Demanding Validation And Disputing One’s Own 2008 Era DebtJanuary 10, 2012
In September 2009, a notice of default was filed on the $671,995 first mortgage employed to purchase 425 First Street #1307 for $830,000 in February 2008. At the time of the notice, the buyer of the 819 square foot condo was already $25,338 past due on his debt.
Having signed a promissory note for the $671,995 first mortgage back in 2008, as well as for an $83,910 second, the buyer of the One Rincon Hill one-bedroom subsequently decided that “fraudulent and deceptive” banking practices were to blame for his mortgage woes. And in February 2010, the buyer filed a 190 point DEMAND for validation of his debt, without which he would have “no choice but to dispute the validity [of the bank’s] lawful ownership, funding, entitlement right, and the current debt [they] allege [he owes].”
As best we can tell, and including disputed fees, the past due amount is now over $100,000 on the first mortgage alone without a currently scheduled auction.
Comments from Plugged-In Readers
This is awesome!
It seems to be pointless, but its pretty awesome nonetheless. Who sat there long enough to write up these 190 points? Is the guy in jail or something? Who even has time for this??
The “fraudulent and deceptive” banking practices could be construed as flooding the market with liar and NINJA loans such that “honest” buyer/borrowers are forced to compete with the fradulently financed money, in a pricing bubble caused by fradulently financed loans.
However, I think this suit is more likely about the electronic chain of custody of the note, said electronic chain having completely disregarded several centuries of black-letter law requiring wet-ink signatures for any transfer of property or lien on that property. This stuff actually goes back to the Domesday book. Foreclosing banks “holding” these notes have been back-dating the wet-ink signature trail with comically obvious fakery. Look up “Lender Processing Services” for some horror stories.
I’m not claiming the borrower here is pure as the driven snow, just that the banks issuing these crappy loans cut costs on the chain of custody of the notes, and this should bite them on the ass. Forging documents post-facto should not and cannot be permitted, or any bank can take any property by paying off a robosigning law firm to fake the documents. This has happened to some people who had paid off their home in full.
Who sat there long enough to write up these 190 points?…Who even has time for this?
Someone who is retired, unemployed or underemployed and has access to a law library. He mentions that he “met with counsel”, but the filing is pro per, so if you don’t value your own time very highly you could pull off this entire thing for less than $150 or so.
“However, I think this suit is more likely about the electronic chain of custody of the note,”
Consider the timeline.
How is stopping making mortgage payments in ’09 just around one year after you bought the place related to some potential future “fraud” with the electronic chain of custody?
In theory the bank could be making an error and this person has actually been paying their mortgage (or have no mortgage at all), but in that case wouldn’t you think they’d just simply provide copies of bank statements or canceled checks showing that payments had been made? (or just state that they never signed any mortgage docs with the bank)
It’s not a legal complaint, just some rant that the guy appears to have filed with the Recorder (or tried to file, no evidence on the doc that it was accepted). Way out of my area, but I suspect this has zero legal effect.
But it is amusing, and scary, to read the rantings and “demands” of a sanctimonious nutjob.
Having scanned it, it looks like a “show me the note” response to foreclosure, along with a laundry list (checklist?) of discovery demands for the usual fee and penalty shenanigans that go on. It is also plausible that the loan originator of their own initiative faked the borrower’s income data on the loan application.
Wonder where he got the list?
tc_sf, technicalities can go both ways. The silly naive child in me thinks that the same real estate and lending laws that permit usurious penalties for being a day late on a payment should also prevent banks from taking properties when they didn’t follow the law.
A.T., it looks to me like he is demanding documentation from the loan originator, the loan servicer, the foreclosing law firm, and MERS, which is the industry’s shady substitute for the two centuries old American legally required practice of recording property transfers and liens with the appropriate county recorder’s office.
I assume this document is part of contesting a foreclosure proceeding. I am not a lawyer, just an interested layman who’d like to see some rule of law return to this country.
A.T., I agree that it’s not a legal complaint, but when and if the holder of the first note tries to foreclose, this thing’ll be a template for the suit to stop the foreclosure. At that time, this sanctimonious nutjob can allege that Bank of America doesn’t own the note and thus can’t legally foreclose or at least four other causes of action that can accomplish the same thing or delay the foreclosure indefinitely.
I’m not an attorney, but I’ve read about this tactic working in other states. Just going with what comes to mind first because I read it recently in the January Harper’s, Stop payment! A homeowners’ revolt against the banks, by Christopher Ketcham.
Should have written “a template for the suit” and a playbook for the first several weeks of discovery.
But you’re right that the bank will ignore this as the rantings a sanctimonious nutjob. Right up until they get served with their copy of the complaint.
Occupy malcontents take note; now THAT is how you occupy something.
Seriously, I guess it’s worth a shot….
Just for kicks, I hope the lender portfolioed his deal.
The buyer stopped paying the first year after purchase and then files a 190 point Demand.
Yes, you are right– it’s definitely the bank’s fault. Oh brother . . .
People betting on lenders having lost the appropriate loan documentation due to securitization may be in for a rude awakening. It happened to the third largest mortgage insurer in the country, PMI, which, for a while, calculated their loss reserves based on the assumption that a significant portion of claims from lenders could be denied due to lack of documentation. Guess what, it took a while but eventually the banks got their act together and provided documentation for pretty much every claim including ones that had previously been denied. PMI filed for bankruptcy in November.
I’ve posted it in another thread, but here is a quote from their last quarterly report:
“The Company decreased its expected future claim denials in the second quarter as a result of significant recent increases in the frequency with which servicers have produced documents for previously denied claims.”
Bottom line: If it makes economic sense for a bank to dig up the needed documentation for a loan, it’s likely that it will do so.
anonanon, thanks for posting that, I wasn’t aware that PMI went belly-up.
But, sure. Digging up the needed documentation for a loan, even if it wasn’t available, was what the robosigning frauds were perpetrated to address. PMI folded because they could go declare bankruptcy, I think it’s pretty obvious that this individual (or the California State Attorney General, for that matter) isn’t going to be steamrolled so easily. He’s been in the place for close to a year now since the above document was notorized, and as the editor says above, no foreclosure auction’s been scheduled.
Even if no fraud was going on, the economies of scale for dealing with another company involved with thousands of mortgages is a lot different than dealing with an individual mortgage against a single property. If I had to bet, I’d bet that B of A’ll try to settle this. But I’d love to see it go to trial (actually, I don’t think this guy really has the financial wherewithal to sustain any realistic civil litigation that long) or be a fly on the wall during the depositions.
More shennanagins: http://www.nationalrepublicregistry.com/public/CA.2010.04.06.000001.pdf
I’m a lawyer who represents lenders. This is a form Qualified Written Request (“QWR”) under RESPA. This guy did not draft this himself; he either got it off the internet or got it from one of those places that promises to get loan mods. Although some of you seem to be assuming that, due to the nature of the requests, the borrower has some goods here, nobody bothers to tailor them to their particular situation by eliminating inappplicable requests. It’s easier for them to just send out the boilerplate form.
Also, under RESPA, the borrower is supposed to identify the specific wrongdoing he or she suspects. This one, as is the case 95% of the time, does not do that, but instead asserts generalities such as fraud in the loan closing, accounting irregularities, etc. If this were a legitimate QWR where the borrower actually had found something wrong, he would have every reason to describe the specific problems.
The guy has 180K of his own money in the property. The way you get as much of that $180K back out is to stall the bank, which is what a lot of people are doing, and take as much of the money out in free rent. 3 years at $36,000 and he’ll be more than halfway there.
The bank doesn’t really want to book the loss they’ll have to take when they sell it (they can borrow the money from the loan at 0% so what do they care), so the banks never fight too hard when the owner stalls.
The takeaway here is that many of the people who would have been foreclosed in Sacramento in 2009 are still in their homes in SF in 2012. Will this be the year we see the Sacramento style foreclosures? Who knows. Someday, yes.
@tipster: banks foreclose all the time. A property I was trying to buy in the East Bay was foreclosed in December even after the bank had accepted my much higher offer. “they don’t want to take the loss” is total BS — they “take the loss” all the time and as far as I can tell are totally unpredictable in how they do so.
The guy has 180K of his own money in the property.
I’m not sure whose money that is. He owns two units in other buildings around the City. The one at 201 Harrison he (jointly) purchased in 2001 and subsequently refied in 2002, 2004 (twice) and 2006 (twice). It should be noted he is current on the other units.
What ever happened to that guy? Last i heard, he was trying to pull similar scams like the one in this loltastic PDF.
Maybe they’re distant cousins in native Uzbekistan?
The banksters deserve to be screwed with….I like this guy!!!
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