EARTHQUAKE: "SJC ruling may void thousands of foreclosures" (!!!!! READ THIS !!!!)

[WilliamPitt]

...this was a Land Court decision, and it could very well effect the entire national discussion regarding foreclosures across the whole country. The phrase you want to remember is "Promissory Notes"...someone has to have the original Note, and that Note must go with the mortgage...so when this article talks about "without having all the paperwork in place at the time a home is seized," THAT is what this decision addresses.

This is how they fucked people...and the Massachusetts Land Court/SJC just MAYBE sent the rock rolling down the hill. As an expert I know says, "They didn't have the paperwork. They didn't have the Note. You can't secure the mortgage without the Note."

Stay tuned...this could BLOW THE WHOLE FUCKING SCAM sky-fucking-high. Watch and see if the Banks involved with this bullshit take a BEATING on Monday. This has been their dirty little secret all along. They never had the paperwork.

The original decision can be found at the link below:

SJC ruling may void thousands of foreclosures
By Jenifer B. McKim, Globe Staff

The Massachusetts Supreme Judicial Court today upheld a contentious land court ruling that puts in question the ownership of hundreds, possibly thousands, of foreclosed properties in the state.

The ruling challenges the way lenders have traditionally foreclosed on properties -- without having all the paperwork in place at the time a home is seized. It affirms a 2009 lower court decision that invalidated foreclosures on two Springfield homes because the lenders did not hold clear titles to the properties.

Cambridge attorney Paul Collier, who represented one of the homeowners in the case, said the supreme court ruling invalidates thousands of foreclosures, reverting ownership back to the homeowners who lost the homes, at least temporarily. In most cases, those property takings will have to be redone, further clogging an already bogged down foreclosure process that many real estate specialists say has contributed to the stagnant housing market. "The banks and the investors are going to have to deal with those homeowners as to what happens to those properties," Collier said.

During the housing boom, millions of mortgages were packaged into bonds and sold to investors, a process that resulted in lengthy and tangled paper trails that can obscure ownership. Many lenders believed they could complete foreclosure transactions and later produce formal proof they held a mortgage. Today's ruling makes it clear that the practice will not be allowed in Massachusetts.

The rest: http://www.boston.com/business/ticker/2011/01/sjc_ruling_may.html?p1=News_links

...this goes back to English Common Law...and the MA SJC just tore the lid off...stay tuned...

[hlthe2b]

1. Mixed blessing, truly... It will likewise further devastate housing market...

No one is going to want to buy those foreclosed properties, for fear that this may come back to bite them--in a very big way.

That said, there are some honest, deserving, deceived home-owners, who should get some just relief. For that I am glad.

[WinkyDink]

8. The "foreclosed properties" will NOT be in the "foreclosed" state.

[hlthe2b]

17. The problem is all the foreclosed homes that have already sold

Some of those buyers will get caught up in a legal nightmare.

[Xithras]

23. Hopefully they bought title insurance.

If they have title insurance, they'll lose their homes, but at least they'll get their money back.

If they didn't get title insurance...they just lose.

[BrightKnight]

30. I don't think that title insurance will pay your legal costs and the other costs would sink me.

It should not be legal to structure policies that way but I believe that they do.

Also you will have all to pay closing costs a second time (including title insurance.) You will also have temporary housing, storage, house hunting and moving costs. You will have to apply for credit again and perhaps you will not qualify...

I am just a working grunt. Something like that would probably sink me.

[bluestate10]

24. Most likely Banks will get hammered on this one.

The new home owners are likely protected. Banks are exposed, they will have to make right expenses and other financial detriments that foreclosed former homeowners endured.

[molly77]

38. This is the type of nightmare that comes with deregulation

Deregulation is a euphemism for no laws for corporations and banks. The problem can never be corrected unless the US govt. has to face just exactly what it has done to it's citizens.Deregulation came with the repeal of Glass-Stegall. Clinton was president. The House and Senate were Republican. Larry Summers helped in a very big way to orchestrate it. So , maybe Obama will clean up the mess that was made with that bipartisan effort to shut down America.And maybe the clintons will finally be appreciated for the destruction that they have brought to the US.

[northernlights]

9. on the other hand, homes with clear titles

such as mine, which I bought cash 7 years ago from people who owned it for 18 years, may regain some of their true value.

There will still be houses that can be purchased. This just could take a lot of houses off the market, which for some of us would not be a bad thing at all. :)

[soryang]

40. Right, a two tiered market n/t

[molly77]

12. Thank God. I hate to see people lose their homes

because banking went over to the dark side.

Thanks for the post.

[EFerrari]

2. I don't think it will and this is why.

The feds farmed foreclosure gate out to state AGs who have limited jurisdiction and no resources to mount a significant prosecution. Yesterday, the 50 states AGs group announced they wouldn't even be seeking criminal charges, but only reform.

My mom lost a small building this way. It was a total rip off and since she can't afford to hire a lawyer, there was nada she could do about it. That was her retirement money. The lender strung out the re-mod until they ran out the clock. Without a lawyer, no way to push back. Voila.

[Senator]

13. FWIW

I'm not sure your mother's situation is such a "done deal" yet. Though the AGs aren't going criminal (like they said), they may yet exact a settlement fund to pay damages to people in your mother's situation. Particularly because the "parallel track" scam she endured is so clearly a fraud and is the kind of thing a class action suit could develop over, even years from now.

Something else I ran across that you might be interested in is at the following link. I'm not recommending it, but it seems there'd be no risk to just calling and seeing what they had to say about her story:

https://sites.google.com/site/sueyourlendernow/home

---------

[EFerrari]

18. Thank you, Senator.

:hi:

[xiamiam]

14. strung out the loan mod...they've been doing this for over a year and now

they are about to pull the trigger..on tens of millions of people..wait and see..this might slow them down a bit

[EFerrari]

19. I hope it does. So far, they've been able to do anything with impunity.

That's how messed up this country is. You can be foreclosed on by financial institutions that don't even need to show their paper. Disgusting.

[bluestate10]

25. I hope.

The ruling break the Banks backs and force them into a process of serious negotiations and meaningful loan modifications with homeowners that are facing foreclosure.

[BrightKnight]

3. It would make me think twice about buying a foreclosure house.

Would a title search find this and would title insurance cover it? I'm a working grunt and can't afford to hire legal help to defend against something like that. Somebody is not doing their job.

[Frustratedlady]

5. Hey, my son sold his house and had trouble closing because of BOA

They are STILL saying he owes them a year's payments (which he doesn't) and put the burden of proof on his because they don't have his payments in their records. He's gone back several years and they keep moving the date when payments weren't made.

He wasn't even in foreclosure or had any problems until he tried to close. He has filed with the state's AG, as they are trying to foreclose on a house that has been sold over 6 months ago. They just can't find his paperwork.

It isn't just foreclosed houses, it's also houses that were sold normally and with no problems until BOA couldn't find the records.

[madrchsod]

4. my saving and loan bank do not sell mortgages to second parties.

they also do not foreclose they repossess

[goforit]

6. Next to the Guilletine for loan sharks, this is sweet music.

[WilliamPitt]

7. Kick

[Imperialism Inc.]

10. I always check nakedcapitalism.com for commentary on this kind of thing.

Yves has been blogging about the foreclosure mess for a long time and she often has knowledgeable commenters who work in the industry.

http://www.nakedcapitalism.com/2011/01/mass-supreme-court-rules-against-wells-fargo-deutsche-case-on-validity-of-mortgage-transfers-in-securitizations.html

[EFerrari]

11. Real earthquake, Silicon Valley, 4.10 @ Safeway.

lol

Man, I'm so glad I wasn't in the produce department.

[JDPriestly]

20. 4.10???? That's not worth writing home about.

[janet118]

15. I live in Mass. and about a year ago . . .

this woman who had purchased a mortgage through Countrywide called the law office I work at to ask for help. She and her partner were being threatened with foreclosure. The attorney I work for asked her a bunch of questions, but said that there wasn't much he could do in her case.

Later that day, I spoke with a friend of the woman who called. She asked me what I thought. I told her that I had read some stories (on DU) about people who were advising those in danger of foreclosure stay in their homes and demand that their mortgage holder show that they hold legal title to the property. I don't know how the woman's situation turned out, but because this ruling is retroactive, she may be able to get some relief anyway.

Who knew that the courts would be the place where the banker crooks might finally be held accountable? I love the Mass. SJC!!!

[bluestate10]

26. I live in Mass too.

I have no dog in the fight, but this ruling does me proud. My state is and always will be at the forefront of important change.

[avaistheone1]

16. Massachusetts leads the way again!!!

I just hope this turns things around for those who lost there homes or who are in jeopardy of losing their homes.

I want to be hopeful on this.

:kick:

[Lucinda]

21. I've been reading about these title-less problems for a while now

I've been following web chatter about the huge problem BOA is having with the bundled loans acquired from Countrywide. Some people online are advising that anyone fighting with BOA about foreclosure might try filing bankruptcy in an effort to hang on to their homes since foreclosure judges have been letting banks slide regarding actual possession of the title. Hopefully this will set a good precedent for other states.

[Xithras]

22. Ouch. This could be devastating for people who've bought in the last few years.

Imagine buying a home, living in it for a couple of years, making your mortgage payments, maybe renovating a room or two, and otherwise making it yours.

Then, one day, someone knocks on your front door and hands you an eviction notice. Why? Because the guy you bought it from flipped a bargain basement bank repo, and that repo was just ruled invalid.

Yikes.

[bluestate10]

27. I doubt it.

The sufferers will be Banks, their bondholders and their shareholders.

[BrightKnight]

29. Property value and I would not want to have to rely title insurance to save my home.

Your assertion does not make me sleep any easier. Also, I do not see this pushing my property value anywhere but down.

I do not trust my mortgage company at all. Anything that might make them play by the rules is a good thing as long as I don't get thrown out with the bath water.

[BigBearJohn]

28. How much you wanna bet some law will be passed in favor of the banks?

[snappyturtle]

32. Yep. I can almost smell it coming. nt

[spin]

39. Of course. The banks are too big to fail ...

we are just "little people".

[sabrina 1]

31. This not the first such ruling.

And no, it won't blow the roof off this scam. We thought the others would also, but they didn't.

It won't mean much to the average person being foreclosed on as we found out when my friend was, illegally, foreclosed on by Wells Fargo.

First, you have to be able to afford lawyers. And most people in foreclosure do not have the money for lawyers. Second, the judge, if there is a judge, as some states do not require foreclosures to go to court, has to pay attention to the request for documentation. In my friend's case, she asked for the 'note'. Her request was ignored both by the judge and the Wells Fargo attorneys.

This is the secret that is not understood. Americans have very little legal recourse in civil matters.

In fact, THAT is another scandal. The lack of legal representation for ordinary people here, is at third world levels. I have written an OP about this in the past.

I am happy with this ruling, as I was about the others, but this ruling was possible because the victims were able to afford representation.

Tomorrow and the next day, people will be illegally foreclosed on as if this ruling never happened.

What is necessary is a Federal Investigation of the scam, plus laws passed by Congress making it impossible for Banks to even begin a foreclosure without the proper paperwork. Until then, nothing much will change.

And Congress is not about to do this. The Banks will not allow it.

[DinahMoeHum]

33. "Produce the note...(clap clap)...Produce the note...(clap clap)..."

3 little words that should be the mantra for all those facing foreclosure, justified or not.

Pass the popcorn.

:popcorn:

[marmar]

34. I suspect U.S. Supreme Court Inc. will take care of this little insurrection.

nt

[soryang]

41. SCOTUS doesn't have jurisdiction

Land law is state law, period.

This is why federal legislation trying to save the bankers is going to have a rough go. It's a state law issue and always has been.

[watstearns]

35. Why They Didn't Present the Notes

The commenting on Naked Capitalism on this development was quite interesting. It was the opinion of some professional-sounding participants that the reason the banks bring shoddy paperwork to the judicial show is that they have multiplexed the mortgage backed securities, i.e. sold the same mortgage multiple times within securities. They're caught between a rock and a hard place -- if they provide the definitive paperwork, they will also provide evidence of their mortgage fraud. So they are punting, going into court hoping that the judges will assume that the affirmations in their filings are professional and correct without actually checking. But of course, they are stealing people's homes, and when that happens, the defendants are desperate and willing to question the most seemingly unassailable assumptions. And they struck gold! Freakin' bankers are such greedy, arrogant a-holes. It's too much to hope that there will be mass release of first-time nonviolent drug offenders from prison to make room for all these cheating shitheads, but I wish that's what would happen.

[hayu_lol]

36. There will be large groups of attorneys who will go into this mess...

and make a very good living over the next few years...at the expense, ultimately, of these crooked banks/lenders.

Rightfully so.

[soryang]

42. Multiple recoveries disfavored, notes missing, not endorsed...

...not held by servicer, not owned by servicer, fraudulent assertions in the pleadings by petitioner for foreclosure, pleadings not signed by attorney for petitioner, etc., equals dismissal of the case without prejudice to rightful party in interest.

It is difficult to rehabilitate a defective chain of endorsements to the rightful party after the fact.

Naked Capitalism is a good resource.

[soryang]

43. dupe deleted

[mmonk]

37. Whomever holds the note on the secondary market is the true note holder.

It's like the loan originators are trying to get two sales out of one note.