Foreclosure Offense and Defense: Identity Theft Might be the Keystone

Based upon the submission from Sal, it would appear that the identity theft statutes apply in every element. It might behoove you to go down to the police station and file a complaint for ID theft, in addition to including it in your defensive pleadings and counterclaim against the party foreclosing or attempting to foreclose your property:

1. Any person who willfully obtains personal identifying information of another person and attempts to obtain credit, goods, services, or medical services without consent shall be guilty of a wobbler misdemeanor/felony. [In most cases, the mortgage broker, appraiser and “lender” obtained your personal information under false pretenses for the purpose of obtaining credit (the mortgage loan, and the proceeds of sale from investors in mortgage backed securities which are now universally recognized as worthless because the representations attendant to their sale were untrue.]

2. The 2002 amendment also expanded liability beyond ”willfully obtaining” the personal identifying information of another person to include as a misdemeanor offense the transfer or retention of that information with ”the intent to defraud.” [This is easier than it sounds. The “lender” received 102.5% of the principal amount due on the loan from a third party on a loan that all participants knew included inflated appraisals and failed tangible benefit test and affordability.

  • At most, this paper was worth 40%.
  • No arm’s length buyer would have paid 102.5% unless the buyer already knew the loan was already pledged and sold to a pool under a pooling and service agreement, and where the risk and liability was passed on under an assignment and assumption agreement.
  • Under those circumstances the buyer received a total of 105% for paper that was worth, at most 40%.
  • Then the paper was sold to investors under false pretenses wherein the actual payment from the borrower was disguised (by “reserves and other means) and the actual fair market value of the security was artificially inflated (i.e., they lied).
  • The inflated real estate appraisal was matched by an inflated securities appraisal from one of the rating agencies (Moody’s, Fitch, S&P etc.).
  • The investment was further “overcollateralized” by under capitalized entities with other worthless paper, insurance from entities that didn’t have the money to pay, and credit default swaps from companies that also didn’t have the money to pay.
  • The victims of this fraud include the “borrower” who was actually the issuer of a security without his knowledge or consent, and the investor who was purchasing something that did not resemble what was described.
  • Had either the borrower or the investor known the truth, the transactions would not have occurred. All the participants in between made lots of money with each movement along each link of the securitization chain.
  • In no case was the borrower aware of the true nature of his transaction, the use to which his signature would be put, or the outcome of the borrower’s investment. In virtually all cases, the object was the procurement of personal identifying information that was used by each of the participants at each link in the securitization to pay themselves unearned, undisclosed fees, contrary to law.

One of the things I like about this strategy is that it neatly ties the entire transaction into a single transaction from the borrower through the investor. Now with all of the bailouts occurring, ALL of the participants in the securitization chain are getting paid in full, which means the note is satisfied. If the note is paid, the mortgage cannot be enforced.

From Sal in Comments:

Part I WHITE COLLAR CRIMES AND OFFENSES

Chapter 1 Complex Theft Offenses

1.900 IDENTITY THEFT

In 1997, the California Legislature added Penal Code section 530.5 to create the explicit offense of ”identity theft,” and expanded the statute in 1998 and again in 2002. Any person who willfully obtains personal identifying information of another person and attempts to obtain credit, goods, services, or medical services without consent shall be guilty of a wobbler misdemeanor/felony. The statute includes common identification indicia in its list of ”personal identifying information,” i.e., name, address, telephone number, driver’s license number, social security number, place of employment, employee ID number, mother’s maiden name, bank and credit account numbers. The statute was amended in 2002 to expand identification indicia further to include, among other things, checking account numbers, passport numbers, date of birth, credit card number, biometric data (including fingerprint, facial scan identifiers, voice print, retina or iris image, or other unique physical representation), and personal identification numbers or passwords. (Pen. Code,  530.5(b).) The 2002 amendment also expanded liability beyond ”willfully obtaining” the personal identifying information of another person to include as a misdemeanor offense the transfer or retention of that information with ”the intent to defraud.” (Pen. Code  530.5(d).)

In 2001, the law was amended to eliminate the ”without consent” element (AB245 (Wyland)). Hence, as of 2002, the use of such information ”for an unlawful purpose” constituted a violation. A person could therefore consent to the taking of some personal information for a consented purpose–and its expropriation for another (unlawful) purpose would be a violation.

Also in 2001, the Legislature enacted SB125 (Alpert) to allow victims of identity theft to file a police report and obtain information from financial institutions and credit card companies about false identification in their name–overcoming Right to Financial Privacy Act impediments.

<b>It looks like that elimination of “without consent” might just make this an actionable offense in my opinion.

Link to FTC Affidavit for ID Theft

If the police are reluctant to take your report, ask to file a “Miscellaneous Incidents” report, or try another jurisdiction, like your state police.

You also can check with your state Attorney General’s office to find out if state law requires the police to take reports for identity theft.

3 Responses

  1. This information confirms what I filed with the F.T.C., D.O.J. (in my state), FBI, and my local P.D., etc. The only thing I recieved was a number from the F.T.C., who said that I could not file a complaint for I.D. theft by the lender/investor.

  2. Here is a link to the affidativ to report identity theft from the FTC.

    http://www.ftc.gov/bcp/conline/pubs/credit/affidavit.pdf

    If the police are reluctant to take your report, ask to file a “Miscellaneous Incidents” report, or try another jurisdiction, like your state police. You also can check with your state Attorney General’s office to find out if state law requires the police to take reports for identity theft.

  3. I love it !! I’m going to give serious consideration to doing this. Thanks !!

    Steve
    99Libra@gmail.com

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