Yves Smith does an excellent job of breaking down an important loss that the foreclosure defense community took in a recent Alabama case. So why are we taking time to broadcast and talk about a loss? Well, sometimes you learn more from losses than you do with cases that are won…..and as Yves analyzes the “loss” you will see important avenues for attack that are opened up. The bottom line is most of the mortgages that are being foreclosed on are governed by the PSA which is governed by New York Trust law. Now we know that the plaintiffs and foreclosure mills are just ignoring all sorts of procedural elements in their rush to foreclose, just slinging assignments and slaping on endorsements to meet the requirements of each case….regardless of the underlying facts. As an example of this, read carefully the order below and the detailed allegations regarding fraud. But the larger point is even when they’re doctoring the facts and forging and faking assignments and endorsements, they’ve got to follow the requirements of the PSA and they’ve got to fulfill the requirements of New York trust law….which they almost never do.
Most Plaintiffs if they have the original note proceed by way of a blank endorsement and there’s real question about whether the PSA or New York trust law even allow blank endorsement. (The requirement may be to proceed by way of a specific endorsement, which is never, ever done.)
Now the real take away from all this is just how screwed up the wizards of Wall Street have made what was for hundreds of years a very simple matter. Borrower borrowed money; lender owed money. We’re all light years away from those simple times…with disastrous consequences. I have no pity or sympathy for the banks. All they had to do was do their job correctly and stop all the lying and fraud. They did not do their job correctly and the fix our courts are now in is a large part because of the fraud and the games they’ve been getting away with. Still coming is the fallout when title insurers fail to accept the title to these properties…then what?
So read the Order: