Keep It Simple, Stupid!

My attorney and I are preparing for an Opposition to the Motion for Relief from Stay for my wife’s Bankrupt.  Attorney was asking me questions about my defense, and I was giving complicated answers, some of which I have included in this blog.

I spoke about the fact that the Pretender Lender [Fraud R Us] is on the Note, we have wire transfer information that shows that Indymac paid for the loan.  I also explained that the Assignment of Deed was fraudulent (Robo-signed), and the transfer date was after the deadline for closure of the trust.  Given the quick and cursory atmosphere in the hearing where the judge would decide the Motion for Relief from Stay, my attorney felt that this was too deep and complicated.  The opposing side would have a deed saying that they owned the property, and they also had an assignment.

After some back-and-forth, my attorney looked at the Motion for Relief and looked for ways to attack it.  We began to realize that I was saying in a very complicated way, something that could be said simply. Here’s how it goes:

My loan originated with [Fraud R Us].   [Fraud R Us] is on the Note and the Deed.  It even says that I’m supposed to pay [Fraud R Us]!  But there is the ABSENCE of an Assignment from [Fraud R Us] to Indymac Bank.  The LACK of it.  That means that there is no legal authority for Indymac Bank to pursue the foreclosure, and there is no legal authority for Deutsche Bank to pursue the foreclosure.  That’s all that you need to say.

Now I’m not sure if this simple way will be enough for the full Adversarial Proceeding, but it will be enough for the Judge in the Motion for Relief from Stay.

I was looking for a good quote about Simplicity, besides for Keep It Simple, Stupid (James Carville, Clinton’s political consultant).  Here’s one, though it might be a bit pompous:

Leonardo Da Vinci said: “Simplicity is the ultimate sophistication.”

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Key Ruling Made Regarding Standing and Foreclosure: 9th Circuit

Things are looking up in the Adversarial Proceeding.  A key decision, Veal v. American Home Mortgage Servicing Inc. (AHMSI) has resulted in a decision which upholds the requirement of the mortgage servicer to show that they have standing in order to get the Automatic Stay from a bankruptcy.

This is a very important ruling for me, personally.  My bankruptcy is within the 9th Circuit, and it is helpful, if not critical, that the legal precedent being used comes from the same Circuit court.

The important issue here is that the Court has ruled on the centrality of Assignments of the Note, and how that that relates to standing of the foreclosing party (AHMSI) to get the Automatic Stay.  The takeaway message here is the the 9th Circuit has ruled on the importance of standing, and my lawsuit depends on that.  It’s possible that I will be the first suit in the 9th Circuit regarding standing to foreclose itself.

The Veal case is complicated and I will review carefully and continue in my next post.

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Helpful Tool for Lawsuits in MERS-related foreclosures

A potentially significant piece of usable evidence for lawsuits has come in the form of consent orders agreed between the Federal Reserve and ten banks.  According to the Federal Reserve press release:

The banks are: Bank of America Corporation; Citigroup Inc.; Ally Financial Inc.; HSBC North America Holdings, Inc.; JPMorgan Chase & Co.; MetLife, Inc.; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; U.S. Bancorp; and Wells Fargo & Company.

Additionally, the Federal Reserve on Wednesday announced formal enforcement actions against Lender Processing Services, Inc. (LPS), a domestic provider of default-management services and other services related to foreclosures, and against MERSCORP, Inc. (MERS), which provides services related to tracking and registering residential mortgage ownership and servicing, acts as mortgagee of record on behalf of lenders and servicers, and initiates foreclosure actions. These actions address significant compliance failures and unsafe and unsound practices at LPS and its subsidiaries, and at MERS and its subsidiary. 

The consent orders are agreements between the Federal Reserve, the banks, the “fraud-mill” default management services companies Lender Processing Services (LPS) and MERSCORP.  These consent decrees are potentially legally actionable (useful as exhibits in lawsuits), because they are an implicit admission to fraud.

To see all of the consent orders, please see the Federal Reserve press release above, though I will include three of them here:

Additionally, the Federal Reserve, together with Office of Thrift Supervision and Office of the Comptroller of the Currency, produced a report which details structural legal violations of the mortgage processing activities of a number of the mortgage servicers.  In a footnote to the report, the Federal Reserve stated:

In light of the formal enforcement actions entered into by these 14 servicers, which are being made public, the agencies have determined that it is appropriate to identify the servicers (whether a bank or a bank affiliate) that were reviewed. The bank and thrift holding company parents of Ally Bank/GMAC, Bank of America, Citibank, Everbank, HSBC, JPMorgan, Chase, MetLife, OneWest, PNC, SunTrust, U.S. Bank, and Wells Fargo also entered into formal enforcement actions.

This is all potentially legally usable material to explain to a judge the Federal Government’s view of structural illegality and fraud for the majority of banks and loan servicers in the 2000’s.

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Fixing our little Automatic Stay Problem

In the last positing, I spoke about the legal problem that my family is facing. We have an active Unlawful Detainer suit against us, and worse is that they have a Default Judgment against me. It’s a dangerous situation because the only party blocking eviction is my wife.

We are attempting to fix this issue by filing a Request for Continuation of Stay with the Bankruptcy Court. Recall: my Bankruptcy produced an Automatic Stay which only lasted 30 days under a new law, because I had filed two previous bankruptcies. However, the bankruptcies were dismissed for reasons that were initiated by the court! The court makes procedural errors from time to time which result in the dismissal of the case for no fault of the debtor. That’s what happened here.

I produced a Motion which explained exactly what happened with the dismissal of the previous bankruptcy, and as a result I could show that I am not abusing the bankruptcy system. The Motion is filed, and the result should come up in a week or two. This will protect us from eviction for a few months, or until the opposing side files a Motion for Relief from Stay. We have another Motion asking the Judge to stay the Unlawful Detainer until the Adversarial Procedure is complete, which may take a few months. I’ll let you know how it goes!

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Watch Those Changing Laws

As the date of my Unlawful Detainer (eviction) trial drew closer, my attorney was getting increasingly puzzled. The Plaintiffs (opposing side) were making no effort to overturn the Automatic Stay on the bankruptcy. When a Bankruptcy is filed, the most significant immediate consequence is they Automatic Stay, which freezes action on the unlawful detainer (eviction) until the stay is lifted. The stay can be lifted by the Motion for Release of the Automatic Stay.

Why had the opposing side not filed a Motion for Release? My attorney spoke with the opposing attorney and found that the laws had recently changed whereby having more than one bankruptcy in the past year means that the Automatic Stay only lasts 30 days.  The opposing side was so confident in their understanding of this new law that they didn’t file a Motion for Relief from Stay at all.  This led my attorney and me into a false sense of confidence that we were OK.

Ultimately, we rescued the situation by filing a bankruptcy for my wife, which then created a new and separate Automatic Stay, which stopped the Unlawful Detainer action.  The whole thing is very nerve-racking, and requires an ongoing understanding of the evolving legal situation.

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The Final Blow: Securitization Fraud

There are many fatal problems with my loan documents.  The final, deadly one is the undeniable missing of a deadline.

My loan was securitized, that is, packaged into a trust, in New York State, with Deutsche Bank National Trust Company as a trustee.  The trust has the catchy name of Indymac 2007-FLX1.  But, and here’s the kicker, 2007-FLX1 has a deadline for inclusion of January 31, 2007.  (I got the loan on Nov. 17, 2006, so this makes sense.)

But the records clearly show that the house was transferred to the trust in September, 2009.  Now New York State trust law is very particular about the accuracy and verification of all aspects of the trust.  This is a violation that anyone can understand.

The reason for this, of course, is that they didn’t even think about the issue until I stopped paying the mortgage in 2009, and then, presumably, it was a mad scramble.

 

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How could they? Wire evidence shows that the Note is mis-assigned.

Fascinating information is being gathered in my Adversarial Proceeding case against OneWest Bank (formerly Indymac), Deutsche Bank National Trust Corporation, and the Trust that securitized my house.  If you are in danger of foreclosure, you will find this information very, very interesting, and possibly very useful.

To be brief:  my legal team and I have found that the Note on my property which was initially assigned to a certain local mortgage broker, whom we’ll call FRU (Fraud R Us, I won’t reveal it for the moment) was not actually paid for FRU.  I obtained the Incoming Wire from Chicago Title, the title company that handled the transaction.  It shows that Indymac Bank, NOT FRU, supplied the funds for the transaction and it went into FRU’s sub-escrow account at Chicago Title.

Why is this important?

Let’s go back to a post I made last week.  The Note says:

1.   BORROWER’S PROMISE TO PAY

In return for a loan that I have received, I have promised to pay $ U.S. _______ (this amount is called “Principal”), plus interest, to the order of the Lender.  The Lender is [FRU] A California Corporation…..

I understand that the Lender may transfer this Note.  The Lender or anyone who takes this Note by transfer and is entitled to receive payments under this Note is called the “Note Holder”.

Very clearly, the document says “The Lender is [FRU] A California Corporation“.   Oh, no it isn’t.  OH, NO IT ISN’T !  The lender is Indymac Bank, not [FRU].  The incoming wire, which was pretty easy to obtain, clearly shows this!

This means that the Note, which is the central document that allows foreclosure, is voidable because it says something that is provably false.  Furthermore, once it is shown to be false, every Assignment of the Note that comes afterward is also voidable, because an entity that has no title to the property does not have the right to assign it to anyone else.

That means that the entity that foreclosed on the property had no right to do so.  Now, I understand that these arguments, being made in state court (California Superior Court for me), have run up against pro-business judges that have found in favor of the banks.

A US Bankruptcy Court, however, is overseen by a judge whose job it is to discharge debt. In the Adversarial Proceeding, it is the creditors responsibility to validate the debt.  That is, to prove that they are the party to which the payment is owed.  That is proven by producing the Note.  But the Note has [FRU] listed as the Note Holder, and not the bank that paid for it!  So they can’t prove it.  But additionally, all assignments of the debt that are downstream are legally faulty and voidable as well.

The wire was obtained by noting the Wire Number on the Deed of Trust, and calling the local office of Chicago Title.  I spoke with the lady in charge of the Payoff Department, and gave her the number. She asked if I was the lender and I just said yes.  I don’t know if it wouldn’t have happened if I hadn’t said yes. She had to contact the bank, and it took three days or so.  But I received a fax with smoking gun information.

There is one final legal bomb in this story, which I will discuss in my next post.

— Your Host

 

 

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