How and Why to Litigate Foreclosure and Eviction Defenses

Wall Street Transactions with Homeowners Are Not Loans

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

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

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

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I have either been lead counsel or legal consultant in thousands of successful cases defending Foreclosure. Thousands of others have been reported to me where they used my strategies to litigate. Many of them resulted in a judgment for the homeowner, but the majority were settled under the seal of confidentiality.
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Thousands more have reported failure. In reviewing those cases it was clear that they were either litigated pro se or by attorneys who were not skilled in trial practice and who had no idea of the principles contained in this article and my many other articles on this blog. I would describe the reason for these failures as “too little too late.” In some ways, the courts are designed more to be final than to be fair. There are specific ways that information becomes evidence. Most people in litigation do not understand the ways that information becomes evidence and therefore fail to object to the foundation, best evidence, hearsay etc.
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Even the people that submit wee phrased and timely discovery demands fail, more often than not, to move for an order to compel when the opposition fails or refuses to answer the simple questions bout the establishment, existence, and ownership of the underlying alleged obligation, debt, note or mortgage. Or they failed to ask for a hearing on the motion to compel, in which case the discovery is waived. Complaining about the failure to answer discovery during the trial when there was no effort to enforce discovery is both useless and an undermining of the credibility of the defense.
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Since I have been litigating cases for around 45 years, I don’t expect younger attorneys to be as well-versed and intuitive in a courtroom as I have been. It’s also true that many lawyers, both older and younger than me, have greater skills than I have. But it is a rare layperson that can win one of these cases without specific training knowledge and experience in motion practice and trial law.
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In the final analysis, if the truth was fully revealed, each foreclosure involves a foreclosure lawyer who does not have any idea whose interest he/she is representing. They may know that they are being paid from an account titled in the name of the self-proclaimed servicer. And because of that, they will often make the mistake of saying that they represent the servicer. They are pretty careful about not specifically saying that the named plaintiff in a judicial foreclosure or the named beneficiary in a nonjudicial foreclosure is their client. That is because they have no retainer agreement or even a relationship with the named plaintiff or the named beneficiary. Such lawyers have generally never spoken with anyone employed by the named plaintiff or the named beneficiary.
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When such lawyers and self-proclaimed servicers go to court-ordered mediation, neither one has the authority to do anything except show up. Proving that the lawyer does not actually represent the named trustee of the fictitious trust can be very challenging. But there are two possible strategies that definitely work.
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The first is to do your legal research and find the cases in which investors have sued the named trustee of the alleged REMIC trust for failure to take action that would’ve protected the interest of the investors.
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The outcome of all such cases is a finding by the court that the trustee does not represent the investors, the investors are not beneficiaries of the “Trust,” and that the trustee has no authority, right, title, or interest over any transaction with homeowners. Since the named trustee has no powers of a trustee to administer the affairs of any active trust with assets or a business operating, it is by definition not a trustee. For purposes of the foreclosure, it cannot be a named party either much less the client of the attorney, behind whom the securitization players are hiding because of a judicial doctrine called “judicial immunity.”
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The second thing you can do is to ask, probably during mediation at the start, whether the lawyer who shows up is representing for example “U.S. Bank.” Or you might ask whether US Bank is the client of the lawyer. The answer might surprise you. In some cases, the lawyer insisted that they represented “Ocwen” or some other self-proclaimed servicer.
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Keep in mind that when you go to mediation, frequently happens that it is attended by a “coverage lawyer” who might not even be employed by the Foreclosure bill. Such a lawyer clearly knows nothing about the parties or the case and will be confused even by the most basic questions. If they fail to affirm that they represent the named trustee of the named fictitious trust, that is the time to stop  the proceeding and file a motion for contempt for failure to appear (i.e., failure of the named plaintiff or beneficiary to appear since no employee or authorized representative appeared.)
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And the third thing that I have done with some success is to make an offer. You will find in most cases that they are unwilling and unable to accept or reject the offer. A substantial offer will put them in a very bad position. Remember you are dealing with a lawyer and a representative from the alleged servicer who actually don’t know what’s going on. Everyone is on a “need to know” footing.
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So if you make an offer that the lawyer thinks could possibly be reasonable and might be acceptable to an actual lender who was holding the loan account receivable, the lawyer might be stuck between a rock and a hard place. Rejection of an offer that the client might want to accept without notifying the client is contrary to bar rules.
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But both the lawyer and the representative of the alleged servicer know that they have no authority. So they will often ask for a continuance or adjournment of the mediation. At that point, the homeowner is well within their rights to file a motion for contempt. In most cases, the court order for mediation requires that both parties attend with full authority to settle the case. In plain language, there is no reason for the adjournment. But they need it because they know they have no authority contrary to the order mandating mediation. Many judges have partially caught on to this problem and instruct the foreclosure mill lawyer to make sure he doesn’t need to “make a call.”
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Every good trial lawyer knows that they must have a story to tell or else, even if the client is completely right, they are likely to lose. You must focus on the main issues.
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The main issue in foreclosure is the establishment, existence, and ownership of the alleged underlying obligation. All of that is going to be presumed unless you demonstrate to the court that you are seeking to rebut those presumptions. There can be no default and hence no remedy is there is either no obligation or no ownership of the obligation by the complaining party.
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Discovery demands should be drafted with an eye towards what will be a motion to compel and proposed order on the motion to compel. They should also be drafted with an eye toward filing a motion in limine. Having failed and refused to answer basic questions about the establishment, existence, and ownership of the alleged underlying obligation, the motion in limine would ask the court to limit the ability of the foreclosure mill to put on any evidence that the obligation exists or is owned by the named Plaintiff or beneficiary. They can’t have it both ways.
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Failure to follow up is the same thing as waiving your defenses or defense narrative.
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So that concludes my current attempt to explain how to win Foreclosure cases for the homeowner. I hope it helps.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
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Please visit www.lendinglies.com for more information.

OK Let’s Try It Anyway — Amicus Briefs

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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To All Those Requesting an Amicus Brief on Illegal Foreclosures: A different strategy is needed in my opinion

I have spent the last six months drafting, re-drafting, editing, researching and investigating the basis for filing a brief as a friend of the court.
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The basis for an amicus curiae brief is the anticipated willingness of the receiving court to admit that there are factors involved about which the judge or panel lacks adequate knowledge or understanding. The problem with foreclosures is that judges think they understand all they need to know. Hence an amicus curiae brief is unlikely to be accepted or even read. Some judges might accept it into the court file, but they still won’t read it or give it any weight.
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This is very much like the whole issue of fake news. In this case, the securitization players have spent billions of dollars convincing the American public, agency regulators, homeowners, lawyers, judges and appellate judges or justices that the transaction with the homeowner was a loan. Like all fake news, the more people read it and the more often they read it, the more they believe it. Judges believe in the value of precedent — decisions made previously by other courts.
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CONFIRMATION BIAS: Each judge that has allowed the claim of securitization players to go forward as a foreclosure has reinforced the false narrative that the money received by homeowners was a loan and not payment for services rendered (i.e., payment to allow personal information to be used for marketing and selling securities, and payment for execution of documents bearing the label of loan documents so that securities could be sold).
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So each time another court twists some law like the statute of limitations beyond recognition in order to save the foreclosure from being dismissed or vacated, they are contributing to the growing false narrative that somehow foreclosures are reducing the loss in an account receivable on the ledger of some company that has paid value in exchange for receiving a conveyance of ownership of the underlying debt from someone who owned it.
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But nobody has ever seen such an account. They have only seen the reports from a self-proclaimed servicer who refuses to assert for whom it is working and refuses to provide any confirmation that any money collected from any homeowner is sent to any creditor.
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I have come to the conclusion that after months of drafting potential amicus briefs, it is a nonstarter and all that work was for naught. But that freed me to think about other strategies that might directly impact the current pandemic of confirmation bias. I think an administrative rule challenge might be that vehicle. 
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A petition to the Supreme Court of each state asserting that the current loose pleading and certification requirements reflect a bygone era in which a known creditor with an uncontested account receivable sought a remedy to offset a loss from nonpayment. In the hundreds of thousands of contested cases at least one of the principal issues raised in defense has been the true status and ownership of the alleged obligation.
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A requirement that the pleading or notice explicitly must assert the identity of the party currently carrying the account receivable (in compliance with Generally Accepted Accounting principles -GAAP)— certified by the sworn statement an actual officer of that creditor would (a) narrow the issues in discovery and (b) quite possibly narrow either the number of claims, defenses or both.  The availability of that officer for deposition or other discovery should be a condition precedent to allowing any evidence seeking to prove the assertion that a loan account exists or is owned by anyone.
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The basic pre-approved pleading forms and rules allowing foreclosures should be changed to reflect the new reality — or the court must consider whether it is going to allow, without legislation, changes in the law to allow virtual creditors to make and collect on claims.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation.Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
*
Please visit www.lendinglies.com for more information.

Freddie Mac Changes Its Language from “Loan Portfolio” to “Reference Pool”

see https://www.streetinsider.com/Globe+Newswire/Freddie+Mac+Credit+Protects+%24167.3+Billion+of+Single-Family+Mortgages+in+Third+Quarter/17554183.html

People still don’t believe it. Loans were not securitized but are being treated as though they were securitized. “Securitization” means selling off an asset in pro rata shares to investors who get a piece of paper telling them that they own X% of the asset.

Ask anyone who knows (or read it yourself) — all of the securitization documents are “forward statements” meaning they are referencing a future event. And none of the securitization documents convey any ownership, equitable or legal interest in any debt, note, or mortgage. And the future event never occurs. That’s the point for the Wall Street bankers.

Since they never retain any interest in any debt, note or mortgage they face no exposure to any risk of loss, and no liability for violations of federal and state statutes as issuers or lenders even though they are both. When they foreclose through various intermediaries (usually a bank appearing solely as trustee of a nonexistent trust) they still receive the net money proceeds but they have no loan account receivable to credit when they receive those sales proceeds.

ACCOUNTING NOTE: There is a difference between a loan account and a loan account receivable. A “loan account” can mean anything or nothing at all. But a loan account receivable is ane try on a general ledger that is reported on the issued balance sheet of a business entity showing that the company paid value (debt cash, credit assets) in exchange for a conveyance of ownership of the underlying debt (from one who legally owns it) — all as required by Article 9 §203 UCC which has been one existence, in one form or another, for centuries.

Without such a transaction there is nothing to report.

And without a conveyance of ownership of the asset receivable, there is no legally allowable entry on the general ledger claiming ownership of the debt, note or mortgage.

The securitization of loans never happened. This means that all claims of rights or authority to administer, collect, or enforce any debt, note or mortgage are completely and utterly false if they are based upon securitization of the subject loan.

But the Wall Street PR machine has convinced virtually everyone including “borrowers” that the loans were securitized. And there are hundreds of appellate decisions referring to loan portfolios that do not exist but are treated as real nonetheless.

So watch for how bulletins and announcements are phrased. In order to avoid indictments and civil liability for outright lying, they are now referring to loan portfolios as “reference pools,” which is exactly what I have been saying for years.

Yes, there were securities created, issued, sold, and traded. And in fact, the indenture did indeed have references to groups of data derived from announcements by investment banks referring to the performance of those loans. But that is not securitization of loans. It is the securitization of proprietary data relating to the performance of the loans — not the ownership of loans (which is what is required to speak of securitization of loans).

SO WHERE DID THE LOAN GO? This could be a reasonable basis fr dispute — i.e., whether the loan was extinguished or simply became inchoate (sleeping) pending a reformation of the transaction such that a designated virtual creditor was replaced with a real one — as required by law.

DOESN’T THAT GIVE AN UNFAIR WINDFALL TO HOMEOWNERS WHO RENEGED ON A PROMISE TO PAY? Again subject to dispute, but my answer is absolutely not.

In fact, it reveals exactly the opposite.

The “lender” (securities brokerage firm doing business as an “investment bank”) is actually an issuer of securities that cannot be sold without the cooperative signature of the homeowner together with detailed personal information of the homeowner.

The resulting sale of securities produces a windfall to the investment bank equal on average to 12 times the principal paid, thus far, to the homeowner.

The homeowner is required under the disclosed part of the deal to repay the principal paid to him — which means that the homeowner did not receive any consideration for the concealed part of the securitization deal.

In addition, the homeowner has unknowingly taken on the risk that the investment bank has dumped. As a putative “lender” (not really) its sole business reason for the transaction is the issuance of securities without which it would not near lending to individual homeowners.

The more securities the merrier and the larger the windfall to the investment bank— all without giving any conveyance of any debt, note or mortgage. (You never see the investment bank as the grantee on any recorded conveyance).

Since the investment bank has no risk of loss, it does not care about the future performance of the alleged “loan transaction.” This one fact removes the basic balance between any person who is characterized as a borrower and any person who is characterized as a lender.

According to federal and state lending laws and basic common sense, the lender, as a sophisticated financial enterprise, is charged legally with determining the viability of the loan because it has a risk of loss.

Without that risk of loss, the only interest remaining is getting the “borrower” to submit personal data and to have the homeowner sign documentation promising to pay back the consideration (plus interest!) received for the concealed, involuntary participation in the securitization scheme.

In contract law, this is a classic example of a failure of an element of enforceable contract — no meeting of the minds. Borrower intent + NO lending intent = no contract. 

The homeowner is deprived of the opportunity to receive the benefit of bargaining for a share of the securitization scheme or not to participate at all.

Therefore my conclusion is that (a) the homeowner owes nothing because of contract failure and (b)is entitled to quantum meruit under quasi-contract law to reasonable compensation for the concealed securitization scheme that could never have existed but for the homeowner’s signature and personal data.

What does this mean? It means that NONE of the investors who bought or traded swaps, certificates, or other securities ever acquired any interest in any loan. None of them acquired the ownership of any debt, note, or mortgage. None of them ever acquired the legal right to administer, collect, or enforce any debt, note, or mortgage. And it means that all documents suggesting the contrary are fabricated and false.

Thus under such circumstances no servicer, trustee, trust or investor Including Fannie and Freddie) possesses any right, title or interest in administration, collection or enforcement of any loan.

DUMP THE RISK: The theory behind securitization is perfectly sound, legal, moral, and politically expedient. It is intended to attract investment by reducing risk. But Wall Street took this one step further. They completely eliminated the risk. In order to do that they had to completely eliminate the loan account from the general ledger of any company that was involved in the securitization process. The loan account was a cover for fraud. It doesn’t exist.

Nobody loses money when a homeowner stops paying. And when a homeowner does pay they are contributing to bonuses and largely untaxed profit of investment banks — and that is an apt description of what happens to the money when a homestead is forced into sale. NO entry is ever made decreasing the amount of a receivable because there is no receivable.

And that is the part that is completely “counterintuitive” to nearly everyone. It is also the reason that Foreclosure Mills consistently Stonewall any attempts to get discovery of information that would obviously lead to admissible evidence in court.

There are thousands of Foreclosure cases that have been pushed to the back burner for 10 years or more (I have one that is 12 years old) as a result of lawyers and pro se litigants experimenting with this concept.

The concept is simple. The claim brought against the homeowner either directly or indirectly asserts that the designated claimant exists in the real world and possesses a claim against the Homeowner. The homeowner says OK, tell me how you exist and how you acquired a claim against me. The Foreclosure Mail refuses to answer because it knows that the truth will kill the claim. 

BUT by sheer force of will and perseverance and infinitely deep pockets, the investment bank continues litigating a claim that has absolutely no merit. And in most cases, because our government regulators are sleeping the cost of defending the baseless claims falls onto the homeowner who lacks the resources of time, money and energy to preserve the largest asset he/she owns.

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

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

 

Here we go — the next tidal wave of foreclosures is upon us. When the moratoriums are over prepare for shock and awe (again)

see https://www.abcactionnews.com/news/local-news/i-team-investigates/floridas-foreclosure-rate-second-highest-in-the-u-s-filings-increase-as-courts-open

The Wall Street playbook calls for an insidious process of creeping up on you. Within days, in some cases, weeks in other cases and certainly within months, people are going to wake up to the fact that they are already in the middle of a foreclosure proceeding. And the new wave will be just as destructive as in 2008.

Contrary to the party line that has been successfully advanced by Wall Street banks, foreclosure proceedings are NOT the result of non-payment. They are the result of greed.

For non-payment to be a reason to seek redress in court, the claimant must be entitled to receive payment from the person they are suing, and they must be “injured” (financially) by the homeowner’s failure to pay. In al most all foreclosures, contrary to popular belief, these elements are completely absent and no, there isn’t anyone behind  some fictional curtain who is getting the money to satisfy and unpaid debt.

And yet here is what is about to happen:

  • 96% of all homeowners who are served with foreclosure notices will walk away from the biggest investment of their lives and losing a huge asset
  • 2% will attempt to litigate “on the cheap” looking or delay, modification or something other than simply winning against a law firm falsely representing it has a client who is proper claimant and falsely implying that if the foreclosure is successful the money will go to someone who needs it instead of just wanting it.
  • 2% will litigate in earnest and 65% of them will win their cases because there is no legitimate claimant or claim.
  • The courts will largely remain ignorant about the true nature of securitization — specifically that not a single residential loan has ever been securitized.
    • Building on that ignorance, the courts will erroneously accept direct or implied assertions of authority to administer, collect or enforce obligations by law firms who also lack any authority to collect or enforce.
    • Many lawyers will make the same mistake, believing that the self proclaimed “servicer” has been granted any right by any party who paid value for the underlying obligation in exchange for receiving a formal conveyance fo ownership of the debt, note or mortgage.
    • Discovery demands, even if properly framed and timed, will largely be ignored by everyone because of lawyers and pro se litigants’ lack fo understanding of motion practice.
  • The CFPB, FTC, SEC and IRS will continue to cover up the largest and most blatant fraud in human history — the creation of the illusion of a loan without any lender and without any loan account on the ledger of any company reflecting payment for the debt, note or mortgage.
  • Once again, wealth will be sucked out of the US economy when it is needed most in the hands of consumers who are the ONLY demographic capable of reviving and stabilizing a consumer-driven economy.

Moral of the story: It’s not capitalism if you are stealing something for the sake of grabbing money. That is and always has been grant theft.

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

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

You might not know VendorScape but it sure knows you

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

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

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

So here is what they said

Interesting.

image.png
And here is how it breaks down (legal analysis):
  1. VendorScape exists although they deny it is currently accessed through CoreLogic
  2. VendorScape is an “electronic case management system.” Taken in context with customs and practices in the industry in addition to simple logic, it is THE case management system and it is electronic which means that anyone with login credentials can get into it.
  3. VendorScape output consists of the following:
    1. centralized electronic workplace
    2. storage of “documents” — i.e., images not the original documents because they are not a records custodian for anyone. As the centralized place for “storage” it is VendorScape that is the source server from which all records are produced in printed reports that are merely generated from what is in VendorScape regardless of who added or deleted or changed anything.
    3. initiate workflows “defined by our clients”. This is odd wording.
      1. They appear to be saying that clients access the system and are simply using it as an IT platform to conduct business of the client.
      2. But VendorScape initiates workflows, which means that they have admitted that whoever is actually running VendorScape is making the decisions on when and how to initiate any action.
      3. Since the entire purpose of this system is preparation for foreclosure, the only logical conclusion is that it is a system to initiate foreclosures, notices of default, notice of delinquency etc. based upon human decision-making or automated decision making initiated by humans that control VendorScape.
      4. They will of course say otherwise and that seems to be what they are trying to say — that the client determines the definitions and circumstances of workflows.
      5. But dig a little deeper and you will find that the “client” has no right to make such decisions and that the decision is labelled as the decision of a client (e.g. Ocwen) by permission from Ocwen, who is not actually allowed to make such decisions and does not make such decisions. 
      6. So the reference to the  Client making such decisions is circular allowing anyone to say that it was CoreLogic or  VendorScape who made the decision (thus avoiding liability for Ocwen et al) OR to say that it was Ocwen, as they do in this letter.
  4. They admit that CoreLogic is the party who owns and maintains the storage and functions of the VendorScape system while at the same time implying that they have no connection with VendorScape.
  5. They assert that the data is owned by the clients. This is a common trick.
    1. The data is not owned by the clients because it doesn’t consist of any entries or proprietary information placed in the system by the client.
    2. The information or data is placed there mostly through automated systems controlled by Black Knight but operated by CoreLogic.
    3. Nominal “Servicers” (Ocwen e.g.), who are the “clients” actually have no way of knowing anything about a homeowner account until after it is placed in the system by third parties.
    4. This is why servicer records should not be admitted into evidence as exceptions (business records) to the hearsay rule.
    5. The deadly mistake by many lawyers in court is the failure to timely object to lack of foundation, best evidence and hearsay.
      1. A timely objection is one that is raised at the same time the admission of evidence is being considered by the court.
      2. Waiting until the end of questioning is spitting in the wind. It is already in evidence by that point.
      3. And the second mistake is that after the objection is sustained, the failure to move the court to strike the offending testimony and exhibits. That failure is equivalent to a waiver of the objection, thus leaving the offending testimony or exhibits in evidence.
*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

FREE REVIEW: Don’t wait, Act NOW!

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

Tonight! Is it time to sue Black Knight? 6PM EDT 3PM PDT The Neil Garfield Show

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Neil Garfield, Esq.

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

Tonight I will discuss the curious case of blatant economic fraud on the entire country by investment banks. They figured out how to eliminate the risk of loss on lending, how not to be labelled as a lender subject to lending laws, and who pursue collection, administration and enforcement of obligations that do not exist.  And then by denying the receipt of funds that paid off the loan on their own books they continue to operate as though the loan exists, and to designate fictitious entities who are falsely represented by foreclosure mills as owning the defunct obligation.

Specifically we explore how to stop this scheme from operating at all.

Foreclosure litigation is like the game of Chess. The banks line up a set of pawns for you to fight with while their real players hide behind multiple layers of curtains. In my opinion it is time to subpoena Black Knight to the table in most instances. Make them produce documents and answer questions. Note that with Chase (and possibly Wells Fargo) there are periods of time when they had their own alter-ego to Black Knight, so forensic investigation is required.

Black Knight, fka LPS (Lender Processing Services), owner of  DOCX and employer of Lorraine Brown who went to jail for fabricating tens of thousands of documents to create the false impression that homeowner obligations still existed and that some designated hitter (e.g., US Bank as trustee for the registered holders of pass through certificates issued by the SASCO Trust a1-2009) owned the obligation.

And then following that logic, since they own  the obligation, the refusal of the homeowner to pay the obligation is assumed to have produced a loss (financial damage). And then, following the logic, being the owner of the obligation and having suffered a loss that was caused by the homeowner’s refusal to pay, the lawyers declare a default on behalf of this designated hitter. And then they foreclose.

The possibility that there is no obligation and that there is no financial loss suffered by anyone  is currently thought of as stupid theory, thanks to the prolific PR efforts of the investment banks. And yet there is not a single case in which any foreclosure mill has produced any admissible evidence regarding the establishment or current status of the account reflecting ownership of the alleged homeowner’s obligation. Not a single case where actual loss has been in the pleading or notices. For two decades this game has been played by investment banks.

In addition, after the origination  or acquisition of the apparent loan transaction,  a new player is introduced (e.g. Ocwen), who claims to have been hired to service the loan accounts that are apparently owned by the designated hitter. But Ocwen only partially “services” the account. It might  have authority to act as agent for the designated hitter,  but the designated hitter has neither authority or ownership of the obligation. So Ocwen is a designated hitter for who ever is really doing the servicing. That party is in most cases Black Knight. In the Chess analogy Black Knight is the Knight who serves its masters (investment banks) and is willing to sacrifice itself and the self-proclaimed “servicers” to protect the King (investment bank).

This means that all records, payment history and document handling does not originate with Ocwen, but rather with Black Knight, who is actually answering to an investment bank who receives both proceeds from homeowner payments, and proceeds from illegal foreclosure sales. And the investment bank receives it as off balance sheet transactions that are actually revenue that is untaxed.

So interrupting the game of foreclosure mills in using “representatives” employed by “servicers” like Ocwen undermines the admissibility of any testimony or evidence from that representative, including foundation testimony for the admission of “business records” as an exception to the hearsay rule. It also brings you one step closer to the King. The harder they fight against you for doing this the more confident you will become that you have hit a nerve — or rather, the achilles heal of this entire scheme that would be a farce if it wasn’t so real.

And lawsuits against the designated hitter might have more credibility if you included not only the designated fake servicer but also the real servicer like Black Knight. And remember the truth is that in virtually so-called loans the end result is that there is no lender and there is no loan account on the books of any company claiming ownership of the obligation. They all get paid in full from “securitization” of the data.  But that means that they never sold the debt, which is an absolute condition precedent and standing requirement for bringing a claim.

So when US Bank is named as a claimant by lawyers, those lawyers have had no contact and no retainer agreement with US Bank who is completely unwilling to grant such right of representation for litigation in their name. But for a fee they are willing to stay silent as long as they don’t really need to do anything. And when Ocwen comes in as servicer, they have no original records and they did not board the records of another servicing company. They merely have access to the same proprietary database maintained and owned and operated by Black Knight who has full control over entries (largely automated through the use of lockbox contracts and then scanned), changes and reports.

So maybe it is time to subpoena  Black Knight who serves as the representatives of the investment banks and maybe it’s time to sue them for being party to a scheme specifically designed to deceive the courts and homeowners.

Take a look at a submission I just received from Summer Chic:

I received the rest of prop.  taxes from 2017 and here is a very interesting detail I want to share.

On November 6, 2019 Black Knight (who deny any involvement to my property*) filed a legal case against PennyMac whom BK accused on theft of their trade secrets and removed from their system.

Almost immediately customers started to complain that PennyMac is unable to perform their “servicing” due to a “major glitch” in their “updated system”.

In other words, PM is NOT able to conduct any functions without access to Black Knight’s MSP.

Since 2017 my taxes were purportedly paid by Caliber – whose tax PO Box  was different than PO box for my check payments.

On Sept. 15, 2019 PennyMac purportedly “paid” my taxes.

But on December 31, 2019 (!) my taxes were paid  by CoreLogic while the receipt shows as Coreligic-PM. I assume these were Spring taxes (which are due in March) because I don’t see any March receipts.

On September 16, 2020 my taxes were again paid by CoreLogic , now without any reference to PennyMac.

During all time in question CoreLogic repeatedly deny any relationship to my property even though they also conducted appraisal for my property via  la mode appraisal software.

In other words, it is clear who handles all escrow accounts.
*On June 15, 2016, or the same day as I filed my application for the loan, Black Knight  ordered Flood Map determination acting on behalf of Perl. Determination was done by CoreLogic who is allowed to use FEMA’s forms and who owns a Hazard Map determination company.
*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

FREE REVIEW: Don’t wait, Act NOW!

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

 

Processing Fees are more than illegal — by adding them to balance due, the default letter is defective.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

How to ask the right questions in discovery

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

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

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

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

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

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

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

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

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

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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Gary Dubin, Esq. Scores Another Victory for Homeowners in Hawaii in Notorious LSF9 Case

More kudos to Gary Dubin who keeps producing favorable decisions for homeowners. This ruling is important for a variety of reasons. This time it is all about the rules of evidence and legals tanding to even bring the claim.

see US Bank LSF9 v Verhagen 7-20-20

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The first reason is that it presents a court of appeal that drilled down on the actual facts rather than the presumed facts. This is a substantial departure from prior judicial practice. I think it reflects a change in judicial attitude. While nobody is willing to say that these foreclosures are entirely fraudulent, The suspicions and reservations about these actions are starting to surface.

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So the second reason that this may be important is that the court made an effort to identify the labels used to identify people who supposedly had knowledge and Authority.
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The third reason is that this decision brings us back to basics. This is not new. But it is instructive. If there was no claim to begin with then there is no foreclosure.

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The fourth reason is that this deals within the infamous LSF9 “trust” for which US Bank is labelled as a trustee.
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The fifth reason is that the decision deals explicitly with rules of evidence — what is admissible and what is not admissible evidence. And specifically affects the admissibility of records of self-proclaimed servicers.
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Unless the robo witness can explain to the court’s satisfaction how he or she knows that the records of the “prior servicer” were created in in the ordinary course of the business that the lawyers are saying was bing conducted, then the only way those prior records can be admitted into evidence is by a custodian of records of the prior entity that was claiming the right to service the homeowner account.
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What is clear is that no such witness is available because the “prior servicer” was not actually performing any servicing function on behalf of any creditor (because there is no creditor). The whole reason that Caliber became the designated “servicer” was to prevent Chase from being accused of perjury. This decision brings them back into something they don’t want to be in.
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Chase knows that the debt was never purchased or sold by anyone to anyone. They know that the money received from homeowners was not for the LSF9 trust and they know that the foreclosure is not being pursued for the trust or the trustee, US Bank, nor the investors who bought certificates. Chase knows that this foreclosure is being pursued for Chase and Credit Suisse.
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And Chase knows that if this simple fact is revealed, the court will demand that Chase and Credit Suisse prove they are entitled to receive those proceeds and that the court will question why the action was not brought in their name. Chase knows they can’t answer those questions because there is only one answer — they are pursuing foreclosure through intermediaries because they want the money — not to provide restitution for unpaid debt to someone who paid for it but to increase their swollen wallets with more profit.
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The devil is in the details. And this time the details revealed the fatal deficiency in the foreclosure action. But it’s not over. Having vacated the Summary Judgment, the foreclosure mill is being given a second bite at the apple with a real trial. In all probability this case will be settled under seal of confidentiality and will never get to trial But if it does get there, then the lawyers must hold the trial judge’s feet to the fire and require actual testimony of actual personal knowledge as to the record-keeping practices of the prior servicer.
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The lawyers should also focus on the most basic assumption — that Caliber or Chase were ever “Servicers.” If they are not then their records are suspect and are created solely for the purpose of foreclosure proof rather than being records of actual transactions. Such records are inadmissible without corroboration from a credible reliable source.
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The way to attack this, I think, is by forcing the issue on who received payments from the servicer. You won’t find a creditor in that mix. The ancillary and more important question is who has previously received the cash proceeds from the forced sale of residential homestead property in foreclosures commenced in the name of the LSF9 trust? Neither US Bank nor the trust ever saw a dime — and they are never intended to receive anything.

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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ALERT! Migrating from fake notes to eNotes: If consumers don’t stop this they will be without any defense to any abusive practice and any fake account started in their name

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

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

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

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

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

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

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

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

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If you want to submit your registration form click on the following link and give us as much information as you can. CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us.
In the meanwhile you can order any of the following:
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*
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*
*
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*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
*
Please visit www.lendinglies.com for more information.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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Who is PennyMac and Why Was It Needed by Wall Street Banks?

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

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

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

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

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

Specifically, he claimed that Countrywide conspired with LandSafe and homebuilder KB Homes to inflate the appraised value of homes, boosting the size of the lending giant’s loans to homebuyers. In order to accomplish this, the lending giant allegedly used a number of strong-arm tactics to pressure appraisers to report favorable home values.
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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It’s time to reassess the role of investment banks, originators, servicers and other players claiming “securitization” before the next foreclosure tidal wave.

Since foreclosures are about to start another meteoric rise, this would be a good time to write a new article on what went wrong the last time, what is going on now, and what is still likely to go wrong this time.
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I know that some of the rantings on the internet seem like the spillage of conspiracy theorists and some of them are just that. But overall they are right.
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The bottom line is that back in 1993, investment banks latched onto a scheme that had been partially developed by Michael Milken, who went to prison. The new scheme was patently illegal, which made it one step over the line that Milken actually didn’t cross. His junk bonds were perfectly legal. Drexel Burnham disclosed the real risks. But Michael had bigger plans. The plan was to raise the perception of junk bonds to investment grade.
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But then he went to jail. But upon release he was immediately paid $50 million and then hundreds of millions more to help devise the scheme. His actual role is subject to conjecture.
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The goal was to tap the largest market for debt in the world — home lending. It required all the major investment banks (Citi, Goldman, JPM, Credit Suisse) to “cooperate” (i.e., conspire).
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They had to each support the “securitization” schemes of each other, entice other lesser investment banks into playing (Lehman, Bear Stearns) and then influence or buy off fund managers (pension funds) to purchase the junk bonds they were issuing as “Certificates.”
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It as the “holy grail” of investment banking. Issuing trash securities as though it was for a third party issuer when in fact the issuer was the investment bank itself.
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To justify the purchases by stable managed funds, the investment banks paid off and coerced the insurers into issuing insurance contracts and the rating agencies to issue highest quality ratings based upon false assumptions about diversification of risk. The error is simple: diversification is irrelevant if the entire group of loans is (a) not owned and (b) tainted by bad underwriting.
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And the insurance contracts were payable not to the investors nor even for their benefit but rather for the profit of the investment bank who purchased it. The contracts were based upon index performance not actual losses.
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The same is true for the bailouts that occurred. No losses were paid off because the parties receiving the benefits of insurance or bailout had no loss. See the evolution of the definition of TARP from something covering loan losses, to something covering losses on certificates issued by investment banks, to an undefined toxic asset category.
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The now infamous AIG bailout was primarily for the benefit of Goldman Sachs. Having installed their former CEO as US Treasury Secretary, a very reluctant President Bush was convinced to bailout AIG on the false premise that the financial markets would collapse if he didn’t. But the proceeds went to Goldman Sachs as pure profit.
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AIG took the money to pay off Goldman for its bet that the certificates would decline in value. The decline in value was based upon a contractual provision that gave Goldman the sole right in its sole discretion to declare the event. The money covered no losses because Goldman had no losses. It was pure profit. And when the money was received (around $50 billion from the bailout, bonuses, parties and lavish spending ensued.
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Meanwhile the only two real parties to the scheme — investors and homeowners — were left out in the cold.
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At the end of each securitization cycle, the goal was to avoid liability for violations of lending and securities laws. Avoiding lending laws was easy. They used sham entities to act as “originators” who served for a fee and who appeared on the note and mortgage as a lender.
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Avoiding violations of securities was also easy. they disclosed enough to be able to say they told investors what they were doing, the investors were sophisticated and should have been able to ascertain the risks, and through leveraging the typical herd mentality on Wall Street they created a stampede in all securities brokerage firms to buy and sell the certificates. The world was hooked on a financial weapon of mass destruction.
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Eliminating the liability of a lender in form and substance meant that the role of creditor or lender had to be eliminated. That was accomplished by actually eliminating the homeowner’s debt without notice to the homeowner. Hence the “boarding process” asserted in court is fake. There can be no boarding of a debt that does not exist and a history of payments on the nonexistent debt is irrelevant.
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Each party other than the investor got paid in full. But the homeowner never received any notice of reduction due to receipt of payment because nobody maintained an accounting entry on any books of record that showed that the debt was owed or owned.
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The debt could not be owned without a corresponding entry that showed value being paid for the debt. No such transaction had never occurred since the only actual value was paid by investors, who didn’t own the debt.
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The investor never purchased any debt, note or mortgage. At the end of the day there was no person or entity that legally owned any debt, note or mortgage and therefore no lender or lender successor who could be liable for violations of Federal and State lending laws.
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The scheme then required foreclosure on debts that had already been fully paid several times over. To do this the investment banks had to again resort to using sham entities who would fake their roles using fabricated, false, forged and backdated instruments literally manufactured out of thin air. Despite numerous settlements in all US jurisdictions for such practices, they continue unabated.
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And the proceeds of foreclosure are ultimately received by the investment banks who pay out lavish compensation for the players who contributed to the foreclosure process. *
Since no loss is covered or paid or recorded on any books of account, the money is literally free money in which for tax purposes, is falsely reported as payment on loans. So the foreclosure proceeds are pure profit which is untaxed, at least up until this point in time. Investors never see a penny and homeowners are never the wiser that their debt does not exist anywhere.
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In order to accomplish all this the banks needed to coordinate their activities. enter Black Knight who is literally a  successor to DOCX, which was acquired by Lender Processing Systems (LPS). Lorraine Browne took one for the team when she became the only person in the scheme to go to jail for fabrication of documents.
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Somehow the courts continue to apply presumptions that are supposed to only raise from inherent credibility of documents that are patently false. This results in foreclosure on the erroneous assumption that even if the paperwork is somehow false or even fabricated the proceeds will find their way to the investors. That presumption is wrong.
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Black Knight is the hub in which all things are centralized to prevent foreclosure of the same homeowner transaction by more than one entity — something that would expose the false nature of all of the foreclosures.
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By getting a foreclosure judgment the investment banks succeeded in getting a legal stamp of approval on everything that had transpired before the foreclosure was initiated and the grounds on which they could report the proceeds as return of loan. Basically all fabricated false documentation emanates by or at the direction of Black Knight.
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Judges of all stripes have always been curious about the muscle chairs strategy of presenting several servicers, plaintiffs and other parties. Maybe this time, with a little help from the press, they might be open to considering the fact that the investment banks are not saving the economy, they are stealing from investors and homeowners alike. And if they start asking for fake bailouts again they are stealing from the government and taxpayers. 

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New foreclosure rocket dockets will emerge unless these practices are controlled or stopped. If the claimant is not the owner of the debt, present, existing, black letter law, does not allow foreclosure. In fact, enforcement of the note or separately, the debt, is not allowed unless the right to enforce comes from the owner of the debt. The law is clear, unless someone pays value, they can’t own the debt. Assignments of mortgage without the debt are a legal nullity.
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To “save” the economy the only legal option available is to reassess the homeowner transaction using the equitable powers of the court. It might be true that the homeowner obligation can be enforced after such a reassessment — but only after the facts are all exposed and all stakeholders are brought to the table.
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This would require that the court hear a properly filed pleading requesting equitable reformation of the contract to allow for maintaining the homeowner obligation because without that, the entire securitization infrastructure is in danger of collapse — even though nobody in the securitization infrastructure actually ever owns the debt or suffers a loss from nonpayment.
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To make the homeowner obligation enforceable the court must allow a designee or nominee to pose as creditor. Further the court must adopt procedures that allow a party to act as the designator, even though neither the designee nor the designator own the debt and will suffer no loss from any payment or nonpayment by a homeowner. The current practice of allowing such designees to reap such rewards is  not legally sustainable and probably unjust and unfair.
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The legal analysis requires a beginning point of analysis the contracting intent of the contracting parties. And that in turn requires an analysis of the identity of the contracting parties.
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That analysis results in an indisputable truth: taken separately there was no meeting of the minds — because the homeowner wanted a loan and the investment bank , acting through the originator, wanted the issuance of securities — the note and mortgage — without anyone assuming the substantive role of a lender.
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But taken together a contract can be fashioned in which the homeowner transaction can be treated as a loan contract and the absence of any creditor can be adjusted to insert a designee or creditor who can enforce. but ti do that, the entire contract must be taken into consideration.
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If the homeowner was seeking an actual loan under lending laws but didn’t get it, what is the consideration for entering into a deal that was so profitable for the other contracting parties, whether they were stated or concealed?
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If the answer is nothing, then the court must determine the proper amount of consideration that the homeowner should have received for being drafted into a risky securities scheme — a scheme in which his rights as a consumer, borrower or customer were virtually eviscerated by the substance of the deal.
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The only other legal option is common law rescission. That will result in dismantling the entire securitization scheme.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

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

How to Use the Business Records Exception to Hearsay Rule to Keep Out “Servicer” Records in Foreclosure Cases

Fundamentally you must understand that the investment banks want you and everyone else to look only at the payments history — not the debt, who owns it and whether anyone suffered a loss resulting from any lack of payment by the homeowner.
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Their strategy is to get the court to presume that in the absence of payments someone must have suffered a financial loss since the debt was clearly established in a transaction in which the homeowner received money and issued a note and mortgage. In the present securitization era that paradigm is wholly untrue but not obvious because the banks turned “lending” on its head. The homeowners took what they thought was a loan but the banks were not lenders and had no intention of becoming lenders.
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The problem is that most homeowners believe the myth promulgated by the banks because they don’t understand what really happened in what the banks call “securitization.”
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The truth is that nobody has suffered a financial loss from “nonpayment” by the homeowner.
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Everyone has already been paid as to the principal obligation.
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Collection efforts directed at the extinguished obligation are pure business strategy designed to increase already astonishing profits achieved through “Securitization” which like everything else is not in substance what the label conveys, to wit: the homeowner obligation was never sold to investors and therefore cannot be said to have been securitized. 
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One of my most prolific contributors points out how Fannie Mae uses a company who to this day incredibly remains out of the limelight despite being the only company whose division president, Lorraine Brown, went to jail for falsifying documents. It wasn’t really her fault. There were no transactions that fit the mold required to have an enforceable claim in foreclosure. But the banks wanted the money anyway. So they invented the appearance of transactions even though nothing had happened in the real world.

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It isn’t just Fannie Mae. Most homeowner transactions are established on LPSDesktop.

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The banks, in their never ending quest to send us down rabbit holes only present the “servicers” and their “business records”.

They do that to (a) avoid the hearsay rule because someone comes in without knowledge and says he has knowledge that these records were created in the ordinary course of business and they were created at or near the time of the transactions — which is only partially true and (b) to avoid the pesky problem of presenting details about the transaction that could show that the debt and the role of the creditor were extinguished in the process they’re calling “Securitization.”

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Practitioners would be wise to keep in mind two things:
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(1) the “servicers” are not servicers in the sense that anyone thinks of a servicer. They do process payments from homeowners but they do not process anything else. — The “servicer” records do NOT show where payments were forwarded, which would identify and confirm that the claimant or Plaintiff in foreclosure is in fact the owner of the debt.
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(2) the payment record from the “servicer” reflects only those payments received by that servicer (and perhaps an unaudited compilation of prior payments reported through LPS Desktop). The payment history might be admissible in evidence but only as to the record of payments, about which the practitioner should object for lack of foundation. — Without testimony or other evidence that (a) the debt was established as owned by a specific creditor anad (b) that the payment history is part of the records of the creditor, not just the servicer, the payment history should be excluded. 
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(3) A subpoena issued to Black Knight fka Lender processing Systems, aka LPS, demanding records relating to the subject debt, note or mortgage will be met with a barrage of objections, which if properly litigated will probably result in a favorable decision for the homeowner.
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(4) The object of litigation of foreclosure defenses is to show that the debt was removed from the chain. You accomplish this by relentlessly and aggressively pursuing the identity of the creditor. there isn’t one where any REMIC is involved.
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(5) Without a creditor there can be no delegated authority to enforce, collect or even administer the loan. “Authority” does not exist in a vacuum. there must be a source of authority. And the source of authority must be someone who legally owns rights to the debt over which he can delegate, as owner, the rights to enforce. 

see Black KnightÕ latest innovation: LoanSphere supports entire loan lifecycle – HousingWire

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

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If you want to submit your registration form click on the following link and give us as much information as you can. CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us.
In the meanwhile you can order any of the following:
*
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
*
Please visit www.lendinglies.com for more information.

Coming this fall! A new wave of illegal foreclosure claims. Will we get it right this time?

Some have pointed to some articles indicating that the securitization ponzi scheme collapsed already.

It might be more accurate to say that the scheme was reorganized rather than collapsed. But even if it collapsed the Wall Street banks will continue sending servicers and foreclosure mills into the field to file foreclosures. After, all, it’s free money if they win, and there is so far, a statistical certainty that in nearly all cases they will win simply because of the erroneous belief by homeowners that they have done something wrong and that they have a moral obligation to leave the house, once they stop paying.

So homeowner will give their precious house to people who have no right to receive it.

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We are a long way from when homeowners realize that they were flim flammed from the very start and that taking the substance of the homeowner transaction in total and in perspective, the homeowner (a) did not owe any money to anyone claiming it and (b) the homeowner was probably owed more money from the investment bank than he/she could possibly owe under the note and mortgage that was issued.
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It wasn’t a loan and we should stop calling it that. The “lender” side had no lending intent. At the conclusion of the process there was no creditor holding the homeowner obligation as an asset. Therefore they were not lenders or even creditors and accordingly not liable or accountable to act in accordance with lending and servicing statutes.
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The confusion emanates from the fact that all homeowners entered into the transaction with borrower intent. But there was no lending intent from the other side. The other side masked the real transaction as a loan to deceive the homeowner into accepting the label “borrower”.
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The real transaction was payment to the homeowner for issuance of note and mortgage to start the securitization processes. It was in reality a simple commercial transaction, to wit: the investment bank, through intermediaries agrees to pay money to the homeowner in exchange for the homeowner issuing a note and mortgage and putting up their home as collateral for an obligation that offsets the payment received. It could have been a loan, but it wasn’t.
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Because the banks lied about the transaction to the homeowner and to further make it look like a loan, they got the homeowner to issue a note and mortgage in most cases to an entity that never paid any money. This might negate the consideration for the transaction altogether because they were making a payment  but also getting a promise to pay even more to unknown creditors who would be illegally designated later. That part is a close question.
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But in quantum meruit, quasi contract and reformation, the only legal way that their designation system could be made legal is by getting consent from the homeowner to that system of designation of a creditor to act as a lawful creditor even though it wasn’t. That was the real reason for MERS, the use of Originators and the offering of “modifications.” The players on paper are designees or nominees — not real players. They are using the language of the notes and mortgages to imply consent to a “no creditor” transaction.
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But that is not informed consent or real consent, nor is it legal without other language of contract. A binding contract must have offer, acceptance, clear terms and consideration between the parties to the contract. In most cases the homeowner transactions were therefore not binding contracts. The Payee on the note was not a creditor. The doctrine of merger cannot apply when the payee is different from the source of funds unless there is a specific express contractual provision stating that. The mortgagee is usually a nominee which I think is a tacit admission that there is no creditor.
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In order to foreclose, the party asking for foreclosure remedy must be a creditor. A creditor is only one who either (a) owns the debt or (b) represents someone who owns the debt. Ownership of the debt is only accomplished in one way — payment of value in exchange for an instrument conveying title to the debt from an owner of the debt to a new owner of the debt.
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The ONLY time any value was paid was by investors. But they did not get any instrument of conveyance of the debt. Quite the contrary. The intent was to make certain that they would never be considered lenders. What they received was a discretionary promise from the investment bank dba REMIC trust to make payments that were partially indexed on but not dependent upon receipt of payments from homeowners.
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It is therefore impossible for any transaction to have occurred wherein value was paid for ownership of the debt after the investors paid the investment bank. Even if someone wanted to pay value in exchange for an instrument of conveyance of ownership of the debt, there was nobody to pay.
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The only party who paid value was the group of investors or arguably the investment bank. But neither of those entities had ever received any instrument of conveyance of ownership of the debt and in fact they disclaimed any such ownership because it would have made them lenders subject to TILA and other lending and servicing laws.
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BUT in order to foreclose, the papers filed by the foreclosure mill would need to show that a creditor was applying for the remedy of forfeiture. See Article 9 §203 UCC. So that required assignments of mortgage to be prepared, executed and recorded even though there was no financial transaction between the parties. In short, the scheme required the preparation, execution and recording of false utterances in false documents that were forged and illegally recorded.
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Since the homeowner has always assumed the homeowner transaction was a loan agreement, almost nobody has thought to credibly and properly challenge these assignments as legal nullities.
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The credible challenge would be not only that there was no consideration paid for the assignment, but that the payment of consideration was not a commercially reasonable basis for the execution and recording of the instrument, since the only consideration came from parties who did not and do not want ownership of the debt.
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The absence of any valid assignment is not just a fact; it is legally impossible under current securitizations schemes to have a valid legal assignment. The investment banks as intermediaries between investors and homeowners have structured the cash flow such that the investment banks get most of the benefits from the securitization process at the cost to and detriment of investors and homeowners — the only two real parties in interest in the homeowner transaction which is mistakenly called a “loan.”
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The note, payable to a party with whom the homeowner unknowingly conducted no actual business, creates a liability under Article 3 of the Uniform Commercial Code regardless of the lack of consideration. The maker of the note has defenses to be sure, but if someone buys the note for value, without knowledge of the maker’s defenses, and in good faith, then the maker must pay the note and the only remedy available to the maker is by making a claim against the Payee on the note and anyone else that induced him to execute a note in favor of someone who gave him/her nothing.
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The foreclosure mills for claimants in foreclosure do not plead status as a holder in due course because they can’t prove the elements: payment, good faith and lack of knowledge of borrower’s defenses. But they induce both homeowners, their attorneys and the courts to treat the claimant as a holder in due course because of the complexity of legal analysis in distinguishing between an HDC, holder, possessor and anyone with rights to enforce.
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As a result, because the position is not properly challenged, the court then often reduces or even eliminates discovery on the central issue — whether the claimant is a creditor of the homeowner.
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The “rights to enforce” argument almost always leaves out the presumed component that is a condition precedent to any such analysis, to wit: that the creditor has authorized the enforcement. But if there is no creditor — i.e., anyone holding the debt as an asset — then such authority cannot legally exist.
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This explains the appearance of false, fabricated, forged, backdated and robo signed documents that are still regularly used. Since there is no creditor the pursuit of foreclosure is a pursuit of profit rather than restitution for an unpaid debt. It is not recovery on a loan.
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And if the transaction was unraveled from its complex appearance, it is plain as day that the homeowner is entitled to credits and probably payments from the investment bank under quantum meruit and quasi contract for being drafted into a highly profitable securitizations scheme that gave the homeowner nothing for initiating the scheme.
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We are about to be besieged with new foreclosure claims. Let’s get it right this time. The “flood of litigation” argument for rocket dockets is not valid because it presumes that the claimant does have status as a creditor and that the foreclosure is for restitution of an unpaid debt.
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Aggressive and persistent demands for identification of the claimant and for evidence of proof payment for value — along with thoughtful, credible and persuasive presentation might well result in prevention of a flood of foreclosures because there is no entity that actually stands to lose any money arising from the action or inaction of any homeowner.
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They won’t plead injury because there is no injury. They can’t prove any injury. They can only induce the court to presume it based upon erroneous application of legal presumptions arising from the apparent facial validity of documents that are neither facially valid nor true representations of any transaction in the real world. 

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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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Has any homeowner transaction ever been sold to investors? No? Then why are we accepting the bank myth that it was securitized?

Bob gives me a mortgage and I sign a note for $300k. Bob assigns the mortgage and note to Steve in exchange for “certificates / securities.” Bob retains the note and pledges to Jim in a collateral assignment to raise money to fund more loans. (i.e. WaMu and the Federal Home Loan Banks). I stop paying and soon Steve declares a default and tries to foreclose. My defense is that Steve doesn’t have the note, never took the note, and the note was collaterally assigned elsewhere before Steve filed the foreclosure action. If so, we can make that same defensive argument in every case it would seem.

No that is not a good defense. Your defense should be centered on who owns the debt. And only someone who has paid value for the debt can own it. If someone pays value in exchange for ownership of either the note or mortgage, then it is presumed that they own the debt — and it would be very hard to rebut that presumption.

So if someone pays money without getting or being entitled to a document that transfers the ownership of the debt from the current owner to the new owner, they have not acquired the debt.

Similarly, if someone has not paid value for the debt or note and they do get such a conveyance of ownership of the debt, even from one who is the owner of the debt, they too don’t own the debt. And a non-owner of the debt cannot issue any rights or instructions regarding the debt without deriving authority from an owner of the debt who paid for it.

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The transaction between Bob and Steve was a sale. Steve paid value unless the certificates or securities he used as payment were known to be worthless at the time of the sale. The fact that Bob retained possession of the note does not change the analysis. When Steve seeks to enforce the note he either has to get Bob to produce it or if he can’t, then he needs to plead a lost note. The transaction that you have used as an example does not convert the note to a security.

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Steve also has the option of suing Bob in the event that Bob is reluctant to turn out for possession of the note. but in all events Steve can show that he bought the note, which means that he bought the debt, and therefore is probably a holder in due course or at least a holder with rights to enforce as the owner of the debt.
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But the analysis does change if the example is changed slightly. If Bob was loaning you money because Steve was contemporaneously taking Bob out of the loan, then in substance the conduct of the parties shows that Steve was the actual lender and that Bob was simply an intermediary. This is the essence of a table funded loan which is against public policy as set forth in the Truth in Lending Act.
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So if Steve did not take possession of the note because Steve did not want to be accountable or liable for violations of lending laws as a lender, there is a case to be made that the nature of the transaction shifted. And if Steve gave Bob the money to lend to you because Steve was contemporaneously divesting himself from any risk of loss on the loan, then the argument would go one of two ways.
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Either the next person in the chain acquired ownership interest in the debt and note — or if Steve was merely selling derivatives whose value was indexed on the performance of your loan, then then the debt and note probably lost a creditor who could legally claim rights to enforce. As I see it, this would definitely be true if nobody in the chain was carrying the debt and note as an asset after Steve made his sale of derivatives.
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But I don’t think that under Securities analysis, the latter example would result in finding that the note had been converted to a security. It’s hard to see any analysis that would support that conclusion. If nobody was paying for legal ownership of the note then how would the note be converted?
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Of course that could be one possibility that would preserve the securitization infrastructure. And maybe if the courts catch the Wall Street banks with their hands in the cookie jar, the banks themselves might push that idea.
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Given the political climate that allows Wall Street to make up its own rules, that might happen, leaving both investors and homeowners out in the cold. That is why I’m starting to push Reformation as the better alternative which takes all stakeholders into account.

HELOC Securitization Analysis — Why Are There Two “wet ink” Signatures? What Rights Does MERS Possess?

“a transfer of the mortgage without the debt is a nullity, and no interest is acquired by it”

“because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.”

The writer of this article shall remain anonymous. He sent me the following. I concur with his analysis:

I came across your June 17th post about the mortgage exec that double-pledged some notes.  This is a subject I’ve been looking into for a while, thanks to Nye Lavalle’s writings – damn him for sending me down that rabbit-hole.  You might also look at:

https://www.justice.gov/usao-sdny/pr/former-comptroller-mortgage-lender-charged-bank-fraud-and-wire-fraud and the incitement at https://www.justice.gov/usao-sdny/press-release/file/1017921/download

As I came to realize that this isn’t a one-off scam…  I got to thinking about why do all closings require two wet-ink originals?  Not only for “sum certain” mortgages but for HELOC’s too.  So, I darned my tinfoil hat and let my mind wander into the conspiracy abyss.  I’ve always been uncomfortable with the double-document signing at closings.

As I carefully nit-pick through my own documents, I can’t help noticing that, often is the case that the County recording uses one set of the wet-inks, while the bank uses the other.  Is this just a matter of convenience, whereby the closing title/abstract company sends one set to the county clerk and the other to the lender, for its MERS recording.  Of course, the counties don’t record notes, only mortgages, so that’s a bit of a chink in the armor there.

Then I realized that the Clerk set isn’t indorsed because that process comes later (albeit not much later, actually depending on the county’s back-log it could be sooner than later) – OK, no big deal – BUT WAIT – it’s not like they wait to get the recorded set back and then indorse it – no – they just indorse the other set.  So, the secondary-market set is not the recorded set.  Hmmm, Ok, a bit nefarious, but is it a non-starter for foreclosure –  probably not.

But then I realized that my HELOC had the same slipperiness.  In HELOC foreclosures (at least mine with Citibank), the bank presents the endorsed HELOC (HELOC-CEMA because it’s NY) as its prima facie evidence for standing, swearing that it’s the “indorsed note”; while sometimes also swearing that it’s not securitized it never left the bank’s hands (holding), which in-and-of itself is curious, because if it never transferred, then why is it indorsed?

TIME OUT:  No Neil, I didn’t make a spelling mistake (indorsed vs endorsed), but I am messing with you, because so are the banks.  Of course, you know (but your readers probably don’t, and many judges probably miss the subtlety too).  “Endorse” means accredit by bestowing recognition; whereas “Indorse” means to sign a negotiable instrument for transfer as per the UCC.  Sadly, many dictionaries, especially software and web-based lexicons make these two words synonymous, which they are not.  Some lexicons don’t sanction“indorse” as a correct spelling, which it is, but as a different word, not just an alternate British/American spelling choice.

OK, back to the bank’s slip & slide of portending that they are presenting an indorsed note.  Nope, a revolving line of credit agreement (HELOC or Reverse mortgage) is not a note.  It’s not a “sum certain” so it can’t be a note, because a “note” is a negotiable instrument (as per article 3 — but even article 9 provides the same definition albet enables transfer by assignment because it may not be indorsed, hence non-negotiable).

This lack of “sum certainty” restricting “note” status was adjudicated in NY Appellate 2nd Dept. in 2018 (i.e. it’s not a note)

But it’s rarely cited – probably best, since most lawyers would mess-up the citing and blow it for those of us who know how to use it – i.e. hand judges opportunities to make bad precedential decisions.

An observing-eye reminds us that a note is a one-sided promise, whereas an agreement is a two-sided contract (signed and countersigned – regardless of adhesion); thus, not really assignable, carte blanche, it requires a blessing by both parties but that step never transpires – imagine that…

Anywho: This is just the jumping-off point, the next part is the fun stuff.

So, the bank provides affidavits and exhibitions swearing (a/k/a perjuring) up-and-down that the indorsed note is right there in front of the judge.  Sure, it may look like a HELOC agreement, but the plaintiff’s attorney assures the judge, it’s a note – pointing to the prima facie doc – look right there, there’s the indorsement, so it must be a note – Right?  WRONG!  i.e. your long-standing argument about “presumption”.

Well, first of all, we (you and I) believe that the HELOC was securitized, so they don’t, or shouldn’t really, have a copy of the document anyway.  But we haven’t really dug much deeper, because we believe it’s impossible to get anywhere  with the dastardly banks in discovery.  So, I did some digging…. albeit without the help of formal discovery.

HELOCs (revolving lines of credit) can’t be securitized, because securitizations require fixed assets for valuations, and a revolving line of credit isn’t a fixed asset, it can’t be valued “sum certain” from its “four corners.”  But wait, that’s ridiculous, because we all know that HELOCS, Reverse mortgages, Credit Cards, etc. ARE securitized; perhaps not as RMBSs but rather as ABSs or other permutations.  So, what the hell am I talking about, saying they can’t, it’s impossible, bla bla bla…

You guessed it, there’s a work-around; and it’s documented.  The bank (the originator) transfers the HELOCs to a flimflam trust.  To do this they “endorse” the Agreement in-blank, which looks exactly like an “indorsement-in-blank” but the endorsement is an accreditation, not a negotiation.  Now the trustee (a/k/a “the Issuer”) does his sorting and stacking of the pool and – and this is the magic part – then, he (or she) makes notes against the HELOCs.  Yes, of course, it’s a legal fiction, and they have a name for it,  – “HELOC-backed notes” and it is those notes (the HELOC-backed notes) that are securitized.

The originator (who is often the servicer) retains the HELOC agreement & mortgage (a/k/a “lien”) since it is supposedly the “PETE”, but is it?  Is it really?  Does it matter?  Well, not until the servicer has the enviable task of foreclosure of a HELOC that has been pledged elsewhere, likely to an ABS that’s vaporized into the secondary market either-zone.  Hence, the foreclosing bank has nowhere to send the proceeds from the foreclosure – oh well – that’s a shame.

There’s more, but I sense you’re getting bored.  HELOC-backed notes – interesting.  Think about the Article 9 maxim “the mortgage follows the note;” A maxim laid down over a-hundred years ago by Justice Noah Swayne (Appointed to SCOTUS by Abraham Lincoln – a republican – LOL)

“The note and mortgage are inseparable; the former as essential, the latter as an incident.  An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”  Carpenter v. Longan (USA 1872)

Words that still carry-the-day in such recent stare decisis cases as Bank of NY v. Silverberg (NY 2nd Dept. 2011).

Ironically, this HELOC-backed note means that the note follows the mortgage(a/k/a HELOC Agreement, with a mortgage nested inside it).

“The issue presented on this appeal is whether a party has standing to commence a foreclosure action when that party’s assignor — in this case, Mortgage Electronic Registration Systems, Inc. (hereinafter MERS) — was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes. We answer this question in the negative.

Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 275 (N.Y. App. Div. 2011)”

because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.

Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 283 (N.Y. App. Div. 2011)

Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 280 (N.Y. App. Div. 2011) (“ “a transfer of the mortgage without the debt is a nullity, and no interest is acquired by it” ( Merritt v Bartholick36 NY 44, 45 [1867]; see Carpenter v Longan83 US 271, 274 [an assignment of the mortgage without the note is a nullity]; US Bank N.A. v Madero80 AD3d 751, 752US Bank, N.A. v Collymore68 AD3d at 754Kluge v Fugazy145 AD2d 537, 538 [plaintiff, the assignee of a mortgage without the underlying note, could not bring a foreclosure action]; Flyer v Sullivan284 App Div 697, 698 [mortgagee’s assignment of the mortgage lien, without assignment of the debt, is a nullity]; Beak v Walts266 App Div 900). A “mortgage is merely security for a debt or other obligation and cannot exist independently of the debt or obligation” ( FGB Realty Advisors v Parisi265 AD2d 297, 298). Consequently, the foreclosure of a mortgage cannot be pursued by one who has no demonstrated right to the debt ( id.; see 1 Bergman on New York Mortgage Foreclosures § 12.05 [1] [a] [1991]).”)

Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 281-82 (N.Y. App. Div. 2011) (“as “nominee,” MERS’s authority was limited to only those powers which were specifically conferred to it and authorized by the lender ( see Black’s Law Dictionary 1076 [8th ed 2004] [defining a nominee as “(a) person designated to act in place of another, (usually) in a very limited way”]). Hence, although the consolidation agreement gave MERS the right to assign the mortgages themselves, it did not specifically give MERS the right to assign the underlying notes, and the assignment of the notes was thus beyond MERS’s authority as nominee or agent of the lendersee Aurora Loan Servs., LLC v Weisblum85 AD3d 95, 108 [2d Dept 2011]; HSBC Bank USA v Squitieri29 Misc 3d 1225[A], 2010 NY Slip Op 52000[U]; LNV Corp. v Madison Real Estate, LLC2010 NY Slip Op 33376[U]; LPP Mtge. Ltd. v Sabine Props., LLC2010 NY Slip Op 32367[U]; Bank of N.Y. v Mulligan, 28 Misc 3d 1226[A], 2010 NY Slip Op 51509[U]; OneWest Bank, F.S.B. v Drayton29 Misc 3d 1021Bank of N.Y. v Alderazi28 Misc 3d 376, 379-380 [the “party who claims to be the agent of another bears the burden of proving the agency relationship by a preponderance of the evidence”]; HSBC Bank USA, NA. v Yeasmin27 Misc 3d 1227[A], 2010 NY Slip Op 50927[U]; HSBC Bank USA, N.A. v Vasquez24 Misc 3d 1239[A], 2009 NY Slip Op 51814[U]; Bank of NY. v Trezza14 Misc 3d 1201[A], 2006 NY Slip Op 52367[U]; LaSalle Bank Nat’l. Assn. v Lamy12 Misc 3d 1191[A], 2006 NY Slip Op 51534[U]; In re Agard, 444 BR 231; but see US Bank N.A. u Flynn, 27 Misc 3d 802).”)

Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 278 (N.Y. App. Div. 2011) (“”Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system” ( Matter of MERSCORP, Inc. v Romaine8 NY3d at 96 [footnotes omitted]).”)

Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 278-79 (N.Y. App. Div. 2011) (“This leaves borrowers and the local county or municipal recording offices unaware of the identity of the true owner of the note, and extinguishes a source of revenue to the localities. According to MERS, any loan registered in its system is “inoculated against future assignments because MERS remains the mortgagee no matter how many times servicing is traded.” Moreover, MERS does not lend money, does not receive payments on promissory notes, and does not service loans by collecting loan payments.”)

Bank of N.Y. v. Silverberg, 86 A.D.3d 274, 279-80 (N.Y. App. Div. 2011) (“Where, as here, the issue of standing is raised by a defendant, a plaintiff must prove its standing in order to be entitled to relief ( see U.S. Bank, N.A. v Collymore68 AD3d 752, 753Wells Fargo Bank Minn., N.A. v Mastropaolo42 AD3d at 242). In a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced ( seeU.S. Bank, NA. v Collymore68 AD3d at 753Countrywide Home Loans, Inc. v Gress68 AD3d 709, 709Wells Fargo Bank, N.A. v Marchione69 AD3d 204, 207-208Mortgage Elec. Registration Sys., Inc. v Coakley41 AD3d 674, 674Federal Nat’l. Mtge. Assn. v Youkelsone303 AD2d 546, 546-547First Trust Nat’l. Assn. v Meisels, 234 AD2d 414).”)

What is Real in “Securitization”?

The first thing to remember about securitization is that it isn’t real. No Investor ever bought any debt, note or mortgage on residential property. That makes all the documents used in foreclosure of “securitized” loans totally fake. And that is why there was a 50 state settlement and hundreds of other settlements with regulators, attorneys general and investors.

What was left out of all those settlements was any means by which illegal foreclosures could be stopped and any credits earned by homeowners or any credit which reduced the amount owed by the homeowners. As it turns out — nothing ever reduces the homeowner’s debt. Not even payment. Not even foreclosure. 

This could only be true if there was no account on any books of account in which the homeowner’s debt was held as  an asset. You cannot reduce what isn’t there. So failure to credit the nonexistent account is somehow treated as a completely legal event. think about it.

There is nothing wrong about hypothecating an asset in service of a financial transaction. As Wall Street has shown us anything could be an asset and therefore subject to a legal transaction. what they didn’t show us is that there was no legal transaction, which means nobody paid money except at the front end. And those who paid — the investors — didn’t buy any debt, note or mortgage.

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If I issue a note to someone who actually did give me money as a loan, and he asks me for collateral, I can conditionally assign my rights to a mortgage I actually own because someone issued me a note and secured it with a mortgage. How “conditional” is the assignment? That depends upon state law and the contents of the assignment.
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And in turn the Payee on the note I issued now has an asset upon which he can borrow. etc. The asset is the receivable from me that he has on his books which got there because he paid out money. So he debited CASH and Credited ACCOUNTS RECEIVABLE. Classic double entry bookkeeping.
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The ONLY question is whether the paperwork is a memorialization of actual events in the real world or if the paperwork is merely an attempt to create fake facts, an illusion that supports the designee of a non creditor to foreclose on property.
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If all the events are real then the law allows it and recognizes it and enforces it. But that enforceability under current law stops at the door of paperwork that does not memorialize an actual financial event in the real world.
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People think that it isn’t so simple. But it is. People say that there would be no foreclosures if I was right. But it is they who are wrong because they don’t understand legal procedure and the banks not only understand it, they were also responsible for writing it.
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So by codifying into law the proposition that the holder of a note is presumed to own the debt until rebutted, they have thus created a vehicle for deceit because judges are not presented with evidence in rebuttal. The truth is that the claimants are not even “holders”. And dig a little deeper they are not even possessors because the original note was destroyed.
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And because judges are sloppy people just like the rest of us, they will often treat a non creditor claiming to possess a note as a holder in due course — thus denying homeowner attempts at discovery. All without any allegation of HDC status or any evidence that the claimant is a party who paid value in good faith without knowledge of the borrower’s defenses.
*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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Why Reformation Makes Sense as a Response to Illegal Claims of Servicing, Collection or Enforcement of Homeowner Mortgage Obligations

In the world of pretend REMICs, there can be no debate that investors who buy “certificates” are unsecured creditors of the investment banks and that investment banks are not legally creditors of homeowners. So why are we allowing investment banks to administer, collect and enforce homeowner obligations?

This has been my point from the beginning in 2006 when I started writing and appearing on TV and Radio. The “Securitization” never happened. Investors became unsecured creditors of the investment bank (IB) not secured creditors of homeowners. In turn the investment bank also wanted to avoid accountability and liability as lender so the IB never accepted any legal document saying that it had paid for and it owned the underlying homeowner obligation.

But for purposes of enforcement through foreclosure the IB designates a non-creditor to initiate foreclosure proceedings. There is no basis in law for this behavior and it is both illegal and inequitable for this conduct to be allowed.

  • The claim that  the action is brought on behalf of  or for the benefit of investors who own certificates is false.
  • The implied assertion that whatever deficiencies exist in the presentation of parties and documents in foreclosures, the granting of a foreclosure will result in payment to a creditor who would otherwise have suffered a loss is also false.
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That leaves nobody to own the debt. Under current law, absent a contract that says otherwise, nobody can administer, collect or enforce a debt without owning it or representing someone who owns it. Since nobody owns it nobody satisfied that condition precedent as set forth in Article 9 §203 UCC.
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In the absence of a creditor the obligation can only be enforced by a designee or nominee that is accepted by the debtor.
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It will take a court decision to decree that since there is no alternative remedy at law, the homeowner is consenting to the designation of a party to enforce who then becomes the lender for purposes of accountability or liability under lending and servicing laws.

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There is no contract that says otherwise  unless and until a court declares it under the rules of reformation, quasi contract and quantum meruit.
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So in all homeowner transactions arising within the scope of claimed securitization, homeowners lost their access to any party who claimed to be a lender or creditor except the originator who was not lending any money and who was in most cases thinly capitalized such that penalties for lending and servicing violations would simply result in bankruptcy and no relief to homeowners. 

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And in the underwriting process, despite the obvious and expressly stated requirements of law no lender was left who had any stake or risk of loss in ensuring the validity of the appraisal or the viability of the loan.
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They might call it a loan transaction, but it wasn’t. It was deceitful process for obtaining the homeowner’s participation in a highly profitable securitization scheme. A scheme where the profits were neither disclosed as to existence or amount and that withheld consideration from the homeowner for his/her participation.
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As such the apparent “loan agreement” was simply a cover and a vehicle for concealment of the true nature of the transaction with the homeowner.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

FREE REVIEW:

If you want to submit your registration form click on the following link and give us as much information as you can. CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us.
In the meanwhile you can order any of the following:
*
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CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
*
Please visit www.lendinglies.com for more information.
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