Thursday, September 8, 2011

NEIL GARFIELD WITH LIVINGLIES SHEDS LIGHT ON 9TH CIRCUIT'S DECISION


9th CIRCUIT AFFIRMS MERS WITH INSTRUCTIONS ON HOW TO DEFEAT FORECLOSURE

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HOW CERVANTES COULD HAVE BEEN DECIDED THE OTHER WAY

SIGNIFICANT QUOTES FROM CERVANTES CASE, 9TH CIRCUIT:
  1. “In the event of a default on the loan, the lender may initiate foreclosure in its own name, or may appoint a trustee to initiate foreclosure on the lender’s behalf. However, to have the legal power to foreclose, the trustee must have authority to act as the holder, or agent of the holder, of both the deed and the note together. See Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 167 (Kan. 2009).” 16985
  2. The deed and note must be held together because the holder of the note is only entitled to repayment, and does not have the right under the deed to use the property as a means of satisfying repayment.” 16986
  3. the holder of the deed alone does not have a right to repayment and, thus, does not have an interest in foreclosing on the property to satisfy repayment” 16986
The 9th Circuit Court of Appeals (Federal) has issued a decision in Cervantes that will no doubt be cited by pretender lenders all across the country. BUT, if you read the decision carefully, you can see that there were errors in pleading perceived by the Court. Correcting those errors might change the result completely.
Beth Findsen, Esq., one of the foremost scholars and legal writers of the country believes that the decision points the way to a successful action against the use of MERS. “There is some helpful language among the detritus here,” she said. “The legality of MERS’ role as a beneficiary may be at issue where MERS initiates foreclosure in its own name, or where the plaintiffs allege a violation of state recording and foreclosure statutes based on the designation.  Para. 7″. The obvious point here is that if MERS is the forecloser or if the homeowner alleges that the designation of MERS violates state recording statutes or alleges a violation of state foreclosure statutes, the analysis would clearly be different.
She points out that the Court thought it important to state that “The plaintiffs’ allegations do not call into question whether the trustees were agents of the lenders. Para. 8″. This is an important signal from the Court of Appeals. They see the point. If the Trustees were agents of the putative lenders, then the analysis would also be different. How? Because if the trustees were agents of the pretender lenders who initiated the foreclosure, it would obviously  mean two things: (a) the trustees did not qualify as trustees because they were not serving in the capacity designed by the legislature to protect borrowers and (b) the more direct point would be that the implication would clearly point to the fact that the pretender lenders are forming entities for the purpose of designating themselves as trustees (through nominees — there is that word again).
Findsen also points out that the Court seemed to think it was important that”The plaintiffs have not alleged violations of Arizona recording and foreclosure statutes related to the purported splitting of the notes and deeds. Para. 8.” Here again. The Court is signalling us as to where to go with this. See the briefs and filings of Ron Ryan and Beth Findsen in connection with this issue. It relates to the UCC Article 3 and Article 9 which requires the OWNER of the obligation to be the one claiming the right to foreclose, not some holder or other agent. Lawyers have shied away from the Splitting the note and mortgage” under the simplistic notion that the general rule is that the note follows the mortgage and vica versa. It doesn’t actually work that way and the appellate court here is telling us just that. What is clearly happening is that the pretenders are foreclosing on the mortgage without (a) perfecting the lien in the first place and (b) without even asserting that any money is due them from the borrower. There are virtually no decisions anywhere that support such a notion.
To have the legal power to foreclose, Findsen says, the trustee must have authority to act as the holder, or agent of the holder, of both the deed and the note together.    She’s right and the 9th Circuit says she is right. The deed and note must be held together because the holder of the note is only entitled repayment, and does not have the right under the deed to use the property as a means of satisfying repayment.  Conversely, the holder of the deed alone does not have a right to repayment and, thus, does not have an interest in foreclosing on the property to satisfy repayment.
EDITOR’S NOTE: The only other thing I would point out is that we may be missing the forest for the trees. Why do we assume the original mortgage represents a perfected lien? We know that the money came from an undisclosed creditor, we know that the creditor was not named or even described, and we know that the creditor was  given a bond with many more terms than the note itself.
If you want a satisfaction of mortgage, you need to get it from the party who is the one to whom the money is owed — not some self-appointed agent. And if the self-appointed agent is claiming agency rights, then they must show the documents supporting that contention AND the facts to show that the documents were followed with respect to the conditions and restrictions for transfer of the loans. We already know that wasn’t done, and so we know that the claim of agency cannot be true. Thus the placeholder at the closing of the loan was merely that and no more. It can’t claim agency and it wasn’t the lender. Somebody explain to me how that could result in a perfected lien!

11 Responses

  1. Off-topic again, but pertains to FHFA suit and GSEs – Latest Mandelman – thought-provoking, as always:
  2. “…The Depositor owns the Trust — and while the Trust was performing – the Depositor, on behalf of the Trust would be the party to bring the action. However, these Trusts have now been brought back on parent corp. (to Depositor) balance sheets because the Trusts as “off-balan­ce sheet” SPVs — have been effectivel­y dissolved. The only tranche holders to remnants of the Trusts is the US Government or the Depositor (parent) itself. You should be preparing to demonstrat­e that the loan was not validly conveyed to any Trust (which they were not). Do this by requesting the Mortgage Schedule which should accompany the Mortgage Loan Purchase Agreement (MLPA) — and the MLPA cannot be an “intent” to sell — it must be validly executed and notarized (we know about those notaries). And, importantl­y, if MLPA and Mortgage Schedule can be proven, servicer must prove that all default payments have been paid to the trust on borrower’s behalf. If not, loan has been removed from the Trust with collection rights sold/swapp­ed to a Third Party. This is how you may win — they can not prove anything.”
  3. “We know that the money came from an undisclosed creditor, we know that the creditor was not named or even described, and we know that the creditor was given a bond with many more terms than the note itself.”
    “Thus the placeholder at the closing of the loan was merely that and no more. It can’t claim agency and it wasn’t the lender.”
    Is this widely known and available or is it only known to a few? How do you prove this in a quiet title or other case and prove the lien was not perfected? Where do you get the proof – what do you need to ask for in discovery? Is there any case precedent for this yet? Anything that can be an exhibit or brought to the judges attention why this should be disclosed or proven? Are investors suing over this?
    Where did the payments go for years – to the “undisclosed creditor”? (certificate investors as in sold forward or other than certificate investors as in table funded or not even funded as in refi wrap mod fraud?) – to the pretender who is a strawman or broker now sevicer only? – to the trust the pretender supposedly sold it to? – or sold or swapped out of trust or dissolved out of trust – where did payments go then? Who should payments be going to especially if the original contract Deed of Trust and Note is null and void? Then again if the lien is null or now non existent or paid in full why does the homeowner have to keep paying just “somebody” or “anybody” forever?
  4. All I wanted was whoever stepped up to the plate, to be willing to give me title to my home when I finished paying for it.
    That was not going to happen, because no matter who I paid, the Trustee would only give title to whoever had both docs.
    Talk about catch-22.
    He didn’t have enough power to foreclose, and he would not have given title to the one who pretended to have a right to foreclose.
    The title got transferred ‘among attorneys’, because the pretender or rather the law firm hired for it, decided to appoint themself trustee over the Grantor, and the original Trustee was also a client of that same lender, so they gave the title to the self appointed new trustee and allow it to happen, violating their fudiciary duty as trustee, unless a higher trustee (ahem…county attorney) already allowed all of this to take place and for who’s benefit, I have no idea.
    Goodbye all that money I spent toward home ownership. It was evident there was never an intent to allow anyone to own their home free and clear by payment by the way CEO’s and CFO’s of the banks handled the mortgage business.
    The wizard makes a lot of noise, but it’s a just a dog and poney show.
    I am pulling back the curtain and placing the blame on the ‘real’ flesh and blood man or woman behind the curtain playing with all the levers and orchestrating the theft of America’s landscape one property lot at a time.
    Trespass Unwanted, corporeal, life, free, in jure proprio, jure divino
  5. “In the event of a default on the loan, the lender may initiate foreclosure in its own name, or may appoint a trustee to initiate foreclosure on the lender’s behalf. However, to have the legal power to foreclose, the trustee must have authority to act as the holder, or agent of the holder, of both the deed and the note together. See Landmark Nat’l Bank v. Kesler, 216 P.3d 158, 167 (Kan. 2009).” 16985
    The trustee of the Deed of Trust on file, I had contacted him. I told him a company was demanding payment of the mortgage and did not have an assignment and ‘begged’ him not to give the title to my home to that company.
    His response was basically, ‘I don’t have to talk to you, I represent the beneficiary who has both the note and an interest secured in your home’. Or something similar.
    Point?
    Well by his statement he was not the holder. The Lender went away without assigning the Deed of Trust, so it would make it very difficult for him to be the agent of the holder.
    But the forest of this picture is this.
    Most trustees only had copies.
    They had copies of the note, because in the process of securitizing the note, the original note was destroyed.
    They had copies of the Deed of Trust because as companies came and went, it seemed these companies were willing to sell their client database information; but not likely to transfer physical documents.
    So the original Trustee only held title and would have needed a single holder to have both docs and we all know the Pretenders don’t have both docs so how could they pass both to a Trustee to do the foreclosing for them?
    That’s the forest.
    Thou shalt not steal.
    Trespass Unwanted, corporeal, life, free, in jure proprio, jure divino
  6. Carie, can you please provide your QWR? I have seen so many QWR variations , some of which go on for pages and include the kitchen sink. I imagine lenders see those and ignore them. But you obviously got a response from yours. Thanks.
  7. I have several questions I’m hoping someone can answer.
    I read the post about the FHA bringing a $196 billion lawsuit against 17 banks. My house is listed in 1 of the securitizations listed as a defendant in the lawsuit against ALLY f/k/a GMAC.
    1. Can/Should I write my Trustee notifying them of this? If I reference the case in my letter?
    I’m hoping to stop a foreclousre. The trustee is supposed to be a “neutral” party. Can they foreclose with a current lawsuit underway?
    I live in AZ. Would this violate any laws, statutes, etc…if I put them on notice?
    If these loans were misrepresented to the “investors” does that have any effect on me as a “borrower”?
  8. [...] Read More: 9th CIRCUIT AFFIRMS MERS WITH INSTRUCTIONS ON HOW TO DEFEAT FORECLOSURE [...]
  9. Speaking of B of A…
    “It was only a matter of time. A few weeks after every money losing firm in the US and the kitchen sink disclosed it would sue Bank of America in an accelerating attempt to salvage something through litigation, the worst case scenario for Brian Moynhian just got real. As of minutes ago, Norway’s Government Pension Fund, which is another name for its Sovereign Wealth Fund, has just announced it is suing Bank of America for mortgage fraud. Not only that but it is also going after Countrywide, obviously, but far more importantly, is also suing KPGM, the auditor on the Countrywide transaction, and, drumroll, ole’ Agent Orange himself.”
  10. BREAKING NEWS:
    Bank of America closing 600 branches and “laying off” 3,500 people…
    Wonder how those “former employees” will pay their FAKE mortgage…or even find another job in the sadly desperate economy that their former bosses helped to create…with fraud…
  11. attn. people going through “loan mod hell”:
    1. Look up FDCPA—-Fai­r Debt Collection­s Practices Act.
    2. Does your monthly statement say: “We are a debt collector attempting to collect a debt” ANYWHERE??­? And is it being “collected­” by a SERVICER??­? If so, then it is MOST LIKELY unsecured debt because of the fake mortgage FRAUD.
    3. The laws of the FDCPA allows you to send CEASE AND DESIST letters and DISPUTE OF DEBT—-forc­ing them to identify the true lender/cre­ditor that your monthly payments are going to—-not just a servicer/d­ebt collector—­-YOU MUST DEMAND THEY CEASE AND DESIST ALL ATTEMPTS TO COLLECT ON THE DEBT—-then say “I intend to settle this account with the ORIGINAL CREDITOR.
    4. Because of the FRAUD AT ORIGINATIO­N of your “fake loan” (if it was subprime refinance or purchase), they cannot come up with a MORTGAGE LOAN SCHEDULE OR A MORTGAGE LOAN PURCHASE AGREEMENT…­or even a ledger and balance sheet proving your payments are going to an actual, verifiable LENDER?CRE­DITOR.
    5. I asked for these things in a QWR—Qualif­ied Written Request—-l­etter, and they have stopped billing me for my FAKE mortgage…w­hich is actually like credit card debt—-coll­ection rights sold over and over…
    6. So, I am NOT an attorney, but you can challenge them and FIGHT BACK—-QWR and CEASE AND DESIST?DIS­PUTE OF DEBT—-it’s your choice…I choose not to pay for fraud on an unpreceden­ted scale…
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