The Solution to Defective Securitization of Mortgage Debt: The Bare Legal Truth About Securitization of Mortgage Debt

The basic truth is that current law cannot accommodate securitization of mortgage debt as it has been practiced. In short, what they (the investment banks) did was illegal. It could be reformed. But until the required legal steps are taken that address all stakeholders virtually all foreclosures ever conducted were at best problematic and at worst the product of a fraudulent scheme employing illegal tactics, false documents and false arguments of law and fact.

Without specifically saying so the courts have treated the situation as though the correction has already occurred. It hasn’t.

It is through no fault of the borrower that the investors put up money without acquiring the debt. That doesn’t mean they were not the ones who paid value for the debt. Therefore the only conceivable party, in equity, who should be able to enforce the mortgage is the investors but they cannot because they contractually barred from doing so. 

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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I think it is worth noting that securitization of loans was never completed in most scenarios. Value was paid by the Investors who, contrary to popular belief, never received ownership of the debt, note or mortgage.
  1. Cash flow was promised by the investment banker doing business as an alleged Trust, but the investors who were the recipients of that promise had no recourse to the mortgages (or the notes and underlying debts) and hence no recourse to enforce them.
  2. The alleged Trust never acquired the debt. Neither the trust nor any trustor or settlor ever entered into a transaction in which value was paid for the debt as required under Article 9 § 203 of the Uniform Commercial Code. It should be emphasized the this is not a guideline. It is statutory law in all U.S. jurisdictions. People get confused by court rulings in which ownership of the debt was presumed. Those decisions are not running contrary to Article 9 § 203 of the Uniform Commercial Code. To the contrary, those decisions seek to conform to that statutory requirement and the common law Doctrine that any reported transfer of the mortgage without transfer of ownership of the debt is a legal nullity. In short they avoid the issue by presuming compliance — contrary to the actual facts. 
  3. Under Article 3 of The Uniform Commercial Code it is possible that the trust acquired the note but under Article 9 of the Uniform Commercial Code the trust could not have acquired the mortgage, unless the transferor had sold the debt to the trust or the transferor was a party to the trust and had paid value for the debt. This is black-letter law.
  4. Endorsement of the note is of questionable legality since the endorser did not own the debt. In addition, the endorser had no legal right to claim a representative capacity for the investors who had paid value for the promise of the Investment Bank  (ie, they did not pay value for the debt). 
  5. I think that the only way an endorsement could be valid is if the endorser owned the debt or has legal authority to represent the owners of the debt who had paid value for the debt. I don’t believe that such a party exists.
  6. The only party who had barely legal title to the debt, the investment banker, had sold all or part of the cash flow from the mortgage loans for amounts in excess of the amount due on the debts. The remaining attributes of the debt or indirectly sold by financial instruments whose value was derived from the value of the derivative certificates issued in the name of the trust.
  7. There is no one party who has legal ownership of the debt and who has paid value for it. The brokerage of the note was merely a process of laundering title and rights to the debt to create the illusion that someone had both. The actual owner of the debt is a collection of legal entities that are not in privity with each other. That Gap was intentional and that is what enabled the Investment Bank to effectively sell the same loan an average of 12 times — for its own benefit.
  8. A Court of equity needs to allocate those sales proceeds. The implied contract with borrowers required disclosure of all compensation arising from the loan transaction. The implied contract with investors was the same. Both would have bargained for a piece of the pie that was generated by the investment bank. Neither one could do that because the large accrual of  heretofore impossible profits and compensation was both unknown and actively concealed from any reporting by investment banks.
  9. It is through no fault of the borrower that the investors put up money without acquiring the debt.
  10. The only way to bridge this problem is by somebody pleading Reformation or some other Equitable remedy in which the liability on the note or the liability on the debt is canceled.
    1. Anything less than that leaves the borrower with an additional prospective liability on either the debt or the note.
    2. But for the court to consider such a remedy in a court of equity it must restructure the relationship between the Investors and either the debt or the note and mortgage.
    3. And in turn it must then restructure the relationship between the party claiming a representative capacity to enforce the mortgage and the investors.
    4. In short, the investors must be declared to be the owner of the debt and the owner of the mortgage who has paid value for the debt.
    5. Only after a court order is entered to that effect may the investors then enforce the mortgage.
    6. The only way the Investors could enforce the mortgage would be if they were each named as the claimant and the investor(s) were receiving the proceeds of foreclosure sale to reduce or eliminate the debt.
    7. They could act through a collective entity, such as a trustee under a trust agreement in which the trustee was directly representing the investors. In that event the named trust in the Foreclosure action could be ratified and come into full legal existence as the legal claimant.
    8. Until then virtually all foreclosures naming a trust as claimant or naming “certificate holders” as unnamed claimants are fatally defective requiring dismissal with prejudice.
  11. However, this restructuring could interfere with the other derivative products sold on the basis of the performance of the certificates. The proceeds of such sales went to the Investment Bank and Affiliates who assisted in the selling of the additional derivative products.
  12. I repeat that none of this was caused by borrowers or investors or even known to be in existence.
  13. And the problem would not exist but for the persistence of the investment banks in maximizing Revenue at the expense and detriment of both investors and Borrowers.
  14. The problem with my solution is that much of the revenue collected by the investment Banks would accrue to the benefit of the investors.
  15. So the court would need to claw back a substantial amount of the revenue collected by the Investment Bank in each securitization scheme and then allocate the proceeds as to principal and interest on the underlying debt. Hence principal balances on the debt and the accrual of interest could be affected by the restructuring.

Rescission and Burden of Proof

There are winners and losers in every courtroom. When dealing with TILA Rescission under 15 USC §1635 you must go the extra mile in not merely showing the court why you should win, but also revealing that the opposition is not actually losing anything. The same logic applies to every foreclosure where securitization is either obvious or lurking in the background.

The bottom line is that no payment of value has ever been paid or retained as a financial interest in the debt by the named claimant nor anyone in privity with the named claimant. Once you can show the court the possibility or probability that the foreclosure is simply a ruse to generate revenue then it is easier for the court to side with you. Once you show the court that your opposition refuses to disclose simple basic questions about ownership of the debt then you have the upper hand. Use it or lose it.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Another analysis just completed for a client: The situation is that the homeowner sent a notice of rescission under the TILA REscission Statute 15 U.S.C. §1635 within days of having “consummated” the loan agreement. By statute that notice of rescission canceled the loan agreement and substituted in place of the loan agreement a statutory scheme for repayment of the debt which is NOT void. The notice of rescission only voids the written note and mortgage, it does not void the debt. The free house argument is pure myth.

The client goes on to ask how we can prove when the transactions occurred and who were the parties to those transactions and when they occurred. The answer is that you will never prove that. But you can raise an inference that the claimant is not the owner of the debt who has paid and retains value in the debt such that a successful foreclosure will not be used for restitution of an unpaid debt.

By undermining the presumptions arising from possession of facially valid and recorded documents you eliminate the ability of your opposition to use legal presumptions and thus require them to prove their case without those presumptions. The simple truth is that generally speaking they can never prove a case without legal presumptions. Once the presumptions are gone there is no case.

Here is my response:

It sounds like you are on solid ground. But as you probably know trial judges and even appellate judges and justices bend over backwards to either ignore or rule against the notice of rescission and its effect. For a long time, the bench has rebelled against the Truth in Lending Act generally. They rebelled against TILA rescission viscerally. Despite the unanimous SCOTUS decision in Jesinoski both the trial and lower appellate courts are unanimous in opposition to following the dictates of the statute and following the rule of law enunciated by SCOTUS.

You must be extremely aggressive and confrontative in standing your ground.
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As for the “free house”  argument the answer is simple. There is no free house. unless you are seeking to quiet title, which I think is an unproductive strategy if you not on solid ground with TILA Rescission. You are only seeking to eliminate the current people from attempting to enforce the mortgage, collect on the note or enforce the note. The last point might be your weakest point (without rescission). Enforcement of the note under Article 3 of The Uniform Commercial Code is much more liberal the enforcement of the security instrument under Article 9.
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It is actually possible that they could get a judgement on the note for monetary damages but not a judgment on the mortgage (without rescission in play). They can only get a judgment on the mortgage if the claimant has paid value for the debt. of course all of this should be irrelevant in view of the rescission which completely nullifies the note and mortgage.
Education of the court is extremely important. There is no free house in rescission. The obligation to repay remains the same. That obligation is not secured by the mortgage which has been rendered void nor is it payable pursuant to the terms of the promissory note which was also rendered void by the rescission. the obligation under contract (loan agreement)is simply replaced buy a statutory obligation to repay the debt.
They had ample opportunity to comply with the statute and get repaid. They didn’t. That is no fault of the homeowner.
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If they want repayment of the debt they might be able to still get it. If they produce a claimant who has paid value for the debt and had no notice of the rescission and who regarded your current claimants as unlawful intervenors, the same as you, then it is possible but the court might allow the actual owner of the debt to comply with the statute and seek repayment of the debt.
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At least that is what you will argue. You probably know that no such person exists. The ownership of the debt has been split from the party who paid value for it. So they probably don’t have anyone who qualifies.
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As for your last question about discovering the actual dates on which the debt was purchased pursuant to Article 9 § 203 of the Uniform Commercial Code, as a condition precedent to enforcement of the security instrument (mortgage or deed of trust), the answer is that neither the debt nor the note were ever purchased for value. The whole point is that they’re saying that these transactions occurred when in fact they did not.
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The only transaction that actually took place in which money exchanged hands is the one in which the certificates were sold to the investors. It might be successfully argued that the Investment Bank had paid the value for the debt so that is another possibility. If that argument succeeds then for a brief moment in time the Investment Bank was both the owner of the debt and the party who had paid value for it. But then it subsequently sold all attributes of the debt to the investors. the investors did not acquire any right title or interest directly in the subject debt, note or mortgage the only correct legal analysis would be that the Investment Bank retained bare naked title to the debt but had divested itself of any Financial interest in the debt. That divestiture generally occurred within 30 days from the date of funding the origination or acquisition of the loan.

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So if you are looking for the dates of transactions in which money exchanged hands in exchange for ownership of the note you are not going to find them. but strategically you want to engage in exactly that investigation as you have indicated. there’s no need to hire a private investigator who will never have access to the money Trail starting with the investors in the Investment Bank. So your investigation would be limited to aggressive discovery. Your goal in discovery is to reveal the fact that they refuse to answer basic questions about the identity of the party who currently owns the debt by reason of having paid for it as required by article 9 section 203 of the Uniform Commercial Code as adopted by state statute.

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This requires properly worded Discovery demands and aggressive efforts to compel Discovery, followed by motions for sanctions and probably a motion in limine.
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Since you have a notice of rescission within the 3-year time period, what you are actually revealing is that your opposition has no legal standing. Their claims to have legal standing are entirely dependent upon the loan agreement which has been cancelled by your notice of rescission. Unless they can now also state that they are the owners of the debt by reason of having paid for it, they are not a creditor or a lender. therefore they have no legal standing to challenge legal sufficiency of the notice of rescission nor any standing to seek collection on the debt. And they certainly have no legal standing to enforce the note and mortgage which have been rendered void according to 15 USC 1635.
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Their problem now is that their only claim now arises from the TILA rescission statute — and all such claims are barred by the statute of limitations on claims arising from the Truth in Lending Act. That time has long since expired.

*

It appears that no judge is going to like this argument even if it is completely logical and valid according to all generally accepted standards for legal analysis.

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So you’re going to have to address the elephant in the living room. The fact remains that if you are successful, as you should be, you will end up with a windfall gain. The judge knows that and denying it will only undermine your credibility. The Counterpoint is that if your opposition does not own the debt by virtue of having paid for it pursuant to the requirements of statute then their attempt at foreclosure is really an attempt to generate Revenue. If the Foreclosure is not going to provide money for restitution of an unpaid debt it can’t be anything else other than Revenue.
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In order to drill that point home you are going to need to argue, contrary to the judge’s bias, that not only is the current claimant not the owner of the debt by reason of having paid for it, but that the current claimant is not an authorized representative of any party who paid for the debt by reason of having paid for it and that the proceeds of foreclosure, if allowed, will never be used to pay down the debt. Again the only way you’re going to accomplish this is through very aggressive Discovery and motions.
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Don’t attempt to prove the dates of transactions, the data for which is within the sole care custody and control of your opposition, and can be easily manipulated, if you only focus only on the paperwork.
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Don’t accept that burden of proof. The only way your opposition has gotten this far is because of legal presumptions arising from that claimed possession of the original note. you need to research those legal presumptions. Generally speaking the legal presumption of fact must include the conclusion that the claimant is the owner of the debt by reason of having paid for it. Possession of the note is considered the same as title to the debt, The presumption arises therefore that possession of the note is ownership of the debt and the further presumption is that ownership of the debt is not likely to have been transferred without payment of value.

Legal presumptions are subject to rebuttal. the way to rebut the presumption is not by proving a particular fact but raising an inference that destroys the presumption. And the way to do that is by asking questions about payment to value for the debt (not just a note on mortgage) and pointing to the refusal of your opposition to give you an answer and to produce documents corroborating their answer.

After the appropriate motions, you will be able to legally require an inference that they are not the owner of the debt by reason of having paid for it and that they don’t represent anyone who does own the debt by reason of having paid for it. Once the presumption is rebutted, the burden of proof falls back onto your opposition. and because they violated the rules of discovery, your motion should demand that they be prohibited from introducing evidence to the contrary of your inference that they don’t own the debt by reason of having paid for it and they don’t represent anyone who owns the debt and who paid for it.

Jurisdictional Defense —- Certificate Holders vs Trust

Litigators often miss the point that the foreclosure is brought on behalf of certificate holders who have no right, title or interest in the debt, note or mortgage — and there is no assertion, allegation or exhibit that says otherwise.

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

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LACK OF SUBJECT MATTER JURISDICTION: the complaint attempts to state a cause of action on behalf of the certificate holders of an apparent trust, although the trust is not identified as to the jurisdiction in which it was created or the jurisdiction in which it operates.
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Even assuming that such a trust exists and that it issued certificates, there is no allegation or attachment of an exhibit demonstrating that the certificates contain a conveyance enabling the holder of the certificate to enforce the alleged debt, note or mortgage upon which the complaint relies. In fact, independent investigation shows the exact opposite.
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Nor is there any allegation that any money is due to the certificate holders or any allegation that the certificate holders possess the promissory note or have the right to enforce either the promissory note or the mortgage. Even if the indenture for the certificates were produced before this court, it would only show a contract for payment from a party other than the homeowner in this action. Accordingly, no justiciable controversy has been presented to the court. In the absence of an amendment curing the above defects, the complaint must be dismissed for lack of subject matter jurisdiction.
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STANDING:
  1. As to Bank of New York Mellon there is no allegation or attachment to the complaint that alleges or demonstrates an agency relationship between Bank of New York Mellon and the certificate holders, on whose behalf the complaint is allegedly filed. If Bank of New York Mellon is the trustee of an existing trust and the trust is alleged to own the debt note and mortgage along with the rights to enforce, then the agency or representative capacity of Bank of New York Mellon is with the trust, and not with the certificate holders. Based upon the allegations of the complaint and independent research defendant asserts that there is no representative capacity between Bank of New York Mellon and the certificate holders.
  2. As to the alleged trust which has not been properly identified there is no allegation that the action is brought on behalf of the trust; but the implied allegation is that the trust is the plaintiff. The complaint states that the action is brought on behalf of the certificate holders who merely hold securities or instruments apparently issued in the name of the alleged trust. There is no allegation or exhibit attached to the complaint that would support any implication that Bank of New York Mellon possesses a power of attorney for the certificate holders or the trust. In fact, in litigation between Bank of New York Mellon and investors who have purchased such certificates, Bank of New York Mellon has denied any duty owed to the certificate holders.
  3. As to the certificate holders, there is no allegation or exhibit demonstrating that the certificate holders have any right, title or interest to the debt, note or mortgage nor any right to enforce the debt, note or mortgage. Based upon independent research, the certificate holders do not possess any right, title or interest to the debt, note or mortgage nor any right to enforce. In fact, in Tax Court litigation the certificate holders are deemed to be holding an unsecured obligation, to wit: a promise to pay issued in the name of a trust which may simply be the fictitious name of an investment bank. There is no contractual relationship between the defendant and the certificate holders. Further, no such relationship has been alleged or implied by the complaint or anything contained in the attachments to the complaint.
  4. As to the certificate holders, they are neither named nor identified. Yet the complaint states that the lawsuit is based upon a claim for restitution to the certificate holders. The reference to the trust may be identification of the certificates but not the certificate holders. In fact, based upon independent investigation, the holders of such certificates never received any payments from the borrower nor from any servicer who collected payments from the borrower nor from the proceeds of any foreclosure. In the case at bar. the complaint is framed to obscure the fact that the forced sale of the property will not be used to satisfy the debt, note or mortgage in whole or in part.
  5. As to any of the parties listed in the complaint as being a plaintiff or part of the plaintiff there is no allegation or exhibit demonstrating that any of them paid value for the debt, or received a conveyance of an interest in the debt, note or mortgage from a party who has paid value for the debt as required by article 9 § 203 of the Uniform Commercial Code as adopted by state law, which states that a condition precedent to the enforcement of a mortgage is the payment of value for the debt. Hence regardless of who is identified as being the actual plaintiff none of the parties listed can demonstrate financial injury arising from nonpayment or any other act by the defendant.
  6. In the absence of any amendment to cure the above defects, the entire complaint and exhibits must be dismissed with prejudice for lack of subject matter jurisdiction and lack of a plaintiff who has legal standing to bring a claim against the defendant.
The only thing I would add to the existing second affirmative defense is the affirmative statement that based upon independent investigation, such signatures were neither authorized nor proper, to wit: they consist of forgeries or the product of robosigned in which the signature of a person is affixed without knowledge of the contents of the instrument to which it is affixed.
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In my opinion, the specificity that I have employed in the above comments not only provides a basis for dismissal, but also the foundation to support Discovery requests that might otherwise be denied, to wit: who, if anyone, ever paid money for the debt?

Keep the Envelopes! Attention Forensic Auditors! How to Show They Are Lying About Everything

The devil is in the details and it is in the details that actions don’t add up if one party is faking their status. 

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

Hat tip to Summer Chic

I have long described the practice of sending out correspondence and notices from, say for example PennyMac, from an address that has never been PennyMac. Summer Chic discovered with some snooping that the letter she received from “PennyMac” was sent from a Bank of America location. Bank of America claims no connection with PennyMac. In many such scenarios Bank of America claims no connection with the loan.

Of course that might very well be true. Because in the securitization game the real records are kept at the investment bank (who at least WAS the real party in interest when the loan was originated or acquired)  and a central repository from which documents, notices and other instruments are created, signed, sent and filed. In most cases this central repository is Black Knight, which is the new name of Lender Processing Systems, (LPS) who had a subsidiary or division called DOCX.

This is why the claims of a “Boarding process” are pure fiction, because the records are always kept in the same place and never move.

DOCX you might remember is the place where most of not all document fabrications took place including signatures that were forged or robosigned. Fabrication as you know means that they were creating documents that did not previously exist. Those documents did not exist for only one reason, to wit: there was no transaction  to document so the document was never prepared until it was necessary to fake it for the purposes of foreclosures.

Incredibly Black Knight is now used as a trusted source of information about mortgages and foreclosures despite being the central entity (operating through third party contractors) from which false documents are created and used in foreclosures.

It was necessary to fake it because under the law, it isn’t enough to allege or assert that a borrower failed to pay. Failure to pay is only a breach as to the owner of the debt who is entitled to receive the payment because he/she/it paid money for the debt and the rights to enforce. But no such payment ever occurred. If there is no rebach there is no claim.

So in order to cover-up the illusions created by fabrications of documents, it was necessary to fake the sending, filing and serving of process of documents. While this was accomplished in some corrupt courts (one right here in Florida), ordinarily it was accomplished by sending the notices not from the central repository, Black Knight, which would make it obvious that it was all coming from one place, but from different locations around the country — hundreds of them.

So in our example, PennyMac agrees to let Black Knight use its name for notices, and Bank of America agrees to have the notice sent from one of its thousands of locations. In reality the notice came from Black Knight and neither PennyMac nor Bank of America know what is contained in the notice, nor do they care.

In court, as I have repeatedly said, it is unwise to try and allege and prove all of that, because you will never get access to the real records of Black Knight, Pennymac or Bank of America. If you could you would would have one big class action lawsuit against all three of those entities. It is well hidden under agreements that might never see the light of day.

BUT, you can use discovery and cross examination to gradually educate a reluctant judge so that he/she gets increasingly uncomfortable with what they are hearing. By using discovery effectively you could even bar the introduction of certain evidence and legal presumptions because you never received an acceptable response to your requests for discovery.

The questions are quite simple: using the envelope as evidence (after proper foundation testimony or as a exhibit for ID to be later admitted into evidence) you elicit the fact that either the entity does not maintain any address at that location and never did or that the witness doesn’t know and that the employer refuses to answer.

You are asking the question “Who sent this notice?” knowing full well it wasn’t the witness or his employer or anyone else in the chain of title. If the witness slips and answers truthfully (which happens occasionally) that it was Black Knight then you’re off to the races with questions about what Black Knight is doing sending out notices on a loan with which they supposedly have no connection and on whose behalf the notices were actually sent.

How to Use Forensic Auditors During Discovery

Discovery is a process that can be used in litigation. That means you have to be in court. Discovery is the process of asking for information that don’t already have or information that will corroborate information that you do already have. Almost by definition it is a fishing expedition. But the days in which you can throw out a wide net are over. Neither federal nor state judges will permit discovery unless it is specific, and relates directly to the functional narratives of the case proffered by both sides of the lawsuit.

Good forensic examiners are required to frame proper requests for discovery and to focus the narrative that will support those requests for discovery. Failure to do so will most likely result in either no answer from the opposition, or a slew of meaningless objections. The next step, a motion to compel, will only be successful if you can succinctly state why you are requesting this information and how it specifically relates to the defense narrative or the prima facie case of the party seeking foreclosure.

Unless you are successful in obtaining an order granting your motion to compel, any subsequent motion for sanctions or motion in limine will be summarily denied and your opposition will be able to introduce evidence that they refused to give you during discovery.

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

In every case in which you seek discovery against the foreclosing party, that party is seeking to conceal its weaknesses. They will raise objections, whether supportable or not. You should work with an attorney who is familiar with trial practice and a forensic auditor or examiner who can help you pass the following tests. An affidavit from a forensic auditor detailing why you need this information will go a long way toward supporting your argument in favor of an order compelling your opposition to give adequate responses to your request for discovery.

see The Tests You Need to Meet in Order to Get Discovery

If the data in question passes these two tests (yes, it’s relevant to the case, and no, it’s not privileged information) then the courts look at the following six factors laid out in FRCP Rule 26(b)(1) to help determine rulings on proportionality.

  • The importance of the issues at stake

  • The amount of information in controversy

  • The parties’ access to the information in question

  • The parties’ resources to obtain the information

  • The importance of the discovery in resolving the issues

  • Whether the burden or expense of the proposed discovery outweighs its likely benefit

How to Use Reports and Affidavits in Foreclosure Litigation: Required Reading for Forensic Audit Seminar Next Friday

Reports and affidavits are helpful but not always useful as evidence. It seems that many people think an affidavit from me will be the magic bullet in their case. It could be but only with proper presentation and following the rules of civil procedure and the laws of evidence.

This is required reading for people attending the forensic audit seminar next Friday. In the end I am seeking your reports to conform to the style and content of what I present at the seminar, in this article and other articles appearing on this blog. The end result for homeowner and their attorneys is to file reports and affidavits that are not only admitted into evidence but also given great weight by the trier of fact.

In plain language I would like to outsource the preparation of the forensic reports on the facts and limit my involvement to what I do best: present the facts with opinion corroborated by those facts. That means learning which facts are likely to give the homeowner’s lawyer some traction and which facts are just surplus accusations that can never be proven in a foreclosure case.

Because in a foreclosure case, the issue is not whether the players are bad players, evil or even thieves. The issue is whether the players can successfully present a case in which it appears that they have satisfied the conditions precedent and the elements of a prima facie case for enforcement of the mortgage through foreclosure.

The answer to that is either yes or no. And walking into any courtroom the presumption, at the very beginning, is that the answer is yes. Our job is turn that around and persuade through logic and facts that the presumption of the existence of the elements for a prima facie case for foreclosure are missing. And while out burden of proof is only a predominance of the evidence, in practice, for homeowners, that translates as something more than “more likely than not.” Where the answer is close, the court will always lean toward the party seeking foreclosure.

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

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An affidavit is a sworn statement. It is not evidence unless a judge admits it as evidence. And it get no weight as evidence unless the trier of fact (the judge in most foreclosure cases) decides to give it weight. The judge won’t allow it or give it weight if it is merely opinions that are not persuasively presented by reference to specific facts or absence of facts. So while my affidavit may be helpful, it is not the opinion that counts nearly as much as the credibility and persuasiveness of the affidavit or report. There is also confusion as to how and when to use forensic reports or affidavits from me. So let me put it this way.

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In what I call the case analysis, we ordinarily perform vigorous investigation and analysis and then sum up what we have found in the context of what we think might be the best issues on which you could get traction in court.
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Sometimes we render an opinion and conclusions based upon a forensic report done by others, which we prefer to do. We then issue a report that can be formatted into the form of an affidavit. The issue being addressed in this article is for forensic examiners, homeowners and their lawyers.  An affidavit is frequently requested from me under the mistaken belief that possession of such an affidavit will be crushing blow to the lawyers seeking to enforce the mortgage or deed of trust on behalf of a party who does not ordinarily qualify as a claimant.
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The simple truth is that the affidavit, no matter how strong or how great does nothing by itself. The issue is how and when the affidavit is used and under what circumstances — e.g. will the homeowner seek to have it introduced as fact or opinion. And will my testimony be used to pride adequate foundation for the affidavit to be introduced as evidence in a court proceeding.
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So frequently the affidavit homeowners are seeking is “limited scope.” That code for “on the cheap.” I don’t issue reports or affidavits that I don’t think I can defend easily in court under cross examination.  But even if the scope is limited to one question, to wit: in my opinion is US bank a real party in interest, as you know I have already answered that in the articles I have published, although such articles are not necessarily applicable to any one specific case. The answer was “NO.”
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And you say you want that answer in affidavit form. This is where consultation with local counsel is critical. There are several different ways the affidavit can be phrased and I have some doubts as to whether the answer, in the form of an affidavit, is going to help you. If you don’t know how and when to use the affidavit it won’t do you any good.
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But I concede that it might do some good inasmuch as sometimes the affidavit is accepted in court in connection with a motion for summary judgment. In all other circumstances the affidavit is not admitted into evidence unless I am retained to appear in court or at deposition in lieu of live testimony in which I give live testimony providing the foundation for the admission of the affidavit into evidence.
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The admission of opinion evidence is restricted based upon the court’s acceptance of my credentials, experience, education, training etc. To date no court in any state has rejected me as an expert who could give an opinion on the securitization of residential debt.
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But in all cases where my affidavit or testimony was accepted it wasn’t the opinion that was given weight, it was my report on the facts, revealing an absence of necessary elements to the claim for enforcement of the debt, note or mortgage.
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Opinion evidence is not admissible without a court approval or order. If it is opposed there is a hearing on whether to allow opinion evidence and if so whether it will be allowed from me.
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So an affidavit that for a lay person or their lawyer could be helpful to shore up confidence in the attorney’s presentation of the defense, but not much more. It would look something like this.
Based upon the chain of title revealed in the forensic report and my examination of the actual documents recorded, together with my education, knowledge, my proprietary database, and my experience in the securitization of businesses and assets including debt, it is my firm opinion that US Bank never purchased the debt of the homeowner nor did US Bank ever receive ownership of the debt from any person who had paid value for the debt. 

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Third party claims of possession of the homeowner’s promissory note are attenuated in terms of credibility and lack foundation as to whether such possession by third parties would be possession by US Bank. But such claims are nevertheless taken as true for purposes of this opinion.
 
Based upon Article 9 §203 of the Uniform Commercial Code (UCC) there are two deficiencies in the claim of U.S. Bank to enforce the security instrument (mortgage), to wit: 
a) it does not and never has complied with the condition precedent in the UCC that it paid value and therefore has a direct financial stake in the come of a forced sale through foreclosure (i.e., the sale will not produce money proceeds that are paid to US Bank either in a representative capacity nor on its own behalf and
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b) US Bank does not possess any claim for restitution because it has suffered no loss. Nor is US Bank expecting the receipt of any funds regardless of whether or not the homeowner makes a payment. While foreclosures have been concluded in the name used as claimant in this case, the proceeds of sale of foreclosed property has never been received or deposited by US Bank or on behalf of U.S. Bank.
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The claim to enforce the mortgage like all civil claims must present a legal person that is possessed of a claim for restitution of a legal debt owed to the claimant based upon a duty of the opposing party owed to the claimant that was breached by the opposing party that produced real legally recognized injury to the claimant.
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Failure to own the debt is therefore failure to present a legally recognizable claim to enforce the security instrument. Such failure is generally regarded in case decisions to be construed as a lack of jurisdiction by the trial court to consider any controversy where the real parties in interest are not present in person or by proxy.
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In this case, neither of these conditions is met. The implied trust (and/or US bank as “trustee”), if it/they has any legal existence, has never entered into any financial transaction in which the debt was sold for value or transferred by a person who had paid value. This eliminates compliance with the UCC condition precedent to enforcement and eliminates judicial standing for US Bank to even bring a claim inasmuch as it lacks a legally recognized claim for anything against the homeowner in the case at bar. 

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The affiant concedes that there is confusion in case decisions on this subject in which possession of the original note gives rise to the presumption of a right to enforce it. While it is doubtful that US Bank ever acquired possession of the original note much less rights to enforce the note, even assuming those conditions were met, that would only raise a presumption of title to the debt and the right to enforce it. But that presumption is factually and completely rebutted by the absence of any claim, transaction or instrument indicating that on any certain day the debt was sold to US Bank.
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In fact, my specific knowledge regarding the securitization of debt is that an investment bank (brokerage firm) funded the origination or acquisition of the debt and retained ownership of the debt for usually less than 30 days. Hence no transaction in which the debt was sold could have taken place without the participation of the investment bank who advanced the funds. No such transaction ever occurred between the investment bank and US Bank.

Hence the subject debt was never sold or entrusted to US Bank. Hence possession of the note, at most, entitles the possessor to enforce the note, albeit not as a holder in due course since no value was paid. Such enforcement would be under Article 3 of the UCC and not under Article 9 relating to enforcement of secured transactions. 
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My conclusion is that none of the parties named in connection with the claim against the homeowner have legal standing nor have any of them satisfied the condition precedent to enforcement of the mortgage through foreclosure.

In answer to the specific question posed by the homeowner’s attorney as to the status of US Bank in connection with this loan agreement, US Bank is not a real party in interest with any actual financial stake or risk of loss relating to the loan agreement nor was its purpose ever to serve as an actual trustee for a legal trustee of an actual trust that had any actual financial stake or risk of loss relating to the subject loan agreement.

Although certificates were sold in the name of the trust by the investment bank and other derivative contracts were sold based upon the value of the certificates, none of those contracts transfers any right, title or financial interest, nor any right to enforce, the subject debt, note and mortgage.

Hence any representations that US Bank is serving as authorized representative or trustee on behalf of the holders of such certificates or contracts is not relevant, since none of them have the right to enforce nor any ownership of the debt, even if they did receive the risk of  loss associated with the actual debt. 

So here is where local counsel comes into the picture. Depending upon how he or she wants to present your defense, is the above what they want, or do they want something more, less or different? Are you getting involved in pleading, discovery, preparation for a hearing or trial?

Because my credentials give me credibility and status, and because I would rather review forensic reports than prepare them, I am giving the free forensic law seminar on August 2 which is sold out. It is my hope that the business plans of forensic examiners will be enhanced by associations with established experts like myself in which affidavits are filed not by the examiners whose credentials nearly always in doubt but rather under the signature of someone whose credentials are not in doubt.

Just to be clear, MERS is absolutely nothing.

For some reason I have been getting more questions about MERS lately. My analogy has always been that MERS is like a holograph of an empty paper bag. So here are some basic factors for the checklist and analysis:

  1. MERS never signed any contract with any borrower.
  2. MERS never has any contractual or other legal relationship with investors (certificate holders) or Government Sponsored Entities (GSEs) like Fannie, Freddie or Sallie.
  3. MERS never signed any agreement or contract with most named “lenders.”
  4. MERS never signed any agreement or contract with respect to any specific loan transaction or acquisition.
  5. MERS was never the Payee on any note from a borrower.
  6. MERS never loaned any money in any residential loan transaction.
  7. MERS never paid any money for the acquisition of any residential loan agreement, debt, note or mortgage.
  8. MERS never handled any money arising from the origination of the loan.
  9. MERS never handled any money raising from administration of the loan.
  10. MERS never received a loan payment.
  11. MERS never disbursed any money to any creditor of a debt created by a loan.
  12. MERS does not conduct meeting of its board of directors to authorize any officer to sign any document.
  13. MERS never asserts warrants that the information maintained on its platform is true, correct or even secure from manipulation.
  14. MERS’ members can enter the system to insert any data  they want to insert, delete, or change.
  15. MERS never claims any right, title or interest in any debt, note or mortgage. In fact, its website disclaims such an interest.
  16. MERS never maintains any agency relationship with any actual lenders.
  17. MERS never retains any agency relationship with any named lenders who are creditors after the loan is consummated.
  18. MERS has no successors.
  19. MERS never has power on its own to assign any right, title or interest to any debt, note or mortgage.
  20. MERS never has power as an agent to assign any right, title or interest  to any debt, note or mortgage except for a principal who does have a right, title or interest to whatever is assigned.
  21. MERS never warrants that it has any agency relationship or power of attorney on behalf of any party whom it warrants is its principal and who owns the right, title or interest to any debt, note  or mortgage.
  22. MERS never has any legal relationship or retainer with any lawyer seeking to enforce the note or mortgage in any transaction or court proceeding.
  23. MERS never has any legal relationship or agreement with any company asserted to be an administrator or servicer of a residential loan.
  24. MERS never has any legal relationship or agreement with any trustee of any REMIC trust.
  25. MERS has been sanctioned, banned and fined in many states along with the parties who claim rights through the use of MERS. Despite that MERS has never changed its practices or procedures.
  26. Any document of transfer of rights to a security instrument that shows a signature of a person who is identified as an officer or employee of MERS is a false document, with a false signature containing one or more false utterances.
  27. MERS is always a naked nominee possessed with no powers, rights or obligations and possessed with no rights, title or interests in any loans originated or acquired by third parties; however the courts have held that if a new party had paid for the debt, then it may instruct MERS to execute an assignment even if the original principal no longer exists.
  28. MERS is never party to any part of any loan transaction or loan acquisition in which consideration is paid.
  29. MERS is always a diversion from the true facts. In 2008 16 banks took my deposition for 5 1/2 days straight regarding the status of MERS. I said then and I say now that the use of MERS is less meaningful than using the name of a fictional character like Donald Duck.
  30. Despite thousands of attacks on me and my work over 12 years, not one memo, treatise or article has ever been published that said otherwise.
  31. No expert opinion has ever been given by affidavit or in live testimony to the contrary.
  32. In fact, not even a blog article or fake news article has ever said MERS is either a legitimate alternative to tracing title through county recording or a legitimate beneficiary under a deed of trust or a legitimate mortgagee under a mortgage. 
  33. The asserted presence of MERS on any document or pleading or notice always means that the lawyers, servicers and other third parties are seeking to conceal material facts from the borrower and from the courts.

How do I Use Article 9 §203 UCC Requiring Value Be Paid for Debt?

Many of you have essentially asked the same question referring to Article 9 §203 UCC as adopted by the laws of your state. There is no known cause of action for breach of that statute although one might be conjured. It is an interesting suggestion.
My reference to it is simple: the statute says that a condition precedent to enforcement of the security instrument (mortgage or deed of trust) is that the party seeking to enforce must have paid value for the security instrument. Translating that, it automatically means that if someone paid for it then they paid for the debt. BUT all law in all states says that if the “seller” or transferor does  not own the debt then the transfer of the mortgage is a nullity.
A condition precedent means you can’t do one thing without first doing the other. We are a nation of laws and personal bias about this is irrelevant.
GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

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What many lawyers continue to miss is that there is a difference between the laws entitling someone to enforce a note and the laws entitling someone to enforce a mortgage. There are different public policies behind each one. For Notes, the public policy is to encourage the free flow of negotiable instruments in the marketplace. For mortgages, the public policy is to make sure that the civil equivalent of the death penalty (loss of home) is not imposed by someone who actually has no interest in the debt.
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It is an added protection. As a condition precedent it means that standing to enforce the note is different from standing to enforce the mortgage. It is both factual and jurisdictional.
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The grey area occurs because many states adopt the doctrine that if someone has the right to enforce the note they automatically have the right to enforce the mortgage. Although that seems to contradict the Article 9 §203 provision it actually doesn’t. That is because possession of the note by a person who is entitled to enforce it raises the legal presumption that the value was paid by the person on whose behalf the note and mortgage are enforced.
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This is a fuzzy area of the law. But boiled down to its simplest components, it means that possession of the note is deemed (presumed) to be possession of legal title to the debt which, as we know from Article 9 §203 can only be true if the person has value invested in the deal.
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The point of that policy is that if the forced sale of the house is not going to produce proceeds that will be used to pay down the debt, then the foreclosure should not occur. If the person on whose behalf the foreclosure is brought is not the owner of the actual debt then without evidence from the lawyers representing the party named as Plaintiff or Beneficiary, there is no evidence that the proceeds will go towards paying down the debt and the court is required, with no discretion, to enter judgment for the homeowner.
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So the question comes down to whether the party claiming both possession and entitlement to enforce the note is the owner of the debt. The answer is yes if the homeowner does nothing. This presumption can be rebutted. A simple question as to whether the value was paid and if so, how many times, and demanding the dates and parties involved, would clear up the question if the banks had a factual answer. They don’t. They present a legal argument instead. As virtually all lawyers know, their job is to win however they can do it. So if they can’t dazzle the court with facts they can baffle the courts with bullshit.
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Carefully educating the judge who most probably slept through the UCC classes in law school is key to winning on this basis but it has been done many times. All jurisdictions have case decisions that reflect what I have described above. You must find those decisions and present them as part of your pleadings, memoranda and argument in court. 

Payment History as Exception to Hearsay Rule

A recent decision from the 1st Circuit of the U.S. Court of Appeals applying FRE 803(6) states the current law — whether you like it or not. Pretending these decisions don’t exist or trying to avoid them is both pointless and highly likely to undermine your credibility in any other narrative or argument. Note that SCOTUS Justice Souter not only sat in on this review but wrote the opinion.

Simply stated the transaction history will be admitted into evidence every time — UNLESS the borrower disputes their content and demands a hearing on truthfulness of the foundation testimony in which the magic words are spoken, as set forth in the Federal Rule and virtually all state court rules.

That means that unless you have done the right research, the right investigation and the right discovery you will have no admissible evidence with which to dispel the notion that the transaction history is anything more than an independent reliable summary of events that is admissible as proof of the truth of the transactions that occurred, and which did not occur with respect to the borrower.

see 18-1719P-01A U.S. Bank Trust v Jones, No. 18-1719

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

The lawyers for the servicer are pretending to be the lawyers for US Bank who knows nothing about the foreclosure and doesn’t care as long as it receives its monthly check in exchange for the license it granted for use of its name to make it seem like this is an institutional foreclosure.

Those lawyers are going to throw this case at you when you challenge the payment history on grounds of hearsay or foundation. Tactically that is what you want them to do because then you can quote from the same case as follows:

the business records of loan servicers may not always carry the requisite indicia of reliability. See, e.g., Brief for National Consumer Law Center and Jerome N. Frank Legal Services Organization as Amici Curiae 12-18. It therefore bears repeating: the admission of integrated business records in this context must turn, as it does here, on the particular facts of each case.

So if you have been reading or listening to my work then you know that I have been saying categorically that if you are able to persuade the judge that your case stands alone or is unique in some respect and NOT try to make blanket accusations about industry practices in general as the focus of your claim, then you are much more likely to obtain a favorable result.

Souter emphasizes that this is a case by case decision and admits that servicer records might be neither truthful nor trustworthy. But that is not enough to bar them from evidence. Your defense can’t be equal to “we don’t dispute what is in those records but we dispute whether those records qualify as an exemption.” You have just slammed the door in your own face.

If you are admitting even tacitly that the debt exists, that you have not paid it, and that there is a loss attributable to your failure to make a payment, you have lost the case. If you admit that the record is accurate, even tacitly by not contesting anything within it, that record is coming into evidence.

The Judge will always find a way. And to be perfectly fair, the judge should  find a way to make justice happen. If you owe the money and the party claiming the money or the foreclosure does so in an effort to pay down the actual debt, they should win and you should lose.

There is no law that says that technical deficiencies should preclude an otherwise valid claim. Sounds like I am arguing for the bank, right?

The rejoinder is that through research and discovery and investigation you have uncovered the following documents from the public records, from the claimant’s records and from regulatory authorities and the following witnesses. They will show that the homeowner disputes the content of those records and has consistently done so since discovering erroneous information on them, and that the transaction history is at best unreliable and at worst a pure fabrication, just as this same servicer has done in these cases……

The legal argument is not that the records are permanently barred or that the truth of the matters asserted are permanently barred. It is that the opposing lawyers must produce a witness who can be cross examined and who can reconcile the factual issues that the homeowner has challenged.

The opposing lawyers will then stipulate for purposes of “judicial economy” that they no longer seek to recover based upon the contested transactions, and that they will reduce their demand accordingly. That looks like you are cooked.

But the rejoinder would be that while the homeowner accepts the admission that the records are incorrect (you ARE allowed to recharacterize the statement of opposing counsel) these erroneous statements were made before the notice letters were sent, which were a legal condition precedent to the pursuit of foreclosure. You argue that they have now failed to comply with statutes that are to be strictly construed where someone is threatened with the loss of their home. Both the amount stated as due and the amount required to reinstate were incorrect.

The whole scenario comes down to the fact that you must use facts to persuade the judge that the opposing attorney must prove his case instead of relying upon legal presumptions and exceptions to the hearsay rule. You must push hard on this because you know they cannot prove the facts, they cannot prove authority, they cannot prove ownership because they are all only doing this for fees, not for recovery on the debt. The lawyers have no knowledge as to the identity of the creditor and they don’t care. You don’t need to prove that. But you do need to raise it as a question mark in the head of the judge.

Those transaction histories might have some accurate information in them but they are being produced by a party who has an actual interest in the outcome of litigation, so they are not trustworthy and they contain errors that the servicing company now admits, although candidly there is a real question as to whether the servicing company is not simply a volunteer out for profit, the same as the lawyer and US Bank.

Also remember to attack foundation this way: US Bank or a trust is asserted to be the claimant. Unless someone can provide foundation testimony based upon personal knowledge that these records are the records of the claimant, then the records of the “servicer” may be barred. No representative of US Bank comes to trial. It is always a representative of a servicer.

In  discovery the absence of records showing disbursements  to creditors by the “servicer” might be sufficient to establish that the transaction history is not the whole story even if it is right and they should not be allowed to enter only one part of the transaction record supposedly conducted in the name of the Trustee or Trust. To whom were they forwarding the borrower’s payments? When did they stop? Did they stop because the debt is now owned by someone else or because it was enver owned by the trustee or the trust?

The Truth about US Bank

Lawyers and pro se litigants continue to ignore the basics when mounting a challenge to foreclosures in which US Bank is asserted to be a trustee of a name that is then treated as though it was trust or REMIC Trust. If you look closely, the name is word salad, containing references or names to several named entities and other categories of entities.
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 A typical presentation asserts no presence of US Bank in its individual capacity, so the institutional implication is false. It is appearing strictly in a representative capacity and an court award of costs against the “claimant” would not, according to US Bank, attach liability to US Bank but to rather whoever was being represented by US Bank “as trustee.” On that we have word salad presenting many options such as
  1. US Bank, as trustee
  2. as successor to Bank of America, as trustee
  3. as successor by merger to LaSalle Bank, as trustee
  4. for the holders of certificates entitled
  5. XYZ Corp.
  6. Mortgage pass through Certificates series 200x-a1

If anyone can tell me  from that description who would be liable for costs I applaud them. But I can tell you who would pay the costs regardless of actual legal liability. It would be a company claiming to be an authorized servicer who in fact is getting the money from the investment bank through conduits.

The issue of what if anything was transferred between LaSalle Bank and Bank of AMerica and thus what if anything was transferred between Bank of America and US Bank has actually not been litigated.

My answer is that LaSalle Bank had no duties as trustee, was subjected to the impact of three mergers — ABN AMRO, Citi and Bank of America — and that a trustee only exists for a legally existing trust in which the subject matter (Loan) was entrusted to the trustee for administration of the active affairs of the “trust.” With none of those elements present, nothing could have been transferred.

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
As to U.S. Bank, Deutsch, BONY etc. there are two categories that must be considered. If US Bank is named in a Pooling and Servicing agreement then the reasons for its non existence (or more specifically lack of legal presence in court or any other foreclosure proceeding) in fact and at law remain as previously stated in prior articles —- but exclude one central issue that has not been litigated.
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If US Bank has been asserted as successor to another alleged trustee then all sorts of other issues pop up. The main one that has not been litigated is whether the position of trustee can be transferred or sold like a commodity without consent of the beneficiaries or some other authorized party.
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In truth the only real “beneficiary” would be the investment bank — if only the trust legally existed. And in truth the investment bank indemnified US Bank from liability in exchange for the use of the US Bank name to create the illusion of institutional involvement.
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And in truth the only real party in interest is the investment bank, and if the trust actually existed the investment bank would be the only real beneficiary in an arrangement in which the trust name is used as a shield or sham conduit to hold bare naked legal title to paper that fabricates the illusion of debt ownership, much like MERS.
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And of course the whole use of the term “successor” is constantly used to distract lawyers, judges and homeowners from the fact that the previous party had no interest or right to administer, own, or enforce the subject debt, note or mortgage — unless they are able to produce authorization from the investment bank.
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But the investment banks have been loath to even hint that they could or would issues such authorization because that would be an admission that they were or are the real party in interest — an admission which probably would subject them to many levels of liability for fraud and statutory violations.
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It may well be that the pursuit of court costs and discovery available to do that might be the achilles heel of this house of imaginary cards. It would reveal the absence of any party to pay them, which would reveal the absence of a claimant, which would reveal the absence of a claim which would reveal the absence of a client, which would reveal false representations by the foreclosure mill.

No the Mortgages Are Not Securities, But the “Certificates” Do Not Qualify for Exemption As “Mortgaged Backed”

For those straining to find a way to categorize mortgage loans as securities I offer this based upon my licensing, training and experience as a Wall Street Broker and Investment Banker and as an attorney who has practiced law, including securities law for over 42 years.

You are climbing the right tree but you are on the wrong branch, in my opinion. Despite possible legal and logical arguments for your point of view there is no way any court is going to take the common mortgage loan and say it is a security, and therefore was subject to regulation, registration, disclosure and sales restrictions. And the secondary market does not rise to the level of a free exchange. While loans appear to be traded under the guise of securitization they are not actually traded.

BUT
I like your reasoning when applied to (a) certificates issued by investment banks in which the investment bank makes promises to pay a passive income stream and (b) derivative and hedge contracts issued on the basis of deriving their value from the certificates.
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The specific challenge I think should be on the status of the certificates or “bonds” issued by the investment banks. If securitization in theory were a reality then under the 1998 exemption they would not be treated as securities and could not be regulated.
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That would mean that the fictitious name used by the investment bank was a real entity, an existing Trust (or special purpose vehicle) (a) organized and existing under the laws of some jurisdiction and (b) the trust actually acquired loans through (i) purchase for value or (ii) through  conveyance from a trustor/settlor who owned the loans, debts, notes and mortgages.
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But that isn’t what happened in practice. The entire business plan of the investment banks who participated in this scheme was predicated on their ability to sell the loans multiple times in multiple ways to multiple layers and classes of investors, thus creating profits far in excess of the amount of  the loan.
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Right now each of those sales is considered a separate private contract that is (a) separate and apart from the loan agreement and (b) not subject to securities regulation due to exemption under the 1998 law that does not allow securities regulation of mortgage-backed instruments.
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So the goal should be to show that
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(a) the securitization scheme was entirely based on the loan agreement under the single transaction and step transaction doctrines and therefore was not separate from the loan transactions
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(b) the certificates or bonds were not mortgage-backed because the holders have no right, title or interest to the loan agreements, debts, notes or mortgages and
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(c) the derivative and hedge contracts deriving their value from the certificates were securities based upon the certificates (“bonds”) that are more in the nature of warrants and options on the value of the certificates rather than any direct interest in the debt, note or mortgage of any borrower.
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Hence both the certificates and hedge contracts and all other derivatives of the certificates would be subject to regulation as securities. Based upon information I have that is very suggestive although not conclusive, it appears that the Internal Revenue Service has already arrived at the conclusion that the certificates are not mortgage-backed and the trusts are not viable entities because in order to have a valid trust it must have assets and active affairs. It must also have identifiable beneficiaries, a trustor etc.
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None of those elements are present or even alleged or asserted by the lawyers for the foreclosure mills. The only “beneficiary” is the investment bank, not the certificate holders who all expressly or impliedly disclaim any right, title or interest in the loans, debts, notes or mortgages and have no right to enforce. This has already been decided in tax court. The owners of certificates are not the holders of secured debt.
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There is no “res” or “thing” that is entrusted to the named Trustee of the so-called REMIC Trust for the benefit of identifiable beneficiaries. There is no settlor who conveyed loans to the Trustee to hold in trust for identifiable beneficiary except that as a catch-all the investment bank is named as beneficiary of any title to anything that might be attributed to the trust, if only the trust existed.
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Attacking this from the top down is the job of regulators who refuse to do so. But the attack can occur from the bottom up in courts. As shown above, in any case where a trust is referenced in a foreclosure there is no legal standing. That is there is no existing entity that owns the debt. The investment bank funded the origination or acquisition of the loan but contemporaneously sold off the value of the debt, the risk of loss, the cash flow and other attributes of the loan.
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The notes had to be destroyed and a new culture based upon images had to be put in place even if it violated law. The problem with the courts is not that they don;t get it; I think a lot of judges get it but don’t like the outcome of applying the law as it currently exists. So they wink and nod at fabricated notes, assignments and endorsements.
But those same judges, when confronted with unexplained deficiencies are forced to rule in favor of borrowers. And they do. This would best be done in mass joinder, class action or some other vehicle where resources could be pooled, but the procedural deck is stacked against such efforts.

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

How to argue the “allonge”

An Allonge is defined as follows:
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Allonge. Additional paper firmly attached to Commercial Paper, such as a promissory note, to provide room to write endorsements. An allonge is necessary when there is insufficient space on the document itself for the endorsements.
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So the elements for a prima facie case involving proof of an allonge are as follows:
 
  1. It’s on a paper that is separate from the instrument (promissory note) itself.
  2. It contains endorsements (technically spelled “indorsements”). The endorsement conveys an interest in the note from the current owner to a new owner. It might contain restrictive covenants as to whether it is conveyed with or without recourse. 
  3. A condition precedent seems to be that there be insufficient space on the original instrument (note). This has not gained clarity in litigation. The presentation of an “allonge” contained a simple small stamped endorsement when there was room to place it directly on the note is indicative of foul play. At the very least it requires an explanation of why the endorsement wasn’t placed on the original. 
  4. It must be so firmly and permanently affixed to the note that it is actually part of the original instrument. In normal transactions involving commercial paper this requirement is strictly construed. In securitized residential loans this has not been strictly construed and applied. It is important to note that this requirement is meant to prevent the very thing that has been occurring for the past 20 years — unauthorized trading in debts that are neither owned by the buyer or the seller. 
An allonge can contain an endorsement to nobody, in which case it became “bearer paper.” Whoever has it in their possession is the owner of the note. But we have seen in securitization that being the owner of the note and being the owner of the debt are not the same thing. 
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Notwithstanding the difference, the note can often be enforced without evidence of ownership of the debt because of legal presumptions arising from possession of the note. 
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However, the fact that a party is entitled to judgment on a note does not mean they are entitled to enforce the mortgage or deed of trust which does require ownership of the debt as explicitly and expressly required by statutes in all US jurisdictions who have adopted verbatim the requirements of the Uniform Commercial Code Article 9 §203 which requires payment of value as a condition precedent to enforcement of the encumbrance (mortgage or deed of trust). 
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It is custom and practice of the “industry” involved in foreclosures to use fabricated allonges that are not attached and never were attached to the original note. Such allonges are often executed by either a stamped endorsement or the signature of an “authorized signer.” In many if not most cases the authorized signer turns out to have been the real estate or mortgage broker on the loan at the time of origination. As such their “authorization” can be challenged. 
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Upon investigation, discovery and analysis it usually turns out that neither the endorser nor the endorsee had ever paid value for an interest in the debt or the note. This revelation is useful in defeating presumptions arising from possession of the note. This revelation thus raises questions that may be sufficient to rebut legal presumptions that the court might otherwise employ in deciding the case. 
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In fact, it could be used to defeat the presumption that the note is now evidence of the debt or that the merger doctrine, designed to prevent dual liability, even applies. This leaves the note as a separate claim for liability — separate, that is, from the debt itself. If the mortgage or deed of trust states that it secures the note that could mean that the mortgage is void or has become void. However if the security instrument ( mortgage or deed of trust) refers to the debt, then the security instrument would not be void unless the debt never occurred — i.e., there was no loan. 
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You should refrain from making any decisions or taking any actions based upon “interpretations” or “advice” from the internet even if it from a knowledgeable licensed attorney like myself. You should get assistance from a professional who analyzes your specific situation to determine whether you can get traction in raising defenses or claims related to these issues. 
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My Final Word On Quiet Title Strategies

Most people do not have a clear understanding about Quiet Title, because it means one thing to them and another thing in court. The common misconception about quiet title is that it is a thing that just happens, like the result of a magic bullet. In fact quiet title is a court process that begins with a lawsuit by the homeowner and ends with a court order declaring that the mortgage or deed of trust should be removed from the chain of title.
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The most typical use of quiet title claims is clearing the chain of title of recorded documents that mistakenly or fraudulently describe the wrong property. The use of quiet title against a mortgage or deed of trust does not generally get traction in a court of law.
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But the more recent strategy of attacking the assignment of mortgage and seeking nullification of that instrument has met with some success and it should succeed, because you are attacking the facial and substantive validity of that specific instrument and not the entire mortgage or deed of trust. That strategy merely attacks the technical requirements for creation and recording of an an instrument affecting title to real property and attacking the substantive validity of the assignment by revealing that the debt was not transferred to the assignee by a party who owned the debt.
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The current fad of proving unenforceability of the indebtedness does not provide the foundation for quiet title unless you can prove that that (a) the indebtedness never existed or (b) the debt has been satisfied. It is entirely possible for a court of law to determine that the mortgage or deed of trust cannot be enforced by the parties who initiated foreclosure. But that does not mean that the mortgage or deed of trust is a nullity. So winning the case on the debt against a particular party who sought to enforce it does not automatically mean that you proved a prima facie case that the debt was never or is not now subject to enforcement by anyone.
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The elements for quiet title are fairly simple. The lawsuit asks for a declaratory judgment finding, as a matter of fact and law, that the encumbrance is a nullity, which means that legally the encumbrance does not exist — not that it should not exist. In plain language that means that a judge finds that the mortgage or deed of trust does not secure any indebtedness owed by the owner of the property to the mortgagee on a mortgage or the beneficiary on a deed of trust.
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 The “mortgagee” or “beneficiary” includes legal successors to the named mortgagee on the mortgage or the named beneficiary (lender) on the deed of trust. Successfully attacking the assignment means that you have negated the assignment which returns the title to the mortgage to the previous party who might be the the original mortgagee or beneficiary or lender.
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Where MERS has been used as a buffer in the title chain legal practitioners should be aware that the MERS relationship to the original “lender” is tenuous at best and most probably nonexistent to pretenders who claim to be successors — because most loans were table funded without any legal or equitable relationship between MERS and the investment bank that funded the origination or acquisition of the loan. Since no transfer of beneficial interest or interest of a mortgagee legally exists without transfer of the debt, it is nearly impossible for anyone to show an assignment with a legal transfer of the debt from an owner of that debt.
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The only way the pretender lenders can succeed is by wearing down the homeowner who must be willing to expend considerable time, money and energy defending his property. They can do this by using legal arguments that come from legal presumptions a rising from the apparent facial validity of self serving documents they have fabricated, forged or robosigned to create the illusion of a legal chain of title.
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Securitization has opened many doors to homeowners who persistently and effectively challenge the parties who initiate foreclosures. It is now almost always true that the party who initiates a foreclosure is not the actual owner of the debt nor does that party represent a legal entity that owns the debt. Transfer of a mortgage without the debt has been stated by courts throughout the 50 states to be a “nullity,” which means that the transfer never legally occurred despite the writing on a face of a document purporting to be an assignment of mortgage.
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The word, “nullity” is what you are after and it probably only applies to the assignment. It probably will never be applied, despite arguments to the contrary, to the actual encumbrance except after a period of years after the attempts to foreclose have failed multiple times, it is evident that the the debt will never be enforced or is otherwise barred by the doctrine of latches or the statute of limitations.
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Thus strategically it is important to start off with an analysis of legal title performed by a title analyst who has education and training to do it. That normally means an attorney but it could mean a person who writes title policies or who assesses title risk for title insurance companies. After the analysis, then you need someone who can suggest strategies and tactics that can be reviewed and implemented by local counsel  or pro se with the guidance of local counsel using hybrid legal services.
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We provide the title analysis if you don’t already have it based upon a current title search, including copies of the recorded documents, and we provide a 30 minute recorded CONSULT based upon a review of both the title analysis and unrecorded documents such as notices, correspondence or statements from some party purporting to be the “servicer.”
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Nothing contained in this email or anywhere on this blog should be considered legal advice upon which you can rely. Get a lawyer.

The Big Hoax: Are “Sales” of “Loans” and “Servicing” Real?

References to sales of loans and servicing rights are usually merely false assertions to distract homeowners and lawyers from looking at what is really happened. By accepting the premise that the loan was sold you are accepting that the loan was (a) real and (b) owned by the party who was designated to appear as a “Seller.”

By accepting the premise that the servicing data and documents were transferred you are accepting that the transferor had the correct data and documents and that the designated servicer is actually in position to represent the accounting records of the party whose name was used to initiate the foreclosure.

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

As Reynaldo Reyes of Deutsche Bank said in deposition and in recorded interviews, the entire structure and actual events are “counterintuitive.” The banks count on that for good reason. Most lawyers and almost all homeowners assume that at least some of what the banks are saying is true. In fact, nearly everything they say, write or produce as “business records” is a fabrication. But homeowners, lawyers and judges buy it as though it was solid gold.

In defending homeowners from foreclosure, lawyers who win more cases than they lose do so because of their willingness to believe that the entire thing is a hoax. Their withering cross examination and use of discovery reveals the complete absence of any corroborating evidence that would be admissible in court.

Even the most “biased” judges will concede that the case for foreclosure has not been made and they rule for the homeowner. But this only happens if the lawyer takes the opposition to task.

Chase did not acquire loans from WAMU and WAMU did not acquire loans from Long Beach etc. At the time of the claimed “acquisition” those loans were long gone, having been funded or purchased by one of the big 4 investment banks, directly or indirectly (through intermediate investment banks or simple cham conduit fictitious names or entities). In fact the ONLY time that the actual debt was clearly owned by anyone was, at best, a 30 day period during which the investment bank had the debt on its balance sheet as an asset.

So all sales from any seller other than one of the investment banks is a ruse. And there are no references to sales by the investment banks because that would be admitting and accepting potential liability for lending and servicing violations. It would also lead to revelations about how many times and in how many pieces the debt was effectively sold to how many investors who were NOT limited to those who had advanced money to the investment bank for shares in a nonexistent trust that never owned anything and never transacted any business.

Similarly the boarding process is a hoax. There is generally no actual transfer of servicing even with the largest “servicers.” They are all using a central platform on which data is kept, maintained, managed and manipulated by a third party who is kept concealed using employees who are neither bonded nor trained in maintaining accurate records nor protecting private data.

There is no transfer of servicing data. There is no “boarding” and no “audit.” In order to keep up the musical chairs game in which homeowners and lawyers are equally flummoxed, the big investment banks periodically change the designation of servicers and simply rotate the names, giving each one the login and password to enter the central system (usually at a server maintained in Jacksonville, Florida).

BOTTOM LINE: If you accept the premises advanced by the lawyers for the banks you will almost always lose. If you don’t and you aggressively pound on the legal foundation for the evidence they are attempting to use in court the chances of winning arise above 50% and with some lawyers, above 65%.

To be successful there are some attitudes of the defense lawyer that are necessary.

  • The first is that they must believe or be willing to believe that their client deserves to win. A lawyer who thinks that the client is only entitled to his/her time or a delay of the “inevitable” will never, ever win.
  • The second is that they must believe or be willing to believe that the entire scheme of lending, servicing and foreclosure is a hoax. Each word and each document that a lawyer assumes to be valid, authentic and not fabricated is a step toward defeat.
  • The third is that the lawyer must fight to reveal the gaps, consistencies and insufficiencies of the evidence and not to prove that this is the greatest economic crime in human history. All trials are won and lost based on evidence. The burden is always on the foreclosing party or the apparent successors to the foreclosing party to prove that title properly passed.
  • Fourth is arguably the most important and the one that is most overlooked. The lawyer must believe or be willing to believe that the foreclosure was not initiated on behalf of any party who could reasonably described as a creditor or owner of the debt. The existence of the trust, the presence of a real trust in any transaction in which a loan was purchased, sold or settled to a trustee, and the various permutations of strategies employed by the banks are not mere technical points. They are a coverup for the fact that no creditor and no owner of the debt ever receives any benefit from a successful foreclosure of the property.

Yes it is counterintuitive. You are meant to think otherwise and the banks are counting on that with you, your lawyer and the judge. But just because something is counterintuitive doesn’t mean that it isn’t true.

If you think foreclosures are a thing of the past, think again

In order to maintain the illusion of legality and an orderly marketplace the banks and their servicers must continue to push foreclosures even if it means going after people who are not actually withholding payments. The legacy of the mortgage meltdown and the brainless government policies that let the banks get away with what they had done, is that the crime not only continues but is being repeated with each new claimed securitization or “resecuritization” of residential loans.

As I predicted in 2006, the  tidal wave of foreclosures was in fact unprecedented, underestimated and continues to this day. With a starting point of around 2002, foreclosures attributed to the mortgage meltdown have continued unabated for 17 years. I said it would 20-30 years and I am sticking with that, although new evidence suggests it will go on much longer. So far more than 40 million people have been displaced from their homes and their lives.

Google Buffalo and New Jersey, for example and see whether they think foreclosures are a thing of the past. They don’t. And the people in Buffalo are echoing sentiments across the nation where the economy seems better, unemployment is down, wages are supposedly increasing but foreclosures are also increasing.

And let’s not forget that back in the early and mid 2000’s foreclosures did not mention trustees or trusts. In fact when the subject was raised by homeowners it was vehemently denied in courts cross the country. The denials were that the trusts even existed. This was not from some homeowner or local lawyer. This was from the banks and their attorneys. It turns out they were telling the truth then.

The trusts didn’t exist and there were no trustees. But in the upside down world of foreclosure here we are with most foreclosures filed in the name of a nonexistent implied trust on behalf of a “trustee” with no trustee powers, obligations or duties to administer any assets much less loans in foreclosure.

In order to understand this you must throw out any ideas of a rational market driven by fundamental economics and accept the fact that the banks  and their servicers continue to be engaged in the largest economic crime in human history. Their objective is foreclosure because that accomplishes two goals: first, it rubber stamps prior illegal practices and theft of borrowers’ identities for purposes of trading profits and second, it gives them a free house and free money.

If they lose a foreclosure case nobody suffers a financial loss. If they win, which they do most of the time (except where homeowners aggressively defend) they get a free house and the proceeds of sale are distributed to the players who are laughing, pardon the pun, all the way to the bank. Investors get ZERO.

As for modifications, look closely. The creditor is being changed along with the principal interest and payments. It might just be a new loan, except for the fact the new “lender” is a servicer like Ocwen who has not advanced any money for the purchase or acquisition the loan. But that’s OK because neither did the lender or the claimant. Modification is a PR stunt to make it look like the banks are doing something for borrowers when in fact they are stealing or reassigning the loan to a totally different party from anyone who previously appeared in the chain of title.

Modification allows the banks to claim that the loan is performing — thus maintaining the false foundation supporting trades and profits amounting to dozens of times the amount of the loan. Watch what happens when you ask for acknowledgement from the named Plaintiff in judicial states or the named beneficiary in nonjudicial states. You won’t get it. If US Bank was really a trustee then acknowledging a settlement on its behalf would not be a problem. As it stands, that is off the table.

The mega banks, with unlimited deep pockets derived from their massive economic crimes, began a campaign of whack-a-mole to create the impression that foreclosures were on the decline and the crisis is over. Their complex plan involves decreasing the number of filed foreclosures where the numbers are climbing and increasing the filed foreclosures where they have allowed the numbers to sink. Add that to their planted articles in Newspapers and Magazines around the country and it all adds up to the impression that foreclosures derived from claimed securitized loans are declining.

Not so fast. There were over 600,000 reported foreclosures last year and the numbers are rising this year. Most of them involve false claims of securitization where the named claimant is simply appointed to pretend to be the injured party. It isn’t and in many cases a close look at the “name” of the claimant reveals that no legal person or entity is actually named.

US Bank is often named but not really present. It says it is not appearing on its own behalf but as Trustee. The trust is not specifically named but is implied without the custom and practice of naming the jurisdiction in which the trust was organized or the jurisdiction in which it maintains a business. That’s because there is no trust and there is no business and US Bank owns no debt, note or mortgage in any capacity. The certificates are held by investors who acknowledge that they have no right, title or interest in the debt, note or mortgage. So who is the claimant? Close inspection reveals that nobody is named.

In fact, those foreclosures proceed often without contest because homeowners mistakenly believe they are in default. In equity, if the facts were allowed in as evidence, the homeowner would be entitled to a share of the bounty that was a windfall to the investment bank and its affiliates by trading on the borrower’s signature. A “free house” only partially compensates the homeowner for the illegal noncensual trading on his name with the intent of screwing him/her later.

Upon liquidation of the property the proceeds of sale are deposited not by an owner of the debt, but by one of the players who just added insult to injury to both the borrower and the original investors who paid real money but failed to get an interest in the fabricated closing documents — i.e., the note and mortgage.

The Banks have succeeded in getting everyone to think about how unfair it is that homeowners would even think of pursuing a “free house”. By doing that they distract from the fact that the homeowners and the investors who put up the origination or acquisition money are both excluded from the huge profits generated by trading on the signature of borrowers and the money of investors who do not get to share in the bounty, which is often 20-40 times the amount of the loan.

The courts don’t want to hear about esoteric arguments about the securitization process. Judges assume that somewhere in the complex moving parts of the securitization scheme there is an owner of the debt who will get compensated as a result of the homeowner’s refusal or failure to make monthly payments of interest and principal. That assumption is untrue.

This is revealed when the money from the sale of property is traced. If you trace the check you will be mislead. Regardless of where the check is mailed, the check is actually cashed by a servicer who deposits it to the account of an investment bank who has already received many times the amount of the loan principal. That money is neither credited to the account of the borrower nor reported, much less distributed to investors who bought certificates (wrongly named “mortgage bonds”).

Neither the investors who bought the original uncertificated certificates nor the investors who purchased contracts based upon the apparent value of the certificates ever see a penny of the proceeds of a foreclosure sale.

In order to maintain the illusion of legality and an orderly marketplace the banks and their servicers must continue to push foreclosures even if it means going after people who are not actually withholding payments. The legacy of the mortgage meltdown and the brainless government policies that let the banks get away with what they had done, is that the crime not only continues but is being repeated with each new claimed securitization or “resecuritization” of residential loans.

When the economy contracts, as it always does, the number of foreclosures will shoot up like a thermometer held over a steam radiator. And instead of actually looking for facts people will presume them. And that will lead to more tragedy and more inequality of income, wealth and opportunity in a country that should be all about a level playing field. This is not the marketplace doing its work. It is the perversion of the marketplace caused by outsized and unchecked power of the banks.

My solution is predicated on the idea that everyone is to blame for this. Everyone involved should share in losses and gains from this illicit scheme. Foreclosures should come to a virtual halt. Current servicers should be barred from any connection with these loan accounts. Risk and loss should be shared based upon an equitable formula. And securitization should be allowed to continue as long as securitization is actually happening — so long as the investors and borrowers are aware that they are the only two principals on opposite sides of a complex transaction in which trading profits are likely as part of the disclosed compensation of the intermediaries in the loans originated or acquired.

Disclosure allows the borrowers and the investors to bargain for better deals — to share in the bounty. And if there is no such bounty with full disclosure it will then be because market forces have decided that there should not be any such rewards.

PTSD: A Breakdown of Securitization in the Real World

By using the methods of magicians who distract the viewer from what is really happening the banks have managed to hoodwink even the victims and their lawyers into thinking that collection and foreclosure on “securitized” loans are real and proper. Nobody actually stops to ask whether the named claimant is actually going to receive the benefit of the remedy (foreclosure) they are seeking.

When you break it down you can see that in many cases the investment banks, posing as Master Servicers are the parties getting the monetary proceeds of sale of foreclosed property. None of the parties in the chain have lost any money but each of them is participating in a scheme to foreclose on the property for fun and profit.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

It is worth distinguishing between four sets of investors which I will call P, T, S and D.

The P group of investors were Pension funds and other stable managed funds. They purchased the first round of derivative contracts sometimes known as asset backed securities or mortgage backed securities. Managers of hedge funds that performed due diligence quickly saw that that the investment was backed only by the good faith and credit of the issuing investment bank and not by collateral, debts or mortgages or even notes from borrowers. Other fund managers, for reasons of their own, chose to overlook the process of due diligence and relied upon the appearance of high ratings from Moody’s, Standard and Poor’s and Fitch combined with the appearance of insurance on the investment. The P group were part of the reason that the Federal reserve and the US Treasury department decided to prop up what was obviously a wrongful and fraudulent scheme. Pulling the plug, in the view of the top regulators, would have destroyed the investment portfolio of many if not most stable managed funds.

The T group of investors were traders. Traders provide market liquidity which is so highly prized and necessary for a capitalist economy to maintain prosperity. The T group, consisting of hedge funds and others with an appetitive for risk purchased derivatives on derivatives, including credit default swaps that were disguised sales of loan portfolios that once sold, no longer existed. Yet the same portfolio was sold multiple time turning a hefty profit but resulted in a huge liability when the loans soured during the process of securitization of the paper (not the debt). The market froze when the loans soured; nobody would buy more certificates. The Ponzi scheme was over. Another example that Lehman pioneered was “minibonds” which were not bonds and they were not small. These were resales of the credit default swaps aggregated into a false portfolio. The traders in this group included the major investment banks. As an example, Goldman Sachs purchased insurance on portfolios of certificates (MBS) that it did not own but under contract law the contract was perfectly legal, even if it was simply a bet. When the market froze and AIG could not pay off the bet, Hank Paulson, former CEO of Goldman Sachs literally begged George W Bush to bail out AIG and “save the banks.” What was saved was Goldman’s profit on the insurance contract in which it reaped tens of billions of dollars in payments for nonexistent losses that could have been attributed to people who actually had money at risk in loans to borrowers, except that no such person existed.

The S group of investors were scavengers who were well connected with the world of finance or part of the world of finance. It was the S group that created OneWest over a weekend, and later members of the S group would be fictitious buyers of “re-securitized” interests in prior loans that were subject to false claims of securitization of the paper. This was an effort to correct obvious irregularities that were thought to expose a vulnerability of the investment banks.

The D group of investors are dummies who purchased securitization certificates entitling them to income indexed on recovery of servicer advances and other dubious claims. The interesting thing about this is that the Master Servicer does appear to have a claim for money that is labeled as a “servicer advance,” even if there was no advance or the servicer did not advance any funds. The claim is contingent upon there being a foreclosure and eventual sale of the property to a third party. Money paid to investors from a fund of investor money to satisfy the promise to pay contained in the “certificate” or “MBS” or “Mortgage Bond,” is labeled, at the discretion of the Master Servicer as a Servicer Advance even though the servicer did not advance any money.

This is important because the timing of foreclosures is often based entirely on when the “Servicer Advances” are equal to or exceed the equity in the property. Hence the only actual recipient of money from the foreclosure is not the P investors, not any investors and not the trust or purported trustee but rather the Master Servicer. In short, the Master servicer is leveraging an unsecured claim and riding on the back of an apparently secured claim in which the named claimant will receive no benefits from the remedy demanded in court or in a non-judicial foreclosure.

NOTE that securitization took place in four parts and in three different directions:

  1. The debt to the T group of investors.
  2. The notes to the T and S group of traders
  3. The mortgage (without the debt) to a nominee — usually a fictitious trust serving as the fictitious name of the investment bank (Lehman in this case).
  4. Securitization of spillover money that guaranteed receipt of money that was probably never due or payable.

Note that the P group of investors is not included because they do not ever collect money from borrowers and their certificates grant no right, title or interest in the debt, note or mortgage. When you read references to “securitization fail” (see Adam Levitin) this is part of what the writers are talking about. The securitization that everyone is talking about never happened. The P investors are not owners or beneficiaries entitled to income, interest or principal from loans to borrowers. They are entitled to an income stream as loans the investment bank chooses to pay it. Bailouts or even borrower payoffs are not credited to the the P group nor any trust. Their income remains the same regardless of whether the borrower is paying or not.

Why Fabrications? Why Forgeries?

In an increasing number of foreclosure cases, homeowners are going head to head with the lawyers who file claims on behalf of entities on the basis of fabricated and/or forged instruments that in many cases were also recorded in county records. Lawyers like Dan Khwaja in Illinois are getting clearer and clearer about it. They hire experts who understand exactly how the notes are mechanically created and the endorsements are not real signatures.

The key question is why would the notes have been fabricated and forged when there actually was a closing and a note was actually signed? We’re talking about the financial industry whose reputation depends upon safeguarding all signed documents. If they didn’t safeguard the documents and instead destroyed them or “lost” them, why was that allowed to happen?

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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So we have a case in Illinois where lawyers filed a judicial foreclosure on behalf of Bank of New York/Mellon (BONY) as trustee (i.e. representative of) “holders” of certificates. The lawyers attach a copy of a note and indorsements. Khwaja hired an expert who found quite definitively that the note and the endorsements were all fabricated (forged). Khwaja has filed a motion for summary judgment.

Here is my analysis:

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The lawyers who filed the claim have a serious problem. If they cannot convince the judge that they have no need to respond they are dead in the water. They must either pay someone to commit perjury or seek to amend with an actual original note. In view of prior studies that show that most (or at least half) of all notes were “lost or destroyed” immediately following the “closing” combined with your expert on hand, coming up with the original note is not an option.
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And that brings us to the question of “why?” If there really was a closing at which the borrower signed documents, why do they need fabricated documents? To me, the answer is simple. In order to sell the same loan multiple times they needed to convert from actual to imaged documents. The actual one had to disappear. And the handful of megabanks who had a virtual monopoly on tens of millions of mortgage transactions made it “custom and practice” to use images rather than actual documents. [This practice has spilled over to property sale contracts where neither party gets an original].
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And we have the additional issue which is presented by the foreclosure complaint. It says that BONY appears on behalf of the holders of certificates. The simple question is “so what?”
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Being holders of certificates means nothing. It leaves out any assertion that the holders of the certificates are owners of the certificates, or anything that might identify those “holders”. So the proceeds of foreclosure could then go to whoever was chosen by the parties actually pulling the strings.
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They are asking the court to fill in the blanks. They want the court to draw an inference without ever stating the fact to be inferred, to wit: the holders of the certificates are owners of the certificates who are therefore owners of the debt, note and mortgage. There simply is no such allegation nor any exhibit indicating that is true. The reason is that it is not true.
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So who is really the Plaintiff? Supposedly not BONY who is appearing in a representative capacity.
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If “sanctions” were applied against the “Plaintiff” BONY would claim it is not the actual party and that the unidentified “holders” of certificates are the proper party or perhaps an implied trust.
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So then is it the certificate holders, represented by BONY? But they don’t have any right, title or interest to the subject debt, note or mortgage. The prospectus and certificate indentures make that abundantly clear in most cases.
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Examining what happens after a foreclosure is “successful” provides clues. Neither BONY nor any certificate holder ever receives the actual money from the proceeds of the purported sale of the property.
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So who does?
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As the one party with actual control over the loan receivable, the investment bank that created the “securitization” scheme is the only party that comes close to being an actual creditor. But here is their problem: that loan receivable has been sold multiple times. This not only leaves them with no claim to the debt, but a surplus of funds over and above the amount due on what was the loan receivable. It’s basic accounting and bookkeeping. And if that were not true the banks would not be doing it.
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So in the real world it is the investment bank that gets the proceeds of a foreclosure sale. But they do it as the “Master Servicer” of an implied (and nonexistent) trust. The money simply disappears.
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In order to get away with selling the debt multiple times they had to make each sale a non recourse sale. And they did that. So the buyers of the debt, note and mortgage had no actual legal title to the debt, note and mortgage and no recourse to the borrower to collect on the unpaid debt.
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THAT leaves NOBODY as owner of a debt that has probably been extinguished and reveals the paper issued to buyers/investors as essentially the issuance of cash equivalent instruments (also known as currency). And THAT is the reason the banks, after  two decades of this nonsense, have yet to come to court and simply say “here is proof of our funding of the origination or purchase of the debt, note and mortgage.”
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If they did, they would be admitting to lying in millions of foreclosure cases over at least a 15 year period of time. Their scheme effectively concentrated the risk of loss on investors and borrowers while literally retaining all the benefits of supposed loan transactions for the sole benefit of the intermediaries, who then leveraged loans multiple times.
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This translates as follows: the money taken from investors is an unsecured liability of the investment bank. To be sure that has a value — but not a value derived from loans to homeowners. THAT value was taken by the investment bank who cashed in on it already.
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Note: For certain second tier investment bankers there were transition periods in which they were at actual risk. Examples include Lehman and Bear Stearns. But the top tier was able to sell forward on the certificates and never commit a single dime of their own money into the securitization scheme even in transition. But by pointing to Lehman and Bear Stearns they were able to convince policy makers that they were in the same position. This produced the “bailout” which was essentially the payment of even more money for losses that did not exist.
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In an odd twist of irony, Wells Fargo was the only party (2009) that admitted to no loss but was forced to take bailout money so that other “less fortunate” parties would not be singled out as weak institutions.
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In truth the AIG bailout and similar bailouts were merely payments of extra profits to Goldman Sachs and some other players, leaving investors and borrowers stranded with nearly worthless investments and collapsed markets for both homes, whose prices had been inflated by over 100% over value, and a nonexistent market for the bogus certificates that the Fed chose to revive by its purchasing program of “mortgage bonds” that were neither bonds nor backed by mortgages.
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Despite the complexity of all this, on a certain level most people understand that the banks caused the misery of the meltdown and profited from it.  They also understand that it is still happening. The failure of government to deal appropriately with the existential threat posed by the megabanks clearly played into and perhaps caused the social unrest around the world in the form of “populist” movements. And until governments deal with this issue head-on, people will be looking for political candidates who show that they are willing to take a wrecking ball to the banks and anyone who is protecting them.
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In the meanwhile, an increasing number of homeowners (again) are walking away from homes in the mistaken belief that they have an unpaid debt to the party named as the claimant against them.

FLA S Ct Reverses Course on Homeowner’s Award of Attorney Fees and Raises Other Issues for Defense of Foreclosures

For those of us that have access to the data, we know that homeowners are winning foreclosure cases all the time. Nobody else knows because as soon as a homeowner wins or gets into a winning position they are offered money for their silence. The situation worsened when Florida and courts in other states turned down the homeowner’s demand for attorney fees after the homeowner had flat out won the case — especially where the case was dismissed for lack of standing.

Here the homeowner once again wins, having advanced several defense narratives. The homeowner applies for recovery of attorney fees and the demand is rejected because the loan contract no longer exists or because the party seeking to use it was shown not to be party to it, at least when suit was commenced. The Florida Supreme Court reversed that decision and rejected others like it.

Recognizing the danger of the erroneous rulings from the trial court and the district courts of appeal, the Court rejected arguments that a dismissal, voluntary or otherwise, based upon lack of standing meant that the loan contract no longer existed. While not completely abandoning the lower courts the Florida Supreme Court has narrowed the issues such that it is again almost always arguable and even inevitable that if the homeowner wins the foreclosure case an award of fees will follow.

fla s ct attny fees 1-4-19 sc17-1387 Glass v Nationwide

see also Follow Up Article to this Article

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
==========================

This case opens a can of worms for the banks and servicers and corroborates much of what I have been writing for 12 years.

At issue was the homeowner’s right to prevail on an attorney fees award after winning the case in the trial court. This has previously been denied on the basis that cases dismissed for lack of standing meant that there was not contract. But the Florida Supreme Court says that the fact that just because the party involved had no right to enforce the contract doesn’t mean there was no contract.

The clear implication here is that the court did not want the erroneous rulings of trial courts and appellate district courts to be construed as completely canceling the loan contract. Any other ruling would be inherently ruling on the rights of unidentified third parties who DID have a right to collection of payment from the borrower’s debt and who did have a right to enforcement — without any notice to them because they are undisclosed and unknown.

The Supreme Court ruled that failure to allege or prove standing does not negate the fact that the homeowner is the prevailing party and entitled to fees under F.S. 57.105(7).

Citing its own decision in 1989, Katz v Van Der Noord 546 So 2d 1047, the Supreme Court held that even if the contract is rescinded or held to be unenforceable the prevailing party is still entitled to fees under the reciprocity provisions of F.S. 57.105(7).

This upends a basic strategy of the banks and servicers. Up until this decision they were virtually guaranteed an award of fees and costs if they won and immunity to fees if they lost. This reopens the fees issue and may give attorneys a reason to accept foreclosure defense cases — even on contingency or partial contingency.

But the court, perhaps in dicta, also mentions whether the note is negotiable, quoting from the homeowner’s arguments and pleadings.

Up until now the mere existence of the original note and in many cases a copy of the note, was sufficient to regard the note as a negotiable instrument. But the Florida Supreme Court is hinting at something here that the banks and servicers really don’t want to hear, to wit: it takes more that announcing the existence of a note to make it negotiable. This is not so.

Which brings me to my final point: read carefully the day the claimant is introduced and you will probably find that the note and assignment are not facially valid because they require reference to parole or extrinsic evidence. This bars legal presumptions, at least in the absence of a specific reference to the documents supporting the execution of the instrument as a substitution of trustee, an assignment or an endorsement.

The court was more than hinting at the idea that subsequent treatment of the note, which may have been a negotiable instrument at the time of execution (if the “lender” was in fact the lender). The question is whether the note is facially valid, to wit: whether the note specifically names a maker, payee and an unconditional promise to pay. If the originator was not the lender then extrinsic evidence would be required to prove the loan and the debt and the party who would have been appropriately named as payee on the note.

If subsequent indorsements or assignments for a note that WAS negotiable remove certainty from one or more of the elements of a facially valid instruments, then it is no longer a negotiable instrument. And THAT means that the all “reasonable” assumptions and legal preemptions are taken off the table.

The reason is simple. In order to be a negotiable instrument the assignee or successor must have certainty as to the parties and terms of the note. If extrinsic or parole evidence is required to provide that certainty the instrument is not negotiable and thus not entitled to any assumptions or presumptions.

So for example (taken from another case) when a Substitution of Trustee occurs in a nonjudicial state and it is executed by “U.S. Bank National Association, as trustee, in trust for registered Holders of First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-FF I, by Select Portfolio Servicing, Inc., as attorney-in-fact” then there are several points that require extrinsic or parole evidence, making the note non negotiable or at least arguably so.

In this scenario for an assignee to take a note from a party claiming rights to enforce in this instance one must know

  1. The name of the Trust, and the jurisdiction in which it was organized and is now existing.
  2. The instrument by which US Bank claims to be trustee
  3. Identification of “registered holders”
  4. The identification and content of the certificates
  5. The instrument by which SPS claims to be “attorney in fact”
  6. If you look closely you will also see that there is a question as to whom it is claimed that SPS is representing as attorney in fact. In any event “attorney in fact” means that a power of attorney exists but without specific reference to that power of attorney by date and parties, extrinsic or parole evidence is required meaning that no assumptions or legal presumptions may be made.

In other words the note cannot be accepted by anyone without extrinsic evidence. The fact that documents are apparently accepted by the assignees doesn’t change anything as to the facial validity of the document. Without facial validity there can be no negotiability under Article 3 of the UCC. Without negotiability there can be no assumptions or legal presumptions and thus the claimant must prove every element of its claim without presumptions.

And of course when the homeowner wins an award of attorney fees is now once again probable in addition to court costs.

Remember always: the point is not who can get away with enforcement. The point of the law is assuring that the owner of the debt is the one enforcing the debt and collecting the proceeds of enforcement. Before false claims of securitization this premise was almost universally true. Now it is rarely true that the true owner of the debt is represented.

And the apparent absence of such a party due to manipulation of the debt by intermediaries, does not legally create a vacuum into which anyone with knowledge and access to data may step in and claim rights of enforcement. As stated in California Ivanova decision the law does not allow the borrower’s debt to be owed to anyone whose premise is simply that they claim it.

Older Forensic Title Analyses Need Updating — Even Ours

 A recent request from an old client brought to mind the changes that have occurred, as in her case, since 2011 — more than 7 years ago.
A quick review indicates that the facts were correct but the conclusions need tweaking. And the title record should be updated. Many new laws and case decisions have occurred since that report was finished and many new facts have been revealed about these older transactions.

For example it now appears that our assumption about the flow of payments was incorrect.
  1. Your payments were being made to a subservicer who was forwarding money on a separate contract to a Master Servicer.
  2. The Master Servicer then authorized, in its sole discretion, third parties to make certain payments to investors who had purchased certificates issued in the name of a trust, which turns out to not exist.
  3. The trust name was being used as a fictitious name for the named underwriter of the certificate offering. But the actual transaction was not an underwriting; it was simply a sale by the party posing as underwriter (implying it was working for a third party, presumably the nonexistent trust).
  4. By contract, the investors purchased their right to receive money arising out of a promise to pay issued by the named underwriter (i.e., seller) that was unrelated to the terms of repayment on any note.
  5. And most importantly the investors waived any right, title or interest to the loans, debts, notes or mortgages.
  6. Thus you can see that actions undertaken in the name of the holders of certificates or a REMIC Trust or the Trustee of a REMIC trust are all fabricated, to hide the fact that the obligation of the borrower has been transformed into an unsecured obligation to pay intermediaries who converted the investors’ money and thus claim to be principals entitled to enforce a debt in which they had no investment.
  7. Most of the documents uploaded to SEC.gov, if at all, are either unsigned or incomplete (or both) lacking a mortgage loan schedule or any reference to a particular loan. Such documents are ONLY uploaded to SEC.GOV which has no power to charter or approve any entities nor their filings, as long as they have been granted access to upload documents. Their existence on SEC.GOV means nothing.
  8. An assignment without actual transfer of the debt is without effect. In virtually all cases involving false claims of securitization no payment of any kind was ever made by any party in the chain for the origination or purchase of the loan. Our Case Analysis examines the issues arising from transfer of a promissory note which can cause legal presumptions to arise concerning ownership of the debt and transfers thereof.
  9. Analysis of the fictitious “trust” documents reveals the absence of essential elements of a trust hence leading to the conclusion that no actual trust was intended notwithstanding the illusions and implications contained in the documents themselves and the representations of attorneys and representatives of “servicers” to the contrary. Upon case analysis (apart from title analysis contained in our TERA report) the following basic elements of a trust are usually absent.
    1. Complete signed trust instrument
    2. Trustee with powers to administer the affairs of the trust and the trust assets
    3. Trustor/settlor creating the trust.
    4. Beneficiaries of the trust
    5. RES: anything that has been entrusted to the named trustee to manage on behalf of the beneficiaries
My suggestion, if the issues are still pending, is that you order the current TERA and the PDR PLUS, which includes a recorded CONSULT.
CLICK HERE TO ORDER CONSULT (not if you order PDR)
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR BASIC or more probably the PDR PLUS, in your case — includes CONSULT)

Foreclosure Defense Discovery Timeline

In answer to a number of very similar questions about the paid services we provide on www.lendinglies.com regarding the subject of Discovery, I submit the following:

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The TERA will definitely give you narrative from which you can cut and paste questions or at least ideas on what questions you could ask in discovery. But it is far from a complete analysis for discovery. It is a part of the analysis required to come up with a complete defense narrative that you can use to guide you through litigation and educate the judge on what is wrong with the false case against you and your property (if that is the case).
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The Case Analysis goes much deeper and completes the defense narrative as well as providing you with more in depth insight that can be used for cut and paste into discovery and the narrative for defending your discovery requests which most certainly come under attack.
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Discovery is a multi faceted approach.
  • First you have the QWR and DVL.
  • Then you have the complaints to the State AG and the CFPB.
  • Response to statutory letters often provide the basis for the next step, because your opposition will evade, lie, and provide inconsistent answers. 
  • It is not uncommon to see them back off of a sale or dismiss a foreclosure case entirely when confronted with questions and accusations from the homeowner. 
  • The next step in the discovery process is the filing in court and service of discovery requests (usually limited to a specified number — i.e., you might need to submit more than one set) in the form of one or more of the following:
    • Interrogatories
    • Request to Produce (only aimed at party who is named in litigation)
    • Subpoena for documents
    • Subpoena for deposition duces decum
    • Request for Admissions
    • Request to enter or inspect
  • Following the filing and service of any discovery request you will almost definitely be met with objections and motions to strike and so forth. You must use the defense narrative to justify your questions and to answer how your request might lead to the discovery of admissible evidence. This part requires an aggressive stance — one that is often missed by pro se litigants and foreclosure defense lawyers.
  • Once you have received an order commanding compliance with your discovery request you will probably need to consider filing a motion for sanctions for non compliance. (We know that they will never admit that there is no trust or that the claimant has no interest in the loan or that the claimant won’t receive the proceeds of liquidation of the property.)
  • And lastly you will need to preserve objections before trial and possibly file a motion in limine to restrict the evidence your opposition can introduce at trial to the extent that includes discovery items they refused to give you.
While the questions will generally follow the same theme from case to case your discovery will be shot down if it is not specific according to your  defense narrative for this case alone.
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We provide all these services either through www.lendinglies.com or by direct retainer of Neil Garfield (neilfgarfield@hotmail.com) as an expert consultant or for legal consulting and analysis that can be used in conjunction with and in support of a local attorney.
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In order to put all these elements into an actual plan for your case alone, you must submit the REGISTRATION FORM to us before even beginning. Put as much information on then form as you can do. The less information you give the more work we must do and must charge you for us to do the work.
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Finally that leads to the Consult. Usually a thirty minute CONSULT is sufficient. In that conversation we decide on the path that you wish us to take in preparing pre litigation and litigation documents. Later Consults are for strategic assistance in confronting the efforts of the lawyers for often nonexistent clients to obfuscate, wear you down and thus defeat you.
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Generally speaking we require consults to be ordered with the PDR (Preliminary Document Review). This pays us to review some of your documents and the most recent reports and correspondence in preparation for the Consult with me, Neil Garfield.
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But all of this work is virtually identical to the background work needed to defend against a motion for summary judgment. However, if you want us to write the opposing motion and brief you need to hire us to do that by direct retainer of Neil Garfield (neilfgarfield@hotmail.com) as an expert consultant or for legal consulting and analysis that can be used in conjunction with and in support of a local attorney.
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