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COME TO OUR SANTA MONICA SEMINARS 9/3-9/4

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Dear Bryan:

OK. FIRST OF ALL YOU WILL BE CONTACTED BY A MEMBER OF OUR TEAM TO GET FURTHER INFORMATION SO WE MIGHT BE ABLE TO HELP YOU A LITTLE MORE. PLEASE REMEMBER THAT I AM A LICENSED ATTORNEY IN FLORIDA BUT ACTUALLY DON’T PRACTICE ANYMORE. WHATEVER I TELL YOU HERE SHOULD BE REVIEWED WITH COMPETENT LICENSED LOCAL COUNSEL BEFORE YOU MAKE ANY DECISION OR TAKE ANY ACTION. ANYTHING I SAY HERE IS BASED UPON THE LIMITED AMOUNT OF INFORMATION YOU HAVE GIVEN TO ME AND UPON A COMPLETE REVIEW OF YOUR FACTS,MY OPINION COULD CHANGE AND IN ANY EVENT MY OPINION MIGHT NOT BE RELEVANT IN YOUR LEGAL JURISDICTION.

I’ll break down your fact pattern piece piece and comment on each piece:

1. You write “I am currently dealing with an issue in court where I actually rescinded a loan within the 3 day period.”

ANSWER:

• Whether your rescission was effective depends upon how you did it. But most cases state that ANY written intention to rescind is sufficient. The rescission, as you can see in the blog and general comments below, has the effect of canceling the note and mortgage.
• The 3 day rescission appears to be different than other rescission remedies in that it applies automatically.
• Other rescissions are subject to acceptance or objection by lenders.
• This means that ALL documents should have been returned to you, canceled with an acknowledgment that the loan is null and void.
• If the mortgage was recorded, a satisfaction of mortgage should be recorded by the “lender” and can be required in a court of law.
• If the note was signed, then the note should be returned to you in its original form, along with some writing on it that says “rescinded or canceled.”
• Remember that rescission under TILA is NOT  the only rescission remedy available under State and Federal Statutes and common law.
• PLEASE NOTE THAT THE PRACTICE OF “SELLING FORWARD” MIGHT COMPLICATE ANY RESCISSION. THE “LENDER” MIGHT WELL RESIST YOUR ATTEMPT TO RESCIND EVEN THOUGH IT HAS NO RIGHT TO DO SO. ITS MOTIVATION IS THAT BY “SELLING FORWARD” IT ESSENTIALLY RECEIVED MONEY IN FULL FOR THE FULL AMOUNT OF THE PRINCIPAL STATED ON YOUR NOTE OR PROPOSED NOTE AND IT ASSIGNED YOUR NOTE AND MORTGAGE EVEN IF YOUR NOTE AND MORTGAGE NEVER EXISTED.
  
• IN ADDITION, THE “LENDER” WAS ACTUALLY A STAND-IN FOR THE REAL LENDER WHO WAS NOT DISCLOSED SO YOUR RESCISSION MIGHT HAVE BEEN ADDRESSED, UNDER TILA, TECHNICALLY TO THE WRONG PARTY, BUT THE APPARENT AGENCY OF THE NOMINAL DISCLOSED LENDER WILL PROBABLY BE SUFFICIENT TO MAKE YOUR RESCISSION VALID.
  
• UNDER THE POOLING AND SERVICE AGREEMENT SIGNED BETWEEN THE “LENDER” AND THE REAL LENDER THE “LENDER” MIGHT HAVE TO BUY BACK YOUR LOAN OR SUBSTITUTE WITH ANOTHER “LIKE” LOAN AND MIGHT NOT HAVE THE SOLVENCY (OR WILLINGNESS) TO DO IT.
• IN 40% OF THE CASES, THE DOCUMENTATION HAS DISAPPEARED BECAUSE THE “SELLING FORWARD” CAN ONLY BE ACCOMPLISHED BY EXECUTING A FRAUDULENT OF ASSIGNMENT OF A NON-EXISTENT NOTE AND MORTGAGE AND EXECUTED IN BLANK WITH A SQUIGGLE OVER YOUR NAME AS THOUGH YOU HAD SIGNED IT. THIS PRACTICE HAS BEEN USED EVEN WHERE THE LOAN WAS SOLD AT OR AFTER CLOSING. Thus the REVERSAL OF THE TRANSACTION REVEALS FRAUD ON THE PART OF AGENTS, SERVANTS OR EMPLOYEES OF “LENDER” AND OTHER PARTIES. Thus the note is destroyed or missing when the subject comes up.
• If you DID sign a note, there is the distinct possibility that it was transferred or transmitted to a Structured Investment Vehicle (SIV — see Glossary) in the Cayman Islands or to some other third party and might not be recoverable by your lender.

2. You write: “(The closing atty. at the title co. seemed shady and we did not feel comfortable with the whole deal.) Well, they (WAMU) funded and paid off the other mort. co. within the 3 days which violated the “delay of performance” statute. Then they attempted to collect and I informed them that I had rescinded. (I have a copy of the form, a copy of the express mail label, a copy of the signed delivery receipt, etc.) Plenty of proof that I rescinded in a timely manner. This was 2001. I made no payment to them at all.”

ANSWER:

• If you willl look at one of the recent blog posts, you will see that a title company sued Countrywide mortgage basically saying that they should not be on the hook for fraudulent dealing engendered by Countrywide. The title company is supposed to make sure you have clear title and it is required to perform due diligence before it issues a title policy. Once it issues the title policy it is liable for any damages resulting from ad efect in title. It is presumed, I think correctly, that the title company knows all it needs to know. In most cases, the title company was well aware of the securitization of these loans and the fact that recording, fees paid, real parties in interest and other disclosure requirements, together with other wrongful behavior, created a cloud on the title to the property, the mortgage and the note — three separate issues of ittle, each having its own legal consequences. You might have good claims against the title company and the title insuraunce company (and the title company and the title insurance company might have good claims against your “lender”).
• The attorney for the title company is under the same obligations as the title company PLUS his obligations as a lawyer to avoid even the appearance of impropriety. You might have claims against the attorney as well. If you have a gut feeling that something is wrong, it usually is wrong, and you should not proceed unless and until you have consulted with someone who is competent, licensed and objective, with no dog in the race except to do right by you.
• WAMU, according to its 10k annual reports filed with the Securities and Exchange Commission, which is a sworn public document, sold all of its loans and participated in the loose procedures desribed above. In all probability their problem resulted from the fact that they received the money but didn’t have the money or the willingness to reverse the transaction because all of a sudden they were at risk on what they thought was a risk free transaction. From an accounting perspective their problem was simple. They never took the loan onto their balance sheet as an asset, never set aside a reserve for rescission, default or delinquency, and therefore have no way of accounting for a rescission where all they really did was act as an unregistered mortgage broker and conduit for a loan from an undisclosed third party.

3. You write: “I made no payment to them at all. I attempted to pay my old mort. co. but they sent my payment back. Well I faxed them (WAMU) several copies of my rescission documents over the years and it wasn’t until 2005 that they canceled the mortgage with a “lost note” affidavit. Clearly beyond the 20 day requirement in paragraph (d)(2) of reg. Z. Now here in 2008 they are trying to sue for the money they paid out back in 2001.”

ANSWER:

• This is slightly confused and the reason why we need more information. I assume you mean that you made no payment to WAMU because you had rescinded. The fact that they canceled the note with a lost note affidavit might not be sufficient if they were no longer the holder or holder in due course.
• In any event, my guess is that applicable statutes of limitations or the rarely used common law doctrine of laches would prevent them from proceeding in litigation. There is also a possibiity of estoppel since you acted on their cancellation of the note with the lost note affidavit. Beware the affidavit however — it was probably signed by someone with absolutely no knowledge of you, your transaction, your note or your mortgage. In this case, though it would seem that a full recovery of your attorney fees and costs would be appropriate.
• They key here is to keep the burden of proof on them. If they succeed in somehow shifting the burden of proof onto you, there is considerable expense in discovery and other investigations that are required.
• Seems like the suit should be met with a speaking motion to dismiss, a notice of action that you will seek attorney fees for a frivolous lawsit, and/or a motio  for summary judgment.
• If you ahve the lost note affidavit and there is paperwork showing that they were cancelling the debt, and they can’t show that you ever paid,they have a problem. They have an even greater problem if they never resolved the payoff of your old mortgage. Sounds to me that at this point you have your house free and clear of any encumbrance of mortgage or note.
• In order to clarify the situation, it would seem appropriate to file an action to quiet title against WAMU.
• Then I think Iw ould file a separate lawsuit to quiet title against the old mortgage company. from thier prospective they were right in returning your attmmepted payments because the loan was paid off.

4. You write: “Several questions because my lawyer has never faced anything like this. Wouldn’t violation of Federal Law be used as a defense against an “unjust enrichment” claim? Couldn’t a SOL defense be used because they let so much time expire and in a sense “NEVER” complied with paragraph (d)(2)?”

ANSWER: Your lawyer and every lawyer is actually facing issues like this every day — they just don’t realize it. Almost all loans from 2001-2008 fall into this category. This is only different because it highlights the chaos the players were creating. Yes SOL applies.

5. You Write: “Could it be established that I never have to comply with paragraph (d)(3) because they can never comply with (d)(2) technically because of an implied “statute of limitations” ie. the 20 days? Could my attempts to fax copies and work towards a resolution be considered an attempt to “tender” if a timely compliance with (d)(2) had occurred? Honestly, my wife and I sought a resolution years ago and instead WAMU sought on lt to force a loan on us and then tried all kinds of tactics to collect, EVEN FORECLOSURE proceedings! On a property that they had NO CLAIM to under the Right of Rescission we exercised. Their harassment has gone on to this day, and now THEY HAVE THE GALL TO SUE US! After all of this, I don’t think they deserve anything. I have done everything properly under the law, they have at every turn not followed the law and even denied that we had a rescission. Now a Judge may possibly rule in their favor, but I feel that the Right of Rescission may be the key to beating them. I know this is a lot, but do you have any advice on this situation?
>
> Thanks in advance and GOD BLESS!
>
> Bryan

ANSWER: I THINK WE HAVE COVERED IT. I AGREE WITH YOU BUT IT MIGHT BE MORE CHALLENGING WITH MORE FACTS. I WOULD PROCEED WITH MORTGAGE AUDITS ON BOTH “LOANS” AND A TITLE OPINION.

We have several who MIGHT assist you and you can of course find your own. You can also use the information on this blog to get started yourself or to get your lawyer started in the right direction.

A member of our team will contact you shortly to get information. This information will be passed on to a member of our volunteer team who will give you suggestions or options on how to proceed.

The normal procedure is as follows (although every case has some differences)

1. Information gathering — have your loan information and closing documents at your fingertips before our team member calls you. If you don’t get a call, please dial 954-494-6000.
2. File review
3. Referral to Mortgage Audit Group that will analyze your mortgage, find potential or actual violations of TILA and initiate RESPA procedures to settle your case.
4. Demand Letter to “lender” requesting documents to prove they are the holder of the note and that they have the power to enforce the mortgage and note.
5. Rescission Letter or Cancellation where appropriate: Note that this might be under TILA but it will probably include rescission or cancellation under other Federal and State statutes and common law. Rescission does NOT mean you are offering your house to the lender. Rescission is the reversal of a transaction. The transaction you reverse here is the “loan” of money in exchange for your signature on a pile of documents that you could not possible understand, and where the real lender was hidden from you, and where most of the fees generated by your loan closing was were not disclosed, which is a violation of several different Federal and State requirements. Rescission cancels the note and mortgage and gives rise to a possible claim by the lender for return of the loan — but without any claim on your house. The lender’s claim is subject to numerous defenses, affirmative defenses, set offs, and counterclaims.
6. Litigation: referral to a competent licensed legal professional in your area. Or you can find your own and our attorneys will assist. Fees vary, but a retainer is ordinarily involved since these attorneys must be paid for their time. However, most of the attorneys we work with keep their retainers low and take most of the case on contingency — a good indication that they believe a substantial recovery for you is possible. Recovery of attorneys fees and costs is deducted off the amount you owe.

NOTE: WHILE I AM LICENSED TO PRACTICE LAW IN THE STATE OF FLORIDA AND I AM AN EXPERIENCED LITIGATOR — ESPECIALLY WITH THE ISSUES RAISED BY FORECLOSURE DEFENSE, I CONSIDER MYSELF RETIRED, AND I HAVE NO INTENTION OF ACCEPTING A RETAINER OR APPEARING IN COURT ON BEHALF OF ANY NEW CLIENTS. I AM A WRITER AND A RESOURCE. SINCE I LIVE IN ARIZONA, THE LIKELIHOOD OF MY APPEARING IN ANY CASE IN FEDERAL OR STATE COURT IN FLORIDA IS EXTREMELY LOW. THEREFORE I HAVE BEEN SEEKING AND RECRUITING ATTORNEYS WHO ‘GET IT” TO TAKE THESE CASES ON. I TEACH SEMINARS AND I MENTOR LAWYERS OVER THE PHONE. I AM ALSO AUTHORING A BOOK ON THE HOMEOWNER’S WAR, WORKBOOKS FOR LAWYERS AND WORKBOOKS FOR PRO SE LITIGANTS WHO CANNOT FIND OR AFFORD AN ATTORNEY. I DO NOT RECOMMEND PRO SE APPEARANCES ALTHOUGH I WILL CANDIDLY REPORT THAT PRO SE LITIGANTS ARE HAVING CONSIDERABLE SUCCESS AT THE MOMENT.

Neil F. Garfield, Esq.
ngarfield@msn.com

This e-mail transmission may be protected by attorney client privilege and attorney work product privilege if it contains legal advice or opinions, and it contains information that are private, trade secrets, protected by non-disclosure and non-circumvention agreements between the parties and is therefore confidential and privileged. It may also be for the sole purpose of compromise and settlement only if it contains an offer and may not be used in any judicial or quasi-judicial or administrative proceeding without the express written consent of the sender. It is intended only for the addressee(s) named above. If you receive this e-mail in error, please do not read, copy or disseminate it in any manner. If you are not the intended recipient, any disclosure, copying, distribution or use of the contents of this information is prohibited. Please reply to the message immediately by informing the sender that the message was misdirected. After replying, please erase it from your computer system. Your assistance in correcting this error is appreciated.

> Date: Mon, 18 Aug 2008 12:14:33 +0000
> To: ngarfield@msn.com
New comment on your post #165 “FORECLOSURES: TILA RIGHT OF RESCISSION and CONSEQUENCES”
> E-mail : bkfoster@bellsouth.net

> Comment:
> I am currently dealing with an issue in court where I actually rescinded a loan within the 3 day period. (The closing atty. at the title co. seemed shady and we did not feel comfortable with the whole deal.) Well, they (WAMU) funded and paid off the other mort. co. within the 3 days which violated the “delay of performance” statute. Then they attempted to collect and I informed them that I had rescinded. (I have a copy of the form, a copy of the express mail label, a copy of the signed delivery receipt, etc.) Plenty of proof that I rescinded in a timely manner. This was 2001. I made no payment to them at all. I attempted to pay my old mort. co. but they sent my payment back. Well I faxed them (WAMU) several copies of my rescission documents over the years and it wasn’t until 2005 that they canceled the mortgage with a “lost note” affidavit. Clearly beyond the 20 day requirement in paragraph (d)(2) of reg. Z. Now here in 2008 they are trying to sue for the money they paid out back
> in 2001. Several questions because my lawyer has never faced anything like this. Wouldn’t violation of Federal Law be used as a defense against an “unjust enrichment” claim? Couldn’t a SOL defense be used because they let so much time expire and in a sense “NEVER” complied with paragraph (d)(2)? Could it be established that I never have to comply with paragraph (d)(3) because they can never comply with (d)(2) technically because of an implied “statute of limitations” ie. the 20 days? Could my attempts to fax copies and work towards a resolution be considered an attempt to “tender” if a timely compliance with (d)(2) had occurred? Honestly, my wife and I sought a resolution years ago and instead WAMU sought on lt to force a loan on us and then tried all kinds of tactics to collect, EVEN FORECLOSURE proceedings! On a property that they had NO CLAIM to under the Right of Rescission we exercised. Their harassment has gone on to this day, and now THEY HAVE THE GALL TO SUE US! After all of
> this, I don’t think they deserve anything. I have done everything properly under the law, they have at every turn not followed the law and even denied that we had a rescission. Now a Judge may possibly rule in their favor, but I feel that the Right of Rescission may be the key to beating them. I know this is a lot, but do you have any advice on this situation?
>
> Thanks in advance and GOD BLESS!
>
> Bryan

>
>

Filed under: CDO, currency, Eviction, foreclosure, GTC | Honor, Mortgage | Tagged: 3 day rescission, foreclosure defense, lost note affidavit, rescission, selling forward |