Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Archive for October 2010

downplaying foreclosure paperwork failings

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This is not about a missing signature here or there.
•  It’s about the big banks trying to subvert the Land Title laws which the common law has relied on for hundreds of years.   The reason our laws and customs REQUIRE these documents are in writing AND recorded AND requiring the original signatures  is to protect the people from grievous, irreparable harm.
Has cutting corners led to clouded titles on half the properties sold in the past decade?  Who pays for that remedy? If title insurers withdraw from the market, how will you sell your house next year?
•  It’s about mortgage backed securities sold to your pension fund and mutual funds in which the Trustee, in black and white expressed contract,  certified there was a valid chain of endorsements on the mortgages and notes delivered into the trust.  How many MBS are hollow shells, without assets?     Failure of these MBS vitiate their tax-favored REMIC status, requiring a 100% tax, retroactive.  So what are the pensions worth now?
•  It’s about banks thumbing their nose at the notary laws.
•  It’s about banks demanding the courts permit them to ‘cure irregularities in paperwork’ when the black letter of the law prohibits it.
•  It’s about the banks filing motions with the courts demanding the silence of opposing attorneys that expose bank affidavits given ‘in bad faith.’
•  It’s about banks hiring shop clerks to sit and forge signatures all day without the clerks even understanding what the word “affidavit’ is.
•  It’s about banks forging notices of process service for foreclosures.
•  It’s about banks filing notices of assignment of mortgages AFTER the foreclosure lawsuit was filed.
•  It’s about bank vendors relying on document forgery consultants to ‘recreate’ a paper trail.
•  It’s NOT about people not honoring their commitment and ‘getting a free house.’  A note is the promise to pay, and the mortgage is the security interest in the property.   It may be found that the mortgage itself is invalid and the collateral (the house) cannot be repossessed. But the note itself still exists.  The question is to whom are the payments made.
• It’s about the banks deliberately destroying notes and documents or shipping them off to India ‘for storage’ in order to obfuscate legal discovery.
•  It is about preserving property rights and the rule of law, and preventing another staggering lurch into the dark world without rule of law.
•  It will be about banks trying to evade the financial and criminal consequences of their mortgage ‘pump and dump’ onto the taxpayer. Again.

Written by heyercapital

October 13, 2010 at 7:38 am

Posted in Uncategorized

Foreclosure resolutions

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It’s extraordinarily difficult to summarize the mortgage/foreclosure/note transfers/securitization mess.   I point you to 4closurefraud.org and foreclosurehamlet.org blogs to get you started on the grassroots horror stories.

Karl Denninger’s Market Ticker is a good source of much of the background on the financial ramifications.  It’s unknowable at this point, but I understand that nearly all of these mortgage backed securities (MBS) have the legal structure that requires the mortgage notes to be delivered by a specified closing date to receive the special tax treatment of the interest.  Think of it as Noah’s Ark… if the mortgage note isn’t in the boat when the door closes, tough luck. If the special REMIC tax treatment is violated, it’s revocable to inception, and the revenuers will have a field day.

Portfolio managers might discover their mortgage backed portfolio doesn’t legally own the notes it thinks.  Portfolios (mutual funds, pension funds, etc.) may very well have to chase down the Wall Street bank that sold the MBS and sue for fraud and nonperformance.  Where will the investment banks get the capital to reimburse the damages, if found in judgment?    Personally, if I was a portfolio manager with a pile in what are supposed to be valid mortgage notes, I’d have someone seriously sampling the collateral.

A political take-away is be sure to chuckle and shake your head at the next candidate that says they want to get rid of the office of the Secretary of State.  The leading elected official to cry ‘foul’ in this mess is Ohio SecState Jennifer Brunner.  With her prompting, the Ohioh AG is suing GMAC – known now as Ally Bank — for fraud to the tune of $25,000 per false notarization on foreclosures.  Doing the math, of  one bank, in one state …

It was humbling to leaf through the foreclosure notices posted at the town hall this week.  These are my neighbors. If they pledged their property as collateral, and things didn’t work out, they get to suffer the consequences.  But property rights and contract rights are inviolable, and our justice system and our legislators must not permit shortcuts.

Written by heyercapital

October 7, 2010 at 6:04 pm

Posted in Uncategorized