Matt Weidner – Fighting With The American People

Posts Tagged ‘assignment of mortgage’

A child is walking along the beach where thousands of starfish have washed ashore.  Sadly, the starfish will all certainly die. As the child sees this, he begins picking up starfish one by one and tossing them back into the sea so they might live.  An old man watching this walks up to the boy and says, “Why are you wasting your time, there’s so many, you can’t make a difference.” To this cynical comment, the optimistic boy replied just as he was throwing a starfish back in the water…

“I just made a difference to that one.”

I thought about this as I sat in court today where judges were granting summary judgments one after the other in cases where homeowners are not represented by counsel.  For me the real tragedy is that such a small percentage of homeowners actually retain an attorney to defend themselves in foreclosure.  Based on the percentages of improper or defective assignments and endorsements Foreclosure Defense attorneys are finding in cases, a high percentage of these judgments are being granted based on improper evidence.

An even bigger problem is being created because apparently courts across the state are not following an important Rule of Judicial Administration that prohibits case evidence from being removed from the court file and case law dealing with negotiable instruments that demands these negotiable instruments be surrendered to the court after judgment.  These requirements are addressed in the recently issued Appellate Court Decision from the Fourth District, Johnston v. Hudlett.

Attached D’s Motion to Preserve Evidence in Court File – 4-8-10 here is a copy of a Motion I made and recently filed here in Pinellas County.  Courts simply should not be granting summary judgments of foreclosure based on the overwhelming weight of evidence we’re seeing from around the country which establishes a pattern or practice of improper behavior on the part of lenders and their attorneys.

Importantly, courts should not be releasing the evidence after the fact. I’ve drafted correspondence to the Chief Judge of the Sixth Judicial Circuit with the respectful request that the judge enter a standing Order prohibiting the clerks from releasing evidence after judgment.

A brilliant Clearwater, Florida attorney (Greg Clark) has been making a complex and sophisticated argument against the Plaintiffs of foreclosure cases that I frankly struggled to understand.  Boiled down to simple points, the argument is that a mortgage transaction is based on two documents, 1) a note or the obligation to repay the money; 2) the mortgage which secures the obligation to repay the money to real property.  Clark’s argument is that ownership of those two documents must remain united in order for any subsequent party to enforce a mortgage foreclosure.  He argues that when a mortgage is transferred to one party, (in most cases Mortgage Electronic Registration Systems), but the note or the obligation to repay is transferred to another party (like a securitized trust), subsequent transfers of the mortgage (assignment) are invalid.  The argument goes that when the “chain of title” of a mortgage is broken, you must go back and fix the broken link before the chain can be reconnected and foreclosure pursued.

Clark is a title attorney and he, and others (myself included) have real concerns about the validity of title to property when the chain of mortgage ownership does not appear of public record.  When I perform a title search, I can see every mortgage that is recorded against the property.  The problem with the MERS system, where a mortgage went one way and the foreclosing lender comes in from another is I have no way of knowing how that foreclosing lender came into position to foreclose…the public record only shows that the originating lender holds an interest.  We know from depositions and other information, that agents of MERS and lenders are falsifying assignments of mortgages.  Now that this knowledge is becoming widespread, it cannot be ignored. (Read my next post on Lender Processing Services.)

A Mortgage is a Mere Incident to The Debt

A related inquiry that I struggle with is why the two forms of foreclosure?  If a lender has an original note, courts rely on antiquated case law (Johns v. Gillian, 184 So. 140, 143 (Fla. 1938)) which stands for the proposition that “a mortgage is a mere incident to the debt” and a person in possession of the note can proceed with the separate and distinct count to foreclose the mortgage even without an assignment of mortgage.  Other times, the lenders will obtain an assignment of mortgage….even when they are in possession of the original note.  So if the Johns line of reasoning is correct, why bother to ever obtain an assignment of mortgage?  Even if the lender cannot obtain the original note, if the note is re-established it has the same power as the original.  Why fool around with assignments in any case?

A landmark case from the Kansas Supreme Court, (Kessler v. Landmark) delves into these issues…..

The mortgagee is so well understood as the lender that Black’s Law Dictionary defines a “foreclosure” as an action brought by the lender/mortgagee: a foreclosure is a “legal proceeding to terminate a mortgagor’s interest in property, instituted by the lender (the mortgagee) either to gain title or to force a sale in order to satisfy the unpaid debt secured by the property.” Black’s Law Dictionary 674. Similarly, the tie between a mortgage and an underlying debt is so intrinsic that Kansas law provides that “[t]he assignment of any mortgage . . . shall carry with it the debt thereby secured.” K.S.A. 58-2323. Indeed, an assignment of a mortgage without the debt transfers nothing. 55 Am. Jur. 2d, Mortgages § 1002. Thus, the mortgagee, who must have an interest in the debt, is the lender in a typical home mortgage.

But for reasons thought beneficial by a group of lenders who trade mortgages, the form of mortgage used in this case designates an entity that is not the lender as the mortgagee. See MERSCORP, Inc. v. Romaine, 8 N.Y.3d 90, 96, 828 N.Y.S.2d 266, 861 N.E.2d 81 (2006) (MERS was established by large lenders to allow easy electronic trading and tracking of mortgages). Specifically, the mortgage says that the mortgagee is MERS, though “solely as nominee for Lender.” Does this mean that MERS really was the mortgagee, even though it didn’t lend money or have any rights to loan repayments? Assuming so, MERS argues that it was a necessary party to the foreclosure and that the foreclosure must be set aside. But the premise upon which MERS bases this argument is flawed.  What is MERS’s interest? MERS claims that it holds the title to the second mortgage, not the real estate. So it does, but only as a nominee. In terms of the roles that we’ve discussed in the mortgage business, MERS holds the mortgage but without rights to the debt. The district court found that MERS was merely an agent for the principal player, Millennia. While MERS objects to its characterization as an agent, it’s a fair one.

MERS had no right to the underlying debt repayment secured by the mortgage; MERS did not even act as the servicing agent to receive the payments and remit them to the lender. MERS’s right to act to enforce the mortgage was strictly limited: if “necessary to comply with law or custom,” MERS could foreclose the mortgage or enter a release of the mortgage. MERS certainly could not act at odds to its principal, the lender. Its role fits the classic definition of an agent: one “‘authorized by another to act for him, or intrusted with another’s business.’” In re Tax Appeal of Scholastic Book Clubs, Inc., 260 Kan. 528, 534, 920 P.2d 947 (1996) (quoting Black’s Law Dictionary 85 [4th ed. 1968]).

You Can’t Have An Omelet If The Chicken Hasn`t Laid The Egg Yet!

A reader of my blog emailed me three short YouTube Videos that shows in black and white in papers filed in courts across the country how employees of law firms and lenders are creating false affidavits and assignments then submitting these in courts as part of the Bank`s campaign to take borrower`s homes even though they have not established the legal right to do so. I love his quote, which I have printed above and give him great credit for pulling together video and documents that demonstrate some of the notary\affidavit fraud that is rampant in foreclosure cases around the country.  For those of you that have other examples, please send to me for posting.  If you are an attorney or someone interested at all in foreclosure and the fraud being perpetrated in courts across the country, take a few minutes to watch the video.

What these clips demonstrate is how law firms file foreclosure cases on behalf of lenders but then don`t bother to have the proper paperwork they need to file the case created until after the case if filed.  I have previously posted information about a woman named “Erica A. Johnson-Seck”.  According to a deposition transcript taken of Ms. Seck and posted on this blog elsewhere, one of Ms. Seck`s primary job functions is to sign the Assignments of Mortgage that banks use to throw a borrower out of a home.  What these videos demonstrate is that there are a handful of people like Ms. Seck whose job it is to sit in offices across the country, signing documents allegedly on behalf of lenders and MERS, which documents then form the basis for the lender to throw the borrower out of the home. Examples of Affidavit Fraud Several problems are developing with these affidavits.  First, an affidavit must be based on a person`s personal knowledge.  As detailed in the depositions of these “Robo Signers” their knowledge is limited to scribbling something that resembles a name on a piece of paper.  They cannot possibly have personal knowledge of the facts they are swearing to given the volume of papers they are signing and the multitude of companies they are signing allegedly on behalf of. Next, as is demonstrated in the YouTube videos these documents, particularly the Assignments of Mortgage, are typically created after the lawsuit was filed.  Such post-dated assignments are becoming increasingly problematic for the banks and their shady lawyers because when an Assignment is dated after the case has been filed, that is an implicit admission that it did not exist (and thus the Plaintiff did not have a right to file the lawsuit) before the Assignment was executed.  Now, the shady lawyers and banks are trying to get around this pesky problem with creative language in the Assignments such as “This Assignment Occurred Prior to When This Document Was Drafted”, and they will eventually draft their pleadings so that they are not bothered by these pesky details, but for the millions of post dated assignments that currently exist and the tens of thousands of final judgments of foreclosure out there that such posted dated assignments were based upon, they are a real problem. Next, there are real questions about where the affidavits were physically signed and whether the witnesses and notary publics were actually present when these documents were signed.  Signatures which must be notarized must be physically signed in front of the Notary Public in order for that Notary Public to affix their notary seal and signature to that document.  We know from depositions and other evidence that in many cases, the Robo Signer sits in one room or one office while the Notary Public is in another office or building completely. And finally, we come to one of my favorite examples of affidavit\evidence fraud.  Years ago I was in a final hearing before a judge when I noticed that an Affidavit was signed by an attorney that worked in the law office of the Plaintiff who was prosecuting the foreclosure.  The attorney admitted that the affiant worked in the office and in fact told the judge and I that they did it all the time. After the judge`s stern warnings, I sort of naively believed the practice might have stopped, but that belief was plain foolish on my part.  I`ve recently learned that this practice has picked up again with attorneys of Plaintiff`s law firms signing the critical affidavits their firm needs in order to prove up their case.  This is highly questionable behavior for advocates who have a duty to be truthful to the courts, but we`re learning every day that ethics, honesty and the integrity of the court systems are taking a back seat to the lenders and the institutions that are continuing to wreak havoc in communities across the country.

So what`s an attorney or consumer to do?  Subpoena.  If you`re in a foreclosure issue a subpoena to every person who has submitted an affidavit or executed an assignment or other document.  In many cases I think you`ll find that neither the lenders or the attorneys will allow that affiant to testify about their “personal knowledge” under oath.  For those of you out there with other examples…..please send them my way!

Courts Are Overwhelmed With Foreclosures

Across the country, circuit court judges and their staff are becoming overwhelmed and frustrated by the total avalanche of foreclosure cases that have been dumped in their courtrooms.  In Pinellas County, Circuit Court judges who used to handle like 400 foreclosure cases are now handling something like 3,000.These judges still have one judicial assistant and the same limited resources the had before the crisis.  When the judge’s loan JA sits down to start the day, they are bombarded with phone calls and mail and people in their face every single second….it’s chaos, its a burden and it is completely untenable for the long run.

I know, Let’s Throw All The Rules Out The Window

Many of the Plaintiff’s attorneys that are working so hard to throw borrowers out of their home cannot rely on good, solid, honest legal work to accomplish their job.  As an attorney who sees the work of these firms every day, I am just astonished that the Courts continue to allow such horrendous practice to continue unchecked, but there seems to be little desire to try and force a correction of the behavior.  Just in case you think I’m overstating the problem, here is an excerpt from the Florida Supreme Court’s Task Force Report on Residential Mortgage Foreclosures

• Finally, it is critical that these firms be candid, clear, and truthful and accurate in connection with pleadings and affidavits filed with the Courts.  A leading plaintiff’s lawyer and a major plaintiff’s law firm have been the subject of a public reprimand and sanctions due to untruthful filings with the courts.  Judges continue to see affidavits of amounts due and owing signed by law firm employees, and cost affidavits charging very high service of process fees for process serving firms owned by the law firm principals.  To some extent, it is fair to be concerned whether the press of the case load is interfering with a judge’s ability to police the conduct of the firms before them in these usually uncontested, unopposed foreclosure cases.

The full report can be found here but the bottom line is this, the lenders and their law firms are lying, lying, lying.  They’re committing fraud on the courts on an unprecedented scale.  The report of the Supreme Court is a bit sanitized, but the firms are whipping out foreclosure cases so quickly that they’re not even bothering to get the proper documents that prove they have a correct basis to file a suit from the outset.  Some firms have ownership interests in the process servers who are supposed to personally hand the lawsuit to a defendant and they’re both charging exorbitant fees for this service and lying about whether proper service has been obtained or even attempted.  And finally, the biggie….they’re lying, lying, lying about the evidence they’re submitting to the court, these come primarily in the forms of Affidavits and Assignments submitted to support Summary Judgments of Foreclosure.

Affidavits and Assignments in Foreclosure, Liars Re-Telling Lies Re-created From Fiction

There are several areas where the lying is reduced to black and white and submitted to the court.

Assignment of Mortgage

First, when the foreclosing Plaintiff is not the original lender, there must be a formal Assignment of Mortgage executed which says, “The Original Lender Assigns This Mortgage to the Plaintiff in This Case.”  This document is needed to give the Plaintiff the proper legal basis to be suing the Defendant. Many of the originating lenders are no longer operating so getting a real assignment from a dissolved corporation would be difficult.  In other cases, the Plaintiff introduces an Assignment of Mortgage executed by “MERS” a shadowy, shifty, shady backroom dealer of mortgages.   The Assignment of Mortgage issue is problematic even when a mortgage was only assigned from an originating lender to the foreclosing Plaintiff, but in cases where a mortgage has changed hands many times, there should be an unbroken chain of properly executed assignments from originating lender straight through to foreclosing Plaintiff.  (In fact, this requirement of an unbroken chain of assignments was originally part of the foreclosure procedures in Pinellas County, but this requirement was stripped.)  The problem is these assignments are frequently fraudulent.  The lenders know this, their attorneys know this and the courts know this, but they’re all just going ahead and pretending like it’s not an issue. IT IS AN ISSUE!

Affidavit of Amounts Due and Owing

The second area of Affidavit Fraud is the Affidavit of Amounts Due and Owing which states, “Your Undersigned Affiant is an employee of the Plaintiff and I SWEAR Based on my PERSONAL KNOWLEDGE that the Plaintiff is Owed, $150,000″.   In a case where the original lender is the foreclosing Plaintiff, an employee of that lender could sign such an affidavit based on their review of the company’s accounting records.  In most of the foreclosure cases currently pending in courts around the country, the mortgages have changed hands many times and there is simply no basis whatsoever for any person to sign an affidavit stating that they have any knowledge whatsoever of who is owed any money whatsoever.  These affidavits are legally insufficient, they’re false and fraudulent.

Affidavit of Lost Note

The third area of Affidavit Fraud is the Affidavit of Lost Note which states, “Your Undersigned Affiant is an employee of the Plaintiff who had posession of the note when it was lost and while we looked long and hard to find the note, it’s just plain disappeared and we just will never find it.”  In cases where the Plaintiff cannot locate the original note, this Affidavit is required in order to “Re-establish The Lost Note”, a technical process which must be followed in order to successfully and honestly proceed with a foreclosure case.  There are two problems here.  First, in many cases, the Affidavit does not include the correct language wherein the Plaintiff asserts that it was in possession of the note when it was lost.  The affidavit states, “the note was in possession of someone (we don’t know who) when it was lost”.  The other variation of this is when the Plaintiff is in possession of the note but they don’t bother disclosing this to the court.

Laws and Rules Just Don’t Matter Anymore, Everyone Hop On Board The Fraud Train!

So if the Plaintiffs and their attorneys are engaging in massive and systemic fraud and the courts are totally aware of this and yet it’s going totally unpunished and unanswered why doesn’t everyone just get on the fraud train? I mean why not?  Well here’s one way that consumers and anarchists could engage in fraud that would totally throw the system into chaos.  If rebels and anarchists and people who just don’t care executed and recorded Satisfactions of Mortgages across the country, it would send the entire foreclosure system into collapse.  A Satisfaction of Mortgage is a one page document that costs $8.50 to record.  It can be produced on a home computer, filled out correctly then sent in along with a money order or cashier’s check.  The Clerk of Court is required to record it and there would be no way of ever knowing where these fraudulently produced satisfactions were coming from.   While the lenders were trying to figure out how to deal with this massive problem, they would have no choice but to stop the pursuit of the foreclosure cases.

Anarchy Is a Crime- Revolution is a Crime.

Make no mistake, doing this is wrong.  It is a crime. A serious crime.  I would not do it and I’m not seriously suggesting anyone should, especially for their own mortgage.  But what if? I mean what if some modern day Robin Hood or Paul Revere set out with a few hundred bucks and a few hours on a computer and started just sending in satisfactions?  And what if, at the same time these same band of anarchist Robin Hoods also filed with the courts “Notice of Voluntary Dismissal and Release of Lis Pendens”?  I mean when the law firms that are prosecuting these cases are so out of touch that they have no idea what’s happening with their files and they have no contact whatsoever with the lenders they claim to represent, it would take them months to figure out if their law office or their client really did dismiss the case or whether this was another one of those Anarchist Dismissals.

But if the system is so broken down that judges are engaging in systematic denial of a defendant’s rights and if the Supreme Court of Florida is acknowledging in writing

that they are aware of widespread and systemic fraud being perpetrated on courts across the country and they’re doing nothing to stop it,

isn’t a little bit of anarchy in order?