Many questions are coming after yesterday’s post. The main point is that there is no paper trail because nobody wanted it. Up at the top of the “securitization chain” fabricated by the securitization documents, nobody was checking loans at the level of actually looking at the loan documents, so they never asked for the loan documents, much less any assignments, indorsements or evidence of delivery or transfer.

With nobody asking — no demand — for the paper trail, there was no reason to produce one. But there is another reason as well. In order to move the “assets” around into mortgage bonds, CDOs composed of mortgage bonds, credit default swaps (the equivalent of buying the bond if you sold a CDS) and synthetic CDOs composed of credit default swaps, total flexibility was needed to make sure that when called upon to do so, they could produce a clear chain of title.

That is why they used MERS as a cover for constant transfers, resales, and multiple sales. You must remember that MERS is neither the business record of any of the players nor public record. It is worthless as evidence since it is a virtually unsecured proprietary database that owns nothing, transfers nothing, never comes into possession of the documents, and never touches the money as a conduit or otherwise.

Thus the Achilles heal of the would-be foreclosers is that no paper trail exists on any loan. By that I mean, nobody, authorized or not, executed any assignments, endorsements, or transmittals for delivery of the loan documents. Nobody.

This is where the sleight of hand occurs. The securitization structure is established by the pooling and servicing agreement and perhaps the assignment and assumption agreement, and maybe even the prospectus to investors. As near as I can tell they never actually issued bonds except at the very beginning, circa the year 2000.

These were all book entries that were the only evidence of the lender receiving a non-certificated bond or ownership interest in the pool that was completely dependent upon the actual receipt of money arising from payments made in connection with mortgage loans. Those payments were from borrowers, insurers, etc.

So the securitization structure was established — but that is like building the outside of a house and never putting anything on the inside. Like a trust can be established, but if it is not funded — i.e., if nothing is actually put into it —- it might exist in the technical sense but the trust doesn’t own anything and therefore the Trustee has no duties to perform, and the “beneficiaries” actually exist but they don’t get anything.

What I am saying is that the mortgage mess is far simpler than what it appears.

The position of the borrower should be that he/she/they did business with XYZ Mortgage Inc. which for all times material to the life of the loan was the only record holder of an interest (as “LENDER”) in the security instrument (mortgage or deed of trust) and the only payee under the terms of the written evidence of the obligation (the note). That interest was never transferred in any manner, shape or form. And like one creative lender lawyer found out recently, courts will NOT recognize anything even smelling like an “equitable transfer.”

So where does that leave us? In the same place with a different focus than what I have been writing about up until now. The real parties are clearly identified at the closing of the loan. Different parties have flooded the room — substitute trustee, Trustee for the Pool, Servicer, Master Servicer, Trusts, Investors, etc.

Just like the era before securitization, a Bank might lend money to a person, then sell the loan to another bank. The new bank and the originating bank would both send the borrower a notice saying the loan had been assigned.

The assignment of the security instrument (mortgage or deed of trust) would be recorded, and the borrower would start making payments to the second Bank. In foreclosure, the second bank would have the loan documents, would have a  full accounting from both banks, and would simply instruct the trustee to sell the property in non-judicial sale or instruct its attorneys to commence the foreclosure proceedings.

If the borrower challenged a non-judicial sale the second bank would produce the proof that it paid for the loan, and a full accounting, together with all the necessary paperwork including the recorded assignment, the original note etc.

If the second bank commenced a foreclosure suit it would attach as exhibits and plead allegations that the first bank originated the loan, then it was assigned, the assignment was recorded, the borrower was notified, etc. It would all be laid out nice and pretty ready for a Judge to rubber stamp it.

What I am saying is that the would-be forecloser must meet the same standards in the so-called world of securitized mortgages. The fact that they intended to assign and indorse, and deliver does not mean they did it.

If they didn’t do it, then they can’t enforce the debt or foreclose on the property. If they did, then they must produce the documentation and recording. There’s the rub.

They can’t produce the documentation without creating it for purposes of litigation. Each non-performing loan only has a demand for the paper trail if it is claimed to be in default, is in litigation, and the lawyer for the would-be forecloser needs something to show the judge. Each such loan transaction is THEN subject to an assignment that was created, fabricated and forged long after the cutoff date and possessing the single quality (being in alleged default) that makes it ineligible for assignment into a pool or to anyone without changes in the negotiability of the instrument.

So there is no assignment, indorsement or delivery and even if there was, there are provisions in every PSA that a bad loan will be replaced by cash or a “good” loan. This is what has pissed off so many judges now. every time a judge examines the paperwork it doesn’t add up. The Judge feels tricked and sometimes, like in Massachusetts they levy $800,000 fines against both lawyer and client (Wells Fargo) was misrepresenting facts they knew to be false.

So in the end you have two things. A “lender” (at the closing and on record) who isn’t owed anything because they got paid in full and have suffered no loss and a “lender” (the investor who purchased the MBS) who actually funded the loan and suffered a loss.

Of course you also have the borrower who has suffered a major loss through appraisal fraud etc. People forget that the borrower has paid money upon moving into the house or just by going into the closing. The presumption that there are borrowers with nothing invested in the house is dead wrong unless it was a completely fabricated loan using a dead person as the borrower.

The reason the lender/investors are not suing the homeowner is that they don’t actually have the paperwork to back it up. And they can’t get it. So they are suing the investment banks for appraisal fraud, securities fraud etc. The actual lender has elected their remedies, and perhaps they will pursue the borrowers under some equitable theories. But one thing is sure: the original obligation to the lender of record has been extinguished along with the security instrument (mortgage or deed of trust). None of the borrowers did this nor had any hand in the handling, creation or recording of the paperwork.

The fact that the securitization parties chose not to assign, indorse, deliver or record should not be rewarded by title to a house in which they have no investment based upon a non-existent loss. The borrower has money into the house even if there was no down payment. The securitization parties have nothing invested into the house and in fact, quite the reverse, were paid handsomely to create this mass illusion. Thus the only party seeking and getting a free house are those intermediary parties who neither funded nor bought the loan.

56 Responses

  1. Niel July 20, 2010 article about: “What if there is no securitization”

    the Blog below documents that all the loans and so called securitizations were acts of counterfeit. What Niel says here totally supports Kareem Salessi’s arguments when he began to litigate this in 2004, documenting exactly what is happening today. six years in advance!!! How could any of this be accidental? It has to have been totally designed and implemented.

  2. Sample FOIA Request Letter


    [Return Address]

    Foreign Agricultural Service
    U.S. Department of Agriculture
    Stop 1004
    1400 Independence Ave. S.W.
    Washington, DC 20250‑1004

    ATTN: Freedom of Information and Privacy Act Officer

    Dear FOIA Officer:

    Under the Freedom of Information Act, I am requesting access to [identify the records as clearly and specifically as possible including the time period applicable to the records you seek, i.e., 1 month, 2 years, etc.]. [Specify if you are a commercial requester, are representing an educational institution or a noncommercial scientific institution, are a member of the news media or a public interest group, or other.]

    If there are any fees charged for searching or copying the records, please let me know before you fill my request. [Or, please supply the records without informing me of the cost if the fees do not exceed $_____, which I agree to pay.]

    If you deny any part of this request, please cite each specific reason that you think justifies your refusal to release the information. Please notify me of appeal procedures available under the law.

    If you have any questions processing this request, you may contact me at the following telephone number: [number].


    [your name]

  3. so-cal-gal,

    Good post. The reports are never fully updated once they cease reporting under 15-D. No one can get full information. Further, any current distribution reports (on likely dissolved trusts) are simply a tracking of the original Mortgage Schedule – if there was one filed. It will not tell you where current mortgage payments are being forwarded – and will not tell you where any foreclosure recovery will be forwarded. Any current reports are simply for tracking of an old Mortgage Schedule- that was never updated.

    No one told them they had to update. Government gave them free and clear privilege to do as they please. But, courts should be smarter that this. Have said before – how can a court base anything on years old schedules – and SPVs that never reflected proper conveyance anyway?

    Expect from government – but not the courts. What is their problem??? Need remittance reports – and all trustee records for collection. This is where you will find that trustees have not received anything for these trusts in quite some time.

    Again, good post.

  4. To Daniela Mars and To Maher:
    Some of the trusts no longer exist. Supposedly the mortgages that still were in the trust have been rolled into another trust.

    So this could evolve into a search for correct SEC listing.

    On top of that, many of the trusts had only a handful of ‘investors’. My own is supposedly in a trust where there were only 7 investors from the get-go. In those cases, no 10-K is filed anymore. At least part of the 1122AB regs make reference to the 10-K. Would this stop the reports of the information required to show they are not compliant? or would the previously filed reports be sufficient if there is enough detail present in the reports?

    I also question whether the reports that are filed are detailed enough to be used to show that the rules were not being followed.

  5. M.Solimon,

    With a FOIA request can we get the SEC Regulation AB – 1122 ?

    Here is the link for their description


  6. Thank You Neil for this wonderful post.

    I can use this to help me win.

    Thank You, Thank You,


  7. Wish there was a way to make things right, in one fell swoop. I’m in court tomorrow. …..

    There is there is…Neil G is on today and read what he said. You can take them out but not in small claims court and not over night.

    It’s not about bashing lenders it’s about trapping a fraud and bringing it with you to court. Be smart and realize your headed to a foreclsure barring only a lawsuit YOU BRING!

    Then its about articulating each fraud with casue for claims and show where damaged. Argue upon researching thematter so there are no counter arguments.

    Judge tells me in court on Monday…
    “Can you recite the code you referring to?”
    I said of course Judge
    (Plaintiffs attorney “I object I object…your honor I object “ “ Whaaaaaaa! Stop I object”.)
    I said “look at 2924.1 something and he said okay.
    He read it aloud and said
    “it did not apply”.
    I said, “what about the last sentence…the part about “Good Faith”
    He said thank you….
    Ruling in Favor of teh ….PLAINITFF LENDER

    My thoughts to bring to counsel are Grounds to appeal, Motion to set aside, Consolidate win with another action, etc



  8. Angry Dude (hey)

    Rule 1122AB says a servicing agent can no do what they are doing. If they share the last name with the lender and try to anything outside of processing payments …it’s a violation (while these trusts were still listed ) It’s not a function of FAs and I think FIN 115 maybe. Joke the servicing agent cannot offer modifications.

    Caution…these loan mods your sending trial mod payments to…it is likely a boiler room and not the servicing department you’re thinking it is. (please verify as every situation is different) Have we got proof….Oh yes?

    One guy who headed the Countrywide servicing modification department copped out. “I am here in (Louisiana or something) Am I in trouble?” Another guy tells me he throws files away on a regular basis and then say’s to borrower …”I’m sorry sir…we lost your file””.

    Fraudulent intent, conduct, bad faith and deceptive and unlawful practices clams


  9. Trespass, I hope you get a judge who will listen, not just rubber-stamp.

  10. 2 Anoymous…

    The problem is that the United States is in very bad shape. As I have said before – we are casualties – there is no concern for us. They need to save the United States – and this job is so big – they just do not care about the people who are losing their homes – it is NOT a priority..”

    Well then the few with the brass still intact need to come to the plate!

  11. Thanks M. Soliman.

    I’m female and have no background in this mess.
    No one I know will even talk about it. They are not affected and said it depresses them to think about it, and those that are affected want to put it behind them.

    No one talks.
    But that information was clear as day to me.

    Wish there was a way to make things right, in one fell swoop.
    I’m in court tomorrow.

    Thanks for the compliment.

  12. PJ

    The problem is that the United States is in very bad shape. As I have said before – we are casualties – there is no concern for us. They need to save the United States – and this job is so big – they just do not care about the people who are losing their homes – it is NOT a priority..

    Did you listen to Mr. Ben Bernanke today? They really do not know how to correct a US economy that is in dire shape.

    In better times, what is happening now with foreclosures and in courts – would never happen. It is happening because Congress (and officials) are running around like chickens without a head attached. We are not the primary focus – they have BIGGER problems. – and we will be ignored.

    Fact remains – they should have taken care of the people (victims) first. They did not – and what we now witness is the consequence.

    Heard Congresswoman Jackie Speier – speak on CNBC – regarding modifications and that credit should not suffer if homeowners get a modification. She was eloquent – and spoke her message loud and clear. She steadfastly defended home owners against the banks. CNBC then did a poll – 74% agreed that borrowers who get a loan modification should suffer a 100 point decline in credit score.. (CNBC is “investor” controlled).

    I am not from California – Ms. Speier’s state – but called anyway just to support her effort.. Without support to representatives who stand up for us – we will continue to be casualties of a system that is longer supportive of the people.

    Neil is right in all that he is now saying. But, we cannot just be reliant on the luck of the draw for a judge that gets it. We ALSO need government support. Again, our legal system has been hijacked.

  13. 2 Anonymous… you are correct this whole HAMP Loan MOD crap has been a time buying game… only problem is they can not mop up and divest the deluge of toxic crap fast enough… criminal activity takes covering ones tracks and forethought none of which they gave in the first place.

    With the equivalent of people with GED’s reading from scripts at loss mitigation desks with a salary based on “performance” of intimidating homeowners into new debt obligation’s… this is only setting the stage for further problems down the road.

    Strategic Default or Principle reduction take your pick.

    And to the gal worried about their “credit rating” … in a short period of time this POTUS will be begging people to “SPEND”

  14. what rights do we have to remove negative reporting on our credit reports by these servicers?

  15. Ian

    The problem with modifications – again, you are right, is that they are often not done in the name of the real party. Thus, yes – they would be void – this is why they will ask you to sign away your legal rights (maybe at the last minute) – but it will be there.

    A modification is simply a “modification” of the original contract. That is, you are modifying the contract with the original lender. But, the original lender likely never even funded your loan – as is long gone. A servicer is not the creditor unless they have acquired title to you loan – in that case, – they have to tell you that they are the creditor. In either case, a change in loan terms must be a NEW Contract – and not a modification. No one should sign away rights on a new contract..


    what claim or grounds can the borrower raise 1122 AB or in what capacity can “1122 AB “manipulation of earnings” is one of the most powerful and all encompassing rules breeched by lenders ” be brought in a civil matter by the borrower.
    do you know? can this be brought in Federal and or State district court?
    FWIW – I dont know is a totally ligit answer.
    thanks Maher

  17. ian,

    “MERS- if their whole reason for existence, according to their website,”
    what if there was no assignment?! … the assignment is necessary to foreclose!!!
    if there was no evidence of the transfer there would be no proof of authority to foreclose, even if its just before the foreclosure “my mom wrote me a note as an excuse” is better in court than no proof.
    part of the theory why the lender would only pledge the loans is to increase assets on the books to continue to stay in business while really being too close to insolvency by lending & banking regulations.


    The title is clouded because Trustees are holding them and no beneficiary will ever surface that has both the Note and Deed, and they don’t want the homeowner to know the title should be returned to us.





  19. Securitization is where a business or assets of the business are spun off into a separate business entity.

    The lender is the owner of the business or assets of the business who has sold for cash its ownership of that business or assets as a unit.

    The buyers invest in the success and/or failure of the collective pool of assets. Therefore all the profit and loss that might come in the future is lost to the seller.

    A securitized investment is structured towards its investors’ who look to the right to receive cash flow. The distribution of cash flows are partitioned multiple times or divided accordingly into separate classes of varying value.

    The most senior chunk of cash or tranche investors lower their risk of default in return for lower interest payments.

    It is therefore the, lowest and last piece held or junior tranche investors that assume a higher risk in return for higher interest. This is usually what we retained when doing a mortgage backed offering. It only pays after all other senior investors are paid.

    Private placements are commonly used in a securitization (or non-public offering) which is a funding round of securities sold without an initial public offering. They were designed for mom and pops who cannot afford to raise capital by other means.

    A Regulation D PPM is the equivalent to a new issuance stock prospectus. It is issued to sell stocks to a small number of chosen private investors. The purchasers are accredited high net worth institutional investors such as banks, insurance companies or pension funds.

    These placements are subject to the Securities Act of 1933, the securities offered do not have to be registered with the Securities and Exchange Commission. Assuming If the issuance of the securities conforms to an exemption from registrations under SEC rules.

    Most private placements were offered as a Reg D or 501 and offered as a Private Placement. They can consist of stocks, shares of common stock or preferred stock or promissory notes (including convertible promissory notes),

    The borrowers promissory note is exchanged for a lenders promissory note and that is where the tender questions arises. Whos note did they sell.

    As said before I spent nearly three years with a law firm as an expert in SEC and DOJ claims against the firms clients.

    Counsel to my left was the only criminal attorney in the house. ..the rest were civil litigators. It seemed like not a friday went by when this guy was in and talking to a client on the phone as follows:

    “yeah, its not that bad…u huh….yep…eight years. They took the deal.”

    That’s eight years in a federal prison. Every one of those cases were for SEC private placement violations.

    I do not write here as much as I feel themessage is wasted. But think and know this, 1122 AB “manipulation of earnings” is one of the most powerful and all encompassing rules breeched by lenders that the SEC has yet to rise to.

    And the best part about it…there is enough incriminating evidence in public registration domains to to roast a pink pig.


  20. Okay, Maher Soliman- I am listening- please don’t speak in tongues, there are maybe 100,000 homeowners reading this blog, I am just one. I am hanging on your every word. Please inform us. Ian

  21. A modification is a novation. Use Kars, you know this. There the process starts with a new appication and disclosures. Its a new loan.

    Servicing agents are advancing the amount you did not pay to date. they are absolutly allowed to collect it.

    People, the lender is not a fiduciary and owes you no consideration business fairness or duty of care….only to act compliant.




  22. Here’s the problem I’m having. The lender shown on the county recorded trust deed bankrupted and so did the Title Company that held the trust. The new Pretender Lenders are trying to push me into a short sale. I declined their offers to modify because I didn’t want to give them access to the chain of title on my property. The problem is that for the last two years, the county assessor’s office and home owner insurance company return my payment because the pretender lenders have paid the taxes and insurance. I’m sure that this is their way of attempting to establish their right to a judicial foreclosure (California). I’ve talked to two attorneys who can’t seem to get past the fact that I refused to modify. No help there. Any suggestions on where I go from here? JFuIGqmAHFM9xZiAUJ5gHq3MGofWwDiWUr1ywpgBoth my

  23. Thanks, everybody! Listen, I don’t think this is going to end here. Let me tell you a story. After faxing the forms in to Wells Fargo FIVE TIMES over a five-week period, they call me and send an e-mail “CONGRATULATIONS! YOU’RE APPROVED FOR A LOAN MODIFICATION”. The day after I received the first MOD package, at 8:00 a.m. a Wells Fargo rep is on the phone asking for a “check by phone”. “Sorry”, I said, “gotta talk to my attorney.”
    A week went by and they sent another package (duplicate). I called a few days later and told them I would most likely accept the mod offer. GREAT! Send those payments to this address in California. “No, thanks, I will be paying in cash at the branch.” “Okay, sir”.
    Today, I spoke with some bitch in loss mitigation, and she tells me “No, you can’t pay in cash, you have to pay in CERTIFIED FUNDS, CASH IS NOT CERTIFIED FUNDS.” I said to her “WTF, you’re kidding, right? Your rep the other day was asking for a check by phone, but now cash at the branch is no good?” Okay you fuckers, I’ll play your game. Today the rep tells me to send the payments to an address in Egan, Minnesota (WFHM HQ), contrary to the payment coupons included in the package. I’m going through the docs, and there are NO signature lines and no instructions on where to sign. So I’ll sign all the pages and return it. I’ll take the cashier’s check to the branch, get my receipt, and let them jag me around some more. The attorney I retained told me to “do everything they tell you to do, and when they screw up, you’ll have grounds to re-open or file a new action. If they deny you a modification, we’ll then open a file for you to seek a reopening of your state court case to file a ‘counterclaim maturing after pleading'”.

    “Yes, Uncle Remus, I know they’re gonna jag me around.” Keep it coming!
    And, yes, every day that goes by, there’s another story about an investor class suing the sellers of the securities. The truth is getting out, slowly but surely.

    Anybody see this article from the Seattle Real Estate Examiner, dated July 13, 2010?


    “The International Bank Activities Reform Commission is charging Wells Fargo, partly owned by Warren Buffet and the Gates Foundation with fraud in their global involvement with the mortgage morass which continues impacting the global economy.

    In a complaint filed with the European Monetary Commission and the World Court in the Hague, Gabor S.Acs. one of the founders of IBARC stated, “Wells should get a Wells Notice from the United States Securities and Exchange Commission soon if they are on top of this investigation at the Justice Department.”

    The complaint alleges that Wells Fargo, their Directors, Officers and Major Institutional Stockholders including Goldman Sachs knew or should have known that billions of dollars in first and second mortgages originated, packaged and sold as securities by Wells contained false financial information provided by real estate brokers. mortgage brokers and borrowers, making it impossible for the borrowers to pay back the loans or to be qualified to even make the monthly payments without refinancing over and over during a 30 year period that falsely inflated the cost of housing in the United States and the world over as a result, causing serious economic damage to hundreds of millions of humans around the world.

    In Washington State Wells Fargo Financial recently announced it is shutting 25 of its stores which are currently located in Auburn, Bellingham, Bellevue, Bremerton, East Wenatchee, Everett, Federal Way, Kennewick, Kirkland, Lakewood, Lynnwood, Marysville, Olympia, Puyallup, Seattle, Shoreline, Spokane (two), Spokane Valley, Tacoma (two), Tukwila, Vancouver (two) and Yakima. (end of story)

    (that was my APE-MAN impersonation, pretty good, huh?)

    No offense intended, A-MAN. Just trying to get a chuckle out of you knuckleheads!

    ANONYMOUS, there’s nothing in the current paperwork about any release of claims. They state that “You agree that all terms and provisions of your current mortgage note and mortgage security instrument remain in full force and effect and you will comply with those terms; and that nothing in the trial period plan shall be understood or construed to be a satisfaction or release in whole or in part of the obligations contained in the loan documents.”

    That attempt to obtain my release of claims will surely come with the permanent “loan mod”, if we get that far.

    Chow Chow for now!

  24. Ian,

    I think that point about MERS is very significant but don’t know how to use it in court necessarily or to really prove anything.

    Thanks for clearing up Neil’s meaning for me. I still don’t get the significance of table-funding vs. non-table-funding. So you’re saying that the originating lender essentially got an investor to give them money to loan to borrowers in order for the investor to get–what…wait…I thought I got it there, but now I’m lost again.

    I guess the question that comes to mind in that case is, what would investors hope to get out of using originating lenders to loan money to borrowers? I hope I’m not coming across as ornery or willfully ignorant–just trying to understand.

    Did investors do that for money-laundering purposes or what?

    I think NG is also saying that the originating “lender” pretended to make a loan that was tabled funded by others, then kept the notes in violation of the loan purchase and assumption agreements.

    If this is true, would also seem to make any (/all?) post-closing “endorsements” (of any kind) by the “pretender lender” (or any other party) not only void but perhaps fraudulent as they are pretending to transfer what is not theirs to transfer. Title would seem to be monumentally screwed up.

  25. ian,
    I agree. People who sign up for modifications are set up the ultimate way. I haven’t found a single modification that is truly ‘permanent’.
    Even the ‘permanent’ ones come back after 6 – 8 months and are foreclosed.

    Banks make the homeowner go through about 6 months of paperwork just to get the ‘temporary’ permanent modification.

    It seems in a strange way, they servicer or whover is doing the modification indirectly tricks the homeowner into a one year contract to keep the home and then has a one year history that kind of establishes them as the rightful entity to foreclose, since in that year’s time no other ‘creditor’ stepped forward to claim they were supposed to be paid.

    If a homeowner really owns their home free and clear, and as usedkarguy said, had not paid for 30 months, it seems he’s being set up by a ‘customer service rep’, only doing their job, who will get him to sign documents that attorneys love to see, that will help them take his home, without recourse, in another year from now.

    I hope I’m wrong, but I haven’t heard a single thing different.

    The title is clouded because Trustees are holding them and no beneficiary will ever surface that has both the Note and Deed, and they don’t want the homeowner to know the title should be returned to us.

    “The meek shall inherit the earth.”

    usedkarguy…make sure you sign everything ‘at arm’s length’ and put All Rights Reserved somewhere near there, before you sign your name.

    Do not ‘trust’ their documents. It’s their ‘trust’ documents that got us into this mess, so do not ‘trust’ them.

    The person handling the modification cannot stand up to protect you or testify on your behalf on anything that happens in that modification.

    You are basically making an agreement with a business you should not be, and agreeing to their terms that they aren’t liable for what you are agreeing to pay them, and that they can take your home if they figure you aren’t credit worthy, or they decide the home is theirs and you are so upside down you may never catch up, or whatever.

    I’m sure you’ll be convinced that you can cancel the modification at any time, but by that time, there is an agreement that you ‘owe’ them and that cancellation will not put you were you are today.

    Wish you luck, I really, really do.

    But to sign a modification after 30 months is just something that I hope you have 30 months of payments stashed somewhere so that you are caught up as soon as you sign.

    The economy is changing…and fast…and if the dollar is not worthe what it was, and the cost of basics like food goes up, it had better be easy to pay the mortgage than feed the family.

    There is a cleansing going on…a sort of rapture, and those that didn’t know will not be spared just because they didn’t know and made a decision based on lack of knowledge.

    I care. I really do, but 60 million mortgages were messed up by MERS and my bank is not MERS and can easily add a couple million if not more mortgages to the pot for fraud.

    I’m being rational, and it’s too soon to tell you my results.

    If you start the modification, protect your rights on every thing you sign. If signing in person, your signature is the last thing you put on that paper. Strike through anything you don’t agree with, and write your own terms. Sign in blue ink and make a color copy of everything.
    Have modification folders and date them by the month to keep track of the process, and any letters sent with forms that have terms you don’t agree with, strike through the terms on the letters, initial in blue ink. Write your own terms, in blue ink. Make color copies of the letter and the forms written or at least signed in blue ink. You can even keep the originals and send ‘them’ the copies.

    Write on their copy ‘True and correct copy’ (in red ink) and send it to them.

    If anything comes to a court and looks like your signature was photocopied to a document you have the originals.

    A notary can notarize the date you signed the original (you are keeping) such documents so there can be no question as to the authenticity of your signature on an original, nor a question on the date you had signed the originals that you sent them ‘true and correct’ copies of.

    If they want to provide a modification, it had better be on your terms, because if they are not going to go through with it and pull it, you have your rights protected by doing everything ‘at arm’s length’.

    I really, really, wish you well.

    I know nothing and if I think I know something, I know nothing. I do not give legal advice because I don’t know legal things. I don’t work in any financial industry, nor have I ever, and I don’t know anyone who does. Anything stated from a person who admits they know nothing is merely an opinion and will continue to serve as such.

    All Rights Reserved

    Light and Love.

  26. Hi,

    I just found out that my original Lender, Option One Mortgage Corporation, a California Corporation which is organized and existing under the laws of California and whose address is 3 Ada, Irvine, CA 92618 which is clearly stated on my Mortgage document, that closed on June 13, 2006, was not an active Corporation in California as stated at the time of my loan. Check with the California Secretary of State: Entity Name: Option One Mortgage Corp. – Entity No. C1562192 – Date Filed: 7/19/1989 – Status: Suspended – Jurisdiction: California. I then checked with the State of California Dept. of Real Esate for Option One Mortgage Corporation at 3 Ada Irvine, CA 92618 – License No. 01151921 – Expired: 02/04/05. Then check for H&R Block Mortgage Corporation, OOMC is their subprime lending unit and its the same address as above, License No. 01206090, Expired: 03/10/04 License status: Expired. Corporation issued 03/11/96.
    I also checked Delaware a lot of them form their corporations there and found Option One Mortgage File No. 2384539 Incorporated: 04/07/1994, Entity: Corporation – Entity Type: General – Residency: Foreign – State: CA. Did not file a form to do business in Delaware and withdrew to qualify to do business in Delaware on 7/21/2008.

    Do I even have a valid loan or was this fraud to begin with? If they were not an active corporation at the time of my loan and did not have an active license, is there something fishy here?

    Check it out yourselves, feedback would be appreciated.

  27. Roger, I will call you. God, I have been thinking we are the silent army….those of us that know that we’ve been defrauded….and we are each miles away and yet going through the same horror.

    Thank you, Roger, for letting me know how to fight the tough fight.


  28. I got one better for you, I had a loan modification done in 3/2008 through the servicer of the loan. The modification papers say that Bank of NY granted me the mod., I fell behind in payments in 8/2010 and they started foreclosure proceedings in 12/2010. Just 3 days before the complaint was filed, they assigned the mortgage only to Bank of NY. Got them!!
    How is it possible for them to Modify my loan if they didnt own it yet. This goes right to heart of Neils article.
    They never assign anything until they have to, the servicer is really the holder of the note, but they are not the creditor. So they then had to assign the mortgage to somebody (“trustee”) to foreclose.
    This is all FRAUD, plain and simple. They misrepresented a material fact that they knew was false, with the intent to defraud. I hope my Judge see’s through their BS. I hope he also cancels my loan modification, and returns all payments made post modification because of this fraud.

  29. Neil(or anyone with direct knowledge)- in the above post, you wrote “….possessing the single quality(being in alleged default) that makes it ineligible for assignment into a pool or to anyone without changes in the negotiability of the instrument”. Can you explain this further as far as PSA requirements, SEC laws, IRS rulings, etc. This would seem to be a GREAT step for many cases going forward. I know that Judge Schack made multiple references to such actions being a breach of fiduciary duty on behalf of the trustee of the trust. Please comment. Thanks.

  30. ANONYMOUS- as per your post to Roger (usedkarguy):
    I know that a borrower gives up their right to legal action forever, but I cannot find an answer to: if it can be proven that the entire loan mod was borne of fraud, by entitiies which had no right to modify the loan, thereby further disguising the identity of the creditor,note holder in due course, investor or whatever the term is, then what? I cannot believe that the modification agreement would stand- what do you say to this? Is there any clear way to reverse the mod and its’ provisions? I still think that the entire loan modification process is a means for the banking industry to launder the illegal loans. 5-6 million people applied, and 3-400,000 were approved, if we can believe the numbers? The numbers change every week!

  31. Roger- I have learned alot from your posts and know that you have made a decision that is good for you. I know what you mean about the kids, it is important that they know that you stood up for your family and fought a good fight. Good luck and Godspeed. Ian

  32. California Court Rules: MERS Can’t Foreclose, Citibank Can’t Collect

    Case Title: Rickie Walker
    Case no. 10-21656 – E – 11
    Date: 5-20-10

  33. Hey Roger – usedkarguy – Make sure you get a lawyer to review your modification. A modification signs away all your future legal rights. And, guaranteed – you do not even know your creditor with the modification contract..

    But, as Abby says – Good Luck!!!!!!

  34. Bye Roger!! Will miss you usedkarguy! Good Luck!!

    A person has to do what they think best.

  35. Excellent! I suspected this is what was going on. Great post, Neil!

  36. OOPS.










  38. In the patriot community, the order in which you sign a stack of documents creates or extinguishes obligations that are in those documents.

    When people try to do allodial titles and want to file them, they have to have certain documents on top of certain other documents in the pile. The order in which they are stacked, represents the authority or power the preceding document is controlled by the document on top.

    In the situation with mortgages; we all sat across a table, and a person on the opposite side of the table had the documents and the mortgage ‘lender’ you trusted was in the room talking to you, and serving as a distraction of sorts.

    The person across the table slowly handed documents to you one at a time; never really giving you the entire stack or revealing the next document in the stack to be signed.

    The Patriot community says, if the Note was signed after the Deed of Trust, the Deed of Trust would have been satisfied. But because you paid for the house before you signed the contract for the house (so to speak), the obligation remained as a promise to pay.

    If you remember, there was a trick that was done. As soon as you signed the Note, the Lender said, let me go make a copy of this, and by removing the Note from the room, the other documents were not satisfied as they would have been had the Note remained in the room.

    If you remember, the Lender representative came back after certain other documents were signed and said someone else was making copies.

    At the end, you’d get your copies.

    But if you could have seen all the documents at once, and initialed them all and then signed the Note, it would have been as if you’d paid for the home at that time and released the Deed you’d just signed.

    It’s like giving a car dealer the check for the car you want and signing the contract for the car later own, and the contract says you owe for the car…yeah you signed the check first, but that check is out of the room, and by signing the contract for the car last and by it saying you owe for the car, you owe for the car because where is your payment when you created the obligation? It’s out of the room, gone, doesn’t count.

    That’s what happened to us with the mortgages we signed and that’s the last piece of the puzzle that was never released to anyone.

    I know nothing and if I think I know something, I know nothing. I do not give legal advice because I don’t know legal things. I don’t work in any financial industry, nor have I ever, and I don’t know anyone who does. Anything stated from a person who admits they know nothing is merely an opinion and will continue to serve as such.

    All Rights Reserved

    Light and Love

  39. Was the Bellistri v. Ocwen Loan Servicing decision overturned???

    MERS is claiming victory on their web site:

  40. Usedkarguy,

    Best of luck to you. I do not blame you for jumping off the train and moving on with your life. You put up a good fight. That is what matters most.

    If I thought I could get another loan (this time from credit union), I would let this house go and buy a bigger and newer one for $100,000.00 less than I owe on this one. But, like you, I must put up a fight and try until I can’t (or they can’t).

    May the Grand Creator bless all your efforts and wreak havoc on your adversaries.

  41. MERS is claiming victory on their web site:

  42. zurenarrh- very incisive comment about MERS- if their whole reason for existence, according to their website, is that they make county recordings no longer necessary, then WHY are they assigning a mortgage to a trust YEARS after the cutoff date, but only days or at best, a few weeks before a foreclosure? (if not after)
    Speaking of trusts, is there some legally defining document or registration which states unequivocally that,say, XYZ-2005-2 trust is still in existence? Would the IRS know? How to find out, without guessing your way through the SEC sites? Thanks.

  43. I’m jumping off this train, folks. Taking the shitty loan modification so I can stay in my house. Maybe they’ll screw up somewhere down the line and give me another cause of action. We’re up against the wire on the sheriff’s sale, too late for appeals, no real reason to go BK because it’s a non-deficiency state. I’ll never pay off the mortgage anyway. So much for increasing my net worth through real estate. Yes, I will have a $210,000 mortgage on my $130,000 house. But who cares? Neil, ANONYMOUS, neidermeyer, Dan Edstrom, all you guys (and gals) on this blog I will always count as “brothers in arms”. If not paying for 30 months and surviving the first half of this recession counts as a victory, I WIN! When I leave this earth, my kids will always know I fought to win. I may not leave them a home, but I hope they will understand someday that their father, though not the sharpest tool in the shed, made an effort to better himself and his families’ life.

    It’s time to let GOD take care of these bastards. They’ll get theirs….. someday.

    Thanks for everything.

    Good luck to all.

    Roger Rinaldi aka usedkarguy

  44. If thousands of loans were bundled into a pool, shouldn’t they have made spreadsheets identifying the loans that composed each pool by using our MERS Mortgage Identification Number (MIN) ? So they were cutting corners by not assigning actual loans to any specific pool, is this right? So now, and for court purposes, the fraudsters are trying to create documents to lead us all into believing that our loans were in a specific pool all this time when in fact the loans never left the originator?

  45. zurenarrh: (more…)

    and, if the loans were “sold forward” or table funded by another undisclosed entity (for a large undisclosed fee by the “pretender lender”), perhaps the loan contracts themselves are void because of the deliberate deception as to the identities of the real parties to the contract? TILA?

    Also would seem that one cannot “re-purchase” what one never “sold” in the first place.

  46. zurenarrh: more food for thought…

    I think NG is also saying that the originating “lender” pretended to make a loan that was tabled funded by others, then kept the notes in violation of the loan purchase and assumption agreements.

    If this is true, would also seem to make any (/all?) post-closing “endorsements” (of any kind) by the “pretender lender” (or any other party) not only void but perhaps fraudulent as they are pretending to transfer what is not theirs to transfer. Title would seem to be monumentally screwed up.

  47. One thing I forgot to mention in my post below:

    As I mentioned in my comment on Neil’s original post from yesterday, if in fact the originating lenders kept the notes, that would also explain Fannie’s new policy of having servicers prepare assignment from MERS to the servicers just prior to foreclosure. On its face, such a policy makes no sense–if Fannie really owns the loans, why would they tell servicers to do something legally impossible, i.e., assign notes from MERS to servicers rather than from Fannie to servicers?

    The answer must be, as Neil has ferreted out, that Fannie doesn’t own the loans, the servicers do. Therefore, this new policy of Fannie’s is a tacit admission of what Neil is saying. Neil was already headed down this road when he titled his post on the new Fannie policy thusly: “Fannie Mae Policy Now Admits Loan Not Secured” (from June 2, 2010).

  48. OK–lemme see if I have this straight.

    Neil is saying that the loans are simultaneously created and extinguished at closing and that the originating lenders held the title at all times throughout the life of the loans.

    In other words, Neil seems to be suggesting that banks made the loans, then pretended to sell the notes to Fannie/Freddie/directly to investors but instead of actually assigning and transferring the notes, the originating lenders kept the notes?

    If that’s what he’s saying, then his declaration that the obligation is extinguished makes perfect sense, because the originating lender would have received money for the note but not transferred it, thus paying off the note.

    That scenario also explains a lot of the rigmarole surrounding the assignments, which always seem to take place just before the foreclosure is begun (if not after the foreclosure is begun). Not only that, but these pre-foreclosure assignments are always recorded in the county land records (as far as I know–mine was), which puts the lie to the raison d’etre of MERS, which is that assignments in the county land records are no longer necessary.

    My only question is this, then: who would pay an originating lender face value for a note and then not require that the note be transferred to them. Or to use the players in my own case as an example: If Fannie pays Countrywide $200K for my note but then doesn’t require Countrywide to actually transfer the note to them and so Countrywide keeps the note, what does Fannie get out of it?

    Well, to answer my own question (perhaps incorrectly) now that I think about it, I guess what Fannie gets is the illusion that they own the loans in the pools so they can sell MBS to investors. I have been given my Fannie Mae pool number in pre-discovery disclosure, but just because there is a list of 1600 loans under that pool number does not necessarily mean that any of those loans are actually owned by Fannie. Come to think of it, none of the loans are identified by loan number, loan amount, address, or even city, just a state and the total amount of pool loans from that state. That would make it very easy for them to modify the pools at will, as required to evade whatever legal heat from certificate holders or borrowers might be coming down on them.

    So do I have that about right or am I completely missing the point?

  49. Tuesday 20 July 2010


    “That is why they used MERS as a cover for constant transfers, resales, and multiple sales. You must remember that MERS is neither the business record of any of the players nor public record. It is worthless as evidence since it is a virtually unsecured proprietary database that owns nothing, transfers nothing, never comes into possession of the documents, and never touches the money as a conduit or otherwise.”

    What a terrific statement to make, and one that can be used around which to base a strong argument in court pleadings!

    Excellent post for its simplicity and adhering to the basics.

  50. The problem is that most County Circuit Judges don’t care if the paperwork the “bank / Trust” submits is fraudulent. They don’t intend to enforce the law from the bench as it is easier to just let the paperwork pass by.

  51. I would be very interested in anyone in California who has filed a Quiet Title Action and has had success. I am about to do so and would like to hear about results. Also, what would be the grounds of the QTA when filed?? Thanks VERY much in advance to anyone who replies……

  52. The 4 Trillion Dollar Hangover.

    “The securitization parties have nothing invested into the house and in fact, quite the reverse, were paid handsomely to create this mass illusion. Thus the only party seeking and getting a free house are those intermediary parties who neither funded nor bought the loan.”


  53. How does one find the original post? I can’t find the archive link on the site.

  54. I have always wondered how the pretend lenders could even securitize the promissory notes in the first place. It is my understanding that only notes that have no terms can be securitized. Most if not all promissory notes for mortgages have terms. The promissory note mentions interest rates, payment dates and maturity dates.

Contribute to the discussion!