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See Her Complaint Here: full
This LoanDepot case reveals how companies are “originating” loan documents without originating loans. If they were originating loans, nobody would allow or participate in any corporate culture that “approved” loan documentation and triggered some far off entity transferring money to a “closing agent” on a transction in which they had no idea whether they would ever make a profit.
In the same way, foreclosure proceedings are initiated by lawyers who do not have any client who owns an unpaid debt owed by the homeowner. The paperwork looks right, but nothing else makes sense because there is no loan and there might not be any debt — but in all events the debt (if it exists) is not owed to the claimant named by the lawyer.
PRACTICE NOTE: When you ask to see the accounting ledger on which the designated creditor shows the existence and status of the alleged loan, you can’t get it. Most people give up. But for those homeowners who pay their lawyers not to give up, they end up with a successful or favorable result. The inability to show the ledger undermines the ability to establish a prima facie case for Foreclosure. The attempt to substitute a payment history from a company claiming to be a “servicer,” can be defeated.
In a world where news is condensed into just a few words, fraudsters escape detection and their schemes remain unknown. Those schemes are intentionally complex and appear to be obtuse.
We know that since the early 2000’s Wall Street securities firms entered the marketplace with schemes to do what they do — sell securities. They had no intention of becoming lenders subject to regulation and they didn’t — and neither did the investors who bought their unsecured “Certificates” that promised nothing with any certainty.
And now again we see a company — LoanDepot, who is often cited as one of the world’s largest “lenders”— being accused of retaliation against an executive who refused to drink the kool-aid. She thought that the LoanDepot should be making real loans and not just acting as some sort of feeder for the securities firms on Wall Street.
Her internal reports and attempts to get the company into compliance from the inside were met with punishment.
Her complaint? That the company was “approving” loans without documentation or any history that could or would suggest that the proposed borrower had any ability to make payments. The law (TILA and state lending laws) and common sense require that every lender make that assessment. Her worry was that the company was violating the laws discussed in this article. And she didn’t want to be a part of breaking the law. Like any sane person she thought that was a bad thing.
The answer to the obvious question: LoanDepot was approving loan documentation and not underwriting any loans.
And so once again as I have repeatedly asked since 2006, why doesn’t anyone ask “why would any lender do that?” Every loan deal is about someone paying to rent money from someone who makes money on the rent (monthly payments). If it’s not just about that, there are legal disclosure requirements that must be met and enforced, according to law. Those requirements make it mandatory to disclose to the consumer what the rest of the deal is about.
The only reason why any “lender” would not inquire about the likelihood of receipt of payments is that the payments don’t matter — or that payments are not the full story. This fundamentally changes the elements of the deal that the homeowners thought they were entering and fundamentally breaches the statutory duties — as to (1) responsibility for viablity and (2) disclosure of compensation. Obviously they are making money some other way.
The law requries LENDERS to disclose such details because the Congress, 60 years ago, decided that homeowners and other borrowers should have reasonable access to information in which they could (a) make an informed choice or decision as to who they were doing business with and (b) understand the full monetary parameters of the deal instead of just part of it. Contrary to both law and common sense, this has never been enforced nor have consumers been allowed to enforce it in the courts — even with the help of a US Supreme Court decision (Jesinoski).
But the law does not contemplate enforcement against parties who only pretend to be lenders. Wall Street securities firms can honestly say “we are not lenders.” From their perspective they merely brokered three deals — (1) the loan of money to a sham conduit or intermediary from some off shore source (e.g. Credit Suisse) for example $1.2 billion, (2) sending funds to the closing agent in exchange for securing execution of “loan” documents, and (3) underwriting the sale of securities in the name of a trust which may or may not exist — for $2 Billion.
They never said they were selling loans, so the profit between what they actually paid to the closing agent on behalf of homeowners and what they received from the sale of securities did not need to be reported. That sale paid off the off shore loan” leaving the securities firm with full contractual control over the behavior of every player without ever investing a penny in any deal.
The rather obvious enforcement action against the securities firms can probably only be done by law-enforcement or a regulatory agency, neither of which seems inclined to do so. The securities firms entered the lending market place by stealth, violating virtually every law governing lending, servicing, debt collection or just honest and fair dealing.
But law-enforcement is only concerned with the small time players who use the same tactics against the players in the securitization market. That is called “bank fraud,” or “mortgage fraud.” But what are you call it when there is no actual victim? Since there is no risk of loss on the part of any player in the securitization scenario, there can be no victim.
see https://www.nytimes.com/2021/09/22/business/loandepot-lawsuit-Anthony-Hsieh.html
The simple answer is what I have been reporting since 2006, along with dozens of others. Wall Street securities firms, which control everything in nearly all loan transactions today, are concerned with the sale of securities. They are in the securities business but not in the business of lending and they devised a securities scheme that would enable them to penetrate the lending marketplace without ever becoming lenders. Most people either don’t understand that statement or fail to recognize its significance.
The bottom line is that every borrower is legally and morally entitled to have a counterparty who is in fact a lender. That is what enables the “meeting of the minds” elements for all enforceable contracts. There is no meeting of the minds in today’s lending marketplace and in fact in most other consumer transactions, especially online, there is no such meeting of the minds.
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We are coerced or tricked into giving consent to deals we know nothing about. We get only what we asked for (hopefully) but we are not informed in any clear language about the true parameters of the deal and how we might be risking things we know nothing about or how we might lose money, reputation, privacy, our wealth, homestead or lifestyle by clicking or signing “I Accept.”
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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
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Yes you DO need a lawyer.
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If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Filed under: foreclosure |
This is all correct. But there is more. The reason there is no accounting — and “loans” that are not funded is simple. These claimed “loans’ came from GSEs. The “BANK” servicers to GSEs – would report in default with fees to GSEs — but never report same to borrowers. Borrowers did not have a clue. So when borrower gets claimed “refi” or claimed “purchase” — all it is – is reinstatement of already declared internal default to GSEs. Thus, the homeowner gets – added debt to reinstated default debt. NO FUNDING – nothing paid off by homeowner. TILA Fraud. This is simple – I have no idea why no one brings forward. Simple to bring forward — get the accounting for what was claimed to be paid off BY YOU – by bogus “refi” or purchase. You will find NOTHING. You will find – you were reported in internal default. No Notice necessary – no according by them. NO FUNDING. It is outrageous. It is a cover-up. It is fraud upon the court. It is fraud upon you. And, no one cares. Why? Financial system WILL collapse. Stock market will fall — and we will have 1929 all over again. However – we CANNOT be the scapegoats. Let the chips (and stocks) fall as they may. IT IS OUTRAGEOUS what has been done. And it is all right there – in accounting (or lack thereof) – to show this. DEMAND accounting.