Looks like banks may have painted themselves into a corner re: no mortgage ownership.

[dixiegrrrrl]

A recent post on this forum
Banks Lose Pivotal Massachusetts Foreclosure Case
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x85348

reported that
"US Bancorp and Wells Fargo & Co. lost a foreclosure case in Massachusetts’s highest court that will guide lower courts in that state and may influence others in the clash between bank practices and state real estate law."

Here is why ALL the Big Banks, ( not JUST the above banks) may be in big trouble on foreclosures and mortgages in general:

They all bought the original mortgages from by now defunct mortgage companies
( BOA bought up the bankrupt Countrywide, for instance)
or
from defunct other banks ( US Bank and Wells Fargo bought up the defunct Lehman Bros.
J.P. Morgan bought WaMu)

And HERE is the problem:

The mortgages were never transferred from the by now originating defunct/dead companies.
and the Court called them on it.
AND the banks cannot go back and get the mortgages. Too many dead companies between the original sale and now.

Here is recent article that is a delight to read, towards the bottom, of a conversation between the bank and the last company left alive about trying to get a mortgage.

http://www.cnbc.com/id/40999895/page/2/comid/3/

[Xipe Totec]

1. Hilarious. nt

[kestrel91316]

2. I know somebody who easily got a foreclosure wiped off their credit record years ago because the

original note holder had been bought up, and a name change, then THEY got bought up, and name changed, and it was such a tangled mess the CRA couldn't verify it, had no way to contact the mortgage company that foreclosed.

[tridim]

3. That's what happened to me.

Chase never transferred my mortgage from WaMu, because they never paid WaMu for it. No matter, Chase's investor (in a product they didn't own) took my house in November. It's already done.

[dixiegrrrrl]

4. The sad thing is if you can't afford to fight the fraud, you lose.

[tridim]

5. Yep, lawyer said exactly that.

[dixiegrrrrl]

6. Just found this interesting comment from a financial site.

"What separates developed, legitimate free countries from banana boat republics is the legitimacy of property.
The bankers have served to destroy the foundation of property in the US and have committed what amounts to defacto treason. The destruction of the records of the various states of the US amount to the waging of economic war for personal gain."

[dkf]

7. Does that put the Fed's, Aka our, mortgage backed bonds in jeopardy?

[dixiegrrrrl]

10. Might be. If the Fed wanted to contest the bonds.

So far the Fed has happily bought all the garbage bonds from the bank and stuffed then into Fannie and Freddie.
Illegally, btw...
Fed has been giving the banks everything they wanted for the last few years.

Now, the huge and many pension funds that own bonds...that may be another story, as the states try to get their money back from the banks.

[dkf]

14. Makes you wonder what our exposure is.

We don't have a sovereign fund...instead we have the Fed who invests in bonds and Govt bailouts.

[spin]

8. Does this mean that you might end up owning a house ...

because possession is 9/10ths of the law?

[tridim]

9. No, the banks will still steal the houses.

Our legal system makes sure that justice isn't an option unless you can outspend the bank's legal department.

[littlewolf]

11. I read somewhere here on DU that if

the bank tried to foreclose ... ask them for a copy of the original promissory note
otherwise it is fraud ....

[no_hypocrisy]

12. Where do you think all those documents are? Wouldn't they be in a warehouse

or someplace secure? For example if WaMu didn't physically transfer its mortgages to J.P. Morgan, and WaMu doesn't exist anymore, wouldn't J.P. Morgan also own the repository where WaMu housed those documents?

[dixiegrrrrl]

15. Various news stories over the months have reported:

notes are in a warehouse in some foreign country
notes have been destroyed ( by whom, exactly, along the trail, is not clear).
There was a news item that Countrywide ex-employee admitted all notes were destroyed.

The thing is, the big banks which created the Mortgage Bond Security trusts, by law had 90 days to put the mortgage notes IN the trusts. That is a Federal rule, for tax purposes. ORIGINAL mortgages, mind you, not copies, not assignments, not vouchers, but original notes. The one YOU as a homeowner also are supposed to have in your possession, and the bank has one. With YOUR wet ink signature on it.

91 days is too late. Too late, not retroactive, etc.
Which then means the trusts are not legal, and they owe a whole bunch of tax money to the Treasury.

Which means the investors of the trust ( like insurance companies and pension funds and etc)
now have NO legal rights to the money that is supposed to be paid to them on the bonds THEY paid for.
They are yelling fraud and demanding the banks give them back the money.

Now, for a long time, there have been reports, since verified, that lack of a mortgage note allowed the banks to sell the SAME mortgages into 2 or more trusts!
And/or to set up more trusts than there were notes.
AND set up those damn derivatives based on the fraudulent notes.

So, this is why the banks went into forgery and robo-signing documents when they had to foreclose, because the original docs were not available or did not exist anymore.

The beans got spilled when more than one bank foreclosed on a house, and when banks foreclosed on houses that had NO mortgages on them, clearly pointing to the fact the banks had no real proof of ownership.
( Thanks to Zero Hedge and 4closure Fraud dot com for breaking the stories that eventually got picked up by MSM)

So while the banks are claiming they own the past debts ( mortgages) of the banks they bought,they cannot prove it. Which shows they have no idea where the original notes are.

( Hope that was not too confusing)

[jtuck004]

16. There are public records of banks burning and throwing out these

documents since the titles were assumed transferred and the mortgage was bought. They felt there was no duty to hang on to paperwork they no longer were being paid to store.

[damntexdem]

13. They bought shit and have shit to show for it.

But "they're too big to fail," so the Fed Gov will bail.

[upi402]

17. Can we pre-empitively demand they produce the note?

Or do we wait until it all hits the fan and then roll dice?

[dixiegrrrrl]

18. Well, I have conflictnig thoughts about that.

there have been a lot of demands to see the notes, so much so that the Banker's Association actually put out a position paper about it ( making it all sound like note demands were silly, of course).
And apparently there are commerce laws that determine the bank's timely response.

On the other hand, I have read stories that people triggered foreclosures by demanding to see the note.

I suspect the result depends whether you live in a judicial or non-judicial state.
In a judicial state, courts can get involved, and people have successfully gone to court around lack of a note.

Let's say you do demand a note.
What do you do after that?
You almost have to be ready to get a lawyer, go to court, file what is called a "quiet claim"
(not a "quit" claim).
If you google "quiet claim" and "demand mortgage note" lots of helpful info comes up.

OTOH, since I KNOW that BOA ( my servicer, after they bought Countrywide) does not have the note,
and I live in a non-judicial state, I am curious as to what will happen when I pay off the mortgage and how
BOA can convince the County the mortgage is paid off since they cannot send the note to be recorded as paid.
so, for me, I am waiting to see how this shakes out.
Altho technically, I do not "owe" BOA, the non-note holder, any money.

[upi402]

20. Uniform Commercial Code 3-501 says;

"(2) Upon demand of the person to whom presentment is made, the person making presentment must (i) exhibit the instrument, (ii) give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so, and (iii) sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made. "

But I can't recall if I signed away my right to have rights -or draw breath- in some TILA waiver or whatever.

The poster on Troubleman's link is an attorney, and I'm not. Not rich either. The link gives hope though, and good info.
UCC 3-309 lets them prove a note if they lost it. Maybe Elizabeth Warren's CFPB can help. Here's their mission;

*
Implementing and enforcing Federal consumer financial laws;
*
Reviewing business practices to ensure that financial services providers are following the law;
*
Monitoring the marketplace and taking appropriate action to make sure markets work as transparently as they can for consumers; and
*
Establishing a toll-free consumer hotline and website for complaints and questions about consumer financial products and services.

I think the hotline might be worth a try, if/when it's up and running.

[TroubleMan]

19. Yes you can.

Check this out:

http://4closurefraud.org/2009/10/25/i-am-an-attorney-so-i-decided-to-sue-my-lender/

The judge didn't agree in this case, but this was before all of the foreclosure fraud was widely known. The guy has a great point: If you can't prove to me that you are the person I should be paying for my mortgage and you can't guarantee I'll get a clean note, then why should I be paying you?

[dixiegrrrrl]

21. Unfortunately, Ala. Legislature changed state laws this spring,

vewy vewy quietly, if I read correctly, so now by law courts have to accept whatever the banks give them as "proof".

It is coming down to which states are willing to uphold property rights.

Some states do, some don't, some courts do, some don't.

What a mess.