About a month after Washington Mutual Bank made a multimillion-dollar mortgage loan on a mountain home near Santa Barbara, Calif., a crucial piece of paperwork disappeared.
But bank officials were unperturbed. After conducting a “due and diligent search,” an assistant vice president simply drew up an affidavit stating that the paperwork ”” a promissory note committing the borrower to repay the mortgage ”” could not be found, according to court documents.
The handling of that lost note in 2006 was hardly unusual. Mortgage documents of all sorts were treated in an almost lackadaisical way during the dizzying mortgage lending spree from 2005 through 2007, according to court documents, analysts and interviews.
Now those missing and possibly fraudulent documents are at the center of a potentially seismic legal clash….
Banks are legally and morally entitled to the money they lent out or to the property if the debtor is in default. They are not entitled to run roughshod over the law, trample due process rights and to engage in broad-based perjury and forgery to get their way. Which brings me to what I have probably posted 30 or more times before… Banks are the enemy. If you choose to play cards with the devil, don’t be shocked when you discover he cheats.
Sorry, If the bank looses the note that’s their problem. The Banks must follow the law the same as everyone else and if they hold others to the letter of the law then they should be held to it as well.
Here is the money quote: “The misbehavior is clear: they lied to the courts,†If I were a judge I would require strict proof from the banks. Real property law requires strict documentation for a reason and, when it works to their benefit so do, the banks.
I don’t care if they loaned trillions, if they can’t produce the notes too bad.
If I were a judge and I knew that the bank representative was lying, I would order the bailiff to arrest that person on the felony charge of perjury. Any protests would be met with a ruling of contmempt of court.
“Show me the note” is a myth arising out of a misunderstanding of some court cases. The note is generally the best evidence of the debt, but it is not the only way to prove it. That’s what recording statutes are for. In California and other states that have non-judicial foreclosures, it is not necessary to produce the note. However, it is necessary to own the debt that is being foreclosed. If ownership is challenged or automatically in issue, as in bankruptcy, the creditor must prove ownership in some manner.
[b]Common Sense Exam[/b]
You lend your deadbeat cousin Vinny $20,000.
He gives you a letter promising to pay you back.
Then your house burns down, and unfortunately Vinny’s letter is burned up in the fire.
Vinny then tells you he doesn’t have to pay you back.
What should be the result?
No, the money quote is “Now those missing and possibly fraudulent documents are at the center of a potentially seismic legal clash…” because it is the lawyers that are salivating about the potentially legal clash resulting in a potentially enormous sum of legal cash.
#6 Jim, in that case you’re SOL. Your only option is to get cousin Guido to threaten to break Vinny’s legs if he doesn’t pay up. That’s what the banks will be doing soon. They’ll threaten to blow up the economy if the courts don’t play along and stop asking “show me the note”.