If you think foreclosures are a thing of the past, think again

In order to maintain the illusion of legality and an orderly marketplace the banks and their servicers must continue to push foreclosures even if it means going after people who are not actually withholding payments. The legacy of the mortgage meltdown and the brainless government policies that let the banks get away with what they had done, is that the crime not only continues but is being repeated with each new claimed securitization or “resecuritization” of residential loans.

As I predicted in 2006, the  tidal wave of foreclosures was in fact unprecedented, underestimated and continues to this day. With a starting point of around 2002, foreclosures attributed to the mortgage meltdown have continued unabated for 17 years. I said it would 20-30 years and I am sticking with that, although new evidence suggests it will go on much longer. So far more than 40 million people have been displaced from their homes and their lives.

Google Buffalo and New Jersey, for example and see whether they think foreclosures are a thing of the past. They don’t. And the people in Buffalo are echoing sentiments across the nation where the economy seems better, unemployment is down, wages are supposedly increasing but foreclosures are also increasing.

And let’s not forget that back in the early and mid 2000’s foreclosures did not mention trustees or trusts. In fact when the subject was raised by homeowners it was vehemently denied in courts cross the country. The denials were that the trusts even existed. This was not from some homeowner or local lawyer. This was from the banks and their attorneys. It turns out they were telling the truth then.

The trusts didn’t exist and there were no trustees. But in the upside down world of foreclosure here we are with most foreclosures filed in the name of a nonexistent implied trust on behalf of a “trustee” with no trustee powers, obligations or duties to administer any assets much less loans in foreclosure.

In order to understand this you must throw out any ideas of a rational market driven by fundamental economics and accept the fact that the banks  and their servicers continue to be engaged in the largest economic crime in human history. Their objective is foreclosure because that accomplishes two goals: first, it rubber stamps prior illegal practices and theft of borrowers’ identities for purposes of trading profits and second, it gives them a free house and free money.

If they lose a foreclosure case nobody suffers a financial loss. If they win, which they do most of the time (except where homeowners aggressively defend) they get a free house and the proceeds of sale are distributed to the players who are laughing, pardon the pun, all the way to the bank. Investors get ZERO.

As for modifications, look closely. The creditor is being changed along with the principal interest and payments. It might just be a new loan, except for the fact the new “lender” is a servicer like Ocwen who has not advanced any money for the purchase or acquisition the loan. But that’s OK because neither did the lender or the claimant. Modification is a PR stunt to make it look like the banks are doing something for borrowers when in fact they are stealing or reassigning the loan to a totally different party from anyone who previously appeared in the chain of title.

Modification allows the banks to claim that the loan is performing — thus maintaining the false foundation supporting trades and profits amounting to dozens of times the amount of the loan. Watch what happens when you ask for acknowledgement from the named Plaintiff in judicial states or the named beneficiary in nonjudicial states. You won’t get it. If US Bank was really a trustee then acknowledging a settlement on its behalf would not be a problem. As it stands, that is off the table.

The mega banks, with unlimited deep pockets derived from their massive economic crimes, began a campaign of whack-a-mole to create the impression that foreclosures were on the decline and the crisis is over. Their complex plan involves decreasing the number of filed foreclosures where the numbers are climbing and increasing the filed foreclosures where they have allowed the numbers to sink. Add that to their planted articles in Newspapers and Magazines around the country and it all adds up to the impression that foreclosures derived from claimed securitized loans are declining.

Not so fast. There were over 600,000 reported foreclosures last year and the numbers are rising this year. Most of them involve false claims of securitization where the named claimant is simply appointed to pretend to be the injured party. It isn’t and in many cases a close look at the “name” of the claimant reveals that no legal person or entity is actually named.

US Bank is often named but not really present. It says it is not appearing on its own behalf but as Trustee. The trust is not specifically named but is implied without the custom and practice of naming the jurisdiction in which the trust was organized or the jurisdiction in which it maintains a business. That’s because there is no trust and there is no business and US Bank owns no debt, note or mortgage in any capacity. The certificates are held by investors who acknowledge that they have no right, title or interest in the debt, note or mortgage. So who is the claimant? Close inspection reveals that nobody is named.

In fact, those foreclosures proceed often without contest because homeowners mistakenly believe they are in default. In equity, if the facts were allowed in as evidence, the homeowner would be entitled to a share of the bounty that was a windfall to the investment bank and its affiliates by trading on the borrower’s signature. A “free house” only partially compensates the homeowner for the illegal noncensual trading on his name with the intent of screwing him/her later.

Upon liquidation of the property the proceeds of sale are deposited not by an owner of the debt, but by one of the players who just added insult to injury to both the borrower and the original investors who paid real money but failed to get an interest in the fabricated closing documents — i.e., the note and mortgage.

The Banks have succeeded in getting everyone to think about how unfair it is that homeowners would even think of pursuing a “free house”. By doing that they distract from the fact that the homeowners and the investors who put up the origination or acquisition money are both excluded from the huge profits generated by trading on the signature of borrowers and the money of investors who do not get to share in the bounty, which is often 20-40 times the amount of the loan.

The courts don’t want to hear about esoteric arguments about the securitization process. Judges assume that somewhere in the complex moving parts of the securitization scheme there is an owner of the debt who will get compensated as a result of the homeowner’s refusal or failure to make monthly payments of interest and principal. That assumption is untrue.

This is revealed when the money from the sale of property is traced. If you trace the check you will be mislead. Regardless of where the check is mailed, the check is actually cashed by a servicer who deposits it to the account of an investment bank who has already received many times the amount of the loan principal. That money is neither credited to the account of the borrower nor reported, much less distributed to investors who bought certificates (wrongly named “mortgage bonds”).

Neither the investors who bought the original uncertificated certificates nor the investors who purchased contracts based upon the apparent value of the certificates ever see a penny of the proceeds of a foreclosure sale.

In order to maintain the illusion of legality and an orderly marketplace the banks and their servicers must continue to push foreclosures even if it means going after people who are not actually withholding payments. The legacy of the mortgage meltdown and the brainless government policies that let the banks get away with what they had done, is that the crime not only continues but is being repeated with each new claimed securitization or “resecuritization” of residential loans.

When the economy contracts, as it always does, the number of foreclosures will shoot up like a thermometer held over a steam radiator. And instead of actually looking for facts people will presume them. And that will lead to more tragedy and more inequality of income, wealth and opportunity in a country that should be all about a level playing field. This is not the marketplace doing its work. It is the perversion of the marketplace caused by outsized and unchecked power of the banks.

My solution is predicated on the idea that everyone is to blame for this. Everyone involved should share in losses and gains from this illicit scheme. Foreclosures should come to a virtual halt. Current servicers should be barred from any connection with these loan accounts. Risk and loss should be shared based upon an equitable formula. And securitization should be allowed to continue as long as securitization is actually happening — so long as the investors and borrowers are aware that they are the only two principals on opposite sides of a complex transaction in which trading profits are likely as part of the disclosed compensation of the intermediaries in the loans originated or acquired.

Disclosure allows the borrowers and the investors to bargain for better deals — to share in the bounty. And if there is no such bounty with full disclosure it will then be because market forces have decided that there should not be any such rewards.

Enforcement of Note vs. Enforcement of Mortgage

While the two are often conflated there is a distinct difference between them. In an action to enforce the note it is often presumed that the note is being enforced to pay the debt to a creditor who might not even be identified. But the enforcement of the encumbrance requires actual ownership by an identified creditor. Judges and attorneys commit error when they act as though there is no difference. There are protections built into every statutory scheme for foreclosure and in the Bankruptcy code to prevent the loss of a home where the claim is sketchy or the claimant’s status is sketchy.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

Enforcement of the note requires evidence that the note is being enforced to pay the debt. Where the note is a negotiable instrument, possession of the note alone raises certain presumptions about the right to enforce it, presumably on behalf of either the owner of the debt or on behalf of an authorized representative of the owner of the debt.

So it is generally easier to enforce the note than it is to enforce the encumbrance (mortgage or deed of trust). But one thing is certain and highly relevant  — enforcement of the note can only be accomplished by producing the original note or pleading and proving a “lost note.” Very strong evidence exists of “industry practice” in which the notes are destroyed contemporaneously with the loan closing — and in most (nearly all) cases that is what happened.

*
Where the debt arises by a loan from a creditor who remains the owner of the note and keeps the note and mortgage in a vault there are no real issues about ownership or rights to enforce the debt, note or mortgage excepting only situations where the loan did not in fact ever occur.
*
Without payment of value (UCC Article 9-203(b)(1) the encumbrance cannot be enforced. This is law, not some opinion.
*
But where assignments are involved, the assignment is a nullity unless the following elements are present:
  1. The Assignor owns the debt or is the authorized representative of the owner of the debt, who is identified.
    1. If that condition is true then either the Assignor actually funded the loan or the previous party paid value for the loan.
  2. The Assignor has sold the debt to the Assignee for value either through a transaction that specifies sale of the debt or through a transaction in which the note or encumbrance is purchased for value, which means money paid in hand.
  3. The Assignee paid value for the debt, note and mortgage. This means that the owner of all three — debt, note and mortgage — are the same party.
  4. Both the Assignor and the Assignee must be actual legal persons.
*
The absence of one or more of these elements calls for extrinsic (parol) evidence to determine whether an assignment, recorded or not, is a valid assignment of the encumbrance. A facially valid assignment is frequently actually invalid for this reason. In the absence of those elements the burden of proof must shift back to the claimant. The new presumption should be that the assignment is a nullity. The burden of proving those elements should be on the claimant seeking foreclosure but litigants should be prepared for a fight on this issue.
*
Delivery of the note is problematic since the original note was most probably destroyed. Discovery and investigation and analysis of this issue must be very precise. But assuming some version of the note is delivered, it might be presumed that ownership of the debt is also being transferred. The trick is to force the claimant to prove they received the original note and not just a copy. They can never do that. Presumptions are easily rebutted by questions regarding the existence of a transaction in which the debt, note or mortgage was purchased. In most cases no such transaction exists.
*
The truth is that in most foreclosures neither the note nor the mortgage are being enforced to pay the debt to a creditor who owns the debt. Hence the basic assumption from the judiciary is erroneous — that somewhere in the securitization chain someone owns the debt and will be compensated for their financial loss by forced sale of the subject property. Nothing could be further from the truth. And tracing the proceeds of sale after foreclosure will prove it every time.
*
PRACTICE HINT: If you present a credible narrative that your client is denying that the claimant is a real party in interest and that there is a pattern of conduct from prior foreclosures showing that neither the Trustee nor the trust (nor any investor) actually received the proceeds of sale in other foreclosures conducted in the name of “Trustee” on behalf of “Certificate holders” of XYZ Trust series Certificates 200x-X” then you should have a right to inquire about about a list of prior foreclosures conducted for the “trust”, who was involved and where the money went.

Tonight! Document Fabrication And Perjury Have Become Institutionalized!

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Charles Marshall, Esq. and William Paatalo, P.I.

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

Tonight. Charles Marshall, Esq. and Bill Paatalo, P.I., discuss important new information on the existence of original promissory notes and how they are falsely presented in foreclosure cases. Don’t miss it!

See Neil’s post at

https://livinglies.me/2019/03/27/lost-notes-and-the-sudden-appearance-of-original-notes/

See Bill’s post at

https://bpinvestigativeagency.com/do-custodiansreally-hold-original-notes/

If the original promissory notes were customarily destroyed contemporaneously with the loan closing or afterwards, then it follows that original notes presented in court were recreations — i.e. copies, which is exactly what is not permitted in the enforcement of a note or mortgage. And the testimony about it being an original, while knowing that the original was destroyed or “lost” would be perjury.

And that is what happens every day in foreclosure courts across the country. So we have come to the point where we should recognize that we have accepted and institutionalized the presentation of false documentation in court, and perjury in testimony mainly because of political ideology based upon false premises.

Since foreclosures are not being used to pay creditors, why should we allow them?

 

 

 

 

“Lost notes” and the Sudden Appearance of “Original Notes.”

Think of it this way: If someone wrote you a check for $100, which would you do? (1) make a digital copy of the check and then shred it or (2) take it to the bank? Starting with the era in which banks made what is abundantly clear as false claims of securitization the banks all chose option #1. And they collected incredible sums of money far exceeding the Madoff scam or anything like it.

Back in 2008 Katie Porter was a law professor and is now a member of the US House of  Representatives. For those of who don’t know her, you should follow her, even on C-Span. She nails it every time. She knows and other congressmen and women are following her lead. Back in 2008 she uncovered the fact that in her study of 1700 filings in US Bankruptcy court, 41% were missing even a copy of the note, much less the original note.

Around the same time, the Florida Bankers Association, dominated by the mega banks and who absorbed the Florida Community Bank Association, told the Florida Supreme Court that, after the purported “loan closing,” digital copies of the notes were made — and then the original notes were destroyed. FBA said it was “industry practice.” It wasn’t and it still isn’t — at least not for actual creditors who loan money. Out in the state of Washington on appeal, lawyers for the claimant in foreclosure admitted they had no clue as to the identity of the creditor. The state banned MERS foreclosures, along with Maine.

That admission, with full consent of the mega banks, raised the stakes from 41% to around 95% — a figure later confirmed in Senate Hearings by Elizabeth Warren. The other 5% are loans that were truly traditional — funded by the “lender” (no pretender lender) and still owned by the lender who had the original documents in their vault.

The law didn’t change. In order to enforce a note you needed the original. And in order to plead you “lost” the note, you had to allege and prove very specific things starting with the fact that it was lost and not destroyed. Then of course you had to prove that the original was delivered to you, which nobody could because the original was destroyed immediately after closing and a fax copy was the only thing used after that.

Typically destruction of the note means that the debt is discharged or forgiven — something that is actually a natural outgrowth of the same debt being sold dozens of times in varying pieces under various contracts, none of which give the buyer any direct right, title or interest in the “underlying” debt, note or mortgage. In short, neither the debt nor the note exist in most cases shortly after the alleged loan closing.

The representatives of the mega banks who started the illusion of securitization of mortgage debts could neither produce the original note (because it was destroyed) nor tell a credible story to explain its absence. So they did the next best thing. They recreated the note to make it appear like an original using advanced technology that could even mimic the use of a pen to sign it.

Some of us saw this early on when they failed to account for the color of the ink that was used at closing. Those were among the first cases involving a complete satisfaction of the alleged encumbrance, plus payment of damages and attorney fees, all papered over by a settlement agreement that was under seal of confidentiality.

While obviously presenting moral hazard, the process of recreation could have been legal if they had simply followed the protocols of the UCC and state law to reestablish a lost note. But they didn’t. The reason they didn’t is that they still had to prove that the note was a legal representation of a debt owed by the borrower to a creditor that they had to identify. But they couldn’t do that.

If they identified the creditor(s) they would admitting that they had no claim because a person or entity possessing a right, title or interest in the debt did not include the named claimant in the foreclosure. Naming a claimant does not create a claim. A real claim must be owned by a real claimant. That is the very essence of legal standing.

If they had no claim they would be admitting that the securitization certificates, swaps and other contracts were all bogus. That would tank the $1 quadrillion shadow banking market. That is where we see the evidence that for every $1 loaned more than $20 in revenue was produced and never allocated to either the debt of the borrower or the investment of the investors. The banks took it all. $45 trillion in loans and refi’s turned into $1 quadrillion in “nominal” value. Nice work if you can get it.

So then they did the next next best best thing thing. They simply presented the recreation of the note as the actual original and hoped that they could push it through and that has worked in many, probably most cases.

It works because most borrowers and their lawyers fail to heed my advice: admit nothing — make them prove everything. By giving testimony regarding the “original” note the borrower provides the foundation and the rest of the foreclosure is preordained.

For some reason, lawyers who are usually suspicious, refuse to acknowledge the basic fact that the entire process is a lie designed to take property, sell it and apply or allocate the sale proceeds to anyone except the owner(s) of the debt. They hear “free house” and get scared they will look foolish.

A free house to those persistent and enduring souls who finance the great fight is a small price to pay for the mountains of windfall profit of the banks and related parties. As for the banks, adding the proceeds of a house that should never have been sold is adding insult to injury not only to the homeowner but to the entire society.

If anyone wants to know why so many Americans are angry, look no further than the 40 million people were directly displaced by illegal foreclosure and the additional 70 million people who were affected by those dislocations. Voters know that if the many $trillions spent on bailouts had been used to level the playing field, 110 million Americans and millions more worldwide would have never faced the worst effects of the great recession.

And we will continue voting for disruptors until a level playing field re-emerges.

see Lost notes and Bad Servicing Practices and Incentives SSRN-id1027961

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

 

Why Regulation is Failing the Mortgage Market

A new report from the Federal Reserve Board identifies the central issues confronting regulators — issues that regulators have avoided assiduously. The bottom line is that the FED knows that it lacks accurate information and knows that it is not confirming information given to it by banks who are now all in the background of lending.

The real information should be coming from small thinly capitalized private entities that serve as sham conduits for loans. Neither the FED nor any other regulator gets any information on those loans which now account for more than 50% of all loans. This presents important ramifications for litigating foreclosure defenses.

The practice, which they detail as starting in the early 1990’s of separating servicing rights from the loans was the beginning. Separating the rest of components through facial warehouse lending to avoid lending laws was the rest of the story and is continuing to evolve today.

Bottom line: everyone knows that the lenders are a sham and nobody wants to anything about it. The authors are raising warning flags about market liquidity as a consequence of using thinly capitalized “lenders” who can’t be held accountable for bad lending practices and whose loans are underwritten by third parties who are never mentioned in the chain of “lenders.”

But it’s what they don’t say that is really scary. Investment banks, who are now commercial banks also, have created a lending industry in which they are the principal players but nobody can or will hold them accountable for their actions.

And those same investment banks are selling off the debts of borrowers so that they too have no liability for defaults. Ultimately you end up with rogue REMICs or SPV’s and an orphan debt in which the only risk of loss is on the borrower who simply does not know that the debt has been the source of profit for everyone in the chain. No losses are sustained because investors keep selling to other investors and the government guarantees the balance.

Warehousing Lending Liquidity Crisis Federal Reserve Board

Practice Note: Government guarantees are paid AFTER all other alternatives have been exhausted. So the question always becomes whether the currently named claimant has any loss, a partial loss, or a total loss. This is especially true in most credit default swaps and similar contracts of “insurance” where the insuror explicitly waives subrogation to the claim.

So the net “loss” rather than the gross “loss” would need to be calculated in most loan foreclosures. I put “quotes” around the wor “loss” because in most cases the named claimant has suffered no loss — and the parties for whom it is serving as conduit have enjoyed a profit regardless of whether or not the borrower pays the debt.

In short if you can move the needle and get the court to accept the question of fact as to the amount of the loss, you might have a winning case despite all appearances to the contrary.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

 

Transcript of “Holding Banks and Attorney Accountable For False Claims”

Listen at http://www.blogtalkradio.com/neilgarfield/2019/03/21/holding-lawyers-and-banks-accountable-for-presenting-false-claims

Hi Neil Garfield here and this is Thursday March 21st, 2019. Happy first day of Spring! 

Winning foreclosure cases. Sometimes it is the homeowner. Reminds me of the old story in Spain which I won’t repeat. If it’s the homeowner it’s only because the homeowner defended aggressively and the bank or servicer had nothing. And so, in a way this show is devoted to the story of nothing. 

Tonight we talk about how both the banks and the lawyers are getting away with it and what we can do to force them to actually prove their case and be held accountable when they present false claims.

Remember you can always come back and listen to the show again or send it to a friend by going to Blog Talk Radio and looking up the Neil Garfield Show.

First a little somewhat related news and comment about an article on the NY decision of BONY v Dieudonne, 2019 WL 114973 (2d Department 2019). It’s important. I posted an article relating to this a couple days ago. 

In Bank of New York Mellon v. Dieudonne, 2019 WL 1141973 (2d Dept. 2019), the Appellate Division, determined that a mortgage is accelerated by the filing of a complaint to foreclose the mortgage with an election to accelerate.

This is true even though a provision in the mortgage preserves the borrower’s right to make installment payments rather than the full debt. The context of this decision was the statute of limitations.

The ruling essentially bars action on an alleged default after the statute expires. NY does not recognize the twisted Florida rule in which an implied deceleration takes place when a second suit is filed. That is the Bartram rule.

Dieudonne will reverberate nationally and through New York. It may also create pressure on states like Florida that invent crazy doctrines that will haunt them int hen future.

This is not rocket science, folks. If a bank lends money to a borrower and the the borrower can’t or won’t pay the usual bank will sue in no more than 6 months after attempts to find a workout. Actually they are required to do so by regulation, custom and practice in the banking industry.

The NY rule is simple and easy to understand. If the bank waits more than 6 years after it has accelerated the entire amount due, the bank is itself foreclosed. If it waited 6 years it is simply too late, and there was probably a reason.

The New York Law Journal article by Adam Swanson and Jessie Bonaros says that “In the throes of the Great Recession, many foreclosure actions were commenced and ultimately dismissed or abandoned. Among the causes were an overwhelming volume, fluctuating laws, and new regulatory requirements.

Financial institutions are now seeking to foreclose those loans and finding that they are barred by the statute of limitations because those old lawsuits accelerated the mortgages years earlier. Courts are giving out free houses but not to homeowners—to real estate speculators who are paying pennies to the homeowner for the right to fight foreclosure.” 

So the moral of that story is that the right to challenge foreclosures is a marketable commodity with considerable value that can be measured by the equity in the house if the mortgage is removed or deemed unenforceable. 

I might add that a part of the reason why some foreclosure cases linger for 10 years or more is to avoid the statute of limitations problem which they all know was the rule before the laws got twisted when the banks wrecked the financial system.

What the article leaves out that not all homeowners sell their right to defend. Many defend themselves and win, just as I have been saying here for years and years. And it leaves out that BONY Mellon is listed as Plaintiff but never receives any remedy even if it wins. That is because the money from the sale of foreclosed property goes to parties who also don’t own the debt. BONY is like MERS. It is a naked nominee.

Now to the topic at hand.

 In the Case of OBDUSKEY v. MCCARTHY & HOLTHUS LLP, decided yesterday, March 20, 2019, a unanimous but ambivalent Supreme Court of the United States decided that lawyers are not debt collectors in non judicial states. In doing so, they undermined the due diligence requirement in the bar rules of every jurisdiction that require a lawyer to perform enough investigation to assure that the client is real and has at least an arguable claim.

Several justices opined that Congress should clear up the ambiguity that they perceived in the law. The case was seen as fundamental challenge to the non judicial statutory scheme adopted in 32 states in which property subject to a Deed of Trust could be sold privately without judicial process. We have called out the problem as a substantive and procedural one.

What is more important and least understood is that the virtual immunity granted to lawyers provides banks with an impenetrable vehicle through which they continue to commit widespread fraud — to the detriment of borrowers, investors, taxpayers, the financial system and society at large.

  I am broadcasting live from Duval County Florida and this show is brought to you by the livinglies blog, GTC honors, Lendinglies, AMGAR, and the Garfield firm, and this show is specially brought to you because of donations to the livinglies blog from listeners like you. Thank you. And for those of you who are not contributors we ask that you HIT THE DONATE BUTTON ON THE THE BLOG OR call 954-451-1230 or

202-838-6345  and pledge whatever you think you can afford. If this show has value for you, if  our work on the blog and our radio shows, without payment or other support has value to you then chip in. Please make a contribution to help us continue helping you and all consumers. I was just told that the link might not be functioning properly so if you can’t get through online please call 954-451-1230.

The Holding in Obduskey is that “A business engaged in no more than nonjudicial foreclosure proceedings is not a “debt collector” under the FDCPA,”. Despite voting unanimously, several justices said that they have doubts whether the ruling was justified. What they were all stating is that the FDCPA left open crack through which the Wall Street Banks ran an entire business model involving trillions of dollars.

The specific holding unequivocally means that as far as the FDCPA is concerned lawyers have no duty to investigate whether their client or the claim is real.

The Supreme Court all agreed that the enforcement of a security interest like a mortgage or Deed of Trust is different than the enforcement of a debt or note. In plain language the conservative judges were searching for a way tom protect the lawyers and the banks while the more progressive judges thought that the wording of the statute was ambiguous.

It is decisions like this that makes the practice of law so maddening.

Where the foreclosure mill initiates foreclosure I still think there are claims available for fraud, misrepresentation and negligence. Where a new foreclosure mill is substituted during the foreclosure I think that the options are either limited or nonexistent. But liability under the FDCPA is being narrowed almost out of existence.

The fact remains that none of the Bar associations are willing to investigate, much less find probable cause of violations by foreclosure mills, despite clear and convincing evidence in the public domain that they rely upon false statements, fabricated documents and forged signatures.

Substantively, most such sales are based upon false premises, i.e., that the claimant is a beneficiary which in simple language means that it is the owner of the debt.

Procedurally, the flaw in the nonjudicial scheme is that a challenge to the foreclosure puts the burden of proof on the borrower who has no direct knowledge of the foundation and can only interpret what is available.

Many people are asking and apparently making inquiry to Bar associations who have turned blind eye to attorneys who are filing claims without owners of the claims. The potential for moral hazard is horrendous.

It means that attorneys can invent claims or pretend to represent rogue trusts or other fictitious entities and seeks collection and even forced sale of homes, autos equipment etc.

There is nothing to stop unscrupulous attorneys from pocketing the proceeds — or getting their share through what appears to be attorney fees from a fictional character that is created by a friendly but supposedly unrelated entity that is in on the scheme.

Such decisions immunizing lawyers have gone too far. I agree that lawyers and litigants should be protected by litigation privilege. But I also believe that abuse of litigation privilege is abuse of process, which is a recognized claim.

I agree that lawyers who have questionable clients with questionable claims may file such claims with immunity. But there is a different between questionable and just plain false claims.

By now there isn’t a lawyer in the country who doesn’t know that the trust doesn’t exist, that even if it did exist it doesn’t own the debt, and that even if the foreclosure is successful the alleged trust won’t get any money out of it. No lawyer familiar with the current foreclosures believes that investors are getting the money.

Foreclosure mill attorneys are using a thinly veiled scheme to protect themselves in the interest of making hundreds of millions of dollars per year collectively.

They don’t ask and the bank don’t tell.

The lawyer doesn’t ask because he gets the assignment of the case electronically implying the a claim exists. The assignment comes from a servicer like Ocwen.

Meanwhile Ocwen’s only claim to authority comes from a Pooling and Servicing Agreement that was never completed in the most major important detail — no loan schedule. So Ocwen is claiming authority from an entity that doesn’t exist based upon a document that was never completed.

I agree that a lawyer representing a debt collector should not be held to be a debt collector. But if the lawyer has no actual client who is a debt owner and no client who is a debt collector for a debt owner then the attorney isa debt collector and is violating the FDCPA every time he or she acts because the attorney is pursuing a nonexistent claim on behalf of a nonexistent non owner of the debt.

So SCOTUS was half right in their discussion of the relationship between lawyer misconduct and the FDCPA, but the rest of the story belies their intent and more importantly the intent of Congress when it passed the FDCPA. It opens  yet another door to moral hazard in a world where moral hazard is expanding.

Additional note: As previously reported the Third Circuit went the other way on companies who purchase debt and then claim exemption as the owner of the debt.

In an article published on Lexicology by Melanie Brody and Francis Doorley thye point out that

On February 22, the Third Circuit sidestepped the Supreme Court’s 2017 holding in Henson v. Santander Consumer USA Inc. and found that a purchaser of defaulted debt qualified as a debt collector under the Fair Debt Collection Practices Act.

In Barbato v. Greystone Alliance, the Third Circuit considered whether an entity that purchased charged off receivables and outsourced the actual collection activity was subject to the FDCPA. In analyzing the issue, the court explained that the FDCPA’s definition of the term debt collector has two prongs, and if an entity satisfies either of them, it is a debt collector subject to the Act. Under the “principal purpose” prong, a debt collector includes any person who “uses any instrumentality of interstate commerce or the mails in any business the principal purpose of is the collection of any debts.” Under the “regularly collects” prong, a debt collector includes any person who “regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.”

Applying the principal purpose prong to Crown, the Third Circuit found that the company fits squarely within the statutory definition because “Crown’s only business is the purchasing of debts for the purpose of collecting on those debts.” The court went on to reject Crown’s argument that Congress did not intend the FDCPA to apply to a passive debt owner that outsources the actual collection. The court reasoned that unlike a traditional creditor that is incentivized to “cultivate good will among its customers and for which debt collection is one of perhaps many parts of its business,” Crown’s only need for consumers is to make them pay their debts.

I think the foreclosure mills actually fall into a similar category and thus should be subject to the FDCPA. WHile they haven’t purchased the debts their sole purpose is to collect the debt “of another”. Rather than being the legal arm of the “other” they are substituting themselves, directly or indirectly as the claimant.

The fact that they name a claimant that might not even exist or who technically exists but doesn’t own any right, title or interest in the debt, note mor mortgage should not be allowed to create an exemption for what is clearly an abuse of judicial process and a direct attempt to profit from the debt collection activity.

A Replay of 2008 in the Works

Amongst the constant placement of article promoted and paid for by the banks that celebrate our supposed recovery from the mortgage meltdown is a new spate of articles that say otherwise. Rather than recovering we have merely papered over the problem allowing the banks to do it again. And worse, I would add, is the continuation of a general policy and perception that foreclosures are the way out of the mess created by the banks.

See LOVE AFFAIR WITH REPACKAGED DEBT

I know this stuff is dense and filled with financial concepts that can only be understood by those of us who have direct knowledge, experience, training and certification in securities and securitization of debt, but the lay articles at least give you a sense of what is truly happening. The above linked article by an investment banker, warning of the continuing moral and financial hazards, states it plainly.

A decade ago, the high-yield investment du jour pushed by Wall Street was mortgage-backed securities — home mortgages that had been packaged up and sold as “safe” investments all over the world. Nowadays bankers and traders are pushing another form of supposedly “safe” investment, the “collateralized loan obligation,” or C.L.O.

C.L.O.s are nothing more than a package of risky corporate loans made to companies with less than stellar credit. The big Wall Street banks make these loans to their corporate clients and then seek to move them off their balance sheets as quickly as possible, in the same way that a decade ago they packaged up and offloaded risky mortgage securities.

What is missing from all analyses of “repackaging” or “securitization” is that the failure of government to regulate this practice opens the door to extreme moral hazards enabling the banks to create financial weapons of mass destruction.

One backdoor risk is exacerbated by a tactic of some all-too-clever hedge fund managers. They buy a little of the debt of risky companies at a discount, and then buy a much larger amount of insurance on that debt — so-called “credit default swaps” — to theoretically hedge their risk. These wiseguys then do everything they can to force the company into a bankruptcy filing, which contractually triggers the insurance payoff on the debt. Since the insurance payment exceeds by far the overall cost of the discounted debt, the hedge fund profits handsomely.

The problem, of course, is that the bankruptcy filing can send the company and its creditors, including investors in C.L.O.s, into a downward spiral, hurting everyone but the architect of the scheme [e.s.]That’s what happened to Windstream, an Arkansas-based telecom company that was sent into bankruptcy protection in February. These “empty creditors,” as Henry Hu, a professor of law at the University of Texas has dubbed them, are rewarded for pushing companies into an otherwise unnecessary bankruptcy. That’s not the way the markets are supposed to work.

Sound familiar? It’s still happening with residential loans. The legal and policy question is whether it is good for the economy or good for society to have people profit off of a bad loan — especially when the the loan was intentionally made bad so it would fail? The architects of the scheme are the major investment banks. They never lose because they never actually take a risk. They know the loans will fail and manage to get investors to sell them credit default swaps and other disguised sale products so that the investors lose, but not the bank. Then the investors pass on the debt (risk of loss) to still more investors who are buying “minibonds” (coined by Lehman Brothers).

The end result is that the “borrower” is just a pawn. Instead of a traditional loan model, we have something far more sinister: the product sold by borrowers is their signature and from that signature the bank and hedge fund players make $10-$20 for each dollar that is described as a loan. The actual debt is disbursed to dozens if not hundreds of investors who have no direct right, title or interest to enforce the debt, note or mortgage.

And yet the debt, note and mortgage is allowed to be enforced by courts who don’t care about anything except that the loan once existed and even if it no longer exists the courts want to see it enforced.

Adding insult to injury, remote vehicles commissioned by the conduit players get still more “profit” by selling property that was foreclosed in the name of an entity that either doesn’t exist or has no interest in the debt, note  or mortgage and is so thinly capitalized that it cannot answer to even awards of costs and fees for unsuccessful attempts to enforce fabricated documents. The proceeds of sale go not to any named claimant but to a party claiming the proceeds as “recovery” of advances that were never funded by the “Master Servicer.”

This is insane. It has always been insane. I’m a capitalist, a former investment banker, commercial banker, and attorney who represented financial institutions. Generically speaking securitization is the bedrock of capitalism. But like a car driven into a crowd of people it can become a vehicle of terror.

As it is currently practiced, securitization of debt is constantly undermining our financial system and our society because it is not balanced by any assumption of risk.

The problem is laziness and billions of dollars in “donations” or “contributions” from the bank that enabled the banks to thwart reasonable regulation of mortgage backed securities to make sure they are at least backed by mortgages in a meaningful way and to make sure they are regulated securities. As it stands, MBS are not backed by the assets referenced in the offering documents. That means they are not MBS. And that means the exemption for MBS contracts does not apply and they should be regulated as securities.

And one more thing. The banks are going to hate this. The issuance of notes and mortgages by homeowners or corporate borrowers is not a traditional loan contract. It is an essential part of a securitization scheme. Without it, the scheme can’t exist. So notes and mortgages should be treated as securities. The definition of a security requires this categorization. The purchase of the debt, note or mortgage is no longer a purchase of a loan receivable. It is a passive vehicle for passive income generated by trading.

 

Tonight! Foreclosure Mills— Are They Accountable For Prosecuting Unlawful Claims?

 

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Neil F Garfield, Esq.

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

In the Case of OBDUSKEY v. MCCARTHY & HOLTHUS LLP, decided yesterday, March 20, 2019, a unanimous but ambivalent Supreme Court of the United States decided that lawyers are not debt collectors in non judicial states. In doing so, they undermined the due diligence requirement in the bar rules of every jurisdiction that require a lawyer to perform enough investigation to assure that the client is real and has at least an arguable claim.

Several justices opined that Congress should clear up the ambiguity that they perceived in the law. The case was seen as fundamental challenge to the non judicial statutory scheme adopted in 32 states in which property subject to a Deed of Trust could be sold privately without judicial process. We have called out the problem as a substantive and procedural one.

Substantively, most such sales are based upon false premises, i.e., that the claimant is a beneficiary which in simple language means that it is the owner of the debt.

Procedurally, the flaw in the nonjudicial scheme is that a challenge to the foreclosure puts the burden of proof on the borrower who has no direct knowledge of the foundation and can only interpret what is available.

This is different from the burden in judicial states that conform with due process — the claimant must establish it possesses a claim for relief that is founded on ownership of the debt, and that the proceeds of sale would go to pay the debt. While judicial states are still struggling with the fact that the sale proceeds are not going to pay the debt, in nonjudicial environments the question can hardly even come up.

Combined with litigation privilege the decision yesterday insulates lawyers from any liability for pursuing claims that they knew or should have known were legally corrupt.

What is more important and least understood is that the virtual immunity granted to lawyers provides banks with an impenetrable vehicle through which they continue to commit widespread fraud — to the detriment of borrowers, investors, taxpayers, the financial system and society at large.

 

How to Think About MERS

If you are going to challenge a foreclosure or sue for wrongful foreclosure and fraud, you need to know what you are doing and know what your opposition has been doing. You also must know what to do about it because knowing is not enough. You need to convince a judge who starts from a bias of upholding “contract” because that is what judges are supposed to do in our system.

Bottom Line: You must convince the judge that the claimant has not satisfied its burden of establishing an enforceable contract between itself and the borrower. And in the case of foreclosure the claimant must satisfy the condition precedent of ownership of the debt. That condition is often “met” solely by legal presumption arising from documentation that is proffered without any meaningful objection and without any impeachment of foundation witnesses.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
Think about MERS as your next door neighbor. He lets anyone come into his house and play with his computer. You simply are required to pay him a fee every month and he gives you a key, and the login and password to get into his computer.
*
So you go in and prepare a report from his computer saying that your loan is all paid up and a release and satisfaction is being filed. Just to be on the safe side you show that the mortgage was transferred to a party that has not made any claim for collection, further confusing the issue of ownership of the debt or mortgage.
*
Then you go to court and introduce the report as proof that the mortgage is satisfied. The report says is from John  Smith, your neighbor who is in the business of keeping mortgage records. You don’t show a canceled check or wire transfer receipt because there is no canceled check or wire transfer receipt; you just introduce the report that you created from your own data for your own purposes and published it with the sole purpose of showing it in court.
*
You bring in your neighbor who testifies that these records are kept in the ordinary course of his business and that the entries were made at or near the time of a transaction. (Notice he doesn’t say the entries were made at or near the time of THE transaction).
*
The court accepts the document that you prepared on your neighbor’s computer as evidence that the loan was entirely paid off and that a satisfaction of mortgage should have been issued. Notice that the evidence is not that YOU paid it off but rather that is was just paid off.
*
The response from your opposition would be that they want to see proof that you paid it off. But you have already introduced the report as your neighbor’s report (an independent third party) and the court accepted it as a business record of your neighbor. The court record now has “conclusive” evidence that the the loan was paid off. Further inquiry is not required and you shouldn’t be required to answer such a silly question that invades your private financial information.
*
Judgment is entered in your favor and the opposing party is taxed with costs and fees if you had an attorney. Further the court declares the mortgage satisfied and that the final order of the court should be recorded in the public records. Maybe the court orders the party you named in the report as being the new mortgagee to file a satisfaction of mortgage.
*
That is how MERS works. It’s simple reason for being in existence is not just to avoid recording fees but to act as a substitute for proof of an actual transaction. MERS is the neighbor of the banks and servicers. It gives them the key, the login and the password. After that they are on their own as to what data is entered into MERS and what reports are issued from MERS and what is in each report issued under the name of MERS.
*
So if someone is attempting to rely on a MERS report they are relying on a fiction of their own making. This is somewhat like uploading a fake trust document to SEC.gov and then citing to it as worthy of judicial notice or using it as a government filing. It isn’t. It’s just a fiction of their own making. And it never has the mortgage loan schedule attached which means the trust document is incomplete, subject to some later addition/revision that might or might not have been accepted by someone was authorized to accept it.
*
Objections to the MERS report must be about foundation. Discovery and investigation is key to knowing the facts as they apply to your case. Writing and presenting the defense narrative in motions and pleadings is the other key. Here is what you should be thinking about:
  • Establish that nobody employed by MERS entered any data or produced any report.
  • Ask the players for the identity of the individuals who entered data.
  • If they give you the name, question the individual.
  • Ask for the identity of individuals who produced reports.
  • If they give you the name, question the individual.
All this will make opposing counsel very uncomfortable as you are zeroing in on the nub of a fraudulent scheme. The lawyers will start feeling the heat as they approach suborning perjury. The banks will feel the heat because it threatens to expose the reality that nearly all claimed securitizations of residential loans were faked. That is the key to a successful (and confidential) settlement — the value of your case as threat to their  entire scheme or parts of it.
*
Spoiler alert: in most cases counsel will abandon the MERS report and use some other fabricated document instead. But you can use inconsistencies between their previous and current position to reveal that there are gaps that cannot be filled by legal presumptions.
*
In order to start defending you must know things. But in order to get traction in court you need to convince the judge. Badly drafted pleadings undermine credibility. That is why you need professional assistance.
*
The person drafting your defense narrative and the drafting your motions, discovery, and pleadings must know what needs to be said in order for the court to take the defense narrative seriously. And what needs to be said often sounds tame or irrelevant to lay people who want the judge to know that the opposition is a bunch of liars and thieves. Really good legal writers know that such conclusions are best left to the judge, after a process in which he/she gets thoroughly disgusted and exasperated with the lawyers, the servicer and the bank pretending to be a trustee of a dubious trust. 

BONY Mellon Crashes on Statute of Limitations in NY

While this case could have the effect of barring all those cases that are over 6 years old (NY Statute) where acceleration occurred, it does nothing in those jurisdictions like Florida that have twisted logic to create a virtual deceleration allowing the statute of limitations to continue running.

The logic and precedent cited by this NY court, Appellate Division, is basically what the rule has always been until in recent foreclosure cases, courts in other jurisdictions bent over backward to find ways to allow foreclosures to proceed even though the purported claimant failed to file until after the statute of limitations had run. Such actions were always considered to be time-barred which was supported by several doctrines. Now there is conflict.

The number of cases in which the statute of limitations is an issue has skyrocketed. Why?

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

see BONY Loses SOL Case in NY

also article: new york law journal/2019/03/20/mortgage-acceleration-and-statute-of-limitations

I’m one of the few people who, at age 72 and having practiced law for 42+ years, and who previously worked in commercial and investment banking, asks why any institution would wait after a default for 5, 6 even 10 years to file a foreclosure complaint. When I started practicing law any bank officer who failed to bring such a claim would risk termination of employment. That is still true for those banks who were the lender and still are.

After 13 years of research and analysis of this subject I have arrived at the following conclusions:

  • Most foreclosures today involve a claim on behalf of a party who will not receive the benefit of winning (and doesn’t care). For reasons unique to foreclosure cases this does not bar the named claimant as having lack of standing. No assertion is made that the claimed “assignee” or the claimed “successor beneficiary” will ever receive the money and they never do.
  • If there was an undisputed creditor to whom the debt was owed and that creditor had rights assigned to it under an assignment of mortgage and indorsement of promissory note, then there would be no delays. What creditor would wait 6 years before attempting to collect? Before the era of false claims of securitization, foreclosures were not barred by the statute of limitations because the situation didn’t come up. A bank has a duty to expeditiously enforce its claim for payment. Foreclosure actions that were barred by the statute of limitations were extremely rare birds.
  • There are two primary reasons for extended delays in initiating foreclosures in nonjudicial and judicial states:
    • First, the investment banker who started a securitization scheme is allowing its tacit partner, the alleged “Master Servicer”, to accumulate claims of servicer advances until the equity in the property has been used up.  This claim solely arises by labeling payments made to investors as “Servicer Advances” despite the fact that such payments come from the investors’ funds and not from the servicer and are thus not advances. So the proceeds of the sale of foreclosed property go to the so-called “Master Servicer” and not the party named as claimant.
    • Second, knowing that the paperwork in a specific case is already subject to scrutiny for forgery etc., the playbook calls for waiting, to wear the homeowner down, and then introducing new paperwork to correct the obviously defective fake paperwork.
  • BONY/Mellon, as in the case that is cited in the link above, is not acting as Trustee of anything, and is not a claimant in its own right. Further it is not going to receive the benefit of any foreclosure. Someone else will receive that benefit and that party will not be a creditor. So in the remote jungles of Wall Street decisions are made by persons who represent parties that will never be disclosed, none of whom are creditors at the time of foreclosure because the debt was previously further distributed amongst dozens of investors who have no direct claim on the debt, note or mortgage. The use of the BONY name is a ruse. They have nothing to do with the loan.
  • The implied trusts and investors don’t have a claim, so someone needs to be drafted or appointed to take the position of claimant, even if that is a false representation to a court. Neither the trust nor any holder of a certificate has any ownership interest in the debt, note or mortgage. If they don’t own the debt then they can’t enforce the mortgage. But it is getting harder to get people to signing documents that they know expose the signor to criminal liability, even though nobody except Brown at DOCX has been prosecuted so far.
  • So an important reason for such delays is that in cases where the false underbelly of illegal foreclosures can be easily exposed, the banks have chosen to wait it out while they get hundreds of thousands of foreclosure sales by default. This helps to cement the impression that the certificates issued in the name of nonexistent trusts actually have a value, encourages investors to buy more certificates and prevents investors from making claims for fraud, thus collapsing some large portion of the shadow banking market.

Beware of Magic Bullets

Departing from my usual format, there are a few things I want to say to people who are looking for relief from foreclosure and are hearing what they want to hear.

  • ONLY A COURT ORDER CAN STOP A FORECLOSURE. THERE ARE NO EXCEPTIONS
  • YOU CAN’T GET A COURT ORDER UNLESS YOU FOLLOW THE RULES AND THE LAW.
  • NOBODY HAS EVER OBTAINED SUCH AN ORDER WITHOUT A PROLONGED COURT BATTLE.
  • If someone tells you “just do this” they are partially or entirely wrong or worse.
  • Like everything life is complicated and that includes litigation. Any thought you are entertaining that you have some magic elixir in which you will summarily get a court order is delusional.
  • Every plan looks good on paper until it is implemented.

I am worried that those who in good faith are trying to find the magic bullet are promoting a misguided set of principles that will continue to make bad law. I admit that I contributed to this initially back in 2008 when I proposed that a quiet title action should wrap things up. I was dead wrong and the people who continue to pursue that strategy are always getting the same result: the homeowner loses and another case is either decided badly or worse, makes bad law with a legal opinion issued by a judge or panel of judges.

The truth is that a successful quiet title action is a rare bird along with similar strategies. And remember that an unenforceable document by one party is no reason to lift an encumbrance from the chain of title. In order to remove an encumbrance from the chain of title, the instrument must be completely void and no voidable. That means it should never have been recorded in the first place or that it is now void by operation of law. That is the ONLY circumstance in which a mortgage or deed of trust or assignment of mortgage can be lifted out of the chain of title.

I do agree with the strategy of attacking the assignments in a lawsuit or motion. The motions don’t get much traction but the lawsuits tend to do better if they are pursued aggressively and persistently, with full recognition that no bank or service is going to roll over and play dead even if you are completely correct on the law. Your opponents and their lawyers will do everything in their power to wear you down, undermine your confidence and the undermine the confidence of the lawyer representing the homeowner. Your strategy must be laser-focussed, supported by substantive law and procedure.

But I don’t agree that any lay person can accomplish an attack on assignments without a lawyer representing them. If the practice of law was just about the contents of a statute we wouldn’t need courts. It’s about procedure, rules of evidence and basic notions and biases of fairness.

It’s true that the substitutions of trustee, the assignments, the indorsements etc. are probably legally void. For the most part they are fabricated. An assignment of mortgage probably lacks any foundation.

But what you’re up against, for example, is the fact that an assignment of mortgage is often assumed to be an assignment of the debt and the note. An indorsement of the note is often assumed to be an assignment of the debt. Possession of the note is often assumed to be possession of the debt. Possession is then assumed to be the result of delivery. Delivery implies authority. Transfer of the note implies a transfer of the debt. Transfer of the debt implies the assignment of mortgage was proper under state statutes. And a proper assignment supports a declaration of default and foreclosure. A proper assignment means that party foreclosing is going to get the proceeds of sale on foreclosed property. End of story.

So that is where you stand when your challenge begins. Don’t kid yourself. The task is daunting.

Those conclusions are all legally valid assumptions and presumptions because that is what the law says should be done with these documents and events. Facial validity is like possession — it’s 9/10 of the law.

If you think you can simply challenge these assumptions and presumptions and events and quickly get an order that completely undermines the parties attempting to foreclose — without going through a grueling court battle — you are simply wrong.

That said, thousands of homeowners have indeed won based upon such challenges. Nearly all of those cases have been buried under seals of confidentiality. The way they won was by educating the judge, one small piece at a time, using persuasive court techniques that nobody other than an experienced trial lawyer knows how to use. By the time the case ended, the court, unwilling to strike all such foreclosures, was careful to detail the specific abuses and gaps in the case against the homeowner.

Bottom Line: If you have the money and the time and the commitment to oppose these illegal foreclosures, by all means do it. And if you must do it pro se, know that the opposition will steamroll you on procedure and the laws of evidence. So you must have some knowledgeable lawyer giving you specific guidance as each point becomes an issue. Don’t pursue any strategy that promises to be a quick fix.

 

PTSD: A Breakdown of Securitization in the Real World

By using the methods of magicians who distract the viewer from what is really happening the banks have managed to hoodwink even the victims and their lawyers into thinking that collection and foreclosure on “securitized” loans are real and proper. Nobody actually stops to ask whether the named claimant is actually going to receive the benefit of the remedy (foreclosure) they are seeking.

When you break it down you can see that in many cases the investment banks, posing as Master Servicers are the parties getting the monetary proceeds of sale of foreclosed property. None of the parties in the chain have lost any money but each of them is participating in a scheme to foreclose on the property for fun and profit.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

It is worth distinguishing between four sets of investors which I will call P, T, S and D.

The P group of investors were Pension funds and other stable managed funds. They purchased the first round of derivative contracts sometimes known as asset backed securities or mortgage backed securities. Managers of hedge funds that performed due diligence quickly saw that that the investment was backed only by the good faith and credit of the issuing investment bank and not by collateral, debts or mortgages or even notes from borrowers. Other fund managers, for reasons of their own, chose to overlook the process of due diligence and relied upon the appearance of high ratings from Moody’s, Standard and Poor’s and Fitch combined with the appearance of insurance on the investment. The P group were part of the reason that the Federal reserve and the US Treasury department decided to prop up what was obviously a wrongful and fraudulent scheme. Pulling the plug, in the view of the top regulators, would have destroyed the investment portfolio of many if not most stable managed funds.

The T group of investors were traders. Traders provide market liquidity which is so highly prized and necessary for a capitalist economy to maintain prosperity. The T group, consisting of hedge funds and others with an appetitive for risk purchased derivatives on derivatives, including credit default swaps that were disguised sales of loan portfolios that once sold, no longer existed. Yet the same portfolio was sold multiple time turning a hefty profit but resulted in a huge liability when the loans soured during the process of securitization of the paper (not the debt). The market froze when the loans soured; nobody would buy more certificates. The Ponzi scheme was over. Another example that Lehman pioneered was “minibonds” which were not bonds and they were not small. These were resales of the credit default swaps aggregated into a false portfolio. The traders in this group included the major investment banks. As an example, Goldman Sachs purchased insurance on portfolios of certificates (MBS) that it did not own but under contract law the contract was perfectly legal, even if it was simply a bet. When the market froze and AIG could not pay off the bet, Hank Paulson, former CEO of Goldman Sachs literally begged George W Bush to bail out AIG and “save the banks.” What was saved was Goldman’s profit on the insurance contract in which it reaped tens of billions of dollars in payments for nonexistent losses that could have been attributed to people who actually had money at risk in loans to borrowers, except that no such person existed.

The S group of investors were scavengers who were well connected with the world of finance or part of the world of finance. It was the S group that created OneWest over a weekend, and later members of the S group would be fictitious buyers of “re-securitized” interests in prior loans that were subject to false claims of securitization of the paper. This was an effort to correct obvious irregularities that were thought to expose a vulnerability of the investment banks.

The D group of investors are dummies who purchased securitization certificates entitling them to income indexed on recovery of servicer advances and other dubious claims. The interesting thing about this is that the Master Servicer does appear to have a claim for money that is labeled as a “servicer advance,” even if there was no advance or the servicer did not advance any funds. The claim is contingent upon there being a foreclosure and eventual sale of the property to a third party. Money paid to investors from a fund of investor money to satisfy the promise to pay contained in the “certificate” or “MBS” or “Mortgage Bond,” is labeled, at the discretion of the Master Servicer as a Servicer Advance even though the servicer did not advance any money.

This is important because the timing of foreclosures is often based entirely on when the “Servicer Advances” are equal to or exceed the equity in the property. Hence the only actual recipient of money from the foreclosure is not the P investors, not any investors and not the trust or purported trustee but rather the Master Servicer. In short, the Master servicer is leveraging an unsecured claim and riding on the back of an apparently secured claim in which the named claimant will receive no benefits from the remedy demanded in court or in a non-judicial foreclosure.

NOTE that securitization took place in four parts and in three different directions:

  1. The debt to the T group of investors.
  2. The notes to the T and S group of traders
  3. The mortgage (without the debt) to a nominee — usually a fictitious trust serving as the fictitious name of the investment bank (Lehman in this case).
  4. Securitization of spillover money that guaranteed receipt of money that was probably never due or payable.

Note that the P group of investors is not included because they do not ever collect money from borrowers and their certificates grant no right, title or interest in the debt, note or mortgage. When you read references to “securitization fail” (see Adam Levitin) this is part of what the writers are talking about. The securitization that everyone is talking about never happened. The P investors are not owners or beneficiaries entitled to income, interest or principal from loans to borrowers. They are entitled to an income stream as loans the investment bank chooses to pay it. Bailouts or even borrower payoffs are not credited to the the P group nor any trust. Their income remains the same regardless of whether the borrower is paying or not.

Securitization of Cows: Nobody accounts for anything

The following article struck my attention because it is a nearly exact replica of false claims of securitization. Bottom Line: They can’t all own the cow.

Anyone who understands securitization fail or false claims of securitization will see the parallels.

Same Cows Sold to Multiple People

CORSICA, S.D. — A report filed last week shows a man involved in a Corsica foreclosure case sold the same cattle to as many as four parties and has not accounted for more than 27,800 head. [e.s.]

 

Fifty-three interested parties have now been identified in the case against Robert and Becky Blom. An interim report filed March 5 by receiver Lewis Dirks indicated that as of Feb. 14, only 15 percent of the cattle which 29 parties claimed to have under the Bloms’ feedlot were being held between four lots, and some parties had received checks that bounced. [e.s.]

 

“At the time of the hearing on February 14, 2019, I had not determined a reason for being short so many head of cattle,” wrote Dirks in his report, stating that he had originally planned to start sorting out which cattle belonged to whom by looking for brands. [e.s.] 

But the day after the hearing, Dirks wrote, he was approached by someone who said he had seen the same invoice in both his own and another party’s paperwork.

“Investigation revealed that Robert Blom had collected money on the same group of cattle from multiple individuals,” Dirks wrote. “I now have some groups of cattle being sold to as many as four different individuals.” [e.s.]

 

As of Feb. 14, Dirks reported that between the 29 interested parties he had spoken to at that point, 32,758.6 head of cattle were believed to be under Robert Blom’s feedlot. (The rationale for the 0.6 head is not included in the report). With 4,953 head reported as being on one of four feedlots, that leaves more than 27,805.6 head unaccounted for at the time Dirks’ report was submitted. [e.s.]

 

Dirks said that while he was at the Blom feedlot on Feb. 8, he was told that up to 35 truckloads of cattle had been removed from the feedlots the previous day, although he has not seen paperwork to verify how many head of cattle that might have included. [e.s.]

 

He wrote that he had documentation that cattle had been moved back and forth between Robert and Becky Blom’s feedlot and the feedlot run by their son, Taylor Blom. [e.s.]

Tonight! How, When and Why to Use California Homeowner Bill Of Rights (CHBOR)

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Charles Marshall, Esq.

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

Both lawyers and homeowners often ignore CHBOR and similar statutes in other states. Because borrowers who feel screwed by the banks are reluctant to pour good money after bad, they don’t pay to have even basic research performed that could significantly improve their likelihood of  achieving a satisfactory result.

One person who has detailed extensive knowledge and experience about substantive law and procedural law in the courtroom is Charles Marshall our frequent guest host. Most statutory schemes designed to protect consumer or homeowner or borrower rights are basically procedurally statutes. They are aimed at providing assurance that the creditor seeking a remedy really has a right to do so and has rigidly complied with protections allowed to reinstate or work-out a loan.

Today Charles Marshall will address the implications for several areas of legal practice of the California Homeowner Bill of Rights (CHBOR) here in 2019, covering the following areas:

– pre-litigation practice;

– litigation practice–when a lawsuit is pending;

– appellate practice–when an appeal is pending, the lower court matter having gone to judgment;

– bankruptcy practice.

On the show he will break down whether, how and why to use CHBOR to accomplish litigation goals.

You need more than an expert

Homeowners lose for many reasons, but the main one, if they defend at all, is that they mistake substantive law as the only thing that matters. If that were the case, any computer would make the decision in all cases. They don’t.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

Assuming the loan is NOT still with an original lender who funded the loan, a successful defense of a foreclosure case must satisfy ALL of the following elements:

  1. Preparation of defense narrative that is coherent, short and laser focussed on real issues apparent from the face of documents that are being proffered to the court. NOTE: THIS IS NOT AN EXPERT OR FORENSIC REPORT. It is a legal analysis that makes difficult choices — out of the 50 arrows in your quiver, which 2 are you going to actually use? Due process doesn’t mean the Court must hear all your arguments.
  2. Consistency in the defense narrative. From pleadings to motions to argument to cross examination and eventually closing argument.
  3. Satisfaction of procedural requirements to state a coherent and focussed defense.
  4. A coherent and focussed defense based upon solid well-established substantive law.
  5. Aggressive and persistent pounding on motions directed at showing the “Trust” and the “Trustee” are appearing as fictitious entities.
  6. Aggressive and persistent pounding in Discovery requests, motions to compel and motions for sanctions.
  7. Motions in limine, if permitted.
  8. Compliance with trial orders and other orders of the court.
  9. Heavy preparation for hearings and trial.
  10. Effective and persuasive cross examination. This specifically excludes those issues that are later reported to have at least been put on record. That means nothing. What matters is actually undercutting the robo-witness in open court and that takes preparation and follow-up questions that keep drilling until the absence of knowledge and facts is revealed.
  11. Asking for relief that is legally possible and that the judge is likely to grant. Legally possible means BOTH procedural and substantive law is applied.

 

The Discovery Rule: Tolling the Statute of Limitations

There is an excellent post by Michael B. Schwegler in Tennessee on the whole issue of whether the statute of limitations can be extended to the date that the breach of duty was discovered. Schwegler’s post clearly enunciates the position of the Supreme Court of Tennessee. In my opinion it also articulates the way that most courts look at tolling when it comes to mortgage litigation and the torts arising from mortgage litigation.

READ IT: Whether and How the Discovery Rule Applies

Bottom Line Practice Note: If you want to toll the statute of limitations you must assert and prove that your client could not possibly have known or found out about the breach until a date later than the the end of the statutory period.

I think this means that you should look closely to determine the first time when discovery was possible, not the actual date on which discovery was actually made.  If you can do that and prove that it was virtually impossible for the victim to have known about the breach until the X day of Y Month, in Z year, then you have an extension of the statutory period until that date or you have a statutory period that first starts to run on that date. Generally speaking the statutes are worded to favor of the latter.

Also remember that claims barred by a statute of limitations are probably NOT barred if brought as affirmative defenses, to wit: a defense claim of entitlement to recoupment.

RECOUPMENT:

Recoupment is the setting forth of a demand arising from the same transaction as the plaintiff’s claim, to abate or reduce that claim. It is the means used to determine the proper liability on the amounts owed. Recoupment is in the nature of a defense arising out of some feature of the transaction upon which the plaintiff’s action is grounded. Recoupment, is a creditor’s right long recognized in bankruptcy proceedings.

Recoupment asserted as a defense is not an “offset” to a claim. Recoupment is not calculated by the net amount due from one party to the other computed by subtracting one claim from the other, but rather is the amount of the plaintiff’s claim alone on a particular contract, transaction or event. An offset or setoff can be money owed from any matter, including outside the lawsuit. Recoupment is a defense that goes to the foundation of plaintiff’s claim by deducting from plaintiff’s recovery all just allowances or demands accruing to the defendant with respect to the same contract or transaction.

 

 

Unworthy Trusts

The simple fact is that the REMIC trusts do not exist in the real world. The parties named as trustees — e.g. US Bank, Deutsch, BONY/Mellon — are trust names that are used by permission through what is essentially a royalty agreement. If you are dealing with a trust then you are dealing with a ghost.

Discovery is the way to reveal the absence of any knowledge, activity or reports ever conducted, issued or published by the named Trustee on behalf of the “trust” or the alleged “beneficiaries.” Take deposition of officers of the named Trustee. Your opposition will try to insert a representative of the servicer. Don’t accept that.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
*
For purposes of clarity I am using US Bank as an example. It is the most common.
*
US Bank has NO information about the trust, the servicer or the account for the borrower. Thus the purpose of any deposition of any officer of US Bank should be solely to establish the absence of events and data that should otherwise be present.
*
This is why as counsel for the lender, lawyers will not recommend going forward with the refinancing. Your opposition is asking you to accept their word for the “fact” that they represent a creditor who is entitled to payment not just because there is paperwork indicating that, but because they are really owed the money.
*
Knowing the truth is a basis for establishing gaps and revealing it to the trier of fact but should NOT be a basis of making allegations that you will be required to prove. It’s a thin line and the lawyer needs to be aware of this division, or else you will end up with a burden of proof you cannot sustain and unanswered questions that prevent the closing of refinancing — unless the “source” of refinancing is from another player in the world of securitization.
*
The fact that securitization players would accept the paperwork is only testament to the willingness of all securitization players to engage in such conduct as to maintain an illusion of legitimacy. Other lenders rely on such conduct at their peril. Other lenders do not receive the reward from multiple resales of the same debt.
*
So in your inquiries to officers of US Bank you want to establish the following, in order to force the true creditor to come forward (if there is one):
    1. US Bank has no duties normally attributed to a trustee.
    2. The “US Bank” name is basically a royalty arrangement in which the name can be used but there is no further substance to its “role” as trustee.
    3. There is no bank account established or maintained by US Bank for the alleged Trust.
    4. US Bank has never received any money through any means in connection with the subject debt. The borrower’s payments to the servicer have never been received by US Bank on its own behalf, as conduit or as trustee for any trust.
    5. In prior foreclosures involving the same trust, US Bank did not receive the proceeds of the foreclosure sale.
    6. US Bank has no reason to expect that it would receive the proceeds of a foreclosure sale involving the subject debt.
    7. US Bank has no mechanism in place where the payment of money to satisfy the claimed debt would be actually deposited into a bank account for the trust that is controlled by US Bank.
    8. The beneficiaries of the trust do not receive any money from borrower payments, foreclosure sales, or prepayments, refinancing or any other monetary transactions. US Bank probably does not know if this is true or not. US Bank has nothing to do with what, if anything, the “beneficiaries” of the “trust” receive or don’t receive.
    9. US bank has no information regarding the identity of the beneficiaries of the “trust.”
    10. US Bank has no information regarding whether any party is a beneficiary of the “trust”.
    11. US Bank has no information regarding the existence of the trust other than the documents forwarded to it for purposes of the deposition.
    12. US Bank does not keep or maintain accounting records pertaining to the trust.
    13. US Bank does not keep or maintain any records or documents pertaining to the trust.
    14. US Bank does not issue reports to anyone regarding the trust or the subject debt, note or mortgage.
    15. US Bank does not include information relative to the business activity of the “trust” or the subject debt, note or mortgage in any report to any regulatory authority, Federal or State.
    16. Except for fee income, US Bank does not include information relative to the business activity of the “trust” or the subject debt, note or mortgage in any financial report published to the public or to any regulatory authority, Federal or State.
    17. There is no “trust officer” appointed by US Bank to actively manage the affairs of the “trust.”There is no “trust officer” appointed by US Bank to actively manage the affairs of the subject debt.
    18. US Bank neither accepts nor gives any instructions to anyone regarding the affairs of the “trust.”
    19. US Bank neither accepts not gives any instructions to anyone regarding the subject debt, note or mortgage.
    20. US Bank has no power to either accept or give instructions regarding the trust or the subject debt.


Keep in mind that there are experts who believe that the debt no longer exists, and that you are dealing with the ghost of a creditor and the ghost of a debt. This is because the debt was resold multiple times and redistributed to multiple parties (new investors) under the guise of different instruments in which the value of the instrument was ultimately derived not from the debt, in actuality, but from the marketplace where such isntruments are traded. This is an ornate interpretation that has the ring of truth when you examine what the banks did, but this theory will not likely be accepted by any court.

*
That theory explains why when appellate and trial courts asked the direct question of whether the creditor can be identified the answer was no. The response was that the courts stopped asking.
*
But the issue at hand is whether, pursuant to state law governing foreclosures, a creditor is before the court possessing a valid claim to collect on a debt. If there is, then that creditor is entitled to payment. If there is not, then the claimed “creditor” is not entitled to either payment or foreclosure. 

Stop Referring to Defaults as Something Real

Referring to the default as real, but with an explanation of how it is subject to rationalization or argument, completely undermines your argument that they have no  right to be in court, to collect, to issue notices or initiate foreclosure. 

…when you refer to the default, you should refer to it as a false claim of default because at no time was Deutsch or any trust or any group of investors ever receiving payments from you as borrower. Nor did they have any contractual right to expect such payments from you as borrower. So Deutsch didn’t suffer any default and neither did the investors who own certificates that are not ownership interests in the debt, note or mortgage. And Deutsch won’t get any proceeds if the property is subjected to a foreclosure sale.

Questions to the servicer about how, when and where they made payments to Deutsch, or Deutsch as Trustee, or any trust, or any group of investors holding certificates will reveal their absence from the money trail. No such payments exist nor will they ever exist.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
I take issue with the practice of referring to “the default.” When someone refuses or stops paying another person that does not automatically mean that a default exists. A default only exists if the the payment was due to a specifically identified party and they didn’t get it. Failure to pay a servicer is not a default. Failure to pay a servicer who is sending your payments to a creditor IS a default.
Since the fundamental defense for borrowers that wins cases is that the claimant has no right to be in court, it seems wrong to refer to”the default.” It should be “the claimed default.”
If your refusal to make payment was in fact a default as to Deutsch as Trustee of a real trust or as authorized representative of the certificate holders (they never make that clear), then all of your arguments come off as technical arguments to get out of a legitimate debt. You will lose.
On the other hand if your position (i.e., your denial and affirmative defenses) is that Deutsch is not a party on its own behalf and that it is being named by attorneys as being in a representative capacity for (a) a trust that does not exist or (b) for holder of certificates that do not convey title to the debt, note or mortgage and are specifically disclaimed, then you have a coherent narrative for your defense.
And if you further that argument by asserting that Deutsch has never received any payments and does not receive the proceeds of foreclosure on its own behalf nor as trustee for any trust or group of investors and will not receive those proceeds in this case then you push the knife in deeper.
So if Deutsch is not appearing on its own behalf and the parties that the lawyers say it is representing either don’t exist or are not identified, then the action is actually being filed in the name of Deutsch but for and on behalf of some other unidentified party who may or may not have any right to payment.
What is certain is that Deutsch is being represented as the owner of the loan when it is not.  The owner of a loan receives payments. Deutsch never receives payment from anyone and the investors never receive payment from the borrowers. If they did the servicer would have records of that. 
So when you refer to the default, you should refer to it as a false claim of default because at no time was Deutsch or any trust or any group of investors ever receiving payments from the homeowner as borrower. Nor did they have any contractual right to expect such payments from you as borrower. So Deutsch didn’t suffer any default and neither did the investors who own certificates that are not ownership interests in the debt, note or mortgage. And Deutsch won’t get any proceeds if the property is subjected to a foreclosure sale. 
If Deutsch didn’t suffer any default it could not legally declare one. If the declaration of default was void, then there is no default declared. In fact, there is no default until a  creditor steps forward and says I own the debt that I paid for and I suffered a default here. But there is no such party/creditor because the investment bank who funded the origination or acquisition of the loan has long since sold its interest in the loan multiple times.
Thus when lawyers or as servicer or both sent notices of delinquency or default they did so knowing that the party on whose behalf they said they were sending those notices had not suffered any delinquency or default.
When homeowners refer to the default as real, but with an explanation of how it is subject to rationalization or argument, they completely undermine their argument that they have no  right to be in court, to collect, to issue notices or initiate foreclosure. 
And remember that the sole reason for foreclosures in which REMIC claims are present is not repayment, because that has occurred already. The sole reason is to maintain the illusion of securitization which is the cover for a PONZI scheme. The banks are seeking to protect “profits” they already have collected not to obtain repayment. That is why a “Master Servicer” is allowed to collect the proceeds of a foreclosure sale rather than anyone owning the debt.
Also remember that while it might be that investors could be construed as beneficiaries of a trust, if it existed, they actually are merely holders of uncertificated certificates in which they disclaim any interest in the debt, note or mortgage.  Hence  they have no claim, direct or indirect, against any individual borrower. 

PRACTICE NOTE: Don’t assert anything you cannot prove. Leave the burden of proof on the lawyers who have named an alleged claimant who they say or imply possesses a claim. Deny everything and force them to prove everything. Discovery should be aimed at revealing the gaps not facts that will prove some assertion about securitization in general. Judges don’t want to hear that.
Appropriate questions to ask in one form or another are as follows:
  1. Who is the Claimant/Plaintiff/Beneficiary?
  2. Who will receive the proceeds of foreclosure sale?
  3. Before the default, who received the proceeds of payment from the subject borrower? [They will  fight this tooth and nail]
  4. Did the trustee ever receive payments from the borrower?
  5. Does the trustee in this alleged trust have any contractual right to receive borrower payments?
  6. Do holders of certificates receive payments from the borrower through a servicer?

False Claimants: Partial transcript of last night’s Neil Garfield Show

LISTEN TO THIS EPISODE OF THE NEIL GARFIELD SHOW

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Neil Garfield, Esq.

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

 
Hi Neil Garfield here and this is Thursday March 7th, 2019.  Bill Paatalo joins me tonight since he has done so much work on this topic as a very capable private investigator. He’ll share his work with you in a moment.
Bill Paatalo and others have been working hard digging deeper and deeper into the trench that the banks have created in which the stench of corruption boils over into the fraudulent taking of homesteads across the country.
They kept pointing me toward a simple conclusion but I resisted because I overlooked that part of the lawyer’s work that means to start at the beginning. If I listened to Bill and others, I would have seen it earlier. I didn’t look, word by word, for the name of the claimant. Once I did, everything became simplified. Everything became clearer to me. AND I’m going to share that with you tonight.
I am broadcasting live from Duval County Florida and this show is brought to you by the livinglies blog, GTC honors, Lendinglies, AMGAR, and the Garfield firm, and this show is specially brought to you because of donations to the livinglies blog from listeners like you. Thank you. And for those of you who are not contributors we ask that you HIT THE DONATE BUTTON ON THE THE BLOG OR call 954-451-1230 or
202-838-6345  and pledge whatever you think you can afford. If this show has value for you, if  our work on the blog and our radio shows, without payment or other support has value to you then chip in. Please make a contribution to help us continue helping you and all consumers. I was just told that the link might not be functioning properly so if you can’t get through online please call 954-451-1230.
Bill was telling me, Dan Edstrom was telling me and even Charles Kopps was telling me but I didn’t hear and that is part of the problem of getting lawyers to represent homeowners who are being wrongfully foreclosed. Neither lawyers nor judges actually hear or believe a defense that is a complete defense to the claim brought in the name of a false claimant. Nearly everyone agrees to a false premise that the debt was not paid, and that the homeowner owes the debt to the claimant who is named in the foreclosure action.
LEGAL STANDING IS ABOUT WHETHER THE NAMED CLAIMANT EXISTS AND WILL, IF SUCCESSFUL, RECEIVE THE BENEFITS OF PREVAILING ON ITS CLAIM. IF THAT IS NOT TRUE, THERE IS NO VALID CLAIM. WE NOW HAVE SUBSTANTIAL EVIDENCE THAT THIS BASIC PROPOSITION IS NOT TRUE EXCEPT IN CASES WHERE THE ORIGINAL LENDER WAS THE LENDER AND IS STILL THE LENDER.
This simple proposition is what is missing from today’s debate over foreclosures. It turns out that the named claimants are not receiving checks when the property is liquidated and yes that does matter because if they do not receive the money it is because they were never intended to receive the money. And in that case then they had not experienced a default and if they had no default then they had no right to declare a default. And if they had no right to declare a default there is no default as to that name.
So bottom line there is no default as to a claimant who either does not exist or who is not intended to receive the benefits of any remedy for that default.
WHY DO WE HAVE THIS ISSUE? THE ANSWER IS OBVIOUS: MONEY. FOR VERY DOLLAR LOANED THERE ARE 10-20 DOLLARS IN GAIN FOR THE PLAYERS. THOSE PLAYERS, NEVER PRESENT IN YOUR FORECLOSURE CASE, ONLY SEEK TO PREVENT THAT $20 GAIN FROM BECOMING A $20 LIABILITY SO THEY CAN KEEP THEIR ILL-GOTTEN GAINS.
IF YOUR ATTACK ON THEIR PROOF REVEALS GAPS IN THE CHAIN OF OWNERSHIP OF THE DEBT, THAT UNDERMINES THE VALUE OF THE PAPER. IF THE PAPER IS UNDERMINED THEN THE DERIVATIVES, CREDIT DEFAULT SWAPS AND OTHER PAPER CREATED FOR THE SO-CALLED SECURITIZATION ERA MAY BE WORTHLESS OR WORTH MUCH LESS LESS THAN THEY PAID. AND IF THAT HAPPENS THEN THE INVESTMENT BANK THAT STARTED IT ALL HAS A LIABILITY FOR ALL THE MONEY IT MADE — 10X-20X THE AMOUNT OF EACH LOAN.
FORECLOSURE PLAYS A VITAL ROLE IN MAINTAINING THE ILLUSION THAT THE LOANS AND THE DERIVATIVES WRITTEN OFF OF THE LOANS WERE ALL VALID AND LEGAL.  THEY WERE NOT.
After 12 years of thinking and analysis I have boiled everything down to one question: Does the party named by the lawyers ever get anything out of a successful foreclosure? I think the answer is always NO if the loan has been sold into the secondary market and worse yet if it has been subject to securitization claims which are almost always completely false.
If the lawyers have given a name of an implied entity that does not exist, the answer is obvious but sometimes you need to parse their words to even discover that they are naming a party that does not exist. If the lawyers name a legally existing entity then the question is whether that is the entity who will actually receive the benefit of foreclosure. Again the answer if you parse the words used by the lawyers the answer is no, whoever it is they named as claimant will never see the use or proceeds of the foreclosed property.
And then you have the hybrid. Like Deutsch or US Bank or BONY as trustee for a jumble of words that imply but do not identify a trust and refer to certificate holders without identifying the certificates that in all events disclaim any interest in the subject debt, note or mortgage.
The certificates exist but they do not convey to the holders any right to the debt, note or mortgage. They merely receive a promise they will receive a stream of money indefinitely. They are not promised the principal amount of the debt.
They are not promised  the interest paid by the borrower. Because the certificates disclaim the interest the borrower does not owe the investors in so-called mortgage backed securities anything. AND by the way those securities are not securities and they are not mortgage backed.
BOTTOM LINE: If the lawyers know that the name they are using for the claimant is a fictitious entity or is an entity that has never received the proceeds of foreclosure in the past, then they know that the foreclosure is invalid and probably fraudulent but they do it anyway because they can and they get away with it until challenged aggressively by the rare homeowner who says hell no I won’t go.
If a third party is getting the benefit of the foreclosure that is an admission that the named claimant used by the lawyers in the foreclosure mill did not satisfy the requirement of Article 3 legal standing. That claimant does not satisfy the state requirements to be a beneficiary on a  DOT nor a mortgage on a mortgage.
The fact that they received an assignment does not create the ownership of the debt nor the right to enforce it if the debt is not owned buy the claimant whose name is ebbing used to seek the remedy of foreclosure when there is no expectation that the named claimant will actually receive the proceeds of sale when property is foreclosed. .
That named party or claimant does not have a claim and doesn’t expect to receive the benefit of the remedy for which the lawyers have applied in their name — if they even exist.
Welcome to the show Bill Paatalo. Do you think I finally got your message?
BONY CHECK mentioned by BILL. Check was made out to BONY as trustee but negotiated by Bayview on behalf of Chase. BONY was the named claimant.
“I don’t know who gets the proceeds of foreclosure sale.” from depo in Paatalo case
Banks need the foreclosure for Ponzi scheme that they call securitization not for so-called the payment from the proceeds of sale. Often it goes to the so-called Master Servicer under the guise of recovery of Servicer Advances which have themselves been “Securitized.”
Lawyer license issues and civil liability. There are more suits now than ever before brought by homeowners against the foreclosure mills AFTER they have won the primary foreclosure case.

Tonight! False Claimants: Who’s on First?

LEGAL STANDING IS ABOUT WHETHER THE NAMED CLAIMANT EXISTS AND WILL, IF SUCCESSFUL, RECEIVE THE BENEFITS OF PREVAILING ON ITS CLAIM. IF THAT IS NOT TRUE, THERE IS NO VALID CLAIM.

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Neil Garfield, Esq.

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

After 12 years of thinking and analysis I have boiled everything down to one question: Does the party named by the lawyers ever get anything out of a successful foreclosure? I think the answer is always NO if the loan has been sold into the secondary market and worse yet if it has been subject to securitization claims which are almost always completely false.

If the lawyers have given a name of an implied entity that does not exist, the answer is obvious but sometimes you need to parse their words to even discover that they are naming a party that does not exist. If the lawyers name a legally existing entity then the question is whether that is the entity who will actually receive the benefit of foreclosure. Again the answer if you parse the words used by the lawyers the answer is no, whoever it is they named as claimant will never see the use or proceeds of the foreclosed property.

And then you have the hybrid. Like Deutsch or US Bank or BONY as trustee for a jumble of words that imply but do not identify a trust and refer to certificate holders without identifying the certificates that in all events disclaim any interest in the subject debt, note or mortgage.

BOTTOM LINE: If the lawyers know that the name they are using for the claimant is a fictitious entity or is an entity that has never received the proceeds of foreclosure in the past, then they know that the foreclosure is invalid and probably fraudulent but they do it anyway because they can and they get away with it.

%d bloggers like this: