The Key is the Money Trail — Not So Much the “Break” in the Chain of Title

There is probably much more than just a break in the chain of title. In all probability, the underlying obligation that presumably supports the claimed debt, note and mortgage, was extinguished. If there is no debt then there can be no transfer of the debt — even if someone signs a document that says otherwise.
The law says that a transfer of a mortgage interest is a legal nullity if the document was not signed as part of a transaction in which the assignee paid value for the underlying obligation. Someone must have paid value for the debt, note, or mortgage and then received a transfer document from someone who owns the debt, note, or mortgage.
And it is crystal clear in all states that a transfer of a mortgage interest without a transfer of the debt is a legal nullity. A legal argument cannot overcome that simple legal fact. And documents sporting language implying otherwise are void because they are violative of statutes, common law precedent, and against public policy as passed the state legislature and signed into law by the Governor.
The transfer of ownership of the underlying obligation (the debt) must also occur with a transfer of ownership of the note. The only exception is that if you want to enforce the note, you must be in possession of the original note (not a copy or mechanical re-creation) AND you must have received authorization to enforce the note from someone who was entitled to enforce the note.
That authorizing “person” could have been a previous “holder,” but ultimately the authority for enforcement of the note can ONLY come from one “person,” to wit: the owner who paid value for the underlying obligation. It can’t come from anyone else and this is a factual and legal point that is missed by 99% of all lawyers and judges. But once you point it out to them, they will agree — particularly when you produce case authority in your jurisdiction.
So the trick is to trace back that authorization to find someone who owns the underlying obligation and who gave that authorization. You do that through timely filed discovery demands that are specifically related to the issues in the case. You will need to remind the judge that this is not just a foreclosure case. At the root of it is an attempt to collect a debt owed by the homeowner to whoever is claiming the right to collect it.
So if there is no debt in the form of a loan account receivable on the ledger of the company on whose behalf the foreclosure is sought, then there is no legal basis for enforcement.
Similarly, if there is such a loan account receivable and therefore the debt exists, then the claimant MUST be the person who has paid value to someone who owned the debt. Article 9 §203 of the Uniform Commercial Code adopted verbatim in all U.S. jurisdictions specifically and expressly sets forth a condition precedent that must be satisfied before anyone can seek enforcement, to wit: payment of value for the underlying debt.
The error committed by homeowners, lawyers, and judges is that it is presumed that an allegation of possession means there is actual possession of the original note. It is presumed that possession of the note means that the owner of the underlying obligation has given the authorization to enforce either directly or through some authorized agent (i.e., an agent authorized by the debt owner and nobody else).
Foreclosure mills will gleefully present authorization, but never from anyone authorized to give the authorization. So here again is an item in issue if you made it an issue in your answer and/or affirmative defenses. therefore you have every right to serve timely and well-phrased specific demands for discovery in the form of interrogatories, requests for admission, and especially requests to produce.
But you need to expect and to know that you will never get an answer. That is only valuable if you pursue it. If you drop it, you might as well concede the case.
If you don’t make something an issue, the court has no right to rule upon a late argument that presumes that the issue was raised. If it wasn’t raised then it is gone. Many homeowners and lawyers have chalked up such a ruling to bias, when in fact, the judge had no choice but to ignore arguments on issues that were not in play. And no issue is in play unless it is framed by the pleadings.
It is presumed that the execution of an assignment of mortgage or an endorsement to a note means that a business transaction exists in which there was the payment of value for the underlying obligation, the debt, the note or the mortgage.
But in fact, no such transaction exists because the “loan account” was or became a fictional or imaginary asset somewhat like the particles in physics that come in and out of existence. By the time it gets to enforcement, the “loan account” has long since disappeared, along with any legal authority to administer, collect or enforce it.
So the job of the homeowner or homeowner’s counsel is to challenge the foreclosure mill to produce evidence of an actual transaction rather than implication or presumption of a business transaction in the real world.
An assignment implies that the underlying obligation was bought and sold as part of a purchase transaction, which for legal purposes, can only mean that someone paid something to the owner in exchange for ownership of the asset.
Again discovery demands made timely and properly are the key to moving the needle from the conclusion being “inevitable” and against the homeowner to “questionable” and finally to “insufficient” to establish a prima facie claim.

Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.
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Neil F Garfield, MBA, JD, 74, 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. Summer — you explain the Crisis structure well. There were no warehouse lenders (or even Black Knight) before the WS takeover. These problems did not previously exist.
    There are no valid documents to be produced, and most agree on this (except the courts), but the question as to WHY this occurred with the crisis is not answered – other then regulators failed to do their job – and that is not enough. Why and how did the crisis differ from lending practice prior to the WS takeover? If there was no change – there was no crisis.

  2. The question is : that was first: an egg or a hen?

    First, it must be a DEBT to enforce and a LENDER who funded this debt and who established this account receivable – and who lawfully sold this debt and received his money and released their lien to a borrower – with a valid notice of SALE.

    None of it exist in present “lending” market.

    Impersonators who pose as Lenders are a toned windshield to the vehicle thought which Wall Street pass huge money from very questionable sources.

    The chain of supply look like this:

    Lenders: Secretive Investors.

    Borrowers: Wall Street Banks.

    Homebuyers – unpaid contractors/investors with negative consideration for their work, who apply for a job thinking that they borrow money.

    Black Knight, a pass-though vehicle to so-called “warehouse Lender”
    “Warehouse lender” , a pass-though vehicle to “Pretender Lender”

    “Pretender Lender” as an EMPLOYMENT recruit whose duty is to collect JOB applications (called applications for a loan) – to pass them to “wholesale Ledner” who pass enter them into Black Knight’s system MSP/Empower; who pass them to the Employer who use these applications as letters of credits from guarantors to issue certificates backed by these guarantors identities to be sold on the open market indefinitely.

    Thus, this was not a debt, but unpaid labor plus identity theft at enormous scale.

    Maybe it was a debt – but not home buyer debt. It was Wall Street Bankers debt – hopefully to legitimate investors from whom they borrowed clean money.

    With total secrecy and deregulation of banks, American housing market is a perfect place to launder any kind of funds – nobody would notice it.

    Money to homeowners were paid to provide Wall Street financial services – which are used as a base for sells of certificates to investors which were used as collateral to borrow money by Wall Street.

    This is employment law, not lending laws.

    The fact that Wall Street masqueraded unpaid work with a “debt” does not change the nature of this transaction – years of involuntary servitude by a person who mistakenly think they repay “debt”

    Since this original debt by Wall Street was repaid after employees (contractors) performed their jobs, here is no other debt to enforce.

    Yet, unpaid contractors continue to perform services as a base for securitization scheme, plus return their only consideration,

    So, where is the debt and where is lending? This is pure employment law, and unlawful withholding fair compensation for work.

  3. The private label market securitization collapsed for a reason and it was not for any cause by the people. There can be no securitization of charged-off default debt which occurred before any crisis loan claimed origination. It is not a “break” in title — title was gone before anyone signed on dotted line. People signed to reinstate a charged-off loan – without knowing it. “Phantom of the Wall Street” – signed our soul to the devil.

  4. Exactly the point that needs to be made by homeowners and lawyers along w basics of law and court. Scrolling down one judge’s record in Los Angeles county number of summary judgmts granted to banksters because homeowner was trying to sue for unlawful fc before there was a sale, can’t happen in non judicial CA. How could lawyers not know this?

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