You have the power.
To The States:
During The Depression, States put “hard stop” foreclosure moratoriums on banks and other institutions that were attempting the same sort of thing that is being done now. Florida in fact still has a law on the books that permits the bondholders to petition the court to set up a creditors committee, redirecting all payments through the Court Clerk until issues of standing are resolved. This was put in place in the aftermath of the famous “Swampland” fiascos in this state.
Since land title issues are issues of State Law, the States have the power to put a stop to this crap. They have the power to declare that judicial or not, foreclosures without hard proof of standing and conveyance may not proceed.
Real property – the family home – is the bedrock of American Society. While it is true that most of the people being foreclosed upon and evicted did not pay, what is also true and now documented by statements made under oath is that The Banks intentionally loaned people money they knew they could not pay back. This, under long-standing precedent both in common law and in fact recognized in the UCC, makes the debt avoidable.
This is not about free houses. It is about the rule of law. Our federal government has studiously refused to act as required by that law when it comes to safety, soundness and prudence in lending matters by our nationally-chartered banks.
But the matter of land titles and security interests in them is a matter of state law.
The States must act – right here and now – in the following fashion:
All foreclosures must be stayed until the following procedure is completed.
All entities seeking to foreclose, irrespective of whether it is a judicial state or not, must come to court and prove up the provenance of their foreclosure. Specifically, they must be forced to prove all of the following:
They are the actual holder in due course of the note, and can prove it with the original paperwork containing all allonges and endorsements from the originator to themselves.
All those endorsements were made in due course of business, and not now as a “backdated” event in an attempt to mislead the justice system.
The note, at the time it was originated, was negotiated in good faith. That is, it did not violate the implied covenant of fair dealing and there was a reasonable expectation that the terms of the note as originally drawn could be complied with to completion. This means that the original loan file in total must be presented to the court and subject to challenge by the debtor as to its provenance; the debtor must be given the opportunity to show that the debt is avoidable under the Uniform Fraudulent Transfer Act or violation of the implied covenant of fair dealing that attaches to all contracts and cannot be waived. Since we now know due to under-oath testimony that Citibank’s chief underwriter knew and reported that 60% of all origination was defective in 2006 and 80% in 2007, there is a strong presumption that loans made in these years, at minimum, breached this covenant.
If all of these cannot be shown, then the foreclosure must be avoided. This will not, in most cases, result in a free house. If the note is not actually owned and properly endorsed by the party claiming a security interest, then they cannot foreclose at all, and the real party at interest will have to step forward. If that real party is a securitizer (or an originator who is bust, and their successor or bankruptcy trustee holds the paper) then they must come to seek the remedy desired. If they have been paid in full then the MBS trust who was defrauded (who believed he had the note but in fact does not) must first pursue recovery of the funds from the securitizer or originator, so as to restore that party’s standing. Once they have done so they can come to court and run the same three-step gauntlet.
If the note cannot be proved up to have met the covenant of fair dealing in the inducement then the debt is avoidable and must be so-ruled. This too does not result in a free house, but it does result in the debtor being released from the debt without damage to their credit. They lose their home, but they never really owned it anyway. The creditor is left with the home, but has no suit-at-law to recover from the debtor, since he dealt with the consumer in bad faith.
There is precedent for this – a very similar thing was done during The Depression. State and local governments refused to evict and told citizens to stay in their homes, “foreclosure” or not. With no ability to evict the madness stopped until the truth of the claims made could be sorted out. This must occur – we are not and will not get honesty from Washington; it must come from the State and Local governments.
To The People:
You must make it known to your state and local governments that this is what you demand. You must get them to back you, not the big financial institutions. This will likely mean, at some point, civil disobedience – that is, refusing to leave when allegedly “evicted.” It means enlisting your local county Sheriffs, who you vote for in less than two weeks.
It means enlisting your County Commissions, pointing out that if they side with you, and not the brigands, their tax revenue will continue – but if they don’t, it will not.
It means enlisting your neighbors, so they understand what’s going on, who destroyed their neighborhoods (the big banks – not you and your neighbors themselves.)
And it will mean organizing boycotts – refusing to do business with anyone who presents a check from one of the big banks, refusing to do business with a local business that uses one of the big banks to process their credit card transactions or clear checks, in favor of those local businesses that use local, legitimate, honest banking institutions.