Livinglies's Weblog

Take ten steps back from the transaction with homeowners and you can see all the reasons why the documents need to be fabricated. You can also see how there should never have been a single foreclosure of any mortgage or deed of trust involving a transaction that was part of a securitization scheme.

And if you think about it you’ll realize that none of this is about a loan. It’s all about a contrived and concealed purchase of intangible rights of the homeowner by an institution who is only pursuing a plan of securitization, which means the issuance and trading of securities for profit.

So before you start saying that the homeowner owes somebody money, take a closer look at whether somebody (i.e, an investment bank) owes the homeowner money.

And before you start talking about a “free house” maybe address the real question: did the homeowner get adequately compensated for assuming the risk of inflated appraisals, bad terms and forced participation in a securitization scheme designed to cheat investors, homeowners and the government.

Do you really want to reward behavior that most people understand was wrong, not just risky?

So consider the following carefully, because I am quite certain that legal discovery in hundreds of cases over two decades has already corroborated every “theoretical” component of my current description of the true relationship between homeowners and “lenders” and their “successors.”

And if you master these concepts you too should be able to reveal the truth, to wit: that there is no company represented by the foreclosure mill who owns your obligation or even claims to own it. But they still want title to your house.

SPOILER ALERT: IT WAS ALWAYS THE INVESTMENT BANK.

1. Contractual intent:
   1. Homeowner
      1. He/she wanted a loan and that is what he/she thought he received.
      2. He/she was unaware of any larger transaction triggered by his/her signature.
      3. Having signed the documents that originated the disclosed transaction, under judicial doctrine, presumably constitutes a loan agreement. So the transaction was presumptively a loan of money that needed to be repaid upon the terms set forth in the note.
      4. Incorporated into the loan agreement as a matter of law are certain disclosure requirements (TILA, RESPA) as to the identity, nature and compensation of everyone who received any compensation of any kind arising from the origination of the loan including appraisers, real estate brokers, mortgage brokers etc.
      5. In table funded loans the loan agreement is considered intact even if the lender was in fact not the originator. But table funded loans are against public policy because they deprive the borrower of choice.
      6. Material information was withheld from Homeowner:
         1. No person or entity involved in the creation, approval, underwriting, or terms of the transaction had or was intended to have any risk of loss;
         2. Every person involved in the transaction was being paid premium fees, bonuses, commissions, and/or profits to participate in the transaction on terms and conditions established and enforced by an undisclosed investment bank.
         3. The prime mover in the transaction was an investment bank running a securitizations cheme, the existence of which was concealed and unknown to Hollinsworth.
         4. At the conclusion of the total single transaction (see below) the investment bank had incentives to
            1. Make certain that loans would fail in order to collect on insurance and hedge products
            2. make certain that certificate series would fail in order to collect on the issuance of other “derivatives” and collect on hedge contracts and insurance policies based upon “event failure” in which the investment bank, never any third party investor, would be paid. Each event failure was declared in the sole discretion of the investment bank and was not subject to review or any test of reasonability by the express terms of the contracts.
            3. Force property into foreclosure even though alternatives would have protected the collateral on each transactions and on the housing market as a whole. This created a rubber stamp on the legality of the securitization scheme.
            4. Divest itself from any role as “lender” in the transaction with the homeowner and any retained ownership of homeowner obligations to avoid liability for violations of lending laws, fair dealing and consumer protection.
            5. Hire companies, for a fee, to falsely present themselves as “lenders” in order to commence a false paper trail of apparently facially valid documents that never reflected the economic realities of any transaction.
         5. In order for the self-created investment bank incentives to work, homeowners would need to be
            1. 1. tricked into believing the property was worth more than it was (inflated appraisals),
               2. they would need to believe that a lender was underwriting the “loan transaction” with a stake in the success of the loan when in fact the reverse was true, and
               3. they would need to believe that the Loan transaction” was the only business event in connection with the origination of the homeowner’s transaction with a “lender.”
               4. And the homeowner must not know that the investment bank was enjoying revenue from a tier 2 yield spread premium based upon money invested by third parties into the purchase of certificates, and substantial fees and trading profits from the creation and trading of unregulated securities, as well as relabelling and recategorization of book assets created from the investment bank’s funding of the homeowner transaction. 

               5. And most of all neither the homeowner nor any lawyer or court can know that there is no legal person, company, or business entity that maintains any books and records or reports showing that a transaction occurred wherein any specific loan or any group of loans was the subject of a purchase for valuable consideration in exchange for the ownership of any underlying homeowner obligation (debt), note or mortgage or deed of trust.

               6. The goal was to create the appearance of facially valid “loan” documents and transfers when no such transfer had legally occurred.
                  1. Even the origination documents were in most cases legal nullities because they were not executed in favor of anyone who had actually loaned them money.
                  2. Foreclosures were useful in two ways in the securitization scheme
                     1. by leveraging legal presumptions from what appeared to be facially valid documents foreclosure process effectively created a conclusive presumption that the securitization scheme was true and legal even though there was no creditor retaining any ownership interest in the underlying obligation or debt and
                     2. the investment bank and all the foreclosure players in the securitization scheme would be paid vast sums of money as revenue without any need or obligation to pay anyone (i.e., investors) who had paid value because the investors had not paid for anything other than an unsecured promise from the investment bank which did business under the fictitious name of a trust.
            2. The homeowner is not meant to know and every effort is made to conceal the fact that most of the securitization players had no interest or stake in the success or failure of the homeowner transaction and the investment bank had only the incentive of failure of the transactions that were carefully grouped into tranches that would declared by the investment bank as having failed because the worst of the loans would fail causing an “event failure” that would cause outsize payments to the investment banks to reward them for being correct on their bet, not to cover any loss sustained.

      7. Contractual Intent: Investment bank would never have made any loan but for the concealed securitization scheme. Without sales of certificates the investment banks had no interest in any business plan based upon profits from residential lending.

         1. The named originator would not have made any loan because it had no money to make the loan and because it had no interest in any business plan based upon the receipt of principal and interest.
         2. The contractual intent of the investment bank was to secure the signature of the homeowner for the sole purpose of triggering issuance and trading of unregulated securities (“securitization”) in a closely controlled market.
         3. The concealed contractual intent of the investment bank was to retain no residual interest, liability or obligation in connection with the existence, administration, collection, servicing or enforcement of any homeowner obligation created by the transaction origination documents.
         4. The issuance, sale and trading of unregulated securities were conditions precedent and conditions subsequent to the payment of any money to any homeowner including the subject homeowner.
         5. The payment to the homeowner was never intended by the investment bank as a loan and after the conclusion of the entire transaction — involving the homeowner’s signature, name, reputation and property — there was no loan on the books of any company (i.e. there was no asset receivable either specific or generic that included the subject homeowner transaction.
      8. Contractual intent: there was no meeting of the minds because the investment bank and all of its intermediaries and conduits concealed the totality of the transaction from the homeowner, who was paid for his signature in order to trigger enormous profits greatly exceeding the entire homeowner transaction. 

      9. Since there was a failure of mutual contractual intent, and the failure was caused by circumvention of lender regulations and laws, the contract must be construed under quasi contract doctrine or quantum meruit. The homeowner was never given an opportunity to assess the transaction  in the light of the enormous undisclosed profits and in the light of investment bank being the actual prime actor.

      10. The securitization scheme generated enormous revenues such that convicted felons and food delivery people with no knowledge of the financial products — other than a script provided to them by the investment banks bank through intermediaries — were hired to sell these defective financial products and earn hundreds of thousands of dollars per year — JUST ONE example where adding payment of compensation, cost of advertising, fees, expenses, and other third party payments resulted in costs and expenses so high that if the transaction were actually a loan nobody could possibly have been paid the entire principal obligation nor would the interest have resulted in any profit. 

      11. Moral of the story: The profit they were seeking didn’t come from what they had falsely labelled as a loan. And if it came from something else, that wasn’t disclosed to the homeowner. And that means the homeowner was tricked into a contract that he/she knew nothing about.

      12. So the real question is what was in the real contract — the one that included securitization and how much benefit did each side get from this contract. It is only a secondary question that involves the issue of how can anyone foreclose on an obligation (debt) when there is literally nobody claiming to own it?

          1. Failure to conduct discovery and enforce discovery together with failure to make timely and proper objections in court is the reason why false documents are admitted into evidence. It is not up to a judge to teach you the rules of evidence. If you go to court you are required to already know them.

          2. Note that nobody says they own the debt in these situations. Nor do they say that they have suffered financial injury.
          3. In a classic head fake the foreclosure mills are alleging duty and breach of duty by the homeowner but they make no allegation that anyone was financially injured.
          4. The counterintuitive answer to this phenomenon is that nobody did suffer any economic loss resulting from any action or inaction of the homeowner. Securitization takes care of everyone without payment from homeowners.
          5. Foreclosure is not necessary but it is profitable.

          6. Payment histories are admitted into evidence without any foundation testimony or business records that could show they represent the business records of the owner of the obligation because there is no owner of the obligation. Such business records would show, as per GAAP, the existence of the alleged obligation as an asset and reductions of that asset to offset payments received. No such records exist because no such entity exists.

      13. The total single transaction was therefore only a securitization contract in which the homeowner was lured into playing an indispensable role in exchange for a payment that the homeowner pledged to return with interest. This may amount to failure of consideration that would void the contract altogether but that would leave the homeowner without any adequate compensation for a scheme that produced geometric profits to the investment bank and all the securitization players which they retain to this day.

      14. Since the homeowner and investment bank cannot be reasonably be returned to their positions before the origination of the concealed total contract, it is therefore up to the court to fashion a remedy in equity in which a reasonable amount of compensation to the homeowner is calculated and set off against the presumed homeowner obligation.

      15. In addition, since the foreclosure was part of the for-profit securitization scheme and not with any intent or purpose to compensate or provide restitution for any legally existing owner of any legally existing obligation owed to any of the foreclosure players, the court should award compensatory and punitive or exemplary damages for a scheme that not damaged the lives and property of the the subject property owners.
      16. The actors in this scheme should be punished in civil court based upon their culpability in the foreclosure part of the securitization scheme as part of a pattern of conduct in which thousands of other homeowners who have been victims of false claims of collection, administration, servicing and enforcement of money based upon direct, knowing misrepresentation of the ownership  and status of the homeowner transaction, and the title to their property has been unalterably slandered.

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