“The REMICs have failed! “The REMICs have failed!”

If Paul Revere were alive today he would be riding through the town warning “The REMICs have failed!” However, the government these days would go, “Shhhhhh!”

Most average homeowners have no idea what a REMIC is – actually most attorneys have no clue …. so, you know many of the Judges are completely in the dark.  REMICs are a form of IRS tax shelter sold to investors as part of the mortgage-backed securities package (Real Estate Mortgage Investment Conduit (“REMIC”) pursuant to I.R.C. §§860A-G).

The documents that killed the REMICs may actually help save your home.

A new report by Oppenheim Law reveals “the Black Magic of Securitized Trusts”. The largest key to REMICs is that they are required to be passive vehicles, meaning that mortgages cannot be transferred in and out of the trust once the closing date has occurred, unless the trust can meet very limited exceptions under the Internal Revenue Code. I.R.C. §860G.  The 90 day requirement is imposed by the I.R.C. to ensure that the trust remains a static entity.  However, since the mortgage-backed securities trust controlling documents, the Pooling & Servicing Agreement (PSA), requires that the trustee and servicer not do anything to jeopardize the tax-exempt status; PSAs generally state that any transfer after the closing date of the trust is invalid.

What does that mean to the average homeowner in foreclosure? Check the recordation office and look for the “Assignment of Mortgage” on your property – generally found just before the Notice of Foreclosure is filed with the State if your loan was securitized. Looking through hundreds of these beauties there have been few, if any, that were timely assigned to the trusts. How can you quickly tell if the Assignment of Mortgage has failed to make it timely to the trust?

The Assignment of Mortgage [below] shows a 2006 Trust – and a fraudulent assignment in 2009 – 3 years AFTER the Trust had CLOSED! Not only was it too late – but the Trust could not accept it pursuant to the REMIC of RFMSI 2006SA4 PSA and as further defined in the Oppenheim Law report. Assignments of Mortgage are public documents.

What was not known until very recently, in fact Delaware Attorney General Beau Biden brought it out in his case Delaware v. MERS, lenders generally failed to follow the PSA and properly assign the mortgage loans to the Trusts.  In the transcripts that AG Biden cited from In re Kemp, 440 B.R. 624, 626 (Bankr. D.N.J. 2010) (No. 08-18700) (Aug. 11, 2009), an employee for Bank of America responsible for servicing the securitized Countrywide mortgage loans testified under oath that Countrywide did not have a practice of delivering original documents such as the note to the Trust and was not in the habit of endorsing notes at the bottom, but favored allonges that they made as they went along. She further testified that allonges are typically prepared in anticipation of foreclosure Bookingcom fill ad2litigation, rather than at the time the mortgage loans are purportedly securitized.  Both of these facts are contrary to the requirements of the PSA that the note be endorsed in blank and delivered to the trustee at the time of securitization.  Thanks to foreclosure defense attorney, Bruce H. Levitt, of South Orange, NJ – Bankruptcy Chief Judge JUDITH H. WIZMUR totally got it! See her Opinion here.

The trust investors have been suing Countrywide and other Wall Street banks for inflated appraisals, systematically abandoning underwriting guidelines and over-rated bonds. The investors did not yet know that many of the mortgage loans failed to make it timely into the trusts and that the REMICs had been damaged.  In fact, recently the IRS has taken notice and already initiated an investigation into the “active” activities of these trusts and the tax implications from them. Scot J. Paltrow, Exclusive: IRS Weighs tax penalties on mortgage securities, REUTERS, April 27, 2011.

Here’s a fine example of a (too) late Countrywide Assignment of Mortgage made in 2010 to a CWABS 2005-3 Trust.  Did they just figure the courts were going to be oblivious forever? 

This is FIVE (5) years too late! Oh yeah, the REMIC has or should have failed. And it appears there are thousands, if not millions of these gems filed all across America in every state property recordation office – you just have to look.

Law Professor Adam Levitin, Georgetown University, describes the conflict the following way in the Oppenheim Law report:

“The trustee will then typically convey the mortgage notes and security instruments to a “master document custodian” who manages the loan documentation, while the servicer handles the collection of loans.  Increasingly, there are concerns that in many cases the loan documents have not been properly transferred to the trust, which raises issues about whether the trust has title to the loans and hence standing to bring foreclosure actions on defaulted loans.  Because, among other reasons, of the real estate mortgage investment conduit (“REMIC”) tax trust of many private-label securitizations (“PLS”) . . . it would not be possible to transfer the mortgage loans (the note and the security instrument) to the trust after the REMIC’s closing date without losing REMIC status.”

Levitin further points out:

“As trust documents are explicit in setting forth a method and date for the transfer of the mortgage loans to the trust and in insisting that no party involved in the trust take steps that would endanger the trust’s REMIC status, if the original transfers did not comply with the method and timing for transfer required by the trust documents, then such belated transfers to the trust would be void.  In these cases, there is a set of far-reaching systemic implications from clouded title to the property and from litigation against trustees and securitization sponsors for either violating trust duties or violating representations and warranties about the sale and transfer of the mortgage loans to the trust.”

Without valid assignments, attorneys say that standing and jurisdiction issues rise to the top and may be asserted at any time – even first time on appeal.  If the pretender lender did not have a standing to non-judicially foreclose because the assignment of mortgage is void, logically everything thereafter would be a nullity – that could open up a can of worms beyond the pretender lenders’/servicers’ repair.

These documents appear to have been fraudulent and as lawsuits assert – were intentionally prepared and executed to unlawfully confiscate the property from the homeowners. It appears it was easier to create the fraud and get paid by default insurance or credit default swaps than it was to modify they loans with the homeowners. Not only was there fraud on the homeowners, but also on the investors.

But could REMICs be why the investors don’t partner up with the borrowers?  They were both duped. The borrowers unwittingly relied on the [inflated] appraisals and had no idea that the underwriting guidelines had been “systematically abandoned” – just like the investor claims.  But there is one big difference…

If the investors include the borrowers, the fraudulent assignment of mortgages will surface and the REMIC fraud will float to the top like a dead body in a botched murder case…. and somebody will be stuck with paying the IRS – even if the investors win the case and get their investments back.

Could these fraudulent assignments save your home or undo the foreclosure? That’s a question to ask a competent foreclosure defense attorney and have him review your file.

Next, we need to follow the money… who actually got paid, how much and when??

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127 thoughts on ““The REMICs have failed! “The REMICs have failed!”

  1. Pingback: The IndyMac Whodunit Blame Game – former CEO blogs his rationalization | Deadly Clear

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  6. The only problem with this defense is that, rightfully or wrongfully, some judges are taking the position that the defendant in a foreclosure proceeding does not have standing to raise the issue of a late assignment which is violative of the terms of the PSA. Their reasoning is that so long assignor and assignee (i.e., the trust) don’t object to an assignment of the mortgage after the cut off date, then the foreclosure defendant has no right to complain. This results in the defendant being unable to use this defense. I don’t agree, but this has nevertheless been the ruling in at least a few cases.

    • Nobody said all Judges were pillars of integrity, astute or had clerks that could handicap a horse race. The issue is clearly standing and leads to jurisdiction that many attorneys have missed even pleading in trust cases. In order to foreclose, judicially or non-judicially, the Plaintiff must have standing to bring the claim. If the Assignment of Mortgage is faulty or in fraud there likely is no standing. An Assignment of Mortgage to a NY Trust is governed under NY Trust laws. Under New York Trust Law “every sale, conveyance or other act of the trustee in contravention of the trust…is void.” New York Estates, Powers and Trusts § 7-2.4. Further, given that New York Estates Powers and Trusts Law section 7-2.1(c) authorizes a trustee to acquire property “in the name of the trust as such name is designated in the instrument creating said trust property,” there should be little doubt that for transfer to an trustee to be effective, the property must be endorsed in the name of the trustee for the particular trust.

      “New York trust law requires strict compliance with the trust documents; any transaction by the trust that is in contravention of the trust documents is void, meaning that the transfer cannot actually take place as a matter of law. Therefore, if the transfer for the notes and mortgages did not comply with the PSA, the transfer would be void, and the assets would not have been transferred to the trust. Moreover, in many cases the assets could not now be transferred to the trust.” Source: Congressional Oversight Panel, Examining the Consequences of Mortgage Irregularities for Financial Stability and Foreclosure Mitigation, November 16, 2010 page 19. If Congress recognizes that these Assignments are void, which means the Plaintiff Trust has no standing – then any judge ridiculous enough to side with his banker buddies should be appealed… and hopefully, run into a Judge Rakoff-type appellate panel.

      The problem is there have been too many bad foreclosure defense attorneys that have mucked up the water for the good guys causing many of these decent cases to have to be appealed. The point is – shove the lack of standing and jurisdiction at the courts, even on appeal. The borrower may not have the damages from the failure to properly and timely assign the mortgage loan docs to the trusts,* but he certainly can raise the issue that the Trust does not have standing to pursue a claim without a valid assignment. There are differences between mortgage lien and DOT states. In a mortgage lien state the title remains with the borrower – where in DOT the title is invested in a beneficiary or trustee and the chain of title may appear to be less of a problem, but isn’t MERS many times the DOT “trustee/beneficiary” who made the untimely fraudulent assignment?

      Let’s look at this one other way – if the states can go after the banks for their fraudulent assignments filed in the state recordation offices and they are not parties to the PSA, it would seem plausible that a borrower, whose collateral was used to bait investors to buy into a trust, could make a successful defense when an assignment is void. As bank friendly and conservative as our Hawaii court system is – Dubin Law Offices in Honolulu have had 36 victories this year, the majority of which were NJF at the Writ of Ejectment (eviction) stage.

      *At least not like the investors.

      The quote for the week: When practicing appellate law, there are at least three immutable rules: first, take great care to prepare a complete record; second, if it is not in the record, it did not happen; and third, when in doubt, refer back to rules one and two. State Comp. Ins. Fund v. WallDesign Inc., 132 Cal.Rptr.3d 352 (Cal. Ct. App. Oct. 20, 2011)

      • It is a huge question whether the EPTL statute applies to corporate trusts. The whole of the statute seems to indicate it does not. This does not mean that NY trust law is forgiving for corporate trusts but raising EPTL as the basis for your argument in a REMIC context carries serious risk of negatively impacting your cases and others’ cases.

      • If raising EPTL is a problem then somebody ought to tell Congress and NY AG Schneiderman. Apparently, on good authority the Congressional Oversight Panel already raised the issue in their report and I doubt they lacked adequate authority. COP Report at page 19 stating:

        “[I]n order to convey good title into the trust and provide the trust with both good title to the collateral and the income from the mortgages, each transfer in this process required particular steps. Most PSAs are governed by New York law and create trusts governed by New York law. New York trust law requires strict compliance with the trust documents; any transaction by the trust that is in contravention of the trust documents is void, meaning that the transfer cannot actually take place as a matter of law. Therefore, if the transfer for the notes and mortgages did not comply with the PSA, the transfer would be void, and the assets would not have been transferred to the trust. Moreover, in many cases the assets could not now be transferred to the trust. PSAs generally require that the loans transferred to the trust not be in default, which would prevent the transfer of any non-performing loans to the trust now. Furthermore, PSAs frequently have timeliness requirements regarding the transfer in order to ensure that the trusts qualify for favored tax treatment.”

        Of course, the banks would hope that EPTL wouldn’t include them – but it appears that the opinion on that train has already left the station.

        The issue is actually fraud and forgery – appears to be in the neighborhood of RICO. We now are finding that the mortgage documents were being used for various purposes other than sitting in static trusts… And it appears that’s why the endorsements were not timely or properly handled.

      • You miss the point. EPTL is not the sole source of NY trust law and if you cite to a statutory provision designed for estates and not REMIC trusts, you will lose the argument. NY common law is just as strict as the EPTL, if not more so, but to win the argument one must know the difference and cite to the correct law.

    • I agree with the position of the majority of the courts which have held that the homeowner does not have standing to raise the issue of the rights of the investors. I am, however, taking the position that the homeowner has standing to raise the issue that the Trustee of a REMIC Trust cannot claim the right to foreclose on a mortgage when the promissory note and mortgage were not transferred to the trust as a matter of fact. The issue remains to be determined as to whether or not the Trustee has standing to foreclose. If the loan is not in the trust, then the Trustee does not have standing to foreclose in the name of the trust.

      • The Congressional Oversight Panel has already given the green light to prosecute these banks and highlighted the RICO clues. With that said there is a Supreme Court case, ROBERT G. HOLMES, JR., PETITIONER v. SECURITIES INVESTOR PRO-TECTION CORPORATION, ET AL., 503 U.S. 258; 112 S. Ct. 1311; 117 L. Ed. 2d 532; 1992 U.S. LEXIS 1947; 60 U.S.L.W. 4225; Fed. Sec. L. Rep. (CCH) P96,555; 92 Cal. Daily Op. Service 2460; 92 Daily Journal DAR 4030; 6 Fla. L. Weekly Fed. S 89 (Decided March 1992), where O’Connor, J., joined by White and Stevens, JJ., con-curring in part and concurring in the judgment, expressed the view that “a plaintiff need not be a purchaser or a seller to assert RICO claims predicated on securities fraud, given that the relevant predicate offense is 32 of the 1934 Act (15 USCS 78ff(a)), a criminal provision as to which the purchaser-seller standing requirement is of no import.” And Scalia, J., concurring in the judgment, expressed the view that “(1) the purchaser-seller limitation applicable to private actions under Rule 10b-5 does not apply in civil RICO cases alleging Rule 10b-5 violations as predicate acts, given that the action under 18 USCS 1964 is con-gressionally created, unlike the action under Rule 10b-5, which action was created by the court itself;”

        The question asked on Appeal: was “the Ninth Circuit correct when it held that SIPC need not be a ‘purchaser or seller’ of securities to sue under Section 1964(c), which provides that ‘any person’ may sue for ‘injury to his business or property’ ‘by reason of’ ‘any offense … involving fraud in the sale of securities … punishable under any law of the United States,’ wire fraud, or mail fraud in violation of Section 1962?”;”

        Let’s face the facts – this was a scheme that was even patented. It wreaks RICO! Qui Tam if we must. The investors have sued for “inflated appraisals, systematically abandoned underwriting guidelines, and over-rated bonds – the homeowner had no control over any of these issues. In fact the investors had more opportunity and disclosure of the scheme than the homeowner who unwittingly participated and made his decision to borrow based upon the [fraudulent] appraisal. By 2006, the banks were no longer using appraisal as their basis for lending. They patented a process that used the borrower’s credit score, “ability and willingness to pay” to come up with a figure and then went shopping for an appraiser to meet the figure in a fraudulent inflated appraisal. Homeowners thought they were making a good investment and when they hesitated, there was a patented speech contrived by the banks that assured the homeowner he could refinance if he kept his credit score up.

        The majority of homeowners had stellar credit. 8 out 10 called the banks for help before they missed a payment. They were told they had to miss 3 payments in order to get help – but that actually put them into default – where insurance monies kicked in and paid off the banks. There was never any plan to help the homeowner to anything, but out of their house – so the banks could continue to churn and burn. They wrote more loans than they can hold – the jig is up. To allow foreclosure and eviction to continue knowing that there is no where for these mortgages to go is to aid and abet the fraudulent activity – whether it is Obama, Holder, Geithner or Congress. There are more loans than the banks can legally hold – modification is a ruse just taking up time to get past the statute of limitation for fraud. Because that is exactly what this mortgage securities scheme was – a Ponzi scheme. A Ponzi scheme that created $700 TRILLION of debt. The homeowners did not do this – Wall Street did.

        So, when it comes to the question of “can a homeowner point to the PSA and the forged and fraudulent assignment of mortgage?” We know that the banks know it is forged and fraudulent – push the fraud and RICO button because this was a securities fraud and the homeowner and his collateral are certainly unwitting indispensable 3rd parties. Damage to the homeowner: fraudulently inflated property value, inability to sell the property, inability to enjoy the property, inability to refinance the property, loss of equity and investment, clouded titles, and this scheme caused the economy to collapse – loss of jobs, hours, wages; all causing stress, divorce, health issues, death – this was a (literally patented) financial force majeure.

  7. The continuing (and arguably greater) problem is that almost all these Trusts, including the REMIC trusts, are constituted under New York law [as "Deadly Clear" points out], but the cases being argued are in disparate States. The Judges in those other States are not familiar with the stringent requirements of NY Trust Law, which is very different from other States, and you get these uncomprehending looks from the Bench (and bad Decisions). Counsel raising these points are advised to be thorough in studying the NY Trust Law and know how it strictly structures the transactions. Note with particularity that the requirement that “any transaction by the trust that is not in compliance with the trust documents [i.e. the PSA] is void” will include a “deposit” by another of an asset into the Trust, and is not limited to acts of the Trustee, since the trustee is accepting the proffered late asset, albeit passively. Educating the Court is an uphill battle; it is not possible unless the advocate himself is fully prepped.

    • that is what Judicial Notices are for!! To alert the court to “foreign law” and make them abide it with regard to to a party under that law. courts can not easily find in favor ..or maybe not legally where fraud is involved.
      I am using TX law to prove aggravated perjury, fraud etc in the hopes that the court will strike the affirmations in my FL foreclosure. This will allow a verdict on the evidence as the affirmation is required under FL law and retraction is not an option under TX law (as it is now disclosed to the court and would have been by my discovery, not their retraction)! pro se here.

  8. One of the issues I am bring before the federal court in Brooklyn is the NOD process that starts the foreclosure in all states is fraudulently created by parties that have no personal knowledge of any ownership rights of anyone mortgage loans and are not from the law firm as represented on the notice, in fact the whole process has been create by a inventor with a published application with the United States Patent and Trademark Office, and a filed copy write assigned to law firm in Texas with the U.S. National Bank Association as the Agent, what they have done is created their own debt collection practices. When I was reading the public statement of the Nevada Attorney General Office one thing he said that is the focus of the suit is ” no industry has the right to circumvent state statues” As I sit here looking at theis stuff I say to myself how the hell can they use a arts and science invention give it a trade name and use that trade name to create documents to start the foreclsoure process in all 5 states? I take that back world-wide ?

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  10. “some judges are taking the position that the defendant in a foreclosure proceeding does not have standing to raise the issue of a late assignment which is violative of the terms of the PSA. Their reasoning is that so long assignor and assignee (i.e., the trust) don’t object to an assignment of the mortgage after the cut off date, then the foreclosure defendant has no right to complain.”

    I think the judges are right as far as standing is concerned. What they overlook is that the foreclosing party has “unclean hands” rendering the equitable remedy of foreclosure unenforceable. By concealing the fact that untimely delivery was made to the REMIC trust in contravention of the explicit requirements of the PSA, a fraud has been perpetrated upon investors and the IRS. By enforcing foreclosure, the courts are aiding and abetting the commission and concealment of a fraud.

    Furthermore, given the dishonesty of the assignor, one ought to also question whether the assignor can document that it actually owns and holds the note. For all we know, the note may actually be in the possession of another link in the chain of mortgage title.

    • How can investors object to something they don’t know about? After speaking to investor attorneys I’m pretty convinced that they didn’t know the mortgages weren’t assigned to the trust… and that they don’t want to address this because it affects their (lack of) due diligence, not to mention who gets stuck with the IRS bill?

    • I have one case in which the second mortgage lender proceeded to foreclose on the first mortgage and pretended it was foreclosing on the first mortgage, but attached the second mortgage note to its pleadings. The law firm for the second mortgage creditor also represents the first mortgage creditor. On motion to vacate the judgment for fraud (I got the case after the default judgment was entered) the second mortgage creditor claimed that the first mortgage note had been lost and the finally produced a copy of the first mortgage with a robosigned endorsement in blank. It is easy enough for the law firm representing both banks to order a copy of an instrument from the client, but I am convinced that the first mortgage holder does not know that its first mortgage was foreclosed by its own law firm in favor of another client of the law firm. This is an example of the note being in possession of another link in the chain of mortgage title. I now believe that the law firm is acting criminally because it is on notice that it is using a note belonging to one of its clients to foreclose in the name of the other. This is a good example of a double claim on the same indebtedness, but the courts in that state have so far dodged the issue.

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  75. Thanks for the article and the info. How can someone research if the trust has been “retired” or “closed”? If the trust has received TARP funds or bailout? I know the name of my “alleged” trust, but, it’s countrywide and they do not list loans in the SEC files and based on my research my promissory note is resting comfortably in a land fill or bankers box somewhere in Calabasas right now. My property was assigned 8 years after purchase.

    I am current on my mortgage and trying to refinance thru a HAMP mod , but, am underwater and only hope is a loan modification with BofA and second with Citi. Thinking of a quite title action to try and bring BofA to the table.

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    • This information is not new. The mortgagor generally lacks standing to raise a REMIC defense. What is missing is an understanding why mortgages were “moved” in violation of REMIC requirements. This is the key to unlocking the largest but still unrecognized scandal involving misconduct by securitizers including Freddie Mac and FNMA., .Mortgages were moved to allow major banks to make false financial statements to defraud investors, creditors and regulators. Mortgage derived income flows became segregated from spurious claims of ownership. Potential liability could run to hundreds of billions of dollars and decimate the banking system. This scandal makes the fixing of the Libor rate a tempest in a teapot.

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  89. The plaintiff is asking the court to recognize them as the Trustee as defined by the PSA or Trust Agreement in order to have standing. The Plaintiff is then asking the court to ignore any violations of the PSA or Trust Agreement which is not advantageous to them. If the court recognizes the plaintiff (Trustee) as having proper standing via the PSA or Trust Agreement, then the court should recognize the ENTIRE PSA or Trust Agreement.

    • Why? Most PSAs explicitly provide that the debtor is not a third party beneficiary of the PSA. Accordingly, the debtor has no standing to challenge violations of the PSA. I have no problem with this. Instead, I believe that the PSA alters the terms and conditions of the mortgage un ilaterally. The creditor has no right to amend the mortgage without the consent of the debtor. Accordingly, the PSA renders the mortgage unenforceable.Since the other side argues that the debtor is not the benefivciary of the PSA, the other side cannot argue that such revisions were made for the benefit of the debtor.

  90. I agree with Debbie C to a point and with Richard F. Kessler as well. I work primarily in a judicial foreclosure state. Why not argue in the alternative? The middle ground appears to be the argument that if the note and mortgage were not delivered to the Trustee in accordance with the terms and conditions of the PSA, the Trustee does not have standing to sue the homeowner because the Trustee cannot impair the favorable tax treatment of the entire pool of assets by accepting delivery of a late mortgage assignment or mortgage note (more than 3 month after the closing date: 26 USC sec. 860D) which is the one I use. The homeowner is not seeking to benefit from the Trust Agreement, but is defending his/her right to be sued only by the party with standing to do so. (We know that the attorneys for the servicers are bringing these foreclosure actions in the names Trustees, but I doubt that the Trustees have authorized the individual actions. Many of the trusts have already been liquidated upon full payment by mortgage insurance/TARP funds/Credit Default Swaps. There may be subrogation issues and the risk of a second or third claim for foreclosure is actual from the homeowner’s point of view. From the investors’ point of view, they are probably paid in full and cannot collect more than once on their investments. It seems that only the servicers are trying to recover the second/third/fourth payment on an obligation which was actually extinguished upon the creation of the security under UCC Article 8, requiring all further collection actions to be conducted under UCC Article 9.
    This is why I do not refer to homeowners as debtors nor do I call servicers or their claimed principals “creditors.” The actual creditor, if there is one, appears to be the insurance company by subrogation (if those rights were given by the insured or can be equitably enforced), US Treasury under TARP or a GSE under their claim of ownership of the plainly unsecured loan.

  91. Please do not miss the main point when talking about suits brought in the name of the trustee of the mortgage backed securities trust. In such an event,, the trustee and its counsel are attempting wrongfully to collect a debt not owed to9 the trust but owed to the actual holder of the mortgage. This is a violation of the Federal Fair Debt Collections Act and gives a mortgage debtor standing to sue in Federal district court for this violation as well as a slew of others. No mortgage defenses is ever better than a good counter-offense. I am looking forward to appearing in U.S. District Court in the near future to argue such a cause of action.

  92. RE: FDCPA Thank you, Attorney Kessler. That is a very good point. I look forward to seeing the outcome of the case which you will be arguing.

  93. Hello I found this blog and thought I would post in hopes of
    getting some help finding an attorney.

    In Nov 2005 a mtg was taken with Lender ABC for property in
    Florida. An interesting thing with the note which I signed;
    it had lender printed at the top, ABC, but below in empty
    space was a stamp in blue ink, which said “Without recourse
    pay to the order of JKL bank.” It gave me pause but I did
    not know anything about this stuff so I went on and signed
    it and completely forgot about it until two years ago.
    In Jan 2006 I received a letter that said my loan had been
    transferred to company DEF and to send payments to their
    servicer. I had already sent the first payment to ABC (which
    they accepted) and had to do a bunch of letter/faxes to get
    it straightened out and transferred over to DEF. A late
    payment was also placed on my credit report, but
    subsequently removed. Payments were made, never one late,
    through Sep 2008. At that time I called to inquire about a
    modification because I had suffered job layoff in 2007 and
    income reduction with new job of 40%. It was all in the
    papers and tv to call your mortgage lender and ask for help.
    They said I had to be late before they could even discuss
    anything, so at their suggestion I did not pay. After I was
    past 30 days they made me send in financial spreadsheet
    listing income and expenses. I could not call to see if they
    had received this until 5 days after I had submitted it.
    Each time I did they would indicate they had not received
    the paperwork. I did this kabuki four times before they
    finally admitted to receiving, which ate up another month.

    I had a scheduled “call-in” (specific date and time) to
    discuss my paperwork. The lady told me I had an “income
    deficit” and did not qualify for anything. I had told them I
    had an income deficit two months prior when I first called
    them! During this call she refused to tell me who the debt
    was owed to. This came about in a roundabout way and I did
    not grasp the significance at the time…I would say
    something to the effect “well the bank wants their money
    wouldn’t it be better to work something out” and she would
    quickly correct me and say, “the investors” and I would ask
    “who are the investors” and she told me that was
    “confidential.” I absolutely did not know any
    property/debt/note/mortgage law at the time. It seemed
    shady, but I did not know what to do. I had bled 401K making
    up the income deficit for 1.5 yrs and knew it could not
    continue much longer. They then sent a letter suggesting a
    short sale, and shortly thereafter filed for foreclosure. I
    believe I was induced to be late, and then to do short sale
    under threat of foreclosure. Also, a notice of default was
    never sent, and the foreclosure was filed by Stern. The
    property was sold in short sale Summer of 2009. It sold
    quickly because it was a very desirable property in a
    desirable location. Had I known what I know now I would
    never have agreed to any of this and fought the foreclosure.

    What I have found out since (in addition to education of all
    these things I did not know) is that the entity that filed
    suit was a bank XYZ (not ABC or DEF or JKL), as a trustee
    for a mbs trust.

    A couple of issues with this trust: One, the trust closing
    date was July 1, 2006 — nearly 8 mos after the note and mtg
    were executed! Two, the trust, in its SEC filings, says it
    is a DE trust. DE Sec of State has absolutely no record of
    this entity! I have looked it up on their site and called
    them–no record.

    The only thing recorded in property records, to this date
    with regard to my loan, is the original mortgage with lender
    ABC reflected. There was never a transfer/assignment
    recorded to DEF, JKL or XYZ, much less the chain that should
    be present, as specified in the PSA. Now that the property
    is sold, it would be impossible (well maybe not, but really
    illegal) for them to try and file retroactive assignments to
    cover all this up!

    I am not even sure this servicer had any right to collect this
    money all the time they did. I have all the letters they
    sent me in 2008/2009 and at the bottom of them is “debt
    collector” language. From what I have read, a true servicer
    does not have to include this, so why would they put that
    language on their correspondence?

    I realize that most attorneys are occupied just trying to
    thwart foreclosures their clients are presently facing. Are
    there any that are looking at this more from a contract
    law/securitization point of view with all the fraudulent
    inducement, etc..???

    I would really appreciate any help in finding an attorney to
    pursue this on contingency basis. Thank you.

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  99. I am a pro se….defending a SJ in a couple days. I’ve seen here that I don’t have standing to challenge violations of the PSA? Why? Please someone explain this to me. What other limitations am I up against?
    The best defense I’ve seen for my case is that when the note is sold as a security…the NOTE IS GONE. It no longer exists and should have been destroyed. Therefore, the Plaintiff producing a note is either a forgery, or it wasn’t destroyed as it should have been.
    All the fraud attached to the transfer is not accepted. Judge says all he needs is the note to foreclose (judicial foreclosure in non judicial state, MERS all over it, robosigned, and robo stamped notary) and doesn’t need to prove standing at all. Also, the note and deed cannot be bifurcated, so with the note being sole to investors, it creates a separation. Once a note is a security, it cannot be switched out and made into a note again.

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  108. Pingback: Part 2 – How to Challenge an Assignment of Mortgage | Deadly Clear

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  111. I’m in California but this really helps. I tried to refinance with two banks they refuse to help. I’m dealing with BofA who took over my Country Wide loan. BofA gave me a Note, dated 5/26/2006 and a Deed of Trust, dated 6/5/2013. We moved into our house on 12/2005. Where can I get this information? They had threatened to foreclosed but in 2013 got an attorney who did an audit on the loan documents (no longer have her). The loan docs have an inflated loan.

    I had a second and that bank sent me a Home Equity Agreement (Deed of Trust) dated of 12/09/2005 and the Note 5/25/2006…a little late correct?
    Your help is appreciated.
    Thanks.

    • I am in Texas they a lot of information about Equity Loans being part of the Texas State Constitution not sure about your state, here is a web site that’s has a lot of information look for your state everything you are going through someone including me have been their: http://www.msfraud.org/ don’t give up

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