Bloomberg Reports that the big banks are borrowing big time money using money market funds as source money for financing repurchase agreements. This stirs the obvious conclusion that the mortgage bonds — and hence the claim on underlying loans — are in constant movement making the proof problems in foreclosure proceedings difficult at best.
The underlying theme is that there is tremendous pressure to make good on the mortgage bonds that never actually existed issued by REMIC trusts that were never actually funded who made claims on loans that never actually existed. All that is why I say you should argue away from the presumption and keep the burden of persuasion or burden of proof on the party who has exclusive access to the actual proof of payment and proof of loss.
The banks are still claiming assets on their balance sheet that are either without value of any kind or something close to zero. If I was wrong about this, the banks would be flooding all the courts with proof of payment (canceled check, wire transfer receipt etc) and the contest with borrowers would be over.
Instead they argue for the presumption that attaches to the “holder” and mislead the court into thinking that possession is the same as being the holder. It isn’t. The holder is someone who acquired the instrument “for value.” By denying the holder status and contesting whether there was any consideration for the endorsement or assignment of the loan, you are putting them in position to force them to come clean and show that there was NO consideration, NO money paid, and hence they are not holders in any sense of the word.
If you research the law in your state you will find that the prima facie case required from the would-be forecloser depends factually upon whether they are an injured party. If they didn’t pay anything for the origination or transfer of the loan, they can’t be an injured party. They must also show that their injury stems from the breach of the borrower and the breach of some intermediary. That is where the repurchase agreements and financing for all those purchases comes into the picture.
So far the banks have been largely successful in using bootstrap reasoning that a possessor is a holder and a holder is therefore a holder in due course by operation of the presumptions arising from the Uniform Commercial Code. And since normally a presumption shifts the burden to the other side (the borrower in this case) to come up with legally admissible evidence that the facts do not support the presumption, the borrower or borrower’s counsel sits there in the courtroom stumped.
Further research, however, will show that if the facts needed to prove the presumption to be unsupported by facts are in the sole care, custody and control of the claiming party, you are entitled to conduct discovery and that means they must come up with the actual cancelled check, wire transfer receipt, wire transfer instructions etc. The would-be forecloser cannot block discovery by asserting the presumption arising from their own self-serving allegation of holder status.
In this case the presumption arising from the allegation that the would-be forecloser is a “holder” is defeated by mere denial because it is ONLY the would-be forecloser that has access to the the actual proof of payment and proof of loss. I remind you again that the debt is not the note and the note is not the mortgage. They are all separate issues.
This is becoming painfully obvious as reports are coming in from across the country indicating that courts at all levels and legislatures are under intense pressure to find a loophole through which the mega banks can escape the truth, to wit: that they are holding worthless paper and that the only transaction that ever actually occurred was the one between the investors and the borrowers without either of those parties in interest being aware of the slight of hand pulled by the banks. The banks diverted the money invested by pension funds from the REMIC trusts into their own pockets. The banks diverted the documents that would have solidified the interest of the investors in those loans to themselves.
And let there be no mistake that the banks planned the whole thing out ahead of time. The only reason why MERS and other private label title databases were necessary was to hide the fact that the banks were trading the investments made by pension funds as if they were their own. Otherwise there would have been no reason to have anyone’s name on the note or mortgage other than the asset pool designated as a REMIC trust.
These exotic instruments are being tested by the marketplace and they are failing miserably. So the banks are throwing tens of billions of dollars to refinance the repurchase of the derivatives that were worthless in the first place. It’s worth it to them to retain the trillions of dollars they are claiming as assets that are unsupported by any actual monetary transactions. AND THAT is why in the final analysis, after they have beaten you to a pulp in court, if you are still standing, you get some amazing offers of settlement that actually are still fractions of a cent on the dollar.
Banking giants lead repo funding of securitized debt
Filed under: CDO, CORRUPTION, Eviction, foreclosure, GARFIELD GWALTNEY KELLEY AND WHITE, GTC | Honor, Investor, Mortgage, securities fraud Tagged: | Bloomberg, burden of persuasion, BURDEN OF PROOF, holder in due course, holder of note, MERS, modification, Mortgage, possessor of note, presumption, refinancing, repurchase agreements, settlement