BANKS CAN'T CORRECT ERRORS CITED IN IBANEZ CASE

SUBMITTED BY LUCY

THIS IS AN EXCERPT FROM AN ARTICLE I FOUND THAT MAY HELP, IT DOESN’T MENTION BOGUS ASSIGNMENT BUT IT DOES ADDRESS ASSIGNMENT DONE AFTER FORECLOSURE.

Fixing Massachusetts Foreclosures Won’t Be So Easy
By ABIGAIL FIELD Posted 10:15 AM 01/14/11

See full article from DailyFinance: http://srph.it/eY9xsF

Why Completed Massachusetts Foreclosures Are a Big Problem

One problem in the Massachusetts cases is that the foreclosing banks were assigned the mortgages after the foreclosure was completed. An assignment can’t happen after the foreclosure starts, much less after it’s been completed, the court explained, unless the assignment is essentially a redo of an existing assignment. Then the late assignment would just “confirm” the original.

Since the “typical” securitization involved assignments in blank, I’ll bet very few of the trusts that foreclosed in Massachusetts had the mortgages when they foreclosed. If the banks had been aware of the issue and were dealing with it, it’s hard to understand why they would have told the Massachusetts high court that assignments in blank were legit.

That would mean any assignment to a securitization trust that happened after the foreclosure started — apparently “typical practice” in Massachusetts, as it is elsewhere in the country — wasn’t “confirming” an existing assignment, despite K&L’s claim to the contrary in its newsletter:

[I]n the context of securitization, such confirmatory assignments will serve to validly confirm the language of assignment contained in the underlying securitization agreements and can thus properly confirm the earlier assignment of mortgage which itself bestowed the authority to foreclose.

Unless the original assignments weren’t in blank, the late assignments aren’t “confirming” anything. They’re the first time the trust is being given the mortgages.

K&L gets one thing right: A foreclosed homeowner probably has to go to court to show that the foreclosure was invalid. That’s because just showing the assignment to the trust occurred after the foreclosure started — an easily determined fact in the land records — isn’t enough. The homeowner has to find out if that late assignment to the trust was the first one or a “confirmatory” one. That is, did any assignment in blank break the chain or not?

Since such assignments were typical, then most if not all of the foreclosed homeowners should be able to invalidate their foreclosures. Precisely what that means for the foreclosed homeowner, the foreclosing trust, the servicer and the purchaser of a foreclosed Massachusetts home isn’t clear. At a minimum, the new owner doesn’t have good title because the bank that sold it didn’t have it to give.

Problems Elsewhere?

K&L also points out that the case hinged on Massachusetts law, which is true — and the firm tries to reassure people that, for that reason alone, its consequences are limited. Well, maybe. Maybe the securitzers ignored only Massachusetts law.

Speaking of which, how did that happen? The Massachusetts high court emphasized that the illegality of assignments in blank was basic real estate law. How on earth did the big firms advising on securitization deals — and it’s many sophisticated firms, not just K&L — not realize the “typical” deal violated Massachusetts law?

Boston alone is chock-a-block with big corporate law firm headquarters and branches. Surely, they had partners who knew better. Since the banks’ lawyers blew it in Massachusetts, can we really take their word that they didn’t blow it any place else? I wouldn’t.

See full article from DailyFinance: http://srph.it/eY9xsF

HERE’S THE LINK IF YOU WANT TO READ THE FULL ARTICLE:

http://www.dailyfinance.com/story/real-estate/sorry-bank-lawyers-fixing-massachusetts-mortgages-wont-be-eas/19799778/

Posted in bubble, Corruption, Eviction, securities fraud |