How to Use the Business Records Exception to Hearsay Rule to Keep Out “Servicer” Records in Foreclosure Cases

Fundamentally you must understand that the investment banks want you and everyone else to look only at the payments history — not the debt, who owns it and whether anyone suffered a loss resulting from any lack of payment by the homeowner.
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Their strategy is to get the court to presume that in the absence of payments someone must have suffered a financial loss since the debt was clearly established in a transaction in which the homeowner received money and issued a note and mortgage. In the present securitization era that paradigm is wholly untrue but not obvious because the banks turned “lending” on its head. The homeowners took what they thought was a loan but the banks were not lenders and had no intention of becoming lenders.
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The problem is that most homeowners believe the myth promulgated by the banks because they don’t understand what really happened in what the banks call “securitization.”
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The truth is that nobody has suffered a financial loss from “nonpayment” by the homeowner.
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Everyone has already been paid as to the principal obligation.
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Collection efforts directed at the extinguished obligation are pure business strategy designed to increase already astonishing profits achieved through “Securitization” which like everything else is not in substance what the label conveys, to wit: the homeowner obligation was never sold to investors and therefore cannot be said to have been securitized. 
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One of my most prolific contributors points out how Fannie Mae uses a company who to this day incredibly remains out of the limelight despite being the only company whose division president, Lorraine Brown, went to jail for falsifying documents. It wasn’t really her fault. There were no transactions that fit the mold required to have an enforceable claim in foreclosure. But the banks wanted the money anyway. So they invented the appearance of transactions even though nothing had happened in the real world.

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It isn’t just Fannie Mae. Most homeowner transactions are established on LPSDesktop.

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The banks, in their never ending quest to send us down rabbit holes only present the “servicers” and their “business records”.

They do that to (a) avoid the hearsay rule because someone comes in without knowledge and says he has knowledge that these records were created in the ordinary course of business and they were created at or near the time of the transactions — which is only partially true and (b) to avoid the pesky problem of presenting details about the transaction that could show that the debt and the role of the creditor were extinguished in the process they’re calling “Securitization.”

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Practitioners would be wise to keep in mind two things:
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(1) the “servicers” are not servicers in the sense that anyone thinks of a servicer. They do process payments from homeowners but they do not process anything else. — The “servicer” records do NOT show where payments were forwarded, which would identify and confirm that the claimant or Plaintiff in foreclosure is in fact the owner of the debt.
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(2) the payment record from the “servicer” reflects only those payments received by that servicer (and perhaps an unaudited compilation of prior payments reported through LPS Desktop). The payment history might be admissible in evidence but only as to the record of payments, about which the practitioner should object for lack of foundation. — Without testimony or other evidence that (a) the debt was established as owned by a specific creditor anad (b) that the payment history is part of the records of the creditor, not just the servicer, the payment history should be excluded. 
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(3) A subpoena issued to Black Knight fka Lender processing Systems, aka LPS, demanding records relating to the subject debt, note or mortgage will be met with a barrage of objections, which if properly litigated will probably result in a favorable decision for the homeowner.
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(4) The object of litigation of foreclosure defenses is to show that the debt was removed from the chain. You accomplish this by relentlessly and aggressively pursuing the identity of the creditor. there isn’t one where any REMIC is involved.
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(5) Without a creditor there can be no delegated authority to enforce, collect or even administer the loan. “Authority” does not exist in a vacuum. there must be a source of authority. And the source of authority must be someone who legally owns rights to the debt over which he can delegate, as owner, the rights to enforce. 

see Black KnightÕ latest innovation: LoanSphere supports entire loan lifecycle – HousingWire

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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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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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Has any homeowner transaction ever been sold to investors? No? Then why are we accepting the bank myth that it was securitized?

Bob gives me a mortgage and I sign a note for $300k. Bob assigns the mortgage and note to Steve in exchange for “certificates / securities.” Bob retains the note and pledges to Jim in a collateral assignment to raise money to fund more loans. (i.e. WaMu and the Federal Home Loan Banks). I stop paying and soon Steve declares a default and tries to foreclose. My defense is that Steve doesn’t have the note, never took the note, and the note was collaterally assigned elsewhere before Steve filed the foreclosure action. If so, we can make that same defensive argument in every case it would seem.

No that is not a good defense. Your defense should be centered on who owns the debt. And only someone who has paid value for the debt can own it. If someone pays value in exchange for ownership of either the note or mortgage, then it is presumed that they own the debt — and it would be very hard to rebut that presumption.

So if someone pays money without getting or being entitled to a document that transfers the ownership of the debt from the current owner to the new owner, they have not acquired the debt.

Similarly, if someone has not paid value for the debt or note and they do get such a conveyance of ownership of the debt, even from one who is the owner of the debt, they too don’t own the debt. And a non-owner of the debt cannot issue any rights or instructions regarding the debt without deriving authority from an owner of the debt who paid for it.

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The transaction between Bob and Steve was a sale. Steve paid value unless the certificates or securities he used as payment were known to be worthless at the time of the sale. The fact that Bob retained possession of the note does not change the analysis. When Steve seeks to enforce the note he either has to get Bob to produce it or if he can’t, then he needs to plead a lost note. The transaction that you have used as an example does not convert the note to a security.

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Steve also has the option of suing Bob in the event that Bob is reluctant to turn out for possession of the note. but in all events Steve can show that he bought the note, which means that he bought the debt, and therefore is probably a holder in due course or at least a holder with rights to enforce as the owner of the debt.
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But the analysis does change if the example is changed slightly. If Bob was loaning you money because Steve was contemporaneously taking Bob out of the loan, then in substance the conduct of the parties shows that Steve was the actual lender and that Bob was simply an intermediary. This is the essence of a table funded loan which is against public policy as set forth in the Truth in Lending Act.
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So if Steve did not take possession of the note because Steve did not want to be accountable or liable for violations of lending laws as a lender, there is a case to be made that the nature of the transaction shifted. And if Steve gave Bob the money to lend to you because Steve was contemporaneously divesting himself from any risk of loss on the loan, then the argument would go one of two ways.
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Either the next person in the chain acquired ownership interest in the debt and note — or if Steve was merely selling derivatives whose value was indexed on the performance of your loan, then then the debt and note probably lost a creditor who could legally claim rights to enforce. As I see it, this would definitely be true if nobody in the chain was carrying the debt and note as an asset after Steve made his sale of derivatives.
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But I don’t think that under Securities analysis, the latter example would result in finding that the note had been converted to a security. It’s hard to see any analysis that would support that conclusion. If nobody was paying for legal ownership of the note then how would the note be converted?
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Of course that could be one possibility that would preserve the securitization infrastructure. And maybe if the courts catch the Wall Street banks with their hands in the cookie jar, the banks themselves might push that idea.
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Given the political climate that allows Wall Street to make up its own rules, that might happen, leaving both investors and homeowners out in the cold. That is why I’m starting to push Reformation as the better alternative which takes all stakeholders into account.

What is Real in “Securitization”?

The first thing to remember about securitization is that it isn’t real. No Investor ever bought any debt, note or mortgage on residential property. That makes all the documents used in foreclosure of “securitized” loans totally fake. And that is why there was a 50 state settlement and hundreds of other settlements with regulators, attorneys general and investors.

What was left out of all those settlements was any means by which illegal foreclosures could be stopped and any credits earned by homeowners or any credit which reduced the amount owed by the homeowners. As it turns out — nothing ever reduces the homeowner’s debt. Not even payment. Not even foreclosure. 

This could only be true if there was no account on any books of account in which the homeowner’s debt was held as  an asset. You cannot reduce what isn’t there. So failure to credit the nonexistent account is somehow treated as a completely legal event. think about it.

There is nothing wrong about hypothecating an asset in service of a financial transaction. As Wall Street has shown us anything could be an asset and therefore subject to a legal transaction. what they didn’t show us is that there was no legal transaction, which means nobody paid money except at the front end. And those who paid — the investors — didn’t buy any debt, note or mortgage.

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If I issue a note to someone who actually did give me money as a loan, and he asks me for collateral, I can conditionally assign my rights to a mortgage I actually own because someone issued me a note and secured it with a mortgage. How “conditional” is the assignment? That depends upon state law and the contents of the assignment.
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And in turn the Payee on the note I issued now has an asset upon which he can borrow. etc. The asset is the receivable from me that he has on his books which got there because he paid out money. So he debited CASH and Credited ACCOUNTS RECEIVABLE. Classic double entry bookkeeping.
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The ONLY question is whether the paperwork is a memorialization of actual events in the real world or if the paperwork is merely an attempt to create fake facts, an illusion that supports the designee of a non creditor to foreclose on property.
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If all the events are real then the law allows it and recognizes it and enforces it. But that enforceability under current law stops at the door of paperwork that does not memorialize an actual financial event in the real world.
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People think that it isn’t so simple. But it is. People say that there would be no foreclosures if I was right. But it is they who are wrong because they don’t understand legal procedure and the banks not only understand it, they were also responsible for writing it.
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So by codifying into law the proposition that the holder of a note is presumed to own the debt until rebutted, they have thus created a vehicle for deceit because judges are not presented with evidence in rebuttal. The truth is that the claimants are not even “holders”. And dig a little deeper they are not even possessors because the original note was destroyed.
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And because judges are sloppy people just like the rest of us, they will often treat a non creditor claiming to possess a note as a holder in due course — thus denying homeowner attempts at discovery. All without any allegation of HDC status or any evidence that the claimant is a party who paid value in good faith without knowledge of the borrower’s defenses.
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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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Please visit www.lendinglies.com for more information.

Why Reformation Makes Sense as a Response to Illegal Claims of Servicing, Collection or Enforcement of Homeowner Mortgage Obligations

In the world of pretend REMICs, there can be no debate that investors who buy “certificates” are unsecured creditors of the investment banks and that investment banks are not legally creditors of homeowners. So why are we allowing investment banks to administer, collect and enforce homeowner obligations?

This has been my point from the beginning in 2006 when I started writing and appearing on TV and Radio. The “Securitization” never happened. Investors became unsecured creditors of the investment bank (IB) not secured creditors of homeowners. In turn the investment bank also wanted to avoid accountability and liability as lender so the IB never accepted any legal document saying that it had paid for and it owned the underlying homeowner obligation.

But for purposes of enforcement through foreclosure the IB designates a non-creditor to initiate foreclosure proceedings. There is no basis in law for this behavior and it is both illegal and inequitable for this conduct to be allowed.

  • The claim that  the action is brought on behalf of  or for the benefit of investors who own certificates is false.
  • The implied assertion that whatever deficiencies exist in the presentation of parties and documents in foreclosures, the granting of a foreclosure will result in payment to a creditor who would otherwise have suffered a loss is also false.
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That leaves nobody to own the debt. Under current law, absent a contract that says otherwise, nobody can administer, collect or enforce a debt without owning it or representing someone who owns it. Since nobody owns it nobody satisfied that condition precedent as set forth in Article 9 §203 UCC.
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In the absence of a creditor the obligation can only be enforced by a designee or nominee that is accepted by the debtor.
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It will take a court decision to decree that since there is no alternative remedy at law, the homeowner is consenting to the designation of a party to enforce who then becomes the lender for purposes of accountability or liability under lending and servicing laws.

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There is no contract that says otherwise  unless and until a court declares it under the rules of reformation, quasi contract and quantum meruit.
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So in all homeowner transactions arising within the scope of claimed securitization, homeowners lost their access to any party who claimed to be a lender or creditor except the originator who was not lending any money and who was in most cases thinly capitalized such that penalties for lending and servicing violations would simply result in bankruptcy and no relief to homeowners. 

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And in the underwriting process, despite the obvious and expressly stated requirements of law no lender was left who had any stake or risk of loss in ensuring the validity of the appraisal or the viability of the loan.
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They might call it a loan transaction, but it wasn’t. It was deceitful process for obtaining the homeowner’s participation in a highly profitable securitization scheme. A scheme where the profits were neither disclosed as to existence or amount and that withheld consideration from the homeowner for his/her participation.
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As such the apparent “loan agreement” was simply a cover and a vehicle for concealment of the true nature of the transaction with the homeowner.
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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.

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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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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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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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.

*

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.

*

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.

The Best Article Yet on Illegal and Immoral Practices by Investment Banks Making False Claims About “Securitization of Debt” by Francesca Mari on Aaron Glantz Book “Homewreckers”

Francesca Mari in the JUNE 11, 2020 ISSUE of The New York Review of Books, has written a truly excellent piece on a book called “Homewreckers” by Aaron Glantz. 

If you ever had any doubt about whether homeowners have the moral high ground and whether the investment bankers have no moral or legal grounds for what they did, you should read the article and buy the book. ( I get nothing from sales of the book and I have not met either author — although I will contact them for interviews on my show).

The only point that I think both Mari and Glantz miss is that the loans were never securitized. Securitization is the process of selling assets in pieces to multiple investors. No residential loan to my knowledge has ever been sold to investors even on paper much less in reality.

Let me put it this way: there has never been a transaction in which investors buying certificates, investment banks or anyone else paid value in exchange for ownership of any debt, note or mortgage. They paid value but not for the loan. And they received the benefit of their bargain.

At the end of the day there is nobody who has paid value in exchange for a conveyance of ownership of the debt, note or mortgage. Claims of ownership of the debt, note or mortgage are all false even though they are documented. Documents are not transactions. They are evidence of transactions. And if there was no such transaction then the documents are false.

And that is why all of the documents in foreclosures are false, fabricated, forged, backdated and robosigned. The documents are false but they are presumptively valid if they conform to statutory requirements. The point missed by most homeowners, lawyers and judges is that just because they are presumed valid doesn’t mean they cannot be tested and rebutted.

Sham Affidavit Rule in Federal Courts Might Apply to State Court Actions in Foreclosure

A sham affidavit is one that asserts facts that are inconsistent with facts alleged in pleadings or previously proffered in discovery, prior affidavit or proffered documents. This happens a lot in foreclosure cases when foreclosure mills file motions for summary judgment. They often casually change the claimant by reference or name adding some power of attorney or other claim that is not attached or explained. The sham affidavit rule bars the affidavit in its entirety if it asserts facts or positions that are not consistent with prior assertions.
The sham affidavit rule can apply to attempts to contradict not only prior deposition testimony, but prior written discovery as well. We’ve blogged about the sham affidavit rule a number of times. Briefly, the rule is that:
[A] party cannot create a genuine issue of fact sufficient to survive summary judgment simply by contradicting his or her own previous sworn statement (by, say, filing a later affidavit that flatly contradicts that party’s earlier sworn deposition) without explaining the contradiction or attempting to resolve the disparity.
Cleveland v. Policy Management Systems Corp., 526 U.S. 795, 805-06 (1999) (string citation omitted). See also Perma Research & Development Co. v. Singer Co., 410 F.2d 572, 578 (2d Cir. 1969) (generally viewed as the seminal case on sham affidavits). https://www.lexology.com/library/detail.aspx?g=60c7a1e1-4d34-4916-9a12-f41ab8fc5bf6
If a sham affidavit is filed, it is therefore barred unless the affidavit itself refers to the prior assertions and explains the differences that appear in the current affidavit. This explanation is not something that anyone in the foreclosure mill or servicer can do since they don’t have access to any of the facts causing the issuance of a default letter or foreclosure in the first place. They are just following orders.

*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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In the meanwhile you can order any of the following:

*CLICK HERE TO ORDER TERA

*CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)

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*CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)

*

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.

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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*CLICK HERE TO ORDER CASE ANALYSIS

*CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)

*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.

How to Deal with Motion for Substitution of Plaintiff in Foreclosure Actions

The single basic tool of the investment banks, who are secretly running the whole foreclosure show, is musical chairs. By rotating the players they can successfully bar the courts and the litigants from knowing or pinning down who is real and what is real. All of that ends if you sue the investment bank.

Look at any foreclosure in which claims of securitization are known or suspected and you will find “rotation”.

In nonjudicial states it starts with “Substitution of Trustee” on the deed of trust which can be done without any motion.

Before or after that there is a change in the name of the servicer, which has perplexed judges since I first entered the picture in 2006.

Then there was a change in the credit bid after the foreclosure was complete or during the foreclosure sale where a new party mysteriously ended up “owning” the property.

And now we see with increasing frequency, the substitution of a new claimant or plaintiff during the foreclosure proceedings.

Motion for substitution of Plaintiff are becoming the rage simply because most state courts require a wrongful foreclosure action to be against the party who initiated the action. So the investment banks simply took their cue from that. They designate a new Plaintiff or a new claimant during the proceeding. Presto there is no wrongful foreclosure action. But there still may be the normal abuse of process claim.

Either way, they have no right to designate the first or the new Plaintiff or claimant. 


I would say that the likelihood of successful opposition to the motion for substitution of plaintiff is very low, as long as some explanation is offered. But this should trigger aggressive discovery where you go after the transaction by which the new plaintiff became the designee.

In a nutshell no such transaction exists because there was also no transaction by which the first Plaintiff became a creditor. It is all smoke and mirror. 


I am not saying that you shouldn’t oppose the motion for substitution of plaintiff. What I am saying is that the judge will regard it as merely a housekeeping chore until you raise the central issues of your defense narrative.

The moral of the story is that if you are going to sue for wrongful foreclosure you should be naming the investment bank that was calling the shots. Everyone else is a moving target with plausible deniability. That may not always be so easy to determine, but it isn’t impossible. We can help with that.

If you go after the investment bank you will be able to overcome the plausible deniability and technical requirements of claims based upon wrongful foreclosure. You can say that the action was brought by them using the name of a sham conduit. The change in “Plaintiff” therefore changes nothing.

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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*CLICK HERE TO ORDER TERA

*CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)

*CLICK HERE TO ORDER CASE ANALYSIS (not yet)

*CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)

*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.

About those tax statements you have seen or received on home “loans”

Answering your question requires tracing the convoluted strategy of the investment banks. 


Start with the proposition that each player is one of the separate business entities involved in the securities plan that claimed to “have” your loan in some manner, shape or form.

Next go to the fact that the creditor role was extinguished in the plan. That leaves the debt with nobody to pay (no creditor). Nobody has an asset on their balance sheet corresponding to your transaction that was originated as a “loan.” 


BUT you are making payments as directed by people whom you think are actually authorized to tell you where to make your payments. Those payments are sent to a company claiming to be a servicer. I’ll simply call them a receiver. So the receiver accepts the payments and then forwards money to someone (Investment Bank) who is the party from whom they accept instructions (although the instructions are actually received semi-anonymously from a third party intermediary). It’s like organized crime. The receiver keeps a portion of the payment as fees and turns over the balance. 


So the investment bank has received a payment from the receiver. It does not book the receipt of money from the servicer as interest income, return of principal or anything like that because the investment bank has no asset against which it could post such entries. So it posts it to a suspense account (with the label of the implied trust, which actually does not exist and therefore has no tax liability) that is neither income nor a reported asset, although it should be reporting the asset and an equal liability to pay it out if that was the case. This is simple double entry bookkeeping. But because of changes in GAAP that started in the 1960’s (See Unaccountable Accounting by Abraham Briloff) and were then accepted by both the Financial Accounting Standards Board and the SEC and therefore  by the IRS, these transactions are considered “off balance sheet” which is a fancy way of saying that they don’t actually report it even though it happened. 


Since there is no  bookkeeping entry as to income or expense there is no taxable event and nothing is reported to the IRS. And while payments are being made to investors (holders of certificates) by the investment bank (as “Master Servicer” on behalf of the implied “trust”) all of those payments are discretionary. 


And here is another place where it gets really complicated. Payments received from the servicer do account for most of the payments made to investors who bought certificates. But factually and legally those payments continue only as long as the investment bank wants to make them. The investment bank wants to make them only as long as it is selling certificates. (See Ponzi scheme). And in actuality the investment banks DO continue to make payments without regard to payments received from homeowners as long as they are keeping up the pretense that those payments are actually tied to the receipt of payments from “borrowers.” The goal is to sell more certificates. 


And in fact the structure of securitization in practice is such that if all homeowners stopped making payments, the investment banks would and do continue making payments — if they were still selling certificates. This actually happens where most of the loans were toxic assets. But in reality the investment banks could not continue to sell certificates if homeowners refused to pay. That would break the illusion of loan portfolios and it would be easy to see that the transactions with homeowners were not really loans because nobody ended up being a “lender” as defined under Federal and State lending laws. 


So what happens when a debt is discharged by bankruptcy? Answer nothing because nobody has it as an asset. It continues to get reported as if nothing had happened. the goal is maintain the pretense that the “loan portfolio” is operating and that “borrowers”. 
What happens when the trustee sale occurs? Answer nothing because nobody has it as an asset. It continues to get reported as if nothing had happened. the goal is maintain the pretense that the “loan portfolio” is operating and that “borrowers”. 


What happens when they sell the property using third party names? Answer nothing because nobody has it as an asset. It continues to get reported as if nothing had happened. the goal is maintain the pretense that the “loan portfolio” is operating and that “borrowers”. 

What happens with payments from homeowners that are reported as “interest” by the receiver/servicer? Answer nothing because nobody has it as an asset. It continues to get reported as if nothing had happened. the goal is maintain the pretense that the “loan portfolio” is operating and that “borrowers”. 


What happens with payments from homeowners that are reported as “principal” by the receiver/servicer? Answer nothing because nobody has it as an asset. It continues to get reported as if nothing had happened. the goal is maintain the pretense that the “loan portfolio” is operating and that “borrowers”. 


Having created a complex design that to most people is impenetrable the investment banks are now able to report anything they want for their own purposes. 


It doesn’t matter what the homeowner pays or doesn’t pay.
But they have algorithms to keep up appearances. Since those programs do not have access to any actual database, they create one what assumes, from the face value and terms of the origination loan documents, that you are paying and they send out a statement that says you paid interest on your loan. This provides the foot prints for tax evasion or avoidance. Having established nonexistent transactions as at least “reported” they can now write off the loan, take a loss and reduce their taxes. 


The interesting academic question that rises from all of this is that the whole thing is “tubular,” in my view. From the perspective the homeowner intended to make payments of interest when the homeowner was actually making payments on what the homeowner thought was a loan. It was certainly an obligation even if it wasn’t a loan, even if it might have been an unenforceable obligation for lack of consideration.

[More legal analysis: If it wasn’t a loan then the payment was in exchange for something from the homeowner — i.e., initiating and issuing instruments that started (or completed) the securitization process. If that was the consideration then was the consideration cancelled out by the homeowner/issuer’s required promise to make a payment that was more (with “interest”) than what the homeowner received?]


So from the homeowner’s perspective the payment was interest on an obligation and was not deductible unless it was an obligation arising from a homeowner “loan.” But from the investment bank’s perspective there is no interest, there is no principal. There is only cash flow to which they attach any label they want. It is my opinion that this is a major potential source of revenue for Federal and state governments who have income taxes. Because the investment banks are taking deductions without reporting the income. 


So all of this adds up to a very solid qui tam action under state and federal false claims act that cost governments money. The problem is political. Under direction from the executive branches, most dominated by politicians who have received vast amounts of money from investment banks who received vast amounts of money from investors and homeowners, so when qui tam actions are filed, the agency steps in and says “it’s ok, we were not defrauded. This is public policy to allow this.” End of Qui Tam. 

*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.*

FREE REVIEW:

If you want to submit your registration form click on the following link and give us as much information as you can. CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us.In the meanwhile you can order any of the following:

*CLICK HERE TO ORDER TERA

*CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)

*CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)

*FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT.  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

*CLICK HERE TO ORDER CASE ANALYSIS (not yet)

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

Could IRS Enforcement of REMICs Bring Wall Street Into Line? Yes but they won’t do it. Investors and homeowners continue to suffer as victims of fraud.

The most obvious places to look for correction in the illegal conspiracies masquerading as securitization of residential debt were the IRS , the SEC, the FDIC and the FTC and probably later the CFPB. Qui tam (whistleblower) actions were regularly dismissed because the agency that lost money due to false claims rejected the notion that it was a false claim or that anything bad had occurred. Sheila Bair lost her job as head of the FDIC for protesting policy set by Presidents Bush and Obama that failed to hold the line.

So here is a 2014 article that talks about how we could have regulated the investment banks through IRS examination of the REMICs.

Corruption is the answer. Too many people were making too much money and were “donating” too much money to people in public office. Enforcement was impossible. The real answer is extremely simple — stop all private money in elections. All elections should be publicly funded. No exceptions.

see.. PA Journal of Business Law – REMIC Tax Enforcement

The problem remains that US government agencies refuse to police schemes that are labelled as securitization of debt. If they are securitization of debt then market forces apply and everything COULD even out in the end. The problem is that the debt was never sold into a securitized scheme and nobody cares even though that has eliminated even the possibility of the existence of any creditor.

*
REMIC policing by the IRS would be ideal to reveal the fatal deficiencies and fraudulent character of these securitizations schemes. It is why the first 9 lawyers tasked with drafting the documents for securitization all quit with one declaring that she would not be party to or an accessory to a criminal enterprise. There is no entity that qualifies as REMIC in residential loans. AND the reason is very simple:  neither investors nor the trust is buying the loans.
*
So all the tests and premises about having an ownership interest, and about the quality of the loans are all false tests designed to cover up the fact that there has never been securitization of any residential loan except is very specific rare circumstances where individual mortgage brokers have sold loans to small groups of investors with repurchase agreements. In most instances those turned out to be scams.
*
The way they got away with it is that there was a securitization process — i.e., one in which new securities were issued, even if they were unregulated. But only those schooled in Wall Street finance grasp the fact that they were securitizing bets on data — something that is very ornate and complex.
*
Once you DO grasp the idea of what they really were doing and are still doing then you see why all the documents in all the foreclosures had to be fabricated, forged, backdated and robosigned. 
*

You can also see why they have robowitnesses come to court and why they show only the business records of a servicer who has no contact with the so-called principal named in the claim or lawsuit. You can see why there is never a proffer of the business records of a creditor because there is no creditor.

*

There cannot be contact between foreclosure mill and trustee of REMIC trust, there cannot be contact between “servicer” and Trustee of REMIC trust, there cannot be direct contact between investment bank and any of the players because any such contact would undermine the essential ingredient of the entire plan — plausible deniability of intent or knowledge of the scope of the illegal plan.

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The job of the litigator is to assume that that the entire thing is fraudulent and to ask for what they cannot give — answers to simple questions about the ownership and authority and status of the “obligation” that in reality is nothing more than a return of the consideration paid for a license to sue the homeowner’s private data and homeownership as mere points of reference for the issuance and trading of complex securities.
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But you must make it look like all of those companies are in actual contact and that payments from consumers or from the forced sale of their property are going to a creditor. You need to do that in order to give a judge cover for ruling in favor of the investment bank who is not even in the courtroom.
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The answer is as simple as simple can be: they are making everything up.
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Documents are not real unless they memorialize something that happened in the real world. But Wall Street banks put together a plan that made it appear that a sale of the debt occured where there had been no such sale. Or to be even more specific, they made it appear that there had been a purchase by or on behalf of the investors or trusts. Nothing could have been further from the truth. The truth is that investment bankers never looked at homeowner transactions as loans. They saw the money they paid to homeowners as a cost and condition precedent to creating and selling new securities. 
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Why no creditor? Because that is how you escape liability for lending law violations. 
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Why call it a loan? Because that is how you keep consumers from bargaining for their share of the very rich pie created by investment banks in the sale and trading of derivatives, insurance contracts, hedge products and just plain bets on fictitious “movement” of data that was completely controlled, in the sole discretion, of the investment banks. 
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They were printing money for themselves. The losers were and remain investors who buy “certificates” that are nothing more than a cover for underwriting the sale of securities for a company that doesn’t exist. the losers are the homeowners whose issuance of a note and mortgage triggers a vast undisclosed profit scheme in which the wealth of America shifted from the many to the few.

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BUYING RMBS CERTIFICATES IS LIKE BUYING TULIPS JUST BECAUSE THERE IS A MOB OF PEOPLE WHO FOR COMPLETELY IRRATIONAL AND TEMPORARY REASONS THINK THEY ARE VALUABLE.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT.  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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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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Three Card Monty: Why is Pandemic Relief Going to Servicers? Why are they not claiming relief for REMIC Trusts? Will homeowner debts be reduced by Federal payments to “Servicers?”

https://www.nytimes.com/2020/04/21/business/mortgage-investors-coronavirus.html?referringSource=articleShare

By failing to require a credit to homeowners when the Federal government makes payments on claimed obligations, the bailout is simply adding to profit of investment banks, servicers and foreclosure mills. They are eating their cake and having it too. Obligations are paid off but their claim against homeowners remains unchanged.

Sign Petition to Change the rules to Protect Homeowners from Fraudclosure.

Foreclosures are filed in the name of a named Trustee for a collection of words that is then treated as an entity. More specifically it is treated as a trust. Sometimes the foreclosure mill goes further and says it is filed for the holders of certificates.

  • If a “trust” is the claimant in a foreclosure, why isn’t it a claimant in a plea for relief due to nonpayments from homeowners?
  • If the holders of certificates are suffering economic loss from nonpayment by homeowners why are they not the direct recipients of Federal relief?
  • Who is really going to get Federal bailout money and will it cover a loss or will it be profit?
  • If the ultimate result is that obligations are being paid, why isn’t the homeowner getting notice of a corresponding reduction in the amount of payments claimed as due?
  • Who is the real party collecting money and why?

The answers are obvious. Wall Street is again playing fast and loose with its labels to suit its own ends. If investors fail to receive payments promised them by the investment banks they have only the rights set forth in their contract with an investment bank —- the “underwriter” that underwrote the offering of certificates that were false labelled as “mortgage backed” and again falsely labeled as “bonds.” But the underwriter was actually the issuer. So the entire proceeds of sale of certificates went to the investment bank instead of a “REMIC Trust.”

And that is why there is no trust getting a Federal bailout and there was no trust getting a Federal bailout in 2008-2009. No trust has any claim to any money. So why are they Plaintiffs in judicial foreclosures and beneficiaries in nonjudicial foreclosures? Because the Wall Street banks are inserting a jumble of words to escape liability for making false claims.

Investors have no right to receive the payments from homeowners. So the relief package proposed by Fannie and Freddie is designed to shore up the value and liquidity of holding unregulated securities (certificates) in a market that is wholly controlled by investment banks (not a free market) and completely dependent on continued sales of certificates that are neither worthy of the high ratings conferred upon them by rating agencies nor worthy of being insured (unless the insurance contract is a ruse backed up by the expectation of a Federal bailout, again).

Hidden beneath the waves of economic loss and relief packages is an essential truth about what Wall Street has most people believing was the securitization of loans. But the loans were never sold, much less divided into pieces that were sold off as securities. It was personal data that was securitized and then there were complex instruments indexed on that personal homeowner data that was securitized. None of it had anything to do with the sale of any loan nor the collection of any money from homeowners.

While the foreclosure judgment and a sale of property  results in money proceeds, as I have reported here, it never goes to any Trustee, trust, or even investor. The money is sent to companies that have claimed to be servicers although they never say they are servicing on behalf of owners of the loans. that’s because the loans were never sold.

Those self-proclaimed “servicers” are actually collecting money for the investment banks who have labelled themselves “Master Servicers.” The investment banks receive money from multiple sources — continued sales of “certificates” (falsely  dubbed mortgage backed bonds), homeowner payments, and most importantly trading profits on various derivative and hedge contracts.

The obligation of the investment bank to make any payment to any investor who paid for a certificate is limited to their agreement when they purchased the certificate from the investment bank.

That obligation is in large part discretionary — i.e., it is based upon the sole discretion of the investment bank as to whether money paid to investors can be recovered and is further restricted by a discretionary determination s to whether there have been “events” based on indexing to certain data that is called “loan data.”

The servicing companies mentioned in the article cited above have no obligation to make any payments to the investors. Their function is to distribute money to investors by access to funds made available by the investment bank. And the assumption that their thin capitalization puts them in danger of extinction is a misapprehension of the true facts.

“Servicers” have no obligation to make payments to investors. None. Investors will get paid as long as investment banks see a reason to pay them. And the investment banks will see a reason to pay them as long as they can sell more certificates.

The proof is in the pudding. After the payments are made, homeowners are never given notice that the money claimed as due from them has been reduced. The game is on — get money from homeowners, force the sale of their homes even though everyone is getting paid. 

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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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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The Problem With those Powers of Attorney

Just because a power of attorney appears to be facially valid doesn’t  mean that it IS facially valid, nor that it is substantively valid.

Sign Petition to Change the rules to Protect Homeowners from Fraudclosure.

Powers of Attorney are part of the strategy engineered by investment banks on Wall Street. Here is the problem with the POA or LPOA strategy.

In summary it is merely part of a larger strategy that seeks to create the illusion of real claims by real parties when in fact no such claim exists and no claimant exists. the claimant never gets the proceeds of foreclosure sale.

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The reason they do it is to insert an intermediary who can claim plausible deniability and that they were just following orders. It also serves the purpose of creating the illusion of a representative capacity between principal and agent.
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And that serves to create the illusion that the “principal” is somehow relevant to the transactional documents with the homeowner — although they never come right out and say that (because it is untrue).
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So the introduction of a Power of Attorney or Limited Power of Attorney is merely sleight of hand maneuvering to get a judge to believe that nobody would have gone to the trouble of creating and executing these documents unless there was something real going on. Unfortunately most lawyers, including those who represent homeowners in foreclosure, believe that to be true. As a result they completely miss the strategy that works in defeating such actions that are falsely labelled as foreclosures.
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Here is the truth.
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No POA ever gives anyone the right to claim ownership, control, administrative rights or the right to enforce any obligation of any homeowner. Instead it says it gives rights to speak for a label which may or may not be a legal entity — i.e., a “trust” which in fact is either nonexistent or “inchoate” under law.
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No trust, no matter how well written, creates a valid legal trust unless and until something of value is entrusted to the named trustee to hold for the benefit of defined beneficiaries upon certain terms expressly set forth in the trust. If the trustee does not own the alleged obligation, then the trust is irrelevant to any claim or proceeding.
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No named “trustee” has ever been party to a transaction in which the named trustee has ever received something of value from a seller or settlor who conveyed anything to the named trustee much less ownership of any obligation, note or mortgage from any homeowner.
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The existence of a note and mortgage is generally construed to be prima facie evidence of the existence of a loan agreement. But the absence of any “lender” conduct of the counterparties to those transactional documents demonstrates conclusively that there was no meeting of the minds. This leads to the counterintuitive conclusion that the investment banks wanted the transaction to look like a loan but but were completely unwilling to be considered “lenders” for purposes of compliance with lending statutes.
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The homeowner had every reasonable basis to think he/she was getting a loan — which means that there was a lender with a risk of loss and who therefore would not underwrite a transaction that was doomed to fail. Instead the real parties in interest, operating through dummy entities, were intentionally creating agreements that were extremely likely to fail. This enabled them to bet against the viability of those agreements. Therefore the less the quality of the appraisal, the loan terms, the household income etc., the more certain the investment bank could be of making money though failure of the DATA (not the debt) to perform. But since the investment banks and the homeowners had entirely different transactions in mind, there could be no meeting of the minds and there never was.
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None of the counterparties or their representatives ever considered themselves to be lenders. None of them ever purchased any obligation from a homeowner and registered such purchase as an asset receivable from a homeowner nor did they make an entry on the liability side of their balance sheet as a reserve for bad debt. Clearly nobody on the other side wanted to be liable as a lender for violations of lending statutes. None of them wanted to be “lenders.” Hence the transactional documents do not represent  meeting of the minds.
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Therefore, every such Power of Attorney grants nothing. It might be facially valid but it is not substantively valid because the purported grantor owned nothing and therefore could grant no powers over assets that were not owned.
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Note that I no longer refer to “loan documents.” Instead I refer to transactional documents. That is because I no longer believe that the transaction involving the homeowner should be referred to as a loan, even though that was what was intended by the homeowner. It wasn’t intended as a loan by anyone else who was directly or indirectly a counterparty to the transaction with the homeowner.
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In nearly all cases, the original transactional documents referred to the purchase of the homeowner’s consent and rights to resell personal data. The part of the transaction requiring payments from the homeowner was merely a vehicle for reducing the consideration paid for that consent. And the only place it is obliquely albeit not directly referenced as a loan is in actions that are falsely labelled as foreclosures. In all other transactions and documents the subject is clearly the sale and trading on data, not ownership of any debt owed by anyone.
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In a court of equity (i.e., foreclosure) the payment of consideration concurrent with an obligation to return that consideration should be treated as no consideration.
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Hence the apparent contract is rendered unenforceable for lack of consideration. This construction does not produce any financial loss to any party who paid consideration to the homeowner. All such parties are richly rewarded for procuring the signature of the homeowner far in excess of any claim for repayment of the consideration paid for the homeowner’s consent. This construction merely restricts the profits of the players in “securitization” to a level that is fair and proper after full disclosure.
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Further, in a court of equity, the payment of consideration for the consent of the homeowner to allow sale and resale of his personal  financial data should have been disclosed, was legally required to be disclosed and failure of which disclosure is a basis for the court to use its inherent authority to determine the amount of the compensation to be fairly paid to homeowners.
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That amount would be equal to what homeowners would have demanded in general and what investment banks would have offered as incentives in a free market with full disclosure.

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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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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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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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