Shell Game: Nominees and Principals All Change Depending upon Circumstances

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In reality there are nothing but nominees for undisclosed principals on both the note and mortgage. The money for funding the mortgage came from investors who pooled their money together. At the moment the borrower accepted the benefit of the loan funding, an obligation arose by operation of law between the borrower and the lender. But the lender is different than the party named on the note and mortgage (DOT).

This does not mean the obligation does not exist. But it does mean that the documentation contains declarations of fact that are not true. Hence it must be concluded that either the note is NOT evidence of the debt or that at best it is partial evidence of the debt — the balance of the information being contained in the closing documents with the investor lender and parole evidence in which the actual money trail differed from both the closing documents recitals for the borrower and the closing documents recitals with the investor lender.

Under ordinary rules of construction, the note is not the obligation. The note is considered the evidence of the obligation — if it indeed contains declarations of fact that are true. The mortgage or DOT is neither the obligation nor the note. The mortgage is considered to be incident to the note. Thus if the note is defective, the mortgage does not contain terms that are enforceable. Hence the issue is not whether the debt exists, but whether it is secured by collateral and if so, under what terms contained in which gaggle of documents that the parties used to “securitize” the loan.

This is not confusion created by the borrower who thought justifiably that he could rely upon the representations of the persons attending the loan closing that the parties were properly disclosed and that their remuneration was properly disclosed in accordance with TILA. This confusion arises strictly because the intermediaries wished to create a gray area in which they could claim ownership of the loan for purposes of trading and gambling “off balance sheet” and without accounting to either the investor-lender or the homeowner-borrower.

In order to sustain the position of the opposing parties, the court would be required to accept the parties shown at closing on the note and mortgage as the real parties in interest for one purpose, the parties who traded in insurance, credit enhancements and credit default swaps as owning the loan for other purposes, and the investors from whom all the money was obtained for funding the loans as the real parties in interest for still other purposes.

The chaos from these practices are precisely the subject of indictments and civil suits across the country in which the title registries were either ignored or corrupted or both. The burden of clarification and proof of ownership should be on the party or parties seeking relief and it should result in a single lien that is owned by one or more parties and not multiple liens without any accounting for which party can submit a credit bid and for how much the credit bid can be submitted.

If the note and mortgage (DOT) are incomplete at best and wrong in certain respects in describing the transaction then the lien purportedly recorded against the debtor’s property was never perfected. The actual security instrument contains MERS, an admitted nominee for an undisclosed principal and a “lender” which in fact was a nominee for an undisclosed lender or other party.

The point here is that the obligation that a rose by operation of law when the borrower accepted the funding is either undocumented or incompletely documented, making it unsecured. If the property is unsecured then it is part of the bankruptcy estate which can then be utilized, unencumbered for the beenfit of creditors and the debtor alike.

The proof of this line of thinking lies in the alleged auction which was improperly conducted. Assuming the auctioneer was properly and duly authorized however, and that the substitution of trustee was properly and duly authorized, the party submitting the bid at auction did so without tendering any promissory note much less the complete package of documentation that would prove its status as holder and owner of the loan (i.e. the party to whom the money is actually owed arising from the borrower’s obligation when the loan was funded).

At the alleged auction, the auctioneer announced the receipt of a credit bid from a party that had not established itself as the actual creditor, nor did the auctioneer collect the note that would constitute the bid. Since there was not cash paid at the auction, there cannot be said to have been a transaction because neither the cash nor the note was tendered as a bid. Hence the “sale” was a fictitious sale and the deed issued upon sale would have been improper, leaving the debtor with title tot he property unencumbered by the alleged mortgage or DOT.

It is one thing to apply the law for purposes of  jurisdiction and establishing a colorable right to initiate a foreclosure proceeding. It is quite another to bid the property into one’s own name to the detriment of the actual creditor, leaving the debtor with a continued liability.

Tags: 60 minutes, AHMSI, appraisal fraud, attorney general, auction fraud, Chris Koster, credit bids, DocX Indictment, foreclosure fraud, FORECLOSURE SETTLEMENT, foreclosures, forgery, housing market, housing prices, investors, linda green, LPS, Missouri, mortgage fruad, mortgages, Robo-Signing, settlement, strategic default, Wells Fargo
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