THE SHOCKWAVES OF THE IBANEZ-LaRACE CASE CREATE NATIONAL RIPPLE EFFECT; BANKS HAVE A REASON TO BE NERVOUS; E&O CARRIERS WATCH OUT!
By Dave Krieger
This opinion is based on legal research only and cannot be construed as legal advice!
IT’S HOMEOWNER-PLAINTIFF QUIET TITLE ACTION IN REVERSE
The point being here … if you didn’t learn anything about quieting titles in the book “Clouded Titles”, it would be best suited perhaps to espouse the deeds of U.S. Bank and Wells Fargo as they attempted to do what I call “a quiet title action in reverse”.
At first glance, this case involves procedural and agency relationship errors. For those of you in the Commonwealth of Massachusetts, you’ll note from the slip order issued by the Massachusetts Supreme Court that the actions preceding their ruling were brought “in the Land Court under G.L. c. 240 § 6, which authorizes actions to quiet or establish the title to land situated in the commonwealth or to remove a cloud from the title thereto.”
The analysis by the High Court points to the law firms experienced with studying quiet title actions, yet the attorneys missed the boat on proving agency, which is a fundamental element of quiet title actions. Proving standing to foreclose on a mortgage or deed of trust is one thing; proving how you got the note to enforce on the other hand is part of what makes up the chain of title. When those assignments are not recorded, because they happen to be in the MERS system, or simply sold willy-nilly several times over without perfected security interests being recorded in the land records in the county where the property lies, you’ve got a problem. In these cases, the banks created their own problems without them even knowing it.
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H.R. 6460 IS A START; BUT ON THE RIGHT TRACK?
By Dave Krieger
When you first glance at page 1 of this House Bill, initiated by Ohio Congresswoman Marcy Kaptor, it’s almost as if you’d think, “Yes, there is a God!”
However, the “Transparency and Security in Mortgage Registration Act”, while nailing MERS in regards to prohibiting Fannie Mae, Freddie Mac and Ginnie Mae from owning or guaranteeing any MERS mortgage where MERS is claiming to be the “mortgagee of record” (which is about 65,000,000 properties), also dabbles with the idea of a “federal land title system”, something this author thinks may shortchange our states’ rights to real property recordation. (more…)
NEW QUIET TITLE SUIT FILED IN MARICOPA COUNTY, AZ ON THE HEELS OF A QUIET TITLE ACTION THAT WAS REMANDED BACK TO SUPERIOR COURT IN PHOENIX
By Dave Krieger
The case is Easton v. Bosco et al with a case number of CV2010-054748; filed four days after U.S. District Court Judge Mark E. Aspey remanded a quiet title action back to the State Superior Court for Maricopa County, previously removed by Defendants First Horizon Home Loan Corporation and others to federal court, which the author views as a typical move to hide from state court discovery actions. (more…)
MERS TELECONFERENCE YIELDS SOME POSITIVE ACTION PLANS
By Dave Krieger
It was a telephone conference you would have just died to be on. It appears that county recorders are starting to take notice of the losses in revenue with MERS’s circumvention of their recordation systems. By best conservative projections out of this conference, John O’Brien, Essex County Massachusetts Register of Deeds head is foaming mad that MERS has skated off with (in the event of at least one recordation past the initial filing of the mortgage) with $1.95-million dollars a year that rightfully belongs to Essex County. (more…)
IT DOESN’T CHANGE THE GAME … IT ONLY SHIFTS THE BLAME!
By Dave Krieger
The title insurance companies have shifted the blame … to the lenders. What did you expect? Just visit the county courthouse and examine the records of a given homeowner who has a MERS mortgage or deed of trust and you’ll still find problems in the chain of title.
On October 1, 2010, when Version 1.1 of the book was launched onto the Internet, the strategy was based on previous information (of the previous six months) that title companies were going to be “exposing” themselves to unnecessary risk by guaranteeing title insurance to properties whose titles were slandered or clouded. This meant that one could get a homeowner’s indemnity policy with conditions and exceptions and use it to potentially create prima facie evidence in a quiet title action. This method actually “stuck” in one case that appears to be headed for settlement soon. Insider information has revealed that a federal judge has seen this author’s work (as have some bank attorneys) and they were impressed with the clarity and understanding put forward in the author’s assessments. (more…)
WHAYYDA MEAN I CAN’T GET TITLE INSURANCE ON A SHORT SALE ?
By Dave Krieger
Not time for the “I told you so speech” … but the tell-tale signs that the title companies are starting to get nervous about insuring distressed properties is now starting to manifest itself. A Realtor for Keller-Williams in Kansas City had a $600,000 short sale cash buyer all ready to go. The house was worth over a million bucks and the bank agreed to let it go for substantially less and everyone (well almost everyone) was happy. Imagine the commission on a price tag like that … at 6% you’d be looking at splitting a $36,000 check 4 ways (generally) at $9,000 a pop. Now imagine the agony when you are told by Chicago Title that you are denied title insurance until the backlog of clouds on title gets cleared up. Chicago Title is one of many major players in the insurance game that is seeking to limit its exposure created by problems surrounding the broken chains of title that the securitization of residential mortgage-backed loans has created, especially with MERS dicing up the chains of title of over 62-million (or 60% of all current) mortgage loans electronically registered. (more…)
Dave Krieger appears on KVUE’s Midday newscast Consumervue segment.
Watch Dave Krieger on KVUEDave Krieger appears on KVUE’s Midday newscast Consumervue segment. Krieger speaks directly to homeowners who may be facing foreclosure through no fault of their own and the uncertain future our country faces as the plot “foreclosure mess” thickens. He reveals the motivation behind the book Clouded Titles and describes his personal experience dealing with quiet title action on two of his own properties. Dave address the subject of robo-signers and outlines a few examples of how his investigative efforts have turned up some unusual and questionable findings. He touches on the fact that Northwest Trustee Services is currently being investigated for wrongful disclosure. Anchor Olga Compos closes the interview by asking “how did we get into this foreclosure mess in the first place?” Krieger’s answer begins, “MERS …”
SPIN DOCTORS, SOOTHSAYERS … AND IS BANK OF AMERICA SOON TO BE “BK” OF AMERICA … AS IN CHAPTER 11 … AND WHAT THAT MEANS FOR YOU!
By Dave Krieger
The spin cycles are in motion and we haven’t even done the laundry yet. Reports are out that not only did Bank of America post third-quarter losses of $7.65-billion; the soothsayers are countering with “exposure scenarios”, showing $50-billion worth of risk (representing only 3% of the $2.1-trillion total) as good enough reason for Bank of America to seek Chapter 11 protection. It also appears that in this election season, a bailout or some other government “deal” is highly unlikely and would certainly exacerbate Bank of America’s problems.
I thought I was dreaming until I saw Chris Whalen’s posting and thought … gee, Bank of America certainly does have a liquidity problem to be forced to start up foreclosures again. One would certainly have to ask why the Obama administration just now announced intentions to launch a criminal investigation into all of this mess. Does someone in DC have a conscience? Or is this just another “CYA” as a cave to public pressure? With these kinds of pictures, the day traders would be “shorting” Bank of America stock and making a killing doing it.
One would have to wonder about the liquidity factor with all of this missing paperwork and the investors and insurance companies that certainly will be lining up to file fraud suits against the banking giant will certainly force some sort of decision. For BofA, it is significant. General Motors went into Chapter 11 after all and within three months they emerged stronger than ever. But then again, GM wasn’t proprietarily trading residential mortgage-backed securities on Wall Street either. This is a different animal.
My take? Bank of America’s decision to absorb Countrywide and Merrill-Lynch probably wasn’t one of their smartest moves. The paperwork issue that forced the moratorium of some of these foreclosures has forced Bank of America to go after over 100,000 more homes … and then comes the fun part. (more…)
WHOSE SIDE ARE YOU ON ANYWAY?
By Dave Krieger
Stewart Title has erred on the side of caution in its stance against issuing title policies on foreclosed properties due to the “robosignor snafu” that may have effectively clouded those titles. Stewart joins Old Republic Title in its effort to “stop the bleeding” via limiting its exposure to claims by denying Ally Financial-GMAC Mortgage’s REO properties due to admissions by one of its robosignors, Jeffrey Stephan, that he signed thousands of documents without having personal knowledge as to their contents and then having them notarized to appear “official”. Later, Beth Ann Cottrell, working for Chase, made similar admissions under deposition.
Chicago Title has been issuing commitment letters with exclusions and conditions for quite some time in an effort to cover itself against illegitimate claims. However, in the wake of all of this, the CEO for American Land Title Association, Kurt Pfotenhauer is downplaying this whole “cautious” thing, saying (along with Rick Sharpa of RealtyTrac) that this is much ado about nothing. Of late, Steve Bartlett, former Dallas mayor, Congressman-turned Wall Street lobbyist, told Bloomberg News in effect that the 50 states attorneys general should effectively “butt out” of the investigations by Congress in determining the legality of the court and county-recorded filings created by these robosignors that played into the hands of the lenders.
While I take issue with ALTA’s and RealtyTrac’s stance on this whole affair, I have to stop and ask myself every time one of these “slanted” views comes forward, its like, “Whose side on you on here?”
Sharpa, like so many others, seems to believe that challenges to these document snafus are just another form of “prolonging the inevitable”. Inevitable for what? Losing your home so the real estate market can “right itself” and properly hit bottom? This is NOT all the consumers’ fault fellas. They may have come begging under the pretenses of the American Dream, but the lenders certainly didn’t have to cater to them … that is … unless there was some other underlying agenda in mind (uh, er, having to do with securitization of RMBS’s on Wall Street?).
Frank and Brian, the two fast-talking pontificators that drop YouTube videos through ThinkBigWorkSmall.com actually came out saying that MERS was a “good thing”? Geez. If Mortgage Electronic Registration Systems, Inc. (MERS) was such a good thing, then why did JPMorgan Chase jump ship? Why did MERS CEO R.K. Arnold post an apparent “damage control” press release espousing the value of MERS four days prior to JPMorgan CEO Jamie Dimon’s announcement? Is it because he knew that maybe more than just JPMorgan was going to say goodbye to their system of electronic recordation in the face of public and potential criminal scrutiny?
What sadly rears its ugly head (again) is the “business world of banking” taking issue with the “less than frivolous and foolish consumer”, who went out and bit off more than he could chew. Is it not only right that the 50 states AG’s should at least explore WHAT happened behind the scenes, even if this smacks seemingly of an “October surprise”?
Public suspicion also mounts because of the concerns over the bleak economic picture of America, considering the fact that real estate sales play an important role in the overall GNP picture. Everyone is affected by this mess, not just the foreclosed homeowners. Until we “clear the air”, every politician and every banker is going to get a sideways look from every consumer in America. We wait with baited breath to see what Congress won’t do next.
As for the title companies, let them err on the side of caution. It’s not only proper as a defense mechanism, it’s just smart business. I predict the insurance companies through the E&O carriers are next to get hit as the legal claims start flying in the face of clouded titles. Just remember there is a time when the title company could be your best friend instead of your worst enemy when it comes to legal pursuits.
As for ALTA, watch for membership in-fighting, because it’s coming!
STATE OF WASHINGTON JOINS THE FIGHT AGAINST ROBO-SIGNORS! MERS FEEBLE ATTEMPT AT CREDIBILITY DEFEATED BY JPMORGAN CHASE!
By Dave Krieger
It’s news that’s almost too good to be true for not only borrowers but also for 49 states attorneys general that have banded together to attack lenders for violation of state laws with the recording of documents that were improperly notarized and attested to by robo-signors, something I cover heavily in the book “Clouded Titles”.
The Joint Statement of the Mortgage Foreclosure Multistate Group was just issued by the National Association of Attorneys General; and as of this posting, President-Elect of that organization, AG Rob McKenna of Washington took to the media to explain his state’s position on the matter and the fact that his office (already known to this author beforehand) was going to launch an investigation into the organizations responsible for filing what are pretty much considered to be “bogus assignments” and conveyances by improper attestations.
The sequence of events leading up to this press release was not anticipated so suddenly …
On October 9, 2010, Mortgage Electronic Registration Systems, Inc. CEO R.K. Arnold caused to be issued a national press release, of which this author views as doublespeak and damage control, which was posted on major news sites all over America, espousing the value of MERS and its ability to track mortgages …. quoted in part:
“MERS is one important component of the complex infrastructure of America’s housing finance system. Billions of dollars of mortgage money flow through the financial system every year. It takes many, often-unseen mechanical processes to properly get those funds into the hands of qualified homebuyers. Technology designed to reduce paperwork has a very positive effect on families and communities. They may not see it, but these things save money and time, creating reliability and stability in the system.”
MERS is a bankruptcy remote entity that has no assets or liabilities, no income or expenses; and no employees. It does not cover the actions of its “certifying officers”, who are now being accused of playing a part in the robo-signing activities which is drawing fire from the attorneys general and further muddying up the recordation system with documents that could clearly be challenged as having clouded the title to a homeowner’s property.
This author suspects that the title companies are going to have something to say about their participation in anything involving MERS with the latest reports of JPMorgan Chase’s CEO Jamie Dimon, announcing four days later that his bank has stopped using MERS, based on court arguments by Chase’s lawyers that the MERS system is unable to accurately prove ownership of mortgages. The repercussions of this announcement cut right to the core of MERS’s credibility; but there’s more to the eye to those who have been aggressively following this chain of unraveling events. The MERS press release came out four days before the Dimon announcement, thus it appears that MERS was trying to cover its own rear end, knowing that this announcement was pending.
Conversely, for those planning litigation against their lenders and their subordinate trustees in non-judicial foreclosure states to quiet title, the announcement by Chase not only bodes negatively on MERS’s credibility, it also sets new discovery parameters necessary to attack the rest of the electronic recordation system in the impeachment of recorded documentation by other lenders.
“There’s no qualitative difference between judicial and non-judicial foreclosure states; it’s a procedural difference. Fraud is fraud, no matter what state you’re in; if it’s front of the court, it’s in front of the court,” says Seattle attorney Jill Smith of Natural Resources Law Group PLLC.
“If participating MERS lenders think they’re going to ‘fix’ the broken chains of title they’ve created in courthouses all over America to millions of titles to property, they are woefully mistaken”, concludes Dallas attorney Wade Kricken, who is launching quiet title actions on behalf of north Texas homeowners.
With the release of this latest news comes the forethought that other major lenders may be contemplating similar actions; pulling away from MERS in an effort to further distance themselves from the robo-signors who may be coming under fire personally for their actions.
Some insiders the author is talking to are already speculating Chapter 11 filings by some of the major lenders before this mess gets completely out of hand. The author sees that as a potential for the lenders to further write down losses on loans that were actually investor-funded, in order to distance themselves from capital gains issues.