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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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 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).

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MISSION STATEMENT: We want to convince homeowners to fight illegal foreclosures and win — not merely delay a negative outcome. And we want them to go further — to pursue those who make false claims for monetary damages. In fact, I want homeowners to clear their title — expunging or removing or canceling the mortgage lien. 

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Homeowners need to understand that they are investors, not borrowers.

In nearly all cases that the amount of money paid to a “prior lender” is entirely or mostly fictional in all cases of refinancing and nearly all cases in purchase money mortgages. As long as the same underlying investment bank is the same for both the Buyer and Seller or the same for both the new “Lender” and the old “lender.”
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But in cases where the Seller gets money (equity) at least some money is actually produced for closing. And as long as the refinancing produces cash to the homeowner, some money is actually produced at closing. So for example, if the Seller nets $50,000 from the closing statement, that is what the Seller receives and the Seller does not care where it came from. If the homeowner receives $50,000, that is what the homeowner receives and the homeowner does not care where it came from — because the homeowner does not know that he or she has been surreptitiously recruited into a scam plan for the sale of unregulated securities.
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BUT remember that each new “closing” produces a brand new securitization chain. In plain language, if the investment bank is selling securities worth $12 for each dollar that is reportedly paid in “closings,” then each closing represents another $12. So if you have an alleged purchase money mortgage plus 3 refinancing transactions, the total generated could be as high as $48 for each dollar reported as paid in all the closings. Those “reports” of payment are also entirely fictional insomuch as they include money that was NOT paid.
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So a $200,000 mortgage represents the base transaction in a $10 million scheme. This is why so many people on Wall Street received bonuses equal to three times their previous annual earnings. It is also how convicted felons who had $10 per hour jobs earned upwards of $1 million per year. It was a heist. Most of that money went to investment banks who then scattered the funds all over the world. They are still sitting on trillions of dollars.
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If homeowners were only allowed the minimum “introductory fee” (common on Wall Street that would mean that the homeowner was entitled to receive a $200,000 payment in exchange for issuing virtual notes and virtual mortgages and the homeowner’s consent to treat them as real.
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What makes me burn is the idea that the players can get back the money they paid to homeowners without any consideration for their role in an undisclosed transaction that can no longer be unwound. In such instances, it is up to a court to “reform” the transaction to reflect the economic realities. But NOBODY is doing that. I think there is a strong case for that. The investment banks don’t want to do that because they refuse to share with lowly homeowners.  And the courts are both brainwashed and somewhat corrupt because they are accepting “instructions” about mortgage cases.
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But the courts are NOT corrupt in the sense that most people keep saying. And that is why I have won so many cases, and other lawyers have done the same. They all start out with bias but they CAN be turned.

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.

Magna Bank, N.A. as Trustee for registered holders of certificates issued under the name of the Macandcheese Acquisition Trust, Inc. an inactive corporation, for a nonexistent trust, series 2022-XL-1

So a friend of mine left her phone in my car. Here is what I wrote to her:

Thank you for leaving your phone in my possession, which as you know is 9/10s of the law. That means that even though you paid for it and you received ownership from the seller, I can now claim it as my property. So by possessing the phone I was able to issue and sell several certificates based upon the possible rental income I would receive from you for access to the phone you already own.

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I told the buyers you had scheduled payments of $100 per month, even though you had neitehr signed nor even acknoweldged any agreeemtn to make the scheduled payments on the nonexistent obligaiton.
I told the investors that I would make quarterly payments to them equal to 5% of their investments in perpetuity. I will be able to make those payments as long as I am able to continue selling certificates either on your deal or other deals with other ignorant consumers. If you don’t make the payment I will have the option of withholding part or all of the payments I promised to the investors. If you do make payments on this nonexistent obligation, that will make it easier for me to pay bonuses to everyone involved in this scheme.
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So far I have received $2500 from these investors and my salesmen are just getting started. I am returning the phone to you in exchange for a signed receipt that refers to a document that is referenced as describing the scheduled payments. If you don’t make the payment I will repossess the phone and get a judgment against you for the balance due under the lease, which is $15,000. If you wish to modify this obligation you will need to admit to a default and we might then offer a “modification” in which you agree that the deal is valid.

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Servicing of this nonexistent account has been assigned to financial technology (FINTECH) companies who will communicate with you using the name of Joe’s Screw and Die Company (JSDC). The FINTECH companies will assert aqht JSDC is your new servicer ven thouhg it performs no functions.
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The FINTECH companies will publish and send to account statements and payment histories under the letterhead of JSDC. Your telephone communications and correspondence will be forwarded to a call center or correspondence center operated by Black Knight Rising, Inc. who works for me.
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If you ask any questions or if a legal action is initiated to collect on this nonexistent obligation the creditor will be named as Magna Bank, N.A. as Trustee for registered holders of certificates issued under the name of the Macandcheese Acquisition Trust, Inc. an inactive corporation, for a nonexistent trust, series 2022-XL-1.
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And no, I will not reveal the identity of the holders of those certificates nor the content of the certificates. Not ever. But I will instruct lawyers to imply — but not directly state — that the action is brought on behalf of investors or a trust and that it doesn’t make any difference whihc one.
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Despite the fact that you never signed any document that memorializes any agreement by you to these specific arrangements I assure you I can and will enforce the nonexistent obligation against you — because I can.
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Reports concerning your credit status will be sent under cover of the name JSDC to the Credit Reporting Agencies. My name won’t be mentioned so if you ever prove that the report was false, it will be difficult if not impossible for you to attribute liability to me. You will get a judgment against JSDC which is a thinly capitalized entity designed to go bankrupt in the event that many people like you start winning in court.
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Failure to make scheduled payments on this nonexistent obligation will result in increased expenses incurred by you for use of credit in the future in addition to loss of your phone, and a judgment against you that is presumptively valid once it is entered in any court record in a court of competent jurisdiction.
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Should you choose to contest this claim you will most likely win — but only if you are willing to spend considerable time, money and energy in doing so, while negative credit reports are issued against you. Thus even though the claim is false and based upon illegal and possibly criminal premises, you might as well pay.
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Although you might consider this arrangement to be theft, based upon coercion and intimidation, we call it free-market capitalism. Thanks to tens of millions of consumers just like you I now have a private jet, and palatial estates in 14 countries. I am also a very large contributor to philanthropic causes, and a prolofic collector of mastperpiece artworks — which gives me great credibility in the press, even though I am a common thief.
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On a final note, you might ask whether you could or should be a participant in this scheme receiving some of the prodigious revenue from sales of certificates or even some revenue from other consumers like you. While we recognize that the entire scheme is dependent upon the existence of your phone and the receipt you sign to get it back, the answer is no, we will not share in the revenue.
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Just to be clear, I am not your creditor. I neither own nor maintain any accounting record on which data entries are made at or near the time of any financial transction with you and neither does JSDC. However because anyone can sue for anything, I will continue to assert nonexistent authority to collect money from you.
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As further clarification, when I have generated more than the stated lease balance of $15,000 you will neither be notified of that fact nor relieved of any pressure to continue paying. You will not be able to prove that the revenues      generated exceeded any amount asserted as your obligation because there is no such record keeping track of that.
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And in an abundance of caution let me clearly state that you have no debt or obligation owed to me or anyone else under this arrangement. Any payment you make is purely voluntary and without any impediment to your ability to access professional advice which you probably won’t use. What is wonderful for me is that even if you did go to a lawyer or other professional (except perhaps a diligent accountant) they most likely would not understand this deal even if they read this email. Such professionals might ask you questions like “well, you got the phone didn’t you?”
P.S. My friend won’t return my calls now.

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.

Unilateral Mistake: Equitable Defenses Explained — How homeowners can get the upper hand and defend against enforcement of contract that is different from the one they knew or intended

Homeowners are missing out on a huge opportunity for economic gain that balances the power between Wall Street and consumers. 

Courts of equity are courts of conscience, which should not be shackled by rigid rules of procedure,[51] and inherent in a court’s equitable powers is the authority to prevent injustice engendered by fraud, accident, or mistake.[52] Florida Bar Journal Novembert/December 2021 “Two, Three or Four Prongs? The Contractual Defense of Unilateral mistake in Florida”

Second, there is a distinction between the equitable remedies of rescission and reformation that may further blur the lines. The Florida Supreme Court and a few others have ruled that reformation is not appropriate except for mutual mistake,[53] but other Florida courts have extended it in the case of unilateral mistake where there is some form of inequitable conduct or inducement by the party seeking to avoid the defense.[54

Rescission should return the parties to status quo ante; reformation calls for a court, looking at the parties’ intent, to “rewrite” the agreement. The latter is more extreme and against the longstanding principle of court hesitancy to rewrite contracts. The Florida courts have long endeavored to refrain from the rewriting of terms in contracts.[55] Apparently, some bad act by the party seeking to enforce an agreement could under more extenuating circumstances, however, convince a court to rewrite a portion of an agreement.[56]

the courts must take their arguments as presented. Our system is adversarial,[58] and even in equity (with perhaps a bit more flexibility), courts are constrained to consider what parties present. It is not the courts’ role to re-craft a party’s arguments. Whether by choice of the parties or steerage by the courts, assertion of fraud in contracts cases is not undertaken lightly; other arguments devoid of accusations of fraud are more palatable. Additionally, to avoid having to address the fraud question, courts may entertain contractual defense arguments based on mutual mistake, unconscionability and possibly even undue influence (which has an inducement feature balanced with the level of susceptibility, but it is not outright “fraud”). Why find a party guilty of fraud, in a civil case, when a court could reach the same result based on a defense other than fraud? [e.s.]

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THIS ARTICLE APPLIES ONLY TO HOMEOWNER TRANSACTIONS IN WHICH THE SCHEDULED PAYMENTS ARE SUBJECT TO CLAIMS OF SECURITIZATION OF DEBT.

Matthew Marin and Paul Carrier wrote an important article featured in the recent Florida Bar Journal that provides a coherent explanation of contractual defenses that can be applied to contracts claimed to be loans and defenses against enforcement of the note or mortgage. In so doing they remind us of basic principles of what a court can and cannot do — including, I emphasize, the fact that a judge COULD think to himself or herself that an argument or claim or defense could be presented better does not establish the authority to do so. Judges are charged with considering the arguments presented — not the ones that could be presented. And the omission of the ones that could have been presented waives any later attempt to assert them.

This is not up for discussion or debate. It is a basic fact in litigation — one which homeowners have learned (or not) the hard way. Blaming a judge for not doing it is like blaming a dog for failure to fly. Homeowners in my opinion SHOULD be attacking most claims of authority to administer, collect or enforce scheduled payments, and there are plenty of grounds for doing so. In fact, there are good grounds for asking for money in addition to avoiding liability for issuing a promissory note without consideration — and If more homeowners did it the landscape would look totally different. The bottom line is hard for most to accept: the deal was not what it appeared to be.

The grounds for the attack should be largely equitable, but also include legal defenses —- they should be directed at authority (even if the contract was not rescinded, reformed, or set aside in whole or in part) and also on equitable grounds like a unilateral mistake, no meeting of the minds, etc. And as the article points out, validating what I have been saying, alleging fraud makes it far more difficult to plead or prove your point.

So here is the hardest part for homeowners and lawyers for homeowners to understand or even admit.

Nearly all notes and mortgages are issued because of unilateral mistake(s) on the part of the homeowner, induced by investment banks who continue to hide facts that are statutorily required to be disclosed, including but not limited to:

  • They do not know that they are doing business with an undisclosed investment bank doing business through a string of intermediaries.
  • They do not know that the supposed loan transaction is being underwritten for the purpose of justifying sale of unregulated securities and not for purposes of justifying a loan.
  • They do not know that the appraisal is being forced high to justify the contract price and the amount of the “loan”
  •  They do not know that there is an absence of any real party in interest that has a risk of loss — the essential balancing element of all contracts
  • They do not know that the undisclosed revenue for the sale of securities vastly exceeds the amount of their transaction. At the moment they sign, homeowners have triggered revenue that erases all possible risk of loss and eliminates the need to establish a loan account receivable on the books of anyone.
  • They do not know that it is their signature on purported loan documents that creates the illusion of a loan transaction thus triggering the undisclosed sale of securities (without which the “loan” would never have offered, much less occurred.
    • This one fact triggers a series of claims on behalf of homeowners that does not require alleging fraud and keeps the burden of proof manageable (generally preponderance, rather than clear and convincing).
    • Homeowners were not borrowers. They were investors and participants in the sale of unregulated securities. They were entitled to know that and bargain for a fair share of the proceeds. The issuance of the note by the homeowner was based upon a universal error or mistake by all homeowners that they were purchasing a loan product which was not true.
    • In addition, if the transaction was deemed by a court of competent jurisdiction to be a true loan with a “true lender” as set forth in the regulations, then the undisclosed amount of revenue generated from the sale of securities arising from the closing of the transaction with the homeowner is owed back to the homeowner (in full) under the Federal Truth in Lending Act.
      • This element of foreclosure litigation has not been adequately pursued. In judicial states it is an affirmative defense that is not barred by the statute of limitations. In nonjudicial states, the application of the statute of limitations to such claims must be unconstitutional because of unequal treatment based upon choice of procedure. Homeowners should not be barred from using meritorious defenses that are available under the same state’s judicial foreclosure procedure.
  • They do not know that no loan account receivable is created or maintained — thus making modification or workouts rare or impossible
  • They do not know that there is nobody who is legally authorized to administer, collect or enforce the promise they made to make scheduled payments, to wit: the presumed authority to enforce arising from the alleged possession of the alleged original note leads to a false conclusion of fact. Such authority ultimate must come from the party who owns the underlying obligation as contained on their records as a loan account receivable. There is no such loan account receivable.
  • They do not know that the transaction is going to be subject to false claims of servicing
  • They do not know that the “servicing” is not performed by the named “servicer”

The bottom line is that homeowners did not get what they applied for and the investment banks did not pay money to the homeowner or on their behalf because they wanted to loan money. They wanted to sell securities and they needed homeowners to do it. The fact that a homeowner received money and used it to either buy a home or settle a previous financial transaction does NOT make it a loan. A loan is a label for a certain type of contract. There must be a meeting of the minds. In cases where there was no meeting of the minds, there is no contract. And if there was no meeting of the minds because one party to the alleged contract was hiding and did not disclose the real terms as required by laws, rules, and regulations concerning loan contracts make it is imperative that established existing remedies be allowed to homeowners.

PRACTICE NOTE: It seems that a lot of people don’t understand the judicial notice and the insignificance of documents uploaded to the sec.gov site. By filing a registration statement followed by a notice that no further filings are necessary, anyone can upload anything to sec.gov. In effect, it is nothing more than box.com, dropbox, etc.

Lawyers and others involved in false foreclosure claims often upload documents under that cloud and then download those documents from the sec.gov site such that the download shows the sec.gov header.

They then file a motion for judicial notice of the document of a government document even though it was never reviewed accepted, approved nor even a part of a required registration since the sale of “certificates” is not regulated as securities. It is not subject to judicial notice because the document was not an official record of any governmental agency and was never officially registered or recorded.

It does not establish the existence of a trust or the powers of a trustee. Therefore, it cannot serve as the foundation for the claims of the company claiming to be a servicer for that “trust.” It is worthless as to its existence (probably because it is incomplete in the text or exhibits) and it contains only statements of future intent — not a recital of anything that has occurred.

 

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

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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.

 

About that letter you receive from the company claimed to be your servicer: PennyMac

People keep getting letters and they tend to treat the information as real simply because it is in writing. That is the nub of the Wall Street scheme — send out written communication and documents without regard to the truth and people will assume that the document or letter would not have been sent if at least someone didn’t think it was true.

SO I was recently sent a copy of a communication that was on PennyMac letterhead. People forget that you can create the letterhead of any company or person and pout it at the top of your document or letter. Any reader assumes that it was sent by that person or company even if it was not sent by or on behalf of that company. And servicers like PennyMac do not send out anything that could be legally binding because they’re just figureheads.

Practically all inconsistent and nonsensical notices and statements received under the “letterhead” of some company that has been claimed by someone to be a servicer can be easily understood — if you accept the premise that multiple FINTECH companies were involved in processing every function that one would normally associate with that of a company receiving and disbursing money.

So here is the comment I made upon receipt of that “letter.” (Calling it a letter may be misleading since it is the automatic production of a document that never included any human intervention, thought, decision, or authority.)

Here are the facts, to a virtual certainty:
  1. This was not sent by PennyMac. It was created and mailed by a FINTECH company and the FINTECH company is not in contract with the alleged company that is claimed (by someone) to be a servicer. The FINTECH company is in contract with intermediaries for an investment bank.
  2. Since it is unsigned there is no presumption that any human ever authorized the letter.  The failure to at least robosign it or stamp it with a signature indicates or even raises the presumption that whoever sent it meant to preserve plausible deniability.
  3. The response to this letter should be a demand (QWR or DVL) for a signed authorization from PennyMAc saying that the letter was authorized by PennyMac on behalf of whoever they are saying is the creditor. Treating the letter as real makes it real and makes it difficult to challenge authority later.
  4. Any demand mailed to their address should include an inquiry as to the meaning of the small font code above the address.
  5. If the letterhead contains a deadline, you should fire back a question about whether this is pursuant to an instruction from an identified creditor or, if there is a self imposed deadline by someone else. If it is PennyMac, please acknowledge that the deadline is imposed by PennyMac. If it is imposed by some third party, then please identify that party and their authority to impose any terms and conditions.
  6. When the letter refers to forbearance or a prior forbearance agreement, an appropriate response would be a request for acknowledgment from an identified creditor as to the existence, terms and conditions of the forbearance agreement.
    1. Failure to challenge the authority of the company claiming to be a “servicer” could later be construed as tacit consent to the authority of that company and the presumption that since they are the servicer and they do have the authority, they must be representing a creditor who has purchased the underlying obligation for value.
    2. Even if the legal presumption is not raised, a factual assumption will arise in the mind of any judge when faced with these tracks in the sand. You always want your alternative narrative to run parallel to the tracks laid by the Foreclosure players.
  7. References to any repayment plan, modification or deferred payment should be treated the same as any reference to forbearance.
  8. The person that they have designated for you to contact is most likely a temporary employee or independent contractor in a call center. This person has no knowledge and no authority to do anything. The same is true for any person designated as being in charge of “escalation.”
  9. As I have stated many times before, what is needed here is not legal argument alone. In order to defeat this scheme, Consumers who think they are subject to some loan agreement should be organizing themselves and raising money for the purpose of paying a team of private investigators. These investigators will reveal facts and circumstances that are inconsistent with the documents sent to the consumer. And the investigation will reveal the stone wall behind which the Foreclosure players are hiding.
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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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.

 

 

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  • What to Look for in Examining an Assignment

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  • 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!

Modifications Are Part of the Big Lie: Don’t send that application for modification if you don’t want to waive important rights.

The application for modification licenses New Rez aka PHH aka Ocwen to sell, distribute the personal data and transaction data to third parties. Besides the obvious problems with data privacy, this confirms the apparent voluntary participation of the homeowner in a securities scheme that was and still is concealed from the homeowner.

By filing the application the homeowner is waiving his right to keep the compensation that was paid for the homeowner’s role in launching the securities scheme or to ask for more compensation. And it creates an assumption of risk by the homeowner that was, is, and always will be concealed from the homeowner. All of this is “illegal” but by signing the document the homeowner has launched a legal presumption that the document and everything on it is valid.

It reaffirms the concealed nature of the transaction in which the note and mortgage were executed and delivered. Instead of a loan agreement, the application alone establishes the authority of the New Rez aka PHH aka Ocwen to act as agent/servicer even though it has no such authority. It also makes New Rez aka PHH aka Ocwen the creditor, which means the homeowner is accepting a virtual creditor instead of a real one. And the homeowner is waiving any right to contest the standing of New Rez aka PHH aka Ocwen to administer, collect, and enforce the note and mortgage.

On behalf of a client, I recently received an “offer” for my client to apply for a modification. My response is going to be that we would be happy to apply for modification if New Rez aka PHH aka Ocwen can demonstrate (a) that the loan account receivable exists, (b) that U.S. Bank owns it on behalf of either a trust or certificate holders and (c) that New Rez aka PHH aka Ocwen can demonstrate that they have been authorized to act as agent/servicer for a creditor who owns the underlying obligation because (a) they paid for it and (b) they received a conveyance of ownership of the debt as part of a purchase transaction from someone who owned the loan account receivable.

Of course I know that they cannot do that. I know it because along with Patrick Giunta, Esq. in Fort Lauderdale all of that was established beyond any doubt. the Judge found that the trust, the trustee, and the agent/servicer (Ocwen) had no relationship to the debt, note, or mortgage but may have had possession of a note (now lost) that might have been an original. Final Judgment for the homeowner. In fact, at trial, the robowitness was dumbfounded when he realized that the fabricated “Power of Attorney” appointing Ocwen as servicer and as an “attorney in fact” had been not only false but incorrectly created with Chase being the grantor. Chase had nothing to do with this case.

But because they did not file the “original note” until after the lawsuit began — in 2008 — the judge felt compelled under Florida law to enter judgment for the homeowner with findings of fact that disposed of the merits of the case but dismissing the case without prejudice. that is because finding that there was not even the allegation of possession of the note before the filing of the lawsuit there was no jurisdiction. And no jurisdiction means the court is powerless to do anything but dismiss the case.

So the lawyers refiled the case even though there has been a complete negative adjudication of all facts necessary to prove a prima facie case for foreclosure. And they barely managed to squeak through a motion to dismiss because the defense of res judicata is an affirmative defense and so we will file our own motion for summary judgment.

The first interesting thing about all this is that the lawyers chose to file a case that they had already lost. Why? Well until two weeks ago, the law in that DIstrict was that there was no claim for attorney fees if the homeowner won because they established that the named claimant lacked legal standing — a fancy way of saying no case.

The recovery of attorney fees can only be based upon statute or contract. There is no statute that specifically grants the right to recover attorney fees when the named Plaintiff loses a foreclosure case. But there is the contractual provision in the note and mortgage for recovery of fees and Rule 57.105 Fla. R.C.P. that says that such provision is reciprocal.

BUT once the homeowner proves that the Plaintiff is NOT part of the contract, the law WAS that having proven that there was no contractual relationship between the Plaintiff and the homeowner, the homeowner was barred from taking advantage of the attorney’s fees provision in that contract.

All of that may seem to have some logic except for one thing: it was the Plaintiff who invoked the contract when they started the lawsuit asking for attorney fees and when they were shown to be lying, there are about a dozen reasons why they should not escape an award of attorney fees and costs. And that is what the Florida Supreme Court found. So now the attorneys have filed a new lawsuit that they thought had no risk if they lost; but they have a huge risk because the premise under which they were operating was not only wrong but downright malevolent. The playbook is designed to wear the homeowner down even if there is no case against the homeowner.

And so it is interesting that the unauthorized agent/servicer New Rez aka PHH aka Ocwen, constantly changing names to confuse the recipient, is now sending an “offer” to allow my client to apply for a modification. And just to be clear, that is no offer at all. They’re not saying they will consider it, grant it, or even that they are offering it on behalf of some named creditor. And that is why I scored points by filing three motions for sanctions against the opposing side which were granted. They showed up at “mediation” without any authorized person to settle the case. They were only authorized to offer to allow the homeowner to apply for a modification.

This particular offer was sent pursuant to a settlement agreement with the Florida Attorney General that requires them to modify loans. The AG office of course made the same mistake as all law enforcement and all regulators, to wit: that the agent/servicer was actually authorized to modify. In fact, the agreement can now be used to argue that they must have had the authority to modify — why else would that agreement require modification? THE AG was either hoodwinked or playing along. I don’t know.

But the main point of the modification is clear. It changes the falsely labeled loan agreement executed by the homeowner into something entirely different. Instead of a loan contract, the proposed application for modification changes the transaction forever. Perhaps the better description is that it reaffirms the concealed nature of the transaction in which the note and mortgage were executed and delivered. Instead of a loan agreement, the application alone establishes the authority of the New Rez aka PHH aka Ocwen to act as agent/servicer even though it has no such authority. It also makes New Rez aka PHH aka Ocwen the creditor, which means the homeowner is accepting a virtual creditor instead of a real one. And the homeowner is waiving any right to contest the standing of New Rez aka PHH aka Ocwen to administer, collect, and enforce the note and mortgage.

So there you have it. That is the reason they sent it. It was designed to lure me into sending this to my client in order to establish a fact that doesn’t exist and a fact that has already been defeated — standing for either the named Plaintiff (U.S. Bank as trustee for SASCO, etc) or anyone else designated by New Rez aka PHH aka Ocwen. If they had been successful they might have a shot on the second lawsuit. And it now licenses New Rez aka PHH aka Ocwen to sell, distribute the personal data and transaction data to third parties. Besides the obvious problems with data privacy, this confirms the apparent voluntary participation of the homeowner in a securities scheme that was and still is concealed from the homeowner.

By filing the application the homeowner is waiving his right to keep the compensation that was paid for launching the securities scheme or ask for more. And it creates an assumption of risk by the homeowner that was, is, and always will be concealed from the homeowner. All of this is “illegal” but by signing the document the homeowner has launched a legal presumption that the document and everything on it is valid. And it makes the unauthorized agent/servicer the agent of the homeowner!

The accountholder(s) [label establishes homeowner as holder of an account that exists] consent [uninformed consent] to the disclosure by my servicer  [affirms “servicer” as agent] or authorized third party,* [i.e, anyone and there is no referenced asterisk at the end of the document], or any investor/guarantor [note the introduction of new parties] of my mortgage loan(s) [affirming it is a mortgage loan], of any personal and non-personal information during the mortgage assistance process and of any information about any relief I receive, to any third party that deals with my first lien [affirming lien] or subordinate lien (if applicable) mortgage loan(s), including Fannie Mae, Freddie Mac or any investor, insurer, guarantor, or servicer of my mortgage loans(s) or any companies that provide support to them, for purposes permitted by law. Personal information may include, but is not limited to: (a) my name, address, telephone number; (b) my Social Security Number; (c) my credit score; (d) my income; and (e) my payment history [affirming paymetns were due] and information about account balances and activity and (f) my tax return and the information contained therein. I/We hereby authorize the servicer to release, furnish, and provide information related to my/our account to: [BLANK FOR ANYONE TO FILL IN LATER IF THEY NEED IT]

The Florida AG fell for this hook, line, and sinker. So have most homeowner and their lawyers. Take a closer look and ask yourself why they would have such wording if they were truly sure of their status as an agent for a lender, and why they wouldn’t announce guidelines for what the “modifications” would look like if “granted” and on whose behalf they are allegedly “modifying” the transaction falsely labeled as a loan. Every correspondence offering the hope of modification is a potential trap for homeowners who frankly, in my opinion, owe nothing. They were paid money equal to at most 8 1/2% of their revenue generated by these securities scheme, everyone received every payment to which they were entitled, and then they signed a note to give it back because they thought it was a loan.
*
But if it was a loan then there would have been an identifiable lender who had an entry on its accounting ledgers showing payment of value for the underlying debt. No such entity exists because the investment bankers were securities brokers and security brokers are interested in trading securities. They had no intention of assuming any risk of loss on nonperforming loans, so they made sure that the transaction looked like a loan but wasn’t. They had no interest in lending and they did not lend money. Investors loaned money to the brokerage firms. And nobody complied with lending statutes because there was no lender.
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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.

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.
*

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.
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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.

 

Latest Moratorium Extensions Are Two-Edged Sword

The new president is facing incoming fire from all directions. If he does not extend the moratorium on foreclosures and evictions, hundreds of thousands of people are going to be homeless. But the extension does not come without costs.
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As you have seen on these pages, I am quite confident that none of the scheduled payments from homeowners are legally due. On the other hand, I am loathe to tell homeowners or tenants that they should withhold payments if they can make them.
*
The reason is basically extortion or duress. By withholding a scheduled payment without a court order telling you can don’t need to make the payment, you put yourself and your home in jeopardy. the Wall Street foreclosure team will use that as their excuse for pursuing collection and enforcement ending in foreclosure and eviction if you don’t properly defend.
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The situation with tenants is even more dire. Many if not most rental units are owned by small landlords who do not possess the resources to get through this pandemic period. When the time comes that their units are exempted from moratoriums by time or edict, they will be required to pay the “arrearage” just like everyone else. Those homeowners who are using the moratorium as an excuse to withhold payment without having a plan of attack are headed for trouble — possibly the kind they can’t fix.
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The obvious answer to this problem is for homeowners to launch preemptive lawsuits against the securitization team. But my observations and experience show that most judges will not allow such lawsuits to go forward. this is because it is seen as an attack on the financial system generally and because judges are afraid that allowing such lawsuits will invite many more that will clog all the court systems. I have had many judges agree that the lawsuit did state a claim but dismissed it anyway sometimes after as much as 14 months of sitting on the motion to dismiss.
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Some people believe that the judges don’t get it. But most of them do “get it” — at least in part. Since those judges believe the loan exists, the loan account exists and that the homeowners almost certainly owe the payments, they see little harm in waiting until enforcement action is brought against the offending homeowner. Then they will occasionally rule in favor of a homeowner who reveals fatal deficiencies in the proof of the claim.
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It is during the moratorium periods that homeowners have an unprecedented opportunity to start actions against the securitization team — but not entirely the way most might think. By sending a proper Qualified Written Request and Debt Validation Letter you open up a more palatable action for the Judges in advance of enforcement. This is the opening step in the homeowner’s challenge.
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They must answer and they risk some rather harsh sanctions if they lie — so they withhold information. But the information they give in response to the statutory inquiries will most likely contain inconsistencies with their correspondence.
*
Your questions need to be very specific. And they should start with existence, ownership, and authority over a loan account receivable on the ledger of some company; that entry can only be legal and valid if value was paid in exchange for a conveyance of ownership of the loan account receivable (aka underlying debt or underlying obligation). This is the most basic requirement established by law and custom over centuries in English common law and statutes, American common law; it is also established as the law in every jurisdiction in their adoption of Article 9 §203 of the Uniform Commercial Code.
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Next, the homeowner can file a complaint with the Consumer Financial Protection Board and the Consumer Division of the Attorney General of their State. Once again a response is mandated by statute and the securitization/foreclosure team does no dare withhold a response. but once again their response is going to be filled with legalese evasion of admitting the simple fact that they don’t own the loan account receivable and they have not been given any authority from anyone who does own it.
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Homeowners should not allege nor try to prove that all securitization of residential “debt” is a fraudulent scheme or a lie, even though that is true. It scares judges and it sounds like a conspiracy theory to them. So keep it simple and to the point.
*
Foreclosure is about restitution for an unpaid debt. If the claiming party has no actual ownership of the debt arising from a real-world transaction in which they paid value in exchange for owning the loan account receivable they fail the test of the condition precedent set forth in 9-203 of the UCC. And that opens the door to “limited” actions for violations of the FDCPA (title X, 124 Stat. 2092 (2010) and other statutes. Those statutes have a bite to them and the foreclosure mills are afraid of them.
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The advantage of the preemptive action by the homeowner is that very often the securitization/collection/foreclosure team is not ready with fabricated documents containing false information about transactions that never occurred.
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The rule of thumb is to create a vehicle that can be gradually expanded as more information is obtained and the judge is gradually educated as to the true facts of the case. And remember that attorney fees are often recoverable in such actions along with statutory or compensatory damages.
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Once filed and discovery is underway, the best practice is to take information gleaned from discovery and then request a leave of court to amend the pleadings to include a broader action for declaratory, injunctive, and supplemental relief.
*
The homeowner would be seeking damages for illegally trying to enforce a debt, and disgorgement of amounts paid to parties who had no nexus to ownership, or authority over the claimed “debt.” While this premise is true in virtually all cases in which securitization claims were in play, it can only be established by revealing the inability or unwillingness of the opposition to answer the most basic questions about existence, ownership, and authority over the debt.
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They can’t but you must do much more than accusing them. You must out litigate them which is why you most likely should have a lawyer who knows how to file motions to dismiss, discovery requests and motions to enforce discovery requests, along with motions for sanctions, motions for the court to adopt a negative inference against the opposition and motions in limine.
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If small landlords take heed, they can force the situation to tilt in their own favor, pass some of the savings to tenants and come out the other end of this crisis somewhat intact. If they don’t then it is unlikely that many of them will survive after the moratorium ceases unless their tenants have been paying rent in a timely fashion.
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.
*

FREE REVIEW: Don’t wait, Act NOW!

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

TONIGHT! Why Lawyers Should Want Foreclosure Defense Cases and What They Are Missing $$$

Thursdays LIVE! Click into the Neil Garfield Show

Tonight’s Show Hosted by Neil Garfield, Esq.

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

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

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

It’s time for a new push.

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

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

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

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

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

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

FREE REVIEW: Don’t wait, Act NOW!

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

How and Why to Litigate Foreclosure and Eviction Defenses

Wall Street Transactions with Homeowners Are Not Loans

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

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Each time that a homeowner makes a payment, he or she is perpetuating the myth that they are part of an enforceable loan agreement. There is no loan agreement if there was no intention for anyone to be a lender and if no loan account receivable was established on the books of any business. The same result applies when a loan is originated in the traditional way but then acquired by a successor. The funding is the same as what is described above. The loan account receivable in the acquisition scenario is eliminated.
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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.
*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

FREE REVIEW: Don’t wait, Act NOW!

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

Careful what you say in “Hardship Letter”

Modifications are tricky. They are trickier than you think. First of all the offer is made by a company who has no right to act as “servicer” or to change the terms of your contract. By changing the apparent lender or creditor to the named servicer, the agreement is probably tricking you into accepting a virtual creditor in lieu of a real one.

But the most important trick is that what they are really looking for is a direct or tacit acknowledgement of the status and ownership of the debt. So if you say that this “servicer” did something or that “lender” did that, you are admitting that the company who presents itself as servicer is inf act an authorized entity to administer, collection and enforce your loan.

And if you refer to a “Lender” you are directly  or tacitly admitting that a creditor exists and they own the loan and that raises the the almost irrebuttable presumption that the “lender” has suffered financial injury as a direct and proximate result of your “failure” to pay.

Not paying is not a failure to pay, a delinquency or a default if the party demanding payment had no right to do so. So if you admit the default in your “hardship” letter you are putting yourself into the position of defending against compelling arguments that you waived any right to deny the default or the rights of the parties to enforce the debt, note or mortgage.

I recognize that there is the factor of coercion and intimidation in executing a modification (just to stop the threat of foreclosure, regardless of whether it is legal or not). But the question is whether the entire process of modification is a legally recognizable event.

If the offer comes from someone who has no ownership or authority to represent the owner of the underlying obligation then the offer is a legal nullity. But if it is accepted then there is a possibility that the homeowner might be deemed to have waived defenses. Also if the beneficiary of the agreement and the payments made would go to a party who does not own a loan account then the agreement has been procured by misrepresentation or implied misrepresentations.

Proper pursuit of discovery demands will most often result in an offer of settlement and modification that is simply too good to refuse. The reason is that your opposition  has no answers to your question that would not constitute an admission of civil or even criminal liability.

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

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.

 

Thousands of Homeowners Win Against the Banks: Here is Why You Never Hear About It

you made all that revenue possible by signing a note and mortgage in favor of someone who was not lending you any money. Nobody told you about that. And nobody told you that you were not entering a transaction in which there was a lender and borrower. There was only a borrower.

The simple fact is that the banks are breaking the law every time they attempt to administer, collect or enforce a debt. This is true in all cases where securitization is part of the deal. And securitization is in play 99% of the time even where no mention of securitization is made in the claim brought against a homeowner. The banks are breaking the law because there is no debt, no claim and no creditor. The money they receive from “successful” foreclosures is pure profit. They have no right to even be in court much less get a “remedy” that is limited to creating more revenue.

Buying or owning a house is the largest single investment for most families. And yet, nearly all of them leave the keys on the counter when they are threatened with foreclosure. They are completely ignorant of the fact that they have been cheated, that more money might be owed to them, and that there is no debt to pay or to be enforced. So the banks have succeeded in using the fact that most homeowners don’t understand what they are walking away from. 96% of all foreclosures are uncontested — thus reinforcing the belief that the foreclosures are legal and valid.

Of the remaining 4% about half of those accept modification agreements or cash for keys agreements that effectively change the entire loan agreement into one in which the homeowner as borrower now accepts a virtual lender rather than a real one, thus enabling virtually anyone to make a claim. The “modification” agreement comes with no warranties or ownership of the debt, note or mortgage. But the homeowner must agree that he/she/they will accept the named servicer as if they were a creditor and to disregard what happens outside of the relationship between the “servicer” and the homeowners.

The modification agreement is probably subject to challenge because it is based upon a number of false premises, first among them that the “servicer” is not a servicer for anyone who has paid value and therefore owns the obligation. Therefore the authority of the servicer from the named claimant is irrelevant. If they don’t own the debt they can’t claim injury to their asset. I usually suggest that the if the homeowner is disposed to accept the agreement, the homeowner might get still better terms by demanding that the named claimant (e.g. BONY Mellon, US Bank, Deutsche) acknowledge and accept the modification agreement., Funny thing.

That request is ALWAYS rejected — because the servicer does not represent the interests or assets of the named claimant. They can’t supply that acknowledgement because the “trustee” won’t give it. They won’t give it because if they did, that would make them really involved in the transaction rather than just being window dressing.

So then you come to those who fight persistently. Unfortunately, it usually takes a lawyer to win. Anyone can litigate — it’s your constitutional right. But generally speaking (Not always) the winning homeowner is in that position because there as a competent trial attorney litigating the case. Out of the 2% who actually fight persistently with a lawyer who knows what to do and does it (motions, discovery, etc), 2/3 of them win. that might seen like a small number. But applied against he number of foreclosure cases filed over the last 15-20 years it means that around 150,000 homeowners have won or settled their cases on satisfactory terms.

Satisfactory terms means that they either received a substantial reduction in principal (20%-90%) plus waiver of all arrearages and restoration of credit reports, or they received a cash payment in the hundreds of thousands of dollars. The lawyers made money (a lot of it), the homeowner was made whole and the foreclosure was either cancelled or allowed as part of the settlement agreement without any negative credit report.

So why doesn’t anyone hear about it? It’s because the settlement agreement makes it clear that the homeowner may not release, authorize or otherwise disclose anything about the case, the agreement or anything else.

Here is an example of the wording you find in such documents.

  1. Confidentiality and Notices: As a material inducement and an indivisible part of the consideration to be received by Defendants to enter into this Agreement, the Parties agree that it is appropriate to maintain any discovery exchanged in the Litigation, this Agreement, the terms of this Agreement, and the settlement provided for herein (collectively, the “Information”) as confidential on a going forward basis as of the date of this Agreement. Toward that end, Plaintiff agrees that he and her attorneys will neither disclose nor reveal to any person or entity or directly or indirectly publish, publicize, disseminate, or communicate to any person or entity the Information on a going forward basis as of the date of this Agreement, including but not limited to a prohibition on Plaintiffs and his attorneys posting or otherwise disclosing Information on the Internet or any other paper or electronic media outlet (including but not limited to news organizations websites or newspapers, email, biogs, Facebook, MySpace, Twitter, etc.). The only permitted disclosure of Information hereunder is to the persons or entities specifically identified in subparagraphs (i) through (ix) below, and the confidentiality obligation of Plaintiff’s attorneys is intended to provide for confidentiality to the full extent of, but no further than permitted by, the applicable attorney ethics or disciplinary rules.
  2. The Parties may provide a copy of this Agreement and/or describe the terms and conditions of this Agreement within any lawsuit before a United States court of competent jurisdiction only in response to a Court order to that The Parties further agree that, if they or their attorneys receive legal process designed to disclose any Information deemed confidential under this Agreement, the disclosing Party will provide advance written notice to counsel for the non-disclosing Party within three (3) business days of receiving such subpoena, court order, or other legal process, so that the non-disclosing Party has the option of taking steps to protect the confidentiality of this Agreement, its terms, or any Information deemed confidential under this Agreement;
  3. The Parties may provide a copy of this Agreement and/or describe the terms and conditions of this Agreement to their respective officers, directors, employees, attorneys, financial advisors, accountants, insurers, auditors, and other professional advisors who regularly have access to Information of this type in order to perform their duties, or with whom the Parties may consult regarding any aspect of this Agreement, provided that such persons or entities first agree to maintain this Agreement, the terms of this Agreement, and the settlement provided for herein as confidential;
  4. Non-Disparagement. Releasors and their attorneys will not, directly or indirectly, make any negative or disparaging statements against the Releasees maligning, ridiculing, defaming, or otherwise speaking ill of the Releasees, and their business affairs, practices or policies, standards, or reputation (including but not limited to statements or postings harmful to the Releasees’ business interests, reputation or good will) in any form (including but not limited to orally, in writing, on any social media, biogs, internet, to the media, persons and entities engaged in radio, television or Internet broadcasting, or to persons and entities that gather or report information on trade and business practices or reliability) that relate to this Agreement and the Information (as defined above) or any matter covered by the release within this Nothing in the Agreement shall, however, be deemed to interfere with each party’s obligation to report transactions with appropriate governmental, taxing, or registering agencies. Nothing in this Agreement prohibits or limits Plaintiff or Plaintiffs counsel from initiating communications directly with, responding to any inquiry from, volunteering information to, or providing testimony before, the Securities and Exchange Commission, the Department of Justice,

So the bottom line is that the choice between challenging and leaving is a deeply personal one and that there is no one right answer. But the choice to leave should not be based on the erroneous myth that you can’t or shouldn’t win. these people have received many times the amount funded at your loan closing and have closed off the account on their own books. They have not only been paid, they have made more money posing as lenders than they ever could have by actually being lenders. And you made all that revenue possible by signing a note and mortgage in favor of someone who was not lending you any money. Nobody told you about that. And nobody told you that you were not entering a transaction in which there was a lender and borrower. There was only a borrower.

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

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*
CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation.
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
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*
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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.

 

Watch that modification agreement. You are being forced to accept a virtual creditor instead of a real one.

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

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

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

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

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

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

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

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

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

Here is my recent analysis:

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

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

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

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

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

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

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

*
This is further evidence of deceptive servicing and lending practices. They are evading the responsibility imposed by law to identify the creditor and the authority to represent the creditor. They are evading the responsibility imposed by law to provide an accurate accounting for the establishment and current status of the alleged obligation.
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The reason for this behavior is that there is no current obligation claimed by any company to be owed to them as a result of ownership of the loan account arising from a transaction in which value was paid for the underlying debt.
*
Accordingly there can be no authority to act as servicer, agent, or “acting lender”, nominee or designee.
*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

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*
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.
*
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.

How to ask the right questions in discovery

Discovery is part law, part art, and part intuition. The lawyer must generate questions that can be used, by themselves, to bring certain issues in front of the judge either because the opponent answered the questions or because they didn’t answer.

If your point is that your opponent doesn’t own the claim even though they either said or implied that they do own it, then you need to do some investigation first so you can ask the right questions in the right way. If your point is that there are two agreements, one for loan and the other for securitization, the same thing applies. Either way you face an uphill climb as you attempt to persuade a judge who is not an investment banker and doesn’t understands securitization but still thinks he or she understands residential homeowner transactions.

So continuing with our example, you want to show the judge that despite the requirements for legal standing your opponent does not have standing. In order to have standing the claimant must have an injury. Financial injury qualifies and that is what the banks are relying upon when they try to foreclose.

How does one have financial injury? Actual financial damages occur when one actually loses money or permanent value of some property — tangible, intangible, real or personal property all qualify.

By “actual” that means you can count the money that was lost as a direct and proximate result of the action or inaction of the defendant or, in this case, the homeowner.

If the homeowner doesn’t make a payment that had been expected, then several things occur in the law that makes this fairly simple proposition complex.

  1. Does the homeowner owe any money to the party to whom payment was previously being made? If not, then the complaining party had no right to declare, much less enforce the claim of default. The subheading here is counterintuitive — does the debt exist as  an asset owned by any entity, including the claimant? Assuming that the answer to these questions is in the affirmative is an assumption that compromises the entire defense of a foreclosure case. Assuming the answer is no, then discovery will be on the right track.
  2. BUT having previously made payments to the complaining party, the homeowner has been acting against his/her own interest and that is often treated as an implied admission that payment was previously made because the homeowner thought it was due. To take a contrary position now is contradictory and diminishes the credibility of the homeowner who later says that the money is not due.
  3. Was there an agreement under which the homeowner agreed to make the payment? Not so fast. This is more complicated than anything you can imagine because there is no agreement, no matter what was signed or what was even done, unless the agreement is enforceable. In the eyes of the law an unenforceable agreement is no agreement — a legal nullity. And there are very precise elements of a legally enforceable agreement, each of which must be present. this isn’t horseshoes — close is not enough.
  4. Is the claimant a party to the agreement? In the context of loans this is easy if there really was an original lender and a borrower. In the context of securitization, this condition can only be satisfied by the claimant if it purchased the underlying debt for value in exchange for a conveyance of the ownership of the debt. In today’s foreclosures this element is the focal point for most litigation. The claimant always has a conveyance, but never produces any proof of payment for the debt. That makes the conveyance (assignment of mortgage or indorsement of note) void even if it was executed and recorded. It is regarded in all jurisdictions as a legal nullity. If the conveyance was void then the claimant is not a party to the agreement. Litigation is between the bank forces using legal presumptions arising from the apparent facial validity of the conveyance and the actual facts which are absent showing that value was paid for the debt in exchange for the conveyance.
  5. Was there mutual consideration? If not, there is no agreement. In the context of loans this means that the original agreement produced mutuality. In other words, the party that is disclosed as “lender”, pursuant to the provisions of the Truth in lending Act, gave money to the borrower and the borrower took it, in exchange for a promise to repay the money to that party. At least 65% of all loans from the year 2000 to the present were not originated by the party named as “lender” in the “agreement” (note and mortgage). They are table funded loans against public policy. But they are often enforced under the belief that the originator was in privity (agreement) with the source of funds. In the context of securitization, which covers around 95% of all such loans, there was no privity because the source of funds did not want to liable for lending violations (inflated appraisals, nonviable loans etc). The issue is complicated by the fact that the borrower did receive consideration and did make the promise to pay the originator — but neither the note nor the mortgage were supported by consideration from the originator. Any “purchase” from the originator was therefore void, and any conveyance of the mortgage or note from the originator was void unless the grantee had already paid for the underlying debt. In virtually all cases in which securitization claims are present, the grantee has never paid for the debt, nor has it ever possessed the resources to purchase the debt. It is a
    “bankruptcy remote vehicle” which is to say that it is there in name only and possible not even as a legal entity. If you can show that fact or show that the other side refuses to answer properly worded questions about the status and ownership of the debt, then you can raise the inference that the claimant doesn’t possess a claim and therefore lacks standing.

So the questions that should be constructed and posed should center on the following guidelines, for purposes of this illustration:

  1. In which bank account were prior payments received and who controlled that bank account.
  2. On what general ledger of what company is the claimed debt appearing as an asset receivable of that company?
  3. What was the asset account from which the claimant entered a debit to pay for ownership of the debt?
  4. Does the named claimant as beneficiary or Plaintiff own the claimed debt as a result of a transaction on a certain date in which it paid value for the debt to a grantor who owned the debt in exchange for an conveyance of ownership of the debt?
  5. To whom did the servicer forward payments received from the borrower/homeowner?
  6. What person or entity did not receive money as a result of the claimed default?
  7. What is the date on which the named claimant received ownership of the underlying debt?
  8. On what dates has the named claimant issued any payments to third parties whose contractual rights to such payments were in any way related to payments received from the borrower/homeowner?
  9. What is the name and contact information of the officer(s) or employee(s) of the named claimant who is in charge of accounting and finance for the named claimant?
  10. What is the name and contact information of the officer or employee of the named claimant who is the custodian of records relating to the underlying debt, payments received and payments disbursed that were in any way related to the underlying debt, payments made by the borrower/homeowner, or payments received by third parties (possibly investors).
  11. Describe source and the amount of the remuneration and compensation received by the named claimant in connection with the creation, administration, collection or enforcement of the subject underlying debt, note and mortgage.
  12. Describe dates and names of the lockbox contract(s) maintained with third parties for the collection of borrower/homeowner payments relating to the subject loan.
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Don’t use the above as the actual wording of your interrogatories, request for production or request for admission although some cutting and pasting could be used. Check with local counsel before you attempt to enter the legal process of discovery, motions to compel, motions for sanctions and motions in limine.
*
This article is not a complete treatise on discovery in foreclosure actions. It is not a substitute for seeking advice from an attorney licensed in the jurisdiction in which your property is located.
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KEEP IN MIND THAT THEY WILL NEVER ANSWER THESE QUESTIONS. DON’T EXPECT ANSWERS. EXPECT THE ABSENCE OF ANSWERS. THEN USE THEIR REFUSAL TO ANSWER AS THE BASIS FOR RAISING INFERENCES AND PRESUMPTIONS AGAINST THEM.
 *
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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*
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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.
*
Please visit www.lendinglies.com for more information.

The missing second witness —Attacking the Business Records of A Servicer: Start with the fact that the company is self-proclaimed servicer with no proof of authority and then pivot to the absence of records establishing the debt as an asset.

Excellent article written by attorneys at Blank Rome on the issue of Business Record exceptions to the hearsay rule. The hearsay rule is simple. It excludes from evidence any statement that is uttered out of court — whether that statement is in writing or was made orally.

see https://www.jdsupra.com/legalnews/florida-supreme-court-resolves-conflict-20649/

So here is what it looks like in a typical old-fashioned foreclosure trial.

The witness testifies that he or she is the records custodian of a bank. He/she says she has the records of the homeowner/borrower from the bank and he/she testifies that he/she knows from his/her own personal knowledge that those records were made at or near  the time of every transaction between the borrower and the bank.

The witness testifies that he/she has the actual records with handwritten entries showing the establishment of the loan as an asset through purchase of the promissory note in a transaction in which the borrower received money or in which money was paid on behalf of the borrower.

The written record is admitted into evidence as proof of two matters asserted: (1) establishment of the debt or underlying obligation and (2) the borrower’s payment history.

The witness goes on to testify that he/she holds in his/her hand the original promissory note and mortgage executed by the borrower and that is ahs been under lock and key, under his/her supervision since the time of origination of the loan.

The note and mortgage are accepted into evidence as proof of the terms of repayment and the establishment of a lien.

The Judge compares the obligation (promise to pay) as set forth on the note with the payment history and arrives at a factual conclusion as to whether the homeowner is in breach of the agreement and renders a final judgment for the bank, assuming the homeowner has not made payments that were promised by the homeowner to the bank.

Now let’s look at the modern day nontraditional foreclosure. First of all nobody from the bank or “lender” makes any appearance.

My point is that a foundation objection should be made and preserved if this is the case.

If a witness is a person other than the employee or officer of the named claimant or plaintiff in the foreclosure case, he/she cannot testify about records, payment history or anything else relating to the foreclosure claim without someone else first testifying that the witness is authorized to do so and that the company for whom the witness works maintains the records that establish the debt as owned by the claimant and that said company is in fact the servicer of the account.

That second witness must be an authorized employee or officer of the named claimant/plaintiff. In plain language if BONY/Mellon is named as trustee of a trust, and that they are filing on behalf of certificate holders of the trust, no evidence should be admitted without first establishing the foundation for the inferences that the foreclosure mill wishes to raise.

And frankly the court should on its own reject any attempt to work around this requirement. But as a practical matter, the way it is currently working, if you don’t object continuously to the absence of such foundation then you will be treated as having waived the issue and with that, you will effectively be treated as though you had waived your defenses.

So if securitization was real, the witness would come in and say that they are the authorized representative of BONY Mellon and that they are the trust officer in charge of record keeping for BONY Mellon in relation to this named trust and the certificate holder.

The witness would produce the trust agreement authorizing BONY/Mellon to act as trustee and a certificate indenture in which the holders of the certificates have been granted ownership shares of a pool of mortgages owned by the trust and which explicitly grant to BONY/Mellon the right to represent the certificate holders in connection with the enforcement of loans owned by teht rust for their benefit. The witness would establish that the certificate holders are beneficiaries.

The bank trustee witness would produce business records of BONY/Mellon that show the transaction in which the loans were established, having acquired same from the originator in a specific transaction in which value was paid for ownership of the debt, note and mortgage.

Or, the witness would testify that pursuant to some agreement, BONY/Mellon had outsourced functions to some other company that is acting as servicer. And the witness would testify that the servicer was operating in compliance with the servicing agreement by tendering the required payments in the certificate indenture to BONY/Mellon as trustee who in turn makes payments to the certificate holders.

You will never see such testimony because none of these things happen in what is loosely described as “Securitization.” Certificate holders own nothing but an unsecured IOU from an investment bank doing business under the name of a nonexistent trust. No servicer even has access to any information, data or entries on any record establishing the debt as an asset of anyone. In fact, no “servicer” knows or pays any money to anyone in a transaction that would even imply they are working for the owner of the debt. That is where aggressive discovery will tip the scales.

In reality the “records” submitted by the servicer are proffered as the payment history but there is never any direct testimony that the payment history constitutes business records of the claimant. That is because they are not business records of the claimant. They are only reports issued for the purpose of foreclosure. And that is not allowed. Such reports are not admissible in evidence and if excluded, the case fails.

In one form or another, every case I have won for homeowners and every case I know that was won for a homeowner has turned on the absence of foundation for the evidence sought to be admitted into evidence — without which no legal presumptions can arise or be used in the case against the homeowner.

Bottom Line: In virtually all foreclosure cases there is an absence of the required second witness because there is no such witness — i.e., a person with personal knowledge that the facts assumed or presumed are true.

Here are some important quotes from the above cited article:

On July 2, 2020, the Florida Supreme Court issued its written opinion[i] in Jackson v. Household Finance Corporation, III, 236 So. 3d 1170 (Fla. 2d DCA 2016) to resolve a conflict with a case decided by the Fourth District Court of Appeal (Maslak v. Wells Fargo Bank, N.A., 190 So. 3d 656 (Fla. 4th DCA 2016). Specifically, the issue concerned whether the predicates were met for admissions of records into evidence under the business records exception to the hearsay rule during the course of a bench trial in a residential foreclosure case. The Florida Supreme Court held that the proper predicate for admission can be laid by a qualified witness testifying to the foundation elements of the exception set forth in Section 90.803(6) of the Florida Evidence Code.

a party has three options to lay the foundation to meet that exception: (1) offering testimony of a records custodian, (2) presenting a certification that or declaration that the elements have been established, or (3) obtaining a stipulation of admissibility. If the party elects to present testimony, the applicable case law explains that it does not need to be the person who created the business records. The witness may be any qualified person with knowledge of each of the elements.

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

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In the meanwhile you can order any of the following:
*
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.
*
Please visit www.lendinglies.com for more information.

 

Just like I said: Megabanks are doing just fine despite economic downturn — at the expense of investors, taxpayers and homeowners.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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