This is where you start, subject to opinion of licensed local counsel.
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Let me first stop you from referring to your nonpayment as a default. It is not a default if you stopped making payments to someone who lacked any authority to collect them. By saying you “defaulted” you are inadvertently admitting that it was a default and therefore tacitly admitting that the party demanding payment was entitled to do so. It’s all downhill from there. So don’t do that.
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In most cases your originator appears to have been nothing more than that. In other words it was not your lender. It was mostly an independent entity that sold or brokered the loan or a subsidiary of a securities brokerage firm which went out of business and was acquired by a larger bank or securities brokerage firm without any payment or transfer of ownership for your debt.
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YOU MUST TAKE ACTION IN ORDER TO PREVENT ANY FURTHER ACTION RELATING TO YOUR PROPERTY.
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Based upon proprietary data accumulated by GTC Honors, Inc. over the last 13 years I have virtually no doubt in nearly all cases that the parties involved in collection, processing and enforcement of your loan have never paid value for the debt, which is to say that under the laws of most states means that they don’t own the debt. And under the laws of all states that adopted Article 9 §203 of the Uniform Commercial Code (all 50 states) a condition precedent to enforcement the mortgage is that the claimant must have paid value for the debt. See end of this article for explanation of securitization.
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BUT such payment and ownership is often presumed from the apparent facial validity of (a) the original loan documentation and (b) transfer and apparent delivery of the promissory note and mortgage or deed of trust. You must rebut that presumption.
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My interpretation of all that, based upon applicable case decisions, statutes, rules and regulations is that the following must be true in order for a foreclosure to be a valid exercise of legal rights that belong to a creditor:
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- The foreclosure is initiated on behalf of a creditor — i.e., one is who has paid value for the debt in exchange for legal ownership of the debt.
- The forced sale of the property will result in a paydown of a legal debt owed to a disclosed creditor.
- If a servicer is involved their authority to collect, process or enforce the debt must have come from the creditor who paid value for the debt in exchange for legal ownership of the debt.
- Proper notice and demand for the correct amount due must have been delivered on behalf of the creditor and received by the borrower.
- The creditor must be sufficiently identified so as to comply with ordinary rules and practices governing the requirements of legal pleading.
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I don’t think any of the above elements apply to most cases. The foreclosure was most likely a ruse. The problem for you, like other homeowners, is that all of the above elements are assumed by the court based upon fabricated documents that are forged, back-dated and robosigned. On their face, these false documents are facially valid. And courts are required to basically take everything at face value unless challenged.
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Thus you are faced with “proving” a negative. This is accomplished in discovery. By revealing to the court the unwillingness of the claimant’s attorneys to answer simple questions about the debt they say they are enforcing and the presumed agency relationships among them, the case turns against the claimant and its attorneys if you have aggressively pursued discovery with follow up motions to compel, motions for sanctions and motions in limine. The case turns in favor of the borrower many times because the litigation changes to a conflict between the foreclosure mill and the court and away from the named claimant and the borrower.
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ONLY A COURT ORDER ISSUED BY A STATE OR FEDERAL COURT CAN STOP A FORECLOSURE SALE OR EVICTION. CONSULT WITH LOCAL COUNSEL ON ALL MATTERS.
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Failure to challenge the foreclosure in a court of competent jurisdiction will ordinarily result in a sale of your property. This means that if you are served with process you have only a certain number of days to respond or else your property might be sold even though you have valid defenses.
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This is not a substitute for getting advice from a lawyer who is licensed to practice law in the jurisdiction in which the property is located.
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I am not offering any services that involve actively representing you or filing documents for you in court. My services are strictly offered in support for your local counsel and/or for your own use if you proceed pro se, which we advise against.
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In order to help you I need information and I need to analyze that information perhaps doing some additional research and investigation of my own. You should seek the services of legal counsel if only to get their advice on local procedure and substantive law.
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The best way to find a lawyer is to be able to present that lawyer with a summary of your situation in a form that can be reviewed in just a few minutes. You should have a clear-cut set of goals that are realistic in the context of millions of foreclosures that were successfully completed as a result of default by the homeowner (failure to defend) or ineffectual defense
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Let’s take it one step at a time.
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So if you want to get started, here is what you need to do:
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1. If you want to submit a new registration form CLICK HERE.
2. If you already have a forensic report that includes a full title report with copies of all documents recorded in the chain of title, I will want to see that as part of my review of your case.
3. If you don’t have such a report you need to order one. We do that with our TERA report (see below). If you order the PDR PREMIUM you don’t need to order the TERA unless you need a written report. Remember that a report is not automatically admissible evidence and must be subject to live foundation testimony before its introduction as evidence except when an affidavit is used in motion practice.
4. In order to give you guidance on strategy and tactics, subject to opinion of local counsel, I will need to review court filings, notices, correspondence and statements. That is our Preliminary Document Review (PDR) — see below.
5. The PDR includes a phone consultation with me for either 30 minutes (PDR BASIC and PDR PLUS) or 60 minutes (PDR PREMIUM).
6. From what I already know you will get the best guidance by (a) ordering the TERA (or providing its equivalent) and (b) ordering the PDR including the CONSULT (see below).
7.It would be wise to order the PDR PLUS or BASIC.The Preliminary Document Review (PDR) includes a 30 minute consultation with me. It is recorded and a copy of the audio file is provided to you when we receive it from our conference bridge, www.freeconference.com. Most clients have it transcribed or ask us to order transcription at a cost of around $135 for each 30 minute segment — or they transcribe it themselves. Some get a friend who knows how to transcribe.
8. The way you get your documents to us is by uploading them by invitation to our ftp server account on www.box.com. You will get that invitation once you order a PDR. You’ll be able to use that folder to show anyone what is in it — but only by your providing them with the link. Otherwise it is very secure which is why I use it, along with governmental agencies, law enforcement and hundreds of law firms.
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IT IS A GOOD IDEA TO KEEP OR CREATE A JOURNAL THAT YOU CAN SHARE WITH ME, BY UPLOADING IT AS A WORD OR PDF DOCUMENT TO YOUR FOLDER ON BOX.COM.
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9. AFTER we have done at least preliminary analysis and AFTER we have spoken with you, we can agree on the scope and cost of engagement for us to write the narrative for your strategy and prospective tactics in court.
10. THEN I send you an email retainer agreement containing the scope of the engagement and the pricing and costs.
11. If you agree to the terms of the email retainer agreement, THEN I will bill you for the retainer payable as we have previously agreed.
12.Upon payment of the non refundable retainer we commence work on drafting your narrative, pleading, discovery or other scope of engagement.
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CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
CLICK HERE TO ORDER CASE ANALYSIS (not yet)
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. EVEN THOSE THAT PRESENT THE DEFENSES PROPERLY LOSE, AT LEAST AT THE TRIAL COURT LEVEL, AT LEAST 1/3 OF THE TIME. IN ADDITION IT IS NOT A SHORT PROCESS IF YOU PREVAIL. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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EXPLANATION OF SECURITIZATION: The fundamental problem with securitization is not that it is illegal but rather than it encourages illegal behavior based upon false representations and misrepresentations to the courts.*The single reason for this lies in the start of virtually all securitization schemes. The money is coming from investors who make deposits with securities brokerage firms in exchange for an unsecured promise to pay in which the debtor is either a barely existing trust or the brokerage firm using the name of the “trust” as a business fictitious name.*Those investors are often referred to as certificate holders. Certificate holders are never beneficiaries of any trust and any claim by a “trustee” to represent the certificate holders is pure fiction.*Translation: Investors pay for the debt but they don’t get ownership of it. But the debt is funded before it even comes into existence with a loan to a borrower.*Common law and statutory law for centuries has held that a debt can only be enforced through foreclosure if the debt is owned by the party on whose behalf the foreclosure is initiated. All such law states that debt is only acquired by payment of value for it in exchange for ownership of it. The investors indirectly paid for it but they never received ownership of it. And they don’t get the payments from borrowers either monthly or through foreclosure.*Since payment was already made by investors, no party claiming to be a “successor” could or would make a payment to a preceding party who was not and could not demand payment — since the preceding party in the chain of paper instruments had not paid for the debt and therefore did not own the debt. That is the current and historical status of our laws.*The investors were not named as the payee on the note or the mortgagee (or beneficiary) on the mortgage (or deed of trust).*The securities brokerage firm (“investment bank”) who channeled the investor money to the closing table for loans through the escrow accounts of closing agents was never named as payee on the note or mortgagee (beneficiary) on the mortgage (or deed of trust).*The possibly existing trust was not named as Payee or mortgagee, but it was named as assignee on a fabricated assignment of mortgage in which the debt was not transferred by sale. Neither the trust nor the party named as trustee paid for for the debt. An assignment of mortgage without the debt is legal nullity in all applicable jurisdictions.*No trustor or settlor paid for the debt. Hence no debt was entrusted to the named “trustee.” The named “trustee” receives nothing except mention in an endorsement of the note or assignment of mortgage, which it holds not for investors but for the securities brokerage firm that started the securitization scheme.*In most cases both the original note and mortgage are not supported by consideration from the party named as payee on the note or mortgagee or beneficiary. Hence no consideration is actually paid to any predecessor and therefore no transfer of ownership of the debt has ever occurred. In cases where the origination was in fact paid by the “lender” the movement of money stops immediately after the originator is paid for the loan because the money came from the investors, and is not carried on the books as an asset of the securities brokerage firm, it at all, for more than 30 days.**ELEPHANT IN THE LIVING ROOM: Yes this produces an anomaly in which there is no legal owner of the debt. That is what Wall Street intended. It is what enabled them to make huge profits equal to vast multiples of the “loans” that were being granted. In reality those were not loans but merely a cost of doing business — in the business of issuing and trading unregulated securities. It is called “leveraging” or “laddering” depending upon whom you ask.**It is not borrowers saying “there ought to be a law” because the laws are already there.*It is the foreclosure mills and banks who want and get the courts to ratify illegal behavior. Wall Street changed the very essence of lending from risk of loss from nonpayment to elimination of risk of loss and still getting payment.*This was a change in the reasonable expectation of homeowners who appeared as borrowers that the laws (TILA and state lending laws) applied and that the lender was responsible for and cared about the viability of the loans. In fact, the “lender” was most often brokering the loan and papearing, for a fee, as Payee and mortgagee (beneficiary) despite the absence of any financial interest in the loan or its transfer.*Accordingly, nearly all foreclosures, if successful, result in a distribution of money to a variety of players who receive such money as fees, compensation, profits or commissions and not as payment for the debt (because they do not own the debt).*The question often posed is why should the homeowners get a “free house” as a result of all this. That is the wrong question. In the face of failure to disclose the gross revenue arising from origination or acquisition of the loans and the identities of the players involved, (a) why should such behavior be rewarded and (b) why shouldn’t the homeowners be able to exercise their legal rights to disgorgement of such undisclosed profits and compensation?*
Translation: If securitization was performed in a legal manner there would have been detailed disclosure to investors and borrowers as to exactly what was happening with the money and changes in documents in which some entities would have been designated as possessing the right to foreclose even though they did not have actual ownership of the debt. The borrower would need to agree to that. Now what is needed is not twisting old law without regard to the intrinsic value of the transaction to both sides. Any law allowing such transactions would require full disclosure to investors and borrowers.
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So an investor who is putting up money would then know that the underwriting of loans was no longer based upon risk of loss. And the investors would know that the incentive was to loan money in high risk loans in order to maximize the tier 2 yield spread premium. And thus the investor would either bargain for more stringent underwriting standards or a piece of the pie generated by liberating loans from risk of loss — or both.
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And a borrower would know that his signature is triggering a highly profitable series of securities being issued on the basis of his signature, name, credit reputation and his home as collateral. The borrower would then know that the lender did not care about repayment, except in the abstract. The borrower would know that the the source of revenue was not so much interest income as it was profits from issuance and trading in securities. In short the borrower would know the entire contract not just the part where he signed loan documentation.
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And then the borrower would have the opportunity to bargain — the key reason for passage of the Federal Truth in Lending Act — for greater assurances on the viability of the loan (including valid appraisals) or again a piece of the pie that was heretofore concealed from the borrower. As of now borrowers still do not know the risk they are assuming.
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Whether the market forces will even out in a world where there is full disclosure is a matter of conjecture. But the point of our economic and legal system is to provide the greatest possible assurances that free market forces are operating — something that cannot happen where there is gross asymmetry of information.
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Maybe the borrower will get paid enough to pay off the “loan” and maybe not. But one thing’s sure: if homeowners continue to win their cases, the “free house” will be the result of illegal activity by the foreclosure mills and investment banks — not the result of any misbehavior by borrowers.
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Put another way, if a pie was created by investment banks why should they get all the slices unless the other parties were at least told about it?
Filed under: foreclosure |
Thanks Neil. What you seem to be explaining is that these loans are NOT mortgages, but, rather just a debt. It is akin to a credit card with a high “credit limit.” (I highly question how this could have happened, but happen – it did).
Now, I recall Barney Frank (well connected to the GSEs) trying to change bankruptcy law years ago. It was voted down by Congress. I am sure that Mr. Frank was aware of the actual status of these loans, and that is why he wanted to change the law.
What we have to deal with in courts is trying to show that the “mortgage” is not a mortgage at all. That is why no consideration was paid. Without a mortgage holder, there is no “title” to the property, and, therefore, the property is not marketable. And, there is no entity that can enforce the “note.” The note is not a negotiable note as the mortgage was never a mortgage.
I encourage everyone to get help. This is beyond the ability of pro se litigants. Attorneys must also become more adept. Changing the mentality of even one judge can influence case law.
Thanks.