Does the REMIC Trust Exist?

In all jurisdictions, even if the trust has some assets, and therefore legal existence as a legal person, if the asset in question has not been entrusted to the trustee on behalf of beneficiaries, the existence of the trust is completely irrelevant. And all claims arising from the supposed existence of the trust are also irrelevant and lack Foundation.

I agree that the existence of the Trust might be a subject for debate.

However, the fact that a trust exists on paper does not mean that it exists relative to any loan or debt or note or mortgage.

In fact, the fact that it exists on paper does not mean that it exists at all in many states.

In those jurisdictions in which a trust is drafted on paper and recognized as a business entity, the trust is considered inchoate, which means sleeping. The failure to recognize this fact has led to the failure of many family trusts and the payment of high taxes.

In all jurisdictions a trust that does not have any assets, liabilities, income, expenses or business is not treated as a legal entity.

In all jurisdictions, even if the trust has some assets, and therefore legal existence as a legal person, if the asset in question has not been entrusted to the trustee on behalf of beneficiaries, the existence of the trust is completely irrelevant. And all claims arising from the supposed existence of the trust are also irrelevant and lack Foundation.

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An asset cannot be entrusted to the trust or trustee unless title to the asset has been conveyed to the trustee to hold in trust according to the terms of the trust agreement. And there can be no conveyance from someone who doesn’t own the asset. The only way you get to own a debt is payment of consideration to someone who paid consideration for the asset. That is the law and it is not up for debate.
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It is the payment of consideration that determines ownership of an asset or debt or note or mortgage. 
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Note that the PSA  often cited as the trust agreement often is not the trust agreement and that even if it says it is the trust agreement there is another instrument in which the named trustee acknowledges that its purpose is to receive bare legal title to security instruments and notes on behalf of the investment bank who often also serves as Master servicer. I have never seen such a conveyance to the trust or trustee from anyone who owned the debt note or mortgage.
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And without conveying the debt, there can be no conveyance of the mortgage. therefore all assignments (without a concurrent sale and purchase of the debt from someone who owned it) avoid.
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But if you don’t raise this issue you might waive it. and by waiving it you are giving a windfall to the participants in a business venture that has the title of a foreclosure action. That business venture os for profit and has nothing to do with recovering losses from an unpaid loan or debt.

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This is important because when the Foreclosure Mills pursue foreclosure they have only one witness. The witness is a robo witness who is employed as an employee or independent contractor of a self-proclaimed servicer. the witness provides testimony that the records introduced by the servicer are the records for the trust.
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This testimony is either direct testimony or it raises the inference or presumption that the records are the records of the trust, because the servicer is supposedly working for the trust. But if the trust has nothing to do with the “loan,” then the servicer is working for an entity that has no legal relationship with the debt note or mortgage.
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That is the point at which the defense and raised a motion to strike, once it has been established that this fact pattern is the only one before the court. Assuming defense Counsel has raised the appropriate objections along the way, the record submitted by the self-proclaimed servicer should be stricken from the record as not being the records of a creditor. The case collapses because no evidence is legally before the court.
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Even if the servicer was actually collecting payments or actually doing anything, which is clearly debatable since most of these activities are probably actually conducted by Black Knight, the appearance of the servicer would not be the appearance of the Creditor, who is therefore not the named claimant or plaintiff.
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The servicer becomes a witness at best and not a very credible one. If discovery has been conducted properly, the defense can clearly raise the inference that the servicer has an interest in the outcome of the litigation. This means that the attempt to get the servicer’s records into evidence as an exception to the hearsay rule can be defeated. This is especially true if the servicer is not actually processing any business transactions. This dovetails with the evidence that the lockbox system is actually controlled by Black Knight.
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And THAT is important because it undercuts the claim of a “boarding process” which in most cases has never existed. It is only through the fictitious boarding process that the records of prior self–proclaimed servicers are able to come into evidence. The truth is that all of those records are mere projections and estimates and the foreclosure mills depend upon the failure of the homeowner and their counsel to actually compute whether the records are even true.
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One last comment is that one of the big failures in foreclosure defense is the failure to question who is receiving payments from the self-proclaimed servicer. An inquiry into this subject would reveal that the servicer is not receiving any payments and is not making any payments to anyone else. This would undercut the foundation for the inference or presumption that the self-proclaimed servicer is actually performing servicer functions.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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Moratoriums Extended: That Doesn’t Mean You Won’t Be Out On the Street Or Living With Relatives

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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BETA TEST — DISCOVERY SUPPORT

Discovery

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

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

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

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

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

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

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

BEWARE: MORATORIUM ON FORECLOSURES MAY NOT STOP SALES OF THE PROPERTY

In a nutshell, moratoriums will do very little for homeowners or the courts. First unless a specific moratorium order states that it bars sales and evictions it is only the foreclosure action that is temporarily suspended. At some point in the near future, homelessness will spike because of a new tidal wave of foreclosures.

Second a moratorium does nothing to forgive payments. So when the moratorium expires, all the payments are due unless you ask for and receive some sort of forbearance agreement from servicers (who probably don’t have any authority despite all appearances to the contrary).

Third, don’t rely upon your own interpretation of what you read on the Internet. There is no substitute of a three year legal education and law degree and there is no substitute for decades of experience in and out of the courtroom.

Fourth, DO use this time to prepare for a confrontation with the banks and companies claiming to be servicers. Do not admit to anything —even the existence of your obligation even if that makes you feel uncomfortable.

Fifth start the administrative process by sending out a Qualified Written Request under RESPA and a Debt validation Letter under FDCPA. But stop thinking you know how to do that. Overbroad generalizations and conclusions are a perfect excuse not to answer you or evade your questions.

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

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

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

Why Homeowners Lose Their Homes to Crooked Banks

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

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

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

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

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

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

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

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

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

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

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

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In the meanwhile you can order any of the following:
*
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*
*
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*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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Please visit www.lendinglies.com for more information.

Magic Bullet? Maybe this: the foreclosure “team” are all witnesses, not claimants

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

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

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How to Challenge The Credibility of Documents Offered to Support Foreclosure

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

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

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

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

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

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

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

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

see RobosigningAdministrativeOrder

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. EVEN THOSE THAT PRESENT THE DEFENSES PROPERLY LOSE, AT LEAST AT THE TRIAL COURT LEVEL, AT LEAST 1/3 OF THE TIME. IN ADDITION IT IS NOT A SHORT PROCESS IF YOU PREVAIL. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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Who Can Foreclose?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TILA Claims Can be Raised in Recoupment – Defensively

As Russ Baldwin and other lawyers have pointed out, borrowers can raise and use TILA violations and maybe FDCPA violations defensively even if they are otherwise barred as affirmative claims. The way it works is simple — the affirmative defense of recoupment for violations of statute, if proven, result in an offset to the amount demanded by the opposing party up to the amount of the Plaintiff’s claim (i.e., the amount claimed as owed).

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In nonjudicial states, there is a serious constitutional question because it is only in states requiring judicial foreclosure that you can file an affirmative defense. It is in the application of the nonjudicial statutes that you get an unconstitutional result. A borrower should be able to say that he or she has affirmative defenses to the claim for foreclosure and that therefore the case must be transferred to a judicial foreclosure. But so far, that isn’t the case. And one day some smart constitutional lawyer is going to make new law.

But in the meantime the high number of TILA and FDCPA violations could go a long way toward decreasing and even negating the final award to the claimant even if the court presumes ownership and control over the debt, note and mortgage. My own experience is that the foreclosure mills start throwing out various settlement offers as soon as FDCPA is raised and probably would so if TILA violations were raised defensively.

see 2006 opinion In Re Sadie Faust https://www.leagle.com/decision/2006447353br941440

However, while the applicable statute of limitations may preclude Debtor from asserting TILA violations affirmatively, it does not affect her right to assert them defensively, i.e., by recoupment. See In re Ross, 338 B.R. 266, 269 n. 9 (Bankr. E.D.Pa.2006). And it is recoupment which the Amended Complaint specifically seeks. Amended Complaint, p. 4, WHEREFORE clause. “Recoupment is a common law contract doctrine that allows `countervailing claims, which otherwise could not have been asserted together to be raised in a case based upon any one of them.'” Integra Bank/Pittsburgh v. Freeman, 839 F.Supp. 326, 330 (E.D.Pa.1993), (citing Lee v. Schweiker, 739 F.2d 870 (3d Cir.1984)). Unlike setoff, recoupment “lessens or defeats any recovery by the plaintiff.” Algrant v. Evergreen Valley Nurseries L.P., 126 F.3d 178, 184 (3d Cir.1997) (quoting Household Consumer Discount Co. v. Vespaziani, 490 Pa. 209, 219, 415 A.2d 689, 694 (1980)). A party may assert recoupment as a defense after a statute of limitations period has lapsed. Beach v. Ocwen Fed. Bank 523 U.S. 410, 417-418, 118 S.Ct. 1408, 1412, 140 L.Ed.2d 566 (1998). The defense must be related to the nature of the demand made by the other party, that is, it must arise from the same contractual transaction. Algrant, 126 F.3d at 184.

In this case, the TILA claims arise out of the mortgage loan. It is alleged that the lender failed to disclose certain finance charges and the “high cost” of the mortgage loan. Amended Complaint, ¶¶ 22-24. Although otherwise tardy, such claims may nevertheless be raised via recoupment.

Also see Stake Center v Logix https://www.govinfo.gov/content/pkg/USCOURTS-utd-2_13-cv-01090/pdf/USCOURTS-utd-2_13-cv-01090-0.pdf

I frankly don’t know whether or not setoff claims might be barred by the statute of limitations. I can see court doctrine going either way. But on recoupment, the defense is based on the exact same transaction as the one in the complaint. So on that basis TILA claims would not be barred but FDCPA claims could be barred if the statutory period has expired. TILA and foreclosure arise from origination of the loan. FDCPA arises in collection often by a third party. So it could be that FDCPA would be setoff whereas TILA would be recoupment.

Although “[s]ome jurisdictions have dissolved the distinction between setoff [and] recoupment . . . for pleading purposes,”9 the concepts are nonetheless substantively distinct. “[A] setoff, as distinguished from a recoupment . . . ar[i]se[s] from different transactions, or occurrences, between the same parties.”10 Recoupment “describe[s] a claim that defendant could assert against plaintiff only if it arose from the same transaction as plaintiff’s claim.”11 The breach-of-contract counterclaim Defendant seeks to assert against Plaintiff arises from the same transaction or occurrence that gave rise to the claims Plaintiff asserted in its Complaint. As such, Defendant’s affirmative defense of setoff is not duplicative of its proposed breach-of-contract counterclaim. Moreover, even if the Court were to construe Defendant’s affirmative defense of setoff as an affirmative defense for recoupment, Defendant’s proposed counterclaim seeks relief in excess of the damages that would be available under a recoupment defense, including attorney fees, costs, and equitable rescission. Based on the foregoing, the Court finds that amending the Answer to include Defendant’s breach-of-contract counterclaim will serve to maximize the parties’ opportunity to have their dispute decided on the merits and will not prejudice Plaintiff’s ability to prepare a defense.

Investors Were Not Injured By Non Payment from Homeowners. They Were Injured by Non Payment from Investment Banks

The trap door is thinking that investors were hurt by borrowers failing to make payments when in fact they were injured by brokerage companies not paying them regardless of how much money was being received and created. This trap door inevitably leads one into thinking that the money proceeds from a forced sale of property in foreclosure are being paid to investors. That is just not true.

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

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Exchange between me and fairly knowledgeable client:

Client: “But if investors put up the money then they would be the injured party if borrowers don’t pay, or at least if things were normal.”

From me:

Incorrect. Investors were injured by  the failure of brokerage firms to make payments to them that were purely optional. Investors were not injured by failure of borrowers to pay their mortgage payments as defined in the promissory note.

At the option of the investment bank, the investors who paid value for the certificates issued by the investment bank, continue to receive payments. Those payments come from a reserve pool of money funded entirely by the investors initial purchase of certificates (but they are labeled “Servicer advances”).

You are falling through the trap door that the banks and their lawyers have created. Investors did not put up money to purchase your loan or acquire it or originate your loan. They had no legal part in that unless a judge were to enter an order stating that while the form of the transaction says they had nothing to do with your loan, the investors were nonetheless substantively the “lenders.” The banks and the investors would argue against that since it would make investors liable for lending and servicing violations.

You are presuming something that the banks want you to presume. The truth is that the investors were told that they would be paid by the brokerage firm that set up the plan of what they called “securitization.”

The promise received by investors was from the brokerage firm not the borrower. The money on deposit with the brokerage firm was used to originate or acquire loans as a cost of doing business, to wit: the business of issuing and trading in derivative securities to which neither the investors nor “borrowers” were parties and therefore received no compensation despite the fact that without them none of those trades could have taken place.

The promise (certificate or mortgage bond) was issued in the name of a “trust” that at best was inchoate” under law (i.e., “sleeping”). The trust name was merely a business name under which the brokerage firm was doing business. The promise was not secured by any interest in the debt, note or mortgage on any loan. In fact, at the time of investment there were no loans in any portfolio that were the subject of the investment. There was a promise to aggregate such a portfolio and the list of loans attached to the prospectus is subject to the disclaimer that it is not the real list but rather an example of the kind of data the investors will see when the offering of certificates is complete.

The certificates themselves do not convey and right, title or interest to the debt, note or mortgage on any loan. The investors merely hold an unsecured promise to pay where the promissor is the brokerage firm (Investment bank) and the amount of payments to be received by investors are indexed on the data for an aggregate of loans; but such payments are entirely dependent upon the sole discretion of the investment bank (Brokerage firm) and the performance of the index — i.e., the performance of borrowers.

Investors thus receive money as long as the investment bank wants them to receive money regardless of actual performance of loans. The non performance of borrowers represents an excuse for the investment bank to stop paying the entire amount of their promise, if the managers of the investment bank so choose.

But since the investment bank (brokerage firm) was using money deposited on account the net result is that the investors paid value for the origination or acquisition of the debt but never got to own it under current law.

And the investment bank briefly became the “owner” of the debt without having actually paid for it, and then created a “sale” at its trading desk in which the loans were “sold” to the “trust” at an enormous premium (second tier yield spread premium) from the amount that was actually loaned to borrowers at much higher interest rates than the amount demanded by the investors. 

Bottom Line: Under current law in all jurisdictions nobody qualifies as the owner of the debt by reason of having paid for it because those two functions were split by the investment bank.

The value was paid by investors who did not receive ownership of the debt. The ownership of the debt as in the hands of the brokerage firm that started the securitization scheme and then transferred to itself using the name of the fictional trust. Hence the brokerage firm, directly or indirectly continued to “own” the debt without having actually paid for it. This is legally impossible under current law.

Under current law, nobody can claim to own or enforce a debt without having paid value for it. A transfer of rights to a mortgage is a legal nullity unless there is a concurrent payment of value for the debt. The only possible claimant in a court of equity is the investment bank, but they continue to hide behind multiple layers of sham conduits who actually have no contractual or other relationship with the investment bank. All such “securitized” loans are therefore orphans under current law where the debt, note and mortgage cannot be legally enforced.

The only way they have been enforced has the acceptance by the courts of erroneous presumptions that effectively reconstitute the debt, note and mortgage out of the prior transactions that split it all up. This produced the opportunity for profits that were far in excess of the loan itself which was viewed by the investment bank as simply a cost of doing business rather than an actual loan. Besides violating current law under the Uniform Commercial Code it also violates public policy as explicitly enunciated under the Federal Truth in Lending Act and public policy stated in various state laws prohibiting deceptive lending and servicing practices.

Those excessive profits should, in my opinion, be the subject of reallocation that includes the investors and borrowers without whom those profits could not exist. These are the actions for disgorgement and recoupment to which I have referred elsewhere on this blog. But in order to have real teeth I believe it is necessary to join the investment banks who had a role in the claimed “securitization.”

In affirmative defenses you can name a third party but you must express the defense as something for which the actual named claimant is vicariously accountable. Otherwise you need to file a counterclaim, the downside of which is that many such claims are barred by the statute of limitations whereas affirmative defenses are not usually subject to the statute of limitations.

The reason you can’t get a straight answer to discovery is that ownership and payment have been split between two entirely different parties. Yet current law demands that the enforcing party be (a) the owner of the debt, note and mortgage and (b) the party who paid value for the loan. In most situations involving claims of securitization that requirement cannot and is not meant to be fulfilled.

Clearly  changes in the law are required to allow for securitizations as practiced. But in order to do that the laws regarding disclosures to investors and borrowers must get far more specific and rigorous so that freer market forces can apply. With transparency market corrections for excessive or even unconscionable transactions are possible — allowing both borrowers and investors to bargain for a share of the bounty created by securitization arising from the investment of investors and borrowers.

Current law supports disgorgement of such profits because they were not disclosed. But current law fails to identify such “trading profits” as arising from the the actual transaction with investors, on one hand, and the borrowers on the other hand. This might be accomplished in the courts.

But a far better alternative is to level the playing field with clearly worded statutes that prevent what had been merely intermediaries from draining of money and other value from the only two real parties in interest as defined by both the single transaction doctrine and the step transaction doctrine.

Foreclosure Defense: To BKR or not to BKR, here are the issues in Bankruptcy

The bottom line is that Chapter 7, 11, or 13 bankruptcy can be effective tolls in defending against unlawful foreclosures, but hey are not magic bullets. Like all legal procedures attempting to navigate them without a licensed legal professional who is a known quantity in Bankruptcy Court, is at the very least hazardous.

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

I have a client in the service of our country for whom I am rendering services with minimal charges. He asks me now about filing a bankruptcy petition. LIke all litigation strategies contesting unlawful foreclosures, success really depends upon either a successful discovery strategy, a successful cross examination of the robo witness, or both. Here is what I wrote to him:

First I need to coordinate with your BKR attorney. Make absolutely certain that you put nothing on any of your schedules that could be construed as admitting that  there is a valid secured lien in favor of anyone. Second, you might not need to file a lawsuit, because they will probably file a proof of claim — and you can object to the proof of claim. We often trip them up exactly there. If they don’t file a proof of claim (theoretically they are are not required to do so if they claim to be a secured creditor) you can file one for them in which you state that nothing is owed and there is no lien in favor of the named creditor.

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But if your schedules are done correctly (contrary to virtually all software used by BKR attorneys) they will be forced to file a proof of claim, because you will be listing the house as an asset that is collateral for a loan, if it still exists, that may be owned by John Doe.
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They might also file a motion to lift stay (MLS). That gets tricky because the threshold on such a motion is whether there is ANY color of a claim that could be pursued in the state courts or by nonjudicial foreclosure and subsequent possession. Assuming we are right that the current claimant has no claim, the lawyers and/or servicers will produce fake documents that are facially valid, even though they are totally fake.
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In most instances the facially valid documents are taken as sufficient color of title or claim such that the stay is lifted. While this is often treated by both attorneys and judges as a judgment on the merits, it is not. It is merely a determination by the bankruptcy court that in the interest of judicial economy and the bankruptcy estate, the matter should be resolved under state law, rather than Federal bankruptcy law.
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Depending upon how the wind is blowing, you can file a lawsuit. You can do this in one of three ways: (1) an adversary lawsuit in the bankruptcy court seeking declaratory, injunctive or supplemental relief, (2) a collateral action in state court or (3) a collateral action in Federal court.
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The key to any of this is getting discovery. First you serve interrogatories, requests to produce and requests for admissions directed at who owns the debt by reason of having paid for it. The added implied component is that they paid a party who owned the debt by reason of having paid for it. And the further implied element is that the claimant paid value for THE debt not just any debt, such as that arising solely from the note itself which may or may not be evidence of the debt.
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Then you file a motion to compel if they don’t answer or object. That is standard fare for the foreclosure mills. If they do have a confirmable money trail you are most likely going to lose, so if you get to that point, I think it would be wise to settle. While there have been some judges who simply won’t give anything to homeowners and who think that all homeowners in foreclosure are deadbeats, my experience is that the overwhelming majority of judges will grant an order to compel answers to the discovery propounded to the claimant.
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The big mistake made by pro se litigants is that they snatch defeat from the jaws of victory by failing to file a motion to compel and then failing to file a motion for sanction seeking to strike the pleadings and enter judgment for the homeowner. the plain simple fact is that in most cases the entire foreclosure case rests upon a paper trail that diverges from the money trail. If you are successful, at a minimum, you will be undermining the prima facie case that the claimant is pursuing foreclosure for restitution of an unpaid debt owed to the claimant — and you will win at least 65% of the time (based upon my experience).
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The reason for the high percentage of cases in which the foreclosure mills lose the case is simply that they don’t have a real client, a real claim or a real claimant. Their entire case is completely dependent upon presumptions arising from the facially validity of fake documents.
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As I have seen repeatedly, possession of the note is by the law firm and the law firm is naming a claimant as client with whom they have had no contact nor any retainer agreement. It is all based upon plausible deniability of everything blows up. And the lawyers under current construction of litigation privilege seem to have total immunity for pushing a revenue scheme that includes the law firm.

The danger of submitting a hardship letter. See a lawyer!!!

It is strongly advised by most attorneys that when submitting any statement or reply to any company posing as a mortgage servicer or lender that where it is appropropriate to do so you should state that you are making the statement for purposes of compromise and settlement only and not for use in court, trial or any other legal proceeding.

Otherwise what you say can and no doubt will be used against you in a court of law as admissions against interest which tend to be given great weight in any contested proceeding or trial.

Don’t admit, acknowledge or assume anything unless you absolutely know something is a fact. Even then, admitting it or acknowledging it without protecting yourself could lead to your statement being used against you.

For example, “Yes I stopped paying because ….”. Yes you were paying and yes you stopped BUT….

Such a statement implies that the receiving party was entitled to collect money from you in the first place. Do you really know this to be a fact? Are an expert is the securitization of debt or the sale of loans into the secondary market? Aren’t you relying on representations made to you by the same party who is demanding payment? 

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

Submitting a hardship statement will almost certainly lead you to make damaging admissions. It’s like unprotected sex — a lot of things could go wrong. The only way to protect yourself against that is by either not submitting anything or by submitting a statement under cover of “for Settlement and Compromise Only.”

In addition, it is highly unlikely that your hardship statement will result in any remedy or relief since the great majority of such requests are denied — by parties who had no right to even receive them, much less process them, in the first place. Statements like “investor rejected” are pure fabrications, lies. No investor is ever contacted nor do they care because they are not counting on your payment. Investors are counting on the promise of a stockbroker (investment bank) to make the payments, which they continue to receive even if you stop paying.

Stop thinking you know what is going on. Stop believing anything that is said or written to you. By suspending your belief you are far more likely to gain traction than by admitting that anyone has a right to collect, process or enforce any loans. they probably don’t have any financial interest nor any rights. But they will say otherwise because if they are successful whatever they get will be used as revenue and not to pay down your debt.

Any modification or other agreement to which you affix your signature will undoubtedly contain representations or implied representations that are false. Thus when you sign the agreement and acknowledge its contents you are admitting that the representations are true even though they are false.

So for example if you execute an agreement with Ocwen you are either directly or indirectly agreeing that it is Ocwen Loan Servicing with whom you are doing business despite the fact that they are not a lender and never paid a dime for your loan. Your signature is at least a tacit admission that either Ocwen will be treated as a lender or as an authorized representative of the owner of the debt who paid value for your debt. In fact, most of the time they have no such ownership or authorization.

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The solicitation of a hardship statement is a ruse. It gets you to say you made payments, admit that you owe them, admit that the payments are owed to the company receiving the hardship statement, admit that you are in breach, admit that you are in default, admitting that the receiving company has the authority to grant or deny or loan modification request. In most cases none of those things are true. But they become true if you admit them.
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But one of the objectives of laws and courts who enforce them is to create finality to any issue that comes up. Once you admit something you can’t say it isn’t so unless you give a really good explanation  about why you admitted a fact that was in error and how that admission is somehow the fault of your adversary.
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You probably will need to deliver a persuasive argument that shows how reversing your prior error will not impede justice. But it will impede justice because you’re forcing the courts to revisit an issue that was legally settled when you made your admissions.
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Also a hardship statement will often concede that you can’t pay. That alone may be reason to deny your request for modification or any other relief. It is all a scam. 

Update on MERS

Just assume that everything is a fiction and none of it is real. Then set out to create the inference against the use of key legal presumptions necessary for the foreclosure mill to establish a prima facie case. Those presumptions lead to conclusions that are contrary to facts in the real world.

The answer is always the same. MERS is a data storage  company that has no ownership of the data, or any documents that contain references to data, events, payments, assets or liabilities. The MERS database in intentionally unsecured — anyone can get access with a login and password which are easy to obtain.

The first reason for the looseness of data entry, maintenance and reporting is that the only real purpose for MERS is foreclosure. It is not used by anyone for any other purpose.  The second reason for the looseness of data handling is that even its members and users know that it is not admissible in court. As far as I know, nobody has ever tried to foreclose using data from MERS.

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

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
MERS. it is merely a naked nominee. In some states it is banned. The holder of a mortgage or the holder of a beneficial interest in a deed of trust is required to be the owner of the debt, which is somebody who has paid value for the debt. Check state law.
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But the assignment from MERS has more problems than that. MERS is basically an agent. The principal is defined as the party who has been labeled as the “lender.”
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The designation of MERS usually includes “its successors and assigns.”
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That is the place where the Foreclosure Mills and the banks try to stuff in third parties who have no connection with the loan. Since MERS is merely a naked nominee, the only party that could issue instructions to MERS is the “lender” or its successors and assigns.
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Why would they do that? Revenue! The foreclosure process in most instances is a revenue scheme and has no relation to any plan, scheme or process by which the result is restitution for an unpaid debt.
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In most cases, by  the time the foreclosure process is started, the “lender” is dead and nobody has acquired its assets, liabilities or  business. There is no successor. So there have been many cases in which a judge has decided that a document supposedly executed on behalf of MERS by someone on behalf of a company that is labeled as “attorney in fact” is void in the absence of foundation testimony or documents showing that the interest of the “lender” has actually been transferred by way of payment to a transferee.
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MERS is not a servicer and MERS is not the owner of the debt. It has bare naked legal title to mortgages.
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There are no successors in interest or assigns with respect to either MERS or the “lender.” Since MERS does not possess and even disclaims any financial interest in the debt, note or mortgage, it may not execute any document of transfer except on behalf of the “lender” on the mortgage deed or deed of trust, or on behalf of a genuine successor to the “lender,” the document signed on behalf of MERS must be void, and not voidable.
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This is where many attorneys and pro se litigants miss the mark. they fail to parse the words and thus fail to recognize the Achilles heel in any chain of title which is dependent upon the transfer of any interest in any mortgage by or on behalf of MERS.
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The label of “authorized signer” is a lie on many levels. The signer has no corporate resolution from the Board of Directors, appointment by an actual officer with administrative duties at MERS, nor any employment by MERSas employee or as independent contractor. The person who signs is not paid by MERS.
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The person who signs is the employee of one of three entities — (a) the foreclosure mill (see David Stern), (b) the party claiming to be an authorized servicer of an entity who also does not own the debt or (c) an outside vendor who specializes in fabricating documents to “clear up” (read that as falsify) the title chain.
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In most cases there is no power of attorney executed by any employee, officer or director of MERS. But even in the rare instances where such a document has actually been properly executed and dated, the Power of Attorney cannot create any right, title or interest to any debt, note or mortgage.
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You need to keep their feet to the fire. If you don’t successfully attack such issues the presumption will prevail — i.e., that the chain of title is perfect. If you do attack those issues the presumptions fail and in addition to MERS being naked so is the foreclosure mill and the claimed labeled servicer.
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As always you will do well if you presume the entire foreclosure is a fake process in which the foreclosure process is weaponized to obtain revenue instead of restitution for an unpaid debt. Just assume that everything is a fiction and none of it is real. Then set out to create the inference against the use of key legal presumptions necessary for the foreclosure mill to establish a prima facie case. Those presumptions lead to conclusions that are contrary to facts in the real world.

Don’t Admit Anything About the Servicers Either — It’s All a Lie

Want to know why this site is called LivingLies? Read on

Homeowners often challenged the authority of the named claimant while skipping over the actual party who is supporting the claim — the alleged servicer.

You might also want to challenge or at least question their authority to be a servicer. The fact that someone appointed them to be a servicer does not make them a servicer.

Calling themselves a “servicer” does not constitute authority to administer or even meddle in your loan account. As you will see below the entire purpose of subservicers is to create the illusion of a “Business records” exception to the hearsay rule without which the loan could not be enforced. The truth here is stranger than fiction. But it opens the door to understanding how to engage the enemy in trial combat.

That “payment history” is inadmissible hearsay because it was not created by the actual owner of the record at or near the time of a transaction and the actual input of data is neither secure mor even known as to author or source. Likewise escrow and insurance payment functions are not authorized unless the party is an actual servicer. The fact that a homeowner reasonably believed and relied upon representations of servicing authority is a basis for disgorgement — not an admission that the party collecting money or imposing fees and insurance premiums was authorized to do so.

PRACTICE NOTE: However, in order to do this effectively you must be very aggressive in the discovery stage of litigation. (1) ASK QUESTIONS, (2) MOVE TO COMPEL, (3) MOVE FOR SANCTIONS, (4) RENEW MOTION FOR SANCTIONS, (5) MOTION IN LIMINE AND (6) TIMELY OBJECTION AT TRIAL.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
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To be a “servicer” the company must received the appointment to administer the loan account from someone who is authorized to make the appointment. A power of attorney is only sufficient if the grantor is the owner of the debt — or had been given authority to make such appointment from the owner of the debt.
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A person who is authorized to make the appointment is either the owner of the debt by virtue of having paid for the debt or an authorized representative of the owner of the debt by virtue of having paid for the debt. This is a key point that is frequently overlooked. By accepting the entity as a servicer, you are impliedly admitting that they have authorization and that a true creditor is in the chain upon which your opposition is placing reliance. In short, you are admitting to a false statement of facts that will undermine your defense narrative.
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If the servicer is really authorized to act as such then your attempt to defeat foreclosure most likely fails because the case is about a real debt owed to a real owner of the debt.
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The fact that they allege that they maintain records may be a true or false representation. But whether it is true or false, it does not mean that they had authorization to maintain those records or to take any other action in connection with the administration of the loan. Of course we know now that any such records are composed of both accurate and fabricated data.
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We also know that the data is kept in a central repository much the same as MERS is used as a central repository for title.
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The representations in your case about and intensive audit and boarding process most likely consist of fabricated documents and perjury. There was no audit and there was no boarding process. The data in most cases, and this probably applies to your case, was originated and maintained and manipulated at Black Knight formerly known as Lender Processing Systems.
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Contrary to the requirements of law, the central repository does not ever handle any money or payments or disbursements and therefore does not create “business records” that could be used as an exception to the hearsay rule. The same thing applies MERS. These central repositories of data do not have any actual role in real life in connection with any financial transaction. Their purpose is the fabrication of data to support various purposes of their members.
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All of this is very counterintuitive and difficult to wrap one’s mind around. but there is a reason for all of this subterfuge.
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From a legal, accounting and finance perspective the debt was actually destroyed in the process of securitization. This was an intentional act to avoid potential risk of laws and liability. But for purposes of enforcement, the banks had to maintain the illusion of the existence of the debt. Since they had already destroyed the debt they had to fabricate evidence of its existence. This was done by the fabrication of documents, recording false utterances in title records, perjury in court and disingenuous argument in court.
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The banks had to maintain the illusion of the existence of the debt because that is what is required under our current system of statutory laws. In all 50 states and U.S. territories, along with centuries of common law, it is a condition precedent to the enforcement of a foreclosure that the party claiming the remedy of foreclosure must be the owner of the debt by reason of having paid value for it.
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The logic behind that is irrefutable. Foreclosure is an equitable remedy for restitution of an unpaid debt. It is the most severe remedy under civil law. Therefore, unlike a promissory note which only results in the rendition of a judgment for money damages, the Foreclosure must be for the sole purpose of paying down the debt. No exceptions.
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The problem we constantly face in the courtroom is that there is an assumption that there is a party present in the courtroom who is seeking restitution for an unpaid debt, when in fact that party, along with others, is seeking revenue on its own behalf and on behalf of other participants.
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The problem we face in court is that we must overcome the presumption that there was an actual legal claim on behalf of an actual legal claimant. Anything else must be viewed through the prism of skepticism about a borrower attempting to escape a debt. The nuance here is that the end result might indeed be let the borrower escapes the debt. But that is not because of anything that the borrower has done. In fact, the end result could be a remedy devised in court or by Statute in which the debt is reconstituted for purposes of enforcement, but for the benefit of the only parties who actually advance money and connection with that debt.
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More importantly is that nonpayment of the debt does not directly result in any financial loss to any party. The loss is really the loss of an expectation of further profit after having generated revenue equal to 12 times the principal amount of the loan.
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While there are many people who would argue to the contrary, they are arguing against faithful execution of our existing laws. There simply is no logic, common sense or legal analysis that supports using foreclosure processes as a means to obtain Revenue at the expense of both the borrower and the investor. And despite all appearances to the contrary, carefully created by the banks, that is exactly what  is happening.

How to Distinguish Between Ownership of the Debt, Ownership of the Note and Ownership of the Mortgage (or Deed of Trust)

Amongst the lay people who are researching issues regarding who actually can enforce a mortgage, there is confusion arising from specific terms of art used by lawyers in distinguishing between a debt, a note and a mortgage. This article is intended to clarify the subject for lawyers and pro litigants. The devil is in the details.

Bottom Line: In most cases foreclosures are allowed because of the presumption that the actual original note has been physically delivered to the current claimant from one who owned the debt because they both had paid money for it. In most cases merely denying that fact is insufficient to prevent the foreclosure because the court is erroneously presuming that even if the foreclosure is deficient the proceeds of sale will still go to pay the debt.

In most cases those presumptions are untrue but must be rebutted. And the way to rebut those presumptions is to formulate discovery that asks who paid for the debt, when and who were the parties to the transaction?

The  lawyers from the foreclosure mills will fight tooth and nail to prevent an order from the court directing them to answer the simple question of who actually owns the debt by reason of having paid value for it and thus who will receive the foreclosure sale proceeds as payment for the debt. The answer is almost always the same — the foreclosure mill is unable to identify such a party thus conceding the lack of subject matter jurisdiction and standing to bring the foreclosure action.

Eventually some party will be identified by changes in the law as being the legal owner of the debt. thus cleaning up the jurisdictional issue caused by utilizing parties who have neither suffered any financial injury nor are threatened with any such financial injury. But for now, the banks are stuck with the mess they created.

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

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

Transfer of debt is by payment for the debt. Payment means you have a legal and equitable right to claim the debt as your own. Payor is the new owner of the debt and the Payee is the prior owner of the debt. There are no exceptions.

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The note is evidence of the debt. It is not the debt.
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Payment of money to a borrower creates a debt or liability regardless of whether or not any document is signed.
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Signing a document promising to pay creates a liability regardless of whether or not there was ny payment of money. In fact, if someone buys the note for value they become a holder in due course and the maker is liable even if they never received any money, value or consideration.
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Enforcement of the debt alone is governed by statutory and common law.
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Enforcement of notes and enforcement of the security instrument (mortgage or deed of trust) is controlled strictly by the adoption of the Uniform Commercial Code (UCC).
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Article 3 UCC governs the negotiation and enforcement of paper instruments containing an unconditional promise to pay a certain sum on a certain date.
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Article 9 governs the transfer and enforcement of security agreements (mortgages and deeds of trust).
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Whereas Article 3 does not require the holder of the note to be the owner of the debt for purposes of enforcement of the note, Article 9 requires the holder of the mortgage to be the owner of the debt as a condition precedent to enforcement of the mortgage. No exceptions.
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Ordinarily the execution of the note causes the debt to be merged with the obligations under the terms of the note. But this is only true if the owner of the debt and payee under the note are the same party. If not, then the execution of the note creates two distinct liabilities — one for payment of the debt and one for payment under the terms of the “contract” (i.e., the note).
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Before securitization it was customary that the owner of the debt had paid money to the borrower as a loan, and the execution of the note formalized the scheme for repayment. Hence under the merger doctrine the borrower who accepted the loan and the maker of the note were the same party and the Lender of the money to the borrower was also the payee named in the note.
*
Now this is not always the case and appears to be not the case in most loans, which is why the banks have resorted to fabricated backdated forged and robosigned documents. The Lender in many if not most loan originations was not the party named as payee on the note. And the party named as payee on the note had no authority to represent the interests of the lender. Where this is true, merger cannot apply. And where this is true, enforcement of the note is NOT enforcement of the debt. Rather it is enforcement of a liability created entirely by contract.
*
Foreclosure of a mortgage must be for payment of the debt, not just the liability on the note. All states have case law that says that transfer of mortgage without the debt are a nullity. This executing and receiving an assignment of mortgage and even recording it is a legal nullity unless the recipient paid money for the debt and the transferor was conveying ownership of the debt because the transferor had paid money for the debt. If those conditions are not met the executed and recorded assignment of mortgage is a legal nullity and the title record must be viewed by the court as lacking an assignment of mortgage.
*
The judiciary has not caught up with these discrepancies in most instances. Hence a judge will ordinarily presume that the delivery and endorsement of the note and the assignment of the mortgage was equivalent to the transfer of title to the debt, with payment being presumed for the debt. So while the law requires ownership of the debt by reason having paid for it, the courts presume that the debt was transferred along with the paper, subject to rebuttal by the maker and borrower.
*
The rubber meets the road when in discovery and defenses the borrower raises the issue of who paid for the debt and when. In the current world of securitization the answer will be the same: the banks won’t tell you and they won’t admit that the party named as claimant in the foreclosure never paid for the debt, despite appearances to the contrary. 

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

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

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

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

Hat tip to Summer Chic

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

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

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

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

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

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

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

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

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

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

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

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

Just to be clear, MERS is absolutely nothing.

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

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

What is Fair?

The question should not be the bipolar question of who gets a “free house,” with the answer being the borrower or a party claiming entitlement to enforce. The question should be how to create a new equitable and legal infrastructure to clean up the mess that the banks created without unnecessarily penalizing either the investors who put up the money in the first place and the borrowers who put up their lives.

This is a question that BOTH the courts and the legislatures must face for failure to do so compounds the already compounding chaos and tragedy that befell our nation when the scheme initially collapsed in 2008.

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

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
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Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
The borrower was lured into a loan contract in which she thought that the named lender had a financial interest in the outcome of the contract. The actual lender was a remote investment bank about whom she had received no disclosure and, as an average person of ordinary knowledge and means, had no access to information that would revealed the true nature of the contract.
*
Rather than seeking to conform to law in selling such loan products the real lender sought to avoid the law.
*
Rather than making money through the receipt of interest payments, the real lender intended and quickly divested itself of any interest or expectation of receiving interest or principal payments. The real lender also divested itself all of all risk of loss associated with payments. In short, the real purpose of the loan was to create multiple vehicles that could be sold as private contracts, resulting in the receipt of money that far exceeded the principal amount of the loan made to the borrower.
*
While ordinary residential homeowners normally rely on the premise that the loan’s purpose was to generate revenue and profit for the lender through the receipt of interest payments, her named lender would not and did not receive interest payments and had no profit except from fees paid by the remote investment bank through conduits.
*
Thus the actual lender entered into a loan arrangement without contract for the sole purpose of selling various attributes of the loan to as many investors as possible using as many complex financial instruments as they could conjure. The borrower had entered the arrangement believing that the named lender was the actual lender and that all compensation arising from the consummation of the loan was disclosed.
*
The actual lender retained no direct interest in the performance or outcome of the loan. The borrower was unaware that they had signed up for an arrangement in which the other side of the equation would create millions of dollars in “trading profits” arising from the declared existence of the loan, along with her name, reputation, signature and the collateral of her home.
*
Hence the goal of the lender was to create such loans regardless of quality. In fact, the lower the quality the more profit they made. And foreclosures became the vehicle by which the actual lender (investment bank) covered up the violation of federal and state lending statutes and common law doctrines of fair dealing and public policy.
*
Since judges thought that the proceeds of a foreclosure sale would go to the owner of the debt, and thus pay down the debt, they thought that there was little harm in granting foreclosures even if the paperwork was somewhat “dodgy.” But an increasing number of judges are questioning two main issues.
*
The first issue, which has been repeatedly voiced by hundreds of judges since 2008, is why there have been so many changes in the name of the servicer who supposedly was authorized to administer the loan and whether the servicer was actually administering the loan for or on behalf of an owner of the debt as required by law. Because without that its records would not  be allowed in as an exception to the hearsay rule. (The claimed “servicer” would just be a company that had intervened for its own financial interest which included fees for enabling a successful foreclosure. Hence their records would not have intrinsic credibility of a third party who had no interest in the outcome of litigation).
*
The second issue which is being raised with increasing frequency is why it was necessary to create documents of dubious origin and authenticity? In an industry that created virtually all the paperwork required for closing loan transactions, and created the industry standards for maintenance of such documents how and why did they manage to lose or destroy the original promissory note so often? (And why was it necessary to fabricate any documents?)
*
And a third issue which is only now being discussed with some earnest, is whether the right to resell the loan automatically includes the the right to use the personal data of the borrower for many sales of many of the loan attributes that were not contemplated by the borrower because they were hidden from the borrower.
*
Europe is ahead of the U.S. in understanding that personal data is a property right. But laws in the U.S. do answer the question. Where the contract in known by only one side to have attributes that are withheld from the other side it is subject to the doctrine of implied contract (assumpsit) in which the party discovering the true nature of the contract may enforce a right to receive compensation for the attributes that were previously unknown.
*
There can be little doubt that nearly all loan arrangements for residential property as collateral since 1996 have all the elements of an implied contract that is far beyond the scope of the written contract. Hence there can be no doubt that the borrowers are entitled to some form of compensation or damages arising from the implied contract and/or the violation of disclosure requirements in the Truth in Lending Act and state lending laws.
*
The scope of this issue is a fact. In 1983 there was zero in nominal or actual value of instruments deriving their value from debt. Today there is over 1 quadrillion ($1,000,000,000,000,000) dollars in the shadow banking market. The total amount of fiat (actual) currency in the world is only 85 trillion ($85,000,000,000,000) dollars.
*
The meaning is clear: for every dollar ($1.00) in real transactions of fiat currency there is, on average, $11.75 in trading profits for the banks and investors who trade in that market. That means that for the average of loan of $200,000 it is almost certain that the profits generated from the origination or acquisitions that loans was on average $2,352,941. In other words, payoff on the loan was incidental to the loan transaction — not the point of the loan arrangement.
*
The current claim by the banks is that this enormous profit from lending is the result of separate contracts and transactions that should not be included as part of the original contract with borrowers.
*
The claim by borrowers, while phrased in different ways, is that somehow the borrowers should be receiving some compensation or allowance as part of the package since the base transactions from which all value was derived for further instruments or agreements was their own signature, name, reputation and home as at least apparent collateral. Borrowers consider the non disclosure of the actual intention of the actual lender to be base violations of TILA and state lending laws.
*
In addition, with the proceeds of foreclosure sale being distributed as revenue rather than the payoff of a loan receivable, existing law is insufficient to deal with the crisis of nonpayment by borrowers most of whom have been paying servicers who have been feeding such payments into large pools of cash from which payments are made to the holders of “certificates” who only have a right to receive payments from the investment banker who was doing  business under the name of a nonexistent trust.
*
In some sense the holders of such certificates are the ones most likely to be considered owners of the debt. But the certificates themselves and the accompanying contracts (prospectus) clearly state that the certificates convey no right, title or interest in the borrower’s debt, note or mortgage.
*
There is no right of investors to enforce the certificates against borrowers and the certificates are not “mortgage backed” despite claims to the contrary. This has already been decided in several tax cases. Their exemption from securities regulation is therefore unfounded.
*
This has resulted in various parties posing as authorized enforcers of the debt and the security instrument ( mortgage or deed of trust). Regardless of their claimed title or status, all such entities share one controlling characteristic: they all initially or eventually claim to be acting in a representative capacity even when they present themselves as the “holder” of the note or any other claim to rights to enforce the note or mortgage.
*
The evolution of such claims lends some perspective. Initially foreclosures were brought in the name of “servicers” and when challenged the servicing claims were then accompanied by an denial of securitization or the existence of any trust that owned the debt, note or mortgage. As it turned out the lawyers for such entities were telling the truth — there was no such trust nor would it have been the owner of the debt, note or mortgage even it had existed.
*
In addition foreclosures were brought in the name of Mortgage Electronic Registration Systems, Inc. (MERS).
*
Neither the servicers nor MERS ever could assert or allege that they had any right, title or interest in debt, note or mortgage. In the case of MERS it could not even alleged possession of the note or mortgage and had handled no money whatsoever in relation to any loan.
*
And in all cases the proceeds of foreclosure sales permitted by the courts were distributed as revenue to several participant claiming authority to act, including the lawyers, servicers, master servicers, and the investment bank. In no case were such proceeds distributed to the owners of certificates issued in the name of a “trust.” Several forensic analysts tracked the “credit bids” and quickly discovered that those bids were not submitted by a creditor.
*
The existence of the actual debt from the borrower has been converted from actual to theoretical; this explains the lack of any identified party who is the owner of the debt. This is not a problem created by borrowers who knew nothing of this scheme nor do they now understand it.
*
This all results in the posing of three issues that need to be addressed head on if this crisis is to end.
  • The first which everyone has voiced since the beginning of the crisis is whether the homeowner should get a “free house” merely because the paperwork is now out of order.
  • The second is whether the current parties receiving revenue from the sale of foreclosed homes should be allowed to receive a “free house.”
  • The third is whether the borrowers have always been entitled to receive compensation for the larger implied contract in which compensation and revenue was generated from the origination or acquisition of their loan.
*
Since this is a pervasive issue occurring through tens of millions of loan contracts, the best possible vehicle for addressing a remedy is through government action that goes far beyond the nominal settlements that have been announced thus far.
*
All stakeholders should be given a voice at this table. Any approach that is punitive only to one particular class of stakeholders should be rejected. Laws need to be changed to reflect the modernization of financial instruments, only after consideration of the effects of such changes. Any law that simply makes it easier to foreclose or to merely cover up the title and legal errors that have been occurring for 20 years should also be rejected.
*
If we are to make sense out of this chaos that was in fact conjured and created by investment banks, then we need changes in our property laws, contract laws, securities laws, lending laws, laws of civil procedure and due process, and laws of evidence. If the banks have put themselves in a position where they cannot foreclose on mortgages, that should not be the end of the inquiry.
*
The question should not be the bipolar question of who gets a “free house,” with the answer being the borrower or a party claiming entitlement to enforce. The question should be how to create a new equitable and legal infrastructure to clean up the mess that the banks created without unnecessarily penalizing either the investors who put up the money in the first place and the borrowers who put up their lives. 

Payment History as Exception to Hearsay Rule

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Illinois Court of Appeals Cracks Code of Silence on Who Pays Foreclosure Mills

The wording of the decision strongly suggests that whether the claimant is US Bank, Deutsch or BONY Mellon et al, the third party who is actually paying the lawyer must be disclosed — at least if the homeowner asks.

Given the nature of the role that the alleged Trustee plays — i.e., none except to give the appearance of institutional involvement — this decision opens the door not only to disclosure but to possibly answering the question of who is pretending to be the creditor.

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

Hat tip Gregg DaGoose

Note that I endorse the reasoning here. The case should not used as authority as precedent except in the 1st District of Illinois. And of course the decision might further appealed.

see  https://jnswire.s3.amazonaws.com/jns-media/32/15/1386226/Margules_v_Beckstedt_appeal.pdf

We conclude that neither attorney-client privilege nor the Rules of Professional Conduct shield the identity of Steck’s third-party client, so affirm the judgment of the trial court and remand for further proceedings.

Relevant here, the citation requested “[a]ll documents evidencing any payments received by [Steck] or any others employed by [him] with respect to any representation of John Beckstedt [or When 2 Trade Group LLC] or by any other individual or entity acting on [their] behalf.” In addition, the citation requested “[a]ll documents evidencing any retainer received or held by No. 1-19-0012 – 3 – [Steck] or any others employed by or in partnership with [him] with respect to any representation of John Beckstedt [or When 2 Trade Group LLC] whether paid by [them] or by any other individual or entity acting on [their] behalf.” Steck, while noting and reserving some objections, denied having been paid by the debtors or anyone purporting to act on their behalf.

Steck responded that he had “no invoices, evidence of payment or other like records” because he had never billed or issued statements to Beckstedt or When 2 Trade. It was in this series of e-mails that Steck first asserted that “any information [he] ha[d] about [his] clients other than When 2 Trade and Beckstedt is privileged, including their identity.” [e.s.]

Attorney-client privilege “must be strictly confined within its narrowest possible limits.” (Internal quotation marks omitted.) People v. Radojcic, 2013 IL 114197, ¶ 41. Generally, the privilege does not protect a client’s identity. Cesena, 201 Ill. App. 3d at 104-05 (citing People v. Williams, 97 Ill. 2d 252, 295 (1983)). Two exceptions have been recognized: (i) where “the client will be prejudiced in ‘some substantial way’ if his identity were disclosed” (id. at 105 (quoting Williams, 97 Ill. 2d at 295)) and (ii) where protection would be in the public interest (id. (citing Shatkin, 128 Ill. App. 3d at 525); see also People v. Doe, 55 Ill. App. 3d 811, 815 (1977) (collecting cases)). The party asserting the privilege bears the burden of establishing that it applies. Shatkin, 128 Ill. App. 3d at 525.

plaintiffs cannot even attempt to put forward “some evidence” until they know the identity of the third party. Steck’s assertion of privilege as to his client’s identity has cut off the litigation before questions about plaintiffs’ evidentiary basis No. 1-19-0012 – 10 – could even be asked. Steck inserted the issue of attorney-client privilege into this case, and as the proponent of the privilege, he must show its application. [e.s.]

In Shatkin, the court recognized that a client’s identity is not protected by attorney-client privilege because “disclosure of the identity of an attorney’s client provides proof of the existence of the relationship, provides the opposing party with proof that his [or her] opponent is not solely a nominal party, and provides proof to the court that the client whose secret is treasured is actual flesh and blood.” (Internal quotation marks omitted.) Shatkin, 128 Ill. App. 3d at 525; see also Doe, 55 Ill. App. 3d at 814.

It follows then that requests could be made in discovery.

The first is whether the named claimant (e.g. US bank) has any retainer agreement with the foreclosure mill.  This is relevant to the issue of an award of fees in judicial foreclosure proceedings.

The second is “all documents evidencing any payments received by [foreclosure law firm] or any others employed by it with respect to any representation of [e.g. US Bank, BONY Mellon, Deutsch] or [e.g. Ocwen, SPS] or by any other individual or entity acting on [their] behalf.” In addition, the request for production should probably include “all documents evidencing any retainer received or held by [foreclosure law firm] or any others employed by or in partnership with it with respect to any representation of [e.g. US Bank, BONY Mellon Deutsch] whether paid by [them] or by any other individual or entity acting on their behalf.”

The third is possibly a subpoena making the same demand for discovery made to the alleged servicer and its predecessors. This is relevant to the issue of whether the named claimant is in fact the real party in interest or, as set forth in the defense narrative, is acting as a sham conduit or front for third party actors.

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