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MISSION STATEMENT: I believe that the mortgage crisis has produced manifest evil and injustice in our society. Pretenders with more money and more lawyers than any consumer or borrower are stealing homes from homeowners while they undermine the investments by Pension Funds.

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Tonight! What is my defense narrative in foreclosure? 6PM EDT

If you don’t completely understand your defense narrative, neither will the judge! If you don’t have a defense narrative in mind, you don’t have a defense. 

Thursdays LIVE! Click in to the Neil Garfield Show
Tonight’s Show Hosted by Neil Garfield, Esq.
Call in at (347) 850-1260, 6pm Eastern Thursdays

The defense narrative is a blueprint for guiding the strategies and tactics of defense of a foreclosure action. It is not necessarily what you say to the judge or write in a pleading or memorandum. It is your theory of the case. In all court cases the litigants are required to make certain assumptions of fact and law to arrive at a conclusion that is satisfactory. If you don’t have a case narrative then your presentation will be chaotic and will not be persuasive, because it doesn’t make any sense.

This is a program intended to expand your awareness of procedural law which is the basis for all judgments and orders entered by any court. The rules of procedure and the laws of evidence, presumptions and inferences are not well understood by most lawyers much less pro se litigants who have no legal training. But procedure is where the homeowner can win — if you understand your own side of the case. That is the defense narrative.

Homeowners win because of one simple fact: the opposition doesn’t have the goods. The opposition doesn’t own the debt. The opposition isn’t seeking to recover on a debt because they have no intention of turning any money over to anyone who actually owns the debt because they paid for it.

Dorian Grey: Loan Agreements have changed without detection by the courts

The normal loan agreement is based upon certain accepted and presumed elements. The borrower desires to borrow money, he/she gets a loan of money and signs documents in favor of the lender setting forth the terms of repayment. The lender, who is responsible under TILA for the viability of the loan, makes the loan with the expectation of being repaid and earning a profit from interest and fees. The borrower relies upon the lender’s desire to be repaid and the lender relies upon the borrower’s intent to repay the loan according to its terms.

 

When the Federal Truth in Lending Act was passed — 5 decades ago — Congress made findings of fact that lenders were overreaching and even cheating consumers in loan transactions. So they passed laws that govern every mortgage loan. Those laws put the burden of viability of the loan on the lender. They also required disclosure of t he actual lender so that the consumer borrower had a choice about who he/she wanted to do business. And most importantly disclosures were required that revealed all compensation, commission, bonus or profit paid to anyone arising from the loan transaction.

 

Securitization as a theory would not have disturbed any of those rules (Reg Z) and laws (TILA). But as practiced it was warped into something unimaginable even to the PhD’s working at the Federal Reserve. By the late stage at which the FED woke up and realized what had been done the ongoing damage to homeowners, communities, cities and states had advanced far beyond anything that most analysts imagined was possible.

 

Unknown to all but a select few in underwriting investment banks, the loan agreement was enlarged to include elements that were unrecognizable even to experts. The borrower was led to believe that the loan agreement had not changed and that he/she was receiving all the necessary disclosures. The borrower was led to believe, by law, that the lender was taking responsibility for the viability and repayment of the loan.

 

But what had changed through the process of labeling parties and documents was that lenders were no longer lending money and even the parties who set up “warehouse lending” agreements were not lending money because they were all funded by investment banks who were using money advanced by investors who bought “certificates” that were, at the time of sale of the certificates, not tied to any list of loans. Thus table funding became the norm. More importantly the actual lenders, the investment banks, would not have entered into the loan agreement without the sales to investors. The signature of the borrower became extremely valuable — a fact unknown to consumer borrowers and which is still largely unknown or not well understood.

 

This scheme resulted in an average of $12 of revenue for every dollar loaned. Such revenue or compensation was unimaginable until the investment banks split the debt from the paperwork. Contrary to the borrower’s understanding of the loan transaction the goal of the investment bank was not to take a risk on nonpayment, but to obtain the borrower’s signature for the sole purpose of creating a paper infrastructure above the signed loan documents. The investment bank has little interest in the viability of the loan and whether it is paid back. They were trading not on the debt but on the collateral.

 

Thus the relationship was different and much larger than the one presented to borrowers and inverted the incentive of the real lenders to make any loan rather than good loans likely to be repaid. The implied or actual contract was that the consumer borrower was contributing their signature , credit reputation and their homestead to a deal in which most of the revenue and profit was continually hidden and concealed contrary to the laws and rules expressed in TILA.

 

The main interest of the investment bank is to preserve the securitization infrastructure which is far larger than the underlying loan, whose existence is kept alive by a variety of ruses solely to preserve that infrastructure. Foreclosures are initiated  for nonpayment not to get payment but to produce revenue. The monetary  proceeds from foreclosure sales is distributed to the investment bank and its affiliates as revenue and not to pay down the debt, the existence of which is maintained as an illusion to justify the existence of the derivative instruments sold that derive their supposed value from various elements of the loan — principal,  interest, collateral etc.

Since the law of contract starts with the intent of the parties it may fairly be said that there was no meeting of the minds because the true nature of the loan transaction was illegally concealed from the consumer/borrower. It is obvious that the borrower was directly intending to enter into one contract while the investment bank, acting indirectly through conduits was entering into another contract that entirely altered the scheme of interest, principal and cash flow.

 

In the end nobody owned the debt who paid value for it —  a key component because only a party who has paid value for the debt may enforce the security instrument (Article 9 §203 UCC). The investors had paid value but never received ownership nor any right to enforce any debt, note or mortgage from consumer/borrowers. In foreclosures all documents had to be fabricated and forged to create the illusion that the paper trail was evidence of the money trail.

 

The investment bank had paid value using investor money but also never received title to the debt, note or mortgage and then the investment bank sold all elements of the debt to multiple third parties who were essentially betting on the outcome of the cash flow or the value of the loans or the value of the “certificates” that served as the ground floor of the derivative infrastructure.

 

This loan agreement viewed from the perspective of both the borrower’s point of view and the lender’s point of view was not a mirror (as required by contract law) but more like a picture of Dorian Grey in which reality masks the corruption of what had been a sacrosanct commercial transaction.

This opens the door to defensive claims of unjust enrichment when the loan agreement was executed and a new claim for unjust enrichment when the foreclosure ends with sale of the homestead property.

Update on MERS

Just assume that everything is a fiction and none of it is real. Then set out to create the inference against the use of key legal presumptions necessary for the foreclosure mill to establish a prima facie case. Those presumptions lead to conclusions that are contrary to facts in the real world.

The answer is always the same. MERS is a data storage  company that has no ownership of the data, or any documents that contain references to data, events, payments, assets or liabilities. The MERS database in intentionally unsecured — anyone can get access with a login and password which are easy to obtain.

The first reason for the looseness of data entry, maintenance and reporting is that the only real purpose for MERS is foreclosure. It is not used by anyone for any other purpose.  The second reason for the looseness of data handling is that even its members and users know that it is not admissible in court. As far as I know, nobody has ever tried to foreclose using data from MERS.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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MERS. it is merely a naked nominee. In some states it is banned. The holder of a mortgage or the holder of a beneficial interest in a deed of trust is required to be the owner of the debt, which is somebody who has paid value for the debt. Check state law.
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But the assignment from MERS has more problems than that. MERS is basically an agent. The principal is defined as the party who has been labeled as the “lender.”
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The designation of MERS usually includes “its successors and assigns.”
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That is the place where the Foreclosure Mills and the banks try to stuff in third parties who have no connection with the loan. Since MERS is merely a naked nominee, the only party that could issue instructions to MERS is the “lender” or its successors and assigns.
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Why would they do that? Revenue! The foreclosure process in most instances is a revenue scheme and has no relation to any plan, scheme or process by which the result is restitution for an unpaid debt.
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In most cases, by  the time the foreclosure process is started, the “lender” is dead and nobody has acquired its assets, liabilities or  business. There is no successor. So there have been many cases in which a judge has decided that a document supposedly executed on behalf of MERS by someone on behalf of a company that is labeled as “attorney in fact” is void in the absence of foundation testimony or documents showing that the interest of the “lender” has actually been transferred by way of payment to a transferee.
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MERS is not a servicer and MERS is not the owner of the debt. It has bare naked legal title to mortgages.
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There are no successors in interest or assigns with respect to either MERS or the “lender.” Since MERS does not possess and even disclaims any financial interest in the debt, note or mortgage, it may not execute any document of transfer except on behalf of the “lender” on the mortgage deed or deed of trust, or on behalf of a genuine successor to the “lender,” the document signed on behalf of MERS must be void, and not voidable.
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This is where many attorneys and pro se litigants miss the mark. they fail to parse the words and thus fail to recognize the Achilles heel in any chain of title which is dependent upon the transfer of any interest in any mortgage by or on behalf of MERS.
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The label of “authorized signer” is a lie on many levels. The signer has no corporate resolution from the Board of Directors, appointment by an actual officer with administrative duties at MERS, nor any employment by MERSas employee or as independent contractor. The person who signs is not paid by MERS.
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The person who signs is the employee of one of three entities — (a) the foreclosure mill (see David Stern), (b) the party claiming to be an authorized servicer of an entity who also does not own the debt or (c) an outside vendor who specializes in fabricating documents to “clear up” (read that as falsify) the title chain.
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In most cases there is no power of attorney executed by any employee, officer or director of MERS. But even in the rare instances where such a document has actually been properly executed and dated, the Power of Attorney cannot create any right, title or interest to any debt, note or mortgage.
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You need to keep their feet to the fire. If you don’t successfully attack such issues the presumption will prevail — i.e., that the chain of title is perfect. If you do attack those issues the presumptions fail and in addition to MERS being naked so is the foreclosure mill and the claimed labeled servicer.
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As always you will do well if you presume the entire foreclosure is a fake process in which the foreclosure process is weaponized to obtain revenue instead of restitution for an unpaid debt. Just assume that everything is a fiction and none of it is real. Then set out to create the inference against the use of key legal presumptions necessary for the foreclosure mill to establish a prima facie case. Those presumptions lead to conclusions that are contrary to facts in the real world.

Finding a Lawyer to Defend Foreclosure

Most lawyers have dropped out of the game because they don’t know how to win or make money. No loss to homeowners who really want to contest a foreclosure based upon lies and fabricated documents.

Foreclosure experience is NOT necessary. Trial skills and experience conducting trials (especially jury trials) are best. Personal injury lawyers usually possess these skills.

All that is needed is a lawyer who is willing to admit he/she might not know everything and who is open to the possibility that the foreclosure is based upon lies and fabricated/forged documents.

Avoid lawyers who demonstrate a belief that you are getting a free ride. They will never put their heart into it.

Lawyers don’t owe you anything. They are under no obligation to talk with you or do anything for you. Yes they are part of the legal system but they didn’t put you in your current position.

They cannot, under the disciplinary rules, take a case on contingency for two reasons:

(1) the lawyer cannot contract for a contingency that is adverse to the interest of his/her client. The common contingency fee is 40% of the value received. That could be your house unless you have assets that would cover the fee. The lawyer’s interest in the house would be adverse to your own.

(2) The final settlement, verdict or judgment rarely includes an award of damages  although it would be more common if lawyers pursued it. So asking a lawyer to accept the case on contingency is equivalent to asking the lawyer to work for free.

Fees vary from lawyer to lawyer and venue to venue. I generally charge $650 per hour because of nearly 43 years of trial experience, 50 years of investment banking experience, and my status as an expert witness on investment banking and securitization of debt. In New York I would be charging $2,000 per hour, which includes every waking moment I give thought to a case. I don’t believe any lawyer charges less than $200 per hour and if he/she did they would be valuing their services under market which might be what they are worth.

I have mostly retired from the courtroom with the exception of certain legacy cases. But you don’t need me to try your case. Most decent trial lawyers charge between $350-$450 per hour. If a proper affirmative defense or counterclaim is filed within the period of time allowed by the statute of limitations there is a possible award of fees and some lawyers are willing to  take a chance on that as long as part of their fees are paid by the client.

The principal problem in finding a lawyer seems to be that homeowners have just enough knowledge to not make sense to a prospective lawyer and then  get angry that the lawyer was unwilling to go to bat for them. If you walk in with a comprehensive case analysis and recommendations on strategies and tactics then the lawyer does not need to think about rummaging through a bunch of facts and document to find a defense.

Your job as homeowner is to get the lawyer to come to the phone and join a conference call with me or any number of other lawyers who have won foreclosure cases for homeowners. It sells itself if the lawyer sees a payday and a good chance to win — a 65% chance if you are willing to pay him to go the distance.

ONLY A COURT ORDER ISSUED BY A STATE OR FEDERAL COURT CAN STOP A FORECLOSURE SALE OR EVICTION. CONSULT WITH LOCAL COUNSEL ON ALL MATTERS.
Failure to challenge the foreclosure in a court of competent jurisdiction will ordinarily result in a sale of your property.
Nothing contained herein should be considered definitive and you should not use this email as a substitute for getting advice from a lawyer who is licensed to practice law in the jurisdiction in which the property is located.
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Beware of Bank and Foreclosure Mill Labels — That is where the lies start

BEWARE OF LABELS: THE BANKS AND THE FORECLOSURE MILLS GET AWAY WITH MOST OF THEIR DECEIT BY SIMPLY USING SELF SERVING LABELS.
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For example, by labelling something as a servicer advance it presumptively means that it was an advance by a servicer that is die back to the servicer because it was advanced on behalf of the owners and holders of certificates issued in the name of a labelled trust using a labelled trustee as its putative administrator.
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By reading the Prospectus and Trust Agreement you find that these labels
are used to create illusions.
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The labelled servicer to whom the money is paid has never serviced anything. The money was paid from a pool of money derived entirely from advances by the investors who bought certificates. Thus the receipt of money by the servicer is pure revenue under GAAP but treated as return of loan for tax purposes.
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So for example if the loan was $300,000,  and the property is worth $180,000 the Master Servicer continues to make payments to the investors even though no payments are made by the borrower up to the point of around $165,000, which is when they foreclose and claim all the proceeds as servicer advances. This is why ten year or twelve year foreclosures work to the benefit of the labelled “Master Servicer” who is actually the lead (bookrunner) investment bank.
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The labelled certificates convey no right, title or interest to the debt, note or mortgage and therefore are not “certificates” but only unsecured promises masquerading as bonds or debentures with no equity interest. They are called “mortgage-backed” but they are not backed by mortgages.
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The trust owns nothing and therefore with nothing entrusted to the trustee on behalf of named beneficiaries there is no trust.
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The labelled trustee has no powers of administration over the active affairs of a trust. Therefore it is not a trustee which is why they never appear in court.
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The sole beneficiary of the trust, which is a sham conduit for the investment bank, is the investment bank that sold labeled certificates to investors whose money was put in suspense and entirely controlled and owned by the investment bank.
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The labelled “Master Servicer” is the investment bank.
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The devil is in the details. Ask the right questions in discovery.
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An assignment of mortgage (or beneficial interest under a deed of trust) without a purchase of the debt is a legal nullity. The assignment is nothing unless and until the party claiming ownership of the mortgage has paid value for it. Calling it an assignment of mortgage does not make it an assignment of mortgage.
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An assignment of mortgage from a party who had paid value for the debt at the time of the assignment, is a legal nullity, and continues to be a nullity until payment of value for the debt is tendered and received.Calling it an assignment of mortgage does not make it an assignment of mortgage.
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Similarly, an endorsement of a note by a party who neither owns the debt nor represents a party who owns the debt and ahs paid for it is also a legal nullity. Calling it a note endorsement does not make it anote endorsement.
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Calling a separate piece of paper with no foundation an allonge does not make it an allonge. An allonge is part of the note firmly affixed ior written directly on the note.
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The most frequent successful objection at trial is lack of foundation.

What to say about your TILA Rescission

see https://livinglies.me/2019/10/11/update-and-review-of-tila-rescission-15-u-s-c-%c2%a71635-beach-v-great-western-fla-and-beach-v-ocwen-federal/

I think you need to emphasize more that rescission is an event that takes place upon the mailing of the notice of rescission. The error of the lower courts all stems from the fact that they treat TILA rescission as a claim. They either do it directly in direct conflict with the Jesinoski decision or they are doing it indirectly by characterizing the position of the homeowner as pressing a claim under the Truth in Lending Act. Neither one is true.

If you are pressing a claim for a remedy under TILA and more than one year has passed you are most likely barred by a one year statute of limitations on TILA claims. But you don’t need TILA after you sent the notice of TILA rescission within 3 years from the date of the loan closing.

This is where the courts, who hate TILA and are revolted by TILA rescission, twist the facts and the law if you let them. The key is to be clear on what you are doing and what you are not doing.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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The homeowners claim is based on title which was affected on the day that rescission became effective.

TITLE CHANGED THAT DAY AS A MATTER OF LAW.

The remedy is under State statutes and common law for ejectment, eviction, and a declaration of rights, together with mandatory and prohibitive injunctive relief, and possibly damages for trespass. None of those arise from ANY remedy set forth in the truth in Lending Act. The matter is in controversy solely because the creditor or the alleged representative of the Creditor failed to comply with the Statute by filing a satisfaction of mortgage.

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The error of the lower courts is in misconstruing the claim of the homeowner. Judges do so intentionally and happily since they do not approve of a homeowner canceling a loan agreement with the stroke of a pen — but that is exactly how the law reads and for good reason. It was either that or create a huge Federal Bureaucracy to review every closing — because consumers were clearly helpless compared with the sophistication of financial institutions and non-bank lenders.
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The findings of fact adopted by Congress and the President when TILA was discussed and passed in the 1960’s was that mortgage closing documents are impossible for the average borrower to read, much less understand without degrees in law and finance.
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So Congress passed specific laws concerning specific disclosures in plain language that the borrower could understand without being deceived or mislead. Specifically the true facts about viability of the loan — which is the burden of the lender, not the borrower —must be disclosed in detail.
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In addition ALL compensation of every kind arising from the borrower’s signature on the loan documents must be disclosed. But in fact compensation was NEVER fully disclosed where securitization was in play. Thus TILA rescission was almost always justified.
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If those requirements were not met to the letter, the parties acting as lenders were subject to draconian penalties —
  • first, loss of interest and fees
  • second loss of the note,
  • third loss of the mortgage encumbrance, and
  • fourth, loss of the entire debt.
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Where notice of TILA rescission was sent years earlier than the date that foreclosure was allegedly started, the simple defense is that foreclosure impossible because the mortgage does not exist because, as a matter of law, it was canceled and rendered a legal nullity (void) the day that the notice of TILA Rescission was sent. Since the foreclosure was a legal nullity it can always be attacked for lack of jurisdiction which cannot be waived.
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In a Quiet Title Action or Petition for Declaratory, Injunctive and Supplemental Relief, the homeowner is not seeking enforcement of the statutory duty under TILA, although it may be possible to do so. Homeowner is seeking to prevent and prohibit anyone from asserting any rights in connection with the property arising from a mortgage that exists in the title record solely because one or more parties violated the statutory duties set forth in the rescission statute 15 U.S.C. §1635. As the owner of the property in fee simple absolute the homeowner obviously has standing to protect their title interest and the quiet enjoyment of the property.
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But the courts insist on treating the mere mention of a prior notice of rescission as a claim, then applying the three year limitation they conclude that the homeowner has no standing to raise it. Somehow lawyers are not following simple logic. It’s just another example of how the lower courts are twisting the law. The decisions in the Beach and Jesinoski cases make it clear what happens in TILA Rescission. The ONLY way that a court could arrive at the erroneous conclusion that the homeowner lacked standing is by characterizing their deed as a claim.
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Such a characterization is not just error. It is tomfoolery. If such decisions are not reversed it paves the way for a day when nobody’s title is clear and marketable because a warranty deed in fee simple absolute could then be regarded as a claim that somehow had to be renewed periodically. No such law exists. No such law can exist in an orderly society.
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PRACTICE NOTE:
Although there are various statutes of limitation arising from claims for remedies under TILA, RESPA, FUDCPA, and other statutes, practitioners are directed to strategize based upon affirmative defenses using the same facts and the same violations. In most, if not all states, such defenses are not barred by any statute of limitations, since they are not technically claims for which the homeowner has filed suit.
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Thus you might not be able to claim damages but you can claim an amount that should offset the monetary claim against the homeowner. Between statutory damages,, attorney fees, and common law claims for consequential and even punitive damages there may be enough to entirely offset the total claim against the homeowner, thus negating the foreclosure action.
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In filing an action for quiet title or my preference, a Petition for Declaratory, Injunctive and Supplemental Relief, you should name all known parties who are sued because they have or could claim some interest in the property.
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These would include all servicers, past and present, as well as the original named lender, the aggregator (like Countrywide), the Depositor, the underwriter, the seller, the named trustee and the trust.
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The allegation should be simple and direct: none of these parties have any interest in the borrower’s payment or nonpayment of the debt because none of them have paid value for the debt and therefore none of them has ever received title to the mortgage. (A transfer of mortgage without the debt is a legal nullity).
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If the void foreclosure has been completed on paper, you need to undo it on paper with a court order arising from your client’s ownership of the property unencumbered by the mortgage or deed of trust.
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If eviction or writ of possession has resulted from the homeowner being dispossessed of the property, then various claims for damages from trespass, slander of title, etc. might apply arising from the completion of the foreclosure and not from the initial loan closing. Under the right circumstances you might even allege and prove punitive damages.
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A good case for punitive damages can be made if you can show or infer that in prior foreclosures, as well as the one at Bar, the claimant was not the recipient of title or the proceeds of sale, both of which were held for the investment bank who   sold certificates to investors. Hence, the proceeds of foreclosure were never meant to pay down the debt but instead result in revenue by defrauding the court and the borrower.
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Update and Review of TILA Rescission 15 U.S.C. §1635 Beach v Great Western (FLA) and Beach v Ocwen Federal

Having received numerous inquiries regarding Rescission under the Federal Truth in Lending Act, I’ve decided to provide a short guide. in this article I will not examine types of loans that are subject to rescission. The purpose of the article is to explain how and when TILA rescission can be used.

see BEACH v. GREAT WESTERN BANK | FindLaw

  1. Under 15 U.S.C. § 1635 certain Borrowers have a right to cancel the loan transaction, rescind the note, the mortgage, and all payments made under the loan contract. Upon sending the notice of rescission, the rescission becomes effective by operation of law. That means that title has changed and nobody can reverse it except by a new agreement between the parties or a court order resulting from a timely action brought by the Creditor who no longer relies on the void note and the void mortgage to assert standing, and who contests the underlying assumption that the disclosures at the loan closing were inadequate.

  2. To my knowledge no such action has ever been brought for one simple reason, to wit: a creditor who files such an action would need to allege that “Plaintiff/Petitioner is the owner of the debt and has paid value for the debt.” And “Plaintiff/Petitioner has suffered financial injury through nonpayment of the debt by the borrower.” Based upon my investigations and analysis, no such creditor exists and no such action could ever have been filed which is why no such action has ever been filed.

  3. In the Jesinoski v Countrywide case the unanimous Supreme Court of the United States declared that the rescission was effective upon mailing. The effect is cancellation of loan contract and rescission of the note, mortgage (or deed of  Trust) and like all rescissions, return of all monies paid by the borrower.

  4. The statute replaces the loan contract with statutory obligations.

  5. The borrower is still required to repay the debt. But the Creditor has three statutory duties that must be satisfied before the Creditor can make a claim for the debt. The claim to the debt arises under the Federal Truth in Lending Statute. But it is barred by the statute of limitations in which a claim for damages arising out of the Truth in Lending Act must be brought within one year.

  6. The borrower is similarly barred from pressing a claim for statutory damages after 1 year. If the borrower has sent a notice of rescission and then fails to file suit for return of all payments made within the statutory period, then that claim is barred by the statute of limitations. However, the effect of the rescission remains, to wit: the mortgage and note are canceled by operation of law. This means that the borrower now has both fee simple absolute title to his property without the encumbrance and is not subject to the terms and conditions of the promissory note.

  7. An action by the homeowner for damages or injunctive relief based upon a valid notice of rescission having been sent within the three-year period of expiration set forth in the statute is not barred by the TILA statute of limitations because it does not arise from any claim set forth in the statue.

    It is a relatively simple claim based upon fee simple title which has been slandered by a party who is asserting rights pursuant to a note and mortgage that no longer exist. The statute of limitations on such claims are based on state statutes. but there is no statute of limitations on ownership of property. Since the rescission was effective, title changed by operation of law. therefore there are no limitations on fee simple ownership and the right to peaceful enjoyment of the premises.

    A petition to cancel instruments like the mortgage and note would be based not on rights under TILA but from arising from state statutes and common law — an event occurred in which the mortgage was cancelled and rendered void; it is still technically in the title record even though it is now void. Thus the court should cancel and perhaps even expunge the the instrument from the title record.

  8. The only possible exception to this could be the statute of limitations on adverse possession. If any party has taken over possession of part or all of the property and held it for the statutory period while claiming title then after the expiration of the adverse possession limitation statute, that party might indeed have a claim to title. But without physical adverse possession that has all the elements, adverse possession does not arise.

  9. In addition, the right to statutory damages set forth in the rescission statute may still be pursued in an affirmative defense or counterclaim for recoupment. recoupment is not considered to be a claim so much as an offset. (See Beach case). It is limited to the amount demanded by the party claiming the right to foreclosure.

  10. But invocation of the claim in recoupment might be inconsistent with a defense arising from a homeowners fee simple title. Assuming that the Creditor has not taken any action to comply with the three statutory duties, and that more than one year has expired since the sending of the notice of rescission, the Creditor no longer has a claim for the debt  — at least not one that isn’t barred by the TILA statute of limitations. alternative pleading might allow both.

  11. The two controlling cases from the Supreme Court of the United States are Jesinoski and Beach.

Note that in the Beach case the claimant was switched. This is another indication of how the banks shift around the claim to be sure that they get maximum benefit from foreclosure or minimize the effect of a negative decision. It is emblematic of the fact that there is no creditor who owns the debt by reason of having paid for it.

 

Tonight! How Foreclosure Defense Attorneys are Winning Cases: Case Study in Florida 6PM EDT 3PM PDT — with a West Coast Perspective

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

Tonight we discuss the strategies and reasons for homeowners to win foreclosure cases.

Specifically we look at yet another case where a homeowner did win, hands down game over.

see https://livinglies.me/2019/10/09/patrick-giunta-esq-scores-another-homeowner-win-in-south-florida-v-us-bank-trustee-lsf9-master-participation-trust-william-paatalo-expert-testifies/

see also https://www.theindianalawyer.com/articles/reversal-bank-loses-in-lengthy-foreclosure-battle

see also https://southfloridalawblog.com/bank-america-illegal-foreclosure-six-million-settlement/

There is one simple fact about the statistics regarding the likelihood of success in contesting foreclosures. The statistics used by the banks and the courts and the media are all based upon all foreclosures 96% of which are completely uncontested. They are uncontested because homeowners don’t understand their rights and they don’t understand that they don’t deserve that treatment morally, ethically or legally.

When you break down the 4% (contested cases) you find that 60% of homeowners give up when they are presented with virtually ANY modification no matter how stupid and in signing that document they create more obstacles to contesting the foreclosure in the future.

These homeowners, usually unrepresented or poorly represented, don’t realize that by signing the modification document they have in fact created a new loan, stiffing the investors and creating revenue for the servicer and the investment bank that started the securitization scheme. The don’t realize because they have never been given the facts.

So that leaves 2.4% of all foreclosures. So far the “win” rate for the banks is 97.6%.

Of the remaining 2.4% about half settle with favorable results from the perspective of the homeowner. They are still stiffing the investors without knowing it and they are giving up or releasing a number of rights that could include damages for filing a false foreclosure claim.

As for stiffing the investors I’ll summarize by saying that in each foreclosure or modification or settlement the result is revenue distributed to the servicer, the Master Servicer (lead underwriting investment bank) and various other parties.

If it is foreclosure, the proceeds of sale to a third party don’t go to investors who put up the money but never got title to the debt, note or mortgage. Instead the proceeds are claimed as “servicer advances” or at the last minute when nobody is looking the mortgage loan schedule is amended such that the foreclosed loan is taken out and a new, possibly performing loan is put in. That’s when you see an assignment of the credit bid to a conduit for the investment bank.

Either way the entire proceeds come to the investment bank and affiliates as pure revenue.

The other half of the 2.4% go to trial. Of those only 50% are seriously contested, by aggressive discovery, objections at trial and good cross examinations. So the banks win 1.2% of those boosting their winning “statistics” from 97.6% to 98.8% — all due to improper defenses, procedures and mistakes plus a fair amount of court bias.

Of the remaining 1.2% that are seriously contested the homeowners win 65% of those cases. So that means the banks win another .42% bringing their total WIN statistics to 99.3% and the total WIN statistics for homeowners as either .7% if you just include the judgments for the homeowners or 1.9% if you include favorable settlements.

If you now re-read this post you will see that the figures could be vastly different if all foreclosures were seriously contested and that court bias would be bending the other way if the foreclosures were strongly contested. In plain language the homeowners could be winning at least 68% of foreclosure cases and the resulting softening of court bias could easily raise that to 95%.

A little humor is a good thing

How Do Court Reporters Keep Straight Faces?
These are from a book called Disorder in the Courts and are things people actually said in court, word for word, taken down and published by court reporters that had the torment of staying calm while the exchanges were taking place.

ATTORNEY: What was the first thing your husband said to you that morning?
WITNESS: He said, ‘Where am I, Cathy?’
ATTORNEY: And why did that upset you?
WITNESS: My name is Susan!
_______________________________
ATTORNEY: What gear were you in at the moment of the impact?
WITNESS: Gucci sweats and Reeboks.
____________________________________________
ATTORNEY: Are you sexually active?
WITNESS: No, I just lie there.
____________________________________________
ATTORNEY: What is your date of birth?
WITNESS: July 18th.
ATTORNEY: What year?
WITNESS: Every year.
_____________________________________
ATTORNEY: How old is your son, the one living with you?
WITNESS: Thirty-eight or thirty-five, I can’t remember which.
ATTORNEY: How long has he lived with you?
WITNESS: Forty-five years.
_________________________________
ATTORNEY: This myasthenia gravis, does it affect your memory at all?
WITNESS: Yes.
ATTORNEY: And in what ways does it affect your memory?
WITNESS: I forget..
ATTORNEY: You forget? Can you give us an example of something you forgot?
___________________________________________
ATTORNEY: Now doctor, isn’t it true that when a person dies in his sleep, he doesn’t know about it until the next morning?
WITNESS: Did you actually pass the bar exam?
____________________________________

ATTORNEY: The youngest son, the 20-year-old, how old is he?
WITNESS: He’s 20, much like your IQ.
___________________________________________
ATTORNEY: Were you present when your picture was taken?
WITNESS: Are you shitting me?
_________________________________________
ATTORNEY: So the date of conception (of the baby) was August 8th?
WITNESS: Yes.
ATTORNEY: And what were you doing at that time?
WITNESS: Getting laid
____________________________________________

ATTORNEY: She had three children , right?
WITNESS: Yes.
ATTORNEY: How many were boys?
WITNESS: None.
ATTORNEY: Were there any girls?
WITNESS: Your Honor, I think I need a different attorney. Can I get a new attorney?
____________________________________________
ATTORNEY: How was your first marriage terminated?
WITNESS: By death..
ATTORNEY: And by whose death was it terminated?
WITNESS: Take a guess.
___________________________________________

ATTORNEY: Can you describe the individual?
WITNESS: He was about medium height and had a beard
ATTORNEY: Was this a male or a female?
WITNESS: Unless the Circus was in town I’m going with male.
_____________________________________
ATTORNEY: Is your appearance here this morning pursuant to a deposition notice which I sent to your attorney?
WITNESS: No, this is how I dress when I go to work.
______________________________________
ATTORNEY: Doctor , how many of your autopsies have you performed on dead people?
WITNESS: All of them. The live ones put up too much of a fight.
_________________________________________
ATTORNEY: ALL your responses MUST be oral, OK? What school did you go to?
WITNESS: Oral…
_________________________________________
ATTORNEY: Do you recall the time that you examined the body?
WITNESS: The autopsy started around 8:30 PM
ATTORNEY: And Mr. Denton was dead at the time?
WITNESS: If not, he was by the time I finished.
____________________________________________
ATTORNEY: Are you qualified to give a urine sample?
WITNESS: Are you qualified to ask that question?

______________________________________
And last:

ATTORNEY: Doctor, before you performed the autopsy, did you check for a pulse?
WITNESS: No.
ATTORNEY: Did you check for blood pressure?
WITNESS: No.
ATTORNEY: Did you check for breathing?
WITNESS: No..
ATTORNEY: So, then it is possible that the patient was alive when you began the autopsy?
WITNESS: No.
ATTORNEY: How can you be so sure, Doctor?
WITNESS: Because his brain was sitting on my desk in a jar.
ATTORNEY: I see, but could the patient have still been alive, nevertheless?
WITNESS: Yes, it is possible that he could have been alive and practicing law.

Servicers: More Than One Set of Books

Since we know that most documents presented in foreclosure are inconsistent with other “securitization” documents it is only natural to suspect, assume and then corroborate that there are inconsistent sets of accounting records that are maintained to report different outcomes to the courts, the borrowers, the investors and the holders of contracts between the investment bank and the investors.

Lawyers and pro se litigants are probably overlooking this and should not simply notice the “Plaintiff” to produce a corporate representative at deposition. They should subpoena duces tecum all the documents, accounting records and correspondence relating to the subject loan. And they should subpoena duces tecum the servicer to produce the director, officer and employees with the most knowledge about each document.

As I have previously stated on these pages, this will reveal the “rest of the story.” The party claiming to be servicer is stating that they are a representative of the claimant in foreclosure. But is that who they pay after they receive borrower payments? Is that who they pay when they receive foreclosure proceeds? Is that who they pay then they do a short-sale or “modification”?

=====================================

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

Lawyers know and understand the law. Unfortunately they are not so knowledgeable about finance, bookkeeping or accounting, nor of reporting requirements. The players in securitizations schemes are all reporting different data to different government entities and agencies that are inconsistent with each other. I have been saying for 13 years that this entire foreclosure problem is related to accounting and not just law. The absence of an accountant in these cases, at least as consultant for discovery, is in my opinion a mistake.

Simply understanding double entry bookkeeping may  give you a much broader and better understanding enabling you to sink your teeth into the false and fraudulent case of foreclosure being presented.

  1. The receipt of payments from the borrower is one entry. In every bookkeeping system there is a required second entry.
  2. Lawyers should pursue the second entry.
  3. The first entry is posted to general ledger as an increase to cash on the balance sheet.
  4. It is not revenue.
  5. The second entry is posted to liabilities since the payment is being held, subject to withholding fees, for payment to third parties.
    1. This entry will tell you who gets the payment from the servicer — a vital clue as to who is really directing things (and thus who the client is for the foreclosure mill).
    2. It also rebuts the presumption that the holder of the note, as alleged by the foreclosure mill, is the party who will get paid by the foreclosure. Once that is exposed, there is no foreclosure case.
    3. The party(ies) getting paid are not the owners of the debt by reason of having paid value for the debt.

Comment posted on my blog:

Ocwen has been using defaulted loans to divert trust funds to its own master servicing fund. It maintains two sets of books: one reported to the trusts with paid down balance using servicer advances even though defaulted loans no longer in the trusts; other set of books with accrued interests billed to the to-be foreclosed on homeowners. The difference is to be realised at foreclosure. I have proof with my own mortgage. My loan was reported by Bloomberg had balance of $239K while they are trying to collect $450K from me. The difference is to be pocketed by Ocwen.

My only additional comment is that the writer was only partially right. The difference is distributed between Ocwen, the Master Servicer (Investment Bank) and other players.

PRACTICE HINT: The alleged “boarding process” (which does not really exist) is merely another fiction to create the illusion of confirmation of false data. You should ask for the accounting entries on the books of the alleged “successor” servicer. You might not find any entries because the new servicer only replaced the former party with a new login name and password and did not actually receive any money from the prior servicer.

Patrick Giunta Esq. Scores Another Homeowner Win in South Florida v US Bank Trustee LSF9 Master Participation Trust: William Paatalo, Expert Testifies

Foreclosure volume has declined  but that doesn’t reduce the number of cases that are deficient and even fraudulent.

As more senior Judges have more time to review the evidence, the legal presumptions sought by foreclosure mills and come to conclusions about the facts, they  are increasingly suspicious about the claimant, the claim and the failure of proof of real facts.

Kudos again to trial lawyer Patrick Giunta, Esq. with offices in Ft. Lauderdale, Florida. Trial was held on October 7, 2019. This is the third time we have covered a win by Giunta.

Final Judgment for Defendant Case #50-2017-CA-012236, 10/8/19

Circuit Court West Palm Beach, Florida

ORDERED AND ADJUDGED AS FOLLOWS:

  1.  Plaintiff failed to prove it had standing to enforce the note.
  2.  On Count I, Mortgage Foreclosure, and Count II Re-establishment of Lost Note, Plaintiff US Bank as Trustee for the LSF9 Master Participation Trust take nothing by this action and the Defendants …. shall go hence without day.

Game set and match. The Judge here obviously sought to prevent the foreclosure mill from bringing another action.

Some judges upon finding that standing was lacking follow precedent and dismiss without prejudice enabling the foreclosure mill to try again. But more judges are taking great pains to examine the evidence and are coming to the legal conclusion that the Plaintiff’s proof failed.

Upon a factual finding of failure to prove a prima facie case, the court then enters Final Judgment, which for all purposes between that claimant and that borrower is a final determination on the merits.  Any future attempts to foreclose by US Bank or the LSF9 Master Participation Trust are barred by res judicata, collateral estoppel and the Rooker Feldman Doctrine if it applies.

If any attempt is made to bring another foreclosure action in the name of another entity, trust, LLC or corporation, they would also likely be barred without pleading and proving real facts that show that the Plaintiff is the owner of the debt and paid value for it and the previous parties had executed assignments and other documents without any right,  justification or excuse and without notice to the new claimant. That isn’t going to happen.

Giunta doesn’t take a lot of these cases but when he is engaged he tends to win. He understands securitization and relates it back to the failure to prove a prima facie case. He avoids trying to prove or even accepting the burden of proving who actually paid value for the debt, if anyone.

He employed Bill Paatalo in this case whose testimony underscored the deficiencies in the allegations, the documents, and the proof. Paatalo appeared as an expert fact witness.

 

 

Frustrated with Your Lawyer’s Attitude?

PRESUMPTIONS VERSUS FACTS

The bottom line is that lawyers want to do the best possible job for their client and get the best possible result. They like winning. But sometimes they must protect clients against themselves. It’s true there are lazy lawyers out there who take money and don’t do the work. But most of them want to win because their livelihood depends upon a good reputation in the courtroom which includes respect as a winner.

There is a  huge difference between what is written in statutes and case decisions and how and when they are applied. The fact that a court fails to apply the law that you think or even know should have been applied is not a failure of the lawyer so much as it is a failure of the courts to escape their bias. The simple fact is that I agree that most foreclosure cases should be decided in favor of the borrower but getting a court to agree is a daunting challenge to the skills of the lawyer representing a client who is largely seen as food for the system.

=====================================

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

So in a recent email exchange here is what I said some things about legal presumptions. I should have added the following:

Another legal presumption or factual assumption employed by the courts and often overlooked by foreclosure defense lawyers arises from the naming of the alleged claimant. A typical naming convention used by lawyers for the “claimant” is “ABC Bank, as trustee for the certificate holders of the DEF, Inc. Trust pass through certificates series XYZ-YY-Z.

Several things are happening here.

  1. The case is being styled with the name of a bank creating a misleading impression that the bank has any involvement with the foreclosure.
  2. The reference to the bank as trustee is never supported by any assertion or allegation that it is indeed a trustee and under what trust agreement. The court erroneously presumes that the bank is a trustee for a valid trust who owns the claim.
  3. The reference to the certificate holders makes the certificate holders the claimant. But the pleading does not state the nature of the claim possessed by the certificate holders nor does it identify the certificate holder. In fact, the certificate holders have no right, title or interest to the debt, note or mortgage and are due nothing from the borrower. The court erroneously presumes that the reference to certificate holders is just a long way of referencing the trust.
  4. The reference to the corporation creates ambiguity as to the name of the trust or the party whom the lawyers are saying is represented in the foreclosure proceedings. The court presumes that the naming of the corporation is irrelevant.
  5. The reference to the certificate series falsely implies the certificates convey an interest in the subject debt, note or mortgage. By erroneously presuming this to be a fact the court is not only wrong factually but it is also accepting a presumption that i factually in conflict with the presumption that the claimant is a trust.

 

Here is what I wrote to the client:

I have no doubt that existing law, if properly applied, would be on your side. The problem is that the courts are bending over backwards to find false presumptions that create the illusion of applying existing law.

For example, the only claimant that can bring a foreclosure action as one who owns the debt and who has paid for it. Article 9 § 203 of the Uniform Commercial Code as adopted by state statute.

But the banks have convinced many courts that they comply with that statute. The way they do it is through the use of legal presumptions leading to false conclusions of fact.

So even though the named claimant has not paid value for the debt and doesn’t own the debt the courts end up concluding that the claimant does own the debt and has paid value for it. This is done through a circuitous application of legal presumptions.
*
By merely alleging that they have possession of the original note, it raises the assumption or presumption that they have the original note. This is probably false because most notes were destroyed and the banks were relying upon images.
*
By arriving at the conclusion of fact that the claimant is in possession of the original note (even though it is only a representative of the claimant that asserts possession) the courts then apply a legal presumption that the possessor of the original note has the authority to enforce it. There may be circumstances under which that is true, but that doesn’t mean that have the authority to enforce the mortgage.
*
By arriving at the conclusion that the claimant has the authority to enforce the note and has possession of the note, courts then take the leap that the claimant owns the note because they have alleged it. This is improper but it is nevertheless done because the court is looking for ways to justify a decision for the claimant.
*
By arriving at the conclusion that the claimant owns the note, and is not acting in a representative capacity (which is barred by Article 9 § 203 is of the Uniform Commercial Code) the court applies a legal presumption that the claimant has paid for the note (why else would they own it?). [NOTE: Many times the lawyers will say that the claimant is the holder of the note without saying that the claimant is the owner of the note. In such cases it could be argued that they are admitting to not owning the note but are merely claiming the right to enforce the note; by doing that they are admitting to not having paid value for the debt thus undermining their compliance with Article 9 §203 UCC as adopted by state statute. Hence while they might be able to enforce the note they cannot enforce the mortgage. The courts often erroneously presume that enforcement of the note (Article 3 UCC) is the same as enforcement of the mortgage (Article 9 UCC) — which should be addressed early and frequently by the defender of foreclosures.] 
*
By arriving at the conclusion that the claimant has paid for the note, the court applies a legal presumption that this is equivalent to payment of value for the debt. In this case the note is treated as a title document for the debt. This would only be true if the original payee on the note was also the source of funds for the debt.( In most cases the source of funding for the debt is an investment bank acting on its own behalf. But the investment bank never appears in the title chain nor as claimant in foreclosure).
*
Without the above assumptions and presumptions the claimant could never win at trial. The simple reason for that is that there’s never been a transaction in which the claimant paid value for the debt. It is only through the use of commonplace assumptions and legal presumptions that the court can arrive at the conclusion that the statutory condition precedent to initiating foreclosure has been satisfied.
*
In truth neither the court nor most lawyers actually go through the process of analysis that I have described above. If they did they would find multiple instances in which the presumptions should not be applied to a contested fact.
*
But the truth is that there is a bias to preserve the sanctity of contract and a belief that if the claimant is not allowed to succeed in foreclosure, the homeowner will receive a windfall benefit through the application of technical legal Doctrine.
*
The truth is that the court is granting Revenue to a fake party with a fake claim. The court is not preserving contract, since the contract has already been destroyed through securitization. There was no contract for revenue. There was only a contract for debt. 
*
And while the borrower might appear to be getting a windfall, the success of the borrower merely reflects the larger implied contract that included securitization and should have included payment to the borrower for use of the borrower’s name reputation and collateral. The windfall already occurred when the Investment Bank sold the parts of the debt for 12 times the amount of the actual debt.
*
So I mention all of this because I think it applies to your case. However you have an attorney and I don’t believe that a telephone conference with me is necessary or even appropriate. There is nothing in this email that your lawyer does not fully understand.
*
But the practice of law involves much more than written statutes or case decisions. The practical realities are that the courts are not inclined to give borrowers relief despite the fact that they are clearly entitled to it by any objective standard. The trial lawyer or appellate lawyer must make practical decisions on tactics and strategy based upon knowledge of local practice and the specific judges that will hear evidence or argument.
*
I understand your frustration. The situation seems clear to you and objectively speaking it is clear. but it has always been a daunting challenge to get the courts to agree. If your attorney wants a telephone conference with me, she can call me. But my knowledge of your attorney is that she has full command of the procedural options to oppose eviction or do anything else that might assist you. The only reason she might resist doing so is her belief that the action would be futile or potentially even result in adverse consequences to you.

Here is the Answer to Guilt About the “Free House” — the one the banks don’t want you thinking about.

Imagine we are in a new era, where disclosure was full and complete to investors and borrowers.

The deal pitched to investors is simple: the investment bank gets your money and uses it to buy debts, notes and mortgages. The purchased loans (including the debts) will be put into a portfolio and the investors grant ownership to a trust with the investors as beneficiaries. [Instead of the investment bank as beneficiary under a secret trust agreement.]

The investment bank promises to use its best efforts,  (1) to pay cash flow to investors equal to a specified interest rate, and (2) multiply the investment through issuance of complex derivatives.

The investment bank shares in the investment through administration fees and sharing in profits from the sale of complex derivative instruments whose value is based upon the certificates purchased by investors.

In the end, the investors receive the stated rate of return on their investment plus a return of 200% in capital gains. The investment bank earns profits in excess of 600% of the investment by investors.

So the investors get back whatever principal is paid on the loans plus 200% of their investment plus interest. Good deal.

Since all of this is disclosed in detail, there is no conceivable problem anyone could have in such an arrangement. Bravo to the investors and investment banks.

The pitch to borrowers is equally simple: the borrower gets a loan in a specified amount at a stated rate of interest subject to specific payment terms. The lender is the trust. In addition the borrower becomes an investor in their own loan in which the investment bank premises to use its best efforts to obtain profits such that borrowers could receive up to 200% of the loan over a period of time.

In the end, the borrowers receive 200% of their loan which is required to be allocated toward payment of interest and principal. The investment bank receives in excess of 600% of the loan amount which is different from the invested amount received from investors.

Since all of this is disclosed in detail, there is no conceivable problem anyone could have in such an arrangement. Bravo to the borrowers and the investment bank.

The entire plan generates 1200% of invested capital and 1600% of loan balances. Everybody pays tax on their gains. The plan is completely legal and doable as long as investors invest and borrowers borrow.

Nobody has a problem with that scenario except the investment banks who want to keep all of the excess gains derived from issuance, sale and trading in complex derivative instruments using money from investors and collateral from borrowers.

Investors get a free investment with profit. The borrowers ultimately get a free house and some profit. The free house doesn’t seem so outlandish, does it?

Everything I have described above is what is happening with three exceptions: there is no disclosure of excess profits from sales and trading in complex derivatives and neither investors nor borrowers share in a business plan that requires their investment of money and collateral. In addition virtually no taxes are paid on the gains. They don’t share because they didn’t know.

 

 

Tonight! Trends in California Non-Judicial Foreclosure Appellate Litigation 6PM EDT 3PM PDT

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

with Charles Marshall, Esq.

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

Re: non-judicial foreclosure non-judicial foreclosure lawsuits, which are on appeal in California, Today’s Show will cover the following:

– where chain of title argument is still getting traction at the appellate level;

– how breach of contract argument is getting traction when chain of title argument is not;

– how appellate courts might handle California Homeowner Bill of Rights cases, given the impending ending of the legislation on December 31, 2019;

– how to limit appellate courts from narrowly framing lower court and appellate briefing argument to kill appeals without truly addressing the most fundamental legal arguments re chain of title issues and the lender’s right to collect on the note and associated deed of trust.

The Solution to Defective Securitization of Mortgage Debt: The Bare Legal Truth About Securitization of Mortgage Debt

The basic truth is that current law cannot accommodate securitization of mortgage debt as it has been practiced. In short, what they (the investment banks) did was illegal. It could be reformed. But until the required legal steps are taken that address all stakeholders virtually all foreclosures ever conducted were at best problematic and at worst the product of a fraudulent scheme employing illegal tactics, false documents and false arguments of law and fact.

Without specifically saying so the courts have treated the situation as though the correction has already occurred. It hasn’t.

It is through no fault of the borrower that the investors put up money without acquiring the debt. That doesn’t mean they were not the ones who paid value for the debt. Therefore the only conceivable party, in equity, who should be able to enforce the mortgage is the investors but they cannot because they contractually barred from doing so. 

=====================================

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
I think it is worth noting that securitization of loans was never completed in most scenarios. Value was paid by the Investors who, contrary to popular belief, never received ownership of the debt, note or mortgage.
  1. Cash flow was promised by the investment banker doing business as an alleged Trust, but the investors who were the recipients of that promise had no recourse to the mortgages (or the notes and underlying debts) and hence no recourse to enforce them.
  2. The alleged Trust never acquired the debt. Neither the trust nor any trustor or settlor ever entered into a transaction in which value was paid for the debt as required under Article 9 § 203 of the Uniform Commercial Code. It should be emphasized the this is not a guideline. It is statutory law in all U.S. jurisdictions. People get confused by court rulings in which ownership of the debt was presumed. Those decisions are not running contrary to Article 9 § 203 of the Uniform Commercial Code. To the contrary, those decisions seek to conform to that statutory requirement and the common law Doctrine that any reported transfer of the mortgage without transfer of ownership of the debt is a legal nullity. In short they avoid the issue by presuming compliance — contrary to the actual facts. 
  3. Under Article 3 of The Uniform Commercial Code it is possible that the trust acquired the note but under Article 9 of the Uniform Commercial Code the trust could not have acquired the mortgage, unless the transferor had sold the debt to the trust or the transferor was a party to the trust and had paid value for the debt. This is black-letter law.
  4. Endorsement of the note is of questionable legality since the endorser did not own the debt. In addition, the endorser had no legal right to claim a representative capacity for the investors who had paid value for the promise of the Investment Bank  (ie, they did not pay value for the debt). 
  5. I think that the only way an endorsement could be valid is if the endorser owned the debt or has legal authority to represent the owners of the debt who had paid value for the debt. I don’t believe that such a party exists.
  6. The only party who had barely legal title to the debt, the investment banker, had sold all or part of the cash flow from the mortgage loans for amounts in excess of the amount due on the debts. The remaining attributes of the debt or indirectly sold by financial instruments whose value was derived from the value of the derivative certificates issued in the name of the trust.
  7. There is no one party who has legal ownership of the debt and who has paid value for it. The brokerage of the note was merely a process of laundering title and rights to the debt to create the illusion that someone had both. The actual owner of the debt is a collection of legal entities that are not in privity with each other. That Gap was intentional and that is what enabled the Investment Bank to effectively sell the same loan an average of 12 times — for its own benefit.
  8. A Court of equity needs to allocate those sales proceeds. The implied contract with borrowers required disclosure of all compensation arising from the loan transaction. The implied contract with investors was the same. Both would have bargained for a piece of the pie that was generated by the investment bank. Neither one could do that because the large accrual of  heretofore impossible profits and compensation was both unknown and actively concealed from any reporting by investment banks.
  9. It is through no fault of the borrower that the investors put up money without acquiring the debt.
  10. The only way to bridge this problem is by somebody pleading Reformation or some other Equitable remedy in which the liability on the note or the liability on the debt is canceled.
    1. Anything less than that leaves the borrower with an additional prospective liability on either the debt or the note.
    2. But for the court to consider such a remedy in a court of equity it must restructure the relationship between the Investors and either the debt or the note and mortgage.
    3. And in turn it must then restructure the relationship between the party claiming a representative capacity to enforce the mortgage and the investors.
    4. In short, the investors must be declared to be the owner of the debt and the owner of the mortgage who has paid value for the debt.
    5. Only after a court order is entered to that effect may the investors then enforce the mortgage.
    6. The only way the Investors could enforce the mortgage would be if they were each named as the claimant and the investor(s) were receiving the proceeds of foreclosure sale to reduce or eliminate the debt.
    7. They could act through a collective entity, such as a trustee under a trust agreement in which the trustee was directly representing the investors. In that event the named trust in the Foreclosure action could be ratified and come into full legal existence as the legal claimant.
    8. Until then virtually all foreclosures naming a trust as claimant or naming “certificate holders” as unnamed claimants are fatally defective requiring dismissal with prejudice.
  11. However, this restructuring could interfere with the other derivative products sold on the basis of the performance of the certificates. The proceeds of such sales went to the Investment Bank and Affiliates who assisted in the selling of the additional derivative products.
  12. I repeat that none of this was caused by borrowers or investors or even known to be in existence.
  13. And the problem would not exist but for the persistence of the investment banks in maximizing Revenue at the expense and detriment of both investors and Borrowers.
  14. The problem with my solution is that much of the revenue collected by the investment Banks would accrue to the benefit of the investors.
  15. So the court would need to claw back a substantial amount of the revenue collected by the Investment Bank in each securitization scheme and then allocate the proceeds as to principal and interest on the underlying debt. Hence principal balances on the debt and the accrual of interest could be affected by the restructuring.

Ocwen Refunded Money to Maine Borrowers Who were Illegally Foreclosed

see https://www.housingwire.com/articles/49795-ocwen-agrees-to-refund-maine-residents-to-end-foreclosure-dispute-with-the-state/

Important quotes from article:

According to the Maine Bureau of Consumer Credit ProtectionOcwen Loan Servicing instigated foreclosures on loans based on paperwork that was determined to be legally inaccurate.

According to the consent agreement, the Power of Attorney over the loans that were in the Aegis portfolio ceased to exist when the entity was dissolved in November 2012.

But in 2014, Ocwen filed foreclosure notices against a number of Maine borrowers on behalf of Aegis Lending and Aegis Funding as its “Attorney in Fact,” when in reality Aegis Mortgage and all of its subsidiaries were already defunct, which also meant that any of its claims also ceased to exist.

According to the consent agreement, Ocwen “had no authority to execute documents as an ‘Attorney in Fact’ for legal entitles which have had no corporate existence since March 13, 2012.”

Furthermore, even after state regulators brought the error to Ocwen’s attention in 2019 and its lawyers assured regulators the practice would stop, the illegal filings continued into January of 2019, an error the company defined as “inadvertent,” according to a release issued by the state of Maine.

Editor’s Note: So far as I have been able to determine, there is not a single instance in which Ocwen claimed the position of “attorney in fact” where that assertion was true. This is not a one-off case. This is the tip of the iceberg.

I have one case in litigation in which Ocwen relied for nearly 10 years on a fabricated power of attorney from Chase Bank. How do I know it was fabricated? Chase Bank had nothing to do with the loan. That was proven at trial. Thus Chase Bank could not possibly have authorized the Power of Attorney submitted in court. Yes we won that one too.

Just about everyone who is involved on a daily basis with foreclosures in which Ocwen is involved, knows that the documents were fabricated, forged, backdated and falsely presented as evidence.

Leveraging Mediation to Win Foreclosure Case: Getting a Pre Mediation Order

After reading my blog a client shared with me the details of how he won his case. This win followed up on my previously announced strategy of using mediation to flush out the fraudulent nature of the claimant and the claim for foreclosure.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

The idea of a pre mediation order had not occurred to me until I received this email. I have edited his story to present the following:

1.  CURRENT STATUS:  Last mortgage Payment was June 2008

2.  FORECLOSURE CASE:  Won Pro Se in June 2011 as a Dismissal With Prejudice.

3.  HOW THE CASE WAS WON:
A.  At the 2009 beginning of the court hearings, a state-wide order from the Florida Supreme Court was in effect which required MEDIATION between the parties before any foreclosure case could proceed.
B.  The local court having ordered the mediation, I suspected a scam on the part  of the REMIC TRUST Plaintiff, BONY, as being the legitimate owner of the mortgage.
C.  I therefore moved the court for a “pre-mediation order” requiring the Plaintiff bank to provide the following:
                         1.  the name of the mediating bank representative who would attend,
                         2.  the description of his/her official position with the bank,
                         3.  his /her formal title, and
                         4.  all of the above disclosure must be provided on BONY letterhead.

D.  Two scheduled mediation sessions later, without the mediator information provided, I then moved for An Order To Compel Mediation Credentials.
E.   The Order was signed and issued by the Chief Judge, which at the time put the attorney (the Marshal gang) in jeopardy of state sanctions if disobeyed.
F.   Regardless, that Order to Compel was disregarded by the attorney who
proceeded to attempt a mediation appointment with me for the  third time anyway.
G.  After I once again refused to attend the mediation without the discovery in hand, the attorney said over the phone, “Ok, we will just tell the Judge that you refused to cooperate with the mediation Order.”
H.  I was elated because they had already failed to comply with the earlier Order to Complete Mediation Credentials.  I was afraid that they would drag some “taxi driver” into the mediation session saying that he “represented the bank!”
I.  So the attorney informed the judge that I had refused to mediate.
J.  A few months later, I moved for a thorough “Evidentiary Hearing,” during which the mediation failure on my part came out.
H. When the judge saw that the Chief Judge’s Mediation Credentials Order had been disobeyed, AND THAT the Plaintiff attorney had lied to the court blaming me for the mediation failure, the judge dismissed the entire case on the spot and issued his written order a few weeks later with the “with prejudice” designation for “egregious” conduct on the part of the Plaintiff!  Game Over.

4.  So now you know why and how I got the only foreclosure attempt dismissed with prejudice in 2011 and why I have stayed in my home without making mortgage payments since 2008.

5.  The pretender lender was Countrywide who gladly accepted my first 12 on-time payments,  it then assigned the loan executed through Marshall Fields to BONY.

6.  BoA serviced the “dismissed” loan for a few months and then transferred servicing to Ocwen, who made their monthly attempts to collect until they discovered that BoA had “written off” the loan altogether.  Ocwen washed their hands of the account and it now resides with Shellpoint Servicing who has been trying to collect ever since about 2014.  As you might imagine, I have paid only for the first 12 payments on the loan, after which I got the 13th month bill for more than I had been told on that fateful phone call with the broker.  I have made no payments since June 2008.

7.  A few months before the 3-year RESCISSION deadline, I did send that letter to BoA in 2010, citing failure to provide “pre-closing “ loan terms disclosure before the loan closed about two weeks later.  The loan broker grossly misrepresented the terms of repayment on the initial phone contact by me.  Had I known what was coming, I would have been forced to reject the suicidal loan altogether, even after their Landsafe appraiser set a highly inflated value on the property to “help me to qualify.”

8.  No action was taken to refund my first- year payments and other fees, so I have been waiting ever after for a second foreclosure attempt or for the courage to file a Quiet Title suit.

9.  I almost prefer to wait for another foreclosure action so that I can clean their clock as an informed Defendant.

*
Editor’s Note: The problem could have been corrected if there was a bona fide claimant with a bona fide claim. As I have repeatedly stated on these pages, in most cases there is no bona fide claim or claimant. There would not have been a problem designating a records custodian or other officer to appear at mediation with full authority to settle the case. The truth is that in foreclosure litigation there is never a person with complete authority to settle the case because whoever has been selected to show up at mediation was paid to show up, not to settle the case.
*
But is only through the aggressive use of procedural steps that you can create footprints in the sand that the court will not ignore. Judges don’t like it when their roders are violated. They might gave a bank a few chances to comply but in the end, if pressed, the judge will always levey severe sanctions against the fake claimant with the fake claim.
*
The Judge might think he is delivering a slap on the wrist of a financial institution for failure to comply with court orders, but in reality the judge is dealing a deathblow to a fake trustee of a fake trust that was a fictitious name for an investment bank who controlled but did not own the debt and had sold off more than the sum of the parts.
*
Practice hint: Any servicer who claims the right to administer or enforce the loan under such circumstances is making a false claim. If the servicer is saying it represents the trust or the trustee or even the investment bank (which they never do) they are still not asserting authority from the owner of the debt. Thus any records or testimony from the purported servicer should be struck since they are the records of a volunteer who was being paid to present false evidence. The payment history and other ‘business records” then fail to establish the required exception to the hearsay rule. 
*
But without making tracks in the sand — i.e., by filing motions and making timely objections and a motion to strike — the testimony and the putative business records come into evidence and provide the basis for a judgment of foreclosure. Once stricken, that foundation is no longer present.
*
If they can’t prove the records through some other presentation of admissible evidence, the proper motion is for involuntary dismissal with prejudice for failure of the evidence to establish a prima facie case.
*
Renewing the motion to dismiss based upon standing weakens your position — as it provides the opposing party with an opportunity — getting a dismissal without prejudice and the ability to harass your client in the future with renewed demands for collection and enforcement. 

Judge Approves DiTech Third Amended Plan in Bankruptcy

see Docket 1404 (2) Order confirming third amended joint chapter 11 plan of ditech

BEWARE: Things are not what they appear. This is another step in which something is made out of nothing. The entire plan is not based on any real assets or income of DiTech nor does it have any nexus to the prior uses of the DiTech name.

Ocwen Stock Is Riskier Than Investors Know

the truth is there for anyone who wants to see it, which means that the entire prospect for Ocwen is that of an actor with only one foot on the edge of a cliff.

This article represents the analysis and opinion of the writer. Take no action with consulting a legal and financial adviser. 

The common stock of Ocwen Loan Servicing is traded actively. The company is backed by the largest banks in the world and its reported income is generally rising. BUT Ocwen has also been positioned by its backers (Goldman, BofA, Citi, etc.) to be thrown under the bus if the going gets rough.

The stock is currently valued based upon the presumption of economic viability because all the mortgages claimed to be servicing are generating revenue and Ocwen is receiving revenue and making a profit.

But another scenario is emerging from the shadows even if it appears unlikely. The number and percentage of homeowner successes in foreclosure is increasing. Those successes are all based upon one single fact, whether explicitly stated in court findings or not — that the named creditor on whose behalf Ocwen says it is collecting was not the owner of the debt. Hence Ocwen’s claims, notices, and testimony are not based upon its relationship with such named creditors or claimants.

If it is further revealed that Ocwen was in fact acting at the behest of an investment bank rather than a trustee of a named REMIC trust, the result could be catastrophic for both Ocwen and the investment bank. That scenario occurs if the investment bank was giving instructions on loan administration and foreclosure while it had no financial interest in the underlying debt.

That would mean that Ocwen never had any nexus to the debt owner. And that in turn would mean that Ocwen, in many and perhaps most cases, does not have any right to administer or service the loan “portfolio” it claims to be managing. And it would mean that all “modification” applications were improperly directed and processed. It could also mean that Ocwen is being paid to pretend it possesses such rights.

Ocwen could be the target of even more lawsuits alleging fraud and other intentional torts. On a more granular level the absence of any agency relationship with an identified creditor who owned the debt by reason of having paid for it would disqualify an Ocwen representative from testifying as the robowitness and would fail the exception test to hearsay objections as to their records, since they would not be records of either the named claimant nor of the actual owner of the debt.

If the facts are revealed and finally accepted by American courts, most foreclosures would grind to a halt. American law requires that paper title and actual payment of value for the debt must be combined into one party before any foreclosure action is filed. Under the weird securitization scheme adopted by the major investment banks no such party exists. The whole point of what they were doing was to sell parts of the debt for amounts vastly exceeding the market value of the actual debt.

By using Ocwen as the front for enforcing foreclosure actions, Ocwen is primed to be the one thrown under the bus wherein the inevitable finger pointing from investment banks will be directed at Ocwen and other servicing entities like it. Acting without authority and knowingly contributing to windfall illicit gains from foreclosures also places Ocwen at risk for actions by Attorneys General of all 50 states and several regulatory authorities.

The combined administrative and legal risks vastly exceeds the market valuation of the entire company. If and when these facts are finally accepted in the courts, Ocwen would be forced into bankruptcy and would most likely file under Chapter 7 or Chapter 11 as a liquidation in bankruptcy. Either way, the outlook for  the valuation of Ocwen shares would be bleak at best.

If somehow the investment banks are either able to maintain the ruse or continue the current governmental attitude of wink and nod, none of those scenarios are applicable. But the truth is there for anyone who wants to see it, which means that the entire prospect for Ocwen is that of an actor with only one foot on the edge of a cliff.

Tonight! Legal Presumptions — The Key to Winning and Losing Foreclosure Cases

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Neil Garfield, Esq.

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

Tonight We’ll talk about how to understand and use legal presumptions to defeat illegal foreclosures. The key to persuading the court is logic applied to everyday experience. And remember that the key in every foreclosure is the money trail. That means who paid for the debt, and who now is carrying the debt on their books as a loan receivable which has not been sold.

It is not enough to deny or even assert an affirmative defense that the party claiming the right to foreclose does not exist, or that they have no legal claim or that they have not paid value for the debt. And those who ask “how do  I prove that?” are asking the wrong question. You can’t prove it unless they admit it and they will never do that. But just as legal inferences and presumptions can be used against you, they can also be used for you and against them.

Through the careful and aggressive use of discovery you can raise the inference that they don’t own the debt and therefore that they have no claim for foreclosure.

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