Katherine M. Porter
College of Law, University of Iowa

Abstract

The greatest fear of many families in serious financial trouble is that they will lose their homes. Bankruptcy offers a last chance for families save their houses by halting a foreclosure and by repaying any default on their mortgage loans over a period of years. Mortgage companies participate in bankruptcy by filing proofs of claims with the court for the amount of the mortgage debt. In turn, bankruptcy debtors pay these claims to retain their homes. This process is well established and, until now, uncontroversial. The assumption is that the protective elements of the federal bankruptcy shield vulnerable homeowners from harm.

This Article examines the actual behavior of mortgage companies in consumer bankruptcy cases. Using original data from 1700 recent Chapter 13 bankruptcy cases, I conclude that mortgage servicers frequently do not comply with bankruptcy law. A majority of mortgage claims are missing one or more of the required pieces of documentation for a bankruptcy claims. Fees and charges on claims often are poorly identified and do not appear to be reasonable. The bankruptcy data reinforce concerns about the overall reliability of the mortgage service industry to charge homeowners only the correct and legal amount of the debt and to comply with applicable consumer protection laws. Mistakes or misbehavior by mortgage servicers can have grave consequences. Bloated claims can jeopardize a family’s ability to save their home in bankruptcy. On a system level, mistakes or misbehavior by mortgage servicers undermine America’s homeownership policies for all families trying to buy a home.

The data also reinforce concerns about whether consumers can trust financial institutions to adhere to applicable laws. The findings are a chilling reminder of the limits of formal law to protect consumers. Imposing unambiguous legal rules does not ensure that a system will actually function to safeguard the rights of parties. Observing the reality that laws can under perform or even misfire has crucial implications for designing legal systems that produce acceptable and just behavior. *

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Judge Thomas A. Adams knows exactly what he is doing! Watch for more of his slam dunks…

WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE FOR THE CERTIFICATE HOLDERS FOR MERRILL LYNCH MORTGAGE INVESTORS TRUST, MORTGAGE LOAN ASSET-BACKED
CERTIFICATES, SERIES 2005

- against –

STUART BRENNER, et aI.

INDEX NO. : 014812/09

AUGUST 20, 2010

Defendant’ s answer contains a defense of “lack of standing.” Plaintiff has failed to establish it was the holder of the note and the mortgage securing it when the action was commenced. In that regard, plaintiff relies on an undated assignment of the mortgage by MERS as nominee acknowledged by a Texas notary on July 18, 2009. The note sued on does not contain an indication it has been negotiated. The undated assignment by MERS contains a provision at the assignment of the mortgage is “TOGETHER with the notes described in said mortgage.” The record before me is devoid of proof that MERS as nominee for purposes of recording had authority to assign the mortgage. However, assuming it had such authority since it is a party to the mortgage and such authority might be implied , there has been a complete failure to establish MERS, as a non-party to the note, to negotiate its transfer. A transfer of the note effects a transfer of the mortgage MERS vs. Coakley, 41 AD3 674), the assignment of a mortgage without a valid transfer of the mortgage note is a nullity (Kluge vs. Fugazv, 145 AD2 537).

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For those who may not know both David J. Stern and Cheryl Samons both were former employees of Shapiro & Fishman prior to Mr. Stern and Mrs. Samons departing from Shapiro & Fishman…“thats all“. <grin>————————–>

180 PAGES!

PROTECTIVE ORDER? Lender Processing Services? Specialized Loan Servicing? American Home Mortgage Servicing? DEPOS? SUBPOENAS?

DISMISSAL WITH PREJUDICE!

(a) Voluntary Dismissal.

(1) By Parties. Except in actions in which property has been seized or is in the custody of the court, an action may be dismissed by plaintiff without order of court

(B) by filing a stipulation of dismissal signed by all parties who have appeared in the action. Unless otherwise stated in the notice or stipulation, the dismissal is without prejudice, except that a notice of dismissal operates as an adjudication on the merits when served by a plaintiff who has once dismissed in any court an action based on or including the same claim.

Many thanks to Foreclosure Hamlet for the documents.

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ASSIGNMENT OF MORTGAGE , “Assignor”

Hmmmm

“Assignment of Mortgage”It is signed by Lisa Wickser who is identified as the Assistant Secretary of

“Assignment of Mortgage”

though the notary says she notarized the signature of Rose C. Lara who is also identified as an Assistant Secretary of that same company,

“Assignment of Mortgage.”

Hat tip to the person who added the markings…now it’s up against a Monet art piece!

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© 2010-12 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.
www.StopForeclosureFraud.com