Mike H wrote:
Another way of looking at this "servicer cheating" problem is the Neil
Garfield defense. Namely, the fact that in many of these loans, the security
interest in the property was never perfected because the entity named on
the security instrument, (mortgage/deed of trust) was not the "real lender",
thus violating the Truth in Lending laws.
Thus in his view, it does not really matter whether the originator is "dead"
or "alive" because either way, it never lent the money in the first place so
the security agreement was defective from the "get go" and therefore all
the "assignments" are also a nullity because the "originator" never had a valid
lien which it could assign to any other entity. This would leave the "obligation" unsecured.
This viewpoint could be used as the basis of a "quiet title" action, ie
expunging the mortgage/deed of trust from the public records.
Of course, the Note would still be there, but it also does not name the
true lender, but only a "straw man" ,who only lent its name for a fee. This was done so that the Note could be sold multiple times to different investors
in the "alleged note pools" backing the CDO's.
The servicers bought the "servicing rights" to these "phony Notes" for 2 to 3% of the face value of the Note. Servicing rights really means "foreclosure rights" and they get to keep the proceeds of the sale, not the
true investors who put up the money in the first place.
Nomi Prins in her book, "It takes a Pillage" points out that 1.4 trillion in
subprime loans were made from 2001 to 2008, but ten times that amount, 14 trillion,is missing from the pension, insurance and 401k plans which invested
in that 1.4 trillion of subprime loans. So clearly, what we have here is a massive "Ponzi scheme" where the same Notes were sold over and over again. This is why so many of the Notes presented in foreclosure cases are
counterfeit color photcopies or outright forgeries made up by the servicers
to try and fool the Judge into ruling in their favor. Up to now, they win 95%
of the time, but that may be changing as more pro se's start to wake up to
the servicer fraud which is being perpetrated against them.
Bottom line, inspect that Note carefully if you are in foreclosure and if
you're not, investigate the possibility of a Quiet title action if the "originator"
on the loan documents was not the "true lender".