2022: Recap of what we know about foreclosures and securitization

Here is a line from another lawyer that I spoke with:

“The investment banks were not selling securities and they can’t say that they were because if they did say that then they would be saying that they were subject to registration requirements for initial public offerings. Their entire position is based on the assertion that compliance with SEC rules is barred by legislation in 1998-1999.

The investment banks were borrowing money under the false label of “certificate” that was nothing more than a nonconforming non negotiable unsecured discretionary promissory note — i.e., the common moniker of “IOU.” So it was a loan and not the sale of any security. Hence, no securitization. The use of SEC.gov is a ploy.

Similarly, homeowners were not borrowing money; they were getting paid for their appointment as issuers of base instruments used for the “sale” of “Certificates” and other derivative products by the investment banks. So no loan and no loan account despite the issuance of the promissory note and mortgage.”


There are several stages or phases of confronting the banks:

  • Start the confrontation early — creating tracks in the sand:
    • Correspondence
    • QWR
    • DVL
    • Complaint to CFPB
    • Complaint to State AG
  • Challenging Notices in Court:
    • Notice of Substitution of Trustee
    • Notice of Delinquency
    • Notice of Default
  • Defending Foreclosure Process:
    • Defensive pleadings
      • Petition for TRO (nonjudicial)
      • Judicial Foreclosures
        • Answer
        • Affirmative defenses
        • Counterclaims
    • Post Judgment and Post Sale Motions and Actions 
      • Change of parties
      • Notice of payment to a third party
    • Proactive and Offensive Strategies and Tactics
      • Collateral lawsuit for Declaratory, Injunctive and Supplemental Relief
      • Bad faith claims against title insurers
      • Actions to reform original transaction
      • Offers of Judgment and Offers to Pay
      • Quiet title

Each one of the above is an expenditure of time, money, and effort. Each step up the ladder increases the total amount spent in fees on each step. Each step requires investigation, research, and consultation with a qualified, licensed forensic expert. Depending upon the resources of the homeowner, the goal can be set higher and higher up to and including the probability (no guarantee) that the homeowner will win and may even have grounds to file a quiet title action after defeating the foreclosure claims. Each step requires greater and greater time consumption for the lawyer.

Lawyers who assert representation of the opposition have received instructions to litigate far beyond the point when it is obvious they’re likely to lose. This tactic has been sued for centuries basically relying on the premise that the weaker opponent is not the one who lacks facts or law, but rather the one who lacks financial resources or will to continue.

Each of the above steps represents an opportunity to obtain at least a somewhat favorable settlement result. But none of them presents a guarantee nor will any favorable result, settlement, modification, or conclusion unless the homeowner persistently and aggressively litigated each issue and is able to withstand the initial losses with judges who don’t believe that homeowners have any meritorious defenses.


From the inception of the mortgage meltdown individual judges across the country have found that the evidence to support foreclosure claims — or any claims relating to an unpaid loan account — are absent or insufficient.


The clear conclusion is that most if not all of the labels used by the financial industry are and have always been meant to deceive, mislead and confuse people who are not versed in current investment banking practices. These labels include but are not limited to the following:

  • Loan
  • Loan account number
  • Loan account
  • Interest
  • Principal
  • Servicer
  • Trustee
  • Trust
  • Claim
  • Payment History
  • Attorney
  • Attorney in fact
  • Power of Attorney
  • Assignment
  • Allonge
  • Endorsement
  • Depositor
  • Securities administrator
  • Mortgage acquisition trust or company
  • Securities Administrator
  • Risk manager
  • Title Insurer
  • Title insurance
  • Credit default swap
  • Portfolio
  • Pool
  • Mortgage loan schedule
  • Underwriter
  • Issuer
  • Mortgage-backed security
  • Certificates
  • Secured and unsecured

All of the above are valid legal terms. But in the securitization and foreclosure infrastructures that are fabricated, they don’t mean what most people think they mean. As a result, most homeowners end up expressly or tacitly admitting facts and laws about which they know nothing. By denying both the express allegations and the implied assertions, the homeowner vastly increases his or her chances of success.


The fundamental issues in virtually all residential foreclosures that have been revealed and established, and set forth on record in findings of fact and conclusions of law by judges, administrative agencies, and law enforcement all revealed by investigation and litigation Discovery and cross-examination) are the following:

  1. When tested, all of the presumptions attached to apparently facially valid documents fail.
  2. The lynchpin for all such attempts is the ability of a lawyer to say and submit almost anything under the legal doctrine of litigation immunity. Unless the attorney can be shown to have actual knowledge of the falsity of his assertions to the court, he or she is protected. Deceitful players can supply the lawyer with false documents and false statements that will only be uttered in court by the lawyer.
  3. The issues that are not being raised now are those attached to the “Payment History” and other records that are proffered to the court as business records that are exempt from the rule against hearsay. Those records are offered as though they were records of a “servicer” who receives, processed, accounts for, and disburses money that is paid or extracted from a homeowner or his or her home.
    1. But such companies that are claimed to be “servicers” do not perform any of those services and all information submitted under their name is supplied by third-party companies who answer to investment banks, not the “servicer”. The records and the Payment HIstories are false documents containing mostly false information and implied information about “loans.”
  4. By the time the “case” goes to court, there is no loan account receivable on the books and records of any person or business entity. Enforcement of a promise to pay is therefore barred under current law.
  5. The proceeds from the liquidation of property using the foreclosure process go to investment banks who receive such funds as additional revenue. Neither payments from the homeowner nor money from foreclosures ever reduces any loan account receivable due from them because no such account exists.
  6. Securitization as it is now used in practice results — in substance — in the immediate payoff of the actual, virtual or equitable loan account. By not recording receipts as credits to a loan account, the players maintain the illusion that the loan account remains unpaid until they voluntarily stop claims of rights to administer, collect or enforce the false representation of an unpaid debt.
  7. All such foreclosure claims use false information on fabricated documents that are forged, backdated, and robosigned to create the illusion of an existing valid transfer of the nonexistent loan account.
  8. Because most homeowners do not possess the required resources of time, money, and energy and because government agencies have failed to enforce even their own settlements agreements with players who promise to stop using fabricated documents, the defense side of these cases is rarely litigated in proper fashion.
  9. Favorable trial court decisions for homeowners who invest in their defense are mostly kept out of sight and under-reported because they are all confined to the trial court level which does not receive the attention given to appellate decisions.
  10. Favorable appellate court decisions are virtually nonexistent — except for extremely narrow technical issues. This is because when the homeowner persists and obtains a victory in trial court one of two things happens:
    1. A confidential settlement that often includes expungement of the court record.
    2. No appeal: the risk of an opinion being issued, even if the foreclosure lawyers prevailed, was far greater than the loss of the case.



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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