Citibank fails to prove Mortgage Ownership, in Foreclosure Suit

Thank goodness.  It couldn’t have happen a day too soon.

NBC Nightly News (03-09-09) Tent Cities of Homeless Springing Up In Bad Times

Tent City, USA…

The havoc, that the Mortgage Crisis shell-game of the last decade, has wrought has had truly Epic Consequences.

Here’s another example.

Death of the American Dream? – USA

“This parking lot in Santa Barbara CA, is more than it seems.”

“It has become a refuge for those who lost their homes in America’s Mortgage Crisis, and now have no choice but to use their cars as ‘a place to sleep’ at nites.”

“Bonnie used to be a successful Real Estate Broker, until the Mortgage Crisis took her job.  And her 2 Homes worth over a Million Dollars each.”

Journeyman Pictures

[Embedding disabled by request]…

Evicted People — are People Too!

Tent City Interview at Camp Take Notice

Mark Horvath, Founder of

Posted: September 20, 2010 — huffingtonpost

Lily Au, a housewife who was once helped by a homeless man and now helps fight homelessness, asked me to visit a tent city in Ann Arbor. After a long drive and a long walk into the woods we arrived at Camp Take Notice . It was there I met Caleb Poirier, a brilliant young man who prefers to just say he is the organizer of Camp Take Notice. Below is a short interview with Caleb that I hope you’ll take the time to watch.

I learned so much from my short time with Caleb. My biggest takeaway is Caleb believes the shelter system is vertical support meaning help comes down from employees to the homeless population then stops. In the tent city model support is horizontal with homeless people helping other homeless people. There is much truth to that and I hope homeless service providers will look at horizontal support solutions empowering homeless people to help each other.  [clip of interview on HuffPo page]

Donation Page for CampTakeNotice

Homeless Has A Name


That Tent City CampTakeNotice near Ann Arbor Michigan, has been forced to move 6 times, since its inception.  A village of like-minded residents, just fighting to survive another day.  But they must not camp too close, ie “within the views” of those main highways of commerce … Now THAT wouldn’t be prudent!

Those are some of the Stark Images — of our fellow Americans — victims of the last decade of Greed Gone Wild.

Sadly we are often too busy, to notice them much anymore. The 99er’s, the Evicted, the Homeless, the Hopeless.  

Noticed or Not — They are simply our fellow Americans, who have been caught in the very real crossfire of job layoffs and mortgage foreclosures.

And those Sub-Prime Mortgage Resets are about to get their second wind … in 2011 … Will you be next on their Economic Hit parade?

I wonder, if the “Tent Cities” in America will ever become,

“Too Big to Fail” ???

I hope not.  (or maybe if they did get TOO Big, then maybe they’d get a Bail Out too?)


Economist James Galbraith was on the Ratigan Show today — he strongly suggested that Banks are failing to live up to the Corporation Charters on which they were founded — including re-investing in local communities and businesses.

Galbraith contends, this is due to the lack of serious Regulation and oversight — Banks have found it more convenient to make their Millions, in other more “creative ways” besides “helping the locals”.

Galbraith calls the ‘new norm’ of predatory banking practices — the “Predatory State“;   he asserts that the Economy cannot be fundamentally “fixed” until this problem of lax Regulation is fixed.

To wit:

Galbraith himself argues the fundamental illusion of viewing the U.S. economy through the free-market prism of deregulation, privatization, and a benevolent government operating mainly through monetary stabilization. The real sources of American economic power, he says, lie with those who manage and control the public-private sectors — especially the public institutions in those sectors — and who often have a political agenda in hand.

Galbraith calls this the Predator State: a state that is not intent upon restructuring the rules in any idealistic way but upon using the existing institutions as a device for political patronage on a grand scale. And it is closely aligned with deregulation.

In the last decade, as clear signals were sent that previous laws, regulations, and supervisory standards would be relaxed, the financial industry was overrun by the most aggressive practitioners of the art of originating and distributing mortgages that were plainly fraudulent. The rewards of involvement were extraordinary, to the point that 40 percent of reported profits in the United States were earned in the banking sector by enterprises that paid out about half of their gross revenues in compensation.

The game came to an end, of course, in September 2008, with the failure of Lehman Brothers. The Troubled Asset Relief Program [TARP] effectively quelled a panic, but at the price of forestalling restructuring and reform that would get at the root of the financial crisis. And even though we have managed to sidestep a second Great Depression, that success is marked by extreme limitations:  by a decimated housing sector and a reeling middle class; by the functional dismantling of the major institutions of the American welfare state; and by a loss of trust in the financial sector that cannot be regained until those responsible for the mortgage fraud are identified and prosecuted, in full.


James K. Galbraith — Levy Economics Institute of Bard College

Public Policy Brief — No. 112, 2010

Also on Ratigan Show today, it was also mentioned that the Bankers attempting to make their Millions these days, by evicting folks from their Homes

Yet, those Banksters MAY NOT EVEN HAVE THE LEGAL RIGHT to do so.

There is this little problem of Banks have to “establish the chain of title“.

Something apparently those CDO Mortgage collateralization schemes, of the last decade, managed to destroy.  That Bank which lent you the money, may no longer have a “clear claim on the deed”.  [in those cases of CDO Securitization, and the subsequent sales of those “Mortgage Securities”.]

What is this?  Is there a Legal Chink in the Armor in the Corporation — who would ultimately like to ‘own everything’?  

(Corps are just a “legal abstraction” afterall — that exists solely for ‘making ever-more money’, no matter the social costs.)


Ellen Brown, webofdebt — Aug 18, 2010

Mortgages bundled into securities were a favorite investment of speculators at the height of the financial bubble leading up to the crash of 2008. The securities changed hands frequently, and the companies profiting from mortgage payments were often not the same parties that negotiated the loans. At the heart of this disconnect was the Mortgage Electronic Registration System, or MERS, a company that serves as the mortgagee of record for lenders, allowing properties to change hands without the necessity of recording each transfer.

MERS was convenient for the mortgage industry, but courts are now questioning the impact of all of this financial juggling when it comes to mortgage ownership. To foreclose on real property, the plaintiff must be able to establish the chain of title entitling it to relief.

Strike up a BIG Victory for the “little guys” …

Could Millions of Homes Be Foreclosure Proof?

by Yves Smith, nakedcapitalism — August 20, 2010

A story by Ellen Brown gives a good summary of how the widespread use of a national electronic mortgage registry called MERS, designed to save mortgage securitizers the cost and bother of recording mortgages at the local courthouse, is backfiring spectacularly.


The article cites a recent case in California which accepts MERS’s contention that it is a nominee, but finds that is insufficient for MERS to foreclose:

The latest of these court decisions came down in California on May 20, 2010, in a bankruptcy case called In re Walker, Case no. 10-21656-E-11. The court held that MERS could not foreclose because it was a mere nominee; and that as a result, plaintiff Citibank could not collect on its claim. The judge opined:

Since no evidence of MERS’ ownership of the underlying note has been offered, and other courts have concluded that MERS does not own the underlying notes, this court is convinced that MERS had no interest it could transfer to Citibank. Since MERS did not own the underlying note, it could not transfer the beneficial interest of the Deed of Trust to another. Any attempt to transfer the beneficial interest of a trust deed without ownership of the underlying note is void under California law.

In support, the judge cited In Re Vargas (California Bankruptcy Court); Landmark v. Kesler (Kansas Supreme Court); LaSalle Bank v. Lamy (a New York case); and In Re Foreclosure Cases (the “Boyko” decision from Ohio Federal Court). (For more on these earlier cases, see here, here and here.) The court concluded:

Since the claimant, Citibank, has not established that it is the owner of the promissory note secured by the trust deed, Citibank is unable to assert a claim for payment in this case.

That is Great News for our fellow Americans who may be facing Foreclosure;  there IS a possible legal avenue for fighting back against the sterile banking practice, that would “lay claim” on all that you’ve worked for, all that you’ve earned — all for the sake of another “quick quarterly buck”.

The Banks, til now have little incentive to renegotiate the Mortgage — given all the stories of  them dragging out such Re-fi requests for months and months — even years!  Could it be, they don’t want to Re-write the Mortgage, because in far too many cases —  the Bank No Longer OWNS THE FREAKING DEED !?

But will those folks living in their car, living in a tent, pounding the pavement in search of a non-existent job — will they even hear about this new ruling against Citibank Foreclosure hounds — let alone have the means and the ability, to pursue such a fight?

one wonders …

Some how in this Mortgage Crisis scandal, it seems the wrong group of people, ended up losing everything, and living on the streets … don’t you think?

Such is life on the mean streets, these days … those with the Gold … far too often make out, like Bandits!

and we make out like the Banditees.


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    • jamess on October 2, 2010 at 01:47

    Ratigan interview with James Galbraith — Oct 1, 2010

    The followup interview — regarding GMAC speeding

    the Foreclosure Process.

    Ratigan interview with Bill Gross — Oct 1, 2010

    discussion of the “Fraud” involved in the Sub-prime Mortgage system — as it relates to the Foreclosure process.

    • jamess on October 2, 2010 at 02:22

    Bank Of America Delays Foreclosures In 23 States

    by The Associated Press

    October 1, 2010

    Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents.

    The move adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.


    Two other companies, Ally Financial Inc.’s GMAC Mortgage unit and JPMorgan Chase, have halted tens of thousands of foreclosure cases after similar problems became public.


    Analysts caution that most homeowners facing foreclosure are still likely to lose their homes.


    A lawyer for the homeowner in the case, James O’Connor of Fitchburg, Mass., said such problems are rampant throughout the industry.

    We have had thousands, maybe hundreds of thousands of foreclosures around the country by entities that did not have the right to foreclose,” O’Connor said.

    The disclosure comes two days after JPMorgan said it would temporarily stop foreclosing on more than 50,000 homes so it could review documents that might contain errors. Last week, GMAC halted certain evictions and sales of foreclosed homes in 23 states to review those cases after finding procedural errors in some foreclosure affidavits.

    Consumer advocates say the problems are widespread across the lending industry.

    The general level of sloppiness is pervasive around the industry,” said Diane Thompson, counsel at the National Consumer Law Center.

  1. It’s strange to be in the position I’m in, every day clicking on blogs, and seeing people talking about the obscure world that’s my worklife.  When you want to determine what the chain of title is, who holds the “fee” in a property and what claims there are against it, who are the claimants, are their claims valid, you hire…me.  Or somebody like me.  This is what I do, every day.  It pays my rent, and puts food in my belly, and after 25 years of doing this it’s (almost unbelievably) one of the hottest topics in the economy today, and virtually nobody discussing it really has a solid grasp on it, because it is so obscure and complex.  

    I remember about 10 years ago when all those “Asset-backed Securitization Trusts” started sprouting like mushrooms, one of my co-workers pointed out what the dangers and likely consequences were.  I didn’t take her warning seriously enough because I simply didn’t foresee what a huge proportion of the nation’s mortgages would be sucked into that maw.  I assumed she was right on the specifics, but that it would be a marginal problem with minimal impact.  Oddly, the “market” for these Mortgage-Backed Security Pass-Through Certificates proved nearly insatiable.  That took me completely by surprise as every year the percentage of new mortgages assigned into these trusts was a multiple of the year before.  Of course, I had been unaware of the phenomenon of “Credit Default Swaps” and the  fact that there would be an entire category of investors, including giant institutional ones, with a vested interest in generating  and churning around defective mortgages so that they could bet against their value and the homeowners that gave the mortgages.  I certainly didn’t foresee a multi-trillion dollar market emerging in “investment instruments” betting against homeowners paying off their mortgages.

    MERS is another unique critter that emerged in the same time frame.  In and of itself, there’s nothing inherently  wrong with what MERS was initially designed to do, although county recorders will disagree with me, feeling they’ve been cut out of getting hundreds of millions of dollars in recording fees for Assignments of Mortgages that never got put on record in county offices, but took place on MERS’s computers instead.  The problem with MERS is that its character as a “black box” made it an admirably secluded spot for all sorts of shenanigans to be played, “mortgage, mortgage, who’s got the mortgage” as banks and their “trusts” were able to pass bad loans back and forth among each other to hide them from shareholders and regulators behind the veil of MERS.  I think the other thing that happened with MERS is that it also grew much too fast, bringing in people who were clueless about its valid functions as opposed to the scams being run, the larger it got the more defective and ripe for abuse it got.  

    Anyway, I could go on all night like this, but I’m around for the duration, any questions people have about title, chains thereof, defects of title and why banks have been foreclosing on mortgages they don’t technically own and all that kind of happy horseshit, I’ll be delighted to discuss this, with of course that one essential caveat:  IANAL.  Thank goodness, because the real estate and title lawyers got some ‘splainin’ to do.

  2. Rep. Alan Grayson Explains the Foreclosure Fraud Crisis, Shows Examples of Forgeries and Fraud    Zero Hedge

    Don’t be foreclosed in Florida. The State of Florida has set up special kangaroo foreclosure courts.

    At the behest of bankers the State of Florida has set up special foreclosure courts staffed by retired judges who do not necessarily have any experience in foreclosure law. They typically allow about 90 seconds per case for defendants attorneys. One man had his home foreclosed despite having paid cash and having no mortgage! Etc. etc. A company called Lender Processing Services provides forged documents on demand for foreclosures. Instead of complying with state laws requiring mortgages and notes to be filed with the county recorder the mortgage industry in 2005 began recording titles and notes electronically via MERS, Mortgage Electronic Recording Service which is partly owned by Freddie and Fanny! So US Government Supported Enterprises are inherently involved in systematic foreclosure fraud.

  3. Improper GMAC Affidavits Leading to Charges of Document Fabrication to Change Title   naked capitalism

       Ah, what a tangled web we weave when first we practice to deceive, said the bard.

       And the web emanating from the GMAC affidavit improprieties extend much further than most may realize. Although GMAC continues to maintain that having its “robot signor” officers like Jeffrey Stephan provide affidavits on matters they know nothing about is a mere technical problem that they can remedy. In fact, an affidavit is a statement of someone with personal knowledge of a matter. Stephan signed as many as 10,000 documents a month and clearly could not have personal knowledge of the underlying situations. Deliberately preparing and submitting inaccurate documents in a legal proceeding is a fraud on the court, something most judges really really do not like.

       Predictably, lawyers who are contesting foreclosures are jumping on the affidavit issue and using it to open up broader issues with foreclosures where GMAC was the servicer of the loan. For instance, this letter to a judge in South Carolina, a judicial foreclosure state, discusses not only the role of an apparent fellow robot signor of Stephan, one Jack Kerr, but more critically, another document provided in this case stamped (not signed) by one Judy Faber, also of GMAC. The Faber document transferred title to the party foreclosing in the case, so if the document is invalid, the plaintiff, in this case a Deutsche Bank trust, will lack standing to foreclose (legalese for “no tickie, no laundry”). Here is the critical section of the letter (on page 2):

              Upon information and believe, Judy Faber has instructed document custodians in thousands of foreclosure cases to apply her stamped endorsement bearing her name after foreclosure commenced to an allonge and after a consumer had challenged the chain of title in the case. Upon information and belief, Ms. Faber and her document custodian team at facilities described in the Washington Post article attached to this letter have fabricated and changed title in thousands of foreclosure cases.

       This takes a wee bit of unpacking. The pooling and servicing agreement, which governs who does what when in a mortgage securitization, requires the note to be endorsed (just like a check, signed by one party over to the next), showing the full chain of title, and the minimum conveyance chain is A (originator) => B (sponsor) => C (depositor) => D (trust). The note, which is the borrower’s IOU, is the critical document in 45 states. The mortgage, which is the lien, is a mere accessory to the note and can be enforced only by the proper note holder (the legalese is “real party of interest”).

       The wee problem is that this apparently never done (I’ve been told one person trying to track down a particular note found it, at Countrywide. The guy who wandered down the corridor to produce it from his files claimed that Countrywide kept all the notes on its deals, and would send them out on request when someone needed them in a foreclosure. If this is true, it indicates there are pervasive and not readily remedied problems. The required endorsements were never done [oh, and the bankruptcy trustee should approving any assets leaving Countrywide, a little nicety that evidently is not being observed either]).

       Why is this serious? The cure for the mortgage documents puts the loan out of eligibility for the trust. In order to cure, on a current basis, they have to argue that the loan goes retroactively back into the trust. This is the cure that the banks have been unwilling to do, because it is a big problem for the MBS. So instead they forge and fabricate documents.

    All the king’s horses and all the king’s men

    Couldn’t put Humpty together again.

    —Mother Goose

    Nor can Ben and Timmy or Freddie and Fanny.  

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