Do you need an expert witness in foreclosures?

Possibly not. There are many procedural hurdles that Judges are now beginning to enforce that were being avoided before. But generally, the lawyers, fact witnesses and the judge don’t know anything about what was going on with this loan or that transaction.

Why does there need to be an expert? In the context of securitized loans or loans subject to claims of securitization the terms, methods and flow of money and documents is extremely complex, beyond the scope of knowledge of an ordinary person, and beyond the scope of knowledge of an ordinary Judge. The simple answer is that the note and mortgage are unenforceable and therefore the foreclosure is a sham. The secondary answer is that under the actual facts, the homeowner owes a debt and some investors are due payment, but they are due payment from not only the borrower, but also the servicer, the insurer, and the counterparties on credit default swaps.
Both the ownership and the balance are what is at stake here — resulting in either a money judgment for the creditor (the real one, if they step forward or even have notice of the proceedings) or a foreclosure for a sham party if the facts are ignored.
The terms alone, as per the glossary and table of contents of the main securitization documents,require translation into lay language with an explanation of how they are used. In the context of the world of Wall Street, the actual workings of this scheme were andremain “counter-intuitive” andrequire explanation from a person who has a deep understanding of the securities markets, and how theobjectives of the intermediaries conflict with theobjectives of the real persons in interest.In an ordinary stock transfer, the real parties are the buyer and the seller. In the case of mortgage loans generated by an intentionally obscure system, the real parties are the investor creditors as lenders and the homeowner as buyer. But the way the system was used the banks were able to pose themselves as the real parties in interest on both ends.

Most Judges demonstrate their lack of knowledge by asking the question “What difference does it make whether the loan was securitized or not?” or “What difference does it make whether the loan was subject to claims of securitization?” or worse ruling that the securitization documents are irrelevant when the only only way anyone could state a claim is by virtue of documents in the securitization chain like the PSA, the Prospectus, the Pooling and Servicing agreement and the Assignment and Assumption Agreement that governs the borrower’s “transaction.”

The job of the expert is to answer the question about what difference it makes to the burden of proof, the evidence, and of course the outcome. The difference is that in the way  most cases are framed is that the securitization never really happened. So the investors got nothing for their money except an empty promise from an empty trust and the borrowers were lured into a deal where they knew nothing about the identity of the lender nor the terms and compensation of people who received that compensation by virtue of the claimed origination of the loan or claimed acquisition of the loan. In most cases foreclosure is contrary to the interests of both the lender and the borrower.

But it is very much in the interests of the intermediaries who shouldn’t have that choice. The borrower certainly didn’t agree to that because the information regarding securitization and table funded loans, aggregators and Trusts was intentionally withheld at closing and frequently withheld even at the time of the acquisition of an existing loan.

The most basic answer to the questions posed is that the contract for loan, which must exist as a premise for getting a note and mortgage signed, is completely absent in many cases and most probably in this case. It is disguised sometimes because the originator is a lending institution. But my discovery in other cases of dual tracking underwriting shows that they treated loans intended for securitization entirely different than the loans they were making for their own portfolio. As you can see the thrust of all underwriting and due diligence is on the underwriter (who is usually also the Master Servicer, controlling everything), neither of whom was disclosed at closing and both of whom received huge amounts of fees and profits that were not disclosed. Under TILA these undisclosed profits are at the very least a set-off against the amounts  alleged to be due.

The most basic problem is that people forget about the loan contract, which never exists as a single document in which the “lender” makes representations and warranties regarding its ability as a lender and the borrower does the same. They agree that the lender will loan money and that the homeowner will borrow it. They become debtor and creditor. And the terms of the contract are spelled out in this imaginary contract which arises by operation of law instead of the usual way of writing it out. But the contract must nevertheless exist or the note and mortgage are unenforceable. As previously noted in these articles all contracts require offer, acceptance and consideration.

While the attack on consideration is the easiest target, it is also true that the lender and the borrower agreed to different terms that were never disclosed to either one. In the absence of an executed contract, the note and mortgage should have been returned to the homeowner and there would have been no funding of the loan. The fact that the closing agent chose to take money from an undisclosed fourth party investor or a known undisclosed party acting as a conduit aggregator, does not mean that the “lender” named on the note and mortgage made the loan and therefore does not mean there was consideration.

For more information please call 954-495-9867 or 520-405-1688.

6 Responses

  1. Have you ever heard of a closing taking place in a food court and no lawyer present and we never received a copy of the note, mortgage or any closing documents that are required to satisfy the terms of a legal contract? Well this is just one of thousands of violations that resulted in our paid off home being illegally stolen from us. Did we have proof of everything you ask? Yes we did but when you have a lawyer that is scared of the Judge who happens to be UNETHICAL and has a wife who is an attorney for the #1 big bank accused of illegal foreclosures which we later discovered than you would be like us and be a helpless victim but who has gained so much knowledge and will not give up until JUSTICE is served. Our story is going to be exposed and I will devote my time to educating others and preventing others from having their homes illegally stolen by a party that had no legal right to collect, enforce or foreclose.

  2. Neidermeyer-
    I thought it was the Fair Debt and Credit Recovery Act? But the again it may be the Fair Debt Credit Protection Act.
    You are correct I think- I’m probably just confused and misguided.
    Thanks for pointing this out!

  3. @ Ian ,

    On first read I thought you meant FDCPA ,, I had never heard of FDCRA ?? , I still think you meant FDCPA but may have meant FCRA

  4. Neil, there you go again, “under the second circumstance, the homeowner owes a debt…” .
    The homeowner had no idea that if they are 31 days late that the loan is in default, and as such, is written down to zero, insurance payments are triggered, and the “loan” sold to a third-party debt collector for 2 cents on the dollar. The hapless homeowner gets his act together, and continues to pay for 30 years.
    And you may note that under the FDCRA, a “debt collector” may attempt to collect not a penny more than they paid for the debt.

  5. Do they ever cave just because you show up?

  6. This is only the tip of the iceberg. Bigger people than me are exposing this now.


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