Why Homeowners Should Win Foreclosures: It’s the Moral Thing to Do.

The reason why thousands of cases have been confidentially settled with satisfactions of mortgages, payment of attorney’s fees and damages is that the banks are willing to pay anything necessary to preserve the tree (certificates) and the branches (derivatives) and the leaves (minibonds and contracts like credit default swaps). The risk to the investment bank is enormous if the tree falls. All that profit turns into liability. Borrowers and their attorneys miss the point when they value the case based upon the principal due or the amount of arrearages. The banks don’t actually care about that because they already recovered that money long ago — after the loan closing.
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The currently prevailing view is that the foreclosure presumably results in the payment of a debt to a creditor who is owed the debt and would otherwise suffer a financial loss. A lot of forensic material is interesting but does not address this fundamental bias. I think the fundamental error committed by most borrowers and their attorneys is not understanding the practice of securitization — PLUS not taking time to analyze the timeline of ownership.

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The Judges are right when they say “you got the loan didn’t you?” In most cases the answer is yes. At the moment that the money from the loan was paid to or on behalf of the borrower a definable creditor existed. It may have been the “lender” or not. But someone advanced those funds and they would be construed as the creditor at the time of the loan closing. That doesn’t include MERS or any sham conduit and certainly does not include entities posing as lenders when they did not legally exist.
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The error by foreclosure defense attorneys is the failure to continue the analysis. Most of them feel a little guilty about getting a free house, attorneys fees and damages for someone who had “defaulted” on their loan. That guilt is traceable to a belief that someone is getting cheated out of money that they loaned. That belief is misplaced.
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After the loan closing the debt is split up into many pieces. If you speak with closing agents who will candidly admit that they now know something was amiss, the fake securitization scheme is hatched in the shadows of what happens after the loan closing. It can be seen in the “Return to” instructions and the instructions to the closing agent of where to fax the note and where to send the original note for   shredding. According to several closing agents I interviewed it was the the mortgage broker who came in and signed the “allonge” creating facially valid bearer paper. This was all done after closing.
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Before the loan closing the prospect of the debt is split up into many pieces. Within 30 days after origination or acquisition of the loan by the investment bank, the loan is not on the balance sheet as an asset because the investment bank has already been paid off by investors who waived their right, title or interest to the debt, note or mortgage. At that point in time nobody has the loan as an asset on their balance sheet. 
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There are dozens of entities that have advanced the money by which the investment bank was able to remove the loan from its balance sheet. None of those entities owns rights to enforce the debt but all of them have either equitable or legal rights to ownership of the debt, without the right to enforce.
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The laws requiring that the debt owner must be present for enforcement of an encumbrance (deed of trust or mortgage) are breached if the debt owners are not named; but more importantly perhaps is the fact that enforcement in their name would reveal in discovery that they had no rights to enforcement because they explicitly waived those rights.
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The derivative contracts held by investors derive their value from the existence of the debt and the debt certainly does exist. So for trading purposes that is all they need. But they have disclaimed severed the legal right to demand collection, declare a default or initiate foreclosure. This is what protected the investment bank from liability for selling the debt multiple times.
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A foreclosure initiated by a servicer or Trustee or Trust or group of investors fails to comply with applicable law and should fail. None of them actually own the debt directly and none of them have the right to enforce the debt. But that is not the real reason they should fail.
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They should fail because all of them have received a benefit and some of them have received a windfall derived from trading on the borrower’s signature on the note and mortgage in an amount far exceeding the principal amount loaned. The bulk of the windfall was received by the investment bank who was the original creditor of the new or acquired loan.
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And those “benefits” or trading profits” were derived strictly because they were trading on the signature of the borrower, together with the borrower’s name and reputation, without disclosure to the borrower of compensation to be received arising from the origination of the loan and without consent from the borrower to trade on his/her name, signature and reputation.
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Contrary to popular belief, it really is that simple. If there was no signature from the borrower, none of the trades could have occurred, and none of the sales of certificates could have occurred.
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To give a free house to the investment bank via an empty nonexistent trust represented by a “trustee” with no trustee duties and a servicer whose authority derives from the nonexistent trust is to add insult to injury. Most of the foreclosed loans have been the result of “refinancing” wherein hard sell salesmen convinced borrower’s that their home was worth twice what they thought it was worth and gave them a loan based upon the artificial price rather than the real value. When the market crashed none of the risk associated with this practice was absorbed by the investment banks that set it in motion. All of it was forced on borrower’s who believed the lender’s appraisal.
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The goal of the investment bank as creditor was not to make money on a loan but to make money by trading in “securities” whose value was derived from the existence of the loan — all without actually granting the normal rights to title and interest to the debt, note and mortgage. This preserved the right to sell the same debt multiple times.
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It is this fundamental undeniable fact that most people are missing when they litigate or even negotiate modifications. The bank’s ONLY concern is the preservation of the appearance of the loan as the base to a virtual tree and branches of derivatives that were traded in which the investment bank was not only relieved of any risk, but in which the investment bank received “trading profits” equal to many times the amount loaned. Those trading profits turn into liabilities for the investment bank if the tree is cut down.
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All foreclosure litigation is thus a high stakes game for the banks who continue to conceal their true motives and intent. When foreclosures are granted and the property is sold the money goes to the investment banker who simply keeps the money rather than crediting it to any other party who has paid the investment banker for the debt. This happen because paying off everyone would mean paying many times the principal amount of the debt and many times the allegedly accrued interest. Investors actually know this and don’t care because the value of their “Securities” is based upon market valuation in the shadow banking market where all values take on a life of their own.
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The reason why thousands of cases have been confidentially settled with satisfactions of mortgages, payment of attorney’s fees and damages is that the banks are willing to pay anything necessary to preserve the tree (certificates) and the branches (derivatives) and the leaves (minibonds and contracts like credit default swaps). The risk to the investment bank is enormous if the tree falls. All that profit turns into liability. Borrowers and their attorneys miss the point when they value the case based upon the principal due or the amount of arrearages. The banks don’t actually care about that because they recovered that money long ago.
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Given the fundamental breach of the lender’s obligation to make a viable loan, it seems like quackery to then give the investment bank, who is no longer a creditor, a free house and the proceeds of sale. Given the trading on the borrower’s signature,, name and reputation without disclosure much less consent, it seems like outright theft to reward them with a house or the proceeds of foreclosure.
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While some blame can be attributed to the borrowers for not being more careful the Federal and State lending statutes make it clear that the duty of creating a viable loan is squarely on the “lender,” who in most cases was nowhere to be seen. This problem was solely invented by the banks without any input from prospective  borrowers or regulators.
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In a perfect world the blame would be shared proportionately according to the level of blame. It’s not the fault of borrower’s that the world of foreclosures is imperfect. Millions of homeowners did not wake up some morning and go to a meeting where it was decided to screw the financial system. We all know it was the other way around. Until that is addressed voters will continue their anger because they know it too.
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This scheme was conceived in the context of a belief that they could get away with it and so far, they have in all but a few thousand cases in which the borrower’s have mounted an aggressive defense revealing gaps in the claimant and gaps in the claim. The painful truth is that most people who left their keys on a clean kitchen counter were  delivering a free house to a band of thieves who had already screwed them several times.

7 Responses

  1. Everyone must try get to Trump. Trump does not want any trouble with the banks. Another puppet administration. One after the other.

  2. A separate justice system becomes just as corrupt as the original. We need to reform the current one.

  3. No justice in Florida. On 3/27/19 1DCA- Szabo case, my case, as Per Curiam. Affirmed. No opinion written = no appeal to SC.
    If I have no 2 children which I have and I don’t believe in god, which I do, I will take a justice to my hands. Don’t bang your head against a brick wall.

  4. Tell me these judges are unaware that their findings ‘mainlining’ these carpetbaggers right back to Main St. It’s such a huuge money maker. They can’t leave that ‘fix’ alone.

    Even more worrisome…? Their scam is a ‘business model,’ institutionalized. All their systems are in place, they’ve perfected them, and judges provide cover of law.

    We’re in trouble we can’t get out of on neither fact or reason, who’s going to be rendered defenselss in this next wave?

  5. In florida we were told point blank judges were told they needed tio move foreclosures along our they will not get a raise. And they are being rated on how many foreclosures they make happen for a big bonus check. My source that told me this is prttey authentic
    Which means wet do not have a chance in florida court. So much for our due proccess. This was know before the modification idea. Telling a homeowner who calls wells Fargo or Any bank. And told you have to stop paying in order to apply for a hamp is a lie. They knew that was a lie…. But told us anyway. What about the employees saying that why would they do that to another fellow citizen? Then when the home owner applies do what ot takes to deny. Let’s see……the denial of the hour…….move file out of review I. Underwriters day off. Or how about saying the documents that were fedexed were not received but change the story all of the sudden when confronted with a tracking #. My favorite is thou fax the documents and told they weren’t received.
    All horrible yet the wells Fargo ceo says 600 prime affected and sent 15k to them all?????? Hee knows where they are all living??????
    I think irs time to fight back these banks. We need ideas were need lawyers to take these cases but wet must say enough is enough

  6. Should we abolish regular Courts and banks’ bought Judges and demand a separate justice system which will serve ALL people equally and in accordance with the LAW ? With only trials by Jury, not judges?

    Banks made quadrillions from these loans – and stole homes from millions. People who bailed out banks got nothing except dealing with corrupt judges and criminals who pretend to be “Plaintiffs”

    Recent example – a friend became a victim of fraudulent foreclosure when in 2006 (!) he signed a predatory loan with CountryWide. This loan was already misleading and unfair – thus initially invalid.

    Soon Countrywide merged with BOA and ceased to exist.

    In 2016 (!) Bayview Loan Serivicing LLC filed a foreclosure where they attached an Assignment where MERS, a mortgagee, transferred its interest in 2011 (!) to Bank of NY Mellon as Trustee for SWALT 2006 15CB, a fake Trust which does not exist.

    But MERS had to transfer its interest to BOA first, as a successor of interest by merger, right? Aaa, who cares, judges will approve any fraud for banks.

    The Note was robo-stamped without any assignments.

    At the beginning of the foreclosure Bayview, who came out of nowhere, claimed to be an “attorney in fact” for the Plaintiff – “mortgagee” Bank of NY and their non-existing SWALT Trust.

    In February 2019 (!) Bayview employee, Terrence Schonleber filed an Affidavit claiming that the Mortgagee in foreclosure case is actually …Bayview Loan Servicing!!!!

    Pardon, but the Plaintiff in this case is still Bank of NY, a purported mortgagee for this loan!

    So, Bayview confirmed that Bank of NY who never had standing to sue, not is NOT a Mortgagee thus have NO interest in this loan – but still acts as a Plaintiff???

    I want to scream from our Circus of Justice operated by criminals

  7. It’s well past time millions of people chop this Oisin tree down. Enough is Enough!!!

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