Tuesday, August 13, 2013

Reality is Not on the Menu

Every time I speak with lay people or lawyers who are new to the twilight world of foreclosures, about half our time is spent on dealing with reality — the way that Judges look at these cases and the other reality — the way the transactions, payments and disbursements occurred and between whom. The problem is that most people THINK they know what happened with these mortgages but they are wrong. And the people who are right have not come up with a clear enough explanation to catch the judge’s attention and turn things around.
So let’s try again, using facts and metaphors and basic fundamental laws and standard rules of civil procedure.
Except in certain exotic types of lawsuits nobody can sue anyone else unless they can say that they are getting hurt or have been hurt by something the defendant did. The plaintiff must also state that the defendant was acting wrongfully, illegally or negligently.
In today’s foreclosure world, the complaint or the position in non-judicial states is “we have the note.” Since they proclaim themselves the holder of the note and they proclaim their right to enforce the note, the case is virtually closed UNLESS the judge remembers or is convinced that statements of ultimate conclusions of LAW are not the same thing as short plain statements of ultimate FACTS upon which relief could be granted. If you don’t believe me, look it up. From the U.S. Supreme Court all the way down to the lowest court, if you sue someone you must allege that the other guy hurt you and should pay for it or should be stopped.
In foreclosures the complaint should contain the following statements:
  1. Plaintiff loaned Defendant money (or Plaintiff bought the loan from someone who loaned money). See Exhibits showing the closing documents, canceled check, and current bookkeeping records showing the status of the loan.
  2. Plaintiff is the owner of the loan as shown in the note receivable account maintained by Plaintiff as shown in the attached exhibits.
  3. Defendant failed or refused to make payments pursuant to the agreement (note) executed by Defendant as evidence of the debt.
  4. Defendant executed a mortgage lien (deed of trust) as collateral to be sold in the event of default for the purpose of recovering the debt owed by Defendant to Plaintiff.
  5. As a direct and proximate result of the Defendant’s failure to pay the above debt when due, Plaintiff has been damaged in the principal amount of $258,900.36 plus accrued interest, expenses and costs all as set forth in the record of the defendant’s account.
  6. Plaintiff has sent notices of delinquency, default and acceleration as required by the mortgage and note, copies of which are attached hereto as Exhibits. Defendant was given an opportunity to reinstate as per the attached exhibit and has failed or refused to do so.
  7. Plaintiff has offered the Defendant the right to modify the loan if the Defendant qualified for new underwriting of the loan as required by the Dodd Frank Act and the HAMP laws and rules.
  8. All other conditions precedent have been performed as required by law and contract.
  9. In accordance with the terms of the mortgage (or deed of trust), the property should be ordered sold to satisfy the unpaid portion of the note receivable account owed to Plaintiff.
So that is how foreclosures were sent to the Court before the Wall Street mania hit. Now none of the above allegations are included, none of the above requirements are required by judges, and the result is that whoever starts the foreclosure wins a foreclosure and they get the property, they get to keep the insurance and credit default swap money and they get to keep the money paid to them by the Federal Reserve to cover the nonexistent “loss” of the banks who were using the money of investors to make the loans (at least that portion of the money they had to use to fund mortgages without arousing suspicion as to what they were doing with the rest of it).
Out of the millions of foreclosures and evictions that have been rubber stamped in court, or by state officials, practically none of them were right or legal — not because some “i” wasn’t dotted or some “t” wasn’t crossed but because the account receivable was zero or overpaid and the homeowner owed nothing. For some reason most people find it more pleasing to allow the burden of Wall Street crimes to fall on millions of innocent pawns in PONZI scheme that required theft of the credit and identity of the borrowers, with the banks making a huge profit on the money investors gave them, without repaying the investors or crediting the account receivable. Not one case has correctly stated the amount due. Most cases involve debts that no longer exist because the Wall Street players traded their way around the debt, and got it paid off without turning it over to the investors.
Wall Street can’t pay the investors because that would put an end to the foreclosures. If you put an end to the foreclosures, the investors are going to want to see their  money — all of it, including the  part that was skimmed off (15%-20%) right at the beginning after the first bond was sold but before the application for loan was delivered by a prospective or existing homeowner.
The crazy part of this is that Wall Street stole so much that it could have repaid the investors, and thus avoided the foreclosures and still they would have made a lot of money. But they wanted more. They want it all.
And now they are controlling our natural resources and using aluminum and copper and the like to repatriate money they secreted during the mortgage meltdown. By buying natural resources abroad and selling it here, they can repatriate the money they stole without anyone being the wiser. Or can they? Maybe enough people will realize that the soda can they drink from was paid for by a hapless homeowner who lost their home and is still confused as to how that happened.

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