Invalid Assignment defense

[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]

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.

[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.

[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]

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.

[jimbo367]

The problem is, notes (the right to receive payment), don't "need" to be "assigned" as such. Notes are "negotiable instruments" (like checks). As JB points out, they just need to be endorsed (and can be endorsed in blank) and the person enforcing the note need only have "proof" of "possession." That is essentially what the 10th circuit appeals was saying in Miller v. Deutsche Bank.

Also, as for the "free house" happening more than I think, No, I think it happens about as often as I think....very very very rarely

Assuming arguendo, I'm looking at the note, there is no endorsement in blank, there are two assignments one in 2008 from te originator (who also is out of biz) to option one, went out of biz in that same year now this year from option one who doesn't exist to Wells fargo as trustee for a trust that closed all loans out 7 years ago, and doesn't allow mortgages in default.

Please explain how your argument relates to those facts,

thanks

[jimbo367]

jimbo, this argument has not flown in many courts. It is absolutely true that the assignment is really an argument as to who owns the Promissory Note. However, if you walk into the court with a properly indorsed note, then the assignment is MOOT as the security is incidental to the debt. That is true no matter what court you walk into.

First the note is part of the mortgage, if it was assigned that assignment dictates who owns the mortgage and note, agree?

Not sure what exactly you mean by properly endorsed note?

I'm only concerned with NY law, and those court have thrown out these pretenter lenders.

Now, some courts will even allow a substitute of plaintiff in the cases where it was started by the servicer, but in the name of the Mortgagee. Usually, even in the case of a dismissal, the dismissal is without prejudice and you're not going to get a quiet title action from that.

How does that happen a new plaintiff needs standing where did it get it from?

[HHM]

The problem is, notes (the right to receive payment), don't "need" to be "assigned" as such. Notes are "negotiable instruments" (like checks). As JB points out, they just need to be endorsed (and can be endorsed in blank) and the person enforcing the note need only have "proof" of "possession." That is essentially what the 10th circuit appeals was saying in Miller v. Deutsche Bank.

Also, as for the "free house" happening more than I think, No, I think it happens about as often as I think....very very very rarely

[justbroke]

jimbo, this argument has not flown in many courts. It is absolutely true that the assignment is really an argument as to who owns the Promissory Note. However, if you walk into the court with a properly indorsed note, then the assignment is MOOT as the security is incidental to the debt. That is true no matter what court you walk into.

Now, some courts will even allow a substitute of plaintiff in the cases where it was started by the servicer, but in the name of the Mortgagee. Usually, even in the case of a dismissal, the dismissal is without prejudice and you're not going to get a quiet title action from that.

[jimbo367]

So, the courts are basically saying, the improper assignment is a fight for the parties involved in the assignment, so long as the party foreclosing has some colorable claim to be able to foreclose (basically, can present "some" evidence that they have the right to do so) they can foreclose. The borrower, you, don't have the right to raise the assignment issue because you are not harmed by the "assignment". .

I disagree, if the plaintiff has a bogus or otherwise invalid assignment to them, they lack capacity and or standing to sue.

The D or borrower is then being harmed, or am I not understanding your comment.

In NY if the case is dismissed on these grounds, you usually move for quit title thereafter, = free house, yes that does happen more often than you think.

Especially if it is in a securitised trust.

The person did say if it was a trust or not.

[davetedge]

I'm still waiting for the law firm to file the MSJ.
I ended the conference meetings last year (they kept pushing for a short sale) and have been waiting for the next step, the MSJ, ever since. According to the clerk, the whole process is on hold until they file.

[newhope2011]

Right, I guess that notion 'works for both parties' is probably better stated as a new agreement we can deal with going forward!

When you say you have been waiting for the MSJ, has the Banks firm submitted the papers for one, and did you oppose it?

HHM is right about the part and I quote " It sounds like you need to evaluate your apparent "emotional" attachment to the house (the idea of home). Don't confuse the "thing" (the house), with the idea of "home". unquote and I need to remember that. Thanks for your response!

[davetedge]

newhope, I'm concerned with your notion of "an agreement that works for both parties." I don't think that exists in these situations. The bank servicer makes more money off foreclosure than it ever will from a modification, and is calling the shot. The true owner of the debt (which is kind of murky but should be the trust and its investors) is not exercising its power and simply doesn't care to do so. They'd rather sue the bank for putbacks. If the bank doesn't get the MSJ, then I think you'll be able to negotiate a principal reduction with them pretty quickly.

When I was at my foreclosure conference a while back, the clerk was joking about Judge Schack going off the reservation and making a name for himself, so he definitely has been considered out there with his rulings. That being said, several other judges have taken an interest in various defenses including robosiging, conflict of interest by signers, late assignment, lack of good faith with modifications.

Judges Markey, Friedman, Ecker, Adams, Greenwood, Spinner, Aliotta are all making rulings in favor of these defenses.

Mind you, I'm only seeing published decisions that support the notion of foreclosure fraud and I'm not seeing the thousands that wind up with the order of reference and ultimately foreclose. I did get the sense that many of the NY judges look at the totality of your circumstance. That is, if you've made all the good faith efforts to do the right thing to keep the home, then I think being in NY gives you a fighting chance.

I don't have high expectations to keep my home at all but at the same time, I've been waiting for the MSJ for a year now and my understanding is it'll be 3 years from that till when I'm forced out. My bank's law firm is one that had a similar case dismissed with prejudice and it hasn't been overturned on appeal (yet). For now, they might be gun shy.

[HHM]

Don't confuse my skepticism with my personal beliefs on the matter. If it were me, I would invalidate every foreclosure action currently pending.

But, as a realist, and because I follow this problem, most jurisdictions and judges are not, for one reason or another, getting themselves bogged down on these issues. And much of the case law on the foreclosure issues is decidedly anti debtor. That's all I am saying. There are bright lights to be sure (Judge Schack, etc), but in this context, I don't bet on the less than 1%.

[newhope2011]

No he is not. And he didn't get overturned on this one. Facts are facts. Like I said, I'm concerned about your thinking on your bet. PM me and I'll send you a copy of the evidence, as I think you might agree. It's a real mess!
And thanks for your responses. You are a great asset here and you really help people, including me!!