Invalid Assignment defense

[jimbo367]

The borrower, actually, has no standing to object to the improper assignment.

.

The Court does agree?

If I knock out the P not having standing or capacity it accomplishes the same thing, no one can sue me.

[HHM]

I sympathize...I really do

But you are pinning your hopes on "minority" opinions and, in some cases, KNOWN rogue judges.

Do you recall he Dred Scott case...the Supreme court held that African Americans could never be citizens of the U.S. or of the States. You need to be wary of case law.

This is why you need an attorney, the issues you are confronting are very technical, and you are raising one of the weaker arguments...lack of standing due to an improper assignment.

[justbroke]

Additionally, the Promissory Note that you are looking at, may just be an "image" from the lender's computer records and does not reflect the actual endorsements that are on the Note! This is why most jurisdictions require the foreclosing entity to not only attach a copy of the note to the foreclosure complaint, but to also submit the actual Note to the court as evidence (proof) of ownership. However, that last part, presentment of the negotiable instrument -- the Note -- has been "overlooked" by many courts even though procedurally it should have been done.

So, I always say... go for it and ask them to "produce the Note" and see what happens. In most cases, they'll just show up to court with the ACTUAL WET INK promissory note that you signed. It will also be properly endorsed as well.

As for attacking the assignment... HHM already gave a very good preview of the UCC-9 -- with respect to endorsements -- and what would happen under UCC-3 with a possession of the negotiable instrument (the Note).

Don't get me wrong. I find this whole mortgage, promissory note, assignment, endorsement, MERS, securitization, and mortgage-backed securities simply fascinating. I think it's creating an entire boatload of caselaw and that, eventually, the Supreme court will need to look at this. However, for now, most courts work under the UCC (3 and 9) to deal with how this works since most States just summarily "copy" the UCC into their codified law regarding such financial instruments.

This is why you need an attorney, the issues you are confronting are very technical, and you are raising one of the weaker arguments...lack of standing due to an improper assignment.

Our foreclosure EXPERTS here in Florida will even say that a defeat of the assignment is only winning a single battle. The lender will return and will bring the Note or they will file a lost Note Affidavit and prove that they are entitled to enforce the terms of the Mortgage. It's surely just a game of oneupmanship and never intended to get a clear title. The key is that these are all delay tactics.

[jimbo367]

I'm following several cases that are using these defenses that are 6-18 moths ahead of mine, in this county along with any others in NY.

I have tracked several that followed this defense and they were settled on stips, I can only assume they did cash for keys or reduced the principlal or even did some form of mod.

I have 8 in 2011 that were dismissed in the D favor with prejudice.

We intend to take this case to the mat, in NY that could be 4-6 years.

Thanks for your thoughts, NY is different.

[justbroke]

Would you be willing to cite the 8 cases from NY? I do understand that NY is different since it's in the First Appellate Circuit and they tend to be more liberal than Florida (and the Eleventh Circuit). I agree that this is a very strong delay tactic, and in some very fact-specific cases, the cases were dismissed with prejudice. One of them which I did read, it was because of New York's "consolidation" mortgages where the Note may have been bifurcated.

The fact is, if you have an actual bifurcation of the Note from the Security Instrument (mortgage), then you in fact have an unsecured debt and the Judge should grant a dismissal, with prejudice, in any foreclosure action!

[HHM]

You need to find out (or let us know) "why" they were dismissed with prejudice?

Still, that is only 8 out of 2682 foreclosures in 2011.

[davetedge]

I'm not following NYSC decisions as closely but I did enjoy reading this one (HSBC v Sene): http://bit.ly/yt9Anp
The plaintiff's produced two contradictory assignments of the same note. Judge Kramer was not very happy. Didn't dismiss with prejudice, though.

[justbroke]

I'm not following NYSC decisions as closely but I did enjoy reading this one (HSBC v Sene): http://bit.ly/yt9Anp
The plaintiff's produced two contradictory assignments of the same note. Judge Kramer was not very happy. Didn't dismiss with prejudice, though.

Which was the proper thing to do. The assignment issue just questions standing and if there's a question of standing at the time the foreclosure lawsuit was initiated, then that's a cause for the Judge to dismiss without prejudice.

[davetedge]

I agree, "with prejudice" doesn't happen often and should be rare.

The more common problem in my neck of the woods is how many foreclosures are now stalled. In 2010, Chief Judge Lippman issued an order requiring attorneys take responsibility for their bank's paperwork and things ground to a halt. In the wake of the order, a lot of foreclosures have been dismissed (without prejudice), denied the ability to proceed, or the plaintiffs simply haven't pursued the next step.

The real puzzle is what comes next?

[justbroke]

Just look to Florida for what comes next! The banks have spent the last 9-12 months fixing their paperwork. There was one firm, who I won't mention, that was the poster-child for the robo-signing fraud. The banks all stopped foreclosures in Florida for many months. They have just settled with the DOJ and the Florida AJ, so let the foreclosures begin!

What I have noticed, is that they have issued a bunch of "corrective" assignments and at least Bank of America has set up various "Customer Service Centers" around the state as they begin to pick up the foreclosures again.

As I stated in the beginning... this is really a paperwork issue and eventually, someone will produce the right paper.

[jimbo367]

How many "corrective" frauds will happen?

Not all Courts allow a second bite at the apple.

[justbroke]

How many "corrective" frauds will happen?

Not all Courts allow a second bite at the apple.

IAh, but that's where you must be careful. What if the moving party (plaintiff bank) was NOT the true owner and holder of the Note? Does that make the real owner now out of luck because some other entity, that didn't own the Note and right to collect, tried to? Also, if it was simply the plaintiff's attorney that committed the fraud, should we visit that upon the plaintiff?

Yes, it gets complex. Most judges will say that simply dismissing with prejudice may be an absurd result -- in that the defendant (homeowner) gets a free house.

I'll go one further. Even if the case is dismissed with prejudice, it depends on what the other part of the Judges order reads. If a "foreclosure" case is simply dismissed with prejudice, of course it means that the foreclosure for that specific breach of the contract (Note) can no longer be brought before the court. But, how about a subsequent breach of the contract? Can that then initiate another acceleration of the mortgage?

The question is really in what's in the ruling. Simply having a case dismissed with prejudice does not equal a "free" house.

[HHM]

At the very least, hopefully this thread is giving you a dry run of the issues you are facing.

Most "pro se" debtors in this area lose, because it is, arguably, a complex area of law. When I mention UCC-3 to a would-be "produce the note" pro se defendant, they simply say "huh?" Heck, most foreclosure defense attorneys lose. Granted, there are bright spots, and some cases do settle. But to settle, you have to create a colorable risk for the other side. To do so, you must understand the playground in which you are playing (the UCC adopted in your state). And contrary to most peoples "assumptions" the UCC is very forgiving of the types of issues that are going on.

[newhope2011]

Think of a Note like a check.

Let's say I trimmed your trees and you paid me $1,000 by check. Instead of cashing that check, I endorse it (by signing my name on the back) and give it to my fertilizer supplier for payment of a debt. However, the suppliers A/P clerk is a thief and decides to steal the check (now note, I didn't use a restrictive endorsement, From HHM to Fert Supplier), I just signed it in blank. The Thief takes the check to a check cashing place, and cashes it. The check cashing place then deposits the check in their bank, and the check CLEARS.

Fert supplier then comes back to me and says I never paid? Who do I have recourse against. At best, only the thief. Everyone along the chain was able to "enforce" the check (legitimately, even those that came after the thief). The check still got cashed, but I am out $1000. That situation is not much different than what is happening in the mortgage arena. Hence, even if the transfer of the check from Theif to Check Cashing place is "improper", under UCC-3, it is a valid "negotiation" of the instrument, that is why Check Cashing place gets to "enforce" the check. (granted, I might have a negligence claim against the Fert Supplier, but as far as the check goes, unless I can track down the thief, I am toast).

That is why many of these so called "bogus" assignments don't amount to much a defense for borrower because all the foreclosing entity needs is "proof" of possession, it doesn't really matter how they got it. Granted, there is some contrary case law and other issues...but this why, the GREAT, VAST, Majority of these cases get tossed out and allow a foreclosure to proceed. The borrower, actually, has no standing to object to the improper assignment.

In short, in this area, (UCC-3), possession really is 9/10th's the law.

OK, If this is the case, then why are we in the foreclosure mess in the first place? All the bank has to do is to show up in court with the note, the real note, and what you are saying is ballgame over. I even read the new Feb 18th 2012 updates to the UCC in NY, and it is confusing as heck.
From what I understand, in NY, if I lend you 25,000 and you give my a lien to your house, unless I record it, it is not enforecable for title. Maybe I'm wrong, but that's the information I have.

[HHM]

What foreclosure mess...the foreclosure mess is a result of "so many" foreclosures, more than the system can handle.

Don't confuse the issues. The federal government and federal reserve are involved because of bank liquidity issues. The state's attorney generals are involved because the endorsement/assignments cheated various counties out of recording fees. Robo signing is more of a side show related to the issue of "integrity" of the pleadings filed in foreclosure cases, but that is really an issue between foreclosure law firms and the court. But the fundamental issue of whether a lien/note can be "enforced" against a debtor in default has not changed, the answer is, YES it can, and whoever can prove to the satisfaction of the court (in judicial foreclosure states), can do it. In non-judicial foreclosure states, it is even easier.

The lien is recorded. IN EVERY case, there is a mortgage recorded. The issue is what happens when the underlying note gets transferred. The UCC actually contemplates this issue, but the breakdown is that some of the rules weren't followed. The problem most courts have is that there is no real remedy for the borrower because at the end of the day, a "defaulted" borrower is not harmed by a foreclosure. The only argument that has been presented is "duplicitous" actions against the borrower, but so far, that hasn't actually materialized. I have yet to hear of someone being foreclosed upon twice by different lenders after the first foreclosing party actually foreclosed.