TITLE CRISIS: EVEN IF YOU PAID CASH FOR YOUR HOME, TITLE STILL IN DOUBT — and you could be "underwater"

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“The number of underwater mortgages is vastly understated by this revelation. Practically every residential real estate transaction in the last 10+ years had a supposedly securitized debt instrument somewhere in the factual chain — which misdirected the funds to satisfy the mortgage and misdirected the parties entitled to execute a satisfaction or reconveyance. In a nutshell, that means most houses have multiple encumbrances in their chain of title that would put them underwater several times over, even if they paid cash.” — Neil F Garfield 6-17-11

“The bottom line is that even if you are adamantly opposed to challenging the banks on the securitization mess, you are nonetheless in the fight if you own property that was ever touched by a supposedly securitized mortgage. If you still own that house, or think you do, you probably have one or more unsatisfied mortgages that you didn’t know about. The title companies have already decided as a matter of policy they are going to deny these claims, claim fraud, and force claimants to sue them. Small wonder, the liability could be in excess of $20 trillion dollars depending upon how the damages are calculated. The insurance companies are only worth pennies on that dollar.” — Neil Garfield 6-17-11

PROPERTY LAWYERS QUESTION TITLE CHAIN GOING BACK 15 YEARS

“satisfied” Loans still exist on record and may be enforceable

The worried callers who contact me now include a number of homeowners and lawyers who wanted nothing to do with the foreclosure battle. They are dealing with homes that were paid for in cash or which the homeowner is current on payments. Looking at the title chain they see numerous breaks caused by satisfactions or re-conveyances executed by names that are out of the chain of title. Talking to title companies, they are getting anything from vague answers to a direct “no.”

More than 80 million transactions occurred in the last 10+ years in which a loan was the subject of a securitization claim and in which some member of the securitization team received the money to satisfy the mortgage, and executed a satisfaction of mortgage or reconveyance. The more they drill down, seeking answers that would lead to corrective instruments which ordinarily would correct clouds or defects on title, the more worried they get: they don’t know who to ask for the corrective instrument and even if they do know or think they know, they are not getting any cooperation.

We are seeing a huge number of cases in which the recipient of the pay-off is not to be found in the title chain, a third party executed a satisfaction of mortgage, but no assignments, or no valid assignments can be found on record or off record. Since we know that no transfer documents were prepared or executed unless a matter went into litigation and the Judge demanded compliance with the requirements of evidence and law, these “satisfactions” and “reconveyances” have no probative weight and must be considered the same as wild deeds.

That means when people refinanced their homes, bought a new home, sold their home, exchanged homes or whatever — their assumption that the old mortgage was extinguished on record is very much mistaken. Buyer and seller alike, homeowner and refi “lender” alike are in serious trouble here. The Correction is usually to get the signature of the real lender of record. Bu many of these lenders cannot be found and in court, there are no facts to plead that would have the court change anything — the money for the satisfaction or reconveyance went to a party other than the lender of record.

So the circle of fabricated and forged documents is about to get exponentially larger. The worst case scenario is where the lender can be found but refuses to execute a corrective instrument because they didn’t get paid. The mere revelation of that fact will cast a well-deserved shadow over the entire banking industry that carries “mortgages” as assets on their balance sheets.

The bottom line is that even if you are adamantly opposed to challenging the banks on the securitization mess, you are nonetheless in the fight if you own property that was ever touched by a supposedly securitized mortgage. If you still own that house, or think you do, you probably have one or more unsatisfied mortgages that you didn’t know about. The title companies have already decided as a matter of policy they are going to deny these claims, claim fraud, and force claimants to sue them. Small wonder, the liability could be in excess of $20 trillion dollars depending upon how the damages are calculated. The title insurance companies are only worth pennies on that dollar.

The number of underwater mortgages is vastly understated by this revelation. Practically every residential real estate transaction in the last 10+ years had a supposedly securitized debt instrument somewhere in the factual chain — which misdirected the funds to satisfy the mortgage and misdirected the parties entitled to execute a satisfaction or reconveyance. In a nutshell, that means most houses have multiple encumbrances in their chain of title that would put them underwater several times over, even if they paid cash.

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