Quiet Title

It is no secret that foreclosure filings are rising. Plenty of data to support that. The state of the US housing market is at its worst since the Great Depression, despite encouraging news falsely broadcasted by the news media.  Articles, white papers, governmental agencies and Senate Subcommittee postmortem investigations on the cause and status of the struggling housing industry since 2008, have completely ignored or missed critical violations of law, tax code and facts that would expose the events and actions unlawfully undertaken by large banking institutions, non-bank lenders and loan servicers. 

            It’s no surprise that mega institutions are controlling our financial system, to include misusing the securitization of mortgages for obscene monetary benefit. It is the securitization of nearly every loan, that is at the root of the problem.

            The entire mortgage industry, with the aid of the US government itself, has shown complete disregard for all law that governs and regulates the industry, unfortunately using the US Court system as the enforcer.

            Out of control and erroneous government oversight, false market events, well planned and carefully orchestrated patterns of loan mishandling and origination at every level in the loan’s life cycle and maintenance, are just some of the issues that did not occur in the Great Depression.  

A foreclosure is no longer a ‘simple thing’ whereby a homeowner who defaults on their mortgage, loses their property.  It has evolved into very complex litigation that goes far beyond the scope of State Courts and the general actors prosecuting or defending foreclosures.  A good analogy is trying a murder case in traffic court.  The US State Court system turns a blind eye, being ill-advised or ill-equipped to properly rule on such cases that involve securitization.  As a result, millions of people have already become homeless with millions more following suit, not realizing their foreclosure was done by an entity who did not own their loan.

What is not well known, is that there is an entirely separate and unseen black market trading of mortgages running secretly behind the scenes, yet covertly alongside what is being alleged in local Official County Record systems where foreclosures occur. If one does not have the right understanding, tools and access to specific resources (and most don’t), their problems go unresolved causing problems later down the line. Every property owner should have their loan properly researched periodically to learn who is reporting ownership with the IRS, SEC and investors.

In nearly ALL cases, there are two completely different pathos of debt and title ownership, occurring at the same time, effectively clouding every title, while also causing nearly every mortgage in the US to be UNSECURED by the affiliated title.

No longer secured by title? There can be NO LEGAL FORECLOSURE! Two different, unrelated entities cannot claim to own the sameloan, at the same time, as there is only one title. There may be no record of the Trust appearing anywhere, yet it is reporting it as an asset somewhere. Importantly, do NOT rely on what lenders and servicers are telling you!

Mega banks, who also act as Trustees for the very loans they are foreclosing, contribute to this massive fraud scheme.  Billion dollar settlements that have identified many of the issues, have non-disclosure agreements so the crimes are NOT brought out into the open.  Banks and servicers are doing everything possible to keep the “money machine” running at all costs. 

            Jamie Dimon, CEO of JPM Chase Bank NA once said when asked about having to pay large settlements, “its the price of doing business.”  Paying a $600 million settlement is nothing then you are making $3 billion.  Unlawful behavior that has come to light in big investor cases, does not appear to trickle down to the State Courts, where homes are being lost every day by the very same elicit behavior.

            Worse, many governmental agencies have turned against its citizens, allowing or enabling the actual theft of homes to take place.  It is truly the “weaponization of the government against its own citizens,” a topic of a Select Subcommittee investigation now underway by Chairman Jim Jordan.  However, these issues have yet to be presented or addressed.

HOW IS THIS POSSIBLE?

            In the heydays leading up to the 2008 housing crisis, anyone with a pulse could get a loan, thanks to the invention of the ARM (Adjustable Rate) mortgage and other unusually unique financing options.  Buyers with a $20,000 income could buy a $300,000 home, as originating lenders got very ‘creative’ with their loan offerings and documentation, many times fabricating documents and information to insure that the buyer qualified.

            Once executed, the ARM loan was immediately ‘securitized,’ pooled together with thousands of other loans, packaged for sale as a security and sold to investors on Wall St, sometimes appearing as an asset to several trusts at the same time.

            NOT fully taken into consideration was that the ARM mortgage monthly payment more than doubled, once the adjustable rate kicked in, usually two (2) years later, setting property owners and investors up for deliberate failure and financial ruin as they no longer could afford their mortgage payment.  Defaulted ARM mortgages inevitably resulted in foreclosure. 

            The securitization of mortgages, in general, is not a bad thing – IF it is done correctly, adhering to all governing law.  It became common practice for originating lenders to immediately sell the loans they originated to entities such as Fannie Mae and Freddie Mac, who bought the loans to be put into their own branded mortgage-backed securities or sold to other 3rd party investors who did the same.  Originating lenders did not actually fund the loans, nor did they keep them on their books.

            In order to maintain the loan on their books, lenders must maintain three (3) times the amount of the loan in reserves in order to meet federal threshold guidelines.  When the loans are immediately sold off, originating lenders usually retain only the servicing rights to the loan, with homeowners never knowing their loan has changed ownership, believing the same entity who appears on their mortgage documents or monthly statements is the the owner of their loan. 

            By law, the homeowner is notified when the SERVICER information has changed so that payment will go to the new entity.  The identity of the true owner of the debt is not disclosed unless the property owner requests such information by way of a Qualified Written Request made under RESPA (Real Estate Settlement Procedures Act), of which most are unaware to do.

            Incredibly, mortgages allegedly secured by titles, are being revived, sold over and over again as if they were still active, to different entities at the same time, many times appearing in several different mortgage-backed securities (MBSs) simultaneously, destroying the possibility of  ever identifying true debt and title ownership.  Mortgage ownership has simply disappeared never to be legally established again (FBI/DOJ).  And homeowners have no idea it is even happening.

            Problems may have occurred in previous owner transactions, occurring several years and owners before, yet effectively compromising all ownership thereafter.  Once title has been “clouded,” any future loans cannot be secured by it, without it first being resolved by Court Order. Title stopped moving forward where the break occurred, making the purchase of any property ever involved in a foreclosure, a questionable investment.

             It is vital to understand what each document (Note, Mortgage & Title Deed) does and how it must be handled.  When defending a foreclosure, one must consider what is being litigated – enforcement of a debt that does not have to be owned to be enforced; OR an attack against TITLE, that ceased to secure the debt, therefore cannot be taken as payment for the unsecured debt.   No valid claim against title, there can be no foreclosure.

            This is where an action to ‘quiet title’ plays an important role.  Only properly executed transfers, meeting the strict requirements as outlined in the Trust’s governing documentation, IRS tax code, securities and trust law, can determine a legal title claim.  If not, a quiet title case should be considered and filed correctly, taking an offensive position as Plaintiff right out of the box, striking false documents from record that have rendered title unmarketable and “clouded.”

            This is a TRILLION dollar problem.  Property owners don’t stand a chance in defending rightful property ownership against a severely biased system at all levels of the transaction that favors mega banks nearly every time, having unlimited money to spend in court.  They simply out-spend property owners, setting bad precedent in Courts across the country that homeowners and their attorneys are not equipped to fight. 

            With complete disregard to law, mortgages  (performing or not) are being literally recycled, forming a ‘black market’ financial network worldwide that is only seen by the entities involved.   US laws have not kept up with the changing mortgage landscape, relying on out-dated law that favors unscrupulous lenders and servicers.   

            It is common knowledge and well known practice that nearly all mortgages are securitized – pooled together and sold into REMIC Trusts (Real Estate Mortgage Investment Conduits), of which certificates are sold to investors on Wall Street. The Fed itself holds a large chunk of agency MBSs but it too, is gradually selling off its holdings, most likely seeing the “writing on the wall.”

            The media is covering horrific stories of mortgage fraud and illegal foreclosures, matched with stories of lawsuits filed by investors who have lost billions due to the misrepresented quality of the underlying loans in mortgage-backed securities in which they invested. 

            These events are just the tip of an iceberg, with only part of the story seeing the light of day.  Few have dug deep enough to get to the REAL truth of what is happening, issues the FBI and DOJ could easily correct if they’d only uphold the law.  However, both organizations have been “politically compromised” at the senior-most levels, choosing to look the other way. 

            The wrong questions are being asked.  It is not a matter of getting help “when the chips are down.”   It is a matter of whether the entity foreclosing or collecting monthly payments has the RIGHT to claim anything in the first place.   Should false lenders be allowed to take homes simply because the homeowner “owes someone,” yet judges are allowing this to happen every day.

            Specific events and procedures that MUST occur, involving the underlying handling of mortgages behind the scenes during the securitization process, in compliance with the Trust’s governing documents, tax code, securities and trust law in the state where the Trust was formed – NOT under local state law.  Only proper, required transfers never actually happened.  A transfer from MERS straight into an issuing entity is NOT a legal transfer, whether the state accepts the use of MERS or not.

            This resulted in mortgages only ‘pretending’ to be put into the trusts, when in fact, the loans were never legally transferred properly to them.  The Trusts never actually received ownership. Worse yet, these critical missteps have been occurring since 2000 and still continue to this day.

            Most important to understand, is that once a loan is securitized (and nearly all of them are), the ownership, handling and servicing of the mortgages are rarely governed by state law, where the foreclosures occur.   They became governed by federal, tax, trust and securities law and the trust’s own governing documentation in the state where the Trust was formed. 

            In Highland Capital Mgmt LP v. Schneider 2007 NY Slip Op 02791 [8 NY3d 406] April 2, 2007, the NY US Court of Appeals ruled that the Promissory Notes were securities under the UCC because they met the “Transferability test” under Article 8; specifically they were represented by a Certificate, the transfer of which may be registered upon books maintained for that purpose by the issuer.  

            Yet  several states, such as Washington State, still rely on outdated law, claiming that loans are governed by Article 3 of the UCC, when in fact, once they were securitized, they now fall under Article 9 as was more clarified by the PEB.   Mortgages are turned into securities, likely losing their negotiability.  As such, it is no longer a simple real estate finance transaction, as transactions once were.  It is a much more complicated event that has morphed into a transaction that looks nothing like what it was when it started.

            In the haste to fulfill the “American Dream” of owning a home, homeowners became unknowing targets of a very complex, manipulated financial system, designed to reward unscrupulous lenders and servicers who have neglected or flat out refused to adhere to little known legal requirements and regulation.  American home ownership has been set up to fail, causing damage from which most property owners will not recover.

            The problems are massive, affecting every title and county land record system in the US,  also destroying most mortgage-backed securities on Wall Street.

            US Courts have sided with lenders and servicers, with judges spouting “you don’t get a free house,” when in fact, that is precisely what false lenders are getting themselves.  Why should homeowners pay a perfect stranger to the transaction posing as the current lender claiming to own their loan, when in fact, it can be indisputably proven they have no claim whatsoever because the loan was secretly transferred into a REMIC within days of the loan being signed – an entity also still reporting the asset to this day? 

            Judges claim “you borrowed money to buy a house, you owe someone.”  However, that “someone” is NOT who is illegally foreclosing.  Judges then rule in favor of the false lender, claiming that homeowners cannot challenge the securitization process or documents as they are “not a party to the securitization event.” 

            This is incorrect when one considers things from the title perspective, as the results of those unlawful actions have “clouded” title, causing the false lender’s actions to directly affect legal title held by the homeowner.  Homeowners have indeed suffered direct harm.  If proper transfer did not occur, there can be no claim of debt enforcement by the impostor entity.

            US Courts have been made into weapons of enforcement, a scheme designed to literally steal homes across America.  Mega corporations are illegally foreclosing or buying up homes at fever pitch from strategic agreements with loan servicers who have caused intentionally orchestrated defaults.  Interest, excessive fees and servicing costs are added to the defaulted debt, most times doubling or tripling the defaulted amount, eliminating any equity the homeowner may have had over the years, making it impossible for the homeowner to cure the default.   They just give up and let the home be illegally taken.

            Unless one has very specific resources, knowledge and analytics that are capable of identifying these problems, it goes completely unnoticed, unchallenged or improperly defended, yet it affects nearly every property and loan in the US, residential or commercial.

            The illegal taking of US homes is being done via “the mortgage machine.”  The Mortgage Machine is a process that consists of ‘assembly-line’ types of procedures, running covertly to what is being portrayed in the public eye, affecting every securitized loan.  It involves many actors, beginning with loan originators, underwriters, title companies, servicers and trustees, each doing their part at each step in the process, compromising both residential and commercial real estate nationwide.  

            However, the results are always the same – the illegal taking of title for an UNSECURED debt. Contact us to inquire about our Quiet Title litigation support services. We win these cases!

  Need help in assessing your case? Does your attorney need our help? Use our services to help guide you through the process early enough to avoid mistakes that can cost you your home in an illegal foreclosure action. Call our office today at 844.583.5339 to inquire if we can help. You can also submit a case statement here and get a complimentary recommendation as to your best course of action.

 FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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