Livinglies's Weblog

Digging Into a $344 Billion Investing Mystery
Preposterous claims in private investment offerings illustrate an important point about red-hot ‘Reg D’ securities: No one is checking to see if the details in these filings are even remotely true

Read in The Wall Street Journal: https://apple.news/AgZkHAedTT3uDltWufgHMSg

Periodically, I warn lawyers, homeowners, and forensic auditors not to fall into the trap set by the mega banks but made available as such by the US Government. Suddenly 12 years after it was first proposed, a new rule is headed for enactment in which the SEC closes that loophole.

This poses two problems for the mega banks.

The first issue is that they can no longer file utter nonsense on sec.gov and claim it to be a government document. This means that if they want to enforce a debt, note, or mortgage against the homeowner, they will be unable to prove up such documents under the doctrine of judicial notice. And THAT, in turn, requires a witness to (a) authenticate the document and (b) assert its validity for proving the truth of the matter asserted. That witness cannot come from the dumb “servicer” who knows nothing and does nothing.

So the lawyer who initiated the case needs a second witness or a witness from the party designated or named to be the creditor making a claim of default against the homeowner.

But that brings up another problem altogether. Because the designated “creditor” is not making any claim nor expecting any benefit from the lawsuit. That’s right. None at all. That company, bank, or business entity has merely agreed to license its name for the purpose of filing suit. It will not and contractually may not assert any claim to any payment or proceeds of payment, enforcement or forced sale of the homeowner’s property.

So where will this mystery witness come from?

The next problem is that the new rule will effectively sever all ties between securitization and the documents executed by the homeowner and several ties to any creditor or loan account. And in doing that, it will have severed any reasonable basis for paying or changing payment to stupid investors who were conned into believing that the certificates they were buying were (a) securities and (b) mortgage-backed. In fact, those certificates do even require a definite payment over a specific time period. Payments are mostly discretionary, and they last indefinitely until terminated by the investment bank.

The result of this absurdity is that the fake market in which such certificates are subject to delusions that they are tradable (i.e., that anyone who knew the truth would buy them) may well collapse just as it did in 2008.

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Neil F Garfield, MBA, JD, 76, 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.

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