foreclosure mill | Livinglies's Weblog

Another Example of LSF9 and McCarthy and Holthus going down in flames

Posted on February 13, 2023 by Neil Garfield

Standing is established when the party pursuing foreclosure can “demonstrate that it had the right to enforce the note and the right to foreclose the mortgage at the time the foreclosure suit was filed.” PNC Mortg. v. Romero, 2016-NMCA-064, ¶ 19, 377 P.3d 461 (alteration, internal quotation marks, and citation omitted). Third parties seeking to enforce a promissory note underlying a mortgage establish standing by “prov[ing] both physical possession and the right to enforcement through either a proper indorsement or a transfer by negotiation.” Bank of N.Y. v. Romero, 2014-NMSC-007, ¶ 21, 320 P.3d 1.

LSF9 Master Participation Tr. v. Dickinson, No. A-1-CA-37364, at *4 (N.M. Ct. App. Feb. 8, 2022)

LSF9 Master Participation Tr. v. Dickinson, No. A-1-CA-37364, at *4-5 (N.M. Ct. App. Feb. 8, 2022) (“If, at the time a lawsuit is filed, the plaintiff produces a note indorsed in blank, the plaintiff is “entitled to a presumption that it could enforce the note at the time of filing and thereby establish standing.” Johnston, 2016-NMSC-013, ¶ 25.”)[e.s.]

Trust maintains that the documentary and testimonial evidence offered, in the aggregate, established “constructive possession of the note” on the date the complaint was filed. But our review of the record established that testimony was offered concerning the absence of documentary evidence showing the note’s physical location on the complaint’s filing date. Specifically, Fannie Mae’s testifying agent admitted that none of the exhibits about which she had testified addressed the note’s physical location at the time of filing. Therefore, viewing the facts in the light most favorable to the decision below we cannot hold that the district court erred by concluding that Fannie Mae failed to demonstrate standing, as we are satisfied that its finding that Fannie Mae did not show physical possession of the note on the date the complaint was filed is supported by substantial evidence.

Hat tip to our friend and colleague Bill Paatalo, private investigator whose tireless efforts, paid and unpaid, have led to numerous discoveries and results favorable to homeowners who have successfully defended false foreclosure claims.

The devil is in the details. The moral of the story is that homeowners and their lawyers should stop assuming there is a valid, legally recognized claim against the homeowner.

This case highlights the standard I have been writing about for 16 years, which most lawyers and judges have completely ignored. First, the claim of possession of the original note is usually false. In the affidavit, the signatory doesn’t actually identify or state the physical location of the original note. Second, possession of the original note is irrelevant in the absence of a foundation, establishing the authority to enforce the note.

Ultimately and logically, that authority can only come from the creditor to which the alleged unpaid account is owed.

Lastly, a proper endorsement can be used to raise a legal presumption that the authority exists. But the homeowner should make every effort to rebut that presumption. This is normally done in the discovery process. But the same issues can be raised in a qualified written request, or a debt validation letter.

The refusal or failure to provide an answer to such basic questions and title for the homeowner to ask the court to rule that a negative inference can be raised. Having failed to corroborate the alleged legal presumption, the argument should center on the fact that the court lacks the authority to consider any evidence of the existence of an unpaid loan account due to the named plaintiff or beneficiary.

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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: foreclosure, foreclosure mill, jurisdiction, legal standing | Tagged: LSF9, McCRTHY AND HOLTHUS | 1 Comment »

How Foreclosure Mills Win by Misusing “Judicial Notice”

Posted on February 10, 2023 by Neil Garfield

Hat tip to summer chic

Judicial Notice is a rule of evidence in which the court receives a written request to accept a document into evidence as proof of the truth of the matter asserted.

In Foreclosures, the truth of the matter asserted is that there is an unpaid loan account, and the named plaintiff or beneficiary has the right to administer, collect and enforce it. If that is alleged in a form that is allowed by law, and proven in the manner allowed by law, the foreclosure will be granted. I might add, that it should be granted to the extent that there is still an unpaid balance due to the named Plaintiff or beneficiary. But in nearly all foreclosure cases, this is NOT the true fact scenario.

There are circumstances where the trial court either MUST accept a document as evidence or in which the court can accept the document as evidence as to its existence. But unless there is an objection, the court will also presume that what is contained in the document is also true.

I hasten to add that it is highly unusual for an appellate court to accept a document or record on judicial notice if it was not introduced as such in the trial court.

Here is an article that discusses judicial notice at length and presents clear definitions and uses for the request.

https://www.dailyjournal.com/mcle/1034-judicial-notice

Here are some relevant quotes from the article by attorney David M Axelrod in California.

Judicial notice is a means of bringing before a trial or appellate court “matters [that] are assumed to be indisputably true, [ so that] the introduction of evidence to prove them will not be required.”

mandatory judicial notice of “decisional, constitutional, and public statutory law,” government rules and regulations, rules of professional conduct, rules of pleading, practice and procedure, the “true signification of all English words and phrases, and … legal expressions,” and ” [f]acts and propositions of generalized knowledge that are so universally known that they cannot reasonably be the subject of dispute.”

permissive judicial notice “to the extent … not embraced within … of laws, regulations, legislative enactments, official government acts, court records, rules of court, international law, and two rather expansive catch-all categories: “[f]acts and propositions that are of such common knowledge within the territorial jurisdiction of the court that they cannot reasonably be the subject of dispute,” and “[f]acts and proposition that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.”

2. Judicial notice is limited by relevance and hearsay rules.

a. Courts will not take judicial notice of irrelevant matters.

b. A court cannot take judicial notice of the truth of hearsay statements in a document, unless an exception to the hearsay rule applies.

c. The hearsay rule also applies to preclude judicial notice of argument or comments by counsel and judges in other proceedings.

4. Judicial notice extends to a broad cat egory of facts that are “not reasonably subject to dispute and … capable of immediate and accurate determination … .”

The attorneys who work for the foreclosure mills often request judicial notice of records.

One example — out of many — is any document that shows a header at the top of the document as coming from the sec.gov website. Unwary lawyers and ignorant pro se litigants usually agree that the document is a copy of a government record.

First you should only accept a copy that is certified by the agency that issued it — not a copy, because copies can be and often are chnged digitally to reflect the desires of the lawyer who works for the foreclosure mill.

Second, without an objection as to content being hearsay or relevance, the admission of the document into evidence usually is taken as evidence of the truth of the matters asserted in the document.

And third, the document is generally subject to both a hearsay and relevance objection. For hearsay, see practically every article I have written on these pages. For relevance, only a litigator will know what I am talking about.

The document is NOT relevant unless there is a foundation (testimony admitted as evidence) that proves the existence of the unpaid loan account due to the Plaintiff or Beneficiary.

This foundation can ONLY be established by one of two methods — (1) admission from the homeowner directly or through his/her counsel or (2) by the records custodian for the named Plaintiff or Beneficiary (e.g. U.S. Bank, as trustee etc.) providing sworn testimony in support of the unpaid loan account or an acceptable report about which he has personal knowledge — not “familiarity.”

Without that foundation, there is no need to consider whether the alleged lien has been transferred, or whether the homeowner has failed to make a scheduled payment. Those issues are irrelevant in the absence of establishing the existence of an unpaid loan account with a balance due from the homeowner. Without that, there is no legally recognized claim.

Homeowners frequently lose their cases and fail to successfully defend foreclosures, simply because they admit the existence of an unpaid loan account due to the named Plaintiff or Beneficiary.

The other way they lose is by failing to object to the “payment history” offered by the attorney, working for the foreclosure Mill. This is irrelevant, and should not be admitted into evidence without first establishing the foundation that

An unpaid loan account exists
An unpaid loan account has a balance due that is unpaid
An unpaid loan account is owed to the plaintiff or beneficiary
The Plaintiff or beneficiary has appointed a company to act as “Servicer” in accordance with the tersms of a servicing agreement that is also produced by a records custodian.

The fact that a witness shows up and is willing to be sworn in as a witness does not mean anything they say is true. Their testimony that their employer is a “Servicer” is a matter of opinion and is usually not true. (see below). Unless they have personally witnessed employees of their employer collecting checks or other forms of payment, they must be requried to define “servicer.” Homeowners lose by failing to do that.

If the lawyer representing the foreclosure mill wants to use the “payment history” at all, he, or she must produce foundation testimony from a records custodian who says the are personally knowledgeable that the record is one that represents business conducted by the company that is said to be the issuer of the report.

No such witness ever appears in foreclosure cases. Instead the witness testifies that the report is issued in the ordinary course of business but it not stated by the witness that the report is a representative of transactions that were accepted, processed or forwarded by the named issuer. This sleight of hand trick is the principal reason for literally millions of false foreclosures.

No witness will say that they know that the records are an accurate depiction of transactions or business conducted in the name of “servicer.”

They won’t do that because (a) that would be perjury and (b) it isn’t true. All payments, processing and disbursements are handled by third party financial technology companies that do not work for the named “servicer.” The “ordinary course of business” that the witness is talking about is being an actor posing as a company performing servicing functions.

Some witnesses know the misleading nature of their testimony and some don’t. So in most cases you will not get an admission, although I have succeeded at doing that in a few cases.

Mostly you get the desired effect by hamemring at “how do you know that.” Like when the witness testifies about familiarity, you can usually destroy them on cross-examination when you start asking what they mean, what they saw, what they did, and how much they were relying upon statements from people who will not testify in court (hearsay).

These witnesses are put through “training” which amounts to memorizing a script. When they say they saw or witnesses input on computers, ask them how close they were and what they actually viewed. They will never have an answer. Then comes the motion to strike the prior testimony as being without foundation and based on hearsay. (also possibly a relvance objection followed by motion to strike).

In the cases I have won, the judge typically sustained by objection granted my motion to strike the preceding testimony but left room for the case to proceeed. Then the finding of fact and conclusions of law are that the Plaintiff or Beneficiary failed to produce sufficient evidence to establish their alleged claim of right to administer any alleged unpaid loan account, or to collect money — or enforce the putative lien.

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Filed under: boarding process, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure defenses, foreclosure mill, hearsay, Judicial notice, jurisdiction, legal standing, prima facie case, Servicer, TRIAL OBJECTIONS, trial strategy | Tagged: judicial notice | 3 Comments »

TRID may be another easy win for Homeowners

Posted on May 5, 2022 by Neil Garfield

since loss mitigation is a statutory condition precedent to foreclosure, there is a failure to comply with the condition that requires loss mitigation exhaustion before pursuing foreclosure, the steamrolling of homeowners is not just wrong, it is also a breach of statutory duty for which the homeowner can seek injunctive relief, damages, and attorney fees.

TILA-RESPA integrated disclosures (TRID) is a series of guidelines that dictate what information mortgage lenders need to provide to borrowers and when they must provide it. TRID rules also regulate what fees lenders can charge and how these fees can change as the mortgage matures.

But it also contains the requirements for review and processing of loss-mitigation applications, resulting in charging excess fees without explanation and failure to credit surplus proceeds from the foreclosure sale.

Once you accept that you might be wrong, then you can move on to whether the forces aligned against you are also wrong. But first, you must discard the errors of your own ideas about the transaction in which you obtained money. It is at that point that several things emerge. And Homeowners are starting to pick fights with “servicers” rather than waiting for them to arrive and others are going back and contesting foreclosure sales for breach of statutory duties.

START HERE:

When you apply for loss mitigation you are tacitly admitting that the address you are sending your application to belongs to parties who are entitled to receive it. This is almost always untrue.
By addressing the application to the designated company whose name is used by FINTECH as a “servicer” you are admitting that they have the power to consider the loss mitigation application. They don’t.
And to put a finer point on it they don’t consider it. Nobody does.
This means that reports back to the homeowner are false. It was not considered because neither the named “servicer” nor FINTECH had any power to consider it nor did they do so.

So if you want to use the TRID strategy, you must first accept their authority, submit the required documents and then sue them for deceit and breach of statutory duty. You might also want to demand the return of everything you submitted since they were not entitled to receive it.

I also think that the Administrative Strategy (QWR+DVL+CFPB complaint+AG Complaint —see links below) is an essential condition precedent for the homeowner to be able to sue. It should be timed such that the homeowner can honestly say that they accepted the representation of authority in good faith and then concluded afterward that no such authority existed.

This opens the door to a simple lawsuit under TRID, which is really a breach of TILA. And since loss mitigation is a statutory condition precedent to foreclosure, there is a failure to comply with the condition that requires loss mitigation exhaustion before pursuing foreclosure, the steamrolling of homeowners is not just wrong, it is also a breach of statutory duty for which the homeowner can seek injunctive relief, damages, and attorney fees.

The basis of the lawsuit is simple.

The homeowner received an invitation to participate in a loss mitigation program from someone who had neither the power nor intention to consider it.
Subsequent reports issued under the letterhead of the designated company that was an alleged servicer were erroneous and false.
No consideration was given to loss mitigation.
The “servicer” possesses no record of seeking or obtaining instructions from any creditor nor any company or person that possesses the authority to act for a creditor who maintains an unpaid loan account due from the homeowner.
Therefore foreclosure should not be allowed or should not have been allowed.

In order to pursue this strategy with gusto, you need to accept the fact that the entire securitization infrastructure might be a ruse. It is. You don’t need to prove that it is a ruse. You only need to kneecap those who rely on that infrastructure to obtain windfall profits.

The only way to defeat you is if they get you to admit that the parties with whom you’re corresponding are legally authorized to represent a real creditor. If you reject that and make them provide corroborating evidence they’ll fail because such evidence does not exist.

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure mill, forensic investigation, legal standing, MODIFICATION, Motion Practice and Discovery, Presumptions, Servicer, sham transactions | Tagged: TRID | 1 Comment »

How Evidence Works for and Against the Consumer/Homeowner

Posted on April 7, 2022 by Neil Garfield

(Once again, because of minor medical issues I decline to do the Neil Garfield Show. I offer this instead)

It is easy to get lost in the weeds. Don’t make up your own words or definitions because your definitions have no relevance to your case. Do hold the accusing side to their words and to the legally accepted definitions of those words as contained in statutes and cases.

But above all, start at the beginning — a rookie mistake made by nearly all young litigators and pro se litigants who skip over the gold to pick up a few pieces of copper. They exclaim “How could I lose, I have the copper!” And all the court wanted was the gold.

This post is inspired by the factual findings of several of my most generous contributors, and a hat tip to summer chic. Just because you hear a word or term don’t think you know what it means or the context in which it is issued. That is what litigation is all about.

So first I will repeat what Aristotle said. First, define your terms. I personally know what Fiserv did as a payment processor when it served to intercept and process transactions from POS and ATM devices. I know what it did when it effectively acted as Gateway for intercept processors, including itself.

Payment processing in all of its forms consists of three distinct nodes: receipt of money, data processing (recording the receipt and disbursement of money) and the actual disbursement of money. In that sense, Fiserv has always been a servicer.

So it is easy to see why the investment banks trusted FiServ to handle those functions rather than anyone else. And they did. After the Tylor Bean débâcle, they would never let a company actually perform servicing functions because that would leave open the door to stealing.

It was Black Knight who set up the lockbox arrangements (contracts) but FiServ who actually did the grunt work — receiving, accounting, and disbursing $MONEY$. Except that they didn’t really do disbursing.

Because the act of depositing the money was a disbursement. They would take a $1,000 check from Homeowner Smith and deposit it into a bank account that was owned and controlled by XYZ Capital Finance, Inc. which was either a subsidiary of the investment bank or a conduit for outflow to offshore accounts. The named “servicer” never saw or even expected to receive that money.

The reason why I am commenting on this is that this is extraordinarily important to the defense narrative for consumers. The ONLY party who may sue is one who has suffered financial injury “proximately” caused by the conduct of the party against whom he has filed suit.

I have argued for 16 years that the homeowner deserves to win. But people take that as meaningless drivel from a defense lawyer who will always say that his criminal client is innocent. So try this: you can win and why should you not? If you were facing jail would you really so blithely accept the “inevitable”?

If the homeowner fails to make a payment that appears on some schedule and Goldman Sachs loses money because they’re betting that he would make the payment, the injury suffered by Goldman Sachs is NOT LEGALLY caused by the failure of the homeowner to make a payment. GS cannot sue the homeowner for that. That bet is the same as betting on a horserace. You can’t sue the owner for losing or throwing the race.
If an investor IS getting paid regardless of whether the homeowner makes a payment or not, then they can claim no injury from the “failure” to make a scheduled payment.
- The investor who purchased a certificate is simply betting that the investment bank that issued the certificate will make the payments or cause payments to be made according to the terms of the contract that is the certificate — not according to any contract with the homeowner. The certificate parties are investor vs investment bank — not investor vs homeowner.
If an investor has no legal claim to receive payments from homeowners nor to administer, collect or enforce any alleged loan account the investor has no claim whatsoever against the homeowner — for the simple reason that the investor has chosen to have no relationship whatsoever with the homeowner in order to avoid liability for lending and servicing errors, mistakes or violations of statutes passed by the Federal and State governments — of which there were tens of millions of cases resulting in hundreds of billions in settlements, so far.
If an investment bank was counting on receiving a scheduled payment from a homeowner but had no right to receive it, it may not under current law in any U.S. jurisdiction recover money from the homeowner nor force the sale of the homeowner’s property.
If the investment bank had no legal right, title or interest to the underlying obligation, debt, note or mortgage (deed of trust) issued by the homeowner, then it had no right to administer, collect or enforce any payment set forth on any schedule — nor grant the authority to do so to someone else.
- One may not grant rights that do not belong to the grantor. If I promise to give you my jet, you will not get the jet simply because I don’t have a jet. And if you know I don’t have a jet you have no claim for my failure to deliver it.
If a company is named as servicer then unless FiServ is doing the work for that “servicer” company (under contract), then the work done by FiServ is the work of Fiserv, and only Fiserv employees and representatives can testify about what was done and what their records contain.
- Any report issued by them or based upon FiServ data must be established by foundation testimony from the records custodian of FiServ and not some robowitness employed by the company who was named as a servicer but was not performing the basic servicing functions.
- Any such report and testimony of the “representative of the named “servicer” are irrelevant, lacking in competence, foundation, or materiality.
- Such testimony is rank hearsay clearly excludable in every court in every U.S. jurisdiction — but only if a timely and proper objection is raised within the context of a coherent defense narrative.
- This is because the only thing that a robowitness can really say is that “I received this report and my boss says it is a report from my employer who I have been told by someone (I don’t remember who) is a servicer of an unpaid loan account due from the homeowner to the Greatest Bank of All Time, N.A., not on its own behalf but on behalf of the Indecipherable Trust 200x-04 ALRT-A pass-through certificates, not on its own behalf but on behalf of the holders of those certificates, about whom I know nothing.”
  - “I know nothing about the content of any servicing agreement between my employer and any creditor who has paid value or otherwise has a right, title, or interest in receiving money from the collection of payments, principal, or interest from homeowners. “
- In truth, the report is entirely printed out from data received exclusively from FiServ data processing servers and storage servers which are owned, operated and maintained by FiServ which provides services (“servicing”) to and for the exclusive benefit of investment bankers who have no legal right to administer, collect or enforce any debt.
- In truth, when the robowitness says he or she is familiar with the records of his or her employer what they really mean is that they’re familiar with a script and know absolutely nothing about the operations of their employer because their employer does not want them to know anything. (This is how many such witnesses are “blown up” on the witness stand by hundreds of lawyers across the country.)

So for purposes of this discussion, a payment processor is a company that processes payments — i.e., something that is actually happening and something that they are a direct party to witness the actual occurrence of actual events and recording them. A “servicer” is a company that services payments from the homeowner and accounts for its actions by recording data on its own records regarding said receipt.

If they have not done that, then they’re not a servicer in the conventional use of the word, even though the statutory definition for purposes of statutory liability to consumers is much broader. That statutory definition (augmented by regulation X) does not mean that they received any payments nor recorded any such receipt.

Use of that statutory definition as a basis for misleading the court about the role of the company named as servicer and the origin of the information will eventually become, in fairly short order, the subject of a series of actions by state bar associations, the FTC and the CFPB. Insurers of lawyers have already inserted sufficient cover language to deny coverage for intentional misdeeds. Since the company named as “servicer” is not “servicing” any unpaid loan account receivable (which it will be revealed does not exist) they have no right to testify about it, much less the balance or record of payments.

This is all true and but it is NOT a sign of judicial corruption to point out instances in which these particular facts are either ignored or denied by the person sitting on the bench. Their job as judges is to rule on what is brought in front of them — not what might have been brought nor what should not have been brought if there had only been an objection. The truth is that in most cases I have received I would have ruled the same way as the judge frequently accused of corruption.

Once the homeowner has effectively admitted that there is an unpaid loan account receivable exists (without any information), admits that the third party company is a servicer (without any information), and admits that the bank named is the trustee of a trust (without any information), and admits that the trust owns an unpaid loan due from that homeowner or even argues about which trust owns the loan, what choice do I have as a judge but to rule that those facts are, for purposes of the case in front of me, the facts of the case?

Litigation is about offense and defense. The purpose of defense is NOT to let the evidence in or to find ways to get it out. It is not to prove that the lawyers or anyone else are corrupt, evil, or belongs in jail. Once you make that allegation and can’t legally prove it, you will lose all credibility on the main point — defense. And that will cost you the opportunity to make a ton of money on wrongful foreclosure.

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: boarding process, CORRUPTION, discovery, Discovery -Subpoena, evidence, expert witness, Fabrication of documents, foreclosure defenses, foreclosure mill, forensic investigation, hearsay, jurisdiction, legal standing, Presumptions, prima facie case, Servicer, sham transactions, standing, STATUTES, TRIAL OBJECTIONS, trial strategy | 1 Comment »

Why the UCC Matters in Foreclosure Cases

Posted on April 5, 2022 by Neil Garfield

The problem as illustrated by many scholarly articles and articles on this blog is that courts are given to treat plaintiffs and claimants as holders in due course without anyone asking them to do so.

The first thing you need to know about Foreclosure is that it is only about money. If you have the money and you pay it, there is no claim — or at least no claim against you. You might have a claim against a “debt collector” seeking to enforce a nonexistent debt for a nonexistent claimant.

The second thing to remember is that, by definition, foreclosure is a lawsuit or claim based upon enforcement of the mortgage or deed of trust. The promissory note is usually introduced as evidence of the existence of the obligation and the duty to make scheduled payments. But enforcement of the note alone can only result in a monetary judgment that could be discharged in bankruptcy.

According to the law in every U.S. jurisdiction (adopting 9-203 UCC) the mortgage or deed of trust can only be foreclosed to satisfy an unpaid existing obligation owed by the homeowner to the named claimant. Lawyers and judges have adopted various strategies to allow foreclosures when they are only based upon the enforcement rights of a holder of a promissory note and often without regard to whether the claimant is a legal “holder.”

In fact, most courts treat the claimant as though it had established its exalted status of a holder in due course — without anyone asserting that status. And the common failure to object to such treatment is the principal reason why homeowners fail to successfully defend foreclosure actions based upon a nonexistent loan account and often even a nonexistent claimant.

In 2007, the Fordham Law review published an article entitled “Will the real holder in due course please stand up?” I republished that article later on this blog. The answer to the question, in cases where foreclosure was claimed as a legal remedy by some alleged REMIC trust structure, was that there was no holder in due course.

You’ll be surprised to learn that there have been many cases where a credible offer to pay the claim has been declined if it required confirmation from the named Plaintiff or claimant.

This is standard industry practice in circumstances where a prior “loan” is being been financed or paid off through sale or other means. Many states have laws specifically requiring that the payoff information includes such information and assurances — in order to prevent a payoff to a party with no claim. It is basic common sense and basic law to assure continuous clear title to the property free from claims of clouded or unmarketable title.

In each case where I have been involved, opposing counsel basically took the position that they didn’t want the money they wanted the foreclosure. And in each case, the judge was surprised by that position.

But most homeowners are not in a position to make a credible offer to pay off the entire amount as demanded. Those who can make that offer are utilizing the AMGAR strategy that I developed 16 years ago.

Those who cannot make that offer must litigate to make the same point — that in the final analysis (trial) the attorney for the named claimant will be unable to proffer credible evidence of the existence, ownership, and authority to administer, collect or enforce any debt.

Instead, they will proffer fabricated documents and argue that the judge should apply legal presumptions to conclude that an obligation exists, the named claimant owns it and the homeowner is in breach of a duty to make scheduled payments.

In reverse logic, the foreclosure lawyer simply takes an uncontested fact (usually) and bootstraps it into a case that the judge thinks is real. And what nearly everyone forgets is that the absence of a scheduled payment, even after making such payments, is not evidence of default nor a license to declare a default unless the payment was actually legally required to be paid to the party seeking to collect it.

If you skip a car payment I have no business, right or justification in declaring that to be a default. But current law is hazy on the subject of what happens if I do declare the default and then bring a claim based upon my declaration of default and my claim that I represent the loan company.

In a 2016 article just brought to my attention that was published by Franklin Pierce School of Law of New Hampshire University, a lawyer in Miami published an article about the nonconforming use of the UCC to support nonconforming claims. At the time of publication, he was associated with a Florida law firm representing lenders. 14 U.N.H. L. REV. 267 (2016), available at http://scholars.unh.edu/unh_lr/vol14/iss2/2.

See

The Non-Uniform Commercial Code: The Creeping, Problematic Application of Article 9 to Determine Outcomes in Foreclosure Cases

Morgan L. Weinstein

Senior Attorney at Van Ness Law Firm, PLC, Miami, FL

The Non-Uniform Commercial Code_ The Creeping Problematic Applic

Weinstein makes a clear presentation of fact and law with respect to the application of UCC Article 3 (notes) and Article 9 (Security instruments, mortgages deeds of trust etc.).

Keep in mind here that a holder in due course (HDC) is ONLY one who has paid value for the ownership of the note in good faith and without knowledge of the maker’s defenses. In plain language, the HDC can enforce even though there are potentially many defenses that would be available to the maker of the note if the claimant was merely an alleged “holder.”

In every instance where a REMIC trust structure is alleged, there is only an allegation or assertion that the “trustee” or trust is a holder, not a holder in due course. Earlier (2001-2005) assertions of HDC status were removed from the script.

Also, keep in mind that a legal holder of a note has two attributes: POSSESSION and RIGHT TO ENFORCE. The latter is overlooked. The only party with the power to grant the right to enforce is ultimately the creditor who owns the underlying obligation.

So the claimant attempting to enforce a note may file a complaint (and win a judgment if there is no contest) based upon the technical allegation that it is a “holder”. But it still loses at trial or summary judgment if it fails to respond to discovery requests asking for the source of its authority to enforce (given that they are not a holder in due course).

The problem as illustrated by many scholarly articles and articles on this blog is that courts are given to treat plaintiffs and claimants as holders in due course without anyone asking them to do so. Although I have seen many transcripts in which the lawyer Argues that his “client” is a holder in due course without any reference to payment of value in exchange for ownership of the debt, note or mortgage.

Such “misstatements” are protected under the doctrine of litigation immunity unless you can prove that the lawyer speaking absolutely had knowledge that he or she was lying when the statement was made.

He begins with a discussion of negotiability:

Negotiability presents the possibility of a transferee taking a position that is better than the transferor.The Uniform Commercial Code defines a number of different possible parties to a negotiation. There are three general positions that a transferee can occupy in a transfer under a negotiable instrument: the transferee can occupy a better position, a same position, or a worse position, with each position being relative to the transferor. [e.s.]

Typically, lenders in foreclosure actions occupy the same or worse position, given their frequent status as a “holder,”rather than the better position of a “holder in due course.”

Under Article 3, a “holder in due course” occupies a privileged position.Specifically, a holder in due course is insulated from numerous defenses to the right to enforce an instrument. A holder in due course is susceptible only to the “real defenses” of a borrower or other interested party.The real defenses include claims of infancy, essential fraud, insolvency, duress, incapacity, or illegality.Though there is an assumption of good faith in Article 3 dealings,a holder in due course is still protected from many defenses to the right to enforce.

Weinstein makes the following point, though:

it is generally understood that a note-holder may foreclose a mortgage, and a plaintiff need only establish entitlement to enforce the note in order to demonstrate its ability to foreclose the incidental mortgage; such a plaintiff need not demonstrate ownership of the note.

Although he correctly states the current status of legal consensus, this statement overlooks the issue presented above — that the right to enforce emanates solely and ultimately from the creditor owning the underlying obligation. Otherwise, the whole concept is meaningless.

The prima facie case of the claimant need not prove that line of authority and grants but the defense can undermine and eliminate the prima facie case if it can be shown that the claimant has not received such authorization or that the claimant cannot produce evidence of such authorization in discovery and even under court order in the discovery process.

Thus whether one relies on Article 3 or Article 9 the UCC result is the same: there is no remedy of foreclosure for a party who has not paid value for the underlying obligation or at the very least can show the foreclosure sale will be used to pay the creditor owning the underlying obligation thus reducing the alleged loan balance.

This goes to the root of foreclosure. Nobody in the courts would agree that anyone with knowledge of the original transaction with a homeowner should be allowed to enforce a contract to which he she or it was not a party. And if the proceeds of a foreclosure sale are not intended to decrease the loan account receivable of a creditor who paid value, then there can and should be no foreclosure or any other claim for that matter.

As far as I can determine, contrary to the belief of most lawyers and judges, there is no single instance where the forced sale of residential property in which the claimant was an alleged REMIC trustee, for an alleged REMIC trust resulted in payment to anyone who was owed the money. In fact, there is no single instance in which the alleged REMIC trustee or the alleged REMIC trust even received one single penny at any time.

My conclusion: all alleged REMIC trust structures are basically trade names (fictitious names) for the investment bank. None of them ever see a penny of payments received from homeowners or their homes.

=======================================
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Filed under: CORRUPTION, evidence, expert witness, Fabrication of documents, foreclosure, foreclosure defenses, foreclosure mill, jurisdiction, legal standing, MBS TRUSTEE, Pleading, Presumptions, prima facie case, Servicer, sham transactions | Tagged: Article 3 UCC, article 9 UCC | 2 Comments »

“Payment History” is not the loan receivable account

Posted on February 2, 2022 by Neil Garfield

The payment history is not the loan receivable account by definition and it is never presented as such. Failure to recognize this obscure fact often results in failure. But those who do understand it, raise their chances of a successful defense from unlikely to very likely.

A lawyer (Scott Stafne) shared with me a case that he is apparently working on. This case is interesting because the lawyer for the homeowner has filed the final round of motions in the discovery cycle, which is a Motion in Limine — i.e., a motion to limit testimony from the sole robowitness expected to testify at trial. The basis of the motion is that the witness has no knowledge as to the past “servicers” and therefore cannot testify to any balance due.

But the courts have stretched themselves out on a limb to allow the foreclosure mills to introduce evidence that would never be permitted in any criminal trial and would only be permitted in civil trials if there was a proffer of corroborating evidence that would round out the obvious gaps in the testimony of the witness and the completeness of the exhibit.

BULLETIN: The payment history is not the loan receivable account by definition and it is never presented as such. The testimony in court nearly always skips the calculation of prior credits and debits (like disbursements to creditors) on the books of the servicer and the corresponding accounting entry on the books of a creditor. that is because there is no loan account receivable on the books of any party named as a creditor. And if it is not the loan account receivable, the Payment history is not evidence of the balance due as shown on the books of the creditor.

The lawyers who say they are representing Chase Bank probably have never spoken with or communicated with anyone at Chase. But they are right in their argument. The current rules concerning business records create a loophole that the banks have been charging through since the inception of false claims of securitization of debt (“Loans’).

What is interesting is that the case is now potentially set up to raise an objection, to wit: While the “witness” need not verify the records of previous parties regarding the “loan account”, it is the loan account that must be produced and not just a report on payments. The loan account would have a record of all credits and debits including disbursements to creditors if any. In the absence of a custodian testifying and proffering a copy of the loan account receivable — from the books and records of the creditor — (or the original accounting ledger) the balance cannot be known by the court.

Like virtually all transactions with homeowners, this case presents a “private label” case founded on the securitization of the “loan.” At this point, very little money exchanges hands in any transaction with homeowners because the applicants for loans are steered to a common securitization infrastructure. This leads to reports of funding without any money actually exchanging hands assuming there is a prior mortgage.

My point is this: the nature of securitization requires that the apparent loan account receivable be extinguished. This event generally occurs contemporaneously with the “closing” of the transaction.

The securitization plan calls for the sale of securities that are NOT tied to ownership of any debt, note or mortgage and are not backed by any debt, note or mortgage.

By freeing the sale of securities from the necessity of issuing securities representing shares of debts or pools of debt, the investment banks are able to sell multiple iterations of securities and secure a large yield spread premium that arbitrages the difference between the sales proceeds of securities and the transaction cost with homeowners, each time.

By steering homeowners toward a common base securitization infrastructure, the cash paid out at the “closing” with the homeowner is vastly reduced, thus increasing the amount of the yield spread premium to nearly 100% of the amount of the fictitious transaction with the homeowner.

The homeowners only know that the mortgage lien and note from one “transaction” were “satisfied.” They have no access to information that would inform them that each successive transaction creates a new tree of securitization representing nearly 100% profit for each successive round of sales of securities — this provides them with an average of 1200% return on each stated transaction with homeowners, wherein such transactions are repeated as many as 4-5 times.

None of these receipts are credited to any loan account receivable on the accounting ledger of any person or business entity. The credits do not appear because there is no record of a loan account receivable and nobody at any of the companies or entities brought forward in foreclosure has any access to such information.

Hence, the success of objections in court to the effect that the “Payment History” is not the loan account receivable that reveals the balance due, combined with the absence of any documents or person verifying that the company named as servicer is acting on behalf of a bank or business entity that claims to own the underlying obligation, frequently results in the objection sustained.

And even with a continuance, the lawyer for the claimant cannot produce the loan account receivable because it does not exist. Accordingly, the lawyer cannot argue any actual or imminent financial damage caused by the behavior of the homeowner. And that fact undermines the authority of the court to even hear the case.

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
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Filed under: BURDEN OF PROOF, CORRUPTION, evidence, Fabrication of documents, foreclosure mill, investment banking, jurisdiction, legal standing, prima facie case, Servicer, sham transactions | Tagged: discovery and evidence foreclosure litigations, motion for sanctions, MOtion in Oilmine, MOTION TO COMPEL | 3 Comments »

Getting a piece of the pie: How securitization can work FOR homeowners and not against them

Posted on January 19, 2022 by Neil Garfield

There is no sale of the obligation, note or mortgage and so there is no securitization of debt. By splitting the attributes of behavior from the provisions of the executed documents and changing the description of the behavior, an investment bank could, in essence, sell the apparent debt an unlimited number of times without ever recording the sale of the debt, note or mortgage.

In most instances, the “closing” of a transaction with a homeowner results in the issuance of a note and mortgage promising payment that is not supported by any reciprocal consideration. In most of the other cases, the “closing” results in very little money paid by or on behalf of the homeowner despite what is stated on the settlement statement, which is a lie.

Like everything in the world of securitization, you need to split the hairs. “Title” to the mortgage does not mean “ownership” of the mortgage, but the two terms are generally conflated as meaning the same thing. Any party that is the last party to receive an assignment of mortgage is the “owner” of “title” to that lien. There is no reasonable debate that can occur with respect to that black letter statement.

And any owner of “title” to the mortgage (note the difference between title to the mortgage and title to the property) has the right to enforce that lien according to the terms of the instrument that was properly executed and recorded. But that right to enforce is subject to several statutory and common law restrictions.

First common law for centuries holds that no transfer of a mortgage is valid, even if it is properly executed and recorded, if there is no concurrent transfer of ownership of the underlying obligation. This distinguishes the legal treatment of mortgages from other instruments like promissory notes.

This is further reflected in the statutes of all U.S. jurisdictions that require the would-be enforcer to have paid value for the underlying obligation. Adoption of 9-203 UCC. And please note that, as the investment banks figured out, it is possible to pay value without paying the value for the underlying obligation and it is possible to have paid value for the mortgage lien without paying for and receiving ownership of the underlying obligation — especially if the parties intended it. (See “splitting”).

In fact, splitting hairs further, it is possible to pay value for future behavior of humans relative to the provisions of written instruments without ever buying the obligation, note or mortgage. This is exactly what occurred in the current iteration of “securitization” of debt. There is no sale of the obligation, note or mortgage and so there is no securitization of debt.

By splitting the attributes of behavior from the provisions of the executed documents and changing the description of the behavior, an investment bank could, in essence, sell the apparent debt an unlimited number of times without ever recording the sale of the debt, note, or mortgage on any accounting ledger —even while such “sales” are reported and recorded in the public domain.
In so doing the investment banks turned accounting on its head. And the big accounting firms let them do it — along with Federal agencies who knew better.
No legal document is valid unless it relates to something that actually occurred or is expected to occur in the real world.
The absence of any accounting ledger containing any unpaid loan account receivable due from the homeowner is proof of the absence of the debt — at least without court reformation of the entire transaction.
The single biggest mistake of homeowners and lawyers is the failure to recognize these basic facts. As a result, even judges who are skeptical of the claim MUST conclude that the unpaid loan account receivable exists and that it is owed to the claimant who has experienced a default (financial loss) because they either said it or implied it through counsel who is protected by litigation immunity.

In terms of selling securities, regulated or unregulated, this was the holy grail of investment banking. Selling securities without ever having to turn over the proceeds of securities sales to a genuine issuer. They merely had to invent a name under which the securities were issued and then sell them. This could be done indefinitely with the same homeowner transaction or group of homeowner transactions. The group would be called a “pool” implying ownership but that label was misleading since nobody owned the underlying obligation — thus undermining the right to enforce the terms of the mortgage.

The problem with this Wall Street strategy is that none of the securities issued by them are enforceable against or even currently relevant to the homeowner (according to the investment banks and their lawyers). The benefit is obvious. they can sell the transaction multiple times, calling it a “loan,” without ever recording the sale of the debt. But enforcement of the debt is entirely dependent upon the existence of an unpaid loan account receivable under current law. Since no such account exists under the current iteration of “securitization” the investment banks were required to fake it.

They needed to manage to convince judges that a designee or nominee had the right to enforce even though it had no such right. They needed to do that because without enforcement, the label of “loan” would be exposed as fake. And the sales pitch to investors regarding the apparent (but never promised) ownership of a pool of loans would also be revealed as fake, thus undermining the principal goal of the entire scheme — the same of more securities (“certificates”). If transactions with homeowners were revealed to be something other than “standard loans” then the certificates would become unmarketable.

As a consequence, events occurred on an epic scale that were incomprehensible to the casual observer. The investment banks did not have an unpaid loan account receivable to point to as a reference so they created the presumption of one. By inserting a “servicer” who appeared to be processing the receipts and disbursements, they used the printed reports allegedly from the”servicer” to constitute a “payment history”.

They then, through counsel, convinced judges to accept the “payment history” as a legal substitute for evidence of the loan account receivable. The absence of any evidence of actual receipt of payments or disbursement to a “creditor” has been overlooked by courts for twenty years.

Thus far nearly all homeowners and most of the lawyers who are rarely employed to investigate the matter to render an opinion, have failed to understand this process precisely because there is no analog in their lives or education or experience.

But for the few homeowners who challenge the premise that there is any outstanding unpaid loan account receivable, they usually succeed at trial or they are paid off in confidential settlements. The challenge to homeowners and their attorneys is to start at the first premise at the earliest possible time because the investment banks, acting through lawyers who have litigation immunity, are building a track record of correspondence and notices starting with the origination of the homeowner transaction.

Thus by the time the matter gets to court, most homeowners have done nothing and their defenses look like last-minute hail Mary passes to avoid the “inevitable” foreclosures. 96% of all homeowners faced with false claims of rights to administer, collect or enforce the nonexistent loan account receivable simply leave or even clean up the property before leaving peaceably. In so doing they are leaving behind the extremely valuable property that has no effective lien on it other than the recording of a mortgage that was either invalid, to begin with, or became ineffective because there was no debt.

In addition, homeowners are leaving a claim behind that also has high value and which the investment banks are always concerned about. The original transaction was in most cases without any fundamental element of a loan transaction other than the homeowners’ desire to obtain a loan. Except in the earliest transactions in the late 1990s and early 2000s, nearly all such transactions were steered toward a feeder of a common investment bank.

Thus the appearance of payments made on behalf of the homeowner at “closing” was an illusion. The investment bank simply used two different originators. Other than cash-out refi’s no money at all was required except to pay all the intermediaries who played the parts of lenders, servicers, closing agents, real estate agents, mortgage brokers, title companies, etc. But each new “transaction” was the base or foundation for a new round of creation, issuance, sale, and trading of new certificates. The investment banks were literally printing money — or cash equivalents.

In most instances, the “closing” of a transaction with a homeowner results in the issuance of a note and mortgage promising payment that is not supported by any reciprocal consideration. In most of the other cases, the “closing” results in very little money paid by or on behalf of the homeowner despite what is stated on the settlement statement, which is a lie.

By all standards and statutes, the fact that the transaction with the homeowner would not have taken place but for the sale of securities was required to be disclosed to the homeowner. And the claim that the transaction was a loan required the investment bank, acting through its many intermediaries and conduits, to disclose the true nature of the transactions and the compensation, bonuses, commissions, and profits that would be generated from securities sales. (TILA).

The entire securities scheme was entirely dependent upon the homeowner signing papers that would be used to create an extra-legal virtual creditor (illegal) with an extra-legal (illegal) virtual loan account receivable rather than the legally required real creditor with a real loan account receivable. Homeowners never received the loan product they were requesting and they were never told about the valuable service they were performing for the investment banks. And therefore they never had an opportunity to bargain for a share of the venture into which they were being lured as the principal issuer of instruments that made the scheme possible.

Thus each day, homeowners, believing that they received what they requested, are walking away from property that is legally owned by them free from the enforcement of the mortgage lien that is being used to chase them out. Each foreclosure results in new financial proceeds that are used to pay various intermediaries and conduits (including law firms and “Servicers”) with the investment banks retaining the balance. Although this cash flow should be categorized as revenue it is untaxed inasmuch as it is reported (or unreported) as the return of capital.

There is nothing in this piece that is unknown to the Federal Reserve, the FDIC, the FTC, the SEC, or the Department of the Treasury. In the words of Timothy Geithner, attempting to justify the payment to banks rather than the bailout of homeowners, “The plane was on fire. We had to land the plane somewhere.”

For proof of this narrative look no further than The TARP program and the many cases that have been won by homeowners. In all cases where the homeowner won, it was based upon a finding by the trial judge that the claimant had not produced sufficient evidence to back up its claim—- i.e., that it had an unpaid loan account receivable.

But TARP is more instructive. First, it was announced that it was intended to cover losses from defaulting “loans.” Then Federal officials came to realize that the banks were not holding any loans. That produced some head-scratching. If there were no losses on “loans” then why did the banks need a bailout? Then Wall Street came up with a different scenario closer to the truth but still a lie — the “losses” were from the certificates (RMBS) that were issued. The same problem emerged. Investment banks were not buying certificates, they were selling them.

But Wall Street was banging the drums for a bailout anyway. They had no losses but they wanted a vehicle by which they could stiff investors and settle for pennies on the dollar. And they wanted the proceeds of hedge bets and insurance they had purchased gambling on the collapse of the “market” (completely controlled by the investment banks) for the certificates.

And so was born the Maiden Lane entities and the payments to AIG etc that resulted in companies like Goldman Sachs receiving tens of billions of dollars on a bet that they had made that the certificates they were creating would fail — a bet that was guaranteed by the tranche system. This could only work if “loans” were closed that could not possibly survive more than a few months or years. Wall Street banks thus encouraged the NINJA “loans” with “no documents” etc. It was a bid for a crash.

The data on the highest quality “loans” were placed in the highest tranche but that tranche (under the control of the investment bank) bought “credit default swaps” that were disguised purchases of the data relating to the lowest tranche that contained data on the “loans” that were virtually guaranteed to fail.

Insurers would not insure the lowest tranche. It was too obvious that the loan data would be reported as non-performing in the near or middle term. So the investment banks asked for insurance on the highest tranche and then created the scenario in which when the lowest tranche failed it took down the highest one thus triggering tens of billions in profits payable not to investors but to the investment banks. And such payments were not credited to the unpaid loan accounts receivable for any homeowner because no such account existed.

And to think that all this occurred on the backs of homeowners who failed to receive a single disclosure for the existence of the securities scheme that completely changed the character of the transaction that they requested and that they reasonably believed they had received.

So here is the remedy— from the law books — that ought to apply if you stop believing in the threats of armageddon regularly issued by the investment banks. Like Iceland and others, use court process to force the reformation of the homeowner contract to include the securitization portion of the deal, compensating the homeowner reasonably for the share of revenue that the homeowner should have received and compensation for the additional risks in dealing with counterparties who had no stake in the outcome of the transaction or who even had a negative stake in the outcome (If it failed, they win).

Filed under: CORRUPTION, discovery, Discovery -Subpoena, Fabrication of documents, foreclosure defenses, foreclosure mill, forensic investigation, investment banking, Investor, legal standing, Pleading, prima facie case, Servicer, sham transactions | 5 Comments »

THREADING THE NEEDLE: IT IS WHAT THEY DON’T SAY THAT REVEALS THE TRUTH — AND YOU CAN USE IT!

Posted on January 5, 2022 by Neil Garfield

So talk about splitting hairs — here is a statement from a company that is claimed by third parties to be the servicer of a “loan.” Note that the parties making the claim do NOT swear that PennyMac is servicing claims to administer, collect and enforce for them, but rather for some unknown creditor or some other entity that does NOT make such a claim. Think about that. Here is the quote:

PennyMac, who, as the loan servicer, is authorized to accept payments for your loan.

And here is the analysis of that statement:

PennyMac IS authorized, although not by anyone who is legally entitled to act as grantor in such authorization.
And it is authorized to accept payments — but it doesn’t. And nobody who does “accept” payments is working for PennyMac. PennyMac is not a FINTECH, Lockbox, or processing center for payments made by homeowners nor the recipient or processing centers for the money proceeds from foreclosure sales or sales of REO property.
And notice that it says “accept” payments rather than “receive” payments. I can be authorized to accept your payment but unless I actually receive it my authorization, even if valid, is irrelevant and lacks foundation.
- And so if you make a payment and direct it to me at an address that is a mail processing center that sends the payments for processing at a lockbox or FINTECH company, the accounting for those receipts can only be performed by people who in their ordinary course of business actually collect and account for receipts.
  - The “Payment History” proffered in the name of such a “servicer” for the payment is also irrelevant and lacks foundation. They’re merely producing a report generated by someone else.
  - In addition, the Payment History proffered in court is not an acceptable or legally admissible substitute for the ledger showing the loan account receivable (see below).
  - This Payment History from such a servicer is neither acceptable evidence or admissible evidence of payments nor of the balance of the loan account receivable owed to a specific creditor who paid value for the underlying obligation.
- The Payment History could only be admitted into evidence if there was live testimony from someone with personal knowledge of the ordinary course of business of the company that entered the data and reproduced the report — keeping in mind that this does not include the company named or claimed to be the “servicer.”
- But the failure to make such objections and challenges invariably results in admission of the report into evidence, which in turn, establishes the existence of the loan account receivable, the right of the servicer to account for the payment history, establish the default etc.
PennyMac IS a “loan servicer” only because the regulations were meant to include anyone who participates in the administration, collection of enforcement of claims arising from alleged loan accounts. But if the loan accounts don’t exist, then they are not a loan servicer under any construction of the term.
And notice they don’t actually say what would ordinarily be said by either the loan officer as a lender or the officer in charge of administration, collection or enforcement of a loan at a servicer who receives, processes accounts for and disburses funds to creditors, i.e.,
- “You have a loan account receivable arising from your transaction on the __ day of ___, 20__. XYZ has acquired all rights, title and interest to the underlying obligation. the legal debt, note and recorded mortgage.
- By law, you owe XYZ that money.
- We have been appointed to serve the interests of XYZ and empowered by XYZ to administer, collect and enforce the right to collect payments of interest and principal as provided by your promissory note and the recorded mortgage.
- A copy of that authorization, signed by an authorized officer of XYZ is attached or has already been provided to you.
- Attached is a copy of the XYZ ledger on which your loan account appears showing the balance, payments, and disbursements from inception to the present.”
- YOU WILL HEVER, EVER SEE SUCH A LETTER OR STATEMENT NOW — BUT THIS WORDING IS TAKEN FROM HUNDREDS OF EXEMPLARS DATING BACK TO THE EARLY 1990s AND EARLIER.
- Why don’t they say that — especially when they used to say it and that wording was literally invented by the financial industry? The answer is very simple., they don’t say because they can’t say it without exposing themselves to criminal and civil liability.
- But they can imply it or have their lawyers argue false factual and legal premises in court with immunity. What is the fix for this gigantic scam? It would be the government doing its job which after over 20 years is a lost cause.
- That means that homeowners need to invest their time, money, and energy into defeating these false foreclosure claims. And that generally means that groups of homeowners must come up with a way to finance the challenge for each individual homeowner.

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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: boarding process, burden of persuasion, burden of pleading, BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure mill, forensic investigation, Motions, Presumptions, prima facie case, Servicer, sham transactions, TRIAL OBJECTIONS | 3 Comments »

Why I Think Homeowners Are Entitled to Receive a Second Payment From Investment Banks

Posted on January 4, 2022 by Neil Garfield

All homeowners who think they have a mortgage loan have received one payment at a “closing” — or a payment allegedly made on their behalf. For reasons explained elsewhere on this blog, such payments on their behalf are mostly fictional where the underlying investment bank is the same “director” of funds.

The significance is that a second tree springs up in which the scheme described below is duplicated — with little or no cost to the investment banks. Each time the myth of “refinancing” is employed a new securitization tree springs up with dozens if not hundreds of branches.

The purpose of this article is to explain my view that homeowners are entitled to share in the revenues and profits generated by securitization schemes — and why I think that now is the time to demand it in litigation.

This claim has been filed early in the course of the mortgage meltdown. In one case the Federal judge held onto it for 14 months before finally ruling that the complaint should be dismissed. It led to my deposition being taken for 6 straight days, 9am-5PM as an expert witness. I was having heart problems at that time and they were clearly trying to wear me down. I did not relent. I did get some stents shortly afterward. 16 banks and 16 law firms each took their turn beating me up.

I think we have reached a different era in which these claims should be pressed again. We know a lot more than we did in 2007-2008. Subsequent events proved the basic points, to wit: that the paper trail did not match up to reality, which is why the paper trail consists entirely of false, fabricated, forged, backdated, and robosigned documents.

1. Homeowners enter into transactions that appear to be loans to purchase or refinance property at market value. Even if the transactions were actual loans, the determination of market value was legally the responsibility of the lender under TILA. Market value never increased, but prices were grossly inflated because Wall Street flooded the market with money that appeared to be cheap.

By lowering the apparent monthly cost, they made the actual price appear to be irrelevant — which is part of the essential element of deception.
The common homeowner relied upon the appraisals that were required by investment banks to be inflated in order to complete the loan transaction or the illusion of a loan transaction.
The only way securities brokerage firms (investment banks) could sell more and more unregulated securities is if more and more deals were signed by unsuspecting homeowners.
Thus the transaction enabled the homeowner to purchase or refinance a home under the mistaken belief that the home had a market value in excess of the principal amount of the “loan.”
All such “loans” were bad, from a market perspective.
It meant that the homeowners took an immediate loss because market prices were stratospherically higher than market values (i.e., indicating a high known probability that prices would fall precipitously).
It also meant that if there was a lender, it also was taking an immediate loss because it could not report the value of the loan at face value since the loan principal was far in excess of the value of the collateral.
In addition, all such loans were bad because the impact of this phenomenon was to create an immediate incentive to default on the scheduled “loan” payments apparently due from homeowners.
The obvious conclusion is that for everyone except the homeowner, this was not a loan transaction.

2. The transaction was not a loan. If it was a loan, nobody would have been party to it. There was no lending intent. there was no profit incentive to engage in lending under the circumstances described above. Like the “new economy” of the 1990s, the entire housing market consisted of the myth of a new force that would permanently push housing prices ever higher.

So what homeowners are missing out on is claiming a share of a pie that almost everyone else got paid.
The paper (document) deal basically has the homeowner execute a document allowing for a virtual creditor without a loan account balance in order to create, issue, and sell unregulated securities, regardless of what the homeowner intended and regardless of what the homeowner believed.
Because of the undisclosed structure of the deal, the “seller” was able to recover all money paid to the homeowner contemporaneously with the “closing” of the paper transaction. This is true even though nobody made credit entries to a nonexistent loan account.
Neither the loan account nor any of its components (underlying obligation, legal debt, note or mortgage) was ever sold in a financial transaction in the real world.
This accounts for the ability of the investment banks to conduct multiple virtual sales of hedge instruments or interests in the performance data for the virtual loan.
This enabled the investment bank to convert the usual 15% underwriting fee to at least a 1200% profit plus whatever they could get from homeowners in monthly payments and foreclosures.
With exception of the homeowner, every person and every business entity that was recruited to participate in the selling scheme to homeowners got paid extra exorbitant fees for their participation.
Those were fees that would never have been paid and could never have been paid but for the absurd profits from the so-called securitization scheme.
The homeowner provided a service that is undeniable: the homeowner accepted the concept of a virtual creditor even though no such allowance existed under any laws, rules or regulations thus enabling these fees and “trading profits” to be generated without any offsetting entry to any nonexistent loan account.
If homeowners had been given the opportunity to negotiate terms for their acceptance of a transaction in which there was no lender, no compliance with TILA, and no stake by a lender in the success of the transaction, homeowners would have had the opportunity to bargain for better terms and competition in the industry would have resulted in better terms (a share of the pie) being offered.
We already know that incentives were offered to pay closing costs, the first few months of the “loan” etc. Homeowners occupied a special place in the securitization scheme.
Without the cooperation of homeowners, there was no securitization scheme. Other players could have been replaced but not homeowners.
So their share of the pie would have been substantial if they had the opportunity (i.e., if there was disclosure) to bargain and better terms would have been offered if there was disclosure and transparency as required by law.
In my opinion, there are two benchmarks that should be used to determine how much the homeowner should have been paid: (1) the amount the homeowner received at closing, making such payment a fee and (2) 15% of the total revenue generated from the scheme in e exchange for the issuance of the paper documents (note and mortgage).
- These two benchmarks overlap. But what it basically comes down to is that each homeowner should have received the benefit of the real bargain: around 15% of the total revenue from that deal which means that in a typical $200,000 loan, with at least $2.4 million generated in fees and trading profits, the homeowner should have received at least $360,000.
- The $200,000 “loan” might survive upon proper reformation reflecting all the elements of the real deal, but there is still an extra $160,000 that was due to the homeowner at the time of signing.
- Right now that $360,000 is being shared with dozens of people and companies involved in the securitization scheme and dozens of companies involved in virtual foreclosure schemes — i.e., foreclosures in which lawyers acting under litigation immunity argue or imply that a loan account exists and that they represent the party who owns it.
- The only reason why homeowners are excluded from that is that it would reduce the size of bonuses received by the existing players, most of whom are doing nothing other than lending their name to a virtual scheme.
- I said in 2007 that homeowners did not really owe any money to anyone from these paper transactions and that in fact, it was the reverse — homeowners are the ones who are owed money by the investment banks, plus interest from the date of closing.

I think the failure of homeowners to aggressively pursue this line of practical and legal reasoning is largely responsible for the continued drain (anchor) on the U.S. economy, which is still suffering from the unfortunate decisions of multiple administrations to save and increase the profits of investment banks at the cost to and detriment of common homeowners.

Filed under: discovery, Discovery -Subpoena, Fabrication of documents, foreclosure mill, investment banking, legal standing, Presumptions, prima facie case, securities fraud, sham transactions, standing | Tagged: collateral lawsuit, counterclaim | Leave a comment »

Destroying, Hiding or Fabricating Evidence: Doctrines Regarding Spoliation of Evidence

Posted on December 28, 2021 by Neil Garfield

The latest issue of the Florida Bar journal contains several interesting articles. One of them is entitled “Spoliation of Evidence and Non-party witnesses.” The author is Gary M Glassman, who is the attorney for Daytona Beach.

The major points of the article that I think are relevant to Foreclosure Defense litigation are that (A) spoliation has a very broad meaning and (B) the refusal to produce documents that are relevant to the case at Bar raises an inference in favor of the homeowner, and might even give rise to a cause of action for damages.

Foreclosure lawyers have long relied on the fact that they could stonewall request for information and then use fabricated documentation containing false information with impunity. But a proper document request during an open discovery period can itself be the subject of an affirmative defense or even a claim for damage to the homeowner’s ability to defend.

This enhances the relevance of having previously sent a qualified written request and a debt validation letter, together with a complaint to the CFPB and the state attorney general.

In judicial states, I think that it is possible and even probable that the court would sustain an affirmative defense consisting of both fabrication and spoliation. Combined with an action for damages under the FDCPA (potentially as a counterclaim) the homeowner could claim the inference that the missing documents would show that the exhibits to the complaint are false and fabricated. There is some pretty clear law in both Florida and California supporting this proposition.

In non-judicial states where the homeowner must initiate judicial action, one of the claim should be spoliation, along with fabrication.

The other point is the duty to preserve evidence. It is clear that a party that is used may not destroy or hide evidence and must produce such evidence when requested to do so in formal discovery.

One of the tactics employed by the banks is to hide information about the identity and last known address of relevant third parties like the “employees” or “independent contractors” who supposedly executed the documents upon which the entire foreclosure case rests.

Third parties have no absolute duty to maintain documents in their possession unless they know that the documents in their possession are relevant to pending legal claims and defenses. So the answer is that you want to give them notice and the best way to give them notice is with a subpoena duces tecum. This could include such companies as Black Knight and CoreLogic — not just individuals.

Asking for such information and not getting an answer is evidence of spoliation. Finding the “signor” with a private investigator is often very productive. In many cases, they deny ever signing anything. And they’re probably telling the truth.

The failure to provide such information is part of the doctrines utilized in claims o spoliation and the inability of the responding party to provide a satisfactory explanation for failing to produce the records raises, in and of itself, an inference that those records would show that the discovery requests establish a negative inference as to authenticity and validity of those documents — but, in my opinion, only if the discovery request is accompanied by requests for admissions that carefully track the request to produce which carefully tracks the interrogatories.

The bottom line is that spoliation is a recognized foundation for asserting that the opposing party has either acted or refused to act in a way that interferes with the ability of the homeowner to prove affirmative defenses or claims which resulted in substantial prejudice to the homeowner. This has not been previously applied to Foreclosure litigation. But I can think of no other area of litigation in which fabrication and spoliation are more relevant.

PRACTICE HINT: There is a significant difference — and often overlooked —between the “entity” named as Plaintiff (or beneficiary in nonjudicial states) and the entity named or claimed to be a “servicer.”

In the context of this article, one should not assume that a mere request to produce is sufficient. The request to produce only has legal effect against, for example, U.S. Bank, N.A. if it is named as Plaintiff trustee in a judicial foreclosure or beneficiary trustee in a nonjudicial case. First, the request to U.S. Bank should be directed solely at records kept by U.S. Bank in its role of administering the affairs of a trust account in which there is a loan account receivable due from the homeowner. Second, the “servicer” should receive a subpoena duces tecum asking for the same records. All too often the “records” are “produced” by the “servicer” which is a response from a third party and not the claimant as plaintiff or beneficiary.

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: burden of pleading, BURDEN OF PROOF, discovery, Discovery -Subpoena, Eviction, evidence, foreclosure, foreclosure defenses, foreclosure mill, forensic investigation, Motion Practice and Discovery, Pleading, Presumptions, prima facie case | 3 Comments »

Stop Using the Labels: Homeowners Lose Foreclosure Cases When They Refer to the “Servicer”

Posted on December 27, 2021 by Neil Garfield

You need to challenge the status of the company claiming to be a servicer by finding out what functions they really perform.

I know I have contributed to the problem, but I think it’s time to stop using the labels that are promoted by the banks.

Companies that are claimed to be the “servicer”, by all accounts, do not perform any functions normally attributed to that label. This it is against the interests of the homeowner or the lawyer representing the homeowner to accept the use of the term unless there is foundation testimony as to the actual functions performed by the company rather than the presumptions arising from the label “servicer.”

*

The actual receipt and distribution of funds, and the bookkeeping and accounting therefor, is performed by third-party vendors (FINTECH) who have absolutely no contractual or other duties owed to the company named as the “servicer.” That makes the “report” presented in court as a “payment history” both fictional and pure hearsay that cannot be admitted into evidence — unless the homeowner waives that objection.

*

The FINTECH companies also have absolutely no contractual or other duty owed to the named claimant. And the named claimant (Plaintiff or beneficiary) does NOT receive any payment from either the “servicer” or the FINTECH companies — including the money proceeds of foreclosure sales. That is entirely fiction. AND that is why every attempt to obtain corroboration through QWR, DVL or legal discovery is stonewalled. There is no corroboration.

Each foreclosure produces money proceeds that go into the pocket of an investment bank as either general revenue or “return of capital” against the fictitious double-entry bookkeeping account. In plain language, the money is NEVER used to reduce a loan account because there is no loan account. That is why you can’t get the loan account even in discovery and even if you sue under the FDCPA. But that fact alone gives the homeowner the upper hand.

You need not understand or believe this presentation. But if you want to win your case, you need to assume that this is true and act accordingly.

By accepting the label of “servicer” you are also tacitly and unintentionally accepting the “payment history” as an exception to the hearsay rule and an acceptable substitution for the testimony and proffer of the records of the known and named claimant. Once you have done that, you have lost. You need to challenge the status of the company claiming to be a servicer by finding out what functions they really perform.

But the payment history is nothing of the sort. It is a report on a report prepared by an undisclosed FINTECH company from data that has been “massaged” as instructed by an investment bank. It is NOT a simple report of the condition of the loan account.

Want proof? Show me one “payment history” that contains the beginning entry starting the loan account and showing the current balance as owned by the named claimant. It doesn’t exist. Show me one payment history that shows disbursement of funds received from anyone to any creditors. It doesn’t exist.

So if there is no presentation of disbursements to creditors, how would the court ever accept the idea that the company received any money? How could the court ever assume that the company could account for the receipt of money it never actually received?

The answer is obvious even to people with accounting or legal knowledge. You would have no record of receiving money that was never received. And that is because nobody would enter any data in any record of any company saying that they personally received the payment as an employee of the company claiming to be the servicer. Making such an entry would be a lie and presenting it in court would be perjury.

The other part is the assumption that the company that is claimed to be the “servicer” is somehow working for the named claimant, or is the agent for the named claimant.

This is exactly the trap that the banks have set. This is sleight of hand maneuvering.

By distracting the homeowner and the attorney for the homeowner to the question of the authority of the servicer, the argument shifts away from whether the “servicer” is performing any of the normal duties attributed to the servicer and away from the issue of whether the existence of a trustee or trust is even relevant since the trust does not own the underlying obligation as required by UCC 9-203.

I write this primarily for the benefit of attorneys. Only an attorney will recognize the importance of these issues.

***

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: burden of persuasion, burden of pleading, BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure defenses, foreclosure mill, forensic investigation, investment banking, Motions, Pleading, Presumptions, prima facie case, Servicer, sham transactions, TRIAL OBJECTIONS | Leave a comment »

Why You Need to Perform Investigation of Real Facts in the Real World

Posted on December 22, 2021 by Neil Garfield

I state with great confidence that among those homeowners who perform and achieve a slam dunk win over the foreclosure lawyers, the great majority enjoy that victory because they did the investigation and hired a lawyer who knew what to do with the information (as opposed to slinging it at the judge and expecting the judge to make sense of it).

Question received from one of the readers of this blog: “I’m trying to understand how a house in NJ. Is alleged to be notarized in Florida and recorded by a company in Idaho (whose Name of course, is not even in business any longer).”

SImple answer — none of that happened. I don’t know your case but in all probability, Black Knight fabricated a false document on instructions from a central source controlled by an investment bank. An investigation will reveal whether that statement is applicable in your case. I am willing to bet $100 that it IS true.

CoreLogic and/or other vendors (probably affiliates of Black Knight) affixed the signature, the notary signature, the notary stamp, and where necessary for local recording rules the signatures of witnesses electronically using direct electronic signature or mechanical pen.

The name of the company or person was selected by an algorithm based on instructions from the same source. It does not matter that the company is not in business because inserting ANY name makes the document look like it is facially valid. But the document can be challenged as NOT being facially valid because ti is a matter of public record that the corporation’s charter expired, was dissolved or that the company went bankrupt.

The content of the instrument is false since it most probably states that it is an assignment or an allonge. The rule adopted by all states, and supported by centuries of precedent in statutes and case law, is that a transfer of the mortgage or deed of trust is ineffective (i.e. a “legal nullity”) unless the underlying obligation is also transferred from the same grantor to the same grantee. The fact that someone or some company is named as a transferee does not make them the status of a legal grantee.

Some people, like Chic, have gone to the trouble of investigating the musical chair scenario that emerges from the use of false or dead-end addresses for what appears to be major businesses, enterprises or even banks that are Federally or state-chartered.

They have discovered and taken pictures of the locations in which the companies were asserted to exist — although often not directly — by implication from return addresses. Nobody ever says that the letter is coming from the company on the letterhead or that there is any warranty or even assertion of title in such documents.

It is all implied so that the perpetrators can later claim plausible deniability, to wit: we didn’t do it. That was done by some outsource vendor of Joe’s Documents, LLC and we knew nothing about it. Joe has a recurring source of residual income because he has agreed to let his company name and address to be used even though the address is a loading docket licensed to a private investigator.

The moral of the story for homeowners is that unless you are in this for entertainment purposes only, you need to act on your suspicions and hire private investigators like Bill Paatalo to actually locate the signors and notaries, track down the supposed addresses, and confirm by fact — not opinion — that the document could not have executed by the party named as grantor and that the grantee was not a legal entity.

This isn’t divorce court where lawyers makeup facts and hurl accusations. This is a real court where the judge is bound by the evidence. Your opinion is not evidence.

But I state with great confidence that among those homeowners who perform and achieve a slam dunk win over the foreclosure lawyers, the great majority enjoy that victory because they did the investigation and hired a lawyer who knew what to do with the information (as opposed to slinging it at the judge and expecting the judge to make sense of it).

See below for an example of allegations that can be made after an effective investigation. Most people have neither time nor the skills necessary to perform such investigations. That is why you need a licensed private investigator to come up with real facts revealing the fake story used as part of a false national narrative with false labels on documents, persons, and business entities that may or may not even exist as registered business entities in any jurisdiction. Yes this is boring work but it is what usually makes the difference between winning and losing.

***

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CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.

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

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Here are a few examples of investigation that yielded some interesting results:

The purported “Ocwen Loan Servicing” address traces back to an industrial concrete-block windowless warehouse building with truck docks, of 14,233 sq. ft., internally a self-storage unit building operated by “Security Connections, Inc.” and crafted, as are all other “Ocwen” locations, as blind alleys intended to obfuscate and confuse, leading to dead-ends.

The true picture of 240 Technology Drive, Idaho Falls, showing an industrial warehouse, is incorporated herein:

The falsified and fraudulent papers crafted as purported “Assignments” and filed on the Stamford Land Records are and were designed by the actors for the purpose of obfuscation and slander of title, and contain inherent false statements such as the claim that Deutsche Bank maintains offices at “1661 Worthington Road, Suite 100, West Palm Beach, Florida,” when if act it does not, and never has.

William Erbey subsequently re-incorporated Ocwen Mortgage Servicing, Inc., his latest vehicle for mortgage fraud and abuse, in the British Virgin Islands, claiming a registration address of Waterfront Center, Suite A, 72 Kronprindsens Gade, PO Box 305304, St. Thomas VGB. That address comes back to the “Trident Trust Company,” a Virgin Islands “brass plate” corporation accommodation address provider, wherein a brass plate screwed onto the door is sufficient to establish corporate existence. The actual address used by Ocwen in its representations to the public and the courts sources back to a tourist souvenir knick-knack stall located at the foot of the cruise ship dock in the British Virgin Islands. The souvenir stall is currently boarded up.

The “588 Assignment” represents that Mortgage Electronic had a place of business at 3300 SW 34^th Avenue, Suite 101, Ocala, Florida. In reality, Mortgage Electronic did not have any business address at that location, and the representation was a falsity.

The signature undertaking on the “588 Assignment” represents that it was signed by one “Paige Helen” as Vice President of “Mortgage Electronic as Nominee for NetBank.” Despite this representation, the notarial undertaking declares that Paige Helen was in reality an employee of “IndyMac Bank, FSB.”

Filed under: burden of persuasion, burden of pleading, BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, evidence, expert witness, Fabrication of documents, foreclosure, foreclosure defenses, foreclosure mill, forensic investigation, Judicial notice, Pleading, Presumptions, prima facie case, Servicer, sham transactions, standing | Tagged: Black Knight, Core Logic | 3 Comments »

“Black Knight”: Banks Are Peddling A False National Narrative of Declining Foreclosures

Posted on December 7, 2021 by Neil Garfield

I’m busy today so I can’t publish my usual long analytical article. But one thing that is constantly staring at me is the fact that the national press and news releases are in basic conflict with local media. And the fact that local media is going out of business isn’t helping.

Black Knight is a company whose size and reputation is entirely based upon preparation, presentation, and use of false documents and information that were forged, robosigned, and back-dated. Those were the days when it was called Lenders Processing Services in which DOCX was used to produce the false documents. Lorraine Browne, President of DOCX took one for the team and was the only person in the entire 2008 crash who went to jail. Neither DOCX nor other divisions of Lender Processing Systems were ever retired.

In fact, Black Knight is now expanded in some sense because it operates as the front for lockbox and electronic payments made in the name of companies claiming to be servicers. Concealed from homeowners is the fact that those payments are never actually received by the company claiming to be a servicer nor disbursed by that company to anyone claiming to be a creditor.

It is all a ruse. There is no creditor because there is no loan account receivable (LAR). There is no loan account receivable because the investment banks are selling what would have been the LAR multiple times without crediting any LAR — hence, no claim, no creditor. But because all of that is confusing, consumers continue to pay on nonexistent accounts that do not in fact exist and were never intended to be maintained. They pay and they are victims of “enforcement” because of a false national narrative about securitization.

Here is the simple truth: there is no securitization of debt. And all claims regarding eh existence of the LAR. and authority to enforce, administer to collect money for the LAR are false. That is not an opinion. It is a fact under current law that nobody can legally collect on a debt that does not exist — even if the named debtor believes the false claim that the LAR exists.

The “Payment History” is almost always accepted as a substitute for a copy of the actual loan account receivable —which until the last 25 years has ALWAYS been a basic staple of anyone who wanted to get a foreclosure judgment or sale — even if it was uncontested. If you didn’t produce that, along with an affidavit or testimony from an officer of the actual creditor or lender, you could not get the judgment or the sale. I personally witnessed myself and many other lawyers going to court with part of the foreclosure file missing and being told that the motion for summary judgment was denied — without any appearance or opposition from the homeowner. (I didn’t always represent the consumer).

But is the consortium of financial technology companies (FINTECH) including Black Knight that produces a report that is labeled as a “Payment History” because it is the FINTECH companies working for the investment banks that process that data. The report is pure hearsay that is not admissible in court but because homeowners and lawyers fail to test the report, they fail to reveal the fact that the “servicer” never was party to any transaction that it would then enter as data on its own bank accounts, accounting ledgers and books of record. None of that happened.

So the report is admitted as an exception to the hearsay rule thus allowing companies like Black Knight to carry water for the investment banks who want to collect money from payments of homeowners or on the sale of their homes so they can pay out bonuses without any attempt to account for the proceeds as a reduction in any loan account.

So it is in that position that Black Knight became a central repository of data about any transactions that are falsely defined in the national narrative as mortgage loans. That data is at best questionable and obviously false when tested in litigation. And because Black Knight functions almost exclusively at the behest and is subject to the influence and control of investment banks who are book-running securitization schemes, it reports what they tell Black Knight to report.

So you get articles like this:

https://nationalmortgageprofessional.com/news/black-knight-foreclosure-activity-nears-pre-pandemic-low

But lawyers like myself have our phones ringing off the hook now that foreclosures are spiking. And local media outlets that are still in existence, are accurately reporting the sharp spikes in new foreclosures, new evictions, and declarations of default. Both political parties are idiots, believing that foreclosure is no longer an issue. Tell that to the people who are losing their homes to fake creditors who are merely seeking profit. It’s another case of politicians being completely out of touch with realities of events on the ground — because they are listening to sources of information that come ONLY from Wall Street.

To its credit, the Biden Administration is attempting through the new legislation to preserve local media which tends to report facts and actual events rather than the current trend in national media to posit possibilities and then spend all their time analyzing what those possibilities might mean if they ever happened. Most investigative journalism is dead, which is why things have gone so wrong in this country.

Fact check: current events are not talking heads in boxes on TV. They’re real things happening to real people. That is “news.” The rest is pure speculation for purposes of producing revenues from the entertainment value of that speculation. It is now the national pastime to accept such speculation as news. It isn’t.

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CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In the meanwhile you can order any of the following:

CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.

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

CLICK HERE TO ORDER CASE ANALYSIS

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

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: CORRUPTION, discovery, Discovery -Subpoena, evidence, expert witness, Fabrication of documents, foreclosure mill, forgery, hearsay, investment banking, legal standing, Presumptions, prima facie case, securities fraud, Servicer, sham transactions | 2 Comments »

Magna Bank, N.A. as Trustee for registered holders of certificates issued under the name of the Macandcheese Acquisition Trust, Inc. an inactive corporation, for a nonexistent trust, series 2022-XL-1

Posted on December 6, 2021 by Neil Garfield

So a friend of mine left her phone in my car. Here is what I wrote to her:

Thank you for leaving your phone in my possession, which as you know is 9/10s of the law. That means that even though you paid for it and you received ownership from the seller, I can now claim it as my property. So by possessing the phone I was able to issue and sell several certificates based upon the possible rental income I would receive from you for access to the phone you already own.

*

I told the buyers you had scheduled payments of $100 per month, even though you had neitehr signed nor even acknoweldged any agreeemtn to make the scheduled payments on the nonexistent obligaiton.

I told the investors that I would make quarterly payments to them equal to 5% of their investments in perpetuity. I will be able to make those payments as long as I am able to continue selling certificates either on your deal or other deals with other ignorant consumers. If you don’t make the payment I will have the option of withholding part or all of the payments I promised to the investors. If you do make payments on this nonexistent obligation, that will make it easier for me to pay bonuses to everyone involved in this scheme.

*

So far I have received $2500 from these investors and my salesmen are just getting started. I am returning the phone to you in exchange for a signed receipt that refers to a document that is referenced as describing the scheduled payments. If you don’t make the payment I will repossess the phone and get a judgment against you for the balance due under the lease, which is $15,000. If you wish to modify this obligation you will need to admit to a default and we might then offer a “modification” in which you agree that the deal is valid.

*

Servicing of this nonexistent account has been assigned to financial technology (FINTECH) companies who will communicate with you using the name of Joe’s Screw and Die Company (JSDC). The FINTECH companies will assert aqht JSDC is your new servicer ven thouhg it performs no functions.

*

The FINTECH companies will publish and send to account statements and payment histories under the letterhead of JSDC. Your telephone communications and correspondence will be forwarded to a call center or correspondence center operated by Black Knight Rising, Inc. who works for me.

*

If you ask any questions or if a legal action is initiated to collect on this nonexistent obligation the creditor will be named as Magna Bank, N.A. as Trustee for registered holders of certificates issued under the name of the Macandcheese Acquisition Trust, Inc. an inactive corporation, for a nonexistent trust, series 2022-XL-1.

*

And no, I will not reveal the identity of the holders of those certificates nor the content of the certificates. Not ever. But I will instruct lawyers to imply — but not directly state — that the action is brought on behalf of investors or a trust and that it doesn’t make any difference whihc one.

*

Despite the fact that you never signed any document that memorializes any agreement by you to these specific arrangements I assure you I can and will enforce the nonexistent obligation against you — because I can.

*

Reports concerning your credit status will be sent under cover of the name JSDC to the Credit Reporting Agencies. My name won’t be mentioned so if you ever prove that the report was false, it will be difficult if not impossible for you to attribute liability to me. You will get a judgment against JSDC which is a thinly capitalized entity designed to go bankrupt in the event that many people like you start winning in court.

*

Failure to make scheduled payments on this nonexistent obligation will result in increased expenses incurred by you for use of credit in the future in addition to loss of your phone, and a judgment against you that is presumptively valid once it is entered in any court record in a court of competent jurisdiction.

*

Should you choose to contest this claim you will most likely win — but only if you are willing to spend considerable time, money and energy in doing so, while negative credit reports are issued against you. Thus even though the claim is false and based upon illegal and possibly criminal premises, you might as well pay.

*

Although you might consider this arrangement to be theft, based upon coercion and intimidation, we call it free-market capitalism. Thanks to tens of millions of consumers just like you I now have a private jet, and palatial estates in 14 countries. I am also a very large contributor to philanthropic causes, and a prolofic collector of mastperpiece artworks — which gives me great credibility in the press, even though I am a common thief.

*

On a final note, you might ask whether you could or should be a participant in this scheme receiving some of the prodigious revenue from sales of certificates or even some revenue from other consumers like you. While we recognize that the entire scheme is dependent upon the existence of your phone and the receipt you sign to get it back, the answer is no, we will not share in the revenue.

*

Just to be clear, I am not your creditor. I neither own nor maintain any accounting record on which data entries are made at or near the time of any financial transction with you and neither does JSDC. However because anyone can sue for anything, I will continue to assert nonexistent authority to collect money from you.

*

As further clarification, when I have generated more than the stated lease balance of $15,000 you will neither be notified of that fact nor relieved of any pressure to continue paying. You will not be able to prove that the revenues generated exceeded any amount asserted as your obligation because there is no such record keeping track of that.

*

And in an abundance of caution let me clearly state that you have no debt or obligation owed to me or anyone else under this arrangement. Any payment you make is purely voluntary and without any impediment to your ability to access professional advice which you probably won’t use. What is wonderful for me is that even if you did go to a lawyer or other professional (except perhaps a diligent accountant) they most likely would not understand this deal even if they read this email. Such professionals might ask you questions like “well, you got the phone didn’t you?”

P.S. My friend won’t return my calls now.

Filed under: Fabrication of documents, foreclosure, foreclosure mill, investment banking, Investor, MODIFICATION, Mortgage, prima facie case, securities fraud, sham transactions, TRUST BENEFICIARIES | 3 Comments »

How Could This Not Be a Loan?

Posted on December 3, 2021 by Neil Garfield

if the investment bank paid the homeowner as an incentive payment rather than as a loan, then there is no debt any more than salary or wages can later be called a loan. The fact that the consumer/homeowner thought or even wished it were otherwise makes no diffeerence. If I pay you money and you think it is a loan but I paid you for services you rendered, the substance of the transction is “fee for services” — not a loan — and there is no legal or ethical or moral obligation to pay it back.

I think the one idea that sticks in the throat of nearly everyone is the idea that no money was loaned. That idea seems impossible and to many skeptics, it sounds like a snake-oil salesman trying to peddle what people want to hear. People know that they did really buy their home, and the majority of these transactions are refinancing, which means that the old “lender” got paid off, right?

First of all, let’s agree on at least one thing. Virtually all installment payment agreements are now subject to claims of “securitization.” This means that behind every transaction is an investment bank that is arranging payments, only where necessary, and who is receiving the proceeds of consumer payments plus all of the revenue and profits from the sale and training of unregulated securities.

If there is one thing missing from most articles analyzing consumer debt, it is the failure to recognize that a handful of investment banks are the center of all of those transactions and they all have reciprocal agreements. Those agreements are mostly in writing but difficult to obtain, and sometimes tacit. You don’t need to look any further than any pooling and servicing agreement to see the world’s largest banks all participating in the same venture. In prior years, this fact alone would’ve been sufficient for antitrust action.

So here is my effort at explaining it. There are several categories of transactions that occur with homeowners.

The homeowner is buying a new home from a developer or contractor.
The homeowner is buying a home from the existing homeowner.
The homeowner is buying a home from a party or business entity that asserts ownership after foreclosure on the previous homeowner.
The homeowner is refinancing the new home they purchased from a developer or contractor.
The homeowner is refinancing a home they bought from a prior homeowner.
The homeowner is refinancing a home they bought from a foreclosure buyer.
The homeowner refinances by entering into a forbearance agreement.
The homeowner refinances by entering into a modification agreement.
Securitization of data and attributes of homeowner’s promise to make scheduled payments — no relevant transaction because there was no sale of the underlying obligation, legal debt, note or mortgage (or deed of trust). Since law requires that sale for enforcement by successors, the foreclosure players fake the documents.

Let’s define our terms.

“Homeowner” means in this case someone who is looking to buy a home or who is looking to change their transaction.

“Refinance” means that the homeowner is a party to some transaction and/or documentation that changes the terms of the homeowner’s prior promise to make scheduled payments.

“Money source” means the investment bank that (a) borrowed money from a third party bank like Credit Suisse, (b) used the borrowed funds to make payments to or on behalf of the homeowner. (It pays back the loan to its lender (and co-underwriter of certificates) through sales of certificates to investors promising scheduled payments, without maturity, collateral, or a guarantee of payment.)

1. PURCHASE OF NEW HOME FROM DEVELOPER: generally speaking, this is the only transaction that is in substance but it appears to be in form. Money is actually paid to the developer.

The money trail for this transaction looks something like this: LENDER—>MONEY SOURCE/INVESTMENT BANK—>SUBSIDIARY OR CONTROLLED AFFILIATE OF MONEY SOURCE—>CLOSING AGENT—>DEVELOPER.
The paper trail (i.e. contracts) for this transaction looks something like this: MONEY SOURCE/INVESTMENT BANK—>AGGREGATOR (like Countrywide Home Loans)—>(a) Assignment and Assumption Agreement with Originators (like Quicken Loans) and (b) Indemnification Agreement with title insurers—>Mortgage Broker—>Mortgage salesman—>Homeowner execution of promise to pay and collateral for making scheduled payments to Originators.
Bottom Line: The homeowner is getting money, courtesy of an investment bank that is NOT intending to make a loan or be governed by any lending laws.
- The homeowner is making a promise to pay the originator who did not lend any money or make any payments to or on behalf of the homeowner.
- The only party identified as a lender is the originator who did not make a loan.
- The only party that arranged for payment disclaims any role of being a lender.
- The payment made on the homeowner’s behalf was an incentive payment designed to procure the signature of the homeowner on a note and mortgage (or deed of trust).
  - Legally since there was no lending intent by either the named “lender” or the Money Source, there is either no contract at all or no loan, since there was no meeting of the minds.
  - If the transaction is not rescinded the deal needs to be reformed with a court determining what incentive payment the homeowner should have received from the scheme to issue, sell and trade unregulated securities.
  - But if the homeowner tacitly or expressly asserts or agrees or admits it was a loan, then for all purposes in court, it will be treated as a loan not subject to reformation.

2. PURCHASE OF NEW HOME FROM PRIOR HOMEOWNER: generally speaking most of these transactions do not result in the payment of money to any prior lender. But the excess due to the seller is paid in the same way that money is paid where the homeowner purchases a home from a developer.

Most of such transactions are steered to originators and aggregators who represent the money source (investment bank) who was involved in the financial transaction with the prior homeowner.
Because the proceeds of the “new financing” or “purchase money mortgage” would be paid to the same investment bank, no money exchanges hands with respect to the “pay off” of the prior note and mortgage.
The confusing point for most lawyers and homeowners is that there is nothing illegal about a bank holding a prior mortgage lien. There is nothing illegal about the same bank doing business with the next owner. And there is nothing illegal about the bank not issuing a check to itself when the owners change.
- But that is not what is happening. “The bank” does not exist. The money source (investment bank) is not carrying the homeowner’s promise to pay scheduled payments as an asset and therefore is not “the bank.”
- For legal purposes, the test is simply whether or not the investment bank has suffered a loss as a result of the refusal or failure of the homeowner to make a scheduled payment.
- Or, phrased differently, the question from the beginning is whether or not the investment bank has the source of money ever excepted any risk of loss arising from the value of a loan account receivable.
- The answer to both questions is in the negative. In dozens of cases across the country, lawyers have been asked to identify the creditor and have admitted that they cannot do so.
- The only logical conclusion is that the transaction was never intended to be a loan (with the exception of the homeowner who did intend to get a loan, but did not receive it).
- The investment banks wanted the homeowner to believe they were getting a loan instead of an incentive payment to execute a promise to make scheduled payments. They did not want the homeowner to know that they were receiving an incentive payment. Disclosure of that fact is an absolute requirement under the law. If they had disclosed the true nature of the transaction, they would have been subject to bargaining and competition.

3. PURCHASE OF NEW HOME FROM FORECLOSURE BUYER: generally speaking, relative to any current financing arrangement, no money exchanges hands on these deals because and substance, the foreclosure buyer generally is receiving some sort of protection or indemnification from a title company that has been to issue insurance on a transaction that cannot pass the test of marketability or clear title — mostly because of the above factors. The anecdotal evidence on thousands of cases reviewed by me strongly indicates that nearly every foreclosure buyer is in substance a placeholder or nominee for the investment bank. By flipping the paper title, the foreclosure buyer receives a “profit” that is in substance a fee for legitimizing the foreclosure. That profit or fee is funded by the investment bank.

4. REFINANCING: generally speaking, all transactions that carry the label of “refinancing” are false transactions. Because securitization does not involve the purchase and sale of any underlying obligation, legal debt, note, or mortgage, each such transaction represents a new opportunity to create a new securitization infrastructure using the same transaction. Investment banks use every means of their disposal to encourage “refinancing” since it is the source of most of their new sales of certificates. The only money paid out is the excess, after fees, over the amount previously declared as “principal.” But this “principal” is not carried on the accounting ledger of any company or any person as an asset, nor is there any reserve for bad debt (simply because there is no risk of loss).

Forbearance is a form of “refinancing” because it accomplishes a number of things for the investment bank. First, obtain a signature from the homeowner that ratified or admits that the previous paperwork and financial transactions were all valid. Second, it essentially removes the placeholder originator from the paper trail. Third, it installs a new placeholder name and obtains consent from the homeowner. Fourth, it establishes a company claimed to be the servicer as the legitimate recipient of funds or proceeds from homeowner payments or the sale or foreclosure of the collateral (i.e., the home).
Modification is the same as forbearance: It introduces new parties under coercion. Homeowners sign these documents with total strangers mostly out of sheer panic. What they’re doing is waiving rights and creating tracks in the sand that are opposite to their financial interest and well-being.

Given all of that, many people ask me why I have consented or approved of a homeowner entering into a new agreement with players who are conducting an illegal scheme. The answer is simple and the investment bankers know the answer: they have the money to make a homeowner’s life miserable and they are not subjected to vigorous enforcement by regulators and law enforcement.

The entire burden of resisting this massive scheme of “Financial weapons of mass destruction” Falls on each homeowner, one at a time. It takes considerable time, money, and resources to resist.

So when the opportunity comes to settle the matter on favorable terms that reduce the payment, interest rate, and principal, and the homeowner lacks the will or the resources to resist, the only choice left is to settle with the perpetrators who put them in a bad position and who are cheating each homeowner out of their rightful share of the securitizations scheme.

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure defenses, foreclosure mill, investment banking, Investor, legal standing, Mortgage, originator, Pleading, Presumptions, prima facie case, quiet title, securities fraud, sham transactions, standing, Student Loans | 6 Comments »

Here is How Wall Street Smoke and Mirrors Works

Posted on December 1, 2021 by Neil Garfield

The idea that some company bearing the label of “servicer” is performing financial functions and accounting on behalf of an investor, a trust, a trustee is completely false from end to end. Such companies do nothing and were never intended to do anything except act as a buffer, in name only, to prevent liability attaching to investment banks who had entered the lending marketplace without any intent to enter the business of lending money for profit. But when the homeowner admits that such labels and narratives are true, the law of the case becomes the false narrative and labels.

As a matter of policy, prudence, and required risk management, none of the tier 1 companies are permitted to actually perform any financial service or accounting. They do not receive or disburse funds. Therefore they do not originate any data input regarding the receipt or disbursement of money.

First of all, you have to remember that the primary goal of investment banks is to hide the existence and function of one or more investment banks including but not limited to the “book runner.”. All of the entities that perform any financials service or accounting are entities that are contractually bound to intermediaries for the investment banks. (see Tier 2 below).

All of the entities whose names are used as smokescreens (I.e., placeholders or buffers) are not contractually bound to anyone and are the intended targets to be thrown under the bus when there is an unavoidable accusation of fabricated documents using false information used solely for the purpose of squeezing money or property out of homeowners. (see 50 state settlement for example). (see Tier 1 below).

But none of the companies performing financial services or accounting has any contractual relationship with the homeowner or the company that has been claimed to be the “servicer.” So the first erroneous assumption is that these functions, even if prepared by third-party vendors, are performed at the behest of the companies that are claimed to be “servicers.” Such companies are in charge of nothing and perform no functions.

Other than a few people on Wall Street, it simply has not occurred to most people that these functions are performed contractually and solely for the benefit of investment banks on Wall Street — who are never named in litigation by either side even though everything that has occurred has been under the sole discretion and instructions of the investment bank. And the investment bank contrary to popular belief in the false national narrative, are working only for themselves — not investors, trusts, or trustees. Their holy grail has been achieved — the sale of securities without ever having to give up the proceeds to the named issuer. But it is patently illegal and probably criminal.

The idea that some company bearing the label of “servicer” is performing financial functions and accounting on behalf of an investor, a trust, a trustee is completely false from end to end. Such companies do nothing and were never intended to do anything except act as a buffer, in name only, to prevent liability attaching to investment banks who had entered the lending marketplace without any intent to enter the business of lending money for profit. But when the homeowner admits that such labels and narratives are true, the law of the case becomes the false narrative and labels.

From the perspective of the investment banks, the money paid out under the label of “loans” was simply a cost of doing business — the business bang the sale of securities. The investment banks had no interest, no risk of loss or any other stake in the outcome of any transaction that was falsely labeled as a loan transaction.

The banks covered up their activities by increasing apparent complexity in a fairly simple transaction — i.e., one in which someone would debit their cash or other asset account and credit the loan account receivable of a borrower. Such accounting never took place in most instances because none of the parties involved in the falsely labeled “origination” was anything other than a placeholder name through which money could be delivered to a closing agent for disbursement to or on behalf of the homeowner or consumer.

The investment banks have used the placeholder name function at many levels each of which appears to have facial validity but lacks any connection to transactions in the real world. have spread out the functions.

There are two categories. The first category (Tier 1) is the one that you see. This is the one that reveals the name of a company that is claimed to have some sort of representative authority. In the real world, it has no such authority and it performs no function. The second category (Tier 2) consists of companies that actually perform functions, but whose existence is concealed from the homeowner and from the Court. As well as almost all of the securitization infrastructures, tier one should be tier 2.

As a matter of policy, prudence, and required risk management, none of the tier 1 companies are permitted to actually perform any financial service or accounting. They do not receive or disburse funds. Therefore they do not originate any data input regarding the receipt or disbursement of money.

The tier 2 companies that actually perform the services are contractually bound to the intermediaries for the investment banks. The tier 1 companies who allow their names to be used on the letterhead of correspondence and notices (and payment history reports) have no contractual relationship with the investment banks who are avoiding vicarious liability for the mini intended and unintended violations of lending and servicing laws.

Companies like CoreLogic, CoreLogic tax, Black Knight, FiServ, etc. are tier 2 businesses whose only allegiance, contractually and equitably, is to the investment banks. They are not controlled in any way by any tier 1 companies (including but not limited to companies claim to be a “servicer”). But they are controlled by the investment banks, who direct every action performed by every tier 2 company including law firms.

Tier 1 companies are merely names acting as placeholders for the investment banks who distance themselves from the business of collecting and communicating with homeowners and other consumers who consider themselves to be borrowers, even if they are no longer borrowers because their loan account receivable has been retired through the receipt of money by the originators —- all of them. Yes, it is like organized crime but in all honesty, so is almost every capitalist enterprise. The structure though is not what creates the crime, it is the intent and effect that makes it illegal either in violation of civil or criminal laws.

The purpose of all tier 1 companies is to create a mirage. The resulting illusion is filled in by individual presumptions that are not based on fact but rather based on apparent facial validity derived from fabricated documents containing false information — i.e., reporting or memorializing transactions that never occurred.

Real transactions are concealed and underreported even to regulatory agencies. Such transactions are never disclosed to consumers and homeowners. In this world of illusions, apparent fascial validity has been Weaponized to create the erroneous presumption that a trust account exists, under the supervision of a trust officer, for a brand-name bank.

The further presumption is that within that trust account is a loan Account receivable due from a particular homeowner. But in reality, there is no trust account, there is no trust officer, and there is no loan account receivable.

Because of the complexity required to conceal the illegality of the securitization scheme, no information is offered to any homeowner or regulator that would alert them to the fact that fictitious labels are being attached to nonexistent accounts. And most homeowners and regulators lack the resources to investigate the actual money trail.

So they rely upon the paper trail instead and that is the residence of moral hazard. You can say anything on paper, and it tends to be believed even if it would be met with skepticism if spoken aloud. The investment banks completely understand this dynamic and they have weaponized it to the point where they have established a national narrative with false labels resulting in the collection of illicit profits damaging homeowners and all taxpayers supporting federal, state, and local government.

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: boarding process, BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure, foreclosure defenses, foreclosure mill, investment banking, originator, Presumptions, prima facie case, Servicer, TRIAL OBJECTIONS | 1 Comment »

The fallacy of construing negative decisions as bad decisions for homeowners

Posted on November 29, 2021 by Neil Garfield

It’s not the job of courts to save litigants from their own admissions.

Here is a simple rule: if you admit the existence of the loan account receivable and you admit the rights of the servicer and the currently named claimant, you have no viable basis to challenge standing or enforceability. “Yes, but” doesn’t count in court.

Here is the other rule: if you challenge the existence of the loan account receivable and deny the rights of the servicer and the currently named claimant consistently, starting with the first notices and correspondence that you receive after the apparent “closing” the transaction, AND if you aggressively pursue statutory and discovery demands, your opposition will be unable to prove a case against you.

Amongst the people out there who would like to see better decisions for homeowners in the courts, there are those who continue to point to decisions against the homeowner at the trial court level, the intermediate appellate level, and even at the supreme court level. And in keeping with the high level of conspiracy thinking, many people assume that such decisions are the result of corruption, and then come to the conclusion that the government is corrupt.

I suggest taking a different view. The decisions in court are perfectly rational and proper if you accept the facts that have been recited. Given those facts, the courts had no choice but to rule against the homeowner.

I get in trouble for saying this, I think the problem is with the homeowners and not with the courts. And specifically, I think the problem is that the homeowners believe in the national narrative and labels used by the banks. Virtually all homeowners believe that they established a loan transaction merely because they applied for one.

Virtually all homeowners believe that notices of transfer of ownership and servicing are true. And virtually all homeowners will admit those facts in telephone conversations, correspondence and pleadings when they go to court.

Here is a simple rule: if you admit the existence of the loan account receivable and you admit the rights of the servicer and the currently named claimant, you have no viable basis to challenge standing or enforceability.

Here is an exchange I just had with a client and her lawyer regarding ar recent decision from the 3rd DCA in Florida. Yes, it is annoying, but if I was sitting on that court I would have ruled the same way. It’s not the job of courts to save litigants from their own admissions.

This case is another good example of starting off on the wrong foot and then compounding the error. The trial court and the appellate court were proceeding based upon an assumption of facts, none of which were true. But the homeowner had admitted those facts and the expert for the homeowner had reinforced the admission. It is virtually impossible that the named originator of the transaction was an originator or lender. It was merely a placeholder for the purpose of creating the illusion of a loan transaction. It did not provide any funds to the homeowner.

*

The initial recitation by the court that this was a straightforward foreclosure action is also completely wrong. But given the fact as they were recited by the appellate court, their decision was completely correct.

*

I obviously don’t know what happened in the trial court, but the judge signed an unusual order. This is frequently caused by the judge having a stack of proposed orders in front of him or her combined with the desire to get out of the office.

The bottom line is that none of these cases are “straightforward foreclosures.” In fact, when you scratch the surface, they are not foreclosures until the judge signs a final judgment of foreclosure.

*

At the beginning (i.e., at time of filing), they are mere attempts to abuse the legal process for profit, masquerading as some recognized cause of action but without any true facts or authentic, valid documents to back up their claim. They (the law firms) win most of the time because nobody has the courage to challenge the basic claim and thus they don’t use available discovery rights to defeat the ability of the claimant to prove a case. The main mistake, therefore, is in thinking that because the case has been pleaded in a satisfactory (or apparently satisfactory) manner, that the basic elements of the allegations are true., They are not.

*

And the law firms, proceeding under both plausible deniability and litigation immunity, or making allegations about the existence of a client and a claim that are completely false. The law firm in most cases (nearly all) has had no contact with the named plaintiff, beneficiary, or claimant and maintains no contractual relationship for representation in court. In fact, if you demand acknowledgment from an officer of the named claimant, you will never get it — because that’s not part of the deal for allowing their names to be used as the plaintiff, beneficiary, or claimant in a judicial, non-judicial, or bankruptcy proceeding.

*

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CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In the meanwhile you can order any of the following:

CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.

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

CLICK HERE TO ORDER CASE ANALYSIS

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

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: appeals, burden of persuasion, burden of pleading, BURDEN OF PROOF, discovery, Discovery -Subpoena, expert witness, Fabrication of documents, foreclosure defenses, foreclosure mill, forensic investigation, legal standing, originator, Pleading, prima facie case, sham transactions, TRIAL OBJECTIONS | 3 Comments »

Unilateral Mistake: Equitable Defenses Explained — How homeowners can get the upper hand and defend against enforcement of contract that is different from the one they knew or intended

Posted on November 10, 2021 by Neil Garfield

Homeowners are missing out on a huge opportunity for economic gain that balances the power between Wall Street and consumers.

Courts of equity are courts of conscience, which should not be shackled by rigid rules of procedure,^[51] and inherent in a court’s equitable powers is the authority to prevent injustice engendered by fraud, accident, or mistake.^{[52] Florida Bar Journal Novembert/December 2021 “Two, Three or Four Prongs? The Contractual Defense of Unilateral mistake in Florida”}

Second, there is a distinction between the equitable remedies of rescission and reformation that may further blur the lines. The Florida Supreme Court and a few others have ruled that reformation is not appropriate except for mutual mistake,^[53] but other Florida courts have extended it in the case of unilateral mistake where there is some form of inequitable conduct or inducement by the party seeking to avoid the defense.^[54

Rescission should return the parties to status quo ante; reformation calls for a court, looking at the parties’ intent, to “rewrite” the agreement. The latter is more extreme and against the longstanding principle of court hesitancy to rewrite contracts. The Florida courts have long endeavored to refrain from the rewriting of terms in contracts.^[55] Apparently, some bad act by the party seeking to enforce an agreement could under more extenuating circumstances, however, convince a court to rewrite a portion of an agreement.^[56]

the courts must take their arguments as presented. Our system is adversarial,^[58] and even in equity (with perhaps a bit more flexibility), courts are constrained to consider what parties present. It is not the courts’ role to re-craft a party’s arguments. Whether by choice of the parties or steerage by the courts, assertion of fraud in contracts cases is not undertaken lightly; other arguments devoid of accusations of fraud are more palatable. Additionally, to avoid having to address the fraud question, courts may entertain contractual defense arguments based on mutual mistake, unconscionability and possibly even undue influence (which has an inducement feature balanced with the level of susceptibility, but it is not outright “fraud”). Why find a party guilty of fraud, in a civil case, when a court could reach the same result based on a defense other than fraud? [e.s.]

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THIS ARTICLE APPLIES ONLY TO HOMEOWNER TRANSACTIONS IN WHICH THE SCHEDULED PAYMENTS ARE SUBJECT TO CLAIMS OF SECURITIZATION OF DEBT.

Matthew Marin and Paul Carrier wrote an important article featured in the recent Florida Bar Journal that provides a coherent explanation of contractual defenses that can be applied to contracts claimed to be loans and defenses against enforcement of the note or mortgage. In so doing they remind us of basic principles of what a court can and cannot do — including, I emphasize, the fact that a judge COULD think to himself or herself that an argument or claim or defense could be presented better does not establish the authority to do so. Judges are charged with considering the arguments presented — not the ones that could be presented. And the omission of the ones that could have been presented waives any later attempt to assert them.

This is not up for discussion or debate. It is a basic fact in litigation — one which homeowners have learned (or not) the hard way. Blaming a judge for not doing it is like blaming a dog for failure to fly. Homeowners in my opinion SHOULD be attacking most claims of authority to administer, collect or enforce scheduled payments, and there are plenty of grounds for doing so. In fact, there are good grounds for asking for money in addition to avoiding liability for issuing a promissory note without consideration — and If more homeowners did it the landscape would look totally different. The bottom line is hard for most to accept: the deal was not what it appeared to be.

The grounds for the attack should be largely equitable, but also include legal defenses —- they should be directed at authority (even if the contract was not rescinded, reformed, or set aside in whole or in part) and also on equitable grounds like a unilateral mistake, no meeting of the minds, etc. And as the article points out, validating what I have been saying, alleging fraud makes it far more difficult to plead or prove your point.

So here is the hardest part for homeowners and lawyers for homeowners to understand or even admit.

Nearly all notes and mortgages are issued because of unilateral mistake(s) on the part of the homeowner, induced by investment banks who continue to hide facts that are statutorily required to be disclosed, including but not limited to:

They do not know that they are doing business with an undisclosed investment bank doing business through a string of intermediaries.

They do not know that the supposed loan transaction is being underwritten for the purpose of justifying sale of unregulated securities and not for purposes of justifying a loan.

They do not know that the appraisal is being forced high to justify the contract price and the amount of the “loan”

They do not know that there is an absence of any real party in interest that has a risk of loss — the essential balancing element of all contracts

They do not know that the undisclosed revenue for the sale of securities vastly exceeds the amount of their transaction. At the moment they sign, homeowners have triggered revenue that erases all possible risk of loss and eliminates the need to establish a loan account receivable on the books of anyone.

They do not know that it is their signature on purported loan documents that creates the illusion of a loan transaction thus triggering the undisclosed sale of securities (without which the “loan” would never have offered, much less occurred.

This one fact triggers a series of claims on behalf of homeowners that does not require alleging fraud and keeps the burden of proof manageable (generally preponderance, rather than clear and convincing).

Homeowners were not borrowers. They were investors and participants in the sale of unregulated securities. They were entitled to know that and bargain for a fair share of the proceeds. The issuance of the note by the homeowner was based upon a universal error or mistake by all homeowners that they were purchasing a loan product which was not true.

In addition, if the transaction was deemed by a court of competent jurisdiction to be a true loan with a “true lender” as set forth in the regulations, then the undisclosed amount of revenue generated from the sale of securities arising from the closing of the transaction with the homeowner is owed back to the homeowner (in full) under the Federal Truth in Lending Act.

This element of foreclosure litigation has not been adequately pursued. In judicial states it is an affirmative defense that is not barred by the statute of limitations. In nonjudicial states, the application of the statute of limitations to such claims must be unconstitutional because of unequal treatment based upon choice of procedure. Homeowners should not be barred from using meritorious defenses that are available under the same state’s judicial foreclosure procedure.

They do not know that no loan account receivable is created or maintained — thus making modification or workouts rare or impossible

They do not know that there is nobody who is legally authorized to administer, collect or enforce the promise they made to make scheduled payments, to wit: the presumed authority to enforce arising from the alleged possession of the alleged original note leads to a false conclusion of fact. Such authority ultimate must come from the party who owns the underlying obligation as contained on their records as a loan account receivable. There is no such loan account receivable.

They do not know that the transaction is going to be subject to false claims of servicing

They do not know that the “servicing” is not performed by the named “servicer”

The bottom line is that homeowners did not get what they applied for and the investment banks did not pay money to the homeowner or on their behalf because they wanted to loan money. They wanted to sell securities and they needed homeowners to do it. The fact that a homeowner received money and used it to either buy a home or settle a previous financial transaction does NOT make it a loan. A loan is a label for a certain type of contract. There must be a meeting of the minds. In cases where there was no meeting of the minds, there is no contract. And if there was no meeting of the minds because one party to the alleged contract was hiding and did not disclose the real terms as required by laws, rules, and regulations concerning loan contracts make it is imperative that established existing remedies be allowed to homeowners.

PRACTICE NOTE: It seems that a lot of people don’t understand the judicial notice and the insignificance of documents uploaded to the sec.gov site. By filing a registration statement followed by a notice that no further filings are necessary, anyone can upload anything to sec.gov. In effect, it is nothing more than box.com, dropbox, etc.

Lawyers and others involved in false foreclosure claims often upload documents under that cloud and then download those documents from the sec.gov site such that the download shows the sec.gov header.

They then file a motion for judicial notice of the document of a government document even though it was never reviewed accepted, approved nor even a part of a required registration since the sale of “certificates” is not regulated as securities. It is not subject to judicial notice because the document was not an official record of any governmental agency and was never officially registered or recorded.

It does not establish the existence of a trust or the powers of a trustee. Therefore, it cannot serve as the foundation for the claims of the company claiming to be a servicer for that “trust.” It is worthless as to its existence (probably because it is incomplete in the text or exhibits) and it contains only statements of future intent — not a recital of anything that has occurred.

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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.

Yes you DO need a lawyer.

If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: burden of pleading, BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure, foreclosure defenses, foreclosure mill, investment banking, Judicial notice, MODIFICATION, Mortgage, Pleading, Presumptions, Servicer, sham transactions | Tagged: equitable defenses to foreclosure, reformation, rescission, unilateral mistake | 1 Comment »

Those letters from the lawyer for the “servicer”: PHH

Posted on November 2, 2021 by Neil Garfield

It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so — nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

In fact it is not true that PHH will receive any money. They won’t and they don’t. All payments are directed through lockbox contracts and FINTECH companies into accounts that may bear the name of a company claiming to be a serrvicer but which are owned by someone else.

This is why I keep successfully annoying opposing counsel about the payment history they wish to introduce as a business record exception to the rule against the use of hearsay evidence.

Since none of the data was entered by anyone employed by the company that is claimed to be the servicer, the payment history is neither a business record that is an exception to the rule against hearsay, nor an acceptable substitute for what has always been required: the accounting ledger showing the history (cradle to grave) of the loan account receivable. In fact, the payment history is not even a partially acceptable substitute for that ledger because it does not reflect payments to creditors.

PHH, Ocwen and Reverse Mortgage Solutions (among others) are all part of the same organization. In a recent dialogue between my client and the lawyer for PHH, he stated that payment to PHH will cause the lien to be released. This got me started thinking about the way he worded that. Normally the lawyer would write something like “Payment to PHH, as agent for XYZ Creditor, will satisfy the debt, note and mortgage. Upon receipt of such payment,m the lien will be released.”

Note that this was a representation from the lawyer not PHH and not any creditor. And the lawyer is protected by a form of immunity as long as he is not intentionally misstating the facts knowing that they’re false. If PHH said that, it could be the basis for a fraud action. It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

So this is what I said in a comment to the receipt of an email displaying the comments of the lawyer claiming to represent “somebody” which we presume is a claim to represent PHH which in turn is a claim to represent some company claiming to be a creditor merely because they have some paperwork — and not because they ever entered into any purchase and sale transaction in which they bought the underlying obligation, the legal debt, note or mortgage:

Of course, what is interesting is that the lawyer is saying that payment to PHH will cause the lien to be released. But it doesn’t say who will release it. It’s leaving the rest to your imagination. Any lien release under this scenario would be executed by a person working for a company that has no legal authority to sign it.

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The way it is set up, the person is authorized by the company he works for, but the company lacks the authority to authorize him to sign it. The company, in turn, claims authority by virtue of some contract or document in which the counterparty grants the company the authority. But the grantor also lacks authority.

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The idea here is to get you to take your eye off the ball. The ball is always the underlying obligation. It is the legal owner of the obligation (i.e., the one who purchased it for value) who has the sole authority to grant powers to anyone else over the administration, collection, and enforcement of the underlying obligation.

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It is only when you take your eye off the ball that these companies get away with claiming the status of “holder” of the note and owner of the mortgage. The holder of the note is defined as a party who has physical possession of the note (or the right to physical possession of the note) together with the authority to enforce it.

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These players have been successfully leveraging the idea that physical possession of the promissory note, or the right to physical possession of the promissory note is all that they need in order to establish the legal presumption that they have the authority to enforce it. That has never been true. But in the absence of a persistent and aggressive challenge from the alleged debtor, these parties have been able to steamroll over all weak objections.

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Further, leveraging one presumption into another, they have been successful in raising the additional presumption that transfer of the note to a “holder” is the legal equivalent of transferring legal title to the underlying obligation, thus satisfying the requirement for enforcement that is contained in Article 9–203 of the Uniform Commercial Code. None of that is true; but all of it seems to be true.

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The bottom line is that they know there is no loan account receivable and therefore no legal owner of the underlying obligation. They have done that intentionally for the benefit of the investment banks that set up this scheme. But it has not been difficult for Wall Street to convince the rest of the world that all of these transactions are, in substance, just what they appear to be. Getting the courts, law enforcement, regulators, and even homeowners and their lawyers to look beyond the appearance has been the principal impediment to defeating the scheme.

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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: CORRUPTION, discovery, Discovery -Subpoena, Fabrication of documents, foreclosure, foreclosure mill, hearsay, investment banking, legal standing, Presumptions, Servicer, sham transactions, TRIAL OBJECTIONS, trial strategy | Tagged: Ocwen, PHH, Reverse Mortgage Solutions | 9 Comments »

About that letter you receive from the company claimed to be your servicer: PennyMac

Posted on November 1, 2021 by Neil Garfield

People keep getting letters and they tend to treat the information as real simply because it is in writing. That is the nub of the Wall Street scheme — send out written communication and documents without regard to the truth and people will assume that the document or letter would not have been sent if at least someone didn’t think it was true.

SO I was recently sent a copy of a communication that was on PennyMac letterhead. People forget that you can create the letterhead of any company or person and pout it at the top of your document or letter. Any reader assumes that it was sent by that person or company even if it was not sent by or on behalf of that company. And servicers like PennyMac do not send out anything that could be legally binding because they’re just figureheads.

Practically all inconsistent and nonsensical notices and statements received under the “letterhead” of some company that has been claimed by someone to be a servicer can be easily understood — if you accept the premise that multiple FINTECH companies were involved in processing every function that one would normally associate with that of a company receiving and disbursing money.

So here is the comment I made upon receipt of that “letter.” (Calling it a letter may be misleading since it is the automatic production of a document that never included any human intervention, thought, decision, or authority.)

Here are the facts, to a virtual certainty:

This was not sent by PennyMac. It was created and mailed by a FINTECH company and the FINTECH company is not in contract with the alleged company that is claimed (by someone) to be a servicer. The FINTECH company is in contract with intermediaries for an investment bank.

Since it is unsigned there is no presumption that any human ever authorized the letter. The failure to at least robosign it or stamp it with a signature indicates or even raises the presumption that whoever sent it meant to preserve plausible deniability.

The response to this letter should be a demand (QWR or DVL) for a signed authorization from PennyMAc saying that the letter was authorized by PennyMac on behalf of whoever they are saying is the creditor. Treating the letter as real makes it real and makes it difficult to challenge authority later.

Any demand mailed to their address should include an inquiry as to the meaning of the small font code above the address.

If the letterhead contains a deadline, you should fire back a question about whether this is pursuant to an instruction from an identified creditor or, if there is a self imposed deadline by someone else. If it is PennyMac, please acknowledge that the deadline is imposed by PennyMac. If it is imposed by some third party, then please identify that party and their authority to impose any terms and conditions.

When the letter refers to forbearance or a prior forbearance agreement, an appropriate response would be a request for acknowledgment from an identified creditor as to the existence, terms and conditions of the forbearance agreement.

Failure to challenge the authority of the company claiming to be a “servicer” could later be construed as tacit consent to the authority of that company and the presumption that since they are the servicer and they do have the authority, they must be representing a creditor who has purchased the underlying obligation for value.

Even if the legal presumption is not raised, a factual assumption will arise in the mind of any judge when faced with these tracks in the sand. You always want your alternative narrative to run parallel to the tracks laid by the Foreclosure players.

References to any repayment plan, modification or deferred payment should be treated the same as any reference to forbearance.

The person that they have designated for you to contact is most likely a temporary employee or independent contractor in a call center. This person has no knowledge and no authority to do anything. The same is true for any person designated as being in charge of “escalation.”

As I have stated many times before, what is needed here is not legal argument alone. In order to defeat this scheme, Consumers who think they are subject to some loan agreement should be organizing themselves and raising money for the purpose of paying a team of private investigators. These investigators will reveal facts and circumstances that are inconsistent with the documents sent to the consumer. And the investigation will reveal the stone wall behind which the Foreclosure players are hiding.

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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.

Yes you DO need a lawyer.

If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Filed under: AMERICAN HOMEOWNERS COOPERATIVE, CORRUPTION, Discovery -Subpoena, Fabrication of documents, foreclosure, foreclosure mill, forensic investigation, investment banking, MODIFICATION, Presumptions, Servicer, sham transactions, TRIAL OBJECTIONS | Tagged: borrower, FINTECH, foreclosure defense, foreclosure offense, LOAN MODIFICATION, Pennymac | 2 Comments »

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(Once again, because of minor medical issues I decline to do the Neil Garfield Show. I offer this instead)

It is easy to get lost in the weeds. Don’t make up your own words or definitions because your definitions have no relevance to your case. Do hold the accusing side to their words and to the legally accepted definitions of those words as contained in statutes and cases.

But above all, start at the beginning — a rookie mistake made by nearly all young litigators and pro se litigants who skip over the gold to pick up a few pieces of copper. They exclaim “How could I lose, I have the copper!” And all the court wanted was the gold.

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The payment history is not the loan receivable account by definition and it is never presented as such. Failure to recognize this obscure fact often results in failure. But those who do understand it, raise their chances of a successful defense from unlikely to very likely.

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And here is the analysis of that statement:

PennyMac IS authorized, although not by anyone who is legally entitled to act as grantor in such authorization.

And notice that it says “accept” payments rather than “receive” payments. I can be authorized to accept your payment but unless I actually receive it my authorization, even if valid, is irrelevant and lacks foundation.

The “Payment History” proffered in the name of such a “servicer” for the payment is also irrelevant and lacks foundation. They’re merely producing a report generated by someone else.

In addition, the Payment History proffered in court is not an acceptable or legally admissible substitute for the ledger showing the loan account receivable (see below).

This Payment History from such a servicer is neither acceptable evidence or admissible evidence of payments nor of the balance of the loan account receivable owed to a specific creditor who paid value for the underlying obligation.

But the failure to make such objections and challenges invariably results in admission of the report into evidence, which in turn, establishes the existence of the loan account receivable, the right of the servicer to account for the payment history, establish the default etc.

And notice they don’t actually say what would ordinarily be said by either the loan officer as a lender or the officer in charge of administration, collection or enforcement of a loan at a servicer who receives, processes accounts for and disburses funds to creditors, i.e.,

“You have a loan account receivable arising from your transaction on the __ day of ___, 20__. XYZ has acquired all rights, title and interest to the underlying obligation. the legal debt, note and recorded mortgage.

By law, you owe XYZ that money.

We have been appointed to serve the interests of XYZ and empowered by XYZ to administer, collect and enforce the right to collect payments of interest and principal as provided by your promissory note and the recorded mortgage.

A copy of that authorization, signed by an authorized officer of XYZ is attached or has already been provided to you.

Attached is a copy of the XYZ ledger on which your loan account appears showing the balance, payments, and disbursements from inception to the present.”

YOU WILL HEVER, EVER SEE SUCH A LETTER OR STATEMENT NOW — BUT THIS WORDING IS TAKEN FROM HUNDREDS OF EXEMPLARS DATING BACK TO THE EARLY 1990s AND EARLIER.

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It’s not the job of courts to save litigants from their own admissions.

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Homeowners are missing out on a huge opportunity for economic gain that balances the power between Wall Street and consumers.

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“You have a loan account receivable arising from your transaction on the day of _, 20__. XYZ has acquired all rights, title and interest to the underlying obligation. the legal debt, note and recorded mortgage.

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