Foreclosure Newsworthy Forum

California Attorney General Kamala Harris reportedly sent subpoenas to Fannie Mae and Freddie Mac, requesting information about their servicing, foreclosure, and property leasing actions in the state. The attorney general’s office also intends to investigate the GSEs’ actions regarding purchases of “toxic mortgages.” With one of the highest default rates in the nation.
The notion of a State agency or department suing a Federal Agency is somewhat discouraged by the current administration . The government has issued a variety of notices asking federal agencies to stay out of this toxic mess now being brought to the judicious by the state.
California Attorney General Harris has been actively seeking aid for California homeowners and has recently lobbied for increased principal reductions from Fannie and Freddie.These lender foreclosures are affirmed to be “cyber” recoveries that are recapturing the value of the realty upon charges taken against assets held in trust as bare and legal title.
According to expert Maher Soliman , the Nevada  Attorney may find it difficult to prosecute criminal charges against title officers for alleged Robo-signing. The defendants are employed by Lender Processing Services (LPS) and are allegedly responsible for tens of thousands of fraudulent documents that made their way through the Clark County Recorder’s Office from 2005 to 2008.  LPS says it cooperated with Masto’s investigation and was assured earlier in the month that the company was not a target of the attorney general’s inquiry. What is puzzling here is the Robo Signatures allegations are precedence over support case law that reveals UCC 3-606 as an equitable doctrine which was designed to protect the surety’s right of subrogation.
The test for unjustifiable impairment of collateral not in the creditor’s possession is whether the creditor exercised reasonable care considering the circumstances of the case. The burden of proof is on the party claiming the defense, and he must prove it by a preponderance of the evidence. Bank of Ripley v. Sadler, 671 SW2d 454 (1984). See Annot., “What Constitutes Unjustifiable Impairment of Collateral, Discharging Parties to Negotiable Instrument, Under UCC 3-606 (1) (b)?” 95 ALR 3d 962 (1979).
Failure to execute a security agreement in the collateral constitutes an impairment of collateral. White v. Household Fin., 302 NE2d 828 (1973); North Bank v. Circle Investment Co., 432 NE2d 1004 (1982). See also Hurt v. Citizens Trust Co., 128 Ga. App. 224 (196 SE2d 349) (1973); First Guaranty Bank v. Szekeres, 139 Ga. App. 124 (227 SE2d 908) (1976),
For this purpose the law holds that “impairs” means injured, allowed to deteriorate in value, or that the creditor was negligent in failing to foreclose prior to the bankruptcy of the debtor. Depending on jurisdiction, the court can decide the matter recognizing a  burden of proof   on the guarantor or accommodation party to show impairment of the collateral. Mitchell v. Ringson, 169 Ga. App. 88 (311 SE2d 516) (1983).
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s