Perils of Pooling

Perils of Pooling

By Daniel Edstrom
DTC Systems, Inc.

The following article was posted by Neil F. Garfield of livinglies.wordpress.com and comes from the following URL: http://livinglies.wordpress.com/2013/07/30/perils-of-pooling/

Perils of Pooling

Posted on July 30, 2013 by Neil Garfield

We hold these truths to be self evident: that Chase never acquired any loans from Washington Mutual and that Bank of America never acquired any loans from Countrywide. A review of the merger documents approved by the FDIC reveals that neither Chase nor Bank of America wanted to assume any liabilities in connection with the lending operations of Washington Mutual or Countrywide, respectively. The loans were expressly left out of the agreement which is available for everyone to see on the FDIC website in the reading room.

Continue reading “Perils of Pooling”

Failure to Allege Lack of Default

Failure to Allege Lack of Default

By Daniel Edstrom
DTC Systems, Inc.

One of the main reasons many cases do not make it to daylight is because of the failure to allege lack of default. Despite many lawyers knowing that this is the case, and that there is no default, many still fail to make the allegation. On what basis can a lawyer allege lack of default for a homeowner facing foreclosure?

The Note and Security Instrument

The note is not the obligation but evidence of the obligation (for proof of this, in many cases the security instrument refers to the note as the evidence of the obligation). Lawyers usually describe the obligation arising when one party accepts money from another party. The note usually describes who the parties are that are obligated in the section titled OBLIGATIONS OF PERSONS UNDER THIS NOTE. This section of the note states:

If more than one person signs this Note, each person is fully and personally obligated to keep all of the promises made in this Note, including the promise to pay the full amount owed. Any person who is a guarantor, surety or endorser of this Note is also obligated to do these things. Any person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this note, is also obligated to keep all of the promises made in this Note. The Note Holder may enforce its rights under this Note against each person individually or against all of us together. This means that any one of us may be required to pay all of the amounts owed under this Note.

Continue reading “Failure to Allege Lack of Default”

You Know You Are Going To Lose When …

You Know You Are Going To Lose When …

By Daniel Edstrom
DTC Systems, Inc.

Posted by Neil F. Garfield on livinglies.wordpress.com on 3/31/2012 (http://livinglies.wordpress.com/2012/03/31/you-know-you-are-losing-when/). Study this until you have it committed items 1 through 10 to memory.

Taking a line from Jeff Foxworthy, I have compiled the following guidelines of how to know when you are going to lose against the thieving bank seeking to steal your property. You might call it, “You know your screwed when…”

Note: The premise of this article is taken from various points made on this blog and others. The main point is that the obligation to repay the loan arose when the money transaction took place. When money exchanged hands it is presumed that the expectation was that it would be repaid. So the only defenses that exist and the only two defenses that will get the judge’s attention are PAYMENT and WAIVER. Failing to address these issues head on right at the beginning of the first pleading and the first hearing, will most likely lead to failure in the case. Read the appellate decisions that are in favor of the banks and servicers; they all start with a recitation of “facts” that are not true but which nonetheless are taken as true because the borrower failed to put them in issue as contested facts.

Start with the origination documents. If you don’t know whether they have merely reproduced the note and mortgage, then deny it and make them prove it. They could be fabricated from whole cloth. Continue reading “You Know You Are Going To Lose When …”

Legal Standing At Inception

Legal Standing At Inception

By Daniel Edstrom
DTC Systems, Inc.

No I am not an attorney and no I am not providing legal advice. This is the name of an article I just read posted on Neil Garfield’s LivingLies blog. The article is from Mark Stopa, an attorney in Florida. Read this article first and then come back and read my comments below: http://livinglies.wordpress.com/2011/12/19/legal-standing-at-inception/

When I saw the title, I thought awesome, they will go back to the origination of the loan. But they went back to the time the judicial foreclosure case was filed. This is a good argument and it should be fairly straight forward, or at least as straight forward as anything can be in a legal proceeding. What I was looking for was what I heard this last week from somebody. They went to bankruptcy court and told the judge that they had evidence that their loan was table funded, which means the named lender did not provide the money to fund the loan. The money to fund the loan came from an unknown and undisclosed third party. The bankruptcy judge made a simple statement. The judge said that if the named originator did not fund the loan, then they have nothing to transfer, and the movant in the motion for relief from stay (the bank) would therefore have nothing. This judge understands that the note is only evidence of the obligation, it is not the actual obligation. Transfer of the note or the security instrument (Mortgage, Deed of Trust, Security Deed or Mortgage Deed) without an interest in the obligation itself, is meaningless. That is the type of standing issue that I would like to see attorneys make in all states.

Is this why under Regulation “Z” table funded loans have the presumption of being predatory?

Interesting California Civil Codes

Interesting California Civil Codes

By Daniel Edstrom
DTC Systems, Inc.

Those who haven’t read these should read through them for educational purposes.

California Civil Code Selections

1044

Property of any kind may be transferred, except as otherwise provided by this Article.

1045

A mere possibility, not coupled with an interest, cannot be transferred.

1046

A right of reentry, or of repossession for breach of condition subsequent, can be transferred.

1047

Any person claiming title to real property in the adverse possession of another may transfer it with the same effect as if in actual possession.

1054

A grant takes effect, so as to vest the interest intended to be transferred, only upon its delivery by the grantor.

1056

A grant cannot be delivered to the grantee conditionally. Delivery to him, or to his agent as such, is necessarily absolute, and the instrument takes effect thereupon, discharged of any condition on which the delivery was made.

1057

A grant may be deposited by the grantor with a third person, to be delivered on performance of a condition, and, on delivery by the depositary, it will take effect. While in the possession of the third person, and subject to condition, it is called an escrow. Continue reading "Interesting California Civil Codes"

US Bank is not the Note Holder – North Carolina: Bass vs. US Bank

US Bank is not the Note Holder – North Carolina: Bass vs. US Bank

By Daniel Edstrom
DTC Systems, Inc.

This case is listed here without comment. The issues of endorsements, allonges, burden of proof, etc. are raised here and are very illuminating.

In the Matter of the foreclosure of a Deed of Trust executed by Tonya R. Bass in the original amount of $139,988.00 dated October 12, 2005, recorded in Book 4982, Page 86, Durham County Registry,
Substitute Trustee Services, Inc., as Substitute Trustee,

No. COA11-565.

Court of Appeals of North Carolina.

Filed: December 6, 2011.

K&L Gates, LLP, by A. Lee Hogewood III, and Brian C. Fork for Petitioner-appellant.

Legal Aid of North Carolina, Inc., by E. Maccene Brown, Gregory E. Pawlowski, John Christopher Lloyd, and Andre C. Brown, for Respondent-appellee.

ROBERT N. HUNTER, JR., Judge.

U.S. Bank, National Association, as Trustee, c/o Wells Fargo Bank, N.A. (“Petitioner”) appeals the trial court’s order dismissing foreclosure proceedings against Respondent Tonya R. Bass. Petitioner assigns error to the trial court’s determination that Petitioner is not the legal holder of a promissory note executed by Respondent and therefore lacks authorization to foreclose on Respondent’s property securing the note under a deed of trust. After careful review, we affirm.

I. Factual & Procedural Background Continue reading “US Bank is not the Note Holder – North Carolina: Bass vs. US Bank”

Wild Deeds, Assignments and ‘Dangerous Innovation’

Wild Deeds, Assignments and ‘Dangerous Innovation’

By Daniel Edstrom
DTC Systems, Inc.

As much as things change, they remain the same. Wild Deeds, Strangers to Title, Nominee’s, Agents, Evidence, etc., have always been issues in real estate transactions. Thanks to Monica Graham for finding this case. Look at this excerpt regarding “dangerous innovation” decades before the mortgage meltdown:

In the present case, we would have to assume the position of Russ and Ethyl Green in the chain of title, that the Crestmore Company had complied with the statutory provisions relating to the use of a fictitious name, and that P. H. Wierman was a member of the firm with the authority to execute an assignment of the note made payable to that firm. Such assumptions, would indeed, constitute a “dangerous innovation.”

This excerpt regards proof of the chain of title:

[6c] For the above reasons it appears that plaintiffs failed to prove a valid assignment of the note and third trust deed to them. As assignees they stand in the same position as their assignor, the Crestmore Company, and must prove their chain of title to the note in question.

This excerpt is in regards to the burden of proof in proving an assignment:

The burden of proving an assignment falls upon the party asserting rights thereunder (Read v. Buffum, supra, 79 Cal. 77 [21 P. 555, 12 Am.St.Rep. 131]; Ford v. Bushard, 116 Cal. 273 [48 P. 119]; Bovard v. Dickenson, 131 Cal. 162 [63 P. 162]; Nakagawa v. Okamoto, 164 Cal. 718 [130 P. 707]). [8] In an action by an assignee to enforce an assigned right, the evidence must not only be sufficient to establish the fact of assignment when that fact is in issue (Quan Wye v. Chin Lin Hee, 123 Cal. 185 [55 P. 783]) but the measure of sufficiency requires that the evidence of assignment be clear and positive to protect an obligor from any further claim by the primary obligee (Gustafson v. Stockton etc. R. R. Co., 132 Cal. 619 [64 P. 995]). Continue reading “Wild Deeds, Assignments and ‘Dangerous Innovation’”

The Wrong Remedy at the Wrong Time, Part 1

The Wrong Remedy at the Wrong Time, Part 1

By Daniel Edstrom
DTC Systems, Inc.

New Note added on 1/22/2012 thanks to Simonee. California Probate Code does not seem to apply based on this California Supreme Court decision: Monterey S.P. Partnership v. W. L. Bangham, Inc. (1989) 49 Cal.3d 454 , 261 Cal.Rptr. 587; 777 P.2d 623 (download here: http://dtc-systems.net/wp-content/uploads/2012/01/Monterey_SP_Partnership_vs_WL_Bangham.pdf)

Monterey S.P. Partnership v. W. L. Bangham, Inc. (1989) 49 Cal.3d 454 , 261 Cal.Rptr. 587; 777 P.2d 623

Here is a quick overview of what happens in a non-judicial foreclosure. If you are in a judicial state, this post does not apply directly to your case. But if you understand what happens in a non-judicial foreclosure, you may get insight into what might apply to your case.

I am not indicating that any of these documents are true or accurate, just that this is what typically happens.

Closing the Transaction

The homeowner executes a note and security instrument (i.e. Deed of Trust). The parties to the trust created by the Deed of Trust are the trustor (homeowner), trustee (usually a title company) and the beneficiary (either MERS or the named lender). Everyone seems to assume that the trust was constituted (created), that it is valid and continuing. This is where the trouble begins (not really, but for this article we will assume it begins here and not before).

Notice of Default

Supposedly the Notice of Default is recorded and sent to the homeowner by the agent for the beneficiary. Who is the beneficiary? Looking at my notice of default the only beneficiary mentioned is MERS. However, other documents sent usually point to one or more other parties who “might” be a beneficiary.

Continue reading “The Wrong Remedy at the Wrong Time, Part 1”