When will enough be enough?
By the Lending Lies Team
When will outraged American homeowners revolt against the mega-banks that have stripped their equity, stolen their homes with falsified documents, and compromised their health, happiness, families and futures?
Luckily for the banks, the typical American homeowner is middle-aged, has a family to support, a full-time job and is simply trying to hang on. The American homeowner is an easy target because they don’t have the luxury to protest and revolt. They won’t loot, they don’t shoot and their only weapon is a lawsuit. Therefore, they pose no concern to the banks or government.
Victimized homeowners should be turning out by the millions to demand changes to the entire mortgage and foreclosure industry, and yet, there is a deafening silence. EVERY homeowner in America has been victimized- even if they are not in default.
First of all, homeowners are victimized by being “Tenants” and never own their property- read your Mortgage documents. The right to hold and enjoy property was once a right. Now the government owns your property, and despite what you believe, you only lease your property from the state and federal government.
Second, the majority of homeowners receive a table-funded mortgage and the entity listed on the Note is NOT the true lender. The process of using an originator to obfuscate who the true lender is- creates a situation where the homeowner is prevented from negotiating in good faith with the party who has a vested interest in finding a solution- if there is ever an issue over the life of their loan (and there will always be an issue of some sort even if you make every payment ontime). That is why the Truth in Lending Act states under Regulation Z that table funded loans are predatory per se. If you don’t know WHO you OWE you have no ability to negotiate. Where is the outrage?
Third, every homeowner in America with an outstanding balance is forced to deal with a loan servicer who receives incentives and a potential windfall if they are able to engineer a default. That means that every person who has borrowed on a home has no control who becomes their servicer. Furthermore, it means if you are unfortunate to have a servicer who is known to engage in fraudulent and deceptive servicing tactics – you are at risk of losing your home if one penny is unaccounted for. The servicer has an incentive to misapply payments, hold payments in suspense accounts, claim your insurance lapsed and provide disinformation to FORCE you into a situation that will result in you losing your home. Where is the outrage?
Every homeowner in America is vulnerable because we are alive. The act of living invariably creates situations beyond our control that happen in the blink of an eye. A bank should not be able to use a life crisis to steal a home and all of the equity in the home. A mortgage is an unconscionable adhesion contract where the bank holds all of the power and control, and you have absolutely no say in the terms of the contract. Is it any wonder that you close on a mortgage without being told you are issuing a security that will make investors millions of dollars while you funded the security and received nothing? Where is the outrage?
Servicers wait for a tragedy to occur in which they leverage to their advantage. Job loss, illness, divorce, being deployed, or a personal crisis in where you are late on your mortgage can catapult into a cascade of late fees and charges that you can never get corrected-despite your best efforts. Even when people have the funds to cure any arrearage that exists, it is well known that servicers will often refuse to accept payments or create an accounting so outrageous the homeowner can’t figure out what they owe. This must be changed. The homeowner should be able to control WHO their loan servicer is, and should know at all times who the holder in due course of their mortgage is. This is the law.
Finally, woe to those who ever get behind on their mortgage. The servicer will create an intricate web of fraud meant to deceive and confuse so that most homeowners simply walk away from their homes. A servicer who never spent a dime to purchase the Note will receive a financial reward for their illegal and fraudulent acts. 98% of all people simply walk away from their homes, their equity, and their improvements in the property.
Even when homeowners discover the fraud in their mortgage documents, it is difficult to find and afford a competent attorney who can decipher the convoluted securitization scheme. The homeowner, even when successful in proving that the bank and their minions are committing fraud on the court, often discovers that there is no due-process of law when it comes to foreclosure litigation.
Thousands of homeowners who discovered that the servicer foreclosing on their property did not have standing to do so- were further violated by the judiciary who refused to enforce the law in fear that a homeowner might receive a ‘free house’. Yet it was fine when the bank and their investors received a free house because the judge’s retirement and pension was heavily invested in the bank. Are you starting to become outraged yet?
Eight years into this situation it has become obvious that American homeowners are on their own. The courts will not follow the law. Law enforcement will not enforce the law. Your tax dollars and government protect the banks. You do NOT matter. You provide NO threat.
It is time to paint your pitchforks RED .
The Black Lives Matter effort demonstrates what can be done when those victimized by oppressive forces unite, demand change, and refuse to be silent. Are you ready to organize?
Filed under: foreclosure |
Neil, recently my own outrage and unspeakable sacrifice for over 8.5 years inspired a vision: take this ongoing injury and grievance to the Hague World Court. Human Rights Abuses and Public Health Crises of epic proportions. With slow to no progress in our own courts.
we need solutions, send this post to gretchen morgenstern at the ny times. get her involved. we need solutions. we need to end this and stop the homelessness and zombie foreclosures
AND AS I SAID, WITH NO CONSUMMATION AT CLOSING, MR MARSHALL NEVER, BELANGER NEVER CONSUMMATED ANY MORTGAGE CONTRACT/ NOTE.
BECAUSE THEY ARE THE ONLY PARTY TO THE FAKE CONTRACT THAT FOLLOWED THROUGH WITH THERE CONCIDERATION, WITH SIGNING THE MORTGAGE AND NOTE,
AS REQUIRED, TO PERFORM. BUT GMAC MORTGAGE CORP. DID NOT PERFORM , I.E. LEND ANY MONEY AT CLOSING, AS WE HAVE THE WIRE TRANFER SHOWING THEY DID NOT FUND THE MORTGAGE AND NOTE AT CLOSING. CANT HAVE A LEGAL CONTRACT IF ONLY ONE OF THE PARTY’S. PERFORMS HIS OBLIGATIONS.
THIS MAKE , AS I SAID. RECISSION IS VALID. AND THEY HAVE NOT FOLLOWED THRU, THERE PART.
AND IT DOES GIVE ME THE RIGHT TO
RESCIND THE CONTRACT BASED ON ALL NEWLY DISCOVERED EVIDENCE, THAT THE PARTY TO THE MORTGAGE /NOTE CONTRACT, DID NOT
FULFILL THERE DUTY AND DID NOT PREFORM IN ANY WAY AS REQUIRED TO HAVE A VALID BINDING CONTRACT.
Tonight we have a rebroadcast of a segment from Episode 15 with a guest who is 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.”
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
: http://recordings.talkshoe.com/TC-139335/TS-1093904.mp3
so lets look at what happen a the closing of the mortgage CONTRACT SHELL WE.
1/ MORTGAGE AND NOTES, SAYS A ( SPECIFIC LENDER) GAVE YOU MONEY, ( AS WE KNOW THAT DIDNT HAPPEN. )
2/ HOME OWNER WAS TOLD AT CLOSING AND BEFORE CLOSING THAT THE NAMED LENDER WOULD SUPPLY THE FUNDS AT CLOSING, AND WAS ALSO TOLD BY THE CLOSING AGENT , THE SAME LIE.
3/ THERE ARE 2 PARTYS TO A CLOSING OF A MORTGAGE AND NOTE, 1/ HOMEOWNER, 2/ LENDER.
3/ Offer and acceptance , Consideration,= SO HOMEOWNERS SIGN A MORTGAGE AND NOTE, IN CONSIDERATION of the said lender’s promises to pay the homeowner for said signing of the mortgage and note.
4/ but the lender does not, follow thru with his CONSIDERATION. I.E TO FUND THE CONTRACT. AND THE LENDER NAMED ON THE CONTRACT, KNEW ALL ALONG THAT HE WOULD NOT BE THE FUNDING SOURCE. FRAUD AT CONCEPTION. KNOWINGLY OUT RIGHT FRAUD ON THE HOMEOWNERS.
5/ THERE ARE NO STATUES OF LIMITATIONS ON FRAUD IN THE INDUCEMENT, OR ANY OTHER FRAUD.
6/ SO AS NEIL AND AND LENDING TEAM, AND OTHERS HAVE POINTED OUT, SO SO MANY TIMES HERE AND OTHER PLACES,
THERE COULD NOT BE ANY CONSUMMATION OF THE CONTRACT AT CLOSING,BY THE TWO PARTY’S TO THE CONTRACT, IF ONLY ONE PERSON TO THE CONTRACT ACTED IN GOOD FAITH,
AND THE OTHER PARTY DID NOT ACT IN GOOD FAITH OR EVEN SUPPLIED ANY ( CONSIDERATION WHAT SO EVER AT CLOSING OF THE CONTRACT.) A MORTGAGE AND NOTE IS A CONTRACT PEOPLE.
7/ SO THIS WOULD GIVE RISE TO THE LAW OF ( RESCISSION).
. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.
AND THE BANKS CAN SCREAM ALL THEY WANT, IF THE PRETENDER LENDER THAT IS ON YOUR MORTGAGE AND NOTE, DID NOT SUPPLY THE FUNDS AT CLOSING, AS WE ALL KNOW DID HAPPEN, THEN THE MORTGAGE CONTRACT IS VOID. AND THERE WAS NO CONSUMMATION AT THE CLOSING TABLE, BY THE PARTY THAT SAID IT WAS FUNDING THE CONTRACT.
CANT GET MORE SIMPLE THAT THAT. and this supports all of the above. that the fake lender did not PERFORM AT CLOSING, DID NOT FUND ANY MONEY OR LOAN ANY MONEY AT CLOSING WITH ANY BORROWER, SO ONLY ONE ( THE BORROWER ) DID PERFORM AT CLOSING. BOTH PARTY’S MUST PERFORM TO HAVE A LEGAL BINDING CONTRACT.
EXHIBIT___
ENTER FOR EVIDENCE
RODGERS V U.S.BANK HOME MORTGAGE ET, AL
THE WAREHOUSE LENDER NATIONAL CITY BANK OF KENTUCKY
HELD THE NOTE THEN DELIVERED TO THIRD PARTY INVESTORS UNKNOWN
SECURITY NATIONAL FINANCIAL CORPORATION
5300 South 360 West, Suite 250
Salt Lake City, Utah 84123
Telephone (801) 264-1060
February 20, 2009
VIA EDGAR
U. S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N. E., Mail Stop 4561
Washington, D. C. 20549
Attn: Sharon M. Blume
Assistant Chief Accountant
Re: Security National Financial Corporation
Form 10-K for the Fiscal Year Ended December 31, 2007
Form 10-Q for Fiscal Quarter Ended June 30, 2008
File No. 0-9341
Dear Ms. Blume:
Security National Financial Corporation (the “Company”) hereby supplements its responses to its previous response letters dated January 15, 2009, November 6, 2008 and October 9, 2008. These supplemental responses are provided as additional information concerning the Company’s mortgage loan operations and the appropriate accounting that the Company follows in connection with such operations.
The Company operates its mortgage loan operations through its wholly owned subsidiary, Security National Mortgage Company (“SNMC”). SNMC currently has 29 branch offices across
the continental United States and Hawaii. Each office has personnel who are qualified to solicit and underwrite loans that are submitted to SNMC by a network of mortgage brokers. Loan files submitted to SNMC are underwritten pursuant to third-party investor guidelines and are approved to fund after all documentation and other investor-established requirements are determined to meet the criteria for a saleable loans. Loan documents are prepared in the name of SNMC and then sent to the title company handling the loan transactions for signatures from the borrowers. Upon signing the documents, requests are then sent to the warehouse bank involved in the transaction to submit funds to the title company to pay for the settlement. All loans funded by warehouse banks are committed to be purchased (settled) by third-party investors under pre-established loan purchase commitments. The initial recordings of the deeds of trust (the mortgages) are made in the name of SNMC.
Soon after the loan funding, the deeds of trust are assigned, using the Mortgage Electronic Registration System (“MERS”), which is the standard in the industry for recording subsequent transfers in title, and the promissory notes are endorsed in blank to the warehouse bank that funded the loan. The promissory notes and the deeds of trust are then forwarded to the warehouse bank. The warehouse bank funds approximately 96% of the mortgage loans to the title company and the remainder (known in the industry as the “haircut”) is funded by the Company. The Company records a receivable from the third-party investor for the portion of the mortgage loans the Company has funded and for mortgage fee income earned by SNMC. The receivable from the third-party investor is unsecured inasmuch as neither the Company nor its subsidiaries retain any interest in the mortgage loans.
Conditions for Revenue Recognition
Pursuant to paragraph 9 of SFAS 140, a transfer of financial assets (or a portion of a financial asset) in which the transferor surrenders control over those financial assets shall be accounted as a sale to the extent that consideration other than beneficial interests in the transferred assets is received in exchange. The transferor has surrendered control over transferred assets if and only if all of the following conditions are met:
1
(a) The transferred assets have been isolated from the transferor―placed presumptively beyond the reach of the transferor and its creditors, even in bankruptcy or other receivership.
SNMC endorses the promissory notes in blank, assigns the deeds of trust through MERS and forwards these documents to the warehouse bank that funded the loan. Therefore, the transferred mortgage loans are isolated from the Company. The Company’s management is confident that the transferred mortgage loans are beyond the reach of the Company and its creditors.
(b) Each transferee (or, if the transferee is a qualified SPE, each holder of its beneficial interests) has the right to pledge or exchange the assets (or beneficial interests) it received, and no
condition restricts the transferee (or holder) from taking advantage of its right to pledge or exchange and provides more than a trivial benefit to the transferor.
The Company does not have any interest in the promissory notes or the underlying deeds of trust because of the steps taken in item (a) above. The Master Purchase and Repurchase Agreements (the “Purchase Agreements”) with the warehouse banks allow them to pledge the promissory notes as collateral for borrowings by them and their entities. Under the Purchase Agreements, the warehouse banks have agreed to sell the loans to the third-party investors; however, the warehouse banks hold title to the mortgage notes and can sell, exchange or pledge the mortgage loans as they choose. The Purchase Agreements clearly indicate that the purchaser, the warehouse bank, and seller confirm that the transactions contemplated herein are intended to be sales of the mortgage loans by seller to purchaser rather than borrowings secured by the mortgage loans. In the event that the third-party investors do not purchase or settle the loans from the warehouse banks, the warehouse banks have the right to sell or exchange the mortgage loans to the Company or to any other entity. Accordingly, the Company believes this requirement is met.
(c) The transferor does not maintain effective control over the transferred asset through either an agreement that entitles both entities and obligates the transferor to repurchase or redeem them before their maturity or the ability to unilaterally cause the holder to return the specific assets, other than through a cleanup call.
The Company maintains no control over the mortgage loans sold to the warehouse banks, and, as stated in the Purchase Agreements, the Company is not entitled to repurchase the mortgage loans. In addition, the Company cannot unilaterally cause a warehouse bank to return a specific loan. The warehouse bank can require the Company to repurchase mortgage loans not settled by the third-party investors, but this conditional obligation does not provide effective control over the mortgage loans sold. Should the Company want a warehouse bank to sell a mortgage loan to a different third-party investor, the warehouse bank would impose its own conditions prior to agreeing to the change, including, for instance, that the original intended third-party investor return the promissory note to the warehouse bank. Accordingly, the Company believes that it does not maintain effective control over the transferred mortgage loans and that it meets this transfer of control criteria.
The warehouse bank and not the Company transfers the loan to the third-party investor at the date it is settled. The Company does not have an unconditional obligation to repurchase the loan from the warehouse bank nor does the Company have any rights to purchase the loan. Only in the situation where the third-party investor does not settle and purchase the loan from the warehouse bank does the Company have a conditional obligation to repurchase the loan. Accordingly, the Company believes that it meets the criteria for recognition of mortgage fee income under SFAS 140 when the loan is funded by the warehouse bank and, at that date, the Company records an unsecured receivable from the investor for the portion of the loan funded by the Company, which is typically 4% of the face amount of the loan, together with the broker and origination fee income.
2
Loans Repurchased from Warehouse Banks
Historically, 99% of all mortgage loans are settled with investors. In the process of settling a loan, the Company may take up to six months to pursue remediation of an unsettled loan. There are situations when the Company determines that it is unable to enforce the settlement of a loan by the third-party investor and that it is in the Company’s best interest to repurchase the loan from the warehouse bank. Any previously recorded mortgage fee income is reversed in the period the loan was repurchased.
When the Company repurchases a loan, it is recorded at the lower of cost or market. Cost is equal to the amount paid to the warehouse bank and the amount originally funded by the Company. Market value is often difficult to determine for this type of loan and is estimated by the Company. The Company never estimates market value to exceed the unpaid principal balance on the loan. The market value is also supported by the initial loan underwriting documentation and collateral. The Company does not hold the loan as available for sale but as held to maturity and carries the loan at amortized cost. Any loan that subsequently becomes delinquent is evaluated by the Company at that time and any allowances for impairment are adjusted accordingly.
This will supplement our earlier responses to clarify that the Company repurchased the $36,291,000 of loans during 2007 and 2008 from the warehouse banks and not from third-party investors. The amounts paid to the warehouse banks and the amounts originally funded by the Company, exclusive of the mortgage fee income that was reversed, were classified as the cost of the investment in the mortgage loans held for investment.
The Company uses two allowance accounts to offset the reversal of mortgage fee income and for the impairment of loans. The allowance for reversal of mortgage fee income is carried on the balance sheet as a liability and the allowance for impairment of loans is carried as a contra account net of our investment in mortgage loans. Management believes the allowance for reversal of mortgage fee income is sufficient to absorb any losses of income from loans that are not settled by third-party investors. The Company is currently accruing 17.5 basis points of the principal amount of mortgage loans sold, which increased by 5.0 basis points during the latter part of 2007 and remained at that level during 2008.
The Company reviewed its estimates of collectability of receivables from broker and origination fee income during the fourth quarter of 2007, in view of the market turmoil discussed in the following paragraph and the fact that several third-party investors were attempting to back out of their commitments to buy (settle) loans, and the Company determined that it could still reasonably estimate the collectability of the mortgage fee income. However, the Company determined that it needed to increase its allowance for reversal of mortgage fee income as stated in the preceding paragraph.
Effect of Market Turmoil on Sales and Settlement of Mortgage Loans
As explained in previous response letters, the Company and the warehouse banks typically settle mortgage loans with third-party investors within 16 days of the closing and funding of the loans. However, beginning in the first quarter of 2007, there was a lot of market turmoil for mortgage backed securities. Initially, the market turmoil was primarily isolated to sub-prime mortgage loan originations. The Company originated less than 0.5% of its mortgage loans using this product during 2006 and the associated market turmoil did not have a material effect on the Company.
As 2007 progressed, however, the market turmoil began to expand into mortgage loans that were classified by the industry as Alt A and Expanded Criteria. The Company’s third-party investors, including Lehman Brothers (Aurora Loan Services) and Bear Stearns (EMC Mortgage Corp.), began to have difficulty marketing Alt A and Expanded Criteria loans to the secondary markets. Without notice, these investors changed their criteria for loan products and refused to settle loans underwritten by the Company that met these investor’s previous specifications. As stipulated in the agreements with the warehouse banks, the Company was conditionally required to repurchase loans from the warehouse banks that were not settled by the third-party investors.
3
Beginning in early 2007, without prior notice, these investors discontinued purchasing Alt A and Expanded Criteria loans. Over the period from April 2007 through May 2008, the warehouse banks had purchased approximately $36.2 million of loans that had met the investor’s previous criteria but were rejected by the investor in complete disregard of their contractual commitments. Although the Company pursued its rights under the investor contracts, the Company was unsuccessful due to the investors’ financial problems and could not enforce the loan purchase contracts. As a result of its conditional repurchase obligation, the Company repurchased these loans from the warehouse banks and reversed the mortgage fee income associated with the loans on the date of repurchase from the warehouse banks. The loans were classified to the long-term mortgage loan portfolio beginning in the second quarter of 2008.
Relationship with Warehouse Banks
As previously stated, the Company is not unconditionally obligated to repurchase mortgage loans from the warehouse banks. The warehouse banks purchase the loans with the commitment from the third-party investors to settle the loans from the warehouse banks. Accordingly, the Company does not make an entry to reflect the amount paid by the warehouse bank when the mortgage loans are funded. Upon sale of the loans to the warehouse bank, the Company only records the receivables for the brokerage and origination fees and the amount the Company paid at the time of funding.
Interest in Repurchased Loans
Once a mortgage loan is repurchased, it is immediately transferred to mortgage loans held for investment (or should have been) as the Company makes no attempts to sell these loans
to other investors at this time. Any efforts to find a replacement investor are made prior to repurchasing the loan from the warehouse bank. The Company makes no effort to remarket the loan after it is repurchased.
Acknowledgements
In connection with the Company’s responses to the comments, the Company hereby acknowledges as follows:
· The Company is responsible for the adequacy and accuracy of the disclosure in the filing;
· The staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
· The Company may not assert staff comments as defense in any proceeding initiated by the Commission or any person under the Federal Securities Laws of the United States.
If you have any questions, please do not hesitate to call me at (801) 264-1060 or (801) 287-8171.
Very truly yours,
/s/ Stephen M. Sill
Stephen M. Sill, CPA
Vice President, Treasurer and
Chief Financial Officer
Contract law
Part of the common law series
Contract formation
Offer and acceptance Posting rule Mirror image rule Invitation to treat Firm offer Consideration Implication-in-fact
Defenses against formation
Lack of capacity Duress Undue influence Illusory promise Statute of frauds Non est factum
Contract interpretation
Parol evidence rule Contract of adhesion Integration clause Contra proferentem
Excuses for non-performance
Mistake Misrepresentation Frustration of purpose Impossibility Impracticability Illegality Unclean hands Unconscionability Accord and satisfaction
Rights of third parties
Privity of contract Assignment Delegation Novation Third-party beneficiary
Breach of contract
Anticipatory repudiation Cover Exclusion clause Efficient breach Deviation Fundamental breach
Remedies
Specific performance Liquidated damages Penal damages Rescission
Quasi-contractual obligations
Promissory estoppel Quantum meruit
Related areas of law
Conflict of laws Commercial law
Other common law areas
Tort law Property law Wills, trusts, and estates Criminal law Evidence
Such defenses operate to determine whether a purported contract is either (1) void or (2) voidable. Void contracts cannot be ratified by either party. Voidable contracts can be ratified.
Misrepresentation[edit]
Main article: Misrepresentation
Misrepresentation means a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.
There are two types of misrepresentation: fraud in the factum and fraud in inducement. Fraud in the factum focuses on whether the party alleging misrepresentation knew they were creating a contract. If the party did not know that they were entering into a contract, there is no meeting of the minds, and the contract is void. Fraud in inducement focuses on misrepresentation attempting to get the party to enter into the contract. Misrepresentation of a material fact (if the party knew the truth, that party would not have entered into the contract) makes a contract voidable.
According to Gordon v Selico [1986] it is possible to misrepresent either by words or conduct. Generally, statements of opinion or intention are not statements of fact in the context of misrepresentation.[68] If one party claims specialist knowledge on the topic discussed, then it is more likely for the courts to hold a statement of opinion by that party as a statement of fact.[69]
Such defenses operate to determine whether a purported contract is either (1) void or (2) voidable. Void contracts cannot be ratified by either party. Voidable contracts can be ratified.
Misrepresentation[edit]
Main article: Misrepresentation
Misrepresentation means a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.
There are two types of misrepresentation: fraud in the factum and fraud in inducement. Fraud in the factum focuses on whether the party alleging misrepresentation knew they were creating a contract. If the party did not know that they were entering into a contract, there is no meeting of the minds, and the contract is void. Fraud in inducement focuses on misrepresentation attempting to get the party to enter into the contract. Misrepresentation of a material fact (if the party knew the truth, that party would not have entered into the contract) makes a contract voidable.
According to Gordon v Selico [1986] it is possible to misrepresent either by words or conduct. Generally, statements of opinion or intention are not statements of fact in the context of misrepresentation.[68] If one party claims specialist knowledge on the topic discussed, then it is more likely for the courts to hold a statement of opinion by that party as a statement of fact.[69]
so lets look at what happen a the closing of the mortgage CONTRACT SHELL WE.
1/ MORTGAGE AND NOTES, SAYS A ( SPECIFIC LENDER) GAVE YOU MONEY, ( AS WE KNOW THAT DIDNT HAPPEN. )
2/ HOME OWNER WAS TOLD AT CLOSING AND BEFORE CLOSING THAT THE NAMED LENDER WOULD SUPPLY THE FUNDS AT CLOSING, AND WAS ALSO TOLD BY THE CLOSING AGENT , THE SAME LIE.
3/ THERE ARE 2 PARTYS TO A CLOSING OF A MORTGAGE AND NOTE, 1/ HOMEOWNER, 2/ LENDER.
3/ Offer and acceptance , Consideration,= SO HOMEOWNERS SIGN A MORTGAGE AND NOTE, IN CONSIDERATION of the said lender’s promises to pay the homeowner for said signing of the mortgage and note.
4/ but the lender does not, follow thru with his CONSIDERATION. I.E TO FUND THE CONTRACT. AND THE LENDER NAMED ON THE CONTRACT, KNEW ALL ALONG THAT HE WOULD NOT BE THE FUNDING SOURCE. FRAUD AT CONCEPTION. KNOWINGLY OUT RIGHT FRAUD ON THE HOMEOWNERS.
5/ THERE ARE NO STATUES OF LIMITATIONS ON FRAUD IN THE INDUCEMENT, OR ANY OTHER FRAUD.
6/ SO AS NEIL AND AND LENDING TEAM, AND OTHERS HAVE POINTED OUT, SO SO MANY TIMES HERE AND OTHER PLACES,
THERE COULD NOT BE ANY CONSUMMATION OF THE CONTRACT AT CLOSING,BY THE TWO PARTY’S TO THE CONTRACT, IF ONLY ONE PERSON TO THE CONTRACT ACTED IN GOOD FAITH,
AND THE OTHER PARTY DID NOT ACT IN GOOD FAITH OR EVEN SUPPLIED ANY ( CONSIDERATION WHAT SO EVER AT CLOSING OF THE CONTRACT.) A MORTGAGE AND NOTE IS A CONTRACT PEOPLE.
7/ SO THIS WOULD GIVE RISE TO THE LAW OF ( RESCISSION).
. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.
AND THE BANKS CAN SCREAM ALL THEY WANT, IF THE PRETENDER LENDER THAT IS ON YOUR MORTGAGE AND NOTE, DID NOT SUPPLY THE FUNDS AT CLOSING, AS WE ALL KNOW DID HAPPEN, THEN THE MORTGAGE CONTRACT IS VOID. AND THERE WAS NO CONSUMMATION AT THE CLOSING TABLE, BY THE PARTY THAT SAID IT WAS FUNDING THE CONTRACT.
CANT GET MORE SIMPLE THAT THAT.
https://en.wikipedia.org/wiki/Contract
Contract law
Part of the common law series
Contract formation
Offer and acceptance Posting rule Mirror image rule Invitation to treat Firm offer Consideration Implication-in-fact
Defenses against formation
Lack of capacity Duress Undue influence Illusory promise Statute of frauds Non est factum
Contract interpretation
Parol evidence rule Contract of adhesion Integration clause Contra proferentem
Excuses for non-performance
Mistake Misrepresentation Frustration of purpose Impossibility Impracticability Illegality Unclean hands Unconscionability Accord and satisfaction
Rights of third parties
Privity of contract Assignment Delegation Novation Third-party beneficiary
Breach of contract
Anticipatory repudiation Cover Exclusion clause Efficient breach Deviation Fundamental breach
Remedies
Specific performance Liquidated damages Penal damages Rescission
Quasi-contractual obligations
Promissory estoppel Quantum meruit
Related areas of law
Conflict of laws Commercial law
Other common law areas
Tort law Property law Wills, trusts, and estates Criminal law Evidence
Such defenses operate to determine whether a purported contract is either (1) void or (2) voidable. Void contracts cannot be ratified by either party. Voidable contracts can be ratified.
Misrepresentation[edit]
Main article: Misrepresentation
Misrepresentation means a false statement of fact made by one party to another party and has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality or nature of the product that the seller has may constitute misrepresentation. A finding of misrepresentation allows for a remedy of rescission and sometimes damages depending on the type of misrepresentation.
There are two types of misrepresentation: fraud in the factum and fraud in inducement. Fraud in the factum focuses on whether the party alleging misrepresentation knew they were creating a contract. If the party did not know that they were entering into a contract, there is no meeting of the minds, and the contract is void. Fraud in inducement focuses on misrepresentation attempting to get the party to enter into the contract. Misrepresentation of a material fact (if the party knew the truth, that party would not have entered into the contract) makes a contract voidable.
According to Gordon v Selico [1986] it is possible to misrepresent either by words or conduct. Generally, statements of opinion or intention are not statements of fact in the context of misrepresentation.[68] If one party claims specialist knowledge on the topic discussed, then it is more likely for the courts to hold a statement of opinion by that party as a statement of fact.[69]
>>>>>>>>>>>> P U B L I C N O T I C E <<<<<<<<<<<<> YES <<< WERE READY TO PROTEST & REVOLT !!! We should be organized like best in history !!
SAME as the past successful PROTESTERS !!!
HIT THEM BI-MONTHLY……..FOR EVER <<<< US ALL !!!
WILL SOMEBODY PUT THIS TOGETHER PLEASE I’ll be there twice a month every month ( I can lead as well ) untill the ASSHO**S
IN COMAND (??) STOP THIS MASS DESTRUCTION OF ALL OF U.S.
W A K E U P N O W.
i complained to pam bondis office about being double tracked. i received a letter about 3 years regarding this. i was just re-reading it. The mega banks told millions of people that they had to be 90 days late in order to apply for hamp loan. the letter states they do not tell homeowners not to pay? the funniest part of the paper is they list dates they sent letters out asking for my financial information ? thats weird they would not take my application until i was 90 days late. then once they ha d the application and i was in review i got a call about dec 2010 that someone got a hold of the password and moved my file out of review. I cried. a month later I received another application and sent it fed ex. again that was lost. but the letter goes on to say many times they sent me an applicaiton or called??? how do we fight against this fraud, they are the banks the judges beleive them over me. which to me makes no sense since this same issue happened to millions of people. i am glad to share my experiences. my health is starting to go down, i am very depressed, but like neil mentioned i have to work full time to survive. my kids are growing up. getting married, going on with their lives. while we are stuck at almost retirement age fighting for our rights. i am not sure what to do at this point ro when this will all end. but i know they want us dead so we will stop fighting and they can cash in on the derivatives they have on my home. for the many years i am in litigation there must be a pretty penney they collect on this house. they are like a cancer. i am very sad not where iwanted to be in my 50’s i have had excellent credit my entire life
Wow,lots of good stuff up in here today/tonight.These jokers are constantly raising tax’s,creating pain,making new laws and ordinances for the sole purpose of taking the American peoples hard earned dollars,yet they gladly give The Royal Bank of Scott land 650Billion in loans that dont have to be repaid.Go figure.
Im ready to take to the streets,who got the name of said organized group of angry ,ripped off homeowners?
Great outline of the problem Neil as always. I have been suggesting this to anyone and everyone I know, but all has fallen on deaf ears. I was amazed how fast Senator Corey Gardner bailed as soon as he opened Pandora’s box. We have a cesspool in Washington and in many state governments that are ALL supposed to be of the people, by the people, for the people and this has all gone by the wayside.
Even old Donald Trump knows about all this and totally ignores it, to the way I see it we are totally screwed. Attorneys and title companies are all lining their pockets so there is no alternative for us the middle class unfortunately. All I can say people is the old Marine Motto “Semper fi” but we need honest caring attorneys, title companies, county recorders, and honest people (if there are any) that are currently working for the government and willing to reach out and do the right thing.
Everyone needs to flood the media again as they are tone deaf and unwilling to stick their necks out as well.
The homeowner should be able to control WHO their loan servicer is, and should know at all times who the holder in due course of their mortgage is.
**************
AGREED , I think this is a real possibility … Consumers should be able to choose their loan servicer ,,, I think it could be accomplished at the state level by mandating that control of that choice is in the hands of the consumer. I for one would be happy to start an honest servicing company. With computerization it would be a relatively simple matter, the only problems arise when the servicer attempts to game the system to their advantage, truth is simple and easily managed and explained… I’d be happy to grow rich honestly and in a slightly longer timeframe… I think there would be enough support to crowdsource a IPO using reg A+ …
Trading with the enemy is “Treason”.
The US is currently fighting a “War on Drugs” and a “War on Terror”.
American GIs have suffered and died, in both conflicts.
The US Department of Justice and the banks involved, refuse to disclose these banks are using American mortgages to launder terror and drug cartel money.
Comey and Lynch are linked to “HSBC- Hong Kong and Shaghai Banking Corp”.
HSBC, Wells Fargo and Bank of America are already proven as using American mortgages to launder terror and drug cartel money.
Judge Gleeson, in Manhattan, threatened to publish a “Deferred Prosecution Agreement- or, PDA”. He now works for the banks- he stepped down and left exposing the “PDA” to his successor, Judge Donnelly.
Before stepping down, Judge Gleeson wrote: The Information also charges HSBC Holdings plc (“HSBC Holdings”) with willfully facilitating financial transactions on behalf of sanctioned entities in violation of the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. §§ 1702 & 1705, and the Trading with the Enemy Act (“TWEA”), 50 U.S.C. App. §§ 3, 5, 16. See id
You may read the court document here:
Case 1:12-cr-00763-JG Document 23 Filed 07/01/13
The “DPA” acknowledges criminal behaviors exist. The US DOJ and HSBC- an English-Chinese hybrid don’t want American Citizens to see what is going on and Director Comey was on the board of that bank, even as Lorretta Lynch has refused to bring them to account.
http://21stcenturywire.com/2016/07/13/fbi-director-comey-board-member-of-clinton-foundation-connected-bank-hsbc/
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Senator Sanders, We The People and Abe Lincoln’s Greenback
~ Michael Keane 7/14/16
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http://www.occ.gov/static/interpretations-and-precedents/aug04/int1002.pdf
mark brown,
https://www.federalreserve.gov/bankinforeg/regzcg.https
Regulation C: Compliance Guide Regulation D: Compliance Guide Regulation E: Compliance Guide Regulation F: Compliance Guide Regulation H: Compliance Guide Regulation I: Compliance Guide Regulation J: Compliance Guide Regulation L: Compliance Guide Regulation M: Compliance Guide Regulation O: Compliance Guide Regulation P: Compliance Guide Regulation R: Compliance Guide Regulation U: Compliance Guide Regulation X: Compliance Guide Regulation Z: Compliance Guide Regulation AA: Compliance Guide Regulation BB: Compliance Guide Regulation CC: Compliance Guide Regulation DD: Compliance Guide Regulation GG: Compliance Guide Regulation II: Compliance Guide
Regulation Z: Loan Originator Compensation and Steering
12 CFR 226
This guide was prepared by the staff of the Board of Governors of the Federal Reserve System as a “small entity compliance guide” under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended. The guide summarizes and explains rules adopted by the Board but is not a substitute for any rule itself. Only the rule itself can provide complete and definitive information regarding its requirements. The complete rule, including the Official Staff Commentary, which is published as Supplement I to Regulation Z, is available on the Government Printing Office web site.
The Truth in Lending Act
The Truth in Lending Act (TILA) is implemented by the Board’s Regulation Z (12 CFR Part 226). A principal purpose of TILA is to promote the informed use of consumer credit by requiring disclosures about its terms and cost. TILA also includes substantive protections. For example, the act and regulation give consumers the right to cancel certain credit transactions that involve a lien on a consumer’s principal dwelling. Regulation Z also prohibits specific acts and practices in connection with an extension of credit secured by a consumer’s dwelling.
Prohibitions related to mortgage originator compensation and steering
Regulation Z prohibits certain practices relating to payments made to compensate mortgage brokers and other loan originators. The goal of the amendments is to protect consumers in the mortgage market from unfair practices involving compensation paid to loan originators.
The prohibitions related to mortgage originator compensation and steering apply to closed-end consumer loans secured by a dwelling or real property that includes a dwelling. The rule does not apply to open-end home equity lines of credit (HELOCs) or time-share transactions. It also does not apply to loans secured by real property if the property does not include a dwelling.
For purposes of these rules, loan originators are defined to include mortgage brokers, who may be natural persons or mortgage broker companies. This includes companies that close loans in their own names but use table-funding from a third party. The term loan originator also includes employees of creditors and employees of mortgage brokers that originate loans (i.e., loan officers).
Creditors are excluded from the definition of a loan originator when they do not use table funding, whether they are a depository institution or a non-depository mortgage company, but employees of such entities are loan originators.
The rule prohibits a creditor or any other person from paying, directly or indirectly, compensation to a mortgage broker or any other loan originator that is based on a mortgage transaction’s terms or conditions, except the amount of credit extended. The rule also prohibits any person from paying compensation to a loan originator for a particular transaction if the consumer pays the loan originator’s compensation directly.
The rule also prohibits a loan originator from steering a consumer to consummate a loan that provides the loan originator with greater compensation, as compared to other transactions the loan originator offered or could have offered to the consumer, unless the loan is in the consumer’s interest. The rule provides a safe harbor to facilitate compliance with the prohibition on steering.
Creditors who compensate loan originators must retain records to evidence compliance with Regulation Z for at least two years after a mortgage transaction is consummated.
Compliance with these rules is mandatory beginning on April 1, 2011. Accordingly, the rules on originator compensation apply to transactions for which the creditor receives an application on or after April 1, 2011.
Section-by-Section
Section 226.25 Record retention.
(a) General rule.
Requires, for each transaction subject to the loan originator compensation provisions in § 226.36(d)(1), that the creditor maintain records of the compensation it provided to the loan originator for the transaction as well as the compensation agreement in effect on the date the interest rate was set for the transaction.
Section 226.36 Prohibited acts or practices in connection with credit secured by a dwelling.
(a) Loan originator and mortgage broker defined.
States that the regulation applies to all persons who originate loans, including mortgage brokers and their employees, as well as mortgage loan officers employed by depository institutions and other lenders.
The rule does not apply to payments received by a creditor when selling the loan to a secondary market investor. When a mortgage brokerage firm originates a loan, it is not exempt under the final rule unless it is also a creditor that funds the loan from its own resources, such as its own line of credit.
(d) Prohibited payments to loan originators.
For purposes of § 226.36(d)(1) and (d)(2), affiliates are treated as a single “person.”
(d)(1) Payments based on transaction terms or conditions.
The rule prohibits a creditor or any other person from paying, directly or indirectly, compensation to a mortgage broker or any other loan originator that is based on a mortgage transaction’s terms or conditions, except the amount of credit extended.
A loan originator’s compensation can neither be increased nor decreased based on the loan terms or conditions. When the creditor offers to extend a loan with specified terms and conditions (such as rate and points), the amount of the originator’s compensation for that transaction is not subject to change, based on either an increase or a decrease in the consumer’s loan cost or any other change in the loan terms. Thus, if a consumer’s request for a lower interest rate is accepted by the creditor, the creditor is not be permitted to reduce the amount it pays to the loan originator based on the change in loan terms. Similarly, any reduction in origination points paid by the consumer must be a cost borne by the creditor.
Under the rule, the amount of credit extended is deemed not to be a transaction term or condition of the loan for purposes of the prohibition, provided the compensation payments to loan originators are based on a fixed percentage of the amount of credit extended. However, such compensation may be subject to a minimum or maximum dollar amount. The minimum or maximum amount may not vary with each credit transaction.
Creditors may use other compensation methods to provide adequate compensation for smaller loans, such as basing compensation on an hourly rate, or on the number of loans originated in a given time period.
Example: A creditor may not pay a loan originator 1 percent of the amount of credit extended for amounts greater than $300,000, and 2 percent of the amount of credit extended for amounts that fall between $200,000 and $300,000. However, a creditor could choose to pay a loan originator 1 percent of the amount of credit extended for each loan, but no less than $1,000 and no more than $5,000. In this case, the originator is guaranteed payment of a minimum amount for each loan, regardless of the amount of credit extended to the consumer. Using this example, the creditor would pay a loan originator $3,000 on a $300,000 loan (i.e., 1 percent of the amount of credit extended), $1,000 on a $50,000 loan, and $5,000 on a $900,000 loan.
An originator that increases the consumer’s interest rate to generate a larger yield spread premium can apply the excess creditor payment to third-party closing costs and thereby reduce the amount of consumer funds needed to cover upfront fees. Thus, the rule does not prohibit creditors or loan originators from using the interest rate to cover upfront closing costs, as long as any creditor-paid compensation retained by the originator does not vary based on the transaction’s terms or conditions.
For example, suppose that for a loan with a 5 percent interest rate, the originator will receive a payment of $1,000 from the creditor as compensation, and for a loan with a 6 percent interest rate, a yield spread premium of $3,000 will be generated. The originator must apply the additional $2,000 to cover the consumer’s other closing costs.
(d)(2) Payments by persons other than consumer.
If any loan originator receives compensation directly from a consumer in a transaction, no other person may provide any compensation to a loan originator, directly or indirectly, in connection with that particular credit transaction. Thus, no person who knows or has reason to know of the consumer-paid compensation to the loan originator (other than the consumer) may pay any compensation to a loan originator, directly or indirectly, in connection with the transaction.
For purposes of this rule, payments made by creditors to loan originators are not payments made directly by the consumer, regardless of how they might be disclosed under HUD’s Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA).
(e) Prohibition on steering.
Prohibits a loan originator from “steering” a consumer to a lender offering less favorable terms in order to increase the loan originator’s compensation.
Provides a safe harbor to facilitate compliance. The safe harbor is met if the consumer is presented with loan offers for each type of transaction in which the consumer expresses an interest (that is, a fixed rate loan, adjustable rate loan, or a reverse mortgage); and the loan options presented to the consumer include:
(A) the loan with the lowest interest rate for which the consumer qualifies;
(B) the loan with the lowest total dollar amount for origination points or fees, and discount points, and
(C) the loan with the lowest rate for which the consumer qualifies for a loan without negative amortization, a prepayment penalty, interest-only payments, a balloon payment in the first 7 years of the life of the loan, a demand feature, shared equity, or shared appreciation; or, in the case of a reverse mortgage, a loan without a prepayment penalty, or shared equity or shared appreciation.
To be within the safe harbor, the loan originator must obtain loan options from a significant number of the creditors with which the originator regularly does business. The loan originator can present fewer than three loans and satisfy the safe harbor, if the loan(s) presented to the consumer otherwise meet the criteria in the rule.
The loan originator must have a good faith belief that the options presented to the consumer are loans for which the consumer likely qualifies. For each type of transaction, if the originator presents to the consumer more than three loans, the originator must highlight the loans that satisfy the criteria specified in the rule.
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Last update: August 2, 2013
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O
Comptroller of the Currency
Administrator of National Banks
Washington, DC 20219
May 13, 2004 Interpretive Letter #1002
August 2004
David G. Sorrell
Commissioner
Georgia Department of Banking and Finance
2990 Brandywine Road, Suite 200
Atlanta, GA 30341-5565
Dear Commissioner Sorrell:
This letter replies to your recent request for clarification of a letter I wrote you on April 2, 2004.
My April 2 letter addressed several issues related to the applicability of the OCC’s Preemption Determination and Order (Order) concerning the Georgia Fair Lending Act (GFLA) 1 and our new preemption regulation.2 Concerning the applicability of the Order and the preemption rule to mortgage brokers, I explained that “[i]f a loan is arranged by a mortgage broker but made by a national bank or its operating subsidiary, then the national bank (or operating subsidiary) is the lender and the provisions of the GFLA are preempted with respect to that loan.”
In your letter dated April 19, 2004, you stated that you wanted to be sure that that the OCC is not “negating the liability of the non bank broker under [GFLA], regardless of who that broker transfers the loan to,” and you requested our confirmation that a non-bank mortgage broker is liable for any violations of the GFLA the broker makes “in his/her own right.”
The Order and the relevant portions of our preemption rule apply to the real estate lending activities only of national banks and national bank operating subsidiaries (collectively referred to here as national banks). Thus, as described in my April 2 letter, the Order and preemption rule govern in any mortgage lending transaction where the national bank is making the loan, whether or not a mortgage broker is involved in the transaction. We understand your reference to a “non-bank mortgage broker” acting “in his/her own right” to describe a different situation, that is, a situation where a non-bank mortgage broker – or other non-national bank lender – establishes the terms of credit or provides the funding for the mortgage loan. In those circumstances, the national bank is not making the mortgage loan, and we agree that the mortgage broker is not
1 68 Fed. Reg. 46264 (August 5, 2003).
2 69 Fed. Reg. 1904 (January 13, 2004).
covered either by the terms of our Order or by the preemption rule.
Similarly, where a non-national bank lender makes a loan that is later sold to a national bank, the original lender – including a mortgage broker who is funding loans from a non-national bank source – would be subject to the GFLA regardless of the fact that a national bank subsequently purchases the loan.
We note that this situation is distinguishable from “table funding” arrangements, however. “Table funding” refers to a practice whereby a mortgage loan is funded at settlement by an advance of loan funds and a contemporaneous assignment of the loan is made to the person advancing the funds. We consider a national bank that provides funding and takes assignment of a loan pursuant to a “table funding” arrangement to be the lender.3 Under the Order and our preemption rule, the GFLA would not apply to a national bank that uses this type of arrangement to make loans.
I trust this is responsive to your inquiry.
Sincerely,
signed
John D. Hawke, Jr.
Comptroller of the Currency
2
3 See, e.g., 12 C.F.R. § 22.2(l) (provision of OCC flood insurance regulation providing that a national bank is the maker of a table-funded loan). The regulations implementing the Real Estate Settlement Procedures Act, 12 U.S.C. 2601 et seq., define a lender in a table funding arrangement as the person “to whom the obligation is initially assigned at or after settlement” who is not necessarily the person in whose name the loan is closed. 12 C.F.R. § 3500.2(b).
Oh the Outrage when I heard the words “FREE RENT”
This is a great idea even though it doesn’t sound strong as Black Lives Matter. Perhaps, it needs a push for this movement by making and selling decals, stickers, T-shirts and having local and centralized offices so that when a homeowner is just about to lose their home illegally, protesters could appear in front of that home to protest. (I don’t really think this would happen.) This movement needs people from all walks of life as illegal foreclosure could happen to any at any point in life. The reality is that in an American society where people owned a home and all that, they may not go for any protests. At least, people in this movement could show compassion to a homeowner and his or her family by providing a free accommodation in their own home or apartment lying vacant.
Make things peaceful and effective using smart thinking.
@ Mark Bowen ,
What Neil says is true about TILA/regZ I just went through a real estate school and that is what is taught … and obviously the legal chapters of the course are written by lawyers and as this is Federal it counts in every state… TILA is now combined with RESPA in the closing procedures and documents (due to Dodd-Frank requirements) .. It is now called “TRID” , TILA RESPA Integrated DISCLOSURES.. I’ll let Neil handle the legal arguments and explainations..
Good to hear. Some of us have been organizing as best we can. We need lawyers, elected officials, agencies to work with us as equals and no “deadbeat”, “free house” bias.
Neil, again you say that “the Truth in Lending Act states under Regulation Z that table funded loans are predatory per se”. Please, please, please elaborate. I’ve read through Reg Z many times and have found no reference at all to table funding. I would certainly like to know how this argument should, or could, be made in court.