ALERT! Migrating from fake notes to eNotes: If consumers don’t stop this they will be without any defense to any abusive practice and any fake account started in their name

The banks have been securitizing data not debt. Now they are trying to make data the substitute for the real thing. In other words, screw the investors, screw the consumers, screw the government and the banks take everything.

It’s not securitization that is evil. It is a handful of bankers who are lying to us about securitization. There is a factual and legal difference between securitization of loans and securitization of information about loans. The acceptance of eNOTES or any digitized version of important legal documents is an invitation to disaster. This will make 2008 nostalgic for us.

We are the stage of final approval — allowing eNotes to be used instead of real notes. There are no protections for consumers and the practice of passing off securitization of data will be institutionalized as meaning the same thing as securitization of debt. The biggest ripoff in human history will be signed, sealed and delivered. Both investors, as a class (i.e., pensioners) and homeowners as class will suffer for generations because of this.  

Write to the CFPB, your congressman and your Senators. Voice your objection to dropping paper documents. Your life depends upon it. 

They make it sound good — like the next step in human evolution. But what they are proposing is a completely open playing field for only the banks — leaving consumers back in the dark ages.

see https://www.ginniemae.gov/Summit/Documents/June_13_11_15am_Digital_Collateral_Industry_Workgroup.pdf

This is basically institutionalizing moral hazard. For two decades the banks have gotten away with using images of notes that have been destroyed. The issue is the same as digitized voting. if you don’t have the physical document to backup the data, you are left with a cyber world in which anyone with access can change reality.

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I have no objection to the use of images of notes or mortgages or deeds of trust as long as the physical document exists and can be accessed upon demand.  but I have plenty of objections to the use of digitized versions of important legal documents unless they are adequately protected by the government in transparent practices.
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The whole reason we have public records is to prevent what the banks are now trying to do. If this goes through, public records will no longer exist. they will consist of digitized data from parties who have paid their way into being considered trustworthy. the average consumer doesn’t stand a chance in that environment.
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In a nutshell here is the problem: Wall Street has been fraudulently presenting securitization of data as though they were securitizing loans and debts. that never happened, which is why all of the documents from REMIC transactions are false, fiction, fabricated, forged and backdated.
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If they had securitized your “loan”, the language included in the note and mortgage would be sufficient, to wit: you would have consented to the resale of your loan and that the successor who purchased it would have the same rights to administer, collect and enforce as the original lender. That is what you signed up for and that, coupled with the fact that our economy runs on securitization of assets to diversify risk, is what makes securitization legal, necessary, proper and just.
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But they didn’t securitize your loan or anyone else’s loan because from their end there was no loan. From their end they made sure you received money and that money was used an incentive to issue the note and mortgage. But nobody purchased the note and mortgage. In most cases nobody ever purchased it even at origination. Although they told you the name of a party who was defined as “Lender” that party had no money, access to money nor any right to any money flowing into or out of the homeowner transaction.
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That is why the notes were destroyed — probably 95% of them. To you that is like shredding currency. But to them, their plan required them to keep all revenue generated by their scheme — not just some of it. So they needed to substitute data for documents. Every scanned image is data. And those images can be copied indefinitely. But you can only have one signed original note. The banks are tired of being restricted to selling your loan once, so they developed a plan to sell the data from your loan dozens of times.
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The analogy is the atom. In the legal world you can only sell the atom once. But wall Street figured out a way around that.
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They sell information about (i.e., data) the protons, electrons and nucleus along with a variety of other behavioral characteristics of those physical elements but they never say they are selling the atom — even though their collective sales of information about the everything composing the atom is equal to dozens of times the price of the atom.
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By using this fictional strategy they can say they never sold or bought the atom and therefore any liability arising from purchasing or selling the atom doesn’t attach to them.
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Does that mean no securitization ever occurred? NO! But it does mean that what everyone thinks has been securitized is still sitting there untouched. They securitized data not debt.
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That means that your loan, like that atom, has never moved and was not in fact a loan and there is no loan agreement because nobody agreed to become your lender.
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You signed papers where YOU agreed to designate a party as a lender but nobody at any stage of the process they labelled as “lending” ever signed anything that said “I am your lender. I own your obligation. I paid for it. You owe me the money.” You might think or assume that happened but it never did. 
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So far the investment banks have been pretending to be lenders when they are not and they would fight to the death if you sued them as lenders. Their defense would be that they are not lenders and as proof they would swear they have no interest in your loan. And they would be right.
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They made a ton of money selling information about your loan in the form of derivatives, hedge contracts, insurance contracts etc. On average they made $12 from every $1 they gave you. But they never paid you one penny for your role in their scheme of securitizing data. Whatever money you received they lured you into promising to pay it — but little did you know that you would paying companies with financial interest in your transaction which you mistakenly think is a loan. YOUR LOAN HAS NOT BEEN SOLD BECAUSE THERE IS NO LOAN.
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They did this by converting from public records to digital private records which means that management of any given company can claim anything and nobody is the wiser unless someone does an audit and understands what they’re looking at. By directing everyone’s attention to images they are directing everyone to data instead of documents.
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There is nothing legal about what the vienstmetn banks did to investors and nothing legal about what they’re doing to homeowners. But they have convinced most judges, regulators, lawyers and consumers that their practices, while not exemplary, are merely an accurate presentation of the truth and so the deficiencies occur without harm to the system or to investors or homeowners. Nothing could be further from the truth.
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In a nutshell investors were harmed because they unknowingly bought into some highly risky unsecured junk bonds and then signed away their right to do anything about it.
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In a nutshell homeowners were harmed because instead of getting the protections of the truth in lending Act and other federal and state statutes they were left hanging in the wind, with a fake loan agreement in which the players on the other side had no stake or incentive to make the transaction successful. In fact the loan agreement failed to deliver a lender. Quite the opposite they knew the transaction was toxic and they bet on it and the worse the odds the more money they made.
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So instead of physically committing the crimes of forgery, perjury, uttering a false instrument, recording a false instrument and mail fraud, now they seek to avoid all of that by forcing and seducing us into thinking that digitally records are enough, digital signing is enough and that digital contracts and promissory notes are enough. And anytime they want, they access those documents and alter them for other purposes temporarily or permanently in order to produce the highest possible revenue and profit.
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It’s now or never folks. If they get away with this one, you can kiss every consumer protection you have goodbye.
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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. On Wall Street in NYC, he was director of investment banking at Garfield and Company, member of the NYSE, AMEX, Chicago Mercantile and 4 other exchange associations. 
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5 Responses

  1. Thinking about this whole thing- Neil has always stated that the profits were 12x the face value of the notes. 1/12 is about 8%, which is the Tier1 capital requirement for banks. Laundering drug cartel cash nets a 20% fee (HSBC was a major laundry).
    So what if the bamks took the cash, gave the cartels some extra decimal points on their checking statements, and then convinced the cartels that MBS were great investments ?
    Just mulling things over here with speculation and conjecture, and extrapolating it all forward.
    Anyone have any thoughts on this? Thanks-

  2. Summer — you are correct. However, too many people do not write to whom they should. They concentrate on their case (which if fine), but if you want better chances for your case – get involved. There are not enough letters.

    Another big new issue is sub-servicers – who have no authority, and no liability. Yet they show up in court, and credit report under their own name. Know who you are dealing with. Liability will be tossed if a sub-servicer is named. CFPB policy does not address sub-servicers. Sub-servicrs are ministerial, have no authority, and no liability.

    Now, I know what Neil will say, — if there is no trust/trustee – there is no servicer. But paper is what it is. And whoever they are, the fault does not lye with the hired help.

    Easy to file with CFPB to tell your story —

    help.consumerfinance.gov/tell-your-story

    Thank you. We may going into very different times due to Covid. Do not give up.

  3. This digital scam exists for about last 7-10 years or more, now they want to make it more advance.

    I think its too late to change anything. Its done. Banks will push their fraud while they know that Titanic already hit the iceberg. Music is still playing – but only few will survive.

    American people are all victims of the biggest genocide and slavery ever existed in the World.

    And we have nowhere to go for protection. Banks are exempt from all laws; judges are willing to cover for any fraud; and nobody from the present Government will do anything except promoting and protecting Banks crimes as they do last 20 years – and get away from any liabilities.

    I write CFPB and Senators almost every day since 2012. Zero respond.

    While the same people hold the power- nothing will change.

    And when new people will get into the the offices – it could be too late for the Country.

    Frankly, I don’t know how the Government plan to pretend that 20 years of controlled demolition of America did not exist; that Deed recorders offices are full with forged Deed for stolen properties where new “owners” have the same fake “loans” without any property right.

    I thing until INVESTORS will stop play this game and start to demand proof of real securitization – all crimes will continue for the “sake of investors and customers”

    Until Judges will confront this fraud – which they have no intention to do.

    Until the Government will realize that Titanic can take their families down , too – but music is still playing.

    Even now, with over 40 millions unemployed, nearly homeless and without hope -Banks and the Government claim almost “blooming” economy, specially housing and stock market

  4. Last step in the cover up. Local officials and agencies of every state and both parties have no excuse to go along with this criminal scheme.

  5. Thank you Neil for this. Everyone should contact CFPB and Congressmen/Senators. If will allow anyone to say they have authoritative possession of the “note.”

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