How Artificial Intelligence (AI) Is Shaping the Marketplace and the Courts

Most of the “important” “correspondence” and “notices” in alleged claims to administer, collect or enforce alleged obligations due from homeowners is delivered to homeowners via carriers other than the US Post Post Office.

That is because the alleged senders and the actual senders avoid criminal liability for potential mail fraud claims. Mail fraud statutes relate to the use of the USPS and not to FedEx or UPS.

But it isn’t correspondence, a statement or even a notice if it is (a) unsigned and (b) unauthorized by any conscious human decision. The ascent of AI production of documents was largely fueled by the banks, who now use AI regularly to receive, scan and respond to letters, applications, and notices from homeowners.

Even decisions on modification or settlement never reach human minds. They’re mostly created, communicated, and offered by a machine using algorithms that basically guess at what the human response would be. The advantage to the banks is their ability to dissociate themselves from the communication, statement or notice.

The same thing is true for the initiation of foreclosure proceedings. Lawyers at a law firm (frequently described as foreclosure mills) receive an electronic communication generated by a computer which in turn is taking directions from another computer (a server) owned and operated by a group of companies unrelated to the designated servicer or the designated creditor.

This is why the Robo witness at a foreclosure trial will only say that he or she has familiarity with the records of the company that has been designated as the servicer. The courts are allowing this as a poor substitute for the foundation of the claim.

No witness ever testifies that they work for the company designated as the creditor (e.g., US Bank), and they will never testify that they have seen the accounting ledgers, books or records of that designated creditor.

The entire case in which the foreclosure remedy is sought is based on implications and presumptions rather than facts.  In most cases, the lawyer pursuing that remedy has never communicated with the company or entity designated as the creditor/claimant. In addition, the lawyer has never been retained by that entity. U.S. Bank, for example, will defer all questions and challenges to a sub-servicer who actually has no control over any aspect of the transaction with the homeowner.

Artificial intelligence instructs the lawyer regarding the company’s designation as a “servicer” without any information on the company’s functions.

Such companies, in nearly all cases,  perform no function relating to the receipt, depositing, data processing, or distribution of money received from homeowners. All those functions are performed by companies now described as FINTECH, whom the CFPB has categorized as “Servicers”.

But the FINTECH companies never show up at trial, nor are they even referenced — because the homeowner, the lawyer for the homeowner, and the judge have no idea that the FINTECH companies exist or what they do.

The typical reference to the “records” of the “servicer” is a ruse because those “records” were neither prepared for or by the alleged “servicer, and that is because they had no reason to create such records since they did not actually receive any money. Hence they would have no data entries regarding payments and distributions.

It is always easy to point out that the “Payment History” in trials lacks any references to distributions to creditors — an essential part of any ledger proclaiming itself to be a picture of the unpaid loan account.

But the “payment history” — prepared by third parties — is usually accepted into evidence without objection from the homeowner as a record of the payments and as evidence of default even though that report is not a business record and therefore would be barred by the hearsay rule if the objection was raised.

I should add that there is never any evidence that the alleged “default” caused a loss to the party designated as a creditor. The point here is that a default is not a legal default if it is declared by or on behalf of a non-creditor.

Ownership of the implied or alleged loan account is the critical and essential component of alleging or implying that there has been a default that is actionable by the party who is designated as a creditor.

And ownership under the law does not come from the transfer of paper. It comes from a transaction in which the transferee pays value to a transferor who owned the underlying obligation.

All of the securities brokerage firms operating as “investment banks” know that what I have written above is completely true. I also know that their representations to the marketplace and to the courts have been untrue. This is why they have many layers of companies, with frequent changes, whose name communications are sent from a computer without human intervention.

In practice, the value of this knowledge is that if you ask for the source of authority for any document that has been produced in connection with the alleged “servicing” of the “loan account,” you will never get an answer to your question. Homeowners who win do not accept stonewalling. They aggressively pursue their rights under the rules of procedure governing legal discovery and such statutes as the FDCPA and RESPA.

You should never assume that any human being exists that had anything to do with decision-making or authority in connection with any of the functions that have ever been performed in connection with a homeowner transaction. In nearly all cases, that assumption is erroneous.

Letters and communications that and with a reference to “the team,” are actually in violation of the law. Both federal and state law requires such communications to contain the name and contact information of an agent responsible for the alleged loan account.

You will never get such a name or contact information because the loan account does not exist on the ledgers, books or records of any company as an asset consisting of an obligation due from the homeowner to that company.






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