Worden: THIS IS HUGE!
It seems like at least a full year ago or more I wrote about the mortgage mess and how virtually impossible it will be to unravel those “bundled” mortgages that were sold to mostly foreign investors. I further wrote that because it will be almost impossible to establish who actually owns a given mortgage, it will be just as impossible for a lender claiming to have ownership to prove that ownership and thereby establish legal authority to proceed with foreclosure.
Really smart people will demand proof of authority in court foreclosure proceedings, and when this proof cannot be presented, they can live in their homes without paying another dime in payments, perhaps forever!
Carl F. Worden
I’ll give you an example. Let’s take a worldwide trip, and at every destination on every continent, you save one cup full of sand. You come back to the U.S. with 50 cups of sand, one from each place you visited, and dump all of it together in a running cement mixer for about two hours. How can you prove where each grain of sand came from? Okay, so you can separate each grain and analyze it. Through careful scientific examination, you might be able to prove where one grain of sand came from, then another, then another. The problem is that you can’t prove which country contributed the most sand until every grain is slowly and exhaustively examined and categorized.
Sounds like a near impossible undertaking, don’t it?? That is exactly the undertaking these banks must go through to establish the authority of ownership of all those broken-up and bundled mortgages. Investors bought blocks of broken-up, bundled mortgages, so parts of one mortgage might have been purchased by perhaps 20 or more foreign investors along with parts of other mortgages. With all these fractions of mortgages out there on the beach, how does anyone think they might be able to prove they have enough ownership authority to foreclose on just one home they invested in, let alone a bundle of them?
That is the near-impossible task the banks face right now, and they tried to get away with a fast one by bluffing their way through prior foreclosure proceedings, but now that the whole truth of the mess is all over Fox, CNN and every other media network out there, the banks have halted further foreclosure proceedings until they can prove they have authority to foreclose — and in many, if not most cases, they won’t be able to.
Why is this huge? Well, if the banks, who broke-up, bundled and sold those mortgage investments, can’t prove authority to foreclose on any one home, they will be forced to buy all those bundled mortgage investments back, because part of the allure in first mortgage investing is the safety valve of foreclosure spelled out in the agreements the investors accepted, and if there is no legal authority for the banks to foreclose on the properties, they have breached their contractual agreements with the investors and must make the investors whole — by buying the investments back with money the banks don’t have — and that, my friends, will be the final straw that broke America’s financial back. The feds have already given those banks all the money they are going to in previous bailouts, and printing even more money will send the U.S. into uncontrollable hyper-inflation, cessation of all entitlement program payments and a subsequent complete breakdown of social order.
Nothing else, short of a massive, unanswered nuclear attack on every corner of the United States, would be more disastrous.
October 18, 2010
A New York State Court judge has just ruled that it is ILLEGAL to separate the mortgage from the note.
IF this ruling holds, the mortgage servicer, or any purchaser of a bond which contains any portion of the mortgage cannot seize the property unless he can also recover or possesses the blue-ink (original) real-estate lein note to prove ownership of the debt.
That is why I say the mortgagee or his assigns must be able to produce the blue-ink copy of the note along with proof he is the owner of the mortgage to prove ownership.
According to an opinion released by a Texas appelate court judge, this is also the case in Texas, when judicial contest of the foreclosure intervenes in the State’s typical, non-judicial foreclosure process.
Texas is NOT one of the 23 states that requires a judge to rule on the foreclosure, so it is likely that a judicial challenge in all the remaining non-23-states will uphold this position.
When challenged, no note equals no foreclosure.
Why should the mortgagor cooperate? When he finds out that the unknown holder of the blue-ink, original, real-estate lein note is the true owner of the property, and that he/she can sue to collect on the note even if the mortgagor has forfeited the house to the bank’s foreclosure?
Go to court and it is open and shut. No note, no foreclosure, and pray the true holder of the blue-ink note never shows up before the statute of limitations runs out on it.
my 75 yr. old mother is currently going through foreclosure proceedings in reference to the home she’s lived in for over 20 years.What’s happened is my brother, and overseerer of the financial part of the loan skipped town after foreclosing on his own home. We were unaware that my mother’s home was in jeorpardy of foreclosure until a few months later. My mother made checks out to my brother to pay the loan company (she has all the cancelled checks) but he spent the money for other reasons. I am ignorant when it comes to “bundled” mortgages,banking investments,lending practices, etc. However,it surprised me to discover that the company initiatiating the foreclosure on the property is Deutsche Bank National Trust Company for New Century Alternative Mortgage Loan Trust 2006-Altl, Is based out of Germany. Who has the authority to foreclose on my mother’s house. We are very confused about this. The Legal aid attornery doesn’t seem to have any answers. Can you provide us with some insite. thanks
So there is now a new class of mortgages, the unprovables. These fractional mortgages should be sold at deep discounts, since only cooperation from the mortgagee will resolve the marketability of them.