hat tip to http://www.foreclosuredefensenationwide.com
Bill Sloan, Esq., in the 9th Judicial Circuit of Common Pleas in Charleston, South Carolina successfully turned the head of at least one judge, citing the United States Supreme Court case of Carpenter v Longen, 83 U.S. 271, 16 Wall. 271, 21 L. ed. 313 (1872). I might add that in the BP litigation, the Circuit Court of Appeals just issued a ruling on the same topic and said “Absent a loss , a claimant has suffered no injury. Unless a claimant can colorably assert a loss, it lacks standing. See Lujan v. Defenders of Wildlife, 504 U.S., 560 (1992) (noting that an injury is a required element of constitutional standing))… if a claimant has suffered a loss, but has no colorable claim that the loss was caused by the spill, it also lacks standing and cannot state a claim.” IN RE DEEP WATER HORIZON 5TH CIRCUIT COURT OF APPEALS FILED OCTOBER 2, 2013 CASE NO 13-30315.
The point is that in the cloud of overlapping and duplicitous transactions that characterizes the claims of securitization and retreat from allegations of securitization, there remains a series of questions about who lost what, when and why — and that inevitably leads to questions of who owes what, when and why. The banks would have the courts treat these transactions as simple singling out one single event from dozens of related events — namely the point at which the borrower stopped making payments. They seek to misdirect the court away from an inquiry of whether the payment was due, or due to the claimant, or whether there was any loan at the base of the transaction chain.
In this case Attorneys came into court saying they represented Deutsch Bank in the foreclosure — despite a very clear memorandum from Deutsch stating that nobody had authority to bring a foreclosure action in its name. The question of whether Deutsch even knew about the action was apparently never brought up. Instead the case turned on familiar arguments that the Trial Judge dispatched in a 4 page opinion and order.
The simple holding is obvious and so is the reason. Merely having paperwork doesn’t mean you have a legitimate claim. The Court found that the Carpenter case from 130 years ago stated the requirements quite plainly. The Supreme Court decision “clearly supports the notion that the Plaintiff must own the Note and Mortgage at the time the Complaint was filed.” The Court was also obviously disturbed by the fact that MERS was the mortgagee but never mentioned in the note.
Translation: as close as I can get in lay terms the Court is merely stating the obvious. At least it was obvious before the Courts lost their way in the maze of legal arguments and procedures attempted by players in the cloud of false securitization claims.
If your lawsuit is based upon a loan you must allege that the loan was made. If your action is based upon acquisition of the loan you still must allege that the loan was made and that you actually paid for acquisition of the loan. Otherwise the claim is speculative and cannot invoke the jurisdiction of the Court. Without that the second requirement is impossible to meet — that you have suffered damages as a result of the making the loan and the borrower not repaying it. These are not mere empty recitals. Without them, no lawsuit can continue.
The Wall Street cloud has argued that they can correct this during litigation. But this Court correctly said that is impossible. The basis for a trial in which the evidence would be presented would be the Complaint. If the Complaint requires that ownership of a real loan be present at the time the Complaint is filed then the Court’s jurisdiction has never been invoked. The Court has no choice. And the reason for this is that it is very well-settled that you bring a matter to court that must be an actual controversy and a plea for relief that can be legally granted. The fabrication of instruments after the filing of the lawsuit for the express purpose of the lawsuit is not only lacking in credibility it is clothed in impossibility.
The fact that the trial court cited a specific U.S. Supreme Court case from which the Supreme Court has apparently never retreated, means that the trial court was saying that this issue was decided 130 years ago, it is the law of the land and it overrides any state court that would rule otherwise.
This also lends support to those proactive homeowners who are “current” in making payments to a bank other than the originator who purports to be the servicer or the new owner of the loan. If they cannot answer the basic questions above as their response to a qualified written request or debt validation letter, then it is reasonable to assume that they are neither the lender nor the acquirer of the loan despite their representations to the contrary. Saying it doesn’t make it so.
In view of the homeowner’s concern that he know the identity of the creditor, whether his payments are being forwarded to the the actual creditor, and whether there has been an accounting for all receipts and disbursements FROM THE CREDITOR, not the servicer, are all valid questions. in nearly all loans originated since 2001, the note was signed by the homeowner under the mistaken notion that the Payee had loaned him the money. In fact, this was not the case and the Wall Street players are attempting to dance around this with legal arguments instead of plain facts showing who made the loan. They want the facts to be disregarded and in its place a theory to be used to guide the Court’s decision regardless of the facts.
Such proactive homeowners are also questioning the logic and money trail created by the cloud of false securitization claims. On the one hand Wall Street banks want the cloud of players in the securitization chain to be treated as one entity for purposes of enforcement against the borrower; on the other hand, they want the cloud to be treated as merely a collection of individual transactions for which the the borrower has no interest or claims.
But in that cloud there were payments received from third parties outside the cloud. Those are payments that arose in part because of the mere existence of the loan to the homeowner, whether properly documented or not. Those payments were made either as a result of sale to the Federal Reserve, which includes virtually all loans declared in default and many others or because the Master Servicer made the call in its sole discretion to devalue the “tranche” that the loan was declared to be assigned. The declaration of devaluation created insurance and credit default swap payments. The devaluation was of the entire tranche.
Thus payments received should be allocated to all the loan accounts in that tranche. To say otherwise would require a homeowner to default on a loan in order to get the allocation — obviously a result that any sane person would want to avoid. The sole assets of the tranche are the loans according to the Wall Street players and their paperwork. Hence the account receivable for each loan would be allocable to each loan in the pool based upon some reasonable formula and not necessarily pro rata. The bankers take advantage of this complexity and serve themselves a full cup of fees in the “breakage” that results from the allocation of those payments. Then they serve themselves again by not informing the investor that money has been received because the bankers say that the money received was a proprietary trade of the bank.
In short they keep money that should have been allocated to the account receivable of the investor. By not doing that they cheated the investor. But the fact they were so obviously the agent of the investor means that wherever the money landed, it must, from the perspective of the borrower or other outsiders to the cloud, be allocated for purposes of computation of the real unpaid balance of the creditor, after taking into account amounts held by the agent for the investor regardless of whether the agent willingly gives it up.
It’s difficult but not impossible to follow. The bottom line is that most of the money from many of the loans ended up in the pocket of the bankers who were supposed to act merely as intermediaries. And by the sheer power of their influence to declare the insurance and the derivative securities and hedges to be neither insurance nor securities, they are allowed to insure the same asset over and over again, without ever reporting to the investor that the account receivable has been paid down. That is why bank profits are high while investors are reporting losses.
This results in the account payable of the borrower remaining as though no payment had been received. Since the payments received were explicitly not purchases, they can only be accounted for as loss mitigation payments not merely bets by underwriters who were betting against the same securities they were selling to pension funds and other investors like credit unions and other vulnerable institutions.
Thus we find ourselves in a rabbit hole where the courts are largely refusing to see what is front of them even when it is well presented. All we ask is that the Court require compliance with requirements of pleading and proof. The complex facts will be revealed as one layer after another is unveiled through discovery.
Filed under: CORRUPTION, credit unions, expert witness, Fannie MAe, foreclosure, GARFIELD GWALTNEY KELLEY AND WHITE, investment banking, Investor, MODIFICATION, Mortgage, Motions, Pleading, securities fraud, Servicer, STATUTES | Tagged: 16 Wall. 271, 21 L. ed. 313 (1872), 83 U.S. 271, 9th Judicial Circuit of Common Pleas in Charleston, account payable, account receivable, Bill Sloan, Carpenter v Longen, Jeff Barnes, securitization cloud, www.foreclosuredefensenationwide.com |