What to do if the foreclosure mill refuses to give you an answer about ownership of the “loan”

Summer Chic write me an interesting email and I wrote back. She poses a question that summarizes the entire situation:
She wrote:

Example: PennyMac claimed that they PURCHASED my loan on May 2, 2019  from someone whom they cannot identify. The financial statements from a non-identified company show that somebody “established a NEW loan” on May 9, 2019. Not a single word about the sale

Here is what I wrote back:
As unusual PennyMac (or Ocwen or whoever) claims that it purchased a specific loan (usually in bulk). So we all know that a claim is good for pleading but litigation is not about “because I said so.” It’s about proof as admitted by the judge.
In this case the discovery question is simple: who is the party from whom you acquired ownership of the subject loan in exchange for payment of value? They can’t answer that because no such person or entity exists. When you say “they cannot identify” does that mean you have submitted formal court discovery to them and they failed or refused to answer?
If you mean that you have asked by phone or standard letter and they couldn’t or wouldn’t say who they paid, that fact — the non answer — will have very little legal probity in the case.
If you mean that you asked in a Qualified Written Request or Debt Validation Letter, then you have invoked administrative process. Failure to answer that question is a failure to establish the single most important question of the case — is the claimant the owner of the underlying obligation (because it paid real value in exchange for a conveyance of ownership of the subject debt, note or mortgage (DOT)? That is, after all their claim if they are claiming ownership or claiming purchase.
If the named claimant is the owner of the underlying debt then the claimant is the owner of the loan account and can claim a financial loss resulting from nonpayment by the homeowner. Since they have suffered financial damage they are entitled to redress through the courts and that includes judgment on the debt, judgment on the note and judgment on the mortgage (or all three).
If the named claimant is NOT the owner of the underlying debt then the claimant is NOT the owner of the loan account and cannot claim a financial loss resulting from nonpayment by the homeowner. Since they have not suffered financial damage they are not entitled to redress through the courts and they have no right in law or equity to a judgment on the debt, judgment on the note and judgment on the mortgage (or all three).
So if administrative process in invoked and they refuse to answer (always the case) then you file complaints with the CFPB and state AG that says, in summary, I am being coerced into a relationship with PennyMac despite the fact that they will not reveal any transaction in which it acquired ownership of my obligation. PennyMac is neither my original lender or table lender nor a successor to anyone who was the original lender or table lender. Its response is required under applicable law. They won’t answer or they are admitting informally that they are unable to identify the transaction except by date but without any information about the “seller” whom they say they cannot identify.
Lying to AG and CFPB carries some fairly hefty penalties so the banks try to steer clear of flat out lying to those law enforcement agencies. So you usually will find inconsistencies between their answer to the CFPB complaint and what they have previously sent you. You can use those effectively in court as admissions against interest. There will always be inconsistencies because none of what they are saying is or ever was true. But it isn’t up to the judge to dig. It is up to you as litigant to put these inconsistencies squarely in the face of the judge and be able explain in clear persuasive language why this is important.
If you mean that you asked in formal court discovery, that is an entirely different story. That fact that you asked is relevant. The fact that they didn’t or couldn’t answer is relevant.  And the fact that they failed or refused to answer even after the court entered an order compelling the answer is relevant because you file a motion for sanctions asking for monetary penalties and striking their pleadings.
Then after they still don’t produce the answer you are in the very strong position of filing a motion in limine — unless the court has already entered an order striking the pleadings of the claimant.
You cannot pursue a claim if you are unwilling to say how you got hurt. If you are claiming loss from nonpayment you must show entitlement to payment. Otherwise nonpayment is irrelevant. A quick summary of the law is that if the inferences and presumptions arising from allegations of the complaint or exhibits are properly challenged, the homeowner is entitled to rebut those inferences and presumptions.
But the rebuttal does NOT consist of proving that the claimant does not own the debt, note and mortgage. The rebuttal arises when court rules prevent the claimant from introducing any evidence at trial that they own the debt, note or mortgage. So even if they did own it, and even if you did owe the money, they would still lose because they had not obeyed court rules.
The fact that a “new loan” seems to have appeared is not dispositive. If there really was change of ownership it is perfectly acceptable for the new owner to change the labels. But more importantly it might be a clue. The new labels might be an indication that the loan data has been included in multiple “portfolios.” Although none of the portfolios consist of anything more than data about the loans instead of ownership of the loans, they all represent different securitization schemes. By challenging the current portfolio and demanding answers to questions about transfers of the loan you can uncover the fact that more than one “implied trust” is being named by underwriters and foreclosure mills as the successor lender.
Just remember the paperwork introduced as exhibits to the foreclosure complaint or discovery or at trial in most cases is NOT facially valid because it requires the reader to pursue information that is not in the public record. A big error is NOT challenging the facial validity of a document. Failure to do that either waives many of your defenses or makes it a more difficult uphill climb.
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate 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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20 Responses

  1. Like I said, I’ve never seen it in upstate NY in ten years. Worst situation is when there actually is equity in a home. I won’t go near that one with a ten foot pole. Those situations require an atty who can try and work something out with the bank. Like you said, those situations can be really damaging because fighting them tooth and nail eats up the equity.

  2. We see deficiency judgments in NY, and all over the country. The same with paying banks attys. fees. As an example, In FL.,.a homeowner was awarded, as I recall around $127,000.00, which is not unusual nationwide.

  3. legisman,

    actually, in 10 years i’ve never seen a deficiency judgment in NY, I think that that is because the plaintiffs know that they will only be met with a BK filing, and maybe have to show what they actually paid for the note. And we know that they never paid for the note, but are really fronting for the hidden player behind the curtain. As for getting stuck with legal fees, that comes off the top from the foreclosure sale. The attys bid on portfolios of foreclosures, roughly getting paid between 2500-3200 in NY per case, regardless of time spent on the case. I think that I have run up over $100K in opposing counsel fees in a couple of cases, but the court never awarded them more than $3,500. And the homeowners seem to prefer to staying in their house as opposed to moving for as long as they can. but i agree, it is a tough situation.

  4. Bob.G, I know what you’re trying to do with your business model, but that’s not what homeowners are trying to accomplish. Stalling arguments for homeowners is disastrous. They’ll eventually lose their homes, most likely have a deficiency judgement, and have to pay the bank’s atty fees.

  5. to thecompanyofcreators

    yeah, ok. let us know how all those arguments work out for you in court.

    look, kid, i’ve been doing this for ten years. i know what works and what doesn’t work. come on back when you’re out of litigation puberty, have a bunch of bankster scalps hanging off your belt, and then you can lecture me. in the meantime, belly up to the bar and get another double Kool-Aid for yourself.

  6. Bob G.
    Not quite!! UCC 3 has nothing to do with these non-negotiable instruments!!! That is the first problem (unlawful conversion) of converting securities into alleged “negotiable instruments” (see definition of “negotiable instrument”) Complete fraud and actually if what they have was valid it would void it.
    And since we are here, it is NOT “signed in blank”!!!!!!!!!!! It is left blank!!!!! Ask any bank teller, VP, or president or any bank what they will do when the “Pay to the Order of”______________ is left blank….. They will reject it as incomplete, not valid!! and will not accept it as value!!!
    Oh I could go into a long list of problems such as where is the security which is part and parcel to the Note??? So technically the instruments are void once separated kinda like taking a money order and cutting it in half to monetize each half..(oh yes that is what they do) and all this time the instruments are VOID. Why? Go read the Note what does it say at the top?
    Let me ask you a simple question… Do you recall receiving anything of substance or value in your hand, your bank account or someone else on your behalf, BEFORE you signed and delivered the Instruments to the agent? NO!!! Thus the “condition precedent” was unfulfilled and thus the “I promise to pay which is conditional upon “have received” is unfulfilled thus it is impossible to “Return” that which was not “Received”.
    2. As in your scenario the instruments are “donated”… what actual instruments did they donate? Counterfeits! Counterfeits are not “negotiable” and are NOT “negotiable instruments”!!!
    3. The instrument itself states “anyone (man) who (not a what) takes (legal term look it up) this Note (not a copy) by transfer (thus establishing how it is to be “exchanged” and not by “assignment” but “transfer” which requires the original and to be valid (void see above)) and is entitled to payments under the Note, (in law the “and” must be fulfilled to have force or effect like flower and water and heat and rise to make bread. without any one of these required “ingredients” you ain’t got no bread that is edible or “transferable” and as you can see they must be “entitled to payments under the Note”… they are not!!! Remember one can only transfer that which one has possession and entitlement to, to transfer!! Here we have neither the physical original not the entitlement to “transfer” and no one “taking” Accepting, taking into custody the original with DOT together and signing for as taking on the obligations of the other party so called “Lender”. One can not “assign” duties to another unless they are assignable (not here) and the assignee is and Agent or Employee of the assigner acting on behalf of the assigner who is authorized to assign (not here)

    Hope this helps a little…

    The solution is simple and effective and can be very fast like a few weeks.. See Continued Competency Training regulation at continuedcompetencytraining@gmail.com (once they know the laws and the “Principles” founded upon and purpose for which it was instituted “That to secure these Rights” and “to effect their Safety and Happiness.” it is far less likely they will war against the people as they are now when they know that they can and will be prosecuted, they will no longer be “go alongers ot getalonger”)

  7. Can we go the full mile Please??? The Courts are without jurisdiction without a Claim or a Claimant!!! Thus the courts are accessories to the counterfeiting. Further the courts (corporate entities masquerading as lawful courts) are in possession of “Counterfeit instruments” (copies that are not original copies and are not 1.5 and larger times the size or 3/4 and smaller the size of the original as required. (the fact that it is not on legal size paper is a kinda a huge clue) and the courts are acting as debt collectors without a license. (Since there is no Claimant).. be careful how you do that though because when I boxed the corporate faux court in, they sent not one but two Swat Teams to take me out with over 30 police and 8-10 deputy sheriffs (all accessories to the crimes because I kept CC’ing them the documents filed and notice of “crimes cognizable of a court of the United States (see 18 USC 4) ).
    These are NOT lawful courts and even if they were the men and women putting on Black (magic) Robes and sitting elevated as if on a thrown and “presiding” (running roughshod) “Over” the “case” (you as surety (signature) are engaged in less than “good behaviour” which according to the Constitution they only “hold their office during good behaviour”. Thus they are in fact perpetrating an office of public trust while engaged in an extortion, bribery, moneylaundering, securities and counterfeit securities scheme for profit at the demise of the people, due process and in opposition to the Constitution and “the equal protection of the laws.”
    Add to that Uttering and Passing, unlawful sale of private property, breaching of trust and trust law (remember the DOT is for the “Lender” to recoup any losses as a result of nonpayment of a Loan… which you never received). Then you have mail fraud and on and one and on… RICO for sure but without any courts or judges having Knowledge of the law they are compromised and impersonators and accessories to all these crimes.
    So why are they not prosecuted????
    Because none of them know the laws not the “principles” founded upon nor the purpose for which “any Form of Government exists:
    “That to secure these Rights Governments are instituted among men” (not over men!!!)

    Solution??? Simple!!! but everyone seems to be happy fighting corrupt judges, clerks and attorneys instead of implementing the very simple solution. I’ve written about it before without any response… so if you want to participate in the Solution, then email us as continuedcompetencytraining@ gmail.com no spaces. Blessings

  8. legisman…P.S. I can actually use some of NG’s stuff with my biz model, because he has plenty of monkey wrenches that can be thrown into the mix to cause lots of delays. Then again, I’m in NY where we have judicial foreclosures and jammed up dockets.

  9. legisman…not avoiding the elephant in the room. my goals are different. i’m not looking for a free house. i’m just looking to stall them for a couple of years. that way i get to rent the place out without making PITI payments. my gross = my net. of course I don’t have any depreciation because my basis is typically inconsequential, but i can live with that.

  10. Bob.G basically understands how things work, but didn’t quite explain the elephant in the room: In EVERY mortgage transaction (contract) the borrower AGREED that if they failed to make timely payments, the lender or their assigns could take the property—PERIOD!

    Therefore, if one wants to save their home, the need to understand, the only methodology that works, and common sense dictates, it is necessary and imperative to attack that transaction (contract). Proof? The FDIC sent their bank examiners out and found 83% of the mortgages transactions are problematic, and 76% of the appraisals were bad. Common sense—attack the contract!

    Analyze the mortgage transaction (contract) and according to statistics, the odds are greatly in your favor to save your home. Or, keep following stall arguments like, assignment, MERS, standing, produce the note, split the note, robosigning, didn’t get into the trust in time, the trust doesn’t exist, etc., etc., promoted by securitization/chain-of-title/forensic auditors, and legally illiterate attorneys, and lose your home.

  11. Javagold…No. This is a chess game. There are two players: the bankster and the homeownerster (“homesters”). This is a zero sum game. The bankster and the homester are competitors seeking the same asset. It’s a game. You win, or they win. You just have to prove that whoever it is that is foreclosing on you has violated some statute that bars them from doing so…at present.

    The homester got the money to buy the house. Is there any disagreement about this? If you didn’t get a loan to buy the house, and you didn’t default, then you wouldn’t be getting sued, would you? NG wants you to drink his Kool-Aid, essentially telling you that the banksters are the bad guys, and that you don’t have to pay back the loan and are entitled to a free house, and that he will sell you some service that will get you a free house. In the real world, does this make any sense to you?

    The banksters use these bankster trusts because the loans were originally sold to fred or fann shortly after origination, the loans are in default, and then fan and fred sold the loans to private equity funds. are you saying that fann and fred do not have the right to sell NPL?

    And why is it illegal or unethical for the private equity funds to hire banksters to act as plaintiffs for them? They do this simply because the banksters have the word “bank” in their name. So what? The private equity funds have paid good money for those loans, regardless of what NG says.

    Typically, the private equity funds pay 60% +/- for the loans and seek to get a good return on their investment. that’s how capitalism works. rarely are you going to get your house for free. the most you can hope for is to live free for a number of years, or get a loan mod that you can live with.

    but can anyone here tell me exactly how they’ve been damaged or cheated by securitization of their mortgage loan and, after they defaulted, by being foreclosed upon? NG keeps telling you that you are a victim. You are not. The banksters and foreclosure mills have a right to foreclose. The problem is that they hustle the process through, not that they are not entitled to liquidate the collateral to pay off the loan, regardless of who gets the funds after the foreclosure sale. Why does it matter to you who gets the sales proceeds?

    Can anyone here prove me wrong? If so, please educate me with hard facts, not emotional NG-type victim drivel.

    Look, I battle the same guys that you do. But I take a different approach for a different goal. I realize that the banksters and I are speculative competitors. I tell the courts that the named plaintiff is fronting for a private equity firm that buys busted mortgages to realize a profit, that they never lent the homeowner a dime. I also tell the court that I buy busted deeds to realize a profit. I’m not emotionally involved in this stuff and have no illusions about being a victim. You guys are and do. That’s the difference.

    In PM’s, I’ve asked NG to identify cases and folks who have won using his techniques and following his advice. His response is always “the folks that have won their cases.” But he never can refer me to any actual or specific cases where the parties have settled. I don’t need to see the settlement agreements, which are confidential…I just want him to refer me to those cases where I can see that the cases have been settled or dismissed. He refuses to do so. That tells you every thing that you need to know about the value of what he is trying to sell you, doesn’t it?

  12. While I tend to agree with Bob G and legisman. This post. Not so much. Are you both saying the criminals get to fraudclose on all of America and there is no way to stop their lies and fraudulent documents ???

  13. Bob G, you’re wasting your time. You can give people like summer facts and case law backing them up; but he, like so many others have been fed a bunch of garbage from legally illiterate lawyers, who’ve never won a foreclosure case, and securitization/chain of title/forensic auditors, who the court’s have called “charlatans” and their “paperwork empty gimmickry,” promoting their factually and legally incorrect misinformation to their detriment. Sadly, summer would rather believe them, instead of the facts and truth staring him in the face.

  14. Summer…we’re talking about negotiable instruments here. Please review UCC Article 3 and cases citing to it. I’m not making excuses for the banksters. But there is negotiable instrument law for a reason. And I cannot afford to waste my time rebutting your nonsensical post, item by item. Everything in your post is emotional pablum, and illustrates your lack of knowledge regarding applicable law.

  15. To Bob G.

    Nice try to find excuses for Big Banks crimes.

    First thing first. So, you give Legisman $200,000 to buy a house.

    Are these YOUR money and you have a proof that these are HONEST money? Or you took $200,000 from a local gang members who want to launder them via Legisman’s home purchase and pay you a fee to participate?

    Can Bob provide Legisman a proof that money came from a legitimate source? None of current “Lenders” cannot explain where money they “lend” came from.

    Second, so, Bob gifted this Note and Mortgage to a charity. Nice.

    Did this charitable Institution ever acknowledged this gift and gave Bob a RECEIPT of his donation?

    Apparently YES if Bob was able to write off taxes. In other words, he received a RECEIPT of VALUE of his donation to receive a benefit such as tax return. Or Bob just told IRS that he made $200,000 donation to someone, please write it off from my taxes?

    Next, the Charity gets this Note and Mortgage as a Gift, means for FREE. Very nice.

    For several years Legisman paid this charity as pure revenue – until failed to make payments.

    Which damages suffered CHARITY if they never paid a cent for this Note and never paid Bob a cent for his tax return?

    To the contrary, this Charity received a substantial benefit from mortgage payments made by Legisman , which is a pure profit – which must be used to benefit SOMEONE whom this charity serves, in order to write off taxes and let a Grantor to write off taxes.

    For example, this Charity suppose to buy meals for a community.

    How about this Charity did not buy meals for the Community, but pocketed all money to enrich its Directors; destroyed Legiman’s Note; and started to resell IMAGES of this Promissory Note to other charities and pocket all the money as tax-free revenue?

    Can this Charity demand a home from Legisman if this Charity and Bob

    (1) received a full benefit from this transaction;
    (2) used Legisman’s Note and Mortgage for illegitimate purposes (aka laundering money for a local gang and sold information about Legisman Note as “mortgage backed security” 12 times more than the amount of the Mortgage, to other Charities) ?

  16. Who cares about violations of the law if this scam is covered by the Government?

    Try to call or write your “Servicer”. They will swamp you with absurd and contradicting lies.

    Here is that Servicers told me:

    1. Caliber /Countrywide on May 3, 2019 :
    “Caliber the CURRENT Note Holder and the loan is pooled in security guaranteed by Ginnie Mae – after they transferred “servicing right” to PennyMac on May 2, 2019.

    2. PennyMac/Countrywide on May 10, 2019.
    “The owner/investor is PennyMac Loan Serves, LLC”

    3. Caliber on May 17, 2019.
    “owner/investor is Ginnie Mae”

    4. PennyMac on May 23, 2019:
    “The owner/investor is PennyMac Loan Serves, LLC”

    PennyMac: we are “issuers of securities backed by your loan”.

    Ginnie Mae’s Vice President to Sen. Peters: “the Issuer is Caliber”

    Ginnie Mae MBS guide: “the Issuer is a Lender”

    Ginnie Mae Prospectus: “The Issuer is Federal Reserve”

    PennyMac: “we are servicers for a Ginnie Mae Trust where your loan is pooled (well, who is the owner – PennyMac or Trust?).

    PennyMac: “we collect payments to forward them to Trustee BONY who distribute them to Investors……” (who is PennyMac)

    Caliber’s “financial statements” – a number of interesting transfers by The System; and all payments autoposted – with flagrant discrepancies from Caliber’s “official” documents they sent to me.

    Ginnie Mae Prospectus:
    “[Our] Securities WILL be issued (if someone sell Ginnie Mae a loan) and maintained in book-entry form (??? MSP) through the book-entry system of the Federal Reserve Banks (aka Goldman Sachs, JPM, BOA, WFB, Citi and other members of The Cartel.

    Example” May I buy a vintage Ford car from someone? Yes, I may.

    Will I buy a vintage Ford car from someone? Yes, I will.

    The problem is – does this someone have a vintage Ford car to sell me?

    Read Freddie, Fannie and Ginnie Prospectuses. They are all about “MAY, SHALL and WILL” – IF someone sell them LOANS.

    In other words, Ginnie is willing to guarantee payments – but here is nobody who can actually SELL these loans and pool them into Trusts.

  17. So…what do you do when everything you file is ignored? You file the QWR directly into the case file, you mail copies to the Debt Collector, the Foreclosure Mill, the CFPB…and include the certified mail receipts in your filings and…nothing happens. You (verbally) ask for a Hearing on RESPA violations evidenced by the non-response…and you are informed (verbally) ‘There will be no Hearings on this matter’. You then file a Written Request for Hearing or a Ruling as to why you are being denied a Hearing on evidenced ‘non-response’ RESPA violations…and Trial is immediately set ‘within 14 days’…’in Chambers’ with no witnesses…So what do you do THEN? I filed BK…and they STILL tried to have the Trial…despite being sent Notice of Bankruptcy via Certified mail and filing Notice of Bankruptcy and ‘proof-of-service’ via certified mail into the case file…It took physically handing the Lying Sociopath and the Bailiff copies of the Notice, copies of the Clerk-stamped receipt, and copies of the ‘proof-of-service’ certified mail receipts to get a ‘reaction’…and the Lying Sociopath told the Judge she was ‘unaware of this filing’…with ‘proof-of-service’ in the Judge’s hand…and he bought it. Of course, as I was leaving, she volunteered to ‘stay behind’ to discuss ‘some thing’ with the Judge…(nice little ‘ex parte’ conversation). To this Day, I still think it was to hand the Judge his ‘pay-off’ for the attempted Sham Railroad Trial that I ‘de-railed’ with the BK filing…and because I had two complete sets of ‘proof of filing’ that they HAD to acknowledge and couldn’t ignore…So…what do you do when they ignore EVERYTHING?

  18. Agreed, legisman.

    I give you $200,000 to buy a house. You execute a promissory note and give me a mortgage for that amount. I gift the note and mortgage to a charitable institution, and take a charitable contribution tax deduction. The charity books the gift as a $200,000 asset.

    After a few years of making timely payments of principal and interest, you default. The charity files a foreclosure action against you. According to NG, you will win because the charity cannot prove that it paid value for the note and mortgage.

    Does that make any sense to anyone here ? The note itself contains the value that the charity will lose if you don’t pay the mortgage note. By your not paying the note, the charity suffers the requisite damages.

    The man keeps conflating state debtor-creditor law where ownership of the debt is required, with UCC Article 3 negotiable instrument law, where it is not. As a licensed attorney with four or more decades of legal experience, he should know better. Why he continues to do this is one of the Great Mysteries of the Cosmos, at least it is to me.

  19. Sadly again, Mr. Garfield is only half right. All one needs to do is call or write the Servicer and and request the info. Pursuant to the TILA and RESPA they are required to give you the info by those statutes and implementing regs. Failure to do so is a violation of those statutes and any suit includes damages and atty’ fees for the plaintiff.

    Obviously, this is quite simple vs. all of the machinations the Mr. Garfield is suggesting.

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