The Post finds problem in 92% of bank foreclosure filings

4 Nov

From: Charles Cox []
Sent: Wednesday, August 17, 2011 9:36 AM
To: Charles Cox
Subject: The Post finds problem in 92% of bank foreclosure filings


Posted on August 17, 2011 by Neil Garfield


EDITOR’S NOTE: My figures tracking thousands of foreclosures indicate the same thing that the New York Post found. There are a scattered few foreclosures that are good old-fashioned foreclosures of valid mortgages. The borrower didn’t pay and there were no third party payments; the mortgage documents were the normal variety without nominees, MERS, substitutions of Trustee, and new parties that are clearly outside the chain of title. It can be expressed as a rule: if there is a substitution of trustee, there is a 99% chance the loan was (a) securitized and (b) invalid, without any valid transfers of authority or ownership. If MERS was involved, the same rule applies.

So the question is not one of probability or theory — the forgery of documents, the origination of the loan, the fabrication of documents, the intentional misrepresentation by counsel (with plausible deniability, but nonetheless knowing) — all contribute to the same conclusion. The substitutions of counsel were in virtually ALL CASES faked, which means that the notice of default, the notice of sale, the auction, the auction sale, the deed upon foreclosure are all void or voidable, depending upon state law. The proof of claim in bankruptcy is faked.

So now what? Those of you who have been following the blog for years know what I am going to say. Unless we change our legal system and throw out hundreds of years of statutory law, common law and standard practices in the real estate transactions, the last owner of the property still owns it. That would be the homeowner. The implications of this are enormous, I know. It means that even people who were foreclosed and evicted (illegally) from their homes have a right to claim ownership, move in, and possess the property — regardless of when it was. It means that there is a 92% probability that out of the 5 million families dispossessed from their homes, at least 4,500,000 of them could return to those properties.

So what would be the status of their ownership, possession and their obligation when their loan was funded? There are many technical issues that present themselves in this scenario, but generally speaking, if you check with any duly licensed attorney in the jurisdiction in which your property is located you will probably find that the following applies:

1. Legally the home is owned in fee simple absolute by the homeowner.

2. Other documents on the title registry will need to be removed through a lawsuit called “Quiet Title.” If there is any legislation required it will be to streamline the Quiet Title procedures.

3. Among the other documents to be removed or ignored, depending upon state law, is the mortgage or deed of trust signed at closing by the homeowner. See my next post on the validity of the original mortgage.

4. All of the foreclosure documents and all of the sale and deed documents from the foreclosure must be removed to have clear title.

5. If the arriving homeowner has purchased the home from another homeowner who was subject to one of these mortgages and/or foreclosures or if there is prior foreclosure the chain of title, all of those must be cleared in order to have clear title.

6. A title company will no longer issue title insurance (unless it is one of the under-capitalized shill title carriers started by the banks) without stating an exception to their commitment with respect to the issue of title in securitized loans and claims arising out of the fact that the foreclosures, transfers or satisfactions were not within the chain of title.

7. The obligation owed to unknown undisclosed creditors is not as was stated in the note on any of those securitized context transactions. There are varying degrees of misstatement in the note but the usual defects are that the actual creditor was never specified and the terms that the actual creditor received included promises from third parties (in the PSA) about payment of the monthly payment, payment of the interest and payment of the principal on each securitized mortgage. Thus the balance can never be known until the parties — all of them — provide an accounting.

8. In each state there is a cause of action for accounting, not necessarily known exactly under that name. You might also want to seek appointment of a receiver to make sure that the payments have been committed properly and not diverted, but that last point probably has the issue of standing attached to it — i.e., it is more properly brought by the investor.

9. If there is a balance due under the obligation it is unsecured, discharged in bankruptcy, and not subject to any security agreement in which any person or entity can make a claim to ownership of anything the homeowner owned, including the house that was the subject of foreclosure or will be subject to foreclosure.

10. Occupied homes by virtue of foreclosure sales that fall under this scope are probably subject to eviction or forcible detainer or unlawful detainer, depending upon the state. Thus the arriving homeowner would need to evict the people who are now living in the home. Again if legislation is to be passed, it should be to smooth the transition in such circumstances and establish a clear right of action for damages for those evicted through no fault of their own.

11. If there is a balance due under the obligation that arose when the loan was funded, then it is subject to offset for any damage claims that are owned by the homeowner for slander of title, trespass, civil theft, fraud, TILA violations, RESPA violations etc.

The Post finds problem in 92% of bank foreclosure filings

August 15, 2011 |

Filed underLenders <;
Posted by Istvan Fekete <;

Since last fall when the whole robo-signing scandal started banks are promising they won’t do it again. But evidences around every corner show the exact opposite: banks are still foreclosing on properties without any right to do it.

A recent probe comes from the New York Post. And the result: In a staggering 92 percent of the claims brought by creditors asserting the right to foreclose against bankrupt families in New York City and the close-in suburbs, banks and mortgage servicers couldn’t prove they had the right to kick the families out on the street, a three-month probe by The Post has shown.

The Post discovered that robosigned documents are still included in the foreclosure paperwork, or – another situation– banks are pressing foreclosures without the proper paperwork and so on.

After reviewing more than 150 Chapter 13 bankruptcy filings from June 2010 in New York’s Eastern and Southern federal court districts the team “put together a random sample of 40 cases where creditors such as banks – but more often loan servicers – filed proofs of claim for first mortgage debt.

The research unearthed claims riddled with robosigners, suspicious documents and outrageous fees. And in a stunning 37 out of 40 cases, The Post discovered a broken chain of title from the original lender to the company now making claim against a local family for its home and thousands of dollars in questionable fees,” the Post writes.

The paperwork was seen by experienced foreclosure defense lawyers, and these experts agreed that the findings reflect a widespread pattern of malfeasance by banks and loan servicers.

“In-court borrowers are by definition broke and can’t hire document experts, but anybody who knows this terrain knows that stuff that looks this suspicious almost certainly is fraud,” says financial industry expert Yves Smith. “There are too many miraculous copies of documents showing up at the eleventh hour and nonsense like that to think this is clean.”

“The largest financial institutions in the US are doing it every day, and I have not seen it slow down or stop,” says Westchester attorney Linda Tirelli. “The game is always the same: Make up documents and foreclose as fast as you can.”

When the troubled homeowners face the foreclosure lawsuit they don’t have any lawyer to help them see through the paperwork servicers file. However, there are a few judges that have a critical eye, such as Judge Arthur Schack, or New York’s chief judge Jonathan Lippman.

In its investigation, the Post uncovered a pattern of problems centered on mortgage assignments – used when a mortgage is sold to a third party – and endorsements of notes, which is the paperwork that rides with the transfer of the mortgage giving the holder a rightful claim to foreclose.

These included:
* Missing or highly questionable endorsements of notes.
* Questionable timing of documents, including mortgage assignments by companies that were no longer in business on the date of the assignment.
* Signatures by robosigners — individuals who slapped their signature on hundreds of affidavits without attesting to their accuracy — on mortgage assignments.
* Proof-of-claim filings by mortgage servicers without documentation of their legal right to do so on behalf of the owner of the loan.
* Assignments created after the debtor filed for bankruptcy, when the law prevents a creditor from making any new claims.
* Mortgage assignments directly from the originator to the trustee for the securitized trust, bypassing the necessary intervening steps of transfer to the sponsor and depositor.

3 Responses to “The Post finds problem in 92% of bank foreclosure filings”

  1. myland909 May 22, 2012 at 3:51 am #

    Around November of 2011 my parents home of 22+ years was foreclosed on while my father was incarcerated. I was at the residence alone when the new owner/mortgage person came to the door and informed me of the house being sold, and basically eventually causing us to leave. My parents were desperately trying to get a loan mod before this, yet ALWAYS got the run around with no results. My mother had sent certified mail and still, no resolution or assistance from any parties involved in their mortgage. I’f often over hear their constant phone conversations that were constantly directed around this circle of entities claiming no responsibility to provide any form of help. When my father was released, it was a month after the sale, and he spent days, hours, and weeks calling around asking for help within the ones involved, and still no one assumed any responsibility to even offer information if the house was even sold! My dad had to find out on the internet, off a basic address seach that our home was sold, and for DIRT CHEAP! I mean DIRTY, SCUM, DIRT CHEAP it brings tears to my eyes JUST THINKING ABOUT HOW BAD THEY TOOK ADVANTAGE OF. My father and I both took on our own research of what is really happening and now that we understand the process, and course involved IT IS TOO LATE. The new owner/realtor is evicting us this week. I am CERTAIN there is fraud involved, but everyone says it is too late. As long as I am here, I REFUSE TO GIVE UP. I know even the new realtor knows something and is hiding it and I need to find out what it is before it is too late! Please help us Tim! We have very little time left, and I am CERTAIN this is another unlawful foreclosure. Even the fact that my father was never notified of the foreclosure, and was not able to react before it was sold should be enough reason to make the sale invalid. It is so sad that our system is so messed up that so many people have lost their homes, their lives over this. I wont leave without a fight. This is my family, my life, and I will dedicate every day to this until justice is served. If you have any advice it would be GREATLY APPRECIATED.


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