The Truth about US Bank

Posted on June 14, 2019 by Neil Garfield
Lawyers and pro se litigants continue to ignore the basics when mounting a challenge to foreclosures in which US Bank is asserted to be a trustee of a name that is then treated as though it was trust or REMIC Trust. If you look closely, the name is word salad, containing references or names to several named entities and other categories of entities.
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 A typical presentation asserts no presence of US Bank in its individual capacity, so the institutional implication is false. It is appearing strictly in a representative capacity and an court award of costs against the “claimant” would not, according to US Bank, attach liability to US Bank but to rather whoever was being represented by US Bank “as trustee.” On that we have word salad presenting many options such as
  1. US Bank, as trustee
  2. as successor to Bank of America, as trustee
  3. as successor by merger to LaSalle Bank, as trustee
  4. for the holders of certificates entitled
  5. XYZ Corp.
  6. Mortgage pass through Certificates series 200x-a1

If anyone can tell me  from that description who would be liable for costs I applaud them. But I can tell you who would pay the costs regardless of actual legal liability. It would be a company claiming to be an authorized servicer who in fact is getting the money from the investment bank through conduits.

The issue of what if anything was transferred between LaSalle Bank and Bank of AMerica and thus what if anything was transferred between Bank of America and US Bank has actually not been litigated.

My answer is that LaSalle Bank had no duties as trustee, was subjected to the impact of three mergers — ABN AMRO, Citi and Bank of America — and that a trustee only exists for a legally existing trust in which the subject matter (Loan) was entrusted to the trustee for administration of the active affairs of the “trust.” With none of those elements present, nothing could have been transferred.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 954-451-1230. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM 
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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As to U.S. Bank, Deutsch, BONY etc. there are two categories that must be considered. If US Bank is named in a Pooling and Servicing agreement then the reasons for its non existence (or more specifically lack of legal presence in court or any other foreclosure proceeding) in fact and at law remain as previously stated in prior articles —- but exclude one central issue that has not been litigated.
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If US Bank has been asserted as successor to another alleged trustee then all sorts of other issues pop up. The main one that has not been litigated is whether the position of trustee can be transferred or sold like a commodity without consent of the beneficiaries or some other authorized party.
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In truth the only real “beneficiary” would be the investment bank — if only the trust legally existed. And in truth the investment bank indemnified US Bank from liability in exchange for the use of the US Bank name to create the illusion of institutional involvement.
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And in truth the only real party in interest is the investment bank, and if the trust actually existed the investment bank would be the only real beneficiary in an arrangement in which the trust name is used as a shield or sham conduit to hold bare naked legal title to paper that fabricates the illusion of debt ownership, much like MERS.
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And of course the whole use of the term “successor” is constantly used to distract lawyers, judges and homeowners from the fact that the previous party had no interest or right to administer, own, or enforce the subject debt, note or mortgage — unless they are able to produce authorization from the investment bank.
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But the investment banks have been loath to even hint that they could or would issues such authorization because that would be an admission that they were or are the real party in interest — an admission which probably would subject them to many levels of liability for fraud and statutory violations.
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It may well be that the pursuit of court costs and discovery available to do that might be the achilles heel of this house of imaginary cards. It would reveal the absence of any party to pay them, which would reveal the absence of a claimant, which would reveal the absence of a claim which would reveal the absence of a client, which would reveal false representations by the foreclosure mill.

Filed under: CORRUPTION, discovery, Discovery -Subpoena, evidence, expert witness, Fabrication of documents, foreclosure, foreclosure mill, forensic investigation, investment banking, Investor, jurisdiction, legal standing, Pleading, prima facie case, securities fraud, Servicer, sham transactions, standing, STATUTES, TRUST BENEFICIARIES | Tagged: , , , , , , , | 15 Comments »

Unworthy Trusts

Posted on March 12, 2019 by Neil Garfield

The simple fact is that the REMIC trusts do not exist in the real world. The parties named as trustees — e.g. US Bank, Deutsch, BONY/Mellon — are trust names that are used by permission through what is essentially a royalty agreement. If you are dealing with a trust then you are dealing with a ghost.

Discovery is the way to reveal the absence of any knowledge, activity or reports ever conducted, issued or published by the named Trustee on behalf of the “trust” or the alleged “beneficiaries.” Take deposition of officers of the named Trustee. Your opposition will try to insert a representative of the servicer. Don’t accept that.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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For purposes of clarity I am using US Bank as an example. It is the most common.
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US Bank has NO information about the trust, the servicer or the account for the borrower. Thus the purpose of any deposition of any officer of US Bank should be solely to establish the absence of events and data that should otherwise be present.
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This is why as counsel for the lender, lawyers will not recommend going forward with the refinancing. Your opposition is asking you to accept their word for the “fact” that they represent a creditor who is entitled to payment not just because there is paperwork indicating that, but because they are really owed the money.
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Knowing the truth is a basis for establishing gaps and revealing it to the trier of fact but should NOT be a basis of making allegations that you will be required to prove. It’s a thin line and the lawyer needs to be aware of this division, or else you will end up with a burden of proof you cannot sustain and unanswered questions that prevent the closing of refinancing — unless the “source” of refinancing is from another player in the world of securitization.
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The fact that securitization players would accept the paperwork is only testament to the willingness of all securitization players to engage in such conduct as to maintain an illusion of legitimacy. Other lenders rely on such conduct at their peril. Other lenders do not receive the reward from multiple resales of the same debt.
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So in your inquiries to officers of US Bank you want to establish the following, in order to force the true creditor to come forward (if there is one):
    1. US Bank has no duties normally attributed to a trustee.
    2. The “US Bank” name is basically a royalty arrangement in which the name can be used but there is no further substance to its “role” as trustee.
    3. There is no bank account established or maintained by US Bank for the alleged Trust.
    4. US Bank has never received any money through any means in connection with the subject debt. The borrower’s payments to the servicer have never been received by US Bank on its own behalf, as conduit or as trustee for any trust.
    5. In prior foreclosures involving the same trust, US Bank did not receive the proceeds of the foreclosure sale.
    6. US Bank has no reason to expect that it would receive the proceeds of a foreclosure sale involving the subject debt.
    7. US Bank has no mechanism in place where the payment of money to satisfy the claimed debt would be actually deposited into a bank account for the trust that is controlled by US Bank.
    8. The beneficiaries of the trust do not receive any money from borrower payments, foreclosure sales, or prepayments, refinancing or any other monetary transactions. US Bank probably does not know if this is true or not. US Bank has nothing to do with what, if anything, the “beneficiaries” of the “trust” receive or don’t receive.
    9. US bank has no information regarding the identity of the beneficiaries of the “trust.”
    10. US Bank has no information regarding whether any party is a beneficiary of the “trust”.
    11. US Bank has no information regarding the existence of the trust other than the documents forwarded to it for purposes of the deposition.
    12. US Bank does not keep or maintain accounting records pertaining to the trust.
    13. US Bank does not keep or maintain any records or documents pertaining to the trust.
    14. US Bank does not issue reports to anyone regarding the trust or the subject debt, note or mortgage.
    15. US Bank does not include information relative to the business activity of the “trust” or the subject debt, note or mortgage in any report to any regulatory authority, Federal or State.
    16. Except for fee income, US Bank does not include information relative to the business activity of the “trust” or the subject debt, note or mortgage in any financial report published to the public or to any regulatory authority, Federal or State.
    17. There is no “trust officer” appointed by US Bank to actively manage the affairs of the “trust.”There is no “trust officer” appointed by US Bank to actively manage the affairs of the subject debt.
    18. US Bank neither accepts nor gives any instructions to anyone regarding the affairs of the “trust.”
    19. US Bank neither accepts not gives any instructions to anyone regarding the subject debt, note or mortgage.
    20. US Bank has no power to either accept or give instructions regarding the trust or the subject debt.


Keep in mind that there are experts who believe that the debt no longer exists, and that you are dealing with the ghost of a creditor and the ghost of a debt. This is because the debt was resold multiple times and redistributed to multiple parties (new investors) under the guise of different instruments in which the value of the instrument was ultimately derived not from the debt, in actuality, but from the marketplace where such isntruments are traded. This is an ornate interpretation that has the ring of truth when you examine what the banks did, but this theory will not likely be accepted by any court.

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That theory explains why when appellate and trial courts asked the direct question of whether the creditor can be identified the answer was no. The response was that the courts stopped asking.
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But the issue at hand is whether, pursuant to state law governing foreclosures, a creditor is before the court possessing a valid claim to collect on a debt. If there is, then that creditor is entitled to payment. If there is not, then the claimed “creditor” is not entitled to either payment or foreclosure. 

Filed under: burden of persuasion, burden of pleading, BURDEN OF PROOF, CORRUPTION, discovery, Discovery -Subpoena, evidence, Fabrication of documents, foreclosure, foreclosure mill, investment banking, Investor, legal standing, MBS TRUSTEE, Mortgage, prima facie case, Servicer, standing, STATUTES, TILA, TRUST BENEFICIARIES | Tagged: , , , , , , , , | 11 Comments »

Stop Referring to Defaults as Something Real

Posted on March 11, 2019 by Neil Garfield
Referring to the default as real, but with an explanation of how it is subject to rationalization or argument, completely undermines your argument that they have no  right to be in court, to collect, to issue notices or initiate foreclosure. 

…when you refer to the default, you should refer to it as a false claim of default because at no time was Deutsch or any trust or any group of investors ever receiving payments from you as borrower. Nor did they have any contractual right to expect such payments from you as borrower. So Deutsch didn’t suffer any default and neither did the investors who own certificates that are not ownership interests in the debt, note or mortgage. And Deutsch won’t get any proceeds if the property is subjected to a foreclosure sale.

Questions to the servicer about how, when and where they made payments to Deutsch, or Deutsch as Trustee, or any trust, or any group of investors holding certificates will reveal their absence from the money trail. No such payments exist nor will they ever exist.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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I take issue with the practice of referring to “the default.” When someone refuses or stops paying another person that does not automatically mean that a default exists. A default only exists if the the payment was due to a specifically identified party and they didn’t get it. Failure to pay a servicer is not a default. Failure to pay a servicer who is sending your payments to a creditor IS a default.
Since the fundamental defense for borrowers that wins cases is that the claimant has no right to be in court, it seems wrong to refer to”the default.” It should be “the claimed default.”
If your refusal to make payment was in fact a default as to Deutsch as Trustee of a real trust or as authorized representative of the certificate holders (they never make that clear), then all of your arguments come off as technical arguments to get out of a legitimate debt. You will lose.
On the other hand if your position (i.e., your denial and affirmative defenses) is that Deutsch is not a party on its own behalf and that it is being named by attorneys as being in a representative capacity for (a) a trust that does not exist or (b) for holder of certificates that do not convey title to the debt, note or mortgage and are specifically disclaimed, then you have a coherent narrative for your defense.
And if you further that argument by asserting that Deutsch has never received any payments and does not receive the proceeds of foreclosure on its own behalf nor as trustee for any trust or group of investors and will not receive those proceeds in this case then you push the knife in deeper.
So if Deutsch is not appearing on its own behalf and the parties that the lawyers say it is representing either don’t exist or are not identified, then the action is actually being filed in the name of Deutsch but for and on behalf of some other unidentified party who may or may not have any right to payment.
What is certain is that Deutsch is being represented as the owner of the loan when it is not.  The owner of a loan receives payments. Deutsch never receives payment from anyone and the investors never receive payment from the borrowers. If they did the servicer would have records of that. 
So when you refer to the default, you should refer to it as a false claim of default because at no time was Deutsch or any trust or any group of investors ever receiving payments from the homeowner as borrower. Nor did they have any contractual right to expect such payments from you as borrower. So Deutsch didn’t suffer any default and neither did the investors who own certificates that are not ownership interests in the debt, note or mortgage. And Deutsch won’t get any proceeds if the property is subjected to a foreclosure sale. 
If Deutsch didn’t suffer any default it could not legally declare one. If the declaration of default was void, then there is no default declared. In fact, there is no default until a  creditor steps forward and says I own the debt that I paid for and I suffered a default here. But there is no such party/creditor because the investment bank who funded the origination or acquisition of the loan has long since sold its interest in the loan multiple times.
Thus when lawyers or as servicer or both sent notices of delinquency or default they did so knowing that the party on whose behalf they said they were sending those notices had not suffered any delinquency or default.
When homeowners refer to the default as real, but with an explanation of how it is subject to rationalization or argument, they completely undermine their argument that they have no  right to be in court, to collect, to issue notices or initiate foreclosure. 
And remember that the sole reason for foreclosures in which REMIC claims are present is not repayment, because that has occurred already. The sole reason is to maintain the illusion of securitization which is the cover for a PONZI scheme. The banks are seeking to protect “profits” they already have collected not to obtain repayment. That is why a “Master Servicer” is allowed to collect the proceeds of a foreclosure sale rather than anyone owning the debt.
Also remember that while it might be that investors could be construed as beneficiaries of a trust, if it existed, they actually are merely holders of uncertificated certificates in which they disclaim any interest in the debt, note or mortgage.  Hence  they have no claim, direct or indirect, against any individual borrower. 

PRACTICE NOTE: Don’t assert anything you cannot prove. Leave the burden of proof on the lawyers who have named an alleged claimant who they say or imply possesses a claim. Deny everything and force them to prove everything. Discovery should be aimed at revealing the gaps not facts that will prove some assertion about securitization in general. Judges don’t want to hear that.
Appropriate questions to ask in one form or another are as follows:
  1. Who is the Claimant/Plaintiff/Beneficiary?
  2. Who will receive the proceeds of foreclosure sale?
  3. Before the default, who received the proceeds of payment from the subject borrower? [They will  fight this tooth and nail]
  4. Did the trustee ever receive payments from the borrower?
  5. Does the trustee in this alleged trust have any contractual right to receive borrower payments?
  6. Do holders of certificates receive payments from the borrower through a servicer?

Filed under: burden of persuasion, burden of pleading, BURDEN OF PROOF, CORRUPTION, evidence, Fabrication of documents, foreclosure, foreclosure mill, Investor, Servicer, TRUST BENEFICIARIES | Tagged: , , , , , , , , , | 3 Comments »

MA Appellate Court Tells Chase They Can’t Sit on Two Chairs With One Ass

Posted on September 19, 2018 by Neil Garfield

As Charles Marshall just quoted to me “it’s always refreshing when you find a judge who follows the law.”

Chase can’t say that the Trust owns the loan since 2006 and that the loan was owned by WAMU in 2008. It can’t be both. And it can only be one allegation that survives — the “first sale.”

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consent to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

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

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see Starkey v Deutsche – MA Ct of Appeals

The big question is when if ever is Chase, through its lawyers, going to try to prove that the “Trust” exists and now owns the debt, note and mortgage.

Chase knows that WAMU didn’t own the loan because they bankrolled the very same loan that is at issue. But they used OPM (Other People’s Money).

Chase also knows that the OPM nature of the transaction makes the investors the owner of the debt with equitable rights to the mortgage and note.

Chase knows that the trust was written but not created. Nothing was ever entrusted to a trustee to actively manage on behalf of beneficiaries. Investors are not beneficiaries if all they get is a promise from a nonexistent entity (the trust) and they have no right, title or interest to the “underlying loans.”

Chase knows that the so-called underlying loans does NOT include ownership of the debts.

Chase knows that there is no transaction in the history of the world in which the trust purchased any loans.

Chase knows that it never allowed the investor money into the trust.

Chase knows that the named trust has no power even to inquire into the affairs of the “trust.”

Chase knows that it using the trust name as an unregistered fictitious name whereby OPM is converted into Chase assets.

Chase doesn’t care. For the most part homeowners do not fight.

 

 

Filed under: foreclosure | Tagged: , , , | 17 Comments »

Hawai’i Appellate Court Strikes at the Root of Fraudulent Foreclosures: HSBC Deutsch and PNC Crash and Burn

Posted on April 23, 2018 by Neil Garfield

This decision, although not yet for publication, brings us another step closer to exposure to the largest economic crime in human history. Every lawyer should read it more than once in its entirety. It contains the arguments and the narrative for most successful defense strategies against fraudulent foreclosures.

Fundamental to understanding why foreclosures are fraudulent and why most borrowers should prevail is an examination of how the banks and servicers attempt to paper over the absence of (a) ownership of the debt and the failure to identify the owner and (b) any evidence of an actual nexus with the supposed contract they are seeking to enforce — in the absence of anyone else claiming the right to enforce. Their entire premise rests on bank control of who knows about the subject debt.

That void is what produced this decision and the decisions around the country in discovery, in motions (especially motions for summary judgment), and at trial that have been in favor of homeowners and then buried under settlements restricted by the seal of confidentiality —- thousands of them.

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Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 954-451-1230 or 202-838-6345. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

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

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See HSBC, Deutsch, PNC adv Felicitas Moore, Intermediate Court of Appeals, Hawai’i

Hat Tip to Da Goose and Awesome Order on Failure of Qualified Witness and Documents

Special kudos to Hawai’i Dubin Law Offices, representing the homeowner.

Whether this case will stand up to further appeal is a question that can only be answered by time. But I think that it will and that this case, like many in the past few weeks and months, is striking at the achilles heal of fraudulent foreclosures. It is worthy of study because it does much of the research and analysis for you. It is not binding in any other state and may not be binding even in Hawai’i, since it is currently designated as “not for Publication.”

If I were to write an article detailing the many fine points raised by this appellate court, it would be a book. So read the article and look for the following points:

  1. The existence and administration of the books and records of the supposed “REMIC” Trustee for the supposed trust is directly challenged, although indirectly.
  2. Summary Judgment just became more difficult for the banks and servicers, if you use the reasoning in this opinion.
  3. Verification of complaint by “authorized Signor” or the “attorney” does NOT end the inquiry into the facts.
  4. Presumptions work against the foreclosing party in motions for summary judgment.
  5. Courts are getting suspicious of anything proffered by a foreclosing party when there is an alleged “REMIC” “trust” involved.
  6. Affidavits or declarations that the affiant personally has possession of the note do NOT establish (a) possession or (b) the right to enforce before the foreclosure was initiated. [This will lead to even more backdating of documents]
  7. FOUNDATION: Self declaration of knowledge and competency are insufficient. Foundation requires that the affiant or declarant specifically state how he/she came into such knowledge and why he/she is competent to testify.
  8. A self-serving declaration that the affiant is the custodian of records as to one case” raises red flags. Such declarations are only proper when they come from an individual who is, in the ordinary course of business, the records custodian for the business. [This raises some very uncomfortable questions for the banks and servicers, to wit: there are no business records for the trust because (a) the trustee has no right to keep them or even review information that would be entered on such records and (b) the trust has no business that requires record-keeping. So the assumption that the servicer’s records are the records of the trust named as the foreclosing party is simply not true and more importantly, lacks the required foundation to get such records into evidence.]
  9. Self-serving declarations do not necessarily authenticate any documents.
  10. Attorneys for the banks and servicers are put on notice that chickens may come home to roost — for  filing attestations to facts, about which they knew nothing or worse, about which they knew were untrue.

 

Filed under: burden of persuasion, burden of pleading, BURDEN OF PROOF, CORRUPTION, discovery, evidence, Fabrication of documents, foreclosure, forgery, legal standing, Servicer | Tagged: , , , , , , , , , , , , | 3 Comments »

Not even the Federal Government Can Determine Who owns Your Loan

Posted on July 5, 2016 by Neil Garfield

It was impossible to trace the majority of the mortgage loans on the over 300 homes sold by DSI that were the subject of the FBI investigation; it would have been harder yet to identify individual victims of the fraud given that the mortgages were securitized and traded. (Emphasis added.)

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

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Originally posted at http://mortgageflimflam.com
With additional edits by http://4closurefraud.org

“Counter-intuitive” is the way Reynaldo Reyes (Deutschbank VP Asset Management) described it in a taped telephone interview with a borrower who lived in Arizona.  “we only look like the Trustee. The real power lies with the servicers.”

And THAT has been the problem since the beginning. That means “what you think you know is wrong.” This message has been delivered in thousands of courtrooms in millions of cases but Judges refuse to accept it. In fact most lawyers, even those doing foreclosure defense, and even their clients — the so-called borrowers — can’t peel themselves away from what they think they know.

In the quote above it is obvious that the sentencing document reveals at least two things: (1) nobody can trace the loans themselves which in plain English means that nobody can know who loaned the money to begin with in the so-called loan origination” and (2) nobody can trace the ownership of the loans — i.e., the party who is actually losing money due to nonpayment of the loan. Of course this latter point was been creatively obscured by the banks who set up a scheme in which the victims (investors, managed funds, etc.) continue to get payments long after the “borrower” has ceased making payments.

If nobody knows who loaned the money then the presumption that the loan was consummated when the “borrower”signed documents placed in front of them is wrong for two reasons: (1) all borrowers sign loan documents before funding is approved which means that no loan is consummated when the documents are signed. and (2) there is no evidence that the “originator” funded the loans (regardless of whether it is a bank or some fly by night operation that went bust years ago) loaned any money to the “borrower.” (read the articles contained in the link above).

The reason why I put quotation marks around the word borrower is this: if I don’t lend you money then how are you a borrower, even if you sign loan papers? The courts have nearly universally got this wrong in virtually all of their pretrial rulings and trial rulings. Their attitude is that there must have been a loan and the homeowner must be a borrower because obviously there was a loan. What they means is that since money hit the closing table or the last “lender” received a payoff there must have been a loan. What else would you call it?

Certainly the homeowner meant for it to be a loan. The problem is that the originator did not intend for it to be a loan because they were not lending any money. The originator played the traditional part of a conduit (see American Brokers CONDUIT for example). The originator was paid a fee for the use of their name and traditionally sold the homeowner on taking a loan through the friendly people at XYZ Speedy No Fault Lending, Inc. (a corporation that often does not exist).

Somebody else sent money but it wasn’t a loan to the homeowner. It was the underwriter who was masquerading as the Master Servicer for a Trust that also does not exist. Where did the underwriter get the money? Certainly not from its own pockets. It took money from a dynamic dark pool that should not exist, according to the false “securitization” documents (Prospectus and Pooling and Servicing Agreement).

Who deposited the money into the dark pool? The sellers of fake “mortgage-backed securities”who took money from pension funds and other managed funds under the false pretense that the money would be under management of a specific REMIC Trust that in actuality does not exist, never conducted business under any name, never had a bank account, and for which the Trustee had no duties except window dressing to make it look good to investors. How is that possible? NY law allows for the documentation of a trust without any registration. The Trust does not exist in the eyes of the law unless there is something in it. This like a stick figure is not a person.

None of the money from investors went into any Trust account or any account of any trustee to be held and managed for a REMIC Trust. Sound crazy? It is crazy, but it is also true which is why it is impossible for even the Federal Government with virtually limitless resources cannot tell you who loaned you any money nor who owns any debt from you.

The money was surreptitiously deposited into hundreds of dark pools in institutions around the world. The actual business of the dark pols was to create the illusion of profits for the banks and a huge dark reserve that siphoned some $5 trillion out of the U.S. economy and more out of other economies around the world.

To cover their tracks, the banks took some of the money from the dark pool and started a chain reaction of offering what appeared to be loans but which in most cases were financial death sentences.

The investors, for sure, have a potential claim against the homeowners who received actual benefit from a flow of funds, but without being named in the loan documents, they have no direct right of foreclosure. And then there is the problem of coming up with the correct list of investors whose money was commingled with hundreds of fake trusts. The investors know that collectively, as a group they are owed money from homeowners as a group. But NOBODY KNOWS which investors match up with what alleged loan. The homeowner can ONLY be a “borrower” if they executed a loan contract and the contract became enforceable because there was offer, acceptance and consideration flowing both ways. Without all four legs of the stool it collapses.

Judges resist this “gift” to homeowners while ignoring and accepting the consequence of a gift of enormous proportions to the few banks at the top who started all this. Somehow word has spread that the middle and lower class is the right place to put the burden of this illegal bank behavior.

The homeowner’s offer of consideration is the promise to pay principal sometimes with interest. The originator’s offer of consideration is not to the homeowner. The originator has offered services for a fee to the conduits and sham corporations that put the originator up to selling bad loans from undisclosed third parties to people who lacked the financial knowledge to understand what was happening. So no contract there. No contract? No borrower. No contract? No lender. Hence the term I used back in 2007, “pretender lender.” I should have also coined the term “mock borrower.”

Sound impossible? Here is the finding from the sentencing document:

During the time of the information, DSI worked with two “preferred lenders,” Wells Fargo Bank and J.P. Morgan Chase. Certain employees and managers of those two preferred lenders knew about the incentive programs offered by DSI and the builders, and knew that the incentives were not being disclosed in the loan files. (Emphasis added.)

And that is what we mean by “counter-intuitive.” It is a lie, a cover-up and a fraudulent scheme directed at multiple  victims. Under existing law, foreclosure is not an option for persons who lack standing and have unclean hands. Nearly all loan transactions were table funded and that means, according to TILA, that they are and were predatory loans. And that means, according to me, that it is impossible to allow any equitable relief be had by those who have unclean hands — especially those who seek foreclosure, which is an equitable remedy.

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Deutsch Bank Trips and Falls: Default Notice Strictly Construed

Posted on March 12, 2015 by Neil Garfield

For further information please call 954-495-9867 or 520-405-1688

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see http://www.dailybusinessreview.com/id=1202719610201/No-Default-Notice-Means-No-Foreclosure-4th-DCA-Rules?slreturn=20150206120242

Case dismissed. Deutsch sent the notice of default to a P.O. Box when they should have sent it to the property address. End of story?

Maybe not. This decision from the 4th DCA shows that at least this Court in Florida is starting to lean heavily away from the bank illusions and myths. You can’t produce self serving documentation and then say that it is presumptively correct because you say so. As it becomes more clear that the legal presumptions and factual assumptions are leading trial courts AWAY from the truth and into a fraudulent scheme created by the banks.

When I represented banks I would send the default letter Certified return receipt requested to show delivery or attempted delivery refused. In nearly all cases the banks are showing a copy of a letter they say was sent but they have no proof it was ever sent. In this case with Deutsch, even if they sent it, it clearly went to the wrong address.

Not long ago such an error would have been considered as immaterial. This time it was dispositive ending the case in favor of the homeowner. What happens next? We don’t know. But for now the homeowner is safely in their home and not subject to forfeiture. Does he owe money? Maybe. But not to Deutsch and not to anyone identified by Deutsch in their so-called chain of ownership.

Filed under: foreclosure | Tagged: , , , | 13 Comments »

Statute of Limitations: Dade County — Deutsche Loses Foreclosure — Cited for 7 years of delays

Posted on December 30, 2014 by Neil Garfield

For further information please call 954*495*9867 or 520-405-1688

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see Deutsch Crashes on Statute of Limitations in Dade County

For many years judges have turned delays in foreclosures against borrowers usually making some comment about having lived for free without making payments. Those judges have ignored the fact that the delay was caused by the Plaintiff who initiated the foreclosure, who for their own reasons delayed, obfuscated and continually delayed the progress of the case that they were supposed to prosecute, since they filed the lawsuit. In this case, Deutsch lost based upon a statute of limitations that had run and based upon the fact that Deutsch was the reason for the delays.

The fact remains that in most cases, homeowners were urgently asking for modifications in which they would have paid for terms that were based upon economic and legal realities. Those homeowners, usually paying attorneys fees throughout the period of delays, were not getting any “free ride.” They were set to lose their down payment, cost of improvements and the costs of forensic audits and attorney fees. But the item to notice, as we have discussed before, is that where the adversaries are a bank or servicer on the plaintiff side and the condo or homeowners association on the other, the decisions are more likely to run against the bank.

So it behooves the attorneys for the associations as well as the homeowners to act in concert where the possibility exists for defeating the claims of a party like Deutsch who seems to lack ownership and lack authority to collect or enforce.

The case shows the “negative consequences that lenders can face if they go too far with their delay tactics in foreclosure cases,” condo association attorneys Nicholas and Steven Siegfried said in a statement.

Loan servicer American Home Mortgage Servicing Inc. filed suit in January 2007, demanding accelerated payments for the full $1.44 million.

Ironically it was this move for upfront payments that would unravel the lender’s case and cost the bank the million-dollar property, because the condo association successfully argued the demand started a five-year clock for resolving the foreclosure.

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3rd DCA Florida Decides Statute of Limitations: Deutsch Loses

Posted on December 19, 2014 by Neil Garfield

For further information please call 954-495-9867 or 520-405-1688

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see Third DCA – Beauvais Decision

In the Third District Court of Appeal, Florida, the Court decided Deutsch v Beauvais against the alleged “creditor” Deutsch.. Dozens of appellate decisions across the country are reversing a long-standing pattern of rubber stamping trial courts who exceeded their discretion, authority or even jurisdiction. This case affirms the trial court’s decision that the action was barred by the statute of limitations but reverses the trial court’s decision that the mortgage was null and void. How they reached this decision is going to be a matter in dispute and possibly the subject of a Florida Supreme Court decision soon.

The basic thrust of the decision is this: an unenforceable mortgage is not void. This seems counter-intuitive but it is probably correct. The effect is that the unenforceable mortgage remains as an encumbrance or cloud on title such that upon resale or refinance it might require payment to get a satisfaction or release of the mortgage, even though enforcement is barred by the statute of limitations. Other court decisions are struggling with the same issues. The effect on quiet title actions probably is that the declaration of the rights and duties of the parties includes the mortgage in the title chain and does not nullify the mortgage or remove it from the chain of title. Hence an action to nullify the mortgage would be necessary before it could be removed from the chain of title.

Using the logic from this and other cases, a homeowner cannot remove a mortgage from the chain of title by merely asserting that it is unenforceable. The flip side is that a homeowner could easily get the mortgage removed from the chain of title and to get a judgment in which title is declared free and clear of the mortgage encumbrance IF the homeowner proves that the initial transaction was a sham and that the mortgage should not have been signed or released much less recorded.

This is why the logic behind the “unfunded trust” may be crucial to removing the mortgage from the chain of title. If you can prove that there was no loan at the base of the documentary chain, then you are likely to succeed in nullifying the mortgage and then quieting title. Through discovery and deductive reasoning, it is possible to show that there was no loan of money, in FACT, at the base of the chain of documents. As a caveat, I should add that this issue is certainly not entirely resolved. There are competing decisions and views in Florida and across the country.

The basic thrust of this decision is whether the election to accelerate the entire amount due can be abandoned and thus allow future claims on future installments of the alleged loan.  The court cites AM. Bankers, 905 So. 2d 192. The hidden issue is that the association was successful in foreclosing against the homeowner and Deutsch — because there was no effort to withdraw the acceleration of the alleged loan. I think the decision ignores the doctrine of estoppel and prevents the alleged “creditor” from first exercising its “option” to accelerate and then withdrawing it when they lose the case or voluntary dismiss the case.

The court also makes a distinction between a voluntary dismissal and a judgment or involuntary dismissal with prejudice. In the first case, the court decided that the option to reinstate the later installments not barred by the statute of limitations could exist if the dismissal with prejudice, but does not exist where the option is not exercised. This adds wording to the mortgage contract and the applicable statutes. I think it is wrong.

The decision means that a “creditor” who loses or dismisses an action might be able to accelerate and foreclose multiple times until they finally win. It also introduces parole evidence into the recording process and chain of title. I agree that the mortgage is not automatically removed by losing the case. But I don’t agree that the loser can reinstate the action and sue again. It calls for the entire issue of the origination and transfer of the the alleged loan to be re-litigated. I think it conflicts with the doctrines of res judicata and collateral estoppel. The note, which is the only evidence of the debt, has been rendered unenforceable by the statute of limitations. To say that the mortgage survives as a potentially enforceable instrument on the issue of payment is illogical.

Here are some relevant quotes from the decision:

Where a lender files a foreclosure action upon a borrower’s default, and expressly exercises its contractual right to accelerate all payments, does an involuntary dismissal of that action without prejudice in and of itself negate, invalidate or otherwise “decelerate” the lender’s acceleration of the payments, thereby permitting a new cause of action to be filed based upon a new and subsequent default? [The 3rd DCA answers this question in the negative]

…because the installment nature of the loan payments was never reinstated following the acceleration, there were no “new” payments due and thus there could be no “new” default following the dismissal without prejudice of the initial action.

Smith v. F.D.I.C., 61 F.3d 1552, 1561 (11th Cir. 1995)(holding, “when the promissory note secured by a mortgage contains an optional acceleration clause, the foreclosure cause of action accrues, and the statute of limitations begins to run, on the date the acceleration clause is invoked.”).

The supreme court disapproved of the holding in Stadler and approved the Fourth District’s holding in Singleton:

We agree with the reasoning of the Fourth District that when a second and separate action for foreclosure is sought for a default that involves a separate period of default from the one alleged in the first action, the case is not necessarily barred by res judicata. [Editor’s Note: I think the court ignored the difference between the intention and effect of a statute of limitations and the doctrine of res judicata.]

In Singleton, the dismissal with prejudice disposed not only of every issue actually adjudicated, but every justiciable issue as well. Hinchee v. Fisher, 93 So. 2d 351, 353 (Fla. 1957), overruled in part on other grounds, May v. State ex rel. Ervin, 96 So. 2d 126 (Fla. 1957). In Hinchee, as in Singleton and Stadler, the trial court dismissed an initial action with prejudice. Hinchee, 93 So. 2d at 353. This operated as an adjudication on the merits and, as a general proposition for purposes of res judicata, “puts at rest and entombs in eternal quiescence every justiciable, as well as every actually adjudicated, issue.” Id. (quoting Gordon v. Gordon, 59 So. 2d 40, 43 (Fla. 1952)). As the Court observed in Hinchee:

A judgment on the merits does not require a determination of the controversy after a trial or hearing on controverted facts. It is sufficient if the record shows that the parties might have had their controversies determined according to their respective rights if they had presented all their evidence and the court applied the law.

Res judicata is not the issue in the instant case because the dismissal of the Initial Action was without prejudice, and therefore the borrower here (unlike the borrower in Singleton) did not “prevail in the foreclosure action by demonstrating that she was not in default” nor was there “an adjudication denying acceleration and foreclosure” such that the parties “are simply placed back in the same contractual relationship with the same continuing obligations.” Id.

the only subsequent cause of action which Deutsche Bank could file under the circumstances was an action on the accelerated debt— it could not thereafter sue upon an alleged “new” default because, without reinstating the installment terms of the repayment of the debt, there were no “new” payments due, [e.s.]

Without a new payment due, there could be no new default, and therefore no new cause of action. Because the Current Action was based upon the very same accelerated debt as the Initial Action, and because that Current Action was filed after the expiration of the five-year statute of limitations, it was barred.5

We acknowledge that Singleton has been applied to permit, as against an

asserted statute of limitations bar, the filing of a subsequent action following

dismissal with prejudice (i.e., an adjudication on the merits) of an earlier action.

See 2010-3 SFR Venture, LLC. v. Garcia, 149 So. 3d 123 (Fla. 4th DCA 2014);

Star Funding Solutions, LLC. V. Krondes, 101 So. 3d 403 (Fla. 4th DCA 2012); );

U.S. Bank Nat. Ass’n. v. Bartram, 140 So. 3d 1007 (Fla. 5th DCA 2014) review

granted, Bartram v. U.S. Bank Nat. Ass’n, Nos. SC14-1265, SC14-1266, SC14-

1305 (Fla. Sept. 11, 2014); PNC Bank, N.A., v. Neal, 147 So. 3d 32 (Fla. 1st DCA

2013). We believe our holding is not necessarily inconsistent with the strict

holdings of these cited cases, as each of them involved a dismissal of the earlier

action with prejudice, representing an adjudication on the merits and, at least

implicitly, a determination that there was no default and therefore no valid or

effectual acceleration. [ I think the court is struggling to justify its decision]

Filed under: foreclosure | Tagged: , , , , , , , | 15 Comments »

BAP Panel Raises the Stakes Against Deutsch et al — Secured Status May be Challenged

Posted on November 26, 2014 by Neil Garfield

Fur Further Information please call 954-495-9867 or 520-405-1688

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ALERT FOR BANKRUPTCY LAWYERS — SECURED STATUS OF ALLEGED CREDITOR IS NOT TO BE ASSUMED

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I have long held and advocated three points:

  1. The filing of false claims in the nonjudicial process of a majority of states should not result in success where the same false claims could never be proven in judicial process. Nonjudicial process was meant as an administrative remedy to foreclosures that were NOT in dispute. Any application of nonjudicial schemes that allows false claims to succeed where they would fail in a judicial action is unconstitutional.
  2. The filing of a bankruptcy petition that shows property to be encumbered by virtue of a deed of trust is admitting a false representation made by a stranger to the transaction. The petition for bankruptcy relief should be filed showing that the property is not encumbered and the adversary or collateral proceeding to nullify the mortgage and the note should accompany each filing where the note and mortgage are subject to claims of securitization or a “new” beneficiary.
  3. The vast majority of decisions against borrowers result from voluntary or involuntary waiver, ignorance and failure to plead or object on the basis of false claims based on false documentation. The issue is not the signature (although that probably is false too); rather it is (a) the actual transaction which is missing and the (b) false documentation of a (i) fictitious transaction and (ii) fictitious transfers of fictitious (and non-fictitious) transactions. The result is often that the homeowner has admitted to the false assertion of being a borrower in relation to the party making the claim, admitting the secured status of the “creditor”, admitting that they are a creditor, admitting that they received a loan from within the chain claimed by the “creditor”, admitting the default, admitting the validity of the note and admitting the validity of the mortgage or deed of trust — thus leaving both the trial and appellate courts with no choice but to rule against the homeowner. Thus procedurally a false claim becomes “true” for purposes of that case.

see 11/24/14 Decision: MEMORANDUM-_-ANTON-ANDREW-RIVERA-DENISE-ANN-RIVERA-Appellants-v.-DEUTSCHE-BANK-NATIONAL-TRUST-COMPANY-Trustee-of-Certificate-Holders-of-the-WAMU-Mortgage-Pass-Through-Certificate-Series-2005-AR6

This decision is breath-taking. What the Panel has done here is fire a warning shot over the bow of the California Supreme Court with respect to the APPLICATION of the non-judicial process. AND it takes dead aim at those who make false claims on false debts in both nonjudicial and judicial process. Amongst the insiders it is well known that your chances on appeal to the BAP are less than 15% whereas an appeal to the District Judge, often ignored as an option, has at least a 50% prospect for success.

So the fact that this decision comes from the BAP Panel which normally rubber stamps decisions of bankruptcy judges is all the more compelling. One word of caution that is not discussed here is the the matter of jurisdiction. I am not so sure the bankruptcy judge had jurisdiction to consider the matters raised in the adversary proceeding. I think there is a possibility that jurisdiction would be present before the District Court Judge, but not the Bankruptcy Judge.

From one of my anonymous sources within a significant government agency I received the following:

This case is going to be a cornucopia of decision material for BK courts nationwide (and others), it directly tackles all the issues regarding standing and assignment (But based on Non-J foreclosure, and this is California of course……) it tackles Glaski and Glaski loses, BUT notes dichotomy on secured creditor status….this case could have been even more , but leave to amend was forfeited by borrower inaction—– it is part huge win, part huge loss as it relates to Glaski, BUT IT IS DIRECTLY APPLICABLE TO CHASE/WAMU CASES……….Note in full case how court refers to transfer of “some of WAMU’s assets”, tacitly inferring that the court WILL NOT second guess what was and was not transferred………… i.e, foreclosing party needs to prove this!!

AFFIRMED- NO SECURED PARTY STATUS FOR BK PROVEN 

Even though Siliga, Jenkins and Debrunner may preclude the

Riveras from attacking DBNTC’s foreclosure proceedings by arguing

that Chase’s assignment of the deed of trust was a nullity in

light of the absence of a valid transfer of the underlying debt,

we know of no law precluding the Riveras from challenging DBNTC’s assertion of secured status for purposes of the Riveras’ bankruptcy case. Nor did the bankruptcy court cite to any such law.

We acknowledge that our analysis promotes the existence of two different sets of legal standards – one applicable in nonjudicial foreclosure proceedings and a markedly different one for use in ascertaining creditors’ rights in bankruptcy cases.

But we did not create these divergent standards. The California legislature and the California courts did. We are not the first to point out the divergence of these standards. See CAL. REAL EST., at § 10:41 (noting that the requirements under California law for an effective assignment of a real-estate-secured obligation may differ depending on whether or not the dispute over the assignment arises in a challenge to nonjudicial foreclosure proceedings).
We must accept the truth of the Riveras’ well-pled
allegations indicating that the Hutchinson endorsement on the
note was a sham and, more generally, that neither DBNTC nor Chase
ever obtained any valid interest in the Riveras’ note or the loan
repayment rights evidenced by that note. We also must
acknowledge that at least part of the Riveras’ adversary
proceeding was devoted to challenging DBNTC’s standing to file
its proof of claim and to challenging DBNTC’s assertion of
secured status for purposes of the Riveras’ bankruptcy case. As
a result of these allegations and acknowledgments, we cannot
reconcile our legal analysis, set forth above, with the
bankruptcy court’s rulings on the Riveras’ second amended
complaint. The bankruptcy court did not distinguish between the
Riveras’ claims for relief that at least in part implicated the
parties’ respective rights in the Riveras’ bankruptcy case from
those claims for relief that only implicated the parties’
respective rights in DBNTC’s nonjudicial foreclosure proceedings.

THEY REJECT GLASKI-

Here, we note that the California Supreme Court recently

granted review from an intermediate appellate court decision
following Jenkins and rejecting Glaski. Yvanova v. New Century
Mortg. Corp., 226 Cal.App.4th 495 (2014), review granted &
opinion de-published, 331 P.3d 1275 (Cal. Aug 27, 2014). Thus,
we eventually will learn how the California Supreme Court views
this issue. Even so, we are tasked with deciding the case before
us, and Ninth Circuit precedent suggests that we should decide
the case now, based on our prediction, rather than wait for the
California Supreme Court to rule. See Hemmings, 285 F.3d at
1203; Lewis v. Telephone Employees Credit Union, 87 F.3d 1537,
1545 (9th Cir. 1996). Because we have no convincing reason to
doubt that the California Supreme Court will follow the weight of
authority among California’s intermediate appellate courts, we
will follow them as well and hold that the Riveras lack standing
to challenge the assignment of their deed of trust based on an
alleged violation of a pooling and servicing agreement to which
they were not a party.

BUT……… THEY DO SUCCEED ON SECURED STATUS

Even though the Riveras’ first claim for relief principally

relies on their allegations regarding the assignment’s violation
of the pooling and servicing agreement, their first claim for
relief also explicitly incorporates their allegations challenging
DBNTC’s proof of claim and disputing the validity of the
Hutchinson endorsement. Those allegations, when combined with
what is set forth in the first claim for relief, are sufficient
on their face to state a claim that DBNTC does not hold a valid
lien against the Riveras’ property because the underlying debt
never was validly transferred to DBNTC. See In re Leisure Time
Sports, Inc., 194 B.R. at 861 (citing Kelly v. Upshaw, 39 Cal.2d
179 (1952) and stating that “a purported assignment of a mortgage
without an assignment of the debt which it secured was a legal
nullity.”).
While the Riveras cannot pursue their first claim for relief
for purposes of directly challenging DBNTC’s pending nonjudicial
foreclosure proceedings, Debrunner, 204 Cal.App.4th at 440-42,
the first claim for relief states a cognizable legal theory to
the extent it is aimed at determining DBNTC’s rights, if any, as
a creditor who has filed a proof of secured claim in the Riveras’
bankruptcy case.

TILA CLAIM UPHELD!—–

Fifth Claim for Relief – for violation of the Federal Truth In Lending Act, 15 U.S.C. § 1641(g)

The Riveras’ TILA Claim alleged, quite simply, that they did
not receive from DBNTC, at the time of Chase’s assignment of the
deed of trust to DBNTC, the notice of change of ownership
required by 15 U.S.C. § 1641(g)(1). That section provides:
In addition to other disclosures required by this
subchapter, not later than 30 days after the date on
which a mortgage loan is sold or otherwise transferred
or assigned to a third party, the creditor that is the
new owner or assignee of the debt shall notify the
borrower in writing of such transfer, including–

(A) the identity, address, telephone number of the new

creditor;

(B) the date of transfer;

 

(C) how to reach an agent or party having authority to

act on behalf of the new creditor;

(D) the location of the place where transfer of

ownership of the debt is recorded; and

(E) any other relevant information regarding the new

creditor.

The bankruptcy court did not explain why it considered this claim as lacking in merit. It refers to the fact that the
Riveras had actual knowledge of the change in ownership within
months of the recordation of the trust deed assignment. But the
bankruptcy court did not explain how or why this actual knowledge
would excuse noncompliance with the requirements of the statute.
Generally, the consumer protections contained in the statute
are liberally interpreted, and creditors must strictly comply
with TILA’s requirements. See McDonald v. Checks–N–Advance, Inc.
(In re Ferrell), 539 F.3d 1186, 1189 (9th Cir. 2008). On its
face, 15 U.S.C. § 1640(a)(2)(A)(iv) imposes upon the assignee of
a deed of trust who violates 15 U.S.C. § 1641(g)(1) statutory
damages of “not less than $400 or greater than $4,000.”
While the Riveras’ TILA claim did not state a plausible
claim for actual damages, it did state a plausible claim for
statutory damages. Consequently, the bankruptcy court erred when
it dismissed the Riveras’ TILA claim.

LAST, THEY GOT REAR ENDED FOR NOT SEEKING LEAVE TO AMEND

Here, however, the Riveras did not argue in either the bankruptcy court or in their opening appeal brief that the court should have granted them leave to amend. Having not raised the issue in either place, we may consider it forfeited. See Golden v. Chicago Title Ins. Co. (In re Choo), 273 B.R. 608, 613 (9th Cir. BAP 2002).

Even if we were to consider the issue, we note that the

bankruptcy court gave the Riveras two chances to amend their
complaint to state viable claims for relief, examined the claims
they presented on three occasions and found them legally
deficient each time. Moreover, the Riveras have not provided us
with all of the record materials that would have permitted us a
full view of the analyses and explanations the bankruptcy court
offered them when it reviewed the Riveras’ original complaint and
their first amended complaint. Under these circumstances, we
will not second-guess the bankruptcy court’s decision to deny
leave to amend. See generally In re Nordeen, 495 B.R. at 489-90
(examining multiple opportunities given to the plaintiffs to
amend their complaint and the bankruptcy court’s efforts to
explain to them the deficiencies in their claims, and ultimately
determining that the court did not abuse its discretion in
denying the plaintiffs leave to amend their second amended
complaint).

Filed under: AMGAR, CORRUPTION, escrow agent, Eviction, evidence, foreclosure, foreclosure defenses, Investor, MBS TRUSTEE, MODIFICATION, Mortgage, originator, Pleading, Servicer, Title, TRUST BENEFICIARIES | Tagged: , , , , , , , , , , , | 73 Comments »

Trustees on REMICs Face a World of Hurt

Posted on June 18, 2013 by Neil Garfield

DID YOU EVER WONDER WHY TRUSTEES INSTRUCTED THE INVESTMENT BANKS TO NOT USE THEIR NAME IN FORECLOSURES?

Editor’s Comment: Finally the questions are spreading over the entire map of the false securitization of loans and the diversion of money, securities and property from investors and homeowners. Read the article below, and see if you smell the stink rising from the financial sector. It is time for the government to come clean and tell us that they were defrauded by TARP, the bank bailouts, and the privileges extended to the major banks. They didn’t save the financial sector they crowned it king over all the world.

Nowhere is that more evident than when you drill down on the so-called “trustees” of the so-called “trusts” that were “backed” by mortgage loans that didn’t exist or that were already owned by someone else. The failure of trustees to exercise any power or control over securitization or to even ask a question about the mortgage bonds and the underlying loans was no accident. When the whistle blowers come out on this one it will clarify the situation. Deutsch, US Bank, Bank of New York accepted fees for the sole purpose of being named as trustees with the understanding that they would do nothing. They were happy to receive the fees and they knew their names were being used to create the illusion of authenticity when the bonds were “Sold” to investors.

One of the next big revelations is going to be how the money from investors was quickly spirited away from the trustee and directly into the pockets of the investment bankers who sold them. The Trustee didn’t need a trust account because no money was paid to any “trust” on which it was named the trustee. Not having any money they obviously were not called upon to sign a check or issue a wire transfer from any account because there was no account. This was key to the PONZI scheme.

If the Trustees received money for the “trust” then they would be required under all kinds of laws and regulations to act like a trustee. With no assets in a named trustee they could hardly be required to do anything since it was an unfunded trust and everyone knows that an unfunded trust is no trust at all even if it exists on paper.

Of course if they had received the money as trustee, they would have wanted more money to act like a trustee. But that is just the tip of the iceberg. If they had received the money from investors then they would have spent it on acquiring mortgages. And if they were acquiring mortgages as trustee they would have peeked under the hood to see if there was any loan there. to the extent that the loans were non-confirming loans for stable funds (heavily regulated pension funds) they would rejected many of the loans.

The real interesting pattern here is what would have happened if they did purchase the loans. Well then — and follow this because your house depends upon it — if they HAD purchased the loans for the “trust” there would have no need for MERS, no trading in the mortgages, and no trading on the mortgage bonds except that the insurance would have been paid to the investors like they thought it would. The Federal Reserve would not be buying billions of dollars in “mortgage bonds” per month because there would be no need — because there would be no emergency.

If they HAD purchased the loans, then they would have a recorded interest, under the direction as trustees, for the REMIC trusts. And they would have had all original documents or proof that the original documents had been deposited somewhere that could be audited,  because they would not have purchased it without that. Show me the note never would have gotten off the ground or even occurred to anyone. But most importantly, they would clearly have mitigated damages by receipt of insurance and credit default swaps, payable to the trust and to the investment banker, which is what happened.

No, Reynaldo Reyes (Deutsch bank asset manager in control of the trustee program), it is not “Counter-intuitive.” It was a lie from start to finish to cover up a PONZI scheme that failed like all PONZI schemes fail as soon as the “investors” stop buying the crap you are peddling. THAT is what happened in the financial crisis which would have been no crisis. Most of the loans would never have been approved for purchase by the trusts. Most of the defaults would have been real, most of the debts would have been real, and most importantly the note would be properly owned by the trust giving it an insurable interest and therefore the proceeds of insurance and credit default swaps would have been paid to investors leaving the number of defaults and foreclosures nearly zero.

And as we have seen in recent days, there would not have been a Bank of America driving as many foreclosures through the system as possible because the trustee would have entered into modification and mitigation agreements with borrowers. Oh wait, that might not have been necessary because the amount of money flooding the world would have been far less and the shadow banking system would be a tiny fraction of the size it is now — last count it looks like something approaching or exceeding one quadrillion dollars — or about 20 times all the real money in the world.

At some point the dam will break and the trustees will turn on the investment banks and those who are using the trustee’s name in vain. The foreclosures will stop and the government will need to fess up tot he fact that it entered into tacit understandings with scoundrels. When you sleep with dogs you get fleas — unless the dog is actually clean.

Stay Tuned for more whistle blowing.

In Countrywide Case, Trustees Failed to Provide Oversight on Mortgage Pools

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Deutsch and Goldman Lose Bid to Dismiss FHFA Lawsuit for Fraud

Posted on November 14, 2012 by Neil Garfield

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Administrative Process May Provide a Lift to Borrowers

Editor’s Comment: Following on the heals of a similar ruling against JPMorgan Chase, Judge Denise Cote, denied the motion to dismiss the lawsuit of the Federal Housing Finance Agency that overseas Fannie and Freddie.

Simply put the agency is charging the investment banks with intentionally misrepresenting the underwriting standards that were in use during the mortgage meltdown. To put it more simply, the fraud we know that occurred at ground zero (the “closing” table) is being traced up the line to the banks that were pulling the strings and causing the fraud.

The allegations of course are insufficient in and of themselves to use as proof of anything. They are unproven allegations in a civil court suit in Federal Court in Manhattan. BUT there is an interesting argument to be made here that should not be ignored. I did a lot of work in administrative law when I was practicing full-time.

The procedure that any agency follows in filing such a lawsuit is something that should be pointed out when you are making arguments about fraud in the origination or assignments of loans.

In order for an agency to file suit, there must be a “finding” that the facts alleged in the complaint are true. In order for that to happen there must be an investigation and it must be brought before a committee or board for a finding of probable cause.

Normally the finding of probable cause would result in an administrative action brought before a hearing officer that would result in either acquittal of the offending suspect (respondent) or fines, penalties or even revocation of their right to do business with the agency or under the auspices of the agency.

Here the action is brought in civil court which must mean that the findings were strong enough to go beyond probable cause to establish in the findings of the agency that these violations did occur beyond a reasonable doubt. Hence, it could be argued, given the structure and process of administrative actions, that the investment banks have already been found by administrative agencies to be fraudulent.

Then you go to the facts alleged and see what those facts were (see article on JPMorgan denial of dismissal for copy of the complaint). Where there are similarities, you can allege the same thing and apply it to the origination of the loan and the so-called assignments and claims of securitization. AND you can say that there has already been an administrative finding that the fraud occurred, which is persuasive authority at a minimum.

In these cases the investment banks are accused of intentionally lying about the underwriting standards used in origination of the loans — something we have been saying here for  years.

That means it was no mistake that they failed to put the name of the real payee on the note and mortgage and it was no mistake that they failed to reference the REMIC or the pooling and servicing agreement which set the terms of repayment, sometimes in direct contradiction to the terms expressed in the note that they induced the borrower to sign. The information was intentionally withheld from the borrower and promptly used with Fannie and Freddie knowing ti was false, as to verifications of value, income viability etc. (see previous post).

In essence the FHFA is saying the same thing that the investors are saying, which is the same thing that the borrowers are saying — these origination documents are worthless scraps of paper replete with deficiencies, lies and misrepresentations, unsupported by consideration and unenforceable.

The defense of the investment banks is that they HAVE been enforcing the notes and mortgages (Deeds of trust). They are saying that since the courts have let most of the cases go to foreclosure, the documents must be valid and enforceable. If improper underwriting standards had been used, or more properly stated, if underwriting standards were ignored, then the borrower would have had a right to rescission, which the courts have largely rejected. It is circular reasoning but it works, for the most part when it is a single homeowner against a big bank.

But when it is institution against institution its not so easy to pull the wool over the judge’s eyes. AND unlike the borrowers, the FHFA is not plagued with guilt over whether they were stupid to begin with and therefore deserve the punishment of taking the largest loss of their lives.

The answer to that is that the banks were only able to “enforce” as a result of the ignorance of the judges, lawyers and borrowers as to the truth behind the facts of each loan origination, assignment etc.

By Jonathan Stempel, Reuters

A U.S. judge rejected bids by Goldman Sachs Group Inc (GS.N) and Deutsche Bank AG (DBKGn.DE) to dismiss a federal regulator’s lawsuits accusing them of misleading Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) into buying billions of dollars of risky mortgage debt.

In separate decisions on Monday, U.S. District Judge Denise Cote in Manhattan said the Federal Housing Finance Agency may pursue fraud claims over some of the banks’ representations in offering materials regarding mortgage underwriting standards.

The FHFA had sued over certificates that Fannie Mae and Freddie Mac, known as government-sponsored enterprises, had bought between September 2005 and October 2007.

Goldman underwrote about $11.1 billion of the certificates, and Deutsche Bank roughly $14.2 billion, the regulator has said.

Michael DuVally, a Goldman spokesman, declined to comment, as did Deutsche Bank spokeswoman Renee Calabro. Trials in both cases are scheduled to begin in September 2014.

Last year, the FHFA filed 18 lawsuits against banks and finance companies over mortgage losses suffered by Fannie Mae and Freddie Mac on roughly $200 billion of securities.

Cote handles 16 of the lawsuits, and previously refused to dismiss its cases against Bank of America Corp’s (BAC.N) Merrill Lynch unit, JPMorgan Chase & Co (JPM.N) and UBS AG (UBSN.VX).

In her Deutsche Bank ruling, the judge said that while the offering materials said representations were “preliminary” and “subject to change,” their use suggested that the German bank “fully intended the GSEs to rely on” them.

Meanwhile, Cote rejected what she called Goldman’s “legally dubious” claim not to be liable over prospectus supplements it did not write, saying “it is difficult to square with the fact that the bank’s name is prominently displayed on each.”

She dismissed some claims over representations concerning owner-occupied homes and loan values.

The FHFA became the conservator of Fannie Mae and Freddie Mac after federal regulators seized the mortgage financiers on September 7, 2008.

In May, Deutsche Bank agreed to pay $202.3 million in a separate federal probe, in which its MortgageIT unit admitted it had lied to the U.S. government over whether its loans were eligible for federal mortgage insurance.

Cote said it is too soon to decide liability over MortgageIT activity that predated its 2007 takeover by Deutsche Bank.

The cases are Federal Housing Finance Agency v. Deutsche Bank AG et al, U.S. District Court, Southern District of New York, No. 11-06192; and Federal Housing Finance Agency v. Goldman Sachs & Co et al in the same court, No. 11-06198.

(Reporting By Jonathan Stempel in New York; Editing by John Wallace, Tim Dobbyn and M.D. Golan)

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Deutsch Bank Inquiry Reveals Insider Influence by Paulson

Posted on February 1, 2012 by Neil Garfield

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Editor’s Comment: At the end of the day, everyone knows everything. The billions that Paulson made are directly attributable to his ability to instruct Deutsch and others as to what should be put into the Credit Default Swaps and other hedge products that comprised his portfolio. He did this because they let him — and then he traded on what he not only knew, he was trading on what he had done — all to the detriment of the investors who had purchased mortgage bonds and other exotic instruments.
The singular question that comes out of all this is what happened to the money? Judges are fond of saying that there was a loan, it wasn’t paid and the borrower is the one who didn’t pay it. Everything else is just window dressing that can be addressed through lawsuits amongst the securitization participants so why should a lowly Judge sitting in on a foreclosure case mess with any of that?
The reason is that the debt, contrary to the Judges assumption (with considerable encouragement from the banks and servicers) was never owed to the originator or the intermediaries who were conduits in the funding of the loan. The debt was owed to the investor-lender. And those who are attempting to foreclose are illegally inserting themselves into mortgage documentation in which they have no interest directly or indirectly.
If they are owed money, which many of them are not because they waived the right of recovery from the homeowner, it is through an action for restitution or unjust enrichment, not mortgage foreclosure. Banks and servicers are intentionally blurring the distinction between the actual creditor-lender and those other parties who were co-obligees on the mortgage bond in order to get the benefit of of foreclosure on a loan they did not fund or purchase.
So how does that figure in to what happened here. Paulson an outside to the transaction with investors and an outside to the investors in the bogus loan products sold to homeowners, arranges a bet that the mortgages were fail. He is essentially selling the loans short with delivery later after they fail and are worth pennies. But the Swap doesn’t require delivery, so he just gets the money. The fees he paid for the SWAP are buried into the income statement of Deutsch in this case. So it looks like a transaction like a horse-race where you place a bet — win or lose you don’t get the horse and you don’t have to feed him either.
But in order for this transaction to occur, the money received by Deutsch and the money paid to Paulson must be the subject of a detailed accounting. Without a COMBO Title and Securitization search and Loan Level Accounting, you won’t see the whole picture — you only see the picture that the servicer presents in foreclosure which is snapshot of only the borrower payments, not the payments and receipts relating to the mortgage loan, which as we all know were never owned by Deutsch or anyone else because the transfer papers were never executed, delivered or recorded without fabrication and forgery.
Paulson is an extreme case where claw-back of that money will be fought tooth and nail. But that money was ill-gotten gains arranged by Paulson based upon insider information, that directly injured the investor-lenders who were still buying this stuff and directly injured the borrowers who were never credited with the money that either was received by the investor creditors, or should have been received or credited tot hem because the money was received on their behalf.
Once you factor in the third party obligee payments as set forth in the PSA and Prospectus, you will find that we have a choice: either the banks get to keep the money they stole from investors and borrowers, or the money must be returned. If it must be returned, then a portion of that should go to reducing the debt, as per the requirements of the note, for payment received by the creditor, whether or not it was paid by the borrower.
BOTTOM LINE: Securitization never happened. And the money that was passed around like a whiskey bottle (see Mike Stuckey’s article in 2009) has never been subject to an accounting. Your job, counselor, is not to prove that all this true, but to prove that you have a reasonable belief that the debt has been paid in whole or in part to the creditor and that the default doesn’t exist. This creates the issue of fact that allows you to proceed the next stage of litigation, including discovery where most of these cases settle. They settle because the intermediaries who are bringing these actions are doing so without authority or even interest from the investor-creditors.
What is needed, is a direct path between investor creditors and homeowners debtors to settle up and compare notes. This is what the banks and servicers are terrified about. When the books are compared, everyone will know how much is missing, that the investors should be paid in full and that the therefore  the debt does not exist as set forth in the closing papers with the borrower. Watch this Blog for an announcement for a program that provides just such a path — where investors and borrowers can get together, compare notes, settle up, modify or mediate their claims, leaving the investors in MUCH better position and a content homeowner who no longer needs to fear that his world, already turned upside down, will get worse.
It may still be that the homeowner borrower has on obligation, but it isn’t to the creditor that loaned the money that funded the mortgage loan. Any such debt is with a third party obligee whose cause of action has been intentionally blurred so that the pretenders can pretend that they have rights under a mortgage or deed of trust in which they have no interest on a deal where they was no transfer or sale.

SEC looks into Deutsche Bank CDO shorted by Paulson

Tuesday, January 31, 2012
Deutsche Bank is facing an SEC investigation for its role in structuring a synthetic CDO, according to a report by Der Spiegel. The German publication states that the bank’s actions in raising a CDO under its Start programme will come under question after it allegedly allowed hedge fund Paulson to select assets to go into the fund. The bank is then said to have neglected to have told investors about Paulson’s role in the transaction as well as concealing the fact that the hedge fund had taken a short position on the assets, allowing it to profit as the deal collapsed.
According to the article, Goldman Sachs settled a similar case with the SEC for $500 million regarding Goldman’s role in arranging an Abacus CDO.

 

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Fitch cuts Ratings on Goldman, Deutsche, five other large banks

Posted on December 16, 2011 by Neil Garfield

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EDITOR’S COMMENT: Why would regulatory challenges be a threat to the financial viability of the Banks? answer: because the challenges they are talking about drive a stake though the heart of lies perpetuated by those Banks. the result is that they could be required to tell the truth. If they tell the truth, then they have a double whammy — (1) they don’t actually have the assets they report on their balance sheet which would immediately put them in violation of reserve requirements causing the immediate takeover and dissolution of those Banks and (2) they have a huge liability which is also not properly reflected on their balance sheet for damages and buybacks and potentially punitive damages for lying to investors and borrowers. Overstated assets and understated liabilities would place the Banks in negative net worth position and that would cause them to collapse.

This would actually be more of a change in our political system than in our financial system, notwithstanding the scare tactics of TBTF (too big to fail), which is nothing more than a living lie. Dissolution of the mega banks would shift Market power back to the more than 7,000 OTHER banks, and cut the amount of Bank money in politics by about 95% thus breaking the Bank oligopoly. A more decentralised Banking system would result in more intelligent loans being available to credit worthy start-ups and expansion of small businesses, who account for more than 70% of all U. S. Employment. Employment would rise because new jobs would be created. As more people went back to work, more taxes would be paid, thus giving Federal, State and local governments desperately needed tax revenue.

So overall the rating agencies are in agreement: the Mega Banks may be in for hard times. The only reason it isn’t a certainty is they don’t know if the public has the political will to kick the incumbents out of office and restore “order” to our political and economic system.

Fitch cuts Goldman, Deutsche, five other large banks
http://www.reuters.com/article/2011/12/16/us-banks-ratings-fitch-idUSTRE7BE2AO20111216?rpc=71&feedType=RSS&feedName=topNews <http://www.reuters.com/article/2011/12/16/us-banks-ratings-fitch-idUSTRE7BE2AO20111216?rpc=71&feedType=RSS&feedName=topNews>

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FLORIDA SUPREME COURT RIPS UP BANKS’ PLAYBOOK

Posted on December 9, 2011 by Neil Garfield

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EDITOR’S COMMENT: Here is the game:

A party comes into court filing a complaint against someone who is essentially unable to defend themselves. The suit is fake and uses fraudulent documents to support it. In the usual course of events the “defendant” defaults, judgment is entered and the faker gets to enforce the judgment, driving the hapless defenseless person who was sued into bankruptcy and depression, marriage breakups etc. You know the routine.

(By the way the North Caroline Court has stated that just because you failed to object doesn’t mean that the party trying to foreclose doesn’t need to prove its case, which is why I think the last couple of days have been the turning point where borrowers get their day in court and pretender lenders get their days or years in jail).

So back to our example. Enter the borrower, usually not represented by counsel because the legal profession is clueless for the most part on the dynamics of fraud in securitized loans. The borrower challenges the attempt at foreclosure (or any other type of lawsuit where this playbook can be used). The borrower shows the court that the suit is a fake and that the documents were fabricated, forged, false — a fraud upon the court. The trial court dismisses the fake action and agrees to hear a motion for contempt at which the faker will be punished for all its wrongdoing, right?

Not so fast. The Bank Playbook provides easy to understand instructions to lawyers representing the fakers. Force the issue as far as you can but dismiss the action before the motion for contempt can be heard. This will deprive the court of jurisdiction over the case and the Judge will be powerless to enter an order for sanctions. End of case, for now, and maybe we will file using other but better fabricated false documents another day. No risk to the lawyer, the Bank or servicer, or anyone else, leaving the hapless homeowner in the dust. This play has been working perfectly for years. Suddenly it ground to a halt yesterday in Florida, and will most likely spread the word like wildfire as Courts across the country realize they have been played for fools.

So the borrower in this case said “wait a minute!” The borrower/defendant filed an appeal that essentially said that the filing of a false lawsuit with false documents invokes the jurisdiction of the Court and that the Court decides when the case is over, not the litigants, if there are any other important issues to be decided — like committing fraud upon the Court.The borrower contends that the filing of the dismissal did not deprive the Court of jurisdiction, it merely rendered the legal issues presented by the lawsuit to be moot, which is the point that the Florida Supreme Court agreed with.

So the case goes up to the District Court of Appeal which says, well, we don’t know for sure, so we certify the question to the Supreme Court. The faker “settles” with (read that “Pays off”) the borrower under some agreement that is sealed under confidentiality. There are thousands of those confidential agreements now.

So the faker and the borrower sign the agreement and sign a notice to the Supreme Court that the case has been settled and that it is over, done, kaput! In the playbook of the Banks this deprives the Supreme Court of jurisdiction even in a case designated by the lower appellate court as being of great public importance and in which the appellate court below cites their own experience with many cases involving fake claims with fraudulent documents. Not so fast.

The Supreme Court of Florida said quite correctly that WE decide when the case is over, especially when it is of great public importance, and you, faker, don’t  dictate to us when we do or don’t have jurisdiction. If you filed a fake lawsuit with fraudulent documents, we want to consider the options of the trial judge and stop such practices from happening. The fact that the case is moot between you and the the victim of your little game does not mean we can’t hear the case. You can come to oral argument if you like, and you can submit a brief or not. But we ARE going to hear this case and we are going to issue an opinion. FINALLY A COURT WITH THE COURAGE OF ITS CONVICTIONS.

OOPS! BONY, US BANK, BOA, Wells Fargo, Ocwen, Deutsch, Countrywide, JP Morgan, et al now have a serious problem. In prior cases where a court levied sanctions against these fakers, the sanctions have been rather high, including one case in Massachusetts where an infuriated judge levied over $800,000 against the lawyers and the client, Wells Fargo.6 million foreclosures nationwide, most of which fall into the faker category.

What could the liability of the lawyers and the banks be? Well just for starters, you can bet that most of the lawyers are going to be referred to their bar associations for discipline which will result in either suspension or revocation of their license. But beside that here is what awaits the financial industry on 6 million foreclosures.

  • If the fine is $1,000, the total fines will be $6 Billion. But sorry boys, that size fine is less than a slap on the wrist these days so its doubtful that the judge upon learning that a fake suit had been filed with fraudulent documents will not fine the participants — lawyer and client—  far more than that. 
  • If the fine is $10,000, then the total fines will be $60 billion. Sorry again, considering the gravity of the situation, the corruption of title registries, the destructive impact on our society as a whole, most courts are going to go for more than that as well as referring for criminal prosecution and bar grievance procedure. 
  • If the fine is $100,000 each against the lawyers and the client, for each case, which is around what I think the fine is likely to be (at a Minimum), then the total exposure is $1.2 trillion, half against the banks and half against the lawyers.
  • And if they follow the model established in other courts, the fine could be $1 million each against the lawyers and the client, FOR EACH CASE, (if the motion for contempt is brought by the borrower) then the total exposure is around $12 trillion, $6 trillion against the banks and $6 trillion against the lawyers. Considering the most recent revelation of $29 trillion bailouts from the federal Reserve alone on false claims of losses, a fine of one-third that amount doesn’t seem out of line even if the dollar amount sounds high. Bankruptcy anyone?

MAYBE THAT BANK PLAYBOOK WAS NOT SO SMART AFTER ALL.

Settlement won’t prevent Fla. foreclosure hearing

By BILL KACZOR

Associated Press

TALLAHASSEE, Fla. — Parties in a Florida mortgage foreclosure lawsuit focusing on allegations of tainted documents will get their day in the Florida Supreme Court even though neither side wants it.

A sharply divided high court on Thursday refused a request by borrower and lender alike to dismiss the Palm Beach County case. They had sought the dismissal after agreeing to settle the case before the justices could hear it.

In a 4-3 opinion, the majority justices wrote that the borrower’s appeal was too important to dismiss, as it raises a question that “transcends the individual parties to this action because it has the potential to impact the mortgage foreclosure crisis throughout this state.”

That question is whether a trial judge can penalize a party for committing a “fraud on the court” if that party voluntarily dismisses the case before it’s resolved. Two lower courts said they cannot. The high court next will consider arguments on that issue.

The majority wrote that judges and litigants also need guidance from the Supreme Court and that the legal issue has implications beyond mortgage cases.

Florida’s collapsing real estate market has resulted in thousands of foreclosures, but officials have turned up many instances of fraudulent and erroneous filings.

They include documents bearing the signatures of so-called “robo-signers” – people hired to sign foreclosure papers in assembly line fashion without necessarily knowing what’s in them.

Those findings resulted in civil and criminal investigations, the collapse of two major foreclosure law firms and the temporary shutdown of foreclosure filings by many lenders.

The high court’s ruling came in a foreclosure filed by the Bank of New York Mellon. The defendant, Roman Pino, alleged the bank filed a forged document to deceive the court. He asked the judge to penalize the bank by denying it any right to foreclose on the mortgage.

The judge denied his request because the bank had voluntarily dismissed the complaint. The 4th District Court of Appeal affirmed that decision but asked the Supreme Court to rule on the issue, certifying it as a “question of great public importance.”

Pino appealed but then joined the bank in asking the Supreme Court to dismiss the case after they settled.

Chief Justice Charles Canady acknowledged in his dissent that the high court has on occasion rejected a stipulation for dismissal, but he argued that retaining jurisdiction before both sides have submitted written briefs is unprecedented.

The ruling will force the parties to argue a case that neither side wants to pursue, Canady noted.

“They should not be dragooned into litigating a matter that is no longer in controversy between them simply because this court determines that an issue needs to be decided,” Canady wrote.

Justices Ricky Polston and Peggy Quince concurred with Canady’s dissent.

The majority justices, though, wrote it’s Canady’s interpretation that goes against precedent. They said it would require the high court to recede from past decisions that denied dismissals in similar circumstances.

They also noted Pino filed an initial brief before the settlement although the bank had not.
Read more: http://www.miamiherald.com/2011/12/08/2537386/settlement-wont-prevent-fla-foreclosure.html#ixzz1g3eoiucH

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JPM MORGAN TAKES INCONSISTENT POSITION AS TO BEING SUCCESSOR TO WAMU

Posted on October 17, 2011 by Neil Garfield

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SEE Exhibit to Consent Motion-Confidentiality Stip and Order

SEE Consent Motion for Confidential Documents

SEE Deutsche-Bank-Response-to-FDIC-and-JPM-Motions-to-Dismiss

SEE Docket as of October 7, 2011

EDITOR’S ANALYSIS: When it suits JPM Chase, like when they are looking to foreclose, they say they are the successor in interest to WAMU. When it doesn’t suit them, like in a lawsuit with Deutsch over whether there is an obligation to buy back the crappy paper that never was perfected or transferred properly, they say they are not the successor. The truth lies somewhere in between at the option of JPM Chase because fo the crazy way WAMU was “resolved.” But use this as a heuristic guide: the price paid by JPM Chase was about 1% of the total assets of WAMU. Obviously they bought some bank assets and an option on the mortgages — not the assets themselves.

Which brings up the next subject about the “notes” (which are NOT evidence of the complete transaction between the investor and the borrower): When they are foreclosing they point to the fact that the notes were indorsed without recourse. When they litigate amongst themselves they admit that it is with recourse.

Which is it? The answer is in the securitization documents, which is why people need the COMBO report. The notes were never assigned timely, but leaving that out as an issue, they were ALL assigned WITH RECOURSE. Every one of them required the seller to replace a bad note with cash or a comparable note. But the problem is that this creates too much activity to satisfy the passivity standards under the REMIC portion of the Internal Revenue Code, so they stand to lose their tax status as well as their standing.

And that leads to the last point. Why is it that when institutions sue each other over securitization issues, they are entitled to discovery but borrowers have to fight tooth and nail to get the same documents and information? The same Judge is likely to grant  discovery to a litigating institution and deny it to a borrower over essentially the same facts, but on a smaller scale.

Posted by April Charney

Deutsche Bank National Trust Company sued JPMorgan Chase and the FDIC in
2009 claiming breach of contract as to WaMu originated mortgage loans that
were supposed to be transferred into securitized trusts of which DBNTC is
the “trustee”.

> One of the issues in the case is whether WaMu must repurchase mortgage loans
> that did not comply with the “Representations and Warranties” provisions of
> the Trust documents as the loans were in default, in danger of being in
> default, etc. at the time that they were allegedly “transferred” to the
> hundreds of securitized trusts of which DB is the “trustee”.
>
> The Court ordered discovery of the loan files.
>
> JPM Chase has taken the position in this case that it is “not the successor
> in interest to WaMu”, and that it only assumed certain assets and
> liabilities of the failed WaMu as of September 25, 2008, yet JPM Chase has
> filed hundreds of foreclosures where it claims, many times under oath, the
> right to foreclose on the WaMu loans maintaining inconsistantly that it is
> “the successor in interest to WaMu.”

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AZ AG File Amicus Brief Favoring Homeowners

Posted on September 2, 2011 by Neil Garfield

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SEE AZ AG Amicus Vasquez 8-2011 (1)

CASE IS SCHEDULED FOR ORAL ARGUMENT ON SEPTEMBER 22, 20011 IN TUCSON, AZ. CONTRARY TO RUMOR, DO NOT EXPECT A RULING FROM THE COURT ON THAT DATE. THE SUPREME COURT OF ARIZONA WILL TAKE AS MUCH TIME AS IT NEEDS TO MAKE THE DECISION.

JUDGE HOLLOWELL HAS CERTIFIED TWO QUESTIONS ESSENTIAL TO THE OUT COME OF HUNDRED OF THOUSANDS OF FORECLOSURE CASES. ATTORNEY GENERAL THOMAS C HORNE HAS SUBMITTED AN AMICUS (FRIEND OF THE COURT) BRIEF ADVOCATING A FAVORABLE RESULT FOR THE PROTECTION OF THE TITLE SYSTEM, THE MARKETPLACE AND BORROWERS.

The case is Julia Vasquez v Deutsch Bank National Trust Company, as Trustee for Saxon Asset Securities Trust 2005-3; Saxon Mortgage, Inc., and Saxon Mortgage Services, Inc. Supreme Court Case No CV 11-0091-CQ, U.S. Bankruptcy Court Case No: 4:08-bk-15510-EWH. Assisting in the writing of the Amicus Brief were Carolyn R. Matthews, Esq., Dena R. Epstein, Esq., and Donnelly A. Dybus, Esq..

In a a very well -written and well reasoned brief, the Arizona Attorney general takes and stand and makes a very persuasive case contrary to the tricks and shell games of the pretender lenders. It also addresses head-on the contention that that a negative ruling to the banks will cause financial disaster. Just as we have been saying for years here on these pages, the AG makes short shrift of that argument. And the AG takes the bank to task on their “spin” that stopping the foreclosures will have a chilling effect on the housing market and therefore the economy. The absurdity of both positions is exposed for what they are — naked aggression and greed justifying the means to defraud and corrupt the entire housing market, financial industry and the whole of the consumer buying base in this and other countries.

Of particular note is the detailed discussion in the Amicus Brief regarding the recordation of interests in real property. While the brief does not directly attach perfection of liens that violate the provisions of Arizona Statutes, the implications are clear: If the public record does not contain adequate disclosure as to the identity of the interested parties, the document is neither properly recorded, nor is the party seeking to enforce such a document entitled to use that document as though it had been recorded.

 

The use of a double nominee method of identifying the straw-man beneficiary (usually MERS) and a straw-man “lender” (usually the mortgage originator  that was acting only as a conduit or broker) leaves the public without any knowledge as to the identities of the real parties in interest. In the case of a mortgage lien, if it is impossible to know the identity of the party who can satisfy the lien, then the lien is not perfected. The same reasoning holds true with any other document required to be recorded, to wit:  

PUBLIC POLICY OF ARIZONA AGAINST FORECLOSURES: The AG also meets head on the obvious bias in the courts in which the assumption is made that that it is somehow better for society to speed along the foreclosures. Not so, says the AG:

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , | 13 Comments »

DEUTSCH LOSES AGAIN: POOL DID NOT RECEIVE LOAN

Posted on August 24, 2011 by Neil Garfield

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TRANSFER TO POOL AFTER FORECLOSURE INITIATED: VOID

“ The fact that Deutsche had possession of the mortgage, however, is irrelevant to its status as mortgagee. While a promissory note endorsed in blank may be enforced by the party in possession of the note, this is not the case with a mortgage”

““Like a sale of land itself, the assignment of a mortgage is a conveyance of an interest in land that requires a writing signed by the grantor.” Ibanez, 458 Mass at 649. Deutsche had not received a written assignment of the mortgage from MERS prior to May 3, 2011. The fact that it had possession of the mortgage instrument did not render Deutsche the mortgagee and thus it lacked the power to sell the property.”

In re: SIMA SCHWARTZ, Chapter 7, Debtor.
SIMA SCHWARTZ, Plaintiff,
v.
HOMEQ SERVICING, AGENT FOR DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE and DEUTSCHE BANK NATIONAL COMPANY, AS TRUSTEE, Defendants.
Case No. 06-42476-MSH, Adversary Proceeding No. 07-04098.

United States Bankruptcy Court, D. Massachusetts, Central Division.

August 22, 2011.

David G. Baker, Boston, MA, for the plaintiff.
Christopher Matheson, Richard C. Demerle and Christopher Decosta, Michienzie & Sawin, LLC, Boston, MA, for both defendants.
Gary A. Barnes, Sarah-Nell Walsh, Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., Atlanta, GA, for Defendant Deutsche Bank National Trust Company, as Trustee.

MEMORANDUM OF DECISION AND ORDER
MELVIN S. HOFFMAN, Bankruptcy Judge.
After the plaintiff, Sima Schwartz, presented her case in chief during the first day of the trial in this adversary proceeding, upon oral motion of the defendants, HomEq Servicing and Deutsche Bank National Trust Company, as Trustee, I granted judgment on partial findings in favor of the defendants on all counts of the complaint, pursuant to Fed. R. Civ. P. 52(c), made applicable to this proceeding by Fed. R. Bankr. P. 7052. Ms. Schwartz then moved for a new trial as a result of which judgment was vacated on count I of the complaint only.Schwartz v. HomEq Servicing (In re Schwartz), 2011 WL 1331963 (Bankr. D. Mass. Apr. 7, 2011). In count I, Ms. Schwartz alleges that the May 24, 2006 foreclosure sale of her home by Deutsche was invalid because Deutsche did not own the mortgage on the property at the relevant time.1 I reopened the trial so that the defendants could present their case with respect to that count, which they did on June 1, 2011. Based on the evidence and legal submissions presented by the parties, my findings of fact, conclusions of law and order are set forth below.
Jurisdiction and Standing
Core jurisdiction over this case is conferred upon the bankruptcy court by 28 U.S.C. § 157(b)(2)(G) and (O). See Atighi v. DLJ Mortg. Capital, Inc. (In re Atighi), 2011 WL 3303454, at *3 (B.A.P. 9th Cir. Jan. 28, 2011). Ms. Schwartz’s standing to seek relief is based on her property interest in light of the alleged wrongful foreclosure. Brae Asset Fund, L.P. v. Kelly, 223 B.R. 50, 56 (D. Mass. 1998).
Legal Framework
Mass. Gen. Laws ch. 244, § 14 establishes the procedure for a mortgagee to foreclose a mortgage by exercise of the statutory power of sale. The statute provides that prior to a foreclosure sale a notice of the sale must appear weekly for three consecutive weeks in a newspaper either published in or generally circulated in the city or town where the property is located. The Massachusetts Supreme Judicial Court has recently clarified that a foreclosing mortgagee must hold the mortgage as of the date that the first notice of sale is published.U.S. Bank Nat. Ass’n v. Ibanez, 458 Mass. 637, 941 N.E.2d 40 (2011). If the party intending to foreclose the mortgage is not the original mortgagee, a typical state of affairs when a mortgage loan is owned by the trustee of a securitized pool of mortgage loans, then the foreclosing mortgagee must hold a valid assignment of the mortgage prior to publishing the first sale notice.
The Defendants’ Case
It is undisputed that Deutsche was not the original mortgagee of the mortgage on Ms. Schwartz’s home, so it must prove that the mortgage was assigned to it prior to the date when the first foreclosure notice was published. As discussed in the memorandum and order on the plaintiff’s motion for a new trial, while the evidence established that an assignment of the mortgage from Mortgage Electronic Registration Systems, Inc. (“MERS”) to Deutsche was executed on May 23, 2006, the day before the foreclosure sale, this assignment, being well after the notice of foreclosure sale was first published, did not confer on Deutsche the power to foreclose on May 24. The Supreme Judicial Court in Ibanez,however, offered an alternative method for a party to acquire sufficient rights in a mortgage to qualify to foreclose:
Where a pool of mortgages is assigned to a securitized trust, the executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder.
Ibanez, 458 Mass. at 651.
With this in mind, the defendants introduced into evidence at trial all of the agreements tracking the transfer of Ms. Schwartz’s mortgage loan from its originator, First NLC Financial Services, LLC (“First NLC”), to Deutsche, complete with the necessary schedules of the pooled mortgage loans specifically identifying her mortgage as being among those transferred. The defendants argue that these agreements, together with other evidence introduced by them, establish that Deutsche was the holder of the mortgage well in advance of the first publication of the notice of sale.
At trial, Ronaldo Reyes, a Deutsche vice president, testified that he had management responsibility over the administration of the Morgan Stanley Home Equity Loan Trust 2005-4 (the “Trust”) and that Deutsche had always been the trustee of the Trust. He testified that in his capacity as vice president he had access to the books and records of the Trust and was qualified to authenticate and testify about the documents admitted into evidence by the defendants. During the course of his testimony, Mr. Reyes authenticated executed copies of each of the agreements discussed below, and demonstrated that Ms. Schwartz’s mortgage loan was included on the mortgage loan schedules attached as exhibits to several of the agreements. Mr. Reyes testified that each was used in the ordinary course of Deutsche’s business as trustee of the Trust.
The following documents were admitted into evidence: (i) the mortgage on Ms. Schwartz’s home; (ii) the original promissory note executed by Ms. Schwartz, which Mr. Reyes noted was endorsed in blank by First NLC; (iii) the Amended and Restated Mortgage Loan Purchase Agreement (the “Loan Purchase Agreement”) dated as of September 1, 2005 by and between Morgan Stanley Mortgage Capital, Inc. (“MS Mortgage Capital”) and First NLC; (iv) the Assignment and Conveyance Agreement dated September 29, 2005, by and between First NLC and MS Mortgage Capital; (v) the Bill of Sale dated November 29, 2005 by and between MS Mortgage Capital and Morgan Stanley ABS Capital I Inc. (“MS ABS Capital”); and (vi) the Pooling and Servicing Agreement (the “PSA”) dated as of November 1, 2005 by and among MS ABS Capital, HomEq Servicing Corporation, JPMorgan Chase Bank, National Association, First NLC, LaSalle Bank National Association and Deutsche. Mr. Reyes also testified regarding a custodial log that was admitted into evidence for the purpose of proving that Ms. Schwartz’s loan documents were in Deutsche’s custody prior to the date when the first notice of foreclosure sale was published.
Findings of Fact2
1. On July 22, 2005, Ms. Schwartz refinanced the mortgage loan on her property at 23 Sigel Street, Worcester, Massachusetts, executing a promissory note in the amount of $272,000 payable to First NLC and a mortgage securing her obligation under the note naming MERS, solely as nominee for First NLC, its successors and assigns, as mortgagee.
2. The mortgage, which was duly recorded at the Worcester District Registry of Deeds, includes the statutory power of sale under Mass. Gen. Laws. ch 183, § 21 which is invoked by reference to the statute and which permits a mortgagee to foreclose a mortgage by public auction sale of the property upon the mortgagor’s default in performance or breach of any conditions thereof.
3. On May 3, May 10 and May 17, 2006, a notice of foreclosure sale was published in the Worcester Telegram and Gazette stating that “Deutsche Bank National Trust Company, as Trustee,” the “present holder” of the mortgage, intended to foreclose the mortgage by public sale of Ms. Schwartz’s property on May 24, 2006.
4. On May 23, 2006, Liquenda Allotey, described as a vice president of MERS, executed an Assignment of Mortgage for the purpose of assigning the mortgage from MERS to “Deutsche Bank National Trust Company, as Trustee.”
5. Deutsche, in its capacity as trustee of the Trust,3 conducted the foreclosure sale as scheduled on May 24, 2006, bid in its mortgage debt and purchased the property.
6. In its answer, Deutsche admitted that a foreclosure deed conveying the property to itself was recorded on October 13, 2006. There has been no evidence presented of any subsequent conveyance of the property and hence I find that Deutsche remains the record owner of the Sigel Street property.
7. As she testified on the first day of trial, Ms. Schwartz continues to reside in the Sigel Street Property.
8. The original promissory note executed by Ms. Schwartz was endorsed in blank by an officer of First NLC.
9. The original mortgagee as identified in the mortgage on Ms. Schwartz’s home was MERS, as nominee for First NLC, its successors and assigns.
10. In accordance with Section 2 of the Loan Purchase Agreement, First NLC agreed to sell “Mortgage Loans” to MS Mortgage Capital.
11. The Loan Purchase Agreement defines a “Mortgage Loan” as
An individual Mortgage Loan which is the subject of this Agreement, each Mortgage Loan originally sold and subject to this Agreement being identified on the applicable Mortgage Loan Schedule, which Mortgage Loan includes without limitation the Mortgage File, the Monthly Payments, Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds, Servicing Rights and all other rights, benefits, proceeds and obligations arising from or in connection with such Mortgage Loan, excluding replaced or repurchased mortgage loans.
12. On September 29, 2005, by way of the Assignment and Conveyance Agreement, First NLC sold, transferred, assigned, set over and conveyed to MS Mortgage Capital “all right, title and interest of, in and to the Mortgage Loans listed on the Mortgage Loan Schedule attached hereto as Exhibit A.”
13. Ms. Schwartz’s mortgage loan was listed on the exhibit attached to the Assignment and Conveyance Agreement.
14. First NLC, therefore, transferred all of its right, title and interest in Ms. Schwartz’s mortgage loan to MS Mortgage Capital on November 29, 2005.
15. By the Bill of Sale dated November 29, 2005, MS Mortgage Capital, as the “Seller,” transferred to MS ABS Capital “all the Seller’s right, title and interest in and to the Mortgage Loans described on Exhibit A attached hereto.”
16. Ms. Schwartz’s mortgage loan was listed on Exhibit A to the Bill of Sale.
17. MS Mortgage Capital, therefore, transferred its entire interest in Ms. Schwartz’s mortgage loan to MS ABS Capital on November 29, 2005.
18. Section 2.01 of the PSA, which was dated November 1, 2005, provides that the MS ABS Capital, as “Depositor,”
concurrently with the execution and delivery hereof, hereby sells, transfers, assigns, sets over and otherwise conveys to [Deutsche] for the benefit of the Certificateholders, without recourse, all the right, title and interest of the Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust, hereby accepts the Trust Fund.
19. The “Trust Fund” includes all of the mortgage loans listed on an attached mortgage loan schedule.
20. Ms. Schwartz’s mortgage loan was listed on the mortgage loan schedule attached to the PSA.
21. While the PSA provides that the mortgage loans were transferred from MS ABS Capital to Deutsche, “concurrently with the execution and delivery hereof” on November 1, 2005, the Bill of Sale provides that MS ABS Capital did not acquire the mortgage loans until November 29, 2005. The November 2009 PSA indicates, however, that the transaction in which MS ABS Capital would transfer the loans to Deutsch, as trustee of the Trust, would not be consummated until November 29, 2005, which is defined as the “Closing Date.” Therefore, MS ABS Capital transferred Ms. Schwartz’s mortgage loan to Deutsche, as trustee of the Trust, on the Closing Date of November 29, 2005, which is the same date as the Bill of Sale by which MS ABS Capital acquired the loan from MS Mortgage Capital.
22. Section 2.01(b) of the PSA provides that if
any Mortgage has been recorded in the name of Mortgage Electronic Registration System, Inc. (“MERS”) or its designee, no Assignment of Mortgage in favor of the Trustee will be required to be prepared or delivered and instead, the applicable Servicer shall take all reasonable actions as are necessary at the expense of the applicable Originator to the extent permitted under the related Purchase Agreement and otherwise at the expense of the Depositor to cause the Trust to be shown as the owner of the related Mortgage Loan on the records of MERS for the purpose of the system of recording transfers of beneficial ownership of mortgages maintained by MERS.
23. Thus MS ABS Capital did not assign to Deutsche the mortgage on Ms. Schwartz’s home in connection with the transaction through which it transferred Ms. Schwartz’s mortgage loan pursuant to the PSA.
24. In the chain of transactions by which Ms. Schwartz’s mortgage loan was sold, initially by First NLC to MS Mortgage Capital, next by MS Mortgage Capital to MS ABS Capital and finally by MS ABS Capital to Deutsche, the seller sold all of its right, title and interest in the mortgage loans being transferred. However, as the mortgage itself was originally in the name of MERS as mortgagee, and not First NLC, First NLC never held legal title to the mortgage and could not have transferred such title to MS Mortgage Capital. Consequently, neither MS ABS Capital nor Deutsche, as successors to First NLC and MS Mortgage Capital, obtained legal title to the mortgage. This is consistent with § 2.01 of the PSA quoted above.
25. As of November 29, 2005, the Closing Date defined in the PSA, MERS continued to hold legal title to the mortgage on Ms. Schwartz’s home as nominee for First NLC, its successors and assigns.
26. MERS continued to hold legal title to the mortgage until May 23, 2006, when it assigned the mortgage to Deutsche.
27. The custodial log establishes that Deutsche received Ms. Schwartz’s mortgage loan documents, including the promissory note and mortgage instrument, on September 15, 2005 (presumably in anticipation of the November loan sale), and retained custody of these documents until March 27, 2006, when they were sent to HomEq. The custodial log indicates that the documents were sent to HomEq for servicing and lists the reason for the transfer as “foreclosure.” According to the custodial log, the loan documents were returned to Deutsche on May 24, 2006, the day of the foreclosure sale.
Conclusions of Law
In In re Marron, 2011 WL 2600543, at *5 (Bankr. D. Mass. June 29, 2011), I held that where a loan was secured by a mortgage in the name of MERS, even when the loan itself changed hands several times, MERS remained the mortgagee in its capacity as nominee for the original lender, its successors and assigns.4 As MERS was the mortgagee, it had the authority to assign the mortgage to the foreclosing entity. In this case too, while Ms. Schwartz’s loan passed from hand to hand, MERS remained the mortgagee throughout. While MERS held only bare legal title to the mortgage on behalf of Deutsche, the successor to First NLC, until it assigned the mortgage to Deutsche on May 23, 2006, only MERS had the authority to foreclose.
Having determined that MERS, and not Deutsche, held legal title to the mortgage on Ms. Schwartz’s home mortgage as of May 3, 2006, when the notice of the foreclosure sale of her home was first published, it follows that Deutsche did not have the right to exercise the statutory power of sale and to foreclose the mortgage. See, e.g., Novastar Mortgage, Inc. v. Safran, 79 Mass.App.Ct. 1124, 948 N.E.2d 917 (2011) (finding, in a post-foreclosure eviction proceeding, that the foreclosing entity had the burden to prove its title to the property by establishing that the mortgage had been assigned to it by MERS “at the critical stages of the foreclosure process.”). By publishing notice of the foreclosure sale when it was not the mortgagee, Deutsche failed to comply with Mass. Gen. Laws ch. 244, § 14, and thus its foreclosure sale is void. Ibanez, 438 Mass. at 646-47.5 A declaratory judgment to that effect shall enter on count I of the complaint.
SO ORDERED.
Footnotes

1. The complaint is unclear as to the relief Ms. Schwartz seeks as a result of the allegedly invalid foreclosure. In addition to the allegation that the defendants did not own the mortgage, Ms. Schwartz alleges that she was damaged by the foreclosure sale, which “was conducted fraudulently, in bad faith” and to her detriment. I previously found that Ms. Schwartz failed to produce any evidence of the defendants’ intent to defraud her. In addition, Ms. Schwartz failed to establish the extent of her damages or that the foreclosure sale was conducted in bad faith. Though Ms. Schwartz does not expressly request a declaratory judgment as to the validity of the foreclosure, based on the allegation of invalidity in the complaint, and the parties’ arguments in the course of trial, I will consider count I of the complaint to be a request for a declaratory judgment that the foreclosure sale was invalid.
Back to Reference
2. Any finding of fact which should more properly be considered a conclusion of law, and vice versa, shall be deemed as such.
Back to Reference
3. The documents pertaining to the foreclosure sale identify Deutsche as “Deutsche Bank National Trust Company, as Trustee” without identifying the trust.
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4. The sophisticated financial minds who wrought the MERS regime sought to simplify the process of repeatedly transferring mortgage loans by obviating the need and expense of recording mortgage assignments with each transfer. No doubt they failed to consider the possibility of a collapse of the residential real estate market, the ensuing flood of foreclosures and the intervention of state and federal courts. Professor Alex Tabarrok of George Mason University has observed “[t]he law of unintended consequences is when a simple system tries to regulate a complex system.” Alex Tabarrok, The Law of Unintended Consequences, Marginal Revolution (Jan. 24, 2008, 7:47 am), http://marginalrevolution.com/marginalrevolution/2008/01/the-law-of-unin.html.
Back to Reference
5. Deutsche presented sufficient evidence to prove that either it or HomEq, its agent, had possession of both the Schwartz mortgage and promissory note as of May 3, 2011. The note was endorsed in blank, which gave Deutsche the right to enforce the note. The fact that Deutsche had possession of the mortgage, however, is irrelevant to its status as mortgagee. While a promissory note endorsed in blank may be enforced by the party in possession of the note, this is not the case with a mortgage. “Like a sale of land itself, the assignment of a mortgage is a conveyance of an interest in land that requires a writing signed by the grantor.” Ibanez, 458 Mass at 649. Deutsche had not received a written assignment of the mortgage from MERS prior to May 3, 2011. The fact that it had possession of the mortgage instrument did not render Deutsche the mortgagee and thus it lacked the power to sell the property.
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Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , | 39 Comments »

INTIMIDATION: Deutsche Bank Sues Foreclosure Fraud Expert’s Son

Posted on May 14, 2011 by Neil Garfield

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EDITOR’S NOTE: They are getting desperate, but the question is who is “they?” Does Deutsch know that a suit was brought in its name? Deutsch’s actual trust department has nothing to do with these fictitious “Trusts.” Now, just as Colonial sued Reagan in Arizona for just asking a question, Deutsch is suing the son of a foreclosure expert while he is minding his own business studying poetry.

Deutsche Bank Sues Foreclosure Fraud Expert’s Son With No Financial Interest In Her Case

Deutsche Bank Sues Foreclosure Fraud Expert’s Son With No Financial Interest In Her Case

Disgusting…

HuffPO-

But Deutsche Bank wasn’t just going after her. The bank was also attempting to sue her son, Mark Cullen, who is currently pursuing a graduate degree in poetry at the New School in New York. Cullen hasn’t lived in Szymoniak’s house for seven years and is not a party to any aspect of her mortgage — he has no interest in either the property or the loan, and never has had any such interest, according to Szymoniak.

[…]

And other Florida foreclosure experts say it’s difficult to interpret Deutsche Bank’s move as anything other than retaliation for Szymoniak’s media presence. If it is not, in fact, retaliation, they argue, then Deutsche Bank’s lawyers have demonstrated rank incompetence.

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WHISTLEBLOWER SUITS IDENTIFIES FRAUD IN AIG BAILOUT: FOLLOW THE MONEY, NOT THE PAPER

Posted on May 9, 2011 by Neil Garfield

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EDITOR’S ANALYSIS: Don’t get intimidated. This is actually very simple. The Federal Reserve window and other “facilities” were made available to the tune of $7 TRILLION dollars (half of the debt ceiling in its current form) in order to ease the liquidity problem. The belief was that by saving these institutions credit would start flowing. Quite the opposite resulted, as Banks consolidated their gains from the biggest economic scam in world history.

As the suit says, Wall Street firms went to the Fed window and gave them  assets in exchange for money. The problem is that the assets were “impaired” (i.e., fraudulent). They were worthless pieces of paper that were never reviewed by anyone until now. The pools were never filled with assets because no paperwork was ever generated on the actual loans. The paperwork that WAS generated was fake describing a transaction that never took place. And then they even failed to transfer the fake paperwork because each time you use fake paperwork in a new transaction it is another crime or civil violation subjecting you to all kinds of liability.

THE POOLS WERE EMPTY. SO ANY BOND ISSUED BY THE POOL WAS WORTHLESS. THAT IS WHAT WAS USED TO CHEAT THE AMERICAN TAXPAYER AND THE SCAM IS CONTINUING WITH FORECLOSURES ON FAKE PAPERWORK OF A FICTITIOUS TRANSACTION. Where people are confused is that a loan DID get funded, but the loan described in the closing papers did NOT occur. FOLLOW THE MONEY TRAIL. NOT THE DOCUMENT TRAIL. If you follow the money, you win, if you follow the paper, they might win.

Claiming Fraud in A.I.G. Bailout, Whistle-Blower Lawsuit Names 3 Companies

By

The first known whistle-blower lawsuit to assert that the taxpayers were defrauded when the federal government bailed out the American International Group was unsealed on Friday, joining a number of suits seeking to settle the score on losses related to the financial crisis of 2008.

The lawsuit, filed by a pair of veteran political activists from the La Jolla area of San Diego, asserts that A.I.G. and two large banks engaged in a variety of fraudulent and speculative transactions, running up losses well into the billions of dollars. Then the three institutions persuaded the Federal Reserve Bank of New York to bail them out by giving A.I.G. two rescue loans, which were used to unwind hundreds of failed trades.

The loans were improper, the lawsuit says, because the Fed made them without getting a pledge of high-quality collateral from A.I.G., as required by law.

“To cover losses of those engaged in fraudulent financial transactions is an authority not yet given to the Fed board,” said the plaintiffs, Derek and Nancy Casady, in their complaint, filed in Federal District Court for the Southern District of California.

The lawsuit names A.I.G., Goldman Sachs and Deutsche Bank as defendants, but not the Fed.

Senior Fed officials have stated repeatedly that they had to take unusual steps in 2008 because the global financial system was close to breaking down. The Casadys’ lawyer, Michael J. Aguirre, argued that even so, the Fed was required to comply with its own governing statutes. He said that when the Fed bailed out a nonbank, it was required to secure the loan with the same liquid, high-quality collateral it required when lending to a troubled bank.

A spokesman for A.I.G., Mark Herr, said the Casadys’ lawsuit was “devoid of merit” and said Mr. Aguirre appeared to be recycling old and discredited legal theories.

Separately, A.I.G. is now among the companies turning to the courts in hopes of recovering losses from 2008, and seeking restitution from some banks.

A spokesman for Goldman Sachs said he was not familiar with the Casadys’ lawsuit and could not comment on it. A spokeswoman for Deutsche Bank declined to comment.

The litigation shines a critical light on the Federal Reserve’s on-again-off-again power to bail out nonbanking institutions like Wall Street firms and insurance companies. The Fed first got that authority during the Great Depression, but Congress revoked it in 1958. And then, as the legal walls between banking and other financial services began to fall in the 1990s, Congress once again gave the Fed the power to make emergency loans to nonbanks.

The relevant language is contained in a single, murky sentence inserted in a bill passed the day before Thanksgiving in 1991, as members of Congress were rushing to catch their flights home. Former Senator Christopher Dodd added it at the request of Goldman Sachs and other Wall Street firms, which were still stinging from a major market crash in 1987 and eager to empower the Fed to step in if a similar problem happened again.

The Casadys’ lawsuit says the resulting law needs judicial review because it went flying through Congress with little debate and now appears to be feeding high-risk behavior. Investors in nonbanks now expect that the Fed will open a safety net to catch them, should they falter, the suit contends.

“Congress did not show a legislative intent to convert the Federal Reserve into a bank for bailing out failed speculators,” the complaint asserts.

The suit was filed under the False Claims Act, a federal law that permits private citizens to sue on behalf of government agencies if they believe they have knowledge of a fraud. The law gives people a chance to try to recover money for the government and, by extension, the taxpayers. Plaintiffs who succeed typically get a percentage.

Although the bailout of A.I.G. took place over many months and involved a total commitment of $182 billion, the lawsuit focuses on just part of it — two emergency loans, totaling about $44 billion, made at the end of October 2008. The money was used to settle trades involving two big blocks of complex, mortgage-linked securities, some of which were underwritten by Goldman Sachs and Deutsche Bank, and guaranteed by A.I.G.

When A.I.G. went into a free fall in 2008, the Fed extended the two loans to buy up the troubled securities and put them into two special-purpose vehicles, Maiden Lane II and Maiden Lane III, for holding until the turmoil subsided. Earlier this year, the Fed allowed some of the impaired assets to be sold to undisclosed purchasers.

The Casadys say the Fed erred in making the loans, because it needed a pledge of high-quality collateral from A.I.G. and instead got a big portfolio of impaired assets.

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , | 13 Comments »

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