitized, a whole new level of legal rights and duties are set up that go far beyond the minimal requirements of the Uniform Commercial Code. The interaction of these rights and duties make it difficult to determine who is entitled to enforce securitized mortgage notes.
I am grateful to Yves Smith for introducing me to this set of issues.
Introduction
We will be looking at a specific securitization, that of GSAMP Trust 2007-NC1, which we will call the Trust. The letters stand for Goldman Sachs Alternative Mortgage Product, and New Century, the giant mortgage originator that collapsed into bankruptcy with an array of fraud claims. The Trust is governed by a Pooling and Servicing Agreement, the PSA, which is here. There are seven parties to the PSA, and the rights and duties of each are described in excruciating detail.
The basic idea of the PSA is that New Century will transfer a specific group of promissory notes secured by residential mortgages to the Trust. The Trust is a special purpose vehicle created for the limited purpose of holding the mortgage loans. It sells debt securities, bonds, to investors. The bonds will be paid solely from the payments made on the mortgage loans. The PSA describes the bonds and how the Trust is to pay out the money it receives. This is the slicing and dicing part of the creation of real estate backed mortgage securities.
First let’s look at some of the critical legal and practical requirements for the Trust. Then we will look at the ramifications of what the banks say is just problem paperwork that needs a few tweaks.
REMIC
The Trust will receive income from the interest on the promissory notes, and possibly other income. It is crucial to investors that the Trust is not liable for federal or state income taxes. Internal Revenue Code § 860A creates special rules for Real Estate Mortgage Investment Conduit, or REMIC. If the Trust qualifies, it will not be taxed on its income. The PSA contains provisions that, if complied with, should enable the Trust to qualify as a REMIC. That makes compliance with the REMIC requirements essential for the Trust. . . .
Accounting Rules
The FDIC has rules on accounting for banks, and specifically for the calculation of their net capital. It is crucial to a bank that it sell all of its interest in the mortgage loans with no possibility that the Trust could make it buy them back. If it doesn’t, it will have to show a liability for the possibility that it might have to buy back the mortgage loans. General accounting rules also require a complete disposition to count as a sale. The PSA contains provisions which attempt to insure that New Century is selling with no possibility that it will have to buy back the mortgage loans. See, for example, § 12.04.
Bankruptcy Remoteness
All parties want to insure that if one of them or the Trust files bankruptcy, it won’t affect any of the other parties. This is called bankruptcy remoteness. The PSA contains provisions that should insure bankruptcy remoteness.
New York Trust Law
The PSA says that the parties choose to be governed by the laws of the State of New York. § 12.03. New York law governing the operation of trusts and the actions of trustees applies to the PSA. That law is detailed, and well-developed through case law. Speaking very generally, a trustee has only the authority granted by the instruments creating the trust. In our case, the Trustee is LaSalle Bank, which is now owned by Bank of America. LaSalle Bank has no discretion to disregard the provisions of the PSA, and is not allowed to act contrary to the PSA.
The duties of the Trustee are enumerated in § 8.01, along with exculpatory provisions. The main provision is in subsection (a):
(a) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Agreement, the Trustee shall not be liable except for the performance of the duties and obligations specifically set forth in this Agreement, no implied covenants or obligations shall be read into this Agreement against the Trustee, ….
PSA Requirements for Delivery of Mortgage Loans
The PSA is quite specific about the mortgage loans that go into the Trust. § 2.01 goes into great detail about the documents that must be delivered and the form they must take. Here is an example from §2.01(b)(i), which requires delivery of:
(i) the original Mortgage Note (except for up to 1.00% of the Mortgage Notes for which there is a lost note affidavit and a copy of the Mortgage Note) bearing all intervening endorsements, endorsed “Pay to the order of _________, without recourse” and signed in the name of the last endorsee. To the extent that there is no room on the face of the Mortgage Notes for endorsements, the endorsement may be contained on an allonge unless the Trustee (and Custodian) is advised by the Responsible Party that state law does not so allow. If the Mortgage Loan was acquired by the Responsible Party in a merger, the endorsement must be by “[last endorsee], successor by merger to [name of predecessor]“. If the Mortgage Loan was acquired or originated by the last endorsee while doing business under another name, the endorsement must be by “[last endorsee], formerly known as [previous name]“;….
§ 2.01 explains in similar detail the other documents, including the mortgage itself, which must be delivered, and the forms they must have.
These complex provisions are crucial deal points. They are all necessary to achieve REMIC status, bankruptcy remoteness, and outright sale. They are not discretionary with the Trustee.
Who Can Enforce The Note?
If the Trustee has possession (through a custodian) of a promissory note that meets all of the requirements of § 2.01, then the Trustee is the holder and is entitled to enforce the note and to foreclose on the mortgage.
What about a note that is not properly indorsed? The transfer of a promissory note is governed by UCC § 3-203:
(a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.
In the case of an improperly indorsed note, there was no transfer, because the PSA does not allow the Trustee to accept delivery of a promissory note that does not meet its requirements. If the note has not been effectively transferred, the Trustee has no rights in it, and cannot enforce it.
Whether or not this comports with the UCC is irrelevant, because the UCC permits parties to contract for more restrictive terms than those in the UCC itself. UCC § 1-302. The PSA contains more restrictive terms regarding indorsement and delivery than those of the UCC, and terms of the PSA are enforceable.
It isn’t clear that this can be fixed by getting the missing indorsements, because the time specified for the closing of the transfers has long since passed. A further problem arises when the originator of the mortgage is out of business.
This is an opportunity for the homeowner, certainly. It also matters to the investor. If the note has not been properly transferred, the Trust might lose its status as a REMIC. It matters to New Century (or it would if New Century was still around) because it might create a liability to take back the mortgage loan. It matters to the IRS, which has to figure out whether the Trust owes taxes. It also matters to the Trustee of the Trust, which may have violated the PSA.
Who can enforce an improperly indorsed note? Good question. This will clog up courts for a long time.
Conclusion
The Administration and the banks and all the other players in the securitization game want us to look ahead, and not back at this disaster. Investors and homeowners should adjust their rear view mirrors and take a careful look at every single document.
43 comments
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Yves, very impressive.
A copy Masaccio’s analysis should nailed onto the front door of every courthouse in the country.
“Lookng ahead” is the Obama strategy for evading responsibility for war crimes and crimes of financial fraud.
This is a pretty good first cut at identifying the issues. Many of the originators are already bankrupt, so “bankruptcy remoteness” is not a hypothetical problem. Clawback attempts by bankruptcy trustees could be an enormous source of losses, and I think this is very likely why the banks were willing to buy the big originators rather than have them go bankrupt.
The other risks identified are also realistic, although you could argue that the IRS under Geithner simply won’t pursue the REMIC related tax liabilities.
Bottom line – I don’t see how Wall Street will ever be able to get the low-rate securitization machine going again, except as a government subsidized operation with homogenized inputs like the old Fannie/Freddie conforming loans. The costs and risks are just too high.
If I’m right, that means the Obama/Geithner/Bernanke Plan A for restoring the economy has no chance at all of succeeding. And I don’t see any indication of a Plan B.
I posted on the possibility of using bankruptcy to halt foreclosures in bankruptcy cases: http://my.firedoglake.com/masaccio/2010/10/04/stopping-foreclosure-in-bankruptcy/
The post is based on work I did for a Chapter 7 Trustee.
The IRS reports to the Fed
or is a bill collector for Fed / IMF et al
– not United States Treasury… :
no?
Well, when you write a check for IRS taxes, either quarterly estimates or in payment when filing a 1040, the instructions say: “Make your check payable to the United States Treasury”
Edward:
P.S. In the executive department org chart, the IRS is under the Treasury Department.
I am astonished at the complexity and brilliance of real estate law and MBS.
I am perplexed that it is all grounded on government backed violation of “Thou shall not steal” by the government backed counterfeiting cartel.
Someone once said something about a building on a “foundation of sand”:
Matthew 7:24-27
Yes, I think we can channel how this ends.
The finance lawyers will all get richer.
And the rest of us poorer, again, somehow.
Bill Black on dylan Ratigan today.
Says Fire ’em.
http://market-ticker.org/akcs-www?post=170265
At some point we will get a more complete and accurate summary of the issues.
Section 2.01 of the PSA provides:
“If the Responsible Party fails to deliver the required individual lost note affidavits within the specified period of time, the Trustee, upon receipt of notification of such failure from the Custodian or exception report noting such missing document from the Custodian, shall notify (which may be an exception report) the Responsible Party to take such remedial actions, including, without limitation, the repurchase by the Responsible Party of such Mortgage Loan within 30 days of the Closing Date.”
It may be complex, but someone will have the right to enforce the note and to foreclose on the mortgage – unless a court uses false affidavits or some principle of equity to invalidate the note itself.
It seems to me that there are real problems here, but I haven’t seen a good analysis yet.
1. Missing endorsements can be supplied at a later date. The UCC provides (§ 3-203):
(c) Unless otherwise agreed, if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor, the transferee has a specifically enforceable right to the unqualified indorsement of the transferor, but negotiation of the instrument does not occur until the indorsement is made.
FYI – it is very desirable to become a “Holder” because that may make it possible to become a favored holder in due course – but that isn’t too important yet. The delay in getting the indorsements may prevent HIDC status.
I saw nothing in the PSA that would make it impossible to cure the missing endorsement problem (but I only skimmed it). Of course 2.01(c) seems to contemplate exactly this problem.
The issues to me are:
(i) if the transfers were defective, does that disqualify favorable REMIC treatment for tax purposes?
(ii) if the transfers were not perfected contemporaneously with the formation of the REMIC is there a prohibition on the transferor completing the transfer now (e.g., is the transferor insolvent such that the transfer would violate the fraudulent conveyance statute or the fraudulent transfer provisions of state law – actual intent to defraud isn’t a requirement for there to be a problem)?
(iii) did the servicing agent (or someone else) breach duties to the beneficiaries of the REMIC by acting negligently or was the servicing agent even grossly negligent?
(iv) if samples of the mortgages were taken to verify conformity to the REMIC’s deposit requirements and the evidence of problems in the sample pool indicated that there would be numerous other problems with the remaining mortgages (i.e., outside the sample pool but inside the REMIC), did someone breach duties by failing to fix all the mortgages instead of fixing only the ones with problems discovered through the sampling process?
(v) If sampling discovered problems, were those problems explained in the disclosure documents?
(vi) were the lawyers, accountants, consultants, etc. negligent and if so shouldn’t the servicing agent be pursuing them or is that something that could be directed by a committee of the creditors?
(vii) if the transferors of any mortgage notes that were imperfectly transferred are insolvent or bankrupt, doesn’t the REMIC now only have an unsecured claim against the transferor, while the transferor may have the right to the note and the related collateral?
I appreciate the analysis so far, but as you can tell, I still have more questions than answers. Keep digging.
You are missing the New York trust law implications. A New York trust is permitted to operate only as stipulated. It’s not permitted to take the notes after the cut off date. So endorsing the notes now fails per the trust law considerations.
If no assets got to the trust by closing, it is unfunded and under New York law, does not exist.
In addition, trustees made representations in multiple certifications to investors and ongoing SEC filings to the effect that the trust had the assets. So going back and doing the endorsements now exposes them to liability on that front. So the trustees do not want to do this route.
That is absolutely right. And as far away as Texas, all of these documents are done using New York law. Accordingly, while state real estate law impacts foreclosures, these relationships involving the trust documents are uniform, no matter where they were entered.
If there is something in the trust statute, case law, or the PSA that precludes supplying missing indorsements, you would be correct and I would be surprised – especially since the PSA contemplates exactly that. One would expect, however, that late indorsement would create different and significant problems (e.g., breaches of representations and warranties, breaches of fiduciary duties, fraud, misrepresentations, 10b-5 liability, negligence, etc.). It is these problems when coupled with the lack of solvency of some of the intervening owners of the notes/mortgages that make these issues so perplexing.
With respect to “no assets” being received, I’m not certain that the note and mortgage rights assigned, even if imperfectly assigned or missing indorsements, are no longer assets. As such, the trusts have something, even if the assets aren’t what the REMIC should have (I am assuming that you may mean that if there are no assets in the trust, it was never funded or fully formed).
I agree that the trustee has (and should have) exposure to the beneficiaries of the REMIC, but notes are frequently transferred with missing indorsements and the indorsements are supplied later without discharging the obligor.
As mentioned previously, there may be other problems that prevent supplying an indorsement at this time (fraudulent transfer, fraudulent conveyance, bankruptcy of someone in the chain of title, perhaps something unique in NY trust law, etc.).
In a commercial context, a missing indorsement supplied after the fact may prevent the current owner from being a holder in due course and thereby subject the owner to additional defenses from the home owner – obligor.
You seem to disagree with the trust law matter. That’s actually central.
Under New York law, a trust is permitted to operate only as stipulated and has no discretion. None. Zero. Zip. Nada.
New York trust law is EXTREMELY well settled on this matter. In fact, New York law was chosen for the trust PRECISELY because it was so well settled.
The trust had precise cut off dates for receipt of assets. Effectively, it was supposed to get all the assets at closing, but it had 90 days for cleanup (some PSAs, only 60). The assets had to be properly endorsed showing the full chain of title.
The view that the trust does not own assets that are not properly endorsed, nor can it own assets after the cut off date, is not my view, but the view of all the top New York trust law experts (the ones who officially advise New York state on these matters). Some have provided depositions to this effect; others have agreed to testify.
To use their terms of art, for a trust to act in a manner not stipulated is a “void act”.
The New York trust law experts also say that if no assets were conveyed to the trust as of closing (as in, say, they were endorsed in blank and sat at the originator) the trust is “unfunded” and does not exist.
Notes are often transferred outside an RMBS context. The issue is not the transfer of the notes, it is the fact that failure to transfer the notes as stipulated by the PSA is not amenable to ex post facto fixes.
Thanks for helping me out on this. Please don’t take my comments as disparaging either you or Firedoglake. I follow both of your blogs (yours I read each day).
GASMan,
You ask about sampling of mortgages and consequences
in the issues (iv) and (v). A company called Clayton
did a lot of compliance testing and due dilligence, hired
by banks who wanted to buy loans and then securitize
some/all of them. I believe Yves Smith might hav mentioned
Clayton not long ago. A former Clayton exec. and a
current Clayton exec. testified before the
Financial Crisis Inquiry Commission around Sept. 23.
There was a story in the Huffington Post shortly after.
28 percent of a sample of 910,000 sample mortgages (the sample was taken from much larger pool) failed
the basic underwriting quality test. The
Huffington Post story was by Shahien Nasiripour.
There’s a web-site for the Financial Crisis
Inquiry Commission at http://fcic.gov/
David Bernier
“Investors and homeowners should adjust their rear view mirrors and take a careful look at every single document.”
I guess this means reviewing not only your current mortgage loan agreements but all prior mortgage loan docs including any that you may have refi’ed out of during the past 5-10 years.
Question: Say I try to do just that. How does one verify that an entity, that may have issued satisfaction papers memorializing the payoff, actually had the legal authority to do so(I guess that means how do you verify that the payoff proceeds got to the party that held true legal ownership of the note)?
Like the borrowers fighting off foreclosure ypu have to ask to see the note. Suppose it can’t be produced?
A question that is sure to come up as this gears up for an inevitable battle in the courts will surely be why the contractual obligations to transfer the notes weren’t met. Was it done, as we keep being told, as a matter of expediency? Or was it to hide the quality of the mortgages.
Regardless, it seems the IRS would have to waive all penalties for these transfers to be completed now. Also, can the bondholders be forced to accept a non-performing asset?
Albrt, I hope you will revisit this problem in another guest post now that the issues are clearer. I just emailed this to a Bankruptcy Trustee of my acquaintance and suspect it will make the rounds. OOPS.
Unfortunately I’m not in a position to do that for at least another month or so. I will say I’m puzzled why more creditors of the bankrupt mortgage originators haven’t tried to claw back improperly assigned loans. It’s not an issue that a decent bankruptcy lawyer would have trouble spotting.
But answering that question would probably require many hours of research into the individual case files of bankrupt originators.
“Like the borrowers fighting off foreclosure you have to ask to see the note. Suppose it can’t be produced?”
That seems to be a big problem. They are playing hide-the-note and the courts are letting them get away with it. How can you force them to produce the note?
I believe one way you can compel the servicer to produce the note would be to use the “written request” under the Federal Servicer Act, which is a part of the Real Estate Settlement Procedures Act, 12 U.S.C. 2605(e). They then have 60 business days to comply with your request; you can request everything to proof of the note to MERS milestone reports, MIN reports, loan transaction history, and specifically Section 131(f) of the Truth-in-Lending Act, 15 U.S.C. Section 1641(f), they are compelled to provide you with the “full legal name, street and mailing address, and telephone number of the true owner and holder of the promissory Note signed by my clients and secured by the deed of trust in my clients’ mortgage loan referenced above.”
Of course, good luck getting your bank to respond.
I sent my bank a certified letter 10 days ago requesting to see the note and the chain of title. I had a response sent by fed ex 5 days later. The letter said they will provide all of my info in the time allowed by law. I am doubtful of this as my loan was originated in 2005 by AIG. I am not behind in any of my payments and am in no danger at all of falling behind on my mortgage but I want to find out who actually owns my mortgage and if I am even paying the right bank.
This is not a posed as a cynical question: Though I have terrific admiration for the various legal experts who’re interpreting for us the mechanisms of foreclosure and mortgage securitization, isn’t the bottom line that the law doesn’t matter? These issues will go all the way to the Supreme Court, which showed in Bush v. Gore, that it does what it likes, without regard for the law, understanding that Americans will lie down for pretty much anything.
Well, this is my mortgage to a T. No proper transfer of notes or assignments. An attempt two years after the closing of the trust, to assign mortgage and note to MERS. At that time, originator/lender bankrupt.
We are current and wondering what to do.
Do we do an action to quiet title. We are in Florida. Do we have a chance and if so, of what? Not sure any court has given a free and clear, yet.
Thoughts/advice?
Some good info on Quiet Title:
http://stopforeclosurefraud.com/2010/09/26/is-it-time-to-file-quiet-title-actions-on-foreclosed-homes/
Also:
Piercing the Corporate Veil
http://stopforeclosurefraud.com/?s=piercing+the+corporate+vail&x=0&y=0&=Go
I filed a lawsuit to remove the cloud on my homestead a year and a half ago in Memphis, alleging that the Deed of Trust on my homestead, held by MERS and the origination lender, was invalid.
I am not in default. I am an attorney of 33 years.
It may be of huge interest to Wall Street what happens to these trusts and pooling and servicing agreements, but these issues are not nearly as important to the average homeowner as the issue of whether mortgage liens are valid.
This process of securitzation radically changed the ability of a property owner, a title company or a prospective purchaser to determine who needed to be paid to secure clean title to the property. Before securitization, the creditor could be identified because the creditor was the lienholder. After securitizaion, a strawman called MERS became the lienholder. It is no longer possible to look at the deed records and be able to identify who the creditor is who needs to be paid to secure a release of the lien.
I can’t stress enough how this is such a fundamental change in property law all over the country. By simply naming a strawman as the lienholder, rather than the true noteholder, a deed recording system that was public and transparent has been replaced by a system that is private and secret.
And the courts that have looked at this are refusing to let deed recording go private and secret. Three state Supreme Courts have already declared this system to produce invalid liens, as have many bankruptcy courts. Just this week a class action suit in Georgia was filed to set aside all foreclosures by MERS when practical to do so, or if setting aside foreclosure proves impractical, then to compensate the owners foreclosed upon.
What this all means for Main Street and the average property owner is that your mortgage note is most likely to be declared to be unsecured if the issue is really pressed by a competent attorney who understands this. You may owe your note, (that’s even questionable if the note is lost or missing) but your property will no longer be collateral for it.
Absolutely. There are only two courses of action to fix the broken US proprety title system:
a) MERS is struck off as nominee on all liens and replaced with the last wet-signature note holder as mortgagee. It will have to be done one-by-one on millions of titles. Some notes are lost and last owner unknown (which means the properties may become mortgage-free). But most properties should be able to have the lien properly recorded in county records.
b) Congress amends the law to try and legitimize the broken titles. But it faces formidable hurdles as it speaks at a federal level and the county records are state-owned with interstate variations. It would also run the risk of subverting long-established principles of property law which will store up huge trouble for the long-term.
I don’t think a federal solution will work. If the liens are lost, it would seem to me that resurrecting them would be tantamount to a taking without due process of law in violation of the fifth amendment.
I am no constitutional scholar by any means. But this would amount to a state action, not for the benefit of the state, but worse, for the benefit of a private entity.
Maybe a constitutional scholar could weigh in on this.
What was the outcome of the quiet title suit? Did you argue this pro se? What arguments were made by each side? Is there anything that you would have done differently? Is the judgement something we can look up via docket number?
Please come back with as many details as possible. I’ve been looking for this exact info for weeks and have come up with nothing detailed.
I found your amended complaint and response to motion to dismiss here:
http://www.scribd.com/doc/21761087/Mills-Response-To-First-Horizon-s-Motion-To-Dismiss
http://www.scribd.com/doc/21619196/I-am-an-attorney-so-I-decided-to-sue-my-lender
Which was great reading. Is the suit still in progress? Was there a show cause hearing? Was a summary judgment issued?
The trial court, for some absurd reason, dismissed my complaint on the basis of ripeness. Ripeness is not a necessary requirement of an action for a suit to remove cloud on title. But that was his ruling.
I appealed. The case was just argued in the Tennessee Court of Appeals last week.
It will in all probability end up in the Tennessee Supreme Court in the near future.
Many people have my amended complaint and my brief, but for some reason they are much harder to access on the net than my original complaint. I will email the amended complaint and brief to anyone who asks. davidgmillsatty@gmail.com
The weird reason is probably the latin origin (“indorsare”). Lawyers love latin…
I’ve always thought of FireDogLake as being too far to the left politically (even for me, a guy who leans more to the left) but this person “masaccio” and David Dayen may have me checking over there more often. This is pretty good stuff.
I’m curious, if it wasn’t for all the working people/”regular Joes” out there suffering and caught in limbo over this…. if not for that…. Is there anyone else who gets a massive sadistic thrill out of picturing in their mind on the left credit card application legalese, and juxtaposed on the right, New York state law that is snagging these banks, and getting a sick gigantic smile on their face, thrilled and excited that these banks might get screwed by their own greed “flipping mortgages” around to each other??? or am I the only person who gets a huge morbid thrill out of watching oligopolistic banks get screwed any which way under the sun???
By the way I’m curious, if anyone has used that phrase before I just used “flipping mortgages”?? Isn’t that what these CDOs were??? Just banks “flipping mortgages”?? In fact it had very little to do with “hedging”.
It’s fun to watch, but they’re not screwed yet, TK.
Re the bankruptcy of the originators. As hinted there is a trustee who has control of the bankrupt company. The more likley problem is that the date for making claims against the bankrupt estate has likley lapsed. It is an interesting question if a bond trustee tries to put back a loan after the bar date of the bankruptcy proceeding, would the claim be allowed?
I quote David G. Mills at length in an update to my post: http://thebell.us/2010/10/saturnalia-the-national-review-on-foreclosure-mess/ He clarifies both the title canard and the MERS role.
Die Banker Die – A Tribute to the Wall Street Banksters that suck the life from all of us and our economy just to get a nice Christmas Bonus – http://www.youtube.com/watch?v=YGFZ1Jj3ui8j
Nobody has brought up the distinct possibility that the loan servicers may well have bundled and sold each of these loans MORE THAN ONCE to differernt investors via the securitization process. THIS COULD BE THE REAL REASON THAT THERE IS NO DOCUMENTATION / PAPER TRAIL. The non-existent documentation and accounting is entirely consistent with this scenario. This means that the entire plan was a true Ponzi scheme in the worst sense. In other words, rather than selling the loan once to investors, as we have all naively been assuming, there is no reason to believe that they did not double-dip or quintuple-dip and sell the exact same loan to completely new buyers. THIS IS A LEVEL OF FRAUD THAT THE AMERICAN PUBLIC HAS NOT YET CONTEMPLATED.
There are no new laws that are necessary. All that is necessary is for the states to FOLLOW THE EXISITING LAWS which have been around much longer than any of us, or any of the banks themselves. These laws were devised to deal with all property frauds, including the current foreclosure frauds. No more bailouts. Let the chips fall where they may.
Behind a foreclosure, danger and tragedy
This Miami Herald news story exemplifies the ULTIMATE COST that should not be paid for faulty foreclosure! (The ‘elephants that hide in plain sight’ killed this little boy, destroyed this family, and remains unaccountable!!)
*Miami Herald news story: “Behind a foreclosure, danger and tragedy”
http://www.miamiherald.com/2010/11/03/1907758/behind-a-foreclosure-danger-and.html
—————————————————————————————————————————————————–
A large amount of “sheriff sales” (foreclosures) were / are simply FRAUDULENT; and a vast amount of properties NEVER end up belonging to lenders with “secured interests” in those homes.
In fact, there are certain foreclosure lawyers (foreclosure mills) and their straw buyer (INSIDERS) who wound up with ownership of distressed properties, while lenders file mortgage insurance claims and IRS 1099’s. After fraudulent gains of ownership, homes become flipped and re-flipped! Then, blight, RODENTS, along with MUCH LOSS of City revenue, etc., results –and even possibly, death. What happened to that family because of foreclosure gone wrong is heartbreaking and nothing like that should ever happen again! AUTHORITIES absolutely must take corrective actions against: “Foreclosure frauds, Foxes, hidden Elephants in Plain Sight, Havoc”
open.salon.com/blog/wwwlawgraceorg/2010/11/02/foreclosure_frauds_foxes_hidden_elephants_in_plain_sig
I believe that your analysis is right on the money, However, do you have a case that says this. Been making this argument to mixed reaction from Judges. Cannot seem to find any caselaw.
You won’t find any case law, and for good reason. In general, structured credit litigation is a cutting edge of the law (as opposed to real estate law, which is very well settled) AND the issues that this post focuses on are only now coming before the courts.