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In a nutshell there is no valid lien. But in order to get to that conclusion you have to wade through the weeds and smoke screens that have been carefully constructed by the Wall Street Banks.
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The simple truth is that in most cases the origination of the homeowner transaction was table funded but it was not actually a loan.
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This means that the party with whom the homeowner thought they were dealing with was not a lender because a lender loans money and the investment bank that funded the transaction wanted no part of being a lender even though they were the one paying the money to the homeowner. In common practice and jurisprudence, this may be cause for a variety of defenses and claims, but it does not invalidate the entire transaction — even though it should.
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In the end, securitization results in no lender, no creditor and no loan account on the books of any legal person or entity. The problem that emerges for the Foreclosure Mills is that they must reconstruct, out of thin air, the debt that has already been retired through receipt of revenue from the securitization of data (information) about the loan and not the sale or securitization of the loan itself.
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The problem is that the loan account does not exist. it is not an asset owned by anyone. But in order to enforce the note and mortgage, they must create the illusion that the debt (loan account) does exist because that is what the law requires. So when it comes time to enforce, they have an insurmountable problem which can only be covered over by making false statements and using fabricated documents.
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They accomplish this by creating the illusion of transactions in which the nonexistent loan account is being bought and sold. That is what those assignments and endorsements are all about. When you demand proof of payment they can’t produce it because there was no payment. There was no payment because there was no account.
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My analysis has been consistent since 2006. It has been submitted in court thousands of times without rebuttal of any kind by any lawyer, financial expert or anyone else. If all of this occurs starting with the origination of the homeowner transaction then several things are true:
- The mortgage conveyance by the homeowner was void and should not have been executed or recorded because it did not memorialize any transaction in the real world — i.e., the homeowner was fooled into thinking there was a loan from the originator and therefore agreed to sign a note and mortgage payable to the originator, who was merely serving as a fee based servicer in the grand illusion.
- No conveyance of an interest in any mortgage or deed of trust is valid unless it also conveys the debt in exchange for payment. That didn’t occur between the homeowner and the originator. Payment was from the investment bank and the conveyance was to the originator who had no contractual relationship with the investment bank.
- The absence of a legal conveyance of ownership of the recorded mortgage lien to a party that claims it paid value for the original table-funded transaction, seals the fate of the purported lien, to wit: it was void and is now not subject to correction in a manner that could be recognized by law.
- The legal fiction of allowing the mortgage lien to continue is no longer available — unless both the alleged loan agreement and the concealed securitization agreement are combined through a legal process of reformation.
- Without reformation, the void mortgage lien is subject to cancellation and expungement from the record of title to the property as shown in public records of the county in which the property is located.
- While these are legally sufficient grounds for quiet title, it is my opinion that a pending refinancing deal would add urgency and reality to the claim.
- Beyond all reasonable doubt or any doubt for that matter, nobody will ever claim to own the debt and be able to prove it through the only means legally available to show ownership of the debt: PAYMENT.
- Homeowners are entitled to compensation for being drafted into a complex concealed scheme in which they are key players.
- The concealed securitization contract was also void without reformation because no consideration was paid to the homeowner for being drafted into a securitization scheme in which all the benefits flowed to one side that did not include the homeowner.
- The obligation of the homeowner remains inchoate — sleeping. It can only be awakened by reformation of the homeowner transaction using doctrine of quasi contract and quantum meruit.
- Two things need to be inserted to create an enforceable contract supported by adequate consideration, to wit: (a) a legal fiction in which the homeowner accepts the currently illegal practice of appointing a designee instead of a creditor for enforcement and (b) compensation to the homeowner for accepting this novel arrangement.
- Without reformation requested by one or both sides, there can be no legal enforcement. Rescission while technically appropriate is unavailable because of the chain of other contracts emanating from the parallel securitization scheme.
- The only other option is to appoint a receiver to liquidate all claims from all stakeholders — a process that may be unwieldy unless performed on the basis of each securitization scheme rather than each loan.
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.
Filed under: foreclosure |
Yeah…this and about $3.95 plus sales tax will get you a mediocre cup of coffee at Starbugs
Why are July comments coming up for an August 6th post?
It is true that no consideration was paid. The table funder did lend any money to homeowner, and neither did the investment bank. The investment bank did NOT fund the loan. For these PLMBS — the transaction was only a transfer of debt servicing rights — no one was paid for the prior transaction. Borrower’s transaction loan did NOT payoff the prior loan as it should have. That prior debt transaction is liquidated – zero value — no money transfer. The only thing funded was any cash-out. Only thing that changed was borrowers’ debt collector.
As to new home purchase — bewared the prior owner’s status before you purchase the home.
It is this still going on? Absolutely.
Great Topic … will be listening in …
UNSECURED debt. What’s so hard to understand. And why are we still allowing them to steal houses !!!
Great topic. Bottom line — technically, there is no mortgage – there is only a debt. And, that is why when the banks were in a short term good mood, some loans were written down in principal owed. If the loan was a true mortgage, this could never have been done. Unfortunately, few got this benefit.
Biden made write down of debt very difficult by his legislation in 2005.