How to present the defense in foreclosure

Program note: The Neil Garfield Show will not air tonight due to personal and professional time conflicts.

As we all continue to fight what we know are wrongful foreclosures we struggle with how to reveal that to a judge in a way that is so compelling that even the most bank biased judge will feel so uncomfortable with the proof that he or she is compelled to rule for the homeowner. As long as the judge think the forced sale of the property is going to result in restitution for an unpaid debt the ruling will most likely be for the claimant even though the claim was at best defective and probably fraudulent


In response to a question from a lawyer in Massachusetts who was lamenting the loss of his forensic “expert” and other problems defeating illegal foreclosures I wrote the following:

While talented, she may suffer from the same delusions of grandeur as some other forensic experts — but she can still be used. Her impulse to offer opinions must be thwarted. Her factual analysis is usually spot on except for some anomalies that she still doesn’t understand. I warned such unqualified “experts” years ago that they would undercut their work by proffering opinions for which they are completely unqualified especially as to conclusions of law —which no “expert” can proffer. They are easily undermined when they appear to be an advocate instead of a finder of fact and a reporter of discrepancies. 

You are of course completely correct when you describe the current judicial climate and context. Yet I have won cases repeatedly even with judges who were distinctly pro-bank.

The key appears to be getting them to feel so uncomfortable with the proof of the claimant that they can’t rule for them even if they think that such ruling would result in the right thing — i/e/. restitution for unpaid debt. Using that as your first goal you can move to your second goal which is giving the judge comfort in ruling for the homeowner and setting up a claim for wrongful foreclosure.

Once a judge comes to the conclusion that the proof has failed and that the documents are not authentic or even suspected of fabrication, then he/she can state factual findings that say that the Plaintiff never had any right to the debt and lacked standing to foreclose. In two of my cases the pro-bank judge stated at length (30 minutes or more) why the casen utterly failed and was based upon at least suspicious documents.

I have recently found it helpful to point out the difference between enforcement of a note and enforcement of a mortgage. All 50 states have adopted Article 9 §203 UCC which states that a condition precedent to enforcement of a mortgage is that the party who initiates the foreclosure action must be the owner of the debt of reason of having paid value for it.

The banks have succeeded in confusing the issue especially when unopposed or when opposed by a pro se litigant or a lawyer who does not understand the basic precept that the condition precedent of payment of value for the debt is never waived or to be ignored.

The banks get around this by arguing for a legal presumption that delivery of the note constitutes delivery of the debt (or delivery of title to the debt) and then presume that the debt was paid for by the transferee. That is a presumption on a presumption.

Then the court presumes that the transferor was the owner of the debt because if the transferor was not the owner of the debt then the purchase would have been just for the note and not the mortgage (transfer of mortgage without the debt is a legal nullity).

And if the purchase was just for the note then the claimant would appropriately claim that it is a holder in due course which frees it from most defenses of the maker of the note regardless of who owns the debt. But the HDC may not foreclose on the mortgage because it was not paying for the debt unless the owner of the note happens to be the owner of the debt. And not so oddly there is never a claim of HDC status in today’s foreclosures.

So the way forward might be a recent tack I have taken. And that means taking it one step further. If the claimant did not purchase the debt for money the claimant is not entitled to foreclose. But this still leaves the corut thinking that this is a technical objection to prevent restitution for a just unpaid debt. While the “other creditor” idea is theoretically correct, it gains no traction in court. 

But a close corollary does gain traction, to wit: that if the claimant is not the owner of the debt it may be presumed that upon forced sale the proceeds are not going to the owner of the debt unless the proof establishes some representative capacity, even if that capacity is barred by Article 9 §203 UCC.

By arguing that no proof has been alleged and no allegation or assertion has been made that the proceeds will go to the party who owns the debt by virtue of having paid for it, you effectively eliminate the ability of the judge to presume otherwise since there is not even a scintilla of anything to support that view, which incidentally is in fact entirely correct — the proceeds do not go to anyone who has paid value for the debt.

Which brings us to the point that makes every judge uncomfortable regardless of  bias — if the debt is not going to be repaid by the forced sale of the property then it follows logically and inescapably that the sale will result in revenue to the participants in the foreclosure, not the repayment of debt.

And foreclosure is a remedy exclusively reserved to a claimant seeking restitution of unpaid debt owed to the claimant. If the claimant has not paid for it then the claimant does not have any accounting records showing that it is reporting a loan receivable for the subject debt, note or mortgage and that means no injury, no standing and even malicious motive attempting to weaponize the foreclosure process to achieve revenue to the detriment of both the homeowner and the true owner of the debt who paid for it.

It should be argued that the obtuse complexity of sales of mortgages into the secondary markets and claims of securitization is not the product of some plan of homeowners to escape a just debt. It is the product of a plan by banks who saw an opportunity that was worth their effort despite the risk that the plan failed to comply with law. Whether the banks can create a lawful correction to the problem is not for the court to decide nor for a borrower to propose. A foreclosure must be decided based upon the claim alleged. If that claim is invalid then the claimant must lose.

Appellate Judges Do Not Redo the Case

The appellate court does not review for purposes of figuring out whether an alternative decision would have been better. They review strictly for the purpose of deciding whether there was any legal basis supporting the judge’s decision. If the answer is yes the decision is affirmed. If the answer is no, then the decision is reversed.

Why “REMIC” Certificates Are Not Mortgage Backed

One of the things tying the SEC and the IRS in knots is that the securitization scheme was a scam that is now institutionalized. The Certificates pr “bonds” are not mortgage backed and that means the so-called REMIC trusts are not REMICs.

In answer to a question addressed to Bill Paatalo and myself about that I wrote the following:

The answer to the question is that the investors buy a certificate which is a contract, much like a promissory note. The certificate promises to pay certain money (a varying stream of revenue) based upon an index to several events outside the scope of the contract (certificate).
The certificate is unsecured in that it grants no right of enforcement against any collateral. While the indexing system  includes the behavior of residential mortgage loans, the investor is merely advised of the way in which a computation of his payments will be made.
The investor never receives any right, title or interest to those loans and never receives any right to enforce the terms of the debt, note or mortgage. The investor has not purchased the debt from which the loan agreements were drafted and thus would be barred by law from attempting to enforce a mortgage or deed of trust.
But investors are further barred by the indenture to the certificate which normally expressly waives any right, title or interest to the debt note or mortgage on any loan. Even if the indenture does not contain such an express waiver the investors are barred by the other restrictions contained in the Prospectus offering the Certificates to qualified investors. Thus the phrase “mortgage-backed” is merely a tag line that creates an illusion.
For all of these reasons the judges in tax cases have determined that the holders of REMIC certificates or “bonds” are not the holders of any secured obligation. The fact that the words “mortgage-backed” are used does not make the certificates backed by mortgages. They are not. But simply asserting that they are and naming them as such is sufficient to raise questions of fact that must be determined by courts.
This is particularly important in foreclosure cases where the case is asserted to be on behalf of the holders of the certificates. Since the holders have no right to foreclose it is obvious that  anyone representing the holders would have no more power than the actual holders of the certificates.
If you want further analysis and the development of strategy or tactics for a particular situation, the you must retain me to do and probably Bill as well. Since he can provide the actual exhibits and other evidence that would prove the analysis contained in this email.
I would add to that answer that the banks are succeeding procedurally where they cannot succeed substantively. First they make it appear that it is the banks who are foreclosing when it is the “trust.” So judges grant them more credibility than the debtor or borrower.
Second, the complexity of the securitization scheme is such that it takes a great deal of time for a lawyer, much less a judge to be convinced of what is written in this article. Once they do the work they know it and believe it. But they don’t do that work if they are not paid to do it, and most homeowners are unwilling to unable to pay for the education of the lawyer, who must then embark on educating the judge.
Hence you get what you pay for. The lawyer, ill-prepared to argue or reveal the complex points merely inserts stalling tactics seeking a modification, because that is all that the homeowner is willing or able to pay for. Judges, seeing this, are the led to believe that there are no real defenses to these foreclosures and that the foreclosure will end up paying the debt, which they don’t.

I keep receiving the same question about finding  a lawyer. People are seeking lawyers that have come to the same conclusions that I have written about on these pages. There are very few of them. A common question is whether I can recommend the lawyer that shares my philosophy. Here is my answer:

The first thing to remember is that I don’t deal in philosophy. My philosophy is the pursuit of justice. It’s also the pursuit of truth. I know that sounds corny, but that’s all I’m about. Most attorneys share my philosophy contrary to what you have indicated. But it is also true that most attorneys lack the time or motivation to do the research on this very complicated area of litigation. Therefore they apply legal standards that can and do lead to erroneous conclusions.

Convincing a lawyer is the same as convincing a judge. You start with the fact that what you are saying is counter-intuitive. The lawyer and the judge both believe they already know what is happening. Somebody is suing in foreclosure in order to create restitution for an unpaid debt. Convincing them otherwise requires careful research, analysis and preparation for a very persuasive presentation.

So if you’re looking for a lawyer that already knows what I know and who has already done the research, analysis and preparation for court, and who has won in court based on the essential premise that the party claiming foreclosure had no right to do so, you are not going to find many people. It’s not fair but it is a fact. Instead of looking for that you should be looking for a lawyer who is open-minded enough to join a telephone conference with me where I explain how I have won these cases.

Your pitch to the prospective lawyer should not be whether they agree with me, but rather whether they are open to being convinced by me in the same way that I have convinced judges in hundreds of cases. Lawyers don’t like to lose cases. Your job and mine is to convince them that they will win and to give them the motivation and tools to do so. Let the prospective lawyer sit in judgment on your case with the bias that you are trying to get out of a legitimate debt and to get a free house.

The lawyer, like any judge, will resist the possibility of a defense that results in a windfall to a homeowner. And it is probably true that neither the lawyer or any judge will fully accept the notion that in today’s judicial context, the windfalls are all going to participants in illegal foreclosures sought in the pursuit of money for revenue and not money to pay a debt. For most lawyers and judges, that is a bridge too far. They just can’t see how that could be true. It’s only if you happen to get a judge or a lawyer who has a background of investment banking that they will understand how that is possible.

Lawyers and judges are just people like you and me. They come to your case and view it through the lens of their own history, experiences and training. In that context it is safe to say that they would rather see an outcome rewarding the players initiating a foreclosure than allow a borrower to end up on the winning side of the dispute, even if that means that the parties involved in making the claim have misbehaved and are using fabricated documents that have been forged, backdated and robosigned.

I’m telling you this not because I think your task is Mission impossible but rather to give you are realistic view of the uphill climb involved in persuading a lawyer, a judge or just another human being that you are on solid ground – legally, ethically and morally.

It can be done and I’ve done it. But to be honest, in all cases where I have been successful, the judge was ruling on the basis of deficiencies in the proof of the prima facie case for the party named as claiming the foreclosure. The judge may have ruled that way because he or she was convinced that the wrong party had brought suit. But they certainly were not embracing the notion that there was no claim on the debt because there was no existing creditor.

So the general strategy is to shoot for the stars and accept a landing on the moon.

Law Firm Admits Absence of Creditor

Hat Tip Bill Paatalo

You are right, Bill. You can’t make this stuff up. But somehow judges still don’t want to believe it. How can you be attorney in fact for a nonexistent entity?

This is an attempt to avoid both criminal prosecution and bar discipline for misusing the license to practice law. But the end result inescapable. By admitting that there is an absence of any mortgagee the law firm is admitting that they do not represent any creditor because they don’t believe that the creditor even exists, much less that the law firm actually represents them.

This is all very counterintuitive. Why would a lawyer go to court without a client? Answer: the real client is someone who sees an opportunity to make money by suing on a claim that does not belong to them. The fake client is the nonexistent entity that has a name but no real existence much less ownership of the debt, note or mortgage.

Judges can’t seem to get past their bias that the foreclosure means that even if improperly done it will result in payment of the debt. If there is no creditor you can be sure that there is no payment of the debt that results from foreclosure. So what is that money when the property is sold? It is REVENUE.

Courts are granting revenue to any applicant who pretends that it is somehow connected to a creditor without naming any creditor and without actually showing authority from anyone who has paid value for any debt. 

How to Distinguish Between Ownership of the Debt, Ownership of the Note and Ownership of the Mortgage (or Deed of Trust)

Amongst the lay people who are researching issues regarding who actually can enforce a mortgage, there is confusion arising from specific terms of art used by lawyers in distinguishing between a debt, a note and a mortgage. This article is intended to clarify the subject for lawyers and pro litigants. The devil is in the details.

Bottom Line: In most cases foreclosures are allowed because of the presumption that the actual original note has been physically delivered to the current claimant from one who owned the debt because they both had paid money for it. In most cases merely denying that fact is insufficient to prevent the foreclosure because the court is erroneously presuming that even if the foreclosure is deficient the proceeds of sale will still go to pay the debt.

In most cases those presumptions are untrue but must be rebutted. And the way to rebut those presumptions is to formulate discovery that asks who paid for the debt, when and who were the parties to the transaction?

The  lawyers from the foreclosure mills will fight tooth and nail to prevent an order from the court directing them to answer the simple question of who actually owns the debt by reason of having paid value for it and thus who will receive the foreclosure sale proceeds as payment for the debt. The answer is almost always the same — the foreclosure mill is unable to identify such a party thus conceding the lack of subject matter jurisdiction and standing to bring the foreclosure action.

Eventually some party will be identified by changes in the law as being the legal owner of the debt. thus cleaning up the jurisdictional issue caused by utilizing parties who have neither suffered any financial injury nor are threatened with any such financial injury. But for now, the banks are stuck with the mess they created.


GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

Transfer of debt is by payment for the debt. Payment means you have a legal and equitable right to claim the debt as your own. Payor is the new owner of the debt and the Payee is the prior owner of the debt. There are no exceptions.

The note is evidence of the debt. It is not the debt.
Payment of money to a borrower creates a debt or liability regardless of whether or not any document is signed.
Signing a document promising to pay creates a liability regardless of whether or not there was ny payment of money. In fact, if someone buys the note for value they become a holder in due course and the maker is liable even if they never received any money, value or consideration.
Enforcement of the debt alone is governed by statutory and common law.
Enforcement of notes and enforcement of the security instrument (mortgage or deed of trust) is controlled strictly by the adoption of the Uniform Commercial Code (UCC).
Article 3 UCC governs the negotiation and enforcement of paper instruments containing an unconditional promise to pay a certain sum on a certain date.
Article 9 governs the transfer and enforcement of security agreements (mortgages and deeds of trust).
Whereas Article 3 does not require the holder of the note to be the owner of the debt for purposes of enforcement of the note, Article 9 requires the holder of the mortgage to be the owner of the debt as a condition precedent to enforcement of the mortgage. No exceptions.
Ordinarily the execution of the note causes the debt to be merged with the obligations under the terms of the note. But this is only true if the owner of the debt and payee under the note are the same party. If not, then the execution of the note creates two distinct liabilities — one for payment of the debt and one for payment under the terms of the “contract” (i.e., the note).
Before securitization it was customary that the owner of the debt had paid money to the borrower as a loan, and the execution of the note formalized the scheme for repayment. Hence under the merger doctrine the borrower who accepted the loan and the maker of the note were the same party and the Lender of the money to the borrower was also the payee named in the note.
Now this is not always the case and appears to be not the case in most loans, which is why the banks have resorted to fabricated backdated forged and robosigned documents. The Lender in many if not most loan originations was not the party named as payee on the note. And the party named as payee on the note had no authority to represent the interests of the lender. Where this is true, merger cannot apply. And where this is true, enforcement of the note is NOT enforcement of the debt. Rather it is enforcement of a liability created entirely by contract.
Foreclosure of a mortgage must be for payment of the debt, not just the liability on the note. All states have case law that says that transfer of mortgage without the debt are a nullity. This executing and receiving an assignment of mortgage and even recording it is a legal nullity unless the recipient paid money for the debt and the transferor was conveying ownership of the debt because the transferor had paid money for the debt. If those conditions are not met the executed and recorded assignment of mortgage is a legal nullity and the title record must be viewed by the court as lacking an assignment of mortgage.
The judiciary has not caught up with these discrepancies in most instances. Hence a judge will ordinarily presume that the delivery and endorsement of the note and the assignment of the mortgage was equivalent to the transfer of title to the debt, with payment being presumed for the debt. So while the law requires ownership of the debt by reason having paid for it, the courts presume that the debt was transferred along with the paper, subject to rebuttal by the maker and borrower.
The rubber meets the road when in discovery and defenses the borrower raises the issue of who paid for the debt and when. In the current world of securitization the answer will be the same: the banks won’t tell you and they won’t admit that the party named as claimant in the foreclosure never paid for the debt, despite appearances to the contrary. 

Tonight! The Chase-WAMU Scheme —Laundering Money and Mortgages For Untaxed Profit 6pm EDT With NEW EVIDENCE


Thursdays LIVE!

The Neil Garfield Show

or prior episodes

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



Bill Paatalo joins me on tonight’s edition of the Neil Garfield Show. That’s because as a forensic investigator (and former cop) he just recently unearthed the most damning evidence yet against Chase and their entire charade.

Chase never paid for, does not own and legally is not entitled to enforce the mortgages that were originated by WAMU.

The courts have been letting Chase foreclose on the presumption that the foreclosure sale proceeds were going to pay a debt. Paatalo’s new evidence underscores and corroborates the fact that Chase converted debt into revenue without ever putting up a single penny.

So far Chase has made hundreds of billions of dollars by foreclosing on loan agreements to which they are not a party and for restitution of a debt that Chase does not own. So even after foreclosure, the debt never gets paid. Foreclosure sale proceeds are received by Chase as revenue!

See Article 9 §203 UCC adopted in all 50 states

Chase Laundered WAMU Loans Through Offshore Accounts with Fictitious Names

Bill Paatalo has once again made a breakthrough in analyzing and investigating the Chase-WAMU connection.


Here is what we know:

  1. Washington Mutual (WAMU) was in the business of originating loans  not lending money.
  2. WAMU sold every originated loan before, during or after loan origination. Its securities subsidiary pocketed the profits and was liable for buy-backs which everyone knew could never be funded.
  3. This process resulted in the origination of of approximately $1 Trillion in mortgage loans.
  4. No assignments of mortgage were ever recorded in which WAMU was the assignor and WAMU executed the instrument. Some were attempted by Chase as “attorney in fact.”
  5. No indorsements of any promissory note was ever produced or signed directly by WAMU.
  6. While the debt, note and mortgage were sold by WAMU contemporaneously with origination (actually for a fee where WAMU did not fund the loan), a gap existed in the title record. The purchasers of the loans could have corrected the record with affidavits and court orders which could have been easily obtained with proof of purchase. One of the purchasers could even have been a Chase subsidiary.
  7. No effort was ever made on or off record by anyone to clarify the owner of the debt, note or mortgage.
  8. WAMU went bankrupt in 2008, its estate subject to the control of the US Trustee in bankruptcy.
  9. WAMU was seized and liquidated by the FDIC in 2008, as receiver of the estate.
  10. The FDIC never issued any power of attorney nor any assignment or endorsement of any loan because  there were no loans to assign or endorse in the WAMU estate. The estate did not own the debt, note or mortgage of any loan.
  11. Chase bought the WAMU estate on September 25, 2008. This included the servicing rights, if they existed, on loans that WAMU had originated. Many of these servicing functions had already been sold or transferred prior to the sale. The consideration for the entire deal was zero.
  12. Chase claimed servicing rights on every loan originated by WAMU.
  13. Chase then claimed ownership of the debt, note and mortgage on each loan even though they had been previously sold. This was a blatant lie.
  14. Chase then foreclosed on thousands of homes as if it was the party entitled to enforce the mortgage — i.e., the party who had paid value for the debt — a condition precedent to enforcement under Article 9 §203 UCC.
  15. The success of Chase in these illegal foreclosures, in most instances by default, resulted in windfall profits, most of which were recorded offshore to avoid taxes. Each time a property was sold the money proceeds were distributed as revenue to the participants who aided in the illegal foreclosure activity.
  16. None of the proceeds of sales of illegally foreclosed property was ever distributed to any owner of the debt.
  17. Thus Chase successfully converted assets to revenue, avoided taxes on windfall profits, and will argue that it was return of capital (payment of principal amount of loan) even though they never invested one dime in any of the WAMU loans at origination or acquisition.

How One Woman Beat the Banks by David Dayen

I’m not sure if I ever knew about this article but it seems accurate.

Keep the Envelopes! Attention Forensic Auditors! How to Show They Are Lying About Everything

The devil is in the details and it is in the details that actions don’t add up if one party is faking their status. 


GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

Hat tip to Summer Chic

I have long described the practice of sending out correspondence and notices from, say for example PennyMac, from an address that has never been PennyMac. Summer Chic discovered with some snooping that the letter she received from “PennyMac” was sent from a Bank of America location. Bank of America claims no connection with PennyMac. In many such scenarios Bank of America claims no connection with the loan.

Of course that might very well be true. Because in the securitization game the real records are kept at the investment bank (who at least WAS the real party in interest when the loan was originated or acquired)  and a central repository from which documents, notices and other instruments are created, signed, sent and filed. In most cases this central repository is Black Knight, which is the new name of Lender Processing Systems, (LPS) who had a subsidiary or division called DOCX.

This is why the claims of a “Boarding process” are pure fiction, because the records are always kept in the same place and never move.

DOCX you might remember is the place where most of not all document fabrications took place including signatures that were forged or robosigned. Fabrication as you know means that they were creating documents that did not previously exist. Those documents did not exist for only one reason, to wit: there was no transaction  to document so the document was never prepared until it was necessary to fake it for the purposes of foreclosures.

Incredibly Black Knight is now used as a trusted source of information about mortgages and foreclosures despite being the central entity (operating through third party contractors) from which false documents are created and used in foreclosures.

It was necessary to fake it because under the law, it isn’t enough to allege or assert that a borrower failed to pay. Failure to pay is only a breach as to the owner of the debt who is entitled to receive the payment because he/she/it paid money for the debt and the rights to enforce. But no such payment ever occurred. If there is no rebach there is no claim.

So in order to cover-up the illusions created by fabrications of documents, it was necessary to fake the sending, filing and serving of process of documents. While this was accomplished in some corrupt courts (one right here in Florida), ordinarily it was accomplished by sending the notices not from the central repository, Black Knight, which would make it obvious that it was all coming from one place, but from different locations around the country — hundreds of them.

So in our example, PennyMac agrees to let Black Knight use its name for notices, and Bank of America agrees to have the notice sent from one of its thousands of locations. In reality the notice came from Black Knight and neither PennyMac nor Bank of America know what is contained in the notice, nor do they care.

In court, as I have repeatedly said, it is unwise to try and allege and prove all of that, because you will never get access to the real records of Black Knight, Pennymac or Bank of America. If you could you would would have one big class action lawsuit against all three of those entities. It is well hidden under agreements that might never see the light of day.

BUT, you can use discovery and cross examination to gradually educate a reluctant judge so that he/she gets increasingly uncomfortable with what they are hearing. By using discovery effectively you could even bar the introduction of certain evidence and legal presumptions because you never received an acceptable response to your requests for discovery.

The questions are quite simple: using the envelope as evidence (after proper foundation testimony or as a exhibit for ID to be later admitted into evidence) you elicit the fact that either the entity does not maintain any address at that location and never did or that the witness doesn’t know and that the employer refuses to answer.

You are asking the question “Who sent this notice?” knowing full well it wasn’t the witness or his employer or anyone else in the chain of title. If the witness slips and answers truthfully (which happens occasionally) that it was Black Knight then you’re off to the races with questions about what Black Knight is doing sending out notices on a loan with which they supposedly have no connection and on whose behalf the notices were actually sent.

How to Use Forensic Auditors During Discovery

Discovery is a process that can be used in litigation. That means you have to be in court. Discovery is the process of asking for information that don’t already have or information that will corroborate information that you do already have. Almost by definition it is a fishing expedition. But the days in which you can throw out a wide net are over. Neither federal nor state judges will permit discovery unless it is specific, and relates directly to the functional narratives of the case proffered by both sides of the lawsuit.

Good forensic examiners are required to frame proper requests for discovery and to focus the narrative that will support those requests for discovery. Failure to do so will most likely result in either no answer from the opposition, or a slew of meaningless objections. The next step, a motion to compel, will only be successful if you can succinctly state why you are requesting this information and how it specifically relates to the defense narrative or the prima facie case of the party seeking foreclosure.

Unless you are successful in obtaining an order granting your motion to compel, any subsequent motion for sanctions or motion in limine will be summarily denied and your opposition will be able to introduce evidence that they refused to give you during discovery.


GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

In every case in which you seek discovery against the foreclosing party, that party is seeking to conceal its weaknesses. They will raise objections, whether supportable or not. You should work with an attorney who is familiar with trial practice and a forensic auditor or examiner who can help you pass the following tests. An affidavit from a forensic auditor detailing why you need this information will go a long way toward supporting your argument in favor of an order compelling your opposition to give adequate responses to your request for discovery.

see The Tests You Need to Meet in Order to Get Discovery

If the data in question passes these two tests (yes, it’s relevant to the case, and no, it’s not privileged information) then the courts look at the following six factors laid out in FRCP Rule 26(b)(1) to help determine rulings on proportionality.

  • The importance of the issues at stake

  • The amount of information in controversy

  • The parties’ access to the information in question

  • The parties’ resources to obtain the information

  • The importance of the discovery in resolving the issues

  • Whether the burden or expense of the proposed discovery outweighs its likely benefit

How to track that PO Box When You Receive Notices or Statements

Courtesy of Summer Chic

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2018 DOJ Lawsuit Reveals Securitization Equivalent to “Leprosy” According to Wall Street Insiders

see US v UBS Re: Countrywide, WAMU, Fremont, Am Home Mtge, And IndyMac (OneWest)

Although the US Department of Justice has never filed criminal charges against anyone, they clearly wanted to do so. Having been limited by some sort of executive direction, they have been filing civil complaints. Such cases often bear the name of an entity not publicly known as a player in securitization scheme that started 20 years ago.

If you read the complaint you will see how it was widely known and accepted that loans were being sold to consumers under circumstances where repayment would most likely never occur and where the value of the collateral was far less than the ultimate value of the loan. In my opinion, this demonstrates the fact that the original loan contract was not representative of the entire transaction. Nobody makes a loan knowing that it won’t be repaid. In fact if they do something like that, it can’t be considered actually a loan. It is either a gift or it is part of a larger transaction.

No reasonable person could conclude that the intent of Wall Street was to give a gift to every one of the homeowners who received money as a result of their scheme. That leaves only one possible conclusion, to wit: that the loan origination was only one part of a much larger undisclosed scheme, the existence of which was intentionally obscured and withheld from the borrower, whose name, signature reputation and home were not just material, but absolutely essential requirements for the success of the scheme.

The intent was clearly not to receive repayment of a loan. In fact all evidence currently available suggests that any money that has been received as a result of the “loans” to consumers was actually revenue disguised as principal, interest, or the proceeds of property sales – voluntary or involuntary. The current evidence strongly suggests that there was a complete conversion of the loan receivable from the category of “asset” to “income.”

All attributes of the debt and all revenue streams or profits from treating indirectly on the debt were sold for profit in which the participants in that revenue stream received at least 11 times the amount of the purported “loan.”

As part of the cover-up most of the revenue stream was reported as return of capital, implying that the conversion to income had never occurred. This enabled avoidance of substantial income taxes on regular trading income. The taxes lost to State and Federal Government were far in excess of the cost of various packages that were used to stimulate the economy after the crash caused by the very same investment bankers who had cheated the government out of the receipt of tax revenues, cheated homeowners, and cheated investors.

In order to maintain the illusion, which required concealment of the conversion of the apparent loan receivable from asset to income, it was necessary to bring foreclosure actions on those consumers who had stopped making payments. This was true even though the parties to whom they were making payments, were not collecting on behalf of any party who owned the debt by virtue of having paid money for ownership of the debt and the rights to enforce it.

But since the loan receivable had been converted from asset to income they had to create the appearance that the conversion had never occurred. And that is why we saw widespread fabrication, forgery and Robo signing of backdated documents that referred to nonexistent transactions. In reality it is simply not possible that anyone in the chain of title could have paid any money for ownership of the debt and the rights to enforce it; this was simply because none of those parties had ever funded the origination or acquisition of the debt.

As I stated in 2008 the process of securitization as it was being practiced by Wall Street, was roughly the equivalent of placing a variety of fruits into a food processor and blending the fruits into a fruit smoothy. The process of fabricating documents for foreclosures was the equivalent of taking this fruit smoothy and extracting the original fruits.

Somehow investment bankers convinced people who had controls over the levers of power in our government that the pain of the scheme should be borne entirely by homeowners and investors whose only role was that they were victims of the scheme and continue to be deprived of any participation in the revenue stream that could never have been produced but for investment bankers successfully deceiving both the investors and the homeowner’s into signing on to agreements that were essentially irrelevant to the actual scheme in play.

As you will see from reading the complaint filed by the Department of Justice against UBS, the insiders who were trading digitized certificates and contracts deriving value from an index that referred to a group of loans that were not owned by any of the participants, referred to the “pooling” and the derivatives as a bag of shit whose value was something less then leprosy.

And that is what is being enforced in foreclosure courts across the country. And somehow most homeowners continue to experience feelings of shame and regret for not giving even more revenue to players who will already profited in pornographic proportions to any money that was loaned. Those homeowners think that they are either paying a debt if they are making monthly payments, or they are giving up their house to pay a debt. If that was true, that none of the fabrication of documents, forgery or Robo signing would have been necessary.

Minus 0.5% Interest: Bank in Denmark will effectively pay qualified home buyers who take out a 10-year fixed rate mortgage

see Denmark Bank offers negative interest rate — how are they making money?

The answer is simple — the bank is not making money on the loan. It is making money by originating the loan. It is not making money by collecting interest, it is paying interest in exchange for the borrower’s signature. The bank is not taking any risk because the fees it collects from investment bank make it a lucrative deal for the bank, who doesn’t care whether the loan is repaid or not.

The bank losing nothing if the principal amount of the loan is not repaid because it has already sold the loan to an investment bank securitization scheme where the parts of the loan are sold resulting in proceeds of sales of the parts far exceeding the “whole” debt.

As I learned over the weekend in trying to explain what I am doing and my basic premise to a close friend who had no knowledge of finance and law the entire scheme is so counter-intuitive that it simply makes no sense to anyone who has not studied the subject. And nobody studies it unless they have reason for doing it.

A debt is a debt and a loan is a loan. But what if it isn’t?

In the mortgage meltdown era that started 20 years ago, borrowers were effectively paid to sign loan documents that reflected receipt of money in transactions that were called “loans” by the originators, sellers and facilitators who sold the more than 450  varieties of loan products to unsophisticated consumers, many of whom had no idea that they were signing away rights to a home that had been in their family for generations.

Those borrowers did not understand that they were being paid for their signatures, their reputations and their homes — and the information needed to make informed decisions and negotiate terms was being not only withheld but concealed.

The only difference between the American scheme and the Denmark scheme is that Denmark is upfront about it: “We’ll pay you if you will please sign these loan documents.”

In a world where information must be condensed into only a few words nobody takes the time to ask why any “lender” would do that or whether such a party could or should be allowed to pretend that it is a “lender.”

And certainly nobody is getting the information that would enable them to see that the transaction, disguised as a loan, is really and mainly a scheme to generate fees and profits through trading.

And not even the economists have taken much note of how this changes the “free market” notion that self corrects aberrant behavior. No correction occurred because the behavior was not aberrant. So borrowers could be and were enticed to sign papers that were not a  reflection of market forces adjusting for relative risk because one side — the origination side — had no risk.

Hence the advent of NINJA Loans. Repayment of a loan was incidental — not the point of the transaction. And that means it wasn’t really a loan. As long as that continues the entire financial system will be lopsided and the current system of predatory practices will be perpetuated — because there are neither governmental nor market forces in opposition to the investment banks.

This leaves both investors and borrowers in the silly position of being required to act as though they were — directly or indirectly — part of a loan transaction when in fact they had invested real capital and valuable property rights into a scheme in which they received either nothing or very little for their investment; and that is because neither the investors nor the borrowers actually knew and for the most part because they still don’t know the true nature of their investments and the legal rights they have for compensation for having been lured into an investment whose nature was unknown and where the parties to the transaction were both unknown and withheld.

At least in Denmark now negotiations have been opened. In order to restore “free markets” and the power of free market forces, we need to remove the impediments to the flow of free markets caused by severe asymmetry of knowledge. The borrower can now say,

“OK you are going to make a pile of money off of this deal, and you are offering 5 cents out of $11.00 in gross revenue. You can’t do the deal without me. So I want 50 cents. It’s in your interest to give me the 50 cents because that will help me pay the contractual payments in order to maintain the illusion that a single debt exists instead of hundreds of disparate parts that used to be the debt. If you don’t accept my counter offer I will find someone who will accept it. Or maybe I can find someone willing to pay me $1.00.”

Here is what is needed: Changes in the policy of enforcement as to unfair trading and dealing, securities violations, income tax violations and false reporting of assets and income. In any society the object is to protect and secure the rights and privileges of the people — not the corporate behemoths who regard the people as food.

All borrowers in all deals that are actually securitization schemes should have full disclosure regarding the fees and profits (as already currently required but not enforced under the Truth in Lending Act) so that they have their right to know the party with whom they are doing business and the ability to choose between vendors or purveyors of these securitization schemes and at least have the knowledge needed to effectively negotiate compensation. That was the whole point of TILA.

When the markets are not actually freely operating, free market forces cannot be in play. That is the point of government — to make the players act according to the rules to preserve free market flows, information and natural forces propelled by self interest.

Attention Accountants: Follow Up to Forensic Loan Seminar

see NON GAAP REsults Being reported by Entities Trading in new and old Derivatives

Recent reporting by companies involved in the creation and trading of various instruments that are designated to be “derivatives” or contracts on derivatives clearly shows a disclosure that they are not reporting results in accordance with GAAP. I don’t know how the SEC deals with such disclosure, since reporting requirements under the rules governing the SEC and companies reporting under those rules, clearly were choir compliance with accounting standards promulgated by the to the Financial Accounting Standards Board and previously the American Institute of Certified Public Accountants.

The the point here, just to reiterate, is that employing GAAP, which is required by law, would reveal that there are no entities that actually carry debts subject to derivative claims. Under current law, this leaves no creditor with authority to collect on the note or to enforce the mortgage. Parties receiving the proceeds of payments made by borrowers or proceeds of sales – both voluntary and involuntary – are receiving income.

If they are receiving income that they are not receiving assets, like cash or property. Foreclosure laws are intended to provide a method of restitution to creditors who otherwise would be subject to an actual financial loss caused by the failure of the borrower to repay the loan.

If the failure of the borrower to repay the loan merely results in the loss of expected revenue and not in a loss to an asset designated or deriving its value from a loan receivable, there is no law in existence that allows property to be involuntarily sold to satisfy the desire of any party to obtain revenue, even if that revenue was not a windfall.

I believe that only a CPA with experience in auditing could provide the testimony for the foundation of the defense narrative in which the homeowner is revealing the lack of ownership of the debt and the lack of a party identified as being the owner of the debt by virtue of having paid money to acquire the debt.

But I also believe that forensic examiners, auditors and reporters play an important part in getting to the point where such testimony could be proffered by the homeowner or the lawyer representing the homeowner.

To be clear, I am suggesting that the best practices would include employment of a forensic auditor, a CPA, and a licensed attorney with experience in trial law. For the attorney, that means experience in actually going to trial dozens of times. For the CPA that means experience in digging beyond data entries by management and purported receipts in the records of the Company. For the forensic auditor that means experience in dissecting the content and signature blocks unrecorded documentation, correspondence, statements and notices.

Chase-WAMU: Is it time to Declare Non Judicial Foreclosure Unconstitutional As Applied?

Faced with a notice of foreclosure sale from a company claiming to be the trustee on a deed of trust, homeowners in judicial states are forced to defend using well known facts in the public domain that are not evidence in a court of law. This is particularly evident in scenarios like the Chase WAMU Agreement with the FDIC and the US Bankruptcy Trustee on September 25, 2008.

In my opinion the allowance for nonjudicial foreclosure in circumstances where a new party appears under a lawyer’s claim that the new party is the beneficiary under a deed of trust under parole claims of securitization is an unconstitutional application of an otherwise constitutional  statutory scheme.

All such foreclosures should be converted to judicial and the claimant must prove the essential element under Article 9 §203 UCC that it has a financial interest in the debt because they paid for it. Forcing homeowners to prove that such an interest does not exist is requiring homeowners to have access to knowledge that is unavailable and solely within the control of the party falsely claiming to have the right to enforce the deed of trust and promissory note.

In my opinion this is an unconstitutional application of an otherwise constitutional statutory framework. In plain language it favors expediency and moral hazard over truth or justice.


GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

I have received questions, most notably from Bill Paatalo, the famed Private Investigator who has provided so much information to lawyers, homeowners and a=everyone else about the foreclosure crisis relating to non judicial foreclosures and the Chase-WAMU farce in particular. Here is my answer:

If what you’re saying is that the FDIC never became the beneficiary under the deed of trust, that is correct. But the legal question is whether it needed to become the beneficiary under the deed of trust. As merely a receiver for WAMU the question is whether WAMU was a beneficiary under the deed of trust and the answer is no because they had already sold their interest or presold it before origination.

If WAMU was an actual beneficiary then the FDIC was the receiver for the beneficial interest held by WAMU. If that is the case the FDIC could have been represented to be beneficiary on behalf of the WAMU estate for foreclosures that occurred during the time that FDIC was receiver.
If WAMU was not an actual beneficiary and could not, as your snippet suggests, sell what it did not own, then the FDIC’s receivership is irrelevant except to show that they had no record of any loans owned by WAMU.
One key question that arises therefore is what is a beneficiary? In compliance with Article 9 §203 UCC I think all states that a beneficiary is one who has paid value for the debt, owns it and currently would suffer a debit or loss against that asset by reason of nonpayment by the borrower. Anything less and it is not a beneficiary. And if it isn’t beneficiary, it cannot instruct the trustee to send out notices as though it was a beneficiary.
So any notice of substitution of trustee, which starts the whole foreclosure process is bogus — i.e., void as in a nullity. The newly named trustee does not possess the powers of a trustee under a deed of trust. Hence the notice of default, sale and trustee deed are equally bogus and void. They are all nullities and that means they never happened under out laws even though there are lawyers claiming that they did happen.
Despite the Ivanova decision in California declaring that such foreclosures can only be attacked after the illegal foreclosure, this is actually contrary to both California law and the due process requirements of the US Constitution.
With more and more evidence of fake documents referring to nonexistent financial transactions, the time is ripe for some persistent homeowner, with the help of a good lawyer, to challenge not only the entire Chase-WAMU bogus set up, but to get a ruling from a Federal judge that the abr to preemptive lawsuits to stop collection or foreclosure activity is unconstitutional as applied.
In nonjudicial states it converts a statutory system which is barely within constitutional bounds to an unconstitutional deprivation of property and civil rights without due process, forcing the homeowners to come up with answers and data only available to the malfeasant players seeking to collect revenue instead of paying down the debt.

Tonight! How to Use Bankruptcy Cases of Originators and Fronts for Investment Banks 6PM EDT Neil Garfield Show

Thursdays LIVE!

The Neil Garfield Show — WEST COAST


or prior episodes

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


see How to Use Bankruptcy Cases of Loan Originators

Following up on the show two weeks ago, Charles and Bill delve deeper into the issue of how investment banks are using names instead of entities, and in all cases using  both names and entities to put apparent veils between the investment bankers and the liability they created for illegal lending, servicing, collection and foreclosure.

We look today at the case of Bolduc v Beal Bank to show a way forward for borrowers suing defendants like Ditech and Aurora, who have been in Chapter 11 bankruptcies and Chase who has been one of several banks who have used bankruptcies of front organizations like DiTech and Aurora to create the illusion that the bank owns loans that have long since been sold into thousands of pieces in the secondary market.

2008 Schack Decision Reminds Us How Something “Nefarious” Is Happening

Without a party actually getting hurt by nonpayment, why should anyone pay their mortgage?


GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

see Deutsche Bank National Trust Co_Justice Schack

It is worth remembering when the foreclosure tidal wave began and the banks were at least as arrogant as today creating sham entities, sham addresses, sham  documents, fabricated instruments with sham people. And it is worth remembering several judges, Judge Arthur Schack among them, who stood up to the great powers of our nation and simply told the banks to follow the law or give up their claim.

  • This is the decision where Judge Arthur Schack stated his refusal to accept obvious irregularities as follows:
    • All at the same Suite Number at the same West Palm Beach address undoubtedly controlled by Ocwen subject to instructions from various investment bankers: Goldman Sachs, HSBC Bank, N.A., Ocwen Federal Bank FSB, and Mortgage Electronic Registration Systems, Inc.
    • Jeff Rivas signing affidavits on behalf of multiple entities all within the same time frame
    • only if it presents to the Court within thirty (30) days from the date of this decision and order: an affidavit from Jeff Rivas describing his employment history for the past three years; and, an affidavit explaining why it shares office space at Suite 100, 1661 Worthington Road, West Palm Beach, Florida 33409

Needless to say nobody ever heard from the lawyers again in that Castellanos decision. Why? Because they had nothing to say that would not have further undermined their scheme to defraud the country and homeowners.

If securitization was the actual game then a real group of investors would have purchased a real group of loans; but that is not what happened.

If a real group of investors had purchased a real group of loans then they, or their authorized representative would have had the right under the laws of every state to foreclose on property when the borrower ceased payments. But that isn’t what happened either. The investors didn’t buy the loans in either form or substance. They have no right to foreclose in law or inequity.

If anyone had paid money to anyone for ownership of the debts they would have paid value for the debts and be the owner of the debts and be qualified in every way to be called the mortgagee under a mortgage deed or beneficiary under a deed of trust. But that isn’t what happened either. Instead we have multiple parties fronting a crowd of rotating servicers whose sole purpose is not to allege the basic elements of debt collection and foreclosure but rather to obscure them.

If there existed any party who had paid money and had acquired the debts, then fabrication of documents and robosigning, the hallmark of the foreclosure crisis, would have been unnecessary. But it was necessary because there was nobody to sign any document declaring that they were the creditor — i.e., the party who had a financial interest in the debt such that they would lose money if the debt was not paid.

All those problems exist because the Wall Street Banks got greedy and created the holy grail of investment banking: what if you did an IPO and never had to account for the proceeds of the sale of those securities?

The real question is not why should you give homeowners a windfall over some technical problems with the paperwork; no, the real problem is why would you give the banks and all their affiliates even more revenue through foreclosure than they had already received, which was at least 10 times the principal of the amount of the loans?

The answer to the first question is that no, homeowners should not get a windfall because of technical problems with paperwork. Creditors, real creditors that is, should be able to execute corrective paperworks, affidavits and filings to correct merely technical errors.

The answer to the second question is that if the “loan transaction” was strictly a revenue deal and not a loan of money where someone would lose money if the money wasn’t being repaid, then commons sense and the law (UCC Article 9 §203) clearly stands for the proposition that nobody should be able to foreclose on a home in order to just receive revenue.

There simply must be a debt and a creditor who has paid value and owns that debt. The fact that the banks can’t come up with such a party is evidence that the law is out of whack with the innovations of Wall Street and malfeasance on Wall Street. But without a party actually getting hurt by nonpayment, why should anyone pay their mortgage?

Practice Hint: The problem is that the investment bank who advanced funds for origination or acquisition of the loan sold off everything about the loan. In the end it was left with nothing but profit.

But while selling off various attributes of the debt the investment banker never actually sold the debt, which enabled the investment banker to sell more and more “attributes” of the debt, both real and imagined, until the market was saturated with all sorts of certificates, contracts, insurance policies and bets and options organized as the securitization infrastructure.

And THAT is why we have $1 quadrillion in “nominal” value of instruments in the shadow banking market that is scaring the crap out of all central bankers who are in charge of the only actual currency which is worth a mere $75-$80 trillion.

So if people just stopped paying on their mortgage loan the securitization infrastructure built over each residential loan would collapse to something like 1/10 of 1% of the nominal value. And the next bailout would be to pension and related retirement funds.

So if you are a homeowner you are wondering the answer is yes. You were selected to pay for the wrongdoing of investment banks and basically nobody else. And when you lose your home in foreclosure those same players are laughing because although they turned your life into misery they just made another $300,000 in INCOME.


How to Access Visual and Audio Materials from Free Forensic Audit Seminar on August 2, 2019

So I think I have done this right. My apologies for people who did not see the visual presentation of the PowerPoint presentation. I am still trying to figure out what went wrong.

In the meantime you can download the PPT or PDF Visual PResentation and download the audio file from the presentation and, as requested by many, the outline of   what was contained on the audio-visual presentation. There is no requirement that you had attended the seminar in order to download, listen and see.

You can download those files by going to a folder anmed “Free Forensic Audit Seminar 8-2-19” on in the account of GTC Honors, Inc. by clicking on the following link:


My suggestion is that you

  • first download the pdf version of the PowerPoint Presentation
  • then download the audio version
  • then download the written outline

When reviewing these materials you might want to print out the written outline on which you can add your own notes.

In order to experience the presentation as it was, first launch the visual presentation on your screen and then start the audio. You will need to advance by hand each slide.




Get out your pen! Write comments to CFPB!

The Consumer Financial Protection Board (CFPB) is considering rule changes that might negatively impact consumers. Unless a substantial number of consumers write in with specific comments, there will be further dilution of both the authority of the CFPB and its enforcement of even the most basic aspects of consumer protection.

To register your comment go to

Write a comment to CFPB

Here’s what I wrote:

CFPB rules should use accounting rules as promulgated by the Financial Accounting Standards Board and the American Institute of Certified Public Accountants.

Specifically I refer to two things. (1) Collection of money as revenue is not the collection of a debt which is an asset and (2) debt collectors and putative creditors must be required to provide proof that they are the owner of the debt, to wit: that they have the subject debt reported on their financial statements as an asset and that they have acquired the debt through payment of money or other consideration.

Parties seeking money by self-describing as debt-collectors should be barred from doing so and should incur substantial liability if they are seeking revenue instead of debt collection. If any party seeks to collect money or force the sale of property to obtain money for the sole purpose of generating revenue the CFPB should impose sanctions.

Any party seeking or threatening to foreclose on property pursuant to a security instrument (mortgage or deed of trust) must establish that the security instrument is (a) still legally existent (e.g., not subject to TILA Rescission) and (b) that such claiming party has paid value for the debt and currently owns the debt as its own asset — or, provide proof that it’s acting under specific identified authority from a specific identified third party who has paid value for the debt and currently owns the debt as its own asset.

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