TRID may be another easy win for Homeowners

since loss mitigation is a statutory condition precedent to foreclosure, there is a failure to comply with the condition that requires loss mitigation exhaustion before pursuing foreclosure, the steamrolling of homeowners is not just wrong, it is also a breach of statutory duty for which the homeowner can seek injunctive relief, damages, and attorney fees.

TILA-RESPA integrated disclosures (TRID) is a series of guidelines that dictate what information mortgage lenders need to provide to borrowers and when they must provide it. TRID rules also regulate what fees lenders can charge and how these fees can change as the mortgage matures.

But it also contains the requirements for review and processing of loss-mitigation applications, resulting in charging excess fees without explanation and failure to credit surplus proceeds from the foreclosure sale.

Once you accept that you might be wrong, then you can move on to whether the forces aligned against you are also wrong. But first, you must discard the errors of your own ideas about the transaction in which you obtained money. It is at that point that several things emerge. And Homeowners are starting to pick fights with “servicers” rather than waiting for them to arrive and others are going back and contesting foreclosure sales for breach of statutory duties.

START HERE:

  • When you apply for loss mitigation you are tacitly admitting that the address you are sending your application to belongs to parties who are entitled to receive it. This is almost always untrue.
  • By addressing the application to the designated company whose name is used by FINTECH as a “servicer” you are admitting that they have the power to consider the loss mitigation application. They don’t.
  • And to put a finer point on it they don’t consider it. Nobody does.
  • This means that reports back to the homeowner are false. It was not considered because neither the named “servicer” nor FINTECH had any power to consider it nor did they do so.

So if you want to use the TRID strategy, you must first accept their authority, submit the required documents and then sue them for deceit and breach of statutory duty. You might also want to demand the return of everything you submitted since they were not entitled to receive it.

I also think that the Administrative Strategy (QWR+DVL+CFPB complaint+AG Complaint —see links below) is an essential condition precedent for the homeowner to be able to sue. It should be timed such that the homeowner can honestly say that they accepted the representation of authority in good faith and then concluded afterward that no such authority existed.

This opens the door to a simple lawsuit under TRID, which is really a breach of TILA. And since loss mitigation is a statutory condition precedent to foreclosure, there is a failure to comply with the condition that requires loss mitigation exhaustion before pursuing foreclosure, the steamrolling of homeowners is not just wrong, it is also a breach of statutory duty for which the homeowner can seek injunctive relief, damages, and attorney fees.

The basis of the lawsuit is simple.

  • The homeowner received an invitation to participate in a loss mitigation program from someone who had neither the power nor intention to consider it.
  • Subsequent reports issued under the letterhead of the designated company that was an alleged servicer were erroneous and false.
  • No consideration was given to loss mitigation.
  • The “servicer” possesses no record of seeking or obtaining instructions from any creditor nor any company or person that possesses the authority to act for a creditor who maintains an unpaid loan account due from the homeowner.
  • Therefore foreclosure should not be allowed or should not have been allowed.

In order to pursue this strategy with gusto, you need to accept the fact that the entire securitization infrastructure might be a ruse. It is. You don’t need to prove that it is a ruse. You only need to kneecap those who rely on that infrastructure to obtain windfall profits.

The only way to defeat you is if they get you to admit that the parties with whom you’re corresponding are legally authorized to represent a real creditor. If you reject that and make them provide corroborating evidence they’ll fail because such evidence does not exist.

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

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

Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for 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 CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. 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. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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 the CFPB Announcement is Very Important

when the time comes that a judge enters an order or judgment containing findings of fact, for example, that the records of the designated “servicer” are not business records that are not exempt from the hearsay rule, the poop will hit the fan.

I received multiple emails from lawyers and homeowners who were confused when I posted an article about the latest CFPB announcement. Most people are not clear on why this announcement is so important.

 

I can say this — the lawyers who represent “industry actors” are sending up flares about this announcement. See the Troutman Pepper Analysis. The end result SHOULD come in two parts:

  • a restructuring of all homeowners transactions in which the homeowner agrees to accept a virtual creditor instead of a real one, a virtual loan account instead of a real one, and a set of risks that are disclosed to the consumer as required by the Federal and State Statutes governing lending practices.
  • reasonable compensation to the homeowner for being an “industry actor.”

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Obviously, Wall Street hates that idea and will fight against it. For one thing, when all cards are laid upon the table the big banks will have many aggressive competitors offering homeowners greater incentives to sign off on the new deal. For the old ones that are considered “complete”, it will require a forced settlement with the investment banks that has the effect of greatly reducing the alleged debt. Homeowners would be forced to accept the reformation of their “simple” loan transaction.

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If you read the announcement closely, you will see that the CFPB has redefined FINTECH. And they are undermining the claims made in the name of companies that are designated or labeled as “servicers.”

They are treading carefully, but it is now abundantly clear to the agency that the companies that most people believe are servicing their accounts are simply being used as fictitious names for third parties.

It will take a while for this to sink in. And there is more that the CFPB can do to reinforce this message. But when the time comes that a judge enters an order or judgment containing findings of fact, for example, that the records of the designated “servicer” are not business records that are not exempt from the hearsay rule, the poop will hit the fan.

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Those records are the only thing that the dark side has to establish the existence of an unpaid debt and a creditor. U.S. Bank, N.A. for example does not receive documents or money out of the cash flow created by transactions with homeowners. The allegation, assertion, or claim has always been that it had “constructive possession” because the company that was named as the “servicer” had received the original documents.
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White will be revealed and highlighted by the policy announced by the CFPB, is that the named servicer does not receive any money or any documents. Instead, there are fabricated documents from which one might assume or presume that money and documents had flowed to the company that was named as a “Servicer.”
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Even if such companies, like Ocwen for example, came into actual possession of an original note (unlikely because notes are routinely destroyed contemporaneously with closing), it would mean nothing because they don’t have the right to enforce. People tend to forget the second part of the lawyers seeking Foreclosure use a variety of tactics to paper over that fatal deficiency.
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Wall Street investment banks invented a circuitous route to get around this fatal defect. They use documents that are labeled as “power of attorney” or they use the pooling and servicing agreement.
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The named plaintiff or beneficiary in a foreclosure is usually named as a bank not on its own behalf but as trustee of a named trust which may or may not exist. But neither the bank nor the trust maintains any accounting records reflecting ownership of assets consisting of obligations of homeowners.
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In plain language, this means that the Foreclosure mill is making allegations, assertions and argument regarding the existence and identity of a creditor owning the alleged obligation of the homeowner, but there is no testimony, exhibit or any evidence that those assertions are true. Pressed further, the inevitable conclusion is that they are not true.
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Therefore the appointment of a company that is self-described as a “servicer” is irrelevant to any case in which a party is seeking Foreclosure. In plain language, the agent has no more power than the principal.
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The announcement by the CFPB has Biden’s fingerprints all over it. His style is very underplayed and incremental.
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You could easily read the announcement as simply the intention to examine the business of companies that are described as FINTECH. The CFPB is saying that they are not simply technology companies.
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The CFPB is saying they are servicers — this puts the CFPB in direct conflict with all claims made on behalf of companies who are named as “servicers” but who perform no servicing functions in connection with the receipt, processing and accounting, and distribution of proceeds to any creditor.
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When you think about what that might mean and what we already know, the outcome of that investigation and monitoring will be an administrative finding that the real servicer has not been disclosed, and that the companies who are named as servicers have no relevant business records, because they never received any payments nor made any distributions.
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There is no possibility that the investigation will not lead to a question about how the FINTECH servicers are working and for whom they are doing this work.
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This is a pivotal point. If the real servicers are simply contractual agents of the designated companies who are named as services, it would strengthen the position of the investment banks. But I know that the real servicers (FINTECH) are working for the investment banks, and not the bank named as trustee for a REMIC trust — nor the company named as “servicer.”
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This will all lead to the inevitable conclusion that no company is actually performing servicing in the conventional sense. None of them are collecting money from homeowners and then distributing the payments to creditors. That is because of one fatal flaw and the business plan of the Wall Street securities firms. They eliminated the role of “creditor” or “successor lender” but they kept the labels.

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==================
DID YOU LIKE THIS ARTICLE?
Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.
CLICK TO DONATENeil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for 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 CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. 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. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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.

Notices To and From Servicer Might Mean Nothing at All

In homeowner finance, ALL claims start with notices from third parties with whom the homeowner has previously had no communication. My suggestion is that homeowners start challenging those letters, statements, and notices as soon as they arrive. Such challenges make “tracks in the sand” for later use in litigation.

But the real issue arises repeatedly because the condition precedent to foreclosure about which there is no dispute is that first there must be a declaration of default. And in the world of securitization, there is no creditor, loan account, or any loss or ven risk of loss arising from a homeowner failing or refusing to make a scheduled payment.

A declaration of default usually comes from a disinterested third party who does not represent an existing creditor who maintains an unpaid loan account receivable on its accounting ledgers reflecting real-world transactions in which it paid value. The equivalent legal value of that is you sending a notice of default to your neighbor when you figure out he or she did not make a payment to the utility company. The notice was sent but it has no legal effect. it is called a legal nullity.

So the question arises about what happens when you send a QWRT or DIVL to the company that was named as a servicer. the first thing that comes to mind for me, is that merely sending the QWR or DVL might be construed as a tacit admission that the company really is a servicer.

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This logically leads to the presupposition that since it is a servicer it is really performing real servicing duties. And that logically leads to the factual conclusion that it is legally and rightfully acting on behalf of a true creditor. And since a true creditor obviously loses money when a homeowner does not make a scheduled payment, it follows that the default can and should be issued.

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The problem with this analysis is that it leads inexorably to the conclusion that you should not respond to fakers. But since the players are claiming rights of administration, collection, and enforcement, they DO appear to fall under protections for consumers relating to those activities. But that still leaves open the issue of whether the named “servicer” is the only one who should receive the DVL and QWR.

That is the question I answered as follows:

Theoretically notice to the servicer is a notice to all under the regulations. The problem is that the company named as a servicer does not do the servicing. That is one of the subjects that is never discussed.

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The company named as servicer probably does have some apparent agency or other authority to present the named Trustee of the REMIC trust. But since that trustee never has the right, power, justification or excuse to administer any affairs regarding the alleged loan account (which does not exist) giving them notice arguably is a failure to give notice to anyone who is real party interest. But it IS notice to everyone who is engaged in apparent debt collection activity even if there is no debt.

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So sending the QWR to all who are “interested” (in a conspiracy to defraud) is probably a good way to go. The real problem is that the laws do not cover this scenario. A legal question is whether the extensive protections for consumers even apply to a company whose name is being used (with consent) to simply put a face on a scheme in which money is illegally collected without any right, justification or excuse? Anyone receiving the QWR is basically put on notice that they may be part of a future lawsuit.
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The countervailing argument is that some of the proceeds are eventually used to pay off some of the money due to investors (the rest coming from sales of new certificates). But that argument fails because the investors who became “holders” of certificates are merely the payee on an IOU issued by an investment bank in a transaction wherein the investors waive any right, title, or interest to any homeowner payment, debt, note, or mortgage.
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The bottom line for all this is whether there can be any legal collection activity without a creditor, a loan account or any risk of loss. Even the investors get paid the debt from the investment banker regardless of whether or not a homeowner misses a scheduled payment.
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===============
DID YOU LIKE THIS ARTICLE?
Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

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

Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting 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. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for 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 CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. 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. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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 Evidence Works for and Against the Consumer/Homeowner

(Once again, because of minor medical issues I decline to do the Neil Garfield Show. I offer this instead)
It is easy to get lost in the weeds. Don’t make up your own words or definitions because your definitions have no relevance to your case. Do hold the accusing side to their words and to the legally accepted definitions of those words as contained in statutes and cases.

But above all, start at the beginning — a rookie mistake made by nearly all young litigators and pro se litigants who skip over the gold to pick up a few pieces of copper.  They exclaim “How could I lose, I have the copper!” And all the court wanted was the gold.

This post is inspired by the factual findings of several of my most generous contributors, and a hat tip to summer chic. Just because you hear a word or term don’t think you know what it means or the context in which it is issued. That is what litigation is all about. 

So first I will repeat what Aristotle said. First, define your terms. I personally know what Fiserv did as a payment processor when it served to intercept and process transactions from POS and ATM devices. I know what it did when it effectively acted as Gateway for intercept processors, including itself.

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Payment processing in all of its forms consists of three distinct nodes: receipt of money, data processing (recording the receipt and disbursement of money) and the actual disbursement of money. In that sense, Fiserv has always been a servicer.

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So it is easy to see why the investment banks trusted FiServ to handle those functions rather than anyone else. And they did. After the Tylor Bean débâcle, they would never let a company actually perform servicing functions because that would leave open the door to stealing.
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It was Black Knight who set up the lockbox arrangements (contracts) but FiServ who actually did the grunt work — receiving, accounting, and disbursing $MONEY$. Except that they didn’t really do disbursing.
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Because the act of depositing the money was a disbursement. They would take a $1,000 check from Homeowner Smith and deposit it into a bank account that was owned and controlled by XYZ Capital Finance, Inc. which was either a subsidiary of the investment bank or a conduit for outflow to offshore accounts. The named “servicer” never saw or even expected to receive that money.
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The reason why I am commenting on this is that this is extraordinarily important to the defense narrative for consumers. The ONLY party who may sue is one who has suffered financial injury “proximately” caused by the conduct of the party against whom he has filed suit.
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I have argued for 16 years that the homeowner deserves to win. But people take that as meaningless drivel from a defense lawyer who will always say that his criminal client is innocent. So try this: you can win and why should you not? If you were facing jail would you really so blithely accept the “inevitable”?
  • If the homeowner fails to make a payment that appears on some schedule and Goldman Sachs loses money because they’re betting that he would make the payment, the injury suffered by Goldman Sachs is NOT LEGALLY caused by the failure of the homeowner to make a payment. GS cannot sue the homeowner for that. That bet is the same as betting on a horserace. You can’t sue the owner for losing or throwing the race.
  • If an investor IS getting paid regardless of whether the homeowner makes a payment or not, then they can claim no injury from the “failure” to make a scheduled payment.
    • The investor who purchased a certificate is simply betting that the investment bank that issued the certificate will make the payments or cause payments to be made according to the terms of the contract that is the certificate — not according to any contract with the homeowner. The certificate parties are investor vs investment bank — not investor vs homeowner.
  • If an investor has no legal claim to receive payments from homeowners nor to administer, collect or enforce any alleged loan account the investor has no claim whatsoever against the homeowner — for the simple reason that the investor has chosen to have no relationship whatsoever with the homeowner in order to avoid liability for lending and servicing errors, mistakes or violations of statutes passed by the Federal and State governments — of which there were tens of millions of cases resulting in hundreds of billions in settlements, so far.
  • If an investment bank was counting on receiving a scheduled payment from a homeowner but had no right to receive it, it may not under current law in any U.S. jurisdiction recover money from the homeowner nor force the sale of the homeowner’s property.
  • If the investment bank had no legal right, title or interest to the underlying obligation, debt, note or mortgage (deed of trust) issued by the homeowner, then it had no right to administer, collect or enforce any payment set forth on any schedule — nor grant the authority to do so to someone else.
    • One may not grant rights that do not belong to the grantor. If I promise to give you my jet, you will not get the jet simply because I don’t have a jet. And if you know I don’t have a jet you have no claim for my failure to deliver it.
  • If a company is named as servicer then unless FiServ is doing the work for that “servicer” company (under contract), then the work done by FiServ is the work of Fiserv, and only Fiserv employees and representatives can testify about what was done and what their records contain.
    • Any report issued by them or based upon FiServ data must be established by foundation testimony from the records custodian of FiServ and not some robowitness employed by the company who was named as a servicer but was not performing the basic servicing functions.
    • Any such report and testimony of the “representative of the named “servicer” are irrelevant, lacking in competence, foundation, or materiality.
    • Such testimony is rank hearsay clearly excludable in every court in every U.S. jurisdiction — but only if a timely and proper objection is raised within the context of a coherent defense narrative.
    • This is because the only thing that a robowitness can really say is that “I received this report and my boss says it is a report from my employer who I have been told by someone (I don’t remember who) is a servicer of an unpaid loan account due from the homeowner to the Greatest Bank of All Time, N.A., not on its own behalf but on behalf of the Indecipherable Trust 200x-04 ALRT-A pass-through certificates, not on its own behalf but on behalf of the holders of those certificates, about whom I know nothing.” 
      • “I know nothing about the content of any servicing agreement between my employer and any creditor who has paid value or otherwise has a right, title, or interest in receiving money from the collection of payments, principal, or interest from homeowners. “
    • In truth, the report is entirely printed out from data received exclusively from FiServ data processing servers and storage servers which are owned, operated and maintained by FiServ which provides services (“servicing”) to and for the exclusive benefit of investment bankers who have no legal right to administer, collect or enforce any debt.
    • In truth, when the robowitness says he or she is familiar with the records of his or her employer what they really mean is that they’re familiar with a script and know absolutely nothing about the operations of their employer because their employer does not want them to know anything. (This is how many such witnesses are “blown up” on the witness stand by hundreds of lawyers across the country.)
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So for purposes of this discussion, a payment processor is a company that processes payments — i.e., something that is actually happening and something that they are a direct party to witness the actual occurrence of actual events and recording them. A “servicer” is a company that services payments from the homeowner and accounts for its actions by recording data on its own records regarding said receipt.
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If they have not done that, then they’re not a servicer in the conventional use of the word, even though the statutory definition for purposes of statutory liability to consumers is much broader. That statutory definition (augmented by regulation X) does not mean that they received any payments nor recorded any such receipt.
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Use of that statutory definition as a basis for misleading the court about the role of the company named as servicer and the origin of the information will eventually become, in fairly short order, the subject of a series of actions by state bar associations, the FTC and the CFPB. Insurers of lawyers have already inserted sufficient cover language to deny coverage for intentional misdeeds. Since the company named as “servicer” is not “servicing” any unpaid loan account receivable (which it will be revealed does not exist) they have no right to testify about it, much less the balance or record of payments.
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This is all true and but it is NOT a sign of judicial corruption to point out instances in which these particular facts are either ignored or denied by the person sitting on the bench. Their job as judges is to rule on what is brought in front of them — not what might have been brought nor what should not have been brought if there had only been an objection. The truth is that in most cases I have received I would have ruled the same way as the judge frequently accused of corruption.

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Once the homeowner has effectively admitted that there is an unpaid loan account receivable exists (without any information), admits that the third party company is a servicer (without any information), and admits that the bank named is the trustee of a trust (without any information), and admits that the trust owns an unpaid loan due from that homeowner or even argues about which trust owns the loan, what choice do I have as a judge but to rule that those facts are, for purposes of the case in front of me, the facts of the case?
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Litigation is about offense and defense. The purpose of defense is NOT to let the evidence in or to find ways to get it out. It is not to prove that the lawyers or anyone else are corrupt, evil, or belongs in jail. Once you make that allegation and can’t legally prove it, you will lose all credibility on the main point — defense. And that will cost you the opportunity to make a ton of money on wrongful foreclosure.
================
DID YOU LIKE THIS ARTICLE?
Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

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

Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting 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. You will receive an email response from Mr. Garfield  usually within 24 hours. In  the meanwhile you can order any of the following:

Click Here for Preliminary Document Review (PDR) [Basic, Plus, Premium) includes 30 minute recorded CONSULT). Includes title search under PDR Plus and PDR Premium.

Click here for 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 CONSULT (not necessary if you order PDR)
*
CLICK HERE TO ORDER CASE ANALYSIS 
*

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. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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 the UCC Matters in Foreclosure Cases

The problem as illustrated by many scholarly articles and articles on this blog is that courts are given to treat plaintiffs and claimants as holders in due course without anyone asking them to do so.

The first thing you need to know about Foreclosure is that it is only about money. If you have the money and you pay it, there is no claim — or at least no claim against you. You might have a claim against a “debt collector” seeking to enforce a nonexistent debt for a nonexistent claimant.

The second thing to remember is that, by definition, foreclosure is a lawsuit or claim based upon enforcement of the mortgage or deed of trust. The promissory note is usually introduced as evidence of the existence of the obligation and the duty to make scheduled payments. But enforcement of the note alone can only result in a monetary judgment that could be discharged in bankruptcy.

According to the law in every U.S. jurisdiction (adopting 9-203 UCC) the mortgage or deed of trust can only be foreclosed to satisfy an unpaid existing obligation owed by the homeowner to the named claimant. Lawyers and judges have adopted various strategies to allow foreclosures when they are only based upon the enforcement rights of a holder of a promissory note and often without regard to whether the claimant is a legal “holder.”

In fact, most courts treat the claimant as though it had established its exalted status of a holder in due course — without anyone asserting that status. And the common failure to object to such treatment is the principal reason why homeowners fail to successfully defend foreclosure actions based upon a nonexistent loan account and often even a nonexistent claimant.

In 2007, the Fordham Law review published an article entitled “Will the real holder in due course please stand up?” I republished that article later on this blog. The answer to the question, in cases where foreclosure was claimed as a legal remedy by some alleged REMIC trust structure, was that there was no holder in due course.

You’ll be surprised to learn that there have been many cases where a credible offer to pay the claim has been declined if it required confirmation from the named Plaintiff or claimant.

This is standard industry practice in circumstances where a prior “loan” is being been financed or paid off through sale or other means. Many states have laws specifically requiring that the payoff information includes such information and assurances — in order to prevent a payoff to a party with no claim. It is basic common sense and basic law to assure continuous clear title to the property free from claims of clouded or unmarketable title.

In each case where I have been involved, opposing counsel basically took the position that they didn’t want the money they wanted the foreclosure. And in each case, the judge was surprised by that position.

But most homeowners are not in a position to make a credible offer to pay off the entire amount as demanded. Those who can make that offer are utilizing the AMGAR strategy that I developed 16 years ago.

Those who cannot make that offer must litigate to make the same point — that in the final analysis (trial) the attorney for the named claimant will be unable to proffer credible evidence of the existence, ownership, and authority to administer, collect or enforce any debt.

Instead, they will proffer fabricated documents and argue that the judge should apply legal presumptions to conclude that an obligation exists, the named claimant owns it and the homeowner is in breach of a duty to make scheduled payments.

In reverse logic, the foreclosure lawyer simply takes an uncontested fact (usually) and bootstraps it into a case that the judge thinks is real. And what nearly everyone forgets is that the absence of a scheduled payment, even after making such payments, is not evidence of default nor a license to declare a default unless the payment was actually legally required to be paid to the party seeking to collect it.

If you skip a car payment I have no business, right or justification in declaring that to be a default. But current law is hazy on the subject of what happens if I do declare the default and then bring a claim based upon my declaration of default and my claim that I represent the loan company.

In a 2016 article just brought to my attention that was published by Franklin Pierce School of Law of New Hampshire University, a lawyer in Miami published an article about the nonconforming use of the UCC to support nonconforming claims. At the time of publication, he was associated with a Florida law firm representing lenders. 14 U.N.H. L. REV. 267 (2016), available at http://scholars.unh.edu/unh_lr/vol14/iss2/2. 

See

The Non-Uniform Commercial Code: The Creeping, Problematic Application of Article 9 to Determine Outcomes in Foreclosure Cases

Morgan L. Weinstein

Senior Attorney at Van Ness Law Firm, PLC, Miami, FL

The Non-Uniform Commercial Code_ The Creeping Problematic Applic

Weinstein makes a clear presentation of fact and law with respect to the application of UCC Article 3 (notes) and Article 9 (Security instruments, mortgages deeds of trust etc.).

Keep in mind here that a holder in due course (HDC) is ONLY one who has paid value for the ownership of the note in good faith and without knowledge of the maker’s defenses. In plain language, the HDC can enforce even though there are potentially many defenses that would be available to the maker of the note if the claimant was merely an alleged “holder.”

In every instance where a REMIC trust structure is alleged, there is only an allegation or assertion that the “trustee” or trust is a holder, not a holder in due course. Earlier (2001-2005) assertions of HDC status were removed from the script.

Also, keep in mind that a legal holder of a note has two attributes: POSSESSION and RIGHT TO ENFORCE. The latter is overlooked. The only party with the power to grant the right to enforce is ultimately the creditor who owns the underlying obligation.

So the claimant attempting to enforce a note may file a complaint (and win a judgment if there is no contest) based upon the technical allegation that it is a “holder”. But it still loses at trial or summary judgment if it fails to respond to discovery requests asking for the source of its authority to enforce (given that they are not a holder in due course).

The problem as illustrated by many scholarly articles and articles on this blog is that courts are given to treat plaintiffs and claimants as holders in due course without anyone asking them to do so. Although I have seen many transcripts in which the lawyer Argues that his “client” is a holder in due course without any reference to payment of value in exchange for ownership of the debt, note or mortgage.

Such “misstatements” are protected under the doctrine of litigation immunity unless you can prove that the lawyer speaking absolutely had knowledge that he or she was lying when the statement was made.

He begins with a discussion of negotiability:

Negotiability presents the possibility of a transferee taking a position that is better than the transferor.The Uniform Commercial Code defines a number of different possible parties to a negotiation. There are three general positions that a transferee can occupy in a transfer under a negotiable instrument: the transferee can occupy a better position, a same position, or a worse position, with each position being relative to the transferor. [e.s.]

Typically, lenders in foreclosure actions occupy the same or worse position, given their frequent status as a “holder,”rather than the better position of a “holder in due course.”

Under Article 3, a “holder in due course” occupies a privileged position.Specifically, a holder in due course is insulated from numerous defenses to the right to enforce an instrument. A holder in due course is susceptible only to the “real defenses” of a borrower or other interested party.The real defenses include claims of infancy, essential fraud, insolvency, duress, incapacity, or illegality.Though there is an assumption of good faith in Article 3 dealings,a holder in due course is still protected from many defenses to the right to enforce.

 

Weinstein makes the following point, though:

it is generally understood that a note-holder may foreclose a mortgage, and a plaintiff need only establish entitlement to enforce the note in order to demonstrate its ability to foreclose the incidental mortgage; such a plaintiff need not demonstrate ownership of the note.

Although he correctly states the current status of legal consensus, this statement overlooks the issue presented above — that the right to enforce emanates solely and ultimately from the creditor owning the underlying obligation. Otherwise, the whole concept is meaningless.

The prima facie case of the claimant need not prove that line of authority and grants but the defense can undermine and eliminate the prima facie case if it can be shown that the claimant has not received such authorization or that the claimant cannot produce evidence of such authorization in discovery and even under court order in the discovery process.

Thus whether one relies on Article 3 or Article 9 the UCC result is the same: there is no remedy of foreclosure for a party who has not paid value for the underlying obligation or at the very least can show the foreclosure sale will be used to pay the creditor owning the underlying obligation thus reducing the alleged loan balance.

This goes to the root of foreclosure. Nobody in the courts would agree that anyone with knowledge of the original transaction with a homeowner should be allowed to enforce a contract to which he she or it was not a party. And if the proceeds of a foreclosure sale are not intended to decrease the loan account receivable of a creditor who paid value, then there can and should be no foreclosure or any other claim for that matter.

As far as I can determine, contrary to the belief of most lawyers and judges, there is no single instance where the forced sale of residential property in which the claimant was an alleged REMIC trustee, for an alleged REMIC trust resulted in payment to anyone who was owed the money. In fact, there is no single instance in which the alleged REMIC trustee or the alleged REMIC trust even received one single penny at any time.

My conclusion: all alleged REMIC trust structures are basically trade names (fictitious names) for the investment bank. None of them ever see a penny of payments received from homeowners or their homes.

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

Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.
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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting 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. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

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.

 

“Payment History” is not the loan receivable account

The payment history is not the loan receivable account by definition and it is never presented as such. Failure to recognize this obscure fact often results in failure. But those who do understand it, raise their chances of a successful defense from unlikely to very likely.

A lawyer (Scott Stafne) shared with me a case that he is apparently working on.  This case is interesting because the lawyer for the homeowner has filed the final round of motions in the discovery cycle, which is a Motion in Limine — i.e., a motion to limit testimony from the sole robowitness expected to testify at trial. The basis of the motion is that the witness has no knowledge as to the past “servicers” and therefore cannot testify to any balance due.

But the courts have stretched themselves out on a limb to allow the foreclosure mills to introduce evidence that would never be permitted in any criminal trial and would only be permitted in civil trials if there was a proffer of corroborating evidence that would round out the obvious gaps in the testimony of the witness and the completeness of the exhibit.

BULLETIN: The payment history is not the loan receivable account by definition and it is never presented as such. The testimony in court nearly always skips the calculation of prior credits and debits (like disbursements to creditors) on the books of the servicer and the corresponding accounting entry on the books of a creditor. that is because there is no loan account receivable on the books of any party named as a creditor. And if it is not the loan account receivable, the Payment history is not evidence of the balance due as shown on the books of the creditor.

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The lawyers who say they are representing Chase Bank probably have never spoken with or communicated with anyone at Chase. But they are right in their argument. The current rules concerning business records create a loophole that the banks have been charging through since the inception of false claims of securitization of debt (“Loans’).

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What is interesting is that the case is now potentially set up to raise an objection, to wit: While the “witness” need not verify the records of previous parties regarding the “loan account”, it is the loan account that must be produced and not just a report on payments. The loan account would have a record of all credits and debits including disbursements to creditors if any. In the absence of a custodian testifying and proffering a copy of the loan account receivable — from the books and records of the creditor — (or the original accounting ledger) the balance cannot be known by the court.
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Like virtually all transactions with homeowners, this case presents a “private label” case founded on the securitization of the “loan.” At this point, very little money exchanges hands in any transaction with homeowners because the applicants for loans are steered to a common securitization infrastructure. This leads to reports of funding without any money actually exchanging hands assuming there is a prior mortgage.
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My point is this: the nature of securitization requires that the apparent loan account receivable be extinguished. This event generally occurs contemporaneously with the “closing” of the transaction.
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The securitization plan calls for the sale of securities that are NOT tied to ownership of any debt, note or mortgage and are not backed by any debt, note or mortgage.
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By freeing the sale of securities from the necessity of issuing securities representing shares of debts or pools of debt, the investment banks are able to sell multiple iterations of securities and secure a large yield spread premium that arbitrages the difference between the sales proceeds of securities and the transaction cost with homeowners, each time.
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By steering homeowners toward a common base securitization infrastructure, the cash paid out at the “closing” with the homeowner is vastly reduced, thus increasing the amount of the yield spread premium to nearly 100% of the amount of the fictitious transaction with the homeowner.
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The homeowners only know that the mortgage lien and note from one “transaction” were “satisfied.” They have no access to information that would inform them that each successive transaction creates a new tree of securitization representing nearly 100% profit for each successive round of sales of securities — this provides them with an average of 1200% return on each stated transaction with homeowners, wherein such transactions are repeated as many as 4-5 times.
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None of these receipts are credited to any loan account receivable on the accounting ledger of any person or business entity. The credits do not appear because there is no record of a loan account receivable and nobody at any of the companies or entities brought forward in foreclosure has any access to such information.
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Hence, the success of objections in court to the effect that the “Payment History” is not the loan account receivable that reveals the balance due, combined with the absence of any documents or person verifying that the company named as servicer is acting on behalf of a bank or business entity that claims to own the underlying obligation, frequently results in the objection sustained.
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And even with a continuance, the lawyer for the claimant cannot produce the loan account receivable because it does not exist. Accordingly, the lawyer cannot argue any actual or imminent financial damage caused by the behavior of the homeowner. And that fact undermines the authority of the court to even hear the case.
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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.
Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.

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Neil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting 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.

Getting a piece of the pie: How securitization can work FOR homeowners and not against them

There is no sale of the obligation, note or mortgage and so there is no securitization of debt. By splitting the attributes of behavior from the provisions of the executed documents and changing the description of the behavior, an investment bank could, in essence, sell the apparent debt an unlimited number of times without ever recording the sale of the debt, note or mortgage.

  • In most instances, the “closing” of a transaction with a homeowner results in the issuance of a note and mortgage promising payment that is not supported by any reciprocal consideration. In most of the other cases, the “closing” results in very little money paid by or on behalf of the homeowner despite what is stated on the settlement statement, which is a lie.

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Like everything in the world of securitization, you need to split the hairs. “Title” to the mortgage does not mean “ownership” of the mortgage, but the two terms are generally conflated as meaning the same thing. Any party that is the last party to receive an assignment of mortgage is the “owner” of “title” to that lien. There is no reasonable debate that can occur with respect to that black letter statement.

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And any owner of “title” to the mortgage (note the difference between title to the mortgage and title to the property) has the right to enforce that lien according to the terms of the instrument that was properly executed and recorded. But that right to enforce is subject to several statutory and common law restrictions.
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First common law for centuries holds that no transfer of a mortgage is valid, even if it is properly executed and recorded, if there is no concurrent transfer of ownership of the underlying obligation. This distinguishes the legal treatment of mortgages from other instruments like promissory notes.
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This is further reflected in the statutes of all U.S. jurisdictions that require the would-be enforcer to have paid value for the underlying obligation. Adoption of 9-203 UCC. And please note that, as the investment banks figured out, it is possible to pay value without paying the value for the underlying obligation and it is possible to have paid value for the mortgage lien without paying for and receiving ownership of the underlying obligation — especially if the parties intended it. (See “splitting”).
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In fact, splitting hairs further, it is possible to pay value for future behavior of humans relative to the provisions of written instruments without ever buying the obligation, note or mortgage. This is exactly what occurred in the current iteration of “securitization” of debt. There is no sale of the obligation, note or mortgage and so there is no securitization of debt.
  • By splitting the attributes of behavior from the provisions of the executed documents and changing the description of the behavior, an investment bank could, in essence, sell the apparent debt an unlimited number of times without ever recording the sale of the debt, note, or mortgage on any accounting ledger —even while such “sales” are reported and recorded in the public domain. 
  • In so doing the investment banks turned accounting on its head. And the big accounting firms let them do it — along with Federal agencies who knew better.
  • No legal document is valid unless it relates to something that actually occurred or is expected to occur in the real world.
  • The absence of any accounting ledger containing any unpaid loan account receivable due from the homeowner is proof of the absence of the debt — at least without court reformation of the entire transaction. 
  • The single biggest mistake of homeowners and lawyers is the failure to recognize these basic facts. As a result, even judges who are skeptical of the claim MUST conclude that the unpaid loan account receivable exists and that it is owed to the claimant who has experienced a default (financial loss) because they either said it or implied it through counsel who is protected by litigation immunity. 
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In terms of selling securities, regulated or unregulated, this was the holy grail of investment banking. Selling securities without ever having to turn over the proceeds of securities sales to a genuine issuer. They merely had to invent a name under which the securities were issued and then sell them. This could be done indefinitely with the same homeowner transaction or group of homeowner transactions. The group would be called a “pool” implying ownership but that label was misleading since nobody owned the underlying obligation — thus undermining the right to enforce the terms of the mortgage.
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The problem with this Wall Street strategy is that none of the securities issued by them are enforceable against or even currently relevant to the homeowner (according to the investment banks and their lawyers). The benefit is obvious. they can sell the transaction multiple times, calling it a “loan,” without ever recording the sale of the debt. But enforcement of the debt is entirely dependent upon the existence of an unpaid loan account receivable under current law. Since no such account exists under the current iteration of “securitization” the investment banks were required to fake it.
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They needed to manage to convince judges that a designee or nominee had the right to enforce even though it had no such right. They needed to do that because without enforcement, the label of “loan” would be exposed as fake. And the sales pitch to investors regarding the apparent (but never promised) ownership of a pool of loans would also be revealed as fake, thus undermining the principal goal of the entire scheme — the same of more securities (“certificates”). If transactions with homeowners were revealed to be something other than “standard loans” then the certificates would become unmarketable.
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As a consequence, events occurred on an epic scale that were incomprehensible to the casual observer. The investment banks did not have an unpaid loan account receivable to point to as a reference so they created the presumption of one. By inserting a “servicer”  who appeared to be processing the receipts and disbursements, they used the printed reports allegedly from the”servicer” to constitute a “payment history”.
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They then, through counsel, convinced judges to accept the “payment history” as a legal substitute for evidence of the loan account receivable. The absence of any evidence of actual receipt of payments or disbursement to a “creditor” has been overlooked by courts for twenty years.
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Thus far nearly all homeowners and most of the lawyers who are rarely employed to investigate the matter to render an opinion, have failed to understand this process precisely because there is no analog in their lives or education or experience.
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But for the few homeowners who challenge the premise that there is any outstanding unpaid loan account receivable, they usually succeed at trial or they are paid off in confidential settlements. The challenge to homeowners and their attorneys is to start at the first premise at the earliest possible time because the investment banks, acting through lawyers who have litigation immunity, are building a track record of correspondence and notices starting with the origination of the homeowner transaction.
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Thus by the time the matter gets to court, most homeowners have done nothing and their defenses look like last-minute hail Mary passes to avoid the “inevitable” foreclosures. 96% of all homeowners faced with false claims of rights to administer, collect or enforce the nonexistent loan account receivable simply leave or even clean up the property before leaving peaceably. In so doing they are leaving behind the extremely valuable property that has no effective lien on it other than the recording of a mortgage that was either invalid, to begin with, or became ineffective because there was no debt.
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In addition, homeowners are leaving a claim behind that also has high value and which the investment banks are always concerned about. The original transaction was in most cases without any fundamental element of a loan transaction other than the homeowners’ desire to obtain a loan. Except in the earliest transactions in the late 1990s and early 2000s, nearly all such transactions were steered toward a feeder of a common investment bank.
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Thus the appearance of payments made on behalf of the homeowner at “closing” was an illusion. The investment bank simply used two different originators. Other than cash-out refi’s no money at all was required except to pay all the intermediaries who played the parts of lenders, servicers, closing agents, real estate agents, mortgage brokers, title companies, etc. But each new “transaction” was the base or foundation for a new round of creation, issuance, sale, and trading of new certificates. The investment banks were literally printing money — or cash equivalents.
  • In most instances, the “closing” of a transaction with a homeowner results in the issuance of a note and mortgage promising payment that is not supported by any reciprocal consideration. In most of the other cases, the “closing” results in very little money paid by or on behalf of the homeowner despite what is stated on the settlement statement, which is a lie.
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By all standards and statutes, the fact that the transaction with the homeowner would not have taken place but for the sale of securities was required to be disclosed to the homeowner. And the claim that the transaction was a loan required the investment bank, acting through its many intermediaries and conduits, to disclose the true nature of the transactions and the compensation, bonuses, commissions, and profits that would be generated from securities sales. (TILA).
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The entire securities scheme was entirely dependent upon the homeowner signing papers that would be used to create an extra-legal virtual creditor (illegal) with an extra-legal (illegal) virtual loan account receivable rather than the legally required real creditor with a real loan account receivable. Homeowners never received the loan product they were requesting and they were never told about the valuable service they were performing for the investment banks. And therefore they never had an opportunity to bargain for a share of the venture into which they were being lured as the principal issuer of instruments that made the scheme possible.
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Thus each day, homeowners, believing that they received what they requested, are walking away from property that is legally owned by them free from the enforcement of the mortgage lien that is being used to chase them out. Each foreclosure results in new financial proceeds that are used to pay various intermediaries and conduits (including law firms and “Servicers”) with the investment banks retaining the balance. Although this cash flow should be categorized as revenue it is untaxed inasmuch as it is reported (or unreported) as the return of capital.
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There is nothing in this piece that is unknown to the Federal Reserve, the FDIC, the FTC, the SEC, or the Department of the Treasury. In the words of Timothy Geithner, attempting to justify the payment to banks rather than the bailout of homeowners, “The plane was on fire. We had to land the plane somewhere.”
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For proof of this narrative look no further than The TARP program and the many cases that have been won by homeowners. In all cases where the homeowner won, it was based upon a finding by the trial judge that the claimant had not produced sufficient evidence to back up its claim—- i.e., that it had an unpaid loan account receivable.
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But TARP is more instructive. First, it was announced that it was intended to cover losses from defaulting “loans.” Then Federal officials came to realize that the banks were not holding any loans. That produced some head-scratching. If there were no losses on “loans” then why did the banks need a bailout? Then Wall Street came up with a different scenario closer to the truth but still a lie — the “losses” were from the certificates (RMBS) that were issued. The same problem emerged. Investment banks were not buying certificates, they were selling them.
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But Wall Street was banging the drums for a bailout anyway. They had no losses but they wanted a vehicle by which they could stiff investors and settle for pennies on the dollar. And they wanted the proceeds of hedge bets and insurance they had purchased gambling on the collapse of the “market” (completely controlled by the investment banks) for the certificates.
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And so was born the Maiden Lane entities and the payments to AIG etc that resulted in companies like Goldman Sachs receiving tens of billions of dollars on a bet that they had made that the certificates they were creating would fail — a bet that was guaranteed by the tranche system. This could only work if “loans” were closed that could not possibly survive more than a few months or years. Wall Street banks thus encouraged the NINJA “loans” with “no documents” etc. It was a bid for a crash.
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The data on the highest quality “loans” were placed in the highest tranche but that tranche (under the control of the investment bank) bought “credit default swaps” that were disguised purchases of the data relating to the lowest tranche that contained data on the “loans” that were virtually guaranteed to fail.
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Insurers would not insure the lowest tranche. It was too obvious that the loan data would be reported as non-performing in the near or middle term. So the investment banks asked for insurance on the highest tranche and then created the scenario in which when the lowest tranche failed it took down the highest one thus triggering tens of billions in profits payable not to investors but to the investment banks. And such payments were not credited to the unpaid loan accounts receivable for any homeowner because no such account existed.
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And to think that all this occurred on the backs of homeowners who failed to receive a single disclosure for the existence of the securities scheme that completely changed the character of the transaction that they requested and that they reasonably believed they had received.
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So here is the remedy— from the law books — that ought to apply if you stop believing in the threats of armageddon regularly issued by the investment banks. Like Iceland and others, use court process to force the reformation of the homeowner contract to include the securitization portion of the deal, compensating the homeowner reasonably for the share of revenue that the homeowner should have received and compensation for the additional risks in dealing with counterparties who had no stake in the outcome of the transaction or who even had a negative stake in the outcome (If it failed, they win).

Why I Think Homeowners Are Entitled to Receive a Second Payment From Investment Banks

All homeowners who think they have a mortgage loan have received one payment at a “closing” — or a payment allegedly made on their behalf. For reasons explained elsewhere on this blog, such payments on their behalf are mostly fictional where the underlying investment bank is the same “director” of funds.
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The significance is that a second tree springs up in which the scheme described below is duplicated — with little or no cost to the investment banks. Each time the myth of “refinancing” is employed a new securitization tree springs up with dozens if not hundreds of branches.
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The purpose of this article is to explain my view that homeowners are entitled to share in the revenues and profits generated by securitization schemes — and why I think that now is the time to demand it in litigation.
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This claim has been filed early in the course of the mortgage meltdown. In one case the Federal judge held onto it for 14 months before finally ruling that the complaint should be dismissed. It led to my deposition being taken for 6 straight days, 9am-5PM as an expert witness. I was having heart problems at that time and they were clearly trying to wear me down. I did not relent. I did get some stents shortly afterward. 16 banks and 16 law firms each took their turn beating me up.
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I think we have reached a different era in which these claims should be pressed again. We know a lot more than we did in 2007-2008. Subsequent events proved the basic points, to wit: that the paper trail did not match up to reality, which is why the paper trail consists entirely of false, fabricated, forged, backdated, and robosigned documents.
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1. Homeowners enter into transactions that appear to be loans to purchase or refinance property at market value. Even if the transactions were actual loans, the determination of market value was legally the responsibility of the lender under TILA. Market value never increased, but prices were grossly inflated because Wall Street flooded the market with money that appeared to be cheap.
  • By lowering the apparent monthly cost, they made the actual price appear to be irrelevant — which is part of the essential element of deception.
  • The common homeowner relied upon the appraisals that were required by investment banks to be inflated in order to complete the loan transaction or the illusion of a loan transaction.
  • The only way securities brokerage firms (investment banks) could sell more and more unregulated securities is if more and more deals were signed by unsuspecting homeowners.
  • Thus the transaction enabled the homeowner to purchase or refinance a home under the mistaken belief that the home had a market value in excess of the principal amount of the “loan.”
  • All such “loans” were bad, from a market perspective.
  • It meant that the homeowners took an immediate loss because market prices were stratospherically higher than market values (i.e., indicating a high known probability that prices would fall precipitously).
  • It also meant that if there was a lender, it also was taking an immediate loss because it could not report the value of the loan at face value since the loan principal was far in excess of the value of the collateral.
  • In addition, all such loans were bad because the impact of this phenomenon was to create an immediate incentive to default on the scheduled “loan” payments apparently due from homeowners.
  • The obvious conclusion is that for everyone except the homeowner, this was not a loan transaction.
2. The transaction was not a loan. If it was a loan, nobody would have been party to it. There was no lending intent. there was no profit incentive to engage in lending under the circumstances described above. Like the “new economy” of the 1990s, the entire housing market consisted of the myth of a new force that would permanently push housing prices ever higher.
  • So what homeowners are missing out on is claiming a share of a pie that almost everyone else got paid.
  • The paper (document) deal basically has the homeowner execute a document allowing for a virtual creditor without a loan account balance in order to create, issue, and sell unregulated securities, regardless of what the homeowner intended and regardless of what the homeowner believed.
  • Because of the undisclosed structure of the deal, the “seller” was able to recover all money paid to the homeowner contemporaneously with the “closing” of the paper transaction. This is true even though nobody made credit entries to a nonexistent loan account.
  • Neither the loan account nor any of its components (underlying obligation, legal debt, note or mortgage) was ever sold in a financial transaction in the real world.
  • This accounts for the ability of the investment banks to conduct multiple virtual sales of hedge instruments or interests in the performance data for the virtual loan.
  • This enabled the investment bank to convert the usual 15% underwriting fee to at least a 1200% profit plus whatever they could get from homeowners in monthly payments and foreclosures.
  • With exception of the homeowner, every person and every business entity that was recruited to participate in the selling scheme to homeowners got paid extra exorbitant fees for their participation.
  • Those were fees that would never have been paid and could never have been paid but for the absurd profits from the so-called securitization scheme.
  • The homeowner provided a service that is undeniable: the homeowner accepted the concept of a virtual creditor even though no such allowance existed under any laws, rules or regulations thus enabling these fees and “trading profits” to be generated without any offsetting entry to any nonexistent loan account.
  • If homeowners had been given the opportunity to negotiate terms for their acceptance of a transaction in which there was no lender, no compliance with TILA, and no stake by a lender in the success of the transaction, homeowners would have had the opportunity to bargain for better terms and competition in the industry would have resulted in better terms (a share of the pie) being offered.
  • We already know that incentives were offered to pay closing costs, the first few months of the “loan” etc. Homeowners occupied a special place in the securitization scheme.
  • Without the cooperation of homeowners, there was no securitization scheme. Other players could have been replaced but not homeowners.
  • So their share of the pie would have been substantial if they had the opportunity (i.e., if there was disclosure) to bargain and better terms would have been offered if there was disclosure and transparency as required by law.
  • In my opinion, there are two benchmarks that should be used to determine how much the homeowner should have been paid: (1) the amount the homeowner received at closing, making such payment a fee and (2) 15% of the total revenue generated from the scheme in e exchange for the issuance of the paper documents (note and mortgage).
    • These two benchmarks overlap. But what it basically comes down to is that each homeowner should have received the benefit of the real bargain: around 15% of the total revenue from that deal which means that in a typical $200,000 loan, with at least $2.4 million generated in fees and trading profits, the homeowner should have received at least $360,000.
    • The $200,000 “loan” might survive upon proper reformation reflecting all the elements of the real deal, but there is still an extra $160,000 that was due to the homeowner at the time of signing.
    • Right now that $360,000 is being shared with dozens of people and companies involved in the securitization scheme and dozens of companies involved in virtual foreclosure schemes — i.e., foreclosures in which lawyers acting under litigation immunity argue or imply that a loan account exists and that they represent the party who owns it.
    • The only reason why homeowners are excluded from that is that it would reduce the size of bonuses received by the existing players, most of whom are doing nothing other than lending their name to a virtual scheme.
    • I said in 2007  that homeowners did not really owe any money to anyone from these paper transactions and that in fact, it was the reverse — homeowners are the ones who are owed money by the investment banks, plus interest from the date of closing.

I think the failure of homeowners to aggressively pursue this line of practical and legal reasoning is largely responsible for the continued drain (anchor) on the U.S. economy, which is still suffering from the unfortunate decisions of multiple administrations to save and increase the profits of investment banks at the cost to and detriment of common homeowners.

You Can Use This As a Template for How I Would Respond in a Discovery Dispute — Especially with Wells Fargo, Fannie Mae and Wachovia as the Originator

In a dispute between the attorney for the homeowner and the attorney for the alleged “lender”, there are a number of devices that are nearly universally applied across the country in order to ridicule and defeat the homeowner. The more you are aware of them, the better you will be prepared to deal with them.

Opposing counsel is instructed to accomplish several things (winning being the last of the things on his or her menu). First, the idea is to undermine the confidence of the homeowner and to undermine the confidence of the lawyer for the homeowner in any defense to the foreclosure. They do this by several tricks.

The main one is offering cash for keys. This says “You know we will win and you don’t have a chance, so get out now and we will pay you a couple of thousand dollars.” By doing that, they give the impression that the case has been evaluated and that the offer is somewhere within the realm of reasonability given the probable outcome. It isn’t and all my cases start this way — especially the ones where the judgment was entered for the homeowner.

The next one is offering modification which is basically saying “OK, if you recognize this transaction as real, we will offer you different terms.” The initial offer of different terms is virtually no change at all in the original terms but it gives hope that there will be a breather between now and when they return to foreclosure mode. It is about as attractive to the homeowner as the cash-for keys deal.

If you stick to your guns the offers will improve; most homeowners end up not resisting an offer that they think gives them enough relief that it isn’t worth proving or revealing that there is absolutely no corroborating evidence in the form of testimony on person knowledge, documents or receipts that support the apparent facial validity fo the documents being used to fabricate a claim against the homeowner on a non-existent loan account receivable.

Just be aware that acceptance of any offer in most instances is doing business with a thief in exchange for returning stolen property. From the point of view of the thief, he or she worked hard for that property and is entitled to compensation for the work performed. Anything less than that is a loss and if given the chance they will even sue for it. None of that is law but anyone can use legal process, even to make false claims. Such claims are deemed true unless properly contested.

So in a situation where the case is almost over the lawyer representing the homeowner is still hammering away at enforcing discovery.

The opposing lawyer is characterizing the effort as a desperate attempt to escape a legitimate debt and a using the lawyer and the homeowner of vexatious litigation —- i.e., using legal process improperly to gain an undeserved legal advantage. in other words, the attorney for the financial industry is accusing the homeowner, who has virtually no resources, of doing exactly what the foreclosure lawyer has done is continuing to do because he or she has the full backing of companies with infinitely deep pockets.

Discovery has been served and the response was objection and motions for protection. The homeowner’s lawyer filed a motion to compel compliance with the rules of discovery. The foreclosure lawyer filed a response saying that the homeowner was trying to relitigate the case, in a desperate attempt to avoid the inevitable loss of possession of the property using vexatious litigation strategies.

Here are my notes, with some edits:

I see several issues with the response filed by opposing counsel.
  1. I doubt that counsel has any written or oral authority to represent Fannie Mae that was granted by Fannie Mae.
    1. Fannie Mae would not hire the law firm unless they were making the direct rerpesentation ot the lawyer that they were in fact the owner of the properrty which title had been legally acquired. Since Fannie knows taht its name is being used in vexastious litigation against homeowners that reuslt in forecloure sales wherein the money proceeds are never paid to Fannie {same as REMIC trustees}, it would not make such a declaration and it would therefore never directly hire the law firm.
    2. And if push came to shove, I am virtually certain that anything represented in court to have been on behalf of Fannie Mae would be subject to Fannie claims of plausible deniability.
    3. But it is extremely difficult to raise this issue and get any traction directly. If there is a mediation Conference you may have an opportunity to ask about authority and then file a motion for sanctions for failure to appear. But I don’t think that this is possible at this stage in litigation.
  2. There is a growing national use of the attempt to squelch challenges by accusing the homeowner of vexatious litigation. These are actually being taken seriously by judges who are anxious to move cases off their docket. You need to be very careful about this issue. There is a recent case where the vexatious litigation issue was defeated by the homeowner without the assistance of counsel in California. But there are plenty of cases out there and which judges referred to a vexatious litigant which in all cases means a homeowner or the lawyer for the homeowner. Vexatious is anotehr word for annoying, so you need to reframe that. This idea exists because  of the presumption that the conclusion is already known and is inevitable. That conclusion is based upon a faulty and erroneous understanding of financial innovation from Wall Street that occurred 25 years ago.
  3. The pleadings filed by opposing counsel follow the playbook for the nation. It contains a recitation of facts or implied facts that only exist because of legal presumption arising from the apparent facial validity of documents that are uncorroborated, together with the effect of the presumptive validity of court orders that have previously been entered.
    1. Although we should always be careful about picking our battles, we should never accept or even suggest that we are accepting or ignoring the recitation of facts that are untrue and unsubstantiated.
  4. The first thing you need to deal with is that you are entitled to discovery and the discovery is intended to reveal rather than obscure relevant issues. But it is opposing cousnel’s instruction to obscure and refuse to reveal anything. As usual they will accuse the hoemowner of doing exactly what they are doing.
    1. It might be worthwhile to articulate that the defense narrative is based upon in-depth investigation, research, and analysis from experts in the securitization of debt — And that they have expressed the definite opinion that nearly everything assumed by opposing counsel in his opposition to the motion to compel discovery is not only uncorroborated but also untrue.
  5. The entire case presented against the homeowner rests completely on uncorroborated presumptions regarding the existence and transfer of an alleged obligation owed by the homeowner to Wells Fargo bank and then Fannie Mae.
  6. While there is ample evidence of a merger between Wells Fargo Bank and Wachovia, the originator of the transaction with the homeowner, there is no evidence whatsoever that Wachovia ever transferred any interest and the transaction that had been conducted with the defendant homeowner.
  7. The fact that there has been a merger does not mean that we know the terms of the merger or that anything relating to the defendant homeowner was included in the terms of the merger.
  8. There is nothing corroborating the presumption that Wachovia was the owner of a loan account receivable on accounting ledgers owned and maintained by Wachovia at the time of the merger, much less that Wachovia intended a transfer of ownership of the loan account to Wells Fargo bank.
  9. Indeed, the experts report that it is a common practice of Wells Fargo bank to assert its ownership over the loan account at the beginning of a foreclosure action and then to admit later that it is only a servicer.
  10. But its role as a servicer is also uncorroborated and probably untrue. The fact that it produces reports does not mean the data or the report was generated as a result of receipts and disbursements by Wells Fargo bank to or from any debtor or creditor.
  11. And obviously if Wells Fargo employees did not actually receive and disburse money relating to a loan account receivalbe, they could not have recorded such receipts or disbursements with personal knowledge. These are the issues that are being explored by the demand for discovery.
  12. If the defendant homeowners defense narrative is correct, then the fact that she had lost in litigation, is merely an assertion of conclusions previously reached by a court that had been misled by counsel.
  13. Opposing counsel seeks to argue that the defendant homeowner is not entitled to any answers because of the production of documents. But those are the precise documents that defendants experts assert as memorializing nonexistent transactions. Defendant hoemowner is merely testing them through disvovery. If they are not true they should never have been presented and a fraud has been committed upon the court. The foreclosure porocess, sale and now demand for possession must be dimsissed and vacated as the may be.
    1. The unwillingness of opposing cousnel to provide a direct response to direct discovery demands is a tacit admission that counsel is unable or unwilling to provide corroboration that transctions supposedly emorialized on the documents presented to the court and relied upon by the court
  14. Opposing counsel keeps referring to a “mortgage loan” when he should be referring to mortgage documents. Defendant homeowner admits to executing mortgage documents, but now, based upon factual investigation and research, denies the existence of a loan account at any time material to these proceedings.
    1. Opposing counsel seems to be aware of the problem and is attempting to curate by constantly referring to “the mortgage loan” rather than “The mortgage documents.”
  15. Experts for the defendant homeowner have revealed that Wachovia was primarily engaged in the origination of transactions with homeowners and perspective on motors for the exclusive purpose of supplying data to investment banks for the sale of securities. In this process, the loan account was retired because it was paid off contemporaneously with the closing of the transaction with the defendant homeowner.
    1. If the loan account was not retired in a securitization process then defendant homeowner concedes that the foreclosure was properly executed. But if it was retired then the foreclosure was not properly executed.
    2. The supposed presence of Fannie Mae gives rise to the presumption that the transction is and was always subject to claims arising out the issuance of securities, d epsite the fact that such securiteis offered now ownership in any alleged liability, obligation or debt owned by the homeowner.
      1. There is no evidence that Fannie ever paid value in exchange for ownership of the underlying obligation as requried by statute as a condition precedent to enforcement. This is also required for jurisdicition (see below).
  16. The discovery demanded by the defendant homeowner seeks to clarify this issue. If in fact the alleged obligation was purchased and sold on the secondary market or otherwise subject to a transaction in which no loan account survived on an accounting ledger of any company, it follows that nobody suffered any financial loss arising from ownership of such an account, despite various attempts to collect money from the defendant homeowner.
  17. Such a true fact pattern defeats the constitutional requirement for case and controversy and the jurisdiction of any court to hear the case much less dedicate anything. It also follows that no party claiming to represent or implying representation of a creditor owning the nonexistent loan account, could have any authority to declare any default, nor any authority to claim the right to administer, collect or enforce any alleged obligation arising from the nonexistent loan account.
  18. Opposing counsel is correct when he refers to the desperation of defendant homeowner. She is anxious to retain possession and to regain title to a homestead that was putatively taken based upon false and misleading representations made to her and the court. Anyone faced with losing their homestead or their property and their lifestyle would be desperate to foil the attempt. It is up tot he court to rasie cofndience that if the attemopt succeeds it will be to pay a party who will receive the proceeds of forced sale and then apply those sums to reduce the loan account receivable. This is not the case at bar.
  19. Defendant homeowner merely seeks answers to the most relevant questions that could possibly exist in a foreclosure action. Was there an existing loan account receivable maintained on the ledger of Wells Fargo bank or Fannie Mae at the time that the default was declared and the action for Foreclosure was commenced? If the answer is no, then the court was misled and entered orders and judgments that are voidable or subject to being reconsidered and vacated. If the answer is yes, then the dispute is over.
  20. Opposing counsel is concealing his contempt for court process by clever wording accusing and characterizing the attempts by the defendant homeowner to reveal the ruth as repeated attempts by the defendant homeowner to relitigate the case based on the same facts. This is not true.
    1. Defendant homeowner wants to reveal that there were no corroborated facts presented in support of the claims against her and that in fact no such facts could have been presented because they did not exist.
    2. She seeks to determine the nature and status of the transaction that was originated in 2006, and the claims arising from implied transfers that were never documented but are presently argued before this court.
    3. Not even teh merger agreement has been proffered (much less ordered and accepted) into evidence nor any testimony or affidavit from any witness with personal knowledge that the alleged merger effectively and intentionally transferred the ownership of the subject alleged transaction balance (i.e., the loan account receivable) from Wachovia to Wells Fargo.
  21. Opposing counsel absolutely refuses to simply say or even argue that Wells Fargo was the creditor who owned the loan account receivable or that FNMA had any financial interest in the transaction as owner of the transaction conducted with the defendant homeowner in 2006.
  22. Dodging the question does not make the question wrong. Nor does it imply that that answer is obvious. Opposing counsel is arguing a narrative that has no corroboration in any evidence consisting of testimony from any competent witness with personal knowledge, or any document that can survive any scrutiny when tested for validity as to representations of a transaction such as purchase and sale of the alleged underlying obligation as required by Article 9 §203 of the Uniform Commercial Code adopted verbatim under state statutes.
  23. The alleged possession of the promissory note is in fact, as opposing counsel has argued consistently, sufficient to obtain a money judgment on the note.
    1. It is also sufficient for the court to infer that the holder of the note is the owner of the underlying obligation for purposes of pleading in a foreclosure action.
    2. But in the proof of the matters asserted, it does not rise to the level of a prima facie case establishing such ownership when the court conducts a final hearing on the evidence.
      1. Possession of the note is an exception to the rule that the holder may obtain judgment without any financial loss to the note holder being stated or proven.
      2. In such cases, it is enough to establish that the maker of the note failed to make a scheduled payment.
    3. But the Article 3 UCC exception does not remove the basic underlying Article 9-203 condition precedent to enforcing a security isntrument (mortgage). The mortgage may not be enforced without paying value for the underlying obligation. The protection of homestead rights is inviolate and may (under current law) only be subject to forfeit in the event that the owner of the underlying obligation is the complaining party.
      1. In the case at bar, the complaining party neither (a) alleges nor proves such ownership of the underlying obligation nor (b) alleges or proves that anyone is or was a holder in due course — which would mean by definition that it had paid value for the underlying obligation (or at least the note)
      2. The legislature has spoken and this court has been led to believe that the statute has been satisfied. Upon solid information and belief nobody who has been represented as being the complaining party either did or could have satisfied the condition precedent in state law adopted Article 9 §203 UCC. This was concealed from the court and from the homeowner. If it isn’t true then no judgment, no sale, and no demand for possession should be granted.
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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.
Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.

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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting 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.

“Black Knight”: Banks Are Peddling A False National Narrative of Declining Foreclosures

I’m busy today so I can’t publish my usual long analytical article. But one thing that is constantly staring at me is the fact that the national press and news releases are in basic conflict with local media. And the fact that local media is going out of business isn’t helping.

Black Knight is a company whose size and reputation is entirely based upon preparation, presentation, and use of false documents and information that were forged, robosigned, and back-dated. Those were the days when it was called Lenders Processing Services in which DOCX was used to produce the false documents. Lorraine Browne, President of DOCX took one for the team and was the only person in the entire 2008 crash who went to jail. Neither DOCX nor other divisions of Lender Processing Systems were ever retired.

In fact, Black Knight is now expanded in some sense because it operates as the front for lockbox and electronic payments made in the name of companies claiming to be servicers. Concealed from homeowners is the fact that those payments are never actually received by the company claiming to be a servicer nor disbursed by that company to anyone claiming to be a creditor.

It is all a ruse. There is no creditor because there is no loan account receivable (LAR). There is no loan account receivable because the investment banks are selling what would have been the LAR multiple times without crediting any LAR — hence, no claim, no creditor. But because all of that is confusing, consumers continue to pay on nonexistent accounts that do not in fact exist and were never intended to be maintained. They pay and they are victims of “enforcement” because of a false national narrative about securitization.

Here is the simple truth: there is no securitization of debt. And all claims regarding eh existence of the LAR. and authority to enforce, administer to collect money for the LAR are false. That is not an opinion. It is a fact under current law that nobody can legally collect on a debt that does not exist — even if the named debtor believes the false claim that the LAR exists.

The “Payment History” is almost always accepted as a substitute for a copy of the actual loan account receivable —which until the last 25 years has ALWAYS been a basic staple of anyone who wanted to get a foreclosure judgment or sale — even if it was uncontested. If you didn’t produce that, along with an affidavit or testimony from an officer of the actual creditor or lender, you could not get the judgment or the sale. I personally witnessed myself and many other lawyers going to court with part of the foreclosure file missing and being told that the motion for summary judgment was denied — without any appearance or opposition from the homeowner. (I didn’t always represent the consumer).

But is the consortium of financial technology companies (FINTECH) including Black Knight that produces a report that is labeled as a “Payment History” because it is the FINTECH companies working for the investment banks that process that data. The report is pure hearsay that is not admissible in court but because homeowners and lawyers fail to test the report, they fail to reveal the fact that the “servicer” never was party to any transaction that it would then enter as data on its own bank accounts, accounting ledgers and books of record. None of that happened.

So the report is admitted as an exception to the hearsay rule thus allowing companies like Black Knight to carry water for the investment banks who want to collect money from payments of homeowners or on the sale of their homes so they can pay out bonuses without any attempt to account for the proceeds as a reduction in any loan account.

So it is in that position that Black Knight became a central repository of data about any transactions that are falsely defined in the national narrative as mortgage loans. That data is at best questionable and obviously false when tested in litigation. And because Black Knight functions almost exclusively at the behest and is subject to the influence and control of investment banks who are book-running securitization schemes, it reports what they tell Black Knight to report.

So you get articles like this:

https://nationalmortgageprofessional.com/news/black-knight-foreclosure-activity-nears-pre-pandemic-low

But lawyers like myself have our phones ringing off the hook now that foreclosures are spiking. And local media outlets that are still in existence, are accurately reporting the sharp spikes in new foreclosures, new evictions, and declarations of default. Both political parties are idiots, believing that foreclosure is no longer an issue. Tell that to the people who are losing their homes to fake creditors who are merely seeking profit. It’s another case of politicians being completely out of touch with realities of events on the ground — because they are listening to sources of information that come ONLY from Wall Street.

To its credit, the Biden Administration is attempting through the new legislation to preserve local media which tends to report facts and actual events rather than the current trend in national media to posit possibilities and then spend all their time analyzing what those possibilities might mean if they ever happened. Most investigative journalism is dead, which is why things have gone so wrong in this country.

Fact check: current events are not talking heads in boxes on TV. They’re real things happening to real people. That is “news.” The rest is pure speculation for purposes of producing revenues from the entertainment value of that speculation. It is now the national pastime to accept such speculation as news. It isn’t.

DID YOU LIKE THIS ARTICLE?

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

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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
CLICK HERE TO 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)
*
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CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

 

How Could This Not Be a Loan?

if the investment bank paid the homeowner as an incentive payment rather than as a loan, then there is no debt any more than salary or wages can later be called a loan. The fact that the consumer/homeowner thought or even wished it were otherwise makes no diffeerence. If I pay you money and you think it is a loan but I paid you for services you rendered, the substance of the transction is “fee for services” — not a loan — and there is no legal or ethical or moral obligation to pay it back. 

I think the one idea that sticks in the throat of nearly everyone is the idea that no money was loaned. That idea seems impossible and to many skeptics, it sounds like a snake-oil salesman trying to peddle what people want to hear. People know that they did really buy their home, and the majority of these transactions are refinancing, which means that the old “lender” got paid off, right?

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First of all, let’s agree on at least one thing. Virtually all installment payment agreements are now subject to claims of “securitization.” This means that behind every transaction is an investment bank that is arranging payments, only where necessary, and who is receiving the proceeds of consumer payments plus all of the revenue and profits from the sale and training of unregulated securities.
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If there is one thing missing from most articles analyzing consumer debt, it is the failure to recognize that a handful of investment banks are the center of all of those transactions and they all have reciprocal agreements. Those agreements are mostly in writing but difficult to obtain, and sometimes tacit. You don’t need to look any further than any pooling and servicing agreement to see the world’s largest banks all participating in the same venture. In prior years, this fact alone would’ve been sufficient for antitrust action.

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So here is my effort at explaining it. There are several categories of transactions that occur with homeowners.
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  1.  The homeowner is buying a new home from a developer or contractor.
  2.  The homeowner is buying a home from the existing homeowner.
  3.  The homeowner is buying a home from a party or business entity that asserts ownership after foreclosure on the previous homeowner.
  4. The homeowner is refinancing the new home they purchased from a developer or contractor.
  5. The homeowner is refinancing a home they bought from a prior homeowner.
  6. The homeowner is refinancing a home they bought from a foreclosure buyer.
  7. The homeowner refinances by entering into a forbearance agreement.
  8. The homeowner refinances by entering into a modification agreement.
  9.  Securitization of data and attributes of homeowner’s promise to make scheduled payments — no relevant transaction because there was no sale of the underlying obligation, legal debt, note or mortgage (or deed of trust). Since law requires that sale for enforcement by successors, the foreclosure players fake the documents.
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Let’s define our terms.
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“Homeowner” means in this case someone who is looking to buy a home or who is looking to change their transaction.
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“Refinance” means that the homeowner is a party to some transaction and/or documentation that changes the terms of the homeowner’s prior promise to make scheduled payments.
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“Money source” means the investment bank that (a) borrowed money from a third party bank like Credit Suisse, (b) used the borrowed funds to make payments to or on behalf of the homeowner. (It pays back the loan to its lender (and co-underwriter of certificates) through sales of certificates to investors promising scheduled payments, without maturity, collateral, or a guarantee of payment.)
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1. PURCHASE OF NEW HOME FROM DEVELOPER: generally speaking, this is the only transaction that is in substance but it appears to be in form. Money is actually paid to the developer.
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  • The money trail for this transaction looks something like this: LENDER—>MONEY SOURCE/INVESTMENT BANK—>SUBSIDIARY OR CONTROLLED AFFILIATE OF MONEY SOURCE—>CLOSING AGENT—>DEVELOPER.
  • The paper trail (i.e. contracts) for this transaction looks something like this: MONEY SOURCE/INVESTMENT BANK—>AGGREGATOR (like Countrywide Home Loans)—>(a) Assignment and Assumption Agreement with Originators (like Quicken Loans) and (b) Indemnification Agreement with title insurers—>Mortgage Broker—>Mortgage salesman—>Homeowner execution of promise to pay and collateral for making scheduled payments to Originators.
  • Bottom Line: The homeowner is getting money, courtesy of an investment bank that is NOT intending to make a loan or be governed by any lending laws.
    • The homeowner is making a promise to pay the originator who did not lend any money or make any payments to or on behalf of the homeowner.
    • The only party identified as a lender is the originator who did not make a loan.
    • The only party that arranged for payment disclaims any role of being a lender.
    • The payment made on the homeowner’s behalf was an incentive payment designed to procure the signature of the homeowner on a note and mortgage (or deed of trust).
      • Legally since there was no lending intent by either the named “lender” or the Money Source, there is either no contract at all or no loan, since there was no meeting of the minds.
      • If the transaction is not rescinded the deal needs to be reformed with a court determining what incentive payment the homeowner should have received from the scheme to issue, sell and trade unregulated securities.
      • But if the homeowner tacitly or expressly asserts or agrees or admits it was a loan, then for all purposes in court, it will be treated as a loan not subject to reformation.
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2. PURCHASE OF NEW HOME FROM PRIOR HOMEOWNER: generally speaking most of these transactions do not result in the payment of money to any prior lender. But the excess due to the seller is paid in the same way that money is paid where the homeowner purchases a home from a developer.
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  • Most of such transactions are steered to originators and aggregators who represent the money source (investment bank) who was involved in the financial transaction with the prior homeowner.
  • Because the proceeds of the “new financing” or “purchase money mortgage” would be paid to the same investment bank, no money exchanges hands with respect to the “pay off” of the prior note and mortgage.
  • The confusing point for most lawyers and homeowners is that there is nothing illegal about a bank holding a prior mortgage lien. There is nothing illegal about the same bank doing business with the next owner. And there is nothing illegal about the bank not issuing a check to itself when the owners change.
    • But that is not what is happening. “The bank” does not exist. The money source (investment bank) is not carrying the homeowner’s promise to pay scheduled payments as an asset and therefore is not “the bank.”
    • For legal purposes, the test is simply whether or not the investment bank has suffered a loss as a result of the refusal or failure of the homeowner to make a scheduled payment.
    • Or, phrased differently, the question from the beginning is whether or not the investment bank has the source of money ever excepted any risk of loss arising from the value of a loan account receivable.
    • The answer to both questions is in the negative. In dozens of cases across the country, lawyers have been asked to identify the creditor and have admitted that they cannot do so.
    • The only logical conclusion is that the transaction was never intended to be a loan (with the exception of the homeowner who did intend to get a loan, but did not receive it).
    • The investment banks wanted the homeowner to believe they were getting a loan instead of an incentive payment to execute a promise to make scheduled payments. They did not want the homeowner to know that they were receiving an incentive payment. Disclosure of that fact is an absolute requirement under the law. If they had disclosed the true nature of the transaction, they would have been subject to bargaining and competition.
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3. PURCHASE OF NEW HOME FROM FORECLOSURE BUYER: generally speaking, relative to any current financing arrangement, no money exchanges hands on these deals because and substance, the foreclosure buyer generally is receiving some sort of protection or indemnification from a title company that has been to issue insurance on a transaction that cannot pass the test of marketability or clear title — mostly because of the above factors. The anecdotal evidence on thousands of cases reviewed by me strongly indicates that nearly every foreclosure buyer is in substance a placeholder or nominee for the investment bank. By flipping the paper title, the foreclosure buyer receives a “profit” that is in substance a fee for legitimizing the foreclosure. That profit or fee is funded by the investment bank.
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4. REFINANCING: generally speaking, all transactions that carry the label of “refinancing” are false transactions. Because securitization does not involve the purchase and sale of any underlying obligation, legal debt, note, or mortgage, each such transaction represents a new opportunity to create a new securitization infrastructure using the same transaction. Investment banks use every means of their disposal to encourage “refinancing” since it is the source of most of their new sales of certificates. The only money paid out is the excess, after fees, over the amount previously declared as “principal.” But this “principal” is not carried on the accounting ledger of any company or any person as an asset, nor is there any reserve for bad debt (simply because there is no risk of loss).
  • Forbearance is a form of “refinancing” because it accomplishes a number of things for the investment bank. First, obtain a signature from the homeowner that ratified or admits that the previous paperwork and financial transactions were all valid. Second, it essentially removes the placeholder originator from the paper trail. Third, it installs a new placeholder name and obtains consent from the homeowner. Fourth, it establishes a company claimed to be the servicer as the legitimate recipient of funds or proceeds from homeowner payments or the sale or foreclosure of the collateral (i.e., the home).
  • Modification is the same as forbearance: It introduces new parties under coercion. Homeowners sign these documents with total strangers mostly out of sheer panic. What they’re doing is waiving rights and creating tracks in the sand that are opposite to their financial interest and well-being.
Given all of that, many people ask me why I have consented or approved of a homeowner entering into a new agreement with players who are conducting an illegal scheme. The answer is simple and the investment bankers know the answer: they have the money to make a homeowner’s life miserable and they are not subjected to vigorous enforcement by regulators and law enforcement.
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The entire burden of resisting this massive scheme of “Financial weapons of mass destruction” Falls on each homeowner, one at a time. It takes considerable time, money, and resources to resist.
So when the opportunity comes to settle the matter on favorable terms that reduce the payment, interest rate, and principal, and the homeowner lacks the will or the resources to resist, the only choice left is to settle with the perpetrators who put them in a bad position and who are cheating each homeowner out of their rightful share of the securitizations scheme.
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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.
Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.

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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE TO ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
Please visit www.lendinglies.com for more information.

How Likely Is It That a Homeowner Will Win a Foreclosure Case?

The answer to this question depends upon the homeowner — not the judge.
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If the homeowner rigorously, aggressively and persistently seeks enforcement of the rules of civil procedure, the rules of discovery, the rules of evidence and enforcement of court orders, the chances of quite good that the homeowner role reach a very favorable result.
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If the homeowner attempts to make a claim or state and affirmative defense that requires proof of malfeasance by the opposition (or anyone else), probability of failure is extremely high.
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The general consensus has accepted the proposition set forth in the national narrative promulgated by investment banks. Therefore nearly everyone — including the homeowner and the attorney for the homeowner at times — has accepted the label of “loan” as being the equivalent of an existing loan account receivable which obviously is enforceable at law and in equity (foreclosure of the mortgage).
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Having adopted the narrative and fictitious Terminology of Wall Street, everyone has also therefore accepted the labels of “servicer,” “trust,” “trustee,” etc. This in turn has resulted in the acceptance of the production of a “payment history” report in lieu of producing a copy of the loan account receivable. The question of whether or not the lawyers are representing a client who owns a loan account receivable that is due from you is avoided.
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The above summary is the backdrop for all litigation involving Foreclosure in both judicial and non-judicial states. It is so widely accepted by nearly everyone involved, and so often admitted (tacitly or directly) that judges usually regard defenses and claims from homeowners as being technical nuisances instead of a direct attempt at stopping fraud. That is their initial impression and there is nothing that can change that initial impression.
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But after their initial impression, the litigation begins and the judge is constrained to follow the rules of court.
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All of the cases that I have won outright or settled on terms that people might think are ridiculously beneficial to the homeowner has involved a very skeptical judge who change their mind during the course of litigation. I will also say that as a general rule, the older and more experienced judges will tend to be even more biased at the beginning of the case but will strictly apply the rules of court during litigation.
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The key to winning or losing is in the rules of procedure, the rules of discovery, and the rules of evidence. The defense strategy that tends to work most of the time is one in which the lawyer representing the homeowner continually attacks the ability of the foreclosure lawyer to produce any corroborating evidence for the conclusions that are alleged by the foreclosure complaint or presumed from the filing of apparently facially valid documents to support a non-judicial foreclosure.
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As it turns out, an aggressive and persistent strategy based on demonstrating the unwillingness or inability of opposing counsel to comply with the rules of procedure, rules of discovery, the rules of evidence and court will usually successfully reframe the case from the initial erroneous first impression of “bank versus deadbeat homeowner” to “judge versus recalcitrant foreclosure attorney.” When that happens, and it usually does, the judge always wins and the result is favorable to the homeowner.
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The way that lawyers and pro se litigants have undermined the strategy, is by attempting to go further than simply defeating the action against them. They attempt to prove fraud or other malfeasance, despite their inability to produce any evidence that would prove the required legal elements of such claims. In doing so, they shift the burden of proof from the foreclosure attorney to themselves. And they lift the burden of proof on their own claims from simply more likely than not to clear and convincing.
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Since we already know that nobody from the “Dark Side” is going to give you any information that will prove or corroborate anything you want to say, it is a fool’s errand to allege a claim or affirmative defense and that you will never be able to prove. My experience is that these cases can be defeated most of the time if the homeowner sticks with the goal of simply defeating the claim. But as soon as they step out of that lane, they are headed for failure.

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And of course, in order to pursue a successful strategy, you at least need to pretend that you believe that there is no loan account receivable and therefore nothing to enforce. And if you’ve gotten to the point where I am, you will be completely confident that that is true. I have reviewed over 10,000 cases. There has not been one instance in which a loan account receivable was ever produced.
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The substitution of a payment history report generated from third-party vendors has never been a legal substitute for producing the loan account receivable, and an acknowledgment or attestation from an officer of the named claimant that the loan account receivable belongs to (is owned by) that named claimant. In all the cases that I have reviewed no such acknowledgment or attestation has ever been made. All of those functions are produced under the name of a company that is claimed to be a “servicer” but which does nothing in connection with the receipt and disbursement of any money.
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PRACTICE NOTE FOR LAWYERS: The successful argument for legal standing at the commencement of the case is NOT proof of legal standing. And the argument regarding Article 3 (UCC) enforcement of negotiable instruments is not a substitute for normal legal standing required by Article 9-203 for enforcement of security instruments (mortgages and deeds of trust).
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The object is to show that the foreclosure mill is unwilling or unable to produce the loan account receivable or any acknowledgment or attestation or testimony from an officer of the named claimant. You can show that because there is no loan account receivable and there is no officer willing to perjure themselves. there are no trust accounts managed by REMIC trustees, and even if there were, they would not, do not, and could not contain a loan account receivable due from the homeowner.
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The naming of a company as a “servicer” does not mean it handles receipts, disbursements or accounting for any movement of money. Such a company will be presented as the authorized representative of the named claimant but the named claimant never appears in court. Once the foreclosure mill fails or refuses to comply with discovery demands, their claim that the “servicer” is authorized to act for the claimant also fails because it is not relevant. If the named claimant has no ability to support a claim, then the agency of the “servicer” is irrelevant. The claim lacks foundation.
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DID YOU LIKE THIS ARTICLE?

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

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

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

The fallacy of construing negative decisions as bad decisions for homeowners

It’s not the job of courts to save litigants from their own admissions. 

Here is a simple rule: if you admit the existence of the loan account receivable and you admit the rights of the servicer and the currently named claimant, you have no viable basis to challenge standing or enforceability. “Yes, but” doesn’t count in court.

Here is the other rule: if you challenge the existence of the loan account receivable and deny the rights of the servicer and the currently named claimant consistently, starting with the first notices and correspondence that you receive after the apparent “closing” the transaction, AND if you aggressively pursue statutory and discovery demands, your opposition will be unable to prove a case against you. 

Amongst the people out there who would like to see better decisions for homeowners in the courts, there are those who continue to point to decisions against the homeowner at the trial court level, the intermediate appellate level, and even at the supreme court level. And in keeping with the high level of conspiracy thinking, many people assume that such decisions are the result of corruption, and then come to the conclusion that the government is corrupt.

I suggest taking a different view. The decisions in court are perfectly rational and proper if you accept the facts that have been recited. Given those facts, the courts had no choice but to rule against the homeowner.

I get in trouble for saying this, I think the problem is with the homeowners and not with the courts. And specifically, I think the problem is that the homeowners believe in the national narrative and labels used by the banks. Virtually all homeowners believe that they established a loan transaction merely because they applied for one.

Virtually all homeowners believe that notices of transfer of ownership and servicing are true. And virtually all homeowners will admit those facts in telephone conversations, correspondence and pleadings when they go to court.

Here is a simple rule: if you admit the existence of the loan account receivable and you admit the rights of the servicer and the currently named claimant, you have no viable basis to challenge standing or enforceability.

Here is an exchange I just had with a client and her lawyer regarding ar recent decision from the 3rd DCA in Florida. Yes, it is annoying, but if I was sitting on that court I would have ruled the same way. It’s not the job of courts to save litigants from their own admissions.

This case is another good example of starting off on the wrong foot and then compounding the error. The trial court and the appellate court were proceeding based upon an assumption of facts, none of which were true. But the homeowner had admitted those facts and the expert for the homeowner had reinforced the admission. It is virtually impossible that the named originator of the transaction was an originator or lender. It was merely a placeholder for the purpose of creating the illusion of a loan transaction. It did not provide any funds to the homeowner.

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The initial recitation by the court that this was a straightforward foreclosure action is also completely wrong. But given the fact as they were recited by the appellate court, their decision was completely correct.
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I obviously don’t know what happened in the trial court, but the judge signed an unusual order. This is frequently caused by the judge having a stack of proposed orders in front of him or her combined with the desire to get out of the office.
The bottom line is that none of these cases are “straightforward foreclosures.” In fact, when you scratch the surface, they are not foreclosures until the judge signs a final judgment of foreclosure.
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At the beginning (i.e., at time of filing), they are mere attempts to abuse the legal process for profit, masquerading as some recognized cause of action but without any true facts or authentic, valid documents to back up their claim. They (the law firms) win most of the time because nobody has the courage to challenge the basic claim and thus they don’t use available discovery rights to defeat the ability of the claimant to prove a case. The main mistake, therefore, is in thinking that because the case has been pleaded in a satisfactory (or apparently satisfactory) manner, that the basic elements of the allegations are true., They are not.

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And the law firms, proceeding under both plausible deniability and litigation immunity, or making allegations about the existence of a client and a claim that are completely false. The law firm in most cases (nearly all) has had no contact with the named plaintiff, beneficiary, or claimant and maintains no contractual relationship for representation in court. In fact, if you demand acknowledgment from an officer of the named claimant, you will never get it — because that’s not part of the deal for allowing their names to be used as the plaintiff, beneficiary, or claimant in a judicial, non-judicial, or bankruptcy proceeding.

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DID YOU LIKE THIS ARTICLE?

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

CLICK TO DONATE

Click

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

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
CLICK HERE TO 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.

Those letters from the lawyer for the “servicer”: PHH

It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so — nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

In fact it is not true that PHH will receive any money. They won’t and they don’t. All payments are  directed through lockbox contracts and FINTECH companies into accounts that may bear the name of a company claiming to be a serrvicer but which are owned by someone else.

This is why I keep successfully annoying opposing counsel about the payment history they wish to introduce as a business record exception to the rule against the use of hearsay evidence.

Since none of the data was entered by anyone employed by the company that is claimed to be the servicer, the payment history is neither a business record that is an exception to the rule against hearsay, nor an acceptable substitute for what has always been required: the accounting ledger showing the history (cradle to grave) of the loan account receivable. In fact, the payment history is not even a partially acceptable substitute for that ledger because it does not reflect payments to creditors.

PHH, Ocwen and Reverse Mortgage Solutions (among others) are all part of the same organization. In a recent dialogue between my client and the lawyer for PHH, he stated that payment to PHH will cause the lien to be released. This got me started thinking about the way he worded that. Normally the lawyer would write something like “Payment to PHH, as agent for XYZ Creditor, will satisfy the debt, note and mortgage. Upon receipt of such payment,m the lien will be released.”

Note that this was a representation from the lawyer not PHH and not any creditor. And the lawyer is protected by a form of immunity as long as he is not intentionally misstating the facts knowing that they’re false. If PHH said that, it could be the basis for a fraud action.  It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

It is true that someone will execute a release of the lien. What is not true is that they have any authority to do so nor is it true that PHH has any right to receive any money, whether it is a monthly payment or a payoff.

So this is what I said in a comment to the receipt of an email displaying the comments of the lawyer claiming to represent “somebody” which we presume is a claim to represent PHH which in turn is a claim to represent some company claiming to be a creditor merely because they have some paperwork — and not because they ever entered into any purchase and sale transaction in which they bought the underlying obligation, the legal debt, note or mortgage:

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Of course, what is interesting is that the lawyer is saying that payment to PHH will cause the lien to be released. But it doesn’t say who will release it. It’s leaving the rest to your imagination. Any lien release under this scenario would be executed by a person working for a company that has no legal authority to sign it.

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The way it is set up, the person is authorized by the company he works for, but the company lacks the authority to authorize him to sign it. The company, in turn, claims authority by virtue of some contract or document in which the counterparty grants the company the authority. But the grantor also lacks authority.

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The idea here is to get you to take your eye off the ball. The ball is always the underlying obligation. It is the legal owner of the obligation (i.e., the one who purchased it for value) who has the sole authority to grant powers to anyone else over the administration, collection, and enforcement of the underlying obligation.
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It is only when you take your eye off the ball that these companies get away with claiming the status of “holder” of the note and owner of the mortgage. The holder of the note is defined as a party who has physical possession of the note (or the right to physical possession of the note) together with the authority to enforce it.
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These players have been successfully leveraging the idea that physical possession of the promissory note, or the right to physical possession of the promissory note is all that they need in order to establish the legal presumption that they have the authority to enforce it. That has never been true. But in the absence of a persistent and aggressive challenge from the alleged debtor, these parties have been able to steamroll over all weak objections.
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Further, leveraging one presumption into another, they have been successful in raising the additional presumption that transfer of the note to a “holder” is the legal equivalent of transferring legal title to the underlying obligation, thus satisfying the requirement for enforcement that is contained in Article 9–203 of the Uniform Commercial Code. None of that is true; but all of it seems to be true.
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The bottom line is that they know there is no loan account receivable and therefore no legal owner of the underlying obligation. They have done that intentionally for the benefit of the investment banks that set up this scheme. But it has not been difficult for Wall Street to convince the rest of the world that all of these transactions are, in substance, just what they appear to be. Getting the courts, law enforcement, regulators, and even homeowners and their lawyers to look beyond the appearance has been the principal impediment to defeating the scheme.
DID YOU LIKE THIS ARTICLE?

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

CLICK TO DONATE

Click

Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting 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 TO 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.

EARLY BIRD DISCOUNT ON WEBINAR ENDS 9/22/21

APPROVED FOR 2.5 CLE CREDITS APPROVED BY THE FLORIDA BAR

HOMEOWNER ATTENDANCE PERMITTED

Live and On-Demand Available

EARLY BIRD DISCOUNT ENDS 9/22/21

  • What to Look for in Examining an Assignment

  • How to Successfully Litigate the Issues

  • How lawyers can make money in this niche

APON and GTC Honors, Inc. an approved host provider for CLE (for lawyers) credits in Florida and 26 other states that allow reciprocal credits for licensed attorneys announce that they are producing a seminar presented by Neil F Garfield, MBA, JD , trial lawyer for nearly 45 years and investment banker for 50 years.

Only lawyers will be able to ask questions. It will be followed up with a conference call 2 weeks after the presentation. The presentation will be live on 9/29/21 at 3 PM EDT or on-demand.

Included in the curriculum will be business plan tips for lawyers entering what will be an exciting opportunity to win cases and profit. 

Examination and Challenge

of Assignments of Mortgage

WEDNESDAY, SEPTEMBER 29, 2021

3PM EDT

2.5 CLE CREDITS

Click here to register

for Live Attendance or

On-Demand After Live Presentation is Completed

Curriculum:

  • The Coming Challenge to Lawyers: Another Foreclosure Tidal Wave
  • The Ethics of Foreclosure Defense and Foreclosure Advice.
  • Why Make the Challenge?
  • How to Examine the Assignment of Assets Like Mortgage Liens.
  • How to prevent evidence from coming in
  • How to get admitted evidence out
  • How to undermine the admitted evidence 
  • What to Look for in Examining an Assignment:
    • Timing
    • Complete names
    • Verified names
    • Direct signatures
    • Indirect/derivative signatures
    • Robosigning
    • Dates
    • MERS
    • Recital of consideration
    • Identified subject (asset) of transfer
    • Warranty of title to asset
    • Notices from creditor
    • Derivative notices from creditor
    • Notices from “servicer”
  • How to Successfully Litigate the Issues:
    • Admissions Against Interests
    • Motion to Dismiss
    • Discovery and Definitions
    • Motion for Summary Judgment
    • BUSINESS RECORD EXCEPTION TO HEARSAY RULE
    • Motion to Compel Discovery
    • Motion for Sanctions
    • Motion in Limine
    • Objections at Trial and Cross-examination
  • How lawyers can make money in this niche
  • Q&A for lawyers only
  • Follow up conference call 2 weeks later 

Virtually all foreclosures today are based on written recorded instruments purporting to transfer title to the mortgage lien from one legal person to another.

The questions for today are different from the questions that were present when the forms, rules and procedures were developed before present claims of securitization of debt.

Neil F Garfield, a Florida attorney and investment banker, presents the results of 16 years of research, analysis, trial appearances, expert witness presentations, and CLE presentations. In this modified course presentation, he focuses on the duties of lawyers who use or oppose assignments of mortgage, and the methods that can be used to perform expert analysis.

  • Sponsor: APON
  • Host/Provider: GTC Honors, Inc.
  • Course Number 2106918N
  • Provider # 1030277
  • 2.5 Credits for Continuing Legal Education
  • Level: Intermediate
  • Approval Period: 09/22/2021 – 03/31/2023
  • Presenter: Neil F Garfield
  • Florida Bar Number 229318

GTC Honors, Inc. the Florida approved course provider, is a Florida Corporation, Publisher of the Livinglies.me blog and thousands of articles, treatises and guides to successfully defend foreclosure cases in the era of self-serving declarations about the securitization of debt.

CLICK HERE TO REGISTER FOR APON SPONSORED WEBINAR: Assignments of Mortgage!

Attack the “Successors”

In analyzing the paperwork in front of you, make sure you read every word and do not accept anything said at face value. A popular ruse by foreclosure mills is the use of the word “successor.” I have been saying that this word is used as a cover-up for “we don’t have title to the debt, note or mortgage.” That means they have no loss connected with a claimed scheduled payment that was not received by a “Servicer” who had no right to receive it in the first place.

Hat tip to Gary Dubin, Esq. and Shelley Erickson.

If they have no loss, they have no claim. You don’t have a claim payable to you if you simply know that your neighbor has skipped a payment to someone. You don’t have the right to declare a default. There could be numerous reasons why the payments stopped that are none of your business. In that scenario, any action undertaken as if you did have the claim would be illegal in both the criminal and civil arenas. Such actions would include notice of substitution of trustee, a notice of default, a notice of sale, summons and complaint, etc. The practical problem is that the longer you wait to contest such actions, the more it seems like the perpetrator does have a claim.

Very often, you will see “Successor” used when it makes no sense if you even give it a moment’s thought. For example, if U.S. Bank is recited as successor to Bank of America, that is literally impossible. U.S. Bank did not buy, acquire or purchase Bank of America. They are referring, of course, to the “sale” of the position of “trustee” (without any legal trust powers) from Bank of America to U.S. Bank after Bank of America acquired LaSalle Bank, which is after LaSalle Bank had been effectively acquired by the owners of ABN AMRO, who had merged with Citi.

The key question is whether the position of a trustee if it actually exists, could ever be sold by the trustee without the advice and consent of the beneficiaries and/or the trustor/settlor. Of course, if that was alleged, i.e., that U.S. Bank had acquired the rights to be trustee through purchase, it would then need to disclose the content of the agreement of purchase and sale, and that alone would involve showing the consent of beneficiaries.

Because of the erroneous assumption/presumption that the beneficiaries of a REMIC trust are the investors, it is assumed that they must have consented. But the real beneficiaries are shown in the actual trust agreement (not the PSA most of which is a statement of future intention and not past events).

The real beneficiaries are securities brokerage firms (“investment banks”) which would, in turn, reveal that the investment banks are the primary parties in control of administration, collection, and enforcement — despite the fact that the investment banks retained no financial stake in the outcome of any transaction that was labeled as a loan.

People ask me whether there are cases supporting my analysis. there are hundreds of them, but they are rarely reviewed, much less used, by any homeowner or lawyer. Here is one such example from 2019 that has never been overruled, citing many other cases:

Certo v. Bank of N.Y. Mellon, 268 So. 3d 901, 903 (Fla. Dist. Ct. App. 2019) (“On the other hand, it is insufficient for the plaintiff to rely on its acquisition of the other entity. See Fielding v. PNC Bank Nat’l Ass’n , 239 So.3d 140, 142-43 (Fla. 5th DCA 2018) ; Kyser v. Bank of Am., N.A. , 186 So.3d 58, 61 (Fla. 1st DCA 2016) (despite testimony of merger, witness gave no testimony as to what assets exactly were acquired); Fiorito v. JP Morgan Chase Bank, Nat’l Ass’n , 174 So.3d 519, 520-21 (Fla. 4th DCA 2015) (testimony one entity “took over” another is not sufficient); Lamb v. Nationstar Mortg., LLC , 174 So.3d 1039, 1041 (Fla. 4th DCA 2015) (listing cases). Similarly, listing party status as “successor by merger” or claiming a title is not sufficient; a plaintiff must support its claim by evidence. See Buckingham v. Bank of Am., N.A. , 230 So.3d 923, 924-25 (Fla. 2d DCA 2017) (holding words “successor by merger” were insufficient to “establish the merger, let alone that the [plaintiff] acquired all of [the successor’s] assets”); DiGiovanni v. Deutsche Bank Nat’l Trust Co. , 226 So.3d 984, 988-89 (Fla. 2d DCA 2017) (finding no standing where Deutsche presented no evidence “Bankers Trust had been renamed Deutsche Bank”); Murray v. HSBC Bank USA , 157 So.3d 355, 358-59 (Fla. 4th DCA 2015) (explaining “Option One California” was not “Option One Mortgage Corporation”); Verizzo v. Bank of N.Y. , 28 So.3d 976, 977, 978 (Fla. 2d DCA 2010) (explaining plaintiff listing itself as “successor trustee” was insufficient).”)

Certo v. Bank of N.Y. Mellon, 268 So. 3d 901, 903 (Fla. Dist. Ct. App. 2019) (“The trouble here, similar to the trouble in Conley , is Mellon’s link to Bank of NY and Bank of NY’s link to JP Morgan. Because the final special indorsement is to JP Morgan, Mellon needed to evidence how it obtained the Note or interest. It claims to have it because Bank of NY is a successor to JP Morgan and Mellon is the new Bank of NY. However, the record does not establish either of those necessary links.”)

The bottom line here is that there is no succession regardless of how many times they assert it. Attacking the pleadings, motions, and exhibits with your own motions, answers, affirmative defenses and potential counterclaims is probably a good tactical response to the assertion of this type of lie perpetrators use in the courts every day. Bernie Madoff got away with his Ponzi scheme for decades. It was in most ways identical to what the investment banks have done with what they called “residential lending.”
The banks called it “securitization” without ever selling a single loan to investors or any part thereof. Madoff called it options trading without ever trading a single option. It was all based upon the “hidden magic” and “genius” of some secret formula that nobody else could access. Compare it yourself. Madoff’s scheme, now exposed, reveals what was really happening with homeowner transactions, investor transactions, and “foreclosures” of nonexistent claims.
THE BIG QUESTION IS WHERE ARE THE REGULATORS? THEY MISSED IT WITH MADOFF DESPITE CLEAR SIGNS OF WRONGDOING AND THEY ARE DOING IT AGAIN WITH INVESTMENT BANKS TOUTING NONEXISTENT SECURITIZATION.
DID YOU LIKE THIS ARTICLE?

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

Click

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
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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.

Investment banks are pushing technical agenda on “integrated records” that would deny homeowners’ due process.

When you lose your home in foreclosure, it is an involuntary gift to an investment bank that has already earned 12 times the amount of the transaction with you. The investment bank does NOT record the interest, principal or forced sale payment on any loan account receivable because there is no such account.

Once again investment banks are attempting to subvert judicial process by technnical arguments that will ahve sweeping affects if dopted by the courts. The argument for “integrated records” pending in the Hawaii Supreme Court is nothing more than a pitch to have a series of reports admitted into evidence as integrated records, thus avoiding hearsay, foundation and even relevance objections. 

The problem with foreclosure litigation from the beginning is the confusion by everyone between reports and records. Records refers to the loan account receivable and if it was shown (and if it existed) it would show the first payment to or on behalf of the homeowner, and all debits and credits to that loan account receivable, including payments to the creditor everyone is presuming to exist.

It would all be so clear — identity of the lender and identity of the current owner of the loan account receivable. Most homeowner defenses would melt away once that was produced — as it was ALWAYS produced before the era of securitization.

It is the same with the status of a holder in due coruse. Such status confers immunity to many homewoners defenses. But in the context of securitization nobody ever pelads that status becasue it woudl require them to prove payment, in addition to good faith and a lack of knowledge of the maker’s defenses as to the note.

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The problem with the agenda of “integrated records” is that it lacks a foundation. Under their theory, it would not require anything more than a witness declaring that the “records” were integrated. Proper foundation requires that each part of the integrated record has sufficient foundation to be admitted on its own. That means that something more than a hearsay report is needed.

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As dozens of cases have shown in depositions and trial testimony there is no servicing done by any of the known servicers. Thus their reports are not records of anything. All such servicers without exception are posing as servicers, just like REMIC trustees are posing as Trustees, and MERS is imposing as mortgagee.
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They are paid for their service as actors portraying something that is not real. Lockbox contracts require all payments to be forwarded to a physical address or electronic financial account bearing the name of the “servicer” but which is completely outside the control of the servicer.
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Those receipts are noted by automation on a server that is not owned, controlled or maintained by the “servicer.” See articles on Black Knight and CoreLogic. The control of the account and the money in it is vested solely in the Master Servicer who is always the bookrunner investment bank that started the securitization scheme. And the REMIC trustee is also the same bookrunner despite a different name being used. And the originator is just a placeholder for the same bookrunner as is MERS. None of the characters are real.
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This becomes more acute when a report becomes confused with a record. The report is hearsay about the record —- including the notion of whether the record exists at all. Those records would show the establishment of the loan account receivable and all credits and all debits from the account. They would show payments to investors. That is never shown in court or otherwise even to regulators. And the reason for that is that the REMIC trustee and servicer have absolutely no contact with investors or even knowledge of their identity, much less paying them.
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So the attempt here is to allow a nonexistent loan account receivable to be presumed to exist because it is part of an integrated series of reports rather than legally admissible records. In plain language that means they want the court to proclaim that the investment banks succeeded at faking it until they made it. When homeowners make a payment no investor benefits. When they don’t make a payment, no investor or successor gets hurt.
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When you lose your home in foreclosure, it is an involuntary gift to an investment bank that has already earned 12 times the amount of the transaction with you. The investment bank does NOT record the interest, principal or forced sale payment on any loan account receivable because there is no such account.
DID YOU LIKE THIS ARTICLE?

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

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

Click

Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
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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.

Homeowner’s Dilemma and Pro Se Nightmare: Wanting the system to change is not the way to win a case

Homeowners win because there is no legal claim against them. But they will lose every time if they fail to establish the inability or unwillingness of the foreclosure mill to come up with concrete evidence that there is, in fact, a loan receivable entry on the accounting ledgers of the claimant and that it got there by virtue of a real-world transaction in which value was paid for the underlying obligation.

Unfortunately, as we all know, all perjury and fraud upon the court is illegal but always allowed unless it is challenged in a timely and proper way. We need to change the rules and the preapproved form pleading such that the main element of the playbook of the banks can be defeated. The main element is to force the homeowner Into a position where the homeowner must expend huge quantities of time, money, and energy defending a frivolous claim.

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Their goal is to wear out the homeowner and the homeowner’s attorney. And they are using this strategy because it works. Over 96% of all foreclosures proceed by the default of the homeowner, to wit: they simply assume that everything alleged against them is true and they walk away.

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The rules and preapproved form pleading are focussed on judicial economy and finality — i.e., how to quickly bring a dispute to final and complete resolution. They must start somewhere and in our system, they start with the claim. In most situations, the system requires a judge to treat the claim as true for most of the proceeding unless there is something obviously wrong that is clearly and indisputably known and demonstrated.

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Claiming that aliens from the planet Zorcar gave you the assignment of mortgage would be an exception to the rule. Your claim will not be accepted as true under the rules unless you claimed (and attached exhibits) also to have proof that aliens were involved, that the planet  Zorcar existed, and that they were the owners of the underlying debt. Since your premise is outside of the normal knowledge of any reasonable person or lawyer or judge, it would be dismissed for lack of credibility — because in the absence of your allegations that you did have such proof, the presumption in that situation would be that you had no way of proving it.

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In most of the small percentage of cases where homeowners contest the Foreclosure both they and their attorneys are seeking only delays in what they think is an inevitable result. So no real effort is made to reveal the fact that the attorneys in the Foreclosure Mill have absolutely no concrete evidence to support the claim they are advocating on behalf of entities that probably don’t exist. And in most of those cases, the homeowner admits that the “loan” exists, that the obligation exists, that the obligation is owed to the claimant, etc. In doing that, the homeowner falls into a trap. Once all of those facts are admitted by the homeowner, the defense becomes “yes, but” which rarely works.
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It is only where homeowners are unrelenting in their contest of the f foreclosure and where they follow the rules on discovery, motions enforcing discovery, objections, and cross-examination that the homeowner wins. They win because there is no legal claim against them. But they will lose every time if they fail to establish the inability or unwillingness of the foreclosure mill to come up with concrete evidence that there is, in fact, a loan receivable entry on the accounting ledgers of the claimant and that it got there by virtue of a real-world transaction in which value was paid for the underlying obligation.
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You might not like that answer but it is perfectly correct and true. Your only chance of winning these cases is by excepting the fact that the rules apply and that the judge is bound to follow them. You can use the rules against your opposition and reveal the fact that there is no concrete evidence for the basic elements of their claim. But if you fail to do that, the rules favor party that makes the claim. That is not just true in foreclosures, it is true in all civil cases.
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If you want an analogy, think about a murder case. Everyone knows that it is against the law to kill somebody. And yet the murderer will go completely free without any damage to his reputation Or without any damage to his record and without any loss of freedom — unless someone catches him, charges him, shows probable cause, gets a conviction, and wins on appeal.
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Homeowners must realize that is the essence of their defense is closely related to criminal fraud. That is never going to be presumed to be true at the beginning of the case. In our system, or people who are accused of such illegal behavior are presumed innocent even if they have exhibited a pattern of illegal behavior in the past. It is an age-old problem That in individual cases people are offended that such offenders go free. We could debate the philosophy behind those rules but we cannot debate the fact that those rules exist.
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It is unfair that homeowners must master the rules of court in order to defend themselves against frivolous claims. While they are allowed to represent themselves in court they have no idea how to do that. They walk into court believing that being right is enough. It isn’t enough and it never is. So they will most often lose cases that a good trial lawyer would win. Or they delay hiring a lawyer until it is too late for the lawyer to do anything constructive under the rules.
DID YOU LIKE THIS ARTICLE?

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

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

Click

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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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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)
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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.

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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DID YOU LIKE THIS ARTICLE?

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

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

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

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