Another Homeowner Victory In Hawaii! Gary Dubin, Attorney

US Bank v Compton 9335344481 Hawaii 2020 Dubin

So here is yet another example of litigation done correctly. This case demonstrates that the courts can and will be convinced to rule in favor of homeowners when the correct issue is raised at the right time in the right way. Here are some quotes from the case:

“Compton asserts that the evidence which U.S. Bank sought to admit through (1) the “Declaration of Indebtedness and on Prior Business Records” by Carol Davis (Davis), a “Document Execution Specialist” employed by Nationstar Mortgage LLC d/b/a Mr. Cooper (Nationstar), as servicing agent for U.S. Bank, attached to the Motion for Summary Judgment, and (2) the “Declaration of Custodian of Note” by Gina Santellan (Santellan), a “custodian of original loan records” employed by The Mortgage Law Firm, PLC (TMLF CA), attached to U.S. Bank’s “Supplemental Memorandum in Support of Its [Motion for Summary Judgment],” was hearsay and not admissible evidence.

“someone purporting to be a “custodian or other qualified witness” must establish sufficient foundation upon which to admit the note. In Wells Fargo Bank, N.A. v. Behrendt, 142 Hawai5i 37, 414 P.3d 89 (2018), the Hawai5i Supreme Court ...

“Davis does not attest to being a custodian of records, but an authorized signer for Nationstar.

“Davis declaration does not state that U.S. Bank possessed the Note at the time the Complaint was filed, merely stating that “[U.S. Bank] has possession of the Note,” and that based on Nationstar’s records, U.S. Bank “by and through Nationstar had possession of the original Note prior to 01/24/17, the date of the filing of the complaint in this foreclosure.”

“although Davis attests to Nationstar incorporating the records of Bank of America, the “Prior Servicer,” and relying upon the accuracy of those records, Davis does not aver that she is familiar with the record-keeping system of Bank of America or the lender Countrywide, which purportedly created the Note and signed the blank endorsement. Thus, Davis’s declaration failed to establish the foundation for the Note to be admitted into evidence. Behrendt, 142 Hawai5i at 45, 414 P.3d at 97; U.S. Bank N.A. v. Mattos, 140 Hawai5i 26, 32-33, 398 P.3d 615, 621-22 (2017).

“Santellans’ declaration does not establish the foundation for admission of the Note to establish possession. That is, like the Davis declaration, Santellan does not attest that she has “familiarity with the record-keeping system of the business that created the record to explain how the record was generated in the ordinary course of business.” Behrendt, 142 Hawai5i at 45, 414 P.3d at 97 (quoting Mattos, 140 Hawai5i at 32, 398 P.3d at 621); Fitzwater, 122 Hawai5i at 365-66, 227 P.3d at 531-32) (determining that while there is no requirement that the records have been prepared by the entity that has custody of them, as long as they were created in the regular course of some entity’s business, the witness must have enough familiarity with the record-keeping system of the business that created the record to explain how the record was generated in the ordinary course of business) (quotation marks omitted).

“Viewing the evidence in the light most favorable to Compton, as we must for purposes of a summary judgment ruling, we conclude that there is a genuine issue of material fact as to whether U.S. Bank had standing to initiate this foreclosure action when it was commenced. Accordingly, we conclude that the Circuit Court erred in granting U.S. Bank’s Motion for Summary Judgment.

“Based on the foregoing, the Judgment and the “Findings of Fact, Conclusions of Law and Order Granting Plaintiff’s Motion for Summary Judgment against All Defendants and for Interlocutory Decree of Foreclosure,” both entered on August 10, 2018, by the Circuit Court of the Second Circuit, are vacated. This case is remanded to the Circuit Court for further proceedings consistent …

How to Fight Those “Declarations” from False Claimants in Foreclosures

The bottom line is that the loan account was extinguished contemporaneously with the origination or acquisition of the account. There is no loan account claimed as an asset of any company.

The records  of the self-proclaimed servicer are not records of the loan account or the establishment of the loan account on the books of any company. Therefore they are not records of the creditor.

Besides being fabricated those records are irrelevant and inadmissible without foundation testimony and proof that the loan account has been established on the books of some creditor and even then, even that is irrelevant unless that creditor was the named Plaintiff or beneficiary on a deed of trust.

All of this is completely counterintuitive to lawyers and homeowners — but not to investment bankers who continue to profit from each foreclosure without paying one cent to reduce the claimed obligation supposedly due from the homeowner.  And they do this all without ever appearing as a party in court.

Nice work if you can get it.

So here is something I drafted recently in response to a memorandum in opposition to the homeowners’ motion to strike the declarations of the “plaintiff”.

Counsel for the named plaintiff is engaging in procedural and substantive strategies of evasion.
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While the action is clearly filed for the benefit of “certificate holders,” counsel continues to refer to the plaintiff as Bank of New York Mellon.
Counsel steadfastly refuses to identify the certificates or the holders.
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In addition, counsel implies a representative capacity on behalf of the “certificate holders” in which the Bank of New York Mellon supposedly has the authority to represent them. As defendant has previously demonstrated to the court, Bank of New York Mellon has consistently rejected any allegation or implication that it served in a representative or fiduciary relationship with certificate holders both in this particular series and in other securitization schemes.
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Counsel for the named plaintiff supposedly appears on the behalf of unidentified holders of unidentified certificates. Or counsel for the named plaintiff is claiming a fictitious representative capacity in which it represents Bank of New York Mellon. But as previously stated by defendant, opposing counsel has no agreement for legal representation between itself and Bank of New York Mellon.
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Instead, it has been retained by a party who is a self-proclaimed “servicer” – Select Portfolio Servicing Inc., and counsel for the named plaintiff asserts that SPS is the “attorney-in-fact” for Bank of New York Mellon.
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However counsel for the named plaintiff has never alleged nor demonstrated that Bank of New York Mellon has ever been party to a transaction in the real world in which it paid value for the underlying debt in exchange for conveyance of ownership of that debt. Accordingly even if SPS is the attorney-in-fact for Bank of New York Mellon, such an assertion is both irrelevant and a distraction from the fact that there is no creditor present in this lawsuit.
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The truth of the matter is that opposing counsel represents neither Bank of New York Mellon nor the certificate holders. Its sole relationship and contact is with SPS, owned by the real player in this action, Credit Suisse — who seeks only profit from the sale of homestead property since the loan account and the underlying debt were retired in the parallel securitization process.
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There is no such debt or loan account and therefore there can be no owner. And if there is no owner of the debt or account then there is no creditor, lender or successor lender. SPS may have some agency with Bank of New York Mellon but that does not create the rights they seek to enforce.
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Counsel for the named plaintiff asserts “the declaration was clearly executed by a person with “personal knowledge” as required by the foreclosure order.” This is not a true statement. Counsel is being disingenuous with the court.
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The declaration was executed by somebody identified as a “document control officer.” The declaration says nothing else about any personal knowledge acquired by the signatory. In fact it does not even define “Document control officer.”
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The declaration itself does not establish the foundation for testimony about the subject loan despite the characterization advanced by opposing counsel. The statement in the declaration is that “SPS holds and maintains all of the business records relating to the servicing of this loan.” There is no statement or allegation or any other evidence in the court file, nor could there be, that the records of SPS include entries that establish the subject debt, note and mortgage as an asset of any entity. That is because no such entity exists and no such loan account presently exists.
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Opposing counsel disingenuously attempts to distract the court by focusing on the familiarity with the record-keeping practices and record-keeping systems of SPS. Such familiarity is irrelevant if the records are not those of the creditor. This is irrelevant if SPS is not an authorized agent of the party who has paid value for the debt in exchange for a conveyance of ownership of the debt. No such allegation or evidence exists except through the use of presumptions related to documents that are not even facially valid.
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Accordingly the opposition filed by opposing counsel is simply another step in the attempt to distract the court from the simple fact that no loan account has ever been established nor has the ownership of such an account been established. Opposing counsel has relied upon innuendo, implication and self-serving inferences to establish facts that do not exist in the real world.
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The declaration of opposing counsel is false. Neither the attorney nor the law firm represents the Bank of New York Mellon. In addition, the attorney falsely alleges “personal knowledge” without specifying how that knowledge was obtained. Like all other documents in this case, the creation of this document is meant to create an illusion based upon a cursory glance at the document rather than an analysis of it.
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The declarations in this case do not survive any credible analysis.
Similarly, the creation and execution of a “limited power of attorney” on March 5, 2020, after the lawsuit was filed and after the motion for summary judgment was filed, is another disingenuous effort to distract the court. The execution of the power of attorney, even if it was valid, is irrelevant if the grantor had nothing to grant. There has yet to be any reference, allegation, exhibit or evidence submitted establishing the identity of any entity that maintains the subject loan account as an asset on its financial statements.
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In conclusion, any reasonable attentive analysis of the documents submitted by opposing counsel reveals the absence of any allegation that counsel represents any party on whose behalf this action was filed, according to the complaint and subsequent filings. Taken individually or collectively, the documents are a smokescreen for the pursuit of profit of a third party (Credit Suisse) rather than restitution for an unpaid debt that no longer exists. 
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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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Gary Dubin, Esq. Scores Another Victory for Homeowners in Hawaii in Notorious LSF9 Case

More kudos to Gary Dubin who keeps producing favorable decisions for homeowners. This ruling is important for a variety of reasons. This time it is all about the rules of evidence and legals tanding to even bring the claim.

see US Bank LSF9 v Verhagen 7-20-20

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The first reason is that it presents a court of appeal that drilled down on the actual facts rather than the presumed facts. This is a substantial departure from prior judicial practice. I think it reflects a change in judicial attitude. While nobody is willing to say that these foreclosures are entirely fraudulent, The suspicions and reservations about these actions are starting to surface.

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So the second reason that this may be important is that the court made an effort to identify the labels used to identify people who supposedly had knowledge and Authority.
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The third reason is that this decision brings us back to basics. This is not new. But it is instructive. If there was no claim to begin with then there is no foreclosure.

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The fourth reason is that this deals within the infamous LSF9 “trust” for which US Bank is labelled as a trustee.
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The fifth reason is that the decision deals explicitly with rules of evidence — what is admissible and what is not admissible evidence. And specifically affects the admissibility of records of self-proclaimed servicers.
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Unless the robo witness can explain to the court’s satisfaction how he or she knows that the records of the “prior servicer” were created in in the ordinary course of the business that the lawyers are saying was bing conducted, then the only way those prior records can be admitted into evidence is by a custodian of records of the prior entity that was claiming the right to service the homeowner account.
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What is clear is that no such witness is available because the “prior servicer” was not actually performing any servicing function on behalf of any creditor (because there is no creditor). The whole reason that Caliber became the designated “servicer” was to prevent Chase from being accused of perjury. This decision brings them back into something they don’t want to be in.
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Chase knows that the debt was never purchased or sold by anyone to anyone. They know that the money received from homeowners was not for the LSF9 trust and they know that the foreclosure is not being pursued for the trust or the trustee, US Bank, nor the investors who bought certificates. Chase knows that this foreclosure is being pursued for Chase and Credit Suisse.
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And Chase knows that if this simple fact is revealed, the court will demand that Chase and Credit Suisse prove they are entitled to receive those proceeds and that the court will question why the action was not brought in their name. Chase knows they can’t answer those questions because there is only one answer — they are pursuing foreclosure through intermediaries because they want the money — not to provide restitution for unpaid debt to someone who paid for it but to increase their swollen wallets with more profit.
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The devil is in the details. And this time the details revealed the fatal deficiency in the foreclosure action. But it’s not over. Having vacated the Summary Judgment, the foreclosure mill is being given a second bite at the apple with a real trial. In all probability this case will be settled under seal of confidentiality and will never get to trial But if it does get there, then the lawyers must hold the trial judge’s feet to the fire and require actual testimony of actual personal knowledge as to the record-keeping practices of the prior servicer.
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The lawyers should also focus on the most basic assumption — that Caliber or Chase were ever “Servicers.” If they are not then their records are suspect and are created solely for the purpose of foreclosure proof rather than being records of actual transactions. Such records are inadmissible without corroboration from a credible reliable source.
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The way to attack this, I think, is by forcing the issue on who received payments from the servicer. You won’t find a creditor in that mix. The ancillary and more important question is who has previously received the cash proceeds from the forced sale of residential homestead property in foreclosures commenced in the name of the LSF9 trust? Neither US Bank nor the trust ever saw a dime — and they are never intended to receive anything.

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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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Please visit www.lendinglies.com for more information.

The missing second witness —Attacking the Business Records of A Servicer: Start with the fact that the company is self-proclaimed servicer with no proof of authority and then pivot to the absence of records establishing the debt as an asset.

Excellent article written by attorneys at Blank Rome on the issue of Business Record exceptions to the hearsay rule. The hearsay rule is simple. It excludes from evidence any statement that is uttered out of court — whether that statement is in writing or was made orally.

see https://www.jdsupra.com/legalnews/florida-supreme-court-resolves-conflict-20649/

So here is what it looks like in a typical old-fashioned foreclosure trial.

The witness testifies that he or she is the records custodian of a bank. He/she says she has the records of the homeowner/borrower from the bank and he/she testifies that he/she knows from his/her own personal knowledge that those records were made at or near  the time of every transaction between the borrower and the bank.

The witness testifies that he/she has the actual records with handwritten entries showing the establishment of the loan as an asset through purchase of the promissory note in a transaction in which the borrower received money or in which money was paid on behalf of the borrower.

The written record is admitted into evidence as proof of two matters asserted: (1) establishment of the debt or underlying obligation and (2) the borrower’s payment history.

The witness goes on to testify that he/she holds in his/her hand the original promissory note and mortgage executed by the borrower and that is ahs been under lock and key, under his/her supervision since the time of origination of the loan.

The note and mortgage are accepted into evidence as proof of the terms of repayment and the establishment of a lien.

The Judge compares the obligation (promise to pay) as set forth on the note with the payment history and arrives at a factual conclusion as to whether the homeowner is in breach of the agreement and renders a final judgment for the bank, assuming the homeowner has not made payments that were promised by the homeowner to the bank.

Now let’s look at the modern day nontraditional foreclosure. First of all nobody from the bank or “lender” makes any appearance.

My point is that a foundation objection should be made and preserved if this is the case.

If a witness is a person other than the employee or officer of the named claimant or plaintiff in the foreclosure case, he/she cannot testify about records, payment history or anything else relating to the foreclosure claim without someone else first testifying that the witness is authorized to do so and that the company for whom the witness works maintains the records that establish the debt as owned by the claimant and that said company is in fact the servicer of the account.

That second witness must be an authorized employee or officer of the named claimant/plaintiff. In plain language if BONY/Mellon is named as trustee of a trust, and that they are filing on behalf of certificate holders of the trust, no evidence should be admitted without first establishing the foundation for the inferences that the foreclosure mill wishes to raise.

And frankly the court should on its own reject any attempt to work around this requirement. But as a practical matter, the way it is currently working, if you don’t object continuously to the absence of such foundation then you will be treated as having waived the issue and with that, you will effectively be treated as though you had waived your defenses.

So if securitization was real, the witness would come in and say that they are the authorized representative of BONY Mellon and that they are the trust officer in charge of record keeping for BONY Mellon in relation to this named trust and the certificate holder.

The witness would produce the trust agreement authorizing BONY/Mellon to act as trustee and a certificate indenture in which the holders of the certificates have been granted ownership shares of a pool of mortgages owned by the trust and which explicitly grant to BONY/Mellon the right to represent the certificate holders in connection with the enforcement of loans owned by teht rust for their benefit. The witness would establish that the certificate holders are beneficiaries.

The bank trustee witness would produce business records of BONY/Mellon that show the transaction in which the loans were established, having acquired same from the originator in a specific transaction in which value was paid for ownership of the debt, note and mortgage.

Or, the witness would testify that pursuant to some agreement, BONY/Mellon had outsourced functions to some other company that is acting as servicer. And the witness would testify that the servicer was operating in compliance with the servicing agreement by tendering the required payments in the certificate indenture to BONY/Mellon as trustee who in turn makes payments to the certificate holders.

You will never see such testimony because none of these things happen in what is loosely described as “Securitization.” Certificate holders own nothing but an unsecured IOU from an investment bank doing business under the name of a nonexistent trust. No servicer even has access to any information, data or entries on any record establishing the debt as an asset of anyone. In fact, no “servicer” knows or pays any money to anyone in a transaction that would even imply they are working for the owner of the debt. That is where aggressive discovery will tip the scales.

In reality the “records” submitted by the servicer are proffered as the payment history but there is never any direct testimony that the payment history constitutes business records of the claimant. That is because they are not business records of the claimant. They are only reports issued for the purpose of foreclosure. And that is not allowed. Such reports are not admissible in evidence and if excluded, the case fails.

In one form or another, every case I have won for homeowners and every case I know that was won for a homeowner has turned on the absence of foundation for the evidence sought to be admitted into evidence — without which no legal presumptions can arise or be used in the case against the homeowner.

Bottom Line: In virtually all foreclosure cases there is an absence of the required second witness because there is no such witness — i.e., a person with personal knowledge that the facts assumed or presumed are true.

Here are some important quotes from the above cited article:

On July 2, 2020, the Florida Supreme Court issued its written opinion[i] in Jackson v. Household Finance Corporation, III, 236 So. 3d 1170 (Fla. 2d DCA 2016) to resolve a conflict with a case decided by the Fourth District Court of Appeal (Maslak v. Wells Fargo Bank, N.A., 190 So. 3d 656 (Fla. 4th DCA 2016). Specifically, the issue concerned whether the predicates were met for admissions of records into evidence under the business records exception to the hearsay rule during the course of a bench trial in a residential foreclosure case. The Florida Supreme Court held that the proper predicate for admission can be laid by a qualified witness testifying to the foundation elements of the exception set forth in Section 90.803(6) of the Florida Evidence Code.

a party has three options to lay the foundation to meet that exception: (1) offering testimony of a records custodian, (2) presenting a certification that or declaration that the elements have been established, or (3) obtaining a stipulation of admissibility. If the party elects to present testimony, the applicable case law explains that it does not need to be the person who created the business records. The witness may be any qualified person with knowledge of each of the elements.

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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Please visit www.lendinglies.com for more information.

 

Just like I said: Megabanks are doing just fine despite economic downturn — at the expense of investors, taxpayers and homeowners.

Major banks, including CitigroupJPMorgan and Morgan Stanley used massive trading revenues to beat profit expectations despite the continued struggles of the United States economy during the coronavirus pandemic. Those trading units tend to perform best when markets are volatile, helping to guard the major banks against economic struggles.

see https://www.cnbc.com/2020/07/17/without-big-wall-street-trading-arms-regional-banks-lean-on-mortgages-and-fees-to-beat-earnings.html

Way back in 2006 and 2007 and when I first started publishing articles about the mortgage meltdown (before most people realized there was a meltdown) I reported that the major banks were siphoning off much of the wealth contained inside the U.S.

I said that these mega banks were parking ill-gotten gains off-shore in various assets, — frequently using  a tax avoidance scheme based in Bermuda. And I said that they would repatriate that money only when they needed to do so.  And because they had taken trillions of dollars, they would forever use it to consistently report higher earnings whenever they needed to do so in order to maintain the value of their stock.

I said that they would do it by reporting higher trading profits. They are reporting higher trading profits merely by creating false trades at their trading desks between fictitious entities in which one of the subsidiaries is the “seller” who is reporting a profit.

Sure enough that is exactly what is happening. Small and regional banks don’t have that “nest egg.” They must rely on old fashioned fees and interest to earn money. But the big banks are reporting “trading profits” to offset deficits in interest and fee income caused by the huge economic downturn caused by coronavirus.

Part of those trading profits also come from foreclosures. The proceeds go to the megabanks, who have retained little or no financial interest in the alleged loans much less any losses from the alleged default.

There was no default in any obligation owed to any creditor because there is no creditor who maintains an accounting record on which it claims to own any homeowner debt, note or mortgage by reason of having paid value for it in exchange for a conveyance of ownership of the debt, note or mortgage from one who legally owns it.

Simple common sense. If you don’t own the debt you have no reason or authority to mark it “paid” even if you receive the money.  Homeowners and their lawyers should stop taking that leap of faith in which they admit the existence of a default. A default cannot exist on an obligation in which there is a complete absence of a legal creditor. Homeowners didn’t create this mess. It was all the megabanks who made a fortune stealing from investors and homeowners.

A default is the failure to perform an obligation or duty owed to a particular person — not a failure to perform a duty owed to the world in general.

There could be many reasons for the absence of a legal creditor — including the simple fact that everyone has received sufficient payments and settlements such that nobody needs to step into the shoes of a lender which could produce liability for violations of lending and servicing laws.

IT SHOULD NEVER HAVE BEEN THE BURDEN OF HOMEOWNERS TO PROVE THE EXISTENCE OF THE REAL CREDITOR. There isn’t one and the banks and their lawyers have been laughing at us for 20 years over getting away with that one. 

It was the mega banks that created loans without lenders — i.e., transactions in which there was no legal person or entity claiming ownership of the obligation.

The banks are using smoke and mirrors. They claim (through third party intermediaries) a “default” in the obligation to pay a nonexistent creditor. The money they receive from foreclosure is pure revenue offset only by the fees they pay to the other intermediary foreclosure players who exist solely to produce profits for themselves and the megabanks.

And pro se homeowners and even lawyers are confounded by this system. They admit the basic elements of the claim even though the basic legal elements are missing.

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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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If you want to submit your registration form click on the following link and give us as much information as you can. CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us.
In the meanwhile you can order any of the following:
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
*
Please visit www.lendinglies.com for more information.

There is no valid cause of action for foreclosure arising from the Uniform Commercial Code. There is a cause of action under common law contract — but nobody has alleged that in claims or defenses.

The only way that enforceability of the homeowner transaction can be preserved is through common law contract, in which UCC presumptions would probably not apply

I recently received a question from a paralegal asking a question I constantly receive — where do I find my loan. Or more specifically how to find out which trust owns my loan. the answer is that (a) you are asking the wrong questions and (b) you are admitting that the loan is actually in a trust. That simply is not true.

Here is my reply:

I appreciate the work you are doing. I think your work would be much easier if you concentrated on a more simple point.

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It seems like you are assuming that the loan is actually in a trust. in order for that to be true, one of two scenarios would have to be true.
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Either the named trustee of a valid trust has purchased the loan for Value in exchange for a conveyance of ownership of the underlying debt, note and mortgage or a trustor or settlor has conveyed ownership of the underlying debt, note and mortgage to the trustee or the trust. I am quite certain that you will find that neither one ever occurred.
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By examining various reports by the investment Banks with the goal of determining which some Trust owns the loan, you are admitting that securitization occurred. The truth is that securitization probably did not occur. For securitization to occur, an asset would need to be sold to multiple investors. No investor ever bought any debt, note or mortgage. Nobody else did either.
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Because you have not gone to law school, you might be missing will you find her, and more important, points in the litigation. Every case I have ever won was based upon the findings and conclusions of law published by a judge stating that the plaintiff or claimant in foreclosure have failed to produce evidence of ownership of the underlying debt.
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Ownership of the underlying debt can only be achieved through payment of value in exchange for a conveyance of ownership of the underlying debt. This is often presumed when the promissory note is issued and subsequently transferred. that presumption can often be easily rebutted both in Discovery and in objections at trial.
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The goal of securitization was to eliminate the role of the lender or creditor so that there would be no lender or creditor and therefore no liability for violations of lending or servicing laws. Without a company that has engaged in a transaction in which it paid value for the loan in exchange for a conveyance of the loan from someone who owns it, there can be no claim under Article 9 § 203 of the Uniform Commercial Code as adopted by all U.S. jurisdictions.

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I have written extensively on the result of this analysis.

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In cases involving false claims of securitization, there simply is no cause of action or foundation for initiating any foreclosure process based on presumptions arising out of the Uniform Commercial Code.
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The only way that enforceability of the homeowner transaction can be preserved is through common law contract, in which those presumptions would probably not apply.
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And the only way that a common law contract could result in enforceability of the obligation of a homeowner is to have the court create one by the process of reformation, using the doctrines of Quasi contract and Quantum Meruit.

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And the only way that the court could have any Authority or jurisdiction to impose a common law contract would be if an interested party filed a lawsuit asking for reformation.

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In the absence of such a request, the obligation of the homeowner is not enforceable under current law, which has existed for centuries. Forfeiture of a homestead cannot occur unless the claimant actually owns the debt and therefore can claim financial injury as a result of the action or inaction of the homeowner.
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In cases where the claimant arrives on the scene by virtue of language arising from claims of securitization, it has always been my opinion that such a Plaintiff or claimant probably doesn’t exist at all as a legal entity and most certainly does not possess any legal claim arising out of the Uniform Commercial Code, Article 3 or Article 9.

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As a result of my opinion that a common law contract would preserve the homeowner obligation (and the securitization infrastructure), I do not believe that final judgments or orders dismissing the Foreclosure or vacating a sale results in extinguishment of the debt, note or mortgage. Therefore I believe that quiet title does not apply.

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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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Who is PennyMac and Why Was It Needed by Wall Street Banks?

I received an email from one of my most prolific contributors that I am republishing here because virtually everything in it is entirely correct. I especially approve of her point about the fact that servicer advances are funded from proceeds of public offerings of stock that were all purchased by the Wall Street banks who did the underwriting.  Substance over form: the banks were giving PennyMac the money to make servicer advances. The banks were using the investor sourced money supply to buy the fake stock offering. None of it was real.

The end result is that all roads lead back to one thing, to wit: all of the money trail and all of the paper trails lead back to a handful of Wall Street banks who had “successfully” created a void between the real parties in interest — investors and homeowners — and the found a way to create the illusion of filling the void that cut out the financial interests of those real parties in interest. 

The banks were only intermediaries. They successfully posed as the real parties in interest when they were trading and issuing derivatives. But at the other end of the stick they maintained their position as intermediaries who had no interest in the debt and therefore could not be defined as lenders subject to the obligations and restrictions imposed by statutory and common law governing lending, consumer practices, servicing or anything else.

All of the fabricated documents that ensued were designed to cover up the fact that there was no person or entity that owned the underlying debt of any homeowner. Hence nobody could claim financial injury — a basic requirement for getting into court or making any claim.

who is PennyMac (PM) and why are they needed.
I think we need to look back at the PM history to answer this question.
PennyMac is a renamed Countrywide Financial which now operates at least 4 (four) known to me organizations.
1. PennyMac (one of most criminal, with Kurland and Spector)
2. Caliber Home Loan Inc, a middle-level intermediary, operated by Chris Mozilo who pass money from table pools to homebuyers via Black Knight (originator)  and smaller “Lenders”
3. BAC Home Loans
4. LandSafe Appraisal (purchased by CoreLogic) . In 2014 BOA sold a very similarly named system, LoanSafe to VA which is now handles all appraisals; plus CoreLogic gradually purchased most smaller appraisal companies*
Why Bank of America needed PennyMac to appear as a Large Lender and a Biggest servicer?
For the same reason why Countrywide needed American’s Wholesale Lender; and Fidelity National needed two (2) DocX,LLC and LPS – to create an additional corporate curtain to cover for the real parties.
Plus to use PennyMac and other “Servicers” as recipients for new bailouts.
If you take a closer look at PennyMac’s finances, here are nothing even close to $368+ billions worth of mortgages financed and 2 million homes serviced by PennyMac.
Moreover, if you see their Prospectuses, you will find out that the underwriters of PM securities (issued by PennyMac) are the same Stockbrokers who purchased PM’s securities, leaving about $29 million in fees to Penny Mac. I doubt is BOA or GS actually “purchased” anything from PM under this “offering” which they issued under glimpse of PennyMac.
But according to the legend, PennyMac now has to pay pay “servers’ advances” to “investors” for four months from their “own funds” until GSE’s (who sold their bonds to Fed. R. in advance) who cover these MBS, will step in and pick up the payments on “behalf of taxpayers  – while  GSE cannot even identify any Trusts where mortgages were pooled.
These GSE SOLD their unsecured bonds to Federal Reserve who buy about $30 Billion per WEEK from GSE beginning March 2020 to present time. Note that no Trusts were involved in these sales and no one homeowner was informed about the cage of ownership of their “debt”
I don’t know which “Servicers’ advances” and to whom PennyMac “pays” now, when the ownership of the “MBS” bonds was passed to Federal Reserve. At least Federal Reserve keeps it secret.
Apparently Kurland and know all risks involved and decided to steal some data from BK to create more money for themselves.
On May 2, 2019 they sent me a letter that “servicing” was transferred to them – but not mentioned by whom.
On May 3, 2019 PM sent a letter to BK informing them that PM is not going to extend their contract.
soon after Black Knight claimed that they “noticed some irregularities of use” their system by PM – apparently after I brought it to their attention. This is why no assignments were recorded reflecting the “sale” of my loan to PennyMac who cannot identify the Seller.
Since Oct. 31st  BK terminated PM as a client .
In Complaint  filed by PM against BK, they insist that the owner/investor is Ginnie Mae (who sold their MBS to Federal Reserve) – but continue to lie to me and DIFS that PennyMac is “owner/investor” in my loan.
The bottom line, as Neil said – these “servicers” and “lenders” are nothing. They are thin-capitalized clowns for hire and nobody sold any loans to GSEs because loans were destroyed at the beginning to create “manipulated data” in Black Knight system which Big Banks  sold as unsecured derivatives which GSE either sell to Federal Reserve or obtain payments from Stockbrokers directly, like FHFA v. Goldman Sachs
“GSE’s ownership” is the same myth to force people paying a long-time non existing “debt”.
So-called “universal income” proposed by Democrats is a camouflaged attempt to make Big Banks  pay royalties from trades to people .
Of course the Government cannot disclose the Truth since it will reveal that during last 40 years they allowed Stockbrokers to destroy property Titles to virtually ALL homes in America; plus create a slavery never existed before, where a small group of people enjoy tax-free profits from free servitude provided to them by the rest of the Country – plus income from stolen homes.
*Lagow worked at LandSafe, Inc., an appraisal company owned by Countrywide Financial and ultimately acquired by Bank of America, from 2004-2008. According to his unsealed complaint, Mr. Lagow observed widespread disregard for laws that regulate Federal Housing Administration (FHA) underwriting and home appraisals.

Specifically, he claimed that Countrywide conspired with LandSafe and homebuilder KB Homes to inflate the appraised value of homes, boosting the size of the lending giant’s loans to homebuyers. In order to accomplish this, the lending giant allegedly used a number of strong-arm tactics to pressure appraisers to report favorable home values.
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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How did Wall Street make all that money on “securitization.”

Servicers did not make any advances. They never did and they never will. They said they did but they didn’t. If you read the prospectus carefully you will see that the money from investors is divided into three parts.

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The first part is the purchase of a certificate that promises payments to the investor based upon a formula that is independent of any homeowner debt, note or mortgage. It does not commit the Investment Bank to using the funds in any particular way. But the payments are partially indexed on the performance of an arbitrarily chosen group of loans that are not owned by anyone.
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The second part is the establishment of a pool of funds controlled by the Investment Bank which also does not have any restrictions as to its use. The prospectus reveals that investors may be receiving payments out of the pool of funds, which obviously comes from their own money. This is the source of what is labeled as servicer advances.
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By labeling these payments as servicer advances, and by providing that servicer advances will be paid to the master servicer (i.e., the Investment Bank) the so-called securitization scheme creates another Profit Center.
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Investment Banks can claim return of servicer advances that they never advanced. By doing that they not only create the profit Center but they also able to claim that it was not Revenue for tax purposes.  A lot of the bookkeeping, financial reporting and tax reporting is based on this strategy.
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In my opinion it is not legal. But I am certain that it is not legal from the perspective of the homeowner, who gets no credit for any payments or profits made in the scheme because nobody maintains an account in which the homeowners debt is claimed as an asset; this results in literally no place to credit the homeowners debt for incoming payments and profits that actually offset any potential liability of the homeowner.
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The third part exists by implication. The normal agreement (prospectus) would provide for a specific use of proceeds from the proceeds of an offering of any Securities or certificates for mortgage bonds. This is absent.
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The reason that it is absent is because the balance of the funds are pure profit to the Investment Bank. this is because of the second tier of a yield spread premium that is not widely understood in legal circles because in legal circles they mostly have no experience or knowledge of Finance. I do. As a former investment banker who actually practiced literally on Wall Street I understand exactly how this happened.
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The investment bank has complete discretion as to what to do with the money that investors have paid them — something that never exists in the offering of securities to investors but does exist in so-called securitization plans. This is the holy grail for investment banks — issuing securities in the name of nonexistent entities. Instead of getting their normal fee of at most 15% of the proceeds, they get it all. 100%.
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They issue certificates in the name of a trust that does not exist. The actual Trust Agreement (NOT THE PSA) corroborates this by stating that the trustee has only one function: to hold legal title to loan documents. The beneficiary is the Investment Bank.
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And of course the role of a trustor or settlor is completely absent because there is nobody who has paid value in exchange for receiving a convenience of ownership of the underlying debt of any homeowner. *
So the Investment Bank, to simplify for this article, is promising to pay the investor at a rate which appears to the investor to be in excess of market rate but is far below the amount charged to homeowners. This strategy enables the Investment Bank to profit on several different levels.
  • first, the yield spread premium is the difference between the amount of money that needs to be paid to homeowners for issuance of what is labeled as loan documents, versus the amount of money the investment bank received from investors.
    • So if an investor paid $1,000 expecting a 5% return, the investor was expecting $50 per year.
    • But the Investment Bank funded a loan at 7.5%.
    • This means that in order to satisfy what they had to pay to the $1,000 investor they only needed to to pay the homeowner around $666 leaving a $334 pure untaxed profit.
    • Right there for every $1 they paid the owner the investment bank received $0.50.
    • In addition, by placing themselves in the position of Master servicer, they were the ultimate recipient of payments received from homeowners which in many cases exceeded any planned payments to investors.
    • NOTE THAT THIS IS WHY SUBSERVICERS LIKE OCWEN ET AL REFUSE TO TELL YOU WHERE PAYMENTS FROM HOMEOWNERS ARE SENT. FIRST THEY DON’T ACTUALLY RECEIVE THE MONEY AND SECOND THE MONEY IS NOT BEING SENT TO THE CLAIMANT IN FORECLOSURE, CORROBORATING THE DEFENSE NARRATIVE THAT THE NAMED PLAINTIFF OR BENEFICIARY IS NOT THE PROPER CLAIMANT NOR DOES IT POSSESS ANY CLAIM AGAINST THE HOMEOWNER.
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The fourth aspect is that under current systems and processes that are generally accepted on Wall Street, most Investments are held in street name. Investors do not receive any written document like a stock certificate or a bond when they buy it. Holding a security in street name means that for all practical purposes the Securities firm owns it for the benefit of an investor. THE ONLY EVIDENCE OF OWNERSHIP THE INVESTOR GETS IS A STATEMENT FROM THE SECURITIES FIRM IN WHOSE NAME THE SECURITY IS REGISTERED.
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And while it is true that the law says that an investor is the beneficiary of an arrangement wherein the securities firm holds title in trust for the investor, there’s nothing to stop the Securities firm from trading on the existence of the certificate as if it were their own. This Is how they are able to obtain insurance contracts and hedge contracts that are payable to the investment bank rather than the investors who put up the money.

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Note that this sleight of hand maneuver lies at the center of what is falsely labelled as the securitization of residential mortgage debt. The designation of a competing bank to serve as trustee of a nonexistent trust gives the scheme an institutional appearance, which in turn causes lawyers and judges, who know nothing of finance, to assume that they are dealing with an institution versus a lowly homeowner.
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They further assume that XYZ law firm represents U.S. Bank as trustee blah blah blah. But U.S. Bank has no retainer agreement with XYZ law firm and never heard of them. U.S. bank neither directs the lawyers nor will it allow its name to be used on any settlement or modification agreement that in the ordinary course of business would be legally signed by U.S. Bank. Any insistence that U.S. Bank sign, even though it is named as beneficiary or Plaintiff, is simply a deal killer.
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And don’t forget that U.S. Bank is not a trustee. That is another label used to misdirect homeowners, lawyers and judges. A trustee is someone who actively manages the active affairs of trust property. there is no trust property. There is no trust business. ANd the party named as “trustee” doesn’t even have the power to inquire as to any matter that might be called the business, assets, liabilities, income or expenses of the so-called trust.
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By naming U.S. Bank as the legal title owner for the benefit of the investment bank they are saying nothing. U.S. Bank did not receive legal title to anything. In order to get legal title it had to be the recipient of a conveyance. That is where the banks want the court to stop. But the conveyance, under all current law going back centuries can ONLY be issued by one who possesses rights to the asset conveyed to the trustee to hold in trust for the beneficiary of the trust.
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Note also that investors are not and never have been beneficiaries and that claims or arguments or implications that they are somehow, as creditors, represented by a nonexistent trust or nonexistent trustee are preposterous.
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In fact, there is no claimant, the foreclosure mill has no client that is in litigation and the named Plaintiff usually does not exist.
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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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In the meanwhile you can order any of the following:
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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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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.

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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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BETA TEST — DISCOVERY SUPPORT

Discovery

In the meanwhile you can order any of the following:

*CLICK HERE TO ORDER TERA

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

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*

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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*CLICK HERE TO ORDER TERA

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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.

*

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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*
*
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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.
*
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.
====
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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In the meanwhile you can order any of the following:
*
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. 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.
*
Please visit www.lendinglies.com for more information.

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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In the meanwhile you can order any of the following:
*
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. 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.
*
Please visit www.lendinglies.com for more information.

Who Can Foreclose?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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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.
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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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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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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? 

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

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. 

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