Skip to comments.Court: Busted Securitization Prevents Foreclosure
Posted on 04/18/2011 3:40:01 AM PDT by Neidermeyer
On March 30, an Alabama judge issued a short, conclusory order that stopped foreclosure on the home of a beleaguered family, and also prevents the same bank in the case from trying to foreclose against that couple, ever again. This may not seem like big news -- but upon review of the underlying documents, the extraordinarily important nature of the decision and the case becomes obvious.
No Securitization, No Foreclosure
The couple involved, the Horaces, took out a predatory mortgage with Encore Credit Corp in November, 2005. Apparently Encore sold their loan to EMC Mortgage Corp, who then tried to securitize it in a Bear Stearns deal. If the securitization had been done properly, in February 2006 the trust created to hold the loans would have acquired the Horace loan. Once the Horaces defaulted, as they did in 2007, the trustee would have been able to foreclose on the Horaces.
And that's why this case is so big: the judge found the securitization of the Horace loan wasn't done properly, so the trustee -- LaSalle National Bank Association, now part of Bank of America (BAC) -- couldn't foreclose. In making that decision, the judge is the first to really address the issue, head-on: If a screwed-up securitization process meant a loan never got securitized, can a bank foreclose under the state versions of the Uniform Commercial Code anyway? This judge says no, finding that since the securitization was busted, the trust didn't have the right to foreclose, period.
Don’t forget the CRA...
“Dont forget the CRA...”
Of course anyone who is knowledgeable of the industry, knows the CRA has some blame for what happened.
If you do not make payment arrangements it is over with. I got involved in car finance for a few years, every time I got a bankruptcy notice I would hang it on the wall, twenty four hour after the hearing I would repo the car. I was always getting those calls I filed bankruptcy you cannot get my car. Always a good laugh.
Popular delusions and the madness of synthetic securitization.
LOL, and you have the little thing called intent, the lenders never pulled a gun on anyone and forced them to sign anything.
Laws are for other people, certainly not the ultra-rich country club set from Wall Street.
Well that’s great, but saying that people should be able to get out of their mortgages doesn’t square with that
People aren’t “getting out of their mortgages” ,, the mortgages were invalid from inception , they don’t really exist according to the TILA laws , they weren’t mortgages they were undisclosed securities contracts with hidden parties , they cannot and will not stand.
When people start realizing that the foreclosing entities are the ones that have been getting the “free house” you’re so upset about ,, that they NEVER LENT THE MONEY ,, then your attitude will change .. you’re just conditioned to accept the banks argument because “they’re the bank” ,, WELL ; THEY”RE NOT THE LENDER ,, the way the Wall Streeters constructed this scam is to ensure thatthey through control of the servicing and trusts would always be between the lender and borrower ... SO THEY COULD CONTROL THE INFORMATION...
I do quite a bit of bankruptcy law ..... to the mortgage company as a secured creditor.
Maybe you should update your skills ,, if the mortgage is securitized list it as an unsecured assett and make the lender prove chain of title .. your claim about a lack of case law in the way you stated it is valid but deceptive ... MANY people have taken that route and won as it is easier than going QT outside of BK.
The failure of to disclose the real lender is a violation unto itself leading to various remedies and consequences especially as to perfection of the lien, and providing the context for a transaction with clear title. But the intentional act of FALSELY stating the name of the Lender without any reference to disclosing a principal or under ordinary principal agent rules, and the failure to provide either the real lender or the borrower with the documents (some of which should have been recorded in the title registry in the country recording office) creates a fatal defect in perfecting a lien to the point where the note is a nullity and the mortgage or deed of trust is nothing more than a wild deed. Any subsequent foreclosure sale in which a deed is used on a credit bid would similarly be a wild deed subject to either being ignored as void or voidable by judicial action.
They signed a valid mortgage at their closing.
The only question with some; is who is able to foreclose due to the mortgages being sold.
Horace - just don't seem like a typical 'Bama name. Are they even citizens?
You do not have a clue as to what you are talking about. And, when the courts eventually throw this nonsense out, you will be claiming the court is in the bank's pocket.
Sound a little like what is going on in the mortgage business?
It seems that we have intent by the otrgage companies to evade taxes by not using the established procedure to record mortgages. By using appraisers that would go along with any asking price, the banks mislead borrowers into thinking they were paying a reasonable price. On the other hand, the borrowers asked for mortgages that they couldn’t afford. It seems that almost everyone involved was part of the problem.
It seems that we have intent by the mortgage companies to evade taxes by not using the established procedure to record mortgages. By using appraisers that would go along with any asking price, the banks mislead borrowers into thinking they were paying a reasonable price. On the other hand, the borrowers asked for mortgages that they couldn’t afford. It seems that almost everyone involved was part of the problem.
Sounds like you may have lost your home - if that is the case you probably paid too high a price based on your ability to make the payments.
I say this based on the emotion apparent in your reply.
The painful fact is, the value of an object is determined by the buyer and seller at a point in time. Circumstances change - and willing and able buyers are not always plentiful - when that is the case - prices fall.
When buyers are eager and abundant - prices rise. Neither I nor anyone else can predict with confidence rising or falling prices of objects.
Please take a class in macro economics - it may help protect you from paying too much in your next major purchase.
Who, that's the problem - there ARE NO ASSIGNMENTS. MERS was the responsible party for failing to do that. Anyone who claims to be an assign, a holder in due course, has to prove they have standing - that's a problem also because the chain of assignment is lost and cannot be "reconstructed" without unwinding a mess of MBS's and by violation of the MBS Pooling, subjecting themselves and investors to millions in taxes and penalties.
Some loan servicing banks will walk away before risking the chance of having fork over millions to establish that chain.
You really should follow the works and advice of Adam Levin and excellent defense foreclosure lawyers like Tom Ice, Carol Asbury, Matt Weidner, Lynn Szymoniak, Nick Wooten, Gary Blackburn, and Max Gardner III.
I'll let their works testify for themselves without "making up stuff".