ibanez decision

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"Manus haec inimica tyrannis ense petit placidam sub libertate quietam"LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLFI LE NOTES:1This file is best viewed after downloading as a pdf . It is Bookmarked in Adobe for reviewing the IBANEZ Case in chronology.2A rudimentary subset of Commentary isincluded to summarize the case to thepoint of Decision.3The actual files ARE NOT in sensibleorder. But after downloading, if the"Adobe Bookmarks" are used to navigate the material it flows together properly.LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLC - O - M - M - E - N - T - A - R - YI BANEZ DECI SI ON ANALYZEDPosted on January 7, 2011 by Neil Garfield see CNN Repor tandVi deoBANKS DUG THEI R OWN GRAVE ON QUI ET TI TLEACTI ONWhat evert heysayw i l lbe suspec tf r om nowonsee i banez-huge -w i n -f or -bor r ow er s-i n-massac huset t s-non -j udi c i al -st at e-hi gh -c our tTheyneverdi d t he assi gnmentandl at erw hen t heyt r i ed t oc or r ec tt hatpr obl em t heyf ound t heyw er ei n t he posi t i on ofvi ol at i ngt he t er msspel l ed outi n t he PSA w her ei n t heassi gnmentc oul dbe ac c ept ed by t he pool as t o t i me,c ont ent(non-per f or mi ng l oans) et c .Asoft hi s poi nti n t i me,t her e ar e appr ox i mat el y 50 mi l l i on t r ansac t i ons overt hepastt en year s t hatf i tt hi s f ac tpat t er n. Al loft hem havef at aldef ec t s i n t i t l e. Nei lGar f i el dIn September and October of 2008, U.S. Bank and Wells Fargo brought separateactions in the Land Court under G.L. c. 240, 6, which authorizes actions to quiet orestablish the title to land situated in the commonwealth or to remove a cloud from thetitle thereto. The two complaints sought identicalrelief: (1) a judgment that the right,title, and interest of the mortgagor (Ibanez or the LaRaces) in the property wasextinguished by the foreclosure; (2) a declaration that there was no cloud on title arisingfrom publication of the notice of sale in the Boston Globe; and (3) a declaration that titlewas vested in the plaintiff trustee in fee simple. U.S. Bank and Wells Fargo eachasserted in its complaint that it had become the holder of the respective mortgagethrough an assignment made after the foreclosure sale.EDI TORS NOTE:The Bank s t hemsel vest houghtt hey hadi tmadeandf i l ed w hatw ehave suggest i ngt obor r ow er s al aw sui tt oqui ett i t l e,c l ai mi ngt he f or ec l osur e w as val i dandt hatI banez w as di vest ed f r omt i t l e asar esul toft he f or ec l osur e. The Supr emeCour ti nMassac huset t ssai d t her e i snot hi ng w r ong w i t h anac t i on t oqui ett i t l e i t s j ustt hatt he bank sl ose andI banez w i ns.The Bank s f ai l ed t oest abl i sh ac l earc hai nshow i ng t hatt hey ac t ual l y andl egal l yhadt her i ghtt of or ec l ose meani ngt hatt he mor t gage w as pr oper l y assi gnedt ot hem.Uponf ai l ur e t odot hat , t he Bank s w er e f ound t ohave vi ol at edMassac huset t sl awbyf or ec l osi ng onpr oper t yt hatw as notsubj ec tt oanyl egalc l ai m byt hem.Theyhadnor i ghtt ot i t l e andt her ef or e t heyhadnor i ghtt oqui ett i t l e.I n t he endt hi s w as si mpl eappl i c at i on ofage -ol dt i t l e ex ami nat i on.AsMaxGar dnerpoi nt s outi n hi sABCDE appr oac h,you ei t herhave i toryou dont . The Bank s dontandi n myopi ni ont hey c antf i xi tbec ausef ac t ual l yt hey di dever yt hi ng w r ong, t hey have al r eady beenc ompensat ed, andt hey have c heat ed notonl yt he bor r ow er s,butt hei nvest or s w ho putupt he money.Thust hi s dec i si on hel psbot hi nvest or s w ho f i l ed damagesui t s agai nstt he i nvest mentbank er s andbor r ow er s w ho f i l ed sl anderoft i t l e andot hert or tandst at ut or y c l ai ms.Thi s r ul i ngbyt he Supr emeCour tc or r obor at es t he f i ndi ng ont hesepagest hatt he pool sar e andal w ays w er e EMPTY.The bi g poi ntt o t ak e aw ayf r om t hi s dec i si on i st hatt heBank smustpr ove t heyhave t he r i ght i tw i l lno l ongerbepr esumed j ustbec ause t heyhave some paper w or kofdubi ous aut hent i c i t y andgi ve an or dert o f or ec l ose.Tr ust eesar ound t he c ount r ybet t ert ak e not i c e t hati ft heyr ec ei ve ani nst r uc t i onon a Deed ofTr ustt hatt heyshoul d f or ec l oset heymay be a t ooli n a f r audul entsc heme.The Ibanez mortgage. On December 1, 2005, Antonio Ibanez took out a $103,500 loanfor the purchase of property at 20 Crosby Street in Springfield, secured by a mortgageto the lender, Rose Mortgage, Inc. (Rose Mortgage). The mortgage was recorded thefollowing day. Several days later, Rose Mortgage executed an assignment of thismortgage in blank, that is, an assignment that did not specify the name of the assignee.[FN11] The blank space in the assignment was at some point stamped with the name ofOption One Mortgage Corporation (Option One) as the assignee, and that assignmentwas recorded on June 7, 2006. Before the recording, on January 23, 2006, Option Oneexecuted an assignment of the Ibanez mortgage in blank.EDI TORS NOTE:Thi s i sac l assi cc ase ofasham t r ansac t i on w her eRose mor t gage w as nott he sour c e off unds,w as nott he l ender ,andneverhandl edt he moneyex c eptf orr ec ei vi ng af ee f orpr et endi ng t obet he l ender .The Mass. Cour tdec i si on goest ot he hear tofhowsec ur i t i zat i on w as pr ac t i c ed w her e t he moneymoved andt hedoc ument s di dntandt her e w as nodi sc l osur e orpr opernot i c e.Theef f ec tofnami ngnobodyoranomi neew i t h noi nt er estorpow ert odoanyt hi ng (w hi c hi st he same asi dent i f yi ng nobody)i st oi nval i dat e t het r ansf erabi ni t i o.Ther ei snot r ansf erandt her e i snot hi ng t hatanybody c andot omak ei tat r ansf erandt her e i snot hi ng anyoneneedst odot ovoi d t he t r ansf er bec ause i tdi dnotoc c ur .Whatyou have l ef ti sahomeow nerw hose t i t l e r ec or d i sc l ouded(Cl ear ed upmost l y byt hi s c our tdec i si on)w her e t he onl yr ec or d l enderw as nott he f ac t uall ender .The not e t her ef or e doesnotdesc r i be t het r ansac t i on andt he mor t gage, seek i ng t opr ovi de sec ur i t yf ort he not e,i ssec ur i ng anobl i gat i on t hatdoesnotex i st . The obl i gat i on,i foneex i st s, ar i ses byvi r t ue oft he r ec ei ptofmoneybyt he bor r ow erort hepaymentonhi sbehal ff r om asour c e off undst hati st he l ender .Thatac t uall enderi snotdesc r i bed i n t he c l osi ng doc ument s andt hei dent i t y oft he t r ue l enderw as i nt ent i onal l y w i t hhel d f r om t he buyer ,depr i vi ng hi m oft he r i ghtt oc hoose w hom hedoesbusi nessw i t h.Thust he REAL obl i gat i on hasNO DOCUMENTATI ON. And undert hi sdec i si on pr et enderl ender s c annol ongersubst i t ut e f abr i c at eddoc ument at i on f orr ealpr oof .The f ac tt hatt hi s dec i si on t ookpl ac ei nast at e w her e c our tac t i on i snotr equi r ed t oc ommenc ef or ec l osur emeanst hatt he dec i si on i sappl i c abl et oALL st at es.I n pl ai nl anguage,t he bank sar e sc r ew ed. According to U.S. Bank, the assignment of the Ibanez mortgage to U.S. Bank occurredpursuant to a December 1, 2006, trust agreement, which is not in the record. What is inthe record is the private placement memorandum (PPM), dated December 26, 2006, a273-page, unsigned offer of mortgage-backed securities to potential investors. The PPMdescribes the mortgage pools and the entities involved, and summarizes the provisionsof the trust agreement, including the representation that mortgages will be assignedinto the trust.EDI TORS NOTE:The Massac huset t sCour tadept l y pi c k edupont hepr ac t i c e of sel l i ngf or w ar d,ac onc eptt hatIhave beenspout i ngaboutf orovert hr ee year s. I tmak esal lt he di f f er enc e i n t he w or l d.Thef ac ti st hati n mostc ases w hen t he i nvest or s advanc ed f unds,t her ew er e nomor t gages, t her e w as noteven anyappl i c at i ons f ormor t gagest hatw er e appl i c abl et ot hatmoney.The i nvest or s w er e sol d shar es i nempt y pool st hatw er e goi ngt obef i l l ed l at erby mor t gagest hatw i l lbeassi gned.The t er ms oft he assi gnmentw er e setf or t husual l y i nt he PSA. Theyneverdi dt he assi gnmentandl at erw hen t hey t r i ed t oc or r ec tt hatpr obl em t hey f ound t hey w er e i n t he posi t i on ofvi ol at i ngt he t er ms spel l ed outi n t he PSA w her ei n t he assi gnmentc oul dbeac c ept ed byt he pool ast ot i me,c ont ent(non-per f or mi ng l oans)et c .As oft hi s poi nti n t i me,t her e ar e appr ox i mat el y50mi l l i on t r ansac t i onsovert he pastt en year s t hatf i tt hi s f ac tpat t er n. Al loft hem have f at aldef ec t si n t i t l e.At the foreclosure sale on July 5, 2007, the Ibanez property was purchased by U.S.Bank, as trustee for the securitization trust, for $94,350, a value significantly less thanthe outstanding debt and the estimated market value of the property. The foreclosuredeed (from U.S. Bank, trustee, as the purported holder of the mortgage, to U.S. Bank,trustee, as the purchaser) and the statutory foreclosure affidavit were recorded on May23, 2008. On September 2, 2008, more than one year after the sale, and more than fivemonths after recording of the sale, American Home Mortgage Servicing, Inc., assuccessor-in-interest to Option One, which was untilthen the record holder of theIbanez mortgage, executed a written assignment of that mortgage to U.S. Bank, astrustee for the securitization trust. [FN14] This assignment was recorded on September11, 2008.EDI TORS NOTE:See howt he c r edi tbi d w asmi sused.USbankw asnota c r edi t orbutw asal l ow ed by t het r ust ee/auc t i oneert o ac c epta di r tl owbi d f r om i t sel ft o t r ansf er t i t l e a t r ansf ert hatt he Massac huset t s Supr emeCour tsai d neverhappened bec ause t heydi dntow n t hepr oper t y.See al so howt he Cour tpi c k ed up on t he i ssuest hatl aw yer s al lovert he c ount r