The question is always posed — why did banks need to fake, fabricate, forge, and robo sign mortgage documents? The answer is partially revealed on salon.com citing Lynn Symoniak’s settlement in which she received more than $30 million personally for challenging the banks. According to the Salon article the reason for the fakery was that there was no legal way to establish ownership of the debt, note or mortgage and therefore no legal way to enforce collection of the debt or foreclose on the mortgage. This is exactly what produced a flood of lawsuits from investors who advanced money believing they were protected by mortgages and notes and a debt that was secured by a perfected lien on real property.
If the original loans were not faked, there would never had been any need to take the assignments, endorsements etc. And there would not be any question about who owned the debt, note and mortgage. But there is a question of ownership and the answer is nobody owns the loan but the investors own the debt, less third party payments from servicer’s making non stop Servicer advances, insurers, co-obligors, and maybe guarantors as well. Of course if the documents were faked there should never have been a payment on a Fannie or Freddie guarantee, there should never have been a payment from insurers, and there is a question as to whether the servicer’s would have been required to make those advance payments — except that they were part of the PONZI scheme.
Am I the only one raising the issue of where the servicers are getting the money to make monthly or quarterly payments on hundreds of thousands of mortgages? It MUST be from the fund the investment bankers are holding when they skimmed 15%-20% off the top of what the investors advanced for the purchase of bogus mortgage bonds. And THAT was the real reason the documents had to be faked from the start.
It turns out that the investors were told a big lie. First their money did not go into the Trusts that issued mortgage bonds. Those bonds created the illusion that the investors were getting something for their money. But the investment bank never sent the money to the Trustee for the Asset backed Trust. So the Trust was never funded and therefore was unable to pay for origination or acquisition of loans. What is revealed in the Salon article, is that even if they did purchase the loans, the Trusts never received title to the loans. No documentation was ever created or executed to show a valid transfer to the trusts — except for those loans that were in foreclosure and especially those that were in litigation. So they faked it. And the reason they faked it is that they believed they could get away with it. And despite the obvious illegality of this scheme, the banks were right in their assumption that they would get away with it.
But what is not discussed in the Salon article is that the actual note and mortgage were fabricated documents in most cases. And that is why the investors sued the investment banks for FRAUD alleging that the mortgage origination documents (note and mortgage and disclosure statements) were unlawful and unenforceable. Why? Because the investors were the lenders and they were ignored in the documentation of the loan. Instead, the investment banks diverted title to themselves. Hence the FRAUD allegations from investors, government agencies, insurers etc.
So if the note and mortgage were unenforceable then what happens when they are “assigned”? The legal answer is nothing happens because the base document being assigned is fabricated. The answer though in the real world of the judiciary is that the assignment eliminates the need to inquire about the original documents. Judges are all too willing to believe that banks would not assign something that was worthless. Since the assignment looks valid on its face, Judges disregard valid defenses because in their experience banks are more credible than borrowers. This is no longer the case. The borrowers are credible and the banks are lying.
So when you raise a standing defense, it is disregarded because the judges simply think that the banks are credible and borrowers are not. This is not corruption. It is ignorance of the facts. And they are ignorant of the facts because lawyers continue to hammer on technical deficiencies in the documentation instead of educating the judge on the facts of the case. The facts of the case depend upon the actual transactions that were completed — contract law 101 (offer, acceptance and consideration — all absent in the deal that shows up in the documentation of the loan). But in order to educate the judge the lawyers must educate themselves. And in order to educate themselves they need to get a title and securitization report, study it and understand it. That is why we offer to attorneys a consultation after they get the report.
Filed under: foreclosure |