If you think foreclosures are a thing of the past, think again

In order to maintain the illusion of legality and an orderly marketplace the banks and their servicers must continue to push foreclosures even if it means going after people who are not actually withholding payments. The legacy of the mortgage meltdown and the brainless government policies that let the banks get away with what they had done, is that the crime not only continues but is being repeated with each new claimed securitization or “resecuritization” of residential loans.

As I predicted in 2006, the  tidal wave of foreclosures was in fact unprecedented, underestimated and continues to this day. With a starting point of around 2002, foreclosures attributed to the mortgage meltdown have continued unabated for 17 years. I said it would 20-30 years and I am sticking with that, although new evidence suggests it will go on much longer. So far more than 40 million people have been displaced from their homes and their lives.

Google Buffalo and New Jersey, for example and see whether they think foreclosures are a thing of the past. They don’t. And the people in Buffalo are echoing sentiments across the nation where the economy seems better, unemployment is down, wages are supposedly increasing but foreclosures are also increasing.

And let’s not forget that back in the early and mid 2000’s foreclosures did not mention trustees or trusts. In fact when the subject was raised by homeowners it was vehemently denied in courts cross the country. The denials were that the trusts even existed. This was not from some homeowner or local lawyer. This was from the banks and their attorneys. It turns out they were telling the truth then.

The trusts didn’t exist and there were no trustees. But in the upside down world of foreclosure here we are with most foreclosures filed in the name of a nonexistent implied trust on behalf of a “trustee” with no trustee powers, obligations or duties to administer any assets much less loans in foreclosure.

In order to understand this you must throw out any ideas of a rational market driven by fundamental economics and accept the fact that the banks  and their servicers continue to be engaged in the largest economic crime in human history. Their objective is foreclosure because that accomplishes two goals: first, it rubber stamps prior illegal practices and theft of borrowers’ identities for purposes of trading profits and second, it gives them a free house and free money.

If they lose a foreclosure case nobody suffers a financial loss. If they win, which they do most of the time (except where homeowners aggressively defend) they get a free house and the proceeds of sale are distributed to the players who are laughing, pardon the pun, all the way to the bank. Investors get ZERO.

As for modifications, look closely. The creditor is being changed along with the principal interest and payments. It might just be a new loan, except for the fact the new “lender” is a servicer like Ocwen who has not advanced any money for the purchase or acquisition the loan. But that’s OK because neither did the lender or the claimant. Modification is a PR stunt to make it look like the banks are doing something for borrowers when in fact they are stealing or reassigning the loan to a totally different party from anyone who previously appeared in the chain of title.

Modification allows the banks to claim that the loan is performing — thus maintaining the false foundation supporting trades and profits amounting to dozens of times the amount of the loan. Watch what happens when you ask for acknowledgement from the named Plaintiff in judicial states or the named beneficiary in nonjudicial states. You won’t get it. If US Bank was really a trustee then acknowledging a settlement on its behalf would not be a problem. As it stands, that is off the table.

The mega banks, with unlimited deep pockets derived from their massive economic crimes, began a campaign of whack-a-mole to create the impression that foreclosures were on the decline and the crisis is over. Their complex plan involves decreasing the number of filed foreclosures where the numbers are climbing and increasing the filed foreclosures where they have allowed the numbers to sink. Add that to their planted articles in Newspapers and Magazines around the country and it all adds up to the impression that foreclosures derived from claimed securitized loans are declining.

Not so fast. There were over 600,000 reported foreclosures last year and the numbers are rising this year. Most of them involve false claims of securitization where the named claimant is simply appointed to pretend to be the injured party. It isn’t and in many cases a close look at the “name” of the claimant reveals that no legal person or entity is actually named.

US Bank is often named but not really present. It says it is not appearing on its own behalf but as Trustee. The trust is not specifically named but is implied without the custom and practice of naming the jurisdiction in which the trust was organized or the jurisdiction in which it maintains a business. That’s because there is no trust and there is no business and US Bank owns no debt, note or mortgage in any capacity. The certificates are held by investors who acknowledge that they have no right, title or interest in the debt, note or mortgage. So who is the claimant? Close inspection reveals that nobody is named.

In fact, those foreclosures proceed often without contest because homeowners mistakenly believe they are in default. In equity, if the facts were allowed in as evidence, the homeowner would be entitled to a share of the bounty that was a windfall to the investment bank and its affiliates by trading on the borrower’s signature. A “free house” only partially compensates the homeowner for the illegal noncensual trading on his name with the intent of screwing him/her later.

Upon liquidation of the property the proceeds of sale are deposited not by an owner of the debt, but by one of the players who just added insult to injury to both the borrower and the original investors who paid real money but failed to get an interest in the fabricated closing documents — i.e., the note and mortgage.

The Banks have succeeded in getting everyone to think about how unfair it is that homeowners would even think of pursuing a “free house”. By doing that they distract from the fact that the homeowners and the investors who put up the origination or acquisition money are both excluded from the huge profits generated by trading on the signature of borrowers and the money of investors who do not get to share in the bounty, which is often 20-40 times the amount of the loan.

The courts don’t want to hear about esoteric arguments about the securitization process. Judges assume that somewhere in the complex moving parts of the securitization scheme there is an owner of the debt who will get compensated as a result of the homeowner’s refusal or failure to make monthly payments of interest and principal. That assumption is untrue.

This is revealed when the money from the sale of property is traced. If you trace the check you will be mislead. Regardless of where the check is mailed, the check is actually cashed by a servicer who deposits it to the account of an investment bank who has already received many times the amount of the loan principal. That money is neither credited to the account of the borrower nor reported, much less distributed to investors who bought certificates (wrongly named “mortgage bonds”).

Neither the investors who bought the original uncertificated certificates nor the investors who purchased contracts based upon the apparent value of the certificates ever see a penny of the proceeds of a foreclosure sale.

In order to maintain the illusion of legality and an orderly marketplace the banks and their servicers must continue to push foreclosures even if it means going after people who are not actually withholding payments. The legacy of the mortgage meltdown and the brainless government policies that let the banks get away with what they had done, is that the crime not only continues but is being repeated with each new claimed securitization or “resecuritization” of residential loans.

When the economy contracts, as it always does, the number of foreclosures will shoot up like a thermometer held over a steam radiator. And instead of actually looking for facts people will presume them. And that will lead to more tragedy and more inequality of income, wealth and opportunity in a country that should be all about a level playing field. This is not the marketplace doing its work. It is the perversion of the marketplace caused by outsized and unchecked power of the banks.

My solution is predicated on the idea that everyone is to blame for this. Everyone involved should share in losses and gains from this illicit scheme. Foreclosures should come to a virtual halt. Current servicers should be barred from any connection with these loan accounts. Risk and loss should be shared based upon an equitable formula. And securitization should be allowed to continue as long as securitization is actually happening — so long as the investors and borrowers are aware that they are the only two principals on opposite sides of a complex transaction in which trading profits are likely as part of the disclosed compensation of the intermediaries in the loans originated or acquired.

Disclosure allows the borrowers and the investors to bargain for better deals — to share in the bounty. And if there is no such bounty with full disclosure it will then be because market forces have decided that there should not be any such rewards.

11 Responses

  1. Well said, Mr. G.

  2. Anon:
    Give me a cll t 617-964-2951.
    I have a 10 year Moratorium on foreclosure bill in the state of Massachusetts.

    Here’s my opening for a 3 minute talk:’

    I’d like to tell you a different story.
    A different story from:
    1. Banks loan money,
    2. there never seems to be enough money,
    3. budgetary blues
    To a story of;
    1. so-called borrowers are the creditors
    2. there is always enough money
    3. never have a budget problem.
    With that said:
    If you knew for certain, Without a doubt, that banks DO NOT lend depositor’s money would you be upset?
    If you knew for certain, without a doubt, that banks CANNOT lend their own money, would you be concerned?
    If you knew for certain, without a doubt, that your signature on the promissory note CREATES NEW MONEY for the economy…would you be angry?
    If you knew for certain, without a doubt that you don’t really have to make those monthly mortgage payments back to the bank, would you do it?
    If you knew for certain, without a doubt, that during foreclosure the bank or other entity is REALLY trying to STEAL your home?…would you be pissed?
    The most important responsibility of the State of Massachusetts is the issuance of debt-free, honest money on the productive output of the people of Massachusetts.
    China does it. China’s money is created debt free by China, not borrowed from private bankers. We must learn to do the same.
    Money MUST BE MADE public honestly and with full disclosure for the easy exchange of goods and services and be publically issued debt-free for ALL the people, rather than a borrowed private usurious, deceptive, corrupting monetary system.
    Which you may or may not understand but with a10 year pause in your mortgage payments and time to shop, prepare and cook healthy food from the farms of Massachusetts you will:
    Eliminate foreclosures
    Eliminate budget problems
    Eliminate inflation
    In order to accomplish this task I SUGGEST two bills for the legislation to pass:
    1. Declare a 10 year moratorium on foreclosures thereby enabling All of us to take a good look at our current debt-based, interest bearing, usurious, deceptive, dishonest, unjust, corrupt and fraudulent monetary system.

    2. TAX ALL PROCESSED FOOD: remove the tax exemption on processed food.

  3. People need Neil’s help. There is no doubt about it that the “blocks” against us are huge.

    But, it is also time to get to your federal and state representatives to do something. It is time to ORGANIZE to do something. I said this ten years ago. Need a leader. I am not one, but I have a lot of the “goods” needed. Not in foreclosure, so it could help. Just can’t seem to get any representative or regulatory help to put a stop to the rampant fraud, or even listen. Anyone that has what it takes to organize, or a connection to get a petition somewhere, let me know. We need it. Big multi- mouths speak.

    Neil is right — he predicted “20 years” or more to ever recover. I also said that to someone right after crisis was exposed and he laughed at me. It is true. It will go on and on, until we stand up to it. At least we can try to prevent it from happening to our children and grandchildren.

    And, David Starkey, Neil should reveal his age. Wisdom. He knows.
    He also knows that generations before had the guts to get together and stand united. Without it, everyone will have to take the crap shoot of the judge they get. .

    We can do something if we join together. In the meantime –don’t go it alone. Trust the “wisdom”. It is a bad situation we are up against. Won’t make it without help.

    I am not affiliated in any way with this blog. I am not an attorney. This is for educational purposes only.

  4. PS Speaking about banks BRIBES to Judges.

    Most recently a debt collector was indicted for BRIBING Cook County Court Clerk Dorothy Brown. How much bribes received JUDGES from banks to fix fraudulent foreclosures against all laws?

    Time to hold JUDGES criminally liable for thefts and obstruction of justice.

    CHICAGO — Federal prosecutors announced conspiracy charges Friday against a Pennsylvania businessman accused of bribing Cook County Circuit Clerk Dorothy Brown in exchange for business with her office.

    Donald Donagher, 67, ran the debt collection company Penn Credit Corporation out of Harrisburg Pennsylvania, according to prosecutors. An indictment returned Thursday in Chicago charges him with one count of conspiracy to commit bribery and five counts of bribery of a federally financed program.


  5. Time to massively sue new property buyers who purchased fraudulent foreclosures from non-existing “Board of Directors” for fake Trusts.

    These buyers are in possession of STOLEN property which is a criminal offense in most states.

    Also sue Title Insurance Companies. As soon as such legal actions will be massive – Title Companies and potential buyers will think twice before purchase a neighbors’ stolen home.

    Sue realtors who sells illegal foreclosures, they are aids for criminal banks who launder dark money in Courts.

    In Illinois law states “If you have stolen property that was in your possession, you could be convicted of either a misdemeanor or felony under Illinois law depending on the value (!!!) of the property. If you are convicted of receiving stolen property in Chicago, Cook County or elsewhere in the state of Illinois, you may face considerable jail or prison time, fines, restitution, probation, and a permanent felony record.

    A person is also guilty of theft if he obtains control over stolen property knowing the property is stolen or under such circumstances as a reasonable person would believe that the property was stolen. See 720 ILCS 5/16-1(a)(1), (2), (3), and (4).

  6. Anon
    I know….what I stated will not hold up in court. it’s a mind set to fight the foreclosures……the mindset being….I am the creditor. I am the sovereign. I already own my own home.

    It’s knowing you are in THE RIGHT that will enable an individual or couple to prevail in court…..with all the other information that is supplied out there by Neil Garfield and others like yourself. keep on trucking!!!! And for those with the correct mindset they can keep pushing the paper around until THEY stop

  7. https://www.latimes.com/business/la-fi-wells-fargo-tim-sloan-ousted-20190328-story.html

    Wells Fargo & Co.’s embattled chief executive, Tim Sloan — who has struggled to get the giant San Francisco bank past a seemingly endless series of customer abuse scandals — retired suddenly Thursday.

    He stepped down as CEO, president and board member effective immediately, with his retirement taking effect June 30, Wells Fargo said.

    His interim replacement will be C. Allen Parker, who has served as the company’s general counsel since March 2017 after joining the bank from an outside law firm. Wells Fargo said a permanent chief executive would be hired from outside the bank.

    Sloan, a low-key Wells Fargo veteran of 31 years, took over the top job in 2016 amid the fallout over the bank’s acknowledgement that employees had opened millions of checking, savings and credit card accounts that customers never authorized.

  8. I agree with Neil. Fraudclosures should be halted immediately. Otherwise, The homeowner whose signature is on paper should Receive their share of the profits. Very simple.

    But This basically sums it up….it’s all rigged. As all of us here already know.


  9. Another great article by Neil.

    Why would debt collector servicers have two (or more) HUD statements, and mortgages in their possession? Because the prior transaction was not paid off by the subsequent transaction. It was just debt added upon debt.

    The government did not buy mortgage loans from TBTF banks in the wake of the financial crisis. They bought the fake securities, and sold off the debt collection rights to debt buyers – who remain, to this day, concealed from the borrowers. Unless the law is changed the fraud will continue, foreclosures will continue, bad documents will continue, and lies in courts across the country will continue. Of course, changing the law to demand that the true “Debt” creditor be disclosed, is up to the government who covered it all up to begin with.

    It was no coincidence that Barney Frank knew what had happened, and his conscience pushed him to try to rewrite bankruptcy laws to allow for write down of the inflated “debt” that was pushed upon unknowing borrowers. I believe he knew the loans were unsecured and wanted to make it right. It was voted down by Congress. It is also no coincidence that during the financial market heyday, these loans, and credit cards, were solicited and pushed upon consumers.

    I find it so ironic that market “investors” rely upon the consumer for growth and fat corporate profits. And yet they blame the consumer for the financial meltdown. NY is calling people “deadbeats” for not paying “hiked-up” bus fares. The term is tossed around by those who want to siphon everything they can from the people. In a predominantly consumer economy, the only source of making money is — the consumer.

    When the government allows fraud to be covered up – we are all in trouble. It will continue.

    davidsnieckus2 – what you explain may be correct, but it won’t work in courts.

  10. Thank you again Neil. You are revealing your age with you reference to: “a thermometer held over a steam radiator”. LOL Still fighting but not winning. The corruption is rampant. Equal is a figment of our imagination.

  11. IF AND WHEN the so-called borrower realizes the following three FACTS, then this banking scam ( foreclosing on homes they don’t own) will stop:

    1. Banks DO NOT lend depositor’s money
    2. Banks CANNOT lend their own money

    3. THE so-called borrower is actually the creator of the NEW MONEY, therefore they ALREADY OWN THEIR OWN HOME!!!!!

    Questions? Call me David Snieckus 617-964-2951

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