Follow the Money Trail: It’s the blueprint for your case

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The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.
Editor’s Analysis and Comment: If you want to know where all the money went during the mortgage madness of the last decade and the probable duplication of that behavior with all forms of consumer debt, the first clues have been emerging. First and foremost I would suggest the so-called bull market reflecting an economic resurgence that appears to have no basis in reality. Putting hundred of billions of dollars into the stock market is an obvious place to store ill-gotten gains.
But there is also the question of liquidity which means the Wall Street bankers had to “park” their money somewhere into depository accounts. Some analysts have suggested that the bankers deposited money in places where the sheer volume of money deposited would give bankers strategic control over finance in those countries.
The consequences to American finance is fairly well known here. But most Americans have been somewhat aloof to the extreme problems suffered by Spain, Greece, Italy and Cyprus. Italy and Cyprus have turned to confiscating savings on a progressive basis.  This could be a “fee” imposed by those countries for giving aid and comfort to the pirates of Wall Street.
So far the only country to stick with the rule of law is Iceland where some of the worst problems emerged early — before bankers could solidify political support in that country, like they have done around the world. Iceland didn’t bailout bankers, they jailed them. Iceland didn’t adopt austerity to make the problems worse, it used all its resources to stimulate the economy.
And Iceland looked at the reality of a the need for a thriving middle class. So they reduced household debt and forced banks to take the hit — some 25% or more being sliced off of mortgages and other consumer debt. Iceland was not acting out of ideology, but rather practicality.
The result is that Iceland is the shining light on the hill that we thought was ours. Iceland has real growth in gross domestic product, decreasing unemployment to acceptable levels, and banks that despite the hit they took, are also prospering.
From my perspective, I look at the situation from the perspective of a former investment banker who was in on conversations decades ago where Wall Street titans played the idea of cornering the market on money. They succeeded. But Iceland has shown that the controls emanating from Wall Street in directing legislation, executive action and judicial decisions can be broken.
It is my opinion that part or all of trillions dollars in off balance sheet transactions that were allowed over the last 15 years represents money that was literally stolen from investors who bought what they thought were bonds issued by a legitimate entity that owned loans to consumers some of which secured in the form of residential mortgage loans.
Actual evidence from the ground shows that the money from investors was skimmed by Wall Street to the tune of around $2.6 trillion, which served as the baseline for a PONZI scheme in which Wall Street bankers claimed ownership of debt in which they were neither creditor nor lender in any sense of the word. While it is difficult to actually pin down the amount stolen from the fake securitization chain (in addition to the tier 2 yield spread premium) that brought down investors and borrowers alike, it is obvious that many of these banks also used invested money from managed funds as gambling money that paid off handsomely as they received 100 cents on the dollar on losses suffered by others.
The difference between the scheme used by Wall Street this time is that bankers not only used “other people’s money” —this time they had the hubris to steal or “borrow” the losses they caused — long enough to get the benefit of federal bailout, insurance and hedge products like credit default swaps. Only after the bankers received bailouts and insurance did they push the losses onto investors who were forced to accept non-performing loans long after the 90 day window allowed under the REMIC statutes.
And that is why attorneys defending Foreclosures and other claims for consumer debt, including student loan debt, must first focus on the actual footprints in the sand. The footprints are the actual monetary transactions where real money flowed from one party to another. Leading with the money trail in your allegations, discovery and proof keeps the focus on simple reality. By identifying the real transactions, parties, timing and subject moment lawyers can use the emerging story as the blueprint to measure against the fabricated origination and transfer documents that refer to non-existent transactions.
The problem I hear all too often from clients of practitioners is that the lawyer accepts the production of the note as absolute proof of the debt. Not so. (see below). If you will remember your first year in law school an enforceable contract must have offer, acceptance and consideration and it must not violate public policy. So a contract to kill someone is not enforceable.
Debt arises only if some transaction in which real money or value is exchanged. Without that, no amount of paperwork can make it real. The note is not the debt ( it is evidence of the debt which can be rebutted). The mortgage is not the note (it is a contract to enforce the note, if the note is valid). And the TILA disclosures required make sure that consumers know who they are dealing with. In fact TILA says that any pattern of conduct in which the real lender is hidden is “predatory per se”) and it has a name — table funded loan. This leads to treble damages, attorneys fees and costs recoverable by the borrower and counsel for the borrower.
And a contract to “repay” money is not enforceable if the money was never loaned. That is where “consideration” comes in. And a an alleged contract in the lender agreed to one set of terms (the mortgage bond) and the borrower agreed to another set of terms (the promissory note) is no contract at all because there was no offer an acceptance of the same terms.
And a contract or policy that is sure to fail and result in the borrower losing his life savings and all the money put in as payments, furniture is legally unconscionable and therefore against public policy. Thus most of the consumer debt over the last 20 years has fallen into these categories of unenforceable debt.
The problem has been the inability of consumers and their lawyers to present a clear picture of what happened. That picture starts with footprints in the sand — the actual events in which money actually exchanged hands, the answer to the identity of the parties to each of those transactions and the reason they did it, which would be the terms agreed on by both parties.
If you ask me for a $100 loan and I say sure just sign this note, what happens if I don’t give you the loan? And suppose you went somewhere else to get your loan since I reneged on the deal. Could I sue you on the note? Yes. Could I win the suit? Not if you denied you ever got the money from me. Can I use the real loan as evidence that you did get the money? Yes. Can I win the case relying on the loan from another party? No because the fact that you received a loan from someone else does not support the claim on the note, for which there was no consideration.
It is the latter point that the Courts are starting to grapple with. The assumption that the underlying transaction described in the note and mortgage was real, is rightfully coming under attack. The real transactions, unsupported by note or mortgage or disclosures required under the Truth in Lending Act, cannot be the square peg jammed into the round hole. The transaction described in the note, mortgage, transfers, and disclosures was never supported by any transaction in which money exchanged hands. And it was not properly disclosed or documented so that there could be a meeting of the minds for a binding contract.
KEEP THIS IN MIND: (DISCOVERY HINTS) The simple blueprint against which you cast your fact pattern, is that if the securitization scheme was real and not a PONZI scheme, the investors’ money would have gone into a trust account for the REMIC trust. The REMIC trust would have a record of the transaction wherein a deduction of money from that account funded your loan. And the payee on the note (and the secured party on the mortgage) would be the REMIC trust. There is no reason to have it any other way unless you are a thief trying to skim or steal money. If Wall Street had played it straight underwriting standards would have been maintained and when the day came that investors didn’t want to buy any more mortgage bonds, the financial world would not have been on the verge of extinction. Much of the losses to investors would have covered by the insurance and credit default swaps that the banks took even though they never had any loss or risk of loss. There never would have been any reason to use nominees like MERS or originators.
The entire scheme boils down to this: can you borrow the realities of a transaction in which you were not a party and treat it, legally in court, as your own? So far the courts have missed this question and the result has been an unequivocal and misguided “yes.” Relentless of pursuit of the truth and insistence on following the rule of law, will produce a very different result. And maybe America will use the shining example of Iceland as a model rather than letting bankers control our governmental processes.

Banking Chief Calls For 15% Looting of Italians’ Savings
http://www.infowars.com/banking-chief-calls-for-15-looting-of-italians-savings/

FABRICATION OF STANDING

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COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

YOU CAN FOOL ALL OF THE PEOPLE SOME OF THE TIME, AND SOME OF THE PEOPLE ALL OF THE TIME, BUT YOU CANNOT FOOL ALL OF THE PEOPLE ALL OF THE TIME

“The goal of this article is not to deny, by any means, the right of a mortgage lender to foreclose on a borrower who has failed to meet their financial obligations. However, it is intended to elucidate for fellow attorneys and members of the judiciary that while these financial obligations exist, so do the legal protections of our judicial system that were instituted to protect the property rights of Americans that are rooted in the United States and Florida State Constitutions. The judicial system was never meant to be evaluated by how swift justice could be dispensed or by how quickly a particular judge could dispose of cases on his or her docket. As officers of the court, both judges and attorneys are responsible for protecting the integrity of the sys- tem, ensuring that the system is never compromised solely for financial expediency.”

EDITOR’S COMMENT: This article, attached by link, has explicitly articulated the basic problem with foreclosures today as well as providing insight into the changing mortgage approval process. It should be used as an authoritative treatise in memos to the Court. It is balanced and applies knowledge of the mortgage approval and mortgage foreclosure process in the context of a correct perception of the difference between the theoretical workings of the securitization of debt and the actual practice.

While it is about Florida, it is also about the Nation. Basic to our national identity is the adherence to principles of natural and man-made law. The emphasis on the rights of individuals has long been recognized but increasingly ignored over decades of poorly reasoned decisions in favor of big business in what the authors call one of the darkest hours in judicial history.

These authors clearly explain how the system was rigged to provide the appearance of passive entities to avoid tax consequences and in so doing ignored basic requirements of substantive law.

Those entities, the “trusts” were never properly created, nor were they the recipients of transfers of loans into the pools in accordance with the requirements of the Internal Revenue Code nor did they comply with explicit instructions in the pooling and servicing agreements. They then show clearly how the requirements of procedural law, due process, have been systematically undermined and thrown under the bus of  an ideology that treats the individual as last in the chain of priorities instead of first.

“In 2008, the author appeared before a particular court in defending a foreclosure, at which time the judge was rubber stamping a large stack of uncontested summary judgments. Counsel remarked to the judge that in many of those cases, the bank did not establish the necessary predicate for filing foreclosures based on issues of standing and other legally re- quired foundations. The court asked if the author was representing the defendants in those files, and the author said he was not. The author then suggested to the court that his honor had sworn the judicial oath of office, including to uphold the Code of Judicial Conduct which in relevant part requires a judge to “respect and comply with the law and act at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary.” The court then said to counsel that if he continued in that line of discussion that he would be held in contempt in his court. Interestingly enough, this judge has recently stepped down to accept a position at a Florida foreclosure mill.”

“DECONSTRUCTING THE BLACK MAGIC OF SECURITIZED TRUSTS: HOW THE MORTGAGE-BACKED SECURITIZATION PROCESS IS HURTING THE BANKING INDUSTRY’S ABILITY TO FORECLOSE AND PROVING THE BEST OFFENSE FOR A FORECLOSURE DEFENSE”
REQUIRED READING: Securitization_Crisis

http://www.oppenheimlaw.com/press-releases.php?new_id=110

By ROY D. OPPENHEIM AND JACQUELYN K. TRASK-RAHN
Roy D. Oppenheim is a senior partner at Oppenheim Law, a South Florida law firm focusing on real estate and foreclosure defense law. Mr. Oppenheim is a recognized expert in foreclosure defense, and has been used as a source by major media outlets including the Wall Street Journal, New York Times, AP, USA Today, FOX, NBC, CBS, the BBC and The Florida Bar News as well as The Daily Show and 60 Minutes.

Fannie and Freddie Platinum Sponsors with (MERS and LPS) of Upscale Event for Bankers

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COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

UNDERLYING THEME: HOW TO GET THE SIGNATURE OF HOMEOWNER WITHOUT ALERTING ALL HOMEOWNERS THAT THEIR SIGNATURE IS NOW A VALUABLE COMMODITY

AHC AND LIVINGLIES ANNOUNCE LAUNCH OF AMGAR

EDITOR’S COMMENT: Are they really that tone deaf? It appears the answer is yes as Fannie and Freddie Joined Hands with MERS and LPS to become Platinum Sponsors of this Bankers Convention. If they had the slightest notion of the mayhem caused by these two culprits, neither Fannie nor Freddie should have avoided the event altogether and certainly not underwritten the expenses.

MERS was the vehicle used to hide the real parties in interest, allow trading behind the scenes and leave clouds on title compounded by frivolous and heart-breaking actions taken by the Banks to foreclose on properties based upon alleged mortgages that were never perfected as liens for debts that were not owed to the Banks and never acquired by them. The paper shuffle to give the appearance of a real party in interest was accomplished by a document fabrication mill — LPS.

Fannie and Freddie are now effectively nationalized, which means that in addition to the bailout, they are still underwriting costs for the banking industry. Small wonder that protests are taking to the streets.

Well, they had a lot to talk about — especially the growing acknowledgment and recognition that the signatures of evicted homeowners on fresh documents were necessary to clear title whether or not they were successful in pushing or bullying through their bogus foreclosure. The market is growing for for programs that entice homeowners to sign documents under one pretense that are being used for the secret agenda of the banks to simply get a waiver that they can waive in front of a Judge and say the homeowner waived any defenses.

The principal weapon of choice now is the offer of a modification plan that will later be rejected. But in the meanwhile, the homeowners signs an application in which he or she has waived all rights to contest the foreclosure — even if the the party initiating the foreclosure doesn’t have a dime in the deal and even if that subjects the homeowner to double or multiple financial jeopardy. The second line of defense is the new BOA pilot in which it is offering a “cash for keys” program in which they offer up to $20,000, as long as the homeowner signs a waiver and release of all claims.

Livinglies and www.AmericanHomeownersCoop.com (site still under construction) have come together in a joint venture called American Mortgage Guarantee and Resolution (AMGAR) to provide an open auction in which those homeowners who choose to take a little money rather than go for the brass ring in litigation can exchange their signatures on a package of waivers, releases, assignments and conveyances to anyone who wants to buy them. BOA has set the price range, but the market will dictate the rest.

AMGAR is outcome-neutral. No guarantees are expressed or implied as to the success of litigation or the value of the package. It’s purpose is to provide a vehicle where the homeowners who have decided to step away from fighting can provide the signatures necessary to clear title.

Junior or previous putative lienors may purchase the homeowner package and offer a value added package of the entire securitization chain. For those homeowners confused by this and the previous paragraph, it is not for you — it is directed at highly sophisticated qualified BUYERS, traders and alleged pretender lenders that wish to clear up entire chains of title. The risk of loss is entirely on the BUYER with no warranty or representations by the SELLER, except their identification.The BUYER assumes the risk of loss or further litigation without any representation from anyone upon which BUYER can reasonably rely.

There is a fee charged to the BUYER equal to $250 for the first $5,000 and $500 for any transaction that exceeds $5,000. This supports the trading desk and auction site at which the SELLERS and BUYERS “meet” electronically.

We would rather the homeowners stand and fight but if they are going to walk away, it might as well be with $20,000 (more or less, depending upon what the market will bear) in their pocket. The vehicle is named a Reverse Credit Default Swap which is sold by the homeowner or previous lienor and bought by hedge funds, Banks, CURRENT AND FORMER LENDERS, title companies and other qualified speculators. Until the auction site on the AHC site is fully functional, inquiries should be directed to amgar.livinglies@gmail.com.

The service is free to homeowners who are members of livinglies or members of the new cooperative American Homeowners Cooperative. However, it is strongly recommended that you purchase the COMBO before making the decision as to whether to fight or sell and that you seek the services of competent legal counsel licensed in the jurisdiction in which your property is located. In addition to providing the prospective SELLER (homeowner) with vital information with which to make a decision to fight or sell, the link to the COMBO results will provide a prospective Buyer easy access to information needed to assess the value proposition (prices are set by the SELLER, i.e., homeowners).

Fannie and Freddie, Still the Socialites

By

THE mortgage business is moribund. New loans are down. New foreclosures are up.

But why let a little sorry news get in the way of a good party? Last week, almost 3,000 people descended on the Hyatt Regency in Chicago for the 98th annual convention of the Mortgage Bankers Association.

The price of admission: about $1,000 a head. But for that grand, you got to hear the band Chicago play hits from the ’70s. And David Axelrod and Jeb Bush give speeches. And experts discuss things like demographics, the politics of housing and the future of the mortgage industry, according to a flier for the event.

“Gather the information you need to help your business and our industry drive change,” the pitch went.

The city of Chicago was no doubt grateful for the conventioneers’ dollars. Besides, Mayor Rahm Emanuel knows something about this industry: he used to be a director at the mortgage giant Freddie Mac.

Nothing wrong with a bit of schmoozing. But it might seem jarring that Freddie, which was rescued by Washington and today exists at the pleasure of taxpayers, paid $80,000 to become a “platinum” sponsor of this shindig. Fannie Mae, that other ward of the state, paid $60,000 to become a “gold” sponsor.

Keep in mind that taxpayers bailed out Fannie and Freddie to the tune of about $150 billion.

Today, Fannie and Freddie are about the only games in mortgage town. Yes, banks make loans, but more often than not they hand them off to one of the two. So it’s a mystery why Fannie and Freddie needed to help foot the bill for the gathering.

Freddie’s companions in the platinum sponsor list make for interesting reading. One was the Mortgage Electronic Registration System, or MERS, which has repeatedly foreclosed on troubled homeowners and made a hash of the nation’s real estate records. Another was Lender Processing Services of Florida, which made robo-signing a household word.

MERS and Lender Processing Services are at the center of the foreclosure crisis. Why would Freddie keep such company?

Perhaps more disturbing is that Fannie and Freddie sent an army of their own to Chicago: 87 people in all. According to a list of registrants, that’s more than hailed from the Mortgage Bankers Association (60 people), Bank of America (58), Wells Fargo (54) and JPMorgan Chase (24).

Only Lender Processing Services had more — 91 — than Fannie and Freddie. (Perhaps they robo-signed their registrations.)

The C.E.O.’s of Fannie and Freddie were conference headliners and gave presentations. But Freddie also sent 15 vice presidents and 14 directors from various units. Fannie’s list included 12 vice presidents, 12 unit directors and three events managers.

I asked Fannie and Freddie what they got out of sending all of these people to Chicago. Representatives of both said participation was an efficient use of taxpayer dollars because it allowed their employees to hold crucial meetings with hundreds of customers to discuss ways to address the housing crisis.

Fannie Mae’s spokeswoman, Amy Bonitatibus, added that it has “significantly reduced sponsorship and support of events and industry-related conferences.”

Representative Randy Neugebauer, the Texas Republican who heads the oversight and investigations subcommittee of the House Financial Services Committee, said he was disturbed by the turnout from Fannie and Freddie. It reflected a troubling “business as usual” approach by the mortgage giants, he said.

“They don’t act like companies that have had a huge infusion of taxpayer money,” he told me. “Why do they feel the need to go out and spend the money for networking when they have all of the mortgage market in its entirety?”

Trying to tally the costs borne by the taxpayers for the four-day event in Chicago, Mr. Neugebauer sent a letter last week to the Federal Housing Finance Agency, conservator for Fannie and Freddie. “I am concerned that the expenditures that Freddie and Fannie made in connection with the conference bear no relation to furthering the actual purposes of the conservatorship,”he wrote.

He requested a rundown of amounts paid by the companies to cover travel, lodging, entertainment and sponsorship. He also asked for details about whether Fannie and Freddie had consulted with the agency beforehand about sponsoring and attending the conference. The agency was asked to respond within a week.

”We’re going to really look through their entire budget and see if we can see signs where they are tightening their belt,” Mr. Neugebauer said, referring to Fannie and Freddie. “The American people are tightening their belts, businesses all over the country are tightening their belts. These entities can certainly do the same.”

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