You see, people have been begging to renegotiate their mortgages and the banks have refused. Hell, the banks can't even keep track of payments, and they've been gouging borrowers with outrageous fees and interest charges.

Mr. Shaev’s questions about ownership also led to an admission by PHH that, along the way, it had levied an improper $450 foreclosure fee on the borrower and had overcharged interest by an unstated amount.

This bank decided to manufacture the paperwork after they realized they didn't have it. Joke.

Another problem was that the document showed the note was assigned on March 26, 2009, well after the bankruptcy had been filed.

And for those of you who say it's wrong for people to get away with not paying their mortgage, I agree and disagree. I agree the banks have failed to protect us and their investors from themselves. I disagree that someone should shovel their mortgage payments into a company that has no authority to give them a clear title once the mortgage is paid. Homeowners could end up paying off a 30 year loan to the wrong entity and end up homeless. The banks are trying to hide behind a precedent of a previously accepted "standard operating procedure" of piss poor paperwork.

Judge Drain rejected that argument, concluding that what had been presented to the court just did not add up. "I think that I have a more than 50 percent doubt that if the debtor paid this claim, it would be paying the wrong person," he said. "That’s the problem. And that’s because the claimant has not shown an assignment of a mortgage."

The lender has one last chance to win this, but, it's not looking so hot...

Late last week, PHH appealed the judge’s ruling. But Mr. DiCaro and PHH are in something of a bind. Either they will return to court with a clear claim on the property — including all the transfers and sales that are necessary in the securitization process — or they won’t be able to produce that documentation. If they do produce it, they will then have to explain why they didn’t produce it before.

Produce the Note. Show me the Note. Not another dime to someone who can't clear my title if I pay them.