The thing I hate most about politics is that it is largely based on mob mentality. As a member of a group, there is a tacit or direct message that some person running for office is “your guy or gal.” Most people do not realize that their “membership” is conferred in their own minds. Others in your conceived group will undoubtedly take issue with your credentials and will seek to get others to see you as a non-member. You can look to the right or to the left. That is what happens.

All of that is a distraction from the issue of governance.

It is rare that anyone listens to people like me. I am willing to hold my nose and vote for someone I don’t particularly like if I am relatively sure that they will do something positive about the issues that concern me the most.

But the current polarization reveals the ability of political candidates to manipulate their audience such that they might receive a vote simply because the candidate is not “them.” We have had multiple waves of this thinking in American history.

If we want it to change, then we must vote on something other than hate or contrived superiority. Nobody is superior to anyone else, and wishing or thinking or even orating to the contrary will never make it otherwise.

But it gets even more complicated. For example, the race for Senate in California. If I lived in that state, I would cast my vote for Katie Porter simply because of her long and highly polished track record as an advocate for consumer causes in credit, services, and products.

That is my issue, and I would vote accordingly. And to the trained eye of a trial lawyer, she asks relevant piercing questions that nobody else seems willing or able to ask. Note that she was the one who published a powerful study when she was in Iowa that revealed the absence of any original note.

Her opposition is Adam Schiff, who has his own track record on the issue of the rule of law, national security, and preserving democracy. He is also a good candidate if those are your top issues. You can argue with me about my choice of priorities, but you can’t argue with me or bully me into changing them.

Nearly 30 years ago, a scheme was hatched on Wall Street that changed World History. It was called “securitization,” but only Wall Street gave it that name or label, and nobody else who understood investment banking called it securitization of debt because any trained analyst understood that no debt was being securitized. But the marketing puff told the story that this was a risk-free way of entering the lending marketplace.

As for risk, see 2008.

There was no entry into the lending marketplace because there were no creditors, no risk of loss on “non-payment,” nor any unpaid loan account into which payments were credited even in “foreclosure.”

People like Katie Porter attacked the premise and proved that the scheme was empty. But Wall Street was able to bully their way through by changing claimants from the original lender (no longer involved and was a pretender lender) to the company named as servicer (not servicing), to thinly capitalized aggregators of data who never saw one cent of the money trail, to “trusts” that had no assets and trustees who had no duties.

My view and my politics is that I will vote for any candidate who is devoted and committed to taking down this illegal scheme and breaking up the mega banks so that such entities can never achieve the level of political influence they have enjoyed for decades. I will be just as enthusiastic about voting for a Republican as a Democrat.

People like Katie Porter need to be elevated, in my opinion. People who specialize in us/them mentality should be demoted. We are not a mob. We are citizens in the greatest political experiment in the history of humans.

Filed under: foreclosure | 4 Comments »

So while Mr. Cooper/Nationwide was preptending to process payments, ACI was doing it. I have been railing about this for 16 years. It is a simple problem for the laws of evidence. If Mr. Cooper was not processing the payments, then records offered in court or to the homeowner are irrelevant hearsay — because the lawyer is taking reports generated by ACI servers and offering them as Mr. Cooper  “business records.”

Bottom Line: Those records offered to prove default and financial loss and balance due are dead in the water. But the lawyers will never offer ACI employees or officers as witnesses because that would lead to easy questions and difficult answers. Who are the parties to your contract? Do you have any contractual relationship with Mr, Cooper?

CFPB Takes Action Against ACI Worldwide for Illegally Processing $2.3 Billion in Mortgage Payments that Homeowners Did Not Authorize

ACI will pay a $25 million penalty for data handling practices that negatively impacted nearly 500,000 homeowners whose mortgages were serviced by Mr. Cooper

WASHINGTON, D.C. — Today, the Consumer Financial Protection Bureau (CFPB) issued an order against ACI Worldwide and one of its subsidiaries, ACI Payments, for improperly initiating approximately $2.3 billion in unlawful mortgage payment transactions. ACI’s data handling practices negatively impacted nearly 500,000 homeowners with mortgages serviced by Mr. Cooper (formerly known as Nationstar). By unlawfully processing erroneous and unauthorized transactions, ACI opened homeowners to overdraft and insufficient funds fees from their financial institutions. Today’s order requires ACI, among other things, to pay a $25 million civil money penalty.

“The CFPB’s investigation found that ACI perpetrated the 2021 Mr. Cooper mortgage fiasco that impacted homeowners across the country,” said CFPB Director Rohit Chopra. “While borrower accounts have now been fixed, we are penalizing ACI for its unlawful actions that created headaches for hundreds of thousands of borrowers.”

ACI (NASDAQ:ACIW) is a publicly traded firm headquartered in Elkhorn, Nebraska. The company offers payment processing services across a wide range of industries including utilities, student loan servicing, healthcare, education, insurance, telecommunications, and mortgage servicing. ACI counts more than 6,000 firms as customers, and the company claims to process more than 225 billion consumer transactions annually. The company processes mortgage payments through the Automated Clearing House (ACH) network. For 2022, ACI reported revenue of $1.422 billion and net income of $142 million.

Mr. Cooper was one of ACI’s largest mortgage servicing customers until at least 2021. Mr. Cooper services the mortgages of more than four million borrowers and collects their monthly mortgage payments. Many homeowners with mortgages serviced through Mr. Cooper chose to schedule their monthly mortgage payments using ACI’s Speedpay product, which allowed the company to automatically transfer homeowners’ authorized mortgage payments from their personal bank accounts to Mr. Cooper.

On Friday, April 23, 2021, ACI conducted tests of its electronic payments platform. But instead of using deidentified or dummy data in its tests, ACI used actual consumer data it had received from Mr. Cooper, which included names, bank account numbers, bank routing numbers, and amounts to be debited or credited. During its performance testing, ACI improperly sent several large files filled with Mr. Cooper’s customer data into the ACH network, unlawfully initiating approximately $2.3 billion in electronic mortgage payment transactions from homeowners’ accounts. None of the nearly 500,000 impacted borrowers anticipated, authorized, or were aware of these transactions until after they had been processed by their respective banks.

On Saturday, April 24, 2021, impacted account holders began noticing inaccuracies in their account balances. Immediately, people began experiencing negative financial consequences. At one bank, for example, more than 60,000 accounts experienced more than $330 million in combined unlawful debits by that morning. Among these account holders, approximately 7,300 had their available balances reduced by more than $10,000—overnight.

The CFPB found that ACI’s actions violated federal consumer financial protection laws, including the Consumer Financial Protection Act and the Electronic Fund Transfer Act and its implementing rule, Regulation E. Specifically, the company harmed homeowners by:

• Illegally initiating withdrawals from borrower bank accounts: ACI initiated approximately 1.4 million ACH withdrawals on behalf of Mr. Cooper from homeowners’ accounts on April 23, 2021, without a valid written authorization. This included initiating electronic fund transfers on days when they were not scheduled and initiating multiple transfers from the same accounts on the same day.
• Improperly handling sensitive consumer data: As one of the largest global providers of payment services, ACI handles sensitive financial data of millions of homeowners and other consumers. The unlawful transactions, and the subsequent harm they caused, occurred as a direct result of the company’s inappropriate use of consumer data in its testing process. Specifically, the company failed to establish and enforce reasonable information security practices that would have prevented files created for testing purposes from ever being able to enter the ACH network.

This is the CFPB’s first action addressing unlawful information handling practices in processing mortgage payments. Last year, the CFPB issued an enforcement circular describing how shoddy data handling practices can constitute violations of the Consumer Financial Protection Act.

Enforcement Action

Under the Consumer Financial Protection Act, the CFPB has the authority to take action against companies that violate federal consumer financial protection laws, including engaging in unfair, deceptive, or abusive acts or practices. The CFPB also has authority to enforce the Electronic Fund Transfer Act and its implementing rule, Regulation E.

The order requires ACI to:

• Stop its unlawful practices: ACI must adopt and enforce reasonable information security practices, and is prohibited from processing payments without obtaining proper authorization. It is also prohibited from using sensitive consumer financial information for software development or testing purposes without documenting a compelling business reason and obtaining consumer consent.
• Pay $25 million in penalties: ACI is required to pay a $25 million penalty to the CFPB, which will be deposited into the CFPB’s victims relief fund.

Read today’s order.

Consumers can submit complaints about mortgage products and other financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

Employees who believe their companies have violated federal consumer financial protection laws, including the Electronic Fund Transfer Act and its implementing rule, Regulation E, are encouraged to send information about what they know to whistleblower@cfpb.gov. To learn more about reporting potential industry misconduct, visit the CFPB’s website.

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The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.

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Here is an exercise that enables readers to teach themselves the substance, tactics and strategies that can and will produce verdicts and judgments for homeowners —- if the tactics and strategies are applied in a timely and proper manner. This is how I do it when I win.

Get paper and pencil and get together with family and friends who are sharing this experience with you.

Brainstorm all of the things that must be true if the claim against you is real. Do NOT use this session as an open mike to imagine defense strategies that you know nothing about. List the things that have been said, and then create a sublist that describes all of the events and transactions that must have occurred in order for that to be true.

Start with what you believe is the debt, the underlying obligation, the note and the mortgage. What MUST be true if the claim is real?

The first strategy is to refuse to admit anything said against your interest. You either deny such allegations in judicial actions, or you attack such implied allegations in nonjudicial actions.

Next, you start asking questions about what evidence the opposing lawyer can produce that he or his “client” has that supports the truth of the matter asserted as you have outlined it in this exercise.

Next, when they offer evasive answers to simple questions in discovery, ask a lawyer about motions for sanctions, motions to compel, motions in limine, evidentiary sanctions, economic sanctions, and motions in limine.

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Whether you watch TV, listen to the radio, or stream news and opinions, you will consistently hear the same subliminal message: debt is better than wealth. And people behave accordingly. Nearly all consumers, including the homeowners that I offer some relief, believe that their FICO score is their most valuable attribute. A savings account with real money in it is a distant second.

In case you are not getting the message, having money is far better than owing money. But the banks, especially those on Wall Street who originate all installment payment transactions, have convinced nearly everyone that they are fine as long as they can spend money even if they don’t have it.

Selling the American worker on this way of non-thinking has been the key to keeping wages from increasing to compensate for inflation. It also keeps the minimum wage artificially depressed with the help of the U.S. government, which rewards companies for putting small businesses out of business and unfairly competing in the marketplace because their low wages are offset in part by government programs for food and health care.

Small companies do not get that support from the government. But their employees get paid less because everyone is getting paid less. So workers get access to cash through the appearance of debt transactions, and they get direct monetary assistance from the government. Both are a mirage that drives the typical worker who was able to support a family of 4 on one income into a horrific c cycle of debt and repression.

Intergenerational wealth generally arises when one generation has actual money instead of debts. The most pernicious of the attributes of this scheme is that people are encouraged to buy items that are labeled as “on sale.”

Putting aside the question of retail pricing, if you buy a TV for $2,000 cash it goes without saying that the price will never change retroactively or forward-looking. But if you have been sucked into the morass of debt, you are being sold payments instead of price. That TV on sale could end up costing you $6,000 or more with payments. And that is the equivalent of $4000 in lost savings, which also reduces the retirement benefits of each worker.

And since payments automatically sound less than the price, you buy something for an installment contract that you will never be able to pay off unless you get access to more credit and more help from the government. It’s human nature.

The banks and other companies have also trained us to sign contracts without reading them and without having any idea of their contents. They make sure of that by not giving us enough time to read them if we want the good pur service being sold. Just click “agree.” But that is not disclosure.

In homeowner transactions, federal law requires that a good faith estimate and other summary be represented and there is plenty of readily available information on government websites. The intention of Congress back in the 1960s was to remove the “gotcha” aspect of mortgage loans and other installment loans.

The problem for homeowners is that they did receive disclosure. But the disclosure was for a transaction that did not exist. But it was dressed up as a conventional mortgage loan transaction. Wall Street makes money by selling securities, not by loaning money.

The transaction with homeowners was a securities scheme, not a loan transaction. Homeowners were tricked into buying homes based on payments and then found themselves in debt far beyond their means. As always, they were portrayed as predators who had borrowed more than they could afford.

But they didn’t borrow anything, and not a single one of them entered into any of the proposed transactions in which they assumed responsibility for the viability of the transaction. Federal law (TILA) makes that the lender’s responsibility. It is unambiguous and explicit because of the imbalance between what a homeowner generally knows about these transactions and what the originator knows.

To put it bluntly, homeowners know nothing, and Wall Street banks know everything. The protections under federal law do NOT apply if it is not a loan transaction. If it is a securities scheme, it is either governed by the SEC or not at all. Since the SEC never understood what Wall Street was doing (see Chairman Alan Greenspan’s statements in the late 1990s and late 2000s), the Federal Reserve was relying on market forces to make any necessary corrections.

But as Greenspan admitted later, market forces do not operate outside of a fairly level playing field, and they were not an active component of what was falsely labeled as “Securitization.” In simple language, market forces were not operating because the homeowners had no idea how to comprehend the transaction, and neither did most lawyers.

If the disclosure rules had been followed and applied to nonlending transactions like the ones offered to homeowners, they would have told the homeowner that the self-described lender was not loaning any money and that the closing agent was getting money from unknown sources.

The homeowners would also have been told that the people in charge of the unknown sources were selling securities derived from the appearance of the value of the note and mortgage. And they would have been told that there was no party who was a responsible lender because there was no unpaid loan account receivable created on the books of any person or business entity.

This would have alerted lawyers and other advisers to the homeowner that the homeowner could not rely on the express provisions of the lending laws requiring the “lender” (i.e., pretender lender) to take responsibility for the viability of the transaction and accuracy of the appraisal. It would have been obvious that nobody was accepting the possibility of any risk of loss on the transaction.

Sophisticated homeowners or any good transaction lawyer would then have asked for further information and confirmation about the nature of the transaction. Why was there no loan account? Why was there no lender?

Upon learning that the true nature of the transaction was securities issuance and trading scheme netting the investment banks multiples of the amount transacted with homeowners (yes, all compensation and profits would need to be disclosed), good transaction lawyers would have asked for consideration paid to their client. And the consideration would have been an amount far in excess of the amount transacted since that needed to be paid back with “interest.”

In the absence of payment of a fee for launching the securities scheme, the transaction would be void. The promise to make payments is thereby unenforceable for lack of consideration.

And that is why the lawyer who initiates the foreclosure process is unable to corroborate the most basic element of the claim — i.e., a process to achieve restitution for an unpaid debt. Without a loan account, there is no debt.

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The expression “there ought to be a law” is not the same as there is a law. People who argue lack of precedent have not done legal research and have not performed legal analysis because they do not have the knowledge, training  and licensing to do so. Or, in the alternative, they are too lazy  to do the work. Their opinions, therefore, are political — not legal (even if they are lawyers).

For those who argue that homeowner distress is both inevitable and even right, I invite them to start seeking healthcare with unlicensed people who have a marketing idea but no training in medicine.

I am still dealing with laypeople and even lawyers who continue to spout opinions without researching the applicable law and procedure required to successfully litigate a foreclosure case against a lawyer seeking foreclosure against a homeowner. Even some of my oldest followers continue to do this, thus undermining the motivation for homeowners to fight a winnable case.

In response to the recent article by Lance Denha whom I selected to move in my place as I fully retire from the scene, many comments make blanket statements that remind me of the very famous statement by Daniel Patrick Moynihan. You are entitled to your own opinions but you are not entitled to your own facts. 

Making things up that fit your political views is not the same thing as providing the kind of foundation that is required in court to establish the truth of the matter asserted in the courtroom.

In every attempt to invoke the process of foreclosure, the truth of the matter asserted has little to do with the note, which is secondary. And it has little to do with the mortgage lien, which is tertiary.

In every foreclosure action, the truth of the matter asserted is alleged or implied (i.e., claimed) to be that somebody suffered an economic injury (default) as a result of the action or inaction of the homeowner. If that is true, then the provisions of the note and even the note itself can be used as evidence of the existence of the underlying unpaid debt and the terms upon which it should be repaid.

In turn, if it is true that the homeowner owes an unpaid debt to the party named by opposing counsel, then the homeowner’s obligation of repayment has been breached, and the homeowner usually can and should lose.

If it is not true that the homeowner owes an unpaid debt that is legally due to the party named by opposing counsel, then it is legally impossible for a legal default to be legally declared. It is a legal nullity to do so. Without a default, there is no legal case that a judge can consider even if the judge believes that somehow this argument is allowing the homeowner to get away with something because of a “gimmick.”

And if it is not true that any money is due to the party named by the opposing counsel as the complaining party, then the note and lien are completely irrelevant. Their legality does not matter one iota. And that is because it is universally accepted that debts are not free-floating objects in an economic universe in which anyone can claim to collect them.

In such events, defects in the creation, transfer, delivery, and ownership of the note and mortgage merely distract from the truth of the matter asserted.

Even the existence of the debt is irrelevant if there is no allegation and corroboration presented that the debt is owed to the party named by opposing counsel.

But homeowners and their lawyers can and do waive the right to challenge such false claims when they fail to deny the truth of the matter asserted and fail to challenge the pleadings and proof offered by opposing counsel.

The court lacks authority or jurisdiction to hear the case because, in the constitution, there is a requirement that must be met to get into the courtroom. There must be a justiciable issue. There is no justiciable issue unless one party alleges they suffered harm and that the harm was caused by the opposing party.

You can’t legally allege and prove harm when you never owned the debt in the first place. Ownership of the note might mean ownership of the underlying debt, but only if it is purchased for value in good faith.

All of that is worthless if you agree in litigation to talk only about the note and the mortgage without mentioning the underlying obligation. And it is especially worthless if you admit that some third party is an authorized servicer whose records are proper business records that escape the bar of the hearsay rule.

I think all credible defense lawyers would agree that a “yes, but” defense is the equivalent of asking their client to be executed figuratively or literally.

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The start of every “loan” transaction with the homeowner (except in rare occurrences) is a lie. The enemy of success for the homeowner is himself. If he believes that the statements he receives and the nonpayment claims, together with the imposition of fees, are true, the homeowner will fail to employ defense strategies and tactics that any normal civil or criminal defendant would use. Such a homeowner will admit and even emphasize the existence of a nonexistent default.

Despite various presentations of irregularities in the paper documents presented in support of the illegal, false claim, the homeowner will lose nearly every time if they assume that the claim against them is true. And presenting an “expert” will never help that gullible homeowner.

Lawyers who subscribe to that lazy and unresearched view will agree and seek a settlement in exchange for earning a few dollars in legal fees.

Together they will often present an “expert report.” And that report is nearly always either thrown out completely or ignored.

WHAT IS AN EXPERT? — WHAT IS THE LEGAL ISSUE?

There is a technical definition and a pragmatic one. The technical definition is that an expert is someone who can demonstrate superior knowledge that nobody other than those possessing his credentials would know or understand.

In foreclosure litigation, there is no such person. And the reason is that the issue is not what most homeowners think is the relevant and controlling issue in the litigation. It doesn’t matter that the scheme for the issuance and sales of unregulated securities is illegal or even fraudulent. All of that is a truthful allegation, but it has no relevance to foreclosure.

The only issue in foreclosure cases is whether the claimant has suffered a default. Contrary to popular belief, the issue is not whether the claimant has issued a declaration of default or whether anyone has issued such a declaration on behalf of the claimant.

Since the issue is whether there has been a default suffered by the name of the claimant, the appropriate response is to demand corroboration of the default. But since nearly all homeowners and nearly all lawyers, know that the homeowner stopped making payments voluntarily or involuntarily, they stipulate to the prayer that a default has occurred.

If I stop making payments to you, it may be because I suddenly realized you were not entitled to any payments. The fact that I stopped making payments is not a default unless I owed money to you. Part of the proof of that would be showing that the named creditor is, in fact, receiving the proceeds of payments tendered by the homeowner until the payments stop.

But it is true that by making voluntary payments on a nonexistent debt, you create an inference and even a presumption that the debt exists for legal enforcement and the payments were due to the named creditor or claimant. But a claimant is not a creditor if it does not possess ownership of an unpaid account receivable due from the homeowner.

HOW HOMEOWNERS UNDERMINE THEIR DEFENSES BY CALLING “EXPERTS”

If you call a witness as an expert, you immediately trigger various legal challenges and tests to determine whether or not the witness is in fact, an expert as I have generally described the attributes above. This leads to generally unsuccessful litigation.

Homeowners like to call forensic auditors, as “experts” because it sounds better to them. They think it will make the Judge pay closer attention. Nothing could be further from the truth. Even if the judge allows the testimony of the witness as an expert, he, or she may be doing so in an abundance of caution to avoid reversal on appeal. That does not mean that the judge is giving the slightest weight to anything that they have heard. The opinions of the expert generally equate to a conclusion of law, which is the sole province of the court to determine. There is no legal support for accepting the conclusions of law announced by an expert witness.

But there are plenty of people that you can call as fact witnesses, who have adequate credentials, experience, and track records in courts of law, who can get the attention of the judge. Bill Paatalo has been highly effective in this capacity as a licensed private investigator. Such witnesses will often be able to testify that the reference to a trust is not corroborated by any evidence available in the public domain or otherwise.

Hence the reference to a trustee for the trust would be irrelevant as a legal conclusion. But you don’t need the forensic auditor to say that, because most judges would understand that with very little prompting.

HOW DID I WIN WHEN I WAS LITIGATING?

I won by showing that there was no foundation at all in the proof offered at trial for the proposition that the trustee on the trust had ever received, purchased, or possessed ownership of the underlying obligation, note or mortgage. The best the opposition has ever been able to do is to argue constructive possession by parties. And those parties fail to corroborate their relationship with the trustee, which is an essential ingredient in establishing the relevance of the trust.

So the moral of the story is, is there anyone who tries to go into court with guns blazing, alleging fraud and other illegal activities generally fails in their attempt. That’s because the evidence to support those allegations live strictly within the records and ledgers of parties, who will never let you see them. But the real reason is that such a fraud and illegal activity is irrelevant to the issue: does the homeowner owe money to the named claimant, a legal creditor?

Homeowners and their lawyers fear asking that question because they think they know the answer. But they don’t know the answer and should not be concerned with it. A criminal defense lawyer does not care whether his client might be technically guilty or innocent. The defense lawyer looks for ways to defeat the claim. That’s the way our system works.

PRACTICE HINT: most people get tripped up by the possession of the note. First of all, you should remember that the original note as almost certainly been destroyed, and whatever has been presented is a copy of a re-creation of the promissory note and very possibly a fabrication because nobody can find an original image.

Second, there is an enormous difference between saying, you possess something and corroborating delivery from someone who had a right to possession. Saying it doesn’t make it so. But if you admit that the statement is true, you have just created the law of the case.

Third, the fact that you possess a promissory note, even if it was properly delivered, does not mean that it was delivered to you with the intention of doing anything other than delivering it to someone else. Article 3 of the uniform commercial code makes that exact point, which is congruent with the national code that preceded it.

In other words, for hundreds of years, the lawyer has been that possession of the note does not allow for enforcement unless the note was delivered along with the authority to enforce it. And that authority to enforce. It must come from somebody who either owned the underlying obligation or who was otherwise authorized to enforce the promissory note.

Upon any legal or logical analysis, ultimately the authority to enforce the note can only be derived from authority issued by the owner of the underlying death. Contrary to the belief held by lawyers and judges who slept through UCC transactions in law school, the promissory note has never legally been considered the debt, just as the mortgage has never been considered the debt. And the transfer of the mortgage lien, which is the subject of every foreclosure, action, is only effective if there has been an effective legal transfer of the underlying debt.

THAT IS HOW YOU WIN

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As to foreclosures, homeowners face an enemy that is very challenging to defeat: themselves. As long as they believe the lie, homeowners will not retain lawyers to win the foreclosure cases. In fact, they will not even look for an opportunity to defend against illegal claims.

see https://wallstreetjournal-ny.newsmemory.com/?publink=05d326cad_134abfa

I started writing about home financing back in 2004. It was obvious something was very wrong. Two factors alerted me to what I eventually identified as a horrific problem in our economy.

As a lawyer, I was disturbed by the fact that people were not using original documentation anymore. They insisted on using copies and refused to exchange original documents with original signatures. It does not take a rocket scientist to understand that this opened the door to moral hazard and illegal behavior. Although the law allows you to plead on a copy it requires the proof to be the original document, or the claim fails.

The second factor was that newly formed, thinly capitalized companies were posing as lenders, even though they had no money, capital, or source of capital. These companies were appearing on the documents at the closing table, with the closing agent, who knew nothing about the transaction, or even the parties that were involved. In addition, community banks and regional banks were starting to act as feeders instead of lenders. And they were all making more money than was commercially feasible for a transaction that purported to be a loan to homeowners.

Back in the 1990s, I had several friends who had stayed on Wall Street. They were all starting to make more money than a securities broker has ever made in history. They all explained their sudden wealth with one word: securitization. Brokers who were making a comfortable salary in six figures suddenly were being paid 7 figures. I knew what was happening. When I was an investment banker on Wall Street, I attended a meeting in 1970 in which this version of “securitization” was first discussed. It was obvious to me that it was now being used, even though it violated practically every law governing securities, homeowner transactions, and finance.

As most of the readers of this blog already know, I continue to follow the slow-motion train wreck that I had predicted two years earlier, and which I explained in detail in my first CLE seminar that I presented in Santa Monica, California. I had two goals. The first was to stop illegal foreclosures. I could do that case-by-case, but not statewide, regional or national.

The second was to alert everyone that the entire economic game board has been tilted toward Wall Street, and that the sheer weight of it would eventually slow or stop economic growth. Virtually every institutional and non-institutional player had converted their entire business plan to being a feeder and participant in the new version of securitization.

The entire reason for allowing Wall Street to exist and operate was that they were needed to provide capital in a capitalist society. Wall Street became a juggernaut, taking over half of GDP despite having a place where they were only the source of 16% of GDP. They accomplished this by subterfuge — pretending to enter the lending marketplace. And the easiest victim was an uninformed homeowner or prospective homeowner.

So today, capital is generated for pretender loans to consumers instead of driving capitalist needs.

Of course, Europe and the rest of the world are heavily influenced by Wall Street. But only this country suffers from a political death grip exercised by the leaders of the major investment banks. Those firms operate on a business plan that includes an even requires throwing lesser firms (even if they are large) under the bus.

Now, for the first time, it is Europe, and not the US, recognizing the danger of having most of its institutional and non-institutional players relying almost entirely on the trading of instruments that neither acquire nor convey anything.

All of the trading is based upon a lie. The certificates do not represent any rate, title, or ownership in any debt, note or mortgage. The certificates do not represent any status as a beneficiary of any trust. The certificates merely represent an IOU from an investment bank, which has made a conditional discretionary promise to make periodic payments to the holder of the certificate.

As to foreclosures, homeowners face an enemy that is very challenging to defeat: themselves. As long as they believe the lie, homeowners will not retain lawyers to win the foreclosure cases. In fact, they will not even look for an opportunity to defend against illegal claims. Thus they ensure defeat and disaster for themselves and even argue for it.

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And the secondary question is why private Bar associations should be empowered to enforce their own rules often treated as law — especially when their decisions are so heavily influenced by political considerations. The contrived ignorance of the Bar is the most important factor in pereptuating the fraud described in this article.

In the old days (early 1990s and earlier), it was all very simple. I had requirements if a bank or hard money lender came to my office seeking foreclosure. It’s not just that I refused to file a case with no merit. The issue was that without proof of the actual balance due showing on the creditor’s ledger and proof of default, the judge would dismiss the case, even if nobody opposed it. In my career as a trial lawyer, I personally handled more than 500 foreclosures of every type imaginable.

I either won or settled every time because I would always make certain that we were suing the right defendant on behalf of the right plaintiff on the right debt and the right balance due. So did every other lawyer. On the defense side, I continue to win almost every time for the same reason in reverse — the underlying legal obligation is absent.

Today it is different. Each attorney is protected by a doctrine called litigation immunity. Each litigant is protected by attorney-client privilege unless the client demands action that constitutes the commission of a new crime or violation of the civil code. Today (and for the last 25 years), lawyers are filing papers in an attempt to invoke legal processes in which the remedy is the forced sale of the property. But they have no reason to accept the instructions they receive — and they never ask.

When challenged, their defense is that they had no information that would lead them to believe that they were serving false legal papers. Their problem is that they have no reason to believe in the merits of the case they are filing, and they know that now — despite the game of musical chairs in which the task of filing such fraudulent actions is rotated from player to player.

The applicable ethical rule is that they should only advocate a cause in which the lawyer believes there is a legal possibility of success. Instead, the lawyers who file foreclosures do so without any contact with the implied client and without any original source information about the status of the debt. All they are given is hearsay that is struck whenever it is competently challenged in court. They are being used as players in the scheme to force the sale of homes, using the proceeds to reward the players instead of reducing the implied debt.

In short, they don’t know and they don’t care. No such lawyer ever speaks to anyone at U.S. Bank, even if U.S. Bank or U.S. Bank trust is used as the name of the Plaintiff. No such lawyer has any reason to believe that any tryst exists or that U.S> Bank has created a trust account into which there was a deposit of ownership of an unpaid account due from the homeowner. It is all a sham to make the Judge believe that this is an institutional foreclosure. In truth, it is not institutional, and it is not really a foreclosure because none of the players has any legal claim to the lien.

The real client of the lawyer who files foreclosure papers is a regional law firm through whom electronic data and instructions are passed. The source is not known, and nobody ever tells the lawyer that the homeowner owes any money to any of the players or that any player has suffered a default or loss. But if the lawyer files the paper and argues as if the paper was real, he or she earns a salary, and the law firm makes a  huge profit.

Background — The 1960’s when everything changed. During that time, we had some great revelations about Wall Street. We found out that they were trading and borrowing on stock that had been entrusted to them to hold in “street name.” Dozens of companies went out of business because the market had a hiccup, and suddenly these brand name securities brokerage firms had to account for all (not some) of the stock certificates that had been entrusted to them. In many cases, the firms did not know the location or the current legal owner of the stock certificates. We saw the same thing happen in 2008 for similar reasons.

The 1960’s were also the times when several investors like Warren Buffet emerged with a single purpose — and it was named “value investing.” This was based on in-depth securities analysis. And once you decided that the company was sold and had a good future ahead, you bought the shares of stock and held them indefinitely regardless of market conditions.

This violated the pressure for instant gratification with overnight profit from day trading. But it also yielded a far greater return than any of the trading promoted by most ignorant registered representatives (as they were then called) who were ignorant as to the value and trained only to sell a tagline (now known as a meme).

Another value investor was Max Heine, who made hundreds of millions of dollars in the 1960’s buying bonds from distressed corporations.  By performing or directing close securities analysis in these companies, Max correctly concluded that the market price of the bonds was trading far under the value of the bonds because the company would likely pay all or part of the principal due on the bonds. Max hired me because of a bit of nepotism and favors with my family.

Filed under: foreclosure | 1 Comment »

There has never been any doubt that the “certificates” that were created and issued under the label of “derivatives” or financial instruments. They were financial instruments. They promised the buyer a schedule of payments extending indefinitely into the future. The problem has always been that the certificates conveyed no interest in any asset. And in the field of residential lending (and other installment contracts) no certificate ever conveyed any rate, title or interest to any debt, note or lien issued under the signature of a homeowner.

Much of this subterfuge was accomplished because the marketplace for trading search certificates or derivatives was a closely held private affair totally controlled by the investment. By avoiding the normal public exchanges and regulations, the necessity for accurate and transparent disclosures to investors and homeowners were treated as annoyances that were meant to be ignored.

The umbrella under which all this activity occurred was called “securitization.” The instruments that were issued under that umbrella word financial instruments. Those financial instruments often has no intrinsic value at all and no market value other than the pretensions that were supported in the closed private marketplace in which they were apparently “traded.”

None of the regulators in the European Union ever trusted the securitization infrastructure and none of them trusted the source of information regarding the securitization infrastructure or any trading based on representations coming from Wall Street. They’ve now taken a step to force trading of such instruments onto public exchanges. And that will cause or trigger a requirement of disclosure on a level that Wall Street does not want.

Search disclosures would force the rating agencies to reduce the rating for the “certificates” and implied “trenches.” This is in turn will remove stable managed funds from purchasing the instruments and the “market” will collapse. Wall Street threatens that such a scenario would be a calamity on the scale of the US debt ceiling that was treated as a crisis. But the truth is that the threat of freezing up all lending, even if pursued, would break the hegemony enjoyed by the major investment banks and not break the bank anywhere else.

Securitization is a valid innovation and finance. The 2008 crash and the continuing undermining of the US economy and the European economy could be avoided entirely if the free market had free information.

see https://www.investopedia.com/terms/m/mifid-ii.asp

Filed under: foreclosure | 4 Comments »

Because most lawyers and homeowners think they “know” the self-evident answers, they don’t ask the questions that would completely destroy the case against them.

Just make a note that unless you ask, there is no obligation to give you answers. And unless you seek enforcement, the violation of the rules will go unnoticed and will not be a proper subject on appeal.

You must ask in a timely, appropriate and proper manner. Your question must be clear as a bell. If your question is vague, then that invites evasive answers.

So here is my response to the lawyers litigating a bankruptcy where a false proof of claim was filed:

*

Motion to strike. It does not prove a claim for a creditor. The putative creditor did not file this. An agent claiming undisclosed authority signed it.

*

Motion to Strike Paragraph 7: The “proof of claim” is based on an uncorroborated payment history generated by unknown sources rather than the alleged unpaid loan account.

*

Motion to Strike Attachment to Proof of Claim: The “proof of claim” is based on an uncorroborated payment history generated by unknown sources rather than the alleged unpaid loan account. The attachment is a Payment History from an undisclosed source not a copy of the unpaid loan account from the creditor.

*

Discovery: Subpoena Duces Tecum to US Bank Trust National Association to produce records custodian employed by USBT and produce a certified copy (under oath) of the trust account in which the alleged unpaid account is held as an asset for beneficiaries of a trust.

*

Discovery: Subpoena Duces Tecum to US Bank Trust National Association to produce records custodian employed by USBT and produce a certified copy (under oath) of the unpaid account held by USBT in the aforesaid trust account in which the alleged unpaid account is held as an asset for beneficiaries of a trust.

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Discovery: Subpoena Duces Tecum to US Bank Trust National Association to produce records custodian employed by USBT and produce a certified copy (under oath) of the servicing agreement appointing SN Servicing to collect money from the debtor and describing the disbursement of such money.

*

Discovery: Subpoena Duces Tecum to SN Servicing to produce records custodian employed by SN and produce certified copy (under oath) of the records and data relating to the physical or electronic collection of money by SN with respect to the subject alleged unpaid loan account.

*

Discovery: Subpoena Duces Tecum to US Bank Trust National Association and SN Servicing to produce records custodian employed by USBT and SN and produce certified copy (under oath) of the creation of an unpaid loan account owned by Countrywide Savings Bank, and the alleged or implied sale of said account by Countrywide.

*

Discovery: Subpoena Duces Tecum to US Bank Trust National Association and SN Servicing to produce records custodian employed by USBT and SN and produce certified copy (under oath) of any merger or acquisition agreement that resulted in the payment of value in exchange for ownership of the alleged unpaid loan account.

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Discovery: Subpoena Duces Tecum to US Bank Trust National Association to produce records custodian employed by USBT and produce certified copy (under oath) of the alleged loan account starting with the date of creation of the unpaid loan account on the books and records of Countrywide and continuing up to the date of response showing the current balance allegedly due to USBT.

*

Discovery Interrogatories: If you do not have direct access to the information demanded in the preceding Subpoena Duces Tecum, produce an officer of USBT who has personal knowledge of the identity of the person(s) who do have such knowledge and who is familiar with the trust accounts held under the referenced trust.

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Discovery: Subpoena Duces Tecum to US Bank Trust National Association to produce records custodian employed by USBT and produce certified copy (under oath) of any loan account record file and records transferred to USBT relating to the subject debtor.

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Discovery: Subpoena Duces Tecum to US Bank Trust National Association to produce records custodian employed by USBT and produce a certified copy (under oath) of the trust account in which the alleged unpaid account was purchased for value, including the date and parties to the transaction.

*

Discovery: Subpoena Duces Tecum to Bank of America to produce records custodian employed by BOA and produce certified copy (under oath) of the creation of an account in which the alleged unpaid account was purchased for value, including the date and parties to the transaction.

*

Discovery: Subpoena Duces Tecum to Bank of America/Countrywide to produce records custodian employed by BOA and produce certified copy (under oath) of the under which MERS was instructed to execute documents to be in the recorded chain of title for the subject property of the subject debtor.

*

Same series for additional trusts, trustees and servicers.

Filed under: foreclosure | 1 Comment »

The practical effect of denial of discovery demands by the trial court is a ruling in favor of the party making a claim against the homeowner — even if the party had no standing. The homeowner is forced to litigate against a ghost — like going to a gunfight with no guns and no bullets. Most homeowners cannot afford to enter into a needless period of litigation with a party who lacks standing. Hence the ultimate result is the loss of a homestead to a fake claimant who may not even exist.

We all know the situation. Trial judges are tasked with moving their docket as quickly as possible. They frequently stray from substantive and procedural law requirements in the interest of closing out the case.

If the trial judge believes their order will not be reversed, they will be inclined to deny (or even ignore) any motion to enforce discovery demands in foreclosure cases. It is indisputable that they will continue to do so because they believe that the discovery demands are merely a gimmick or device for a borrower to escape liability on a legitimate debt.

Homeowners and their lawyers reinforce this. When they admit, directly or indirectly, that the implied debt is real and that the Plaintiff or beneficiary actually owns the implied debt, the trial judge has no reason to look elsewhere.

As a result, homeowners are lured into presenting a defense based on errors in servicing rather than errors in claiming anything. The fake claims arising from the cloud of fake documentation constituting the world of “securitization” leave homeowners without the knowledge or access to knowledge that would reveal the true nature of their transaction and its status.

In fact, homeowners have so little knowledge about the nature of the transaction that they have no reason to question what they have been told. This is the essence of fraud. Homeowners reasonably believe what they are told about their transactions. And they are told whatever will most benefit the speaker or seller.

Most con men say that the mark cons themselves. They get only bits of information and then fill in the balance with imaginative components that were neither stated nor otherwise factual.

Securitization is a word that was introduced in the 1990’s under the rubric of Wall Street entering the lending marketplace. But in fact, Wall Street was only looking for new and creative ways to convert the money of investors and homeowners to the off-shore accounts of the investment banks.

Most people who sign documents at closing with a party posing as a bank or non-bank institution are completely and totally ignorant of what is contained in those documents. In recognition of that, Congress passed the Truth in Lending Act in 1965, and many states followed suit. But none of that addressed the real problem — i.e., that nobody understood what the banks and non-bank institutions were doing.

Thus truth was required, but only the investment banks have known anything about the truth since the mid-1990’s. Enforcing the truth requires a complaining party who understands how they have been injured. So homeowners are forced to defend based upon more simple premises, to wit: the nonexistence of the underlying debt.

If discovery demands are framed properly and if they are filed within the window of time in which discovery is allowed, compliance is mandatory. But enforcement of that mandatory obligation is entirely up to the homeowner.

Any judge will ignore the failure to respond or the attempt to serve evasive responses unless the homeowner brings an appropriate and timely motion for enforcement, and appropriate and timely motions, for the law of the case, to include inferences of fact, the application of which rebuts and undermines any presumption arising from the apparent validity of facially valid documents.

Without making it clear that the homeowner does not accept a single premise offered by the attorney representing the “plaintiff” or “beneficiary”, the judge will proceed on the assumption that the issue is an unpaid debt from which the homeowner is trying to escape.

Therefore, discovery demands must be served within the context of rejection and denial of any argument, assertion, or allegation, implying the existence of an underlying obligation due from the homeowner to the “plaintiff” or “Beneficiary.”

Assuming the discovery demands maintain those central issues to the defense, then the failure to provide a clear, direct answer undermines the presumption of an existing debt due to the “Plaintiff” or “Beneficiary.”

Suppose the opposing lawyer is arguing that there is an unpaid debt (besides being a “holder” of the note”). In that case, the homeowner has every right to see the unpaid account on the book of the “plaintiff” or “beneficiary.” If they can’t or won’t provide corroboration of the debt, they lose.

But the judge is likely to deny or restrict such discovery simply because the judge doesn’t believe that it will lead to any admissible evidence. And the judge is right; it won’t because the opposition will never admit they don’t really have a claim.

Educating the judge on the scary qualities of securitization is the blind leading the blind. Except for investment bankers like myself, there is no lawyer, homeowner or judge who could even begin to understand what really happened. That is precisely why we failed to regulate the activities until the entire system crashed in 2008. And it is precisely why it will happen again.

Any properly framed discovery demand that asks about the existence and status of the implied unpaid loan account on the books of the implied creditor must be granted enforcement by the court. To do otherwise would be a denial of due process.

When the court refuses or fails to enforce properly framed and timely filed motions to enforce those demands, it is my opinion that the homeowner and their lawyer should consider a demand for review by the appellate court. The demand is the same as certiorari: departure from existing laws and rules, irreparable injury, and no reasonable possibility of correction on plenary appeal.

The departure (due process) is obvious.

The irreparable harm must be argued. The practical effect of denial of discovery demands by the trial court is a ruling in favor of the party making a claim against the homeowner — even if the party had no standing. The homeowner is forced to litigate against a ghost — like going to a gunfight with no guns and no bullets. Most homeowners cannot afford to enter into a needless period of litigation with a party who lacks standing. Hence the ultimate result is the loss of a homestead to a fake claimant who may not even exist.

The correction on plenary appeal basically never happens. No homeowner is ever returned to property that was illegally taken except in rare instances.

PRACTICE HINT: The framing of a motion for enforcement, sanctions etc, relating to discovery demands should be framed as the draft for the motion for appellate review of an interlocutory order. This informs the judge of your thinking and the possibility of reversal.

===========

DID YOU LIKE THIS ARTICLE?
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.
CLICK TO DONATE

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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FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
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CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
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CLICK HERE TO ORDER CASE ANALYSIS 
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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.

Filed under: foreclosure | 1 Comment »

Here is a case where a lawyer took the trouble to parse the words and documents down to their essence. And he won under circumstances where virtually all other attorneys and judges would have predicted defeat. This is what I have been talking about. The case decision is important for several reasons.

see Opinion 5-18-2023

The fact pattern is particularly interesting. Shetty is the Plaintiff who lost in the trial court. He acquired title from the homeowner before the sale of the property and before the time period had expired for reinstatement. His strategy was simple: pay the amount required for reinstatement and resume monthly payments.

The default lawyer, (which was operating under instructions from a third-party law firm) rejected the payoff and continued with the foreclosure sale. Shetty then paid off the entire amount due. He then sued for damages (interference with his right to reinstate as a successor to the homeowner).

AS usual the trial court sustained the demurrer and dismissed the whole case. But Shetty is not your ordinary ignorant homeowner. He pursued the matter into the appellate court. He cited the fact that the right to reinstate extends to anyone who is a successor in interest.

The Appellate Court parsed that contractual term. It said that Shetty was not a successor to the homeowner in the “loan” — he was a successor in interest to the property — having paid money for it and having received record title. In one fell swoop, the court brushed aside the argument against Shetty as lacking standing and the idea that terms of art used in connection with mortgages and foreclosures cannot be used interchangeably.

The court also opined that allowing reinstatement is simply good public policy. But the problem with reinstatement is that if the party making the payment wants to know who is getting that money, communications ALWAYS break down.

And that is because if any homeowner does their due diligence or their lawyer is doing his/her job, they will ask for something before they hand over the check or execute the wire transfer. They will ask for acknowledgment that the party receiving the money warrant their entitlement to it.

Since there is no such party and no such account, the lawyers are obfuscating with claims that they are not required to communicate with the successor in interest to the land title, and they are not legally required to accept money for reinstatement. That false statement of the law enables them to proceed with the foreclosure and produce sales proceeds from the forced sale of the property.

Attorney Richard Antognini did what I am begging every foreclosure defense lawyer to do. Take a moment, find the procedural and substantive inconsistencies in the claim (they are ALWAYS there), and structure your defense strategies and tactics accordingly. He also exhibited persistence which is the one characteristic that defines success in foreclosure defense.

===============

DID YOU LIKE THIS ARTICLE?
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.
CLICK TO DONATE

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.
*
FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

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.

Filed under: foreclosure | 1 Comment »

Require every public official to certify and itemize what he/she read, reviewed or heard before voting or acting on the subject matter.

Some readers will recall the extensive work I performed as an expert and consultant to state legislatures. I also served as an outside consultant on many political campaigns. I met and established relationships with leaders of both the Democratic and Republican parties.

The one theme that remained constant through all political issues being discussed is that, in most cases, most of the people voting or acting on an issue, had no knowledge about the issue and no desire to learn.

They were merely concerned with retaining support from the establishment of their political party. Once instructed on how to vote or act, they did so. If asked by the press, they would either ad hoc make up a rationalization on the spot, or they would have been given a “talking points” memo that was short enough to memorize.

In some cases, legislation or even executive action orders are not read by anyone except the multiple authors who contributed to the verbiage appearing on them. Not even the authors had read the entire bill. This is as true in the course as it is in the legislature and executive branch.

The reason why immigration has never been solved is that nobody wants to solve it. The establishment of both parties believes it is too juicy an issue. Right now, it is producing hundreds of millions of dollars in donations and votes on both sides. Why give that up?

The same thing happened when we ended up with “private prisons.” That is clearly a contradiction in terms. Adding profit into the picture guaranteed that private investors would fund donations to those politicians who would vote for it, thus requiring laws that criminalize behavior that would put and keep people in prison. Prison is a public function, not private.

As for the justice system, imagine what would happen if the some of the behavior is now criminalized was exempt from criminal prosecution or at least lightened. Fewer prosecutions would mean fewer judges, fewer administrators, fewer guards, fewer prisons, fewer prison cafeterias, fewer paid calls from prison, fewer prosecutors, and fewer defense lawyers. That result is unacceptable to both Democratic and Republican public officials.

A declaration from the official that they were not aware of the entire content of the bill when they voted for it should be sufficient grounds to nullify his/her vote.

If we don’t do something like this by statewide resolutions, we can expect more of the same. Clearly, the officials are not going to help us. Good luck

Filed under: foreclosure | 1 Comment »

1. The central issue is not whether the homeowner owes a “servicer” any money. The central issue is whether the homeowner owes a creditor money.

As for Fannie Mae, I think you might be oversimplifying the situation.

1. I totally agree that if FNMA is not the creditor — either on its own behalf or on behalf of a legally existing trust as Master Trustee, then any records of FNMA or anyone claiming to enforce a claim for money on behalf of FNMA is irrelevant, and even potentially subject to sanctions.
2. To know whether FNMA is a creditor, a lawyer purportedly representing FNMA must be willing to assert that status based upon a declaration or confirmation from FNMA that the subject homeowner owes FNMA money.
   1. This is one of the places where procedural tricks take the place of substantive allegations or arguments.
   2. The issue under the rules of evidence is whether the declaration from FNMA is truthful, and perhaps just as important whether an officer of FNMA gave such a declaration. This highlights how the banks weaponize the rules of procedure. The outlook is cloudy.
      1. If you do not stay razor sharped focussed on the central issue, you will get (a) an acknowledgment or declaration from a person (probably a contract worker) singing on behalf of a “servicer” (whose function as a servicer is not supported by any evidence) who claims representative rights for litigating on behalf of FNMA.
      2. The central issue is not whether the homeowner owes a “servicer” any money. The central issue is whether the homeowner owes a creditor money.
      3. The FNMA servicing agreement DOES grant such powers to Wells Fargo and other qualified banks.
      4. By focusing the court’s attention on the existence of those powers, the opposition is able to distract the court from the central issue of litigation: whether the homeowner owes money to FNMA.
      5. The liability of the homeowner is initially presumed from any document that looks even close to being facially valid. So the job of the homeowner and homeowner’s counsel is to rebut that presumption or to remove the right to use it. Since the homeowner cannot rebut the presumption without an admission from the opposition, there is only one strategy that has a good chance of success: attacking the right to use the presumption.
   3. Attacking the use of the presumption means either (1) attacking and objecting to the “facial validity” of a document (typically the endorsement of the note or assignment of the mortgage) and/or (2) attacking the right of the opposition to put on any evidence since it has violated the discovery rules contained in the rules of civil procedure. The opposition violates those rules when they fail to answer the question and produce a copy of the unpaid loan account on the books of FNMA.
      1. By failing to provide evidence or information likely to lead to the discovery of admissible evidence relating to the existence and ownership of the presumed underlying obligation, they have waived their right to presume that the underlying obligation exists or is owned by FNMA.
      2. They can still produce such evidence at trial, but only if they have complied with discovery demands and the court’s orders compelling compliance with the discovery rules and with the orders issued by the court.

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The central issue in the litigation is not whether powers are granted between parties but rather whether any of them ever had any relevant powers as the foundation for the claim to collect money from the homeowner.

*

Ironically, due to the court doctrine that denies homeowners the right to be proactive in challenging the “servicer” and “creditor” until after the foreclosure is launched, and in many jurisdictions, after the foreclosure is completed, the best time to present this might be by tracking the events after judgment and after the sale.

*

It is there that the truth comes out. The judgment, credit bid, or right to sell is often transferred multiple times to conceal the fact that FNMA did not get any money from a forced sale and was never intended to receive it. The paperwork, as always, is vague and confusing. But homeowners do have the right to inquire where the money went and the amount of the loss that was covered on which account or ledger of what party.

============

DID YOU LIKE THIS ARTICLE?
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.
CLICK TO DONATE

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.
*
FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

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.

Filed under: foreclosure | 1 Comment »

The problem with free speech is that it enables people to lie without fear. It is the dominant method of securing patrons for your business, votes for your candidate, and investors for your stock. Although frequently illegal, it doesn’t stop anyone from doing it. Only the lowly go to jail. The real big liars go on to make more pornographic profits.

The recent $1 Billion Settlement between Wells Fargo and its investors highlights this continuing problem. Repeatedly hit with “settlements” that implied a promise to consumers, the US government, and now investors, Wells Fargo has paid the tab and continued to fake the existence and status of financial accounts. The difference between Wells Fargo and its cousins on Wall Street is that Wells Fargo was caught multiple times.

The $25 Billion multi-state settlement was a drop in the bucket compared to the trillions (not a misprint or typo) stolen by Wall Street banks. What was missing from that settlement was any meaningful relief to homeowners who had lost the title to their homes because fake claims were presented with fake documents.

Most people do not understand that these fake accounts do not get canceled. Some of them are terminated, but all of them are subject to the pressure of intermediaries working for Wells Fargo to “enforce” the terms of the fake account. This is possible because no settlement ever publishes a list or any form of access to determine if certain account numbers were faked. It is always left to internal procedures to make things right based on a false promise to do so.

As a result, consumers remain blithely unaware that they are paying fake charges on a fake account. All of this is the product of a very cynical business plan based on the apparently correct premise that the banks can stay on top of the food chain by lying.

Why is this relevant to foreclosure?

The entire reason why “securitization” became a business plan is that Wall Street banks were able to create fake accounts with fake terms and fake attributes. They could have pursued a business plan in which transactions were mortgage loans and then either split up or aggregated into assets that were parceled and sold off to investors. They didn’t, but they made us think they did.

The reason they pursued the “under the table” approach rather than the transparent approach is that by faking it, they could create risk-free transactions in which the entire potential for economic loss rested on the homeowner. And the corollary reason was that by foreclosing (i.e., enforcing the terms of a fake account), Wall Street did what Wall Street does best: make other people’s money their money.

By carefully restricting access to information, the banks could convince even the victims that they were not victims of fraud. And because of customs and practices in the practice of law, nearly everyone ignores what happens after a foreclosure process is concluded in the courts or concluded in nonjudicial states.

But for those of us who do follow the money trail, we know that the money collected from the forced sale of property under judicial or nonjudicial process never goes to the party named as claimant and always goes to an investment bank that does not own any unpaid underlying obligation due from the homeowner. We know that there is no “loan account” on the books of any creditor. It only exists as a manifestation of imagination on the books of a company named as a “servicer.”

Wall Street did not need the accounts to be real. They just needed us to think they were real. And so far, they have gotten away with it for over 20 years. Thye drained the US economy of wealth and then went on to continue their illegal activities like drunken sailors.

And they are still doing it.

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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, 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.

Please visit www.lendinglies.com for more information.+

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Bill Paatalo published his analysis and frustration with the way that lawyers create “shades of gray” when there is nothing to be seen. See attacking-the-powerless-and-deceptive-limited-power-of-attorney-documents-in-foreclosure-litigation/

My instruction to lawyers is (a) stop being lazy, (b) read each word carefully and (c) think about what you have read. The answers are all right there in front of you if you just read, comprehend and accept.

If the proposed governing document is offered as a foundation for evidence proving the existence of the unpaid “loan account,” then the first thing to do is to look at the back and see whether it is signed. If it is not, read no further. The document is a decoy. The second thing to do is to look at the attachments. If they are there, then are they complete?

For example, if the attachment purports to be a mortgage loan schedule, then is there any indication on the pages that follow as to where that list came from, when it was created, by whom, and for what purpose?

Then read the document to see if it is a proposal for an agreement that has been executed or whether the promised actions are all future actions. The standard Pooling and Servicing Agreement is a comic book depicting future scenes that never occurred and never will occur, nor are they intended to occur. If the document is not self-executing — i.e., bearing the language that something is hereby transferred, sold, bargained or sold then the entire document is irrelevant. Hint: OBJECTION: RELEVANCE, LACK OF FOUNDATION).

Then you have wording like this:

“[m]ay only be executed and delivered by such Attorney-In-Fact if such documents are required or permitted under the terms of the related servicing or management agreement[s.”]

I am not kind, even perhaps harsh, to attorneys who skip over that wording. If the document is such that the powers and obligations can only be resolved by finding other documents that may or may not be in the public domain, the objection is FOUNDATION. Without those other documents, the proposed document cannot be introduced into evidence. The document lacks any probative value and is not the foundation for arguing or expecting the court to apply any legal presumption.

Such documents are not even facially valid. If you need to consult other documents to figure out whether anything happened, the document is not facially valid. This especially includes assignments of mortgage or beneficial interest under a deed of trust. But it also includes an undated endorsement on a note for which there is no alleged delivery date and no date of endorsement.

The proponent of such documents can still prove their case by bringing in the records custodian for the creditor, but they can’t win just because they said so — unless the homeowner and then lawyer for the homeowner are sleeping.

==============

DID YOU LIKE THIS ARTICLE?
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.
CLICK TO DONATE

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.
*
FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

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.

Filed under: foreclosure | Leave a comment »

The best practical time to challenge the pretender lender in any jurisdiction is when the homeowner receives a “notice” (usually unsigned) announcing that some company is now their servicer. That is a lie, and effective use of the Administrative Process provided by statute can stop them.

Later, the best practical time to challenge the pretender lender in nonjudicial states is when the lawyers file a Notice of Substitution of Trustee on the Deed of Trust.

The best practical time to challenge the pretender lender in judicial states is when the hoemowner receives a notice of default (also usually unsigned).

Practice note: The claimed “default” does not exist unless and until a creditor owns the underlying obligation and has been injured by non-payment. Without actual injury, there is no claim and no default. But he injury can be impied or even presumed in the absence of a challenge from the homeowner.

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The odds are against a successful appeal — except in clear-cut procedural irregularities. Gary Dubin and many other lawyers have won multiple appeals based on minutia. Any appeal that even smells like overturning the judgment of the trial court because you’re hoping that the appellate panel members would decide the case differently will crash and burn.

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1. The second requirement is usually completely ignored by the homeowner, the lawyers, and the judge. But it is still there. The possessor of the note, once that is established and confirmed by competent evidence, must allege and prove that it is authorized to enforce the note. By legal definition accepted in all jurisdictions, a holder is not a holder in due course even if they satisfy the two aforesaid requirements.

So here is an exchange with a contributor and reader. She says that “they say that Caliber is the holder, not PennyMac.”

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The trick here is using complexity to conceal the truth of the matter asserted, to wit: the matter asserted is that the homeowner owes money to the claimant because the claimant owns an unpaid account receivable due from the homeowner. Further, the matter asserted usually by implication is that the claimant suffered economic damage because the homeowner stopped paying the claimant.

None of that is true, but good lawyers can make it true if the homeowner or the lawyer for the homeowner is not well versed on evidence and the rules of civil procedure.

Again here is why pro se litigants lose even though they are morally and legally right — i.e., that there is no valid claim against them.

Filed under: foreclosure | 2 Comments »