The danger of submitting a hardship letter. See a lawyer!!!

It is strongly advised by most attorneys that when submitting any statement or reply to any company posing as a mortgage servicer or lender that where it is appropropriate to do so you should state that you are making the statement for purposes of compromise and settlement only and not for use in court, trial or any other legal proceeding.

Otherwise what you say can and no doubt will be used against you in a court of law as admissions against interest which tend to be given great weight in any contested proceeding or trial.

Don’t admit, acknowledge or assume anything unless you absolutely know something is a fact. Even then, admitting it or acknowledging it without protecting yourself could lead to your statement being used against you.

For example, “Yes I stopped paying because ….”. Yes you were paying and yes you stopped BUT….

Such a statement implies that the receiving party was entitled to collect money from you in the first place. Do you really know this to be a fact? Are an expert is the securitization of debt or the sale of loans into the secondary market? Aren’t you relying on representations made to you by the same party who is demanding payment? 


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Submitting a hardship statement will almost certainly lead you to make damaging admissions. It’s like unprotected sex — a lot of things could go wrong. The only way to protect yourself against that is by either not submitting anything or by submitting a statement under cover of “for Settlement and Compromise Only.”

In addition, it is highly unlikely that your hardship statement will result in any remedy or relief since the great majority of such requests are denied — by parties who had no right to even receive them, much less process them, in the first place. Statements like “investor rejected” are pure fabrications, lies. No investor is ever contacted nor do they care because they are not counting on your payment. Investors are counting on the promise of a stockbroker (investment bank) to make the payments, which they continue to receive even if you stop paying.

Stop thinking you know what is going on. Stop believing anything that is said or written to you. By suspending your belief you are far more likely to gain traction than by admitting that anyone has a right to collect, process or enforce any loans. they probably don’t have any financial interest nor any rights. But they will say otherwise because if they are successful whatever they get will be used as revenue and not to pay down your debt.

Any modification or other agreement to which you affix your signature will undoubtedly contain representations or implied representations that are false. Thus when you sign the agreement and acknowledge its contents you are admitting that the representations are true even though they are false.

So for example if you execute an agreement with Ocwen you are either directly or indirectly agreeing that it is Ocwen Loan Servicing with whom you are doing business despite the fact that they are not a lender and never paid a dime for your loan. Your signature is at least a tacit admission that either Ocwen will be treated as a lender or as an authorized representative of the owner of the debt who paid value for your debt. In fact, most of the time they have no such ownership or authorization.


The solicitation of a hardship statement is a ruse. It gets you to say you made payments, admit that you owe them, admit that the payments are owed to the company receiving the hardship statement, admit that you are in breach, admit that you are in default, admitting that the receiving company has the authority to grant or deny or loan modification request. In most cases none of those things are true. But they become true if you admit them.
But one of the objectives of laws and courts who enforce them is to create finality to any issue that comes up. Once you admit something you can’t say it isn’t so unless you give a really good explanation  about why you admitted a fact that was in error and how that admission is somehow the fault of your adversary.
You probably will need to deliver a persuasive argument that shows how reversing your prior error will not impede justice. But it will impede justice because you’re forcing the courts to revisit an issue that was legally settled when you made your admissions.
Also a hardship statement will often concede that you can’t pay. That alone may be reason to deny your request for modification or any other relief. It is all a scam. 

A Document labeled “Assignment of Mortgage” Does Not Prove the Sale of the “Loan”

Too many lawyers and pro se litigants look at the title to a document and don’t know what else to do with it. They accept as true that a document is what is stated. That is one of the many trapdoors the banks have laid for us.

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The “title” to a document is a statement of fact that may or may not be true. The title used is for the convenience of the party who drafted it. In our analysis we do not assume or accept that any  document is what is stated as the title or anywhere else in the document.
The fact that a document is entitled “Assignment of Mortgage” does not mean that in reality there is either a valid mortgage or that a valid debt, note or mortgage was sold in any transaction.
Nor does the existence of the document mean that the signatures are authentic and authorized or even that the named entities or signatories actually exist as legal “‘persons.'”
The admission of such a document into evidence normally proves only that the document exists. While the existence of the document might raise assumptions or even legal presumptions, the document itself is not proof of any statements of fact or issues referred to in the wording of the document.
Such statements would normally be regarded or should be regarded as hearsay and excluded from evidence unless someone with personal knowledge, under oath, had personal knowledge for their five sense and recalled events that were tied to the execution of the document.

Objections must be timely raised or the objection is waived. Hence, if opposing counsel refers to wording in the document, that wording is hearsay but must be barred by (a) an objection at the moment the wording is the subject of a question to a witness and (b) the court sustaining the objection in the absence of a proper foundation for the admission of what is or ought to be recognized as excluded hearsay evidence.

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2014 Dissent Spells Out reasons for Rejecting Presumptions and Assumptions

Justice Rubin correctly anticipates the birth of a new black market industry — stealing debts as part of a larger scheme of stealing money.

In the context of an industry already using dubious tactics to collect on debts they have acquired, the prevailing notions in the minds of most judges allows for the question “Why buy the debts when you can just steal them?”

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see Justice Rubin CA Dissent

Hat tip to Eric Mains

As a result of my articles on legal presumptions and the havoc they are causing in creating faulty precedent instead of following precedent, Eric Mains found the above Case decision in California. I agree with Eric. The dissent neatly explains why the assumptions and presumptions currently in use are not being applied properly and are resulting in a body of law that has opened the door to unlimited moral hazard. Justice Rubin correctly anticipates the birth of a new black market industry — stealing debts as part of a larger scheme of stealing money.

Indeed there is ample evidence of the spread of imposters who are, under existing law, issuing self serving proclamations that they own consumer debts. Consumers, having no information about what and who manages their debts, will often concede the debt and concede that the debt is owed to the party who proclaimed ownership. And it all comes from a notion that never should have been allowed into American jurisprudence in the first place, to wit: a debtor may not challenge a party who claims to be his/her creditor. Discovery need not be allowed and proof need not be offered as to the veracity of the claims by “strangers” to the debt.

The underlying assumption is that since the debtor owes someone, ANYONE can enforce it. The theory advanced by courts is that the debtor/borrower/consumer has no standing to challenge the self proclamation. The theory advanced by courts is based upon the assumption that even if the debtor is right, it makes no difference to the debtor. The harm, if any, is to someone else who is the real creditor. The remedy can be worked out between the claimant and the real creditor.

The underlying assumption is incredibly based upon the assumption and presumption that the claimants are still acting in good faith and not acting as thieves. This is odd in view of the dozens of cases in which the self proclaimed participants in the securitization of debt have been shown to have committed forgery, fabrication, back-dating, robo-signing in what appears to be a majority of alleged loans to alleged borrowers that are subject to what now is obviously false claims of securitization. None of it is true.

This underlying assumption of good faith is contrary to the facts. It is wrong. And what Justice Rubin seeks to present is simply that any such claimant should prove their status and not be presumed to be a creditor just because they said so. As he puts it, either they are the creditor or they are not. It is an easy task and always has been an easy task to prove ownership of a debt. The fact that the banks have fought so hard to get courts to accept their assertions of ownership and authority just because the bank said so, should in and of itself have raised multiple red flags.  Justice Rubin conceeds that, ” I suspect that creditor-beneficiaries and their trustees do not want to be forced to prove they own a homeowner’s debt and have authority to foreclose because it is now well understood that in too many cases they can’t prove their ownership and authority. I am not prejudging the facts in this case, for that is why we have discovery and a trial.”

And the other underlying assumption is that there is no harm to the debtor who is obviously faced with multiple liability on the same debt, an inability to seek reinstatement, modification or settlement with the real creditor, and a bar to the legitimate defenses in state court, Federal Court and bankruptcy court. The courts routinely order the false creditor and the debtor into mediation. The debtor is forced to either reject a settlement with an unauthorized party and thus lose his or her home or to execute modification agreements that are not worth the paper on which they are written.

Trial courts across the land are still statistically more likely than not to adopt this pattern of abuse of due process. Courts are created to provide a fair forum in which the parties can be heard without presumptions of guilt of those accused of criminal or civil acts that cause harm to society or specific victims. The burden has always been on the accuser or the claimant — until now. For the past 10 years the court system has evaded, avoided, and ignored the reality expressed by claims of the debtor, the proof in court that the self proclaimed enforcing parties were unauthorized strangers — all because the judges started off with the wrong premise when there should have been no premise at all.

The necessity perceived by court administrators was also an incorrect presumption. Had the judges continued processing foreclosures the way they always did it would have resulted in virtually all of the foreclosures being denied. Or, to be fair, it would have resulted in all of the foreclosures being granted because there was nothing wrong. All evidence clearly shows a pattern of conduct of illegal, fraudulent activities in virtually all foreclosures over the past 10 years.

Had the court administrators merely kept to their current systems one of two results would have been clear: (1) the claimants were perpetrating a fraud or (2) the homeowners were putting up false defenses  for the purposes of delay. Either way, there would not have been a glut of foreclosure litigation. Either it would have been obvious that the enforcement claims were bogus thus eliminating the claims, or the defenses would have been revealed as frivolous, thus eliminating the defenses.

Instead the defenses of homeowners were routinely ignored and their lawyers were reprimanded and threatened by judges who believed that their presumptions were proper and that the lawyers were merely hairsplitting to “get a free house.” Experience now shows that these defenses are being upheld in an increasing number of cases and that judges following the the rule of accepting self serving statements from banks and servicers are now being reversed in an increasing number of cases.”

The conclusion to be drawn from these decisions has yet to be enunciated by a majority on the bench with the clarity expressed in Justice Rubin’s dissent.  He admits that, ” The reason I point out the omission is to highlight the difficulty of learning from tangled paper trails “who, what, where, when, and how” in mortgage cases involving lender documents that are sometimes – take your pick – incomplete, lost, inaccurate, post-dated, altered, robosigned, or created after the fact….”  It doesn’t have to be this difficult.  Again, like the Judge opines, ” Chase either had the authority to act when it submitted a credit bid to foreclose on appellants’ home despite having sold appellants’ promissory note to Freddie Mac – and has the evidence to prove it – or it did not. (See Civ. Code, § 2924h, subd.(b) [the “present beneficiary” may credit bid at trustee’s sale].) It really is a simple matter. Is that too much to ask when people are losing their homes? ” 

The glut of claims on mortgage foreclosures caused the judicial system to switch into an emergency mode. In so doing they skipped over the elements of fraud, due process and moral hazard in favor of “processing” the claims as quickly as possible rather than determining if the claims had any validity.

In the context of an industry already using dubious tactics to collect on debts they have acquired, the prevailing notions in the minds of most judges allows for the question “Why buy the debts when you can just steal them?”

Livinglies “Theory” Again Corroborated by 4th DCA in Florida: Proof of transaction IS required.

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see Murray vs. HSBC – 4D13-4316

Having exhausted all possible explanations for the fraudulent behavior of the banks, the 4th DCA has now come to the conclusion that the reason for robo-signing, fabrication, backdating, forgery etc. is that there was no transaction underlying the paperwork that the banks rely upon — at least in this case. In this case in particular, after all the cynics, critics and ridicule I confess my base instincts when I say “I told you so.” Of course the case is remanded, but there is no way HSBC is going to be able to prove anything required by this decision.

For legal practitioners the take away from this case and others being decided in Florida and around the country, is that you should not accept proclamations from either opposing counsel or the bench that the facial validity of a document is enough. In most cases there is no underlying transaction in which a purchase and sale of the loan was completed. So now, at least in the 4th DCA in Florida, foreclosing parties are being returned to the days when they had to prove the actual loan and prove that actual purchase of the loan through proof of payment for the transaction by the party seeking to enforce the loan. And when they don’t or can’t they should be subjected to sanctions against both the conspirators and their attorneys, plus punitive damages.

CAVEAT: THIS CASE DOES NOT APPLY TO ALL CASES. Check with an attorney licensed in the jurisdiction in which your property is located before you make any decisions or start celebrating. But if you check around you will see an increasing number of Florida and other state and Federal decisions, including bankruptcy court, where they found the original note and mortgage void or the transfers to have eviscerated the right to enforce the mortgage through foreclosure. In short, the tide has turned.

A nonholder in possession, however, cannot rely on possession of the instrument alone as a basis to enforce it. . . . The transferee does not enjoy the statutorily provided assumption of the right to enforce the instrument that accompanies a negotiated instrument, and so the transferee “must account for possession of the unindorsed instrument by proving the transaction through which the transferee acquired it.” Com. Law § 3–203 cmt. 2. If there are multiple prior transfers, the transferee must prove each prior transfer. Once the transferee establishes a successful transfer from a holder, he or she acquires the enforcement rights of that holder. See Com. Law § 3–203 cmt. 2. A transferee’s rights, however, can be no greater than his or her transferor’s because those rights are “purely derivative.”

Id. (emphasis added) (internal citations omitted).
HSBC had to prove the chain of transfers starting with Option One California as the first holder of the note. The only document admitted that purported to transfer the note was the PSA. Although the note was included in the PSA, the parties to the PSA were ACE, Option One Mortgage Corporation, Wells Fargo, and HSBC; not Option One California. The loan analyst testified that Option One California was acquired by AHMS, which rebranded to Homeward Residential, which was ultimately acquired by Ocwen. HSBC argues that since “Option One” is defined under the PSA as “Option One Mortgage Corporation or any successor thereto,” and Option One transferred its interest to HSBC through the PSA, HSBC had the rights of a holder. We disagree.

GMAC v Visicaro Case No 07013084CI: florida judge reverses himself: applies basic rules of evidence and overturns his own order granting motion for summary judgment

Having just received the transcript on this case, I find that what the Judge said could be very persuasive to other Judges. I am renewing the post because there are several quotes you should be using from the transcript. Note the intimidation tactic that Plaintiff’s Counsel tried on the Judge. A word to the wise, if you are going to use that tactic you better have the goods hands down and you better have a good reason for doing it that way.

Fla Judge rehearing of summary judgement 4 04 10

5035SCAN4838_000 vesicaro Briefs

Vesicaro transcript

Posted originally in April, 2010


I appeared as expert witness in a case yesterday where the Judge had trouble getting off the idea that it was an accepted fact that the note was in default and that ANY of the participants in the securitization chain should be considered collectively “creditors” or a creditor. Despite the fact that the only witness was a person who admitted she had no knowledge except what was on the documents given to her, the Judge let them in as evidence.

The witness was and is incompetent because she lacked personal knowledge and could not provide any foundation for any records or document. This is the predominant error of Judges today in most cases. Thus the prima facie case is considered “assumed” and the burden to prove a negative falls unfairly on the homeowner.

The Judge, in a familiar refrain, had trouble with the idea of giving the homeowner a free house when the only issue before him was whether the motion to lift stay should be granted. Besides the fact that the effect of granting the motion to lift stay was the gift of a free house to ASC who admits in their promotional website that they have in interest nor involvement in the origination of the loans, and despite the obviously fabricated assignment a few days before the hearing which violated the terms of the securitization document cutoff date, the Judge seems to completely missed the point of the issue before him: whether there was a reason to believe that the movant lacked standing or that the foreclosure would prejudice the debtor or other creditors (since the house would become an important asset of the bankruptcy estate if it was unencumbered).

If you carry over the arguments here, the motion for lift stay is the equivalent motion for summary judgment.

This transcript, citing cases, shows that the prima facie burden of the Movant is even higher than beyond a reasonable doubt. It also shows that the way the movants are using business records violates all standards of hearsay evidence and due process. Read the transcript carefully. You might want to use it for a motion for rehearing or motion for reconsideration to get your arguments on record, clear up the issue of whether you objected on the basis of competence of the witness, and then take it up on appeal with a cleaned up record.

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