The Senate Banking Committee had hearings yesterday, part 2 of problems in mortgage servicing from modification to foreclosure. Yves Smith of Naked Capital has a lot to say about the testimony of American Securitization Forum executive director Tom Deustch. Here is an excerpt.
Deutsche gave one of the most outrageously dishonest presentations I can recall ever seeing, and readers know I specialize in calling that sort of thing out. …
Putting aside the effort to minimize the critics’ case by personalizing it and limiting it to what Levitin offered as testimony last week, the “Mr. Levitin does not rely on the decisions in any court cases” is false. The fact that Levitin did not provide specific citations does not mean one can conclude he did not have rulings that supported his reading. There are literally hundreds, perhaps even thousands, of consumer cases in which judges have denied trustee efforts to foreclose precisely because the notes had not been conveyed correctly. Common screw ups include: the note assigned after the date of foreclosure and shifting stories as to who owned the note). And in particular, judges have not taken well having the note assigned by or through parties that had nothing to do with the securitization chain (no joke, they were not parties to the agreement) or endorsed by bankrupt entities well after they are toast when this has been called to the judge’s attention.
Indeed, why, as we have written, is the preferred fix now for foreclosure mills to present allonges (attachments to the note which contain additional signatures, except these are almost never attached in the manner required by the UCC) which often are clearly suspect (as in, for instance, with visibly Photoshopped signatures altered to fit in the document) precisely to show the proper chain of title if this issue didn’t matter? The behavior on the ground suggests strongly that now that consumer lawyers have gotten wise to vulnerability to questions of standing based on reading the PSA, they are scrambling to create a paper trail that conforms to its requirements?