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By Dale Wiley
So much of the discussion over the sites that cover the foreclosure
crisis tends to focus on very large-picture issues. Is MERS legal?
Can a foreclosure happen without the note? The discussion is so macro
that it tends to overlook the obvious: We’ve got people who are
losing their houses NOW. A decision from an Obama-packed Supreme
Court in seven years may be great, but they’re not going to be any
warmer on the streets in the mean time. That is why I see our
practice and our biggest victories as being on the “micro” end of
things. We still want to take on big picture issues, mind you, but we
need to understand that we can’t let that cloud our duty to the
clients who stand in front of us today.
When I look at the various foreclosure systems that I have
encountered, after spending some time in the nuances, I discover much
to work with. It’s not as great as if God himself would come down and
smite MERS with a bolt of lightning, but enough to help my clients.
Here are a few places I look:
MERS: Say what you will about MERS, but most courts are pretty
comfortable now with the concept that MERS transfers the deed of
trust, but not the note. In many cases, that’s all you need. Now, my
reading of Bellistri v. Ocwen is very narrow: an agent/servicer might
still be able to use the Deed of Trust to try to foreclose. But
that’s okay if the noteholder who has not made a transfer is now in
bankruptcy or otherwise merged. Then you can clearly show that they
didn’t transfer the note by the deed of trust. So how did it get
there? There are a number of cases where I am perfectly happy to have
MERS involved, because it puts two things in two places where they
can’t come back together. Not every time, mind you, but enough to
Also, is your MERS representative able to transfer to THAT entity?
This is another source of plenty of progress. They may have been
MERS-authorized for one entity, but not another. Make sure to check.
BANKRUPTCY: You need to know who held your note. Where are they now?
Chances are, they may well be in bankruptcy, or defunct. Check the
dates of any purported transfer against their own timeline. Were they
able to transfer anything? Sometimes, in a Chapter 11, they may have
some ability to transfer day-to-day assets, but this is where you need
to triple-check their authority under MERS.
Bankruptcy is an excellent source of useful material for homeowners
under the gun. Make sure to use it.
UNLAWFUL DETAINER: Be careful in these proceedings. Their rules tend
to be strict, and the lawyers will quickly point out that you can’t
“try title” in their cases. Judges will quickly tell you that they do
NOT want to see your securitization report. In most cases it is true
that you can’t try title. But is that what you are doing? If you
have a peaceable claim, you may be able to show that they must at
least show how they acquired their title. If you can get them to
trial, hire a lawyer to help and get away, lest they use your own
testimony against you. Have the lawyer procedure them to death, about
foundation and ethical rules about what lawyers can testify to. You
may be able to pull a rabbit out of a hat.
JUDGMENTS: Even when judgments are obtained, many times the lawyers
getting them don’t know what to put in them. A judgment without all
issues from the petition resolved is not a final judgment. You can
use this to your advantage to try to stretch the timetable to where
you want it.
I love the big picture. I try to arrange my cases to aid in its
creation. But if you have a hearing next week, you need to think
about that family’s short-term and long-term needs. They are to be
your interests in those cases. And sometimes, they’re all you need to
greatly impact the lives of a family.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: | bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND