Truth in Lending Violation?

[sfosmith]

What is the name of your state (only U.S. law)? U.S. Law

I discovered that my 2006 loan was funded by an undisclosed Warehouse lender. The Mortgage Company on the face of the note and listed in Deed of Trust (California) did not lend their money but acted as a straw man in the transaction. Commenting on my complaint allegations, the judge in my case said that "if the Lender did not fund the loan then it has paid no consideration and upon transferring the Note, could only transfer the rights it had".

Questions:

If one proves the Party on the Note did not fund the loan, what kind of Note defect would proceed to the other transferees?

Is this a TILA violation, and what remedies would likely follow from a TILA suit?

Is the Deed of Trust enforceable when the Note and DOT do not describe the true obligation?What is the name of your state (only U.S. law)?

 

[FlyingRon]

If one proves the Party on the Note did not fund the loan, what kind of Note defect would proceed to the other transferees?

What sort of note defect do you have? You and the entity that you signed the mortgage agreement are responsible to each other until they assign the contract to the next party and then it switches to that party.

I guarantee your loan was funded by the initial person you signed with. All that matters is the lender you signed with paid out the money. It matters NOT where they got the funds. The person who you bought the house from was not going to deed it over to you without funds. The fact that they intended to resell the loan immediately (my last one got sold twice before the first payment was due) is neither improper nor actionable.

Is this a TILA violation, and what remedies would likely follow from a TILA suit?

Are your loan terms and costs what they stated in the TILA disclosure? If so, you appear to have no claim under TILA.

Is the Deed of Trust enforceable when the Note and DOT do not describe the true obligation?What is the name of your state (only U.S. law)?

What makes you think it does not? The DEED OF TRUST doesn't describe the funding source or even much of the loan details, that's what the note does. The deed of trust is purely a security vehicle.

What would happen if there were a TILA violation (though nothing you have stated here even begins to look like one), is that you can get the loan rescinded. You're still on the hook to repay the principal, but all the closing costs and interest can be refunded to you. You only have three years to bring such an action.

 

[sfosmith]

What sort of note defect do you have? You and the entity that you signed the mortgage agreement are responsible to each other until they assign the contract to the next party and then it switches to that party.

I guarantee your loan was funded by the initial person you signed with. All that matters is the lender you signed with paid out the money. It matters NOT where they got the funds. The person who you bought the house from was not going to deed it over to you without funds. The fact that they intended to resell the loan immediately (my last one got sold twice before the first payment was due) is neither improper nor actionable.

The loan was not funded by the Mortgage Banker on the face of the note. Evidence before the court is that the funds came from a Warehouse Bank direct to the Title Company. The warehouse bank was a division of a large Wall Street entity which eventually acquired the note.

What makes you think it does not? The DEED OF TRUST doesn't describe the funding source or even much of the loan details, that's what the note does. The deed of trust is purely a security vehicle.

The Deed of Trust names the lender and embodies the agreement between the borrower and lender. What if the lender is found not to have lent but was a straw man for the purpose of hiding the true lending party?

 

[tranquility]

I believe the OP wants to know if he will be successful in his strategy. I'm betting the courts will not invalidate essentially all loans made in the 2000s, but, there is a complex theory about how it could be a problem.

See:
produce the note foreclosure defense strategy - Foreclosure Defense Resource Center : Foreclosure Defense Resource Center

Note all the references to may and should and the use of CAPITALS when all the author needed to do was point to a case or two already decided in his favor to make the point. I wonder why?

 

[FlyingRon]

I can buy the produce the note strategy. I can't buy the "the guys who forked over the $200,000 or whatever to the seller of my house weren't the guys I signed my note with so I don't have to pay squat" argument.

Again, even if you succeed in a TILA violation (and TILA seems to only cover the terms and amounts in the loan NOT this invented defect), you'd still need to come up with the principal.

If you want to claim some defect in the original parties on the note, it wouldn't be TILA, might be RESPA, might be something else, but you're actually going to need some legal foundation for your claim rather than inventing an idea that some law ought to cover some imagined problem.

 

[sfosmith]

If you want to claim some defect in the original parties on the note, it wouldn't be TILA, might be RESPA, might be something else, but you're actually going to need some legal foundation for your claim rather than inventing an idea that some law ought to cover some imagined problem.

Yes, it may be RESPA. The legal foundation is that an undisclosed party funded the note. The Note does not reflect the parties to the transaction. The true lender may have an encumbrance. The title is unperfected. Who can foreclose?

This is not a show-me-the-note issue or a denial of an obligation.



"Let me make myself perfectly clear" Richard M. Nixon

 

[FlyingRon]

Yes, it may be RESPA. The legal foundation is that an undisclosed party funded the note. The Note does not reflect the parties to the transaction. The true lender may have an encumbrance. The title is unperfected. Who can foreclose?

The parties to the transaction are you and the lender who passed over the money at closing. The person who gave the lender the money is not a party to the note. Any subsequent assignees are, but they don't need to be disclosed at signing. As long as a contract doesn't prohibit assigning (and I guarantee your mortgage does not), then it can be. In fact, I doubt what you claim has happened, happened at all. The contracts are assigned on a secondary market, they're never "funded" originally by other parties. The lending bank has to cover it for the short term between the closing and the assignment. I can tell you that can be a very short time indeed (less than a month).

I don't know what you're fishing for here, but other than to randomly assert impropriety, and throw around names of laws without any citation as to what you think applies, you haven't given a shred of principle to stake a claim on.

 

[sfosmith]

The parties to the transaction are you and the lender who passed over the money at closing. The person who gave the lender the money is not a party to the note

I agree if the money passed through the lender and entered as their funds. But that is not the case here. The party that passed the money at closing was an undisclosed lender. The wire transfer went from a Wall Street warehouse bank directly into escrow. The money was not the local lenders, nor was it borrowed. If it was borrowed, it would have to show on the Mortgage Banker's (MB) balance sheet. I expect, with further discovery that a secondary contract exists between the MB and the warehouse bank. There was a contract but the MB lent no money, only their California license for a fee. They were legally a straw man. The warehouse had an encumbrance and as a lender was not listed on the HUD 1. It is that I allege to be illegal.

The rest of what you say is correct. The docs clearly state they may assign to an unlimited number of parties that do not need to be disclosed in advance. But assignment is not the issue.

You doubt what I claim has happened. My only question is, what if it did and can be proven in court?

 

[FlyingRon]

Who transferred the funds into escrow doesn't matter either.

Your contract is with the lender and any assignees. You keep alleging that there's not allowed to be any contract between the lender and other parties, but you present no law that outlaws that or even requires them to tell you that it is happening. There is ALWAYS going to be a secondary contract between the lender and someone else. Where do you think they are going to get the money? Do you think the bank owns all the money they are lending out? Not going to happen. In the old days, it was money they held for depositors. These days, it's going to be in the form of some investment contract (mortgage backed securities, etc..).
The fact that they have an obligation to someone else does not make an encumbrance on you or the property.


You've not said anything compelling as to why you don't have a valid contract.
Even if you were to somehow invalidate it (unlikely), you do know you are still responsible for returning the principal?
What are you trying to accomplish?

 

[tranquility]

You doubt what I claim has happened. My only question is, what if it did and can be proven in court?

Did you actually read what was at the link or did you just read the summary on the URL?

 

[sfosmith]

You've not said anything compelling as to why you don't have a valid contract.
Even if you were to somehow invalidate it (unlikely), you do know you are still responsible for returning the principal?
What are you trying to accomplish?

I'm the one asking questions. I don't have enough to make a case yet. I do know, as I said above, that the Judge in my court said that If the lender did not pay consideration, then there is nothing to transfer.

If a loan was securitized, and the beneficial owners of the note are the investors in the pool who bought shares, and if the Trustee of the Security has the right of enforcement, shouldn't I have the right to object to a Bank alleging to have the right to foreclose?

I mean, is there something sacrosanct about mortgage documents that we dare not challenge them or the ones who show up waiving an assignment from MERS?

 

[FlyingRon]

I'm sorry, it's impossible to answer your question with the limited information you care to divulge. We have to ask questions to try to come up with the information we need to answer you.

What judge? What action?

If you can't be straight with us, we can not help you. Good day.

 

[tranquility]

Once again, for the slow readers, the court is not going to invalidate most of the loans made in the 2000's. The OP's theory is listed at the link I provided, even though he doesn't seem to understand that.

Find a case supporting the contention.

 

[You Are Guilty]

From the link "... it would seem the case might be better if you have a traditional and historically recognized legal theory..."

Translation: "But for the fact that this argument has never worked before, it works great."

Anyway, what state is all this nonsense in?

 

[sfosmith]

What judge? What action?

If you can't be straight with us, we can not help you. Good day.

My litigation is current. I have to avoid identifying the judge and case for the time being. As for a TILA or RESPA action, I haven't filed a case.

Once again, for the slow readers, the court is not going to invalidate most of the loans made in the 2000's. The OP's theory is listed at the link I provided, even though he doesn't seem to understand that.

Yes it was printed as a theory but there was no answer. The site run by a foreclosure lawyer drumming up business.

Once again, for the slow readers, the court is not going to invalidate most of the loans made in the 2000's.

I didn't say the note should be invalidated. The question is, can a servicer's foreclosure be stopped until these issues are sorted out?

From the link "... it would seem the case might be better if you have a traditional and historically recognized legal theory..."

Translation: "But for the fact that this argument has never worked before, it works great."

Securitization is relatively new. If Wall Street figured out a non "traditional and historically recognized" way of making a lot of money, screw up all the land records with clouded titles, and collect bailouts, insurance, CD Swaps why can't the defendant respond appropriately. Novel table funding methods violating federal laws providing undisclosed fees merit creative legal responses.