SEPARATING THE NOTE FROM THE OBLIGATION: TOO ESOTERIC FOR JUDGES

MOST POPULAR ARTICLES

GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

EDITOR’S COMMENT: The argument for separation of the note from the mortgage is finding a lot of resistance from the Bench, as Ron Ryan writes below. I agree with him up to a point. The fact remains that at the very start of the transaction, the receivable (cash trail) is separated from the documentation. Whether you call this separation of the mortgage (deed of trust) from the obligation or call it something else, it remains important to differentiate between the two transactions at the time of the “closing.”

1. The actual transaction is between the source of funds and the homeowner. The source of funds is never disclosed at the closing, nor in any of the closing documents. Thus the loan is table funded by definition and it being a pattern of conduct that is indisputable, it is a predatory loan per se (Reg Z), which is something I would think any lawyer would want to point out, in order to start out on the right footing. Since the closing documents do not refer, directly or indirectly, to the actual cash transaction, nor to the treatment of receivables after closing it is clear that the documents at closing are not relevant to the actual transaction, nor are the parties to those documents. Thus the actual cash transaction and the money trail after closing is an entirely undocumented transaction.
2. The documents upon which the pretenders are attempting to use in foreclosing, collecting or otherwise being involved in the money trail are a ruse — an illusion that both Judges and lawyers are having a hard time wrapping their minds around. It feels counter-intuitive and perhaps even a bit silly to say that the pile of documents produced at the illusory “closing” are all irrelevant or mostly irrelevant. While they could serve as the basis for introducing certain evidence in a lawsuit brought by the true creditor to reform the closing documents and establish themselves as the payee under the note and perhaps reconstitute a lien, the true creditor has no interest in bringing such an action and the lawsuit has never been brought to reform the documents or even ask the borrower for a signature correcting the breaks in the chain of title. 
3. Thus the separation of “note and mortgage” is not really the issue so much as separation of the obligation from the rest of the documents including the note. Properly pleading and subsequent discovery would show exactly what I have described here, thus providing the solid basis for a challenge to standing and striking the pretender as not being a real party in interest nor authorized to act on behalf of the real party in interest. THAT is because even if the true creditor wanted to step forward, which they don’t, they have no documents to rely upon. The chain of documentation is both fictitious and fabricated, violating the REMIC statute and the terms of the contractual relationship amongst the securitizers and the investor lenders (i.e., the pooling and service agreement). The transfers were never made into the pool and even if they had made it, they would be describing a transaction between the homeowner and the loan originator that never in fact occurred when compared to the flow of funds at and after closing.

Ron Ryan, Esq,, a lawyer leading the fight in Tucson, writes: The issue of separation of ownership of the Loan and Note from ownership of the Deed of Trust has become outdated as a viable theory.  I am finding that there is more success when reducing the number of issues in a case to those that have a real shot at a total win.  In my opinion it should be left off pleadings, although the “nullity” rule of law can be pointed out in reference to MERS.  The separation argument could at some point in time become relevant again, IF it can be SHOWN that the same loan was sold to two separate parties or entities at the same time.

Tags: Bank of America, bankruptcy, borrower, countrywide, creditor, disclosure, Eviction, foreclosure, foreclosure defense, foreclosure offense, fraud, Lender Liability, lost note, MERS, predatory lending, quiet title, rescission, securitization, TILA audit, trustee, Wells Fargo
Posted in bubble, Corruption, Eviction, securities fraud |