Imagine pulling up to your driveway with your kids laughing in the backseat, having come home from a baseball game, to see a foreclosure notice tacked on your front door. Maybe all of your belongings have been tossed out onto the street.
You are in shock. It doesn’t make sense. There must be a mistake. Why is the bank taking your house? Your home was your security, your retirement. It was the American dream. You had played by the rules. It’s where your children have been growing up. Their smiling faces hang in the beautifully framed photographs on your hallway walls and are carefully placed on your fireplace mantle.
Now, incredibly, suddenly, without warning, your entire world has been ripped apart, shattered.
Despite having never missed a mortgage payment and even paying early, the bank is coming to take away your home. They are coming to throw you out onto the street. Panic, disbelief—a tidal wave of emotions nearly knock you over as your heart beats faster and faster. The walls start closing in around you. You cannot breathe. The clock is ticking. Why is the bank coming to take away your house? You did everything you were told to do. Where will your children sleep in a few weeks from now?
Think this can’t be you? Oh no, think again. This nightmare has been occurring across the country for years. As the Wall Street Journal’s Alan Zibel reported, bank files show that more foreclosure errors are happening than regulators have reported to the public.
This fate could be awaiting millions of more Americans because of a bankruptcy that is happening right now in the Southern District of New York U.S. Bankruptcy Court where 51 residential mortgage companies have simultaneously gone bankrupt.
Do you even know about it? You should know. Is your house “owned” by any of these bankrupt companies? Does GMAC, Homecoming Financial, Residential Asset Loan Inc. (RALI) or Fannie or Freddie ring a bell? If so, you better pay close attention because your “homeownership” fate could lie in the hands of one man.
With a stroke of his pen and a bankruptcy court order any chance of obtaining the deed to your home could be gone forever. If you find out later that you have a problem with the most important document that affects your legal, financial and property rights—your chain of title, sorry. Tough luck. Your legal options are gone.
Did you know that the deal is almost sealed? Once the bankruptcy is completed, legal eyes will never get the chance to look at the documents of millions of American homeowners again. It’s called bankruptcy 101.
And, even better for the big banks, the money lenders, and the heroes of this great caper—currently starring Warren Buffett’s Berkshire Hathaway and Ocwen, is that it might take “homeowners” years, even decades, to notice that they will never own their homes.
Imagine paying off your mortgage or trying to sell your home only to discover that there are more “creditors” with claims on your property and you can’t get a clean chain of title.
They call that “cloudy.” Buffett and Ocwen will wildly benefit in this New York bankruptcy according to the second amended Joint Chapter 11 Plan by purchasing over $400 billion worth of mortgages and RMBS trusts for less than $5 billion.
On the flip side, you might not have to wait very long to feel like your house was hit by a tornado. The bank could come for your house tomorrow. Are you willing to roll the dice and hope that your home is not involved in this bankruptcy?
How about your parent’s house, your adult kids, your second cousin—twice removed, or your best friend’s house? Maybe it’s one of your family members who might lose their house. This could be like the Kevin Bacon movie, Six Degrees of Separation. Remember that flick? If it is not your house, it could be your neighbor’s house or the guy up the street. And you know how your house price depends on the houses around you, right? Are you still going to roll the dice?
The biggest bankruptcy in history, bigger than General Motors, to the tune of over $400 billion according to court records that affects over six million Americans is happening right now.
And if you don’t know what’s going on in this New York bankruptcy courtroom that’s just fine, as the latest bankruptcy deal is sealed, any mortgage fraud that occurred in this case and contributed to the 2008 economic crisis will never be revealed.
If you bought, refinanced, or have taken out a second mortgage on your house in approximately the last 20 years, you might want to check your mortgage documents.
As the New York Times Elizabeth Lynch reported, despite the federal government and 49 state attorneys generals $25 billion deal they reached with America’s five largest mortgage servicers — Bank of America, JPMorgan, Chase, Wells Fargo, Citibank and Ally Financial (formerly GMAC-now bankrupt), promising to help save homeowners from “unnecessary foreclosure and to settle claims of abuses, including bungled loan modifications and the wrongful evictions of borrowers, who were either current on their payments or making reduced monthly payments,” the problems are still not fixed. Innocent homeowners continue to be hurt.
Why are they still getting hurt? Have you checked the fine print on your mortgage documents? Are you sure your chain of title is intact?
According to a 140 year old U.S. Supreme Court ruling, Carpenter v. Longan, “The note and mortgage are inseparable.” “The former as essential, the latter as an incident.” “An assignment of the note carries the mortgage with it, while assignment of the latter alone is a nullity.”
A nullity is an act or a thing that is legally void. It has no importance or worth.
That Supreme Court ruling was recently upheld in Jane McCarthy v. Bank of America, NA, BAC Home Loans Servicing, L.P. and Federal Home Loan Mortgage Corporation.
Wait, there is more. Is your house with Mortgage Electronic Registration Systems, Inc. (MERS)? If so, you better check and be quick about it. MERS might have electronically separated your chain of title and broken it. If that’s the case, you could have a problem.
Here’s why. In McCarthy v. Bank of America, Judge McBryde ruled that MERS has “no rights to transfer promissory notes in the State of Texas and that neither organization is and cannot be a beneficiary or a nominee of any mortgages.”
What if your lender—one of the 51 bankrupt residential mortgage companies in this New York bankruptcy was with MERS?
Mortgage fraud affects the entire U.S. economy and beyond. It is blind to political parties, religious beliefs, or non-beliefs and skin color. Whether you are a famous Hollywood celebrity, any of my media colleagues from the presidential campaign trails, the United Nations, and other stories and investigations or Joe America; if you live somewhere, mortgage fraud affects you, your families and your friends.
Get your mortgage documents together, and go through the 29 steps in the checklist to see whether or not your chain of title and your home is secure. The evidence does not lie.
Preliminary Mortgage checklist: 29 steps to check your mortgage. This is not an endorsement of any individual’s website or their legal defense fund.
For a complete forensics analysis of your chain of title — the horizontal daisy chain of the documents, there are several professionals you can contact. One to consider is Mortgage Investigative & Research Services or McDonnell Property Analytics (Note McDonnell’s role in a landmark win in the article below).
Update: Be careful when people ask you for money for a legal defense fund (or anything for that matter). Do you know if your money will go where they claim it will go? I do not sanction anyone’s legal defense fund or signing petitions.
At the end of this article: Leaked Federal Reserve Doc: Go from paper homeowner instruments to electronic. Foreclosure fraud? What fraud? I list several free resources as well a professional services that homeowners who are victims of the banks can look in to.
There are scores of homeowners, who have been fighting the banks, and are generous about providing free information. Another excellent place to look is at court cases. These are open source and will not cost you a dime. Do your own research. There are con jobs out who just want to pick your pocket.
Update December 2015:
It’s heartening to see some individuals in Hollywood step in and use their influential and far reaching platforms to shine a bright light on the still unaccounted for fraud that led to the 2008-2009 financial collapse that continues to affect homeowners around the country. Having gotten to know some of the homeowner plaintiff’s and their legal battles after I started covering this topic, I for one am looking forward to seeing The Big Short and seeing some long overdue justice.
Thanks to all involved, including but not limited to, Michael Lewis, Christian Bale, Brad Pitt, Steve Carell, Ryan Gosling and director Adam McKay. There are pro se Plaintiff’s in courtrooms (including at the U.S. Supreme Court) who continue to seek justice from the bankers for not just for themselves, but for all homeowners.
Update April 21,2016: Why Haven’t Bankers Been Punished? Just Read These Insider SEC Emails