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Maine Foreclosure Mediation Law might be the model for the country.

Is foreclosure mediation going to prevent millions of foreclosures over the next few years?

Probably not, according to a new study released this afternoon by the National Consumer Law Center (NCLC) that looks at how effective 25 foreclosure mediation programs in 14 states have been at preventing foreclosures.

Like President Obama’s HAMP program, foreclosure mediation is a great idea that just doesn’t seem to be taking hold. In fact, most homeowners don’t even know it exists.

Foreclosure mediation programs were designed to help homeowners who were about to be foreclosed upon aren’t working in part because the net present value (NPV) – calculations lenders do to decide whether loan modifications or foreclosures will be more profitable to the lender – aren’t being disclosed to the borrower, along with a lot of other seemingly helpful information, according to “State and Local Foreclosure Mediation Programs: Can they save homes?.”

Geoffry Walsh, a staff attorney with NCLC and author of the study, says these foreclosure mediation programs are surprisingly ineffective.

“There are barriers that preclude homeowners from participating” in foreclosure mediations, Walsh said in a press conference earlier today.

“Under most of the foreclosure mediation programs, servicers have all the discretion and homeowners have no power. If the programs demand little or no accountability from servicers, it’s likely foreclosure mediation programs will go the way of the federal foreclosure prevention program” and fail, he predicted.

Walsh said that foreclosure mediation programs could really help homeowners who have been confused by loan modification options or rebuffed by their lenders. The Treasury Dept. could choose to enforce the contracts it has signed with the loan servicers but has chosen not to.

“What programs require are enforceable obligations, structures and duties that few have implemented so far,” Walsh noted.

What Walsh doesn’t understand is why lenders can’t see that they’re losing much more money by letting properties go into foreclosure than by doing loan modifications.

”We looked at the promise of these programs. Investors and homeowners lose substantial amounts of money in foreclosure. Up to two-thirds of the value of the investment is lost when the foreclosure is completed,” Walsh said. But loan modifications only cost investors 5 to 10 percent of their investment.

That may not be a full NPV calculation, but it’s clear to me that it’s better for investors, lenders and homeowners to do a fast loan modification than allow a home to join a few million other foreclosed homes on the market.

“The inability of homeowners to communicate with holders of securitized mortgage obligations has been a significant barrier to completing affordable (loan) modifications that might prevent foreclosures or minimize losses and keep more homeowners in their homes,” Walsh said.

Fixing Foreclosure Mediation Programs

Walsh’s study suggests foreclosure mediation programs include the following:

Require loan servicers to give homeowners the affordable loan modification calculations they made and the results of the NPV tests. Only Maine’s foreclosure mediation programs require this.

  1. The foreclosure mediation programs should require servicers to produce all related documentation, including pooling and servicing agreements, appraisals, and loan payment histories that would facilitate options other than foreclosure.
  2. Require servicers to meet these foreclosure mediation obligations in good faith or otherwise be subject to sanctions. Walsh said that loan servicers have received substantial benefits from the federal government and cash incentives to do loan modifications rather than foreclosures and so should operate in good faith, as a defined legal standard.
  3. Servicers should prove they have the standing to close on loan modifications and have the authority to negotiate loan modifications.
  4. Loan servicers should document that they’ve looked at alternatives to foreclosure, including loan modifications, other state or federal workouts, and short sales.

Can foreclosure mediation programs make a difference?


Bearer Paper, the new Parlor Trick and the Holder in Due Course.

*Disclaimer: The following essay is not to be construed as legal advice, consult an attorney for that stuff.

What is Bearer Paper and why is this relevant to the foreclosure defense of borrowers in distress and on the verge of homelessness?

Bearer Paper is the ingenious method that bankers and their cohort Council have developed to enrich the players involved in the Securitized mortgage game. When is comes to Note Endorsement, it used to be very easy to determine who the real party Holding the Note is at the time of filing a Complaint for Foreclosure. Order Paper was often used when transferring ownership of the Promissory Note, hence the language, “Pay to the order of Cuntrywide Racketeers, without recourse.” stamped on the back of a negotiated instrument. When this endorsement is presented on the back of a Note or in an allonge accompanying it, along with a Mortgage or Deed of Trust, which is the mechanism by which a Loan is secured by real estate.

Bearer Paper is indorsed like this, “Payable to the order of ” That’s it. There is no party receiving this instrument, in Due Course. What does Due Course mean? The Holder in Due Course means that a party who follows the UCC Sec. 3 will have Affirmative Defenses as a NEW CREDITOR not responsible for any misrepresentation or deceit in the origination to the Borrower. there must be a party accepting this negotiable instrument For Value, they paid for it, in Good Faith, which means the Note has not been “dishonored”.

The Jury is out, on whether a party must be Holder in Due Course, to assert its right as a Holder in a foreclosure complaint, but it goes without saying, being a Holder in Due Course, is where the Foreclosing Party wants to be, as it brings with it many affirmative defenses against a wronged homeowner.

No matter from what side of the argument you may lie, it is evident that endorsing a Note in Blank, is the easiest way to enforce a Note that may have been passed around “like a whiskey bottle at a frat party”. Endorsing the Note in Blank, allows anyone who brings forth a Complaint of Foreclosure to purport they are the Real Party in Interest.

The more I study the UCC, the more it appears that the Bearer Paper tactic is just a clever parlor trick, another slight of hand convoluting the original intent of the UCC law. It is clear that a Blank Endorsement was meant only for cashier’s checks endorsed by writing the name only of the drawer, to make it easier for the draft to pass through the elaborate bank clearing houses.

It is not ethical, for a Promissory Note, attached to a Mortgage Deed of Trust, to be endorsed in Blank and scanned into an “Electronic Registry Systems” for anyone with a title to “servicing rights” and a membership code, to pass themselves off as a Holder in Due Course or a Holder of Bearer Paper. It is not morally not ethically nor lawfully sound jurisprudence, it is a blatant disregard for the Court’s Civil Procedure. A charade, a trick, a game of poker, where the gambling pro is allowed to bluff with a photocopy of the Ace up his sleeve.

Is the Note Endorsed, Indorsed or Allonged? Probably none of the above…

If you have been served a Foreclosure Complaint or have been foreclosed on in the past, DON’T GIVE UP!

Chances are, because of the Nature of Securitization, that your foreclosure is being prepared and executed by the WRONG PARTY IN INTEREST.

Get a Mortgage Audit to find out the real FACTS, and not the purported allegations that the Plaintiff’s attorney is attempting to pass off to the Court as the truth.


Thats right, a mortgage cannot be assigned electronically, or even back-dated or assigned after the fact.

Quite simply, a Mortgage is never sold, it’s the Promissory Note that is sold, for valuable consideration, and this Note must be endorsed like a Cashier’s Check being cashed a bank. The endorsement must be “paid to the order” of the party, or company, that is buying it, and then and ONLY THEN, can they record a Mortgage Assignment in the local county records.

The Assignment of Mortgage is merely Public Record of the changing of hands of a Promissory Note, the debt, and without such a Record there can be NO FORECLOSURE or repossession of someones home, whether or not there is evidence of a Default.

Got It? :p It’s actually not very complicated at all.

Inside the Foreclosure Fight – my advice to Attorney Ryan

Atty Ryan


The questions pertaining to case law on Trusts/Remic standing as legal entities is no different than most “standing” related cases. Neil’s said many times that these Pension Hedge Funds who are the true “holders” in due course WILL NOT come forward therefore the bulk of your questions regarding detailed case law about securitization cannot be addressed. They simply won’t be compelled to produce real evidence if they don’t implicate themselves by attaching to the lawsuit as a party in interest.

When you ask about the Judge granting standing using the Note and Assignments, you need to be more clear.
1. Is the Note in the name of the same party acting as Plaintiff?
2. Was the Mortgage properly assigned and before the file went to foreclosure?
3. Was Power of Attorney filed allowing Plaintiff to act on behalf of Pretender Lender?
4. Was the Note properly negotiated according to UCC Code? (Owning the Note is different than holding and vice versa)
5. An assignment of Mortgage is not an assignment of the Note regardless of what the Plaintiff states in their Material Statements and Admissions.

Raise all these questions to get a hearing and avoid Summary Judgment. Summary Judgment must only occur when no issue of material fact exists.