How to Follow the Money

Ultimately all debts, notes and mortgages (or deeds of trust) are about money. They are not about property. The property is incidental to the deal and ONLY comes about if there is a dispute in which there is a claim that you didn’t pay money that is owed to the owner of the mortgage deed or the beneficial owner of a deed of trust. The mortgage deed or deed of trust is conditional, not absolute like your deed to your property that names you as owner. There is no such thing as a fee simple absolute mortgage or encumbrance. It doesn’t exist in our jurisprudence or for that matter any jurisprudence. 

The ONLY reason your property can be legally sold, denying you future title and possession of the property is that you owe money to the party who foreclosed — or on whose behalf the foreclosure was initiated. Mastering this one fact will pull your head and that you attorney’s head out of the weeds. 

We take it as a given that you owe money. The question is whether there is a party that can be identified as the the one to whom the money is owed. If so, who is that? What is the identification, address and contact information for the party who is actually owed money from you.

Spoiler alert: So far the banks have successfully skirted the question of money. From funding of the initial loan to the proceeds of sale fo the property nobody has actually disclosed where the money came from and where the money went when payments were made or the property was liquidated.


And the absolute immutable truth is that the so-called investors (i.e., the ones who bought “certificates” or “mortgage bonds”) do not receive your mortgage payments nor do they receive the proceeds of the sale your home. So who actually wants the foreclosure and why? The truth is that the investors get paid in the sole discretion of the underwriter of the “certificates.” Their payment is not conditioned upon your payment.

They get paid ONLY because the underwriter promised to pay them based upon certain conditions which does NOT include the receipt of mortgage payments. They do not get paid because you promised to pay the investors nor because your promise to pay was sold to either the investors or the trust. That sale never occurred. 

How do I know this? Because I have asked two questions thousands of times in the last 12 years. First, to whom were my payments forwarded by the self-proclaimed servicer? Answer: None of my business. Second, who received the proceeds of liquidation of the foreclosed property? Answer: none of my business. 

Knowing the banking industry as I do, there was only one possible conclusion: if they answered the question they would either perjury themselves or they would be admitting that the party named as being entitled to foreclosure was not really entitled to foreclosure. You see it is well established law — for centuries — that only the owner of a debt can foreclosure on collateral. 

For convenience sake a holder of a promissory note can enforce the note but only the owner of the debt is entitled to foreclose. If the foreclosing party claims a representative capacity the to establish a prima facie case it must disclose the party whom they claim to be representing and prove that the party being represented is the owner of the debt. 

So the one area, pointed out by Charles Koppa in So.Cal. a decade ago is what happens after the sale is authorized and the property is liquidated. He was figuring out the relationship between the bid amount and the amount the underwriter claimed as unpaid servicer advances (in the role of self-proclaimed master servicer for the nonexistent trust). Here we knew the answer but we were lucky enough to get hold of copies of a check made out to BONY/Mellon as trustee (Blah blah). BONY mailed it to the servicer and the servicer mailed it to Chase (i.e., the underwriter and master servicer doing business as the nonexistent trust, like a DBA.

No trust and no investor ever received the money. Chase got it and lest you forget, remember that Chase was all about selling loans and derivatives based upon loans and synthetic derivatives based upon the derivatives. It was never about actually making loans where Chase could lose money or buying loan as that were going to be worthless of worth less. It was about selling them. So the revelation is that BONY never had a claim to the money and either did the nonexistent trust that was ignored once the foreclosure court proceedings were over. 

Our investigations so far, with considerable help from Bill Paatalo, shows that multiple transfers of title occur AFTER the foreclosure sale or shortly before signaling the real player who is going to get the money. So you might want to think about the sale of your property title as the beginning rather than the end. It is the beginning of an action (lawsuit) to vacate the sale and award damages. 

12 Responses

  1. So, if the courts have determined that investors/certificate holders of an alleged MBS/REMIC trust have no rights or recourse to the underlying debts, loans, notes or mortgages alleged to have been purchased by or transferred into the alleged trust, from where does the claimed trustee of the alleged MBS/REMIC trust claim the right to foreclose on any mortgage on behalf of the investors/certificate holders? Is it not true that one can only enforce in agency or trust those rights which the principal/grantor/investor possessed themselves?

  2. Thank Mr. Garfield! Finally I’m glad able to read your blog!

  3. JaDonnia B., — Debt collectors have an insane insistence on wrongly naming original parties. And, not sure those original parties were ever creditors. Freddie and Fannie were investors in the private label bank security trusts. But once loans are removed from those trusts, by reported default – removed from investors Freddie Fannie too. And, Freddie Fannie only invested in the TOP tranches to those trusts – those top tranches have all been paid out by the bailout. These loans long gone from Freddie/Fannie and the private trusts.

    The problem is that the attorneys have to argue SOMEONE has the right to collect. Looks impressive if Freddie/Fannie stated. The renaming is further fake. As Neil states, if they were to actually name the real CURRENT creditor, this would put their whole case in shambles.

  4. Then after its all over, they petition to rename with a new ‘debt’ owner…???

  5. Can relate to this. Somehow FannieMae is plaintiff yet they claimed they did not own debt. What gives?

  6. Interesting argument. So what does that mean to a homeowner who has been given a default judgment for the ‘bank’? What’s left to do?

  7. One thing you’ve never addressed, Neil. How about FHA loans? FHA paid claims, then sold them at fire sale prices, then went after the insurance companies where they had indemnification agreements. It’s an interesting rabbit hole to go down, believe you me.
    As a gambler would put it, HUD got double action.

  8. This is great. Always been about the money trail. But, there is more. Fees. Fees charged to who and for what that continued that kept the already falsely declared default loan as in continued default. These fees make it impossible to ever correct the money trail, and, ultimately, title. Fees were charged for everything — foreclosure related before there was any default at all. Payments went to pay fees first. So default upon recorded default. And, no one even knew fees were being charged. Property inspection, broker price opinions, forced place insurance. The list goes on and on. And once default upon already false default occurs – there is no changing it. NOTHING can be done. Even with proof of payments. Payments — how were they accounted for?

    Appreciate this from Neil. We all should appreciate. Thank you.

  9. First of all, the assignments are fraudulent and forged. Second, Fannie was supposed to be the “owner” on my loan for a short time. After that, they disappeared. No documents to prove anything one way or the other. Big part of the scam is that there is no “owner/creditor”, and the lawyers and banksters want to keep it that way.

  10. @Consumerrightsdefenders:

    Definitely a correction worth noting. A similar provision exists here in Georgia although the borrowers are rarely, if ever, afforded favorable

  11. How does Freddie Mac come into play in all of this. As the so called owner of the loan. I never see or hear their name in any of the fraudclosure documents, other than some FNHMLC Trust. No assignments. Please guide me accordingly. Thanks.

  12. One correction: In Calif. either a beneficiary, trustee or servicer can proceed with a non-judicial foreclosure by statute. Of course the prerequisites before the sale are quite onerous and strictly enforced in favor of borrowers.

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