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All successful defenses to foreclosure attempts basically come down to one fact: When tested, the claim cannot be supported because it is untrue.

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I see in threads of emails that are shared with me considerable discussion and debate over whether the “loan” was sold. The parties who have trouble even conceiving of a scenario in which the original homeowner transaction was not sold are those who are looking at documents. In securitization today, virtually NONE of the documents are real, true, or authentic.

But it is true that if you’re willing to take the risk of jail or civil penalties, you can create fake documents and use them in court. If the documents conform to custom and practice and follow some statute as to form, then they are initially presumed to be true and valid. And if the homeowner fails to contest it, there will be a judgment in favor of the bad actor. Case over. Foreclosure judgment entered or sale approved, then the auction and sale of the property followed by eviction.

What I am telling you in this blog, my lectures, and radio shows is that none of that means foreclosure is inevitable. The fact that a homeowner stops making scheduled payments is not a default unless the creditor declares it as a default — not when some company claiming to be a servicer declares it. But if the homeowner admits being in default then he/she is admitting that the right creditor is making the right claim.

This issue arises because of confusion as to when and whether to use the fabricated documents for anything. If you don’t believe a single word on any document, you are left with the obligation, which might exist, and a claimant who either did or did not pay for it. No loan was ever sold because that was the point of securitization. If the loan was sold then they could have only sold it once. But by selling data ABOUT the loan they could sell it as many times as they wanted.

The lawyers and other parties that participate in illegal foreclosure schemes are depending upon your lack of knowledge as to what constitutes a sale of the loan. First they want you to assume that a loan account exists, which in the context of securitization, it does not. Second, they want you to think that since money might have been paid to somebody that it must have been a purchase of the obligation by the party named in the fake documents.

When tested, this assumption fails. If a sale had occurred there would be a record of payment of money from Party A to Party B. that record would be both a money trail (canceled checks, wire transfer receipts, etc) and accounting entries on the books of each company. Even at origination in most cases, the money trail that is represented to the homeowner does not exist. And all attempts to see the money trail and to see the accounting entries will be met with a refusal to comply with the request regardless of the consequences to the lawyer or other parties.

All successful defenses to foreclosure attempts basically come down to one fact: When tested, the claim cannot be supported because it is untrue.

The essence of what we call “securitization” is actually breaking up the homeowner transaction into atomized legal pieces. The investment bank —acting through various intermediaries — is actually purchasing the right to make a claim against the homeowner even though it is not a creditor. It’s not a servicing right or even a legitimate claim. The homeowner agrees because the homeowner never receives any information about the structure of his/her transaction and thus never has any opportunity to ability to assess the deal or bargain for better terms or go to some other source of capital. The inserted parties are merely renting out their names to the investment bank in exchange for a fee. The originator, the servicer in whose name payment histories are published, the REMIC trustee, the trust, are all fictitious or sham conduits for the scheme of the investment banker. 

The investment bank is selling information or data about the transaction with the homeowner and can sell as many pieces of information as the market will bear. Substantively the entire transaction with the homeowner is paid off many times over but never recorded as such. But the law requires any claimant in any lawsuit to have suffered a loss due to a breach of duty by the homeowner. There is no such party because all parties have been paid. The fact that it was not recorded as such or disclosed as such merely means that the investment bank succeeded in maintaining an illusion — not that the loan was sold or that anyone owns it. 

There is not a single REMIC trust case in which a loss to any owner of a loan account or other obligation due from a homeowner can be traced to any action or inaction by the homeowner. None of them expect or need any action from the homeowner. they just need to sell more securities and in order to do that, they need more signatures on more documents. And that is why the use of attorneys at real estate closings has been discouraged in subtle and not so subtle ways. Some sharp attorney might have caused trouble when his questions were not answered.

PURCHASE MY TWO HOUR WEBINAR ON DEMAND ON EXAMINATION AND CHALLENGE OF ASSIGNMENTS OF MORTGAGE — CLICK HERE

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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.
• Yes you DO need a lawyer.
• If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Filed under: foreclosure |