http://www.realtown.com/DiabloValley/gro....



OMG! Just when you think you've seen it all, along comes a new horror story that makes the thought of doing short sales even more disgusting than before!!

Because of our intense hatred of all banks (BofA and Chase head the top of the list) we decided to stop doing short sales, and most conventional real estate transaction last summer and have been buying and flipping properties instead!

The last short sale we did was one we were referred to in October of 2009 (no good deed goes unpunished!!). The client (Tom) had recently lost his job due to downsizing and, to make matters worse, his mother had been diagnosed with a life threatening disease. There was no way we could turn this opportunity down to assist him so we took the listing on his one bedroom condo in southern California. He had purchase it in 2007 for $224K and we figured the current value was about $125K. We put it on the market and got an offer for $130K within a couple of weeks! Tom moved out of state to assist his mother in her remaining days on earth and we were happy to have an offer. After 5 months of negotiating with BofA (loan servicer) with 2 different negotiators, we finally got approval for a sale price of $123k!! (First negotiator said it was worth $180K!!!- Surprise)!

We closed the deal in April, 2010 and both the Seller and Buyer were ecstatic! All was right with the world!

Fast forward to July 2011! Last week, we received a document from our Seller that he had received. Are you sitting down? It was a LAW SUIT on behalf of MERS and Fannie Mae (Plaintiffs) against the Seller and Buyer (Defendants) and a possible 23 other defendants, (Does) who are at this point unnamed!

The Law Suit maintains that: ------------"The Substitution of Trustee and Full Reconveyance on the County records which purports to reconvey MERS's interest in the property is a mistake and was not properly prepared or recorded by ReconTrust. An actual controversy has arisen and now exists between Plaintiffs and Defendants concerning their respective rights and duties in that Plaintiffs contend that the Substitution of Trustee and Full Reconveyance is a mistake and, therefore, of no force or effect which should be stricken from the public records and that Fannie Mae's Deed of Trust is valid and enforceable.!"

WTF!!!! I thought that the movie Too Big To Fail was unbelievable but this is ABSOLUTELY INCREDIBLE!!! Here is MERS (those bastards who were identified on 60 minutes as putting phony signatures on thousands of mortgage documents) maintaining that Recon Trust (not a party to the suit) MADE A FRIGGIN MISTAKE? They did not properly prepare or record the reconveyance of the loan!!!

To top it off, the scum sucking lawyers (and I apologize to any scum out there that may be offended by the comparison) have filed a LIS PENDENS on the property such that the new buyer could not sell the property if she wanted to!!!!!

This lawsuit FAILS to mention that monetary consideration of $123K was ACCEPTED by BofA for the purchase of the property!!

I have to stop because my blood pressure is getting dangerously high!!!!

Has anyone EVER seen this before!!! I suspect that Fannie and MERS are probably putting these lawsuits out en masse in the hope that- WHAT- they get the property BACK so they can sell it now for $89K?

ABSOLUTELY AMAZING!!!!



more at link (responses)

Quote:

which purports to reconvey MERS's interest in the property

Which would be what?

2 of the unnamed defendants in the list: mers and fannie mae.

I would like to see the complaint. There has to be more to the story.

How come the title company is never mentioned?

Drunkle,
MERS and Fannie Mae are the plaintiffs in the suit.

Sunriser,
I wonder too why Recontrust isn't a named party, as well as BankofAmerica. It seems to me this is who their real issues should be with.

Assuming that all is as it appears in this suit, this is a prime example of everything that is wrong with our current land record system. How can buyers and sellers be reasonably expected to know they are dealing with valid legal documents when they have no access to knowledge of who the real parties of interest are. I don't know about out west but here in NC, rarely does Fannie Mae's or Freddie Mac's names appear in any filings in our non-judicial process until after the foreclosure auction when properties are conveyed from purchase by the servicers back to their true owners.

Lenders are shooting themselves in the foot with this suit. A win here that goes viral will kill the foreclosure market. Nobody will want to buy homes knowing that sellers whose identities are intentionally kept secret might decide to repossess them somewhere down the line.

IMO, MERS has no legal standing as nominee. Fannie lost her right to legal standing when she chose not to record the property (and betcha the note too) in her name.

Well if MERS (no standing) and Fannie Mae are plaintiffs make them prove chain of title. Sucks for the buyers in the mean time.

Drunkle, Bigbluffer, it is a definite, although difficult to orchestrate legal strategy to prove the plaintiff is suing himself.

My brother did this, or assisted the orchestration of this is a phenomenally complex multi-year case he worked on (not as an attorney but as a bankruptcy referee)

Attempt at cogent summary:

Two elderly women had inherited from their husbands business a commercial building and lot, from which they derived their current incomes and which was occupied by a biotech company in Emeryville, CA.

The city of Emeryville, in an eminent domain action notified the owners that it was Emeryville's intention to E-D the property for use partially as a park and paritally as a medium-large retail/commercial development. (think: massive developer payoffs to town) Emeryville, until recent years, was effectively a cross between Pittsburgh, PA and Gary, Indiana. Through WW2 and the 50's, it had steel mills, many chemical companies, manufacturing of every sort, much of it pollutive. It also had multiple Southern Pacific rail lines running through the town...implying tank car spills, etc; etc. Emeryville is largely built upon land reclaimed from San Francisco Bay.

Shortly after the notification that Emeryville intended to ED the property, they also sic'ed the EPA on the owners. The EPA determined the land was massively polluted and notified the owners that massive remediation would be required. Land & bldg value: About $3 million. Remediation estimate: About $2.8 million. The owners get $100K each for their $3 million building and after legal fees, etc; essentially nothing.

Through extensive research, my brother was able to show that most of the rubble
used to fill in the bay (it was massive mudflat at the time) was actually barged over from construction rubble from the San Francisco earthquake of 1906! Thus, if the town was suing the women for the costs of remediation, they were at least 50% suing themselves.

So, the pollution could not be specifically attributed to either manufacturing ops during the 20's-30's-40's-50's without a goodly part of it also being attributed to the rubble from San Fran. Which was placed there effectively by order of the to-be-created town of Emeryville.

Of course, by that time, the developer went bankrupt and the project became infeasible as part of our wonderfully burgeoning economy.

Meanwhile, the building was razed and I think the city DID E-D it. 8 years later they are still fighting over what the two old women get and who pays for the remediation, which Emeryville has a huge problem with since they are very low on funds, there is no project planned there, nor any remaining desire to build one.

Another government symphony of well-constructed moves.

MERS filings are valid when they want them to be and are invalid when they don't. Another convinient feature of MERS.

Sweet! So that means that for all records that were never properly conveyed by MERS we can sue them on behalf of a bank? I'm in and I'll take just a small cut of the judgement!