Huge Foreclosure Decision- Banks Can't Foreclose if They Don't Own The Loan

Today, the Massachusetts Supreme Court decided US Bank v. Ibanez. This is the largest victory for consumers who are facing foreclosure or who have been foreclosed upon. Basically, the court found that if your loan has been securitized (and 85% of all loans have been), your 'lender' no longer has standing to foreclose.

This decision could cause the downfall of the big banks. This decision does, what TARP bailouts sought to prevent- cause the mortgage industry to implode.

We agree with the judge that the plaintiffs, who were not the original mortgagees, failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Judge Ralph D. Gants wrote for the SJC. “As a result, they did not demonstrate that the foreclosure sales were valid to convey title to the subject properties.”

The banks claimed that “securitization documents” they submitted established valid assignments that made them the holders of the two mortgages before the notice of sale and the foreclosure sale.

But the SJC disagreed.

If a loan has been securitized, the original deed is invalidated. This is HUGE, and could benefit every homeowner who has been defrauded simply because they were not told who their loan had been sold to, or who owned their note (when I am paying for a house, I want and need to know who I should be paying).

Because this area of law is so complex, I have attached a book that every person in America should read. It details how we have all been defrauded by the banks, including borrowers, investors and insurers. I am in the process of suing Citimortgage. To date, they can't produce evidence that they own my loan. I imagine they will 'create' some documents....but now it doesn't matter what they do.....they have no standing and I can prove it.

Please read the attached file, it is your duty as an American to understand how your tax dollars are bailing out corrupt banks that should have failed based on their deceit and exploitation of law.

Foreclosure Defense Book by Vince Khan:
Foreclosure Defense Book

Ibanez Decision:
Ibanez Decision

Just out of curiosity, what does it exactly mean if the bank sells your loan? You agree to pay an X ammount of interest, the bank sells your loan and the new owners ramp up your interest skyhigh? Is that about it? How did a bank selling your loan affect you? Did the payments change you had to make?

No, this does not mean the big banks are going to go down.

Let me explain. If the banks are not paid, they have lost no money. They sold the loans into what are called debt vehicles. They are bundled commodities created to cover the banks in case such a thing as the destruction of the housing and real estate market occurred.

If the bank does not get the loan money, they are not the ones out of the cash, it is whoever owns the debt vehicles.

The banks that have invested in these things are the ones that will go down and every other entity that holds these type of assets or securities.

Do you really think the banks that created this mess would not have covered their backsides? Also, do you really think that financial bill had anything to do with protecting consumers?

Yes, this will help those where the loan note was sold and the bank cannot prove they still hold the note, but the bank has already reaped the benefit from the sale of the security. The person in the home paying the money to the bank does not mean that money stays with the bank. Those payments go to the debt vehicle.

reply to post by Cassius666


My mortgage company went out of business.
Another bank bought them and I now make payments to them at the same rate of interest, the same terms, the same amount.

reply to post by DontTreadOnMe


So in other words, the bank selling your loan does not affect you in any way and that is true for everybody.

reply to post by Cassius666

As long as the bank is scrupulous....err, not greedy.
Banks have been selling mortgages for as long as I have owned a home.

With this house, our company kept our home as long as they could.

Many make some money and then sell it to another bank as a general business move.
It's really not the same as securitization.

This makes even buying a house risky. Big agencies like REMAX have their signs on properties that cannot be sold. My parents were offered a contract from REMAX to purchase a property owned by Ameriquest mortgage. Obviously they declined since Ameriquest has been out of business since 1997. Buyers need to watch out for these agencies running earnest money deposit scams.

Originally posted by Cassius666
reply to post by DontTreadOnMe

 

So in other words, the bank selling your loan does not affect you in any way and that is true for everybody.

Well, no not really. Your loan will be serviced differently when it's sold. May not sound like a big deal, but it is really. When, where, and how you can make your payments will vary. Sure you will still have to get money there by the same time, but some will let you use the internet, phone, or branch. Some banks have trouble with their accounting others are better.

In terms of modifcations, foreclosures, and short-sales, each bank is very different. So it does matter!

It seems like this "problem" can be solved by having the owner of the debt simply sign an agreement letting the bank act as their agent.

This would be interesting in how banks handle foreclosures. It seemed like they dragged their feet during short sales and didn't modify loans.

If they were agents, they would have to think of the owners and not their fees.

People need to understand exactly what was going on before forming conclusions.The layers of the securization process go very deep. In simple terms:

1. Bank lends you the money
2. They sell the loan into securization
3. The loan is then bundled with many other similar loans
4, Then the whole bundle is divided into dozens if not hundreds of pieces and sold to investors.
5. The investors then hold, sell, trade, whatever is their fancy
6. Pieces of your loan go from party to party.
7. Folks also short the securization, which in effect creates double the amount of long holders on that piece of the loan, offset by those who are short your loan.
8. This process repeats itself and you have 5 times your loan held by investors offset by four times your loan being short. In effect your loan is being paid to five different investment pool parties and four other investment pool parties are also profferring up payments on your loan along with yours to even it all out. (possibly exaggerated)
9. All along, the legal requirements for transferring ownership of the loan are ignored. Thats because there is no true distinct owner of the loan. Since they didn't bother naming the true owner before hypothecating the loans, these loans are truly invalid under contact law.

The banks are just acting as agents of the trust when they foreclose. The trust is just a nominee and can't be an owner under the law. These means neither the bank nor the trust are able to truly prove ownership.

I said long ago the only solution was for the fed to buy these loans and refinance them at current market values. Banks could have continued servicing them to earn their money. A $100,000 loan modfied down to $70,000 still means a $135,000 total repayment at 5% interest. This could have allowed most people to keep their homes and also would set the ground for newly valid mortgage contracts. And the government could have even made a profit on it and saved the economy in one quick swoop. Proves they are not friends of the people.

reply to post by sligtlyskeptical

one of the simplest and smartest posts I've read in a long time.

The big secret is there is no loan and never was the bank never loaned you anything in the first place. The promissory note paid for the house in full and you created it not the bank. They can't prove they have a claim in court but the courts have been in collusion with them until recently. Maybe this will change things.

Originally posted by lostviking
Today, the Massachusetts Supreme Court decided US Bank v. Ibanez. This is the largest victory for consumers who are facing foreclosure or who have been foreclosed upon. Basically, the court found that if your loan has been securitized (and 85% of all loans have been), your 'lender' no longer has standing to foreclose.

This decision could cause the downfall of the big banks. This decision does, what TARP bailouts sought to prevent- cause the mortgage industry to implode.
Because this area of law is so complex, I have attached a book that every person in America should read. It details how we have all been defrauded by the banks, including borrowers, investors and insurers. I am in the process of suing Citimortgage. To date, they can't produce evidence that they own my loan. I imagine they will 'create' some documents....but now it doesn't matter what they do.....they have no standing and I can prove it.
Please read the attached file, it is your duty as an American to understand how your tax dollars are bailing out corrupt banks that should have failed based on their deceit and exploitation of law.
Foreclosure Defense Book by Vince Khan:
Foreclosure Defense Book

SnF and my personal standing ovation!
This is Galactic

Mods! Why is this not Front Page?

I posted this in another thread but

I hate to say this, but it's only a matter of time until this is taken to the supreme court and eventually, one way or another, won by the banks.

The banks own our government including our supreme court.

Originally posted by hawkiye
The big secret is there is no loan and never was the bank never loaned you anything in the first place. The promissory note paid for the house in full and you created it not the bank. They can't prove they have a claim in court but the courts have been in collusion with them until recently. Maybe this will change things.

This case may change the way foreclosures are handled, but it's not going to help the "no money lent" folks because the argument is bogus.
www.mnbar.org...

reply to post by Bordon81


sorry. post deleted.

reply to post by saltheart foamfollower

The banks aren't going down because of consumer foreclosures. The banks are going to be liable when investors (teacher's unions, corporations, etc) sue them for fraudulently not disclosing the true risk of the mortgage securities they were sold. The pools of loans that were sold as AAA in some cases were high risk. The banks didn't due their due diligence to ensure that buyer's were qualified, because they were going to sell the loans anyways as securities.

reply to post by saltheart foamfollower

The banks absolutely covered their backsides. Not only did they sell the loans into securitized pools, they had insurance and other vehicles to maximize return. The banks, when the markets were good, didn't think that people would catch on to their scheme. However, when the markets went bad, and people started to find out who their true lender was, it became obvious that they had been lied to.

When you close your loan, money isn't wired from your lender to close your loan- it is funded by the investor pool who will purchase your loan. When you pay off your mortgage, you only pay off the servicer of your loan. The bank that services your loan is a pretend-lender....they don't own your loan. The only company that can foreclose on your loan is the true lender. The banks don't want you to know this, or their entire fraud is exposed. They are all in cahoots knowing that if we are confused enough, we can't take action. Sooner or later, the truth will become obvious...................

reply to post by Cassius666

There are laws to prevent this type of fraud, to ensure integrity in the system. The financial masterminds have learned to exploit every loophole, and finally crossed over into illegal action. For instance, not having proper mortgage assignments from one party to another, potentially clouds a title.

I believe that homeowners have a right to know that no money ever exchanged hands at your closing. I believe we have a right to know who 'funded' the loan. If we don't know the basic principles of our monetary system we can't defend ourself. I, for one, lost money in my 401k because I had no idea that bank's were merely transaction facilitators (and had no responsibility for the integrity of their loans). Had I known what was going on, I would have stayed away from mortgage securities.

It is about transparency, and that the law is the law. The bankers have now proven more dangerous than the lawyers.

reply to post by sligtlyskeptical

You nailed it Sligtly...but the government can make the taxpayers pay via TARP and QE 1, 2 and 3, have the Fed print more money. The government is looking forward to the Fascist state they are building, and having all the mortgages under their thumb gives them an enormous amount of power.