SMOKE AND MIRRORS: HOW TO FOCUS ON MORTGAGE AND FORECLOSURE DEFECTS

It is obvious that I feel it is important to understand securitization and more particularly, how it was faked in the mortgage meltdown and used to cover-up a Ponzi scheme. That is why I publish this blog and that is why I have written books and manuals and of course that is why I issue expert declarations. The issue, in court, is how do you educate the Judge in 5 minutes. The actual answer is that you don’t but your knowledge gained from these pages and other sources should guide you to your goals and guide your voir dire and cross examination of the witnesses for the other side.

Theoretically, most of what I have been suggesting for tactics and strategy ought to be the burden of the party seeking affirmative relief. DENY and DISCOVER arose out of the realization that Judges were placing the burden on the borrower instead and hanging their legal hat on the fact that the borrower was raising affirmative defenses and therefore required to prove them.

Most borrowers, even through counsel, compounded the problem by admitting all required elements of a judicial foreclosure as they emerged from the starting gate making it even easier for the Judge to place the burden of persuasion on the borrower — to prove facts that are exclusively within the possession, care, custody and control of the other side. And that is why discovery is so important.

Even borrowers who commence the litigation in both judicial and non-judicial states commence their complaints with the allegation that they had a financial transaction with the named lender on the note and mortgage — when in fact the borrower has no evidence to support that allegation other than the appearance or illusion of a transaction supported by the fact that the money for the loan showed up at the same time as the “closing.”

In general, a  careful examination of any loan now subject to a claim of securitization will reveal a fun house series of smoke and mirrors. Factually, you need to subpoena the trust officer or manager in charge of REMIC trusts including the subject REMIC for the subject loan. They should bring proof of filing with the IRS and/or any state in which they are doing business as trustee for the REMIC and proof that the money from investors was deposited into an account bearing the name of the alleged Trustee for the benefit of the named trust that is claiming ownership of the loan. Your goal here is to establish that the money was not deposited into any account held or controlled by the trustee and that withdrawals for funding or purchasing loans came from somewhere else. But that only gets you half way home.

The next thing you have to do is subpoena the records of the entity to whom the Trustee will testify was the party to whom the trustee delegated the trustee’s duties. Here again you are looking for an account in the name of the REMIC trust claiming ownership of the loan into which the investor funds were deposited and from which the funding for origination or purchase of the loan took place. You will most likely find again that no such account exists but that there is agreement that the party receiving the investor money was the investment banker and that the account was a commingled account in which the investment bank made decisions as to how much it would take for itself under the  rubric of “proprietary trading.” The balance of the money was used for fees, costs and other expenses and then finally the balance after deductions was used for funding origination or purchase of mortgages.

The trustee should be encouraged to admit that if the loan is not performing or if the loan purchase or assignment, the trustee is prohibited from accepting such loans inasmuch as it would have an immediate negative economic and tax consequence to the investor. The trustee should also be encouraged to admit that the parties to whom duties were delegated were acting within the scope and course of their agency, with the Trustee (or the investors) as the principals and ultimate beneficiaries.

A subpoena to the CDO manager should expose the transactions entered into by the investment bank or an affiliate with respect to the value of the bonds or loans in the alleged investment pool. But under proper questioning, if the money for the loan didn’t come from the investment pool entity, then it came directly from the investors, not the REMIC trust. The point to be made is that the REMIC trust was ignored in all actual financial transactions in which money exchanged hands but principal-agent relationship still existed with the investors as principals and the investment bank et al as agents.

In all cases you wish to establish that no loan receivable account was established on the balance sheet of the REMIC trust claiming ownership of the loan, and probably that no such balance sheet or income statement exists. The investors were not given the note signed by the borrower. They were given a bond issued by the REMIC trust which was worthless because the proceeds of their investment never reached the REMIC trust.

Thus, oversimplifying a bit, you have established that the REMIC trust is not the payee, holder or owner of the debt because (1) it wasn’t the source of funds and (2) the transactions did not comply with the PSA and Prospectus, requiring strict adherence to the REMIC provisions of the Internal Revenue Code.

All of this is done not as an exercise in training the Judge on securitization but under the rubric of tracing the money to the real creditor who had a real loss that would entitle them, if they are secured, to enter a credit bid at the time of auction of a foreclosed property. This would be the same party(ies) that could faithfully execute a satisfaction of mortgage and deliver the note back in its original form with “Paid in Full” Stamped across the front of it. This latter point leads to more complications when you realize that the subject loan was a refinancing of another loan that was also subject to claims of securitization, potentially leaving the homeowner with multiple unsatisfied mortgages, notes or debts.

Your inquiry should focus on the actual receipts and statements showing deposits and withdrawals and transfer of money rather than an assignment which merely tells a story about the transaction. Just as the mortgage is not the note and the note is not the debt, the assignment is no substitute for the actual exchange of money in the sale of the loan. You will find that no such exchange of money took place and then be faced with the question that if the note terms differed from the bond terms, if the payee on the note and mortgage were different than the actual source of funds, and there was no consideration passed (for value received), is there any legally existing transaction? The answer, I think, is NO.

This leaves the situation in murky waters: the transaction about which the origination and transfer documents tell “the story” never took place. So you have documentation without the underlying debt. The actual transaction was with the investors not merely of the REMIC claiming ownership (and by this time has been proven not to own the loan), but all investors whose money was in the source account from which money was taken to fund the origination or purchase of the loan. This commingled account therefore creates under common law a general partnership of the investors that has nothing to do with the REMIC trust which has been ignored by all parties. Thus the partnership consists of all investors who had money in the commingled account. Those investors thought they were advancing money for the purchase of bonds issued by a worthless REMIC trust but found that the Trust had been ignored by their agents. Thus investors from multiple REMIC bond sales find themselves all in the same pot.

This accounts for the allegation from investors in suits against investment bankers that they have been subjected to illegal transactions with borrowers against whom they could enforce neither the note nor the mortgage — because although they did indeed loan money to the borrowers, the documents signed by the borrowers say otherwise. [You should have a couple of those lawsuits under your arm when arguing these points with the Judge]. This leaves the true transaction trail without any documentation other than a wire transfer receipt and perhaps wire transfer instructions. And what was intended to be a secured transaction turns out to be an unsecured transaction even though both sides intended it to be a secured transaction — but subject to different terms (the terms of the repayment on the mortgage bond issued by the empty REMIC trust and the terms of repayment on the promissory note signed by borrower).

The end of this is unclear except to say that settlements will become more frequent. But the negotiations start on a level playing field with the investors rather than the servicers. In most cases it is apparent that borrowers will consent to a new mortgage document directly with the investors thus securing the debt, after reducing it for payments received by the investors or their agents.

 

38 Responses

  1. Thanks GUEST ….. Well, isn’t that testimony rich…? It tells the tale of how they use what we don’t know against us. Most Americans would think that all sounds legal but, it is in fact, all criminal.

    Electronic data that proves we performed on their fraudulently induced contracts but proves nothing they did is, proof of nothing. The unauthorized notes in blank they passed around, swapped and overissued investments in but paid for nothing are crimes…..SECURITIES FRAUDS….They talk of our Default that never happened because they were who Defaulted in our names without our knowledge. All of their contracts were therefore fraudulently induced and were a nullity even before the “closings.” The closings were used to steal our autographs and destroy our property values on Wall Street and nothing more.

    The bank owners, their banks, the politicians and their entire Wall Street Corp are a cartel of Criminal Felons….they rob us to destroy us by many proxies, that is all they do.

  2. WELLS FARGO MASSIVE FORECLOSURE FRAUD TESTIMONY CONCEALED FOR 3 YEARS, BY U.S. CONGRESS:

    http://financialservices.house.gov/media/file/hearings/111/alan_jones111810.pdf

  3. The fraud is all theirs guest. No one signed or agreed to be robbed by these crooks who are totalitarian control freaks who are devoted to evil.

  4. My motto….if it makes no sense, it’s the bank owners.

  5. It’s the bank owners who are doing all of this criminal fraud by many proxies. They are the devil in disguise but are no longer disguised if you know who the enemy is … the bank owners. This bloodline of control freaks have been committing heinous crimes against mankind from behind the scenes all throughout history. They are a giant corporation of thieves and thugs, wolves in sheep’s clothes. Their goal has always been the same, totalitarianism. They are totus tu evil. They have many agents & agencies that do their evil works.

  6. The People’ … The Gov’ … is sueing the Banks/LPS/MERS because? Because the Banks and their hired Hood of Criminals Harmed and caused actual losses to the Homeowner and the Investers and the Taxpayers! Buttwipes!!

  7. In our case, we have not seen the note or endorsements (only the mers transfer of note and mortgage together thingy three years later). If we file a QT (at our own expense) and clean up the smudges … it only opens the title to recogntize the note and mortgage. As long as the title was smudged a few times, no one could bring standing. That is why folks who QT and win, turn around and find themself being fc again. We just wait and let the big boys play with their big toys and let the ball of liability bounce where it may …..

  8. And who authorized MERS to transfer the notes? Because Mers can not legally transfer or endorse somthing it does not own.

  9. Charles, the loans go into a Ginnie Mae Pool (to the trusts .. le lender/invester/funder). Ginnie Mae is only a SPV/Insurer and does not fund/buy/sell any loans. They only pool them. The servicer does not aquire the loan form G.M…. they aquire the loan back from the multiple pools it was sliced and diced up into. G,M. only holds the note in blank for the pools, not themselves. (Mers Mortgage was recorded in favor of the Investers). Servicer aquires the loan from investers and the Mortgage from the investers. One of the issues is …. The investers did not authorized MERS to assign the title/mortgage to the servicers. Who did? …. clears frog from throat… ut ummm…

  10. quest, no party can ever purchase against a single loan from Ginnie Mae because Ginnie Mae by law cannot buy or sell a home mortgage loan!

  11. The truth is complicated only because of our lack of education on these matters. Everyone needs to make the time to educate themselves because that is very important whether you choose to hire an attorney or not. If you fall for a fraud fixer attorney, and there are plenty of those, you will be worse off than when you started this journey.

  12. Purchasing securities fraud from a pool of securities fraud is counterfeiting fraudulent securities ….racketeering, to gain unjust enrichment.

  13. FHA and VA Loans: These loans cannot be found in the SEC. Do not request PSA for FHA or VA Loans. These loans can be in a Ginnie Mae pool and upon default may be purchased from that pool by the Servicer (Servicer in this example becomes the new owner/creditor).

  14. There is a lot more to it than purchasing the debt….the Issuer of the bill of credit had to create the security by Acceptance and Consideration…then the title company had 90 days to deliver the loan file to the trust…and get a Delivery and Acceptance Receipt before the closing of the trust….then 30 days to record the assignment to perfect the lien…..

  15. There has to be a trust agreement, an assignment of beneficial interest or a collateral assignment of beneficial interest….that is a legal lien and must be recorded to perfect the legal lien. There also must be UCC filings with the SOS everytime there is a pay off and transfer of lien…fixture filings are a hoax….they can’t by law, convey interests in bits of property without perfecting the legal lien or that is securities fraud….. conveyances can only go from bank to bank.

  16. Bobhurt where your wrong is that because a debt is not purchase none of the borrowers have a valid contract. Your not understanding that a is only a Note when there is a debt involved.

    If the holder of the blank Note is not owed a debt they cannot demand payment because they have no financial interest as they cannot and are not in title.

    You got situation where its impossible for the borrower to be behind on a payment, as there is no payment that can be accepted by law as Ginnie Me a is not lender who cannot the self or a surrogate can collect.

    Why do you think they are settling? it not because they have the law on their side. Why is a Note a Note? Only when there is a debt owed to the “holder in due course” which you can only be if you purchase the debt.

    Here is where you go off the farm is that your wanting the lenders to have a gain when they have absolutely no money trial and no valid titles.

  17. We can do our own securitization audits easily. Look for the legal assignment … if there is no legal assignment there was no securitization ….

  18. @Bob Hurt……Either you are way behind the learning curve or, you are lying for these crooks.

    The truth is no longer a secret and you just sound foolish…

    The banksters destroyed the notes & mortgages when they committed the Origination Fraud. Their fraudulently contracts are a nullity and they owe US a lot of money..$$$$……$$$$$$….$$$$$

  19. The end is very Clear Mr. Garfield. FORECLOSURE. Nothing you wrote above has aught to do with the FACT that the borrower signed the note and mortgage, defaulted, and now must forfeit the collateral. The borrower who doesn’t know to whom he owes the money can file an interpleader and pay the court, which will then disburse the money to the proper party. Oh, that’s right, the servicer takes care of that, so why bother?

    Mr. Garfield, you steadfastly refuse to deal with the reality that the court will grant redress to the borrower upon show of proof that the lender cheated the borrower at the inception of the mortgage, as happened in about 90% of the single family home mortgages since the year 2000. Your useless loan and securitization audits will never uncover the associated causes of action, but a COMPREHENSIVE MORTGAGE EXAMINATION could. If you only knew how to do it.

    The homeowner/borrower has only one way to beat foreclosure and get financial remuneration or the house free and clear. SHOW THE COURT THE torts, breaches, and errors underlying the mortgage. Want a $3 million example?

    http://wvrecord.com/news-2580/233771-quicken-loans-on-losing-end-of-3-million-predatory-lending-verdict

    Call me if you want to know how to get your mortgage examined by a competent professional. I charge no fees for my service.

    Bob Hurt 727 669 5511

  20. The end is very Clear Mr. Garfield. FORECLOSURE. Nothing you wrote above has aught to do with the FACT that the borrower signed the note and mortgage, defaulted, and now must forfeit the collateral. The borrower who doesn’t know to whom he owes the money can file an interpleader and pay the court, which will then disburse the money to the proper party. Oh, that’s right, the servicer takes care of that, so why bother?

    Mr. Garfield, you steadfastly refuse to deal with the reality that the court will grant redress to the borrower upon show of proof that the lender cheated the borrower at the inception of the mortgage, as happened in about 90% of the single family home mortgages since the year 2000. Your useless loan and securitization audits will never uncover the associated causes of action, but a COMPREHENSIVE MORTGAGE EXAMINATION could. If you only knew how to do it.

    The homeowner/borrower has only one way to beat foreclosure and get financial remuneration or the house free and clear. SHOW THE COURT THE torts, breaches, and errors underlying the mortgage. Want a $3 million example?

    http://wvrecord.com/news-2580/233771-quicken-loans-on-losing-end-of-3-million-predatory-lending-verdict

    Call me if you want to know how to get your mortgage examined by a competent professional. I charge no fees for my service.

    Bob Hurt 727 669 5511

  21. No, stripes—collection rights are not loans. It’s a ponzi.

  22. The end is very Clear Mr. Garfield. FORECLOSURE. Nothing you wrote above has aught to do with the FACT that the borrower signed the note and mortgage, defaulted, and now must forfeit the collateral. The borrower who doesn’t know to whom he owes the money can file an interpleader and pay the court, which will then disburse the money to the proper party. Oh, that’s right, the servicer takes care of that, so why bother?

    Mr. Garfield, you steadfastly refuse to deal with the reality that the court will grant redress to the borrower upon show of proof that the lender cheated the borrower at the inception of the mortgage, as happened in about 90% of the single family home mortgages since the year 2000. Your useless loan and securitization audits will never uncover the associated causes of action, but a COMPREHENSIVE MORTGAGE EXAMINATION could. If you only knew how to do it.

    The homeowner/borrower has only one way to beat foreclosure and get financial remuneration or the house free and clear. SHOW THE COURT THE torts, breaches, and errors underlying the mortgage. Want a $3 million example?

    http://wvrecord.com/news-2580/233771-quicken-loans-on-losing-end-of-3-million-predatory-lending-verdict

  23. “…The Federal Deposit Insurance Corp., which insures bank deposits in the U.S. and shuts down failing banks, has since 2007 repeatedly settled charges of banker wrongdoing by agreeing to “no press release” clauses that keep the settlements a secret, the Los Angeles Times reports.

    In one particularly glaring example, Deutsche Bank agreed to pay $54 million to quietly settle charges that its New York mortgage-banking subsidiary, MortgageIT, sold bad loans to another mortgage bank, Independent National Mortgage Corporation, a/k/a “IndyMac.” IndyMac collapsed under the weight of bad mortgage loans in July 2008, a notable milestone in the financial crisis.

    In exchange for the settlement, the FDIC agreed not to announce the deal unless it was asked about it, the LAT writes. That was just one of “scores” of such settlements the LAT discovered through a Freedom of Information Act request that turned up 1,600 pages of documents…”

    http://www.huffingtonpost.com/2013/03/11/fdic-settlements-no-press-release_n_2854846.html

  24. Look the easiest path is Ginnie Mae pooled loans because it a fact that once the blank Note were relinquish to Ginnie at the very start of the pooling process, there is absolutely not legal way for the Notes/Loans to every be moved because we know from Congress that Ginnie cannot buy or sell a home mortgage loan, at ALL!

    MY case was made to expose the crime as I lived in Nebraska, where MERS took the NE Dept of Banking to the State Supreme Court and won saying that they were not a “mortgage bank” and to this day there are still not license to do business in the State.

    What my case does is illustrates almost every infraction that could have been committed in the wrong State, which MERS is not registered to do business.

    First the title was not recorded under the original lender making the title (deed of trust) invalid at any time later because it was not done when the requesting party have ownership!

    The lender did not inform the court that it had sold the Note prior to recording the title, and the new lender in Washington Mutual (WaMu) did not inform the court that it purchase the Note and them relinquish all financial interest in the Note to Ginnie Mae.

    Wells Fargo started servicing only the loan in 2006, but when WaMu was seized on Sept 25, 2008, which I feel was the reason for Wells was allowed to take over the servicing of the 1.3 million government home loans in the first place, was they were prediction that WaMu would fail, so they set it up that if or when WaMu would fail the loan were in the possession of Wells Fargo and not that of WaMu so that the loan would not be involved a bankruptcy of as in the none sale, sale to JPMorgan.

    There is no trust Ginnie Mae can place the blank Notes in because under UCC 3 the owner must be in physical possession of the Notes because they are blank!

    The only reason Wells Fargo is in possession of the blank Notes is because they are acting as a arm of first WaMu, then after they were relinquish to Ginnie Mae it impossible to have a servicer because Ginnie Mae is not authorized to collect home loan payment at all, as the are not a lender.

    As these 1.3 million government insured loans (FHA, VA, USDA) are recorded at local land recording offices either under WaMu or as in my case someone else, after Sep 25, 2008 Ginnie Mae needs MERS to step in and pick anybody in the old chain of ownership to make it look as if Wells Fargo purchase the loan at something and that MERS is only acting for that ex-lender, when in fact that lender had already sold all interest in the loan long ago.

    In my case the home loan was closed on Jul 9, 2003 and sold to WaMu on Jul 21, 2003 which is not problem as the lender can sale the loan at anytime, however what they could not do is have the title recorded Aug 11. 2003 by the party that sold the loan of Jul 21,2003.

    why they could not record a title because like a man in the moon they not longer had a financial interest in the loan. But as even if they have recorded a valid title, once the relinquish the endorsed blank Note to Ginnie Mae on Aug 6, 2003, WaMu had no ability to record a thing against my property.

    The trick was finding the document for the different transaction, but bad for Wells Fargo and Ginnie Mae that I was a mortgage loan office at the original bank and knew for a fact the loan was sold to WaMu after we funded the loan because I hand delivered the funding check from the bank.

  25. Look out world…..GE & THE NFL ARE OPENLY TEAMING UP….That can only mean one thing…expect a big ass robbery of the NFLs wealth …soon they will be bankrupt..

  26. Would you too write about document forgery, specifically the assignor using a forged note to assign the assignee assignment of mortgage. What should be argued when signatures and interest rates don’t match to the original instrument? Plaintiff is using a forged note to foreclose. Respectfully,

  27. These crooks need shrinks.

  28. carie….The banks took real loans out in our names from the Peoples Trust, the U.S. TREASURY & never performed on their contracts. That is what they are covering up, the Origination Fraud and the fact, they owe the American People GAZILLIONS …

  29. I need an information regarding what are the requirements of a ” note agreement” in a commercial loan. Do you have an article of the matter. Please help.
    Sent from my Verizon Wireless BlackBerry

  30. Truthfully and honestly, the bank owners, their minions and cohorts have been sucking the American people dry for years. Taking advantage of us by printing as much money as they want, pocketing all of our payments as profits on money they borrow from US, overissuing investments in their own fraud on Wall Street by forgery and counterfeiting our unauthorized autographs and handing US their credit card bills. The bank owners are the RICO business model on steroids.

  31. @American Drifter

    Classic PONZI.
    The subprime was a transfer of collection rights only (to previously falsely defaulted debt)—no funding—no real “loans” (just a little for some “cash-out” here and there)… Mind-boggling amounts of fraud.

  32. The truth is, you can’t teach an old dog new tricks. The bank owners are accustomed to a life of crime and know no other business model other than secrets, lies and deception to defraud and rob all of us. Lie, cheat an steal is the only way they can control the masses. They are way to greedy and it is time for a reality check. If you don’t have a receipt, you don’t have a claim in equity and certainly not a claim to take property. Investment, indorsement or instruction is not ownership….you need a receipt…otherwise those are uncertificated certificates you are holding. They are in fact, securities frauds. Only a trustee can bring a fc and the trustee must have a receipt otherwise they cannot be directed by the shareholders and investors no matter how many claims they believe they possess. Without the legal assignments, no claims can be brought otherwise it would be a free for all. The claimants should be calling their attorney’s and figuring out who they need to sue because it is certainly not us.

  33. Go to care2 sign my petion on”mortgage fairness” hold all banks and mortgage servicing to the law and punish those who break it.My petition is going to CNN and Senator Elizabeth Warren.Demand justice! Thanks Patrick Ainsworth

  34. So, essentially, what they were doing is akin to writing checks on empty accounts… They failed to deposit the Notes which left the accounts empty.

  35. Their aim is clear, keep the people dazed and confused, that way they control. Clearly ..these are not mortgages, they can’t be notes/ negotiable instruments because they were cashed but they have no receipts…..proof of purchases….therefore, there can’t be any trusts if there are no legal assignments and MERS is not a bank.

    The truth is clear, these agreements were never made with us, these instruments and their contracts are all frauds because the issuer of the bills of credit never performed on their contracts…Nothing changes the first place issue….FRAUD IN THE FACTUM….when fraud enters a contract, fraud vitiates everything and renders everything regarding these frauds a nullity…null & void.

  36. This is exactly the infomration I was looing for. Thank you for your valuable and expert input.

  37. What if there was no legal assignment at the onset and they switched trusts during the foreclosure…? It’s all a sham and a fraud and there is no need to go through all of these hoops when they can’t even produce a proof of claim at the onset as the law requires. The law requires a perfection of lien…they needed to create the securities before they engaged in commerce with our autographs and not only that, non disclosure of every aspect of the transaction with our autographs by the Issuer of the credit means all of the autographs were unauthorized. Everything they are doing is INTENTED TO DECEIVE and that can be easily proven…INTENT TO DECEIVE is the main element needed to bring criminal prosecutions against these banksters. Where are the cops…?

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