How to Deal with Claims of Mortgage Selling and “Successors”

I received a question regarding Lehman along with information that the old Lehman crowd regrouped under the name of Matrix Private Capital Group in New York. Fuld is there and in any case involving Lehman engineered “loans” I would encourage the taking of his deposition.

The simple but counterintuitive answer is that Lehman wasn’t buying anything, but it did pay. It paid for the funding of the origination of loans.

Since the payment was already made, the originator did not have to be paid again in order to acquire the note and mortgage. Since the originator had never paid anything, it had nothing to sell.

So the originator never received any payment. 

Lehman was following the business plan that was invented at Goldman Sachs. The business plan was for the issuance of multiple levels of securities based upon the appearance of the creation of loan transactions and loan obligations. The trick of the plan was to do so without ever becoming a lender that was subject to federal and state lending laws regarding disclosure of compensation and profits.

So this is why all of the documents had to be fabricated after the origination of the illusion of a loan transaction without a creditor or lender. they had to create the appearance of a sale through documentation that was completely fabricated, false, and more often than not forged and backdated. but lawyers and judges all come from law schools in which their training is directed at the written instrument as though it was the Bible. 

In this case virtually all written instruments are part of a scam. 

This is part of the reason why the “boarding process” is completely false. The records, in most cases, of the payment history are solely in the care, custody, and control of central repositories like Black Knight who, like their investment bank bosses, remain out of sight. And the records of who receives payments made to the servicers are a closely guarded secret — something that is both illegal and extra-legal. Of course you’re entitled to that information since it shows clearly who is intended to receive payments on the homeowner obligation — i.e., the so-called creditor.

Whose Lien is it Anyway? Neil F Garfield, published by GTC Honors, Inc. f/k/a General Transfer Corporation (2008)


So if you really want to manage your expectations regarding these issues, the first thing you need to do is stop believing anything you read in the documents that are prepared by or on behalf of the investment Banks. —- And you need to get comfortable with ambiguity — yes you have an obligation but no you don’t have and probably never did have a lender.

The only legal way to enforce the obligation is for some party to step up and say they paid for the obligation and that they therefore own the debt, note and mortgage. But for anyone to do so they would be asserting an interest adverse to those of investors who think that they “own” the loans without any of the responsibilities that go along with ownership of loans or their administration. So the only thing for them to do legally is seek to reform the instruments to allow for designation of a creditor even when there is none.

The law firms representing the investment banks have long understood that taking the legal route would diminish the profitability of securitization schemes since it would necessarily result in the disclosure of all manner of profits from the scheme.

So they went the illegal route with great success. It worked because they managed to get everyone focussed on the “benefit” received by homeowners and the “windfall” they would receive if the home were not foreclosed.

Here is what they don’t want anyone to seriously consider: that the payment to the homeowner or on his/her behalf was just that — payment, not a loan. And the consideration for the payment was the issuance of a note and mortgage without which there could be no securitization. Further consideration was the grant of authority to resell private loan data.

Under normal legal analysis this results in a failure of consideration because the payment was illusory. At the same time as the homeowner receives it he issues the note and mortgage in which it is pledged out again.

But the securitizations scheme went forward anyway which is why the homeowner is entitled to receive payment in quantum meruit either as a direct claim or as a defense (affirmative defense) for set off or claim of disgorgement.

This is entirely dependent upon two things — (1) the amount of money generated as revenue that can be allocated to the origination of the homeowner transaction and (2) the reasonable amount of money, in a free market economy, that would normally be paid to a person for playing the critical role in allowing the securitization scheme to proceed.

A review of such cases shows that the percentage of compensation due to homeowners is between 5% and 15% of the revenue generated. In a typical securitization scheme the amount of revenue is on average $12 for each $1 of the homeowner transaction. So that translates to the homeowner being entitled in quantum meruit to between $0.60 and $1.80 for each $1 of the nominal amount of the homeowner transaction. So the bottom line is that the homeowner owes the $1 in quantum meruit but is also owed between $0.60 and $1.80 PLUS interest.

And that is the rest of the story. I dare anyone from the financial community to say I am wrong. That is anyone who has a license at risk and who can produce contrary data proving that this calculation is incorrect.

*Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.*

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4 Responses

  1. I think 15-20% royalties as adopted in oil and gas industry should be a fair price, specially considering all the risks and nerves for the data owners and associated long-term losses and damages to the economy such as endless bailouts to criminals taken from the same defrauded homeowners.

    American housing and stock market is a biggest crime zone ever existed.

    Ownership of a home was turned by banks into a myth.

    Nobody in USA have clear Title to their property unless paid cash to the original owner who purchased before 1999.

    And the biggest preys are new “home buyers” who purchased illegal foreclosures since they were scammed twice – first when they bought stolen property, second when their “homes” were stolen from them again at the time of signing the Note.

    And the only party who “does not know it ” is the Government and more important – judiciary – who propelled this crime above the sky.

    Judges could easily stop it back in 2011 f they followed Cease and Desist Orders but they were instructed to act opposite – for “financial safety”.

    Banks addicted all Pension funds to huge refunds from derivatives and Judges supported addicts instead of sober them.

    Investors owe us liabilities, too since they make money based on OUR performance, so they have a duty to investigate how Pension Funds managers and banks allocate their money and where their returns on investment are coming from.

    If DEFAULTED debt (means a borrower does not pay) – can produce 9-50% “returns” – it means a scam.

  2. There was nothing to buy for “consideration” as there was no asset. All that was bought was collection rights – for pennies on dollar. Reinstated “default debt” – before anyone defaulted. You could have also assumed “prior owner” recorded default without knowing. Just recycled recorded default debt – without notice to YOU. .So could search for consideration and won’t find it. But then — ASK WHY??? .

    Yes Java.

  3. Neil, I was asked recently, what happens if a homeowner owns an interest in the sec. trust – as a beneficiary? Of course they would have standing to sue, but what of the dual role…do you see any issues or defenses or claims they could raise.

  4. Yes. The homeowners are owed $1.50. Their signatures.

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