Hawaii Appellate Court: TILA Rescission is Effective

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see Hawaii TILA Rescission -smith

U. S. Bank lost another one. As expected the Appellate court was timid even though it was emphatic on certain points. Although the decision was issued it was not slated for publication (yet).

The situation in this case is the same as Jesinoski with a few other wrinkles. And fortunately the Appellate court decided that comments from some trial court judges notwithstanding, the U.S. Supreme Court CAN tell all other judges on every bench what to do. That is why SCOTUS exists — even if they are not right, they are final. What SCOTUS said in Jesinoski left no room for wiggling — and it is the law of the land.

So in this case the Court overturned virtually everything done by the trial judge and remanded the case for further proceedings consistent with the decision. The rescission was indeed effective without a lawsuit by operation of law leaving no loan contract, no note and no mortgage.

But the main reason I am writing about this decision is to point out some assumptions that are contained in the case and to point out the real argument, especially when the rescission is sent many years after the original paperwork was signed.

In the Hawaii case it is stated that the loan was indeed consummated as of a certain date. I don’t know if there was evidence to support that or if they just assumed it from the date of the paperwork. My point on these pages has been that attorneys from homeowners should admit nothing for the simple reason that none of what appears to be true is actually a valid assumption.

Do not assume that there has ever been consummation and for heavens sake don’t admit it. You are admitting to fact about which you know nothing — except for self-serving comments from parties who have been repeatedly sanctioned for lying, fabricating documents and forging documents. I understand your problem, to wit: if the originator never made the loan, then who did? And the answer should never and can never come from the borrower. It must always come from the lender which is why the Truth in Lending Act (TILA) exists.

Nothing can erase the fact that in nearly all originations the named party on the note and mortgage (or deed of trust) was not the lender in any manner, shape or form. Even when you see the name of one of the mega banks, they were almost always using money diverted from the REMIC trusts rather than FOR the REMIC trusts.

The reason this is important is simple. it’s the law. No lender can complete a deal without disclosure of the identity of the lender because the law of the land (TILA) requires the disclosure of the lender and it is virtually black letter law in common law precedent that a debtor must be presented with evidence of the identity of his creditor. This is not a matter for philosophical speculation as to what the law SHOULD be, it is well settled as to what is contained in TILA and several states have similar provisions in their statutes to prevent deceptive lending practices.

So the fact that money hit the account of the closing agent (usually hours, days or even weeks or months or years after the paperwork was signed) does NOT mean and one should never admit that the money came from the payee on the note.

No money=no  consideration. No consideration =no enforceable contract. No enforceable contract=note and mortgage void and invalid — unless some party comes along and pays for the bad paper — in which case the risk of loss shifts the maker on the note and mortgage BECAUSE THAT IS THE LAW. See UCC article 3 and article 9. If payment is involved then the paying party becomes a holder in due course in which case the maker must pay the holder in due course and then seek remedies against the parties originating the fake loans.

So the first rule of rescission analysis is whether there any actual consummation of a loan contract wherein the SAME PARTIES that exchanged an offer and acceptance of terms, also were parties to a financial transaction in which money exchanged hands. If the answer is no, then there is nothing to rescind because there is no enforceable contract, but it is possible that a notice of rescission might be a short cut to making it known to the world that the recorded mortgage is void.

If the answer is yes, then when was consummation completed? — given the fact that the money on a loan in the best of cases is not released to the closing agent until some time AFTER the time when the prospective borrower signs the closing documents.

My point is that these are questions of fact wherein only the party claiming to be lender or creditor or holder has the information or access to the information. So in order to proceed with collection or foreclosure they must plead and prove that a loan contract was consummated as of a certain date (and maybe time). Of course  if the borrower concedes or admits that the loan was consummated on a certain date, then the debtor is stuck with a date of consummation that most probably never happened.

The more basic point procedurally is that the moment of consummation is a question of fact that should be denied in almost all cases because either there was no consummation between the debtor and anyone in the chain relied upon by the party seeking to collect or foreclose, in which case the note and mortgage are void — or there was consummation in which case the loan contract, note and mortgage are void because the law says they are void. Justice Scalia could not have been more clear when he said that the statute makes no distinction between disputed and undisputed rescissions.All notices of rescission, whether right or wrong, are effective upon mailing. Period. Why? Because that is the law of the land.

And the court may not read in its own view of a statute that is clear on its face. Thus when a court chooses to ignore a rescission based upon the presumption that United States laws don’t apply in his courtroom, or because he thinks he knows who would win a case seeking to vacate the rescission and reinstate the mortgage and note, or because he thinks that the party seeking collection and foreclosure could still file a lawsuit which in all probability the alleged “holder” (nobody ever claims to have holder in due course status meaning they never paid for the paperwork), the court has accomplished the following: (a) by ignoring the rescission the court has permanently made title clouded and unmarketable (unless the court vacates the rescission), (b) by presuming that the party seeking collection and foreclosure has standing the challenge the rescission — without the note or mortgage, the court has turned substantive and procedural law on its head and (c) the court has overruled SCOTUS which in our system of government is not an option.

The over-riding point is that if anyone wants to challenge a late or otherwise “defective” rescission they must (a) have standing without using the note and mortgage (b) recite that the rescission is effective (c) allege that the rescission is wrongful and (d) pray that the court vacate the rescission and order reinstatement of the note and mortgage. And one more thing — they must file within 20 days of receipt of the notice. Why? Because it’s the law.

The fact that none of the parties seeking collection and foreclosure can conform to these simple requirements speaks volumes about  who they are and who they are not.



49 Responses

  1. What is the cute for this case. I have a similar case on appeal from the Third Circuit.

  2. Does anyone have a sample pleading of an action for failure to recognize the rescission and Unwind, return all that has been taken…? naturally in Federal since it is a violation of TILA … Or anyone want to work together on one??? Contact truthmonger6@gmail.com

  3. Love it love it!! Except for one thing… UCC 3, why can you not see that it is not NOT an “unconditional promise to pay”????? It has a condition precedent, and then there are the conditions that “The Lender or anyone who takes this note by transfer and is entitled to payments under the Note..” Those are conditions and quite frankly the security strip of the instrument to prevent this type of abuse. It does away with all the bullshit they are doing… no provision for any GD “assignment” signed in blank or lack of consideration because the “taker of the instrument is required to “take it” and it must be by “transfer” and , and both all three, they must “be entitled to payments under the Note…”
    There is also the other parts , “by and between” and all the other “optional” clauses, these clearly indicates that one takes it with full knowledge that it has conditions, defenses and requirements especially consideration else they are not “entitled to payments under the note”. A “negotiable instrument” has no conditions and any jack ass can pick it up and cash it unless it is incomplete or on its face substantially altered as to render it void. Grrrrrrr. When are people going to get this?? They are misapplying the UCC and of course my question has never been answered, : We are not commercial entities so how can we create Commercial instruments?? and how does the UCC Uniform Commercial Code apply to our private instruments???

  4. Got some phone calls this a.m. that some people could not post to the LivingLies blog. Is there a problem with the WordPress site?

  5. greg how can we get scot to help with affidavits.

    thank you

  6. Thx Kali! I have the summaries of cases from when the site was up a few months back. I’ll go over the link should help looks like I’ll have to file HBOR, TILA complaint and have UD joined or stayed. Getting over the flu so need to catch up.

  7. 2016-01-07 Interview & Q&A with Scot: a recent ex-patriot from 17 years in the mortgage banking industry… Scot started out as a escrow agent doing closings, then advanced to mortgage loan officer, processor, underwriter, branch manager, mortgage broker and loss mitigator for the banks. Interestingly, he says,

    “Looking back on my career I don’t believe any mortgage closing that I was involved in was ever consummated.”

    Points covered:
    1 lack of disclosure and consideration
    2 substitution of true mortgage contracting partner
    3 unfunded loan agreements
    4 non-existent trusts
    5 securitization of your note and bifurcation of the security interest and
    6 how to identify and prove the non-existence of the so-called trust named in an assignment which may be coming after you to foreclose

    recording link: http://recordings.talkshoe.com/TC-139335/TS-1039673.mp3

  8. @ Hammertime

    Look through Cal HBOR files at the link below:


    More to follow.

  9. @ Hammertime

    I have little familiarity with the UD process.

    I was going to recommend http://www.calhbor.org, but it appears to be recently deactivated. That is very unfortunate because it was a really good resource for Kalifornia litigation on the Homeowner’s Bill Of Rights, and if I recall correctly it also included useful UD content.

    It was a good decision in refusing mediation, as agreeing to that process waives substantive rights.

    I’ll look through some archives and see if I can dig something up on UD.

  10. Hi Kalfornia, are you familiar with unlawful detainer process is CA? I’m thinking about the best approach to exchange documents although I may need to question the court process. They attempted to get me in an expedited 1 day trial I did not agree to and and used an independent consultant as their rep to get me to agree to be evicted. I may have ur email and some previous posts I’ll try to review or send info. Thx!

  11. @ greg

    I should have asked if the person named scot that you are interviewing is the same person named scot that posted this:

    scot, on January 5, 2016 at 1:42 pm said:


    I received an email from Neil Garfield that you are seeking copies of the alleged original promissory notes that have been submitted multiple times in foreclosure cases but they do not match. I can supply you with this. Some are missing the county register of deeds stamp some aren’t. Some have the servicer bar code some don’t and most are missing the hole punch on top of the documents. The hole punches were place on all the documents in the borrower’s mortgage file sol they could be clasped in a file folder and stored for safe keeping. FYI, I spent a lot of years in the mortgage industry.

    I thank you for your interest in this matter. Let me know if I can be of assistance to you. Below are a few other points of interest you might be interested in regarding this foreclosure scam. All of which can be easily proven.

    The notes were never funded at the closing table. The borrowers were tricked into thinking the lender named on their note and mortgage (funded their note). That the lender named on the note and mortgage provided the money. In reality they never provide one penny. The source of the funds came from an unnamed third party. Everyone but the borrowers knew about this. The even the title companies and escrow agents knew about this but they never informed the borrowers. Why? Some of the alleged lenders state they were using a warehouse line of credit. This would be legal is that is what they were doing. But as you dig into this mess you will find nothing is what they say or as it appears. This is very easy to prove. This is why a lot of alleged mortgage banking companies went bankrupt and out of business in 2007, 2008. They never funded any loans. They were paid a big fee to just originate and rent their name. By rent I mean allow their names to be put on the note and mortgage. This is called table top funding or corresponding lending. But there was one clause in the agreements that caused these companies to shut their doors. If a certain percentage of the loans went bad these alleged mortgage banking companies had to buy back the notes. The question is how can they buy back the notes when they didn’t have the money to fund the notes in the first place. Ask me how I know this.

    Because the notes were never legally funded. The recording of the mortgages and notes at the local county register of deeds offices are all illegal.

    Most assignments of mortgages do not take place until a legal foreclosure action has been filed. There are major problems with this. The banks attorneys did not fully think this one out. The US Supreme Court ruled that if you assigned a mortgage note there is no need to assign the mortgage because the mortgage is a incident of the note. Without a note there can be no mortgage. But if you assign the mortgage you must also assign the note at the same time. If you don’t the mortgage immediately becomes void and the note immediately becomes unsecured. Back to my point. The Banks are all claiming the notes have been securitized. There are way to many red flags raised with that claim. But for this point the problem is for the securitization to happen the banks most legally create and register a trust and than register the trust with the SEC. When registering the trust with the SEC they file a document called a Pool and Servicing Agreement,. (PSA). In the PSA it states the specific chain of custody the note most travel in order to get into the trust. Now this is where it gets interesting. If the mortgage follows the assignment of the note why are they recording an assignment of the mortgage. If you look at the assignment of the mortgages close you will see that the assignment is from the alleged original lender listed on the note and mortgage to the foreclosing trust. But according to the PSA in order for the note to make it to the trust it must be assigned at least 3 separate times. So by filing and submitting the assignment of mortgage from the originator to the trust they are admitting that the note was separated from the mortgage. That the originator kept the mortgage but sold and or assigned the note and did not assign the mortgage until years later when someone on behalf of the trust filed for foreclosure.

    Second most of the assignments are signed by the foreclosing attorney. There is nothing wrong with this accept the according the PSA the notes must be in the trust with in 90 days of closing and in order to be accepted they must have the mortgage with them. But by filing the assignment of mortgage date years after the closing they just admitted none of the notes had any security attached to them.

    Third most of the assignment of mortgages were what the banks and the press are calling ROBO signed. Why hasn’t and why doesn’t the press call it what it really is. Its forgery, fraud. Each notary has their signature on file in their respected state. Just request a copy of the signature from the appropriate Secretary of States office and they will forward the copies of the signatures. Most of the time you don’t even have to give the names of the signatures you are requesting. They will tell you the names before you get a chance. It wold be nice to to Forged Documents instead of ROBO signed documents in a headline.

    Another very BIG POINT. The trusts do not legally exist. This is one of the very easiest things to prove. You need to go to the SEC website and look up any trust that is foreclosing on a borrower. You will see that every trust is reporting to the SEC that they are registered as a trust in one of two states. New York or Delaware. Next go to the appropriate state government websites and do a search for these trusts. They do not show up. Not convinced yet. Neither was I. So I called the Secretary of States office to confirm my findings. They told me no such trust were ever registered in their states. They will even send a letter of attestation stating this. We even did a Freedom of Information Act request. The trust do not legally exist. When I notified the SEC of this. They told me they do not verify the information on the registration request. But they did tell me to file a IRS whistle blower complaint and provided the forms to do so.

    If an entity does not legally exist they are not suppose to be able to file a lawsuit.

    In recap. I can provide the example of notes you are requesting. I can provide proof the notes were never legally funded. I can provided proof the trust do not legally exist.

    Even if the notes were legally funded. The banks could not legally securitize the notes without the permission of the owner of the notes which is the borrower. Most borrowers don’t know the owner of the note is the creator of the note and the creator of the note is the person that signed the note. Any financial gains obtained from the securitization of the notes belong to the owner of the note. Because the note was used for a purpose unauthorized by the owner of the note.

    Everything listed above was verified by a attorney that represented a pension fund against a MBS trust.


  12. @ greg

    When available, please post the link to the interview with scot.

    Thank you.

  13. BIG QUESTION: Since TILA rescission is a non-judicial action, how do you show or prove your rescission notice letter to “effect” the rescission as of the notice date, if the notice was not responded to?

    If the “lender” ignored the notice re S.C. Jes — not just for 20 days but for years, and you have to go to court on some action such as quite title to force the court to recognize the rescission, DOES THE NOTICE LETTER BECOME A FACT ISSUE THAT HAS TO BE PROVEN by the party claiming rescission notice and as effective as of that date?

  14. greg lawman@gmx.us

  15. WeidnerLaw Scores Two Big Foreclosure Wins in 2016!

    It’s two working days into 2016 and WeidnerLaw has already scored two major foreclosure victories…a trial court win and just today a critical win from Florida’s Second District Court of Appeals.

    Copied below is the full text of the written opinion from the appellate court. Note that it is comprised of merely 3 words,



    let’s talk about this tonight after Scot too…

  16. WeidnerLaw Scores Two Big Foreclosure Wins in 2016!

    It’s two working days into 2016 and WeidnerLaw has already scored two major foreclosure victories…a trial court win and just today a critical win from Florida’s Second District Court of Appeals.

    Copied below is the full text of the written opinion from the appellate court. Note that it is comprised of merely 3 words,



    let’s talk about this tonight after Scot too… lawman@gmx.us

  17. 20 days to (iniciate compliance) by responding

    Hey Kiddo…
    We received your communications and are blah blah blah to our Resolutions Dept. Where you will be served a new flavor each month. Each with an empty head and a want of knowledge, and have no authority or right to do squat!

    We need your admissions …sign here, here & here.

    Its a Pleasure to Serve You up ,.,
    Sincerely yours, the Wolf of Wall Street

  18. Maiden Lane Transactions
    E-mail alert | Glossary »
    November 12, 2014: The legal existence of Maiden Lane II LLC and Maiden Lane III LLC was formally terminated. The small amount of cash held in reserve by each LLC was paid to the New York Fed and AIG, after payment of final trailing expenses, in accordance with their respective interests on November 20, 2014.

  19. is not a lawsuit a form of response?
    20 days to initiate compliance procedures or other provide a dispute response…
    rescission being final as a matter of statute – and the only solution open to the bank to overturn the rescission being a court order – the filing of a suit within that window would be the only way to flip it…

  20. can anyone here point me to the statute or reg that says the bankster must file suit within 20 days? all i see is that they must respond in 20 days. thanx.

    so sad 🙁
    Tonight we have a special guest who is a recent ex-patriot from 17 years in the mortgage banking industry… Scot started out as an escrow agent doing closings, then advanced to mortgage loan officer, processor, underwriter, branch manager, mortgage broker and loss mitigator for the banks. Interestingly, he says,

    “Looking back on my career I don’t believe any mortgage closing that I was involved in was ever consummated.”
    Tonight Scot will be covering areas relating to:

    1 lack of disclosure and consideration
    2 substitution of true mortgage contracting partner
    3 unfunded loan agreements
    4 non-existent trusts
    5 securitization of your note and bifurcation of the security interest and
    6 how to identify and prove the non-existence of the so-called trust named in an assignment which may be coming after you to foreclose

    contact me directly by email for more information lawman@gmx.us

  22. FHA refinance & Title Issues

    They recommend WHAT?

  23. Off Subject but Relavent & may Help some of you.
    My Friends @ FHA may be able to Help!


  24. Thursday 7 January 2016

    Pertinent info, K…

    You do good work.


  25. Good stuff Kalifornia.

  26. Federal Reserve Bank of New York

    Maiden Lane LLC Holdings 10-31-2011 (with CUSIPs)


  27. The link, below, is a mind-boggling good read for everyone concerned on the issues of CONDUIT ORIGINATION and WAREHOUSE LENDING:

    The Industrial Organization of the U.S. Residential
    Mortgage Market



    At pp.11-13:

    As shown in Figure 4, warehouse lenders provide mortgage origination capital through ware-house lines of credit called Master Repurchase Agreements (MRAs). MRAs are revolving lines of credit where a warehouse lender arranges a loan facility to an independent mortgage company or depository.[17] The mortgage originator uses the revolving lines to fund the mortgages that it originates in its own name. The warehouse lender then simultaneously purchases an interest in the mortgage, which is subject to a commitment to repurchase the loan from the originator within thirty days. The warehouse lender “perfects” its interest in the collateral (the note), usually through assignment or through UCC-1.[18] The originator pays a haircut for each dollar of loan balance originated,[19] as well as an interest payment, typically priced at LIBOR plus a spread. The lines are structured such that the newly originated loan collateral held in the facility must be sold within the next 30 to 45 days. Unsold loans held for more than 45 days are subject to further margin calls and mark-to-market charges. These fees can rapidly increase the cost of the MRA to the mortgage originator by fve to six hundred basis points. Once the mortgage originator sells the loan into the securitized market, either through private-label or GSE securitization, the proceeds from the sale are repaid to the warehouse lender, releasing the capacity of the facility for future lending.


    However, in a recent supervisory memorandum,[20] the OCC reiterated its position that MRAs should be accounted for by the warehouse lender as a loan to a mortgage originator rather than as a
    true-sale purchase of individual mortgage loans.[21] Surprisingly, even today large warehouse lenders continue to consider assets generated by their mortgage warehouse division as “loans held for sale,” with risk weights applicable under current regulations for mortgage loans (50% for qualifying mortgages or 20% for loans guaranteed by the FHA or VA).[22] The MRA accounting for the mortgage originators is always treated as debt.


    The MRAs continue to be treated as collateralized lending by many lenders, despite the recent insistence by the OCC that they do not qualify as true sales under GAAP. Their treatment as repurchase agreements under BAPCPA and their eligibility for exemption from
    automatic stay guarantees the warehouse lender signicant speed and freedom to liquidate collateral and close down the facilities. The MRA covenants also allow the warehouse lender the right to close down the facility and take over the collateral due to triggers tied to the
    economic performance of the originator or due to the inability of the originator to make margin calls associated with holding loans seasoned for more than 45 days. Given the contractual features of the MRAs, the warehouse lender typically has an incentive to focus on
    counterparty risk and the liquidity of the mortgage collateral, rather than on the underwriting quality of any given loan.[25]

  28. Although this comment would have better belonged in a prior thread of several days ago on the issue of SERVICERS acting against the interest of “lenders”, its application is broad and its author, the Federal Reserve Board, is germane:

    The Incentives of Mortgage Servicers: Myths and Realities


  29. From the link below:

    The point, as we have stated here before, is that there were no loans because the money advanced by the investors was subject to a set of documents supporting a bond in which the homeowner was not the payor and where the homeowner never signed. The homeowner was subjected to a set of documents that failed to disclose the real party or the real terms of the entire transaction — a black letter requirement of the truth in lending laws. (TILA)

    The purpose of the transaction was for the investment banks to get money from the investors and to get a signature from the homeowner without connecting the two. The real purpose of the transaction was an investment scheme wherein the intermediaries took everything — the money, the property and the gains from credit default swaps, insurance and government bailouts.

    Thus the intent of the investor to lend money for residential mortgages, and the intent of the homeowner, to get a loan for his home, was never accomplished and was effectively thwarted by the attempt to cover tracks by refusing to document the trail of the money. The actual documents offered in foreclosures document a fictitious trail — one in which no money ever changed hands.

    The homeowner, without consent or knowledge, was converted from a borrower to a securities issuer and the investor was converted from being a part owner in a valid REMIC pool to being the alleged buyer of the security issued by the homeowner. Hence the right of rescission and damages arises not only from TILA but from the SEC rules and regulations. And the time for filing doesn’t start to run until the parties had enough information to either know or where they should have known of the fraud.

  30. @ djabelanger

    [attribution without comment]

    Loan or Investment Contract

    By John Korman

    Borrower is actually entering into an undisclosed investment contract, not a loan


  31. mk
    check your email & voicemail

  32. Gary Dubin has kicked ass on Tila rescissions for ever,Wow! Good for him,and the Smith’s.

  33. Oh, and, incidentally, most of the “chickens” are Mexican these days, while I use a deeper, mason’s wheelbarrow.

    But, you are correct: so much does depend on it.

  34. @greg,

    Just sent you an email. Didn’t know you were looking for me- phone went into a paint bucket- I have a flip phone- they resurrected it… LOL.

  35. so much depends

    a red wheel

    glazed with rain

    beside the white

    -William Carlos Williams 1923

  36. Senator Sanders, Tuesday:

    So, to those on Wall Street who may be listening today, let me be very clear. Greed is not good. In fact, the greed of Wall Street and corporate America is destroying the fabric of our nation. And, here is a New Year’s Resolution that I will keep if elected president. If you do not end your greed, we will end it for you.

    I am soooo in.

    The central bank is an intentionally fraudulent device.


    “… we will end it for you.”.

    Those in foreclosure are the tip of the spear… You are: Patriots ALL.



  38. Google …
    Disclaimers & Deeds of Variation,

  39. The Endorsements are in Reverse Order!

  40. Illegal Illicit Reverse Accounting Transactions.
    Intent to deceive. ..
    Fraud on the Face of Contract. ..
    Fraud in the Inducement …

    Since when do mortgage liens (or not) require reconveyance?

    Lessee didn’t pay rent after recission?
    That could be a problem!

    How much does KC owe?

  41. Unfair and deceptive practices in the consummation process also key here.

  42. Excellent post. Cannot agree more.

  43. Agreed Neil! Agreed!
    However short of legislative action …
    How do you purpose to FIX these unmarketable titles?

    Upon recession. ..
    There needs to be a reconveyance!
    Must Enforce!

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