California Appellate Court Sustains Dismissal of Borrower’s Complaint On Very Narrow Grounds


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See Calvo v HSBC

“The trial court did not err in sustaining the demurrer without leave to amend. Plaintiff’s lawsuit rests on her claim that the foreclosure sale was void and should [*5] be set aside because HSBC Bank invoked the power of sale without complying with the requirement of section 2932.5 to record the assignment of the deed of trust from the original lender to HSBC Bank.”

EDITOR’S COMMENT: This Court decision is wrong on the law even if it is narrow. A Deed of Trust is the same as a Mortgage and to construe it otherwise is to approve denial of due process guaranteed by the U.S. and California Constitution. These issues have been debated for years, and the courts have generally held that they know the definition of a mortgage regardless of what it is called and regardless of ornate provisions that might confer other rights.

In Florida the gimmick of a Contract for Deed was set aside as a ruse which is exactly the same situation in a Deed of Trust. The appearance of the conveyance of title to real property is a conditional transaction that does not presume the transfer of title from the homeowner and al for all other purposes under law the homeowner is not considered to be the trustee it is considered to be the real people who bought the home.

The following analysis taken from this case cited above is therefore wrong:

“a mortgage creates only a lien, with title to the real property remaining in the borrower/mortgagee, whereas a deed of trust passes title to the trustee with the power to transfer marketable title to a purchaser. The court reasoned that since the lenders had no power of sale, and only the trustee could transfer title, it was immaterial who held the note. (Stockwell, supra, 7 Cal.App. at p. 416.) “The transferee of a negotiable promissory note, payment of which is secured by a deed of trust whereby the title to the property and power of sale in case of default is vested in a third party as trustee, is not an encumbrancer to whom power of sale is given, within the meaning of section 858.” (Id. at p. 417.)”

Editor’s Note: If this line of reasoning were true, then the ability to take the property without due process would be complete and state sanctioned, which would clearly violate the requirement of court review. The finding that the failure to record is a matter for the state to decide, that much is true and this decision only applies to one narrow statute, which was probably a mistake for the appellant to have relied upon.

The convoluted reasoning in this case is precisely because of the confusion created by the securitization scam. we never had to consider seriously the possibility of actually splitting the security and the obligation and the possibility that the note did not accurately reflect the obligation, nor that the  mortgage lien might not be perfected as a lien because of the failure to adhere to other recording requirements that would satisfy the purpose of recording — to give notice to the world of who owns the property and what liens have attached.

This appellate court, like many trial courts is sliding down a slippery slope. It is creating an opening for uncertainty in the marketplace that the recording statutes are meant to close. The result is that nobody can issue a warranty deed without doing an exhaustive investigation into facts that are probably not discoverable to them. Nobody can take a warranty deed or expect title insurance to cover the issue either. It is bending the rules around into something that is unrecognizable.

90 Responses

  1. I don’t want him banned, just silenced 🙂

  2. @tn You’ll have to ask Yves why she banned him. She’s a very smart lady & there was definitely good reason.

  3. why do you want him banned? isn’t it better to hear what he has to say? the old “keep your friends close but your enemies closer” idea?

  4. @ leapfrog, actually, I was hoping for his head on a pike. Oh well, a good case of schadenfreude none the less.

  5. E. Tolle: You’ll be happy to know that Yves Smith banned him from Naked Capitalism. She isn’t too fond of bankster shills either.

  6. E. Toile,

    You are absolutely right: the mere fact that my ex’ property appears in MERS data bank may not mean much, there may all kinds of reasons for it and he will need to do his own research if he so feels enclined. What troubles me, though, is that we only now start to understand how much took place behind the scene.

    I was watching the Enron scandal and what lead to it last night. It was incredibly bad, it nearly destroy the entire ellectric supplies of California, the culprits were sentenced to 10 years or less and millions of PGE employees lost their entire pensions without ny of it being repaid.

    I cringe thinking about the ramifications of the MERS/banks doodeling and how long it will take to actually sort out, let alone correct.

    Guys, we really are in for the long haul!!!

  7. @ enraged, you wrote:

    “….but, when we checked the address recently in MERS data base, we found it and it definitely is a MERS deal. Don’t know when that happened and how but, at some point in time, it did.”

    That’s a mighty big leap of faith there, one I wouldn’t be inclined to assume is valid, if it were me. I’m not an attorney, but I’d suggest you look at the facts a little closer here. If MERS isn’t on your mortgage/deed, and we know it isn’t on the note, what rights would they argue? Conversely, even if they are on your mortgage/deed, and yet the originating lender wasn’t a bona fide member of MERS, again, what rights would they argue? Just keep in mind that that pig you think is in the poke might actually just be the remaining clumps of feces from when the pig was actually in the bag (if ever). Check for a piggy pulse before purchase or assumption.

    @ leapfrog….Pat is a moron, plain and simple. He is unnecessarily enamored by his limited faculties. During one of his archived rants, and I’m paraphrasing here as I don’t save his drivel for future reference (having said that, Pat, I’ll be more than happy to search and destroy figuratively speaking if in fact you should reappear and dispute this)…. he gloats about being able to investigate a PSA so cunningly as to leave the foreclosing attorney with an iron clad offense, leaving the homeowner in an indefensible position.

    The question becomes, if in fact anyone were to lose their home due to the gaming of the system by a little shlep like this, what would be the rightful punishment for the doer of this deed? Would repeated water-boarding be too nice? I think so. Keep looking over your shoulder Pat, as leapfrog said, it’s coming undone. And so will you.

  8. So, tn—are you saying enraged’s advice is correct?

    “All the court cares about is if you have made the payments.” (Pat)


    1) I can’t pay because I don’t know to whom I should and I’ve asked for 3 years without any answer.

    2) I can’t pay because I paid twice or three times in the past 2 years and, even though they cashed my checks (see their stamp right there? See the date, right there?), they lost my payments, never applied it to my account and charged me fees and lates charges. I want a complete accounting of what they did with my money I can prove I paid.

    3) I can’t pay because when I asked them to prove to me I owed them money, they ignored me. Not even the decency to answer my letters.

  9. E. Tolle: I agree with your sentiments about Patrick rabbiting on and on about “moral hazard” while his pals the banksters are sticking it to the taxpayers with their 16 trillion in secret loans and bailouts, so that the corrupt, criminal and incompetent CEOs can award themselves lavish bonuses. Talk about moral hazard.

    What kind of person defends bankster scum? Really, what kind?

    Here’s a clue Patrick: You can defend them all you like, but you will NEVER EVER be their equals. You are just a tool to be used by them. Its a club and you AIN’T IN IT and you will never be. Looks like we have the last laugh.

    And yes, Patrick, you and your bankster friends should be worried. The Ponzi is unraveling. Spreading your lying propaganda here about how homeowners will never win isn’t working. But it does tell me you are worried and I like that. I like that very much.

  10. @carie – I feel for you, but you’ve gotten so wrapped up in this that youre no longer seeing the trees for the forest. You can’t just tell the judge that youve requested Payment histories and been ignored. That’s not evidence of anything. Nail them down on discovery. Anything they don’t produce they can’t use at a trial. Make sure you understand the interplay of procedure and evidence to make little things like that suggestion work for you.

  11. Simonee,

    You mentioned that you don’t have MERS on your mortgage. How long ago did you purchase the property? My ex didn’t have MERS either originally when he bought the house in 1998 but, when we checked the address recently in MERS data base, we found it and it definitely is a MERS deal. Don’t know when that happened and how but, at some point in time, it did. And that also explains how people who flat out owned their home that they had purchased and paid for without loans or over 20 years ago ended up foreclosed: those homes somehow made it into MERS data base and became part of that horrendous mess.

  12. Maybe someone can enlighten me. CBSK has been out of business in most states since 2006/2007. Where did HSBC get the “transfer” documents from in 2008? MERS can only act for the principal (at least most federal courts have held that) so who directed them to transfer anything to HSBC?

  13. Carie,

    In theory, you make some good points and Boyko did accept that “unsecured debt” theory when he dismissed 7 banks claims in 2007. The thing is: you may be right but it doesn’t mean that what you propose to argue will work. As I mentioned earlier, people have gone public with their findings, among whom Lynn, in FL (60 minutes). Yet, and despite everything she uncovered and can prove, she is still embattled with the bank and hasn’t yet prevailed. I am not saying that she won’t. What I am saying is that, by wanting to run after every squirrel, you may very well squander your energy and end up barking at the wrong tree. You’re always better off singing one song but singing it well and loud. That’s what banks do: all they have is one song. Watch them fold when they are told to change tune…

    Now, that doesn’t that it won’t work tomorrow but you need to be careful to align with what has become common knowledge versus breaking new, untried or poorly tried grounds. Neil does make some good points too and has some revolutionary theories but, as far as i know, he doesn’t try cases. Makes a huge difference.

  14. Well, I’ll learn how to manipulate and entertain the judge while I say: “I have asked for a full accounting of where my payments have been going—and they ignore me…”

    Meanwhile—here’s the truth—as per ANONYMOUS—who has physical proof of this—(using Brian Davies docs as example):

    “Brian Davies attorneys claim 2 “facts” that are simply not correct — 1) that somehow “investors” funded the mortgage loan and 2) that if someone else is making payments on the loan the borrower is not in default.

    First, “certificate purchasers” are the banks themselves (security underwriters) and they only purchase a “pro-rata” share to a “pool” of cash flows —- that is all — they are NOT the mortgagee/creditor—the trust is assigned the loans from which the pass-through cash flows are derived—it is the DEPOSITOR (subsidiary), that owns the collections rights (they are not mortgage loans) and the Trust itself. The “certificate purchasers” (the bank security underwriters (another subsidiary) themselves), then repackage the certificates to “pro-rata” cash flows into CDOs that are marketed to security investors — who are also never the mortgagee/creditor. According to all PSAs — there must be a documented valid sale of the “loans”, with supporting Mortgage Schedule to the Depositor in order for any Trust to be valid. There was never any valid sale of loans — and the loans were never actually loans — they were collection rights.

    Second, since the “loan” refinances (subprime/alt-a) and jumbo new purchases were non-compliant and non-performing manufactured defaults, no funding at all was necessary (except for the cash-out for the loans). The warehouse lines of credit never actually transferred any actual cash for funding. These lines of credit were simply “credit lines” that the “Depositor” would provide to their correspondent lenders. Once the “loan” refinance origination was completed the Depositor would then reverse the “credit” owed by the correspondent (originator). This never involved any actual deposit of cash proceeds —- the “funding” payoff check is never “deposited” into any bank account. The check is routed to a security derivative clearing house — who then simply cancels the credit-line transaction.

    Third, it is not productive to state that since someone else was actually making payments on the “loan”, “albeit” not the borrower, that the loan is not in default. Courts do not care about this — they only care if the borrower is in default. However, if the actual party does not come forward claiming that the debt is owed to them, and the actual party cannot prove how they came to own the collection rights — borrower does not owe the debt to anyone. That party is never going to able to demonstrate that collection rights belong to them because they would have to divulge the above fraudulent process and that the “mortgage loan” from onset was not a mortgage but, instead, collection rights. This admission would also mean that the “debt” is unsecured and can be discharged in BK. “

  15. @carie – the copied sections below are proof that your untested theories can be dangerous. you’ve gotten joanne on board with your untested theory, potentially to her detriment. believe it if you want, and paste it on the board 12 times a day like you have been, but i’ll reiterate my suggestion to marilyn from the other day: add a line at the end of your post saying it hasn’t worked for anyone yet, and i don’t recommend anyone else try this…

    Joane, on September 17, 2011 at 10:41 am said:
    Thank you Carie. My plan is to send a QWR to my new servicer on Monday. I have a real estate mortgage, with a Power of Sale. If this is unsecured debt, could I get a lawyer to fight a foreclosure?

    carie, on September 17, 2011 at 9:00 am said:
    Yes, Joane, we have been and are being LIED to over and over—and the LAWYERS won’t even admit the truth when it is staring them in the face…oooooooo, ’cause then they might not make as much money because they can’t “string us along”…
    It’s like I’ve been saying—it’s all unsecured debt—and all the fake paperwork and BS that has been going on is just a MASSIVE attempt to cover up the FACT that it’s all unsecured debt…and steal houses…because the homeowners don’t know what the hell is going on. The trusts are empty, they’ve always BEEN empty—due to the FRAUD of false default and then collection rights sold over and over.

  16. Great advice Enraged! I’m hoping the answer to avoiding a judge lies in Administrative Process….

    I need some sound advice from you seasoned Freedom Fighters out there.

    I have a 1st that was assigned while in default back in ’09 while under duress under the threat of foreclosure . I signed a modification with the new pretender lender. I suspect that my original note was securitized as there are only blank assignments on my 2nd and nothing pertaining to assignment to the current lender on my 1st at the county recorder. The question is: if I signed this mod in ’09 have I established the pretender lender as note holder with the signed mod?

    Even though the chain of title was not perfected do I have recourse to force the issue of proof of standing of the pretender being holder in due course? I also believe a TILA violation occurred when the pretender set the reset date of the ARM 1yr earlier than the original note…could that be a point worthy of recission?

  17. Hi Carie
    You said: “I can sing—maybe I could find out first if the judge likes musicals?!?”

    “When trying to express oneself, it’s frankly quite absurd
    To leaf through lengthy lexicons, to find the perfect word.
    A little spontaneity keeps conversation keen
    You need to find a way to say precisely what you mean.

    dear kindly Sergeant Krupke You gotta understand
    money money money it’s a rich man’s world
    money makes the world go round
    Hear me, heathens and wizards And serpents of sin! All your dastardly doings are past,
    I have heard people rant and rave and bellow That we’re done and we might as well be dead,
    ho ho the wells fargo wagon is a coming down the street
    I like to be in America Ok by me in America Everything free in America For a small fee in America
    feed the birds
    all I want is a room somewhere
    food glorious food
    who will buy
    hand me down that can o beans
    just you wait henry higgins just you wait
    ev’rythin’s up to date in Kansas City
    its been a hard days night
    if I were a rich man
    whistle while you work
    here come the jets
    With me it’s all er nuthin’. Is it all er nuthin’ with you?
    remember the alamo
    folow the yellow brick road
    stayin alive
    put on a happy face
    puttin on the ritz
    what do the simple folk do
    To fight the unbeatable foe
    you’re going to hear from me
    fie on goodness fie
    we need a little christmas
    I’m singing in the rain
    The sun’ll come out Tomorrow

  18. Going back to judges…

    From what I have seen, whenever judges do dismiss actions from banks and give the house to the homeowner, it is because of:

    1) Banks attorneys’ arrogance: they talk over the judge’s head. Personnal offense. Judges don’t give a damn about the homeowner. They do care a great deal about seeing attorneys properly address them… Ego. “That’ll teach you to be contemptuous of the court (that is, me, the judge and authority in this room)” knee jerk reaction. Boyko, Ohio.

    2) Banks attorneys try to “drown the fish” by not answering specific questions or by answering too vagely for judges. No specifics, forged documents, vague or imprecise answers, no commitment to truth. Shack and Grossman, NY.

    Just study the trends.

    Homeowners may find out all kinds of facts and report them but until the judge asks the hard questions and gets frustrated with the lack of answers, he won’t find in favor of the borrower. Homeowners need to learn to “defer” to judges’ “enlightened” know-how. To properly manipulate judges, we must be incredibly humble. That can be learned.

    Otherwise, Lynn (in Florida) who put together so much investigation, wouldn’t still be fighting Deutsche Bank and her own foreclosure. She has the goods. She went on TV with it. Still fighting her own bank. Why? She’s not an attorney. So, use the infos you have to lead the judge to ask the questions but don’t do it yourself. Judges still believe that the homeowners are not qualified to address the court and other attorneys. Sad state of affairs but it is the truth. Judges have taken the position that homeowners are irreponsible. OK. Up to us to change that by insisting we want to pay… in exchange for protection from the court. The right person. Nothing should stop us from hoping for the free house, though (which I am…) but let’s not come across as though that’s the only thing we have in mind.

    We’re dealing with the good ol’ boys club. They have their own rules. We don’t know how to play the game and we weren’t invited in the first place.

  19. Simonee,

    Sometimes hard to find — look up Federal Reserve System — 12 CFR Part 226 — Regulation Z Docket no R-1378 — Truth in Lending.

    You may come with the Summary for Comments — Comments were taken and the “Rule” has codified — meaning part of the law.

    Look at “Section by Section” Analysis —

    Law is 15 USC 1641 — (g) is the Amendment — and the Fed Res Opinion of who is — and who is not the creditor — is now codified as part of the TILA Amendment.

  20. I wanted to add a couple of points I finally got, after several years of trying to figure out that mess my mortgage is: the best defense a homeowner can provide for himself is… to ask the right questions.

    At some point after I stopped paying my mortgage, my servicer organized one of those ridiculous bank P.R. “modification worshops” in my state. i had been turned down originally because I wasn’t behind and not “at risk of defaulting” (even though their records showed missing payments that they had misapplied and, technically, they were considering me in default). The servicer sent me Fed Ex requests to “participate”. Several of them. Must have cost them a few bucks in postage. Apparently, there was some urgency on their end… So, i went. With my file. And we started putting together numbers. And they asked me to sign here, here and there. Before I agreed, i asked a few questions.

    1) originally, i was paying Citi. I’ve done my homework and there is no satisfaction of mortgage from Citi recorded with the state. Before I sign anything, what garranties do you give me that Citi will not come after me later on?

    Answer: Trust me. They won’t. We have the assignment.

    2) Can i see it?

    Answer: We don’t have it here. We have it in file. That’s all that matters. We can’t legally do mods without it anyway.

    3) In that case, since you do have it “in file”, you won’t have any problem signing a document stating that, in the event my lender, MERS or Citi were to come after me, you BofA, agree to defend me, hold me harmless and indemnify me, right?

    Answer: There is no need for it. Everything is on the up and up. And besides, we don’t do that.

    4) Well, jeez, I don’t feel comfortable signing anything under those circumstances. I think I’ll have to pass. And really, honestly guys, I can’t sign something I haven’t seen and understood.

    Needless to say, I never signed anything. And I’m still not paying them.

    The thing homeowners need to remember is that being angry is not the answer. It’s only the motor that will get them into action but it must not be the motivation. All this is a game of cat and mouse. So long as homeowners believe that the bank can take the house, their language and their posture will be all wrong, they will shoot from the hip, they will allege unprovable facts and they won’t make any headways.

    We all need to get in the frame of mind that we want to pay our mortgage. We want to pay it TO THE RIGHT PERSON. Until the right person agrees to release us from anything that could arrise from anywhere else in connection with that loan they claim to own, we have to take the position that IT ISN’T THE RIGHT PERSON. Otherwise, there wouldn’t be any question and we would all get that release. Short and sweet.

    That is the kind of arguments judges understand and accept. That is reasonable. We don’t want to be left wide open to anything. In our shoes, judges wouldn’t either. And we can even add: “Your honor, I realize the amount of time and money such a legal action takes. The last thing I want is to be back in court because we didn’t cover all the bases and I’m sure that’s also the last thing you want. That’s why I’d rather be somewhat of a pest and insist on that release today. what with all the horror stories we keep reading and everything that’s going on today. At least, i will know that i am paying the right party.” Judges really believe that their time is much, much more valuable than the homeowner’s or the bank’s attorneys. But they don’t want to risk having missed something and they certainly don’t want to be exposed later on as having missed something that important or having aided and abetted a fraud.

    So long as homeowners view the judge as “the enemy”, they will keep on losing. So, unless you are a Barns or some cracker jack of an attorney with all kinds of wins under your belt, keep it short, simple, sweet and put the onus on the bank with very, very simple demands. And let them fold, dismiss, refile, hang themselves. Stay in the house, smile a lot and be assured that fewer and fewer sheriffs and cops have time to evict you. More and more of them have dealt with family members being evicted. They don’t make it a priority any longer.

    Stay away from securitization, stay away from notes, deeds, improper assignments. Don’t play lawyer: it is not your job and judges don’t like it. Remain the reasonable homeowner wanting to pay THE RIGHT PERSON. “judge, if you order me to pay that bank, I will absolutely comply. But you have to realize that there is a vey high likelihood that Citi will come after me. So, do you have the ability to decree that BofA is the only bank that can collect my money and that no one else has any right to it?” The judge can’t and he won’t. Too risky for him.

  21. Pat is right..all the court cares about is if you made the payments; but they (the courts) are WRONG…they should be ALSO be asking…”who are you to be asking if they made their payments?” “What is it to you if they did or didn’t make their payments?” And I do believe the courts are starting to ask those questions. And now the fun begins….

  22. I can sing—maybe I could find out first if the judge likes musicals?!?

  23. And of course, keep it simple, entertaining—and flatter the judge.

  24. Pat said:

    “All the court cares about is if you have made the payments.”

    enraged said—(for me to say):

    1) I can’t pay because I don’t know to whom I should and I’ve asked for 3 years without any answer.

    2) I can’t pay because I paid twice or three times in the past 2 years and, even though they cashed my checks (see their stamp right there? See the date, right there?), they lost my payments, never applied it to my account and charged me fees and lates charges. I want a complete accounting of what they did with my money I can prove I paid.

    3) I can’t pay because when I asked them to prove to me I owed them money, they ignored me. Not even the decency to answer my letters.

    Got it. It all comes down to the accounting. Therein lies the full measure of the crimes.

  25. Thank you enraged.

    Thank you E.Tolle.

    The battle to reveal the truth, the whole truth, and nothing but the TRUTH…continues.

    JUSTICE will come…whether the likes of Pat want it to or not.

  26. ANONYMOUS…do you have a link to the Fed Res that now lays out the definitions of creditor/lender, etc?

  27. Enraged…good analysis.

  28. Pat, I don’t have MERS involved so I will be the first to admit I have not followed its role in this as closely as others. I do the same on the arguments — there are so many ideas out there. You have to research it. First you have to know what the facts are that can be demostrated by credible evidence, then you have to see how those facts adhere or do not adhere to the law of the state in which you reside, or federal if applicable; then you have to find the case law to support your position. What I find puzzling about your comments is that you feel most homeowner arguments will fail. Perhaps most, but there are some that I feel will have merit and will win. ADOT’s done by the wrong parties, defaults being claimed by someone who has only demostrated putative ownership not actual ownership, and defaults being claimed by Trusts that can never incur a default – these are powerful arguments in themselves and at the end of the day — should win if the law is applied. Now….to get the law applied judges. Whole different story!

  29. Joann, I am not sure if a question was asked there. In regards to the funding aspect of this mess, I will be the first to admit i am fuzzy as to what consituties a real creditor from a lender from a broker. Trying to understand that; right now from what I see if the loan was funded by a warehouse line of credit — HUD says that is legal. If it is table funded (the real creditor loans the money through a 3rd party, as soon as the loan is funded it gets assigned to the real creditor but the 3rd party’s name is on the loan paperwork) that is not legal. I don’t know how you prove a table funded loan versus a warehouse creditor loan.
    State law rules in regards to real estate; each state has diferent laws and different foreclosure procedures. That is why you see different rulings. And when you look at the proceedings you see that different aspects of the foreclosure are being attacked – some successfully some not successfully. there is no one silver bullet. There is enough “truth” to what they (the banks) do to make it all appear legal — you have to peel back the onion one layer at a time to expose the fraud. It is frustrating and overwhelming. They planned it that way. Heck, the FHFA has a team of legal eagles working on their lawsuits and it took them three years to get their arms around the fraud to file their lawsuits. most of us are pro se’s. We are having to educate ourselves about our state laws – foreclosure and real estate, New York trust laws, internal revenue codes, and the whole bloody legal “process” of how to attack this. I sometimes wonder if it is worth the battle and then I take a deep breath and dive back it, because it now goes beyond just the house — the “tapeworm” is growing and I for one, want it dead – in the interest of myself, my family and the next generation. My sense of duty to the next generation demands I help fight and clean up this mess.

  30. Enraged I agree with you 100%

  31. Abby, the Deed of Trust has the power of sale clause; the Notice of Default is what “triggers” the legal process to exercise the power of sale clause. If you read CCC 2924 – while almost everything in 2924 can be done by the agents, it is very clear that ONLY the beneficary can incur the default. Specifically 2924(a)(1)(c)

    (C) A statement setting forth the nature of each breach ACTUALLY KNOWN TO THE BENEFICARY and of his or her election to sell or cause to be sold the property to satisfy that obligation and any other obligation secured by the deed of trust or mortgage that is in default.

    If the trust is showing it is current, what breach is known to the beneficary?

  32. Pat, you wrote:

    “I have debated saying something time and again. I just wrote it, and deleted it because it would serve no purpose.”

    That’s the first factual thing you’ve said. Just one small part of the problem is your love for bloviating far and wide on the internet. That simple fetish of yours allows one to easily uncover the myriad of ridiculous arguments, unfounded conclusions, and in general a severe lack of knowledge on the underlying issues that comprise securitization. When all of the above is bundled with the endless pitching of your “products” all across cyberspace, you reveal a portrait of a person willing to sell just about anything to anyone, anytime.

    The internet is, without a doubt, the cheapest way of selling goods the world has ever known, and a very efficient tool for the selling of worthless ones. You’ve proven that concept in spades. Your chiseled in cyber stone vacillations, one minute for TILA/RESPA, the next against, clearly shows your shift from hawking your audits first to homeowners, then to the bank’s attorneys. As to your knowledge and experience level that you love to write about, Yves Smith suggested that you learn the basics of securitization before attempting to discuss it on a social platform, even if only in the comments section. She’s a wise lady.

    But thanks to your endless pursuit of a buck in cyberspace, your past rants reveal your true nature of one holding curious resentments towards borrowers….a very sinister abhorrence for those that find themselves facing homelessness or are simply down on their luck due to job loss or what have you. You resent being called a banker shill, and yet you seem to reach a point in every debate where you finally snap and conclude rather forcefully that it’s all the fault of the borrowers….as if we the people got together in the ‘90s and decided to pull one huge con over on the hapless bankers who were just selflessly serving their communities with low cost loans as per Congressional mandates.

    Your words follow, and these are all I cared to copy and paste. There are whole libraries of your insanity available at the click of a mouse on the web…..

    ~ Moral Hazard? The Hazard is that most of these people knew well what they were doing. And they chose to do it anyway. At best, they were “willing victims”.
    When does Personal Responsibility come into play? When do they take responsibility for their own actions, instead of blaming everyone else for their own errors.[sic] Of course, it is easy to play the victim card, instead of accepting responsibility.
    For anyone who thinks that I do not know what I am speaking about, I have examined over 4000 sets of loan documents, talked with thousands of homeowners, hundreds of attorneys, and even banks.
    I originally was one of the “leaders” in homeowner defense, but I ceased representing them because most had committed their own fraud. As well, their attorneys were misrepresenting what could be accomplished, and I would not partake in that just to make money.
    The homeowners who file lawsuits to stop foreclosures are generally frauds themselves. They want to cancel the debt, and think that they can do so by claiming TILA violations. I just “love” those bs claims. “The finance charge was understated by $100, so I rescind the loan.” And they want the home for free.
    Same with the MERS and Securitization arguments.
    The bottom line is that it is time for people to take responsibility for their own actions. Live up to their obligations. And if they don’t want to do that, then be foreclosed upon and start over.

    Pat, I’m not nearly as understanding and forgiving as most here. My only words to you are…go fuck yourself.

  33. @ Pat,

    I understand exactly how you feel: it’s extremely difficult to convey what you know to someone who: 1) cannot see outside of his little box and 2) feels under attack anytime someone doesn’t agree with him/her.

    From handling serious legal matters for years from the defense side and monitoring trials (defense side but not as an attorney), I have seen times and times how short an attention span attorneys and judges have and how difficult it is to keep them captivated long enough for them to actually “consider” what you are saying. In my experience, the best results have always been when the plaintiff had 2 or 3 simple statements he kept on repeating and would not bulge from. That’s what banks do. That’s what homeowners MUST do. As soon as plaintiff start running all over the place with securitization, PSA, DOT, note v. mortgage, etc., judges are lost and they do not like to admit that they didn’t get it. Judges have egos. Huge ones. Deal with it but don’t ignore that fact. Jusges get very depressed when they didn’t get something that everyone appears to be getting (even though most bank attorneys don’t get it either and focus on the same point over and over: “we are owed money, the borrower didn’t pay us. We want the house”.

    A judge is likea very little child with lots of insecurities (will he be reversed on appeal if he goes with his heart and compassion v. hard and harsh justice in this case? Will he be taking advantage of if he shows compassion? Will he be re-elected next year without the big contribution from that bank? And what about the golf tournament next week with the bank’s qttorney? What about that smear campaign from so and so? And there is that little incident with the secretary who complained to H.R….) and with a lot of power: you must be patient, you must flatter, you must amuse and entertain him, you must actually make him see the comical in the banks position. If you talk over his head, you will get nowhere. If you treat him like a mental case or you question his motives, forget it. En-ter-tain him. How did Boyko resolve to dismiss 7 foreclosures at once? Banks attorneys were talking over his head and he got personally offended. Nothing to do with the homeowners. Banks had had the nerve to disrespect him. That’s as simple as that!

    Carie is very fortunate right now that her servicer hasn’t pursued farther yet: she wouldn’t last 2 weeks. She needs to get back to basics: 1) I can’t pay because I don’t know to whom I should and I’ve asked for 3 years without any answer. 2) I can’t pay because I paid twice or three times in the past 2 years and, even though they cashed my checks (see their stamp right there? See the date, right there?), they lost my payments, never applied it to my account and charged me fees and lates charges. I want a complete accounting of what they did with my money I can prove I paid. 3) I can’t pay because when I asked them to prove to me I owed them money, they ignored me. Not even the decency to answer my letters. I want to know how come I paid Citibank 2 years ago and then, all of a sudden, I have to pay BofA. I need to protect myself and Citi never sent me anything saying they won’t try to collect from me later on. I need to protect myself here. If I keep writing and nobody answers, the last thing I can do is withhold the money. So that’s what i did. That’s what you would have done, your honor.

    Everything else is too complicated and cannot be thrown at a judge right off the bat. Judges understand the rule of “r”s: are those the right borrower, right lender, right parties, right amount? If anyone of those is amiss, then focus on it but very simply and directly. “I did borrow $150k years ago but they lost 3 payments! So, I can’t say how much I owe anymore and they won’t send me the accounting!!!” “I did borrow from Citi years ago but they won’t give me anything in writing showing why, all of a sudden, I have to pay BofA. They sent something that makes no sense to me, they won’t explain it so I can understand and they want money I can’t expalint I owe to THEM” (Judges have the same exacts questions. They will not hesitate asking the banks attorneys: “So, what do you anwer to those questions? What documents do you have and how do they play into thais situation?) “I want to pay, don’t get me wrong. But I wrote them 11 letters and they never, ever answered me until I got an attorney. Well, I can’t pay both a mortgage I can’t say for sure to whom I owe AND an attorney they forced me to retain because they wouldn’t give me the time of day. So, now, after 11 letters and 12,000 in attorney’s fees, I want answers. And so do you, your honor. because, I don’t know if you have your parents still but my mother is going through the same thing with her reverse mortgage…” Getting a judge’s attention and bringing him to wanting to look into that mess is the toughest thing to do. That’s why if anyone can go all the way to trial before a jury, you are much, much better off.

    Anyway, all this to let you know that I understand how you feel and yes, there is a lot of ignorant B.S. being thrown left and right on this site. Until people go through it, all they can do is shoot from the hip. Lot of that in here.

  34. Pat

    The reason you cannot find “conclusive proof” is because you are limiting yourself to the “loan” in question. You need to go back further – especially for any subprime “refinance.” If you do not — you are only continuing the fraud for your “homeowner client.” And, who is your “other” client??? Who really pays you to continue the fraud against your “homeowner client”??

  35. Yup.

  36. Carrie you are right this Pat reminds me of Muamar Ghadaffi and Fidel Castro. You ask them a simple question and they go on and on and on and dont answer your question.

    Pat you are on the wrong side of history.

  37. Carie,

    I have debated saying something time and again. I just wrote it, and deleted it because it would serve no purpose.

    Now, I just wrote another reply and deleted it. The simple fact is that you are not open to any reasonable discussion. Instead, you want to present theories that have no basis in fact. What is worse is that when you present your theories, you may influence someone to follow your scenarios and that could cause them more harm than good.

    Maybe you work for the banks. How is that for a conspiracy theory?

    Now, back to work for my real homeowner client, who I can truly help.

  38. Where does the payment go? I have to do a complete analysis on a loan to determine where. It could be a portfolio loan. It could be Fannie Mae, Freddie Mac or a Trust.

    All of you are asking questions that cannot be answered on a rhetorical basis.

    If you want to argue that the wrong party is collecting, then you must present a credible argument. Even then, you are not going to get a complete FAS accounting. Thinking that you can do so is just wishful dreaming and nothing else.

    I deal in practical application, not theory. I gather the evidence available, and render an opinion upon what the evidence says. I don’t speculate, theorize, or guess.

    If you ever find yourself on the stand across from opposing counsel who is grilling you about your findings, you quickly learn that the only thing that matters is what the facts are, and where they lead. You can form an opinion based upon the facts, and you can present the opinion if the facts back you up.

    I would NEVER try to argue that the wrong party was receiving payment, unless there was conclusive proof. Conclusive proof would mean that the money could be absolutely traced and that lender A was supposed to receive the money, but it was being paid to lender B. I have yet to see a supportable case in over 10k loans reviewed.

    If you have never been in the position of being on the stand and being grilled by opposing counsel, then it is likely that you may not be able to comprehend where I stand. For example, for the trial this coming week, I have to prepare for 40-60 hours to get things right. I must know exactly what the facts are that I am testifying to, the documents showing that the facts exist, and how they relate to my conclusions. I must be so well versed in the subject that I can anticipate every question I will be asked, and what my answer will be.I cannot afford to be caught by surprise. All of this, for perhaps two hours of questioning. (And when I am done, I am physically and emotionally drained. I will need to take the weekend completely off, probably three days, and go do nothing, probably sitting on the bank of a river fishing, and not even baiting the hook, just to relax.)

    If I present an opinion that cannot be backed up by factual evidence, then my entire credibility is lost. That could cause the case to be lost. I cannot allow that to happen and to be my fault.

    That is the one reason why my employees think that I am an asshole for accuracy. I don’t allow mistakes. They reflect upon me, and if I have to go to court and I haven’t caught their mistake, I am toast, and so is the client.

    For this same reason, I come here to post what I know. Most of you are fighting foreclosure, and you are only hearing a portion of the story. Even worse, that portion is being misrepresented to you.

    Then, you have people presenting ideas and theories that have either never been tested in court, or have been blown out time and again. Yet, you listen to these people.

    I know the arguments that a lender will make against your claims. And, I know how the courts will almost always respond. You need to know these facts.

    You need to know what you really face, so that you can truly evaluate your situation. And only then can you make a reasonable and educated decision. Then, if you want to pursue a court action, that is your right. But doing so without full knowledge of what you are facing is just absurd, and that is the bulk of my differences with Neil, outside of theories that have never been tested and won in court.

    Now, I going one step further tonight. I also know that if the lenders ever “got serious” and filed counter suits, then many here would be caught with their pants down. I have talked with over 25 people who post here at one time or another. I have done exams for some, and I have turned others down flat out.

    I can review any set of documents and I can almost always prepare a credible defense for lenders against the homeowners. These defenses would be almost insurmountable for homeowners. The good news is that lenders are not going that route. They know that the homeowner has nothing they can recover, so why bother?

    What happens in the courtroom is serious business. It is all about winning and using the laws of the state to win. There is no room for untested theories unless you want to martyr yourself.

    There are a few attorneys who post here that you should listen to. Tnharry is one of them. He understands the system and the arguments, and based upon what I have read of him, he is a stand up guy.

    Most attorneys doing this business, I would never work with. They misrepresent what is occurring, and what can be expected. They promise, but do not deliver.

    An example of this is the Kramer situation whereby he was promoting Mass Joinder lawsuits. When people first started posting about this strategy, I posted that this was not viable. Of course, no one paid attention.

    If you have not heard, the CA BAR has shut Kramer down, along with associated entities. Other states are doing the same.

    Michael Pines is another attorney that received attention here. Again, I warned about him. He has now been convicted on various charges in LA County, and facing the same in other counties. (I have a couple of personal stories about him from my own experiences. Fortunately, I never did work with him.)

    What I am really trying to get across is that you must look at things in a realistic manner. Know what is likely, and then base your decisions upon that. Don’t “play the lottery”. Set reasonable outcomes you desire, and then seek to achieve those outcomes. Don’t wish for the impossible.

  39. joann—ANONYMOUS’ QUOTE:

    “…The Depositor owns the Trust — and while the Trust was performing – the Depositor, on behalf of the Trust would be the party to bring the action. However, these Trusts have now been brought back on parent corp. (to Depositor) balance sheets because the Trusts as “off-balan­ce sheet” SPVs — have been effectivel­y dissolved. The only tranche holders to remnants of the Trusts is the US Government or the Depositor (parent) itself. You should be preparing to demonstrat­e that the loan was not validly conveyed to any Trust (which they were not). Do this by requesting the Mortgage Schedule which should accompany the Mortgage Loan Purchase Agreement (MLPA) — and the MLPA cannot be an “intent” to sell — it must be validly executed and notarized (we know about those notaries). And, importantl­y, if MLPA and Mortgage Schedule can be proven, servicer must prove that all default payments have been paid to the trust on borrower’s behalf. If not, loan has been removed from the Trust with collection rights sold/swapp­ed to a Third Party….they can not prove anything.”

  40. Pat won’t answer…because he knows it’s going to a DEBT COLLECTOR.

  41. Thank you Anonymous.

    and Thank you Carie


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  43. Oh yeah — these guys always ready to sell “the bridge.”


  44. Maybe Pat and the Judge want to sell me the Brooklyn Bridge again.

  45. Second — The A Man, — where are the mortgage payments going???????

    Pat — can you answer — forget foreclosure “law” — or lack there of — for a moment —

    Answer The A Man — where are the mortgage payments going??????

  46. I will make it clear again. I just sent a check to BofA They deposited into their account. They claim they are a debt collector. Where does my Check go from their. To Bank of New York Mellon to Wells Fargo trust to a fisherman in Iceland?



    The Judges in California are bankrupt just like the State of Calirorna and the Municipalites of California. They are Economically and thus Morraly bankrupt.

  47. “Assignment of Trust Assets; Review of Files by Trustee……..At the time of issuance of any series of securities,……..”

    “With respect to mortgage loans registered through the MERS® System, MERS® shall serve as mortgagee of record solely as a nominee in an administrative capacity on behalf of the trust and will not have any interest in any of those mortgage loans.”

  48. Pat you are not answering my simple question. I just made a mortgage payment Sent a check to boA homeloan. Where did my money go? I am current on all my payments and I have a half a million dollars under my mattress for arguements sake.


    Pat you are a again rehashing the arguements of a snake oil salesman or woman. And I dont care if its a judge asking the question? It is irrelevant. And Pat I know some Judges are asking these criminal questions.

    You are not answering my simple question? Where did my last payment go?

  49. joann,

    The A Man is right — the trusts have been torn apart — with no waterfall structure remaining. Once the waterfall structure is destroyed — as it has been — the trust is dismantled — in effect — gone. Technically called — a “Trigger Event.”

    Thus, no current payments are being passed through on any subprime trust that has been torn apart. No payments are being transferred to the stated trustee. Current payments are going to a “rabbit hole.” — undisclosed by any entity — including the the US Government — as to Maiden Lane — who purchased remnant “tranches” that could not survive on their own.

    So — where are current payments going ?? Where are any payments going – including modification payments — granted or not??? No where that you would know — no where that anyone would know.

    That — joann — is part of the big fraud —

  50. The A Man-

    “please explain where the payments we make to BofA servicer go?”

    Good question – so are they still paying a trust or not? If not who are they paying and how much? This should be disclosed to investors and borrowers and it should not take a court order to see it.

    Did you know BofA is no longer the trustee for any securitized trusts? Last Nov-Jan US Bank became the successor trustee to BofA for the trusts for which BofA was the securitized trustee. Many servicers. Many originators. Many sellers. US Bank is now trustee for the most trusts followed by Deutsche Bank and then New York Mellon.

    One example from a recent newspaper: “and WHEREAS, the beneficial interest of said Deed of Trust was last transferred and assigned to U.S. BANK, NATIONAL ASSOCIATION, SUCCESSOR TRUSTEE TO BANK OF AMERICA, N.A., AS SUCCESSOR TRUSTEE TO LASALLE BANK, N.A., AS TRUSTEE FOR THE (trust name) who is now the owner of said debt;”

    Interesting to see how the language changes in newspaper foreclosure notices over time by different “lenders”.

    Also – why the “last transferred and assigned to”. Thought mortgages were already assigned to the trust. Trustee holds no “beneficial interest”. Investors got that already by way of the Depositor suposedly. Read the trust documents. Or maybe I am confused about what constitutes “beneficial interest”.

    “With respect to any security backed by a Mortgage Security, the depositor will transfer, convey and assign to the trust all right, title and interest of the depositor in the Mortgage Securities and related property…………….The depositor will cause the Mortgage Securities to be registered in the name of the trust, the trustee or its nominee, and the trust will concurrently authenticate and deliver the securities. The trustee will not be in possession of or be assignee of record of any underlying assets for a Mortgage Security.”

  51. Pat,

    PSA allows for valid transfer only . MERS is not a valid transfer — IF chain of title was never completed and effectuated. And, in all of subprime securitization — chain of title was never effectuated. Thus, MERS as beneficiary is never effectuated. Of course, no beneficiary is ever the creditor — so MERS sould never stand, legally, as the real party in interest anyway.

    While some courts may favor to give MERS creditability — this is disputed by other courts — and would not survive Supreme Court of the US review. Further, new law prevents MERS standing as creditor/lender. US Supreme Court would have to strike down the TILA law — in order to sustain MERS rights as a “creditor.”

    We have just not gotten there yet. It is coming– but will take astute legal backing to promote. Not getting there yet — because certain parties are still head buried in 100 year old laws. Nevertheless — it is coming.

    As for your theatrical conversation — “YOU” needs to ask — “payments to who” — “Joe Blow — down the street???”

    No one should make payments to any party that is not legally documented as the creditor. Judges — much to your disliking — are starting to get this. Why?? if you pay Harry — but you real owe Joe — you have not paid at all — you owe indefinitely — to some unidentified con-artist.

    And, because your loan was likely a false default debt to begin with — when you refinanced — your loan is fraudulent and unsecured. This is the fact. Discharge in BK.

    But, Pat, very sorry that will lose income on this. This will unfold eventually — and you will lose money. And, really, I hate to see people lose money — they support economy too. Understand that you are trying to make a living — like so many others. And, in a certain way — feel bad. But, you cannot make a living on fraud — does not work that way — eventually all surfaces. Fraud does not support an economy.

    My advise — work the government to insure that modifications are in the right party name — and with valid principal reduction and current market interest rate. Tell the government that you are willing to cooperate. Tell them — we are the creditor — and want to help people stay in their homes — and we are willing to be upfront as to who we are — and wiling to rectify the origination fraud.

    Pat — that will help. You need to come forward. Could be hero — for the US economy — if you come forward and cooperate. That is what we need.

    Do it.

  52. The key is identifying the “lender”/”creditor” — whether a mortgage or DOT. And — we know have law — that states what is — and what is not a “creditor.”

    Ages old state law did not anticipate securitization — they did not contemplate definition of creditor/lender — rights of assignment — or any other rights distinguished by securitiztion fraud. .

    This was the purpose of the Fed Res to cause an opinion as to definition of a creditor/lender – to comply with the Congressional Act that changed the TILA standard definition of creditor. And, the intent that the actual creditor be identified. As a result, the definition has been changed — and years old state laws have been preempted. To date, new law is the is the only legal definition of “creditor/lender” available. And, it preempts state law definition.

    Of course, if you do not inform the court of this, they will remain in agreement with ancient law that never anticipated the advent of collection rights securitization that fraudulently corrupted.

    All has changed. And courts need to remain current. If attorneys are not alerted — and are not current — neither will be the courts.

    Stick with old law — you stick with covered fraud.

  53. A-Man

    “Pat or anybody else

    Mers is not the issue Pat please explain where the payments we make to BofA servicer go? if The chain of Title is broken how do we know the payments are going to the correct creditors and all the creditors?”

    Here is the problem for you:

    1. You are arguing that the Chain of Title is broken. How is it broken, especially if MERS is involved? The PSA allows for MERS. Also, UCC Code allows for transfer of the Note and Deed by blank endorsement. You must be able to present a credible set of facts showing a broker Chain, and this is not possible in most cases.

    2. Your argument is about “fraud” in relation to where the payments are going. You have a “heightened level of pleadings” to fraud allegations. That means that you will have to specify where the fraud has occurred, with examples to back up your allegations. You cannot go into court and say that the payments are not going to the correct party without proof. All the court cares about is if you have made the payments.

    3. If you come into court claiming that the B of A payments are not going to the correct party, here is what I would say, as a lender’s attorney.

    “Your honor, Plaintiff is stating that he doesn’t know where his payments are going. However, as we have shown, he has not made a payment in the last year. Therefore, it does not matter what he asks because it is immaterial to the fact that he has not been making payments”

    Your reply. “I haven’t been making payments because the right party may not have been receiving them, so I stopped.”

    Judge: “What have you been doing with the payment money that you have not been making?”

    You: “What do you mean?”

    Judge: “How much money do you have in savings?”

    You: “$500.”

    Judge: “How much is your monthly payment?”

    You: “$2350 per month.”

    Judge: “You have not made payments for one year, yet you have only $500 in the bank? Where did the rest of the money go?”

    You: “I spent it on the attorney.”

    Judge: “How much does the attorney charge?”

    You: “$3500 retainer and $1000 per month.”

    Judge: “When did you hire the attorney?”

    You: “One month ago.”

    Judge: “That would be at the most $4500 you have paid for the attorney. One year of missed payments is about $28000. What happened to the rest of the money?”

    You: “I don’t know. I guess I spent it.”

    Judge to Lender Attorney: “I will have the answer this afternoon.”

    What do you think that the answer is going to be?

  54. Pat,

    State law is preempted by federal law — we have new federal law. In fact, congressional intent of the new law was to make sure that borrowers know their creditor — and can negotiate with that identified creditor to resolve. That was the congressional intent. May not like it — but it stands. And — it preempts years of state law.

    Just — have to bring that federal law in. Do not bring in — will not be addressed.

  55. Deed of Trust:

    “…The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times ……”…”Security Instrument” means this document, which is dated….together with all Riders to this document.”

    No ( ) added.

    “Where a power to sell real property is given to a mortgagee, or other encumbrancer, in an instrument intended to secure the payment of money, the power is part of the security”………

    “….”Upon payment of all sums secured by this Security Instrument, Lender shall request Trustee to reconvey the Property and shall surrender this Security Instrument, and all notes evidencing debt secured by this Security Instrument to Trustee. Trustee shall reconvey the Property without warranty to the person or persons legally entitled to it……”

  56. Pat or anybody else
    Mers is not the issue Pat please explain where the payments we make to BofA servicer go? if The chain of Title is broken how do we know the payments are going to the correct creditors and all the creditors?


  57. Simonee,

    Thank you for your kind words.

    Most people think that I am a shill for the banks, but that is absolutely not true. I was one of the first people to work with attorneys in Ca in foreclosure defense, and there are several arguments that I have put together for attorneys and are quoted in cases and where TRO’s have been obtained. As well, one of my arguments on how to present YSP found it to the CA Appeals Court and now is a way of proving that YSP can be a fiduciary duty violation.

    Currently, I am preparing for trial next week, serving as Expert Witness for a homeowner going after a broker. This is a straight fiduciary duty and fraud case. After that, we go after the lender for lack of due diligence in an SBA 504 loan. And then in December, I am a case consultant with a bank, going after a mortgage banker for fraud issues. So, I have been around the block.

    Originally when I started doing this, I wrote a series of articles, one which was titled “The Trouble With MERS”. This occurred in Sep 09. I outlined all the issues I knew that existed. You would find it to cover about all issues except the forgery that came to light.

    When I wrote the article, I was genuinely “conflicted” with regards to MERS. I knew what was in the DOT, the issues of Agency, etc. I could not make up my mind as to whether it was legal or not.

    As time went on, and I researched into things more, going not just into MERS agency, but looking at other types of agency rulings, I began to see that MERS was likely a legitimate agent of the beneficiary, at least in CA, and in many other states. (It would all depend upon state statutes regarding agency.)

    When I formulate a position now, I take a sheet of paper and draw a line down the middle of it. On the left, I take the pro position, and on the right, I take the con position. I put not just the arguments, but also statutes and case law to support each side. Then, I come to a decision based upon statutes, case law and the arguments.

    This process not only serves to “clear my mind” and allow me to develop a position, but it also serves another purpose which the attorneys that I work with fully appreciate.

    When attorneys have new issues or arguments to work out, they call me. We actually “role play”, with me taking the opposite side of their position. This allows us to see if their arguments have merit, and if they do, then the attorney is well prepared to fight the arguments of the lender’s attorney. If the argument has no merit, then the attorney does not use it.

    When someone here proposes a new argument, one attorney and I will completely tear the argument apart. We look for the good and the bad, and attempt to determine validity. Unfortunately, almost always, we come to the conclusion that there is no merit to the claim. (BTW, this is the best and most dedicated foreclosure attorney I know.)

    I am now actually involved in changing my business model. That is because most of the homeowner arguments are going to fail. The best that can be hoped for is a loan modification, and for homeowners, I have created a new strategy to assist their attorneys in achieving that goal, as well as in debt deleveraging.

    As well, I am focused upon how to restart lending in the Housing Market. I have developed products that will truly evaluate a borrower’s ability to repay a loan quantitatively, and can do the same for a loan modification. This product is important in that it should prove instrumental in determining the ability to repay, and whether a loan or a modification should be granted.

    For me, it is now time to look to the future, and how to ensure that this never happens again.

  58. Simonee et al-

    You said: “The Deed of Trust has a “power of sale” clause that may be exercised – not if you miss payments but if the beneficary has incurred a default. BIG DIFFERENCE.” Excellent point.

    Sorry for a naive take on all of this. Sick of the convoluted rulings by “respected court that has many brilliant minds (on the bench and behind the bench) researching the law.” Conflicting rulings taking place daily accross the land. Lender, Beneficiary, Deed of Trust, Lien, Note, Encumbrancer, Trustees plural, Holders plural, Owners plural, Custodians, Serivicers – all mixed up. All getting interpreted differently by different courts and entities. US and State Constituions, other Federal laws, State laws, Tax laws, UCC, PSA’s, New York and Delaware Trust Laws – all mixed up.

    Doesn’t it come down to first who advanced the funds for the loan secured by the property and then who purchased that party’s interest for “value” and that “value” has to be something that can be proven? That’s who gets the payments or the house – that’s the deal? That is who is damaged by non payment. Follow the money chain of title -paper chain of title is supposed to reflect the money that changed hands for a loan secured by a piece of property, not some undisclosed kidnap-human traffic-slave ownership of a deliquent debtor just because he signed a paper that the kidnapers now say is still owed to someone-anyone -them. It’s theft of home and life.

    Which laws trump the other laws? If the securitization took place (which arguably it did not and that is why there was no conveyance to trusts) – certificate investors live all over the globe. They hold pieces of homes in 50 states. Or not.

  59. Simonee
    is that the exact wording in your deed of trust? can you claim that is the same exact wording in every California deed of trust?

  60. Freaky, isn’t it? Sounds like science fiction…but it’s REAL.

  61. Geez Carrie…Fitts scares the hell out of me. Not only by what she is talking about it, but the accuracy in which she details what is happening.

  62. The Deed of Trust has a “power of sale” clause that may be exercised – not if you miss payments but if the beneficary has incurred a default. BIG DIFFERENCE.


    A deed of trust is the legal document that gives your mortgage lender a lien on your property. The deed of trust authorizes your lender to foreclose and sell your home if you don’t make your mortgage payments on time.

    California lenders can choose to use either a mortgage or a deed of trust, and most use a deed of trust because foreclosure is easier under the deed of trust then under a mortgage.

  64. Before everyone gets all warm and fuzzy after that interview with the new head criminal at MERS, re-read the following. The audit in question was performed by McDonnell Property Analytics, for John O’Brien, register of deeds in Southern Essex County, Massachusetts.
    McDonnell’s Report includes the following key findings:

    • Only 16% of assignments of mortgage are valid

    • 75% of assignments of mortgage are invalid

    • 9% of assignments of mortgage are questionable

    • 27% of the invalid assignments are fraudulent, 35% are “robo-signed” and 10% violate the Massachusetts Mortgage Fraud Statute

    • The identity of financial institutions that are current owners of the mortgages could only be determined for 287 out of 473 (60%)

    • There are 683 missing assignments for the 287 traced mortgages, representing approximately $180,000 in lost recording fees per 1,000 mortgages whose current ownership can be traced

    McDonnell told O’Brien… “What this means is that the degradation in standards of commerce by which the banks originated, sold and securitized these mortgages are so fatally flawed that the institutions, including many pension funds, that purchased these mortgages don’t actually own them because the assignments of mortgage were never prepared, executed and delivered to them in the normal course of business at the time of the transaction. In a blatant attempt to engineer a ‘fix’ to the problem, the banks set up in-house document execution teams, or outsourced the preparation of their assignments to third parties who manufactured them out of thin air without researching who really owns the mortgage.”

    O’Brien asked McDonnell what this means for his constituents. “It is vitally important for your constituents to know that if they are in foreclosure now or if their homes have been foreclosed upon, they can stop the foreclosure from proceeding, or institute a court action to vacate a completed foreclosure. The Massachusetts Supreme Judicial Court has established the law of the land in its decisions U.S. Bank, N.A. v. Ibanez and Wells Fargo Bank, N.A. v. LaRace and I can tell you that every single assignment of mortgage that was recorded for the purpose of foreclosing the homeowner is invalid, overtly fraudulent, or criminally fraudulent. My findings also show that your constituents who are not in foreclosure, and have never been delinquent in their payments also have clouds on title due to the recording of defective and invalid discharges and assignments of mortgage.”

    “My registry is a crime scene as evidenced by this forensic examination,” stated John O’Brien. “This crime that has affected thousands of homeowners in Essex County who, through no fault of their own, have had their property rights trampled on and their chain of title compromised. This evidence has made it clear to me that the only way we can ever determine the total economic loss and the amount damage done to the taxpayers is by conducting a full forensic audit of all registry of deeds in Massachusetts. I suspect that at the end of the day we are going to find that the taxpayers have been bilked in this state alone of over 400 million dollars not including the accrued interest plus costs and penalties. The Audit makes the finding that this was not only a MERS problem, but a scheme also perpetuated by MERS shareholder banks such Bank of America, Wells Fargo, JP Morgan and others. I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset – their homes. This is disgusting, and this is criminal,” said O’Brien.

  65. California

  66. Simonee which state are you in?

  67. The SOCTUS love to reverse 9th Circus decisions. Never
    say never when going to the Supremes.

  68. If you haven’t had the time to watch this yet—here it is again—MUST listen to the whole thing—Catherine Austin Fitts—former Assistant Secretary of Housing—amazing—trust me—you HAVE to listen—do yourself a favor—

  69. Thank you—I appreciate it—best of luck to you.

  70. You can find the payment flows on the Trust’s website; or you can have a securization audit (not sure what Livinglies calls it) done. In my case we DID get the court to compel the other side to provide the actual payment flow from the servicer to the Trust – which demostrated there had been no default incurred by the Trust. But then my attorney didn’t know what to do with it so he didn’t use at trial. We are now bringing it up as fraud in the appeal. From my experience – in my trial and three years of litigation that is now in front of the CoA – there was no default; the trustee held the original note but could not authenticate which trust it belong to (the judge ruled since they had the original they could foreclose; she missed that DBNTC didn’t know WHICH trust had it, they just held it because they were also the custodian), we did get the ADOT ruled invalid which means the SoT is void – there are many more issues. These cases are very complicated and frankly, the judge couldn’t get it off her bench fast enough. She didn’t even take it under submission, she ruled right then and there and hung her ruling on the fact they had presented the Note with an endorsement in blank (with info that the endorsement occured 18 months after the trust closed and without authority of the now bankrupct originator). we made a lot of mistakes at trial — mostly because my attorney didn’t know what he had. And as much as I want to be angry at my attorney — these are hard cases even for the most seasoned attorney. Discovery is huge — and that is hard because the lower courts are very permissive in the discovery games that are played. But we did get the info we needed, again, my attorney didn’t know how to argue it; so now I am arguing it in my appeal. I have no idea of if I will win or lose, and am very concerned that the pleading will somehow miss the boat on delivering the message — but I am giving it my best shot and using what I have now learned. the good news is fraud can be brought up at any time. The NOD was a fraud — and that itself should at least get the ruling overturned and the case remanded back to the dipshit who ruled on it in the first place. sorry..long answer to a small question – get the info from the website, then ask for authentication in discovery – when they fight you, do a Motion to Compel, show it to the judge and argue like crazy that you are entited to proving the NOD is fraudulent. (And of course, you have to balance this with the fact that the Note ISN’T in the stupid trust) It is crazy..the wall street greed is insidious and very , very, very clever.

  71. Simonee—

    “They should be attacking the NOD – NO REMIC is incurring a default – only the servicer is. Getting to the payment flow is huge.”


    How to attack NOD? How to “get to payment flow”? Please enlighten.

  72. Pat I have to say as painful as it is to read your comments, I think you are speaking to the reality of how our courts are ruling on the law as they understand it. The Court of Appeals is a respected court that has many brilliant minds (on the bench and behind the bench) researching the law. These rulings are not coming from overwhelmed, uneducated judges like we see on the lower benches. I believe one of the flaws in these cases is that they attack the initiation of the foreclosure based on who holds the Note, and ignore that it is ONLY the true beneficary who can incur the default. They should be attacking the NOD – NO REMIC is incurring a default – only the servicer is. Getting to the payment flow is huge.
    Also, you are correct, as long as the SoT is perfected by the ADOT prior to the sale, the SoT has authority. I suspect these current rulings were started back in 2007 and 2008 – prior to anyone understanding the Wall Street fraud with the REMICs. There are more cases coming down the pike where the fraud is uncovered and both the ADOT and NOD are being attacked. THOSE will have a much greater success.
    I think one truly has to be very careful in their pleadings and ensure that they are not aruging how they want it to be but how it really is. You have demostrated much courage in your comments -especially when dissenting with the majority. However IMHO you are spot on regards to California law. And there are those who get what you are saying, me included.

  73. Wow—that interview makes me want to throw up.

    So, the truth is—MERS was created to facilitate a massive fake mortgage ponzi scheme securitization fraud to Wall Street/Banks and make billions for certain sociopathic materialists…well, that was accomplished…so—I quess MERS was a huge success, after all.

  74. Pat this is definitely a civil rights issue. Due process etc… and it took the intervention of the Federal Government in the South with the help of the ACLU to allow for change.

    Pat please state in your comments that you are a double agent. You work or have done work for the banksters

    Regarding your comments regarding Gomes Vs Countrywide going to the US Supreme court. The reason there is a US Supreme court is to right a wrong by the lower courts. Your Reasoning is unbelievable.

    The only sense you really make is by rehashing the false reasoning of the courts or banks attorneys.


  75. Tough Questions for New CEO at Embattled MERS

    Thursday, September 15, 2011

    By Austin Kilgore

    Bill Beckmann begins each week with a flight from his home in St. Louis to Washington, D.C. The weekly flights have become a routine of sorts since he took on a job that of late, has become among the most daunting among executive jobs in the mortgage industry, president and chief executive of Merscorp Inc.

    Like what you see? Click here to sign up for a National Mortgage News free trial and daily newsletter to get the latest feature stories, news headlines, data, and in-depth analysis on the issues impacting the mortgage industry.
    The company, located in the capital suburb of Reston, Va., runs MERS, the Mortgage Electronic Registration Systems. Its MERS System is a database that tracks both mortgage servicers and the corresponding promissory note owners for 60% of the nation’s residential mortgages.

    Merscorp was created and is owned by the biggest players in the mortgage industry, including the government-sponsored enterprises and the nation’s largest mortgage lenders and servicers—like Citi, where Beckmann spent 25 years of his professional career, including time serving as the president of its CitiMortgage unit from 2005 to 2008.

    As the foreclosure crisis mounted, MERS’s role in the process has come under fire from borrower advocates and regulators, ultimately leading to a consent order issued by federal regulators two weeks before Beckmann’s hiring was announced.

    In an exclusive interview with NMN affiliate Mortgage Technology magazine—his first interview with any members of the media since taking on this new role—Beckmann explains how he’s leading the effort to overcome Merscorp’s challenges and why he believes in the future of MERS.

    The full interview with Beckmann will appear in the upcoming September issue of Mortgage Technology magazine, available in print and e-edition on the MT website,, beginning on Sept. 19.

    MT: What stands out about what you know now inside Merscorp that you didn’t know before you started?

    Beckmann: That MERS really is a small company. We’re up to 65 people now, from 50 at the beginning of the year.

    For something so important, with 60% market share in the U.S. of a back office utility function for all the key players, it really is a small company.

    MT: What are some of the ways Merscorp is changing under your leadership?

    Beckmann: We’re transitioning from almost like an association to really a vendor of Fortune 500 companies. We view our role as supporting the members’ activities. That’s what we were formed to do and we’re going to continue to do it well. One of our challenges has been, in doing that, is our name is on all those transactions.

    We did not have a robust process to make sure that all the data on our system was accurate, timely and reliable. Our view was that is the servicer’s data and they’re relying on it for their own transactions, they’re using their own systems, so we don’t have to double check.

    Well, the regulators took the perspective of, “No. You’ve got your name on it. It’s your system. It is being used, but you don’t know exactly the way it’s being used, so there’s no reason those two things shouldn’t line up.”

    So we’ve put in place a process now that we’re going to make sure that since we run a database, that’s what we do, it’s going to be perfect.

    MT: Do you think it’s fair for people to ask why that wasn’t in place to begin with?

    Beckmann: I think it’s fair. I think the answer is the organization grew up over a period of 15 years and it was never questioned, much in the same way I think that some of the robustness of servicing processes at servicers got questioned when they got put under stress.

    The process worked for a long time and when it was put under stress, people said, “Look, that’s just not good enough for the world we live in now. It has to stand up to a different level of scrutiny.”

    If anything, the regulators got convinced that we do has value. But they said, “If it’s going to have value and you’re going to use it, it has to meet these criteria because you’re a critically important back office function to banks.” We’ve never been held to that standard before.

    MT: Is the MERS System still a viable component of the mortgage industry?

    Beckmann: What’s the alternative? Is the alternative to go back 20 years and start recording these things on paper again? There is no good alternative.

    MERS was formed for a valid purpose. There were challenges with the accuracy, timeliness and cost of paper-based recording. None of that has changed.

    Yes, there have been some challenges to the governance-related issues at MERS, but we’re fixing those and the underlying business model hasn’t changed at all. If anything, it’s more important than ever.

  76. Pat, you and your bankster cronies can have a good laugh today…

  77. The Federal Reserve Board has issued a Interim Final Rule which you
    can review at the following website:

    “The Interim Rule has clarified a few key points:

    · Whoever is identified as the owner of the loan must be the actual owner (and not any appointed loan servicer agent);

    · If there are multiple alleged owners (covered persons) in regard to a mortgage loan, identifying information must be provided for each covered person, and the covered persons can decide amongst themselves which entity will actually provide the notice to the borrower;

    · The date of acquisition of the loan (which triggers the 30 day notification rule) is the date of the acquisition that is recognized in the books and records of the covered person;

    Other rules and clarifications are also set forth in the Interim decision of the Federal Reserve Board. ”

    I demanded my servicer tell me WHO OWNS MY LOAN. He says— Deutsche Bank—I said PROVE IT. He says—It’s in this securitized Trust! I says—NO, it’s not—the TRUST IS EMPTY. My servicer is very quiet now—he has nothing to say.

    No conveyance===No possession.

  78. A Man,

    Most attorneys here is CA do not believe that the Supremes will take the case. After all, the CA Supreme Court did not accept it.

    For the USSC to take the case, it would mean “interfering” with established CA law that has been upheld by the highest court in CA. Also, the 9th Circuit ruling on Cervantes essentially supports Gomes.

    2924 and 2932.5 have well established case law behind them. There is not a way to get around it. Attorneys can only try to argue that the Substitution of Trustee was flawed, so as to try to overturn a foreclosure That would fall under 2934. See Dimrock v Emerald. But this will be difficult to argue.

    As to your idea that the actions of homeowners is akin to the Civil Rights movement, let’s just say that it certainly stretches my imagination.

    Regarding my communism remark, I was just trying to say that the arguments of people always boil down to “it has never been plead correctly”, just like the communism defenders. There is never any consideration that the arguments have no basis in fact, i.e. Carie’s rants.

  79. Here is the petition to the US Supreme Court from the Law Firm representing Gomes vs countrywide

  80. Case against MERS reaches Supreme Court (gomes vs Countrywide)

    Pat I would say our struggle is like the Civil Rights struggle of the 60’s not compare it to Communism. Thanks to the missapplication of Capitalism Communism always resurfaces.

    The first Socialist that I know of was Moses (of the Bible old testament) who went against the Egyptians Kings in Ancient times and demanded redistribution of Wealth.


  81. Christopher King another note. If this Wall Street uprising should be more like the Tent Uprising in Israel non violent and fluid. When things get hairy on Wall Street it should spread to Chicago Los Angeles Denver Miami etc…..

    thanx again Mr Christopher King.

    The Problem with Anonymous (not ours) is that they engage in illegal practices which will give the Authorties excuses to jail people. There are many legal ways to deal with the issue at hand.

  82. Pat Communism is making a comeback by the way.
    Also Too Big Too Fail is Communism, Socialism for the corporations.

    Now we have the Israelis and the Arab Social State uprisings, not to mention the Riots in Greece and to a City in the United States soon.

    The United States Has fallen into the Same Trap that the USSR Russians fell into. Centralized Government (corporation Welfare) and the War in Afghanistan. Maybe Russia should boycott the Olympics until the United States stops occupying Afghanistan just like President Jimmy Carter did to the USSR.

    There must be other ways around 2924 and 2932.5 like UCC codes that apply.


  83. Yes indeed Neil DOT = Mortgage…. anyway on a related note stay tuned for today’s shenanigans at Wall Street Occupation. I’ll have this post on my camera at the ready for any LE who give me grief, I’m here strictly to gather news and information, stills will be up later today, video in the next day or so for sure!

    KingCast and Mortgage Movies return to Wall Street to see a different sort of Occupation……

  84. As to the TILA amendment, it requires that the borrower be notified when an assignment is done.

    Nowhere is it alleged that the TILA amendment was not complied with.

  85. A,

    You want to overturn 100 years of CA law?

    This ruling was based upon CA law for the past 100 years. But, as I also wrote, even if the Deed of Trust and Mortgage are the same, under CA law, MERS would have the right to foreclose as an agent of the beneficiary.

    Now, when you argue that the pleading was not done properly, that is just all the supporters of communism who say that communism has not failed, “it just hasn’t been properly implemented”.

  86. Believe Neil is correct as to “A Deed of Trust is the same as a Mortgage and to construe it otherwise is to approve denial of due process guaranteed by the U.S. and California Constitution.”

    Nevertheless, “beneficiary” in a any capacity – is not a creditor — which is supported by new TILA Amendment. And, again the issue of of equitable vs legal title is at issue. Thus, “right of assignment” is also in question.

    If state courts continue to narrowly interpret, it is important to simultaneously file for BK — by which identification of creditor is mandatory. But, have to use the law to demonstrate — not the creditor. If BK court properly applies the law, as it should, then conflict between state court and BK court.

    Pat — you have a right to your opinion. My opinion, however, is when these cases are lost — it is simply because not plead properly. All takes time to reverse resulting damage.

  87. Once again, Neil is downplaying the significance of the ruling. Here are the facts.

    1. MERS was the nominee for HSBC.

    2. Notice of Default was recorded with MERS still the nominee. MERS is acting in an agency relationship with HSBC. See Gomes, and OCC Consent Decree.

    3. 2924, the foreclosure statute, allows for an agent of the beneficiary to initiate the foreclosure. No issue here.

    4. The Substitution of Trustee is recorded the same day as the Notice of Trustee Sale. The Trustee Sale must occur at least 20 days after the Notice is filed.

    5. The Assignment of Beneficiary is included in the Substitution of Trustee document. There is nothing wrong with both of them being together. I have seen this many times.

    6. The Trustee Sale occurs in accordance with the minimum time line.

    The homeowner attempted to argue that the recorded Assignment had to occur prior to the Notice of Default being filed or else the foreclosure process was tainted. This would be the 2932.5 argument.

    2932.5 provides that only the beneficiary by “right of assignment” can foreclose on a “mortgage”. Notice that it says “can foreclose”. Some courts that have said that the mortgage and deed of trust are the same have ruled that as long as the assignment is recorded prior to the actual sale, then no violation has occurred.

    (I have heard only one time where a TRO was allowed based upon this argument, and then, the demurrer was upheld and the allegation was dismissed. All other cases alleging 2932.5 have failed completely, that I am aware of.)

    What Neil also ignores is that the Court said that MERS has the power to foreclose, as upheld by the Gomes ruling. Therefore, even if the Assignment were unlawful, the fact that MERS would still be the recorded party with the right to foreclose. Therefore, the foreclosure would still be lawful.

    The homeowner might try to appeal, but the CA Supreme Court will not take it, like in Gomes. Gomes settled the issue with MERS and 2924 in July. The 9th Circuit ruling on MERS just reinforced Gomes. This case was filed long before Gomes, so any appeal would be futile.

    This ruling is only applicable to California.

    Now, everyone can let me “have it” for not agreeing with Neil.

  88. Do you think they will appeal this to the CA Supreme Court?

  89. […] Livinglies’s Weblog Filed Under: Foreclosure Law News, Foreclosure News Tagged With: crisis, foreclosure, […]

  90. Are you saying that this ruling applies only to California cases and that it does not apply to Florida or other foreclosures? Has Stockwell been cited by appeals courts elsewhere? Vagueness is so annoying.

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