Default: Really? Or is it just a monthly payment that is no longer due?

While Mr. Barnes’ enthusiasm in the submission below is a bit over the top it points out quite skillfully that things are not as they appear in any foreclosure involving a securitized loan. Barnes was effective in pressing the point early on and refusing to accept the burden of proof on issues where it was in fact Deutsch Bank that was seeking affirmative relief but attempting to side-step normal requirements for due process, evidence, proof and competent witnesses laying a proper foundation for documents. And you may deduce that Barnes effectively proved that the declaration of a default does not create a default, contrary to the whims of the pretender lenders. The key to Barnes’ success is his refusal to accept the assumption that the “loan” (which I contend is actually a security, the loan aspect of which is merely incident to the true nature of the transaction) is in default. Those who are encountering difficulties in court, particularly in California can learn from this: If you are going to concede, even arguendo, that a default exists, then you have conceded your case. There is no need for an accounting, answers to QWR, answers to DVL, or any proof. Conceding the default requires the uphill battle to say that standing of the pretender lender precludes their declaration of it. That may be a correct legal argument but practically speaking it doesn’t go far with most judges.

Securitization requires us to parse documents, words and events that never required scrutiny before.

A Declaration of Default cannot be effective, even on a prima facie basis, unless it comes from a party who actually knows if the obligation is in default. The fact that the homeowner stopped making monthly payments is not proof of a default. If the homeowner sells, refinances, or otherwise disposes of the obligation, or some third party does so on behalf of the obligation, no monthly payments are due.

The homeowner is not required to continue monthly payments where the obligation has been satisfied and is entitled to a full accounting for all money paid and received on the account — and that does not comes from the servicer, who does not know who received how much from Federal bailout, Insurance or other third party payments. It can only come from the true owner of the obligation which was the investor who bought mortgage backed bonds containing a conveyance of the loans, or whoever purchased or paid off the investor with rights of subrogation.

The pretender lenders are presenting a half baked case and pretending it is the whole story. They use their size and name recognition to bluff judges and even defense attorneys who fail to realize that virtually everything represented in court by the attorney for the pretender lender is untrue and the attorney either knows it or should have performed sufficient due diligence to establish a reasonable basis for believing the truth of the allegations and representations made on behalf of his “client” (usually someone he has never spoken with).

NEW JERSEY COURT DISMISSES FORECLOSURE FILED BY DEUTSCHE BANK FOR FAILURE TO PROVIDE DISCOVERY AS TO OWNER AND HOLDER OF NOTE, SECURUTIZED TRUST DOCUMENTS, AND OTHER DOCUMENTS DEMANDED BY BORROWERS
July 14, 2009

In a stunning victory for borrowers, a New Jersey court has dismissed a foreclosure action filed against the borrowers by Deutsche Bank Trust Company America as alleged trustee for a securitized mortgage loan trust after Deutsche Bank willfully, and despite the entry of three (3) separate court orders, refused to produce documents demanded by the borrowers which included documents setting forth the identity of the true owner and holder of the Note and mortgage, the complete chain of title to ownership of the note and mortgage, payment application histories, and documents as to the securitized mortgage loan trust. The Court had given Deutsche Bank multiple opportunities and extensions of time to produce the documents, but Deutsche Bank continually refused to produce any of the documents requested, resulting in the dismissal of Deutsche Bank’s foreclosure action. The Court also ruled that Deutsche Bank is not permitted to re-file any foreclosure action until it is prepared to produce ALL of the subject discovery.

FDN attorney Jeff Barnes, Esq. represented the borrowers, assisted by local New Jersey counsel.

W. J. Barnes, P.A. has numerous other cases pending where similar discovery requests have been sent to Deutsche Bank, none of which have been complied with to date. As such, additional requests for sanctions, including dismissal, are expected to be filed in these cases.

Deutsche Bank was also the subject of a recent ruling in a case in New York where the Court denied Deutsche Bank’s Motion for Summary Judgment, finding that a purported assignment from MERS to Deutsche Bank was defective and that Deutsche Bank, with an invalid assignment of the mortgage and note from MERS, lacked standing to foreclose. Significant in the ruling was the court’s observation and question as to why, 142 days after the borrower was claimed to be in default, that MERS would assign a “toxic” loan to Deutsche Bank. The court also required a satisfactory explanation, by sworn Affidavit, from an officer of the securitized trust as to why, in the middle of “our national subprime mortgage financial crisis”, Deutsche Bank would purchase from MERS, as alleged “nominee”, a nonperforming loan. The court further inquired as to whether Deutsche Bank violated a corporate fiduciary duty to the note holders of the securitized mortgage loan trust with the purchase of a loan that had defaulted 142 days prior to its assignment from MERS to the trust.

It appears that Deutsche Bank may have done so to take advantage of one or more “credit enhancements” inside of the securitized mortgage loan trust which pay benefits upon declaration of default. These credit enhancements are extremely complicated and multi-layered, and are required by law in connection with the issuance and sale of the mortgage-backed securities “backed” by the trust.

The assignment of the mortgage and note to the securitized trust, which were already in default well in advance of the assignment, would permit Deutsche Bank to both realize a profit through payment of credit enhancement benefits (which effect a pay down of the claimed “default”) while simultaneously permitting Deutsche Bank to institute a foreclosure, resulting in a “double dip” for Deutsche Bank. This is, of course, illegal, but unless competent counsel raises the issue, it goes unnoticed and Deutsche Bank, like so many other foreclosing parties, winds up stealing the borrowers’ property and getting paid for doing it.

Jeff Barnes, Esq.

http://www.ForeclosureDefenseNationwide.com

e-mail: info@ForeclosureDefenseNationwide.com

Tags: borrower, disclosure, foreclosure defense, foreclosure offense, fraud, Lender Liability, securitization, trustee
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