Homeowners Win Only When They Litigate Properly — Not Because They Are Right

There is a difference between securitization, on the one hand, and securitization of debt, on the other. They are not the same thing. The entire scheme that is currently advertised or represented as securitization of debt is false.

Securitization refers to the creation, issuance, sale and trading of securities. There is no doubt that securities were issued, although I take issue with the notion that those securities were not subject to regulation by the SEC. But anyone on Wall Street will admit that those securities are not mortgage-backed securities, and they are not asset-backed securities, and they are not shares of ownership of any obligation or liability of any homeowner.

Securitization of debt specifically refers to breaking up ownership of obligations and selling shares to investors.

With respect to transactions with homeowners, there can be no doubt that securitization of debt has never occurred since it’s inception in the mid-1990s. But there is also no doubt that almost everyone, including the homeowners and their attorneys, believes that securitization of debt did in fact occur.

This means that the underlying obligation, legal debt, loan account receivable, note and mortgage were never sold individually or as a group. It means that any claim of authority to administer (“service”), collect or enforce any purported liability of the homeowner that is based upon the sale of the laibility from one party to another is false. And that means that none of such parties possess any legal claim to do anything.

I recently received a question regarding notarization. The questioner, “summer chic,” asked why there appears to be no U.S. requirement that a notary public maintain a journal or logbook for notarization when that requirement is enforced practically everywhere else. The simple answer is that there used to be a requirement like that, but there is no such requirement now. And the reason is that the banks have successfully undermined the ability to produce evidence that the notary seal and signature were not affixed by the notary or even in the same geographical area as where the notary resides and works.

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Like the Trustees, “servicers” and everyone else, they are collecting royalties for use of their name, signature and seal. They don’t actually do anything. The person whose signature is being affirmed as being signed by the person named in the instrument does NOT appear in front of any live person and does not produce proof of their identity.

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So this enables the banks, acting through multiple layers of intermediaries including foreclosure lawyers, to fabricate documents that appear to be self-authenticating and valid (presumptively) despite the fact that the document memorializes nonexistent events and nonexistent people in connection with nonexistent transactions. Such documents are completely false, fabricated, forged, and do not survive any test of credibility or authenticity when litigated properly. By doing this the banks were able to sell the illusion of each initial transaction with homeowners to multiple buyers (investors) multiple times  — something that would put them in prison for a long time if they were actually selling the debt.

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This was all changed when the banks started their business plan. All of the basic notions of credible evidence concerning real events and real people needed to be undermined in order for the plan to succeed.

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Having changed the norms, rules and practices of several industries, they have created a presumption of validity for behavior that is patently illegal, if it was disclosed. But because of the presumption, there is a heavy burden on the homeowner to go the extra mile.

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And it requires a clever trial attorney to realize that the object is not to prove a point but rather to simply undermine the ability of the opposition to corroborate their claim. When they fail to answer questions or demands that they are legally required to answer, it is up to the homeowner to aggressively litigate the issue of their failure to respond.

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That litigation changes the case and the narrative from bank versus deadbeat homeowner to judge versus uncooperative foreclosure lawyer. Once you have completed changing the narrative, there is an 85% chance of a favorable judgment for the homeowner.

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Every favorable decision for the homeowner that I have ever received for review or obtained on my own is marked by that characteristic — the refusal or inability of the foreclosure lawyer to comply with rules of court and especially court orders compelling compliance. Very few of those cases have ever been appealed by the banks. This is a nuanced strategy of the banks. By not raising the case to the level of an appeal, they minimize the risk of creating legal precedent against they are full presentation of securitization of debt.

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So the Defense of Foreclosure cases depends upon factors and nuances that are completely unknown to most homeowners. They then go into court believing that they know what they’re doing, which is exactly what the banks want.
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Some people feel guilty about using the strategies and tactics against the banks. But the banks feel no guilt whatsoever and using false fabricated documents against those same people.
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The answer is pretty simple. Since homeowners were tricked into enabling the launch of a securities scheme, they should have been compensated for doing so, and they were entitled to their share of the revenue and profit. In fact, I think they received it in the form of a disguised loan transaction. The mistake, that was entirely intended by the banks and based entirely on concealment of the true nature of the transaction with the homeowner, is that the homeowner was convinced that he or she was receiving a loan instead of a simple payment for services rendered in connection with the launching of the securities scheme.
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If anyone actually was successful in forcing the players to produce the internal records, they would see (as I have seen) that these statements are exactly what is described in accounting ledger’s, books, and records of all the players involved in the origination and subsequent treatment of transactions and correspondence with homeowners.
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I think the payment they received was not a loan simply because it was never recorded as a loan account receivable on the accounting ledgers of any company, nor was it ever purchased. The objective of the banks was to sell securities.
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They paid homeowners to execute documents creating the illusion of a loan transaction but never disclose that there was no lender, creditor, loan account receivable liability for compliance with lending and servicing laws.
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My opinion is that each homeowner received a fair share of that revenue and profits derived from the sale of securities and exchange for lending their name, financial reputation, signature, and consent.
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The execution of the note and mortgage, while necessary to create the illusion of a loan transaction — and therefore justify the sale of securities based upon the existence (but not the ownership of homeowner transactions), did not memorialize any loan transaction and was not supported by any consideration.
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There is no obligation or debt owed by the homeowners who issued any promise to pay because there was no consideration paid to the homeowner to fulfill that promise. The only consideration received by the homeowner was for services, not for a loan — even though the homeowner clearly believed otherwise.
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The fact that the homeowner was successfully deceived is not a legal or equitable reason to hold homeowners to a contract that was concealed from them to wit: the promise to treat the transaction as though it was a loan even though it wasn’t. The promise to pay was based upon the existence of a lender, loan account receivable, and compliance with all applicable lending and servicing statutes —- something that never occurred.
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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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One Response

  1. Even better – in order to eliminate too many witnesses – those robo-signers whose names appear on Assignments as “Vice Presidents” are most likely a fiction (non-existing persons) even though here might a person with the same name – but who has no relationship to any Assignments or companies who prepare them

    As well as Notaries themselves. Anyone can get a Notary seal by applying online and taking online courses.

    Any fabricated ID can be downloaded and any identity can be stolen to get a Notary Seal for a non-existing “Notary”

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