Posted on 11/15/2007 7:10:13 PM PST by givemELL
Judge Christopher A. Boyko of Federal District Court in Cleveland dismissed 14 foreclosure cases brought on behalf of mortgage investors, ruling that they had failed to prove that they owned the properties they were trying to seize.
(Excerpt) Read more at nytimes.com ...
Probably in this case the “trustee” appears to be Deutsche Bank or some entity controlled by Deutsche, which has not kept its paperwork in order.
As others above have said, the remedy is to get the actual ownership in the mortgage paper transferred and then Deutsche can sue.
Only problem I can see: what if the originator of the loan has gone out of business, or even if it is still in business but can’t find the file with the original mortgage in it?
If Deutsche can’t get the paperwork, they can’t ever enforce the mortgage. And they will probably be liable to the owners of the mortgage-backed securities. Ouch big-time.
As someone said above, the job isn’t done until the paperwork is finished.
My mortgage was purchased in 2002 and yes, I have an ARM which I had hoped to get out of. Closing was set - and I was laid off so no closing. I’m making my payment within the month it is due (but always late). Not so good for my credit. Asked Wilshire if they would agree to a skipped payment and put it on the end of the loan. They said no - that they do not have the power/authority to change the terms of my original note. Does this make sense?
In my view, it’s not really funny. The whole system will go to hell if judges won’t enforce mortgages.
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Thats the point ,, they have been lax for 30+ years in enforcing the banks side ,, their paperwork has been deficient in the past and it was overlooked... The judge has decided that both sides have to comply...
I would put this simply as ... The judge stated “NO TICKEE ; NO LAUNDRY!”
It’s not an issue that involves the mortgagor, though. It’s only an issue between the security holders and the bank. It’s a question of who the security holders want to act on their behalf. To let the mortgagor off because the judge can’t figure out the answer to that tangential question is nonsense. If the judge is confused about it, then fine... require the money and/or foreclosed property to be put in trust until he has a clear answer to that question. There should not be any real doubt about it though. The money ultimately goes to the security holders, not the bank, and who owns the securities is not really in doubt.
actually this is not unheard of. It comes from slopping mortgage closings and incomplete papers.
This will be resolved as the lawyers now have to go back an find the defect and how they will be able to plead correctly.
Possessing rights to payment does not imply right to the property itself. Without the note, DB can’t take possession of the property. This is not a systemic problem, it’s institutional laziness, and it seems the judge is telling everyone to get their sh*t in order before challenging the integrity of the court to look the other way.
My point is that it’s not DB’s rights anyway. DB is acting on behelf of the people who have a right to payment. They are merely an agent.
It’s sort of like if you hired a lawyer to handle a case for you, and he sent one of his associates to go with you to the hearing, and the judge refused to hear the associate because he can’t prove that he works for your lawyer. Who cares? You and he are there, and you’re telling the judge that he represents you. The judge doesn’t need to see the associate’s employment contract in order to decide the case.
No, they have a right to an income stream from a pool of bundled securities, such as BS361-350-121-0a31. That security receives the income from the underlying mortgage payments.
Dead wrong. The plaintiff, Deutsche Bank, has to prove that there is a contract between himself and the alleged debtor. Under the statute of frauds all contracts for land have to be in writing. Deutsche Bank could not produce the contract.
Under the statute of frauds you cannot just allege that there was a contract, etc. You have to produce it. This is to prevent fraudulent lawsuits, which our courts are already rife with.
It is not a legal technicality.
Yes, but in a court of law, only the person with standing can sue to foreclose. The person with standing is the person whose name appears on the deed of trust.
I absolutely agree with the judge, if you file for foreclosure you better damned well be able to produce the mortgage and note physically to the court that you have indeed the right to file foreclosure. Showing up with some document that just says one party agrees to sell to another party some note and mortgage is not proof that you actually hold the mortgage on the property and have legal right to foreclose.
This is elementary stuff, the judge did the absolutely right thing. Good ruling and it should have been handed down years ago.
The same C can and has been used as collateral in multiple Pools... trust me this happens.. and while I’m sure those doing it will claim it was done by “clerical error”.. These are not isolated incidents and Greed played a role in more than a few of them.
Absolutely FALSE. A NOTE and a Mortgage are not the same thing. Without the mortgage, that actually ties the note to the property, the note holder has ZERO authority to take the house when payments are not recieved. Without showing the court they are the true MORTGAGE HOLDER they have ZERO standing before the court to foreclose and take the property.
This is basic stuff, this judge made the absolutely right call and its amazing its taken this long for a Judge to come down with this ruling. No judge should be allowing a foreclosure hearing to procede without the plantiff physically producing the mortgage and proving they are its rightful owner.
The law specifically states that the mortgage follows the note. If you assign the note, you assign the mortgage.
If a particular party is, in fact, the rightful mortgage holder, it should be easy for that party to produce the legal documents required to prove that ownership. As soon as the alleged mortgage holder complies with the law, I’m sure the judge will let the foreclosure proceed.
As long as the mortgage has been properly recorded they will be enforced. The suit just has to be brought in the name of the party who filed the original mortgage or these people have to show a proper assignment of the mortgage.
It is really no different than if you had a promissory note wherein you owed money to John Doe and Bill Smith takes you to court on the note. The judge is saying to Bill Smith, show me how you are entitled to sue on John Doe's note.
Hmmm, looks like if I could get this judge when the IRS comes after me for not paying my federal taxes, I could win. I like the way he thinks.
Maybe it is time to stop paying federal income tax.
>>In my view, it’s not really funny. The whole system will go to hell if judges won’t enforce mortgages.<<
I agree with you. However, it looks like in this case the judge was right. Laws are very specific. Someone will probably eventually foreclose. But this is not about the “squatter” getting off scott free. If that bank only has a letter of “intent” to buy the loan in a pool, but can show that they paid the original mortgage holder for it, they can “eventually” prove they are the ones that can foreclose.
IOW, SOMEONE will eventually foreclose.
OTOH, if the article was accurate when it said that some mortgages were in more than one pool, this little case exposed a MUCH bigger and potentially explosive problem. And it WILL become exposed as banks deal with this ruling.
I suspect there is a lot of scrambling going on in banks all over the world right now.
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