By James Adams Johnson
Bankruptcy & Foreclosure Learn About Bankruptcy & Foreclosure With A Local Attorney!
Millions of homeowners are facing foreclosure, in which the vast majority of actions are completely illegal.
First, you have to ask whether your mortgage is privately held OR if it has been securitized, meaning, sold on Wall Street. Have you received notices that your mortgage has been "sold" or "transferred" from lender to lender? If so, your mortgage is probably securitized and oh, boy, do you need to know some things...
When notes are "securitized" it means that the notes are converted into stocks. Investors buy the stocks (Mortgage backed, or mortgage "pass through" securities or REMIC'S) from a Trust. The "lender" bank gets paid in full for the amount "lent" to you in your mortgage or deed of trust, usually at closing. Your note is a documented and legally binding promise to pay, but in effect is an ASSET (negotiable instrument of value) that YOU OWN. You give this promise to the bank in return for the bank giving you CASH to buy the house.
Your promise to pay, or PROMISSORY NOTE is what is sold to an Investment Trust through "securitization;" however, the note is YOUR PROPERTY, not the bank's. This is where most homeowners don't realize! When your note is sold, the bank is FULLY repaid for the money they "lent" you, which is why your collecting bank usually calls themselves the "servicer" of your account and not the mortgagee. At this point, there IS NO MORE obligation to the lending bank and you are actually legally entitled to get your note back. The bank also does not have any further real financial interest or stake in the property or legal right to demand any payment from you.
The Trust may have purchased your promissory note from the bank, but typically it maintains no true or real collateralized assets. An investment trust exists to sell stock or securities. A note can either be held as a separate asset OR it is converted into stock certificate shares and subsequently sold, it CANNOT EXIST AS BOTH AT THE SAME TIME. Once converted and sold, it is IMPOSSIBLE for that note to be whole again. Once converted to stock (or "securitized"), by the very act and definition of "conversion," the validity and enforceability of the note is destroyed and it ceases to be a secured asset or negotiable instrument tied to ANY collateral or debt obligation. In essence, the note is destroyed and thereby, under multiple rulings, IS NULLIFIED (e.g. - District of Columbia v Cornell, 130 US 655, 32 L ed 1041, 9 S Ct 694; State Street Trust Co. v Muskogee Electric Traction Co. (CA10 Okla) 204 F2d 920; Darland v Taylor, 52 Iowa 503, 3 NW 510) and the underlying evidence and legality of the debt obligation secured by the note is VOIDED, whether or not the obligation has been paid.
In many instances, Trusts photocopy, then destroy the original wet signed note to eliminate any liability in causing infractions to the PSA's, while relying upon ignorance of the law and the plausibility of keeping a "copy" as proof of the asset and debt to attempt to enforce payments (but remember, if the Trust submits a "copy" in court or to you, it is still admitting that it is violating the UCC and committing securities fraud to their investors. (Remember, a note can EITHER be an asset held BY the trust, OR a security OF the trust...it can't be both at the same time).
The trust must pay investors performance based upon the performance of the securitized mortgage portfolio, meaning that when homeowners make payments in what is represented as principle and interest on a home loan, they are actually paying income and dividends to the Trust, and consequently, to the investor pool through the Trust. If homeowners don't pay, the Trust has no true legal recourse against the homeowner and must continue to pay the investors out of its own accounts. The Trust has no true legal claim to any assets, because THERE IS NO COLLATORAL or ASSET. A mortgage-backed security IS EXACTLY THAT...MBS, MPTS, REMIC's or stocks are backed (or secured) through the PAYMENTS made by homeowners...NOT the property of homeowners. This is also why banks have such a high credit qualifier when you apply for a mortgage. The higher your credit and income is, the higher chance there is that you will pay your mortgage on time...the trust will get paid every month...and the investors will get paid. The worse your credit, the higher rate you pay because there's a higher risk you won't pay...and the Trust won't have the money to pay the investors.
In 2004-2008 the overwhelming greed of Wall Street demanded banks produce more and more product to sell (in other words, mortgage loans to convert more notes into stocks to sell). As a result, lenders gave huge amounts of money to anyone with a heartbeat, created time-bombs like "Interest only" loans, committed underwriting fraud and over-inflated appraisals just to make more and bigger notes to convert and sell. And remember, because there's no real asset backing those investments, what happened when borrowers couldn't afford to pay? That's right, economic-global---collapse.
Without the bank trusts having real assets to recoup, the blame of course, gets shifted away from who should truly be held responsible...to you, the homeowner...millions of homeowners...homeowners who don't realize that the notes banks are using to foreclose on the homes were voided and nullified by the banks themselves years before. This is called foreclosure fraud.
Foreclosure fraud happens when a bank or servicer initiates action against a property that they have ZERO financial interest in. Once a note is securitized, the bank forfeits any and all right to demand payment or foreclose. Like anything else, ignorance can be expensive...and painful.
If you should have any questions, or need help with an underwater mortgage or foreclosure situation, you can reach Mr. James Adams-Johnson at (888) 701-9740 or at http://www.sellwithnoequity.net.
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