CHAPTER 1: When a Default and a Foreclosure Take Place

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WHEN A DEFAULT AND FORECLOSURE TAKE PLACE

When a mortgage goes into default (or when a servicer PRECIPITATES a default by fraud), the servicer typically orchestrates the foreclosure.  But very often the servicer does this by engaging the servicers of national “foreclosure specialists”, such as Fidelity, FANDO, and or NDex. These institutional “foreclosure specialists” take charge and call the shots. There is also some indication that some foreclosure specialists and/or servicers begin fabricating documents in support of the foreclosure. (see the Chapter on Affidavits and Assignments for a discussion of the fraud being perpetrated.)

Bear in mind that the Servicer is SELDOM the owner of the mortgage debt in mortgage securitized cases.  As explained above, the servicer is also not typically the HOLDER of the promissory note.  But servicers are in a hurry to initiate foreclosure and rely upon the fact that most borrowers do NOT defend against the foreclosure suit.  So the servicer never bothers to obtain the promissory note before initiating foreclosure. Instead, they simply rely upon fabricated documents and false and perjured affidavits as evidence in their premature foreclosures. Federal standing rules require that a plaintiff must have a pecuniary interest in the subject matter of the suit.

WHO OWNS THE PROMISSORY NOTE AND WHO OWNS THE SECURITIES

The question as to who owns the promissory note is one that actually doesn’t necessarily have to be answered, though you need to aggressively press for an answer in discovery. It is the plaintiff bank’s burden of proof to demonstrate standing and authority to institute the foreclosure suit. You need to learn the identity of the holder primarily to defeat the allegations and assertions of the plaintiff.  Showing that the foreclosing plaintiff bank does not own the note is enough to defeat the plaintiff’s claim. Foreclosure Help - The Definitive Guide to Foreclosure Defense.  Defense Tactics in Layman's terms - includes motions, pleadings and more. Review Now.

The ownership of the underlying mortgage securities is completely irrelevant. Owners of the mortgage securities issued by a trust do NOT have the authority to foreclose. The institutional trustee acts on behalf of the holders of the trust certificates. That is how a trust works. But the trust cannot act without proving that it is either the owner or the holder of the promissory note.

WHERE’S THE NOTE, WHO’S THE HOLDER: ENFORCEMENT OF PROMISSORY NOTES SECURED BY REAL ESTATE

 

In most securitized mortgage foreclosures the plaintiff bank claims to have ‘lost’ the note.  Bank of America, for example, at one time, filed over 10,000 foreclosures a day.  Do you really believe that Bank of America lost 10,000 notes every day.  Do they actually have someone in the basement at some location shredding or burning the notes?  And who would destroy a promissory note.  A promissory note can be a negotiable instrument.  That means that a promissory note is one step removed from actual money.  Make no mistake about it.  The plaintiff bank may claim that the note is lost but it is not.  The real problem is that the note does not belong to the plaintiff bank attempting to foreclose.

LOST NOTE/DESTROYED NOTE

 

In prior times, the possibility of a note being accidentally lost or destroyed was protected by statutes providing for proving the note and mortgage without the original. These statutes and rules of procedure are now being invoked by nominal lenders and assignees of nominal lenders to escape or navigate around a much deeper problem for them.

It is the opinion of this editor that the original notes were not accidentally destroyed or lost. There either intentionally destroyed or hidden in some trustee's vault in an off shore structured investment vehicle. The reason is simple: the terms of the note and mortgage do not match the narrative or representations of the parties in the securitization process culminating in the sale of ABS instruments.

The nominal lender or assignee will claim that they did not lose or destroy the note and that might be true. That is why the SINGLE TRANSACTION theory must be invoked in foreclosure defense. Someone in the securitization process was responsible for the fact that between 40%-90% of the notes have vanished, whereas prior to the Mortgage Meltdown era the percentage of lost notes was less than 1/2 of one percent.

Since the promissory note is a thing of value and in fact is considered "money" in many economic models, it is a challenge to come up with reasons why anyone would "rip up a ten dollar bill." The only reasonable answer is that if someone actually saw the $10 bill they would know it wasn't a $100 bill, which is what they thought it was when they bought a piece of paper that referred back to the fictional "$100" bill.

 

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The Definitive Guide to Foreclosure Defense

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  • My house is set to be sold Monday, May 31. For more than a year I have been trying to get a copy of the original "note" on the house. Wilshire was not able to present it. Then they sold the loan to Bank of America. Subsequently, BofA can't find it either. In fact, I got an email that they were unable to locate the document I was looking for. And at this time they consider the matter closed. Well, that was in March. Now it is scheduled for the 5th time for sale. I would like to keep the house. But I would like the house at it's real value and a fixed rate loan. However, if they don't have the note, how can they sell it? I don't believe I'll get a house for nothing. But since the 30 days have past and I cannot qualify for mediation, can I demand they present the original Promissory Note so it cannot be sold? I don't have much time.
    Mary Blaeske

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