I am in the middle of a legal fight to save my house using a method called the Adversarial Proceeding, which is a lawsuit that is filed in Bankruptcy Court. This is taking place in California, in the Los Angeles area. The house has already been foreclosed upon, and I used a filing of Bankruptcy, together with the Automatic Stay that comes with it, to hold off the Unlawful Detainer lawsuit (which leads to eviction) until now. Now comes the crunch time.
There are a growing number of foreclosure blogs that are blooming across the Web, and they have proved useful.
Stopforeclosurefraud.com has proven helpful, especially items about Indymac/OneWest Bank and its relationship with Deutsche Bank National Trust Company.
Let’s take a look at this post and how it relates to my own case.
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 Loan America. Inc. A 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”.
And as you can see, there is a handwritten “There is NO Assignment of Transfer from Loan America to Anyone!”
This is deadly stuff, from the bank’s perspective, because it means that when the loan was bought by Indymac/OneWest from Loan America, the Note, which is the critical documentation involved here, was never transferred.
This is not only critical to stopping a foreclosure, it can be used, in the context of a Bankruptcy court, to discharge the debt free and clear! A Bankruptcy judge’s role is to discharge debt. In this case, it is clear that there is NO RECORD AT ALL of the Note being assigned to the entity that foreclosed on the homeowner.
After the homeowner files bankruptcy, the Adversary Proceeding is filed against all parties relevant to the loan. The creditors are demanded to validate the debt, that is, prove that the debtor owes the creditor the funds. In the case shown above, there is NO ASSIGNMENT of the Note from the originating party to the lender to the foreclosing party. This means that the foreclosing party had no right to foreclose, and furthermore, that the loan is VOIDED!
My situation, alas, is not as clear-cut as this, but I will use a similar line of reasoning. In my case, the Note was assigned to Indymac Bank and to the foreclosing party, but it was done using a Robo-signer, an automated signer that was not reviewed by a human, and therefore does not hold up in court.
Additionally, the loan was sold to a Trust that is managed by Deutsche Bank National Trust Company, but when it was sold there were a number of New York State laws that were violated. Mike Konczal, in the blog Rortybomb, points this out in a wonderful post called Foreclosure Fraud for Dummies.
Well many of these mortgage originators were fly-by-night shops, shady enterprises that collapsed the moment they hit trouble. And many of them cut corners and one of the corners they may have cut would have been to send the note to the trust. Specifically, there is worry that many mortgage originators never sent the notes to the depositors. Originators wanted volume to get fees and may not have done all the paperwork correctly. There are a lot of things that have to end up in the trust when I take out a mortgage, things like the note, title insurance, supporting documents. But the note is the most important.
Why is this important? Well the trustees usually sign several certificates saying that they have verified all the documentation in these trusts. Many of these trusts are under New York trust law which is particularly clear and strict when it comes to these matters. With this in mind, tackle these three posts by Yves Smith (one two three).
I like the part about fly-by-night shops, shady enterprises that collapsed the moment they hit trouble. That describes my mortgage originator exactly!
I will continue to post as new information comes, which is all the time.