Disqualification of Foreclosure Mill Attorney

Over the years many lawyers and laypeople have sent me proposed motions to disqualify or bar opposing counsel from representing to the court that the bank he or she named in a complaint or claim is his client.

It seems like an open secret that virtually no lawyer engaged in the foreclosure process is actually representing that bank; it is also an open secret that no lawyer is actually pursuing a legally recognizable claim against homeowners. Instead, they have been creating false claims (virtual claims) based upon virtual loan accounts that do not exist on the books and records of any creditor much less the bank they say they’re representing.

Such attacks on the lawyers get little support from the courts. And Bar Associations that could prevent and punish such conduct are doing nothing. So I don’t think I am speaking out of turn when I say that you are not likely to get satisfactory results in filing a motion in court or a grievance with the bar association.

A recent interesting countermovement in bar associations is the current effort to remove words like “zeal” and “zealously” from the rules and oath of the lawyer. There is a growing recognition that the use of such words provides cover from unscrupulous lawyers who weaponize the legal process in order to obtain an illegal result.

I can think of no other areas of law where such conduct prevails more than in foreclosures. For nearly 25 years the courts have bent over backward allowing the remedy of foreclosure to be used solely on the basis of “zealous” representations from lawyers whose [principal objective is to make money for themselves, their law firm, the erroneously named “servicer,” and the undisclosed investment bank.

But since so many people keep returning to the subject I will admit that without lawyers being willing to undermine their own due diligence obligation (to assure the factual existence of the client and the claim). Protected by a doctrine called litigation immunity afforded to the lawyers, the investment bank, acting through lawyers with whom it has no direct contact, controls all events and actions by all actors in connection with the administration, collection, and enforcement of a debt that is fictional (virtual) instead of real.

While there have been instances in which lawyers were sanctioned for falsely representing to the court that U.S. Bank was their client acting as a trustee, such arguments are treated dismissively almost all the time. Frankly, it isn’t easy establishing that the law firm itself does not consider its attorney-client relationship is with parties OTHER THAN THE PLAINTIFF OR CLAIMANT. You can allege it, but how do you back that up with proof?

The answer lies in circumstantial evdience and in effective persuasion in court directed at a judge who for the most part has already decided the outcome of the case based solely upon the allegations.

So far I still don’t recommend that homeowners file such motions. If you fail you will make it look like you are trying to distract the court from the debt you owe instead of dealing with the fact that no such debt exists.

But, if I was going to do it, here are my notes on the subject:

Background facts:
The lawyer executes and files documents that contain or imply a short plain statement of ultimate facts upon which the remedy of foreclosure could be granted. The lawyer is naming the claimant as a bank acting as trustee of a trust that is always implied but never stated to own the underlying obligation surviving the “closing” of a transaction that was labeled as a loan. No allegation is ever made that the named claimant or Plaintiff ever paid value for the underlying obligation. The closest they come is the general allegation that all conditions precedent have been satisfied.
In truth, the lawyer has initiated the foreclosure process for the benefit of several actors, including the lawyer, and not for the benefit of the bank acting as trustee or the trust itself. In fact, the lawyer knows that any payments from the homeowner or payments arising from the forced sale of the subject property will be diverted away from the named claimant which is the bank acting supposedly on behalf of the trust, which in fact does not own any right, title or interest to the subject obligation, debt, note or mortgage. Neither the bank nor the lawyer expects or receives any flow of funds to or on behalf of the bank.
In no case do the common “trustees” (U.S. Bank, Bank of New York Mellon, Deutsch) receive or distribute money from homeowners or to any beneficiaries. In no case do the common “trustees” actively manage the affairs of a trust that owns a legal right, title or interest to the subject obligation, legal debt, note or mortgage. In no case, does the lawyer receive any instructions, information, or legal right to administer, collect or enforce an alleged unpaid loan account receivable owned, maintained or administered by the bank or any trust. In no case does such a receivable exist on the books of account for any trust or other creditor to whom the homeowner owes money.
The lawyer is using a fictitious name to further his own interest, that of the company named as a “servicer,” and the securities brokerage firm named as investment bank book runner with permission to use the name of the bank in a vaguely worded Plaintiff or claimant. If the foreclosure effort is unsuccessful no loss of income, principal or interest occurs on the books of record of any entity. If it succeeds, the proceeds are distributed to many different actors as revenue or other non-categorized receipts of money — but no unpaid loan account receivable is decreased by the receipt of such money because no such account exists.
The appearance of the unpaid loan account receivable is a fiction, but not a legal fiction. It is illegal and extra-legal. There are no provisions in statutory or common law for the administration, collection, and enforcement of a virtual debt. At the base of every legal debt is a transaction in which consideration is exchanged. The unpaid loan account must be real and it must be reflected on the books of account of the supposed creditor. And the enforcer must be a party who paid value for the underlying obligation (not the note or mortgage).
The attorney then misleads the court by both promoting and allowing untrue statements to stand as true, while the attorney knows they are false. When, for example, U.S. Bank is named as Trustee for the SASCO Trust 2006-A1, for the benefit of registered holders of SASCO Trust 2006-A1 pass-through certificates, the lawyer is making a misleading statement of claim, a misleading identification of the claimant, and promoting and active attempt to mislead the court into believing that ultimately it is investors who will compensate for their loss a rising from a claimed “default” by the homeowner.
It was my discovery in 2006 that nearly everything said about securitization consisted of bold big lies, that caused me to name my blog (beginning in October 2007) “LivingLies.”
  • It was a lie to send statements to homeowners indicating they had a legal obligation or even a moral one to pay the newly designated “servicer” who actually performed no servicing duties.
  • It was a lie to declare delinquency or default without disclosing the creditor who had suffered any loss arising out of the non-receipt of scheduled payments.
  • It was a lie to declare delinquency or default when no creditor suffered any financial loss arising from the alleged non-receipt of a scheduled payment.
  • It was a lie to imply that investors were buying pieces of mortgage loans or that foreclosures were being prosecuted on behalf of the investors, often referred to as the “holders of certificates” or “registered holders of certificates” — especially since they were not holders of any notes nor were they registered to receive any part of any payment from any homeowner.
  • It was a lie to assert or imply that the naming of a trust in the claim or complaint was sufficient to explain the appearance of the trust since it expressly disclaimed any economic interest in any debt, note or mortgage even if there was an assignment or endorsement — all as stated in the “Trust Agreement” or equivalent document.
  • It was a lie to assert that the trust had any right to administer, collect or enforce any promise or agreement with the homeowner and a concurrent lie to assert that the trustee had any right to grant powers of attorney or execute any servicing agreement for unpaid loan accounts that it did not own.
  • It was a lie to imply that the outcome of a “successful” foreclosure would result in the payment of a creditor.
  • It was a lie to assert representation of “the plaintiff” or “the claimant” when no such representation, retainer agreement, or contract existed.


The list could go further, to be sure. But the point is already made. Without lawyers willing to bend custom and norms to the breaking point there would be no successful foreclosure because the law does not allow foreclosure for fun and profit. It only allows it for restitution of an unpaid debt.


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.

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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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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4 Responses

  1. Well written Neil. Your statement – “but no unpaid loan account receivable is decreased by the receipt of such money because no such account exists.” This creates a path for misappropriation of funds – if funds were ever truly provided. It screams – “Hit Me For FRAUD.” Meaning any refinance, and very often, purchase – if never reflected on ANYONE’s financial accounting books leaves the homeowner in perpetual default. You could win the lottery and pay off all, but it will be never be recorded as paid by you because no accounting ever occurs. At mercy of gold diggers to your home, who, frankly, have destroyed our country. But politicians want you to use your home as ATM (which was criticized after financial crisis). Why? In order to prop up GDP — need spending. Need people to spend. Goal is anyone with a home to use it to prop up spending. So – now – after criticized for using home as ATM — all are shouting — “WE NEED SPENDING.” And, they don’t care if real or virtual or contrived. SPEND. SPEND. SPEND. Why? Major component of GDP (75%) – is comprised of “C” – Consumption spending!! Yeah – I like those Amazon orders too, but like most cutting back. This will be the catalyst that throws us into recession (we are already there) and vulnerable to unfriendly countries. Get your heads out of abortion. Not the time or place. What matters right now is, as always, the pocketbook. Politicians are not talking people’s talk. Have not for decades.

  2. Actually, here is a very clear legal definition for enforcement of virtual debt. It called “RACKET” and covered by RICO Act

  3. Throughout the Fraudclosure and all objections. The debt collector Scumbag lawyer has told the courts his client is SLS, Rushmore, US Bank NA Trustee for XYZ Trust. And the clown in the robe continues to allow him to hide behind this shell game of who is THE CLIENT !!!!

  4. In California as Non Judicial state is a usual business to have the attorney for the servicer to missrepresent the court and the plaintiff in saying Severson & W…. represents the Investor and the Servicer when in fact they don’t represent the beneficiary/investors.
    You mentioned how I can backup my statement ? I’d said because I spoke at that time with the Beneficary /Investor Bank ‘s vicepresident the one who oversees all its servicers, he was not even aware about the Lawsuit, besides doing this action the Law firm is violating our due process right in court, creating a false representation of a non legal investor/beneficiary in your home documents.
    I’m agree with you saying the CA State Bar doesn’t do nothing against them. Perhaps the law firm needs to be include in the Lawsuit for miss representation and violation of our constitutional rights.

    By the way Neil I see these attorneys in BK courts doing the same, what is the requirement to bring an private action for filling a false proof of Claim against them ? Is any statue of limitation?

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