Livinglies's Weblog

Shame and ignorance prevents a homeowner and frequently their lawyer from responding intelligently to that question often posed by the Judge in foreclosure cases.

The judge’s question is perfectly reasonable. If you are saying you didn’t sign anything then the entire case is different than the usual case. He or she wants to know.

If you admit to signing papers and getting money then several things start happening. First there is no formal loan agreement in residential loans. The loan agreement is treated as being in existence by virtue of combining the documents you signed, the disclosures and the applicable statutes governing lending practices.

The judge focuses on signing the note and mortgage. The rest is presumed — that you received money or the benefit of payments made on your behalf and that you agreed to pay it back because it wasn’t a gift or payment for services.

The first thing to remember is that the transaction might not have been a “loan” even though that was your intention and what you thought was happening and probably what you still think happened. Whether you use this piece of knowledge or not is up to your local counsel.

The fact is that the payment of money by the investment bank was merely a cost of of issuing securities. That was the only  business plan. The signing of the documents was a part of the process of issuance of securities.

The payment to the homeowner could only have been a loan if the party paying the money to or for the “borrower” intended to get it back as owner of the debt.

Instead, if the foreclosure is allowed to proceed, the investment bank will receive the proceeds of sale as revenue since it divested itself of all risk of loss and all vestiges of legal or equitable ownership of the borrower’s obligation long ago.

The investment bank in every case pays the money with no intention of retaining the risk of loss or being the owner of the debt, which would mean that it was a lender subject to restrictions contained in lending laws. Note that the banks do not acknowledge or admit that the transactions were table funded loans. They don’t say they own the debt. They just say they want the money and they do it through layers and layers of corporate entities.

And you don’t know if the document they show you in court is actually the document you signed. It almost certainly is not since it was custom and practice to destroy the original notes and rely on images that could be manipulated and doctored.

So the correct answer to the question in the title of this article is

“No, I didn’t sign a contract for the transaction because the entire transaction was never presented to me.

“Instead I was lured into executing documents on the false premise that the Payee shown on the note and the lender shown on the mortgage would become my creditor. They did not. That left me with no creditor because the investment bank that paid for the transaction never claimed ownership of the debt nor did they have any agency relationship with the originator. So I had no creditor.

“If the originator was a creditor they would have paid value for the transaction. They didn’t. And it took great pains to assure that the originator who appears on the note and mortgage was NOT in an agency relationship with the source of funds which was an investment bank looking to issue, sell and trade securities. At no time did the investment bank accept or intend to accept the risk of loss which defines ownership of a debt.

“So I deny entering into a loan contract but I admit that I have a liability for money received or paid on my behalf.  I deny that the note is evidence of that liability because at present, without reformation, it is not payable to a creditor and has never been indorsed to a creditor. (proper legal terminology is “indorse” not “endorse”).

So the note violates all known lending laws basically because it recites a transaction between me and the originator that never happened. The fact this this information was illegally withheld contrary to disclosure requirements that have existed for more than 50 years should be held against them, not me.

“And I deny that the mortgage or deed of trust is a proper lien on my property because first it secures a liability on the note which needs to either be reformed or declared void.

“Second it secures a party with no ownership of the debt contrary to Article 9 §203 of the Uniform Commercial Code as adopted in all U.S. jurisdictions which states that no enforcement of a security instrument is possible without value paid for the underlying debt.

“It also cannot be enforced because of common law accepted in all U.S. jurisdictions that a document of conveyance of the lien without a concurrent transfer of the underlying debt is a legal nullity.

“Once again, the fact this this information was illegally withheld contrary to disclosure requirements that have existed for more than 50 years should be held against them, not me.

“So the security instrument also must be reformed or declared void and certainly all assignments starting with the originator are void because there could not have been a transfer of a debt that was paid for by the investment bank unless the investment bank executed the transfer.

“Therefore the court lacks subject matter jurisdiction over this action. There is no loan agreement yet because the parties have neither been properly aligned nor are they properly named. In the absence of at least a declaration or allegation as to payment value for the debt in exchange for ownership of the debt, there is no claimant before you that possesses a justiciable claim.

“There can be little doubt that a liability exists with respect to money received or paid; nor is there much doubt as to whether that liability might be or become secured through reformation of the instruments.

“But until then, the homeowner has no ability to assess the amount demanded, whether compensation was due from the total single transaction for the issuance, sale and trading of securities, and to whom the liability is actually owed and whether there are offset claims for disgorgement of money illegally obtained, breach of statutes, common law duties or anything else.

“So the answer to your question is that no, I didn’t sign a contract for the transaction that occurred. I signed a document with false utterances and I have no idea whether the one they have today is the original or a copy of a copy that has been mechanically reproduced so as to emulate an original.”

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Filed under: foreclosure |