Whether you are fan of Occam’s Razor or Sherlock Holmes, the conlusion is usually the same. And the corrolary is that people tend to pursue complex paths of investigation and challenges when the simple answer is the only thing that will help them.
Like many people, I tend to overthink some issues. When people do that, they end up looking for a complex answer when the simple answer is right in front of them.
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Legally, a debt arises after a business transaction in which mutual consideration is exchanged. Consideration can be in the form of cash or other valuable consideration recognized by law. In the case of the loan account, the debt arises if money was paid to the homeowner to establish an unpaid loan account to be repaid under the terms of a mutual agreement between the parties.
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As to funding, while in many cases there was no funding, generally speaking money was paid to or on behalf of the homeowner. But unless the money was paid with the intent to establish a loan account as an asset of a creditor, some other explanation is required to serve as the foundation for the money paid to or on behalf of the homeowner.
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in either event, you will never get anything other than an evasive response to any questions regarding the initial funding, because the initial funding came through various intermediaries for any securities brokerage firm operating as an “investment bank.” But it is helpful to become aggressive in seeking the simple answer to a simple question, because doing so gradually raises the awareness of the judge to the absence of evidence to support the claim.
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In Foreclosure proceedings, you don’t need to prove any of the theory. You only need to establish that the foreclosure mill is unable or unwilling to corroborate the existence of the loan account, the ownership of the loan account (which can only be achieved through payment), and the authority to enforce the loan account, if it exists.
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My point has always been that there is nothing to enforce and no right to administer or collect any money. I am 100% certain that this is the correct legal conclusion required by both statute and common law. The only reason the foreclosure mills have prevailed is that both attorneys and pro se homeowners have been reluctant to challenge the most obvious deficiency in the claim against them — i.e., no loan account.
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Contributing to this confusion is the erroneous perception that reports issued under the name of a company that has been designated as the “servicer” are an acceptable substitute for the actual record of the creditor (who was a different party) showing the existence of the loan account.
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Further contributing to the confusion is the fact that virtually all homeowners (and lawyers) were successfully deceived by the offer of a “loan transaction.” Since the homeowner was seeking a loan, and believed that he or she received a loan, it is almost impossible to dislodge the belief that their transaction was anything other than a loan transaction.
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But the record over 20 years has clearly demonstrated that homeowners who proceeded under the assumption that the foreclosure mill will be unable to establish or corroborate its case generally win in litigation.
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And the assumption that this somehow results in a “free house” is equally erroneous since all parties have been paid in excess of any amount that could have been due under a loan agreement. Such payments arise from the sale of unregulated securities masquerading as asset-backed securities or certificates.
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The homeowner has generated more than sufficient revenue, payback, and profit to each of the actors (including foreclosure mills) in securitization schemes to compensate them above industry standards that existed before the so-called era of securitization.
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The retention of a house that the homeowner paid with proceeds of what was, in reality, a securities transaction in which the homeowner was the primary issuer is probably insufficient payment to the homeowner, without whom there would have been no securitizations scheme. That is a topic for another discussion on the affirmative relief that MIGHT be available to homeowners who were not properly compensated for exclusively absorbing the transaction risk that enabled the actors to proceed without regulation of any kind.
Filed under: foreclosure |
TILA. You get a mortgage – it better be a mortgage. Meaning funds provided to YOU to payoff prior mortgage – whether by purchase or refinance. If that did not occur – there is no mortgage. Somehow, I get the impression here that other types of transaction loans are allowable even though deemed a mortgage to YOU at closing. You get mortgage – you want a mortgage – which means funding to you was to pay off prior mortgage by YOU. If this did not occur – YOU do not have a mortgage. Simple. County recorded releases/satisfactions/discharges are NOT proof of payoff by YOU. Someone else pays off – you still owe – but it is not a mortgage. What did YOU really get?
Bravo article Neil, thanks!!