Livinglies's Weblog

I’m sharing the wording I use in my TERA and Case Analysis reports now. I think the benefit of this wording is that it fills in the blank on who is the real creditor (owner of the debt). Hopefully it answers the following informal question lurking in the context of mortgage litigation: “If the parties claiming enforcement rights are not the owners or representatives of the owners then who is?”

Those who have that question in mind are asking the wrong party when they pose it to the homeowner as if the homeowner had an obligation to present a credible narrative of what actually happened to their loan. And the strategy of the foreclosure mills is to keep the questions directed at homeowners instead of themselves so that their prima facie case is presumed and never proven.

Just to be clear — and to avoid confusion sewn by foreclosure mill lawyers — the owner of the debt would have the following characteristics:

• Paid value for the debt

• Expecting payment arising from the debt itself (i.e., in accounting terms the subject debt is carried as an asset that falls under the category of a receivable, in this case a loan receivable.

• Unencumbered authority to transact any business affecting the subject debt .

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Here is the current wording I use in my analysis and reports:

Standards and customary practices in commercial banking, lending, investment banking and auditing require, at a minimum, a reference to the date and parties to a transaction so that the data can be confirmed. This is also required in courts of law under the category of “foundation.” No such references are made in the entire paper chain relied upon by the current claimant. The wording of each document appears to side-step the issue of an actual financial transaction and skips to memorializing the proffered transaction. 

Our conclusion is that the payee on the note is almost certainly part of a failed securitization scheme. It follows then that the alleged loan transaction is a table-funded loan, and described as both against public policy and predatory under REG Z of the Federal Truth in Lending Act. We consider it certain that all actual funds came from a third party stranger (TPS) in a transaction predating the loan itself and/or predating the erroneously implied purchase of the loan or both. Hence in this case the TPS is the party who paid value for the debt and is therefore the owner of the debt. 

Standards and customary practices in commercial banking, lending, investment banking and auditing require, at a minimum, a reference to the TPS and any successors to TPS with sufficient descriptive certainty to confirm the authority of those persons or entities claiming ownership, rights to enforce, or rights to service the subject loan on behalf of the TPS or its successors, if any.

In the absence of any reference or proof of payment, payment is not presumed under generally accepted accounting principles as published by the Financial Accounting Standards Board. The failure to reference actual monetary payment causes a rebuttable presumption in auditing that there is an absence of an actual monetary payment and therefore that the documents memorializing a transaction are fabricated, entitled to no legal presumption of authenticity or validity.

An alternative explanation is that the documents were not fabricated but prepared in anticipation of an actual transaction that failed to occur. Either way the conclusion is the same, i.e., that the documents refer to a nonexistent transaction and should be discarded.

The normal and reasonable presumption is that the “predecessor” would only have transferred a valuable ownership interest in the subject debt upon payment of money or the equivalent; the lack of payment creates a presumption that there was nothing upon which a claim for payment could be made. Therefore the transfer of a promissory note as “title” to the debt from a party who had no right, title or interest in the debt conveys nothing, and a transfer of a mortgage or beneficial interest in a deed of trust would also convey nothing.

Presumptions are intended ONLY as a convenience — not to alter a result. If they would alter the result then they should be discarded. If there are two different results — one based upon legal presumptions and the other based on facts both the auditor and the court should discard the presumptions and go with the facts. 

The only thing I would add is that the title confusion and the convoluted schematics of failed securitization are not the result or fault of any action undertaken by homeowners —- ever. The burden of proving a prima facie case is and always has been on the party making the claim or initiating action for relief through foreclosure of a security interest. In our system of justice that is black letter bedrock of all legal matters in dispute.

Such a party has not proven a prima facie case if the entire body of evidence is based upon various presumptions — unless the homeowner fails to object. The objection does not change the homeowner’s burden of proof; it changes the would-be forecloser’s burden of proof. Upon timely and reasonable objection the presumptions falls away and the foreclosure mill must actually prove the facts they previously sought to be presumed. Theoretically there is no prejudice to the foreclosure mill; but we all know that most foreclosures would fail if actual proof was required.

As for the cataclysmic end of the financial system feared by judges, lawyers and regulators, blind justice requires that the chips fall where the evidence points. Anything less allows the system to punish homeowners for the errors and misdeeds of the banks.

Filed under: foreclosure | Tagged: assignment, BURDEN OF PROOF, indorsement, OBJECTIONS, owner of the debt, presumptions, third party strangers, TPS, transfer |