Back when we all made live appearances at seminars for lawyers seeking Continuing Legal Education, I would go to any CLE seminar that involved banking, securities, property law, contract law, or litigation. Any doubt about the threat I posed to the banks and their lawyers vanished when I went to those seminars. They clearly were not interested in how to prevent foreclosures or how to rein in excessive or predatory behavior by commercial banks or securities brokerage forms (as “investment banks”).
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They also were clearly disinterested in how to make corrections to corrupted chains of title caused by the misbehavior of banks. And nobody wanted to talk about the basic elements of an enforceable contract — and what could happen to those elements in the process that Wall Street calls “Securitization.”
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I am usually perceived as the enemy of banking, securitization “lending.” The subtle subtext is that I am the enemy of capitalism. But as you will see in this book I am merely the enemy of theft. Capitalism is the engine of our economy and investment banking is the engine of capitalism. At the heart of capitalism is securitization of assets — i.e., the sale of pro-rated shares of assets to distribute risk and reward and make the purchase of those assets more appealing to buy and trade.
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If the seminar was about banking law or foreclosures, I would register, enter the room and sit down. Immediately upon my being seated, the area around me would be cleared out by lawyers moving to other locations in the room. I was the only one seeking information about how to challenge banks, not represent them. The reason they ran was that they could be fired for merely associating with me in any way. If I reached out to shake anyone’s had out of cordiality, they would turn away. But some of them would tell me confidentially that I was 100% right and that they were in fear of losing their bar license or worse (going to jail).
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I suspect my reputation was broadcast far and wide to foreclosure mills because of a 6-day deposition that was taken in 2008. 16 of the largest banking institutions in the world employed the largest law firms in the country to test the prospective testimony of an expert witness in the securitization of debt. It was grueling. 8 hours per day.
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The witness was me. I was literally having silent heart attacks during the ordeal. I didn’t know I was headed for heart failure that would require the replacement of a heart valve in open-heart surgery. They said my critique was grandiose and my reply was that my critique was not nearly as grandiose as the fraudulent plan and scheme of their clients. They even bugged my home office, although I have no idea why that occurred or what they thought they might have gained. As far as I know, the deposition was never transcribed and certainly never published. And nobody with credentials has ever disputed a single factual assertion, factual conclusion, or legal conclusion contained in that testimony. So far, they have had 13 years to do it.
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I have been threatened with every type of prosecution without any effect. Despite all attempts to stop me in my mission, there has been a total absence of any person with credentials saying that I am wrong about the nonexistence of the current debts, wrong about the illegal appointment of a claimant who was disinterested in the outcome of foreclosures, and wrong about the lack of any right to say that a lawyer is representing a brand name bank, when that is not true. And nobody wants to talk about the erroneous application of “litigation immunity” that allows lawyers to make false statements about nonexistent claims —- and by extension protects the parties who concocted documents and stories that were not in the least based in facts or real events in the real world.
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And the threats against me are nothing when compared to the dozens of lawyers who were successful in foreclosure defense and then banned from such practice, or disbarred on baseless grounds or grounds upon which disbarment should never have been applied. This is paranoia based in fact and it accounts for why homeowners cannot find a lawyer to represent them in defending and confronting illegal foreclosures.
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FORMS THAT DO NOT INFORM
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The practice of law, even trial law, is all about forms that are published and used throughout American jurisprudence. When I started almost 50 years ago we maintained libraries in our office of “form books.” Now we have those form books online, from which we copy to our computer and paste into a new document what we want to say.
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Lawyers and pro se litigants are not required to create a new narrative for each document they produce – unless they are trying to do something that has never been done before. Law is all about precedent. And the practice of law is about following precedent. The practice is to find the form that comes closest to your situation and then tailor it to fit your needs.
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The difficulty for pro se litigants is two fold: (1) they don’t how to find and recognize the appropriate form and (2) they don’t know how to use or present it in court. This is compounded by the desire to find a form that is “good enough” and then rely on the judge to do the rest. Most pro se litigants do not realize that the judge is prohibited form acting as their lawyer. This ignorance has led to the widespread believe that the judges are corrupt when they make rulings that are adverse to homeowners. That is simply untrue.
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But the worst problems come from the fact that there are no forms for foreclosure defense that are approved for use, reflecting the realities of nearly a trillion dollars in settlements worldwide arising from hundreds of administrative findings of fact that the documents used in securitization and foreclosure are fabricated, false and forged. And worst yet, the documents for filing foreclosures are based on approved forms that are based upon doctrinal assumptions that have not been applicable to most foreclosures since 1995.
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THE JOB OF A JUDGE
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It is true that judges have biases. The reason is that they are human and they have personal opinions. But in most cases those personal opinions inform their decision, rather than control it. The job of the litigator defending a foreclosure is to direct the judge’s attention to his or her job — calling balls and strikes and then ruling on what is left for the court to consider in rendering judgment.
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The judge’s job is required to be performed in accordance with directions issued by the legislature and the Supreme Courts of the State and the Nation. If the legislature says that the minimum mandatory sentence of a crime is 20 years, the judge has no discretion to alter that, because of the constitutional doctrine of separation of powers. Only the legislature can pass laws. The court’s job is to apply the laws, not make them.
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WHO GOVERNS WHAT JUDGES CAN DO?
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However, it is accepted practice for the Supreme Court of each state to publish “guidance” that amounts to the enactment of law. One of the ways this is done is through publishing pre-approved forms that are not required but rather intended to be used as a guide in preparing lawsuits, defenses, affirmative defenses and motions.
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Such forms and guidance are the generally the result of committee research and planning based upon established statutes and case decisions. In that way the “research” has already been done and the net effect is a reduction in time and effort and therefore a reduction of cost to the consumer in hiring a lawyer to file a lawsuit, for example.
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The politics behind this process causes some corruption in the outcome. In the case of foreclosure law and defenses, this is especially apparent. Generally speaking the people who serve on the making committees are people who are thrust into those positions because they are supported by highly influential actors — like politicians who are backed by high dollar donations from extremely powerful commercial enterprises, like investment banks.
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Like everything else in foreclosure law and procedure, this shows up in the absence of things that would ordinarily be basic training. For example, other than the Garfield Continuum CLE seminars, there is not one instance about which I have been informed, in which lawyers are trained to defend foreclosures in seminars sponsored by any state or national bar association. But there are many seminars in which the prosecution of foreclosures is sponsored by state bar associations.
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This is odd because of the universal knowledge of the practice of fabricating false documentation depicting nonexistent events in the prosecution of foreclosures. Despite hundreds of billions in “settlements” and dozens of government and expert reports showing that the title reports in most countY reporting offices were fatally corrupted, nobody other than my enterprises has been sponsoring accredited seminars for lawyers in which potential winning strategies and tactics could be employed for homeowners who were being stuck with corrupted title through no fault of their own.
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Judges need continuing legal education too. But like nearly all lawyers, they are not getting it if it has anything to do with the validity and legality of foreclosures against homestead property. Instead they are informed by pre-approved forms that simply assume that everything is the same as it was 30 years ago. It isn’t and it it never will be the same again.
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THE ORIGIN OF THE PROBLEM WITH THE PRE-APPROVED FORMS
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You need to understand that the pre-approved forms were not created as the result of some conspiracy or corruption. It wasn’t even a mistake. Those forms, when created, reflected reality. The reality was that everyone could rightfully assume that the basic elements of the prima facie could be considered as though they were specifically pled if they merely made reference to themselves as a lender and attached copies of the loan documents. No allegation that the claimant was suffering a loss because it was almost always true that anyone who came forward with such a claim was in fact suffering such a loss.
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And yet, if you look at the old foreclosure lawsuits, they always said that the Plaintiffs were suffering a loss due to nonpayment. The reason is that the basic elements of a lawsuit were customarily stated even if they were not required to be stated according to approved guidance forms published by the Supreme Court. The basic elements, regardless of whether the case is in contract or negligence or anything else, are:
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- DUTY
- BREACH of DUTY
- DAMAGES
- CAUSE OF DAMAGES
So an example of this would be that Defendant had a duty to exercise care while driving. He failed to control his vehicle which ran off the road and hit Plaintiff causing extensive damages to Plaintiff. If it is a debt, then the example would be that Plaintiff gave Defendant money as part of a loan deal. Defendant agreed to repay the money. Defendant failed to repay the money, causing financial loss to Plaintiff.
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The fact that a proposed witness to a car accident was in Denver when the event is alleged to have occurred in Pittsburgh is a clever distraction. It causes the judge to think of the accident as real. The real questions are first whether there was an accident, and if so, did Plaintiff suffer any legally recognizable injury as a result of the accident? In foreclosures pointing to the nonpayment causes the judge to think of it as a default particularly when a default has been declared. But there is no legal basis for declaring a default if the declarant has not suffered any loss and does not represent anyone who did suffer a loss.
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The attribute of securitization as practiced on Wall Street that is most difficult to understand is that nobody gets less money as a result of homeowners Jones or Smith refusing or failing to make a scheduled payment. Everyone has either already been paid or continues to get paid. This is a cliff, not just an impediment, for claims for administration, collection, or enforcement of the homeowner’s promise to make a scheduled payment. No court is empowered to entertain a claim simply because a disinterested third party has information about the Defendants’ personal finances.
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There must be a present controversy (not hypothetical and not future) between the two parties in litigation where one owes the other a duty, failed to comply with that duty and the other suffered specific damages arising from the failure to perform a duty owed to the claimant. The banks have elevated the hypothetical default to the illusion of a present default and then prosecute claims as though the duty exists and it was breached as to them. No such thing has ever occurred in the context of securitization.
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Nobody ever had reason to change the basic long-standing rules and forms because they were working just fine. Then came false claims of securitization of debt as a cover for elimination of the debt as an asset — the loss of which would require a report of financial loss that would necessarily depress the value of the common stock of any company carrying such an asset on its financial records. But now the basic rules and pre-approved forms have been weaponized to allow illegal claims and unjust results. Wall Street simply “did away” with the debt until such time as they had an opportunity to claims the existence, ownership, and authority to administer, collect and enforce it.
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The only thing Wall Street needed to do was continue to promote the illusion that nothing had changed. The lawyers who came up with the scheme realized that their target audience was the homeowners who in turn would perpetuate the disinformation themselves. This is what supported millions of foreclosures, abandonment of homes, zombie foreclosures etc. It produced a reverse grassroots movement that as it climbed the chain of command in the courts and legislatures, it convinced almost everyone that nothing had changed and that if homeowners were to win the case, they would be getting an undeserved windfall.
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And yet, in thousands of individual foreclosure cases, homeowners were winning. By focusing their defense narrative on the existence, ownership, and authority to administer, collect and enforce the nonexistent debt, they were winning. As long as they were granted court orders enforcing their timely and well-drafted discovery demands for evidence of proof payment, ownership, and authority, they were winning because the opposition had no answer.
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THE WINNING STRATEGY
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Until the forms are changed and the courts start insisting on assurances that the named designated claimant is in fact a legal claimant possessed with a legal claim based upon a financial loss, the homeowner must, either pro se or with the assistance of counsel, fill in the gaps by not admitting a single thing that is said against them starting with “this is a foreclosure,” and culminating in a direct challenge to the existence of a financial loss that will be paid as a result of the foreclosure.
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Keep in mind that loss of future profits is not what is covered by statutory schemes allowing foreclosure. The loss must be the result in the diminishment of the value of a financial asset (“the loan”) arising from the conduct of the homeowner. If everyone is still getting paid, there is no loss. If there is no loss the law does not allow a claim for expectant profits — at least not in a foreclosure case.
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Also keep in mind that if the opposition cannot document the existence of the loan account receivable from the homeowner, the asset does not exist. Notes cannot be enforced t pay a debt that does not exist. Mortgages and deeds of trust cannot be used to force the sale of the property if there is no debt to satisfy.
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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.
Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business 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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