Banker husband of ex-DNC Chair Debbie Wasserman Schultz is accused of trying to dupe 70-year-old

Daily Mail ^ | 30 November 2017 | Jose Lambiet

[HotHunt]

I was a mortgage banker most of my working career. I understand the confusion that the loan business can have on lay people, including reporters, who should know more about a subject when they are going to write about it.

So you're probably correct. But I'm 70 years old myself and I don't see how one could claimed to be duped into doing something like was asserted without some shenanigans going on.

Being duped is one thing. Being just plain dumb is another. But we don't which it is, based on the reporting.

[Jimmy Valentine]

You are correct about the use of a deed in lieu. Saves time and money. But of interest here is that Schultz wanted the property signed over to him personally.

[Jimmy Valentine]

Try it this way: the property is signed over to Schultz personally. Schultz has the bank he controls write off loan as a bad debt against the loan loss reserve. He the remortgaged the property using money to fix up and release the space.

[norwaypinesavage]

"he questioned DiMaria's lack of business sense, saying that DiMaria overpaid for the 17,000-square-foot strip mall."

Even more stupid was Schultz giving him the loan to buy it.

[GailA]

BTT

[ridesthemiles]

Birds of a feather.......

[Milton Miteybad]

Try it this way: the property is signed over to Schultz personally. Schultz has the bank he controls write off loan as a bad debt against the loan loss reserve. He the remortgaged the property using money to fix up and release the space.

Ehhh...maybe. In my mind, though, that still leaves title issues that will have to be cleared up before a new mortgage is issued, and the only party that can do that is the bank, not Schultz.

The normal chain of title in a foreclosure would look like this:

DiMaria (Mortgagor) ---> Mortgage with Power of Sale ---> Bank ---> Default and foreclosure ---> Trustee's Deed or Deed-in-lieu ---> Bank. To the extent the value of the property exceeds the outstanding loan balance, the note and lien securing the mortgage is extinguished.

Under the scenario you describe, the chain of title looks like this:

DiMaria (Mortgagor) ---> Mortgage with Power of Sale ---> Bank ---> Default and foreclosure ---> Trustee's Deed or Deed-in-lieu ---> Schultz.

The issue I'm seeing is that, as a matter of record title, since Schultz apparently was not the holder of the note and lien securing the mortgage, he cannot effectively release the mortgage. Only the bank can do that. At a minimum, the next title examiner is going to require a release of the first mortgage from the bank in order to write the title policy covering any mortgage Schultz may seek to take out.

But maybe Schultz could persuade his bank to issue that release. Then when the next state or federal bank audit rolls around, the banking examiners look at this transaction and start asking if Schultz paid the bank for the property he acquired as a result of the deed-in-lieu. After all...the bank was the secured party, not Schultz. The bank should have ended up with the property, not Schultz. Under the scenario you describe, the bank eats the whole debt while Schultz ends up with their collateral in his pocket.

I'm guessing this Schultz guy has been in the mortgage business long enough to know that he doesn't really want banking examiners asking questions like that, unless he can show satisfactory proof that he paid the bank for this property that had served as collateral for one of their loans. Given the scant facts offered in the article, it's hard to tell that he would be able to give a satisfactory answer to that question.