I am torn between my sympathy for those who are about to lose their homes through foreclosure and the injury I see to the rule of rule and the economy itself in the way foreclosure proceedings are being challenged and processed. People are angry with the banks and for good reason, but it is important to distinguish the granting of mortgages from what was done with them once granted. The banks may have been complicit in approving bad loans, but the borrowers must accept some responsibility.
In all fairness, besides discovering that they could not meet the payments, defaults have occurred for a number of other reasons: the value of real estate has dropped; homeowners have lost their jobs or their income has been reduced; balloon payments could not be met; or other unanticipated circumstances have occurred. I watch with some misgivings the army of lawyers lining up to defend foreclosure proceedings, some by taking large fees or second mortgages on the very houses being foreclosed. (NY Times 11/62010 -Taking on a Second Mortgage to Pay the Foreclosure Lawyer)
The media is full of revelations about the robo-signing of documents supporting foreclosures, and the practice is subject to numerous investigations and hearings. I have watched the video-taped depositions of bank employees admitting to verifying defaults with absolutely no personal knowledge of the facts. Of course, sworn testimony before a court must be truthful, but we have to be careful in deciding what renders it untruthful. It would be virtually impossible in any bank (even in those in which the mortgage remained with the issuing bank) for one person to know how much was loaned and precisely when and how much was paid on account. In this day and age, all of that information comes via computer printouts -- not personal knowledge. So verifying that a mortgage is in default and the amount due is never based upon personal knowledge, but rather a search of the records and reliance on those records kept in the ordinary course of business.
Foreclosure proceedings are not criminal in nature, in which a defendant can sit back, do nothing, and require the government to prove its case. These are civil proceedings and the borrowers and hopefully their lawyers know whether or not the mortgage is in default. To oppose the foreclosure, when both the borrower and lawyer know the mortgage is in substantial default, to my mind borders on the unethical. If indeed there are valid defenses to foreclosure -- mortgages not in default, wrong property designated, etc. instances which I suspect are very rare, they should be pursued with diligence.
On the other hand, the holder of the mortgage must prove ownership, and that information is solely in the hands of the banks and their assignees. That is not information a borrower would have, and the borrower (defendant) has an absolute right to know that a suit for foreclosure is being conducted by the current holder of the mortgage. That is a defense made in good faith and worthy of pursuit. I have reservations about the good faith of challenging the existence of a default with full knowledge that it exists, but none about insisting on proof of current ownership and the right to foreclose.
Despite my sympathy for all those who may lose or have lost their homes, I am concerned with the stability of contracts, the rule of law, if they are abandoned at this fragile time in our economy. Any and all assistance possible, such as modifications, should be afforded borrowers so that they can remain in their homes, but failing that, our legal system and, in turn, our economy, cannot be jeopardized by excusing persons from performing under their written agreements when they know that they are in default. The person who buys a TV on time, but is aware that she or he is in default, should not be able to keep the TV and not make any further payments just because evidence of the debt and default comes from a computer rather than personal knowledge.
Even defending foreclosure proceedings for the purpose of delay might seem like a laudable and noble goal, but the reality is that by doing so we are not retaliating against those mean banks that got us into this, but the shareholders, some of whom are homeowners themselves, who invested in these gift-wrapped mortgage packages only to find when opened -- that they were worthless junk. Let us do everything we can to aid those in danger of losing their homes through foreclosure, but let us not sacrifice the rule of law and the sanctity of contracts in the process.
2008, I fell off my roof while cleaning gutters. I became disabled. Before missing a payment, I called and wrote letters to Wachovia who had just taken over my original loan from World. I begged them to take partial payments.They would not.
My income is limited but I can pay a reasonable payment. I have been declined 4 times for a mod.I am not able to pass the NVP test although they say, I am very close to passing it. Last Friday, I received the Default notice.This situation will cause me to be homeless as I have no family. I just needed a small reduction in my payments. And by the way, did any of my tax dollars apply to saving them?
And I believe the bank will be paid by their Mortgage Insurance for any loss from the sale of my beloved home.I can not even eat anymore much less sleep.
Now Wells appears to own my mortgage.They know I am disabled, an older female and instead of allowing me a modification, Wells Fargo is throwing me out of my little wood cottage to live under a bridge. I simply can not believe this is happening to me.
Could it be that your comments and conclusions are as a result of a historical understanding of the American Mortgage business which has changed significantly? Have you ever that lawyers have a poor understanding of business? I am a business person.
What is different today from twenty years ago is the fact that the American mortgage business has been taken over by the Wall Street "Players" of the GSE BUSINESS MODEL, meaning 94% to 99% of all mortgages are sold to the GSEs (Fannie, Freddi, etc.) , daily . This business Model has been called by all creditible scholars "fatally flawed", "hoplessly conflicted", "poses a systemic risk" and "simply does not work". Despite these conclusions, our esteemed congressional people have bet the US Treasury in guaranteeing the MBSs of the GSEs in exchange for complaince with the GSE Guidelines which are designed to protect the saftey and soundness issues inherent in the GSEs MBSs .
The judicary have either been unwittingly involved or wittingly seduced by the significant court fees involved. You cannot be a part of a business Model that simply does not work (for a million reasons if you have to get past the first reason, ie the government guarantee).
I think thus far business man George Soros said it best in a 2008 op-ed in the WSJ:
http://online.wsj.com/article/SB122360660328622015.html
Lawyers and Judges must know that engaging in an enterprise fatally flawed from day one, is actionable.
There is no “army of lawyers lining up to defend foreclosure proceedings.†The sorry state of justice is that 95% of residential mortgage foreclosures are uncontested. Only the exceptional foreclosure defense prevails. Overwhelmingly, people in need of counsel cannot afford representation. The NY Times article you cite portrays the tiniest sliver of the foreclosure defense bar and is no more representative of that bar than a judge convicted of accepting bribes is representative of the judiciary. However, there is an army of lawyers representing the banks. These bank lawyers enrich themselves by masquerading as officers of Mortgage Electronic Registration Systems, Inc. and by fabricating mortgage assignment documents to commence foreclosures.
Your comments are a measure of how well the financial institutions have controlled the message delivered daily by our media and our elected officials. Thanks to the efforts of the foreclosure defense bar and others, the message is changing. We've got to keep chipping away until the corrupt enterprise shatters. Your piece is testament to how much work remains to be done.
Mark J. Malone
Here’s another analogy to clarify my position of the subprime foreclosure fiasco.
It is akin to - authorities learn a high-profile drug dealer is working at a substance abuse rehab center. In fact, [they learn] the drug-dealer is posing as a doctor and discreetly repackages his drugs as medication. Consequently, these patients never recover thus repeatedly fall-back to their street drugs. A few patients figure out the doctor/poser’s scheme and manipulate the system for their own profit. Yet, instead of arresting the high-profile drug-dealer, authorities decide to arrest the patients.
SAYING THAT TO SIMPLY SAY; - everyone is aware these folks have a certain problem. Most everyone agrees, including those in foreclosure, a debt owed must be repaid. The debate is not about the debt owed.
The debate is about the hypocrisy & contradiction by our Gov & courts imposed upon borrowers deliberately sold defective loans products.
Hypocrisy - because laws are NOT equally applied - in that THOSE VERY SAME LOANS governed by contract (PSA and other agreements) & applicable State & UCC laws - are no-longer secured by the properties. Lenders “waived†their right to repossess. Therefore lack LEGAL CAPACITY because those NOTES were NOT properly Transferred to the Trusts. They are literally giving the violators a FREE HOUSE.
Contradiction - because our Gov & courts are undeniably thwarting the PEOPLES RIGHTS of DUE PROCESS & permitting ILLEGAL SEIZURES of private property.
IMHO - this degree of betrayal will reap very serious consequences.
You might want to inspect your own mortgage, judge, (if you need one) and see if MERS appears on the title...you might just have a problem of your own!
Lawyers who defend the helpless and downtrodden, honestly and truly, have a place reserved in heaven. You, judge, apparently do not understand the concept of the law to serve people, not corporations.
Like the foreclosure plaintiffs and their attorneys/"mills" do, I could get your mortgage document from the public record to create an "original" mortgage document, "original" promissory note (with bogus endorsement(s)), and bogus assignment of mortgage (backdated and/or dated after the case is filed, from a defunct business, etc.). With these documents, file a foreclosure action against you--it doesn't matter if you're current on your mortgage payments--go for summary judgment in the rocket docket courts (judicial and non-judicial) and WIN in the current climate of FRAUD AND CORRUPTION!
How do you feel now Judge Sarokin?
The fact of the matter is - THESE foreclosures EXPOSED the seriousness of the Banks illegal activities.
The reality is - they've created a monster that CANNOT be put back into its box. The average income earned is not nearly enough to support the mortgages many folks have. Ironically, that SHOULD be a FLASHING NEON SIGN that something is seriously WRONG with the LOAN PACKAGES not the borrowers. 20-million borrowers did not wake-up within a few yr period and decide to defraud the BANK.
As you rightly point out - that is WHY we are seeing the bogus assignments - etc.
Good reply... I sincerely hope the good-judge will research this topic futher and continue writing on it. I believe anyone with integrity after seeing what is truly happening will be shocked & appalled.
http://www.dailyfinance.com/story/credit/bank-of-america-mortgage-document-errors-trouble-countrywide/19728402/#gcp_comments%5Bp%5D=4&gcp_comments%5Bs%5D=new
There is more to this than what has been written and that is:
1. IRS statutes 856-859 which govern REITS. Banks are prohibited from being trustees for a REIT. Therefore The Bank of New York in this case could not have been a Trustee.
2. Any bank that did not transfer the property by correct title measures committed fraud. They sold imaginary securities.
3. The IRS statues also demand that the REIT manage all their properties and mismanagement carries fines. It was the REIT's business to make sure its investors had their collateral secure. Since 1999 the loans have not been sold whole; one loan to one REIT, but piecemeal as Derivatives.
Moreover, MERS is not named as a Trustee on SEC files by any REIT and can not qualify as a Trustee anyway.
4. This goes beyond the issue of ownership. The really big issue is value. The banks, to be able to dump their loans used valuations instead of appraisals, which prohibit the use of distressed sales. The banks are libel for the entire devaluation of property since July 2006. The REITs owe the United States government taxes on all the illegal sales, i.e. the difference in the value on July 1, 2006 and the date of sale.
I really think all those furtive airport meetings between Geithner and the Chinese leaders may be about this "situation" and not currency values. You can discuss that over the phone. I suspect Geithner has two masters; the Federal Government and the global financial elite.
There also was a story last month in the Washington Post about the fact the New York Fed is asking the Bank of America to pay back, "buy back" the uncollateralized loans.
They are trying to legitimize ownership by just giving BoA the money to buy loans they already own because they fraudulently never transferred them . They should be suing the banks for criminal fraud. The REITs and the SEC knew the rules not only about transferring ownership but also the fact that banks cannot be a trustee and, therefore, cannot handle any business of the REIT.
How many heads will roll of those who turned a blind eye to this global American made fraud? NONE!!!
8) FDCPA –Fair Debt Collection Practices Act violations - massive fraud by the servicers 9) TILA – Truth In Lending Act violations - even greater fraud on the paperwork. continued....
Here's my quick take.
The Chinese were the main buyers of the uncollateralized securities and stand to loose the most in the mortgage collateral fiasco. And, the Chinese have always been the power behind the big nothing North Korea. Do you think that it is possible that the hostilities are a threat from China over making sure the resolution of mortgage title ownership goes their way? Either way they do not loose money. The loses remain with the American real estate owners and State governments?
I really think all those furtive airport meetings between Geithner and the Chinese leaders may be about this "situation" and not currency values. You can discuss that over the phone. I suspect Geithner has two masters; the Federal Government and the global financial elite.
There also was a story last month in the Washington Post about the fact the New York Fed is asking the Bank of America to pay back, "buy back" the uncollateralized loans.
They are trying to legitimize ownership by just giving BoA the money to buy loans they already own because they fraudulently never transferred them . They should be suing the banks for criminal fraud. The REITs and the SEC knew the rules not only about transferring ownership but also the fact that banks cannot be a trustee and, therefore, cannot handle any business of the REIT.
How many heads will roll of those who turned a blind eye to this global American made fraud? NONE!!!
What makes it so apalling is that these lenders continue PRETENDING they will eventually modify - when in fact, their contracts prohibit modification OR the Servicer is so severely penalized by the mod - it will never happen.
Most folks don't realize the Trust holds the Servicer liable for the ENTIRE HIT regarding a mod. A simply 30k principle reduction complimented with a "fixed-rate" adjustment of a few percent - can easily equate several 100k penalty to the Servicer. IMHO - the servicer should be forced to EAT it anyway.
The SECRET reason is because Servicers do NOT report the defaults. They carry it on their books to keep the appearnce of everything is dandy while their collections agents pound the borrower into poverty until they are ready to abandon the house. Then they scarf it up for pennies on a dollar and POCKET the profit... Yep - crime breeding more crime.
If after reading this list of legal issues that homeowners face with virtually no assistance other than a few friends and support groups and that the "Rule of Law" is being thrown out in court procedings I would hope this would stimulate you to go out and serve your fellow man by offering some legal advice through some of the many good assistance for homeowner sites out here like ours. http://www.facebook.com/group.php?gid=126549077390069 Homeowners Against Mortgage Servicing Fraud or MSfraud.org
Roy Blizzard III