stopped paying, planning defense

[jimbo367]

So if a mortgage was transferred in fraudulent manner it's ok.

And the Court will accept that forged document as basis of FC

Is that your position?

[jimbo367]

As for the trust accepting mortgages, that has nothing to do with the assignment. The mortgages are usually preassigned to a particular pool before they are even written. in other words, the pool establishes some dates, like 1/1/2007 to 2/28/2007, and all mortgages from that particular lender, let's say First Franklin Mortgage Backed Securities Series 2007-FFT1, would go to that pool as they are issued within those dates. It is so complex how those work that some Judges don't understand the underlying process. Many judges will just say that YOU owe SOMEONE for that PROPERTY. The Judge only needs to see the Promissory Note -- properly indorsed -- in order to allow a foreclosure. Pretty simple.

As for how New York judges deal with these issues, that's really a NY matter. The Northeast (Appellate Circuit 1) seems to be more liberal in their decisions and more pro-debtor.

Read a PSA it must be assigned, the pre-assignments are used to sell te pool and the investors are told those will be replaced with other mortgages at the time of commencement of the trust.

Notes are not necessarily endorsed they are transferred with the Mortgage in an assignment.

[HHM]

It's "not my position", it is simply what is happening.

Goes back to a fundamental question...Did you stop paying your mortgage? If the answer is yes (and there was no fraud related to that stopping of payment), the rest is just window dressing. Pretty much whoever has possession (or more accurately, proof of possession) of the note, can enforce it (e.g. foreclose).

Your argument amounts to, because we cannot trace the "chain of title" of the note, means that the note "should not exist". The problem is, the note exists, you borrowed money, bought house, the seller got paid, you got a house, and then defaulted. Someone has the right to take that house from you.

[HHM]

Read a PSA it must be assigned, the pre-assignments are used to sell te pool and the investors are told those will be replaced with other mortgages at the time of commencement of the trust.

Notes are not necessarily endorsed they are transferred with the Mortgage in an assignment.

The PSA doesn't matter, YOU are not a party to that contract, you not even a 3rd party beneficiary of the contract. Only parties can "enforce" the terms of a contract.

Don't confuse PSA with the underlying notes.
Contracts (the PSA) has to be assigned, but notes need only be "negotiated" that is, transferred.

[justbroke]

Notes are not necessarily endorsed they are transferred with the Mortgage in an assignment.

Read all the caselaw and history on how this works. Every court agrees that the Mortgage is "incidental" to the debt! You transfer the debt and the security (the mortgage or deed of trust) travels with it. Somehow, you have it backwards!

Here's the real problem. Please know that I have worked in financial services with the systems that hold all the collateral (electronically). The Promissory Notes are all housed in several major warehouses (if it's a major lender). The Notes are scanned and placed into an electronic document management system. When the lender sells the Note (the right to payment), the lender will execute an assignment on paper. Please know that the assignment need not be recorded to prove ownership of the Note! The warehouse then just "electronically" moves the Note to the new lender. The Note is never retrieved at that point unless it's a Note that has not been endorsed in blank. If it wasn't endorsed in blank, then it needs to be physically retrieved and then endorsed by the selling bank. This is part of the reason for MERS -- to track the assignments -- and why most Notes issued from 2000 on, are endorsed in blank. That way, you never need to retrieve them!

So, the statement that notes "are transferred with the Mortgage in an assignment" is not correct. The instrument (the mortgage) travels with the sale of the underlying Note. Unfortunately, I think MERS messed up a bunch of things and many assignments, from MERS to the "holder of the note," have technical flaws. First, MERS doesn't have any interest in the Note so could never assign the Note!!! This is the paradox created because it is not the note that follows the mortgage (assignment)... it's the other way around.

I think this could easily be corrected by the banks simply sending the actual Note from the warehouse to MERS so that MERS has actual possession of the "endorsed in blank" (negotiable) promissory note, and then assigning it from there!

Again, most Judges don't want to get bogged down by anything other than "did YOU pay", and "did YOU not grant a mortgage upon the property".

[jimbo367]

First this is not a MERS deal, Did I pay is not the question always the question in NY.

It is also was the trust paid thru insurance, or government reimbursements, if so who owes what?

[jimbo367]

The PSA doesn't matter, YOU are not a party to that contract, you not even a 3rd party beneficiary of the contract. Only parties can "enforce" the terms of a contract.

Don't confuse PSA with the underlying notes.
Contracts (the PSA) has to be assigned, but notes need only be "negotiated" that is, transferred.

NY case law differs from that theory.

[justbroke]

First this is not a MERS deal, Did I pay is not the question always the question in NY.

It is also was the trust paid thru insurance, or government reimbursements, if so who owes what?

Did you mean "is not always the question" in New York? Yes, I agree that there are Judges who won't ask that question. Hopefully, you have a Judge that either doesn't ask or doesn't care what the answer to that question is.

As for Trusts being paid through insurance or whatever, how is that incidental to you owing someone? I guess there was one line of thinking where defendants have construed that since the investors paid the underlying debt, then the mortgage was paid. The fact is, that the investors purchased the rights to the "interest" that would accrue. So they are merely "holding" the debt, just like a bank would, in return for the accrual of interest.

I see this no different than people who claim that since a junk debt buyer (JDB) purchased a debt for pennies on the dollar, then you only owe "pennies" as well.

I admire your tenacity and your line of reasoning is okay, but you have to find an articulate way to allow a judge to find a cause to grant a dismissal with prejudice. The only way to get it with prejudice is to prove that the lender would NEVER be able to foreclose given the facts and evidence. Many will settle and offer different deals to make it go away because the cost of litigation will eventually exceed the arrears, and may at some point exceed the value of the property as well!

[HHM]

No, Minority NY case law differs. (also, keep in mind that "opinions not for publication" carry no precedent.)

But, you are starting to seem a little fringe at this point...Who has "wronged" you? There is still the fundamental point...which you KEEP IGNORING, that you DID default on an obligation to pay debt and your house is collateral for that debt. Let's say that you owe John $1,000 and you guys write a 1 page note that say, Jimbo promises to pay John $1,000 in 10 monthly installments and you both sign it. John owes Bubba $800. John goes to Bubba and says, instead of me paying you the $800, let me give you this note I have with Jimbo and I will tell Jimbo to pay you instead of me. And he does so (but note, John, not being wise in the UCC3, does not endorse note, but just gives it to Bubba) Jimbo (you), make 2 payments to Bubba, and then stop. Now Bubba sues you?

On a very basic level, that is what is going on with the foreclosure problem. So again, I ask, how are you harmed or wronged if Bubba tries to collect instead of John? If you have any hope of getting dismissal with prejudice, you will need to articulate an argument that answers that question in a very simple to under stand way. Even judges don't like technical gobbledygook.

[jimbo367]

What are your thoughts on this article?

And

The ruling represents another milestone for homeowners seeking discovery of securitization documents. For years, we saw the “banks”, servicers, and “trustees” of securitized mortgage loan trusts objecting to these documents on the grounds of “relevance” and “lack of standing”. As those of you who follow this website are aware, recent rulings have not only compelled this discovery and awarded attorneys’ fees and/or dismissed judicial foreclosures when the discovery is not produced, but the “relevance” has been seen by the Horace and Hendricks decisions which granted summary judgment to the homeowners based on matters in the very discovery which has been ordered to be produced in this case. The Horace court also held that the homeowner is a third-party beneficiary of the PSA.

This is the 13th such Order compelling securitization discovery which Mr. Barnes has obtained from courts in different states, including Florida, New Jersey, and Oregon.

Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com

[HHM]

In principal I agree, the problem is, few or no courts have yet gone along with that position. Nice in theory...but few courts have weighed in.

Some of the comments are very similar to what we are discussing here. The interplay of UCC-3 and UCC-9.

You're still skirting the main issue

[justbroke]

It's interesting that the article's writer opines that the debtor (mortgagor) is not a party to the PSA at all. The writer also opines that homeowners are not complaining about breeches of the PSA. However, jimbo, you wrote that you are arguing that the PSA was breeched. As you write, you are, at best, a third party to the PSA, but you have no benefits under the PSA... meaning that you are NOT a party in interest. That's an important distinction.

I personally do not believe that the regular trial court is prepared for these types of arguments and that they probably belong at the appellate level. In fact, the article ends with "I think the fact that the homeowner isn't a party to the securitization is kind of beside the point". I don't know how arguing problems with the PSA, where violation of the terms are really a matter between the servicer and the underlying trust, is a cause for a judge to stop a foreclosure in favor of the defendant (mortgagor).

That article was more about discovery in a proceeding and was a "technical" reason for the dismissal. It wasn't that the breech in the PSA was actionable on the part of the defendant (mortgagor), but that the PSA itself was a proper discoverable document and the failure to participate and comply with discovery requests, was an action which could allow the judge to dismiss.

Again, these are just all procedural delay tactics.