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There seems to be virtually universal agreement that MERS was a bad thing — but still a good idea for the banks that profited from the fake securitzation scheme that hid behind the MERS curtain. The same agreement may be found with respect to fabricated, forged, Robo-signed documents in the chain of title. But I wonder if we are not being led down a rabbit hole. Saying they were bad is very different from giving homeowners actual relief. Homeowners are going to start winning cases only when they focus on what very judge knows — there are only two ways to discharge a legitimate debt — PAYMENT AND WAIVER. if you can attack the legitimacy of the debt, so much the better.
Millions of foreclosures have been finalised. There are two possible conclusions that Courts and Legislatures can reach regarding these foreclosures — (1) the loans were valid obligations that went unpaid and (2) the loans were not valid obligations (and perhaps they WERE paid).
If we assume that the obligations were both valid and unpaid at the time of the foreclosure, it seems obvious to me that the Courts and Legislatures are going to carve out some doctrine or exception that lets the wrongful Foreclosures stand and allows the future ones to proceed. And all the bad, defective and fraudulent paperwork in the world will be no impediment to creditors being paid money or property that would otherwise be lost. At most, perpetrators of such paperwork fraud will be subject to fine and forfeiture but the true creditors are not going to be deprived of repayment on the basis of the “mistakes” of intermediaries and agents in the paperwork.
If we assume the obligations were neither valid nor unpaid at the time of foreclosure then we have something else entirely. The wrongful foreclosures MUST be reversed and future foreclosures MUST be stopped — but only if there is no debt and therefore no default at the time of foreclosure. The faulty, fraudulent, forged, fabricated paperwork becomes part of a total case in which the debtor’s denial of the debt and denial of the default. But the reason the borrower wins is because there was no debt and there was no default. Lawyers for the homeowners are frequently making the mistake of relying upon legal argument rather than bookkeeping and accounting to show that the foreclosure is wrongful.
A wrongful foreclosure then should be defined not just as one in which the documentation was done poorly but because the homeowner didn’t owe the money and/or was not in default. This is easier than you might think, but it is intimidating to lawyers and borrowers. After all they know as well as anyone that they received a loan and they know they stopped making scheduled payments. How can they deny the debt? How can they deny the default?
The legal answer is that a person is ot a debtor and is not a borrower on a debt that isn’t due. And a debtor or borrower is not in default on a scheduled payment that is already paid or is not due. So how do you get the Judge’s attention on these issues?
The simple answer to those questions is the same answer to how can the banks lie like that and get away with it in Court or in the media? Because they can and there are no consequences to them for lying — unless the homeowner borrower has the staying power to get to the end of the case or at least into discovery where the judge enters an order demanding a full accounting starting with the creditor (not the servicer) all the way through the entire securitization chain through at least a dozen parties including (but not limited to) the borrower.
If the banks get stuck with a fine or sanctions, even if it is in the millions of dollars, it is only in one case. A handful of wrongful foreclosures easily pays for that.
The borrower too can make such allegations and deny the allegations of the other side with impunity until it is shown that the allegations were frivolous in which case the borrower will be hit with the same sanctions that have been paid by Wells, US Bank, BOA, Chase, Citi etc. The point is that if you deny the debt and the default with a straight face (same as the banks lie through their lawyers), the judge has no choice but to let the case go forward. Show the same temerity as the banks and the tables will turn.
So how can you deny the debt and the default with a straight face? It’s easy. Bring a third party report that can stand up under cross examination. The report should say that the transaction referred to in the note and mortgage never occurred and that the real creditor was being paid, without documentation, at the same time the pretender lenders were declaring a default.
You don’t try to get the judge to accept the report as true. Your point is that your side of the facts is entitled to the same repsect as the pretender side until it comes time to show real evidence. Thus you have denied the debt and denied the default. The answer to the obvious questions are that you never borrowed the money from the party shown as lender on the origination documents, you never borrowed money from the new party seeking to foreclose and there never was a transaction at any time in which a loan was purchased for actual money exchanging hands.
These are factual matters and you will prove them in most cases with the help of the Combo title and securitization report, the loan level accounting and the forensic analysis. If the “lender” was a straw-man you have a right to pursue the basis or authority for an assignment, allonge, endorsement, substitution of trustee and most of all a “credit bid” at auction. Our experience shows that every time a judge enters an order requiring the other side to fess up and show cash transactions and the whole money trail, they collapse.
The singular fact that few people have noted is that none of these cases go to trial. If the pretender banks and pretender servicers actually had the evidence to prove their case you would think they would be chomping at the bit to prove their case. Doing so would downgrade all the wrongful foreclosure complaints to mere technical arguments designed to get a dead beat debtor out a legitimate debt. But they can’t.
They claimed ownership when it came to receiving insurance proceeds, and the rewards of bailouts and credit default swaps. They claim agency when it comes to sanctions and counterclaims for predatory lending, appraisal fraud, and identity theft. So when it comes to receiving money, they claim to be the “principal” but when it comes to liability they claim to be only the “agent”. The debts — including those that might never go into “default” have been paid in full, renegotiated, settled to the satisfaction of the creditors. Or the creditors have elected to pursue payment from the investment bankers instead of the homeowners.
Either way, the debt is non-existent, paid, settled, or waived which means there is no legitimate basis for collection or foreclosure against the homeowner borrower. But if you allege that there is no right to foreclose because of bad paperwork, nobody is going to listen. Why should they?
MERS | Orgegon DOJ Attorney General John Kroger files an amicus brief in an Oregon foreclosure lawsuit pending before the 9th U.S. Circuit Court of Appeals
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: | Amicus Curae, attorney general, borrower, disclosure, foreclosure, foreclosure defense, foreclosure offense, fraud, MERS, Mortgage, predatory lending