Defunct (Bankrupt) Mortgage Lenders Network USA Keeps Showing up on Assignments

The Bigger Problem: Assignments from Nonexistent Entities

Dan Edstrom, senior forensic analyst, highlights a disturbing pattern: what happened in Chase-WAMU and IndyMac-OneWest is being replicated in hundreds of foreclosure chains.

Regulators often call these foreclosures merely “faulty.” But when foreclosing parties rely on entities that don’t exist to execute assignments years after bankruptcy, that’s not faulty—it’s fraudulent.

And the obvious question: how could the parties involved not have known?

The Mortgage Lenders Network Example

Mortgage Lenders Network USA, Inc. (MLN) went into Chapter 11 liquidation in February 2007.

• February 2009: The liquidation plan was confirmed.

• June 2009: The plan became effective. MLN ceased to exist.

• All assets and claims were transferred to a liquidating trust.

A declaration in the bankruptcy confirms that MLN owned or serviced no mortgages at the time of liquidation.

The Assignments That Followed

Despite ceasing to exist, MLN “executed” multiple assignments years later:

• February 2009: MLN assigned the loan to a bogus entity.

• July 2009: A second assignment was executed from MLN to U.S. Bank, N.A. as Trustee (with no trust specified).

• October 2013: During the homeowner’s bankruptcy—four years after MLN’s liquidation—MLN executed yet another assignment to a different party.

👉 Fact: MLN ceased to exist in 2009. Any subsequent assignment could only be seen as an attempt to perfect a pre-petition lien in violation of 11 USC 362(a).

The Fatal Flaw in the Foreclosure Narrative

For the foreclosing party to be legitimate, they must show:

• A valid financial transaction between an actual grantor and grantee,

• Occurring after MLN’s bankruptcy (May 15, 2012 filing date for later proceedings) and before the 2013 assignment.

If such a transaction existed, foreclosure defense loses. But in nearly every case, no such proof exists.

Why This Matters for Homeowners

This case illustrates the systemic fraud in foreclosure litigation:

• Assignments executed on behalf of nonexistent entities

• Robo-signed documents prepared for litigation, not commerce

• Violations of the automatic stay and bankruptcy law

• A legal system that often overlooks the absence of real transactions

Key Takeaway

When lenders or servicers present assignments executed years after bankruptcy, don’t call them “faulty.” Call them what they are: fraudulent, void, and unenforceable.

The burden is simple: if they can’t show a real, post-bankruptcy financial transaction, their foreclosure case collapses.

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Tags: Bankrupt, Chase, INDYMAC, Mortgage Lenders Network USA, OneWest, US Bank as trustee, WAMU
Posted in foreclosure defenses, Uncategorized |