New York vs the MERS Scheme

New York vs the MERS Scheme

By Daniel Edstrom
DTC Systems, Inc.

New York Attorney General Eric T. Schneiderman filed a complaint today against JPMorgan Chase Bank, NA, Chase Home Finance, LLC, EMC Mortgage Corporation, Bank of America, NA, BAC Home Loans Servicing, LP, Wells Fargo Bank, NA, Wells Fargo Home Mortgage, Inc., MERSCORP Inc., and Mortgage Electronic Registration Systems, Inc.

Neil Garfield reports:

“The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” Continue reading “New York vs the MERS Scheme”

Securitized Total Consumer Loans Chart from the St. Louis Federal Reserve

Securitized Total Consumer Loans Chart from the St. Louis Federal Reserve

By Daniel Edstrom
DTC Systems, Inc.

The tsunami wave that will be felt for  the next 30 years minimum.   Securitization rose dramatically and has fallen even more dramatically.

From: http://research.stlouisfed.org/fred2/series/TOTALSEC

Judge Schack Hammers HSBC for False Paperwork

Judge Schack Hammers HSBC for False Paperwork

By Daniel Edstrom
DTC Systems, Inc.

Here are Neil Garfield’s comments regarding this case from LivingLies (http://livinglies.wordpress.com/2011/12/30/schack-bangs-hsbc-for-false-paperwork/):

Posted on December 30, 2011 by Neil Garfield

EDITOR’S NOTE: Plausible deniability went out the window as HSBC tried to get out of the consequences for submitting false, fabricated papers to the court in support of a fraudulent foreclosure. They tried to say they didn’t know. Schack didn’t buy it and slapped them with a $10,000 fine.

But the real story is yet to be told. We are getting closer to the real question, yet the inquiry into WHY false papers are being submitted on such a widespread basis has not occurred. This is the industry that practically invented dotted i’s and crossed t’s. They processed tens of millions of mortgages just the way they wanted them without error. Now they are claiming that they messed up the paperwork because of the same volume that they processed without a problem. And they are layering the responsibility by outsourcing the fabrication, forgery and fraud. Continue reading “Judge Schack Hammers HSBC for False Paperwork”

The OCC Misses the Point on Toxic Waste

The OCC Misses the Point on Toxic Waste

By Daniel Edstrom
DTC Systems, Inc.
http://www.dtc-systems.net

We all see what we want to see.  But when others control the conversation, it is easy to miss the point.  As a regulator the Office of the Comptroller of the Currency should be taking the lead and controlling the conversation, but in reality, they have been bridled and are being led around by the nose.  Conspiciously absent are numerous issues they as a regulator have the responsibility of dealing with.  This article is timely in response to an article by Neil F. Garfield (http://livinglies.wordpress.com/2011/12/27/the-big-lie-banks-did-nothing-illegal/), which is a response to Yves Smith of Naked Capitalism article (http://www.nakedcapitalism.com/2011/12/more-msm-criticism-of-obama-nothing-illegal-here-move-along-stance-on-foreclosure-fraud.html), which is a response to a Reuters article (http://www.reuters.com/article/2011/12/22/us-foreclosures-idUSTRE7BL0MC20111222).  But I found none of these articles until I was finished writing this post.  Take the following random and critical issues:

  • Are the loans in the pool?  Were the loans ever in the pool?  Does the pool exist?  Did the pool perfect interest in any of the loans?  This issue is very political and the OCC in our opinion will never address this issue or look into this.
  • What loans are in default?  Can a loan be in default?  What comes first, the default or the loss?
  • Are there any compliance issues?

Continue reading “The OCC Misses the Point on Toxic Waste”

How to Get a Full Accounting in California

Edstrom_MortgageSecuritization_POSTER_17_x_22_v4_1How to Get a Full Accounting in California

By Daniel Edstrom
DTC Systems, Inc.

Here is an appeals court case showing how to plead a cause of action for an accounting.  In the securitization of residential loans, this issue is frequently discussed, but I have never seen it brought in a lawsuit.  This appeals court case is certified for publication and was filed on April 22, 2009.

Accounting

A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting.  (Brea v. McGlashan (1934) 3 Cal.App.2d 454, 460, 39 P.2d 877;  5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 819, p. 236.)

An action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation.  (St. James Church of Christ Holiness v. Superior Court (1955) 135 Cal.App.2d 352, 359, 287 P.2d 387.)   A plaintiff need not state facts that are peculiarly within the knowledge of the opposing party.  (Brea v. McGlashan, supra, 3 Cal.App.2d at p. 460, 39 P.2d 877.)

Full Ruling: http://dtc-systems.net/wp-content/uploads/2011/12/Teselle-vs-McLoughlin-C054919-CERTIFIED-FOR-PUBLICATION.pdf

Hundreds of Years of Title Destroyed in a Decade and a Half

Hundreds of Years of Title Destroyed in a Decade and a Half

By Daniel Edstrom
DTC Systems, Inc.

Neil F. Garfield, Esq. just posted the following article:

TITLE CRISIS: EVEN IF YOU PAID CASH FOR YOUR HOME, TITLE STILL IN DOUBT — and you could be “underwater”

Posted on June 18, 2011 by Neil Garfield

What nearly everyone is missing is that any property that was mortgaged at any point in the last 15 years may have serious title defects.  Here is the scenario:

  1. A house is purchased or refinanced with a mortgage
  2. At some point in the future the house is refinanced again or sold
  3. A title company sends a payoff amount to “an entity”
  4. “An entity” issues either a substitution of trustee and full reconveyance or a full reconveyance (or other type of document used to release the loan)
  5. Repeat ad nauseum (or this only happened one time) Continue reading “Hundreds of Years of Title Destroyed in a Decade and a Half”

Oregon Does it to MERS Again

Oregon Does it to MERS Again

By Daniel Edstrom
DTC Systems, Inc.

Once again MERS is hammered, this time in Federal District Court by the Honorable Owen M. Panner.  This judge understands clearly what is going on and has some serious questions.  Read this case to understand securitization and foreclosures.  Here are some highlights (there are many others):

Should the beneficiary choose to initiate non-judicial foreclosure proceedings, the Act’s recording requirements mandate the recording of any assignments of the beneficial interest in the trust deed.

Nobody held a gun to the head of the servicers and required them to use non-judicial foreclosure.  They have the right to choose which action they wish to use – non-judicial or judicial.  The problem in this case (and almost all other cases), is that the servicers are making the wrong choices.  Why?  Money, what else?.  It is not their concern that they don’t qualify to use non-judicial foreclosures.  It is not their concern that they have to strictly comply with statutes.  In 90% or more of all cases the homeowners are walking away so nobody will know anyway right?  Oops, now the titles have to be cleaned up because of the mess left behind by the servicers, which have all but destroyed the title records for foreclosed properties.  This means that in the future, somebody else will have to file a judicial lawsuit to clean up the title for a property because the servicer made the wrong choice and failed to strictly comply with non-judicial statutes.  By the way this problem is understated and far worse than anyone actually imagines or understands at this point.

Continue reading “Oregon Does it to MERS Again”

LAWYERS CLE WORKSHOP ON FORECLOSURE DEFENSE AND OFFENSE

LAWYERS CLE WORKSHOP ON FORECLOSURE DEFENSE AND OFFENSE

April 30 to May 1, 2011 – in Phoenix, Arizona

Venue is to be determined

Sponsored by the GARFIELD CONTINUUM

SPONSORED IN PART BY WWW.LIVINGLIES.COM AND LIVINGLIES BLOG

info@luminaq.com

http://www.luminaq.com

This is a two-day seminar on litigation and negotiation of residential loans that are claimed to be securitized.  Early registration is advised. Continue reading “LAWYERS CLE WORKSHOP ON FORECLOSURE DEFENSE AND OFFENSE”

Securitization Workshop for Attorneys March 19th 2011 in San Francisco

Securitization Workshop for Attorneys March 19th 2011 in San Francisco

By Daniel Edstrom

Join us for our 3rd Securitization Workshop for Attorneys being held in San Francisco on March 19th, 2011.  Visit the event website for more information: http://securedocumentresearch.eventbrite.com

This workshop has been approved for Minimum Continuing Legal Education (MCLE) by the State Bar of California.  Total credit hours approved are 6.75 hours.

Description of event:

SECURITIZATION WORKSHOP FOR ATTORNEYS
March 19th, 2011 – in San Francisco, CALIFORNIA

Continue reading “Securitization Workshop for Attorneys March 19th 2011 in San Francisco”

Realized Losses in Securitization

Realized Losses in Securitization

By Daniel Edstrom
DTC Systems, Inc.

It is of interest to note that no loss is calculated in securitized transactions until the loan is liquidated.  It is also of value to note that usually the principal and interest is advanced until the loan is liquidated (as I saw in a case where it was stated by Deutsche Bank National Trust Company in an answer to discovery).  So principal and interest payments are made by the servicers and/or trustees, and no loss is actually realized until after the house is foreclosed upon and sold to a 3rd party.  So what came first, the default or the loss?  No default occurs until the loan is liquidated, which doesn’t occur until after the foreclosure sale.  This means the homes are sold while the loans are current.  I would venture to say that nearly ALL foreclosures in at least the last 10 years on homes with securitized transactions, have been fraudulent and invalid.  This is because the paperwork used to foreclose is VOID.  Not voidable, but VOID.

Take a look at these definitions from the Argent Securities Inc. 2003-W6 Trust:

State Principal Balance
As to any mortgage loan or manufactured housing contract, the principal balance of the mortgage loan or manufactured housing contract as of the cut-off date, after application of all scheduled principal payments due on or before the cut-off date, whether or not received, reduced by all amounts, including advances by the master servicer, allocable to principal that are distributed to securityholders on or before the date of determination, and as further reduced to the extent that any realized loss thereon has been, or had it not been covered by a form of credit support, would have been, allocated to one or more classes of securities on or before the determination date.

Advance
As to any Mortgage Loan or REO Property, any advance made by the Master Servicer or a successor Master Servicer in respect of any Distribution Date representing the aggregate of all payments of principal and interest, net of the Servicing Fee, that were due during the related Due Period on the Mortgage Loans and that were delinquent on the related Determination Date, plus certain amounts representing assumed payments not covered by any current net income on the Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as determined pursuant to Section 4.03.

Determination Date
With respect to each Distribution Date, the 10th day of the calendar month in which such Distribution Date occurs or, if such 10th day is not a Business Day, the Business Day immediately preceding such 10th day.

Continue reading “Realized Losses in Securitization”