Levitin and Yves Smith – TRUST=EMPTY PAPER BAG

Living Lies Narrative Corroborated by Increasing Number of Respected Economists

It has taken over 7 years, but finally my description of the securitization process has taken hold. Levitin calls it “securitization fail.” Yves Smith agrees.

Bottom line: there was no securitization, the trusts were merely empty sham nominees for the investment banks and the “assignments,” transfers, and endorsements of the fabricated paper from illegal closings were worthless, fraudulent and caused incomprehensible damage to everyone except the perpetrators of the crime. They call it “infinite rehypothecation” on Wall Street. That makes it seem infinitely complex. Call it what you want, it was civil and perhaps criminal theft. Courts enforcing this fraudulent worthless paper will be left with egg on their faces as the truth unravels now.

There cannot be a valid foreclosure because there is no valid mortgage. I know. This makes no sense when you approach it from a conventional point of view. But if you watch closely you can see that the “loan closing” was a shell game. Money from a non disclosed third party (the investors) was sent through conduits to hide the origination of the funds for the loan. The closing agent used that money not for the originator of the funds (the investors) but for a sham nominee entity with no rights to the loan — all as specified in the assignment and assumption agreement. The note and and mortgage were a sham. And the reason the foreclosing parties do not allege they are holders in due course, is that they must prove purchase and delivery for value, as set forth in the PSA within the 90 day period during which the Trust could operate. None of the loans made it.

But on Main street it was at its root a combination pyramid scheme and PONZI scheme. All branches of government are complicit in continuing the fraud and allowing these merchants of “death” to continue selling what they call bonds deriving their value from homeowner or student loans. Having made a “deal with the devil” both the Bush and Obama administrations conscripted themselves into the servitude of the banks and actively assisted in the coverup. — Neil F Garfield, livinglies.me

For more information on foreclosure offense, expert witness consultations and foreclosure defense please call 954-495-9867 or 520-405-1688. We offer litigation support in all 50 states to attorneys. We refer new clients without a referral fee or co-counsel fee unless we are retained for litigation support. Bankruptcy lawyers take note: Don’t be too quick admit the loan exists nor that a default occurred and especially don’t admit the loan is secured. FREE INFORMATION, ARTICLES AND FORMS CAN BE FOUND ON LEFT SIDE OF THE BLOG. Consultations available by appointment in person, by Skype and by phone.


John Lindeman in Miami asked me years ago when he first starting out in foreclosure defense, how I would describe the REMIC Trust. My reply was “a holographic image of an empty paper bag.” Using that as the basis of his defense of homeowners, he went on to do very well in foreclosure defense. He did well because he kept asking questions in discovery about the actual transactions, he demanded the PSA, he cornered the opposition into admitting that their authority had to come from the PSA when they didn’t want to admit that. They didn’t want to admit it because they knew the Trust had no ownership interest in the loan and would never have it.

While the narrative regarding “securitization fail” (see Adam Levitin) seems esoteric and even pointless from the homeowner’s point of view, I assure you that it is the direct answer to the alleged complaint that the borrower breached a duty to the foreclosing party. That is because the foreclosing party has no interest in the loan and has no legal authority to even represent the owner of the debt.

And THAT is because the owner of the debt is a group of investors and NOT the REMIC Trust that funded the loan. Thus the Trust, unfunded had no resources to buy or fund the origination of loans. So they didn’t buy it and it wasn’t delivered. Hence they can’t claim Holder in Due Course status because “purchase for value” is one of the elements of the prima facie case for a Holder in Due Course. There was no purchase and there was no transaction. Hence the suing parties could not possibly be authorized to represent the owner of the debt unless they got it from the investors who do own it, not from the Trust that doesn’t own it.

This of course raises many questions about the sudden arrival of “assignments” when the wave of foreclosures began. If you asked for the assignment on any loan that was NOT in foreclosure you couldn’t get it because their fabrication system was not geared to produce it. Why would anyone assign a valuable loan with security to a trust or anyone else without getting paid for it? Only one answer is possible — the party making the assignment was acting out a part and made money in fees pretending to convey an interest the assignor did not have. And so it goes all the way down the chain. The emptiness of the REMIC Trust is merely a mirror reflection of the empty closing with homeowners. The investors and the homeowners were screwed the same way.

BOTTOM LINE: The investors are stuck with ownership of a debt or claim against the borrowers for what was loaned to the borrower (which is only a fraction of the money given to the broker for lending to homeowners). They also have claims against the brokers who took their money and instead of delivering the proceeds of the sale of bonds to the Trust, they used it for their own benefit. Those claims are unsecured and virtually undocumented (except for wire transfer receipts and wire transfer instructions). The closing agent was probably duped the same way as the borrower at the loan closing which was the same as the way the investors were duped in settlement of the IPO of RMBS from the Trust.

In short, neither the note nor the mortgage are valid documents even though they appear facially valid. They are not valid because they are subject to borrower’s defenses. And the main borrower defense is that (a) the originator did not loan them money and (b) all the parties that took payments from the homeowner owe that money back to the homeowner plus interest, attorney fees and perhaps punitive damages. Suing on a fictitious transaction can only be successful if the homeowner defaults (fails to defend) or the suing party is a holder in due course.

Trusts Are Empty Paper Bags — Naked Capitalism


Just as with homeowner loans, student loans have a series of defenses created by the same chicanery as the false “securitization” of homeowner loans. LivingLies is opening a new division to assist people with student loan problems if they are prepared to fight the enforcement on the merits. Student loan debt, now over $1 Trillion is dragging down housing, and the economy. Call 520-405-1688 and 954-495-9867)

The Banks Are Leveraged: Too Big Not to Fail

When I was working with Brad Keiser (formerly a top executive at Fifth Third Bank), he formulated, based upon my narrative, a way to measure the risk of bank collapse. Using a “leverage” ration he and I were able to accurately define the exact order of the collapse of the investment banks before it happened. In September, 2008 based upon the leverage ratios we published our findings and used them at a seminar in California. The power Point presentation is still available for purchase. (Call 520-405-1688 or 954-495-9867). You can see it yourself. The only thing Brad got wrong was the timing. He said 6 months. It turned out to be 6 weeks.

First on his list was Bear Stearns with leverage at 42:1. With the “shadow banking market” sitting at close to $1 quadrillion (about 17 times the total amount of all money authorized by all governments of the world) it is easy to see how there are 5 major banks that are leveraged in excess of the ratio at Bear Stearns, Lehman, Merrill Lynch et al.

The point of the article that I don’t agree with at all is the presumption that if these banks fail the economy will collapse. There is no reason for it to collapse and the dependence the author cites is an illusion. The fall of these banks will be a psychological shock world wide, and I agree it will obviously happen soon. We have 7,000 community banks and credit unions that use the exact same electronic funds transfer backbone as the major banks. There are multiple regional associations of these institutions who can easily enter into the same agreements with government, giving access at the Fed window and other benefits given to the big 5, and who will purchase the bonds of government to keep federal and state governments running. Credit markets will momentarily freeze but then relax.

Broward County Court Delays Are Actually A PR Program to Assure Investors Buying RMBS

The truth is that the banks don’t want to manage the properties, they don’t need the house and in tens of thousands of cases (probably in the hundreds of thousands since the last report), they simply walk away from the house and let it be foreclosed for non payment of taxes, HOA assessments etc. In some of the largest cities in the nation, tens of thousands of abandoned homes (where the homeowner applied for modification and was denied because the servicer had no intention or authority to give it them) were BULL-DOZED  and the neighborhoods converted into parks.

The banks don’t want the money and they don’t want the house. If you offer them the money they back peddle and use every trick in the book to get to foreclosure. This is clearly not your usual loan situation. Why would anyone not accept payment in full?

What they DO want is a judgment that transfers ownership of the debt from the true owners (the investors) to the banks. This creates the illusion of ratification of prior transactions where the same loan was effectively sold for 100 cents on the dollar not by the investors who made the loan, but by the banks who sold the investors on the illusion that they were buying secured loans, Triple AAA rated, and insured. None of it was true because the intended beneficiary of the paper, the insurance money, the multiple sales, and proceeds of hedge products and guarantees were all pocketed by the banks who had sold worthless bogus mortgage bonds without expending a dime or assuming one cent of risk.

Delaying the prosecution of foreclosures is simply an opportunity to spread out the pain over time and thus keep investors buying these bonds. And they ARE buying the new bonds even though the people they are buying from already defrauded them by NOT delivering the proceeds fro the sale of the bonds to the Trust that issued them.

Why make “bad” loans? Because they make money for the bank especially when they fail

The brokers are back at it, as though they haven’t caused enough damage. The bigger the “risk” on the loan the higher the interest rate to compensate for that risk of loss. The higher interest rates result in less money being loaned out to achieve the dollar return promised to investors who think they are buying RMBS issued by a REMIC Trust. So the investor pays out $100 Million, expects $5 million per year return, and the broker sells them a complex multi-tranche web of worthless paper. In that basket of “loans” (that were never made by the originator) are 10% and higher loans being sold as though they were conventional 5% loans. So the actual loan is $50 Million, with the broker pocketing the difference. It is called a yield spread premium. It is achieved through identity theft of the borrower’s reputation and credit.

Banks don’t want the house or the money. They want the Foreclosure Judgment for “protection”


54 Responses

  1. Spell Checker. HIDC. To.

  2. And Dwight, if others had hired an attorney early on they wouldn’t be in the situation they are in now. Then others did their homework on the eLements (proof of claim) required for a HDIC and a mere Holder to have standing ti invoke the jurisdiction of the court. . Proof of Claim is required in both State and Federal Court. If you can’t afford an attorney, I advise you to file bk in federal court, its your best chance. Best of Luck to You!

  3. DwightNJ, not everyone posting on this blog knows what they are talking about. Be careful.

  4. @ Deb Wynn ,,

    Yeah it’s the dogbite guy … have photo proof and he lied on his replies to discovery and I have docs to back that up ,, also he denied the existance of the business that the dogbite supposedly hampered him in running resulting in a loss of income ,,, funny thing is he was running the business under the table for 20 years and now I have an IRS 211 claim against all the profits he hid with his tax evasion… I kind of expect him to just jet back to Korea and salvage the money he squirreled away there …. The Korean banks won’t protect him against the IRS … The only problem I have with him is that he is attempting to work against the FP Insurance placed by OCWEN and I have a court ordered negotiation next month which he will affect with this claim. And Yes I already have a MTD in place ,, that was my first filing ,, he denied all my claims which I will be revisiting with government doc proof and Hospital ER surveilance video proof… This guy is toast but he could possibly screw up a critical negotiation…

  5. I didn’t know what Cookie meant by put them on notice .. I now assume it means filing a motion to dismiss? By doing that I prevent them from accomplishing something?

  6. For those homeowner’s who get foreclosed in Colorado
    here is something that you might review

    After the Order Authorizing Sale the lender will send a Cure Statement after you file for Redemption. The lender doesn’t want you to redeem the property so the lender will inflate the Cure Statement with false charges.

    In effect, the Cure Statement is a Lien on the Property.

    Black’s Law Dictionary , (9th ed. 2004) (defining a lien as “[a] legal right or interest that a creditor has in another’s property, lasting usually. until a debt or duty that it secures is satisfied”)
    §38-22-128 Excessive Amounts Claimed
    Any person who files a lien under this article for an amount greater than is due without a reasonable possibility that said amount claimed is due and with the knowledge that said amount claimed is greater than that amount then due, and that fact is shown in any proceeding under this article, shall forfeit all rights to such lien plus such person shall be liable to the person against whom the lien was filed in an amount equal to the costs and all attorney’s fees.

    In Honnen Equipment Company, Inc.,v Never Summer Backhoe Service, Inc. and Kyle D. Korth, Court of Appeals No. 10CA0831 the court citing at p. 8,9 said
    In Wigham Excavating Co. v. Colo. Fed. Sav. & Loan Ass’n, 796 P.2d 23, 25 (Colo. App. 1990) (lien was excessive where claimant “inflated” invoices to include tax cushion and personal loan that were totally unrelated to the construction project);
    This is especially so when the inclusion of the excess amount has the potential to deceive the parties for whom the statutory notice is required. Wigham, 796 P.2d at 25.

  7. Good Morning Sunshine. Someone left a sign in my front lawn this morning. The message reads ” Look Who’s Over the Hill”. I looked over the hill and didn’t see anyone. What’s up with that?

  8. DwightNJ mycookiejar makes a great point and that is to put their ass on notice. If all it took was the Note and Deed of Trust/Mortgage this case would have been over in 2007. If they had an proof of purchase in 7 freaking year they would have provided it.

    The attorneys you have talked to are clueless and are only interested in $5,000 and you losing as they said at the start. Now what I suggest is you file to have the thing dismiss because the party bringing the claim in Wells Fargo is no a party to the contract.

    The Note in front of the court had an blank endorsed, from WaMu which I am assuming that WaMu did stamp because the loan were transferred from WaMu to Wells when the purchase the servicing rights to these loans. But because there are no dates on the Note as to what happen when other than the initial closing is why all this stuff must be verified!

    As mycookiejar said put their ass on Notice!

  9. Dwight
    You have a decision to make you have an attorney that sounds ok willing to help you, Ask him if he has any conflicts oof interest has he ever represented or say gone to opposing councils wedding lol that once happened to me , my god it’s all happened to me and I’m not making this up. I couldn’t if I tried.

  10. I’m sorry but this advice never dates I just drove past my fav sign ( no I’m not still driving)
    ” I am the way, the truth, the life”
    Does that not give you goose bumps!

  11. “It threatens that if I do not prevail, I will be responsible for all admin filing or other incurred costs from the date of the off er until the entry of the judgment and 8% interest computed on the amt of the verdict or award from date of the offer to the entry of judgment. Defts will pursue collection of all recoverable amts including those specified in the judgment and will exercise w/o limitation all collection measures available under the law”.

    Gotta love the threats, intimidating you into a settlement…Hmm. You feel lucky louise? I guess they forgot they could lose and you can get damages, Dah?

    Of course you can appeal AND drag it out, costing them too.

    $2,000.00 really?

  12. Fabulous. I just got an Offer of Judgment from opp. counsel on my breach of contract case against Ocwen. Trial is set for Oct. 13.

    I received an Offer of Judgment in pleading format that says they are offering me $2,000 to resolve any and all claims of Plf (me) against Defendants in my breach of contract case. Trial is set for October 13. It threatens that if I do not prevail, I will be responsible for all admin filing orother incurred costs from the date of the off er until the entry of the judgment and 8% interest computed on the amt of the verdict or award from date of the offer to the entry of judgment. Defts will pursue collection of all recoverable amts including those specified in the judgment and will exercise w/o limitation all collection measures available under the law.

    I know they do not want to go to trial, but if I lose can I appeal or do I have to pay them?

  13. The holder carries succesor liability, and is not free of investor or borrowers claims. Another element of proof for a HIDC is that they take delivery without notice of borrowers claims. Put Them On Notice!

  14. Everything has reached a level of corruption and evil that can only be described as being of Biblical proportions. We no longer have a good justice system in this country going by the injustice that’s been allowed to take place in these foreclosure cases.. We no longer have a good political system in this country going by how they have reacted to this crisis and theft. We are only left with our God and our faith to carry us through. The evil powers that be want your homes, your property, your bibles, your children, your rights, your guns .. we wrestle not against flesh and blood , but against a spiritual wickedness and enemy of the God we serve. There are people in power who control every aspect of our lives that hate our God and hate us too. This is becoming more visible and evident as we race towards Jesus’ second coming.

  15. Hence they can’t claim Holder in Due Course status because “purchase for value” is one of the elements of the prima facie case for a Holder in Due Course. There was no purchase and there was no transaction. Hence the suing parties could not possibly be authorized to represent the owner of the debt unless they got it from the investors who do own it, not from the Trust that doesn’t own it.


    Dow Family Trust v. PH&H Mortgage.WI Sup.Ct. 2014

  16. Darn – that wAs password

  17. So now you know Dwight why the borrower doesn’t get a ” sign on and a oassword” to MERS to check the status of our loan regarding title. Clouded up the yazoo.

  18. Dwight you said
    “How do we fight it ” uh hmm we already Pay high salary to State officials to do their duty to protect public interest/ consumers when I last checked.

  19. AOM is a valid defense in NC state laws have some language about that, check. Non-lawyer stuff.

    Isn’t it fraud to “record” paperwork as an originator, saying you are the lender? And isn’t it fraud to state in court paperwork you are foreclosing in the name of a Trust that does not exist or is/was closed? And where is a “servicer” got injury? This paperwork has been passed around like an old whore…

    Just the tip of this….I say

  20. Deb , yes … MERS seems to be the tool used by the criminal that is left at the scene of the crime. Why did law enforcement allow the MERS theft tool to remain ?? The whole Ponzi shell scheme hinges on the need for MERS to keep it hidden and out of view.

    How do we as citizens fight this and get it removed?

  21. A different lawyer just returned my call , basically told me that as long as the plaintiffs show up in court and have the note and mortgage , the Judge is going to rule in their favor. He told me that I was doing a better job than any attorneys would have done. He said that if I wanted his help to prolong the inevitable and buy a few extra months in my house , he could help argue it .. but at the end of the day I will lose.

    He said the securitization argument is a loser.
    The original transaction not being funded was a loser.

    He thought my only argument was to prove the documents frauds.

    My Assignment of mortgage has known robo-signors and a notary signature that is forged by someone else. He thought that might be something worth arguing about. He feels that fraud is an issue that can be argued if you have some proof of it .. The courts are trying to say we homeowners have no standing to challenge the AOM because we are 3rd parties to it … but my argument is that fraud of any kind is not allowed in the courthouse .. regardless of who is party to it.

    He said he normally charges 5,000 dollars and would need at least 1500 up front and then make payments .. he would charge 150 bucks for a consultation and apply it if I hired him .. but he told me I was doing just as good a job if not better on my own. He couldn’t believe I won a dismissal against Wells Fargo as a Pro Se , he told me that I should become a lawyer , or come work for him .

  22. Deb, you are absolutely right as long as MERS lives, all our property titles are a mess so that the 1% and the banks can take our property with impunity. MERS needs to go.

  23. Neidermeyer
    Honestly why would you waste your time. It’s the dog bite guy yes?
    MTD get it over with surely judge can see through the stupid idiot,

  24. Dwight
    While ever MERS lives we will never have transparency

  25. UkG
    Great stuff

  26. My property taxes are paid up and current because WF has made the payments all along and never stopped. We had PMI insurance on the refinance because we still did not have enough equity according to the 80/20 rule, the refinance was done by Commerce Bank just one year after we purchased the home using Country Wide. We assumed it was the PMI insurance on the loan that was enabling Wells Fargo the servicer to keep making the property tax payments. Maybe I’m wrong to assume that?
    We also had an escrow and once in a while they add money to the escrow. I’m not sure why or how that happens. But if it ever comes down to the issue of the taxes paid , I’m not sure that alone entitles the bank to win the foreclosure case on that issue alone. Wouldn’t a homeowner be granted the opportunity to reimburse the servicer the tax payments they had made ?

    I have attempted to call the attorney in Atlantic City again and he still did not return my call , I’m now thinking he is too close to the Judge in my case and doesn’t like the fact that I had bumped heads so hard with this Judge in the past case where I accused the Judge of Ex Parte communications with Wells Fargo.
    So I have attempted to contact other so-called “foreclosure defense” lawyers in the past week and only had one of them return my call. She told me that she was so buried in cases (bankruptcy) (NJ is at the top in foreclosures nationwide .. most law firms defend by filing bankruptcy or help the homeowner apply for a modification .. I have not yet met a single attorney in NJ who can articulate and present any of the issues that we talk about on this website .. they are a bunch of spineless , lazy, afraid of their own shadow , timid, bankruptcy clerical workers who only want the easy way out for them .. they are not interested in fighting these tough fights.)

    So I am in trouble as far as having to now navigate into discovery and interrogs without any legal help , this is bullshit .. and our wonderful State of New Jersey has not provided funding from the settlement monies they received to help the victims of the wrongdoing of the banks who paid the State the settlement monies. They have not given one dime to helping the victims of the crime, not even thrown a few pennies from their cut of the settlement to form a place where homeowners can get help building their Pro Se defense, nothing has gone to the victims. Our Legal Aid services in NJ doesn’t even defend against foreclosure because they say there are just too many and they don’t have the staff or funds. So as you see, this entire crime is so bad, and so evil that it has even infiltrated our justice system .. the little homeowner who is the victim of the crime gets no legal representation and receives no justice from the Judges who rule inside the court rooms.

    As far as the Note being endorsed in blank , the article posted by UKG about the Romero case .. aside from the issue of special endorsement, the troubling fact that the law simply states that a holder who has rights to enforce simply has to have a blank endorsement is more injustice. The facts have revealed that the banks are fabricating documents, they are adding stamped endorsements in blank at the time they fabricate the fake assignment of mortgage … the whole thing is a joke. In the Romero case they’ll simply fabricate the business records to show the transfer was valid and submit those fabricated records to prove the transfer was valid. It never ends because the courts turn a blind eye to the fact that the banks and servicers have already been caught. So how can any document be presumed as “”true and valid” by a court when we have secret settlements and consent orders out there where these criminal banks paid off our government .. and our government now refuses to tell the judges about the crime that took place?

    And the Judges blindly accept documents from the thugs and act as if they are unaware of the crimes and fabrications ?
    How can we conduct a trial if the Judges are playing this game?

    So in my case you know the Judge is going to look at the Note as having a blank endorsement (fabricated after the fact) from WaMu .. and he will want to rule that this is all anyone needs in order to show they have the right to enforce the note .. a blank endorsement.

    Now Charles is saying that the blank endorsement does not mean they can enforce the mortgage .. Charles says to enforce the mortgage they must show that they paid or purchased the debt.

    I have a big mountain to climb in front of me, I feel overwhelmed.

  27. BNY v. Romero: important lessons for foreclosure practice in New Mexico

    Modrall Sperling
    William R. Keleher
    September 23 2014
    William R. Keleher

    On February 13, 2014, the New Mexico Supreme Court filed its Opinion in Bank of New York v. Romero, 2014-NMSC-007. The opinion in BNY v. Romero describes a case which started badly and ended terribly. The case grew out of an unnecessary, expensive, poorly documented loan to two small business people living and working in an economically depressed and poverty-ridden county in New Mexico. The silver lining to the case, aside from employing a few attorneys, is that the Supreme Court reviewed and restated some valuable rules that all foreclosure counsel should review before filing their next complaint. It also serves as a very powerful reminder that lenders must follow their own underwriting policies. In Romero, the failure to follow those policies made a bad situation worse.

    Put Your Ducks in a Row Before Filing Suit

    The time for client and counsel to “put their ducks in a row” is before filing the complaint. In a foreclosure action, the plaintiff will have to prove that the plaintiff is entitled to enforce the note and mortgage and that the defendant has defaulted on the note and mortgage. The rest, such as the priority of other claims to the property, the amount due on the note and refuting any defenses will also be critical, but before even arguing about that, the plaintiff must show it is authorized to enforce the note.

    The right to enforce any claim is known as “standing.” As the Court pointed out, “the lack of [standing] is a potential jurisdictional defect which may not be waived and may be raised at any stage of the proceedings, even sua sponte by the appellate court.” 2014-NMSC-007, 15. In Romero, the Supreme Court found that the plaintiff did not have standing at the time the complaint was filed so the case was dismissed. The plaintiff had spent time and money, gone through discovery, one trial, an appeal and then it was told, after all that effort and time, that it did not have authority to file in the first place. If you are the plaintiff, that is what we call a “bad result.”

    The Court found the plaintiff did not have standing because it could not prove that it was authorized, either as the holder or as the transferee, to enforce the note at the time the case was filed. The most straightforward way to prove standing is to show the Plaintiff is the “holder” of the note. In order to be the “holder”, the Plaintiff must show it has possession of the note and, if it is not the original lender that the note is either indorsed to the Plaintiff, or the note is indorsed in blank. So, to be a holder, the Plaintiff must show it has possession of the original note and, if required, the proper indorsement.See, §55-3-301 NMSA 1978.

    In Romero, the original note introduced into evidence at trial had two undated indorsements. One was a blank indorsement by the original payee on the note and second was a special indorsement by Equity One to JP Morgan Chase. Of course, if the note had only had one blank indorsement, the plaintiff could have prevailed as the holder of the note. The problem, of course, was the special indorsement made to JP Morgan Chase. 2014 NMSC-007, 26. Apparently, there was no evidence introduced at trial to show that either JP Morgan Chase had transferred the note to the plaintiff or adequately explaining that the indorsement to JP Morgan Chase was invalid for some other reason. In other words, the original note showed, on its face that it might be owned by two different parties. Accordingly, the Supreme Court found that the Plaintiff had not proven it was the holder of the note.

    If the Plaintiff is not a holder (that is, if it does not have the right kind of endorsement) the plaintiff will need to prove it was authorized to enforce the note as a “non-holder in possession of the instrument who has the rights of a holder.” Id. The plaintiff attempted to make such a showing but did so using hearsay evidence. The plaintiff called an employee of the loan servicer to testify that the servicer’s records “indicated that the Bank of New York was the transferee of the note.” So, what is the problem? The witness had clearly looked at the bank’s records and the bank’s records said the bank owned the note. The problem with the testimony was the witness lacked personal knowledge that the note had been transferred. His only personal knowledge was that he had seen the business records. So his personal knowledge was based on hearsay. The fact that the records he had seen were business records did not make his testimony admissible. The plaintiff argued that his testimony should be admitted under the business records exception to the hearsay rule but the New Mexico Supreme Court pointed out “the business records exception allows the records themselves to be admissible but not simply statements about the purported contents of the records.” Romero, ¶ 33. In other words, the Plaintiff might have prevailed if it had introduced the actual records into evidence, but because it did not introduce the actual business records into evidence, the Plaintiff lost.

    Other evidence at trial showed that the alleged transfer of the note had not even occurred until months after the foreclosure complaint had been filed. According toRomero, the plaintiff must have standing at the time the complaint is filed. The foreclosure practitioner in New Mexico should be sure that all the transfers are complete and provable before the complaint is filed. In other words, the plaintiff needs to put its ducks in a row before filing the complaint. In Romero, the plaintiff filed the complaint without first being sure that it would be able to prove that it was a holder, or otherwise entitled to enforce the note and mortgage.

    A Bad Situation Gets Worse

    After the Supreme Court found that the plaintiff lacked standing to pursue the foreclosure action, the Supreme Court could easily have remanded the case with an order that the foreclosure judgment be vacated and the case dismissed. The plaintiff could then have put its ducks in a row and refiled the case. The court, however, decided to address other issues presented in the case. One of those issues concerned the New Mexico Home Loan Protection Act, NMSA 1978, §§58-21A-1 to -14 (2003, as amended through 2009) (“HLPA”). The Court opined that the HLPA “prohibits home mortgage refinancing that does not provide a reasonable, tangible net benefit to the borrower.” In this case, the borrowers had an existing home loan but they were approached by Equity One, Inc. to refinance their home. Here is a summary of the differences in the two loans:

    Click here for the table

    Romero, ¶3.

    As can be seen, it is easy to see how a consumer, court, or other observer would consider the increase in interest rate, increase in total payment and opportunity to pay $12,000 in origination fees and closing costs as a bad deal. Of course the Romeros did receive a $30,000 cash payment, but that payment did not automatically fix all of the problems with the loan. HLPA requires certain loans to show a “reasonable, tangible net benefit” to the borrowers. In Romero, the loan described above was determined not to be a net benefit. In reaching that conclusion, the Court found that the lender has to consider the borrower’s ability to repay a loan in determining whether there was a net benefit. The lender, of course, argued that the $30,000 cash payment to the borrower (after paying $12,000 closing costs) was a “net benefit” to the borrower. The Court found, however, that because the lender failed to follow its own procedures in underwriting the loan and confirming that the borrower had an ability to repay, indicated that the net benefit was not real. The Court rejected the contention that the lender could rely upon the borrowers’ claim that they earned $5,600 a month. The Court held “a lender cannot avoid its own obligation to consider real facts and circumstances that might clarify the inaccuracy of a borrowers’ income claim.” Citing, (G) NMAC.

    Romero Is Not the End of the World

    When first published, Romero caused some initial concern among lenders and their counsel. Really, though, the case stands for two propositions.

    First, the plaintiff must have standing before it files its complaint. That has been true forever, so nobody should be surprised.

    Second, lenders need to follow their procedures when making loans. The lender in Romero had procedures designed to require the originator to be sure the loan complied with the HLPA. Those procedures were consistent with good underwriting practices. So, in some sense Romero simply reaffirms that bad underwriting and a failure to follow underwriting procedures will lead to bad loans.

  28. Merchants of ” Death” . Good One Neil! Charles, you said you were a loan officer, can you explain this loan product for us?

  29. *** Off Topic ***

    Can someone please point me to some great examples of counterclaims against a sham “personal injury” claim ,, I’ve got the ironclad proof I need to shut the plaintiff down ,, but I want revenge… and cash …


  30. Cookie do you still want to talk about escrow accounts you have no clue on?

  31. mycookiejar so the bank was going to fc on you because you were making payments? But you got the monies to pay it in full, but you have not paid it in full?

    Nobody here want a house for free as we want the fair equity stake that we are involve with, and that why attorneys don’t do us any good!

  32. mycookiejar why do you think I have not gone to a state court for this and I went with the Federal route? I am whistleblowing for the entire enchilada which brings with it damages and treble damage!

    What your attorney telling you?

  33. Why don’t you Pay an attorney in the jurisdiction your property is located. Pro Bono, Free House, Free Public Services… Blah blah blah. Where do you think you are? The Land of the Free?

  34. Purchase and Sale Agreement. That’s It! Consideration, my dear Watson

  35. mycookiejar, first you must be honest with yourself as to the story your telling us, and this thing you got going on does not make sense when you say that your willing to pay in full the amount owed, and then you gives us some estate bs. If you got a purchase agreement for whatever the amount and a canceled check or electronic transfer what the problem.

    Or if you got a loan and you have got that Note and pay the amount on the amortization amount for this month what owed in full what the problem.

    Some one does not agree that the amount is correct but you got the paperwork Ms Title Lady! Stop bs us with this craziness, as everybody got to know your not telling the whole truth! Have your team of attorneys write in here to explain to us!

  36. Maybe I was being unreasonable. I thought going back to the starting line and closing escrow with the sellers estate would be start . Returning what was stolen, including our idenity, our credit and the title to our life estate.

  37. Charles, you have not got it quite right yet, but don’t give up. . Its not about winning or losing. Its about finihing what you started.

  38. After encountering multiple servicer errors we chose to payoff the loan and conclude our business with them. They fought us tooth and nail. So I called the taxpayer backed insurer and informed them we were perfectly capable and willing to pay the balance and not let the servicer make an ins claIm payout on the taxpayers. That the servicers were unwilling to cooperate in fixing the title and giving me a payoff, intentionally lying about the defaults, destroying our credit and hell bent on FC. That was Long before your FC in 2011 Charles. And I didn’t expect a reward. I reported because it was the right thing to do.

  39. mycookisjar the loan is not void at this time and there going to be an escrow account to pay the taxes and ins as this is part of the servicing agreement.

    Because you never process a loan you would not understand that all government insured loan have an escrow account in the payments to pay the taxes and ins. Most all Fannie & Freddie loan will also have the same set up unless the loan at a lower LTV and they paid an amount to not have the escrow account. There is usually a charge to the rate if there not an escrow.

    The more we talk the less I know that you actually don’t know. Closers of loan only process that loan documents but don’t have any functions with these documents through the course of the loan.

    cookie this is not the site for you because you problem is other and you only offer doom and gloom!

  40. The party avoiding my claims filed a document saying they had paid the estates RE taxes the past 3yrs and a FP ins policy. This half of the estate has the evidence to prove otherwise. Run Jackass Run! The 2nd time around is definatly Criminal. Jackasses are fast but they can’t out run the Law! They may however have difficulty maintaining a lawfirm with Ethics! Right Neil?

  41. I’m puzzled to think that you think that people who don’t pay what they owe, don’t pay the taxes or ins, and don’t pay an attorney should get a free ride on the taxpayers. But then again you have this theory the taxpayers are going to make you a millionaire. Pipe Dreams!

  42. There is no escrow if the mortgage is void. State Laws vary on tax sales and tax redemptions. Something you obviously know nothing about.

  43. mycookiejar they did not drop the fc and its not up for tax sell, the taxes I am sure the servicer has maintain, if not the thing would have already been sold. I don’t know if Dwight up the creek because he managed to fight them out for 7yrs and what attorney was going to be able to do that?

    If there were attorneys that understood this mess then I would agree with you but do you see them out there? When you have delinquent taxes they are owned to the state, so if the homeowner or lender does not pay these taxes the state steps in and sells the property for the amount in the rear.

    I am mostly puzzled by your advice when it know that people don’t have the funds to hire an attorney who not going to get this payday when in fact the person is still in the home and not fc.

    Dwight got a chance of at least getting a modification and then trying to figure out how after the 5yrs either be able to handle the increased payment or have other option available. One is if they Wells Fargo in there negotiation are made to permanently lower the interest rate to 2% and lower the balance to the 75% LTV they required BOA to do with pooled government owned loans.

    Since Dwight’s loan is actually a WaMu loan that was blank endorsed, I believe that his stalled procedure give him to Jan 2015, and surly the Wells deal will be done. But that his loan is also a Fannie loan allegedly and part of the FHFA been already handled, but not WaMu because its not been address, but it going to because if all the other banks in the big 5 mortgage lenders have reached agreement with the Fed Gov, I don’t see the “failed bank” in WaMu not conducting better than the other four still in business.

    It not great encouragement knowing the attorney situation to say, he got his shit up the creek without a paddle, when you don’t know at all what his chances are!

  44. Until Charles comes to the realization why they drop the fc and let it go to tax sale under another one of their enities, he will still have his head up his ass. With Dwight, the SOL ran up the clock. He’s still there so he has that going for him. But without an attorney he is up shit creek without a paddle.

  45. Neil says that maybe the closing agents were also fooled? Neil not presented any proof as to funds being given to bank to make these loans, when we know banks borrow monies, and we know that brokers don’t have the monies to make and hold loans.

    Until Neil come to the realization that you must be license to originate loans, his theory of monies to actual fund the loan are those of the investor. However who are these investors, and are these investors license home mortgage lenders? The answer is No! The debt would be falsely represented as a home mortgage loan, but the party extending the monies according to Neil cannot place a Security Interest against the properties, but these investors how are purchasing the securities (one in the side according to Neil) are wanting to collect in the event of default the guarantees of a 100% securities and not the 50% amount the foreclose brought and 10% or so insurance claim.

    Now maybe Neil got some document stating that these fund are diverted and are being used to fund loans, which the monies from securities are used for future origination and is the reason Ginnie Mae first created the securities program in the first place back in 1970.

    Neil taking the leap that because the monies arrived let say from BOA for the ABC Mortgage funding, that the loan actually a BOA loan. ABC Mortgage has no other way of wiring the monies to the closing agent.

    What judge allowing that on a hunch without documentation or insider testimony that this is the case. Is Neil now a banker and is explaining how bookkeeping in the industry is handled? This is exactly why law enforcement is handicapped, because the agents investigating the cases don’t have on the job training as a banker, and don’t know exactly how these products work.

    There not been a case of agents solving these crimes without tips, because these folks are not in know. Thus is why its taken 7 year and this is coming up. But once again we have someone that wants to invent something instead of taking what in front of you that in the county records forgeries are submitted for banks that don’t have any financial interest in the loans.

    The courts are now coming to understand that down the hall, in the records section of the court that there are thousands of forgeries all done the same way, and when challenged the criminal does not want to present proof of purchase….red flag!

    How in the case of DwightNJ does a bank not in 7yrs of trying to foreclosed does not the bank not present an endorse Note and receipt and take away the claims being made by the homeowner? But after 7yrs and no payment and no attorney the judge allows the case to go forward, while not listening to the bank to grant them the right to foreclose? It because DwightNJ has a point and that is “show me the receipt”!

    Neil almost there but his ego got to get out the way!

  46. The lawyer told you the truth. The questions are how much debt is owed by Whom and to whom. You don’t need an attorney to get a title report (buyer prelim title policy). I’m sure I shared that info.

  47. Good Girl! Those of you with DOTs … Got the Royal whammy. I would NEVER agree to a DOT and let some jackass gamble with the title to my estate on the secondary market. TRUST FAIL. Assets Revert Back or Escheat because no one claimed them? Or lost them to tax sale? They don’t tell me nuttin, I just think a lot and ask a lot of questions and follow directions.

  48. When I went to an atty to get a title opinion, they told me that they were not going to do it, in part, because I was in litigation and was told that their insurance would be dinged. I asked if I could sell my house, and I was told sure you can as long as the debt is extinguished in the transaction. Basically, the servicers/trusts/banks do not own your house or the note, they are collecting money that is not owed to them, and you are the only one who owns your home. Deb, look up wrongful foreclosure.

  49. Up on appeal cookie
    Then we shall see

  50. Deb, did you Nail them for ConversioN?

  51. That’s it throwing this phone out
    – Right to possession. Over 4 years living there and they never had right to possession.

  52. Sold. ( oops).
    The new owner actually never had tight to possession . Now what

  53. Neil
    They sdd my house fior $410,000
    Someone got that money

  54. Now that’s the Magic Question Neil. ” Why wouldn’t they accept payoff? “. Why go thru such lengths to get a fc? It should be as simple as Apple Pie … I payoff the loan and I get the mortgage lien released, Right? But Wait, there is no lien. Go Figure.

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