BANKS DISMISSING FORECLOSURES

ONE ON ONE WITH NEIL GARFIELD

COMBO ANALYSIS TITLE AND SECURITIZATION

EDITOR’S NOTE: The impact of rising suspicions and scrutiny seems to be evidence that the securitization intermediaries have painted themselves into a corner. It’s not over yet, folks, but reports around the nation show outright voluntary dismissals, several dismissals with prejudice executed by Judges, and even the Judges that were so dismissive of defenses raised by borrowers are slowing up the process, examining documents and applying the principles set forth in the Massachusetts IBANEZ case.

see judge-schack-dismisses-case-with-prejudice-against-citibank-due-to-counsel-failure-to-comply

These actions appear to corroborate the principles set forth on this blog in October, 2007 — that most of the so-called securitized loans were never transferred to anyone, that the originating lender was acting as a broker and not a lender, that the mortgage backed securities were sold first and THEN the loans were solicited, and that the note and mortgage were invalid although theoretically the unsecured obligation still existed without any proper documentation. It has always been the opinion expressed here that these actions were neither negligent or unintentional. The receivables were split amongst the dozen or more participants in the scheme without documentation and that was intentional because in many cases the loans were subtly changed as to one or more data fields and then sold as a different loan 2 or more times.

Thus the credit default swaps, insurance (AIG now the subject of an IPO that essentially gives control to the megabanks to hide information) and other credit enhancements were figments of imagination, entirely fictitious and comparable in style to Madoff although the amount stolen was at least 100 times as much as Madoff ever achieved. It was easy for Madoff and it was easy for the investment banks who all knew that Madoff was a fraud. They never reported it because they liked his style and intended to use it to their own advantage on an even larger scale.

With the reminder that these banks play rough and that this is not over, the outcome of these dismissals is a clear path for clear title free and clear of any mortgage, note or even obligation — not because the obligation does not exist, but because the only potential owners of that obligations have an easier and better shot at recovery by suing the investment banks than getting involved in millions of individual legal actions for damages for an unsecured undocumented obligation.

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Banks drop foreclosures in Lee County & Southwest Florida.Hundreds of lawsuits dismissed.

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April Charney, a Jacksonville-area legal aid attorney who’s an expert on foreclosure issues, said for the most part banks have no way to prosecute their cases because the mortgages in mortgage-backed securities were never actually legally transferred to the trusts
By DICK HOGAN • dhogan@news-press.com • January 19, 2011

http://www.news-press.com/article/20110119/RE/101190387/1076/Banks-drop-foreclosures-in-Southwest-Florida

1:10 A.M. — Banks in recent weeks have been dropping hundreds of their Southwest Florida foreclosure lawsuits instead of facing defendants at trial, according to local attorneys and court records.
Opinions varied sharply on whether that means banks are just taking a breather before refiling with stronger evidence – or giving up for good on hopelessly flawed cases.
Some foreclosures at large law firms were never actually read by the attorneys who filed them here and elsewhere, and some of the mortgages that ended up in mortgage-backed securities sold to investors were never legally transferred by the banks, defense attorneys have alleged.

“We think they’re going to come back and refile,” Lee County Clerk of Court Charlie Green said.

That’s an expensive proposition, he said, noting foreclosure suits carry a hefty filing fee: about $1,900 for a $250,000 house, for example.

What happens is lawyers for the banks are asking judges to dismiss their cases, which is “very much out of the ordinary,” Green said. “You don’t see cases dismissed without prejudice that often.”

Foreclosures were rare in Southwest Florida until the housing market crashed at the end of 2005, bringing on waves of mortgage defaults by investors and homeowners.

Green said he hasn’t calculated exactly how many foreclosures are being dismissed.

But eight voluntary dismissals were filed Tuesday alone by seven different banks including Bank of America, one of the largest filers of foreclosures in this area. Bank of America did not reply to a request for comment Tuesday.

At one court hearing alone, attorney Kevin Jursinski said, one of his associates watched as “50 in a row” were withdrawn.

“Can they re-litigate?” Fort Myers-based attorney Carmen Dellutri asked. “I don’t think so.”

Most of the mortgages in dispute were sold to Wall Street and sold in bundles to investors as mortgage-backed securities, he said. But so many mistakes were made in the process it’s unlikely the banks can win those cases.
Some mortgages still held by the bank that made the loan might be defensible but those are in the minority, Dellutri said.

He said he’s seeing cases withdrawn in large numbers in Lee, Collier and Charlotte counties, and he heard from an attorney in Jacksonville the situation is the same there.
April Charney, a Jacksonville-area legal aid attorney who’s an expert on foreclosure issues, said for the most part banks have no way to prosecute their cases because the mortgages in mortgage-backed securities were never actually legally transferred to the trusts.

She said much of the recent wave of voluntary dismissals may be a result of a Massachusetts Supreme Court ruling Jan. 7 upholding a judge’s decision two foreclosures were invalid because the banks didn’t prove they owned the mortgages, which he said were improperly transferred into two mortgage-backed trusts.

Now, she said, many mortgages simply aren’t fixable. “You can’t go back and securitize. You run a red light, you can’t go back and unrun it.”

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