Tonight! 6PM EDT: Where did all that money go and why isn't some of it credited to the loan receivables from homeowners?

Indemnification Is Not Enough!

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

A common form of indemnification comes when a foreclosure is filed based upon a “lost” note. The forecloser promises to pay you if someone else shows up with the note or, presumably, ownership of the debt. I remember getting a few of those cases from Taylor Bean and Whittaker back in 2008 — you remember them, don’t you? They went to jail. I rejected their indemnification because it was apparent to my eye, trained in securities analysis, that I would have been just as well off and maybe better if I received a promise from a squirrel to give me some nuts next winter. They declared bankruptcy literally 3 days after the attorneys “man to man” assured me it was a good offer of indemnification.

Tonight join Charles Marshall and Bill Paatalo as they discuss some facets of indemnification about which the average lay person neither knows or cares — until it means saving their home.

Indemnification of mortgages is a topic which is implicated when homeowners seek to refinance or sell their homes or the mortgage notes associated with their homes. Indemnification happens when one party tells another party: I will indemnify you from harm, meaning I will carry the weight of any legal consequences, and if you get an unfavorable legal consequence, such as an adverse Court ruling or judgment, I will in effect pick up the tab, and see that you are held harmless.

Securitizers of mortgages and their servicers and auction sale trustees often make it sound as if the hypothetical of another party trying to enforce their sketchy mortgage notes is just a misplaced notion, and that in any case they would argue (particularly in court proceedings or the pleadings related to same), they the institutional trust or servicer could or would indemnify borrowers from a random third-party coming onto the scene to try and collect on the note.

Discussing a California appeal case today shooting down that whole scenario, showing how indemnification may not be enough in these situations.

Posted in Uncategorized |