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

Posted on August 7, 2020 by Neil Garfield

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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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.

Filed under: boarding process, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure, foreclosure defenses, foreclosure mill, investment banking, jurisdiction, legal standing, Pleading, Presumptions, prima facie case, Servicer | Tagged: , , , | 4 Comments »

Tonight! Why There is No Valid Lien in Securitization Cases! PM EDT 3PM PDT

Posted on August 6, 2020 by Neil Garfield

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In a nutshell there is no valid lien. But in order to get to that conclusion you have to wade through the weeds and smoke screens that have been carefully constructed by the Wall Street Banks.

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The simple truth is that in most cases the origination of the homeowner transaction was table funded but it was not actually a loan.
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This means that the party with whom the homeowner thought they were dealing with was not a lender because a lender loans money and the investment bank that funded the transaction wanted no part of being a lender even though they were the one paying the money to the homeowner. In common practice and jurisprudence, this may be cause for a variety of defenses and claims, but it does not invalidate the entire transaction — even though it should.
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In the end, securitization results in no lender, no creditor and no loan account on the books of any legal person or entity. The problem that emerges for the Foreclosure Mills is that they must reconstruct, out of thin air, the debt that has already been retired through receipt of revenue from the securitization of data (information) about the loan and not the sale or securitization of the loan itself.
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The problem is that the loan account does not exist. it is not an asset owned by anyone. But in order to enforce the note and mortgage, they must create the illusion that the debt (loan account) does exist because that is what the law requires. So when it comes time to enforce, they have an insurmountable problem which can only be covered over by making false statements and using fabricated documents.
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They accomplish this by creating the illusion of transactions in which the nonexistent loan account is being bought and sold. That is what those assignments and endorsements are all about. When you demand proof of payment they can’t produce it because there was no payment. There was no payment because there was no account.
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My analysis has been consistent since 2006. It has been submitted in court thousands of times without rebuttal of any kind by any lawyer, financial expert or anyone else. If all of this occurs starting with the origination of the homeowner transaction then several things are true:
  1. The mortgage conveyance by the homeowner was void and should not have been executed or recorded because it did not memorialize any transaction in the real world — i.e., the homeowner was fooled into thinking there was a loan from the originator and therefore agreed to sign a note and mortgage payable to the originator, who was merely serving as a fee based servicer in the grand illusion.
  2. No conveyance of an interest in any mortgage or deed of trust is valid unless it also conveys the debt in exchange for payment. That didn’t occur between the homeowner and the originator. Payment was from the investment bank and the conveyance was to the originator who had no contractual relationship with the investment bank.
  3. The absence of a legal conveyance of ownership of the recorded mortgage lien to a party that claims it paid value for the original table-funded transaction, seals the fate of the purported lien, to wit: it was void and is now not subject to correction in a manner that could be recognized by law.
  4. The legal fiction of allowing the mortgage lien to continue is no longer available — unless both the alleged loan agreement and the concealed securitization agreement are combined through a legal process of reformation.
  5. Without reformation, the void mortgage lien is subject to cancellation and expungement from the record of title to the property as shown in public records of the county in which the property is located.
  6. While these are legally sufficient grounds for quiet title, it is my opinion that a pending refinancing deal would add urgency and reality to the claim.
  7. Beyond all reasonable doubt or any doubt for that matter, nobody will ever claim to own the debt and be able  to prove it through the only means legally available to show ownership of the debt: PAYMENT. 
  8. Homeowners are entitled to compensation for being drafted into a complex concealed scheme in which they are key players. 
  9. The concealed securitization contract was also void without reformation because no consideration was paid to the homeowner for being drafted into a securitization scheme in which all the benefits flowed to one side that did not include the homeowner.
  10. The  obligation of the homeowner remains inchoate — sleeping. It can only be awakened by reformation of the homeowner transaction using doctrine of quasi contract and quantum meruit. 
  11. Two things need to be inserted to create an enforceable contract supported by adequate consideration, to wit: (a) a legal fiction in which the homeowner accepts the currently illegal practice of appointing a designee instead of a creditor for enforcement and (b) compensation to the homeowner for accepting this novel arrangement.
  12. Without reformation requested by one or both sides, there can be no legal enforcement. Rescission while technically appropriate is unavailable because of the chain of other contracts emanating from the parallel securitization scheme.
  13. The only other option is to appoint a receiver to liquidate all claims from all stakeholders — a process that may be unwieldy unless performed on the basis of each securitization scheme rather than each loan.

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.

 

Filed under: foreclosure | 5 Comments »

How to Analyze A Purported Assignment of Mortgage or Promissory Note

Posted on August 5, 2020 by Neil Garfield
The execution of any document does not by itself create a legal event.
  • First, the document is only valid if it memorializes an actual event.
  • Second, the document is only valid if it complies with the facial requirements set forth by applicable statutes.
  • Third, the document is only legally valid if it complies with the substantive requirements of applicable statutes.
Let’s take a common example.
ABC executes an assignment of mortgage to XYZ.
  • The effect of the execution of the document is zero until it is delivered.
  • Even then the document is a legal nullity if it does not memorialize a transaction in real life.
  • If it recites consideration and if it has been executed in accordance with the facial requirements of statutes, it is facially valid which means, especially upon recording, that it might give rise to certain legal presumptions under The Rules of Evidence in any Court proceeding.
  • Substantive statutes require a contemporaneous sale of the underlying debt in order for the document to be legally valid. Without that the document might exist but it is treated as though it does not exist.
In order for the first requirement to be satisfied, there must be a transaction in real life between real people.
  • Most people mistakenly assume that because ABC executed the assignment in favor of XYZ that ABC owned the mortgage and that XYZ purchased it in a transaction with ABC.
  • In the current context of securitization, this never happens. Accordingly, the assignment of mortgage is void, not merely voidable. It is a legal nullity which means that it must be treated as though it never happened even if it was recorded.
You have to keep in mind that this is all based on contract law.
  • the execution of a document in favor of a grantee may give rise to certain legal presumptions that are used because the presumed facts are almost always true.
  • But in the case of deeds and mortgages and deeds of trust, there is absolutely nothing on the face of a document indicating that the grantee has accepted the assignment or been part of any transaction.
In the context of securitization, ALL of the recitals on the face of the assignment of mortgage consist of false representations of fact made by the grantor.
  • If attorneys for the grantee choose to use the assignment of mortgage as the basis for a claim against the homeowner, and the fraud is later revealed, the grantee still has the option of disclaiming any knowledge or interest in the assignment of mortgage, since it was not party do any contract or any transaction in which the mortgage was sold.
  • This reflects the true logic of “securitization.” There is no sale and there is no contact so nobody is alender and nobody is a creditor and nobody is a servicer. Regulators and the courts have tried to invent doctrines to bridge this gap, but it is a bridge too far.
  • Since nobody can be identified as lender, creditor or servicer when questions of substantive conduct occurs all of the players have at least one layer of protection  by simply claiming that they were simply acting as a third party vendor and that none of them ever made any representations about owning the debt through payment or representing anyone who owned the debt through payment.
The same logic applies to the endorsement of a promissory note.
  • The fact that the endorsement appears may give rise to certain legal presumptions that are used as Rules of Evidence, but all of those are rebuttable by the homeowner.
  • If the presumption is that the party claiming to own the Note has paid for it, and that therefore the delivery of the note along with the endorsement was a transfer of ownership of the underlying debt, the homeowner need only ask questions in Discovery or in a qualified written request or a debt validation letter as to the identity of the transaction and the parties in which payment was made for the debt.
  • In cases that involve securitization you will never get an answer to this.
  • And in cases in which securitization is not apparent, if you don’t get an answer to that, you are probably dealing with concealed claims of securitization.

And remember this above all else: they never say the debt was securitized. they simply let the court assume that to be true. they don’t say it because it never happened.

The argument that this analysis results in a “free house” for the homeowner is intentional misdirection.

  • The homeowner was drafted into securitization scheme in which the player collected vast sums of money far in excess of any transaction with homeowner.
  • None of that money was ever credited to the fictional loan account that was created with when the homeowner was induced to issue the note and mortgage. And nobody owns that fictional loan account. Nor was the homeowner paid any inducement to participate in the concealed securitizations scheme that securitized data rather than debt.
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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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Filed under: foreclosure | 2 Comments »

Gary Dubin, Esq. Scores Another Victory for Homeowners in Hawaii in Notorious LSF9 Case

Posted on August 4, 2020 by Neil Garfield

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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In the meanwhile you can order any of the following:
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CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
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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.
*
Please visit www.lendinglies.com for more information.

Filed under: boarding process, BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure, foreclosure defenses, foreclosure mill, forensic investigation, Investor, jurisdiction, legal standing, MBS TRUSTEE, Pleading, prima facie case, Servicer, sham transactions, standing | Tagged: , , , | 2 Comments »

How to Use Experts in Foreclosure Trials

Posted on August 3, 2020 by Neil Garfield

The first thing you need to know is that the banks will never bring their own expert to contradict your expert.

The second thing you need to know is that the use of an expert is complicated if you really want to achieve victory.

People often request now that I provide expert testimony. The main reason they ask is that they think that if I say under oath that securitization is a scam, the court will then rule against the foreclosure mill pursuing  the forced sale of their homestead. My consultation and even testimony can be helpful in achieving a favorable result (no guarantees).
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Nobody should automatically assume victory because expert testimony reveals defects in the prima facie case against the homeowner. It’s more complicated than that.
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An expert must be able to demonstrate specific superior knowledge outside of the purview of the normal lay people as to (a) this specific case (b) applicable rules, regulations, customs and practices in the industry (c) what work was done in this case (d) what facts were revealed and (e) the significance of those facts. In addition the expert must be able to defend on cross examinations the conclusions reached and the quality of the work performed in order to reach that conclusion.
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A general affidavit about the industry is worthless. It must state specifically the factual conclusions about the case at bar or it will be either rejected as evidence or simply ignored. And if the presentation fails to show the judge how those factual conclusions were reached it will also be ignored.
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So here is how I work:
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Without doing some cursory review of title and other documents it is difficult for me to be precise. But in general here is how it breaks out:
  • Expert Witness Report: $1,500
  • Expert witness testimony: $650 per hour (note in depositions the other side pays for prep time and time spent at deposition)
  • Assistance with discovery: $650 per hour, usually less than $3 hours.
  • Reviewing and editing motions, pleadings or declarations: $650 per hour.
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After the case analysis is complete, we would have a CONSULT which is included in the Case Analysis. During that conversation you and your attorney would make a decision if (a) you actually needed or wanted an expert witness and (b) the specific scope of expert opinion and expert facts that are needed. It is possible at this point in the process that your attorney might decide that while my guidance would be helpful, he or she would prefer to use me as a consultant. This often happens.
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About expert witness testimony:

It tends to be very helpful if it reveals facts that relate to basic elements of a foreclosure case. It is somewhat helpful as to opinions and conclusions reached by the expert. My expertise is based upon my experience, training, education and personal use or direction of securitization business plans. I am an expert in securitization of debt, but my testimony will most likely be that securitization of debt never occurred nor was it ever intended to occur. This is sometimes referred to as “securitization fail.” However it cannot be said that something failed if it was never attempted.
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The securitization that did happen relates to intangible property that is created when information is aggregated and the issuer of a security takes one position about the data and the buyer of the security takes another position. Value is exchanged based upon the mutual promises contained in the contract (i.e. the security).
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For example, investors are essentially betting that they will receive scheduled payments from an investment bank when they purchase “certificates.” But they are not buying any debt, note, mortgage or right to enforce any payment from any residential homeowner. The certificate contains formulas for payment that are dependent upon the sole discretion of the issuing investment bank who is doing business under the name of a nonexistent trust. Thus in effect investors are purchasing future performance of the investment bank based upon data about loans not ownership of the loans.
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All of that is interesting and frequently leads to frustration and anger when one realizes that the payment of money to the homeowner was labeled as a loan but there was no counterparty to the “loan.” At the end of the securitization cycle there simply is no person or company that owns any homeowner obligation arising from the origination of the transaction. Instead, the homeowner was drafted into the securitization process by issuing the initial documents — the note and mortgage — without which the securitization cycle would never have begun and the homeowner transaction would not have occurred (nor would the sale of certificates to investors).
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The banks created a strategy that is entirely dependent upon getting the homeowners, their lawyers, the courts and regulators to presume that the loan was sold to investors despite the absence of any fact pattern that would provide a legal foundation for such a claim. They adopted that strategy because current law, reflecting centuries of development, requires that in the event of physical forfeiture of property, the claimant must have paid value for the claim that is supposedly secured by a mortgage.
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Since all of their claimants are merely designess or nominees, that is impossible. And since one of the purposes of securitization was to eliminate the debt account and therefore the role of creditor, the banks fabricate documents to make it appear as though the loan was sold into the secondary market and then securitized in sales to investors.
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The banks never show proof of payment by the named claimant or anyone in the chain leading up to that claimant. This is because no such payment occurred. Because the loan was never sold and payments received were not credited to any loan account or allocated to ownership of such an account, the investment banks were able to freely issue and trade securities whose value is derived from information about the transactions with homeowners without any credits or debits to the nonexistent debt account.
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There are several types of experts who can assist in revealing the fatal absence of a creditor in the foreclosure claim. What you will most likely find is that the expert’s report is far more likely to have an impact when the homeowner seeks to compel discovery rather than at trial. The failure to respond to basic questions about the status and ownership of the debt is generally fatal to the case pursued by foreclosure mills.
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To be effective an expert must demonstrate superior knowledge about facts that are in dispute in the case at bar. Unless the judge is convinced that the expert knows something that the court does not understand, without help from an expert, the expert testimony will either be barred or ignored. Most often it is ignored if not presented properly. The expert has two jobs: presentation and persuasion. Some people would argue with that statement but I am certain it is true. The expert must be persuasive without appearing as an advocate with a stake in the outcome.
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The ONLY way that happens is if the expert can report on what analysis was performed, what he found and how that fits within industry practices and rules. Since the expert is going to be testifying about the absence of evidence, the presentation must persuasively produce an end result in which the absence of evidence is essentially evidence of absence — raising the inference or presumption that the claimant has never paid for the underlying obligation, and that therefore the claimant suffered no injury.
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But beyond that it is helpful to explain the full impact of securitization as currently practiced in order to show that the most basic presumption of the courts is incorrect. Investors are not, directly or indirectly, receiving the money from proceeds of foreclosure sales nor were they ever intended to do so.
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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. RESUME NFG 2020
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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.

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ALERT! Migrating from fake notes to eNotes: If consumers don’t stop this they will be without any defense to any abusive practice and any fake account started in their name

Posted on July 31, 2020 by Neil Garfield

The banks have been securitizing data not debt. Now they are trying to make data the substitute for the real thing. In other words, screw the investors, screw the consumers, screw the government and the banks take everything.

It’s not securitization that is evil. It is a handful of bankers who are lying to us about securitization. There is a factual and legal difference between securitization of loans and securitization of information about loans. The acceptance of eNOTES or any digitized version of important legal documents is an invitation to disaster. This will make 2008 nostalgic for us.

We are the stage of final approval — allowing eNotes to be used instead of real notes. There are no protections for consumers and the practice of passing off securitization of data will be institutionalized as meaning the same thing as securitization of debt. The biggest ripoff in human history will be signed, sealed and delivered. Both investors, as a class (i.e., pensioners) and homeowners as class will suffer for generations because of this.  

Write to the CFPB, your congressman and your Senators. Voice your objection to dropping paper documents. Your life depends upon it. 

They make it sound good — like the next step in human evolution. But what they are proposing is a completely open playing field for only the banks — leaving consumers back in the dark ages.

see https://www.ginniemae.gov/Summit/Documents/June_13_11_15am_Digital_Collateral_Industry_Workgroup.pdf

This is basically institutionalizing moral hazard. For two decades the banks have gotten away with using images of notes that have been destroyed. The issue is the same as digitized voting. if you don’t have the physical document to backup the data, you are left with a cyber world in which anyone with access can change reality.

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I have no objection to the use of images of notes or mortgages or deeds of trust as long as the physical document exists and can be accessed upon demand.  but I have plenty of objections to the use of digitized versions of important legal documents unless they are adequately protected by the government in transparent practices.
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The whole reason we have public records is to prevent what the banks are now trying to do. If this goes through, public records will no longer exist. they will consist of digitized data from parties who have paid their way into being considered trustworthy. the average consumer doesn’t stand a chance in that environment.
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In a nutshell here is the problem: Wall Street has been fraudulently presenting securitization of data as though they were securitizing loans and debts. that never happened, which is why all of the documents from REMIC transactions are false, fiction, fabricated, forged and backdated.
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If they had securitized your “loan”, the language included in the note and mortgage would be sufficient, to wit: you would have consented to the resale of your loan and that the successor who purchased it would have the same rights to administer, collect and enforce as the original lender. That is what you signed up for and that, coupled with the fact that our economy runs on securitization of assets to diversify risk, is what makes securitization legal, necessary, proper and just.
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But they didn’t securitize your loan or anyone else’s loan because from their end there was no loan. From their end they made sure you received money and that money was used an incentive to issue the note and mortgage. But nobody purchased the note and mortgage. In most cases nobody ever purchased it even at origination. Although they told you the name of a party who was defined as “Lender” that party had no money, access to money nor any right to any money flowing into or out of the homeowner transaction.
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That is why the notes were destroyed — probably 95% of them. To you that is like shredding currency. But to them, their plan required them to keep all revenue generated by their scheme — not just some of it. So they needed to substitute data for documents. Every scanned image is data. And those images can be copied indefinitely. But you can only have one signed original note. The banks are tired of being restricted to selling your loan once, so they developed a plan to sell the data from your loan dozens of times.
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The analogy is the atom. In the legal world you can only sell the atom once. But wall Street figured out a way around that.
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They sell information about (i.e., data) the protons, electrons and nucleus along with a variety of other behavioral characteristics of those physical elements but they never say they are selling the atom — even though their collective sales of information about the everything composing the atom is equal to dozens of times the price of the atom.
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By using this fictional strategy they can say they never sold or bought the atom and therefore any liability arising from purchasing or selling the atom doesn’t attach to them.
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Does that mean no securitization ever occurred? NO! But it does mean that what everyone thinks has been securitized is still sitting there untouched. They securitized data not debt.
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That means that your loan, like that atom, has never moved and was not in fact a loan and there is no loan agreement because nobody agreed to become your lender.
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You signed papers where YOU agreed to designate a party as a lender but nobody at any stage of the process they labelled as “lending” ever signed anything that said “I am your lender. I own your obligation. I paid for it. You owe me the money.” You might think or assume that happened but it never did. 
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So far the investment banks have been pretending to be lenders when they are not and they would fight to the death if you sued them as lenders. Their defense would be that they are not lenders and as proof they would swear they have no interest in your loan. And they would be right.
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They made a ton of money selling information about your loan in the form of derivatives, hedge contracts, insurance contracts etc. On average they made $12 from every $1 they gave you. But they never paid you one penny for your role in their scheme of securitizing data. Whatever money you received they lured you into promising to pay it — but little did you know that you would paying companies with financial interest in your transaction which you mistakenly think is a loan. YOUR LOAN HAS NOT BEEN SOLD BECAUSE THERE IS NO LOAN.
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They did this by converting from public records to digital private records which means that management of any given company can claim anything and nobody is the wiser unless someone does an audit and understands what they’re looking at. By directing everyone’s attention to images they are directing everyone to data instead of documents.
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There is nothing legal about what the vienstmetn banks did to investors and nothing legal about what they’re doing to homeowners. But they have convinced most judges, regulators, lawyers and consumers that their practices, while not exemplary, are merely an accurate presentation of the truth and so the deficiencies occur without harm to the system or to investors or homeowners. Nothing could be further from the truth.
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In a nutshell investors were harmed because they unknowingly bought into some highly risky unsecured junk bonds and then signed away their right to do anything about it.
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In a nutshell homeowners were harmed because instead of getting the protections of the truth in lending Act and other federal and state statutes they were left hanging in the wind, with a fake loan agreement in which the players on the other side had no stake or incentive to make the transaction successful. In fact the loan agreement failed to deliver a lender. Quite the opposite they knew the transaction was toxic and they bet on it and the worse the odds the more money they made.
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So instead of physically committing the crimes of forgery, perjury, uttering a false instrument, recording a false instrument and mail fraud, now they seek to avoid all of that by forcing and seducing us into thinking that digitally records are enough, digital signing is enough and that digital contracts and promissory notes are enough. And anytime they want, they access those documents and alter them for other purposes temporarily or permanently in order to produce the highest possible revenue and profit.
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It’s now or never folks. If they get away with this one, you can kiss every consumer protection you have goodbye.
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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. On Wall Street in NYC, he was director of investment banking at Garfield and Company, member of the NYSE, AMEX, Chicago Mercantile and 4 other exchange associations. 
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Filed under: evidence, Fabrication of documents, Fannie MAe, foreclosure, foreclosure defenses, forensic investigation, Freddie, investment banking, Investor, jurisdiction, Pleading, Presumptions, prima facie case, securities fraud, sham transactions, standing | 5 Comments »

Tonight! How Bill Paatalo’s Testimony Turned the Tide Against Wells Fargo and HSBC! 3PM PDT 6PM EDT

Posted on July 30, 2020 by Neil Garfield

Thursdays LIVE! Click in to the WEST COAST Neil Garfield Show

with Charles Marshall and Bill Paatalo

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

Bill Paatalo will discuss on the Show today how he was able to thoroughly expose the lack of authority by foreclosing parties, including Wells Fargo and HSBC, in 5 consolidated cases in Missouri. Missouri is generally a non-judicial foreclosure state, as it is typically a deed-of-trust state. There are a minority of judicial foreclosures in Missouri as well, based often though not exclusively on mortgages as opposed to deeds of trust. Bill testified via WebEx at trial as an expert witness in these cases, and exposed the foreclosing parties’ witnesses as proving not their case but the borrower’s case. There are some quirks to WebEx testimony which allow greater latitude for those testifying, and Bill will discuss these.

Charles Marshall will then address the latest in the Covid-19 world as it relates to foreclosures and evictions.

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How to Challenge “Sale” of the Homeowner Debt: Article 9-§203 UCC

Posted on July 30, 2020 by Neil Garfield
Your objective is simple: to reveal that the party named as plaintiff or claimant is not the owner of the debt. Your secondary objective, not necessarily required, is to prove that the named claimant doesn’t have the authority to represent anyone who does own your debt.  On your way to doing that you will probably undermine any claim of authority from the self-appointed servicer.
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Under the laws of all states that adopted Article 9 §203 of the Uniform Commercial Code (all 50 states) a condition precedent to enforcement of the mortgage is that the claimant must have paid value for the debt. Such payment is often presumed from the apparent facial validity of (a) the original loan documentation and (b) transfer and apparent delivery of the promissory note and mortgage or deed of trust.
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It is easy to get confused on this point. The fact that someone has paid value does not mean that they paid value for the debt. In order for a sale of the debt to take place, the payment of value is only one part of it. The payment of value must be to the owner of the debt. The banks take advantage of the fact that nobody has thought this through completely.
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They create paperwork making it look like the debt has been sold. In actuality in most cases no value was paid. But even where there was some consideration paid to somebody, it wasn’t paid to anyone who owned your debt and who could claim financial injury resulting from your action or inaction (nonpayment).
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It was paid to some intermediary who claimed to be representing someone who also didn’t own the debt. So you have value paid but not in exchange for a legal conveyance of ownership of your debt. Collection by such a party represents pure profit — not restitution for an unpaid debt.
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Your objective is simple: to reveal that the party named as plaintiff or claimant is not the owner of the debt. Your secondary objective, not necessarily required, is to prove that the named claimant doesn’t have the authority to represent anyone who does own your debt.  On your way to doing that you will probably undermine any claim of authority from the self-appointed servicer.
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The path of the money trail is very convoluted and you do not need to track it. But by assuming certain deficiencies in the position of your opposition you can demand discovery on precisely those things that they can’t answer and which are entirely relevant and essential to their claim, to wit: the ownership, agency and authority over the loan. Foremost amongst those questions are those relating to any transaction in the real world in which money exchanged hands in exchange for ownership of the debt. I am virtually certain that you won’t find any.
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BUT such payment and ownership is often presumed from the apparent facial validity of (a) the original loan documentation and (b) transfer and apparent delivery of the promissory note and mortgage or deed of trust. You must rebut that presumption.
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My interpretation of all that, based upon case decisions, applicable statutes, rules and regulations is that the following must be true in order for a foreclosure to be a valid exercise of legal rights that belong to a creditor:
  1. The foreclosure is initiated on behalf of a creditor — i.e., one who has paid value for the debt in exchange for legal ownership of the debt.
  2. The forced sale of the property will result in a paydown of a legal debt owed to a disclosed creditor.
  3. If a servicer is involved their authority to collect, process or enforce the debt must have come from the creditor who paid value for the debt in exchange for legal ownership of the debt.
  4. Proper notice and demand for the correct amount due must have been delivered on behalf of the creditor and received by the borrower.
  5. The creditor must be sufficiently identified so as to comply with ordinary rules and practices governing the requirements of legal pleading.
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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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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.

Posted on July 29, 2020 by Neil Garfield

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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Filed under: BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, Fabrication of documents, foreclosure, foreclosure mill, hearsay, legal standing, Mortgage, Presumptions, prima facie case, sham transactions, TRUST BENEFICIARIES | Tagged: , , , , , | 8 Comments »

CFPB Misses the Mark — Overkill Against Someone Trying to Help and Underkill Against the Banks

Posted on July 28, 2020 by Neil Garfield

I think that the CFPB, FTC and SEC continue to miss the point. The base of “deceptive and unsubstantiated representations” comes from the banks and their lawyers.

CONSUMER FINANCIAL PROTECTION BUREAU ANNOUNCES SETTLEMENT WITH FORECLOSURE RELIEF SERVICES COMPANY AND ITS OWNER

WASHINGTON, D.C. – On July 20, 2020, the United States District Court for the Central District of California entered a stipulated final judgment resolving the Consumer Financial Protection Bureau’s (Bureau) allegations against Certified Forensic Loan Auditors, LLC (CFLA) and Andrew Lehman (Lehman). CFLA is a foreclosure relief services company headquartered near Houston, Texas, and Lehman is CFLA’s president and CEO.  The Bureau alleged that CFLA and Lehman engaged in deceptive and abusive acts or practices in violation of the Consumer Financial Protection Act of 2010 (CFPA) and charged unlawful advance fees in connection with marketing and selling financial advisory and mortgage assistance relief services to consumers in violation of Regulation O and the CFPA.  The court’s order permanently bans CFLA and Lehman from the industry and imposes a suspended judgment for redress of $3 million and civil money penalties of $40,000.

The Bureau’s complaint, which was filed on September 6, 2019 and amended on November 13, 2019, alleged that CFLA and Lehman made deceptive and unsubstantiated representations about the company’s mortgage assistance relief services and its ability to help consumers avoid foreclosures or negotiate loan modifications.  Specifically, the amended complaint alleged that the company made deceptive and unsubstantiated claims about the efficacy and content of its services, as well as false claims about the experience and qualifications of the people performing those services.  The Bureau also alleged that the company’s conduct constituted abusive acts or practices in violation of the CFPA. Finally, the Bureau alleged that CFLA and Lehman charged consumers illegal upfront fees in violation of Regulation O, which governs the offering or provision of mortgage assistance relief services.

The court’s order permanently bans CFLA and Lehman from providing mortgage assistance relief services or financial advisory services.  The order also imposes a suspended judgment against CFLA and Lehman for redress of $3 million and imposes a civil money penalty of $40,000.  The suspended judgment for redress and the amount of the civil money penalty account for CFLA’s and Lehman’s limited ability to pay based on sworn financial statements.  Whenever the Bureau collects a civil money penalty through an enforcement action, that penalty is deposited into the Bureau’s Civil Penalty Fund. Assuming continued available funds, the Bureau will work to provide full relief from this fund to eligible harmed consumers.

CFLA and Lehman were the only remaining defendants in the Bureau’s lawsuit.  The court previously entered a final judgment resolving the Bureau’s allegations against Michael Carrigan, CFLA’s former auditor.

The stipulated final judgment and order against Carrigan is available at: https://files.consumerfinance.gov/f/documents/cfpb_CFLA-lehman-carrigan_final-stipulated-judgment-order_2019-10.pdf.

The amended complaint is available at: https://files.consumerfinance.gov/f/documents/cfpb_cfla-lehman-carrigan_amended-complaint_2020-07.pdf.

The stipulated final judgment and order against CFLA and Lehman is available at: https://files.consumerfinance.gov/f/documents/cfpb_cfla-lehman-carrigan_final-stipulated-judgment-order_2020-07.pdf.pdf.

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives.  For more information, visit consumerfinance.gov.

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It’s Not a Default If You Stop Paying — Unless Someone owns Your Debt and Can Prove Financial Loss

Posted on July 27, 2020 by Neil Garfield

NOTE: BE AWARE THAT WELLS FARGO AND OTHERS MAY HAVE PUT YOUR TRANSACTION IN A FORBEARANCE PROGRAM WITH UNKNOWN TERMS.

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I think that the banks have unfairly benefited from assumptions regarding the connection between the cessation of payments by homeowners and the existence of a default.
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I think that there are elements of a default that we have never had to think about before.
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The first element, in my opinion, is that somebody must have suffered a loss or injury
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The second element is that the loss or injury must be the approximate result of a breach of Duty
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The third element is that the Duty must be owed to them by the person who breached the duty.
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If you don’t have both elements, I don’t think you have a default, nor do I think that anyone has the authority to declare one.
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When this thing began we didn’t know if cessation of payments has actually produced an injury or loss. now we know.
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There is no correlation between cessation of payments and any injury or loss to any party. In fact, my analysis reveals that no such loss or injury occurs.
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Going further, my analysis strongly indicates that payment has been received directly and indirectly multiple times without being credited to any asset account in which a homeowner obligation is held as an asset. And the reason is simple — there is no such account anywhere. How can there be a default?
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One thing you may not know about me is that long ago I literally taught auditing under generally accepted accounting principles when I received my Masters in Business Administration. A guy by the name of Abraham Briloff wrote a book called Unaccountable Accounting back then. I actually have the right to republish it granted by his daughter. He accurately predicted this situation because of changes that were being allowed in the rules. But some things don’t change and haven’t changed.
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Perhaps because of my background on Wall Street I have always seen this as an accounting problem more than a legal problem. In accounting, the approach is very straightforward.
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If a company wants to claim ownership of an asset, it will have an entry on its balance sheet either for that asset or for a category that includes that asset. If the company does not report that item as an asset it is not legally claiming ownership of it. And if it does not claim that item as an asset it has no account to post deductions as a result of payments or offsets. 
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And if the company makes a claim anyway in court or out of court it is making a false statement. While there is probably nothing to prevent it from alleging the claim, and there may be presumptions that theoretically could support the claim, they cannot legally recover on the claim if it is challenged. There are several legal reasons for this result: lack of jurisdiction, failure of condition precedent etc.
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There is only one way for an item to appear on the balance-sheet of any person or company. There must be a transaction on the general ledger in which the company has paid for the asset. Under Double Entry bookkeeping, this would be shown as a deduction from some other asset like cash in exactly the same amount as the addition of the new asset. In the world of securitization no such transaction exists. And the reason that it doesn’t exist is because nobody wants to be called the lender because that would result in potential liability for violation of lending and servicing laws.
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The purpose of an auditor is to determine whether or not that asset exists in accordance with generally accepted accounting principles as now published by the Financial Accounting Standards Board. Unless the auditor finds objective proof is that a transaction occurred on the general ledger which is backed up by actual proof of payment, sales receipt Etc,  the posting of the asset on the balance sheet by management will be removed or the auditor will refuse to issue a clean bill of health for the audit, stating that the financial statements do not comply with generally accepted accounting principles.
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Go back to the default. If no such account exists in any company or person, then no company or person has actually experienced a default. accordingly there is no reason to declare a default on behalf of such a company or person. The fact that the company or person knows not a homeowner I stopped making payments to a party that he was otherwise paying, makes a witness not a creditor.
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Legally I think we have all committed a grave error by admitting or ignoring the allegation of a default and not challenging it aggressively, we are inherently admitting the status and ownership of the debt and therefore inviting the inevitable foreclosure result.
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Starting in 2006 I said that the expert that people needed was not a securitization expert like me but a CPA who specializes in forensic auditing. This is a person who could specifically state that the loan was not an asset on the books of the claimant and that the claimant suffered no injury or loss as a result of anything that the homeowner did or didn’t do. I had some extensive talks with the prestigious accounting firm in Tucson Arizona which almost resulted in the marketing of these services. They backed out when Bank of America retained their services and created a conflict of interest.

Filed under: discovery, Discovery -Subpoena, evidence, expert witness, Fabrication of documents, foreclosure, foreclosure defenses, forensic investigation, legal standing, MBS TRUSTEE, Pleading, Presumptions, prima facie case, securities fraud, sham transactions | 1 Comment »

No Default Occurs When a Homeowner Ceases Making Payments — Unless the Payment is Missed by A Creditor Who Owns the Debt and Who Suffers a Financial Loss Because the Payment was Not Made

Posted on July 24, 2020 by Neil Garfield

Practitioners should attack the default letter and stop pretending it doesn’t count or doesn’t exist.

It is not the homeowner who misses a payment it is the creditor who misses receiving it. If there is no creditor, there can be no default. If there is no financial accounting report that establishes the debt has an asset on the books of record of a creditor, then there is no creditor.

This counterintuitive  statement sounds like circular reasoning and gibberish and is often treated as such by the courts. But in an increasing number of cases Judges are understanding that it is gibberish and circular reasoning through no fault of the homeowner.

It is circular reasoning and gibberish to cover-up a scheme in which the debt continues to be paid over and over and over again without ever recording a reduction to the debt on the books of a creditor because there is no creditor and there is no such account.

The answer to most of the questions about this is the same as the answer to the question of why millions of promissory notes were destroyed contemporaneously with the apparent “closing” of transactions with homeowners.

By creating the illusion of an account holding the debt (on the books of servicer who does not claim ownership), the investment banks had effectively launched a scheme in which debts could be paid or “sold” 40 times over without the homeowner (debtor) ever knowing. Since there is no creditor and no account to reduce upon receipt of an offsetting payment, the debt is never reduced.

To add insult to injury, the homeowner is stuck defending a claim that looks bona fide upon first glance, resulting in loss of title and  possession to their home. But the claim, like the default is bogus. There is no default without someone who can legally claim that they suffered a loss due to nonpayment. But that “person” can’t exist if they don’t own the debt. And no person can own the debt without paying for it. And no loss can be alleged unless claimant is the owner of the debt who paid for it.

The default is not experienced by the homeowner who stopped paying. It can only be experienced by a creditor who paid value for the underlying debt in exchange for a conveyance of ownership of the underlying debt from someone who legally owns the debt. If the claimant does not fit that description there is no default nor any right to declare one because there has been no loss.

PRACTICE NOTE: Practitioners should attack the default letter and stop pretending it doesn’t count or doesn’t exist. And for God’s sake stop admitting the default! The attack should state as its grounds that the default letter was issued without authority from a creditor who legally owned the debt. That means that the named claimant did not pay value for the underlying debt in exchange for ownership of the debt. Nor does the named claimant represent a legal creditor of the homeowner. Keep it simple.

Attack the proof of payment. Without that there can be no actual loss and without actual loss there is no default nor any authority to issue it nor any ability to enforce based upon a default that no creditor has experienced.

If you want to know why pizza delivery people were making millions of dollars it was because there was a tub of money generated by a smoke and mirrors plan called “Securitization” in which nothing was securitized. Homeowners were drafted into a “securitization” cycle in which they received none of the benefits and were trapped into transactions in which the incentive of the named “lenders” was exactly opposite to normal lending standards.

BOTTOM LINE: Where securitization is involved either because it is alleged as a basis for a claim or because it emerges in discovery or pleadings, two things are true.

No party who pays value ever receives legal or equitable ownership of any debt, note or mortgage; and no party who ever receives a document of conveyance of ownership of the debt, note or mortgage has received anything other than a legal nullity — because they neither paid for the ownership of the debt nor represented anyone who did.

If you use  this as the premise for your defense narrative and litigate the matter properly, my data shows a 65%-80% likelihood of a flat out win for the homeowner.

Thousands of cases have been won by homeowners— almost all buried by confidentiality agreements —- because once they lose, the banks offer a financial incentive to the homeowner to execute a confidential settlement agreement. This only happens less than 1% of the time because 96% of all foreclosures are uncontested, and 3% of homeowners do not persist in their litigation to the end. All the banks need to do is NOT settle until it is the end of litigation.

Lawyers pursuing modification agreements are actually doing the business of the banks. First they are giving up valuable rights of their client and second they are having their client establish a fact that could never have been true — inserting a “servicer” as the “new lender” with no warranty that any creditor exists much less authorized the settlement. Such insertion creates a lender not a successor lender.

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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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Tonight! The Coming Foreclosure Tsunami and what that Means for Borrowers 3pm PDT 6PM EDT

Posted on July 23, 2020 by Neil Garfield

Thursdays LIVE! Click in to the WEST COAST Neil Garfield Show

with Attorney Charles Marshall

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

On the Neil Garfield Show today host Charles Marshall, Esq. will break down the latest trends and developments in the Covid-19 landscape, addressing the following legal areas in order to apprise borrowers what they can do to slow or possibly even derail the coming foreclosure train.

With unemployment numbers continuing in most parts of the country to be at numbers not seen since the Great Depression, claims of mortgage payment defaults are likewise skyrocketing, which will lead to a dramatic rise in foreclosure filings against homeowners, in both non-judicial and judicial foreclosure states.

Today’s Show will touch on effects nationwide, with an emphasis on non-judicial foreclosure states like California.

We will cover a refresher on how borrowers can best handle legal procedure in the following legal arenas:

– pre-NOD mortgage default period;

– post-NOD mortgage default period;

– NOTS period; post-auction period if the subject property goes to sale.

Lawsuit procedure to fight foreclosure, including obtaining TROs to stop foreclosure sales;

Appellate procedure, including whether appeals can and will stop foreclosure sales or evictions

Bankruptcy Procedure re foreclosure, including how bankruptcy stays work, and addressing motions to lift any stay in place;

Unlawful Detainer procedure and how to navigate this procedure when sued for eviction following a non-judicial foreclosure sale.

Filed under: foreclosure | 1 Comment »

Investment Banks Attempting to Force OCC Rule Change That Defines “True Lender” as Anyone They Say

Posted on July 23, 2020 by Neil Garfield

The proposed rule change would basically change the effect of all statutory and common law. It defines a “true lender” as EITHER someone who funds the transaction OR anyone who is called a lender in the closing documents for the homeowner transaction. 

If this rule goes into effect it would conflict with state law in all jurisdictions and federal law governing lending practices and servicing. It will be used as an administrative finding which means that under judicial doctrine it will be cloaked with a legal presumption that it is correct. 

It allows anyone who muscles in on the homeowner transaction to enforce it even if they their goal is profit and not restitution for an unpaid debt.

Homeowners should be writing letters and calling the OCC, and their representatives in Washington, D.C. to express their objection and rejection of this proposed rule as a blatant attempt to subvert the law. 

OCC Proposes Rule To Settle ‘True Lender’ Question

The Office of the Comptroller of the Currency proposed a rule Monday to clarify that a bank is the “true lender” of a loan if that institution is named on the loan document at the date of origination or if it funds the loan, as the agency seeks to address ambiguity amid the proliferation of bank partnerships in lending.

https://www.occ.gov/news-issuances/news-releases/2020/nr-occ-2020-97.html

News Release 2020-97 | July 20, 2020

Office of the Comptroller of the Currency Issues Proposed True Lender Rule

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today proposed a rule that would determine when a national bank or federal savings association (bank) makes a loan and is the “true lender” in the context of a partnership between a bank and a third party.

Banks’ lending relationships with third parties can facilitate access to affordable credit. However, the relationships have been subject to increasing uncertainty about the legal framework that applies to loans made as part of these relationships. This uncertainty may discourage banks and third parties from entering into relationships, limit competition, and chill the innovation that results from these partnerships—all of which may restrict access to affordable credit.

The proposed rule would resolve this uncertainty by specifying that a bank makes a loan and is the “true lender” if, as of the date of origination, it (1) is named as the lender in the loan agreement or (2) funds the loan.

The deadline for comments on the rule is September 3, 2020.

Related Link

Media Contact

Bryan Hubbard
(202) 649-6870

The fact that the investment banks are trying to use their influence to create this rule change corroborates what I have been saying for 14 years — they have known from the start that their plan was illegal.
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Securitization is not a mystery process but the investment banks want everyone to believe it is a mystery — and that only they can define it. Securitization is as old as securities. It has always meant and still means the sale of an asset to investors.
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The essence of the Wall Street plan is to NOT sell the loan but rather SAY it was sold. Under law dating back centuries, a debt is not sold unless someone pays value for it exchange for receiving a conveyance of legal ownership of the debt.
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The same laws state unequivocally that enforcement of the debt is impossible unless done on behalf of the party/creditor who paid for the debt in exchange for a conveyance of legal ownership.
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The essence of the Wall Street plan to change the OCC rule is to overturn centuries of law for fun and profit. It provides the context for allowing a debt to be enforced by a nominee of an investment bank who has no interest in the debt.
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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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Opposing counsel is concealing from the court that no such party exists and is attempting to work around this fatal deficiency by “designating” a fake creditor rather than representing a real one. 

Posted on July 22, 2020 by Neil Garfield

The inability of the Defendant to name a viable creditor should not translate as a burden of proof shifting to the defendant. Nor should it translate as the basis for any assumption or presumption that the plaintiff must be the creditor because the homeowner can’t name an alternative. 

in the successful effort to keep everyone remote from the “borrower” the homeowner was left without a lender or successor lender who was required to comply with federal and state lending and servicing laws. The investment bank at the center of this should not be able to have it both ways. Since they don’t have a loss they should not be allowed to claim one for the purposes of enforcement. 

Every time the  foreclosure mills file something it presents another target for you to drill home the central points. Here is my answer to someone which illustrates my point.

This is another opportunity to pound away at your central point — there is no Plaintiff present. BONY is the named trustee of a trust that either does not legally exist at all or which is irrelevant because neither BONY nor the named trust own the underlying debt in violation of UCC 9-203 as adopted by Hawaii Statutes.

They are attempting to divert the court’s attention from the fatal deficiency by interposing a new “nominee” or “designee” — SPS — who is self proclaiming itself to be an attorney in fact or agent for an entity that does not have legal title to the subject underlying debt, note or mortgage. This gambit is conducted pursuant to contract and at the insistence of BONY who does not want to be  charged with committing perjury. BONY does not need the protection of litigation immunity because it is not actually making any statements.

My answer is that yes you should attack everything they are doing and every premise that they are trying to invoke with the court. the failure to attach a power of attorney it’s just the tip of the iceberg.
Here are the things to remember about your position that you waive if you are not consistent:

  1. There is no evidence nor any allegation or exhibit demonstrating authority of anyone on behalf of the certificate holders on whose behalf the Foreclosure was filed. They have not said that the certificate holders are beneficiaries of the so-called Trust. They are not beneficiaries. They are creditors. And all claims from investors claiming a fiduciary responsibility of the named trustee to act on behalf of the certificate holders have been rebuffed, denied and dismissed. This is because certificate holders have no right, title or interest in the debt, note or mortgage or payment from any homeowner. Hence BONY has no trustee right, obligation or duty to act as to any action or inaction of any homeowner. Lawsuits brought in the name of the trustee or therefore bogus.

  2. The initial statement that SPS is an attorney in fact for anyone is issued without foundation. And it is an attempt to establish a fact without evidence or even presumption. There is no basis for the statement in the court record and hence no credence should be given to it. Note that two things are absent, not just one. In addition to the failure to attach a power of attorney there is nothing to suggest that the power, even if it was established, and even it was executed in the manner required by law in order to be effective, is still in effect. There is no representation to that effect nor as to the scope of the power nor any warranty, obviously, that the grantor had any such power to give.

  3. Their strategy is partially based upon something called litigation immunity which is a judicial doctrine that immunizes both the lawyer and client from liability for lying to the court.

  4. So they are having some guy who says he works for SPS execute the declaration on behalf of SPS who is not a party. Thus the declaration is NOT submitted on behalf of a party absent proof of authority to represent. This gets tricky because if the lawyer said it on behalf of BONY you would at least have an allegation of a party. But here we have a nonparty issue the representation and it is not a lawyer who is an officer of the court — and the party on whose behalf the declaration is submitted is not a party to the lawsuit.

  5. Yes a motion to strike is appropriate. You should be relentless.

  6. There is no representation in the declaration that BONY has authority to represent the certificate holders. There is no representation in the declaration that SPS has the authority to represent the certificate holders. Yet the action is filed on behalf of the certificate holders. Since they are not alleged to be beneficiaries, there is nothing in the court record — allegation, exhibit or evidence — that provides any foundation for considering the certificate handlers as represented by anyone and we have no way of testing that supposition without the certificates being described and the holders being named.

  7. No allegation or declaration in the court record states that anyone is familiar with the business of BONY or the trust or the certificate holders. This is a lure to get the court to assume an explanation which is never actually offered.

  8. Conclusions of law do not belong in such declarations. For example, in paragraph 3, whether he is competent to testify is not for him to say. It is for the court to hear evidence and argument as to the foundation for his testimony as a document control officer which says nothing about his actual  knowledge of actual business or business practices of SPS, BONY, the trust or the certificate holders.

  9. Note that there continues to be no representation or declaration that the records held by SPS establish the debt as owned by BONY, the trust or the certificate holders. Nor could there be. None of them ever paid value in exchange for ownership of the debt, note or mortgage.

  10. Most importantly, there is no declaration of knowledge or the basis of any knowledge as to whether the debt exists, in whose name it is owned and whether it is backed or owned by a GSE. A mere statement like the last paragraph is a conclusion of law and not a statement of fact.  Since the record is devoid of any such facts the conclusion of law should be ignored. As such the declaration is devoid of any legal declaration or assertion to comply with the COVID order. Accordingly it should be struck in its entirety.

  11. The last point I would make is that it is a denial of due process to require the homeowner to come up with a viable creditor. As Defendant in a lawsuit, the homeowner should be required to defend against actual allegations made in the complaint. Having challenged the opposing law firm and all of its related parties —- BONY, trust, certificate holders and SPS — the burden is on the Plaintiff to establish foundation before the court assumes or presumes any facts. The absence of any allegation of ownership of the underlying debt is itself an indication that no such ownership exists in these parties.

    1. The inability of the Defendant to name a viable creditor should not translate as a burden of proof shifting to the defendant. Nor should it translate as the basis for any assumption or presumption that the plaintiff must be the creditor because the homeowner can’t name an alternative.
    2. Either the plaintiff is or is not a creditor. Either the plaintiff represents or does not represent a creditor.
    3. A creditor can only be a party who has paid value for the debt if they want to foreclose.
    4. The court should not be leapfrogging away from the simple proposition that is codified by statutory law and common law for centuries: unless the claimant has paid value in exchange for a conveyance of ownership of the debt, claims of successive ownership or enforcement rights fail completely.

  12. The proof is in the pudding. Challenge the court or opposing counsel to even make the allegation that any of these parties ever was party to any transaction in which value was paid for the underlying debt in exchange for a conveyance of ownership of the underlying debt. They can’t and they won’t because no such transaction exists. Opposing counsel is concealing from the court that no such party exists and is attempting to work around this fatal deficiency by “designating” a creditor rather than representing a real one.

  13. The fact that no such party exists is not the fault or even the doing of the homeowner. It is entirely the doing of the players in a false game of securitization — in which the transaction is viewed as a loan solely for purposes of enforcing the obligation of the homeowner but not as a loan for purposes of reporting assets, liabilities, income or expenses. The role of creditor has been extinguished in this securitizations scheme for the purpose of keeping the parties “remote.”

    1. But in the successful effort to keep everyone remote from the “borrower” the homeowner was left without a lender or successor lender who was required to comply with federal and state lending and servicing laws. The investment bank at the center of this should not be able to have it both ways. Since they don’t have a loss they should not be allowed to claim one for the purposes of enforcement.

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

Posted on July 21, 2020 by Neil Garfield

Major banks, including Citigroup, JPMorgan 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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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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Filed under: Bailout, boarding process, burden of persuasion, BURDEN OF PROOF, community banks, CORRUPTION, credit unions, foreclosure, foreclosure defenses, foreclosure mill, forensic investigation, investment banking, Investor, jurisdiction, legal standing, Mortgage, Motions, originator, Pleading, Presumptions, prima facie case, Servicer, sham transactions, standing | 4 Comments »

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.

Posted on July 20, 2020 by Neil Garfield

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.

*

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.

*
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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Filed under: CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure, foreclosure defenses, foreclosure mill, legal standing, Pleading, TRIAL OBJECTIONS, trial strategy, trustee | 3 Comments »

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

Posted on July 17, 2020 by Neil Garfield

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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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.

Filed under: CORRUPTION, discovery, Discovery -Subpoena, evidence, expert witness, Fabrication of documents, foreclosure, foreclosure defenses, foreclosure mill, forensic investigation, forgery, investment banking, Investor, jurisdiction, legal standing, Mortgage, originator, Pleading, Presumptions, prima facie case, securities fraud, Servicer, sham transactions, standing, TILA, TRIAL OBJECTIONS | Tagged: , | 1 Comment »

Due to tech difficulties there will be no radio show tonight. tune in next week to the Neil Garfield Show.

Posted on July 16, 2020 by Neil Garfield

Filed under: foreclosure | 1 Comment »

And while we were sleeping, SCOTUS rules that Congress has no power to limit Presidential Power on Agencies Created by Congress

Posted on July 15, 2020 by Neil Garfield

see https://library.nclc.org/impact-supreme-court-seila-law-ruling-cfpb-constitutionality

It has long been held, assumed  and otherwise inscribed in law that Congress is the sole source of appropriating money for the federal government to spend. That is pursuant to the supreme law of the land.

And it has also been long held that Congress can put conditions on its appropriation of money either for an existing Federal agency or a new one. Such conditions can be event or monetary thresholds or controls to retain maximum Congressional oversight to see to it that the President is not doing anything contrary to the congressional mandate.

Yes that is how it works in our country.

So it is both dangerous and irksome that the Supreme court of the United States (SCOTUS) decided that the head of one of the only agencies exclusively devoted to protection of consumers could be fired without cause despite a congressional mandate to the contrary.

Besides the obvious effects on consumers and borrowers in particular, this decision could be a harbinger of still more unrestrained presidential power leading to autocracy. You may like it now if you align with republicans, but you won’t like it later when the shoe is on the other foot.

By politicizing the highest court in the land we have stepped on another rake. This will cost us as taxpayers, consumers, borrowers and citizens.

 

Filed under: foreclosure | 8 Comments »

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