Why the CFPB Announcement is Very Important

Posted on May 2, 2022 by Neil Garfield

when the time comes that a judge enters an order or judgment containing findings of fact, for example, that the records of the designated “servicer” are not business records that are not exempt from the hearsay rule, the poop will hit the fan.

I received multiple emails from lawyers and homeowners who were confused when I posted an article about the latest CFPB announcement. Most people are not clear on why this announcement is so important.

 

I can say this — the lawyers who represent “industry actors” are sending up flares about this announcement. See the Troutman Pepper Analysis. The end result SHOULD come in two parts:

  • a restructuring of all homeowners transactions in which the homeowner agrees to accept a virtual creditor instead of a real one, a virtual loan account instead of a real one, and a set of risks that are disclosed to the consumer as required by the Federal and State Statutes governing lending practices.
  • reasonable compensation to the homeowner for being an “industry actor.”

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Obviously, Wall Street hates that idea and will fight against it. For one thing, when all cards are laid upon the table the big banks will have many aggressive competitors offering homeowners greater incentives to sign off on the new deal. For the old ones that are considered “complete”, it will require a forced settlement with the investment banks that has the effect of greatly reducing the alleged debt. Homeowners would be forced to accept the reformation of their “simple” loan transaction.

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If you read the announcement closely, you will see that the CFPB has redefined FINTECH. And they are undermining the claims made in the name of companies that are designated or labeled as “servicers.”

They are treading carefully, but it is now abundantly clear to the agency that the companies that most people believe are servicing their accounts are simply being used as fictitious names for third parties.

It will take a while for this to sink in. And there is more that the CFPB can do to reinforce this message. But when the time comes that a judge enters an order or judgment containing findings of fact, for example, that the records of the designated “servicer” are not business records that are not exempt from the hearsay rule, the poop will hit the fan.

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Those records are the only thing that the dark side has to establish the existence of an unpaid debt and a creditor. U.S. Bank, N.A. for example does not receive documents or money out of the cash flow created by transactions with homeowners. The allegation, assertion, or claim has always been that it had “constructive possession” because the company that was named as the “servicer” had received the original documents.
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White will be revealed and highlighted by the policy announced by the CFPB, is that the named servicer does not receive any money or any documents. Instead, there are fabricated documents from which one might assume or presume that money and documents had flowed to the company that was named as a “Servicer.”
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Even if such companies, like Ocwen for example, came into actual possession of an original note (unlikely because notes are routinely destroyed contemporaneously with closing), it would mean nothing because they don’t have the right to enforce. People tend to forget the second part of the lawyers seeking Foreclosure use a variety of tactics to paper over that fatal deficiency.
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Wall Street investment banks invented a circuitous route to get around this fatal defect. They use documents that are labeled as “power of attorney” or they use the pooling and servicing agreement.
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The named plaintiff or beneficiary in a foreclosure is usually named as a bank not on its own behalf but as trustee of a named trust which may or may not exist. But neither the bank nor the trust maintains any accounting records reflecting ownership of assets consisting of obligations of homeowners.
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In plain language, this means that the Foreclosure mill is making allegations, assertions and argument regarding the existence and identity of a creditor owning the alleged obligation of the homeowner, but there is no testimony, exhibit or any evidence that those assertions are true. Pressed further, the inevitable conclusion is that they are not true.
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Therefore the appointment of a company that is self-described as a “servicer” is irrelevant to any case in which a party is seeking Foreclosure. In plain language, the agent has no more power than the principal.
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The announcement by the CFPB has Biden’s fingerprints all over it. His style is very underplayed and incremental.
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You could easily read the announcement as simply the intention to examine the business of companies that are described as FINTECH. The CFPB is saying that they are not simply technology companies.
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The CFPB is saying they are servicers — this puts the CFPB in direct conflict with all claims made on behalf of companies who are named as “servicers” but who perform no servicing functions in connection with the receipt, processing and accounting, and distribution of proceeds to any creditor.
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When you think about what that might mean and what we already know, the outcome of that investigation and monitoring will be an administrative finding that the real servicer has not been disclosed, and that the companies who are named as servicers have no relevant business records, because they never received any payments nor made any distributions.
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There is no possibility that the investigation will not lead to a question about how the FINTECH servicers are working and for whom they are doing this work.
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This is a pivotal point. If the real servicers are simply contractual agents of the designated companies who are named as services, it would strengthen the position of the investment banks. But I know that the real servicers (FINTECH) are working for the investment banks, and not the bank named as trustee for a REMIC trust — nor the company named as “servicer.”
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This will all lead to the inevitable conclusion that no company is actually performing servicing in the conventional sense. None of them are collecting money from homeowners and then distributing the payments to creditors. That is because of one fatal flaw and the business plan of the Wall Street securities firms. They eliminated the role of “creditor” or “successor lender” but they kept the labels.

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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.Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.
CLICK TO DONATENeil 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 COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. 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.

Please visit www.lendinglies.com for more information.

Filed under: boarding process, burden of pleading, BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure, jurisdiction, legal standing, Servicer, sham transactions | Tagged: |

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2 Responses

  1. Pat, on May 6, 2022 at 9:10 pm said:

    I have been fending off a foreclosure judgment for nearly 13 years. Still in my home. My last tactic was to sue the foreclosure mill (FDCPA) that had been suing me. It worked. I won. My servicer hasn’t taken any action since then.

  2. StillFighting, on May 2, 2022 at 2:37 pm said:

    If the Defendant prevails, who pays the Defendant, if the Trust doesn’t exist and:

    a. Defendant is awarded attorney fees (and maybe damages)

    or

    b. There is a financial settlement that benefits the Defendant

    Do they go to a slush fund for the monies? Does the financial institution hiding behind the fake Trust pay the monies?

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