Truth in Lending Accidentally Disclosed by Title Company

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George Riley sent me a letter he received from Fidelity Title that explodes the myth that somehow there was an actual connection between funding the loan and the party who is falsely identified as the lender on the closing papers. They closed nothing. And THAT means there never was consummation — a critical element when challenging the right to collect or foreclose and a critical element in rescission. You can’t rescind a contract that does not exist — but you can’t collect on it either. The corollary is that the remedy for an unconsummated transaction is the roughly the sale as a rescinded loan — disgorgement of money, return of canceled note and release of the encumbrance.


Dear George,

Your question is about this letter from Fidelity admitting that the HUD-1 statements are not truthful in identifying the actual lender. And you ask how important is this? The answer is VERY important.

Mr. Riley,

I am sorry, but as you mention, the original escrow file has been destroyed – Texas record retention rules only require us to maintain escrow records for three years.   We do not have anything to provide the confirmation you are looking for, but if as you state Colonial funded the file, you might want to ask Colonial for a copy of its records.

We cannot give you any legal or other advice so you may want to consult an attorney of your choice, but with that said, please note that HUD-1 statements would often reflect the mortgage company but not the funding lender. [e.s.]

I am unsure why you sent us a copy of a warehouse agreement between lenders that is dated after our transaction.[e.s.]

Best regards,

Elise Kitchens

Vice President Escrow Administration

Fidelity National Title Group

Division 5

Yes it means that your loan was most likely table funded, although the letter doesn’t explicitly state that. AND THAT means that the party on the note and mortgage is NOT the party who owned the debt because they didn’t loan you any money. And THAT is precisely one of the main reasons for the passage of TILA 50 years ago — Banks were hiding behind “Originators” so that when disclosures were not properly done the liability would fall on the originator who in many cases was long gone and operating under some new corporate name.

More Importantly it means that the loan contract was never consummated. If ABC loans you money, but you sign papers “acknowledging” DEF Company as the lender and you execute a note and mortgage stating that you owe money to DEF Company, then you have only 2 legs of a 3 legged stool — —- a loan contract consists of an offer from a particular person or entity, acceptance by another person or company and consideration actually moving (funding) from each to the other. Otherwise it is basic black letter law that there is no contract to enforce.

The only way out of this is to tie the funding party to the originator (who was not the lender) at the time the loan documents were signed.

This is generally impossible for two reasons.

First the actual creditor is largely unknown because the investment money that was intended for the trusts was never actually given to the Trusts; part of the money investors advanced to investment banks was sent to closing tables where everyone present thought the money was somehow tied to the originator. It wasn’t. The originator merely was paid a fee and never booked the transaction as a loan on its financial records. Nobody else booked the “loan” as a receivable and debit to cash or other assets either at the time of the loan. The money came from a slush fund wherein the money from all investors was kept without regard or label as to any particular REMIC Trust and hence, without regard to the Trust or any of its beneficiaries.

Second, the banks took extra care to make certain that they were using bankruptcy remote and liability remote vehicles that would prevent anyone from easily tying the banks as a conduit for the money trail as described above. THAT means they made sure there was no connection between the originator and the source of the money.

32 Responses

  1. Kalifornia,

    For some reason, I always find your comments on point and understandable.
    Will you please summarize exactly what we should glean from this article? Especially insofar as a way we can “legally affirm” that our loan transaction was “never lawfully consumated” as defined by TILA.

    I think I understand it. ..and I also think being able to definitively establish that under the “consumation phrase” in TILA, )if we can prove “non-consumation” of the original loan transaction), the “3-year TILA cut-off phrase” does not limit a borrower’s effective use of a TILA Rescission Letter.

    Further, that if this lack of consumation is established, the concept of “equitable tolling” (ET) does not even enter the picture, post-Jesinoski.

    … Just as “common law rescission” was set on it’s ear by Jesinoski, ET under TILA is no longer a issue?

    Please unwrap this for me.

  2. Can someone help me out here, I received a notice of acceleration from Wells Fargo and I think they are going to be trying to foreclose on my second mortgage of a securitized loan which has all kinds of illegal issues. Can someone explain to me if I can use Rescission as a defense to prevent the foreclosure. I’m in Maryland a Non Judicial State. Can someone explain in laymans terms what is rescission? Can I afford to do it? Will I need an attorney? Where can I find an example to do it myself and who should I send the notice to. The loan was closed back in 2005, but since then there have been fraudulent DOT’s filed as close at 3 to 4 years ago. Please assists. James ( 443 677 2799. Thanks

  3. Reblogged this on California Freelance Paralegal and commented:
    Great blog post by Neil Garfield on how foreclosure mills can be held liable under the Fair Debt Collection Practices Act (FDCPA).

  4. You know imho it truely is identity theft there was no MBS only our promise to pay and i doubt anyone would have signed had they known it was an asset stripping trap to hedge or had they seen the MOVIE THE BIG SHORT FIRST

  5. Attorn is a frequently used and commonly understood term among REAL ESTATE lawyers. In fact the word attornment is part of the Title of a rudimentary agreement , commonplace among a landlord, his lender and his tenant.

  6. Will ” never again” do 😑😐 stole that from Aman

  7. I don’t hear You. LOL! 😄

  8. Just say No?

    Contract Drafting

  9. LOL

    I know nothing, If I think I know something, I know no thing.
    I only give opinion, I don’t give legal advice because I do not know legal things.

    “Prisoners can also be involved in a contract as long as they are not under a life imprisonment or death sentence. But restrictions can be placed on prisoner contract rights to secure the prison and protect the general public.” from 4 PILLARS OF A LEGAL CONTRACT posted by Greg.

    Yeah the prisoner’s contract starts with the bond. That attaches them to the court, and the contract with the attorney attaches them to the court, and the court contracts with the jury, but by attachment to the court the prisoner is attached to the jury, and when the jury by contract tells the court what to do with the prisoner, the prisoner signs the judgment, another contract to go to jail, and then the jail intake system has more contracts.

    So that ‘prisoners can also be involved in a contract’, needs to be more specific. It is because the prisoner is involved in contracts that the prisoner is a prisoner.

    There was once overheard, so I have no evidence or proof, that there was a congressional meeting where some judicial or prison official, could have been doj or bureau of prisons or some other official but they told congress, no one is in jail that didn’t agree to be there.

    If that is so, then all those darn contracts stacked together would constitute agreement as far as they are concerned.

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, Independent, State, In Jure Proprio, Jure Divino

  10. You can always rescind your signature on any contract that does not provide full disclosure.

    Do not let anyone confuse you on rescission such that you do not use it because someone [who don’t care anything about you or your situation\ tells you the contract that has your signature doesn’t exist.

    Uh, then why do you have a copy of a non-existent contract?
    And where is that non-existent promissory note that was with it when you signed.

    Attorneys attorn – look up that legal definition of attorn.

    Rescission would not take up space in a code or statute , if it was for things that do not exist.

    And if you rescind a contract that does not exist, then so what? That means they can’t do those things they would try to do as if the contract existed, unless they go to court.

    You don’t hear me………….

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, Independent, State, In Jure Proprio, Jure Divino

  11. The word misrepresentation is an understatement

  12. Indeed sc i stand corrected
    Its still a case of who did what when and for how much and for what asset, what precisely was the asset and did it give the entity claiming to be who they were/are ( to a Court if Law too) a secured interest in the collateral home under the contract.

  13. Its not what they wanted to do with the assets…..

  14. sc from what ive seen no one is doing great inBK Court either
    I filed adversary proceeding then came out of BK voluntarily but i did prevent lift of stay , but of course they foreclosed anyway
    You either pay a trustee and get yourself enslaved to a BK trustee for five years ( they typically crucify nurses) or you settle your debts with credit cards keep paying for your car and pay for council – personally i had to chose could not afford to do both and most BK attys do just that, BK only, they do not want to file an adversary as well. In my ignorance i thought my once i filed in federal Court that they would think twice before taking my home or come to the negotiating table and modify but then you realize theres no such thing, because that’s not what they wanted to DO WITH THE ASSET Like you said the intentiin was ” counter intuitive” for want of a better description ( but that was the best Deutsche bank could come up with as i remember) more than 6 1/2 years later lol …. onward.
    So GO SEE BIG SHORT EVERYONE WHO REAds this blog and please drag your friends family and any old geezer you can find thats interested who can vote and fill a seat, Steve Corral is AWESOME and reminds me of an accountant i had actually ( christ – i hope he doesn’t read this blog)

  15. No Deb, we don’t!
    Unless you file a lawsuit against them..then Proof of Claim is on YOU!

    They don’t have Proof of Claim to meet the elements of Standing#
    And claiming they did Harmed Many Families!!

  16. We gotta prove it all tho catster

  17. Deb, I like Bob. I don’t always agree with him but he knows how to attack the contract and set off the debt that is still owed.
    They counted on the fact…sheeple did not have cash or resources .

  18. They needed the foreclosure to wash assets Deb, ….
    You know how they Roll…. Betting 10 to 1 odds…the sheeple will lose.

    You know … Casualties to a War Machine.

  19. When i say thars all they got re FMV i was refering to just the actual bricks n mortar nit the derived value from stealing my name

  20. Why in ” tarnations” SC
    Could they not sell me home back at fair market value but would rather steal it and sell to another for FMV thars all they got but paid out large to salaries to ALL THISE INTERMEDIARIES AND MILL ATTORNEYS

  21. Ukg
    Your cats name is BOB
    I had a hamster called Ralph once he played hide n seek
    As for creditor perhaps their name is Ralph

  22. Love my cat!

  23. That means I’m completely off the hook since I got a Wells Fargo loan funded by the Deutsche check. Somebody tell me I’m wrong.
    Where’s BOB?

  24. Now..Someone tell me why in Tarnations they are stealing homes?
    Oh Right! Deb. .HOA dues, Taxes, Maintain & Insure!

    Are the rent proceeds keeping pension payments going? Maybe.

  25. The LOC (line of credit) used in combination with a reverse ammorization schedule .

  26. So the question begs to be asked…
    HUD1 names the Mortgage Company but not the funding Lender, so..
    Who is the funding lender?

    Hint: This Warranty Deed granted to the Look alike Name of Mortgage Company except as a Funding Company.

    Debtor is Creditor ( Estate)
    Think HELOC

    They use those in Reverse Mortgages .


  27. ” tied to the originator” who and when was the subject t loan ” originated”
    Developer also – ” lender ( in name only)”” also affiliated title company.
    Sold 100% of their ” loans”
    What was it they were actually selling
    As for meeting of minds that intentiin was the exact opposite
    However we have the burden of proof

  28. But remember ” revenge is mine said the Lord”

  29. Just one BIG SCAM sacrificing the American people to foreign banks
    What else can you call it

    go see THE BIG SHORT Ya,ll
    I hooe theres a follow up movie called the BIG PAYBACK


    Question: If the unnamed lender was not a party to the contract with the named borrower – might the named borrower construe the funds as “a gift”?


    An individual will be encountering and signing several different contracts such as an agreement to purchase a house or a car. But have you ever thought of what this legal document about is and what it actually requires from you? Or do you really know the important elements a contract must posses to make it valid and enforceable? Before signing a contract, be familiarized with the four elements of a legal contract:

    Competent Party

    It is given that any individual cannot engage in a contract with an insane person, and this is extended to people under the influence of mind-altering drugs or alcohol. In other words, one should make a contract with someone that is clearheaded.

    A competent party also must be of legal age (aged 18 and above). Minors are not usually allowed to contract, but emancipated minors can engage in a contract. Emancipated minors are the ones freed from control by his parents or guardians, and his parents or guardians are freed from all responsibilities toward the child. This is also applicable to minors that are married, widowed, or divorced. Unmarried minors that can contract as unmarried refer to as an individual that is formerly married (widowed or divorced), in a military service, or has received a declaration of emancipation from the court.

    Prisoners can also be involved in a contract as long as they are not under a life imprisonment or death sentence. But restrictions can be placed on prisoner contract rights to secure the prison and protect the general public.

    Mutual Agreement

    There must be an offer and acceptance, leading to an agreement. Otherwise, the contract will not take effect. Parties involved should have an actual meeting of the minds regarding what they have agreed upon, and act freely and without coercion. And acceptance mirrors the terms of the offer.


    Parties in a contract must exchange something of value, either money, services rendered, or promises. Exchanges need to be of the same value. It pertains to what each party gives to the other as the agreed price for the other’s promise.

    Consideration differentiates a contract from a gift. Gift refers to a voluntary and gratuitous transfer of property from one individual to another, with something valuable in return.

    At times, consideration is also a promise not to do something you have the right to do including filing a lawsuit if you feel you or your property has been damaged or injured. It is also applicable to current agreements.

    Legal Purpose

    A contract requires these parties to partake in a legally binding agreement, which should have legal relations and an understanding it can be enforced by law. Any contract that will break laws is void and unenforceable. Also, a contract cannot violate public policy and not to be carried out in an illegal activity.

  31. Look on the last page of your ‘loan application’. On the third page on the very bottom on the right side, it identifies a ‘financial corporation on behalf’ of the ‘lender.’
    Google this ‘financial corporation’ and you will find the ‘lender’ strictly responsible for ‘marketing’ and as a financial corporation they ‘originate and conduct closing on said ‘loan’. Not your ‘lender’. As usual, they are all out of business and have been for years.
    You may also want to observe how many different addresses are listed for lender as well as multiple p.o. boxes…Throughout all of your ‘closing documents’.

  32. Great post

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