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Actually, toilet paper is a real, and useful, product. Even the Koch Brothers make a lot of it. (saving that joke for a later ALEC diary).

In fact, the paper your home loan or mortgage is written on may be less useful, as in, I don't advise wiping your ass with it.  This is going to sound like something we've all heard before, I know, but there's some new information just out today that I'll clue you in on below the filagree d'orange.

Many readers of Kos (here come the comments) are just plain done with hearing about the housing crisis (didja hear, we're out of the woods, we're in Housing Recovery©™®, according to our Prez),... many more of you are convinced that people who got screwed out of their houses, and there are 10 million or so of those neighbors of yours, well, they were just greedy dumbasses who don't know what the meaning of a Contract is.  They got what they deserved.

If those of you in that category can put aside those feelings for just a moment, and focus for a bit on things like, well, evidence; rule of law; common law; real estate law; common sense; and chain of custody, you just might have an AhHa! moment of your own.  Dave Dayen, currently of Salon and previously at FDL tells the story:

f you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)

A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.

This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.

The 2011 lawsuit was filed in U.S. District Court in both North and South Carolina, by a white-collar fraud specialist named Lynn Szymoniak, on behalf of the federal government, 17 states and three cities. Twenty-eight banks, mortgage servicers and document processing companies are named in the lawsuit, including mega-banks like JPMorgan Chase, Wells Fargo, Citi and Bank of America.

Szymoniak was featured in a 60 Minutes episode way back in April of 2011, as she described her struggles and resulting research into robosigning...  

Szymoniak used a chunk of her settlement to set up a Foundation in Palm Beach County and continues today to try to help put an end to the lawlessness that the White House, the Justice Department, many in Congress and your local court system continue to ignore.  The Housing Justice Foundation's mission:

The Housing Justice Foundation is a non-profit organization in West Palm Beach, Florida, dedicated to finding alternatives to foreclosures.
We are committed to telling the truth about predatory lending, fraud in the mortgage securitization process and fraud in loan documentation.
Rather than a solution to the housing crisis, foreclosures are a blunt, transient fix to a complex problem. Foreclosures destroy families, neighborhoods, and force home values down, hurting the entire community.
We support loan modifications with principal reductions to fair market value.
We believe that bank executives and securities company executives who commit crimes should be prosecuted, and that crimes were committed and continue to be committed in mortgage foreclosures nationwide and worldwide.
You can find her website here:

The rest of Dayen's story is found here

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Comment Preferences

  •  Tip Jar (14+ / 0-)

    I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's. - Mark Twain

    by route66 on Tue Aug 13, 2013 at 09:14:28 AM PDT

  •  People with mortgages (3+ / 0-)
    Recommended by:
    phonegery, route66, corvo

    Should en masse request the bank produce the deed. Prove they are the rightful recipient of payment.

    The resulting proof these banks are just scamming homeowners would put the mortgage payments into the economy instead of back in Wall Streets Casino.

    •  Well, in most cases I know of (2+ / 0-)
      Recommended by:
      route66, Horace Boothroyd III

      they can't produce a deed.

      Are there any cases in which homeowners have then successfully argued that the mortgage is null and void?  Seems to me that banks always win, even when they lack the most basic proof that anyone owes them money.

      Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

      by corvo on Tue Aug 13, 2013 at 09:27:10 AM PDT

      [ Parent ]

      •  check this out Corvo, from last week... (2+ / 0-)

        The case is interesting because the (California Supreme)  court analyzed relevant securitization facts in determining that the homeowner had stated a claim based on the foreclosing bank’s lack of authority to foreclose.  The court acknowledged the PSA’s provisions that New York law would apply to the MBS Trust.

        We conclude that a
        borrower may challenge the securitized trust’s chain of ownership by alleging the
        attempts to transfer the deed of trust to the securitized trust (which was formed under
        New York law) occurred after the trust’s closing date. Transfers that violate the terms of
        the trust instrument are void under New York trust law, and borrowers have standing to
        challenge void assignments of their loans even though they are not a party to, or a third
        party beneficiary of, the assignment agreement.
        We therefore reverse the judgment of dismissal and remand for further

        I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's. - Mark Twain

        by route66 on Tue Aug 13, 2013 at 09:31:37 AM PDT

        [ Parent ]

      •  People DO win these battles (4+ / 0-)

        in some courts, and with good legal representation. This tactic ("show me the papers") is most useful in states (28 or 30, I believe) that require a court hearing before a bank can foreclose -- and a number of judges will require the bank to produce the actual wet-signature documents, not just an affidavit signed by who-knows-what-person saying the documents exist.

        The mortgages are not toilet paper. There was an original document (2, actually, promissory note and mortgage), and it got recorded at the Registry of Deeds and is valid. What the mess is about is the mortgages that have gotten bundled, sliced, and diced into securities -- and the transfers and assignments were not properly done. So frequently the entity that claims to "own" the mortgage cannot prove that it does.

        But in theory, you still owe the money to someone, the original bank to whom you promised to pay.

    •  The deed and the note are separate (0+ / 0-)

      things...both of which traditionally would be recorded in the records of the county where property is located. The deed records ownership of the property, the note records the security interest of the lender providing the mortgage. In the old days, that would be a bank, probably a local one, and there'd be no question whether they had a right to foreclose if the owner failed to make his payments. There was also a strict limit on how many loans any bank could make (based on capitalization). But the era of mortgage securitization, which allowed banks or brokers to bundle mortgages and sell them as securities allowed for the continual issuing of new mortgages, since the notes were now chopped up and shared among investors and no longer counted against the bank's capital.

      To facilitate that chopping up and spreading around of mortgage notes, an electronic system called MERS was created to bypass the traditional requirement of ensuring that every note was properly recorded in the local records. (Note: the Wikipedia entry was apparently written by a MERS shill, but the basic outline it gives is nonetheless useful if you have no idea what it is).

      "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

      by Alice in Florida on Tue Aug 13, 2013 at 01:17:38 PM PDT

      [ Parent ]

    •  YOU MIGHT JUST OWN IT (1+ / 0-)
      Recommended by:
      Horace Boothroyd III

              If there are forged docs or the chain of ownership is not proper and well preserved you just might own the home and owe no one a penny. You might also be able to file suit if a company has tried to collect from you without proper ownership of the mortgage. After all fear, distress and trauma can be created by threat of foreclosure.
               And it gets even better. You are entitled to all of the people involved to be summoned to court. The evidence for all of the transfers and documentation are often by employees who now work for other firms, may live at great distances and have zero reason to obey a summons from another state and may very well have deep grudges against banks or firms that laid them off. You do not have to accept long distance testimony and you do have the right for a jury to look them in the eye and catch the tone and demeanor of the witnesses. The cost of the lawyers and getting all the people involved to testify may well be greater than the value of the mortgage as well. If you fight they very well may surrender just to protect the information they would be forced to reveal that might get a lot of attention from other debtors.

      •  But if we the people (0+ / 0-)

        Start hammering these banks to prove why we owe them...

        Safety in numbers.

      •  And yet, sometimes the bank (even when (0+ / 0-)

        it is not clear that they hold a mortgage on the entire property, and when it is clear that the original mortgage holder and title company did not do a proper title search, and that the chain of ownership and the deeds of trust have not been properly filed over the years, will continue to bring foreclosure attempts only to be halted by legal proceedings, believing that they can force you to fold because you cannot endure the legal costs.  (voice of experience here, trying to finally close my father's estate in what is now a 6+ year mess with a bank)

        Banks are sort of shitty that way.  But your comment encourages me that I have been right to hold out this long...

        so, thanks.

        Welcome from the DK Partners & Mentors Team. If you have any questions about how to participate here, you can learn more at the Knowledge Base or from the New Diarists Resources Diaries. Diaries labeled "Open Thread" are also great places to ask. We look forward to your contributions.

        Words can sometimes, in moments of grace, attain the quality of deeds. --Elie Wiesel

        by a gilas girl on Tue Aug 13, 2013 at 07:00:06 PM PDT

        [ Parent ]

  •  We have almost paid off our mortage (6+ / 0-)

    It has been sold and resold many times. Currently it is held by Wells Fargo. I'm concerned that we won't be able to get clear title to the deed when we are all paid up.

    •  And if you can't take title to your house, (3+ / 0-)
      Recommended by:
      DRo, ColoTim, Cassandra Waites

      it isn't your house.  So whose house is it?

      Dogs from the street can have all the desirable qualities that one could want from pet dogs. Most adopted stray dogs are usually humble and exceptionally faithful to their owners as if they are grateful for this kindness. -- H.M. Bhumibol Adulyadej

      by corvo on Tue Aug 13, 2013 at 09:28:26 AM PDT

      [ Parent ]

  •  I Just Paid My Mortgage In Full (8+ / 0-)

    I got a letter form Wells Fargo that says my loan was paid in full, and that all documents to ownership will be mailed to the county or myself according to Florida regulations.  Maybe I should follow up on the documents to be sure they are sent to the county.  

    "Don't Let Them Catch You With Your Eyes Closed"

    by rssrai on Tue Aug 13, 2013 at 09:56:50 AM PDT

    •  You should definitely (5+ / 0-)

      follow up.

      One of the stories that's stuck in my head from all this mess it the guy who paid cash for his house, who owned it outright, but who a bank tried to foreclose on anyway. Because of some previous owner, maybe. Who knows.

      "The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything. [...] There would be no place to hide."--Frank Church

      by Joan McCarter on Tue Aug 13, 2013 at 10:26:51 AM PDT

      [ Parent ]

      •  There have also been cases (3+ / 0-)

        where the crews sent to physically take charge of the house and prepare for auction have broken into the wrong property and "foreclosed" on a neighbor's property rather than the right one....when things are done in a hurry because there's no many of them to do, mistakes happen. Really horrendous mistakes sometimes.

        "All governments lie, but disaster lies in wait for countries whose officials smoke the same hashish they give out." --I.F. Stone

        by Alice in Florida on Tue Aug 13, 2013 at 01:23:53 PM PDT

        [ Parent ]

    •  wait 30 days and check with county (5+ / 0-)

      Some counties have the real estate records online now. Otherwise, call them up and ask how to verify that the release is actually on record.

      You should also send a copy of the letter to your homeowners' insurance company, so that they stop listing the bank as a co-insured -- if God forbid you have a claim, you do not want a check made payable jointly to you and to Wells Fargo. And keep that letter in a very safe place; I'd probably also scan it and keep an electronic copy.

      Oh, and congratulations! Paying off a mortgage is a great accomplishment.

    •  Congratulations, feels great don't it? Yes follow (0+ / 0-)

      up and make darn sure that everything is properly filed including the actual reassignment of title and the final payment on the note itself......

      Mine was one of the best days of my life and at an early age....It's all that has allowed me to keep afloat for these last 10 years between injury and fighting the SSA....If I still had a mortgage, I would have been on the damn streets.....

      Nothing quite like that feeling of freedom when the date rolls around to mail the check and you remember you don't have to do that any more.....

      Vaya con Dios Don Alejo
      I want to die a slave to principles. Not to men.
      Emiliano Zapata

      by buddabelly on Tue Aug 13, 2013 at 01:48:11 PM PDT

      [ Parent ]

  •  Someone needs to dig into the Servicing Transfers (1+ / 0-)
    Recommended by:
    Joan McCarter

    that are rolling across the mortgage industry.

    The new capital requirements somehow triggered the TBTJ banks into funneling the servicing of mortgages to subprime ripoff corps (or subsidiaries etc...) who have crawled out of the financial meltdown woodwork to suck some blood from Americans.

    We all know NOT to send payment to PO Boxes. You can NOT get service on a PO Box. That means you use must use the company's physical street address for your payment and use FedEx so you get signed confirmed delivery during the transfer period when your bank sheds the servicing of your loan to these predatory crooks. They won't provide that street address upfront... in fact they will deliberately steer you to a PO Box. You'll have to search for street address to use for FedEx-ing payment.

    I'm presuming the folks with the 3.3% mortgage interest rates are the ones they want to furtively relieve of their properties.

    One does not become enlightened by imagining figures of light, but by making the darkness conscious. --Carl Jung

    by bronte17 on Tue Aug 13, 2013 at 10:20:18 AM PDT

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