Can Confidence Go Up While Expectations Go Down?

What’s the Next Step? Consult with Neil Garfield


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Editor’s Comment: Moving Day so I need to make this short. I am infuriated by the continued disinformation from the media. The article below written by Elliot Njus for the Oregonian, is a well -intended and still misleading statement of the facts. If you read the article, the young couple bought a house at the top of a legitimate market and then the market fell due to normal market forces and cycles.

That is not what happened. They were cheated from the start by an intentionally bad appraisal to induce them to sign papers creating the appearance of a debt that was not supported by the values they were given by the other people at the table. And the debt was not even payable to the the managed pension fund that supplied the cash for the loan!

The writers are correct that this young couple and millions like them now have diminished expectations for their lives. And it is also true that those diminished expectations will lead to a drag on consumer confidence for decades — but not just because of the trauma of foreclosure or loss of money. What was destroyed by the banks was TRUST, and that can only be earned back over long periods of time.

Between the lying, cheating, forging, robo-signing and manipulating the Libor index such that nobody knows what the adjustment should be on a legitimate ARM, very few people will enter into real estate transactions or any other purchases without being suspicious of both the financial system and government, including the judicial branch of government.

Why isn’t anyone asking the most basic question: if the banks were using pension fund money to fund the mortgages, why did the banks get the proceeds of insurance and federal bailout? Why has that money not been applied against the balance due from borrowers?

The truth comes out slowly. And eventually, at the end of the day, the facts will be known. But it is already too late for those who committed suicide, broke up their marriages and gave up on the system. In an economy driven by consumer spending, how can anyone expect consumers to maintain confidence in a rigged system?

Housing Crash leaves a generation of young homeowners underwater: Diminished expectations

26 Responses

  1. Deborah,

    If the trustee didn’t meet the requirements I’d challenge their authority and also write letters to the AG and county attorney. I’d let them know in the letter why they don’t qualify under AZ law. I would check the AZ corporation commission and with the secretary of state and see if they are listed to conduct business and under what capacity, keeping in mind foreign business must also be registered. Here’s the statute below, check to see if they meet the criteria.

    Maybe, even consider stating that they have not been properly appointed by stating that MERS is not registered to conduct business in AZ and that therefore they don’t qualify as an agent/nominee. (AZ has seemed to adopted the MERS system as legitimate but I haven’t seen anyone questions MERS ability to conduct business being unregistered. Maybe, someones already gone down this road but I haven’t seen it.)

    Even if they are “authorized” I’d still write the dept who oversees them and let them know of any malfeasance. For instance if they were an attorney I’d write the state bar, if they were an insurance producer I’d write the AZ Dept of insurance etc…Notifying their bosses might put additional pressures on them or might have no result, who knows?

    Anyway, there is also a case that determined that the trustee was a debt collector and subject to FDCPA. I don’t remember off hand the case. You might consider mailing the trustee a FDCPA letter and let them know that they owe a responsibility to the borrower as well as the bank and you will hold them liable for inaccuracies.

    Again, not sure if anything will come of any of this but at least you’d establish your administrative “foot prints”. This is just what I’d do. I’d consult an attorney if you had an opportunity and discuss your options. Good Luck!

    trustee of trust deed; qualifications

    A. Except as provided in subsection B, the trustee of a trust deed shall be:

    1. An association or corporation doing business under the laws of this state as a bank, trust company, savings and loan association, credit union, insurance company, escrow agent or consumer lender.

    2. A person who is a member of the state bar of Arizona.

    3. A person who is a licensed real estate broker under the laws of this state.

    4. A person who is a licensed insurance producer under the laws of this state.

    5. An association or corporation that is licensed, chartered or regulated by the federal deposit insurance corporation, the comptroller of the currency, the federal home loan bank, the national credit union administration, the farm credit administration, the federal reserve board or any successors.

    6. The parent corporation of any association or corporation referred to in this subsection or any corporation all the stock of which is owned by or held solely for the benefit of any such association or corporation referred to in this subsection.

    B. An individual trustee of a trust deed who qualifies under subsection A shall not be the beneficiary of the trust, but such restriction shall not preclude a corporate or association trustee that qualifies under subsection A and while acting in good faith from being the beneficiary, or after appointment from acquiring the interest of the beneficiary by succession, conveyance, grant, descent or devise.

    C. A trustee of a trust deed who qualifies under subsection A shall not lend or delegate the trustee’s name or corporate capacity to any individual or entity that does not qualify as a trustee of a trust deed. An individual, company, association or corporation shall not circumvent the requirements of subsection A by acting in concert with a nonqualifying trustee.

  2. hman just checked in- but what if the trustee is not a trustee

  3. Hello,

    I don’t want to come off negative because I wish everyone fighting the best. Although I personally believe the the liars should have to show the note as proof they own the loan my legislature disagrees.

    I am not educated on what other court cases influence your own states law. I do believe however that the supreme court in your state is the highest “State” authority. When a verdict comes in from the SC the prior lower level courts are irrelevant if they contradict the SC rulings because the SC trumps them.

    I don’t mean to beat a dead horse but if you read Hogan it states the notes aren’t required because the trustee is foreclosing on the DOT

    “But the trustees here did not seek to collect on the
    underlying notes; instead, they noticed these sales pursuant to
    the trust deeds. The UCC does not govern liens on real
    property. See Rodney v. Ariz. Bank, 172 Ariz. 221, 224-25, 836
    P.2d 434, 437-38 (App. 1992). The trust deed statutes do not
    require compliance with the UCC before a trustee commences a – 9 –
    non-judicial foreclosure. See In re Krohn, 203 Ariz. 205, 208
    ¶ 8, 52 P.3d 774, 777 (2002) (“[D]eed of trust sales are
    conducted on a contract theory under the power of sale authority
    of the trustee.”).

    So, maybe you are right that other states cases influence AZ case law. I hope you are correct, I’m not an attorney so this is where I’m confused.

    Good Luck

  4. Someone here a few months ago was irked by the bankster’s mtn for a protective order on discovery. The Bradbury v GMAC case is in the news again (cert’d question Maine SC wouldn’t answer), so I looked up some pleadings. Sometime in 2010, the DC had denied GMAC’s mtn for protective order, citing Public Citizen v Liggett Group, Inc., 858 F.3d 775, 789 (1st – 1988). I didn’t read it, but it may have some useful info for anyone faced with a mtn for protective order.

  5. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Livinglies’s Weblog […]

  6. CASIMIRO v. MERS, INC., RI Superior Court | Do not have the right to foreclose if they do not follow the Statute and if they cannot prove that a debt is owed –
    see foreclosure fraud (babcock Law )
    i know we have Hogan in Az, but there are good legal points in these cases re the debt and rights to enforce when they cant show a loss.

  7. Authority of Servicer to Settle

    Posted on December 5th, 2012 by Mark Stopa

    My friend and colleague Matt Weidner just posted an eye-opening blog describing how a servicer had settled a foreclosure lawsuit by agreeing to waive any deficiency, yet the plaintiff’s attorney argued that Fannie Mae, as the owner of the Note, could still pursue the deficiency if it so chose. It’s a shell game, really – making a settlement with a homeowner, then saying, “ha, ha – we offered you something in the settlement, but now you get nothing.”

    As Matt explained, the judge was understandably upset. This is, quite frankly, one of the reasons I love arguing that courts should do everything in their power to limit the ability of servicers to prosecute foreclosure cases. There are just so many problems here. Does the servicer actually have the authority to foreclose? How do we know? If we settle, is a written settlement agreement with the servicer binding?

    Read the transcript Matt posted. This is why judges shouldn’t allow foreclosure complaints to be verified by servicers, much less foreclosure lawsuits to be prosecuted by servicers.

    This sounds problematic, particularly when you think about whether the servicer actually has authority to settle a case. Frankly, it is problematic. However, there is a simple solution. If you’re a homeowner and you settle a case with a deficiency waiver, make sure the Court signs an Order specifying “Plaintiff is not entitled to a deficiency from Defendants,” or words to that effect. If that order is signed (in a final Order or a Final Judgment of Foreclosure), I believe it prevents anyone from taking the position, later on, that the owner of the Note can still pursue a deficiency. After all, the Court has already ruled there is no entitlement to a deficiency, so that ruling would be binding on the parties in the future, even years later. And that Order is recorded in the Official Records of that county for everyone to see.

    But what if the company pursuing the deficiency is not the plaintiff, you ask? Could the “plaintiff” be barred from pursuing a deficiency but some other company, like the owner, still be able to do so? I think not. In my view, a signed court Order, along the lines I described, precludes this. The legal doctrine at play is called res judicata. It applies not only to the parties in a lawsuit, but to those in privy with the parties as well. Hence, if a servicer is the plaintiff and the court enters an Order that there is no deficiency, but the owner tries to claim a deficiency at a later point in time, I think the Order which says there is no deficiency would be binding on the owner as well as the servicer. The owner can’t point to an Order in a case involving the servicer – it’s own agent – and argue that Order does not bind the owner as well. In other words, you, as the homeowner, could point to the Order and say “the court has already ruled the plaintiff is not entitled to a deficiency, and that ruling is binding.”

    What if there is not an Order? That’s where it becomes more troubling. If all the homeowner has is a written settlement agreement, I’d be concerned that may not be binding on the owner of the Note. There are arguments it is, of course, but it’s not a path down which I’d want to travel. An Order is much better. In fact, that’s why, when I settle foreclosure cases for clients with a deficiency waiver, I make sure there is a signed court Order which makes it clear the Plaintiff is not entitled to a deficiency. Getting such Orders for my clients helps me sleep better at night.

    Mark Stopa

  8. LOST: Looking for the Canons of Judicial Ethics
    Posted on December 5, 2012

    Judicial misconduct is a touchy subject.

    But what else do you call it when judges violate their own canons and participate in unethical decisions that may create financial gains in their investment portfolios?

  9. Attorney Richard Roman appears intent on pestering the CFPB until something is done. That’s persistence at its best.

  10. hman- in Az, im in AZ, but they gotta show they can collect on a debt see Bradford V HSBC Mortg.Corp: Supp.2D625_Dist Court,ED Virginia 2011 ” if a defendant transferred the note or did not yet have possession or ownership of the note, but nevertheless (emphasis mine) engaged inforeclosure efforts ,that conduct could amount to a FDCPA violation. Therefore, because the complaint adequately sets forth a claim that HSBC, Ally, and/or RFC violated the FDCPA by attempting to foreclose without possesion, the claim cannot be dismissed under rule 12(b) 6 Fed,R.Civ.P, instead, it is appropriate to convert Ally and RFCs motion to dismiss to a motion for summary judgement as to this sole remaining claim and to grant all parties (20) leave to file supporting legal memorandum and factual contentions concerning whether summary judgement is appropriate in favor of or against any party as to the sole remaining FDCPA claim.” ( Quoted excerpt from the case)

  11. e.tolle – that was funny! I actually laughed out loud at the first shriek.

  12. dcb – you around? This might interest you:


    (c)…… An obligor is not obliged to pay the instrument if the person seeking enforcement of the instrument does not have rights of a holder IN DUE COURSE AND the obligor proves that the instrument is a lost or stolen instrument.”
    Without discovery (or an answer to a request for a more definitive stmt), one can’t know if a party is claiming as a holder or a hidc. And how in today’s courts can one ‘prove’ a note is stolen? I think because the UCC has this provision, it’s unreasonable for courts to deny a litigant an opp to learn if a party is a holder or hidc and to find out thru discovery if the note is in fact stolen (assuming it’s an orig). Why make a law people can’t touch?

  13. Christine,

    Show me the note might be a solution in some states. However, if you live in AZ it is a losing angle. Hope you don’t think this is negative but there it doesn’t make sense to argue a strategy that has already been decided in the highest court in your state.

    In the hogan case it states.

    “We hold that Arizona’s non-judicial foreclosure statutes do not require the beneficiary to prove its authority or “show the note” before the trustee may commence a non-judicial foreclosure.”

    Hogan case also states;

    “The only proof of authority the trustee’s sales statutes require is a statement indicating the basis for the trustee’s authority…Hogan’s complaints do not contest that each sale was noticed by a trustee who had recorded an instrument demonstrating that it was a successor in interest to the original trustee.”

    Mr Babcock knows his stuff but I doubt he would argue this route in AZ. I don’t know what states influence other case law but “show the note” has been shot down time and time again in AZ. I think even Neil has moved away from it because he has reliased it has not worked. This is why we see the deny approach being promoted.

    Anyway, just putting my 2 cents in. I think this was once a valid defense but I wouldn’t risk my home on it where I live.

  14. I don’t know if this Vimeo video will embed, so go here and watch this one if this doesn’t stick:

    [vimeo http://www

    w=500&h=281] The Bottom Line- Housing from Softbox on Vimeo.

  15. E. ToLLe

    Best I have seen or heard. Very appropriate
    and you just made my day !

  16. … “You’re good at stealing, and you’re good at lying,
    Now let’s see how good you are at flying”…

    Wasn’t that done recently in London? And if I recall, the landing wasn’t too pretty. Kinda bloody too.

    Nope. Not good at flying at all.

  17. Play along with me:

    Hey Mr Wall Street on the Fiftieth floor,
    cant make the payments on your penthouse no more.
    Jump you fuckers, jump you fuckers.
    Open up the window, check out the view, and jump you fuckers.
    E G Am
    You cant take much of what you’ve been dishing out,
    It’s your turn to get downsized, what’s you’re gona do now?
    Jump you fuckers, jump you fuckers.
    Open up the window, check out the view, and jump you fuckers.
    E G Am
    Hey Mr banker with your make believe books,
    the bottom line is closer than it looks.
    Jump you fuckers, jump you fuckers.
    Open up the window, check out the view, and jump you fuckers.
    E G Am
    You’re good at stealing, and you’re good at lying,
    Now let’s see how good you are at flying.
    Jump you fuckers, jump you fuckers.
    Open up the window, check out the view, and jump you fuckers.
    E G Am
    ‘Could have had a real job, not blowing bubbles,
    there’s one sure way for you to stay out of trouble.
    Jump you fuckers, jump you fuckers.
    Open up the window, check out the view, and jump you fuckers.
    E G Am
    Forget your lawyers, and your net worth,
    there’s one sure way for you to come back to earth.
    Jump you fuckers, jump you fuckers.
    Open up the window, check out the view, and jump you fuckers.

  18. When, on December 5, 2012, Main Stream Media does a piece on “produce the note”, I know that it has (finally) reached the media and judges will start listening. I expect big changes from that, starting with more and more exposure and, as a consequence, more and more judges becoming aware of it and having an increasingly harder time poopooing it.

    I hope people will read into it what I read into it. Defeatists are free to remain negative if they wish.

  19. Okay, they can produce a pen-to-paper, blue ink note…we have one, only one problem it’s a forgery and we have hired an expert to analyze it and pay big bucks to do so. Produce the note, in and of itself, does not work these days.

  20. Sorry guys. “Produce the note” is still the way to go. If Atty Mark Babcock says 100% of his clients are still in their house months or years after he demanded the note, I listen.

  21. Hey, if one former bank attorney can find religion in his retirement age, maybe we just ought to wait for Stumpf, Moynihan, Blankfein and Dimon to retire. When all those guys put their knowledge of the system together for the greater good, watch out! We’ll have a new world order we can be proud of!

    Cox did help a lot. All our thanks to him. And congratulations, Harry. Every win is a great win.

    Booming, Living Through the Middle Ages

    For Fighting Foreclosures, a $100,000 Award
    Matt McInnis for The New York Times

    Thomas Cox, a lawyer who in 2008 exposed home lenders’ illegal foreclosures, has been awarded a $100,000 Purpose Prize.
    Published: December 5, 2012 1 Comment

    In 1989, Tom Cox, a lawyer for a Maine bank at the time, wrote the book on mortgage foreclosures (“Maine Real Estate Foreclosure Procedures for Lenders and Workout Officers”), detailing the most effective legal methods for seizing people’s homes.

    After 30 years of that, he retired and in 2008, during the Great Recession, he experienced a crisis of conscience and switched sides to work pro bono for people whose homes were being foreclosed on by banks.

    In this case it took a banker to catch a banker. Mr. Cox very quickly realized that GMAC, the mortgage company he was suing in court to save Nicolle Bradbury’s $75,000 house, was mass-producing flawed paperwork to seize people’s homes illegally. This set off what would become known as the robo-mortgage scandal, leading to a $25 billion settlement that forced the nation’s largest banks to halt foreclosures.

    For his work, Mr. Cox is one of five people to be awarded a $100,000 Purpose Prize, given to those 60 and over who have created fresh solutions to old problems. The prize, now in its seventh year, has become a sort of MacArthur genius award for people who develop a second career as social service entrepreneurs.

    This year’s other $100,000 winners include:

    Judy Cockerton, 61, of Easthampton, Mass., a former toy store owner, for creating innovative programs to support foster children.

    Lorraine Decker, 64, of Houston, who had a lengthy career as a consultant to Fortune 500 companies, for developing financial education programs aimed at low-income teenagers and adults.

    Susan Burton, 61, of Los Angeles, an ex-con and former drug addict, for opening five transitional homes to support women who have been newly released from jail.

    Bhagwati Agrawal, 68, of Fairfax, Va., an engineer, for his work in rural India developing systems that produce safe, low-cost drinking water.

    The prizes are awarded by, a nonprofit organization that develops programs aimed at encouraging retired and older workers to take on second careers in community service. Financing is provided by the John Templeton Foundation and the Atlantic Philanthropies.

    This year’s 23 judges included Sherry Lansing, former chairman of Paramount Pictures, David Gergen, Jane Pauley and Sidney Poitier.

    While the winners are free to use the $100,000 as they wish, several interviewed said they would use the money to expand their programs.

    Mr. Cox, 68, said he plans to use most of his winnings to develop seminars that will train lawyers in Maine to perform consumer protection work.

    “Maine is a state with a large rural population where a lot of the attorneys work solo or in two or three person practices,” he said. “Many are unfamiliar with the protections provided under the laws.”

    Among other things, he wants to teach lawyers methods for having their legal fees paid by companies that they successfully sue. “A lot of these clients can’t pay much, but their lawyers can recover legal fees from the other side,” Mr. Cox said.

    He hopes to bring national experts to Maine to educate the state’s lawyers in consumer protection law.

    He also plans to set up a corps of retired lawyers from around the state who will mentor new lawyers and work with them in court.

    “The prize money won’t cover the new programs,” he said, “but I’ll use it as seed money, hopefully to raise the $200,000 to $300,000 we’ll need.”

    For the last four years he has paid for virtually all the foreclosure work out of his own pocket, he said. “The most I have received was $23,000 in counsel fees for the GMAC case,” he said.

    Asked if he intended to use any of the prize money for himself, Mr. Cox said, he might set a little of it aside for a fishing trip.

  22. Congrats Harry !

  23. Absolutely true.

    On the matter of TRUST, boy, have I ever lost faith in the system.
    But hey, it is wake up call!

    The elite have become overconfident of their plans for the little guy
    and underestimated the will of the human, its conscience, and sense of morality.

  24. I have just received a Foreclosure ruling on Summary Judgment of a case in Oklahoma as of Nov 30th.
    Judgment was vacated and remanded back to Oklahoma County District court. Plaintiff BAC and
    Countrywide represented by mortgage foreclosure mill Baer,Timberlake, Coulson Cates for lack of standing on foreclosure filing date March 25th, 2010, no original note documentation. If interested please respond and I will send the 10 page ruling…Harry Milhisler 405.520.8880
    Harry Milhisler

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