I am often sent documents to review. And most of the documents purport to grant authority to some person or entity to do everything (or at least something) necessary to complete the process of foreclosure. In virtually all cases documents that are allowed to appear are merely part of the illusion of authority and not the source of Authority.

In short, the grantor does not say that it owns or has the authority to grant authority to anyone else. This is considered a fatal defect on most documents but it occurs regularly in foreclosure cases.

The interesting thing about documents like this is that they do not use any preamble stating that the company owns any of the loans for which the Authority has been granted.

*

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Thursdays LIVE!

Click into the WEST COAST Neil Garfield Show

with Charles Marshall and Bill Paatalo

Or call in at (347) 850-1260, 6 pm Eastern Thursdays

Anyone who participated in the 9/29/21 CLE Webinar “Examination and Challenge of Assignments of Mortgage” must have come away with at least this takeaway — the devil is in the details.

And as I repeatedly suggested in that 2-hour CLE webinar (now available on-demand at lendinglies.com, it is only by coordinating the work of private investigators, forensic examiners of documents, and legal practitioners that homeowners actually prevail in litigation.

If there are two people that understand the intersection of these skills better than nearly anyone else, it is Bill Paatalo, Private Investigator and Charles Marshall, Attorney at Law.

Bill Paatalo joins Host Charles Marshall on the Neil Garfield Show today to break down with Charles a recent case handled by Bill on the invesitgation end, in which Bill was able expose a major deficiency in the servicer/lender’s case.

Additionally, Charles will address the latest on the Covid front, including updates on how foreclosures and unlawful detainers are heating up in California and elsewhere due to the lifting of the various moratoriums.

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As promised we are doing a follow-up telephone conference to my CLE presentation of “Examination and Challenge of Assignments of Mortgage”. It was conducted live via ZOOM webinars at 3 pm on Wednesday, September 29, 2021.  The follow-up conference call details are below.

I am announcing here to allow nonparticipants in the Webinar to listen to the Q&A.

Participants can have their questions answered by writing to neilfgarfield@hotmail.com . No questions will be taken orally.

The recorded 2 hour Webinar is still available for at least 2 CLE credits in Florida and several other states.

Click Here to Purchase Access to 9/29/21 CLE Webinar for lawyers “Examination and Challenge of Assignments of Mortgage.” 

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FOLLOW-UP Q&A CONFERENCE CALL FOR EXAMINATION AND CHALLENGE OF ASSIGNMENTS OF MORTGAGE

Date: October 15, 2021 (Friday)

Time: 1:30 PM (45 minutes)

The follow-up Q&A conference call will be recorded and the audio file will be distributed when received from Freeconference.com.

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US Bank v. Nelson, 36 N.Y.3d 998, 1000 (N.Y. 2020) (“Whether a plaintiff is a party to a contract – and therefore can sue for breach of contract – is not a question of “standing.” New York law suggests that true standing must be pleaded as an affirmative defense. But whether a plaintiff is a party to a contract and, therefore, can sue for breach, is not a question of standing – it is an essential element of a plaintiff’s claim, which must be pleaded affirmatively in a complaint.”)

see US Bank LSF9 v Verhagen 7-20-20 US Bank v. Nelson

Hat tip to one of my favorite contributors.

Consumers need to know that each time they challenge the “servicer” or “creditor” they are not only doing themselves a favor but also helping millions of other consumers who were tricked into being participants in an illegal securities scheme that mostly looks like the Madoff Ponzi scheme on sterioids. 

Just because a court discusses an issue based upon its own assumptions and presumptions does not mean that anything it said is true, correct, or consistent with precedent or statutes.

This case is a perfect example of that. Note first that the case is styled “U.S. Bank V Nelson” when U.S Bank has no interest, power, duties, or control over anything relating to the subject transaction that is most likely being mistakenly presumed to be a loan with a loan account receivable on the books of a creditor.

Note also that the designated named creditor is a nonexistent trust. Even if the trust did exist, it has nothing in it except “bare naked title (see my previous post). AND the name of the nonexistent trust starts off with Deutsche bank a supposed competitor of US. Bank. As NY Judge Shack remarked 13 years ago, there must be a very large auditorium somewhere in which all the major banks do business together. I would call that auditorium the shadow banking market.

So this decision states that the homeowner rightfully loses. The reason is that the homeowner failed to file an affirmative defense of lack of standing. Under NY law standing is an affirmative defense. I might add that the standing argument is tenuous at best. Anyone with a document, even if it’s false, has standing. What they lack is a winning case. That’s different.

The concurring opinion in this case specifically addresses that correctly. He says that the issue of whether the named Plaintiff is actually a party to a contract is NOT an issue of standing. I agree. Most legal scholars would agree.

If the designated named claimant is said to be the plaintiff and it has no right to enforce the contract because it is not a party to the contract then the case fails for want of the basic elements of the case — or to put it in legal terms it lacks the basic elements of a prima facie case. In that case, lack of standing need not be alleged nor can it be proven. As long as the endorsement to a note exists, standing is present even if the case is fake.

That is true as long as the contract in dispute is the note. But while Article 3 UCC allows for the enforcement of the note by a person who does not own the underlying obligation, Article 9 allows enforcement only by a person who paid value for the underlying obligation.

It is an extra layer of protection because we are not just talking about a judgment. We are talking about an order, incorporated into the judgment requiring the forced sale of a homestead. This is not up for argument or dispute. That is what NY statutes say and that is what the statutes of every U.S. state say when their legislature adopted, verbatim, the UCC and in particular Article 9 §203.

So Judge Wilson is entirely correct that if you have something that seems to say that you are part of a contract, then you have standing. But if you cannot prove your part of the contract, then you should be denied whatever remedy you’re seeking. This point is considered by judges, lawyers, and consumers to be so fine a line of distinction as to be invisible, but Judge Wilson seeks to put it in relief. And he is right (although he doesn’t need me to say so).

However, there is an entirely different point at stake here in this case which is, like standing, inappropriately presumed away.

The fact that a person may have standing to bring a claim for judgment based on the promissory note, which is one contract, does not mean that they satisfy the condition precedent to enforcing the mortgage, which is another contract.

In this simple explicit requirement in the statutes passed by the legislatures and signed into law by the governors, the condition is stated expressly and unambiguously as requiring the payment of value for the underlying obligation. Because it is express and unambiguous, it is not subject to “interpretation” (i.e. rewriting) by any court. The court is outside the limits of its authority if it fails to apply Article 9 to foreclosure.

You should note that Article 9 §203 does not say pay value for the rights to enforce the debt, or the note or even the mortgage. It specifically identifies a business transaction that MUST take place before anyone can bring a claim to force any security instrument, like a mortgage.

That specifically identified transaction required by statute is “Payment of value for the underlying obligation.”

If that transaction exists, then one might make some reasonable business assumptions and some reasonable legal presumption of fact about the standing and rights to enforce a contract in which the claimant can be inferred to be a party in interest.

Without it, no such presumptions should apply. That means the prima facie case failed in millions of foreclosures or other procedures to collect scheduled payments from consumers. But a judgment was rendered anyway. Sales were conducted anyway. Evictions were conducted anyway. And the proceeds went into ledgers as profit rather than any reduction in any alleged obligation owed by the consumer.

So yes I am making the grandiose statement that virtually none fo the millions of foreclosures, collections or referral to collection agencies were bonafide, correct, moral, legal or justified.

Anyone who had previously paid value has already been paid in full. That is the point of securitization instead of making a loan. If you sell off securities that rely on data reporting rather than ownership of anything, you can keep selling without limitation. 

So where the courts got convoluted again was when they presumed some things and then confused the facial transfer of the note with the statutory condition precedent of paying for the underlying obligation. Even in discovery, without careful planning, the judge is likely to consider your demands for proof of payment of value for the underlying obligation to be irrelevant unless the judge is led step by step through the due process and UCC arguments.

If you don’t know what you are talking about you will lose.

The endorsement of the note without transfer of the underlying obligation is merely a transfer of the right to enforce. It is not even that if it comes from someone lacking the authority to enforce. That authority, ultimately, can ONLY come from one person — the one who paid value for the underlying obligation. Otherwise, what is the point of any rules, regulations or laws?

As stated by the Yvanova court in California, the obligation is not owned to ANYONE. It must be owed to SOMEONE that is identified. But bowing to pressure from the financial community, the court refused to allow preemptive challenges to false claims to administer, collect or enforce the scheduled payments from homeowners (or any consumers).

Click Here to Purchase Access to 9/29/21 CLE Webinar for lawyers “Examination and Challenge of Assignments of Mortgage.” 

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FREE REVIEW: Don’t wait, Act NOW!

• But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
• Yes you DO need a lawyer.
• If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

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The mistake that lawyers and pro se homeowners are lured into making is that they think that the pooling and servicing agreement is the trust agreement. It isn’t.

Alan Greenspan assumed that free-market forces would make the correction if Wall Street was doing something stupid. He later admitted his mistake. But the courts are repeating and magnifying the mistake partly out of ignorance and partly because the lawyers and pro se homeowners are ignorant and have presented the wrong challenge to foreclosure.

 

We lawyers tend to use terms that are recognizable to each other but mean nothing to people who are not lawyers. One of those terms is “bare naked title.”

Anybody can sign a deed. And the wording of the deed will usually refer to a particular piece of property or an interest in that property. If the deed is being recorded the statute requires an identification of the person who is supposedly granting title and an identification of the person who is receiving it.

As long as the deed conforms to the requirements of the recording statute, the clerk of the recording office has virtually no discretion about whether to allow the document to be recorded — even if the clerk has substantial and reasonable doubt that the deed was executed by a person who possessed legal title to the property.

Many recording officers across the country have expressed concern about the statutes because they know they are recording documents that are only clouding title or making them completely unmarketable. Even in cases where the wording of the deed clearly conflicts with prior documents that were recorded in the chain of title, the county attorney will ordinarily have the opinion that the clerk has no discretion and that the document must be recorded.

And that procedure is what has been Weaponized by Wall Street. Instead of vetting the instruments or requiring additional proof before a document is recorded, the burden is shifted onto people who were adversely affected by the false document.

Bare Naked legal title means that the holder has received a document that says it is transferring title — but the grantor does not possess title. Therefore no legal title was passed. Google “‘wild deed”. Most documents in securitization lack a grantor who owns anything.

But with the document recorded, it is presumed to satisfy the formal requirements of a proper transfer and everything on it is presumed to be true. However, most such documents ordinarily, in custom and practice contain a warranty of title or some positive assertion of title rather than an implied reference that one might interpret to mean that the grantor had legal title.

Look carefully. You will not find any such warranty of title because the players know that is a false representation. By merely implying title, the burden of proving fraud by clear and convincing evidence becomes nearly impossible. Anyone can deny an implication by asserting plausible deniability or “that’s not what we meant.”

Why is this important? Because if lawyers and pro se homeowners were able to get their hands on the actual trust agreement involving a so-called REMIC trust, they would find that the trust agreement often expressly states the trustee only has Bare naked title, without any interest in any debt, note or mortgage.

And that is exactly why the proceeds of foreclosure are never paid to the trustee or the trust even though they were made the claimant or plaintiff. And that is precisely what state law in all US jurisdictions is designed to prevent: article 9 section 203 of the uniform commercial code has been adopted in all US jurisdictions verbatim. It requires that anyone wishing to make a claim on a security instrument (which includes mortgage or deed of trust) must’ve paid value for the underlying obligation.

This is one of the areas that the investment banks have Weaponized because of issues that have never been previously explored. It was always theoretically possible to purchase a note or mortgage without purchasing the underlying obligation. Sometimes this is referred to as “splitting” in legal literature. But ordinarily, nobody has done that intentionally because there was no business reason to do so.

The geniuses on Wall Street realized that if they sold the enforcement rights without the obligation, and then sold bets on the performance of those enforcement rights, they could never be accused of selling the underlying obligation to more than one person and therefore face charges for fraud.

Their problem was that the statute was very clear on the issue of enforcement of mortgages. There the debt had to be sold. So they cured that problem with the bunch fake documents, again pushing the burden onto unsuspecting homeowners to figure out a scheme that not even the Federal Reserve was able to understand using hundreds of PhD’s and lawyers.

It just never occurred to them (until it was too late) that the claim was false — i.e., that no debt was being securitized and that the only thing securitized was the right to enforce it.

Alan Greenspan assumed that free-market forces would make the correction if Wall Street was doing something stupid. He later admitted his mistake. But the courts are repeating and magnifying the mistake partly out of ignorance and partly because the lawyers and pro se homeowners are ignorant and have presented the wrong challenge to foreclosure.

There was no free market because only a handful of securities firms had knowledge of what they were doing.

This became institutionalized and so far millions of illegal foreclosures and nearly 20 million people have been displaced from their homes by a scheme that pays off the homeowner’s promise to pay contemporaneously with the transaction but never gets recorded as such anywhere. The homeowner of course is kept strictly in the dark.

PRACTICE ALERT — DENIAL VS AFFIRMATIVE DEFENSES: there are several very talented trial lawyers who disagree with what I am about to say. In my opinion the best strategy is simply to file an answer that denies the allegations of a judicial complaint or which challenges the implied allegations contained within a notice of substitution of trustee and subsequent notice of default.

Although challenges based upon the belief that the documents are forged and fraudulent are probably true, there are at least two problems that I think are virtually in surmountable for homeowners.

The first problem is that once you make an allegation, you must prove it. And if the allegation involves forgery or fraud, you need to prove it by clear and convincing evidence which is something close to beyond reasonable doubt.

So while your opposition merely needs to show that it is more likely than not that the homeowner breached a duty to pay the claimant, traveling along the path of affirmative defenses that a ledge forgery and fraud means that the homeowner has a higher burden of proof than the claimant.

In terms of what must happen in the courtroom, the homeowner therefore will need to find people who are actually involved in the forgery or fraud who will admit the existence of a scam, and their own role in it.

This is where federal and state agencies should be accepting the burden of investigation and proof. But they really have not done so and I have no reasonable expectation for that to change.

I agree that the contrary view has merit. Filing affirmative defenses claming fraud and forgery does in fact have the effect of widening both the scope and potential opportunities to hold the other side in contempt for noncompliance in discovery. And we all know that the there will be no compliance. My opinion is a bit more direct and decidedly riskier from an academic point of view. But it is a lot easier and more credible to say that the allegations against the homeowner are untrue than to say and never prove the allegations were false, forged, and fraudulent. To be fair, I know of numerous isntances where both strategies have been employed successfully.

And if you look for the beneficiaries of the trust, you will only find one or more investment banks. You will never find any investor who purchased any certificate issued in the name of the alleged trust.

The reason I say that the trust doesn’t exist even if it is registered is that the only thing that has ever been put into the trust has been the Bare naked title. No trust exists without some legally recognized thing (res, in Latin) that has been legally transferred to the trustee of the trust to hold in trust for the benefit of the beneficiaries.

Some lawyers and virtually all homeowners are bewildered by this labyrinth of technical legal jargon and now are encouraged to make up their own definitions because of some false narrative on the internet — a feature that the investment banks regularly exploit.

PRACTICE note: the mistake that lawyers and pro se homeowners are lured into making is that they think that the pooling and servicing agreement is the trust agreement. It isn’t even if it says it is. 

Practitioners should refer to state statutes regarding the statutory requirements for an affective trust agreement.

Generally speaking, they require an identified trustor or settlor, an identified beneficiary or beneficiaries, identified property that has been legally transferred into the trust, and the terms of how the trustee is instructed to manage the property that has been transferred into the trust.

If you look at any pooling and servicing agreement you will find that they are missing one or more of those elements. Look particularly for references to exhibits that do not exist.

Click Here to Purchase Access to 9/29/21 CLE Webinar for lawyers “Examination and Challenge of Assignments of Mortgage.” 

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FREE REVIEW: Don’t wait, Act NOW!

• But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
• Yes you DO need a lawyer.
• If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

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Thursdays LIVE! Click in to the Neil Garfield Show

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All successful defenses to foreclosure attempts basically come down to one fact: When tested, the claim cannot be supported because it is untrue.

PURCHASE MY TWO HOUR WEBINAR ON DEMAND ON EXAMINATION AND CHALLENGE OF ASSIGNMENTS OF MORTGAGE — CLICK HERE

I see in threads of emails that are shared with me considerable discussion and debate over whether the “loan” was sold. The parties who have trouble even conceiving of a scenario in which the original homeowner transaction was not sold are those who are looking at documents. In securitization today, virtually NONE of the documents are real, true, or authentic.

But it is true that if you’re willing to take the risk of jail or civil penalties, you can create fake documents and use them in court. If the documents conform to custom and practice and follow some statute as to form, then they are initially presumed to be true and valid. And if the homeowner fails to contest it, there will be a judgment in favor of the bad actor. Case over. Foreclosure judgment entered or sale approved, then the auction and sale of the property followed by eviction.

What I am telling you in this blog, my lectures, and radio shows is that none of that means foreclosure is inevitable. The fact that a homeowner stops making scheduled payments is not a default unless the creditor declares it as a default — not when some company claiming to be a servicer declares it. But if the homeowner admits being in default then he/she is admitting that the right creditor is making the right claim.

This issue arises because of confusion as to when and whether to use the fabricated documents for anything. If you don’t believe a single word on any document, you are left with the obligation, which might exist, and a claimant who either did or did not pay for it. No loan was ever sold because that was the point of securitization. If the loan was sold then they could have only sold it once. But by selling data ABOUT the loan they could sell it as many times as they wanted.

The lawyers and other parties that participate in illegal foreclosure schemes are depending upon your lack of knowledge as to what constitutes a sale of the loan. First they want you to assume that a loan account exists, which in the context of securitization, it does not. Second, they want you to think that since money might have been paid to somebody that it must have been a purchase of the obligation by the party named in the fake documents.

When tested, this assumption fails. If a sale had occurred there would be a record of payment of money from Party A to Party B. that record would be both a money trail (canceled checks, wire transfer receipts, etc) and accounting entries on the books of each company. Even at origination in most cases, the money trail that is represented to the homeowner does not exist. And all attempts to see the money trail and to see the accounting entries will be met with a refusal to comply with the request regardless of the consequences to the lawyer or other parties.

All successful defenses to foreclosure attempts basically come down to one fact: When tested, the claim cannot be supported because it is untrue.

The essence of what we call “securitization” is actually breaking up the homeowner transaction into atomized legal pieces. The investment bank —acting through various intermediaries — is actually purchasing the right to make a claim against the homeowner even though it is not a creditor. It’s not a servicing right or even a legitimate claim. The homeowner agrees because the homeowner never receives any information about the structure of his/her transaction and thus never has any opportunity to ability to assess the deal or bargain for better terms or go to some other source of capital. The inserted parties are merely renting out their names to the investment bank in exchange for a fee. The originator, the servicer in whose name payment histories are published, the REMIC trustee, the trust, are all fictitious or sham conduits for the scheme of the investment banker. 

The investment bank is selling information or data about the transaction with the homeowner and can sell as many pieces of information as the market will bear. Substantively the entire transaction with the homeowner is paid off many times over but never recorded as such. But the law requires any claimant in any lawsuit to have suffered a loss due to a breach of duty by the homeowner. There is no such party because all parties have been paid. The fact that it was not recorded as such or disclosed as such merely means that the investment bank succeeded in maintaining an illusion — not that the loan was sold or that anyone owns it. 

There is not a single REMIC trust case in which a loss to any owner of a loan account or other obligation due from a homeowner can be traced to any action or inaction by the homeowner. None of them expect or need any action from the homeowner. they just need to sell more securities and in order to do that, they need more signatures on more documents. And that is why the use of attorneys at real estate closings has been discouraged in subtle and not so subtle ways. Some sharp attorney might have caused trouble when his questions were not answered.

PURCHASE MY TWO HOUR WEBINAR ON DEMAND ON EXAMINATION AND CHALLENGE OF ASSIGNMENTS OF MORTGAGE — CLICK HERE

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• But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
• Yes you DO need a lawyer.
• If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Filed under: foreclosure | 7 Comments »

Hat tip to Summer chic

From the very beginning — when homeowners or prospective homeowners are first applying for a loan or refinance — they are faced with (a) understanding the transaction (something that TILA was supposed to fix) (b) whether to go on offense and (c) whether to just wait and go on defense.

Nobody wants to sign into a deal that is bound to end up either in litigation or the threat of it. But that is exactly what almost every would-be borrower gets in the “lending marketplace.” They certainly are NOT getting a loan with a “true lender” (look it up) and there is no loan account, nor any risk of loss or any other attributes that one would expect from the counterparty in a loan transaction.

And despite the Good Faith estimate and other disclosure statements that are required by law to be delivered in clear bold English regarding the compensation, commissions, profits or other revenue generated from the supposed “loan” transaction, there is absolutely no disclosure of the fact that but for the issuance and sale of securities at amazing levels of revenues and profits, there would be no loan.

So no homeowner understands that the closing is a ruse. The closing agent is just another layer in the series of curtains that provide cover for plausible deniability. The agent’s job is to secure signatures on documents that will be reported — not used — as the basis for the sale of unregulated securities (that should be regulated as securities).

There is no lender. there is a mortgage broker or just a salesperson. And that salesperson signs an endorsement of the note at or near the time of the “closing.” the agent often receives only a report of distribution of money and instructions to record the documents — but sometimes receives a wire transfer from an unknown source with instructions on how and when to disburse.

So the bottom line is that the consumer gets the money or money is paid on behalf of the consumer and the consumer makes a written promise (the promissory note) to pay back what they received. But they only made that promise because they thought this was a loan transaction and not an essential step in the issuance and sale of securities — and many layers of derivatives based upon the sale of those securities.

The consumer never gets a chance to do what TILA intended — bargain for the best possible deal, which in this case would be a share of the stupendous revenues and profits from the sale of securities equal to, on average, at least 12 times the amount of the money they were receiving. And for Wall Street, that was what the deal was all about. Securities firms are not interested in lending money. They are only interested in selling securities. Any other tale told by Wall Street is pure rubbish.

Theoretically, the time for challenging eh transaction is contemporaneous with the start of it — but no consumer knows anything about their transaction except the misrepresentations and the absence of any disclosure about the true nature of the transaction.

It is only later when someone seeks to enforce their promise to pay, that consumers as homeowners begin to realize that they are dealing with companies that are basically sham conduits and placeholders without any authority to settle but who take “applications” for settlement or modification and falsely report that they went to investors who turned down the request.

If I had to say what I thought were the two biggest errors in American finance it would be this: the advent of “Unaccountable Accounting” (See Abraham  Briloff) with its off-balance sheet fictions, and the ability of security firms to incorporate and even sell their stock in IPOs.

The change in accounting methods began when I was first working on Wall Street, probably contributed to the great “Paper Crash,” and started the institutionalization of fraud. The ability to move transactions off the reporting statements of companies was absurd, but it happened and it is still with us.

The change in the business structure of securities firms (“investment banks”) was at least as profound. Whereas the principals were personally liable for the misdeeds of their eter[rise, that ceased when they successfully lobbied for incorporation.

The risk was shifted to shareholders and none of the personal wealth of the managers and owners could ever be disturbed by giant fines or damage claims. In a word, they went from accountable to unaccountable, just like their financial statements.

But there is a large body of legal decisions that says “not so fast.” if the principals of an illegal enterprise benefit from that enterprise, they must give the money back, pay taxes, and they will be subject to fine or forfeiture in both criminal, civil and individual lawsuits.

Summer’s point is very well taken.

*

And Eric Holder when he was leaving office as Attorney general said the same thing. Sue the individuals. One of his many disagreements with Obama was how softly that administration treaded with Wall Street, continuing the stupidity that preceded such behavior during George W and Bill Clinton administrations. Maybe stupid is the wrong word. it was certainly ignorant prodded by either lies or misrepresentations who had drunk too much Kool-Aid.

*

NOTE: There is a consitutional argument here that I don’t think can be effectively disabled by the banks. The nonjudical process was made into law becasue of the number of uncontested foreclosures. Forcing a hoemowner to deny allegations in a petition for TRO is a denial of due process precisely because there is nothing to deny. There have been no allegations and therefore no case in controversy. As I have argued since 2006, the process of relaignment of the parties would make the statutory scheme constitutional. But without it, the scheme is unconsitutional as applied.

The proof of this proposition is obvious. Look to any judicial state and compare it with any nonjudical state. Homeowners in judicial states win far more often then homeowners in nonjudicial states. Why is that?

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EVERYONE GOT PAID. THERE IS NO FORECLOSURE INVOLVING A REMIC TRUST IN WHICH ANYONE HAS LOST MONEY BECAUSE A HOMEOWNER DIDN’T MAKE A PAYMENT. 

All assignments “for value” in such siotautions are fake and false.

I don’t know why I keep doing it but ever since both decisions were in existence I have continually mixed up the names.

I did it again in the webinar yesterday when I referred to the Ibanez decision from Massachusetts when I meant to refer to the Yvanova decision in California. I’m sorry!

The Yvanova decision was the one in which the California Supreme Court correctly stated the law regarding obligation being owed to  SOMEBODY rather than just ANYBODY. But the same court went on to say that no action could be brought for wrongful foreclosure until the foreclosure was complete. That too was a correct statement of the law. (There is no lawsuit that can be pled until the claim matures).

see also

Ratification of Void Assignments to REMIC Trust is Clear Nonsense

But in other courts, Yvanova was taken to mean that you could do nothing about a void assignment until after the foreclosure was over and you could do nothing to stop an illegal foreclosure — which is wrong and it is not what the Yvanova court stated.

In fact, it has become false “doctrine” that preemptive action by borrowers is impossible and premature. There is no such decision in existence and there are many ways to seek nullification and injunction against the use of a void instrument. The use of a QWR and DVL under FDCPA and FTC regulations is a good way to make tracks in the sand before you file.

The Ibanez decision in Massachusetts was somewhat different. The high court there ruled that if the paperwork was either incomplete or defective that neither US Bank nor Wells Fargo had any right to foreclose. That meant that most foreclosrures in the state had to be redone — but that didn’t happen.

see https://livinglies.me/2011/01/10/massachusetts-ibanez-is-shot-heard-around-the-world/

Both decisions start with what I have been saying from the start. The entire foreclosure scheme is a hoax and a scam. But in both cases decisions after those opinions were handed down retreated from the basic application of the most basic laws of common sense, statute, customs and practices.

And today, in both states, foreclosures are merrily being concluded destroying the lives of thousands of homeowners who do not realize that they have no reason to give up their home. My message is KEEP YOUR HOUSE. 96% of all foreclsorues are not challenged even a little bit. If everyone did challenge them and litgated their cases properly, my data shows that they would win, flat out, between 65% and 80% of the time.

In plain langauge while the line of cases follwign these key decisions creates an adverse atmosphere for the hoemowner, my experience, and that of many otehr lawyers who have litigated these issues since the early 2000s, shows that most judges who start with thinking the end result is “inevitable” (i.e., foreclosure approved), can be persuaded to conclude that there is insufficient evidence to support the claim.

The reason that the foreclosure mills cannot produce any real evidence to support their false claims when challenged is that there were no transctions supporting any of the purported endorsements of notes or assignments of mortgages. That is all faked.

And by the way, as I have pointed out repetaedly, it is no theory that foreclosures are based upon mortgages, not notes. There is no such thing as a foreclosure of a note. That does not exist anywhere in any US jurisidicition. People who argue otehrwise are deeply mistaken. But like all false claims you can make any theory fly if nobody opposes it.

And as pointed out by Attorney Randy Ackley in West Palm beach, Florida, my guest last night on the Neil Garfield Show, the mortgage lien cannot legally attach to an obligation or a note that has been converted into a security that has no relationship to the homeowner or any promise made by the homeowner.

And the reason for that is simple. Everyone has been paid and everyone continues to get paid in real life regardless of whether or not some homeowner makes a payment to someone unknown company claiming to be a servicer who is not actually receiving or disbursing the payment.

All of that thappened because securitization  did not invovle sale of the loan, debt, note or mortgage. If it did, the securities firms could not have sold it ten or twelve times over without committing outright fraud.The real scheme enabled the investment banks to generate many times the amount of any transaction with any hoemowner. So a default in any sense, much less the classic sense, is impossible.

EVERYONE GOT PAID. THERE IS NO FORECLOSURE INVOLVING A REMIC TRUST IN WHICH ANYONE HAS LOST MONEY BECAUSE A HOMEOWNER DIDN’T MAKE A PAYMENT.

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If the claimant is only a holder it is highly probable that he is neither a holder in due course nor a true lender or creditor. If it was otherwise, he would say so. And only a party who has paid value for the underlying obligation may enforce a mortgage. (Article 9 §203 UCC, adopted verbatim in all U.S. jurisdictions).

A true creditor would ordinarily say in judicial states that it is suffering financial loss or injury from the breach by the homeowner. You NEVER see that when a lawyer files a claim naming a REMIC trustee as the claimant. Yet is a basic rule and custom of pleading because the court may not hear a case unless someone has been injured or is being injured by the conduct of the other party.

A holder in due course by definition is ONLY one who has paid value for the claimed underlying obligation. If he has not paid value then he is not a holder in due course (the other elements being that the purchase was made in good faith and without knowledge of the borrower’s defenses — which is also a problem for any transfer of the original note to or from REMIC trusts).

It is of course possible for one who has paid value for the underlying obligation either at origination or acquisition and still enforce the mortgage — subject to defenses like the breach of TILA or state law obligations of disclosure (usually raised in affirmative defenses as recoupment which limit set off to the amount of the claim but are not limited by the statute of limitations).

A “Holder” is defined by statute. It is one who is in possession of the note AND who has received authority to enforce it. The authority to enforce can come from a previous holder. But the mistake made by nearly everyone is to drop it there. The question is where did the previous holder get authority?

Ultimately the authority MUST come from the party to whom the proceeds are required to be paid by whoever enforces the note. That is the person who owns the underlying obligation. That person is the one who loaned money or purchased the debt for value.

Because if there was no payment of value at origination then there is no consideration and the original claimed “debt” is unenforceable for lack of consideration — even if it is in writing, like a promissory note. That is even a defense against a holder in due course, against whom the maker of the note has few defenses.

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Thursdays LIVE! Click into the Neil Garfield Show

Call in at (347) 850-1260, 6pm Eastern Thursdays

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AS A FOLLOW-UP TO WHAT I WROTE A COUPLE OF DAYS AGO, FACEBOOK HAS JUST NOTIFIED ME THAT THEIR PREVIOUS BAN ON THE PHRASE “KEEP YOUR HOUSE” HAS BEEN LIFTED AND THE PAGES ARE NOW PUBLISHED AGAIN.

There is an Orwellian atmosphere that has developed around the lending industry and the foreclosure industry. In a world where homeownership is supposedly encouraged, information about maintaining homeownership has now become banned from Facebook — unless of course, the information comes from the banks and deals with forbearance or modification agreements that serve to solidify the fake foundation for present claims.

Facebook is now the witting or unwitting accomplice to the campaign of disinformation that has been in operation since the early 2000s. Perhaps this time it will explode in their face and in the face of the investment banks that are still currently hiding from view. The facts remain the same despite all current efforts to squelch the message (and the messenger):

Most claims of administration, collection and enforcement of mortgage “loans” are factually false. 

The law in every U.S. jurisdiction has the same safeguard adopted from the Uniform Commmercial Code Article 9 §203: Only a claimaint who has paid value can use legal process to enforce the lien. 

The securities firms who call themselves “investment banks,” acting through intermediaries, win by using presumptions of fact. Homeowners win by testing those presumptions. 

The curent Facebook algorythm blocks information that helps consumers to protect themselves against predatory tactics by securitization players and foreclosure players — affecting not only public perception but also the perception of the judicial system and law enforcement. 

The Webinar on Wednesday reveals the strategies and tactics that can be used by attorneys for homeowners in defeating claims against their clients.

So now the fight is out in the open. The banks pounced on the one phrase “Keep Your House” and have blackballed its use on Facebook. And Facebook complied without any review of the content of the posts that merely provide information or guides to homeowners seeking assistance or knowledge about foreclosure and provide registration details for the upcoming webinar.

An interesting sideline is that the working title for my upcoming book is “Keep Your House”.

So what is obvious is that the investment banks regard my posts as a threat to them and they’re right. I wish to stop them from conducting fake foreclosures using fake documents, false intermediaries, and sham conduits.

The problem I face is that Facebook instantly takes down any posts that are presumptively categorized as “disinformation” but it has no apparent way to instantly review such decisions even when they simply contain the innocuous words “Keep Your House.”

That phrase “Keep Your House” in particular is a target of the banks. They have an interest in the concealment of the factual basis for claims to administer, collect or enforce “loans.” And the last thing they want is a surge of homeowners contesting foreclosures — and winning. So Facebook procedures are aiding and betting that concealment. 

I have started the “review” process with Facebook but meanwhile, my efforts to promote the webinar on Wednesday have been partially thwarted by this most recent attack from the banks. It’s OK. I am accustomed to being attacked. And I find it heartwarming that they made the effort to slap down both my extensive pro bono work on behalf of homeowners and the webinars. The old expression comes to mind: “If you are getting a lot of flak you know you are close to the target.”

I’m a lawyer and financial analyst, not a bomber. But I am clearly over the target and the banks are getting nervous — for good reason. This is Act 3 of my long-term bid to upset their applecart.

Let the games begin.

Neil F Garfield. September 27, 2021

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See the preview of course materials for Wednesday (9/29) Webinar

All causes of action against the REMIC trustee are going to be tricky. By contract, they have no duties and no responsibility for anything that happens with the trust. In court, they never actually appear. A lawyer shows up and says he represents Bank of New York Mellon, not on its own behalf but as trustee for the XYZ Capital Trust 2, Inc. Trust, on behalf of the registered holders of certificate series 2007-A1.

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So, ahem, which one of all those entities hired him to appear in court? The surprising answer: NONE. The lawyer received electronic instructions on a computer screen without any knowledge as to the source and was allowed to assume that it had come from the company claiming to be a servicer when in fact they had never issued any such instruction because they were not allowed to do so by contract or statute.

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APPROVED FOR 2.5 CLE CREDITS APPROVED BY THE FLORIDA BAR

HOMEOWNER ATTENDANCE PERMITTED

 CLICK HERE —>Live and On-Demand Available

Follow up conference call included

CLICK HERE —>EARLY BIRD DISCOUNT EXTENDED

Examination and Challenge

of Assignments of Mortgage

Enforcement consists of the legal process in which the mortgage lien is used to force the sale of the property and thus recover a debt owed by the owner of that lien. It follows, therefore, that any purported assignment of mortgage should be the focus of attention when considering any strategy to contest the legal action. This webinar, by focusing on the assignment, develops strategies and tactics that have been successfully used in courts across the country.

INCLUDES EXTENSIVE COURSE MATERIALS<—CLICK HERE

• What to Look for in Examining an Assignment

• How to Successfully Litigate the Issues

  • Keep evidence out
  • Get evidence out that has been admitted
  • Knockdown credibility or weight of evidence that remains

• How lawyers can make money in this niche

Since 2008, GTC Honors, Inc. has been an approved host provider for CLE (for lawyers) credits in Florida and 26 other states that allow reciprocal credits for licensed attorneys announce that they are producing a seminar presented by Neil F Garfield, MBA, JD , trial lawyer for nearly 45 years and investment banker for 50 years.

A short Q&A session is included — but it is not an opportunity to seek legal opinions on specific cases. It will be followed up with a conference call 2 weeks after the presentation. The presentation will be live on 9/29/21 at 3 PM EDT or on-demand. On-demand sessions will be available after the live presentations at the price of $195.

Included in the curriculum will be business plan tips for lawyers entering what will be an exciting opportunity to win cases and profit. 

WEDNESDAY, SEPTEMBER 29, 2021

3PM EDT

2.5 CLE CREDITS

Click here to register now

for Live Attendance or

On-Demand

Curriculum:

• The Coming Challenge to Lawyers: Another Foreclosure Tidal Wave
• The Ethics of Foreclosure Defense and Foreclosure Advice.
• Why Make the Challenge?
• How to Examine the Assignment of Assets Like Mortgage Liens.
• How to prevent evidence from coming in
• How to get admitted evidence out
• How to undermine the admitted evidence 
• What to Look for in Examining an Assignment:
  • Timing
  • Complete names
  • Verified names
  • Direct signatures
  • Indirect/derivative signatures
  • Robosigning
  • Dates
  • MERS
  • Recital of consideration
  • Identified subject (asset) of transfer
  • Warranty of title to asset
  • Notices from creditor
  • Derivative notices from creditor
  • Notices from “servicer”
• How to Successfully Litigate the Issues:
  • Admissions Against Interests
  • Motion to Dismiss
  • Discovery and Definitions
  • Motion for Summary Judgment
  • BUSINESS RECORD EXCEPTION TO HEARSAY RULE
  • Motion to Compel Discovery
  • Motion for Sanctions
  • Motion in Limine
  • Objections at Trial and Cross-examination
• How lawyers can make money in this niche
• Q&A 
• Follow up conference call 2 weeks later 

Virtually all foreclosures today are based on written recorded instruments purporting to transfer title to the mortgage lien from one legal person to another.

The questions for today are different from the questions that were present only 2 decades ago when the forms, rules and procedures were developed — before present claims of securitization of debt.

Neil F Garfield, a Florida attorney and investment banker, presents the results of 16 years of research, analysis, trial appearances, expert witness presentations, and CLE presentations. In this modified course presentation, he focuses on the duties of lawyers who use or oppose assignments of mortgage, and the methods that can be used to perform expert analysis.

• Host/Provider: GTC Honors, Inc.
• Course Number 2106918N
• Provider # 1030277
• 2.5 Credits for Continuing Legal Education
• Level: Intermediate
• Approval Period: 09/22/2021 – 03/31/2023
• Presenter: Neil F Garfield
• Florida Bar Number 229318
• Sponsored in coordination with American Property Owners Network

GTC Honors, Inc. the Florida approved course provider, is a Florida Corporation, Publisher of the Livinglies.me blog and thousands of articles, treatises, and guides to successfully defend foreclosure cases in the era of self-serving declarations about the securitization of debt.

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“Tammy Richards, the former head of operations at loanDepot, said the company’s founder was behind a scheme to flout regulations.” NY Times. 

See Her Complaint Here: full

This LoanDepot case reveals how companies are “originating” loan documents without originating loans. If they were originating loans, nobody would allow or participate in any corporate culture that “approved” loan documentation and triggered some far off entity transferring money to a “closing agent” on a transction in which they had no idea whether they would ever make a profit.

In the same way, foreclosure proceedings are initiated by lawyers who do not have any client who owns an unpaid debt owed by the homeowner. The paperwork looks right, but nothing else makes sense because there is no loan and there might not be any debt — but in all events the debt (if it exists) is not owed to the claimant named by the lawyer.

PRACTICE NOTE: When you ask to see the accounting ledger on which the designated creditor shows the existence and status of the alleged loan, you can’t get it. Most people give up. But for those homeowners who pay their lawyers not to give up, they end up with a successful or favorable result. The inability to show the ledger undermines the ability to establish a prima facie case for Foreclosure. The attempt to substitute a payment history from a company claiming to be a “servicer,” can be defeated. 

In a world where news is condensed into just a few words, fraudsters escape detection and their schemes remain unknown. Those schemes are intentionally complex and appear to be obtuse.

We know that since the early 2000’s Wall Street securities firms entered the marketplace with schemes to do what they do — sell securities. They had no intention of becoming lenders subject to regulation and they didn’t — and neither did the investors who bought their unsecured “Certificates” that promised nothing with any certainty.

And now again we see a company — LoanDepot, who is often cited as one of the world’s largest “lenders”—  being accused of retaliation against an executive who refused to drink the kool-aid. She thought that the LoanDepot should be making real loans and not just acting as some sort of feeder for the securities firms on Wall Street.

Her internal reports and attempts to get the company into compliance from the inside were met with punishment.

Her complaint? That the company was “approving” loans without documentation or any history that could or would suggest that the proposed borrower had any ability to make payments. The law (TILA and state lending laws) and common sense require that every lender make that assessment. Her worry was that the company was violating the laws discussed in this article. And she didn’t want to be a part of breaking the law. Like any sane person she thought that was a bad thing.

The answer to the obvious question: LoanDepot was approving loan documentation and not underwriting any loans. 

And so once again as I have repeatedly asked since 2006, why doesn’t anyone ask “why would any lender do that?” Every loan deal is about someone paying to rent money from someone who makes money on the rent (monthly payments). If it’s not just about that, there are legal disclosure requirements that must be met and enforced, according to law. Those requirements make it mandatory to disclose to the consumer what the rest of the deal is about.

The only reason why any “lender” would not inquire about the likelihood of receipt of payments is that the payments don’t matter — or that payments are not the full story. This fundamentally changes the elements of the deal that the homeowners thought they were entering and fundamentally breaches the statutory duties — as to (1) responsibility for viablity and (2) disclosure of compensation. Obviously they are making money some other way.

The law requries LENDERS to disclose such details because the Congress, 60 years ago, decided that homeowners and other borrowers should have reasonable access to information in which they could (a) make an informed choice or decision as to who they were doing business with and (b) understand the full monetary parameters of the deal instead of just part of it. Contrary to both law and common sense, this has never been enforced nor have consumers been allowed to enforce it in the courts — even with the help of a US Supreme Court decision (Jesinoski).

But the law does not contemplate enforcement against parties who only pretend to be lenders. Wall Street securities firms can honestly say “we are not lenders.” From their perspective they merely brokered three deals — (1) the loan of money to a sham conduit or intermediary from some off shore source (e.g. Credit Suisse) for example $1.2 billion, (2) sending funds to the closing agent in exchange for securing execution of “loan” documents, and (3) underwriting the sale of securities in the name of a trust which may or may not exist — for $2 Billion.

They never said they were selling loans, so the profit between what they actually paid to the closing agent on behalf of homeowners and what they received from the sale of securities did not need to be reported. That sale paid off the off shore loan” leaving the securities firm with full contractual control over the behavior of every player without ever investing a penny in any deal.

The rather obvious enforcement action against the securities firms can probably only be done by law-enforcement or a regulatory agency, neither of which seems inclined to do so. The securities firms entered the lending market place by stealth, violating virtually every law governing lending, servicing, debt collection or just honest and fair dealing.

But law-enforcement is only concerned with the small time players who use the same tactics against the players in the securitization market. That is called “bank fraud,” or “mortgage fraud.” But what are you call it when there is no actual victim? Since there is no risk of loss on the part of any player in the securitization scenario, there can be no victim.

see https://www.nytimes.com/2021/09/22/business/loandepot-lawsuit-Anthony-Hsieh.html

The simple answer is what I have been reporting since 2006, along with dozens of others. Wall Street securities firms, which control everything in nearly all loan transactions today, are concerned with the sale of securities. They are in the securities business but not in the business of lending and they devised a securities scheme that would enable them to penetrate the lending marketplace without ever becoming lenders. Most people either don’t understand that statement or fail to recognize its significance.

The bottom line is that every borrower is legally and morally entitled to have a counterparty who is in fact a lender. That is what enables the “meeting of the minds” elements for all enforceable contracts. There is no meeting of the minds in today’s lending marketplace and in fact in most other consumer transactions, especially online, there is no such meeting of the minds.

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We are coerced or tricked into giving consent to deals we know nothing about. We get only what we asked for (hopefully) but we are not informed in any clear language about the true parameters of the deal and how we might be risking things we know nothing about or how we might lose money, reputation, privacy, our wealth, homestead or lifestyle by clicking or signing “I Accept.”

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You get an email soliciting you to call or submit information. If you don’t look at the return email address you might think it was coming from a licensed company. It even has a “Disclosure box” at the bottom name-dropping various banks and financial entities to make it look good.

First of all, this is probably a fishing expedition to steal your financial reputation and identity.

Second, even in cases where they provide “credit counseling” they might make money from such services (paid by the banks) but in all probability they are looking to originate a new loan that “consolidates your arrearages on other “loans” (whether they exist or not).

Third, they will lure you into asking for extra money and thus increasing your debt. This sometimes includes presenting you with a settlement statement that includes far more than they thought you owed including creditors you never heard of. If you sign the papers, here is what happens:

1. The old creditors might or might not ever get paid. If you do not get proof that the company offering these “services” is authorized by a bona fide creditor (see below for definition) then the entire deal is irrelevant and you still owe the old creditor in addition to having issued paper that is at least enforceable on its face to the new “entity.”
2. The new creditors you neer heard of will get some fee or might not get paid either. It could be the use of sham entities that get paid just for the purpose of creating multiple layers and fields of inquiry.
3. The party offering you this deal will get paid an absurdly high fee for selling this financial product. Payment will be indirectly from an investment bank operating through more sham intermediaries. The investment bank will issue securities that are bets or hedges on the performance of the deal without ever selling the debt — just like mortgages.

BOTTOM LINE: Consumers are food. Government agencies charged with protecting consumers are not doing their job. They’re looking for low-hanging fruit so that can announce meaningless settlements, get promoted, and then join the people against whom they brought regulatory action. And we the people, are letting it happen either because we don’t take note until it affects us personally or because we have some “ideology” that causes us to invoke “no government” when it is about our behavior and “more government” when it provides an opportunity to exercise power over people we never meant. The answer is to focus on real issues that cost us trillions of dollars as taxpayers and to vote for people that pledge to look out for the consumer and then vote them out of office when they breach their promise.

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In a land supposedly subject to equal protection under the laws, the reality is far different. The use of fraudulent documents to defraud banks lands the perpetrator in prison and all his assets seized.

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But when banks and their self-appointed servicers do it, they promise not to do it again, keep doing and then pay a fine equal to around 0.1% of their illegal windfall profits.

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Want that to stop? Go the next webinar!

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