Failure to Allege Lack of Default

Edstrom_MortgageSecuritization_POSTER_17_x_22_v4_1Failure 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”

World Savings Bank and Fannie Mae Securitizations

world_savings_logoWorld Savings Bank and Fannie Mae Securitizations

By Daniel Edstrom
DTC Systems, Inc.

We have already shown that World Savings Bank securitized commercial and residential loans.  See the following posts:

Now we show that World Savings securitized multi-family housing into Fannie Mae pools.  These “pools” are REMICs.  This deal contains 9 multi-family properties with fixed rate balloon loans.  That’s right – no option ARM loans, which is what World Savings Bank is known for.

Download part 1 of the Trust Indenture here: 1-FixedRate_TrustIndenture_Part_1_1982_last_updated_1987

Download part 2 of the Trust Indenture here: 2-FixedRate_TrustIndenture_Part_2_1982_last_updated_1987

Download the Prospectus here: 3-Prospectus_2003_09_01

Download the Prospectus Supplement here: 4-Prospectus_Supplement_1_2003_09_01

Download the Prospectus Supplement Pool Statistics here: 5-Prospectus_Supplement_Pool_Statistics_2003_09_01

Download the Pool Loan Schedule here: 6-Pool_Loan_Schedule


BofA Mortgage Morass Deepens on Promissory Notes Issues

BofA Mortgage Morass Deepens on Promissory Notes Issues

By Prashant Gopal and Jody Shenn – Nov 30, 2010

Testimony by a Bank of America Corp. employee in a New Jersey personal bankruptcy case may give more ammunition to homeowners and investors in their legal battles over defaulted mortgages.

Linda DeMartini, a team leader in the company’s mortgage- litigation management division, said during a U.S. Bankruptcy Court hearing in Camden last year that it was routine for the lender to keep mortgage promissory notes even after loans were bundled by the thousands into bonds and sold to investors, according to a transcript. Contracts for such securitizations usually require the documents to be transferred to the trustee for mortgage bondholders.

In the case, U.S. Bankruptcy Judge Judith H. Wizmur on Nov. 16 rejected a claim on the home of John T. Kemp, ruling his mortgage company, now owned by Bank of America, had failed to deliver the note to the trustee. That could leave the trustee with no standing to take the property, and raises the question of whether other foreclosures could similarly be blocked.

Following the decision, the bank disavowed the statements by DeMartini, whom it had flown in from California to testify. It was the policy of Countrywide Financial Corp., acquired by Bank of America in July 2008, to deliver notes as called for in its securitization contracts, according to Larry Platt, an attorney at K&L Gates LLP in Washington designated by the bank to answer questions about the case. Continue reading “BofA Mortgage Morass Deepens on Promissory Notes Issues”