Holy Shit !!! - Deposition: Countrywide Never Sent Mortgage Notes to Trust - FDL

[WillyT]

Deposition: Countrywide Never Sent Mortgage Notes to Trust; Mortgage-Backed Securities in Question
By: David Dayen - FDL
Sunday November 21, 2010 12:01 pm

<snip>

Christine at Foreclosure Industry gives her 10 reasons why the MERS problem cannot be fixed by legislation, and it’s a pretty good list. I would add that it’s simply not the only problem, or even the biggest problem, that the banks have. Of far bigger importance is the possibility that the trustees for the mortgage-backed securities they created never secured the assets from the originators. If the notes never transferred to the trust, there’s no way to retroactively do that now; the trusts are governed by very specific pooling at servicing agreements that for the most part give the trust 90 days to transfer all the required assets. You cannot transfer the loan after it’s slipped into default, 3 or 4 years after setting up the trust. It violates the laws and contracts under which the investors purchased the securities.

Now we have documented evidence, beyond anecdote, that Countrywide, one of the largest subprime lenders, which securitized almost all of the loans they made, never sent the notes to the trust. In a deposition provided to a US Bankruptcy Court in the District of New Jersey, Linda DeMartini, a supervisor for Bank of America Home Loans (BofA bought Countrywide in 2008), admitted that the original notes never transferred from Countrywide into the trusts.

The new allonge was signed by Sharon Mason, Vice President of Countrywide Home Loans, Inc., in the Bankruptcy Risk Litigation Management Department. Linda DeMartini, a supervisor and operational team leader for the Litigation Management Department for BAC Home Loans Servicing L.P. (“BAC Servicing” V testified that the new allonge was prepared in anticipation of this litigation, and that it was signed several weeks before the trial by Sharon Mason.)

As to the location of the note, Ms. DeMartini testified that to her knowledge, the original note never left the possession of Countrywide, and that the original note appears to have been transferred to Countrywide’s foreclosure unit, as evidenced by internal FedEx tracking numbers. She also confirmed that the new allonge had not been attached or otherwise affixed to the note. She testified further that it was customary for Countrywide to maintain possession of the original note and related loan documents.

(An allonge is a slip of paper appended to a mortgage agreement, which gives room for signatures that function as an endorsement of the document.)

This is an enormous deal. If Countrywide never gave up possession of the note, then the trust has no standing to foreclose whatsoever. It also means that investors in the MBS don’t actually have securities backed by mortgages. The “allonge” appears to be an effort to clear up this situation, and it was signed years after the fact, well past the deadline of the pooling and servicing agreement, and not even affixed to the note as required by law.

This is a deposition from one supervisor, but it could mean that all mortgage pools that Countrywide sold are suspect. That would amount to perhaps hundreds of billions of dollars in MBS. And the law appears to be air-tight on this, and not governed by the Constitution but New York trust law and the specifics of the pooling and servicing agreement.

Now, tell me again how the banks are planning to get out of this.

<snip>

Link: http://news.firedoglake.com/2010/11/21/deposition-countrywide-never-sent-mortgage-notes-to-trust-mortgage-backed-securities-in-question/

The entire court document: http://www.scribd.com/doc/43537304/CASE-FILE-New-Jersey-Admissions-in-Testimony-Notes-Never-Sent-to-Trusts-Kemp-v-Country-Wide

:wow::banghead::wow:

:nuke:

[Ian David]

1. Our mortgage was through Country Wide who then sold it to Bank of America. n/t

[sarcasmo]

2. 49,000 left on our mortgage, hope we can pay it off and actually own it one day.

[thunder rising]

5. You gotta understand, if your mortgage was sold into the pools, nobody can give you clear title.

So many people don't understand that it's like pay the general contractor on an improvement and the contractor not paying the subs. What you paid does not count. You will not get clear title.

Just look for your mortgage on the public records of your county. If MERS shows up, welcome to the fiasco. And chances are it WILL show up.

[flvegan]

8. Wait...not get clear title?

Explain that portion to me. Like I'm 5.

[thunder rising]

15. Ok, I've written this many times.

There are two sides to this problem.

One side looks like this. You are a dead beat and trying to cheat the establishment out of their money.
(More like, you get forced into foreclosure by the malfeasance of the banks that caused the economy to collapse)

The second is, if I pay the mortgage off can I get a clean title so I can sell it?

What I found out when I wanted to renegotiate my mortgage was that nobody owned it. So, it didn't matter that I paid the SERVICER, they don't own it (and they tried to say they did). So, if your mortgage is sold into a pool, first the servicer is a servicer and not the owner; second, no single entity can clear your mortgage since the chain of ownership is faulty. And THAT is the problem that should bother you.

A lien or note must be backed by consideration (money). The originator SOLD the note into a pool and therefore does not have any consideration anymore. MERS is the nominee, but they don't have consideration. Finally, no single entity owns the note because it was spit up and all entities that have consideration must sign on to the foreclosure, but that is not possible.

I took advantage of the law in FL that says at any time in the foreclosure a homeowner can simply make up the payments and penalties and the foreclosure is ceased. I quit paying to get past the servicer, but kept the money in the bank. What showed up was that nobody could foreclose since the chain of ownership had been messed up. Do note, that I have a GOOD lawyer.

If the note was not sent to the entity that bought it then anybody can claim they have it. That's why the original is SOOOO important. Anything you pay to somebody that does not have the note is wasted money; furthermore, you will not get clear title.

Let me put it this way. The servicer may send you a letter and you may have a party and feel good, but no Title Insurer will touch it when you go to sell; and so, no smart buyer will either.

[flvegan]

28. Hmmm...well, I'm a title underwriter

and *part* of what you say is true. The reality is, if you pay your mortgage payments to whomever sends your monthly notice to you to the point where you pay your mortgage off, you get a Satisfaction of Mortgage recorded and that Satisfaction is in line with what is of the public records, you will have marketable title, which is more than clear enough to be insured. So long as no adverse claims arise in the process.

I will credit you the "good lawyer" comment. You do indeed, it appears. Glad you kept the money in the bank...sort of an escrow.

[sarcasmo]

18. Then why should I continue to pay if I will not get a clear title?

[thunder rising]

20. Bingo! Soon I will have not paid for two years. But first, get a lawyer and understand the laws of

yours state.

In FL, the homeowner has title and the mortgage is a lien on the title. So, when all else fails, the person with title gets the property. If nobody can show ownership of a mortgage (lien), then one, your wasting money paying it. Two, you will not get clear title if you do.

[geckosfeet]

25. Get a lawyer. You could own the place free and clear if the bank doesn't have the papwerwork.

[thunder rising]

26. Be aware, that although I am not paying and they can't throw me out, I cannot sell my house.

I don't have clear title.

[flvegan]

33. Quiet Title action, plus 2 years and you're set.

[thunder rising]

34. I was thinking 7 years and adverse possession. To make it adverse I'm going to stand outside their

office windows and moon them.

[flvegan]

36. That's like...super adverse.

Most folks just pay the taxes, but I like your style.

[geckosfeet]

42. Posession ins nine tenth of the law. Get a lawyer. Estabilsh ownership. You get a title.

[howaboutme]

7. Make every effort possible

to pay your mortgage off and keep the banker thieves at bay. Then you only need to worry about property taxes and keeping the sheriff at bay.

The establishment thrives on taking and profiting even though their efforts are unethical and illegal. The deck is stacked against average Americans unless they can stay out of debt, and that is becoming more difficult as the wealthy and bankers spend every moment conniving and being rewarded for every illegal action.

The financiers that run our government were able to avoid a major culture changing recession that could have actually improved America in the long term, by making us much more frugal and less willing to consume and use credit. "Shop till you drop" may still be an intact American phenomenon because the bankers and media that pull our strings prefer that to a spend only what you must philosophy.

[thunder rising]

16. No way. You challenge the banks to prove they have the note. Paying a servicer is foolish.

It is now time to understand that the chain of ownership of MOST mortgages are flawed. Paying a servicer is wasted money.

[howaboutme]

30. You have a point

My point was not directed to those that are in default and have claims against the chain of ownership of the securitized mortgages or against servicers that are proceeding with foreclosure.

My point was a general recommendation for every home owner to sacrifice as much as possible and pay off their mortgage, especially if it is at a manageable level of $49K. I paid mine off some years ago. The thieves came knocking at my door wanting me to take out a second mortgage and invest the proceeds. They like having people indebted and beholden. It isn't easy to avoid but indebtedness means a form of subservience. Too bad for us that the USA govt. never understood that before we became indebted to China.

[thunder rising]

35. The problem is that even at $49K the mortgage may have been pooled and hence tainted.

Just because you have had a mortgage for years does not automatically exclude you from the fray.

[Gaedel]

51. Unlike you......

The federal government has their loans denominated in dollars and as a general obligation. They own the printing press and any time China wants to foreclose it only takes a couple of days to give them a few stacks of $10,000 bills.

US versus China is in the position of:

If you owe the bank ten thousand dollars, you worry.
If you owe the bank ten million dollars, they worry.

[taught_me_patience]

37. Insane advice and I urge DUers to ignore this. n/t

[geckosfeet]

27. Bullshit. As mentioned earlier - even after you 'pay it off' the bank can't give you

the title because they don't own the mortgage. Then you are really screwed.

GET A LAWYER. Possession is nine tenths. If the bank can't show they own the mortgage you can start proceedings to establish ownership and get the bank off your back.

[howaboutme]

32. Agree

If the bank can't prove they own it then they don't deserve to be paid. But I would have a competent attorney backing me up. No one wants to go from being up to date on a mortgage to facing foreclosure without having legal facts.

It is frustrating that these banks are given the presumption of ownership without legal evidence. It used to be that mortgages were held in-house at local bank or S&L and this was never an issue. When I paid mine off I received the deed stamped along with notarized mortgage satisfaction papers that were then recorded at local courthouse.

[geckosfeet]

41. Of course. Cheaper to pay a lawyer to unravel the legal mumbo jumbo

than paying a full 30 year loan, interest and all, to someone who does not deserve it.

It will be interesting to see if mortgage reclamation becomes a legal cottage industry.

[thunder rising]

3. "not governed by the Constitution but New York trust law". Glad to see we have something other than

the Constitution to stand on. It's been pretty soft ground lately.

[TransitJohn]

4. I have no doubt Congress will step in and conveniently legalize this.

Gotta keep the house of cards propped up.

[howaboutme]

10. Obama could have done much to appease the fairness issue

and helped re-elect Democrats up for election by going AGGRESSIVELY after ill gotten gains and absurd compensation levels and obvious illegal actions of every bankster on Wall Street. It wasn't as though he didn't have the political capital available to make it stick.

Instead all we heard was saber rattling and silence. This only illustrates that it is tough to bite the hand that feeds you. I've already gone Independent.

[Poll_Blind]

13. If this is retroactively made legal, and I think there is a chance it might actually be, then....

...I would probably be looking for the door. That would send the strongest signal I think I've ever seen, politically, that the country is really owned by corporate interests. I can't dismiss the possibility as insane and the fact that I can't is, in itself, almost as troubling as the thought of such legislation.

PB

[thunder rising]

19. "looking for the door"? What door? I'm a natural born American I have nowhere to go.

I'm here through thick and thin.

[thunder rising]

17. Watch them eat their own as they decide who gets what mortgage. Popcorn?

[flyarm]

40. I don't believe they can. I think that is what this article is pointing out. eom

[DeSwiss]

6. K&R

Wesley Snipes serves 3 years for taxes;
no jail for AIG or Countrywide execs.
White men can't jump, but they can walk
if they're ballin'.
3:42 PM Nov 19th via web

http://twitter.com/ComedyTweeter

[me b zola]

9. K&R

[flvegan]

11. The question is: who physically has possession of the Note?

It doesn't really matter that Countrywide never gave up possession. Anyone authorized to sign on behalf of Countrywide's current interest can still convey the Note (and record an Assignment) into whomever is initiating the foreclosure. What matters is where specifically the Note is. Lost? Destroyed? That's where the rub will be.

And as an addendum to that post, if folks think they have a stance against a foreclosure because of a lost or misassigned Note, please, by all means file an Answer and raise the defense. "in res judicata" is starting to go a long way here in Florida.

[thunder rising]

21. Agreed! GET A LAWYER. DON'T THINK YOU CAN DO THIS YOURSELF! And file an answer.

If you default, you are hosed. 'nuf said.

[marmar]

12. And this criminal remains at large

[Raster]

44. He looks like a spider is in the process of sucking him dry.

And I see he uses the same spray tan shade as Boner: Orange Dick.

[ORDagnabbit]

14. color me confused but if countrywide kept the note then they can foreclose on the property right?

[thunder rising]

22. But Counrywide does not exist and they shredded a whole lot of notes on the way down.

[Gin]

23. question....I had Countrywide and now BOA...have equity...not in

foreclosure but I am thinking of selling...I found my info on MERS...so what does that mean to me?

[Blackhatjack]

24. How did you find your info on MERS? Is there a website? n/t

[thunder rising]

31. Go to the online Public Records for your county and search on your name and/or parcel number

make sure the every "from" has a "to" and they line up.

Second, if MERS shows up as a "to", welcome to the fiasco!

[gkhouston]

53. Thank you! n/t

[Gin]

43. saw it on DU a few weeks ago....saved my info....this is the address

https://www.mers-servicerid.org/sis/

I put my address in and waalaa found my loan.

[dodger501]

45. What does this mean?

https://www.mers-servicerid.org/sis/search

I went to that site, when I entered my address, nothing found.
Then did it by name and SSN and this popped up:

MIN:xxxxxxxx-xxxxxxxxxx-2 Note Date:04/07/2003 MIN Status:Active
Servicer: BAC Home Loans Servicing, LP Phone:[phone]
Simi Valley, CA
Investor: Fannie Mae Phone:[phone]
Washington, DC

What exactly is that saying?

[Gin]

46. mine was the same....don't know what it means to me or you

[thunder rising]

29. If you can find a buyer then sell; fast. Soon MERS will be a curse that no title insurer will touch.

In all fairness if you do find a buyer and not mention the necessity of title insurance, you become a piranha as well.

[Octafish]

38. Jubilee!

Banks not my problem.

[bluedigger]

39. Fuck it! I'm buying an RV to live in.

Used car salesmen are more reputable...:banghead:

[madmax]

47. You're comment would have made me lol

if it weren't a tragedy for so many hard working people whose lives are now in such turmoil.

:wtf: happened to this country? No one is protecting the public from predators of the worst kind.

[bluedigger]

48. But you see, I wasn't joking.

I'm homeless, and I went to look at an RV today. I don't see any reason to buy a home until they sort this shit out. I think it will be two more years, at least...

[madmax]

49. I'm so very sorry blue

what the hell! The middle class and lower income families are being screwed. As if, that needs to be said to you or all of DU.

I, like many others are only a paycheck away from the same fate. I wish you well :hug:

[bluedigger]

50. S'all good, madmax!

I was living frugally prior to my layoff and have some savings. I'm just adrift in this great country until I settle somewhere. I realized while driving around, especially in the SW, that there are a LOT of people who are now living in RV parks, some by choice, but I'm sure a lot more by necessity... For me, it would be semi-practical.

Still, it would be nice to put a down payment on a house, but with the current chaos in the housing market, I just don't trust it.:shrug: When you consider that the labor market, while bad, is stable, and house sales are dropping, it looks like I am not alone in my feelings...

[madmax]

52. In your travels if you ever

find yourself in NC, please PM me. You're welcome to share a meal or two. It's nice, I'm not real familiar with the job market. mr.max is a furniture salesman. Been doing that for 27 years, but, with the economy the way it is for most people - furntire is at the bottom of the priority list.

Don't forget you've got friends in Apex.