C&E Strategy is the beginning of a successful attack on the claimed enforcement of a mortgage or deed of trust.

Attacks on technical deficiencies of assignments of mortgage is a great place to start, but it is not the finish line.

This is a follow up with the radio show we did last week on cancellation of assignments of mortgage, and upon successful cancellation of the assignment(s), the further cancellation of the notice of substitution of trustee, the notice of default, the notice of sale, and/or the lis pendens and foreclosure lawsuit.

The C&E (Cancel and Expunge) strategy has some good and even essential attributes of the defense and counterattack on the would-be enforcer of a mortgage. But here are some potential weak points. If you are not ready for them the strategy will fail.

see https://livinglies.me/2019/04/11/cal-3d-dca-wrongful-foreclosure-you-can-cancel-the-assignment-notice-of-default-notice-of-sale-and-reverse-the-sale/

You are still on the right track — especially where the notary certifies that the person signing had authority to do so. That is simply a lie. The notary has no idea. The problem with the C&E strategy is that it appeals to lay people and not lawyers.

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The lay people like it because it sounds like a magic bullet that enables them  to avoid litigation over whether the claimant is real and whether the claim is real. The lawyers are reluctant because they know that courts will almost always side with the party who appears to be losing the benefit of an actual bargain in which the claimant paid money. It’s all about money, whether you like it or not.

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The reality is that they are both right. And the place to start is always at the beginning — when and where and why the offending document was executed.

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Lay people don’t understand what it means to have a facially valid document. They want to get a court to get rid of the whole document (and the presumed transaction behind it, whether it exists or not) because of some perceived invalid procedure in its execution. The world doesn’t work like that, nor should it.
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The court looks at the substance. If someone paid for the loan they don’t lose their money because of a signature that is missing or in the wrong place. They are at least given opportunities to correct errors. If the errors are not corrected then that is a different matter. Even a frivolous lawsuit can result in a judgment and levy against property if the defendant failed to answer or appeal. That is the way the system works.
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The court might temporarily decline to enforce an instrument because it does not comply with statutory requirements for facial validity — but it won’t invalidate the presumed transaction UNLESS the presumed transaction is either proven not to exist or the presumed transaction is not proven to exist. There is a difference between those two. Both involve proof. The difference is in who has the burden of proof.
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Even with a deed lacking a witness —- the deed is valid as between the grantor and the grantee and anyone who knows about it. There are differences between states but the substance is the same.
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If Person A executes a deed to Person B and Person B pays Person A then the court, in equity, will not allow person C to exercise the rights of a title owner in fee simple absolute unless Person C also paid Person A (assuming person A had title) AND the state has a race to record statute. If the state is not a “race” state, then the deed is valid against all who have notice of it.
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At the end of the day courts will not ordinarily issue an order in which they think a party is getting cheated out of the benefits of a legitimate deal. The dominant public policy is preservation of contracts and legitimate transactions first, not the strict adherence to statutory requirements in execution of contracts or conveyances. So the only defense that works with consistency is the one in which either the claim or the claimant’s existence is not supported by sufficient evidence. This is the gray area that lay people don’t want to hear about.
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But all that said, the attack on the assignments for lack of statutory requirements is correct in its strategy and its goals. The reason that is correct is not that the document is just defective in some technical way. The reason it is effective strategy is (a) the court should not enforce it until the needed correction is effectuated and (b) they can’t correct it without revealing the creditor who owns the debt.
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The 20 year effort to conceal the identity of anyone who owns the debt is testimony to the fact that the investment banks don’t want anyone to know. The answer would be highly complex and probably involve matters of novel fact patterns and law.
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By selling off the risk of loss did the investment bank thus sell the debt? If they sold the debt, but did not sell the rights to enforce the debt, note or mortgage, did the investment bank retain the right to enforce?  If so, that probably conflicts with all law in all jurisdictions that requires that the enforcer of a mortgage be the owner of the debt. If the enforcement is allowed what assurances does the court have that the proceeds of foreclosure will go to the benefit of the owner of the debt, however that ownership is defined?
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While the courts have assiduously avoided addressing such questions they are moving inexorably in the direction of being required to address them and to finally decide what to do with the confusion and chaos created not by borrowers, but by the investment banks who sought to and did in fact create profits that were multiples of the amount loaned without paying the borrower for use of his/her name, signature or reputation.
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So the attacks on technical deficiencies of assignments of mortgage is a great place to start, but it is not the finish line.

 

Partial transcript of Radio Show — Cancellation and Expungement (C&E) of Assignment of Mortgage

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Hi Neil Garfield here and this is Thursday April 11th, 2019. Transfer of ownership of a debt means a purchase and sale of the debt and with it, in the form of an assignment of mortgage, the right to enforce the debt by judgment for damages or foreclosure. Bill Paatalo will join me in a moment to discuss cancellation of the assignment and related documents. He also joins me in seasonal allergies so that should be fun.
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A couple of short notes to our listeners. Now is the time to start a writing campaign to members of congress as the CEOs of the mega banks show up on capital hill for the first time since the 2008 crisis. Those members of congress don’t know what they are talking about or how to think about regulation of the mega banks and they won’t know unless you tell them. Securitization as practiced was a sham and the mega banks have taken control of the financial system with no controls. Start writing letters and let them know what you think about the banks and the failure of the government to keep the marketplace safe.
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Second, speaking of not acting fairly and legally toward borrowers and consumers, the 11th Circuit Circuit Court of  Appeals has ruled that emotional distress damages and punitive damages can be recovered by mortgage borrowers under the Fair Credit Reporting Act. So you have the FDCPA, RESPA, TILA, and the FRCA all with potential damage claims and all possible counts in a lawsuit or in affirmative defenses for recoupment.
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Back to tonight’s subject. Cancellation of assignment and related documents.
Yes you can seek to cancel an assignment of mortgage but only with a court order. And you can cancel a substitution of trustee, you can cancel a declaration of default and you can cancel a notice of sale if you reveal to a judge who agrees that the attorneys for the named claimant failed to establish that the claimant exists or failed to show that the named claimant received an effective transfer of the mortgage or deed trust. Tonight Bill Paatalo joins me to discuss the intricacies of the Rainn decision in California.
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Lest you missed it, the object of the defense is to reveal the holes in the claimant and reveal the holes in the claim. My constant advice to litigants is not to assume the burden of proving that the claimant never existed or that the claim isn’t valid. In the current judicial climate the best you can realistically hope for is that the claimant has no case, not that there is no debt, note or mortgage.
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The subtle difference between taking the defensive position and trying to take the offensive position when you can’t prove what you want to prove without the cooperation of your opposition makes all the difference between winning and losing.
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But before we get started I want to make one thing perfectly clear — this Rainn case does not stand for the proposition that you can cancel the mortgage or deed of trust. It stands for proposition that events AFTER the mortgage or deed of trust might be void and therefore any written instrument referring to such events can be cancelled. If it didn’t happen you can’t say it did. That is all.
And the Rainns Guana decision is also not a final decision even in the 3DCA of California because it was not rendered with permission to publish. At most it is persuasive authority and it is persuasive because of the logic of the opinion not because the decision is binding. So understanding the logic is essential to using the strategy of cancellation and arguing it effectively in court.
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Lastly this is not a quiet title action. You are not removing the encumbrance — the mortgage or the deed of trust. So you are not going to get clear title free of the encumbrance. What you can get is to be free of enforcement and eventually, much later, quiet title when nobody else shows up to enforce the debt, the note or the mortgage or deed of trust.
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The way debt is transferred according to the laws of every state of the union is by paying value to the owner of the debt. And once value has been paid, the debt is transferred. So it should not, theoretically, be sold again and transferred again. There is no other way. A paper transfer alone has been litigated many times. It always comes out the same way. An assignment of mortgage without transfer of the debt is a nullity.
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Litigants get lost in the weeds when the attorneys for the banks and servicers get the attention of the court directed to enforcement of the note, where a transfer can be effectuated without transfer of the debt. These clever attorneys point to the fact that the borrower stopped paying as if that’s all there is. That’s how they win.
When you get the attention of the court directed back to the law of the state which adopts the UCC Article 9 provisions requiring value be paid for the debt and where doctrine states that transfer of the mortgage without the debt are nullity, then it is the homeowner who wins.
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If the debt was not purchased contemporaneously or before the assignment of a mortgage then the assignment is a nullity and a nullity means that it is void. If it is void it must be cancelled and removed from the chain of title. That is what the court order does.
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So they are presenting the claimant as a party authorized by law to enforce the debt on behalf of the owners of the debt. But without asserting for whom they are enforcing the debt they have not presented any true claimant.
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You have two shots: one to reveal that there is no claimant asserted because of the name they used and then to assert that there is no claim held in the name of the claimant. The goal is to reveal that the evidence is missing that would show that the claimant exists, or the claim exists, or that the claim exists but there is no foundation evidence to show it is owned by the claimant or any combination thereof.
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The investment bank can’t say they are enforcing on behalf of themselves, and they don’t even though they funded the origination or acquisition of the debt. They don ’t say that because they have long since divested themselves of any ownership of the debt several times over. And so no investment bank has ever shown up in foreclosure litigation — even though they were the real party in interest at the time of the loan origination or acquisition.
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Normally the only practical defense to foreclosure is payment. But payment has already been made to the investment bank that fronted the money, so you need to show the gaps in their case without taking on the burden of proving facts you can’t prove.
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In short, the only way your opposition can win is by successfully directing a judge’s attention to the fact that the borrower stopped paying rather than the fact that the named claimant or plaintiff ever had a claim to collect or enforce the debt. That is how the investment banks hide.
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The only way you can win is be redirecting the judge’s attention back to whether the claimant exists, the claim exists and the claimant is the owner of the claim. If you do that successfully the proof fails.
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Remember that is more likely than not that if your house is foreclosed and sold, the proceeds will NOT be used to pay anyone who owns your debt. So stop feeling shaky about defending. Shame is undermining  fairness in the justice system when it comes to foreclosures.
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Remember you can always come back and listen to the show again or send it to a friend by going to blogtalkradio.com and looking up the Neil Garfield Show
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  I am broadcasting live from Duval County Florida and this show is brought to you by the livinglies blog, GTC honors, Lendinglies, AMGAR, and the Garfield firm, and this show is specially brought to you because of donations to the livinglies blog from listeners like you. Thank you. And for those of you who are not contributors we ask that you HIT THE DONATE BUTTON ON THE THE BLOG OR call 954-451-1230 or
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Bill Paatalo is an accomplished and well respected private investigated who turned his skills toward the foreclosure marketplace many moons ago.  He has made or confirmed all the major discoveries and revelations in the foreclosure world. Bill is a friend and someone whose work I continue to admire. Welcome Bill.
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Cancellation and Expungement. Al West seminar. Every state has a provision that allows for declaratory action to remove wild deeds and other documents in the chain of title that should not be there . Lower burden of proof than proving fraud.
Go after the notary and the notarization. Attack the malfeasance in a particular document. You are attacking the validity of the document.
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File in State court. No shotgun approach. Find a party on that document who is in the state. Sue them not parties who are out of state and can remove to Federal court on diversity jurisdiction.
Backdating, robosigning etc. slander of title can arise from void assignment. NOTS, NOD, NOS all void.
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The fact remains that if the origination or funding of the loan was accomplished through funding by an investment bank then only that investment bank can claim ownership of the debt and therefore rights to enforce the mortgage or deed of trust. It is not true that a person who is authorized to enforce a note is automatically entitled to enforce the mortgage. They had to pay value to acquire the debt.
So it stands to reason, Bill, that nobody in the so-called chain of title would have paid any party other than the investment bank for ownership of the debt and thus entitlement to enforce the mortgage. Am I right?
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The strategy is to reveal the gaps in the proof by showing lack of foundation, lack of personal knowledge and lack of truth. You don’t accept the burden of proof by alleging facts that you cannot prove. The strategy is to focus on the prima facie case that the foreclosing party needs to make to support the foreclosure. Poke holes in that and you win.
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For an assignment to be void you either need to reveal that the person making the assignment didn’t own anything or that  the assignment was just on paper and not supported by an actual purchase transaction in which the debt was acquired from someone  who owned it.. It’;s simple logic.
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And if the assignment is void because there was no transfer of the debt then so is the notice of substitution of trustee, the notice of default and the notice of sale and the lawsuit in judicial states, right? So Bill, how do we reveal that the assignment is void and therefore that all documents relying on the assignment were also void and should be cancelled?
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NOTES:

California Probate Code 24 – “Beneficiary” means a person to whom a donative transfer of property …

Current as of: 2017 | Check for updatesOther versions
“Beneficiary” means a person to whom a donative transfer of property is made or that person’s successor in interest, and:
(a) As it relates to the intestate estate of a decedent, means an heir.
(b) As it relates to the testate estate of a decedent, means a devisee.
(c) As it relates to a trust, means a person who has any present or future interest, vested or contingent.
(d) As it relates to a charitable trust, includes any person entitled to enforce the trust.
(Enacted by Stats. 1990, Ch. 79.)

The 2018 Florida Statutes

Title XLII
ESTATES AND TRUSTS
Chapter 736 
FLORIDA TRUST CODE
View Entire Chapter
F.S. 736.0103 Definitions.—Unless the context otherwise requires, in this code:
(4) “Beneficiary” means a person who has apresent or future beneficial interest in a trust, vested or contingent, or who holds a power of appointment over trust property in a capacity other than that of trustee. An interest as a permissible appointee of a power of appointment, held by a person in a capacity other than that of trustee, is not a beneficial interest for purposes of this subsection. Upon an irrevocable exercise of a power of appointment, the interest of a person in whose favor the appointment is made shall be considered a present or future beneficial interest in a trust in the same manner as if the interest had been included in the trust instrument.
(18) “Settlor” means a person, including a testator, who creates or contributes property to a trust. If more than one person creates or contributes property to a trust, each person is a settlor of the portion of the trust property attributable to that person’s contribution except to the extent another person has the power to revoke or withdraw that portion.
(15) “Property” means anything that may be the subject of ownership, real or personal, legal or equitable, or any interest therein.
(16) “Qualified beneficiary” means a living beneficiary who, on the date the beneficiary’s qualification is determined:
(a) Is a distributee or permissible distributee of trust income or principal;
(b) Would be a distributee or permissible distributee of trust income or principal if the interests of the distributees described in paragraph (a) terminated on that date without causing the trust to terminate; or
(c) Would be a distributee or permissible distributee of trust income or principal if the trust terminated in accordance with its terms on that date.
EXAMPLE: I NAME YOU AS BENEFICIARY OF A TRUST THAT IS INTENDED TO OWN A HOUSE PURSUANT TO A TRUST AGREEMENT BETWEEN ME AS SETTLOR AND A NAMED TRUSTEE WHO AGREES TO SERVE AS TRUSTEE. THAT DOESN’T TRANSFER THE HOUSE TO YOU. IT’S ONLY IF I TAKE THE ADDED STEP OF TRANSFERRING THE HOUSE BY RECORDED DEED INTO THE TRUST IN THE NAME OF THE TRUSTEE FOR THE TRUST THAT YOU MIGHT HAVE AN INTEREST IN THE HOUSE. AND EVEN THEN IF I DON’T OWN THE HOUSE NONE OF IT MATTERS AND IT IS ALL VOID.
IT IS THE APPEARANCE OF ALL THIS PAPER THAT CONFUSES JUDGES, LAWYERS, BORROWERS AND CONSUMERS GENERALLY.
LendingLies is here to help you as needed. Just go to www.lendinglies.com or send us a Registration statement for a free preliminary review.

Trustee May Not Delegate But Usually Does

Most “Trustees” or Substitute Trustees get a package from some unknown source with everything already prepared and instructions to proceed. That is the exact opposite of the protections intended by the legislature in this statute under Arizona law. Your state is probably the same.

33-803.01. Trustee of trust deed; delegation of duties

A. A trustee shall not delegate the following duties:

1. The preparation and execution of any of the following:

(a) The notice of trustee sale.

(b) The cancellation of notice of sale.

(c) The trustee’s deed upon sale.

2. The receipt and response to requests for reinstatement or payoff amounts.

B. This section does not prohibit the trustee from using clerical or office staff employed by the trustee and under the trustee’s direct and immediate supervision to assist in the duties prescribed by subsection A.

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