The goal of fake securitization is to pretend that securitization occurred and then to sell securities that were NOT ownership interests in any loan. In order to do that, there needs to be no owner who even could sell the asset (i.e., the “loan”) — lest someone be accused of selling the same asset over and over again. That is avoided easily by (a) not having the asset to sell and (b) not selling it.
Most people refrain from such an attack because to them, the existence of the debt is obvious. They don’t want to appear stupid. And that is why they lose.
I admit I have contributed to the problem by identifying problems with the paperwork. It may be that I was not sufficiently articulating the correct strategy so let this article be my apology and clarification. It is easy to tear apart the paperwork, attack the signature block on a fake document, and submit a FOIA (Freedom of Information Act) request for documents. But all that does is give oxygen to a nonexistent claim, to wit: that a loan account exists on the accounting ledger of some person or company.
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I don’t think the FOIA request is necessary even though it might prove helpful in litigation. Because of the complex way that these schemes are presented, it is easy to go down a rabbit hole and forget what you really want. You want to push them until you either win the case or settle on terms that are so favorable that you no longer wish to litigate. There is only one way to accomplish that goal — by successfully attacking the existence, ownership, and authority over the alleged debt. If you focus on the ownership and authority over the debt you are tacitly admitting the existence of the debt and thereby influencing the judge to find a way to grant the foreclosure.
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If the debt doesn’t exist then there can be no ownership and ownership is what is required to administer, enforce and collect. Only an owner of an asset can be the ultimate source of a grant of authority to service or act as an attorney in fact under a power of attorney or a servicing agreement. All those documents are designed to create the illusion that the debt exists even though nobody has a loan account on their books.
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Without an owner of the debt, there is nobody who can grant authority to enforce. Most people forget that possession of a note is not enough. There must be a right to enforce the note which is presumed to be enforcement of the underlying obligation. The right to enforce must ultimately be derived from the owner of the underlying obligation — which is a condition precedent to filing any foreclosure under the universal adoption of Article 9 §203 of the Uniform Commercial Code. If you remove their ability to prove the existence of underlying obligation there is no way they can win, even in today’s courts.
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You don’t need to prove anything. As soon as homeowners or their lawyers go down that road they are doomed. You need to expose them by asking questions they cannot answer and do that under circumstances where they are legally required to answer the questions, like discovery in court during a legal proceeding. After they repeatedly dodge those questions, you get to the holy grail of litigation: a negative inference — in this case, the presumption that the loan account does not exist and therefore cannot be enforced. It’s counterintuitive but it is true.
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Everything else is a rabbit hole. That’s why most lawyers and homeowners lose. They attack the paperwork which actually gives oxygen to fake, fabricated documents, and tacitly admit their relevance and materiality. Proving various insufficiencies of the possession or existence of the note does not undermine or invalidate the existence of the debt. The note is not the debt and never has been. It is evidence of an alleged debt and a vehicle for enforcement that is acknowledged by law. Most people refrain from such an attack because to them, the existence of the debt is obvious. They don’t want to appear stupid. And that is why they lose.
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But I am telling you that I am completely certain that there is no debt. The payment was not a loan. It was a temporary advance against services rendered by the homeowner. The reason I know that because I know that there is no accounting ledger of any person or company on which debits and credits are posted to an account receivable bearing your name.
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In 15 years of testing this strategy in thousands of cases, there has not been a single case of anyone ever producing the original ledger that is carried forward from one lender to successors showing the establishment of the debt, debits and credits to the account, with dates and references to source materials (proof of payment or proof of receipt of payment).
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Without an account establishing the debt and posting debits and credits to that account (reducing or increasing the balance of that account as an asset of the company claiming the loan as an asset) there is no debt. That is the “miracle” of fake “securitization.” What we see instead is a report produced but not generated by a third party claiming to be a servicer for payments that were directed to, but not received by, the company posing as servicer. That report, besides being rank hearsay on hearsay, is merely a payment history.
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There is a difference between a payment history report and a general ledger. At best, the payment history is merely a compilation report of data that occurred after the homeowner into the transaction and never when the transaction was originated or acquired. The accounting ledger or general ledger shows ALL entries including the first entry that started the account receivable that is carried as an asset. One is at best a partially accurate statement of partial results and the other tells you the real balance of a real creditor owning a real debt receivable account.
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Interestingly enough the designated witness and the source for all answers to discovery comes from that third party who produces but does not compile reports and has no role in making entries of receipts and disbursements because they don’t actually receive the money nor do they pay anything except to lawyers and other players involved in the foreclosure scam. A major oversight by most — but not all — litigators is the lack of regard for or confrontation of the lack of any appearance by the named Plaintiff or beneficiary. They never appear in court, at mediation or even on any modification document.
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The logic and theory behind securitization is simple, just as it is in every case where securities are issued and sold. The goal is to spread risk amongst as many people as possible so that if the investment asset goes bad, nobody loses everything they have in this world. It depends entirely upon the sale of pro-rata ownership interests in an asset. The buyers are called investors. No such sale occurred in any case where residential transactions were conducted with homeowners on behalf of fake “Securitization” schemes.
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The goal of fake securitization is to pretend that securitization occurred and then to sell securities that were NOT ownership interests in any loan. In order to do that, there needs to be no owner who even could sell the asset (i.e., the “loan”) — lest someone be accused of selling the same asset over and over again. That is avoided easily by (a) not having the asset to sell and (b) not selling it.
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Instead, brokers avoided that liability by selling bets on data reported at the sole discretion of the issuing stockbroker who was doing business under the name of a nonexistent trust. The stockbroker pretended to be the underwriter implying that it was an objective third party for the issuance of securities by the fake trust entity.
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By selling securities whose value depends (derives from) upon data relating to assets not owned by anyone in the “Securitization” scheme, the stockbrokers had created a void in which unlimited amounts of such “data securities” could be sold — and none of it was regulated because of the exemptions that were passed in 1998-1999 under false pretenses. And that is how they made as much as $50 for each dollar transacted with homeowners.
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Wall Street has always wanted to make everyone else’s money their own money. Up until the era of fake securitization they were forced to take some percentage or piece of a transaction between two principals. With fake securitization, they succeeded in getting everyone to erroneously believe that was still happening. But the reality is that nearly all of the revenue and profit was kept by the brokers and the investors and homeowners be damned.
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Thus instead of just taking a hefty profit between the amount invested in the initial batch of securities (certificates) and the amount actually used for origination or acquisition of “loans” they were able to turn what should have been a fraction of the money generated into geometric multiples of the amount invested by investors and homeowners into a concealed scheme that danced on the edge of the definition of a Ponzi Scheme.
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This shift was more profound than anything Wall Street has ever done. They had transformed their role from broker (agent) to principal cloaked as an intermediary that was making a market in legitimate securities that were apparently exempt from regulation. They did it by lying about everything they had done and were doing. And because the picture they presented was so complex, most people naively went to the robbers for an explanation for what happened and believed them when they said they had nothing wrong. And they have kept doing it because nobody is willing to acknowledge that the Emporer has no clothes. they have known it for over a decade but still the regulators do nothing.
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But it is only the people who are persistently skeptical of everything from beginning to end who are able to defeat that part of the plan that includes administration, collection and enforcement of the nonexistent debt account against homeowners. The key element is the existence of the debt as the asset of some person or company in accordance with Generally Accepted Accounting Principles. Without that, there can be no ownership of something that does not exist and without ownership, there can be no source of a grant of authority to administer, collect or enforce a debt account that does not exist.
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The huge caveat here is that failure to actively and persistently contest the basis of the claim is and will always be fatal in any litigation.
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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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We don’t hear much about credit card debt collection anymore because banks tightened credit after the mortgage explosion. But credit card debt helped contribute to the mortgage crisis. In the old days, if you missed a few credit card payments, it was not usually a big deal for the banks to let you make up the payments. But in the early 2000’s, banks colluded to insert arbitration agreements into the credit cards. Arbitration was held outside courts, and the arbitrator would rule for the banks 98% of the time. Not only did the borrower have to pay all the money up front, but also large attorney fees. The goal was to get the borrower to refinance. The prize was never the credit card win, but the “refinance” itself. If a homeowner had any equity – they would be sent to arbitration. Yet, it could easily be traced that credit card defaults are usually charged-off after 180 days, and sold to debt buyers. Some of you may recall the names of the big credit card collectors who were also often purchasers of the debt AND distressed mortgages. Arbitration was temporarily shut down when the Minnesota AG alleged collusion between the arbitration forum itself and the debt buyers. There is no doubt that arbitration contributed to the crisis mortgages. But the point is – borrowers knew their creditor with credit cards. They knew the debt was charged off and sold – unless the arbitration forum and debt buyers concealed. With the crisis mortgages, the creditor is concealed. The same events happen, but no one is told. That is why there are no accounting ledgers. However, an accounting ledger had to be started somewhere, and that is the difficult part to find. Yet it is obvious that all loans were sold to GSEs before private label (non- compliant) claimed securitization. In valid securitization, defaults are removed from trusts, and placed back to the bank. But the government could not enforce that because there was no accounting balance sheet to put anything back. Hence the bail out. Courts don’t care who owns collection rights to charged-off debt, as long as that party is before them (laws like FDCPA are too short in SOL, and are broadly interpreted – this is Congress’s fault). They still see the borrower as owing debt, and saying you don’t owe any debt simply gets the court angry. What the courts don’t understand is that U.S. Bank, trustee for BS trust is not the creditor, and never was the creditor. If the claimed REMIC is not complaint – then neither is the “note.” The private label trusts were nothing more than a shell or fake vehicle to conceal the true path of charged-off debt – which had to have begun at the GSEs (charged off debt is not an asset on accounting balance sheet — it is accounted for as income by the debt buyer). If one is in bankruptcy, and the true creditor is not divulged, the debt is never discharged — it remains forever. Though it is precluded from being reported on credit reports, internally it remains of record and will destroy you permanently. So — it is important to know the true creditor, and that is not happening in courts. Representation is critical, and it is not begin done. I suspect that BIden/Harris want to cancel student debt because they are aware – no one knows the true creditor if a student misses payments. I know several professionals who tried to payoff student debt – years after missing payments — but could not locate the true creditor. If you pay the wrong creditor, trust me, you are doomed. Courts are contributing to the wrong creditor being paid.
Wall Street’s Plantation “Securitization” is the most cynical and profitable form of slavery ever existed – trade and sell identities of unpaid contractors (who think they are borrowers” ) on indefinite basis and steal their homes and money via “debt collection” and through the Court. Use borrowers’ unpaid services as guarantors to get low-cost financing money for Wall Street Banks- and these money pass under draconian interest as a “debt” . Garnish paychecks to get more revenue. Why the Government calls is “Democracy” and “capitalism”?.
Ginnie Mae has NO IDEA about loans they “guarantee. I have my own experience and written communication from Ginnie Mae, VA, HUD and two FOIA officers from HUD.
ALL their DATA is based on information provided to them by Black Knight, Inc. via MSP.
ALL public offices and all others use Black Knight, Inc.’s system to SEE something which supposedly going on with “loan”
But if you ask for material proof that the “loan” actually exists in Ginnie Mae’s system – they will not able to respond.
As of Ginnie Mae’s losses. GSEs agreed to cover for Wall Street Fraud because they promised to redeem them if Investors will demand their money. We all see it – Federal Reserve “purchased” trillions of GSEs “mortgage backed securities”
So, if you try to find your “loan” with GSEs – it never been there. It was merely a hologram image of some data on Black Knight’s MSP.
If you need to find more information about your “loan” – go to Cede & co, they are beneficiaries of ALL data about ALL fake “loans”
Credit Card “debt” is no different. This is the same scam, as mortgages, student loans and car loans
I would like to see someone come forward here — who wants to take on as a whole. Not just for individuals – but as a whole. It can be done. Fear that individual help, like modifications, conceals the true nature of the crime.
meant – no securitzation- “Without being compliant” — Sorry. Get very angry and type fast.
It should be the first attack that the “CRISIS” trusts are not compliant. There can be no trusts without them being compliant. There can be no securitization with the “trusts” being compliant. This has been ignored and is a major error. This is easily traced by documents filed – whether valid or not – those documents EXIST. It should be second attack as to representation. I see nothing of that in case law when is blatant that representation is false. It is time to take a step back, far back, and review documents. Prior documents to last transaction, and document filed – valid or not. And Invalidity of REMICS can be easily shown. Once that is done – the writing is on the wall. I just see no one doing it. And, no — default is not just “default.” Not if unsecuritized. And, these REMICs were NOT valid securitizations. Don’t go on presumption they are valid. They are not, and there is proof. So – default — maybe — but not on a securitized loan. Not a MORTGAGE DEFAULT – VERY DIFFERENT BIG DIFFERENCE. UNSECURITIZED. No more than a credit card account. BIG DIFFERENCE. Frankly, get a little perturbed that this has not been done or taken forward, and by case law, by anyone astute enough to know.
Neil,
I recently discovered that none of the credit reporting agencies show that I have an existing mortgage, yet these frauds continue to claim that they own my mortgage and note.
Coincidence, or proof that nobody purchase or owns the debt?
Thank you for being awesome!
Neil what you are describing is all Washington Mutual Bank Ginnie Mae pooled loan! If you want to handle my case it leads to several hundred millions and that leads to several billions for total losses of the Ginnie Mae system!