There's something to consider in here....
If a loan is assigned to different tranches and/or different trusts, with each tranche or trust having its own series of credit enhancements and insurances, this means the possibility of multiple levels of insurance for the same loan, which goes to prove what we have been arguing for years: that upon securitization, the mortgage loans were insured with multiple layers of insurance so that when the loan went into default, those in the placement chain could reap untold profits by having the same risk paid over and over and over again through multiple claims or reserves. Anyone who read through the SEC v. Goldman Sachs lawsuit knows this.
As such, any foreclosure defense should now hammer, hard, on ALL available credit enhancements, insurances, tranche assignments, and all agreements relating thereto. We will make a predition here: that very soon, there are going to be a series of cases where it is revealed, in discovery, that mortgage loans were paid 2, 3, 4, or more times on default and that the foreclosing party is simply trying to get paid a 5th or more time by stealing the borrower’s house under false pretenses and with material omissions and improper objections as to discovery related to setoffs (which objections we predict will be overruled once the judiciary is educated as to these matters). Once that happens, we see a literal tsunami of fraud upon the court claims and damage claims against the current foreclosure perpetrators.
Note that this comes from a real legal gent.
There is an interesting argument here relating to standing, and it goes to the same issue that one runs into in the case where the note is sitting at the originator and was never assigned.
The trust (and it's agents, including MERS) cannot foreclose as they do not have possession of the security instrument. You have to have something to be able to enforce that thing, in this case, the promissory note.
But the bank that originated the loan can't foreclose either, because it was paid in full.
As such it has no economic harm due to lack of payment, and therefore no equitable or legal standing to sue.
This is the basic problem with all the "screwups" (which I argue were intentional for the base purpose of attempting to hide the bad loans that were shoved into the pipeline) - you wind up with a guy who has the paper but no standing as he was paid, and the other guy has paid money but didn't get anything for it in return and due to the legal strictures on REMICs he can't take the transfer now.
Thus my suggested remedy: force the bad paper back up the chain until it lands on the guy who has and/or underwrote the note. Since many of the originators were "Joe's Bait And Mortgage" and are long out of business, this means the chain will likely stop with the securitizer. That's fine - he then has both the note and the economic interest (since he is forced to repurchase at face value) and thus has legal standing to enforce.
If, in point of fact, what FDN has uncovered using their newly-acquired software proves up, I believe Jeff is right - there is a literal tsunami of litigation that is now starting to curl over, and among the claims will likely be those for unjust enrichment, fraud upon the court (due to intentional concealment of material facts in the original foreclosure filings) and possibly racketeering allegations up and down the line.
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