Your objective is simple: to reveal that the party named as plaintiff or claimant is not the owner of the debt. Your secondary objective, not necessarily required, is to prove that the named claimant doesn’t have the authority to represent anyone who does own your debt. On your way to doing that you will probably undermine any claim of authority from the self-appointed servicer.
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Under the laws of all states that adopted Article 9 §203 of the Uniform Commercial Code (all 50 states) a condition precedent to enforcement of the mortgage is that the claimant must have paid value for the debt. Such payment is often presumed from the apparent facial validity of (a) the original loan documentation and (b) transfer and apparent delivery of the promissory note and mortgage or deed of trust.
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It is easy to get confused on this point. The fact that someone has paid value does not mean that they paid value for the debt. In order for a sale of the debt to take place, the payment of value is only one part of it. The payment of value must be to the owner of the debt. The banks take advantage of the fact that nobody has thought this through completely.
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They create paperwork making it look like the debt has been sold. In actuality in most cases no value was paid. But even where there was some consideration paid to somebody, it wasn’t paid to anyone who owned your debt and who could claim financial injury resulting from your action or inaction (nonpayment).
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It was paid to some intermediary who claimed to be representing someone who also didn’t own the debt. So you have value paid but not in exchange for a legal conveyance of ownership of your debt. Collection by such a party represents pure profit — not restitution for an unpaid debt.
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Your objective is simple: to reveal that the party named as plaintiff or claimant is not the owner of the debt. Your secondary objective, not necessarily required, is to prove that the named claimant doesn’t have the authority to represent anyone who does own your debt. On your way to doing that you will probably undermine any claim of authority from the self-appointed servicer.
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The path of the money trail is very convoluted and you do not need to track it. But by assuming certain deficiencies in the position of your opposition you can demand discovery on precisely those things that they can’t answer and which are entirely relevant and essential to their claim, to wit: the ownership, agency and authority over the loan. Foremost amongst those questions are those relating to any transaction in the real world in which money exchanged hands in exchange for ownership of the debt. I am virtually certain that you won’t find any.
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BUT such payment and ownership is often presumed from the apparent facial validity of (a) the original loan documentation and (b) transfer and apparent delivery of the promissory note and mortgage or deed of trust. You must rebut that presumption.
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My interpretation of all that, based upon case decisions, applicable statutes, rules and regulations is that the following must be true in order for a foreclosure to be a valid exercise of legal rights that belong to a creditor:
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The foreclosure is initiated on behalf of a creditor — i.e., one who has paid value for the debt in exchange for legal ownership of the debt.
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The forced sale of the property will result in a paydown of a legal debt owed to a disclosed creditor.
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If a servicer is involved their authority to collect, process or enforce the debt must have come from the creditor who paid value for the debt in exchange for legal ownership of the debt.
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Proper notice and demand for the correct amount due must have been delivered on behalf of the creditor and received by the borrower.
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The creditor must be sufficiently identified so as to comply with ordinary rules and practices governing the requirements of legal pleading.
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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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Filed under: foreclosure |
As Neil correctly pointed out – here is NO owner of the debt for a simple reason – here was no Lender at the first place.
What Banks did during last 20 years – they used pools of money collected from Investors to provide lines of credits to smaller intermediaries such as Countrywide, Fremont, New Century and other self-proclaimed “Lenders” (without funds)
These sham conduits passed funds to a homebuyer acting as “independent Lenders” – while most likely none of them even touched any money at all. I highly suspect that purchases were funded via one of Fidelity National sham companies.
Since 2015 Fidelity National dba Black Knight Inc. and ServiceLink are the main money transfer points.
Black Knight (FNF) received giant lines of credits from Big Banks to use them as a funding source for homebuyers who think they are dealing with some smaller mortgage companies.
Most transfers (called “sales”) of borrowers information regarding loans to various “Servicers” – also facilitated either by Black Knight or ServiceLink.
Documents for foreclosures (initiated by BK/SL) are likely forged by the same DocX (not Lorraine Brown DocX, but FNF/ Todd Johnson’s DocX) The reason why they keep the same company in the same business – nobody would think DocX still exists.
Of course nobody paid value for the debt since here were no owners of the debt to sell it at the first place.