Maine Decision Presents New Challenges for Hearsay objections on Fabricated Records

see Bank of N.Y. Mellon v. Shone, 2020 Me. 122 (Me. 2020)

the record keeping shortcomings of some members of a particular business sector should not drive our interpretation of a rule of evidence that applies to the records of all businesses and, more broadly, as Rule 803(6)(B) indicates, to the records of any “organization, occupation, or calling.” If the records kept by mortgage lenders or loan servicers in particular are categorically unreliable, more stringent proof requirements might be appropriate. [e.s.] But there is no good reason to require in every case testimony based on personal knowledge of the practices of the business that created a record when the business that received the record can meet the integration, verification, and reliance criteria of the integrated records approach.

Bank of N.Y. Mellon v. Shone, 2020 Me. 122, 17-18 (Me. 2020)

So the bottom line is that in the musical chairs game currently labeled as “servicing” it is common to have a company claim to be the servicer for an unidentified or unconfirmed creditor. That company in turn sends a witness to court who knows absolutely nothing about the case. But the witness is trained to say that the payment history report  tendered to the court as evidence constitute normal business records that have a presumption of credibility. Note that it is never said, asserted, alleged or sworn that the subject records establish the debt as an asset on the books of any creditor who paid value for the underlying obligation (see Article 9 §203 UCC).

This decision from Maine says that the records MIGT be admissible even if they include “integration” of data from a previous source. And foreclosure mill lawyers are going to be quick to point to this decision and to use it to steamroll over some hapless homeowner to get a foreclosure sale for profit instead of restitution for an unpaid debt that was liquidated contemporaneously with origination of the transaction.

But the court took special pains to point out that they suspected that some players were not as credible as others. The court pointed out specifically that so-called lenders and servicers might have record keeping shortcomings.  Indeed they do since they don’t actually create, maintain or report on data or transactions and instead merely maintain call centers at which people are hired to access screens that are managed by third party vendors working for the investment banks.

So this is the same as any other document that might make it into evidence. It is cloaked with a presumption but you can rebut that presumption by asking pointed questions and taking the deposition of witnesses who are said to have knowledge about transactions that nobody in their company actually handled or participated. You can do this administratively through a QWR or DVL or you could do it in discovery which is more easily enforceable. But answers to QWR and DVL often conflict with prior correspondence and notices, which is helpful.

REMEMBER THIS: THE BOARDING PROCESS DOES NOT GENERALLY EXIST. THE ASSERTION OF A BOARDING PROCESS IS MEANT TO INVOKE THE INTEGRATED RECORD-KEEPING EXCEPTION TO THE HEARSAY RULE. IN OTHER WORDS WHILE THEY COULD NEVER HAVE SUCCEEDED IN GETTING THE ORIGINAL RECORDS INTO EVIDENCE BECAUSE OF LACK OF COMPETENCE AND LACK OF FOUNDATION THEY CAN NOW OFFER INTO EVIDENCE THE RECORDS OF A NEW “SERVICER” WHO TESTIFIES THROUGH AN IGNORANT WITNESS THAT THE RECORDS WERE INTEGRATED FROM A PREVIOUS SOURCE, INSPECTED AND VERIFIED, AS WELL AS RELIED UPON BY THE CURRENT COMPANY IN ITS BUSINESS OPERATIONS. 

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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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2 Responses

  1. So-called “Servicers” have nothing to do with servicing – at all.

    First, they have nobody to service. Second, nobody needs their “services”.

    As PennyMac published in their 2013 Prospectus, they PURSUE opportunity to purchase and service mortgages; “typically” pool loans and receive subservicing fees for providing EXPERTISE to their owners – BOA, Goldman Sachs , Morgan Stanley, JP Morgan, ect.

    So, Servicers PURSUE opportunities; provide EXPERTISE, TYPICALLY pool – but never did any actual servicing or pooling.

    In sum, this scam is operated by a PRIVATE enterprise which call themselves Federal Reserve (which consists of the SAME Mega Banks and owned by several PRIVATE families – Rockefeller, Rothchild, Lehman, Goldman Sachs, Lazar, Kuhn).

    ALL so-called “securities” are issued by a Federal Reserve member, Depository Trust Corporation (it is in ALL prospectuses, including GSEs) and assigned to their only beneficiary Ce de & Co. as a DATA about ALL so-called mortgages – which are destroyed after they are scanned and placed into Black Knight or CoreLogic systems.

    After INFORMATION about so – called mortgages are entered into the system, it became available for SEVERAL parties who trade this DATA on the open market as “performing” and “defaulted” at the same time.

    According to CWF and other players’ Propsectuses, their “securities” are not regulated by SEC and NOT RELATED to any mortgages.

    ALL “securities” are issued on Street Name by Depository Trust Corporation book entry system. ALL of this “securities” are actually derivatives which are based on DATA placed with Ce De about loans.

    Investors do NOT have any physical proof that their “certificates” are backed by any loans. Moreover, Investors are not even allowed to have any actual possession of any proof of any “assets”.

    This entire “securitization” scam is basically the same as computer version of Monopoly where Pension Funds invest billions in SOMETHING which they never seen and not even allowed to own any PROOF that this “something” actually exists; and enthusiastically calculate 10-50% “returns” from thin-air DATA issued by DTC on Street Name via book-entry system operated by Federal Reserve

    This is all Fool’s Gold.

  2. Servicing for a non bank is, simply, debt collection. And, this means that you never had a mortgage. This is not about YOUR payments. This is about what happened BEFORE you even signed on dotted line for what you thought was a mortgage “refinance.” And what happened did not involve you anything YOU did. .

    All you got at claimed “closing” was an assignment of already declared default debt – even before the claimed “mortgage” closing. The note is not valid because the actual mortgage, by claimed refinance, was simply reaffirmation of an inside declared default not disclosed to you. There was no consummation because you never signed a reaffirmation or reinstatement of declared default debt. That is because you were never told. This goes for assumption of default debt by a purchase too.

    The “named” servicer “records” will not produce that critical information. because they are hired by the actual MASTER of SERVICING – Black Knight – who is the only party to hold records going way back. Change in hired “Debt Collector” servicer by Black Knight is meaningless. .

    There is no escape without challenge to Black Knight – Master of All Servicing records. .And, then, however, you have to deal with Statute of Limitations. All that is left is — fraudulent concealment. But you need the records first for that. And, how do you get them?

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