The F-Bomb

Surviving California ^ | 12/3/2010 | Bobbo

[DoctorZIn]

Inquiring minds are reading an intriguing and frightening article by Greg Hunter entitled, “Foreclosure Bombshell“. Mr. Hunter gives the best explanation (yours truly included) of the explosive problem surrounding foreclosures.

The issue centers around the ‘note’…namely its location and why that is so important: ...

[survivingcalifornia]

Thanks. You WERE right!

[survivingcalifornia]

But that IS THE POINT. IT DOES change. Try getting paid on an IOU that you lose. Or pay for something that with a $100 bill that you have lost. If you lose the note, then you lose the chance for payment.

[survivingcalifornia]

I was taught that in law that you have to have two things to have standing in court: 1) ownership and 2) injury.

The banks ripped in two the the trust deeds. They kept the ownership while giving the finacial risk away. I am not a lawyer but I don’t know how the bank can go to court. They own the note but don’t have any injury because they have already sold the financial interest.

How is the bank hurt? And how does the holder of the note show ‘ownership’?

[survivingcalifornia]

I was taught that in law that you have to have two things to have standing in court: 1) ownership and 2) injury.

The banks ripped in two the the trust deeds. They kept the ownership while giving the finacial risk away. I am not a lawyer but I don’t know how the bank can go to court. They own the note but don’t have any injury because they have already sold the financial interest.

How is the bank hurt? And how does the holder of the note show ‘ownership’?

[usconservative]

Just because your original paper has been bought and sold it doesn’t do anything to your original obligation nor does it interfere with your payoff of the final payment.

The obligation is to the note holder, who has an obligation to prove that they've properly assumed and secured the note, including title to the home which can legally be transferred upon completion of payment of obligations under the terms of the contract.

I used to work in the Mortgage industry for ABN AMRO and spent two years in their mortgage division before the housing meltdown. I know of what I speak here. If the bank cannot prove they hold clear, unadulterated title as the holder of the mortgage note, the BANK itself has violated the terms of the contract and the Home owner has no obligation to continue making payments until the Bank as the holder of the note rectifies the problem.

That does not mean the "homeowner" gets a free house, far from it. What it means is they'd best take all legal steps to protect themselves and their interest in the home by obtaining legal counsel and escrowing their mortgage payments into a separate bank account until the problem can be resolved.

Myself, I discovered six months ago that Wells Fargo had acquired my mortgage note and sent me a letter indicating such. Asserting my legal rights, I requested proof that they had both the note and title to the home so that I could be sure when I paid off my home I'd receive clear title.

Six months down the road, Wells Fargo still hasn't done so. Not only that, they have the address of my property wrong on their statements, the description they sent of my property is incorrect, and the township to which I pay my taxes on their paperwork is incorrect. The only thing they have right thus far is my legal name (and that's questionable since I'm a "Jr." and they don't list my suffix on their paperwork as it appears on my mortgage) and the PIN# of my property.

Am I going to try and "shake them down" for a free house? No. I'm 9 years into a 15 year mortgage and frankly what's left to pay off on my house is such as small amount it wouldn't be worth the aggravation for me. What I am interested in is paying off my house (I hate Wells Fargo) and getting the hell out of Illinois (I hate this state!) and moving somewhere more climatically and politcally temperate than here. I can't do that if I can't get clear title to my house and sell it.

[Drago]

California (and 29 other states) are “Non-judicial Foreclosure” states...the “produce the note” trick won’t currently work in CA...although the delinquents attorneys are hammering away at it:
http://www.realtytrac.com/foreclosure-laws/foreclosure-laws-comparison.asp
http://rismedia.com/2010-03-15/obtaining-due-process-in-non-judicial-foreclosure-states/
http://www.foreclosureradar.com/foreclosure-guides/foreclosure-101/non-judicial-foreclosure-process

[sionnsar]

welcome to FR

[Roccus]

I can't do that if I can't get clear title to my house and sell it.

.....and therein lies a problem that dwarfs the "F-Bomb." (jmho)

[usconservative]

But many of them weren't lost. They were intentionally shredded and banks have admitted this in open court. That means when they filed affidavits of lost notes they committed thousands of counts of perjury.

I won't get into the "shredded" aspects of this, but having worked for a mortgage servicing company, they weren't "shredded" they were imaged and stored electronically. Paper copies were supposed to be stored for legal archive purposes for the life of the loans + 7 years as required by law. (Some states vary, but that's typically been the rule.)

What some are taking issue with is that when challenged in court to provide *original* copies of mortgage contracts, deed documents, etc.. many of the 2nd and 3rd holders of mortgages cannot easily do that. They can provide original scanned images of the documents, but not the original, physical paperwork itself. Some have used this as an 'excuse' to not pay their mortgages to try and win the 'free house lottery' in the Court system. Others have used this as a delay tactic to keep from being evicted from their homes (as noted in an above post.)

The Courts will have to set and enforce a standard under which Banks, Servicing Companies or other mortgage note holders will have to meet in the future to foreclose or clear title. Most states already have processes in place to deal with this (again as noted in an above post.)

[usconservative]

.....and therein lies a problem that dwarfs the "F-Bomb."

Exactly. Most people don't get that as they're not looking at the longer term impacts of what's going on right now.

It won't matter that the housing market has crashed, or that the tax code is revised to eliminate the home mortgage deduction. If I can't prove I own my home, I can't sell it and it's worthless. If the bank that says they hold my note can't clear title, then I've spent hundreds of thousands of dollars on nothing and have incurred a huge loss on ... nothing.

Me, I just want to get the hell out of this sh*tty state.

[don-o]

Watch out, the Admin Mods do not look at blog pimping in an overtly friendly manner.

Yeah. We gotta save plenty of bandwidth for Dancing and Teacher Sex threads.

[Roccus]

I bought my first place in ‘02. It had been land passed down through three generations and I paid cash, but I still bought title insurance. When the lawyer was searching the title, he found that there were two deeds that comprised my property and he combined them to one. When I received my first property tax bill, I noticed that the acreage complied with ONLY ONE of the previous deeds and NOT the total acreage of my present deed. When I went to the court house to get this straightened out it was discovered that the smaller of the previous deeds had inexplicably been “...just dropped.” I had that corrected in short order and my subsequent property tax bills have been correct.

The moral of this story is.....DO NOT TRUST LAWYERS.....DOUBLE CHECK EVERYTHING!!!!!

[bert]

Welcome aboard

[visualops]

That’s exactly what the “Bloggers and Personal” Forum is for (despite that it wasn’t he but DoctorZIn that linked his blog). So don’t complain when people do exactly the right thing. Good grief don’t make a fool of yourself. I actually wonder if your post was a sarcasm fail.

[jocon307]

This paperwork situation is not joke. I work for a law firm in NJ, we do mucho real estate work.

There was an article in The New Jersey Law Journal, which is the official weekly paper for lawyers, it publishes court notices, etc. A judge has stopped a foreclosure because nobody knows where the original docs are.

It was all a little convoluted so I asked my boss about it. He said you have to have the note, if you don’t have the note you don’t hold the debt, just like this blog post says.

It seems to me this entire situation could be about to get very worse, very fast.

I’ve always felt we haven’t been told the whole story on this housing market fiscal crises.

OK, loans were made to people who shouldn’t have been lent the money; prices were ballooning (for a variety of reasons); Las Vegas, Florida got way over-built, Cali is a mess due to property tax inequities, but still...but still....

How many loans, really? How did this almost crash the global economy, or at least the US banking system?

But, what if the same mortgages were sold MULTIPLE times?

I mean, is that the situation?

[jocon307]

LOL, I finally clicked through to the article. It’s about that exact case in NJ.

I shouldn’t laugh really.

[visualops]

Welcome to FR! Never mind the nit-pickers. Jim started a “Bloggers and Personal” forum precisely for this purpose, so folks could post articles and links to their personal pages and blogs. If you look in the upper right corner you’ll see that’s the forum you are in.

[sausageseller]

Watch out, the Admin Mods do not look at blog pimping in an overtly friendly manner.

Not true.

The ones on FR that hate blogers are the disruptor's.

The ones that complain and harass blogers for "blogpimping" cannot get over the fact that almost all those type of posts are COMPLETLY within FRs rules.

They cannot accept FRs rules for what they are and continue to act out in their childish ways.

[visualops]

Thanks for the ping!

[triumphant values]

I won't get into the "shredded" aspects of this, but having worked for a mortgage servicing company, they weren't "shredded" they were imaged and stored electronically.

No, they were shredded. As in a truck came by to the document facility with a commercial shredder in the back and they were ground up:

Fixing the paperwork won't be easy because many of the notes have been lost or even deliberately shredded. The Florida Bankers Association told the state Supreme Court last year that in many cases, "the physical document was deliberately eliminated to avoid confusion immediately upon its conversion to an electronic file."

http://realestate.msn.com/article.aspx?cp-documentid=26298395

Thousands of counts of perjury have been committed by sworn affidavits of lost note. But that was just the desperate bank's fraud to cover up other frauds at origination, underwriting, rating, packaging, assigning, tranching, servicing, etc., etc.

As I said, when are the frog marches starting?