Is Modification Legal?

You are completely correct to say that modification of a contract is not possible without the parties to that contract agreeing to modify. Even a court may not modify that contract unless it contains something that is patently unlawful.
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And in the case of documents proffered by lawyers who imply that they have been retained by and represent a company that is a legitimate creditor, their use of the label “modification” is false and most likely fraudulent. This is true because the lawyer does not represent the designated “creditor” and never actually said he or she did represent them. The lawyer also does not represent the “servicer” in most instances and never actually says he or she did represent them.
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The effect of such documents, if executed, is not to modify an existing agreement between the parties but rather to create an entirely new transaction in which the homeowner receives no consideration from the counterparty (i.e., the company that is falsely implied to be performing servicing functions).
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Thus the falsely labeled “servicer” becomes the apparent creditor. This is the same thing as filling in the name Donald Duck on all the documents. It is a fictional character creating an opportunity for moral hazard. Or, more specifically, it is similar to an endorsement in blank.
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So theoretically, it is correct to denounce the offer of modification as a fraudulent act.
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BUT I have had several situations where the homeowners accepted the modification knowing full well that it was illegal and fraudulent. The reason is simply that the criminal is agreeing to stop hitting you if you sign. Some offers of modifications, in the context of the current erroneous understanding of securitization, discount the amount due up to 90% and even provide for the payment of money to the homeowner.
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Faced with the certainty that the criminal will continue its illegal behavior if they do not sign, homeowners are apt to choose an extortionate demand for “settlement” of a claim that does not exist. As the attorney for such a homeowner, it is hard to advise the client to continue with litigation where the outcome is at best in doubt when the offer is roughly equivalent to the removal of any claim on the nonexistent debt.
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The principal point to remember harkens back to the securitization structure. None of the players involved care one bit about payment of the nonexistent implied loan account. The value of that account, even if it was real, pales in comparison to the superstructure of false representations as “securitization” above it.
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The meaningful settlement, therefore, can only occur when the homeowner is successful at presenting a credible threat to the false securitization infrastructure. The “securitization” players will do anything to keep the securitization structure alive. The value of that runs as much as 40 times the amount demanded in the false claim for enforcement.
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There are several strategies to create that threat. I have discussed those on the blog, and I can give guidance on those in ongoing litigation. But the thrust of ALL the strategies and tactics is dependent upon one simple fact: the company, bank, person or business entity that has been named or implied as owning an unpaid loan account due to them from the homeowner does not own it, and will not warrant or assert that it owns the claim or is in any way directing the claim or otherwise expecting anything of value from the outcome of the enforcement.
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But if there is no demand that they do so, the case will proceed as though their involvement is unnecessary. In most cases, this is a matter of jurisdiction. Jurisdiction is the authority of a court to decide any issue. No court can make a legal decision that it has such authority if it does not. And all acts conducted as though it had authority when it did not are void (NOT VOIDABLE). So jurisdiction can be raised at any time — even on appeal.
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In a case where the court has no evidence supporting the argument that the current “creditor” has purchased the underlying unpaid loan account receivable (as required under 3-203 UCC, adopted verbatim by all states).
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Consideration is also required under Article 3 UCC because a holder is (a) one who has proof of the receipt of the original note before it was declared in default and (b) when it has received the note and the authority to enforce it from someone who had that authority. Very few lawyers or judges have gone so far in analysis to realize that without evidence of such authorization, the case fails if it is contested.

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Foreclosure “default” Lawyers are told to argue AS IF they were representing a holder in due course without ever saying that. It usually works like a charm until they oppose the older lawyers who know the UCC. There is no holder in due course unless the note was purchased for value without knowledge of the maker’s defenses and in good faith. None of those elements are present in modern foreclosures.
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CLICK TO DONATENeil 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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One Response

  1. Thanks for the clarity. I was threatened by lawyers on both sides and by the mediator who conveyed what the judge wanted to be done, that I must agree to modify a “fake” loan.

    The bank won the case with the allowance of fabricated
    documentation to create the illusion that the “fake” loan was real. Post Judgment, I was again offered loan modification and or refinancing and when I refused the bank stated via my attorney that they would remove all evidence of the foreclosure against my name as if this foreclosure never happened.

    As for the proceeds wired to the bank for repayment of that “fake” loan, the bank could not find that alleged debt posted on their books as Accounts Receivable.

    This would explain why banks have to hide such ill-gotten revenues in offshore accounts, lacking legitimate accounting records to explain how they obtained such revenue in the first place. Great article!

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