Errors found in 84% of SF mortgages in foreclosure

[n2doc]

John Wildermuth
Thursday, February 16, 2012

More than 80 percent of the residential mortgage loans that have gone into foreclosure in San Francisco contain one or more clear violations of the law, Assessor-Recorder Phil Ting said Wednesday.

While the errors, many of them technical paperwork violations, don't necessarily indicate criminal conduct by lenders and others in the mortgage industry, they do show that changes must be made in California's century-old real estate regulations, he added.

"The whole process ... is absolutely, 100 percent broken and not working for any of us at this time," Ting said. "These rules were made for people who walked or rode their horse to the bank."

A rash of complaints to Ting's office last fall about missing or inaccurate mortgage documents persuaded him to hire an outside company, Aequitas Compliance Solutions of Newport Beach (Orange County), to review a sample of the city's 2,405 foreclosure sales between January 2009 and October 2011.



Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/02/15/MN691N857R.DTL

[TheMastersNemesis]

1. Ownership In Question

Because virtually all mortgages are broken up into thousands of pieces and parceled out no single entity owns the paper. Many are securitized into investments held all over the planet.

It seems like the banks are foreclosing on properties they do not really own. Every mortgage has thousands of owners.

[Yo_Mama]

29. That is completely incorrect

You are confusing rights to the payment stream from the mortgages with ownership of the mortgages themselves.

In securitization, it is true that thousands of entities may own a portion of the rights to the payments on the pool of mortgages backing the security. But the mortgages themselves will have been transferred to a trustee, so a single entity will have the right to foreclose on the property if the mortgage is not paid.

Commonly the servicer will conduct the foreclosure for the trustee, just as the servicer collects the payments and transmits the payments less servicing costs to the paying entity.

This is a pretty simple explanation of mortgage securitization, including REMICs and the role of GSEs:
http://www.investinganswers.com/financial-dictionary/income-dividends/mortgage-backed-securities-mbs-944

[midnight]

2. As attorney generals are encouraged to settle and move on, the toxicity is buried and festers...

[woo me with science]

3. K&R

[TwilightGardener]

4. I am here to say that technical errors don't mean squat, if the parties all

got what they agreed to. A judge will go back to the parties' intentions. UNLESS a homeowner can prove that the errors went against the original contract or that the errors resulted in terms, conditions, etc. that he or she did not agree to, I don't see where suddenly people are going to get their houses back, or get them for free.

[ms.smiler]

5. TwilightGardener, you must not realize that the word “errors” is simply a delightful

substitute for something we know as fraud. There is loan origination fraud, appraisal fraud, ratings fraud, securities fraud, tax fraud, insurance fraud, servicing fraud, filing fraudulent documents in our land records which is a felony in many states, fraud upon the court, Perjury, Forgery, auction fraud, etc.

Until you understand securitized mortgages, you might not understand how these homeowners are being wrongfully foreclosed and how the banks are collecting multiple times upon the same loans.

You mentioned “free houses.” When a party that doesn’t own the loan forecloses on a property, they often collect PMI insurance and obtain a free house. That’s a heck of an “error” isn’t it? Why do you think document mills exist?

No homeowner ever agreed in their mortgage contract for their loan to be converted into a security on Wall Street to be used to defraud investors. No homeowner should be foreclosed by a party that does not own their loan or when the loan is not in actual default.

[Snake Alchemist]

6. Yes, but none of these errors found have anything to do with any of those. nt

[ms.smiler]

8. Snake Alchemist, I'll try and explain the problem.

Most, nearly all mortgages have been securitized. Even non-MERS mortgages wind up securitized and within the MERS database.

Only the original mortgage lien is filed in our public land records. The loan is sold and transferred 4 or 5 times prior to securitization. None of those transfers appear in our public land records as required by law. They take place within the private MERS database.

Then, if the loan was properly and legally pledged to an investment Trust on Wall Street, that Trust should have had a lien on the property within 90 days or so of the loan being signed. That rarely if ever happened and that's part of the securities fraud that took place.

What results are gaps and breaks in the chain of Title which cloud the property Title. There is no "good" paper to lay over "bad" paper that makes everything legal. To cover those gaps, fraudulent Assignments are filed to paper over the securities fraud and obtain real property for the banksters. They have no interest in making the investors whole which is why the investors have to file suit.

It is not possible to determine who legally owns the loan if most of the chain of Title remains secret within the MERS database.

Recreating these loans in favor of the banksters and their servicing companies is why document mills and robosigning exist. The "errors" mentioned in this article, are just a hint of what sort of foreclosure fraud is transpiring and what Title problems exist for homeowners.

[Snake Alchemist]

9. Let's keep it simple.

Did the homeowners take out loans and do they owe the money?

[Kingofalldems]

11. Not responsive.

Subject changed.

[Snake Alchemist]

12. Yes. I wasn't expecting a response.

The sentiment that MERS is some impenetrable fortress than no title company can decipher just defies reality.

[girl gone mad]

13. Beside the point.

Homeowners shouldn't be asked to make payments to a party who does not have proper claim to the deed. They might as well be flushing their money down a toilet in that case.

[Snake Alchemist]

14. It's the crux of everything.

Saying things like the "loan transfers 4 or 5 times before it's securitized" shows a fundamental lack of topic understanding.

[girl gone mad]

16. No, it isn't the crux of everything.

Clearly you have not been paying attention in class.

MERS is not a fortress. It doesn't even have employees.

[Snake Alchemist]

17. ?

http://www.mersinc.org/career/index.aspx

[girl gone mad]

20. from public testimony..

given by William C. Hultman, Secretary and Treasurer of MERSCORP

http://stopforeclosurefraud.com/2010/08/27/exclusive-mers-deposition-of-secretary-and-treasurer-of-merscorp-42010

Does MERS have any salaried employees?
A No.
Q Does MERS have any employees?
A Did they ever have any? I couldn’t hear you.
Q Does MERS have any employees currently?
A No.
Q In the last five years has MERS had any
employees?
A No.
Q To whom do the officers of MERS report?
A The Board of Directors.
Q To your knowledge has Mr. Hallinan ever
reported to the Board?
A He would have reported through me if there was
something to report.
Q So if I understand your answer, at least the
MERS officers reflected on Hultman Exhibit 4, if they
had something to report would report to you even though
you’re not an employee of MERS, is that correct?
MR. BROCHIN: Object to the form of the
question.
A That’s correct.
Q And in what capacity would they report to you?
A As a corporate officer. I’m the secretary.
Q As a corporate officer of what?
Of MERS.
Q So you are the secretary of MERS, but are not
an employee of MERS?
A That’s correct.

etc…
How many assistant secretaries have you
appointed pursuant to the April 9, 1998 resolution; how
many assistant secretaries of MERS have you appointed?
A I don’t know that number.
Q Approximately?
A I wouldn’t even begin to be able to tell you
right now.
Q Is it in the thousands?
A Yes.
Q Have you been doing this all around the
country in every state in the country?
A Yes.
Q And all these officers I understand are unpaid
officers of MERS?
A Yes.
Q And there’s no live person who is an employee
of MERS that they report to, is that correct, who is an
employee?
MR. BROCHIN: Object to the form of the
question.
A There are no employees of MERS.

[snooper2]

22. Technically correct, the employees work for MERSCORP

MERSCORP, Inc. is a privately held corporation that owns and manages the MERS® System and all other MERS® products. It is a member-based organization of about 3,000 lenders, servicers, sub-servicers, investors and government institutions. The MERS® System is a national electronic database that tracks changes in mortgage servicing rights and beneficial ownership interests in loans secured by residential real estate. MERSCORP also owns subsidiary Mortgage Electronic Registration Systems, Inc. (“MERS”), which serves as mortgagee in the land records for loans registered on the MERS® System and MERS® Commercial. MERS is a nominee for the lender and subsequent buyers (“beneficial owners”) of a mortgage loan and serves as a common agent for the mortgage industry. MERSCORP employs a dedicated team of professionals with diverse backgrounds from mortgage banking to systems integration.

[Snake Alchemist]

23. A difference without a distinction. nt

[Snake Alchemist]

24. I'm sure those are just fake jobs put out there to deceive the public. nt

[Kellerfeller]

27. Perhaps

And if the homeowner (person who took out the mortgage) bought it from someone who didn't own it, the homeowner also clearly has no claim to it either.

Theoretically, could they be charged with receiving stolen goods?

[ms.smiler]

18. Snake Alchemist, yes, homeowners sat down, signed documents and created a debt.

If that is all you need to know, you will never understand the transaction or what eventually happened to the debt that was created.

We’ll overlook most of the fraud at loan origination for now but the mortgages were actually funded by investors. The investor money came down from the banks through lines of credit to loan originators. The Promissory Notes were made payable to those loans originators, even though they never funded the loans.

It was investors who funded these mortgages, not the banks. It is the investors via the Trusts that should have valid liens on our properties and should be filing foreclosure actions.

Now while these loans sat on Wall Street in Trusts, there was a second set of books on the loans. There is a Pooling & Servicing Agreement that governs how payments are applied within the Trust. There are Credit Enhancements and Credit Default Swaps that pay against the loans. There are also other parties that by contract are obligated to make payment on behalf of loans that may not be performing.

On Main Street, there is a separate & partial accounting of the mortgage loan that is maintained for homeowners.

As I explained earlier, it is necessary to review the entire chain of Title to determine who owns the loan and it is also necessary to combine all monies paid against the loan to determine what actual amount is possibly due on the loans.

Regarding MERS, do you believe that our land records should have been privatized by the banks, especially without the benefit of any legislation? Why are secret land records necessary with securitized mortgages?

I ask because the Wall Street banks set up both investors and homeowners to fail and purchased Credit Default Swaps for themselves at sometimes twice the value of the loans. When the MBS market blew up, the banks collected those Swaps, then sold off the failed MBS to the U.S government and Federal Reserve.

The banks never funded the mortgages, yet collected Swaps and taxpayer money for the loans. We are actually discussing the largest Ponzi scheme in history which you may not realize.

You are free to wonder how much money some homeowner supposedly still owes on their mortgage while I wonder how many times the banksters have already collected payment on loans they never funded.

Oh, I noticed where you referred to MERS as some “impenetrable fortress.” Well, MERS certainly appears that way to my attorney and I. Even with a Subpoena, we can’t get my loan records from MERS.

I’ll be sure and let you know if we obtain a court order for those records and if MERS violates or complies with that order.

[Snake Alchemist]

25. Let's go point by point

Starting with:

So, the mortgages were never funded, but the previous mortgage was miraculously paid in full after they closed and didn’t fund? Interesting…

[ms.smiler]

26. Snake Alchemist, I’m happy to engage in discussion with you but unfortunately you seem to easily

misunderstand what I present.

I stated that “the investor money came down from the banks through lines of credit to loan originators.”

To the best of my knowledge, the funding mechanism was called a “line of credit.” The loan originators drew funding off those lines. The point was that investor funds moved through the banks down to the loan originators to fund securitized mortgages.

The banks didn’t fund these mortgages and aren’t owed any money.

And the next point?

[Snake Alchemist]

28. I'm not sure what you are trying to say.

What exactly do you mean by "investor funds". Are you talking about funds from the Fed, existing bank funds, what exactly?

[ms.smiler]

31. The funding for securitized mortgages came from pension funds, charities, community banks,

municipalities, insurance companies, university endowments, etc.

These types of investors were often bound to invest their funds in only extremely low risk investment vehicles. You may have heard or read somewhere that the ratings agencies were falsely and improperly rating these securities as AAA, even though they were garbage.

Since the mortgage borrower never knew the source and identity of their actual lender, these loans qualify as predatory under federal law.

And the next point?

[Snake Alchemist]

32. You are confusing loan funding with MBS investments. Granted they're related but they're not

the same.

And how does source of funding for a loan constitute predatory lending? Banks make loans using other people's deposits and interest on other loans. Is that predatory?

[ms.smiler]

33. The banks used investor money to fund these mortgages.

The banks did not use their own money; they used money from pension funds, community banks, etc. to lend on Main Street as mortgage loans. Since the banks had no skin in the game since their own money wasn’t at risk, nor did they own the loans, anyone who was breathing could obtain a mortgage loan.

The loan originators didn’t care about the quality of the loans since they would be selling them off within days. Underwriting became a quaint and forgotten notion.

50% of sub-prime borrowers actually qualified for prime rate loans, but were sold sub-prime loans because those were more profitable.

I couldn’t pretend to understand all of federal law, but in this situation of how investor funds were used, and how home buyers were deceived about their lenders, securitized mortgages qualify as predatory under federal law.

And the next point?

[Snake Alchemist]

34. I hear that banks are also using my savings and checking accounts to make loans!

I never authorized that!!!!

Look up loan funding and MBS investment. You are conflating the two.

[cookndrive]

36. They THOUGHT they made loans

There was many years ago (1968, I think) a case called :"THE CREDIT RIVER DECISION" . It was never appealed, never overturned.
The "gist" of the decision was that the DEBTOR created the money for the loan when they signed their name. It was deposited into the bank and loaned back to them. This was a trial by jury, with the judge concurring on the decision. The defendant was given his
property free and clear.

When the Attorney put the bank president on the stand, and the Defendant, pro se, questioned him, it was revealed that there were only bookkeeping entries on the bank side, the bank loaned no money.

You can find this on the internet, the entire story is interesting. BUT it should be noted the judge was murdered less than six months after the decision under strange circumstances.

[snooper2]

10. That a good breakdown of what's going on- Nice writing-

People really should get education on this and other personal finance in High School.

People here should go look up their own properties as well just to be educated-

https://www.mers-servicerid.org/sis/

For example what pulls on my property- (I changed the MIN id as a hot freeper want's my ass but I'm married LOL )

MIN:1000XXX-02XXXXXXXX-X
Note Date:09/07/2001
MIN Status:Inactive
Servicer: JPMorgan Chase Bank, National Association (fka Chase) Phone [phone]
Monroe, LA


I bought my house in 2005 so I can see no funky shit has gone on with it, Wells Fargo has the note (Chicago Title who I got the original loan from sold it, (Great Company by the way ))

[ms.smiler]

19. Snooper2, I’m delighted that you’ve been checking on your mortgage loan.

So you have your MERS MIN number. Your loan originator was Chicago Title. Your servicer is JPMorgan Chase Bank, but you stated that Wells Fargo has your Note which puzzles me.

Have you checked your local land records? I expect that the original mortgage lien with Chicago Title is filed there and that’s fine. About 90 days later, there should be an Assignment to a strangely named Trust. I doubt that such an Assignment was filed.

A Trust should have your loan, not Wells Fargo. How did Wells get into this? Do your land records have an Assignment from a Trust to Wells? Or, is there simply an Assignment from the loan originator to Wells?

Who did MERS show as the Investor in your loan? Was it Fannie?

How do your land records compare to what MERS shows?

I don’t mean to trouble you but I don’t quite understand the information that you kindly provided. Since you have a MERS mortgage, there should be a Trust with a timely filed lien in the public land records.

You mentioned a “hot freeper” in your post and I had no idea such a person existed. I learn something new every day on DU.

[snooper2]

21. Okay to be a little clearer--

The JPMorgan record that shows in MERS on my address is from the previous owner, I bought in 2005, that was from 2001-

I used Chicago Title for the title/deed/paperwork and forgot they actually use Supreme Lending to secure the loan. Supreme Lending sent me a note saying Wells Fargo took control of my note and that's who I pay my mortgage to today---

I see that "strange company" you mention in the land records. So in my case is Wells Servicing the loan or?

The terminology I wanted to get right once and for all



From the Collin County Land Records (I changed numbers that don't matter for this conversation )

Document 2005070000000000
Date Recorded
7/00/2005 Time Recorded 12:00:00 AM
Document Type DT
Amount 0 Consideration Amount 0
Pages 8
Type LR File/ID# 009XXXX
Book 5XXX Page 7XXX

Grantors
Seq Firm Name
1 N SNOOPER2 JR

Grantees
Seq Firm Name
1 Y EVERETT FINANCIAL INC
2 Y SUPREME LENDING

Legal
Legal Description
Lot:1 Blk:X Bk:X Pg:XX Sub LANO


Notaries


Referenced By

Referenced To

[cookndrive]

35. don't be deceived

I thought the same thing. I sued my original lender for TILA and RESPA violations. SURPRISE! they sold the loan 29 days after settlement. Nothing was recorded differently.

[Rex]

15. Wow.

Nice reply.

[Yo_Mama]

30. This is really misinformation.

I don't even know where to begin to explain. You have a fundamental misunderstanding of both the process and the law that daunts me.

[Snake Alchemist]

7. These errors seem rather minor and technical.

Last edited Thu Feb 16, 2012, 07:03 PM - Edit history (1)

The one I'm curious about is when the notice of default was sent. How exactly did they confirm that date? From the homeowners, the servicer, etc?