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The main obstacle to homeowner success in the courtroom is the asymmetry of information causing the homeowner to believe that they were part of a loan transaction instead of merely being compensated for a concealed business plan that was completely reliant on the homeowner’s unknowing cooperation. The homeowner did not receive this information for two reasons. First, no reasonable person would accept the deal without significant compensation. Second, no reasonable person would accept the deal at all. 

Just to add some clarity and simplicity — none of the paper issued and sold by Wall Street brokerage firms was backed by anything. It is erroneous to assume that any sale of any asset occurred. Securities were sold but none of them represented any ownership, right, title, or interest in any asset.

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“Because corporations and their lawyers know most consumers don’t have the time or wherewithal to study their new terms, which can stretch to 20,000 words — about the length of Shakespeare’s “Julius Caesar” — they stuff them with opaque provisions and lengthy legalistic explanations meant to confuse or obfuscate. Understanding a typical company’s terms, according to one study, requires 14 years of education, which is beyond the level most Americans attain.” NY Times Editorial

Most homeowners sign documents at closing (or modification) because they believe their intentions are properly presented in those documents. They are wrong and they don’t like admitting that. We have accepted a world in which lay people are told that lawyers revewing contracts are pointless. And even where lawyers are employed, they rarely possess the skill set necessary to understand what is really happening. Everyone sees the deal through filters that require the reader to think of the deal as a loan — without any critical thinking or knowledge. — Neil F Garfield, April 6, 2006

Anyone who thinks that stockbrokers have an interest other than a profit from the sale of securities does not understand centuries of marketplace transactions, laws, rules, customs, and practices. Banks make loans. Private lenders make loans. Brokers don’t; by definition, they are supposed to be intermediaries. Periodically these brokers on Wall Street have tried to pull the wool over the eyes of regulators and investors so that they still appear to be intermediaries when in fact they are the only principal. The result has always been, without exception, catastrophic for everyone except the brokers who use a common theme: “You can’t punish us with producing apocalyptic results for finance, and your society.” As a society, we are still buying into that threat. It isn’t true and never was true. And so it goes.

The Times’ editorial points out that tech companies are using and abusing “shrink-wrapped” agreements and policies that the consumer must click “Agree” in order to gain access — often to their own information. This is not a new concept. I remember when I was on Wall Street and we were drafting prospectuses and agreements for Initial Public Offerings, one of our guiding principles was to bury anything negative under an avalanche of words. And because nobody wants to admit they did anything stupid or foolish, investors tend to think and insist they knew what they were doing. And that is why those of us who are insiders in securities brokerage privately refer to the New York Stock Exchange as the world’s largest dry-cleaning establishment.

[Hat Tip to Bill Paatalo] And that is the essence of successful con jobs. As a lawyer, I have represented some highly successful con men. And they all told me the same thing. the con only works if the “mark” (i.e., sucker) adopts it as their own. People con themselves. Take Charles C Parker for example:

George C. Parker (March 16, 1860^[1] – 1936) was an American con man and prophet best known for his surprisingly successful attempts to “sell” the Brooklyn Bridge…Parker used various names as a con man, including James J. O’Brien, Warden Kennedy, Mr. Roberts and Mr. Taylor.^[4]

In addition to his Brooklyn Bridge scam, other public landmarks he incorporated into his scams included the original Madison Square Garden, the Metropolitan Museum of Art, Grant’s Tomb and the Statue of Liberty.^[5] Parker had multiple methods for making his sales. When he sold Grant’s Tomb, he would often pose as the general’s grandson, and he set up a fake office to handle his real estate swindles. He produced convincing forged documents as evidence to suggest that he was the legal owner of whatever property he was selling. He also sold several successful shows and plays, of which he had no legal ownership.^[2] 

Like the mortgage meltdown (which continues through the writing of this article), in many (but not all) cases, Parker targeted people fresh off the boat who understood little English or American Culture. So they relied upon what he told them and then they imagined the rest. Some people were forced off the Brooklyn Bridge when they started erecting toll booths, as the new owners.

In every con job the paperwork generally has the look and feel of real documents and says, in the beginning, what you expect it to say. So people who do not have 12 weeks to parse thought the language of everything said and not said, simply assume the rest. They are conning themselves. And the perpetrators will often point to the content of what was signed by the layman as providing that the very thing that punished the consumer was disclosed in some fine print wording buried deep within all of the documents that were signed. And I can tell you from personal experience that the art of writing such documents on Wall Street relies heavily on implying something without saying it.

For example, a loan in 1980 would always refer to the loan and would recite that the Lender was Lender who was giving a loan of money to the borrower who was a borrower, receipt of which loan was acknowledged. That is and was the basic language for any loan for centuries — until around 1998. That is when the reference to a loan was dropped and the documents signed by the homeowners started to change —merely referred to the execution of a note and the execution and recording of a mortgage. The loan was implied because what else could it be? The success of this sleight of hand is well-known. Trillions of dollars poured through the hands of securities brokers who prospered during the worst crash since the Great Depression — plus receiving trillions of dollars in “bailouts” and “bond purchases.” Everything else was reduced to rubble.

But consumers and their lawyers have still failed to appreciate the significance of this paradigm shift. Under the new framework, any payment could be dressed up as a loan and therefore a legal demand for its return would be legal, proper, ethical, and moral because it was a loan.

The way this works to the extreme disadvantage of homeowners as consumers and the extreme advantage of Wall Street “banks” is this: First the con (hook): “We are lenders and you’re making applications for a loan. Therefore any transaction we do is a loan.” Then the consequences in which “We never said that we were giving you a loan. We only said we would call it that.” And the “borrower” is left without any responsible party being a lender, no loan account receivable, no creditor, no compliance with lending laws, and that means there is nobody with authority to do anything about your loan like administration, collection, modification, or enforcement. Is that a loan?

Let’s go back to the beginning. The expectation of the homeowner was that he/she was a borrower in a loan transaction. He/she thought that the application for a loan was submitted to a lender and was underwritten by someone with a risk of loss — i.e. a stake in the success of the transaction as a loan. He/she had a reasonable belief that as a loan transaction the party receiving the loan application and the party underwriting the transaction were both governed by Federal and State lending laws. As such, the responsibility for the viability of the loan, accuracy of the loan appraisal, and risk of loss was squarely on the “lender.”

Wall Street banks did what they do — the separated out functions so that only the part that looked like a loan was shown to the homeowner. For the most part, applications for loans were submitted through intermediaries who presented themselves as loan brokers and sometimes misrepresented themselves as lenders (simply because they had a license to act as a lender). In some cases, the parties accepting the applications did not legally exist. They were just names — but that did not matter to Wall Street brokers because they were not really making loans.

The underwriters were aggregators of data providing a service (e.g. Countrywide)— i.e. laundering data to make it look like a pool of loans was being created for “tranches” (layers) of fictitious entities. This service was provided to the brokers through entities totally under the control of the brokers  — for purposes of their real business — selling securities to investors. (Does anyone really think that Wall Street banks ever had any interest in lending money?)

The “aggregators” arranged the data in reports that gave information on thousands of transactions. They never said they were loans and they never said they owned them. But that is what everyone assumes. We are conning ourselves because we can’t imagine what else it could be.

The Wall Street stock brokerage firm calling itself an “investment bank” borrows $1 Billion on short-term credit for example using expected sales of securities as collateral. The broker then sells the securities to investors and repays the loans. In the interim, the money from the loan is used to fund, on average, around $700 million in transactions with homeowners.

The other $300 million is concealed “trading profit”. These fictitious profits occur when the broker shows a sale (only on its own books) of $700 million face value of notes for $1 billion. That false “sale” occurs between a “depositor” who does not own the debt, note, or security agreement and a “trust” that legally does not exist because it has nothing in trust that was entrusted to the named “trustee”. the “trustee” has no right, title or interest in the transactions, nor any right or obligation to seek or receive any information about the nonexistent contents of the”trust” or any activities undertaken in the name of the “trust.” (In other words, it is not a trustee).

All entities are owned or controlled 100% by the broker. This is the holy grail of investment banking. Selling securities without being required to turn the proceeds of the sale (money) over to any issuing entity because in substance the issuing entity is the broker. The extra $300 million trading profit is usually performed in a transaction that is both offshore and off-balance sheet so there is no report of it — until the broker wants to show an increase in profits to bolster the apparent value of its own common stock trading in the marketplace. Recent reports from the big “banks” that are in reality failing, indicate significant “trading profits” that are simply repatriating the money they stole from investors.

Investors were never told all of their money would be used for the origination or acquisition of loans. They just assumed it despite concealed language in the prospectus that did not quite promise anything other than a potential, discretionary revenue stream from the broker that was often disclosed as unsecured and expressly unrelated to any obligation owed by any homeowner. Investors made this assumption because after all the brokerage firm was a broker, not a principal. They were conning themselves. Investors were NOT beneficiaries of any trust, real or imagined but they thought they were because they assumed they were.

It was later when investors (e.g. pension funds) discovered that the broker had no interest in underwriting loans, no interest or intent of having a risk of loss or no intent for complying with any lending statutes, rules, or even custom and practice in the lending industry; investors were rudely awakened to the fact that they had no legal interest in enforcing anything against anyone. They had, as in every con, conned themselves with an assist from the con men — Wall Street brokers.

Investors were left with a “Security” that was virtually worthless because it was discretionary, unsecured, and based upon reports that the payor (broker) could issue in its sole discretion. But if they admitted all of that, they would be required to show the loss of value of the “certificates” (securities) that they had purchased which would result in devaluing the entire pension fund, which in turn would probably lead to dismissal of the fund manager.

So they sued the depositors or “sellers” for bad underwriting even though there was virtually no underwriting involved. The more savvy investors with more savvy lawyers received larger settlements without ever saying the whole thing as a scam — because they were being paid to keep silent about the true nature of this scheme. The smaller, more unsophisticated investors with lawyers who were not well versed in investment banking and securities brokerage received as little as 20-30 cents for each dollar they invested. That is what caused small banks to fail. They were trapped by the con. They too had been investors seeking a “higher return.”

The truth is that most pension funds are over-reporting the value of their assets. That means that at some time in the future, the ability to fulfill pension payments will be correspondingly reduced. Only by that time, it is highly likely that nobody will make the connection to “securitization debt” that never occurred. Even worse, the beneficiaries of pension funds and other stable managed funds still won’t realize that if they are faced with foreclosure, and they all away, they are not just giving up the largest investment of their life; they are also undermining the value of the fund that feeds them.

All of that leads to the question of what can homeowners do about this?

The answer is simple and reduced to three elements — existence, ownership, and authority. In the 1980 loan, the Lender had an entry on its ledger that was a reduction of cash to pay for the loan. In double-entry bookkeeping, this was followed by an increase in loan receivables by the exact same amount. And that is how the loan account receivable is created. It serves as the legal basis for asserting the existence of the loan and the account history for debits and credits throughout the life of the loan.

As some readers have divined from what I have written above (and elsewhere), no such account was ever created. If those ledger entries had been made, then the brokers would have actually securitized loans by selling off pieces of each loan to multiple investors. But that would have limited the brokers to selling the loans only once. If they sold loans more than once it would have been a fraudulent scheme bearing criminal accountability. So they didn’t sell them and that means they didn’t securitize homeowner transactions, which were not loans in the first place.

The brokers paid homeowners money. That much is generally true (although questionable in refis). But the brokers wanted no part of losing money if the homeowner failed or refused to make a scheduled payment. They had no risk of loss. They had no loan account. But by concealing the true nature of the business scheme — i.e. the creation, issuance, sale, and trading of securities — and using the homeowner’s knowledge against him/her, they convinced everyone that the execution of the promissory note was one exchange for the nonexistent loan. The securities were based upon the illusion of a loan transaction but certainly not the reality of a loan transaction.

Adding insult to injury then, the homeowner having played a crucial role in the illusion of a loan is then tricked into giving back the only reason why he/she entered the transaction in the first place— the receipt of money. In short, that is a return of the only consideration for involuntary participation in a securities scheme about which the homeowner knew absolutely nothing. Worse yet, the homeowner believed it was a loan and so agreed to pay “interest” and “fees” on top of returning the only consideration for the deal. This left the homeowner with negative consideration for the deal, plus concealed risks in the form of unmarketable loans, inflated appraisals, and the complete inability to reach anyone with ownership or authority of the transaction to work out arrangements that were necessary to correct the situation.

With no loan account that could be presented without committing perjury and fraud, the brokers hit upon the scheme of using still more intermediaries who were called servicers. The servicers did virtually nothing. All receipts are collected via third-party vendors who are completely controlled by the brokers. The servicers are hired to interface with homeowners, reassure them that their loan is under management, and present a “payment history” about which they know nothing because they never collected a dime from the homeowner.

Servicers are always thinly capitalized entities that can be thrown under the bus for accounting or servicing or collection irregularities. They hire employees or contract employees who know less than the servicer. these people are presented as “witnesses” in foreclosure proceedings. Such people are the only “witnesses” at trial in foreclosure cases. They’re not legally competent and travel along a very thin line between deception and perjury.

The payment history is actually printout from a data record prepared for enforcement only by third-party vendors who process payments from homeowners. Those payments are scheduled, but not due since they are paying off a loan account that does not exist. You will never find any payment history that purports to be the ledger of any creditor — i.e., the party who is named as claimant, beneficiary, or plaintiff in foreclosure. That is because no such ledger exists.

On some level, there are dozens of foreclosure defense lawyers who have realized that the documents used for foreclosure are all fabricated with false information. But only those who have persisted have either won the case or settled in extremely favorable terms to their clients as homeowners.

The time to correct this was 20 years ago when the Federal Reserve skipped regulation in the mistaken belief that market forces would make any needed corrections. Alan Greenspan who was head of the Fed has admitted that was a mistake. It is now up to homeowners and their attorneys to fight these foreclosures at every turn and win. This task will be made far easier if changes in the administration in Washington DC result in an acknowledgment of the obvious facts: the money paid to homeowners was not a loan. It was compensation for involuntary participation in a business scheme. Market forces dictated the amount of that payment. Brokers have no right to recover it.

As I have stated for a decade and a half, investors and homeowners are in the same boat. They should join forces and fight the same battle. the intention of both was a lending transaction. Neither one of them got what they intended. Current brokers and “servicers” should be forced out of the picture and regulators should stop pretending that REMICs exist or that the securities issued were unregulated mortgage-backed bonds or certificates. They were never mortgage-backed. There were no mortgage loans. Those mortgages secured a promissory note that was issued without the homeowner receiving consideration.

The only deal that was completed was the business scheme of creation, issuance, selling, and trading securities. Homeowners were already paid for that. Nobody was ever legally entitled to seek or receive payments that returned that compensation. If that compensation is too high, then let the brokers come to court and file a reformation action.

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

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If it were true that the claimants and plaintiffs in foreclosures were real, you would have reams of pleading, exhibits, and evidence showing that — and there would be very few defenses left for homeowners.

in 14 years of challenges from me — in and out of court — the banks have failed to produce any evidence that isn’t false and fabricated and they have lost their foreclosure cases most of the time because of that —  but only if they were challenged.

The banks have known that reformation is their only way out. They have known for many years. And quietly, because nobody understood what they were doing, they have been doing exactly that through the uninformed consent of homeowners who enter into “modification” agreements. 

Both law and common sense dictate that claims of any type against homeowners must only be brought by people who have suffered some injury resulting from something the homeowner did or did not do. Once you strip the presumptions arising from the facially valid transaction documents the foreclosure mill has nothing but an arcane legal argument to get their way. And it is only by wearing down the homeowners and intimidating the lawyers that would defend them, that the banks have, thus far, been successful. 

Bob Hurt and others have been paid agents of PR firms for the banks for over 10 years. They are ramping up criticism since I ramped up the attack with Appellate briefs, my announcement of petitioning the state Supreme courts for rule changes, the blog, and the radio show.

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see SCWC-18-0000071

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There are several things in this case that I find astonishing.

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Thursdays LIVE! Click in to the Neil Garfield Show

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Host attorney Charles Marshall will address on today’s Show anticipated 2021 trends in foreclosure nationwide, through the lens of the now “new normal” of an interlay of Covid-19 restrictions micromanaging all aspects of human life. Whatever one thinks of the impact of the actual Covid-19 virus on public or their own personal health, it is indisputable that the huge and dense and all-encompassing governmental architecture which has built up to enforce restrictions on human behavior now regulates every facet and aspect of Americans’ lives. Naturally this architecture greatly impacts trends in foreclosure. Today we discuss those trends and what to expect. Listeners and interested others have asked questions as to what to expect in the following areas of foreclosure law and practice. Here are some of the most salient questions:

– Will there really be a forecloure tsunami in 2021?

– Will the eviction moratorium be maintained anywhere around the country and will Congress act to reinstate the 2020 rules?

– How will jury trials be held in 2021, and what will be the ‘social distancing’ requirements? – What trends should we expect? in the areas where foreclosure impacts are the greatest: judicial foreclosures, non-judicial foreclosures, unlawful detainers, bankruptcy practice.

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Hat tip to Summer Chic

There are many ways this fraudulent conduct can be stopped or modified. One of them is for taxing authorities to take notice that most of the money generated from the scheme was never reported as income resulting in astronomical underpyments of income tax, transfer taxes, recording fees, etc. Sales of securities were dressed up as IPOs resulting in reports of minor fee income to “underwriters” (i.e., securities brokerage firms calling themselves “investment banks.”).

I would point out that in 2008 I was lead consultant to the Arizona legislature on balancing their budget by levying on the so-called mortgages for unpaid taxes and providing substantial relief to homeowners. The committees and the executive branch accepted the plan and only disagreed with me as to the amount of relief that they could get. I said $10 Billion, but they computed it as “only” $3 Billion.  Poltics intervened at the last minute pressure from banks) and the plan was never enacted.

The “underwriters” were in fact issuers who sold “certificates” under the name of a trustee and trust which had nothing in it. The certificates were IOUs from the investment bank. That is not a taxable event. It’s just borrowing money. But the money does not get repaid to investors in full. And the sale of hedge products and derivatives is also not reported as income — because the investment banks lie about the transactions (all of them).

The money from investors was far more than the money paid to homeowners. The difference (which I have called a tier 2 yield spread premium) was parked in off shore accounts and then  repatriated as needed, with the banks reporting “trading profits” as the unowned “portfolios” were “sold” to the nonexistent trusts in nonexistent transctions. This is what enables them to report higher earnings per sahre as needed to support their stock price. But the rest of the money is never taxed and the ROI on those funds or investments offshore is never reported.

Add to that the unpaid transfer and recording taxes each time the “mortgage” was suppoosedly transferred for purposes of initiating foreclosures plus any income tax due ins tates that have income taxes, and you have a tidy sum due to each state and the federal government. Instead the IRS and other taxing authroities have so far looked the other way thus granting trillions of dollars in corpoate welfare to the banks while the rest of the economy (and government budgets) suffers. The capture of all unpaid tax revenue fromt the banks would in most cases completely balance the budget of every government authority and then some (surplus).

Then you have the foreclosures which are strictly unreported revenue. And you have homeowners making scheduled payments that are probably not due to anyone. That is also unreported income because the proceeds of such collection activity do not result in any reduction of any loan account receivable because there is no loan account receivable and there is no loss from any homeowner failing or refusing to make a scheduled payment. There is no loss becasue hte proceeds form the falsely reported “securitization” scheme has resulted in windfall profits, commissions, bonuses and other compensation to the securitization players and the foreclosure players. They all get paid all of the time — even the investors.

So the banks write off the payments to investors as an expense and they might even be writing off the payments made to homeowners as an expense resulting in a negative tax on the entire venture. Homeowners think they are getting a loan but in fact theya re getting a comission or license fee.

Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.

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FREE REVIEW: Don’t wait, Act NOW!

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

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THE COMING WAVE OF FORECLOSURES: ARE YOU READY?

Thursdays LIVE! Click in to the Neil Garfield Show

Call in at (347) 850-1260, 6pm Eastern Thursdays

Each payment made by the homeowner to a self-proclaimed servicer is being collected by a third-party vendor, probably under the control of Black Knight. That money is not going to anyone who maintains a loan account receivable on their accounting ledgers. The payment is not reducing the debt because the debt account does not exist under all scenarios in which false claims of securitization are present — and virtually all securitization claims are false. Neither the servicer nor the named claimant ever sees a dime from payments or foreclosures.

In simple language, the payment is not due. It is impossible to “fall behind” or become “delinquent” or to issue a “Notice of Default” on a payment that is not due. But if you admit the delinquency or default you have thrown away the biggest investment of your life — your home. Once you have admitted the default you have admitted the existence of a loan account even though it does not exist. It is nearly impossible to take back that admission which is why most homeowners walk away or lose in court.

The three things you need to know about how to defend your home:

1. The loan, if it ever existed, no longer exists because in the process of so-called securitization the obligation was extinguished from the accounting ledgers of all securitization participants.

2. Even if the loan existed, nobody under this scenario can offer proof of payment of value for the underlying obligation as set forth in Article 9 §203 UCC, adopted in all 50 states.

3. You don’t need to prove anything. But you must contest everything relentlessly and aggressively in discovery and motions.

Tonight I will take questions on this and related topics.

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The challenge to homeowners and attorneys who represent homeowners in foreclosure proceedings, is to see the written documents not as presumptively true, but rather as presumptive lie.

It is true that the corut will look at documents that appear to be facially valid and then apply legal presumptions based upon the facial validity of the document. But that only happens when the document’s facial validity is uncontested — and even when the judge applies those presumptions, they are rebuttable. The mistake made by most homeowners and their lawyers is in assuming that the documents are in fact an accurate memorialization of a transction that occured in the real world. They stop their inquiry at “You got the money didn’t you?”

They accept that it was a loan with a lender and a loan account receivable on the accounting ledgers of a lender. In so doing they completely miss the fact that their homeowner client was paid for being inducted into a concealed business plan and not as part of any loan that was recorded as such on the “lender” side. They completely miss that there was no risk of loss, no loss and that everyone in fact was paid even as the foreclosure process is on-going.

see https://www.courtlistener.com/opinion/1544703/in-re-lancaster-mortg-bankers-llc/

MICHAEL B. KAPLAN, Bankruptcy Judge.

“This matter comes before the Court on the motion for summary judgment filed by Defendant, Lion Financial, LLC (“Lion”) and the cross motion for summary judgment filed by Plaintiff, Peggy Stafford, Chapter 7, Trustee (“Plaintiff’ or “Trustee”) for the Debtor, Lancaster Mortgage Bankers, LLC (“Debtor” or “Lancaster”). In this adversary proceeding, Plaintiff asserts an ownership interest in certain mortgage loans originated by the Debtor, a mortgage lender, as well as the proceeds thereof. Lion contends, however, that said mortgages are not property of the estate; rather, Defendant, which purchased the subject mortgage loans from the Debtor, asserts that it is entitled to the loans and all proceeds pursuant to the terms of its pre-petition contractual agreement with the Debtor. [e.s.]The Court heard oral argument on May 19, 2008 and ruled in favor of Lion.^[1] This opinion supplements the Court’s bench ruling.”

“3 During the period 2004 through 2007, Lion, pursuant to a purchase agreement (“Purchase Agreement”) dated August, 18, 2004, would purchase from Lancaster individual loans or bulk pools of loans on a regular’basis, often as many as 30 loans per day. Lion paid for each loan in full by means of wire transfer.” [Editors’ Note: Lancaster was a strawman. But nobody, including the court, brought that up. The purchase agreement predated the loans. These were part of the genre of “Purchase and Assumption Agreements” in which third party conduits were acknowledged as owners of the loans even before applications for loan were received. In most cases such orginators were not permitted to receive or disburse the loan proceeds. Closing money arrived FBO (for benefit of) the orignator from investemtn banker controlled entity.]

“4 The original promissory notes associated with each file were then stamped “Pay to the order of [blank], without recourse” by Lancaster and delivered to Lion. In the event that the original of the Note was lost, Lancaster agreed to deliver an affidavit of lost Note or similar attestation to Lion, together with a true copy of the Note.” [Editor’s Note: Why the lost note? Because it was and still is custom and practice to destroy original notes at the time of closing. It was custom and practice and contractually requried for the “Mortgage banker” or “originator” to have a “representative” endorse the note contemproaneously with closing. The ntoe ewas then destroyed after it was imaged. This is part of an ongoing effort to change from original documentation to copies that are recreated and presented in court as though they were original documents. Allowing this change opens the door to print promissory notes (regardless of their status) on a virtually infinite basis creating vast fake money supplies. The current “shadow banking market” has cash equivalent instruments and contracts carrying a nominal value of 20 times the total of all fiat currency in the world.]

“5 Lancaster would generally execute an assignment of mortgage and in some instances the mortgage was recorded. Generally, the mortgage assignment was not recorded; however, Lion was advised by Lancaster that the property transfer would be registered with Mortgage Electronic Registration System (“MERS”) by Lancaster.” [Editor’s Note: So the assignment of mrotgage was executed but often not recorded. That gave the investment bank the flexibility to name ANYONE as the virtual creditor. That would not have been a bad thing had the investment bank not been concealing the fact that it had extinguished the obligation as it was “acquired.” The law does not recognize virtual creditors and there should be no change, but Wall Street banks acting through intermediaries, are seeking to make that change official. In Hawaii, lawyers recently filed a petition for certiorari on a case that was lost twice by them (judgment for homeowner). Their real goal is in their ask for a change in the rules to allow them to name virtual creditors and then be protected by presumptions arising from the apparent facial validity of documents.]

“6 Lion would subsequently resell the loans or have such loans serviced by Specialized Loan Servicing, LLC (“Specialized”). “[So Lion was just an intermediary as well — for an investment bank, who was always the real party in interest. In the entire process, there were no entries on the ledgers of any company reflecting payment for the underlying obligation created by issuance of the promissory note — because there was no underlying obligation. At closing, the payment received by homeowners was disguised as a loan in order to get it back. This left homeowners with risks far exceeding the known parameters of the deal and without a lender or even a loan account receivable from which the homeowner could demand an accounting. It also left homeowners with no payment at all for their services in launching an astronomically profitable business of selling securities that were only discretionary promises to pay and/or that were bets on the future reports of investment banks who referred to the performance data on loans in which they had no interest.]

“In light of the foregoing, the subject loans are not property of the Debtor’s bankruptcy estate pursuant to § 541(d) and the Trustee may not assert an interest in the subject loans having priority over Lion. Likewise, Lion is entitled to the deed tendered in satisfaction of its loan on the Siguencia Property. Accordingly, the Defendant’s motion for summary judgment is granted and the Trustee’s cross motion for summary judgment is denied. “(e.s.)[Editor’s Note: What is good for the goose is good for the gander. If the originator did not own the loans and the intermediary conduit was treated as the owner, then it follows that the originator had no power to endorse the promissory note or assign the mortgage. A homeowner with an expert opinion affidavit that this is what happened in their case, can press the judge for a ruling that the source of assertion that the currently named claimant did not legally transfer or convey the note or the mortgage,  another homeowner victory would be in sight, although not guaranteed.]

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

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate 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 – not necessary if you order PDR PREMIUM.

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

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CLICK HERE TO ORDER CASE ANALYSIS

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

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

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

Please visit www.lendinglies.com for more information.

https://fs20.formsite.com/ngarfield/form271773666/index.html?1607374430702

https://fs20.formsite.com/ngarfield/form271773666/index.html?1537795749542

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For the last 20 years nearly everyone has had it wrong about the legal, moral, and ethical position of investors and homeowners. It is time to get it right.

The bottom line is that both investors (i.e., fund managers) and homeowners (falsely labeled as borrowers) bought a hologram of an empty paper bag. Public policy, law enforcement, and regulation utterly failed to learn and regulate the “new” derivatives. There were no derivatives. There were only lies. The same thing occurred with homeowner transactions in which the false labels promoted by Securities brokerage firms made their way into the lexicon and were treated as loans simply because the Wall Street brokerage firms said so.

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They paid the homeowner to acknowledge the existence of a fictitious loan transaction so that the investment bank could sell securities that were unrelated to ownership of the “loan.”

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That money is far from cheap. It will take everything you have and more.

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“ALL OF THESE FORECLOSURES ARE TAINTED BY THE PROBABILITY THAT EVERYONE HAS RECEIVED PAYMENT BUT THEY ARE TRYING TO GET THE PROPERTY TOO AS WINDFALL TO ONE OR MORE OF THESE FRAUDULENT PLAYERS. THE BORROWER IS LEFT HOLDING THE BAG WHILE EVERYONE ELSE GETS PAID OR BAILED OUT.” see https://livinglies.me/2008/09/11/foreclosure-defense-records-frequently-dont-exist-until-required-in-litigation/

The ONLY thing I had wrong was that there was ANY holder in due course and that ANY sale of any “loan” had taken place. I got that wrong because it was securities brokerage firms that were at the base of this scheme and they were definitely issuing securities. Like everyone else I had assumed that the securities must be related to “loans” and that investors were buying pieces of loan portfolios. It did not occur to me until much, much later that even that assumption was wrong.

It was only when the TARP rollout kept changing that it dawned on me that I had something wrong. The assumptions kept changing. First, it was to cover troubled loans — but the investment banks did not own the loans so it couldn’t be for that. Second, it was for the mortgage-backed bonds — but there were no mortgage-backed bonds. And the investment banks were selling them not buying them. And finally, they redefined the Troubled Asset Relief Program to generally toxic assets with full recognition that the investment banks were making money not losing money. Because the policy decision was to pump money into the financial markets, they didn’t care what it was called.

As the assumptions changed I began to re-examine my own. If the transactions with homeowners had been loans and the loans were securitized (i.e., sold off to investors) then why were regulators floundering? It is a pretty straightforward proposition. The credit markets had frozen because nobody wanted to buy the certificates, whose value was supposedly derived from ownership of the “loans.” The answer was obvious and it was the Federal Reserve that did it. They started “buying” “Bonds” at a window exclusively reserved for investment banks who were making up the “bonds” as fast as they could to get trillions of dollars in “relief” (i.e., bonuses) in addition to having made trillions of dollars in the run-up.

That still doesn’t explain TARP. The only trouble for the investment banks was the projected absence of revenue from the sale of certificates (labeled by the selling investment banks as mortgage-backed bonds) that amounted to no more than unsecured discretionary IOUs issued by securities firms calling themselves “investment banks”. Because of the way the “relief” program was structured, the investment banks were able to keep selling certificates to investors as though they were mortgage-backed bonds. So even the revenue was preserved.

Still, I couldn’t quite let go of the notion that there must be a loan account receivable on the books of some company. But in litigation with the fictitious claimants, I eventually realized that no such account existed. The “servicer” was working for a fictitious entity that had not paid for nor did it own any “loan” nor the underlying obligation, The servicer had been inserted to imply the existence of a loan account receivable in order to foreclose.

In thousands of cases, no servicer has ever asserted or demonstrated that it was the bookkeeper for the accounting statements of the party named as a claimant in a foreclosure. They could neither state the identity of anyone who owned the underlying obligation nor could they tell us who received the money that homeowners were paying. And it turns out that in most cases the “Servicers” were neither receiving any money nor were they keeping the books. this was all funneled to thrid-party vendors mostly controlled by Black Knight.

Foreclosure was the method by which the myth of the existence of a loan transaction was reinforced. Because the labels were consistently applied by the conduits, sham entities, and lawyers employed by the investment banks, and because the true nature of the deal had been consistently concealed, everyone believed the false narrative that the transactions with homeowners had been loans and that the holders of certificates were investors in those loans.

The concealment was successful and so millions of Americans were forced out of their homes by a void foreclosure process that resulted in revenue distributed to the various players in the foreclosure scheme and the various players in the securities scheme. But not all of them were forced out. Many, if not most, simply left the biggest asset of their lives because they did not understand that the money they had received was not a loan, it was a payment for their participation in launching the securities scheme that netted millions of dollars for each so-called loan.  They might owe tax on that compensation — after deduction for all the losses and risks they assumed in the transaction. But adding liability to what turns out to be the investment banks is adding insult to injury. And foreclosure in that context is cruel and inhumane.

On average homeowners were paid around 8% of the total revenue which seems fair. But then the deal was disguised as a loan which meant that the payment for their services had to be returned by the homeowner. This leaves the homeowner with negative consideration for sponsoring a securities scheme that made unconscionable profits through fraud and deceit.

So in the end I have concluded that neither the “loan agreement” nor the “securities deal” is enforceable against the homeowner. the homeowner had no opportunity to bargain or reasonable compensation because of the total and consistent concealment of the true nature of the deal. But we can start with what the investment bank obviously determined was the right amount — the amount paid to or on behalf of the homeowner. If the investment bank wants that money back then they are admitting they never had any intent to honor any contract with the homeowner. They are seeking to leave the homeowner with negative consideration for the deal — loss of equity because of inflated appraisals and nonviable payback schemes, plus loss of the only consideration they received from the investment bank, plus the “interest” paid, leaving all homeowners in a deeply negative position.

The “loan agreement” was no enforceable partly for the same reason that the securities deal is not enforceable. As a result of concealment, there could be no “meeting of the minds” the most basic element of an enforceable contract. And here again, consideration was totally absent. The investment bank was operating through sham conduits to lure the homeowner into what was labeled as a loan. but the investment bank had no lending intent nor any intention of establishing a loan account receivable on the accounting ledgers of any company or business entity. the “loan” simply did not exist to the investment bank. It only existed in the minds of the homeowner who accepted the label of “borrower.”

The homeowner “borrower” then issued a note and mortgage and the signature on other “loan documents” because of the belief that everyone involved was telling the truth and was operating in compliance with lending laws and common sense for lending transactions. In other words, the homeowner was operating under a false assumption created by lies, deceit, and concealment. The homeowner was not purchasing a loan product as you have seen above. There was no loan product. The homeowner was issuing the note as payment for something he/she never received.

As it stands then, here is my conclusion. Neither the securities deal nor the loan agreement legally exists and therefore there is nothing to be enforced. The normal remedy for such situations is rescission, but the issuance of derivatives on derivatives has added so many layers of additional investors who may be bona fined purchasers for value that rescission is not practical or reasonable. This is true even though those investors acquired no part of any loan and were only placing bets on the reports by the bookrunner investment bank’s reporting of data regarding the “performance” of loans that did not exist.

So the only other option, in my opinion, is reformation. Any stakeholder can ask for it. I think the obvious major stakeholders are simply homeowners and investors. The investment banks and servicers should be cleared out of the mix. The court would use its equitable powers to decide the terms of the total quasi-contract giving each of the real stakeholders their just reward and enforcing those elements of the contract that remain outstanding. This will provide substantial relief to both investors and homeowners and a strong stimulus to the economy — which was the original object of the bailouts and relief programs in 2008-2009.

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Wall Street banks can’t control everything. As the old adage goes “You can fool some of the people some of the time and maybe some of the people all of the time. But you can never fool all of the people all of the time.”

In a global economy, nothing happens in a vacuum. Although Wall Street has been able to maintain control over media and the courts in the U.S., they can’t control everything.

see https://www.lexology.com/library/detail.aspx?g=9ea48ee3-aeae-49ee-88a0-02132aa86005

Like Rip Van Winkle, American regulators are waking up to a reality that they failed to see or regulate. The true nature of securitization has been hidden behind a snowstorm of fabricated, misleading, and just plain lying documents. Active concealment has been practiced to keep regulators asleep and investors perplexed as to how they could have endured losses on “mortgage backed bonds” that were never backed by mortgages and not issued by the trust entity named on them. Homeowners are baffled by the losses too, unaware that there was no lender, there was no loan account and the incentive was to sell a business “opportunity” as though it was a loan.

But Wall Street banks can’t control everything. As the old adage goes “You can fool some of the people some of the time and maybe some of the people all of the time. But you can never fool all of the people all of the time.”

In Ireland the Supreme Court simply stated the obvious — you can’t bar a claim if the claimant didn’t know about the issue (because of concealment by the Defendant). But that is the entire strategy of Wall Street. Run the clock! By hiding from investors and homeowners the true nature of the transaction the banks were selling, they were guaranteed — as long s they kept up the concealment — that the statutes of limitation would run out.

So when investors woke up — partially — and realized that the industry underwriting standards for “loans” were never observed, they were fighting a losing battle even though American law provides for tolling of statutes of limitations based upon concealment. And now they’re realizing that the promise they received about getting scheduled payments was mostly discretionary and could be shut off at any time by the book runner investment bank. But their initial purchase may have been ten years ago or more.   Worse they are realizing that the transactions between Wall Street banks and homeowners were business deals, not loans and that enforcement was at best speculative — thus increasing the possibility that the investment banks would stop making scheduled payments.

And when homeowners woke up —partially — and realized the deal was not what they intended, they were fighting a losing battle even though American law provides for tolling of statutes of limitations based upon concealment. So claims under FDCPA, TILA, RESPA etc were all barred by the time homeowners tried to state the claim, but even when they stated it, they lacked the correct information to state a proper claim.

So now is the time to raise that issue and file the claims, fighting against the statutes of limitation. But remember that if you file it as an affirmative defense, then your claim is NOT barred by the statute of limitations. It is limited to up to the amount of the claim against you, but in proving your claim you will have (a) more leeway in discovery and(b) a higher likelihood of proving your defense narrative in the case in chief (foreclosure). And filing an affirmative defense does not appear to be a bar to also filing a counterclaim for declaratory, injunctive, and supplemental relief.

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