Banks are using “settlement” as a means to fill title gaps. Don’t fall for it.

So what the bank lawyers are trying to do is put us to sleep with the legalese wording and essentially appear to be saying one thing when in fact they are saying something completely different. “In relation to” is an admission that “we don’t own the loan and we don’t know who does, but from now on you agree to treat us as though we owned the loan and that we paid value for it.”

When this is done in pleadings it is at best a misstatement and at worst pure fraud.


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If there is any doubt in your mind as to whether the original note and mortgage (or deed of trust) were instruments resulting from a loan by the party named as Payee on the note or Mortgagee on the mortgage, you need look no further than any settlement agreement they propose for you to sign.

I just read another one where their obvious goal is not just settlement. It is to provide cover for illegal activities that occured while the bank was pretending to be authorized to collect, process or foreclose.

The current wording of such agreements that I have  personally received and read state these words: “Whereas the note and security instrument were executed in relation to a mortgage loan.” (e.s.) No banker would accept such wording if they had given a loan or bought one. They would want to say that the original loan was paid for by the named lender, not that they had some undefined “relation” to the loan.

The attorney for the banks know full well that the original note was subject to the defense of failure of consideration because it named a payee who had nothing to do with paying for the loan. They know full well that under all existing law, the receipt of money that is not a gift gives rise to a liability. So receipt of money gives rise to the debt — not signing the note.

So they know full well that the borrower’s receipt of money from a third party without notice or disclosure (required under TILA) creates a real liability for the debt and then a potential liability under the terms of the note even though the Payee on the note gave no consideration for the execution of the note. That is two liabilities.

And THAT means that the note is not evidence of the debt, which is owed to some undisclosed third party. And THAT means that no presumption of ownership of the debt arises from transfer of the note. Transfer of the note merely transfers the potential liability on the note (separate from the debt) to a new owner who is subject to the same defenses of failure of consideration and violations of TILA in the “loan closing” which was no real closing.

So the mortgage or deed of trust may say that it is to secure the performance of payments due under the note, but if the payments due under the note are not payments for the debt then the mortgage is unenforceable because mortgages can only be enforced to collect on debts — not notes that are not evidence of the debt. Mortgages or beneficial interests can be transferred only if the debt is also transferred and debts can only be transferred by paying value for the debt.

All of that means that if the originator did not actually make the loan, the enforcement of the note can be challenged — and there is no enforceable mortgage or deed of trust because unless the debt is what is being secured. The note is not the debt and vica versa. Contracts 101. If the mortgage refers to a note that is not payable to the owner of the debt,  the mortgage does not secure the note — even if the mortgage says otherwise.

This is all counterintuitive. I know. But it is the reason that the banks are practically willing to give credit away in exchange for allowing them to engage in selling securities based upon the only theoretical existence of the “secured” debts that are not really secured. I see signs in the marketplace where they are indirectly offering “incentives” (Payments) to borrowers to sign on the bottom line.

And that is why the usual wording from the banking industry is not used in settlement agreements where the subject is a residential loan that has been subject to purported transfers without sales of the debt.

The usual wording would be “Whereas, the borrower received a loan of money from XYZ Corp. and executed a promissory note and mortgage memorializing the loan agreement, ” followed by “whereas ABC, Trustee acquired the aforesaid debt, note and mortgage on the __ day  of ____, 200X for value paid”.

So what the bank lawyers are trying to do is put us to sleep with the legalese wording and essentially appear to be saying one thing when in fact they are saying something completely different. “In relation to” is an admission that “we don’t own the loan and we don’t know who does, but from now on you agree to treat us as though we owned the loan and that we paid value for it.”

5 Responses

  1. I am under the conclusion that NO judges can comprehend the fraud complexities. Here is what I got — “I glanced” at papers. Are you kidding? Glanced at papers? Did you read anything? Remember – I am not in default. I want clear title. Have not gotten. No judge will stamp it. But — they don’t want to read it.

    This is a sad state we are in. We need help — and we are not getting. Pro Se – sorry — support you – but your cases do not help. They harm. Need Neil’s help. Need government help. Need case law — and pro se cases not working.

    We have idiot politicians who care about nothing but themselves. THIS IS ON BOTH SIDES. They simply do not care. Abortion — All many care about. Horrible. Not making judgement – but wrong. Get head out of the people who don’t have a clue as to what is going on. Thanks Summer – you are a breath of fresh air. . .

    I talked to someone today — on loan mod — never defaulted – but has no clue has to who holds his mortgage. And, he didn’t understand it is important TO ASK!!!! . This is on a steeply priced home. He got caught up in “temporary” loan mod – that is now no longer allowed. He does not want court – says attorneys will bleed you. But he is stuck — his loan will never be cleared for clear title. THAT IS THEIR GOAL. Doubled mortgage payment. He can fix and make big payment — no answer. WHY? Because they cannot “FIX IT.” . .

    Thanks Neil – and thanks Summer — you are way above the rest.

    KEEP GOING — Way above others. Rely on you for the truth.

    People — get your head into it. Not about dining or shopping. Get real. Know what you have to do. You will NOT fix it alone. Impossible.


  2. legisman — who do you want to testify and qualify as a “mortgage expert? The banks who commit the fraud? Pelosi? Paulson? Bernanke?

    The Courts will always try to shoot down anyone but the fraudsters themselves.

  3. To legisman re Paatalo

    If Judges would follow at least SOME laws, we would not have this massive foreclosures fraud and judicial looting in the Courts

    Judges don’t care about anything except “one banker said” law.

    You can be thousands times Professor in Economics – bankers “donations” to judges and politicians will overturn all your arguments.

    Proven many times.

  4. Why do you continue to cite to Paatalo, when he lost his own property making ludicrous arguments, and every case he’s been involved in the homeowner lost their cases as well.

    Furthermore, as one court held that his qualifications are dubious as best to testify:

    “According to Paatalo’s declaration and the attached curriculum vitae, his qualifications are as follows: he worked as a police officer for seven years, as a mortgage loan officer for two years, and as a branch manager and then president of various mortgage brokerages or companies for nine years. He is now an Oregon licensed private investigator who investigates foreclosure fraud, chain of title, mortgage securitization, and defaults. In 2011, he took a 32-hour course through “CFLA,” which earned him a Certified Forensic Mortgage Loan Auditor certification, and he has spent over 10,000 hours investigating mortgage securitization and conducting chain of title analyses. He pays an annual $25,000 membership fee to conduct searches on ABSNet, which he describes as a private software program used by institutional investors in mortgage-backed securities. His declaration is silent as to what training, if any, he has received on using the ABSNet program and why he believes his search results are reliable or accurate.

            The trial court ruled that Paatalo “failed to establish his appropriate qualifications to testify as an ‘expert forensic witness in the areas of securitization,'” and that “[t]here is no evidence showing Mr. Paatalo’s experience in investment banking and/or securitization of mortgages.” The court found Paatalo’s experience as a police officer and private investigator to be irrelevant to his qualifications as an expert in the area of mortgage securitization. The court further found that his work in the mortgage industry only reflects his knowledge of loan origination and perhaps title documents, but does not render him qualified in the specific area of mortgage securitization. As for the 32-hour course to obtain a Certified Forensic Mortgage Loan Auditor certification, his experience investigating mortgage securitization and chain of title analysis, and his payment of the $25,000 ABSNet membership fee, the court found these “insufficient to establish specialized knowledge, training, or experience in properly researching and analyzing mortgage securitization related issues.” (Italics added.”) Qumsia v. Selene Fin. LP (Cal. App. 2018).

    Moreover, CFLA is a known scam and this is where this clown got his education:

  5. Excellent again Neil. And, will tell you this – if you cannot sell your house later because “title” is deemed not marketable — you will have no insurance coverage. If you manage to get it sold because some title company puts it through, the new buyer will likely unknowingly assume the “bad debt” and your position. Since there will be NO insurance coverage for you, and title company will likely exempt the new buyer’s “mortgage,” you could be liable to the new buyer.

    Unfortunately, many pro se do not understand the complexity of clear marketable title. They do not understand what they are bargaining for — including with a modification.

    As Summer points out – the government is not doing their job. In fact, they promote it.

    That is why help from Neil is critical.

    Thank you.

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