Lehman Execs and Auditors Face Civil and Criminal Inquiries and Lawsuits

This is pretty aggressive and pretty abusive. I don’t know how under GAAP this follows the rules whatsoever,” he said, referring to Generally Accepted Accounting Principles.“That reeks of an auditor who, rather than being really truly independent, is beholden to management,” he said, adding that the S.E.C. and the Justice Department should follow up on Mr. Valukas’s findings.

Executives at other Wall Street banks professed surprise at Lehman’s accounting maneuvers. Goldman Sachs, Barclays Capital and other banks said on Friday they did not use repos to hide liabilities on their balance sheets.

EDITOR’S NOTE: Surprised? Other than the people who thought they would not get caught, who is surprised by the fact that upon close scrutiny Lehman’s books were cooked and Ernst and Young “auditors” went along with it? Ask any “Joe” or “Jane” in the street if they are surprised.

So a few scapegoats are going to jail in the usual perp walk while most of the “masterminds” walk away with taxpayer money jingling in their pocket, with homeowners being bounced from their homes, with the economy in a death spin, and while their wallets bursting with cash, are replaced with more wallets in more places with more pockets.

Let’s put it very simply: If the experts are surprised they are not experts. Or, if they are experts, they are co-conspirators. To paraphrase Brad in the survey workshops they were either stupid or just plain lying.

But I didn’t post this because I am angry and outraged over the behavior of Wall Street, regulators, congress and the Obama administration. The reason I write this is to highlight the fact that persistence pays off. What was unthinkable, crazy, conspiratorial 3 years ago when i first started writing on this subject is now being accepted as axiomatically true.

If you persist in challenging the pretender lenders and demanding that the real creditor step forward, if you persist in getting a full accounting from the creditor (investor) down to the the debtor (borrower, homeowner), then you will magnify your chances of prevailing against a fraudulent foreclosure. Nearly all of the foreclosures during the past 3 years were fraudulent. Millions of people are thinking of their old homestead while they probably still own it, even though they left or were evicted.

Get your facts together, get that forensic analysis, get an expert to declare the truth, and get a lawyer who either understands securitized mortgage loans or is willing to learn. And don’t stop, don’t give and don’t leave until the last option of the last move has been played — because it is only THEN that the other side will cave in and offer you a reasonable settlement. And even then you still need to go to court with a quiet title action because the people offering you the deal are NOT your creditor and don’t know the name(s) of your creditor much less represent them.

March 12, 2010

Findings on Lehman Take Even Experts by Surprise

By MICHAEL J. de la MERCED

For the year that it took the court-appointed examiner to complete his report on the demise of Lehman Brothers, officials from Wall Street to Washington were anticipating it as the definitive account of the largest bankruptcy in American history.

And the report did just that when it was unveiled on Thursday, riveting readers with the exhaustive detail contained in its nine volumes and 2,200 pages. Yet almost immediately, it raised a host of new questions.

Now government regulators have what some lawyers call a road map for further inquiry into former Lehman executives like Richard S. Fuld Jr. and the auditing firm Ernst & Young.

Whether the Justice Department and the Securities and Exchange Commission will actually pursue their own legal actions is unclear. But legal experts said on Friday that the examiner, Anton R. Valukas, had provided plenty of material for civil regulatory action at the least with his findings of “materially misleading” accounting and “actionable balance sheet manipulation.”

“It’s certainly not helpful to any of them,” Michael J. Missal, a partner at the law firm K&L Gates and the examiner in the bankruptcy case of New Century Financial, said of some individuals accused of impropriety in the report. “It certainly assists private litigants and probably increases the pressure on the government to take some kind of action here.”

Representatives for the S.E.C. and the United States attorneys offices in Manhattan and Brooklyn declined to comment.

While Mr. Fuld and other former top Lehman officials are already defendants in a number of civil lawsuits, the new discoveries by Mr. Valukas have taken even veteran observers by surprise. Chief among these was the revelation of a particularly aggressive accounting practice, known internally as Repo 105, that Mr. Valukas said helped the investment bank mask the true depths of its financial woes.

Examiners in bankruptcy cases are appointed by the Justice Department to investigate accusations of wrongdoing or misconduct. Their job is to determine whether creditors can recover more money in these cases, and their findings often serve as guides for more lawsuits and even regulatory action.

What examiners are not asked to do is play judge and jury. Though the report contains strong language — Mr. Valukas deems Mr. Fuld “at least grossly negligent” in his role overseeing Lehman — it stops short of accusing anyone of criminal conduct or of violating securities law.

Patricia Hynes, a lawyer for Mr. Fuld, said on Thursday that her client “did not know what those transactions were — he didn’t structure or negotiate them, nor was he aware of their accounting treatment.” She did not return an e-mail seeking additional comment on Friday.

Mr. Valukas’s findings have stirred loud discussion among legal and accounting experts over the ways Lehman sought to improve its quarterly results months before it collapsed.

Over hundreds of pages, Mr. Valukas details the genesis of and the process behind Repo 105. Based on standard repurchase agreements — short-term loans commonly used by many firms for daily financing needs, in which borrowers temporarily exchange assets in return for cash up front — Lehman took a particularly aggressive accounting approach to these transactions.

Here, the investment bank used repos to temporarily park assets off its books to make its end-of-quarter debt levels look better than they did — while calling them sales instead of loans.

The accounting tactic, first used by Lehman in 2001, had one catch, according to Mr. Valukas: no American law firm would sign off on its use.

Enter Linklaters, a highly respected British law firm that gave Lehman the answer it wanted. So long as the repos were conducted in London through the bank’s European arm, and so long as the company took other cosmetic steps to make these transactions appear to be sales instead of financings, Linklaters determined that they would pass regulatory muster.

A spokeswoman for Linklaters said on Friday that the firm was not contacted by Mr. Valukas and that its legal opinions were not criticized in the examiner’s report as wrong or improper.

Lehman also had the backing of Ernst & Young, which certified the bank’s financial statements despite receiving warnings from a whistle-blower who said there were accounting improprieties. An Ernst & Young spokesman said on Thursday that the firm stood by its work for 2007, the last year it conducted an audit of Lehman’s financial results.

But Lynn E. Turner, a former chief accountant for the S.E.C., accused Ernst & Young of abdicating its responsibility to the audit committee of Lehman’s board by not presenting the concerns.

“This is pretty aggressive and pretty abusive. I don’t know how under GAAP this follows the rules whatsoever,” he said, referring to Generally Accepted Accounting Principles.

“That reeks of an auditor who, rather than being really truly independent, is beholden to management,” he said, adding that the S.E.C. and the Justice Department should follow up on Mr. Valukas’s findings.

Executives at other Wall Street banks professed surprise at Lehman’s accounting maneuvers. Goldman Sachs, Barclays Capital and other banks said on Friday they did not use repos to hide liabilities on their balance sheets.

23 Responses

  1. to “Confused” :

    An Allonge that is not affixed even by a staple but instead has a two-hole punch in the top (and presumably is or was attached to the note and the rest of their internal file with a Pendaflex metal strap) is INVALID. An Allonge MUST be “affixed” to the Note. In NY and either NC or SC (cannot remember which ) the allonge must be “firmly affixed.” What you have is not affixed at all. that makes it invalid. And that is before you get to the idea of using the blank spaces on the NO-Space Test.

    There is a whole bunch of stuff that the allonge must have. It must recite the original loan number, if there was one. It must recite all the data of the original Note, e.g. name and address of Maker (the borrower), amounts and terms, maturity date, and so forth. The signature dos not need to be notarised, as long as the signer of the allonge is an Officer of the vendor, e.g. Vice President.

    What happens in the field is that the buyer goes and signs the allonge on behalf of the seller, presumably on the bsis of a power of attorney. but the POA is not attached (firmly affixed) to the allonge. So there is no document in the allonge to authenticate the signature. that makes it invalid (or it should; you are always up against some Judge who does not “get it”).

    Also you will see allonges signed by the seller, but not an Officer, instead by a “document control officer” which is a mere employee. Again an authenticated original (not photocopy) power of attorney has to be attached directly to the allonge. they never are, so again the allonge is invalid.

    Hope this helps your understanding a bit.

  2. to Ian:

    Remember this: the people you are dealing with on the other end are scum. they have absolutely no compunction about committing fraud, fraud on you, and fraud upon the Court. these are people that are utterly conscienceless. Do you seriously think that Bernie Madoff had any moral conscience? Stealing comes naturally to these people: for them, stealing and fraud is as natural as drinking a beer is to you.

    Take noting at face value. Assume from the get-go that everything you see is fraudulently cooked up after the fact to try to make it conform to whatever the Judge wants. Here is your advantage: they are so arrogant in their behavior that you will be able to trap them. Then you sue the shirt off them for their frauds.

    Eventually, it will start to sink in what utter pond-scum you are dealing with.

  3. to Ian:

    The documents you refer to are not kept in the Court House, unless of course you are in a lawsuit and then all the documents are kept together in a case file folder, called “the docket file.”

    the documents you are thinking of are those filed in the County (or town) Land title records. typically this is at the Clerk’s Office, where they keep all land title records. there you will find a trail of documents from the first sale by the builder to the first home purchaser, and then on to all the others, and then also all the various mortgages, tax liens, and whatever all filed there. You can purchase a “certified copy” of any document, typically for the cost of the copy plus a small fee of about $1 a page. A “certified” copy of a document is “self-authenticating,” so it can be used as a Court Exhibit without requiring proof of its authenticity – e.g. you do not need to subpoena the Clerk of the Records Office to establish the authenticity; it is established by the certification stamp and signature.

    Some stuff that you need, like proff of power of attorney for a signature, known typically as “attorney-in-fact” authority, “should” be filed with and adjacent to the document on which the signature appears, in the Land records. But these clowns never do that. So, one argument is that the transfer of the mortgage is invalid, because the authority is not recorded.

    The counter to this is that the transfer is valid IF the clowns can support it in Court with more documents, so if the Judge lets them (and they may well) then the clowns just go fabricate the document. Look for Notary stamps that are not dated in correspondence with the signature. I once had a notary stamp on a documetn of August 2001 alleging a notarization when the “notary” got his first commission in march 2003!!! You get this crap all the time; the scum is utterly shameless in forging these documents, as they know perfectly well that without the documents their ability to foreclose evaporates (and they can be sued by you). You can find out when a Notary got the commission, and the length of the commission, by asking at the Notaries Section of the Secretary of State. For a small fee, about $10., they will send you a “certified” declaration of the notary commission, so you can toss that in the Judges mug.

    Makes for interesting fireworks.

  4. to “Confused”:

    As to the Florida Judge who said it was ok to remove staples and re-staple: why can they not photocopy with the corner turned back?

    Respond with: an Allonge comes from the French word: “to lengthen.” It also has to be “firmly affixed” according to the UCC Sec 302(2) [note: in some States this restrictive wording has been changed to a less-restrictive “fixed”, nno longer “firmly”. What is “fixed” or not is not further defined in the UCC]. Point out the “law merchant” stuff.

    Your Florida Judge just does not “get it.” He has no clue that the idea of an allonge being firmly affixed is to preclude the possibility that someone screws around later, removing pages and substituting pages. You do get this absurdity from some low-quality State Court judges. Nothing surprises me coming out of the Deep South; I have seen some really lousy decisions. Again, the Judge is the Lord of his little feudal manor, so it goes in his Court. If you don’t like it, you file into the appellate court. And so on.

    Since there is room after the signature and on the back page, there is zero basis for using an Allonge in the first place. It should be declared Invalid as a matter of law.

    As to the original Note in the Court House: your own signature should also be on it. Is it yours? When you signed your Note, did you sign a duplicate “for record keeping”? If they had you do that, then they have committed commercial fraud, if it went over State Lines then it is fraud in interstate commerce, and also unfair trade practices according to your State UTPA laws.

    If your signature was “copied” by a pantagraph machine, then you can crucify them. But who knows: maybe some dumb lawyer actually filed the Original Note. Amazing.

  5. Jan vna Eck,

    Thank you. You have confirmed that I am on the right track. I love the brass rivet idea. In my case, the originating entity closed their doors in 2007, so I guess there really is no one to enforce the note.

    I have 2 cases in Florida that specifically address the late fees payment clause. I have located about 6 others in other states.

    As for the original note having been filed in court – I was surprised when I saw it. I went to the courthouse with the expectation that it would be a scanned and printed copy, but the lettering is raised and the signatures have ridges. If it’s a copy, they have figured out a new way to make it look like the original.

    With regard to the allonge, it is actually not “attached” but it is two hole punched behind the note. There is one staple that has been removed at the top. I ran across a Florida case where the judge dismissed the multiple staple argument stating that “removing staples to make copies and then re-stapling” does not make the allonge invalid. Matt Weidner has posted an excellent argument on allonges. He says it’s a work in progress and is inviting comments.

    In my favor with regard to the allonge is that there is plenty of room after my signature for an indorsement, the allonge is not dated, and it’s not notarized.

  6. to Ian: I will try to get back to you on your inquiry tomorrow morning. jan

  7. to Susan Leavy:

    “Quiet title” does not vary from State to State.

    A suit in Quiet Title is asking the Court to declare that the Title is only to you, with no encumbrances. Such a suit can be used to remove a lien, a judgment, or a mortgage, dependent on the circumstances.

    The onus, or “burden” in court-speak, is on the party bringing the suit to demonstrate to the Court that it is a proper remedy.

  8. The reason they use the blue ribbon through the rivet and the sealing wax is so that it is “firmly affixed.” And if somebody tries to screw around, it is obvious.

    For you, the obvious part is where you see multiple staple holes. that tells you and the Court that the papers have been screwed around with – rendering the Allonge invalid.

  9. to all readers:

    If the Court asks you how you would properly affix an Allonge to a Note, you answer that the proper way is to use a small brass rivet.

    They have these little rivet presses available at some office-supply stores (if not, try a hobby-craft store). the press looks like a big stapler. Practice a bit, take it to Court with you, and when the Judge asks, pull it out of your briefcase and just do a demonstration! Blows your opponents away, totally.

    In the “old days” of the law-merchant, if a glue was not used, then the Allonge would be fastened by a brass rivet, and then a blue ribbon was passed through the rivet hole, the back end then brought around to the front, and the two ends placed over each other, hot sealing wax blobbed on the ends, and the “King’s Ring” was pressed down into the wax. Describe this to the Judge if you want to look really erudite (and by implication, make the opponent lawyers look like dolts).

    They still do it that way with some very official documents in Europe, like Patents. Amazing.

  10. to Deontos:

    You are perfectly correct in the cite of Pribus. When going into court, do not rely only on the one cite. There are a number of nice cases that parallel Pribus; toss them all in.

    The most common offense that you trap these clowns with is in their taking apart and re-stapling the Allonges. Remember: an “allonge” is from the French for “to lengthen.” It stems from the old “law merchant” of hundreds of years ago, where merchants simply lengthened Notes by gluing the paper onto the end of the last sheet, to get more room for Indorsements. Today the clowns are too lazy for that; they use a separate sheet, do not reference the Note (by recording the original loan number on the top of the Allonge) and then just staple it on. If the staples were removed and re-stapled (and they all are, because these greedy bastards are so arrogant they are habitually sloppy), then the stapling is no longer “firmly affixed” and you argue to the Judge that an Allonge has to be “firmly affixed” according to the old law-merchant. At that point the Allonge becomes invalid (or at least, should be, if the Judge is on his toes).

    If the Allonge is invalid, then the plaintiff has no authority to enforce the Note. the plaintiff probably has “possession of the Note,” but is not a Holder of the Note. bye-bye plaintiff.

    Of course, you can always send payments to the plaintiff as the possessor of the Instrument if you are feeling generous. Hey, it’s always Christmas in March, especially on the 17th if you’re Irish….

  11. to “Confused” :

    Since your Note cannot be interpreted without the “other document,” the Mortgage security instrument, your Note is Non-Negotiable.

    That has certain implications: it can ONLY be “enforced” by the party to whom it is made out to. So it can be sold, or gifted, or transferred, but then it cannot be “enforced;” e.g. if you make payments out to the new owner, that’s fine, but the new owner is not the Holder because he does not have the authority to enforce the Note. Only the original party does.

    You get into an interesting situation if a non-negotiable Note is sold anyway. As I see it (and this is just my opinion, not case-law by any stretch), the new owner is an “owner,” and can and will accept your voluntary payments, but the new owner cannot enforce by suing you, nor could the new owner oblige you to pay late fees, nor could the new owner place insurance on your property, or do inspections, or much else. All he is, is an Owner. An Owner is not necessarily a Holder (although most Judges do not grasp this – and essentially all lawyers have no clue as to the distinction, a sad commentary on legal professionalism).

    Now here is where it gets cute: since the original party has sold or otherwise transferred his ownership interest, notwithstanding that the Note is non-negotiable (after all, you can sell something even if it is non-negotiable; people sell cars all the time without being able to transfer the warranty). then the New Owner is not a Holder, BUT NEITHER IS THE OLD OWNER. Why? Because while he retains the authority to enforce (since the note is non-negotiable, the rights to the note remain with him), BUT he cannot enforce since he is no longer in possession of the Note! remember, a Holder is a person in possession of the Note AND has the right to enforce the Note. By selling or transferring the Non-negotiable Note, neither party to that transaction eds up as a Holder.

    But now you have to convince a Judge of this. And that is a toughie. Here’s why: the “law” is not what the Statute says, it is not what a few hundred years of case-law says, it is not what the Supreme Court says, it is what your judge in that Courtroom says it is. The Court is the last bastion of medieval feudalism. And the Judge is the “Lord of the Manor.” So remember, you have to convince the Judge.

    You may be perfectly right, and typically are, but the Judge may not agree. Of course, you can then appeal to the next court up. Appeals of the Law typically result in “review de novo,” where the appellate body reviews the case as new.

    there is great case-law on Notes with mortgages that require late fees being declared non-negotiable. Also on the issue of requiring reference to another Document in order to fully complete the terms of the Note. Poke around Neil Garfield’s various posts; he has some up here on the board.

    The other thing is this: nobody ever files the Original Note with the Curt. All they file is a Copy. Sometimes a “certified copy.” Original? Never heard of that happening.

    You say the Allonge is “attached” to the back. that seems to state that the Allonge is on a separate piece of paper, stapled onto the last page. Is there blank space on the last page of the Note, below your signature line? Is the back of the last page of the Note itself also blank? then the Allonge should have been placed there, not on a separate sheet of paper, and the Allonge is invalid. So then the last Owner of the Note is the last party with Indorsement on the Note over to him. Not the further Indorsement on the Allonge.

    And, once again, if the last “owner” of the Note is on that Indorsement, and he is the last person entitled to enforce, he is not able to do so, as he has Sold the Note! So once again you end up with a proper party, the last Indorsed party, not being a Holder. So nobody has the authority to enforce.

    That does not mean that you get the house for free. It does mean that you “might” be able to get a Quiet Title action on the basis that there is no longer a Holder of the Note (but again, you have to get it by the Judge, and that is always a toughie). What you end up with is a Note “separated” from the mortgage, so the mortgage becomes a nullity (again, you have to convince the Judge). If the last person on the Allonge sells it back to the last Indorsed party, then it gets back into the hands of an Owner with authority to enforce, and he can sue on the Note. But he may not be able to foreclose (a theoretical argument, as I know of no case law on that set of events).

    And therein lies the crux of the problem: these manipulations were never foreseen years ago, it is all the result of sleight of hand on Wall Street, and the Courts are years behind the learning curve.

    the trustee for the “pass-through trust” is NOT a trustee, he is merely an elaborate agent, and as that “pseudo-Trustee” he has no Standing to institute suit as he is not the real party in interest. the people on the other end of the pass-through trust are the Owners, and are the party in interest. However, since those people are not in possession of the Note, they have no authority to enforce the Note, anyway not by foreclosing the Security Instrument (which sits somewhere else, not with them – and you establish that because the names of the owners of the pass-through trust are not recorded on the land title records). The share owners might be able to sue you on a collective basis with a common attorney, but not the “trustee” – he is a trustee of nothing, as there is no real Trust. Not in the legal sense, anyway (a Trust requires a trustor, a beneficiary, a trustee, and actual assets placed in the trust by the trustor for the benefit of the beneficiaries. And that is bedrock law). (See Neil’s posts).

    Does this help a bit? Sorry to be late in replying, my message board got overloaded.

  12. “Confused”,

    Examine that allonge CLOSELY. Make sure it is done properly to the last DETAIL. See my prior post about allonges. If you haven’t, consider reviewing the case Pribus v Bush. 40% or more of the time they screw up the allonge and if precedent from ‘Pribus can apply then CASE DISMISSED.

    I am not “The Man”, but Jan van Eck sure the heck is the latest “man of the hour” here! I hope he answers you, I will anxiously await his insights.

  13. Jan Van Eck,

    In my case the note filed with the court is the original. I spent over an hour in the courthouse yesterday reviewing and re-reviewing. There is an allonge attached to the back signed by the VP of the pretender lender. US Bank, as trustee for some pass-through trust is the foreclosing entity. btw, I am in a judicial state.

    They have a great bearer paper argument. I found some great case law re negotiable v. non-negotiable paper. I believe the note is non-negotiable because there is a condition to pay late fees as a percentage of the monthly payment. Additionally, although it references the mortgage (which does not make it non-negotiable), it also conditions the note based on the mortgage. The actual language is “That Security Instrument describes how and under what conditions I may be required to make immediate payment in full of all amounts I owe under this Note. Some of those conditions are described as follows…” It then quotes one of the provisions from the mortgage regarding “Transfer of Property or a Beneficial Interest in Borrower.”

    My argument has to do with the verbiage “some of those conditions.” I believe that by using this verbiage you have to look at both the note and the mortgage together in order to fully understand all the conditions, thereby rendering the note non-negotiable.

    If the note is non-negotiable, then the federal HDC rule goes out the window.

    What are your comments on this?

  14. Jan van Eck- great info on endorsement/indorsement legal requirements and present accepted fraud. Keep it coming. What are the various courthouse depts where each document, power of atty, trustee substitution, deed/mortgage etc are to be recorded? What else does one look for?

  15. to Stanley Putra:

    “tue copy” should read “true copy”.

  16. “And don’t stop, don’t give and don’t leave until the last option of the last move has been played — because it is only THEN that the other side will cave in and offer you a reasonable settlement. And even then you still need to go to court with a quiet title action because the people offering you the deal are NOT your creditor and don’t know the name(s) of your creditor much less represent them. ”

    Excuse me? Why would anyone accept a settlement offer from parties who don’t own it and lack standing?

    Why not just quiet title from the start? Why would you accept a settlement and then do a quiet title?

  17. To Stanley Putra:

    YOur Post is a bit confusing. reading a bit between the lines, it looks like someone [apparently the trustee, US Bank NA] is suing you in foreclosure [judicial? non-judicial?] [looks like a judicial foreclosure] claiming that you are the Obligor on a Note, tht the trustee is the Holder of the Note and is entitled to enforce the Note due to a series of transfers of the Note, and that there are no controversies of fact or of law (the standard for summary judgment) to the plaintiff trustee proceeding to Judgment. Does that sum it up?

    In a summary judgment Motion placed before the COurt, all you have to do is demonstrate, typically by Affidavit but also alternatively or in addition by documents (preferably certified documents, so they are self-authenticating) that could dispute some portion of what the other guy is saying.

    In your case, the obvious place to attack Summary Judgment (“SJ”) is in the Indorsements of the Note. To do a SJ, they have had to place what they call a “tue copy” of the Note into evidence, typically as an exhibit to an Affidavit. Look closely at the Note. Was the Note introduced at any other stage in the proceedings? (Probably not, I suspect in your case, although it happens). then compare the two copies. You will find difference (you always do, because these clowns monkey with the Note). v Then you attack on that ground.

    If this is the “first time” you have seen the Note, then look over the Note for the Indorsements. remember the Rule about the “No-Space test,” where the blank space on the last page of the Note, below your signature line, has to be all used ud, AND the blank space on the “rear” of the last page of the Note has to be all used up, BEFORE there are any “allonges.” I will bet you a cheeseburger that in your case the clowns simply manufactured “allonges” and stapled them onto the back page of the Note and did not use up the blank space. SO: you now have grounds to challenge the Indorsement chain, and thus the standing of the trustee to enforce the Note, on the grounds that the allonges and their Indorsements are invalid pursuant to UCC Sec 302(2).

    And that will drive the Court nuts, and the other side bananas.

    At the least, it should be enough to defeat their Motion for SJ.

    Now look carefully at the signatures on the various transfers. They have to be done by a person with proper authority. Typically you will see some garbage about “by the document control officer pursuenat to a power of attorney” or similar crap. When you see that, you attack on the basis of absence of authority. the “control officer” is not an “Officer of the Corporation,” such as a vice president. He cannot go signing anything, without authority. If the power of attorney document is not incorporated into the Allonge (and they never are) then there is no custodial chain of authority in the Note Indenture, and the allonge is iinvalid, and the Indorsement is invalid. And that is grounds against eh SJ Motion.

    It looks like they keep changing the players. If your Notice of Default” was issued by one party, then were you actually sued by that party? If the suit is in judicial court then they ahve to file for substitution of party plaintiff upon assignment, and the COurt has to agree, and the assignment has to meet all the tests as to Indorsement and so forth as above.

    Also you have the issue of the separation of the Note and the Mortgage. Since the Note went into some trust deed, show the Court that the mortgage as recorded on the land records does not reflect the owners of the trust deed shares. It probably gets you no traction, but is always cute. More important, get a copy of the deed of trust and the Indenture document.

    More trenchant and interesting, that Security Document wil relay a long chain of parties, a Depositor, a Seller, a Servicer, and who knows what else, all of which held even if briefly the Note in order to get the Note into the trust. And, of course, none of these parties are on the Note as Indorsed owners. So you have a break “in the chain of title.” and if you have a break in the chain, then you have a controversy of fact as to who really owns the note, who holds the note, and who has the authority to enforce the Ntoe, and all that will sink a Motion for SJ. Do you have that document? was it disclosed? Was there mention of a Seller to the trust, the Depositor to the trust, and so forth? Or have they carefully hidden this document from view? If they hid it, then you can plead that the document exists and the plaintiff Trustee is not being fair and candid with the Court – and that leaves some small wiggle room to oppose SJ under the doctrine of Clean hands, and under the principles set forth in “Keystone Driller v. General Excavator,” 290 U.S. 240.

    Now you know why foreclosure lawyers utterly hate me.

    What is your deadline?

  18. Who Cares I’m about to the point where the way I see it is the only Justice satisfactory at this point is when the Judges who are judging “the People” shall receive thier Judgement day by “the People” and the Lenders who lend us our own wealth at interest are executed like the Knights Templar.

  19. Hello,
    We are going at it strong since last August in our live foreclosure case whose 1st lien mortgage was sold to Lehman (w/ Aurora Loan master server) the same day the January 2005 liar’s loan closed with straw broker PlainsCapital Bank TX on behalf of MERS. We have asked our lawyer about a quiet title and she gave us an answer with respect to IL law, that quiet title referred to easements and boundary lines or something of that nature. Nothing like what you post here on your blog about going after quiet title as a justifiable remedy that can occur after disclosing the accounting evidence that’s hiding behind the wrapped up securitization beast of our loan. (underwritten with Alt A bond based on falsified income and end of year deal with lehman suggests repo 105 practices) Could you respond a bit about this kind of remedy as it relates to IL law. If applicable how do I get across to her that your notion of quiet title is very different than the one she describes. Or does this term indeed differ so much from state to state? Thanks for your time. Keep cranking out the information it has been an educational roller coaster, one that I’ve become completely absorbed in learning about despite the parameters of my situation.
    Respectfully,
    Susan Leavy

  20. Forgot to say that the Bloomberg host was very worried that second mortgage lenders would only get $3000.00 under Obama’s new short sale bribery plan.

  21. This is outrageous. Anyone to help Stanley??

    Mr. Garfield – the Repos 105 show that much was done to conceal (cook) the books, and HOW are the courts still believing that all is OKAY – that all is on the up and up??

    Agree completely – what the heck is Obama doing? And, as Senator Dodd comes out today with his bill (without support from Republicans) what is happening to Consumer Protection?. There has been no where for the people to go. That is why your blog and “workshops” are critical!

    Heard someone on Bloomberg today promote Obama’s new plan to bribe the people with short sales. The host thought it was a good plan. Incredible. Mr. Obama has failed to be the “peoples'” president.

  22. Help I need to file a summary judgement as my final confirmation hearing for my illegal foreclosure
    has the Plaintiff as:
    US Bank National Association as
    successor Trustee to Bank of America
    National Association as successor by
    merger to LaSalle Bank National Association
    as Trustee for Lehman XS Trust 2007-09
    The loan started with Wells Fargo an assignment to Lasalle Bank and then back to Wells Fargo Home Mortgage and then stopped. The default mortgage was by Lasalle Bank but the assignment was 6 mos later. Auction advertized in paper with Bank of Am added and then the auction with US Bank added. I gave the Sheriff a signed note at the auction that there is a legal challenge to the Foreclosure. At the request of the Plaintiff at the confirmation hearing was adjorned pending a Loan Mod. Any suggestions?
    Stanley Putra
    262 672 2543
    studly26@hotmail.com
    Racine Wi.

  23. Good segment on 60 Minutes last night about the Wall Street fraud regarding all these mortgages, from a former Wall Street insider. You can watch it online here — http://www.cbs.com/primetime/60_minutes/

    Steve
    99Libra@gmail.com

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