How to Get the Benefits of a Securitization Audit FREE

Securitization Audits Decline Dramatically… Find Out Why

Securitization Audits Chart
Why the Shocking Decline in Securitization Audits?

 

How to Get the Benefits of a Securitization Audit FREE

Benefits?  WHAT Benefits? Learn below why the audit is a complete waste of resources.

Copyright © 1 April 2014 by Bob Hurt.  All rights reserved.  http://MortgageAttack.com

TECHNICAL ALERT:  I, the author, am not an attorney or practitioner, and I do not seek in this article to solve any specific problem for any specific person.   I provide this information for academic and discussion purposes.  Consultant a COMPETENT attorney on all questions of law.  To ensure competence, demand and verify a winning record in similar cases before you trust his battle scheme.

Background:  Why I Write this Article

Securitization audits have suffered a SHOCKING decline recently as foreclosure victims learned the hard way that the audits give no value to the foreclosure process, and foreclosure victims cannot use them to avert foreclosure.

Hundreds of people have called me personally or written to me about their mortgage problems since 2009.  I would say thousands, but I have lost count. That year I started giving people FREE information about what works and what does not win mortgage disputes against creditors and their agents and associates.

The majority of those callers had already blown hundreds to thousands of dollars on a “Securitization Audit” or flimsy “Loan Audit” which did not have the worth of the powder to blow them to hell.  Many mortgagors had also blown thousands to pay a foreclosure “pretense defense” attorney for the privilege of dragging out the foreclosure.  Most of those foreclosure victims eventually lost their homes to foreclosure auction.  Many who did loan mods went into foreclosure again and either lost the home or soon will.

Every one of those people bought a service from a clueless “Kool-Aid Drinker” or an out-and-out scammer (charlatan, cheat, con artist).  Even those attorneys who promised “We’ll keep you in the house as long as we can” committed legal malpractice if they failed to examine the mortgage transaction comprehensively for evidence of fraud and other torts, contract breaches, regulation breaches, and legal errors, and as a result failed to lodge the causes of action and affirmative defenses that would have averted foreclosure.

I write this commentary not just to give all those snakes-in-the-grass the literary black eye that they deserve, but also to give the reader something FREE that bozo scammers charge hundreds or thousands for.

I shall tell you, in short order, how to find out who owns your note and why the chain of ownership of the note has no relevance to foreclosure courts.

Securitization audit scammers tell their desperate, clueless foreclosure victim prospects that they will research the “chain of title” and find out who owns the note and what shenanigans happened during transfers of note ownership.   They will suggest that the chain of title to the note really matters in a foreclosure dispute.

In reality, as demonstrated by myriad foreclosure sales, it does not matter at all to the foreclosure judge or trustee.  Those scammers will talk about their certification, credentials, and the crookedness of securitization, putting the note into the trust after the closing date specified in the pooling and servicing agreement (PSA), REMIC violations, Bloomberg terminals for researching Securities and Exchange Commission information, etc.  And they will show you a wad of useless affidavits, and claim to have functioned as expert witnesses.  They will not tell you their affidavits and testimony have no notable effect on foreclosure decisions.

Judges and Lawyers Declare the Securitization Audit CROOKED

I shall prove to you right now that those securitization audit scammers and the charlatan attorneys who con you into paying for such audits are liars and con artists for suggesting such audits have an iota of value.

See, Demilio v. Citizens Home Loans, Inc. (M.D. Ga., 2013) (“Frankly, the Court is astonished by…Plaintiff’s attempt to incorporate such an ‘audit,’ which is more than likely the product of “charlatans who prey upon people in economically dire situation.”)

In other words, after reading this, you show yourself a fool if you ever fall for their suggestions that you need the audit to terminate a foreclosure permanently.

You do not have to take my word for it.  Look at what two attorneys say about securitization audits:

  • “… Most ‘securitization audits’ that I have reviewed are inadmissible in a court of law; they contain a mere opinion of a layman without personal knowledge (direct experience) as to what happened with a particular mortgage note after closing. Why pay a securitization auditor when you can have your grandmother provide an opinion as to what happened with the note and have her sign an ‘audit report’? In reality, in about 95% of all cases, the information supplied by a ‘securitization audit’ is either already publically available, or it is unavailable to either the homeowner or the auditor. Thus, where a homeowner genuinely lacks this information, an outsider’s opinion (in contrast to the bank’s admission) is unlikely to help.”

Gregory Bryl, Foreclosure Defense Attorney, Virginia and Florida.

http://www.veteranstoday.com/2012/03/27/beware-of-the-latest-foreclosure-rescue-scam-securitization-audits/

  • “Mortgage Loan Securitization Audits ARE A CRIME! … THAT INFORMATION IS USELESS IF IT IS NOT ADMISSABLE IN COURT! … So I issue the challenge once again….WILL ANY SO CALLED SECURITIZATION EXPERT PLEASE STAND UP?   PLEASE, SHARE WITH ME ADMISSABLE EVIDENCE OF SUCCESS IN ANY FORECLOSURE OR BANKRUPTCY CASE!” 

Matthew Weidner, Foreclosure Defense Attorney, Florida.

http://mattweidnerlaw.com/mortgage-securitization-audits-they-are-a-crime/

Why A Borrower Defaulting a Valid Loan Cannot Beat Foreclosure

Before I tell you how to get the benefit of a securitization audit FREE, and how to get the name of the note owner, let us examine some essential facts.  To get to those facts, please answer these questions, assuming you have become a mortgagor (borrower):

  1. Did you borrow money to purchase, refinance, or get a line of credit on a home?
  2. Did you sign a note in which you agreed that you had received a loan?
  3. Did you sign a security instrument (Deed of Trust – DOT, or Mortgage) in which you asserted having seisin (possession) and having transferred the estate to the lender for purpose of a mortgage or deed of trust?
  4. Did the lender assign a servicer to service your account (take payments manage, escrow, distribute proceeds, answer your questions regarding servicing the loan)?
  5. Did you make any timely payments to the servicer?

Foreclosure Deals with Breach of Contract

If you answered yes to those questions, then you know you have a contractual relationship with the lender, in which various other entities played a role (realtor, appraiser, mortgage broker, Title Company, attorney, etc.).

Moreover, you know that if either you or the others breach the contract, then that entitles you or the lender to take legal action.  You know that in a judicial foreclosure state the lender may sue you and take the house in a foreclosure sale if you breached the contract.  You know that in non-judicial foreclosure state, the lender may get the trustee to foreclose.

The lender needs to fulfill certain conditions, listed in § 22 of your loan security instrument, prior to such action, such as notify you that you breached the note, accelerate the note to make the balance due and payable now, and then take the matter to the trustee or sue you to get that money or the house.

You Lose the House if You Breached the Note

You SHOULD know that if the lender or his agents or associates engaged in some crooked behavior that invalidated the note or the loan transaction, that will give you reason to sue.

If the lender sues you for a breach and wins, the lender gets your house, or money from its sale, because the lender has a security instrument.

Unlike the lender, you do not have a security instrument that lets you go to the court or trustee to order the lender or his agent or associate to give up his house in some kind of foreclosure sale.  So how do you deal with injuries you suffered in the loan process? And how do you find out who owns the note?

Why Not Ask the Servicer and Complain to the CFPB?

You should know that if you want to learn who owns the note, you do not need a securitization audit because you can just ask the servicer. And that remains true if you want some error in your loan corrected.

You might know, though many do not, that the US Government has established the Consumer Financial Protection Bureau (CFPB) to resolve disputes between borrowers and lenders and their servicers. You can file a complaint at the following web site:

Why You Have No Standing in PSA or Note Assignment Disputes

But wait a minute. Surely you must wonder whether robo-signing, notary falsification of note assignments, assignment to a securitization trust after the closing date specified in the Pooling and Servicing Agreement (PSA), violations of Real Estate Mortgage Investment Conduit (REMIC) rules, and other securitization and assignment issues have any bearing on foreclosure, and whether you can use related arguments to beat foreclosure.  You might actually believe a securitization audit can shine some light on these concerns.

Let us answer another set of questions to get to the truth:

  1. Did you become a party to, become injured by, or become a third party beneficiary of:
    1. The PSA for a trust that owns your note?
    2. Any assignment of your note to another creditor (owner of beneficial interest in the note)?

If you answered NO to both a and b above, then you know that neither the assignment nor the PSA have any effect on you whatsoever.  Surely you know they do not affect whether or not you have breached your note or owe a mortgage loan debt.  So, therefore, you know (do you not?) that you have no standing to dispute or enforce the PSA or any assignment of the note in court.  That means robo-signing of the note (one of those ridiculous things securitization auditors tell you they will find for you) has become irrelevant to you and to any court.

See, Javaheri v. JPMorgan Chase Bank N.A., 2012 WL 3426278 at *6 (C.D. Cal. Aug. 13, 2012). (“Plaintiffs here do not dispute that they defaulted on the loan payments, and the robo-signing allegations are without effect on the validity of the foreclosure process.”)

About Blank Indorsements of the Note

Furthermore, according to the Uniform Commercial Code (UCC), if a creditor indorses the note in blank instead of naming an assignee, the note becomes bearer paper. See, UCC §3-205 https://www.law.cornell.edu/ucc/3/3-205.

  • 3-205. SPECIAL INDORSEMENT; BLANK INDORSEMENT; ANOMALOUS INDORSEMENT.

(a) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument payable, it is a “special indorsement.” When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person. The principles stated in Section 3-110 apply to special indorsements.

(b) If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a “blank indorsement.” When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed.

(c) The holder may convert a blank indorsement that consists only of a signature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.

(d) “Anomalous indorsement” means an indorsement made by a person who is not the holder of the instrument. An anomalous indorsement does not affect the manner in which the instrument may be negotiated.

 

An enormous number of notes bear blank indorsements.  That makes it easy to hand them off without cumbersome paper trails. Thus, whoever holds the note can enforce it, whether or not the holder owns beneficial interest in it. So, try answering this question:

  1. If the most recent indorser of your note indorsed your note in blank, why would you care who owns it?

I suppose you realize that you should not care because the note holder, regardless of identity, will foreclose and take the house if you breach the note.

Who May Enforce the Note, Even if Lost, Stolen, or Destroyed

The UCC defines the “PETE”  – Person Entitled to Enforce the note.  See, UCC §3-301 https://www.law.cornell.edu/ucc/3/3-301.

  • 3-301. PERSON ENTITLED TO ENFORCE INSTRUMENT.

Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

In the event the note becomes lost, destroyed, or stolen, the PETE can enforce the note anyway. See, UCC §3-309 https://www.law.cornell.edu/ucc/3/3-309.

  • 3-309. ENFORCEMENT OF LOST, DESTROYED, OR STOLEN INSTRUMENT.

(a) A person not in possession of an instrument is entitled to enforce the instrument if:

(1) the person seeking to enforce the instrument

(A) was entitled to enforce it the instrument when loss of possession occurred, or

(B) has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred;

(2) the loss of possession was not the result of a transfer by the person or a lawful seizure; and

(3) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

(b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, Section 3-308applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.

In view of these laws, the Trustees and Courts do not require the PETE to present the original note in order to foreclose. Some states, like Florida, which require the original and will not admit into evidence a copy of a negotiable instrument, provide a law allowing a creditor to reestablish a lost, stolen, or destroyed instrument, and thereby effectively to create a new, legal “original.” See Florida Statutes, Chapter 71, http://goo.gl/hrB9bY.

So, answer these questions:

  1. Can a creditor foreclose a lost, stolen, or destroyed note on which you defaulted?
  2. Can a PETE who does not have creditor status foreclose a note in default?

I hope you answered YES to those two questions.  If so, you have by now begun to realize that only two questions have salient importance in your mortgage:

  1. Did you breach the note?
  2. Does the note lack validity?

If you answer yes to the first question, then you know that the PETE can enforce the note by foreclosing and forcing a sale of the collateral property – your house.

The ONLY Reliable Basis for Battling the Creditor and Associates

If you answered yes to the second question, then you might have an opportunity to undo the foreclosure and wind up with the house free and clear, or with a loan modified to your advantage, or setoffs from your debt, or compensatory and punitive damages awards.  You may sue for injuries that made the note invalid, whether or not you face foreclosure.

You may NOT sue until you have complied with § 20 of your loan security instrument, which provides the following delightful text:

Neither Borrower nor Lender may commence, join, or be joined to any judicial action (as either an individual litigant or the member of a class) that arises from the other party’s actions pursuant to this Security Instrument or that alleges that the other party has breached any provision of, or any duty owed by reason of, this Security Instrument, until such Borrower or Lender has notified the other party (with such notice given in compliance with the requirements of Section 15) of such alleged breach and afforded the other party hereto a reasonable period after the giving of such notice to take corrective action.  If Applicable Law provides a time period which must elapse before certain action can be taken, that time period will be deemed to be reasonable for purposes of this paragraph.  The notice of acceleration and opportunity to cure given to Borrower pursuant to Section 22 and the notice of acceleration given to Borrower pursuant to Section 18 shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20.

You can find applicable law (RESPA – Real Estate Settlement Procedures Act – 12 U.S.C. 2601 et seq.) and Regulations (Regulation X – 12 C.F.R. 1024 et seq.) at the below web sites, but take note that I have provided links to the latest at this point in time, and you might need to refer to earlier years based on your situation:

Take note of (carefully read) 12 U.S.C. 2605 and 12 C.F.R. 1024.35 at the above links, for these tell you the duties of the servicer to notify you of changes of the servicer, and explain what questions the servicer must answer for you, what questions the servicer may ignore, and what corrective actions the servicer must take.

So, you see, if you know the note lacks validity in some respect because the lender, servicer, title company, mortgage broker, appraiser, realtor, or some attorney or other third party injured you at the inception of the loan, you can ask for a settlement from, or sue the injurious party.  You start by bringing the injuries to the attention of the servicer.

Now you face a gnawing question that you absolutely must answer:

  1. How do you find out whether the note lacks validity?

Why Mortgage Borrowers Need a Professional Mortgage Examination

Obviously, YOU should examine all the documents related to your loan transaction for evidence of fraud, regulatory breaches, contract breaches, legal errors, and flim-flams. You might find all kinds of causes of action (reasons to sue) that entitle you to challenge the validity of the loan in court and get the court to compensate you for your injuries.

To examine your loan transaction and related issues comprehensively and comprehensively, you will need a good working knowledge of tort law, contract law, mortgage finance law, real estate law, criminal law, bankruptcy law, foreclosure law, consumer credit law, and federal and state regulations law dealing with mortgages, lending, disclosures, credit reporting, debt collection, equal opportunity, etc.

That brings us to the toughest question of all:

  1. Do you have the requisite knowledge and skill to perform a comprehensive, professional examination of your loan transaction and any related court actions?

Frankly, I guess most home loan borrowers do not have a clue how to do that. So naturally, you will want an answer to this question:

  1. Who has such competence and experience to perform a comprehensive mortgage loan transaction examination?

This article focuses on an entirely different issue.  It deals with why you do not need a securitization audit and how to get the putative benefits of such an audit FREE.  So, I shall address the answer to the above question briefly at the end of the article.

But, I do guarantee you right now that NO securitization auditor or so-called forensic loan auditor, and only the rarest of attorneys, has the remotest capability of doing such an examination correctly without wasting your money.

How to Discover Who Owns Your Mortgage Note:  Ask the Servicer

So let us get on with this final question:

  1. How do I find out who owns the note?

How to Avoid Paying the Wrong Party

Most people worry about who owns the note because they do not want to pay the wrong person and then face an accusation of breaching the note through non-payment.  Some simply want to mount a challenge against foreclosure, thinking that if the wrong person forecloses, that will justify asking the court to dismiss the case or stop the foreclosure.

Suppose you do not know who owns the note and you fear that the wrong person will receive your mortgage payments. That could open you to an accusation by the real creditor that you breached the note through non-payment.  The courts provide a means for ensuring that your payment goes to the right party:  the Interpleader Action.

Your loan security instrument identifies whom to pay. If you ever doubt whom to pay, you can file the interpleader action to remove doubt and comply with the terms of your loan.  The court will assign someone to take your money and pay it to the correct party.

Federal Law Helps You Find the Owner of the Note

As to how to find out who owns the note, federal law requires the creditor and servicer to notify you of any change in creditor or servicer timely so you do not pay the wrong party.  Read the law for yourself, here:

See, 15 U.S.C. 1641(f)

(f) Treatment of servicer

(1) In general

A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as an assignee of such obligation for purposes of this section unless the servicer is or was the owner of the obligation.

(2) Servicer not treated as owner on basis of assignment for administrative convenience

A servicer of a consumer obligation arising from a consumer credit transaction shall not be treated as the owner of the obligation for purposes of this section on the basis of an assignment of the obligation from the creditor or another assignee to the servicer solely for the administrative convenience of the servicer in servicing the obligation. Upon written request by the obligor, the servicer shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone number of the owner of the obligation or the master servicer of the obligation.

 

Federal law also requires the servicer and creditor to notify the borrower of any change in the servicer or creditor.

See, 15 U.S.C. 1641(g)

(g) Notice of new creditor

(1) In general

In addition to other disclosures required by this subchapter, not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of the debt shall notify the borrower in writing of such transfer, including—

(A) the identity, address, telephone number of the new creditor;

(B) the date of transfer;

(C) how to reach an agent or party having authority to act on behalf of the new creditor;

(D) the location of the place where transfer of ownership of the debt is recorded; and

(E) any other relevant information regarding the new creditor.

(2) Definition

As used in this subsection, the term “mortgage loan” means any consumer credit transaction that is secured by the principal dwelling of a consumer.

 

Thus, the borrower should always have timely notice in order to pay the right party and to know whether the right party has made any effort to foreclose a defaulted loan.

If in doubt the borrower need only call or write to ask the servicer.  The servicer must give the borrower the identity and contact information for the creditor, and the details regarding escrow for insurance and property tax, and other information regarding servicing the loan.

Get Help from the Consumer Financial Protection Bureau

If the servicer plays dumb or either the servicer or creditor fail to inform the borrower, then the borrower may seek enforcement assistance from the CFPB.  As I mentioned above, you can file a complaint via the web site:

Sue the Creditor and/or Servicer

As to punishing servicer recalcitrance, federal law provides borrowers with a private right of action against the creditor and/or servicer as appropriate. The court can order the defendants to pay the borrower up to $4000, plus any actual damage, plus legal fees and costs of the action.  The court can force the defendants to give the proper information to the borrower.

See, 15 U.S.C. 1640(a)

§1640. Civil liability

(a) Individual or class action for damages; amount of award; factors determining amount of award

Except as otherwise provided in this section, any creditor who fails to comply with any requirement imposed under this part, including any requirement under section 1635 of this title, subsection (f) or (g) of section 1641 of this title, or part D or E of this subchapter with respect to any person is liable to such person in an amount equal to the sum of—

(1) any actual damage sustained by such person as a result of the failure;

(2)(A)(i) in the case of an individual action twice the amount of any finance charge in connection with the transaction, (ii) in the case of an individual action relating to a consumer lease under part E of this subchapter, 25 per centum of the total amount of monthly payments under the lease, except that the liability under this subparagraph shall not be less than $200 nor greater than $2,000, (iii) in the case of an individual action relating to an open end consumer credit plan that is not secured by real property or a dwelling, twice the amount of any finance charge in connection with the transaction, with a minimum of $500 and a maximum of $5,000, or such higher amount as may be appropriate in the case of an established pattern or practice of such failures; 1 or (iv) in the case of an individual action relating to a credit transaction not under an open end credit plan that is secured by real property or a dwelling, not less than $400 or greater than $4,000; or

(B) in the case of a class action, such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same creditor shall not be more than the lesser of $1,000,000 or 1 per centum of the net worth of the creditor;

(3) in the case of any successful action to enforce the foregoing liability or in any action in which a person is determined to have a right of rescission under section 1635 or 1638(e)(7) of this title, the costs of the action, together with a reasonable attorney’s fee as determined by the court; and

(4) in the case of a failure to comply with any requirement under section 1639 of this title, paragraph (1) or (2) of section 1639b(c) of this title, or section 1639c(a) of this title, an amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates that the failure to comply is not material…

 

Please read the full Civil Liability law at the below link.  I have only provided the part important to this discussion.

The SEC Web Site

You can satisfy your curiosity about the PSA and other documents related to your loan, such as the bank’s 424(b)(5) prospectus form filing.  You need only dig around in Edgar at the Securities and Exchange Commission’s web site here:

You can find the regulations requiring such filings in 17 C.F.R. 230.424

Thus, You Need NO Securitization Audit to Receive its Alleged Benefits

As you can see, I have just saved you the cost of a securitization audit.  I have given you the main benefit of it, knowledge of how to discover the identity of the creditor, the person who owns beneficial interest in the note, and I have shown your entitlement to get the court to award damages to you for a failure to give that information.  And I gave you all that ABSOLUTELY FREE.

Now you know also that you do not need to pay some scalawag huckster of a securitization auditor to find out who owns your note. Most of the time the so-called auditor gives clients a bunch of useless information like a copy of the PSA, but fails to tell you who owns the note.  Why? Because creditors indorsed most securitized notes in blank and most notes have become securitized.

If in doubt, check the Fannie Mae or Freddie Mac web site and enter your loan number, for they own many if not most of the mortgage notes.

If still in doubt, pick up the phone.  Call the servicer, and ask, “Who owns my note?”  If you get the bum’s rush, try it in writing, then contact the CFPB, and complain. If that does not work, SUE.

But under NO CIRCUMSTANCES should you bother with a securitization audit.  It will only waste your money and your time, and give you zero benefit.

Yes, I know I titled the article to make it seem like securitization audits provide benefits you can get free.  Well I gave you FREE those benefits that a securitization auditor fools victims into thinking they will get for a big fat fee, but which the victims do not get at all.

If you already made the ill-informed mistake of paying a securitization auditor for that useless audit, I suggest that you demand a full refund and report that scalawag to the State Attorney General.  Why?  Because those crooked “auditors” know they sell useless junk.

Save Your Money for a Professional Mortgage Examination

Besides, you will need all that money to pay a competent, professional mortgage transaction examiner to examine your transaction documents.  That will reveal injuries you have suffered.  And when you show the injuries to the servicer, the injurious parties, the CFPB, and the court, you thereby give yourself the ONLY opportunity of pressing your adversary into a settlement or of obtaining a damage award judgment from the court.

Yes, I know the ONLY such examination firm in the USA, the only one I can confidently recommend.

If you have a mortgage and you want help with it, familiarize yourself with the articles and concepts at the Mortgage Attack web site here:

Then write me using the contact form at the site, or pick up the phone and call me at

  • 1 (727) 669-5511

Bob Hurt

 

 

 

Public Access to Law; Discipline for Foreclosure Pretender Defenders

To:

Professor Dale A. Whitman, Dean Emeritus
University of Missouri-Columbia Law School

Dear Professor Whitman:

I saw your article “Learning from the Mortgage Crisis” in a friend’s magazine.  I thought I’d write and ask you to send me a copy of the pdf file.  Will you send it to me, please, by return email?  Why haven’t you posted that article on your site?

In reading your UCC law journal article (April 2013) recommending a proper nationwide standard of electronic registration for mortgages and notes, I noted several issues which I believe warrant comment.

1.  I fully agree with you.  I don’t blame banks for creating MERS in order to reduce their costs related to recording loan security instruments with county clerks.  But the problems related to the musical chairs game with notes, the robosigning, the securitization, the phony bond ratings, the questionable assignments, the foreclosure plaintiffs who lack standing, and the note assignment after suing all beg for a standardized solution.  That system you recommend should also mandate notice from the court clerk of any lis pendens regarding a registered mortgage or deed of trust, and of any foreclosure complaint and of any related final judgment encumbering or freeing the mortgage.

2.  I doubt seriously that anyone but an idiot would destroy the note, and I believe none of the banks did.  I believe they stashed those notes in their warehouse file cabinets and did not want to risk their lost by giving handing them to the courts; furthermore, they wanted the freedom to use them commercially by assigning or handing them to others without the fetter of the court’s having possessions, SIMPLY BECAUSE of the UCC requirement that possession alone entitles enforcement.

From your footnote 16 about the article Naked Capitalism, FUBAR Mortgage Behavior; Florida Banks Destroyed Notes;  Others Never Transferred Them, Sept. 27, 2010, available at http://www.nakedcapitalism.com/2010/09/more-evidence-of-bank-fubar-mortgage-behavior-orida-banks-destroyed-notes-others-never-transferred-them.html.
3. I don’t believe the destroyed note allegation of the article because, in spite of Florida Statute 673.3091 permitting enforcement of the lost or destroyed note, we have the issue of admission of evidence in Florida courts.  I hope you will address it in a future commentary.

From Florida’s Evidence Code in Florida Statute 90.953:

90.953 Admissibility of duplicates.—A duplicate is admissible to the same extent as an original, unless:
(1) The document or writing is a negotiable instrument as defined in s. 673.1041, a security as defined in s. 678.1021, or any other writing that evidences a right to the payment of money, is not itself a security agreement or lease, and is of a type that is transferred by delivery in the ordinary course of business with any necessary endorsement or assignment.
(2) A genuine question is raised about the authenticity of the original or any other document or writing.
(3) It is unfair, under the circumstance, to admit the duplicate in lieu of the original.

4.  If the court cannot admit the copy of the lost note into evidence, how does the note become a fact before the court so that the court can enforce it?  Well, how about this handy statute that allows re-establishment?

71.011 Reestablishment of papers, records, and files.—All papers, written or printed, of any kind whatsoever, and the records and files of any official, court or public office, may be reestablished in the manner hereinafter provided.
(1) WHO MAY REESTABLISH.—Any person interested in the paper, file or record to be reestablished may reestablish it.
(2) VENUE.—If reestablishment is sought of a record or file, venue is in the county where the record or file existed before its loss or destruction. If it is a private paper, venue is in the county where any person affected thereby lives or if such persons are nonresidents of the state, then in any county in which the person seeking the reestablishment desires.
(3) REMEDY CONCURRENT.—Nothing herein shall prevent the reestablishment of lost papers, records and files at common law or in equity in the usual manner.
(4) EFFECT.—
(a) Any paper, record or file reestablished has the effect of the original. A private paper has such effect immediately on recording the judgment reestablishing it, but a reestablished record does not have that effect until recorded and a reestablished paper or file of any official, court or public officer does not have that effect until a certified copy is filed with the official or in the court or public office where the original belonged. A certified copy of any reestablished paper, the original of which is required or authorized by law to be recorded, may be recorded.
(b) When any deed forming a link in a chain of title to land in this state has been placed on the proper record without having been acknowledged or proven for record and has thereafter been lost or destroyed, certified copies of the record of the deed as so recorded may be received as evidence to reestablish the deed if the deed has been so recorded for 20 years.
(5) COMPLAINT.—A person desiring to establish any paper, record or file, except when otherwise provided, shall file a complaint in chancery setting forth that the paper, record or file has been lost or destroyed and is not in the custody or control of the petitioner, the time and manner of loss or destruction, that a copy attached is a substantial copy of that lost or destroyed, that the persons named in the complaint are the only persons known to plaintiff who are interested for or against such reestablishment.

Apparently, a Plaintiff can re-establish the lost note and then enforce it so long as he indemnifies the Defendant against some other party’s effort to enforce the original note.  Unfortunately, not many plaintiffs claiming to have lost the note have reestablished it in order to admit it into evidence.  In fact, I don’t know of any, but I have imperfect access to court records for conducting a research into the question.

FYI, I am not an attorney and have not attended law school.  I’d love to attend, but it isn’t likely to produce any benefit at this stage of my life except to satisfy my curiosity.  I study law issues as an avocation.

Since 2007 I have focused on Mortgage issues.  I started by inquiring into the means to beat foreclosures.  Eventually I abandoned that interest in favor of a principle I call “Mortgage Attack.”  I have fleshed out the principle in my web site http://MortgageAttack.com.  As I see it, a borrower who breached a valid note cannot defeat a mortgage foreclosure generally.  However, a colossal foreclosure defense legal industry has arisen by which attorneys deceive foreclosure victims with a contrary suggestion.   In actuality, they bilk their clients out of, for example, $2500 retainer plus $500 per month “for as long as we can keep you in the house.”  In my opinion, all those attorneys belong in prison for fraud.  To begin with, they KNOW the client will lose the house unless they con the client into a loan modification or short sale.  And then they continue using the same tired and frivolous arguments in the foreclosure pretense defense which they know will fail – complaining about statute of limitation tolling, robosigning, vapor money, no original note, conditions precedent, etc. They use copy-machine pleadings and motions in a dilatory effort to make it seem that they earn their fees.  And worst of all they NEVER bother examining the mortgage transaction documents for evidence of borrower injury by the lender and lender’s agents and associates.

If I came to you and said “Professor, I just got accused of breaching the note, and now they want to take my house.  Will you help me please?” what would you suggest?  Wouldn’t you say something like this:

Well did you take out a loan?  Did you sign the papers?  Did you breach the note by failing to pay timely?  Let me see those papers, and tell me a little about the events surrounding that loan.  Let me see the appraisal and original loan application, and HUD-1 report, and your TILA notices.?”

Wouldn’t you interview the supplicant to determine whether any shady activities happened?  Wouldn’t you verify that the appraiser, mortgage broker, and lender had proper licenses and operated from offices registered with the Secretary of State? Wouldn’t you ascertain whether the broker promised one set of terms, but hoodwinked the borrower into signing papers with a different set of terms.  Wouldn’t you look for broker lies on the loan application that made the borrower seem more than actually qualified?  Wouldn’t you look at the interest rates and origination fees to determine whether they exceeded standards?  Wouldn’t you look for patterns of misbehavior that might justify offsets even in the event the statute of limitations had tolled on the behaviors? Wouldn’t you look for evidence of violations of the FCRA, FDCPA, TILA, RESPA, HOEPA, ECOA, etc? Wouldn’t you look for contract breaches, fraud and other tortious conduct, legal errors, and regulatory violations that injured the borrower?

Normal foreclosure pretender defender attorneys might give those efforts lip service, but virtually never do them. They don’t do them because they don’t know how, a byproduct of lack of intimate familiarity with the regulations and tort/contract/mortgage law, and because of laziness and greed.  A competent mortgage examination team might spend 40 to 60 hours on such a project.  A typical. lawyer would want to charge a broke foreclosure victim $12,000 to $18,000 for the service.  As a result, the lawyer would have to get out of the business of foreclosure defense.

But, that is exactly what it will take for lawyers actually to give their foreclosure victim clients any hope of convincing the lender to modify the loan to the borrower’s benefit, or of convincing the court to order set-offs from the debt or compensatory and punitive damages to salve the borrower’s injuries.

Such winning awards do happen, but they are exceedingly rare.  And we shall never know how many such cases settle out of court because the borrower managed to convince the lender to avoid the related litigation.

Here’s an anomalous case for your reference:

http://mortgageattack.com/2014/07/10/brown-v-quicken-loans-shows-how-to-punish-abusive-mortgagees/

In that small article, I provided a link to all of the case documents I could find on the web.  You might find more using your WestLaw resources.  I have expected a final resolution of the case for several days.  The appraiser settled for $700K, and the trial court ordered Quicken Loans to pay nearly $5 million in damages, fees, and costs.  Quicken appealed.  Maybe you can find out when the West Virginia Supreme Court will issue its final opinion.

I consider Brown v Quicken Loans the “Poster Child” Mortgage Attack methodology case from which all pretender defender lawyers should learn.  But I estimate that lenders and their agents and associates have injured or cheated at least 80%, and upwards of 95% of mortgage borrowers in the past 15 years.  Precious few attorneys hold them accountable for that maleficent behavior.  And let’s face reality.  Brown’s lawyer took the case on contingency because he knew the judge and his sentiments well and knew his client had suffered extraordinary injuries, and he knew the client as decent person.  Few lawyers will take any foreclosure case on contingency until after having made it ready for trial.  That means the injured borrower must handle the case personally, if anyone handles it at all.

And this brings me to my final point.

You have wisely suggested a dramatic and electronic improvement to the loan registration problem.  But we have two far worse problems:

  1. Bad ethics in the foreclosure “Pretense Defense” attorney business model – it should be outlawed.
  2. Lack of availability of online resources for pro se litigants who should not need a lawyer for “mortgage attack,” coupled with the exorbitant cost imposed by the legal services monopoly.

I know of no cure for the bad ethics other than widespread class actions against foreclosure pretender defenders and State Attorneys attacking them for fraud.  Any attorney commits fraud by re-using frivolous legal arguments that he knows will lose.  Obviously, judges will not punish them, or they already would have.  And just as obviously, law school ethics professors have had little impact on the greed factor that drives attorneys to cheat their clients .

People would find it easier to prevail against crooked banks if they could afford an aggressive, competent attorney. But people cannot afford them generally because the attorneys enjoy a monopoly on legal services. Unauthorized Practice of Law statutes (UPL is a felony in Florida) have made possible that legal services monopoly.   But the law does not protect people against incompetent, lazy, or crooked attorneys. Legal writers have recognized this as an outrage for decades:

And of course many people would fare well in court on their own if they only learned the basics of litigation, civil procedure, and evidence code in high school.  Unfortunately, it has become exceedingly difficult to obtain a decent legal education in high school, college, or on one’s own because of the practice of hiding the law or making it inordinately expensive to discover.  Yes, we have the laws.  But government has posted them on a sign 20 feet in the air, and only attorneys have the ladder needed to read that sign.  By this I mean the actual law has become out of reach, not because people cannot find it, but because of the skill they need to locate the relevant part – court rulings.

Good attorneys support their legal arguments in their court filings with case law.  They generally find that case law using a legal search engine to which they subscribe for a monthly fee.  But the filings that resulted in that case law sit in a clerk’s file cabinet in courts across America, or in law books in law libraries that most people simply cannot access.

And that law which people can access suffers from exiguity or poor organization. In Florida only parties to the case and their lawyers can access the electronic filings in the case.  This seem more than a little strange in light of the reality that the constitution mandates that nearly all proceedings remain open to the public.

Thank God for Google Scholar and Google Books.  Google has made many old law books available, and many if not most of the appellate opinions across America available to the public without requiring that people browse the court sites.  Google has done the job that rightly belongs to government, particularly the courts, of making the law available and visible to, and through the search engine somewhat well-organized for, the masses.

I realize that you personally can do nothing about the terrible ethics in the mortgage foreclosure and foreclosure defense industry.

But perhaps you can propose an electronic means of solving the problem of relative unavailability of the law to non-attorneys.  Some federally coordinated electronic repository should exist akin to PACER, but free, and fully searchable by topic, party, judge, attorney, clerk, and bailiff, nationwide, making all court dockets and filings, from traffic and all other administrative courts, county and other trial courts, and appellate courts, available to the public, particularly to Americans and students in public and private schools.  And that access should cost the public nothing, for the law and the documents leading up to it, should become and remain free for all to read at home through internet access.

And need only one good reason for this.  People can easily commit a vast array of “infractions” and crimes without ever leaving home, and become most susceptible to harassment and arrest for alleged infractions and criminal acts upon setting foot outside the home.  It seems only fair that people should have the benefit of finding, reading, learning, and knowing the law before venturing out of the privacy of one’s home, if any such privacy remains.

Sincerely,

Bob Hurt

To ALL Real Estate Short Sale & Loan Mod Agents:

Mortgage Exam Ethically Mandatory Prior to Negotiation with Bank

I write to toss a business philosophy gauntlet before you.  I do not run a business.  I function as ombudsman and consumer activist in support of mortgage victims.  I help people with mortgage problems obtain the best possible advantage for any negotiation with the bank and its agents, or to beat them in a lawsuit.

I consider ANYTHING that operates to defeat that purpose as inimical to it. So, I might become YOUR enemy.  I DO NOT SUPPORT efforts of negotiators and other service providers who undermine the mortgage victim’s ability to negotiate from a position of power.  I shall explain why.

Mortgage Attack, the Only Worthy Methodology

ONE and ONLY one methodology has proven worthy at enabling the best financial outcome possible for mortgagors.  I term it the “Mortgage Attack” methodology.  The Mortgage Attack methodology consists of finding any and all of the ways the mortgage lender and its agents and associates injured the borrower, and using those injuries as negotiating leverage against the bank. This applies whether or not the borrower faces foreclosure.  And the negotiating scenario can include a simple negotiation for a loan modification favoring the borrower, as well as a lawsuit or counter/cross-complaint against the injurious parties.

The Mortgage Attack methodology provides a negotiating advantage to the borrower because it carries an explicit or implicit threat of litigation against the injurious parties for injuring the borrower.  It has become common knowledge that jurors loath lenders and associates who injure borrowers with scurrilous tactics.  Since lawyers for the bank know this, the smarter ones will encourage their clients to settle in some way to avoid the litigation and related damage to the lender’s reputation, not to mention the possibility of monumental damages awards against the bank by the courts.

The Bad Guys in the Transaction

By “lender and its agents and associates” I mean the loan originator, owners of beneficial interest in the note, Realtor, mortgage broker, appraiser, title company operative, servicer, and/or related attorney.  In short, it includes everyone involved in the mortgage transaction and related events other than the borrower.  These are the “Bad Guys” in the transaction, EVEN IF the borrower erred too.  Why?  Because YOU work for the borrower, not the bank, etc.

The borrower’s own attorney or other practitioner can become culpable for injuries to the borrower resulting from the attorney’s failure aggressively to look for such causes of action and to lodge corresponding affirmative defenses, motions to dismiss, or counter/cross-complaints against the lenders and its agents and associates who injured the borrower.

By implication, EVERY PRACTITIONER employed by the mortgagor, including agents for short sale and loan modifications, has ethical and moral duties to guide the borrower toward the Mortgage Attack methodology before undertaking any negotiation for short sale or loan modification on behalf of a mortgage victim.  The reason: only that methodology lets you negotiate from a position of power for the borrower.

Mortgage Examination Critically Important for Finding Evidence of Wrongdoing

The Mortgage Attack paradigm requires a comprehensive mortgage examination by a competent professional to find the causes of action against the lender and its agents and associates.  The examination service provider should render a report showing the causes of action in a form that facilitates admission into evidence in a court of law.  I know of only ONE firm capable of performing such an examination and delivering such a report.  I shall happily divulge the identity of the firm to any with sincere need for the information.

The Challenge, the Gauntlet for Negotiators

I write this commentary to challenge short sale and loan modification agents to encourage their mortgage victim prospects to spend the necessary money on a proper mortgage examination (as above) BEFORE undertaking any short sale or loan modification effort.  The reason should seem obvious, but I’ll explain it anyway.  The prospect might decide to sue the injurious parties instead of negotiating from a position of weakness.  As a consequence of winning such a law suite, the borrower might win huge compensatory and punitive damages, enough to buy several houses.  That will certainly leave the borrower in possession of the mortgaged property at risk.  Furthermore, the borrower can negotiate a short sale or loan modification or keys for cash deal from a position of power and strength, rather than from a position of weakness.

Certainly, the agents for short sale and loan mods will lose some commissions by advocating Mortgage Attack.  But they will also win better negotiated settlements AND more clients because of their integrity.

In essence, I assert in this commentary that agents for short sale and loan mod commit ethics breaches and violate their duties to their prospective clients by telling them a mortgage exam is not always the best way to go when the opposite is obviously true.

Mortgage Attack and Mortgage Exam ALWAYS Come First

Mortgage Attack paradigm demands that the mortgage examination ALWAYS comes first in an effort to deal with a troubling mortgage.  In point of fact, a mortgagor who owes more for a property that its actual value, and a mortgagor facing foreclosure, should ALWAYS purchase a comprehensive mortgage examination by a competent professional FIRST AND FOREMOST, before doing any other thing, to minimize the danger in the mortgage.  ONLY a mortgage examination can give the mortgagor the necessary negotiating leverage for dealing with a bank and its stable of attorneys.

You’ll Earn More Commissions If You DO THE RIGHT THING

Agents for short sale and loan mod seem so terribly desperate for commissions that they will sacrifice the mortgagor client’s best interest by denigrating a mortgage exam as the primary step in resolving the mortgagor’s problems.  That is, plainly, unethical and immoral.

Thus the gauntlet becomes the challenge to do the right thing.  Recommend a mortgage examination for all of your clients as a prerequisite for doing business with them.

Here’s How…

Contact me NOW for free help with that process.

Call 727 669 5511 • Or Click Here.

Mort Gezzam photo
Mort Gezzam

Developing a Mortgage Attack Mentality

I’m Mort Gezzam, the Main Maven here at MortgageAttack.Com.  I want to say a few words about the importance of developing a Mortgage Attack mentality.  Back in 2008 I put on a foreclosure defense seminar and invited 5 self-appointed “whizbangs” to impart their wisdom to a room of 60 mortgage investors  whom the financial crisis had virtually destroyed.  Lenders had attacked them, and they had started losing their properties to foreclosure.  Their fiscal worlds had ground to a halt and time seemed to stand still as banks ground their money and real estate dreams into dust.  All of them yearned for some way to DEFEND against that inexorable foreclosure.  And all knew intuitively that their efforts would fail.

It should go without my saying, but I’ll say it anyway, that the 5 gurus didn’t know diddly squat about defending against foreclosure effectively.  They were clueless.  None of them seemed to realize then that a mortgagor cannot defend against foreclosure of a valid mortgage note which the mortgagor breached by non-payment.  God help us, they STILL DON’T realize it.  They are still clueless.  They still try to defend against foreclosures, and those they “help” continue to lose their houses.

All of them, and most lawyers who try to help foreclosure victims, mount defenses with failing arguments.  They do that mainly because it takes less work than the alternative, AND because they never developed a MORTGAGE ATTACK MENTALITY.

Along the way I met an inter-planetary-class litigation consultant who explained it to me against all my protestations:  you never defend against foreclosure of a valid mortgage when you can attack the mortgage for its lack of validity.

This strategy has a simple basis in the two principles of the typical state constitution (Florida’s for example):

  1. No law impairing the obligation of [valid] contracts shall be passed;
  2. All persons shall have access to the courts for redress of injury, and justice shall be administered without sale, denial, and delay.

Naturally, the foreclosure authorities, whether trustees or judges, assume the plaintiffs have submitted valid mortgage contracts to them for adjudication or settlement.  So they want to know only two things:

  1. Did the borrower breach the note;
  2. Did the servicer properly give notice of acceleration and demand for payment according to state and federal law.

The judges and trustees don’t much care whether the note is an original because the proceedings lie in equity, and the judge must do what he deems fair.  You cannot imagine that the judges believe it fair to give unjust enrichment to a recalcitrant mortgagor, regardless of the reason the mortgagor could not pay the debt timely.  So naturally the authorities want to grant the foreclosure forthwith so that the creditor can collect his money or the house and go on about his life.

But if the mortgagor can scramble around and find where the lender or mortgage broker or appraiser or title company made a serious legal error, breached the contract, or defrauded him, presenting that issue to the trier of fact and artfully demanding redress for that injury can net the cheated mortgagor a whole pile of concessions from the lender, from minor setoffs to the house free and clear, a favorable loan modification deal, or millions in compensatory and punitive damages.  And in point of fact, lenders and their agents have injured 90% of all single family home mortgagors who have obtained loans over the past 15 years.

The mortgagor who sees this clearly, he will dig a tunnel to Hades itself in order to find those injuries and present them to the court for redress.  And such a mortgagor might even feel willing to sue an attorney for legal malpractice  who fails to do exactly that out of greed or laziness.  In other words, understanding what works and what doesn’t can transform a mortgagor or attorney from a foreclosure defense “Kool-Aid drinker” into a steely-eyed, fire-belching Mortgage Attack monster.

America does not have a Mortgage Attack culture among attorneys.  But I and other Mortgage Attack mavens hope to instill a new verve into the foreclosure pretender defenders, so they can enjoy living up to their law school dreams and ambitions of helping others.

If you are a mortgage victim, go to your lawyer’s office today and yell MORTGAGE ATTACK in his face 5 times, then demand to know why he doesn’t ATTACK.

Send him to this Mortgage Attack web site.  It explains everything the mortgagor or attorney needs to know in order to mount a successful attack against injurious lenders and their agents.  Then he might start winning for a change.

Mort Gezzam photo
Mort Gezzam