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David Mills
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Having been involved in a number of these cases in TN, it still baffles me the lengths the courts will go to, either on procedural grounds or on evidentiary grounds, to avoid deciding or addressing the substantive issues of these cases. Part of the real problem seems to be that long before the note and deed of trust gets shipped off to any trust, the original note is destroyed, and now in many of these cases the original note can not be produced. Perhaps even worse is that photoshopped copies of the note are being produced and alleged to be the real thing. Setting aside the question under UCC 3-309 of whether a copy of the note can be proven to be enforcebable, ( substantial burden of proof by the way under 309) copies also raise the question of valid endorsements. Theoretically these securitized notes should be endorsed by the original lender to fannie mae, then to the trust, then back to fannie mae if fannie mae acquires the note via a guarantee, and then finally to the servicer who is attempting to foreclose. When the notes are scanned into a computer after the closing of the sale and then shredded, which seem to be the modus oeprandi, I don't know how endorsements can be tracked. Determining holder status on a copy of a note is probably down right impossible in a securitized situation because of the lack of endorsements. Yet lenders come into court and complain that the homeowner just wants a free house. And judges are not about to give away free houses. So they go overboard trying to find a procedural or evidentiary way of making the cases go away. It just keeps happening because that is all the courts can do unless the case has a truly unique set of facts that can be easily differentiated from the common foreclosure situation. Of course what you are left with is a real estate industry that is based on defective notes and on deeds of trusts that, when MERS is involved, now produce a private recording system making the public recording system worthless. MERS as beneficiary or nominee on a deed of trust gives no notice to the public whatsoever of who owns the note and who needs to be paid in order to get a valid release. It is a trust me situation, if ever there was one, but the courts seem to be saying we just have to trust the banks because we can't let people get houses for free.
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Jun 23, 2012