Tuesday, August 9, 2011





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.
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20 Responses

  1. My son and I went to an auction to see what was happening. Three men came out from the trustees office on the sidewalk. They had some little paddle looking things. One would say Joe you can have this one, and Jake you take that one and you could tell they were pretending to bid and the same three people purchased all the mortgages. It was a fake sale and it was obvious. I told my son I am sure they never even paid a dime for these mortgages they just stole the house. The beginning bid was real high like 295,000.00 dollars so no one would bid. I am sure if someone followed the money trail they would find the houses were free to the bidder. I am just sure of it.

  2. Wait – in apology to Mr. Wray, MERS would be the culprit making all notes unsecured because MERS thought it could accomodate assignments not being done, which has led to fatally broken chains of title for the dot’s.

  3. Randall Wray said MERS stopped notes from having collateral. That is only true, imo, if MERS is the beneficiary, which they’re NOT. If they were the beneficiary, then of course the note and dot are fatally bifurcated. What stops the certificates from being mortgage backed-securities is the investors don’t own the notes so they can have no collateral. The path to the collateral,
    the mortgage or dot, is the note. The investors own the certificates which entitle them to payment streams – that’s it. If I own stock in John Deere, I don’t own the tractors and as far as I know, I have no path to them. The value of my stock is based on John Deere’s earnings and I think that’s all my stock attaches to. If John Deere liquidates, I may be entitled to some
    Someone else has to go after the note’s collateral, and maybe then the investors will each get their 49 cents, and that will terminate their payment stream on that particular piece of the pool. That’s why imo the investors are so hot. They have no right of subrogation, just like the insurers as far as I can tell, they’re stuck and at the mercy of the servicers even as to their 49 cents because of the servicers blown up foreclosure costs which are deducted from the payment stream / settling. The chances of receiving that payment stream on their investment were ‘exaggerated’. They may have spent 1000.00 to get that right, they got their fractional portion of the payment stream for 2 years – one hundred dollars? – and now must settle for 49 cents on what should have been a payment stream for another 28 years, or else effectively realized a return of their investment by early payoff, and not in an amt set by a hugely underwater foreclosure. I wonder how the alleged bid amount at f/c interplays with this.
    I’m more than willing to be wrong, right after someone explains how certificates may stand in for notes which have the collateral.

  4. @carie – regarding that huff post material. It looks to me like behind door no. 1 we’ve got MERS and the note and dot are bifurcated. Behind door no. 2 the dot’s are not enforceable because there is no chain of title for them. Someone, subject to proof, behind doors no. 1 and 2 may have an unsecured note.
    Banksters are presenting notes endorsed in blank and laying claims of entitlement to enforce them pursuant to the UCC. They also have an assignment of the deed of trust (sans a complete chain of title). But, they don’t own those notes despite their UCC entitlement to enforce, so imo, the note and dot are bifurcated. Not sure, but looks that way to me. And is a party who will not benefit from the sale of the collateral the creditor? No, he isn’t. The sad story is it looks like the party who should not benefit from the sale of the collateral is doing just that.
    Do we ever really know that a sec trustee even knows of the servicer’s legal actions in its name? Who do you suppose is paying for the litigation? It aint the trustee. MERS never knew of a lot of banksters’ actions in its name. Banksters were supposed to pay a fee to MERS to hide behind MERS (and that’s it), but how would MERS have ever known? They wouldn’t without the diligence as I said they can’t even spell. So now the banksters have shifted from MERS to the sec trustee. What happens to the money from the
    sale of the real estate to a new buyer after the foreclosure ‘sale’? Are they sending the investors 49 cents each in their next monthly payment stream

  5. The signatures the title company needs to insure title to start with are the autographs on each assignment of the deed of trust in the chain, and they’re not getting them, for one reason because they don’t exist.
    I can’t wait to see many, many suits alleging breach of fiduciary or in the alternative for breach of the covenants of good faith and fair dealilng against the alleged dot trustees. A trustee stands to get nailed for one or both when he does not assure himself he is acting for the true beneficiary of the dot. Aiding and abetting breach of fiduciary (aka third party breach of fiduciary) may also be lodged, imo, against the bankster who cannot provide sufficient documentation he had a right to tell the trustee to foreclose. To start, it it were me, I would ask the trustee for copies of all docs given to him which support his foreclosure actions. When he won’t fork them over (he won’t), I would file such an action for breach in state court and ask for an injunction while I’m at it. I would first name only the trustee for breach or the alt above, and then when he can’t prove he got the docs and when (before he filed the NOD against me), I’d add the bankster for 3rd party breach. These are opinions and this is just what I’D do.

  6. Older article, but L. Randall Wray is worth repeating (now that the banks are tanking):
    “In a series of pieces I have argued that MERS, a creation of the mortgage banking industry, has effectively destroyed the institution of private property in America. Ironically, MERS was created to facilitate quick and easy and cheap securitization of mortgages — what are called mortgage-backed securities. In fact, what it did was to eliminate any backing of the securities by mortgages. Of the total securitized asset universe, something like $7 trillion are (supposedly) backed by residential mortgages. However, MERS helped to delink the securities from the mortgages. At best, they are unsecured debt — there is no property backing the securities. What this means is that foreclosure is not permitted. As I have said before, it is likely that most or even all foreclosures occurring in the US are illegal seizures of property — home thefts. We are talking about 100,000 completed home thefts per month, with another 250,000 new foreclosures started to steal homes every month. Projections are that 13 million homes will have been “foreclosed” (read: stolen) by 2012.
    Worse, from the perspective of the banks, they’ve got to take back all the fraudulent MBSs, most of which are toxic.
    What does all this mean? In plain simple language, the banks are royally screwed. They cannot foreclose on the properties. Holders of the “mortgage-backed” securities can turn them back to the banks because they are actually unsecured debt. In previous pieces I have also explained why MERS’s recommended practice also violates US tax code — so back taxes are owed. And we know that the mortgages stuffed into the securities did not meet the “reps” of the PSAs.
    So, in short, banks have got to take the whole lot of toxic waste securities back. Trillions of dollars worth. The banks are toast. There is no cooking of the books that will turn this blackened toast back to bread.”

  7. From the S-3/A (filed March 2011) for Wells Fargo 1999 Trust (formerly Norwest Asset Securities Corp).
    Line 24,026: “Wells Fargo Bank has sponsored publicly offered securitization transactions since 1996. Wells Fargo Bank and it affiliates have originated residential mortgage loans, commercial mortgage loans, auto loans, home equity loans, credit card receivables and student loans. Wells Fargo Bank and it affiliates have also served as sponsors, issuers, master servicers, servicers and trustees in a wide array of securitization transactions. While Wells Fargo Bank currently does not rely on securitization as a material funding source, the Depositor’s securitization programs are a material funding source for Wells Fargo Bank’s residential mortgage loan production.”
    Line 27,183: “Shortly after the funding of a loan, various types of loan information are loaded into Wells Fargo Bank’s automated loan servicing system. Wells Fargo Bank then makes reasonable efforts to collect all payments called for under the Mortgage Loan documents and will, consistent with the applicable Pooling and Servicing Agreement and applicable Underlying Servicing Agreement and any pool insurance policy, primary mortgage insurance policy, bankruptcy bond or alternative arrangements, follow such collection procedures as are customary with respect to loans that are comparable to the Mortgage Loans. Wells Fargo Bank may, in its discretion, (i) waive any assumption fee, late payment or other charge in connection with a Mortgage Loan and (ii) to the extent not inconsistent with the coverage of such Mortgage Loan by a pool insurance policy, primary mortgage insurance policy, bankruptcy bond or alternative arrangements, if applicable, waive, vary or modify any term of any Mortgage Loan or consent to the postponement of strict compliance with any such term or in any matter grant indulgence to any borrower, subject to the limitations set forth in the applicable Pooling and Servicing Agreement and the applicable Underlying Servicing Agreement.”
    comment: So they are telling the prospective investors that they can do pretty much anything they want to in respect to foreclosure, modification, servicing, or fee collections.
    However, they WILL foreclose on you at all costs. No intent to modify ANYTHING (other than YOUR address).

  8. And if the notary on a such a substitution of trustee is not notarized
    “Tom Brown, secretary of Joe Mobster co. as limited power of attorney for ABC Trustee”, or
    “Tom Brown, secretary of Joe Mobster Co. in its capacity as limited
    power of attorney for ABC Trustee”
    something akin to this, the notary is deficient and the document may fail for this reason alone. That’s called start over, bankster. imo. Jurisdictions may vary on deficient notaries. That’s one of the reasons attorneys tell us these cases are difficult. There are a lot of things to consider, like differences in
    jurisdictional determinations on something as seemingly ‘off’ as a
    deficient notary.
    If you are in a title-theory state anyway, and a sub of trustee were done by Bankster #506 prior to the proper (key word) assignment of the dot to Bankster #506, the substitution of trustee is no bueno, because of course Bankster #506 had no authority to sub the trustee.

  9. Mr. G said:
    “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 the absence of that alleged limited power of attorney (as in recordation), imo there is NO authority for the alleged limited power of attorney to act.
    It is only recordation (or other acceptable notice) which gives notice to not only the borrower but anyone entitled to notice evidence of its existence.
    Proving the existence later does not cut it, also imo.
    Why aren’t people saying, “this substitution of trustee is signed by ABC mobster co. in its alleged capacity as limited power of attorney for said trustee and I see no documentation of that alleged relationship”? May I remind you again that if you tried to sign a deed, say, at closing for your spouse or neighbor at closing on an alleged poa, the title company would tell you “NOT”. They would have to see and approve the poa, believe me. Been there, done that.
    The title company would record the poa right ahead of the dot or mortgage which was executed by a poa. Check your recorder’s office – you’ll see them after some digging.
    This is NO different. The only thing which is different is a court’s perception that it must be okay because they’re doing it! This is a shameful commentary on those courts because it’s 101. It’s not okay, not at all.
    Eventually, when forced, they will produce these limited poa’s, which are probably executed as ‘blanket’ limited poa’s granting authority on demand mol. Great. Make them produce them sooner than later because until they do, their authenticity may not properly be presumed. (I actually see no provisions in the dot’s which authorize a trustee to delegate this duty to anyone, including a poa. fwiw.)

  10. @carie – the real finger pointing is beginning: aig v boa. Now that you’ve helped (or MADE as the case may be) me see that subprime loans when wrapped appear to be ‘double-sold’ to investors, I hope someone will pursue this, from any angle or any side. Still don’t know and am not weighing in on the false default issue, even tho it wouldn’t surprise me.
    If the original loan, say 100k, which was wrapped into the ‘new’ deal had already been sold to investors, I’m putting my money on the bankster sold the wrap as ‘new’ money to investors in securitization. Only 50k was
    new money. Do you understand this? Does anyone here?I f this were done
    routinely on sub-prime refinances with cash-out, we are talking a serious amt of money double-sold. 10 billion hardly seems like it would cover just this bs on sub-prime wraps. I am taking your word for it that subprime loans were wrapped, because that’s the transaction you have actually described.

  11. so if you are a customer, why, when things go bad for you,
    why are you treated like dirt, a scum bag who doesn’t pay his debts. Question is debt to WHO? Who actually lent the money or credit?
    Banks are just brokers who get paid in full for marketing a loan or credit line to you (Credit Card), they paid in full from Investors in ABS and MBS.

  12. and I might add you are a CUSTOMER of the banks and Wall Street fronts. Yes, a customer. Figure that one one out.

  13. The stock market is NOT the economy, and they say the economy is 70% consumer spending. Something not right with that line of thinking.
    Oh, but they got you involved with that line of thinking by getting you to invest in 401k’s and IRA’s. Jokes on you, Mr Joe Six Pack who is actually more moral than these people in Congress and people running Wall St and the Banks.

  14. @A-Man
    comment from one of your links, worth repeating:
    “When you’ve seen one bank, you’ve seen ‘em all. Banks are the scum of the earth, the dregs of humanity, the bottom of the barrel, and the sewers of world trade. There is nothing they will not steal, and no limit to the funds they will spend to defend their privilege to do so. Unmentioned in this phony “debt and deficit” debate is that the United States only pays interest on loans, some of them decades-old, and will never touch the principal, meaning interest payments forever and a guaranteed cosmic income for these billionaires, who do not have a country, but a bank.”
    …………………who do not have a country, but a bank.”
    All you morally correct people out there reading this should realize there are no boarders with Wall Street and the banks. They are all global and you think your Bank of America or JP Morgan or Citi is America. I got news for you. They are not all for USA. They are all for getting fees and trapping you. How’s that for being a GOOD customer?
    So, will you bank with your local credit union or will you continue to pay the CEO’s, traders and upper management millions and millions of dollars collectively of your, yes, your hard work?

  15. “On Monday, AIG announced that it was suing Bank of America for more than $10 billion, alleging that BofA, and its acquisitions Merrill Lynch and Countrywide Financial, participated in “massive fraud” when they sold mortgage-backed securities to AIG between 2005 and 2007. AIG says that more than 40 percent of the mortgages were presented as being more secure than they actually were.
    A spokesman for Bank of America has countered that AIG “is the very definition of an informed, seasoned investor” and should be held responsible for any purchases it made.”
    Yup, “massive fraud’—NO MORTGAGES—here we go!!!

  16. from Neil:
    “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.”
    No “funding” in sub-prime, Neil…when are you going to write about that??? Why are you ignoring the truth???
    “The Depositor — is (or was) the “investor” to the collection rights. What was securitized in bogus trusts –were the cash flows to collection rights.
    Once a loan is written-off/charged off — that loan can no longer be paid by borrower (unless original creditor does reverse accounting entry — which they do not).
    Collection rights do not have to be “funded” — they are simply a right to collection transferred by assignment — not a “NOTE”. However, all was presented to borrowers has a new NOTE/loan. This is why no notes were never validly sold to trusts — there was no Note to a mortgage to transfer!!”

  17. Sorry—from The A Man’s link!

  18. from your link, usedkar—
    “There’s a growing list of mortgage-securities holders who contend the loans backing the bonds were misrepresented”
    Yes, misrepresented as “mortgages’ and “loans”…and they are finding this out…

  19. The NV SC recently decided two cases which involved foreclosure and mediation.
    Both cases have imo several important decisions. Everyone might find this one interesting in regard to modifications alleged to be within the power of loan servicers:
    “…At oral argument before this court, respondents’ counsel stated that they represented all of the respondents named in this case at the mediations, but they did NOT dispute the mediator’s finding that respondents needed additional AUTHORITY FROM INVESTORS to agree to a loan modification.”
    The court ultimately found that not having a party at the mediation who could make decisions as to modification was bad faith.
    This case is Pasillas v. HSBC Bank USA
    27 Nev. Adv. Op. No. 39
    and can be read here:
    Services don’t have that authority. If they did, it’s likely the old note would be returned and a new note stating the modification terms would be executed.
    They can’t do that, though, for a number of reasons and for one thing, that new note would have to state the payee’s name (think about that!) That’s why when a ‘modification’ is done it is subsidiation, with the servicer contracting with the borrower to subsidize the borrower’s payment. The note itself is still subject to either holder or hidc status. Some people think
    that the servicer wants to get the borrower to affirm the debt by way of the
    ‘modification’. I don’t know if it legally does that or not.

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