Tonight's 60 Minutes rerun on lost mortgage documents got me to thinking . . . .

[Stinky The Clown]

. . . . what if each mortgage that lacks documentation was given 90 days (or some other time period) to either prove who owns the house or the person living in it gets it free and clear?

Yes, I understand that some people who have played by the rules may not get satisfaction and someone who set out to beat the system, in fact does. But on balance, it seems to me this will teach the banks a lesson, clear up a lot of the reason for a depressed housing market, end a bubble's effect on the country as a whole, stabilize neighborhoods across the country, and save a lot of State Attorneys General offices from a lot of expense going after the guilty shitbirds.

What the banks did was criminal. This seems a pretty cheap "Stay Out of Jail" card.

[spedtr90]

1. What happened to the investigations by all 50 attorney generals?

Anyone go to jail for this fraud?

[roxiejules]

7. The latest on the 50 attorney generals:

via Naked Capitalism:


Efforts to Pretend “50 State” Attorney General Deal Moving Forward Looking More Desperate


Three (New York, Delaware, and Massachusetts) have already defected, and we believe Nevada is an undeclared non-participant, and Arizona and California are likely to follow suit.

Moreover, the efforts to try to create the impression that the deal is going somewhere have been laughable. Instead, the reverse has happened.

We suggest readers keep the pressure on attorneys general. Call yours (you can find their phone numbers here). Tell them the banks lied, they promised they’d quit robosigning and document abuses and they haven’t. They can’t be trusted, so there should be investigations, including servicing software audits, and prosecutions, not a settlement.

[spedtr90]

15. Never any good news these days

Stories like this on 60 minutes should be on every day. Fox addicts know nothing; I guess ignorance is bliss.

[EFerrari]

9. MY AG's office told me they're looking for a pattern of malfeasance.

I laughed right into their ear.

Elizabeth Warren said a couple of weeks ago that it's not working -- which she should have known when she was endorsing the plan last year or so.

[NYC_SKP]

2. I can't help but think that somehow, some way, I'm gonna have to pay for this...

...maybe the banks will roll the loss over onto my mortgage fees, maybe it'll be some other mechanism, but whenever some people get something for nothing, other people have to pay and it's usually NOT the bad guys.

:shrug:

[ejpoeta]

3. you're going to pay for it anyway. and they're going to get away with what they did because

no one is going to prosecute what they did. how many innocent people had their homes wrongly forclosed? how many people got screwed when they did nothing wrong? how many of us ALL are going to paying for this when we aren't even involved in this mortgage mess at all!! this isn't just about you... this is about all of us. I don't have a mortgage, but this is going to affect me too. This will affect everyone of us. But the banks... they will get off with more money in their pockets and not a blemish because they will not be prosecuted and nothing will be done to prevent them from doing it again.

[DirkGently]

16. You've already paid for it, in the bailout(s)(s)(s). Private profit, socialized risk.

[ms.smiler]

21. Spot on DirkGently

Wall Street banks never created legal securities that actually contained or were backed by anything of value, yet they collected fees and commissions on the supposed “securities.” They designed MBS that were certain to fail and purchased Credit Default Swaps and other insurance. With the advent of the Financial Crisis when the MBS market failed, the banks collected those Swaps and insurance and were paid again by the buyers of last resort – the U.S. government and Federal Reserve who purchased the “toxic” mortgage backed securities.

http://financialedge.investopedia.com/financial-edge/1110/What-Happened-To-The-MBS-Market.aspx

http://www.salon.com/news/opinion/feature/2010/05/01/trillion_dollar_fraud

Watch PBS Video – True Cost of the Wall Street Bailout

Federal Reserve 7.7 trillion
Treasury 2.7 trillion
FDIC 2.0 trillion

http://dailybail.com/home/true-cost-of-the-wall-street-bailout-pbs-video.html

Very good discussion and interview with Representative Marcy Kaptur

http://www.youtube.com/watch?v=gd7s6An9fcA&feature=player_embedded#at=19

Very good discussion and interview with Representative Brad Miller

http://www.msnbc.msn.com/id/21134540/vp/39582228#39582228


Question: How many times should the banks collect payment on mortgage loans?

Answer: As many times as they can possibly get away with.

[MichiganVote]

25. +1

[endless october]

4. i watched that piece.

any bank that engaged in that kind of fraud has exposed itself to serious legal action.

[blueamy66]

5. anybody know anything about "illegally" purchased loans?

just asking

[ms.smiler]

6. Mortgage servicing companies, owned by banks and Hedge funds,

make little money from servicing but can profit handsomely if they can steal your home.

We now have in this country a blend of both public and private land records. The original mortgage lien is filed in our public land records, and the balance of the life of the loan is tracked privately within Mortgage Electronic Registration System.

MERS permits the mortgage servicer to step forward at will after a homeowner ceases making mortgage payments or when the servicer has manufactured a supposed default, in order to steal the mortgage lien in the public land records via a fraudulent Assignment of Mortgage. The loan originator doesn’t mind because they sold the Note and were paid already shortly after the mortgage was signed and prior to supposed securitization.

When an individual files such a fraudulent document in the land records, they are subject to up to 30 years imprisonment and a fine of double the value of the property they attempted to steal. (I have no idea if a law covers a company that commits the same crime.)

A document mill will create any other needed documents such as a Promissory Note and a foreclosure mill will file the foreclosure action.

The mortgage servicer/banks & Hedge funds get a free house, PMI insurance and other goodies on top of it.

Document mill price sheets:

http://www.scribd.com/doc/38591053/Lender-Processing-Services-DOCX-Document-Fabrication-Price-Sheet

http://www.scribd.com/doc/59444662/Doc-Shop-Offerings-Optional-Collateral-File-Creation-services-can-be-performed-as-needed-pg-48

Unfair, Deceptive, and Unconscionable Acts in Foreclosure Cases –

http://www.scribd.com/doc/46278738/Florida-Attorney-General-Fraudclosure-Report-Unfair-Deceptive-and-Unconscionable-Acts-in-Foreclosure-Cases


I’d like homeowners who are dutifully making mortgage payments to pause here for a moment. If it takes that level of fraud noted above to simulate ownership of a loan in order to foreclose, what level of fraud is necessary at this moment to simulate ownership of your loan?

With securitized mortgages, the banks succeeded at creating nothing more than unsecured debt which was most likely paid at a subsequent point in time, not that anyone is going to notify the homeowner. Such a disclosure would defeat the purpose of this scam wherein banks collect multiple times upon the same debt.

Homeowners who refinanced and have a MERS Satisfaction of Mortgage in their Title history, should find a competent attorney with an understanding of securitized mortgages in order to file a Quiet Title action to clear the Title on their property. The very same fraudulent signatures that appear on MERS Assignment of Mortgages appear on MERS Satisfaction of Mortgages.


I've been researching mortgage/foreclosure fraud for nearly 3 years and recently filed suit against my mortgage servicer.

[Mimosa]

14. Great info post. Thanks, Ms. Smiler. n/t

[FourScore]

8. We just got a letter from our mortgage company that says how much we owe

and if we do not dispute it, then we agree to the amount and to the loan.

I wondered what would happen if we asked them for proof of the loan.

[Stinky The Clown]

10. We've **never** gotten such a letter from our mortgage companies

That sounds *really* suspicious. I can only conclude this is in the bank's best interest, and not yours. I would contact a lawyer and even your state AG's office.

[ms.smiler]

11. I've heard of companies starting to do this and you should challenge

the amount that is supposedly owed. Most certainly, don't sign anything they send to you.

Given the rampant fraud at loan origination, you might want to show your Settlement sheet to a professional and see if there is fraud in your mortgage loan subject to Treble damages. You can do some preliminary checking on your mortgage on your own.

You can find your MERS MIN number on the upper left hand corner on your mortgage. Select Search by MIN and enter number. Both a Servicer and Investor name may appear in the results. https://www.mers-servicerid.org/sis/

Fannie Mae lookup tool: http://www.fanniemae.com/loanlookup/

Freddie Mac lookup tool: https://ww3.freddiemac.com/corporate/

Compare the information with what appears in your local land records. Our public land records will most likely show only the original mortgage.

Toward the top of your Settlement Sheet, look for Yield Spread Premium. If an amount of money appears, it is a strong indication of tens of thousands in fraud hiding in your mortgage subject to Treble damages.

An Origination Fee should be no more than $2,000. If a larger amount appears, it is an indicator of fraud. If both a YSP and Origination Fee appear, it is doubtful that your mortgage is free of fraud.

I discovered over $54,000 in fraud in my own 30 year fixed rate mortgage which put me in search of a competent attorney.

[DirkGently]

18. Are the numbers wrong? Is it not your loan?

People are confusing what went wrong here. Lenders screwed up the market by packaging *crappy* loans and selling them for more than they were worth, which made home values soar, and then crash.

People aren't getting saddled with mortgages for loans they didn't sign for.

And no one can make you responsible for a debt you don't owe by sending you a unilateral notice that you have to dispute. When you get sued in foreclosure, though, you get a note giving you a specific opportunity to contest the default and request backup documentation.

[ms.smiler]

20. DirkGently - there is no way for a homeowner to know what happened

to their loan without a forensic loan audit. The homeowner starts out thinking they created a debt that was secured by property. The original mortgage is filed in our land records and the homeowner is left to believe that a valid lien exists on their property and that a valid debt remains.

After a modern day mortgage is signed, the homeowner is never informed of what actually happened to their loan. The loan originator sells the loan off to Wall Street for securitization and none of those transfers are reflected in our land records. The loan originator is paid for the loan and they are done with it.

Then, years later, when a foreclosure action is filed against a homeowner, a mortgage servicer need only file a fraudulent Assignment and claim to have recently paid the loan originator for the loan.

So when did the loan originator get paid for the loan?

And that is how the combination of both public and private and secret land records permits banks to collect multiple times upon the same debt.

[DirkGently]

24. Hard to make that argument when the borrower hasn't paid, isn't it?

Secured debt can be sold. It doesn't matter when the originator got paid. It doesn't matter when the 16th assignee got paid. That doesn't invalidate the lien or the borrower's obligation. Again, it's tough to tell a judge you used someone else's money to buy a house, pledged the house as collateral, but owe no one anything because the paperwork was mishandled.

All that matters is that the party claiming to own that lien holds the paper, or can convince a judge that they held it at some point and lost it.

As for tranching making it impossible to effectively show who is supposed to own it in order to collect, I don't know enough about secured transactions to know if that's plausible, but I haven't seen a successful argument on that basis yet.

Maybe the lenders ARE stymied now the robo-signers have shut down. They've certainly put a lot of "holds" on active foreclosures recently. I think it would be great if they've screwed themselves somehow.

But a purchase-money lien is a hard thing to beat.




Edited for clarity.

[ms.smiler]

29. DirkGently - here is an area where we fall slightly apart

You are looking only at whether a homeowner has made mortgage payments that are supposedly due.

I'm looking at the mortage loan from the stand point of how much money has actually been paid against that debt.

It distresses me that most people still have only an understanding of a traditional mortgage which they bring to the new securitized mortgage. A securitized mortgage is an entirely different type of instrument and contract. Simply:

Traditional Mortgage – two parties are involved with only the borrower paying against the debt. The Promissory Note reflects the actual lender & borrower while a lien in our land records reflects the owner of the Promissory Note and any subsequent owner.

Securitized Mortgage – multiple and numerous parties and contracts are involved. The Promissory Note does not reflect the actual lender who is undisclosed to the borrower. There are two sets of books – a hidden one on Wall Street and the other on Main Street. Multiple streams of revenue & parties pay against the debt unbeknownst to the borrower. The lien in our land records reflects only MERS as Nominee for the loan originator while the Note traverses Wall Street and beyond.

Even non-MERS mortgages since about 2001 have been securitized.

It does matter when the loan originator was paid. I know they were paid shortly after the mortgage was signed, likely within 3 days. The fact that some mortgage servicer later claims to have recently paid the loan originator, proves there are missing Assignments and someone is stealing the lien from our public land records.

Or would you maintain that the loan originator is actually paid twice for the loan? How about those many instances where mortgage servicers are filing Assignments from companies and Trusts that were closed years ago. How could that servicer possibly own that loan?

About the robo-signers, would you believe that they are still using the same names? Yes, Jeffrey Stephan and others are still turning up on fraudulent Assignments. And the banks are taking longer before filing foreclosure actions and are postponing auction sales, repeatedly.

The banks have stolen more homes than they can possibly sell to another home buyer or sell to Fannie who may have held the paper.

Oh, the banks did screw themselves and I doubt you would believe what they failed to do.

My attorney thinks of it as "it can't be that easy." I'm a business owner and I think of it as "no business is that stupid."

But they were...

Scammers are lazy people.

[DirkGently]

32. The only way I see any of that works is if NO ONE can demonstrate ownership of the Note.

What do you mean "someone is stealing the lien from our public land records? To be clear, you're not talking about the notion that an Assignment of Mortgage has to be recorded to be valid, are you? That's not the case. Recordation is not required to validate a transfer of a debt. It's for the benefit of the holder of the debt, not the borrower. I agree MERS has made things too confusing for everyone, and borrowers SHOULD be given a way to know, at all times, who claims to hold their mortgage, but the notion that Assignments not recorded in the land records are no good (if that's what you're getting at) is not true.

The only substantive defense to suit on a promissory note is PAYMENT. It really is not relevant whether the original lender sold the loan three days after closing, or three days before, or painted the Note colors and made a hat out of it. Which I'm beginning to think is possible.

If the borrower hasn't paid, and any party can demonstrate it holds the note, the note remains due until paid.

Do you mean that anyone who gave a "securitized mortgage" doesn't actually owe the money they promised to repay? Isn't subject to the lien they voluntarily gave? Respectfully, you're looking at the wrong end of the horse. The lender's behavior after the fact can't destroy the borrower's debt or the purchase money lien.

What's been suggested, but never successfully argued that I'm aware, is that lenders so confused the *ownership* of some of these notes that there is no way to demonstrate any particular entity holds them anymore. The debt would still be due, and the lien still valid, but there'd be no one with the right to enforce them.

Does there come a point when no coherent chain of Assignment can be shown? That's part of the problem with MERS. Debts are flung around in a theoretical way, with the idea that the actual instruments can be created at some future date. It's possible that the ownership of some loans is so confused it could take years -- or forever? to establish who owns the debt.

But so far, no one's out there crushing lenders with that theory, and it's not a new one.

[RegieRocker]

12. It's OK for them to forge docs but not you. Nope it's jail for you.

More b.s.

[flvegan]

13. Quiet Title Action.

In many states, if a question is raised as to who owns or has a valid lien or interest in the property, an individual or entity can file a Quiet Title suit. All parties expressing an interest get served via due process and are forced at a hearing to prove that they have an interest. If that cannot be proven, say via improper mortgage documention, then that interest is eliminated by the court.

Now, depending where the property is, a successful Quiet Title Action may not give immediate marketable title. In Florida, for example, there is title standard that declares when that status has been established.

I'm not a real property lawyer, so please speak with one before embarking on anything expressed here.

[ms.smiler]

19. flvegan, when my attorney gives me permission I'll come to DU to

share what we've learned and a Quiet Title action is exactly what I'll recommend to homeowners.

It is so unproductive and self abusive for homeowners to continue making mortgage payments when they won't ever receive a valid and clear Title to their properties.

The homeowner didn't do a single thing wrong but the Title problems result because of the Wall Street securitized mortgage scheme. MERS and their fraudulent Vice Presidents and Assistant Secretaries do nothing to perfect the lien.

Of course the original Promissory Note was most likely destroyed because the banks pledged the loans multiple time to numerous Trusts, but that the part of the scam mostly involves MBS investors.

A Quiet Title Action is not very expensive and only takes a few months to complete. I think it's key though to find an attorney that is knowledgeable and experienced with securitized mortgages.


DirkGently - you do have an eye on the industry. "Could be the pending "deal" with the AGs; could be they're having trouble replacing the "robo-signers" with people who can actually execute the Assignments they need."

Is there anything more you care to contribute?

[DirkGently]

22. These are my observations. MERS is a mess, but your conclusions regarding QT actions are far-fetched

You're aware of these opinions and don't think much of them, as I recall. But if you want my full take, here it is:

MERS is a bad idea, and harmful to consumers in my opinion. It makes ownership of the debt opaque. And I'd agree servicing companies should not be allowed to be foreclosure plaintiffs -- only the holder of the note should be empowered to that, and in many jurisdictions, it's the case. But I've yet to see anyone argue successfully that somehow means the debt itself is "fraudulent," or the lien unenforceable. And they've tried.

I strongly urge you not to try to talk anyone into filing a Quiet Title action just because there's MERS mentioned somewhere in their chain of title. It's bad legal advice. I think a Satisfaction of Mortgage from MERS is maybe not ideal, but no one is challenging title, or coming back to collect twice on a mortgage that I've seen.

The real dirt -- the real "fraud" -- was the packaging of subprime loans into securities instruments that were then given absurdly high ratings. The effect was that any mortgage was a good mortgage. For the lender. So underwriting ceased. Mortgages became something anyone could get, with no real qualification process, for practically any amount.

Banks knew this. Rating agencies knew it. It was corporate capitalists' favorite feeding frenzy -- a market bubble. Bubbles pop, and only those with the wealth to survive them, or, in this case, sufficient political clout to get the government to take the losses out of the American taxpayer, survive.

That was the scam. That was the fraud. They created FALSE VALUE. Nothing better for the investment class. They jump in, make a mint, and leave everyone else holding the bag. Tulips or silver or real estate, it's the same scam. The result this time is that good borrowers got into loans that instantly became undersecured. Less strong borrowers collapsed because they were depending on interest-only schemes that could only work if values continued to rise.

The rest appears to me to be nothing more sinister than giant corporations, swimming in more paperwork than they can handle, desperately trying to be competent, which they are not, and leaning on the foreclosure firms in such a way that dishonesty would occur, and not sweating that. But note: big banks were NEVER good at digging up the original note, finding their Assignments of Mortgage, having a V.P. sign an Affidavit. They're too big. But they usually manage. Now, they're the victims of their own "success" -- they're swimming in paper they have no ability to deal with.

The robo-signing is an example. Banks simply required the foreclosure mills to go faster than was possible, and let THEM figure out how to cheat. I don't think, and don't know anyone who thinks, it means the loans themselves are somehow non-existant, or unenforceable.

Make no mistake, the mortgage debacle was a theft. It was the theft of the last significant asset and security of the middle class and workers -- their HOMES.

But the MERS / securitization frothing to the effect that somehow these mortgages don't exist skips over a huge, gaping hole in logic, which is that MONEY CHANGED HANDS. Real people bought real homes with real money. That debt doesn't evaporate over anyone's overheated technical theory about the assignment process or servicing companies, or anything else.

If you stop paying your mortgage, someone's going to ask you if you were loaned $xxx,xxx with which to purchase a house, and pledged the house as collateral. If the answer is "yes," how do you then claim not to owe the money? Or that the lien is invalid?

In my opinion, none of the Internet-based heavy breathing about these mortgages somehow going away if you "know the trick" is going to work.

If we want to take back some of what these banks and investment houses stole, we're going to have to legislate it. Cram them down. Make them take market value, either en masse, or as part of the Ch. 13 Bankruptcy process. Even just making HAMP mandatory, instead of a "please, if you want to" process would be a huge improvement. As it stands, lenders appear to be just jerking people around for a few months, making them send in a million forms, and then saying, "Sorry, you don't qualify." That would help.

These other theories will not, and I worry about people with NO problems with their mortgage screwing themselves up for no reason, or people in default missing an opportunity to mount a realistic defense if they have one to make.




edited for speling, grammers, syntax, style, content, and meaning.

[flvegan]

23. Far-fetched? How so?

Logic v. law? Really?

And I have to say, if it were to arise: "If you stop paying your mortgage, someone's going to ask you if you were loaned $xxx,xxx with which to purchase a house, and pledged the house as collateral. If the answer is "yes," how do you then claim not to owe the money? Or that the lien is invalid? "

"Prove up your claim" are the greatest 4 words ever uttered in the legal system in regards to debt.

[DirkGently]

26. Yes, it's far-fetched to suggest you need to Quiet Title because MERS is in the chain.

It's just not a title defect, period. MERS shouldn't be executing Satisfactions or anything else in my opinion, but there's no indication of a looming title issues over MERS. If you've got an example, I'd like to hear it.

As for your other question, of course a foreclosing lender has to prove up its claim. But no one so far has shown that mortgages that have been securitized or passed through MERS somehow do not exist.

A purchase money lien is a powerful thing, and can be enforced in equity as well as in the law. If you took the money and pledged the collateral, you can absolutely demand proof as to who holds it. But you've got a big hill to climb to argue the debt and the lien don't exist.

I think some people would like to overlook the question of whether someone actually borrowed money and gave a lien. You can't.

[flvegan]

28. Wow. For my own peace of mind, please tell me you're not practicing law.

At least not in regards to real property.

[DirkGently]

31. Is there a question, or an argument buried somewhere in your attempted snark?

[ms.smiler]

27. There is a particular legal reason which I can't yet disclose that

explains why I would recommend that any homeowner with a MERS document in their Title history file a Quiet Title Action. I don't expect anyone to rush out and file law suits because they read my postings but I do hope to provide enough information to get homeowners thinking about their mortgages.

We are in agreement about MERS which does not comport with existing law in a number of ways. It is usually in bankruptcy court when homeowners list their mortgage as unsecured debt that companies fail to prove the lien is valid, hence the supposedly 'free house" we read about from time to time.

Of course when MERS issues make it to state Supreme Courts, they rule in favor of homeowners.

This all started for me when I discovered over $54,000 in fraud in my mortgage, which is not at all uncommon. That is subject to Treble damages. That is pretty much the end of that mortgage loan whether it's valid, invalid, paid or with a balance due.

I refinanced so there is a fraudulent document in my Title history that clouds my Title. I'm just curious how much money someone somewhere owes me in addition to my Deed.

I recently filed a new type of suit against my mortgage servicer. The suit was only two pages long but packs one heck of a punch. As expected, my mortgage servicer failed to Answer and I'm awaiting a default judgment.

Imagine a situation where a company chooses to lose by default, rather than show up in court where they will only do greater harm to themselves.

DirkGently - I don't quite share all your views but it's not that I don't think much of them. I've engaged in discussion with you because I'm certain I can learn from you. We do have areas of agreement and areas where we fall slightly apart. I don't think homeowners should trust that their mortgages are free of fraud and that their Title is clear. I think that like me, someone probably owes them more money than they might owe to someone.

I also think this scam was well designed, intention and planned years ago when the banks set up MERS just prior to the repeal of the Glass Steagall Act.

The problem for the banks is that they forgot to dot an important "i."

;)

[Supersedeas]

30. when will American homeowners get their Mortgage holiday

[DirkGently]

17. Be better to cram them down to market value, given they created the false "value" in the first place

But something's got them spooked. Could be the pending "deal" with the AGs; could be they're having trouble replacing the "robo-signers" with people who can actually execute the Assignments they need. Could just be that the foreclosed properties market is so saturated they want to slow down to keep prices from falling even further.

Whatever it is, there's suddenly a lot of foreclosures on "hold," or awaiting critical documents from the lenders.