Livinglies's Weblog

No “almost” about it. The key to home prices — proven over the last 140 years (see Case Schiller index) , is median income. Median income is what determines home value. Home value cannot be manipulated. But home PRICES can be manipulated. The difference between the two is what causes booms and busts.

And the ability to confuse consumers into thinking that home value and home prices are the same is what enables market manipulation. In the past, the only major factor as a restricting force in the marketplace was the risk of loss to lenders. Wall Street eliminated that risk of loss and now uses servicers and foreclosure as a means to gain extra profit.

So it is not a matter of thinking that this is almost like they planned it. It is exactly the way they planned it.

PRACTICE HINT:

One seemingly innocuous question or discovery demand could address this issue. You could demand identification of the party who received the interest payments of the homeowner as interest income and/or as return of principal due.

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The point which everyone still has a hard time understanding is that there is no such party. That leaves the foreclosure mill trying to explain how a foreclosure is justified in favor of a party who is neither owner of the loan nor the legal representative of anyone who does own the “loan.”

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The issue presented elsewhere on this blog that there is no “loan” once the transaction is subject to claims of securitization does not need to be reached. But it should be implied in argument, since that is the best tool to fend off the free house myth. Arguing that we have no way of knowing the true nature of the transaction, who was involved and how they were making money. Just because we don’t know doesn’t and shouldn’t mean a negative inference for the homeowner. This argument opens the door to the possibility that while the “borrower” may be getting the house, it could only be a completely just and proper payment for securing intangible rights to resell the homeowner’s private data and engage in a widespread securities scheme involving issuance and trading of unregulated securities. The tactic here is to reframe the issue from a windfall for the homeowner to the possibility that the homeowner is being justly paid and not unjustly enriched. 

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You defend the discovery demand by simply saying that the defense narrative as set forth in the answer and affirmative defenses or the TRO complaint is that this claimant is not the party who is foreclosing even though it is named as the claimant and that the underlying debt is not owned by the claimant or anyone who is represented by the claimant.

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Maybe you get an affidavit from a CPA that says that if it is a loan and the debt represents the obligation in the loan then the interest paid by the borrower must be booked as interest income by the owner of the debt. Maybe the CPA would be willing to state categorically that if a party does not show interest income rom the loan when the interest payments were being made then it cannot be the owner of the “loan” debt.

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Note my careful use of words here. I know that there is no such party in existence. Nobody is reporting interest income as owner of the debt, but investors are reporting cash flow and revenue from their “investment” arising from certificates purchased from the investment banker.

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Under the slippery labels used in false claims of securitization of debt, some of the money paid to investors might be reported as interest income; but in no case is it actually interest income because the investors never purchased any share of any flow if interest or principal cash flow.

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And in tax cases it has been repeatedly been concluded that investors have no right, title or interest in any debt, note or mortgage nor any enforcement or collection rights or even the right to demand that the REMIC trustee exercise rights to demand repurchase of “bad loans.” The reason is simple. Neither the trustee (i.e., the trust) nor the investors owned any loans — even if they thought they did.  

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But remember this if nothing else. Don’t bother making discovery demands if you don’t have the intent, resources and motivation to enforce those demands. You will not get any meaningful response. You will always get obfuscation, objections and motions to strike. You must be prepared to persuade the judge that you are entitled to a proper direct answer to the question or direct response to the demand for production.

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That means a motion to compel, a hearing, and hopefully an order from the judge compelling the response. Still no response will be forthcoming. So that means a motion for sanctions — for violating civil procedure and a court order. Hopefully another court order. It also means taking advantage of the inability of your opposition to respond and to start persuading the judge that it is now YOU who are entitled to the presumption that they are not the creditor and that they are not an authorized representative of a creditor. That could mean a motion in limine to prevent them from introducing evidence to the contrary since they failed to produce or respond in discovery. And it means preserving your position by objections at trial that are both timely and properly framed.

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