Procedure vs Substance in Rescission

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This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located.

NOTE; THE NEIL GARFIELD SHOW WILL RESUME ON THURSDAY SEPTEMBER 10, 2015 6PM EDT
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The prime mistake amongst foreclosure defense attorneys is that (a) they are looking at substantive law only without studying procedural law and (b) they still can’t get over the “free house” myth.

If you are confronted by a court order signed by a real judge that you are absolutely convinced is wrong, what happens. ANSWER: Nothing. The order stands unless you do something about it. The “Something” is filing a pleading that establishes who you are, why you have a right to complain about the order and then what is wrong with the order. It might be motion to vacate or any number of other pleadings. If you think that the court violated your civil rights, you would probably bring a new lawsuit in Federal Court asking the Federal District Judge to vacate the state court order perhaps because the law denied due process or the way it was applied violated due process. The signed order (regardless of how offensive it is), at all times, during the contest, remains in full force and effect. Even if everyone is convinced you will win and get the order vacated, you must wait until the end of litigation to get it vacated — if the Judge agrees with you. The only exception is an emergency application for temporary restraining order, which has another whole set of procedural rules.

When a consumer sends a notice of rescission on a debt, it may have all kinds of things wrong on its face and in the circumstances under which it was sent. But the basic fact is that it was sent. That is all that is needed to make it the equivalent of the court order in the preceding paragraph. It is effective BY OPERATION OF LAW. Why is the court order effective? It is effective BY OPERATION OF LAW. AT THAT POINT IN TIME WHEN THE NOTICE OF RESCISSION WAS SENT, THE LOAN CONTRACT IS CANCELED, THE NOTE IS VOID AND THE MORTGAGE IS VOID — BY OPERATION OF LAW.

The banks and servicers are mounting a challenge to the inevitable and only ruling allowed regarding TILA rescissions. They don’t want to file a lawsuit or a petition for temporary restraining order to relieve the creditor of the duty to (a) cancel the note and return it to the borrower, (b) file the satisfaction of mortgage and (c) pay all money ever collected from the borrower and ever paid to third parties as compensation arising out of the origination (i.e., execution of loan documents). Execution of loan documents is NOT the same time as consummation.

Ask any closing agent. They get the funds after the documents are sent to the underwriting department where it is are reviewed again before the funds are released — hours, days and even months later. . The question is what underwriting department? It is the automated computerized set of standards maintained by LPS/Black Night and others who are distancing themselves from the table funded transaction in which the “lender” has engaged in behavioral that is “predatory per se” and which therefore does not entitle them to equitable relief (foreclosure) since they come to court with unclean hands. By layering the stack with multiple parties, none of whom have any interest in the loan, they create the illusion of a transaction with an originator who never spent a dime lending money to the borrower.

So we know that the identity is not going to be made available by the banks and servicers. That much is assured. The trusts are empty shells of trusts that exist on paper only, never did business and were never registered with any state or the federal government. They can’t get away from the simple truth that the ONLY parties entitled to payment are the investors whose money was used to fund or acquire loans — even though they didn’t know and would never have approved of the violation of the terms of the offer contained in the MBS prospectus, the Pooling and Servicing agreement, or anything else.

they are dancing around The issue. If this is handled correctly, the issue of when consummation occurred Will be a factual issue in dispute. That means they will have to raise it in a lawsuit against the borrower. And that means they are going to have to plead and prove standing. Since the rescission is effective as of the date of mailing, and effective means that the loan contract has been canceled (if it ever existed), the note and mortgage are void and the party who is actually the creditor has a duty to return the canceled note, file the satisfaction of mortgage, and pay the money to the borrower that was paid by the borrower and that was paid to third parties as compensation for the origination of the loan.

If these loans were actually legitimate, the strategy which I am suggesting would have little merit. The real creditor would allege that they were the lender to the borrower or that they had purchased alone from a party that owned the loan. They would be able to show Proof of that purchase in the form of a canceled check, a wire transfer receipt that could be verified or some other indication of the movement of money. But if the banks and servicers actually could produce the real creditor, there would be virtually no foreclosure litigation, As most of the defenses and attacks by the borrower would be moot.

The truth is that the loan contract probably never existed because the party on the note and mortgage was not the lender. This is a table funded loan which is predatory per se, under Reg Z. So you get them coming and going — either there was no consummation with any of the parties in the chain of people and entities that are relied upon by the collector or foreclosing party, or the transaction IS RESCINDED as of the date of mailing. and THAT means they can’t use the same arguments on standing as they do in foreclosure actions. In actions to vacate the rescission, the suing party cannot allege standing much less prove it by using the note and mortgage because those are now void instruments according to TILA, REG Z, and the Supreme Court in Jesinoski. Either way the remedy is the same, more or less, to wit: return of the canceled note, filing of satisfaction of mortgage (or having it nullified by a court) and payment of all money ever paid by borrower plus potential damages under consumer protection statutes.

It might be suspected that the three years has run, that the three days have run or that the rescission is faulty because of other restrictions in TILA. But it is nevertheless effective and requires no judge to rule upon its effectiveness. That puts the burden of pleading and the burden of proof completely on the party seeking to vacate the rescission. If they do nothing, the rescission stands. And as pointed out by Justice Scalia TILA rescission makes no distinction between disputed and undisputed recessions. So even if a faulty rescission is nonetheless effective, Which means that the creditor has 20 days in which to satisfy the three duties under TILA rescission. If nobody files a lawsuit to vacate the rescission within 20 days of receipt of the notice of rescission (and remember that under Dodd Frank notice to one is notice to all), then the rescission is final and any of the factual issues that you would have expected to arrive on a faulty rescission would have been waved. This is a procedural argument but there is no doubt that it is correct, especially with the wording of the opinion in Jesinoski.

The important thing to remember is that the rescission is effective upon mailing which means that it is the same as a court order bearing the date of mailing of the notice of precision. If you think of it that way it may be easier to understand the strategy that I am suggesting here. Since there does not appear to ever have been a lawsuit by any bank seeking to vacate a TILA rescission, I am assuming that they cannot come up with a creditor who actually has standing. And that is because they stole the money in the first place from investors who are the ONLY parties entitles to be paid — but ONLY under some equitable theory of unjust enrichment, most assuredly not secured in their claim.

90 Responses

  1. thanks

  2. please review and comment on previous GREG postings just now cleared by moderator
    thanks

  3. @nm

    nope. I’m in the dark on this one.

    I want him to show us what exactly he’s done, with whom, what kind of response did he get from the bank and the court, and what’s the status/outcome.

    crickets…so far.

  4. Bob G: Any case[s] you can reference re recession as you state should be followed that has substance or leads to more substantial research where actual motions were made and not dismissed as frivolous?
    Interested.

    mnatedgetraderplusdotcom if you prefer not to post publicly.

    thx…

  5. Sc- thats an old saying i just threw in there for some humor. It wasnt directed at anyone in particular.
    As a happy go lucky sort of person, all this banter of negativity and a horrible future gets to me once in awhile.

  6. DEB. .. The currency reset is supposed to stop the world wide financial collapse. Things will get worse before they get better. At least when we emerge we will not be slaves to the cartel. Many many people will likely take q 70 to 90 percent haircut….wiping out an entire generation of middle working class….who will never recover those losses.

    As far as public assistance programs…funded by who?
    Its not going to be the middle class…….

  7. I know I got off topic but my sources reassure me the sky is not going to fall.

  8. Where is delove

  9. Oh the bitchin in here
    Lol

  10. Ian. .Is that your best shot?

    News Flash…. It does not take a genius to know if you have a legal problem….you call your attorney.

  11. E.tolle- or, one might say, “if brains were gasoline she wouldn’t have enough to fill a piss-ant’s motorcycle doing half a lap around the inside of a Cheerio.

  12. Honigman Miller Schwartz and Cohn LLP

    Shortest opinion of the year explains TILA rescission right
    http://www.scotusblog.com/…/opinion-analysis-shortest-opinion-...
    SCOTUSblog
    Jan 13, 2015 – The case involves the right to rescind mortgage transactions in the Truth in Lending Act … An impecunious home-mortgage borrower managed to persuade the Supreme Court to review and …. Recent Special Features.

  13. db
    You are supposed to site where you got that info

  14. Willie…..

  15. from a lawyers blog

    The question before the Court was what steps the borrower has to take to rescind within the three years. The lender argued that the borrower hasn’t rescinded unless it actually initiates litigation. Not so, the Court held today. The statute explains, in terms the Court regarded as “unequivocal,” how “the right to rescind is to be exercised: It provides that a borrower ‘shall have the right to rescind, by notifying the creditor, in accordance with regulations of the Board, of his intention to do so.’” Because that language “leaves no doubt that rescission is effected” by the borrower’s notice, the borrower does not also need to sue within the three years. The rest of the opinion swept aside all of the lender’s arguments as pointless in the face of the language.

    Given the uphill battle the lender faced with the language, its only hope of prevailing was to put the case in some context that would make the result seem too unpalatable to tolerate. In my view, the strongest point the lender presented looked to the historical structure of rescission. Specifically, rescission at law required the borrower to tender the entire amount of the loan, while rescission in equity would have required a judicial decree. Countrywide suggested that a Congress concerned about practicalities could not have intended to remove both of those avenues for rescission and allow it to occur by a simple notice. This would allow, the lender emphasized, frivolous claims of rescission from borrowers motivated to avoid foreclosure as a response to their extended nonpayment. Think “deadbeats.” In the background, given what we know now about the recordkeeping propensity of entities like Countrywide, those claims will be most difficult to rebut three years after the fact.

    Certainly a well-presented argument, but not enough. The Court responded: “Nothing in our jurisprudence, and no tool of statutory interpretation, requires that a congressional Act must be construed as implementing the closest common-law analogue.”

    A skeptic would take heart from this decision. An impecunious home-mortgage borrower managed to persuade the Supreme Court to review and reverse a lower-court decision favoring the immense corporate lender. Because I’m not so skeptical, I’m more inclined to agree that the lender’s side of the statutory argument was a lot harder than the borrowers, and to notice the borrower’s ability to retain Court veteran David Frederick to present their side of the issue to the Justices. More instrumentally, the Justices might have thought it easier for the lender to get relief from an erroneous ruling against it than it would be for the homeowner: tie goes to the side with the least political heft!

  16. The grand plan we are
    witnessing now is nothing less than historic.

    The grand plan we are witnessing now is nothing less than historic. Yes,historic. Let’s take a quick review of what has transpired over the last six weeks or so.

    – June 7 – 9th: President Barack Obama and Chinese President Xi Jingping meet in Palm Springs, California for negotiations on the Basel III accords, the Global Currency Reset and the Restoration of the Republic.

    – June 27th: The United Nations Security Council votes 15 – 0 to lift Chapter 7 sanctions against the country of Iraq after nearly 23 years of hardships on the Iraqi people. This is Iraq’s biggest achievements since the ouster of Saddam Hussein a decade ago, allowing Baghdad to regain control over its own currency, oil and economy.

    – June 28th: The Iraqi Stock Exchange (ISX) is officially approved to become part of the NASDAQ system.

    – June 28th: An accountant employed at the Vatican bank, Monsignor Nunzio Scarano, is arrested and charged with smuggling large caches of money across international borders.

    – July 1st: Two top officials at the Vatican Bank resign amid a growing money laundering scandal as rumors continue to swirl Pope Francis may shut down the scandalous and criminal Vatican Bank entirely.

    – July 2nd: The Federal Reserve Board votes 10 – 0 to adopt the new Basel III banking regulations.

    – July 9th: The Federal Depository Insurance Corporation (FDIC) also votes to adopt the Basel III banking regulations.

    – July 9th: The Office of the Comptroller of the Currency (OCC) agrees to adopt the Basel III provisions.

    – July 10th: Treasury Secretary Jack Lew meets with a Chinese delegation to work out final details of the Global Currency Reset.

    – July 11th: An updated version of the Glass – Steagall Act is reintroduced for vote in the US Senate led by Senators Elizabeth Warren (D-Mass.) and John McCain (R-Ariz.) which would require all the major, “too-big-to-fail” banks to be completely overhauled and downsized.

    – July 15th: The Iraqi Stock Exchange opens for international trading for approximately two hours to test if their system interfaces correctly with NASDAQ. In order for the ISX to conduct international trading, the logical next step is for Iraq to revalue their dinar in order to have an internationally recognizable currency.

    – July 18th: Confirmed reports emanating out of the United Nations (UN) insist the revaluation of the Iraqi dinar was announced within the UN itself by two foreign countries, one of which may have been the delegation from Iraq.

    – July 20th: Fox News briefly reports US Secretary of State John Kerry offering confirmation of the adoption of the Basel III banking regulations.

    – July 21st: Numerous reports of banks across the US, and apparently some in the UK, announcing to their customers various down times for system maintenance including the international service known as SWIFT (Society for Worldwide Interbank Financial Telecommunications).

    – July 23rd: More rumblings coming out of the UN as a growing chorus of impatience continues to swell amongst some its member nations who openly question why the Global Currency Reset has not been enacted yet.

    By any stretch of the imagination, the sheer number of astounding events listed above marks nothing less than a complete changing of the guard. These kinds of developments would not even happen, if the old regime was still in charge. We simply have not seen this kind of significant activity on both a national and international scale ever, ever before.

    ….

  17. We’re In The Midst of A Global Currency Reset

    Let’s examine the rumors that are floating around.

    1. The Fed Reserve will merge or absorb into the UST

    2. There IS a global event that has been unfolding during the past ten-plus years. The Basel III Protocols (which includes the Global Currency Reset) have required the cooperation of many nations — 198, to be exact.

    3. What gets in the way from time to time with regard to this Global Currency Reset (as has just happened in the past few days) is political maneuvering and disagreements that delay things.

    4. Fiat currency is becoming a thing of the past due to ongoing pervasive fraud and devaluation of paper currency – now it will have to be backed by assets (precious metals, oil, etc.) China would like to take over the US’s position as holding the world’s reserve currency in hopes to have their currency backed by gold. However, Clinton mentioned in one of her speeches that Iraq will become the richest nation in the world due to its oil reserves. Thereby, numerous nations that hold the Iraqi Dinar are looking to the IQD becoming the global reserve currency.

    Basel III (or the Third Basel Accord) is a global, voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk. It was agreed upon by the members of the Basel Committee on Banking Supervision in 2010–11, and was scheduled to be introduced from 2013 until 2015; Basel III was supposed to strengthen bank capital requirements by increasing bank liquidity and bank leverage.

    5. Precious metals (gold and silver) prices are manipulated. Currently the price is dropping. Why? Something big is about to happen. What?

    The Global Currency Reset will take those 198 nations currency and revalue it up or down based upon that country’s assets. For example, Canada will go up about 20 cents, along with the Dong and IQD going up. The USD may go down or not depending upon how much IQD they have in reserve – and because O had all the other nations that owe the US money agree to pay back what they owe when the reset happens taking the US out of debt.

    Since the US has billions worth of UQD they can do several things. Exchange the IQD for gold thus taking the USD back to the gold standard. Hence the current USD will be collected and replace by the new currency. New currency expected to be distributed in the fall.

    6. At the G-8 summit this year the talk among nations was how to collect taxes from tax dodgers. Basically the global banking system is tightening up its agreements between nations and will identify those who have been slipping through the current tax holes. Thus more tax return money for the nations who track down their tax dodgers.

    So instead of a crash – which is inevitable given the current fiscal structure, there will be a Global Currency Reset which is in the works.

    This aired on Bloomberg TV on July 25th. It is the FIRST time it has EVER been mentioned in the mainstream media…

  18. FOREIGN CENTRAL BANKS Ready to DUMP DOLLAR?? China and Russia Suggesting A New Bretton Woods
    Both China and Russia have begun discussing a new Bretton Woods-style agreement which would back the Yuan with gold and change the very fabric of the international monetary system. This concept falls right in line the developing nations’ demand for a replacement of the U.S. dollar, and, the IMF’s new Special Drawing Rights currency, which is partially valued in gold, and backed by the IMF’s unaudited gold horde:

    JP Morgan fleeing commodities markets? Paper gold decoupling from physical gold? China and Russia suggesting a new Bretton Woods? Is this a signal for something monolithic on the horizon for the global economy? If there is a sudden shift by developing nations away from the dollar and towards a basket currency system partially valuated in gold, this would be disastrous for the American fiscal structure. I have been tracking the slow dump of the greenback since 2006, and I have to say, I’ve never seen escalation like I have seen in the past year.

  19. Im if the mindset that …. Whatever it is and whatever its worth they will manipulate it in their favor because history has shown this. All that’s left is the rule of law … Applied or not it is there.

  20. Some one is a counter party to the energy losses…guess who?
    This is 20X. Bigger than the subprime mortgage losses in 2008.

    Shortage in silver
    Gold up…dollar down reaction

  21. Deb. .. QQ. .he is neeked.
    Watch silver and gold …
    And of course energies..

  22. Et
    Its just ” bloggin”….
    I think therefore…
    My case is plead and im happy with it.

  23. “Stay Current. Things are moving rapidly ….”

    The only thing moving rapidly is the drool from SC’s chin. All the while pretending that she understands concepts greater than how to count the change in her sock drawer.

    Listening to and taking advice from KC is a sure-fire way to needing heavy psycho-meds.

    Follow her at your own risk.

  24. for Illinois folks and others… “a blast from the past” from the late EUGENE W ALPERN (RIP); a legal advocate who banged the doors of the Cook County Courts during the infamous “Operation Greylord” hearings which took down judges and other officials for corruption…

    Some of his references from his now defunct website “Citizens for Legal Responsibility”; are still useful… to wit:

    Judges as Criminals
    ________________________________________
    CIRCUIT COURT A CRIMINAL ENTERPRISE
    The Seventh Circuit Court of Appeals held that the Circuit Court of Cook County is a criminal enterprise. U.S. v. Murphy, 768 F.2d 1518, 1531 (7th Cir. 1985).

    The United States Supreme Court recently acknowledged the judicial corruption in Cook County, when it stated that Judge “Maloney was one of many dishonest judges exposed and convicted through ‘Operation Greylord’, a labyrinthine federal investigation of judicial corruption in Chicago”. Bracey v. Gramley, 519 U.S. 1074, 117 S.Ct. 726 (1997).

    There has been no finding that the Circuit Court of Cook County is no longer a criminal enterprise, nor that judicial corruption no longer exists in Chicago.

    Since judges who do not report the criminal activities of other judges become principals in the criminal activity, 18 U.S.C. Section 2, 3 & 4, and since no judges have reported the criminal activity of the judges who have been convicted, the other judges are as guilty as the convicted judges.

    The criminal activities that the Federal Courts found in the Circuit Court of Cook County still exist, and are today under the care, custody and control of Judge Greylord III (Chief Judge Timothy C. Evans). The Circuit Court of Cook County remains a criminal enterprise.

    JUDICIAL IMMUNITY
    Judges have given themselves judicial immunity for their judicial functions. Judges have no judicial immunity for criminal acts, aiding, assisting, or conniving with others who perform a criminal act, or for their administrative/ministerial duties. When a judge has a duty to act, he does not have discretion – he is then not performing a judicial act, he is performing a ministerial act.

    Judicial immunity does not exist for judges who engage in criminal activity, for judges who connive with, aid and abet the criminal activity of another judge, or to a judge for damages sustained by a person who has been harmed by the judge’s connivance with, aiding and abeting, another judge’s criminal activity.

    TRESPASSERS OF THE LAW
    The Illinois Supreme Court has held that “if the magistrate has not such jurisdiction, then he and those who advise and act with him, or execute his process, are trespassers.” Von Kettler et.al. v. Johnson, 57 Ill. 109 (1870)

    Under Federal law which is applicable to all states, the U.S. Supreme Court stated that if a court is “without authority, its judgments and orders are regarded as nullities. They are not voidable, but simply void; and form no bar to a recovery sought, even prior to a reversal in opposition to them. They constitute no justification; and all persons concerned in executing such judgments or sentences, are considered, in law, as trespassers.” Elliot v. Piersol, 1 Pet. 328, 340, 26 U.S. 328, 340 (1828)

    The Illinois Supreme Court held that if a court “could not hear the matter upon the jurisdictional paper presented, its finding that it had the power can add nothing to its authority, – it had no authority to make that finding.” The People v. Brewer, 128 Ill. 472, 483 (1928). The judges listed below had no legal authority (jurisdiction) to hear or rule on certain matters before them. They acted without any jurisdiction.

    When judges act when they do not have jurisdiction to act, or they enforce a void order (an order issued by a judge without jurisdiction), they become trespassers of the law, and are engaged in treason (see below).

    The Court in Yates v. Village of Hoffman Estates, Illinois, 209 F.Supp. 757 (N.D. Ill. 1962) held that “not every action by a judge is in exercise of his judicial function. … it is not a judicial function for a judge to commit an intentional tort even though the tort occurs in the courthouse.”

    When a judge acts as a trespasser of the law, when a judge does not follow the law, the judge loses subject-matter jurisdiction and the judges orders are void, of no legal force or effect.

    The U.S. Supreme Court, in Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 1687 (1974) stated that “when a state officer acts under a state law in a manner violative of the Federal Constitution, he “comes into conflict with the superior authority of that Constitution, and he is in that case stripped of his official or representative character and is subjected in his person to the consequences of his individual conduct. The State has no power to impart to him any immunity from responsibility to the supreme authority of the United States.” [Emphasis supplied in original].

    By law, a judge is a state officer.
    The judge then acts not as a judge, but as a private individual (in his person).

    VIOLATION OF OATH OF OFFICE
    In Illinois, 705 ILCS 205/4 states “Every person admitted to practice as an attorney and counselor at law shall, before his name is entered upon the roll to be kept as hereinafter provided, take and subscribe an oath, substantially in the following form:

    ‘I do solemnly swear (or affirm, as the case may be), that I will support the constitution of the United States and the constitution of the state of Illinois, and that I will faithfully discharge the duties of the office of attorney and counselor at law to the best of my ability.'”

    In Illinois, a judge must take a second oath of office. Under 705 ILCS 35/2 states, in part, that “The several judges of the circuit courts of this State, before entering upon the duties of their office, shall take and subscribe the following oath or affirmation, which shall be filed in the office of the Secretary of State:

    ‘I do solemnly swear (or affirm, as the case may be) that I will support the constitution of the United States, and the constitution of the State of Illinois, and that I will faithfully discharge the duties of judge of ______ court, according to the best of my ability.'”

    Further, if the judge had enlisted in the U.S. military, then he has taken a third oath. Under Title 10 U.S.C. Section 502 the judge had subscribed to a lifetime oath, in pertinent part, as follows:

    “I, __________, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign or domestic; that I will bear true faith and allegiance to the same; …”.

    The U.S. Supreme Court has stated that “No state legislator or executive or judicial officer can war against the Constitution without violating his undertaking to support it.”. Cooper v. Aaron, 358 U.S. 1, 78 S.Ct. 1401 (1958).

    Any judge who does not comply with his oath to the Constitution of the United States wars against that Constitution and engages in acts in violation of the Supreme Law of the Land. The judge is engaged in acts of treason.

    Having taken at least two, if not three, oaths of office to support the Constitution of the United States, and the Constitution of the State of Illinois, any judge who has acted in violation of the Constitution is engaged in an act or acts of treason (see below).

    If a judge does not fully comply with the Constitution, then his orders are void, In re Sawyer, 124 U.S. 200 (1888), he/she is without jurisdiction, and he/she has engaged in an act or acts of treason.

    TREASON
    Whenever a judge acts where he/she does not have jurisdiction to act, the judge is engaged in an act or acts of treason. U.S. v. Will, 449 U.S. 200, 216, 101 S.Ct. 471, 66 L.Ed.2d 392, 406 (1980); Cohens v. Virginia, 19 U.S. (6 Wheat) 264, 404, 5 L.Ed 257 (1821)

    What is the penalty for treason?

  25. From the wizard of oz ” pay no attention to the man behind the curtain”
    Or what the stock matket is saying,

  26. Yes its stale but you see that the wheel had been turning for some time already but we people are fed a diet of nonsense by the mediA treated like mushrooms – fed s*^% snd kept in the dark.

  27. Deb. ..that article is stale….things have changed dramatically in the last 20 days. Stay Current .
    Things are moving rapidly ….

  28. http://www.appellatestrategist.com/2012/09/articles/jurisdictions/illinois/argument-report-when-can-a-foreclosure-be-appealed/

    Argument Report: When Can a Foreclosure Be Appealed?
    By Kirk Jenkins on September 27, 2012 Posted in Illinois

    Our reports on the oral arguments of the Illinois Supreme Court’s September term continue with EMC Mortgage Corp. v. Kemp. Kemp presents the question of when a home foreclosure may be appealed.

    The facts and lower court opinions in Kemp are described in detail here. Based upon the Court’s questions, it seems reasonably likely that the Court will affirm the Appellate Court and require the plaintiff to pursue her objections to the foreclosure after the order confirming the sale is entered.

    Plaintiff filed its foreclosure complaint six years ago. The defendant responded by denying the plaintiff’s standing, first in an answer, and later in a counterclaim. Finally, nearly three years after the action was filed, the trial court entered a judgment of foreclosure. After reconsideration was denied, the defendant filed for bankruptcy. Over a year after the judgment was entered, the defendant mounted a new attack on the sale, filing a motion under Section 2-1401 of the Code of Civil Procedure alleging that the plaintiff was trying to foreclose a mortgage it didn’t own at the time of filing. The trial court refused to overturn the sale, but authorized an interlocutory appeal under Supreme Court Rule 304. The defendant moved for reconsideration, the trial court denied the motion, but once again, the court included Rule 304 language in its order.

    Section 2-1401 petitions lie only to challenge final orders. Rule 304 language isn’t a magic wand of appealability for purely interlocutory orders; it confers appellate jurisdiction over an order which finally disposes of less than all claims, or less than all parties. So the question in Kemp was — was there a final order under all this civil procedure? If not, none of it mattered.

    Counsel for the defendant began his argument by emphasizing the importance and novelty of the underlying issues, should the Court find appealability. Justice Garman asked counsel whether the issue of standing can be forfeited; counsel responded that the defendant was arguing that the order of foreclosure was void, meaning that it could be challenged at any time. Justice Theis pointed out that defendant had filed a Section 2-1401 petition, so where was the final order? Counsel responded that Section 2-1401 petitions were also proper to attack void orders, and pointed out that the trial court had expressly agreed to add Rule 304 language to the order of foreclosure. Justice Theis noted that while Rule 304(b) expressly authorizes an appeal from a true Section 2-1401 petition, the trial court had authorized Rule 304(a) interlocutory appeal language. Counsel responded that this was the dilemma; it was often too late to present meritorious defenses if a defendant awaited an order confirming the sale. In response to a follow-up question from Justice Theis as to whether the court could have modified the order of foreclosure, counsel argued that once defendant’s motion to reconsider was denied, the order of foreclosure became final. At that point, given the Section 2-1401 petition, appellate jurisdiction existed.

    Justice Freeman asked what would prevent defendant from appealing after entry of the final order confirming the sale; counsel cited to judicial economy, again arguing that such final orders were often too late to challenge foreclosures. Justice Thomas asked how lack of standing could make an order void if standing could be waived, and counsel pointed out that the defendant had asserted lack of standing from start to finish of the litigation.

    Justice Theis asked counsel for the plaintiff how it could be true that there were cases holding that a judgment of foreclosure can be appealed if Rule 304(a) language is included in the judgment; counsel responded that occasionally, there are foreclosures involving multiple parties or multiple claims which could become appealable with 304(a) language. Chief Justice Kilbride asked whether foreclosure and the confirmation of sale involve separate judgments, but counsel responded that he had never seen the final order called a judgment. Justice Theis asked whether counsel had ever seen Rule 304 language added to a judgment of foreclosure; counsel answered that in Cook County, such language was very difficult to obtain in foreclosures. Following up on a question to the defendant by Justice Freeman, counsel concluded by arguing that the plaintiff had established its standing to sue from the outset of the suit by attaching a copy of the underlying promissory note with a blank endorsement. Such an endorsement turns the note into bearer paper under the U.C.C., meaning that the plaintiff had standing to enforce the note, even if it didn’t technically own the note.

  29. Neil Garfield posted: ”

    Livinglies Team Services: see GTC HONORS Services, Books and Products

    ===========================

    For more information please email us at gtchonors.llblog@gmail.com or call us at 954-495-9867 or 520-405-1688

    This is not legal advice on your c”

  30. SC
    Our kids are going to need to be tough, I know mine is.

  31. just for $hits & grins… grain of salt and all….

    NOTICE:
    A SIMPLE TREATISE (Treaty):

    greetings; peace and prosperity upon all to whom these presents come:

    In the portion of North America commonly known as the several united states of America; it is the centuries-old common understanding; supported and affirmed by the One Supreme Court; that “The People” (e.g. the individual men and women living on the land; then and in the future; and their heirs); did each directly inherit; imbued upon them by Treaty and Royal Decree; their apportionment of the whole of the King of England’s claimed “Divine Right of Sovereignty”; which was believed by all to exist prior to the termination of hostilities between the People of America and the Kingdom of England; a/k/a “the Revolutionary War”;

    With so many lawful potential “Kingdoms” competing for land and resources; a compromise was struck: Create a State (a Trust); A State is thus an inherent fiction established as a Trust for the several men and women whom created it; subsequently appointing or electing men or women from their body to serve as Trustees; It is the corporeal expression of a community of living men and women; acting in their “inherent sovereign capacity”; with their land/property; contrived by them for their individual and mutual benefit; The primary purpose of such a unique American styled State is to protect the inherent rights; lives and property of “The People” (e.g. the men and women who create it or allow it to continue; in their sovereign capacity);

    When additional sub-corporate fictions; created and allowed to exist for the benefit of “The People”; under the rules of this State; or any state; by a sub-set of the body politic comprised of “less than all”; cause harm or injury to its creators; “The People”; or any one of them; (e.g. the actual men and women) or their property; it is the duty of the officers of the State to prioritize actions and decisions in favor of “The People”; or any one of them; not said sub-corporate fictions;

    Anything less is treason against “The People”;

    The present Trustees have abandoned their duty(ies) to “The People”; and specifically to i; a man; a plenipotentiary Grantor/Beneficiary; Such honor and integrity required of said Trustees is not evident to i; prima facia; nor appears to exist in this present universe spacetime…

    Wherefore; to wit:

    Until such time that i; a man; see evidence that the honor and integrity of the initial Trust contract is restored and the Grantors/Beneficiaries be protected by the contracted Trustees in the manner(s) so originally proscribed; i promise and choose to live alone; without said contract(s); ab initio; upon my land; self governed; in peace and harmony with and in support of all neighbors’ rights; i will take nothing from you without compensation; please take nothing from i without compensation; please cease and desist all presumed claim of governance over i; or harm or injury; to i; a man; or property(ies) as none is threatened against you; so help me g0d;

    conveyed by: i; a man; //s//; this twenty-seventh day of august two thousand fifteen

    “‘The TRUTH’ is an opinion held by man…”

    “‘That which is True’ is a fact, unrelenting to man’s opinion, and is (for man’s earthly intents and purposes) eternal…”

    In defining ‘That which is True’, it is first helpful to note what ‘That which is True’- is not:

    • ‘That which is True’ is not what makes people feel good. Unfortunately, bad news can be true. For example: If a building were on fire and there is only one way out. To tell people there is only one way out may sound narrow and exclusive, but the question is: is it true? And that might be very bad news if you are in the burning building and are told there is only one exit. But that is irrelevant to ‘That which is True’.

    • ‘That which is True’ is not what the majority says is true. Fifty-one percent of a group often reach a wrong conclusion. Sometimes ‘That which is True’ is confused with what a majority of people at a particular time or place think is ‘The Truth’, for example: A portion of the human race some centuries ago held it to be ‘The Truth’ that the earth was flat. That false opinion has now been generally repudiated. This should not be interpreted to mean that the objective fact has changed —that perhaps what once was true is no longer true. Rather, if it has now been proven objectively true that this planet is spherical, it never was true that it was flat. Then, consider Slavery… What has changed is not the fact of the matter but the prevalence of an opinion once considered ‘The Truth’ which has ceased to be popular.

    •1A. ‘That which is True’ is not simply what is believed. A fact ignored, not believed, or inconvenient; is and remains true.

    •1B. ‘The TRUTH’ is simply what is believed. A lie or deception believed is still a lie or deception… no matter how popular or profitable.

    •2A. ‘That which is True’ is not defined by what is intended. Good intentions can be blind to fact or influenced by agenda.

    •2B. ‘The TRUTH’ is often defined by what is intended. Good intentions are often catastrophically wrong.

    •3A. ‘That which is True’ is not what is comprehensive. Professional turners and twisters of words [a/k/a attorneys] often use massive diatribes, irrelevant information and statutes to numb the minds of men to prevent them from being cognizant of the essential facts pertinent to a decision… (e.g.”The lady doth protest too much, methinks” – Hamlet by William Shakespeare)

    •3B. ‘The TRUTH’ appears to be what is comprehensive. A lengthy, detailed presentation will often hide or diminish the import of essential facts; and thus confuse or misdirect; resulting in a conclusion harmful to the target man, person or class and beneficial to the comprehensive storyteller/crafter…

  32. David Belanger I am almost in the same boat you are last week they canceled my sale date not postponed it. after filing suit based on TILA rescission. I am in non judicial lets see what happens.

    MAY G-D ERASE THE NAME AND MEMORIES OF THE NEO NAZI JUDGES WHO MAKE COMMENTS “FREE HOUSE FOR THE BORROWER”

    LONG LIVE NEIL GARFIELD.

    NEVER AGAIN.

  33. Whats happening Shadowpussycat or is it still shadowdrypussycat?

    Damn woman take care of yourself.

  34. Bob G you are allegedly part of the Nazi Totalitarian Bankster Propaganda Machine

    NEVER AGAIN

  35. You are right DW.
    Lets Hope All are as Compassionate as You!
    God knows many will need Help!
    This is an event of epic proportions ….

  36. Well SC
    It will test our ability to get along then i guess, thats my big worry it will take bit of a paradigm shift.

  37. The cabal is being unseated, this will bring unpresidented changes in our lifestyles across All Nations.

    It is anticipated that All countries will default before years end or be put on QE life support again.

    Close to 40 in default already…THIS IS HUGE!

  38. Deb. .. Today the Happy Birthday gift is being born 200,000 in debt.

    Things are moving very fast……
    They can not stop the currency reset.
    Be Prepared.

    The Federal Reserve Banks are under receivership of the world global debt facility and liens filed. They are BK!

  39. Bob
    Get real
    We are very damaged, but still holding up, so two words -and its not happy birthday
    Or havnt you heard … The wheels of justice turn very very slowly, but if i remember re the race of the tortoise and the hare, the tortoise actually won.

  40. OK BOB,

    IF YOUR SO GREAT, THEN YOU DON’T NEED TO GET ANSWERS
    HERE. AND IF YOU ARE REALLY AS GOOD AS YOU SAY.

    THEN WHY HAVENT YOU STARTED A FULL OUT HOMEOWNERS CASE TO COVER THE US. AS THERE ARE 10’S A MILLIONS OF HOMEOWNERS GETTING THE SHAFF.

    THIS WOULD BE IN THE BILLIONS TO YOU. TO DEFEND. ?

    AND AM GLAD YOU HELP YOUR SELF TO THE FRUITS. BUT I DONT SEE ANY- ANY ATTORNEY SAYING LOOK AMERICANS AM HERE TO SAVE YOU.

  41. Ok boys. … Play Nice!!

    Welcome back Bob! I totally agree!!! Good Questions!

    DB. …with all that info….I am surprised at you.

  42. Mr. Belanger….just let us know how things work out for you…one way or another.

    It seems like you’re drinking way too much kool aid here. You parrot everything Neil says without question. And you know who NG is parroting? Me. That’s right, me. Some of the stuff that he’s recently been saying seems to have been lifted right out of some of my personal emails to his staff or other foreclosure defense attorneys, or things that i have posted on his blog.

    Here’s another thing, sonny…i am not a friend of the banks. i sue them and/or get them to settle with me, fast…. and i make a lot of money doing it. And i have been doing it for 23 years. How many litigation victories have you had in that period?

    So don’t come punking around here lecturing me, pal…just show us the money!

  43. BOB G, REALLY! I GUESS YOU DONT UNDERSTAND ANYTHING. OR A FRIEND OF THE BANKS TRYING TO SEE WHAT OUT THERE?

    FIRST OF ALL. THE HOMEOWNER ONCE LETTER IS DROP IN MAIL, THE MORTGAGE IS VOID./ ALONG WITH NOTE. VOID- WHY!
    BECAUSE OF THE LAW. OPERATION OF LAW. – (A)- PROVE AM LATE!-THEY WILL NOT GO TO COURT , ( B)- I NEVER RECEIVE ANY DISCLOSURES, SO AGAIN PROVE IT UP IN COURT! AGAIN THEY MUST GO INTO COURT TO PROVE THEY DID ALL REQUIRED DISCLOSURES.. THEY WILL NOT FILE IN THE 20 DAYS TO GET THE NOW VOIDED MORTGAGE AND NOTE NULLIFIED BY JUDGE .

    NOW WHY IS THIS. BECAUSE THEY DO NOT WANT TO BE THE PLAINTIFFS. WHY. BECAUSE THEY HAVE THE BURDEN OF PROOF, THEY MUST PROVE EVERYTHING FROM START. THEY CANT. THIS IS WHY THEY HAVE NEVER TRIED IN COURT.

    NOW . I AM GOING TO BRING TO COURT MY RESCISSION I DID, BACK IN MARCH .FOR A JUDGE TO GET THEM TO COMPLY WITH THE RESCISSION, THAT THEY SAID OK YOU WIN , JUST LEAVE US ALONE, AND THEY CANT AT THAT TIME BRING UP ANYTHING ON THE NOW VOIDED MORTGAGE/NOTE. THAT BY OPERATION OF LAW. IS VOIDED. SO TELL ME . WHAT THEY CAN BRING UP????, AS THEY DIDNT SEND ANYTHING BUT A EMAIL THAT THEY HAVE ACCEPTED WHAT I SENT TO THEM AS REAL, AND THE EMAIL I GOT BACK, IS EVIDENT S, OF ALL THE FRAUD.
    AND EMAILS CAN BE USE TO PROVE IT CAME FROM THERE ATTORNEYS OFFICE.

    NOW IT BEEN 6 MONTHS, AND STILL NOT HURD ANYTHING NOT ONE WORD,LETTER,PHONE CALL. WHY?????????

    NOW THING ABOUT SOMETHING FOR A MINUTE. REALLY NOT TRYING TO BE FUNNY. JUST REAL.

    I HAVE NOT PAYED A PENNY IN 6YRS, NOT ONE CENT. ON A MORTGAGE PAYMENT OF 2700 A MONTH.

    BUT AS OF TODAY ON BLOOMBERG, MY MORTGAGE IS UP TO DATE. ALL PAYMENTS MADE. HUM , SO THIS IS HOW I SEE A FEW THINGS.

    WHEN THEY SAY YOU ARE NOT A PARTY TO THE PSA. GREAT, IF AM NOT PART OF THE PSA CONTRACT , THEN WHY IS A TRUSTEE/SERVICER TRYING TO FORCLOSE ON ME FOR A TRUST THAT WAS STARTED BY THIS PSA, AND YOU SAY MY MORTGAGE IS PART OF THIS PSA. REALLY.

    THEN IF AM NOT PART OF THE PSA- THEN THATS GREAT NEWS,. BECAUSE THE PSA STATE’S THAT NO MATTER IF THE HOMEOWNERS PAY HIS HER MORTGAGE THAT THE SERVICER OR TRUSTEE MUST PAY. NO MATTER WHAT.

    AGAIN THIS IS WHY- NO ONE IS IN DEFAULT. NO ONE. THE TRUST AND SERVICER MUST CONTINUE TO PAY EVEN IF THE HOMEOWNER NEVER PAYS A PENNY MORE.

    I HAVE BEEN INVESTIGATING THIS MATTER FOR 6YRS. AND CANT WAIT TO GO TO COURT, MAYBE GOING TO JAIL WHEN I TELL JUDGE THIS IS AMERICA YOUR HONOR AND YOU MUST FOLLOW THE LAW. NO MATTER HOW MUCH YOU WILL BE HURTING YOUR FRIENDS AT THE BANKS. SORRY. BUT THE LAW IS THE LAW.

    So you send in a rescission letter, and you get a form letter back saying (a) you’re too late, and (b) we gave you all the disclosures that the law required us to give you at the closing table.
    Ok, folks, what is supposed to happen next? has anyone tried it? and what was the result.? Was a motion made to the court to dismiss with prejudice? What was the bank’s response? What was the court’s response?
    These are the questions that need to be asked and answered, not continuous and never ending victimization screeds.

  44. Few of these comments have anything to do with the article NG posted. What I would like to know is who is winning using the NG rescission model? So you send in a rescission letter, and you get a form letter back saying (a) you’re too late, and (b) we gave you all the disclosures that the law required us to give you at the closing table.

    Ok, folks, what is supposed to happen next? has anyone tried it? and what was the result.? Was a motion made to the court to dismiss with prejudice? What was the bank’s response? What was the court’s response?

    These are the questions that need to be asked and answered, not continuous and never ending victimization screeds.

  45. And the women I overheard … Was real ugly

  46. And it is organized, I overheard a tel conversation of a realtor and they were recruited by the likes of LPS to move people out and new ones in and they get their cut, AKA bottom feeders profiteering from the worst economic situation ever. I believe such people are good at self denial you know like ” someone will profit so it may as well be me” mentality.

  47. D.C have faith ok those who can never have enough,will never have enough. ( bastards)

  48. A close friend who was forced to sell a one of a kind home because B of A wouldn’t work with her on a Americas wholesale lender,aka countrywide garbage pick a pay loan that they paid 450k in interest only,had a very ugly sale and what went down leads me to believe that the same shams are happening to us on the selling end and the realtors,escrow,and title all are a part of this.Her broker who also lives across the street and was privy to the loan being delinquent agrees to list at a certain price,then list it below what they agreed on and 2 days later has an all cash offer from a women who has her name attached to 50 or more LLCs throughout the country.The offer being 5k over the low asking price,oh the so called buyer also gets farm subsidies on a farm that doesn’t exist,as well do 25 of her relatives all in this area.Sounds strange but I believe these are not relatives but realtors using fictitious names and here in Cali the department of real estate urges their licensees to have multiple fake names,no joke,so the realtor also puts this seller who this is the first home she has sold into a ten day escrow and leaves town for 5 of the ten.I begged her to cancel the sale and start over and she couldn’t do was scared that they would take her to court,midway through the ten day escrow I told her to ask for copies of the wire transfer to pay off the so called B of A/countrywide mess as I don’t believe they did or do or that its even legit,and the escrow company stops taking her call.Refuses to take the clients calls and tells her if she wants accounting she has to come with a subpoena,I at this point am freaking out ,these people were going to get this house regardless,Chicago title,B of A,Recon Trust and Sothebys.We filed so many complaints and not one response,and the house has sat empty for over a year and they charged my friend 3500 to stay an extra 10 days,and it sits empty,I also connected the two realtors and the manager of the Sothebys branch and the escrow owners husband,with the buyer via land records so this is def a cartel of sorts.Blows my mind.

  49. Sorry – that link from ” stop foreclosure fraud”
    I WISH

  50. Dwight
    nothing has changed since the S&L scandal
    It’s just 100 times worse, fraud control, all the characteristics remain for what Bill Black talks about in had book- the criminogenic environment, example Eric Holder as the proof, did what he had to do under the ” moral compass” he was under, and if you open that link I posted today curtesy of foreclosure fraud, then there we have it. Sickening and will end in disaster and they know it.

  51. Fidel it y and Suret y
    36 n For The Defense n March 2009
    n Daniel E. Tranen and Stefan R. Dandelles are partners in the Chicago office of Wilson Elser Moskowitz
    Edelman & Dicker LLP. Mr. Tranen’s practice areas include insurance coverage, professional liability, and
    life, health, and ERISA litigation, as well as fidelity bond matters. Mr. Dandelles’s practice areas include
    directors’ and officers’ liability, financial institutions, commercial crime, and fidelity bonds. Both authors are
    members of DRI and its Fidelity and Surety Committee

    .
    Are Financial Institution
    Bonds Susceptible? Warehouse Lending
    Losses Due to Forged
    Promissory Notes

  52. dc … The national settlements and consent orders did nothing to stop the criminal enterprise from continuing. This administration and Eric holder stopped the states AG’s from filing criminal charges, instead they bribed the states and paid them for their silence.

    The system is too corrupt ..the judges perpetuate and facilitate the criminal scheme in our courtrooms.

    The lawyers are too spineless to stand up to the corruption. Other lawyers are too ignorant to understand the scheme and criminal element …they are useless for the most part.

    Pro se victims have accomplished more than most lawfirms, but not enough to turn the tide.

    The corrupt judicial system Will not even acknowledge blatant fraud and fabrications of documents. They argue that a MERS Assignment of Mortgage is none of our business because we are not party to it and have no standing to contest it …so fraud is now allowed thru the court room doors because the fraud was created between two entities who conspire to steal your property , but it’s allowed because the courts say that particular fraud is between two other parties … This is how stupid it has gotten.

    I had a Max Gardner foreclosure defense boot camp graduate look at me with a dumb look on his face and ask “what do you expect me to do about it?” .. “You’re not going to get a free house” … “A modification might be possible” … “Short sale ..Deed in lieu of Foreclosure?” .. This guy was advertising as foreclosure defense .. But very few lawyers are competent in this arena ..very few have the balls to fight this fight ..most are ass-kissing the judge in the chambers and stroking the judges ego behind closed doors ..the judges hate the homeowners and they take their lead from our federal government.

    Just keep fighting …hopefully the higher courts put an end to this travesty.

  53. I walked out of the closing with the original loan docs,note and deed and they didn’t care,I believe that since every loan I did was with the same broker prob 15 loans she had all the data that was needed and then some to do any number of things to me that they wanted.Not only fabricate docs but god only knows,service link is run by satan.

  54. Nov 2005,broker originated,6% interest only,fixed for ten,been trying to get out for 8,Wells Fargo says no,try a mod,haha,have a lot of equity and don’t want to sell been here for 22 years.Had past loans with WF paid on time and in full when I sent QWR they claimed to have paid 134k to Chase to pay off my 2nd,I had paid it off 2 months prior and have the cancelled checks and statement showing a zero balance,escrow knew,title knew,yet the certified copies say they paid but they have no proof,my proof doesn’t matter past the statute.The Investor in their BK docs disputes WF claims and lists as Non priority,Unsecured Creditor.WF lawyers fabricate whatever docs are needed to make it appear real.I went into this at first to see just how far these folks would take it and I found out that everything that had been said for years was true,from the mod issues 15 points of contact to outright lies to the CFPB about how I was unavailable,to fabricating,forging and you name it.It is almost impossible to find a lawyer in California to take your case and actually do something besides take your money.

  55. When I think of the day of closing where I signed numerous documents for a ” mortgage loan” I can’t help thinking of the classic folklaw story ” the pied piper of Hamlin” where the piper plays his pipe and it induces all the children to follow him and the only 3 that did not were blind, lame and deaf. The reason the piper did that was because after he caught all the rats he did not get paid the king reneged on the agreement.There’s more parallels to that story and of course there are many versions.

  56. So, in other words, a legal document is missing. No assignment recorded to move the money/loan to the actual originator/mortgage broker. Violation of contract law. Every entity in the transaction has to be properly represented in the documentation, i.e., the mortgage and the note.

  57. TAble Fund – “Table-funding” means a settlement at which a mortgage loan is funded by a contemporaneous advance of loan funds and an assignment of the loan to the person advancing the funds. The mortgage broker originates the loan and closes the loan in its own name but the funds are provided at the settlement by a lender to whom the closed loan is assigned.

    The mortgage broker does not own the loan at the end of the settlement. See also WAC 208-660-006.

    (7) Secondary market transactions. A bona fide transfer of a loan obligation in the secondary market is not covered by RESPA and this part, except as set forth in section 6 of RESPA (12 U.S.C. 2605) and § 3500.21. In determining what constitutes a bona fide transfer, HUD will consider the real source of funding and the real interest of the funding lender. Mortgage broker transactions that are table-funded are not secondary market transactions. Neither the creation of a dealer loan or dealer consumer credit contract, nor the first assignment of such loan or contract to a lender, is a secondary market transaction (see § 3500.2.)
    [61 FR 13233, Mar. 26, 1996, as amended at 61 FR 58475, Nov. 15, 1996]

    Table funding means a settlement at which a loan is funded by a contemporaneous advance of loan funds and an assignment of the loan to the person advancing the funds. A table-funded transaction is not a secondary market transaction (see § 3500.5(b)(7)).

  58. The irrevocable mess… Of a Living Estate.

    Many Blessings to All.

  59. The land trust is in the instrument that created the estate.

  60. The lien is not attached to the land.

  61. DB. .. You Rock!!!
    Amazing how these contracts can come back and knock down an uncooperative brick wall.

  62. Reblogged this on California Freelance Paralegal and commented:
    Another good blog post by Neil Garfield on the power of rescission under the Truth in Lending Act.

  63. he actual wording of the clause
    It’s paragraph 17 of the standard “Single Family FNMA/FHLMC UNIFORM INSTRUMENT Form 3005 9/90 Amended 8/91” which is used almost universally on one- to four-family mortgages in the U.S. Paragraph 17 reads as follows:

    17. Transfer of the Property or a Beneficial Interest in Borrower. If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender’s prior written consent, Lender may, at its option, require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the date of this Security Instrument.

    If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

    The original post-Garn FNMA/FHLMC due-on-sale clause said:
    “If all or any part of the Property or an interest therein is sold or transferred by Borrower without Lender’s prior written consent, excluding (a) the creation of a lien or encumbrance subordinate to this Mortgage, (b) the creation of a purchase money security interest for household appliances, (c) a transfer by devise, descent or by operation of law upon the death of a joint tenant or (d) the grant of any leasehold interest of three years or less not containing an option to purchase, Lender may at Lender’s option declare all the sums secured by this Mortgage to be immediately due and payable.”
    The current clause lets the underlying federal statute and regulation deal with the details which previously were spelled out in the mortgage clause. I suspect the lenders decided it was better to claim the broadest possible right to accelerate the loan and to force people who wanted to learn of the limitations on enforcement to look up the law.

    Not just ‘sales’
    To understand the clause, you have to break it down into small parts. When you do, you immediately find that “due-on-sale” is a misnomer. A better name would be “due-on-transfer-of-any-interest clause.” The list of actions covered by the actual clause is far broader than just “sales.” The federal regulation (12 C.F.R. 591.2) says the due-on-sale clause is triggered by:

    “…transfers of real property subject to a real property loan by assumptions, installment land sales contracts, wraparound loans, contracts for deed, transfers subject to the mortgage or similar lien, and other like transfers.”
    A great many exceedingly ignorant investors think that all you have to do to get around a due-on-“sale” clause is a transaction that is not a “sale” per se. As the regulation shows, that is not true.

    Land contracts
    Note that the first sentence covers transfers of “an interest.” That, and the regulation, make the clause cover not only sales, but land contracts. Many investors erroneously think that because the deed does not change hands in a land-contract sale, it is not a “sale” that triggers Paragraph 17 of the FNMA/FHLMC mortgage.

  64. 12 U.S. Code § 1701j–3 – Preemption of due-on-sale prohibitions

    Current through Pub. L. 114-38. (See Public Laws for the current Congress.)

    US Code
    Notes
    Authorities (CFR)
    prev | next
    (a) Definitions
    For the purpose of this section—
    (1) the term “due-on-sale clause” means a contract provision which authorizes a lender, at its option, to declare due and payable sums secured by the lender’s security instrument if all or any part of the property, or an interest therein, securing the real property loan is sold or transferred without the lender’s prior written consent;
    (2) the term “lender” means a person or government agency making a real property loan or any assignee or transferee, in whole or in part, of such a person or agency;
    (3) the term “real property loan” means a loan, mortgage, advance, or credit sale secured by a lien on real property, the stock allocated to a dwelling unit in a cooperative housing corporation, or a residential manufactured home, whether real or personal property; and
    (4) the term “residential manufactured home” means a manufactured home as defined in section 5402 (6) of title 42 which is used as a residence; and
    (5) the term “State” means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, American Samoa, and the Trust Territory of the Pacific Islands.
    (b) Loan contract and terms governing execution or enforcement of due-on-sale options and rights and remedies of lenders and borrowers; assumptions of loan rates
    (1) Notwithstanding any provision of the constitution or laws (including the judicial decisions) of any State to the contrary, a lender may, subject to subsection (c) of this section, enter into or enforce a contract containing a due-on-sale clause with respect to a real property loan.
    (2) Except as otherwise provided in subsection (d) of this section, the exercise by the lender of its option pursuant to such a clause shall be exclusively governed by the terms of the loan contract, and all rights and remedies of the lender and the borrower shall be fixed and governed by the contract.
    (3) In the exercise of its option under a due-on-sale clause, a lender is encouraged to permit an assumption of a real property loan at the existing contract rate or at a rate which is at or below the average between the contract and market rates, and nothing in this section shall be interpreted to prohibit any such assumption.
    (c) State prohibitions applicable for prescribed period; subsection (b) provisions applicable upon expiration of such period; loans subject to State and Federal regulation or subsection (b) provisions when authorized by State laws or Federal regulations
    (1) In the case of a contract involving a real property loan which was made or assumed, including a transfer of the liened property subject to the real property loan, during the period beginning on the date a State adopted a constitutional provision or statute prohibiting the exercise of due-on-sale clauses, or the date on which the highest court of such State has rendered a decision (or if the highest court has not so decided, the date on which the next highest appellate court has rendered a decision resulting in a final judgment if such decision applies State-wide) prohibiting such exercise, and ending on October 15, 1982, the provisions of subsection (b) of this section shall apply only in the case of a transfer which occurs on or after the expiration of 3 years after October 15, 1982, except that—
    (A) a State, by a State law enacted by the State legislature prior to the close of such 3-year period, with respect to real property loans originated in the State by lenders other than national banks, Federal savings and loan associations, Federal savings banks, and Federal credit unions, may otherwise regulate such contracts, in which case subsection (b) of this section shall apply only if such State law so provides; and
    (B) the Comptroller of the Currency with respect to real property loans originated by national banks or the National Credit Union Administration Board with respect to real property loans originated by Federal credit unions may, by regulation prescribed prior to the close of such period, otherwise regulate such contracts, in which case subsection (b) of this section shall apply only if such regulation so provides.
    (2)
    (A) For any contract to which subsection (b) of this section does not apply pursuant to this subsection, a lender may require any successor or transferee of the borrower to meet customary credit standards applied to loans secured by similar property, and the lender may declare the loan due and payable pursuant to the terms of the contract upon transfer to any successor or transferee of the borrower who fails to meet such customary credit standards.
    (B) A lender may not exercise its option pursuant to a due-on-sale clause in the case of a transfer of a real property loan which is subject to this subsection where the transfer occurred prior to October 15, 1982.
    (C) This subsection does not apply to a loan which was originated by a Federal savings and loan association or Federal savings bank.
    (d) Exemption of specified transfers or dispositions
    With respect to a real property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon—
    (1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;
    (2) the creation of a purchase money security interest for household appliances;
    (3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;
    (4) the granting of a leasehold interest of three years or less not containing an option to purchase;
    (5) a transfer to a relative resulting from the death of a borrower;
    (6) a transfer where the spouse or children of the borrower become an owner of the property;
    (7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;
    (8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or
    (9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board.
    (e) Rules, regulations, and interpretations; future income bearing loans subject to due-on-sale options
    (1) The Federal Home Loan Bank Board, in consultation with the Comptroller of the Currency and the National Credit Union Administration Board, is authorized to issue rules and regulations and to publish interpretations governing the implementation of this section.
    (2) Notwithstanding the provisions of subsection (d) of this section, the rules and regulations prescribed under this section may permit a lender to exercise its option pursuant to a due-on-sale clause with respect to a real property loan and any related agreement pursuant to which a borrower obtains the right to receive future income.
    (f) Effective date for enforcement of Corporation-owned loans with due-on-sale options
    The Federal Home Loan Mortgage Corporation (hereinafter referred to as the “Corporation”) shall not, prior to July 1, 1983, implement the change in its policy announced on July 2, 1982, with respect to enforcement of due-on-sale clauses in real property loans which are owned in whole or in part by the Corporation.
    (g) Balloon payments
    Federal Home Loan Bank Board regulations restricting the use of a balloon payment shall not apply to a loan, mortgage, advance, or credit sale to which this section applies.

  65. Louise
    The loss mitigation dept of the “servicer,” yes it’s a joke.
    It’s an attempt at the Old ” plausible deniability” by creating layer upon layer of opacity to confuse the borrower.
    Like I said if you get it at round one, you know what you are in for – the bloody long haul. Life – a wonderful adventure,!

  66. Fabulous. That is even worse than sending the rescission letter to the “servicer” The Loss Mitigation department is a total disaster. Part of the reason for that is they tell their staff only enough to just get by. As I said, one hand does not know what the other is doing.

  67. Again… hat tip to Jesinoski lawyers- they did not give up.

  68. DC,
    after 6 years in court it seems it’s the old adage of the emperor and the new clothes lie and that if you tell it often enough people will believe it so they say no no no you say yes yes yes the court has to come around eventually they just want you to surrender
    Never surrender.( Winston Churchill)

  69. I had a good teacher

  70. Louise
    The services sends the requests to the wait for it drum roll…….
    ” loss mitigation dept”
    That is ” round one”
    I sAved on file EVEYTHING and it will come back to haunt them.

  71. Hey, using the kitchen sink version of law send in the rescission notice any way and send it to the servicer, because they do not know what they are doing and one hand does not know what the other is doing. They have to file a lawsuit, and they do not want to do that. They have to prove standing, and they can’t do that either. They stole the money right after origination, and you are paying mortgage payments to thieves who do not have the right to accept payment. I would love to see the books as to who bought which securities again and again. The notes keep multiplying like the buckets of water and brooms in the “Sorcerer’s Apprentice”.

  72. So all that said and lets say you tons of evidence and docs that show outright fraud,and you sent a rescission letter years ago but your still facing the very real chance that they are going to take your home.Can anybody lend some insight to this issue that is fast approaching for me,and I am on lawyer number 5,50k down the tubes thus far,and have done many loans,bought and sold many homes and am versed in what a real loan should look like and how it should take place but still am dealing with this.

  73. That’s what started the ball rolling Deb. …….the numbers.

    Go back to Neil’s last post and Read David posts on Aug 22.
    That should help explain it Deb. ….
    The missing deeds.

  74. Where do such numbers come from

  75. Same here
    I have 3 different numbers of debt I purportedly owe a certain party
    They can’t get their math right either.

  76. Care to elaborate SC re due on sale regarding the borrower right and how it can be used.

  77. Is it possible. With them holding the title to our life estate…..that they might have helped themself…..?

    Transferred and conveyed irrevocably…..Free of liens and encumbrances.

    KC asks…. What do KC owe?
    They lucky … KC not asking what they owe KC…other than legal fees.

    Lots of good that would do anyway….
    I see it coming already. ..

    Want of Knowledge Affidavit.
    They dint know what KC owe….

    Should KC ask….oh never mind.

  78. Its been established by well written law.
    A transfer of deed…of any type triggers the Due on Sale Clause.

  79. Now the stick analogy is true isn’t it.

  80. …Upon which we all relied.

  81. Gambling with our assets based on hyper inflated values of collateral

  82. Unjust Enrichment….
    Gambling with our assets on WS. …..?

    No Trusts!
    There are/were/whatever. … two Trusts in PPMs.

  83. Java
    Perhaps you might have asked that judge to ask for fully proven disclosures of who the party in court is actually legally and under authorized capacity is representing – would be a great start, standing to enforce, establishing the alleged or presumed facts upon why they can a persons home. The issue of balance of exposure to harm is obvious.
    In non judicial foreclosure states here we are handicapped, but the power of sale in the contract deed of trust must be adhered strictly by its terms.

  84. The lien is not attached to the land.
    The trust can be found in the instrument that creates the estate.

  85. That last line ……. POWERFUL!

  86. How is a hard money deposit. And years of monthly payments considered getting a free house ???
    I asked the judge this. And he said what would you like me to do !!!

  87. “Free House” is not a myth it is Totalitarian Propaganda. Equivilant to the propaganda used by the Nazi’s, Stalin etc……. And now allegedly used by the Judicial System of the United States of America.

    The only ones trying to get a free house are the banksters dark foces of evil.

    NEVER AGAIN.

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