Cruel Hope: the Practices of the Home Builders and Their Mortgage Subsidiaries

Editor’s Comment: This paper reveals what I have been writing about for over 3 years. The Developers were not simply the innocent beneficiaries of Wall Street’s scheme. They were a necessary component. For half of all mortgages that were new-home purchases, Developers were dependent upon and made sure that the loan was brokered in a way that guaranteed “approval” (in fact there was no approval or underwriting process) on loans that could not possibly work, using appraisals based on data where the source was exclusively the Developer. As you can see, Lennar is about at the top of the list.

LAWYERS: Developer’s should not be omitted from your menu of defendants when you sue for damages or even equitable relief. The facts of the developer’s involvement may even have a direct bearing on the issue of rescission. Tendering the house back to the developer as a co-venturer in an illicit scheme may open some doors that Wall Street doesn’t want anyone to know about.

Lennar was my builder. They owned the originiator, paid the credits, made $25,000 on the loan, was paid for the insurance, was the trustee of the deed of trust, owned the title and excrow company, was the servicer, sold the note, and the list goes on.
Affiliates are:


Cruel Hope written about this very topic:

Lennar in a study in California by me perfored nearly 70 per cent of sales of homes with their affiliated subsidiary Universal American Mortgage. They additionally recieved $14,000 rebates from a Mello Roos tax that they as one of the land owners voted to encumber on the homes. They got the credits for water school fee, sewer fees when they pulled the builder permits.

This is a complicated story but I have made a website of my community with the history to prove it. Was able to get $3,7 million returned for this tax. Collected two surety bonds for a total of $240,000 from Suncal the master developer. Working to get more.

Here is the community website with all the education.

I could go on and on as I feel this is the key in California. Lennar is a teflon as they get away with everything.

brian davies


6 Responses

  1. Great JOB, Brian!

    Without the upward pressure on housing prices that were seen everywhere in the new developments during the ‘bubble years’, the offender-pretender-lenders would have had a much harder time convincing the public that over-all housing prices were on such an incline nationally. It is all so inter-connected.

    In conversations, I have tried to bring up the topic of how the appraisals were manipulated, with pressure on the appraisers plus the deceit with the new developments. People just don’t get it.. They don’t see the ever-widening ripples that were being created. Appraisers use other completed sales. As those are based on fraud, they up the appraised value on the other nearby homes, also fraudulently.

    Now we are seeing the reverse are do not know how low it may go. Are we headed back to prices from the 70’s? Not likely, since the dollar is worth so little. But if the prices keep falling, people will stay out of the market until they believe it has hit bottom. We are in un-chartered territory.

  2. Brian Davies- great job, I for one appreciate your superhuman efforts at combatting this massive fraud. As I recall from your earlier posts,Brian, you went pro se as far as you could, and hired an attorney after the defendents in your suit hired a huge law firm to defend. That is very telling. Can you let us know how it is going? Thanks and keep up the tremendous work.

    (“Universal’s”) position in its Demurrer to the first, second, third, fourth, fifth, sixth, and seventh causes of action are that Plaintiff has not plead the elements or provided fact sufficient to state a cause of action and put the defendant on notice of his alleged wrongdoings. Such is not the case. In fact (“Universal’s”)” causes of action are plead clearly. (“Universal”) has played an active role in: #1) Fraud, #2) Violation of California Codes § 2923.5, §2924, §2932.5, §2934, #3) Slandered Title, #4) Violated Bus.& Pro. Code §17200 et. seq., #5) Breached the Implied Covenant of Good Faith and Fair Dealing #6) Intentional Deceived, and #7) Violated California Financial Code 50505.
    WHO IS (“UAMCC”) 1)Originator, 2) California Mortgage Lender (not a federal lender), 3) Subsidiary of Lennar, 4) Subsidiary of Universal American Mortgage Company LLC, 5) Assignor of Plaintiff’s note on 12-21-06 to Opteum Financial, 6) Assignor of Plaintiff’s Deed of Trust on 8-20-09 to (“Deutsche”).
    WHO IS (“UAMC”) 1)Not certified by California Secretary of State, 2) Trustee of Plaintiff’s deed of trust, 3) Parent of (“UAMCC”) 4) Subsidiary of Lennar, 5) Beneficiary of Plaintiff’s house hazard insurance policy, 6) Original Mortgage Servicer, 7) Responsible for underwriting done for Plaintiff’s loan, 8) Parent of other ancillary owned housing related companies including title, escrow and mortgage underwriting.
    Plaintiff’s Trustee of his Deed of Trust was (“UAMC”) from 11-16-2006 to 08-20-10. The scope and nature of the trustee’s duties are thus exclusively defined by the statute and the deed of trust itself. No other common law duties exist. (I. E. Associates v. Safeco Title Ins. Co. (1985) 39 Cal.3d281, 287-288). The lender has an interest in quick and inexpensive recovery of the debt, while borrowers need protection against the forfeiture of valuable property rights. Id. at 346. Consequently, the trustee requires clearly defined responsibilities to enable them to discharge their duties efficiently and to avoid entangling the parties in drawn out and expensive litigation. There is only one trustee at a time.
    The only apparent uncertainty is which party Universal American Mortgage Company LLC (“UAMC”), or Universal American Mortgage Company of California (“UAMCC”), or (“hereinafter collectively referred to as (“Universal”)), did what act. Both parties are derivative and interchangeable in many of the Plaintiff’s documents. Although not certified to do business in California (“UAMC”) acted as Trustee of Plaintiff’s Deed of Trust. It works as the senior to the subsidiary Universal American Mortgage Company of California (“UAMCC”).
    (Mabry v. Orange Superior Court”( 2010), 185 Cal. App.4th 208) “The Perata Mortgage Relief Act”, California Code §2923.5 was effective in September 2008, and was urgently enacted to help stem the foreclosure crisis facing our country. The 4th Appellate Court Division Three accepted and heard a Writ of Mandate on May 17, 2010. On June 2, 2010 the Court published their Opinion and the case was remitted back to the Superior Court in Orange. The Published Opinion was immediately effective. The Court reviewed California Code §2923.5 in context with California Code §2924. The Court of Appeals Decision on California Code § 2923.5 Is Stare Decisis. The Court’s published opinion interprets the legislative intent of California Code 2923.5.
    1) “May section §2923.5 be enforced by a private right of action?” “Yes.” “Otherwise the statute would be a dead letter.”
    2) “Must a borrower tender the full amount of the mortgage indebtedness due as a prerequisite to bringing an action under section §2923.5?” “No.” “To hold otherwise would defeat the purpose of the statute.”
    3) “Is §2923.5 preempted by federal law?” “No.”. California Code § 2923.5 compliance is prerequisite to Cal. Code §2924.
    ((“Universal”) sole and separate as (“UAMC”) and (“UAMCC”))
    Defendants seek to side step the issues and make inflammatory allegations that are not responsive to the issues in controversy and are calculated to deflect this Court’s attention to the substantive issues. Plaintiff has properly alleged violation of California Code §2923.5, as Plead, (SAC at Line 24 Page 8 to Line 25 Page 9), a necessary step prior to the filing of a Notice of Default. The benefits of California Code §2924, inherently assumes that Defendants do proper assignments. (“Universal”) played an active role in this violation as Trustee of Plaintiff’s Deed of Trust (“UAMC”) and then as assignor of the beneficial interest in the Deed of Trust on August 20, 2009 (“UAMCC”) at a time when it owned no interest.
    Plaintiff has properly alleged violations of the Perata Mortgage Relief Act (“Universal”) which specifically states no tender is necessary, a fact, that is assumed valid once the benefits of California Code Section §2924 are initiated by legally invoking the power of sale clause by the note holder or the beneficiary entitled by recorded assignment to do so (Cal. Civil Code § 2932.5).
    (Fraud and intentional Deceit –origination and funding) Plaintiff has pleaded sufficient and certain facts to state a cause of action against (“Universal”) both jointly and severally. Special Demurrers for uncer¬tainty will be sustained only where the complaint is so bad that the defendant cannot reasonably re¬spond; i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him or her. [Khoury v. Maly’s of Calif., Inc. (1993) 14 CA4th 612, 616, 17 CR2d 708, 710 (citing text)]
    It is clear from the special demurrers that (“Universal”) understands the first causes of action, and the complaint contains enough facts to apprise defendant of the issues it is being asked to meet. Failure to label each specific count or cause of action is not grounds for demurrer: “Although in¬convenient, annoying and inconsiderate, the lack of labels does not substantially impair (defendant’s) ability to understand the com¬plaint?’ [Williams v. Beechnut Nutrition Corp., supra, 185 CA3d at 139, 229 CR at 607, fn. 2].
    The elements of fraud are pleaded with facts, specificity and are certain for (“Universal”). These elements include:
    a) A misrepresentation by the defendant (SAC as plead ( 22)).
    b) The defendant’s knowledge of its falsity (i.e., “scienter”) (SAC as plead (23-27)).
    c) The defendant’s intent to induce the plaintiff’s reliance (SAC as plead (28-29)).
    d) Justifiable reliance by the plaintiff (SAC as plead ( 29-34)).
    e) Resulting damage (SAC as plead ( 35-36)).
    Plaintiff properly alleged “Jeffrey Feig”, “Universal’s” paid loan advisor and his supervisors, made the fraudulent representations, as (“Universal’s”) authority to speak (SAC as plead ( 21-27)).”
    (“Universal”) misleads this court by statements made in their demurrer (at lines 7-17, page 3) that Feig gave exactly what was promised a fixed 30 year home mortgage. This was not true and not supported by their own discovery productions.
    Plaintiff’s first mortgage had an Annual Percentage Rate of 6.737% for 30 years (Ex. B (UAMC 000329)).
    Plaintiff’s second mortgage had an Annual Percentage Rate of 10.233% for 15 years (Ex. C (UAMC 000394)).
    Secondly (“Universal”) again misleads this court in their demurrer (at line 22 Page 3 to line 2, Page 4). Plaintiff was married with other community property obligations.
    The final applications signed on the date of closing indicated married sole and separate for title (Ex. D (UAMC 000428)).
    Plaintiff was in the middle of a divorce. It was not an ex-wife as Plaintiff was in divorce proceedings in which community asset were not adjudicated for over a year later ((“Universal”) demurrer at Line 25 and Line 27, page 3).
    The deed of trust signed on the same day was a different scenario proffered by (“Universal”) (Ex. E (UAMC 000359)). Spousal signature was needed to perfect the security interest as required by “Universals underwriting guidelines (Ex. F (UAMC 000088)). The signoff by Plaintiff’s spouse simply did not occur.
    Finally Plaintiff has stated a cause of action for fraud which is plead with certainty and it will require full discovery to present the facts. If this cause of action is not plead with certainty, and for the elements of fraud, Plaintiff request leave to amend.
    (Violations of California Code §2923.5, §2924, §2934, §2932.5)
    Plaintiff properly alleges (“UAMCC”), was the original legal beneficiary of the promissory note. (“UAMC”) was the trustee of the deed of trust the day the notice of default was filed. Thus (“Universal”) violated California Codes §2923.5 by prematurely facilitated exercising the Plaintiff assigned power of sale clause in Plaintiff’s Deed of Trust.
    Violation of California Code §2923.5 by law creates a violation of California Code §2924 (if the Notice of Default is filed). This is a violation of the Perata Mortgage Relief Act. (Mabry v. Orange Superior Court”( 2010), 185 Cal. App.4th 208)
    Plaintiff properly alleges that (“Universal”) also violated California Code Section §2932.5 (Statute of Frauds). The California Code 2932.5 violation is plead in the general allegations with specificity to (“Universal”) as Plead (SAC, ¶13, ¶14, ¶15, ¶57-61). Plaintiff alleges statutory violation in the assignment of the deed of trust. The Deed of Trust must be assigned to the beneficiary prior to the legal authority to invoke such power of sale. Plaintiff has alleged this fact in the pleadings as Plead (SAC Line 5-10, Page 11).
    California Code §2934, allows for Substitution of the Trustee as there is only one trustee at a time. Plaintiff properly alleges (“Deutsche Bank”) could not as a matter of law assign the trustee as it did not hold the Deed of Trust (Cal. Civ. Code §2932.5). The Deed of Trust was held by Mortgage Electronic Registration Systems Inc. (“hereinafter “MERS””) as an agent for Universal American Mortgage Company of California “hereinafter “UAMCC””). (“UAMCC”) had no security interest to assign to (“Deutsche”) on 08-20-09, it has sold that interest 2.5 years before. The power of sale was held by (“UAMCC”) when (“Deutsche”) invoked the power of sale as Plead (SAC ¶55-¶61).
    The assigned Trustee of the Deed of Trust (“UAMC”) was obligated to act in protection of Plaintiff’s rights on July 14, 2009. Defendants (“Universal’s”) Demurrer fails as Plaintiff has pled each and every Count in this Cause of this Cause of Action with certainty and specificity thus the Demurrers should be over ruled or in the alternative allow Plaintiff leave to amend to improve the pleadings as details from discovery are being accumulated

  4. Cheers Neil thus post t is exactly how I was induced into signing my financial death certificate I simply do not believe they were ” just stupid” some have excused away the predatory behaviour of the developers in my case the developer was do greedy they created a waiting list lottery to inflate the illusion further still and had their affilate companies pretender lender and title company make sure that it all went through for sure no matter what now if anyone asks me ” why didnt you not realise you couldn’t afford the house” I say why would I property iwas going up I made 20 percent equity whilst it was being built I signed because of loan to value not to mention the bubble had been blowing up for years prior….I bought at the height 2007… I have never in my years iof having a mortgage to a property and I have since age 22 and I’m 48 thought for one minuite ( till this past couple of years) that I couldn’t trust the person across from
    the signing table that it was what they said it was and that they would never risk the ” banks” money otherwise yes I was nieve we all were and like Neil says they will always know more than us they will always have the advantage but mers securitization overcolsteruzatiom crdit default swaps hiding transfer and overselling through mers that’s a trick and a half how cannyou understand that when it’s hidden. Is there anyplace for hidden transactions off the books accounting and all that nonsense. If ever the trust is to return and I’m
    not talking about ex homeowners exclusively there are investors the world over who must be looking a wall street with daggers in their eyes I sm struggling with the concept that they were ” just stupid”which I heard today .., so maybe ibshouldnt take it so personally,.., so who’s to blame. Where to place the blame. Maybe a shared loss agreement like that sweetheart deal between the FDIC and one west Bank FSB ( I have a new meaning for FSB) forgot to mention loan was 85/15 I put 45k down

  5. Every link in this chain left my jaw dropping. How could I miss this connectivity. Maybe the financial sinews of all of America is corrupted by greed. So it always leads to the conclusion, that the people we trust our money with, are in effect the greed source itself.

    Will anyone every actually get their money out of the bank in the coming days?

    A winning bet says no, it’s already gone! LOL A twist on Alvin Toffler concept of super symbolic currency, this one is total fiction. Mindblowing, bankrupt and coming soon to a land near you…

  6. AMAZING, sending a copy to several lawyers. I have talked to several lawyers, but laziness oozes from their veins.

    For them this is too much work and Wall Street loves that!!!

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