You got the loan didn’t you? Maybe not.

OK so let’s address that. It is quite natural to think that in ordinary circumstances that a loan was made and therefore some amount of money is due to somebody. So how do we address that natural bias? Allow me to play with that here.
The presumption that a loan was made is just that — a presumption. It isn’t a fact unless the alleged borrower agrees he received money and that it was a loan transaction — or it is proven (which never happens). It is a conclusive presumption in the absence of a challenge by the borrower because that is how our system works. It takes the customary experience and makes it into a presumption.
And clearly the fact that the borrower executed documents that are considered to be part of a loan agreement, raises two presumptions. The first is that there was money paid and the second is that it was a loan. And in the context of what we were all accustomed to seeing in the marketplace and what we were all taught in law school this is reasonable and almost unassailable presumption. Almost. It is still presumption which means that theoretically at least it is subject to rebuttal.
All presumptions fail if the court finds that the source of documents used as the basis for the presumption of particular facts come from a source that is suspicious or not credible. The fact that documents come from an interested party does not in and of itself result in the failure of a presumption if the documents are otherwise deemed to be trustworthy.
So on what basis could a homeowner claim there was no loan or even deny that a loan of money was made? The fact that the homeowner believes that in the refinancing no money actually exchanged hands is clearly insufficient to challenge anything. So is there anything to this?
Well to begin with the homeowner actually has no idea what happend at the “loan closing.” But one thing we know for sure is that no loan closing involves any money until after the closing. The documents are signed in the expectation of consideration not upon the receipt of consideration. And since the homeowner is not party to anything that happens after closing, the homeowner is without knowledge as to whether there was money paid, and if so, to whom or why. So his proper response to any implied or actual representation or allegation of a payment of money is that he is without knowledge and accordingly denies same and demands strict proof thereof.
This should probably be added to the Answer wherever it is possible to do so such as “Defendant denies knowledge and accordingly denies the implied allegation that money was paid and demand strict proof thereof.”
This procedurally puts the matter in issue although not plausibly in the eyes of any judge. Thus the door is open for discovery as to payment contemporaneous with closing, by whom to whom and in what amount. Proof of payment will reveal in nearly all cases that the money came by wire transfer from an intermediary for an investment bank and not from any account owned or controlled by the named originator.
Based on that fact the homeowner could establish that there was no consideration between the homeowner and the originator — unless the originator could establish that it was operating as agent for the investment bank.
The problem of course is that nobody has ever received an answer to that demand in discovery.  So you need to get an order compelling an answer and then sanctions for failure to comply and then an order in limine preventing the foreclosure mill from introducing any evidence to the effect that value was paid by the originator. You are certainly entitled to an inference, if not a presumption, that no value was paid.
And at trial, if there was one, failure to object based upon lack of foundation would be fatal to the homeowner who would have given up his hard won gains in one swift fell swoop.
Assuming money was paid by someone, next is the issue of whether it was a loan. This seems obvious so it is a steep climb to get a judge to think otherwise. But let’s look at this.
The documentation was presented as a loan but was that presentation a disguise for another different transaction that the homeowner knew nothing about? Who were the parties to that transaction? What was the nature of the transaction? What were the terms of the transaction?
The only way you can bring this into an issue of fact is by denying (not denying knowledge) the implied allegation that the execution of the note and mortgage was part of a loan transaction. You’ll need an affidavit that says it was something else. That puts the matter in issue and then subject to discovery as stated above but the judge is going to be highly skeptical of what appears to be a slam dunk.
So it is better practice to not only deny the implied allegation but affirmative assert (affirmative defense) that it was a disguised transaction (violating TILA disclosure, RESPA and alter FDCPA) in which the homeowner’s signature, name, reputation and property were used in a plan that was entirely devoted to selling securities such that the end result was that nobody was holding an asset receivable reflecting the principal or interest due on the alleged “loan.”
In short the risk of loss was eliminated and nobody suffers financial injury from nonpayment. In fact, all parties on the back end were paid and are getting paid. Again that puts the theory in issue and opens the discovery door which terrifies the banks even though most foreclosure mills are not knowledgeable enough to recognize the danger of such a defense.
To spice things up, the homeowner should allege that had proper disclosure been made he would have a choice of potential counterparties to such a securities issuer agreement and then bargained (quantum meruit) for more compensation than the mere receipt of a sum of money that had to be repaid. And in fact there is actual evidence out there that this is exactly what is happening — with the offers of payment of closing costs, no interest for 6 months, etc. The homeowner simply doesn’t know why such offers are being made.
And to further spice things up you seek damages in the affirmative defense for violations of all relevant statutes, including securities statutes because the securities issued included the note and mortgage which were converted into securities. Remember that the statute of limitations does not apply to affirmative defenses which are limited in recovery to the amount sought by the claimant, plus attorney fees. (recoupment)
Once again you will never get a response to discovery so you need to go through the process of compelling response,, sanctions motion in limine and objections in court. And you argue that you are entitled to an inference that the execution of the note and mortgage was merely a ruse for the commencement of a transaction that the homeowner (never refer to them as “borrower”) knew nothing about.
And so you arrive at the conclusion that the scheme was about the business of issuing of securities without which no payment would ever have occurred for any purpose by the parties who are supposedly involved in what they called a “loan” and which they want the court to treat as a “loan” even though nobody owns the debt because everyone has already been paid. Nobody who paid value ever received ownership of the debt, note or mortgage. And nobody who received  an instrument of conveyance ever paid value. It was all a ruse to create the appearance of a foreclosure when in fact they were seeking profit.
The homeowner is not getting a free house. The homeowner is getting what the investment bank deemed was “enough” to compensate the homeowner for his consent to the sale of his name, signature, reputation and home data. Maybe that compensation was enough and maybe it wasn’t.
But what we do know is that the homeowner never had a chance to bargain for anything different and that the investment banks and all players in the issuance and trading of securities and all players in foreclosure have generated revenue and net income far in excess of what they claim to be a loan and far greater than what they should have disclosed if in fact the execution of the note and mortgage was a loan closing.
Since they didn’t disclose it and they refused to be identified as lenders, they should not then be allowed to treat the transaction as a loan. Their failure to disclose was an admission that they were not lending money and that their business model did not require repayment from the homeowner. The foreclosure therefore is the continuing pursuit of profit rather than repayment of a debt, which is not owned by anyone as an asset receivable on any books of account. In short it is not a foreclosure nor even a proper cause of action — because there is no cause of action for loss of expected profit unless there is a contract expressly providing for it.
Neil F Garfield, 73, is a Florida licensed attorney. He has received multiple academic and achievement awards in business and law. He is a former investment banker. securities analyst, and financial analyst.


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19 Responses

  1. Ian — BINGO!!!!!!

  2. Bob G- think the main reason that attorneys aren’ t using this argument or any other argument, because they practice on a daily and weekly basis in front of the same judge and don’t want to upset the apple cart.

  3. Papergate – well written post, lots of hard hitting bullet points there. Well done.

  4. I keep telling you — prior loan never paid off BY YOU by any “contract.” Again – if you think otherwise – I have a bridge to sell.

    And, I don’t have this in front of anyone — don’t want to stress further the minds of Courts. Limited in comprehension. .

    But – Ian and Poppy — I had SPS too. It was a small second mortgage taken out in 1995. Started with Contimortgage – then went to Fairbanks (who then goes to SPS). .

    So, in 2002 — I pay that loan off along with first mortgage by a so-called “refinance.” NOT – I know today. First mortgage was supposed to go to Freddie Mac (I did not know at that time – found out a decade later Freddie did not get payoff). But the second mortgage I ignored until more recently. That was supposed to have been paid too.

    In 2007 — years after refinance. SPS starts credit reporting. I dispute it and it is then gone. But in 2016 — I start questioning the discharge. It was not right. Low and behold – SPS had all the records, and they obliged to send to me. What did those records say?

    They said – the loan was was paid “OUT” prior to receipt of payment by us. Well – of course I save everything. And I have the payoff request. And I have the cancelled check. Check stamped “RECEIVED” upon exact date demanded by payoff request. So I check SPS records sent to me — their amount “received” does not match our check. And there are fees – for YEARS after our payoff. Including “Balboa Insurance.” I always had insurance and provided proof. No flood insurance is required for me. But appeared to me for – flood insurance.

    Well low and behold — they file a new assignment in the County in 2016 — years after payoff. And a new discharge. Nothing matches. They name M&T Bank as trustee. I call M&T bank — they know nothing.

    Again — have too many problems with first mortgage — can’t confuse the heads in court with more “stuff.” It would be too much for them.

    So — I ignore. But just saying. That is the way it goes.

    No one can tell me different.

    Dottie – “I lived it.” Thank you Pee Wee.

    I love my own entertainment. LOL (too much isolation)

  5. And Papergate, you make a good point. Storm, got any new cases, we can work with? We “are” listening…

  6. Thanks, Ian…look forward to it.

  7. “. . .[T]he contract is consummated so long as a lender is identified, even if it is not the ultimate funding source.);”

    This is at the crux of most of these cases – the ‘lender’ did not legally exist, did not have the legal capacity to enter, bind or ‘consummate’ a ‘contract’ with a person – if the recited ‘lender’ had no legal capacity to bind a contract – no contract was formed and no legal disclosures of the ‘bona fide’ – who in these cases has the legal authority or standing to cancel and return an original note and release a ‘mortgage’ contract if there was no legitimate ‘loan’ or lender/borrower transaction – in this case, payoff was attempted 3 weeks after ‘closing’ but the “lender” never came forward to take payoff or provide payoff statements – because the ‘lender’ never existed and knew it could not ‘accept’ payoff and lawfully ‘wind down’ a ‘mortgage – ‘loan’ transaction – because the ‘silent’ undisclosed party(ies) never had the legal authority or standing to execute or lawfully wind down an enforceable ‘contract’ much less an unenforceable one – had these parties simply disclosed the TRUTH AND ACCURACY of these transactions which were not bona fide ‘loans’ – perhaps 90% of the decade of stolen homes, losses to both homeowners and legitimate ‘investors’ could have been averted. How many cases, like mine, where I was paying off in a matter of days – but had no one because the concealed consortium of private hedge fund investors – were never disclosed to be contacted about paying off – and worse – our own government was ‘guaranteeing’ these transactions which had they been (Fannie, Freddie) disclosed along with legit ‘account’ numbers that could be traced back to the source – they whoever ‘they’ were would have been paid off in full – they did not disclose themselves to conceal their transactions – and ultra vires conduct – they knew they were not in a lawfully enforceable or binding ‘contract’ with homeowners but more money was to be made and quickly via MBS securitization – they didn’t want the paltry ‘purchase’ amount – they wanted the entire enchilada – to be able to sell, trade, slice, dice, etc. in nanoseconds without anyone’s knowledge or legal consent – thus they had to destroy millions of American lives to keep their ‘secret’ unlawful conduct concealed – most lawyers and judges don’t understand the gravamen of these situations – much less average folk – these ‘investors’ were paid off in full in 2008 (in this case) by filing false claims of ‘losses’ when they knew they had never been disclosed or known of and how would homeowners know who they were or that the actually had the protections of the United States Government – the people’s government and ‘backup’ and federal protections – cases like this are not related because the ‘lender’ did not exist which is why you never see the lender’s signature on any mortgage – but you see the US Government – Fannie Mae – falsehoods – making Americans believe they were in safe, good hands – when they were food for the financial terrorists and our government did nothing but cover their own asses – now we are being screwed over again – Mnuchin is allowing ‘debt’ collection action to prey upon the measly $1200 – wake up folks – BTW – Storm has provided this same case over and over again – its all he’s got . . . not apropos to most of our cases. Give us something we can actually work with Storm quit peddling the same case over and over again –

  8. Poppy I’ll forward something to you through the other group later today. Regarding SPS which you may or may not be aware of.

  9. Storm sent me these: don’t know if any of this helps anyone…he’s blocked me, I think, getting no response from him?

    SOTANSKI V. HSBC BANK USA, NATL ASSN, No. 15-CV-01489-LHK, 2015 WL 4760506, at *6 (N.D. Cal. Aug. 12, 2015) (The use of a third party lender to fund a loan does not preclude the consummation of a valid contract between the named lender and the borrower.) (collecting cases and concluding that a lenders use of a third party lender does not preclude contract formation), affd sub nom.); SILAS V. ARGENT MORTG. CO., 2017 U.S. Dist. LEXIS 115324, *30 (E.D. Cal. July 24, 2017) (the use of a third party lender to fund a loan does not preclude the consummation of a valid contract between the named lender and the borrower); MARQUEZ V. SELECT PORTFOLIO SERVICING, INC., 2017 U.S. Dist. LEXIS 38239, *7-*8 (N.D. Cal. Mar. 16, 2017) [C]courts that have considered arguments identical to Plaintiff” that a borrowers mortgage loan documents allegedly fail to identify the borrowers `true lender and therefore, pursuant to Jackson, the mortgage loan was never consummated” have unanimously rejected it.); GHALEHTAK V. FNBN I, LLC, 2016 U.S. Dist. LEXIS 61347, *10 (N.D. Cal. May 6, 2016) ([T]he contract is consummated so long as a lender is identified, even if it is not the ultimate funding source.); MOHANNA V. BANK OF AM., N.A., 2016 U.S. Dist. LEXIS 58291, *14 (N.D. Cal. May 2, 2016) ([D]istrict courts have unanimously found that a lenders use of an undisclosed third party to complete a secured transaction is insufficient to preclude consummation under TILA.); MAJOR V. IMORTGAGE.COM, INC., 2016 U.S. Dist. LEXIS 15225, *7 (C.D. Cal. Feb. 8, 2016) (dismissing TILA claim despite plaintiffs argument that because the true `source of the funds has yet to be identified and revealed to plaintiff . . . Plaintiffs loan transaction has not been consummated.); SOTANSKI V. HSBC BANK USA, NATL ASSN, 2015 U.S. Dist. LEXIS 106859, *17-*18 (N.D. Cal. Aug. 12, 2015); RAMOS V. U.S. BANK, 2012 U.S. Dist. LEXIS 131564 at *3 n.1 (S.D. Cal. Sept. 14, 2012) (dismissing TILA claim where a lender was plainly identified . . . and the loan was consummated regardless of how or by whom the lender was ultimately funded.).

  10. Yes, Ian…then Ocwen. [there was a brief movement to Carrington on behalf of NCMC, before SPS?]

  11. Poppy-
    Did you go from NC (credit Suisse ) to SPS (credit Suisse) by any chance?

  12. Need to come together — I do not understand why not.

    Fraud massive, by however you slice it.

  13. Yeah Storm, you know everything that’s wrong, but not what’s right with anything. And you never hesitate to let the world know, how stupid you think we are.

    Capitalizing on people’s despair and suffering is not attractive. If you have information that can help, why wouldn’t you? Everything in this country is about “money”…no sense of decency and kindness.

  14. I can say, consideration was paid at closing in the form of a down payment, origination fees, closing costs, etc…I have never in all the years of court hearings seen a receipt for the true sale of a note to anyone…an assignment-transfer is used.

    My HUD statement says RBC was the lender, Wiring instructions say “Duetsche Bank”, Delaware Bankruptcy Court says a warehouse line of credit from Credit Suisse was lending New Century on my behalf and thy say Credit Suisse “seized” my loan due to a default, ..New Century claims to be “the lender”…the US Bank bought the loan, after a foreclosure, but rescinded the sale….pick one folks?

    Anyone with a molecule of logic would question who is whom, in my case. And in the beginning payments were not applied…putting the “alleged” loan in default.

    I fail to understand why certain strategies are necessary in some of these cases. The paperwork submitted by the parties before the court is “SO” flawed…it should not be considered evidence of anything, except perjury.

    Besides: if they want to come before the court as the REMIC Trust, prove to me, the judge, it was sold and pooled into this “so-called” trust attorney extraordinaire. Shouldn’t be my job, they are the claiming injury and their paperwork showings are flimsy at best!


  15. Yeah, Storm your own . . . what exactly do you get out of your ‘contribution’ – you provide no direct disputes or solid grounds – just adjectives – please spell out EXACTLY what is incorrect, mis-representative, lying or nonsense in this article – I would actually love to read your counter reply – if it is as you state then spell out exactly what you believe is false. Otherwise, we will never give you credence or respect – you keep showing up putting down but never putting up anything of use so stay the **** off this site until you do and prove otherwise – I’m not a Neil plant – never met the man but know of both you and him – so far he’s the only one still striving to do something; you’ve done shit.

    Seriously Storm, let’s hear your side of things otherwise shut up and go away.

  16. Papergate, exposing lies, misinformation and nonsense IS contributing!

  17. If you (Storm) think everything Neil writes is total crap – why do you persist on visiting this site? You have not been regarded by anyone in all these years as anything but someone peddling products or services – using this site for bait. I’ve not seen any cases you have been part of – since you are not an attorney – that prevailed either. Unless you can contribute to the plight of millions of Americans – stay off this site – or contribute. Neil’s contributions are intelligent, well thought out, genuine, and the best we have . . . don’t visit this site anymore unless you plan to help us. Otherwise you are just as much a financial terrorist as the opponents are.

  18. Bob G. there are no cases because its total nonsense!

  19. I would like to see one or two cases where these arguments actually worked. If they did, i would think that there would certainly be a lot more than one or two cases. All foreclosure defense lawyers would be using them, and foreclosure defense lawyers would be making money hand over fist, just like the foreclosure mills. In my opinion, it is precisely because these arguments don’t work that there is a foreclosure mill industry in the first place.

    Somebody please prove me wrong. I would love to be proven wrong.

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