"The loan servicers bringing most of the foreclosure actions in the country don't own the mortgages and have no standing to take away a person's home," said the lawyer, April Charney, who has stopped scores of foreclosure actions in Jacksonville, Fla., where she works as a Legal Aid lawyer. In essence, Charney has forced scores of plaintiffs in foreclosure actions in Jacksonville to admit they don't have legal ownership of the securitized mortgage they are trying to foreclose upon - stopping the home takeover battle in its tracks. The strategy has spread virally around the country and now thousands of foreclosure lawsuits are sitting idly - in legal limbo. "I have one case from 2004 where the bank has not returned to court and where my client now has deposited more money into a trust account than the house is worth," Charney noted. Charney has held seminars in Ohio, Oregon, South Carolina and throughout Florida to educate lawyers on how to implement the courtroom defense. At least one Brooklyn judge, Arthur M. Schack, is already using the strategy himself in the courtroom. He told a reporter recently that he denies more foreclosures than he approves. Last summer, 13 of the 14 foreclosure actions that came before him were denied. "I want to see the servicing agent's power of attorney, I want to see all the paperwork before I approve it," he said. "If the paperwork is garbage, I deny it. If you're going to take away someone's home, it should be done properly." (See article at left.) The legal issue is that banks turn the mortgages into bonds, which are put into trusts, like collateralized debt obligations, or CDOs. The banks "sells" the CDOs the right to collect the revenue stream but, according to Charney, not the equity right to the property. Charney notes that under the current set-up, the mortgage default hurts everyone - like a neighbor who could be a state worked whose pension fund money is invested with a hedge fund which has invested in a mortgage CDO. "So far I've drafted about 1,500 lawyers into my army," Charney said in a telephone interview last week. She is scheduled to make hold her first New York seminar next month. "Of course, I'm looking to educate them and have them use the same technique here," she said. That should be sweet music to homeowners here who are facing a foreclosure action. Charney said Washington has the resources to allow every mortgage holder the right to modify their mortgage - something that would definitely mute the criticism that the Obama plan rewards failure by allowing those who obtained mortgages they couldn't afford to cut a deal for a lower monthly payment. "Look, the same problem that banks are having with securitized mortgages is going to spread to defaults with car loans, credit card accounts and student loans - they are all securitized and the banks and loan servicers starting legal actions to collect on those defaulting loans will face the same issue proving ownership," said Charney. As for Obama's $275 million mortgage plan, Charney said she has a better idea: "The US government has to take over every one of these securitized loans and open up the mortgage modification plan to every American, that's the only way we are going to get past this horrible thing," said Charney, who has become, alongside a handful of other consumer advocate legal eagles, quite a cult personality for her pioneering courtroom foreclosure defense strategy. http://www.nypost.com/seven/02222009/business/the_loan_ranger_156356.htm
I thought this was big news. Ya get it? Banks can't foreclose on you, they have legal rights to nothing. The banks have non secured loans on your house.
I think this is just a delay tactic. Someone somewhere must have the paperwork, and they might go looking for it when their notes aren't paid.
That's a little more complex than incomplete paperwork. A bank gave a loan secured on a home. The loan was sold to an investor. Now, investor owns the right to demand repayment on the loan but the home as security stays with the bank. So, the investor cannot demand repossession as they have no rights on the home as security for the mortgage; while the bank (surprise! surprise!) has the home as security but cannot demand repossession because the home owner doesn't owe the bank any money (the loan was sold to the investor). Another factor is the paperwork associated with repossession costs $50,000 - $70,000. So, few investors will want to have it done twice unless they are sure the second set of paperwork is "bulletproof".
Frequently banks service loans they have sold. If for some reason the banks cannot foreclose because they do not own the mortgage, you can bet that the owners of the mortgage will get whatever agreement they need to allow the banks to act as their agent. If not, those mortgages will be sold back to the bank. However, I suspect this is non-starter. It's probably already in the agreeements. Would you believe some shyster who comes around and says "Stop paying your mortgage - the banks cannot foreclose?"
^^^ In many places, yes. Next to come along will be some shyster who says stop paying your credit cards. Once things reach a critical mass, it will become unstoppable. This is why financials are all going to 0.
you can bet that the owners of the mortgage will get whatever agreement they need to allow the banks to act as their agent -------------- In the rest of the article, a judge noted that as a legal conflict of interest. Although it is not stated in the article, the mortgage may have been sliced and diced several times, all the kings horses and all the kings men can't put the mortgage back together again.