Whocrazieryouorme: foreclosure law

From Bloomberg: Banks Lose Pivotal Massachusetts Foreclosure Case

The state Supreme Judicial Court today upheld a judge’s decision saying two foreclosures were invalid because the banks didn’t prove they owned the mortgages, which he said were improperly transferred into two mortgage-backed trusts.

“We agree with the judge that the plaintiffs, who were not the original mortgagees, failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph D. Gants wrote.

The concurring opinion by Justice Cordy helps clarify the situation:

I concur fully in the opinion of the court, and write separately only to underscore that what is surprising about these cases is not the statement of principles articulated by the court regarding title law and the law of foreclosure in Massachusetts, but rather the utter carelessness with which the plaintiff banks documented the titles to their assets. There is no dispute that the mortgagors of the properties in question had defaulted on their obligations, and that the mortgaged properties were subject to foreclosure. Before commencing such an action, however, the holder of an assigned mortgage needs to take care to ensure that his legal paperwork is in order. Although there was no apparent actual unfairness here to the mortgagors, that is not the point. ...

The type of sophisticated transactions leading up to the accumulation of the notes and mortgages in question in these cases and their securitization, and, ultimately the sale of mortgaged-backed securities, are not barred nor even burdened by the requirements of Massachusetts law. The plaintiff banks, who brought these cases to clear the titles that they acquired at their own foreclosure sales, have simply failed to prove that the underlying assignments of the mortgages that they allege (and would have) entitled them to foreclose ever existed in any legally cognizable form before they exercised the power of sale that accompanies those assignments. The court's opinion clearly states that such assignments do not need to be in recordable form or recorded before the foreclosure, but they do have to have been effectuated.

These are important points:

• The "assignments do not need to be in recordable form or recorded before the foreclosure". That is a key point.

• This case is really about the "utter carelessness with which the plaintiff banks documented the titles to their assets".

And this means that

• These issues are curable, but will be costly for the banks. As Tanta frequently argued, the upfront "cost savings" would be paid for in arrears!

• This does not appear to be a systemic risk.

Scores of HOMEOWNERS DO NOT CONTEST FORECLOSURES BECAUSE:

1. They don’t have knowledge of the law in order to recognize which aspects of foreclosure are legally challengeable or even fraudulent.

2. And even those who identify wrongdoing lack funds to pay for attorneys to represent them.

3. Homeowners are told to come to foreclosure auctions with $$$$$$$ that they do not have, SO THEY STAY AWAY from foreclosure auctions.

These homeowners are oblivious about sometimes “straw buyers” and sometimes lawyers in charge of foreclosures, obtain ILLEGAL ownership of people’s homes; and pay literally nothing through “credit bids;” and that those recorded deeds from such auctions are null! For these very reasons, there needs to be a probe of lawyers who file foreclosures. http://chn.ge/eU2zAm

Also, the average lay person doesn’t know about legal REQUIREMENTS of “standing” that prevents their homes from being repossessed via non-existent lenders or via lenders which have no ownership of promissory notes.

Yet, COURTS ARE SUPPOSED TO ENFORCE STANDING and compliance with established laws! Illegal, defective, fraudulent foreclosures are the cause of useless property deeds for real estate sales; title insurance companies refuse coverage on foreclosed properties –and more!

Further, after certain foreclosure auctions (via simulation) result in fraudulent – NOT LENDER ACQUISITIONS, by lawyers or straw buyers, the common scenario becomes property flipping, neighborhood blight, rodents, and so on!

*Sample of fraudulent foreclosure acts:

–Deliberately use defunct lenders, lenders without “standing” for false civil and bankruptcy foreclosure proceedings.

– Create and conceal malpractice foreclosure delays and engineer billable litigation.

– Orchestrate sham foreclosure auctions; property never acquired by lenders, but ‘straw buyers’

– Commit actionable wrongs (unfair debt collection, fraud, various torts) that create lawsuits

– Self-dealing foreclosures which certain lawyers themselves obtain foreclosed properties for flipping.

–Foreclosures naming defunct lenders, illegally recorded property deeds, flipping, blighted communities.

– Unconscionably create false deficiency judgments against property owners after straw buyers acquire homes for pennies on the dollar.

– Intentionally false BANKRUPTCY COURT “Motion to Lift” and “Proof of Claim” on behalf of non-existent lenders which conceals fact of “NON-SECURED” mortgage debt.

–Involved in fraudulent collection of property damage insurance, as well as mortgage-default insurance.

–Fraudulent foreclosures abet loss of property taxes to city revenue, rodents, vagrants

– Thousands of families made unlawfully homeless from null foreclosure proceedings.

Foreclosure lawyers are officers of the court. Lawyers are required to know applicable laws and civil procedure; this knowledge is not required from mortgage lenders, nor loan servicers. Lawyers are the ones who file those inadequate or questionable foreclosure which lead to useless property deeds and impediments to real estate sales; title insurance companies reluctance to cover foreclosed properties; mortgage default claims disputes due to defective foreclosures.

*MORE info: Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers

http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#

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Monday, January 10, 2011

foreclosure law

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