Those letters from the lawyer for the “servicer”: PHH

It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so — nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

In fact it is not true that PHH will receive any money. They won’t and they don’t. All payments are  directed through lockbox contracts and FINTECH companies into accounts that may bear the name of a company claiming to be a serrvicer but which are owned by someone else.

This is why I keep successfully annoying opposing counsel about the payment history they wish to introduce as a business record exception to the rule against the use of hearsay evidence.

Since none of the data was entered by anyone employed by the company that is claimed to be the servicer, the payment history is neither a business record that is an exception to the rule against hearsay, nor an acceptable substitute for what has always been required: the accounting ledger showing the history (cradle to grave) of the loan account receivable. In fact, the payment history is not even a partially acceptable substitute for that ledger because it does not reflect payments to creditors.

PHH, Ocwen and Reverse Mortgage Solutions (among others) are all part of the same organization. In a recent dialogue between my client and the lawyer for PHH, he stated that payment to PHH will cause the lien to be released. This got me started thinking about the way he worded that. Normally the lawyer would write something like “Payment to PHH, as agent for XYZ Creditor, will satisfy the debt, note and mortgage. Upon receipt of such payment,m the lien will be released.”

Note that this was a representation from the lawyer not PHH and not any creditor. And the lawyer is protected by a form of immunity as long as he is not intentionally misstating the facts knowing that they’re false. If PHH said that, it could be the basis for a fraud action.  It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

So this is what I said in a comment to the receipt of an email displaying the comments of the lawyer claiming to represent “somebody” which we presume is a claim to represent PHH which in turn is a claim to represent some company claiming to be a creditor merely because they have some paperwork — and not because they ever entered into any purchase and sale transaction in which they bought the underlying obligation, the legal debt, note or mortgage:


Of course, what is interesting is that the lawyer is saying that payment to PHH will cause the lien to be released. But it doesn’t say who will release it. It’s leaving the rest to your imagination. Any lien release under this scenario would be executed by a person working for a company that has no legal authority to sign it.


The way it is set up, the person is authorized by the company he works for, but the company lacks the authority to authorize him to sign it. The company, in turn, claims authority by virtue of some contract or document in which the counterparty grants the company the authority. But the grantor also lacks authority.

The idea here is to get you to take your eye off the ball. The ball is always the underlying obligation. It is the legal owner of the obligation (i.e., the one who purchased it for value) who has the sole authority to grant powers to anyone else over the administration, collection, and enforcement of the underlying obligation.
It is only when you take your eye off the ball that these companies get away with claiming the status of “holder” of the note and owner of the mortgage. The holder of the note is defined as a party who has physical possession of the note (or the right to physical possession of the note) together with the authority to enforce it.
These players have been successfully leveraging the idea that physical possession of the promissory note, or the right to physical possession of the promissory note is all that they need in order to establish the legal presumption that they have the authority to enforce it. That has never been true. But in the absence of a persistent and aggressive challenge from the alleged debtor, these parties have been able to steamroll over all weak objections.
Further, leveraging one presumption into another, they have been successful in raising the additional presumption that transfer of the note to a “holder” is the legal equivalent of transferring legal title to the underlying obligation, thus satisfying the requirement for enforcement that is contained in Article 9–203 of the Uniform Commercial Code. None of that is true; but all of it seems to be true.
The bottom line is that they know there is no loan account receivable and therefore no legal owner of the underlying obligation. They have done that intentionally for the benefit of the investment banks that set up this scheme. But it has not been difficult for Wall Street to convince the rest of the world that all of these transactions are, in substance, just what they appear to be. Getting the courts, law enforcement, regulators, and even homeowners and their lawyers to look beyond the appearance has been the principal impediment to defeating the scheme.

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, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.

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9 Responses

  1. Oh absolutely Hammertime as to recorded docs. I am outraged on this. Mickey Mouse can file anything. And, you know — the courts would buy that Mickey Mouse is real!!!!!! Good for you Hammer!!!!

  2. @Charles Reed, @Anon good points. Another myth that sub prime caused the make believe $13 trillion crash as revealed by Sen Sanders report. Any blog shows victims from any part of the country and Inc me level. Also agree Anon lots of legal mumbo jumbo but key concepts could help if not us, the current wave but we definitely keep pushing all options. In LA still fighting local govt on accepting any recorded doc as “perfected title” against the national mortgage settlement and state law, the homeowner bill of rights so UCC adds another layer.

    In CA can push for $330 mil legal aid being denied once again and force policy makers rather than going thru court trap to be accountable for this common sense corruption or they themselves be charged.

  3. I know in the cases we created mortgage loans we funded the loans as we would wire or take a check from the bank to the title company. I don’t know how some a home is purchased from another and money is not transferring hands! Everybody is signing Notes and whether it Prime or Subprime the lenders know the risk. Nobody letting a bad credit person take control of a house that listed in the county records as a purchase and not have a lien attached to it, obligating the people to repayment!

  4. Interesting Hammertime. But nothing was “lent.” Nothing was funded. All we have is shuffling of “collection rights” – established BEFORE anything was even signed. SWAPPING. Think about it – -do you really think Wall Street was “lending” to people with compromised credit, and low income, and high debt to income? Of course not. Of course they did not. No security interests ever perfected as nothing was accounted for or lent or funded. The rest is the weeds that the foreclosure attorneys love to convey to courts.

  5. Concept of attachment applies?–Your-Security-Interest-isnt-Perfect-Without-it-05-01-2011

    “However, before a security interest can be “perfected” in such a manner that provides priority against other creditors, it must first be enforceable against the actual debtor/borrower/lessee that is granting the security interest (each of which is referred to for convenience in this edition of Dispatches as, a “Debtor”).[1] This concept is often referred to as “attachment” under Article 9. Attachment is essentially the moment when a security interest becomes enforceable against a Debtor. For a security interest to attach, the following events must have occurred: (A) value must have been given by the Secured Party; (B) the Debtor must have rights in the collateral; and (C) the Secured Party must have been granted a security interest in the collateral. “

  6. VA loans placed into a Ginnie Mae MBS all are done so by the owner of the loan debt who are the issuers of the bank owned Ginnie Mae MBS and to prevent a run off of these loans, the requirement is UCC3 is conducted and the blank endorsed Notes are relinquished to Ginnie Mae like underlying collateral.

    Now Wells Fargo Bank was the servicer for all Washington Mutual Bank’s (WAMU) Ginnie Mae pooled loans (1.3 million Gov Backed loans) starting in Jul 2006. However, Sept 25, 2008, the OTS seized WAMU and the FDIC declared it a “failed”! Ginnie is in possession of all those blank Notes physically which makes them owner of the Notes but not the debt as they are not authorized by US Congress to mortgage loan debt.

    So Wells Fargo got an outside law firm in Kozeny & McCubbin to prepare assignment of Deed of Trust as if Wells purchased the debt in 2009 when in fact WAMU has stop existing and had no ability to claim a interest in the debt. Starting Sept 26, 2008, no longer could a payment be collected nor a payout be given as WAMU is dead and Ginnie having not purchased any debt has no claim to the debt.

    Wells admits to not owning the debt and says it was working for Ginnie Mae and did in fact transferred all the proceeds form the foreclosure sale plus the VA Guaranty insurance claim to Ginnie Mae minus servicing fees!

    What gets people confused is that Ginnie says the lenders have to buy back the loans to get them release but there never a purchase of any loans, however, what being paid back is not a debt of the homeowners but the debt incurred by the lender of the money draws they take against the securities against the loan value. This debt cannot be transferred to the homeowners who are not involved in the financial transaction!

  7. Yeap, been there saw it. Someone hired shady lawyers in California who lied me about representing “their client” Perl Mortgage and about everything in my transaction

    As soon as I asked for Proof of Authority to represent “their client” and the name of this “client”‘s agent who hired them – lawyers disappeared.

    Cut off the foundation for Wall Street Banks – Lawyers, Recorders, Title Insurers, lower level liars – and they will have nothing to hold on.

  8. Ditto StillFighting. And, may I add that PHH is, by filed documents, a SUBSERVICER (hired help) – whether those docs are true or not. Thus, for example, say a mortgage is recorded as assigned to B.S. Bank for B,S. trust — then according to County records, only B.S. Bank may release the lien. The note is irrelevant. Therefore, there must be valid authority from B.S. Bank to New Residential Mortgage (NRM) (who is claims Master Servicer Rights (MSR) by documents) and by NRM to Ocwen as hired help and then from Ocwen to PHH as the hired help. And, don’t forget Master Servicer for stated BS trust is likely originally NOT Ocwen. So there has to be another POA from HLSS (Ocwen affiliate) to NRM – who claims to have purchased MSR from HLSS. Any POA that states any of this would be stating that B.S. Bank is distributing to SECURITY investors in BS Trust. That never happens. Remember – derivatives are NOT securities – they are contracts. So they can’t do that because would be security fraud. So how many docs must they fabricate???? Lien release is done on the MORTGAGE only – not the note. If these fakes docs are filed – title is destroyed forever. Unmarketable title. But we already have that all over the country — so no one cares.

  9. Wow Neil… you are on a roll with blogs involving the fraudsters in my case! PHH, Wilmington Savings Fund Society FSB d/b/a Christiana Trust, and more.
    If the trend continues, you will soon have a story about Selene Finance and whatever web of criminal lies they are weaving around the country.
    Thank you for all that you do for us!

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