Does Discovery Invite Fraudsters to Invent Backdated Documentation of Nonexistent Transactions?

I have divided the rules of evidence into two categories that are useful to homeowners seeking out a judgment or final order in their favor.

The two categories are primary evidence of a claim against the homeowner and corroborative evidence in support of the primary evidence. The banks want you to attack the primary evidence. I want you to attack the corroborative evidence.

The primary evidence is the case AGAINST the homeowner.

The attack on the corroborative evidence is the case FOR the homeowner.

The unfortunate truth about our judicial system is that anyone can win a completely fraudulent claim if they work the system correctly. But it is also true that anyone can successfully defend against a claim even if it is not fraudulent. 

The first category is primary evidence which is probably not what you’re thinking. Primary evidence is any document or testimony which on its face asserts the truth of the matter asserted. In foreclosure, the matter asserted is that the proceedings have been initiated on behalf of a claimant who has paid value in exchange for ownership of an unpaid debt owed by the homeowner to the claimant.

Examples of primary evidence that are currently used in foreclosure cases by lawyers representing Foreclosure Mills include assignment of mortgage, allonges that purport to endorse a promissory note, a copy of a promissory note, and payment histories that purport to establish a loan account receivable and its status.

Primary evidence consist mainly of an anchor from which the lawyer for the claimant will claim that he or she is entitled to the application of a legal presumption arising from the facial validity of the testimony or the exhibit.

So if the exhibit says for example that it is “for value received”, the court will ordinarily assume that value was received. Inherent in this presumption is the idea that there was something to buy and that something was sold. This reinforces the idea that the transaction with the homeowner was in fact a loan and that this loan was in fact sold into the secondary market and was securitized.

In the absence of any affirmative defense, denial, counterclaim or objection from the homeowner, the primary evidence establishes the prima facie case for the claimant, which means that the Foreclosure Mill is entitled to a foreclosure judgment or an order in allowing the foreclosure sale to proceed, following which there will be an eviction or writ of possession.

Defending against such claims is as much an art as it is the application of skills learned through education, experience and practice.

The typical layman approaches the case as a conflict between right and wrong. The experienced practitioner approaches the case as an opportunity to work the system. On Defense, the practitioner seeks mainly to discredit the case brought against his or her client. The successful practitioner does not try to overshoot by attempting to plead and prove facts supporting the idea that the entire securitization scheme is mostly or entirely a Ponzi scheme.

So the successful practitioner attacks the prima facie case by attacking the ability of the claimant to provide corroborative evidence for the facts that are currently presumed. Pursued successfully, this leads to an inevitable result: the Foreclosure Miil is unable to produce any of the corroborative evidence. And this is because no transaction ever occurred. You don’t need to believe that proposition; you only need to use it so that you can win.

But some people question the viability of pursuing a strategy that is based mostly on the pursuit of discovery demands on the grounds that it will only lead to the production of more fake documents.

That is possible but a real loan file will include an accounting ledger (not just a payment history) and source documents that can be independently confirmed. So if they are claiming to have made an entry on the general ledger that says we paid for this loan and now we own it as an asset, then there will be one or more source documents and corroborating documents that show that to be a true memorialization of what happened.

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In this instance, it would mean that they had a canceled check or confirmation of ACH or wire transfer together with corroborating documents showing an agreement for purchase and sale of the underlying obligation as required by Article 9 §203 UCC, adopted in all U.S jurisdictions verbatim.
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This is the reason why they will refuse to respond to timely and proper discovery demands even in the face of a court order requiring them to do so. Some fairly sophisticated pro se litigants get right up to the line where they could snatch victory from the jaws of defeat, only to be faced with a final order granting the foreclosure. This is because they were unaware of the requirements for establishing a bar to the Foreclosure Mail introducing any evidence of the existence, ownership, and right to administer, collect or enforce any alleged debt.
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I have identified the procedural mistake as one in which the homeowner fails to ask the court to bar such evidence in a motion for sanctions or a motion in limine. The mistake occurs because the homeowner believes that the unanswered questions together with lack of compliance with court orders is sufficient for the court to simply enter a judgment or final order in favor of the homeowner. A similar mistake is often made by inexperienced trial lawyers who fail to proffer a motion to strike after their objection is sustained.
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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, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • 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.

 

Why securitization gives everyone a headache and nobody wants to do anything about it

A major problem in finance is that a lot of lawyers became lawyers because they did not like math, while a lot of bankers and traders became bankers and traders because they did not like to read. So lots of financial contracts will consist of 10 or 50 or 200 pages of text, which a lawyer will cheerfully write (or sullenly copy and paste, fine) but which her client will not read, and buried within those pages there will be like three formulas, which the lawyer will write and which might be wrong. The lawyer, who fears math, will write the formula wrong, and her client, who knows math but fears words, will not read it, and so the wrong formula will be enshrined in the contract. (It does not help that the formula will generally be written in words — it will look like a very long sentence rather than a formula — due mostly to typographical limitations. So it won’t look appealing to anybody.) — Matt Levine

The following article by Matt Levine in Bloomberg Opinion is a perfect example of the structural layering that was used in the creation, issuance, sale, and trading of derivatives and their progeny — insurance and hedge contracts traded in a market controlled by the issuers, who operate using a business name that appears to be unconnected.

It comes down to what the writer and reader each mean by the word “ownership.” And it turns out that there are as many definitions as there are people. Wall Street used this phenomenon to create legal vacuums into which they placed designated players to act as though a convenient definition was true for some purposes, but not for others. We already know some of those players by labels that do not describe anything about what the company does — servicer, trust, trustee, holder, lawyer etc.

Here is Levine’s Article

Didi VIEs

In my old life, I was a derivatives structurer at an investment bank, and an experience that I frequently had was getting calls like this:

Relationship banker: Our client wants to do ______.

Me: That’s illegal.

Relationship banker: Yes that’s our problem.

Me: Ah.

Relationship banker: We were hoping there was a … derivative?

Sometimes there was! If you came to me and said “our client would like to buy 8% of a public company, but not disclose her ownership,” I would say “well, under U.S. law you do have to disclose that level of stock ownership, but I could put you in a nice derivative that gets around that requirement.” The client could enter into a swap that gives her economic exposure to the shares, but not actual ownership, so she would not be subject to the laws about ownership disclosure. Everyone is happy, more or less. (No one is happy, and we have talked a few times about how mad everyone is that Archegos Capital Management was allowed to do this.)

So I have a soft spot for Chinese VIEs. The idea is that, under Chinese law, it is somewhere between “complicated” and “forbidden” for foreigners to own certain big important Chinese tech companies. This is a problem for those companies if they want to raise capital from foreign investors and list their stocks on foreign stock exchanges. But there is a solution. “Ownership” of a company is a complicated notion, a vague jumble of rights to elect directors and approve mergers and claim a residual interest in the company’s cash flows. You could break those things up and sell them separately. Write a profit-sharing contract that says “A will pay B all of A’s profits after expenses for the next 100 years, renewable at B’s option,” and hey that’s a residual claim on cash flows. (Or something vaguer: “A will pay B an annual consulting fee that B decides in its total discretion based on the economic value of the relationship,” etc.; not technically a residual claim but what else is it?) “B will provide management services to A and A will follow B’s instructions,” hey that’s basically control. “B will have the right to appoint a majority of A’s board of directors,” put it in a contract, it’s not actually stock ownership. Etc. Write some contracts that, bundled together, look like ownership, but aren’t ownership.

With Chinese companies this sort of thing is generally called a “variable interest entity.” You set up a company in the Cayman Islands that can be owned by anyone. The Caymans company enters into a series of contracts with the local Chinese company, giving it, not ownership, but certain carefully curated economic interests and control rights over the Chinese company. Then you list the Caymans company in the U.S., and people buy its stock, and they sort of pretend that they’re buying stock in the Chinese company — they sort of pretend that the Chinese company is a subsidiary of the Caymans holding company — even though really they’re only buying an empty shell that has certain contractual relationships with the Chinese company.

The problem with this is that it sort of sounds like you’re kidding. So here is the prospectus for Didi Global Inc., a Cayman Islands company that has certain contractual relationships with a giant Chinese ride-hailing company. (Technically the top-level Chinese company is called Beijing Xiaoju Science and Technology Co. Ltd., though colloquially it is “Didi Chuxing.”) Didi Global did an initial public offering of its American depositary shares last week; it has a market capitalization of something like $57 billion. Page 12 of the prospectus has a diagram of the corporate structure, which looks almost normal:

Looks like a holding company with some intermediate holding companies and operating subsidiaries, fine. The only weird thing is that somewhere near the middle there is a double arrow (representing “contractual arrangements”) rather than a single arrow (representing “equity interest”). Didi Global’s shareholders “own,” in some fairly normal sense, everything above the double arrow, right down to one “wholly foreign owned enterprise” (WFOE) in China. Everything below the double arrow — the actual ride-hailing business, etc. — is slightly askew; they just have contractual rights to do stuff with it.

The actual contractual rights are spelled out on pages 100-102 of the prospectus under the heading “Contractual Arrangements with Our Variable Interest Entities,” and they are worth reading. “Agreements that Allow Us to Receive Economic Benefits from Our Variable Interest Entities” is one sub-heading, describing a contract providing that “Beijing DiDi or its designated parties have the exclusive right to provide Xiaoju Technology with comprehensive technical support, consulting services and other services,” and that “Xiaoju Technology agrees to pay services fees, the amount of which is determined by Beijing DiDi on the basis of the work performed and commercial value of the services.” Is that a residual claim on the cash flows of the ride-hailing business? Maybe!

“Agreements that Provide Us with Effective Control over Our Variable Interest Entities” and “Agreements that Provide Us with the Option to Purchase the Equity Interest in Our Variable Interest Entities” are two other sub-headings. (The latter is less of a stock option and more of a transfer restriction: It’s not that Didi can practically buy the shares in the VIE; it’s that it doesn’t want the shareholders selling those shares to someone else.) And here’s this:

Spousal Consent Letters. The spouses of the shareholders of Xiaoju Technology have each signed a spousal consent letter agreeing that the equity interests in Xiaoju Technology held by and registered under the name of the respective shareholders will be disposed pursuant to the contractual agreements with Beijing DiDi. Each spouse agreed not to assert any rights over the equity interest in Xiaoju Technology held by the respective shareholder.

Somebody owns the ride-hailing business, in a technical legal sense, and it’s not Didi Global or its shareholders. You don’t want the actual owners, or their spouses, to go around selling the shares out from under Didi.

I don’t want to pick on Didi. This is a standard method for mainland Chinese internet companies to go public, Didi is just the latest in a long line of big companies to use it, the market has come to accept it, and Didi’s Chinese counsel has opined that “the ownership structure of our principal variable interest entity … will not result in any violation of the applicable PRC laws or regulations currently in effect” and that “the agreements under the contractual arrangement among Beijing DiDi, Xiaoju Technology and its shareholders are currently valid, binding and enforceable in accordance with their terms and the applicable PRC laws or regulations currently in effect.” It’s all fine!

But, again, it sounds like you’re kidding, and as that legal opinion sort of implies, the laws can change. So!

Regulators in Beijing are planning rule changes that would allow them to block a Chinese company from listing overseas even if the unit selling shares is incorporated outside China, closing a loophole long-used by the country’s technology giants, according to people familiar with the matter.

The China Securities Regulatory Commission is leading efforts to revise rules on overseas listings that have been in effect since 1994 and make no reference to companies registered in places like the Cayman Islands, said the people, asking not to be identified discussing a private matter. Once amended, the rules would require firms structured using the so-called Variable Interest Entity model to seek approval before going public in Hong Kong or the U.S., the people said.

The proposed change is the first indication of how Beijing plans to implement a crackdown on overseas listings flagged by the country’s State Council on Tuesday. Closer oversight would plug a gap that’s been used for two decades by technology giants from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. to attract foreign capital and list offshore, potentially thwarting the ambitions of firms like ByteDance Ltd. contemplating going public outside the mainland. …

Pioneered by Sina Corp. and its investment bankers during a 2000 initial public offering, the VIE framework has never been formally endorsed by Beijing. It has nevertheless enabled Chinese companies to sidestep restrictions on foreign investment in sensitive sectors including the Internet industry. The structure allows a Chinese firm to transfer profits to an offshore entity — registered in places like the Cayman Islands or the British Virgin Islands — with shares that foreign investors can then own.

While virtually every major Chinese internet company has used the structure, it’s become increasingly worrisome for Beijing as it tightens its grip on technology firms that have infiltrated every corner of Chinese life and control reams of consumer data. Authorities so far have little legal recourse to prevent sensitive overseas listings, as with the recent Didi Global Inc. IPO, which went ahead despite requests for a delay from regulators.

The additional oversight could bestow a level of legitimacy on the VIE structure that’s been a perennial worry for global investors given the shaky legal ground on which it stands.

Yeah that’s not the worst outcome. The worst outcome would be something like the Chinese government declaring “all these VIE contracts are actually a disguised form of foreign ownership, which is not allowed by the rules, so they are all void and your Didi and Alibaba shares are worthless.” That would … I mean, these VIE contracts are a disguised form of foreign ownership, and a fairly thin disguise. (It’s not like Chinese government authorities are unaware that foreign investors own shares in Alibaba; it’s just that they seem to accept this level of technical compliance with the rules.) This is a real risk! It’s in Didi’s risk factors:

PRC laws and regulations impose restrictions on foreign ownership and investment in certain internet-based businesses. We are an exempted company incorporated in the Cayman Islands and our PRC subsidiaries are considered foreign-invested enterprises. To comply with PRC laws, regulations and regulatory requirements, we set up a series of contractual arrangements entered into among some of our PRC subsidiaries, our VIEs and their shareholders to conduct some of our operations in China. …

We have been further advised by our PRC legal counsel that there are substantial uncertainties regarding the interpretation and application of current or future PRC laws and regulations. Thus, the PRC government may ultimately take a view contrary to the opinion of our PRC legal counsel. If the PRC government otherwise find that we are in violation of any existing or future PRC laws or regulations or lack the necessary permits or licenses to operate our business, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation: …

revoking the business licenses and/or operating licenses of our PRC entities; …

requiring us to restructure our ownership structure or operations, including terminating the contractual arrangements with our VIEs and deregistering the equity pledges of our VIEs, which in turn would affect our ability to consolidate, derive economic interests from, or exert effective control over our VIEs and their subsidiaries; …

If the Chinese government decides “VIEs are okay, but you have to get our permission to list them abroad,” that’s not a worst-case scenario even if it never grants permission. The bad news would be if the ones already listed abroad were just, you know, voided.

Anyway there is a whole mess of Chinese and U.S. government proclamations about cracking down on Chinese companies listing abroad. On the Chinese side, “Didi Plunges Below IPO Price as China Crackdown Brings U.S. Pain,” and “China’s crackdown on US listings threatens $2tn market.” And on the U.S. side: “Investment Review Panel Gets Wider Role Under Biden in Rivalry With China,” and “Republican senator Marco Rubio lambasts ‘reckless and irresponsible’ Didi listing.” If U.S. regulators ban Chinese firms from listing in the U.S., and Chinese regulators also ban Chinese firms from listing in the U.S., I guess it will be hard for Chinese firms to list in the U.S. But maybe they’ll find a way anyway. Maybe there’s a derivative.

Palantir SPACs

The basic deal, when a company goes public, is that anyone can buy its stock. You put out a notice saying “hey we have stock for sale, please buy it,” and then whoever is willing to pay the most buys the stock. The advantage of this, for the company, is generally that you can raise a lot of money. Deep liquid public markets are good for valuation; people are more willing to take a risk on buying stock that they can easily resell. So if you want money, having public stock is good. The disadvantage is that anyone can buy your stock. Activist investors can buy your stock and yell at you to change things. Hostile bidders can tender for your stock to try to take you over. Crazy retail investors can push your stock around. Index funds can buy your stock and sit around doing nothing. Etc.[1]

There is another model, in which you interview the people who want to buy your stock and choose the best ones. Price matters — people who will pay more for your stock are better for you than people who will pay less — but it is not the only thing. Buying your stock is a way to start a relationship, and you will try to sell stock to people who will be good relationship partners. Wise investors who can give you good advice will be more appealing than hands-off index funds. Hands-off index funds will be more appealing than mean activists who will boss you around and try to fire your managers. Selling stock to your competitors seems bad. Selling stock to your suppliers or customers to cement your business relationships seems good.

The second model is typical, though not universal, in venture-capital-funded private companies. VCs advertise themselves to startups as wise advisers, as helpful (but not intrusive) board members, as providers of operational expertise and introductions to customers and suppliers. This is so standard in venture capital that it is faintly scandalous that Tiger Global, a big hedge fund, does a lot of venture-type investing in private tech companies without all this relationship-building stuff; it just buys stock with money and leaves them alone.

One way to think about special purpose acquisition companies is that they are sort of venture-capital deals to go public. When you sign a deal with a SPAC, you get cash and a public listing (like you would in an IPO), but you also get a long-term relationship with the SPAC’s sponsor. The sponsor generally joins your board of directors, typically along with a couple of other fancy people that the sponsor has signed up to be directors. For many young companies, part of the appeal of a SPAC deal is that you get a bunch of highly qualified directors all at once, directors whom you couldn’t have gotten by just going public and trying to recruit them. (If you want Shaq on your board, merging with a Shaq SPAC is the way to go.) The sponsor will tout her industry connections and financial-structuring expertise and whatever else she brings to the table; you’ll sign with her not just for the money she brings but also for the rest of the continuing relationship.

Alongside the SPAC merger, a company will typically raise additional money, privately, in a PIPE deal (“private investment in public equity”). The PIPE investors will put in money alongside the SPAC, in order to make the deal bigger and provide more certainty. (SPAC investors have withdrawal rights, so if you sign a $500 million SPAC deal you can’t be sure of getting $500 million; if you throw in a $400 million PIPE alongside the SPAC you’re guaranteed at least the $400 million.) The PIPE investors will often be the sorts of big boring institutional investors you’d get in an initial public offering, but not necessarily:

While most PIPE participants are institutional investors, they sometimes include strategic investors.

And that’s where Palantir (ticker: PLTR) comes in.

To date, Palantir has participated in at least eight SPAC-related PIPE transactions, investing well over $100 million, using the deals as a way to win business from emerging companies that can benefit from Palantir’s big data analytics software. In effect, Palantir is providing capital up front in return for a multiyear commitments to use the company’s software.

Obviously Palantir could just go buy stock in public companies, on the stock exchange, if it wanted to, but it doesn’t; that has none of the relationship-building advantages of this. Or it could invest in venture rounds, if it wanted to, but those are sometimes small and exclusive. A SPAC PIPE is like a venture round but for an about-to-be-public company.

Homeowners defending foreclosures must come to terms with the content of existing laws and rules and stop complaining about how those laws and rules should have been drafted.

[Excerpt from my upcoming book “KEEP YOUR HOUSE”]

Most discussion amongst homeowners centers on ways to “escape” debt, instead of ways to undermine the enforcement of a claim that is not based on any real duty or debt. The people looking for the escape or magic bullet are always frustrated by loss and their preception of bias when the judge is only doing his or her job. The people who are at least willing to consider that there is no “escape” involved are the ones who prevail in defending false foreclosure claims.

Almost all losses by homeowners in court are based on their erroneous perception of the burden of proof. They don’t even know what “burden of proof” means and why should they? They think by raising questions and not getting an answer they have proved that the claim is invalid. Under existing laws and existing rules of procedure they are wrong. But using those same laws and rules, they can and should win. Homeowners defending foreclosures must come to terms with the content of existing laws and rules and stop complaining about how those laws and rules should have been drafted.

But, if consumers want to stop this horrific behavior by the banks, then they do need to address at least one area that has been overlooked — the forms used as “guides” in foreclosure proceedings all assume a valid claim without requring any party to actually assert the basic elements of any civil case. This assumptions leads to presumptions at law regarding the existence, ownership and authority to collect any money from the homeowner. 

Sometimes the homeowner will realize later that they missed their chance and get mad at the system or whoever is telling them that they missed their chance. You can’t blame them. This is a problem that should have been addressed by government enforcement from the start and every single agency that could have done it failed to even make legitimate inquiries when the proverbial s–t was hitting the fan in 2004-2008. Even Alan Greenspan, as chairman of the Fed, thought that “market forces” would make the necessary corrections to a scheme which he admitted that neither he nor anyone else in the Federal reserve understood, despite the presence of more than 100 PhDs.
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So my goal is to continue presenting information and methods of analysis to prevent future forced sales of homes for an illegal scheme. In my upcoming book, I am trying to make it readable but there is a heavy emphasis on the rules of procedure, the rules of evidence, and what actually wins a case. The biggest hurdle to overcome is the lay interpretation of the justice system as serving to provide a venue for one side or the other to prove something. That only applies to one who is making the claim. The defense side is not to prove something. Defense — by definition in the legal system — is the process of undermining the claim. This nuance makes all the difference between success and failure.
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This is not to say that there are no claims that a homeowner could make. But most homeowners and some lawyers make the mistake of filing a complaint that consists entirely of conclusory allegations rather than factual allegations. And they forget that once they allege something, they need to prove it or else it will be dismissed — the very fate they are seeking for their opposition’s claims.
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In its simplest form, the evidentiary question is revealed in any analysis of an assignment of any instrument that purports to be an assignment of mortgage. If it conforms to the facial requirements (as per statute) of an assignment of mortgage and executed with the formalities required by statute it is presumptively an assignment of mortgage.
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Being a facially valid assignment of mortgage means that it can be used as primary evidence that an assignment of mortgage has occurred. Under existing law, a valid assignment of mortgage can only occur when the underlying obligation is purchased for value. So the presumption as to the facial validity of the assignment of mortgage means, unless contested, that a transaction occurred wherein the underlying obligation was purchased for value as part of a transfer of ownership of the lien rights.
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The goal of the homeowner in litigation is to reveal the false nature of the instrument by attacking the corroborating evidence. By aggressively pursuing discovery relating to the corroborating evidence, the homeowner can win.
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  • If the instrument says to is executed “for value received” the corroborating evidence would be identification and documents showing such a transaction actually occurred.
  • If the instrument shows the signature of someone as “executive assistant signer” or some such designation, the corroborating evidence would be identifying the person, their title, who employed them, what authority they were given and how that authority was transmitted.
  • If the signature appears on the document, the corroborating evidence would how that signature was placed on a document and whether any original exists.
  • If the signature appears as attorney in fact, the corroborating evidence would be the original power of attorney and the authority of the people executing that power of attorney and all side agreements relating thereto, including the “servicing agreements.”
Experience in virtually all Cases I have reviewed — thousands of them — shows that the foreclosure mill will not give a direct response or answer to these inquiries even though they’re legally required to do so. But it is also true that without a court order compelling them to produce it, the fact that you asked has little relevance. This requires an understanding of motion practice.
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But once the homeowner gets to the point where they are legally entitled to an order of sanctions because the foreclosure mill can’t or won’t answer then the foreclosure mill is no longer entitled to rely on the presumptions arising from the facial validity of the assignment of mortgage.
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That means that the transaction MIGHT exist but that the foreclosure mill may not use the assignment of mortgage as evidence of such a transaction. That is where the magic bullet occurs — after months and probably years of litigation, the action gets dismissed either voluntarily by the foreclosure mill (who will try again later with a different judge) or involuntarily dismissed by the judge in the absence of any facial evidence to prove their claim.
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The progress of litigation is backward in foreclosures. Usually, the claim in any civil suit is that there is a duty owed by the defendant to the plaintiff. Then there is an allegation that the duty was breached and there are specific factual allegations that demonstrate the breach.
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And finally, there is an allegation that says the plaintiff suffered some sort of injury from the breach of duty. In foreclosures, because of archaic forms and assumptions that don’t apply in the era of securitized loans, the only allegations required are those that involve conclusory allegations about the existence of the note and failure to make a payment.
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Unlike all other civil actions, there is no allegation currently required that the payment was due to the Plaintiff, and frequently there are no allegations that the plaintiff even exists, much less that it owns a claim against the homeowner and has suffered an actual financial loss arising from the behavior of the homeowner.
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So the homeowner is stuck with litigating a case that should never have been filed in the first place — for months and years. It is up to the attorney for the homeowner to point out, sometimes aggressively, that there is no direct assertion of ownership or loss and that any presumption of such facts is erroneous in the absence of proof.
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But all of this is deeply dependent upon the desire and willingness of the homeowner to perceive their status and their position as just and proper, in both a legal and moral sense. I have spent thousands of hours explaining why any other perception of their transaction is wrong.
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In the era commencing around 1995, the transactions were either not loans or were extinguished as loans. the money came from Wall Street who was selling securities that representing a sale of the advance made to homeowners several times over.
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Transactions were either originated indirectly by the investment banks or taken over by the investment banks (without any incidence of ownership that might subject them to civil or criminal liability relating to the origination or servicing). The goal was to avoid lending and avoid being a lender. But homeowners persist in viewing the transactions as loans or debts owed to the people who are making the claim even though this is not the case in nearly all collections and enforcement proceedings.
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Homeowners were entitled to share of such a scheme — particularly in view of the fact that they never received a hint of any disclosure of the scheme. The amount to which they were entitled was determined by the investment banks, who have them that money or took over the transaction with a lie about the existence of a loan account receivable and the existence of a creditor.
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The amount of the payment was what was described and believed to be a loan because that is what the homeowner was seeking. But the money was purely an incentive to sign papers that would launch the securities scheme. The amount the homeowners received was their share of the scheme. The trick was getting the homeowners to agree to pay it back to anyone who made a claim because they thought it was still a loan.
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The truth is that nobody cares whether the foreclosure mill wins or loses individual cases — as long as the loss does not threaten the real business at hand, to wit: the sale and trading of securities.
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, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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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! Stolen Consent and What You Can Do About It! 6PM EDT 3PM PDT

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Neil Garfield, Esq.

Call in at (347) 850-1260, 6pm EDT Thursdays

 

If you learn anything it should be this: cases are not won or lost based upon the merits of each side. They are won and lost based upon perception and procedure.

Everyone already knows what I have been teaching for decades, Winning cases is about working the system not about being right. That is exactly why hardly anyone trusts the system or lawyers or judges for that matter.

But other than a few courageous homeowners, everyone seems to forget that simple proposition. And so because they believe that the entire foreclosure scheme for the past two decades has been one elaborate fraudulent scheme they assume they have a right to win. And they think the lawyers and courts should admit that the scheme is fraudulent and basically mostly a PONZI scheme.

There is no such thing as a right to win. There are only winners and losers who know how or who don’t know how to work the system.

The problem for homeowners who seek to fight is that there is a nearly religious belief that this is about being right rather than undermining the right of anyone to initiate foreclosure procedures against them.

They want to prove their opposition to be wrong. It is not enough for them to prove there is no claim against them and so they go on to lose and prove the erroneous proposition that homeowners cannot win. They can win and they do win.

Is it a trust or not?

As it relates to ownership of the subject underlying debt in a claim for foreclosure it is almost certain in every case that no trust exists.

As it relates to ownership of some hypothetical interest in something that has nothing to do with the foreclosure, it is possible that a successful argument can be made for the existence of a trust, assuming the necessary elements are present.

You need to know the legal elements of a trust entity that can be recognized at law. Every trust must have these elements.

  • Trust agreement
  • A trustor or settlor
  • A trustee
  • Beneficiaries who are identified and named
  • Some legally recognized interest, property or investment that has been entrusted to the trustee to manage on behalf of the beneficiaries. (also known as the res — the thing).
In most cases a trust agreement exists but is not disclosed. That is because the beneficiaries are identified as investment banks. The trust agreement also reveals that the trustee and the trust only have an interest in the title documents naming the trustee for the trust.
*
The trust agreement specifically disclaims any right, title or interest in any claim or obligations arising from such documents. That means there is an express written disclaimer of any claim against any homeowner. This in turn means that neither the trustee or the trust can legally claim to possess legal standing unless you tacitly or overtly admit it. If you are deemed to have admitted anything about the existence and relevancy of the trust the judge has no choice but to treat it as a trust — probably a trust that owns your underlying obligation.
*
So instead, the Foreclosure Mills use pooling and servicing agreement that they referred to as a trust agreement. But it is not a trust agreement if it does not contain the required elements of a trust. So instead, the Foreclosure Mills use a pooling and servicing agreement that they refer to as a trust agreement. But it is not a trust agreement if it does not contain the elements referred to above.
*
But if you refer to it or accept it as a trust, the judge has virtually no discretion. If both sides agree it is a trust, then for purposes of the case, it is a trust.
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Practice Hint: Don’t admit or refer to the claimant as a trust. Either the trust does not legally exist or it barely exists but that fact has no relevance to ownership of your obligation. The presumptions arising from apparent possession of the promissory note are easily defeated if you do not admit the existence of the trust and if you demand a copy of the signed, dated trust agreement.
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, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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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 difference between forensic and legal analysis

You need both. One identifies the factual issues that are inconsistent with the claim against the homeowner. The other identifies the legal issues asserted by the foreclosure mill that are not supported by fact and the procedural issues and hurdles you must jump over to mount a successful defense.

The obvious problem is that homeowners do not know where to turn when presented with a claim for administration, collection or enforcement of a written promise that they issued on a promissory note. Back in the 1960s the United States Congress determined that homeowners did not know what they were signing when they were executing documents supporting a reported loan transaction. That is why they passed the Federal Truth in Lending Act. (TILA)

TILA provided the minimum foundation for disclosures and conduct in connection with such transactions or anything that looked like a loan transaction. But ever since the passage of that legislation, it has become custom and practice in the industry to avoid or escape the requirements in the act or any liability for the violations.

We are at the point where nearly all of the documents that are used in connection with transactions with homeowners are faked in whole or in part, in order to create the appearance of compliance and facial validity. This shows up in affidavits and declarations that are tendered to the court, falsely, in support of nonexistent claims for nonexistent debts.

“Nonexistent debts” are debt claims that have no foundation in fact as to the party making the claim. Debt is a duty. If you have no duty to pay the party making the claim, then as between you and that claiming party, there is no debt. And that is precisely where nearly all foreclosures filed in the U.S. for the past 2 decades should have failed.

They mostly didn’t fail because the perpetrators knew more about legal analysis and court procedure than the victims — homeowners. My objective is to give you as much information as possible so that they do fail most of the time, which in my opinion is as it should be — for reasons that I have stated elsewhere on this blog.

Judges look at both of the documents and the affidavits and declarations through the lens of an assumption that the transaction with the homeowner is exactly what the Foreclosure Mill says it is. Because of currently accepted methods of pleading and procedure, the manner in which Foreclosure claims are litigated is contrary to the manner in which all other civil claims are litigated.

This is the basis for the current movement to petition the Supreme Court of various states to change the pre-approved forms for pleading or initiating any foreclosure action. The simple basis for that is that in all other civil claims, the party making the claim must assert and not merely imply their standing to bring the claim.

This anomaly has resulted in tens of thousands of cases in which after years of litigation the court is forced to dismiss the foreclosure because it never should have been filed in the first place. And with increasing frequency, the courts are denying the award of attorney fees to homeowners.

After spending thousands or even tens of thousands of dollars the homeowner is faced with a court victory which only occurred after years of litigation only to find that the claim is brought again with some minor changes in the wording of the falsified documents.

Those changes neither assert nor change the reason why the first action was dismissed but the homeowner is forced once again, to completely litigate a case that never should have been filed. All of this occurs because, contrary to law, the forms used in most states don’t require the claimant to assert a duty owed by the homeowner to the party making the claim, the breach of that duty and the current damages suffered by the claimant as a result fo that breach,

My opinion is that virtually none of the foreclosures should’ve been filed in the first place because all of the Foreclosure players were doing it for profit and none of them were doing it for restitution of an unpaid debt as shown on a loan account receivable on the books and records of some creditor who had paid value for the underlying obligation.

So here is my analysis of one declaration that popped up in Hawaii. It can be used as a guide for the analysis of any other documents that are submitted by or on behalf of the Foreclosure Mill. Please note my use of the words “by or on behalf of the Foreclosure Mill.” This is because my research and investigation have yielded a conclusion, to wit: virtually all documents produced in the name of a company that is designated as a trustee, servicer or law firm are actually produced by a third-party vendor who in most cases have no relationship with the trustee, servicer or law firm.

Minh Nghiem DECLARATION OF COMPLIANCE
  1. “Document Execution Associate” implies that the sole job of the person whose signature appears at the end of the document is to be an associate of a document executioner. This is double talk. Being tasked with the job of affixing one’s signature, whether it was by hand or produced by mechanical means (most likely) is NOT the same as being authorized to sign it by someone who has the authority to task that person to execute such a document. The document does not even recite the customary “Prepared by” stamp or designation. This is a common wording trick used by or on behalf of the foreclosure mills who attempt to make claims against homeowners. We don’t know anything about whether the person whose name appears in the declaration knew or had any powers associated with making declarations on behalf of multibillion dollar banks or implied trusts allegedly managed by such bank. The notarization occurs far from the office of either the designated servicer or the designated “trustee.” PRACTICE NOTE: The approach to the court should be civil but prepared to go against the judge’s inclination to regard the attack as just a  technical means to avoid the consequences of an unpaid debt. Start with your mantra and keep repeating it: “Your Honor, our defense narrative is that there is no obligation in relation to any of these parties who are participating in this illegal foreclosure attempt. Our position is that these parties are part of an illegal conspiracy who are pursuing   claims in derogation of both the rights and duties of the homeowner and the rights of whoever has paid value for the underlying obligation under Article 9 §203 UCC as adopted by our state statutes verbatim.
  2. “Under penalty of law” is not the same as under penalty of perjury. There is no agreement for the signor that if the contents of the document are false the declarant agrees they are committing perjury, subject to prosecution. Instead upon inquiry the person, if they exist and can be found, will and does regularly delcare that they had no idea what they were signing or they will deny that they have ver singed anything.
  3. No declaration of personal knowledge, therefore the declaration is hearsay subject to motion to strike.
  4. Declaration of “authorization” does not state who authorized her and how.
  5. NO declaration of employment or official capacity. Motion to strike should be directed at witness competency — the components of which are — OATH, PERCEPTION, MEMORY AND COMMUNICATION. She perceived nothing, she might not have taken an oath (no recital that she did), her memory of personal perceptions is nonexistent. As for communication it is doubtful she ever prepared, read, executed or understood what was in this declaration.
  6. Declaration does not state foundation for making the the statements that Mr. Cooper is authorized to sign on behalf of U.S. Bank.
  7. The Declaration does not state the foundation for making the statements that U.S. Bank, either as trustee or in its individual capacity (or the implied trust) possesses the legal authority to grant the authority to issue, sign or deliver this declaration.
  8. Declaration does not state foundation for making the statement that U.S. Bank, either as trustee or in its individual capacity (or the implied trust) possesses ownership of the underlying subject obligation pursuant to Article 9 §203 of the UCC as adopted by Hawaii statutes.
  9. Declaration does not state foundation for making the statement that U.S. Bank, either as trustee or in its individual capacity (or the implied trust) possesses the legal authority to administer, collect or enforce the underlying subject obligation.
  10. Declaration does not state foundation for making the statement that Mr. Cooper performs servicing functions or is otherwise a servicer as the term is commonly used to describe a company that processes receipts and disbursements of money ancillary to a loan receivable account maintained by the creditor.
  11. Declaration does not state foundation for making the statement that the transaction is or was a loan transaction since the declarant obviously has left out any assertion that she knows anything about the transaction.
  12. Declaration is carefully worded to describe a “Duty” as “servicer” without stating that Mr. Cooper has the authority granted by any creditor. NOTE: Normal wording taken from other documents that are used by U.S. Bank and other banks is to say that Cooper is authorized to perform specified servicing functions on behalf of an identified (not implied) creditor as provided in some referenced document like a servicing agreement. Such relationships do not exist in a vacuum. Such wording is evidence of deception. The sue of the word “Duty” is usually applied to provide the basis of a claim against the company identified as a servicer. It is not applied as the basis for asserting legal authority without stating that it is asserting legal authority.
  13. The declaration asserts ownership of the note and mortgage seeking the reader to infer that the “Plaintiff” has paid value for the underlying obligation in exchange for ownership of it. We know that did not happen. So note that the declaration fails to state that anyone has purchased the obligation, legal debt, note or mortgage from anyone who owned it. Note also that the declaration fails to identify the source of authority to enforce the note. This might not be the subject a motion to strike but should be the subject of intensive discovery, the result of which in all probability will be that that no transaction ever occurred involving the “plaintiff” in which ownership or authority was granted to the Plaintiff by any creditor who owned the underlying subject obligation by virtue of having paid for it.
  14. The last point is that it is highly unlikely that the law firm didn’t know that this was a fabricated, false document that was either forged or signed without authority. So an interesting point is directing the discovery and motions to compel and motions for sanctions in points about which the lawyers will provide no answers — daring you to pursue them. Once you get an order of sanctions on the relevant topics, you might add a new motion for sanctions directed against the Plaintiff and its attorney for intentionally filing false instruments. Perhaps even a referral to the state bar association.
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, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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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.

 

Broward judge ignores tainted bank documents to justify foreclosures, watchdog report charges

The only thing I would add to this article is that homeowners and lawyers should find ways of supporting floridabulldog.org and attorney Bruce Jacobs. He has the courage to be “discourteous” to liars and thieves and those who are willing to wink and nod as fake documents are used to press false claims.

see https://www.floridabulldog.org/2021/07/gundersen-ignores-tainted-bank-documents-to-justify-foreclosures/https://www.floridabulldog.org/2021/07/gundersen-ignores-tainted-bank-documents-to-justify-foreclosures/

 

Keep the envelope!!!

… the point you are (or should be) asserting is that the company being used as a source of documents and source of testimony (the apparent servicer) about the homeowner transaction had nothing to do with the origination, maintenance, administration, accounting, custody, collection or enforcement of the rights and obligations arising from the original transaction. Therefore nothing it wants to say and no document it wants to produce as a report is admissible into evidence. It is ALL HEARSAY. And if it was admitted over objection and then you develop this point, it is subject to a motion to strike, and then a motion for dismissal because there is no other evidence left to consider.

Hat tip Summer Chic

Our investigations have revealed that in more than 99% of all homeowner transactions, correspondence, notices, response to QWR, response to DVL, and response to forbearance or modification is not generated by the company claiming to be the servicer. Further, our investigations have revealed that although you might direct your letter or payment to the name of the company claiming to be a servicer, it is not received by them.

Through a network of third-party outsource contracts the actual work of receiving, depositing and disbursing the proceeds of payments is conducted by other companies. The actual work of sending you responses, correspondence and notices is also performed by third parties. And the work of accounting for payments is performed by the companies that actually received those payments — not the apparent servicer.

Those third-party companies are subject to agreements for “contract administration.”  Some of them are referred to as “corridor” agreements (most commonly with Bank of New York Mellon. None of the  third parties are subject to the control, instruction or ownership of the company that is pretending to be a servicer. Even the call center is usually manned by non   -employees or contractors of the apparent servicer. The illusion is complete. The apparent servicer is a third party to everything about the homeowner transaction but it looks like it is in charge.

Since several different companies perform different tasks that are attributed to the apparent servicer, and those companies do not communicate with each other, the responses you get will be inconsistent and even relate to the wrong transactions. It will also not be the response of an actual servicer as the term is generally understood — i.e., the company that receives and disburses money from payments received from homeowners. The structure requires one company to receive the payment, another company to account for it and still another to disburse and account for that function.

There is no signature on most correspondence you will receive because there is very little human intervention in the process. That creates a seemingly airtight argument for plausible deniability for “mistakes.” But that seal can be broken by skilled trial lawyers.

The bottom line is that you’re not corresponding with or communicating with the company claiming to be a servicer. One of the ways that you can corroborate this is by holding onto all envelopes that your receive that appear to bear the name of the company you thought was a servicer. You will note, as Summer Chic, has pointed out, that the zipcode will almost never correspond with the address of any office operated by the company claiming to be a servicer.

That corroborates but does not prove that the company is not performing servicing functions and in the courtroom, it is important to understand the difference.  But corroborating evidence is like circumstantial evidence — the more you have the more you can argue you proved the ruth of the matter you’re asserting.

And in this case, the point you are (or should be) asserting is that the company being used as a source of documents and source of testimony about the homeowner transaction had nothing to do with the origination, maintenance, administration, accounting, custody, collection or enforcement of the rights and obligations arising from the original transaction. Therefore nothing it wants to say and no document it wants to produce as a report is admissible into evidence. It is ALL HEARSAY. And if it was admitted over objection and then you develop this point, it is subject to a motion to strike, and then a motion for dismissal because there is no other evidence left to consider.

A common example to look for is who is paying the taxes. If it is CoreLogic, something is up. It obviously does not claim to be a creditor or a servicer. In discovery, the homeowner should subpoena a person from CoreLogic, duces tecum, and ask for agreements that show why CoreLogic would pay for the taxes. CoreLogic is supposedly just a computer processing company.

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

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.

You are Invited to APON’s Online Q & A 4:30 PM EST, Tuesday, July 6th

PRESS RELEASE—for immediate release

July 1, 2021

For inquiries, please contact:

admin@apropertyownersnetwork.org

941-237-0558

American Property Owners Network Plans to Help Pandemic Victims Fight Foreclosures

You are Invited to APON’s Online Q & A 4:30 PM EST, Tuesday, July 6th

Click Here for the link and contact information to register (subject to approval) for the public to join the introductory Webinar):

The American Property Owners Network (APON), a new non-profit organization whose mission is to help unite homeowners and property owners against massive lending and foreclosure fraud, is going to court in Florida with a formal action to change foreclosure court process and forms.

If successful, the APON suit could greatly limit the ability of current foreclosing parties to take people’s homes and property. Currently millions have lost their homes in court actions which are often based on false claims of ownership, and APON’s court action would disallow such foreclosures . APON will be hosting a Zoom Q & A Webinar/Press Conference regarding the new organization, the current state of the foreclosure debacle, and the Florida Supreme Court action on Tuesday, July 6th at 4:30 pm.

APON’s court action, a formal petition defended by an attorney, formed out of concern about the undue influence of global banks and the financial sector over our lives, as well as how the pandemic will affect homeownership. Nationally-known financial expert and foreclosure defense attorney Neil Garfield and GTC Honors will lead the fight at the Florida Supreme Court for APON.

The petition to the Florida Supreme Court is a formal proceeding that would essentially conform rules, forms and court procedures to the current realities arising from claims of securitization of debt. This situation gives rise to false documents being filed in court by what appear to be Trusts backed by big financial institutions, which actually have no legitimate claim, or right, to any debt.

APON is hoping to attract anyone in the general public who cares about fairness in our courts, as well as those who may want to be considered in any APON mass actions against those responsible for fraudulent foreclosures, and/or could benefit from APON members’ online self-help groups. They also seek to support the many lawyers who have faced disbarment for representing homeowners. The webinar on Tuesday will be an introduction to a CLE series APON plans to offer: How to Successfully Defend a Foreclosure.

At the upcoming introductory webinar, those who are members of the public or APON who are victims of fraudulent foreclosure will ask questions first, followed by the press. Attendance is free, although APON is requesting that people become members, if possible, when registering (free attendance is being offered through the Living Lies blog only, currently). Any donations to APON will be used to support APON’s litigation.

Here is the link and contact information to register (subject to approval) for the public to join the introductory Webinar):

https://us02web.zoom.us/webinar/register/WN_obbjarC1RKm4Iw2BgMqUbQ

To find out more, to donate, to sign up to be a member and/or to volunteer, go to www.apropertyownersnetwork.org.

PRESS INFO Press who wish to attend should email APON Secretary Ann Chin at admin@apropertyownersnetwork.org for a “press pass” (the link to the actual Webinar).

American Property Owners Network’s mission is to obtain justice for victims and survivors of unlawful foreclosures through political and mass judicial action; to restore the integrity of public land records and the judicial processes; and to educate the public. Go to www.apropertyownersnetwork.org to find out more.

Successful and Unsuccessful Appeals.

you can use your knowledge … to ask for things that the foreclosure mill will never provide even though they are required to do so under the rules of civil procedure and more importantly under the terms of a court order issued by the judge commanding them to comply with the discovery demands. That is where most homeowners prevail in the trial court and that is where most homeowners are able to win on appeal despite the heavy statistics against them.

By the time you get to appeal the appellate judges and their clerks are not interested in the truth of the matters asserted and accepted into evidence in the trial court with certain exceptions that don’t really apply to foreclosures.

The presence of a company claiming to be a servicer strongly indicates that your transaction was subjected to a process of securitization in which your underlying obligation was extinguished. This means that the loan receivable account was either never created or was retired. You will never prove that statement.

But you can use your knowledge that the statement is true to ask for things that the foreclosure mill will never provide even though they are required to do so under the rules of civil procedure and more importantly under the terms of a court order issued by the judge commanding them to comply with the discovery demands. That is where most homeowners prevail in the trial court and that is where most homeowners are able to win on appeal despite the heavy statistics against them.

Trial litigation is the time and place where properly presented narrative, objections and motions are filed.

On appeal, the best rule of thumb is that the appeal will be denied statistically and that it will especially be denied if you do not cite the specific errors that you are saying were committed by the trial judge. The second rule of thumb is that you will most likely lose on appeal unless you can present convincing arguments that the procedural error (the only kind of error that is normally accepted by the appellate court) resulted in preventing the homeowner from pursuing a credible defense narrative — and that narrative if true, would result necessarily in a different final judgment or ruling.

The test employed by all appellate courts seems to be this: if there is any basis for affirming the trial court’s behavior, order, judgment or decision they will do exactly that. This comes from the centuries-old practice of keeping all decisions as final except in the face of clear error.

Any argument that complains about the trial judge’s bias, onions, or personal judgment is likely to fail. Such arguments are viewed by the appellate court as attempts to have the appellate court sit as a trial court and reconsider whether the greater weight of the evidence supported one side or the other. That is not the function of appellate courts, and they are correct when they affirm a negative decision in the trial court.

BUT — if you can point specific instances in which the homeowner was denied due process, then you have an issue that will be reviewed and could result in the reversal, remand and instructions to the trial judge. This is not an easy issue. The most common is that summary judgment was granted despite the presence of outstanding discovery demands.

But if the court record contains tacit or express admissions about the “loan” being sold into the secondary market or that it was securitized, it will be difficult, if not impossible, to show that the trial judges rendition of a Final Judgment of Foreclosure had no possible foundation in the record.

Many pro se homeowners get led astray looking for magic bullets. So they point to defects that have both factual and philosophical merit. But the courts tend to review such arguments as being an attempt to relitigate the foreclosure. Defects in documents or procedures are not reversible error ipso facto. Such defects must be shown to have actually altered the outcome of the case if the defects had been properly presented to the court in a timely manner.

In many cases I must deliver my opinion that the homeowner’s chance to have presented such defects expired regardless of whether you presented them or not — unless there is later acquired evidence that you could not have otherwise obtained (best if it relates to facts that occurred after judgment). But where the case has progressed so far procedurally — such as in what is generally reported to me — other options, in my opinion, present better strategies with a higher likelihood of success or a satisfactory result.

In plain language, a lawyer can be retained to review the briefs but the great likelihood is that he/she will forecast failure on appeal and it might even be to your advantage to dismiss the appeal. Check with local counsel. A negative opinion from an appellate court is one more nail in the coffin of your defensive narrative and strategy. It raises additional negative inferences and legal presumptions.

Of all the possible strategies I have seen in thousands of cases the one that works best, by far, is the case where the homeowner is able to get back into a position of making discovery demands that relate directly to the core issues of the case. This may involve complaints, under the FDCPA, FCRA, RESPA and even TILA. And this is probably going to be supplemented by a petition for Declaratory, Injunctive and Supplemental Relief.

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

CLICK HERE FOR THE 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.
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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)
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! American Property Owners Network (APON) Coming to Your Town 3PM PDT 6PM EDT

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

with Charles Marshall and Bill Paatalo

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

Bill Paatalo will join host Charles Marshall to discuss how lenders behind securitized trusts such as US Bank, has no contact with the so-called certificateholders who would presumably possess bona fides to confirm the status particulars of the mortgage debt. Moreover, certificate holders cannot even be identified typically, nor can accounting of payments to certificate holders be verified.

First though, Charles and Bill will discuss the American Property Owners Network (APON), a new non-profit organization whose mission is to unite homeowners, ultimately nationwide, and rental property owners against the massive lending and foreclosure fraud perpetrated across the country since the Mortgage Meltdown of 2008. APON is coordinating with Neil to bring a formal, legal petition to the Florida Supreme Court to bring not just uniformity but fairness to Florida legal procedures used to adjudicate legal disputes involving mortgage debt securitization. The goal is to enable legal procedure which would disable the institutional lenders and mortgage servicers from continually gaming the legal courts as they do now, and instead enable homeowners to meaningfully have their legal evidence properly considered.

There will be a webinar presented by APON with a Question and Answer session this July 6, 2021, 430 pm EDT. Mark your calendars, and see Neil’s Blog for more information.

Finally, Charles will discuss the latest on the Covid-19 foreclosure and eviction front, with an update on how both the national foreclosure and eviction moratoriums have been largely extended through September 30, 2021, with states like California continuing their moratoriums as well.

The Effect of Provisions for Waiver and Release in Forbearance and Modification Documents

It is not the act of forbearance that admits the existing default. It is the agreement or forbearance that creates an apparent waiver and release of all claims or crimes that might relate to challenges to the existence of the underlying obligation, existence of a financial loss (default), and challenges to any claim of Rights to administer, collect or enforce the alleged obligation that is due to the Creditor.

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Most people look at the agreement and “realize” that they have signed away their rights. But it is not that simple. Agreements, or parts of agreements, that violate public policy or other state law, or which are unconscionable, or which have been procured under trick or deceit, are void. So are agreements that were not authorized in the first place. But in order to reach that conclusion, you need a court order that says that the homeowner’s waiver is not valid. This would also raise the issue of whether or not the forbearance agreement created an entirely new loan agreement.

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There can be little doubt that nobody would sign a forbearance agreement but for the fact that they were under duress (threat of foreclosure and eviction) and coercion (repeated illegal correspondence and phone calls). There also can be little doubt that the agreement itself a subject to question simply because it does not identify any creditor, nor does any creditor acknowledge or approve of the forbearance agreement.
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If anything it appears to change the original contract to a designated creditor instead of a real one. This is the bridge concocted by Wall Street lawyers to get rid of that pesky problem of the absence of loan receivable account, anyone who could own and anyone legally authorized to administer, collect or enforce the underlying debt, note mortgage, or right to collect.
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The Foreclosure Mills are well acquainted with the fact that the waiver Provisions contained in a modification or a forbearance agreement are probably not enforceable. Transaction lawyers insert such provisions because in most cases either the opposing party or their attorney assumes the provision is valid. It’s another hurdle because like all foreclosure claims it raises the presumption of legality and enforcement that can be contested but rarely is contested.
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This is another one of those cases where assumptions create obstacles to a successful challenge against a party who purports to execute a substitution of trustee, notice of default, notice of sale, and “verified” complaint.
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The lack of knowledge of the procedural requirements in court, combined with the failure to research the enforceability of waiver and release documents are a deadly combination for the prospect of a successful outcome of a contesting homeowner.
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For those of you who wish to perform legal research and analysis in connection with fraud upon a homeowner and fraud upon the court I recommend the following article as a starting point for the research and analysis. (see attached)
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, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

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.

Interesting SCOTUS Decision May Prevent Removal of Certain Lawsuits to Federal Court Where They Normally Die

The full impact of this decision may not be known for years. But the immediate impact is that it gives homeowners a chance to move for remand back down to state court after attempted removal to Federal Court. Unless clarified later, which does not seem likely, this decision could mean that the Supreme Court of the United States says that Federal Courts have no jurisdiciton to hear statutory claims that can be filed in state courts. Here is the bonus: most statutory claims that can be filed under FDCPA, FRCA, RESPA, TILA etc can be filed in state court.

Specfically this means that if no actual damages are alleged (i.e., only statutory damages are claimed) then the Federal Court has no jurisidicition. So the court in attempting to minimize actions by consumers who are victims of illegal collection activities merely diverted them to state courts.

One of the interesting subissues is that these statutes may contain provisions (FRCA) for the judge, in his/her discretion to award punitive damages and this seems likely for class actions to rise rather than fall as seems to be intended by SCOTUS. Withte higher prospect of obtaining attorney fee awards and punitive damages this might make the cases more interesting.

see https://www.jdsupra.com/legalnews/scotus-deals-blow-to-federal-court-7203875/

TransUnion LLC v. Ramirez

Here is what is really wrong with foreclosure process

While I agree that in most cases there was no substantive transaction with homeowners or that the transaction was not correctly identified as to its components, I do not agree that there are no mortgages or notes.

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They plainly exist and even if they are not supported by consideration or are otherwise procured by fraud, duress or other illegal means, they still exist. As long as they comply with requirements for facial validity they also have legal effect until a timely and proper challenge is made by the victim.
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It is inappropriate to demand that a court be omniscient or even curious beyond the facts presented. The courts are limited to those facts and implications that have been presented, not those that could or should have been presented — at the time and place where the court record was open for receipt of such information. In nearly all cases the challenge to the initial presentation is nonexistent which results in the presentation being taken as true.
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The real problem here is that in virtually 100% of all cases that are won by homeowners the reason is that the case should never have been filed in the first instance. This determination only comes at the tail end of litigation instead of where it belongs — at the beginning.
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And this is caused by out-dated forms and procedures that allow for implications and presumptions of fact without the claimant ever being required to allege that the Defendant homeowner breached a duty owed to the Plaintiff and suffered a loss as a result of that breach.
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The law is clear. It is the forms and accepted pleadings that are not clear. The attorney should be required to assert that due diligence had been performed and an officer of the named Plaintiff should be required to assert the existence and right to administer, collect and enforce the claim, along with the date of the breach and the fact that the Plaintiff had suffered a financial loss.
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As we have seen in thousands of cases settled under seal of confidentiality, such a requirement (which is applied in all civil cases except foreclosure) would result in the elimination of most foreclosure cases. Instead, judicial resources are wasted in processing illegal foreclosures lacking in any merit or foundation. And thousands of homeowners lose their homes and lifestyle to parties who are receiving foreclosure proceeds as revenue instead of restitution.
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The burden for such folly falls squarely on all defendants in foreclosure and the taxpayers who are paying for thousands of foreclosure cases that would never have been filed if basic pleading requirements were enforced. 

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The Hidden World of Foreclosure Auctions

Post-judgment or post-sale documents can be far more revealing than anything filed before the foreclosure is allowed or allegedly completed. They often admit lack of legal standing on the part of the original party named in the foreclosure. 

This phenomenon would not and could never occur if the forms allowed by courts and the government tracked the requirements of existing law that arose hundreds of years ago. It is axiomatically true that if someone has no claim they are not allowed access to the courts to try to collect money on something speculative. Every state has its own version of that in its statutes, state constitution, and cases.

Homeowners are discovering that there are a number of questionable practices in play, and they don’t like it. Recent reports out of Texas has at least one Austin homeowner complaining about the trustee turning down cash offers that could pay off the entire claim of indebtedness because of current hot housing market prices.

Why would a so-called “trustee” on a deed of trust turn down a cash offer that paid off the entire indebtedness and instead accept the credit bid of the fake creditor?

Actually, the person who first perceived this phenomenon was “Poppa” Koppa in San Diego who recognized a pattern between the amount reported by the investment bank, who didn’t own the loan, and the amount of the credit bid “on behalf of” the beneficiary under a deed of trust or the mortgagee under a mortgage deed. I wrote about it when he starting writing about it. That was in 2008.

Then there is the fact that most of the homeowner’s arguments about lack of standing are proven true if you follow the trail AFTER foreclosure —something which very few people bother to do.

For example, I have several cases in which the foreclosure was filed in the name of A Bank, N.A. as trustee for the SASCO Trust series 200X-A1 — and then at the sale or shortly after the sale, the name is changed to A Bank, N.A. as trustee for the SASCO Trust series 200X-A1, on behalf of the certificate-holders.

In more than one case the transfer of the credit bid or title does not receive any consideration and we all know there wasn’t any consideration for such transfers because no payment was due.

No payment was due because either no loan account receivable was ever created or it was extinguished the moment that the transaction was sucked into the vacuum created by the now infamous securities sales scheme devised by Wall Street investment banks.

But the point in this article is that the transfer of credit bid or title (after foreclosure is allowed) is a change of parties. If it wasn’t then there would be no attempted transfer on paper. It is the simplest of logical analysis.

If the transfer of parties is recorded in a written instrument that is NOT a memorialization of some business transaction then the paper instrument is pure fantasy. In law, we call that a “legal nullity.”

All business conducted after that transfer document is executed and recorded relies on that document as the foundation for conduct after foreclosure. So the players cannot logically or legally say it doesn’t mean anything. If it didn’t mean something to them, they would not have executed and recorded the document.

The point is that such conduct is a bold admission against interest — the original party in whose name the foreclosure was filed turns out not to have been the party who was intended to receive the benefit of foreclosure.

And THAT is exactly what the homeowner was saying from the start of litigation but could not prove or could not undermine the presumptions of false facts presented to the court, to the recording office, and to the world.

Post-judgment or post-sale documents can be far more revealing than anything filed before the foreclosure is allowed or allegedly completed. They often admit lack of legal standing on the part of the original party named in the foreclosure.

This phenomenon would not and could never occur if the forms allowed by courts and the government tracked the requirements of existing law that arose hundreds of years ago. It is axiomatically true that if someone has no claim they are not allowed access to the courts to try to collect money on something speculative. Every state has its own version of that in its statutes, state constitution, and cases. 

We currently use ancient forms that evolved long before anyone thought about  making “Securitization” claims on transactions that were labeled as “mortgage loans.”

The form approved by most state supreme courts allows a foreclosure plaintiff to survive a motion to dismiss merely by reciting the fact that a promissory note and lien were executed by the Defendant homeowner and then alleging that on some particular day the defendant homeowner did not make a payment scheduled on the promissory note.

Unlike every other complaint in every other civil case, there is no requirement that the Plaintiff state that the scheduled payment was due, that the Plaintiff had a right to receive it, that the Plaintiff owned the obligation and that the Plaintiff was injured by a breach of duty by the defendant homeowner.

None of that is required. And in every case won by homeowners the most common (by far) basis for ruling for the homeowner is that the court found that foreclosure should never have been filed in the first place because it did not conform to statutory requirements. 

Recognizing this phenomenon the courts and the legislatures started to require various forms of affidavits and certification but failed to require that the affiant or signatory assert the basis for personal knowledge, due diligence, and certainty that an injury has occurred to the claimant arising from the conduct of the homeowner.

And the foreclosure mills have done everything from having their own personnel to having the personnel of third-party entities execute such documents to create the basis for plausible deniability.

Meanwhile, that same foreclosure mill has no attorney-client relationship with the claimant A Bank, N.A. and is also under no duty to assert such a relationship. It is implied by the fact that the law firm filed documents in the name of the claimant.

All of this forces the homeowner to engage professionals at the great personal expenditure of time, money, and energy to undercut nonexistent claims that only survive because they display the facial validity created by pre-securitization forms and are allowed to stand despite post-foreclosure actions that show that the homeowner was right in the first place. 

And this is why APON is sponsoring work on a petition to change those forms. The point is very simple and direct. If a lawyer goes to court, he MUST represent the client or implied account or else everything that transpires is void, not merely voidable.

see https://apropertyownersnetwork.org/

If the claimant attempts access to the court, neither the court nor the proposed target should be required to litigate to the end of a fictitious case to find out that there was no claimant and no claim.

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

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.

Making the Wrong Objection and Filing the Wrong Defense

The recent Compton Case in Hawaii illustrates the nuances that have been weaponized by the investment banks. It further illustrates basic errors in procedure and objections that continue to result in homeowners inadvertently aiding and abetting an illegal foreclosure against them.

see USB v Compton 6-21-21 HI SupCt

 

The decision is correct. The failure to contest the existence of the underlying obligation together with the authority to enforce the note forced the court to accept U.S. Bank as a holder with rights to enforce. The delivery to the court together with testimony that t the note was part of some collection of business records is not a proffer of hearsay.

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My point is always the same: if you don’t attack the central point of the case, you are admitting the central point. And that means you lose.
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Homeowners seem afraid or just ignorant of the fact that they can force the opposition to actually prove the existence of the underlying obligation and that the named plaintiff owns it. But contrary to the belief of lay litigants and some lawyers, denial is not enough. 

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The recent Compton Case in Hawaii illustrates the nuances that have been weaponized by the investment banks.

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The decision is correct. The failure to contest the existence of the underlying obligation together with the authority to enforce the note forced the court to accept U.S. Bank as a holder with rights to enforce. The delivery to the court together with testimony that the note was part of some collection of business records is not a proffer of hearsay. So the hearsay objection was wrong.

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The central point of every foreclosure case is that there is an underlying obligation owed to the plaintiff that has been breached by the homeowner. In virtually all current foreclosure cases this is not what happened. But if you admit it, then for purposes of the case the legal fact is that the plaintiff owns an existing obligation that was breached by the homeowner. It is all downhill from there.
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Homeowners seem afraid or just ignorant of the fact that they can force the opposition to actually prove the existence of the underlying obligation and that the named plaintiff owns it.
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But contrary to the belief of lay litigants and some lawyers, denial is not enough. Your opposition need only invoke legal presumptions arising from the facial validity of documents (even though they are false, fabricated, and forged) to satisfy their legal burden of proving the prima facie case. And that is why the homeowner must employ aggressive discovery tactics,s strategies and motions that reveal the unwillingness or inability of the opposition to back up the facts that are preliminarily presumed to be true.
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My observation is that the most common reason that this is overlooked is that the homeowner and lawyer cannot conceive of a scenario in which the underlying obligation does not exist. They arrive at this conclusion because the homeowner applied for a loan and believed that was what they received. Maybe they did.
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But the moment that the transaction was sucked into the securities scheme invented by investment banks, the loan account receivable was extinguished. And for legal purposes that means the obligation is extinguished because without owning the asset you are not allowed to claim a financial loss arising from damage to that asset. This basic pleading, without which there is no claim.
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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, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

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.

JOIN UP!!! APON Launches Webinar Series for Lawyers and Homeowners

American Property Owners’ Network

Plans to Stop Most Foreclosures—

Public Will Be Invited to APON’s Q & A Webinar

  4:30 PM EST, Tuesday, July 6th

Scroll down for registration information

The American Property Owners Network  (APON), a new 501C4 organization and others concerned about the undue influence of global banks and the financial sector over our lives, as well as how the pandemic will affect homeownership, are going to court in Florida in a lawsuit to change foreclosure court proceedings. If successful, the suit could greatly limit the ability of current foreclosing parties to take people’s homes and property, in court actions which are often based on false claims of ownership.  APON will be hosting a Zoom Q & A Webinar on Tuesday, July 6th at 4:30 pm.

Nationally-known financial expert and foreclosure defense attorney Neil Garfield and GTC Honors will lead the fight at the Florida Supreme Court for APON. The petition to the Florida Supreme Court is a formal proceeding that would essentially conform rules, forms and court procedures to the current realities arising from claims of securitization of debt.  This situation gives rise to false documents being filed in court by what appear to be Trusts backed by big financial institutions, which actually have no legitimate claim, or right, to any debt.

APON is organizing a Webinar and Membership Drive on July 6th at 4:30 pm EST with Neil Garfield to help educate the public and the press about the need for their rule-change petition. It is also a membership drive where APON is calling on all Americans to join who want to be considered in any mass action or are simply those who want to help protect the right to be treated fairly when obtaining a mortgage and to due process In court proceedings.

At the upcoming Zoom Webinar, representatives from APON and Neil Garfield will answer questions from participants and the press. Those who have joined APON will enjoy free admission to the event and homeowners who are members of APON will ask questions first, followed by the press. Membership dues and registration to the Webinar will be used to support the litigation, as well as political action for homeowners.

Here is the link to register for the Webinar (join APON first to register for free): FREE REGISTRATION FOR APON MEMBERS

To find out more, to sign up to be a member and/or to volunteer, go to www.apropertyownersnetwork.org, scroll down to the bottom of the homepage and fill out the form (to volunteer, scroll down to the end of the homepage article on multi-plaintiff actions and fill out the form). After you join APON you will be sent a registration link to the Tuesday, July 6th event. Those who wish to attend without joining APON, will have to donate $50 or more to attend.

American Property Owners Network’s mission is to obtain justice for survivors of unlawful foreclosures through political and mass judicial action; to restore the integrity of public land records and the judicial processes; and to educate the public. Go to www.apropertyownersnetwork.org to find out more.

 

Loans as Securities Investments: Homeowners Are Due Their Share of the Profits. Without them there would be no profits. Without their homes there would be no certificates sold to investors.

Since the first time I seriously looked at what securities brokerage firms on Wall Street talking about derivatives and securitization (around 1970), I have always thought that the consumer contract was a disguised securities scheme and that therefore the “sale” of the financial product sold to consumers and homeowners was in fact a security regulated by SEC laws, rules and regulations.

This makes the buying consumer an investor in the scheme entitled to share in profits and losses. The potential legal signficiance of this view is virtually earth moving: instead of foreclosures, should there instead be an enforceable duty to compute exactly how much homeowners should be paid to execute agreements that were misleading and that resulted in vast profits to the brokers who never appeared anywhere in the chain of title or even the chain of communication?

Just as importantly it casts doubt on whether there was any financial reason or consideration for the issuance of a promise to repay the money received under false pretenses — the main false pretense being that this was a loan transction when in fact it was the main leg of a stool supporting an enormous securities infrastructure — one that never involved sale of the financial product sold to homeowners, but which pretended to do so.

I invite comments on this article. I agree there are trapdoors on both sides but I remain steadfast in my view for very simple and direct reasons.

The sale of certificates to investors was marketed to them as a vehicle to become lenders without exposing themselves to any liability under any regulatory scheme — i.e., lending and securities laws did not apply to them — because they would never be treated or descirbed as lenders and the certificates woudl never be treated as securities — thus dodging any form of disclosure requirements.

The sale of financial products to homeowners was a concealed solicitation to invest in the securities scheme. Neither the investor who bought certificates (falsely masqueraded as “mortgage backed” “securities”) nor the homeowner would have participated if they had been informed through proper disclosure about the incentives and control of the brokerage firm. That is classic securities fraud. In order for the scheme to succeed, both sides needed to swallow the bulls–t.

So the following are some of my notes on the subject for your review and comment. This is not for the faint-heearted. If you are not steeped in legal analysis and preferably securities law, little of what is printed below will make any sense to you.

Notes on Residential Lending as a Hidden Securities Offering to Homeowners:

  1. “we are reminded that, in searching for the meaning and scope of the word “security” in the Act, form should be disregarded for substance and the emphasis should be on economic reality. S.E. C. v. W. J. Howey Co.328 U.S. 293, 298 (1946).” Tcherepnin v. Knight, 389 U.S. 332, 336 (1967)
  2. “As was observed in Howey, “it is immaterial whether the enterprise is speculative or nonspeculative.” 328 U.S., at 301. ” Tcherepnin v. Knight, 389 U.S. 332, 345 (1967)
  3. The SEC, in its brief amicus curiae submitted in this case, points out that it granted a temporary exemption from §§ 7, 8, 12, and 13 of the 1934 Act to passbooks of savings and loan associations, which were being traded on the Cleveland Stock Exchange shortly after the Act’s passage. The SEC also points out that it has repeatedly enforced the Act’s registration provisions against brokers and dealers whose business includes the solicitation of funds for deposit in savings and loan associations. Brief for the SEC 22-24 Tcherepnin v. Knight, 389 U.S. 332, 345 n.34 (1967)
  4. Whether the transaction was disguised as a loan instead of its true nature of being an investment, with attendant risks, into a securities scheme.
  5. Whether the post transaction managerial events (“servicing”), governed strictly under the control of investment banks, constitute “post purchase managerial activities?”
  6. Whether possession and record title constituted sufficient control to render the securities label inapplicable.
  7. Whether the selection of a trustee on a deed of trust mitigates the issue of control by the consumer?
  8. Whether the substance of the transactions was such that the the consumer was entitled to receive a share of the profits.
  9. Whether the instruments issued were a failed attempt to conceal the issuance of a security under false pretenses.
  10. Whether the consumer is entitled to civil damages, attorney fees, punitive damages?
  11. Is the transaction with homeowners similar to the withdrawal of a capital share as a security as stated in Tcherepnin v Knight.
  12. Does concealment of the investment nature eliminate the contract from being categorized as a security?
  13. More specifically does the lack of expectation of a return caused by concealment is a basis for treating and otherwise investment scheme into a loan.
  14. Does the lack of a promise of return eliminate the possibility of categorizing the transaction as an investment? Corollary, is the direct or implied promise of rising real estate process, together with inflated appraisals engineered by investment banks, constitute a sufficient representation of projected profits to constitute the transaction as an investment vehicle, albeit without the knowledge or consent of the homeowner?
  15. What is the product being marketed to the consumer — the property or the transaction?
  16. Since the promoters of the investment scheme expressly and specifically exclude themselves from lending regulations, do they therefore fall under securities regulation under Brockton Savings Bank v Peat Marwick 577 F. Supp 1281, 1284?
  17. Does the contractual duty to make payments to remote creditors constitute “pooling”, thus broadening the contractual understanding to include, by inference and substance the entire securities scheme?
See Florida Bar Journal July/August 2021 P.36 “Turnkey real Estate Investments as Securities”.
As used in both the 1933 and 1934 Acts, security “embodies a flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.”S.E. C. v. W. J. Howey Co., supra, at 299. We have little difficulty fitting the withdrawable capital shares held by the petitioners into that expansive concept of security.
Tcherepnin v. Knight, 389 U.S. 332, 338 (1967)
  1. Does application of the Securities Act of 1933’s protections make sense? Is there a person or entity others are relying on that plays a key role in the profit-making of the enterprise such that disclosure of their activities and plans would be important to investors? Do informational asymmetries exist between the promoters and potential purchasers/investors in the digital asset?
  2. Do persons or entities other than the promoter exercise governance rights or meaningful influence?

The Journey from Security to Non-Security: SEC Director Comments

SECURITIES CLAIMS
“The threshold question in any action brought pursuant to the Securities Acts is whether a security exists.” Union Planters National Bank v. Commercial Credit Business Loans, Inc., 651 F.2d 1174, 1179 (6th Cir.), cert. denied, 454 U.S. 1124, 102 S.Ct. 972, 71 L.Ed.2d 111 (1981). The Securities Act of 1933, 15 U.S.C. § 77b(1), provides:
When used in this subchapter, unless the context otherwise requires —
(1) The term “security” means any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, floating-trust certificate, certificate of deposit for security, fractional undivided interest in oil, gas, or other mineral rights, . . . or, in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing.
The definition of a security under the Securities Exchange Act of 1934, 15 U.S.C. § 78c(a)(10), is virtually identical. Tcherepnin v. Knight, 389 U.S. 332, 34288 S.Ct. 548, 556
Brockton Sav. Bank v. Peat, Marwick, Mitchell Co., 577 F. Supp. 1281, 1283 (D. Mass. 1983)
Although the certificate of deposit at issue in this case is not included specifically in the statutory definition, the definition is adaptable to the “countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” Securities and Exchange Commission v. Howey Company,328 U.S. 293, 29466 S.Ct. 1100, 110190 L.Ed. 1244 (1946).
Brockton Sav. Bank v. Peat, Marwick, Mitchell Co., 577 F. Supp. 1281, 1283 (D. Mass. 1983)
“In 1982, in Marine Bank v. Weaver, 455 U.S. at 559102 S.Ct. at 1225, the Supreme Court held that a certificate of deposit issued by a federally regulated national bank is not a security under the federal securities laws.” Brockton Sav. Bank v. Peat, Marwick, Mitchell Co., 577 F. Supp. 1281, 1283 (D. Mass. 1983)
“It is unnecessary to subject issuers of bank certificates of deposit to liability under the antifraud provisions of the federal securities laws since the holders of bank certificates of deposit are abundantly protected under the federal banking laws. ( 455 U.S. at 558-59102 S.Ct. at 1224-25)” Brockton Sav. Bank v. Peat, Marwick, Mitchell Co., 577 F. Supp. 1281, 1284 (D. Mass. 1983)
This case arose out of an attempt by the SEC to require Life Partners , Inc. (“LPI”) to register its offerings under the federal securities laws. LPI sells fractional interests in the life insurance policy of terminally ill people to investors, and markets the policies through a network of commissioned licensees. SEC v. Life Partners , Inc., 87 F.3d 536, 537-39 (D.C. Cir. 1996). The majority held that LPI contracts are not securities because they do not meet the Howey test for what constitutes an investment contract. Under the Howey test, “an investment contract is a security subject to the Act if investors purchase with (1) an expectation of profits arising from (2) a common enterprise that (3) depends upon the efforts of others.” Id. at 542; SEC v. W.J. Howey Co., 328 U.S. 293, 298-99 (1946). As the SEC notes, the court unanimously agreed that the first two prongs of the Howey test were met here. In particular, the majority noted that “horizontal commonality — defined by the pooling of investment funds, shared profits, and shared losses — is ordinarily sufficient to satisfy the common enterprise requirement” and specifically held that “pooling is in practice an essential element of the LPI program.” Life Partners, Inc., 87 F.3d at 544.
S.E.C. v. Life Partners, 102 F.3d 587, 589 (D.C. Cir. 1996)
interests in mortgage pools or commercial real estate (familiar examples of asset-backed investments) would likely qualify as securities even under their test, because of the post-purchase entrepreneurial and managerial activities required to make these investments succeed, it is not difficult to conjure up instances where their rigid “before-or-after” measuring stick would result in exempting the sale of other risky asset-backed interests from the scope of the securities laws.
S.E.C. v. Life Partners, 102 F.3d 587, 590 (D.C. Cir. 1996)
“the proper course of action for the district court (assuming that the plaintiff’s federal claim is not immaterial and made solely for the purpose of obtaining federal jurisdiction and is not insubstantial and frivolous) is to find that jurisdiction exists and deal with the objection as a direct attack on the merits of the plaintiff’s case.” Williamson v. Tucker,645 F.2d 404, 415 (5th Cir. 1981); see also McGinnis,918 F.2d at 1494.
S.E.C. v. Mutual Benefits Corp., 408 F.3d 737, 741-42 (11th Cir. 2005)
There is no genuine dispute here that there was (1) an investment of money,  (2) in a common enterprise, (3) involving an expectation of profits. The only real dispute concerns whether the investor’s expectation of profits is based “solely on the efforts of the promoter or a third party.” MBC, relying on Securities Exchange Commission v. Life Partners, Inc., 87 F.3d 536 (D.C. Cir. 1996), argues that this element is “a necessarily forward-looking inquiry.” See Appellants’ Br. at 13. MBC asks that we make a distinction between a promoter’s activities prior to his having use of an investor’s money and his activities after he has use of the money.
S.E.C. v. Mutual Benefits Corp.
, 408 F.3d 737, 743-44 (11th Cir. 2005)
 (“
Indeed, investment schemes may often involve a combination of both pre- and post-purchase managerial activities, both of which should be taken into consideration in determining whether Howey‘s test is satisfied. Courts have found investment contracts where significant efforts included the pre-purchase exercise of expertise by promoters in selecting or negotiating the price of an asset in which investors would acquire an interest. See Sec. Exch. Comm’n v. Eurobond Exch., Ltd., 13 F.3d 1334 (9th Cir. 1994) (involving interests in foreign treasury bonds); Gary Plastic Packaging Corp. v. Merrill Lynch, Inc., 756 F.2d 230 (2d Cir. 1985) (involving interests in certificate of deposit program); Glen-Arden Commodities, Inc. v. Costantino, 493 F.2d 1027 (2d Cir. 1974) (involving investments in warehouse receipts for whiskey).
”)
This third part of the Howey test, as might be expected, has proved to be the most litigated of the three elements. Under the precedent of this circuit, the crucial inquiry is the amount of control that the investors retain under their written agreements. Williamson v. Tucker, 645 F.2d 404, 423-24 (5th Cir. 1981). If the investor retains the ability to control the profitability of his investment, the agreement is no security. Gordon v. Terry, 684 F.2d 736 (11th Cir. 1982).

 

 

Tonight! Latest Hawaii Decision Underscores Failure to Properly Defend Illegal Foreclosure Claims and What Can Happen if There IS a Proper Defense 6PM EDT 3PM PDT

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Nothing says it better than the Supreme Court of a state  (Hawaii) that has issued many decisions in favor of homeowners. If you don’t present your defense, by the rules, you lose. Everything about the illegal claims for foreclosure is going to be presumed as true — just as most homeowners presume when they walk away from their homestead. None of it is actually true.

They never say that they loaned you money because from their perspective they didn’t. that would make them a lender subject to enforcement lending laws, rules, and regulations. They never say that the claimant is suffering a financial loss created by the homeowner not making a scheduled payment because that would be untrue.

Tonight we talk about the nuts and bolts of real defense of foreclosure actions that has a good chance of being successful.

see PublishedOpinion

“Securitization” is not the sale of homeowner debt and is not the product of free market transactions

Securitization is a lie. And so far nearly everyone, including homeowners, believes the lie. Small wonder that the courts also believe it — especially when homeowners admit the truth of the lie. 

Each new “financing” results in a brand new string of securities sales — without retirement of the previous string of securities sales. I have continually said, based upon market data, that each securities scheme produces $12 in revenue for each $1 transacted with homeowners. But as many people have pointed out, that is only the first level.

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The reason why Bloomberg searches reveal multiple “trusts” named in connection with a single homeowner transaction is that each new refi or sale changes a few data points but does not change the single and only underlying transaction. That transaction was neither intended nor recorded as a loan on the books of account of investors, investment banks or even the named originator don’t eh mortgage and note. That is why in bankruptcy filings you never see any report of any interest in any loan even if it was “closed” the day before bankruptcy was filed.
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The truth is that Wall Street is selling the myth of loans, not the actual loans, which are in fact thinly disguised incentive payments for homeowners to cooperate in creating the data reference points for the sale of securities to investors who have no financial interest in their transaction. Securitization means that an asset has been “securitized.” That means an asset has been sold in parts to investors. No such sale ever occurs in connection with homeowner transactions.
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Securitization is a lie. And so far nearly everyone, including homeowners, believes the lie. Small wonder that the courts also believe it — especially when homeowners admit the truth of the lie.
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Each time the property is subject to false claims of “refinancing” it starts a new scheme of securities sales that does not retiree the old one. And this is why the “shadow banking market” has gone from $0 to $1.4 quadrillion between 1983 and now. That dollar amount is “nominal value” because no financial transactions took place other than the issuance, sale and trading of derivatives based on falsely labeled “asset-backed” securities. It is not real money, which totals less than $100 trillion. But Wall Street has successfully sold the myth that it is real money when they say it is.
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Wall Street is a selling machine — as it ought to be. It is supposed to be the broker between two counterparties — a buyer and a seller. The current economic infection plaguing the American economy is not the result of Wall Street grabbing a higher commission on transactions. Everyone thinks that but it isn’t true. It is the result of Wall Street inserting itself into the transaction as though it was a real party in interest and doing that with impunity and without any disclosure. This completely blocks free market forces from making corrections.
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The advocates of free-market forces point out that the government can’t regulate every transaction and should not try to do so. They say that in a free market where buyers and sellers are reasonably well informed, stupid offerings or actions are corrected to reflect economic reality. I think they’re right. And I also agree that free-market forces are the magic hand that drives capitalism.
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But Wall Street is hiding behind a carefully constructed myth of free markets. Wall Street does not disclose and carefully conceals the relevant and material information to the investors who buy certificates or the derivatives of certificates, nor the homeowners who think they are getting loans. In plain words, Wall Street is lying about all of the transactions that occur in relation to the trading and sale of securities that use the data rather than the ownership of asset-based transactions.
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Investors have come to believe that they have some sort of indirect interest in transactions with homeowners. that is false and they would defend any claim that asserted such a relationship because that would make them lenders subject to liability for violation of lending laws — something that continues to take place with rampant regulatory.
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In fact, investors are told that this is a way of lending “without risk” — without being a lender. They have sold the myth that by not showing up on the paperwork of any “Closing” with homeowners they are protected from loss, bankruptcy, or liability for noncompliance with laws governing transactions with borrowers and consumers.
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Investors are not told that by adopting that form over substance strategy, they have written a blank check and abandoned all rights to force anyone to comply with the conditions of their purchase of certificates. And while the promise to make payments to them comes from a big investment bank doing business under the name of a nonexistent trust, that promise is subject to the sole discretion of that investment bank who also does not appear as a lender, owner, creditor, holder of paper from any homeowner.
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Investors are told that the certificates are insured but they are not told that the proceeds of the insurance are paid to the brokers, not to them. Investors, like homeowners, are left with a hologram of an empty paper bag. The Wall Street “banks” are left with all the money regardless (and especially) if the value of the investment declines in an “event” declared in the sole discretion of the Wall Street securities brokerage firms that are not allowed to use the powers of both brokerage and commercial banking — something that was completely banned until the repeal of Glass-Steagal.
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Going back to the “free market” how many investors would have completed their transactions under the same terms if they had known all of that?
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The other group of investors are the homeowners who are brainwashed into thinking they are borrowers in a transaction that leaves them without a lender, without a loan account receivable and without anyone with legal authority to administer, collect or enforce a promise to pay that they issued without knowing that the transaction was simply the start of a new securities scheme in which oversized revenue would be generated far exceeding the transaction they thought was a loan.
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How many homeowners would have completed their transactions on the same terms if they knew that there was no liability for noncompliance with lending laws, there was no incentive to create a viable loan transaction, there were incentives for appraisal fraud and there were incentives for the transaction to”fail?”
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This has not been the product of free-market transactions. The entire jumble of convoluted rationales for the falsely labeled “Securitization” scheme has been the exercise of deceit and theft. The fact remains that once the money hits the closing table, there are no financial transactions after that except for the cashout transactions.
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And that is why no foreclosure mill can come forward now, as they were required to do up until around 20+ years ago, and produce a witness from a company that could prove that they owned an existing obligation from the homeowner and that they were taking a loss because the homeowner wasn’t paying. That is why they are appointing companies to pose as servicers when those same companies are not permitted to touch any payments from homeowners or make distributions to investors.
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FORECLOSURE DEFENSE:

  1. The reason why nearly all homeowners walk away rather than contest a fake claim is that they cannot conceive or understand the alchemy of finance. It is absurd to think they could not owe money to satisfy a promise they made to pay it. They think any contest is an immoral breach of promise and as good people they are going to take their lumps.
  2. The reason why most of the 4% of homeowners who file anything to contest fake foreclosure claims are unsuccessful is that they admit the lie tacitly or explicitly. A secondary reason is that the losing homeowner tries to prove facts they cannot and will never prove.
  3. The reason why the last few contesting homeowners are successful in challenging the fake foreclosure is that they don’t admit the lie and they aggressively force the opposing law firm to prove the facts they Wall Street has so carefully constructed as “presumed true.” The winning homeowner undercuts the claim rather than attempting to prove it false.
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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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