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

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

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

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Hat tip to summer chic

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

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

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

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

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

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

Dan Edstrom senior forensic loan examiner writes the following:

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

US Bank Business: Rent-A-Name, Trustee

IF THE SERVICER IS NOT AFFILIATED WITH US BANK “IN ANY WAY” THEN EITHER US BANK HAS NO TRUST DUTIES OR THE SERVICER HAS NO SERVICING AUTHORITY

BOTTOM LINE: A trust without a trustee holding fiduciary duties and actual powers over trust assets is no trust at all. This signals corroboration for what is now well known in the public domain: the REMIC trustee has no powers or duties because there is no trust and there are no trust assets.

See below for why I am re-publishing this article.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Until now I knew about a letter sent out by US Bank until the TBTF banks in control of the mortgage mess realized that this was a dangerous letter. It provides proof and corroboration and opportunities for further corroboration that US Bank is a fictitious trustee even when named in a PSA/Trust.

I can’t give you a copy of the actual letter as that contains private information. But I now physically have in my possession of the wild card letter sent out by US Bank filled with factual misstatement, legal absurdities, fraud, and admissions against interest that show clearly that the  entire “securitization” game is but a rotating cloud of existing and non-existing entities blinking in and out such that finding the those in charge becomes impossible to detect.

The text in blue are direct unedited quotes from the letter answering a homeowner, in 2013, who was trying to figure out who is in charge. This is a short letter and the quotes essentially make up virtually the entire letter. They are not taken out of context. The rest are my comment and opinions.

NOTE: [FORECLOSURE BY PARTY CLAIMING TO BE THE CREDITOR OR HOLDER OR OWNER WITHOUT MENTION OF TRUST;]Where the Master Servicer or a subsidiary or affiliate of the Master Servicer names itself as Plaintiff (i.e., the foreclosing party) you may not realize that you are dealing with a securitization plan that went bad or was reconstituted, but either way the Master Servicer never funded (i. e., was the source) any loans within this class of loans that were falsely represented to be subject to claims of securitization. The goal is the same because internally the Master Servicer is attempting to seal the illegal record with a legal act or judgment and is attempting to get its hands on mislabeled “servicer advances.”

Here are the quotes (in blue0 from the letter with commentary (in black):

  • I have researched your mortgage and have determined that
    • Since he disclaims any authority or responsibility for the trust assets, what “research” did he perform?
    • Where did he get his information from when the authority and responsibility for the loans rests with a third party?
    • US Bank clearly could not have business records unless the Master Servicer was reporting to the NAMED Trustee. But we know that isn’t happening because the PSA expressly prevents the beneficiaries or the trustee from getting any information about the trust assets or in even seeking such information. 
    • This letter is clearly a carefully worded document to give false impressions.
    • Upon reading the PSAs it is obvious that neither the Trustee nor the beneficiaries have any permitted access to know how the money or assets is being managed
    • This opens the door to moral hazard: i.e., that the sole source of information is coming from third parties and thus neither the beneficiaries nor the putative “borrowers” have any information disclosed about who is actually performing which task. 
    • This could be concealment fraud in which the direct victims are the investors and the indirect victims are the homeowners.
  • US Bank is merely the Trustee for the pool of mortgages in which your loans sits.
    • “Merely the Trustee” is non descriptive language that essentially disclaims any actual authority or duties. It is apparently conceding that it is “merely” named as Trustee but the actual duties and authority rests elsewhere.
  • The Trustee does not have the authority to make any decisions regarding your mortgage loans.
    • So we have a Trustee with no powers over mortgage loans even if the “loans” were in a pool in which ownership was ascribed to the Trust. Again the statement does not specifically disclaim any DUTIES. 
  • The servicer is the party to the trust that has the authority and responsibility to make decisions regarding individual mortgage loans in the trust. It is the Servicer who has taken all action regarding your property.
    • “all action” would include the origination of the loan if the investors’ money was being used to originate loans rather than buying existing loans.
    • This statement concedes that it is the servicer (actually the Master servicer) that has all power and all responsibility for administration of the trust assets. 
    • In short he is probably conceding that while US Bank is NAMED as Trustee, the ROLE of Trustee is being performed by the Master Servicer, without any information or feedback to the named Trustee as a check on whether a fiduciary duty has been created between the Master Servicer and the trust or the Master Servicer and the trust beneficiaries. 
    • Hence the actual authority and duties with respect to the trust assets lies with the Master Servicer who hires subservicers to do whatever work is required, mainly enforcement of the note and mortgage, regardless of whether the loan ever made it into the Trust. 
    • It follows that the sole discretion of the Master Servicer creates an opportunity for the Master Servicer to gain illicit profits by handling or mishandling originations, foreclosures and liquidations of property. Taking fictitious servicer advances into account it is readily apparent that the sole basis for foreclosure instead of workouts is to “recover” money for which the Master Servicer never had a claim for recovery. 
      • Reporting in actuality is nonexistent except for the reports of “borrower payments” which are massaged through multiple subservicers each performing a “boarding process” in which in actuality they merely input new data into the subservicer system and claim it came from the old subservicer.
      • This “boarding process” is a charade as we have seen in the majority of cases where the knowledge and history of the payments and alleged delinquency or default has been challenged. In nearly all cases despite the initial representation from the robo-witness, it becomes increasingly apparent that neither the witness nor his company, the subservicer, have any original data nor have they performed any reviews to determine if the data is accurate.
      • In fact, upon inquiry it is readily apparent now that the “records” are created, kept and maintained by LPS/BlackKnight who merely assigns “ownership” of the records from one assigned subservicer to the next. LPS fabricates whatever data is necessary to allow an appointed “Plaintiff” to foreclose, including the fabrication adnfoqgery of documents.
        • This is why the parties to the 50 state settlement do not perform the reviews required under the settlement and under the Dodd-Frank law: they have no records to review. 
    • in this case the current subservicer is SLS — Specialized Loan Servicing LLC
  • While US Bank understands and wishes to assist you with this matter, the servicer is the only party with the authority and responsibility to make decisions regarding your mortgage and they are not affiliated with US Bank in any way.
    • Hence he concedes that the duties of a trustee (who by definition is accepting fiduciary responsibilities to the trust entity and the trust beneficiaries) is being performed by a third party, with absolute power and sole discretion, who has no affiliation with US Bank.
      • This concedes that US Bank is not a trustee even though it is named as Trustee in some trusts and otherwise “acquired the trust business” from Bank of America and others. 
        • A Trustee without powers or duties is no trustee. Disclaimer of fiduciary duties denotes non acceptance of being the Trustee of the Trust.
        • Acquiring the trust business is a euphemism for the continuation of the musical chair business that is well known in subservicers. 
        • Being the trustee is NOT a marketable commodity without amendment to the Trust document. Hence if a Trustee is named and has no power or duties, and which then “sells” its “trust business” to US Bank the “transfer” trust responsibility is void but damnum absque injuria. 
        • No action for breach of fiduciary exists because nobody assumed the fiduciary duty that must be the basis of any position of “trustee” of any trust.
  • BOTTOM LINE: A trust without a trustee holding fiduciary duties and actual powers over trust assets is no trust at all. This signals corroboration for what is now well known in the public domain: the REMIC trustee has no powers or duties because there is no trust and there are no trust assets. 

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Update: An identical letter (see below) has been sent to me from various sources all ostensibly from US Bank. My opinion is that

  • The letter is not from US Bank
  • US Bank Corporate Trust Services has nothing on the alleged loans
  • No business records are kept by US Bank in connection with alleged loans subject to alleged claims of securitization
  • The letter was not sent out by Bank of America either although one might surmise that. It was sent by LPS/Black Night
  • The letter is pure fabrication and forgery.
  • The cutting and pasting was done by persons who have no relationship with even the false claims of the banks
  • Goldade has no trust duties in connection with the alleged loan
  • And of course the alleged loan is not in the trust, making claims by or behalf of the “trustee” or the “Servicer” completely without merit or foundation.

Here is an example of one of the letters that I used for analysis : Note that the “:,F4” indicates that the signature was pasted not executed by a real person with a pen. You can examine your own letters like this by highlighting the letter contents and then pasting to text edit rather than Word or any other program that corrects and substitutes the command rather than just printing it. The “errors” in grammar and formatting occur in text edit.

The meta data from the letter shows the following, and I have the rest of it as well.

/Type /Metadata
/Subtype /XML
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>>
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<?xpacket begin=”” id=”W5M0MpCehiHzreSzNTczkc9d”?><x:xmpmeta x:xmptk=”NitroPro 9.5″ xmlns:x=”adobe:ns:meta/”><rdf:RDF xmlns:rdf=”http://www.w3.org/1999/02/22-rdf-syntax-ns#”><rdf:Description rdf:about=”” xmlns:dc=”http://purl.org/dc/elements/1.1/” xmlns:pdf=”http://ns.adobe.com/pdf/1.3/” xmlns:pdfaExtension=”http://www.aiim.org/pdfa/ns/extension/” xmlns:pdfaProperty=”http://www.aiim.org/pdfa/ns/property#” xmlns:pdfaSchema=”http://www.aiim.org/pdfa/ns/schema#” xmlns:pdfaid=”http://www.aiim.org/pdfa/ns/id/” xmlns:xmp=”http://ns.adobe.com/xap/1.0/”><xmp:ModifyDate>2016-11-04T18:28:42-07:00</xmp:ModifyDate>
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Note the reference to Nitro Pro 9.5 --- 
which is a program that allows one to edit pdf files
 and then print them out 
as though the new pdf was simply a printout 
of a pre-existing document.  
Here is how the letter appears in text edit:
I am writing in response to your Debt Elimination Scheme and complaint on the subject property sent to U.S. Bank National Association (“U.S. Bank”). On behalf of U.S. Bank, I am happy to assist you with this matter to the extent I am able to provide information.
I have researched your mortgage and have determined that U.S. Bank is merely the trustee for the Trust that owns yourmortgageandnote. PleasenotetheTrustistheownerofyourmortgageandnote,notthetrustee. Theservicer is the party to the Trust that has the authority and responsibility to make decisions and take action regarding individual mortgage loans in the Trust. The trustee has no authority or responsibility to review and or approve or disapprove of these decisions and actions. It is the servicer who has taken all action regarding your property, and has the information you have requested.
As we stated in our response of July 27, 2016 you must work with Bank of America as the servicer of your loan, to have your request addressed. I have forwarded your correspondence to Bank of America and they have responded and stated you may utilize the following email – litigation.intake@bankofamerica.com.
While U.S. Bank understands and wishes to assist you with this matter, the servicer is the only party with the authority and responsibility to make decisions regarding this mortgage and they are not affiliated with U.S. Bank in anyw ay.
Please work with Bank of America to address your concerns using the information provided to you in this letter, so they may assist you in a more timely and efficient manner.

Sincerely  :,f4

Kevin Goldade Corporate Trust Services 60 Livingston Ave
St Paul, MN 55107
cc Bank of America
  •  IF THE SERVICER IS NOT AFFILIATED WITH US BANK “IN ANY WAY” THEN EITHER US BANK HAS NO TRUST DUTIES OR THE SERVICER HAS NO SERVICING AUTHORITY

 

FAMILIARITY IS BREEDING CONTEMPT IN THE COURTS

Business Records Exception On Shaky Ground: The main point is foundation: the affidavit or testimony by the robo-witness must show that the company he works for is in fact the servicer of the loan, as authorized by the owner of the debt, and that he/she has actual knowledge of the procedures and posting policies of the servicer and the owner of the debt. I would add that this “corporate representative” must show that he/she and the “servicer” is authorized to speak for, and thus appear for the foreclosing party.

see http://www.newyorklawjournal.com/home/id=1202770275522/Casting-Doubt-on-Validity-of-Servicer-Affidavits-in-Foreclosure-Litigation?mcode=1202615326010&curindex=0&slreturn=20160925141040

Hearsay is always excluded from evidence — at least when it is ruled as hearsay. A document is hearsay in nearly all instances and thus may not be introduced into evidence — unless it satisfies the elements of a exception to the hearsay rule of exclusion.

In foreclosures the main hearsay event arises from the fact that no creditor appears in court. It is virtually always a company that claims to be a servicer for the owner of the debt, but the situation is nearly always opaque as to the identity of the owner of the debt who they say authorized them as servicer.

The typical testimony from a robo-witness, on leading questions from the attorney, is that he/she is familiar with the the record keeping process and policies of the servicer and that the letter, or payment history sought to be introduced into evidence was produced in the ordinary course of business from records kept in the ordinary course of business based upon entries made at or near the time of an actual event. Of course, with most of such documents there is no “event” and that is a problem for banks and servicers.

New York seems to be leading the way on the issue of whether these documents are trustworthy exceptions to the hearsay rule of exclusion. See the above link.

Judges in New York now know they will be reversed unless there is clear and competent evidence that the witness can attest from their own personal knowledge using one or more of their five senses — i.e., that they have seen and heard and followed the process of making and keeping records and that they had access to the records showing that the “servicer” was authorized to act as such.

The reason why banks have shifted from the old tried and true practice of sending a representative of the alleged owner of the debt to court is that such a person knows too much and would either be required to perjure themselves or tell the truth, to wit: that the company he/she works for is not the owner of the debt and he/she has no idea who is the owner. Such a person would be forced to admit either ignorance of any transaction in which their employer purchased the loan or that the loan was not in fact purchased by his/her employer.

Such an admission would completely obliterate the claim of the company claiming to be a servicer on behalf of the owner of the debt. This in turn would eliminate the business records exception to the hearsay rule of exclusion. We could go deeper into the number of IT platforms that are maintained and by whom they are maintained and whether the “servicer” even has access to the actual records, but it seems potentially unnecessary with decisions coming from appellate courts who are worried about opening the door on hearsay in millions of other cases unrelated to foreclosure.

Those courts are rapidly retreating from the temporary imposition of an extended exception to the hearsay rule because they can readily see how justice would not be served in criminal and civil matters if the rule remains as loose as it is now.

It is much better for the banks to send someone who knows nothing and therefore cannot accidentally or otherwise tell the truth about these bogus loans and fraudulent foreclosures. The banks are in essence throwing the servicers under the bus, along with the attorneys hired by the servicers. But the walls are caving in on them and they will soon need to put up or shut up — producing a real witness with real (not presumed) knowledge or take a voluntary dismissal. As we have seen in thousands of cases, when presented with that choice the banks voluntarily dismiss their actions even when it means they must pay attorney fees to the homeowner.

The obvious conclusion is that there is no such witness and the facts asserted by the foreclosing party are pure fiction, reliant entirely upon illusion and the erroneous application of legal presumptions.

From the article cited above:

“Lenders will need to find ways in which to meet the new requirements imposed in order to satisfy the business records exception to the hearsay rule announced in decisions such as Royal. For instance, lenders may seek to avoid altogether obtaining affidavits from third-party loan servicers, and instead use representatives of the lender, who can attest to their familiarity with the lender’s record-keeping practices and procedures, in order to submit affidavits and documents to the court.

 
Alternatively, if lenders continue to insist, even after Royal and the other decisions of the Second Department discussed above, to use affidavits from third-party loan servicers in mortgage foreclosure litigation, then the best practice will be to have loan servicers (as opposed to lenders) be the party to act as the plaintiff in the foreclosure litigation. So long as the loan servicer is authorized to do so by the lender, courts have found that loan servicers have standing to present claims for foreclosure and sale on behalf of the lender that owns and holds the note and mortgage at the time of the commencement of the action. See, e.g., Flushing Preferred Funding Corp. v. Patricola Realty Corp., 964 N.Y.S.2d 58 (Sup. Ct. Suffolk Co. 2012).”

Preservation Letter and Discovery

In order for the “business records” to be accepted as an exception to hearsay, foundation is required. Part of foundation is an inquiry into whether these records are the complete records. If they are not the complete records then there is daylight created for the argument that the “business records” are objectionable based upon the fact that they are incomplete.

see sample-preservation-letter

Among the many abuses we see in court is that only partial records are available — even in discovery. One of the steps that could provide the foundation for establishing that the business records” are not complete and have never been complete is through the use of a preservation letter and then follow that up with discovery.

The above link shows, in some detail, as this process unfolds.

Dan Edstrom, senior forensic analyst for Livinglies says —

They are concealing documents they are required to produce, and have an affirmative duty to produce pursuant to (among others):
  • National Mortgage Settlement (servicer will send the evidence supporting the validity of the assignment to the homeowner)

  • CA. HBOR – servicer will ensure they have competent evidence supporting the substantial documents used to foreclose

  • Rule 9011 – attorney or party signing documents filed in bankruptcy court certifies that the documents and factual contentions are not used for an unlawful purpose (to harass, delay, etc.); that the documents and factual contentions are supported by law; that the documents and factual contentions are supported by evidence; that the attorney or person signing has made a reasonable inquiry before submitted the documents or factual contentions.

  • Rule 3001 requires proof of claims to include the writings if a claim is based on a writing, and if the writing is not available provide an explanation.  The failure to provide either is an omission of a material fact …

Documents You Might Not Have Asked For Could be Key to Case

One of the interesting things that nobody is talking about yet is the fact that the “business records” are either not complete or the foreclosing party is producing documents that serve its purpose when it knows that it holds documents that would negate the very proposition they are proffering in court.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

One of the interesting things that nobody is talking about yet is the fact that the “business records” are either not complete or the foreclosing party is producing documents that serve its purpose when it knows that it holds documents that would negate the very proposition they are proffering in court. Certainly a void assignment fills that bill.

*

Business records that are incomplete are objectionable because they are not complete. It undermines the trustworthiness of the party proffering the use of those so-called business records. It requires much more foundation to admit partial business records. Or at least it should require it. But judges are not likely to be very receptive UNLESS you asked for these documents in discovery. That could tip the other way for you, of course, because you are tipping your hat on your trial strategy. But this might be an opportunity to bar the use of their business records altogether.
*
So here is something more important, I think. NOBODY ever sells a mortgage loan with just an assignment. Not now, not ever. People are saying that these loans are sold without documentation and that IS the way it looks sometimes. But we all know that the banks are masters of illusion.
*
They have previously entered into purchase and assumption agreements that provide for the “purchaser” to underwrite a loan before it is made and THEN the “purchaser” will “purchase it” in some scenarios, but in most scenarios there is no purchase because there was no loan from the “assignor” to the maker of the instrument.If there were no purchase and assumption agreements many household name originators wouldn’t exist. Sometimes actual banks served in the role of originators. It is all the same. None of them were on the hook for the risk of loss and THAT is the true test of a real party in interest. Bank regulators were either asleep or paid off to look the other way when they looked at the purchase and sale agreements which were a covenant to violate federal and state lending laws.

*

The “purchaser” is really a conduit for investor funds that have been laundered six times before they got to the closing table. But regardless of how many items it is laundered it still comes down to the same thing — the Payee on the note never made the loan. Someone else did, using money from an unidentified and perhaps unidentifiable group of investors/victims.

*

The only REAL reasons why a bank would not demand all the actions, documents, representations and warranties (warrants) is that it already knows what you are getting and you have already performed the due diligence in another transaction cycle. These are things that could be pursued in discovery, but you must assume that what I am saying is true if you are going to fight for them. And you must commit to being very aggressive in fighting for them.

*

The banks will say “we complied” when they give you nothing. You should have an expert affidavit that says the banking industry doesn’t work that way. They always perform due diligence unless they control the entire transaction cycle — in which case they still have documents to give you showing they controlled the transaction cycle.

*

Here is the normal track for the sale of a mortgage loan:

Take this quote from one of many websites that “assist” in the sale of mortgage loans:

“If you’re like us, you can’t really start your due diligence until you reference your MLSA (Mortgage Loan Sale Agreement) and check over to see what representations (reps) and warrants are contractually included or not. It’s a given that you must know your note seller as this is absolutely a relationship based business. Remember that collateral comes post closing, so you can’t just trust everyone without some sort of verification. Sure you can have safeguards like a Bailee letter, exceptions reports, Power of Attorney’s (so you can create your own assignments and allonges as opposed to waiting for the note seller to create them), and even escrow accounts, but at the end of the day know who you’re dealing with. It’s also important to know the cure periods and terms with any buyback scenarios or missing collateral. Back in 2007 contracts looked much different than today when there were plenty of reps and warranties. Today it’s mostly buyer beware with few reps and warranties at all. If you are ever in need of document retrieval, I highly recommend trying Orion Financial.”

Another Sham: The Sudden Rise of Powers of Attorney in Foreclosure Cases

The entire foreclosure mess has been predicated upon one huge false premise — that by fabricating reams of paper, each one tied to the other or apparently tied to others, rights are suddenly created where none existed. This has never been the law but it suddenly has become the underpinning of most decisions in favor of banks and servicers who are strangers to the transactions upon which they are making claims.

WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation. In order to make it easier to serve you and get better results please take a moment to fill out our FREE registration formhttps://fs20.formsite.com/ngarfield/form271773666/index.html?1453992450583 
Our services consist mainly of the following:
  1. 30 minute Consult — expert for lay people, legal for attorneys
  2. 60 minute Consult — expert for lay people, legal for attorneys
  3. Case review and analysis
  4. Rescission review and drafting of documents for notice and recording
  5. COMBO Title and Securitization Review
  6. Expert witness declarations and testimony
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Just want to point out that the reason why they are using a Power of Attorney (POA) instead of a servicing agreement is that the servicing rights are retained by the Master Servicer and sometimes even the subservicer. While the POA might appear to grant full authority it is missing the servicing functions including accounting for borrower payments and payments to the “investor(s)”. Especially when you add the element of entries made at or near the time of the transaction. This is another reason why homeowners who are alleged borrowers should be able to look at those transactions and see if the “business record” is correct. Once again we come back to discovery as the essential time to bring this up.

All of this makes it impossible for the latest entity to legally receive an application for modification. When you scratch the surface and actually ask the question the answer is always the same — that the “corporate representative” of the latest entity in the game of musical chairs can neither offer nor accept any modification and in fact is there purely for the purpose of getting the foreclosure judgment and forced sale of the property — an event that puts a judges order and a court clerk’s certificate on top what is in actuality a pile of empty, worthless paper.
The inability and/or unwillingness of the Plaintiff or its newest “attorney in fact” to show the actual money trail and actual deposits and disbursements, is a key factor in showing that other documents upon which the  banks and servicing are relying (using legal presumptions to fake their way through the process) are now suspect and thus not deserving of the application of the legal presumptions that ordinarily would apply to facially valid or recorded documents.
Remember the newest entity supplying records is NOT the Plaintiff. Judges tend to treat them as though they w ere the Plaintiff. This element of distraction by the lawyers for the banks and servicers has served them well. The Judge treats the newest entity as the Plaintiff when in fact they are not alleged to be holder, owner or have any interest or authority at all. And for good measure let’s not forget that the newest entity has no authority and possesses no “business records” (as an exception tot he hearsay rules of evidence) if it claims authority from an entity that has no power to give such authority. The entire foreclosure mess has been predicated upon one huge false premise — that by fabricating reams of paper, each one tied to the other or apparently tied to others, rights are suddenly created where none existed. This has never been the law but it suddenly has become the underpinning of most decisions in favor of banks and servicers who are strangers to the transactions upon which they are making claims.
The bottom line is that the party charged with enforcement is not a servicer but rather an enforcer. As an enforcer and since they do not have all the rights, obligations etc of a Master Servicer or subservicer, can their business records still be admissible? If they are only the enforcer and they are relying upon their stringent audit of the business records, that sounds more like a fact witness or even an expert witness than a party who has actual authority to service the loan.

The issue becomes split. The new entity that is not a servicer and therefore not charged with servicing duties, should not be able to claim that it has authority to bring the action in the name of another entity. The servicer clearly could but the attorney in fact is really a material witness whose sole function is to testify about the business records. The assumption is made that as the successor to prior alleged servicers, they can claim a chain of custody. But a company that in actuality is there for e the sole purpose of getting “business” records” into evidence is a fact witness who deserves no more presumptive credibility than any other witness.

The “servicer” claim by way of a POA is therefore a sham.

Tackling the Business Records of the Servicers

FORENSIC ANALYSTS AND CPA’S

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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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One of the very contentious issues in foreclosure litigation is the question of hearsay and the business records exception to the hearsay rule. Business records are hearsay, there is no doubt about that. But they are usually allowed into evidence under the “business records” exception to the hearsay rule. The issue of business records heads right into the issue of moral hazard.
There are actually three entities present where the foreclosing  party would have you believe that there is only one party: (1) the true creditor, if there is one meeting the legal definition, (2) the holder of the note (usually the trust) and (3) the subservicer and its predecessors (actually a group of parties). The issue I present is whether the so-called records of the servicer can be attributed to the alleged holder and whether the alleged holder is actually representing a creditor.
The question is whether records showing transactions between the alleged borrower and the alleged servicer are sufficient. The question arises because the party who is asserted to the foreclosing party has a contractual relationship with the investors in the trust to make payments. These payments should be made by the Trust to the Investors derived from payments to the Trust from the servicer. The payments to the Investors are not conditioned upon payments to the Trust. Thus you have the following contractual relationships:
  1. REMIC Trust and Beneficiaries (investors)
  2. Master Servicer and Trust
  3. Master Servicer and subservicers
  4. “Borrowers” and payee on the note, and its legal successors — if there was consummation of the original loan. If not then between homeowners and investors whose money was used to fund the appearance of a loan transaction

The investors might be, as a group, called creditors — but the actual identification of those “creditors” might be incapable of determination because of the commingling of funds of investors from a multitude of Trusts and the failure to provide a clear money trail that shows the presence of one or more creditors in a specified “loan” transaction. We already know that the Trusts are never asserted to own the debt. They are alleged to be holders and not holders in due course. The trusts are “place-holders”. One thing appears certain — nobody is suggesting that the borrowers and the investors have any contractual relationship. I would suggest the homeowners and investors are the only parties who have a real relationship and that all others asserted by the banks are an illusion. This relationship between the investors and the “borrowers” is not in contract, but rather in equity.

There is a big difference between a certified fraud examiner and a CPA. The CPA would carry far more weight in my opinion. That is because the CPA would be testifying, using the rules on auditing of banks, and other “lenders”, about the absence of evidence upon which a presumption would arise that the loan in question was on the books of any entity as an asset. This would lend considerable support to discovery demands. Since we are saying that the chain of money and the chain of paper went off in two entirely different directions, who better to say that than a CPA with no stake in the outcome?

Then the forensic analyst comes and says that there are defects, forgeries etc — an opinion upon which the CPA could rely, in saying that auditing rules, in the face of such conclusions require examinations of the actual transactions, including proof of payment. Without that, the CPA would testify, the “business records” may not be business records at all (but rather a device to create the appearance of business records, and therefore overcome the hearsay objection). The dichotomy being that the subservicer is presenting “business records” of its own and prior companies but not the business records of the foreclosing party (i.e., usually the Trust). The presence of an actual default in the accounts of the investors is debatable at best.

If you talk to a CPA with an open mind, even if he/she doesn’t want to become an expert witness, they can explain it. The question is how do we know whether this loan is an asset of any person? And how can we know who is authorized to represent the owner of the asset without knowing the owner?

The CPA can also clear up another shroud. Can the records of a servicer (assuming it was authorized) actually be the entire records of the real creditor, who is another party?

The biggest obstacle to this is the mindset of borrowers and their attorneys. They can’t quite wrap their minds around the idea that there was no consummation, there was no loan (at least with the party who appears on the note). But the biggest hurdle in understanding all this is the totally unique concept that the homeowner received money and that from the start there was no party answering to the description of a creditor — unless we accept the premise that we don’t need to know that.

So the evidence question is how can we ever be sure that the records of a subservicer are representative of realities at the level of the Master Servicer, the higher level of the alleged Trust, or the highest level of the investors/ beneficiaries? Without business records of the Trust or the trust beneficiaries we only have  partial picture from a subservicer who generally has no direct knowledge or records about transactions with either the investors or the homeowners.

Hearsay: Those “Business Records” Are Not Really Admissible Into Evidence

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It is no surprise that the Banks are attempting to use business records instead of live testimony from witnesses with personal knowledge. That testimony might be laced with perjury exposure for both the witness and the attorney who is the proponent of the witness. So they are trying all sorts of arguments about “stringent audits” and “boarding process” from a corporate representative of a company that had nothing to do with the entries made into the records of any company. In fact, in most cases now, thanks to the shell game of switching servicers, trustees and other parties, the testimony from such a witness is hearsay on hearsay because they are talking about records produced at another company or organization.

An article published by P. Benjamin Zuckerman highlights the point:

The elements to prove that evidence is admissible under the business records exception are straightforward.  If the record (1) was made at or near the time of the event; (2) was made by or from information transmitted by a person with knowledge; (3) was kept in the ordinary course of a regularly conducted business activity; and (4) it was a regular practice of that business to make such a record, then it is a business record that may be admitted to prove the facts contained in the record.  All the elements must be established.

This all sounds simple enough, but as the Holt case demonstrates, it is necessary that someone with personal knowledge testify how the data was recorded, when it was recorded, by whom it was recorded (i.e., by a person with actual knowledge of what was being recorded), and whether it was done “at or near the time of the event” in conformity with the set procedures of the party (i.e., in the regular course of that company’s business).  As Holtmakes clear, relying upon the mere existence of records within a computer system renders it virtually impossible to meet the business records exception requirements.

see Beware: Those Business Records Might Not Be Admissible

see also MIchelle Stocker on Business Records Exception

All that said, if a proper and timely objection is not made, those records WILL come in and will be used to prove the truth of the matter asserted even if the matter asserted is false. Note that the above articles are written by lawyers who work for the big law firms that represent the banks.

Tampa Trial Judge Rules for Borrower Where Correct Objections Were Made

Patrick Giunta, Esq. brought this case to my attention.

Here is a case between the famed Florida Default Law Group, who reached distinction amidst accusations of fabricated documents, and an ordinary borrower represented by a St. Peterburg trial lawyer, John R. Cappa, who apparently knows the timing and content of the right objections. The result was involuntary dismissal against the foreclosing party.

The basis of the ruling was that the default had never been proven, the Plaintiff never offered proof of “rights to enforce” and tangentially the business records were not qualified as an exception to the hearsay rule. The witness admitted he knew nothing about the payment history of the borrower and was relying on the reports in front of him — something that is hearsay on hearsay. If anything corroborates my insistence on denying everything that is deniable, this case does exactly that. If the borrower admitted the default, admitted the note, admitted the mortgage, all that would be off bounds at trial because they would be facts NOT in issue.

In this case, like so many others the Plaintiff offered the letter giving notice of default BEFORE the FOUNDATION was established that there was in fact a default. I might add that non-payment is not a default if the actual creditor received payments anyway (servicer advances etc.), which is why I make a big deal about identifying the party who is the creditor — the person or entity that is actually owed the money. So the objections are relevance, foundation and hearsay.

Note that the Plaintiff failed to introduce proof of the right to enforce, even if they had THE note or any note. This has been the subject of numerous articles on this website. Being a holder means you can file suit, but without proving you are a holder with rights to enforce, you lose. And the way to prove that you have the rights to enforce is to provide some sort of written instrument that specifically says you have the right to enforce. It is the only logical ruling. Otherwise anyone could steal a note and enforce it without ever committing perjury.

While there are other objections that I think could have been raised, Cappa was confident enough in his position that he narrowed his attack onto issues that the Judge was required to follow. The Judge was confident that an appellate court would affirm his decision.

Take a look at the transcript and see if you don’t agree that there is something to be learned here. Forcing the Plaintiff to actually prove their case frequently results in judgment for the borrower. The reason is simple where you have originators who admit they actually did the loan on behalf of others and there are questions as to who was the servicer and when. Most importantly, there is a quote here in which Cappa says “just because they sent a default letter doesn’t mean that a default occurred” He’s right. It only means they sent the letter. The truth of the matter asserted (default) is hearsay. And being “familiar with a report allegedly gleaned from business records doesn’t mean you can testify that the payments were processed properly nor that you have any personal knowledge of the record keeping procedures that were used — even with 20+ years experience in the business.

Trial PHH Mortgage v. Parish

 

Federal Bankruptcy Judge Explains Wells Fargo Servicer Advances

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Mortgage Lenders Network v Wells Fargo, Chapter 11, Case 07-10146(PJW), Adv. Proc., Case 07-51683(PJW)

In an adversary proceeding in which evidence was presented, Judge Walsh dissected the confusing complex agreements involving the real set of co-obligors’ liability to the Creditor REMIC trust. Many thanks to our legal intern, Sara Mangan, currently a law student at FSU.

I had no idea the case existed. It apparently got buried because of all the ancillary issues presented. If you really want to understand the complexity of repayments to the creditor, this is one case that deserves your full attention.

As usual the best decisions are found when the adversaries are both institutions. We are looking for more such cases. This certainly applies to any Wells Fargo case and explains the nervousness of the witness during trial when I asked him about whether the records he brought were complete.

The LPS Desktop system (formerly Fidelity) INCLUDES servicer advances and computations made based upon that. The unavoidable conclusion, drawn by this Judge, is that everything we have been saying about servicer advances is true. Everything in our forensic report is true as to all properties. The servicer makes those payments based upon a payment of enlarged fees for taking the risk on itself, according to the agreements. Whether there is an actual right to recover from anyone is actually not specifically stated except that the net proceeds of liquidation of REO properties after the auction are subject to servicer claims. This might include other insurance or guarantees.

There is no default experienced by the creditor. There is a new potential for a new party (not mentioned in note or mortgage) for recovery outside the terms of the note and mortgage. The expectation is that there will be a foreclosure and there will be a sale. If there is no foreclosure and there is no sale, then the amounts are not recoverable — unless the servicer too is insured. But all of those insurance contracts seem to have been purchased and procured by the broker-dealer (investment bank) that sold the bogus mortgage bonds. The conclusion to be drawn is that the default notice to the homeowner-borrower might be valid (probably not, because servicer advances have already begun) but it is cured immediately after it is sent by payments, often from the same party who sent the default notice.

Remember the language in US Bank and Chase et al. The servicer SHALL make the advances unless it believes the advances are not recoverable. If the servicer was merely making a loan to the trust beneficiaries there would be little doubt that the advances were recoverable. They can argue that the advances are recoverable in substance from the borrower, but that is only AFTER the foreclosure Judgement and AFTER the sale and AFTER the liquidation of the property after the auction sale.

In this case, the following issues are addressed:

1. Servicer advances — in 4 categories. Why they are advanced and when and how they might be recoverable — when the properties are liquidated. There is some confusing language in there about the trusts, so you need to read it carefully. But the main point is that this is a case of prior servicer and new servicer, both of whom take on the obligation of making servicer advances whether the borrower pays or not. If there is a short fall, the servicer pays — or an insurer. In reality, and not addressed by the Court is the fact that in all probability the actual money advanced by the servicer most likely comes from a slush fund created by language buried deep inside the Prospectus or Pooling and Servicing Agreement that allows the investment banker to pay the trust beneficiaries using their own money advanced by them when they became trust beneficiaries.
2. Recovery is clearly stated as whatever money is left after the REO property has been liquidated or from the borrower. [Note there is ONE reference by the Judge to recovering from the Trust but he doesn’t explain it nor does he cite to anything in the agreements]. Since this provision is not referenced in the mortgage, they cannot be traveling under the mortgage and there is no mention of the mortgage provisions in this decision. Since those proceeds frequently are far less than the amount advanced, there is ono direct right of action by the servicer against the borrower, although I postulate that they could potentially bring an unsecured claim for restitution or unjust enrichment.
3. In the end one previous servicer owes the other new servicer the advances, not the trust and not the borrower.
4. There is insurance that makes sure that if the servicer doesn’t make the payments, then the insurer will make-up the shortfall. The insurers do not appear to have any recourse against anyone.

5. There can be no doubt that there are two types of default — one where the borrower stops paying on a note and mortgage (assuming the note and mortgage are valid) and the other, where the REMIC trust beneficiaries fail to get the required distribution as set forth by the Prospectus and Pooling and Servicing Agreement.

6. The conclusion I draw is that the recovery of advances “by the servicer” takes place after the mortgage has been foreclosed, by which time the initial homeowner borrower is out of the picture. Hence, it seems that while there are “proceeds” that can be claimed by the servicer, it is under a separate transaction with the REMIC Trust and under a potential right to claim money from the borrower for contribution or unjust enrichment — with unjust enrichment being a center-point of this case.

This case also explains many other transactions that occur between the servicer and other entities. It isn’t the encyclopaedia of servicer advances, but it explains a lot of what I have been talking about. When the borrower stops making payments for any reason (and perhaps legal reasons for withholding payment, or being prevented from making payments by a servicer who proclaims the loan to be in default), the creditor keep getting paid. So even if the allegation is that the cessation of payments was a default under the note and mortgage, the fact remains that the creditor is not experiencing any default because payments are being made in full by various parties to the creditor. Hence, my question to corporate representatives, about whether they are showing the full record, and whether the books of the creditor show a default. They don’t, if servicer advances were made. I have personally seen a Wells Fargo witness get quite agitated as I approached this subject.

Servicers have kept this information away from borrowers and have withheld it from the courts when they do their accounting.  I would add that if the  argument from opposing counsel is that the servicer advances are secured by the mortgage because of language that includes the word “advances” then they are admitting at this point that the entire structure of the loan as presented to the homeowner borrower was a lie. Under the federal truth in lending act such disclosure was entirely necessary to complete the transaction.

It will also be inevitably argued that this gives the homeowner borrower a free ride. Of course we all know that there is no free ride in this. The homeowner has usually made a substantial down payment and has made monthly payments for years. The homeowner had spent a lot of money on furnishing and completing the house. There is no free ride. But the best argument against the “free ride” allegation is that this is asserted by the party with unclean hands (and often intentionally withheld information from the court or even committed perjury).

read all about it: case on servicer advances and unjust enrichment

Walls Continue to CLose in On Banks in Courts Once Hostile to Borrower Defenses

McDonald v OneWest

This case should be read more than once

When I started writing about legal defenses to foreclosures that appeared patently fraudulent to me, I thought it might only take a few months for things to catch on. About the timing I have been consistently wrong. About the substance I have been consistently right.

Here again, the party seeking foreclosure not only failed in its current effort to do so, but was ordered to pay $25,000 within 7 days for forcing the homeowner’s attorney to fight tooth and nail for items that were or should have been at their fingertips, they had no reason to withhold, and should have been anxious to supply if the foreclosure was real.

The only potential error I see in the homeowner’s case is that  there appears to be an admission that Indy Mac was indeed the party who was the source of the loan — a fact which is nearly universally presumed and virtually always wrong in today’s foreclosures. Not knowing the actual facts of the case I can only speculate that this was an oversight, but it is possible that it wasn’t an oversight and that Indy Mac did in fact make the loan, booked it as a loan receivable, and then sold it into the secondary market for securitization.

There are several very important issues discussed rationally and without bias in this very well-written decision:

  1. Dates DO Matter: If the authorization to sign something is received after the signature is executed it isn’t any good. Lying about it and then fabricating documents to cover up the first lie are grounds for sanctions.
  2. Allegations of holder status are no substitute for facts and evidence. The supposed right to request it is not the same as holding, possessing or owning the note. Execution and recording of substitution of trustee, notice of default, notice of sale are all void if the party stated as the holder is not the holder.
  3. Ownership counts, which means that in order to submit a credit bid at a foreclosure action, the books and records of all the  relevant parties must be open to inspection and review to determine what balance, if any, exists, on the records of the owner of the debt — i.e., the party who would actually lose money if the loan was not paid, and the amount of the principal and accrued interest due, if any, after deductions for all receipts.
  4. Agency either exists or it doesn’t. And the paramount element of agency is control by the principal of the agent. There is, however, contractual obligations that come into play here. So if the investment bank received payments to mitigate damages on loans it either did so as agent for the investor or because they were contractually bound to do so as a vendor thus reducing the balance due on the bond. Either way, the balance due is reduced as to that creditor. It might be shifted to the party who paid who in turn might have a right of contribution unless they waived that right (which the insurance companies and CDS counterparts did in fact waive), but either way the new debt is no secured unless there was a purchase of the loan.
  5. Rules of Civil Procedure do matter and are “not optional.” If discovery requests, qualified written requests, debt validation letters are sent, answers are expected and due. The fact that the QWR is long does not mean it is invalid.
  6. Damages are possible, but you need to plead and prove them and that pretty much goes to whether these parties ever had any right to collect any money or enforce any note or any debt or enforce any mortgage against the homeowner. If the answer is yes, that if they get their act together, they can foreclose, there will likely be no damages. If the answer is no, which more likely than not is the case in current foreclosures, then damages properly pleaded and proven are easily sustained.
  7. Discovery is not a toy. The answer or the production is due.
  8. Hearsay is inadmissible and the business records exception, as stated by dozens of courts before this one, where the witness or declarant testifed for  “defendants chose to offer up what can only be described as a “Rule 30(b)(6) declarant” who regurgitated information provided by other sources” then we are taking hearsay and turning it into  evidence without any personal knowledge or testing of the truth of the matter asserted.
  9. Judges are not stupid. They know a lie when they hear it. But what happens after that depends upon the trial experience and knowledge of the lawyer. Don’t expect the Judge to go into orbit and give you everything just because he found that the other side lied. You still have a case to prove.

Washington J Lasnik Order Regarding MSJS

Herrera v Deutsch: CA Appeals Court Deals Death Blow to Deutsch — The House of Cards is Tumbling

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Herrera v Deutsch 5-31-11 Cal 3rd District

SEE HERRERA DECISION GOES PUBLIC MAKING IT BINDING ON OTHER COURTS

The Substitution of Trustee recites that the Bank “is the present beneficiary under” the 2003 deed of trust. As in Poseidon, this fact is hearsay and disputed; the trial court could not take judicial notice of it. Nor does taking judicial notice of the Assignment of Deed of Trust establish that the Bank is the beneficiary under the 2003 deed of trust. The assignment recites that JPMorgan Chase Bank, “successor in interest to WASHINGTON MUTUAL BANK, SUCCESSOR IN INTEREST TO LONG BEACH MORTGAGE COMPANY” assigns all beneficial interest under the 2003 deed of trust to the Bank. The recitation that JPMorgan Chase Bank is the successor in interest to Long Beach Mortgage Company, through Washington Mutual, is hearsay. Defendants offered no evidence to establish that JPMorgan Chase Bank had the beneficial interest under the 2003 deed of trust to assign to the Bank. The truthfulness of the contents of the Assignment of Deed of Trust remains subject to dispute (StorMedia, supra, 20 Cal.4th at p. 457, fn. 9), and plaintiffs dispute the truthfulness of the contents of all of the recorded documents.

STUNNING APPELLATE DECISION “GETS IT” AND DEALS DEUTSCH A BLOW FROM WHICH IT CANNOT RECOVER

The Rules of Evidence Finally Prevail — NO Presumptions and NO Judicial Notice

Slowly but surely, every point made on this blog, started 3 1/2 years ago, is coming true. Don’t lose hope. I knew that eventually the cards would fall the other way. The reason I knew is that the basic law being applied in this decision is inescapable. The failure of the trial judge to apply basic law was reversible error. The failure of the homeowner to properly plead his case might have had something to do with that, but the Appellate Court got the main points anyway. So here are some of the quotes that highlight the decision: (Special Thank You to Jake Naumer)

Plaintiffs Robert and Gail Herrera lost their house in South Lake Tahoe to a nonjudicial foreclosure sale. They brought suit to set aside that sale. They challenge whether the parties that conducted the sale, defendants Deutsche Bank National Trust Company (the Bank) and California Reconveyance Company (CRC), were in fact the beneficiary and trustee, respectively, under a deed of trust secured by their property, and thus had authority to conduct the sale.

Defendants also provided a declaration by a custodian of records for CRC, in which the custodian did not expressly declare that the Bank was the beneficiary and CRC the trustee. Instead, she merely declared that an Assignment of Deed of Trust and a Substitution of Trustee had been recorded and these recorded documents indicated the Bank had been assigned the deed of trust and that CRC had been substituted as trustee.

The Bank claimed to be the owner of the Property by virtue of a trustee’s deed recorded “by an entity purporting to be the trustee.”

Plaintiffs alleged CRC was not the trustee and had no authority to conduct a trustee’s sale, and believed no such sale had taken place. They further alleged any promissory note supporting the 2003 deed of trust was “time barred by the statute” and the maker, if any, “was lulled into believing that no action would be taken to enforce the 2003 [deed of trust] because no collection actions were taken within a reasonable time and no legally required notices of deficiency were sent or recorded.”

Plaintiffs alleged the original promissory note and deed of trust no longer existed and the Bank’s deed was invalid “as it is based solely upon purported copies which have no force and effect.”

The third cause of action was to quiet title to the Property. Plaintiffs alleged defendants had no original, verifiable promissory note or deed of trust and had no standing to foreclose. They further alleged all rights, title and interest asserted by defendants “were sublimated into a non-functional `security’ instrument that gives no one entity rights in individual notes and deeds of trust.” No defendant had an interest in the Property, but they had placed a cloud upon plaintiffs’ title.

The Bank and CRC moved for summary judgment or summary adjudication on each cause of action, contending there was no triable issue of fact as to any of plaintiffs’ claims. They claimed the undisputed evidence showed that the loan was in default, the Bank was the beneficiary under the deed of trust and CRC was the trustee. The default was not cured and CRC properly noticed the trustee’s sale. Notice of the sale was sent to plaintiffs and California law did not require the original promissory note to foreclose. The Bank and CRC further contended that to quiet title, plaintiffs must allege tender, or an offer of tender, of the amount owed.

defendants [Bank and CRC] requested that the court take judicial notice of certain documents pursuant to Evidence Code sections 451, subdivision (f) and 452, subdivisions (d), (g) and (h). These documents were:
(1) the Trustee’s Deed upon Sale recorded August 13, 2008, under which plaintiffs took title to the Property;
(2) a Grant Deed recorded December 13, 2002, showing the transfer of the Property to Sheryl Kotz;
(3) the Deed of Trust recorded April 30, 2003, with Sheryl Kotz as trustor and Long Beach Mortgage Company as trustee and beneficiary (the 2003 deed of trust);
(4) an Assignment of Deed of Trust recorded February 27, 2009, assigning all interest under the 2003 deed of trust to the Bank by JPMorgan Chase Bank, as successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company;
(5) a Substitution of Trustee recorded February 27, 2009, under which the Bank substituted CRC as trustee under the 2003 deed of trust;
(6) a “Notice of Default and Election to Sell [the Property] Under Deed of Trust” recorded February 27, 2009;
(7) a Notice of Trustee’s Sale under the 2003 deed of trust recorded May 29, 2009; and
(8) a Trustee’s Deed upon Sale recorded July 6, 2009, under which the Bank, as foreclosing beneficiary, was the grantee of the Property.

plaintiffs admitted the description of the Property and that they purchased it on June 24, 2008, at a foreclosure sale; they disputed all of the remaining facts. They asserted that the Brignac declaration was without foundation and contained hearsay and that all of the recorded documents contained hearsay.

They [Plaintiffs-Homeowners] contended defendants failed to meet their burden of proof for summary judgment because their request for judicial notice and Brignac’s declaration were inadmissible hearsay. They further contended the notice of default and the notice of trustee’s sale failed to meet statutory requirements of California law. Finally, they asserted defendants lacked standing to foreclose because they had not produced even a copy of the promissory note.
Plaintiffs moved to strike the declaration of Brignac as lacking foundation and containing hearsay. They also opposed the request for judicial notice. They argued the recorded documents were all hearsay. Citing only the Federal Rules of Evidence and federal case law grounded on the federal rules, plaintiffs argued a court cannot take judicial notice of disputed facts contained in a hearsay document. Plaintiffs disputed “virtually everything” in the recorded documents, arguing one can record anything, regardless of its accuracy or correctness.

Thus, initial issues framed by the pleadings are whether the Bank was the beneficiary under the 2003 deed of trust and whether CRC was the trustee under that deed of trust.

plaintiffs contend the trial court erred in taking judicial notice of the disputed facts contained within the recorded documents. We agree.

“Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein. (Love v. Wolf (1964) 226 Cal.App.2d 378, 403.) “When judicial notice is taken of a document, . . . the truthfulness and proper interpretation of the document are disputable.” (StorMedia, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9 (StorMedia).)

Defendants also relied on Brignac’s declaration, which declared that the 2003 deed of trust permitted the beneficiary to appoint successor trustees. Brignac, however, did not simply declare the identity of the beneficiary and the new trustee under the 2003 deed of trust. Instead, she declared that an Assignment of Deed of Trust and a Substitution of Trustee were recorded on February 27, 2009. These facts add nothing to the judicially noticed documents; they establish only that the documents were recorded.
Brignac further declared that “[t]he Assignment of Deed of Trust indicates that JPMorgan Bank [sic], successor in interest to Washington Mutual Bank, successor in interest to Long Beach Mortgage Company, transfers all beneficial interest in connection with the [deed of trust] to Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2003-4.” (Italics added.) This declaration is insufficient to show the Bank is the beneficiary under the 2003 deed of trust. A supporting declaration must be made on personal knowledge and “show affirmatively that the affiant is competent to testify to the matters stated.”

At oral argument, defendants contended that the recorded documents were actually business records and admissible under the business record exception. We note that Brignac did not provide any information in her declaration establishing that the sources of the information and the manner and time of preparation were such as to indicate trustworthiness. (Evid. Code, § 1271, subd. (d).)5 Information concerning this foundational element was conspicuously lacking.6 Yet, this information was critical in light of the evidentiary gap establishing the purported assignments from Long Beach Mortgage Company to Washington Mutual Bank to JPMorgan Chase Bank. The records used to generate the information in the Assignment of Deed of Trust, if they exist, were undoubtedly records not prepared by CRC, but records prepared by Long Beach Mortgage Company, Washington Mutual and JPMorgan Chase. Defendants have not shown how Brignac could have provided information about the source of that information or how those documents were prepared. (See Cooley v. Superior Court (2006) 140 Cal.App.4th 1039

the timing of those purported assignments relative to the recording of those events on the Assignment of Deed of Trust cannot be found in the Brignac declaration or anywhere else in the record.
We also note that Brignac did not identify either the February 27, 2009 Assignment of Deed of Trust, or another key document, the February 27, 2009 Substitution of Trustee, as business records in her declaration. Rather, she referenced both documents in her declaration by stating that “[a] recorded copy” was attached as an exhibit. In light of the request for judicial notice, we take this statement to mean that the exhibits represented copies of records on file at the county recorder’s office.7

had the documents reflecting the assignments and the substitution been offered as business records, there would have been no need to request that the court take judicial notice of them. Accordingly, we reject defendants’ newly advanced theory.
Brignac’s declaration is lacking in yet another way. It is confusing as to the effect of the Substitution of Trustee. She declares, “The Substitution by Deutsche Bank National Trust Company as Trustee for Long Beach Mortgage Loan Trust 2003-4 substitutes the original trustee, Long Beach Mortgage Company for California Reconveyance Company.” Brignac’s declaration (and defendants’ statement of undisputed facts) can be read to state that the Bank substituted Long Beach Mortgage Company for CRC as trustee, rather than that CRC was substituted for Long Beach Mortgage Company. We must strictly construe this statement against the moving party. (Mann, supra, 38 Cal.3d at p. 35.) Even if we were to construe Brignac’s declaration to state that the Bank substituted CRC as trustee under the 2003 deed of trust, it would be insufficient to establish CRC is the trustee. A declaration that the Substitution of Trustee by the Bank made CRC trustee would require admissible evidence that the Bank was the beneficiary under the 2003 deed of trust and thus had the authority to substitute the trustee. As explained ante, defendants failed to provide admissible evidence that the Bank was the beneficiary under the 2003 deed of trust.

[SUMMARY JUDGMENT FOR DEUTSCH WAS REVERSED AND REMANDED. DEUTSCH, WHO PROBABLY DOESN’T EVEN KNOW THE CASE IS PENDING, IS SCREWED]


MAINE S. CT: HSBC AFFIDAVIT NOT TRUSTWORTHY – SUMMARY JUDGMENT REVERSED

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE

The fact that the true creditor doesn’t want to collect from homeowners is not a good reason to allow someone else to collect it. — Neil Garfield

FORECLOSURE CASE LAW – HSBC v. MURPHY, Maine Supreme Judicial Court, 2011 ME 59 (May 19, 2011)

“AFFIDAVITS SUBMITTED BY HSBC ARE INHERENTLY UNTRUSTWORTHY”

NOTABLE QUOTES:

“We have also repeatedly emphasized that a party’s assertion of material facts must be supported by record references to evidence that is of a quality that would be admissible at trial...This qualitative requirement is particularly important in connection with mortgage foreclosures where the affidavits submitted in support of summary judgment are commonly signed by individuals who claim to be custodians of the lender’s business records. Thus, the information supplied by the affidavits is largely derivative because it is drawn from a business’s records, and not from the affiant’s personal observation of events.” (e.s.)

“The foundation that the custodian or qualified witness must establish is four-fold:
(1) the record was made at or near the time of the events reflected in the record by, or from information transmitted by, a person with personal knowledge of the events recorded therein;
(2) the record was kept in the course of a regularly conducted business;
(3) it was the regular practice of the business to make records of the type involved; and
(4) no lack of trustworthiness is indicated from the source of information from which the record was made or the method or circumstances under which the record was prepared.

“Because we determine that the affidavits submitted by HSBC are inherently untrustworthy and, therefore, do not establish the foundation for admission of the attached documents as business records pursuant to M.R. Evid. 803(6), we vacate the judgment without reaching the substantive issues raised.”

“In Chase Home Finance LLC v. Higgins, 2009 ME 136, ¶ 11, 985 A.2d 508, 510-11, we stated that at a minimum, in support of any motion for summary judgment in a residential mortgage foreclosure action, the mortgage holder must include the following facts, supported by evidence of a quality that could be admissible at trial, in the statement of material facts:
•    the existence of the mortgage, including the book and page number of the mortgage, and an adequate description of the mortgaged premises, including the street address, if any;
•    properly presented proof of ownership of the mortgage note and the mortgage, including all assignments and endorsements of the note and the mortgage;
•    a breach of condition in the mortgage; •    the amount due on the mortgage note, including any reasonable attorney fees and court
costs;
•    the order of priority and any amounts that may be due to other parties in interest, including any public utility easements;
•    evidence of properly served notice of default and mortgagor’s right to cure in compliance with statutory requirements;
•    after January 1, 2010, proof of completed mediation (or waiver or default of mediation), when required, pursuant to the statewide foreclosure mediation program rules; and
•    if the homeowner has not appeared in the proceeding, a statement, with a supporting affidavit, of whether or not the defendant is in military service in accordance with the Servicemembers Civil Relief Act.”

It is, perhaps, stating the obvious that an affidavit of a custodian of business records must demonstrate that the affiant meets the requirements of M.R. Evid. 803(6)7 governing the admission of records…A business’s records kept in the course of its regularly conducted business may be admissible notwithstanding the hearsay rule if the necessary foundation is established “by the testimony of the custodian or other qualified witness.” M.R. Evid. 803(6). “A qualified witness is one who was intimately involved in the daily operation of the [business] and whose testimony showed the firsthand nature of his knowledge.”

EDITOR’S NOTE: There is no point of higher importance than that the evidence be heard and considered — and that it be tested for admissibility as evidence. This case artfully describes the process by which evidence is admitted. It also reveals the way the pretenders are avoiding the rules of evidence and getting away with it — until a court takes a close look.

The mistake in court that is replicated across the country is that lawyers, judges and pro se litigants are assuming evidence rather than going through the process of presenting it. The issue is not some technical two-step to avoid foreclosure. The issue is whether the requirements of law  have been met and therefore whether the party presenting itself as the would-be forecloser is in fact entitled to do so. Specifically, the mistake being made repeatedly is that lawyers are failing to object to affidavits that are inherently defective and failing to object to witnesses that either sign the affidavits or testify in court when they clearly do not possess the elements of a competent witness.

The reason they don’t have a competent witness is that their business records do not qualify for the business records exclusion to the hearsay rule. So they are merely presenting a warm body who tries to give the appearance of being a records custodian of records kept in the ordinary course of business and therefore carry a degree of credibility since they were not prepared for litigation.

That in fact is the opposite of what the banks have — they have only records prepared for litigation and no records that were kept in the ordinary course of business on any level, much less the chain of custody of records and knowledge, based upon actual transactions that were performed by the pretender. All the testimony and affidavits refer to transactions that did NOT involve the pretender forecloser. That is why this court, together with hundreds of courts across the country are coming to the conclusion that the affidavits are inherently defective (not credible), requiring an actual presentation of formal evidence in a trial or evidential hearing.

If the pretenders had the real goods, they would simply go forward with trials and presentation of formal evidence and the defenses and adversarial proceedings would quickly fade away as they won case after case on the evidence. But the truth is that the cases they are “winning” are without evidence and solely based upon presumptions and ignorance of the rules of evidence. Why is this important?

All this is important, because in a real trial, the pretender would have to allege and prove that it is a creditor who stands to lose money if they are not able to sell the home to mitigate their damages. Their problem is that they have no damages, the original transaction with the homeowner was fatally defective BECAUSE the pretenders wanted it to be that way and they figured they could get away with it. So far they are right. In most cases, the homeowner walks away without realizing his mortgage doesn’t exist, and the note is void, and that the obligation arising out of the funding of his loan is either paid, or the true creditor is more interested in collecting from the investment banker who sold garbage mortgage bonds than in trying to collect from individual homeowners. The fact that the true creditor doesn’t want to collect from homeowners is not a good reason to allow someone else to collect it.

Think about it. If the mortgages were valid, if the notes were enforceable, if the loans were properly underwritten, if the obligation of the homeowner was properly disclosed and linked with the investor lender — there would be no issue. In fact, there probably would be no foreclosures because the loans would have been viable and those that were not, would have been modified or settled. If the situation was “just a matter of paperwork” the paperwork would be cleaned up. But it isn’t. There are two primary ways to clean up the paperwork — go to the borrower and get a new signature or go to court and force the borrower to accept the new paperwork since the intent of the parties and the identification of the parties and the terms of transaction are clear as crystal.

The absence of any proceedings that would clean up the supposed paperwork mess gives rise to the obvious presumption that the banks, with their legions of smart lawyers, have not chosen to pursue those easy remedies. The only reason they would not choose a remedy that would clearly remove any doubt as to the validity of the loans and the truth of a default or delinquency is that they know they would lose if they had to present admissible evidence in court. In plain language they obviously know the loans are defective and paid in full and that they can’t win in court except by cheating. So they put a moral tag on it that the obligation is moral issue and that even if it is already paid off, and even if the the obligation a rose as a result of a fraudulent scheme, it should still be paid again. Is this any way to run a country?




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

RIGHT ON POINT ABOUT WHAT WE WERE JUST TALKING ABOUT

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.

SECURITIZATION If They Did It Right

SECURITIZATION If They Did It Right

Sometimes it IS easier to prove a negative than a positive. Your opposition has far more facts than you do and in due process, should be required to prove them up into a prima facie case using real evidence from competent witnesses, with real documents that nobody played with before initiating foreclosure.

So let’s take a look at how all this WOULD HAVE BEEN DONE, because most judges, even today are seeing the transaction through this lens.

  1. A homeowner or prospective homeowner would apply for refinancing or a purchase money first, second or Home Equity Line of Credit (HELOC).
  2. Loan Closing and Disclosures
  3. Details of the loan and loan closing, good faith estimate and closing statement are provided in some form to both the borrower and the investors who acknowledge receipt and acceptance in binding form. Presumably this would be done through the offices of the manager, agent or “Trustee” of the Special Purpose Vehicle, the name of which and contact information was disclosed to the borrower prior to closing and is confirmed at closing.
  4. Assignment of Loan into Pool, acknowledged by Borrower. Intermediaries and Investors disclosed to borrower/debtor. The lender is identified as the group of investors who have provided funding for the loan.
  5. Investors’ representative(s) identified and disclosed, with contact information.
  6. During the life of the loan, Borrower receives same statement as investor — receipts and disbursements allocable to the loan are allocated and applied to payments and loan balance. If third party payments are received for any reason by any of the intermediaries, who are all disclosed, the amount of the receipt and the method of allocation to the borrower’s loan is disclosed.
  7. If the Borrower falls delinquent, the Investors either decide as a group or through their representative, manager, agent or named Trustee whether to offer a workout or to foreclose. A modification or settlement would be negotiated with parties known to Borrower at closing or successors in interest which would have been disclosed immediately upon execution of closing documents between the investors, or part of them, and the successor(s).
  8. Any change in ownership of the loan would be a change in beneficiary and a change of Payee under the note, which would be the same party. Such change would be recorded in accordance with State Law. The change would not, under these circumstances leave the Borrower in doubt as to the amount of the obligation and whether the obligation was or should be affected by the third party transactions. If the third party transaction is intended contemporaneously with the closing with the Borrower, even if the third party is not identified, this fact would also be disclosed to the Borrower and the Investors.
  9. Insurance, credit default swaps, and other credit enhancements are identified and disclosed to the Borrower — pursuant to contractual provisions executed between the Investors as a Group or individually; provided however, the insurer or third party payor would have rights of subrogation in which upon payment under the referenced contract, they have acquired the interests of the insured parties, in order to mitigate their losses, a fact which was identified and disclosed to the borrower at the closing with the borrower.
  10. In this transparent series of transactions that are part and parcel of a single transaction consisting of many steps, the Borrower having accepted all the terms and conditions of the approval of the loan and the securitization of the loan, achieves no greater standing or defense in the event of default. The only exception would be malfeasance or misfeasance by the participants in the securitization chain wherein, disclosed or not, the loan, or part of it, was satisfied by direct or indirect payment to a representative with apparent authority over the loan and to act in the interests of the investor as an agent. If the loan was sold multiple times, neither the Borrowers liability nor the Initial investors’ asset would be effected. Any dispute would NOT include the Borrower whose obligation would be unaffected UNLESS the intermediaries receiving multiple payments for sale of the same loan or percentage interests in the same loan pool were allowed to retain the proceeds of said sale, inasmuch as this would mean that the liability of the borrower would either (a) be diminished by the excess payments or (b) spread out to investors that were not disclosed at the Borrower’s Loan Closing.
  11. In the event that the matter is referred to a foreclosure proceeding, the action (whether private non-judicial sale or public lawsuit in foreclosure) would be brought on behalf of the named investors, through their authorized representative, with a complete statement of accounting and exhibits showing the entire securitization structure and the balance due on the Borrower’s obligation, including any third party payments, whether those were allocated to payments, interest or principal, and what balance of the obligation exists. Also named as foreclosers would be those party who acceded to a subrogated interest in the Borrower’s loan in whole or in part.
  12. Since a judicial allocation would be required to determine the relative interests and priority of interests of the investors, successors and subrogated parties, it is probably not possible to initiate a non-judicial sale unless there existed an agreement between all of the parties as to those matters. Such an agreement would specifically describe the distribution of proceeds of sale, which party was entitled to enter a credit bid, and what would be done with the property if the bid resulted in a Trustee Certificate being issued giving title to the party that initiated the foreclosure.
  13. If the creditor parties were able to satisfy all the prerequisites of a non-judicial foreclosure sale and the sale took place under non-judicial circumstances, the Borrower would lose the right of redemption and the Creditor would lose the right to pursue any delinquency or deficiency resulting from the sale of the home.
  14. If the Borrower was the defendant or re-oriented as the defendant in a foreclosure lawsuit, then the borrower’s right to redemption would be retained, if State Law permits same, and the Creditor would, if State Law permits it, be allowed to pursue a deficiency judgment against the Borrower. The allegation for suing for damages to cover a deficiency would include the fact that the sale price was fair and reasonable under the circumstances. The prima facie case of the Plaintiff Creditor in those circumstances would require evidence from an appraiser or other credible resource that is admitted by the Court as competent testimony and evidence of the fair market value and the sales price. Submission of a written affidavit or document is sufficient to support the allegation, not insufficient to satisfy the requirements of establishment of a prima facie case. A competent witness with personal knowledge and recollection is required to establish the foundation of any document. Business records do not include records regularly prepared after the loan goes into default, if those records are offered to prove facts that relate to events prior to the default. SUCH RECORDS ARE ONLY ADMISSIBLE TO PROVE (WITH FOUNDATION FROM A COMPETENT WITNESS) FACTS, CIRCUMSTANCES OR EVENTS THAT OCCURRED AFTER DEFAULT.

Specialized Loan Services: “MISTAKE” Costs Elderly Couple Their Home

Editor’s Note: Besides the obvious, there are a number of not-so-obvious things to keep in mind.

  • The reason why they made the “mistake” is probably related to errors in procedure because they receive information from multiple sources. It is possible but unlikely that this was a normal error in posting. In Motion Practice and Discovery you would want to exploit such weaknesses to s how that there are too many “stakeholders” in the pie and that the procedures used to keep track of payments and status are intentionally obtuse to create plausible deniability when something like this happens with such horrendous results.
  • Ask yourself: why are all these players in the marketplace supposedly servicing different aspects of the loan? One for payments from borrower, another for payments from third party credit enhancements, another for federal bailouts, another to “substitute” for the original nominal party named at closing as the lender, another”Substitute” for the trustee, another to handle the delinquency, another to handle the default, another to handle the foreclosure sale etc.
  • Pretender lenders want the courts to handle foreclosures like “business as usual.” But business isn’t usual. When business was usual the bank that loaned the money was the bank that foreclosed on the mortgage or otherwise enforced the note. They should not be allowed to proclaim “business as usual” or standard operating procedure, or business records and affidavits, when business is far from usual.
  • Fabricated documents executed by people with dubious titles and even more dubious authority are being used to foreclose on property. The reason is simple: they don’t own the loan and they are successfully using the courts to steal from both the investors who advanced the money, the taxpayers to covered the money and the homeowners who advanced their home as collateral — all for a debt or obligation that no longer exists in the same form as the one presented at the borrower’s closing.
  • From www.themortgageinsider.net we find:

Specialized Loan Servicing LLC (SLS) is a mortgage servicer of residential mortgage loans primarily for other mortgage lenders. We uncovered three phone numbers, their website, and some pretty ugly customer complaints. We found an additional DBA name of The Terwin Group for SLS too.

Specialized Loan Servicing LLC Website and Phone Contacts

Specialized Loan Servicing LLC Website: https://www.sls.net/
Specialized Loan Servicing LLC Phone:
(800) 315-4757
(720) 241-7385
(720) 241-7364
Fax: (720) 241-7218
Address: 8742 Lucent Blvd. #300, Littleton, CO 80129

Specialized Loan Servicing LLC Review

Specialized Loan Servicing LLC services mortgage loans for other lenders and according to past customers, they have an ugly customer service track record.

When I search for complaints against Specialized Loan Servicing LLC, I found the worst complaints a mortgage service can get levied against them. Click here to see all the Specialized Loan Servicing LLC complaints listed in Google.

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Senior Couple Being Screwed Royally By Mortgage Servicer – Specialized Loan Servicers

H. Vincent and Theresa Price have lived in their home in Alameda for 32 years.  It’s where they raised their children.  They had always planned to leave it as their legacy.  They’ve NEVER been late on a mortgage payment… to this day! And they never wanted or asked for a loan modification.

Yes, everything was just fine at the Price home… until last September… when their mortgage servicer, Specialized Loan Services, made a mistake in their accounting department.  A simple mistake… they didn’t credit the Prices for having made their August and September mortgage payments, even though they most certainly did, just like they always had, and on time too.  Incredibly, less than five months later they had lost their home to foreclosure.

And today, although Mr. Price lies in a hospital bed with his wife at his side, they are scheduled to be LOCKED OUT by the Pasadena Sheriff’s Department pursuant to an order by the court.  If everything goes as planned by the mortgage servicer, when his doctors discharge him, the couple will be homeless.

How is such a thing possible?  Well, stay with me, because I promise you… this is not a story you’ve heard before.

According to the complaint filed in Los Angeles Superior Court, on August 1, 2008, Mrs. Price made the couple’s mortgage payment as she’s been doing for 32 years.  Certainly nothing remarkable about that.  A month later, when their September statement arrived showing that they owed their September payment, she made their mortgage payment again.  So far, so good, right?

It was right around September 29th that the Prices were notified that Specialized Loan Serivces had not received their August or September payments.  Mrs. Price assured the servicer’s representative that she had made the payments, and on time as always, thank you very much.

The servicer requested proof, so Mrs. Price sent in her bank statement showing that the payments had been made to Specialized Loan Services, and the amounts were deducted from her account on August 3rd and September 4th, respectively.  The Specialized representative called back to say they needed more proof, so she sent them a more detailed transaction report showing the payments having been made.  Still, not enough according to Specialized.  So, Mrs. Price went to her bank and had them print out her account’s record of the payment being made to Specialized and sent that document to the mortgage servicer.

The next call from Specialized came from a different representative of the servicer.  He informed Mrs. Price that they had not yet located her payments, but that her proof was acceptable and that they expected to soon. Meanwhile, he assured her, the servicer was placing a waiver on the October and November payments, a show of good faith, if you will, until the missing payments were found.  After a couple of weeks passed with no further word from Specialized, the Prices called to inquire as to the status of the situation.

They spoke with a woman who said her name was Lynette.  She told the Prices that their account was showing “CURRENT” for August, September, October and November, that they should make their next payment on the first of December, and that a new accounting statement would be sent out.

When no new statement had arrived two weeks later, the Prices called Specialized yet again.  It was November 23, 2008 and this time they spoke with another representative of the mortgage servicer, “Ben”.

They asked Ben about the new statement that was to have been sent out, but Ben had no idea what they were talking about.  He stated that he wasn’t aware of any sort of arrangement regarding the couple’s August and September payments, and further, now that they were four months late, if they did not make the delinquent payments and associated late charges within the next 24 HOURS… Specialized Loan Services WOULD FORECLOSE ON THE PROPERTY.

You can just imagine what happened next.  The Prices began calling the servicer asking to speak with the three representatives that had been speaking with over the last several months… the ones that had told them about the waiver and had been trying to find the missing payments.  They called… and called… and no one answered or returned their calls.  They then called the servicer’s Vice President of Customer Service… and… nothing.  No return call… nothing.

It was January when the Prices received their first piece of written communication from Specialized… it was a Notice of Default and Election to Sell.  Understandably, the couple was speechless.  How could this happen?  How was this possible?

The Prices were referred to a lawyer who said he was also a minister; a man identifying himself as a Mr. Reginald Jones.  Mr. Jones told the Prices that he was highly experienced in these matters and that he would file a lawsuit as soon as possible.  The couple would later learn that Mr. Jones was not an attorney.  What he had done was go into court, appearing as a plaintiff by claiming that he had an interest in the property, and file a frivolous lawsuit, which was later dismissed by the court…. as it might go without saying.

Now, having been defrauded by the so-called lawyer-minister, the Prices were forced to defend an unlawful detainer action in pro per, meaning without an attorney.  Unfortunately, they were not successful as they were told that they could not “litigate title in a summary proceeding,” which as I’m quite sure everyone would agree, they clearly should have known. They were advised that they should file an injunction, which they did, but unfortunately they mistakenly filed their injunction in the “wrong court,” and don’t we all hate it when that happens.

(I’m sorry for the sarcasm, but this is the most outrageous travesty of justice to which I’ve ever been exposed.)

The Prices searched and finally found an attorney they could trust, Zshonette Reed of the firm Lorden Reed in Chatsworth, California, but now it was only days before the Pasadena Sheriff would be locking the Prices out of their home potentially forever.  As quickly as was possible, Ms. Reed prepared the legal documents required for the filing of a Temporary Restraining Order, or TRO, and with her clients at her side, and confident that this horrendous injustice would not be allowed to prevail, she appeared in Superior Court yesterday, September 15, 2009.

The Price home is to be locked up by the Pasadena Sheriff today, although because that office is closed for a special training day today, the event has been moved to tomorrow.

Astonishingly, the judge denied her motion for a TRO, ruling that he had no jurisdiction over the judgment that had been entered against the Prices in the unlawful detainer court.  So, immediately she and her clients proceeded to the unlawful detainer court to ask that judge, in layman’s terms, to put a stop to the madness.

It may be hard for a reader to believe, but that judge also refused to provide the Prices any relief, because he said that the attorney could not litigate title in that court.  It was a classic Catch-22.  Ms. Reed couldn’t get relief from the Superior Court because that court said that it had no jurisdiction over the unlawful detainer court, and the unlawful detainer court wouldn’t provide relief because you can’t litigate title anywhere but in the Superior Court.  Ms. Reed begged the judge, explaining that her client’s home was to be locked up by the sheriff the very next day.  She needed time to prepare to present her client’s case to the appellate court.  The answer was still no.

Ms. Reed and her clients left the courthouse shocked and scared.  Mr. Price was clearly distressed as was his wife, and he was having a hard time breathing so he went to sit down on a stoop.  He went into cardiac arrest right there in front of the courthouse and was rushed to the hospital where he is today with his wife by his side.

Meanwhile, the Pasadena Sheriff is scheduled to lock the couple out of their home today, although that looks like it won’t be until tomorrow due to the department taking today off for special training.

Can you even imagine the horror?  After 32 years living in your home, raising your family, never being late on a mortgage payment… and then this?  It’s unthinkable.

And it cannot be allowed to happen to the Prices or anyone else.

The worst part is that, although this is certainly an extreme case, it is far from being the only example of mortgage servicers and banks disregarding the law, and abusing homeowners.  Why do they do it?  I don’t know… because they can, comes to mind.

How can a homeowner hope to go up against a bank or mortgage servicer?  They can’t.  It would seem that even the President of the United States and the United States Treasury is having trouble getting these companies to behave like human beings.

It’s time that the people of this country come to understand what’s happening here.  Past time.

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