One Step Closer:It’s Impossible to Tie Any Investors to Any Loan

The current talking points used by the Banks is that somehow the Trust can enforce the alleged loan even though it is the “investors” who own the loan. But that can only be true if the Trust owns the loan which it doesn’t. And naming the “investors” as the creditor does nothing to clarify the situation — especially when the “investors” cannot be identified.




I know of a case pending now where US Bank allegedly sued as Trustee of what appears to be named Trust. In Court the corporate representative of the servicer admitted that the creditor was a group of investors that he declined to name. I knew that meant two things: (1) neither he nor anyone else knew which investor was tied to the subject loan and (2) the “Plaintiff” Trust had never acquired the loan and therefore had no business being in court.

The article in the above link demonstrates that not even the FBI could figure out the identity of the investors. And as we have seen across the country whenever the homeowner asks for discovery of the identity of the creditor it is met with multiple objections and claims that the information about the identity of the debtor’s credit is proprietary. This is an absurd claim and it seeks to have the court rubber stamp a blatant violation of Federal and State lending laws which require the disclosure of the identity of the “lender.”

The only thing the article gets wrong is the statement that the loans were sold into a trust. That is obviously false. If the investors are the creditors, then their money was used to fund the origination or acquisition of the loan — without the Trust. Otherwise the Trust would be the creditor. And if the Trust is not the owner of the loan as specified by the Prospectus and Pooling and Servicing Agreement, then it follows that it has no status at all, which means that neither the Trustee nor the servicer have any authority to manage, service or otherwise enforce the alleged loan. The entire strategy of asserting the Trust is a holder of the note is thus unhinged when it is confronted with reality. The whole “standing” argument revolves around this point — that no loan actually made it into any Trust. Many cases have been won by borrowers on that point without the extra step of saying that the creditor is completely unknown.

So the upshot is that there is no known, presumed or identified creditor. Although that seems implausible and counter-intuitive, it is nonetheless true. That doesn’t mean that theoretically there couldn’t be an unsecured claim from the investors to collect from the homeowner under a theory of unjust enrichment, but it does mean that the investors are neither named on the note and mortgage nor are they the current owners of any paper instruments that purport to be evidence of the “debt” — i.e., the note and mortgage. If they are not the current owners of the “debt” originated at closing nor the owners of the paper instruments signed at the alleged closing, then there is no evidence of any contract or privity between the investors and the Trustee or servicer at all. The PSA was ignored which means the entity of the Trust was ignored.  And THAT means lack of standing and lack of any ability to cure it.

Which brings me to one of my earliest articles for this Blog that announced “You Don’t Owe the Money.” Using the step transaction doctrine and single transaction doctrines arising mostly out of tax courts, it was plain as day to me back in 2007 and 2008 that there was no “debt.” And until someone stepped up with an equitable unsecured claim against the homeowner, there wasn’t even a liability. But nobody ever steps up. The banks tell us that is because the whole securitization scheme is to prevent and even prohibit the investors from even making an inquiry into any specific “loans.”

But the real reason is simple and basic — the Trusts were ignored, which means that investor money was deposited with investment banks under false pretenses — the falsehood being that the investors were buying into a specific Trust (which never received any proceeds of sale of the Trust securities) with a specific Mortgage Loan Schedule. The Mortgage Loan Schedule was therefore a complete illusion as an attachment to the Trust because the Trust never had the money to pay for the “pool” of loans. That is why the Mortgage Loan Schedule shows up mainly in litigation in order to confuse the Judge into thinking that somehow it is “facially valid” instead of being the self-serving fabrication of a stranger to the transaction who is engaged in stealing the loans after they already stole the money from investors.

In fact, the “pool” was an ever widening dark dynamic pool of money in which all the money of all investors was commingled with all the other investors of all the alleged Trusts. As I have previously stated the result can be compared to taking an apple, an orange and a banana and setting a food processor on Puree. At the end of that simple process it is impossible for the chef to produce the original apple, orange or banana.

If securitization was real, the banks could have easily done two things that would have completely knocked out any borrower defenses except payment. The first was to show the money chain and the second would be produce the proof that the Trust owned the debt, not the investors. The current talking points used by the Banks is that somehow the Trust can enforce the alleged loan even though it is the “investors” who own the loan. But that can only be true if the Trust owns the loan which it doesn’t. And naming the “investors” as the creditor does nothing to clarify the situation — especially when the “investors” cannot be identified.

As it stands now, the investors continue to allow the banks to act like they are really intermediaries, stealing both the money and the loans that should have been executed in favor of the investors and even allowing claims for collecting “servicer advances” that were not advances (they were return of investor capital) and never came from the servicer. It was and remains a classic PONZI scheme that government is too scared to do anything about and investors are too ignorant of the false securitization (or unwilling to admit human error in failing to do due diligence on the securitization package).

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14 Responses

  1. The sad part is that an attorney told me today that banks always win – doesn’t matter about late assignments to the trust, robo signing or anything else. It is what it is and if there is a problem they will correct it after the fact, to do whatever they choose. I mentioned about my signature on a mortgage doc and the fact it was securitized without approval, and put into a trust 7 years too late and his response was – I have no defenses? I signed a mortgage and owe money. Who is working for – Not me!!!

  2. Shall we talk about the Bonds issued against the land?
    Or are we still Sleeping?

  3. The Mortgors are the 3rd Party under the Mortgage Note,
    How nice of them to sell the Note …for Principal & Interest!

    I was not a borrower on the Note, but Mr Bankster offered me the opportunity to refinance MY Mortgage..the Total Sum of
    Principal & Interest. ReCon.

    Con me Once, Shame on Me
    Con me Twice……NEVER!

  4. Deadly Clear is on Target!
    A Perfect Marksman!

    Misrepresented. .. Omitted (Fraud)
    RELIENCE , inducement to Act

    I didn’t give anyone permission to gamble,risk or profit from my Estate!
    I also didn’t gamble with our retirement,,,buying AAA ratings,



    In a filing unsealed on June 3, 2016, the Department of Justice (DOJ) confirms what many of us have known for years. Nobody, not even the U.S. Government, with massive resources, can determine who owns your loan and has the right to collect on your mortgage.

    The information comes from case files unsealed on June 3, 2016 by federal Judge Yvonne Gonzalez Rogers of the Northern District of California in the case of the United States v. Discovery Sales, Inc. The case involves some 325 fraudulent loans originated by Discovery Sales, Inc. (DSI) between 2006 and 2008, many of which were then sold toWells Fargo Bank and JP Morgan Chase to securitize.

    The Discovery Sentencing document on page 9 states:

    The originating lenders who made loans to purchase DSI properties, including Wells Fargo and J.P. Morgan Chase, generally would not keep the mortgages and thus did not end up losing money as a result of the DSI fraud scheme. Instead, they would sell the mortgages to other banks who would package them in securities that were sold to other investors. These securities failed when the underlying mortgages went into default. It was impossible to trace the majority of the mortgage loans on the over 300 homes sold by DSI that were the subject of the FBI investigation; it would have been harder yet to identify individual victims of the fraud given that the mortgages were securitized and traded. (Emphasis added.)

    To add more outrage to this case, while the government acknowledges the damages from the fraud scheme resulted in $75 million in damages, the amount being paid by DSI in restitution is $3 million to Fannie Mae and Freddie Mac. That is all, along with an $8.5 million fine that the government will pocket. Once again the government is taking all of the money from a settlement with a fraudulent mortgage lender, and giving nothing to the people who were damaged.

    Oh, and one more thing. The “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase, who were also involved in the scheme, were not charged even though it states they knew about DSI’s “shenanigans to inflate the value of their homes” in the sentencing document:

    The parties agree that the preferred mortgage lenders, Wells Fargo and J.P. Morgan Chase, were on some notice that DSI was engaged in various shenanigans to inflate the value of their homes. (Emphasis added.)

    During the time of the information, DSI worked with two “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase. Certain employees and managersof those two preferred lenders knew about the incentive programs offered by DSI and the builders, and knew that the incentives were not being disclosed in the loan files. (Emphasis added.)

    Even though Wells Fargo and JP Morgan Chase had the information that the loans were fraudulent, as per what has become standard procedure, the DOJ brought no charges against the banks. There is nothing new about banks selling off defective, fraudulent loans to securitized trusts, and once again the DOJ has found no reason to prosecute too big to fail banks for fraud.

    There is much more to this story which we will not delve into at the moment, including the history of the Seeno family who owns DSI and their connection to other funny business…


  6. NG, excellent points. Your complaint is where you start the whole action. If it is missing points, has bad or misleading causes of action or is just not complete, you are not going to go far, unfortunately. As to the issue of cost, I am sure that was fully disclosed to the client as it is in all litigation matters.

  7. Response from the Lending Lies Team:

    Just because you are morally or even legally right doesn’t mean that you will win. The critic here commits three errors that copy previous procedural errors that we encountered when we accepted the case: (1) that it isn’t the bad acts of the bank that makes a qui tam action — it is the status of the “relater”. Mr. Beekman simply could not establish his status as an insider who was a whistle blower and (2) the case was very far along procedurally in which the original complaint filed before we got involved had already alleged that his information was not insider knowledge but rather in the public domain which by definition is not a qui tam action. and (3) a qui tam action is solely about recovering money for the government, not the named Plaintiff. In this case at least one agency (FDIC) stated that they were not interested in any such recovery. At Mr. Beekman’s request we attempted and failed to undo the procedural damage in his case as part of a much larger engagement involving three other cases, two appeals and a collateral federal court action. Yes litigation is expensive and no one should ever enter into litigation with the thought that you have a slam dunk case — unfortunately, there is no such thing.

  8. @ Human, I just checked my assignment and two of the suspected Robo- signers are on my mortgage assignment. One as a notary with seal and the other as a witness.

  9. Tuesday 7 June 2016

    Another outstanding result from pulling away more layers of the banker’s
    securitized “onion,” showing there is nothing at the core, once all of the
    layers have been removed.

    More cheers to Neil Garfield!

  10. Ponzi scheme exactly!!!…which is why I don’t understand why the Garfield law group failed so badly at preparing and presenting the Beekman Qui Tam case.
    It would appear the understanding and analysis of the Neil Garfield group was there..but the outcome and result sadly was NOT. The only one that profited was the firm which took in 50,000 in legal fees.

  11. I found this suspected list of Robo-signers on the internet.

    Send this list to the FBI for forensic examination.

  12. Outside of legal contract law as well. Borrower was never told who MERS was or that their alleged Note and Mortgage would become a “security”.

  13. Reblogged this on Deadly Clear and commented:
    Interesting thought here as I read Chain of Title which makes a point to say the investors don’t own the actual loan. We now have documents that identify the mortgagors as a third-party to the process between the banks (and of course they would have to be since they unwittingly, with no disclosure, pledged their collateral); and, agreements defining the unlimited use of the collateral assets to pledge, repledge, reuse, rehypothecate, hypothecate – all of which the homeowners did not agree or allow by contract. It is time to make judges define their understanding of the word “transfer” in the note and “sold” in the mortgage.

    These are not traditional mortgages. The securitization and “procurement of collateral” agreements were pre-existing to the faux mortgage and note documents and the homeowner’s signature. However, there was no disclosure to the homeowner. These were internally contracted securities transactions.

    BASIC INC. v. LEVINSON, 485 U.S. 224 (1988) identifies fraud on the market. Omission is just as serious as misrepresentation.

  14. So why isn’t anyone calling these pretenders to the carpet by not properly transferring the loan over to these so-called Trusts and recording the Trust as the owner of the Loan?

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