Squatters Benefits and Adverse Possession: Show Me the Money!

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 EDITOR’S COMMENT: It is difficult to compute because of the very nature of the problem. But from my perch it looks like more and more people are standing up to the Banks and getting their pound of flesh back one way or another. By staying in, moving back in, or even taking over the abandoned property next door, innovative homeowners are striking back at the Banks and more of them each day are apparently doing very well.

It’s what Reagan called “Voting with your feet.” Call it what you will, tens of thousands of homeowners are recovering at least part of their investment through non-payment of rent or mortgage. Some are passive, just waiting out the times for foreclosure and eviction, which ordinarily buys them 8-12 months. Some are more pro-active sending letters that the pretenders don’t know what to do with because they don’t have a script for the notices and letters being invested by homeowners.

And more and more people, in a rising tide, are directly confronting the pretenders in court as they realize that the “default” may not be a default, the payment might not be due, and the foreclosers are not who they say they are, even if they have brand names that are 150 years old. The stories about robo-signing, surrogate signing, and fabricated, undated, back-dated or otherwise defective documents are taking their toll on the supremacy that the Banks counted on.

The essential question that is starting to emerge, although often mistakenly skipped by attorneys, is “where is the money?” The fabricated documents all refer to a transaction that did not occur — the sale of the “note”. By asking for proof of payment, and by asking for proof of funding when the loan was originated, lawyers are beginning smell blood. There was no payment for the “sale” of the note and hence no sale. And the funding of the loan came from parties who were not disclosed at closing, using a third party strawman to make it look real, but it wasn’t.

Don’t misunderstand me though. As I said in a recent article, if you receive money in what is couched as a loan transaction, any attempt to make it a gift is going to be met with an angry face on the Judge who hears that argument. And the Judge will be right. But the same Judge will react quite differently when confronted with the question of why the funding source was not named on the note and mortgage (deed of trust) — especially when the position of the Banks is that the funding source — the REMIC pools — did fund the loan and do own it.

It’s getting more complex out there in litigation land. Judges are confronted with notes and mortgages that are defective on their face because there was a known source of funding that was not named on the note or mortgage or otherwise disclosed contrary to the requirements of TILA and other statutes, rules and regulations regarding lending. With the obligation already owned by the investors to begin with, what effect does an assignment between the intermediaries have on the chain of title, standing and the the right to submit a credit bid at auction?

With all of that in play now, which will come up in today’s members’ teleconference, some people are getting even more bold by playing the system to achieve clear title through adverse possession — a process that boils down to trespass turned into title. I know of several businesses that are using the same tactics as the Banks to establish some colorable right to title, then taking over the property, renting it out or using it and putting signs out that say “Adverse Possession” and “NO Trespassing.”

It’s weird but it’s working — especially where both homeowner and the Bank have abandoned the property after the foreclosure “auction” which we all know is a farce. By paying the taxes and maintaining the property, these risk-takers are having some success holding onto properties that are producing rental income and they are headed toward a valid claim for adverse possession after they have boldly claimed the property as their own. I offer no opinion as to whether this trend will continue, and no opinion as to whether it will work, but it is working now and the the number of people squatting and exercising even more claims over the property is rising rapidly.

Tags: adverse possession, bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, show me the money, sqautters, TILA audit, Trespass, trustee, WEISBAND
Posted in bubble, Corruption, Eviction, securities fraud |