Undermining Justice From Within: How Government is Stifling the Ability of Homeowners, Lawyers and Even Judges from Protecting Basic Civil Rights Under Our Constitution

The only thing Judges have heard from all corners of the body politic is that the transactions with homeowners were in fact loans — frequently admitted by homeowners who are equally ignorant — and that any other legal approach (to foreclosures) would give an undeserved windfall to homeowners — which would somehow undermine the entire financial and social system of our country.
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So the idea is that a benefit conferred to homeowners would be a windfall. It is presented, argued, and accepted without one scintilla of any evidence that the facts on the ground would support that premise. I only argue that the premise should be tested and that neither judges nor lawyers should be subject to attack from appellate or Bar discipline or FTC actions that result in orders preventing lawyers from continuing any practice of law or that prevent them from accepting engagement for foreclosure defense.
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You should remember that when all of this started back in the early 2000s nobody mentioned any trusts and the foreclosure lawyers denied that the trusts existed or were relevant. They were telling the truth. But that too was a trap. Some of us, including myself, fell into that trap at least partially. Back in those days, the foreclosures were initiated in the name of companies that were claimed to be servicers or even MERS until that went down in flames.
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The courts struck down attempts to use names or companies that were not described as owners of the underlying obligation owed by the homeowner. So the investment banks tried a different tack. This involved creating a false national narrative by repetition of false facts and the continual use of false labels on documents and in misleading legal arguments in court — all covered by litigation immunity. There never was anything “straightforward” about the foreclosure process in this context despite that proclamation from the 3rd DCA in Florida on November 24.
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We never got to the question of whether the companies that were claimed to be servicers were actually processing, depositing, recording and disbursing funds. That was and still is assumed despite ample evidence in the public domain that third-party FINTECH companies perform all those functions — and NOT at the behest of the company named as “servicer.”
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Then it evolved into an “admission” that homeowners and their lawyers were correct — there were trusts that claimed ownership of the “loans” and so they started suing in the name of a trustee for a trust (regardless of whether it existed or not). But the fact remains that the trust names were vehicles for the sale of securities. They were never used as the recipient or owner of the underlying obligation, legal debt, note, or mortgage. That never happened because no loan account was ever sold.
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We never got to the question of whether any loan account was transferred into the trust by conveyance to the trustee which was then administered by the trustee because all of that was presumed. Woe to the homeowner or lawyer who said he or she wanted to test that proposition.
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At the urging of foreclosure lawyers who are increasingly uncomfortable pretending that the trusts actually exist and that the trustee manages the active affairs of anything, the names are evolving again in “resecuritizations” to a subtle semantic change — from “trust” to “legal title trustee.” A legal title trustee comes into existence when a document names them as the transferee of some property interest — regardless of whether the “trustee” wants it or not.
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This is where discovery becomes important — because there is always a trust agreement in which the trustee agrees that is the case and that the trustee has no right to do anything with the property. In fact, the trustee acknowledges that it has no rights, title, or interest to the underlying obligation, legal debt, note, or a mortgage that is the subject of an assignment or endorsement.
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So the fact remains that when faced with negative rulings, the lawyers stopped bringing foreclosures in the name of a company claiming to be a servicer, stopped bringing foreclosures in the name of MERS or other placeholders, and brought in a whole slew of new names in which the name of the trust is blurred. not registered and the res of the “trust” is nonexistent — all making the existence of the trustee, trust, and any rights to administer, collect or enforce irrelevant to any claims to do so.
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In order to bridge that “gap” various companies were either set up or hired to perform document fabrication, like LPS/DOCX. They hired people off the street to sit and sign thousands of documents without reading them.  They affixed the notary seal of thousands of notaries who were never present and didn’t know that their name and notary seal were being used. And the documents referred to transactions that never occurred. The public record is replete with hundreds of settlements, sanctions and other “agreements wherein various companies agreed to stop using false documents.
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It does not take a lawyer to understand that means they were admitting to using false, fabricated, forged backdated documents. But it does take a lawyer to understand that this fact alone provides an adequate foundation to challenge the apparent credibility of otherwise facially valid documents as being from a credible source. But if that argument is raised, the judge will almost always express or feel exasperation — perceiving the challenge as a mere technical challenge that is designed solely for the purpose of delaying the “inevitable foreclosure.”
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If the judge’s exasperation is turned against the foreclosure lawyers and the names used as their clients, the judge comes under fire from the appellate court.
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And notaries on fabricated documents were instructed to get rid of their logbooks so no proof would be evident that they could not possibly have performed notary services on fabricated documents, wherein the notary clause often contained a recitation that the person signing had produced proof that they were legally authorized to execute the document.
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The signors were all put out to pasture and are difficult to locate. But when they are located they admit that they had no idea what they were signing and didn’t know the definition of an assignment or endorsement. They admitted that they were working as contract laborers for the fabrication company and not for the companies dep[icted on documents as “signatories.” In short, they neither knew nor cared to know anything about the documents or the transactions that were referenced in the documents (i.e., “for $10 and other valuable consideration”).
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And when lawyers like Steve Jacobs and many others raise hell about using false, fabricated documents for nonexistent transactions they get disciplined for “unconventional” litigation practices. The only thing unconventional about Jacobs and the dozens of other successful foreclosure defense lawyers who have been targeted is that he (they) refused to buy the BS and insisted on proof of the existence of the loan account, its ownership, and the authority to administer, collect or enforce on it. How did that become controversial?
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Every defense lawyer is charged with the responsibility of testing the allegations against his or her client. But in foreclosures, judges get testy when lawyers do that. They’re annoyed by the due process required to test the allegations. They even get punitive about it citing “vexatious litigation” against lawyers and homeowners who are at times screaming over the illegality of the foreclosure practices being applied against them for a debt that might not even exist.
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And when Judges like Judge Botchko get exasperated with the apparent use of fabricated documents and argument that is not corroborated by anyone with personal knowledge, even they get targeted for discipline or reversal. [Side note: Look what happened to Judge Shack in New York and Judge Boyco in Ohio]
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The message is clear — tow the line or else. But there is an inescapable fact here: when judges rule on foreclosures they do so because (a) they understand nothing about the current securitization infrastructure and (b) they think they do know. I don’t argue that they should know. I only argue that they should make no assumptions about it. Abandoning those assumptions will go a long way toward rebalancing justice in foreclosure and collection practices.
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The absence of any evidence of curiosity or the administration of “blind” justice tells us everything. the judiciary has turned into an arm of political power because of public policy decisions made by the executive and legislative branches of the government.
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The sacrifice of the average consumer/homeowner is an acceptable collateral loss to saving the economy. But that theory arose because of aggressive manipulations and misrepresentation of information supplied by Wall Street. And the checks and balances that should be represented by the judiciary are completely absent in the face of scare tactics about financial armageddon.
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We already know from examples of different government responses in countries like Iceland that a more honest approach was and remains feasible. Yes everyone should take a hit because of these innovations that went into practice without any regulatory review. But that means everyone not just consumers. A reduction in household debt — the same as other countries — would have prevented the worst despair from the great recession and provided a substantial stimulus to an economy that is firmly based on household spending. Instead, we got a policy to preserve the past, present, and future profits of investment banks.
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This is not an indictment of the entire justice system nor of the investment banking industry as a whole. However imperfect they appear to be, they’re essential to a functioning society. It’s not even an indictment of the judges who have misapplied the law based upon false premises. After all, the only thing they have heard from all corners of the body politic is that the transactions with homeowners were in fact loans — frequently admitted by homeowners who are equally ignorant — and that any other legal approach would give an undeserved windfall to homeowners which would somehow undermine the entire financial and social system of our country.
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So the idea is that a benefit conferred to homeowners would be a windfall. It is presented, argued, and accepted without one scintilla of any evidence that the facts in the ground would support that premise. I only argue that the premise should be tested and that neither judges nor lawyers should be subject to attack from appellate or Bar discipline or FTC actions that result in orders preventing lawyers from continuing any practice of law or that prevent them from accepting engagement for foreclosure defense.
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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. I recall how “servicers” originally initiated foreclosures and judges tossed those cases. I agree as to the fabrication of trusts and trustees to the courts to replace servicers. I do not agree that homeowners are ignorant. Homeowners were/are well aware of the fake documents and dubious trail of money — or they would not risk time, money, and judicial abuse. The difficult part is getting judges to understand all this. Most often motions to dismiss are granted before discovery (and by discovery I mean adequate discovery) is granted. Unfortunately with COVID and forbearances, and struggle to support the economy today, judges will likely be even less willing to cooperate. And, Neil is correct, aggressive defense attorneys are targeted. One of the biggest obstacles is that Freddie Mac/Fannie Mae are not subject to FOIA. From where all these fabricated loans came, and those internal records, are a key to ascertaining evidence that judges cannot deny. Legislation to make Freddie/Fannie subject to FOIA was abandoned. Need to bring it back and fast.

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