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Bank of America’s Review For Foreclosure Errors May Lead to Foreclosure Defense

Anne Tyler

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Bank of America’s Review For Foreclosure Errors May Lead to Foreclosure Defense Lawyers Asking Courts to Set Aside Old Foreclosure Cases

FROM: http://www.prweb.com/releases/bofa-f...web4601714.htm

Previous Homeowners may be entitled to damages for the unlawful taking of their homes. Florida Foreclosure Defense Lawyers are investigating to determine if grounds exist to ask Courts to set aside old foreclosure cases where homeowners have lost their homes to large banks, including Bank of America, JP Morgan Chase and other well known mortgage lenders.

Bank of America’s review of court documents for possible errors in foreclosure cases, may lead to previous homeowners receiving compensation for the unlawful taking of their homes

. Through a company spokesman, Bank of America stated it is investigating all affidavits in foreclosure cases that have not yet gone to judgment in 23 states where courts have jurisdiction over home seizures. Florida Foreclosure Defense Attorneys, Sackrin & Tolchinsky, P.A., intend to examine the circumstances surrounding the filing of affidavits in old foreclosure cases filed by Bank of America, and JP Morgan Chase and GMAC both of whom have also said, through company spokesman, that they may have improperly filed faulty documents in their current foreclosure cases.

The act of filing affidavits, where the person signing the document is asserting they have personal knowledge of the information contained in the affidavit when in fact they do not, may permit the reopening of old foreclosure cases even after the property

was sold at auction. Mr. Tolchinsky notes “If a fraud on the Court has been committed, then there may be grounds to have old foreclosures cases set aside and allow previous homeowners to seek compensation from the foreclosing party.” This may be true no matter how much time has elapsed since the bank took ownership of the property.

Mr. Tolchinsky will be handling these cases throughout Florida without charging clients a legal fee or cost unless his clients are successful. Mr. Tolchinsky asserted “these homeowners have lost everything certainly we don’t expect them to lay out money for legal fees unless we prevail.” Mr. Tolchinsky believes that the actions by the banks may have violated numerous State and Federal laws which afford financial relief for the homeowners, including the awarding of attorney fees if they prevail.

Larry Tolchinsky, Esq.

Since 1994, Larry Tolchinsky, a South Florida lawyer, has represented clients in real estate matters, including foreclosure defense, deficiency judgments, real estate closings and other related issues. He is a contributor to articles on Bloomberg.com, USAToday.com, CNNMoney.com and other well known news publications.

If you or a member of your family is facing foreclosure, has lost their home

to foreclosure, or have any questions regarding a Florida foreclosure, simply call 954-458-8655 for a free and confidential consultation.

The lawyers at Sackrin & Tolchinsky, P.A. serve all of Broward County and South Florida, representing clients in a variety of legal cases including foreclosure defense, personal injury, medical malpractice and probate law.

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I'M SORRY, I THOUGHT THIS WAS A FREE COUNTRY and this section was for comments about mortgages.

OPINIONS are easy to come by. How you feel your comment added anything to the situation is beyond me.

If you don't like what I wrote, you ARE NOT REQUIRED TO READ IT. Don't like it? PASS ON BY.

Just because its "spam" to you doesn't mean it has no meaning to anyone else.


Edited by Anne Tyler
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Boy! The true colors are smoking today!!!!!!!!!!

Annie - we have a rule on this website - we cannot actively promote a business by freely listing a telephone and contact information.

Doing so you will lose your membership to this web site - the forum moderators do not give you a 2nd chance.

Readers of posts - are free to send you a personal message, contacting you that way.

Point - you have to do your time, by answering question and posting good information others can benefit. Then people refer and actively seek you out.

My $00.02

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  • 3 months later...

The massive lawsuit against Wells Fargo / Wachovia, Indymac / OneWest bank, Citibank, Bank of America, JP Morgan Chase, GMAC..............can actually, not only put a stop to your foreclosure, but also pause your house payments with no loss to you............

I'm just spreading the word.

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The case is U.S. Bank v. Ibanez, 10694, Supreme Judicial Court of Massachusetts (Boston). The lower-court cases are U.S. Bank National Association v. Ibanez, 08-Misc-384283, and Wells Fargo Bank NA v. LaRace, 08-Misc-386755, Commonwealth of Massachusetts, Trial Court, Land Court Department (Boston).

Banks Lose Pivotal Foreclosure Case in Massachusetts Top Court

January 07, 2011

(Bloomberg) -- U.S. Bancorp and Wells Fargo & Co. lost a foreclosure case in Massachusetts’s highest court that will guide lower courts in that state and may influence others in the clash between bank practices and state real-estate law. The ruling drove down bank stocks.

The state Supreme Judicial Court today upheld a judge’s decision saying two foreclosures were invalid because the banks didn’t prove they owned the mortgages, which he said were transferred into two mortgage-backed trusts without the recipients’ being named.

Joshua Rosner, an analyst at the New York-based research firm Graham Fisher & Co., called the decision “a landmark ruling” showing that at least in Massachusetts a mortgage “must name the assignee to be valid.”

“This is likely to open the floodgates to more suits in Massachusetts and strengthens cases in other states,” Rosner said.

“We agree with the judge that the plaintiffs, who were not the original mortgagees, failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph D. Gants wrote for a unanimous court.

Wells Fargo, the fourth-largest U.S. lender by assets, fell 65 cents, or 2 percent, to $31.50 at 4:15 p.m. in New York Stock Exchange composite trading. U.S. Bancorp, the fifth-largest U.S. bank by deposits, declined 20 cents, or 0.8 percent, to $26.09.

Bank Index Drop

The 24-company KBW Bank Index fell as much as 2.4 percent after the decision was handed down.

Claims of wrongdoing by banks and loan servicers triggered a 50-state investigation last year into whether hundreds of thousands of foreclosures were properly documented as the housing market collapsed.

Although the decision was issued by a Massachusetts state court, it will be used by homeowners in foreclosure cases in other states, said Matthew Weidner, a St. Petersburg, Florida, lawyer who represents such homeowners.

“This is a very detailed, very specific indictment of an entire industry’s practices and procedures, and it’s an indictment that is going to send shockwaves throughout the entire mortgage, foreclosure, real-estate servicing industry,” he said.

The nationwide probe came after JPMorgan Chase & Co. and Ally Financial Inc. said they would stop repossessions in 23 states where courts supervise home seizures and Bank of America Corp. froze U.S. foreclosures.

Trustee Role

“This judgment has no financial impact on U.S. Bancorp,” Teri Charest, a spokeswoman for the Minneapolis-based bank, said in an e-mailed statement. “Our role in this case is solely as trustee concerning a mortgage owned by a securitization trust” and the bank had no responsibility for transferring the loans.

Wells Fargo said in a statement that, as trustee, it had no role in originating or servicing the loans.

“Wells Fargo believes the court’s ruling does not prevent foreclosures on loans in securitizations,” it said. “The court simply set forth a standard legal process that mortgage servicers must follow in Massachusetts.”

“The SJC’s ruling effectively rejected many grounds for the lower court’s decisions, and generally represents a good result for the mortgage-loan securitization industry,” Coppell, Texas-based American Home Mortgage Servicing Inc., the mortgage servicer on the trusts, said in a statement. “The SJC’s decision confirms that the securitization processes currently in place in the secondary mortgage market are sound, and can and do validly transfer mortgages for foreclosure purpose.”

‘Unique and Specific’

American Home Mortgage added: “The SJC’s decision is of limited applicability because it is based on law that is unique and specific to Massachusetts.”

The Massachusetts cases started in 2005 when Rose Mortgage Inc. lent Antonio Ibanez $103,500 and Option One Mortgage Corp. lent Mark and Tammy LaRace $129,000, according to the banks’ brief to the high court. Ibanez and the LaRaces stopped paying on their adjustable-rate subprime mortgage loans and were foreclosed on in 2007.

By that time, U.S. Bancorp and Wells Fargo & Co. said they controlled the loans, which had been subsumed in mortgage-backed trusts. The banks bought the homes in foreclosure auctions in July 2007.

In March 2009, Massachusetts Land Court Judge Keith C. Long voided the foreclosures, finding that the mortgage transfers were done months after the house sales and so U.S. Bancorp and Wells Fargo didn’t own them.


In October of that year, Long declined the banks’ request to abandon that ruling after they argued the documents that bundled together the mortgages had transferred those instruments to them.

Long found that Option One Mortgage Corp., which early in the “chain of title” owned the mortgages, erred in assigning the mortgages without naming who they were transferred to, so- called blank assignments.

“We have long held that a conveyance of real property, such as a mortgage, that does not name the assignee conveys nothing and is void,” the Supreme Judicial Court said today.

Tom Deutsch, executive director of the American Securitization Forum, an industry lobbying group, said in a statement that today’s decision, unlike Long’s, holds that “assignments of mortgage can be executed in blank, as long as a complete chain of transfers can be shown through the applicable deal documents.”

Deutsche said that because the deal documents with the loan schedules weren’t introduced as evidence in the Ibanez and LaRace cases, “the court ruled that an otherwise valid confirmatory assignment was not sufficient to prove right to foreclose.”

‘Fully Enforceable’

Deutsche added that his group was “pleased the court validated the use of the conveyance language in securitization documents as being sufficient to prove transfers of mortgages under the unique aspects of Massachusetts law.” He added: “The ASF is confident securitization transfers are valid and fully enforceable.”

The banks argued, as does the securitization industry, that the right to a mortgage follows the sale of the promissory note it secures, and since they held the notes, they should be deemed to have the right to the mortgage.

The court disagreed.

“In Massachusetts, where a note has been assigned but there is no written assignment of the mortgage underlying the note, the assignment of the note does not carry with it the assignment of the mortgage,” Gants wrote.

Ownership Question

A holder of the note in that case could file a lawsuit to obtain the mortgage, the court said. Otherwise, the mortgage holder remains unchanged, which is why the banks didn’t have the right to foreclose in the two cases, according to the opinion.

“The question about ownership is certainly a big one for the banks, and any time you have a case that sets a precedent, there is the possibility that other states and a federal court will be influenced by that,” said Michael Nix, who helps manage about $900 million at Greenwood Capital Inc., in Greenwood, South Carolina.

He said he sold his Bank of America stake in the last week for Citigroup shares because of BofA’s foreclosures and mortgage issues.

Bill Halldin, a spokesman for Bank of America, declined to comment.

“This decision affirms our belief that the onus should be on the banks and other holders of notes to follow proper procedures before initiating foreclosure on any Massachusetts homeowner,” state Attorney General Martha Coakley said in an e- mailed statement. Coakley filed a friend-of-the-court brief on behalf of the borrowers.

Delinquent Borrowers

Bank stocks got hit in the market today because investors don’t fully understand the ruling and it looks as though it may preclude banks from foreclosing on delinquent borrowers, said Paul Miller, a bank analyst for FBR Capital Markets in Arlington, Virginia, and former examiner for the Federal Reserve Bank of Philadelphia.

“I don’t think that’s the case at all,” Miller said, adding that the decision will probably slow down the process. “Any time you bring into question the foreclosure process, it will be negative for the banks.”

“It definitely puts into question some of the foreclosure practices of the transfer of notes,” Miller said. “The banks are going to feel some pain until we get a better, clearer picture of what’s happened.”

The high court said that documents properly transferring a mortgage, along with a schedule of the pooled loans clearly identifying it as one of those assigned, “may suffice to be proof that the assignment was made by a party that itself held the mortgage.”

Edited by GDayMateAZ
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“However, there must be proof that the assignment was made by a party that itself held the mortgage,” the court said. U.S. Bancorp and Wells Fargo didn’t supply the proof in this case, it said.

The court rejected the banks’ request to apply the decision only to future foreclosures if they lost. It does that when it makes a big change in the law, which it didn’t do here, it said.

“All that has changed is the plaintiffs’ apparent failure to abide by those principles and requirements” in the law “in the rush to sell mortgage-backed securities,” Gants wrote.

Thomas Mitchell, an analyst at Miller Tabak & Co., said today in a note that “we do not see this type of decision as representing a major financial event” for banks. Lenders will already have taken 85 percent to 90 percent of their losses on the loans by the time of a foreclosure, he said.

Legal Rights

“In most cases, we believe, the lender will end up retaining significant legal rights once the paperwork is properly amended,” Mitchell wrote.

In a concurring opinion, Justice Robert J. Cordy said he was struck by “the utter carelessness with which the plaintiff banks documented the titles to their assets.”

He said the court’s decision didn’t address, because it wasn’t raised in the case, what effect that conduct would have on “a bona fide third-party purchaser” who relied on the methods the banks used and may now not have clear title to their homes.

Anthony Laura, who heads mortgage-banking litigation at Patton Boggs LLP in Newark, New Jersey, said those homeowners’ titles might be challenged, which would force lenders “into battle on two fronts -- one with those who lost their property to foreclosure and one with those who acquired their property after foreclosure.”

The case is U.S. Bank v. Ibanez, 10694, Supreme Judicial Court of Massachusetts (Boston). The lower-court cases are U.S. Bank National Association v. Ibanez, 08-Misc-384283, and Wells Fargo Bank NA v. LaRace, 08-Misc-386755, Commonwealth of Massachusetts, Trial Court, Land Court Department (Boston).

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The case is U.S. Bank v. Ibanez, 10694, Supreme Judicial Court of Massachusetts

The main issue is the Lenders did not yet have the authority to foreclosure to the two homes outlined by Mass Law.

Looked up and read the court briefing - this is a good case study about Foreclosures in Non Judicial states.

Have sat through 100's of closings (writing many Mass loans). Because this is a non judicial state, the closing only involved a notary going to the home. I cannot count the amount of times I'd have to be on the phone, going over every page in the closing document package in Non Judicial states.

The main the purpose of the loan note, is listing the terms of the loan including clause if a homeowner goes into default. The parties involved in the contract are the borrower and the lender. After this point the lender is servicing the loan as a pass through security. The individual loan is pooled with other loans, then sold to investors.

Read chapter 244 Foreclosure and Redemption of Mortgages in the state of Mass, - http://www.malegislature.gov/Laws/GeneralLaws/PartIII/TitleIII/Chapter244/Section14

The industry standard - does not to record a document reflecting the assignment of a mortgage at the time the assignment occurs during securitization.

It is typically is recorded only after a mortgage loan goes into default and resort to the collateral is necessary.

The article above you mention contradicts Mass state law......

“In Massachusetts, where a note has been assigned but there is no written assignment of the mortgage underlying the note, the assignment of the note does not carry with it the assignment of the mortgage,”


In an assignment of a mortgage of real estate the word “assign” shall be a sufficient word to transfer the mortgage, without the words “transfer and set over .......

In no way am I trying to side with the banks - many times I study case briefings, to refer to when I write up plans to save homes facing foreclosure. What you can and can't do is different between states..

My $00.02


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