The problem with qui tam in connection with mortgages and foreclosures is that they have not yet worked except in rare instances. The biggest hurdle seems to be that the agency that supposedly got defrauded (e.g. FDIC) by false claims steps forward and says it was OK. You can’t force them to admit that they were defrauded and if they are unwilling to do so, there is no possible claim. The false claims act apparently needs amendment such that an agency may not ratify or forgive criminal behavior.
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The second thing that usually trips up a qui tam action is that the relator must be someone with specific knowledge that is outside of the public domain and specific to that individual. Most such actions are dismissed because they are merely disguised class actions.
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The third thing that is an obstacle to a successful qui tam action is that the expense of litigation is much higher than ordinary litigation. So most people file such actions in the hope of a state AG or the US AG accepting the action and litigating it. If the AG steps on it, the inference is raised that the qui tam lacks merit or can’t be raised to the necessary level of proof — making it that much harder to prove a prima facie case.
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All that said, the reason why people keep trying to go for qui tam actions is that the rewards can be enormous. One person received $31 million in a settlement. See stories on Lynn Simoniak.
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My personal preference (which could be dead wrong) is a mass joinder action in which homeowners who have or had loans claimed as securitized by one specific REMIC trust scheme, bring a claim essentially stating that it was all a lie. I like it because proving that the loan was not securitized is actually quite simple in discovery.
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You end up not actually proving it, but rather blocking the opposition from introducing any evidence that the transaction was a loan and was securitized. If there is no evidence supporting the securitization of the “loan” the claims of the lawyers, servicer, trust and trustee are left without any foundation. And once that is the case any past, current or future foreclosure judgments or sales are void, not merely voidable.
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Without securitization (or some other enforceable agreement detailing the rights between the owner of the underlying obligation and the foreclosure players) there is no right, title or interest in the debt, note or mortgage and no authority to administer, collect or enforce.
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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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Filed under: foreclosure | Tagged: qui tam, qui tam complaint, securitization, securitization of debt, securitization of mortgages |
I would propose to file numerous Quiet Title actions if your home was stolen in the Court and sold to a new crime victim.
When Courts will be flooded with such actions, they MAYBE will think twice before awarding a free house on top of 184 times profits to Goldman Sachs for example.
It is a total shame that this most criminal organization does anything they want with total impunity.
Goldman Sachs is behind almost ALL securitization schemes and just robbed Malaysia from $16 billion, paid less than $5 billion in “fees” and top executives purportedly returned some rewards from theft.
Very successful capitalists. This is Grand thievery.
But It is all much more complex than appears.
First, all or most of such actions will be blocked by Judges who have PERSONAL interest in this scam.
Most judges have their money invested in the scheme, so they want to receive “returns” (which are solely based on UNSECURED promises from Big Banks to pay) as long as they allow this scam to run.
As we know, payments to unsecured creditors of investment banks – investors – are partially coming from borrowers’ payments, partially from foreclosures and mainly from sales of new unsecured certificates – based on new loans.
So, foreclosures are pipeline for NEW securitization scheme (provide inventory) and as long as Judges allow this crime to proceed- they will get at least some return of their money.
Second, IF these actions will be successful – it will be collapse of the Court system itself.
Can you imagine if Judges will publicly tell that during last twenty years they broke and bend The Constitution every law in the United States and The Settlement – and illegally awarded stolen homes to Investment Banks who pass them to new crime victims? This is Treason.
IF the law exist, these stolen homes must be returned to rightful owners – the first victim in securitization scheme.
Now, that the buyers of illegal foreclosures have to do? Be foreclosed by Judicial crime victims with mass Quiet Title actions?
Third, most judicial families are heavily involved in real estate and financial business.
So, if ANY of such actions succeed Judges will lose their investments, their families will be out of jobs; as well as Judges themselves will be out of job
I am not talking about SEC, CFPB, and AGs positions when The People will discover all this crime.
They will fight tooth and nail to cover and protect this scam as long as they can
Biden and Harris (if win) will cover for it as they did all this time.