Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.
Judges are unlikely to look favorably on a bank that claims paperwork flaws don't matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book "Foreclosures."
"There has to be a cornerstone of integrity to the process," Coffey said.
Bank of America responded to Tiktin's depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. "This review will ensure we have a full understanding of any potential issues and quickly address them," Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank's foreclosure customers have not made a payment in more than 18 months.
JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.
Litton Loan Servicing did not respond to a request for comment.
Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.
For a housing recovery to occur, all the foreclosed properties -- which could account for 40 percent of all residential sales by 2012 -- need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.
"This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?" says Cris deRitis, director of credit analytics at Moody's Analytics. "We need to fix these issues before the economy can recover."
Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you've reviewed documents you've never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.
So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.
But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of "foreclosure king" David Stern, now under investigation by the Florida attorney general's office. "Pending the outcome of the AG's investigation, Citi is not referring new matters to this firm," the bank said in an e-mailed statement.
Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern's firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.
Stern's lawyer, Jeffrey Tew, did not respond to a request for comment.
Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.
The Earls and their attorney now allege that they were victims of fraudulent paperwork.
Curt Anderson contributed from Miami.
Get HuffPost Business On
Twitter, Facebook, and Google Buzz!
Know something we don't? E-mail us at huffpostbiz@gmail.com
I am a retired lawyer and cannot offer legal advice and my field was not Secured Transactions, but I can do research and give you the info freely available on the web. For starters:
This is from the MERS website regarding how they handle foreclosure:
Mortgage Electronic Registration Systems, Inc. (“MERS”) is a proper party that can lawfully foreclose as the mortgagee and note-holder of a mortgage loan. MERS Membership Rule 8 provides required guidelines that must be followed when MERS is the foreclosing entity. Please click here to access the Rules of Membership, and reference the Rule 8 requirements.
In mortgage foreclosure cases, the plaintiff has standing as the holder of the note and the mortgage. When MERS forecloses, MERS is the mortgagee and it is the holder of the note because a MERS officer will be in possession of the original note endorsed in blank, which makes MERS a holder of the bearer paper. MERS will not foreclose unless the note is endorsed in blank and held by MERS.
http://www.mersinc.org/Foreclosures/index.aspx
Notice how MERS acknowledges that only the holder of the note and the assigned mortgagee will it foreclose. They know they need both. They want the note in blank so that it remains a bearer instrument: “… when the endorsement is “in blank” – then only the party with actual possession of the note can be paid on it. Essentially, “in blank” is like turning the note into cash and so only the person with the cash in hand can spend it. [See California Commercial Code Section 3205].”
http://aforeclosurealternative.com/?p=439
The note is the key; without the note all else fails. The note is the obligation; not the mortgage. And ONLY the entity that has the note can enforce the note. These blank bearer notes can be a problem because it isliving document. Anyone who finds it can sue to enforce it. Here is the actual rule that MERS uses for foreclosures:
RULE 8
FORECLOSURE
Section 1. (a) With respect to each mortgage loan for which Mortgage Electronic
Registration Systems, Inc. is the mortgagee of record, the beneficial owner of such mortgage loan
or its servicer shall determine whether foreclosure proceedings with respect to such mortgage
loan shall be conducted in the name of Mortgage Electronic Registration Systems, Inc., the name
of the servicer, or the name of a different party to be designated by the beneficial owner.
(b) The Member servicing a mortgage loan registered on the MERS
System shall be responsible for processing foreclosures in accordance with the applicable
agreements between such Member and the beneficial owner of such mortgage loan.
(c) In the State of Florida, the authority to conduct foreclosures in the
name of MERS granted to a Member’s Certifying Officers under Paragraph Three of the
Member’s MERS Corporate Resolution is revoked. Effective June 1, 2006, the Member shall be
sanctioned $10,000.00 per violation for commencing a foreclosure in Florida in the name of
MERS.
(d) In the event that the beneficial owner or its designated servicer
determines that foreclosure proceedings shall be conducted in the name of a party other than
Mortgage Electronic Registration Systems, Inc., the servicer designated on the MERS® System
shall cause to be made an assignment of the mortgage from Mortgage Electronic Registration
Systems, Inc. to the person designated by the beneficial owner, and such beneficial owner shall
pay all recording costs in connection therewith.
Section 2: (a) If a Member chooses to conduct foreclosures in the
name of Mortgage Electronic Registration Systems, Inc., the note must be endorsed in blank and
in possession of one of the Member’s MERS certifying officers. If the investor so allows, then
MERS can be designated as the note-holder.
vJune2009
26
(i) The Member shall not plead MERS as the note-owner in
any foreclosure document; including but not limited to, the
foreclosure complaint.
(ii) The Member shall not plead MERS as a co-plaintiff in a
foreclosure action.
(iii) If the note is lost or cannot be located, the Member shall not
commence a foreclosure action in the name of MERS, but rather
must assign the mortgage out of MERS.
(b) In non-judicial foreclosure states, if the Member chooses to foreclose
in MERS name under the power of sale provision in the security instrument and is not seeking a
deficiency judgment, then the note does not need to be in the possession of the Member’s MERS
Certifying Officer when commencing the foreclosure action; provided, however, that under no
circumstances may the Member allege that the note is in their possession unless it so possesses.
(c) If the Member pleads MERS as the note-owner or as a co-plaintiff or
commences a foreclosure in the name of MERS when the note is lost or cannot be located, it
shall be considered a violation of the MERS Membership Rules and MERS may dismiss such
foreclosure action. Effective June 1, 2006, the Member shall be sanctioned $1,000.00 for the
first violation and $5,000.00 for each subsequent violation of this Rule.
(d) For all foreclosures conducted in the name of MERS, the member
shall take all reasonable and necessary steps to avoid having Mortgage Electronic Registration
Systems, Inc. take title to the applicable property that is the subject of a mortgage loan.
Mortgage Electronic Registration Systems, Inc. shall not be obligated to take title to any property
that is the subject of a mortgage loan; provided, however, that if the Member so requests,
Mortgage Electronic Registration Systems, Inc. may take title at the conclusion of the foreclosure
sale upon prior written consent to the Member from Mortgage Electronic Registration Systems,
Inc. If title is taken in the name of Mortgage Electronic Registration Systems, Inc., the Member
vJune2009
27
shall take all necessary and reasonable steps to remove Mortgage Electronic Registration
Systems, Inc. from title as soon as possible.
(e) If title is put into Mortgage Electronic Registration Systems, Inc.’s name and
there is a violation of state, county or city codes or any other applicable regulation; including, but
not limited to, non-payment of tax bills, the Member shall be responsible to promptly take all
necessary action to prevent fines or judgments from being entered against MERS. If the Member
fails to do so, MERS may take such action and will sanction the member for all costs and
expenses; including, but not limited to, attorney fees.
Actual physical possession is quite critical. Now, the note may become ‘lost’ or ‘destroyed’ but that raises other issues. Mers handles it this way:
MERS rules don’t allow members to submit lost-note affidavits in place of mortgage notes, said R.K. Arnold, the company’s CEO.
“A lot of companies say the note is lost when it’s highly unlikely the note is lost,” Arnold said. “Saying a note is lost when it’s not really lost is wrong.”
The usual way to get around the lost note is via affidavit by the party seeking to enforce the note that after due diligence the ORIGINAL note cannot be found and attached is a certified COPY. Of course, that begs the question of how do you produce a copy when you say you lost the original? Moreover, who goes around losing original notes for hundreds of thousands of dollars (or more) of debt?
So you can see why production of the original note is so important.
benchcraft company scam
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
benchcraft company scam
Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.
Judges are unlikely to look favorably on a bank that claims paperwork flaws don't matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book "Foreclosures."
"There has to be a cornerstone of integrity to the process," Coffey said.
Bank of America responded to Tiktin's depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. "This review will ensure we have a full understanding of any potential issues and quickly address them," Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank's foreclosure customers have not made a payment in more than 18 months.
JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.
Litton Loan Servicing did not respond to a request for comment.
Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.
For a housing recovery to occur, all the foreclosed properties -- which could account for 40 percent of all residential sales by 2012 -- need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.
"This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?" says Cris deRitis, director of credit analytics at Moody's Analytics. "We need to fix these issues before the economy can recover."
Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you've reviewed documents you've never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.
So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.
But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of "foreclosure king" David Stern, now under investigation by the Florida attorney general's office. "Pending the outcome of the AG's investigation, Citi is not referring new matters to this firm," the bank said in an e-mailed statement.
Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern's firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.
Stern's lawyer, Jeffrey Tew, did not respond to a request for comment.
Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.
The Earls and their attorney now allege that they were victims of fraudulent paperwork.
Curt Anderson contributed from Miami.
Get HuffPost Business On
Twitter, Facebook, and Google Buzz!
Know something we don't? E-mail us at huffpostbiz@gmail.com
I am a retired lawyer and cannot offer legal advice and my field was not Secured Transactions, but I can do research and give you the info freely available on the web. For starters:
This is from the MERS website regarding how they handle foreclosure:
Mortgage Electronic Registration Systems, Inc. (“MERS”) is a proper party that can lawfully foreclose as the mortgagee and note-holder of a mortgage loan. MERS Membership Rule 8 provides required guidelines that must be followed when MERS is the foreclosing entity. Please click here to access the Rules of Membership, and reference the Rule 8 requirements.
In mortgage foreclosure cases, the plaintiff has standing as the holder of the note and the mortgage. When MERS forecloses, MERS is the mortgagee and it is the holder of the note because a MERS officer will be in possession of the original note endorsed in blank, which makes MERS a holder of the bearer paper. MERS will not foreclose unless the note is endorsed in blank and held by MERS.
http://www.mersinc.org/Foreclosures/index.aspx
Notice how MERS acknowledges that only the holder of the note and the assigned mortgagee will it foreclose. They know they need both. They want the note in blank so that it remains a bearer instrument: “… when the endorsement is “in blank” – then only the party with actual possession of the note can be paid on it. Essentially, “in blank” is like turning the note into cash and so only the person with the cash in hand can spend it. [See California Commercial Code Section 3205].”
http://aforeclosurealternative.com/?p=439
The note is the key; without the note all else fails. The note is the obligation; not the mortgage. And ONLY the entity that has the note can enforce the note. These blank bearer notes can be a problem because it isliving document. Anyone who finds it can sue to enforce it. Here is the actual rule that MERS uses for foreclosures:
RULE 8
FORECLOSURE
Section 1. (a) With respect to each mortgage loan for which Mortgage Electronic
Registration Systems, Inc. is the mortgagee of record, the beneficial owner of such mortgage loan
or its servicer shall determine whether foreclosure proceedings with respect to such mortgage
loan shall be conducted in the name of Mortgage Electronic Registration Systems, Inc., the name
of the servicer, or the name of a different party to be designated by the beneficial owner.
(b) The Member servicing a mortgage loan registered on the MERS
System shall be responsible for processing foreclosures in accordance with the applicable
agreements between such Member and the beneficial owner of such mortgage loan.
(c) In the State of Florida, the authority to conduct foreclosures in the
name of MERS granted to a Member’s Certifying Officers under Paragraph Three of the
Member’s MERS Corporate Resolution is revoked. Effective June 1, 2006, the Member shall be
sanctioned $10,000.00 per violation for commencing a foreclosure in Florida in the name of
MERS.
(d) In the event that the beneficial owner or its designated servicer
determines that foreclosure proceedings shall be conducted in the name of a party other than
Mortgage Electronic Registration Systems, Inc., the servicer designated on the MERS® System
shall cause to be made an assignment of the mortgage from Mortgage Electronic Registration
Systems, Inc. to the person designated by the beneficial owner, and such beneficial owner shall
pay all recording costs in connection therewith.
Section 2: (a) If a Member chooses to conduct foreclosures in the
name of Mortgage Electronic Registration Systems, Inc., the note must be endorsed in blank and
in possession of one of the Member’s MERS certifying officers. If the investor so allows, then
MERS can be designated as the note-holder.
vJune2009
26
(i) The Member shall not plead MERS as the note-owner in
any foreclosure document; including but not limited to, the
foreclosure complaint.
(ii) The Member shall not plead MERS as a co-plaintiff in a
foreclosure action.
(iii) If the note is lost or cannot be located, the Member shall not
commence a foreclosure action in the name of MERS, but rather
must assign the mortgage out of MERS.
(b) In non-judicial foreclosure states, if the Member chooses to foreclose
in MERS name under the power of sale provision in the security instrument and is not seeking a
deficiency judgment, then the note does not need to be in the possession of the Member’s MERS
Certifying Officer when commencing the foreclosure action; provided, however, that under no
circumstances may the Member allege that the note is in their possession unless it so possesses.
(c) If the Member pleads MERS as the note-owner or as a co-plaintiff or
commences a foreclosure in the name of MERS when the note is lost or cannot be located, it
shall be considered a violation of the MERS Membership Rules and MERS may dismiss such
foreclosure action. Effective June 1, 2006, the Member shall be sanctioned $1,000.00 for the
first violation and $5,000.00 for each subsequent violation of this Rule.
(d) For all foreclosures conducted in the name of MERS, the member
shall take all reasonable and necessary steps to avoid having Mortgage Electronic Registration
Systems, Inc. take title to the applicable property that is the subject of a mortgage loan.
Mortgage Electronic Registration Systems, Inc. shall not be obligated to take title to any property
that is the subject of a mortgage loan; provided, however, that if the Member so requests,
Mortgage Electronic Registration Systems, Inc. may take title at the conclusion of the foreclosure
sale upon prior written consent to the Member from Mortgage Electronic Registration Systems,
Inc. If title is taken in the name of Mortgage Electronic Registration Systems, Inc., the Member
vJune2009
27
shall take all necessary and reasonable steps to remove Mortgage Electronic Registration
Systems, Inc. from title as soon as possible.
(e) If title is put into Mortgage Electronic Registration Systems, Inc.’s name and
there is a violation of state, county or city codes or any other applicable regulation; including, but
not limited to, non-payment of tax bills, the Member shall be responsible to promptly take all
necessary action to prevent fines or judgments from being entered against MERS. If the Member
fails to do so, MERS may take such action and will sanction the member for all costs and
expenses; including, but not limited to, attorney fees.
Actual physical possession is quite critical. Now, the note may become ‘lost’ or ‘destroyed’ but that raises other issues. Mers handles it this way:
MERS rules don’t allow members to submit lost-note affidavits in place of mortgage notes, said R.K. Arnold, the company’s CEO.
“A lot of companies say the note is lost when it’s highly unlikely the note is lost,” Arnold said. “Saying a note is lost when it’s not really lost is wrong.”
The usual way to get around the lost note is via affidavit by the party seeking to enforce the note that after due diligence the ORIGINAL note cannot be found and attached is a certified COPY. Of course, that begs the question of how do you produce a copy when you say you lost the original? Moreover, who goes around losing original notes for hundreds of thousands of dollars (or more) of debt?
So you can see why production of the original note is so important.
bench craft company reviews
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
benchcraft company scam
bench craft company reviews
benchcraft company scam
Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
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Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.
Judges are unlikely to look favorably on a bank that claims paperwork flaws don't matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book "Foreclosures."
"There has to be a cornerstone of integrity to the process," Coffey said.
Bank of America responded to Tiktin's depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. "This review will ensure we have a full understanding of any potential issues and quickly address them," Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank's foreclosure customers have not made a payment in more than 18 months.
JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.
Litton Loan Servicing did not respond to a request for comment.
Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.
For a housing recovery to occur, all the foreclosed properties -- which could account for 40 percent of all residential sales by 2012 -- need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.
"This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?" says Cris deRitis, director of credit analytics at Moody's Analytics. "We need to fix these issues before the economy can recover."
Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you've reviewed documents you've never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.
So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.
But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of "foreclosure king" David Stern, now under investigation by the Florida attorney general's office. "Pending the outcome of the AG's investigation, Citi is not referring new matters to this firm," the bank said in an e-mailed statement.
Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern's firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.
Stern's lawyer, Jeffrey Tew, did not respond to a request for comment.
Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.
The Earls and their attorney now allege that they were victims of fraudulent paperwork.
Curt Anderson contributed from Miami.
Get HuffPost Business On
Twitter, Facebook, and Google Buzz!
Know something we don't? E-mail us at huffpostbiz@gmail.com
I am a retired lawyer and cannot offer legal advice and my field was not Secured Transactions, but I can do research and give you the info freely available on the web. For starters:
This is from the MERS website regarding how they handle foreclosure:
Mortgage Electronic Registration Systems, Inc. (“MERS”) is a proper party that can lawfully foreclose as the mortgagee and note-holder of a mortgage loan. MERS Membership Rule 8 provides required guidelines that must be followed when MERS is the foreclosing entity. Please click here to access the Rules of Membership, and reference the Rule 8 requirements.
In mortgage foreclosure cases, the plaintiff has standing as the holder of the note and the mortgage. When MERS forecloses, MERS is the mortgagee and it is the holder of the note because a MERS officer will be in possession of the original note endorsed in blank, which makes MERS a holder of the bearer paper. MERS will not foreclose unless the note is endorsed in blank and held by MERS.
http://www.mersinc.org/Foreclosures/index.aspx
Notice how MERS acknowledges that only the holder of the note and the assigned mortgagee will it foreclose. They know they need both. They want the note in blank so that it remains a bearer instrument: “… when the endorsement is “in blank” – then only the party with actual possession of the note can be paid on it. Essentially, “in blank” is like turning the note into cash and so only the person with the cash in hand can spend it. [See California Commercial Code Section 3205].”
http://aforeclosurealternative.com/?p=439
The note is the key; without the note all else fails. The note is the obligation; not the mortgage. And ONLY the entity that has the note can enforce the note. These blank bearer notes can be a problem because it isliving document. Anyone who finds it can sue to enforce it. Here is the actual rule that MERS uses for foreclosures:
RULE 8
FORECLOSURE
Section 1. (a) With respect to each mortgage loan for which Mortgage Electronic
Registration Systems, Inc. is the mortgagee of record, the beneficial owner of such mortgage loan
or its servicer shall determine whether foreclosure proceedings with respect to such mortgage
loan shall be conducted in the name of Mortgage Electronic Registration Systems, Inc., the name
of the servicer, or the name of a different party to be designated by the beneficial owner.
(b) The Member servicing a mortgage loan registered on the MERS
System shall be responsible for processing foreclosures in accordance with the applicable
agreements between such Member and the beneficial owner of such mortgage loan.
(c) In the State of Florida, the authority to conduct foreclosures in the
name of MERS granted to a Member’s Certifying Officers under Paragraph Three of the
Member’s MERS Corporate Resolution is revoked. Effective June 1, 2006, the Member shall be
sanctioned $10,000.00 per violation for commencing a foreclosure in Florida in the name of
MERS.
(d) In the event that the beneficial owner or its designated servicer
determines that foreclosure proceedings shall be conducted in the name of a party other than
Mortgage Electronic Registration Systems, Inc., the servicer designated on the MERS® System
shall cause to be made an assignment of the mortgage from Mortgage Electronic Registration
Systems, Inc. to the person designated by the beneficial owner, and such beneficial owner shall
pay all recording costs in connection therewith.
Section 2: (a) If a Member chooses to conduct foreclosures in the
name of Mortgage Electronic Registration Systems, Inc., the note must be endorsed in blank and
in possession of one of the Member’s MERS certifying officers. If the investor so allows, then
MERS can be designated as the note-holder.
vJune2009
26
(i) The Member shall not plead MERS as the note-owner in
any foreclosure document; including but not limited to, the
foreclosure complaint.
(ii) The Member shall not plead MERS as a co-plaintiff in a
foreclosure action.
(iii) If the note is lost or cannot be located, the Member shall not
commence a foreclosure action in the name of MERS, but rather
must assign the mortgage out of MERS.
(b) In non-judicial foreclosure states, if the Member chooses to foreclose
in MERS name under the power of sale provision in the security instrument and is not seeking a
deficiency judgment, then the note does not need to be in the possession of the Member’s MERS
Certifying Officer when commencing the foreclosure action; provided, however, that under no
circumstances may the Member allege that the note is in their possession unless it so possesses.
(c) If the Member pleads MERS as the note-owner or as a co-plaintiff or
commences a foreclosure in the name of MERS when the note is lost or cannot be located, it
shall be considered a violation of the MERS Membership Rules and MERS may dismiss such
foreclosure action. Effective June 1, 2006, the Member shall be sanctioned $1,000.00 for the
first violation and $5,000.00 for each subsequent violation of this Rule.
(d) For all foreclosures conducted in the name of MERS, the member
shall take all reasonable and necessary steps to avoid having Mortgage Electronic Registration
Systems, Inc. take title to the applicable property that is the subject of a mortgage loan.
Mortgage Electronic Registration Systems, Inc. shall not be obligated to take title to any property
that is the subject of a mortgage loan; provided, however, that if the Member so requests,
Mortgage Electronic Registration Systems, Inc. may take title at the conclusion of the foreclosure
sale upon prior written consent to the Member from Mortgage Electronic Registration Systems,
Inc. If title is taken in the name of Mortgage Electronic Registration Systems, Inc., the Member
vJune2009
27
shall take all necessary and reasonable steps to remove Mortgage Electronic Registration
Systems, Inc. from title as soon as possible.
(e) If title is put into Mortgage Electronic Registration Systems, Inc.’s name and
there is a violation of state, county or city codes or any other applicable regulation; including, but
not limited to, non-payment of tax bills, the Member shall be responsible to promptly take all
necessary action to prevent fines or judgments from being entered against MERS. If the Member
fails to do so, MERS may take such action and will sanction the member for all costs and
expenses; including, but not limited to, attorney fees.
Actual physical possession is quite critical. Now, the note may become ‘lost’ or ‘destroyed’ but that raises other issues. Mers handles it this way:
MERS rules don’t allow members to submit lost-note affidavits in place of mortgage notes, said R.K. Arnold, the company’s CEO.
“A lot of companies say the note is lost when it’s highly unlikely the note is lost,” Arnold said. “Saying a note is lost when it’s not really lost is wrong.”
The usual way to get around the lost note is via affidavit by the party seeking to enforce the note that after due diligence the ORIGINAL note cannot be found and attached is a certified COPY. Of course, that begs the question of how do you produce a copy when you say you lost the original? Moreover, who goes around losing original notes for hundreds of thousands of dollars (or more) of debt?
So you can see why production of the original note is so important.
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Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
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Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
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Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
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Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
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Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
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President Obama is using a rare "pocket veto" to kill a bill that would allow mortgage companies to affix an electronic notary seal to foreclosure documents, thereby making the process easier and faster for the organizations to push through. Using an electronic notary seal would also allow foreclosure documents to be accepted across state lines and then potentially by more than one state, according to a Yahoo News report.
Obama has nixed the legislation in response to concerns over allegations that mortgage companies are using flawed documents to falsely issue foreclosures. The Yahoo report also highlights additional protests that were raised by consumer advocates, who pointed out that the bill would make it harder for homeowners to challenge foreclosure documents prepared against them by companies in other states.
"Pocket" vetoes are rarely used, as they usually ignite a storm of conflict between Congress and the president, regardless of affiliation. Unlike a regular veto, which sees the bill passed back to Congress and can be overridden by a congressional vote, pocket vetoes are permanent and irrefutable according to the Constitution, explains the Washington Post. The pocket veto can only be used while Congress is adjourned and not in session, and the bill is not returned; it is kept by the President. The term pocket veto comes from the image of the President keeping the bill upon his person.
While this bill sailed through Congress, analysts were not surprised to see Obama nix it, but it will ignite controversy anyway. Obama has only issued one other veto in his presidency so far, in December of last year, and it ignited a firestorm of criticism for his controversial use of the pocket veto at that time. Congress was in recess at the time, but had been holding small meetings here and there during the holiday break. Obama issued his first pocket veto amid arguments as to whether or not the Constitution allowed him that power, since Congress was not fully adjourned. He caused further confusion by sending the bill back to Congress, when pocket vetoes are not supposed to be returned, according to the Huffington Post. His use of the pocket veto again for only his second veto of his administration will ignite more criticism and constitutional debate than his refusing to sign the actual bill.
George W. Bush, in his second term in office, also exercised his right to the pocket veto, and in the same confused manner as President Obama has done. In 2007, he told Congress he was issuing a pocket veto, in this case for a massive defense spending bill, and then returned the document. That was lost, however, in the firestorm ignited by Bush vetoing a defense spending bill in a war time situation, according to HNN at the time.
Pocket vetoes really hadn't made an appearance in national politics for awhile, until the first President Bush made use of the option in his presidency almost half as many times as he issued regular vetoes. He pocket vetoed 15 bills versus issuing a regular veto for an additional 29 bills during his presidency, according to records on Senate.gov.
The use of the pocket veto tends to strain congressional relations with the President because it gives them no option to work on the bill. Constitutional experts are also increasingly concerned with the habit of the last two administrations of blurring the line between a regular veto and a pocket veto. This could give rise to the concept of an absolute veto, which would require legislation from Congress to stop the practice.
Sources
Alan Zibel and Ben Feller, "Obama sends foreclosure docs bill back to Congress." YahooNews.com
Ben Pershing, "House to vote on Obama's first veto." WashingtonPost.com
Robert J. Spitzer, "Pres. Obama, don't make this veto mistake." TheHuffingtonPost.com
MSNBC.com, "Bush to reject defense bill with pocket veto."
David Waldman, "Congress Matters: The pocket veto is finished." CongressMatters.com
Robert J. Spitzer, "Is Bush Inventing Another Constitutional Power?" HNN.com
Senate.gov, "George H.W. Bush."
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Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
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Fox <b>News</b> Ratings HUGE For Final Chilean Miners' Rescue
Fox News saw a staggering 7 million viewers as the final miner was rescued in Chile Wednesday night. The network averaged 7.066 million total viewers in the 8PM hour (when the final miner was rescued) and 4.862 million total viewers in ...
Fox <b>News</b> Ratings | Chilean Mine Rescue | Chile - Cable <b>News</b> | Mediaite
Americans were gripped Tuesday night by images from the scene of the Chilean miner rescue. But whose images gripped them most? While CNN won during one hour, Fox News Channel, dominated prime time as usual, ahead of CNN, MSNBC and HLN.
Wii Remote/Motion Plus combo dated Wii <b>News</b> - Page 1 | Eurogamer.net
Read our Wii news of Wii Remote/Motion Plus combo dated.
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