Just in case you thought it was negligence….

From an avid reader and investigator, the wording below is from an exhibit in litigation that was (of course) dismissed that shows that Wells Fargo managers were specifically instructing their subordinates who talk or correspondent with borrowers on what to say and what not to say. Specifically they were not reveal that Wells Fargo did not have the security instrument or other documents (like the note or any evidence of payment for the debt).

 

So here we have Wells Fargo pursuing collection and foreclosure knowing full well that they don’t have the mortgage or deed of trust. And they know full well that neither Wells Fargo nor anyone in their chain has ever paid for the debt; and that in turn means that nobody in their chain is losing any money.

And THAT in turn means that there is nobody in the chain who is an aggrieved party — someone who has been damaged by the nonpayment by the borrower. So finally that means they should not be pursuing collection much less foreclosure. And logically that means that insistence on doing so means that they are using foreclosure as a ruse to get revenue instead of restitution for an unpaid debt.

So the bottom line is that Wells Fargo has been  pursuing claims and forcing sale of homestead property without ownership or possession or payment for the loan.

One might ask about the color categories in discovery. What does red mean?

Here is what was sent to me.

categories:

Chris Dieter

Dieter, Christopher
Tuesday, April29, 2014 10:47 AM Tran, Duke

Customer Service Representative Customer Specialty Services

Wells Fargo Home Equity I 18700 NW Walker Road #92 MAC P6051-01A
Tel 877·221-1608 I Fax 866-238 6879

Christopher.D!eter!fi!wetlsfargo.com

I Beaverton , OR 97006-2950

Follow up Flagged

Red Category

From: Moreland, caz
Sent: Monday, April21, 201411:54 AM
To: Boyer, Jonathon R.; Dieter, Ouistopher; FIQueroa-jalmes, Eliana; Francis, Jessica; Hager, Kathleen R.; Hughes, stephanie; Lattion, Tammy L.; Mcguire, Mard A.; Palumbo, Janice L; Peebles, Tyler D.; Phosavang, Sammy; Sirnantel, Mlshe M.; Stone, Elijah B.; Tran, Duke
Cc: Ledonne, Peter
Subject: Reminder!

Hi Guys just a reminder,

Please remember when you come across a situation where we have a lost contract, deed, any type of document, really, but especially when It relates to securing a property, we are not to share that with the customer. It’s ok to say that we need to do further research or something similar (and then escalate the situation to a leader), but if we find in the notes {or elsewhere) that we have a property where we don’t have a security document on file, that is not something we would share with the customer under any circumstance.

THEY ARE BACK! “NON-QUALIFIED LOANS” REPLACE THE LABEL OF SUBPRIME — WHY WOULD ANYONE WANT TO INCREASE THEIR RISK?

Before the era of securitization, the only reason for making riskier loans was that the lender could charge a premium for borrowing — a premium that would cover the higher cost associated with defaulting loans.

Now the reason is that the higher the risk, the more the Investment Bank makes and the more the mortgage broker makes on yield spread premiums. And the reason is that investment banks are continuing to literally take apart the loan and sell the parts for multiples of the principal loaned — all without disclosure or reporting to the only two parties who really matter — the investors and the borrowers.

President Obama, acting on advice received from his department of justice, said the behavior was reckless but not illegal. I’m sure he was wrong and motivated by the same raw fear that struck President Bush when he approved the bailout of Wall Street financial service companies most of whom had no loss and made a profit on the bailout.

But only hearing from one side (Wall Street) what did you expect them to do? Bush’s instinct was right. Let the banks fail if that is what is really happening. But then Hank Paulson literally went down on his knees begging for the benefit of the worst culprit on Wall Street, Goldman Sachs who pocketed tens of billions of dollars in profit from the bailout of AIG.

*
As I have pointed out in the past, there are two yield spread premiums only one of which has received the attention of the mainstream press. The first one occurs when a mortgage broker steers a borrower into a loan that carries a higher interest rate. This yield spread premium produces a Higher Value Loan because the borrower actually qualified for a lower interest on the loan. So the premium that they were paying simply increases the net value of the loan, without increasing risk, producing a commission to the mortgage broker from the lender. Sometimes these commissions can be $10,000 or more for each loan.

*
But there is a second yield spread premium that is far greater than the first. The second yield spread premium results from the difference between the amount that is collected from investors for origination and acquisition of loans and the amount that is actually loaned. This yield spread premium can actually be a significant proportion of the loan itself, or even exceed the amount of principal of the loan.
*
The investor does not know that there was an immediate 50% loss in their investment because they are promised a revenue stream by the investment bank based upon income received by the investment bank from loans that were not actually owned by the investment bank except for a few days or weeks. The investor remains clueless.
*
By burying the data on loans that are virtually guaranteed to fail in a pile of other loan data the Investment Bank is able to create an apparent sale of the loan at a premium. Of course you need to believe the labels that the investment banks put on such “trading.”
*
For example, an investment of $1,000 by an investor seeking a return of 5% can result in a $500 yield spread premium that is retained by the Investment Bank— if the Investment Bank loans $500 at 10%. Do the math. Figures don’t lie but liars figure. The investor is seeking $50 per year. The borrower is paying $50 per year. But the Investment Bank only paid $500 for the loan, and then sold all the attributes of the loan, leaving it with no risk of loss. it takes a minute but it’s worth putting pencil to paper. Net revenue has  historically averaged $12,000 for every $1,000 loaned.
*
That’s why pizza delivery boys came to be paid $500,000 per year selling mortgage products to borrowers.
*
Those loans never disappeared but they are now rising in popularity again. It seems that fund managers and regulators have failing memories with respect to the 2008 crash. The success of Wall Street in dominating the conversation about their behavior is largely based on their success and having mainstream media and even Regulators adopt the labels used by Wall Street to describe what they are doing.
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So now we have subprime loans being labeled non-qualifying loans. The ostensible reason for the rise in popularity of such loans is that fund managers are hungry for higher returns. With interest rates historically low, it is difficult to find a rate of return on investment that is satisfactory to investors. And let’s not forget that fund managers often get bonuses or other incentives for subscribing to Investments that they know only look good on the front end. Later, when the investment turns bad, they run for cover.
*
In the end the Playbook is the same. The disclosures are lacking as to exactly what the borrower is signing up for and exactly what the investor is signing up for. The media portrays securitization as the sale of loans to investors. But the loans are not sold to investors. It is the Investment Bank that originates the loan or acquires the loan and then sells off the attributes of the debt in what appear to be complex instruments. In fact though each of those deals amounts to the same thing — the sale of or bet on a promise to pay that is indexed on a loan that is no longer owned by the investment Bank.
*
Just as they did before 2008, the investment banks are gearing up for another wave of foreclosure in order to have a Judicial stamp of approval on an illegal scheme. This of course overlaps with the continuation of the old scheme, under which hundreds of thousands of homes are still lost in foreclosure proceedings that are actually schemes that produce Revenue. in most cases, the proceeds from the sale foreclosed property do not ever go to pay the people who actually Advance the money for purchase or origination of the debt.
*
Does anyone remember me saying in 2006 that what is about to happen will take generations to fix?
*

Capitalism is Not Failing

Citing “capitalism” as a defense no assassin would be set free because he killed for money. Nobody in their right mind would accept a defense of capitalism for someone who robbed, poisoned, shot, stabbed, or stole from a person or company if the defense was “I did it for the money.” That’s not capitalism. It’s robbery, assault, murder or theft.
*
Politicians manipulate us with labels. The goal is not capitalism or money. The goal is a better life. Capitalism has proved better than other systems at achieving prosperity, strength, consistency and quality, but it hasn’t been perfect. Like all systems it needs to be fine tuned continuously to make sure we don’t fall back into a feudal systems where a few mega rich people have all the power and use it to get more power by subjugating the rest of us.
*
Politicians who advocate making capitalism work better for everyone are not just capitalists with conscience. They are the ones who keep revolutions from happening when inequality becomes too great. And they are the the ones who conserve our capital by preventing businesses from tossing off their expenses onto the public who pay the expenses of individual businesses either directly through subsidies or indirectly through tax breaks — i.e., exemption from taxes that increase the tax burden on the rest of us.
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They are leaders preventing the breakdown of a society that while encouraging people to get rich, fails to regulate the conduct of transactions such that gross inequality of income and wealth cause social unrest. When that happens change occurs very quickly and all too often violently.
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There is no “right” path. History shows that humans never get it quit right. There are always continuous swings in societal norms that lead us into prosperity and contentment and then into war and brutal exsanguination of large portions of our population. If humans evolve into a cooperative species instead of a competitive one that might change. But the change might be for the better or for the worse. We don’t know.
As politicians lose traction they resort to labelling other candidates in derogatory ways. If someone wants to increase aid to education, which the public wants, the opponent calls them  elitist to scare off people who would otherwise vote for the educator. If someone wants to include damage to the environment as a potential liability reported by a public company — in an effort to stop passing on welfare payments of taxpayer dollars to such companies — they can be lauded for saving public money but they can also be condemned as a socialist.
I have studied the lives and speeches of all of the potential candidates for president. They are all capitalists. Even Bernie sanders, who calls himself a democratic socialist, is using that label disingenuously. His life thrives on the capitalist infrastructure. He has some considerable wealth compared to most people. And he should. He has earned his place in society the old fashioned way. Vote for him or don’t. But we must acknowledge those who are major influences on the content of our conversation. Trump has earned the same distinction.
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In actuality everyone is actually promising or planning to make capitalism work better to prevent social unrest and a sudden backlash when people get fed up — like watching dozens of private jets take off from an airfield from a vantage point of a refrigerator box called home. I think the election of Trump was the canary in the coal mine. He got elected because enough people were fed up. They were not getting their fair share and they were not getting their voices heard. He gave voice to their anguish.
*
If you think that is the end of it, think again. History shows that such movements are either averted by major structural changes or they result in a generational shift toward cruel retribution against the “establishment” including many people who never considered themselves part of the establishment.
*
It’s true that 1/2 of a capitalistic economy is the premise that humans are greedy and will compete for more money even if they don’t need it.
*
The other half — the defining half — is that we raise capital for new and existing enterprises by allowing companies to sell parts themselves to get money to make more money.
*
Both the business side of profit seeking and the financial side of capital seeking are premised — and always have been — on the belief that market forces will make the needed corrections when people and companies go too far in selling junk or price gouging.
*
Society as a whole eventually makes those corrections by not buying junk and not paying high prices when there are competitors who sell for less. Society will not  advance capital to those who seek money for the sake of getting money and not to do business. That’s not capitalism. That is a gift or more likely fraud.
*
All of that actually does work. Adam Smith was right. Eventually the invisible hand of market forces will correct for inequalities and discrepancies and even criminal behavior. It’s true. And that is why many things that could be regulated by government in a different system of government are not regulated. Regulation of most things is not needed as long as opposing market forces are effectively operating.
*
If opposing market forces are not operating effectively then obviously the invisible hand not only cannot be seen, it cannot be felt and it has no effect. Companies and people are bound to pursue more money as long as society allows them to do so. They might not remember or think about the fact that it is society’s permission that allows them to pursue riches but that is the case. And they of course will resist being taxed on such a privilege, but they will be taxed at whatever rates society imposes.
*
Looking at a society largely based upon upon capitalistic principles like the U.S., the obvious policy is to make sure that effective opposing market forces are operating. What is regulated therefore is free access to information and limiting control over the market by one or more of the players.
*
Cancel disclosure and regulatory control over domination and you no longer have effective opposing market forces. Capitalism fails. It will lead to either a communist regime where labor runs the show, or a fascist regime where management runs the show. Either way it is not capitalism. Both lead to violence and brutality because dominance by one side or the other never lasts for long.
*
Hence the very reason for government — producing and stable, orderly society — is defeated and usually violently replaced by succeeding governments leaning one way or the other until they find the middle ground — competing economic forces on a level playing field. Capitalism is clearly the way to go until we find some manner of cooperation that effectively replaces competition. No such plan is on the horizon.
*
None of this is new. Neither is it new that that  players will use the word “‘capitalism” as a cover for behaviors that try to cancel any opposing force and thereby defeat market forces. If such actors win, then the government must step in to right the ship and put it back on course. That is what Teddy Roosevelt did when he busted the trusts and that is what we must do now to bust the trusts.
*
Market forces cannot correct bad or useless behavior if the opposing forces are not present. It cannot work without that. If labor grows too strong, management must employ strategies to balance the leverage each party has over the other. A labor force that gets all the profit leaves nothing for shareholders and thereby no reason to invest in new or existing companies. That would defeat the entire capitalistic premise.
*
If labor has been successful at controlling the narrative in legislatures and the courts to the point where laws are passed and enforced that prevent management from competing effectively with the overriding power of labor, then government must step in to right the balance, to protect the capitalistic economy from vanishing.
*
A labor force that gets too little of the fruits of their labor also undermines capitalism.  Without getting a fair share of the profits labor cannot afford to buy the products and services offered by their employers. Purchasing drops, profits drop and again shareholders are left with no reason to invest in new or existing companies who are all losing money. That is exactly what has happened in the ;alst 40 years. By making credit more available than payment for a day’s work, the entire economy has shifted toward the banks and away from the the goal of making life better and more endurable for most citizens.
*
If management has been successful at controlling the narrative in legislatures and the courts to the point where laws are passed and enforced that prevent labor from competing effectively with overriding power of management, then government must step in to right the balance, to protect the capitalistic economy from vanishing.
*
Although politics demands that one side call the other innately evil the truth is simply that they are merely competitors, as intended by our society. They are not wrong or right. They are doing what they are supposed to be doing to create opposing market forces so our society will work well.
*
If we want capitalism to work, then we must elect those who will pursue policies that correct imbalances that result from the stifling of opposing market forces.
*
At the moment that means paving the way for more bargaining power for labor, consumers, borrowers and investors. It means regulation of disclosure so that it is meaningful and it enables the party receiving the disclosure to make an informed choice.
*
Inequality and excess have become so extreme that capitalism is endangered by the absence of opposing market forces that could lead to tyranny by management and companies who have enjoyed a long run of success in dominating the narrative in law, politics and even the courts. They have pursued legitimate goals — making money — but they are now doing so at the cost of capitalism, because there is no effective opposing market force to control their behavior or aspirations.
*
Since management  basically has control of the microphone, it takes critical mass of people who understand they are not on a level playing field and who can reject the current imbalance by peaceful voting procedure. Candidates for office will be successfully branded as radical or socialist for promoting anything that changes the current imbalance in which the large majority majority of the public cannot rely on collective bargaining power to oppose the market forces of management.
*
Management is not bad for trying to stifle this opposition. They are simply doing their job. Now it is time for the people to do their job.

Reversing the Paradigm: How Borrowers Might Make Money From Mortgages and Even Foreclosures

Take a step back and then look at this situation from a wider perspective.
*
Understand that the real deal was the issuance of multiple levels of securities made possible by investors putting up money and borrowers signing their name. The investors did not understand they were creating an improper “yield spread premium” between what they were investing and the actual lower amount of what was loaned.
*
The borrowers of course had no idea that their signature would trigger $12 in revenue for every $1 that was loaned.
*
It would be one thing if everything was disclosed to investors and borrowers as required by law. It’s quite another when such disclosures are not only withheld but are also subject to active concealment.
*
Judges have been asking why borrowers should not be required to pay their just debts. The real question is how much of the borrower’s debt should be offset by a fair share of the undisclosed bounty created by his signature, reputation, and collateral. If there is anything left of the debt after the required disgorgement of undisclosed compensation and the royalty that should have been paid to borrowers, then the owner of the debt has a right to payment.
*
The stockbrokers (investment banks) should have been intermediaries but they converted investor money to money owned by the stockbrokers.
*
There are actually names for such situations  that fall under the step transaction doctrine and the single transaction doctrine.
*
The law has always had remedies for such schemes in which the undisclosed revenue is disgorged or a share (royalty) of the undisclosed bounty is awarded to the party who thought they were entering into one small contract but whose signature was the foundation for a much larger scheme. It’s called unjust enrichment or wrongful enrichment.
*
The test for the step transaction doctrine and the single transaction doctrine is simple — would the smaller deal or the larger deal have come into existence without the investors or the borrowers. The answer is clearly no. No investment bank would have loaned money to borrowers without the money from investors. Nor could a loan exist without the agreement of borrowers.
*
Thus investors and borrowers are all entitled to share in the entire venture instead of just the contracts they signed. And the entire venture involved the issuance of multiple levels of securities and “trading profits” that should have been allocated to investors, borrowers or both.
*
The lawyer who understands this and fights for it is likely to turn the entire industry on its head, where it belongs. He or she will also make more money than any other case in history.
*
  • And for those who resist the idea of giving a windfall to the homeowner, consider this:
    • the entire paradigm of lending was changed by the illicit application of the principles of securitization.
    • In the new paradigm, contrary to the requirements of the Truth in Lending Act, lenders (Stockbrokers/investment banks) were (a) not disclosed (b) and not subject to making proper disclosures.
    • TILA puts the responsibility for a good appraisal and viability of the loan on the lender — but the actual lender is no longer present at the closing table and finding liability for violation of lending laws now requires piercing multiple corporate and trust veils — or getting a judgment against a dead originator.
    • But the most important change in paradigm is that the lenders, having no risk of loss in lending, were not incentivized to make good loans and earn revenue through interest payments.
    • Instead they discovered that the worse the loan, the more money they made on the yield spread premium between what investors invested and what was actually loaned out.
    • And the worse the outcome, the more money they made on failure of the loan, the certificates issued in relation to the loan and the derivative instruments and insurance policies.
    • So lenders were incentivized to make bad loans — a key fact that was obviously not revealed to borrowers or investors.
    • How many borrowers would have accepted the loan if they knew that their lender was betting they would fail?
    • How many investors would have accepted the promise of a stockbroker to pay them a stream of cash flow from loans that the stockbroker knew would fail?
    • Why should the investment banks keep all that profit?
    • Why were the investment banks not taxed on the illicit income generated from this scheme?

Tonight! Russ Baldwin and the Art of Pleading! 6pm EDT 3pm PDT

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Neil Garfield, Esq.
Guests Russ Baldwin, Esq, and Bill Paatalo

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

The ghosts and goblins of 2008 are still causing trouble. Some things don’t change and others do. As I have been reporting on my blog, there are several attorneys who have taken the time to research and analyze the pleadings and proof issues involved with self-serving claims of securitization.
*
Everyone thinks they know THE LAW but the evidence is that they don’t know how to use the law. The truth is that foreclosure mills are largely relying upon argument in lieu of both pleading and proof. Russ Baldwin is taking the fun out of that.
*
There is a difference between pleading, proof and argument. The rules are simple but they are violated every day by foreclosure mill lawyers and they get away with it until they are challenged. Now they are challenged.
*
Russ Baldwin, attorney in the state of Oregon, joins tonight with my friend Bill Paatalo to talk about the very exquisite and nuanced pleading he just filed in a case where the Homeowner is seeking ejectment of a person who supposedly bought the property. Russ on one of the lawyers who brought to my attention the issues regarding recoupment, which could avoid statutes of limitation and have the potential of defeating the claim for money entirely and therefore the claim for foreclosure.
*
Here, Baldwin expertly kneecaps the opposing attorneys by challenging them to actually plead the facts that they want the court to assume are true. They don’t want to do that and Russ is now well positioned to make this issue a defining turning point in what is required from attorneys who represent to a court that they represent a named party whom they want the court to presume is the beneficiary under a Deed of trust. As an added measure the csae involves a timely sent notice of rescission under 15 U.S.C. §1635 of the truth in lending act.

Not So Fast! Statute of Limitations Bars Claims for Enforcement of Statutory Duties But Does Not Bar Other Action For Damages Based on That Duty.

Claims under state statutes or Federal statutes have different periods of limitation under which you can file suit.

BUT — if the statutory duty that was breached is part of another claim that is not barred by the statute of limitations then you can survive a motion to dismiss or even an affirmative defense of statute of limitations.

Sound crazy? Actually it isn’t.

I have already discussed claims for damages that are barred by the statute of limitations but he same statute does not bar the same pleading as an affirmative defense because that is NOT, for procedural purposes, a “claim.” Those are generally called Defenses for Recoupment which allow awards of damages for money and even court costs and attorney fees that might ordinarily be barred. Several lawyers have recognized this and some who have been successful have brought it to my attention and even appeared as a guest on the Neil Garfield Show.

Now for the past year, more decisions are coming out predicated on public policy. You cannot raise a claim for violation of HAMP, FDCPA or TILA after the period of limitations has expired but you can use the statutory violation as the basis of a claim under another right of action. So if the state, for example, has a law that allows a private right of action for damages for breach of a duty, that duty might come from a statute that has expired but is still in operation as evidence of the duty of fair dealing and against wrongful enrichment.

see https://www.lexology.com/library/detail.aspx?g=1f747ad6-1d9c-43f8-8c61-431f099cc58b

The bank informed the plaintiffs of the error, provided a check for $15,000, and after mediation, paid the plaintiffs another $25,000. The plaintiffs filed a class action against the bank, asserting claims for violation of the WCPA and unjust enrichment. The bank moved to dismiss the action, arguing, among other things, that the WCPA claim was an “impermissible attempt to enforce the federal Home Affordable Modification Program (HAMP), which creates no private right of action.” The court disagreed with the bank, determining that while the mortgage modification application was filed pursuant to HAMP, the plaintiffs “do not seek to enforce HAMP.” Instead, the plaintiffs argue that the wrongful denial of their application and failure to disclose the calculation error for three years “constitutes unfair or deceptive conduct in violation of the [WCPA].”

State of the Union: Securitization is Running Amok and Taking Us All down With It

  1. The United States is experiencing the worst man-made economic disaster in all of human history — the misuse, abuse and overuse of financial products that are sold to consumers as debt.
  2. Since 2000, more than 20 million people have been wrongfully displaced from their homes by parties invoking foreclosure laws, millions more lost jobs, and millions more suffered loss of economic opportunity, status and income as investment banks now masquerading as commercial banks continue to rake in huge amounts of revenue — sharing none of it with the investors who put up all the money or the borrowers who put up then lives, their signature, their credit reputation and their homes.
  3. On any given day, more than 1,000 families lose their homesteads to a revenue scheme that is falsely presented as restitution of unpaid debt. Starting in 2008 the figure was triple that number. The amount of revenue is close to one quadrillion dollars or about 15 times all the government sponsored money in the world. In 1983 the shadow banking market was zero. It didn’t exist. Now it is estimated by most economists to be in excess of $1,000,000,000,000,000.00.
  4. The loss of homes and jobs and income has caused a long-term surge in stress-related illnesses and death and unwanted lifestyle changes.
  5. Through artful persuasion and advertising Americans have become addicted to debt and led to believe that it is an adequate substitute for wages, as long as the cash is available. The result has been skyrocketing debt that is not viable — i.e., there is no way it can be repaid. But the investment banks that spawned this era found a way to make money from originating and acquiring loans that will fail. They labelled this process “securitization.” Their labels like the rest of their statements and advertising and lobbying on the subject were all false. Borrowers were consistently lulled into a false sense fo security as offers of refinancing their debt came fast and furious.
  6. While the U.S. Congress has enacted many laws to encourage and require responsibility of lenders to comply with clear and concise disclosures of the terms of the loan, and to require lenders to assume responsibility for viability of the loan and appraisals of collateral, the banks have used “securitization” to avoid liability for breaches of statutory duty that were intended and known to the banks who actually used complex financial instruments to bet against the same loans that they are originating and acquiring. The havoc caused by bank practices starting in the 1990’s was not only completely foreseeable, it was foreseen — and the banks profited from it every step of the way.
  7. On average, at a minimum, investment banks took in more than $12 for every dollar of principal loaned under the banner or claims of “securitization” or “sales into the secondary market.”
  8. While most banks offered traditional loans with traditional risks, the investment banks created an environment where they could underbid literally any other offer to loan money because they were producing enough revenue from every loan originated or acquired to even offer compensation to borrowers for executing loan documents.
  9. Hence various types of loans that were “too good to be true” emerged and from a base of 5 variables in institutional loans came a plethoras of loan products peeking at over 450 different types of loans, most of which were not understood even by the PhD analysts employed by the federal reserve.
  10. Consumers who sought to borrow never stood a chance.
  11. And consumers who were not seeking to borrow also never stood a chance. They were enticed to borrow by long strings of broken promises all of which were kept to oral communication and never reduced to writing.
  12. This trend continues with currently secret plans to offer financial incentives to investors and borrowers that are counterintuitive — i.e., borrowers are paid to execute loan documents receiving money or credits against their loan account on a continual basis and investors get a higher rate of return than any loan in any portfolio. Still the banks will make money by converting investor money to investment bank assets. The investment by investors becomes profit to the investment bank. The loan to borrowers is merely a cost of doing business.
  13. Small banks don’t stand a chance either. They can’t pay borrowers to borrow.

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Ocwen is a Sham Designed To Be Thrown Under the Bus by Institutional “Investors”

The bottom line is that Ocwen really serves only one primary purpose: to be a front for investment banks that are still taking everyone to the cleaners. It is effectively owned and operated by the investment banks. If the day comes when the lid on securitization gets blown off, Ocwen will be blamed and will most likely go out of business. And there are other “servicers” in that position.

While it is still a reasonable bet that the investment banks will continue to control the political and judicial narrative, there are many signs that “securitization fail” (see Adam Levitin) is being revealed in the courts. As the number of foreclosures decreases, the increased opportunity for judges to truly consider the scheme in front of them is leading to a rise in judgments for homeowners and a revelation that the “REMIC Trust” is a label without meaning or existence in the real world.

Ocwen should be a verb. If you are “ocwened” you have been served a declaration of default on behalf of a named entity that does not exist and even if it did exist does not own your loan. The declaration is a legal nullity as is any modification that is offered or processed, or any foreclosure or “settlement.”

The investment banks “ocwen” you when a robowitness comes into Court and says Ocwen is a servicer and has conducted an extensive and thorough “audit” of the accounts from another servicer. The unreported liabilities of Ocwen probably exceed reported liabilities 100 times or more.

The economic performance of Ocwen is simply the amount of fees it is paid, which is just enough to keep it alive as long as it is useful to keep it alive. An indemnification from either the “REMIC Trust” or Ocwen for a count based on “lost note” is worse than worthless. It is a lie. A living Lie.

see https://mesaweekly.com/2019/10/26/trending-stock-news/ocwen-financial-corporation-ocn-and-its-rivals-financial-results-comparison/

https://forextv.com/top-news/phh-mortgage-expands-correspondent-lending-after-successful-launch/

And from a reader:

“Ocwen Financial and QuisLex US mortgage provider Ocwen and law company QuisLex have developed a process to analyse long and complex contracts, including mortgage-backed securitisations. The analysis uses artificial intelligence to compare hundreds of contracts and reduce the number of contract clauses that need to go before panel law firms. The time taken for such reviews has halved and the companies have saved more than $10m in outside counsel spending.”

Translation:
Streamlining the fraud

Tonight! Winning Against the US Bank LSF9 Trust 3pm PDT 6pm EDT

Thursdays LIVE! Click in to the WEST COAST Neil Garfield Show

with Charles Marshall and Bill Paatalo

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

Charles Marshall and Bill Paatalo return to break down even further the important win in a Florida case involving a US Bank LSF9 Trust. They also discuss and expand on how Fidelity Title is illegally circumventing recording statutes, re power of attorney rules involved in property title issues.

While We Were Sleeping: Remote Online Notarization is Becoming a Reality in Florida effective 1/1/2020

see https://www.floridabar.org/the-florida-bar-journal/danger-will-robinson-the-new-frontier-of-remote-online-notarization-and-electronic-wills/

I knew this was planned. But frankly I didn’t pay close attention. When the initial plans for electronic signatures were announced 10 years ago, we collectively convinced President Obama that the law as written made it too easy to fabricate documents and then have them be declared facially valid — thus raising legal presumptions about the document and its contents.

Under the new law in Florida and I presume in other states, notarization of documents for recording in county records can be accomplished electronically. The banks have lobbied hard for this and have done a lot of PR to pave the way for this law as reflecting “progress.”

The problem is that this greases the slippery slope on which the banks unleash a torrent of fabricated documents creating legal presumptions of fictitious facts — leaving homeowners to defend nonsensical allegations without the benefit of requiring the claimant to prove actual facts for its prima facie case.

Dean Wigmore — the man whose name is equated with the law of evidence — said that legal presumptions were like bats that fly around and then disappear in the light of actual facts. For nearly 20 years homeowners have been fighting bats in the belfry.

Those that persisted and had the money to contest illegal foreclosures mostly won simply because the legal presumptions were rebutted, leaving the foreclosure mill with no actual facts to present because there were not actual facts that favored their position. None of the foreclosures in which a supposedly REMIC trust was involved ever involved any party who had paid value for the debt as required by state statutes adopting Article 9 § 203 of the Uniform Commercial Code making it a condition precedent to filing a foreclosure.

The assumption or presumption has always been that the named Plaintiff existed, and that it must have paid value for the debt. But they never did.

Most homeowners (96%+) were required to walk away because they lacked the resources of time, money and energy to contest the forced sale of their homestead by actors in a fraudulent scheme for revenue instead of any actor would could obtain restitution of an unpaid debt through a real foreclosure.

The simple answer is that the investors were the only ones who paid value but they never got title to the debt, note, or mortgage. This created a vacuum in which the investment bank pretended to own the debt and then act through surrogates to claim foreclosure without turning over the proceeds of foreclosure to the investors. It was a plain fraudulent revenue scheme.

The Florida legislature has now made it far easier for the banks to continue making money on actions that are simply labelled as foreclosures. This act enables the foreclosure mills and document fabricators to not only speed up the notarization process but also create a gap in accountability for errors, omissions and fraudulent content. It’s all happening online.

Judges are going to be required to treat notarization as presumptively valid when in fact the notary was a robo notary and the online process is fully automated behind the scenes. Thus the Florida legislature has continued and expedited the current process by which investment banks, acting through conduits or surrogates, sell the house, take the money and run. Not a penny is returned to investors who bought “certificates”.

Bank Games: “Attorney in Fact”

The very idea of two huge Bank competitors naming each other as attorney in fact defies common sense — if they were dealing with anything real.

The use of “attorney in fact” is merely a ruse in order to bridge gaps in the facial validity of documents being used in foreclosure. It also is used to create the illusion that the grantor owned the asset over which the power of attorney was granted. In plain language it is simply a paper trail to cover up the fact that there is no money trail. People often forget that these cases are supposed to be about money.

And don’t forget that the entire purpose of using the names of large banks is to give a judge the impression that certain large banks are involved in the loan when in fact they are not.

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

I recently received an email in which Deutsch was supposedly an attorney in fact for Chase and in which investigation revealed that Credit Suisse was in fact the person behind the curtain who was making gargantuan amounts of money off of derivative instruments based upon loans.

*
Typically the banks don’t actually execute the powers of attorney. The execution of the powers of attorney are by a robo signer who works for a servicer (or third party vendor) who poses as an attorney in fact for the bank named as attorney in fact for someone else, usually another bank. It’s what gives an false institutional flavor to the paper trail. The bank’s tolerate the use of their names on such instruments because they don’t actually own the assets and therefore they have no risk — unless somebody sues them for being a co-conspirator in a fraudulent scheme.

*
In discovery — the goal is to show that Deutsch did not have any administrative duties or authority over the active affairs of an existing trust that in fact owned your loan.
*
So it is a two-step process. First you eliminate all attributes of a “trustee” you argue that although it held the title of trustee it was not a trustee under the law and therefore had no right, title or interest in your loan. then you can ask for the actual Financial Arrangements between Deutsch and Credit Suisse (or whoever Credit Suisse was acting through)and you can ask why Deutsch was getting paid at all and what services do each provided in exchange for the payments.
*
But I don’t want to lead you down the rabbit hole. I don’t think you need to prove all that. All you need to prove is that neither Deutsch nor the supposed trust has any evidence of any transaction in which they acquired the debt by payment of value. If you are able to do that, you can then argue that since they did not own the debt, the attempt to foreclose cannot be an attempt to gain restitution for an unpaid debt.
*
If they argue that through securitization they are representing parties who paid value for the debt, you would have two responses.
*
The first is that Article 9 § 203 of the Uniform Commercial Code as adopted by state statutes does not permit a party to appear in a representative capacity for unknown owners of the debt. The second is that it is not enough for them to say that’s what they’re doing, they have to prove it. So you might ask in Discovery if they are appearing on behalf of an owner of the debt who paid value for it, and then ask for the identity of the owner of the debt and the details of any transaction in which the owner of the debt paid value for the debt.

Tonight! What is my defense narrative in foreclosure? 6PM EDT

If you don’t completely understand your defense narrative, neither will the judge! If you don’t have a defense narrative in mind, you don’t have a defense. 

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

The defense narrative is a blueprint for guiding the strategies and tactics of defense of a foreclosure action. It is not necessarily what you say to the judge or write in a pleading or memorandum. It is your theory of the case. In all court cases the litigants are required to make certain assumptions of fact and law to arrive at a conclusion that is satisfactory. If you don’t have a case narrative then your presentation will be chaotic and will not be persuasive, because it doesn’t make any sense.

This is a program intended to expand your awareness of procedural law which is the basis for all judgments and orders entered by any court. The rules of procedure and the laws of evidence, presumptions and inferences are not well understood by most lawyers much less pro se litigants who have no legal training. But procedure is where the homeowner can win — if you understand your own side of the case. That is the defense narrative.

Homeowners win because of one simple fact: the opposition doesn’t have the goods. The opposition doesn’t own the debt. The opposition isn’t seeking to recover on a debt because they have no intention of turning any money over to anyone who actually owns the debt because they paid for it.

Dorian Grey: Loan Agreements have changed without detection by the courts

The normal loan agreement is based upon certain accepted and presumed elements. The borrower desires to borrow money, he/she gets a loan of money and signs documents in favor of the lender setting forth the terms of repayment. The lender, who is responsible under TILA for the viability of the loan, makes the loan with the expectation of being repaid and earning a profit from interest and fees. The borrower relies upon the lender’s desire to be repaid and the lender relies upon the borrower’s intent to repay the loan according to its terms.

 

When the Federal Truth in Lending Act was passed — 5 decades ago — Congress made findings of fact that lenders were overreaching and even cheating consumers in loan transactions. So they passed laws that govern every mortgage loan. Those laws put the burden of viability of the loan on the lender. They also required disclosure of t he actual lender so that the consumer borrower had a choice about who he/she wanted to do business. And most importantly disclosures were required that revealed all compensation, commission, bonus or profit paid to anyone arising from the loan transaction.

 

Securitization as a theory would not have disturbed any of those rules (Reg Z) and laws (TILA). But as practiced it was warped into something unimaginable even to the PhD’s working at the Federal Reserve. By the late stage at which the FED woke up and realized what had been done the ongoing damage to homeowners, communities, cities and states had advanced far beyond anything that most analysts imagined was possible.

 

Unknown to all but a select few in underwriting investment banks, the loan agreement was enlarged to include elements that were unrecognizable even to experts. The borrower was led to believe that the loan agreement had not changed and that he/she was receiving all the necessary disclosures. The borrower was led to believe, by law, that the lender was taking responsibility for the viability and repayment of the loan.

 

But what had changed through the process of labeling parties and documents was that lenders were no longer lending money and even the parties who set up “warehouse lending” agreements were not lending money because they were all funded by investment banks who were using money advanced by investors who bought “certificates” that were, at the time of sale of the certificates, not tied to any list of loans. Thus table funding became the norm. More importantly the actual lenders, the investment banks, would not have entered into the loan agreement without the sales to investors. The signature of the borrower became extremely valuable — a fact unknown to consumer borrowers and which is still largely unknown or not well understood.

 

This scheme resulted in an average of $12 of revenue for every dollar loaned. Such revenue or compensation was unimaginable until the investment banks split the debt from the paperwork. Contrary to the borrower’s understanding of the loan transaction the goal of the investment bank was not to take a risk on nonpayment, but to obtain the borrower’s signature for the sole purpose of creating a paper infrastructure above the signed loan documents. The investment bank has little interest in the viability of the loan and whether it is paid back. They were trading not on the debt but on the collateral.

 

Thus the relationship was different and much larger than the one presented to borrowers and inverted the incentive of the real lenders to make any loan rather than good loans likely to be repaid. The implied or actual contract was that the consumer borrower was contributing their signature , credit reputation and their homestead to a deal in which most of the revenue and profit was continually hidden and concealed contrary to the laws and rules expressed in TILA.

 

The main interest of the investment bank is to preserve the securitization infrastructure which is far larger than the underlying loan, whose existence is kept alive by a variety of ruses solely to preserve that infrastructure. Foreclosures are initiated  for nonpayment not to get payment but to produce revenue. The monetary  proceeds from foreclosure sales is distributed to the investment bank and its affiliates as revenue and not to pay down the debt, the existence of which is maintained as an illusion to justify the existence of the derivative instruments sold that derive their supposed value from various elements of the loan — principal,  interest, collateral etc.

Since the law of contract starts with the intent of the parties it may fairly be said that there was no meeting of the minds because the true nature of the loan transaction was illegally concealed from the consumer/borrower. It is obvious that the borrower was directly intending to enter into one contract while the investment bank, acting indirectly through conduits was entering into another contract that entirely altered the scheme of interest, principal and cash flow.

 

In the end nobody owned the debt who paid value for it —  a key component because only a party who has paid value for the debt may enforce the security instrument (Article 9 §203 UCC). The investors had paid value but never received ownership nor any right to enforce any debt, note or mortgage from consumer/borrowers. In foreclosures all documents had to be fabricated and forged to create the illusion that the paper trail was evidence of the money trail.

 

The investment bank had paid value using investor money but also never received title to the debt, note or mortgage and then the investment bank sold all elements of the debt to multiple third parties who were essentially betting on the outcome of the cash flow or the value of the loans or the value of the “certificates” that served as the ground floor of the derivative infrastructure.

 

This loan agreement viewed from the perspective of both the borrower’s point of view and the lender’s point of view was not a mirror (as required by contract law) but more like a picture of Dorian Grey in which reality masks the corruption of what had been a sacrosanct commercial transaction.

This opens the door to defensive claims of unjust enrichment when the loan agreement was executed and a new claim for unjust enrichment when the foreclosure ends with sale of the homestead property.

Update on MERS

Just assume that everything is a fiction and none of it is real. Then set out to create the inference against the use of key legal presumptions necessary for the foreclosure mill to establish a prima facie case. Those presumptions lead to conclusions that are contrary to facts in the real world.

The answer is always the same. MERS is a data storage  company that has no ownership of the data, or any documents that contain references to data, events, payments, assets or liabilities. The MERS database in intentionally unsecured — anyone can get access with a login and password which are easy to obtain.

The first reason for the looseness of data entry, maintenance and reporting is that the only real purpose for MERS is foreclosure. It is not used by anyone for any other purpose.  The second reason for the looseness of data handling is that even its members and users know that it is not admissible in court. As far as I know, nobody has ever tried to foreclose using data from MERS.

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

GET FREE HELP: Just click here and submit  the confidential, free, no obligation, private REGISTRATION FORM. The key to victory lies in understanding your own case.
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
========================
MERS. it is merely a naked nominee. In some states it is banned. The holder of a mortgage or the holder of a beneficial interest in a deed of trust is required to be the owner of the debt, which is somebody who has paid value for the debt. Check state law.
*
But the assignment from MERS has more problems than that. MERS is basically an agent. The principal is defined as the party who has been labeled as the “lender.”
*
The designation of MERS usually includes “its successors and assigns.”
*
That is the place where the Foreclosure Mills and the banks try to stuff in third parties who have no connection with the loan. Since MERS is merely a naked nominee, the only party that could issue instructions to MERS is the “lender” or its successors and assigns.
*
Why would they do that? Revenue! The foreclosure process in most instances is a revenue scheme and has no relation to any plan, scheme or process by which the result is restitution for an unpaid debt.
*
In most cases, by  the time the foreclosure process is started, the “lender” is dead and nobody has acquired its assets, liabilities or  business. There is no successor. So there have been many cases in which a judge has decided that a document supposedly executed on behalf of MERS by someone on behalf of a company that is labeled as “attorney in fact” is void in the absence of foundation testimony or documents showing that the interest of the “lender” has actually been transferred by way of payment to a transferee.
*
MERS is not a servicer and MERS is not the owner of the debt. It has bare naked legal title to mortgages.
*
There are no successors in interest or assigns with respect to either MERS or the “lender.” Since MERS does not possess and even disclaims any financial interest in the debt, note or mortgage, it may not execute any document of transfer except on behalf of the “lender” on the mortgage deed or deed of trust, or on behalf of a genuine successor to the “lender,” the document signed on behalf of MERS must be void, and not voidable.
*
This is where many attorneys and pro se litigants miss the mark. they fail to parse the words and thus fail to recognize the Achilles heel in any chain of title which is dependent upon the transfer of any interest in any mortgage by or on behalf of MERS.
*
The label of “authorized signer” is a lie on many levels. The signer has no corporate resolution from the Board of Directors, appointment by an actual officer with administrative duties at MERS, nor any employment by MERSas employee or as independent contractor. The person who signs is not paid by MERS.
*
The person who signs is the employee of one of three entities — (a) the foreclosure mill (see David Stern), (b) the party claiming to be an authorized servicer of an entity who also does not own the debt or (c) an outside vendor who specializes in fabricating documents to “clear up” (read that as falsify) the title chain.
*
In most cases there is no power of attorney executed by any employee, officer or director of MERS. But even in the rare instances where such a document has actually been properly executed and dated, the Power of Attorney cannot create any right, title or interest to any debt, note or mortgage.
*
You need to keep their feet to the fire. If you don’t successfully attack such issues the presumption will prevail — i.e., that the chain of title is perfect. If you do attack those issues the presumptions fail and in addition to MERS being naked so is the foreclosure mill and the claimed labeled servicer.
*
As always you will do well if you presume the entire foreclosure is a fake process in which the foreclosure process is weaponized to obtain revenue instead of restitution for an unpaid debt. Just assume that everything is a fiction and none of it is real. Then set out to create the inference against the use of key legal presumptions necessary for the foreclosure mill to establish a prima facie case. Those presumptions lead to conclusions that are contrary to facts in the real world.

Finding a Lawyer to Defend Foreclosure

Most lawyers have dropped out of the game because they don’t know how to win or make money. No loss to homeowners who really want to contest a foreclosure based upon lies and fabricated documents.

Foreclosure experience is NOT necessary. Trial skills and experience conducting trials (especially jury trials) are best. Personal injury lawyers usually possess these skills.

All that is needed is a lawyer who is willing to admit he/she might not know everything and who is open to the possibility that the foreclosure is based upon lies and fabricated/forged documents.

Avoid lawyers who demonstrate a belief that you are getting a free ride. They will never put their heart into it.

Lawyers don’t owe you anything. They are under no obligation to talk with you or do anything for you. Yes they are part of the legal system but they didn’t put you in your current position.

They cannot, under the disciplinary rules, take a case on contingency for two reasons:

(1) the lawyer cannot contract for a contingency that is adverse to the interest of his/her client. The common contingency fee is 40% of the value received. That could be your house unless you have assets that would cover the fee. The lawyer’s interest in the house would be adverse to your own.

(2) The final settlement, verdict or judgment rarely includes an award of damages  although it would be more common if lawyers pursued it. So asking a lawyer to accept the case on contingency is equivalent to asking the lawyer to work for free.

Fees vary from lawyer to lawyer and venue to venue. I generally charge $650 per hour because of nearly 43 years of trial experience, 50 years of investment banking experience, and my status as an expert witness on investment banking and securitization of debt. In New York I would be charging $2,000 per hour, which includes every waking moment I give thought to a case. I don’t believe any lawyer charges less than $200 per hour and if he/she did they would be valuing their services under market which might be what they are worth.

I have mostly retired from the courtroom with the exception of certain legacy cases. But you don’t need me to try your case. Most decent trial lawyers charge between $350-$450 per hour. If a proper affirmative defense or counterclaim is filed within the period of time allowed by the statute of limitations there is a possible award of fees and some lawyers are willing to  take a chance on that as long as part of their fees are paid by the client.

The principal problem in finding a lawyer seems to be that homeowners have just enough knowledge to not make sense to a prospective lawyer and then  get angry that the lawyer was unwilling to go to bat for them. If you walk in with a comprehensive case analysis and recommendations on strategies and tactics then the lawyer does not need to think about rummaging through a bunch of facts and document to find a defense.

Your job as homeowner is to get the lawyer to come to the phone and join a conference call with me or any number of other lawyers who have won foreclosure cases for homeowners. It sells itself if the lawyer sees a payday and a good chance to win — a 65% chance if you are willing to pay him to go the distance.

ONLY A COURT ORDER ISSUED BY A STATE OR FEDERAL COURT CAN STOP A FORECLOSURE SALE OR EVICTION. CONSULT WITH LOCAL COUNSEL ON ALL MATTERS.
Failure to challenge the foreclosure in a court of competent jurisdiction will ordinarily result in a sale of your property.
Nothing contained herein should be considered definitive and you should not use this email as a substitute for getting advice from a lawyer who is licensed to practice law in the jurisdiction in which the property is located.
==========================

Beware of Bank and Foreclosure Mill Labels — That is where the lies start

BEWARE OF LABELS: THE BANKS AND THE FORECLOSURE MILLS GET AWAY WITH MOST OF THEIR DECEIT BY SIMPLY USING SELF SERVING LABELS.
*
For example, by labelling something as a servicer advance it presumptively means that it was an advance by a servicer that is die back to the servicer because it was advanced on behalf of the owners and holders of certificates issued in the name of a labelled trust using a labelled trustee as its putative administrator.
*
By reading the Prospectus and Trust Agreement you find that these labels
are used to create illusions.
*
The labelled servicer to whom the money is paid has never serviced anything. The money was paid from a pool of money derived entirely from advances by the investors who bought certificates. Thus the receipt of money by the servicer is pure revenue under GAAP but treated as return of loan for tax purposes.
*
So for example if the loan was $300,000,  and the property is worth $180,000 the Master Servicer continues to make payments to the investors even though no payments are made by the borrower up to the point of around $165,000, which is when they foreclose and claim all the proceeds as servicer advances. This is why ten year or twelve year foreclosures work to the benefit of the labelled “Master Servicer” who is actually the lead (bookrunner) investment bank.
*
The labelled certificates convey no right, title or interest to the debt, note or mortgage and therefore are not “certificates” but only unsecured promises masquerading as bonds or debentures with no equity interest. They are called “mortgage-backed” but they are not backed by mortgages.
*
The trust owns nothing and therefore with nothing entrusted to the trustee on behalf of named beneficiaries there is no trust.
*
The labelled trustee has no powers of administration over the active affairs of a trust. Therefore it is not a trustee which is why they never appear in court.
*
The sole beneficiary of the trust, which is a sham conduit for the investment bank, is the investment bank that sold labeled certificates to investors whose money was put in suspense and entirely controlled and owned by the investment bank.
*
The labelled “Master Servicer” is the investment bank.
*
The devil is in the details. Ask the right questions in discovery.
*
An assignment of mortgage (or beneficial interest under a deed of trust) without a purchase of the debt is a legal nullity. The assignment is nothing unless and until the party claiming ownership of the mortgage has paid value for it. Calling it an assignment of mortgage does not make it an assignment of mortgage.
*
An assignment of mortgage from a party who had paid value for the debt at the time of the assignment, is a legal nullity, and continues to be a nullity until payment of value for the debt is tendered and received.Calling it an assignment of mortgage does not make it an assignment of mortgage.
*
Similarly, an endorsement of a note by a party who neither owns the debt nor represents a party who owns the debt and ahs paid for it is also a legal nullity. Calling it a note endorsement does not make it anote endorsement.
*
Calling a separate piece of paper with no foundation an allonge does not make it an allonge. An allonge is part of the note firmly affixed ior written directly on the note.
*
The most frequent successful objection at trial is lack of foundation.

What to say about your TILA Rescission

see https://livinglies.me/2019/10/11/update-and-review-of-tila-rescission-15-u-s-c-%c2%a71635-beach-v-great-western-fla-and-beach-v-ocwen-federal/

I think you need to emphasize more that rescission is an event that takes place upon the mailing of the notice of rescission. The error of the lower courts all stems from the fact that they treat TILA rescission as a claim. They either do it directly in direct conflict with the Jesinoski decision or they are doing it indirectly by characterizing the position of the homeowner as pressing a claim under the Truth in Lending Act. Neither one is true.

If you are pressing a claim for a remedy under TILA and more than one year has passed you are most likely barred by a one year statute of limitations on TILA claims. But you don’t need TILA after you sent the notice of TILA rescission within 3 years from the date of the loan closing.

This is where the courts, who hate TILA and are revolted by TILA rescission, twist the facts and the law if you let them. The key is to be clear on what you are doing and what you are not doing.

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

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

The homeowners claim is based on title which was affected on the day that rescission became effective.

TITLE CHANGED THAT DAY AS A MATTER OF LAW.

The remedy is under State statutes and common law for ejectment, eviction, and a declaration of rights, together with mandatory and prohibitive injunctive relief, and possibly damages for trespass. None of those arise from ANY remedy set forth in the truth in Lending Act. The matter is in controversy solely because the creditor or the alleged representative of the Creditor failed to comply with the Statute by filing a satisfaction of mortgage.

*
The error of the lower courts is in misconstruing the claim of the homeowner. Judges do so intentionally and happily since they do not approve of a homeowner canceling a loan agreement with the stroke of a pen — but that is exactly how the law reads and for good reason. It was either that or create a huge Federal Bureaucracy to review every closing — because consumers were clearly helpless compared with the sophistication of financial institutions and non-bank lenders.
*
The findings of fact adopted by Congress and the President when TILA was discussed and passed in the 1960’s was that mortgage closing documents are impossible for the average borrower to read, much less understand without degrees in law and finance.
*
So Congress passed specific laws concerning specific disclosures in plain language that the borrower could understand without being deceived or mislead. Specifically the true facts about viability of the loan — which is the burden of the lender, not the borrower —must be disclosed in detail.
*
In addition ALL compensation of every kind arising from the borrower’s signature on the loan documents must be disclosed. But in fact compensation was NEVER fully disclosed where securitization was in play. Thus TILA rescission was almost always justified.
*
If those requirements were not met to the letter, the parties acting as lenders were subject to draconian penalties —
  • first, loss of interest and fees
  • second loss of the note,
  • third loss of the mortgage encumbrance, and
  • fourth, loss of the entire debt.
*
Where notice of TILA rescission was sent years earlier than the date that foreclosure was allegedly started, the simple defense is that foreclosure impossible because the mortgage does not exist because, as a matter of law, it was canceled and rendered a legal nullity (void) the day that the notice of TILA Rescission was sent. Since the foreclosure was a legal nullity it can always be attacked for lack of jurisdiction which cannot be waived.
*
In a Quiet Title Action or Petition for Declaratory, Injunctive and Supplemental Relief, the homeowner is not seeking enforcement of the statutory duty under TILA, although it may be possible to do so. Homeowner is seeking to prevent and prohibit anyone from asserting any rights in connection with the property arising from a mortgage that exists in the title record solely because one or more parties violated the statutory duties set forth in the rescission statute 15 U.S.C. §1635. As the owner of the property in fee simple absolute the homeowner obviously has standing to protect their title interest and the quiet enjoyment of the property.
*
But the courts insist on treating the mere mention of a prior notice of rescission as a claim, then applying the three year limitation they conclude that the homeowner has no standing to raise it. Somehow lawyers are not following simple logic. It’s just another example of how the lower courts are twisting the law. The decisions in the Beach and Jesinoski cases make it clear what happens in TILA Rescission. The ONLY way that a court could arrive at the erroneous conclusion that the homeowner lacked standing is by characterizing their deed as a claim.
*
Such a characterization is not just error. It is tomfoolery. If such decisions are not reversed it paves the way for a day when nobody’s title is clear and marketable because a warranty deed in fee simple absolute could then be regarded as a claim that somehow had to be renewed periodically. No such law exists. No such law can exist in an orderly society.
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PRACTICE NOTE:
Although there are various statutes of limitation arising from claims for remedies under TILA, RESPA, FUDCPA, and other statutes, practitioners are directed to strategize based upon affirmative defenses using the same facts and the same violations. In most, if not all states, such defenses are not barred by any statute of limitations, since they are not technically claims for which the homeowner has filed suit.
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Thus you might not be able to claim damages but you can claim an amount that should offset the monetary claim against the homeowner. Between statutory damages,, attorney fees, and common law claims for consequential and even punitive damages there may be enough to entirely offset the total claim against the homeowner, thus negating the foreclosure action.
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In filing an action for quiet title or my preference, a Petition for Declaratory, Injunctive and Supplemental Relief, you should name all known parties who are sued because they have or could claim some interest in the property.
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These would include all servicers, past and present, as well as the original named lender, the aggregator (like Countrywide), the Depositor, the underwriter, the seller, the named trustee and the trust.
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The allegation should be simple and direct: none of these parties have any interest in the borrower’s payment or nonpayment of the debt because none of them have paid value for the debt and therefore none of them has ever received title to the mortgage. (A transfer of mortgage without the debt is a legal nullity).
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If the void foreclosure has been completed on paper, you need to undo it on paper with a court order arising from your client’s ownership of the property unencumbered by the mortgage or deed of trust.
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If eviction or writ of possession has resulted from the homeowner being dispossessed of the property, then various claims for damages from trespass, slander of title, etc. might apply arising from the completion of the foreclosure and not from the initial loan closing. Under the right circumstances you might even allege and prove punitive damages.
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A good case for punitive damages can be made if you can show or infer that in prior foreclosures, as well as the one at Bar, the claimant was not the recipient of title or the proceeds of sale, both of which were held for the investment bank who   sold certificates to investors. Hence, the proceeds of foreclosure were never meant to pay down the debt but instead result in revenue by defrauding the court and the borrower.
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Update and Review of TILA Rescission 15 U.S.C. §1635 Beach v Great Western (FLA) and Beach v Ocwen Federal

Having received numerous inquiries regarding Rescission under the Federal Truth in Lending Act, I’ve decided to provide a short guide. in this article I will not examine types of loans that are subject to rescission. The purpose of the article is to explain how and when TILA rescission can be used.

see BEACH v. GREAT WESTERN BANK | FindLaw

  1. Under 15 U.S.C. § 1635 certain Borrowers have a right to cancel the loan transaction, rescind the note, the mortgage, and all payments made under the loan contract. Upon sending the notice of rescission, the rescission becomes effective by operation of law. That means that title has changed and nobody can reverse it except by a new agreement between the parties or a court order resulting from a timely action brought by the Creditor who no longer relies on the void note and the void mortgage to assert standing, and who contests the underlying assumption that the disclosures at the loan closing were inadequate.

  2. To my knowledge no such action has ever been brought for one simple reason, to wit: a creditor who files such an action would need to allege that “Plaintiff/Petitioner is the owner of the debt and has paid value for the debt.” And “Plaintiff/Petitioner has suffered financial injury through nonpayment of the debt by the borrower.” Based upon my investigations and analysis, no such creditor exists and no such action could ever have been filed which is why no such action has ever been filed.

  3. In the Jesinoski v Countrywide case the unanimous Supreme Court of the United States declared that the rescission was effective upon mailing. The effect is cancellation of loan contract and rescission of the note, mortgage (or deed of  Trust) and like all rescissions, return of all monies paid by the borrower.

  4. The statute replaces the loan contract with statutory obligations.

  5. The borrower is still required to repay the debt. But the Creditor has three statutory duties that must be satisfied before the Creditor can make a claim for the debt. The claim to the debt arises under the Federal Truth in Lending Statute. But it is barred by the statute of limitations in which a claim for damages arising out of the Truth in Lending Act must be brought within one year.

  6. The borrower is similarly barred from pressing a claim for statutory damages after 1 year. If the borrower has sent a notice of rescission and then fails to file suit for return of all payments made within the statutory period, then that claim is barred by the statute of limitations. However, the effect of the rescission remains, to wit: the mortgage and note are canceled by operation of law. This means that the borrower now has both fee simple absolute title to his property without the encumbrance and is not subject to the terms and conditions of the promissory note.

  7. An action by the homeowner for damages or injunctive relief based upon a valid notice of rescission having been sent within the three-year period of expiration set forth in the statute is not barred by the TILA statute of limitations because it does not arise from any claim set forth in the statue.

    It is a relatively simple claim based upon fee simple title which has been slandered by a party who is asserting rights pursuant to a note and mortgage that no longer exist. The statute of limitations on such claims are based on state statutes. but there is no statute of limitations on ownership of property. Since the rescission was effective, title changed by operation of law. therefore there are no limitations on fee simple ownership and the right to peaceful enjoyment of the premises.

    A petition to cancel instruments like the mortgage and note would be based not on rights under TILA but from arising from state statutes and common law — an event occurred in which the mortgage was cancelled and rendered void; it is still technically in the title record even though it is now void. Thus the court should cancel and perhaps even expunge the the instrument from the title record.

  8. The only possible exception to this could be the statute of limitations on adverse possession. If any party has taken over possession of part or all of the property and held it for the statutory period while claiming title then after the expiration of the adverse possession limitation statute, that party might indeed have a claim to title. But without physical adverse possession that has all the elements, adverse possession does not arise.

  9. In addition, the right to statutory damages set forth in the rescission statute may still be pursued in an affirmative defense or counterclaim for recoupment. recoupment is not considered to be a claim so much as an offset. (See Beach case). It is limited to the amount demanded by the party claiming the right to foreclosure.

  10. But invocation of the claim in recoupment might be inconsistent with a defense arising from a homeowners fee simple title. Assuming that the Creditor has not taken any action to comply with the three statutory duties, and that more than one year has expired since the sending of the notice of rescission, the Creditor no longer has a claim for the debt  — at least not one that isn’t barred by the TILA statute of limitations. alternative pleading might allow both.

  11. The two controlling cases from the Supreme Court of the United States are Jesinoski and Beach.

Note that in the Beach case the claimant was switched. This is another indication of how the banks shift around the claim to be sure that they get maximum benefit from foreclosure or minimize the effect of a negative decision. It is emblematic of the fact that there is no creditor who owns the debt by reason of having paid for it.

 

Tonight! How Foreclosure Defense Attorneys are Winning Cases: Case Study in Florida 6PM EDT 3PM PDT — with a West Coast Perspective

Thursdays LIVE! Click in to the WEST COAST Neil Garfield Show

with Charles Marshall and Bill Paatalo

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

Tonight we discuss the strategies and reasons for homeowners to win foreclosure cases.

Specifically we look at yet another case where a homeowner did win, hands down game over.

see https://livinglies.me/2019/10/09/patrick-giunta-esq-scores-another-homeowner-win-in-south-florida-v-us-bank-trustee-lsf9-master-participation-trust-william-paatalo-expert-testifies/

see also https://www.theindianalawyer.com/articles/reversal-bank-loses-in-lengthy-foreclosure-battle

see also https://southfloridalawblog.com/bank-america-illegal-foreclosure-six-million-settlement/

There is one simple fact about the statistics regarding the likelihood of success in contesting foreclosures. The statistics used by the banks and the courts and the media are all based upon all foreclosures 96% of which are completely uncontested. They are uncontested because homeowners don’t understand their rights and they don’t understand that they don’t deserve that treatment morally, ethically or legally.

When you break down the 4% (contested cases) you find that 60% of homeowners give up when they are presented with virtually ANY modification no matter how stupid and in signing that document they create more obstacles to contesting the foreclosure in the future.

These homeowners, usually unrepresented or poorly represented, don’t realize that by signing the modification document they have in fact created a new loan, stiffing the investors and creating revenue for the servicer and the investment bank that started the securitization scheme. The don’t realize because they have never been given the facts.

So that leaves 2.4% of all foreclosures. So far the “win” rate for the banks is 97.6%.

Of the remaining 2.4% about half settle with favorable results from the perspective of the homeowner. They are still stiffing the investors without knowing it and they are giving up or releasing a number of rights that could include damages for filing a false foreclosure claim.

As for stiffing the investors I’ll summarize by saying that in each foreclosure or modification or settlement the result is revenue distributed to the servicer, the Master Servicer (lead underwriting investment bank) and various other parties.

If it is foreclosure, the proceeds of sale to a third party don’t go to investors who put up the money but never got title to the debt, note or mortgage. Instead the proceeds are claimed as “servicer advances” or at the last minute when nobody is looking the mortgage loan schedule is amended such that the foreclosed loan is taken out and a new, possibly performing loan is put in. That’s when you see an assignment of the credit bid to a conduit for the investment bank.

Either way the entire proceeds come to the investment bank and affiliates as pure revenue.

The other half of the 2.4% go to trial. Of those only 50% are seriously contested, by aggressive discovery, objections at trial and good cross examinations. So the banks win 1.2% of those boosting their winning “statistics” from 97.6% to 98.8% — all due to improper defenses, procedures and mistakes plus a fair amount of court bias.

Of the remaining 1.2% that are seriously contested the homeowners win 65% of those cases. So that means the banks win another .42% bringing their total WIN statistics to 99.3% and the total WIN statistics for homeowners as either .7% if you just include the judgments for the homeowners or 1.9% if you include favorable settlements.

If you now re-read this post you will see that the figures could be vastly different if all foreclosures were seriously contested and that court bias would be bending the other way if the foreclosures were strongly contested. In plain language the homeowners could be winning at least 68% of foreclosure cases and the resulting softening of court bias could easily raise that to 95%.

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