Servicers are Not Servicers: Their Reports Are Not Business Records

Since the reports presented in court are generally NOT made in the ordinary course of the “servicer’s” business they are inadmissible hearsay. 

By now it should come as no surprise that companies like Ocwen et al claim to be servicers but do not actually perform any “servicing” work. We all know what that means. A servicer is a company that is the bookkeeper for someone else. So they collect payments, correspond with the customer, and forward or deposit the payments for their principal in a relationship that can only be defined as an agency relationship.

When they go to court, the servicer designates a witness who is either the custodian of records who someone familiar with the actual records. Of course that never happens in foreclosures. The person who appears in court barely works for the servicer, is generally an “independent contractor” operating out of their living room, and has only one job — testifying in court.

In court, they produce a report in which they assert that the entries made on that report were made by someone familiar with an actual transaction at or near the time of that transaction. They present that report as the payment history but not as the ledger of the designated claimant, which would show the establishment of the debt on an actual accounting ledger and receipt of payments reducing the amount of the receivable.

There are several problems with this scenario but those who are not actually familiar with basic double-entry bookkeeping and accounting or auditing will always miss the mark.

The problem is that what is produced in court is a report, not an accounting ledger and that even if the named designated claimant were to come forward (something they will NEVER do) and say that the payment history is part of their general ledger, it isn’t the entire ledger which would show all transactions starting with the origination and ending with the last day any receipt or disbursement was made.

The objection to the admission of the Payment HIstory into evidence as a business record would be that it is not the entire record or even a report of the entire account, which would show ALL receipts and ALL disbursements.

Second, even if the payment history were to show the disbursement to a particular creditor (never will happen) it does not show the reduction of the claimed debt on the ledger of one claimed to own the debt for purposes of enforcement.

But here is the real problem. Servicers generally do not collect payments, so they can hardly produce a witness or person who made a bookkeeping or accounting entry on any record of receipt of payments. This happens because generally all payments are made to an address bearing the name of the servicer but totally controlled by a third party vendor who in turn makes deposits, not into a depository account owned by the servicer but rather an account owned or controlled by an investment bank who is not the owner of the debt.

While sometimes you can make some headway at trial in revealing the utter lack of any knowledge, even hearsay, on the part of the witness, it is far better to do so in discovery.

So you might want to ask for a description and production of the lockbox contract or perhaps something more specific like “JUNIOR PRIORITY INTERCREDITOR AGREEMENT  among  XYZ as the Borrower, the other Grantors party hereto,   ABC BANK, as First Priority Representative for the First Lien Credit Agreement Secured Parties,  DEF TRUST, NATIONAL ASSOCIATION, as Second Lien Collateral Agent  and  each additional Representative from time to time party hereto dated as of the ___ day of _____, 20xx.”

The key question you want to be answered is whether the lockbox deal (frequently with Black Knight) represents the duties of the lockbox operator to the “Servicer” or some third party who has no interest in the homeowner transaction which is always represented as a “loan” but which is most likely not a “loan” as described elsewhere on this blog.

If, as I suggest, the “Servicer” does not and cannot touch any of the money, then its record is not really a record at all. Nor is it admissible in evidence. The truth is, as we have previously disclosed, that the lockbox operator in conjunction with CoreLogic or some such company physically controls all receipts and deposits of those receipts into a financial account that is not owned by, known by, or managed by the “servicer.” The “Payment History” is therefore produced by access to a third-party computer server that is not owned, operated or maintained by the self-proclaimed servicer.

In short, the witness is not from the company who made the entries or created the record that is a “Payment History.” The only witness that is competent to testify is one who employed by and has knowledge of the practices of the third-party vendor.

The reason this is not done is that the investment banks don’t want to put such a witness on these and because that same witness would need to answer the essential question: who gets the money from payments and who will get the money from this foreclosure. If it is not the named designated claimant then the wrong Plaintiff or beneficiary has been named.

Since the reports presented in court are generally NOT made in the ordinary course of the “servicer’s” business they are inadmissible hearsay.

“Out-of-court statements offered to prove the truth of the matter asserted are inadmissible unless the statements fall under a recognized exception to the rule against hearsay. See § 90.802, Fla. Stat. (2004). ” Yisrael v. State, 993 So. 2d 952, 955 (Fla. 2008)
Florida’s business-records exception appears in section 90.803(6)(a), Florida Statutes (2004). To secure admissibility under this exception, the proponent must show that (1) the record was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) that it was a regular practice of that business to make such a record. See, e.g., Jackson v. State738 So.2d 382, 386 (Fla. 4th DCA 1999). Additionally, the proponent is required to present this information in one of three formats. First, the proponent may take the traditional route, which requires that a records custodian take the stand and testify under oath to the predicate requirements. See § 90.803(6)(a), Fla. Stat. (2004). Second, the parties may stipulate to the admissibility of a document as a business record. See, e.g., Kelly v. State Farm Mut. Auto. Ins.720 So.2d 1145, 1146 (Fla. 5th DCA 1998) (holding that the parties stipulated to the admissibility of medical records under the business-records exception); but see Gordon v. State787 So.2d 892, 894 (Fla. 4th DCA 2001) (holding that the State and defense counsel’s stipulation regarding the defendant’s release date was not sufficient to relieve the State of its burden to prove the defendant’s release date by a preponderance of the evidence). Third and finally, since July 1, 2003, the proponent has been able to establish the business-records predicate through a certification or declaration that complies with sections 90.803(6)(c) and 90.902(11), Florida Statutes (2004). The certification — under penalty of perjury — must state that the record:
(a) Was made at or near the time of the occurrence of the matters set forth by, or from information transmitted by, a person having knowledge of those matters;
(b) Was kept in the course of the regularly conducted activity; and
(c) Was made as a regular practice in the course of the regularly conducted activity[.]
§ 90.902(11)(a)-(c), Fla. Stat. (2004).
Yisrael v. State, 993 So. 2d 952, 956-57 (Fla. 2008)
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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

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

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE ORDER 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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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

Should States Be Obligated to Assign and Pay for Counsel to Defend Foreclosures?

By presuming that virtually all defenses to foreclosures, other than payment, are without merit and futile, and by administering discipline or injunctions to lawyers who prove otherwise, the state has created a gap that only the state or Federal government can fill.
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They must assign and train, if necessary, competent trial counsel or represent homeowners who are faced with the administration, collection to the enforcement of alleged debts by securitization players.
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If they fail to do so, any homeowner faced with foreclosure who is unable to find competent trial counsel (i.e., an attorney with trial experience who accepts an engagement to win the case) is being deprived of access to courts, due process, equal protection and right to counsel. — Neil F Garfield. March 10, 2021 http://www.livinglies.me
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One true and accurate statement for homeowners is that you won’t find a lawyer willing to accept an engagement that is predicated on winning a case involving claims to “foreclose” by parties who have no right to assert such claims much less get money for doing so. This is true despite the obvious need for trial counsel who can navigate the rules of court, the rules of evidence, conduct discovery to unveil the truth about the existence, ownership, and authority over the alleged debt.
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The problem faced by homeowners is nothing less than an unconstitutional deprivation of the right to counsel and right to be represented in court. This problem has been created primarily by the chilling effect on the access of counsel caused by disciplinary or court rulings that have chased successful foreclosure defense lawyers out of the marketplace leaving homeowners with a choice that violates equal protection.
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I can cite dozens of cases besides the recent revocation of the state license of Gary Victor Dubin in Hawaii based upon an application in which a checkbox was overlooked. There is also the FTC who has used its overwhelming power to ban lawyers from ever offering services to homeowners seeking to defend foreclosures. The basis for all such civil and disciplinary actions is the assumption that any such defense is merely dilatory, pointless, and futile. From that arises the assumption that the lawyer is collecting fees on an engagement that should never have been started. Don’t ask me — ask the FTC, ask the state bar associations if that is not exactly how they view it.
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The result is that attorneys were disciplined, barred, or otherwise threatened out of the marketplace in which they could have offered their services as foreclosure defense counsel. The problem is that the main complaint is that these trial lawyers were extremely successful at defeating foreclosure claims that the establishment (i.e., the state) considered to be vital for the free flow of commerce.
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For lawyers, it is a choice between high risk of disciplinary or legal (FTC) action or retreating to the background so they don’t appear as attorneys of record. That leaves them out (maybe) of court and out of the crosshairs of any disciplinary panel or FTC action. For homeowners, they either litigate pro se or quit their homes in the face of a claim by a party who at best is a virtual creditor whose status is not recognized by law.
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So I pose this question: Does every state have the obligation to assign and maybe pay for the legal defense of homeowners who are facing the civil equivalent of capital punishment (i.e., loss of their homestead and largest investment)?
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I say the answer is yes. Having chased out all hope of effective representation by competent trial counsel, the state is obligated to fill in the gap or face the question, in federal court, as to whether they are systemically depriving homeowners of their right to due process? The effect is obvious. 96% of all foreclosures end up successful because of homeowner court defaults or failure to take advantage of legal process.  But 65% of those who have effectively challenged foreclosures based upon securitization claims have been successful for the homeowner.
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Doing the math it is obvious that the situation would be far different if the 96% who do nothing because they think the situation is hopeless had effective trial counsel. We could all conclude that all such foreclosures are suspect instead of the current consensus that all defenses are not only suspect but lacking in credibility. The failure of the homeowner to articulate a valid defense is responsible for losses in the courtroom. It is not the absence of valid defenses.
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By presuming that virtually all defenses to foreclosures, other than payment, are without merit and futile, and by administering discipline or injunctions to lawyers who prove otherwise, the state and Federal government has created a gap that only the state or Federal government can fill. They must assign (and train, if necessary) competent trial counsel or represent homeowners who are faced with the administration, collection to the enforcement of alleged debts by securitization players. If they fail to do so, any homeowner faced with foreclosure who is unable to find competent trial counsel (i.e., an attorney with trial experience who accepts an engagement to win the case) is being deprived of access to courts, due process, equal protection and right to counsel.
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Of course, the other option is to analyze the cases where homeowners have won and then adapt policy, rules and preapproved pleading to require absolute assurance by the attorney and the designated claimant regarding the existence of a loan account receivable on the accounting ledger of the claimant, the ownership of the account receivable and other authority to administer, collect and enforce it.
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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

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

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

What You can Do About The Difficulty With Finding and Hiring an Attorney

It’s not difficult to identify the beneficiary of this phenomenon: it’s the Wall Street investment banks that are falsely claiming to have securitized transactions with homeowners that are falsely represented and labeled as loans. They get the money proceeds from forced sales of homesteads and they don’t distribute it to anyone who paid value for entry into the securitization scheme. It is pure profit.
We are talking about the most serious subject relating to illegal foreclosures. The ability to hire an attorney. Mortgages are very complex instruments and securitization claims make it worse.
65% of those who persist in litigation succeed as long as they remain focused on the evidentiary requirements for proving the existence, ownership and authority over the debt. You might think the debt exists and so you might be afraid to ask for evidence supporting the existence of the debt. But I will tell you that most lawyers who are unafraid to test every aspect of the case against their client homeowner are successful.
The problem, as most people have come to realize, is that finding a lawyer willing to accept that engagement is getting harder and harder. Foreclosure defense attorneys are literally an endangered species.
65% is a great statistic for many trial lawyers who like to have a track record of winning. And there are plenty of homeowners who sufficient cash resources to pay for an attorney.
So why is it so hard to find a lawyer willing to take the case? Where are the lawyers who once flooded the marketplace offering foreclosure defense services? Why are most of the successful ones gone? What happened to them?
In 2008 I presented my first Garfield Continuum seminar and around 150 lawyers from all over the country showed up, paying about $1,000 each for entry into the seminar. About a dozen of them went out and became millionaires when I outlined the hub and spoke business plan of servicing homeowners in this dress.
I presented many other more detailed seminars on evidence and expert witnesses, and discovery attended by lawyers who were paying top dollar and most of them went out and started winning cases about 80% of the time. The pro se litigants who attended didn’t fare as well but most of them were able to position themselves for a modification that was satisfactory to them even if it was giving up a lot of equity.
The crazy thing is that one by one the lawyers who were truly successful in court and who forced settlements that were highly beneficial to homeowners were gradually weeded out by targeted disciplinary actions by bar associations and by targeted legal actions by the Federal Trade Commission and state AG offices.  And they were subjected to intense hostility from the bench.
Many of those lawyers are gone and most other lawyers are afraid to take such cases because they know they will be targeted by unwarranted disciplinary actions and punishment or overextended civil actions brought by the FTC and state AG’s.
With my retirement from active court appearances for health reasons, there is virtually nobody who is willing to take up these cases, actively litigate them and successfully challenge the ability of the designated creditor to prove with evidence that the loan account exists on an accounting ledger, that it is owned by the designated claimant and that the designated claimant had the authority to grant servicing or agency powers to anyone for administration, collection or enforcement of scheduled payments.
It’s not just that the deck is stacked against the merits of the defense. Lawyers take cases like that all the time. It’s that lawyers are risking their career if they are successful in litigating a foreclosure case for the homeowner. As a result, homeowners are denied due process, access to courts, and the continued peaceful enjoyment and title to their property.  They and their lawyers are forced into doing modifications instead of litigating the case to a successful conclusion. Sometimes they are forced to accept cash for keys.
It is now extremely difficult to find a lawyer who will accept an engagement to defend a foreclosure regardless of the financial ability of the prospective client to pay fees. The unconstitutional chilling effect on lawyers and homeowners is obvious. Lawyers and homeowners have been chased away from defending foreclosure claims that are unfounded, illegal, and fraudulent. The investment banks are winning by attrition, not merit.
And the reason is simple: lawyers who are consistently successful at defending foreclosures are targeted with disciplinary actions, punishments and civil actions that either directly or indirectly bar them from ever representing or soliciting a client for foreclosure defense litigation.
It’s not difficult to identify the beneficiary of this phenomenon: it’s the Wall Street investment banks that are falsely claiming to have securitized transactions with homeowners that are falsely represented and labeled as loans. They get the money proceeds from forced sales of homesteads and they don’t distribute it to anyone who paid value for entry into the securitization scheme. It is pure profit.
I have been a litigator for 45 years. During that time I have also written workbooks on and given CLE seminars to lawyers across the country on various topics relating to business litigation foreclosure, evidence, discovery and expert testimony.
I have never seen a situation like this, created entirely by overreaching of state bar grievance procedures and civil actions brought by the Federal Trade Commission and State AG offices under cover of preventing fraudulent “foreclosure rescue” scams. They have even come after me, repeatedly in multiple states but because of my experience in defending administrative actions, they were largely unsuccessful.
The establishment is firmly committed to policies that chase away any lawyers who seek to win foreclosure cases, if they represent homeowners \. They are equally firmly committed to supporting the foreclosure attorneys who are representing nonexistent clients with whom they have no contact, on nonexistent claims.
I personally know of dozens of lawyers who were making a name for themselves winning one case after another for homeowners, only to be swept off the field by one of these targeted administrative or civil actions. And yet I have seen not one such action directed at one lawyer or law firm where the final judgment specifically stated there was no claim. I personally was lead counsel in two of those cases.
We have had a 50 state settlement in which there was either direct or tacit admission that the documents being used were fake. forged and contained false information, even though they were recorded.
We have had hundreds of settlements with “investors” who thought they were buying shares of loan portfolios that never existed. And yet the lawyers who are hired to enforce scheduled payments from those nonexistent loan portfolios are “protected” by the doctrine of litigation immunity.
But when some lawyer starts winning cases on mostly the same premises as the investor lawsuits — challenging the very nature of the transaction that is presented by investment banks, he or she finds themselves in a maelstrom of threats, warnings, disciplinary charges, punishments that far exceed anything relevant to their supposed offense. And they face threats from the bench because the trial judge is unaware that the entire foreclosure scheme is a ruse.
Those lawyers are the heroes of the judicial system. They took on the defense of homeowners who were bewildered by what happened to their huge (and sometimes only) investment. Many lawyers racked up multiple victories not only in trial courts but in appellate courts. Still, they were treated as some sort of threat to society.
THE ASTEROID LIE: What was the real threat? The real threat was not real. It is a threat from the investment banks that if homeowners defeat foreclosures, the entire securitization infrastructure collapses thereby freezing lending and all commercial activity. This, they threatened, would end modern civilization.
The translation of that is that even if the scheme is not legal, it must be maintained or else. So instead of securitization players and foreclosure players being threatened with prosecutions for creating, promoting, and enforcing illegal activity, it is the homeowner and the homeowner’s attorney that is threatened with prosecution — all as part of a witting or unwitting participation in the PR machine created by the Wall Street investment banks.
The losers are millions of homeowners denied adequate disclosure as to their rights, denied due process, denied access of courts, denied equal protection, and the same for the foreclosure defense attorneys who simply used their skills in court to defeat the claim because there was no claim.
So here is my ten-point plan for the things you can personally do about this situation.
  1. File complaints with and write to the CFPB to encourage them to get involved in the disclosure that most of the claims are illegal,  fraudulent foreclosures based upon nonexistent loan accounts on behalf of nonexistent entities.
  2. File complaints with and write to the State AG to encourage them to get involved in the disclosure that most of the claims are illegal,  fraudulent foreclosures based upon nonexistent loan accounts on behalf of nonexistent entities. AG is an elected office. Get together with other homeowners and file petitions.
  3. Pepper the press with your own releases and questions and pleas for help.
  4. Walk into a lawyer’s office fully prepared to present a coherent defensive strategy that is backed by fact and law. Pay for the initial consult.
  5. Don’t ask any lawyer to take your case on contingency. It is counterproductive to even ask.
  6. Get involved with political and legal action groups. But be aware of scams. If they are asking for a lot of money upfront to join and it isn’t a lawyer, it is probably a scam.
  7. Get involved in mass joinder efforts and class action lawsuits.
  8. If you are pro se get help even from a lawyer who doesn’t think you can win. Don’t ask for proof in discovery. Decide for yourself what is proof and then ask for that thing specifically, like the wire transfer receipt. That means that you have to know what you are talking about and not expect the judge to fill in the blanks that you create. As the lawyer sees you progressing in litigation he or she might take another look.
  9. Always focus on the three elements of every foreclosure case: the existence of the loan account at the time of foreclosure, ownership of that account, and the authority as the grantor, to grant agency powers over the account by the owner of the loan receivable account — if it exists.
  10. GET TOGETHER WITH OTHER HOMEOWNERS AND PETITION THE SUPREME COURT OF YOUR STATE TO CHANGE BOTH THE CURRENT RULES AND THE WAY THE CURRENT RULES ARE APPLIED.
The more attention you bring to this, the more likely it is that someone will take another look at their assumptions. If you don’t bring attention to it, they have no reason to change.
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

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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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. In  the meanwhile you can order any of the following:
CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

Tonight! Foreclosure Defensive Strategies for High and Low Value Properties 3PM PDT 6PM EDT

Thursdays LIVE! Click into the WEST COAST Neil Garfield Show

with Charles Marshall, Esq.

Or call in at (347) 850-1260, 3PM Pacific,

6pm Eastern Thursdays

On The Show today Host Charles Marshall will delve into the latest trends in the Covid-19 era, parsing out how Covid policy at all levels is still having a major impact on

– foreclosure lawsuits, both non-judicial from the homeowners’ side, and judicial lawsuits against homeowners;

– BK practice and procedure, especially when involving hi-value properties;

– UD procedure, with a convergence of trends to go forward with UDs, especially in California.

You Got the Money, Right? So why are you telling me it wasn’t a loan?

what did the homeowner get in exchange for executing the note and mortgage? 

The answer is not a loan because there was no loan at the conclusion of the transaction cycle. The answer must be that either the homeowner was investing in the securities scheme or was not getting anything for the note and mortgage. 

For many lawyers and judges, especially in bankruptcy court that is the only relevant question. After that everything else is obvious. But truth be told, they’re only asking that question because they have already decided everything including the “fact” that you received the money. But just because everyone is asking the same question doesn’t mean that they are asking the right question. In law, as it is practiced in a courtroom the right question presupposes nothing.

The right question is what is the contract? To answer that in the context of transactions with homeowners by securitization players you need to back up to the start. In order to decide the existence and terms of the contract, you must first determine contractual intent. And the fact that one side means or intends something does not mean the other side has agreed or has the same intent.

Who were the parties transacting business with the homeowners and what was their intent? The answer is that there is a long line of players ending usually in a thinly capitalized virtual nonentity or actual nonentity acting as the originator of the transaction.

The facts show that at the end of the transaction cycle,

  • there is no lender,

  • there are no investors who own partial shares of any obligation due from any homeowner,

  • there is no loan account receivable,

  • there is no reserve accounting for default,

  • there are no entries on any accounting ledger that reduce or increase the loan account receivable owned by anyone who paid value for the underlying alleged obligation (debt)

  • nor anyone who can trace their authority back to an owner of such an account receivable on the accounting ledger of a company keeping their records in accordance with Generally Accepted Accounting Principles.

  • Hence there was no profit in the receipt of interest payments reflected on those books of account. 

Where is the loan? The facts show that payment to or on half of the homeowner was therefore something other than a loan.

[PRACTICE HINT: ALL OF THE ABOVE CAN BE ESTABLISHED WITH CERTAINTY OR BY NEGATIVE INFERENCE WHEN THE OPPOSITION REFUSES TO RESPOND TO PROPER AND TIMELY FILED DISCOVERY DEMANDS IN COURT]

So if the securitization parties were not in the deal to make money from receiving interest on the payment to the homeowner, why did they give the homeowner any money at all?

The facts show that without sales of securities to investors there would have been no transactions with homeowners. Wall Street investment banks are not in the business of lending. They’re in the business of making money through the creation, issuance, sale, and trading of securities. Hold up on that assumption! I know you are thinking that the securities were shares of loans. All evidence in thousands of cases shows that not to be true; even more telling is that no lawyer from any foreclosure mill has ever alleged, asserted or argued that to be the case.

And the same facts show that the implied trust that is designated in attempts to enforce the promise made to pay back the money received by the homeowner has absolutely no interest, rights obligations or duties with respect to any payment made by a homeowner or any proceeds of a “successful” forced sale of the property.

The same facts show that but for the homeowners there would have been no sales of securities. Without those two elements securitization could not occur.

And the facts show that the only parties who maintained and expanded their financial health in the Great Recession 2008-2009 were those same investment banks. While commercial activity declined, reported revenues and profits went up for the Wall Street investment banks.

So the real question is what were the Wall Street banks paying for? Since they’re unable to show the purchase of a loan, debt, note or mortgage on their books or reported to regulators, what were they buying?

They were buying cooperation from homeowners. And homeowners gave that cooperation and that is fine. That is a valid and legal business deal. Wall Street pays the homeowner and the homeowner delivers cooperation. But that is not the end of it, because homeowners knew nothing about it. And the reason they knew nothing about it, is that they were never told — despite stringent laws and regulations requiring explicit disclosure in good faith. And the reason why nobody has been prosecuted for lending violations is that there was no loan.

Investment banks needed to get a promise to repay the money paid for cooperation. In order to do that they needed to withhold and conceal key attributes of the transaction and to lie about what was happening. So they dressed up the cooperation payment as a loan. And because a loan was what the homeowner wanted and expected, the investment banks made sure that the homeowner signed documents that were evidence of a loan transaction —even though on their own books no such transaction took place. The advance to homeowners was a cost of doing business.

Homeowners, without a single clue that they were paid money for their cooperation and with no knowledge of the lack of lending intent by any of the “originators” or their affiliates and co-venturers, started making scheduled payments without any knowledge that their money was not going to pay anyone who was reducing their debt by the amount of their payment.

So if you back it up to the point of origin where the investment banks created an infrastructure to sell a securities scheme disguised as partial ownership of loan receivable accounts, the real question becomes “You got their cooperation, didn’t you? So why should you get the money back?”

So you are left with the inescapable fact that the homeowner issued a note and then a mortgage to secure payments as promised on the face of the note. And that is the question — what did the homeowner get in exchange for executing the note and mortgage? 

The answer is not a loan because there was no loan at the conclusion of the transaction cycle. The answer must be then that either the homeowner was investing in the securities scheme or was not getting anything for the note and mortgage. 

The only way that could not be true is if there was admissible evidence showing the accounting ledger of some company or entity showing the existence of entries on that ledger arising from the payment of value in exchange for ownership of the debt, note and mortgage claimed to have been legally created. That is the only thing that would reveal that the loan relationship between a borrower and a lender actually existed at least at the time of foreclosure.

As we have seen in thousands of cases no such evidence is ever preferred or presented. 

Using ordinary tools of construction of language and legal precedent it is more likely that the homeowner either received something for the issuance of the note and mortgage than that no consideration was present. By process of elimination we can only arrive at one conclusion, taking the entirety of the transaction into consideration as it occurred in the real world: the homeowner, without knowledge or consent, became an investor into the securities scheme.

That leaves only one remaining question: Was the payment that the homeowner received enough? Since it was never subject to knowledge, consent or bargaining, that is up to a court to decide.

  • If it wasn’t enough then it is the securitization players that owe the homeowner money, not the current paradigm.
  • If it was too much then maybe some portion of the amount set forth on the note remains as a liability.
  • And if it was just right, then there would be no reason to have executed the note and mortgage at all.
  • Lastly, if nobody asks the court to decide the note becomes an unliquidated amount upon which no judgment can be entered.
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.

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*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

 

Basic Premise in Foreclosure Defense: Documents Are Not Events

The objective in foreclosure litigation is not to prove something. The objective is to prevent the claimant from proving anything.

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The fundamental error of most homeowners, lawyers, and frankly judges, is the failure to distinguish between the real world and the fictional world portrayed by documents in front of them. A novel is a work of fiction. It can achieve credibility by referring to things that might have actually happened in the reader’s life at some time in some place. But the characters and events are all fictional. And even if you add notarized and recorded documents and affidavits to the mix saying that the events happened it doesn’t change the fact that no events in the real world occurred as described in the novel.
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Perhaps more importantly, once apprised that the information presented to the court is a novel and not related to anything that happened in the real world, no court has the right to say otherwise (unless there is conflicting evidence on whether the events occurred).
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You need to get clear on the difference between a document and a transaction. Many if not most people treat them as though they are one and the same. They are not. A document is only a piece of paper on which there is writing that refers to an event in the real world that supposedly occurred between two or more parties. If there is no event, no amount of writing can cure that — even with testimony, certification, or sworn recorded documents.
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Foreclosure is about recovering on a loss resulting from an unpaid debt owed to the claimant. If the claimant has not paid for the debt in the real world, then fabricated documents will never change that and the claimant has no claim.
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But a fabricated document does change the burden of proof unless you can show that the document is facially invalid. The objective in foreclosure litigation is not to prove something. The objective is to prevent the claimant from proving anything. Every presumption arising out of presumably facially valid documents is rebuttable. Those presumptions can be rebutted by either presenting contrary evidence (which you don’t have) or contesting the facts in discovery and asking for the actual evidence (which they don’t have, even if you fear that they do have it.)
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The proactive response to their stonewalling discovery would be to ask the court to rule on a negative inference — that the debt does not exist or at least is not owned by the claimant. But this can only occur after you have gone through a few rounds of motions to compel responses to discovery and a motion for sanctions.
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A motion in limine might achieve the same result by barring evidence of ownership or authority over the alleged debt or even that the debt exists since they refused to show corroborating evidence (proof purchase, accounting ledger) that value was paid as a condition precedent to enforcement as per the state adoption of Article 9 §203 UCC verbatim.
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So the procedural issue in virtually all cases involving claims of foreclosure by people and companies who claim the existence of the debt, the ownership of the debt, and the authority granted by the owner of the debt is how to get into position to demand discovery in a proper and timely fashion. The second issue often missed is the follow-up to discovery. Some erroneously think that failure to answer is enough to turn the tide. It isn’t. A motion to compel must be filed, heard and granted. Most often such motions must be filed more than once and then followed by a motion for sanctions — which also must be filed, heard and granted.
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[PRACTICE HINT:  I have come to the conclusion that the presentation (reports are most effective when pursuing a motion to compel appropriate responses to discovery demands. It is only in discovery that the court is required to allow fishing expeditions that are relevant to the core issues in dispute. The forensic report can be used as the basis for why you are demanding this discovery — i.e., you want to test out their claim to legal presumptions arising from their documents.]
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

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

Our Ignorance Has Created a System That Chills Homeowner Access to Courts and Attorneys

The real problem is that stockbrokers masquerading as investment banks have committed the greatest economic crime in human history and have managed to cover it up by huge investments into the system wherein they control the narrative. Where everyone is ignorant of the complexities of Wall Street finance, they look to Wall Street to explain the events. Instead, they should be asking about the facts supporting the questions at hand: If there is an unpaid debt that you are trying to cover, then let’s see the accounting ledger showing the loan account receivable and the debits and credits to that account.
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[Practice HInt: Don’t accept the payment history as that ledger or account receivable. It isn’t, unless a witness from the designated claimant or plaintiff with personal knowledge, can say with certainty that the accounts were outsourced to the servicer. They aren’t.  While there is an outsource it is to third-party vendors and not the self-proclaimed servicer. It is also hearsay on hearsay when you think about it and lacking in foundation unless you blindly assume that the foundation exists. The payment history does NOT start with the establishment of an account receivable nor does it end with payment to a legal creditor. Those elements are always missing. ]
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As a direct result, every judge, regulator, lawmaker, and even homeowners and most attorneys believe at the outset that a debt exists and that it is owned by the Plaintiff. Any defense is seen as “wiggling” through technicalities. Any homeowner victory is a bone thrown to due process and equal protection for PR reasons.
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The questions should at least be asked why it was “necessary” to falsify millions of documents if there was an actual transaction that met the required attributes of a loan transaction and whether, even if the loan had occurred, if it was still a loan or a debt at the time of the foreclosure. The question should be asked why a custodian of the accounting ledger of the designated creditor does not produce testimony or affidavit along with the ledger like in the old days.
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The reason the courts, lawmakers, and regulators were so amenable to demands or influence to be used against good foreclosure defense lawyers who might expose the reality, is that the Wall Street entities had invested literally billions of dollars to push the message that the loans were real, the debts were real and the designated plaintiff, even if not exactly conforming to law, was a proper vehicle to give relief to the owners of an unpaid debt. This eventual recompense is assumed to exist even though the “real” creditors are not known.
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What would have happened if successful efforts had resulted in a growing awareness that the use of a designated creditor was unlawful and was covering a larger scheme where the profits, already in extremis, were only be augmented by foreclosures instead of debts being paid. How many documents would have retained the presumption of authenticity and validity? And how many lawyers would have been disciplined within the context of an assumption that they were merely weaponizing the system against itself? Take away that assumption and you see the lawyers in a very different light (and their clients).
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As seen from “above” such lawyers are not real attorneys because they are bottom feeders who take money from the economically depressed in the vain hope of retaining the homestead. They should be seen as heroic and leading an important fight against ignorance and greed. As such, minor transgressions, even if proven, would lead to minor discipline. Instead, many lawyers who have practiced foreclosure defense have been disciplined and otherwise barred or discouraged from ever taking a case in which they could defend a foreclosure.
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This is why few homeowners are able to reach a lawyer who knows enough to challenge the foreclosure on its merits, contesting the basic premise of even whether the proceeding qualifies as a foreclosure. Few homeowners are able to retain a lawyer, even if they have the means, who will attack the documents and the money trail, and ask, with follow up, “who is the owner of my alleged debt?”
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Thus Wall Steet is able to create a fictitious self-fulfilling prophecy. They are in full control and they use it. So when some lawyer comes along who starts winning cases regularly causing some judges to wonder why the “banks” can’t get it right, they MUST attack. But like everything else in the world of smoke and mirrors created by Wall Street bookrunners, they do it through intermediaries like the Bar association, and then the State Supreme Court which can’t be bothered and which rubber stamps the “prosecution” (sans due process and equal protection) for disciplinary violations.
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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

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

What to do about Court bias

Bias is a state of mind. Everone has a mind and if they are living they have a state of mind. So every judge has some biases. In our system of court procedure, bias is ONLY important to impeach a witness or to ask the trial judge to recuse themselves — or beyond that, file a motion to remove for cause which would be heard by a fellow memeber of the bench. Shouting bias after the case is over is useless because any such objection must be raised at the commencement of the proceding or else it is waived. And that is just one more reason why going into court without a strategic plan and tactics is a recipe for disaster.
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I am in constant “conflict” with my supporters who continue to rail about bias from the bench. They are right, it is there, but their insistence that any judge who has investments that could be affected by the decision of the court in a foreclosure case is probably wrong — for both procedural and substantive reasons. I might add that I know a lot of judges and not one of them takes any joy in entering orders that permit a foreclosure proceeding to go forward to the forced sale of homestead property.
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First, I agree that a judge with financial interests in the outcome of litigation should recuse themselves or be removed for cause. So that much I agree. And I agree that in some cases judges are acutely aware that they have direct interests in both the stocks of investment banks and their “mortgage bonds” through their retirement programs. But without actually being able to inquire about these issues the leap toward disqualification seems to be unfounded in terms of the legal process. Unlike the #MeToo movement, an accusation is not enough. The fact that the investment exists is not proof that the investment is in the mind of the judge, is material to them or will defect their decision. You need to do more if you really want to challenge them.
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There are two challenges. One is a motion to recuse which is heard by the same trial judge who is hearing the motion and the other is a motion to remove for cause which is heard by another judge. In both cases, presentation of evidence is required in order to survive denial or dismissal of the claim. I probably don’t need to remind anyone that getting one judge to agree that a fellow member of the bench should e removed from a case is an extremely high bar. We have a system and that is how it works.
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I don’t think (comments invited) that there is any impediment to questioning a judge about his financial holdings and whether he can be fair and impartial in the case at hand. It just isn’t done. I think it is time we start, and just the act of asking will awaken the judge to the potential problem which I can assure you, none of them see. But it is a bold move and doing your homework and being prepared to argue the issue is vital. But don’t do it without specifics in the form of evidence that is admissible. The system does not tolerate such motions on any case, civil or criminal.
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The interesting thing is that if the judge refuses to allow the hearing to proceed, you could argue that the refusal is the equivalent of taking the 5th amendment as a shield. In a civil action, like foreclosure, that could raise negative inferences. You will find yourself in plenty of hot water but it might be worth it.  It is a rare judge who won’t take it personally. BUT, if you don’t do it timely — at the very start of legal proceedings, you have waived it I think in all U.S. jurisdictions — unless you promptly bring it to the court’s attention after the discovery of evidence that you could not have obtained before. Like many such motions, timing is everything.
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Second, I think that very few judges actually make the connection between their retirement account and the case of foreclosure. I have spoken with many of them and the ones that have any reasonable degree of financial sophistication basically think that one foreclosure is not going to make any difference to their financial condition.
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Third, with a couple of very rare historical exceptions, no judge accepts the premise that any of the foreclosures are illegal, immoral or criminal. Hence no judge actually sees a defense narrative in one case as potentially destroying the entire infrastructure that investment banks falsely claim as a securitization scheme. Any perceived variation from any rule is perceived as damnum absque injuria — an injury with no harm. And that is why I have been harping on the same point since 2006 — do not admit anything, including the idea that the proceeding invoked is a foreclosure. It isn’t a foreclosure if there is no debt being enforced.
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Thus the way to win a case is not to attack securitization in general but rather to show that the claimant that is named as Plaintiff in judicial actions or beneficiary in nonjudicial actions does not have or will not show confirmation that the debt exists, and that it is owned by the claimant who has full authority to administer, collect and enforce it. Knowledge of the reality of the pan of creation, issuance and selling securities is helpful in deciding on a strategy for a case but it rarely is the deciding factor in any of the cases won by homeowners.
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

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

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. In  the meanwhile you can order any of the following:
CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

The note is evidence of the debt and the terms of repayment. It is not the debt itself

The only way that the note can be used in any claim for administration, collection or enforcement is if it is evidence of an existing underlying obligation. It is the underlying transaction, not the note, that creates the liability of the maker of the note. If it were otherwise nobody could trust any note and they would all be discounted 99%. Recipients of the note must be extremely confident that the maker will not disclaim the transaction or the liability.

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The only exception to that immutable rule is a provision in the UCC that says that if the original note has been delivered to a buyer who paid value for it, they might be able to enforce it against the maker (homeowner) of the note. The three conditions are (1) that the payment was to the owner of the note (i.e. one who had paid value for it to the originator of the real-world transaction, or legal successor of the originator) (2) the buyer was unaware of the maker’s defenses and (3) the buyer was acting in good faith.
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That said, presentation of the original note or a copy with an affidavit of authenticity is sufficient to plead a case even when the underlying obligation has been eliminated or extinguished and nobody paid for it. If the pleading is unopposed, judgment will be rendered to the pleader.

Tonight! Success Dooms Foreclosure Defense Lawyers: Homeowners Are Denied Access to the Courts. What can homeowners do about it? 6PM EST 3PM PST 1PM HST

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3PM PST, 1PM HST

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It is now virtually impossible to find a lawyer who will accept an engagement to defend a foreclosure regardless of the financial ability of the prospective client to pay fees. The unconstitutional chilling effect on lawyers and homeowners is obvious. Lawyers and homeowners have been chased away from defending foreclosure claims that are unfounded, illegal and fraudulent. Tonight we talk about what to do about it.

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And the reason is simple: lawyers who are consistently successful at defending foreclosures are targeted with disciplinary actions, punishments and civil actions that either directly or indirectly bar them from ever representing or soliciting a client for foreclosure defense litigation. It’s not difficult to identify the beneficiary of this phenomenon: it’s the Wall Street investment banks that are falsely claiming to have securitized transactions with homeowners that are falsely represented and labeled as loans. They get the money proceeds from forced sales of homesteads and they don’t distribute it to anyone who paid value for entry into the securitization scheme.
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I have been a litigator for 45 years. During that time I have also written workbooks on and given CLE seminars to lawyers across the country on various topics relating to business litigation foreclosure, evidence, discovery and expert testimony.
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I have never seen a situation like this, created entirely by overreaching of state bar grievance procedures and civil actions brought by the Federal Trade Commission and State AG offices under cover of preventing fraudulent “foreclosure rescue” scams. They have even come after me, repeatedly but because of my experience in defending administrative actions, they were largely unsuccessful.
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The establishment is firmly committed to policies that chase away any lawyers or homeowners who seek to win foreclosure cases. The same establishment is equally firmly committed to supporting the foreclosure attorneys who are representing nonexistent clients with whom they have no contact, on nonexistent claims.
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I personally know of dozens of lawyers who were making a name for themselves winning one case after another for homeowners, only to be swept off the field by one of these targeted administrative or civil actions. And yet I have seen not one such action directed at one lawyer or one law firm where the final judgment specifically and expressly stated there was no claim. I personally was lead counsel in two of those cases.
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The losers are millions of homeowners denied adequate disclosure as to their rights, denied due process, denied access of courts, denied equal protection, and the same for the foreclosure defense attorneys who simply used their skills in court to defeat the claim because there was no claim.

How Homeowners Can Win On Appeal in Foreclosure Cases

The bottom line in trial court actions defending foreclosures is that generally whatever you’re thinking about your defense, you need a little more than that. On Appeal, you need a lot more than what you are supposing will present the foundation for an opinion that reverses the trial court.

I often hear lawyers who are losing in trial court say something like “at least we got it on the record,” implying that on appeal the result will or could be different. That is incorrect. Unless you are talking about procedural error, the fact that you managed to have your evidence or your argument placed in the court record is the opposite of a good foundation for an appeal.

The first thing you should know is that you must identify the order from which you are appealing. “We don’t like this ruling” is not a basis for appeal. You must point to a specific order by date and name the judge. And you must do that in a notice of appeal that is properly and timely filed. Failure to do so is the first reason why homeowners fail on appeal. From the point of view of the appellate court, your appeal didn’t succeed because you didn’t appeal. Without a timely filed notice of appeal in proper form and properly filed and served, you have not appealed. And it is universally true that there are no excuses accepted as to time limits.

Another way to waive your rights on appeal is a failure to produce a court record. It does not automatically go to the appeal court in most jurisdictions. Specific arrangements and payments must be made to the clerk of the trial court before the record is prepared, indexed, and sent to the clerk of the appellate court. In your brief, you must accurately cite specific items or transcripts (Page and lines) in the court record. there are ways to supplement the court record but that goes beyond the scope of this article.

A timely filed Motion for Rehearing generally tolls the time for the judgment to become effective and also tolls the time for filing the notice of appeal, but you should check both local rules and local counsel to be sure of that. Orders that grant Motions for Rehearing are usually on the endangered species list. Motions for reconsideration do not have the same effect as a Motion for Rehearing but in some states, the two terms are reversed.

An appeal is not an opportunity to try the case again. An appeal is strictly limited to the issue of whether the trial judge committed reversible error. You should also remember that just because the trial judge committed some sort of error, that is not necessarily grounds for reversal. Broadly speaking, reversible error means some procedural error that caused the trial court to arrive at an unauthorized decision or conclusion. The fact that the judges on the appellate panel might have decided the case differently is never grounds for reversal. But if the outcome offends the sensibilities of the majority of judges on the panel, they are more likely to find a way to find reversible error.

The most likely win on appeal occurs when the trial judge grants summary judgment. Trial courts almost never get reversed for refusing to grant summary judgment. But they often get reversed for granting summary judgment, a fact that is often pointed out by attorneys for homeowners with usually good effect.

a Court must inform pro se litigants that, on a motion for summary judgement, “any factual assertions in the movant’s affidavits will be accepted by the district judge as being true unless (the opposing party) submits his own affidavits or other documentary evidence contradicting the assertion.” 963 F.2d at 456 —

{Editor’s Note: That said, all litigants are supposed to know and follow the rules as written or file a motion for some relief from the rules. While this is frequently the doctrine in most ocudts, the failure to abide by this specific doctrine or rule has not generally been the basis for a successful appeal}

A summary judgment can only be granted if there are no material issues in dispute, and therefore the only thing left to do is for the judge to apply the law. The fact that you have denied the facts of a foreclosure complaint is not a good reason for the judge to deny summary judgment and in fact, without more, clears the path for him/her to enter an order granting summary final judgment.

But if discovery is “outstanding” then if the issues in discovery are material and relevant to the claim, the judge may not enter summary judgment, regardless of how much he or she would like to clear his or her docket. The trick question is “what is outstanding?”

The courts are somewhat divided on that point, but one thing is sure: if you merely serve timely and proper discovery demands relating to the core issues of the claim, that is probably not enough to stop Summary Judgment. If the time has not yet run yet for answers (a tactic often employed by foreclosure mills), then the court is committing an error by entering summary judgment.

If the answers to discovery were due and were not answered or not answered properly (the usual case in foreclosures), then it is probably an error for the court to enter summary judgment — particularly if the homeowner has filed a motion to compel. If the court has already heard the motion to compel and ordered compliance with discovery, it would be dead wrong to enter summary judgment.

And yet judges ignore the rules when they are on a rocket docket to get their desk clear. They will enter erroneous orders like summary judgment despite the clear doctrines in their jurisdiction because they believe it falls under the Latin doctrine of damnum absque injuria (no harm done).

And the reason for that and sometimes appellate decisions approving such clear violations of due process is that there is a sub silentio (silent, hidden) assumption at play. The assumption is that there was a loan that was sold and securitized. If you accept that premise then the fact that the claim says the homeowner missed a scheduled payment and the homeowner admits that is sufficient to enter judgment unless the homeowner can alter the judgment by showing failure to allocate payments correctly.

So THAT is why I keep saying that all winning cases for homeowners, including appeals, at least raise the specter that the claimant might not have a claim as recognized by law or that there is insufficient evidence to conclude, more likely than not, that the claim exists.

Many people have tried to get past motions to dismiss or motions for summary judgment as they pursue the goal of proving that the entire securitization infrastructure is a scam, which it is. But the ones who win aim much lower than that. they merely aim to prevent the claimant from putting on evidence that the claim exists, that they own it and the party submitting an affidavit or testimony is authorized to do so.

The winning goal is to undermine the claim not disprove it.

Once you get to the point of writing the brief — get to the point. This is not an opening or closing argument. And by the way, if you want oral argument in many jurisdictions you must now file a separate motion to allow it explaining why you want it. The presentation of issues on appeal should identify specific findings by the court that procedurally wrong or in direct conflict with existing law. The presentation of issues on appeal must be extremely short and generally speaking, should not include more than 3 issues. So choose which ones you want to identify.

Here is something I recently wrote:

There are two issues presented to the court:

  1. ISSUE #1: Did the trial court err when it extended the statute of limitations? (Sub issue: can the Adverse Possession statute be applied to foreclosure actions?)
  2. ISSUE #2: Did the trial court err by entering Summary Final Judgment with both Discovery and a Motion for Sanctions Outstanding?

There is an art to presenting issues on appeal. The general rule is that you want to express the issue in such a way that the appellate panel will at least initially agree that you have a valid issue on appeal.

Keep in mind that clerks are the first people who read the appeal. They are usually young lawyers who are following the wishes of one or more judges on the panel, but because they see it first, their impression might determine the entire trajectory of the appeal. Also keep in mind that that thousands of appeals are filed in most appellate courts, most of them relating to criminal cases where these takes are higher than ones presented in civil cases.

Because of heavy caseloads, it is often the case that the brief is never read in its entirety. Based upon interviews I have conducted with clerks and judges it is safe to say that they will definitely read the issues on appeal and probably read the conclusion. The rest is variable skimming at best.

Use a grammar checker and a spelling checker. This is a pet peeve of most appellate courts. And lastly, most courts have specific rules regarding fonts, font size, word or character limitations, and page limitations. Check with the clerk of the appellate court to make sure you know the latest local rules. 

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

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

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE ORDER 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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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer. ON appeal, you need an appellate 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.

“Modifications” and Mediations are Opportunities for Homeowners to Deliver Blows and Setbacks to Self-proclaimed “Servicers”

When presented with a situation in which a court has ordered mediation or where a proposed modification has been offered, practicitioners (lawyers) should be asking themselves what they would do if they knew for a fact that all of the correspondence, notices and proposed agreements were coming from a party who neither owned the alleged debt, relating to an obligation that did not exist or no longer existed, and who did not have any grant of legal authority from any creditor who even claimed to own an account receivable bearing the name of the homeowner.
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The answer is obvious. No practicing attorney would accept such a  circumstance. To do so would be malpractice of the highest order — pushing clients into a loss of the biggest investments in their lives.
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So the next step is to ask whether the lawyers have made sufficient inquiries, performed sufficient research, and performed sufficient analysis to assure that the proposed modification relates to an existing obliguation of the homeowner, as legally represented by companies claiming to be “servicers,” acting on behalf of the owner of the account receivable.
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This article is the result of an analysis of a proposed modification agreement on a homeowner transaction originated by Bank of the West and currently involved NEWRez, PHH and Ocwen names being used as implied representations that those companies are authorized servicers.
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Proposed Modifications represent one of many opportunities that are presented for homeowners to set the self-proclaimed servicer back on its heels and force a settlement if the homeowner pursues the issues with confidence and persistence. These opportunities are often concealed behind smoke and mirrors.
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Another example is mediation where the named successor to the lender is required to appear and doesn’t. Or where the order for mediation requires the presentation of a party who possesses the authority to settle the matter without making a phone call. No such person is ever presented.
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The bottom line here is that the homeowner is being coerced, under duress, to execute a document that waives important rights to compensation due to the homeowner, and waives important rights to challenge the existence, ownership and authority over the alleged debt or underlying obligation as stated in Article 9 §203 of the Uniform Commercial Code.
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The parties involved in this proposed modification are basically a snowstorm of names without any entity having authority to administer, collect or enforce any alleged debt from the homeowner, even if one exists (which in this case is doubtful).
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Reading the correspondence and proposed agreement we see the names New Rez, PHH and Ocwen referenced, none of whom claim or warranty to be authorized agents or servicers for an identified creditor who owns the account receivable bearing the name of the homeowner.
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Because of the threat of foreclosure, I strongly recommend the engagement of local counsel who can make inquiries and upon receiving no satisfactory answers can immediately file a Petition for TRO or Inunction, to wit: a pretender is coercing the homeowner into signing an agreement that binds no lender and waives important contractual statutory and civil rights. Sending a QWR, DVL, and complaint to the CFPB and State AG could be very helpful at this juncture in time.
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This is an attempt by foreclosure and securitization players to reinvent the pretender lender in the name of a servicer who (a) never paid any money to the homeowner and (b) never paid any money to anyone else who had paid money to the homeowner.
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Absence of “lender.” The word “lender” is used but nobody is identified as the lender. This means that only the homeowner is identified as a party to the agreement. Under contract law that is no contract at all because a contract with only one party identified is not a meeting of the minds, nor can consideration pass from one party to another — because there is no other party.
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The path to the securitization of transactions originated by Bank of the West is unclear. What we do know is that BOW was very active in claimed securitization of auto loans, and that origination of transactions with homeowners was probably on a balance sheet and funded by BOW.
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But the absence of any reference to BOW in the recent correspondence and proposed modification strongly indicates that they have been paid off completely and have no further right, title or interest to any part of the transaction in which the homeowner executed a note and mortgage, among other documents.
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It would be appropriate to send a QWR and DVL on this point that simply asks for the identity and contact information of the “lender” that is mentioned in the modification agreement. It might also be wise to ask for the basis of any authority of the many players posing as servicers.
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It is doubtful that any such authority exists because it is probable that the loan account has been extinguished as a result of payments received from investors who purchased securities that were indirectly related or a data reference to the reports of “performance” of the BOW transaction with the homeowner.
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This is a typical ploy in which various dubious parties — NewRez, PHH, Ocwen etc. have their names bandied about but nobody makes any representation of authority. Standard custom and practice in a loan modification agreement would be to recite the authority and basis of the authority of the parties entering into the agreement. In this case, the homeowner is invited to sign an agreement with a company that is a self-proclaimed servicer for an unknown lender who probably no longer exists.
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No bank of any size would accept such an agreement as evidence of anything. All investors or financial institutions require representations of ownership and authority and the existence of the alleged debt. In many cases, they include a provision that such representations are subject to independent confirmation by the bank. None of that is present here. There are no such warranties of authority nor any basis to confirm such authority.
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The lender does not exist in a legal sense if the account receivable no longer exists. Without ownership of the account receivable nobody has the right to enforce nor the legal authority to grant to a third party to administer, collect or enforce any obligation that might have previously existed, but does not exist anymore.
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.

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
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CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
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CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

“Random” Lien Releases Causing Trouble at Ocwen

It has been happening for at least 10 years. Most homeowners never knew it happened. They were served with foreclosure notices and they simply walked away thinking that they had an unpaid account receivable with their name on it and that foreclosure was inevitable.

A satisfaction of mortgage, usually by the Bank of America or Ocwen, is recorded in the county records. But there is a wrinkle. As far as the homeowner is concerned the loan still exists, the homeowner keeps paying on it, enters into modification agreements, and lately is asking for COVID forbearance on a loan account that does not exist and which has been satisfied, released, and reconveyed (nonjudicial states). The biggest twist is that the name of the filer is recited as Bank of America or Ocwen but they appear to know nothing about it — the same as the homeowner.

Most homeowners never learn of the release and never learn of the fact that the lien on their house has been completely and legally released. They go on paying and even, upon selling or refinancing, proceeds are delivered to the “servicer.” But some homeowners do catch it — some earlier than others. And they feel guilty as though they are getting away with something. They think the release was a mistake and that the lien can and should be reimposed. That is incorrect.

Homeowners who sell their home after the release of the lien get all the sales proceeds and they are entitled to keep those proceeds. That’s how our legal system works. Nobody can come back against a bona fide purchaser for value and impose a lien on the property. It’s possible they might have a claim for damages, unsecured, against the prior owner who signed the mortgage or deed of trust — but only if they plead and prove that they are the owners of an account receivable with the name of the homeowner who signed the origination paperwork.

And there is the rub. There is no such account receivable. It was extinguished contemporaneously with its origination in cases where the transaction was funded by a Wall Street broker under the cloak of “securitization.” No sale of any account occurred. So it is not possible for Ocwen or any other “servicer” to come back and say “We made a mistake. the homeowner got a windfall and we are injured because we suffered an economic loss arising from the loss of value of our account receivable.” They can’t say that when there is no account receivable.

It’s not hard to imagine why all the players collaborate on administering, collecting, and enforcing a nonexistent account receivable. But what is mysterious to everyone is how they would end up releasing a presumptively valid lien in favor of an iffy claim for damages unsecured by any lien.

The system is so geared up to think of the homeowner transaction as a loan that nearly everyone comes to the same conclusion — that it was an administrative mistake. But that does not quite cover it. Sure it was an error to cancel out the only hope of getting paid on a nonexistent debt. But is that the end of the story?

In order to piece this together, you need to understand that the”servicers” are merely placeholders that can only do as instructed by third party entities who are controlled by the Wall Street brokers that initiate each scheme that is called “securitization” with a “REMIC”, which is a “trust,” which in turn is administered by a “trustee” who has absolutely no rights, duties, obligations or even knowledge with respect to any of the assets that are claimed by third parties to be in the nonexistent trust.

Many of these scenarios start with either a modification agreement with homeowners, a settlement agreement between investors and the “trust” (alias the investment bank), or both. The investors get paid off either in cash or seemingly in full by the issuance of new certificates by a new “REMIC Trust.” The new certificates carry slightly higher assurances of payments to investors than the old ones issued 1998-2011.

The modification agreements that involve the release of the second mortgage and part of the 1st mortgage appear to be the primary candidates for the “mistaken” lien release. But someone must’ve given the order for the lien release to be prepared, executed, and recorded. Who is that?

The answer probably lies in the automation of the entire machinery that serves as the front for false claims of securitization and false claims of foreclosure on nonexistent debt. The account receivable does not exist. So the servers maintained by Black Knight and similar entities working with or parallel to Black Knight must maintain the illusion of the account receivable.

Bill Paatalo postulates that the lien release is probably related to a settlement with investors. I think he is partially correct. Since Black Knight, Ocwen or the investment bank don’t want to get caught overtly trying to collect the same debt twice they have ordered black Knight to do a conflict check to make sure that there is only one “creditor” designated for each fake account receivable. This came up when there were several instances in which more than one foreclosure mill, representing more than one designated “Creditor” all tried to foreclose on the same homeowner, on the same property at the same time. It was very embarrassing — but not as embarrassing as it should have been.

When one securities scheme is replaced by a new securities scheme the fake Mortgage Loan Schedule (MLS) is transferred to the new securities scheme. Since all records are kept and administered by Black Knight, the old MLS is canceled and a new fake MLS is created with some adjustments as to purported content. This triggers the deletion of the payment history that is usually presented as if it was the account receivable — and that is interpreted by the machine algorithm as satisfaction and reported as such, thus generating the release and reconveyance. It’s possible that no human ever sees the document until the robosigner signs it without reading it.

It is a mistake in the sense that nobody intended for that to happen. But it wasn’t a mistake in terms of what was real. There never was an account receivable and all collections and enforcements were based on lies. The difference was that having “accidentally” released the lien, the securitization and foreclosure players had removed an important piece of weaponry from their arsenal: the presumption that the loan exists, that the designated creditor owns it, and therefore that the foreclosure mill is telling the truth when it says it represents the designated creditor for the collection of an unpaid debt.

That heavy artillery moved the burden of proof onto homeowners. Now if they want to undo their mistake, they need to plead and prove the account receivable and how it was a mistake. They can’t succeed but they will always try. I know of several cases where the Bank of America got stuck in that vise and tried to cancel their previously recorded satisfaction of mortgage. They were not successful.

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

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

 

Tonight! Zombie mortgages and Zombie properties. 3PM PST 6PM EST

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

with Charles Marshall and Bill Paatalo

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

Today Charles Marshall addresses some recent developments in loan workout and securitization practice, with a reference also to Neil’s Blog post of March 3 in which he breaks down how in a recent deposition the Bank’s Zombie Mortgage was exposed as a fraud.

There are Zombie mortgages and Zombie properties.

Zombie mortgages are legal instruments that are facially valid, executed, and recorded — but which have no underlying obligation that is secured by the mortgage (or deed of trust). This occurs out of sight of the homeowner who thinks he/she received a loan and now has a lender with a loan account receivable on their general ledger labeled with the homeowner’s name.

Zombie properties are the result of the foreclosure process being concluded on Zombie mortgages, even though there was no unpaid debt and no creditor. The property itself becomes Zombie when the foreclosure is final but the foreclosure mill and its client abandon the property. This often happens because the cost of maintaining the property exceeds its value in poorer neighborhoods.

Entier neighborhoods and even cities were obliterated by Zombie mortgages and Zombie properties.

The “Holder” Myth: How Wall Street Baffles the Courts

In a very recent deposition expertly done by a lawyer in an extremely conservative state, the grossly illegal plan to falsely present a scenario of “securitization of loans” was laid bare despite many attempts by an experienced witness who confessed that he was primarily a teacher to other witnesses for Mr. Cooper d/b/a Nationstar. The homeowner had simply asked for confirmation of the identity of the creditor — i.e., the person who had paid for the then alleged underlying obligation. Note that although U.S. bank, as “trustee,” was noticed to present a witness with the most knowledge regarding the accounts held by U.S. Bank, only the robo-witness from Mr. Cooper appeared.

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Here is what happened, along with my commentary.

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The admission that there are no accounting records within the trust in which there is an account receivable as an asset bearing the name of the supposed debtor/homeowner. This means that U.S. bank neither has nor owns any account receivable with the name of the homeowner —which means they do not own the debt and never paid for it. Note the careful use of the words “performance” relating to data reported by Mr. Cooper. This is the admission. By substituting a third-party performance report for an actual general ledger maintained on the books for U.S. Bank as trustee, in accordance with generally accepted accounting principles, they can say anything and pretend it to be true.:
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Admission they are relying on a paper trail and not the money trail. The law requires a money trail. You can use a paper trail to raise rebuttable presumptions about the money trail, but once you ask the right question, and they refuse to answer, like here, they are no longer entitled to the presumption. In the absence of the presumption, they can only proceed if they have proof of payment. But they may not introduce proof of payments without first answering your question.
 image.png
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The use of the words “mortgage securitization” like a performer of magic tricks says “abracadabra”. There is no magic and there is no securitization — not without multiple investors buying the alleged loan. That never happened.
 image.png

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This is the nub of their problem. they are attempting to change the law. Note how he is using the word “holder” which conforms with a 2008 telephone conversation I had with one of the law firms that was at the hub of this foreclosure plan. 
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That plan basically was this:
If we allege we are the “holder” the court will assume that we are the holder. And if the court assumes that we are the holder that means by definition that we have the right to enforce. If we convince the court that we have the right to enforce the note, it will only be a small leap to get the judge to assume we must have the authority to enforce the mortgage — despite the law in all jurisdictions that a transfer of the mortgage is a legal nullity unless it is accompanied by transfer of the underlying obligation (which can only occur by purchase, payment, and sale). And we think we can get the court to ignore Article 9 §203 UCC because if we have the right to enforce the note, the presumption is that we are enforcing the underlying obligation even though we did not pay for it, as required by the applicable state statute adopting 9-203. 
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But all of that rests upon the application of rebuttable presumptions. They are, by definition, subject to rebuttal. And the simplest rebuttal is to ask the essential questions relating to that presumption. So when push comes to shove if you ask about existence, ownership, and authority over the underlying obligation — a condition precedent under the UCC 9-203 — they will always default to an explanation presumptive rights arising from supposedly facially valid documents. In other words, they default to circular logic because most of the time it works in court even though it makes no sense. 
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First, saying you have possession of the note does not mean you really have it. Also, it does not mean you got it as a legal transfer from one who was the owner of the note, directly or indirectly through authorized transfers. While a thief or a courier might get possession of a note and presumptively have the right to enforce it, you can ask whether the thief or courier received authority to enforce the note from one who had the legal power to grant the right to enforce. When they can’t answer, their case collapses even though properly framed at the stage of filing the lawsuit.
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Second, possession of the note does not mean ownership of the debt. If you don’t pay for the note or enter into some contemporaneous transaction to buy the underlying obligation and the mortgage rights, then you don’t own it. Possession could raise a presumption of ownership of the debt depending upon the circumstances that are alleged and proven. But if nothing is alleged (and there never is), there is no right to put on the proof. The allegations are legally required to serve as notice to their opposition as to what they are saying about their own claims. If they don’t say anything then their plan to have the court assume the rest falls flat when it is challenged.
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Third, possession of the note does not mean that the possessor has the right to enforce. That can only come from the owner of the underlying obligation. The witnesses for the placeholder “servicing” entities have only one arrow in their quiver on this one. they can only revert to hammering on “holder” status, which does not exist if there is no grant of legal authority to enforce the note by the owner of the underlying obligation, directly or indirectly. And the owner can only be someone who paid for it and maintains an account receivable with the homeowner’s name.
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Fourth, the assumption that there is no payment to take over a failed bank is not correct. The failed bank creates a receivership estate and frequently a bankruptcy estate as well. A buyer must pay the receiver or the US Trustee in bankruptcy for the assets being acquired. That is required by law to protect creditors. Payment is definitely involved for any asset being conveyed. Payment can be in cash or assumption of liabilities. Those assets may or may not include everything previously owned by the failed bank. And under state law, they definitely do not include any loans owned by the failed bank without a recorded assignment of the lien.
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

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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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. In  the meanwhile you can order any of the following:
*
CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.

Loans Should Be Local

In today’s technology, there is no good reason why all banks, large and small should not be competing for the same customers for services relating to demand deposit accounts and even long-term deposits. They are all equally dependent upon the same technology backbone, electronic funds transfer, and everything else.

But bigger is not necessarily better and centralized banking is not necessarily better than local banking. If you are looking for a cause for the mortgage meltdown look no further than that branch banking was expanded beyond state borders and that loan decisions were made far away from the communities impacted. Many of the securities sold around the world were indexed on discretionary data points issued by Wall Street brokers who were pretending to own the obligations of homeowners.

Is that globalization or just a way to hide the bones?

More importantly, centralized deregulated “lending” under false pretenses has put community banks and credit unions in a place where competition is nearly impossible. Only mammoth entities dwarfing the size of any community bank or credit union, could offer “interest rates” that are below 3%, no documentation, and with incentives like no closing costs, lower payments for a specified tune period etc.

Soon they will be offering toasters or refrigerators because the point is not the risks and reward of making a loan. It is the lack of risk and the reward of participating in a grand slam of scams: selling worthless Securities to investors. Both weaken neighborhoods and pensions across the world, particularly those where population density is greatest, education is lowest and financial sophistication is nearly nonexistent.

How many of those crazy “toxic” “loans” would have been closed if there was a lender who was absorbing a credit risk? The answer is obvious. Those transactions were only toxic to homeowners, investors and consumers. They were a gold mine to Wall Street brokers. They still are a gold mine. Those transactions would not ever have been considered loans if in the end the party seeking administer, collect or enforce the “debt” was required to show that they had an account ledger with an account receivable on it bearing the name of the homeowner.

My opinion is that we should return to the days before Glass Steagall was repealed (1998) and not allow brokers into commercial banking. I think that all loan decisions need to be local because a local bank is the only lending source that will consider the impact on the community if lots of loans go south. And only a lender with local risk not offset by other related activities will make loans that are founded upon economic sense, as advertised.

Gary Dubin, Esq. Fights Back! Petitions U.S. Supreme Court for Violations of Due Process

I learned early (2006-2011) on when some 26 state bar associations filed various types of complaints or started investigations of my efforts to help homeowners. I fought them all back. Meanwhile, I have seen one lawyer after another falling victim to imaginary violations or discipline that was about 10 times worse than lawyers doing anything other than foreclosure defense.

The case in point is Gary Dubin, who practices mostly in Hawaii and California. He is one of the few lawyers that has been licensed and still alive for more years than I have been. In defense of homeowners who now join him in this Petition to SCOTUS, he took the road of challenging virtually everything in court. In so doing, he smashed one doctrine after another leading all the way to the Ninth Circuit Court of Appeals. His successes were legendary.

So it came as no surprise to me that suddenly he came under fire from the bar Association in Hawaii. He had, at worst reading, committed a potential violation. This was then escalated to fraud and deceit and all sorts of egregious acts that never occurred. The rest was just characterization. Or, I would say, a mischaracterization. In decades of practice, he has never been accused of anything improper aside from this one incident that involved no more than an unchecked box on an application.

The whole reason for all this lies in the unholy influence that Wall Street has over the courts, who for one reason or another are not only resistant to theories of foreclosure defense but outright antagonistic to them. He probably faces the same problem with SCOTUS. No court wants to admit that the entire system allowed tens of millions of illegal foreclosures, collection, and judgments. No court wants to even consider the notion that the payments to homeowners were not simply loans but included an advance incentive for the homeowners to accept concealed risks and participation (without profit) in a concealed scheme of securities sales without ever securitizing the alleged debt generated by the paper in an improper and illegal closing.

It was Wall Street brokers that literally paid for the system and so they have some reason to believe they own it.

But Dubin, like me, is too old to be afraid of what might happen if he takes on the power and influence of Wall Street. And in confronting the crazy discipline levied against him in Hawaii he now heroically leads an effort that is long overdue — disciplining the state bar disciplinary boards for acting without due process.

Here is his Press release and a copy of his Petition:

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On February 25, 2021, Attorney Gary Victor Dubin, still permitted to practice law in federal courts, submitted his Petition for Writ of Certiorari in the United States Supreme Court, challenging on federal constitutional grounds his recent disbarment in Hawaii state courts by the Hawaii Supreme Court.

His Petition is the first in the history of the United States Supreme Court challenging the authority of a state supreme court to disbar an attorney in violation of Equal Protection, contrary to the Court’s decision in Griffin v. Illinois, 351 U.S. 12 (1966), and is uniquely supported by nearly two hundred of his clients, claiming standing as also harmed, denied without just cause Dubin’s legal services.

Specifically, Dubin’s Petition is a case of first impression, disputing not only his denial of Due Process and Freedom of Speech, but centrally Equal Protection as a result of the practice of supreme courts in most states, such as Hawaii, disbarring attorneys outside normal civil court proceedings, and without their having a right to a nondiscretionary appeal unlike state appellate rights afforded to physicians, for instance, and all other professionals when their licenses are revoked.

Although the judicial power to disbar attorneys is not usually found in state constitutions, state supreme courts as in Hawaii have usurped that power from the control of state legislatures by claiming it to be their inherent authority, that claim however historically unfounded, while exercising that resulting unchecked power in an arbitrary and capricious manner contrary to federal constitutional safeguards, as evidenced by Dubin’s experience, fully explained in his attached Petition.

Even further abhorrent to Equal Protection, state supreme courts and their disciplinary prosecutors have been targeting foreclosure defense attorneys nationally, such as Dubin, for reasons also explained in the attached Petition.

If questions, comments, seeking more information, or offering amicus support, please reply to info@dubinlaw.net.

Gary Victor Dubin
Dubin Law Offices
Suite 3100, Harbor Court
55 Merchant Street
Honolulu, Hawaii 96813

Office: (808) 537-2300
Facsimile: (808) 523-7733
Email: gdubin@dubinlaw.net

Admitted To Practice In Hawaii
Federal Court And In California
State and Federal Courts

1749_001 Petition

Wall Street Is Still Selling the Myth That Transactions With Homeowners Were Loans and That Risk IS Properly Allocated to Homeowners Instead of Securitization Schemers

Today we are still living with the myth that the transactions with homeowners were loans, that the concealed risks absorbed by homeowners should not be compensated, and that administration, collection, and enforcement of nonexistent accounts receivable should be allowed. We can all change that by being open to the idea that maybe it isn’t the way that Wall Street is selling it.
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IN PLAIN TERMS, THE GRANTOR, TRUSTOR, SETTLOR GIFTOR NEVER HAD ANY  RIGHT, TITLE OR INTEREST TO ANY DEBT, NOTE OR MORTGAGE AND NEVER GRANTED ANY RIGHT TITLE OR INTEREST. BUT LAWYERS HAVE MADE ASSERTIONS FOR MORE THAN 20 YEARS THAT SUCH A GRANT OCCURRED. THEY ARE PROTECTED, AS IS THEIR CLIENTS, BY THE DOCTRINE OF LITIGATION IMMUNITY.

THE ROLE OF ELECTRONIC PLACEHOLDERS

The simple but unbelievable truth is that Chase bought nothing as it relates to your loan. They may have succeeded to servicing rights — but servicing rights do not exist in a vacuum. Servicing rights ONLY exist when the owner of the underlying debt grants authority to administer, collect or enforce the underlying obligation as evidenced by the promissory note.

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Without that connection, the “servicer” is not serving anyone. But by pretending to be the servicing through the publication of self-serving correspondence, statements, and notices, the use of the servicer’s name creates an opportunity to collect scheduled payments from homeowners — even though they are not being collected on behalf of anyone who owns the underlying debt.
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The usual retort to that is that the servicer must only produce evidence of a “holder.” A holder is someone in possession of the promissory note (not the mortgage or deed of trust) who has been granted the right to enforce.
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POSSESSION OF THE NOTE

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Our system has been set up for centuries to create legal fictions that are designed to produce confidence in the marketplace and judicial economy; nobody wants to go through the process of establishing the right to enforce a debt that is evidenced by a note when the outcome is obvious. Once upon a time that was true. In 1995, all of that changed.
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So mere possession of the note is often translated into an assumption or legal presumption that the one in possession of the note is also the owner of the underlying obligation. Viewed from that perspective, the physical delivery of the note is sufficient to presume that the underlying obligation was also transferred. In that context, the note is treated as though it was a title document instead of what it is — evidence of an event.
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What the major Wall Street brokers did, was remove physical delivery and replace it with the appearance of physical delivery, so that production of a copy of the note along with some assertion, affidavit, or allegation about the note, would give rise to the assumptions that something real was happening to the note. In fact, it affirmatively appears that in most cases, the note was destroyed to prevent two fictional trees (or more) from growing from a lie.
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SERVICERS MUST SERVE

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A servicer is an agent of a principal. In this case, the principal would be the owner of the underlying debt. In our system you can only get to own something upon the occurrence of one of two events in the real world — you buy it or it is a gift. There are no other ways to own any asset.
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PURCHASE OF A DEBT MUST INCLUDE PAYMENT

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In the case of a purchase, there would be easily confirmable supporting documents that show proof of payment along with an entry on the accounting ledger of the buyer showing a decrease in one asset category (e.eg. “Cash”) and a corresponding increase in another category of assets (e.g. “loans receivable” or “loan account receivable”).
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No such documents or ledger entries occur in the world of “securitization.” Without a sale of the asset (e.g. “loan”) the representations and claims, correspondence, notices, allegations, and assertions in and out of court are without any foundation — which is a legal objection that should be raised early and often when the foreclosure players go into action.
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To put it simply, no securitization has occurred within that scenario despite millions of cases, thousands of articles, and tens of millions of illusory “transactions” resulting in some state authority approving of foreclosure in favor of the disinterested foreclosure players.

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TRUSTOR, SETTLOR, DEPOSITOR MUST HAVE TITLE TO GRANT IT

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A gift is often implied in the lies told by the securitization players (Wall Street brokers). They will often represent or at least imply to investors and borrowers that somehow the “Trust” acquired possession and ownership of “the loan” meaning possession and ownership of the underlying obligation, note, and mortgage (or deed of trust).
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And yet in foreclosures, the party (e.g., “depositor”) supposedly “giving” the loans to the named “trustee” never shows up in the chain of title that is alleged, executed, or recorded. The depositor is thus cast in the role of trustor — i.e. one who funds a trust so that the trustee has something to administer and the beneficiaries receive some benefit.
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IN PLAIN TERMS, THE GRANTOR, TRUSTOR, SETTLOR GIFTOR NEVER HAD ANY  RIGHT, TITLE OR INTEREST TO ANY DEBT, NOTE OR MORTGAGE AND NEVER GRANTED ANY RIGHT TITLE OR INTEREST. BUT LAWYERS HAVE MADE ASSERTIONS FOR MORE THAN 20 YEARS THAT SUCH A GRANT OCCURRED. THEY ARE PROTECTED, AS IS THEIR CLIENTS, BY THE DOCTRINE OF LITIGATION IMMUNITY.
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LITIGATION IMMUNITY HAS BEEN WEAPONIZED AGAINST THE LEGAL SYSTEM AND CONSUMERS

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Instead of producing legal documents executed by the “depositor”, the foreclosure players hire a lawyer who can say a lot of things that are untrue as long as he/she doesn’t absolutely know that their allegations are untrue. It’s called litigation immunity and it is necessary because, without it, nobody would be a lawyer. But Wall Street brokers have weaponized that concept into a shield that protects not only the lawyer but everyone in the foreclosure team — none of whom own or have any rights to the debt, note, or mortgage.
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Since there were no real transactions, and since the legal system requires documents memorializing transactions, Wall Street brokers and the foreclosure teams went into the business of mass fabrication of documents that were forged, backdated, robosigned, etc. They did everything possible to make a signature block look real when it actually said nothing.
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TRUST EXISTS IN NAME ONLY

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The reality is that the “trust” existed in name only and even that is usually twisted into gibberish. Instead of saying, for example, “SASCO 2007-4A Trust,” a subtle change is made in which the “name” be practically a whole sentence like “U.S. Bank. NA as Trustee, as the successor to Bank of America, trustee, as successor to LaSalle bank, trustee, Structured Assets Securities Corp. Series 2007-4A Trust on behalf of the holders of registered certificate holders of U.S. Bank. NA as Trustee, as the successor to Bank of America, trustee, as successor to LaSalle bank, trustee, Structured Assets Securities Corp. Series 2007-4A Trust.”
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Later, when documents are fabricated, they use that meaningless sentence followed by the name of a servicer (e.g. “Ocwen”) signing as “attorney In fact.” And the signatory is an “authorized signor” who is usually rotated into other positions around the country so nobody gets to take testimony from them about why or how they or even if they ever signed the document. Linda Green was literally put out to pasture with a payoff and an ironclad confidentiality agreement — after it was found by Lynn Symoniak and others that she had been supposedly executing assignments of mortgage and endorsements of notes at the rate of one documents every 5 seconds or less.
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Taken together nothing is said in those documents but lots of things are implied making it easy for the foreclosure mill attorney to make the most outlandish statements about what that all means and leaving the foreclosure defense attorney to be so bamboozled by the smoke, mirrors, and circular statements, that they are dumbfounded into silence. And that was the goal.
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WALL STREET CONTROL — OFF TRACK BETTING

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In order to retain apparent control over everything without actually being in legal control, the Wall Street brokers had to do two things. First, they had to make sure that none of the placeholders —- MERS, servicers or trustees — ever touched any money except that which was paid to them through a convoluted series of conduits. Second, they had to make certain that none of the placeholders actually did anything.
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MERS was an electronic placeholder with insecure access so that foreclosure players could manipulate data and apparent chains of title without ever recording those changes which were an illusion.
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Servicers were electronic placeholders often acting as the face for Black Knight and sometimes other entities who controlled lockbox addresses to which all payments were forwarded. Those checks or payments were deposited into accounts controlled by a conduit for the Wall Street broker. Accounting is automated so servicers could produce “reports” and then “servicers” send in robo witnesses (usually “contract employees”) to attest to the records being within the hearsay exemption as business records.
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Trustees were electronic placeholders whose only role was to rent their name out, same as MERS and Servicers, but they play absolutely no role in any administration, collection, or enforcement of any debt, note, or mortgage.
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The grant of rights, duties, or obligations from one who does not own or control them is a legal nullity. But a piece of paper saying that such a grant was made, raises inferences, assumptions or presumptions from the document if it conforms to what is expected of such a document in appearance (hence “Facial Validity”).
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THE CHASE-WAMU HEIST

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So translating this to Chase, for example, Chase did take over Washington Mutual bank. WAMU, from the inception of every loan, had merely been another placeholder (originator or “aggregator”). Each loan was financed through another byzantine structure in which the Wall Street brokers would borrow money from third parties, short-term, using the prospective sale of certificates to investors as collateral.
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The borrowed money was used by the Wall Street brokers to put money on the closing table of transactions with homeowners. Then the sales of certificates were closed thus paying off the lenders to the brokers and leaving a hefty trading profit — because far less than the borrowed money was used for homeowner transactions.
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Homeowner transactions were only a necessary expense or advance in order to justify the sale of securities that could be issued indefinitely precisely because there was no conveyance of any right, title, or interest to any debt, note, or mortgage of any homeowner.
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If the Wall Street brokers could have figured out a way to get homeowners to issue notes and mortgages without paying them anything, they would have done so. But that proved impossible. So they did the next best thing — they forced homeowners to pay back the advance paid to them as an incentive to sign “loan papers” without any loan account or lender. This completed the illusion that “loans” were being securitized. The reality is that there were no loans and nothing was securitized.
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So WAMU  owned nothing except servicing rights that might have been worth something if there was any owner of an account receivable with your name on it. But no such person or entity existed. Hence the servicing rights, just like the title rights in MERS and the administration rights in the named “trustee” were strictly an illusion.
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But what Chase did was something spectacular. It took over WAMU at a net profit of around $200 million to Chase. Consideration was recited as zero because of an IRS refund that was due to WAMU that instead went to Chase. And then Chase slowly, step by step, asserted ownership and control over transactions with homeowners that had in fact been funded as described above.
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Each foreclosure was pure profit — untaxed because it was reported as though it was actually a loss on a loan that had never existed in the first place. In fact, Chase made an untaxed profit on each foreclosure. Each fictional loss on “homeowner default” was written off against income reducing the amount of taxes that chase would otherwise have paid.
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This pattern, with minor variations, was repeated over and over again. Chase again did it with Bear Stearns. Wells Fargo did it with Lehman and Wachovia (World Savings). Bank of America did with Merrill Lynch. In no case do you find any bump on the balance sheet of the mega bank that claimed to own — only for enforcement purposes — every transaction ever “originated” by the failed company.
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The worst case was OneWest taking over IndyMac. Over a weekend, OneWest was formed with virtually no money (just promises). The people who made the promises were very well connected. They got a deal that was outlandish. The FDIC would pay 80% of all losses claimed by OneWest as if it had sustained the losses. All the transactions with homeowners were labeled as loans and all those “loans” were subject to claims of securitization. So IndyMac owned no loans — no matter how you look at it. When Sheila Bair, a straight shooter, burst into flames and rebelled against the deal, as head of the FDIC, she was fired.
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U.S. GIVES FREE MONEY DESCRIBED AS BAILOUT OF NONEXISTENT LOSSES

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Adding insult to injury, despite the complete absence of any economic losses from “loan” defaults, the U.S. government ultimately paid trillions of bailout to the players who had profited from this scheme. Homeowners received no help of any consequence. They were treated as deadbeat borrowers.
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In the end, we did have the steepest economic downturn since the great depression. It had happened when Wall Street used its influence to push the narrative that their transactions with homeowners had been loans and that everything they had done was legal, proper, equitable and just.
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We could have avoided the downturn entirely or in large part if we had just recognized the truth: that payments to homeowners were never intended to be loans, that nobody had any loss, and that the transactions needed to be restructured in court and by legislation to reflect economic reality instead of Wall Street fantasy. Iceland and others did it. They simply reduced the amount due from households on debt. And they recovered within months.
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Today we are still living with the myth that the transactions with homeowners were loans, that the concealed risks absorbed by homeowners should not be compensated, and that administration, collection, and enforcement of nonexistent accounts receivable should be allowed. We can all change that by being open to the idea that maybe it isn’t the way that Wall Street is selling it.
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

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.

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CLICK HERE ORDER 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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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

Do the Math! How Could Rocket Mortgage “Originate” $338.7 Billion in “Mortgage Loans” and Make a Profit of $9.5 Billion with Only $3.5 Billion in Cash?

The bottom line is that homeowners are mostly successful in defeating the foreclosure attempt entirely by merely issuing timely discovery demands and objections that focus on existence, ownership, and authority over the alleged obligation. They don’t need to plead or prove that that the payment they received was an incentive payment. It just ends up that way. 

The math is so simple and yet the regulators continue to do nothing. It’s simply OK now to lie to consumers about who is lending them money and what risks consumers are assuming without knowing anything about it. There is no incentive at all to make a viable, workable loan that provides the benefit of a bargain to both a lender and a borrower because there is no lender.

What we have instead are “originators” who pretend to be lenders (hence “pretender lenders”) and who are treated as though they are lenders even though they have no lending intent. Their intent is to make a fee which is disguised as the profit on selling a mortgage and note that they never owned. Because it is labeled as a “sale” the word “fee” is avoided. but that doesn’t make it a sale.

To prove the theory of no landing intent, just do the math and lookup Rocket Mortgage.

 

 

Rocket Mortgage made $9.5B in profits in 2020

Rocket Mortgage was the selling agent for about $350 Billion in transactions with homeowners. Its commission on those sales was disguised as a sale as if it owned the alleged obligation, note, and mortgage. It is not a lender and it records little or no interest income. In 2020 it was paid around $15 billion to “originate” $350 Billion in “mortgage loans”. That means it received around 5% of every loan “originated.”

The interest rate quoted on the alleged loans was an average of 4.6%. So for starters, if there was a lender, they immediately lost their first year’s income to Rocket Mortgage. They the servicers get paid around 1.5% of scheduled payments received from homeowners plus other fees totaling around 2%-2.5% of all receipts. Do you see where I am going with this?

Then there is an overall default rate of around 6%, plus a substantial shortfall in collateral caused by inflated appraisals at the time of “origination.” That default rate is going to return to such higher rates shortly.

The obvious question is why would you loan $200,000 to anyone under such conditions? Even if you get the homeowner to make the payments, you are losing money after you factor in inflation. Nobody would make that deal and nobody did make that deal under claims of securitization of loans surfaced. Those claims gave everyone a catch-phrase to latch onto.

they needed something to justify the sale of transactions with homeowners and labelling them as “loans” even though they were not in it for the interest income. They were in it for profit from the sale of securities. And by disconnecting any loan receivable account from the transaction, they were able to sell index securities until the market was saturated without ever being accused of selling the same asset over and over again. And because those securities are erroneously treated as though they are not subject to regulation, no disclosure is required end to end.

Each part of the transaction is labeled for the convenience of the securities brokerage firm (investment bank) that started the scheme by issuing its own securities under the name of a nonexistent trust.

Without investors buying those securities, there would have been no securities, and there would have been no “loans” from investment banks who were using every possible device to avoid being labeled as a “lender” who could be liable under Federal And State lending, servicing and other laws governing consumer transactions and which would have revealed the fact that the initial set of investors were purchasing certificates of deposit from the broker who had no right to conduct commercial banking (until it was ratified retroactively after the 2008 crash).

All that money, including the $9.5 Billion paid to Rocket Mortgage and others, the billions paid to “trustees,” “servicers” and sham conduits like MERS, came from “profits” (actually fees) generated by fake sales of consumer obligations where the obligation was never sold, purchased or paid for.

Hundreds of billions of dollars, even trillions were generated as trading profit by the select few on Wall Street who originated these schemes. that is where all the money went after it was siphoned out of our economy.  And somehow someone thought it was a good idea to pretend that the brokers had lost money and then gave them trillions more in “bailouts”, purchase programs etc.

So what did the homeowner get for his/her participation? Well, he/she got paid whatever the payment was in the transaction. The investment bank decided to make that payment as an inducement to sign a note and mortgage without which there would be no securitization claims. And that is why appraisals turned from conservative to fantasy.

The deal was never about the collateral or the loan from the point of view of the investment bank. It was never about any risk of loss because there was never going to be any loss. It was always bout selling securities that they would claim to be not subject to regulation.

But because the investment bank, acting through sham conduits like Rocket Mortgage, lied about its true intent and even lied about its involvement in the transaction with the homeowner, they were able to convince the homeowner to sign the note and mortgage, promising to pay all of the money back that they had received as an incentive payment plus interest, leaving the homeowner with less than nothing for his/her role in securitization profits — and leaving the investment banks laughing as they converted piles of other people’s money into their own bank accounts off-shore, onshore and into the purchase of precious metal distribution centers and other offshore businesses.

Why is this important to know as homeowners?

It is the centerpiece of every defense of every foreclosure where securitization is either directly claimed or is lurking in the background — a situation that encompasses virtually all foreclosures in the U.S. This is because state and federal laws governing the administration, collection, and enforcement of debts have not kept pace with the “innovation” that is falsely called “securitization.”

Foreclosures are conducted under state law. And all states and all other U.S. jurisdictions have, by state statute, uniformly adopted Article 9 §203 of the Uniform Commerical Code, which is the basis for the judicial doctrine that says that a document that says it is transferring ownership of a mortgage or the beneficial interest under a deed of trust is legally nothing (a “legal nullity”) if the underlying obligation has not been sold to the purported grantee. Simply stated any attempt to initiate a foreclosure proceeding by someone who holds a void (“legal nullity”) assignment is wrongful, illegal, and must be denied.

The problem for the investment banks is that their scheme depends entirely upon convincing the public to accept their extra-legal (illegal) scheme in which virtual (pretender) creditors replace actual ones. The law requires real creditors.

The investment bank needs the public to buy that gibberish because the transaction with the homeowner is never recorded or sold as an account receivable on the general ledger of any company, except where the label has been used to conceal the transaction. And that means that at the end of their paper trail they’re left with naming a designated claimant who has no accounts and has no losses for which it could claim a remedy. Hence no claim could be made — let alone any foreclosure proceeding.

The entire scheme depends upon the ability to use legal doctrines that create legal presumptions of fact and law out of what appear to be facially valid documents. Homeowners have worked hard to show that those documents are entirely fabricated, false, forged, and robosigned.

The 50 state settlement and many other settlements have been both administrative findings and tacit admissions of the use of fabricated documents to cover up the lack of ownership of any monetary obligation due from any homeowner and even more — the lack of the existence of any such obligation on the books of any company at the time of foreclosure. And yet despite state statutes that prohibit the use of legal presumptions in favor of a noncredible source, most courts continue to allow their use.

The bottom line is that homeowners are mostly successful in defeating the foreclosure attempt entirely by merely issuing timely discovery demands and objections that focus on existence, ownership, and authority over the alleged obligation. They don’t need to plead or prove that that the payment they received was an incentive payment. It just ends up that way.

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

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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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. In  the meanwhile you can order any of the following:
CLICK HERE ORDER 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 TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

Homeowners Focus On Existence of Debt and Win: everyone else is drinking Kool-Aid made by Wall Street brokers

The goal of fake securitization is to pretend that securitization occurred and then to sell securities that were NOT ownership interests in any loan. In order to do that, there needs to be no owner who even could sell the asset (i.e., the “loan”) — lest someone be accused of selling the same asset over and over again. That is avoided easily by (a) not having the asset to sell and (b) not selling it.

Most people refrain from such an attack because to them, the existence of the debt is obvious. They don’t want to appear stupid. And that is why they lose.

I admit I have contributed to the problem by identifying problems with the paperwork. It may be that I was not sufficiently articulating the correct strategy so let this article be my apology and clarification. It is easy to tear apart the paperwork, attack the signature block on a fake document, and submit a FOIA (Freedom of Information Act) request for documents. But all that does is give oxygen to a nonexistent claim, to wit: that a loan account exists on the accounting ledger of some person or company.

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I don’t think the FOIA request is necessary even though it might prove helpful in litigation. Because of the complex way that these schemes are presented, it is easy to go down a rabbit hole and forget what you really want. You want to push them until you either win the case or settle on terms that are so favorable that you no longer wish to litigate. There is only one way to accomplish that goal — by successfully attacking the existence, ownership, and authority over the alleged debt. If you focus on the ownership and authority over the debt you are tacitly admitting the existence of the debt and thereby influencing the judge to find a way to grant the foreclosure.

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If the debt doesn’t exist then there can be no ownership and ownership is what is required to administer, enforce and collect. Only an owner of an asset can be the ultimate source of a grant of authority to service or act as an attorney in fact under a power of attorney or a servicing agreement. All those documents are designed to create the illusion that the debt exists even though nobody has a loan account on their books.
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Without an owner of the debt, there is nobody who can grant authority to enforce. Most people forget that possession of a note is not enough. There must be a right to enforce the note which is presumed to be enforcement of the underlying obligation. The right to enforce must ultimately be derived from the owner of the underlying obligation — which is a condition precedent to filing any foreclosure under the universal adoption of Article 9 §203 of the Uniform Commercial Code. If you remove their ability to prove the existence of underlying obligation there is no way they can win, even in today’s courts.
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You don’t need to prove anything. As soon as homeowners or their lawyers go down that road they are doomed. You need to expose them by asking questions they cannot answer and do that under circumstances where they are legally required to answer the questions, like discovery in court during a legal proceeding. After they repeatedly dodge those questions, you get to the holy grail of litigation: a negative inference — in this case, the presumption that the loan account does not exist and therefore cannot be enforced. It’s counterintuitive but it is true.
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Everything else is a rabbit hole. That’s why most lawyers and homeowners lose. They attack the paperwork which actually gives oxygen to fake, fabricated documents, and tacitly admit their relevance and materiality. Proving various insufficiencies of the possession or existence of the note does not undermine or invalidate the existence of the debt. The note is not the debt and never has been. It is evidence of an alleged debt and a vehicle for enforcement that is acknowledged by law. Most people refrain from such an attack because to them, the existence of the debt is obvious. They don’t want to appear stupid. And that is why they lose.
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But I am telling you that I am completely certain that there is no debt. The payment was not a loan. It was a temporary advance against services rendered by the homeowner. The reason I know that because I know that there is no accounting ledger of any person or company on which debits and credits are posted to an account receivable bearing your name.
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In 15 years of testing this strategy in thousands of cases, there has not been a single case of anyone ever producing the original ledger that is carried forward from one lender to successors showing the establishment of the debt, debits and credits to the account, with dates and references to source materials (proof of payment or proof of receipt of payment).
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Without an account establishing the debt and posting debits and credits to that account (reducing or increasing the balance of that account as an asset of the company claiming the loan as an asset) there is no debt. That is the “miracle” of fake “securitization.” What we see instead is a report produced but not generated by a third party claiming to be a servicer for payments that were directed to, but not received by, the company posing as servicer. That report, besides being rank hearsay on hearsay, is merely a payment history.
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There is a difference between a payment history report and a general ledger. At best, the payment history is merely a compilation report of data that occurred after the homeowner into the transaction and never when the transaction was originated or acquired. The accounting ledger or general ledger shows ALL entries including the first entry that started the account receivable that is carried as an asset. One is at best a partially accurate statement of partial results and the other tells you the real balance of a real creditor owning a real debt receivable account.
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Interestingly enough the designated witness and the source for all answers to discovery comes from that third party who produces but does not compile reports and has no role in making entries of receipts and disbursements because they don’t actually receive the money nor do they pay anything except to lawyers and other players involved in the foreclosure scam. A major oversight by most — but not all — litigators is the lack of regard for or confrontation of the lack of any appearance by the named Plaintiff or beneficiary. They never appear in court, at mediation or even on any modification document.
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The logic and theory behind securitization is simple, just as it is in every case where securities are issued and sold. The goal is to spread risk amongst as many people as possible so that if the investment asset goes bad, nobody loses everything they have in this world. It depends entirely upon the sale of pro-rata ownership interests in an asset. The buyers are called investors. No such sale occurred in any case where residential transactions were conducted with homeowners on behalf of fake “Securitization” schemes.
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The goal of fake securitization is to pretend that securitization occurred and then to sell securities that were NOT ownership interests in any loan. In order to do that, there needs to be no owner who even could sell the asset (i.e., the “loan”) — lest someone be accused of selling the same asset over and over again. That is avoided easily by (a) not having the asset to sell and (b) not selling it.
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Instead, brokers avoided that liability by selling bets on data reported at the sole discretion of the issuing stockbroker who was doing business under the name of a nonexistent trust. The stockbroker pretended to be the underwriter implying that it was an objective third party for the issuance of securities by the fake trust entity.
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By selling securities whose value depends (derives from) upon data relating to assets not owned by anyone in the “Securitization” scheme, the stockbrokers had created a void in which unlimited amounts of such “data securities” could be sold — and none of it was regulated because of the exemptions that were passed in 1998-1999 under false pretenses. And that is how they made as much as $50 for each dollar transacted with homeowners.
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Wall Street has always wanted to make everyone else’s money their own money. Up until the era of fake securitization they were forced to take some percentage or piece of a transaction between two principals. With fake securitization, they succeeded in getting everyone to erroneously believe that was still happening. But the reality is that nearly all of the revenue and profit was kept by the brokers and the investors and homeowners be damned.
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Thus instead of just taking a hefty profit between the amount invested in the initial batch of securities (certificates) and the amount actually used for origination or acquisition of “loans” they were able to turn what should have been a fraction of the money generated into geometric multiples of the amount invested by investors and homeowners into a concealed scheme that danced on the edge of the definition of a Ponzi Scheme.
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This shift was more profound than anything Wall Street has ever done. They had transformed their role from broker (agent) to principal cloaked as an intermediary that was making a market in legitimate securities that were apparently exempt from regulation. They did it by lying about everything they had done and were doing. And because the picture they presented was so complex, most people naively went to the robbers for an explanation for what happened and believed them when they said they had nothing wrong. And they have kept doing it because nobody is willing to acknowledge that the Emporer has no clothes. they have known it for over a decade but still the regulators do nothing.
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But it is only the people who are persistently skeptical of everything from beginning to end who are able to defeat that part of the plan that includes administration, collection and enforcement of the nonexistent debt account against homeowners. The key element is the existence of the debt as the asset of some person or company in accordance with Generally Accepted Accounting Principles. Without that, there can be no ownership of something that does not exist and without ownership, there can be no source of a grant of authority to administer, collect or enforce a debt account that does not exist.

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The huge caveat here is that failure to actively and persistently contest the basis of the claim is and will always be fatal in any litigation.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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