Patrick Giunta Esq. Scores Another Homeowner Win in South Florida v US Bank Trustee LSF9 Master Participation Trust: William Paatalo, Expert Testifies

Foreclosure volume has declined  but that doesn’t reduce the number of cases that are deficient and even fraudulent.

As more senior Judges have more time to review the evidence, the legal presumptions sought by foreclosure mills and come to conclusions about the facts, they  are increasingly suspicious about the claimant, the claim and the failure of proof of real facts.

Kudos again to trial lawyer Patrick Giunta, Esq. with offices in Ft. Lauderdale, Florida. Trial was held on October 7, 2019. This is the third time we have covered a win by Giunta.

Final Judgment for Defendant Case #50-2017-CA-012236, 10/8/19

Circuit Court West Palm Beach, Florida

ORDERED AND ADJUDGED AS FOLLOWS:

  1.  Plaintiff failed to prove it had standing to enforce the note.
  2.  On Count I, Mortgage Foreclosure, and Count II Re-establishment of Lost Note, Plaintiff US Bank as Trustee for the LSF9 Master Participation Trust take nothing by this action and the Defendants …. shall go hence without day.

Game set and match. The Judge here obviously sought to prevent the foreclosure mill from bringing another action.

Some judges upon finding that standing was lacking follow precedent and dismiss without prejudice enabling the foreclosure mill to try again. But more judges are taking great pains to examine the evidence and are coming to the legal conclusion that the Plaintiff’s proof failed.

Upon a factual finding of failure to prove a prima facie case, the court then enters Final Judgment, which for all purposes between that claimant and that borrower is a final determination on the merits.  Any future attempts to foreclose by US Bank or the LSF9 Master Participation Trust are barred by res judicata, collateral estoppel and the Rooker Feldman Doctrine if it applies.

If any attempt is made to bring another foreclosure action in the name of another entity, trust, LLC or corporation, they would also likely be barred without pleading and proving real facts that show that the Plaintiff is the owner of the debt and paid value for it and the previous parties had executed assignments and other documents without any right,  justification or excuse and without notice to the new claimant. That isn’t going to happen.

Giunta doesn’t take a lot of these cases but when he is engaged he tends to win. He understands securitization and relates it back to the failure to prove a prima facie case. He avoids trying to prove or even accepting the burden of proving who actually paid value for the debt, if anyone.

He employed Bill Paatalo in this case whose testimony underscored the deficiencies in the allegations, the documents, and the proof. Paatalo appeared as an expert fact witness.

 

 

The Solution to Defective Securitization of Mortgage Debt: The Bare Legal Truth About Securitization of Mortgage Debt

The basic truth is that current law cannot accommodate securitization of mortgage debt as it has been practiced. In short, what they (the investment banks) did was illegal. It could be reformed. But until the required legal steps are taken that address all stakeholders virtually all foreclosures ever conducted were at best problematic and at worst the product of a fraudulent scheme employing illegal tactics, false documents and false arguments of law and fact.

Without specifically saying so the courts have treated the situation as though the correction has already occurred. It hasn’t.

It is through no fault of the borrower that the investors put up money without acquiring the debt. That doesn’t mean they were not the ones who paid value for the debt. Therefore the only conceivable party, in equity, who should be able to enforce the mortgage is the investors but they cannot because they contractually barred from doing so. 

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
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I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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I think it is worth noting that securitization of loans was never completed in most scenarios. Value was paid by the Investors who, contrary to popular belief, never received ownership of the debt, note or mortgage.
  1. Cash flow was promised by the investment banker doing business as an alleged Trust, but the investors who were the recipients of that promise had no recourse to the mortgages (or the notes and underlying debts) and hence no recourse to enforce them.
  2. The alleged Trust never acquired the debt. Neither the trust nor any trustor or settlor ever entered into a transaction in which value was paid for the debt as required under Article 9 § 203 of the Uniform Commercial Code. It should be emphasized the this is not a guideline. It is statutory law in all U.S. jurisdictions. People get confused by court rulings in which ownership of the debt was presumed. Those decisions are not running contrary to Article 9 § 203 of the Uniform Commercial Code. To the contrary, those decisions seek to conform to that statutory requirement and the common law Doctrine that any reported transfer of the mortgage without transfer of ownership of the debt is a legal nullity. In short they avoid the issue by presuming compliance — contrary to the actual facts. 
  3. Under Article 3 of The Uniform Commercial Code it is possible that the trust acquired the note but under Article 9 of the Uniform Commercial Code the trust could not have acquired the mortgage, unless the transferor had sold the debt to the trust or the transferor was a party to the trust and had paid value for the debt. This is black-letter law.
  4. Endorsement of the note is of questionable legality since the endorser did not own the debt. In addition, the endorser had no legal right to claim a representative capacity for the investors who had paid value for the promise of the Investment Bank  (ie, they did not pay value for the debt). 
  5. I think that the only way an endorsement could be valid is if the endorser owned the debt or has legal authority to represent the owners of the debt who had paid value for the debt. I don’t believe that such a party exists.
  6. The only party who had barely legal title to the debt, the investment banker, had sold all or part of the cash flow from the mortgage loans for amounts in excess of the amount due on the debts. The remaining attributes of the debt or indirectly sold by financial instruments whose value was derived from the value of the derivative certificates issued in the name of the trust.
  7. There is no one party who has legal ownership of the debt and who has paid value for it. The brokerage of the note was merely a process of laundering title and rights to the debt to create the illusion that someone had both. The actual owner of the debt is a collection of legal entities that are not in privity with each other. That Gap was intentional and that is what enabled the Investment Bank to effectively sell the same loan an average of 12 times — for its own benefit.
  8. A Court of equity needs to allocate those sales proceeds. The implied contract with borrowers required disclosure of all compensation arising from the loan transaction. The implied contract with investors was the same. Both would have bargained for a piece of the pie that was generated by the investment bank. Neither one could do that because the large accrual of  heretofore impossible profits and compensation was both unknown and actively concealed from any reporting by investment banks.
  9. It is through no fault of the borrower that the investors put up money without acquiring the debt.
  10. The only way to bridge this problem is by somebody pleading Reformation or some other Equitable remedy in which the liability on the note or the liability on the debt is canceled.
    1. Anything less than that leaves the borrower with an additional prospective liability on either the debt or the note.
    2. But for the court to consider such a remedy in a court of equity it must restructure the relationship between the Investors and either the debt or the note and mortgage.
    3. And in turn it must then restructure the relationship between the party claiming a representative capacity to enforce the mortgage and the investors.
    4. In short, the investors must be declared to be the owner of the debt and the owner of the mortgage who has paid value for the debt.
    5. Only after a court order is entered to that effect may the investors then enforce the mortgage.
    6. The only way the Investors could enforce the mortgage would be if they were each named as the claimant and the investor(s) were receiving the proceeds of foreclosure sale to reduce or eliminate the debt.
    7. They could act through a collective entity, such as a trustee under a trust agreement in which the trustee was directly representing the investors. In that event the named trust in the Foreclosure action could be ratified and come into full legal existence as the legal claimant.
    8. Until then virtually all foreclosures naming a trust as claimant or naming “certificate holders” as unnamed claimants are fatally defective requiring dismissal with prejudice.
  11. However, this restructuring could interfere with the other derivative products sold on the basis of the performance of the certificates. The proceeds of such sales went to the Investment Bank and Affiliates who assisted in the selling of the additional derivative products.
  12. I repeat that none of this was caused by borrowers or investors or even known to be in existence.
  13. And the problem would not exist but for the persistence of the investment banks in maximizing Revenue at the expense and detriment of both investors and Borrowers.
  14. The problem with my solution is that much of the revenue collected by the investment Banks would accrue to the benefit of the investors.
  15. So the court would need to claw back a substantial amount of the revenue collected by the Investment Bank in each securitization scheme and then allocate the proceeds as to principal and interest on the underlying debt. Hence principal balances on the debt and the accrual of interest could be affected by the restructuring.

Jurisdictional Defense —- Certificate Holders vs Trust

Litigators often miss the point that the foreclosure is brought on behalf of certificate holders who have no right, title or interest in the debt, note or mortgage — and there is no assertion, allegation or exhibit that says otherwise.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Here is an excerpt from one of my recent drafts on this subject:

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LACK OF SUBJECT MATTER JURISDICTION: the complaint attempts to state a cause of action on behalf of the certificate holders of an apparent trust, although the trust is not identified as to the jurisdiction in which it was created or the jurisdiction in which it operates.
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Even assuming that such a trust exists and that it issued certificates, there is no allegation or attachment of an exhibit demonstrating that the certificates contain a conveyance enabling the holder of the certificate to enforce the alleged debt, note or mortgage upon which the complaint relies. In fact, independent investigation shows the exact opposite.
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Nor is there any allegation that any money is due to the certificate holders or any allegation that the certificate holders possess the promissory note or have the right to enforce either the promissory note or the mortgage. Even if the indenture for the certificates were produced before this court, it would only show a contract for payment from a party other than the homeowner in this action. Accordingly, no justiciable controversy has been presented to the court. In the absence of an amendment curing the above defects, the complaint must be dismissed for lack of subject matter jurisdiction.
*
STANDING:
  1. As to Bank of New York Mellon there is no allegation or attachment to the complaint that alleges or demonstrates an agency relationship between Bank of New York Mellon and the certificate holders, on whose behalf the complaint is allegedly filed. If Bank of New York Mellon is the trustee of an existing trust and the trust is alleged to own the debt note and mortgage along with the rights to enforce, then the agency or representative capacity of Bank of New York Mellon is with the trust, and not with the certificate holders. Based upon the allegations of the complaint and independent research defendant asserts that there is no representative capacity between Bank of New York Mellon and the certificate holders.
  2. As to the alleged trust which has not been properly identified there is no allegation that the action is brought on behalf of the trust; but the implied allegation is that the trust is the plaintiff. The complaint states that the action is brought on behalf of the certificate holders who merely hold securities or instruments apparently issued in the name of the alleged trust. There is no allegation or exhibit attached to the complaint that would support any implication that Bank of New York Mellon possesses a power of attorney for the certificate holders or the trust. In fact, in litigation between Bank of New York Mellon and investors who have purchased such certificates, Bank of New York Mellon has denied any duty owed to the certificate holders.
  3. As to the certificate holders, there is no allegation or exhibit demonstrating that the certificate holders have any right, title or interest to the debt, note or mortgage nor any right to enforce the debt, note or mortgage. Based upon independent research, the certificate holders do not possess any right, title or interest to the debt, note or mortgage nor any right to enforce. In fact, in Tax Court litigation the certificate holders are deemed to be holding an unsecured obligation, to wit: a promise to pay issued in the name of a trust which may simply be the fictitious name of an investment bank. There is no contractual relationship between the defendant and the certificate holders. Further, no such relationship has been alleged or implied by the complaint or anything contained in the attachments to the complaint.
  4. As to the certificate holders, they are neither named nor identified. Yet the complaint states that the lawsuit is based upon a claim for restitution to the certificate holders. The reference to the trust may be identification of the certificates but not the certificate holders. In fact, based upon independent investigation, the holders of such certificates never received any payments from the borrower nor from any servicer who collected payments from the borrower nor from the proceeds of any foreclosure. In the case at bar. the complaint is framed to obscure the fact that the forced sale of the property will not be used to satisfy the debt, note or mortgage in whole or in part.
  5. As to any of the parties listed in the complaint as being a plaintiff or part of the plaintiff there is no allegation or exhibit demonstrating that any of them paid value for the debt, or received a conveyance of an interest in the debt, note or mortgage from a party who has paid value for the debt as required by article 9 § 203 of the Uniform Commercial Code as adopted by state law, which states that a condition precedent to the enforcement of a mortgage is the payment of value for the debt. Hence regardless of who is identified as being the actual plaintiff none of the parties listed can demonstrate financial injury arising from nonpayment or any other act by the defendant.
  6. In the absence of any amendment to cure the above defects, the entire complaint and exhibits must be dismissed with prejudice for lack of subject matter jurisdiction and lack of a plaintiff who has legal standing to bring a claim against the defendant.
The only thing I would add to the existing second affirmative defense is the affirmative statement that based upon independent investigation, such signatures were neither authorized nor proper, to wit: they consist of forgeries or the product of robosigned in which the signature of a person is affixed without knowledge of the contents of the instrument to which it is affixed.
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In my opinion, the specificity that I have employed in the above comments not only provides a basis for dismissal, but also the foundation to support Discovery requests that might otherwise be denied, to wit: who, if anyone, ever paid money for the debt?

Consent Order Contains Admission of False Affidavits and False Chains of Title

A lot of student loan debt ends up being claimed by “Trusts” that are exactly like REMIC trusts except they are not about residential mortgages. And as I have previously pointed out on these pages, the enforcement of those debts has gone through the same process of removing the risk of loss from those who made the loan and the creation of a scheme where it is perhaps impossible to find or identify any creditor who owns the debt by reason of having paid for it (as opposed to “owning the debt” by reason of having the promissory note or a copy of it).

As a side note, to the extent that debtors are prevented from discharging such debt because of government guarantees, I argue that such exclusion is inapplicable. Students should be able to discharge most student debt in bankruptcy. The risk has already been eliminated if the loans are subject to claims in securitization. The purpose of the guarantee has thus been eliminated.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

Hat tip to summer chic

In this case, the CFPB filed suit essentially asserting its own administrative findings that mirror the defenses of homeowners in foreclosure, to wit: that the affidavits filed are false, and they are falsely signed and notarized, containing false information about title to the loan and false information about the business records.

What is interesting about this case is that the parties are submitting a consent order which includes as those findings of the court in paragraph 4 of the proposed consent order which states as follows:

See https://files.consumerfinance.gov/f/documents/201709_cfpb_national-collegiate-student-loan-trusts_proposed-consent-judgment.pdf

4. Since at least November 1, 2012, in order to collect on defaulted private student loans, Defendants’ Servicers filed Collections Lawsuits on behalf of Defendants in state courts across the country. In support of these lawsuits, Subservicers on behalf of Defendants executed and filed affidavits that falsely claimed personal knowledge of the account records and the consumer’s debt, and in many cases, personal knowledge of the chain of assignments establishing ownership of the loans.In addition, Defendants’ Servicers on behalf of Defendants filed more than 2,000 debt collections lawsuits without the documentation necessary to prove Trust ownership of the loans or on debt that was time-barred. Finally, notaries for Defendants’ Servicers notarized over 25,000 affidavits even though they did not witness the affiants’ signatures.[e.s.]

PRACTICE NOTE: HOW TO USE THIS INFORMATION. Sometimes I erroneously assume that people know what to do with this type of information. So let’s be clear.

  • This information means that servicers, subservicers and lawyers claims regarding chain of title, business records, and their use of affidavits or even testimony is not entitled to the same presumption of credibility that might otherwise apply.
  • That means that the presumptions on the use of business records are not entitled to a presumption of credibility and that additional foundation testimony must be offered in order to assure the court that what is contained in the document is authorized, properly signed, properly notarized and most importantly accurate.
  • The entire case against debtors in these situations is entirely dependent upon the use of legal presumptions  that can be rebutted. Rebuttal of presumptions takes place under two general categories.
  • The first is that that the presumed fact can be shown to be untrue.
  • The second ius that the process of presumption should not apply because the proponent of the document clearly has a stake in the outcome of litigation and has a history of falsifying such documents.
  • Once you rebut the presumption, the case against the debot (homeowner, student) is gone.
  • The opposition has no evidence of proof of payment for the debt, and this has no foundation for claiming authority of the servicer, trustee or even the lawyer.
  • Such authority must come from the owner of a debt who has paid value for it.

Dan Edstrom senior forensic loan examiner writes the following:

This is similar to what is in the foreclosure review consent orders (from US Bank Consent Order dated April 13, 2011):
(2) In connection with certain foreclosures of loans in its residential mortgage servicing portfolio, the Bank:​
(a)​ filed or caused to be filed in state and federal courts affidavits executed by its employees making various assertions, such as the amount of the principal and interest due or the fees and expenses chargeable to the borrower, in which the affiant represented that the assertions in the affidavit were made based on personal knowledge or based on a review by the affiant of the relevant books and records, when, in many cases, they were not based on such personal knowledge or review of the relevant books and records;
(b) filed or caused to be filed in state and federal courts, or in local land records offices, numerous affidavits that were not properly notarized, including those not signed or affirmed in the presence of a notary;​
(c)​ failed to devote to its foreclosure processes adequate oversight, internal controls, policies, and procedures, compliance risk management, internal audit, third party management, and training; and​
(d)​ failed to sufficiently oversee outside counsel and other third-party providers handling foreclosure-related services.​
(3)​ By reason of the conduct set forth above, the Bank engaged in unsafe or unsound banking practices.
And what about this quote from the student loan consent order:
In addition, Defendants’ Servicers on behalf of Defendants filed more than 2,000 debt collections​ lawsuits without the documentation necessary to prove Trust ownership of​ the loans or on debt that was time-barred.
So wait a minute. They allege the debt cannot be discharged in BKR, but (alleged) student loan debt that hasn’t been paid on in years – isn’t it time barred?  How does collection action work after decades where they took affirmative debt collection steps after the debt was time barred?  In the instance I am thinking about, a dentist was BARRED from taking patients with some type of federally covered insurance and this forced them out of their occupation.  The student loan debt hadn’t been paid in 2 or 3 decades (in California).
So in a related case (time-barred debt) in BKR in CA, a debtor filed a lawsuit against a creditor for filing a proof of claim on a time-barred debt. He lost, the court ruled that if the proof of claim was not objected to (with the relevant objection being that the debt was time-barred), the debtor waived the affirmative defense.

How to Distinguish Between Ownership of the Debt, Ownership of the Note and Ownership of the Mortgage (or Deed of Trust)

Amongst the lay people who are researching issues regarding who actually can enforce a mortgage, there is confusion arising from specific terms of art used by lawyers in distinguishing between a debt, a note and a mortgage. This article is intended to clarify the subject for lawyers and pro litigants. The devil is in the details.

Bottom Line: In most cases foreclosures are allowed because of the presumption that the actual original note has been physically delivered to the current claimant from one who owned the debt because they both had paid money for it. In most cases merely denying that fact is insufficient to prevent the foreclosure because the court is erroneously presuming that even if the foreclosure is deficient the proceeds of sale will still go to pay the debt.

In most cases those presumptions are untrue but must be rebutted. And the way to rebut those presumptions is to formulate discovery that asks who paid for the debt, when and who were the parties to the transaction?

The  lawyers from the foreclosure mills will fight tooth and nail to prevent an order from the court directing them to answer the simple question of who actually owns the debt by reason of having paid value for it and thus who will receive the foreclosure sale proceeds as payment for the debt. The answer is almost always the same — the foreclosure mill is unable to identify such a party thus conceding the lack of subject matter jurisdiction and standing to bring the foreclosure action.

Eventually some party will be identified by changes in the law as being the legal owner of the debt. thus cleaning up the jurisdictional issue caused by utilizing parties who have neither suffered any financial injury nor are threatened with any such financial injury. But for now, the banks are stuck with the mess they created.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

Transfer of debt is by payment for the debt. Payment means you have a legal and equitable right to claim the debt as your own. Payor is the new owner of the debt and the Payee is the prior owner of the debt. There are no exceptions.

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The note is evidence of the debt. It is not the debt.
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Payment of money to a borrower creates a debt or liability regardless of whether or not any document is signed.
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Signing a document promising to pay creates a liability regardless of whether or not there was ny payment of money. In fact, if someone buys the note for value they become a holder in due course and the maker is liable even if they never received any money, value or consideration.
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Enforcement of the debt alone is governed by statutory and common law.
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Enforcement of notes and enforcement of the security instrument (mortgage or deed of trust) is controlled strictly by the adoption of the Uniform Commercial Code (UCC).
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Article 3 UCC governs the negotiation and enforcement of paper instruments containing an unconditional promise to pay a certain sum on a certain date.
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Article 9 governs the transfer and enforcement of security agreements (mortgages and deeds of trust).
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Whereas Article 3 does not require the holder of the note to be the owner of the debt for purposes of enforcement of the note, Article 9 requires the holder of the mortgage to be the owner of the debt as a condition precedent to enforcement of the mortgage. No exceptions.
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Ordinarily the execution of the note causes the debt to be merged with the obligations under the terms of the note. But this is only true if the owner of the debt and payee under the note are the same party. If not, then the execution of the note creates two distinct liabilities — one for payment of the debt and one for payment under the terms of the “contract” (i.e., the note).
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Before securitization it was customary that the owner of the debt had paid money to the borrower as a loan, and the execution of the note formalized the scheme for repayment. Hence under the merger doctrine the borrower who accepted the loan and the maker of the note were the same party and the Lender of the money to the borrower was also the payee named in the note.
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Now this is not always the case and appears to be not the case in most loans, which is why the banks have resorted to fabricated backdated forged and robosigned documents. The Lender in many if not most loan originations was not the party named as payee on the note. And the party named as payee on the note had no authority to represent the interests of the lender. Where this is true, merger cannot apply. And where this is true, enforcement of the note is NOT enforcement of the debt. Rather it is enforcement of a liability created entirely by contract.
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Foreclosure of a mortgage must be for payment of the debt, not just the liability on the note. All states have case law that says that transfer of mortgage without the debt are a nullity. This executing and receiving an assignment of mortgage and even recording it is a legal nullity unless the recipient paid money for the debt and the transferor was conveying ownership of the debt because the transferor had paid money for the debt. If those conditions are not met the executed and recorded assignment of mortgage is a legal nullity and the title record must be viewed by the court as lacking an assignment of mortgage.
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The judiciary has not caught up with these discrepancies in most instances. Hence a judge will ordinarily presume that the delivery and endorsement of the note and the assignment of the mortgage was equivalent to the transfer of title to the debt, with payment being presumed for the debt. So while the law requires ownership of the debt by reason having paid for it, the courts presume that the debt was transferred along with the paper, subject to rebuttal by the maker and borrower.
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The rubber meets the road when in discovery and defenses the borrower raises the issue of who paid for the debt and when. In the current world of securitization the answer will be the same: the banks won’t tell you and they won’t admit that the party named as claimant in the foreclosure never paid for the debt, despite appearances to the contrary. 

Chase-WAMU: Is it time to Declare Non Judicial Foreclosure Unconstitutional As Applied?

Faced with a notice of foreclosure sale from a company claiming to be the trustee on a deed of trust, homeowners in judicial states are forced to defend using well known facts in the public domain that are not evidence in a court of law. This is particularly evident in scenarios like the Chase WAMU Agreement with the FDIC and the US Bankruptcy Trustee on September 25, 2008.

In my opinion the allowance for nonjudicial foreclosure in circumstances where a new party appears under a lawyer’s claim that the new party is the beneficiary under a deed of trust under parole claims of securitization is an unconstitutional application of an otherwise constitutional  statutory scheme.

All such foreclosures should be converted to judicial and the claimant must prove the essential element under Article 9 §203 UCC that it has a financial interest in the debt because they paid for it. Forcing homeowners to prove that such an interest does not exist is requiring homeowners to have access to knowledge that is unavailable and solely within the control of the party falsely claiming to have the right to enforce the deed of trust and promissory note.

In my opinion this is an unconstitutional application of an otherwise constitutional statutory framework. In plain language it favors expediency and moral hazard over truth or justice.

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

I have received questions, most notably from Bill Paatalo, the famed Private Investigator who has provided so much information to lawyers, homeowners and a=everyone else about the foreclosure crisis relating to non judicial foreclosures and the Chase-WAMU farce in particular. Here is my answer:

If what you’re saying is that the FDIC never became the beneficiary under the deed of trust, that is correct. But the legal question is whether it needed to become the beneficiary under the deed of trust. As merely a receiver for WAMU the question is whether WAMU was a beneficiary under the deed of trust and the answer is no because they had already sold their interest or presold it before origination.

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If WAMU was an actual beneficiary then the FDIC was the receiver for the beneficial interest held by WAMU. If that is the case the FDIC could have been represented to be beneficiary on behalf of the WAMU estate for foreclosures that occurred during the time that FDIC was receiver.
*
If WAMU was not an actual beneficiary and could not, as your snippet suggests, sell what it did not own, then the FDIC’s receivership is irrelevant except to show that they had no record of any loans owned by WAMU.
*
One key question that arises therefore is what is a beneficiary? In compliance with Article 9 §203 UCC I think all states that a beneficiary is one who has paid value for the debt, owns it and currently would suffer a debit or loss against that asset by reason of nonpayment by the borrower. Anything less and it is not a beneficiary. And if it isn’t beneficiary, it cannot instruct the trustee to send out notices as though it was a beneficiary.
*
So any notice of substitution of trustee, which starts the whole foreclosure process is bogus — i.e., void as in a nullity. The newly named trustee does not possess the powers of a trustee under a deed of trust. Hence the notice of default, sale and trustee deed are equally bogus and void. They are all nullities and that means they never happened under out laws even though there are lawyers claiming that they did happen.
*
Despite the Ivanova decision in California declaring that such foreclosures can only be attacked after the illegal foreclosure, this is actually contrary to both California law and the due process requirements of the US Constitution.
*
With more and more evidence of fake documents referring to nonexistent financial transactions, the time is ripe for some persistent homeowner, with the help of a good lawyer, to challenge not only the entire Chase-WAMU bogus set up, but to get a ruling from a Federal judge that the abr to preemptive lawsuits to stop collection or foreclosure activity is unconstitutional as applied.
*
In nonjudicial states it converts a statutory system which is barely within constitutional bounds to an unconstitutional deprivation of property and civil rights without due process, forcing the homeowners to come up with answers and data only available to the malfeasant players seeking to collect revenue instead of paying down the debt.

Finally a Judge Asks the right Questions about TILA Rescission and Invites Briefs

The time may now be coming where the court systems and Federal and State legislatures must come to terms with two inescapable legal facts:

(1) That borrowers who sent TILA rescission notices — and particularly those who sent them within 3 years of consummation of the mortgage — still own the land that was deemed “lost” in foreclosure.

(2) That such borrowers possess valid claims to recover title. possession and money damages. 

It was bound to happen and now it has. In one case, a judge is asking the following questions and inviting briefs on the following subjects:

  1. What is the effect of the failure to return consideration upon an attempt to exercise the right of TILA Rescission?  
  2. What is the effect on rescission if the borrower continues to pay? 
  3. Does TILA pertain to refinancing?

See HOW TO FRAME TILA RESCISSION IN YOUR PLEADINGS

=======================================

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
The Tila Rescission Statute 15 USC §1635 requires, as a condition precedent to demanding payment of the borrower’s debt, that the parties who received money from the borrower arising out of the loan agreement return all such money to the borrower first before anyone can make a claim for repayment. This is why bank lawyers have long advised their arrogant bank clients that failure to follow the rules set forth in the TILA Rescission statute could not only result in loss of enforcement of the mortgage which is automatic, but also loss of the right to enforce the debt.
*
The investment houses, who were the real parties in interest behind the origination or acquisition of residential loans, have long been bullying their way through the TILA Rescission statute since it undermines the value of the derivative infrastructure built and sold over every loan. Thus far they have succeeded in getting virtually all courts. except the Supreme Court of the United States, to go along with the bank narrative regarding 15 USC §1635. In plain terms they got what they wanted: judges ignored TILA rescission and entered orders as though it didn’t exist. But it did exist by operation of law and the US SUpreme Court said so.
*
Failure to return consideration bars collection of the debt. And there are two other things that the “lenders” are required to do as conditions precedent (return cancelled original note, which we all know they don’t have, and file a satisfaction and release of the mortgage in the county records so that the world will know that rescission has occurred. This is the replacement for cancellation of the loan agreement. The new “agreement” is set forth by the statute.
*
The judge doesn’t ask “effect on what?” The mortgage in all events is void, by operation of law. Neither the borrower nor the  creditor can effectively take any out of court action that changes that.
*
There is no unilateral or bilateral action that can be taken by either or both parties to change something that is effective “by operation of law.” The only exception MIGHT be (and probably WILL be) that rescissions sent outside the 3 year period of expiration could conceivably be ignored, but if they are recorded in county records only a party with legal standing could have the rescission notice removed from the chain of title with a court order.
*
And the problem for the banks is that they have no party who could be defined as a creditor — a party who had paid value for the debt and owns the debt, to wit: a party to whom the debt is currently owed. Another way of saying it, if you were listening to to the forensic auditor seminar last Friday, is that only a party who was carrying the borrower’s debt as an asset on its balance sheet as a loan receivable could claim the status of owner of the debt i.e., creditor.
*
The genius of the way securitization has been practiced with respect to residential loans, is that there is nobody who takes a loss from nonpayment of any debt. Nobody is entitled to actually receives the borrower’s payments or the proceeds from a foreclosure or other sale. The money that is received therefore, is revenue upon which they pay no tax because they report it as repayment of debt rather than income. This explains why you can’t get a straight answer on “who owns my debt.” The answer is nobody. But that answer is counter intuitive which is another way of saying nobody wants to actually believe that.
*
The issue is whether the borrower’s should forfeit their homes on a scheme that was based upon receipt of revenue rather than repayment of debt?
*
TILA Rescission highlights this problem because it cuts down the veil or curtain behind which the banks hide. There is no more loan agreement and there is no more note or mortgage from which all sorts of legal presumptions can arise. While I would have thought this day would come sooner we finally have our first judge asking the right questions. Thus the hard “talk” begins.
*
  • What is worrisome is the Judge’s use of the word “attempt.” He phrases the questions in the context of an “attempt at rescission” rather than the event of rescission. Either the rescission was sent or it wasn’t. In Jesinoski v Countrywide that is the end of the issue. If it was sent then TILA rescission is effective by operation of law. There is no attempt which insinuates that TILA rescission is a claim rather than an action with legal consequence. There is no attempt and there is no claim.
*
Paying on the mortgage is only to protect the borrower’s credit rating and prevent action to foreclose on the mortgage that does not exist but will obviously be treated as existing in the current judicial climate. It does nothing to effect what has already occurred by operation of law. The loan agreement is cancelled and with it the note and mortgage became void. The only consequence, rather than effect, is such payments increase the amount of money due back from the parties to whom the money was given or from  parties who originated the loan agreement under TILA or unjust enrichment. No person, whether borrower or lender, can “waive” a legal event that occurred by operation of law any more than they can ignore a court order without being in contempt of court.
*
TILA does pertain to refinancing. I don’t know what is meant by instant “circumstances.” Many “modifications” are actually refinancing. The creditor has changed and remains concealed. The entire purpose of the banks in modification is to validate what is otherwise a void or unenforceable loan agreement using undue duress or even extortion to get the borrower to sign away rights.

Tonight! How to Use TILA Rescission in Court! The Neil Garfield Show 6PM EDT

FORENSIC AUDITORS TAKE NOTE

Thursdays LIVE!

The Neil Garfield Show

or prior episodes

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

*******************************

There are many potential claims arising out of attempted foreclosure after TILA rescission is effective.
*
But one of them is not a violation of your rescission rights. By pleading that you are putting into play the burden of proving the effectiveness of rescission which has already occurred by operation of law.
*
By pleading or arguing such a notion you are inviting interpretation form a court that is only too happy to reject your claim. In most cases your right to enforce the duties of a lender under the TILA Rescission statute, 15 USC §1635 has long since expired under TILA so you have no claim to violation of your rescission rights. You are making a claim that does not exist.
*
Nearly all successful foreclosure defenses are based upon the defense narrative that the party bringing the foreclosure action has no right to bring it. In the case where rescission has been effected, there is no claim for foreclosure anymore. The debt remains but there is a new way to collect it under the TILA Rescission statute.
*
You do have claims for violations of other statutes that protect consumers against fraudulent or wrongful claims and provide damages and the basis for declaratory, injunctive and supplemental relief. So you probably have a claim under the FDCPA in addition to other statutes. And you have claims under common law.

What to Think About on Appeal From an Unfavorable Trial Court Decision

In response to the rising number of requests for us to write briefs or narrations for briefs I submit this article which is my recent response to such a request. Here is an uncomfortable fact: most appeals arise because of mistakes made by the litigant in trial court, not the judge. All appeals MUST be based upon what did happen in the trial court not what should have happened. 

=======================================

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

*

Yes we write briefs or narration for briefs all the time. Costs run from a low of $6500 to a high (so far) of $15,000. It depends upon how much we need to do. Legal research alone is usually around $1500-$2500. You should have local counsel or appellate counsel to advise you on appellate procedure. There are time limits on everything including filing the notice of appeal which must state specifically what order is being appealed and that it is a final order. Sometimes people get kicked out of appellate process because their notice of appeal cited the wrong order and then the time limit for filing the correct notice has expired. It is very technical.

*
FACTOID: There are statistics on appeals. Generally only one in 6 appeals are successful by any measure and of those many of them are only partially successful requiring additional proceedings in the trial court. The higher you go in the hierarchy of appellate courts the less your chances your case will even be heard, much less decided in your favor. Neither the State nor the U.S, Supreme Court is under any obligation to hear your case. Of the 15% +/- that are “successful” at least half are criminal cases. That means cases involving a civil matter like foreclosure have about a 1 in 12 chance of being “successful” on appeal.
*
EXCEPTION TO THAT GENERAL RULE: It was pointed out to lawyers at a seminar at which bankruptcy judges were presenters, that the typical appeal from the decision of a bankruptcy judge is more susceptible to appeal than the ordinary decisions of courts of general jurisdiction. That is partly because bankruptcy judges) formerly called “magistrates” have limited jurisdiction and they frequently overstep their authority  to make any decision.
*
There are three separate and optional avenues for appeal. Most appeals from Bankruptcy court go to  a Bankruptcy Appellate Panel which is the least likely place to get a reversal. Second, many appeals are made direct to the Circuit Court of Appeals in which appellants typically don’t fare any better than the BAP. And lastly the one least used is an appeal to the Federal District Judge of general jurisdiction where the odds of success rise to 50%. The judges who pointed this out were perplexed why more people didn’t take that route.
*
When writing a brief, your audience is a clerk for the appellate judges. That is a young lawyer, so assume nothing. If you don’t grab the attention of the reader (clerk) immediately your appeal will be thrown onto the pile of cases that will be affirmed.
*
Appellate courts do not try cases — a fundamental fact that is often forgotten by lawyers and unknown to pro se litigants. Even if every judge on the panel thinks they would have decided the case differently they will probably affirm the trial judge’s decision. The principle working here is finality. The courts exist to create finality to disputes, for better or for worse. All decisions are viewed and reviewed in the context of preserving finality. The appellate court will only reverse a decision that is fundamentally wrong on the law. It will almost never reverse a decision that was wrong on the facts.
*
Most cases in which an appellate decision results in reversal are set up at trial. That means careful trial preparation such that a resistant judge is boxed into a corner and the issues for appeal are plain and simple. If your contested issue involves the judge’s discretion the trial court decision will be affirmed practically every time.
*
That said well crafted appeals that are presented with credibility and persuasion can still be filed with at least some prospect for success. Sloppy work will tank even the best case on appeal. Citations to the actual record on appeal are required — not arguing evidence that did not get into the court record (unless exclusion of evidence is the basis of the appeal). In foreclosure cases this is rare because the borrower lacks the evidence to “prove” a case.
*
The foreclosure case is about whether the party seeking the remedy of foreclosure was entitled to do so. Hence the issue in foreclosure cases is more often about the admission of evidence than the exclusion of evidence. Anyone can dash off a brief and “justify” a fee. Only lawyers well versed in the subject and the law surrounding the subject have any chance of producing an effective brief. The brief must be well-written with proper language, punctuation, grammar and context. It must be logical and persuasive. 

How to Use Reports and Affidavits in Foreclosure Litigation: Required Reading for Forensic Audit Seminar Next Friday

Reports and affidavits are helpful but not always useful as evidence. It seems that many people think an affidavit from me will be the magic bullet in their case. It could be but only with proper presentation and following the rules of civil procedure and the laws of evidence.

This is required reading for people attending the forensic audit seminar next Friday. In the end I am seeking your reports to conform to the style and content of what I present at the seminar, in this article and other articles appearing on this blog. The end result for homeowner and their attorneys is to file reports and affidavits that are not only admitted into evidence but also given great weight by the trier of fact.

In plain language I would like to outsource the preparation of the forensic reports on the facts and limit my involvement to what I do best: present the facts with opinion corroborated by those facts. That means learning which facts are likely to give the homeowner’s lawyer some traction and which facts are just surplus accusations that can never be proven in a foreclosure case.

Because in a foreclosure case, the issue is not whether the players are bad players, evil or even thieves. The issue is whether the players can successfully present a case in which it appears that they have satisfied the conditions precedent and the elements of a prima facie case for enforcement of the mortgage through foreclosure.

The answer to that is either yes or no. And walking into any courtroom the presumption, at the very beginning, is that the answer is yes. Our job is turn that around and persuade through logic and facts that the presumption of the existence of the elements for a prima facie case for foreclosure are missing. And while out burden of proof is only a predominance of the evidence, in practice, for homeowners, that translates as something more than “more likely than not.” Where the answer is close, the court will always lean toward the party seeking foreclosure.

=======================================

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

*

An affidavit is a sworn statement. It is not evidence unless a judge admits it as evidence. And it get no weight as evidence unless the trier of fact (the judge in most foreclosure cases) decides to give it weight. The judge won’t allow it or give it weight if it is merely opinions that are not persuasively presented by reference to specific facts or absence of facts. So while my affidavit may be helpful, it is not the opinion that counts nearly as much as the credibility and persuasiveness of the affidavit or report. There is also confusion as to how and when to use forensic reports or affidavits from me. So let me put it this way.

*
In what I call the case analysis, we ordinarily perform vigorous investigation and analysis and then sum up what we have found in the context of what we think might be the best issues on which you could get traction in court.
*
Sometimes we render an opinion and conclusions based upon a forensic report done by others, which we prefer to do. We then issue a report that can be formatted into the form of an affidavit. The issue being addressed in this article is for forensic examiners, homeowners and their lawyers.  An affidavit is frequently requested from me under the mistaken belief that possession of such an affidavit will be crushing blow to the lawyers seeking to enforce the mortgage or deed of trust on behalf of a party who does not ordinarily qualify as a claimant.
*
The simple truth is that the affidavit, no matter how strong or how great does nothing by itself. The issue is how and when the affidavit is used and under what circumstances — e.g. will the homeowner seek to have it introduced as fact or opinion. And will my testimony be used to pride adequate foundation for the affidavit to be introduced as evidence in a court proceeding.
*
So frequently the affidavit homeowners are seeking is “limited scope.” That code for “on the cheap.” I don’t issue reports or affidavits that I don’t think I can defend easily in court under cross examination.  But even if the scope is limited to one question, to wit: in my opinion is US bank a real party in interest, as you know I have already answered that in the articles I have published, although such articles are not necessarily applicable to any one specific case. The answer was “NO.”
*
And you say you want that answer in affidavit form. This is where consultation with local counsel is critical. There are several different ways the affidavit can be phrased and I have some doubts as to whether the answer, in the form of an affidavit, is going to help you. If you don’t know how and when to use the affidavit it won’t do you any good.
*
But I concede that it might do some good inasmuch as sometimes the affidavit is accepted in court in connection with a motion for summary judgment. In all other circumstances the affidavit is not admitted into evidence unless I am retained to appear in court or at deposition in lieu of live testimony in which I give live testimony providing the foundation for the admission of the affidavit into evidence.
*
The admission of opinion evidence is restricted based upon the court’s acceptance of my credentials, experience, education, training etc. To date no court in any state has rejected me as an expert who could give an opinion on the securitization of residential debt.
*
But in all cases where my affidavit or testimony was accepted it wasn’t the opinion that was given weight, it was my report on the facts, revealing an absence of necessary elements to the claim for enforcement of the debt, note or mortgage.
*
Opinion evidence is not admissible without a court approval or order. If it is opposed there is a hearing on whether to allow opinion evidence and if so whether it will be allowed from me.
*
So an affidavit that for a lay person or their lawyer could be helpful to shore up confidence in the attorney’s presentation of the defense, but not much more. It would look something like this.
Based upon the chain of title revealed in the forensic report and my examination of the actual documents recorded, together with my education, knowledge, my proprietary database, and my experience in the securitization of businesses and assets including debt, it is my firm opinion that US Bank never purchased the debt of the homeowner nor did US Bank ever receive ownership of the debt from any person who had paid value for the debt. 

*

Third party claims of possession of the homeowner’s promissory note are attenuated in terms of credibility and lack foundation as to whether such possession by third parties would be possession by US Bank. But such claims are nevertheless taken as true for purposes of this opinion.
 
Based upon Article 9 §203 of the Uniform Commercial Code (UCC) there are two deficiencies in the claim of U.S. Bank to enforce the security instrument (mortgage), to wit: 
a) it does not and never has complied with the condition precedent in the UCC that it paid value and therefore has a direct financial stake in the come of a forced sale through foreclosure (i.e., the sale will not produce money proceeds that are paid to US Bank either in a representative capacity nor on its own behalf and
*
b) US Bank does not possess any claim for restitution because it has suffered no loss. Nor is US Bank expecting the receipt of any funds regardless of whether or not the homeowner makes a payment. While foreclosures have been concluded in the name used as claimant in this case, the proceeds of sale of foreclosed property has never been received or deposited by US Bank or on behalf of U.S. Bank.
*
The claim to enforce the mortgage like all civil claims must present a legal person that is possessed of a claim for restitution of a legal debt owed to the claimant based upon a duty of the opposing party owed to the claimant that was breached by the opposing party that produced real legally recognized injury to the claimant.
*
Failure to own the debt is therefore failure to present a legally recognizable claim to enforce the security instrument. Such failure is generally regarded in case decisions to be construed as a lack of jurisdiction by the trial court to consider any controversy where the real parties in interest are not present in person or by proxy.
*
In this case, neither of these conditions is met. The implied trust (and/or US bank as “trustee”), if it/they has any legal existence, has never entered into any financial transaction in which the debt was sold for value or transferred by a person who had paid value. This eliminates compliance with the UCC condition precedent to enforcement and eliminates judicial standing for US Bank to even bring a claim inasmuch as it lacks a legally recognized claim for anything against the homeowner in the case at bar. 

*
The affiant concedes that there is confusion in case decisions on this subject in which possession of the original note gives rise to the presumption of a right to enforce it. While it is doubtful that US Bank ever acquired possession of the original note much less rights to enforce the note, even assuming those conditions were met, that would only raise a presumption of title to the debt and the right to enforce it. But that presumption is factually and completely rebutted by the absence of any claim, transaction or instrument indicating that on any certain day the debt was sold to US Bank.
*
In fact, my specific knowledge regarding the securitization of debt is that an investment bank (brokerage firm) funded the origination or acquisition of the debt and retained ownership of the debt for usually less than 30 days. Hence no transaction in which the debt was sold could have taken place without the participation of the investment bank who advanced the funds. No such transaction ever occurred between the investment bank and US Bank.

Hence the subject debt was never sold or entrusted to US Bank. Hence possession of the note, at most, entitles the possessor to enforce the note, albeit not as a holder in due course since no value was paid. Such enforcement would be under Article 3 of the UCC and not under Article 9 relating to enforcement of secured transactions. 
*
My conclusion is that none of the parties named in connection with the claim against the homeowner have legal standing nor have any of them satisfied the condition precedent to enforcement of the mortgage through foreclosure.

In answer to the specific question posed by the homeowner’s attorney as to the status of US Bank in connection with this loan agreement, US Bank is not a real party in interest with any actual financial stake or risk of loss relating to the loan agreement nor was its purpose ever to serve as an actual trustee for a legal trustee of an actual trust that had any actual financial stake or risk of loss relating to the subject loan agreement.

Although certificates were sold in the name of the trust by the investment bank and other derivative contracts were sold based upon the value of the certificates, none of those contracts transfers any right, title or financial interest, nor any right to enforce, the subject debt, note and mortgage.

Hence any representations that US Bank is serving as authorized representative or trustee on behalf of the holders of such certificates or contracts is not relevant, since none of them have the right to enforce nor any ownership of the debt, even if they did receive the risk of  loss associated with the actual debt. 

So here is where local counsel comes into the picture. Depending upon how he or she wants to present your defense, is the above what they want, or do they want something more, less or different? Are you getting involved in pleading, discovery, preparation for a hearing or trial?

Because my credentials give me credibility and status, and because I would rather review forensic reports than prepare them, I am giving the free forensic law seminar on August 2 which is sold out. It is my hope that the business plans of forensic examiners will be enhanced by associations with established experts like myself in which affidavits are filed not by the examiners whose credentials nearly always in doubt but rather under the signature of someone whose credentials are not in doubt.

Tonight! Why the Bankruptcies of DiTech and Aurora Matters! Neil Garfield Show 6PM EDT

Thursdays LIVE!

The Neil Garfield Show — WEST COAST

with CHARLES MARSHALL AND BILL PAATALO

or prior episodes

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

*******************************

I get that the complexity of securitization and foreclosure litigation can be mind-numbing even to an experienced litigator. But once you start winning you get a rush. Tonight we talk about making some of the more tedious aspects of examination of the case productive for the lawyer and for the homeowner.

The continued appearance of DiTech and or Aurora is actually a sparkling example of arrogance emanating from the investment banks that too often control the narrative. If either DiTech or Aurora ever owned a single debt, it was probably one in a million.

With the bankruptcy petitions involving several entities bearing the name of DiTech or Aurora and additional bankruptcies involving closely related entities like GMAC and Lehman Brothers, somehow we have been led to believe that the investment banks were so negligent that they actually left the loans in the entities that filed petitions for relief in bankruptcy with schedules that were devoid of virtually any loans.

On the Show tonight Charles and Bill address the following:

How MERS misused the transfer of Aurora servicing rights to Nationstar, all starting out of the Lehman Brothers BK following the Mortgage Meltdown.

How borrowers can use these servicer bankruptcies, particularly the one of Ditech, to advance the following:

– Using notices (of the Ditech) of stay to manage litigation options;

– Ditech’s non-judicial foreclosure auctions are apparently on hold, due to the automatic stay rules and restrictions on recording documents, in their BK. Judicial actions by Ditech should be on hold too. These restrictions even limit Ditech’s ability to direct the removal of Lis Pendens in lawsuits in which they received a judgment.

How Ocwen may be using a recent merger with PHH to shore up their book of business, to ameliorate credit issues or avoid bankruptcy.

How to Put Leverage Back Into the Hands of Homeowners

You had the ultimate leverage when they needed your signature to start the loan agreement. Now you have the ultimate leverage if you can properly plead and become a credible threat based upon wrongful foreclosure. If a trust is named or implied as mortgagee or beneficiary you are not just threatening the one case of foreclosure filed against you, but all foreclosures initiated in the name of that trust.

Once faced with that threat the rule, contrary to general misconceptions, is that the homeowner will always receive offers of settlement that grant favorable terms. How beneficial? It depends upon the guts and determination of the homeowner and the lawyer for the homeowner.

see Homeowner Reverses Sale to Third Party Bidder Based on Wrongful Foreclosure and Get Modification

See https://livinglies.me/2019/07/19/california-decision-for-borrower-post-sale-in-eviction-proceeding/

See 2019.07.15 – Minute order for MSJ

See http://docplayer.net/37847883-The-exceptions-to-the-anti-injunction-act-a-federal-injunction-may-be-the-shortest-route-to-success-in-a-state-court-suit.html

=======================================

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

The overwhelming majority of lawyers, judges and homeowners believe that they cannot stop a state from allowing the forced sale of the property, even though the the parties who initiate the forced sale are not creditors nor otherwise empowered to to conduct such a sale. Existing statutory and case law shows that is premise is wrong.

Further the existing consensus is that you cannot get a Federal Court to issue injunctions in either nonjudicial or judicial foreclosures. That too is wrong.

The simplest answer to the differentiation between consensus and reality is that not enough people are trying. In the real world of judicial warfare you can always find decisions that support bad applications of law and fact. The fact that this happens is no reason to abandon one’s rights, especially if it involves giving up title to your home and your lifestyle to companies who are merely seeking revenue from destroying your rights and interests.

An additional answer lies in the successful manipulation of news by the investment banks. Since 98% of all foreclosures happen by default (no opposition) banks are able to create the false notion that therefore the foreclosures were all solidly based in fact and law when nobody has ever decided that. By merely putting paper documents in front of judge that at a glance appear to be facially valid, the foreclosure is granted in judicial states and in nonjudicial states the parties initiating foreclosure don’t even need to do that.

Further upon losing cases, the banks almost always reach a settlement with homeowners where the homeowners are paid off to keep silent about their success. This has occurred in tens of thousands of cases that I know about and probably there are many more.

And finally, the banks have succeeded in mastering the psychology of litigation. The first thing they do when confronted by any credible threat in pleading is offer something that is worthless, indicating to the lawyer and the homeowner that their defense must be worthless. Unfortunately, most lawyers and most homeowners give up at his point because they are still trusting in the word of banks that engaged in the largest economic crime in human history. Homeowners hoping for an early end to the nightmare thus reach the false conclusion that any defense is hopeless.

Adding to that is the playbook that insurance companies use. They make it a long and tortuous process to get relief. They use ridicule and anything else at their disposal to delay litigation of your defense and just plain wear you out. That works a lot of the time.

So of all foreclosures initiated in the United States, less than 1/2% are resolved in favor of the homeowner upon reasonable economic terms. In simple numbers that means that a fair result was achieved in about 65,000 cases. In another 350,000+ cases, homeowners were able to hang onto their homes have been able to hang onto their homes on better terms than the original loan agreement. And in another 500,000 cases permanent loan “modifications” occurred wherein homeowners were able to renew payments on a loan agreement that was economically unsound.

For the banks it is “good business.” They get the revenue or cash flow from 98% of all foreclosures and the revenue from “modifications” in which the creditor is still not identified (because the debt has been reduced from actual to theoretical). When they lose they are losing revenue, not suffering any economic loss due to nonpayment.

Of the 65,000 cases reaching a fair result the banks manage to “save” approximately 60% of their revenue from foreclosures by offering deep discounts on loans they do not own. And in only 15,000-20,000 cases were homeowners brave enough and persistent enough to see it through to the end, where they defeated the foreclosure attempt on its merits. Because they had resolved to do that. In all such cases it required a level of perseverance bordering on obsession to get a just result.

Meanwhile in more than 12 million foreclosure cases thus far and climbing, investment banks are walking away with an average of $225,000 per case for a grand total thus far of more than two trillion seven hundred million ($2,700,000,000,000) dollars in revenue upon which they pay no tax because they falsely report it as repayment of debt. This deprived the US government and the economy of more than eight hundred ten billion ($810,000,000,000) dollars in tax revenue.

Why isn’t anyone doing something about that? Simple answer: because the banks control more of our governance than they have ever controlled in the past. The foxes are guarding the henhouse. And if you want to read an exposition of this problem and some methods to address it I strongly recommend reading and studying this plan from Elizabeth Warren whom I have followed with admiration since 2007 before she ever entered politics.

See End-wall-streets-stranglehold-on-our-economy

See the-coming-economic-crash-and-how-to-stop-it

Disclosure: While I do specifically endorse candidates I have donated money to the current and previous campaigns of Senator Warren.

 

California Decision for Borrower Post Sale in Eviction Proceeding

BIG HAT TIP TO STEPHEN LOPEZ, ESQUIRE FOR THIS SAN DIEGO WIN!!

This is the latest of a string of decisions from trial judges who took the time to carefully analyze the law and then facts. In this case the issue was whether the Plaintiff in a lawsuit for Unlawful Detainer could be awarded Summary Judgment simply because the sale had been recorded.

This decision, following the law in all jurisdictions, says that recording the sale is interesting but not dispositive. If the actual sale was void because ti was conducted in favor of a party who was not a true beneficiary under the deed of trust, then the sale itself is void.

This judge quote approvingly from otheor case decisions words to the effect that any other decision would produce the absurd result of allowing completely disinterested parties to issue instructions to sell the property and then claim possession of homestead property.

Despite the long line of “bad results” published, this case shows that a case properly presented, properly argued and based upon sound legal reasoning has a good chance of gaining traction even after the foreclosure has been allowed to proceed. That means you need to prepare and be certain as to your facts and that you don’t ask the court to presume facts in your favor.

We don’t know how this case will  be decided at trial, if there is one. In all probability this case, like thousands of others like it, will most likely be buried by settlement with the homeowner and payment to the homeowner for executing a confidentiality agreement.

For those who bother to actually read the decision it looks like I wrote it. I didn’t. My point is that what I have provided in my articles is not theory. It is fact based upon established law and the real facts of most foreclosure cases. The assignments are void.

If the Plaintiff in this Unlawful Detainer case is unable to prove at trial that it is the owner of the debt it will lose because owning the debt is the key component or element of being a beneficiary under a deed of trust and a key component or element of a valid credit bid.

See 2019.07.15 – Minute order for MSJ

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GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

Key quotes from this decision:

“To establish that he is a proper plaintiff, one who has purchased property at a trustee’s sale and seeks to evict the occupant in possession must show that he acquired the property at a regularly conducted sale and thereafter “duly perfected” his title.” ((Code Civ. Proc., § 1161 a, subdiv. 3.) (Id.))[California]”

“[W]here the plaintiff in the unlawful detainer action is the purchaser at a trustee’s sale, he or she ‘need only prove a sale in compliance with the statute and deed of trust, followed by the purchase at such sale, and the defendant may raise objections only on that phase of the issue of title.”‘ (Bank of New York Mellon v. Preciado, (2013) 224 Cal. App. 4th Supp. 1, citing, Old Nat’/ Fin. Servs. V. Seibert (1987) 194 Cal.App.3d 460, 465, 239 Cal.Rptr. 728.) “The statute” with which a post-foreclosure plaintiff must prove compliance is Civ. Code, § 2924. (Bank of New York Mellon v. Preciado, supra, citing Seidell v. Anglo-California Trusts Co. (1942) 55 Cal.App.2d 913, 920, 132 P.2d 12.)

The term ‘duly’ implies that all of those elements necessary to a valid sale exist, else there would not be a sale at all.” (Bank of New York Mellon v. Preciado, supra at 9-10, citing Kessler v. Bridge (1958) 161 Cal.App.2d Supp. 837, 841, 327 P .2d 241 [internal citations omitted].) This holding by the court in Preciado makes clear that in Code Civ. Proc., § 1161a post-foreclosure trustee sale cases, a focus on the sale itself (rather than simply the recorded title documentation) is part of the analysis of determining  whether the title was “duly perfected.”

subsequent buyer must also prove that the trustee sale was conducted in accordance with Civ. Code, § 2924 and that title has been duly perfected. (Stephens, Parlain & Cunningham v. Hollis, supra, at p. 242.)

[l]f the borrower defaults on the loan, only the current beneficiary may direct the trustee to undertake the nonjudicial foreclosure process. “[O]nly the ‘true owner’ or ‘beneficial holder’ of a Deed of Trust can bring to completion a nonjudicial foreclosure under California law.” (Barrioneuveo v Chase Bank, N.A. (N.D.Cal.2012) 885 F.Supp.2d 964, 972.” (Id. at pp. 927-928.) Where the nonjudicial post-foreclosure trustee sale is not property initiated, ” … a borrower may base a wrongful foreclosure claim on allegations that the foreclosing party acted without authority because the assignment by which it purportedly became beneficiary under the deed of trust was not merely voidable but void.” (Yvanonova, supra, at pp. 851-852.)

“A void contract is without legal effect. (Rest.2d Contracts,§ 7, com. A.) “It binds no one and is a mere nullity.” (Little v. CFS Service Corp. (1987) 188 Cal.App.3d 1354, 1362, 233 Cal.Rptr. 923.) “Such a contract has no existence whatever. It has no legal entity for any purpose and neither action nor inaction of a party to it can validate it …. ” (Colby v. Title Ins. And Trust Co. (1911) 160 Cal. 632, 644, 117 P. 913.) “If a purported assignment necessary to the chain by which the foreclosing entity claims that power is absolutely void, meaning of no legal force or effect whatsoever, [internal citations omitted] the foreclosing entity has acted without legal authority by pursuing a trustee’s sale, and such an unauthorized sale constitutes a wrongful foreclosure. (Yvanonova, supra, at pp. 855-856; citing Barrionuevo v. Chase Bank, N.A., at pp. 973-974.

it would be an “‘odd result indeed’ were a court to conclude a homeowner had no recourse where anyone, even a stranger to the debt, had declared a default and ordered a trustee’s sale.”

“[w]hen a non-debtholder forecloses, a homeowner is harmed because he or she has lost her home to an entity with no legal right to take it. If not for the void assignment, the incorrect entity would not have pursued a wrongful foreclosure. Therefore, the void assignment is the cause-in-fact of the homeowner’s injury and all he or she is required to allege on the element of prejudice.” (Id. at pp. 555-556.) “A contrary rule would lead to a legally untenable situation – i.e., that anyone can foreclose on a homeowner because someone has the right to foreclose. ‘And since lenders can avoid the court system entirely through nonjudicial foreclosures, there would be no court oversight whatsoever.”‘

Just to be clear, MERS is absolutely nothing.

For some reason I have been getting more questions about MERS lately. My analogy has always been that MERS is like a holograph of an empty paper bag. So here are some basic factors for the checklist and analysis:

  1. MERS never signed any contract with any borrower.
  2. MERS never has any contractual or other legal relationship with investors (certificate holders) or Government Sponsored Entities (GSEs) like Fannie, Freddie or Sallie.
  3. MERS never signed any agreement or contract with most named “lenders.”
  4. MERS never signed any agreement or contract with respect to any specific loan transaction or acquisition.
  5. MERS was never the Payee on any note from a borrower.
  6. MERS never loaned any money in any residential loan transaction.
  7. MERS never paid any money for the acquisition of any residential loan agreement, debt, note or mortgage.
  8. MERS never handled any money arising from the origination of the loan.
  9. MERS never handled any money raising from administration of the loan.
  10. MERS never received a loan payment.
  11. MERS never disbursed any money to any creditor of a debt created by a loan.
  12. MERS does not conduct meeting of its board of directors to authorize any officer to sign any document.
  13. MERS never asserts warrants that the information maintained on its platform is true, correct or even secure from manipulation.
  14. MERS’ members can enter the system to insert any data  they want to insert, delete, or change.
  15. MERS never claims any right, title or interest in any debt, note or mortgage. In fact, its website disclaims such an interest.
  16. MERS never maintains any agency relationship with any actual lenders.
  17. MERS never retains any agency relationship with any named lenders who are creditors after the loan is consummated.
  18. MERS has no successors.
  19. MERS never has power on its own to assign any right, title or interest to any debt, note or mortgage.
  20. MERS never has power as an agent to assign any right, title or interest  to any debt, note or mortgage except for a principal who does have a right, title or interest to whatever is assigned.
  21. MERS never warrants that it has any agency relationship or power of attorney on behalf of any party whom it warrants is its principal and who owns the right, title or interest to any debt, note  or mortgage.
  22. MERS never has any legal relationship or retainer with any lawyer seeking to enforce the note or mortgage in any transaction or court proceeding.
  23. MERS never has any legal relationship or agreement with any company asserted to be an administrator or servicer of a residential loan.
  24. MERS never has any legal relationship or agreement with any trustee of any REMIC trust.
  25. MERS has been sanctioned, banned and fined in many states along with the parties who claim rights through the use of MERS. Despite that MERS has never changed its practices or procedures.
  26. Any document of transfer of rights to a security instrument that shows a signature of a person who is identified as an officer or employee of MERS is a false document, with a false signature containing one or more false utterances.
  27. MERS is always a naked nominee possessed with no powers, rights or obligations and possessed with no rights, title or interests in any loans originated or acquired by third parties; however the courts have held that if a new party had paid for the debt, then it may instruct MERS to execute an assignment even if the original principal no longer exists.
  28. MERS is never party to any part of any loan transaction or loan acquisition in which consideration is paid.
  29. MERS is always a diversion from the true facts. In 2008 16 banks took my deposition for 5 1/2 days straight regarding the status of MERS. I said then and I say now that the use of MERS is less meaningful than using the name of a fictional character like Donald Duck.
  30. Despite thousands of attacks on me and my work over 12 years, not one memo, treatise or article has ever been published that said otherwise.
  31. No expert opinion has ever been given by affidavit or in live testimony to the contrary.
  32. In fact, not even a blog article or fake news article has ever said MERS is either a legitimate alternative to tracing title through county recording or a legitimate beneficiary under a deed of trust or a legitimate mortgagee under a mortgage. 
  33. The asserted presence of MERS on any document or pleading or notice always means that the lawyers, servicers and other third parties are seeking to conceal material facts from the borrower and from the courts.

How do I Use Article 9 §203 UCC Requiring Value Be Paid for Debt?

Many of you have essentially asked the same question referring to Article 9 §203 UCC as adopted by the laws of your state. There is no known cause of action for breach of that statute although one might be conjured. It is an interesting suggestion.
My reference to it is simple: the statute says that a condition precedent to enforcement of the security instrument (mortgage or deed of trust) is that the party seeking to enforce must have paid value for the security instrument. Translating that, it automatically means that if someone paid for it then they paid for the debt. BUT all law in all states says that if the “seller” or transferor does  not own the debt then the transfer of the mortgage is a nullity.
A condition precedent means you can’t do one thing without first doing the other. We are a nation of laws and personal bias about this is irrelevant.
GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================

*

What many lawyers continue to miss is that there is a difference between the laws entitling someone to enforce a note and the laws entitling someone to enforce a mortgage. There are different public policies behind each one. For Notes, the public policy is to encourage the free flow of negotiable instruments in the marketplace. For mortgages, the public policy is to make sure that the civil equivalent of the death penalty (loss of home) is not imposed by someone who actually has no interest in the debt.
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It is an added protection. As a condition precedent it means that standing to enforce the note is different from standing to enforce the mortgage. It is both factual and jurisdictional.
*
The grey area occurs because many states adopt the doctrine that if someone has the right to enforce the note they automatically have the right to enforce the mortgage. Although that seems to contradict the Article 9 §203 provision it actually doesn’t. That is because possession of the note by a person who is entitled to enforce it raises the legal presumption that the value was paid by the person on whose behalf the note and mortgage are enforced.
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This is a fuzzy area of the law. But boiled down to its simplest components, it means that possession of the note is deemed (presumed) to be possession of legal title to the debt which, as we know from Article 9 §203 can only be true if the person has value invested in the deal.
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The point of that policy is that if the forced sale of the house is not going to produce proceeds that will be used to pay down the debt, then the foreclosure should not occur. If the person on whose behalf the foreclosure is brought is not the owner of the actual debt then without evidence from the lawyers representing the party named as Plaintiff or Beneficiary, there is no evidence that the proceeds will go towards paying down the debt and the court is required, with no discretion, to enter judgment for the homeowner.
*
So the question comes down to whether the party claiming both possession and entitlement to enforce the note is the owner of the debt. The answer is yes if the homeowner does nothing. This presumption can be rebutted. A simple question as to whether the value was paid and if so, how many times, and demanding the dates and parties involved, would clear up the question if the banks had a factual answer. They don’t. They present a legal argument instead. As virtually all lawyers know, their job is to win however they can do it. So if they can’t dazzle the court with facts they can baffle the courts with bullshit.
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Carefully educating the judge who most probably slept through the UCC classes in law school is key to winning on this basis but it has been done many times. All jurisdictions have case decisions that reflect what I have described above. You must find those decisions and present them as part of your pleadings, memoranda and argument in court. 

McDonough v Smith: High Court Open Door on Fabrication of Evidence

This decision is extremely important for 2 reasons.

1st, it reaffirms a right under federal law to bring an action for damages for fabrication of evidence.

2nd, and equally important, it establishes that the time to bring such a claim does not start until the conclusion of litigation, whether successful or unsuccessful.

see Article on McDonough v Smith McDonough v. Smith, No. 18-485 (U.S. Jun. 20, 2019)

See U.S. Supreme Court mcdonough-v-smith-5

see 42 U.S.C. § 1983

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officer’s judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable.

I am uncertain at the time of writing this as to whether or not any attorney has thought to bring an action for damages based upon this statute. but it certainly seems applicable to foreclosure actions in which assignments, endorsements, notices, correspondence, and even deeds are fabricated for the purposes of obtaining a judgment in court.

[Additional Comments: after analyzing the cases, it would appear that this federal statute provides the basis for a cause of action for money damages and injunction.

However, close analysis of the cases involved strongly indicates that a homeowner will be able to use this statute only if he prevails in the prior foreclosure action.

While many attorneys are bringing wrongful foreclosure claims, and claims based upon fraud, this federal statute is probably an important addition for 2 reasons: (1) the statute of limitations does not begin to run until the case and foreclosure is over and is probably tolled by active concealment; (2) it appears as though the burden of proof might be a mere preponderance of the evidence that fabricated instruments and fabricated testimony were used in the pursuit of a wrongful foreclosure.]

If I am right about the SOL, that eliminates a primary defense of the potential defendants. If I am right about the burden of proof, it makes it far easier to prove a case against the defendants than using a cause of action for fraud.

This statute could be used in conjunction with virtually all foreclosure defenses and which claims of securitization are made and documents are fabricated, robo-signed and forged.

At this point, as any foreclosure Defense Attorney and most pro se litigants can tell you, virtually all foreclosures are based upon some chain of title that includes various alleged transfers or apparent transfers of the subject debt, note or mortgage.

Nearly all such alleged transfers do not exist except for the paper on which a reference is made to an assignment, endorsement, power of attorney or some other document that may or may not exist, and in all probability has been fabricated, backdated, forged and/or robosigned. all such documents are only valid if they refer to an actual event in real life. In connection with loans, the only relevant events are transfers of money. And in real life, in nearly all cases, no transfer of money ever occurred in connection with the execution of documents that were fabricated for the sole purpose of obtaining a foreclosure sale.

if I am correct in my interpretation, the statute could be used to include multiple defendants that might otherwise escape liability for actions alleged in a complaint for damages related to the fabrication of evidence and the use of fabricated evidence in furtherance of the scheme to obtain a wrongful foreclosure.

The Truth about US Bank

Lawyers and pro se litigants continue to ignore the basics when mounting a challenge to foreclosures in which US Bank is asserted to be a trustee of a name that is then treated as though it was trust or REMIC Trust. If you look closely, the name is word salad, containing references or names to several named entities and other categories of entities.
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 A typical presentation asserts no presence of US Bank in its individual capacity, so the institutional implication is false. It is appearing strictly in a representative capacity and an court award of costs against the “claimant” would not, according to US Bank, attach liability to US Bank but to rather whoever was being represented by US Bank “as trustee.” On that we have word salad presenting many options such as
  1. US Bank, as trustee
  2. as successor to Bank of America, as trustee
  3. as successor by merger to LaSalle Bank, as trustee
  4. for the holders of certificates entitled
  5. XYZ Corp.
  6. Mortgage pass through Certificates series 200x-a1

If anyone can tell me  from that description who would be liable for costs I applaud them. But I can tell you who would pay the costs regardless of actual legal liability. It would be a company claiming to be an authorized servicer who in fact is getting the money from the investment bank through conduits.

The issue of what if anything was transferred between LaSalle Bank and Bank of AMerica and thus what if anything was transferred between Bank of America and US Bank has actually not been litigated.

My answer is that LaSalle Bank had no duties as trustee, was subjected to the impact of three mergers — ABN AMRO, Citi and Bank of America — and that a trustee only exists for a legally existing trust in which the subject matter (Loan) was entrusted to the trustee for administration of the active affairs of the “trust.” With none of those elements present, nothing could have been transferred.

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
As to U.S. Bank, Deutsch, BONY etc. there are two categories that must be considered. If US Bank is named in a Pooling and Servicing agreement then the reasons for its non existence (or more specifically lack of legal presence in court or any other foreclosure proceeding) in fact and at law remain as previously stated in prior articles —- but exclude one central issue that has not been litigated.
*
If US Bank has been asserted as successor to another alleged trustee then all sorts of other issues pop up. The main one that has not been litigated is whether the position of trustee can be transferred or sold like a commodity without consent of the beneficiaries or some other authorized party.
*
In truth the only real “beneficiary” would be the investment bank — if only the trust legally existed. And in truth the investment bank indemnified US Bank from liability in exchange for the use of the US Bank name to create the illusion of institutional involvement.
*
And in truth the only real party in interest is the investment bank, and if the trust actually existed the investment bank would be the only real beneficiary in an arrangement in which the trust name is used as a shield or sham conduit to hold bare naked legal title to paper that fabricates the illusion of debt ownership, much like MERS.
*
And of course the whole use of the term “successor” is constantly used to distract lawyers, judges and homeowners from the fact that the previous party had no interest or right to administer, own, or enforce the subject debt, note or mortgage — unless they are able to produce authorization from the investment bank.
*
But the investment banks have been loath to even hint that they could or would issues such authorization because that would be an admission that they were or are the real party in interest — an admission which probably would subject them to many levels of liability for fraud and statutory violations.
*
It may well be that the pursuit of court costs and discovery available to do that might be the achilles heel of this house of imaginary cards. It would reveal the absence of any party to pay them, which would reveal the absence of a claimant, which would reveal the absence of a claim which would reveal the absence of a client, which would reveal false representations by the foreclosure mill.

No the Mortgages Are Not Securities, But the “Certificates” Do Not Qualify for Exemption As “Mortgaged Backed”

For those straining to find a way to categorize mortgage loans as securities I offer this based upon my licensing, training and experience as a Wall Street Broker and Investment Banker and as an attorney who has practiced law, including securities law for over 42 years.

You are climbing the right tree but you are on the wrong branch, in my opinion. Despite possible legal and logical arguments for your point of view there is no way any court is going to take the common mortgage loan and say it is a security, and therefore was subject to regulation, registration, disclosure and sales restrictions. And the secondary market does not rise to the level of a free exchange. While loans appear to be traded under the guise of securitization they are not actually traded.

BUT
I like your reasoning when applied to (a) certificates issued by investment banks in which the investment bank makes promises to pay a passive income stream and (b) derivative and hedge contracts issued on the basis of deriving their value from the certificates.
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The specific challenge I think should be on the status of the certificates or “bonds” issued by the investment banks. If securitization in theory were a reality then under the 1998 exemption they would not be treated as securities and could not be regulated.
*
That would mean that the fictitious name used by the investment bank was a real entity, an existing Trust (or special purpose vehicle) (a) organized and existing under the laws of some jurisdiction and (b) the trust actually acquired loans through (i) purchase for value or (ii) through  conveyance from a trustor/settlor who owned the loans, debts, notes and mortgages.
*
But that isn’t what happened in practice. The entire business plan of the investment banks who participated in this scheme was predicated on their ability to sell the loans multiple times in multiple ways to multiple layers and classes of investors, thus creating profits far in excess of the amount of  the loan.
*
Right now each of those sales is considered a separate private contract that is (a) separate and apart from the loan agreement and (b) not subject to securities regulation due to exemption under the 1998 law that does not allow securities regulation of mortgage-backed instruments.
*
So the goal should be to show that
*
(a) the securitization scheme was entirely based on the loan agreement under the single transaction and step transaction doctrines and therefore was not separate from the loan transactions
*
(b) the certificates or bonds were not mortgage-backed because the holders have no right, title or interest to the loan agreements, debts, notes or mortgages and
*
(c) the derivative and hedge contracts deriving their value from the certificates were securities based upon the certificates (“bonds”) that are more in the nature of warrants and options on the value of the certificates rather than any direct interest in the debt, note or mortgage of any borrower.
*
Hence both the certificates and hedge contracts and all other derivatives of the certificates would be subject to regulation as securities. Based upon information I have that is very suggestive although not conclusive, it appears that the Internal Revenue Service has already arrived at the conclusion that the certificates are not mortgage-backed and the trusts are not viable entities because in order to have a valid trust it must have assets and active affairs. It must also have identifiable beneficiaries, a trustor etc.
*
None of those elements are present or even alleged or asserted by the lawyers for the foreclosure mills. The only “beneficiary” is the investment bank, not the certificate holders who all expressly or impliedly disclaim any right, title or interest in the loans, debts, notes or mortgages and have no right to enforce. This has already been decided in tax court. The owners of certificates are not the holders of secured debt.
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There is no “res” or “thing” that is entrusted to the named Trustee of the so-called REMIC Trust for the benefit of identifiable beneficiaries. There is no settlor who conveyed loans to the Trustee to hold in trust for identifiable beneficiary except that as a catch-all the investment bank is named as beneficiary of any title to anything that might be attributed to the trust, if only the trust existed.
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Attacking this from the top down is the job of regulators who refuse to do so. But the attack can occur from the bottom up in courts. As shown above, in any case where a trust is referenced in a foreclosure there is no legal standing. That is there is no existing entity that owns the debt. The investment bank funded the origination or acquisition of the loan but contemporaneously sold off the value of the debt, the risk of loss, the cash flow and other attributes of the loan.
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The notes had to be destroyed and a new culture based upon images had to be put in place even if it violated law. The problem with the courts is not that they don;t get it; I think a lot of judges get it but don’t like the outcome of applying the law as it currently exists. So they wink and nod at fabricated notes, assignments and endorsements.
But those same judges, when confronted with unexplained deficiencies are forced to rule in favor of borrowers. And they do. This would best be done in mass joinder, class action or some other vehicle where resources could be pooled, but the procedural deck is stacked against such efforts.

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Right in Front of Our Eyes: Black Knight and U.S. Bank

Anyone who knows about foreclosure litigation and securitization of residential debt knows that the only way the banks could succeed is if they had a central repository and central command center from which all documents were fabricated and all instructions were issued.

For nearly all loans the central command was Lender Processing Systems, aided by DOCX. While DOCX is technically defunct and Loraine Brown went to jail taking one for the team, the functions of LPS remained the same.

LPS  changed its name to Black Knight and in a PR coup transformed itself into the publisher of what is largely viewed as comprehensive data on mortgage lending and foreclosures.

Hence it went from the purveyor of false, fraudulent, forged documentation to the purveyor of data perceived as reliable and thence became a trusted source whose data is considered worthy of legal presumptions.

Systems at LPS/Black Knight include data processing on virtually all residential loans subject to claims of securitization many of which are represented by data on the MERS  Platform which is a workaround to hide separate split transfers of the debt, the note and the mortgage or deed of trust.

The systems on LPS/Black Knight are designed for the the express purpose of presenting consistent data in foreclosure claims. As such it also enables the rotation of apparent servicers, none of whom perform bookkeeping functions even if some of them interact with borrowers as if they were actually the servicers.

The rotation of servicers comes with the false representation and illusion of boarding in which the process is falsely represented as meaning that the new servicer inspected, audited, reviewed and input the data into their own system. None of that occurred. Instead the new servicer merely gained access to the same LPS system as the last servicer with a new login and password.

All evidence shows that the functions for fabricated, forging and robosigning documents continue to be performed under the direction of LPS/Black Knight which receives all instructions from various investment banks who have each started their own securitization scheme masking apparent trades in the secondary market for loans and trades in the shadow banking market where “private contracts” are regularly traded without any securities regulation.

Far from dropping their connection with LPS/DOCX the major banks have completely embraced this central repository of all loan data, all of which is subject to manual and algorithmic manipulation to suit the needs of the banks; thus they produce a report that creates the illusion of credibility, reliability and even independence even though none of those things are true.

So now U.S. Bank is further embracing LPS/Black Knight technology in the form of “Empower” for loan originations. U.S. bank is of course the major player whose name is used in foreclosures despite the fact that it has no interest in the loans and does not receive one cent from foreclosure sales of property. It merely receives a royalty for the use of its name as part of a fictitious name of a nonexistent trust which is falsely represented to have engaged in a transaction in which the trust acquired the debt, note and mortgage on multiple loans.

This deal furthers the PR myth. It strengthens Black Knight as having the attributes of a legitimate player when in fact it is a central figure in the greatest economic crime in human history.

see https://www.prnewswire.com/news-releases/us-bank-expands-relationship-with-black-knight-to-correspondent-and-hfa-lending-channels-on-empower-loan-origination-system-300859760.html

US Bank will implement the Empower LOS to manage loans purchased via its correspondent and HFA lending channels. The bank already uses Black Knight’s MSP servicing solution which integrates with the LOS; and its artificial intelligent virtual assistant AIVA.

“Aligning with Black Knight’s Empower for our Correspondent and HFA business serves our forward-looking vision of providing innovative capabilities that advance the lending process and provide a better client experience,” said Tom Wind, executive vice president, US Bank. “Expanding our enterprise relationship with Black Knight allows us to enhance our digital capabilities and customer experience throughout the entire homeownership cycle.”

 

How the loan was sold multiple times.

 

THE CLAIM FOR HOMEOWNER ROYALTIES

It is like any hedge contract. The buyer of the hedge contract is the investment bank, sometimes working through sham conduits. It is saying it wishes to ensure stability of its “portfolio.” It provides triple agency rating and “insurance” from AIG for instance while at the same time buying insurance from  AIG based on the premise that hedge funds are selling hedge contracts. It looks like a safe bet as long as you don’t peek under the hood where you see that the debt, note and mortgage were split at inception and the enforcement of the debt, note and mortgage is at best a long shot if all the facts are revealed.

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The hedge funds and insurance companies make money because they are receiving fees from the investment bank for assuming the risk. It’s income pure and simple. The risk is seen as nonexistent. But in fact a small move in the value of the certificates whose value is entirely derived from the investment bank’s promise to pay certificate holders is a discretionary promise controlled exclusively by the vinestment bank. So Goldman can reduce payments and cause the certificates to decrease in value thus triggering the insurance and hedge contracts. Goldman can also, in its sole discretion declare that the value has reached the trigger point. And the counterparties expressly disclaim subrogation or any claims to the certificates, debts, notes or mortgages.
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In many cases the initial hedge contract was created for the highest tier of the tranches containing AAA rated mortgages. But the tier 1 tranche had received fees for issuing a hedge contract on the lowest tranche. The certificates were based upon the value of the tranche including the hedge contracts which investors thought were exclusively to protect the Tier 1 tranche but in fact contained a commitment to absorb losses for the Z tranche that contained 15% mortgages. So the modest but lucrative fees paid to hedge funds to assume the risk for stabilizing the Tier 1 tranche was in fact a guarantee of the entire Z tranche.
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When Z tranche failed as everyone knew it would, it took down the tier 1 tranche and through similar devices the entire issuance of that “trust” was reduced to rubble with investment bank getting the full amount of the investment (by certificate investors) paid to the investment bank (not the certificate investors) in mortgages that had (a) not failed and (b) did not have nearly the effect on perceived loss of value that was reported.
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Hence the investment bank sold, using the trust name as a fictitious name for the investment bank, to the investors who bought certificates whose value was perceived as derived from “underlying mortgages” and then sold again the same mortgages under guise of hedge fund and insurance contracts. In fact the value of the certificates was entirely derived from the value of the promise made by the  viestment bank with no right, title or interest to the indexed fictitious portfolio of debts, notes and mortgages arising out of the origination of or acquisition of residential mortgage loans.
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When the credit market collapsed (nobody was willing to trade in derivatives) Goldman and others had insurance contracts pending with AIG et al. The bailout was used to fund AIG so that GOldman could receive $150 Billion on losses never incurred by Goldman and which were never attributed to anyone who might be construed as having purchased the debt. Goldman was not lobbying to recover losses made from risky investments. Goldman was lobbying and did so successfully in protecting a windfall expectancy from hedge contracts and insurance procured through false pretenses. Losses on the loans had nothing to do with it.
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Goldman and Citi were successful at manipulating the story. TARP and FED and US Treasury and FDIC bailouts were at first predicated on losses caused by defaults on mortgages. But that is only part of the story. Mortgage Defaults actually were not a major cause of any collapse except in a few instances that Goldman PR seized on to make it appear that was what was happening marketwide. Most mortgage debt and all risk of loss had been sold multiple times. There simple was no owner of any debt in which the claimed “holder” had an pecuniary interest. Hence today we have no creditor — a proposition that virtually everyone finds unacceptable.
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So TARP evolved from Troubled mortgages to troubled Certificates. And when the promise was revealed to come not from homeowners but form the investment banks, TARP evolved again into a generic ill-defined “troubled asset ” classification that meant anything the banks decided. The stuff that simply could not be reconciled was put into the maiden lane entities and then later recycled out as new securitizations as though there was nothing wrong with the inherently defective and illegal nature of lending, servicing, selling and profiting from the sale of loan products that were guaranteed to fail in many instances and whose failure was central to the bank business model in which they would profit from the failure.
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What I am saying is that the infrastructure for all of that was established before the loans were made. That infrastructure and the expectancy of windfall revenues and profits from the origination or acquisition of loans was absolutely essential (condition precedent) to granting loans, whether they were viable or not. The funding of the loan was essential to getting the borrower’s name, signature and reputation as well as their house as collateral. Without that all the tranches, insurance contracts, hedge products and more advanced derivative products were never have been written, much less sold. This process did not, as was advertised, diversify risk. It concentrated it on borrowers, government and investors in that order.
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Note that the banks are left out of that equation because they were intermediaries as it relates to risk and they were principals as it relates to profits. It is my contention that this was an implied contract in which the homeowners should be compensated for their essential part and focal point, but for which the rest of the scheme, undisclosed to borrowers, could not have occurred.
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Consulting with insiders the average gross revenue from the loan of $1 was between $10 and $20 dollars. So for an average loan of $250,000 the gross revenue was in excess of $2, 500,000 and frequently topped $5,000,000. The average was $8,000,000. Royalties and license fees usually run from as low as 1.5% to an average of 6% and are applied to gross revenues. The implied contract that included the borrower and the investment bank thus computes as $480,000 plus statutory interest which at this point would average around 9% per year for an average of $43,200 per year for an average of 10 years or $432,000. Hence the value of the claim by each borrower is on average $900,000 for each $250,000 loan.
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In addition there exists a further claim for recovery of all undisclosed compensation as outlined above amounting to several times the above estimate. this presents an unparalleled profitable opportunities to good litigators. Pro se litigators are not invited. The theory is simple and if presented correctly will almost definitely survive a motion to dismiss and could be the subject of mass joinder, class action and even Qui Tam relief.
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While a DC group is forming I would be willing to help in the creation and development of a new group whose sole focus was on this theory.
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