Debt Validation Letter– Creditor or Collector?

the bailout and insurance money was paid not to the investors or the borrowers, it was paid to the investment bankers who never were at risk. I’m beginning to think that the ultra-sophisticated investors have some dog in this race that prevents them from entering the foreclosure market directly to recover or settle their investments at a much higher rate of recovery than that offered by Wall Street.Maybe they were not deceived after all and the investment bank can prove it.

A short note on why you should send one in addition to the QWR.

The response is usually that a DVL is inappropriate in a mortgage case. The mistake universally made is that this response has merit. It doesn’t. And the reason is that it would only be true if the pretender lender was actually a party to the mortgage transaction. In order to be a party to the mortgage transaction it must be the creditor or the debtor.

If they want to take the position that the the DVL does not apply then the proper response is an objection to that statement and a motion to strike it from the record. The basis of the objection is that the lawyer has failed to establish that his client is a party to the transaction. So now he either must give up or withdraw his objection to the demand that the DVL be answered OR prove that his client is a creditor.

Anyone other than a creditor in a mortgage transaction would of necessity be aan agent or at least alleging some agency relationship which makes them a collector — which is exactly why the Consumer Debt Protection Act was written.

Thus if you can get the pretender lender lawyer to state that the DVL doesn’t apply, your response should be good, now he has raised an issue of fact entitling you to discovery and an evidentiary hearing on the issue fo whether his client is a creditor or a collector.

And by the way, you should also note that the statute requires not validation, but verification. validation would merely be a statement from the same party that says, “Yes, that’s what you owe, now pay up.” Verification requires that the collector actually inquire from the principal, disclose the principal and provide a signed, sworn statement that the information is true, providing the details of what was done, who they spoke with, where the files are and how anyone knows the answers.

The usual trick by the foreclosure mills is to get a signature from anyone on a vague document that doesn’t really say anything and doesn’t really say the signer knows anything. Then the lawyer goes to court and tells the court what it says, and if you don’t object, the lawyer’s statement will be taken as a true summary of the contents. Read the document carefully.


Lawyers Beware: A firm grasp of the laws and rules of evidence and the objections that go with that knowledge is the key to winning these cases. Their goal is to prevent you from getting the real information and to keep the investor and the borrower separated by a veil of secrecy or as Countrywide was so fond of saying “confidentiality.”

If the investor and borrower were to actually get together, the investor would find out first that only a small portion of his investment was used to fund mortgages — the rest being kept as fees and betting money that the loan would go bad.

The second thing they would discover as they drilled down further is that the bailout and insurance money was paid not to the investors or the borrowers, it was paid to the investment bankers who never were at risk. I’m beginning to think that the ultra-sophisticated investors have some dog in this race that prevents them from entering the foreclosure market directly to recover or settle their investments at a much higher rate of recovery than that offered by Wall Street. Maybe they were not deceived after all and the investment bank can prove it.

32 Responses

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  2. Post in red hits it on the head. If you refer back to second response over 1 year ago, I’ve learned more as to what, how, and why. I am a legal layman, 30 year research analyst who had to know how they destroyed my financial and personal existence. If ‘AS RED SAID’, you drill down, you will see connections that run so deep, truth is buried as preconceived, followed through, covered up, and then (documentation of players, fraud, and connections), destroyed / shredded. In short, demand / QWR is ignored and fabricated. Trusts were never funded, period! Big guys colluded with ‘arms length’ small timers, so to speak, (NCM, CW, brokers or just crooks, etc.) to ‘flip’ anything with equity, prime fixed loan, and circumstance. (translates risk assessment / cross marketing) Your personal info, exposed, bought, traded, and manipulated. Whether it be health, death, insurance claim, checking account, revolving accounts, and even auto accidents, and car rentals, these life experiences tell them who you are and that you, and your home / equity / life savings can be had. While you are being pushed, robbed, scammed, threatened, etc by seemingly unrelated parties, start digging. You will be shocked to discover all the illegal and unfounded pressure leads right back to one guy, “your big time mortgage company.” Once you are threatened with loss of home and equity, they jump in with full intent. (compare your loan mod, lost docs, resend, postponement, etc. experience that led to 0 equity and 0 money, you will realize it wasn’t new or original.) In short, once your misapplied payments, escrow theft, forced insurance bleeds you to panic, you are approached to refinance out from under these crooks. What you don’t know is the secret deal (s), taking place between all these players, who in reality IS the big guy at the top. At refinance, figures, closing, escrow, insurance, etc. turns into a free for all that is never answered, QWR or not. Once you get to court, they make sure there is nothing left and the rush through SJ, UD, and continual rejection of your valid arguments comes to light; you are ‘border line’ mental, broke, and perhaps educated. (as in furious) Why can’t all the fake docs, sigs, back dating, and broken chain make an impression on the judge? Could it be by then they have presented created documents to show they are the owners. The intent to fund the trust is taken as action, the still incomplete and incorrect payment history is accepted as proof, and your upcoming quiet title case is little more than a 30K plus expenditure in hind sight. Because of the need for law professional and lack of funds, chances are your case is little more than a template which for one doesn’t even address all the fraud and loss you have incurred. Let alone, that FHA took over at refi time, Radian Guaranty paid off a bank that you never dealt with, the SEC stopped reporting, and the IRS is getting 1099s so you are sure to never scrape another dime to pay another attorney again. P.S. Dragged out time frame looks as if you LOST nothing because now your house is worth nothing. That is nothing after FHA,, buy backs, insurance fixes, and tax evasion was turned into trillions. This modest house in the low rent district was used as a vehicle for the filthy rich. The co that figures the FVM is ALSO owned by them as well…so, AFTER the year end write down followed by the insider sale, THEN you see your home was really worth nothing. Just your sanity, health, dogs you put down to pay court case, and future all sold for zilch. By, to, and for ???
    P.S. All the new players are the same as the old, just with different names!!!!

  3. I received “a default of payment letter” and have 30 days to respond. Can I send the attorney this letter and do they have to respond according to FDCPA guidelines? And if they don’t, when I go to court, if I told the judge that the attorney did not respond to my letter, will he enforce it? Thanks.

  4. Is there someone out there who can follow and add some credence to my experience which predates most people on the timeline, because I was falsely harrassed by third party creditor, (interesting note, unpaid claim concerning AIG, Amex, & Enterprise Rental, all Citi held co), who continually threatened to take my home and said , “I’m calling your lender.” June 2005, I then contacted Citi who had JUST taken over loan from AMC (I got contacted for inclusion on Class Action). When I called Citi, they very kindly offered 30 day extention, but told me I had to be delinquent and not send payment. They dragged it into second month, and behavior was very shady so I wired the two payments immediately. Next call to them they said, oh we were just going to approve, but you messed up by paying, sooo, NEXT month wait ten days and call back. When I did, immediate response, “You are in foreclosure, your house is gone, it is over and there is nothing I can do.” Frantic (widow who had owned home of 32 years free and clear before investment stock ripoff and on going deceit), I rushed to find new lender (on line) .Approached by unlicensed broker who steered to New Century 2/28 ARM ‘bait & switch’ then to Ocwen who essencially pulled same trick using HAMP application, mislead, avoid, and delay while saying they would not foreclose during application to HAMP. (only delinquent apps at this time), which I wasn’t delinquent until I paid LMG, plus two more law offices, while Ocwen stayed mute for eight months even though I called them repeatedly. At the VERY time of rushed refi (July 05), Citi / New Century engaged in sale / repurchase agreement while all information and disclosure to me was with held and lied about, including they added on major PMI, Radian Guaranty and more when I didn’t even know it was a subprime loan. Now, beginning Dec 08, while Ocwen was pretending to negotiate loan mod while my continuing research lead to more detailed knowledge of prepaid guaranty ins., and what it meant for me. In addition to their obscene disregard for law or morality, the prepaid foreclosure insurance forbids among many other things ANY fraud or indication of impending foreclosure. As credit report of late payments show, (including reporting me late AFTER they were paid off), and what pushed me with no choice into entire decision, various and continual plays for sucking up equity served as distraction as I now realize they had been working for foreclosure all along. (collusion at many levels, individuals, and financial firms ‘helping’ me from frying pan to fire.) I have paid three different mod / law firms to drag out time, add enourmous funds and sink further under water. More than Citi, falsely pushing a foreclosure straight into arms of sub-prime, when loan was only year old, Ocwen says I can wire money to Chase and catch up. (as well as sign away rights of every imaginable kind). Aside, from all the obvious issues of law in this process, I keep asking how can this be: If Citi who defrauded me into forced finance with New Century, (have hand shake, repurchase, buyback etc. with Chase as well as New Century), aren’t I now paying the original creators of scheme? Fabricated a foreclosure that included a furture payoff to New Century, which without all of them working together to with hold appraisal, application, credit score, escrow acct. ins. purchases, rates, fees, riders, ysp, etc., I have been chasing answers & proof for five years for what I knew long ago was a far reaching scam, including AIG. Also, Chase help desk, by slip up told me, it shows loan on my home, & by me & my SS # originated by WAMU, (my previous chk & sav bank), with a zero balance. Before all that the premium 6% fixed 30 yr. loan I had with AMC was one year old, (why did I pay Fidelity AND New Century claiming to be the title co’s, when it looks like my escrow funds purchased insurance for them!) That loan was a direct result of stock investment ripoff that lead to tax lean and the fake ‘investment & tax’ advisor manipulating my investment and not paying the taxes with the money I paid her. P.S.Thank you Tim for your time. Mike is a exceptional human being who I will never forget.

  5. And MERSCORP is owned by the Banks and Fannie Mae/Freddie Mac.

  6. Anonymous,
    I just read the link you suggested…I think you’re right that it demonstrates that until now, MERS hasn’t been legally obligated to provide the identity of the real creditor.

    Hmmm…I found it interesting that in the public comment, MERS said this:

    “As mortgagee or beneficiary, it [MERS] holds mortgage liens on behalf of promissory note owners.”

    That pretty much makes the case I laid out below–that MERS does not own the notes and therefore cannot “assign” them. After all, the mortgage follows the note, and that being the case, MERS cannot “hold” mortgage liens on notes that they don’t own. And since they take pains in the public comment to distinguish themselves from “promissory note owners,” it’s clear that, as you say, MERS has no legal authority to do ANYTHING, especially not to assign my or anyone else’s deed/mortgage “together with the note” to anyone else (frankly, aren’t all deeds/mortgages “held” by the county recorder–is there really any such thing as “holding a mortgage lien?”–my research says “no”).

    Or rather, they have the PRESUMPTION of legal authority without actually HAVING the legal authority. That is to say, their authority to assign notes and mortgages will be presumed to be valid–unless they are challenged on it.

    What they’re attempting to do would be really quite laughable if it weren’t so tragic, and it goes back to another comment I made earlier, that is, these pretender lenders would have you believe things are one way when in fact they are completely the opposite of that. Unfortunately in this country, most people–including me–are taught not to question “authority” and to go along to get along.

    Luckily, my conditioning has been broken in the last 3-4 years and I now have a fully functional BS detector. And man, it goes off like crazy when I point it in the direction of my attempted foreclosure and the documentation that tries to put a sheen of legality on it.

    My resolve is becoming even stronger–like Angry’s–to put on my sh!tkickers and kick some sh!t outta these thieves.

    Thanks for pointing that out, Anonymous.

  7. zurenarrh

    Did you see the MERS comment on the Federal Reserve website – regarding TILA amendment for creditor disclosure? I know that this amendment is not retroactive (a Consumer Law Center is asking that it be retroactive), but still might be able to use this in court to demonstrate that up the date of this amendment – MERS has had no obligation to identify the real creditor. Do not understand how MERS could assign anything- and servicers are not the creditor unless they actually purchased legal title and account for it on their books.

    You may find the MERS comment interesting. Here is how to look at MERS comment if you have not already seen it.
    1) search “Federal Reserve”
    2) in the search box – type “public comments”
    3) click on “Regulation Z – Truth in Lending”
    4) click on “View Comments on this Proposal”
    5) click on comment by MERS

  8. 1 year plus fighting is very tiring , many times the road is hopeless,surrender seems the only sure thing that NOT fighting renders , but you guys give the spark back to light that fire to remind me..
    They who would give up [surrender] an essential liberty for temporary security, deserve neither liberty or security.

    fight on!

  9. Land patents apparently are NOT a scam, since the U.S. Government apparently relies on them. That is to say, they’re not a scam in the LEGAL sense, though they’re clearly a scam in the MORAL sense. But I digress…

    I wanted to post the summary of my basic argument for Dan and others to read, if interested. However, I don’t want snoops knowing everything I’m gonna do before I do it, so I’ll say this much…

    My argument is very simple, and it all goes back to the reason that I challenged the foreclosure in the first place. And the argument is this:

    1. MERS issued an assignment to ABC, my servicer, saying that MERS assigned “all beneficial interest” in my deed of trust to ABC, “together with the note” and then in the notice of sale, ABC referred to itself as “the legal holder of said indebtedness,” i.e., the note. Remember that part for later.

    2. SIMULTANEOUSLY, Fannie Mae said they owned the note. So I thought to myself “Somebody’s trying to pull a fast one here, and I think I know who it is” while looking in ABC’s direction. So I sued ABC and got a 10-day TRO.

    3. In its pleadings, ABC admitted two separate times, in these exact words, that “Fannie Mae held the note at the time of [my] complaint.” To me, that alone is enough to bring down ABC’s entire house of cards. Remember, ABC claimed in its notice of sale that it was “the legal holder of said indebtedness” yet says exactly the opposite–i.e., that “Fannie Mae held the note at the time of my complaint”–in its pleadings.

    So I think the question that must be answered is, which is it? Did Fannie Mae hold the note at the time of my complaint, as both Fannie Mae and ABC say–or did ABC hold the note? If the former, wouldn’t that render an assignment from MERS to ABC null and void, since MERS is not and was not the holder of the note or the deed of trust (and never was, since the mortgage follows the note and the note was not sold to MERS)?

    Throw in some UCC, the stuff about can’t become a holder if instrument is taken with notice of being overdue (in my case, ABC is the party that GENERATED the notice of being overdue so they can’t claim to not have had notice), etc.

    That’s the general idea. So what does that get me? Well, hopefully it gets a declaratory judgment that ABC can’t take my house, at least not in the current configuration of paperwork, etc. I think adding a quiet title claim, some fraud, etc., wouldn’t hurt either. I realize I’m not being super-specific, just trying not to tip my hand too much.

  10. I didn’t recommend it to avoid foreclosure or to avoid taxes. The statements in the “warning” were about using it to stop foreclosure. It will not work for that either. I do not sell this information, charge others or give legal advice. It is up to every person to make their own decisions – and they should seek competent legal advice.

    The following case does not “advocate” this but it shows what the Supreme Court thinks about Land Patents:


    I will read the cases cited though to learn what was going on with them. Thank you for the heads up Storm. I am aware that there are scam artists out there who will use anything to take money from people. Most of us are well aware of this – caveat emptor …

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes only.

    Dan Edstrom

  11. Careful Dan, land patents are a scam!

    Read the Notice from the Department of the Interior at:

    Hundreds have literally gone to prison promoting this scheme; and individuals employing this scheme have been sanctioned by the courts!

    Read the article below from the San Diego Union-Tribune.

    SAN DIEGO — Prosecutors are asking for the public’s help in finding two people suspected of scamming homeowners in a foreclosure fraud scheme, officials announced Friday.

    Julita Whittingham and Edgardo Orcino are part of a group of people suspected of defrauding San Diego County homeowners out of more than $100,000 in 2007, prosecutors said.

    Arrest warrants have been issued for Whittingham, 47, of Alpine; and Orcino, 57, of San Diego.

    A third suspect, Jessica Refuerzo, 55, of Spring Valley, was found and taken into custody Friday, officials said.

    Prosecutors said the trio falsely promised to help homeowners who had defaulted on mortgage payments or who feared they would soon default by holding seminars in which they pitched their scheme.

    Two other suspects in the case are in custody.

    Larry Smith, 60, has pleaded not guilty to felony charges of grand theft, conspiracy to commit grand theft and engaging in deceitful practices while acting as a mortgage foreclosure consultant. If convicted, he faces 37 years to life in prison.

    Prosecutors said Smith and the others sold “land patents” to homeowners facing foreclosure and told them that the patents would make them a sovereign nation that would be protected from the banks. He said the banks would own the homes but not the land underneath them, and essentially, the homes would not be foreclosed on because they would be worthless to the banks without the land, said prosecutor Eric Ludwig.

    At least 17 people fell for the scheme, prosecutors said, and lost tens of thousands of dollars.

    The District Attorney’s Office is still investigating.

    Prosecutors ask anyone with information on the trio’s whereabouts to call (619) 572-3566.

  12. Dan,

    Looking into land patents. Very interesting. Thanks for the tip.

    At any rate, the reason I’m convinced I have a shot as pro se in fed. court is because my case is actually very simple. I just wrote it up but am on the go now and will be out of pocket this afternoon, so I’ll have to post it later today. Or email it to you, just because I respect your opinion and input.

    BTW, I got word that my FOIA request has been completed and is awaiting approval by the legal dept.

  13. All I can say is, if you lose your house or walk away, have you given up your rights? File a criminal complaint anyway. You could still sue, and now your damages have gone up substantially. I do understand the issues. Fighting isn’t easy, in fact it is extremely stressful. Fighting foreclosures is hard on relationships, pregnancy, kids, friendships, – nearly every aspect of your life.

    If you don’t do anything else, GET A LAND PATENT before the foreclosure sale.

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes only. These are my opinions.

    Dan Edstrom

  14. Dan,

    You’re exactly right–I want an evidentiary hearing. And I don’t really want to leave my house before that happens. But my wife, who is 7 months pregnant, doesn’t want to fight–understandable. She doesn’t want me to fight either, but I know we have a good case. It’s hard for me to let it go.

    However, the least amount we’ve been quoted for an attorney is $4K contingency fee–and this is from a great attorney. But we’re tapped out. Don’t have $4k in a lump sum. So I’m up a creek without a paddle unless I go DIY.

    I know it’s a big task, but I feel like it’s not impossible. The pretenders are counting on me to be tapped out and too scared to navigate the dark waters if a federal proceeding. Well, they got it right on the first part but not the second. Maybe it’s just stupidity on my part, but what I’ve learned the past couple years is that nothing is what it seems to be, or what the powers that be would like you to believe it is. That would include fighting them in federal court–I’m supposed to be intimidated, but don’t see why I should be, except that everyone says I should.

    Not trying to talk tough just for the sake of it, and I may eat these words. But you don’t win (or avoid losing) if you don’t pick up the ball and run with it.

  15. zurenarrh,
    You are trying to get to an evidentiary hearing. If there are no disputes of material fact you will never get there and the other side will win summary judgment. You don’t have to win with any of these arguments, you have to get to discovery and an evidentiary hearing. Your chances will go up dramatically – as long as they are handled correctly. My points cannot be used in a vacuum. I am making them in relation to everything Neil and others have provided on this site. When used in that context, relevance to the situation can be seen. Build your case, create a criminal complaint. When you tie it all together, it will make more sense.

    None of this means anyone will win, but if you go in half way or half hearted, how easy will it be to get defeated. If I am not convinced of this I will not be able to convince a judge.

    I do have an attorney, it’s too big to do yourself (in my opinion). But good attorneys are hard to come by.

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes only and represents how I am proceeding with my case.

    Dan Edstrom

  16. Dan,
    I don’t think it strains credulity–I’m totally with you. I’m just afraid the judge won’t buy it because he’s fallen for the whole “free market”/banks are our financial bedrock mythology all his life and has spent his career on the bench enforcing that myth. It would be very hard for him to accept such an argument–even though, or especially though it’s completely true

    are you pro se? I’m still trying to decide which path to go down…

  17. The definition of Verification does not correspond to what these courts are saying. The law plainly says verification. If the court wants to interpret this as something that is not verification, then essentially it allows anyone to “verify” any loan against “anyone”. Personally I would fight this issue. The only problem is that in my case they never responded at all so the point is moot (except for the servicer, but they had already passed it on to a 3rd party debt collector). I imagine this is true for many others, but I have no idea what the ratio is. From what I have seen the response to a DVL is below 10%. Just a note that I sent a debt validation letter to the sub-servicer, master servicer/sponsor/seller, Trustee, the master servicer/sponsor/seller’s parent company (and their parent company) and the debt collector company hired to foreclose. I did receive a partial response from the sub-servicer (DVL for them was included in a QWR) but they failed to disclose the creditor (even though I specifically asked them to provide the creditor) and said the information they did not provide was proprietary.

    Anonymous, keep it coming. What happens with the notes, obligations, servicing rights, collection rights, etc. is a giant black box. Very few have any idea what is actually happening and even when explained it is difficult to understand what it really means. Few understand how the Mortgage (and/or Deed of Trust), the note, the obligation to pay, the servicing rights and the collection rights have been sliced up individually and portioned off to different parties (like a pizza).

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes only. These are my opinions only.

    Dan Edstrom

  18. Storm,
    You are correct that Wikipedia is not a reliable source. The Wikipedia definition of Fraud in the Factum says this (and is where I pulled it from):

    Fraud in the Factum is a type of fraud where misrepresentation causes one to enter a transaction without accurately realizing the risks, duties, or obligations incurred

    You are correct, this is fraud in the inducement. Fraud in the factum generally VOIDS a document, Fraud in the Inducement makes the document VOIDABLE.

    Thank you for pointing this out.

    Dan Edstrom

  19. Nobody ever said that a PROPERLY written DVL is not important; I agree 110%, it is most important in the mortgage context. Nonetheless, the problem with the post was the statement: that the “…the statute requires not validation, but verification.” Verification requires that the collector…provide a signed, SWORN STATEMENT THAT THE INFORMATION IS TRUE…”

    The FDCPA does not require a debt collector to provide the original, a certified, or an attested copy of the document creating the debt as part of the verification; nor does the FDCPA contain a requirement that the verification of the debt be under oath, in an affidavit or a deposition. See15 U.S.C. § 1692g.

  20. I look at Neil’s post differently – and think the FDCPA DVL is very important. According to the FDCPA – the current creditor to whom the debt is owed must be identified (for obvious reasons). According to the Federal Reserve Interim Opinion regarding the TILA May 2009 amendment (disclosure of creditor), the definition of creditor does not include mortgage servicers or investors who have a beneficial interest in pass-through securities and Real Estate Mortgage Investment Conduits. The creditor is defined to include the party who accounts for the mortgage loan on it’s balance sheet. If there are multiple investors who would account for the loan on balance sheet, the investor with the largest position is required to inform the borrower (disclose) to whom the mortgage loan was sold. “Investors” in mortgage loans and investors in pass-through securities, are two different things.

    Under the FDCPA, if the debt is acquired after default, then the current creditor is a debt collector. The FDCPA debt validation letter is critical to establish the identity of the creditor and whether or not the current creditor is a debt collector. Delinquent loans are in default – and trusts and trustee do not acquire delinquent loans – trusts rid themselves of them because a trust can only pass-through current receivable payments (SEC Regulation AB). Thus, assignment to a Trustee for ABC Trust would make the Trustee/Trust a debt collector (acquired debt after default) but a Trust/Trustee for securitized Trust cannot acquire default debt. And, according to the Fed Reserve, servicers are not the creditor – and trust and trustees (beneficial owners of pass-throughs) cannot be the creditor because they do not have a balance sheet to account for loan (or recovery thereof). When mortgages are delinquent – they are no longer a mortgage – but are a default debt. So the FDCPA DVL forces identification of the current creditor – to whom the debt is owed. If the actual creditor has not sold the collection rights on the loan – and accounts for the loan (including charge-off) on its own balance sheet – then they are not a debt collector. If collection rights were sold or swapped out of the trust (after default) then the current creditor is a debt collector and is subject to the FDCPA. It is important to know who will account for recovery on the loan proceeds from a foreclosure – if the proper party is not identified – the debt is never really extinguished. This is just a continuation of credit card securitization in which, often, debts were being paid – but never accounted for as paid – including, some debts that were discharged in bankruptcy. This is why, I believe, Bankruptcy courts look more closely at foreclosures than judicial courts – if the bankruptcy attorney really knows his job. And it is why financial institutions fought the Bankruptcy Bill that would allow homeowners to discharge the portion of loans that exceed home value. Such a bill would have forced identification of the actual creditor.

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes only. This represents my opinions only. (thanks Dan)

  21. Here you go SoCalGal:

    Since Wikipedia is not considered a reliable source here’s a few more cases.

    Graziano v. Harrison, 950 F.2d 107 (3rd Cir. 1991).(computer print-outs containing the amount due and date of services is sufficient verification.)

    Mahon v. Credit Bureau of Placer County Inc., 171 F.3d 1197,
    1203 (9th Cir. 1999) (verification of the nature and balance of the bill and an itemized statement of the account is sufficient.

    Johnson v. Equifax Risk Mgmt. Servs., No. 00 Civ. 7836(HB), 2004 WL 540459, at *8 (S.D.N.Y. May 17, 2004) (concluding copy of check was proper verification of debt);

    Clark v. Capital Credit Collection Servs., Inc., No. Civ. 03-340-JE, 2004 WL 1305326, at *8 (D. Or. Jan. 23, 2004) (itemization of debt proper verification of debt under § 1692g(b).

  22. Dan, actually you got your definitions of backwards. The first definition you gave for “fraud in the factum” is actually the definition for “fraud in the inducement”

    The second definition you gave is actually for “fraud in the factum.”

  23. If you think it strains credibility then don’t use it. If you don’t believe it applies to your situation, then I wouldn’t use it either. I think it applies to my situation and I have proof (evidence) that it does. That is what I want – an evidentiary hearing. And putting the burden on the other side. Even if it is true, what will the judge do? Who knows. But if you don’t take it to the full level, how will you win? By full level I mean CRIMINAL COMPLAINT. When you look at the string of laws broken from beginning to end it fits in perfectly. If you look at the complaints filed by many in California (at least the ones I have seen) they include the definition of fraud in the factum that says “fraud in the factum is a type of fraud where misrepresentation causes one to enter a transaction without accurately realizing the risks, duties, or obligations incurred”. This is not very far from the other definition, which is fraud that arises from a disparity between the instrument intended to be executed and the instrument actually executed; e.g., leading someone to sign the wrong contract.

    If the originator “promised” to lend us their own capital at risk of loss, and they did not, is the loan valid?

    According to California Commercial Code Section 3303 (apologies to those not in California):

    (a) An instrument is issued or transferred for value if any of the following apply:

    (1) The instrument is issued or transferred for a promise of performance, to the extent the promise has been performed.
    (2) The transferee acquires a security interest or other lien in the instrument other than a lien obtained by judicial proceeding.
    (3) The instrument is issued or transferred as payment of, or as security for, an antecedent claim against any person, whether or not the claim is due.
    (4) The instrument is issued or transferred in exchange for a negotiable instrument.
    (5) The instrument is issued or transferred in exchange for the incurring of an irrevocable obligation to a third party by the person taking the instrument.
    (b) “Consideration” means any consideration sufficient to support a simple contract. The drawer or maker of an instrument has a defense if the instrument is issued without consideration. If an instrument is issued for a promise of performance, the issuer has a defense to the extent performance of the promise is due and the promise has not been performed. If an instrument is issued for value as stated in subdivision (a), the instrument is also issued for consideration.

    Did they promise something? Did you give them something of value? You may want to consider Adequate Assurance of Due Performance. Also remember that if you sent a QWR and/or debt validation letter and you specifically stated that something was wrong with the loan (fraud, etc), and you sent it to the Trustee BEFORE the assignment performed in foreclosure, you have just made it IMPOSSIBLE for the Trustee to be a HOLDER IN DUE COURSE (assuming you sent it to the correct party and used the correct language). Remember, a HOLDER IN DUE COURSE:

    (Excerpt from California Commercial Code 3302, which I believe is substantially similar to UCC 3):

    (2) The holder took the instrument (A) for value, (B) in good faith, (C) without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment of another instrument issued as part of the same series, (D) without notice that the instrument contains an unauthorized signature or has been altered, (E) without notice of any claim to the instrument described in Section 3306, and (F) without notice that any party has a defense or claim in recoupment described in subdivision (a) of Section 3305.

    C and E above are especially applicable. You have just KILLED this argument for them. DO NOT FAIL TO SEND A QWR and/or DVL!!!! You do so only at your peril. You will not win your case based on a violation of the FDCPA, but you don’t have to. It is only ONE item in your arsenal, just like SHOW ME THE NOTE. You cannot use one item in this battle or you will quickly become a casualty.

    zurenarrh, I cannot say much about what you are facing, because this is a TOUGH issue for all of us. In the end every person needs to decide what to do. I can tell you that if you have not filed a criminal complaint, you have not been aggresive enough. Don’t fret – I have been working on mine for MONTHS.

    Everyone needs to remember that (in my opinion) EVERY SINGLE ONE OF THE ASSIGNMENTS done in foreclosure is fraudulent. In each case they have used your PERSONALLY IDENTIFIABLE INFORMATION to commit unlawful acts – which in CA is a felony. But it is also a felony under Federal identity theft laws. Think about this. If you are in CA and an FDCPA violation occurs using your personally identifiable information, the debt collector just committed a felony. This might be true in your state also. How many felony’s do you need before you can use Unclean hands? In CA the law also says that ALL beneficiaries are REQUIRED in order to substitute a Trustee. Who substituted your Trustee in foreclosure? How does this “jive” with the fact that the Trustee is (at least in my case) “owner of mortgage loans on behalf of issuing entity for the benefit of holders of certificates”? What is the definition of “beneficiary”? How about “the recipient of funds or other benefits ” or the following lengthy description:

    The person for whom a trust has been created.
    In a legal context, a “beneficiary” usually refers to the person for whom a trust has been created.

    May also be referred to as a “donee” or, for legal tecchies, as a cestui que trust.

    Trusts are made to advantage a beneficiary.

    For example, a settlor (also called a “donor”) transfers property to a trustee who manages the property, the profits of which are to go to the beneficiairy.

    In estate law, the term is synonymous with heir or heirs.

    Whether by will or intestate, the beneficiaries of an estate trust are those persons to whom, ultimately, the property is going. After death, there is a necessary lull as authority must be granted by the Court for the distribution of the estate.
    (From X_

    Did ALL beneficiaries sign the Subsitution of Trustee? If not, is the document valid or fraudulent? If it is fraudulent and it was “uttered” (published), is that a felony? Was it sent through the mail or electronically? Your personally identifiable information was included, is that identity theft?

    Remember – the only reason they put a document in front of you to sign was so that they could offer and sell securities to investors. And I will not get into the securities laws broken. If you are curious, read the criminal complaint against Bernard Madoff and contrast that with what they did in securitizing your loan.

    Why is it far fetched? Why were these laws written?

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes and is my opinion only.

    Dan Edstrom

  24. Dan,
    That info kicks much ass, but I think I judge would feel that it strains credulity. Which I guess it does if one doesn’t understand the predatory and illusory nature of our financial system in general and mortgage “lending” practices in particular.

    The reason I’m thinking along these lines is this: my case is now in federal court. By early March, I have to decide the best course of action from among these:

    1. Go ahead with the case pro se because I can’t find/can’t afford an attorney to represent me; pro se is not the best course to take, but is it better or worse than my other options below

    2. Declare bankruptcy in order to keep the house, only to go through 5 years of being told how to spend my money and still come out on the other side being totally underwater on my mortgage but maintaining my son in the school district and neighborhood with which he is familiar, but of course wasting money that could go into savings/college fund paying too much for a house that was given an inflated appraisal (the same appraiser did my house at purchase in 06: he said it was worth $200K, the next year at refi, he said it was worth $225K–that’s a good investment, right ;-)?)

    3. Allow the foreclosure to proceed just to take the cheap way out (deficiency would be cheaper than paying for the over-pricedhouse for the next 20-odd years) and get it over with.

    We are currently leaning toward # 3 when my wife and I talk about it, but I harbor fantasies of prevailing in # 1. If I thought the judge wouldn’t stick us with attorney’s fees, I might do # 1 as long as I could just to keep the pretender lender from having the satisfaction of trying to price me out of defending my rights, and then do one of the others. OK, so I’m confused, is what I’m saying. Trying not to think about it too much this holiday weekend…and not succeeding so much…

  25. California Commercial Code Section 3308

    (a) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature. If an action to enforce the instrument is brought against a person as the undisclosed principal of a person who signed the instrument as a party to the instrument, the plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented person under subdivision (a) of Section 3402.

    (b) If the validity of signatures is admitted or proved and there is compliance with subdivision (a), a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under Section 3301, unless the defendant proves a defense or claim in recoupment. If a defense or claim in recoupment is proved, the right to payment of the plaintiff is subject to the defense or claim, except to the extent the plaintiff proves that the plaintiff has rights of a holder in due course which are not subject to the defense or claim.

    Now note two of the definitions for forgery:

    • When a person, by fraud or trickery, causes another to execute a . . . document where the signer is unaware, by reason of such trickery, that he is executing a document of that nature.” (People v. Parker (1967) 255 Cal.App.2d 664, 672.)

    • the crime of falsely and fraudulently making [or altering] a document

    Now note a definition for counterfeit:

    • An imitation that is made with the intent to deceptively represent its content or origins; forgery. See also Forgery.

    Now note two Fraud in the Factum definitions:

    • fraud that arises from a disparity between the instrument intended to be executed and the instrument actually executed; e.g., leading someone to sign the wrong contract

    • a type of fraud where misrepresentation causes one to enter a transaction without accurately realizing the risks, duties, or obligations incurred. Black’s Law Dictionary (2nd Pocket ed. 2001 pg. 293). This can be when the maker or drawer of a negotiable instrument, such as a promissory note or check, is induced to sign the instrument without a reasonable opportunity to learn of its fraudulent character or essential terms. Determination of whether an act constitutes fraud in the factum depends upon consideration of “all relevant factors.” Fraud in the factum usually voids the instrument under state law and is a real defense against even a holder in due course.

    Did you think you were signing a document whereby the originator (the “lender”) would loan you their own capital at risk of loss?

    Did you know that another party provided the money and the “loan” was actually a securities transaction and that all parties present except for the borrower(s) knew this? The terms of the agreement were completely different and had already been established and put in place and USED by the parties at closing [except for the borrower(s)] and had full knowldege of this BEFORE you signed.

    Is the Deed of Trust (or mortgage) a forgery? Was it void at inception?

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes only. This represents my opinions only.

    Dan Edstrom

  26. Once again, here is what I have found to be a very effective debt validation letter–I make no claims for it other than it has worked for me:

    Non-Negotiable, Non-Transferable

    (Insert Collector’s Name Here)

    Applicable to All Successors and/or Assigns
    Notice to the agent is notice to the principal and notice to the principal is notice to the agent

    Date: Monday, January 1, 2010

    From: (Insert Your Name Here)

    To: (Insert Collector’s Name)
    P.O. Box XXXX
    City, ST ZIP

    Re: In the matter of: Debt collection letter dated 12/25/2009; INSERT NAME OF CREDITOR, (“alleged creditor”);

    Sent by: U.S. Postal Service REGISTERED MAIL

    To Whom It May Concern,

    Please take notice as follows:

    1. Authority: That this Notice of Dispute of Alleged Debt (“Notice of Dispute”) is sent to you pursuant to Title 15, United States Code Annotated (“U.S.C.A”) § 1692 et seq, known as the Fair Debt Collection Practices Act (“FDCPA”), the legislative purpose of which is to protect consumers from abusive, deceptive, and unfair debt collection practices by debt collectors;

    2. Your debt collection letter: That I have received and read your debt collection letter referenced above, identifying yourself as debt collectors,(Exhibit A; copy of debt collection letter), wherein you allege that I have a debt obligation to the alleged creditor referenced above;

    3. Purpose of this notice: That the purpose of this Notice of Dispute is to assert my rights in debt collection under FDCPA § 1692(g)(b) without delay and within thirty (30) days of my receipt of your aforesaid debt collection letter;

    4. Alleged debt disputed: That I hereby dispute the validity of the alleged debt in its entirety;

    5. Verified documentary evidence requested: That I hereby request you provide me with the following verified (sworn to by affidavit) documentary evidence in substantiation of the alleged debt claimed by the alleged creditor referenced in your debt collection letter (see Exhibit A);

    (a) Proof of authority: Please provide me with verified (sworn to by affidavit) proof of your authority to represent the alleged creditor in this instant matter;

    (b) Real party in interest: Please verify who the real party in interest is in this debt collection matter;

    (c) Alleged original creditor. Please provide me with the name and address of the alleged original creditor if different from the alleged creditor identified in your above mentioned debt collection letter.

    (d) Alleged original agreement: Please provide me with a verified (sworn to by affidavit) copy, both front and back, of the alleged original agreement and any other alleged original security instruments in their entirety, including the allonge , affixed to the original alleged agreement for endorsements. Said affidavit is to be sworn to be true, correct, complete, and not misleading, by a properly identified and authorized officer of the alleged creditor, who states that he or she has personal knowledge (Federal Rules of Evidence [“FRE”] Rule 602) of the validity of said alleged original document(s).

    (i) Inspection of document(s). Please provide me with the date, time, and place convenient to (CITY, STATE), that I can personally inspect the above alleged original agreement and any other alleged original security instruments in their entirety relevant to the above alleged debt.

    (ii) Custodian of document(s). Please provide me with the name, title, and address of the natural person custodian of the alleged original agreement and of any other alleged original security instruments.

    (iii) Address of physical location of document(s). Please provide me with the address of the physical location of the alleged original agreement and any other alleged original security instruments if different from “(ii)” above.

    (e) Holder in due course. Please provide me with verified (sworn to by affidavit) evidence that the alleged creditor is the secured party in the instant matter, i.e., holder in due course, and has a perfected security interest in the aforesaid alleged agreement and alleged debt;

    (f) Proof of Value Given: Please provide me with verified (sworn to by affidavit) copies, both front and back, of all documents and records with respect to the aforesaid alleged agreement and alleged debt from the beginning, including but not limited to, any and all lender issued cancelled certified checks, cashiers’ checks, money equivalents or similar instruments, identified as or evidencing assets provided by the alleged creditor and/or the alleged original creditor to me and indorsed by me;

    (g) Deposit slip and cancelled check: Please provide me with a verified (sworn to by affidavit) copy of the deposit slip for the deposit of my alleged agreement in its entirety by the alleged creditor associated with the above alleged account/file number, and a verified copy of the cancelled check issued by the alleged creditor as payor in payment for my alleged agreement in its entirety and any other alleged related security instruments;

    (h) Affidavit of debt & damages: Please provide me with an affidavit of debt and damages incurred, sworn to be true, correct, complete, and not misleading, by a properly identified and authorized officer of the alleged creditor, hereinafter “affiant,” upon his or her personal knowledge (FRE Rule 602) stating:

    (i) that the alleged creditor is, indeed, the secured party and holder in due course of the aforesaid alleged original agreement in issue and has an enforceable perfected security interest therein pursuant to and in compliance with the Uniform Commercial Code (“U.C.C.”) Section 9-203, Section 9-204(1), and Section 9-305, or equivalent sections of the Commercial Code of (INSERT YOUR STATE HERE);

    (ii) that the alleged creditor provided consideration to me, the alleged debtor, from the assets they had on hand before the alleged credit was made, and incurred a financial loss under the full and complete alleged original agreement and alleged debt, and state each and every loss that the alleged creditor has incurred to date under the alleged debt in issue; and

    (iii) that affiant has personal knowledge (FRE Rule 602) regarding the facts of the alleged debt and is the original custodian of the books of entry, or directly supervises said original custodian of the records.

    (i) Bookkeeping journal / account ledger entries: Please provide me with a verified (sworn to by affidavit) copy of the complete set of original bookkeeping journal / account ledger entries associated with my alleged agreement and alleged file/account number using Generally Accepted Accounting Principles per 12 U.S.C. § 1831n, showing all debits and credits and identifying the source(s) and amount of the credit funds/assets; Note: The verifying affidavit of journal / account ledger bookkeeping entries is to be completed by the original custodian of the books and records, sworn to be true, correct, complete, and not misleading. Further, said affidavit shall contain positive identification of the custodian, and state that he or she has personal knowledge (FRE Rule 602) of said entries.

    (k) Assignment contract: If applicable, please provide me with verified (sworn to by affidavit) proof of an assignment contract in its entirety of the alleged original agreement and the alleged debt in issue from an alleged original creditor, as assignor, to the alleged creditor, as assignee.
    (l) Proof of authority: Please provide me with a verified (sworn to by affidavit) copy of the contract your firm has with the alleged original creditor which authorizes your firm to engage in collection activities on their behalf against the above alleged account, and naming you as an authorized collection agent / claims adjuster.

    (m) Certification of authority: Please provide me with a verified (sworn to by affidavit) certificate of authority from the State of XXXXXXXX authorizing your company to transact business in the state of XXXXXXXXXXX and a photocopy of your State Department of Commerce and Insurance certificate.

    (n) Form 1035: Please provide me with Department of the Treasury Form 1035 Custodian of Documents attached or associated with my alleged original agreement and /or the name and address of said custodian per “(b)(ii)” above;

    (o) Form 1099: Please provide me with Department of the Treasury Form 1099 Original Issue Discount for each year the alleged creditor was holder in possession of the alleged original agreement;

    (p) Vendor sales slips/vouchers: Please provide me with verified (sworn to by affidavit) copies of all original sales slips/vouchers from all alleged vendors covering all alleged transactions in the above referenced file/account from its inception to date.

    Note: This Notice of Dispute is not a request for confirmation that you have mere photocopies of alleged documents. I am requesting ONLY VERIFIED DOCUMENTARY EVIDENCE in validation of the alleged debt pursuant to the FDCPA.

    6. Warning: That all your communications and omissions will be made a part of and incorporated into any litigation arising from this matter.

    7. Time is of the essence; reply deadline: That time is of the essence, therefore, I extend to you, RightWay, thirty (30) days from the date of your receipt of this Notice of Dispute to perform in compliance with verifying the alleged debt as requested above per FDCPA mandates. I will consider a reasonable extension of time–only for the production of verified documents–should you need more than the thirty (30) days if you request it in writing to the address below. Your failure to perform as herein requested will show bad faith and will establish the fact that you are using abusive, deceptive, false, and unfair collection tactics against me as a consumer. Furthermore, if you remain silent to this request or are unable to verify the debt as above, the legal concepts of estoppel by acquiescence and tacit admission will come into play whereby the alleged debt will be admitted invalid, a nullity, and unenforceable, and thereby repudiated in its entirety ab initio . In the interim, you are prohibited from any contact with me, the undersigned, except in writing, and only in regards to the matters herein expressed. All debt collection activity– including litigation– is to cease per FDCPA § 1692g(b) “… the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt…”

    8. Mandatory reply to undersigned: That all of the above demanded verified evidence, sworn to by a competent witness per FRE Rule 602, should be sent to me, (INSERT YOUR NAME), the undersigned, as indicated at the address below within the above-mentioned thirty (30) days from your receipt of this Notice of Dispute. Please do not send any reply correspondence to me at any other mail location except as follows:

    Send to: YOUR NAME
    CITY, ST xxxxx

    9. Exhibits: All exhibits attached to this Notice of Dispute are incorporated by reference herein.

    Signed with reservation of all rights,

    By: ________________________________________


    Enclosures: Exhibit A – Copy of 12/25/2009 debt collection letter

  27. Fom Wikipedia:

    The FDCPA does not define what constitutes proper debt validation, and the issue has not been fully resolved by the courts. In the leading case of Chaudhry v. Gallerizzo, the Fourth Circuit Court of Appeals adopted a relatively low standard: “Verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt.”[3] The Court further stated that a request for validation of the debt is primarily intended to eliminate such problems as collectors contacting the wrong person or attempting to collect debts which have already been paid.[3] In 2006, the Ninth Circuit Court of Appeals followed and adopted what they described as the “reasonable standard” articulated in Chaudhry.[4]

    Consumer advocates have criticized the Chaudhry and Clark cases as setting too low a legal standard for validation and allowing debt collectors to justify providing little information in response to a dispute.[5] In addition, some courts (such as the Court of Appeals of Indiana[6]) have taken a stricter stance on debt validation than the Chuadhry Court, though the precedential value of such cases is uncertain.

    Thus, what exactly constitutes proper validation of a debt is not a settled issue and is likely to depend on the specific nature of the dispute. At a minimum, the debt collector is required to confirm with the creditor the amount being claimed is correct and that the person from whom they are attempting to collect the debt is the person who owes it.

  28. The dispute in Chaudhry had nothing to do with the debt- it was primarily for the additional attorney’s fees..

    The statement above:
    “Contrary to Appellants’ contention, verification of a
    debt involves nothing more than the debt collector
    confirming in writing that the amount being demanded is
    what the creditor is claiming is owed; the debt
    collector is not required to keep detailed files of the
    alleged debt. . . . Consistent with the legislative
    history, verification is only intended to “eliminate
    the . . . problem of debt collectors dunning the wrong
    person or attempting to collect debts which the
    consumer has already paid. . . .” There is no
    concomitant obligation to forward copies of bills or
    other detailed evidence of the debt.”

    Is taken out of context and is typically misused by collectors to scare off the unknowing..

    When Chaudhry is brought up – Simply reply with Spears v Brennan

    In Spears v. Brennan, Brennan claims that a copy of the consumer credit contract between Spears and Am. General Finance, attached to the notice of claim provided sufficient verification of the debt within the meaning of 15 U.S.C. § 1692g(B).

    We cannot agree.
    The contract in no way provides sufficient verification of the debt. A review of the document reveals that it identifies only the terms of Spears’ loan, including a 17.99% annual interest rate and the original loan amount of $2,561.59. The loan agreement contains no accounting of any payments made by Spears, the dates on which those payments were made, the interest which had accrued, or any late fees which had been assessed once Spears stopped making the required payments.

    As you can clearly see – that decision (Newer and in context) would negate the “Chaudhry” argument.

    Additionally there are several FTC opinion letters detailing additional requirments beyond standard printouts from collectors.

  29. ver·i·fi·ca·tion (vr-f-kshn) n.

    1. The act of verifying or the state of being verified.

    2. a. A confirmation of truth or authority.
    b. The evidence for such a confirmation.
    c. A formal assertion of validity.

    3. Law An affidavit that attests to the truth of a pleading.

  30. Read the case cited.

    You don’t think the law was REALLY written for the consumer, do you?

  31. Storm,

    …and what does the debt collector provide if that “verified” amount is incorrect and disputed?

  32. You state:

    “Verification REQUIRES that the collector actually inquire from the principal, disclose the principal and provide a signed, SWORN STATEMENT THAT THE INFORMATION IS TRUE, providing the details of what was done, who they spoke with, where the files are and how anyone knows the answers.”

    NOWHERE does the statute REQUIRE a SWORN STATEMENT by the debt collector!

    You also state:

    “Lawyers Beware: A FIRM GRASP OF THE LAWS and rules of evidence and the objections that go with that knowledge is the key to winning these cases.”

    Poster Beware: You really should practice what you preach and get “A FIRM GRASP OF THE LAWS” before you post!

    “Contrary to Appellants’ contention, verification of a
    debt involves nothing more than the debt collector
    confirming in writing that the amount being demanded is
    what the creditor is claiming is owed; the debt
    collector is not required to keep detailed files of the
    alleged debt. . . . Consistent with the legislative
    history, verification is only intended to “eliminate
    the . . . problem of debt collectors dunning the wrong
    person or attempting to collect debts which the
    consumer has already paid. . . .” There is no
    concomitant obligation to forward copies of bills or
    other detailed evidence of the debt.”

    Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999).

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