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Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court - "They Own Nothing!"

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  • Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court - "They Own Nothing!"

    http://iamfacingforeclosure.com/arti..._Boyko/01.html

    Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court - "They Own Nothing!"
    2007-11-12

    by Moe Bedard and Aaron Krowne

    Judge Christopher A. Boyko of the Eastern Ohio United States District Court, on October 31, 2007 dismissed 14 Deutsche Bank-filed foreclosures in a ruling based on lack of standing for not owning/holding the mortgage loan at the time the lawsuits were filed.

    Judge Boyko issued an order requiring the Plaintiffs in a number of pending foreclosure cases to file a copy of the executed Assignment demonstrating Plaintiff (Deutsche Bank) was the holder and owner of the Note and Mortgage as of the date the Complaint was filed, or the court would enter a dismissal.

    The Court's amended General Order No. 2006-16 requires Plaintiff (Deutsche Bank) to submit an affidavit along with the complaint, which identifies Plaintiff as the original mortgage holder, or as an assignee, trustee or successor-interest.

    Apparently Deutsche bank submitted several affidavits that claim that Deutsche was in fact the owner of the mortgage note, but none of these affidavits mention assignment or trust or successor interest.

    Thus, the Judge ruled that in every instance, these submissions create a "conflict" and they "do not satisfy" the burden of demonstrating at the time of filing the complaint, that Deutsche Bank was in fact the "legal" note holder.

    While the decision is great for homeowners in distress (due to providing a new escape hatch out of foreclosure), it is a big blow to the cause of sorting out the high-finance side of the mortgage mess.

    Jacksonville Area Legal Aid Attorney, April Charney, broke this news to us via email and made these comments in regards to the Ohio Federal Court ruling (emphasis ours):

    This court order is what I have been saying in my cases. This is rampant fraud on every court in America or nonjudicial foreclosure fraud where the securitized trusts are filing foreclosures when they never own/hold the mortgage loan at the commencement of the foreclosure.

    That means that the loans are clearly in default at the time of any eventual transfer of the ownership of the mortgage loans to the trusts. This means that the loans are being held by the originating lenders after the alleged "sale" to the trust despite what it says per the pooling and servicing agreements and despite what the securities laws require.

    This also means that many securitized trusts don't really, legally own these bad loans.

    In my cases, many of the trusts try to argue equitable assignment that predates the filing of the foreclosure, but a securitized trust cannot take an equitable assignment of a mortgage loan. It also means that the securitized trusts own nothing.

    So with this decision, it appears confirmed that investors in the mortgage debacle may in fact own nothing---not even the bad loans they funded! It seems their right to the cash flow from the underlying properties does not extend to ownership of the properties themselves; thus clouding the recovery picture considerably.

    Charney further remarked to us:

    This opinion, once circulated and adopted by state and Federal courts across the country, will stop the progress of foreclosures, at first in judicial foreclosure states, across America, dead in their tracks.

    We agree with additional remarks Charney made pointing out that this decision has major adverse implications for the prospects of an amicable financial workout for the various investor contingents in mortgage-backed securities (MBSes). Doubt is cast on where the full write-downs will eventually land, and this uncertainty can only be expected to further harm the market value of MBS and MBS-based synthetic securities, already in shambles purely due to rising underlying delinquencies. Investors in these securities might have assumed---wrongly, it turns out---that they actually owned some "real estate" in these deals.

    To paraphrase Jim Cramer, "They own nothing!"

  • #2
    Re: Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court - "They Own Nothing!"

    take a look at this thread for similar cases in florida
    http://www.itulip.com/forums/showthr...eclosure+avoid

    Comment


    • #3
      Re: Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court - "They Own Nothing!"

      http://www.boston.com/business/ticke...affirms_2.html

      Justice Keith C. Long affirmed his own March decision that invalidated foreclosure proceedings involving two Springfield homes because the lenders did not hold clear titles to the properties at the time of sale. In today's reconsideration of that ruling, Long described a convoluted process in which ownership of the mortgages changed multiple times without being properly recorded. He said the problems lenders now face are "entirely of their own making," and if they seek a change in law they should look toward the Legislature.

      "The issues in this case are not merely problems with paperwork or a matter of dotting i's and crossing t's,'' Long said in a 27-page decision. "Instead, they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts Legislature."

      The decision comes seven months after Long's initial ruling, which came as a shock to many who deal with distressed properties. Lenders believed they could complete foreclosure transactions and later produce formal proof they held the mortgages. Since March, some lenders have stopped selling foreclosed properties out of fear the sales later could be voided, and title companies have refused to insure them. The logjam has impaired efforts by communities and nonprofits to buy and rehabilitate foreclosed homes in some of the state's hardest hit areas. It has also made it difficult for individuals to buy foreclosed homes.
      full text: http://www.boston.com/business/artic...5/ibanezruling

      The judge details the trails of securitization.

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      • #4
        Re: Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court - "They Own Nothing!"

        This has the potential to be extremely important. What do you think will happen now ? Will they just buy the judges ?

        Comment


        • #5
          Re: Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court - "They Own Nothing!"

          Originally posted by Anon21456 View Post
          This has the potential to be extremely important. What do you think will happen now ? Will they just buy the judges ?
          Well, it's got to be easier to fix the judge than to fix the paperwork.

          Comment


          • #6
            Re: Deutsche Bank Foreclosures Tossed Out of Ohio Federal Court - "They Own Nothing!"

            Originally posted by Anon21456 View Post
            This has the potential to be extremely important. What do you think will happen now ? Will they just buy the judges ?
            In only a few states do foreclosure proceedings have to go through a judge.

            I think this is going to languish on for years in those states.

            Comment

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