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Reversing Foreclosure

Reversing Foreclosure

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Published by: LoanClosingAuditors on Mar 29, 2011
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11/27/2011

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Posted on September 24, 2009 by livinglies
The point must be made, and the evidence must be allowed, that the pretender lenders aregaming the system every day and literally stealing homes from both homeowners and investorswho thought they had an interest in those homes when they bought mortgage backed securities. This leaves the borrower in a position of financial double jeopardy wherein the trueowner of the loan can still make a claim and the investor is simply out of luck — usually havebeen misinformed about the payments or status of the pool of assets the investor bought into.From Landmark v Kesler — see entire decision:kansas-supreme-court-sets-precedent-key-decision-confirming-livinglies-strategies
“6. It is appropriate for a trial court to
consider evidence beyond the bare pleadings todetermine whether it should set aside a default judgment.
In a motion to set aside default, atrial court should consider a variety of factors to determine whether the defendant or would-bedefendant had a meritorious defense, and the burden of establishing a meritorious defense restswith the moving party.7. Relief under K.S.A. 60-255(b) is appropriate only upon a
showing that if relief is granted theoutcome of the suit may be different than if the entry of default or the default judgment isallowed to stand
; the showing should underscore the
potential injustice of allowing the case tobe disposed of by default
. In most cases the court will require the party in default to demonstratea meritorious defense to the action as a prerequisite to vacating the default entry or judgment. Thenature and extent of the showing that will be necessary lie within the trial court’s discretion.”A highly important finding in this decision and affecting those whose homes have already beensubject to a foreclosure sale, judgment or eviction (unlawful detainer) proceeding. In most casesthese proceedings have resulted in actions taken by the parties upon the default of the allegedborrower. The default occurs when the borrower fails to answer in a judicial state or fails to file alawsuit in a non-judicial state. The first time the matter comes before a court is when theforeclosing party files something in court — like an eviction action or petition for writ of possession. The mistake that courts are making at the trial court level is that they are treating thematter as though it has been judicially concluded, as if there was a hearing or trial where theparties were heard on the merits. This is simply not the case.Judges must come to the realization that this is not the end of the matter — it is the beginning.And they should consider any motion directed to the merits of the would-be forecloser’s claimand the defenses of the homeowner. And unlike a motion to dismiss, where there will be plenty of time to consider factual matters later, the motion to set aside the sale, foreclosure judgment,notice of default, notice of sale, or judgment of unlawful detainer or eviction is a finaldetermination of the merits — most often without hearing one shred of evidence offered or proffered by the homeowner. In fact, there are numerous cases where the trial judge abruptly andeven rudely silenced the lawyer or pro se litigant saying that this was a simple matter of eviction(or whatever the motion was pending) and this is not an evidentiary hearing.
Other Judges seethe inherent unfairness and the denial of due process when the homeowner raises objectionsthat the pretender lender had no right to foreclose, did so improperly and essentially stole
 
the title abusing state process and creating a fraud upon the court and everyone else. Butthe application of this approach has been inconsistent and uneven.
While we have seen numerous cases turned on their head where a homeowner has beenrestored to possession of the house, and even clear title awarded to the homeowner thusblocking any future foreclosure, we have seen many other cases where Judges are still viewing these cases as dead beat borrowers trying to game the system.The point must be made, and the evidence must be allowed, that the pretender lenders aregaming the system every day and literally stealing homes from both homeowners and investorswho thought they had an interest in those homes when they bought mortgage backed securities. This leaves the borrower in a position of financial double jeopardy wherein the trueowner of the loan can still make a claim and the investor is simply out of luck — usually havebeen misinformed about the payments or status of the pool of assets the investor bought into.
“How do I prove that?” is the usual question. You don’t prove it you ask it. After performing aforensic review, hopefully by an independent expert, you present allegations and evidence thatupon the best information you have, you believe the loan was securitized and that the owner of the loan is not the party who brought the action. You offer further your belief that the loan mighthave been paid or transferred by reason of federal bailout or insurance or credit default swaps,and that this pretender lender refuses to answer the questions put to them in the qualified writtenrequest and debt validation letter.Since the QWR and DVL are statutory letters giving rise to an obligation to answer and resolvethe issue, and the pretender lender is already in violation, the only answer the pretender lender could have to avoid sanction for failing to conform to statute is to say they are not a lender andtherefore they don’t have any obligation to answer. This of course knocks them out of theposition of would-be forecloser. If the pretender lender simply fails to comply, then your positionis that no creditor can seek to collect on a debt without proving the debt is due. Since you haveasked for a full accounting of the chain of title on the loan and the money received from allparties, not just the borrower, it is impossible to state how much of the obligation is due and towhom it is owed.Thus the answer is that you allege the facts, you present probable cause (forensic review) for your allegations and then enter the discovery phase in which you press the pretender lender intoeventually taking the position that they don’t need care, custody or control over the note or loan.They will take the position that they have the bare right to enforce the note and mortgage with or without the proper documentation. Most judges won’t buy that.By the way, a simple and deadly question to ask the pretender lender in litigation is whether theyhave complete decision-making authority to modify the loan. You’ll be killing several birds withone stone when answer or refuse to answer that question — especially in California where thereis an obligation on the part of the
lender 
to have a modification program in place. The currentprograms in place are from servicers, not lenders.
 
Posted on September 4, 2009 by livinglies
Here is a good article from NYT but once again they are describing the news instead of reporting it. No investigation. Why do you think that servicers et al are not REALLYinterested in modifying your mortgage? Why do you think they want you to believe that youare “in process” for mortgage modification when your request was denied months before?The answer is simple: if the obligation is modified then it isn’t in default. If it is notmodified then it IS in default. And the pretender lender intermediary players NEED yourloan to be in default.The actions of the servicers and other intermediaries are designed to achieve two results: (1)to make you think that you are negotiations to modify your mortgage and (2) to deny yourrequest for modification. As this New York Times article points out, the decision not tomodify comes within days of receiving your request but they NEVER tell you that. Why?Because they are running the clock in order to have you in an incurable position of default.Why? Because ONLY a default will trigger the credit default swaps that “insure” yourobligation along with hundreds or thousands of others. And they have “insured” your loanas much as thirty times over. So if your loan is $300,000 it is possible that they get as muchas $15 million — but only if you are in default (or at least only if the pool defaults on theobligation owed to the investors). They can’t get that money if your loan is modified. Andeven if your particular loan is not delinquent or in default, as long as the pool defaults, theystill get paid.So adding to the misrepresentations to borrowers and investors in the creation of thesesecuritized “loans” (which are in reality “securities”) is the misrepresentation to borrowersand their lawyers that they are in good faith negotiations to modify the loan because (a) theservicer has been promised the house as part of the scheme (even though they never put upa dime for the loan) and (2) the Wall Street players are getting a pornographic amount of money based on the premise that your loan is in default whether it is or it isn’t, and whetherit was paid by third parties or not.And NOBODY wants to bring this to the attention of the “investors” who purchased bondsthat were mortgage backed securities because some people might do a little arithmetic andquickly come to the realization that they paid as much as 3 or four times the amountactually funded in the loan and are now sitting on an unenforceable promise of security thatat best is worth a tiny fraction of what they paid.So who do you think paid for all this? YOU did along with all the taxpayers of this greatnation. Do you really think that the Wall Street players like AIG who made a livingassessing risk, never peeked under the hood to see what was going on? In a real deal, theyinspect deals the way my grandmother inspected chickens before she made the purchase.No, they had to know that the ultimate payment on these “bad bets” (which incidentallywere guaranteed to be triggered to the advantage of anyone holding a credit default swap),they must have known that the ONLY source of payment would be the Federal Governmentwith taxpayer money and newly printed money. The TARP money went not to holders of “troubled assets” but to holders of these bets and we paid them off for a horse race that wasrigged from the start.

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