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Forget about what partisan like myself and other foreclosure defense attorneys say. Ignore our honest, heartfelt pleas that we’re not just trying to defend the cases for our clients…we’re also trying to protect our courts and protect our system of private property ownership that has existed for 400 years. Ignore the representations that we have been trying to protect our land title system and our warning cries that MERS was destroying private property ownership in this country.
Listen to what the National Association of Land Title Examiners and Abstractors has to say:Tweet this!Scridb filter
Fannie Mae, the nation’s largest provider of mortgage funding, has asked a Broward County judge to order the Fort Lauderdale law firm it fired this month to turn over its case files.
As part of a lawsuit filed by Fannie Mae on Feb. 11 —— one day after it cut ties with Ben-Ezra & Katz —— the mortgage giant sought a preliminary injunction to force the law firm to turn over files on its more than 15,000 cases statewide.
Fannie Mae claims it will suffer “irreparable harm” if the files are not transferred immediately because they contain original promissory notes and mortgages “which, of course, cannot be replaced.” The judge has not yet ruled.Tweet this!Scridb filter
The pooling and servicing agreement (PSA) is a contract that should govern the terms under which trillions of dollars worth of equity in the land of the United States of America was flung around the world. These contracts should govern how disputes over ownership and interest in the land that was the United States of America should be resolved. Pretty simple stuff, right? I mean if I’m a millionaire big shot New York Lawyer working for big shot billionaire Wall Street Investors and banks, then I’d do my job as a lawyer to make sure the contract was right and that all the i’s were dotted and the t’s were crossed right?
But that’s not at all what’s happened. In our scraggly street level offices, far below the big fancy marble encased towers of American law and finance, simple dirt lawyers defending homeowners started actually reading these contracts. We ask lots of questions about just what all those fancy words in their big shot contracts mean. Invariably, the big shot lawyers and the foreclosure mills tell us, “Don’t you worry about all them words you scraggly, simple dirt lawyer. Those words aren’t important to you.”
But increasingly judges recognize that the words really do mean something. Take note of the following statements from the recent Ibanez Ruling:
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.
The Ibanez decision underscores the fact that it is important for all of us to know and understand how the pooling and servicing agreements directly impact what is occurring in the courtroom. And for assistance with understanding the PSA and how to find it, more commentary from Michael Olenick at Legalprise:
Overview of PSA’s
Securitized loans are built into securities, which happen
to look and function virtually identically to bonds but are
categorized and called securities because of some legal restrictions
on bonds that nobody seems to know about.
The securities start with one or more investment banks, called the
Underwriter (should be called the Undertaker), that seems to disappear
right after cashing in lots of fees. They create a prospectus that
has different parts of the security that they are proposing. Each of
these parts is called a tranche. There are anywhere from a half-dozen
to a couple dozen tranches. Each one is considered riskier.
Each tranche is actually a separate sub-security, that can and is
traded differently, but governed by the same PSA, listed in the
Prospectus. Similar tranches from multiple loans were often bundled
together into something called a Collateralized Debt Obligation, or
CDO. So besides the MBS there might also be one or more CDO’s made up
of, say, one middle tranche of each MBS. Each tranche is considered
riskier, usually based a combination of the credit-scores of the
people in the tranche and the type of loans (ex: full/partial/no doc,
traditional/interest-only/neg am, first or secondary lien, etc…).
CDO’s were eligible for a type of “insurance” in case their price went
down called a Credit Default Swap, or CDS (also known as “synthetic
CDO’s”). There was actually no need to own the CDO to buy the
insurance and many companies purchased the insurance, that paid out
handsomely. [That's what the AIG bailout was for, because they didn't
keep adequate reserves to pay out the insurance policies.]
Later, investors could also purchase securities made up of multiple
CDO’s, much the same way that CDO’s were made up of tranches of
multiple MBS’s. These were called “CDO’s squared.” Not surprisingly,
there were also a few “CDO’s cubed,” CDO’s of CDO’s squared. CDO’s
were virtually all written offshore so little is known about who owns
them, except that they were premised on the idea that since there was
collateralized mortgage debt at their base they could not collapse.
Their purpose was to spread the various of risks of mortgages which,
back then, meant prepayment of high interest debt and default.
Investors were actually way more obsessed with prepayment because they
thought the whole country could not default; to make sure of that
MBS’s and all their gobbly gook were spread around the country; you
can see where in the prospectus. They were almost more concerned with
geographic dispersion than credit dispersion.
After that it’s the the servicers/trustee/document custodian scheme
we’re all familiar with. OK .. with that too-strange-to-make-up explanation means let’s dive
into how to find one’s loan:
1. Find the security name: it will be a year (usually the year of
origination), a dash, two letters, then a number. It will be
somewhere in one of your filings. For this we’ll use a random First
Franklin loan, 2005-FF1. [Note; they would just sequentially number
them, so the first security First Franklin floated in 2005 would be
FF1, then FF2, etc...]
1. Go to the SEC’s new search engine:
2. Click the first link, Company or fund name…
3. Choose the radio button marked “contains” and type in the ticker;
that is 2005-FF1
4. There will be multiple filings but one of them will be marked
424B5. Click that, it’s the prospectus.
If you really want to have fun, and want to know what happened after
2008 when these all disappeared, type the ticer (again, 2005-FF1) into
the full text link from the first search page. There you’ll see lots
and lots of filings as pieces and parts of the security are blasted
everywhere. To track yours you have to find which tranche you ended
up in. Sometimes it’s in the filing but, if not, you can usually
figure it out from the prospectus if you know basic origination info
(credit-score, type of loan, where the house is, etc…); some even
list loan amounts.
One warning on those secondary filings, servicers and trusts both
break them out as assets. How one loan can be reported as an asset in
two places is a mystery, but considering this doesn’t even cover the
CDO’s and CDS’s dual reporting doesn’t seem to strange. You’ll see
your loan keep wandering through the financial system, with one
exception (next paragraph), right up to the present day. You can even
see how much the investment banks thinks that its worth over time
since they report out both original amount and fair market value.
The exception — when your loan really does disappear — is when it
was eaten up by the Federal Reserve’s Toxic Loan Asset Facility, TALF.
But you can look that up to and see how the government purchased your
loan for full-price, when investors on the open market were only
willing to pay a few cents on the dollar. If your loan went to TALF
you can find it in the spreadsheet here:
http://www.federalreserve.gov/newsevents/reform_talf.htm Your loan
will be in the top spreadsheet and the genuine lender in the bottom.
305 Puritan Rd.
W. Palm Beach, FL 33405
The Florida SUPREME Court passed a rule. A very simple rule really. It said, “Foreclosure mills and banks, please, pretty please, tell the truth.” That’s all the rule is. And despite how simple and basic this rule is, the banks and foreclosure mills have gone nuts. First then just ignored this rule all across the state. To this day, some of the foreclosure mills continue to ignore the rule or play games with it. Far too often they get away with it. Letting them get away with it is a dramatic example of the breakdown in our entire system of government because judges were the last line of defense against corporations gone wild. When judges refuse to enforce laws designed to protect the common man, the corporation’s Rule of Law becomes institutionalized.
And now the Florida Legislature wants in on the action. The legislature is bought and paid for by the banks and foreclosure mills. The legislature is incensed that judges might a) pass rules to require truth and integrity and b) pass rules that impede the foreclosure mills from grinding along with their misdeeds. Never mind that this is the Florida SUPREME Court we’re talking about here. After all, what do they know? And so the response of the Florida Legislature is to introduce a proposed amendment to the Florida Constitution that would gut the Florida Supreme Court and the third branch of government.
“No court shall have the power, express or implied, to adopt rules for practice and procedure in any court. Court rules of practice and procedure may be recommended by the Supreme Court to be adopted, amended or rejected by the legislature in a manner prescribed by general law. If there is a conflict between general law and a court rule, the general law supersedes the court rule.”
Scary really, and hopefully the Florida Senate will realize just how obscene this amendment is. But it is a dramatic example of just how powerful the foreclosure mills and the banks are in the state. They’re angry because Florida’s courts are attempting to do just what our founding forefathers intended that they do….protect us all from overreaching corporations and their supreme influence.Tweet this!Scridb filter
Many of the attorneys that are out there fighting for homeowners and consumers show the very highest honor and calling that is the profession of law. The attorneys that are fighting for homeownerrs– and especially those who articulate that the fight for homeowners is also a fight to protect the integrity of our courts, our judges and this heart and soul of this country– show the general public the highest calling of the profession.
But this fight is not without severe and profound consequences for those attorneys who soldier on in this battle….but this battle must be fought because the fundamental rights of every single American are at stake every single time a homeowner walks into a courtroom and every time a homeowner loses a home in a non judicial foreclosure proceeding. As I endure the very real attacks, I must continue to be clear that my objectives are to support and defend our country, our courts, our judges from what is occurring. I’ve been sharing some thoughts about how the attack on court laws and procedures had resulted in a fundamentally unfair system and wanted to share some feedback to those comments I received from Michael Olenick at Legalprise because I found his comments so powerful….
One thing I remember, is how similar the
Star Chamber resembles foreclosure court. People make bad comparisons
to the Chamber all the time and they’re usually wrong .. but rocket
docket really is a dead on parallel.
* The Star Chamber was mainly used for evictions. I’ll skip the
treatise in English land law except to say that was functionally the
same as a foreclosure.
* The torture you hear about was uncommon until the end, when the
Chamber became widely used for political persecution. The primary
purpose of the chamber was rigged foreclosure hearings. People
described it as eerily normal; out would come the chancellor (judge),
his helpers, and the defendant would have a brief rigged trial and
almost always lose. Not always, but almost always.
* Where the torture did happen was for lawyers of Star Chamber
defendants. I won’t go into detail — they’re horror stories — but
they absolutely sent a message you’d better not try to hard with a
Star Chamber defendant, if you decided to take those cases at all.
Lawyers were tortured .. history remembers them as heroes, though I’m
guessing that doesn’t help much. Defendants who couldn’t find a
lawyer to represent them — keeping in mind that virtually all
land-lords had plenty to pay — lost automatically.
* The hearings themselves were the same: trial by affidavit, it was
nearly impossible to cross-examine the affiant, perjury (a capital
offense back them) was widespread, common .. and ignored. They were
open or closed depending on the mood of the Chancellor.
* The whole point was to make sure money flowed back to the King.
Bascially, when the King wanted land — whether it was directly or
indirectly (to give to somebody else) — off went the landlord
(yesterday’s mortgage borrower) to the Chamber. The whole point was
* Even the genesis of the Star Chamber may be land theft. Black, of
Black’s Law Dictionary, wrote the chamber came from the hebrew word to
record .. as in record and litigate land deeds. Historians later said
he was wrong, that there were stars on the court of the chamber. But
the chamber is still around and there are no stars, and nobody ever
wrote about stars, and Black would know — that was back in his time.
Of course, the Star Chamber defendants are how many of the settlers of
this country ended up here. After their minute or two at rocket
docket off they went to the new world. The Chamber is viscerally
hated in US history; when the Supreme Court writes about it (in
decisions as late as last decade) they always throw in an adjective
(ex: the dreaded Star Chamber, the wretched Star Chamber, etc..). Our
founders hated it so much they almost abolished equity courts but
realized some issues weren’t meant for juries so left it, but added
half the Bill of Rights to ensure it never came about again.
Read more about the Star Chamber and consider how the elements described can be applied to today’s judicial and especially non judicial foreclosure proceedings:Tweet this!Scridb filter