Livinglies's Weblog

Thursdays LIVE! Click in to the Neil Garfield Show

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

Tonight we pick up where the blog left off. the important but as yet unpublished opinion and decision in California Appellate court in which an appellate court stated clearly and unequivocally stated that allegations do state a cause of action if the homeowner contends that Chase did not buy loans in the Purchase and Assumption Agreement on September 25, 2008 between Chase, FDIC and the US Trustee in Bankruptcy.

see Massoud v JPM Chase Bank

The Court agreed that if Chase was claiming ownership and authority over the loan under those it was false claim. Charles Marshall succeeded where others had failed. Tonight we discuss how he did it. 

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With 40 million people out of work so far, consumer spending dropping like a stone and the prospect of recovery still over the next hill, the cessation of relief for workers and consumers at the end of July means that by September there will be fake notices of default sent to thousands, perhaps tens of thousands or even hundreds of thousands of homeowners.

Following the past track record most homeowners will fail to contest the foreclosures erroneously believing the debt still exists in the same form and amount as when it was created (less payments made).

In districts where home values are low the investment banks, through their sham conduits will initiate forfeitures through foreclosure actions — and then abandon the property. The reasons are many but chief among them is that they don’t actually care about the money. they care about getting the foreclosure to insulate themselves from false claims of securitization of debt. The sale of the debt, you see, never happened.

That leaves the cities and counties without any legal person willing to pay taxes and fees. So far, the cities and counties have missed their opportunities. But when these zombie foreclosures hit the marketplace in January and February of 2021, they will again have an opportunity to recoup their money by suing the investment banks.

But they probably won’t because the politicians are often supported by political donations and other support from Wall Street banks. That in turn leaves the taxpayers — Federal State and Local to pick up the tab for services that are no longer being funded by assessments on those properties.

BETA TEST OF NEW SERVICE — DISCOVERY SUPPORT

Discovery

Interrogatories $495.00 USD Motion to Compel $650.00 USD Motion for Sanctions $650.00 USD Motion in Limine $650.00 USD Discovery Consult $395.00 USD Expert Affidavit for Discovery $1,300.00 USD FULL DISCOVERY PACKAGE $4,500.00 USD Req for Production $495.00 USD Req for Admission $495.00 USD Duces Tecum $495.00 USD

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Thursdays LIVE! Click in to the WEST COAST Neil Garfield Show

with Charles Marshall and Bill Paatalo

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

Qui Tam Actions generally are lawsuits in which an individual sues on behalf of a governmental entity, typically the Federal Government, with the goal of remedying a defrauding of the government by a private organization or individual. These actions typically take the form of a whistleblower exposing the defrauding actions of his or her employer. Qui tam actions in the US are often brought under the False Claims Act, a Federal law specifically empowering individuals to sue as whistleblowers to recover private funds garnered through defrauding the Federal Government.

In the foreclosure context, individuals who are connected with, or in some cases simply apprised of, the defrauding behavior, can then bring a qui tam action to remedy the fraud. As a whistleblower, the suing individual is entitled to substantial compensation, including penalties, attorney’s fees, court costs, on top of the disputed amount of the fraud. The whisteblower receives his or her compensation as a percentage of the fraud money recovered. This amount can and often does run into the millions of dollars, depending on the nature of the fraud and the amount in dispute. Bill will highlight a recent successful qui tam action and address previous qui tam matters, involving for example mortgage servicers such as Nationstar. 

Filed under: foreclosure | 1 Comment »

This was no easy task. And this is exactly the ruling that all the nay-sayers said could not happen. But it did.

https://livinglies.me/wp-content/uploads/2020/05/D075582_Opinion.pdf

D075582_Opinion.pdf

We reverse because her complaint alleges facts that could support a legal theory of recovery if she were given leave to amend.

D075582_Opinion.pdf

But Masoud’s final basis for her title claims—that WaMu sold her deed of trust to unknown third parties three years before Chase assumed its assets—cannot be so easily dismissed. In sustaining the demurrer, the trial court relied on the P&A agreement between Chase and the FDIC to conclude that Chase obtained the rights to Masoud’s deed of trust. But the legal meaning of the P&A is that Chase obtained whatever assets WaMu possessed as of September 2008. It does not exhaustively list what assets those were.

D075582_Opinion.pdf

Assuming (as we must at this stage) that the allegations of the operative complaint are true, it would mean that Chase was never WaMu’s successor in interest as to Masoud’s deed of trust and that at most, it attempted to transfer an asset it never owned to US Bank in 2011. As a result, according to Masoud, a party with no legitimate claim to her deed of trust foreclosed on her house.

D075582_Opinion.pdf

This is precisely the kind of injury envisioned in Yvanova, which held that a borrower has standing to challenge a foreclosure sale ordered by a party with no authority to do so. (Yvanova, supra, 62 Cal.4th at p. 943.) This court has further clarified that the protections of Yvanova apply only in the postforeclosure context—exactly the position Masoud now finds herself in. (Saterbak, supra, 245 Cal.App.4th at p. 815.) And on at least one occasion, this court has applied Yvanova in reversing a judgment of dismissal after a sustained demurrer when a borrower alleged her deed of trust was sold twice by the same party, rendering the second sale void and the foreclosure that followed unlawful. (Sciarratta v. U.S. Bank National Assn. (2016) 247 Cal.App.4th 552, 565.)

D075582_Opinion.pdf

other than the original 2005 deed of trust that references WaMu as the lender, the judicially noticeable documents are all from 2008 or later. They shed no light on whether WaMu, after funding the loan in 2005, assigned the beneficial interest to another party or other parties later that same year such that it had no interest to transfer in 2008.

D075582_Opinion.pdf

defendants appeared to argue that even if WaMu sold the beneficial interest in 2005 (so that there was no asset to transfer to Chase as part of the 2008 P&A agreement), it nonetheless retained rights as the servicer on the

loan.7 They suggest these servicing rights transferred to Chase in 2008 such that Chase was entitled to foreclose in its capacity as the loan servicer regardless of which entity held the beneficial interest.

D075582_Opinion.pdf

even if we could entertain the argument we would reject it. The complaint alleges that US Bank claims to hold the beneficial interest and the right to foreclose, which is fully consistent with defendants’ representations in their brief as well as the judicially noticeable documents in the record. The issue is not Chase’s role as the loan servicer, but the proper identification “of the party enforcing [the] debt.” (Yvanova, supra, 62 Cal.4th at p. 937.) Yvanova makes clear that “􏰀􏰁􏰂he borrower owes money not to the world at large but to a

particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security.” (Id. at p. 938, italics added.) Here, Masoud has alleged that US Bank wrongly claimed to be the entity to which the deed of trust had been assigned. (Ibid. [borrower “is obligated to pay the debt . . . only to a person or entity that has actually been assigned the debt”].) At this point it remains a factual question as to which persons or entities held the beneficial interest in the deed of trust at the time of the foreclosure. That Chase may have inherited servicing rights or responsibilities from WaMu does not erase Masoud’s injury if a party with no beneficial interest in her loan directed foreclosure on her house.

D075582_Opinion.pdf

Liberality in permitting amendment of pleadings, even where there have been earlier opportunities, is required by this state’s well-established public policy favoring resolution of cases on their merits wherever possible. (See, e.g., Douglas v. Superior Court (1989) 215 Cal.App.3d 155, 158.)

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Get ready for the next tidal wave of fraudulent foreclosures.

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Thursdays LIVE! Click in to the Neil Garfield Show

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

DeSantis Extending Eviction and Foreclosure Moratorium Through May: Ice in the Winter

This is a redo of last week’s intended broadcast.

Instead of taking the opportunity to review complaints about the process of foreclosure and eviction, the Governor of Florida is issuing an order that all but assures that the foreclosures will continue to be regarded as valid — i.e., based on true facts about the status of the claimed debt, the ownership of the debt, and the authority to collect, administer and enforce the debt.

The elephant in the living room is that none of these “Securitized” transactions are being treated as securitization schemes. Lawyers come to court and say “Your Honor, this is a standard foreclosure.” NO! It isn’t.

And the moratorium, such as it is, still leaves homeowners faced with foreclosures by people who have no financial stake in the foreclosure or the “loan” except the expectation of profit.

But because borrowers believe that to be true and so do most of their lawyers, the die is cast. Everyone assumes that the only thing in play is the “loan.” And yet, the courts ignore the fact that under Article 9 §203 of the UCC the claimant must have paid value for the debt — which it must be the owner of the debt because only someone who has suffered actual financial injury can bring a claim for foreclosure. That is black letter law converted to gray because of court bias.

Court bias results from a sub silentio doctrine, which is the subject of tonight’s radio show. It explains how and why the courts are getting it wrong almost every time. It isn’t because judges are out to get homeowners or because they have been  bought off by the banks. It’s because almost nobody is taking the time or energy to present the whole transaction  to the court.  If it isn’t presented, the judge has no power to rule on it. It’s Bias but it isn’t the kind you are thinking about.

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it seems that Wall Street has managed to get us thinking in terms of investor sentiment rather than economic fundamentals.

This is part of a larger pattern powered by Wall Street to get us thinking what they want us to think rather than asking simple, basic questions. And they continue to enjoy the misplaced trust of millions of investors and fund managers while they invent new ways for all of us, including our government, to lose money that ends up in the pockets of the Wall Street giants.

This is not an indictment of all of Wall Street which serves a necessary purpose in a capitalist system.

For those confused about what to do with their investments for retirement, there are no good choices. When Alan Greenspan was chairman of the Federal Reserve he referred to the stock market being a repository of irrational exuberance.

In 2016 the stock market was already overpriced if you look at fundamental elements of stock valuations like price-earnings ratio and book value. Once upon a time, stocks were mostly valued at a multiple of their CURRENT earnings per share.  If a company was experiencing growth it would get a higher multiple than a company whose earnings were flat or had moderate growth.

Then Wall Street figured out that the public could be easily duped into thinking stocks were more valuable than their fundamentals by simply switching (a) the basis for the multiple and (b) changing accounting standards.

Today the P/E ratio is mostly based upon future earnings which means projected earnings which in turn means whatever management says they want it to be. This dovetails nicely with advent of “Unaccountable Accounting” (the title of a book by Abraham Briloff in the 1960’s) in which certain transactions, defined again by management, could be reported either as “off balance sheet” or as a one time write-off separate from regular reports of earnings.

In turn this dovetailed nicely with the permission for securities brokerage firms to incorporate and go public which forever shifted risk from management to shareholders. This gave management the license to take risks with impunity and benefit from short-term gains even when the long-term result could be bankruptcy. (see 2008 financial crash).

So the stock market indexes took off like a rocket in both valuation and volume of trading. Stock prices, untethered by fundamental securities analysis, went wild. In simple language, individual investors and even institutional investors fail to ask themselves now a basic question: if the company they are researching is earning $1 per share, are you really ready to wait 50-80 years or more for it to earn back the $80 you just paid for a share of it?

In the 1990’s Wall Street referred to the dot.com bubble as “the new economy.” There is no new economy. At the end of the day, week, month or year, do I have more or less money than I had when I started? But under the Wall Street  labels and PR campaigns we have been deflected from asking such questions.

The most recent example of this was the increase in the stock indexes from early 2017 or the beginning of 2020. An 80% increase during a time when GDP increased only 9%. If we ever returned to basics the stock market would have a correction of more than 50% from current levels; but it seems that Wall Street has managed to get us thinking in terms of investor sentiment rather than economic fundamentals.

So I don’t know what is next for stock market. We just had a steep contraction of the economy but the stock market went up, which is another example of, I think, “irrational exuberance.” Or in plain words “this is nuts.”

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Very often the reason I won a case tried in front of judge or jury was that I wasn’t afraid to question the essence of the case against my client.  Chewing around the edges is a tacit admission that the essence is true and valid.

When I represented lenders most borrowers did not contest — and when they did it was always about mistakes in accounting. Unless the borrower could show which mistake occurred and when, they lost. Those are the rules. My strategy was to pin down the essence of the attack. More often than not, it did not really exist.

So now, representing borrowers, I challenge the essence of the claim — that there is a debt, it is unpaid and the named claimant has been injured by nonpayment. Most lawyers are afraid to ask the question because they think they know the answer — that the debt does exist, it is unpaid and the named claimant has been injured by nonpayment. But in transactions that have been enmeshed with claims of securitization, the answer is not what you might think.

When a military sea vessel or aircraft is fired upon, especially by a heat seeking missile, it scatters bright and shiny objects that give off heat, but whose destruction will not harm the ship in the least bit. Wall Street banks have been sharpening this strategy for more than 20 years.

Most of the technical attacks on lending, collection, servicing, and enforcing claimed “debts” and foreclosures are simply wasting the time, money and energy of the homeowner whose best defenses are a good offense.

The winning attacks or challenges consist of directing and enforcing questions and asking for documents to which the homeowner is entirely entitled by law and  by common sense.

There is no real world in which a Defendant is not entitled to know the name of the person suing him. There is no real world in which the Defendant is not entitled to know if the injury forming the basis of the complaint actually exists. And those rules, applied to collection and  enforcement of mortgages were written by bank lobbyists. So you are not twisting either the word or the intent of the rules or the laws.

I think that both pro se litigants and their lawyers are afraid to get egg on their face and that is one reason why they lose so often. If you are going after a scheme make sure you are at least threatening to kill it. Don’t be afraid to ask whether the debt exists — the answer might surprise you.

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The consent order requires SLS to pay $1.275 million in monetary relief to consumers in the form of redress and waiver of borrower deficiencies, pay a $250,000 civil money penalty, which will be paid to the Bureau and deposited into the Bureau’s Civil Penalty Fund, and implement procedures to ensure compliance with the Real Estate Settlement Procedures Act (RESPA) and its implementing regulation, Regulation X.

A copy of the consent order filed with the Bureau is available at: https://files.consumerfinance.gov/f/documents/cfpb_specialized-loan-servicing_consent-order_2020-05.pdf.

I continue to be infuriated by regulators who now know the extent of illegal collection, administration and enforcement of transactions with homeowners. The entire industry that calls itself “servicers” is mostly comprised of a fully paid, indemnified coverup of false claims leading to collection of money and forfeiture of homes that are admittedly wrongfully foreclosed but the agency refuses to require the players to undo false, illegal and fraudulent foreclosures.

The Bureau’s investigation found that since January 2014, SLS violated RESPA and Regulation X by taking prohibited foreclosure actions against mortgage borrowers who were entitled to protection from foreclosure, and by failing to send or to timely send evaluation notices to mortgage borrowers who were entitled to them.  These violations also constitute violations of the Consumer Financial Protection Act of 2010. In some cases, SLS’s violations of Regulation X short-circuited the protections against foreclosure for consumers whose homes were ultimately foreclosed upon. [e.s.]

So if you want to know why this is happening, look in the mirror. You are a voter. So if you don’t vote for people who are likely to require enforcement of our laws to protect consumers and homeowners, you are part of the problem.

And if you are not interested in being part of a homeowners association that defends and lobbies for laws that strengthen protection for homeowners, you are allowing this to continue. One way or the other, it will visit your doorstep. It will be either in the form of your own home or the effects of someone else’s problem that reduces the valuation of your home.

Think I’m overstating? Google “mortgage meltdown” or “2008 financial crisis.” Or better yet Google history of “TARP” where the definition went into constant change mode. Get the facts. Then decide for yourself based upon facts.

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The creditor is by definition the party who claims to own the debt. If they own the debt then they are reporting the debt as an asset receivable on their accounting records. Since investors do NOT buy homeowner debts, there is no party anywhere that is a creditor. If there is no creditor, there can be no debt, because there is nobody entitled to receive payment.

Current law is slightly muddy; however common sense combined with common law should do the trick. But Judges, scared of toppling the entire financial system continue to find ways of making it difficult if not impossible to learn the name and address of the party claiming to be entitled to payment on obligations arising from transactions with homeowners.

This has opened the door to widespread fraud. Lawyers can come to court claiming they have a client and only implying that the client is a creditor. The fact that it is untrue neither subjects them or their client to discipline or liability because of something called “litigation immunity.”

Virtually all claims of “securitization of debt” are false. This is certainly true in transactions with residential homeowners. The reason is simple: investors, who are supplying the money for “the scheme”, are NOT buying any right, title or interest in any debt, note or mortgage. AND investors get paid based upon an entirely different formula which is applied regardless of whether or not the homeowner is making payments.

The reason why identification of creditors is consistently stonewalled is also simple: there isn’t one.

So whether it is a demand for a monthly payment or it is a foreclosure proceeding invoked, it is not happening because anyone got hurt or lost money. Everyone still is getting paid because most of the cash flow for their payments comes from the creation, sale and trading in unregulated securities — not “loan” payments. But this is counterintuitive (i.e., not believable in the context of common knowledge). As a result nearly everyone, including the homeowner who is falsely cast as a borrower, believes that here was and remains a loan of money that the homeowner has not repaid.

So thus far, because of the erroneous assumptions in “common knowledge”, everyone comes to court with the wrong idea. The results are not surprising:

1. Foreclosure mill lawyer makes untrue representations that are assumed to be true as to status of a “loan” and the amount due and the party to whom it is “owed.”
2. Borrower, even though counsel, admits the “loan,” and thus admits that there is an amount due and owing.
3. Counsel for borrower has no idea that he/she is admitting that there is no defense except for technical objections in the declaration of default or in accounting.
4. The judge assumes there was a loan and that the claimant is seeking to collect on it because the uduge must assume that in the absence of a contest by the homeowner. Even if the homeowner does contest, the judge will typically not regard the challenge as credible.
5. Nobody gets mad because they are thinking that after all there was a loan and it hadn’t been paid. Nobody is thinking injustice because the proceeds of the forced sale and forfeiture of the homestead are being used to pay down the debt.
6. So the Judge is presented with a “challenge” that starts with an admission of the loan, admission of the debt, admission that it is unpaid, but a technical objection to its enforcement because the debtor does not believe, but cannot prove that the party claimed to be represented by counsel is a real creditor.
7. The Court adopts, sub silentio, a tacit judicial doctrine that enlarges the requirements for filing and pursuing judicial foreclosures beyond the statutory conditions precedent for filing such an action. The doctrine requires ultra vires judicial action in which the State statute adopting Article 9 §203 of the Uniform Commercial Code is rewritten only for purposes of foreclosure actions.
8. 1. Specifically, the statute requires that foreclosures be brought only by parties who paid value for the underlying debt; but the doctrine negates that statute and substitutes an unfounded assumption that eventually the proceeds of foreclosure will be used to pay off the underlying debt to an unidentified and unknown creditor. That assumption is factually, legally, ethically and morally wrong. Adherence to it promotes an unjust result.
9. Unchallenged as such it becomes the law of the case with each new ruling by the court and the final order or final judgment entered by the court.
10. Even readers of this blog don’t get it. If the loan obligation of the homeowner ever existed in legal terms — i.e., enforceable by laws of contract — and even if it still exists, the fact remains that this was never a loan and that the transaction with the homeowner was part of a larger transaction and a larger contract that is recognized at law as quasi contract or under quantum meruit because of the fact that the larger scheme, and all of its profits, were never disclosed to the homeowner. Until that larger contract is alleged and proven by both sides, there can be no enforcement of any obligation of either party.
11. The terms, conditions, consideration and obligations of the parties can only be determined when the court has the entire securitization scheme under review. Without the creation, sale and trading of unregulated securities there would be no money to fund transactions with homeowners. Without the transactions with homeowners there would be no securitization scheme. Under  single transaction analysis or step transaction analysis the conclusion is clear. The transaction with homeowners is inextricably entwined with the securitization scheme such that one cannot exist without the other. In that context, attempts at invoking foreclosure are invitations to the court to ignore offsetting obligations owed TO the homeowner and to focus only on obligations owed FROM the homeowner. In courts of equity and law, this is invites error and injustice.

And one of the big problems is a very real conflict between two very real necessities in jurisprudence concerning the behavior of lawyers and their clients. On the one hand lawyers and generally their clients must have litigation immunity to prevent them from being targets every time their client loses a case. This is unalterably true even if you don’t like it.

On the other hand, lawyers and their clients have a duty of performing due diligence inquiries to satisfy themselves that there is at least a shred of truth to the position they are being hired to advocate for their client.

And on the third hand, lawyers must not mislead or misrepresent facts to the court, but it is not a misrepresentation unless the lawyer knows it is a lie. And the lawyer does not know it’s a lie if his due diligence failed to uncover the truth.

In short, there is an abundance of plausible deniability fueling the foreclosure spree that began in 2001.

Lawyers are not required to swear or even assert that the named claimant or plaintiff is actually their client. In situations where securitization is claimed the named claimant is not a client of the law firm invoking the process of forfeiture through foreclosure.

Normally such law firms get an electronic message with electronic information and they are told to utilize the services of a company who will be referred to as a servicer. The law firm is given these instructions from an unknown source commanding that the claim to be initiated in favor of a designated entity.

Here is the rub: nobody from the law firm ever speaks with or is otherwise taking instructions or questions from any living person who works for any entity that has been identified as the claimant or Plaintiff. The law firm is relying upon its receipt of electronic instructions that that have not been tested.

So the way to deal with this and get to the nub of the problem is to ask for the identity of the creditor and the status of the claimed obligation. And in many states you are entitled to get it, but enforcement of that right is troublesome in the context of false claims of securitization of debt.

And that is where we run into litigation immunity and the right to obtain payoff statements. The tendency in the courts now is to require law firms to turn over payoff statements provided by “the client” and definitely from a “servicer” for “the client.” But none of those statements ever contain a representation, guarantee or warranty that the named claimant is a client, that the named claimant is a creditor, or even that the obligation still exists and has not been extinguished off the books of every participating entity as an asset receivable.

The authors of the leading treatise on mortgages in the United States state that even in the absence of statutory law “mortgagees have a duty to respond reasonably and promptly” to inquiries regarding payoff statements. And that “the whole system of mortgage finance would break down if mortgagees refused on any wide scale to provide the needed information.” 1 Real Estate Finance Law §2:4 (6th ed.).

The Restatement (Third) of Property: Mortgages §1.6 imposes a duty on a mortgagee, even in the absence of an applicable statute, to provide information regarding the balance due and status of an obligation to the mortgagor and others, on written request, and that a mortgagee who discloses erroneous information is liable for the damages caused by the failure or error.

Under the New Jersey Home Ownership Security Act of 2002 (HOSA), N.J.S.A. 46:10B-25f, a creditor’s failure to provide payoff balances within seven days after a request is an unlawful practice under the New Jersey Consumer Fraud Act implicating treble damages, N.J.S.A. 56:8-19. And HOEPA, 15 U.S.C. Sec. 1639(t)(2), requires creditors to provide payoff balances within five business days of a request.

With the crush of mortgage foreclosures today in New Jersey and elsewhere, public policy should override the LP to ensure that borrowers, especially homeowners, are guaranteed accurate payoff and reinstatement figures during the foreclosure process.

https://www.law.com/njlawjournal/2020/05/07/mortgage-payoff-statements-should-not-be-privileged-communications-pending-foreclosure/

Filed under: foreclosure | 4 Comments »

No “almost” about it. The key to home prices — proven over the last 140 years (see Case Schiller index) , is median income. Median income is what determines home value. Home value cannot be manipulated. But home PRICES can be manipulated. The difference between the two is what causes booms and busts.

And the ability to confuse consumers into thinking that home value and home prices are the same is what enables market manipulation. In the past, the only major factor as a restricting force in the marketplace was the risk of loss to lenders. Wall Street eliminated that risk of loss and now uses servicers and foreclosure as a means to gain extra profit.

So it is not a matter of thinking that this is almost like they planned it. It is exactly the way they planned it.

PRACTICE HINT:

One seemingly innocuous question or discovery demand could address this issue. You could demand identification of the party who received the interest payments of the homeowner as interest income and/or as return of principal due.

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The point which everyone still has a hard time understanding is that there is no such party. That leaves the foreclosure mill trying to explain how a foreclosure is justified in favor of a party who is neither owner of the loan nor the legal representative of anyone who does own the “loan.”

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The issue presented elsewhere on this blog that there is no “loan” once the transaction is subject to claims of securitization does not need to be reached. But it should be implied in argument, since that is the best tool to fend off the free house myth. Arguing that we have no way of knowing the true nature of the transaction, who was involved and how they were making money. Just because we don’t know doesn’t and shouldn’t mean a negative inference for the homeowner. This argument opens the door to the possibility that while the “borrower” may be getting the house, it could only be a completely just and proper payment for securing intangible rights to resell the homeowner’s private data and engage in a widespread securities scheme involving issuance and trading of unregulated securities. The tactic here is to reframe the issue from a windfall for the homeowner to the possibility that the homeowner is being justly paid and not unjustly enriched. 

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You defend the discovery demand by simply saying that the defense narrative as set forth in the answer and affirmative defenses or the TRO complaint is that this claimant is not the party who is foreclosing even though it is named as the claimant and that the underlying debt is not owned by the claimant or anyone who is represented by the claimant.

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Maybe you get an affidavit from a CPA that says that if it is a loan and the debt represents the obligation in the loan then the interest paid by the borrower must be booked as interest income by the owner of the debt. Maybe the CPA would be willing to state categorically that if a party does not show interest income rom the loan when the interest payments were being made then it cannot be the owner of the “loan” debt.

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Note my careful use of words here. I know that there is no such party in existence. Nobody is reporting interest income as owner of the debt, but investors are reporting cash flow and revenue from their “investment” arising from certificates purchased from the investment banker.

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Under the slippery labels used in false claims of securitization of debt, some of the money paid to investors might be reported as interest income; but in no case is it actually interest income because the investors never purchased any share of any flow if interest or principal cash flow.

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And in tax cases it has been repeatedly been concluded that investors have no right, title or interest in any debt, note or mortgage nor any enforcement or collection rights or even the right to demand that the REMIC trustee exercise rights to demand repurchase of “bad loans.” The reason is simple. Neither the trustee (i.e., the trust) nor the investors owned any loans — even if they thought they did.  

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But remember this if nothing else. Don’t bother making discovery demands if you don’t have the intent, resources and motivation to enforce those demands. You will not get any meaningful response. You will always get obfuscation, objections and motions to strike. You must be prepared to persuade the judge that you are entitled to a proper direct answer to the question or direct response to the demand for production.

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That means a motion to compel, a hearing, and hopefully an order from the judge compelling the response. Still no response will be forthcoming. So that means a motion for sanctions — for violating civil procedure and a court order. Hopefully another court order. It also means taking advantage of the inability of your opposition to respond and to start persuading the judge that it is now YOU who are entitled to the presumption that they are not the creditor and that they are not an authorized representative of a creditor. That could mean a motion in limine to prevent them from introducing evidence to the contrary since they failed to produce or respond in discovery. And it means preserving your position by objections at trial that are both timely and properly framed.

FREE REVIEW:

Filed under: foreclosure | 5 Comments »

The interesting thing is that the cost of producing an expert witness has just been cut by Coronavirus and COVID 19. Experts can testify via various video mediums that are now appearing in most courtrooms. So what had cost thousands of dollars in travel expense and time expense in travel has been eliminated. And in most cases the time expense for both preparation and appearance at deposition must be paid by the opposing side. Once they do that you might get the judge to accept the video deposition in lieu of live testimony. (No guarantees).

But the remaining caveats about expert witnesses remains the same. While there are a few good expert witnesses around (besides myself) most of them won’t stand up under the fire of cross examination. Bill Paatalo is a good example of an expert who knows what he is talking about and can defend it on cross examination. And like me he has a good track record of being instrumental in either favorable decisions inc orut or favorable settlements out of court or both.

Don’t underestimate the position. The will do anything to wear out or dismantle an expert. I once had my deposition taken by 16 banks for 6 straight days 9am to 5pm. It was brutal, but I survived and they never transcribed the testimony. It was a class action MERS case; unfortunately the judge ruled that the class could not be certified which had nothing to do with my testimony that MERS was the equivalent of any fictional character like “Donald Duck.” The point is — can the expert’s testimony survive 48 hours of cross examination?

You need to be careful with this. Just because somebody calls themselves an expert doesn’t mean that they are an expert. An expert is someone with greatly Superior knowledge about something that is not easily understood by the trier of fact. And just because someone thinks that they’re an expert does not mean that a judge will let them testify as an expert or, even if they do, that the judge will give any weight at all to what the “expert” says.

Filed under: foreclosure | 3 Comments »