2008 Schack Decision Reminds Us How Something "Nefarious" Is Happening

Without a party actually getting hurt by nonpayment, why should anyone pay their mortgage?

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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see Deutsche Bank National Trust Co_Justice Schack

It is worth remembering when the foreclosure tidal wave began and the banks were at least as arrogant as today creating sham entities, sham addresses, sham  documents, fabricated instruments with sham people. And it is worth remembering several judges, Judge Arthur Schack among them, who stood up to the great powers of our nation and simply told the banks to follow the law or give up their claim.

• This is the decision where Judge Arthur Schack stated his refusal to accept obvious irregularities as follows:
  • All at the same Suite Number at the same West Palm Beach address undoubtedly controlled by Ocwen subject to instructions from various investment bankers: Goldman Sachs, HSBC Bank, N.A., Ocwen Federal Bank FSB, and Mortgage Electronic Registration Systems, Inc.
  • Jeff Rivas signing affidavits on behalf of multiple entities all within the same time frame
  • only if it presents to the Court within thirty (30) days from the date of this decision and order: an affidavit from Jeff Rivas describing his employment history for the past three years; and, an affidavit explaining why it shares office space at Suite 100, 1661 Worthington Road, West Palm Beach, Florida 33409

Needless to say nobody ever heard from the lawyers again in that Castellanos decision. Why? Because they had nothing to say that would not have further undermined their scheme to defraud the country and homeowners.

If securitization was the actual game then a real group of investors would have purchased a real group of loans; but that is not what happened.

If a real group of investors had purchased a real group of loans then they, or their authorized representative would have had the right under the laws of every state to foreclose on property when the borrower ceased payments. But that isn’t what happened either. The investors didn’t buy the loans in either form or substance. They have no right to foreclose in law or inequity.

If anyone had paid money to anyone for ownership of the debts they would have paid value for the debts and be the owner of the debts and be qualified in every way to be called the mortgagee under a mortgage deed or beneficiary under a deed of trust. But that isn’t what happened either. Instead we have multiple parties fronting a crowd of rotating servicers whose sole purpose is not to allege the basic elements of debt collection and foreclosure but rather to obscure them.

If there existed any party who had paid money and had acquired the debts, then fabrication of documents and robosigning, the hallmark of the foreclosure crisis, would have been unnecessary. But it was necessary because there was nobody to sign any document declaring that they were the creditor — i.e., the party who had a financial interest in the debt such that they would lose money if the debt was not paid.

All those problems exist because the Wall Street Banks got greedy and created the holy grail of investment banking: what if you did an IPO and never had to account for the proceeds of the sale of those securities?

The real question is not why should you give homeowners a windfall over some technical problems with the paperwork; no, the real problem is why would you give the banks and all their affiliates even more revenue through foreclosure than they had already received, which was at least 10 times the principal of the amount of the loans?

The answer to the first question is that no, homeowners should not get a windfall because of technical problems with paperwork. Creditors, real creditors that is, should be able to execute corrective paperworks, affidavits and filings to correct merely technical errors.

The answer to the second question is that if the “loan transaction” was strictly a revenue deal and not a loan of money where someone would lose money if the money wasn’t being repaid, then commons sense and the law (UCC Article 9 §203) clearly stands for the proposition that nobody should be able to foreclose on a home in order to just receive revenue.

There simply must be a debt and a creditor who has paid value and owns that debt. The fact that the banks can’t come up with such a party is evidence that the law is out of whack with the innovations of Wall Street and malfeasance on Wall Street. But without a party actually getting hurt by nonpayment, why should anyone pay their mortgage?

Practice Hint: The problem is that the investment bank who advanced funds for origination or acquisition of the loan sold off everything about the loan. In the end it was left with nothing but profit.

But while selling off various attributes of the debt the investment banker never actually sold the debt, which enabled the investment banker to sell more and more “attributes” of the debt, both real and imagined, until the market was saturated with all sorts of certificates, contracts, insurance policies and bets and options organized as the securitization infrastructure.

And THAT is why we have $1 quadrillion in “nominal” value of instruments in the shadow banking market that is scaring the crap out of all central bankers who are in charge of the only actual currency which is worth a mere $75-$80 trillion.

So if people just stopped paying on their mortgage loan the securitization infrastructure built over each residential loan would collapse to something like 1/10 of 1% of the nominal value. And the next bailout would be to pension and related retirement funds.

So if you are a homeowner you are wondering the answer is yes. You were selected to pay for the wrongdoing of investment banks and basically nobody else. And when you lose your home in foreclosure those same players are laughing because although they turned your life into misery they just made another $300,000 in INCOME.

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