Schott v BAC Home Loans | Lawsuit Says Securitization Process Waives Banks Foreclosure Rights

Plum man files suit over home foreclosure

The millions of mortgages that were bundled into giant investment pools and traded like stocks shouldn’t be subject to foreclosure, according to an unusual lawsuit filed Wednesday.

That’s because when banks chose to turn mortgages into investment products, they gave up the right to take the house, attorney Luke Lucas argues.

His lawsuit in U.S. District Court focuses on one Plum man’s mortgage. But if its theory were accepted by courts, it would have huge implications for the entire mortgage market.

Mr. Lucas sued on behalf of Jayson Schott, 34, who in 2004 got a $97,500 adjustable rate mortgage from America’s Wholesale Lender. The rate went up, and he went into default.

Bank of America, which bought America’s Wholesale Lender, filed for foreclosure in 2008. But according to the complaint, the loan had long since ceased to be a mortgage.

That’s because shortly after its inception, it was “securitized” — combined with thousands of other loans into an investment vehicle called a Real Estate Mortgage Investment Conduit, or REMIC. That was done, according to the complaint, in order to make it a tax-exempt product that investors from all over the world could buy into — like a stock.

That longstanding process became more prevalent last decade.

Because mortgages and stocks are separate under U.S. law, Mr. Lucas said, the loans ceased to be secured to the house. So the foreclosure, which has been stayed, was invalid.

You can check out the rest here…

Copy of the compliant is below…



Schott v BAC Home Loans

18 Responses to “Schott v BAC Home Loans | Lawsuit Says Securitization Process Waives Banks Foreclosure Rights”
  1. Ryan mccrosson says:

    If you guys want examples of how to properly litigate these issues (among other ways) search for Schott v Huntington and Julius v h s b c ( as amended) in pacer, in the southern district of Indiana 2012 (7th cir). Sorry, I don’t have the cause numbers on me right now.

  2. Hmm… Looks like the TILA and RESPA claims are lo-o-ong time-barred, and the rest are based on some vapor theory that you somehow cannot issue securities against a pool of loans (MBS). Too much like the “note split from the deed” theory. Gotta agree with JamesM here. Let’s see if this complaint can survive even the most casual motion to dismiss. Looks like this guy had friends in the media to get coverage for something like this complaint. Most pro se complaints fare better than this likely will.

  3. Ken Harvey says:

    The elite would be horrified if this gains traction. The royals will start to cry about contract law and personal responsibility and a bunch of other nonsense that has proven over and over to be false. The victim in predatory lending generally had no idea about the securitization process or that their signature would be used against them for profit by thieves. There never was a contract, just a bunch of thieves drawing a person around the bend and then hitting them over the head.

  4. JamesM says:

    Barking up the right tree but with the wrong dog.

    Just because the trust issued stocks, does not mean the assets of a trust magically converted into stocks.

    Think of it this way. A shipping company can own assets in the form of ships. It can issue stocks as shares in the enterprise or bonds against it’s assets. Doing either does not magically change the ships into stocks.

    I think the lawyer confuses assets as objects, with a financial share in the assets.

    If you own a share in a horse it does not mean you jointly own a paper horse.

    • lvent says:

      James M…the note is a check, it is not a ship….The same laws apply to the note as do to a check…You can’t cash a check more than once….ever try to cash a third party check at a bank? Once a note has been coverted into a stock, you can’t convert it back to a note…That is why they destroyed the notes after they sold the loan to Wall Street…they had to. Put it this way James, you can’t chop up an apple and turn it into mush and then turn it back into an apple…The note is cancelled James, the day they sold the loan to Wall Street…the note was paid and so was the mortgage…

    • lvent says:

      BTW James, the warranty deed is the collateral to the home…they did not sell an interest in the home, they sold an interest in the money flow….that was the asset…the revenue generated from the homeowner paying a mortgage..IT WAS A GAMBLE….AND THEY OVER-INSURED THEMSELVES ON THAT RISK, INCLUDING THE INVESTORS…..when that crapped out because Wall Street was overleveraged exponentially and they knew soon, they could no longer pay their investors….they intentionally crashed the stock market…See you tube video, CNBC, Illuminati crashes stock market..That was the biggest transfer of wealth from Mainstreet to Wall Street to the Ruling elite in History…They privatized our wealth and socialized their debt onto the U.S. TAXPAYERS…They are still robbing us by the way, to pay for all of their mortgage fraud..CONgress bailed out Wall Street’s fraud with U.S TAXPAYER money plus backdoor bailouts by the truckload…The FED has been propping up WALL STREET by robbing all of us…QE 1, 2 &3…inflation of goods and services and deflation of the value of the currency…Not to mention the property tax fraud that is also occurring to cover up for all of the other missing money, like policemen and firemens pension fund money….They want to steal the Social Security money next….they are already talking about raising the age to collect it….This is all being done to cover up for exponential collateral fraud committed by Wall Street and the GSE’s…600 trillion in mortgage derivatives fraud…There is a total of 1.2 Quadrillion pledged in derivatives according to daily Street took the U.S. TAXPAYERS CREDIT CARD and went over its limit by 1.2 Quadrillion…and oversold investments to anything with a revenue flow…One lawyer blogged, he found out that his client’s mortgage was sold at least 603 times…mighty hefty mortgage payment right there.NO LOAN MOD FOR THAT GUY…THAT IS SOME REAL UNSUSTAINABLE DEBT FOR YA..!!!…A set up to fail if I ever saw one..All of this was allowed by the Politicians of course…This could never have been possible without some really evil traitors from within……It appears that 9/11 was an attempt cover up for this scheme/scam…Lotsa evidence in building 7 got destroyed….So James, someone has some BIG TIME explaining to do…We The People, the people they consider PEE ONS, want our stolen wealth, businessses, jobs, pension funds, 401 k and other stolen investments and our stolen homes back…… THAT WE BUSTED OUR ASSES FOR BTW…. out of the crooks overseas bankster accounts.WHERE ALL OF OUR STOLEN WEALTH IS HIDDEN….time for the American People to FORECLOSE ON WALL STREET…and throw all of the traitor politicians in prison…with no pension, health insurance sieze all assets.They shit all over MAINSTREET AND NOW..ITS PAYBACK TIME!

      • I vent…..I have said that before….put the politicians where they belong…in prison….and do the same as they did with Madoff…strip them down to the clothes on their backs…give them the prison garb to wear…..that’s it…..and give them a home in a cell block…..they know they are traitors….so it will not shock them any….but they will feel the shock when they hear the clanging of the bars being shut and locked. ….Like Madoff said….” He feels safer in prison than he would out on the street….”..

      • lvent says:

        Marilyn, It is a disgrace, what these politicians have allowed to happen to America and I don’t buy the greed excuse at all. They are one thing and one thing only, they are traitors and the punishment for that is and should be severe. Now that so called Mayor in Oakland is in alot of trouble because of her unwarranted orders to end the protesting and the subsequent police brutality towards peacful protesters,,,..It is the POLITICIANS who belong in prison or worse…The politicians are who I blame for everything.

  5. We all know that rules are rules and the rule of law seems to be this ever changing code that is controlled by those who are in power at the time. It is really more the golden rule; those with the gold are making the rules. However, in our current dilemma, we the People are as much altering the laws to fit our ethical consciousness. Let face it, many borrowed more money than they could afford and broke many laws themselves to be able to get the money. However that doesn’t preclude the oligarchs through the Federal Reserve Banking System from their dishonesty that was far more vast in its deception and destruction. The Federal Reserve Bank, it member banks and the very largest investment banks performed a gigantic currency pump and dump of the highest order; one of the monopolistic benefits of being central bankers and then and still are trying to lay off the liabilities on the taxpayers. It also does not preclude their breaking their own Transfer and Servicing Agreements. Every single homeowner who has been damaged by this viscous scheme has a cause of action, however there are very few who escape the ethical criteria to state such a claim without counter claims. It is as if to say he has never sinned shall cast the first stone. I do not know the answers to solve the many questions facing our nation. One thing that I can say is if you have not learned the potential ramifications of a central bank and its monopolistic power, a/k/a the 5th platform of communism, you need to read a non-fiction book called the Creature From Jekyll Island. It will forever change your consciousness of the economic truths facing Americans.

  6. lvent says:

    Isn’t securitization the proper assignment of the note to the trust…?
    a.) Assignment from Originator to Sponsor;
    b.) Assignment from Sponsor to Depositor;
    c.) Assignment from Depositor to the Trust..
    Unendorsed note means there must be both a delivery and an acceptance receipt
    From what I have read, this equitable transfer is the conveyance that creates the security..andthe timely recording of the assignment creates a lien on property…To just record a mortgage is not a legally enforceable lien..anyone can do that and say that you owe them money…..
    The purpose of the securitization process was to make the mortage note legally protected from any claims a bankruptcy trustee or the FDIC might assert assert against the originator of the loan. This requires a series of true sales and transfers pursuant to the mandatory transfer rules of the PSA aggreement. True sales and transfers were required in order to obtain a certain tax status as a REMIC trust..In addition to a lack of proper assignment of the Mortage, in many cases, the Plaintiff is unable to show proper endorsement on the Note or the delivery certificates for any endorsement in blank. Without this, The Plaintiff should not be able to foreclose on your home. I though this was interesting from Foreclosure Pre to The IRS:

  7. housemanrob says:

    …..quick. somebody get an ax and we’ll chop that MERS straw hut down…….in a flash……America’s Wholesale Lending was not a corp…….just a DBA for Countrywide…..not a legal entity until a few years later….how can they have standing?

    • Hell No - No More Bleeping Bankster Bailouts says:

      The ‘dba’ entity is the only one that BofA bought. They did NOT buy the actual America’s Wholesale Lending Corporation.

      If this mortgage states that the named LENDER is “America’s Wholesale Lender Corporation” like MANY mortgages do, then this attorney needs to look at how he is citing AWL. BofA TRIES to claim the mortgage is ‘really’ naming the Countrywide D/B/A but does not so specify ANYWHERE on the mortgages.

      The AWL that was incorporated in NY state on 12/16/2008 STILL EXISTS today.

      • housemanrob says:

        ….and Angelo Mozilo should be in jail for this shit…….but he ain’t…..

      • JamesM says:

        Good point on the AWL – Countrywide – dba issue.

        I hope you write this up at length, with citations to the registered numbers of the legal entities in the states of incorporation, and maybe supporting links.

        You may not be able to afford a 100,000 dollar lawyer but if you lay it out well, maybe someone will take it and run with it, and win, and then you will be able to use the case law that results.

      • Hell No - No More Bleeping Bankster Bailouts says:


        I have read that filing more than once and even searched it. I do not find where the suit states ANY relationship between BofA and AWL. I contact the guy who did the write-up in that original newspaper column. He claimed he pulled the comment from the suit. I must be going blind from too many hours in front of this computer screen. I have yet to find it.

        I do take note that the suit points out that there is no way that anyone had authority to do the assignments. That goes along with the attorney knowing he is dealing with the non-formed ‘AWL Corp’.

        Even if the argument on the conversion to stocks is booted, the other points on the fact that the assignments could not be done is a FACT.

        In this case, they have to have an assignment from AWL Corp to Countrywide because CW is the Originator. It never happened and it never COULD have happened in the time frame required under IRS and NY Trust law for the REMIC.

      • housemanrob says:

        Hell No………..I can’t believe they are even trying that one… is a loser, one big failure….COUNTRYWDE DBA AMERICA’S WHOLESALE LENDER…..I have a war veteran buddy who hasen’t made a payment in 4 and one half years….same entity, before they incorporated, they technically did not exist….they don’t do anything, don’t even call him anymore. Y OU SHOULD WIN LIKE SECRETARIAT….GOING AWAY!

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