Educating the Judge

The assumption that the Judge already knows the facts and the law is what drives lawyers into defeat. The Judge is not required to know anything, and is actually prohibited from taking an active role in favor of one party or the other.

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I recently had the occasion to assist as consultant on a case in a non judicial state. The Judge was clearly struggling with giving the homeowner due process but still not able to connect the dots. So I proposed that a preliminary statement be submitted in answer to the demurrer that was filed.

Plaintiff concedes the obvious — that when money was received by him or on behalf of him, a liability arose (the debt). But as stated in Yvanova, that debt arose by operation of law from the receipt of funds from a particular identified source. And the debt is not owed to the world at large but only to the party who advanced the funds.

The debt exists without anything in writing. In fact, there was nothing in writing creating a loan contract between the funding source and the Plaintiff, as alleged in the complaint. Further there is a complete absence of any allegation or evidence, despite years of requesting same in formal requests and informal requests, in which any of the parties in the chain ever paid one cent for the origination or acquisition of the alleged loan that they alleged was sold successively.

Ordinarily the debt would merge into a promissory note in which Plaintiff was the maker and the payee was the aforesaid funding source. But the funding source was never mentioned in the note or mortgage, which now contains the signature of Plaintiff obtained by fraud in the execution, to wit: Plaintiff signed said documents based upon the representation that the payee on the note (and the beneficiary under the deed of trust) was the funding source.

The debt owed to the funding source was thus not merged into the note because the funding source and the payee on the note were two completely separate and distinct entities. Hence the transfer of the note was the transfer of paper that was worthless and which ceased status of negotiable instrument when the Defendants asserted a default in performance under the note that had been fraudulently obtained. Hence no entity can assert the status of “holder” or “holder in due course” inasmuch as such terms arise solely from the state adoption of statutes from the Uniform Commercial Code, Article 3, governing negotiable instruments.

JPMC was the underwriter, Master servicer and agent for trusts that appear to be legally nonexistent and in any event completely controlled by JPMC Nonetheless control over all the events related to the debt, note and mortgage lies in the hands of JPMC.

JPMC is referred to as lender in Plaintiff’s complaint, although the funding actually came from institutional investors and passed through JPMC as an intermediary conduit. JPMC initiated the transfer of funds from accounts in which commingled funds from institutional investors from multiple trusts had been deposited.

The assumption that any Trust or other special purpose vehicle ever funded the origination of a loan, or even purchased it for value is a fiction. The only valid purchase would have been from those institutional investors. There being no such purchase asserted nor in existence, the paper instruments upon which the Defendants rely are merely obfuscations of the truth. And the reason they seek foreclosure is that the forced sale of the property would be the first legally valid document in their entire chain.

If securitization actually occurred, then one of two things would have occurred:
  1. The Trust or other special purpose vehicle would have funded the origination, thus eliminating the need for endorsements and assignments. [The Trust would have been the payee on the note and the mortgagee on the mortgage]. OR
  2. A bona fide lender would have received actual money for the sale of the debt, note and mortgage. Both the lender or the purchaser would have a record of the payment.
The reason I say that securitization is virtually nonexistent and the reason why Adam Levitin calls it “Securitization fail” is that neither of those things happened in the vast majority of so-called loans. I even object to the using the word “loan” because I find it misleading. A scheme that relies on stolen money and fraudulent documentation should not be given the title “lending.” This takes nothing away from the fact that the debt exists. But in nearly all cases, the debt is unliquidated and unsecured.

5 Responses

  1. Scot ,

    ” But it doesn’t mean anything if you cannot prove it. Your statements above are just words without proof. And this is exactly how the courts look at it. ”
    Scot (and Anon) , I agree completely… and I have a Federal court ruling (that cost BAC $650mm) based on the underwriting docs produced as evidence that this is EXACTLY the case with my note and approx. 800 other existing notes…

    I really want to get busy kicking OCWEN in the nuts.. I need $$$$ or a contingency agreement…

  2. It’s kind of like counterfeit Where they have a bogus claim to a property with a fake note that would not buy anything if it were examined closely not a lawyer but isn’t that the short version of what banks are doing ?

  3. Neil is just too frustrating for me. The funding source not mentioned in the note? Of course it isn’t! That’s stupid.

    I sat in court with my dad’s cousin last week. He was pro tem judge and I went in chambers with him and reviewed cases with him and told him how to rule and why. He agreed with me. These happened to be two UDs and the rest civil harassment cases. Educating the judge depends on the judge. My cousin did not read through hours of pleadings but he was open for each side to tell him why they were there, etc. and he explained in detail to the loser why he didn’t rule in their favor. Most judges don’t know the law and most aren’t open to “education” so to appellate court we go …

    If I was the attorney I would not leave the courtroom until I had the judges understanding. You know for years these attorneys have left the courtroom not even understanding why the demurrer was overruled or an explanation. That’s just stupid.

    Sent from my iPhone


  4. Neil, as usual you are correct. But it doesn’t mean anything if you cannot prove it. Your statements above are just words without proof. And this is exactly how the courts look at it. The banks lawyers will state this is just another preposterous and outlandish attempt by the homeowner to stall the inevitable and the judges have agreed with them and are not allowing discovery. Without hard proof this is not even hearsay it is just theory. Its not what you know its what you can prove.

    So the question still remains as it has from the beginning.

    You maintain the trust were never funded I agree. I still question if he trust were ever formally/legally created. BUT HOW DO YOU PROVE THIS?

    The notes were never securitized. After all you cannot legally securitize something you do not legally own. HOW DO YOU PROVE THE NOTES WERE NEVER SECURITIZED?

    In all the complaints I have read the bank always claims to not only be the holder of the not but also the owner of the note. By claiming to be the owner the banks are stating they bought the note and by buying the note they are saying the did not make a loan against the note. By saying the own the note they are saying there was a sale of the note from the homeowner to the buyer. What they are saying is there was no loan there was a sale. If so there can be no default. For if they only made a loan against the note than they could not be the owner of the note but they would be the holder in due course which is how the financial system was to operate in the first place.

    This would be easier to prove than stating the trust were never funded because you have some proof. The banks are admitting they own the note therefor they are saying there was no loan but there was a sale. Not my or yours theory but the banks own statements which they filed in the complaint.

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