Everyone thinks they are an expert. Then they start compounding errors.

So for those who report to me that they have already sent a QWR, DVL or demand letter, let me say that unless you are an experienced litigator who has received the latest education in connection with the preparation of such letters, you should seek and obtain advice and assistance from a licensed professional.

Here, for example, is the partial agenda for a seminar produced by Rossdale CLE Seminars for lawyers around the country. I am not attending because I need the credits.  I am attending for the same reason that doctors go to medical conventions and seminars. The law is constantly changing and the specific requirements of various types of notice and correspondence are also changing. So after 47 years of litigation experience, I am attending because I need to know about those changes and those requirements.

Key Agenda Points     View Complete Agenda
  • Key Language to Include in Effective Demand Letters
  • Crafting Compelling Narratives in Demand Letters and Responses
  • Drafting Powerful Responses to Demand Letters
  • Winning Strategies to Demonstrate that the Law Is On Your Side
  • Avoiding Common Demand Letter Issues
  • Using Statistics in Demand Letters
  • Utilizing Moral Foundations and Defenses
  • Overlooked Responses to Demand Letters that Get Results
  • Structuring Evidence in Demand Letters
  • Determining How Much Information to Provide in Damage Calculations
  • Successfully Limiting Liability in Responses
  • Interactive Question & Answer Session

Writing a demand letter seems simple to laymen and unfortunately, some lawyers who are not litigators. But there is an example of a CLE seminar I am taking after 47 years of litigation experience.

Yes, you can do it yourself. But if you actually want it done right, you should ask someone to do it for you because they have prior experience, education, and licensing.

And yes, it is my opinion that all homeowners should contest every piece of correspondence and every notice sent or served upon them by anyone asserting the right to administer, collect or enforce any unpaid loan account allegedly due from the homeowner. No such unpaid loan account exists.

In litigation, homeowners consistently lose, and lawyers representing them consistently lose, mainly because they fail to litigate the issue of whether a payment history is the same as an unpaid loan account. It is not. There is not a single accountant in the world who would say otherwise.

 

 

AS LONG AS YOU FEEL GUILTY ABOUT WINNING, YOU WON’T

People make a spectacular fatal error when they assume that anyone with whom they are corresponding, paying or calling is the slightest bit interested in preserving the integrity of a loan account. For the investment banks, this is not about loans. It is all about selling securities and then stealing homes. 

The successful outcome to them is the house because when they sell it, they keep the money and give it to nobody. “They” means that the investment bank is the one actually receiving and/or controlling the funds. The players are NOT interested in a workout that preserves the loan account for their portfolio. There is no loan account and there is no portfolio. They are only interested in getting paid by or on behalf of the investment bank. That payment is entirely contignent on convincing consumers that they have a payment due. 

When homeowners and their lawyers commit this error — which is ordinarily the case — they sign their own doom. Then they blame judges and the system for failing them. I agree that the system failed when the chartered agencies (FDIC, Federal Reserve, OCC, SEC, FTC) failed to interfere on behalf of the consumer/homeowners., But the alternative was to win in court which I have done repeatedly.

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There are hundreds of iterations of smoke and mirrors. Some call it “musical chairs.” The idea is to keep moving the goalpost by renaming the claiming party and renaming a party as an agent so many times that you assume the agency exists and that the loan account exists.

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One of the iterations involves Flagship Financial Services. As usual, this involves the name of a registered corporation which is a perfectly legal fiction. But the fact that this fictitious entity exists under the law does not mean there is anything in it or anyone employed by it. But there is a subset that applies to Flagship. Flagship did exist as a real business entity before it converted to being an intermediator — i.e., getting paid to facilitate the flow of money rather than being part of it.

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You are almost certainly correct if you think this is all smoke and mirrors. Here is a copy of a filed complaint in which the names of these players were used. You are actually dealing with Ocwen Financial Corp.,  a company that has no financial interest in any payment, debt, obligation, note or lien ever issued by you. It is operating under contract for an investment bank.

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Flagship Financial Group is an intermediator, not a lender. It was often tasked with executing endorsements on notes and even mortgage assignments despite its utter lack of ownership of any unpaid loan account due from you.  At the time of your transaction, it was operating strictly as a mortgage broker, and not as a lender.
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That means that at the conclusion of your transaction cycle, there was no identified lender, contrary to common law and statutory law governing lending transactions. There also was no account receivable created on the books of any creditor to whom you owed money. The money that was given to you or that was paid on your behalf was simply an inducement to get you to execute documents that would make the transaction look like a loan.
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This enabled the investment bank to sell securities and generate revenues on average of at least 12 times the amount paid to or on your behalf. You not only receive no consideration for being the issuer that enabled the execution of the securities scheme, but you are also required to pay the money back, plus interest, because of the illusion of a loan.
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You, therefore, received negative consideration for the transaction. (You pay back everything paid to you or paid on your behalf, plus interest, fees, points, etc.). All revenue and profit went to the investment bank and the players with whom it shared fruits of the scheme.
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MERS was an agent.  The principal was Flagship. Mers did not have any greater rights than Flagship possessed. As I have previously briefly described, flagship didn’t have any rights and didn’t have any ownership. The agency with MERS was an illusion. Any document executed purportedly on behalf of MERS was executed by either an employee or independent contractor for Ocwen Financial Corp. or one of its family of companies.
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 Your focus should be on the precise identification (assuming absolutely nothing) of the name and contact information of the party on whose behalf claims are being made to administer, collect or enforce an implied existing unpaid loan account. Do not assume the loan account exists. Without actually reviewing your documents and your case, I cannot express a definite opinion, but I am relatively sure that the opinion that I would express is that no such account exists.
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Your next step is to force the issue in discovery: that is, the requirement that the opposition presents the ledger showing the creation and maintenance of an unpaid loan account due from you to the owner of the ledger. Instead, they will attempt to present you with a payment history which is not the same thing.
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Only the ledger is the best evidence of the balance due as claimed by the creditor.  and only the best evidence can be admitted into evidence in the court record. If the best evidence is not available, there must be considerable evidence explaining why it is not available and, more importantly, why the party proffering that evidence has any right to do so. This is how you get past legal presumptions in court, which often lead judges to enter judgment against the homeowner and for the claimant, thus providing a windfall to the claimant and a total loss to the homeowner without any right, justification or excuse on the part of the claimant.

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In most cases, I recommend that you order the preliminary document review premium, which includes a current title search with copies of all relevant recorded documents, my analysis, a review of your correspondence and notices, a review of court documents, and a recorded 60-minute consultation with me. The consultation can be broken up into two parts if necessary.
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It is always wise to have a local attorney on the line, since I am either not licensed to practice law in your jurisdiction or I don’t go to court anymore even if I am licensed in your jurisdiction. I operate only as a legal consultant.
 To order the PDR premium, please click on the following line:
As an added benefit, you get a free folder into which you will upload all the documents related to your transaction, which you can use as a file drawer.
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PRACTICE NOTE: People ask me what I mean by transaction cycle instead of just referring to the transaction. The answer is simple, every transaction that appears to be a single event is composed of several parts that most people don’t think about but which make all the difference in the world to lawyers, lawmakers, and judges.
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In the old-style loan transaction, the loan closing consisted of several parts, including documents and representations that are incorporated into the closing as required by statutes governing lending practices. So the homeowner left the closing table thinking the transaction was complete. It wasn’t. The “lender” had not yet funded.
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The closing agent had to present the closing documents and signatures first, and then the loan was funded a few days later. So that is why it is called a transaction cycle. The homeowner was typically unaware of all the communications, faxes and wire transfers that first went to the closing agent, then to the seller, then to the prior lender, and then payments to the brokers etc.
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Since around 2001, the transaction cycle has evolved into something entirely different in form and content. Wall Street changed the form and content. By 2006, ALL transactions were funded via intermediaries who were formed to operate as sham conduits. Those conduits allowed their names to be used but were not permitted to have access to any of the closing funds.
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The money was coming from the investment bank which was the underwriter (owner of a start-up) that was issuing and selling securities. The investment bank took a loan — usually offshore and frequently from Credit Suisse — that was used to fund the required payment (if any) to the closing agent. No payment was required if the same investment bank was the underwriter of the prior and the current transaction.
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The investment bank then sold the certificates that were falsely labeled as mortgage-backed securities using the regulations permitting the filing of “shelf registrations” in order to gain access to the Sec.gov site. Lawyers later upload and download documents from that site and present them as if they are government documents despite the fact that no government official has ever seen, accepted or approved them.
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Unschooled lawyers and homeowners do not realize what constitutes a government document in connection with securities filings and allow such documents to be admitted into evidence as if everything on them was and is true. Such documents are nearly always false usually in whole but sometimes in part.
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Upon sale of the certificates, the offshore loan is paid off in full, usually within 30 days, and sometimes contemporaneously with the myriad of fake closing tables set up to close transactions with homeowners and prospective homeowners. This leaves the investment bank in complete total discretionary control over all payments, fake obligations, executed notes, and executed liens that were issued by the consumer.
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But it also leaves the investment bank without any “loan balance” due because they have already been paid in full. In fact, they have generated, on average, 12 times the total amount paid to the homeowner. They have avoided even the pretense of a loan balance because if they had one, they would be the real lenders in a table-funded loan transaction. And that would subject them to the laws, rules, and regulations governing consumer lending transactions.
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Knowing that they were violating the statutory requirements of divulging ALL sources of compensation, revenue or profit resulting from the execution of the loan documents, they evaded the legal requirements. They failed to report to anyone that the named lender on the note and mortgage was not the lender or a creditor.
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Like substituting a payment history for the actual loan account, they substituted a name which is usually registered as a business entity with no right, title, or interest to any part of the transaction in which they were named.
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And then, they named MERS as an agent for the named payee on the note and the named lien holders. By adding the words “and its successors,” everyone missed the point. There are no successors to MERS. And there never was any succession to the named payee or mortgagee. 
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DID YOU LIKE THIS ARTICLE?
Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.
CLICK TO DONATENeil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FREE REVIEW: Don’t wait, Act NOW!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. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
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CLICK HERE TO ORDER CASE ANALYSIS 
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Converting from nonjudicial to judicial foreclosure

nonjudicial is NOT supposed to be a workaround for due process.

IT IS ILLEGAL TO USE NONJUDICIAL PROCESS THAT WAY.

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The statistics are very clear. The foreclosure mills win far more often in nonjudicial foreclosures than in judicial foreclosures, where they are required to file a complaint containing allegations of fact that can then be tested in discovery.

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Basically, it boils down to a motion for realignment of parties when the action is brought under the nonjudicial statutory scheme. In constitutional terms, nonjudicial is NOT supposed to be a workaround for due process. The same pleading and proof requirements are required in nonjudicial and judicial. The problem seems to be that pro se litigants know nothing about that, and most lawyers don’t think of it.

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In several dozen cases, I have experimented with such motions. They were not successful. That may have been because the local counsel lawyers didn’t understand what they were doing.
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I think the path to success might be establishing the case as “complex litigation” and THEN asking for realignment of the parties requiring the lawyers who initiated the nonjudicial foreclosure to file a complaint that you can deny and put the issues in dispute.
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To get to that point, you need to file a TRO complaint that says you deny the existence of an unpaid loan account owned by the designated “beneficiary.”
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Thus the designated beneficiary does not qualify as a beneficiary under state statute. THEN plead that the burden is on the claimant to plead and prove a case and that a realignment of the parties is required. Plaintiff (homeowner) should become the defendant, and Defendant (foreclosure mill/beneficiary) should become Plaintiff based on a timely filed complaint.
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ONLY then is the homeowner legally able to deny the allegation that the foreclosure mill/beneficiary is attempting to enforce an unpaid loan account owned by the designated beneficiary. That is your argument for realignment.
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Nonjudicial was intended to speed up an inevitable result. But the result is not inevitable if the issues are in dispute. Nonjudicial should be converted to judicial if the issues are in dispute. At the stage of early motions, the allegations made by the plaintiff homeowner should be taken as true, thus supporting the motion for realignment of parties.
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I would add that opposition from the foreclosure mill would be good cause for you to demand their formal allegation that the unpaid loan account exists and is owned by the designated beneficiary.

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PRACTICE HINT: The issue is not whether the unpaid loan account exists or whether the designated plaintiff or beneficiary owns it. The issue is whether the foreclosure mill lawyer can prove it exists. He/she cannot prove it exists if (1) the issue is contested and (2) they are unable to corroborate the truth of the matter asserted in the documents (assignments, allonges, etc.).

Such documents are evidence of a transfer of the unpaid loan account, but they do not rise to the level of solid proof — if the issues are contested. If the issues remain uncontested, the only evidence before the court is the legal presumption arising from the document’s content that was admitted into evidence. 

You don’t need to believe that the unpaid loan account does not exist or that the designated plaintiff or “beneficiary” owns it. You only need to prevent the opposing lawyer from proving the truth of the matters being asserted and argued, to wit:

(a) that the unpaid loan account exists,

(b) that this is an action to enforce it, and

(c) that the designated Plaintiff or “beneficiary” owns it. 

What you will find in response to your challenge is that the lawyer from the foreclosure mill is willing to talk about anything rather than discuss the existence, status, and ownership of an unpaid loan account on the books of any creditor, much less the one they designated as plaintiff or beneficiary.

Instead, they will talk about ownership of the note or ownership of the mortgage lien by virtue of some document of transfer that appears to grant “new ownership” when in fact the document of transfer is creating the illusion of ownership where no such ownership exists because no such asset exists.

===================
DID YOU LIKE THIS ARTICLE?
Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.
CLICK TO DONATENeil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*
FREE REVIEW: Don’t wait, Act NOW!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. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Recovering Your Equity After Foreclosure

As a result of court bias and the plethora of legal preumptions arising from fabricated documents, it might well be the better strategy to do nothing and then sue for excess proceeds followed by an amendment to the pleadings alleging faud, compensatory and punitive daamges. Check with local counsel. 

In a recent decision, the United States Court of Appeals for the Sixth Circuit recently issued an opinion reaffirming mortgagors’ post-foreclosure rights to the equity built in their mortgaged property after the creditor’s debt is paid in full. Hall v. Meisner, 51 F.4th 185 (6th Cir 2022).

The courts of that time adhered to the principle of “once a mortgage always a mortgage,” meaning that a lender was never permitted to simply convert its security interest “as mortgagee into fee-simple title to the land” and extinguish a mortgagor’s equitable title for no value. The Court then, citing Justice Antonin Scalia, found that while a creditor does have a right to the “full effect of [its] securities,” this right never entitles the creditor “to recover more than the amount owed” and any practice sanctioning such is “draconian.” Thus, the land was “worth more than the debt” and any surplus must go to “the landowner for the loss of [their] equitable interest.” [e.s.]

This presents an interesting issue post-foreclosure. If there was no debt to repay, the entire amount of money recovered from the sale of the property should go to the mortgagor/homeowner.

In nonjudicial (deed of trust and power of sale) states, I think the position of the banks is more precarious than in judicial states.

If the homeowner does nothing and the sale occurs, there are two possibilities. First, it is sold to a bona fide third-party purchaser for value. Second, a deed is issued to the designated beneficiary on whose behalf the lawyers issued a Notice of Substitution of Trustee, Notice of Default, and Notice of Sale.

If that beneficiary actually did not own an unpaid loan account due from the homeowner/mortgagor, it is entitled to nothing. So when the property is liquidated under the state’s nonjudicial foreclosure statutes, the homeowner/mortgagor is entitled to everything.

To collect on this, the homeowner would need to sue for excess proceeds, alleging that the amount collected was more than the amount owed. In discovery, the issue of the location and ownership of an unpaid loan account shown on the books of the purported beneficiary would become the primary issue.

And once it is determined that there is no such account, the homeowner receives the entire proceeds from the forced sale of the property plus attorney fees and costs depending on the state statutory provisions. In addition, the homeowner has set up a clear case for compensatory and punitive damages for a fraudulent foreclosure.

This goes back to the days when I originally suggested that homeowners let the foreclosure go through (2006-2009).

But if the homeowner/mortgagor did file suit in a nonjudicial state, there might be a different story, and the problem for the homeowner might be more challenging as it would be in a state requiring judicial foreclosure.

If the nonjudicial challenge is a case that is litigated all the way through a Final Judgment, like in a judicial foreclosure, then the amount of the debt has been set by the court.

The bankster lawyers will argue that the debt is merged into the judgment, and they have lots of support in case law to support that position. Further, the judge hearing your action for excess proceeds will be highly resistant to your action, viewing it as a hail Mary pass. Another attempt to escape the consequences of a legitimate debt.

The contrary argument to be presented by the lawyer presenting the homeowner would be that the overriding precedent for centuries is that there are no circumstances under which the mortgagee/lender’s interest can be converted into fee simple ownership. It will always be a mortgage, regardless of whether the judgment was entered — or whether there was a sale.

Quoting from conservative Justice Scalia, as above, and citing the cases referenced above, the homeowner has the winning argument — but only with steadfast resolve, persistence and strictly confirming to the rules of court.

see https://www.lexology.com/library/detail.aspx?g=030ea6fa-d6f4-4378-9b25-0b93e3151874

see https://casetext.com/case/hall-v-meisner?ssr=false&resultsNav=false&tab=keyword&jxs=dc

==========

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

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

Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*
FREE REVIEW: Don’t wait, Act NOW!

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. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

How homeowners win against foreclosure claims

People always write to me telling me that the documents used by the opposition are facially invalid. They say this because they do not know what they are talking about. They think the document is facially invalid because the lawyers and “Servicers” are lying. Lying, fraud, etc., is evidence of substantive invalidity but not facial invalidity. Do not use terms if you do not know what they mean in court. 

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SO, generally speaking if you say that the assignment of mortgage or endorsement on the note is facially invalid, you are incorrect. Facially valid means it conforms in the form and content to the requirements of the applicable statute.

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A completely void deed, for instance, is facially valid in Florida for example, if it contains an adequate description of the property, recites the name of the grantor (even if the grantor is not the owner) and is signed by the grantor with notarization of the grantor’s signature.  The continents must state that the conveyance of the title is intended.
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This is why I keep harping on the ignorance of most people. It is not an insult. It is a statement of fact. What you mean by not facially valid is that it shouldn’t be valid.
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Once a facially valid document is executed and recorded if necessary, it carries with it a presumption that (a) it exists and (b) validity of its contents. Documents recognized by judicial notice are only admitted as presumption of existence and not contents.
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Pro Se litigants and many lawyers go down the wrong path when they attack the validity of the instrument of conveyance. It is usually presumptively valid even though it might be fatally deficient. 99.9% of arguments about such documents are ignored, and properly so, if the judge is following the law.
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But none of that means the homeowner automatically loses, as many pro se litigants believe. The adversarial judicial system is set up to enable correction of the record and judgment for the homeowner if the presumptions arising from fatally deficient but facially valid documents are rebutted.
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The banks have all thought this out and planned out their strategy. They know that as long as they do not admit the fabrication and forgery of the document, the court is required to consider it valid — unless the homeowner successfully rebits the legal presumptions arising from the facially valid document.
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Going back to our example above — a void deed that is facially valid — there are two ways the homeowner can win. In our example, someone (i.e., thief) has executed a facially valid deed to the homeowner’s property, thereby asserting a conveyance of the title to the property in fee simple absolute.
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To make it more clear and more congruous with foreclosure situations, the grantee of the void deed is a fellow conspirator who neither accepts nor denies any interest in the property.
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The homeowner would go to court alleging that there was no transaction in which the grantee paid for or otherwise accepted the title to the property. The grantee does not now assert any financial or title interest in the property. The homeowner would further assert that the grantor did not possess any title or interest to convey.
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At the motion to dismiss the complaint, the allegations by the homeowner are taken as true and accepted if, when proven, they would lead to a specific remedy demanded in the complaint.
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[Or if you bring it closer to foreclosures, imagine that a third party, acting with attorneys protected by a doctrine called litigation immunity, files an eviction action against the homeowner. They would state that they are acting on behalf of the grantee even though the grantee knows nothing about the conveyance or the eviction. In that case, their allegations are taken as true but only for purposes of the hearing on the motion to dismiss].
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Back to our example. The two ways that the homeowner can win are (a) proving facts that rebut the presumptions arising from the facially valid documents and (b) knee-capping the opposition by seeking evidentiary sanctions that bar the opposition from introducing evidence of ownership. 
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In our example, the first way is simple. By merely producing a certified copy of the chain of title, the homeowner can prove that the “grantor” did not have title to convey and therefore was not a grantor. Case over. Or, if he or she was lucky, a witness from the grantee would be produced saying that they had no part or interest in any transaction producing the deed. They have no such interest in the property or possession of the property. Game over. The homeowner is the winner.
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If the homeowner wanted to get into more complex litigation, perhaps because a lawsuit for intentional interference or fraud is being considered, the homeowner would submit demands in discovery.
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To the grantor, the homeowner would demand corroboration of ownership of title, and that the grantor was part of a transaction in which it sold or otherwise granted the title.
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The same sort of questions would be addressed to the grantee. Making it closer to the foreclosure situation, the answer from the grantor would be that it should not be required to answer because of the presumptions arising from the facially valid deed. That is circular logic. But it is often accepted in foreclosure cases.
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The grantee would not answer at all. Instead, the lawyer for the opposition would assert a response that mirrors the grantor’s response without any knowledge, intention or control on the part of the named grantee. The grantee appears protected from criminal and civil liability because they will say they knew nothing about the transaction. But if this is part of a pattern of thousands or millions of transactions, that defense wears very thin.
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At the hearing on objections to discovery, the objections are overruled, and the grantor and grantee are ordered to respond to the discovery demands that were presented in a timely and proper manner. There are no sanctions yet.
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When the lawyer for the grantor and grantee (often the same attorney) fails or refuses to comply with the court order, then the homeowner moves for economic sanctions and evidentiary sanctions. The judge awards economic sanctions or reserves rulings on sanctions and gives the opposition another period of time to respond.
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When the lawyer for the grantor and grantee (often the same attorney) fails or refuses to comply with the new court order, then the homeowner again moves for economic sanctions and evidentiary sanctions and demands that the opposition be held in contempt of court.
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The judge now awards economic and evidentiary sanctions, finds the opposition in contempt of court and gives the opposition yet another time to respond. If they respond, they will purge themselves of contempt, if not, they are barred from introducing any evidence of title and further barred from taking any action in which possession or title might be affected. The court might also strike their pleadings.
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It is the second path that is the only one available for homeowners in foreclosure. But it works at least 65% of the time. It requires a considerable investment of time, money, and effort. Generally speaking, while some pro se homeowners have prevailed on their own, this strategy only works if a lawyer is involved.
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But if the homeowner does win, there are substantial rewards since nobody is left to make a claim. That clears the path to seek quiet title and eventually remove the lien from the property, thus making the entire property value unencumbered equity for the homeowner.
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In the alternative, the banks will often pay the homeowner to take their win and shut up. So they pay a sum of money, reduce the “balance” of the non-existent unpaid loan account (as much as 90%), and scrub the court record of everything that happened.
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SPECIAL PRACTICE NOTE FOR LAWYERS DOING LEGAL RESEARCH: The banks’ strategy is to prevent any of this from reaching the appellate level. So each time the homeowner wins, they either pay him or her to shut up or they give up on that thread of the fake “Securitization” infrastructure and do not appeal. By not appealing, the appellate record lacks any evidence that homeowners win, which they frequently do.
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DID YOU LIKE THIS ARTICLE?
Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.
CLICK TO DONATE

Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FREE REVIEW: Don’t wait, Act NOW!

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. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
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CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
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CLICK HERE TO ORDER CASE ANALYSIS 
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Dear Robo-callers, robo-texters, robo-emailers and robo-signers

If I leave my front door open, that is not an invitation for you to enter on my property, enter my house and find someone to sell something. That is called “entering,” and it is a felony. It isn’t breaking and entering, but it is entering. I don’t want you or whatever you are selling to enter upon my property or go into my house or distract someone from whatever they were doing, forcing them to escort you out or call the police.

If my door is unlocked but closed, it is still breaking and entering, just the same as if you came through a window with brochures. The fact that you did not intend to steal anything directly is no excuse or defense against the criminal charge of trespassing, breaking, and entering. The fact that I left it unlocked does not mean you are invited to come in and sell something or bother anyone in my home.

If the door is locked and closed, then it is a higher offense. The fact that you found a way to get in any way does not excuse the crime of interfering with my quiet enjoyment of my property and my privacy. It is trespass, breaking, and entering. You belong in jail.

And if you manage to trick me into signing a document that I have no chance to read does not mean that I am bound by that document. All valid contracts require reciprocity and a meeting of the minds. My mind didn’t meet you or your mind. I want you out of my life. If there is a clause that says you can enter into my home, I have not consented to that if I knew nothing about it and if I never had a reasonable chance to find out.

That is the law, by the way not just my opinion.

The fact that I possess a telephone and a number does not give you or create my consent to call me — I don’t care what documents you have hidden away with microscopic writing. We both know I did not invite or even consent to your call, text, or email.

And for those who robo-sign documents for people who tell them to sign documents they don’t read or understand, I didn’t consent to you executing documents that could alter the trajectory of my life.

All of this is about caveat emptor, and people still believe that is the law. It isn’t. The people and the government figured out that it doesn’t help society, and it isn’t capitalism if you get money from people through false pretenses. It’s theft. And it isn’t good for society if you can trick people into buying services that discretely commit them to keep paying for a service they only wanted once.

FAUX TRANSACTIONS: The Mathematics (Bookkeeping) behind the securitization myth

“You got the loan, didn’t you?” The correct answer is “NO.”
While most Americans understand that Wall Street “securitization” is operating behind the scenes, as consumers they have no knowledge of how this is impacting them. And worse, they like to pretend that they do know.
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Millions of American homeowners have been asked the question. And they have answered that question as if they know all about Wall Street finance and the lending marketplace. *
By accepting the Wall Street myth, smoke, and mirrors and incorporating their well-developed sense of morality, American homeowners answer “YES, I got THE LOAN” because they want to be truthful and accurate and maintain their credibility.
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And Americans like their victimhood.  But that is the lazy way out of a challenging situation. The truth is that virtually no consumer knows any more about their installment payment transactions than they do about rocket science.
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I have spent 16  + years so far educating lawmakers, homeowners, law enforcement lawyers, and regulators about false claims of “securitization of debt,” much like the whistle-blower who warned the SEC about Madoff ten years before the scheme collapsed. This, too, will eventually collapse. But like Winston Churchill said a long time ago, “You can always count on the Americans to do the right thing — after they have exhausted all other options.”
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Some consumers become lawyers and carry their faux knowledge with them. And some lawyers become trial judges. Some trial judges became appellate judges. Some lawyers become lawmakers. And all of them are heavily influenced by well-scripted vomiting of fake news, false theories, and empty threats.
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Since 1998, when President Clinton signed waivers and outright deregulation of the most dangerous financial instruments ever devised, everyone has been making decisions based on faux (false) knowledge.
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Through generational errors in judgment and facts, most consumers grow up with a skewed view of the world and personal finance. Through repetition and coercion, most Americans are far more interested in what they can borrow (i.e., their FICO score) than what they have in the bank. Through the lens of history, this is obvious lunacy.
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The consumer-driven economy has turned every American into food for a vast monster of the machinery of decreasing choices, unwanted merchandise, unneeded services, and increasing prices while depressing the wages of those who produce the goods and services. So much for the opening words of our constitution about the general welfare. Aspirin can be very helpful, but you will bleed to death if you take enough of it.
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Since consumers mostly do not want to play the part of an “issuer” in the risky business of selling securities, they refuse to accept that they did exactly that, albeit unintentionally.
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When the few consumers willing to research and get informed become knowledgeable in the world of accounting auditing and high finance practiced by Wall Street, they come to vastly different factual, legal and moral conclusions. When they become knowledgeable, the moral conclusions drawn by consumers regarding their so-called “credit” transactions shift 180°.
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They suddenly realize that they were duped into issuing paper that was instantly converted into data creating marketable bets on how that data would change or be announced. There was nobody on the other side of their loan transaction. There was no lender.
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In fact, there was no creditor. At the time of the faux closing with a closing agent, an investment bank had already made more money than anything paid to or on behalf of the consumer. It was on its way to generating revenue geometrically (and sometimes exponentially) higher than anything known to the consumer. All this was done solely because the consumer signed and issued the required papers.
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The consumer was cheated out of the opportunity to bargain for economic incentives or participation in the scheme. Their share, it turned out, went to paying tens of billions of dollars in bonuses, commissions and fees each quarter to such high rollers at the peak of management of investment banks to the lowest pizza delivery guy who was willing to say anything to get the consumer to issue the paper.
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Institutions like U.S. Bank N.A., Bank of New York Mellon, and Deutsch Bank have been raking in hundreds of millions of dollars per month in exchange for the use of their names under very restricted circumstances without any risk that they might lose money, pay fines, sanctions or damages to the governments or people that were injured by the faux securitizations scheme.
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The money is there to pay all the players and actors on the stage as much as they want and more simply because the sale of bets on data so vastly exceeded the transaction with consumers/homeowners that Wall Street and to invent new ways to park the money overseas to avoid accountability and worse, taxation.
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Worse, the consumer was absorbing the risk of nobody being home. Since there was no company, bank, person, or legal entity that recorded an unpaid loan account receivable on its own books, and each party who was implied to have such a data entry had contracted away any rights to administer, collect or enforce the “transaction,” there would never be anyone who had the legal authority or duty to offer workouts or even anyone who had the incentive to redo the deal to save the value of the putative loan account. The loan account did not exist. Nobody had an interest in any value derived from ownership of an unpaid loan account.
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In fact, the actors had the reverse incentive. Since there was no loan account, there was no loss. And since there was no loss, any money they could get through collection was pure revenue. *
And any money they could get through foreclosure was a pure windfall bonus. Consumers did not bargain for such an outcome. They bargained for what was enshrined as law in the Federal Truth in Lending Act — that “lenders” were responsible for assessing the viability of each transaction and “lenders” were responsible for creating fair appraisal of values.
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As early as 2005, 8,000 licensed appraisers warned congress that they were under heavy pressure to issue appraisals far over property values. By 2007 the Case-Schiller index showed clearly how prices were at unprecedented ratios compared to fundamental value — i.e., the median income for a geographical area.
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The more anyone probed, investigated, and analyzed, the more apparent it was that consumers/homeowners did not get what they had asked to receive — a loan transaction. Instead, they were given “loan papers.” or “closing papers.” They received no money from a lender. They only received money from a closing agent who did not know the identity of his principal. Consumers were accepting risks that were in violation of existing laws, rules, and regulations. And they paid the price.
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Wall Street lawyers knew they had no legal way of enforcing loan accounts if they did not exist. So they created the illusion of loan accounts by presenting in court an uninformed witness who testified he or she was familiar with the records of the company that was designated as a “servicer.”
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By argument (but no evidence) from lawyers who are protected by litigation immunity, they convinced thousands of judges that a payment history appearing as a possible record of business performed by the faux “servicer” was an acceptable substitute for what had always been a rock bottom requirement in all such actions — production of the loan account. They called it a Payment History, but it was not a history of any payment that the company received.
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And Judges being lawyers and not accountants had no choice but to believe them because the consumer was not an accountant or sophisticated in Wall Street finance. Hence no timely and proper challenge was made to the obvious: there was nothing to enforce.
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So millions of homes were foreclosed to satisfy greed under the illusion that the money was being used to pay down an unpaid loan account receivable. So far as I have been able to ascertain, there is not a single case where foreclosure resulted in the payment of a creditor who owned an asset deriving it value from the promise of a consumer to make payments.
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This mammoth fraud was avoided by Iceland, who put the bankers in jail, reduced household debt at the expense of the banks, and enjoyed a recovery from the 2008 recession within 4 months. The stimulus that Wall Street convinced the American government to pay out in the form of bailouts and bond buying was completely avoided in Iceland.
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Having said all that, several readers and commentators have asked me to give a brief explanation and description of the accounting involved. Be advised that this is not complete. Some facts have been shifted (not changed) to support the reality implied below.
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Additional caveat: Although not a licensed CPA, I received my degree in accounting and auditing. The revelation from this accounting led to a concealed agreement in Arizona that eliminated the State’s deficit following the 2008 crash. The banks agreed to it to avoid income taxes and other fees owed to the state, county, and municipalities. Total $3 Billion.
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Wall Street banks could have shared the prize money with the consumer/homeowner who made all this possible. But that was unthinkable because sharing money with the proletariat was unthinkable.
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So here is a short history of accounting entries starting in the late 1990s as it was applied to what was falsely labeled “homeowner loans.”
  • On the books of an offshore lender (like Credit Suisse), you have a debit to the cash account and credit to the loans receivable account. The cash account appears on the left side of the balance sheet under assets, and the loans receivable account also appears on the left side under assets. The total assets do not change. They are categorized as reflecting a decline in available cash but an increase in the asset consisting of ownership of the unpaid loan account.
  • On the borrower’s books (like Lehman or JPM Chase), you have a credit to the cash account and a credit to the loans payable account. The cash account appears on the left side of the balance sheet under assets, and the loans payable account appears on the right side under liabilities. The total assets change, reflecting the increase in the amount of cash available. Total liabilities increase reflecting the amount owed to the lender. This si teh soruce of funds that is used to send to closing agents — if there is a payment of money. If the soruce of funds is the same on a “refinancing” there is no payment of money, only an instruction is sent to the closing agent on presetnign a settlement statement. The books are balanced because of the accepted basic principle that assets = liabilities + stockholders’ equity. 
  • For reasons that will be apparent in a moment, these entries are not made on the books and records of the borrower (e.g., Lehman or JPM Chase) directly. They are made indirectly on the books of an offshore controlled entity — with full permission and cooperation of the lender (e.g. Credit Suisse). These entries are referred to as “off balance sheet” transactions because they are not reflected on the books and records filed with the SEC or banking authorities. This trick of accounting was born and approved in the 1960’s see Unaccountable Accounting by Abraham Briloff, who predicted this mess.
  • Continuing with the borrower’s off-shore books (i.e., Lehman or JPM Chase), you have a debit to an off-balance sheet cash account in the amount required to send to a closing agent who is closing a transaction with a homeowner or prospective homeowner. This is where the accounting gets funky because instead of making an entry that would establish an unpaid loan account as an asset of the borrower (Lehman or JPM Chase), there is no entry. This avoids or evades the category of a lender in the transaction with the homeowner/consumer. Hence no compliance with lending or servicing statutes is required, and no liability for violation of lending statutes applies.
  • The closing agent receives the funds and instructions to prepare documents in favor of ABC Loan Broker, Inc., who has already assigned the transaction, even before a loan application is made, to a controlled intermediary for the borrower (e.g. Lehman or JPM Chase). ABC Loan Broker is temporarily assigned the title of “lender.” It is an undercapitalized entity that removes the risk of bankruptcy or legal liability from the investment bank borrowers (e..g. Lehman or JPM Chase).
  • Hence the closing agent has equal entries of cash in and cash out — less the closing fee (posted to the general ledger like all other financial transactions) but appearing on the income or cash flow statement instead of the balance sheet.
  • The faux originator or “lender” has no entries on its ledger, assets or liabilities. It only has an income entry for cash receipt for its fee in playing a role in the faux lending scheme with the consumer/homeowners. This is posted to the income statement rather than the balance sheet.  When it goes out of business, it never reports in any bankruptcy that it was the owner of any loans receivable. Never.
  • The closing agent reports the transaction to the homeowner/consumer as though there was a loan agreement and transaction between the faux originator/lender and the homeowner/consumer. In fact, though, there was a loan agreement (i.e. note and mortgage), but not a loan transaction — and even the agreement is not executed by the originator/lender.
    • The transaction — i.e., the passing of money between parties — occurred between the borrower (e.g., Lehman or JPM Chase) and the consumer/homeowner.
    • People assume that the grantee of an instrument obviously knew about it and wanted it because they paid for it.
    • This assumption is wrong in nearly every document executed in every situation involving homeowners.
    • Entities like US Bank will later disclaim any knowledge, control or interest in any conveyance. If that is pierced, then they have an indeminfication agreement from, for example, Lehman or JPM Chase.
  • The faux transaction is then “corroborated” by the illusion of a company that is named as “servicer” for the account without anyone saying that the “Servicer” is acting for the originator acting as “lender” to the consumer/homeowner.
    • The consumer receives correspondence prepared and sent under the letterhead name of the company that has been declared as a “servicer.” Thed lcaration si authroied by AI correspondence and statement robots owned, maintained and oeprated by third aprty  FINETCH companies who take their direction from, for example, Lehman or JPM Chase.
    • By the time the consumer gets access to information that is inconsistent with what has been told to him or her, the statute of limitations on violations of lending and servicing laws has expired.
      • Worse yet, the rendition of court orders contrary to what the homeowner newly learns creates a bar to even raising the issue of fraud under claims preclusion (res judicata, collateral estoppel and law of the case).
  • The Borrower (e.g. Lehman or JPM Chase) then sells IOUs (“certificates”) to investors, promising that they MIGHT make installment payments indefinitely if certain conditions are met. Those condition include but are not limited to the complete unfettered sole discretion with or without cause vested entirely in the Seller (e.g. Lehman or JPM Chase).
    • Like the transaction with the consumer/homeowner this off-shore transaction is conducted under the name of an existing or nonexistent special purpose vehicle, usually falsely labeled as a REMIC Trust.
  • For example, “U.S. Bank, N.A. as trustee for the SASCO 2006-A1 Trust Certificates,” where it is not clear whether the reference is to US Bank as a trustee at all, or if it is a trustee for a legally organized trust in some jurisdiction, or for certificates that form the res of an unanmed trust, or for the holders of the IOU certificates.
    • You will never find any agreement even offered during discovery that provides any information relating to the authority of US Bank (or Bank of New York Mellon or Deutsch) wherein they have some duty or power of representation to act for the holder of the IOUs (certificates).
    • But if you ask U.S. Bank, they will admit they know nothing about the transaction with the consumer nor any action undertaken to administer, collect or enforce it.
    • They are willing (i.e., they have issued a license) to allow their name to be used as the principal in the principal-agent relationship with the apparent “servicer” (who is NOT allowed to touch any money — and therefore has no record of any such receipt).
    • So neither the designated “servicer” nor the designated “trustee” is allowed to do anything.
  • The proceeds from sale of the IOUs (certificates, aka mortgage backed certificates that are not mortgage backed) that is received by the Borrower (e.g., Lehman or JPM Chase) is sufficient to cover the money sent to the closing table of the closing agent.
    • The money is received from managers of stable managed funds based upon false ratings from accpeted ratings isntitutions who have been bribed to issue reports wihtout research or relyining solely upon reports from the issuer.
    • The Lender (e.g., Credit Suisse, owner of Select Portfolio Servicing and a family of companies acquired by SPS) is paid in full for the loans.
    • The balance is pure profit but it is “booked” as trading profits on an as needed basis to maintain the illusion of rising profits of the borrower thus elevating the price of the commons tock of the Borrwer (e.g. Lehman or JPM Chase). This is accomplished by repatriating incremental portions of the vast sums (around $3 trillion currently) that is parked off shore as management chooses.

Hence the Lender (e..g. Credit Suisse) has a credit to the cash account and a debit to loans receivable. In addition, they have an equity stake in the offshore and onshore transactions involving “derivatives” whose value is “derived” from reports of value by the borrower (e.g., Lehman or JPM Chase). But neither Borrower or Lender has any stake in owning the IOUs. 

HOLOGRAPHIC IMAGE OF AN EMPTY PAPER BAG: FTX Meltdown is the natural outgrowth of allowing trading in unregulated securities sold as “derivatives”

Alan Greenspan admitted (after the 2008 crash) that he and the rest of the Federal Reserve had made a huge mistake in failing to regulate the creation, sales, and trading of derivatives that were only tenuously linked to the lending marketplace. The securities had no value or known attributes, but Greenspan was operating under the Milton Friedman doctrine that free market actions would make any necessary corrections.

This was ideology at its worst.

He wasn’t wrong about how free markets operate. He was wrong in assuming that the market in these falsely labeled lending derivatives was free. He also assumed that such “derivatives” literally derived their value from some underlying asset that was legally owned by the issuer of these unregulated securities (unregulated because Bill Clinton signed the Republican bill into law without anyone realizing that they were letting the tigers out of the cage).

The derivative marketplace was not and is not free, and thus no free market forces were applied. It was strictly controlled, with no competition or other factors that could have effectuated a return to reality. The crypto meltdown at FTX also involved similar derivatives that were offered as having the value “because we say so.”

That works until it doesn’t.

In the mid-1990’s I knew many brokers who were getting rich selling and trading derivatives. They used the word “derivative” like it was a religious icon. That was because they were making 3-4 times their previous annual income with bonuses from the brokerage house where they worked.

There is nothing magical about a derivative. All securities (regulated and unregulated) are derivatives (or they are supposed to have a legally recognized derivative value to be legal). They derive their value from some asset that exists in real life. Perhaps a business or investment. The asset is owned by the security issuer, which then reduces its declared ownership by the amount of ownership purchased. It really is that simple.

But all derivatives sold in the crypto markets were based solely on gambling — the subject being future market conditions — i.e., demand for more crypto. This is like the meme stocks with no rhyme or reason during the pandemic. Stocks were run up in price because of demand derived from boredom.

“Derivatives” referenced in the lending marketplace suffered from the same fatal defect. They were pure crap — worse than junk bonds.

So when I mentioned to my friends on Wall Street nearly 30 years ago that they were selling crap, they responded that they were selling it because people were buying it. And that financed mansions and the expansion of mansions. They didn’t know what to do with all that money. They also didn’t fully appreciate the fact that the “certificates” they were selling were both underwritten and issued by the same entity — an investment bank bookrunner. There was no asset.

So to the investment bank, it was free money that they could spread around a little to other securities brokers and all the way down the line paying pizza delivery guys $1 million per year. But eventually, like FTX and the 2008 crash, there is a reckoning. The interesting and dismaying development with certificates that were falsely claimed to be “mortgage-backed” and falsely claimed to be “bonds” is that instead of disappearing, they are flourishing.

As soon as the Fed decided to “save the banks” by buying the wrongfully labeled MBS, the market appeared to be real instead of closed (which it was). Maybe the same thing will happen with crypto and even meme stocks. But I think that history shows that when all the mania dies down, people gravitate to fundamental values rather than the hype, the sizzle, and the holographic image of an empty paper bag.

Business Records Clarity

Just to be clear.

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The reports are produced by XYZ financial services (usually FiServ in conjunction with CoreLogic).

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The witness who is ostensibly employed by the company that has been designated as  “Servicer” knows nothing about the location, existence, ownership, or authority over any account maintained in the name of the company (ABC BANk — usually US Bank, DBNTC or BONY) designated as a creditor.

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The witness has never seen the loan account, nor has he or she ever spoken with anyone from the designated creditor.

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The report is simply a printout via access to a server operated and maintained by the financial technology company and is now categorized as a servicer by the CFPB which is the agency that is authorized to define that — but the courts have not caught up to that.

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The witness also cannot testify on personal knowledge that the company paying him to testify has ever received, processed or distributed any payment received from the subject homeowner. If asked he will admit that he has never seen anyone from his company process a payment.

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That report is NOT a record of business performed by the “servicer.” It is a record of business performed by the financial technology companies who are in control of the lockbox, depositing, and processing of all data entries of all payments received by or on behalf of any designated creditor.

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That designated creditor (e.g. “REMIC Trustee”)is not someone who owns or knows anything about the content of any unpaid loan account.

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That is why it is pointless to ask US Bank, BONY or DNTC anything about the loan account. They don’t know and they don’t care.

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Since the author of the report presented in court is not present in court in person or even vicariously (as when a witness testifies that he or she is familiar with the record-keeping of the employer) and since the witness is not employed by the company that performed the business operations represented on the report, the report is inadmissible, upon timely and proper objection, as hearsay.

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In addition, a further objection could be made as to the foundation and even relevance since the “report,” even if it is included in the records of the “Designated servicer” is not supported by testimony that establishes the chain starting with the financial technology company (because they don’t want to admit that the financial technology is involved).

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They don’t want to admit that FINTECH is involved because that would lead to further inquiries revealing that all of these companies, including originators, aggregators, assignees, assignors, Master Servicers, sub-servicers, foreclosure mills, and trustees are acting as the alter ego and instrumentality of the bookrunner investment bank. ALL OF THEM!

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

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

Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FREE REVIEW: Don’t wait, Act NOW!

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. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for Administrative Strategy ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

 

LPOA: Creating the Illusion of Something Out of Nothing

A common practice employed by the banks and leave foreclosure mills that represent the banks is to use an instrument purporting to transfer an asset as the foundation for the truth of the matter asserted: that is, that the asset exists. This practice has been heavily litigated over hundreds of years. The simple answer is that a document of transfer does not create any greater rights in the hands of the transferee (assignee or endorsed) than that which existed in the hands of the transferor (grantor).
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In the realm of foreclosure, this practice applies to several documents that are used by lawyers employed by the foreclosure mills who are employed by regional law firm who are employed by central law firms or in-house counsel for the banks. They issue assignments of mortgage that leverage human nature. The act of assignment of the mortgage lien implies that the lien exists and that the grantor owned it. This is rarely the case, but a legal presumption arises from the face of the document, particularly when it is introduced into evidence without objection from the homeowner.
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Another example is the usual undated stamped endorsement in blank that is attached to an alleged allonge. The party who placed that stamp on the document or the separate page attached to the document is never identified. The signature that appears may be the actual signature of a human. But that human had no part in the execution of a transfer or endorsement of the promissory note.
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In the other example, a power of attorney or limited power of attorney is used to create fictitious rights for a company that has been designated as a “servicer.” Most popular is the limited power of attorney but the same analysis applies regardless of whether it is a limited power of attorney or a power of attorney.  The following is a response I gave to a client with respect to his recent receipt of a limited power of attorney that, in my opinion, was fabricated for the occasion.
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The limited power of attorney identifies and corroborates several things we are saying. First of all, note that the document allows for actions that “can only be executed and delivered by such attorney-in-fact if such documents are required or permitted under the terms of the related servicing agreements.” This means that your demand for the servicing agreements is essential to corroborate their claim that they are authorized to act on behalf of US Bank.
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I note that the reference to an agreement regarding servicing is plural. Hence, you should be asking for all agreements that affect the limited power of attorney or the servicing of the alleged unpaid loan account. I make this point because I am aware of various different agreements that may not be labeled as servicing agreements but which are designed to limit the actions and liabilities arising from the actions of the company that is designated as a “servicer,” regardless of whether it is performing any servicing functions.
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Secondly, I direct your attention to paragraph (C) in the first paragraph, which states that “no power is granted hereunder to take any action that would be either adverse to the interests of or be in the individual name or capacity of US Bank.” This is an interesting statement. I think this statement provides the foundation necessary to demand that US Bank acknowledge and affirm the act or document executed or delivered. How else would any third party know if the action undertaken by SPS might have been adverse to the interests of US Bank? And if it was adverse how would the party know whether the document was valid or void?
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Third, this instrument does not comply with customs and practices in the industry. Such an instrument would contain a warranty that US Bank is the owner of the referenced loans, which means that it is the owner of an unpaid loan account (and the unpaid loan accounts include an unpaid loan account due from you). Instead, there is a vague reference to loans “held by the grantor.” And there is a further reference to the fact that “these loans are secured by collateral.” But there is no identification of who owns the collateral rights or even the rights to receive payments as asserted in the promissory note.
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Please note that the note is not the debt. The note is evidence of the debt, which is merged into the note if there was a transaction in which the maker of the note became indebted to the payee under the note. In many cases, this element is not present, although the illusion of a loan transaction between the maker and the payee is always present.
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Lastly, the instrument does not conform to the industry’s customs and practices or best practices. On page 3, there is plenty of room for signatures that appear on the following page. Instead, the end of the page contains the following direction: “SIGNATURE PAGE FOLLOWS.” this indicates the presence of a practice in which a template is used. It is perfectly legal if in fact, the parties who are shown on the “signature page” signed this particular document. Based upon my prior experience, this is not the case. Instead, as is frequently done with assignments of mortgage and alleged “allonge” instruments, the image of the signatures has been affixed on a separate page to avoid the obvious appearance of misalignment in the primary document.
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It would behoove you to locate the individuals whose names were used. I believe this is a Robo-signed, forged document that was fabricated to create the illusion that US Bank owned any right, title or interest to any payment, debt, unpaid loan account, note or mortgage.
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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting 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 COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

Enforcement of Discovery — Sanctions

The heart of foreclosure defense lies in arcane procedures that occur within the context of discovery during litigation in court. The premise is that neither the foreclosure attorney nor any identified claimant can or will answer questions about the core issues of any foreclosure case —- the existence, ownership and right to administer, collect or enforce then alleged debt.
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Efforts to hold lawyers responsible for filing cases without standing and without an identifiable claim or claimant have been notoriously unsuccessful but not completely unsuccessful. Some lawyers have been fiend as much as $100,000. But generally they are protected by a very broad application of the doctrine of litigation immunity. But getting the court to apply sanctions against the lawyer is not the goal. If the homeowner wants to defeat the foreclosure the sanctions must be applied against the purported client.
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These are my notes regarding sanctions that rise to “severe” levels, which is what you want if you want to successfully challenge the foreclosure. These notes are from some cases that directly address the issue.
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The available evidence of their willful and contumacious conduct is far more direct and damning than previously contemplated,”
 See id. “A deliberate and contumacious disregard of the court’s authority will justify application of this severest of sanctions, as will bad faith, willful disregard or gross indifference to an order of the court, or conduct which evinces deliberate callousness.” Mercer v. Raine, 443 So.2d 944, 946 (Fla. 1983).
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“It is well settled that determining sanctions for discovery violations is committed to the discretion of the trial court, and will not be disturbed upon appeal absent an abuse of the sound exercise of that discretion. See Mercer v. Raine, 443 So.2d 944, 946 (Fla.1983) … While sanctions are within a trial court’s discretion, it is also well established that dismissing an action for failure to comply with orders compelling discovery is ‘the most severe of all sanctions which should be employed only in extreme circumstances.’ Mercer, 443 So.2d at 946. In Mercer, this Court held that ‘[a] deliberate and contumacious disregard of the court’s authority will justify application of this severest of sanctions , as will bad faith, willful disregard or gross indifference to an order of the court, or conduct which evinces deliberate callousness.’ ” Ham, 891 So.2d at 495 (citing Mercer, 443 So.2d at 946).
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Before a court may dismiss a cause as a sanction , it must first consider the six factors delineated in Kozel v. Ostendorf, 629 So.2d 817 (Fla.1993), and set forth explicit findings of fact in the order that imposes the sanction of dismissal. Buroz–Henriquez v. De Buroz, 19 So.3d 1140, 1141 (Fla. 3d DCA 2009) (citing Alvarado v. Snow White & The Seven Dwarfs, Inc., 8 So.3d 388 (Fla. 3d DCA 2009)). The Florida Supreme Court explained that “[t]he dismissal of an action based on the violation of a discovery order will constitute an abuse of discretion where the trial court fails to make express written findings of fact supporting the conclusion that the failure to obey the court order demonstrated willful or deliberate disregard.” Ham, 891 So.2d at 495. These express findings are required to guarantee that the lower court “consciously determined that the failure was more than a mistake, neglect, or inadvertence, and to assist the reviewing court to the extent the record is susceptible to more than one interpretation.” Id. at 496. There are no required “magic words,” but
the court must find “ ‘that the conduct upon which the order is based was equivalent to willfulness or deliberate disregard.’ ” Id. (quoting Commonwealth Fed. Sav. & Loan Ass’n v. Tubero, 569 So.2d 1271 (Fla.1990)).
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Where counsel is “involved in the conduct to be sanctioned, a Kozel analysis is required before dismissal is used as a sanction .” Pixton v. Williams Scotsman, Inc., 924 So.2d 37, 40 (Fla. 5th DCA 2006). Pursuant to Kozel, the trial court must consider the following:
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“1) whether the attorney’s disobedience was willful , deliberate, or contumacious , rather than an act of neglect or inexperience; 2) whether the attorney has been previously sanctioned; 3) whether the client was personally involved in the act of disobedience; 4) whether the delay prejudiced the opposing party through undue expense, loss of evidence , or in some other fashion; 5) whether the attorney offered reasonable justification for noncompliance; and 6) whether the delay created significant problems of judicial administration.” Ham, 891 So.2d at 496 (quoting Kozel, 629 So.2d at 818). After considering these factors, if there is a less-severe sanction available than dismissal with prejudice, the court should use it. Id. (citing Kozel, 629 So.2d at 818).
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If the malfeasance can be addressed adequately through the use of a contempt citation or a lesser degree of punishment on counsel, the action should not be dismissed. Ham, 891 So.2d at 498. Further, if there is no prejudice to the other party, dismissal is too extreme a sanction . Id. at 499. The lower court must “strike the appropriate balance between the severity of the infraction and the impact of the sanction when exercising their discretion to discipline parties to the action.” Id. Ultimately, the lower court’s “failure to consider the Kozel factors in determining whether dismissal was appropriate is, by itself, a basis for remand for application of the correct standard.” Id. at 500.
Bennett v. Tenet St. Mary’s, Inc., 67 So. 3d 422, 426-27 (Fla. Dist. Ct. App. 2011)

Michael Hill, Associated Press is on to something HUGE! Zombie foreclosures

see https://abcnews.go.com/US/wireStory/zombie-debt-homeowners-face-foreclosure-mortgages-93383054

The simple story is that three reporters from AP stumbled across a strange story. They discovered that people were being served with foreclosure papers. That was not unusual. What WAS unusual was that the “foreclosures” were based on “loans” that had expired 10 years earlier. And when they made inquiries to the actors who supposedly were named as the “creditors”, they were told that Wilmington had no knowledge or power to direct anything.

In short, these reporters have reported on a story that was just being developed by Gretchen Morgenson and Matt Taibbi before they were shut down. And all that was 14 years ago.

The reporters have uncovered a numbers game in which “collectors” play the odds under the theory that people will pay without challenging the claim. Debt collectors do this when they buy lists of consumers and start bothering them about their unpaid debt — regardless of whether or not the debt exists.

Why I always knew that “servicers” were not acting like “servicers” and “creditors” were not acting like “creditors”

Preface: When I received my extended MBA degree with the highest honors, I also taught and tutored other students in accounting and auditing.

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I recently received a response sent by SPS as the “servicer.” note again that SPS is owned by Credit Suisse, a commercial and investment bank located offshore. The homeowner was understandably confused. There was a reference to an “account history” but no reference to an “account” or “loan account.”

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Note that the SPS response specifically refers to an “account history” from Chase as a former servicer but offers no clue as to the whereabouts, ownership or any copies of the account itself. And to educate you a little on the difference, consider this:

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The account history is the publication of a report generated by or for a servicer. it is not the entire loan account that would show debits and credits for each and every transaction affecting the account balance. Each such debt and credit is a data entry.
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Behind each data entry, there must be a reason for making it. In normal business, the reason is a receipt for some transaction that generated both a debit and a credit. I have written about this. So for example, if a payment was received in cash there would be a credit to the cash account and a debit to the loan receivable account in exactly the same amount.
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This double-entry bookkeeping system is the exact reason why we use the reference to “balanced books.” Under this system, it is always true that if all transactions are recorded, assets=liabilities+stockholder equity. When you look at “Balance Sheets,” you see “assets on the left side and “liabilities + stockholders equity on the right side.
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There are always two entries for each transaction. It occurs in two different accounts on the same side of the ledger or two different entries divided between the left and right side — each in exactly the same amount. In court proceedings, discovery demands should be directed at these entries and the receipts or other foundation documents that justified the recording of an entry in “assets,” or “liabilities,” or “equity.”
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Let’s take another example and it was the first reason why I knew that the “servicers” were not receiving payments as everyone thinks is happening. If a servicer receives a payment instead of the creditor, it will have a credit to cash and a credit to liabilities under an account that says or means “payments due to creditors.”
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In turn, when the payment is made to creditors, the “payment due” account (accounts payable) receives a debit for the amount of the payment, and the cash account receives a debit for the amount of the payment that went out to a creditor.
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When you ask for a copy of the ledger showing debits AND credits from either the designated creditor or the designated “servicer,” you won’t get them because they don’t exist. The payments did not go to the servicer or the creditor, even if a third party made the collection using the name of the servicer. 
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The reason is that there is no creditor because there can be no creditor if there is no loan account receivable carried as an asset on the ledgers of the designated creditor. The payment history or account history is merely a report on a report generated by third and fourth parties about your behavior. That is not admissible evidence unless it is offered into evidence and the homeowner fails to object.
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The payment history is an allegation about your behavior, not the designated creditor’s behavior. The behavior of the “creditor” is crucial: if there is no creditor who suffered a default, there is no right to announce a default and no right to attempt enforcement of a virtual debt.
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If there was no creditor proclaiming they suffered a loss, no legal action by the designated creditor is legally permitted. If it were otherwise, anyone with knowledge about your debts could sue you in derogating the rights of a real creditor. Anyone could sue you even if you paid the real debt in full.
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Under modern law, so far, there is no allowance for enforcing a virtual debt. There can only be enforcement of real debt. And a real debt does not exist because a third party declares it to exist, as happens when a lawyer for a foreclosure mill sends a notice or the “servicer” sends a notice. A debt ONLY exists if the unpaid loan account receivable exists because of a debit to cash or credit to liabilities (accounts payable).
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PRACTICE HINT:
It has always been a puzzle to me why CPAs have not entered the foreclosure defense field as the prime expert witness. Ask any CPA what they need to verify the existence of an asset or liability, and they will tell you.
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After you ask for such things and don’t get it, any CPA would be more than happy to accept your money to write an expert report saying it is impossible to confirm the existence of the loan account without such information. This is the point of discovery — to corroborate or rebut allegations of fact, presumptions of facts, and implied facts.
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That would be a great foundation to ask for evidentiary sanctions in addition to monetary sanctions, to wit: an order barring the lawyer for the foreclosure mill from introducing any evidence at any hearing or trial asserting the existence of the unpaid loan account or any loss implied.

Don’t ask for the true identity of the “holder of the note.” Ask instead for the identity of the holder in due course or the creditor.

The point is not the identity of the “holder” of the note. The point is the identity of the party who owns and maintains an unpaid loan account receivable that is due from you to that party. The problem with asking for the identity of the holder of the note is that there is a legal presumption that arises from the mere allegation of delivery of possession of the promissory note.

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The presumption is that
(1) it was delivered by somebody who was authorized to make the delivery,
(2) that the delivery came from someone who owned the note or had authority from the owner,
(3) that it was accompanied by a grant of authority to enforce the promissory note and
(4) that the new possessor accepted the delivery as the new holder in due course or new “holder.” Current American jurisprudence has magnified these presumptions as though they were on steroids.
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The last point is especially troublesome in the world of false claims of “securitization of debt.” It is one of those things that is so obvious you forget to ask. When (for example) U.S. Bank, as trustee, is named as the new possessor of the note or assignee of the mortgage lien, nobody thinks to ask whether U.S. Bank has actually executed any document or performed any action that indicated that it accepted the endorsement or assignment or delivery.
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POSSESSION IS ALWAYS “CONSTRUCTIVE”
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In fact, when you get into the discovery phase of litigation, the assignee or endorsee or apparent bearer will NOT affirm its receipt or ownership or even interest in the loan account, note or mortgage and will NOT affirm or corroborate that they ever physically received any note or any original papers from the transction conducted with a homeowner.
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They will also deflect inquiries abot whether they have any records regarding the loan account.
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They will direct all inquiries to the “servicer” without saying that they own the loan account and without saying they appointed the servicer. 
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IMAGINE: Someone sues you for injuring them and you ask them to show you their injuries. Their answer is “No, and that information is private and proprietary and subject to trade secret restrictions. But my friend here will tell you all about it.” THAT is what is going on in foreclosures and the banks have been selling that BS for 25 years. 
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As such, third-party (i.e., lawyers representing foreclosure mills whose client is a regional foreclosure mill) actions taken on the strength of the fabricated assignment, delivery or endorsement are subject to later disclaimer by U.S Bank who will assert that any illegal action was performed without its consent or knowledge.
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Or, they will challenge the ability of any suing party to proffer sufficient evidence to establish that US Bank knew anything about the deal, the transfer, or any of the legal actions taken by the “servicer”, or “trustee” on deed of trust or lawyer. It is all a game.

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But it’s possible that you could correct your statement in two ways. First, you could ask whether the designated creditor is a holder and due course, and if not, ask which legal elements of a legal holder in due course are absent. And/or you can ask for the identity fo the creditor who owns and maintains an unpaid loan account receivable due from you.

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PRACTICE NOTE: If you ask for the “holder,” there are about 10,000 arguments under which the responder could justify giving you a name and even contact information of a party who has never heard of the homeowner, the law firm, or the “servicer.” You also are admitting that the status of “holder” is important in foreclosure litigation. It isn’t. Foreclosure is about the lien, and the lien is about the mortgage or deed of trust. Those are different instruments and are subject to different legal elements and analyses.

The “Debt” rabbit hole

Take care to distinguish what contract you’re talking about.  If you receive money, the law says you must give it back unless it was payment for something or it was a gift. In that sense, the law imposes a contract on people even if they are not thinking about or writing a contract.

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In fact, even if there is no agreement on giving it back, the other person can and will force you to do so. That is what is called “debt.” It is something that is created by law — i.e., by legislative action signed into law by the governor of the state. It is NOT the note, it is NOT the mortgage, nor the “payment history.”

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There are three types of contracts from a procedural point of view:
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First is the contract imposed by law, even if the parties don’t want to consider their interchange a contract.
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Second, an oral contract may or may not be enforceable, depending upon the jurisdiction’s laws. Certain contracts are considered unenforceable if they are not in writing. That does not completely erase liability under the equitable or legal doctrine, but it does prevent anyone from “suing on contract.”
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Third, there are contracts in writing that may or may not be enforceable, depending upon the laws of the jurisdiction in which the contract was executed. So if the contract violated public policy or a statute, it is probably not enforceable. NOTE: Being unenforceable does not zero out liability. Under doctrines like unjust enrichment, the other party can still collect. But they cannot enforce the terms of the written or oral agreement.

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The debt is created, therefore, by the receipt of the money — not the execution of any contract intentionally or unintentionally. This is important because the “thing” in a contract is the subject of the contract. The debt is either created or not by action, not by words.
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My point here is that the banks want us to talk about debt because they say it is a debt, not because it IS a debt. And they are leveraging our ignorance into direct and implied consent for their securities transaction even though they never told us about it.
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Their intent was not to make a loan. Nobody in the entire securitization infrastructure wants to own any unpaid loan account receivable because that would make them either a lender or a successor lender. AND THAT would expose them to all types of liability for violations of federal and state lending and servicing laws. They intended to control the transaction, not own it.
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The first step in making a claim is that there must be a foundation for the claim. The bank lawyers focus strictly on the paper documents and argue that the debt was created by executing documents. However, there was no intent (on their part) to become lenders or successor lenders — and no intent to create or maintain an unpaid loan account on the books and records of any company.
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They successfully substituted a  “payment history” under the name of a third party who had no role in the production of that history. By accepting the payment history as evidence of the loan account, homeowners and their lawyers encouraged the judges to accept it too. In doing so, everyone arrived at the same conclusion: that there was a default despite the absence of any unpaid loan account on which someone (anyone) had suffered a “default.”
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Foreclosure is strictly about the satisfaction and release of an unpaid debt. It is not about allowing anyone who knows something about you to force you to make payments or else lose your home. There is no default without injury. And there is no injury without an unpaid loan account that has been reduced in value because of a gap in scheduled payments. And there is no evidence of such injury until you see the unpaid loan account — not the payment history. 
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If you stop making payments you don’t owe, that is not a default. If you stop making payments to someone who does not own the alleged or implied debt, that is not a default unless the creditor has contacted you and told you that they own the debt and designated in writing that you should pay a third party.
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Anyone announcing a default is at least implying that there is such an unpaid loan account. You are entitled to get corroboration of that implied assertion. You won’t get it because there is no such account in most cases.
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In the case of a foreclosure, there must be an unpaid debt owned by the claimant — i.e., someone who has paid value for it. No jurisdictions in the U.S. allow for the transfer of the title to a mortgage lien without a concurrent conveyance of the underlying debt. That means an actual transfer of the debt. And for that to happen, the debt must exist. Without that, the instrument of transfer (i.e., assignment) is considered in all U.S. jurisdictions as a “legal nullity.”
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A legal nullity is something that the laws refuse to acknowledge even though it is written or something happened.
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The above leads to my fundamental premise that nearly everyone is ignoring.
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Suppose there was no intent to become a lender and no intent to create and maintain an unpaid loan account as an asset on the books and records of some creditor. What was the nature of the payment that arrived at the closing table when the transaction originated?
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It can’t be called a “loan” just because one side thought it was a loan (homeowner). The most basic concept of contract law is the requirement of the meeting of the minds.
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The other side wanted to keep the ability to enforce “as if” the transaction was a loan, but they wanted no part of owning it or being subject to lending or servicing laws.
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Further, it is apparent that their business plan was not based on generating revenue or profit from the interest paid. It was based almost entirely on selling securities whose only value depended upon market forces and discretionary promises from the underwriters (who were also issuers). Secondarily it was based upon their continued success in the enforcement of “virtual loan accounts” through collection and foreclosure (distributing the proceeds as revenue and profit instead of a credit against any loan account).
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I, therefore, arrive at the only possible conclusion: the payment received at the closing table (assuming there was a payment received by the closing agent) was an incentive payment to the homeowner to execute loan papers even though there was no loan.
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This made the homeowner an unwitting issuer in a securities scheme for which they received a payment that was required by the “loan papers” to pay back and, adding insult to injury, requiring not only a return of the fee they received but also a surcharge that was called “interest.” the compensation.
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My analysis leads me to conclude that homeowners are continually being cheated out of legally required financial participation in a securities sales scheme that could not exist without their cooperation. Further, they are not given due consideration for their actions in support of the scheme simply because the investment banks don’t want homeowners to share in the incentives, revenues, and profits.
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Iceland recognized this at the time of the 2007-8 collapse. They addressed it and ended their recession in 3 months. They sent the key players to prison and reduced household debt across the board by 25%. This created stimulus to their economy without spending one dime and forced the banks to accept at least part of the losses created by pumping up prices far beyond the value of the properties affected. We spent trillions of dollars in stimulus to offset the hole in our economy created by this fraudulent scheme. Our recession lasted for 10 years. 

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The bottom line is don’t fall into their rabbit hole of “virtual debt.” The debt is not a piece of paper. The debt, if it exists, can only exist if the party who gave you the money intended to start a loan relationship — not because that was what you were seeking.
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And if someone seeks to enforce the “debt” against you, make sure it actually exists on the books of the designated creditor or claimant as an asset on their books — not just as a record of payment on the report issued under the name of some third party who played no part in producing that report.
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How to Defeat Claims of “Business Record Exception” to the Hearsay Rule.

It is the absence of evidence that becomes evidence of absence.

Suppose you ask any litigator who has experience in defending foreclosure claims. In that case, they will tell you that there is absolutely no doubt that all current claims asserting the right to administer, collect and enforce the implied loan account due from the homeowner are entirely based upon documents introduced to the court as business records.

And because this seems to be some confusion on the point, let me say the obvious: business records are a record of business  undertaken by the business whose records are being introduced.

If someone introduces a payment history as a business record, the matter being asserted is that the company whose name appears as the author of the record has created a history of payments that it received.

There can be no other “interpretation.” If they did not receive payments, their payment history is simply a report based on either fictitious data or accurate data from parties who did receive payments and, therefore could produce a record of receipt.

This all seems very obvious to me and to any trial lawyer that you might speak with who has experience in the courtroom. And yet I still get the question from both homeowners and lawyers regarding the strategies and tactics of overcoming statutes and case law allowing the introduction of business records.

My first response is that you need to understand that by blocking the introduction of those reports masquerading as business records, you completely block the ability of the attorney for the foreclosure mill to prove his or her case. The inability or unwillingness of lawyers (and frequently homeowners) to accept this simple proposition accounts for nearly all of the losses in court.

And in my continuing effort to simplify things, let me define the hearsay rule. First of all, it exists to prevent lying in court. All evidence that is allowed to be admitted into the court record must have some probative value by corroborating the truth of the matter that is asserted.

In foreclosures, the matter asserted is that an existing unpaid loan account is due from the homeowner, who has failed to make scheduled payments to the creditor who owns that account. Once again, it is the inability or unwillingness of lawyers (and frequently homeowners) to accept this proposition and starting point that accounts for all the negative decisions reached in trial courts and appellate courts.

The hearsay rule is a rule against hearsay. It means that a statement will not be allowed in evidence even if it tends to corroborate the matter that is asserted by the claimant. The circumstances under which this happens is very simple: the person who authored the statement by voice or in writing must be present in court to be cross-examined.

The exception to this rule is the “business records” exception. In an effort to move things along, the statutes and rules governing the introduction of evidence allow for certain types of hearsay if they are cloaked in credibility, such that no reasonable person would contest the source or the data reported in the statement. The specific exception discussed in this article is created for records of business done by an organization that has no stake in the outcome of the litigation and is otherwise a credible source.

So the first thing to be discussed is whether or not the organization actually performed any functions about which it could create records. As I have explained in other articles, it appears to be 100% true that any name associated with the function of “servicing,” does not perform any of the attributes or functions of a “servicer.” Those functions are performed by third-party financial technology companies whose relationship with the “servicer” is neither disclosed nor alleged, much less proven.

The second point rarely discussed anywhere is the source’s credibility and the requirement that the source may not have a stake in the outcome of litigation. As it turns out, neither the virtual “servicer” nor the actual financial technology servicers can fulfill that requirement. So that question in court becomes an issue of whether the proponent of the report must establish that the apparent source of the report has no stake in the outcome of the litigation. This might be very difficult for select portfolio servicing, for example, which is owned by Credit Suisse, which works in tandem with JPM Chase.

The counterpoimt to this line of thinking vilates due process. If one were to put the burden on the homeowner to prove that the organization had no stake in the outcome without first requriing an assertion or allegation tot hat effect, then the rules would be  vilated. No person subject to a claim should be requried to defend it without someone making the allegation or assertion.

Once that is in issue, discovery must be allowed seeking corrorboration. That will be very uncomfortable for botht he lawyer for the foreclosrue mill and the company named as servicer, since they are not performing any servicing functions — contrary to the representations and arguments made in court.

The business records exception is merely intended to be a shortcut to what would happen anyway if the proponent of the record was required to prove the contents using direct testimony, receipts etc. The failure to qualify as an exception to the hearsay exclusion of testimony or documents should only be a slight bump in the road.  But it turns out this is not just a slight bump in the road for the lawyers representing the foreclosure mills. Without the court accepting copies of written reports, the lawyer for the foreclosure mill has no evidence to prove the truth of the matter asserted: that the homeowner has breached a duty to the designated or named creditor.

And that inevitably leads to rebutting the preliminary assumption that there was a “default” suffered by the designated named claimant. This one is difficult to understand. If you trust it, you will likely win your case, even if you don’t understand why.

So how do you challenge the business record?

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First of all, you don’t challenge it by making a contrary allegation.

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Second, you don’t challenge it until they refuse to corroborate the truth of the matter being asserted. So if somebody introduces a document they say is a business record, the opposition has every right to ask whether the record was produced during the course of doing business with the homeowner and with creditors and to demand documents that corroborate that.
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If those documents are not forthcoming, the homeowner must seek an order from the court commanding the pleader to produce the documents. And then, once it is established that there is continued noncompliance, you seek a negative inference as an evidentiary sanction for failure to comply with the rules of discovery and failure to comply with the court’s order.
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A direct challenge to the record as a business record will always meet with failure because of the presumptions arising from the apparent facial validity of the document. In addition, the foundation testimony accepted today is much more generous and liberal than what we might consider right and proper. But those of the rules. The only way you can shift that burden is by showing that the attorney for the opposition has either failed or refused to comply. It is the absence of evidence that becomes evidence of absence.

 

It is easy to blame judges for corruption, but it is more accurate to blame them for ignorance and arrogance.

Homeowners (and my readers, in particular) are completely correct in asserting at least the appearance of corruption by judges. Virtually all of them have their retirement invested partially or even mostly in funds that rely heavily on purchasing “Mortgage-Backed Securities.” Hence, if judges were to rule against the lawyers asserting representation of banks like “U.S. Bank as trustee…” (Blah blah), they would be ruling against the interest of their retirement.
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Let’s remember the meaning of corruption. It means that people in public office are violating their charter or oath primarily to benefit themselves. If someone in public office takes some action that produces a benefit that includes them, it is not corruption unless that was the main reason or the only reason they did it.
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So if you are going to accuse a public official (like a judge) of corruption, you must base that accusation on known facts that you can prove, establishing that the only reason the judge did what he/she did was to preserve their retirement account. If you can’t do that, you must find another way to hate the judge.
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But the fact that the judge is literally invested in the outcome of litigation is a correct statement of the facts. That alone should be sufficient to force the judge’s recusal and substitution of a judge with no such conflict. My reason for this opinion is that lawyers and judges must avoid even the appearance of impropriety under the ethical rules governing professional conduct.
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And yet I use the strongest possible language to dissuade homeowners from using that as a foundation for a challenge to a judge, who seems unfriendly. My primary reason is that it never works and annoys the judge.
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And some people point to my inconsistent statements as evidence of a defect in my mental condition. But there is a method to my madness. And being 75 going on 76 does have the advantage of seeing and experiencing many improbable events.
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The first point is that it is highly unlikely to find a single judge anywhere who does not have a retirement package. It is also extremely unlikely that the retirement package would be devoid of investment in falsely labeled “mortgage-backed securities.”
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The certificates are not securities according to changes in the securities law long sought by Wall Street and successfully implemented in 1998. When President Clinton signed that into law, he was letting tigers out of their cages. The fact that they ate everyone should have come as no surprise.
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Also, just as a reminder, the certificates are never backed by any debt, note, or mortgage issued by any homeowner. Arguments in court to the contrary are lies protected b y the doctrine of litigation immunity that applies to both lawyers and their clients.
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So the problem is that if a judge recused himself or herself from the proceeding based upon the appearance of impropriety, there would be nobody to replace the judge. The simple political fact of life is that this is unacceptable in our society. And while you can argue the philosophical pros and cons, it will never happen.
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Then there is the other problem that has no answer at all. Exactly how much does the judge know about his/her investments? I have friends on the bench, and I can report that out of about a dozen, only one is well-versed in investments, particularly their own investments. The rest depend entirely on the manager of retirement funds. They have no idea whether their decisions are favorable or unfavorable to their own financial situation because they don’t know how their money has been invested.
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I have suggested that experienced lawyers who are fairly well-known to the judge could ask if they could conduct voir dire on the judge, himself or herself.
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This would include questions about their ability to render a fair verdict even though their retirement funds may be affected. While this is unlikely to produce a recusal, it is highly likely to focus the judge’s attention on the specific requirements of evidence and procedure that are often ignored by judges in foreclosure cases. It is, in my opinion, a possible first step in educating a judge and persuading them to rule in favor of the homeowner.
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I have several reasons for believing that judges can be convinced to rule in favor of the homeowner. The first and most major reason is that I have done it dozens of times. The second reason is that I have seen other lawyers do it hundreds of times. The third reason is that I have received reports of pro se homeowners doing it thousands of times.
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There is some truth to the matter asserted by homeowners who are given to conspiratorial thinking. Most judges are afraid of pulling the plug on the entire financial system. But I think both homeowners and lawyers give too much credit and weight to judges’ intelligence, knowledge, and experience. It is simply not true that judges know anything about the securitization of debt — in theory, in documents, or in practice. In fact, they don’t know there is a difference. The problem is that they think they know.
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So there you have it. Judges’ dismissive rulings are because they have convinced themselves they know what they are talking about. They don’t. Ego gets in the way of recognizing their ignorance even though they have no problem dealing with it if the subject matter is medicine or technology. This has happened before, and it will no doubt happen again. Judges are just as susceptible to memes or fads as anyone else.
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So I have suggested to lawyers, especially experienced trial lawyers, that if they want to win, they need to probe the judge and watch the judge’s reactions during the proceedings. They are looking for “tells” that show or reveal the things that the judge thinks are most obvious about the case, so the lawyer can reveal that the opposition cannot corroborate that “obvious fact.”
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Then when the judge rules for the homeowner, it isn’t about whether the debt is real or unreal. It is about the lawyer for the foreclosure mill having messed up, and the judge is issuing a punishment for having messed up the case. This is the primary reason I have won so many cases. It wasn’t that the judge was finally convinced that foreclosure was fraudulent.
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Judges like to do that because if they don’t enforce court rules, their courtroom becomes a circus. And a circus produces absurd rulings that get reversed. And reversed rulings lead to dead ends for ambitious judges — they will never be promoted to an appellate bench if they are constantly reversed.
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Illegal legal Doctrine: The Homeowner Should Always Lose.” —How the courts paved the way to allow illegal foreclosures to be tried, retried and tried again

… the courts have been following an illegal doctrine for about 25 years. It is called “The Homeowner Should Always Lose.” This is closely related to the corollary doctrine of “False  Foreclosure Claims Should be Allowed to Prevent Economic Disaster.”

Besides foreclosure litigation, several rules and laws limit how long a claimant in civil litigation can drag out their claim.

First, there are statutes of limitations on making a claim. The usual limit is 5 or 6 years. And the way that works is that the courts measure the time from the moment of a breach of duty or promise.

The court then adds the statute of limitation, and presto, it has an end date after which the claimant may not sue to enforce a perfectly valid claim. The purpose of this statute is to prevent the drain on judicial resources and to give finality to a dispute that has been festering for too long. It also stops the unscrupulous from suing late int eh game to gain a strategic advantage over someone.

Next, you have the closely related rule of civil procedure (also a statute) that gives the climate who has sued for something a period in which they must pursue their claim in court. Failure to do so will result in dismissal, albeit without prejudice (the first time) and then with prejudice the second time.

The court looks at the last thing done by the climate and then adds the period during which they should have prosecuted the claim. If they didn’t, the claim is dismissed. Usually, it is one year. This rule is because it costs money to keep a case alive, even if the parties are doing nothing with it.

Lastly, there are statutes of repose, which few people talk about because they mostly do not apply. These statutes say that regardless of the circumstances, the dispute is over as of a certain date computed from the date the dispute started. The courts do not care who was right or wrong; it is over. The main purpose of such statutes is that it is nearly impossible to litigate a case 20 years, for example, after the events occurred and the people witnessed things. Documents disappear, and people forget.

Until the securitization era (i.e., the era in which false claims of securitization of debt were accepted as true), the above rules applied to foreclosures. And now, in the State of New York, a state senator named James Sanders is proposing that those rules be reinstated despite court rulings that had “relaxed” the rules. Letter writing to Kathy Hulchum, governor of New York and in support of Senator Sanders would be appropriate.

In the first place, the courts had no right to invite or accept arguments that changed the clear and unambiguous laws governing limitations and failure to prosecute. I recently assisted a homeowner who was fighting a foreclosure that was clearly barred by the statute of limitations in Hawaii.

Relying on some antiquated dicta in a decision rendered 100 years ago, the trial court and the appellate courts agreed that the statute of limitations was not 6 years; it was 20 years under the laws governing adverse possession — a law that has no relation to loans, notes, mortgages or foreclosure.

The reason for this anomaly (illegality) is that the courts have been following an illegal doctrine for about 25 years. It is called “The Homeowner Should Always Lose.” This is closely related to the corollary doctrine of “False  Foreclosure Claims Should be Allowed to Prevent Economic Disaster.”

In Florida, this doctrine gave rise to the Bartram rule, which asserted that if the foreclosure was dismissed for lack of standing (i.e., under the law, the claimant had no right to claim anything), then the act of acceleration of the entire “debt” was automatically reversed and the loan was reset. In other words, the right to sue was no longer barred if the new suit was outside the period of the statute of limitations (5 years).

Only the payments that fell inside of the payments due during the limitations period were barred — but the designated claimant could bring suit repeatedly until the action was barred as to the mortgage rather than the debt. At that point, it would be over —- in perhaps 30  years.

Sound complicated? It was not complicated until the courts decided to follow the doctrines of heads the banks win and tails the homeowners lose.

Practice Note: One of the strategies that could get traction is in making a claim for a breach of a statute that is now barred by the statute of limitations and stating that it was concealed breach such that the homeowner had no access to any information that would have given him notice that a claim exists.

I have long understood the game that eh securities brokerage firms were playing on this. They would flagrantly violate the Truth in Lending Act and similar state laws, and flagrantly violate RESPA and the FDCPA, and FTC act and little FTC acts, knowing that the homeowner would have no clue that the violation existed until long after the short statute of limitations (1-2 years) expired. This leads to the defense of “Yes we lied, but it is too late for the homeowner to do anything.”

Under the doctrine cited above and named by me, the homeowner will lose. But the basis will be the doctrine of finality and other things supporting statutes of limitations. That is when claims brought for breach of alleged “mortgage debt” should be argued as barred since the court ahs already set the standard by which the statute of limitations would be applied.

Florida perfected this into an art form by passing a statute that said even if your property was unlawfully taken from you by false premises and false pretenses, if you didn’t claim within one year, you had no right to retrieve the title or the right to possession. You had to settle for damages. The unobvious import was that a new statute of limitations was being imposed on homeowners who were victims of fraud.

Tolling of the statute applies when the claims could not have been discovered until after the breach. This is always true for homeowners and never true for the law firms purporting to represent claimants (Plaintiffs, beneficiaries) that supposedly suffered a default (i.e., through ownership of an unpaid loan account owned by that claimant.

But once again, the tolling of the SOL is blocked, barred or ignored by the court under the doctrine that we need to make the homeowner lose — or something terrible will happen. And of course, the similar argument that any other result will be a windfall to the homeowner.

These fake doctrines of the courts are citing facts that are not alleged, argued, asserted or proffered as evidence in any court. These rogue court doctrines have diminished trust in our judicial institutions to such a degree that the most basic standards and customs are now out of bounds.

We need more people like Senator Sanders in New York.

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Just because you see a picture of a duck doesn’t mean it can poop on your patio

Someone once asked me if “securitization” was actually a hologram. My answer was that it is a hologram of an empty paper bag. He ran with that and made millions defending homeowners. All he did was demand corroboration of the facts that the lawyer for the foreclosure mill wanted the court to presume from the apparent facial validity of the documents.

The apparent facial validity is the picture. It isn’t true, but it looks good — like a nice picture of a duck taken with a high-end camera.

So let’s take an example, which I lifted from a recent upload from Scott Staffne. As usual, it is an appeal that challenges the notion that someone who does not own the underlying obligation would be allowed to ask for property to be forcibly sold and the occupants dispossessed.

The answer, of course, as any law professor will tell you is that there are specific provisions in the law to prevent that from happening. But the courts are doing it anyway, and the appellate courts keep dodging the issue as though something terrible would happen if they allowed the premise of the modern foreclosure to be challenged, as is required to be allowed under the U.S. Constitution.

So, as an example, let us look at the picture of the “trustee.” Keep in mind that a trustee is someone whom somebody trusts. That should seem self-evident but in the world of foreclosures, it is not evident nor even true.

In order to accept the following picture, one would need to accept — contrary to ALL applicable law — that the creation of a trust may be accomplished without entrusting the named trustee with anything and that the legal position of “trustee” need not require any active interest or management of anything.

One would also need to allow for the fact that the trustee could be substituted by someone other than the trustor (the one who created the trust) or even sold contrary to the provisions of any alleged instrument that supposedly created the “trust” as opposed to the operation of one of the provisions in the trust agreement (without which there is no trust).

In fact, as I have previously reported on these pages, you would need to accept that the position of “trustee” can be bought and sold like any other commodity, with or without the permission of the trustor or any beneficiary — and in fact without notice to any of them.

For example, the entire shift from Bank of America to U.S. Bank was done exactly like that despite the explicit provisions of a buried trust agreement that designated LaSalle Bank as trustee or any successor by merger with LaSalle Bank. The shift to BOA was thus valid. The shift to US Bank was not.

And since there was a total absence of any trustor or beneficiaries, there was nobody to complain. And since the courts have cleverly invoked a bar to standing, homeowners could not complain that the new Trustee was a trustee or that any trust existed.

The fact that money from forced sales is never paid to such a picture of trustees is irrelevant, we’re told, because the homeowner owed the money. That of course is a conclusion that is NOT based on any alleged facts asserted or proffered into evidence.

So lets look at this one:

U.S. Bank National Association, as successor in in-terest to Wilmington Trust Company, as trustee, successor in interest to Bank of America, National Association, as Trustee for Structured Asset TrustMortgage Pass-Through Certificates Series 2005-1.

Here are my  observations that you can “take to the bank.”

  1. There are no certificates that bear the name “Structured Asset TrustMortgage Pass-Through Certificates Series 2005-1.” That name does not exist. Yet it appears in virtually all pleadings and orders in many cases. It is complete fiction. The actual name is “Structured Asset Securities Corporation Trust Mortgage Pass-Through Certificates Series 2005-1.”
    1. Structured Asset Securities Corporation is also known as SASCO. It is a thinly capitalized intermediary that acts solely for purpose of creating the pixels on the picture known as “Securitization.”
  2. “Successor” means a new company has taken over an old company by acquisition or merger. It does not mean the same thing as “assignor” or “assignee.” That is why we have different words for such things.
  3. Wilmington was never entrusted with anything, nor was Bank of America or US Bank. It’s not a duck. It is a fuzzy picture of a duck. As such, by definition, they were not trustees even though they were described as trustees.
  4. Since nothing was entrusted to any trustee, there was no active legally existing trust, even though it was named in some documents. Some lawyers get confused by the existence of an endorsement or assignment naming one of these entities.
    1. But if you ask the assignee whether they accepted such an assignment or endorsement or if they have any claim to collect money on behalf of themselves or any trust beneficiaries, their answer is always the same. “Go screw yourself. Go talk to the servicer.” That is a peculiar answer from someone who is alleged to be pursuing payment on an unpaid account they own.
  5. Lehman was the “Seller” even though it sold nothing other than certificates. Lehman did not sell interests in any debt, loan, note or mortgage. And the certificates do not say that any such sale occurred —even though most uninformed people assume they MUST say that.
  6. Lehman went bankrupt, as did Aurora Loan Services. Neither of them listed any ownership of any debt, note or mortgage. (See Where’s Waldo? in my articles earlier this week).
    1. So at the conclusion of the securitization cycle, there is no owner of any debt, note, or mortgage, but plenty of people want to enforce it anyway.
    2. Homeowners who are willing to test this out typically win cases against those making claims to administer, collect or enforce.
    3. Homeowners who are not willing to test this out because they think it is ridiculous or even immoral typically lose everything — their down payment, their improvements and landscaping to the property, most of the furnishings selected for the property, and their lifestyle, marriage, and perhaps even their lives as a result of stress producing medical illnesses or mental illnesses.
    4. Most lawyers accept the picture because they have no interest in testing out whether it is fake or presents something that actually exists.

And all that is just for starters.

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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting 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 COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Please visit www.lendinglies.com for more information.

 

Now that the election is over, start writing to senators and representatives in state and federal government.

MAKE SOME NOISE

I am proposing that homeowners start petitions and complaints to government agencies and to US Senators US Representatives, State Senators, and State Representatives. With the election over, they have the time to do their job instead of focusing on getting elected or re-elected.

I have been corresponding with activists who are doing exactly that and I was drawn into the effort. So here is part of my correspondence with one of them:

“I have been injured by illegal activities conducted by the parties identified in this complaint. Upon information and belief, the damage I have suffered and continue to suffer also applies to thousands of other homeowners.”

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Then specifically identify the way you have been damaged and how much damage you suffered and how you measure that damage. Then spell out with specificity the violations of statutory law and common law and exactly how those violations caused the damage you suffered.
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And when you are writing to an agency (Federal or State) is a good idea to start out with the statement that (XYZ is an agency whose charter requires that it act in the following circumstances. Then you quote the statute. Then you say that the agency is not acting in compliance with this charter and that you have been injured as a result.
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I have been thinking about this for a while. I think you need to say that the agency or law enforcement or whatever has been operating under false presumptions and that the agency’s failure is its failure or refusal to conduct evidentiary hearings on the facts currently presumed in homeowner transactions. It is operating on presumptions that have no foundation in fact. You might also cite the fact that the agency has not, upon information and belief, consulted any investment banker about its regulation, investigation or enforcement laws of transactions that are advertised as having been “securitized.”
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In other words, maybe make it less about law than fact. You might also want to address the elephant in the living room by saying something like this: “the widely held presumption that prohibiting noncreditors and nonservicers from interfering with the homeowner transaction would produce a “free house” or “windfall” is constantly repeated without any hearing in any setting as to the foundation or truthfulness of that statement.
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“It seems to be founded on the idea that since the homeowner was seeking a loan, they must have received a loan — thus categorizing the homeowner transaction without evidence. And it seems that this empty foundation is then used to arrive at the erroneous conclusion that homeowners will receive an unfair or inequitable distribution in the vent that illegal enforcement of implied loan accounts was stopped.”
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Then maybe the statement that says something like this:
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“For 10 years, I have been confronting the actors that were claimed to be servicers or creditors in my case, and I have learned that those actors are named but not functioning in any way relevant to my transaction or attempts to claim rights to administer, collect or enforce an unpaid loan account. All functions relating to my transaction are conducted by financial technology companies who are now categorized as servicers because they receive, process and account for payments received from homeowners — regardless of whether or not such payments are due.
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“In consulting with experts in investment banking, accounting, and auditing, they assure me that no sale has occurred in connection with the allegation or implication of an unpaid loan account owned by any of the actors claiming those rights. By definition, this means that my transaction has NOT been securitized and that therefore no assignment of mortgage or endorsement of a note transferred any underlying obligation.
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“The legal and common law requirements of transparency in such transactions have not only been ignored. They have been expressly evaded and voided, leaving homeowners like me without a lender, a successor lender, or even a loan account that I can access to determine whether it exists, who owns it, and the balance due. Instead, my inquiries have uniformly been met with stonewalling and distraction — presenting me with a third-party report or statement of “Payment History” that is NOT from or by the party who was designated or implied to be the owner of an unpaid loan account.
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“If it was a loan, it was never securitized (assuming securitization means selling an asset in pro rata pieces to investors). By definition, this means that all claims and all rights claimed by actors who are relying upon the securitization of an unpaid loan account owed by me do not exist. But your agency has consistently taken the opposite position without questioning whether the foundation for its presumptions is true.
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“Your agency has a duty to inquire about whether unpaid loan account exists in my case and in thousands of other cases that are similarly situated. Suppose the original homeowner transaction was a shield to conceal the true nature of what investment bankers were doing when they appeared to be entering the lending marketplace. In that case, the agency must discover the component parts of the transaction and the nature of the implied or alleged transaction. In that respect, the agency has failed.
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“The result is that I have been paying actors who have no right to my money, and I am constantly under threat of foreclosure or other enforcement mechanisms to collect a “debt” that is nonexistent — at least to the actors making the claim. I am dealing with a ghost that fabricated by complex financial instruments in which virtual claims replace the legal requirement of actual claims.
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“The end result is that the actors in the false “Securitization” game have generated revenues hundreds of times ordinary revenue for investment bank underwriting, homeowners have received no share of a scheme that requires their signature and reputation to launch, and homeowners have assumed a risk about which they had no idea existed — counterparty to an apparent “loan transaction” in which the “lender” has no risk of loss and no incentive to assess the viability of the transaction as required by the Federal Truth in Lending Act.”
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