COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

The fact that the true creditor doesn’t want to collect from homeowners is not a good reason to allow someone else to collect it. — Neil Garfield

FORECLOSURE CASE LAW – HSBC v. MURPHY, Maine Supreme Judicial Court, 2011 ME 59 (May 19, 2011)



“We have also repeatedly emphasized that a party’s assertion of material facts must be supported by record references to evidence that is of a quality that would be admissible at trial...This qualitative requirement is particularly important in connection with mortgage foreclosures where the affidavits submitted in support of summary judgment are commonly signed by individuals who claim to be custodians of the lender’s business records. Thus, the information supplied by the affidavits is largely derivative because it is drawn from a business’s records, and not from the affiant’s personal observation of events.” (e.s.)

“The foundation that the custodian or qualified witness must establish is four-fold:
(1) the record was made at or near the time of the events reflected in the record by, or from information transmitted by, a person with personal knowledge of the events recorded therein;
(2) the record was kept in the course of a regularly conducted business;
(3) it was the regular practice of the business to make records of the type involved; and
(4) no lack of trustworthiness is indicated from the source of information from which the record was made or the method or circumstances under which the record was prepared.

“Because we determine that the affidavits submitted by HSBC are inherently untrustworthy and, therefore, do not establish the foundation for admission of the attached documents as business records pursuant to M.R. Evid. 803(6), we vacate the judgment without reaching the substantive issues raised.”

“In Chase Home Finance LLC v. Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508, 510-11, we stated that at a minimum, in support of any motion for summary judgment in a residential mortgage foreclosure action, the mortgage holder must include the following facts, supported by evidence of a quality that could be admissible at trial, in the statement of material facts:
•    the existence of the mortgage, including the book and page number of the mortgage, and an adequate description of the mortgaged premises, including the street address, if any;
•    properly presented proof of ownership of the mortgage note and the mortgage, including all assignments and endorsements of the note and the mortgage;
•    a breach of condition in the mortgage; •    the amount due on the mortgage note, including any reasonable attorney fees and court
•    the order of priority and any amounts that may be due to other parties in interest, including any public utility easements;
•    evidence of properly served notice of default and mortgagor’s right to cure in compliance with statutory requirements;
•    after January 1, 2010, proof of completed mediation (or waiver or default of mediation), when required, pursuant to the statewide foreclosure mediation program rules; and
•    if the homeowner has not appeared in the proceeding, a statement, with a supporting affidavit, of whether or not the defendant is in military service in accordance with the Servicemembers Civil Relief Act.”

It is, perhaps, stating the obvious that an affidavit of a custodian of business records must demonstrate that the affiant meets the requirements of M.R. Evid. 803(6)7 governing the admission of records…A business’s records kept in the course of its regularly conducted business may be admissible notwithstanding the hearsay rule if the necessary foundation is established “by the testimony of the custodian or other qualified witness.” M.R. Evid. 803(6). “A qualified witness is one who was intimately involved in the daily operation of the [business] and whose testimony showed the firsthand nature of his knowledge.”

EDITOR’S NOTE: There is no point of higher importance than that the evidence be heard and considered — and that it be tested for admissibility as evidence. This case artfully describes the process by which evidence is admitted. It also reveals the way the pretenders are avoiding the rules of evidence and getting away with it — until a court takes a close look.

The mistake in court that is replicated across the country is that lawyers, judges and pro se litigants are assuming evidence rather than going through the process of presenting it. The issue is not some technical two-step to avoid foreclosure. The issue is whether the requirements of law  have been met and therefore whether the party presenting itself as the would-be forecloser is in fact entitled to do so. Specifically, the mistake being made repeatedly is that lawyers are failing to object to affidavits that are inherently defective and failing to object to witnesses that either sign the affidavits or testify in court when they clearly do not possess the elements of a competent witness.

The reason they don’t have a competent witness is that their business records do not qualify for the business records exclusion to the hearsay rule. So they are merely presenting a warm body who tries to give the appearance of being a records custodian of records kept in the ordinary course of business and therefore carry a degree of credibility since they were not prepared for litigation.

That in fact is the opposite of what the banks have — they have only records prepared for litigation and no records that were kept in the ordinary course of business on any level, much less the chain of custody of records and knowledge, based upon actual transactions that were performed by the pretender. All the testimony and affidavits refer to transactions that did NOT involve the pretender forecloser. That is why this court, together with hundreds of courts across the country are coming to the conclusion that the affidavits are inherently defective (not credible), requiring an actual presentation of formal evidence in a trial or evidential hearing.

If the pretenders had the real goods, they would simply go forward with trials and presentation of formal evidence and the defenses and adversarial proceedings would quickly fade away as they won case after case on the evidence. But the truth is that the cases they are “winning” are without evidence and solely based upon presumptions and ignorance of the rules of evidence. Why is this important?

All this is important, because in a real trial, the pretender would have to allege and prove that it is a creditor who stands to lose money if they are not able to sell the home to mitigate their damages. Their problem is that they have no damages, the original transaction with the homeowner was fatally defective BECAUSE the pretenders wanted it to be that way and they figured they could get away with it. So far they are right. In most cases, the homeowner walks away without realizing his mortgage doesn’t exist, and the note is void, and that the obligation arising out of the funding of his loan is either paid, or the true creditor is more interested in collecting from the investment banker who sold garbage mortgage bonds than in trying to collect from individual homeowners. The fact that the true creditor doesn’t want to collect from homeowners is not a good reason to allow someone else to collect it.

Think about it. If the mortgages were valid, if the notes were enforceable, if the loans were properly underwritten, if the obligation of the homeowner was properly disclosed and linked with the investor lender — there would be no issue. In fact, there probably would be no foreclosures because the loans would have been viable and those that were not, would have been modified or settled. If the situation was “just a matter of paperwork” the paperwork would be cleaned up. But it isn’t. There are two primary ways to clean up the paperwork — go to the borrower and get a new signature or go to court and force the borrower to accept the new paperwork since the intent of the parties and the identification of the parties and the terms of transaction are clear as crystal.

The absence of any proceedings that would clean up the supposed paperwork mess gives rise to the obvious presumption that the banks, with their legions of smart lawyers, have not chosen to pursue those easy remedies. The only reason they would not choose a remedy that would clearly remove any doubt as to the validity of the loans and the truth of a default or delinquency is that they know they would lose if they had to present admissible evidence in court. In plain language they obviously know the loans are defective and paid in full and that they can’t win in court except by cheating. So they put a moral tag on it that the obligation is moral issue and that even if it is already paid off, and even if the the obligation a rose as a result of a fraudulent scheme, it should still be paid again. Is this any way to run a country?

38 Responses

  1. Hey Louise, thanks, it’s something we can’t let ourselves forget, no matter how much we want to trust again. There are people working these blogs who are working for the banks and pretender lenders. It’s scary, thanks for reminding me again.

  2. Ian. 5/25

    I experienced similar consternation on gradually learning I’d been selected to be a victim. Your post was really terrific and illustrative of THIS Alice in wonderlands shock at learning there was only one destination planned for me–foreclosure

  3. Neidermeyer:

    ABA Routing Numbers / ABA Numbers
    Accuity serves as the official routing numbers registrar for the American Bankers Associatoin since 1911


  4. Ian,

    WELL SAID!!!!!!!!

  5. tnharry- the preceeding remark to Louise regarding reading the contract sounds pretty good, but any reading of a mortgage by anyone would not really give anyone any knowledge of what is going on. And since all the adjustable rate mortgages and option arms were designed specifically to default, no one who is reading this site is supposed to have a home right now. There was no mention in my mortgage of notary fraud, forged signatures, including my own, nonexistent trusts, illegal appraisals with a promise to refinance in 6 months, servicers signing for a FedEx package with my check inside before the due date, but posting it late at least 6-7 times per year. And on and on. I also didn’t read anywhere that the customer service personnel would all be in India, even though the fax machine was in California, and that the people would be very difficult to understand. I also didn’t read that my mortgage would be sold to multiple trusts, with the loan numbers in the purported pool all mysteriously vanishing from one day to the next. So, even though I read every page of my mortgage, it really didn’t tell me anything. The pertinent information in the mortgage could have fit on a couple 3×5″ index cards. The rest was fluff.

  6. Concept… We signed the deal on a concept that property was going up Up n up…illusion by design to leverage the heck out of real estate with no controls since they were paid not to do their job… So bets on. Default swap, derivatives I don’t care if we read those docs onnthe table word for word no reasonable due diligence would protect the regular consumer we thought we were getting morgage Loan with shared risk Good will n all… signing meant total financial devastation for people like me now why would I do that with my eyes open. Tn you piss people off but it does serve a purpose lol

  7. you guys keep putting me in my place about this idea that there is no loan, and you’re borrowing money from yourself line of thought. i say consider the idea of unjust enrichment. if you didn’t “borrow” $400k to buy the house that you didn’t have $400k of your own money to buy, then how in the world did you get the $400k house? the idea that you have the house in your name but never had the money to buy it, yet you don’t owe anyone for it either is preposterous. show me one time that the argument has worked and I’ll go away.

    @Louise – oh please. your recourse was not to sign the contract. you could have read the contract but you apparently chose not to. your own decision not to read the contract doesn’t automatically make it fraud. again, there are many valid issues raised on this site and in the comments, but somewhere along the way the rational train of thought has been hijacked by the fringe

    @cubed – your comments have been among the most cogent and entertaining. don’t give up. at the very least BK would save your home

  8. tnharry said:

    “Why should I (or you) have a home with no debt on it today when I walked into a closing office and signed paperwork to buy a $400,000 home that I didn’t write a check for $400,000 to buy? There IS a debt, despite what the viewership of this blog wants to believe.”

    This is the biggest misconception that we are all conditioned to believe, almost from birth. That is, that banks “lend” to us and that banks create money. It is very difficult to believe or accept anything different than that because we are programmed to believe that and the language of finance is such that one can’t even really discuss this issue without seeming to accept this false paradigm.

    The best explanation of how we have been rooked into financing our own self-destruction is here:

    Read all the pages there. Read them several times. Break your conditioning. And no, I’m not saying that such arguments will be successful in court. Not at this point in time, anyway. But I point all this out because people feel such guilt for not “paying their debts” when there really is no reason to feel that way.

    In case anyone doesn’t feel like checking out the link above, here is a sample of the info contained at the link:

    “If I were to loan you $100, my assets would decrease $100. When a bank or other “lending” institution “lends” to you or anyone else, their assets actually increase!

    The Federal Reserve Bank of Chicago used to publish Modern Money Mechanics. They stopped largely because of this quote from Page 6, Last Paragraph:

    “What they [banks] do when they make loans is to accept promissory notes in exchange for credits to the borrowers’ transaction accounts. Loans (assets) and deposits (liabilities) both rise by [the amount of the “loan”].”

    Now, when was the last time you lent money to a friend and suddenly found you had more funds?

    So the “lending” institutions (including credit card companies) “accept promissory notes in exchange for credits to the borrowers’ transaction accounts.” What exactly does that mean?

    Accepting Your Promissory Note…

    Now, when the lending institution “accepts” your promissory note in exchange for credit to your transaction accounts, that means that they add money (they credit money) to your checking account(s), but not the one(s) that you know you have. The funds for the addition to the “secret” account(s) came from depositing your promissory note! (Except the credit card companies actually deposit your application/agreement – and monetize it even if you are not approved! Again, you provide the source of the funds that are deposited into your account.)

    How can they do that? Well, they’re bankers. Your promissory note is a note.

    Look at a dollar bill. It says “Federal Reserve Note” on it, doesn’t it? You bet. See, a “note,” according to The Dictionary of Banking Terms, 4th Edition, by Thomas P. Fitch, is “legal evidence of a debt or obligation.”

    That means that a “note” is “owing money.” That means that what we call “money” or “cash” today is really owing money.

    So since “money” now days means “owing money,” and your promissory note is “legal evidence of a debt or obligation,” (owing money) that counts as “money” and can be deposited.

    Anyway, all they’ve done is converted your promissory note into “funds” that they then “loan” back to you. And now you have to pay them again, plus interest? Huh? Where in the agreement does it say that you are providing the value (through the promissory note that they received from you) to fund your own loan? Is that a mutual intention? Is that what you agreed to? Is that written in the agreement?”

  9. Hi Ian,

    Thanks for your reply. No I’m not giving up. Unfortunately I just spend the last 3 days living in pain with a bad tooth. Got a root canal yesterday. Boy, that was a pain in the butt.

  10. neidermeyer – the documents you have hold the truth at the time they were issued and deposited and cash changed hands.

    The copies of the cancelled WITHOUT RECOUSE documents are what you need.

    Then a letter to the supervising agency who controls issuing the ABA#’s to validate at that date and time who the party registered actually was .

  11. tnharry

    It’s called Ponzi scheme

    In the old days someone laid out $400K. In the new days, the asset of the bank made them $400K. Its new math.

    ‘Servicers’ of Loan Portfolio $1Billion Dollars collects fees from consumers for $400,000, on one loan, and only paid the yield spread to Warehouse Lender.

    Should they get the house again just because they were safe in the Ponzi scheme? and you feel guilty as a good person and want to satisfy a debt you believe to exist.

    Ponzi Scheme:
    A fraud disguised as an investment opportunity, in which initial investors and the perpetrators of the fraud are paid out of funds raised from later investors, and the later investors lose all funds invested.

    Investors lured by appearance of high returns to put money into a fund or other investment.

    Early on investors are paid by diverting money from new investors. A real new investor of a Pension fund for example used to secure the ‘credit ratings’ on SEC side. The hard money in form of Global Securities already moved into a fictitous Issuing Entity paying $4 to every $1 (with no risk) seemed like a good idea at the time for 30 years!

    Back in 1995/1996 Commercial banks figured out how to take residential assets into securitized pools.

    Back in 1997 the gang created MERS to record the residentail transactions – warehouse lenders as intermediary funders, for example.

    By 2003 advent of Sarbanes Oxley they had to figure out how to not be accountable (CEO & CFO). I know based on research President of Wells Fargo Pete Wissinger last approval correlates to Sarbanes.

    By 2004 the refinance freenzy begins 2005-2006 out of control. Loans created for benefit of beneficiary of interest not consumer. The freenzy moved payouts from $3 to $1 to $4 to $1 by 2006 Fannie Mae purchasing on UCC side in agreements with ‘Wells Fargo’

    Loan#’s are sold at a discount to Warehouse Lenders who purchase loan#’s and funding deposited into Master Servicer Seller, funding ‘as Depositor’ Wells Fargo Asset Securities Corp. which Lehman Brothers puts on their books as an asset (the property) and did not lay any money out.

    Wells Fargo gets to collect all of the payments which are almost 100% profit.

    Structured Security Asset Corp is the SPV over SEC with Cede & Co c/o DTC beneficiary of interest Underwriter(s).

    Wells Fargo Asset Security Corp is SPV over UCC – MERS beneficiary of interest for nominee.

    Really is that simple.

    Now prove it. Get a copy of the Settlement Agent documents by legal request.

    MERS mimics DTC

    On UCC side, $1 Billion dollar portfolio of loan#’s to service on money never lent is huge.

    On SEC side, $1 Billion dollars potential to sell ‘certificates’ is huge.

    Do you see the mirror images yet?

  12. cubed2k- I have been reading your posts for some time now, I didn’t think you were the type to throw in the towel. Can you go pro se and just attack them on standing when you answer the NOD? Hell, it is worth a try. Have you pulled the instrument summary list at the county courthouse? Checked the signatures? Dates? Assignments of mortgage? MERS min #? Robosignors? Existence of entities? Are all the numbers right? I don’t like to see anyone drop out from Livinglies. Post here if help needed.

  13. Question for anyone here who knows…

    I’m using various web based ABA routing lookups and getting different answers than what I am expecting…. different answers on different sites.. I have sent an inquiry to the ABA and am waiting for a reply ,, (impatient)

    1.) What is the most accurate lookup site?
    2.) Are ABA numbers ever recycled or reused ,, is it possible the differing answers hold some truth?


  14. don’t know tnharry.

    Just received the servicers intent to foreclose if we do not make good on the balance owed of 34K. Benefi is fannie mae so they say.

    not sure what I will do at this point. Ignore the letter, let them go thru with foreclosure, probably have about 6 months then . then let them kick us out after they make us an offer to move for $3k.

    Or, try to fight it by filing BK. Maybe try quiet title. Maybe put forth a intent to sue motion. Not sure. Time is running out for me.

    But I do know we have paid 300k for this house over the course of 10 years, not including the upkeep, insurance, prop taxes we have paid. There is no equity. We refinanced like anybody else did to pay some bills. We are middle class to be sure. We have no other assest, no savings for retirement, we are in the 50’s. We are self employed but it’s essentially a job as no employees and we do the work.

    So I guess we paid rent and them some including the prop taxes and home insurance.

    Is it fair that somebody should get the rights to ownership of our home after all these years of 10 for which they have put nothing into it to keep the home alive which was built in 1938. I wou;dn’t mind a free home at this point in time. Shit I’ve been working all my life for somebody else, paying taxes, just living. I’m not out to get something for nothing, which is the actual definition of a criminal. So who is the criminal? I would love to talk to the actual creditor and see if we can work a deal. But the laws get in the way.

  15. Did the Gomez case in CA neutralize MERS and MIN#’s on ‘mortgage’ to mean consumers’ with intent signed deed of trust to MERS?

  16. Dear Louise,
    MIN# LPS NF ‘Warehouse Lender’

    First 7 digits MERS ORG ID

    10 Digits Sales Agreement

    Type in first sevent digits of MIN#

    Will reveal ‘member’ is this what the mortgage says?

    Origination is secret period where Loans sold at discount and purchased (funding from Warehouse Lender for who?)

    The wire transfer cashiers/check from Warehosue Lender payable to Settlement Agent.

    Like in California Settlement Agents responsible for disbursement of funding.

    What is interesting is the check treasury account located at SELLER of DISCOUNTED LOAN deposited into Corporate Securities Treasury of Wells Fargo Asset Securities Corp as Depositor for Master Servicer ‘Wells Fargo Bank NA’

    Why for art did not Lehman Bank FSB put their name and use third party to purchase funding to buy discounted loan?

  17. tnharry. They made us an unwilling unknown accessory to a crime called fraud in effect.

    Through their alleged fraud they turned our loans into unsecured debt.

    Sort of like a drug pusher using Candy coated with Heroin or Meth (and not telling the kids it is coated with drugs) and giving it out in elementary schools in order to hook kids on drugs.

    I was taught by my family as a kid that crime doesnt pay.

  18. California AG Harris promises to use False Claims Act in mortgage fraud cases

  19. @tnharry—it’s like commenter usedkarguy said …

    “Nothing left but an unsecured carcass of extinguished debts.”

  20. When I sat down at the closing table, there was already a MIN number on the mortgage. Let me say it again: before I signed my name to the loan documents, there was already a MIN number on my mortgage papers. What does that mean? It was already put into their so-called computerized system WITHOUT my knowledge. That alone, throws the whole scam out the window.

    I was not advised what the exact contract contained. A contract is not a contract if the borrower does not even know what he is borrowing and what the terms are. It is fraud. Fraud in a contract completely voids the contract. That is the law.

    If you borrowed money under false pretences, you do not have a contract. At the least it is predatory lending and at the most it is criminal FRAUD, which by the way is a felony.

    When you sit before an attorney, an appraiser, a mortgage broker, you expect your rights will be respected. I put down $15,000. It is gone.

    In the end, I think we can expect that many of the pretender/lenders are going to be exposed as the thieves they are. They are the ones getting free houses. We need to start sending them to jail, so this nightmare does not happen again.

    By the way, everybody, there are people reading and commenting of these blogs that are working for the banks and pretender/lenders. Just keep that in mind.

  21. I’ve asked my servicer for proof of conveyance—he ignores me because he doesn’t know what to say—

  22. and is that working for you Carie? Have you successfully quieted title to your house? Is there a pending foreclosure?

  23. tnharry—

    It’s your choice to pay a debt collector or not on unsecured debt—they didn’t give me a loan for a house—they gave me a line of credit that they “played” with—illegally—and didn’t disclose any of that to me.

  24. “Our entire real property system is based on a human being reviewing a document, signing a document and marching it down to the courthouse,” said Matt Weidner, a foreclosure defense attorney. “At some point there’s going to be an acknowledgement that the entire real estate and mortgage finance system is broken across the country.”

  25. Justice goes in two directions. Why should I (or you) have a home with no debt on it today when I walked into a closing office and signed paperwork to buy a $400,000 home that I didn’t write a check for $400,000 to buy? There IS a debt, despite what the viewership of this blog wants to believe. The issues about standing are completely relevant, but that idea that the debt has been satisfied just doesn’t work. And before you start laying into me again, show me one case where it has been successful. This is all great fodder for the comments section here, but does it work in the real world.

  26. Yeah, right, tnharry—-there goes Carie again, only interested in Justice—Dang! Can’t she think about anything else??? We would all be so much better off if we just swept the fraud under the rug—what do you say???

  27. Pete – don’t let @carie get to you. If your client is happy and they haven’t lost their house, it’s a win. No result short of jail for the banks is acceptable in her fantasy world.

  28. I have repeatedly asked and compled to see the original note & mortgage in open court, still nothing but continuances. This time the judge gave the lawyer for the bank 60 days to produce it. What is the next step after that if they can not.?

  29. About time …… That HSBC has been getting away with a lot of stuff with bogus signatories, including the ones involved in this case. As a matter of fact they (banks) are all more crooked than a corkscrew. FIGHT THEM TO THE EDGE OF THE ABYSS , AND THEN KICK THEM OVER INTO IT.

  30. Pete—of course the pretenders will seek removal to Fed Ct—because they see you and the judge as suckers who still believe there is a valid claim to the property somewhere!!!!

  31. Pete—WHY would modification of FRAUD be a good solution? Obviously, you have not been really reading and understanding what is going on, or you don’t really care…

  32. Neil,

    Just an update from Tennessee. I know that modifications are not your preferred solutions, but fair modifications that keep people in their homes and get them past the nightmare of dealing with these issues do satisfy my clients (homeowners). In that regard, a very careful judge here (Hamilton County) has ruled in homeowners’ favor in two recent HAMP cases; holding that a fair reading of the Guidelines and SPAs can lead only to the conclusion that borrowers are third party beneficiaries of this program. I am hopeful that these decisions will lead to fair modifications for many more area homeowners. Of course, the pretenders first response has been to seek removal to federal court on my most recent filings. I look forward to taking the fight there.

    Keep up the good work


  33. I haven’t heard a peep from my “servicer” since I told him I needed “proof of conveyance to the trust”…strangely silent…


  35. Happy to see this happening it’s about time now maybe the rest of the states will come on board.HSBC is not the only lender that pulls this however.They are all guilty as sin and need to be taken down.This is the only way we will win this war.

Contribute to the discussion!

%d bloggers like this: