Skip to comments.Litton Loan Servicing – Texas Mortgage Company Halts Some Foreclosures
Posted on 10/08/2010 3:50:16 PM PDT by Chunga85
Just a thought on all this
Are we looking at systemic widespread fraud in the entire industry?
Again, just a thought
Remember, they are not doing this to protect your interests
(Excerpt) Read more at 4closurefraud.org ...
Goldman Sachs owns Litton...blech.
By Christmas the public will be saavy enough to know that the real story , and the reason for all the fraud in creating all this bogus ownership documentation , is because ownership of the note (and legal right to foreclose) was pissed away years ago by the creators of the SIV’s.
I think it’s pretty clear to see what’s going to happen here with this foreclosure scandal:
The banks are halting foreclosure activity because they know all the mortgage assignment documentation are flawed and/or fraudulent, and halting foreclosure activity makes them look good to the casual observer.
However, this problem also threatens to blow up all these banks who now have worthless paper for properties they can’t foreclose on and couldn’t sell even if they were able to foreclose.
End result? Another “banking crisis that threatens to destroy our entire financial system”, which will of course require another massive bailout from the federal government to prevent The End Of The World.
So once again, you and I will be robbed by our criminal government to further enrich the equally criminal banksters who caused this mess in the first place.
An example is in Florida, a home built and sold in 2005 sold for around $135K in my area and today that same exact home can be purchased for $65K.
Huge difference even with the homes being overpriced in '05.
The Mortgage industry is now in the middle of a Catch 22.
The Law vs the pratice of Banks.
by failing to record, via electronic document recording and transfers, the mortgage has ceased to be. You now only have an UNsecured claim and the lien should be stripped off the home.
not “via recording” should have been “ instead choosing to record electronically and skip recording tranfers”,
To expand on what others have mentioned here, it’s an open question as to who owns the mortgage notes at this point. The mortgagors are supposed to establish pubic note ownership and public liens that can be utilized to take ownership of the property in the event of a foreclosure. Note ownership also establishes who has the right to receive the mortgage payments themselves.
Normally, such notes and liens are recorded as a matter of public record in ones local county or parish, and any time one is sold or transferred, then that has to be recorded as well. Eventually, when the note is paid in full, the lien holder records the fact that there is no longer a lien, at which point the property is owned free and clear by the owner of record. Thus there is a legally established chain of claims against the property.
The problem is that when these trillions of dollars of crappy loans were being generated and bundled into mortgage bonds, it looks like the same sloppiness in documenting the loans themselves was also applied to the note/lien paperwork and recording as well, which was ultimately a fatal mistake. It appears as if many (maybe most) of these notes and liens and their subsequent transfer were not legally recorded at all but simply noted in a national database called the Mortgage Electronic Registration System (MERS), as if that could somehow magically substitute for state recording requirements.
The problem is that if lien ownership cant be legally established, then lien payoff can not be established either. The bank which thinks it may own the note, cant establish that it does own the note. The mortgagees do not know if theyre paying their money to someone who can actually legally release the lien, which means they wont be able to establish a clear title necessary to subsequently sell the house. So, ultimately, clear ownership of the title is up in the air as well.
The whole thing is a giant mess, and most likely is a consequence of massive, massive lawbreaking, though its doubtful anyone will actually go to prison. It make take years to unwind this mess, leaving the entire housing market in total limbo during that entire time. Needless to say, this is a very bad thing for the economy.
From the stories I have read in the press, very little, if any, actual fraud has occurred. Some lenders have possibly failed to comply with some very technical foreclosure requirements. The only two such requirements I have read about are (1) a requirement in some states that foreclosure documents be notarized by a notary before whom the signer of the documents actually appeared (in Texas, this requirement exists for documents necessary to show title in real estate records), and (2) a requirement in some states that the person signing foreclosure documents have actually read the documents establishing a right to foreclose (no such requirement exists in Texas). Failure to satisfy such requirements does not harm the deadbeat homeowners (and certainly does not constitute fraud), but it does possibly harm future owners of the foreclosed properties. As they should, title companies are becoming reluctant to insure title to some homes that have been through foreclosures.
If a widespread problem exists in Texas, it is probably with a document often called an “Appointment of Substitute Trustee” or a document often called a “Transfer of Lien.” A Texas deed of trust (or mortgage) usually includes the appointment of a trustee to conduct a non-judicial (i.e., without a lawsuit) foreclosure in the event of a default. Foreclosures are almost always conducted by a different trustee (a so-called “substitute trustee”), but the substitute trustee must be appoiinted by the lender (i.e., the mortgage holder); and the appointment of that substitute trustee needs to be filed of record to show a continuous chain of title in the real estate records. Likewise, if the mortgage holder has changed, the chain of transfers to subsequent mortgage holders needs to be filed of record to show a continuous chain of title in the real estate records. If the signer of the Appointment of Substitute Trustee or any signer of a Transfer of Lien did not actually appear before the notary who notarized the document, then the document would not be proper for recording and any recording of it would be ineffective. It is hard to imagine this being a problem because it is hard to imagine a lender attempting to foreclose the lien of a Texas Deed of Trust without the advice of a Texas lawyer, but who knows? Any lawyer (whether from Texas or otherwise)who allowed this problem to arise should probably notify his professional liability insurance carrier and look for some new clients.
I just thought of another problem. If title to the mortgage has passed through the hands of “lenders” (such as trusts created to hold securitized mortgages) without the execution of recordable transfer documents and if some of those “lenders” no longer exist, then it might be rather hard to obtain curative documentation. It should not be impossible because some person or entity (or persons or entities) must own the mortgage, but I can easily see why a title company might be very hard, if not impossible, to satisfy.
“by failing to record, via electronic document recording and transfers, the mortgage has ceased to be. You now only have an UNsecured claim and the lien should be stripped off the home.”
In Texas (and I suspect in most states), the lien follows the debt unless the owner of the debt agrees otherwise), regardless of whether transfers (or even the mortgages themselves) are recorded. If the debt does not “cease to be,” to use your terminology, then the lien does not “cease to be” (again, assuming the lienholder has not agreed to release the lien). That does not mean that no problems exist. Some of those problems are described in my previous post.
This is the most important aspect of this situation. It is not just about deadbeats who may avoid foreclosure. Those homeowners who have continued to pay their mortgage to the loan servicing company and think they are secure may find they do not have clear title when they make the final mortgage payment. It may be years before they find they have a problem.
The mortgage ties the promissory note to the property they are two seperate documents. The documents must be updated to the letter of the law or there is no tranfer. It is analogous to an unrecorded quit claim deed discovered after probate.
the solution is to then declare 100% of all those promissory notes to be unsecured and absent of any lien on real property. The borrowrs who want to pay as if it was a credit card can continue to do so or can negotiate a better unsecured loan amount and rate.
The titles will be cleared and the market can reboot.
No "time-out" should be allowed enabling these frivolous, fraudulent affidavits to be withdrawn without consequence.
Outfits that hold the paper on "Error and Omission" policies will be assailed with ease.
Why not, they more often than not acted as alleged "Lenders" Agent".
Title Ins. Companies must be restless. Same for the property appraisers. A graph of median home prices from say 1900 to present would illustrate a huge anomaly beginning around 1994 like no other. Please explain your failure to recognize this anomaly Mr.alleged "Lenders" agent property appraiser. Under penalty of perjury do you admit or deny that while acting as alleged "lenders" Agent you were informed of the desired evaluation in advance? Ha!
I have court filings on a foreclosure sale with a very detailed hand written description of the home that included pictures.It was learned during the foreclosure "discovery" process it was a vacant lot.
A cottage industry will emerge with firms that specialize in attacking these insurance carriers.
Right up to Moody's et al.