Bank of America targeted in new probe by New York Attorney General

Bank of America under fire Newscast Media NEW YORK, New York In an effort to to get to the the bottom of the questionable foreclosure practices in the mortgage industry, New York Attorney General Eric Schneiderman has targeted Bank of America, the biggest U.S. bank by assets, in a new probe that questions the validity of potentially thousands of mortgage securities and their associated foreclosures, two people familiar with the matter said. Huffington Post reported that Court testimony and independent studies have raised questions over whether banks and other financial firms passed along the required documents to trusts, the independent entities that oversee securities for investors. In some cases where trusts moved to seize borrowers homes, judges have determined the trusts lacked legal standing due to faulty documentation. If the legal steps that guide securitization like taking mortgage documents from one party to another, a critical step under New York law were not undertaken, then the investors who bought the bundled loans could force the companies to buy them back, compelling them to eat enormous losses. New York state investigators could also find that those securities arent valid financial instruments at all and take action under state law. Huffington Post did not explain what critical steps needed to be undertaken so Ill attempt to explain the relevant steps below: New York State Law: Nearly all the agreements that govern securtized mortgages (Pooling and Servicing Agreements) are governed by the laws of New York state. The agreement has a section specifically stipulates that the trust agreement shall be governed by and controlled in accordance with the laws of the State of New York

When these securitized loans are passed around and sold to different entities, every transaction has to be recorded in the appropriate County Clerks office in the county where the property is located. The note also has to be endorsed without recourse from the seller the buyer. In the securtization process there is the Originator (bank); Sponsor (a shell company) the Seller (another shell company); Master Servicer; Depositor and then the Trustee. The note should be endorsed from Originator to Sponsor to Seller to Master Servicer then to Depositor sequentially, who finally endorses it to the Trustee. In other words a note that is an asset of the trust should have an unbrokenchain of endorsements from the Sponsor to the Trustee sequentially. Article II Section 2.01 of every PSA says: Section 2.01 (c)(i)(A) requires that the Depositor deliver the original Mortgage Note endorsed by manual or facsimile signature in blank in the following form: Pay to the order of ____________ without recourse, with All intervening endorsements showing a Complete chain of endorsement from the Originator to the Person endorsing the Mortgage Note (each such endorsement being sufficient to transfer all right, title and interest of the party so endorsing, as noteholder or assignee thereof, in and to that Mortgage Note) Under New York Trust law: A. Unless an asset is transferred into a lifetime trust, the asset does not become Trust property. (NY Estates, Powers and Trust Law, Section 7-1.18) B. The assignment of a mortgage without transfer of the underlying promissory note is a nullity. (Merritt v. Bartholick, 36 N.Y 44 (1867); Kluge v. Fugazy, 145 A.D. 2d 537 (1988)). C. A Trustees act that is contrary to the trust agreement is VOID. (New York Estates, Powers and Trusts Law, Section 7-2.4) In other words the act of a Trustee receiving an instrument that doesnt have ALL the intervening endorsements showing an unbroken chain of endorsements is void. Also the act of a Trustee receiving an instrument where the actors that purchased and sold it are not recorded in Register of Deeds office is void. Banks have constantly failed to provide notes that have all endorsements and have thus failed to prove standing. Most people do not understand what standing to foreclose means, but under Article III of the United States Constitution, to meet the standing burden, a bank should prove the following:

(i) Injury in fact, (ii) Causation and (iii) Redressability. To have LEGAL standing a party must assert its own legal interests as the real party in interest. If a bank cannot prove that the loan became an asset of the Trust, it can never be able to prove standing. The same Section 2.01(B) stipulates: As promptly as practicable subsequent to such transfer and assignment, and in any event, within one-hundred and twenty (120) days after such transfer and assignment, the Trustee shall (B) cause such assignment to bein proper form for recording in the appropriate public office for real property records and (C) cause to be delivered for recording in the appropriate public office for real property records the assignments of the Mortgages to the Trustee Broken Chain of Assignments: So even if the note has the endorsements but the entities that purchased the Note were never recorded at the time of foreclosure, in County Clerks office where the property is located, the bank once again cannot meet the standing burden, because an unrecorded assignment creates a broken chain in title, and if you do not know who owns the title, you do not know whom to pay, hence the instrument becomes void. A Broken Chain of Assignments renders the Deed of Trust Void and Unenforceable under UCC 3-201, 3-204 & 3-302 and as such no triggering of the foreclosure clause in the Deed of Trust is possible. With regard to real property, before an entity assigned an interest in that property would be entitled to lay claim on the property, their interest therein must have been recorded in accordance to State property laws. Now this new investigation into whether the securities these companies created are even valid, represents a new front in Schneidermans ongoing probe, and raises fresh questions into the potential liability sellers of these mortgage instruments face. http://www.newscastmedia.com/ny-attorneygeneral.html

4 Comments [Comments are now closed for this post] Posted by Joseph Earnest - June 15, 2011 at 12:23 am Categories: News Tags: Bank of America class action lawsuit, bank of america countrwide, bank of america foreclosure denied, bank of new york foreclosure, foreclosure fraud, foreclosure investigation, new york attorney general investigates bank of america

4 Responses to Bank of America targeted in new probe by New York Attorney General

1.

Debbi says: June 16, 2011 at 7:33 pm I refinanced in March 2003. I know my loan was securitized in May 2003. I have had three servicers since (Novelle Financial Services, Wilshire Credit and now BofA). There are NO assignments recorded at all. I did a QWR to BofA who sent me a Certified copy of my original note. There are NO endorsements at all and no attachments. I have requested a Satisfaction Recording from the Originator who is on my Note and listed as lender on my mortgage and I know they were paid. They have 45 days to respond (July 22). They cant record a Satisfaction even though they have been paid as they will trip up the investors who bought the loan. If they DONT record a Satisfaction, I can sue them for up to the full amount of the mortgage according to Pennsylvania law. The law does not care WHO paid the orignator (me, my grandmother or some investor in Spain). Should be interesting to say the least.

2.

OneObserver says: August 3, 2011 at 1:30 am From the other end of the securitization fraudMain Street American homeowners Context (This part is just for context, soap opera-like but very true) Husband and I are estranged in 2003, he wants to refinance in early 2004. Eventually leaves in Dec 2005. After months in 2006 of disagreeing to a refi, I agree to it. He signs the Note and Mortgage but the Deed stays in both our names (he pursued me to transfer but I didnt, thank God). Turns out my forged signature appears on the Mortgage but not the Note. This secured the Note. Since I made more money than him, I can see why Merrill Lynch Credit Corpthe underwriter would want to forge my signature on the asset. In April 2006 he stops paying mortgage. Then the divorce action starts, blah, blah, blah, The servicer PHH through its Foreclosure AttorneysShapiro & Dicarothe foreclosure mill), files an Order of Reference in late 2006, a few months after the mortgage default as of April 1, 2006. The Judge dismisses it due to Plaintiff not providing the Trustee Agreement as evidence they have any claims. Plaintiff files for an Appeal but suddenly withdraws it. Important Stuff Shapiro & Dicaro, attorneys for servicer PHH file another foreclosure complaint

in April 2008. The mortgage assignment is executed by Marc J. Hinkle, an employee of PHH acting as Attorney In Fact showing a 2006 date. The recipient of this assignment is Wells Fargo Bank, N.A., as Trustee. (Trustee of what? It didnt say) Shapiro withdraws the foreclosure complaint in June 2008. This allowed them to perfect the assignment, however, it was almost TWO years after the Trusts Pooling & Servicing Agreement allowed it AND it was already a non-performing loanagainst the Prospectus terms. http://www.sec.gov/Archives/edgar/data/1312848/000095012304015242/0000950 123-04-015242.txt. Months later I find out theres another forecosure complaint filed by Shapiro as attorneys for a Trust I didnt know who it was a Trustee for. This was filed July 29, 2008. Several months after filing, I came across these documents through the divorce case. It showed a mortgage assignment to: MERRIL LYNCH MORTGAGE INVESTORS, INC TRUST SERIES MLCC 2004-G PASSTHROUGH CERTIFICATES. The person assigning it had been the same Marc J. Hinkle, again as Attorney In Fact. So here, an agent for an entity that hasnt yet taken ownership of any property to claim, acts as an agent of that property. Interesting. Also interesting that this assignment was FOUR YEARS after the PSA closing date of Dec 2004. WOW. This was in June 2008. I searched http://www.sec.gov and looked at the Pooling & Servicing Agreement for the above mentioned Trust/certs. The closing date of this transaction was On or about December 29, 2004, by which time the asset.backing mortgages had to be transferred into the Trust. So the natural questions are: 1-Why was this mortgage assigned to the Trust almost 4.5 years after the Trusts own Pooling and Servicing Agreement closing date? 2-Why was this non-performing asset transferred into a Trust that sold bonds on the premise (according to the prospectus) of being guaranteed by performing loans? 3-Why did Merrilll sell the bonds based on the tranche risk profile of the underlying loan pool guarantees when even if by 1 loan, this product was fraudulent? 4- Why didnt Merrill or the Trustee Wells Fargo report this to investors? (investor listing below) The associated tranches and CUSIPS are: A-1.. $306,568,000 (2) Senior 59020U NZ4 A-2.. $163,396,000 (2) Senior 59020U PA7 A-R.. $ 100 (3) Residual/Senior 59020U PC3 X-A (4) (4) Notional/Senior 59020U PB5 B-1 $ 5,092,000 (2) Subordinate 59020U PD1

B-2 $ 3,880,000 (2) Subordinate 59020U PE9 B-3. $ 2,182,000 (2) Subordinate 59020U PF6 A sampling of the associated investors of one or more of these tranches of this specific example include: (from public information and for the years 2007-2010): Wiliam and Melinda Gates Foundation Massachusetts Mutual variable Annuity Separate Account I CM Variable Life MAIDEN LANE II Portfolio (not sure if NY FRB sold it yet as it is a nonagency RMBS and the NY FRB stalled sales of Maiden in July 2011) PIMCO INCOME FUND AIG (back in time when they bailed out Bear Stearns, they held one of these tranches) The NY foreclosure judges dont comprehend the esoteric world of securitizationthey are elected officials. They only go by legal procedure, and even in the face of blatant FRAUD, these Judges gloss over issues of Standing. In laymans and contemporary folklore: Dude, if you are not the true owner of this asset, you cant get the face value of this assetfor the Nth time (ie the resecuritization process, the bailout and TARP, etc.). Your commentary on this simple yet powerful humble example of how this foreclosure mess still needs a lot more transparency than what the FRB claims it has would be so, so helpful to millions of hard working people. 3. Joseph Earnest says: August 4, 2011 at 11:11 pm The Pooling and Servicing Agreement says it all. Most trusts are defunct and trustees have no standing to enforce these alleged debt obligations on behalf of non-existent trusts. You have to school your lawyer and the judge about securitization. 4. Debbi says: September 1, 2011 at 7:44 pm Note to OneObserver: Can you give me an indication as to how you got the Cusip Numbers? Ive been all over SEC trying to find them. My note (according to BofA) is Aurora SAIL 2003-BC8. I cant find anything about it other than the original prospectus and agreement. Apparently no filings with the SEC after Lehman bankrupted. Any help would be appreciated.

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