Posted on August 8, 2011 by Neil Garfield
TRUSTEE LIABILITY FOR DAMAGES MIGHT BE THE NEXT MAIN THRUST OF HOMEOWNER LITIGATION
Anyone familiar with the writing on this blog knows that I have grave reservations about the so-called auction. My opinion is that in most cases there was no auction, there was no sale, nothing was paid and the issuance of the Trustee Deed is pure fraud, breach of fiduciary duty and breach of statutory duty — particularly when the name on the deed differs from the so-called “bidder.”
In this video clip which I took from the comment section of this blog it is clear that some guy in jacket merely stands there, as trustee, and despite his obligation to remain fair and impartial with regards to both the borrower and the “lender” he does neither. On behalf of an entity OTHER THAN THE NAMED LENDER, the Trustee in Missouri “opens the bidding” based upon some instruction from a third party who is not even in the title chain. Usually there is no bidding at all. In fact, usually nobody from ANY ENTITY is there to bid. And yet the Trustee records a sale and issues a deed.
In olden times Trustees were not substituted and didn’t need to be. They would simply send the notice of default and notice of sale and if the borrower had an issue with the default, sale or amount demanded, the borrower would say so and the trustee would make sure all the ducks were lined up before he went ahead with the sale.
Of course now the Trustee is always a “Substitute trustee” by virtue of a document that is most probably (i.e., on the plus side of 95%) likely to have been forged, fabricated and improperly notarized on the orders of entities that had no authority to have or cause any involvement in the first place. Such substitution of trustees are “backed” by a limited power of attorney that is considered in most states to undermine the authority of a corporation and therefore must be strictly construed and proven clearly and convincingly (i.e., more than a preponderance of the evidence).
In any auction, by definition, there must be a bidder present in the legal sense. The Trustee therefore cannot serve as the agent for any bidder in most states, which require by statute that the Trustee perform due diligence as to the debt, holder, enforcement, title record etc. The “pull-down title report” that was always used prior to a foreclosure sale has been eliminated in the new scenario of mystery guests who “appear” merely in concept at the auction, so they can say that they were not really doing anything wrong because they were not even there.
Now the Trustee does no investigation because if he did, he would be required to ask questions. Performing the due diligence that Trustees always performed before the modern securitization era, would reveal that there are inquiries that need to be made regarding the creditor identification and the authority of the servicer or whoever sent instructions to the Trustees. Of course the Trustee person is not concerned with any of that because he works for an entity that was created by a bank who will later claim to be a creditor.
Thus the appearance of a “Trustee” is satisfied in form when in fact the entity and the person assigned are not Trustees as defined by the statute. They are not Trustees because they are the employees of the same entity that intends to take the property by a silent bid process that is illegal in some states and subject to review in others. This “substitute trustee” is taking his orders from a bank or non-bank servicer instead of taking his orders from the legislature who passed statutes specifically designed to protect the borrower and prevent the statute from being struck down as a denial of due process.
The amount of the “opening” bid announced by the Trustee usually bears no relation to the amount of the debt. It can be more or less. Nobody tenders a note or cash to the Trustee at any time. It is like the original closing where the loan is funded from a third party. The actual closing between the borrower and the loan originated has no consideration because the originator is not the lender or creditor, even for a second in time. Thus you have a non-sale resulting in a faulty, defective or void (wild) deed at an improperly conducted auction by an unauthroized “Substitute Trustee.” But the face of the deed looks right, and for many judges, that is enough. The same is true for the original closing. Neither deed appears to be valid once you scratch the surface.
Dan Edstrom, the senior securitization analyst for LIVINGLIES, has said that we have passed the foreclosure crisis and moved into an even more pernicious crisis — one of title. Because the 100 million transactions that have occurred on property wherein there claims of securitization made on or off record all have the same defects. Thus even if you bought your house fair and square and paid cash, you could find yourself in the middle of a foreclosure or, when you go to sell your house, you might find you cannot deliver marketable title. The title companies know this and are well-prepared for the claims denial process.
This TITLE CRISIS is the one that can’t be fixed by backdating documents, fabrication, or forgery. It can only be fixed if you go back to the point of origin and get either a signature from the affecting homeowners and securitization parties who claimed, on or off record, or if you get a court order declaring the status of the title. In my opinion you need both. But a signature from all the record homeowners in the title record would probably give enough cover for title companies to issue title insurance.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor,Mortgage, securities fraud Tagged: | Auction, bankruptcy, BID, borrower, countrywide, creditor,disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee
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