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This show is devoted to convincing the lawyers who will listen that they are missing out on something very profitable and important. Representing homeowners faced with foreclosure papers can and does present an opportunity for large paydays, consistent victories in court, and playing a part in changing the trajectory of home finance in this country and around the world.

In 2008 I presented a seminar that provided the essentials of foreclosure defense as we knew them at that time. We repeated it several times in different parts of the country. In that seminar, I also presented a business plan for lawyers to do it. It was the hub and spoke plan that allowed homeowners to pay monthly based upon the known length of time that any foreclosure would last.  About a dozen lawyers followed my instructions and made millions of dollars.

It’s time for a new push.

What Happened With Your “Loan” — By admitting that you received a loan you lose.

The plain truth is that homeowners are losing their cases through assymetry of information. They think they understand when they do not have a clue. They are admitting the obvious, which turns out to wholly untrue. In so doing they give the court no choice but to enter judgment aganst them. 

ApplicationForLoanProcessAndFundingOfServiceFees

I am experimenting with new ways to present this. If you click on the above chart you will see that the application process is actually a dead end. Nobody actually agrees to lend any money. Nobody does lend money.

Money arrives later at the “closing” table but unknown to the borrower it is not a loan. Contrary to popular belief which is based on ignorance of the actual process, no loan is sold. No obligation is sold. Nobody ever becomes the owner of any loan or obligation. Nobody records a purchase of any loan obligation. And nobody maintains any loan account receivable.

Whether it is described as a loan broker or “loan originator” (for which there is no legal definition) it is there for the fees. It is not present to participate in any loan nor does it receive any profit from making a loan. It does not share in any profit from making a loan because there is no loan. There is no lender. Calling it a lender does not make it a lender.

But you can reverse that (and lose your case) by calling it a lender in your conversations, pleadings, motions, memoranda or argument in court.

  • As soon as you have done that, for purposes of that case, you have admitted the existence of the loan.
  • In so doing you have tacitly admitted that the loan broker or the originator was the lender.
  • In admitting that there was a lender you have identified the lender as the loan broker or originator.
  • By doing that you have admitted that the originator had ownership of the underlying obligation.
  • By admitting that, you have admitted that the originator or broker paid the money that appeared at the “closing table.”
  • By admitting that you have also admitted that the lender — or its “successor” — suffered an actual economic loss that was proximately caused by the “nonpayment” of the homeowner.
  • And so by admitting that you have admitted that the action for foreclosure is valid.

Just a word about “successors.” You will often find the word used. Sometimes “MERS and its successors.” Sometimes “MERS for XYZ and its successors.” A successor is a company who has purchased the obligation or who has purchased the company that owned the obligation. In residential transactions, there is almost no instance where such an event has occurred.

There are no successors. There are no companies even willing to pose as successors unless they are sham conduits — thinly capitalized to be thrown under the bus or thrown into bankruptcy. The way this is done is clever. Sometimes the sham is actually just a trade name masquerading as a company or a “trust.”

Trusts do not exist for legal purposes unless there is something of value entrusted to a person or company for purposes of administering that thing (res, in Latin) for the benefit of beneficiaries.

The place where many lawyers get hung up on that is that there exists an “allonge” or assignment of mortgage” or “assignment of beneficial interest” to, for example, U.S. Bank, as trustee for ABC-2006 certificates.

If you dig deep enough in discovery just under the surface you will find a “trust agreement.” The trust agreement never grants any powers to the administration of any affairs to the named trustee.  So U.S. Bank is actually prohibited from doing anything with the paper that is assigned to it. In fact, you will find that it lacks the right, power, or duty to even ask what is happening in “the trust.” So labeling it as trustee is merely window dressing and does not describe any trust relationship or position. But you can change all that and lose the case simply by your own reference to U.S. Bank as a trustee, which in turn admits the existence of a trust etc.

Note that the paper “entrusted” to the trustee is not for benefit of investors who, by the ay, are not beneficiaries of the trust. the securities broker is the beneficiary. And note also that the paper transfer of an interest in a mortgage is a legal nullity in all jurisdictions unless there is a contemporaneous transfer of ownership of the underlying obligation. This is further amplified by Article 9 §203 UCC, adopted in all US jurisdictions, that requires payment of value as a condition precedent for filing any foreclosure action.

Please also take notice of the fact that the purported delivery of the original note is mostly fiction since the original note was most likely destroyed shortly after the “Closing.” But even if delivery of the original note is deemed to have occurred, the possessor is neither a holder nor anyone else entitled to enforce it unless they received a delivery from someone who owned the underlying obligation or note.

This is where the Wall Street brokers have snookered the courts, the lawyers, and even homeowners themselves. A holder is someone who has possession and has the right to enforce. The case for foreclosure fails on this point unless, here it is again, the homeowner admits delivery or fails to contest it and allows the assumption of authority to enforce to operate without rebutting that presumption through discovery.

So when U.S. Bank or Bank of New York Mellon says it is appearing “not on its own behalf” you should take them at their word. They have no interest. Treating them as though they do have an interest only leads to the same series of conclusions described above causing the court of law to conclude that your defenses are both technical and dilatory. You have already admitted the case against you — so why are fighting it? That isn’t bias. It is the standard operating procedure. Courts are not exhibiting bias when they do that. They are following orders based upon centuries of legal precedent and statutes.

I have many followers who are adhering to the untenable notion that the courts are acting out of bias or even malice. They are not — even when the judge appears irritated. You must get off that tack which will gain you nothing and lead nowhere and get on board with a defense that actually does work, based on the facts and existing law. Getting angry with me for saying that homeowners are losing their cases rather than “banks” winning the case is a failure to recognize the fact that few people are able to make sense out of the process called “securitization” — a process that never actually happened in residential transactions with homeowners.

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

Repurchase agreements only advance the myth that loans were purchased in the first place.

Investors would do much better if they stopped litigating the duty to enforce repurchase agreements. The repurchase agreement is void because there was no purchase. There are better claims to make that are more easily proven.

Homeowner litigants need to have more courage and attack the existence and ownership of the underlying alleged obligation much more explicitly and directly. They will be pleasantly surprised. While they will never get an admission that the whole affair is a scam, they will be able to raise the inference and thus limit the evidence in court that would ordinarily be allowed to prove the existence, ownership, and enforceability of what the claimant says is an unpaid debt. The key to winning any defense narrative is establishing insufficiency of the evidence.

As I stated in 2006 on TV, radio and articles published in many news outlets, both homeowners and investors should get on the same page. This was a sham. Investors probably can become creditors if they ask the court for a declaration of rights and maybe even appointment of a receiver. The debtors would be the Wall Street firms and possibly even homeowners — although not to the full extent of the purported obligation to repay the compensation paid to homeowners for assuming concealed risks.

see https://www.nationalmortgagenews.com/opinion/will-cmbs-litigation-be-the-new-rmbs-litigation

This is how the legal system became twisted beyond recognition in dealing with claims arising from investors, homeowners, and GSEs. There was a faulty and totally erroneous assumption (in most cases) that there was ANYTHING to buy or sell.

Wall Street banks have successfully relied upon complexity to force everyone else to rely on a single source for explanation of the falsely proclaimed “securitization” process. That single source is Wall Street. As long as we are only getting our information from the perpetrators of this financial terrorism we will be paralyzed.

Now this is spilling over to commercial transactions where some securitization actually happened. As between banks it was called “syndication” of loans, but when they get outside investors to take a piece then it is called “securitization” because each investor gets some paper document proclaiming them to be the owner of part of the loan debt, note, and mortgage.

That never happened with residential loans. No investor ever purchased a share of any loan. No Wall Street securities brokerage firm (aka “investment bank”) ever established, maintained or sold any homeowner obligation. But the Wall Street firms did pretend to sell the note and mortgage, albeit without any conveyance of the alleged underlying obligation.

A paper transfer of an asset is evidence of transfer, but it is not the actual transfer. So homeowners can ask for proof of payment of value for the underlying obligation (see Article 9 §203 UCC) to rebut the appearance of a transfer. A transfer of a mortgage without transfer of the underlying obligation is a legal nullity in all 50 states, as it should be.

And unless Wall Street wants to tell us that such transfers were gifts, then those “purchases” were never completed because there was no payment of value one exchange for a conveyance of ownership of the alleged underlying obligation. This is one of the finer points that Wall Street is exploiting. They may point to the movement of money or value — but that movement did not result in a transaction in which an owner of the obligation (i.e.e someone who paid for it) was paid value for the obligation and executed a transfer document “for value received.”

Of course, the underlying obligation had been extinguished contemporaneously with the origination or acquisition of the obligation — because nobody wanted to be left holding the bag. Any entry on the accounting ledger of any entity that established the obligation as an asset purchased for value would make that entity liable for violations of lending laws. And nobody wanted to suffer a real loss if the homeowner failed to make scheduled payments to pay off a nonexistent debt.

So nobody wanted to own any debt from homeowners. And they didn’t need to own anything. The securities scheme was not securitization of any homeowner debt. It was a much larger scheme that used homeowner transactions only as an outside reference point for data reporting in the sole discretion of Wall Street firms who were the bookrunners in each scheme.

The securities were bets — not evidence of ownership of anything. The sale and trading of such securities, combined with insurance and hedge contracts produced so much money that the homeowner transaction became irrelevant excepts as a reference point for data. So everyone got paid in full and then some. Nobody needed to own any homeowner obligation and the fact that they didn’t own the obligation would not stop them from pursuing enforcement despite the lack of ownership.

In order to really sell an asset, you must own it. In order to own it you must pay for it. In order to transfer ownership of the asset, you must transfer the actual asset not just a piece of paper that talks about the asset. It is possible that some payment of value exchanged hands in which there was a reference to both residential and commercial loans. But in residential transactions with homeowners, it is mostly NOT possible that any underlying obligation was transferred (even if it appears to have been “sold”).

So “repurchase agreements” for bad loans were in fact a misnomer and perpetuated the myth that securitization of residential loans actually occurred. Litigation over rights that do not exist is a farce. But that is exactly where the courts are stuck. This is not a failing of the courts. It is the failure of litigants to bring the true facts to the court’s attention.

This failure arises from the lack of understanding of the process that Wall Street is calling “securitization.”

Litigants need to have more courage and attack the existence and ownership of the underlying alleged obligation much more explicitly and directly. They will be pleasantly surprised. While they will never get an admission that the whole affair is a scam, they will be able to raise the inference and thus limit the evidence in court that would ordinarily be allowed to prove the existence, ownership, and enforceability of what the claimant says is an unpaid debt. The key to winning any defense narrative is establishing the insufficiency of the evidence.

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

FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In the meanwhile you can order any of the following:
*
CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS, AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
*
Please visit www.lendinglies.com for more information.

 

Think You Have a Loan? Think Again! Don’t allow the Wall Street “investment banks” to steal back money that was earned by homeowners. 

What is obvious is false but only investment bankers know it. 

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Without knowing it, you are probably doing business with a Wall Street securities brokerage firm calling itself an “investment bank.” You didn’t know because they were never disclosed. And the money they paid to you was not a loan — at least not for them it wasn’t. They didn’t treat it that way on their own records and neither should you. That means they are attempting to collect back the money they paid to you even though it wasn’t a loan.
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So what did they pay you for? When you issued the promissory note what were you buying?
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The plain truth is that without an extensive background in investment banking — and all the experience, training, and education that requires — you have no way of understanding the nature of the transaction. So I’m breaking it down into its simplest components here — useful for litigation but not a complete description.
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You asked for and thought you received a loan. After all, you did get the money, didn’t you? When you applied for a loan, you thought you had identified the lender with whom you were doing business. After all, the money came after you signed the “closing documents”, right? So when the judge asked if you received the loan, you say “yes” believing there is no way you could deny the “obvious.
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And that is how Wall Street has been winning for 20 years. What is obvious is false but only investment bankers know it. 
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Here is what you didn’t know (in nearly all cases):
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  1. Yes, you asked for a loan, but the application you submitted was not to a lender.
  2. Contrary to the laws governing loan transactions many things were not disclosed to you.
  3. In most cases, the intake for the application for a “loan” is performed by a loan broker, who doesn’t care what the transaction is called as long as he/she gets the commission.
  4. The loan broker gets paid if you sign the closing documents. By signing the promissory note you have created an obligation — but is it enforceable? The answer is yes if it really was a loan transaction.
  5. The loan broker then forwards the information on the “loan” application to an IT platform that is controlled by a third party platform which in turn is acting for a securities firm preparing to issue and sell securities to investors. As far as they’re concerned they would prefer to pay you $1 rather than $200,000. But then how could they get you to sign a note for $200,000?
  6. The securities that are issued and sold are not a conveyance of any interest in your transaction. They are bets based upon reports issued by the securities firm. The prices of those securities are unrelated to the total amount of your transaction or any part of your transaction. So they can sell these securities indefinitely until the market is saturated (no more demand).
  7. On average, the dollar volume of revenue generated by the securities firm selling the securities is $12 for each $1 of your transaction.
  8. The amount they paid you was, therefore, on average, around 8.5% of the total revenue. It was a commission, not a loan. But you didn’t know that.
  9. You received a payment that was dressed up as a loan. You never thought to bargain for reasonable compensation for entering into a transaction that was the keystone of all the sales of all of the securities. And you never thought about whether you wanted to be part of a business venture whose purpose was to sell betting rights based upon reports about your transaction and whether you were making scheduled payments.
  10. Collection and enforcement of the obligation you created when you executed the promissory note is the act of taking back the commission they paid to you. And because they want all of it back plus interest that leaves you with negative compensation for initiating a huge business venture and allowing the use of your name and reputation. (They get all the benefits, you get the shaft).
  11. And even at the point of collection and enforcement you still don’t know that you are actually dealing with a securities firm that has no financial interest in your transaction. You don’t know because nobody is telling you that. They insist on calling it a loan and since it looks like a loan, everyone (including you) thinks it is a loan.
  12. When they get money from you or from the sale of your property they have no place to put it. They can’t debit an account receivable that reflects ownership of your obligation because there is no account receivable on the ledger of any company. Your payments constitute a return of the commission they paid to you — an amount that they deemed reasonable. That means that their payment is evidence of the amount of commission to the homeowner that the securities firm deemed reasonable. Ask any lawyer what that could mean.
  13. In court, they seek to increase their profits by forcing the sale of your house. But that can only be done legally if the forced sale is granted by a court because the action is a foreclosure. But it isn’t a foreclosure if the claimant is not the owner of your obligation. And they can’t be the owner of your obligation unless they paid value for it — which is why there would be an entry on the accounting ledgers of some company if anyone paid for your obligation and received a conveyance of ownership of your obligation. 
  14. In every loan, there is the lender and a borrower. You intended to be a borrower but you never made the journey. The biggest problem in foreclosure defense is the fact that homeowners and their lawyers (and the judges before whom they appear) believe that you did make the journey.
  15. That is because your counterpart was not a lender, had no means or intention of being a lender, and was seeking to avoid being called a lender at all costs — because they didn’t want to be held responsible for violations of the Federal Truth in Lending Act and other federal and state law governing lending, collections, and enforcement.
  16. The borrower has every legal right and legal expectation that the party representing itself as a lender is doing the underwriting of a loan with due diligence. That means they have a stake in the outcome of the transaction. It if its a loan, their revenue, profit, and assets are dependent upon repayment of the ”loan.” 
  17. In most cases, your transaction was conducted by the securities firm acting through sham conduit intermediaries. The sole purpose was to start the sale of securities. Some of those securities were bets against the performance data of your loan.
  18. So they had an incentive and a vested interest in seeing your “obligation” fail. That is why they inflated appraisals, granted no doc loans, granted NINJA loans, and offered “teaser” terms that were guaranteed to fail when the scheduled payments were reset.  The securities brokerage firm was betting on a sure thing. 
  19. In addition, the riskier the loan the higher the interest they could charge. That’s because everyone (except the Wall Street firm) thought it was a loan. And the higher the interest the less they had to pay out from the fund of capital generated by selling securities to investors. So if you had a $200,000 transaction where the securities brokerage firm set a price of 10% “interest,”  they were receiving around $400,000 from investors to cover that “loan” (which was actually a commission). That is why there is no loan account receivable on the books of anyone — not even the securities brokerage firm that funded it out of investor capital.
  20. Everyone on the “securitization” team got paid without exception. There is no debt.

So here is the message to homeowners, lawyers, regulators, law enforcement, and lawmakers:

Don’t allow the Wall Street “investment banks” to steal back money that was earned by homeowners. 

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

FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In the meanwhile you can order any of the following:
*
CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS, AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
*
Please visit www.lendinglies.com for more information.

Sometimes the client figures it out better than the lawyer

The problem has always been how to present this counterintuitive reality to a judge who is convinced that securitization of a loan DID occur even though the transaction was not in fact a loan and no sale occurred.

After decades of litigating and teaching litigation, the one common theme throughout my career has been the knowledge that often your best ideas come from the client, who is unencumbered by thoughts of what can’t be done.

One such client of mine in the state of Hawaii asked a simple question. She asked whether the homeowner, post-foreclosure, could ask for surplus funds. Surplus funds are defined by statute to mean that once the debt is paid including all expenses of enforcement, the remainder of the proceeds of a forced sale of the property should be returned to the homeowner. This is basic law applied in all jurisdictions. The “lender” does not get a bonus — at least not legally.

So that sparked some thought and analysis. If the claim was based on a nonexistent loss, then the entire proceeds of the sale should be turned over to the homeowner. In addition,  the filing of a motion or petition for accounting for the money proceeds from the sale could reveal the nonexistence of the implied loss and the nonexistent claim. That, in turn, could lead to a claim for sanctions or damages for filing a frivolous lawsuit. And that might all be included in a petition for declaratory, injunctive, and supplemental relief in which the court is asked to declare fee title, unencumbered, vested in the homeowner.

In any event, procedurally, the demand for an accounting followed by a motion to enforce the demand seems appropriate and should send the foreclosure mill spiraling. You see, the money never goes to the named claimant where the alleged claim was based upon securitization of the debt — because the loan, debt, note, and mortgage were never securitized. (Securitization means breaking up an asset into component parts that are sold to investors in pro-rata shares. Such sales never occurred. Securities were sold but they did not represent an ownership interest in any asset.)

The problem has always been how to present this counterintuitive reality to a judge who is convinced that securitization of a loan DID occur even though the transaction was not in fact a loan and no sale occurred.

The answer might be, in addition to the defensive strategies suggested on these pages, that instead of an appeal you file a motion to compel an accounting and a motion to open limited discovery on the accounting. The motion is actually a motion to compel the return of surplus cash generated from the sale of the property. Of course, that might need to wait until the sale to a third party but there are good arguments for filing it when the credit bid is offered by the named claimant.

Thus far, the banks have been selling property and then depositing the cash into an account controlled by a concealed investment bank notwithstanding the naming of the sham conduit claimant in whose name the foreclosure process was started. Frequent sleight of hand name changes occurs post-judgment or even post-sale.

It is difficult to imagine any court denying the request for the return of excess funds. Obviously, the argument from the foreclosure mill would be something like this: “The loss has already been established as the law of the case and the sale price was less than the loss, so there is no surplus.” But that argument flies in the face of current judicial doctrine which holds that even in a default situation you must still prove the damages.

And once the court is convinced you to have a right to see what happened to the money, it is difficult to imagine that the court would not order the foreclosure mill to produce the accounting. Like a request for identification of the creditor and the loan account receivable, such orders will be ignored because they must be ignored — even at the expense of sanctions. And the reason is quite obvious after reviewing thousands of cases — there is no loan account, there is no loss and there is no creditor despite all appearances to the contrary.

So if they file a false accounting they are probably committing or suborning perjury. And I don’t think many people are willing to sign such documents for any amount of money unless they don’t value their freedom.

The interesting thing about procedural rules is that the judge is more than happy to apply them if they can get rid of the case. In this case, a motion for sanctions for failure to comply with the homeowner’s request and the judge’s order will most likely produce either a direct win for the homeowner or a very satisfactory settlement — albeit with someone who had no right to settle with you.

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

FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In the meanwhile you can order any of the following:
*
CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS, AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
*
Please visit www.lendinglies.com for more information.

How and Why to Litigate Foreclosure and Eviction Defenses

Wall Street Transactions with Homeowners Are Not Loans

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I think the biggest problem for people understanding the strategies that I have set forth on this blog is that they don’t understand the underlying principles. It simply is incomprehensible to most people how they could get a “loan” and then not owe it. It is even more incomprehensible that there could be no creditor that could enforce any alleged obligation of the homeowner. After all, the homeowner signed a note which by itself creates an obligation.
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None of this seems to make sense. Yet on an intuitive level, most people understand that they got screwed in what they thought was a lending process.
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The reason for this disconnect between me and most of the rest of the world is that most people have no reason to know what happens in the world of investment banking. As a former investment banker, and as a direct witness to these seminal events that gave rise to the claims of “securitization” I do understand what happened.
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In this article, I will try to explain, from a different perspective, what really happened when most homeowners thought that they were closing a loan transaction. For this to be effective, the reader must be willing to put themselves in the shoes of an investment banker.
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First, you must realize that every investment banker is merely a stockbroker. They do business with investors and other investment bankers. They do not do business with consumers who purchase goods and services or loans. The investment banker is generally not in the business of lending money. The investment banker is in the business of creating capital for new and existing businesses. They make their money by brokering transactions. They make the most money by brokering the sales of new securities including stocks and bonds.
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The compensation received by the investment banker for brokering a transaction varied from as little as 1% or 2% to as much as 20%. The difference is whether they were brokering the sale of existing securities or underwriting new securities. Obviously, they had a very large incentive to broker the sale of new securities for which they would receive 7 to 10 times the compensation of brokering the sale of existing securities.
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But the Holy Grail of investment banking was devising some system in which the investment bank could issue a new security from a fictional entity and receive the entire proceeds of the offering. This is what happened in “residential lending.” And this way, they could receive 100% of the offering instead of a brokerage commission.
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But as you’ll see below, by disconnecting the issuance of securities from the ownership of any perceived obligation from consumers, investment bankers put themselves in a position in which they could issue securities indefinitely without limit and without regard to the amount of the transaction with consumers (homeowners) or investors.
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In short, the goal was to make it appear as though loans have been securitized even know they had not been securitized. In order for any asset to have been securitized it would need to have been sold off in parts to investors. What we see in the residential market is that no such sale ever occurred. Under modern law, a “sale” consists of offer, acceptance, payment, and delivery. So neither the investment bank nor any of the investors to whom they had sold securities, ever received a conveyance of any right, title, or interest to any debt, note, or mortgage from a homeowner.
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At the end of the day, the world was convinced that the homeowner had entered into a loan transaction while the investment banker had assured itself and its investors that it would be free from liability for violation of any lending laws — as a “lender.”
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Neither of them maintained a loan account receivable on their own ledgers even though the capital used to pay homeowners originated from banks who loaned money to investment bankers (based upon sales of “certificates” to investors), which was then used to pay homeowners as little as possible from the pool of capital generated by the loans and certificate sales of “mortgage-backed bonds.”
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From the perspective of the investment banker, payment was made to the homeowner in exchange for participation in creating the illusion of a loan transaction despite the fact that there was no lender and no loan account. This was covered up by having more intermediaries claim rights as servicers and the creation of “payment histories” that implied but never asserted the existence or establishment of a loan account. Of course, they would need to dodge any questions relating to the identification of a creditor. That could be no creditor if there was no loan account. This tactic avoided perjury.
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Of course, this could only be accomplished through deceit. The consumer or homeowner, government regulators, and the world at large, would need to be convinced that the homeowner had entered into a secured loan transaction, even though no such thing had occurred. From the investment bankers’ perspective, they were paying the homeowner as little money as possible in order to create the foundation for their illusion.
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By calling it “securitization of loans” and selling it that way, they were able to create the illusion successfully. They were able to maintain the illusion because only the investment bankers had the information that would show that there was no business entity that maintained a ledger entry showing ownership of any debt, note, or mortgage — against which losses and gains could or would be posted in accordance with generally accepted accounting principles (and law). This is called asymmetry of information and a great deal has been written on these pages and by many other authors.
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Since the homeowner had asked for a loan and had received money, it never occurred to any homeowner that he/she was not being paid for a loan or loan documents, but rather was being paid for a service. In order for the transaction to be perceived as a loan obviously, the homeowner had to become obligated to repay the money that had been paid to the homeowner. While this probably negated the consideration paid for the services rendered by the homeowner, nobody was any the wiser.
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As shown below, the initial sale of the initial certificates was only the beginning of an infinite supply of capital flowing to the investment bank who only had to pay off intermediaries to keep them “in the fold.” By virtue of the repeal of Glass-Steagall in 1998, none of the certificates were regulated as securities; so disclosure was a matter of proving fraud (without any information) in private actions rather than compliance with any statute. Further, the same investment banks were issuing and trading “hedge contracts” based upon the “performance” of the certificates — as reported by the investment bank in its sole discretion.
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It was a closed market, free from any free market forces. The theory under which Alan Greenspan, Fed Chairman, was operating was that free-market forces would make any necessary corrections, This blind assumption prevented any further analysis of the concealed business plan of the investment banks — a mistake that Greenspan later acknowledged.
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There was no free market. Neither homeowners nor investors knew what they were getting themselves into. And based upon the level of litigation that emerged after the crash of 2008, it is safe to say that the investors and homeowners were deprived of any bargaining position (because the main aspects fo their transition were being misrepresented and concealed), Both should have received substantially more compensation and would have bargained for it assuming they were willing to even enter into the transaction — highly doubtful assumption.
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The investment banks also purchased insurance contracts with extremely rare clauses basically awarding themselves payment for nonexistent losses upon their own declaration of an “event” relating to the “performance” of unregulated securities. So between the proceeds from the issuance of certificates and hedge contracts and the proceeds of insurance contracts investment bankers were generally able to generate at least $12 for each $1 that was paid to homeowners and around $8 for each $1 invested by investors in purchasing the certificates.
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So the end result was that the investment banker was able to pay homeowners without any risk of loss on that transaction while at the same time generating capital or revenue far in excess of any payment to the homeowner. Were it not for the need for maintaining the illusion of a loan transaction, the investment banks could’ve easily passed on the opportunity to enforce the “obligation” allegedly due from homeowners. They had already made their money.
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There was no loss to be posted against any account on any ledger of any company if any homeowner decided not to pay the alleged obligation (which was merely the return of the consideration paid for the homeowner’s services). But that did not stop the investment banks from making claims for a bailout and making deals for loss sharing on loans they did not own and never owned. No such losses ever existed.
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Investment bankers first started looking at the consumer lending market back in 1969, when I was literally working on Wall Street. Frankly, there was no bigger market in which they could participate. But there were huge obstacles in doing so. First of all none of them wanted the potential liability for violation of lending laws that had recently been passed on both local and Federal levels (Truth in Lending Act et al.)
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So they needed to avoid classification as a lender. They achieved this goal in 2 ways. First, they did not directly do business of any kind with any consumer or homeowner. They operated strictly through “intermediaries” that were either real or fictional. If the intermediary was real, it was a sham conduit — a company with virtually no balance sheet or income statement that could be collapsed and “disappeared” if the scheme ever collapsed or just hit a bump in the road.
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Either way, the intermediary was not really a party to the transaction with the consumer or homeowner. It did not pay the homeowner nor did it receive payments from the homeowner. It did not own any obligations from the homeowner, according to modern law, because it had never paid value for the obligation.
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Under modern law, the transfer or conveyance of an interest in a mortgage without a contemporaneous transfer of ownership of the underlying obligation is a legal nullity in all states of the union. So transfers from the originator who posed as a virtual creditor do not exist in the eyes of the law — if they are shown to be lacking in consideration paid for the underlying obligation, as per Article 9 §203 Uniform Commercial Code, adopted in all 50 states. The transfers were merely part of the illusion of maintaining the apparent existence of the loan transaction with homeowners.
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And this brings us to the strategies to be employed by homeowners in contesting foreclosures and evictions based on foreclosures. Based upon my participation in review of thousands of cases it is always true that any question regarding the existence and ownership of the alleged obligation is treated evasively because the obligation does not exist and cannot be owned.
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In court, the failure to respond to such questions that are posed in proper form and in a timely manner is the foundation for the victory of the homeowner. Although there is a presumption of ownership derived from claims of delivery and possession of the note, the proponent of that presumption may not avail itself of that presumption if it fails to answer questions relating to rebutting the presumption of existence and ownership of the underlying obligation. Such cases usually (not always) result in either judgment for the homeowner or settlement with the homeowner on very favorable terms.
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The homeowner is not getting away with anything or getting a free house as the investment banks have managed to insert into public discourse. They are receiving just compensation for their participation in this game in which they were drafted without their knowledge or consent. Considering the 1200% gain enjoyed by the investment banks which was enabled by the homeowners’ participation, the 8% payment to the homeowner seems only fair. Further, if somehow the homeowners’ apparent obligation to pay the investment bank survives, it is subject to reformation, accounting, and computation as to the true balance and whether it is secured or not. 
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The obligation to repay the consideration paid by the investment bank (through intermediaries) seems to be a negation of the consideration paid. If that is true, then there is neither a loan contract nor a securities contract. There is no contract because in all cases the offer and acceptance were based upon different terms ( and different deliveries) without either consideration or execution of the terns expected by the homeowner under the advertised “loan contract.”
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Payments By Homeowners Do Not Reduce Loan Accounts

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Each time that a homeowner makes a payment, he or she is perpetuating the myth that they are part of an enforceable loan agreement. There is no loan agreement if there was no intention for anyone to be a lender and if no loan account receivable was established on the books of any business. The same result applies when a loan is originated in the traditional way but then acquired by a successor. The funding is the same as what is described above. The loan account receivable in the acquisition scenario is eliminated.
*

Once the transaction is entered as a reference data point for securitization it no longer exists in form or substance.

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For the past 20 years, most homeowners have been making payments to companies that said they were “servicers.” Even at the point of a judicial gun (court order) these companies will fail or refuse to disclose what they do with the money after “receipt.” Because of lockbox contracts, these companies rarely have any access to pools of money that were generated through payments from homeowners.
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Like their counterparts in the origination of transactions with homeowners, they are sham conduits. Like the originators, they are built to be thrown under the bus when the scheme implodes. They will not report to you the identity of the party to whom they forward payments that they have received from homeowners because they have not received the payments from homeowners and they don’t know where the money goes.
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As I have described in some detail in other articles on this blog, with the help of some contributors, the actual accounting for payments received from homeowners is performed by third-party vendors, mostly under the control of Black Knight. Through a series of sham conduit transfers, the pool of money ends up in companies controlled by the investment bank. Some of the money is retained domestically while some is recorded as an offshore off-balance-sheet transaction.
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In order to maintain an active market in which new certificates can be sold to investors, discretionary payments are made to investors who purchase the certificates. The money comes from two main sources.
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One source is payments made by homeowners and the other source is payments made by the investment bank regardless of whether or not they receive payments from the homeowners. The latter payments are referred to as “servicer advances.” Those payments come from a reserve pool established at the time of sale of the certificates to the investors, consisting of their own money, plus contributions from the investment bank funded by the sales of new certificates. They are not servicer advances. They are neither in advance nor did they come from a servicer.
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Since there is no loan account receivable owned by anyone, payments received from homeowners are not posted to such an account nor to the benefit of any owner of such an account (or the underlying obligation). Instead, accounting for such payments are either reported as “return of capital” or “trading profits.” In fact, such payments are neither return of capital nor trading profit. Since the investment bank has already zeroed out any potential loan account receivable, the only correct treatment of the payment for accounting purposes would be “revenue.” This includes the indirect receipt of proceeds from the forced sale of property in alleged “foreclosures.”
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By retaining total control over the accounting treatment for receipt of money from investors and homeowners, the investment bank retains total control over how much taxable income it reports. At present, most of the money that was received by the investment bank as part of this revenue scheme is still sitting offshore in various accounts and controlled companies. It is repatriated as needed for the purpose of reporting revenue and net income for investment banks whose stock is traded on the open market. By some fairly reliable estimates, the amount of money held by investment banks offshore is at least $3 trillion. In my opinion, the amount is much larger than that.
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As a baseline for corroboration of some of the estimates and projections contained in this article and many others, we should consider the difference between the current amount of all the fiat money in the world and the number and dollar amount of cash-equivalents in the shadow banking market. In 1983, the number and dollar amount of such cash equivalents was zero. Today it is $1.4 quadrillion — around 15-20 times the amount of currency.
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Success in Litigation Depends Upon Litigation Skills: FOCUS

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I have either been lead counsel or legal consultant in thousands of successful cases defending Foreclosure. Thousands of others have been reported to me where they used my strategies to litigate. Many of them resulted in a judgment for the homeowner, but the majority were settled under the seal of confidentiality.
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Thousands more have reported failure. In reviewing those cases it was clear that they were either litigated pro se or by attorneys who were not skilled in trial practice and who had no idea of the principles contained in this article and my many other articles on this blog. I would describe the reason for these failures as “too little too late.” In some ways, the courts are designed more to be final than to be fair. There are specific ways that information becomes evidence. Most people in litigation do not understand the ways that information becomes evidence and therefore fail to object to the foundation, best evidence, hearsay etc.
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Even the people that submit wee phrased and timely discovery demands fail, more often than not, to move for an order to compel when the opposition fails or refuses to answer the simple questions bout the establishment, existence, and ownership of the underlying alleged obligation, debt, note or mortgage. Or they failed to ask for a hearing on the motion to compel, in which case the discovery is waived. Complaining about the failure to answer discovery during the trial when there was no effort to enforce discovery is both useless and an undermining of the credibility of the defense.
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Since I have been litigating cases for around 45 years, I don’t expect younger attorneys to be as well-versed and intuitive in a courtroom as I have been. It’s also true that many lawyers, both older and younger than me, have greater skills than I have. But it is a rare layperson that can win one of these cases without specific training knowledge and experience in motion practice and trial law.
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In the final analysis, if the truth was fully revealed, each foreclosure involves a foreclosure lawyer who does not have any idea whose interest he/she is representing. They may know that they are being paid from an account titled in the name of the self-proclaimed servicer. And because of that, they will often make the mistake of saying that they represent the servicer. They are pretty careful about not specifically saying that the named plaintiff in a judicial foreclosure or the named beneficiary in a nonjudicial foreclosure is their client. That is because they have no retainer agreement or even a relationship with the named plaintiff or the named beneficiary. Such lawyers have generally never spoken with anyone employed by the named plaintiff or the named beneficiary.
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When such lawyers and self-proclaimed servicers go to court-ordered mediation, neither one has the authority to do anything except show up. Proving that the lawyer does not actually represent the named trustee of the fictitious trust can be very challenging. But there are two possible strategies that definitely work.
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The first is to do your legal research and find the cases in which investors have sued the named trustee of the alleged REMIC trust for failure to take action that would’ve protected the interest of the investors.
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The outcome of all such cases is a finding by the court that the trustee does not represent the investors, the investors are not beneficiaries of the “Trust,” and that the trustee has no authority, right, title, or interest over any transaction with homeowners. Since the named trustee has no powers of a trustee to administer the affairs of any active trust with assets or a business operating, it is by definition not a trustee. For purposes of the foreclosure, it cannot be a named party either much less the client of the attorney, behind whom the securitization players are hiding because of a judicial doctrine called “judicial immunity.”
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The second thing you can do is to ask, probably during mediation at the start, whether the lawyer who shows up is representing for example “U.S. Bank.” Or you might ask whether US Bank is the client of the lawyer. The answer might surprise you. In some cases, the lawyer insisted that they represented “Ocwen” or some other self-proclaimed servicer.
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Keep in mind that when you go to mediation, frequently happens that it is attended by a “coverage lawyer” who might not even be employed by the Foreclosure bill. Such a lawyer clearly knows nothing about the parties or the case and will be confused even by the most basic questions. If they fail to affirm that they represent the named trustee of the named fictitious trust, that is the time to stop  the proceeding and file a motion for contempt for failure to appear (i.e., failure of the named plaintiff or beneficiary to appear since no employee or authorized representative appeared.)
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And the third thing that I have done with some success is to make an offer. You will find in most cases that they are unwilling and unable to accept or reject the offer. A substantial offer will put them in a very bad position. Remember you are dealing with a lawyer and a representative from the alleged servicer who actually don’t know what’s going on. Everyone is on a “need to know” footing.
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So if you make an offer that the lawyer thinks could possibly be reasonable and might be acceptable to an actual lender who was holding the loan account receivable, the lawyer might be stuck between a rock and a hard place. Rejection of an offer that the client might want to accept without notifying the client is contrary to bar rules.
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But both the lawyer and the representative of the alleged servicer know that they have no authority. So they will often ask for a continuance or adjournment of the mediation. At that point, the homeowner is well within their rights to file a motion for contempt. In most cases, the court order for mediation requires that both parties attend with full authority to settle the case. In plain language, there is no reason for the adjournment. But they need it because they know they have no authority contrary to the order mandating mediation. Many judges have partially caught on to this problem and instruct the foreclosure mill lawyer to make sure he doesn’t need to “make a call.”
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Every good trial lawyer knows that they must have a story to tell or else, even if the client is completely right, they are likely to lose. You must focus on the main issues.
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The main issue in foreclosure is the establishment, existence, and ownership of the alleged underlying obligation. All of that is going to be presumed unless you demonstrate to the court that you are seeking to rebut those presumptions. There can be no default and hence no remedy is there is either no obligation or no ownership of the obligation by the complaining party.
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Discovery demands should be drafted with an eye towards what will be a motion to compel and proposed order on the motion to compel. They should also be drafted with an eye toward filing a motion in limine. Having failed and refused to answer basic questions about the establishment, existence, and ownership of the alleged underlying obligation, the motion in limine would ask the court to limit the ability of the foreclosure mill to put on any evidence that the obligation exists or is owned by the named Plaintiff or beneficiary. They can’t have it both ways.
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Failure to follow up is the same thing as waiving your defenses or defense narrative.
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So that concludes my current attempt to explain how to win Foreclosure cases for the homeowner. I hope it helps.
*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

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

Why You Need to Understand the Truth and How to Use It to Successfully Defend Foreclosure Cases

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

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

You don’t need to believe me. You don’t need proof that what I am saying is true. You have every right in every court to file demands for discovery relating to the existence and ownership of the debt. Ask any lawyer or any judge. They will affirm this to be true. And ask any accountant. The debt exists only if someone maintains a current ledger entry on their own books of record that shows they paid value for the underlying obligation, along with having supporting documentation (proof of payment). If they didn’t pay value then they don’t own it — under both accounting rules and the laws of every jurisdiction.

Everyone is complaining about why homeowners are not winning more cases. They all seem to have their own specific grievance theory about lawyers, judges, regulators etc. But the real problem is the homeowners themselves. They simply won’t accept the fact that a claim filed against them has absolutely no merit.

So the first thing they do is admit the existence of the debt, the existence of delinquency, the existence of default, and then they go on to explain why they should be let out of what they have already admitted was a legitimate debt that is unpaid  — contrary to the agreement they signed. After losing the case, homeowners claim bias and any other theory that distracts from their own personal responsibility for their loss.

No judge is a mind reader or an investment banker. Acting as though a judge should be a mind reader or an investment banker is foolishness.

If the claim filed against you arises as a result of a claim of securitization of a debt, the claim is false. There was no securitization of debt. There was no sale of any debt. There is no authority arising from the securitization of debt. The document submitted by a self-proclaimed servicer both irrelevant and inadmissible as evidence in court — but only if a timely objection is raised. That is how the system works.

The same thing holds true when the named claimant is not a trustee. In most cases, the transaction was still the reference point for securitization, to wit: the issuance and sale of securities. And those securities were not conveyances of any right, title, or interest in any debt, note, or mortgage. So the fact that the securities were bets on data contained in discretionary reports issued by the” investment bank” posing as “Master Servicer” does not mean the debt was sold. It wasn’t. Like the supposed “REMIC Trustee” the named claimant has no loss and in fact has no interest in the outcome of litigation — except as a profiteer.

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

This is reminiscent of the repeated reports to the SEC of wrongdoing by Bernie Madoff. The reports were regarded as too absurd to be true on the scale that was reported — until 10 years later when Madoff himself admitted all charges and was sent to prison. Just because a lie is a whopper doesn’t mean that it can be turned into truth. Eventually, financial historians are going to see “Securitization” for what it is — a PONZI scheme. Nothing was securitized.

It is understandable that Homeowners are a bit put off by the apparent complexity of securitization. But it becomes much simpler when you realize that securitization never occurred. The securities that were issued and sold to investors did not represent ownership of any debt, note, mortgage, or payment.

It is also understandable that homeowners are not well-versed in court procedure, the burden of proof, or the rules of evidence. And it is even understandable for homeowners to assume that their debt still exists. We can’t expect homeowners to understand what has been completely concealed from them.

Because of limited judicial resources, the courts were forced into running roughshod over the rights of homeowners — solely because of the assumption that the debt existed and that somehow the money proceeds of the forced sale would find its way into the hands of investors who had directly or indirectly purchased the transactions that were labeled as loans.

  • Removing the assumption of an existing debt the homeowner who properly and timely files a denial of claims and or who files affirmative defenses should be permitted to rebut the legal presumptions arising from apparently facially valid documentation and to contest the actual facial validity of such instruments.
  • Removing the assumption of an existing debt requires the trial court to treat discovery demands seriously rather than as an annoyance.
  • Removing the assumption of an existing debt requires the trial court to strictly apply existing law instead of inventing new law.

If a lawyer meets a prospective client who admits liability, the lawyer is going to look for other means to protect the client from enforcement. If a lawyer admits liability on behalf of his client the judge is going to consider technical factors in the enforcement of the liability. But the judge is not going to deny enforcement on the basis that the liability does not exist. If the homeowner and the lawyer failed to bring that issue up, then it is not an issue that will be litigated. Those are the rules. That is not bias.

There is nothing more basic to a foreclosure action than the existence and ownership of the underlying obligation. Homeowners and their lawyers have made the mistake of trying to prove the true facts of securitization or lack thereof. But all they really need to do is challenge the presumptions raised by the allegations and exhibits of the claimant — during the process of discovery. They fear this path because they fear the claim is real.

The problem is that neither homeowners nor their attorneys are going to do that. Instead, they are going to look for a magic bullet in the form of technical deficiencies of the allegations or exhibits. This almost guarantees that the judge will order foreclosure, a sale will occur and the homeowner will be evicted. How would you feel if somebody owed YOU money and they got out of it by poiinting out some minor technical deficiency?

You don’t need to believe me. You don’t need proof that what I am saying is true. You have every right in every court to file demands for discovery relating to the existence and ownership of the debt. Ask any lawyer or any judge. They will affirm this to be true. And ask any accountant. The debt exists only if someone maintains a current ledger entry on their own books of record that shows they paid value for the underlying obligation, along with having supporting documentation (proof of payment). If they didn’t pay value then they don’t own it — under both accounting rules and the laws of every jurisdiction.

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

But the burden is on the homeowner to raise the objections. The burden is on the homeowner to deny the allegations and challenge the exhibits. If the homeowner fails to timely raise the issues in proper form, then the debt does exist for purposes of litigating the case — even if there is no debt in real life. Courtrooms are not real life. All courtroom decisions are legal fictions in which the judge’s finding of fact is final even if it differs from the real world. If it were otherwise, courts could not work and no disputes would be resolved — ever. 

Your expectation that lawyers and judges should know about all of this is misplaced. The only people who would know this information for a fact are people like me. I was an actual practicing investment banker and I was physically present in the room when the seeds of the current scheme of securitization were discussed way back in 1970.

When I later read that someone figured out a way to separate the debt from a “mortgage-backed security” I understood completely what that meant and how it would be misconstrued by homeowners, lawyers, judges, and regulators. The Wall Street banks gambled that the sheer magnitude of their lie would overcome any objections. They were right.

But they don’t have to be right for future litigation. And that is why I am filing amicus briefs and drafting petitions for rule changes in all 50 states. Eventually, courts are going to have that moment when they realize what is going on. That day will be moved closer by you acting on what I say here on these pages.

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

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

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

FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In the meanwhile you can order any of the following:
*
CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
*
Please visit www.lendinglies.com for more information.

OK Let’s Try It Anyway — Amicus Briefs

We now have an opportunity to attack the most absurd of the decisions on 2 grounds, to wit: The first is that the decisions are wrong based upon existing judicial doctrine, statutory law, and court precedent. The second is that the decisions are wrong because the justification for bending the law is also wrong.

 

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

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

I know what I said and I meant it. But I have come under a lot of pressure particularly from one person in Hawaii whose financial contributions have been a substantial factor in keeping this effort alive. So I am drafting and filing an amicus brief for filing in Hawaii and I will do the same, assuming financial support is forthcoming, in other states. I still think it is a long shot but I am also convinced that the mere filing will bring more attention to the facts.

The Hawaii case has similarities to most other cases brought by people claiming ownership or authority resulting from the securitization of debt. But in one case, the court went far off the reservation to prevent the homeowner from winning the case despite clear law in Hawaii that the statute of limitations on the obligation, even if it existed, had long run out. That is not a contested issue in the case. Hawaii is not Florida and the Bartram case does not apply. The statute has run and that is the end of it.

So the foreclosure mill invented something out of thin air. It offered up the following theory: the statute of limitations for a claim based on adverse possession expires in 20 years — obviously longer than the actual law for collecting on claims for money in Hawaii. When first raised I told my client that she need not worry about it. The theory was patently absurd. No judge could possibly rule that way. I was wrong.

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

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

This is an example of judicial overreach on a grand scale.

First of all, adverse possession is a claim brought by a landowner. It does not expire in 20 years. It starts in 20 years — after a landowner has been occupying land owned by someone else for 20 consecutive years without interruption. A party claiming to be a mortgagee is not a landowner and there is no allegation or any facts in this case that the named “mortgagee” ever occupied or owned any land.

All of this is traceable to one fact — the nearly universal consensus about the status and ownership of the loans is wrong — but is now institutionalized by those who think they understand loans but know absolutely nothing about investment banking — much less understand the intersection of investment banking and lending. This forms the background for ultra vires actions in the courts.

There was no loan. I know, I know. If it looks like a duck etc. That duck is a hologram with no substance in the real world. The reason it looks like a loan is because it was labeled as a loan.

In most cases, it was a securities deal that was concealed from the homeowner or prospective homeowner. In the end, nobody was holding a loan account receivable as an entry on their ledger therefore nobody could claim ownership of any loan account. And that’s why supposed transfers of the loan account had to be fabricated, forged, backdated, and filled with misinformation.

Viewed from that perspective, each homeowner or prospective homeowner should have been paid compensation for their role as an issuer in the securitization scheme. Because this game was concealed we have no way of knowing what the outcome of bargaining would have been had the homeowner known that they were being drafted into a concealed securitization scheme.

But we do know the value that the securitization players used for payment to the homeowner, to wit: The principal amount of the transaction paid to the homeowner. And we now know that “at the end of the day” nobody maintained ownership of any loan, so the transaction could not be considered a loan — i.e., there was no lender at the end of the day.

Viewed from that perspective, foreclosure is an attempt to get back the consideration that they paid to the homeowner for issuing the note and mortgage, without which securitization could not have occurred. Had they been less busy trying to avoid liability for violations of the Truth in Lending Act and other federal and state lending laws, they would’ve maintained the role of creditor and therefore they would have satisfied the factual foundation to allege the existence of a loan. But they didn’t.

From the point of view of legal analysis, the landing statutes never applied because it wasn’t a loan. This was a securitization scheme from start to finish. But it never was a scheme to securitize the debt, note, or mortgage (or payments) of any homeowner. Of all of the different types of securities and contracts that were issued sold and traded, none of them conveyed any interest in the debt, note, mortgage, or payments made by anyone.

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

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

One of the biggest problems is that both homeowners and their attorneys have accepted the labeling promoted by Wall Street. When I first started writing about the scheme in 2006 I raised the alarm that this was nothing like what it seems to be. There were no loans and there were no debts nor any owners of debts. And that is what Wall Street intended.

So there are two labels that must be rejected out of hand at the very beginning. The first is the label of “loan”. The second is the label of “Foreclosure.”

The present situation in Hawaii is mirrored in hundreds of other decisions across the country. The absurdity of some of these decisions is clear to most legal analysts. But the justification for such decisions rests on a dissociative condition: the erroneous belief that lending and securitization intersected. They didn’t. We now have an opportunity to attack the most absurd of the decisions on 2 grounds, to wit: The first is that the decisions are wrong based upon existing judicial doctrine, statutory law, and court precedent. The second is that the decisions are wrong because the justification for bending the law is also wrong.

Join with me as we undertake the effort to alter the trajectory of these decisions which effectively ratify and even Institutionalize illegal and fraudulent behavior

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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The elephant in the living room: Is the “free house” a windfall or simply just compensation for being drafted into a concealed securities scheme?

SHOW ME THE LEDGER! NO, NOT THE ONE FROM THE SELF PROCLAIMED SERVICER. SHOW ME THE ONE FROM THE COMPANY CLAIMING THEY PAID VALUE FOR THE DEBT.

I have been beating around the bush too long. In my opinion, rejection of a claim for foreclosure from securitization players is not the equivalent of any windfall for any homeowner. It is merely an acknowledgment of payment for services rendered by the homeowner. The reverse is true: allowing foreclosure to securitization players results in a windfall payment to those players without any corresponding reduction of any “loan” account receivable.

If you send a QWR or DVL out, you are sending it to someone who has no relation to your loan, thus allowing the other players to claim plausible deniability for all the lies you are about to be told. The response is gibberish and in total is the equivalent of “because we said so.”

I might also add that they never assert that the loan account is owned by anyone despite their protestations to the contrary. They often do not identify the originator (like “America’s Whole Lender”) as a legal person or business entity. If it is not a legal person it cannot be a legal person who is the principal in an agency relationship with MERS. People forget that “nominee” means agent.

In lay language, the question is “who do I ask?” What is the name of the company that claims ownership of my underlying obligation resulting from payment of value?
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My opinion is that they don’t say it because nobody does. And nobody says it because there is no person or business entity that has any confirmable entry on its ledgers showing payment of value in exchange for a conveyance of ownership of the underlying obligation.
****
This is not a technical objection. It is completely and utterly substantive. Without payment for the obligation, nobody can claim a loss. They can’t claim a loss because there is no loss. Without a loss there can be no remedy. 
****
The securitization players offered securities to investors, the proceeds of such sales going to the investment bank who in turn distributed the money to the other players including “borrowers.” Without those securities, there would have been no transaction. But as a result of issuing and selling those securities — and then derivatives of those securities—  the revenue from the sale of securities was in excess of 12  times the amount of the homeowner transaction. {Don’t ask me to justify that — ask ANYONE in the industry if that is not true}
**
Nobody wanted to be a lender who would then be accountable for violations of lending laws.  So they made sure there was no lender. We are all going down the same rabbit hole when we refer to the homeowner transaction as a loan. It was a payment to get the homeowner to execute documents that were labeled as loan documents — a payment that had to be returned, leaving the homeowner with no compensation for his/her role in generating so much revenue.
**
In fact when you factor in payments labeled as “interest” the homeowner receives negative compensation. Viewed from that perspective the homeowner is paying for his own execution.
****

Everyone is shying away from the elephant in the living room. What is so bad about the homeowner getting a “free house” in the context of a larger scheme that produced so much revenue to everyone except the homeowner?

****
If it was a loan, then there would be a lender with a risk of loss and who was accountable for compliance with lending laws — particularly those requiring disclosure of compensation and revenue arising from the execution of the documents.
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If it was a loan, then there would be a lender who was a stakeholder — i.e., someone who retained risk of loss and intent for the transaction to be performed and successful.
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Instead, homeowners got no lender and not even a clue as to who they did business with nor the true extent of revenue and profits generated from what was in reality, simply a securities scheme with no substantive characteristics of a loan.
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Instead, the homeowner was left with a nonlender who had no role in underwriting the viability of the loan contrary to the express requirements of TILA. In fact, and again contrary to the express requirements of TILA, the homeowner was left with nobody who had any stake in the viability or performance of any loan.
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To add insult to injury, the securitization players had substantial financial incentives to steer borrowers into nonviable loans against which the players bet would fail — this producing even more profits.
**
So tell me again why this is a loan. And tell me why the compensation that the securitization players chose to give to the homeowner should not be retained by the homeowner. And while you are doing that, tell me why the consideration for drafting the homeowner into a concealed securitization scheme should not be expanded.
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But don’t tell me you can foreclose and evict a homeowner just to get back the only consideration he/she ever received from you. That’s not capitalism. It is a fraud.
PRACTICE HINT: At the very start be confrontative. When opposing counsel says “Your Honor, this is a standard foreclosure,” you should interrupt and object saying that the face of the complaint or notice shows that this is not a standard foreclosure and it may not be a foreclosure at all if they can’t produce a creditor. Drill in the defense narrative wherever you can create the opportunity. 
Remember that you are not just looking for securitization language. You are also looking for securitization players. If the foreclosure is on behalf of Citi, PennyMac or BofA, those are securitization players. Just because they don’t refer to securitization does not mean that they are holding a ledger showing their payment for the debt and maintenance of a current asset account against which they are claiming a loss. If you don’t understand what that means, go talk to a CPA.
*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
*
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Document Review for Dummies: Why homeowners and their lawyers get confused by documents proffered by foreclosure mills

It occurs to me that most questions I receive contain either an inquiry about the meaning of documents or statements as if they know the meaning of documents. So here is a short primer on reviewing documents that might help.

WHAT (IF ANYTHING) IS THE TITLE OF THE DOCUMENT?

While this seems to be simply a matter of reading and common sense, there is more to it than that. If I draw a rough picture of a dollar bill and hand it to you, nobody will accept it as payment for anything even if the writing on it says “United States Currency” or “One Dollar.”

The reason for that is simply one short statement: No document is an event. And no label can change that. In the case of my artistic dollar, the event would have been a law that says anyone can draw a dollar bill and that everyone must accept it for all debts, public and private. No such preceding event has ever happened nor is it ever going to happen. People don’t issue currency.  Governments do that.

Labeling it as “one dollar” has no more meaning than angel wings in the snow. But while it is a lot less fun than angel wings, a really good fabricated picture of a dollar is likely to be accepted as if it was a real dollar bill. But passing the fake dollar is an illegal act subject to criminal and civil liability.

APPLICATION: Just because a document bears the label “deed,” “assignment” or “allonge” doesn’t make it so. But most homeowners, lawyers, judges and even regulators fail to recognize this basic common sense precept that has been enshrined in law since the law was first written. This error has even become doctrine, supported by legal presumptions if the face of the document confirms to what would ordinarily expect on the face of such a document.

EXAMPLE: An “assignment” is not an assignment of the mortgage unless (a) the grantor owns it and (b) the assignment also conveys ownership of the underlying debt (or the underlying debt was conveyed in a separate instrument by a grantor who owned the underlying debt). [NOTE: Even then the assignment might not be legally effective such as in the case where someone with toxic waste liability conveys the property to a dummy corporation to avoid being hit with damages, fines and penalties. The grantee must expressly or tacitly accept the assignment.] Ref: Article 9 §203 UCC.

WHY WAS THE DOCUMENT CREATED?

The answer to this question there’s actually another question, to wit: what was the event in real life that the document was intended to memorialize?

This reminds me of what my contract professor in law school pounded into our heads on a daily basis, to wit: The note is not the debt — although it may be evidence of a debt.

The debt exists only in the event of a real-world transaction that is enforceable by law. In the case of loans, that is created upon delivery to the closing table. The debtor is the one who accepted that money with eh understanding he/she had to pay it back and the creditor is the one who gave him/her the money. The debt exists regardless f whether there was my written document. It exists independently of any written document.

If the Payee named on the promissory note is the one who paid money to the debtor/maker), the note is admissible evidence in court to prove the terms of repayment and the existence of the debt. In fact, the law has developed that such a note merges with the debt such that the maker and debtor are the same and the Payee and creditor are the same.

BUT if the Payee named on the promissory note is NOT the one who paid money to the debtor/maker), the note is NOT admissible evidence in court to prove the terms of repayment or the existence of the debt. HOWEVER, under modern law, the execution of the promissory note gives rise to its own independent liability of the maker regardless of whether there was any debtor-creditor relationship between maker and payee. Ref: Article 3 UCC.

Such liability can be enforced over the objection of the maker (that here was no real-world transaction giving rise to the obligation) if the party enforcing the note was a bona fide purchaser for value, acting in good faith and without knowledge of the borrower’s defenses at the time the note was purchased.

APPLICATION: Generally speaking, if there is no real-world event memorialized by the document proffered by a party in litigation, the document is inadmissible as proof of the matter asserted — i.e., that the homeowner owes a debt to the party seeking to enforce it. If there is some real-world event (i.e., the homeowner received the money), then the question becomes whether there existed a legal binding relationship between the Payee on the note and the party who paid the money.

BUT, if the party who paid the money did so with no intent to acquire it or retain ownership of the debt, directly or indirectly, then the payment to the homeowner must be categorized as something other than a loan.

There might still be a liability of the homeowner, but only after the court is able to look at the transaction as a whole, and determine the reason for payment and whether that reason was satisfied by the homeowner’s conduct — which in the case of mortgage loans means the execution of documents that might not have any real value except to start the process of the sale of securities having no relation to the ownership of the debt, note or mortgage.

Such a review would also take into account whether the real terms of the contract were disclosed and whether the homeowner had an opportunity to decline participation or bargain for other terms.

EXAMPLE: As explained above an assignment of mortgage is a legal nullity in all States unless the grantee has also paid value in exchange for a conveyance of ownership of the underlying debt —from someone who owns it. Article 9 §203 UCC, adopted in all 50 states, takes it one step further requiring such purchase before anyone could even e considered as a bona fide claimant to enforce a security instrument (mortgage or deed of trust).

So the question is ALWAYS whether such payment of value for the underlying debt ever occurred as an event in the real world.

BUT, an assignment of mortgage that APPEARS to be facially valid is often taken at face value by the homeowner, the lawyers, the course, and the regulators even though the document is not facially valid. Sometimes this is the result of ignorance or laziness. And that brings us to the next point.

WHO SIGNED THE DOCUMENT? WHERE IS WALDO?

This can be really tricky and unless you are prepared to really look at the signature block like you might look at a painting where various figures and shapes appear, you will probably tacitly admit the entire case against you. You have to look long and hard. Think “Where’s Waldo?”

Take absolutely nothing for granted.

So in court, the correct answer is “I don’t know.” After 10-20 years the homeowner has no idea what he/she signed. He/she doesn’t know if the document presented is real or fabricated. He/she, therefore, doesn’t know if that signature on that document is real or fake. SO why admit it? Tell the truth. You don’t know. Make them prove that the document is authentic, valid, and was properly signed by the homeowner(s) at the time fo the original transaction (note that I don’t call it “loan closing” anymore because I don’t think the transaction is legally or logically a loan).

Next on that assignment of mortgage or beneficial rights under a deed of trust: can you tell me in easy English who signed that document and on whose behalf the document was supposedly executed? On close examination in most cases, you cannot. If that cannot be determined from the face of the document then the document is not facially valid. If the document is not facially valid no legal presumptions can arise about its authenticity or validity.

APPLICATION: In most cases, the validity of an assignment cannot be determined without reference to “parol” (external) evidence. Such instruments are facially invalid unless there is something in the public official record that clears up the mystery. Only official public records carry the legal presumption of authenticity and validity as proof of the matter asserted.

NOTE THAT EVEN DOCUMENTS THAT APPEAR TO PASS THE FACIAL VALIDITY SMELL TEST MIGHT STILL BE EXCLUDED AS PROOF OF THE MATTER ASSERTED IF TIMELY OBJECTION IN PROPER FORM IS RAISED AS TO THE CREDIBILITY OF THE SOURCE: Self-proclaimed servicers are preferred by foreclosure mills as thought hey are third parties with no stake in the outcome of the litigation. Good discovery and motion practice could reveal that the reverse is true — the claimed servicer is really a foreclosure vehicle acting for concealed third parties and who goes out of business if the foreclosures are unsuccessful.

EXAMPLE: “John Smith, Official Document Examiner, SOLVANG SERVICING, LLC, as attorney in fact for CSLOBS, INC., successor to Jasmine Bank, as attorney in fact, for AMERICAN BANK AND TRUST, AS SUCCESSOR FOR MAKE A WISH MUTUAL BANKING, ON BEHALF OF THE REGISTERED HOLDERS OF CSLOBS, INC. PASS-THROUGH CERTIFICATES Series 2006-ZX1.”

There are lots of it assumptions that you could make about such a signature block at the end of the document. None of them would be true. And none of them would make any sense. But it is custom and practice to ignore such signature block as though an authorized signature had occurred on behalf of a grantor who possessed something to grant.

QUESTIONS:

      1. Does John Smith exist? [If you were creating a false document who would want to sign it with their real name?]
      2. Was John Smith an authorized signatory for Solvang?
      3. Was John Smith an employee who knew something about the content of what he was signing or did he just sign it because his job consisted of stamping it writing his signature on thousands of documents per day?
      4. Was John Smith employed by some other company that doesn’t appear on this signature block?
      5. Who owns Solvang? {If the answer is some investment bank then documents executed or created by them suffer from a lack of credibility that could bar their admission into evidence.]
      6. Is the power of attorney attached to the document?
      7. Is there any descriptive language that would enable the reader to ascertain the existence, provisions, and validity of any power of attorney at the time of signing? If not my opinion is that the document is facially invalid. External proof is required to determine whether such power exists and was granted by someone who (a) intended to grant it and (b) had ownership or control over the subject matter (i.e., the mortgage or deed of trust).
      8. Where does Make  A Wish Mutual Bank fit into the chain?
      9. Who is CSLOBS, Inc.?
      10.  Where and what is the registry of holders of certificates? See power of attorney analysis)
      11. Who are the holders of the certificates? [Since they are defined as the parties on whose behalf the document as executed, the absence of an actual name by which they could be identified renders the document facially invalid.]
      12. Are the holders of the certificates the owners of pro-rata shares of debts, notes or mortgages? How do we know that? If not, why are they mentioned?
      13. What exactly passes through where and who is involved in that?
      14. IS THERE A HIDDEN TRUST NAME INVOLVED IN THIS CHAIN? IF SO WHAT I OWNED BY THE TRUSTEE OR THE TRUST? WHO IS THE TRUSTEE? WHAT ARE THE TRUSTEE POWERS? WHO ARE THE BENEFICIARIES? WHO WERE THE TRUSTORS OR SETTLORS?
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
NOTE: I HAVE PREPARED A 2 HOUR PRESENTATION ON DOCUMENT ANALYSIS FOR A ZOOM PRESENTATION. I HAVE NOT YET SELECTED A DATE. THE PRICE IS $595 AND INCLUDES A FOLLOW UP ONE HOUR Q&A MEETING ONE WEEK AFTER THE PRESENTATION FOR THOSE WHO PARTICIPATE LIVE. NO DISCOUNTS ARE AVAILABLE. IT WILL PROBABLY BE THE FIRST WEEK OF DECEMBER. IF YOU ARE INTERESTED IN PARTICIPATING PLEASE WRITE TO ME AT NEILFGARFIELD@ICLOUD.COM. CLE ACCREDITATION FOR LAWYERS IS EXPECTED. 
*

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

 

 

 

Foreclosures in Securitization World: deny everything they have to say and then pursue discovery — but in discovery you focus on the issues that are central to every foreclosure — status and ownership of the debt. 

The danger is in the labels.

I have some devoted followers and readers who have been great contributors — doing research on the real action and dynamics between the homeowner on the one hand and all the intermediaries and people of interest on the other hand. One of the things recently raised was the discovery of who is listed as having paid tax or insurance or other expenses. The danger is in the labels.

The simple basic truth is that the banks are using a shell game that is based entirely on the false use of labels. So when we see something in writing we tend to assume it is probably true. Without that the entire securitizations scheme would have fallen apart before it began.

If you write a check to me for plumbing repairs, that label on the check “Plumbing repairs” does not mean in actuality that you expect me to do plumbing work nor that I will deliver such work. After all I’m a lawyer, not plumber. But if we both agreed to have the check made out in that manner it would be because we were concealing the true nature of the transaction. That still doesn’t mean that any plumbing work is ever getting done.

And, believe it or not, that is not illegal. In fact, just writing the check with that label on it raises an inference or legal presumption that this was payment for plumbing work. So when you walk into court the judge is already assuming that this is a dispute over plumbing work when in fact the agreement between us was for legal work. If some third party comes into the picture and either sues or defends a claim from either of us, they must respectfully challenge the label — “plumbing repairs” even though we all know that no plumbing work was done or intended.

You need to understand that there is a difference between the label on an account and ownership of it. And there is even a difference between ownership and the authority to make deposits and withdrawals.

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It is entirely possible to direct payments to “Ocwen” for example. The payments are forwarded to an intermediary who in turn forwards the payment (if electronic) or forwards the check to the Black Knight/CoreLogic system we have been talking about. With Check 21 and other practices this is all done in seconds.
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So your check to Ocwen gets deposited into an account labelled “ocwen” which is owned by Black Knight who has a contract with the investment bank in which it gives the investment bank or its agent full authority to make deposits and withdraw money.

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Once again the misdirection comes from knee jerk reaction to seeing a label. We are culturally conditioned to assume the label means something when it doesn’t. In the above example, if the transaction was real, the check would be made out and deposited into the account of Morgan Securities, for example. The homeowner/”borrower” of course has no clue about any of this and simply assumes he is paying his mortgage payment on an existing loan account owned by some “investor”. All of that could alternatively be labeled as “Plumbing Repairs.”
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But Morgan doesn’t want to receive the money directly because there is no business or legal reason it should be received by Morgan. Morgan holds no receivable from the homeowner/”borrower.” It is simply not entitled to receive that money even though it is happening every hour.
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All such payments are pure revenue that is untaxed because for tax purposes it is labelled as either return of loan or return of capital or it is labeled as off balance sheet and doesn’t show up at all. The real money transfers are recorded in a jurisdiction that asserts taxing authority and then waives all tax. Bermuda was popular when I last looked at this.
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For foreclosure defense you don’t need to prove any of that. You just need to know and believe it. Because then you can ask questions in discovery that you know they can never answer without admitting to tax fraud, theft, and other crimes.
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It is their LACK of answers that is the useful tool in this litigation and the law is very clear — if you persist in demanding discovery, motions to compel, motions for sanctions and motions and in limine you will most likely win the case hands down without any right of the foreclosure mill to refile.
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The banks want you to focus on how wrong the banks were in their behavior so you will make allegations that you will never be able to prove. The real defense is like Karate Kid (“no be there”). Just deny everything they have to say and then pursue discovery — but in discovery you focus on the issues that are central to every foreclosure — status and ownership of the debt.
*
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.
*

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

More Details on VendorScape, CoreLogic and Black Knight

Hat tip to “Summer chione”

So it is apparent that the banks are responding to discoveries about how orders are transmitted to lawyers, “servicers”, realtors etc.. While it is all the same playbook, they merely change the name of the characters. So internally the name VendorScape might still be used but externally, to the public, they are showing different names and even showing multiple names for the same “service”.

But is always the same, to wit: a central repository of data that has been robotically entered to support misrepresentations of investment banks that massage the data, control the reports, and initiate administration, collection and enforcement under the letterhead of “subservicers” who have almost nothing to do and are merely being kept alive to throw under the bus when this scheme explodes.

For those familiar with the game of Chess, think of the following entities as all being pawns whose existence is to provide a barrier to the encroachment of government or borrowers in litigation — and who can and will be sacrificed when the game explodes.

  1. Foreclosure law firms (“mills”)
  2. “Servicers”
  3. Trustee of REMIC Trust
  4. Trustee on Deed of trust
  5. MERS
  6. Companies that provide “default services”
  7. Realtors
  8. Property  Managers
  9. REMIC  trusts: remember that back in early 2000’s, the same trusts that are being named as claimants today were denied as having any existence or relevance. It was only after failure of naming a servicer or MERS that they fell back on naming the non functional trustee of a nonexistent trust as the claimant.
  10. Every other company that is visible to the investors and homeowners.

And keep in mind that the claims of a “boarding Process” or detailed audit of accounts when the name of one subservicer is changed to something else are totally and completely bogus. There is no transfer much less boarding of accounts. the fabricated accounts are always maintained at the central repository.

The argument over “business records” is sleight of hand distraction. There are no business records. Go do your research. You will see that nothing the banks are producing are qualified business records, muchless exceptions to the hearsay rule. 

It is or at least was universal custom and practice that before accepting  an engagement, lawyers, servicers and realtors needed to have an agreement in writing with their employer. In the wholly unique area of foreclosures, sales, REO and remittances this practice has been turned on its head.

As I have repeatedly said on these pages, lawyers in a foreclosure mill have no idea who hired them. They don’t know the identity of their client. They will and do say that their client is some “subservicer” (e.g. Ocwen), they file lawsuits and documents proclaiming their representation of some bank (e.g. Deutsche) with whom they have (a) no contact and (b) no retainer Agreement.

This is because all that Deutsche agreed to was the use of its name to give the foreclosure an institutional flavor. It is labelled as a trustee but it possesses zero powers of any party that could be legally described as a trustee. It has no fiduciary duty to any beneficiaries nor any right to even inquire about the business affairs of the trust — which we know now (with certainty) do not even exist.

So there is no reason for the foreclosure mill to have an agreement with Deutsche because (a) Deutsche has not agreed to be a real party in interest and (b) Deutsche has no ownership, right, title or interest in any loan — either on tis own behalf or as representative of either a nonexistent or inchoate (sleeping) trust with no assets or business or the owners of non certificated certificates (i.e., digital only). Indeed the relationship between Deutsche and the holders of certificates is that of creditor (the investors) and debtor (Deutsche acting as the business name only of an investment bank who issued the certificates).

So the lawyers in the foreclosure mill are misrepresenting its authority to represent. In fact it has no authority to represent the “trustee” bank.

So the banks have come up with a circular argument that is still erroneously used and believed in court: that because the subservicer (e.g. Ocwen) is the nominal client — albeit without any contact prior to the electronic instructions received by the foreclosure mill — and because the subservicer claims to be acting for either the trustee, teht rust or the holders of certificates, that eh lawyers can claim to be representing the bank, as trustee. In a word, that is not true.

So the foreclosure mill is falsely claiming that its client is the named “trustee” who has no power for a “trust” which has no assets or business on behalf of certificate holders who own no right, title or interest to any payments, debt, note or mortgage executed by any “borrower.”

Instructions from a third party with no right, title or interest that the lawyer should claim  representation rights for yet another party who has no knowledge, right, title or interest is a legal nullity. That means that, in the legal world, (like transfer of mortgage  rights without transfer for the underlying debt), there is nothing that any court is legally able to recognize and any attempt to do so would be ultra vires once the facts are known to the court.

The trick is to present it to the court in such a manner that it is unavoidable. And the best way to do that is through aggressive discovery strategies. the second best way is through the use of well planned timely objections at trial.

All of this is done, contrary to law and prior custom and practice to cover up the fact that all such foreclosures are for profit ventures.

That is, the goal is not paydown of any loan account, because no such account exists on the books of any creditor.

And that is hiding the fact that the origination or acquisition of the loan was completed with zero intent for anyone to become a lender or creditor and therefore subject to rules, regulations and laws governing lending and servicing practices.

They didn’t need to be a lender or creditor because they were being paid in full from the sales of securities and thus writing off the homeowner transaction. Bottom Line: There was no lending intent by the originator or acquirer of the loan. When the cycle was complete, the investment bank owned nothing but still controlled everything.

And the way they controlled everything was by hiring intermediaries who would have plausible deniability because they were using images and records that were automatically generated and produced based upon algorithms written by human hands — programs designed to facilitate foreclosure rather than report the truth.

So let’s be clear. Here is the process. The lawyer, realtor or subservicer knows nothing about the loan until it is time to foreclose. All activity that is conducted under its name is initiated by CoreLogic using the VendorScape system.

So when a lawyer, for example, comes to work, he sits down in front of a computer and gets a message that he doesn’t know came from CoreLogic under the direction of Black KNight who is acting under the strict control of the investment banks. There are no paper documents. The message on the screen says initiate foreclosure work on John Jones in the name of Deutsche Bank as trustee for the CWABS Trust 2006-1 on behalf of the certificateholders of CWABS Trust 2006-1 series pass through certificates.

Contrary to the rules of law and ethical and disciplinary rules governing lawyers, the lawyer does no due diligence to discover the nature his agreement with the naemd claimant, no research on whether the claim is valid, and requires no confirmation ledgers showing establishment of ownership of the debt and financial loss arising from cessation of payments. He/she sends notice of delinquency, notice of default and initiates foreclosure without ever seeing or even hearing about a retainer agreement with Deutsche whom he supposedly represents.

He/she has no knowledge regarding the status or ownership of the loan account. ZERO. By not knowing he/she avoids liability for lying to the court. And not knowing also provides at least a weak foundation for invoking litigation privilege for false representations in court, behind which the investment banks, Black Knight, CoreLogic et al hide. The same plausible deniability doctrine is relied upon by CoreLogic and Black Knight. They will all say that they thought the loan account was real.

But they all knew that if the loan accounts were real, the notes would not have been destroyed, the control over the loan accounts would have stayed close to the investment banks and compliance with lending and servicing laws would have been much tighter — starting with disclosure to investors that their money was being used to justify a nonexistent trading profit for the investment bank, and disclosure to homeowners that they were signing on for an inflated appraisal, immediate loss of equity, and likely foreclosure because after the origination, the only real money to be made off the loan was through foreclosure.

And both investors and borrowers were prevented, through the artful practice of deceit and concealment, from bargaining for appropriate incentives and compensation for assuming gargantuan risks they know nothing about.

This is like cancer and it is continuing. Nobody would suggest that we keep selling crops that were infected with ebola or which contained some tar substance that reliably and consistently produced cancer. The argument that a company or industry might collapse would not fly because in the end we value human life more than allowing companies to profit off of death and destruction. And the argument that allowing the judicial creation of virtual creditors who can enforce non existent debt accounts is going to save the financial system is just as pernicious — and erroneous.

Wall Street banks are merely protecting their profits. Don’t blame them for doing that. It is up to government and the public to stop it and arrive at something other than the false binary choice of either forcing people out of their homes or allowing a “windfall” to homeowners against the interest of all other honest people who make their mortgage payments. The real solution lies in reformation by judicial doctrine or through new legislation — but until that is completed, there should be no foreclosures allowed. Until it is determined how much concealed risk was piled on investors and borrowers, they should not be stuck with contracts or agreements that sealed their doom through concealment of material facts.

*
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.
*

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

You might not know VendorScape but it sure knows you

In a somewhat startling admission by CoreLogic, we now have an admission of many facts that might not have otherwise surfaced but for intensive and aggressive, persistent Discovery. I am not publishing the entire letter from them for privacy reasons. But it is worth mentioning that the letter was sent, after careful legal analysis, as a response to a complaint to the Federal Consumer Financial Protection Board — organized by Elizabeth Warren under the Obama administration. The response was (a) mandatory and (b) subject to charges of lying to a Federal agency.

The problem faced by CoreLogic was that on the one hand it IS and was the central repository of all data and electronic records for most residential loans in the United States. The main IT platform running several systems is called VendorScape which is owned, maintained and operated by CoreLogic pursuant to instructions from Black Knight (and perhaps others) who are serving the interests of investment banks who have no legally recognized interest in any of the alleged “loan accounts”.

But they don’t want the government or the public to know any of that because they are designating nominees to serve or pose as “servicers” who can be thrown under the bus at any that that foul play is actually addressed instead of settled (see 50 state settlement).

So here is what they said

Interesting.

image.png
And here is how it breaks down (legal analysis):
  1. VendorScape exists although they deny it is currently accessed through CoreLogic
  2. VendorScape is an “electronic case management system.” Taken in context with customs and practices in the industry in addition to simple logic, it is THE case management system and it is electronic which means that anyone with login credentials can get into it.
  3. VendorScape output consists of the following:
    1. centralized electronic workplace
    2. storage of “documents” — i.e., images not the original documents because they are not a records custodian for anyone. As the centralized place for “storage” it is VendorScape that is the source server from which all records are produced in printed reports that are merely generated from what is in VendorScape regardless of who added or deleted or changed anything.
    3. initiate workflows “defined by our clients”. This is odd wording.
      1. They appear to be saying that clients access the system and are simply using it as an IT platform to conduct business of the client.
      2. But VendorScape initiates workflows, which means that they have admitted that whoever is actually running VendorScape is making the decisions on when and how to initiate any action.
      3. Since the entire purpose of this system is preparation for foreclosure, the only logical conclusion is that it is a system to initiate foreclosures, notices of default, notice of delinquency etc. based upon human decision-making or automated decision making initiated by humans that control VendorScape.
      4. They will of course say otherwise and that seems to be what they are trying to say — that the client determines the definitions and circumstances of workflows.
      5. But dig a little deeper and you will find that the “client” has no right to make such decisions and that the decision is labelled as the decision of a client (e.g. Ocwen) by permission from Ocwen, who is not actually allowed to make such decisions and does not make such decisions. 
      6. So the reference to the  Client making such decisions is circular allowing anyone to say that it was CoreLogic or  VendorScape who made the decision (thus avoiding liability for Ocwen et al) OR to say that it was Ocwen, as they do in this letter.
  4. They admit that CoreLogic is the party who owns and maintains the storage and functions of the VendorScape system while at the same time implying that they have no connection with VendorScape.
  5. They assert that the data is owned by the clients. This is a common trick.
    1. The data is not owned by the clients because it doesn’t consist of any entries or proprietary information placed in the system by the client.
    2. The information or data is placed there mostly through automated systems controlled by Black Knight but operated by CoreLogic.
    3. Nominal “Servicers” (Ocwen e.g.), who are the “clients” actually have no way of knowing anything about a homeowner account until after it is placed in the system by third parties.
    4. This is why servicer records should not be admitted into evidence as exceptions (business records) to the hearsay rule.
    5. The deadly mistake by many lawyers in court is the failure to timely object to lack of foundation, best evidence and hearsay.
      1. A timely objection is one that is raised at the same time the admission of evidence is being considered by the court.
      2. Waiting until the end of questioning is spitting in the wind. It is already in evidence by that point.
      3. And the second mistake is that after the objection is sustained, the failure to move the court to strike the offending testimony and exhibits. That failure is equivalent to a waiver of the objection, thus leaving the offending testimony or exhibits in evidence.
*
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.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
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Watch that modification agreement. You are being forced to accept a virtual creditor instead of a real one.

“Morality is an existential threat to commerce and politics. Although we legislate morality we refuse to enforce it. It is OK to lie to consumers or borrowers but not OK to lie to a financial institution who by the way is lying to you.” Neil F Garfield, October 2009 speech to regional bankruptcy conference in Phoenix Arizona.

The proposed modification agreement is an attempt to force or coerce the borrower into accepting a NEW term of the loan agreement that any attorney would advise against, to wit: acceptance of a designated creditor instead of a real one.  

The transmission of a proposed Modification Agreement by a “servicer” like Ocwen, PHH, SPS. SLS, Bayview etc. would be mail fraud if it was sent via USPS. It seeks to extort a signature from the borrower that directly acknowledges and accepts the existence of a virtual creditor.

The obligation was funded by a third party (investment bank) who did not take ownership of the debt, note or mortgage.

The reason the investment banks didn’t want ownership is that they were in the business of lending money without being subject (at least on the surface) to long standing federal and state statutes and common law restricting the behavior of lenders and requiring full and fair disclosure of the terms of the transaction. 

I recently received another modification agreement to review. The true nature of the agreement only appears when you read it carefully. If you do that, it is obvious.

In any normal circumstance where the lender existed and owned the underlying obligation because it had paid value for the note and mortgage, the lender, or its successor would be identified as such. And the Lender or Successor would insist on being named for its own protection, lest some third party claiming to be servicer runs off with the money.

This is not only custom and practice in the commercial banking and investment banking industry, it is also the only way, without committing legal malpractice, to draft such an agreement to protect the creditor from any intervention or claims.

But if you look carefully you will not see any reference like this: “Whereas, ABC was the owner of the loan account, note and mortgage and was succeeded by XYZ who purchased and paid value for said debt, note and mortgage on the __ day of ___, 2020,

Here is my recent analysis:

The modification agreement is very helpful because it corroborates what I have been saying.
*
The agreement first states that the parties to the agreement are the debtor, xxxxx yyyyy, and then two other parties, to wit: New Residential Investment Corp., [NewRes] who is not identified as to its role or relationship to the yyyyyyy loan, and Ocwen Loan Servicing LLC, [Ocwen] who is identified as the servicer or or agent for NewRes.
*
NewRes asserts in the public domain that it is an REIT. But records show that it grew out of a loan servicing business, which I believe to still be the case. In any event there is no representation or warranty in the modification agreement that states or even implies that NewRes is a creditor or lender. That status is raised by implication for the benefit of Ocwen. And who Ocwen is really working for is left out of the agreement altogether.
*
The statement that Ocwen is servicer for NewRes does not make Ocwen a servicer for the loan account. Unless NewRes is or was the owner of the account who paid value for the underlying debt, Ocwen’s agency might exist but it had nothing to do with the subject loan. This is why homeowners need lawyers arguing these points which, for most people, dulls the brain. “Because I said so” may work in the house with children but it was never intended to be accepted in courts of law.
*
So far the banks have fooled courts, lawyers and homeowners into thinking that this type of legal gibberish can be used with impunity and  that this gives the lawyers free license to characterize it in any way that is convenient for the success of a false, illegal and fraudulent foreclosure case. And they can do so because the lawyers are protected by the overly broad doctrine of  litigation immunity.
*
Authority is not magic. It can only occur if the loan account is owned by a creditor who paid value and authorized Ocwen to act as loan servicer or agent in their stead. Such a creditor would have the legal right to grant servicing rights to Ocwen in a servicing agreement (not a Power of Attorney).
*
When challenged, Ocwen is obliged under law to answer simple questions: (1) from whom did you receive authority to administer, collect or enforce the debt, note or mortgage? Is the grantor of such authority a person or entity that has paid value for the underlying obligation? If not, is the grantor representing a person or entity that has paid value for the underlying obligation?
*
Absent from the agreement is any reference or assertion or even implied assertion that NewRes paid value for the debt, or even the assertion that NewRes is the owner of the debt, note or mortgage.
*
This absence, in my opinion, is evidence of absence, to wit: that NewRes is not the owner of the debt, note and mortgage and does not maintain any entry in its bookkeeping records reflecting a purchase of the subject loan or any loan — at least not from anyone who owned it.
*

No such transaction could have occurred because the obligation was funded by a third party (investment bank) who did not take ownership of the debt, note or mortgage. In other words, there was nobody to pay and so payment was not made.

*
Instead the agreement says that Ocwen will be called the “Lender/Servicer or agent for Lender/Servicer (Lender).”
*
This statement corroborates my conclusion and factual findings that there is no loan account in existence, and therefore no creditor who possesses a legal claim for equitable or legal remedies to pay for losses attributed to the loan account as a result of the action or inaction of a homeowner.
*

If there was a party who had the yyyyy loan on its bookkeeping or accounting ledgers as an asset receivable it would be there because that entity had paid value for the debt — the key element and condition precedent to both ownership of the debt and the authority to enforce the note or mortgage.

Without authority from the owner of the underlying debt there is no legal foundation supporting the allegation that the claimant is a holder with rights to enforce. The allegation may be enough for pleadings but it is not enough for trial. Further the court has no authority to apply any legal presumptions arising out of the possession of the note unless the creditor is identified.

*
The agreement is clearly an attempt to insert Ocwen as the lender for purposes of the agreement. But Ocwen is not the lender nor a creditor nor even an authorized servicer on behalf of any party who has paid value for the underlying debt. NewRes appears to be yet another nominee in a long list of nominees and designees to shelter the investment banks from liability, even while they pursue profit by weaponizing administration, collection and enforcement of loans. 
*

The modification agreement is an attempt to force or coerce the borrower into accepting a term of the loan agreement that any attorney would advise against, to wit: acceptance of a designated creditor instead of a real one.  

*
This is further evidence of deceptive servicing and lending practices. They are evading the responsibility imposed by law to identify the creditor and the authority to represent the creditor. They are evading the responsibility imposed by law to provide an accurate accounting for the establishment and current status of the alleged obligation.
*
The reason for this behavior is that there is no current obligation claimed by any company to be owed to them as a result of ownership of the loan account arising from a transaction in which value was paid for the underlying debt.
*
Accordingly there can be no authority to act as servicer, agent, or “acting lender”, nominee or designee.
*
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.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
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Processing Fees are more than illegal — by adding them to balance due, the default letter is defective.

This is simple logic. If illegal processing fees were greedily added to the “loan accounts” falsely asserted to exist, then the amount demanded from “borrowers” was incorrect. That would make the statements sent to borrowers part of a fraudulent scheme through US Mails which would be mail fraud. And it would make the notices of delinquency and notice of default and notices of default defective and perhaps fatally defective because they were seeking to enforce an amount not due. And it would make foreclosure judgments and sales based upon such demands potentially voidable.

see https://spotonflorida.com/southeast-florida/1835819/ocwen-phh-corp-pay-125-million-settlement.html

CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation.

You know Ocwen. It’s that company that stays in business by the largess of large financial institutions that buy its stock on the open market. Investment bankers use the Company to shield themselves and their own company from potentially trillions of dollars in liability — and possibly prison. It is the company that pretends to be the “servicer” of your loan — which you readily accept because (a) someone needs to do it and (b) nobody else is saying they are “servicing” your loan.

But in reality it is not your servicer because of some technical problems – like the absence of a loan account and the absence of anyone who claims to own your loan account. Only such a company that owned your debt could give authority to a third party to administer, collect or enforce your debt or loan account. Ocwen never received that authority from anyone because in most cases (nearly all) no such creditor exists. (see previous blog articles as to how this highly counterintuitive result is created and exploited by investment banks).

And there is another sticky problem because Ocwen doesn’t actually “service” your loan payments — Black Knight does that, hidden behind the curtains that Goldman Sachs calls “layering” or laddering.” So in the musical chairs presentation of servicers, for enforcement, and Ocwen is designated by Black Knight to come forward as “servicer”, it does so as a witness once removed from the actual entity that collected payments on behalf of a loan account that doesn’t exist.

In plain language the entire process of “boarding” is a charade. The prior company that was designated as “servicer” is simply dropped from the letterhead of notices and statements generated by Black Knight, and Ocwen’s name is inserted instead. “Boarding” comprises a new login name and password to the Black Knight systems.

Ocwen/PHH (after merger) have never made a profit and never will. It is a publicly traded business entity that is waiting to be thrown under the bus. When the s–t hits the fan, and it becomes widely known and accepted that there are no loan accounts and there is nothing to administer, collect or enforce, the plan is to have Ocwen, and companies like Ocwen to take the heat, leaving the investment banks free from blame or liability for civil or criminal infractions. At least that is the plan. But if the government ever breaks free of the control by Wall Street — and clawback of money siphoned from our economy becomes a priority —then it won’t be difficult to pierce through the corporate veils of Ocwen like companies to seize assets held here and abroad.

So it should come as no surprise that such people would add on such things as “processing” or “convenience” fees when there is no processing and there is no convenience. Ocwen has now agreed to pay money because it received a slap on the wrist. But like the hundreds of preceding settlements, nobody is asking about the effect of the illegal practices on the presumed loan accounts, even if they existed.

This is simple logic. If illegal processing fees were greedily added to the “loan accounts” falsely asserted to exist, then the amount demanded from “borrowers” was incorrect. That would make the statements sent to borrowers part of a fraudulent scheme through US Mails which would be mail fraud. And it would make the notices of delinquency and notice of default and notices of default defective and perhaps fatally defective because they were seeking to enforce an amount not due. And it would make foreclosure judgments and sales based upon such demands potentially voidable.

But nobody talks about that because it is the unstated sub silentio policy to uphold the securitization infrastructure that does not exist, to wit: no loan was sold and no loan was securitized. That is impossible because for securitization to be real the loan must be sold to investors. There was never any such sale.

*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.*

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

  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more. 
  • Yes you DO need a lawyer. 

*Please visit www.lendinglies.com for more information.

Beware of Financial Rescue Scams Including Modifications

The offer of modification is actually inviting you to formally join the securitization process without getting paid for it.

I write often about the illegality of the Wall Street schemes that have defrauded investors and homeowners out of their money and investments. But there is also another aspect to this.

The coming Tidal Wave of evictions and foreclosures is going to produce a tidal wave of scams that deprive homeowners and tenants of what little income or assets they have left.

Some of the scams are very close to legitimate business propositions. There is nothing wrong with a risk sharing agreement in which an investor gives consideration to the homeowner in exchange for petitioner patient in the title will proceeds arising from the sale or refinancing from the house. And the consideration could be funding the defense of the property – or even making an offer to pay off the balance as demanded, provided the claimant show proof of payment which in turn would show proof of ownership of the underlying debt.

There are plenty of legitimate business propositions that could be profitable and successful for both the homeowner and the investor/rescuer. In some of them, homeowners might be required to pay rent to the investor. There is nothing illegal about that.

But mostly, homeowners are going to be approached by disreputable people who are simply out to make a buck and neither intend any beneficial outcome for the homeowner nor do they have any credentials, training or education which they could employ for the benefit of the homeowner.

As I have previously written on these pages, the form in which the scams are presented varies because, like the banks, they use labels to hide what they are really doing. But the substance is always the same.

Since the goal is money, and they probably know they need to hit and run, they going to demand money in one form or another to be transferred from the homeowner to the “rescuer” sooner rather than later.

In addition, they may ask for quitclaim deed, the execution of which is detrimental to the interests of the homeowner. By the execution of a quitclaim deed, the homeowner might lose standing to challenge the investment banks when they seek to administer, collect or enforce the homeowner transaction that gave rise to the appearance of a “loan” transaction.

So if someone asked for money or deed upfront, the proposal is probably part of a scam. An excellent way of determining whether the proposal is part of the scam is to simply read and hear what they are promising. In order to close the deal scam artist will promise things or results that will never be delivered.

Any qualified professional will tell you that when you are entering into a dispute, if anyone promises or guarantees a specific result, they are lying to you. So if someone guarantees you a result, the proposal is probably part of a scam.

In addition remember that if it seems too good to be true, then it is not true and it is not good. Scammers will tell you what you want to hear and you will want to believe it because it is what you want to hear.

So as a yardstick to measure such proposals consider this blog. I will tell you that current law forbids enforcement of your debt, note or mortgage. But I also tell you that (a) in order to defend you must enter the process of litigation and administrative contests and (b) the odds are stacked against you because judges have it in their mind they are saving the financial system form collapse. While I say that a majority of the people who follow my advice win their cases or achieve a successful result, that also means that in a substantial minority of cases, people lose and are forced to leave their homes after spending money on the defense. I can guarantee that current law means that homeowners SHOULD win but I can’t guarantee that they WILL win.

MODIFICATION IS A SCAM

Lastly, one of the scams that will be proposed to you is an offer of modification from what appears to be the “servicer” of your “loan”. In most cases this is offering you ice in the winter. You should consult an accountant or other financial expert to determine the value of the offer of modification. But more than that you need to realize that the offer of modification is actually inviting you to formally join the securitization process.

Modifications actually formalize the illegal practices conducted by the investment banks. Since they have retired the actual loan accounts, there are no actual creditors who can legally make a claim.

The banks have been getting away with designating parties to act as though they were creditors even though they are not. They know this is a very weak spot in their strategy. So they offer agreements that are entitled “modifications” which do virtually nothing to change the terms and conditions of the loan, although some incentives might be offered to reduce the homeowner to sign the agreement.

The real purpose of the agreement is to get the homeowner to agree that the use of the designee, like the company pretending to be the “servicer”, is perfectly acceptable to the homeowner. In so doing, the homeowner has essentially waived all potential defenses that could arise under the Uniform Commercial Code or under common law. The requirement that claimant must have financial injury in order to bring a claim will also have been waived unintentionally by the homeowner, who will then be sued or coerced into making payments that are not due. This also sets the stage for the declaration of default by a non-creditor which can then be enforced by the contract of “modification”.

It is obvious that the proposal for modification is coming from someone who has no authority or powers to propose or enter into any agreement that affects your homeowner transaction (“loan”) in any way. Yet for purely practical reasons it may well be in your interest to agree. Depending upon your financial circumstances and your appetite for risk you might want the entire ordeal to simply end and modification might be an effective way out of it.

But remember though you do have some bargaining control that is not apparent. And although the agreement is not actually a legally binding instrument for a variety of reasons it no doubt will be treated as binding by the courts and will be codified into legitimacy by the coming resets of state legislatures.

*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.*

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How to Fight Those “Declarations” from False Claimants in Foreclosures

The bottom line is that the loan account was extinguished contemporaneously with the origination or acquisition of the account. There is no loan account claimed as an asset of any company.

The records  of the self-proclaimed servicer are not records of the loan account or the establishment of the loan account on the books of any company. Therefore they are not records of the creditor.

Besides being fabricated those records are irrelevant and inadmissible without foundation testimony and proof that the loan account has been established on the books of some creditor and even then, even that is irrelevant unless that creditor was the named Plaintiff or beneficiary on a deed of trust.

All of this is completely counterintuitive to lawyers and homeowners — but not to investment bankers who continue to profit from each foreclosure without paying one cent to reduce the claimed obligation supposedly due from the homeowner.  And they do this all without ever appearing as a party in court.

Nice work if you can get it.

So here is something I drafted recently in response to a memorandum in opposition to the homeowners’ motion to strike the declarations of the “plaintiff”.

Counsel for the named plaintiff is engaging in procedural and substantive strategies of evasion.
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While the action is clearly filed for the benefit of “certificate holders,” counsel continues to refer to the plaintiff as Bank of New York Mellon.
Counsel steadfastly refuses to identify the certificates or the holders.
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In addition, counsel implies a representative capacity on behalf of the “certificate holders” in which the Bank of New York Mellon supposedly has the authority to represent them. As defendant has previously demonstrated to the court, Bank of New York Mellon has consistently rejected any allegation or implication that it served in a representative or fiduciary relationship with certificate holders both in this particular series and in other securitization schemes.
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Counsel for the named plaintiff supposedly appears on the behalf of unidentified holders of unidentified certificates. Or counsel for the named plaintiff is claiming a fictitious representative capacity in which it represents Bank of New York Mellon. But as previously stated by defendant, opposing counsel has no agreement for legal representation between itself and Bank of New York Mellon.
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Instead, it has been retained by a party who is a self-proclaimed “servicer” – Select Portfolio Servicing Inc., and counsel for the named plaintiff asserts that SPS is the “attorney-in-fact” for Bank of New York Mellon.
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However counsel for the named plaintiff has never alleged nor demonstrated that Bank of New York Mellon has ever been party to a transaction in the real world in which it paid value for the underlying debt in exchange for conveyance of ownership of that debt. Accordingly even if SPS is the attorney-in-fact for Bank of New York Mellon, such an assertion is both irrelevant and a distraction from the fact that there is no creditor present in this lawsuit.
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The truth of the matter is that opposing counsel represents neither Bank of New York Mellon nor the certificate holders. Its sole relationship and contact is with SPS, owned by the real player in this action, Credit Suisse — who seeks only profit from the sale of homestead property since the loan account and the underlying debt were retired in the parallel securitization process.
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There is no such debt or loan account and therefore there can be no owner. And if there is no owner of the debt or account then there is no creditor, lender or successor lender. SPS may have some agency with Bank of New York Mellon but that does not create the rights they seek to enforce.
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Counsel for the named plaintiff asserts “the declaration was clearly executed by a person with “personal knowledge” as required by the foreclosure order.” This is not a true statement. Counsel is being disingenuous with the court.
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The declaration was executed by somebody identified as a “document control officer.” The declaration says nothing else about any personal knowledge acquired by the signatory. In fact it does not even define “Document control officer.”
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The declaration itself does not establish the foundation for testimony about the subject loan despite the characterization advanced by opposing counsel. The statement in the declaration is that “SPS holds and maintains all of the business records relating to the servicing of this loan.” There is no statement or allegation or any other evidence in the court file, nor could there be, that the records of SPS include entries that establish the subject debt, note and mortgage as an asset of any entity. That is because no such entity exists and no such loan account presently exists.
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Opposing counsel disingenuously attempts to distract the court by focusing on the familiarity with the record-keeping practices and record-keeping systems of SPS. Such familiarity is irrelevant if the records are not those of the creditor. This is irrelevant if SPS is not an authorized agent of the party who has paid value for the debt in exchange for a conveyance of ownership of the debt. No such allegation or evidence exists except through the use of presumptions related to documents that are not even facially valid.
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Accordingly the opposition filed by opposing counsel is simply another step in the attempt to distract the court from the simple fact that no loan account has ever been established nor has the ownership of such an account been established. Opposing counsel has relied upon innuendo, implication and self-serving inferences to establish facts that do not exist in the real world.
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The declaration of opposing counsel is false. Neither the attorney nor the law firm represents the Bank of New York Mellon. In addition, the attorney falsely alleges “personal knowledge” without specifying how that knowledge was obtained. Like all other documents in this case, the creation of this document is meant to create an illusion based upon a cursory glance at the document rather than an analysis of it.
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The declarations in this case do not survive any credible analysis.
Similarly, the creation and execution of a “limited power of attorney” on March 5, 2020, after the lawsuit was filed and after the motion for summary judgment was filed, is another disingenuous effort to distract the court. The execution of the power of attorney, even if it was valid, is irrelevant if the grantor had nothing to grant. There has yet to be any reference, allegation, exhibit or evidence submitted establishing the identity of any entity that maintains the subject loan account as an asset on its financial statements.
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In conclusion, any reasonable attentive analysis of the documents submitted by opposing counsel reveals the absence of any allegation that counsel represents any party on whose behalf this action was filed, according to the complaint and subsequent filings. Taken individually or collectively, the documents are a smokescreen for the pursuit of profit of a third party (Credit Suisse) rather than restitution for an unpaid debt that no longer exists. 
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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.
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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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Just like I said: Megabanks are doing just fine despite economic downturn — at the expense of investors, taxpayers and homeowners.

Major banks, including CitigroupJPMorgan and Morgan Stanley used massive trading revenues to beat profit expectations despite the continued struggles of the United States economy during the coronavirus pandemic. Those trading units tend to perform best when markets are volatile, helping to guard the major banks against economic struggles.

see https://www.cnbc.com/2020/07/17/without-big-wall-street-trading-arms-regional-banks-lean-on-mortgages-and-fees-to-beat-earnings.html

Way back in 2006 and 2007 and when I first started publishing articles about the mortgage meltdown (before most people realized there was a meltdown) I reported that the major banks were siphoning off much of the wealth contained inside the U.S.

I said that these mega banks were parking ill-gotten gains off-shore in various assets, — frequently using  a tax avoidance scheme based in Bermuda. And I said that they would repatriate that money only when they needed to do so.  And because they had taken trillions of dollars, they would forever use it to consistently report higher earnings whenever they needed to do so in order to maintain the value of their stock.

I said that they would do it by reporting higher trading profits. They are reporting higher trading profits merely by creating false trades at their trading desks between fictitious entities in which one of the subsidiaries is the “seller” who is reporting a profit.

Sure enough that is exactly what is happening. Small and regional banks don’t have that “nest egg.” They must rely on old fashioned fees and interest to earn money. But the big banks are reporting “trading profits” to offset deficits in interest and fee income caused by the huge economic downturn caused by coronavirus.

Part of those trading profits also come from foreclosures. The proceeds go to the megabanks, who have retained little or no financial interest in the alleged loans much less any losses from the alleged default.

There was no default in any obligation owed to any creditor because there is no creditor who maintains an accounting record on which it claims to own any homeowner debt, note or mortgage by reason of having paid value for it in exchange for a conveyance of ownership of the debt, note or mortgage from one who legally owns it.

Simple common sense. If you don’t own the debt you have no reason or authority to mark it “paid” even if you receive the money.  Homeowners and their lawyers should stop taking that leap of faith in which they admit the existence of a default. A default cannot exist on an obligation in which there is a complete absence of a legal creditor. Homeowners didn’t create this mess. It was all the megabanks who made a fortune stealing from investors and homeowners.

A default is the failure to perform an obligation or duty owed to a particular person — not a failure to perform a duty owed to the world in general.

There could be many reasons for the absence of a legal creditor — including the simple fact that everyone has received sufficient payments and settlements such that nobody needs to step into the shoes of a lender which could produce liability for violations of lending and servicing laws.

IT SHOULD NEVER HAVE BEEN THE BURDEN OF HOMEOWNERS TO PROVE THE EXISTENCE OF THE REAL CREDITOR. There isn’t one and the banks and their lawyers have been laughing at us for 20 years over getting away with that one. 

It was the mega banks that created loans without lenders — i.e., transactions in which there was no legal person or entity claiming ownership of the obligation.

The banks are using smoke and mirrors. They claim (through third party intermediaries) a “default” in the obligation to pay a nonexistent creditor. The money they receive from foreclosure is pure revenue offset only by the fees they pay to the other intermediary foreclosure players who exist solely to produce profits for themselves and the megabanks.

And pro se homeowners and even lawyers are confounded by this system. They admit the basic elements of the claim even though the basic legal elements are missing.

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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.
*

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In the meanwhile you can order any of the following:
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*
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*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
*
Please visit www.lendinglies.com for more information.

Who is PennyMac and Why Was It Needed by Wall Street Banks?

I received an email from one of my most prolific contributors that I am republishing here because virtually everything in it is entirely correct. I especially approve of her point about the fact that servicer advances are funded from proceeds of public offerings of stock that were all purchased by the Wall Street banks who did the underwriting.  Substance over form: the banks were giving PennyMac the money to make servicer advances. The banks were using the investor sourced money supply to buy the fake stock offering. None of it was real.

The end result is that all roads lead back to one thing, to wit: all of the money trail and all of the paper trails lead back to a handful of Wall Street banks who had “successfully” created a void between the real parties in interest — investors and homeowners — and the found a way to create the illusion of filling the void that cut out the financial interests of those real parties in interest. 

The banks were only intermediaries. They successfully posed as the real parties in interest when they were trading and issuing derivatives. But at the other end of the stick they maintained their position as intermediaries who had no interest in the debt and therefore could not be defined as lenders subject to the obligations and restrictions imposed by statutory and common law governing lending, consumer practices, servicing or anything else.

All of the fabricated documents that ensued were designed to cover up the fact that there was no person or entity that owned the underlying debt of any homeowner. Hence nobody could claim financial injury — a basic requirement for getting into court or making any claim.

who is PennyMac (PM) and why are they needed.
I think we need to look back at the PM history to answer this question.
PennyMac is a renamed Countrywide Financial which now operates at least 4 (four) known to me organizations.
1. PennyMac (one of most criminal, with Kurland and Spector)
2. Caliber Home Loan Inc, a middle-level intermediary, operated by Chris Mozilo who pass money from table pools to homebuyers via Black Knight (originator)  and smaller “Lenders”
3. BAC Home Loans
4. LandSafe Appraisal (purchased by CoreLogic) . In 2014 BOA sold a very similarly named system, LoanSafe to VA which is now handles all appraisals; plus CoreLogic gradually purchased most smaller appraisal companies*
Why Bank of America needed PennyMac to appear as a Large Lender and a Biggest servicer?
For the same reason why Countrywide needed American’s Wholesale Lender; and Fidelity National needed two (2) DocX,LLC and LPS – to create an additional corporate curtain to cover for the real parties.
Plus to use PennyMac and other “Servicers” as recipients for new bailouts.
If you take a closer look at PennyMac’s finances, here are nothing even close to $368+ billions worth of mortgages financed and 2 million homes serviced by PennyMac.
Moreover, if you see their Prospectuses, you will find out that the underwriters of PM securities (issued by PennyMac) are the same Stockbrokers who purchased PM’s securities, leaving about $29 million in fees to Penny Mac. I doubt is BOA or GS actually “purchased” anything from PM under this “offering” which they issued under glimpse of PennyMac.
But according to the legend, PennyMac now has to pay pay “servers’ advances” to “investors” for four months from their “own funds” until GSE’s (who sold their bonds to Fed. R. in advance) who cover these MBS, will step in and pick up the payments on “behalf of taxpayers  – while  GSE cannot even identify any Trusts where mortgages were pooled.
These GSE SOLD their unsecured bonds to Federal Reserve who buy about $30 Billion per WEEK from GSE beginning March 2020 to present time. Note that no Trusts were involved in these sales and no one homeowner was informed about the cage of ownership of their “debt”
I don’t know which “Servicers’ advances” and to whom PennyMac “pays” now, when the ownership of the “MBS” bonds was passed to Federal Reserve. At least Federal Reserve keeps it secret.
Apparently Kurland and know all risks involved and decided to steal some data from BK to create more money for themselves.
On May 2, 2019 they sent me a letter that “servicing” was transferred to them – but not mentioned by whom.
On May 3, 2019 PM sent a letter to BK informing them that PM is not going to extend their contract.
soon after Black Knight claimed that they “noticed some irregularities of use” their system by PM – apparently after I brought it to their attention. This is why no assignments were recorded reflecting the “sale” of my loan to PennyMac who cannot identify the Seller.
Since Oct. 31st  BK terminated PM as a client .
In Complaint  filed by PM against BK, they insist that the owner/investor is Ginnie Mae (who sold their MBS to Federal Reserve) – but continue to lie to me and DIFS that PennyMac is “owner/investor” in my loan.
The bottom line, as Neil said – these “servicers” and “lenders” are nothing. They are thin-capitalized clowns for hire and nobody sold any loans to GSEs because loans were destroyed at the beginning to create “manipulated data” in Black Knight system which Big Banks  sold as unsecured derivatives which GSE either sell to Federal Reserve or obtain payments from Stockbrokers directly, like FHFA v. Goldman Sachs
“GSE’s ownership” is the same myth to force people paying a long-time non existing “debt”.
So-called “universal income” proposed by Democrats is a camouflaged attempt to make Big Banks  pay royalties from trades to people .
Of course the Government cannot disclose the Truth since it will reveal that during last 40 years they allowed Stockbrokers to destroy property Titles to virtually ALL homes in America; plus create a slavery never existed before, where a small group of people enjoy tax-free profits from free servitude provided to them by the rest of the Country – plus income from stolen homes.
*Lagow worked at LandSafe, Inc., an appraisal company owned by Countrywide Financial and ultimately acquired by Bank of America, from 2004-2008. According to his unsealed complaint, Mr. Lagow observed widespread disregard for laws that regulate Federal Housing Administration (FHA) underwriting and home appraisals.

Specifically, he claimed that Countrywide conspired with LandSafe and homebuilder KB Homes to inflate the appraised value of homes, boosting the size of the lending giant’s loans to homebuyers. In order to accomplish this, the lending giant allegedly used a number of strong-arm tactics to pressure appraisers to report favorable home values.
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.
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