His study of the meltdown leads him to the puzzling matter of "derivatives," the mysterious financial instruments involved in the bank collapses. In the film, Moore asks three "experts" to explain a derivative to him. They can't.
"Nobody wants to look stupid, " he told me, "so everybody sort of nods their heads and goes, Oh yeah, yeah, I understand that. You're not supposed to understand it. It's like a snipe hunt on Wall Street.
"You hear commentators blaming the shiftless people who took out the mortgages: They're living beyond their means! They really pushed that after the crash -- that these low income people and their subprime mortgages did this to us. It had a racial overtone in it and was really a little creepy. What they never say is, the number one reason people go bankrupt in this country is medical bills.
"Elizabeth Warren, the law professor from Harvard, she has taken those like refinancing contracts into her law class, and she hands them out she says, Okay, tell me what the interest rate is. You read the 50 pages, you can't figure it out. A law student or professor can't figure out how it's gonna balloon. It's deliberately confusing."And here is a remarkable piece of practical advice:
Whether or not you agree with Michael Moore, he has one piece of invaluable advice in his new film, "Capitalism: A Love Story." If a bank forecloses on your home, ask them to prove their ownership by producing a copy of the mortgage.Is that true? Has this tactic ever been put to a real world test?
In the film, Marcy Kaptur, the Congresswoman from Toledo, says, “Don't leave your house if they try to throw you out.” Why not? "In many cases, they can't," Moore explains, "because it's already been cut up, chopped up and bundled and rebundled and a piece of this mortgage is sitting in China."
Yes. See here and here. The following comes from a lawyer named Michael Patrick Rooney:
When you say "produce the note" what you are doing is challenging the bank's assertion that you owe it money, that it has a mortgage on your house, and that it has the right to foreclose on you at all. One attorney has estimated that nearly 50% of mortgages have been lost or destroyed in the carnage of all the selling, pooling, servicing, tranching, and defrauding that went on in the years from 2001-2008 in the American Secondary Mortgage Market.The best point at which to try this ploy is during the discovery phase of disclosure proceedings. Conversely, you could list the mortgage as unsecured debt during bankruptcy proceedings. Always remember that this tactic is a gamble; you cannot rely on it.
Also keep in mind that -- as in all other matters involving foreclosure or eviction -- all you can really hope for is to stall for time. In all likelihood, the bank will eventually find the note, even if the process takes months.
In my philosophy, "stalling for time" is simply another way to say "life."
7 comments:
Great post, thanks.
I wish I'd known this in time to help a friend and neighbor stall their foreclosures.
There was an interesting story in the NYTimes a couple of days ago about a recent Kansas Supreme Court case that discusses just why it might be difficult for someone to foreclose on your mortgage. (Hint: check with your County Clerk to see if a company called MER shows up in your records.)
Everywhere I have lived - they record the original mortgage in the county records (that's where MERS sometimes shows up).
Are you asking the company to produce the original mortgage? That might be hard for them to do, but there is usually a recorded record and if there is not release recorded after the mortgage is recorded.....it's hard ot prove you don't have one!
The issue, Sha, isn't whether the mortgage exists, it's whether the company seeking to foreclose is either on the mortgage document or has an adequate paper trail proving ownership at law that is acceptable to the courts. The Kansas Supreme Court case spells it out. Where banks as lenders have on sold the risk in bundled products the final bearers of that risk are going to have some difficulty.
Actually, the bank may not have time to find the note. In a highly pugbicized (among law geeks) case in Ohio last year, the judge threw out a whole pack of mortgage filings submitted by DeutscheBank, saying the bank didn't have a single piece of paper proving that the folks they were foreclosing on actually owed them any money. The judge in that case also had some pretty choice words for the tactics of banks and their "condescending" lawyers who act as if judges are too stupid to understand complex financing schemes--as he noted, the one thing judges really do understand is proper court procedure, which means, in this case, showing the paperwork to prove your case. D'OH!!
And yes, "foreclosure defense" and the "produce the note" strategy are being used, and working. Even if it's only a delaying tactic, it's definitely worth pursuing.
The case is In re Foreclosure Cases, 2007 WL 3232430 (N.D. Ohio 2007)
Haven't checked to see if an appellate court overturned the ruling. The judge was Christopher Boyko.
Couldn't the bank simply argue that payments you have already made to them constitute proof/an admission on *your* part that they are the owner (or else why would you have paid them?)?
Sergei Rostov
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