I tried a case on Friday in St. Louis County. It was an interesting case, as although it had been on file since 2009, I got into the case on ... Tuesday. Yep, this Tuesday.
The reason I was willing to jump in was I had seen the issues that were going to be raised, and I have been trying this case in my head for the entire last year.
A securitized trust foreclosed in 2009. The lawyer for my clients claimed that they were not the holder in due course. They produced a note without an endorsement made out to Fremont Investment & Loan in discovery, and then, lo and behold, a different version of the same note with a blank endorsement from Fremont on the back.
I made two main arguments, which morphed to three by the end of the trial:
1. They were not a holder in due course, because the PSA requires four endorsements ON THE FACE of the note, and if they took this note, it was so irregular and incomplete as to not render them as a holder in due course.
2. They could not hold this note EVER because the PSA stated the type of note it could take, and when it could take it. In this case, by January 28, 2004.
By the end of trial, they had decided not to question their own representative, who was from Ocwen. That firm was not mentioned in the Prospectus or PSA. I questioned her a little, but the judge really grasped the main argument, so I kept my inquiry very minimal. I pointed out that she had no document that showed that this loan was owned by the trust.
The interesting this is, I'm pretty sure the record will show that they never once said that this trust owned or held the note. That was my third argument at the end. If it does end up at the appellate court, that's the out they can take without ruling on the validity of the trusts owning property that is clearly ultra vires.
But I think this case is going to turn out very nicely for the homeowners. It sure was a blast to work on.
Sunday, January 8, 2012
Sunday, January 1, 2012
They're Not Banks - Introducing the Money Changers
As we think about how to attack the never-ending fraud brought by the financial sector, I realized something that had been brewing in my brain for some time. We sometimes overlook the power of words and their utility in a battle.
The thought came to me when I *had* to get something with one of my kids and we were forced to go to Wal-Mart. As I walked into that fluorescent behemoth blur, here was my thought.
Wal-Mart sells groceries, but it's not a grocery store. It sells hardware, but it's not a hardware store. It sells clothes, but it's not a clothes store. What is it?
It's a Wal-Mart. It is sui generis. Wal-Mart has traits from other businesses, but it has morphed into its own creation. We grew up knowing and identifying the places we went by what they sold and we still tend to want to think of things in this way. But they're not that way anymore.
This sounds simple, but think of its applications in our context.
We have allowed Bank of America and Citi and Chase and all the other grotesque Molochs to call themselves banks. THEY'RE NOT.
They are no more banks than Wal-Mart is a grocery store. It may sell groceries, but what we have come to know and love from a grocery store has been surgically removed from Wal-Mart.
Same thing here. Bank of America is not a bank; it is a global financial monster who may happen to provide some banking services.
"Bank" is still a word in the American lexicon that connotes safety and security. It's money in the bank, we say. Take it to the bank, we say, meaning that something is sure.
And there are still banks, ones who know their customers, hold their own notes and act in "bank-like" ways. Those are entities we generally don't have much problem with. They may not always act like we want them to, but they are not involved in the whole-sale fraud that our adversaries are.
They didn't act as banks in these transactions. They bundled the money and sold it, and now they act as bill collectors. That doesn't make them a bank any more than selling a cup of coffee would make McDonald's a coffee house.
They're not banks. We should quit giving them the benefit of this positive connotation. I am fully convinced that part of our problem in explaining this to the American public is that they are used to not questioning bankers and doctors. They need to know that these aren't bankers.
We need a new term. Financial machine? Financial monster? Money changers? We need something to use to distinguish them from traditional banking, and something that emphasizes their role in this situation.
I'm going to suggest "Money Changers." I'm not calling them banks anymore. They don't deserve it.
The thought came to me when I *had* to get something with one of my kids and we were forced to go to Wal-Mart. As I walked into that fluorescent behemoth blur, here was my thought.
Wal-Mart sells groceries, but it's not a grocery store. It sells hardware, but it's not a hardware store. It sells clothes, but it's not a clothes store. What is it?
It's a Wal-Mart. It is sui generis. Wal-Mart has traits from other businesses, but it has morphed into its own creation. We grew up knowing and identifying the places we went by what they sold and we still tend to want to think of things in this way. But they're not that way anymore.
This sounds simple, but think of its applications in our context.
We have allowed Bank of America and Citi and Chase and all the other grotesque Molochs to call themselves banks. THEY'RE NOT.
They are no more banks than Wal-Mart is a grocery store. It may sell groceries, but what we have come to know and love from a grocery store has been surgically removed from Wal-Mart.
Same thing here. Bank of America is not a bank; it is a global financial monster who may happen to provide some banking services.
"Bank" is still a word in the American lexicon that connotes safety and security. It's money in the bank, we say. Take it to the bank, we say, meaning that something is sure.
And there are still banks, ones who know their customers, hold their own notes and act in "bank-like" ways. Those are entities we generally don't have much problem with. They may not always act like we want them to, but they are not involved in the whole-sale fraud that our adversaries are.
They didn't act as banks in these transactions. They bundled the money and sold it, and now they act as bill collectors. That doesn't make them a bank any more than selling a cup of coffee would make McDonald's a coffee house.
They're not banks. We should quit giving them the benefit of this positive connotation. I am fully convinced that part of our problem in explaining this to the American public is that they are used to not questioning bankers and doctors. They need to know that these aren't bankers.
We need a new term. Financial machine? Financial monster? Money changers? We need something to use to distinguish them from traditional banking, and something that emphasizes their role in this situation.
I'm going to suggest "Money Changers." I'm not calling them banks anymore. They don't deserve it.
Subscribe to:
Posts (Atom)