Pew family trusts which I am a beneficiary and/or remainderman have maintained
investments in various banks, mutual funds, and other entities that maintain
interests in various shares, mortgage backed securities and/or debt issuances and I
have been a shareholder in many mortgage companies including Fannie Mae,
Bear Stearns, JPMorganChase, Washington Mutual, MGIC, Ocwen and Radian,
many of which are members, owners and shareholders in Mortgage Electronic
Registration Systems, Inc. [MERS].

© 2010 Nye Lavalle, Pew Mortgage Institute
•10675 Pebble Cove Lane • Boca Raton, FL 33498
561/860-7632 • mortgagefrauds@aol.com

[ipaper docId=36753239 access_key=key-1xwnf3x33iwj6zod9965 height=600 width=600 /]

“What you’re telling me is you pay lip service to me but yet I have not seen one single actual corrected policy procedure, you’re telling me your volume practice is going to remain because you can’t afford it,” Dunnigan said.

Judge fines major legal firm for foreclosure conduct

Lawyers to pay $49,000 for not showing up at scheduled hearings

Continue reading…Herald Tribune

2010 NY Slip Op 51482(U)

ARGENT MORTGAGE COMPANY, LLC, Plaintiff,
v.
DAPHINE MAITLAND, ET. AL., Defendants.

41383/07.

Supreme Court, Kings County.

Decided August 19, 2010.

Melissa A Sposato, Esq., Law Offices of Jordan Katz, PC, Melville NY, Plaintiff.

No Appearances, Defendant.

ARTHUR M. SCHACK, J.

In this mortgage foreclosure action, plaintiff’s motion for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings) is denied with prejudice. The complaint is dismissed. The notice of pendency filed against the above-named real property is cancelled. Plaintiff’s successor in interest, AMERICAN HOME MORTGAGE SERVICING, INC. (AHMSI), lacks standing to continue this action because the instant mortgage was satisfied on April 26, 2010. Plaintiff’s counsel never notified the Court that the mortgage had been satisfied and failed to discontinue the instant action with prejudice. I discovered that the mortgage had been satisfied by personally searching the Automated City Register Information System (ACRIS) website of the Office of the City Register, New York City Department of Finance. AHMSI’s President and Chief Executive Officer or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., will be given an opportunity to be heard as to why this Court should not sanction them for making a “frivolous motion,” pursuant to 22 NYCRR §130-1.1.

Background

Defendant DAPHINE MAITLAND (MAITLAND) borrowed $392,000.00 from original plaintiff ARGENT MORTGAGE COMPANY, LLC (ARGENT), on August 4, 2006. The loan was secured by a mortgage, recorded by ARGENT, at the Office of the City Register of the City of New York, New York City Department of Finance, on August 23, 2006, at City Register File Number (CRFN) XXXXXXXXXX. Defendant MAITLAND allegedly defaulted in her mortgage loan payments with her June 1, 2007 payment. ARGENT commenced the instant action with the filing of the summons, complaint and notice of pendency with the Kings County Clerk on November 8, 2007. Plaintiff’s counsel, on April 14, 2009, filed the instant motion for an order of reference with the Court’sForeclosure Department. After reviewing the papers, the Foreclosure Department forwarded the instant motion to me on August 16, 2010.

On August 16, 2010, I searched ACRIS and discovered that AHMSI, the successor in interest to plaintiff ARGENT, executed a satisfaction of the instant mortgage almost four months ago, on April 26, 2010. The satisfaction was executed in Idaho Falls, Idaho, by Krystal Hall, Vice President of “AMERICAN HOME MORTGAGE SERVICING, INC., AS SUCCESSOR TO CITI RESIDENTIAL LENDING, INC. AS SUCCESSOR TO ARGENT MORTGAGE COMPANY, LLC,” and the satisfaction was recorded at the Office of the City Register of the City of New York, on May 10, 2010, at CRFN XXXXXXXXXXXXX.

Successor plaintiff AHMSI is one of several companies controlled by billionaire investor Wilbur L. Ross, Jr. through his firm, W. L. Ross & Company. Louise Story, in her April 4, 2008 New York Times article, “Investors Stalk the Wounded of Wall Street,” described Mr. Ross as “a dean of vulture investing.” She wrote:

Almost two centuries ago, as Napoleon marched on Waterloo, a scion of the Rothschilds is said to have declared: The time to buy is when blood is running in the streets.

Now as red ink runs on Wall Street, the figurative heirs of the Rothschilds — bankers, traders, hedge fund gurus and takeover artists — are plotting to profit from today’s financial upheaval. These market opportunists — vulture investors in the Wall Street term — have begun to swoop. They are buying up mortgages of hard-pressed homeowners, the bank loans of cash-short businesses, and companies that seem to be hurtling to bankruptcy. And they are trying to buy them all on the cheap. . . .

“The only time you really know you’ve reached the bottom is when you’re back on the other side and things are going back up,” said Wilbur L. Ross, Jr., a dean of vulture investors, who made a fortune buying steel companies when no one else seemed to want them.

Such caution aside, his firm, W. L. Ross & Company, recently spent $2.6 billion for two mortgage servicers [AHMSI and Option One] and a bond insurance company. He said he planned to buy more as hedge funds and other investor sell at bargain prices.

Moreover, ACRIS revealed that defendant MAITLAND sold the premises to 732 HENDRIX STREET, LLC for $155,000.00, with the deed executed on April 5, 2010 and recorded on April 14, 2010, at the Office of the City Register of the City of New York, at CRFN XXXXXXXXXXXXX.

Plaintiff’s counsel never had the courtesy or professionalism to notify the Court that the instant mortgage was satisfied and file a motion to discontinue the instant action. The Court is gravely concerned that it: expended scarce resources on an action that should have been discontinued; and, would have signed an order that could have possibly damaged the credit rating of defendant MAITLAND and put an unfair cloud on the title to the subject premises now owned by 732 HENDRIX STREET, LLC, causing both defendant MAITLAND and 732 HENDRIX STREET, LLC much time and effort to correct an error caused by the failure of successor plaintiff AHMSI and plaintiff’s counsel to exercise due diligence. If successor plaintiff AHMSI is a responsible lender, not a vulture investor looking to profit “when blood is running in the streets,” it should have notified the Court that the subject mortgage had been satisfied.

Discussion

It is clear that successor plaintiff AHMSI lacked standing to proceed in the instant action since some time prior to April 26, 2010, when the satisfaction for defendant MAITLAND’s mortgage was executed. The exact date is probably April 5, 2010, when defendant MAITLAND likely paid off the subject mortgage loan as part of her closing with 732 HENDRIX STREET, LLC, for the sale of the subject mortgaged premises. “To establish a prima facie case in an action to foreclose a mortgage, the plaintiff must establish the existence of the mortgage and the mortgage note, ownership of the mortgage, and the defendant’s default in payment.” (Campaign v Barba (23 AD3d 327 [2d Dept. 2005]). The instant mortgage was satisfied months before the instant motion for an order of reference was forwarded to me by the Foreclosure Department. The satisfaction, dated April 26, 2010, states that “AMERICAN HOME MORTGAGE INC. AS SUCCESSOR TO CITI RESIDENTIAL LENDING, INC. AS SUCCESSOR TO ARGENT MORTGAGE COMPANY, LLC . . . does hereby certify that a certain indenture of mortgage . . . to secure payment of the principal sum of $392,000.00, and interest, and duly recorded . . . document no. 2006000477619 on the 23rd day of August 2006, is PAID, and does hereby consent that the same be discharged of record.” (See Household Finance Realty Corp. of New York v Wynn, 19 AD3d 545 [2d Dept. 2005]; Sears Mortgage Corp. v Yahhobi, 19 AD3d 402 [2d Dept. 2005]; Ocwen Federal Bank FSB v Miller, 18 AD3d 527 [2d Dept. 2005]; U.S. Bank Trust Nat. Ass’n Trustee v Butti, 16 AD3d 408 [2d Dept 2005]; First Union Mortgage Corp. v Fern, 298 AD2d 490 [2d Dept 2002]; Village Bank v Wild Oaks, Holding, Inc., 196 AD2d 812 [2d Dept 1993]).

The Court of Appeals (Saratoga County Chamber of Commerce, Inc. v Pataki, 100 NY2d 801, 812 [2003], cert denied 540 US 1017 [2003]) declared that “[s]tanding to sue is critical to the proper functioning of the judicial system. It is a threshold issue. If standing is denied, the pathway to the courthouse is blocked. The plaintiff who has standing, however, may cross the threshold and seek judicial redress.”

In Caprer v Nussbaum (36 AD3d 176, 181 [2d Dept 2006]) the Court held that “[s]tanding to sue requires an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request.” If a plaintiff lacks standing to sue, the plaintiff may not proceed in the action. (Stark v Goldberg, 297 AD2d 203 [1st Dept 2002]).

Since AHMSI executed the satisfaction for the instant mortgage, the Court must not only deny the instant motion, but also dismiss the complaint and cancel the notice of pendency filed by ARGENT with the Kings County Clerk on November 8, 2007. CPLR § 6501 provides that the filing of a notice of pendency against a property is to give constructive notice to any purchaser of real property or encumbrancer against real property of an action that “would affect the title to, or the possession, use or enjoyment of real property, except in a summary proceeding brought to recover the possession of real property.” Professor David Siegel, in NY Prac, § 334, at 535 [4th ed] observes about a notice of pendency that:

The plaintiff files it with the county clerk of the real property county, putting the world on notice of the plaintiff’s potential rights in the action and thereby warning all comers that if they then buy the property or lend on the strength of it or otherwise rely on the defendant’s right, they do so subject to whatever the action may establish as the plaintiff’s right.

The Court of Appeals, in 5303 Realty Corp. v O & Y Equity Corp. (64 NY2d 313, 315 [1984]), commented that “[a] notice of pendency, commonly known as a lis pendens,‘ can be a potent shield to litigants claiming an interest in real property.” The Court, at 318-320, outlined the history of the doctrine of lis pendens back to 17th century England. It was formally recognized in New York courts in 1815 and first codified in the Code of Procedure [Field Code] enacted in 1848. At 319, the Court stated that “[t]he purpose of the doctrine was to assure that a court retained its ability to effect justice by preserving its power over the property, regardless of whether a purchaser had any notice of the pending suit,” and, at 320, “the statutory scheme permits a party to effectively retard the alienability of real property without any prior judicial review.”

In Israelson v Bradley (308 NY 511, 516 [1955]) the Court observed that with a notice of pendency a plaintiff who has an interest in real property has received from the State:

an extraordinary privilege which . . . upon the mere filing of the notice of a pendency of action, a summons and a complaint and strict compliance with the requirements of section 120 [of the Civil Practice Act; now codified in CPLR § § 6501, 6511 and 6512] is required. Proper administration of the law by the courts requires promptness on the part of a litigant so favored and that he accept the shield which has been given him upon the terms imposed and that he not be permitted to so use the privilege granted that itbecomes a sword usable against the owner or possessor of realty. If the terms imposed are not met, the privilege is at an end. [Emphasis added]

Article 65 of the CPLR outlines notice of pendency procedures. The Court, in Da Silva v Musso (76 NY2d 436, 442 [1990]), held that “the specific statutorily prescribed mechanisms for implementing this provisional remedy . . . were designed with a view toward balancing the interests of the claimant in the preservation of the status quo against the equally legitimate interests of the property owner in the marketability of his title.” The Court of Appeals, quoted Professor Siegel, in holding that “[t]he ability to file a notice of pendency is a privilege that can be lost if abused’ (Siegel, New York Practice § 336, at 512).” (In Re Sakow, 97 NY2d 436, 441 [2002]).

The instant case, with successor plaintiff AHMSI lacking standing to bring this action and the complaint dismissed, meets the criteria for losing “a privilege that can be lost if abused.” CPLR § 6514 (a) provides for the mandatory cancellation of a notice of pendency by:

[t]he court, upon motion of any person aggrieved and upon such notice as it may require, shall direct any county clerk to cancel a notice of pendency, if service of a summons has not been completed within the time limited by section 6512; or if the action has been settled, discontinued or abated; or if the time to appeal from a final judgment against the plaintiff has expired; or if enforcement of a final judgment against the plaintiff has not been stayed pursuant to section 5519. [Emphasis added]

The plain meaning of the word “abated,” as used in CPLR § 6514 (a) is the ending of an action. Abatement is defined (Black’s Law Dictionary 3 [7th ed 1999]) as “the act of eliminating or nullifying.” “An action which has been abated is dead, and any further enforcement of the cause of action requires the bringing of a new action, provided that a cause of action remains’ (2A Carmody-Wait 2d § 11.1).” (Nastasi v Nastasi, 26 AD3d 32, 40 [2d Dept 2005]). Further, Nastasi at 36, held that “[c]ancellation of a notice of pendency can be granted in the exercise of the inherent power of the court where its filing fails to comply with CPLR 6501 (see 5303 Realty Corp. v O & Y Equity Corp. at 320-321; Rose v Montt Assets, 250 AD2d 451, 451-452 [1st Dept 1998]; Siegel, NY Prac § 336 [4th ed]).” AHMSI, as successor plaintiff, lacks standing to sue. Therefore, dismissal of the instant complaint must result in mandatory cancellation of the November 8, 2007 notice of pendency against the property “in the exercise of the inherent power of the Court.”

The failure of successor plaintiff AHMSI, by its President David M. Friedman or its Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., and its counsel, Melissa A. Sposato, Esq. and her firm, Jordan S. Katz, P.C., to discontinue the instant action since the April 2010 payoff of the MAITLAND mortgage appears to be “frivolous.” 22 NYCRR § 130-1.1 (a) states that “the Court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct as defined in this Part, which shall be payable as provided in section 130-1.3 of this Subpart.” Further, it states in 22 NYCRR § 130-1.1 (b), that “sanctions may be imposed upon any attorney appearing in the action or upon a partnership, firm or corporation with which the attorney is associated.”

22 NYCRR § 130-1.1 (c) states that:

For purposes of this part, conduct is frivolous if:

(1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law;

(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or

(3) it asserts material factual statements that are false.

It is clear that since at least April 26, 2010 the instant motion for aan order of reference “is completely without merit in law” and “asserts material factual statements that are false.”

Several years before the drafting and implementation of the Part 130 Rules for costs and sanctions, the Court of Appeals (A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 [1986]) observed that “frivolous litigation is so serious a problem affecting the proper administration of justice, the courts may proscribe such conduct and impose sanctions in this exercise of their rule-making powers, in the absence of legislation to the contrary (see NY Const, art VI, § 30, Judiciary Law § 211 [1] [b] ).”

Part 130 Rules were subsequently created, effective January 1, 1989, to give the courts an additional remedy to deal with frivolous conduct. These stand beside Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone (202 AD2d 104, 110 [2d Dept 1994], lv denied 84 NY2d 813 [1995]), instructed that:

Conduct is frivolous and can be sanctioned under the court rule if “it is completely without merit . . . and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; or . . .

it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another” (22 NYCRR 130-1.1[c] [1], [2] . . . ).

In Levy v Carol Management Corporation (260 AD2d 27, 33 [1st Dept 1999]) the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, “22 NYCRR 130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant party . . .” Levy at 34, held that “[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large.”

The Court, in Kernisan, M.D. v Taylor (171 AD2d 869 [2d Dept 1991]), noted that the intent of the Part 130 Rules “is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Church of City of New York v 198 Broadway, 76 NY2d 411; see Steiner v Bonhamer, 146 Misc 2d 10) [Emphasis added].” Since at least April 26, 2010, and probably since April 5, 2010, the instant action is “a waste of judicial resources.” This conduct, as noted in Levy, must be deterred. In Weinstock v Weinstock (253 AD2d 873 [2d Dept 1998]) the Court ordered the maximum sanction of $10,000.00 for an attorney who pursued an appeal “completely without merit,” and holding, at 874, that “[w]e therefore award the maximum authorized amount as a sanction for this conduct (see, 22 NYCRR 130-1.1) calling to mind that frivolous litigation causes a substantial waste of judicial resources to the detriment of those litigants who come to the Court with real grievances [Emphasis added].” Citing Weinstock, the Appellate Division, Second Department, in Bernadette Panzella, P.C. v De Santis (36 AD3d 734 [2d Dept 2007]) affirmed a Supreme Court, Richmond County $2,500.00 sanction, at 736, as “appropriate in view of the plaintiff’s waste of judicial resources [Emphasis added].”

In Navin v Mosquera (30 AD3d 883 [3d Dept 2006]) the Court instructed that when considering if specific conduct is sanctionable as frivolous, “courts are required to examine whether or not the conduct was continued when its lack of legal or factual basis was apparent [or] should have been apparent’ (22 NYCRR 130-1.1 [c]).” The Court, in Sakow ex rel. Columbia Bagel, Inc. v Columbia Bagel, Inc. (6 Misc 3d 939, 943 [Sup Ct,

New York County 2004]), held that “[i]n assessing whether to award sanctions, the Court must consider whether the attorney adhered to the standards of a reasonable attorney (Principe v Assay Partners, 154 Misc 2d 702 [Sup Ct, NY County 1992]).” In the instant action, plaintiff’s Chief Legal Officer or its outside counsel is responsible for keeping track of whether the mortgage was satisfied. In Sakow at 943, the Court observed that “[a]n attorney cannot safely delegate all duties to others.”

This Court will examine the conduct of successor plaintiff AHMSI and plaintiff’s counsel, in a hearing, pursuant to 22 NYCRR § 130-1.1, to determine if plaintiff AHMSI, by its President, David M. Friedman, or its Executive Vice President, Chief Legal Officer and Secretary, Jordan D. Dorchuck, Esq., and plaintiff’s counsel Melissa A. Sposato, Esq. and her firm Jordan S. Katz, P.C. engaged in frivolous conduct, and to allow successor plaintiff AHMSI, by its President David M. Friedman or Executive Vice President, Chief Legal Officer and Secretary Jordan D. Dorchuck, Esq., and plaintiff’s counsel Melissa A. Sposato, Esq. and her firm Jordan S. Katz, P.C. a reasonable opportunity to be heard. The Court is aware that AHMSI’s Chief Legal Officer, Mr. Dorchuck, is a member of the New York State Bar. (See Mascia v Maresco, 39 AD3d 504 [2d Dept 2007]; Yan v Klein, 35 AD3d 729 [2d Dept 2006]; Greene v Doral Conference Center Associates, 18 AD3d 429 [2d Dept 2005]; Kucker v Kaminsky & Rich, 7 AD3d 39 [2d Dept 2004]).

Conclusion

Accordingly, it is

ORDERED, that the motion of successor plaintiff, AMERICAN HOME MORTGAGE SERVICING, INC., for an order of reference for the premises located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings), is denied with prejudice; and it is further

ORDERED, that because successor plaintiff, AMERICAN HOME MORTGAGE SERVICING, INC., lacks standing and no longer is the mortgagee in this foreclosure action, the instant complaint, Index No. 41383/07 is dismissed with prejudice; and it is further

ORDERED, that the Notice of Pendency filed with the Kings County Clerk on November 8, 2007, by original plaintiff, ARGENT MORTGAGE COMPANY, LLC, in an action to foreclose a mortgage for real property located at 732 Hendrix Street, Brooklyn, New York (Block 4305, Lot 22, County of Kings), is cancelled; and it is further

ORDERED, that it appearing that successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., Melissa A. Sposato, Esq. and Jordan S. Katz, P.C. engaged in “frivolous conduct,” as defined in the Rules of the Chief Administrator, 22 NYCRR § 130-1 (c), and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), “[a]n award of costs or the imposition of sanctions may be made. . . upon the court’s own initiative, after a reasonable opportunity to be heard,” this Court will conduct a hearing affording: successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., by its President David M. Friedman or Executive Vice President, Chief Legal Officer and Secretary, Jordan D. Dorchuck, Esq.; Melissa A. Sposato, Esq.; and, Jordan S. Katz, P.C.; “a reasonable opportunity to be heard” before me in Part 27, on Monday, September 13, 2010, at 2:30 P.M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further

ORDERED, that because the headquarters of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC. is in Irving, Texas, Mr. Friedman or Mr. Dorchuck may appear either in person or by telephone; and it is further

ORDERED, that Ronald David Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: David M. Friedman, President of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., 4600 Regent Boulevard, Suite 200, Irving, Texas 75063; Jordan D. Dorchuck, Esq., Executive Vice President, Chief Legal Officer and Secretary of successor plaintiff AMERICAN HOME MORTGAGE SERVICING, INC., 4600 Regent Boulevard, Suite 200, Irving, Texas 75063; Melissa A. Sposato, Esq., Law Offices of Jordan S. Katz, P.C., 395 North Service Road, Suite 401, Melville, New York XXXXX-XXXX; and Jordan S. Katz, P.C., 395 North Service Road, Suite 401, Melville, New York XXXXX-XXXX.

This constitutes the Decision and Order of the Court.

DinSFLA here: I agree 100%. Where are the sirens that should be going off and a Foreclosure Moratorium? This is not the first time nor the last time we will hear of financial institutions with the help of LPS and MERS fabricating documents. .

We will not rest until we see justice and these politicians doing the job they took an oath for!

Sink, McCollum, Scott–Three the Hard Way

Some highlights to this article from the West Orlando News:

Bill McCollum is the Florida Attorney General, allegedly Florida’s top cop, and Alex Sink is Florida’s Chief Financial Officer or Florida’s chief financial crime investigator.

Well, history is the best teacher. If you want to know if Sink and McCollum will “fight” for you as Governor, let’s see how they “fought” for you as members of the Florida Cabinet.

It’s common knowledge that the State of Florida is one of America’s safest havens for predatory lenders, ponzi schemers and financial crooks. Florida was home to the Madoffs and Rothsteins, and a favorite spot for the Wells Fargos and Freemont Investment and Loan companies that swindled thousands of Floridians out of their investments and concocted illegal residential foreclosure actions.

Fight for me as Governor? I don’t think so! What financial criminals has Sink investigated? What financial criminals has McCollum prosecuted?

Don’t take my word for any of this. Read the facts for yourself. Call your little politicians and say Lucius is talking about them and see how they respond.

Both Sink and McCollum should know or should have known that financial criminals were not only robbing individual citizens, the crooks were also playing loose and free with money that the financial criminals owed local governments for transfer fees, assignment fees and other government financial transaction fees.

There is an electronic recording system devised by and for the convenience of predatory lenders and financial criminals called “MERS”. This system allows financial crooks to “document” changes in property title ownerships.

Both Sink and McCullom knew or should have known that the use of MERS to document or change titles, transfers and assignments of properties in Florida is illegal.

Why? Because use of MERS breaks the chain of title, allows criminals to get away without paying local government fees and is an explicit and factual violation of Florida Law!

Florida Statute 701.02 specifically states that “(1) An assignment of a mortgage upon real property or any interest therein, is not good or effectual in law or equity, against creditors or subsequent purchasers, for a valuable consideration, and without notice, unless the assignment is contained in a document that, in its title, indicates an assignment of mortgage and is recorded according to law.”

When Sink and McCollum got complaints from Florida citizens that claimed they were being victimized by predatory lenders and financial criminals, it seems they both ignored those complaints.

By: Lucius Gantt ALL WORLD CONSULTANTS Box 2071 Tallahassee, Florida 32316 850-222-3475

Ellen Brown, August 18th, 2010
WEBofDEBT

Over 62 million mortgages are now held in the name of MERS, an electronic recording system devised by and for the convenience of the mortgage industry. A California bankruptcy court, following landmark cases in other jurisdictions, recently held that this electronic shortcut makes it impossible for banks to establish their ownership of property titles—and therefore to foreclose on mortgaged properties. The logical result could be 62 million homes that are foreclosure-proof.

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief. But MERS has acknowledged, and recent cases have held, that MERS is a mere “nominee”—an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions. Recent court opinions stress that this defect is not just a procedural but is a substantive failure, one that is fatal to the plaintiff’s legal ability to foreclose.

That means hordes of victims of predatory lending could end up owning their homes free and clear—while the financial industry could end up skewered on its own sword.

California Precedent

The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E–11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). (For more on these earlier cases, see here, here and here.) The court concluded:

Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

The broad impact the case could have on California foreclosures is suggested by attorney Jeff Barnes, who writes:

This opinion . . . serves as a legal basis to challenge any foreclosure in California based on a MERS assignment; to seek to void any MERS assignment of the Deed of Trust or the note to a third party for purposes of foreclosure; and should be sufficient for a borrower to not only obtain a TRO [temporary restraining order] against a Trustee’s Sale, but also a Preliminary Injunction barring any sale pending any litigation filed by the borrower challenging a foreclosure based on a MERS assignment.

While not binding on courts in other jurisdictions, the ruling could serve as persuasive precedent there as well, because the court cited non-bankruptcy cases related to the lack of authority of MERS, and because the opinion is consistent with prior rulings in Idaho and Nevada Bankruptcy courts on the same issue.

What Could This Mean for Homeowners?

Earlier cases focused on the inability of MERS to produce a promissory note or assignment establishing that it was entitled to relief, but most courts have considered this a mere procedural defect and continue to look the other way on MERS’ technical lack of standing to sue. The more recent cases, however, are looking at something more serious. If MERS is not the title holder of properties held in its name, the chain of title has been broken, and no one may have standing to sue. In MERS v. Nebraska Department of Banking and Finance, MERS insisted that it had no actionable interest in title, and the court agreed.

An August 2010 article in Mother Jones titled “Fannie and Freddie’s Foreclosure Barons” exposes a widespread practice of “foreclosure mills” in backdating assignments after foreclosures have been filed. Not only is this perjury, a prosecutable offense, but if MERS was never the title holder, there is nothing to assign. The defaulting homeowners could wind up with free and clear title.

In Jacksonville, Florida, legal aid attorney April Charney has been using the missing-note argument ever since she first identified that weakness in the lenders’ case in 2004. Five years later, she says, some of the homeowners she’s helped are still in their homes. According to a Huffington Post article titled “‘Produce the Note’ Movement Helps Stall Foreclosures”:

Because of the missing ownership documentation, Charney is now starting to file quiet title actions, hoping to get her homeowner clients full title to their homes (a quiet title action ‘quiets’ all other claims). Charney says she’s helped thousands of homeowners delay or prevent foreclosure, and trained thousands of lawyers across the country on how to protect homeowners and battle in court.

Criminal Charges?

Other suits go beyond merely challenging title to alleging criminal activity. On July 26, 2010, a class action was filed in Florida seeking relief against MERS and an associated legal firm for racketeering and mail fraud. It alleges that the defendants used “the artifice of MERS to sabotage the judicial process to the detriment of borrowers;” that “to perpetuate the scheme, MERS was and is used in a way so that the average consumer, or even legal professional, can never determine who or what was or is ultimately receiving the benefits of any mortgage payments;” that the scheme depended on “the MERS artifice and the ability to generate any necessary ‘assignment’ which flowed from it;” and that “by engaging in a pattern of racketeering activity, specifically ‘mail or wire fraud,’ the Defendants . . . participated in a criminal enterprise affecting interstate commerce.”

Ellen Brown wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ellen developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, her latest of eleven books, she shows how the Federal Reserve and “the money trust” have usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are webofdebt.com, ellenbrown.com, and public-banking.com.

Written by Jeff Nielson Tuesday, 17 August 2010 11:50

Old habits are hard to break, and in the United States of America, there are few “habits” as common as mortgage-fraud. In 2006, the world discovered that the U.S. housing market was the most-fraudulent market in history. However, since that time, even that level of fraud has been surpassed – by the U.S. housing market of 2010.

Incredibly, four years after learning that the U.S. housing market was the global fraud-capital, U.S. mortgage-fraud has continued to increase every year. There is simply too much material here to cover even a small portion. For inquisitive readers, I recommend doing a simple Google-search for “U.S. mortgage-fraud increasing”.

In addition to coming up with an endless list of articles covering the last four years, one of the first “results” which readers will encounter is a Reuters article from June. That article reported a large haul of fraudsters: 1,215 people were charged in numerous frauds, totaling $2.3 billion in losses for victims. Thanks to the “magic” of search-engines, readers will also encounter a further list (on the left side of the page) of the recent Reuters articles on “U.S. mortgage-fraud increasing”.

One of the more hilarious/disturbing search-results was a Reuters article from April 2009, where the U.S. Justice Department “urged Congress” to force U.S. banks to keep records of their mortgages. The Justice Department stated unequivocally that such record-keeping would make it much easier to crack-down on fraud.

Naturally, nothing has been done on that front – since the U.S. government likes mortgage-fraud. Here’s why. A Reuters article released today on U.S. mortgage-fraud reported the case of a run-down Chicago home, which sold for $25,000 in a foreclosure auction, and then was quickly “flipped” in a fraudulent transaction for $355,000.

Pull out your calculator, and you’ll discover that this phony transaction resulted in a (fraudulent) price-rise of more than 1,300%. Put another way, if there were 100 non-fraudulent transactions, each of which reported a 5% decline in prices, and we add in the one fraudulent “sale”, suddenly those 101 sales show a “rising” U.S. housing market, once averaged-out (instead of the falling market which exists in the real world).

Of course, with U.S. mortgage-fraud steadily increasing (even though total sales in this market have plummeted to a tiny fraction of their bubble-peak), obviously the rate of fraud is much higher than merely 1% of transactions. This is especially true given that the vast majority of offenders are “insiders”: “mortgage brokers, appraisers, real estate agents or loan officers”. In other words, the supposed “rising prices” which the Obama regime and media-parrots cited to conclude that the U.S. housing market had “stabilized”, were in fact nothing more than a fraud-induced mirage.

Equally disturbing, even in the FBI “crackdown” on mortgage-fraud, of the $2.3 billion in victim-losses, only a paltry $147 million was recovered – less than 10%. This is of tremendous significance to U.S. taxpayers, since their government has made them “guarantors” of all U.S. mortgage-debt – including this endless stream of fraudulent transactions.

Even the “detected” fraud is leading to losses of 90+% for taxpayers. Meanwhile, the much larger mountain of undetected fraud naturally means losses of virtually 100%. For readers who dispute the premise that mortgage-fraud is a “way of life” in the United States, I will simply refer them to a superb, PBS expose on the U.S.’s fraudulent markets.

“The Warning” is a PBS documentary which goes back to the roots of current, U.S. mortgage-fraud, during the years of the Clinton regime. Of principal note was the position of U.S. Federal Reserve Chairman, Alan Greenspan – who was adamant that “market fraud” should not even be illegal in the U.S. Greenspan’s position was that the market should be left alone to “resolve” this fraud “in its own way” (i.e. through the fraudsters taking every last dime of the “sheep”).

What more needs to be said when you have the government of the world’s largest economy taking the position that rather than being a “problem”, that mortgage-fraud was a “solution to problems” (i.e. the crashing U.S. housing market)? Let the fraudsters artificially pump-up the prices of U.S. homes through their phony transactions, et voila we have a “U.S. housing recovery”.

Indeed, regular readers will be familiar with my previous articles on the “MERS” registry system. This was a fraud-facilitation entity created by Wall Street bankers during the mid-1990’s. It’s entire purpose was to replace the mortgage record-keeping of individual, financial institutions – so that it would be much easier to engage in serial mortgage-fraud via “mortgage securitization”, as the U.S. financial crime syndicate commenced their housing-bubble crime-wave.

The “MERS” registry has been regularly rejected in numerous court-decisions for being woefully inadequate in its record-keeping. This has resulted in a number of U.S. homeowners who, instead of losing their property to foreclosure were handed free and clear title to their properties – because the MERS registry had failed to provide adequate documentation of title.

However, none of the previous documentation of fraud in this commentary can compare with the most-brazen admission of mortgage-fraud – by the banksters themselves. In a previous commentary, I referred to a Wall Street Journal article about yet another mortgage-fraud court case.

In that incident, the bankers of JP Morgan were asked to explain a mortgage document where, instead of a buyer’s name appearing, there were the words “Bogus Assignee”. The hilarious explanation of Michelle Kersch, the lawyer defending the case was that the “name” wasn’t an indication of a fraudulent transaction in-progress. Instead, “Bogus Assignee” was merely a generic term, or a “placeholder”, which had been used on “a few occasions”.

In other words, instead of using the five-letter word “buyer” as its generic term on loan documents, we are supposed to believe that the substition of the two words “Bogus Assignee” was merely a random choice of words, to which we should attach no meaning whatsoever.

For market participants, the message is simple: invest in a U.S. bank and you are investing in fraud. Invest in a U.S. home-builder, and you are investing in fraud. Even though home-builders have not been directly connected to this fraud, when you create the “supply” for a fraud-saturated market, you become equally affected by that fraud – irrespective of the fact that these entities did not participate in this crime-wave.

As I have already demonstrated previously, even without mortgage-fraud, the U.S. housing market was doomed to a much worse, much longer collapse – now that this market has clearly begun another slide. However, as we become more aware of the massive levels of fraud in this market, it would appear that I have been guilty of understatement.

Simply put, there is nothing more that the Bush regime, and its successor the Obama regime could have done to destroy the U.S. housing market. This matters not at all to the U.S. government, which clearly believes that fraud is “good for business”. This is the attitude of the Wall Street Oligarchs as well, who engage in serial-fraud as a basic ingredient of their “business model”.

The Oligarchs defraud a client or business partner (generally numerous times). If the fraud becomes so obvious that U.S. regulators can’t simply pretend it doesn’t exist (any longer), then the bankster is taken to court by the U.S. “regulator”. A sweetheart-settlement is reached where a) the banker isn’t required to admit any “wrong doing” (since U.S. officials don’t consider fraud a “crime”); and b) the fine levied against the Oligarch is generally only a tiny portion of the profits they obtained through the fraud.

The fact that U.S. mortgage-fraud continues to soar, four years after this fraud-saturated market was exposed tells us that the U.S. government is intentionally under-funding law enforcement in this area. Law enforcement officials must be extremely demoralized. Not only are they unable to obtain the necessary “resources” to properly police this crime-wave, but the “big players” (i.e. the Wall Street Oligarchs) are essentially “immune” to any law-enforcement actions.

Never in history, never in any other part of the world, and never in any other market have the words “caveat emptor” carried as much weight.

Source- BullionsBullCanada

In accordance with Title 17 U.S.C. Section 107, any copyrighted work in this message is distributed under fair use without profit or payment for non-profit research and educational purposes only. GRG [Ref. http://www.law.cornell.edu/uscode/17/107.shtml]

Scratch this record!!!!! Need help go to MERS!!

Last week Fannie Mae asked treasury for $1.5 billiion in assistance …now comes Freddie with loss and seeks aid.

You know this is outrageous! They applaud MERS and write recommendations of how they are excited with MERS but yet MERS does nothing but conceal information from the borrowers and has secret agreements with the possible beneficiaries of these loans. MERS takes tax dollars away from our schools, children, counties etc.

While we are on this subject of counties and states, why are they crying bankruptcy and major cut backs…how about ending the MERS sham and go after the fees that you cry about with them? Who does this benefit? Not us but the Mortgage Banking Industry and Wall Street so called Lending Institutions.

All these problems came about the same time MERS came to existence…now tell me something? Isn’t this a tad of a coincidence these issues became at the same time sub-prime loans hit peak?

By now we all have witness the Foreclosure Barons you have as designated counsel and what do you plan to do about it? No matter what dots there are, both Fannie and Freddie have a connection?

Why was all this NEVER a REAL PROBLEM in the past with assignments…lets say prior to 1998? Hmmm…

We are no fools.

CONGRESS IS COVERING UP! SHAM…SCANDAL!

Janet Tavakoli of Tavakoli Structured Finance tells what she thinks of recent fines the SEC has imposed on Wall Street giants and where she would like future investigations take place.

posted with written permission from Author

By E’Lyn Bryan

QUESTIONED DOCUMENT EXAMINATION

An overview of the basic techniques and technology

AT NO TIME IN HISTORY was crime more rampant than it is today. White-collar crime accounts for more than $140 billion in losses annually. Nearly $20 billion worth of check fraud occurs annually. More than $2 million of worthless checks are passed daily. Telemarketing accounts for $48 billion in fraud, while according to the FBI, Internet fraud as of 2009 had topped $264 million in online losses. A crime wave of this proportion has put the services of competent investigators and certified forensic-document examiners in high demand.

This article is intended to educate and assist attorneys or investigators when they are speaking with attorneys, judges, or clients about cases that involve questioned documents. There are numerous types of cases where a document or handwriting evidence may be involved as a result of being found either at the crime scene or at the center of a civil suit.

A competent investigator is cognizant of all the clues at a crime scene. Items such as credit-card receipts, legal papers, canceled checks, personal notes, leases, and other types of documents and writing may hold the clues to the motive. The observant investigator will call attention to these documents. An investigator who does not think along those lines may miss the subtle clues that could be found on even the smallest scrap of paper, on a blank writing pad (that might reveal “invisible” indented writing), or among the personal belongings of a victim.

Crimes involving fraud, larceny, forged wills, death threats, identity theft, ransom notes, poison-pen letters, “other-hand” disguised writing, traced signatures, assisted deathbed signatures, altered medical records, fingerprint examination, ink and paper analysis, watermarks, contrived faxes, “cut-and-pasted” signatures on legal documents, anachronisms (chronological errors, such as paper or ink that did not exist simultaneously), disputed pre- and post-nuptial agreements, and auto-pen signatures are examples of the types of cases that are filed in our courts every day. An investigator should be aware of the fact that any documents or written material found at the crime scene may hold clues to solving the case, whether it is written on paper, walls, a car door, or a mirror. Questioned documents or writing can be typed, written in blood, lipstick, ink, pencil, or body fluids.

Most documents are written with non-violent, white-collar criminal intent. Others are written with darker purposes in mind: murder, stalking, kidnapping, and suicide. In questioned-document investigations—as in any investigation—it is the duty of the document examiner to remove the shadow of doubt. The examiner, if possible, will determine—without prejudice—if the document is authentic or forged, original or altered. The document examiner is an advocate of the courts. Examiners do not have clients; they represent the justice system. As a result, the examiner cannot become emotionally involved or empathetic. Upon initial contact, the examiner must disclose a non-fiduciary relationship to the person who retains the examiner’s services.

A well-trained document examiner knows to examine all the physical features of a questioned document, not just the questioned signature. There are dozens of components to consider when examining a signature or a document. Characteristics to consider include the writing medium used and the surface it is written upon, the age of the paper or ink, and watermarks.

There are deletions, alterations, inclusions, and other aspects that must be considered, as well. The evaluation of letter formations, pen strokes, pen pressure, spacing, letter height, relation to the baseline, and slant are all part of the evaluation process.

When a document is typewritten, there are other problems to consider. Was a page added after the fact? Is the page a copy? Did someone possibly apply “white out” on the original, type over it, and then make a copy so that it looks like an original? Was another typewriter used to make the forgery or the added page? And what about a computer-generated document? Are the pages all from the same ream of paper? With technology such as infrared and ultraviolet light sources, these questions can be answered.

On a daily basis, document examiners are faced with a multitude of questioned-document problems. The most common cases, for example, involve forged checks, forged wills, graffiti, credit-card fraud, leases, deeds, contracts to purchase items—including homes, cars, and businesses—mortgage fraud, disguised writing, and poison-pen letters (hate letters). With the improved technology of printers and copiers, forging and counterfeiting is rampant through the use of “cut and paste” and “lifting signatures”.

It is well known that the field of digital science is constantly evolving. As new technology becomes available, the document examiner must stay on top of the latest state-of-the-art and work to anticipate the ways criminals may use new technology to their advantage. The certified forensic document examiner must utilize all the latest techniques and technology that science has to offer when examining questioned documents. When investigating digital crimes—crimes such as forged passports, driver’s licenses, computer-generated documents, and digital images inserted into other items—document examiners are referred to as digital-crime investigators.

Comparative Ink Analysis

The newest technology today is found in comparative ink analysis equipment. One very useful forensic tool in pen-formula differentiation is ink analysis that involves the determination of chemicals specific to certain types of compounds. One method used to identify a certain kind of ballpoint-pen ink is called thin-layer chromatography. The process involves using an ultraviolet-visible photodiode array detector that allows for the dye components to be rapidly separated.

A standard is a known authentic sample from which comparisons are made. The United States Secret Service and the Internal Revenue Service (IRS) jointly maintain the International Ink Library. This collection includes more than 9,500 inks, dating from the 1920s. New inks are chemically tested and added to this database on a regular basis. This reference serves as a great resource for the detection of fraudulent signatures and documents.

In the comparison of inks, chemical analysis can be useful in a number of cases, such as medical charts, tax evasion, insurance fraud, altered checks, counterfeiting, and other types of forgeries or frauds. A 2004 article from the Associated Press referenced ink-comparison evidence as one piece of evidence that assisted in the high-profile conviction of Martha Stewart. Examination of the ink on a document showed that an entry was made at a different time, possibly as an attempt to cover up insider-trading violations.

Aging Papers and Inks

The age of paper and ink can provide important clues when attempting to verify and authenticate a document. A key example was the Hitler Diaries case from the 1980s—one that involved purported diaries written by Adolf Hitler. The document examiner in the case unknowingly compared forged writing to the writing of the diaries. Taking the authentication and investigation one step further, the diaries were sent to a laboratory where the paper and ink was analyzed. It was proven conclusively that the document could not have been written by Hitler, since there were chemical compounds discovered in the paper of the book’s cover that were not available when Hitler was alive. The age of paper can be determined according to the additives and chemicals or by watermarks. The Hitler Diaries, as well as many other questioned historical papers, have been debunked, while others have been authenticated.

Two new methods of determining the relative age of ballpoint inks has recently come to the forefront in forensic-document examination. Studies have shown that different inks have different drying times. The new method for analyzing the drying time of ink is done by chemical analysis. Unfortunately, this is a destructive process.

These new developments are extremely important when examining ledger or medical-record entries. It has been established that the longer ink has been on a sheet of paper, the slower it will dissolve in the various solvents used to analyze them. It is now possible to identify the age of ink to within a six-month period. This new process of dating the age of inks has had dramatic impact on the examination and detection of backdated documents. Many malpractice cases have been won due to the analysis of ink on questioned medical records.

Infrared Comparisons

Infrared-imaging equipment and infra-red photography have given the document examiner an exciting new world of technology for investigating cases. Although this is not a new concept, the technology has been refined and taken to mind-boggling new heights.

The mechanics behind infrared are quite simple. The human eye perceives the reflected portion of the light spectrum. But there is much more of the spectrum that the human eye cannot see. For instance, when we see a rainbow, we are not seeing all the colors that exist. We see only red, orange, yellow, green, blue, indigo and violet. The colors on each side of the rainbow that we cannot see with the naked eye are the ultraviolet (UV) and infrared (IR) areas. The instruments we need to convert UV and IR wavelengths of the light spectrum into visible images for the human eye are called video spectral comparators and forensic imaging spectrometers. This equipment is used for non-destructive analysis of questioned documents in the presence of seemingly equal but physically different features of writing. With IR and UV, we can see “through” writing that has been blacked out or obscured by “white out”, as well as scribbled-out writing.

With split-screen and overlay software, direct visual comparison can be made of several individual images. Erased elements or chemically altered characters can be easily detected with IR and UV technology. The exceptional sensitivity and broad spectral range can detect even the slightest differences in similar inks, not seen by the unaided eye. This equipment is at the highest level of authentication technology available today.

Obliterated, faded, or altered writing can also be detected with IR and UV analysis. In a recent case handled by the IRS, the IRS claimed the defendant could not prove an expense he had written off for office equipment because the receipt had faded. The paper was old and the writing was “invisible”. Under an IR filter, the “blank” receipt luminesced, showing writing that was outside the wavelength of visible light to the naked eye.

Electrostatic Detection Apparatus

Another valuable piece of equipment to the document examiner is an electrostatic detection apparatus (ESDA). With an ESDA and specialized infra-red side-lighting photographic techniques, the characteristic indentations found in writing may prove that the writing was traced. In addition, when the top page of a pad that has been written on is removed, the “blank” writing underneath can be processed with an ESDA to show the writing by the indentations on the pages below. Research performed by the John Jay College of Criminal Justice in New York City indicates that an ESDA can recover indented impressions from documents that were written up to 60 years earlier.

The technology behind the ESDA is fairly simple: To develop the indentations on paper, the indented paper is placed in a high-humidity device and transferred onto a bronze vacuum plate. The page is then carefully covered with a Mylar (transparent, non-conducting) film. The page is then electrically charged so that toner will adhere to the impressions when applied to the Mylar covering. The final step is to pour the toner on the Mylar. This process develops the page containing the various indentations.

An example of the use of an ESDA in a recent case involved a bust on a PCP drug lab. Although there was no paper evidence at the scene of the raid, the telephone book at the scene was analyzed and, in the end, it held the incriminating evidence—only visible by use of the ESDA. An astute investigator noticed a telephone book on the counter where the drugs were being processed. On the cover of the phone book were slight indentations that appeared to be writing. The indentations were restored by ESDA and the writing was compared to that of the known chief chemist of the PCP lab. The writing the ESDA retrieved was the chemical formulas, written by the chief chemist. Busted!

As an investigator, you need to think outside the parameters of visible evidence. Evidence to solve your case may be right in front of you and may easily go unnoticed. In this case of the PCP lab, the real incriminating evidence was truly invisible. If not for the trained eye of the investigator, the case may have been dismissed for lack of solid evidence that could link the suspect with the actual manufacturer of the drugs.

As an advocate of the court, the document examiner is relied upon to dispel any doubts about a questioned document. Sometimes, the examiner simply will not be able to render an opinion on certain documents. In those instances, the document examiner’s letter of opinion will state an explicit explanation.

From murder scenes where notes are left behind, to kidnappings, to white-collar crimes such as forged checks, document examiners, investigators, and the technology they utilize prove to be a formidable team.

Questioned documents are a global issue. As investigators, you must be cognizant of the technologically advanced level of the criminals we face today. We must use all of the intelligence, the technology, and the resources available to educate ourselves on the topic of continually evolving criminal minds.

About the Author

E’lyn Bryan is a court-qualified and certified document examiner through the National Questioned Document Association. She offers presentations and training sessions for businesses and law-enforcement agencies on questioned-document examination. She is the current president of the South Florida Investigators Association and a member of the World Association of Detectives. She can be reached by phone at: 561-361-0007 or by e-mail at: bocaforensic@aol.com

Litigation Support
Forensic Document Examiners Inc.
div. of Forensic Bureau of Investigations Inc.
www.FloridaDocumentExaminer.com
President of South Florida Investigators Association
Instructor of Forensic Document Examination to Law Enforcement
National Association of Document Examiners
World Association of Detectives
Gold Coast Forensics Association
Florida Association of Private Investigators
Member of South County Bar Association
Forensic Expert Witness Association
561.361.0007

Preamble

We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America.

Video sends a message…

FORECLOSURE FRAUD …”The Greatest American Bank Robbery” A GREED STORY!

Song by: Scala “Creep”

Absolutely, positively a MUST READ!

edit: From a reader who makes an excellent point…this case is very important because it turns not on the assignment of mortgage which the court disregards but rather on the failure of the originator to file the mortgage loan lists with SEC-the defendant did not even raise the point that there was also a failure to file with delaware so that the trust was never given assets———most importantly AHMSI seems to have focused on acquisition of other ex lenders servicer portolios that systematically failed to file these lists-this could enable ahmsi to have more potential latitude to allocate/reallocate or even pocket collected monies -it ties in with the comments later last week re junior senior tranche——if there is no clear certainty as to who gets money from foreclosures due to the record breakdown —-then if the money were to go to tranches that have been written off by their owners —–then the servicer can pocket the proceeds———–the servicers are unregulated–who is looking at their allocations?

the real questions now-are the loans actually in the hands of trusts as a matter of law as a result of failed filings and what happens to proceeds of collection of foreclosure proceeds??

These are highlights…

SUPERIOR COURT OF NEW JERSEY

BANK OF NEW YORK, as Trustee for Home Mortgage Investment Trust CHANCERY DIVISION
2004-4 Mortgage-Backed Notes, ATLANTIC COUNTY Series 2004-4 DOCKET NO: F-7356-09

vs.

MICHAEL J. RAFTOGIANIS,

Decided June 29, 2010

This opinion deals with the plaintiff’s right to proceed with an action to foreclose a mortgage which secures a debt evidenced by a negotiable note. The original lender elected to use the Mortgage Electronic Registration System in recording the mortgage by designating that entity, as its nominee, as the mortgagee. The note and mortgage were subsequently securitized, without notice to the borrower. This action to foreclose the mortgage was filed years later, in the name of an entity created as a part of the securitization process. The defendant/borrower challenged plaintiff’s right to proceed with the foreclosure. That challenge, framed as a dispute over “standing,” has given rise to a variety of factual and legal issues typically raised in this type of litigation.

Ultimately, the questions presented were whether plaintiff could establish its right to enforce the obligation evidenced by the note and whether it must establish that it held that right at the time the complaint was filed. The answers to those questions require an understanding of the provisions of the Uniform Commercial Code, the Mortgage Electronic Registration System, the securitization of mortgages and how foreclosure litigation is handled. This opinion addresses those disputes. Ultimately, the court concluded that it was appropriate to require plaintiff to establish that it had physical possession of the note as of the date the complaint was filed. Plaintiff was unable to establish that, either by motion or at trial. Accordingly, the complaint has now been dismissed on terms permitting plaintiff to institute a new action to foreclose, on the condition that any new complaint must be accompanied by an appropriate  certification, confirming that plaintiff is then in possession of the note.

In this case, the defendant borrowed $1,380,000 from American Home Mortgage Acceptance Inc. (hereafter American Home Acceptance) in September 2004. This action to foreclose the mortgage was brought in the name of The Bank of New York, as Trustee for American Mortgage Investment Trust 2004-4 Mortgage Backed Notes, Series 2004-4 in February 2009. In the interim, a variety of transactions took place, involving a number of entities. Those transactions will be discussed in some detail below. Preliminarily, this opinion will discuss the UCC, MERS and the securitization process in more general terms.

How does one become a holder of a negotiable note? In addressing that question it is necessary to distinguish between “transfer” and “negotiation.” It is also necessary to distinguish between the handling of notes payable “to order” and notes payable “to bearer.” In this particular case, it is also necessary to recognize that a note initially made payable “to order” can become a bearer instrument, if it is endorsed in blank. See N.J.S.A. 12A:3-109(c), providing that an instrument payable to an identified person may become payable to bearer if it is endorsed in blank. See also N.J.S.A.12A:3-205(b), describing what qualifies as a blank endorsement, and The Law of Modern Payment 6 Systems and Notes 2.02 at 77-78, Miller and Harrell (2002), noting that an instrument bearing the indorsement “Pay to the order of __________” is a bearer instrument. Such a bearer note can be both transferred and negotiated by delivery alone. See Corporacion Venezolana de Fomento v. Vintero Sales, 452 F. Supp. 1108, 1117 (Dist. Ct. 1978).
Under the UCC, the transfer of an instrument requires that it be delivered for the purpose of giving the person receiving the instrument the right to enforce it. A negotiable note can be transferred without being negotiated. That transfer would be effected by the physical delivery of the note. See N.J.S.A. 12A:3-203(a). In that circumstance, the transferee would not be a holder, as that term is used in the UCC. Such a transferee, however, would still have the right to enforce the note. The UCC deals with that circumstance in the following language: Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the  instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument. N.J.S.A. 12A:3-203(b).

The negotiation of the instrument, on the other hand, requires both a transfer of possession and an endorsement by the holder. An instrument which is payable to bearer may be negotiated by transfer alone. Put otherwise, an instrument payable “to order” can be negotiated by delivery with an endorsement, while an instrument payable “to bearer” can be negotiated by delivery alone. N.J.S.A. 12A:3-201. To enforce the note at issue here as a holder pursuant to N.J.S.A. 12A:3-301, plaintiff would have to establish that it received the note, through negotiation, at the appropriate time. That would require that the note be endorsed prior to or at the time of delivery, either in favor of plaintiff or in blank. N.J.S.A. 12A:3-301 also provides that an instrument may be enforced by “a non holder in possession of the instrument who has the rights of a holder.” How does one obtain that status? That may occur, by example, where a creditor of a holder acquires an instrument through execution. See The Law of Modern Payment Systems and Notes 3.01 Miller and Harrell (2002). More frequently, that status will be created by the “transfer” of the instrument, without negotiation. As already noted, transfer occurs when the instrument is delivered for the purpose of giving the person receiving the instrument the right to enforce it. See N.J.S.A. 12A:3-203(a). The statute also provides that the transfer of the instrument, without negotiation, vests in the transferee the transferor’s right to enforce the instrument. See N.J.S.A. 12A:3-203(b). That circumstance can be illustrated by reference to the dispute presented here. The note at issue, as originally drafted, was payable “to the order of” the original lender. The negotiation of the note, in that form, would require endorsement, either to a designated recipient of the note or in blank. The note, however, could be transferred without an endorsement. Assuming the transfer was for the purpose of giving the recipient the ability to enforce the note, the recipient would become a “nonholder in possession with the rights of a holder.” That would require, however, the physical delivery of the note. A number of cases recognize that there can be constructive delivery or possession, through the delivery of the instrument to an agent of the owner. See Midfirst Bank, SSB v. C.W. Haynes & Company, 893 F. Supp. 1304, 1314-1315 (S.C. 1994); Federal Deposit Insurance Corp. v. Linn, 671 F. Supp. 547, 553 8 (N.D. Ill. 1987); and Corporacion Venezolana de Fomento v. Vintero Sales Corp, 452 F. Supp. 1108, 1117 (S.D.N.Y. 1978). Under either of the provisions of N.J.S.A.12A:3-301 which are at issue here, the person seeking to enforce the note must have possession. That is required to be a holder, and to be a nonholder in possession with the rights of a holder. The application of the provisions of the UCC to the dispute presented here will be discussed below.

MERS The Mortgage Electronic Registration System (hereafter, MERS), is a unique entity. Its involvement in the foreclosure process has been the subject of a substantial amount of litigation throughout the country, resulting in the issuance of a number of reported opinions. Recently, MERS was the focus of a decision of the Supreme Court ofKansas, reported as Landmark National Bank v. Kesler, 289 Kan. 528, 216 P.3d. 158 (Kan. 2009) which is now cited frequently in this court. That opinion reviews the manner in which MERS functions, the potential problems it can create, and some of the competing policy issues presented. The opinion also cites a variety of published opinionsfrom around the country, addressing those same issues.

In essence, MERS is a private corporation which administers a national electronic registry which tracks the transfer of ownership interests and servicing rights in mortgage loans. Lenders participate as members of the MERS system. When mortgage loans are initially placed, the lenders will retain the underlying notes but can arrange for MERS to be designated as the mortgagees on the mortgages which become a part of the public record. In that context, the lenders are able to transfer their interests to others, without having to record those subsequent transactions in the public record. See Mortgage Elec. Reg. Sys. Inc. v. Nebraska Depart. Of Banking, 270 Neb. 529, 530, 704 N.W.2d 784 (2005), cited in Landmark. The process is apparently cost efficient, from the perspective of the lenders. Among other things, the use of MERS permits lenders to avoid the payment of filing fees that might otherwise be required with the filing of multiple assignments. By the same token, it can make it difficult for mortgagors and others to identify the individual or entity which actually controls the debt at any specific time. See Landmark, 216 P.3d. at 168. On occasion, foreclosure actions are also brought in the name of MERS. When MERS is involved, defendant/borrowers often argue there has been a “separation” of the note and mortgage impacting on the plaintiff’s ability to proceed with the foreclosure. That argument has been raised here and will also be addressed below.

SECURITIZATION

This case also involves the securitization of mortgage loans, a practice which is facilitated by the MERS system. Trial courts in this state regularly deal with the foreclosure of mortgages which have previously been securitized. Generally, one or more lenders will sell substantial numbers of mortgage loans they have issued to a pool or trust.

Interests in that pool or trust are then sold to individual investors, who receive certificates entitling them to share in the funds received as the underlying loans are repaid. That can occur without any notice to the debtors/mortgagors who remain obligated on the original notes. Other entities, generally called “servicers,” are retained to administer the underlying loans. Those servicers or additional “subservicers” will be responsible for collecting and distributing the funds which are due from the debtors/mortgagors. Many are given the authority to institute and prosecute foreclosure proceedings.

The note executed by defendant Raftogianis is clearly a negotiable instrument as that term is defined by the UCC. In the terms of the statute, the note is payable to bearer or to order, and it is payable on demand or at a definite time. While the note contains detailed provisions as to just how payment is to be made, it does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money. See N.J.S.A. 12A:3-104. The note recites that defendant Raftogianis “promises to pay U.S. $1,380,000.00 … plus interest, to the order of the Lender,” then referring to “the Lender” as American Home Acceptance, beginning with payments due in November 2004. See N.J.S.A. 12A:3-104(a)(1), (2) and (3). This note, as originally drafted, was payable “to order.” At some point, however, the note was indorsed in blank. The original note was produced at oral argument on the motion for summary judgment. It contained the following indorsement:

WITHOUT RECOURSE
BY AMERICAN HOME MORTAGE ACCEPTANCE, INC.
_________________________
RENEE BURY
ASST. SECRETARY

Ms. Bury’s original signature was just above her printed name in that indorsement. Defendant had signed the note on September 30, 2004, payable to the order of American Home Acceptance. In that form the note could be transferred by delivery, but could only be negotiated by indorsement. The indorsement in blank, however, would effectively make the note payable “to bearer,” permitting it to be transferred and negotiated by delivery alone, without any additional indorsement. While it was clear the note had been indorsed prior to the time it was presented to the court, presumably as a part of the securitization process, it was not clear just when that occurred, or when the note had been physically transferred from American Home Acceptance to some other individual or entity.

The assignment from MERS was executed and recorded a short time after the complaint was filed. That document is dated February 18, 2009. It is captioned “Assignment of Mortgage.” It recites that MERS, as nominee for American Home Acceptance, transfers and assigns the mortgage at issue to Bank of New York, as Trustee.

The assignment refers to the mortgage as securing the note at issue. It recites the transfer of the mortgage “together with all rights therein and thereto, all liens created or secured thereby, all obligations therein described, the money due and to become due with interest, and all rights accrued or to accrue under such mortgage.” The assignment was executed by one Linda Green, as Vice President of MERS, as nominee for American Home Acceptance. Ms. Green’s signature was notarized. The assignment was recorded with the Atlantic County Clerk on February 24, 2009. It does appear the assignment was intended to indicate that the debt in question had been transferred to the Bank of New York as Indenture Trustee in February 2009. It is now apparent that is not what occurred.

In any event, the matter proceeded in the vicinage based upon the filing of defendant’s contesting answer. While discovery was permitted, the parties apparently elected to forego any formal discovery. Plaintiff filed its motion for summary judgment in January 2010. The motion was based upon a certification from plaintiff’s counsel providing copies of the note, the mortgage and the February 2009 assignment. While the copy of the note provided with the motion did contain the blank indorsement noted above, there was no information provided as to when the note was indorsed, when the note was physically transferred, or where the note was being held. Defendant filed written opposition, challenging the validity of the MERS assignment. Plaintiff responded with a certification executed by a supervisor for American Home Mortgage Servicing, Inc., the servicer for the loans.

THE MERS ASSIGNMENT–THE SEPARATION OF THE NOTE AND MORTGAGE

The issue is framed, at least in part, by the description of MERS as “nominee.” The use of that term, as it is used by MERS, was analyzed in some detail in the decision of the Supreme Court of Kansas in Landmark, a case relied upon by defendant and cited above. Landmark involved a property which was encumbered by two mortgages. The loan provided by Landmark National Bank was secured by a first mortgage payable to it. There was a second mortgage on the property securing a loan that had been provided by Millennia Mortgage Corp. Millennia was a participant in MERS. The second mortgage securing the debt due Millennia was in the name of MERS “solely as nominee” for Millennia. The Millennia mortgage was subsequently transferred or assigned to Sovereign Bank. That transfer was not reflected in the public record. Landmark filed an action to foreclose its first mortgage naming Millennia, but neither MERS nor Sovereign as defendants. No one responded on behalf of Millennia and the matter proceeded through judgment and sale. Sovereign subsequently filed a motion to set aside the judgment, arguing that MERS was a “contingently necessary party” under Kansas law. The trial court concluded that MERS was not a real party in interest and denied the
motion to set aside the judgment. Both the Court of Appeals and the Supreme Court of Kansas affirmed, essentially concluding that MERS did not have any real interest in the underlying debt. Notably, the opinion of the Supreme Court of Kansas recognizes the potential for the separation of interests in a note and related mortgage. In that context, the opinion addressed the use of the term “nominee” in some detail, as follows: The legal status of a nominee, then, depends on the context of the relationship of the nominee to its principal. Various courts have interpreted the relationship of MERS and the lender as an agency relationship. (Citation omitted)
. . .
The relationship that MERS has to Sovereign is more akin to that of a straw man than to a party possessing all the rights given a buyer. A mortgage and a lender have intertwined rights that defy a clear separation of interests, especially when such a purported separation relies on ambiguous contractual language. The law generally understands that a mortgagee is not distinct from a lender: a mortgagee is “[o]ne to whom property is mortgaged: the mortgage creditor, or lender.” Black’s Law Dictionary 1034 (8th ed. 2004). By statute, assignment of the mortgage carries with it the assignment of the debt. K.S.A. 38-2323. Although MERS asserts that, under some situations the mortgage document purports to give it the same rights as the lender, the document consistently refers only to rights of the lender, including rights to receive notice of litigation to collect payments, and to enforce the debt obligation.
The document consistently limits MERS to acting “solely” as the nominee of lender. 289 Kan. 538-540.

While the Landmark court recognized that issues might be raised as to an alleged separation of a note and mortgage, it was not required to address those issues directly. Its analysis of the role MERS plays as nominee, however, supports the conclusion reached by this court with respect to that issue. MERS, as nominee, does not have any real interest in the underlying debt, or the mortgage which secured that debt. It acts simply as an agent or “straw man” for the lender. It is clear to this court that the provisions of the mortgage describing the mortgagee as MERS “as nominee” were not intended to deprive American Home Acceptance of its right to security under the mortgage or to separate the note and mortgage.

It is a fundamental maxim of equity that “[e]quity looks to substance rather than form.” See Applestein v. United Board & Carton Corp., 60 N.J. Super. 333, 348 (Ch.Div. 1960) aff’d o.b., 33 N.J. 72 (1960). The courts have applied that principle in dealing with mortgages in a variety of contexts. So it is that an assignment of a bond or note evidencing a secured obligation will operate as an assignment of the mortgage “in equity.” See 29 New Jersey Practice, Law of Mortgages 11.2, at 748 (Myron C. Weinstein) (2d ed. 2001) (citing Stevenson v. Black, 1 N.J. Eq. 338, 343 (Ch. 1831) and other cases). Conversely, commentators have noted the propriety of treating the assignment of a mortgage, without a specific reference to the underlying obligation, as effectively transferring both interests. But it does not follow that an assignment in terms of the “mortgage” without express reference to the secured obligation is insufficient to transfer the obligation and is therefore a nullity, as some courts have held. As Mr.Tiffany long ago pointed out, The question is properly one of the construction of the language used, and in arriving at the proper construction, evidence of the sense in which that language is ordinarily used is of primary importance. The expression “assignment of  mortgage” is almost universally used, not only by the general public, but also by the Legislature, the courts, and the legal profession, to describe the transfer of the totality of the mortgagee’s rights, that is, his right to the debt as well as to the lien securing it, and to hold, as these cases apparently do, that when one in terms assigns a mortgage, he intends, not an effective transfer of his lien alone, which is an absolute nullity, not only ignores this ordinary use of the term “mortgage”, but is also in direct contravention of the well recognized rule that an instrument shall if possible be construed so as to give it a legal operation. See 29 New Jersey Practice, Law of Mortgages 11.2 at 754(Myron C. Weinstein)(2d ed.2001) (citing 5 Tiffany on Real Property 428-29). It is apparent there was no real intention to separate the note and mortgage at the time those documents were created. American Home Acceptance remained the owner of both the note and mortgage through the date the loan was securitized. It did have the right to transfer its interests when the loan was securitized.

It was entirely appropriate to argue that the February 2009 assignment from MERS, as nominee for American Home Acceptance, to the Bank of New York, as Trustee, was ineffective. From the court’s perspective, that assignment was, at best, a distraction. The actual transfers of interests in the note and mortgage occurred in different ways. There was no reason, however, that plaintiff could not acquire the right to enforce the note and mortgage through those other  transactions. In that context, defendant’s attack on plaintiff’s right to proceed based on the alleged separation of the note and mortgage is rejected.

CONCLUSION

Defendant’s attack on plaintiff’s ability to proceed with the foreclosure based on the alleged “separation” of the note an mortgage was rejected. Plaintiff, however, failed to establish that it was entitled to enforce the note as of the time the complaint was filed.

In this case, there are no compelling reasons to permit plaintiff to proceed in this action. Accordingly, the complaint has been dismissed. That dismissal is without prejudice to plaintiff’s right to institute a new action to foreclose at any time, provided that any new complaint must be accompanied by an appropriate certification, executed by one with personal knowledge of the circumstances, confirming that plaintiff is in possession of the original note as of the date any new action is filed. That certification must indicate the physical location of the note and the name of the individual or entity in possession.

An appropriate order has been entered

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Dylan Ratigan

The dire straits of the middle class of America has made it near impossible for our politicians to keep up the pretense that our current government truly works for the “people.” Between the multiple overt and secretive bailouts, the massive bonuses and the circular use of our tax money to lobby for these continued handouts, you can no longer hide from the evidence.

When Senator Durbin said “The banks… frankly own this place,” you realize it was not in jest.

Couple this with recent protections handed by the Supreme Court to corporations to directly influence elections and it can make things seem hopeless for those not on Wall Street or their chosen politicians. Favored CEOs and now even foreign countries get all the printed money they need, leaving us paying both our bills and theirs.

And now nearly a quarter of all Americans are currently underwater in their mortgage because of that steadfast honor.

If you are one of them, chances are you didn’t do anything wrong. Almost all of you were not subprime borrowers or speculators, but merely people buying a house that they thought they could afford at the time. You were just unlucky in that you bought a house during a time when an outdated Wall Street and their complicit politicians decided to use housing to regain the income they lost due to the Schwabs and Etrades of the internet age.

You didn’t cause this mess. They did.

Now you are struggling to make the same payments on this mortgage on your now overpriced home even in light of a crashing economy and massive deflation, all while the government does everything in its power to help Wall St. keep the bonuses coming.

Well, it is becoming time to take matters into your own hands… I suggest that you call your lender and tell them if they don’t lower you mortgage by at least 20%, you are walking away. And if they don’t agree, you need to consider walking away.

It probably doesn’t feel right to you.

That is because you probably are a good person. But your mortgage is a business deal, and it is not immoral to walk away from a business deal unless you went in to the deal with the intention of defaulting.

But somehow, even though the corporations are pumped to exercise their new rights, former bankers like Henry Paulson, current ones like Jamie Dimon and — get this — now even Fannie Mae execs want to keep you from exercising your rights.

But before you let them (or anyone commenting below) force you into paying that $500k mortgage on a $300k house, ask them if they’ll push Jerry Speyer into “honoring his obligation” by breaking into his $2 billion personal piggy-bank to keep paying for Stuyvesant Town?

Or how about asking Hank and Jamie to lecture fellow bailed-out CEO John Mack about how “you’re supposed to meet your obligations, not run from them”? Maybe make him use some of his $50+ million for those buildings he bought in San Francisco?

And before shaming and punishing American homeowners, did they nag Steve Feinberg about helping “teach the American people…not to run away” by writing a check out of his billion-dollar pocket to cover all the stiffed landlords and vendors at Mervyn’s? After all, at least you aren’t single-handedly putting 1,100 employees out of work when you walk on your mortgage.

As part of the deal for your house, your mortgage holder gets interest payments from you and they also use the note to your house for their capital reserves. In return, they take the risk of a foreclosure. In many states, you paid extra to have a non-recourse loan where the lender just gets the house back if you stop paying — your interest rate would’ve been much lower if you were held personally liable like a student loan. But if you still feel bad, then donate the money saved to charity instead of to their bonuses. And when someone tries telling you why it is so wrong, here are some answers:

– Yes, it might seem selfish, but you are actually going to help fix our country the right way, through the use of pure capitalism. There are 3 parties involved in your mortgage — the mortgage holders, the servicing bank and you. You probably want to stay in your house. Most of the people who actually own your mortgage also want you to stay in your house, preferring a mortgage reduction that you keep paying instead of the total loss of a foreclosure. But the major banks (BofA, Wells Fargo, JP Morgan, Citi, etc.) that underwrite and service the loans don’t care about either of you. They (with the aid of their government) just care about hiding their true financial condition for long as possible so they can continue to bonus themselves outrageously. The credible threat of you walking away from your mortgage en masse is the only market-based solution that will force these banks to work with the mortgage holders on your behalf.

– No, you will not “hurt” your neighbors — certainly not near the scale of the banksters. Chances are someone just as nice will you will move in and (unlike you) pay a fair, non-inflated price for the house. Encourage your neighbors to fight back against the banks and ask for their own mortgage reductions as well.

– Yes, it might make getting a loan harder for everyone. Considering the spate 0% down NINJA loans over the past decade, that probably isn’t a bad thing.

– Yes, it might hurt your credit. But with time, people bounce back from having foreclosures on their record. Search online and then talk to a lawyer about the repercussions, which vary by state.

– No, the banks won’t necessarily pass the losses on to customers. They already make a lot of money. If costs are passed on to every consumer without banks competing on price, that’s a sign of illegal collusion or a monopoly. Let’s fix that instead of just letting banks ruin our lives. They might, however, not all make $145 billion in bonuses next year doing something fundamentally so easy that it is an unpaid job in Monopoly.

Meanwhile, our captured government has made it clear that they want to further reward these banksters because there are clearly better ways to “save” the economy without rewarding those most responsible for the damage.

Instead of claw backs for the past theft and strong financial reform for the future, they choose to cover-up the gross misuse of our tax money, making our country worse by helping the criminals on the backs of the most honest.

But thankfully, in this country we still have the tools to fight back and regain our country. Our vote, our voice, our laws and what we choose to do with every penny we have that doesn’t go to taxes are the benefits of our hard-fought freedom, and in this battle we must use them all to fight back. It’s time for the citizens to once again own this place.

Follow Dylan Ratigan on Twitter: www.twitter.com/DylanRatigan

There is something not right here and I think the outcome might surprise us!

by Morgan Skinner, KCSG News

St. George, UT) – A Notice of Appeal to Federal Judge Clark Waddoups court order vacating an Injunction against Bank of America and its subsidiary ReconTrust Company halting all foreclosures in Utah was filed Friday, June 25, 2010 by St. George attorney John Christian Barlow.

Barlow told KCSG News he was “troubled by Court ruling but unrelenting in pursuit of redress for his client (Cox) and other homeowners who have become victims of mortgage lending gone mad.” Barlow said he has motioned the court to allow Cox’s complaint to include a “Class of Citizens” currently in foreclosure in Utah. Barlow contends his client’s rights to remedies were taken away from her by a faceless lender who continues to overwhelm homeowners and the judicial system with motions and petitions as a remedy instead of making a good-faith effort in face-to-face negotiations to help homeowners as the Utah legislature intended. The David and Goliath legal battle over federal versus states-citizens rights is headed to the 10th Circuit Court.

Judge Waddoups’ Memorandum of Explanation in support of vacating a statewide Preliminary Injunction halting all foreclosures by the Bank of America only served to raise more questions.

Some of the questions include:

1.) Why is the judge’s ruling at variance with his previous rulings this year as noted in a Letter to Judge Waddoups submitted to the court June 10th, 2010 by the Plaintiff’s counsel John Christian Barlow, Esq. and E. Craig Smay, Esq. and posted June 21, 2010 in the court docket, after the Ruling and Memorandum of Explanation.

2.) Why did Judge Waddoups essentially brush aside the Plaintiff’s pleading that included the Supreme Court decision Cuomo vs. Clearing House Association in which the Court said…“If a State chooses to pursue enforcement of its laws in court, its targets are protected by discovery and procedural rules” meaning a state has a right to enforce its own laws against national banks.

3.) Why hasn’t Judge Waddoups recused himself from all Bank of America or ReconTrust Company related cases since he was a senior partner in the law firm Parr, Waddoups, Brown, Gee & Loveless now Parr, Brown, Gee & Loveless that represented the Bank of America in Utah Fourth District Court, Case No. 070402786 before he took the bench. And, the law firm continues to represent the Bank of America and its subsidiaries. According to the Code of Conduct for US Judges, a judge should recuse himself when there may be a conflict of interest.

4.) Why shouldn’t Judge Waddoups recuse himself from any case in which his old law firm represents either the plaintiff or the defendant until he takes full distribution of his retirement fund with the law firm as disclosed in Judge Waddoups most recent Financial Disclosure Statement that shows he only took a partial distribution of his retirement from the firm’s 401K

“Bank of America acquired the bankrupt Countrywide Home Loan portfolio in a stock deal June 3, 2009. And, according to the ReconTrust website, the Bank of America has over 1113 Utah homeowners in foreclosure this month, and the numbers keep growing,” Barlow said.

The second part of the Plaintiff’s complaint has yet to be addressed. It alleges neither the lender, nor MERS*, nor Bank of America, nor any other Defendant, has any remaining interest in the mortgage promissory note. The note was bundled with other notes and sold as mortgage-backed securities or otherwise assigned and split from the Trust Deed. Barlow said he has begun a quiet title action and expects the court to adjudicate it according to the facts of evidence which will clearly demonstrate lenders bundling notes into securities and trading in the financial markets have created the underlying homeowner’s mortgage nightmare.

*MERS(Mortgage Electronic Registration System) is a process designed to simplify the way mortgage ownership and servicing rights are originated, sold and tracked created by the real estate finance industry. MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans as securities.

As many have seen SFF was the first to expose this Bogus Assignment scandal via a YouTubeVideo.

Via: NakedCapitalism by Yves Smith

I’m not quite certain how to calibrate journalism American Banker style, but I found this article, “Challenges to Foreclosure Docs Reach a Fever Pitch,” (sadly, subscription only, e-mailed by Chris Whalen), to be both interesting and more than a tad disingenuous.

The spin starts with the headline, it’s a doozy. The “challenge to foreclosure documents” message persists throughout the article, and it’s perilously close to a misrepresentation:

Because the notes were often sold and resold during the boom years, many financial companies lost track of the documents. Now, legal officials are accusing companies of forging the documents needed to reclaim the properties.

On Monday, the Florida Attorney General’s Office said it was investigating the use of “bogus assignment” documents by Lender Processing Services Inc. and its former parent, Fidelity National Financial Inc. And last week a federal judge in Florida ordered a hearing to determine whether M&T Bank Corp. should be charged with fraud after it changed the assignment of a mortgage note for one borrower three separate times…

In many cases, [plaintiff attorney] Kowalski said, it has become impossible to establish when a mortgage was sold, and to whom, so the servicers are trying to recreate the paperwork, right down to the stamps that financial companies use to verify when a note has changed hands…

In a notice on its website, the Florida attorney general said it is examining whether Docx, an Alpharetta, Ga., unit of Lender Processing Services, forged documents so foreclosures could be processed more quickly.

“These documents are used in court cases as ‘real’ documents of assignment and presented to the court as so, when it actually appears that they are fabricated in order to meet the demands of the institution that does not, in fact, have the necessary documentation to foreclose according to law,” the notice said..

Yves here. Let’s parse the two messages:

1. Note how the problem is presented as one of “documentation”, implying it is not substantive.

2. Because everyone knows mortgages were sold a lot, (which is clearly mentioned in the piece) the idea that some somehow went missing (or as the piece suggests, the “documentation” is missing even though the parties are presented as if they know who really owns the mortgage) is presented as something routine and not very alarming.

OK, let’s dig a little deeper. Even though the media refers to “mortgages”, under the law there are two pieces: the note, which is the indebtedness, and the mortgage (in some states, a “deed of trust”), which is the lien against the property. In 45 of 50 states, the mortgage follows the note (it is an “accessory”) and has no independent existence (as in you can’t enforce the mortgage if you don’t hold the note. You need to have both the note and the mortgage. This is a bit approximate, but will do for this discussion).

Now, the note is a bearer instrument if it is endorsed in blank (as in signed by current owner but not specifically made payable to the next owner, which was common for notes that were sold). It isn’t some damned “documentation”. Remember the days of bonds, when you had the real security, or stock certificates? This is paper with a hard monetary value, the face amount of the note (as long as it’s current, anyhow).

So now go back and look at that little extract. This “oh business was so busy we mislaid a lot of paper” isn’t some mere filing error. It’s like saying you left an envelopes full of cash in the subway on a regular basis. In the late 1960s back office crisis on Wall Street, when the volume of stock trading overwhelmed delivery and settlement infrastructure, a LOT of firms went out of business, in the midst of a bull market.

OK, now the second item with the article finesses is the sale of mortgages versus the role of the servicer. For the overwhelming majority of first mortgages, and I believe about 50% of second mortgages and HELOCs, the servicer is working for a trust that holds the notes pursuant to a securitization.

The standard documentation for a RMBS calls for the trust to gave a certification at closing that it has all the notes and it has to recertify that it has all the assets at two additional future dates, usually 90 days out and a full year after closing.

So this “notes were flyin’ around, yeah we lost track” is presumably impossible if we are discussing securitizations. Or put it another way: it means the fraud here is much more extensive than servicers making up documents ex post facto. It means the fraud extended back into how the securitization took place (as in what investors were told v. what actually happened).

And before you say these reports are exaggerated, my limited sample and my discussions with mortgage professional (not merely plaitiff’s attorneys but mortgage industry lifers) suggests the reverse.

But what about the second claim in the headline, that this activity has reached a “fever pitch”? Wellie, that’s a distortion too, perhaps to energize those who would be enraged by visions of deadbeat borrowers staying in houses due to fancy legal footwork. Trust me, there are FAR more overextended borrowers living in “free” housing due to banks slowing up the foreclosure process than due to legal battles.

First, the story is ONLY about Florida, despite the hyperventilating tone. And Florida is way ahead of other jurisdictions. There is a group of lawyers that are sharing G2 on these cases, and there are also a fair number of sympathetic judges. Note some states (Minnesota in particular) have both extremely pro bank laws and a business friendly bar. So it’s misleading to make sweeping generalizations; you need to get a bit more granular, which this article fails to do.

Second, the “fever pitch” headline also conveys the impression that this is an epidemic, ergo, these cases are widespread. While it is hard to be certain (this activity is by nature fragmented), at this point, that looks to be quite an exaggeration. The vast majority of borrowers, when the foreclosure process moves forward, don’t fight. They lack the energy and the resources. And when the borrower prevails, the case is typically dismissed “without prejudice”, meaning if the servicer and trustee get their act together, they can come back to court and try again.

Most of the battles against foreclosure appear to fall into one of two categories:

1. The borrower can afford the mortgage, but has fallen behind due to what he thinks is a servicing snafu. I can give you the long form, but the way servicers charge extra fees is in violation of Federal law and is designed to put the borrower on a treadmill of escalating fees. And they do not typically inform the borrower that fees have compounded until 6 or more months into the mess, and by that time, the arrearage can be $2000 or more. The borrower is unable to fix the servicing error, the fees continue to escalate, and the house goes into foreclosure.

2. The borrower has filed for a Chapter 13 bankruptcy, but the trustee is fighting the bankruptcy stay and trying to seize the house.

So why this alarmist American Banker article? Even if the numbers of successfully contested foreclosures are not (yet) large, the precedents being set are very detrimental to the foreclosure mills, the servicers, and the trustees. Moreover, the costs of fighting these cases can quickly exceed the value of the mortgage. So it would not take much of an increase in this trend to wreak havoc with servicer economics, and ultimately, the losses on the trust, particularly on prime mortgages, where the loss cushions were considerably smaller than on subprime.

I suspect the real reason for alarm isn’t the “fever pitch,” meaning the current level of activity. It’s that a state attorney general is throwing his weight against the servicers, and what he is uncovering is every bit as bad as what the critics have been saying for some time. That may indeed kick up anti-foreclosure efforts in states with open-minded judges to a completely new level.

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These are bogus assignments used to foreclose on your home. Imagine a judge accepting this to let them take the roof off of you.

There was many of these and they are all over the US.

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