Is breaking a promise to pay money a sin against an individual or society at large?

The homeowner has committed no sin. If a scheduled payment has been missed, nobody loses any money. And the homeowners who are making the scheduled payments are contributing to the revenue and profits of entities who have obtained the signature, reputation, and property of the homeowners under false pretenses.


Practically all law — i.e., every requirement of societies — arises from a collective sense of disgust, repudiation or condemnation of an act committed by some human being. Someone claims injury caused by someone else. The law sets up a procedure by wich it is determined, for the sake of social harmony, whether the injury occurred and what compensation should be due to the person who made the claim.

Going back to ancient civilization the law as all about lex talionis —- retribution for the sin committed. This was the whole eye for an eye, tooth for a tooth, death for a death business. For most of what we refer to as western civilization, the recitals of things that we don’t like goes back to Hebraic (biblical) practices.  It was then enshrined in Latin, as I have already stated, nad now is mostly in English with throwbacks to Latin phrases. Ask any lexicographer.

Things we don’t like are written as statutes. We don’t like murder. If you do it, we will kill you. We don’t like liars, if you do it, and your lies damage someone, we will punish you, possibly by death. And we don’t like people who break promises. If you break your promise, society will make sure you live up to your promise or that something is taken from you as punishment (foreclosure). Whatever is taken from you is given to the person you made the promise to, as long as its value does not exceed the promise you made. You get the difference if that something is worth more than your promise.

Later it appears in the Law of Æthelberht, written on Old English in the 7th Century, and then, in a more evolved state and status in the Magna Carta in 1215. The language of the Magna Carta was broader than that intended by either king John or the 25 nobles for whom it afforded special rights and protections. Still later, combining the legal procedures originally devised by Hebraic tradition, the Magna Carta served as the foundation for most founding legal systems of countries starting in the 1770s — including the USA of course.

In all cases, there had to be an injury for anyone to take notice. Nobody other than the King could say that someone should be compensated or punished simply because the complainant liked or didn’t like what someone had done.  Over time, the whole idea of monarchy became more symbolic than a form of governance.

And, of course, I raise all of this because we all know that virtually all current foreclosures are based not on the injury but rather on the breach of a promise. And the promise must be enforced to assure social harmony and confidence in the marketplace even if the promise was made under some false understanding by the promisor — unless a lie created that false understanding from the person who received the promise, in which case the law says that such agreements will not be enforced.

In very plain language, if there is a breach, you still don’t have a claim —- unless there is also injury. US courts are prohibited from issuing advisory opinions and restricted from deciding issues that are not in controversy. An issue is not in controversy if there is no allegation of breach and injury.

I ask the question because it occurs to me that a promise to pay is viewed under the law as a contract between two parties- the promisor and the promisee. Suppose the promisor fails to pay when money is due to the promissee. In that case, the society allows the promissee to exact retribution through a judgment for damages that can be executed against the property of the promisor. Or, in the case of a foreclosure, the judgment includes the order to sell the property — and give the money proceeds of the sale of the property to the promissee — but only up to the amount owed to that promissee.

And that is the problem. Our society has accepted the mantra and myth from Wall Street that not paying a bill is a sin —- except when big companies and financial institutions do it.  The sin by the individual promisor is a sin against society. If they break their promise and don’t make a scheduled payment, most people now accept the premise that the sinner should be punished through the loss of their home —- regardless of who gets the money from the sale or why.

I take issue with that. Law is not about some sense of morality defined by Some PR spokesman for private interests. It is what a legislature says it is. It is not what a court says it is unless the law is ambiguous. The law regarding debts and obligations is not ambiguous or unclear. But the current trend, since around 1999, is to allow the courts to discard custom and practice, and law.

The rule has become that the homeowner sins when he or she fails to make payment even if nobody claims to own the debt — i.e., the unpaid loan account. If you look at any foreclosure these days you will see that the lawyers for the foreclosure mill are not saying they have a client who owns the debt — even though the law (§9-203 UCC) says they need to if they want to foreclose on a security instrument.

There is never an allegation of any damage to the named claimant. It is implied, and the courts are accepting that as sufficient. As such, especially in uncontested foreclosures, judgment and sale is allowed despite the absence of anyone who suffered any form of economic or other injuries proximately caused by the homeowner’s “breach.”

The fact that the homeowner did NOT breach any promise made to the claimant is disregarded. The fact that the claimant does NOT allege directly that it paid value for the promise (as required by §9-203 UCC) and currently owns it as an asset owned by the claimant is also disregarded.

In fact, there is a complete absence of any allegation made by the claimant in nearly all cases. In current foreclosures, all allegations are made through attorneys who are protected by litigation immunity. In turn, the attorneys say they rely on companies designated as “servicers.”

But the lawyers never say they represent the climaint or speak for the client because (a) they don’t and (b) it is implied by simply signing a pleading naming the claimant as a party seeking “relief.”

And to satisfy their sub silentio challenge to what is written as law, the courts have also extended it to mean that any document that asserts a conveyance of ownership of a lien interest is absolutely valid — not just presumptively valid — regardless of who is the transferee, assignee or endorsee of the note and regardless of who owned the lien.

Anyone who signed the document is treated as presumptively owning the right to transfer ownership of the underlying obligation, note, and mortgage without regard to any business transaction in which value was paid by the transferee.

And in discovery, courts have taken to denying inquiries into whether such assertions, arguments or presumptions are true. Thus all of society — except for people like me — agrees that the homeowner should leave their home because they sinned — even if their “retribution” makes someone rich. This is accepted even if no person, business entity, party or financial institution receives the money as anything other than revenue.

For 16 years so far, I have been saying that is wrong. I am sure of it. I know it for a fact because I was physically present and in attendance at meetings in the early 1970s where the current iteration of what is now called “securitization” was planted as a seed. I actively participated in various schemes of what is now referred to as “layering” or “laddering.” I was the attorney who drafted the documents and I was part owner of some of the schemes in the 1980s.

The homeowner has committed no sin. If a scheduled payment has been missed, nobody loses any money. And the homeowners making the scheduled payments are contributing to the revenue and profits of entities who htave obtained the signatures, reputations, and property of the homeowners under false pretenses.

If the homeowners understood that the sales of securities completely eliminated the entire risk, two things would have occurred. Homeowners would have demanded and they would have received full disclosure of the identity of the actors in the securitization scheme and the amount of money that they were generating as revenue and profit. As a result, they would have bargained for better terms than to return the money that they received.

Next, competition would have occurred in offering financial packages that were in reality, business opportunities to participate in a securities scheme and not a lending contract. There is no lending contract if there is no lender. There is no lender if there is no loan account.

The creation of a payment history is not evidence of the existence of a loan account. Only the owner of that loan account could produce evidence in support of the truth of the matter asserted: an unpaid loan account exists, and the homeowner has created a financial loss to the owner of that account by failing to make a scheduled payment.

In thousands of cases in which I was either lead counsel or lead legal consultant, there has not been one case in which such an owner came forward. There are only lawyers who are naming parties who have no relationship or contract with the homeowner. And those lawyers have established law firms that made millions of dollars before they went out of business.

If there is no debt owner, there must be a reason for that. And my experience on Wall Street, and in hundreds of interviews and litigated cases, has established beyond any reasonable doubt that there is no owner because the transactions with the homeowner are a farce.

It was never intended to be an entry into the lending business. Still, it was intended to milk the lending marketplace dry — along with the rest of the economy as we learned in 2008 in the great recession invented and brought to you by companies calling themselves “investment banks.”

Thus the question posed in the title of this article is really a trick question. There is neither any sin against any individual or company nor anything against society when a homeowner fails or refuses to make a payment to satisfy a promise that was made under false pretenses – especially when the satisfaction of that promise will simply result in making somebody totally unrelated to the deal incredibly rich.

If you don’t believe it, you can test it yourself. There was an article published and then buried. It was written by law students and law professors at Fordham University Law school. It was entitled “will the real holder in do course please stand up?” That was in 2007, before the great recession — and a year after I started warning about the great recession.

Figures don’t lie, but liars do a lot of figuring. I was able to predict within a few months the timing of the crash in 2008. Anyone who has a copy of the seminar I presented in September 2008 can see me predicting the crash, which entities would crash with the crash and order in which they would crash, which was scoffed at right up until they fell like dominoes in the order in which I had predicted.

If any sin was committed, it was never the homeowners who committed it; everyone understands that on some level. Nobody is doing anything about it on a grand scale because of the acceptance of the original sin promulgated by Wall Street and the fear of the threat of collapse also promulgated by Wall Street.

6 Responses

  1. All true.

  2. Not when usury is involved but that is only an opinion and usury is unlawful but… our society sees as legal which I find insultingly hilarious and maritime, but here we are. Ready for round Two?! Lost at sea.

  3. Perfectly explained!
    I tried to be heard in the court but didn’t go about things correctly. Due to lack of legal knowledge. I hired attorneys that were in capable and really didn’t care because they were also making a profit. Just before Christmas in 2019 my family was Evicted from our home.
    my home today is valued at $1.7m I never sign or agreed to any of this fraud that was nothing but Fraudulent documents recorded into the land records. Sinners are the fault of many liars and criminals that stole my house via the Failing court procedures that where abused and used as part of the scam.
    We were gaged or blocked from speak in court. I was even threatened by the judge that if I spoke again I would be held in contempt of court so I had to standby and watch my evidence never be submitted to the court because I was told I had to hirer a attorney for my case to continue in the courts.
    I followed the instructions from the judge. The crime via fraud against the courts truly denied is a right to do process.
    The nightmare continues to harm my family. The saddest thing is nobody in the courts cares. and all these foreclosure law firms have become millionaires and billionaires. it’s never too late to right a wrong and hold these criminals accountable. Take their million Dollar Estates in Martha’s vineyard and on the waterfront in Newport Beach etc. away from each of them to compensate the harm they’ve caused so many American families.
    I am not crazy I’m just one of the victims.

  4. Fraud i nthe inducement

  5. Fraud in the inception.

  6. No words have been better stated about the true nature of these cases – great article, as usual Neil, thank you!!

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