No Ledger, No Claim

 Even if a consumer thinks they owe a debt, it is still up to the lawyer who initiates the collection or foreclosure action to prove that they have a client that owns the debt, has the right to file suit, and has enough documentation to prove a debt is owed. They may not be able to successfully produce all required documentation when challenged. When that happens, the judge has no chioce but to deny the claim — even if it was based on a real loss. 

No agent has any power or rights unless it is serving the interests of a principal who legally owns and possesses such rights.

No money is in the bank unless the check register and the bank account demonstrate the existence of the money on deposit.

No collateral account (unpaid loan account due from the homeowner) exists unless the accounting ledger of the creditor and supporting documents show a purchase of the unpaid obligation.

Homeowners need to stop being afraid to ask the right questions. They are not asking the right questions because they are afraid of the answers. There is no answer because there is no claim. Under the laws of due process if they can’t answer they can’t claim. You don’t need to prove anything to win.

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In recent correspondence with readers and clients, it has become abundantly clear that my assumptions about people having a basic understanding of accounting concepts are wrong. I apologize.

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This became highlighted when someone sent me a quote saying that one company that somebody had designated had released its “servicing rights” to yet another company designated, possibly by someone else. It was a meaningless sentence, and under the law, the homeowner is not required to give it any weight.

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If anyone relies on that document to pursue claims for the administration, collection or enforcement of money allegedly due from the homeowner, they do not possess a valid legal claim. And the point here is not to prove the nonexistence of a claim but rather only to prevent the lawyers from putting on a case. The defendant should not care how he or she wins as long as what they do is legal.

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Agents do not spring into existence except under one circumstance: a principal party who can affirm and warrant title to the rights affected has appointed that agent to act under the circumstances described in specific documents that contain specific powers and restrictions. 

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The only thing homeowners and their lawyers get are unfounded, self-serving fabricated documents that pretend that the principal has already been involved without any precise definition or identification of the principal. So they receive letters saying that the letters come from the “servicer” (which is untrue) and that the “new servicer” is now servicing the “account.” That is also untrue.

But homeowners and their lawyers are afraid to ask standard open discovery questions because they are afraid of the answer. The only valid answer is that the creditor hereby affirms and warrants title to the underlying obligation, debt, note, and mortgage lien. As such, it appoints a specific agent to act as servicer for administration, collection, and/or enforcement of a loan account that it owns and which is shown on its ledger the same way the ledger was always produced in foreclosures before the era of securitization claims. 

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The problem with these statements that emanate from unknown sources on behalf of entities that may legally exist but are not creditors is that they are the equivalent of saying that if you hire an employee, someone else can take that employee’s place without your knowledge or consent. It simply does not work that way.

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Agents do not appoint themselves or create powers for themselves. That is ALL (no exceptions) done by the principal for whom they are acting. Any company claimed to be a “servicer” or who has allegedly participated in a transaction regarding servicing a collateral account (unpaid loan account on the ledger of a creditor) MUST be acting on the express authorization of that creditor.

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By the way, I have encountered a staggering level of ignorance about the most basic accounting and bookkeeping concepts. Wall Street has successfully weaponized that ignorance. People ask me to define the ledger. When I used the check register he or she used to write personal checks, they got it. But before that they had no idea.
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Let’s go back to basics. You either have money in the bank or you don’t. Your check register is the ledger, even if you don’t reconcile it. Suppose it needs to be brought up to date by someone who performs the reconciliation of checks outstanding, deposits outstanding, deposits made, and checks that cleared. In that case, the check register is still the register (ledger). The ledger/register is conformed or corroborated by what the depository bank, as a third party entity, reported it is maintaining as a record of your balance. But only you know what deposits were made and what checks were written that have not yet been negotiated or posted.
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If you issue a “statement” or “notice” saying that you have $100 in your bank account, that is an assertion or allegation. It is not evidence of anything other than that you said it. The ONLY way to know if that $100 is in your bank account is by (a) looking at your check register and (b) looking at the bank records produced by the bank.
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And THAT is what I am talking about. Perhaps I have not previously made myself clear because I assumed that most people possess a rudimentary knowledge of basic accounting concepts since most have bank accounts.
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So when a lawyer says that a company is a “servicer” that does not make the company a servicer, agent or authorized to act on behalf of anyone. It is an assertion or allegation. Sometimes it is only implied. You will note that no assertion is ever made that the party named as the claimant in a foreclosure is a holder in due course. That would require a purchase for value in good faith and without knowledge of the maker’s defenses (i.e., the homeowner’s defenses). Nobody EVER says that because no check register (ledger) shows that any company owns a “loan” account. This is the exact equivalent of not really having the $100 in your checking account.
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So the ledger is the key. If you don’t have a bank account, or if you don’t have any money, there is no assertion or allegation or fabricated document in the world that will put that money in there. The assertion is untrue if your check register doesn’t show the money and your bank doesn’t show the money. And that is why we conduct discovery to challenge the basic premises of foreclosure claims. Most of the homeowners who follow this strategy win their cases. It is rare that anyone wins for any other reason.
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The reason why most people fail to follow this strategy is that they are afraid of the answer. They think that someone will come forward with a ledger that can be confirmed as to its authenticity and accuracy, thus demonstrating that the ledger, the creditor, and the claim are all valid. So they blindly fail to object to the substitution of a fabricated payment history instead of actually seeing the ledger of the alleged creditor, and they fail to challenge the existence of a creditor, unpaid loan account due from the homeowner, and the current claim.
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PRACTICE HINT: You don’t need me as an expert for this. Ask any CPA.
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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.
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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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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 14 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.

One Response

  1. No one who fights is afraid and/or fails to question. Courts are the problem.

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