HOUSE BILL NO. 1506 | VA Attempts To Fix Fraudclosure... http://4closurefraud.org/2011/01/12/house-bill-no-1506-va-at...

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HOUSE BILL NO. 1506 | VA Attempts To Fix Fraudclosure – Banks Go Nuts

Posted by Foreclosure Fraud on January 12, 2011 · 8 Comments

The Market Ticker | VA Attempts To Fix Fraudclosure – Banks Go Nuts

They’re trying to kill this bill folks – get on the phones if you live in VA, and do it NOW.

§ 55-59.5. Sale by trustee; additional requirements; nominee cannot request sale.

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A. On or after July 1, 2011, if a deed of trust or mortgage has been assigned by the original
grantee or mortgagee, the trustee, or any substitute trustee, under any deed of trust or mortgage
shall not proceed with any sale of the property unless (i) all assignments of the deed of trust or
mortgage have been duly recorded with the land records of the locality in which the property is
located and (ii) the person who asserts that he is the holder of the obligation secured by the deed
of trust or mortgage can directly trace his interest through the duly recorded assignments to the
original grantee or mortgagee.

B. If all assignments of the deed of trust or mortgage have not been duly recorded with the land
records of the locality in which the property is located, the trustee, or any substitute trustee, may proceed
with the sale of the property conveyed to him by the deed of trust or mortgage upon (i) the recordation of
any assignments necessary to trace the interest of the person who asserts that he is the holder of
the obligation secured by the deed of trust or mortgage to the original grantee or mortgagee or, if
an intervening assignment cannot be recorded because the assignee no longer exists, the provision
of an affidavit by the party secured to the trustee, or any substitute trustee, attesting under
penalty of perjury that the person is the party secured under the deed of trust, and (ii) the
payment of all fees, taxes, and other costs applicable to the recording of the assignments. The
person who asserts that he is the holder of the obligation secured by the deed of trust or mortgage is solely
responsible for paying all fees, taxes, and other costs required in clause (ii).

C. A nominee of a grantee, mortgagee, or beneficiary for a deed of trust or mortgage has no

authority to request that the trustee, or any substitute trustee, proceed with any sale of the
property and the trustee, or any substitute trustee, shall not proceed with any such sale upon the
request of the nominee. As used in this section, “nominee” means a person who is designated in the deed of
trust or mortgage, or who is subsequently designated to act on behalf of the grantee, mortgagee, or
beneficiary. The term “nominee” does not include an agent or other fiduciary.

§ 55-59.6. Foreclosure; civil penalty for fraud; civil action.

A. Any person who (i) knowingly makes, uses, or causes to be made or used a false or fraudulent
record, document, or statement or (ii) knowingly swears or affirms falsely to any matter, in
support of any foreclosure upon property under this chapter shall be liable for a civil penalty of
$5,000 for each violation.

Bingo. No more fraudclosure in VA. No assignments, evasion of recording fees, sorry, no foreclosure.

Fix it or don’t foreclose.

Now here’s the problem the banks have with this – If the originator is bankrupt and there were no other
assignments, who do you get to assign the note?

Let’s presume the following:

Joe’s Bait-N-Mortgage -> Lehman -> Lehman Depositor -> Trust

The Trust in turn hired “Jack’s Servicing” to service the loan. Incidentally, Jack is a successor to Joe. He’s
not Joe, but he bought Joe’s assets in a bankruptcy proceeding after Joe blew up.

This is a somewhat-abbreviated chain, but it’s close enough. Lehman was the securitizer and they set up an
LLC to be the Depositor. That “true sale” was required in order to get the “Holder in Due Course”
treatment. Only the Depositor can transfer assets into the Trust according to the PSA that controls the
deal.

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Now Joe endorsed the note in blank, and then sat on it. He never delivered it to Lehman, who of course
couldn’t deliver it to anyone else.

Lehman has failed.

Jack seeks to foreclose as the servicer. He has authority to do it on behalf of the Trust.

However, when he does so it is discovered (via the Trust’s remittance information) that The Trust does not
have the mortgage paper in it.

Oops.

So now we go back to Joe (which is now Jack), and we find the original “Endorsed in Blank” note.

Fine, right?

Nope.

See, Joe has no contract with Jack and never did. His contract to deliver the note was with Lehman. But
Lehman is bankrupt.

So now the attorney calls up Joe’s document guy (who is defunct but his assets were bought by Jack) and
says “I need you to give me an assignment.”

That guy says “What? Who the hell are you?”

Jack’s lawyer says “Why we hold the paper 867-5309 and you have the physical document endorsed in
blank.”

The guy says “Oh, that deal. Yeah, we have it. We were paid for it three years ago by Lehman Brothers;
it’s off our books.”

Jack’s lawyer says “I know that, but we need the assignment so we can record it and foreclose.”

The guy responds “Uh, go talk to Lehman. Didn’t you hear me – that deal was off our books three years
ago.”

Jack’s lawyer says “But Lehman is bankrupt; there’s nobody to call over there.”

The guy says “I think I read something about that in 2008. Oh yeah, I did. Not my problem, and not my
contract. My contract wasn’t with you, isn’t with you, and can’t be with you now.”

Jack’s lawyer contemplates this. He can probably bitch and get the guy to perfect his transfer to Lehman,
but that’s a bad thing, not a good one. See, if he does that the paper goes into Lehman’s bankrupt estate,
probably never to come back out. That would be bad, as it would this loan into an instant zero for the
so-called Trust that allegedly has it but really doesn’t.

See why the banks don’t want to have to actually prove up anything? They can’t, and if they’re forced to
then suddenly what really happened all those years comes out in open court.

Maybe this is a small problem and maybe it’s a big problem. Maybe it’s no problem at all. But if it’s no
problem at all, why are the banks raising hell about being forced to prove up the provenance of the alleged debt
they seek to enforce the security interest upon?

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Yeah.

Now get on the phone.

View with responses

4closureFraud.org
~

House Bill 1506 Virginia Foreclosures

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Comments

8 Responses to “HOUSE BILL NO. 1506 | VA Attempts To Fix Fraudclosure – Banks Go Nuts”

1. housemanrob says:
January 12, 2011 at 11:26 PM

Somebody pinch me!

Reply

2. l vent says:
January 12, 2011 at 2:22 PM

Isn’t it a shame that strict proper recordation of property laws are already on the books and the state’s
have to legislate another bill and pass it into law as if there needs to be some sort of a reminder to the
banksters and their Attorneys that THIS IS THE LAW and has been THE LAW all along. Is the court
system this inept that our elected officials have to waste time and tax payer money to pass virtually the
same laws that have already been put in place to protect our land in this country in order to try and stop
the Banksters from fraudclosing? Why is there not a Nationwide Moratorium on all Foreclosures right
now anyways? I heard 95% of foreclosure victims do not even try to fight their for fraudclosures for what
ever reason they are not fighting back. These banks are being allowed to take advantage of these people
and being allowed to house steal by our Government. This behavior by the banksters and our Government
is completely UNAMERICAN and UNDEMOCRATIC. These banks are counting on most fraudclosure
victims not knowing what is being done to them is illegal.This is what the Banksters are counting on so
they may keep Fraudclosing on HELPLESS HOMEOWNER’S. The MAINSTREAM PRESS has been
STRANGELY SILENT about FRAUDCLOSURES and FORECLOSUREGATE. These banksters
need to be stopped from house stealing nationwide. This raises serious questions about why our own
Government is continuing to allow the Banksters to fraudclose in almost every State.

Reply

3. ForensicMortgageExaminers says:
January 12, 2011 at 2:17 PM

What you have all missed is they have an “out”… if an intervening assignment cannot be recorded
because the assignee no longer exists, the <u<provision of an affidavit,/i> by the party secured to the
trustee, or any substitute trustee, attesting under penalty of perjury that the person is the party secured
under the deed of trust

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So, an affidavit will “cure” their problem and we all know how scared they are of filing false affidavits,
don’t we?

While this is a start in the right direction, this is not good enough. Those should be CRIMINAL
PENALTIES!!!!

Reply

4. leapfrog says:
January 12, 2011 at 1:59 PM

I can’t believe VA is bringing consumer-friendly legislation and actually “turning on one of its own”
(MERS). What will all those “high-powered” lobbyists that were recently hired do now? They must be
having a hissy right about now. Tee-hee-hee! I’m LOVING this.

http://foreclosureblues.wordpress.com/2011/01/08/mers-hires-former-philandering-congressman-as-part-
of-capitol-hill-lobbying-team/

Reply

5. Jeff Homeloser says:

January 12, 2011 at 1:16 PM

Would this be needed in Maryland perhaps?

Reply

6. Mike says:
January 12, 2011 at 12:59 PM

Okay….I’d like 49 more….to go, please. (We’re in a hurry.)

Seriously–is this as good as I think it is? Please tell me, because this could be replicated. I will be very
interested to hear what everyone has to say about this. (Like the Mortgage Bankers Association–if they
hate it–I’m inclined to love it.)

Reply

7. pelucheven says:
January 12, 2011 at 12:42 PM

this is fantastic and we have been after the VA LEGISLATURE FOR MONTHS.

Reply

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leapfrog says:
January 12, 2011 at 1:38 PM

Oh good, I’m glad you saw this! I posted the info for you on another site. I’m cheering for the
homeowners/consumer advocates in VA. Hope something like this comes our way in CA.

Reply

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