ALERT! Migrating from fake notes to eNotes: If consumers don’t stop this they will be without any defense to any abusive practice and any fake account started in their name

The banks have been securitizing data not debt. Now they are trying to make data the substitute for the real thing. In other words, screw the investors, screw the consumers, screw the government and the banks take everything.

It’s not securitization that is evil. It is a handful of bankers who are lying to us about securitization. There is a factual and legal difference between securitization of loans and securitization of information about loans. The acceptance of eNOTES or any digitized version of important legal documents is an invitation to disaster. This will make 2008 nostalgic for us.

We are the stage of final approval — allowing eNotes to be used instead of real notes. There are no protections for consumers and the practice of passing off securitization of data will be institutionalized as meaning the same thing as securitization of debt. The biggest ripoff in human history will be signed, sealed and delivered. Both investors, as a class (i.e., pensioners) and homeowners as class will suffer for generations because of this.  

Write to the CFPB, your congressman and your Senators. Voice your objection to dropping paper documents. Your life depends upon it. 

They make it sound good — like the next step in human evolution. But what they are proposing is a completely open playing field for only the banks — leaving consumers back in the dark ages.

see https://www.ginniemae.gov/Summit/Documents/June_13_11_15am_Digital_Collateral_Industry_Workgroup.pdf

This is basically institutionalizing moral hazard. For two decades the banks have gotten away with using images of notes that have been destroyed. The issue is the same as digitized voting. if you don’t have the physical document to backup the data, you are left with a cyber world in which anyone with access can change reality.

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I have no objection to the use of images of notes or mortgages or deeds of trust as long as the physical document exists and can be accessed upon demand.  but I have plenty of objections to the use of digitized versions of important legal documents unless they are adequately protected by the government in transparent practices.
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The whole reason we have public records is to prevent what the banks are now trying to do. If this goes through, public records will no longer exist. they will consist of digitized data from parties who have paid their way into being considered trustworthy. the average consumer doesn’t stand a chance in that environment.
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In a nutshell here is the problem: Wall Street has been fraudulently presenting securitization of data as though they were securitizing loans and debts. that never happened, which is why all of the documents from REMIC transactions are false, fiction, fabricated, forged and backdated.
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If they had securitized your “loan”, the language included in the note and mortgage would be sufficient, to wit: you would have consented to the resale of your loan and that the successor who purchased it would have the same rights to administer, collect and enforce as the original lender. That is what you signed up for and that, coupled with the fact that our economy runs on securitization of assets to diversify risk, is what makes securitization legal, necessary, proper and just.
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But they didn’t securitize your loan or anyone else’s loan because from their end there was no loan. From their end they made sure you received money and that money was used an incentive to issue the note and mortgage. But nobody purchased the note and mortgage. In most cases nobody ever purchased it even at origination. Although they told you the name of a party who was defined as “Lender” that party had no money, access to money nor any right to any money flowing into or out of the homeowner transaction.
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That is why the notes were destroyed — probably 95% of them. To you that is like shredding currency. But to them, their plan required them to keep all revenue generated by their scheme — not just some of it. So they needed to substitute data for documents. Every scanned image is data. And those images can be copied indefinitely. But you can only have one signed original note. The banks are tired of being restricted to selling your loan once, so they developed a plan to sell the data from your loan dozens of times.
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The analogy is the atom. In the legal world you can only sell the atom once. But wall Street figured out a way around that.
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They sell information about (i.e., data) the protons, electrons and nucleus along with a variety of other behavioral characteristics of those physical elements but they never say they are selling the atom — even though their collective sales of information about the everything composing the atom is equal to dozens of times the price of the atom.
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By using this fictional strategy they can say they never sold or bought the atom and therefore any liability arising from purchasing or selling the atom doesn’t attach to them.
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Does that mean no securitization ever occurred? NO! But it does mean that what everyone thinks has been securitized is still sitting there untouched. They securitized data not debt.
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That means that your loan, like that atom, has never moved and was not in fact a loan and there is no loan agreement because nobody agreed to become your lender.
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You signed papers where YOU agreed to designate a party as a lender but nobody at any stage of the process they labelled as “lending” ever signed anything that said “I am your lender. I own your obligation. I paid for it. You owe me the money.” You might think or assume that happened but it never did. 
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So far the investment banks have been pretending to be lenders when they are not and they would fight to the death if you sued them as lenders. Their defense would be that they are not lenders and as proof they would swear they have no interest in your loan. And they would be right.
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They made a ton of money selling information about your loan in the form of derivatives, hedge contracts, insurance contracts etc. On average they made $12 from every $1 they gave you. But they never paid you one penny for your role in their scheme of securitizing data. Whatever money you received they lured you into promising to pay it — but little did you know that you would paying companies with financial interest in your transaction which you mistakenly think is a loan. YOUR LOAN HAS NOT BEEN SOLD BECAUSE THERE IS NO LOAN.
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They did this by converting from public records to digital private records which means that management of any given company can claim anything and nobody is the wiser unless someone does an audit and understands what they’re looking at. By directing everyone’s attention to images they are directing everyone to data instead of documents.
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There is nothing legal about what the vienstmetn banks did to investors and nothing legal about what they’re doing to homeowners. But they have convinced most judges, regulators, lawyers and consumers that their practices, while not exemplary, are merely an accurate presentation of the truth and so the deficiencies occur without harm to the system or to investors or homeowners. Nothing could be further from the truth.
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In a nutshell investors were harmed because they unknowingly bought into some highly risky unsecured junk bonds and then signed away their right to do anything about it.
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In a nutshell homeowners were harmed because instead of getting the protections of the truth in lending Act and other federal and state statutes they were left hanging in the wind, with a fake loan agreement in which the players on the other side had no stake or incentive to make the transaction successful. In fact the loan agreement failed to deliver a lender. Quite the opposite they knew the transaction was toxic and they bet on it and the worse the odds the more money they made.
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So instead of physically committing the crimes of forgery, perjury, uttering a false instrument, recording a false instrument and mail fraud, now they seek to avoid all of that by forcing and seducing us into thinking that digitally records are enough, digital signing is enough and that digital contracts and promissory notes are enough. And anytime they want, they access those documents and alter them for other purposes temporarily or permanently in order to produce the highest possible revenue and profit.
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It’s now or never folks. If they get away with this one, you can kiss every consumer protection you have goodbye.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst. On Wall Street in NYC, he was director of investment banking at Garfield and Company, member of the NYSE, AMEX, Chicago Mercantile and 4 other exchange associations. 
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Three Card Monty: Why is Pandemic Relief Going to Servicers? Why are they not claiming relief for REMIC Trusts? Will homeowner debts be reduced by Federal payments to “Servicers?”

https://www.nytimes.com/2020/04/21/business/mortgage-investors-coronavirus.html?referringSource=articleShare

By failing to require a credit to homeowners when the Federal government makes payments on claimed obligations, the bailout is simply adding to profit of investment banks, servicers and foreclosure mills. They are eating their cake and having it too. Obligations are paid off but their claim against homeowners remains unchanged.

Sign Petition to Change the rules to Protect Homeowners from Fraudclosure.

Foreclosures are filed in the name of a named Trustee for a collection of words that is then treated as an entity. More specifically it is treated as a trust. Sometimes the foreclosure mill goes further and says it is filed for the holders of certificates.

  • If a “trust” is the claimant in a foreclosure, why isn’t it a claimant in a plea for relief due to nonpayments from homeowners?
  • If the holders of certificates are suffering economic loss from nonpayment by homeowners why are they not the direct recipients of Federal relief?
  • Who is really going to get Federal bailout money and will it cover a loss or will it be profit?
  • If the ultimate result is that obligations are being paid, why isn’t the homeowner getting notice of a corresponding reduction in the amount of payments claimed as due?
  • Who is the real party collecting money and why?

The answers are obvious. Wall Street is again playing fast and loose with its labels to suit its own ends. If investors fail to receive payments promised them by the investment banks they have only the rights set forth in their contract with an investment bank —- the “underwriter” that underwrote the offering of certificates that were false labelled as “mortgage backed” and again falsely labeled as “bonds.” But the underwriter was actually the issuer. So the entire proceeds of sale of certificates went to the investment bank instead of a “REMIC Trust.”

And that is why there is no trust getting a Federal bailout and there was no trust getting a Federal bailout in 2008-2009. No trust has any claim to any money. So why are they Plaintiffs in judicial foreclosures and beneficiaries in nonjudicial foreclosures? Because the Wall Street banks are inserting a jumble of words to escape liability for making false claims.

Investors have no right to receive the payments from homeowners. So the relief package proposed by Fannie and Freddie is designed to shore up the value and liquidity of holding unregulated securities (certificates) in a market that is wholly controlled by investment banks (not a free market) and completely dependent on continued sales of certificates that are neither worthy of the high ratings conferred upon them by rating agencies nor worthy of being insured (unless the insurance contract is a ruse backed up by the expectation of a Federal bailout, again).

Hidden beneath the waves of economic loss and relief packages is an essential truth about what Wall Street has most people believing was the securitization of loans. But the loans were never sold, much less divided into pieces that were sold off as securities. It was personal data that was securitized and then there were complex instruments indexed on that personal homeowner data that was securitized. None of it had anything to do with the sale of any loan nor the collection of any money from homeowners.

While the foreclosure judgment and a sale of property  results in money proceeds, as I have reported here, it never goes to any Trustee, trust, or even investor. The money is sent to companies that have claimed to be servicers although they never say they are servicing on behalf of owners of the loans. that’s because the loans were never sold.

Those self-proclaimed “servicers” are actually collecting money for the investment banks who have labelled themselves “Master Servicers.” The investment banks receive money from multiple sources — continued sales of “certificates” (falsely  dubbed mortgage backed bonds), homeowner payments, and most importantly trading profits on various derivative and hedge contracts.

The obligation of the investment bank to make any payment to any investor who paid for a certificate is limited to their agreement when they purchased the certificate from the investment bank.

That obligation is in large part discretionary — i.e., it is based upon the sole discretion of the investment bank as to whether money paid to investors can be recovered and is further restricted by a discretionary determination s to whether there have been “events” based on indexing to certain data that is called “loan data.”

The servicing companies mentioned in the article cited above have no obligation to make any payments to the investors. Their function is to distribute money to investors by access to funds made available by the investment bank. And the assumption that their thin capitalization puts them in danger of extinction is a misapprehension of the true facts.

“Servicers” have no obligation to make payments to investors. None. Investors will get paid as long as investment banks see a reason to pay them. And the investment banks will see a reason to pay them as long as they can sell more certificates.

The proof is in the pudding. After the payments are made, homeowners are never given notice that the money claimed as due from them has been reduced. The game is on — get money from homeowners, force the sale of their homes even though everyone is getting paid. 

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

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT.  IT IS NOT A SHORT PROCESS IF YOU PREVAIL. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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