Why You Need to Understand the Truth and How to Use It to Successfully Defend Foreclosure Cases

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

You don’t need to believe me. You don’t need proof that what I am saying is true. You have every right in every court to file demands for discovery relating to the existence and ownership of the debt. Ask any lawyer or any judge. They will affirm this to be true. And ask any accountant. The debt exists only if someone maintains a current ledger entry on their own books of record that shows they paid value for the underlying obligation, along with having supporting documentation (proof of payment). If they didn’t pay value then they don’t own it — under both accounting rules and the laws of every jurisdiction.

Everyone is complaining about why homeowners are not winning more cases. They all seem to have their own specific grievance theory about lawyers, judges, regulators etc. But the real problem is the homeowners themselves. They simply won’t accept the fact that a claim filed against them has absolutely no merit.

So the first thing they do is admit the existence of the debt, the existence of delinquency, the existence of default, and then they go on to explain why they should be let out of what they have already admitted was a legitimate debt that is unpaid  — contrary to the agreement they signed. After losing the case, homeowners claim bias and any other theory that distracts from their own personal responsibility for their loss.

No judge is a mind reader or an investment banker. Acting as though a judge should be a mind reader or an investment banker is foolishness.

If the claim filed against you arises as a result of a claim of securitization of a debt, the claim is false. There was no securitization of debt. There was no sale of any debt. There is no authority arising from the securitization of debt. The document submitted by a self-proclaimed servicer both irrelevant and inadmissible as evidence in court — but only if a timely objection is raised. That is how the system works.

The same thing holds true when the named claimant is not a trustee. In most cases, the transaction was still the reference point for securitization, to wit: the issuance and sale of securities. And those securities were not conveyances of any right, title, or interest in any debt, note, or mortgage. So the fact that the securities were bets on data contained in discretionary reports issued by the” investment bank” posing as “Master Servicer” does not mean the debt was sold. It wasn’t. Like the supposed “REMIC Trustee” the named claimant has no loss and in fact has no interest in the outcome of litigation — except as a profiteer.

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

This is reminiscent of the repeated reports to the SEC of wrongdoing by Bernie Madoff. The reports were regarded as too absurd to be true on the scale that was reported — until 10 years later when Madoff himself admitted all charges and was sent to prison. Just because a lie is a whopper doesn’t mean that it can be turned into truth. Eventually, financial historians are going to see “Securitization” for what it is — a PONZI scheme. Nothing was securitized.

It is understandable that Homeowners are a bit put off by the apparent complexity of securitization. But it becomes much simpler when you realize that securitization never occurred. The securities that were issued and sold to investors did not represent ownership of any debt, note, mortgage, or payment.

It is also understandable that homeowners are not well-versed in court procedure, the burden of proof, or the rules of evidence. And it is even understandable for homeowners to assume that their debt still exists. We can’t expect homeowners to understand what has been completely concealed from them.

Because of limited judicial resources, the courts were forced into running roughshod over the rights of homeowners — solely because of the assumption that the debt existed and that somehow the money proceeds of the forced sale would find its way into the hands of investors who had directly or indirectly purchased the transactions that were labeled as loans.

  • Removing the assumption of an existing debt the homeowner who properly and timely files a denial of claims and or who files affirmative defenses should be permitted to rebut the legal presumptions arising from apparently facially valid documentation and to contest the actual facial validity of such instruments.
  • Removing the assumption of an existing debt requires the trial court to treat discovery demands seriously rather than as an annoyance.
  • Removing the assumption of an existing debt requires the trial court to strictly apply existing law instead of inventing new law.

If a lawyer meets a prospective client who admits liability, the lawyer is going to look for other means to protect the client from enforcement. If a lawyer admits liability on behalf of his client the judge is going to consider technical factors in the enforcement of the liability. But the judge is not going to deny enforcement on the basis that the liability does not exist. If the homeowner and the lawyer failed to bring that issue up, then it is not an issue that will be litigated. Those are the rules. That is not bias.

There is nothing more basic to a foreclosure action than the existence and ownership of the underlying obligation. Homeowners and their lawyers have made the mistake of trying to prove the true facts of securitization or lack thereof. But all they really need to do is challenge the presumptions raised by the allegations and exhibits of the claimant — during the process of discovery. They fear this path because they fear the claim is real.

The problem is that neither homeowners nor their attorneys are going to do that. Instead, they are going to look for a magic bullet in the form of technical deficiencies of the allegations or exhibits. This almost guarantees that the judge will order foreclosure, a sale will occur and the homeowner will be evicted. How would you feel if somebody owed YOU money and they got out of it by poiinting out some minor technical deficiency?

You don’t need to believe me. You don’t need proof that what I am saying is true. You have every right in every court to file demands for discovery relating to the existence and ownership of the debt. Ask any lawyer or any judge. They will affirm this to be true. And ask any accountant. The debt exists only if someone maintains a current ledger entry on their own books of record that shows they paid value for the underlying obligation, along with having supporting documentation (proof of payment). If they didn’t pay value then they don’t own it — under both accounting rules and the laws of every jurisdiction.

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

But the burden is on the homeowner to raise the objections. The burden is on the homeowner to deny the allegations and challenge the exhibits. If the homeowner fails to timely raise the issues in proper form, then the debt does exist for purposes of litigating the case — even if there is no debt in real life. Courtrooms are not real life. All courtroom decisions are legal fictions in which the judge’s finding of fact is final even if it differs from the real world. If it were otherwise, courts could not work and no disputes would be resolved — ever. 

Your expectation that lawyers and judges should know about all of this is misplaced. The only people who would know this information for a fact are people like me. I was an actual practicing investment banker and I was physically present in the room when the seeds of the current scheme of securitization were discussed way back in 1970.

When I later read that someone figured out a way to separate the debt from a “mortgage-backed security” I understood completely what that meant and how it would be misconstrued by homeowners, lawyers, judges, and regulators. The Wall Street banks gambled that the sheer magnitude of their lie would overcome any objections. They were right.

But they don’t have to be right for future litigation. And that is why I am filing amicus briefs and drafting petitions for rule changes in all 50 states. Eventually, courts are going to have that moment when they realize what is going on. That day will be moved closer by you acting on what I say here on these pages.

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

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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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4 Responses

  1. Yes, Judges agree that you have right for discovery.

    But they will never allow you to conduct full discovery (my Motions to Compel and Subpoenas were simply ignored by Judges) or ignore obvious lies by Banks’ lawyers. Seen it many times.

    No, Judges are not mind readers for Big Banks.

    They are INVESTORS in non-mortgage backed securities based on Book Entry Credit by a participant who never appear in any foreclosure – Cede, unregulated member of Depository Trust Corporation, branch of families-owned Federal Reserve (secretly created by John Pierpoint Morgan and Sen. Aldrich during their fake “hunting trip) whose son was President of Chase Bank and whose daughter Abigail was married to John Rockefeller, one of co-owners of Federal Reserve.

    And Judges will fight a tooth and nail for their money.

  2. This is a most draconian mystification and fraud created by Big Banks (who own Federal Reserve) under cover up from the Government.

    Read Federal Reserve history (from panic in 1907), Jakyll Island meeting in 1910, ect. ; documents, they tell everything.

    Below is agreement between UBS, JP Morgan and Crescent where the Participant (UBS) has agreed to purchase, from time to time, at its sole election from the Seller, participation certificates (the “Participation Certificates”) representing 100% ownership interest in certain residential first mortgage loans .

    FHLMC Security”: A modified pass-through mortgage-backed participation certificate, evidenced by a book-entry credit made by a Securities Intermediary that is a participant of the Federal Reserve Bank of New York. (aka Depository Trust Corporation and Cede who is a SOLE beneficiary of all DATA about mortgages)

    “GNMA Security”: A fully-modified pass-through mortgage-backed certificate guaranteed by GNMA, evidenced by a book-entry credit made by a Securities Intermediary that is a participant of The Depository Trust Company.

    “Warehouse Lender”: Any lender providing financing to the Seller for the purpose of originating Mortgage Loans, which lender has a security interest in such Mortgage Loans as collateral for the obligations of the Seller to such lender.

    The Custodian SHALL hold all documents constituting the Mortgage File received by it for the exclusive use and benefit of the Participant, and SHALL make disposition thereof only in accordance with the written instructions furnished by the Participant. The Custodian SHALL segregate and maintain continuous custody of all documents constituting the Mortgage File received by it in secure and fire-resistant facilities in accordance with customary standards for such custody and shall mark the file folders therefor to indicate that the Mortgage File is being held for the Participant. Notwithstanding anything in this Section 3 to the contrary, upon delivery of a Security to the Participant or its designee, the Custodian shall automatically cease to hold the related Mortgage File on behalf of the Participant, and this Agreement shall thereupon cease to be of any effect with respect thereto.

    the Seller (Crescent) WILL cause the Mortgage Loans evidenced by a Participation Certificate to back a Security (as defined below), which the Participant or its designee WILL receive in substitution for the related Participation Certificate

    upon an assignment by the Participant to an assignee relating to the financing of the Participant’s purchase of Participation Certificates, the rights of the Participant under this Agreement shall be exercisable solely by such assignee.

    Big Banks (read: Federal Reserve) agreed to indemnify GSEs for their role as a “Guarantor” for not-existing MBS.

    It is clearly described in GSE Corporate Guarantee Agreements
    Citation from Ginnie Mae CGA Form HUD 11785

    Whereas, (“Parent”) is the parent company of(the “Subsidiary”); and
    Whereas, the Subsidiary is applying to become an Issuer/is currently an Issuer in good standing of the of Government National Mortgage Association (“Ginnie Mae”) mortgage-backed securities (“MBS”) program; andWhereas, the Subsidiary and/or Parent ______________________________________________; and
    Whereas, as a condition precedent to Ginnie Mae allowing the subsidiary to issue/continue to issue Ginnie Mae
    MBS,

    Ginnie Mae requires that the performance of the Subsidiary be unconditionally and absolutely guaranteed by Parent (“Corporate Guaranty”)

    Custodial Agreement between UBS Walburg (Paul Walburg was one of first Board members of Fed. Res.) and JP Morgan (who created and own Fed. Res.) Chase (which was under leadership of Sen. Aldrich’s (who created Fed. R, with John Pierpoint Morgan) son .

    So, Federal Reserve is a FAMILY business presented as “government controlled” – while it is totally opposite.

    PARTICIPANT: UBS WARBURG REAL ESTATE SECURITIES INC.
    CUSTODIAN: JPMORGAN CHASE BANK
    SELLER: CRESCENT MORTGAGE SERVICES, INC.
    DATE: JANUARY 31, 2003

    the Participant AGREED to purchase, from time to time, at its sole election from the Seller, Participation Certificates (as defined in the Original Custodial Agreement) representing 100% ownership interest in certain residential first mortgage loans. (But not purchased)

    the Seller (Crescent) WAS OBLIGATED to service the Mortgage Loans. But never did.

    the Participant DESIRED to have the Custodian (1) take possession of the mortgage notes evidencing the Mortgage Loans (as defined in the Original Custodial Agreement), along with certain other documents specified herein, as the custodian for and bailee of the Participant or any assignees of the Participant in accordance with the terms and conditions thereof and (2) act as authenticating agent for the Participation Certificates (as defined in the Original Custodial Agreement)

    the Seller caused the Mortgage Loans (as defined in the Original Custodial Agreement) evidenced by a Participation Certificate (as defined in the Original Custodial Agreement) to back a Security (as defined in the Original Custodial Agreement), which the Participant or its designee may have received in substitution for the related Participation Certificate (as defined in the Original Custodial Agreement); and

    upon an assignment by the Participant to an assignee relating to the financing of the Participant’s purchase of Participation Certificates (as defined in the Original Custodial Agreement), the rights of the Participant under the Original Custodial Agreement shall have been exercisable solely by such assignee

  3. Legi — stay tuned. There is no valid note for crisis loans. Just an assignment of already declared (unsecured) default debt – before default ever occurred.

    Honestly, I don’t think Neil gets this either. You are just not exposed to internal documents — which differ from what you have – or what is presented to you or in courts. IT DIFFERS.

    No one paying attention.

    .

  4. As I’ve aforestated many times, and I also provided court cases that the bank or its assigns DO NOT have to own the note in order to foreclose. This is the reason homeowners lose their homes, not the rhetoric posted; they or their counsel made specious arguments like the author of this post suggests.

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