Things that Should be Added to Affidavits and Expert Opinion Letters, Reports, and Declarations

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For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s comment: First let me emphasize the need to consult with competent legal counsel who is licensed in the jurisdiction in which your property is located. Second, let me emphasize that unless you have an “expert” who actually has credentials including experience, academic degrees, authorship of published books etc., the evidence from the expert might be allowed but it will most certainly be ignored.

In answering an email recently is edited some passages that I realized should probably be available for everyone to see whether they are lawyers, auditors, analysts, paralegals or homeowners.

Also as a caveat this field is evolving every time the banks move the goal posts. But for now, I think the wording below, if properly defended by someone who is coached well as an expert witness, will get traction more often than not at the preliminary stages of motion practice. And remember this wording is only an abstract from a much larger document:

“We could find no evidence supplied by the “lender” that shows that a payment or value of any kind was transferred to anyone in connection with the funding or purchase of the subject loan. In my experience normal practice in the industry would be to provide such information along with the documentation, or the documentation would be considered incomplete and would not be accepted by a title company or a bank that was refinancing a property. In those case where the proof of payment is excluded it is standard practice in the industry to supply same upon request. Such request was made and the foreclosing parties have ignored the request. This indicates, in my opinion, that the loan was purchased or funded by third parties in an table funded loan which is predatory (illegal) per se according to the the Federal Truth in Lending Act and Reg Z).

The significance of the above statement is that (a) the mortgage or deed of trust supposedly collateralizing the property was never perfected and is therefore unenforceable and (b) that none of the foreclosing parties is a
“creditor” within the meaning of applicable state statutes and therefore cannot submit a credit bid in lieu of cash, should the property be subject to an auction. But it would also indicate that any Notices of Default, Notices of Sale, substitutions of parties or trustees would be ineffective (the equivalent of wild deeds out of the chain of title) since the foreclosing parties could not be considered creditors, beneficiaries, assignees or lenders.

The facts in this case strongly indicate that the wrong payee was named on the note, the wrong “lender” was named on the note and mortgage, and the terms of repayment on the note were incomplete in that they failed to refer to the Master Servicer, and the indenture to the mortgage bonds that were sold to raise the capital to fun mortgages and fees — fees that were both disclosed and undisclosed. Undisclosed fees are required to be be credited or repaid to the borrower. Those fees include any sort of compensation to any party, disclosed or not, whose compensation or profit resulted from the apparent closing of the loan.

Hence the amount due or claimed by the collection letters and notices are are incorrect, if there were such fees and compensation. Based upon common practices in the industry such fees that would be ordinarily generated by transaction identical to the subject loan would include a tier 2 yield spread premium, and other transfer or servicing fees that did not appear on the borrowers disclosure statements nor on the HUD 1 settlement statement.

In addition, the accounting provided to the borrower and my office is incomplete in that the only accounting provided relates to direct transactions between the subservicer and the borrower and does not include the transactions between the Master Servicer  and all sources of payments or fees from the co-obligors including not bot limited to the subservicer, insurance payments, guarantees, proceeds from hedge instruments designed to protect the investors but yet allocated to the investor, and Federal bailouts. These payments received by the investment bank or its affiliates acting as Master Servicer (agent for the principal REMIC or its investors who purchased mortgage bonds) would most likely have occurred in this case following current industry practices.

The effect of receipt of money by agents of the REMIC or investors is to reduce the balance owed to the investor. If the payment was made to purchase the loan or bond then the purchaser would be the correct party to demand collection. If the payment was made without purchase of the subject loan or bond, then the payor would possibly have an action in contribution but it is doubtful that the action in contribution would be secured under the most favorable of circumstances, thus eliminating foreclosure as an option in collection. And if the payment was made with express waiver of subrogation, then the balance due to the REMIC or investor is reduced without any right of claim against the borrower, thus extinguishing the obligation, note and mortgage — to the extent of the payment.

As a general rule the banking industry has reported such fees, payments, profits and compensation as their own and has neither paid or disclosed the receipt of money to the investors who as a group constitute the principal in a principal agent relationship.

Hence, the obligation due on the books of the REMIC or investors remains unchanged despite the receipt of actual monetary payments by their agent. This in turn requires an accounting from the Master Servicer, Investment Banker and affiliates as to the nature of payments received and a determination by the court as to how those payments should be allocated.

The significance is again that the amount demanded might be far in excess of the actual debt due to the real creditors, thus nullifying the effect of collection procedures, notices and other actions undertaken by the putative “lender” who, as aforesaid, is not a creditor. The effect of this practice is to collect more than once on the same debt, obligation, note and or mortgage.

Discovery Issues Revealed: PRINCIPAL REDUCTION IS A RIGHT NOT A GIFT – CA Class Action V BOA on TARP funds

REGISTER NOW FOR DISCOVERY AND MOTION PRACTICE WORKSHOP MAY 23-24

PRINCIPAL REDUCTION IS A RIGHT NOT A GIFT. IF THE OBLIGATION HAS BEEN PAID BY THIRD PARTIES, THEN THE OBLIGATION HAS ALREADY BEEN REDUCED. THE ONLY FUNCTION REMAINING IS TO DO THE ACCOUNTING.

There should be no doubt in your mind now that virtually none of the foreclosures processed, initiated or threatened so far have been anything other than wrong. The payments from third parties clearly reduced the principal due, might be allocable to payments that were due (thus eliminating even the delinquency status) and thus eviscerates the amount demanded by the notice of delinquency or notice of default.

Thus in addition to the fact that the wrong party is pursuing foreclosure, they are seeking to enforce an obligation that does not exist.”

Editor’s Note: This is what we cover in the upcoming workshop. Connect the dots. Recent events point out, perhaps better than I have so far, why you should press your demands for discovery. In particular identification of the creditor, the recipients of third party payments, and accounting for ALL financial transactions that refer to or are allocable to a specific pool in which your specific loan is claimed to have been pledged or transferred for sale to investors in pieces.

This lawsuit seeks to force BOA to allocate TARP funds to the pools that were referenced when TARP funds were paid. In turn, they want the money allocated to individual loans in those pools on a pro rata basis. It is simple. You can’t pick up one end of the stick without picking up the other end too.

The loans were packaged into pools that were then “processed” into multiple SPV pools, shares of which were sold to investors. Those shares “derived” their value from the loans. TARP paid 100 cents on the dollar for those shares. Thus the TARP payments were received based upon an allocation that “derived” its value from the loans. The only possible conclusion is to allocate the funds to the loans.

But that is only part of the story. TARP, TALF and other deals on a list that included insurance, and credit default swaps (synthetic derivatives) also made such payments. Those should also be allocated to the loans. Instead, BOA wants to keep the payments without applying the payments to the loans. In simple terms they their TARP and then still be able to keep eating, even though the “cake” has been paid off (consumed) by third party payments.

Now that the Goldman Sachs SEC lawsuit has been revealed, I can point out that there are other undisclosed fees, profits, and advances made that are being retained by the intermediaries in the securitization and servicing chains that should also be allocated to the loans, some of which are ALSO (as previously mentioned in recent articles posted here) subject to claims from the SEC on behalf of the investors who went “long” (i.e., who advanced money and bought these derivative shares) based upon outright lies, deception and an interstate and intercontinental scheme of fraud.

In plain language, the significance of this accounting is that if you get it, you will have proof beyond any doubt that the notice of default and notice of sale, the foreclosure suit and the demands from the servicer were all at best premature and more likely fraudulent in that they KNEW they had received payments that had paid all or part of the borrower’s obligation and which should have been allocated to the benefit of the homeowner.

There should be no doubt in your mind now that virtually none of the foreclosures processed, initiated or threatened so far have been anything other than wrong. The payments from third parties clearly reduced the principal due, might be allocable to payments that were due (thus eliminating even the delinquency status) and thus eviscerates the amount demanded by the notice of delinquency or notice of default.

Thus in addition to the fact that the wrong party is pursuing foreclosure, they are seeking to enforce an obligation that does not exist. This is a breach of the terms of the obligation as well as the pooling and service agreement.

INVESTORS TAKE NOTE: IF THE FUNDS HAD BEEN PROPERLY ALLOCATED THE LOANS WOULD STILL BE CLASSIFIED AS PERFORMING AND THE VALUE OF YOUR INVESTMENT WAS MUCH HIGHER THAN REPORTED BY THE INVESTMENT BANK. YOU TOOK A LOSS WHILE THE INVESTMENT BANK TOOK THE MONEY. THE FORECLOSURES THAT FURTHER REDUCED THE VALUE OF THE COLLATERAL WERE ILLUSORY SCHEMES CONCOCTED TO DEFLECT YOUR ATTENTION FROM THE FLOW OF FUNDS. THUS YOU TOO WERE SCREWED OVER MULTIPLE TIMES. JOINING WITH THE BORROWERS, YOU CAN RECOVER MORE OF YOUR INVESTMENT AND THEY CAN RECOVER THEIR EQUITY OR AT LEAST THE RIGHTS TO THEIR HOME.

On Thu, Apr 15, 2010 at 9:35 PM, sal danna <saldanna@gmail.com> wrote:

California homeowners file class action suit against Bank of America for withholding TARP funds

Thu, 2010-04-08 11:43 — NationalMortgag…

California homeowners have filed a class action lawsuit against Bank of America claiming the lending giant is intentionally withholding government funds intended to save homeowners from foreclosure, announced the firm of Hagens Berman Sobol Shapiro. The case, filed in United States District Court in Northern California, claims that Bank of America systematically slows or thwarts California homeowners’ access to Troubled Asset Relief Program (TARP) funds by ignoring homeowners’ requests to make reasonable mortgage adjustments or other alternative solutions that would prevent homes from being foreclosed.

“We intend to show that Bank of America is acting contrary to the intent and spirit of the TARP program, and is doing so out of financial self interest,” said Steve Berman, managing partner of Hagens Berman Sobol Shapiro.

Bank of America accepted $25 billion in government bailout money financed by taxpayer dollars earmarked to help struggling homeowners avoid foreclosure. One in eight mortgages in the United State is currently in foreclosure or default. Bank of America, like other TARP-funded financial institutions, is obligated to offer alternatives to foreclosure and permanently reduce mortgage payments for eligible borrowers struck by financial hardship but, according to the lawsuits, hasn’t lived up to its obligation.

According to the U.S. Treasury Department, Bank of America services more than one million mortgages that qualify for financial relief, but have granted only 12,761 of them permanent modification. Furthermore, California has one of the highest foreclosure rates in the nation for 2009 with 632,573 properties currently pending foreclosure, according to the California lawsuit.

“We contend that Bank of America has made an affirmative decision to slow the loan modification process for reasons that are solely in the bank’s financial interests,” Berman said.

The complaints note that part of Bank of America’s income is based on loans it services for other investors, fees that will drop as loan modifications are approved. The complaints also note that Bank of America would need to repurchase loans it services but has sold to other investors before it could make modifications, a cumbersome process. According to the TARP regulations, banks must gather information from the homeowner, and offer a revised three-month payment plan for the borrower. If the homeowner makes all three payments under the trial plan, and provides the necessary documentation, the lender must offer a permanent modification.

Named plaintiffs and California residents Suzanne and Greg Bayramian were forced to foreclose their home after several failed attempts to make new arrangements with Bank of America that would reduce their monthly loan payments. According to the California complaint, Bank of America deferred Bayramian’s mortgage payments for three months but failed to tell them that they would not qualify for a loan modification until 12 consecutive payments. Months later, Bank of America came back to the Bayramian family and said would arrange for a loan modification under the TARP home loan program but never followed through. The bank also refused to cooperate to a short-sale agreement saying they would go after Bayramian for the outstanding amount.

“Bank of America came up with every excuse to defer the Bayramian family from a home loan modification which forced them into foreclosure,” said Berman. “And we know from our investigation this isn’t an isolated incident.”

The lawsuits charge that Bank of America intentionally postpones homeowners’ requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by taxpayer dollars financing TARP-funds and also collects higher fees and interest rates associated with stressed home loans.

For more information, visit www.hbsslaw.com.

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