It’s the small stuff that reveals the fraud

Posted on March 31, 2022 by Neil Garfield

Several contributors to the blog have identified specific information regarding the true owner and operator of physical mail addresses used in connection with correspondence, statements, and notices sent out under the letterhead of some company that is claimed to be a servicer.

This is important information as it supports the premise about the role of companies who are named “servicers.” In plain language, the named “servicer” can honestly say that they never said that. In plain language, they can honestly say that they were only hired to report on data provided by third parties. This information they have uncovered shows that previously unknown third parties were the actual parties who were using these mailing addresses. This is important because there is no disclosure about the source of data.

This is an obtuse concept to virtually anyone who is not a trial lawyer. Why would anyone other than the named “servicer” be allowing a third party to receive and send correspondence, notices, and statements in its name? Their answer of course is that they can outsource anything and it is their right to do so. But in order to outsource a function, you must have the right and duty to perform the function in the first instance.

The next level of analysis is even more important: If third parties are physically handling the checks through the hidden use of these mailing addresses, and they are physically receiving the money sent in by homeowners and third parties are receiving the notices of electronic payment, then those are the only parties who are receiving the checks and notice of electronic payments. This is not rocket science. You can’t account for a transaction in which you were not the least bit involved. If you produce such an accounting it is fictional and not evidence. At best it is a report of a report which is clearly barred by hearsay.

And if the deposits are made to an account not controlled by the named “Servicer,” then there is no legal basis for asserting that records of receipts are records of the “servicer.” The servicer in such instances is merely reporting on the receipt of reports issued by third parties.

Here is a fictional summary of real testimony. This is not complete nor necessarily accurate, but it is a reliable guide for the practitioner who is seeking to blow the witness up at trial. I publish it simply because there is nothing any law firm can do about it. They have no client and there is no claim.

The plain truth is that companies named as servicers do not receive or disburse money from homeowners. Therefore their records consist entirely of reports received from others. Accordingly, they are not admissible in evidence because they are barred by the hearsay rule. You can get them out with a motion to strike or keep them out with objections after voir dire. Without them, there is no case. There is no case because there is no real claim.

NOTE: You can use the same structure to show that the law firm might represent the company named as servicer but does not represent or have an attorney-client relationship with the “trustee” named as claimant or Plaintiff in the foreclosure action.

FICTIONAL TESTIMONY: CROSS-EXAMINATION (POSSIBLY VOIR DIRE DEPENDING UPON TOLERANCE BY THE JUDGE)

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The witness has testified that he is an authorized representative of a company that has been named (by someone) as a “servicer.”

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Neil: Do you believe that you have seen all the pertinent records of your employer regarding any transactions with the defendants?

Witness: Yes.

Neil: Is there anything that was withheld from you about which you are aware?

Witness: No

Neil: So you are completely satisfied that you have all the information necessary to testify about the existence, status, and ownership of an unpaid loan account due from the defendants?

Witness: Yes

Neil: Referring to Exhibit X which is entitled “Payment History” is it your understanding that this represents all the data about the transactions known to your employer regarding an obligation owed by defendants to U.S. Bank?

Witness: Yes

Neil: Is it your testimony that your employer performs servicing functions with respect to an obligation owed by the defendants to U.S. Bank, N.A.?

Witness: Yes

Neil: And by servicing functions would you agree that means several functions including receiving payments, accounting for them, and making disbursements to creditors?

Witness: Yes

Neil: So you are testifying that your employer is engaged in receiving payments, accounting for them, and making disbursements to creditors?

Witness: Yes.

Neil: Can you show me where this Exhibit shows any disbursements to any creditor to whom defendants owe money?

Witness: No

Neil: Have you seen any record of your employer that shows data entries upon your employer’s disbursement to any creditor of the defendants?

Witness: No

Neil: Do you know if your employer ever made a disbursement of money to any creditor of the defendants?

Witness: No

Neil: Can you identify the department in your employer that physically receives checks or notices of electronic payments from homeowners?

Witness: No

Neil: Do you know whether the checks or electronic payments are deposited into a bank account owned or controlled by your employer in the ordinary course of business?

Witness: No

Neil: Are you testifying that you know for a fact that your employer receives money from homeowners including defendants when they were making payments?

Witness: No

Neil: Your testimony is based upon your review of reports you received on-screen on a computer, is that right?

Witness: Yes

Neil: So when you testified that your employer performs servicing functions with respect to an obligation owed by the defendants to U.S. Bank, N.A., you were making an assumption based upon things that were told to you, is that right?

Witness: Yes

Neil: And you have no personal knowledge about the flow of money deposits and money withdrawals into or out of bank accounts owned or controlled by your employer, is that right?

Witness: Yes

Neil: Have you ever made a single or bulk deposit of money received from homeowners to an account designated by your employer?

Witness: No

Neil; Have your ever been authorized to make a withdrawal of money from any bank account maintained, owned, operated or controlled by your employer?

Witness: No

Neil: Have you spoken with other people whom you believed to be in the employment of your employer?

Witness: Yes

Neil: Have any of those people ever indicated that they had ever performed any tasks relating to the receipt or disbursement of money that had been received from homeowners?

Witness: No

Neil: Have you spoken with any other people whom you believed to be in the employment of any employer regarding receipts and distributions of money received from homeowners?

Witness: No

Neil: So you have no personal knowledge about what person or company actually received any money or how they accounted for that receipt, correct?

Witness: Yes

Neil: And you have no personal knowledge about the location, ownership or control of the computers on which any data reflecting money deposits or money withdrawals are made, is that right?

Witness: Yes

Neil: So your introduction of the Payment History is your testimony that this is what you printed out from a computer screen that contained a report of when certain payments were made and what charges were applied, is that true?

Witness: Yes

Neil: You do not have any personal knowledge about who made any data entries, why they did so or how that data appeared so it could be reported, is that true?

Witness: yes

Neil: Have you ever seen any accounting ledger or financial record of any type that reflected any financial activity or data from U.S. Bank, N.A.?

Witness: No.

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Neil F Garfield, MBA, JD, 75, 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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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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

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Filed under: foreclosure |

« Geoff Walsh of National Consumer Law Center (NCLC) publishes very informative article regarding foreclosure You Don’t Need to Call a Forensic Investigator as an Expert: He or she can be called as a fact witness thus avoiding any requirements to qualify an expert. »

Melanie Sandlin, on March 31, 2022 at 6:49 pm said:

Neil, this is a gem! Beautiful! Reading this is like watching a knight on a white horse in court. You hit your target every time. I bow down before your expertise.

ANON, on March 31, 2022 at 6:23 pm said:

Great post and great satire!! And for those paying – WHERE DOES YOUR MONEY GO??? I was once told – “a little goes here, and a little goes there, and a little goes everywhere!!!.” YAY!!! Hmmm – I thought this was a “Trust” – is that not up to the claimed trustee as to where money goes? Everywhere? Money goes everywhere? No. Trustee determines where money goes by all law – whether trust is private or public. But of course, trustee has no records, and trustee is never in court. They don’t have a clue where money goes. They don’t even know they are in court.

Hammertime, on March 31, 2022 at 3:56 pm said:

Seems w the administrative approach which can result in multiple versions of notes, payment histories etc cannot meet the requirement of “reliable evidence of a valid transaction” in the National Mortgage Settlement or homeowner bill of rights.

Papergate, on March 31, 2022 at 2:36 pm said:

I agree absolutely with my great friend Jan . . . absolutely love this article!

Jan van Eck, on March 31, 2022 at 1:58 pm said:

Superb! Gotta love it.

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