The Big Hoax: Are “Sales” of “Loans” and “Servicing” Real?

References to sales of loans and servicing rights are usually merely false assertions to distract homeowners and lawyers from looking at what is really happened. By accepting the premise that the loan was sold you are accepting that the loan was (a) real and (b) owned by the party who was designated to appear as a “Seller.”

By accepting the premise that the servicing data and documents were transferred you are accepting that the transferor had the correct data and documents and that the designated servicer is actually in position to represent the accounting records of the party whose name was used to initiate the foreclosure.

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As Reynaldo Reyes of Deutsche Bank said in deposition and in recorded interviews, the entire structure and actual events are “counterintuitive.” The banks count on that for good reason. Most lawyers and almost all homeowners assume that at least some of what the banks are saying is true. In fact, nearly everything they say, write or produce as “business records” is a fabrication. But homeowners, lawyers and judges buy it as though it was solid gold.

In defending homeowners from foreclosure, lawyers who win more cases than they lose do so because of their willingness to believe that the entire thing is a hoax. Their withering cross examination and use of discovery reveals the complete absence of any corroborating evidence that would be admissible in court.

Even the most “biased” judges will concede that the case for foreclosure has not been made and they rule for the homeowner. But this only happens if the lawyer takes the opposition to task.

Chase did not acquire loans from WAMU and WAMU did not acquire loans from Long Beach etc. At the time of the claimed “acquisition” those loans were long gone, having been funded or purchased by one of the big 4 investment banks, directly or indirectly (through intermediate investment banks or simple cham conduit fictitious names or entities). In fact the ONLY time that the actual debt was clearly owned by anyone was, at best, a 30 day period during which the investment bank had the debt on its balance sheet as an asset.

So all sales from any seller other than one of the investment banks is a ruse. And there are no references to sales by the investment banks because that would be admitting and accepting potential liability for lending and servicing violations. It would also lead to revelations about how many times and in how many pieces the debt was effectively sold to how many investors who were NOT limited to those who had advanced money to the investment bank for shares in a nonexistent trust that never owned anything and never transacted any business.

Similarly the boarding process is a hoax. There is generally no actual transfer of servicing even with the largest “servicers.” They are all using a central platform on which data is kept, maintained, managed and manipulated by a third party who is kept concealed using employees who are neither bonded nor trained in maintaining accurate records nor protecting private data.

There is no transfer of servicing data. There is no “boarding” and no “audit.” In order to keep up the musical chairs game in which homeowners and lawyers are equally flummoxed, the big investment banks periodically change the designation of servicers and simply rotate the names, giving each one the login and password to enter the central system (usually at a server maintained in Jacksonville, Florida).

BOTTOM LINE: If you accept the premises advanced by the lawyers for the banks you will almost always lose. If you don’t and you aggressively pound on the legal foundation for the evidence they are attempting to use in court the chances of winning arise above 50% and with some lawyers, above 65%.

To be successful there are some attitudes of the defense lawyer that are necessary.

  • The first is that they must believe or be willing to believe that their client deserves to win. A lawyer who thinks that the client is only entitled to his/her time or a delay of the “inevitable” will never, ever win.
  • The second is that they must believe or be willing to believe that the entire scheme of lending, servicing and foreclosure is a hoax. Each word and each document that a lawyer assumes to be valid, authentic and not fabricated is a step toward defeat.
  • The third is that the lawyer must fight to reveal the gaps, consistencies and insufficiencies of the evidence and not to prove that this is the greatest economic crime in human history. All trials are won and lost based on evidence. The burden is always on the foreclosing party or the apparent successors to the foreclosing party to prove that title properly passed.
  • Fourth is arguably the most important and the one that is most overlooked. The lawyer must believe or be willing to believe that the foreclosure was not initiated on behalf of any party who could reasonably described as a creditor or owner of the debt. The existence of the trust, the presence of a real trust in any transaction in which a loan was purchased, sold or settled to a trustee, and the various permutations of strategies employed by the banks are not mere technical points. They are a coverup for the fact that no creditor and no owner of the debt ever receives any benefit from a successful foreclosure of the property.

Yes it is counterintuitive. You are meant to think otherwise and the banks are counting on that with you, your lawyer and the judge. But just because something is counterintuitive doesn’t mean that it isn’t true.

8 Responses

  1. CementBoots — good one!!!

  2. I think I just figured out the legal model for Securitizing Mortgaged Loans…

    In Mohave County, Arizona, if anyone is caught stealing soap, he must wash himself with it until the soap is gone.
    (Source: Linz, Kathi. Chickens May Not Cross The Road and Other Crazy (But True) Laws. New York, NY: Houghton Mifflin Company, 2002.)

    So, If anyone is caught stealing a Mortgaged Loan, he must securitize it repeatedly until the value is gone… lol

  3. AXJ — this is probably the most accurate and enlightening statement that I have seen here!!!!

    First, no loans ever went on anyone’s balance a real asset — not even for thirty days. This is because by refinance, the prior loan was never paid off by the borrower. These non bank originations were just collection transfer of already declared default debt. And, what regulator, in their right mind, would allow high rates on manufactured defaults?

    AXJ is right. This all began with the 4 big banks being servicers to Freddie/Fannie (F/F). Someone told me this a long time ago. Forget his name but he wrote a book. He used the same number — 4. The servicing to F/F was limited to these 4. We all know who the 4 are. Although the government sold the “fake” securities, via the Public Private Investment Program to distressed debt buyers, the loans remain with the big 4. And, the treatment is as default debt, whether in default or not, because ALL were manufactured default if loan is now claimed to be securitized into a fake private label trust.

    F/F was stiffed – I agree. They, I assume, by sloppy records, did not know that the tranches they purchased in the private bank trust (securitized by the big 4 and more) — were loans that were reported to them as in default by the big 4 servicers. They didn’t check their own records. Why was this done? Profit — high adjustable rate better then fixed rate that the F/F loans largely were.

    Here is the catch — the 4 banks starting hiring their own servicers. — and subservicers – and we all know who they are. And, they start screwing the big 4 – who had no right to the money in the first place. Does anyone really think the CFPB cares about the borrowers?

    Thanks AXJ — EXCELLENT — puts missing piece of puzzle into place. .

  4. It’s all based on half-truths, misnomers , verbal inaccuracies , and terminological inexactitudes. In other words, it’s a pile of ….

  5. The alleged loan documents are transferred to the Federal Reserve and one of the big 4 open an account in your name. The alleged servicers are then supposed to keep 6% of your payments to them and transfer the balance to the big 4 that has you account but it never happens. That is shy Fannie Mae went from $80- a share in 2008 to $1- a share today. They got stiffed and so did all American Taxpayers.

  6. […] Source: The Big Hoax: Are “Sales” of “Loans” and “Servicing” Real? […]

  7. This third party central platform on which data is kept, maintained, managed and manipulated can be CoreLogic, google them

  8. So what really happens?

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