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COMMENT: I contacted one attorney on your list and had a consult with another firm which is not part of your list but has been referenced quite a few times in the blogs. I have a problem with both and find them a bit predatory (sorry guys and gals) and quite frankly, am reticent to contact any others.
One charges $350 a month and the goal is to get the mortgage nullified due to discovery of fraud. If they succeed in this, they get a 40% interest in the property (new appraised value) in the form of a mortgage. Ok, that’s win-win I guess. They then go for legal fees and get a share of any fees recovered over and above their actual legal fees if successful in a counter suit against the lender.
If they instead get a workout/modification, they then get a 40% interest in YOUR savings in the form of a new mortgage with them. So now the homeowner has a modified mortgage with lender and a second mortgage with attorney, basically putting homeowner upside down, again. (Editor’s note: not necessarily — and remember whether you accept the settlement is strictly your decision and not the attorney’s decision).
Second attorney was similar but upfront fee for audit/retainer. If no fraud found, then only small portion of retainer is reatined to cover the audit. If they go forward with trying to defend/get a work out, etc./they charge by the hour AND get 33% of any savings. I assume same as attorney #1, in the form of a mortgage.
You all really see this as ethical?
ANSWER: YES AND NO. YES IT IS PERFECTLY APPROPRIATE FOR AN ATTORNEY TO GET PAID A FAIR FEE FOR HIS PROFESSIONAL SERVICES. YOU HAVE A CHOICE OF PAYING HOURLY, WHICH NORMALLY RANGES BETWEEN $250-$400 PER HOUR. That is what people pay when they see a lawyer. In some cases, like personal injury (auto accidents etc.), lawyers have worked out a method of allowing clients to have access to their services even if they don’t have money. The lawyer takes what is called a contingency fee. That fee, which is fairly standard throughout most of the states is 1/3 of the recovery of the value awarded or settled to the client if the matter does not go to court, 40% if the matter goes into litigation, and 45% if the matter goes to appeal. Sometimes the attorney will even advance the filing fees, discovery costs and expert witness fees in a case on behalf of the client. For these foreclosure cases, or mortgage disputes, the hours spent can be very intensive and time is money. Prospective clients often forget that it is their case and their life and that the lawyer has nothing to do with it unless he chooses to accept the retainer arrangement. On the other hand, it is improper under most rules to take an interest in the property that is the subject of the dispute, particularly a home residence. But the fees still apply. So if the only way you can afford to pay the lawyer is to get a mortgage or give the lawyer a secured interest in your home AFTER the case is settled, then in most cases the fee would be considered fair and the arrangement within the bounds of legal ethics. If the lawyer is taking a sum of money that goes far beyond the costs of the case and is basically charging you hourly PLUS the full contingency fee, then you are right — that is predatory. The situations you described do not seem predatory although your description sounds that way. You have a choice of paying an hourly fee plus the costs of the case and the lawyer will be perfectly happy to take your case. You don’t want to or can’t pay that fee so you want the attorney to take a risk as to whether he/she will get paid at all. You object to the amount of the contingency fee because you feel you have already been the victim of predatory behavior. You would like them to work for you for less than they charge other clients and they are not willing to do that. Why should they?
QUESTION: Need urgent answer…I have a HELOC loan in default. The Lender (Irwin) was awarded summary judgment a year ago (before I realized) what was going on) and is now hauling me into court to collect. I’m planning on filing a 60(b)(5) motion pro se to contest their fraudulent claim to the court that they had legal standing since I was pretty sure the loan was sold. However in reseaching their SEC filings, I noticed that starting in 2002, the no longer “sold” loans from an accounting standpoint, but instead now pledged them as collateral to borrow against them. Does that change anything regarding my contention that they are no longer the injured party? It seems to me that the person(s) to whom the collateral was pledged would still have a claim against me even if I paid them, right? Additionally, the lender has probably already been paid through a credit default swap, right?
ANSWER: IT IS DIFFICULT FOR ME TO GIVE YOU A DEFINITIVE ANSWER. There are many such arrangements where it is only paper — the “loan” is a disguised table funded loan and the “lender” to the “lender” is not expecting or pursuing any payback. The issue of assignment remains however. Just because there were financial arrangements doesn’t mean that the note wasn’t assigned or that they had the note at the time of the foreclosure or if they did have the note that they had any interest in it.
If the loan was securitized, then the “arrangement” is mere obfuscation of the fact that the holder in due course is somewhere upline and could assert a claim against you in the future. I have no way of knowing how this will play out. I would, after consultation with appropriate counsel, pursue the claim as though the facts are as we suppose them to be and produce the SEC filings to show that the note was assigned at par value all the way up the securitization chain. And now, due to this fraud on the court, you are stuck in the position of being foreclosed with an outstanding claim from an undisclosed third party.
And you are correct that the holder may in fact have been paid in full from an insurance product from AIG, AMBAC or a credit default swap. Further, your loan may have been paid a s a result of overcollateralization or cross collateralization with other loans. And the payments you made might have been applied to other loans in the same way.
You are entitled to a full and complete accounting of all funds from before your loan application through the present day, received or paid, who from and why, and a complete chain of title over the note, the mortgage and the assignments. You will probably find, as per the Texas lawsuit on the blog that the distribution reports do not coincident with the actual receipts. Payments might well have been made out of a reserve created from the sale of the mortgage backed security.
You must emphasize that they are hiding most of the transaction from the court. The entire transaction consisted of some investor putting up the money and a lot of fees, profits, rebates and kickbacks being paid downstream to get the people motivated enough to lie and cheat their way into getting your signature on the loan documents. Besides being a violation of TILA which is not subject to the claim of res judicata (already been litigated) the documents clearly show that co-obligors were added to the stream of revenue from your “loan” and that they might have paid money on your loan or been bailed out by the Federal government on the loan.So your argument that they are double or triple dipping is still a viable argument.
QUESTION: I’ve always understood (hopefully incorrectly) that TILA rescission ONLY worked for NON-PURCHASE money mortgages (e.g. equity, maybe refinances, etc.). If someone can authoritatively guide me on this TILA matter, I’d greatly appreciate guidance or mentoring.
ANSWER: Your question is more complicated than it sounds. The remedies under TILA are explicitly unavailable for purchase money first mortgages, as I read it. But the duties of disclosure are there for all loans. And the participants in the securitization scheme did not make material disclosures about who the real lender was, what fees were being paid and how your signature was being used to create what appeared to be a purchase money first mortgage but in fact was the initial negotiable instrument that was broken up into shares and sold in investors. When combined with a HELOC it is generally considered to be a consumer transaction falling outside the purchase money first mortgage exemption. Refi’s and other financial products also lead to conversion from the category of purchase money first mortgage. So when you are expressing the duties of disclosure in the transaction under Regulation Z you go straight to TILA. When you are seeking remedies you might still claim TILA remedies because the transaction was disguised.
QUESTION: I am doing a loan modification and my trustee sale was postponed till oct. 17, 2208 agreed by countrywide, BUT we received a notice to vacate, upon checking with countrywide they confirmed that it was on a trustee sale sept. 18, any suggestion what to do? The loan modification company said they received an email from countrywide for the Oct. 17, 2008
> trustee sale extension. Any suggestion on what step needed to be done?
ANSWER: FIRST THING IS GO TO A JUDGE AND SHOW HIM THE CONFLICT WITH A PLEADING THAT SAYS THE SALE SHOULD BE POSTPONED.
Second thing either by formal interrogatories you want to know if they have the authority to do a loan modification because if they don’t own the note, they can’t modify it. And if they are not the assigned ON RECORD of the mortgage they can’t modify that either.
I have an interesting problem with a foreclosure action that was just brought to my attention. The borrower went into default in August of 2007. The “lender” on the note and mortgage was Countrywide Home Loans, Inc. The mortgage had the usual MERS language. Countrywide was kept on as servicer. The borrower went into default in August 2007. On January, 30, 2008, “Carrie A Hoover-1st vice president” signed an assignment on behalf of MERS, assigning the mortgage and note to Bof NY trustee for CWALT 2005-41. (Carrie Hoover is actually a VP for Countrywide) This was prepared by the Attorney in Miami and executed in Texas.
Bof NY filed a foreclosure action a few weeks later. It claimed they owned and held the note and there was no claim for lost note. The borrower hired local counsel who filed an answer and affirmative defenses. He admitted that the Borrower executed the note and not much else.
The affirmative defenses are notice related as well as one alleging the note is “unintelligible, unconscionable and unenforceable”
My usual first line of attack revolves around standing. (they are not the holder or have not established their right to pursue the action) This is done by way of a Motion to dismiss.
My question is because this was not raised initially is it now waived? (I have been retained by the client)
Also what types of claims have you seen used against the alleged “assignment” when it would appear that the signatory does not have apparent authority?
Your wisdom and guidance is always appreciated
1. The borrower went into default in August of 2007: You don’t actually know that. I’m sure he stopped paying, but in the scheme of securitization, the payment might have been made by any number of co-obligors that attached to the transaction on the way up the securitization chain. For example, AIG, AMBAC are insurers, credit default swaps might have protected the payment as well, and there was a reserve in the SPV to make the payments even if the borrower didn’t. In addition, depending upon which tranche in the SPV the loan was “assigned” to, the lower tranches might have made the necessary payments. Also the notice of default might have come from a party without any authority to do so and without any knowledge as to whether the holder in due course had been paid despite the lack of payment from the “borrower.” Lastly, how can there be a default on a note that was paid in full? The mortgage aggregator paid 102.5% of the note principal to the “lender” under a Pooling and service agreement” or under the Assignment and Assumption Agreement” that usually predates the date of the loan closing and certainly predates the date of “default.Find out who the mortgage aggregator was.
2. The “lender” on the note and mortgage was Countrywide Home Loans, Inc.: You are quite right to put that in quotes. If you look at http://www.sec.gov and examine the 10k and 8k reports you will find that pools of assets (notes either signed by borrowers were set up with trustees (who may be the successors to any other Trustee or “lender.”). Countrywide was paid off by the mortgage aggregator (which could actually be FNMA or Freddie Mac).
3. The mortgage had the usual MERS language: Actually the language varies. Some states allow MERS to act on behalf of mortgagee or even successors. Florida seems to be split between decisions in the 4th DCA and 2 DCA. I would attack that in all cases because the Fla S. Ct will in my opinion go with NOT letting MERS do what it is set up for. The main focus of the attack is that the parties are trying to make it more difficult for the Borrower to rescind (they didn’t disclose the REAL lender), more difficult to assert valid affirmative defenses and counterclaims and attempts to put the burden on the borrower to bring in the necessary and indispensable parties, when it is MERS or CW that has the access to that information and not the borrower. In a Judicial state like Florida that would be a particularly powerful argument (I think).
4. On January, 30, 2008, “Carrie A Hoover-1st vice president” signed an assignment on behalf of MERS, assigning the mortgage and note to Bof NY trustee for CWALT 2005-41. (Carrie Hoover is actually a VP for Countrywide) This was prepared by the Attorney in Miami and executed in Texas. This sounds like one of Shack’s cases in Kings County, New York. See http://www.livinglies.wordpress.com. Motion to Strike based on fraud on the Court.
5. Bof NY filed a foreclosure action a few weeks later. This is a lot like a case in GA. BONY settled with wiping out the mortgage and note and giving her a reverse mortgage. Not a great settlement but she was happy.
6. It claimed they owned and held the note and there was no claim for lost note. Motion to dismiss. How did they get the note? Request to Produce the Note. Holding the note creates a presummption that they are holder in due course, but they are probably not the a holder in due course, so you need to rebut the preumption. Demand assignments and information concerning who assigned and what their authority was. Look at note carefully. It might have been signed with “squiggle” — i.e., it could be a forgery even though there is an actual note signed by borrower. They did that for “convenience.”
7. The borrower hired local counsel who filed an answer and affirmative defenses. He admitted that the Borrower executed the note and not much else. Motion to amend affirmative defenses based upon new facts elicited from filings by parties with SEC. Too late to file Motion to DIsmiss and too much work to fight over it. Just file the same grounds under the Affirmative Defenses and then file affidavit from borrower along with copies of SEC documentation as attachments for Motion for Partial Summary Judgment.
8. The affirmative defenses are notice related as well as one alleging the note is “unintelligible, unconscionable and unenforceable” – Keep the notice arguments and expand upon them. Borrower was not given notice at closing as to who the real lender was and was therefor deprived of his right to rescission because the “lender” was merely a conduit and protective layer for the real lender who was not registered or chartered to do business in the State of Florida as lender or bank. You STILL want to exercise the right of rescission (the three day rescission) as soon as they will tell you who the real lender was. By covering up the real nature of the transaction, they deprived the borrower of sufficient knowledge about the transaction to properly consider whether to go through it and now he wants to rescind — which should be stated in the affirmative defenses. Your position is that the time for three day rescission never began to run because of all the non-dislcosures of all the parties that were not revealed and all the fees that were paid to all the parties that were not revealed. Stay away from unconscionability as this is like the insanity defense. It exiss but rarely granted. If you want to keep it then go with the inflated appraisal, and the the payment of the lender and that the equities here do not allow the “lender” to get paid and get the house too. BONY will say they didn’t get paid and they probably didn’t. But they didn’t loan the money either so they are not a holder in due course. The real holder in due course are the investors who now hold the certificates of mortgage backed securities to whom the mortgage and note were pledged in tinny shares along with shares in hundrds of other mortgages and notes.
9. My question is because this was not raised initially is it now waived? (I have been retained by the client) – Being new counsel the court will usually allow some lee-way to create your own pleadings. Waiver of affirmative defenses can only be plead after judgment. Any time up to that you can amend your pleadings liberally in Florida and most states. You can even amend your pleadings at trial to conform to the evidence. If there is any prejudice the trial is continued so that the other side can conduct discovery. Of couse, no guarantees here on this or anything else. Judge could say no to everything.
10. Also what types of claims have you seen used against the alleged “assignment” when it would appear that the signatory does not have apparent authority? —This is basic law. Competency of witness: Oath, Perception, Memory and Communication. If the party signing a document has no knowledge about the “facts” asserted then they are incompetent to sign the affidavit and incompetent to testify.
QUESTION: If I do a rescission letter to the lender who refinanced my house and gave me 100K, will I have to give them back the 100K even though they must have already been paid by the assignee?
Also, seems like since they no longer own the note, how can I force them to reconvey the Deed of Trust I signed?
Should I wait to send a rescission letter until after I complete my audit or just go ahead and do it now before my audit?
ANSWER: Perfect questions.
1. Rescission is an orderly progression or a process and not a single event. So when you rescind, you are converting the secured debt into an unsecured debt.
2. If the rescission is effective either by court order or the “lender” accepts it (which never happens) THEN the time comes to negotiate tender of the money.
3. If the loan was sold to someone else, then there are two potential issues: (1) was the rescission sent to the correct party? and (2) you obviously are not going to pay someone who has already been paid so they need to disclose to you who the real owner is — something they cannot do which we have already discussed.
4. Timing of sending rescission letter. I would do it now although there are arguments to the contrary. Basically what you want to do is assert your right to the three day rescission, on the basis that they did not disclose the real parties in interest, nor did they disclose the fees that were paid to undisclosed parties, nor did they tell you that your signature was going to be used as the basis for issuance of an unregulated security and sold all over the world.
5. Remedy: You can file a mandatory injunction to force them to reconvey the Deed of Trust or you can just file a quiet title action. I like the quiet title because it is your position that they don’t have the authority to do anything, since the documents were conveyed before, during or after closing.
6. See if you can find out if the Pooling and Service Agreeemnt and/or the Assignment and Assumption Agreement actually predate the loan closing on your deal. If So, it proves that they NEVER had any equitable or legal title to the mortgage or note.
> Subject: [Livinglies’s Weblog] Comment: “FORECLOSURE DEFENSE AND OFFENSE DISCUSSED: APPRAISAL FRAUD”
> Actually New Century’s liquidation plan wasn’t approved until August 1, 2008. Didn’t stop them from transferring my mortgage the day they filed BK on 4/2/07 though.
> Wonder how that will play out in court. Actually we’ll see because I already filed my answers including lost note, bk fraud, counter-claims, etc. I just got this funny little postcard saying “If anyone wishes to prosecute this case they need to file a dispositive motion or it will be dismissed.” What does that mean? Is that good?.>
ANSWER: You need to speak with a BKR lawyer to make sure it isn’t YOUR claim that is being waived.
> Interesting idea, although flawed.
> Your title insurance company will only process a claim if there has been a loss (or an imminent danger of one. i.e., an attack on the title), and only then if it is not of the insured’s doing (or could have been prevented through action by the insured.)
> Since foreclosure is ostensibly always the insured’s fault (except of course in the rare case of forgery and intervening liens), you would be hard pressed to find any insurance company that would see it as an insurable loss or attack on title. The insured had an obligation to perform under the note they signed (ahem, which usually includes a “successors and/or assigns” clause), and failing to follow through on that creates an uninsurable loss – securitization or no.
ANSWER: I AM flawed, just ask my wife! My point, perhaps not articulate enough, is different from what you are addressing. If at the closing there was a pooling and service agreement already in existence and known to the title agent. If at the item of the loan closing there was an assignment and assumption agreement already in place. If the investors had already purchased mortgage backed securities, that included a description of a “temporary” set of notes (See Lehman filings), that would be replaced by “real” notes and security instruments pledged as security to the holders of asset backed securities, and if the terms of the pledge within the SPV was an allocation of funds contrary to the terms of the note and mortgage, and if the title agent was aware of sufficient facts to put him on notice that (a) undisclosed third parties were involved in the transaction and (b) that undisclosed fees were being paid and (c) that this could create grounds for three-day rescission, but for the fact that the real “lender” has not been disclosed— assuming all of that, because that is actually what happened — does that not mean that there was actual knowledge by the title agent that there are dozens and perhaps hundreds of even thousands of people who have an equitable and legal interest in the security instrument encumbering the property. I agree that the title policy does not require intervention of the carrier until there is a claim. But the errors and omissions carrier for the title agent when put on notice of the claim would have an immediate interest in mitigating the potential loss. It is not that there is a hypothetical cloud on title, it is real from the moment that the transaction was consummated.
> OK, I have asked you to respond three times by email and have not heard back from you since, can you please explain to me why Countrywide is now listing MERS as a defendant in their lawsuits? I have noticed this since May 2008.
ANSWER: MERS is listed as a nominal defendant because of the confusion in the courts over standing. The original theory with MERS was to simplify the tracking and foreclosure process by having a central repository for the collection activities and start of the foreclosure process. In judicial foreclosure states this created problems, although there are some decisions that allow MERS to have standing if they allege that they physical have the note and they allege that they are the owner of the note. In Florida, an appellate court decided that if they made those allegations, it was sufficient to establish standing and that the lack of a beneficial interest in the note or mortgage was insufficient to attack standing.
The theory of the court, while I have not read the entire opinion, appears to be that the lack of a beneficial interest in the note or mortgage does not necessarily mean they lack some sort of appointed authority to represent the true beneficiaries (holders in due course). But it is equally true that in the proof of the case, the presumptions arising from their allegations about possessing and owning the note can all be attacked. If for example they received possession after default, or if they received an assignment from a source whose authority was dubious, then all the strategies presented on the blog would apply.
By naming MERS, they are trying undo the confusion they created when they “assigned” or indorsed the note to MERS for convenience. They seek to avoid the consequences of other court decisions that have held, almost uniformly, that in order to bring a legal action, you must have some stake in it. And if there are potential affirmative defenses, counterclaims or cross claims, those people must be present (necessary and indispensable parties). By naming MERS, who was not a party to the original loan transaction, they are admitting, in my opinion, a cloud on title to the property, the note and the mortgage.
> Date: Thu, 18 Sep 2008 17:23:54 +0000
> Subject: [Livinglies’s Weblog] Comment: “IN TROUBLE RIGHT NOW? PRESS HERE”
> Thank you for the treasure trove of information available on this site.
> We are in Palm Beach County, FL and a F/C was filed on us 14 months ago. In my (pro se) somewhat lame answer I alleged Tila violations and that Plaintiff was not the real Party in interest. We have been in Discovery since, with them objecting to just about every question or request. I have found the Trust through exhausting search at SEC/Edgar with my loan
> number in it. My question is how to determine which class my loan is in.
> The loan numbers cycle from lowest to highest over and over, the number of cycles far outnumber the number of classes shown in the prospectus.
> Also should I send the 3 day letter to all involved.
> Thank you
ANSWER: Yes send the three day letter and the general claims letter to all concerned. If you figure out a way to tie your loan to a specific pool, class, tranche or SPV, let me know. I can’t and I don’t know anyone who can, particularly with the right of substitution present at all stages of Securitization.
> I meant to ask this question in my post…
> Our refinance in May 06 paid off the previous mortgage. I did not receive my original note back from my previous lender. I believe a lender is liable for any assigned loan, and I have read articles on lender liability in a refinance, My question is, if a lender does not send original note back to borrower, is that contract in affect still open to rescind? even though someone has paid that amount on my behalf? But if the lender does not take the required steps in paying off this loan in a refinance why would they not be responsible? Is the lender with whom we have refinanced liable for paying a loan that has discrepancies in the paperwork, or when the bank they paid off did not follow through in their returning the original note to borrower? What documentation is exchanged between banks when a loan is paid off?
> Can this lender be responsible for this paid off amount as part of my law suit, thus leaving us not in debt for the amount that was paid by them? There are many complicated issues with this case. This has made it hard for the attorneys. I have sent a link to your site to my attorney. Thank you.
ANSWER: A very interesting question. Let me re-phrase it slightly. Up till now we have been concentrating in this blog on current mortgages that are in default, delinquency, the process of sale or the process of eviction. There are two major other classifications that need to be addressed:
1. Homes that are encumbered by mortgages where predatory lending, TILA violations, RESPA violations, HOEPA violations, RICO violations, fraud, usury, appraisal fraud and/or other issues are present like affordability and failure to employ reasonable underwriting standards, BUT where the the homeowner is not in default, has payments current, etc. They know they were screwed, but they have the income to pay for it. What about them?
2. Homes that were sold and where the 1sts Mortgage holder was paid off and the second mortgage holder was paid off etc.
In both cases the same issues apply as to any home that is in distress. You can and should challenge the validity of the authority of the mortgage servicer, the note and the mortgage in both cases. You should ask to see a copy of the note and in the case where it was “paid off”, you should have received the note marked “canceled” and signed by an AUTHORIZED person. It is doubtful that very many people actually received their canceled note in the closing of the sale of their home and doubtful that your current mortgage lender has physical possession or ownership of the note or its underlying obligation to pay. Therefore it is probable that the people you dealt with when you sold your house or the people you are currently dealing with lack authority or didn’t have the authority to cancel the note and deliver it.
So what I am saying is that people who are not in financial distress but either had or recently paid off one of these loans have nothing to lose by going after them. In the case of property where the mortgage(s) was paid off, I would demand a refund unless they can produce proof that they were entitled to the money. In the case where you just have a mortgage that you think they were predatory etc., demand a rescission (get an audit first), demand damages, refunds, rebates, treble damages etc.
> Date: Wed, 17 Sep 2008 18:22:43 +0000
> To: email@example.com
> From: firstname.lastname@example.org
> Subject: [Livinglies’s Weblog] Comment: “Foreclosure Offense: Quiet Title and Rescission (TILA and otherwise)”
QUESTION: I have received a five day notice. Do I have to leave?
ANSWER: Technically the answer would be yes, you are being ordered to leave. As a practical matter however, there are several procedural steps that the Trustee or “lender” must take before they can actually remove you from the premises. And of course in most cases, it is my belief that the Trustee or “lender” doesn’t have the authority to tell you to leave because they didn’t have the authority to foreclose your property in the first place. I have seen people delay the process for many months by entering into negotiations for cash for keys, or some other deal. Also there are filings you can make in court contesting the unlawful detainer or eviction action which might include an emergency petition to stay the proceedings because the sale of your property was improper, a sham, and constituted theft of your property (because the lender had already been paid by a third party, etc.). Motions for stay are not usually granted unless you also file an actual claim against the Trustee or lender for your TILA and other claims. You might be faced with a demand for bond, which sometimes is zero and sometimes is as much as $10,000, but upon payment of a fee you can possibly make arrangements with a fidelity bond company to put the money up. And there is always the bankruptcy route which if done properly, might challenge the Trustee or lender very effectively, particularly if you show the house as YOUR asset, based upon a disputed claim (and therefore of unknown value) and you show the “lender” has an unsecured creditor for an unliquidated amount that is in dispute.
1. A friend of mine let me see his papers he received from the Attorney’s office that’s the trustee for a bank that’s foreclosing on him. One of the papers that sent was titled Allonge. On the paper it says:
PAY TO THE ORDER OF
NEW CENTURY MORTGAGE COMPANY
Company Name: ACE MORTGAGE FUNDING LLC
by: Robert Gregory, Jr. Vice President
Can you explain what that really means?
2. Also, the paperwork says the original lender for this loan was Ace Funding Mortgage LLC. The loan has now been assigned to US Bank National Association, as Trustee for Asset-Back Pass-Through Certificates, Series 2006-NCS, and their mailing address is in care of America’s Servicing Company 3476 Stateview Blvd…..
Can you give me a brief explanation what all this means.
ANSWER: ALLONGE IS A FRENCH TERM (THEY ARE FOND OF THOSE ON WALL STREET), WHICH BASICALLY IS USED BECAUSE THERE IS NO PLACE TO WRITE ON THE FACE OF THE NOTE. THE INDORSEMENT (technically the correct spelling when used in connection with negotiable instruments)
This allonge says that ACE MORTGAGE FUNDING LLC, posing as the lender (FALSELY, AND RECEIVING A FEE FOR LENDING ITS LICENSE TO A NON-LICENSED OR CHARTERED ENTITY) in your transaction, assigned its interest in your note and mortgage to NEW CENTURY MORTGAGE COMPANY, which also was not the lender. You can liken this to getting a check from someone, and then signing it over to someone else. Whether the signatory on the allonge “Robert Gregory” was really the name of anyone who works there I do not know. It often is revealed that this is not the case. In fact it is often revealed that these assignments, Allonges etc. are created for your benefit long after the date of the allonge.
The date on the allonge is either before or after you closed on your loan transaction. If it is before, then they assigned an interest they did not yet have. If it was after it was probably within days of your loan closing. This would show that ACE was a stand-in for the real source of the funding, which you might think from these documents was New Century, but that would probably not be correct.
You say “The loan has now been assigned to US Bank National Association, as Trustee for Asset-Back Pass-Through Certificates, Series 2006-NCS”. Whether it was actually assigned and if so, how, is not known by you and apparently not known at all. There is probably an assignment and assumption agreement around somewhere and a pooling and services agreement around somewhere that will identify the real purpose of these parties. But the “trustee” does not actually own the mortgage and note either since the it is the actual owners of mortgage backed securities to whom the mortgages and notes are pledged. Whether any assignment was recorded is also an open question. Usually they are not, which is illegal in most states. This creates an odd anomaly — the mortgage of record is in the name of ACE and the note is traveling at light speed toward parts unknown with each successive transfer, transmittal or assignment. The effect of this is that what was rare under the Uniform Commercial Code has become commonplace. Ordinarily the note follows the mortgage and mortgage follows the note. But for reasons too extensive to report here, the note is split off from the mortgage because the players have other plans for it, including changing its terms, and changing the allocation of payments on the note.
And then you say “and their mailing address is in care of America’s Servicing Company 3476 Stateview Blvd….” This means that US Bank is not really doing anything here except acting as conduit and that it too has no real interest in the note and mortgage because it too was not the source of funding. Generally the law follows the money. So whoever was the actual source of the funding is the one who should be repaid. This is called the holder in due course under ordinary circumstances but these are not ordinary circumstances. The note is being held by any number of people other than the source of funding who has received a certificate and prospectus stating the the entire beneficial interest on the notes and mortgages in the pool are pledged to him, but that the specific notes and mortgages could be different than the original list, probably will be different, and that substitutions will occur. In other words they are selling the certificates before they actually have loan closings based upon signatures that have not yet been executed in loan closings that have not yet occurred.
America’s Servicing Company is obviously serving as the mortgage loan servicer, which means they are appointed by someone, with or without authority to do so, to collect your mortgage payments. They were created as yet another layer for you to penetrate when you attempt to assert or claims and defenses against the people who were present at the original closing.
> Open question to all. I have not yet received a notice of default but haven’t made a payment to IndyMac or to the HELOC company Wells Fargo since March. I am preparing to file lawsuits against both and a lis pendens. Should I call my fire insurance carrier now and tell them to change the beneficiary from IndyMac to me?
FOR GENERAL INFORMATION PURPOSES ONLY AND NOT TO BE ACTED UPON WITHOUT CONSULTATION WITH LOCAL COUNSEL.
ANSWER: Your insurance carrier will probably notify the “lender” that you have changed the beneficiary, which is a breach of the mortgage obligation. That will give THEM ammunition against you. You could check on that if you know the insurance agent well enough and he has the knowledge to answer the question.
- I would suggest that you send a notice to the Trustee similar to the one on the blog that basically says that Indymac sold off the loan, has been replaced by the Trustee of the pooled assets, and that you have recently discovered that there were several undisclosed elements of the original loan transaction, including the real party in interest that made the loan to you, and fees paid for various undisclosed “services” all in violation of the Truth in Lending Act.
- Since you have just learned of this, you are NOW exercising your 3-day right of rescission and you wish to rescind the transaction (“I HEREBY RESCIND”), which would also terminate the Trustee’s authority.
- Ask him to report to you who the real holder in due course of your note is and that based upon 10k and 8k filings from Indymac prior to its failure and takeover by the FDIC, it would appear that there are multiple investors who own shares in your mortgage and note, all of whom have a clear claim as holders in due course. Thus any direction or instruction he receives from the “lender” is not from a party with an interest in the mortgage or note and is void or meaningless.
- Demand that he forward a copy of the letter you send, certified, return receipt requested, to any parties undisclosed in the closing papers, and of course to forward a copy of the letter to his own errors and omissions carrier and to the carrier for the title insurance, since there was a cloud on title created AT CLOSING by the knowledge of the parties that the loan was “sold forward” or already committed to a third parties who were undisclosed real parties in interest and who collectively constitute the real lender.
- Hence the party to whom you would address a notice of rescission to was hidden from you and still is. Thus the 3 day rescission period continues to this day.
- Also state that based upon the SEC filings, and your consultation with experts in mortgage backed securities, Indymac’s successors entered into agreements wherein your loan payments could be allocated to payments due on notes from OTHER borrowers in whole or in part — as consequence of the cross guarantee agreements between tranches in the SPV and between SPV entities. You demand to know whether this has in fact occurred.
- Further, you are informed that in addition to cross guarantee agreements there was overcollateralization of your loan as part of the the overall scheme of your issuance of the note and insurance purchased with the proceeds of sale of the loan to you and investors in which reserve pools and guarantees of payment were created through payments to third parties, none of which was disclosed to you.
- And lastly, and perhaps most importantly, if you think that your loan was based upon a false appraisal (i.e., the appraisal value was shown by subsequent events to be over market), that this was an undisclosed cost of the loan obtained, in addition to damages suffered by the fraud committed on you, and that neither the Good Faith Estimate nor any other effort was made to disclose that this was the case.
- This inflated appraisal when added to the the other costs of the loan, created a usurious transaction in which the real lender was in fact a private, undisclosed, unregistered, unchartered, unregulated entity, that had failed to pay taxes and fees to the State of California, in addition to failing to report its activities within the state.
- This real lender entered into an illegal agreement in which the nominal lender” in fact agreed to “lend its license” to the real lender and was paid a fee of approximately 2.5% as a fee to do it, in addition to points and all other costs and fees of closing the “loan”, and interest paid from inception of the “loan.”
- Since the transaction constituted usury, you hereby declare the obligation on the note null and void and demand treble damages for the original face value of the note.
I would suggest that the same type of letter, with some modifications, be sent to Indymac, FDIC, the mortgage broker, the title agent, the appraiser, and the real estate agents at the closing of what you thought was a loan transaction but in fact turned out to be a fraudulent scheme to trick you into issuing a note that turned out to be a negotiable security that was already the subject of a plan and agreement to sell unregistered, unregulated securities to third parties who were the true source of the loan.
If you file suit or even if you file a petition for emergency temporary injunction I would suggest that you consider filing a lis pendens. You might be met with a demand for bond, but your argument would be that no bond is required since there is no delinquency as yet, no real party in interest present and the Trustee has no equitable or legal interest in the property. The proper party to ask for a bond would be someone who could allege they will be hurt by the filing of the lis pendens.
Question: what is in this blog and how do I use it?
Answer: Our mission is to provide information that will enable people to keep their homes and give them relief from what I believe is the biggest economic fraud in history. Over the last 25 years our economy has changed from actually making things of value and doing things of value to being financial enterprise driven by debt as the means for creation of money. The money has ended up in the wrong hands and this time, unless someone shreds the constitution, homeowners will end up getting the longer end of the stick.
Over a period of nearly one year we have researched, written and collected data, cases, statutes and decisions that will help lawyers argue their cases, homeowners understand their rights, and borrowers either get a lawyer or be able to say something in court that might stop the foreclosure and give them relief.
Question: Who is paying for all this work?
Answer: At the moment, the editor and a couple of dozen volunteers who are more tired now than the participants in a political campaign. We have not received one penny in compensation from anyone for any entry on this web site. We do hope to get donations, and we hope to make some money selling workbooks, seminars, DVD’s, etc. to fund continued expansion of this site into the best possible source for lawyers and homeowners who are in foreclosure, in distress, or in an emergency. The information also applies to people who are able to pay their mortgage but understand that they have been tricked into signing papers to justify the sale of unregistered securities to unsuspecting investors, based upon false hyper-inflated appraisals of the property and the securities.
Question: what is Your Objective?
Answer: TO CREATE A LEGAL AND POLITICAL MOVEMENT THAT STOPS HOME FORECLOSURES AND RETURNS WEALTH TO THE PEOPLE FROM WHOM IT WAS ILLEGALLY TAKEN:
First to Stop all foreclosures on all property financed, refinanced or subject to HELOC during 2001-2008.
Second to at least force the lenders and Wall Street firms into reasonable terms that compensate homeowners of every type for the inflated appraisals arranged and paid for by the lenders, and the other predatory practices employed in order to create an outlet for the all the money Wall Street collected by selling more securities than there were mortgages to back them up.
Third we want to see homeowners get money — damages, rebates of points, closing costs, refunds of payments and undisclosed kickbacks and fees that are required to be disclosed by law.
And fourth, the nuclear option — we believe that it highly possible that there is no “holder in due course” or that the only holder in due course could be the investor who purchased certificates on asset backed securities. We believe that the assets that backed these securities were scrambled in financial blenders into a puree that cannot be traced. Where that is the case, it is highly probably, as dozens of people have already learned in their own cases, that homeowners could end up with their homes free and clear of the mortgage and note forever.
Question: If you are right, won’t that be the end of the economy?
Answer: Mortgage backed securities only account for 2-3% of all derivatives in the world. Sure financial institutions will take a hit that is well-deserved. Someone must pay for this fraud — but certainly not the victims. The lawsuits and notices of sale are all designed to leave the lender in the windfall position of having been PAID IN FULL within days of closing on your loan, PLUS being paid an undisclosed fee of approximately 2.5%, and now they are foreclosing so they will have the money AND the property. In addition they might seek “deficiency judgments” that are also fraudulent on their face. Allowing people to regain their only source of wealth — their homes — is the ultimate stimulus package. We are not seeking to destroy anything, just save the economy, save you and save your home.
Question: A lot of States are having their attorney generals file suit against the major mortgage culprits — Countrywide, OCWEN, Wells Fargo etc. Won’t that help me?
Answer: In some cases, like the San Diego lawsuit to stop Countrywide from foreclosing, you might be helped. But mostly these suits are about damages and frankly there is no damage settlement on the horizon that will take care of this problem. This problem is at least a $13 to $15 trillion problem. The settlements are in the hundreds of millions which means the benefits rolling down to homeowners are less than 1/100 of 1%. Put another way, most homeowners during this period probably suffered damages of at least $100,000. The AG actions would get you $10.00. You need to be proactive and help yourself. Depending upon government intervention is probably unwise.
Question: How do I know You Can Help Me?
Answer: First of all there are no guarantees in life and this is no exception. EVERYTHING ON THIS SITE IS COMPLETELY VERIFIABLE BY YOU, YOUR ATTORNEY OR ANYONE ELSE.
We can give you information and you can hire an attorney.
You can and should get a mortgage audit which will help any attorney represent you, and you can use the information you get here to take to an attorney who can help you file pleadings in your own name, known in the legal field as Pro se.
Many Pro se litigants have been able to get their foreclosures dismissed — hundreds of them.
Most attorneys are just learning about the rights of homeowners and the fact that there is “money in them thar hills.” Most of them are not yet up to speed and advising clients to give up the keys when there are valuable meritorious defenses and offensive strategies that are already working all over the country. we prefer you get a lawyer, but if you can’t get one who is on your side and who will demand the missing note, etc., then you might have to help yourself.
> Date: Fri, 15 Aug 2008 14:54:40 +0000
> New comment on your post #838 “Foreclosure Defense: Wachovia Knows About Fraud”
> E-mail : email@example.com
> Could you please address the single transaction approach in regards to the mortgage process. If in your mortgage it states that they may or may not sell your mortgage does that release them from any misdeeds, also do you need an attorney versed in tax and securities law for this. Very important to me is how to stop eviction after a sheriffs sale ,I requested the original note before the sheriffs sale and was given the recorded copy from the county and a payment schedule from the lender,is this the same. What if any thing can be done to have this taken away from the courts.Attorneys have just said that although I was duped legally when I signed the mortgage I did sign it .I have not been able to secure a job so bankruptcy is not an option. In Michigan no one including the AG and the governor seem to be involved. Homeowners are just walking away because they cannot do anything,200 homes were at the sheriffs sale in may and there’s an auction in sept. for another 850. Anything?!
This is WAR — The Homeowner’s War. If you do nothing, the worst will happen, If you act proactively then you have a chance of saving your home, collecting damages, getting your attorney paid, and even clearing your title of the mortgage and note.
First of all, if there is a sale, it is a good idea apparently from what has been reported to me by others, to go tot he sale and announce that this property is subject to litigation, that title is not clear because of the securitization of the loan, and that anyone who buys this property is probably going to be named in a lawsuit.
Secondly, the mortgage papers (somewhere) probably reveal that they can assign, transfer or sell your loan to a third party. This is not the point. Those provisions were always there dating back decades. The difference here is that they sold or transferred the mortgage and didn’t tell you who the new owner was. If they did give you a notice that the mortgage was assigned or that the mortgage service rights had been assigned according to the pooling and service agreement, they neglected to tell you that whoever it was that “bought” your mortgage re-sold it to someone else who in turn did the same thing and that eventually through pooling and securitization the real owners of your mortgage are thousands of investors. This leaves you in the position of not knowing if your payments are going to those investors who are the real owners of your loan. And it leaves your mortgage servicer with an obligation to answer the question. And it leaves you title clouded by the foreclosure, the sale and even a sale to an innocent third party after foreclosure.
Thirdly, I would get some press and put in an ad for everyone who wants to join you at the sheriff’s sale to tell everyone they are contesting the sales, and the entire foreclosure process. If you can group together some people, you can afford to hire a lawyer whom we can ghost write for and guide through the process even if he/she has not been trained in one of your seminars. It sounds like the procedure would be similar to one used in Ohio where the suit was field in federal Court, and then an emergency petition was field to stay the eviction/sale in state court based upon the pendency of the Federal Court action. It worked. See blog for forms.
New comment on your post #701 ‘QUESTION FOR READERS: HOW MANY OF YOU WOULD LIKE TO ATTEND A SEMINAR ON 9/3/08 IN SANTA MONICA FOR LAYMAN ONLY’
E-mail : firstname.lastname@example.org
> Neil thank you so much for putting this information out to the public for free. It has been so hard trying to find foreclosure defense strategies online in one place.
> I have been helping a friend take actions against his lender and servicer in Michigan pro se but this has become too difficult for him to understand. We settled on an attorney and are looking to use rescission for TIL violations as a negotiating point for a loan workout. I’m not satisfied with that and want the lender and servicer to prove standing.
> Every attorney we spoke with has told us that Michigan is the most difficult state to contest foreclosure and that the holder in due course defense won’t work here and has been tried unsuccessfully. Apparently servicing companies are granted the rights of holder in due course as long as the assignment was properly recorded, no original note is necessary. There are also some rules of evidence that allow for anyone to complete the lender’s affidavit without personal knowledge if it is in an action that occurs as part of everyday business.
> The mortgage was only assigned once, from the original broker to the servicer. How can I make this strategy work when every attorney I speak with says it won’t in Michigan?
> Also, I came across a 17 page RESPA request for documents that could be requested in discovery. It is very thorough and I’d be happy to forward it to you or anyone who needs it.
> You can see all comments on this post here:
We had the same problem in Ohio. The way we got around it was by (1) filing the action in Federal Court (2) filing emergency stay in State court based on the pendency of the Federal action. See Ohio Forms on blog. The stay was granted and “holder in due course” while affected by State Law won’t help them on TILA and common law fraud. There is case law to support that. See the Rookman decision on hte blog. It is also one thing to say they can collect and another to say they can enforce. More case law and decisions on blog about this. For one thing, if you have counterclaims, what do you do? AND you Do have counterclaims. My suggestion is find a MIchigan Lawyer who understands what I am talking about and run it past him. I think you have a winner here.
> Date: Tue, 12 Aug 2008 13:41:45 +0000
> To: email@example.com
> Subject: [Livinglies’s Weblog] Comment: ‘QUESTION FOR READERS: HOW MANY OF YOU WOULD LIKE TO ATTEND A SEMINAR ON 9/3/08 IN SANTA MONICA FOR LAYMAN ONLY’
I requested assistance at this website for an attorney than can take my foreclosure case in Fort Lauderdale on contingency. A Lawyer responded, but after a wasting a couple of days with her, she informed me that she needed a $3,000 retainer. I talked to another attorney in Fort Lauderdale and mentioned this blog and he responded this seems like another internet scam. He said it’s impossible for any judge to give you a property free and clear. If you guys are so sure you can win those cases, then why do you need a retainer anyway? After all, if you do your job right, you are going to get paid by the lender. I guess, if you collect $3,000 from a bunch of people, you are going to make a lot of money even if you lose every case. It definitely sounds like a scam.
You’re upset and you are not thinking clearly. If we were soliciting you, it would be much different. This is YOUR case and YOUR house. If you want the help of a professional you need to pay them, pure and simple. You act as though you deserve a contingency fee because you were screwed by the mortgage company. No lawyer you contact did this to you. THEY have no axe to grind except to do their job and get paid for it. As for anyone who thinks this is a scam, they are entitled to their opinion. More than 100 people nationwide have already been reported to have received their title free and clear. It’s fact, not a theory. And you can Google it yourself. What is impossible is for you get services for free unless you qualify from some agency. If you go to a private attorney, you will be charged. Lawyers need money to pay their staff and their other expenses while they litigate. Clients create that revenue. That is why a retainer is so important.