Coming this fall! A new wave of illegal foreclosure claims. Will we get it right this time?

Some have pointed to some articles indicating that the securitization ponzi scheme collapsed already.

It might be more accurate to say that the scheme was reorganized rather than collapsed. But even if it collapsed the Wall Street banks will continue sending servicers and foreclosure mills into the field to file foreclosures. After, all, it’s free money if they win, and there is so far, a statistical certainty that in nearly all cases they will win simply because of the erroneous belief by homeowners that they have done something wrong and that they have a moral obligation to leave the house, once they stop paying.

So homeowner will give their precious house to people who have no right to receive it.

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We are a long way from when homeowners realize that they were flim flammed from the very start and that taking the substance of the homeowner transaction in total and in perspective, the homeowner (a) did not owe any money to anyone claiming it and (b) the homeowner was probably owed more money from the investment bank than he/she could possibly owe under the note and mortgage that was issued.
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It wasn’t a loan and we should stop calling it that. The “lender” side had no lending intent. At the conclusion of the process there was no creditor holding the homeowner obligation as an asset. Therefore they were not lenders or even creditors and accordingly not liable or accountable to act in accordance with lending and servicing statutes.
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The confusion emanates from the fact that all homeowners entered into the transaction with borrower intent. But there was no lending intent from the other side. The other side masked the real transaction as a loan to deceive the homeowner into accepting the label “borrower”.
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The real transaction was payment to the homeowner for issuance of note and mortgage to start the securitization processes. It was in reality a simple commercial transaction, to wit: the investment bank, through intermediaries agrees to pay money to the homeowner in exchange for the homeowner issuing a note and mortgage and putting up their home as collateral for an obligation that offsets the payment received. It could have been a loan, but it wasn’t.
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Because the banks lied about the transaction to the homeowner and to further make it look like a loan, they got the homeowner to issue a note and mortgage in most cases to an entity that never paid any money. This might negate the consideration for the transaction altogether because they were making a payment  but also getting a promise to pay even more to unknown creditors who would be illegally designated later. That part is a close question.
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But in quantum meruit, quasi contract and reformation, the only legal way that their designation system could be made legal is by getting consent from the homeowner to that system of designation of a creditor to act as a lawful creditor even though it wasn’t. That was the real reason for MERS, the use of Originators and the offering of “modifications.” The players on paper are designees or nominees — not real players. They are using the language of the notes and mortgages to imply consent to a “no creditor” transaction.
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But that is not informed consent or real consent, nor is it legal without other language of contract. A binding contract must have offer, acceptance, clear terms and consideration between the parties to the contract. In most cases the homeowner transactions were therefore not binding contracts. The Payee on the note was not a creditor. The doctrine of merger cannot apply when the payee is different from the source of funds unless there is a specific express contractual provision stating that. The mortgagee is usually a nominee which I think is a tacit admission that there is no creditor.
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In order to foreclose, the party asking for foreclosure remedy must be a creditor. A creditor is only one who either (a) owns the debt or (b) represents someone who owns the debt. Ownership of the debt is only accomplished in one way — payment of value in exchange for an instrument conveying title to the debt from an owner of the debt to a new owner of the debt.
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The ONLY time any value was paid was by investors. But they did not get any instrument of conveyance of the debt. Quite the contrary. The intent was to make certain that they would never be considered lenders. What they received was a discretionary promise from the investment bank dba REMIC trust to make payments that were partially indexed on but not dependent upon receipt of payments from homeowners.
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It is therefore impossible for any transaction to have occurred wherein value was paid for ownership of the debt after the investors paid the investment bank. Even if someone wanted to pay value in exchange for an instrument of conveyance of ownership of the debt, there was nobody to pay.
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The only party who paid value was the group of investors or arguably the investment bank. But neither of those entities had ever received any instrument of conveyance of ownership of the debt and in fact they disclaimed any such ownership because it would have made them lenders subject to TILA and other lending and servicing laws.
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BUT in order to foreclose, the papers filed by the foreclosure mill would need to show that a creditor was applying for the remedy of forfeiture. See Article 9 §203 UCC. So that required assignments of mortgage to be prepared, executed and recorded even though there was no financial transaction between the parties. In short, the scheme required the preparation, execution and recording of false utterances in false documents that were forged and illegally recorded.
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Since the homeowner has always assumed the homeowner transaction was a loan agreement, almost nobody has thought to credibly and properly challenge these assignments as legal nullities.
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The credible challenge would be not only that there was no consideration paid for the assignment, but that the payment of consideration was not a commercially reasonable basis for the execution and recording of the instrument, since the only consideration came from parties who did not and do not want ownership of the debt.
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The absence of any valid assignment is not just a fact; it is legally impossible under current securitizations schemes to have a valid legal assignment. The investment banks as intermediaries between investors and homeowners have structured the cash flow such that the investment banks get most of the benefits from the securitization process at the cost to and detriment of investors and homeowners — the only two real parties in interest in the homeowner transaction which is mistakenly called a “loan.”
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The note, payable to a party with whom the homeowner unknowingly conducted no actual business, creates a liability under Article 3 of the Uniform Commercial Code regardless of the lack of consideration. The maker of the note has defenses to be sure, but if someone buys the note for value, without knowledge of the maker’s defenses, and in good faith, then the maker must pay the note and the only remedy available to the maker is by making a claim against the Payee on the note and anyone else that induced him to execute a note in favor of someone who gave him/her nothing.
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The foreclosure mills for claimants in foreclosure do not plead status as a holder in due course because they can’t prove the elements: payment, good faith and lack of knowledge of borrower’s defenses. But they induce both homeowners, their attorneys and the courts to treat the claimant as a holder in due course because of the complexity of legal analysis in distinguishing between an HDC, holder, possessor and anyone with rights to enforce.
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As a result, because the position is not properly challenged, the court then often reduces or even eliminates discovery on the central issue — whether the claimant is a creditor of the homeowner.
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The “rights to enforce” argument almost always leaves out the presumed component that is a condition precedent to any such analysis, to wit: that the creditor has authorized the enforcement. But if there is no creditor — i.e., anyone holding the debt as an asset — then such authority cannot legally exist.
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This explains the appearance of false, fabricated, forged, backdated and robo signed documents that are still regularly used. Since there is no creditor the pursuit of foreclosure is a pursuit of profit rather than restitution for an unpaid debt. It is not recovery on a loan.
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And if the transaction was unraveled from its complex appearance, it is plain as day that the homeowner is entitled to credits and probably payments from the investment bank under quantum meruit and quasi contract for being drafted into a highly profitable securitizations scheme that gave the homeowner nothing for initiating the scheme.
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We are about to be besieged with new foreclosure claims. Let’s get it right this time. The “flood of litigation” argument for rocket dockets is not valid because it presumes that the claimant does have status as a creditor and that the foreclosure is for restitution of an unpaid debt.
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Aggressive and persistent demands for identification of the claimant and for evidence of proof payment for value — along with thoughtful, credible and persuasive presentation might well result in prevention of a flood of foreclosures because there is no entity that actually stands to lose any money arising from the action or inaction of any homeowner.
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They won’t plead injury because there is no injury. They can’t prove any injury. They can only induce the court to presume it based upon erroneous application of legal presumptions arising from the apparent facial validity of documents that are neither facially valid nor true representations of any transaction in the real world. 

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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How to Use the Real Deal On Securitization to Homeowner’s Advantage

Like citizenship in this country litigation is not easy. We keep banging our heads against the same wall expecting a different result. We need a strategy that directly addresses the inescapable realities of every homeowner transaction and every securitization cycle.

My substantive analysis of the transaction is that the homeowner was drafted into a securitization scheme which in my opinion clearly triggers quasi contract and quantum meruit — the only possibility for inquiring into the adequacy of consideration. Lawyers and litigants have shied away from this because of its complexity and because they don’t know how to approach it.
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In simple terms the homeowner transaction was a “”Qualified Financial Contract” (QFC), part of which contained some apparent attributes of a loan, but which went much further and diverged extensively from a “loan” as the term is currently used in custom and practice in the financial industry and society in general.
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The QFC is not some invented term for this article. it is defined in all securitization documents. Investment banks knew they were not creating a loan. The job of litigants and their attorneys is to point out and argue that the documents submitted as a foundation for their claim of legal standing contains language that opens the door to quasi contract and quantum meruit. 
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In logistical terms, the homeowner delivered the only service the investment bank was seeking, to wit: issuance of the note and mortgage. Neither the investment bank nor the originator designee of the investment bank was at all interested in making a loan, collecting revenue from repayment nor assuming any meaningful risk of loss.
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Although the homeowner entered the transaction desiring a loan he/she didn’t receive a loan. If there is no legally responsible lender or creditor at the conclusion of that transaction, it isn’t a loan.
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And since too many bona fide third party transactions have occurred to rescind or unwind the transaction the only possibility remaining is to have a court reframe the agreement to include the basis upon which the investment bank entered into the transaction — i.e., the creation, issuance, selling, trading and hedging of unregulated securities.
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We know the investment bank had no intention of becoming a lender and that there was no intention to make investors lenders.
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And we know that the investment banks funded the origination or acquisition of the loan through originators and aggregators.
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Further we know that investors paid value for the certificates which excluded any right, title or interest in any debt, note or mortgage.
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The result, obviously intended, is that while parties were paying value, none of them ever received a conveyance of ownership of the debt, note or mortgage.
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And we can easily see that anyone who received such a conveyance (a) did not pay value and (b) was not acting as an authorized agent or representative of anyone who paid value in exchange for a conveyance of an ownership interest in the subject debt, note or mortgage.
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It was partly a scheme for avoidance or evasion of lending and securities laws.
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The reason for this is blatantly stated in all of the promotional material for sale of certificates, to wit: no liability for violation of lending or servicing laws using “bankruptcy remote” vehicles  for origination and acquisition of homeowner obligations.
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And scratch the surface and you discover that the only thing that makes the transactions bankruptcy remote is that the underlying obligation, note and mortgage are not included in the schedules of bankruptcy because they were never owned by the originator or aggregator.
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The problem for the last 20 years has been that nobody has been asking the obvious question: “if they don’t own the loan, then who does?” Or at least nobody has followed up on that question in which they truly persisted in aground war to get the answer.
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So any such conveyance was either a legal nullity (mortgage assignment) or did not carry the right to enforce (note). If the conveyance didn’t include the obligation there are very specific rules that apply.
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Authority to enforce the note can only come from one who is entitled to enforce. And the premier person who has the right to enforce is owner of the underlying debt that the note is supposed to memorialize. Under the laws of all jurisdictions nobody gets to own the obligation without paying value.
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This seems to be challenging not only for the courts but for defense lawyers. It is a very simple logical progression. In the end enforcement of the note is intended to pay the debt. If it doesn’t pay the debt the maker of the note is subject to multiple liabilities for the same transaction. And that is what happened. Since the originator did not substantively fund the homeowner transaction the issuing of the note and mortgage in favor of the originator was a legal nullity. The issuance of the note created a new liability that was not merged with the underlying obligation to repay the money, if any, that was received or paid on behalf of the homeowner.
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So the reason I mention all of this is that I have somewhat reluctantly but persistently arrived at the conclusion that the homeowner transaction was not a loan and yet the obligation to make payment survives even in quasi contract or quantum meruit.
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This is an unavoidable conclusion because we know that where money was funded to the homeowner or on his/her behalf and where the homeowner issued a promise to pay money, the obligation to pay arises and can be secured by a lien (mortgage or deed of trust) which in fact is enforceable.
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But note that since there is no lender or creditor at the conclusion of the securitization cycle, the intent of the homeowner is thwarted — i.e., he/she does not have a loan agreement. It is something else. And that is where quasi contract and  quantum meruit come into play.
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The homeowner could have bargained away reasonable compensation or consideration for his/her role in initiating the only documents that made securitization claims possible — i.e., the note and mortgage.
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Our legal system is not designed to correct stupid mistakes in bargaining or negotiation in transactions or agreements.
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Our system is designed to enforce the intent of the parties. So we can’t get away from the intent to create an obligation and the intent to have that obligation enforceable and memorialized by a note and mortgage. In fact, I propose we should embrace it.
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The reason is that the intent to create the enforceable homeowner obligation was not the only intent operating. Since the securitizations cheme — and the homeowner’s vital role in it — was not disclosed (actually actively concealed), the homeowner did not, could not and never did bargain away rights to compensation or consideration for his role and risks in this dangerous risky transaction.
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Thus we enter the realm of quasi contract and quantum meruit. 
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So now the question is how much consideration  did the homeowner actually receive for issuance of the note and mortgage? Since it wasn’t a loan, even though that was what was intended by the homeowner, the receipt of money must be categorized as payment of consideration. And that is a lot of consideration by any standard.
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But now the issuance of the note and mortgage becomes a service rather than the result of an underlying obligation to repay.
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So the consideration of the receipt of benefit from the funding of the homeowner transaction is entirely offset by a promise to pay more than the consideration received in the form of money paid to the homeowner. That might still result in a court finding some consideration, since the money on the front end might not be found by a court to exactly equal the money promised on the back end.
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On the other hand there is good reason to find that the consideration for issuance of the documents required to start securitization claims, securities, selling trading and hedging was entirely negated by the concurrent promise to pay more than the money received. But assuming there was a finding of consideration, was it enough?
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In a court of equity wherein rescission is no longer an option the court must determine what a reasonable homeowner would have bargained for or received through the process of free market forces if disclosure had actually been made regarding the securitizations scheme and the vast profits and revenue generated under the scheme.
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The court would hear testimony from a variety of experts and reach a conclusion as to whether the homeowner had received enough consideration or if the homeowner should have received more as per the quasi contract and not just what was presented as a loan agreement.
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The range of possibilities is nearly infinite. From zero to a majority of the pot because the investment bank secretly tricked the homeowner into a dangerous transaction, the risks of which were unknown to the homeowner. Using the shadow banking marketplace (i.e., where all derivatives are traded for nominal value) as the external reference point for heuristic projection, it may be fairly assumed that the average revenue generated from each securitization cycle was $12 for each $1 transacted with homeowners. Additional securities analysis reveals that the figure could be much higher.
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In a free marketplace where there was no asymmetry of information the fair question could be posed as follows: from the investment bank’s perspective they would be saying that they are going to make $12 on each $1 during the securitization cycle, perhaps more.
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The homeowner and investor sitting at the same fictional but still legal table would inevitably concede that for inventing and managing such an ingenious scheme the investment bank might be entitled to the lion’s share of the profit.
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The investors would say their role as investors is critical to the existence and success of the securitization cycle. And since capital is valued more highly than labor they would claim a greater share than that awarded to homeowners. Homeowners would make the same argument as investors — without them there is no securitization and there are no revenues and there are no transactions claimed as “loans.”
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So looking at the customs and practices of the financial industry the investors would probably initially claim 40% as angels and the homeowners could justify a claim of around half that amount for their indispensable role.
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Or one could look at the money actually spent (commissions, bonuses etc) on getting homeowners to execute the required note and mortgage while concealing the truth about the transaction as a measure of what the homeowners should get. Or a license or royalty arrangement might be adopted.
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All of them in my opinion average around 15%-20% of the total revenue generated by the scheme. this would leave the investment bank with 40% or more of the securitization cycle revenue which is around 1000% of normal revenues for underwriting and sale of debt securities.
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So the court would offset the obligation with whatever it decided was reasonable consideration for the homeowner. It would either order payment to the homeowner of any excess consideration due or order the homeowner to pay the balance of the obligation after offset for the consideration due. And if the homeowner still owed money both the note and mortgage would be enforceable.
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But here is the rub. None of this is possible without creating a contract by decree in which it is possible to designate a party who is not a creditor to act as a creditor — in a transaction to which the homeowner agrees that for all purposes the designee will be a creditor. And that creditor is subject to lending and servicing laws. This is essential because under current law only the owner of the debt can enforce the mortgage and only someone representing the owner of the debt can enforce the note unless they are a holder of the note in due course — which means they purchased it for value in good faith and without knowledge of the  maker’s defenses. 
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So it becomes necessary to plead for this attribute to be made part of the newly minted agreement because without it, you don’t have an enforceable agreement  Without an enforceable agreement you’re left pleading for damages under RICO, wrongful foreclosure, etc. And while the note and mortgage might not be subject to enforcement, they still exist. No lender or buyer will complete a transaction with that hanging over the deal.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business 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 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.
*
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Are Lawyers Missing the Boat Again on Foreclosure Defense?

The problem is that while most people think everyone has been bought off, and to a certain extent that is true, the real problem is that the clever plan of securitization is so counter-intuitive that nobody believes the truth that is in plain sight. The reason for fabricated documents is that there were no transactions, so the documents had to be fabricated to fit facially with the requirements of law for administration, collection and enforcement.
To anyone who is not conversant in the language of finance, that seems impossible, unlikely, or just plain wrong. So rather than keeping an open mind about it, they react to such assertions with aggression and incredulity.

I recently received a question from a fairly knowledgeable reader. Why are lawyers dropping the ball on foreclosure defense? His specific question, along with similar questions from other readers is where are the trust lawyers, the securities lawyers, the property lawyers, the civil litigations lawyers, the personal injury lawyers (emotional distress etc), etc.?

Here was my answer with some edits for typos which all of you know I am prone to make and miss on edits.

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The question you posed is the million-dollar question. I think you are correct in your analysis. I have attempted to enlist attorneys who specialize in those areas but I have failed.
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The only explanation that I can give you that has any truth to it is that lawyers, despite their reputation, are easily intimidated, lazy and greedy. I surveyed hundreds of lawyers over a two-year period In 2008–2009.
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The proposition was simple. assuming a client with sufficient financial resources to pay any reasonable fee, were they willing to represent homeowners in distress?
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The fact that the answer was in the negative was frustrating enough. But the reason most often cited was that they would rather represent “the bank.” And when I pointed out that they did not represent any banks nor did they have any prospects for doing so, that’s when they said that it didn’t matter.
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Some did express reservation about the assumption that the client could pay. I pointed it out that if they were not making a monthly payment for housing, they could easily pay. That made no difference. They saw the entire endeavor as futile and unprofitable — but in reality I could tell, like any trial lawyer could detect, that I was dealing with raw unbridled fear.
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So I attacked it with seminars on foreclosure defense that highlighted business strategies in which the lawyer could become rich, and some of the attendees did. Others made a good living.
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But it was based on lowering of expectations. By adopting a hub-and-spoke strategy some lawyers, adopting the business plan that I proposed, began servicing hundreds of homeowners at a time. But like all such practices, their business success depended upon settlement of the cases, which meant modifications. This resulted in adding to the illusion that the servicer had any right to be in the picture.
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My latest plan is that I am working on potential pleadings for a case in Reformation in which the investment banks are literally drafted into the litigation. The Court decides whether the homeowner received consideration for issuing the documents (note and mortgage) that enabled the securitization plan, and whether the homeowner received or should receive adequate or additional consideration that could offset the claim. (There is a lot more to this but for purposes of this article I simply state in brief form).
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I have no doubt that there is an opportunity to achieve immense wealth simply by pursuing the obvious. But it appears that the General Public, law enforcement, the Judiciary, and most lawyers have succumbed to the party line that enables the Investment Bank to sit in the shadows and designate names of irrelevant parties with no stake and the outcome to administer, collect and enforce obligations that were long ago retired through securitization, proof of which is easy to obtain, to wit: is there any company showing the existence of the debt as an asset on their balance sheet and a loss from nonpayment? 
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I definitely know the answer to that question. Current law therefore does not allow the current scheme of securitization to exist nor should it. It depends entirely upon concealment of the most relevant data in any transaction — the terms and conditions under which each party intends to serve the other and the terms and conditions under which each party might profit from the transaction.
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Most of all under the federal and state lending and securities laws (and general laws requiring fair dealing) the identity of the counterparty must be included in order to make the agreement an enforceable contract.
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This concealment allows investment banks to act illegally and against the idea of free markets or capitalism. It prevents both investors and homeowners from bargaining for adequate consideration based upon the true nature of the transaction. 
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The problem is that while most people think everyone has been bought off, and to a certain extent that is true, the real problem is that the clever plan of securitization is so counter-intuitive that nobody believes the truth that is in plain sight. The reason for fabricated documents is that there were no transactions, so the documents had to be fabricated to fit facially with the requirements of law for administration, collection and enforcement.
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To anyone who is not conversant in the language of finance, that seems impossible, unlikely, or just plain wrong. So rather than keeping an open mind about it, they react to such assertions with aggression and incredulity.
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Some lawyers do get it and they win their cases most of the time. Everyone else seems to argue for their own weaknesses (See Steven Covey’s Book) without looking to actual information or data. They insist that the foreclosure cases are both unwinnable and are morally unconscionable if they give the homeowner a free house.
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I insist that there is no debt because the investment bank was never depending upon the economics of a loan to make money. Foreclosures are gravy. They made all their money creating, selling, issuing, trading, and hedging securities. The labelling of the homeowner transaction as a loan was a false representation. The investment bank, who never appeared on any of the paperwork, was the real party in interest and at the end of the day there was no person or company who owned the so-called debt from the homeowner. 
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If that plan had been disclosed — as it was required to be disclosed under both “lending” laws and “securities” laws — both investors and homeowners would have had the opportunity to bargain for more more compensation and better terms — because they would have known they were taking a much larger risk than the one that was actually presented.
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Indeed, investors that were pension or other types of “stable managed funds” would not have been able to invest at all had they known the true nature of the certificate scheme into which they they were investing the futures of workers and companies that had contributed to the fund.
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Such funds, as investors, were critical to the success of the securitization scheme. Investment banks would have been legally required to present additional safeguards to the fund managers such as participation in the trading profits, hedge contracts and insurance contracts in order to make the sale of certificates to stable managed fund investors. 
The same logic holds true for homeowners.
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They were making the largest investments of their lives based upon their reasonable belief that the apprasial was real and the loan was viable — all resposnibilities imposed on the “lender” by law (see TILA).
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Had they known the true incentives and motives and existence of the investment bank they would have understood that this was no loan. It was a service they were performing and an investment — for which they were being paid to issue documents that required them to pay money over time in order to enable the securitization scheme.
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If the true profits of the securitization scheme were disclosed as as required by law, homeowners and originators would have been able to compete for a greater share of the securitization pie or they would have had the opportunity to choose not to do business in such a hazy scheme. 
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business 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 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.
*
Please visit www.lendinglies.com for more information.

PennyMac and Other Companies are Making False Claims as “Servicers”: Black Knight, the king of fabricated documents is behind 62% of all “servicing records.”

The bottom line is that companies claiming to be servicers are not servicers although they perform some servicing functions as “clients” of Black Knight.

This provides a veil of plausible deniability for lying in court about testimony and documents. Hiding behind litigation immunity foreclosures are being pursued and granted resulting in windfall payments to intermediaries who never had any stake in the financial stake of any homeowner transaction. 

Examination of the facts shows that the “boarding process” is nonsense i.e., a lie). “New Servicers” simply log on to the Black Knight system. There is no boarding required. It is a total lie to fool courts into believing that the records were tested when they were not. 

Black Knight is not mentioned in part because of its prior record of criminal conduct. That record gives rise to inferences of lack of credibility or questions or credibility — either one of which is enough to prevent the employment of legal presumptions arising from what appear to be facially valid documentation. Without those presumptions there is no case because none of the claimants can offer proof of transactions in which actual ownership and control over the underyling obligation can be established. 

There is nothing like an admission that can change the course of thinking by a judge, lawyer, homeowner or law maker. Except for one thing: when the party not only admits the truth of the matter asserted but affirmatively alleges it in a lawsuit against someone else.

Exhibit A, brought to my attention by multiple sources and contributors to my blog. It is a lawsuit by someone who professes to have no connection with the alleged “servicing” of any transactions that are referred to as residential mortgage loans. It is never named in any lawsuit as a servicer. It does not show up in court as the source of servicing records. It does not send any robowitness to court to say that he/she is familiar with the books and records of this company. And yet, here is Black Knight, formerly Lender Processing Services and DOCX infamy (Lorraine Brown, President went to jail).

In a lawsuit against PennyMac, Black Knight asserts that PennyMac infringed upon its proprietary system that supplies the servicing records for 62% of all “servicing” performed in the U.S., — and that means that in 62% of all foreclosures, the companies that were proffered as servicers were not the servicers or at least did not perform all servicing functions — especially, as you read the complaint, as to payment histories and relevant documents for foreclosure.

So we have the only company that was ever caught red handed with fabricating, falsifying, recording, forging, robosigning false transaction documents. They changed their name but not their business model. Their business model is being the central repository of all the data that is created, stored, and manipulated with respect to 62% of all alleged “loans.”

That makes Ocwen and other loan servicers liars. And I have successfully pointed that out in trial. When you look at the copies submitted to qualify for an exception to the hearsay rule as a “business record” you can see that this did not come off of any particular system. And upon questioning of the witness they will profess ignorance as to the location of the server on which documents and records are created, maintained and manipulated.

No document is ever produced showing that Black Knight was named as servicer for any trust. That is because the trust has nothing and Black Knight is not working for nothing. Black Knight is working for investment banks who are the prime and only drivers of all trading, administration, collection and enforcing of contracts relating to securities and homeowner transactions. The transaction data (38%) not controlled by Black Knight is primarily controlled by a Chase controlled entity in the same way.

So the bottom line is that when the servicer representative comes into court to testify as to the foundation of the payment history, there are two things to remember for cross examination.

First, the copies he/she is attesting to are not from any system owned or controlled by his company and are not the records of the trustee or trust of any REMIC Trust.

Second those records are always missing any references to what goes out. Without entries showing disbursements to creditors, the records are incomplete. Without records showing establishment of the debt as an asset of some creditor, the records are incomplete. And THAT is what undermines the foundation for the admission of the records and can lead to objection and a motion to strike the exhibit during trial.

Failure to object and failure to attack in this way leads inevitably to a finding that the documents are real and that the information is true which then proves a default because the payment history says so.

But it doesn’t prove a default and the litigator must be able to show that. A default is established ONLY when proof of ownership of the asset (Loan) is established in the name of the claimant or Plaintiff. This never happens because there is no creditor showing the loan as an asset on its financial statements.

In current securitization practices, there is no creditor that actually claims ownership under generally accepted accounting principles that require a financial transaction (payment) in exchange for a conveyance of ownership of the underlying debt as a required by Article 9 §203 UCC as adopted by all U.S. jurisdictions. And if they are not creditors then they can’t be considered lenders and therefore can claim that lender liability does not attach to them. 

And without any officer of the trustee or trust testifying that those are there records of test rust, the copies preferred by the foreclosure mill and the robowitness are just props and not evidence and do not qualify as exceptions as business records. Accordingly they are barred by the hearsay rule which stands in the way of any evidence that lacks credibility.

Black Knight vs PennyMac Lawsuit

So why am I saying all this?

Here are some quotes from a complaint filed by high end lawyers representing Black Knight against PennyMac who they say falsely and illegally used the Black Knight systems, namely MSP© and Navigator©. Here is what Black Knight says, which corroborates, word for word what I have been saying for 14 years:

“Black Knight’s proprietary MSP® System, including its interdependent NavigatorTM electronic reference and procedural library, is the mortgage industry’s leading mortgage servicing software [e.s.] package. The result of years of research, complex coding, and continuous improvement, the MSP® System is used to service over 62% of the first lien mortgage loans in the United States, providing its users – the country’s largest and most successful lending institutions – with the ability to manage their portfolios in compliance with a broad set of laws and regulations. Black Knight protects its proprietary system through secrecy, and users of the MSP® System are granted access only under strict nondisclosure agreements with individual access controls.”

Now to be sure, they will claim that they are only providing software that “servicers” use. But that is not the way it actually happens. Black Knight owns, operates, maintains all servers with an iron hand as directed by the investment banks who like Black Knight want to be out of sight and therefore out of mind of any court.

The facts that every litigator should know is that the two parties who are not mentioned — the investment bank who started ands till controls the securitization scheme and Black Knight who is the central repository for all data to make sure that there is no public competition for claiming the same loan, are the only ones that actually out as real parties real witnesses.

So then we come to the fact that claims of servicing by PennyMac are completely false. If you read carefully and make appropriate inquiries one fact stands out: PennyMac is acting under Black Knight. PennyMac may get to make certain entries which in turn are tested by Black Knight and PennyMac may get to print out copies of reports that are produced by certain algorithms at Black Knight but PennyMac has no role in creation or maintenance of business records on Black Knight, who in turn does not do anything for trusts because it has no contracts with trusts. it has contracts with investment banks.

Notice how they are keeping the agreement between PennyMac and Black Knight a secret. Also note that the agreement names Fidelity Information Services, Inc. an Arkansas corporation as the principal and PennyMac is referred to as “client”.

“Pursuant to that certain Master Agreement entered into as of April 30, 2008, together with any addenda thereto (the “Master Agreement”), PennyMac became a registered user of the MSP® System and was granted a limited right to access and use the MSP® System in order to process PennyMac mortgage transactions.[e.s.] The Master Agreement includes clear and comprehensive restrictions against misuse of the MSP® System and associated confidential materials. Due to a confidentiality requirement in the Master Agreement, as well as the volume of documents, Black Knight attaches hereto as Exhibit “A” the cover page of the Master Agreement. A complete copy of the Master Agreement is in the possession of PennyMac, but a duplicate copy will be provided upon request.”

So the lawsuit is couched as a copyright infringement case. But the real purpose is that of the investment banks — to prevent the decentralization of data records that could reveal the fact that loans were sold multiple times in multiple ways. Of course there is also the monopolistic position that Black Knight enjoyed and wanted to protect. But without the support of the investment banks it would never have filed this lawsuit,.

“The MSP® System is made of a number of interdependent “modules,” with each performing a different function in the process of servicing a mortgage loan. These modules work together synergistically to produce the familiar experience and end product that is critical to the system’s success.”

“For example, the following specific aspects of the MSP® System contribute to its unique value: data schema and fields; user experiences and interfaces; files and records; transaction-type codes and sequence codes; input, processing and output transactions; workstation guides; technical support services; and documentation of the foregoing. Data collected are organized in specific files incorporated in a table that includes multiple records, each of which is a row that also includes a series of fields or cells, each of which has a specific name and position range. The confidential logic and business rules that drive the collection and manipulation of the data provide Black Knight a competitive advantage.” [e.s.]

“The NavigatorTM application is a critical component of the MSP® System. Acting in effect as an extremely detailed electronic reference and procedural user manual, it provides authorized users of the MSP® System with comprehensive information regarding each MSP® System module and workstation necessary to understand and use the MSP® System to service mortgage loans. This includes confidential details of MSP®-specific files; data dictionaries; data schema, records, and fields; MSP®-specific transaction-type and sequence codes; processing operations associated with MSP®-specific files; and MSP®-specific input and output transactions. It also contains confidential workstation guides and other user materials explaining how to work with MSP®-specific files and initiate execution of MSP®-specific operations. The NavigatorTM application and its related documentation are made available only to authorized users of the MSP® System for limited uses and are specifically designated by Black Knight as confidential proprietary, and trade secret information.

An authorized MSP® System user can also access data from the MSP® System in real-time using MSP® Mortgage Web Services. Like the NavigatorTM application, MSP® Mortgage Web Services contains detailed confidential documentation explaining its functionality and unique and proprietary data formatting structures and request codes, among other topics. And like the NavigatorTM application, MSP® Mortgage Web Services and its related confidential documentation”

One of our prolific readers and contributors “summer chic” has offered the following information that I consider useful in framing complaints:

On June 8, 2020 Black Knight announced that former OneWest CEO (aka OCC) Joseph Otting joined Black Knight’s  Board of Directors…..
 
 Black Knight is a renamed Lenders Processing Services/DocX who forged millions of assignments which were filed in Courts around the Nations to steal homes from American families.
 
 Bill Foley (FNF) , owner of LPS, DocX, Black Knight, ect. continues its illegal practices as of today while deceive borrowers with bogus Title Insurances. 
 
Speaking about monopoly, Mr. Foley owns majority of US Title Companies.
 
PennyMac is a renamed Countrywide Financial 
 
Caliber Home Loan is a renamed Countrywide Financial
 
HomeXMortgage is a renamed Fremont Loan and Investments
 
Matrix Private Capital is a renamed Lehman Brothers
 
New OCC Mr. Brooks is also a former OneWest CEO….
 
Former BlackRock CEO Michael Bright was CEO of Ginnie Mae….
 
VA Appraisal system is controlled by Bank of America via Core Logic LoanSafe program which is  renamed Countrywide’s LandSafe Appraisal system which BOA sold to VA in 2014….
 
Ginnie Mae’s Senior VP Michael Drayne is a seasoned  fraudster from Chevy Chase bank who was sued by investors and insurers for over $5.2 Billion securities fraud. Drayne was never charged for any damages.

*Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.*

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

Moratoriums Extended: That Doesn’t Mean You Won’t Be Out On the Street Or Living With Relatives

Governor Ron DeSantis (R) Florida, issued a new order extending the moratoriums on foreclosures and evictions.

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The investment banks on Wall Street like this turn of events because they no longer need to lie orally to homeowners in order to get them to fall behind in payments. Their goal is foreclosure and eviction mostly except for abandoned properties after foreclosure which are called Zombie properties.

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Practically everyone who has had an issue with mortgage payments has heard the familiar refrain: “you don’t qualify for a modification because you are not delinquent in your payments. You must be at least 90 days behind in payments before you should submit your application for a modification.”

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Since it was oral communication (not written) and either not recorded or the recording is later destroyed, the foreclosure mills, hiding behind litigation immunity are free to deny that the homeowner ever received that information — which by the way is practicing law without a license (a felony in many states).

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Judges hearing that story are very skeptical of that story even though it is true. They are skeptical because why would any creditor want a “borrower” or obligor to not pay them? Why would anyone want to lose money in a transaction? It just doesn’t make sense to judges, which is why Mr. Reyes from Deutsche bank got away with it when he said the entire securitization system is “counter-intuitive.”

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The Judge’s attitude comes with the assumption that he/she is dealing with an actual creditor. If you drop that assumption everything makes sense. The only way a non-creditor can make money is by pretending to be a creditor and foreclosing on a property in which it has no interest — and of course getting away with it.

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The bonus is that once the foreclosure is successful it has a legal presumption of validity which means that all prior illegal acts are subsumed into the foreclosure.

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So don’t believe the moratorium any more than you believe the tune that you must stop making payments in order to qualify for a modification. The banks are counting on you spending money that would have otherwise gone to making payments such that when the 90 day period is over or when the moratorium is over you are so far behind that you cannot catch up.

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That is exactly what the banks want even though that seems crazy to the casual observer, including judges.

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Now if you are already involved in foreclosure there is nothing but confusion as to the effect of the roders on moratoriums. Exactly what do they stop?  We don’t know.

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But most judges are interpreting the orders as meaning they can hear nothing on any foreclosure or eviction which is probably correct — or else there will be a landslide of motions seeking to set aside orders granted while the moratorium was in effect.

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But I wonder if a motion to compel discovery or demands for discovery are still allowed. I think they might be.

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And I repeat for the umteenth time that you can’t prove anything against the foreclosure mill or any supposed client of the foreclosure mill. You don’t have the evidence or data. I issue that reminder because everyone who loses their fight against the foreclosure mill comes to the same erroneous conclusion: they can’t win. They skip the part about having gone down the wrong path.

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The winning strategy, every time is based upon the knowledge, not the evidence of wrongdoing on the part of the foreclosure mill and its “clients.”

The winning strategy is simply challenging the assertions, implied references, assumptions of fact, and presumptions at law through the proper and timely use and enforcement of discovery.

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That means crafting discovery questions that are simple, easy to understand and that can be defended as being central to the issue of ownership and authority over the underlying obligation. People seem to avoid getting proper help from a knowledgeable source on drafting discovery. It also means that you have a memorandum of law ready with citations to statutes, rules of procedure and cases interpreting those rules in which you should clearly and convincingly that your questions are simply designed to test the basic question that a creditor or representative of a creditor is present in court.

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The people that claim they cannot get answers in the discovery process are missing the point. If your opposition could answer those questions without admitting they have no claim they would do so. But they don’t. So when you DON’T get answers, that begins your journey toward revealing and demanding an inference that the foreclosure mill has no basis to assert or imply that the foreclosure will result in payment against a debt on the books of some creditor — i.e., a creditor who is the claimant/beneficiary in a nonjudicial foreclosure or the plaintiff in a judicial foreclosure.

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.*

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BETA TEST — DISCOVERY SUPPORT

Discovery

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

How to Stop the Court from Speculating About the Identity of Claimants in Foreclosure Cases

As long as you continually attack the sub silentio assumptions of the court, you will be weakening the case against you for foreclosure. Failure to do so means almost certain failure.

Foreclosure is considered a draconian remedy equivalent to capital punishment. All US jurisdictions have adopted as a matter of law and public policy (Article 9 §203 UCC) that the remedy will only be granted to one who paid value for the underlying obligation.

If you don’t challenge the sub silentio assumptions of the court, then the judge is free is assume that the granting of foreclosure is a remedy for restitution of unpaid debt and that he/she has granted it under the assumption that the owner of the debt is going to get the money when the property is sold to a third party.

THE FIRST MISTAKE YOU MAKE IS IN ASSUMING THAT THE OBLIGATION STILL EXISTS AND HAS NOT BEEN EXTINGUISHED IN THE PROCESS OF SECURITIZATION BY PAYMENT OUT OF HIGHLY PROFITABLE SECURITIZATION SCHEMES THAT WERE PART OF THE ISSUANCE OF THE MORTGAGE AND NOTE.

None of the court assumptions are true. But you can make them true by failure to challenge the assumptions and misleading arguments presented by the foreclosure mill. It is through no doing of the homeowner that the obligation has been retired without payment from the homeowner. And the homeowner has no legal or moral reason to pay it again. BOTTOM LINE: IF NOBODY HAS AN ASSET ON THEIR BOOKS SHOWING THEY PAID FOR THE DEBT, THEY HAVE NO RIGHT TO ENFORCE IT. THEY ARE JUST A WITNESS — NOT A PARTY.

This is a procedural problem. Technically speaking, a motion to dismiss has very strict rules — taking all allegations and exhibits of the complaint, does the complaint does state a potential cause of action upon which relief could be granted. Once you introduce something outside of the allegations of only the complaint you are in the realm of Motion for Judgment on the Pleadings, Motion for Summary Judgment etc.

 
Opposing counsel is attempting to mislead the court into speculating about the identity and nature of the claim, and the identity of the parties who are named as Plaintiff. The essence of the position of opposing counsel is a sub silentio argument: i.e., presume that somebody, somewhere is going to get the benefit of payment on a debt they own owed by the homeowner. The complaint and exhibits filed do not contain allegations of ultimate facts upon which relief could or should be granted. Such relief can only be granted if the court rejects basic jurisdictional and procedural requirements. Neither the Defendant nor the court has any basis for actually knowing the identity of the claimant(s) in this action. Relief cannot be granted to the world at large. 


The issue here is that opposing counsel now admitted certain things and their own complaint basically says the opposite of their current position in court. Inconsistent statements, some of which must logically and of necessity be false, are protected by litigation immunity behind which both opposing counsel and the participants in the instant lawsuit are hiding. But just because they cannot be held accountable for misleading the court doesn’t mean that they should be permitted to do it. 


Since the complaint is clearly filed, in its own words, on behalf of certificate holders, their current position that the bank is somehow the actual party is without foundation. The complaint lacks an allegation stating that the bank is the legal representative of certificate holders and further lacks any allegation that the bank is trustee for the certificate holders who are beneficiaries of a trust. Further the complaint fails to allege that the trust exists or was organized under the laws of any jurisdiction. 


They appear to be taking the position that the bank is a plaintiff, not on its own behalf but on behalf of some third party. If it is a trust, they have failed to identify the trust or any transaction in which the subject loan was entrusted to the trustee under the terms of a trust instrument which is also not alleged. 


Accordingly, based upon the argument of counsel, the complaint fails to state the cause of action that opposing counsel is currently pursuing. This court lacks jurisdiction to hear any matter in which the Plaintiff is not identified or in which the named Plaintiff is not alleged to have suffered some injury caused by the Defendant or someone through whom the Defendant claims an interest in the subject matter. 


As it stands the complaint must be dismissed because it lacks both basic requirements for authority of the court to hear any dispute, to wit:  The identity of the Plaintiffs is concealed, withheld or otherwise not alleged and the ultimate facts upon which relief could be granted as the basis of their claim is not alleged.

The current action is based upon the implied conveyance contained within unidentified certificates, the contents of which are neither described nor attached as exhibits. And the claim is alleged to be brought on behalf of undefined holders of those certificates, who are not alleged to have any interest in the subject obligation. On the contrary, opposing counsel continues to assert the position that the plaintiff is a bank acting as trustee for an implied trust. 


Opposing counsel is attempting to have it both ways and to distract the court from the obvious conflict presented in this case. Either the claim is brought on behalf of an actual or implied trust or it is brought on behalf of holders of certificates. In either case neither the “trust” nor the “certificates” or “holders” are identified. Defendant is forced to litigate with a ghost. This court is being guided into a final judgment that grants to relief to unknown legal persons based upon assumed injury that is never alleged. 


Defendant is entitled to know exactly who she is litigating against and why. that is basic pleading practice as required by the most basic constitutional standards, statutes and rules of civil procedure. As it stands, opposing counsel is promoting a case that has not been alleged. 


Defendant asserts that the case must be dismissed without prejudice or that judgment must be entered for the Defendants. The opposition filed by opposing counsel actually corroborates every basis for the motion to dismiss that was filed. This court should refuse to consider an unspecified case with unspecified plaintiffs on an unspecified claim. To do otherwise opens the door to new doctrine in which anyone can file a lawsuits based upon facts known to them as a witness instead of a party. 

The court should reject the sub silentio argument presented by opposing counsel — that even if the the trustee, trust and holders have no right, title or interest in the mortgage, the action should proceed because they know that the homeowner did not make a payment.

The protections enunciated by the state legislature in their adoption of Article 9 §203 of the Uniform Commercial Code are not optional. Only the owner of the underlying obligation can force forfeiture of property to pay a debt. Black letter law in all jurisdictions is crystal clear: debt is not acquired without paying value for it. Black letter law is in all jurisdiction is clear: assignment of mortgage without a sale of the underlying obligation is a legal nullity. 


“even if we could entertain the argument we would reject it. The complaint alleges that US Bank claims to hold the beneficial interest and the right to foreclose, which is fully consistent with defendants’ representations in their brief as well as the judicially noticeable documents in the record. The issue is not Chase’s role as the loan servicer, but the proper identification “of the party enforcing [the] debt.” (Yvanova, supra, 62 Cal.4th at p. 937.) Yvanova makes clear that “􏰀􏰁􏰂he borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security.” (Id. at p. 938, italics added.)”

Masoud v JP Morgan Chase, Cal. 4DCA, May 26, 2020, Case #D075582.

Yvanova v. New Century Mortg. Corp., 62 Cal.4th 919, 937 (Cal. 2016) (“Defendants argue a borrower who is in default on his or her loan suffers no prejudice from foreclosure by an unauthorized party, since the actual holder of the beneficial interest on the deed of trust could equally well have foreclosed on the property. As the Jenkins court put it, when an invalid transfer of a note and deed of trust leads to foreclosure by an unauthorized party, the “victim” is not the borrower, whose obligations under the note are unaffected by the transfer, but “an individual or entity that believes it has a present beneficial interest in the promissory note and may suffer the unauthorized loss of its interest in the note.” (Jenkins, supra, 216 Cal.App.4th at p. 515156 Cal.Rptr.3d 912; see also Siliga v. Mortgage Electronic Registration Systems, Inc. (2013) 219 Cal.App.4th 75, 85161 Cal.Rptr.3d 500 ”)

Yvanova v. New Century Mortg. Corp., 62 Cal.4th 919, 937-38 (Cal. 2016) (“Nor is it correct that the borrower has no cognizable interest in the identity of the party enforcing his or her debt. Though the borrower is not entitled to object to an assignment of the promissory note, he or she is obligated to pay the debt, or suffer loss of the security, only to a person or entity that has actually been assigned the debt. (See Cockerell v. Title Ins. & Trust Co., supra, 42 Cal.2d at p. 292267 P.2d 16 [party claiming under an assignment must prove fact of assignment].) The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security.”)

In any valid case for foreclosure, the complaining party must plead and prove the current existence of the debt, the current ownership of the debt being in the claimant or plaintiff, and the default of the homeowner as to the claimant (not someone else, about whom the court could only speculate as to their existence or their interest in the proceedings).

If they fail to make such allegations or prove that case, foreclosure must be rejected. And if the reason they failed to make such allegations is that they are pursuing a profit motive in lieu of an attempt to collect on an existing debt held as an asset by some creditor then all parties involved should be held accountable for abusing or weaponizing foreclosure process in an extra-legal and therefore illegal manner, all claims of litigation privilege notwithstanding.

*Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business 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 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.

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The Curious Distraction of Applying “Adverse Possession” Rules to Foreclosures that are Time Barred by Statutes of Limitation.

The reference to “adverse possession” in any of these cases is not about legally changing title due to the statute of limitations enabling adverse possession. I know what that looks like. Possession that is adverse is not the legal definition of the statute governing “adverse possession”. Not even close. In this case the court was using the words “adverse possession” loosely. An adverse possession claim is procedural and substantive.
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For adverse possession to even be an issue that a court could adjudicate one would need to file a complaint alleging that the Plaintiff did NOT have legal title but had possessed the property is an open, adverse way directly against the interests of the title owner. No such complaint has been filed or even referenced in your case or this opinion from the court.
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In the absence of a claim in which a Plaintiff seeks specific relief, the court has no authority or jurisdiction to even consider, much less decide a case. Any ruling predicated on the existence of such a claim  is ultra vires (beyond the authority of the court).
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The only possible procedural exception would be that evidence was admitted without objection into the court record supporting proof that the Plaintiff was occupying land owned by the defendant and that such possession was open, notorious, continuous, hostile, adverse, exclusive and all the other elements of adverse possession. Then a motion to amend the pleading to conform to the evidence could be heard and granted. No such motion was brought in your case or any of these case you are showing me.
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So none of the cases are or even could be adverse possession cases. Opposing counsel is standing adverse possession on its head. She is saying that you are the owner and you are the possessor but that your ownership and possession are adverse to their interest in a process called foreclosure. Note that by definition they are not saying they own or possess the property already. And they are not even saying they have a right to possession. They are saying they have a right to foreclose. The issue of possession could not even be before the court until the court grants foreclosure and there is a sale of the property.
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The right to foreclose is based upon procedural and substantive law. The right to foreclose comes from contract. The contract is the mortgage. The mortgage, contrary to what everyone usually says, has many provisions in it that state that the mortgagor/owner of the property has agreed to undertake certain obligations of maintenance, insurance, and otherwise prevent the value from declining in value except for ordinary wear and tear and passage of time.
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In addition to those covenants the mortgage provides a right to the mortgagee to foreclose if the mortgagor is in breach of the mortgage covenants, one of which is the payment of money in accordance with the terms and conditions of a promissory note. The payment of money is usually referred to as the note which sets forth how much money and the terms of payment. Thus the owner of the property is a mortgagor under the mortgage and an obligor under the note. Those are two separate instruments. 
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If the note is evidence of an underlying debt like a loan from the Payee to the Payor, then the underlying debt is merged into the note by judicial doctrine to prevent the appearance of two liabilities for the same debt. If the named payee on the note is not actually the party who loaned the money then the merger doctrine does not apply and you have two legal liabilities — one because the debtor received money and the other because the same person executed a negotiable instrument that creates a separate liability regardless of the facts and circumstances of the “loan.”
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In such circumstances the Payor could complain and defend that it received no consideration from the payee and avoid liability at trial, but that would not result in dismissal of the lawsuit. That would be a question of fact for the trier of fact to decide.
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And if the negotiable instrument (note) was purchased for value in good faith and without knowledge of the Payor’s defense of lack of consideration, it is quite possible for a judgment to be entered against the Payor, which could include foreclosure of the mortgage which provides for foreclosure in the event that the obligor/mortgagor breaches the terms of the note. And all of that would be in addition to claims that could be made by the real owner of the debt to get paid. The recourse for the homeowner in such a situation is solely against the party who lured him into a signing a note without ever providing the consideration and without any intent to do so.
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As you can see from this exposition, it is entirely possible for the homeowner to theoretically lose twice and be left with a remedy against a now bankrupt originator.
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All of the above is necessary context to see where these courts are going wrong about the existence of the mortgage lien and its enforceability. They are entirely correct in seeing the note as distinguishable from the mortgage and even distinguishable from the debt. They could and often are three separate legal issues, each with its own set of rules. And those rules can vary depending upon the type of proceedings in which they are considered.
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This is why in bankruptcy the lien survives discharge of the obligation for the debt. That isn’t logic. It is just law. The obvious theory would be how can they foreclose on a debt that no longer exists? And the answer is a legal fiction in which the debt is somehow owed by the land, which I know is absurd but that is the law. However that has nothing to do whatsoever with the statute of limitations and the rules of procedure in a state court. And there is zero support in statutes or case law that it does. That is also the law. It’s not matter of persuasive logic.
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Your case is not a bankruptcy case nor does the defense rely upon discharge from bankruptcy which is the only proceeding in which the debt is eliminated as personal liability of the debtor but is retained as a liability against the land. No such doctrine applies in any other proceeding in federal or state courts. Nor has any case even considered the proposition. Nobody has ever suggested that the bankruptcy rule could be applied as doctrine to somehow change other statutory laws passed by the legislature that might bar collection, administration or enforcement of a debt, note or mortgage. It doesn’t exist and your opposition is not saying it does exist. So the issue does not exist.
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What your opposition is tapping into is the idea that the mortgage and the note are separate contracts each susceptible to independent enforcement. For example even if a homeowner is up to date on payments due on a legal debt owed to a real lender the lender could still foreclose if the homeowner failed to comply with local laws and ordinances such that the value of the collateral was threatened and the government agency was threatening fines, liens and foreclosure. The mortgage contract, is, as your opposition suggests, independent up to a point.
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The obvious logical argument in the absence of an enforceable underlying legal debt, is whether the covenants under the mortgage survive even if the note is not enforceable. I would point out here that your opposition is not advancing any such argument and that therefore even if the court were aware of this analysis it would still be wrong to consider it because the court is supposed to be deciding issues brought before it by the parties — not advocating for one side or the other.
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If a Judge, as former trial lawyer, sees something that might advance the cause of one side or the other, the judge is required to be silent unless there are grounds for the court to sua sponte decide on an issue not raised by either side — like jurisdiction.
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There are several logical and legal reasons why the mortgage continues to exist even though the underlying debt is unenforceable, which is most certainly and indisputably the case in your situation. One is simply that the statute of limitations can be waived or renewed by conduct of the debtor. While this has not happened YET, the fact that it is unlikely is speculative and no reason to cancel the mortgage lien.  And because of that possibility — along with the fact that no statute cancels the mortgage when the action is barred on the underlying debt — the mortgage lien continues to survive as a lien.
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The mortgagee, assuming the assignments of mortgage were valid and legal and supported by consideration (very problematic in your situation), has potential or inchoate rights that cannot be extinguished. But that does not give any right to the mortgagee to foreclose the mortgage for the sole reason that the mortgagor, as payor/obligor on the note breached the note — at least not where such a claim is time barred by an unambiguous express statute addressing that claim.
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The enforcement of the obligation is barred by the statute of limitations even though the breach is self-evident. This is a matter of public policy that the legislature of each state decides. Your state may have decided that if you don’t file the claim with six years of the breach you can’t bring the claim later. That is the law.
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Only a law that that specifically expressly supersedes another law can be used to avoid the legal requirements and restrictions of the other law. No such law has been invoked in any of these cases (because none exists) and there is no pronouncement from any court that the law of adverse possession supersedes the statute of limitations on debt because only the legislature can do that.
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The current statute of limitations is clear, unambiguous and expressly articulated.  If the legislature had meant to make an exception for mortgage loans, lawmakers would have declared the exception in the current statute rather than some vague presumed intent to allow for a conflict of laws where none exists.
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The conflict only exists if it is invented. Opposing counsel has invented the conflict and convinced the court to follow her proposed “logic.” But like all arguments, if you start with the wrong premise, you end up with the wrong result. There is no conflict of laws and therefore there is no basis for the court to presume one exists.
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Whether the debt exists or not is a separate question. The fact that a claim is time barred on a debt does not extinguish the debt unless there is a law that says that is the case. Some states have passed such laws.
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Assuming the debt exists for purposes of this argument, there must be a creditor who has paid value for the debt in exchange for ownership or conveyance of that debt. It is pure speculation as to the reason why no claim was filed for within the express statutory period of six years after what opposing counsel claims was a default and acceleration of the debt. And it doesn’t matter what the reason was.
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The claim is barred as matter of statute and public policy. The court receives no argument, assertion or basis for tolling the statute of limitations. That issue does not exist before the court.
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Hence the only possible conclusion is that the statute of limitations applies and the current claim is time-barred; the mortgage agreement cannot be enforced in the future unless and until, during the express term of the mortgage contract, the mortgagor renews the debt or otherwise breaches the terms and conditions of the mortgage agreement — and a legally recognized mortgagee seeks such enforcement.
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This will probably get me in plenty of hot water with lawyers. Homeowners should be winning foreclosures most of the time. The reason they don’t? — Ineffective Counsel.

The problem is not the judges. The problem is the lawyers who walk into court believing that the loan is real, claimant is real, the claim is real and that they are only looking for technical ways to get their client out of a valid deal.
The problem is exacerbated by magical thinking — that by pointing out bad acts by the foreclosure mill or servicer they will automatically cancel the mortgage, get quiet title and somehow the “debt” will disappear. Is it any wonder that judges are responding negatively to such assertions?
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Well I am rapidly coming to the conclusion that the primary basis for appeal in capital murder cases — ineffective counsel — is the real reason why homeowners think that the courts are ignoring the obvious. This is most manifest in a phenomenon I refer to as hallway trial lawyers. When they are speaking to their clients in the hallway outside the courtroom they sound great; but once inside the courtroom they are either mute or should be mute.
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Hallway lawyers can be great trial lawyers — if they would only prepare and obsessively roll the issues over in their mind as they approach a hearing or filing of a motion, pleading, or brief. And they would win far more often than they would lose if they did the work. That takes two things that most people lack — other than trial lawyers — commitment and courage. Like any performer you must give it your best and accept a pie in the face occasionally.
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In 45 years of litigation I have won and lost cases. Most of them I won. In hindsight I would say that virtually every loss is attributable to one factor —- lack of adequate planning, preparation and execution.
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My own experience is that when I have done my job as a litigator I have consistently successfully defended foreclosure cases because there is no case. That knowledge propels to me to object, challenge and refute basic assumptions in an orderly, timely and effective way. I am clear as to the basis of my objections and challenges and how it it lacks foundation, relevance or relies upon inadmissible statements or documents. And I am relentless. 
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While there are judges who simply refuse to consider any possibility of a homeowner victory, many of such judges can be turned when approached correctly. They are merely starting from assumptions they are required to make. They are not against the homeowner. They are for the rule of law.
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The problem is not the judges. The problem is the lawyers who walk into court believing that the loan is real, the claim is real and that they are only looking for technical ways to get their client out of a valid deal. The problem is exacerbated by magical thinking — that by pointing out bad acts by the foreclosure mill or servicer they will automatically cancel the mortgage, get quiet title and somehow the “debt” will disappear. Is it any wonder that judges are responding negatively to such assertions? 
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Why should any judge relieve a debtor of an obligation because of bad acts by a creditor? The answer is that they should not because if they did they would be destroying the foundation of a nation of laws. If you were owed the money then you would not think that is such a good idea either.
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That is why I strive to show the truth of the transaction between the homeowner and whoever sold the transactional documents for the homeowner to sign or the truth behind the acquisition of what had been a valid loan agreement.
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For the homeowner it was a loan and as soon as you admit that it was a loan, you are already in deep trouble. By admitting the loan you admit the existence of a conventional creditor and a conventional debtor. You also admit the existence of a conventional debt and you can’t contest  the non payment by the homeowner and therefore you are conceding that the homeowner is in breach of a loan agreement without excuse. Fabricating paperwork is no excuse to get out of paying a loan you received. You still owe the money.
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The lawyers and homeowners who complain that this gives them no place to go are missing the essential truth of Wall Street securitization: in nearly all cases the debt was never sold. If you start with the wrong premise you will always end up with the wrong result. 
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The entire enterprise was about selling and reselling private financial data of homeowners who for their part were tricked into thinking they were entering a loan agreement while the other side spared no effort in avoiding the title and liability of a lender under lending laws. That is not a loan and the agreement was not a loan agreement. 
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More importantly, the agreement might not be enforceable at all since (a) there was no meeting of the minds and (b) there was an absence of consideration caused by the payment of consideration together with an obligation to pay it back.
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For the investment banks this was solely about getting consent to sell private data and issuing sand trading securities based on the data not any debt. Anyone who does not understand the significance of that should probably not be litigating these cases. They will lose and thus contribute to the growing body of evidence that most people lose defending actions titled or labelled as foreclosures even though most people could win.
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Mass joinder and mass petitions to change the mandatory requirements for filing foreclosure actions can be done with direction from licensed people who actually understand that there is neither an actual claimant nor a claim in the creation, administration, servicing or enforcement of any transactional documents in which a homeowner is one of the parties.
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My opinion is that without central direction, preparation, investigation, and strategic and tactical planning by experienced trial lawyers, homeowners will continue to be food for a profitable scheme created and advanced by Wall Street.
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My opinion is that this is a massive social issue as well. By finally denying Wall Street banks of profit from foreclosures and all the profitable events leading up to foreclosure, the vast inequality of power and wealth can be addressed, at least in part.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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Why Homeowners Lose Their Homes to Crooked Banks

The first and foremost thing about this is that where any loan is subject to claims of securitization, that claim is false. So no investor ever  bought any loan, debt, note or mortgage. Not ever. All documents claiming to memorialize such transactions are false. So the designated claimant has no claim.

To win these cases you must be realistic about what you are up against. The justice system doesn’t care about the merits of any claim, defense or denial unless it is properly and timely presented in accordance with the established rules of procedure and laws of evidence. It is not really an oversimplification to say that noncompliance with the rules means you lose even if you are right.

I can file a lawsuit against you, the reader, for anything right now even though I have no claim and I can win — and maybe claim your property to satisfy the judgement. The fact that I never had a claim is irrelevant to the system. Once the judgment or order is entered that is the law of the case. This is what crooked banks are using as their means to gain more profit through foreclosures.

[Practice Note: there is a very real privacy issue that has not been adequately explored in connection with homeowner transactions. If the true nature of the homeowner transaction was to obtain consent to sell private data then the consideration might be zero — because the money given to homeowners was offset entirely by a duty to pay it back with interest. So in addition to a lack of informed consent, the failure of consideration might negate all consent. This might augment a claim for quantum meruit for the real plan: the issuance and trading of securities.] 

The presence of questions does not mean that there is an absence of evidence. While the burden of proof is on the claimant to establish the necessary elements for a prima facie case, procedural law favors the claimant, especially in foreclosure cases. Homeowners can and should win, but they often lose because they think that being right is enough.

The apparent facial validity of the documents presented means that even if the documents were fabricated and the plaintiff was misrepresented as having legal existence, for purposes of the case, the judge is required to presume that the claim is true and that the claimant is real. the perpetrators of such a fraud get to enjoy the fruits of their labor. the property is sold and the proceeds are distributed as revenue without any accountability.

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Merely denying those facts is insufficient. You must be able to produce evidence to the contrary, to wit: either facts that show that the presumption is untrue or, more likely, the fact that the Foreclosure Mill was unable to or unwilling to answer basic questions about the ownership and authority over the debt.

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Many lawyers and pro se litigants make a common error. They think that by denying the existence of the plaintiff or the claim that they have shifted the burden back to the claimant or at least the Foreclosure Mill.  This assumption is misplaced particularly in foreclosure litigation. theoretically the denial of a fact that has been alleged is sufficient to force the claimant to prove the allegation of fact. But in foreclosures, thanks to form pleading, very few facts actually need to be alleged in order for a Judicial or non-judicial foreclosure to proceed.
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The denial from the homeowner is therefore a denial of facts that have not been alleged. It gets worse. The presumption arising from documents that appear to have facial validity ends the matter unless the court is faced with credible and persuasive evidence to the contrary.
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And the Foreclosure mill is never going to admit that it doesn’t have a client who is a claimant, and it is never going to admit that the claim doesn’t exist.
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The only avenue open to the homeowner is the exhaustion of all procedures and remedies under the rules of discovery. At the conclusion of that process, the homeowner will be in a position to argue that the failure of the opposition to answer the most basic questions about the claim that they have submitted, combined with their refusal to even follow court orders, should result in sanctions and further, should result in an inference that the claimant doesn’t exist and that the claim is without merit.
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This would not automatically mean that the homeowner wins the case. While sanctions under these circumstances could include striking the pleadings or the claim or the proof of claim in bankruptcy court, the judge is probably going to be more inclined to grant a motion in limine by the homeowner that prevent the Foreclosure Mill from introducing any evidence of ownership or authority over the debt, note or mortgage.
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That SHOULD end it but often doesn’t. Even then many courts will leave open the possibility of producing actual proof of ownership or authority over the debt. Appellate courts have been inconsistent in reversing or affirming such orders.

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The fact that they did not prove the claim independently of the legal presumptions merely means that the judge was satisfied that the prima facie case had been established.

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So the way homeowners are often presenting their position is basically that the judge should not have assumed that the elements of a prima facie case had in fact been established. But that means that you had introduced sufficient evidence to cast doubt on the validity of the documents relied upon in the foreclosure. By that point, the judge has already decided that you didn’t. You raised questions and denied things but you proved nothing.
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So you are now so far down the road in the Foreclosure action that it is probably impossible to reopen any form of discovery. This is why I recommend in such cases that you file an independent lawsuit that could survive a motion to dismiss. By filing lawsuit you raise issues that can be subject of inquiry in discovery, depositions, and subpoenas duces tecum.

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I think pro se litigants in particular also might be confusing the difference between a void judgment and an erroneous judgment. Arguments often appear to be directed to an erroneous judgment, although they contain good arguments against jurisdiction, which could be directed to characterizing the judgment as void. You need to be more specific that the judgment is void and why and not confuse your arguments of error with your argument of lack of jurisdiction.
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This is not something you’re going to be able to do on your own. You need to hire an attorney.
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SECURITIZATION NOTES: All securitizations I have reviewed have one thing in common: the sale of certificates that do not convey any right, title or interest to any debt, note or mortgage. No other financial transaction takes place after that point — except payment of some of the investor money to homeowners. Tax court cases make this abundantly clear: holders of certificates have no secured interest in anything and no interest at all in the performance or enforcement of any obligation.
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The transaction with homeowners was simply acquiring consent from the homeowner to sell private data multiple times to multiple buyers.
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No payments from homeowners — either voluntary or involuntary — are ever forwarded to anyone who has paid money. No proceeds from foreclosure are ever paid to reduce any debt because there is no asset receivable on any balance sheet in which the debt is claimed.
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Thus the presentation of a payment history in court is a distraction from the fact that there is no evidence of any records of any company that claims a loss from nonpayment on a debt.
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A proper objection to the introduction of such a document could be lack of foundation and lack of relevance — unless there is testimony or other evidence linking the payment history with the books of account of the claimant, there is no claim. But like all objections, if not timely raised it is waived. 
Neil F Garfield, MBA, JD, 73, is a Florida licensed attorney since 1977. He has received multiple academic and achievement awards in business 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. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. 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.
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Magic Bullet? Maybe this: the foreclosure “team” are all witnesses, not claimants

The fact that the foreclosure players know — or even witnessed — the fact that you refused to make any further payments makes them a witness, not a claimant. 
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The investment banks say they are not liable as lenders for noncompliance with lending laws. OK. A good lawyer can make a powerful argument for estoppel — the investment banks cannot take one position — that it wasn’t a loan in terms of regulation of lenders   — and then that it is a loan so they can foreclose without a creditor.
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Two wrongs don’t make something right. The fact that they used a shill as the originator doesn’t mean they are allowed or should be allowed to use another shill to falsely invoke foreclosure laws and procedures. You can’t foreclose on a debt that does not exist.
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Most homeowners take out their frustration by attacking the judge or the opposing lawyer. This is a mistake on many levels.
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My concern here is that you are far too interested in two subjects that have the least probability of you achieving anything. The object of your ire is understandable. But you may be playing into the hand of the banks if you continue.
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The Judge, even if he or she is the most reprehensible person on Earth, is simply untouchable without very specific evidence that links the Judge to a corrupt scheme in which the decision of the Judge is directly tied to the scheme and where the Judge receives a  specifically identified reward for a corrupt decision. This does not exist in your case and it rarely exists in any case. So attacks on the Judge’s integrity or intelligence will provoke what they would when you attack anyone for anything. They get defensive and antagonistic — just the opposite of what you need.

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The foreclosure mill, even if they too consist of the most reprehensible human beings on the planet, is considered immune from liability for misrepresenting things in court. You don’t need to agree with this for it to be true. And railing against that fact will get you nowhere. I have tried to go after the lawyers and the result has been consistently negative — claim dismissed because of “litigation immunity.”
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So going after the Judge and the lawyers is a waste of valuable time, money and energy — something that the banks need you to do because they are sitting on a plan that claims money due when there is no money due to them, if at all. That is foreclosure.
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So if you are addressing the Judge for example, you first do what you must do whenever you are attempting to establish rapport with anyone — find common ground. You talk about obvious things about which you all agree so you are perceived as reasonable.
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THEN you move on to your argument about how this situation does not lead to the same result as the conventional case of foreclosure where an actual creditor is actually claiming a right to payment of an actual debt that is actually carried on its books as an asset receivable, which means that nonpayment did in fact cause it financial injury.
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Under our laws and just plain common sense, if you see someone rob a bank for example, then you, as a witness, have no right to sue the robber for the money they stole; true simply because they didn’t steal it from you. Why should you get any money that was stolen from the bank? And that is your point. The fact that the foreclosure players know — or even witnessed — the fact that you refused to make any further payments makes them a witness, not a claimant. 
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And yet…. if you do make the claim against the robber and the bank failed to press its own claim, you could get a judgement especially if the robber failed to raise any defenses. After all he knows he stole the money. [I am not equating homeowners with robbers. I am equitating banks with a unscrupulous version of you, making a claim to which you and  they are not entitled to receive any redress under law or common sense.]
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The question is not whether you owed the money or had any reason to pay or not to pay. The question is why are they appearing as claimants instead of witnesses in a claim by someone who actually did suffer some financial loss caused by your alleged nonpayment.
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And the question is why isn’t such a person (creditor) present in the foreclosure? Where are they? Who are they? Do they exist? If they don’t exist, was the transaction with the homeowner actually a loan transaction or was it something else entirely that was disguised as a loan transaction? 
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So you START with the premise that all legal debts should be paid to the obligee — the person to whom the debt is owed. Everyone agrees with that. And you follow with the premise, under the U.S. Constitution, that only people who have been injured can seek redress in court. You get the judge to agree that everyone agrees that if someone fails to pay a mortgage debt to someone who owns it, they should be subject to foreclosure, forced sale of their home, no matter how long it has been in the family, and evicted if they try to stay anyway.
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You talk about it as though you are in favor of foreclosure because that is where every judge starts. You don’t talk about foreclosure as though it is a new scheme that doesn’t have any support in logic or law because foreclosure has existed for centuries. It must exist because if someone parts with their money to give you a loan, they must be able to force repayment if you are unable or unwilling to make repayment. But that does not mean that a witness to nonpayment can make a claim.
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And you must take the time to study and understand the true nature of what has been really been going on. Securitization is by definition the issuance of securities. While it can be a source of financing it is just as often a means to distribute risk. The reason why thinly capitalized companies like DiTech and Quicken Loans were given hundreds of millions of dollars to sell trillions of dollars of low interest loans was not because the investment banks had come up with a new formula to squeeze profit out of low interest payments.
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It was because the return of principal and interest payments was irrelevant to their plan. The “failure” of such repayment plans was a centerpoint of the plan and they bet on it, making more and more money as each “loan” “failed.” Their plan was to sell securities. And the more securities they sold the more money they made because unlike all other securitization plans, they were not selling securities from an independent legal entity (client) that was going into business and using the proceeds to conduct or grow its business.
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Instead they were selling securities for themselves, taking the money and using as little of it as possible to cover the scheme. The money used to create the illusion of loans was a cover for the real scheme.
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The money, if any, that was sent to closing agents to close a transaction that was inaccurately described as a loan transaction was not delivered by the banks with the intent of creating a conventional loan product subject to lending laws. That would have made the investment bank a lender and they would have been named as such on the note and mortgage.
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Quite the contrary. It was designed to evade lending laws in a scheme that had has its hallmark claims by the investment banks, who were running the show, that the scheme did not subject them to lending laws and was not a loan. 
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By designating a false flag “originator” who was contractually unrelated to the investment bank and who received fees and bonuses from acting as though it was a lender, the banks now claim that they are not regulated by lending laws.
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My position is take them at their word and stop fighting them.
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OK, you are right but the only reason you are not subject to lending laws is that you did not engage in lending. So the money that arrived at the closing table was disguised conditional payment in exchange for a the homeowner’s signature on documents that could be used to fill in data on a spreadsheet.
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It was that data (not the loans) that was sold dozens of times thus relieving the investment bank from any risk of loss. The money was a fee paid to homeowners who were lured into transactions that were fraudulently disguised as loans but were in fact part of a plan to steal money and homes.
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Foreclosure is sought because it represents still more revenue and because by not foreclosing the banks would be admitting this wasn’t a loan in the first place. The money that went to homeowners or which was paid on their behalf was not a loan — it was only part of payment of a fee to which the homeowner was entitled (under quantum meruit) but knew nothing about and never had any opportunity to engage in free market negotiation.
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The reason why (a) there is no creditor and the reason why (b) all the documents are fabricated and (c) all this testimony is pre-scripted for perjury is simply that it wasn’t a loan to begin with — and nobody now is carrying the loan as an asset receivable on their books. NOBODY! The loan does not and never did exist. And that is because the money received was not a loan, it was payment for signature and implied consent to use private data for resale.
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The most basic law of contract is that there must be, at the outset, a meeting of the minds. The homeowner went into the transaction believing the false assertions that the money was a loan — instead of consideration for use of his or her private financial information and his or her signature.
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The investment bank went into the transaction through a myriad of sham conduits posing as “lenders” for exorbitant fees. The investment banks were not lending money. They were paying money so they could issue and profit from the sale of securities in “securitization.” Without that there would have been transaction at all. Refer to the “Step Transaction Doctrine” and “Single Transaction Doctrine” for support in case decisions and statutes. You’ll find multiple references on this blog from the early days (2007–2008) of this blog.
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The investment banks say they are not liable as lenders for noncompliance with lending laws. OK. A good lawyer can make a powerful argument for estoppel — the investment banks cannot take one position — that it wasn’t a loan in terms of regulation of lenders   — and then that it is a loan so they can foreclose without a creditor.
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But to get the judge to even consider such an apparently ridiculous assertion you need to demonstrate, step by step, relentlessly, that the foreclosure team has nothing. That doesn’t happen in one pleading or one hearing. It ONLY happens if you know and consistently use and apply the rules and laws relating to court procedure, discovery and trial objections.
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PRACTICE NOTES:
This argument can be made directly where the transaction was originated by the investment banks. Don’t get lost in the “warehouse lender” thickets — they were just one of many steps in a the circuitous process by which investment banks gave money to homeowners.
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But where a real loan was actually made by a real lender and then acquired by investment banks through what they called “securitization” then the argument shifts to the idea that the debt was extinguished at acquisition. this is because when all was said and done there was no creditor who was holding the debt as an asset receivable on its books.
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The fundamental point here, which can be corroborated with any knowledgeable person in the world of finance, is that neither the delivery of money to homeowners nor the acquisition of the debt after a real loan was originated was related to securitization as it had ever been done in the past.
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Securitization is simply the process of dividing up an asset into shares and selling them. This was never done in connection with these transactions. Nobody ever received a share of any loan. Securitization in this context consisted solely of the issuance of securities by the securities brokerage firm (investment bank) posing as an underwriter for a “trust name” that was merely a fictitious name of the the underwriter itself. That is not securitization. The job of the litigator is to gently and relentlessly lead the judge to conclude that this might indeed be the case and thus deny the foreclosure.
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Neil F Garfield, 73, is a Florida licensed attorney. He has received multiple academic and achievement awards in business and law. He is a former investment banker. securities analyst, and financial analyst.

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. EVEN THOSE THAT PRESENT THE DEFENSES PROPERLY LOSE, AT LEAST AT THE TRIAL COURT LEVEL, AT LEAST 1/3 OF THE TIME. IN ADDITION IT IS NOT A SHORT PROCESS IF YOU PREVAIL. 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.
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You got the loan didn’t you? Maybe not.

STOP ADMITTING THINGS YOU KNOW NOTHING ABOUT. STOP USING WORDS YOU KNOW NOTHING ABOUT.
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OK so let’s address that. It is quite natural to think that in ordinary circumstances that a loan was made and therefore some amount of money is due to somebody. So how do we address that natural bias? Allow me to play with that here.
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The presumption that a loan was made is just that — a presumption. It isn’t a fact unless the alleged borrower agrees he received money and that it was a loan transaction — or it is proven (which never happens). It is a conclusive presumption in the absence of a challenge by the borrower because that is how our system works. It takes the customary experience and makes it into a presumption.
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And clearly the fact that the borrower executed documents that are considered to be part of a loan agreement, raises two presumptions. The first is that there was money paid and the second is that it was a loan. And in the context of what we were all accustomed to seeing in the marketplace and what we were all taught in law school this is reasonable and almost unassailable presumption. Almost. It is still presumption which means that theoretically at least it is subject to rebuttal.
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All presumptions fail if the court finds that the source of documents used as the basis for the presumption of particular facts come from a source that is suspicious or not credible. The fact that documents come from an interested party does not in and of itself result in the failure of a presumption if the documents are otherwise deemed to be trustworthy.
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So on what basis could a homeowner claim there was no loan or even deny that a loan of money was made? The fact that the homeowner believes that in the refinancing no money actually exchanged hands is clearly insufficient to challenge anything. So is there anything to this?
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Well to begin with the homeowner actually has no idea what happend at the “loan closing.” But one thing we know for sure is that no loan closing involves any money until after the closing. The documents are signed in the expectation of consideration not upon the receipt of consideration. And since the homeowner is not party to anything that happens after closing, the homeowner is without knowledge as to whether there was money paid, and if so, to whom or why. So his proper response to any implied or actual representation or allegation of a payment of money is that he is without knowledge and accordingly denies same and demands strict proof thereof.
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This should probably be added to the Answer wherever it is possible to do so such as “Defendant denies knowledge and accordingly denies the implied allegation that money was paid and demand strict proof thereof.”
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This procedurally puts the matter in issue although not plausibly in the eyes of any judge. Thus the door is open for discovery as to payment contemporaneous with closing, by whom to whom and in what amount. Proof of payment will reveal in nearly all cases that the money came by wire transfer from an intermediary for an investment bank and not from any account owned or controlled by the named originator.
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Based on that fact the homeowner could establish that there was no consideration between the homeowner and the originator — unless the originator could establish that it was operating as agent for the investment bank.
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The problem of course is that nobody has ever received an answer to that demand in discovery.  So you need to get an order compelling an answer and then sanctions for failure to comply and then an order in limine preventing the foreclosure mill from introducing any evidence to the effect that value was paid by the originator. You are certainly entitled to an inference, if not a presumption, that no value was paid.
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And at trial, if there was one, failure to object based upon lack of foundation would be fatal to the homeowner who would have given up his hard won gains in one swift fell swoop.
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Assuming money was paid by someone, next is the issue of whether it was a loan. This seems obvious so it is a steep climb to get a judge to think otherwise. But let’s look at this.
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The documentation was presented as a loan but was that presentation a disguise for another different transaction that the homeowner knew nothing about? Who were the parties to that transaction? What was the nature of the transaction? What were the terms of the transaction?
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The only way you can bring this into an issue of fact is by denying (not denying knowledge) the implied allegation that the execution of the note and mortgage was part of a loan transaction. You’ll need an affidavit that says it was something else. That puts the matter in issue and then subject to discovery as stated above but the judge is going to be highly skeptical of what appears to be a slam dunk.
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So it is better practice to not only deny the implied allegation but affirmative assert (affirmative defense) that it was a disguised transaction (violating TILA disclosure, RESPA and alter FDCPA) in which the homeowner’s signature, name, reputation and property were used in a plan that was entirely devoted to selling securities such that the end result was that nobody was holding an asset receivable reflecting the principal or interest due on the alleged “loan.”
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In short the risk of loss was eliminated and nobody suffers financial injury from nonpayment. In fact, all parties on the back end were paid and are getting paid. Again that puts the theory in issue and opens the discovery door which terrifies the banks even though most foreclosure mills are not knowledgeable enough to recognize the danger of such a defense.
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To spice things up, the homeowner should allege that had proper disclosure been made he would have a choice of potential counterparties to such a securities issuer agreement and then bargained (quantum meruit) for more compensation than the mere receipt of a sum of money that had to be repaid. And in fact there is actual evidence out there that this is exactly what is happening — with the offers of payment of closing costs, no interest for 6 months, etc. The homeowner simply doesn’t know why such offers are being made.
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And to further spice things up you seek damages in the affirmative defense for violations of all relevant statutes, including securities statutes because the securities issued included the note and mortgage which were converted into securities. Remember that the statute of limitations does not apply to affirmative defenses which are limited in recovery to the amount sought by the claimant, plus attorney fees. (recoupment)
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Once again you will never get a response to discovery so you need to go through the process of compelling response,, sanctions motion in limine and objections in court. And you argue that you are entitled to an inference that the execution of the note and mortgage was merely a ruse for the commencement of a transaction that the homeowner (never refer to them as “borrower”) knew nothing about.
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And so you arrive at the conclusion that the scheme was about the business of issuing of securities without which no payment would ever have occurred for any purpose by the parties who are supposedly involved in what they called a “loan” and which they want the court to treat as a “loan” even though nobody owns the debt because everyone has already been paid. Nobody who paid value ever received ownership of the debt, note or mortgage. And nobody who received  an instrument of conveyance ever paid value. It was all a ruse to create the appearance of a foreclosure when in fact they were seeking profit.
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The homeowner is not getting a free house. The homeowner is getting what the investment bank deemed was “enough” to compensate the homeowner for his consent to the sale of his name, signature, reputation and home data. Maybe that compensation was enough and maybe it wasn’t.
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But what we do know is that the homeowner never had a chance to bargain for anything different and that the investment banks and all players in the issuance and trading of securities and all players in foreclosure have generated revenue and net income far in excess of what they claim to be a loan and far greater than what they should have disclosed if in fact the execution of the note and mortgage was a loan closing.
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Since they didn’t disclose it and they refused to be identified as lenders, they should not then be allowed to treat the transaction as a loan. Their failure to disclose was an admission that they were not lending money and that their business model did not require repayment from the homeowner. The foreclosure therefore is the continuing pursuit of profit rather than repayment of a debt, which is not owned by anyone as an asset receivable on any books of account. In short it is not a foreclosure nor even a proper cause of action — because there is no cause of action for loss of expected profit unless there is a contract expressly providing for it.
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Neil F Garfield, 73, is a Florida licensed attorney. He has received multiple academic and achievement awards in business and law. He is a former investment banker. securities analyst, and financial analyst.

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. EVEN THOSE THAT PRESENT THE DEFENSES PROPERLY LOSE, AT LEAST AT THE TRIAL COURT LEVEL, AT LEAST 1/3 OF THE TIME. IN ADDITION IT IS NOT A SHORT PROCESS IF YOU PREVAIL. 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.
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Tonight! Don’t stop fighting or thinking about tomorrow! 3pm PDT 6PM EDT

Thursdays LIVE! Click in to the WEST COAST Neil Garfield Show

with Charles Marshall and Bill Paatalo

Or call in at (347) 850-1260, 6pm Eastern Thursdays

 

The 2008 crash may seem like 12 years ago. Yet the conditions persist – victimizing both homeowners and investors. Homeowners still have no frame of reference or education as to how they could receive a loan without anyone owning the debt and why anyone would be party to such a transaction. Arguably investors by this point should know better. The problem is money — stockbrokers get to call themselves investment banks and courtesy of the 2008 crash they created are now commercial banks too. They are making money hand over fist on every sale of a “certificate,” “derivative” and homestead.

Bill Paatalo will discuss on the Show today how he is taking the fight to the Defendants in his Oregon case, previously discussed on the Show, in which the Defendants are now seeking massive attorney’s fees, over six-figures. The same Defendants who managed to secure a judgment based on lack of subject matter jurisdiction, are claiming now this same Court has jurisdiction to bring an attorney’s fee motion never raised in previous pleadings. The game is on. The “banks” are taking the position that they can eat their cake and still have it.

Charles Marshall will discuss how the ongoing institutional bias issues long present in foreclosure law cases is stubbornly creating a messy and patchwork terrain for borrowers to navigate in the COVID-19 era, with a focus on California. He will address this through an update of particularly the latest California-based coronavirus-related developments in court access, foreclosures, and post-auction evictions.

How to Challenge The Credibility of Documents Offered to Support Foreclosure

Legal presumptions are not meant to be used as a means for achieving an illegal or unjust result. But they do exactly that when apparently facially valid documents are left unchallenged.

A successful challenge to the credibility of the source of documents initially filed in foreclosure will end the case in favor of the homeowner. the reason is simple: with legal presumptions operating in favor of the foreclosure mill they have no case to offer or prove.

If you start at the beginning and challenge the narrative immediately it can and should lead to excellent results for homeowners under siege by profiteers seeking to force the sale of the subject property.

The plain truth is that all documents from securitization schemes seeking to foreclose are false. But at first glance they appear to be facially valid, which only raises legal presumptions if the deems the document to come from a credible source. This is true in all jurisdictions.

It’s high time for lawyers and pro se litigants to challenge the presentation of initial documents as coming from a source that (1) has a stake in the outcome and is therefore biased and (2) not credible based upon administrative findings in all 50 states in which the documents were not merely found to be defective but also untrue.

In all cases based upon securitization schemes, not even the named Plaintiff knows who owns the debt, note or mortgage. Ask anyone. Even in appellate proceedings the foreclosure mills had to admit they had no idea about the identity or existence of a creditor.

In other cases, attorneys were forced to admit that they never had any contract or or even CONTACT with their “client.” Cases whose style beings with the words “US Bank. Deutsche Bank, or Bank of New York Mellon” are sham cases with sham clients. The lawyer is neither instructed by nor paid by the bank nor is to processing the foreclosure on behalf of either the bank or any trust.

The same lack of knowledge is true for the foreclosure mill who operates under the protection of litigation immunity, the servicer who is receiving instructions from an investment bank posing as Master Servicer, a trustee who has no knowledge or administrative powers over the loan, a trust that has never been party to negotiation or sale of the debt or note or mortgage.

see RobosigningAdministrativeOrder

In all 50 states you have administrative orders in the courts, and administrative findings by the Departments of Justice and Attorneys general and even county clerks that point out with specificity the fact that the documents used by foreclosure mills were faked. That is fact, not opinion.

In hundreds of cases including some where I was lead counsel, there are specific recorded findings from trial judges as to how the foreclosure was faked.

It should not be that hard for lawyers to argue to the court that given the amount of work done (thousands of man hours) investigating the mortgage lending and foreclosure practices, some credence should be given to the now universal view that the documents were faked.

There can be no dispute that the documents all come from parties who have a unique and essential interest in the outcome of the foreclosure claim — i.e., preservation of revenue and achievement of additional revenue arising from the proceeds of a forced sale, none of which will be directed to anyone who paid value for the debt, note or mortgage.

The indicia of credibility and reliability are simply not there. And the indicia of lack of credibility and reliability are all there. Legal presumptions therefore are not legally available. 

It is not a big leap to also argue that the documents contained data that was also also untrue because in every case where the documents were faked, there was no follow up of actual evidence or proof of the claim.

It never happened that the investment banks said “ok, just to make everyone feel better here is the actual proof that the loan was owned by XYZ Corp, who suffered an actual (rather than hypothetical) financial loss arising from nonpayment of the debt. So the foreclosure although based upon false documentation did not produce an unjust result.”

That didn’t happen because there was no such evidence. In every case the foreclosure resulted in a windfall profit to all the participants in the foreclosure.

Remember you are simply challenging the presumption, thus allowing the claimant to prove its claim without the presumption. that is exactly  what the rules require. The fact that you defeat a presumption and that the claimant’s attorneys are forced to actually prove the truth of the matters asserted on the documents is not a stand alone reason for entry of judgment in favor of the homeowner.

THIS IS NOT A PUNISHMENT WHERE THE CLAIMANT IS DEPRIVED OF ITS CLAIM BECAUSE IT DID  SOMETHING ILLEGAL. IF THEY CAN STILL PROVE THE CLAIM, THEY WIN.

If indeed the homeowner does owe money to the claimant and they are both parties to a loan  agreement that the homeowner has breached then the claimant is entitled to foreclosure.

Legal presumptions are not meant to be used as a means for achieving an illegal or unjust result. But they do exactly that when apparently facially valid documents are left unchallenged.

In virtually all cases, such documents are not even facially valid, once you examine the contents and the signature block. Look at it. Study it. And then create your defense narrative. 

These cases are winnable because they should be won by homeowners not because of some technical argument.

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. EVEN THOSE THAT PRESENT THE DEFENSES PROPERLY LOSE, AT LEAST AT THE TRIAL COURT LEVEL, AT LEAST 1/3 OF THE TIME. IN ADDITION IT IS NOT A SHORT PROCESS IF YOU PREVAIL. 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.
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Please visit www.lendinglies.com for more information.

Who Can Foreclose?

The plain truth of SAP — Securitization in Practice — is that nobody who paid value received ownership of the debt and nobody who received an instrument of ownership of the mortgage paid value. 

Thus SAP — securitization in practice — splits payment of value from ownership of the debt which produces an extra legal situation because all US law requires that transfer of a mortgage or beneficial interest under the deed of trust is a legal nullity unless accompanied by a transfer of the debt. All US law requires that transfer of the debt can only be accomplished by payment for the debt.

The bottom line is only a claimant who paid value in exchange for ownership of the debt can satisfy the condition precedent in Article 9 §203 of the UCC as adopted in all US jurisdictions. Everything else is just an attempt at justification or rationalization for how the claimant has satisfied that condition.

Understanding the above explains completely why all documents after the loan closing are fabricated, false, forged, backdated and supported by  perjurious testimony. Foreclosure mills are bridging a gap created by investment banks through false statements.

So don’t get lost in the weeds. Most courts and therefore most attorneys get irretrievably confused when the discussion turns to possession, holding or rights to enforce a note. And lawyers fail to object when legal presumptions are applied to situations where possession of the note does NOT imply ownership of the note or the debt.

Note that there is huge difference between standing in the pleading and standing in the proof. In pleading the mere allegation of facts is sufficient to establish standing to proceed. But at trial the claimant is required to actually prove standing, not merely assert it. In practice this means the use of presumptions to arrive at the factual conclusion that the claimant paid for the debt when in fact that never happened.

Point #1: In situations where there is a claim of securitization, there is no case (not ever) in which the claimant (trust, trustee, certificates, certificate holder etc.) is ever alleged to be or ever proven to be the holder in due course (HDC). HDC status means that the claimant can avoid nearly all potential defenses of the borrower. Securitization claimants don’t have this status because they did not purchase the debt for value without knowledge of the borrower’s defenses. Very simple. The object of foreclosure mills is to be treated as HDC without asking for it. The defense narrative is to reveal that HDC status does not apply — not  necessarily because they didn’t pay for it but because the foreclosure mill has never asked for HDC status. Thus the court has no business applying HDC rules.

Point #2: The claimant must own the debt as a creditor — i.e., as a party who paid value in exchange for receiving evidence of ownership of the debt. This is the only party who can claim injury from non performance of the obligation and therefore the only party with standing to bring the claim.

Point #3: Standing to seek judgement on a promissory note does not equal standing to foreclose unless the claimant owns the debt. This is the beginning point of where lawyers, judges, borrowers and everyone else gets confused. In the mind of the public debt=note=mortgage. Legally, equitably and morally the debt, note and mortgage are separate and distinct each carrying its own legal rights that are not necessarily consistent. Receipt of money creates a demand debt (liability) unless there is a clear indication of a gift. Execution of a promissory note creates a liability even if there is no debt — hence mere possession or even rights to enforce a note is not necessarily sufficient to establish standing to enforce the debt or mortgage.  The mortgage, regardless of what it says, can only be used to secure payment of a debt, the terms of which might be contained in a promissory note. Since foreclosure is a process of forfeiture the rules allowing for foreclosure are much more stringent than the rules of getting a judgment on the liability created by a note. A holder in due course may get judgment on the note, and a judgment of foreclosure on the debt. Nobody else can do so. If they have not paid value in exchange for ownership of the debt, they are not legally allowed to foreclose.

Point #4: In practice claiming possession of the note is treated as claiming title to the debt and thence incidentally a claim as holder in due course. It may not be logical or legal but there it is. So the presumption arises as though the claimant was a holder in due course which effectively destroys any defense — if not challenged. The borrower should deny that the claimant has any right to foreclose because it has not in fact paid value in exchange for ownership of the debt. Any purported transfer of a mortgage is a legal nullity without transfer of the debt also. Then the borrower should simply ask a contention interrogatory as to whether the claimant contends that is has paid value for the debt in exchange for ownership of the debt. And a request  for production should ask for evidence of such payment. The refusal to answer or respond is sufficient, after the foreclosure mill has been given several chances to respond, to raise an inference in favor of the borrower. That inference defeats the presumption that the claimant has paid value for the debt in exchange for ownership, which means that any paper transfer of the mortgage is void — unless proven otherwise at trial with evidence instead of presumptions. In actuality, all the borrower is doing is forcing the foreclosure mill to stop using legal presumptions and actually prove their standing,  right to collect, ownership and right to enforce the debt. If they had evidence of payment they would do so. But they can’t because nobody who paid value received ownership of the debt and nobody who received an instrument of ownership paid value.

Here are some quotes from a case in Florida that might help:

At trial, a litigation manager for Bayview testified. He was not a records custodian for RCS or for Bayview. He was not familiar with the computer systems that either of the prior servicers, CitiMortgage and RCS, used for compiling information on the loan or how it was inputted into the systems. He had no information as to whether the information on the loans was inputted into the prior servicers’ systems correctly. He could not testify to the truth or accuracy of RCS’s records, just that they were provided to Bayview.

Seffar v. Residential Credit Solutions, Inc., 160 So. 3d 122, 124 (Fla. Dist. Ct. App. 2015)

He testified that Bayview was the servicer and holder of the note. He believed that Bayview had acquired the note through a purchase agreement with RCS, but he had not seen the agreement, nor did he have a copy of it. His belief that Bayview was the owner of the note under the purchase agreement was based on “a screen shot of our capital assets systems, which has information in regards to the status of the loan with us.” This screen shot was not produced at trial.

Seffar v. Residential Credit Solutions, Inc., 160 So. 3d 122, 124 (Fla. Dist. Ct. App. 2015)

As to the allonge with the blank endorsement from ABN, he did not know when it was executed or whether the signature on it was a “wet ink” signature or a stamp. He did not know whether the allonge was affixed to the note prior to it being filed in the court file. He did not know if the vice president who signed the allonge on ABN’s behalf was in the employ of ABN in November 2009, when Bayview’s records showed that servicing of the loan had been transferred from ABN to Franklin Bank.

Seffar v. Residential Credit Solutions, Inc., 160 So. 3d 122, 124 (Fla. Dist. Ct. App. 2015)

we agree that it presented no competent evidence that RCS was the holder of the note at the time it filed suit or that it was a nonholder in possession and entitled to enforce the note. Therefore, Bayview failed to prove standing.

If the note does not name the plaintiff as the payee, the note must bear a special endorsement in favor of the plaintiff or a blank endorsement…. Alternatively, the plaintiff may submit evidence of an assignment from the payee to the plaintiff …

Even in the absence of a valid written assignment, the mere delivery of a note and mortgage, with intention to pass the title, upon a proper consideration, will vest the equitable interest in the person to whom it is so delivered.

Seffar v. Residential Credit Solutions, Inc., 160 So. 3d 122, 125 (Fla. Dist. Ct. App. 2015)

“Because a promissory note is a negotiable instrument and because a mortgage provides the security for the repayment of the note, the person having standing to foreclose a note secured by a mortgage may be … a nonholder in possession of the note who has the rights of a holder.” Mazine v. M & I Bank, 67 So.3d 1129, 1130 (Fla. 1st DCA 2011).

A “person entitled to enforce” an instrument is: “(1) [t]he holder of the instrument; (2)[a] nonholder in possession of the instrument who has the rights of a holder; or (3)[a] person not in possession of the instrument who is entitled to enforce the instrument pursuant to s[ection] 673.3091 or s [ection] 673.4181(4).” § 673.3011, Fla. Stat. (2013). A “holder” is defined as “[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.” § 671.201(21)(a), Fla. Stat. (2013). Thus, to be a holder, the instrument must be payable to the person in possession or indorsed in blank. See§ 671.201(5), Fla. Stat. (2013).

Seffar v. Residential Credit Solutions, Inc., 160 So. 3d 122, 125 (Fla. Dist. Ct. App. 2015)

FDCPA Claims Might Not Be Barred By Statute of Limitations

Here is a powerful argument that SCOTUS acknowledged: nobody should benefit from their own fraudulent conduct. The FDCPA has a one year statute of limitations. And people have tried to litigate on the premise that the one year should run from the date of discovery not when the violation occurred. The courts have disagreed saying that if Congress wanted it to be the date of discovery it would have said so.

But if the date of discovery was delayed because of additional fraudulent conduct by the defendant then the courts, although always leaning heavily toward the banks, are left in a quandary. And SCOTUS acknowledged that issue and refused to rule directly on it because the consumer failed to preserve the issue on appeal — another example of how rules can lead to failure of you don’t follow them.

The wording of the opinion  and the opinion of analysts strongly suggests that if you plead, with specificity, fraudulent representations and conduct that caused the delay your claim is not barred until one year after the discovery of the violation.

Note that his will not help people who discovered or “should have discovered” the violation more than one year before filing suit.

Note also that it is one thing to plead and another to prove. Fraud requires specific pleading and proof regarding detrimental reliance on the fraud and causation of damages. The damage under this part of  the case would be that the consumer was unable to ascertain the violation and thus seek a remedy. Just using the word “fraud” is the surest ticket to failure.

see Fossano Article on Mondaq

See Rotkiske v. Klemm Rotkiske v. Klemm, No. 18-328 (U.S. Dec. 10, 2019)

Rotkiske v. Klemm, — S. Ct. — (2019) left open the question of whether a plaintiff can avoid the one-year statute of limitations by establishing that the delay in bringing the claim was the caused by the defendant’s fraudulent conduct. The answer to that question will have to await a case where the plaintiff properly preserves the argument on appeal. On a related note, the case reminds attorneys to ensure that they preserve all of their clients’ arguments at all stages of a case.

FDCPA violations could expose debt collectors to considerable damages and penalties, as well as legal costs and fees.

From the case:

Rotkiske argued for the application of a “discovery rule” to delay the beginning of the limitations period until the date that he knew or should have known of the alleged FDCPA violation. Relying on the statute’s plain language, the District Court rejected Rotkiske’s approach and dismissed the action. The Third Circuit affirmed. Held: Absent the application of an equitable doctrine, §1692k(d)’s statute of limitations begins to run when the alleged FDCPA violation occurs, not when the violation is discovered. Pp. 4-7.

Rotkiske v. Klemm, No. 18-328, at *1 (U.S. Dec. 10, 2019)

The Fair Debt Collection Practices Act (FDCPA) authorizes private civil actions against debt collectors who engage in certain prohibited practices. 91 Stat. 881, 15 U. S. C. §1692k(a). An action under the FDCPA may be brought “within one year from the date on which the violation occurs.” §1692k(d). This case requires us to determine when the FDCPA’s limitations period begins to run. We hold that, absent the application of an equitable doctrine, the statute of limitations in §1692k(d) begins to run on the date on which the alleged FDCPA violation occurs, not the date on which the violation is discovered.

Rotkiske v. Klemm, No. 18-328, at *3 (U.S. Dec. 10, 2019)

“Rotkiske’s amended complaint alleged that equitable tolling excused his otherwise untimely filing because Klemm purposely served process in a manner that ensured he would not receive service.” Rotkiske v. Klemm, No. 18-328, at *5 (U.S. Dec. 10, 2019)

This Court has noted the existence of decisions applying a discovery rule in “fraud cases” that is distinct from the traditional equitable tolling doctrine. Merck & Co. v. Reynolds559 U. S. 633, 644 (2010); Gabelli v. SEC568 U. S. 442, 450 (2013) (referring to the “fraud discovery rule”). And it has repeatedly characterized these decisions as applying an equity-based doctrineCalifornia Public Employees’ Retirement System v. ANZ SecuritiesInc., 582 U. S. ___, ___-___ (2017) (slip op., at 10-11); Lozano v. Montoya Alvarez572 U. S. 1, 10-11 (2014); Credit Suisse Securities (USA) LLC v. Simmonds566 U. S. 221, 226-227 (2012); Young v. United States535 U. S. 43, 49-50 (2002). Rotkiske failed to preserve this issue before the Third Circuit, 890 F. 3d, at 428, and failed to raise this issue in his petition for certiorari. Accordingly, Rotkiske cannot rely on this doctrine to excuse his otherwise untimely filing. (e.s.)

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Rotkiske v. Klemm, No. 18-328, at *9 (U.S. Dec. 10, 2019)

Practice Note: I would suggest that practitioners take a close look at modifications as falling within two different doctrines and maybe more. 

First, modification offer from one who is not authorized to make the offer is a violation of the FDCPA. The acceptance and enforcement of payments under a modification agreement might also be a violation of the FDCPA. It is procured under duress.  It is a fraudulent misrepresentation designed to induce the borrower to waive defenses, change lenders (without realizing it) and essentially create an entirely new contract that may or may not incorporate the original note or mortgage. 

Second, the modification has many earmarks of a new financing subject to disclosures required for the origination of any loan. It makes the “new” claimed servicer the lender or the agent of a lender who is not disclosed and who probably has no claim within the chain of title relied upon by the servicer when it made the offer to modify. AND it might well be that it reflects an actual payment in the case where the loan was securitized after a bona fide loan. AND it has entirely new terms with new principal, new interests and frequently a new term.

That sounds like a refinancing to me. If I am right, then the modification is subject to rescission, to wit: (1) 3 day TILA rescission, (2) 3 year TILA rescission and (3) common law rescission. In addition there are claims under RESPA and FDCPA that would appear to arise anew. The specific disclosures required are contained in Federal lending law (TILA) and state deceptive lending laws. ALl such laws are incorporated into contracts for lending by operation of law. So it is not only fraud it is a violation of statute. 

The fraud in such situations is that an interloper falsely poses as a lender or agent of lender. The borrower is in financial emotional distress is induced to enter an agreement that the borrower reasonably believes is for (a) the benefit of the borrower and the (b) creditor who has paid for his debt and owns it — because that is the representation of the servicer who offered it. That is  false. The borrower is injured because while seeking settlement or at least communication with the actual party who has paid for and owns his debt he was prevented from doing so and the borrower had no way of knowing that the servicer’s representations were untrue.

As always discovery is key to proving these allegations and without follow up motions to compel and motions for sanctions discovery won’t do you any good. They won’t answer because they can’t answer. 

PennyMac Laundromat: Is anything real there?

PennyMac appears to be a vehicle of “cleaning” fatal title deficiencies to the debt, note and/or mortgage on loans. It operates on behalf of CitiMortgage and multiple other entities on loans where the selection of a claimant is essentially random.

The basic playbook of the banks is to insert a real business entity with no actual connection or transaction involving payment of value for the debt, note or mortgage and fabricating documents to imply that such transactions exist. My investigation and that of others reveals that PennyMac is one such sham conduit, in order to create documents that give rise to the legal presumptions that are available when a document appears to be facially valid.

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

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
PennyMac is generally used as a vehicle to launder bad title and pursue foreclosures on behalf of entities that have no right, title or interest in the debt, note or mortgage. Generally speaking all of the documents that purport to involve PennyMac and its predecessors are fabricated and false. They are false because they falsely imply the existence of financial transactions in which value was paid for the debt.
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All residential home loans are about money and nothing else. The banks seek to distract you and the courts from looking at the money and instead, direct you into looking to documents. If I produced a document that looked facially valid, a judge might accept it as valid and true even though the matter asserted in the document is actually untrue. So for example if I were to produce a “facially valid” document saying I am your father, it wouldn’t be true but it would still be taken as true until you rebut the presumption arising from the “facially valid document.
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So the first step is really examining a document to determine whether it is facially valid. There are times, strategies and tactics where it might be wise to direct the court’s attention to this issue by simply filing a motion that disputes the facial validity of a particular pleading oir document and asks for an evidentiary hearing on the subject. Some judges grant such motions because a ruling from such a proceeding might propel the case to an early end.
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A facially valid means what is says. If the document recites all the elements required by statute and it is properly signed (and notarized if so required), the document is facially valid and the legal presumptions are available to the proponent of such a document or pleading.
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So the court takes as true all assertions on the face of the document. A document is not facially valid if it is impossible to determine what is asserted as factually true.
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A reference to an external document that is not attached or even identified frequently results in a dispute over the facial validity of the document which may require an evidentiary hearing on the validity and authenticity of the document. But if the opposing party fails to raise such an objection the document will be accepted as facially valid and then the factual assertions contained or implied by the document will generally be taken as true.
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The debt lies at the root of the loan, the servicing, the collection, and the enforcement of the loan. Without the debt, there is no authority. Without the debt the action is not a foreclosure even though the lawyers label it as a foreclosure. The lawsuit or notice of sale is merely a device to generate revenue which is expressly void against public policy and law.
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The problem is that the banks developed a scheme by which investors paid for the debt and never received ownership of the debt, note or mortgage. This means that third parties receive borrower payments, insurance payments, bailout payments and proceeds of foreclosure sales — something which is not allowed under current law, nor should it be allowed.
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None of these third parties ever turn over such money to the investors who paid for value but did not pay value in exchange for ownership of the debt. As a result, any document implying the transfer of the debt through payment of value is substantively invalid because no such transaction ever occurred in the real world.
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There is no reason for a “successor” to pay a “predecessor” if neither of them owned the debt. The only way you get to own a debt is by paying for it with real value which means money. When you ask for a description of such transactions you will be met with a variety of obscure objections whereas if they had it, they would gleefully reveal it. Neither the note nor the mortgage (or deed of trust) can be actually fully separated from the debt because the obligation to make payment on the debt is all that those documents are about.
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I’m not saying the debt doesn’t exist. I’m saying based upon review and analysis of documents, there is nobody in the chain of title relied upon by your opposition who has ever participated in a transaction in which value was paid for the debt. Ownership of the debt can only be accomplished, based upon my research, by payment of value for the debt. See Article 9 §203 of the Uniform Commercial Code as adopted by all U.S. jurisdictions including your own.
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Payment of value for the debt is a condition precedent to enforcement of the debt. This is both common sense and statutory law. If “servicing”, administration, collection or enforcement of the debt is performed on behalf of a claimant that does not own the debt, then the condition precedent is not met. Such actions are illegal and any documents that are created to support such illegal actions are void.
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If the “servicer” or holder of a limited power of attorney, as in many cases, is not the legally authorized representative of a party who possesses ownership of the debt (i.e., they paid for it) then their actions are illegal, unauthorized and probably fraudulent. In a foreclosure the court must know (not hope) that the proceeds of the foreclosure sale will go to a party or group of parties who paid value in exchange for ownership of the debt. If the court does not know that, it isn’t a foreclosure, which is a remedy exclusively designed to provide restitution of an unpaid debt. 
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The issue confronting you is that the documents, at first blush, appear to be facially valid. But the reference to an unidentified unattached external document like a Power of Attorney in lieu of an actual servicing agreement reciting the authority of the parties, makes such documents facially invalid but still subject to proof. Upon proving authority as I have outlined above, the document could be deemed valid, if the proffering party proves the line of succession that starts with an owner of the debt. In virtually all “securitization” cases I don’t think any such line of succession exists.

Navigating LOST COMMUNICATION With “Servicers” Who Are in Reality Merely Steering You Into Foreclosure

The main point is that borrowers must calibrate their thinking. Debtors are not dealing with anyone who wants to collect payments. They are dealing with someone who wants a foreclosure so they can steal the proceeds. The forced sale of the house generates revenue that is distributed to several players involved in the foreclosure effort and several players involved in the REO sale and eviction.

The rest of the money goes to the securities brokerage firm (investment bank) where there is no loan receivable account against which to credit the deposit. In short, while labeled as various vaguely described transactions, the substance of the deposit is that it is revenue even if it is not declared as such for tax purposes.

Against this backdrop a common complaint I receive is that borrowers are in good faith attempting to make payments or send documents requested by the “servicer” only to find that they are unable to do so or that the documents were lost. So they ask me what to do next.

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

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

RULE #1: STOP CALLING THEM “THE BANK.” THEY ARE MOST LIKELY NOT THE BANK — AND THEY DO NOT EVEN QUALIFY AS SERVICERS IN MOST INSTANCES. THINK OF THEM AS SCAM ARTISTS WHO HAVE GAINED YOUR CONFIDENCE (I.E. CON MEN) TO PREVENT YOU FROM INQUIRING ABOUT WHO SHOULD BE RECEIVING YOUR PAYMENTS OR THE PROCEEDS OF A FORECLOSURE SALE. 

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Technically you are most likely NOT dealing with anyone who qualifies as a creditor nor even a debt collector, who could only be functioning on authority from an actual creditor. So theoretically you would be well within your legal rights to simply not pay money to a party who is not entitled to receive them.
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Reality is different from theory. While in past times anyone attempting to collect, process or enforce a debt would be required to disclose everything about their ownership, agency or authority, today virtually everyone presumes that any such party has legal status. Because of that presumption, refusing to make payments as demanded is fraught with the risk that (1) the pretender lender will declare you to be in default and (2) start enforcement proceedings against you based upon fabricated but nonetheless facially valid documentation.
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So my usual and primary advice is to refrain from any action or inaction that puts you in a worse position than the one you find yourself. And I always recommend at least consulting with local counsel before deciding on any course of action.
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That usually means you make the payments.
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The only other alternative is to file a lawsuit in which you ask to deposit the funds in the court registry because you want to make the payments but you don’t believe the party demanding those payments has any actual legal right to do so.
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INTERPLEADER: An interesting twist on this type of pleading could be that you file your lawsuit, asking for attorney fees, and name both the servicer demanding payment and the investment bank (securities brokerage firm(s)) that is/are most likely behind the securitization scheme. This would be an interpleader lawsuit that basically says I have this money, it is for a debt I owe, Party A demands it, but I think Party B might be the one to whom it is owed. I have no assurance from Party A that the money would be given to Party B or any other entity that has paid for the debt and is therefore entitled to receive the proceeds of my payments. I don’t care who gets it. I just want to know who to pay. 
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In a further twist (which could negate your right to receive attorney fees) such an action could also include a count for disgorgement if the court finds that the party demanding payment was not entitled to receive it. That could mean return or deposit of all money ever received by the parties named as respondents in the interpleader action.

Generally, disgorgement is a form of “[r]estitution measured by the defendant’s wrongful gain.” Restatement (Third) of Restitution and Unjust Enrichment § 51, Comment a, p. 204 (2010) (Restatement (Third)). Disgorgement requires that the defendant give up “those gains … properly attributable to the defendant’s interference with the claimant’s legally protected rights.” Ibid . Beginning in the 1970’s, courts ordered disgorgement in SEC enforcement proceedings in order to “deprive … defendants of their profits in order to remove any monetary reward for violating” securities laws and to “protect the investing public by providing an effective deterrent to future violations.”Texas Gulf,312 F.Supp., at 92.

Kokesh v. Sec. & Exch. Comm’n, 137 S. Ct. 1635, 1640 (2017)

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Federal jurisdiction could apply.

Whereas statutory interpleader may be brought in the district where any claimant resides ( 28 U.S.C. § 1397), Rule interpleader based upon diversity of citizenship may be brought only in the district where all plaintiffs or all defendants reside ( 28 U.S.C. § 1391 (a)). And whereas statutory interpleader enables a plaintiff to employ nationwide service of process ( 28 U.S.C. § 2361), service of process under Rule 22 is confined to that provided in Rule 4. See generally 3 Moore, Federal Practice ¶ 22.04.

State Farm Fire Cas. Co. v. Tashire, 386 U.S. 523, 530 n.3 (1967)

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In all events any attempts at communication or payment that are frustrated by the party demanding that payment should be documented by U.S. Postal Service, Certified Mail, return receipt requested — because your attempts will be denied. The robowitness or affiant on an affidavit will say there is no record of such attempts. LIke the above, an interim measure would be to pay the money into a trust account administered by an attorney or some other legally recognized escrow agent.
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I have seen many judges ask the borrower who relates this story what they did with the money after it was refused. If there answer is that they spent it, the judge often construes that as undermining the credibility of the borrower’s testimony. But if the borrower says it was paid into escrow where it still remains most judges regard that in a light favorable to the borrower and it raises their antagonism toward the lawyers and the servicer who are now presumed to have screwed things up even if they were actually entitled to collect, process or enforce the debt.
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PRACTICE NOTE: While actual tender of actual payment certainly bars any legal enforcement action to collect the tendered payment, it does not render the entire lien unenforceable. BUT if the notice of default and end of month statements show an amount due that should have been reduced by the amount of the tendered payment then the notice of default and subsequent notice of sale or lawsuit could be defective. And if the refusal to accept payment was part of a larger scheme to steer the borrower into foreclosure, that i sone building block in a case for illegal, fraudulent and/or wrongful foreclosure. 
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Beware of the proof requirements against a court bias that the borrower was probably trying to game the system. We all know that it is the other side gaming the system but the court presumes otherwise, partly because it is legally required to do so based upon the facial validity of the documents presented — even if they are fabricated. For that reason I frequently suggest attempts at payment or delivery of documents in person at a branch or regional office, witnesses to such attempts, photos, and even video, where it is legal to do so. Signs posted to the effect that there is video surveillance might suffice as permission to record. Check with local counsel.
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In addition, in litigation you can demand copies of recordings made at particular locations and/or times. The response will be they don’t have that recording but if you can get a judge to require them to produce the recordings on either side of the time frame in which the contact occurred, they will likely retreat because the absence of the video or audio recording will speak volumes about their conduct.

Defending Foreclosure is Practice Not Theory: Discovery is the Key

I’m not sure why there are people who are calling my approach theoretical. My focus is strictly practical — using the rules of civil procedure to expose the truth of the matter asserted. Specifically, the end result should be and most often is that the opposition either dismisses the claim, or the court bars them from proceeding when the are unable or unwilling to answer interrogatories and requests to produce.

Based upon what some people are writing to me I think that they are either skipping discovery entirely or they are using a shotgun approach in discovery. The questions and requests must be properly worded and directed to the only thing that is in dispute — whether the claimant has suffered any financial injury as a result of the admitted nonpayment on an admittedly existing loan.

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

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

If you think the approach is theoretical you are misapprehending the simple strategy that I propose. The issue is not complicated: does the claimant have a right to foreclose because they are seeking restitution of an unpaid debt owed to the claimant? If the answer is no, which is usually the case in loans subject to claims of securitization, then the reason is that the claimant doesn’t own the debt. The rest of the allegations are true — the existence of a loan, the nonpayment etc.

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The theory behind the approach is complex but that is not something that homeowners can or should try to prove. It is merely an anchor for the strategy so the lawyer does not lose his or her way.
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Documents will all say things that would lead to the opposite conclusions. But the actual facts are opposite. It is the burden of the homeowner in foreclosure to ask questions and demand production of documents that support the claim that the debt is owed to the claimant because the claimant owns the debt and has suffered injury from nonpayment (default).
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Once the homeowner establishes that the opposition is unwilling or unable to respond to those questions and demands, the legal presumptions arising from what the documents state can be and usually are undermined — even raising the inference or presumption that the claim is false.
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But even if the inference or presumption in favor of the homeowner is not raised, the opposition can be prevented from introducing any evidence of ownership of the debt because they failed to answer discovery, failed to obey court orders requiring their answer and then were in contempt of court. Judges are very willing to impose sanctions on pleading and even sanctions preventing the claimant form introducing evidence intended to support the claim.
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So my approach is far from theoretical. It is practical and understandable if you understand the rules of civil procedure.

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PRACTICE NOTE: For any of this to work, you must do the work. File discovery, file motion to compel, file motion for sanctions and file motion in limine. In a case that is entirely about the debt most judges (not all) will have no problem with requiring answers to discovery directed at information about the debt.
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The confusion in the courts and in people’s minds occurs when they assume that the proceedings are actually a foreclosure simply because the claimant says so. It is not a foreclosure unless the action is for restitution of an unpaid debt. I use the word restitution because foreclosure is an action in a court of equity.
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And there are thousands of cases finding ways to bend the law in favor of claimants who say they are foreclosing because they are focusing on (a) the documents which are mostly fabricated and (b) more importantly, an assumption that is unfounded and untrue. The biggest problem is the belief of attorneys and their clients that the action is actually a foreclosure. It isn’t.
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So you get cases that say that even if things are “irregular”, they will affirm the decision because in the end end there is no real foul and no real harm. It is the burden of the homeowner to disabuse them  of this notion at least in part and make them face the fact that there is no evidence to support any claim on behalf of the claimant or any party that is mysteriously represented by the claimant.
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You will always get this result when you focus on the documents instead of the facts. The underlying assumption in all of these cases is that the case is a foreclosure — which means that it is an action for restitution of an unpaid debt. If that is true then the court is justified in bending rules in favor of the claimant because ultimately the proceeds of the foreclosure sale will go to pay off the debt.
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That is why it is essential that the homeowner attack the ownership of the debt. Because if the claimant doesn’t own it then the action is not for restitution of an unpaid debt. A debt is not owned without paying for it. But despite law to the contrary, the courts make an additional presumption that even if the claimant is not “technically” entitled to foreclose, the money from the forced sale of the property will still go to some party or parties that have  paid value for the debt and are injured by nonpayment. This assumption is without any foundation of facts and is in fact erroneous.
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The money is going into the pocket of those players involved in the “foreclosure” and they receive it as revenue. However the revenue part of the scheme while implied should probably not be part of the defense narrative because it sounds like conspiracy theory and lacks “credibility” even though it is true.

Post Judgment Assignments Continue to Baffle Homeowners and Foreclosure Defense Lawyers

Charles Koppa in San Diego was the first person  to point out to me that the activities after even a nonjudicial sale told the real story about the what was going on. That was back in 2008. Lately I have been getting questions relating to post-sale or post judgment activities.

There is a doctrine that says that upon judgment in a judicial state or upon sale in a nonjudicial state, the mortgage or deed of trust is merged into the judgment or sale respectively.

The most recent questions I have received suggest that perhaps the debt, note and mortgage or deed of trust is extinguished by the judgment or sale. They are not. Merger is different from invalidation or extinguishment. And vacating a judgment or sale merely restores the parties back to where they were before the judgment or sale.

But sloppy orders from the bench sometimes creates doubt or uncertainty as to the rights and duties of the parties.

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

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

Here is the answer to a recent question posed by a reader:

The law does not prevent someone from executing an assignment of mortgage. The question is whether such an assignment has any effect, and if so, what is that effect?

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 This question appears to be coming up with increasing frequency and I am ignorant of the reasons why this is suddenly rearing its head.
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First I will say that any attempt to position yourself such that the judgment eliminated the note and mortgage and therefore you are exempt from writ of possession or liability on the debt is a false position and would undermine your credibility in court, in my opinion. If the Judgment is vacated it merely returns the parties to the position they were in before the judgment was entered. Neither the mortgage nor note nor debt have been extinguished in such circumstances.
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Second the entry of a final judgment of foreclosure has the effect of replacing the rights under the mortgage and note with rights arising from entry of the final judgment. In plain language this means that once Judgment is entered, the forced sale of the property may be scheduled and conducted and a new deed upon such sale has the effect of transferring title from the homeowner to the successful bidder at auction.
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The successful bidder can be and often is the party named as the claimant in the foreclosure action. Instead of bidding with cash, the bid is normally a “credit bid” which means that the claimant in the successful foreclosure case uses the money award in the final judgment in place of cash.
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Many different legal presumptions arise from each step of the foreclosure process.
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There can be an “assignment” after foreclosure judgment has been entered but it is not technically an assignment of mortgage which is generally treated as merged into the final judgment of foreclosure. A document that purports to be an assignment of mortgage post-judgment would probably be ineffective to assign the mortgage which no longer legally exists, even though it remains in the title record. It would also be ineffective to assign the debt unless a court chose to treat the assignment as an assignment of rights under the final judgment of foreclosure.
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The law does not prevent someone from executing an assignment of rights under the final judgment. But like all documents it must be both facially and actually valid. If it is facially valid then it is the burden of the homeowner to show that it actually had no validity. It has no validity if there was no completion of the transaction as required by law. By “the transaction” I mean the transaction implied by the assignment. No reasonable person would give up rights to a mortgage worth hundreds of thousands of dollars without payment.
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As with most documents arising from claims of “securitized” loans there is no actual transaction in which money exchanged hands because the original consideration came from a third party outside of the entire chain of title. This the only party entitled to receive payment, under current law, would be the last party to pay value.
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While I am not aware of any specific case law that deals with assignment of bidding rights or any other post judgment assignments, it seems likely that such an assignment would be required to meet the same test as an assignment of mortgage, to wit: that the assignment is a legal nullity (i.e., it never happened, it has no legal effect) unless there was a concurrent financial transaction in which value was paid for the debt.

This is definitely the requirement under current law in all U.S. jurisdictions. While the courts have twisted their interpretations beyond all recognition to make it seem like the requirement of payment of value has been satisfied, this can only be done through legal presumptions.

And the legal presumptions can be rebutted.

The key strategy for revealing the falsity of the presumption is discovery where the homeowner borrower asks the simple questions about the dates and parties to transaction in which value was paid for the debt, note or mortgage.

Generally speaking you will never see answer to such questions because if they did answer they would be admitting that nobody in the chain of title ever paid value as required by law. And generally speaking there are very few occasions where the court won’t order them to answer it. And generally speaking there are very few occasions where they don’t violate the court order which opens the door to inferences and presumptions in favor of the homeowner’s defensive position.

Answering the Shell Game

Most of the questions I get come from lawyers and homeowners who are totally confused by the array of names of companies that appear, disappeared and replaced by lawyers operating under instructions from command central — a group of lawyers who oversee the foreclosures of loans claimed to be securitized. They are the ones who give the orders to “servicers” and “foreclosure mills.”

The goal is to force the sale of homes and obtain the proceeds of sale for the benefit and account of a stockbroker who initiated a scheme of “securitization.”

Everything that happens in correspondence, statements and enforcement actions is specifically designed to make lawyers, homeowners and judges think that is not the case. Everything is designed to create the false impression that the parties involved have every legal right to originate, process and enforce residential loans when in fact no such authority exists.

The foreclosure process is just one step in many that results in unconscionable profits, fees and commissions distributed to a multitude of players whose livelihood depends upon successfully duping the courts into allowing foreclosure despite the fact that the money from the forced sale will never be paid to the investors who paid for the debt.

One such question came in from a reader regarding BONY Mellon as trustee of a supposedly REMIC trust. As with all things in the era of securitization fail (see Adam Levitin) even that is false. An entity that does not serve as a pass through vehicle for payment of principal and interest on residential loans is not a Real Estate Mortgage Investment Conduit — so it isn’t a REMIC. A name that includes the word “trust” in it without a trust agreement in which something is entrusted to the “trustee” is not a trust.

So BONY Mellon is simply renting its name out for use by stockbrokers who call themselves “investment banks” in order to create the illusion of an institutional loan when nothing could be further from the truth. With only a few exceptions the same statement applies to all entities named as “trustees” of “REMIC” “trusts”.

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

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

Here is my reply to the reader:

They are playing a shell game and that is  what you should say:

  • None of the BONY Mellon entities ever owned or paid for the debt, note or mortgage.
  • None of the BONY Mellon entities ever served as trustee for the benefit of certificate holders
  • None of the certificate holders ever received a conveyance of ownership in the debt, note or mortgage. The assignment is always void (see below).
  • None of the certificate holders hold any equitable interest in the debt, note or mortgage because they expressly waived any such interest.
  • None of the BONY Mellon entities ever received your loan to hold in trust for anyone.
  • The assignment of bare naked title without the debt is a legal nullity. The trust agreement says that BONY holds bare naked legal title for the investment bank, but it does not have legal title because the debt was not also transferred.
  • The appearance and disappearance of technical legal entities occurs for the sole purpose of creating the illusion of business transactions that never occurred.
  • None of the BONY Mellon entities will ever receive the proceeds of a forced sale of property in this case.
  • None of the BONY Mellon entities have ever received the proceeds of forced sale of any property related to the subject “trust” or trust name.
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