Impact of Serial Asset Sales on Investors and Borrowers

The real parties in interest are trying to make money, not recover it.

The Wilmington Trust case illustrates why borrower defenses and investor claims are closely aligned and raises some interesting questions. The big question is what do you do with an empty box at the bottom of an organizational chart or worse an empty box existing off the organizational chart and off balance sheet?

At the base of this is one simple notion. The creation and execution of articles of incorporation does not create the corporation until they are submitted to a regulatory authority that in turn can vouch for the fact that the corporation has in fact been created. But even then that doesn’t mean that the corporation is anything more than a shell. That is why we call them shell corporations.

The same holds true for trusts which must have beneficiaries, a trustor, a trust instrument, and a trustee that is actively engaged in managing the assets of the trust for the benefit of the beneficiaries. Without the elements being satisfied in real life, the trust does not exist and should not be treated as though it did exist.

TO GET OUR FORENSIC REPORT, CLICK THE LINK

FREE RESEARCH: Go to our home page and enter subject in search bar.

Let us help you plan and draft your answers, affirmative defenses, discovery requests and defense narrative: Contact us now at info@lendinglies.com

954-451-1230 or 202-838-6345. Ask for a CONSULT.

REGISTRATION FORM: You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions.

Purchase an audio seminar now, together with seminar materials

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

About Neil F Garfield, M.B.A., J.D.

=====================

The banks have been pulling the wool over our eyes for two decades, pretending that the name of a REMIC Trust invokes and creates its existence. They have done the same with named Trustees and asserted “Master Servicers” of the asserted trust. Without a Trustor passing title to money or property to the named Trustee, there is nothing in trust.

Therefore whatever duties, obligations, powers or restrictions that exist under the asserted trust instrument do not apply to assets that have not been entrusted to the trustee to administer for the benefit of named beneficiaries.

The named Trustee or Servicer has nothing to claim if their claim derives from the existence of a trust. And of course a nonexistent trust has no claim against borrowers in which the beneficiaries of the trust, if they exist, have disclaimed any interest in the debt, note or mortgage.

The serial nature of asserted transfers in which servicing rights, claims for recovery of servicer advances, and purported ownership of note and mortgage is well known and leaves most people, including judges and regulators scratching their heads.

An assignment of mortgage without a a transfer of the indebtedness that is claimed to be secured by a mortgage or deed of trust means nothing. It is a statement by one party, lacking in any authority to another party. It says I hereby transfer to you the power to enforce the mortgage or deed of trust. It does not say you can keep the proceeds of enforcement and it does not identify the party to whom the debt will be paid as proceeds of liquidation of the home at or after the foreclosure sale.

As it turns out, many times the liquidation results in surplus funds — i.e., proceeds in excess of the asserted debt. That should be turned over to the borrower, but it isn’t; and that has spawned a whole new cottage industry of services offering to reclaim the surplus proceeds.

In most cases the proceeds are less than the amount demanded. But there are proceeds. Those are frequently swallowed whole by the real party in interest in the foreclosure — the asserted Master Servicer who claims the proceeds as recovery of servicer advances without the slightest evidence that the asserted Master Servicer ever paid anything nor that the asserted Master Servicer would be out of pocket in the event the “recovery” of “servicer advances” failed.

The foreclosure of the property proceeds with full knowledge that whatever the result, there are no creditors who will receive any money or benefit. The real parties are trying to make money, not recover it. And whatever proceeds or benefits might arise from the foreclosure action are grabbed by a party in a self-proclaimed assertion that while the foreclosure was brought in the name of a trust, the proceeds go to a different third party in derogation of the interests of the asserted trusts and the alleged investors in those trusts who are somehow not beneficiaries.

So investors purchase certificates in which the fine print usually says that for their own protection they disclaim any interest in the underlying debt, note or mortgages. Accordingly we have a trust without beneficiaries.

The existence of those debts, notes or mortgages becomes irrelevant to the investors because they have a promise from a trustee who is indemnified on behalf of a trust that owns nothing. The certificates are backed by assets of any kind. Even if they were “backed” by assets, the supposed beneficiaries have disclaimed such interests.

Thus not only does the trust own nothing even the prospect of security has been traded off to other investors who paid money on the expectation of revenue from the notes and mortgages claimed by the asserted trust through its named trustee.

In the end you have a name of a trust that is unregistered and never asserted to be organized and existing under the laws of any jurisdiction, trustee who has no duties and even if such duties were present the asserted trust instrument strips away all trustee functions, no beneficiaries, and no res, and no active business requiring administration nor any business record of such activity.

Yet the trust is the entity that  is chosen as the named Plaintiff in foreclosures. But the way it reads one is bound to believe that assumption that is not and never was true or even asserted: that the case involves the trustee bank for anything more than window dressing.

It is the serial nature of the falsely asserted transfers that obscures the real parties in interest in both securities transactions with investors and loans with borrowers. The unavoidable conclusion is that nothing asserted by the banks (players in  falsely claimed securitization schemes) is real.

Can you really call it a loan when the money came from a thief?

The banks were not taking risks. They were making risks and profiting from them. Or another way of looking at it is that with their superior knowledge they were neither taking nor making risks; instead they were creating the illusion of risk when the outcome was virtually certain.

Securitization as practiced by Wall Street and residential “mortgage” loans is not just a void assignment. It is a void loan and an enterprise based completely on steering all “loans” into failure and foreclosure.

Get a consult! 202-838-6345

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

Perhaps this summary might help some people understand why bad loans were the object of lending instead of good loans. The end result in the process was always to steer everyone into foreclosure.

Don’t use logic and don’t trust anything the banks put on paper. Start with a blank slate — it’s the only way to even start understanding what is happening and what is continuing to happen. The following is what you must keep in mind and returning to for -rereading as you plow through the bank representations. I use names for example only — it’s all the same, with some variations, throughout the 13 banks that were at the center of all this.

  1. The strategic object of the bank plan was to make everyone remote from liability while at the same time being part of multiple transactions — some real and some fictitious. Remote from liability means that the entity won’t be held accountable for its own actions or the actions of other entities that were all part of the scheme.
  2. The goal was simple: take other people’s money and re-characterize it as the banks’ money.
  3. Merrill Lynch approaches institutional investors like pension funds, which are called “stable managed funds.” They have special requirements to undertake the lowest possible risk in every investment. Getting such institutional investors to buy is a signal to the rest of the market that the securities purchased by the stable managed funds must be safe or they wouldn’t have done it.
  4. Merrill Lynch creates a proprietary entity that is neither a subsidiary nor an affiliate because it doesn’t really exist. It is called a REMIC Trust and is portrayed in the prospectus as though it was an independent entity that is under management by a reputable bank acting as Trustee. In order to give the appearance of independence Merrill Lynch hires US Bank to act as Trustee. The Trust is not registered anywhere because it is a common law trust which is only recognized by the laws of the State of New York. US Bank receives a monthly fee for NOT saying that it has no trust duties, and allowing the use of its name in foreclosures.
  5. Merrill Lynch issues a prospectus from the so-called REMIC entity offering the sale of “certificates” to investors who will receive a hybrid “security” that is partly a bond in which interest is due from the Trust to the investor and partly equity (like common stock) in which the owners of the certificates are said to have undivided interests in the assets of the Trust, of which there are none.
  6. The prospectus is a summary of how the securitization will work but it is not subject to SEC regulations because in 1998 an amendment to the securities laws exempted “pass-through” entities from securities regulations is they were backed by mortgage bonds.
  7. Attached to the prospectus is a mortgage loan schedule (MLS). But the body of the prospectus (which few people read) discloses that the MLS is not real and is offered by way of example.
  8. Attached for due diligence review is a copy of the Trust instrument that created the REMIC Trust. It is also called a Pooling and Servicing Agreement to give the illusion that a pool of loans is owned by the Trust and administered by the Trustee, the Master Servicer and other entities who are described as performing different roles.
  9. The PSA does not grant or describe any duties, responsibilities to be performed by US Bank as trustee. Actual control over the Trust assets, if they ever existed, is exercised by the Master Servicer, Merrill Lynch acting through subservicers like Ocwen.
  10. Merrill Lynch procures a triple AAA rating from Moody’s Rating Service, as quasi public entity that grades various securities according to risk assessment. This provides “assurance” to investors that the the REMIC Trust underwritten by Merrill Lynch and sold by a Merrill Lynch affiliate must be safe because Moody’s has always been a reliable rating agency and it is controlled by Federal regulation.
  11. Those institutional investors who actually performed due diligence did not buy the securities.
  12. Most institutional investors were like cattle simply going along with the crowd. And they advanced money for the purported “purchase” of the certificates “issued” by the “REMIC Trust.”
  13. Part of the ratings and part of the investment decision was based upon the fact that the REMIC Trusts would be purchasing loans that had already been seasoned and established as high grade. This was a lie.
  14. For all practical purposes, no REMIC Trust ever bought any loan; and even where the appearance of a purchase was fabricated through documents reflecting a transaction that never occurred, the “purchased” loans were the result of “loan closings” which only happened days before or were fulfilling Agreements in which all such loans were pre-sold — i.e., as early as before even an application for loan had been submitted.
  15. The normal practice required under the securities regulation is that when a company or entity offers securities for sale, the net proceeds of sale go to the issuing entity. This is thought to be axiomatically true on Wall Street. No entity would offer securities that made the entity indebted or owned by others unless they were getting the proceeds of sale of the “securities.”
  16. Merrill Lynch gets the money, sometimes through conduits, that represent proceeds of the sale of the REMIC Trust certificates.
  17. Merrill Lynch does not turn over the proceeds of sale to US Bank as trustee for the Trust. Vague language contained in the PSA reveals that there was an intention to divert or convert the money received from investors to a “dark pool” controlled by Merrill Lynch and not controlled by US Bank or anyone else on behalf of the REMIC Trust.
  18. Merrill Lynch embarks on a nationwide and even world wide sales push to sell complex loan products to homeowners seeking financing. Most of the sales, nearly all, were directed at the loans most likely to fail. This was because Merrill Lynch could create the appearance of compliance with the prospectus and the PSA with respect to the quality of the loan.
  19. More importantly by providing investors with 5% return on their money, Merrill Lynch could lend out 50% of the invested money at 10% and still give the investors the 5% they were expecting (unless the loan did NOT go to foreclosure, in which case the entire balance would be due). The balance due, if any, was taken from the dark pool controlled by Merrill Lynch and consisting entirely of money invested by the institutional investors.
  20. Hence the banks were not taking risks. They were making risks and profiting from them. Or another way of looking at it is that with their superior knowledge they were neither taking nor making risks; instead they were creating the illusion of risk when the outcome was virtually certain.
  21. The use of the name “US Bank, as Trustee” keeps does NOT directly subject US Bank to any liability, knowledge, intention, or anything else, as it was and remains a passive rent-a-name operation in which no loans are ever administered in trust because none were purchased by the Trust, which never got the proceeds of sale of securities and was therefore devoid of any assets or business activity at any time.
  22. The only way for the banks to put a seal of legitimacy on what they were doing — stealing money — was by getting official documents from the court systems approving a foreclosure. Hence every effort was made to push all loans to foreclosure under cover of an illusory modification program in which they occasionally granted real modifications that would qualify as a “workout,” which before the false claims fo securitization of loans, was the industry standard norm.
  23. Thus the foreclosure became extraordinarily important to complete the bank plan. By getting a real facially valid court order or forced sale of the property, the loan could be “legitimately” written off as a failed loan.
  24. The Judgment or Order signed by the Judge and the Clerk deed upon sale at foreclosure auction became a document that (1) was presumptively valid and (b) therefore ratified all the preceding illegal acts.
  25. Thus the worse the loan, the less Merrill Lynch had to lend. The difference between the investment and the amount loaned was sometimes as much as three times the principal due in high risk loans that were covered up and mixed in with what appeared to be conforming loans.
  26. Then Merrill Lynch entered into “private agreements” for sale of the same loans to multiple parties under the guise of a risk management vehicles etc. This accounts for why the notional value of the shadow banking market sky-rocketed to 1 quadrillion dollars when all the fiat money in the world was around $70 trillion — or 7% of the monstrous bubble created in shadow banking. And that is why central banks had no choice but to print money — because all the real money had been siphoned out the economy and into the pockets of the banks and their bankers.
  27. TARP was passed to cover the banks  for their losses due to loan defaults. It quickly became apparent that the banks had no losses from loan defaults because they were never using their own money to originate loans, although they had the ability to make it look like that.
  28. Then TARP was changed to cover the banks for their losses in mortgage bonds and the derivative markets. It quickly became apparent that the banks were not buying mortgage bonds, they were selling them, so they had no such losses there either.
  29. Then TARP was changed again to cover losses from toxic investment vehicles, which would be a reference to what I have described above.
  30. And then to top it off, the Banks convinced our central bankers at the Federal Reserve that they would freeze up credit all over the world unless they received even more money which would allow them to make more loans and ease credit. So the FED purchased mortgage bonds from the non-owning banks to the tune of around $3 Trillion thus far — on top of all the other ill-gotten gains amounting roughly to around 50% of all loans ever originated over the last 20 years.
  31. The claim of losses by the banks was false in all the forms that was represented. There was no easing of credit. And banks have been allowed to conduct foreclosures on loans that violated nearly all lending standards especially including lying about who the creditor is in order to keep everyone “remote” from liability for selling loan products whose central attribute was failure.
  32. Since the certificates issued in the name of the so-called REMIC Trusts were not in fact backed by mortgage loans (EVER) the certificates, the issuers, the underwriters, the master servicers, the trustees et al are NOT qualified for exemption under the 1998 law. The SEC is either asleep on this or has been instructed by three successive presidents to leave the banks alone, which accounts for the failure to jail any of the bankers that essentially committed treason by attacking the economic foundation of our society.

Political Lesson: Run Against the Banks

Don’t wait until we find out what Trump really means to do as President. We should make up his mind and express outrage to him and all sitting Senators, Congressman, Governors, State legislators, law enforcement, County and City Government and even the Courts. This election is not over, unless we let it be over and accept more of the same.
Ever since I took my first peek at what was going on in the marketplace for residential mortgage loans, I have been saying that if politicians want to win and be loved, they should run against the banks. The election last night was determined by hatred and disgust. The pundits tells us it was because of bigotry. But if you take the long view you can easily see how most of the population of the U.S., and indeed around the world, has been subjected to the overall view that they don’t matter. If the election of Obama told us anything it was that as a whole we are NOT a bigoted country. We are an indifferent country, if you measure that by who leads us. The arrogance with which average working people have been treated has been virtually unprecedented. The voters were not indifferent last night. Any politician who continues to be aloof and arrogant about the little guy who doesn’t matter should be challenged at the polls in the next election cycle.
 *
While the politicians refused to see it, comfortable in their world view and talking points, the anger of working class Americans has grown rather than diminished by the recognition that the banks and other big businesses pulled the rug out from under us by patently illegal acts — and price gouging — especially in drugs and medical services. The anger consumers felt when the financial system was portrayed as collapsing in 2008-2009 grew, rather than diminished in time.
*
Consumer/voter rage is directly related to the fact that government did nothing about it except to allow working families to bear the entire brunt of a loss created by the banks. People lost their homes, their jobs, their lifestyle while government touted all the progress we were making. That progress never reached tens of millions of Americans. Meanwhile the banks received trillions upon trillions of dollars from the U.S. Treasury, the Federal reserve, and the theft of investor money capped by the bonus of getting ownership of homes that should never have been subjected to foreclosure proceedings.
 *
If this election is being called an upset, ask Bernie Sanders whose meteoric rise in the polls was only tempered by the view that he couldn’t win. He couldn’t win because the democratic party apparatus had already set up a rigged system that made it impossible for Hillary Clinton to lose. Between the 400 “super delegates” already pledged before the primaries began, and tipping the procedures and scales by the DNC in so many ways, no candidate stood a chance of becoming the nominee against Hillary Clinton.
 *
Up until now politicians have been largely successful at misdirection: instead of accepting blame for failure to do their job in office, they have succeeded in getting us to blame each other. Between the Trump and Sanders supporters we actually have a vast majority of Americans who are now insisting that the system change for the benefit of all its citizens. The consistent surveys of people who think the country is headed in the wrong direction clearly point to the fact that their lives are not getting better, their hope is diminished and their world view arises from despair over their economic position in the world.
 *
Trump was right: this was an election of the people versus a corrupt, aloof and arrogant establishment. Despite the obvious advantages of allowing a fair fight in which Sanders could have won the Democratic nomination and possibly the general election, the Democrats chose a candidate who was deeply flawed and deeply indebted to Wall Street. The Democrats may well have selected the only candidate who would lose against Trump. Such is the “wisdom” at the top.
 *
While Trump was also literally indebted to Wall Street through his loans, he never lost track of the fact that people were mad as hell. The party apparatus of both major political parties ignored that, which made the angry voters even angrier. A review of the numbers shows that in virtually every county and precinct the strength of that hatred resulted in lop-sided support for Trump as high as 80% or more.
 *
We have all heard the scream. Now it is time to inform those who are still in Washington DC know that the rigged system has expired. It is the follow through by voters that will determine how the country goes- writing to Congressman and Senators, law enforcement and even the courts, will seal the deal. Let them know that you were voting for real change where the average American citizen is priority #1. There is nothing like an active, informed citizenry to make changes that throw out old self-serving ideas and the politicians who espouse them.
 *
Don’t wait until we find out what Trump really means to do as President. We should make up his mind and express outrage to him and all sitting Senators, Congressman, Governors, State legislators, law enforcement, County and City Government and even the Courts. This election is not over, unless we let it be over and accept more of the same.

Quiet Title “Packages”

The promise by some title search vendors of a cheap lawsuit that will get rid of your mortgage is generally not based in reality. You might be able to beat a foreclosure with title issues but you probably won’t get rid of the mortgage or deed of trust without pleading and proving that the mortgage or deed of trust is completely void — like it never should have existed or doesn’t exist now by operation of law.
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 ===========================

There are many people out there who are pursuing a business model of offering a quiet title package, sometimes using the word “Turnkey.” Most of these people are well-meaning but not lawyers and they are lacking basic legal knowledge. While the title work by people like BPInvestigations is excellent, the promise by some title search vendors of a cheap lawsuit that will get rid of your mortgage is generally not based in reality. You might be able to beat a foreclosure with title issues but you probably won’t get rid of the mortgage or deed of trust without pleading and proving that the mortgage or deed of trust is completely void — like it never should have existed or doesn’t exist now by operation of law.

Personally I think that condition is satisfied by TILA rescission, but the courts are still rebelling against the idea of giving that much power to borrowers. So while I am certain it is correct, I am equally certain that the defense shield raised by the banks is working even though it does not pass muster legally and will probably be struck down again by the US Supreme Court.

While these offers may sound attractive there are many pitfalls and trap doors that will prevent a homeowner from actually achieving anything by focusing on a strategy that is dependent upon a court issuing a declaration quieting title. The very word “quiet” should give you a hint. There must be an actual controversy or dispute involving a present situation requiring the court to decide the rights of the parties. Courts are NOT in the business of issuing advisory opinions.

The Marketing title says it all — it is a “turnkey” “quiet title” package suing for damages. There is no such thing as turnkey title — they don’t know all the possibilities of defects in title. And they won’t know it even after they produce a title report either, although they will have a pretty good list of possibilities of title defects.
*
Without a title expert (usually an attorney) analyzing the title going back to the last time that a real title examiner looked carefully at title to the subject property, nobody knows what is a defect, what can be corrected by affidavit, and what prevents the grantee of an instrument from doing anything with it. This might mean going back 30 years or more.

*

Quiet title is an action in equity that is a complaint for declaratory relief wherein the court says “here are the names of the stakeholders and here is the stake of each holder.” But no court is going to allow the lawsuit for that without pleading a present controversy — because that would be the Court giving legal advice.

So you would have to say “A is the owner of the property but B (or B, C and D) is/are saying it is the owner of the property (or B is saying that it has a valid encumbrance upon the land. I am trying to sell, refinance the land and I can’t complete the transaction because of B’S claim, which I think is bogus because [fill in the blank, e.g., the mortgage is a void or wild instrument because …]. So in order to complete my pending transaction I need a declaration from the court as to whether B is a stakeholder, like they say or B is not a stakeholder like I say.” If you don’t have those elements present the court will dismiss the lawsuit 99 times out of 100.

The promise of damages is bogus. That is an action at law that could be derived from any number of breaches or torts by the defendant(s). It could never derive from a turnkey quiet title package even if there was one. It would be a different lawsuit saying B had this duty, they breached it, or committed an intentional tort, and that was the proximate cause of actual damages to me that include x, y and z.

 

And as many people have found out when they sued for quiet title and had their suit dismissed or judgment entered against them there are two main reasons for that. First, they could not properly plead a present controversy or the competing “stakes” in the property. Second, they could not tie in ACTUAL damages to a breach of duty or intentional tort by the defendant. Proximately caused means legally caused.

Most judges view such lawsuits as “”B is bad. Give me title and whatever monetary damages you think will punish them.” The homeowners are skipping the part that where there are no actual damages you don’t get punitive damages. You can’t sue for JUST punitive damages. If you don’t have actual damages you don’t have standing to sue. The Latin for this is damnum absque injuria. Just because somebody was negligent or greedy doesn’t mean you can sue if you are not a party who suffered actual damages from their illegal act.

Problems with Lehman and Aurora

Lehman had nothing to do with the loan even at the beginning when the loan was funded, it acted as a conduit for investor funds that were being misappropriated, the loan was “sold” or “transferred” to a REMIC Trust, and the assets of Lehman were put into a bankruptcy estate as a matter of law.

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

—————-
I keep receiving the same question from multiple sources about the loans “originated” by Lehman, MERS involvement, and Aurora. Here is my short answer:
 *

Yes it means that technically the mortgage and note went in two different directions. BUT in nearly all courts of law the Judge overlooks this problem despite clear law to the contrary in Florida Statutes adopting the UCC.

The stamped endorsement at closing indicates that the loan was pre-sold to Lehman in an Assignment and Assumption Agreement (AAA)— which is basically a contract that violates public policy. It violates public policy because it withholds the name of the lender — a basic disclosure contained in the Truth in Lending Act in order to make certain that the borrower knows with whom he is expected to do business.

 *
Choice of lender is one of the fundamental requirements of TILA. For the past 20 years virtually everyone in the “lending chain” violated this basic principal of public policy and law. That includes originators, MERS, mortgage brokers, closing agents (to the extent they were actually aware of the switch), Trusts, Trustees, Master Servicers (were in most cases the underwriter of the nonexistent “Trust”) et al.
 *
The AAA also requires withholding the name of the conduit (Lehman). This means it was a table funded loan on steroids. That is ruled as a matter of law to be “predatory per se” by Reg Z.  It allows Lehman, as a conduit, to immediately receive “ownership” of the note and mortgage (or its designated nominee/agent MERS).
 *

Lehman was using funds from investors to fund the loan — a direct violation of (a) what they told investors, who thought their money was going into a trust for management and (b) what they told the court, was that they were the lender. In other words the funding of the loan is the point in time when Lehman converted (stole) the funds of the investors.

Knowing Lehman practices at the time, it is virtually certain that the loan was immediately subject to CLAIMS of securitization. The hidden problem is that the claims from the REMIC Trust were not true. The trust having never been funded, never purchased the loan.

*

The second hidden problem is that the Lehman bankruptcy would have put the loan into the bankruptcy estate. So regardless of whether the loan was already “sold” into the secondary market for securitization or “transferred” to a REMIC trust or it was in fact owned by Lehman after the bankruptcy, there can be no valid document or instrument executed by Lehman after that time (either the date of “closing” or the date of bankruptcy, 2008).

*

The reason is simple — Lehman had nothing to do with the loan even at the beginning when the loan was funded, it acted as a conduit for investor funds that were being misappropriated, the loan was “sold” or “transferred” to a REMIC Trust, and the assets of Lehman were put into a bankruptcy estate as a matter of law.

*

The problems are further compounded by the fact that the “servicer” (Aurora) now claims alternatively that it is either the owner or servicer of the loan or both. Aurora was basically a controlled entity of Lehman.

It is impossible to fund a trust that claims the loan because that “reporting” process was controlled by Lehman and then Aurora.

*

So they could say whatever they wanted to MERS and to the world. At one time there probably was a trust named as owner of the loan but that data has long since been erased unless it can be recovered from the MERS archives.

*

Now we have an emerging further complicating issue. Fannie claims it owns the loan, also a claim that is untrue like all the other claims. Fannie is not a lender. Fannie acts a guarantor or Master trustee of REMIC Trusts. It generally uses the mortgage bonds issued by the REMIC trust to “purchase” the loans. But those bonds were worthless because the Trust never received the proceeds of sale of the mortgage bonds to investors. Thus it had no ability to purchase loan because it had no money, business or other assets.

But in 2008-2009 the government funded the cash purchase of the loans by Fannie and Freddie while the Federal Reserve outright paid cash for the mortgage bonds, which they purchased from the banks.

The problem with that scenario is that the banks did not own the loans and did not own the bonds. Yet the banks were the “sellers.” So my conclusion is that the emergence of Fannie is just one more layer of confusion being added to an already convoluted scheme and the Judge will be looking for a way to “simplify” it thus raising the danger that the Judge will ignore the parts of the chain that are clearly broken.

Bottom Line: it was the investors funds that were used to fund loans — but only part of the investors funds went to loans. The rest went into the pocket of the underwriter (investment bank) as was recorded either as fees or “trading profits” from a trading desk that was performing nonexistent sales to nonexistent trusts of nonexistent loan contracts.

The essential legal problem is this: the investors involuntarily made loans without representation at closing. Hence no loan contract was ever formed to protect them. The parties in between were all acting as though the loan contract existed and reflected the intent of both the borrower and the “lender” investors.

The solution is for investors to fire the intermediaries and create their own and then approach the borrowers who in most cases would be happy to execute a real mortgage and note. This would fix the amount of damages to be recovered from the investment bankers. And it would stop the hemorrhaging of value from what should be (but isn’t) a secured asset. And of course it would end the foreclosure nightmare where those intermediaries are stealing both the debt and the property of others with whom thye have no contract.

GET A CONSULT!

https://www.vcita.com/v/lendinglies to schedule CONSULT, MAKE A DONATION, leave message or make payments.

 

Not even the Federal Government Can Determine Who owns Your Loan

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.

—————-

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.

Schedule A Consult Now!

COVER-UP: Whatever Happenned to Those Settlements?

This is for general information only.

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

Consult a lawyer before making any decisions based upon the content of this article or anything else on this blog.

====================================

see http://www.mpamag.com/news/foreclosure-settlement-funds-misspent-26697.aspx

The media and the Bank lobby keep referring to illegal activity, risky or mismanagement. I call it a cover-up that dwarfs Watergate by comparison. Here are some facts:

  1. Foreclosures are still increasing, despite dozens of articles per day that say otherwise. Those articles are writing about a particular city or county whereas the true numbers can only be measured nationally. Wall Street has creatively used its dominance in the press to get them using the terms that would lead one to believe that the foreclosure crisis in behind us.
  2. This wasn’t negligence. It is intentional, it is fraud, it is illegal and probably criminal. The banks didn’t suddenly wake up one morning with amnesia abut how to make a loan and how to account for it. They also didn’t accidentally destroy the original loan papers. It was intentional. Why did they destroy cash equivalent instruments? Because they had made reports to multiple third parties about the loan that would be readily obvious that (a) the loan did not qualify to be approved (b) that the loan did not qualify for the investment criteria needed by the stable managed funds (pension, for example) and (c) it is much easier on bankers if they admit to negligence than to produce proof of fraud (they obviously had made multiple misrepresentations and sales to multiple third parties).
  3. The foreclosures are for the benefit of the intermediary banks whose self-proclaimed status as agents for unidentified creditors makes a mockery of our marketplace and our judicial system.
  4. The banks were found by administrative and law enforcement agencies to have committed fraud on the courts, to have pushed through foreclosures in which they had no ownership or rights to the alleged loans, that probably was never consummated (in the legal sense) in the first place.
  5. The homeowners whose files were reviewed by investigators and found to have fatal defects were never notified by the investigators or anyone else about the finding and the agreement by the banks. This one example of the wrong-headed policies started by Bush and continued by Obama have been wrong headed and bone-headed.
  6. Hundreds of Billions, approaching $1 Trillion have been paid in settlements by the major banks, many with specific provisions that the settlement was to be to the benefit of homeowners who were illegally foreclosed or who were in foreclosure when the foreclosing party was (a) non existent or (b) a sham naked nominee with no interest in the loan, the note or the mortgage and or (c) a party who has never been disclosed in the courts during foreclosure litigation but who was directing the entire false and fraudulent scheme of “securitization”.
  7. The banks make no bones about it — they admit that the Trusts are and always were empty but have been asserting successfully to Judges who didn’t think through that whether there were actual underlying transcriptions where money exchanged hands or not, is irrelevant because they “hold” the note. So they admit that nobody in the chain of custody upon which they rely ever actually had any financial interest in the alleged “loan” with the homeowner and admit further, upon interrogation that they have no privity of contract with the homeowner.  The banks successfully turned the heads of thousands of judges with the myth of the homeowner getting a free house.
  8. Out of hundreds of billions of dollars in settlements, homeowners have seen virtually nothing — disbursements of less than 1% of the alleged principal or their alleged loan.
  9. It is an inescapable conclusion that the funds for the”Settlements” (a) remain unpaid or (b) resulted in payment of an amount equivalent to a nuisance settlement when the issuer was taking hundreds of thousands of dollars without any right, justification or excuse by proceeding with a foreclosure they have admitted, according to their own audit that the foreclosure was wrongful.

In short what is happening here is that the crimes or illegal activities are ongoing every day and not subject to (a) being barred by the statute of limitations and (b) foreclosure is  a behavior to avoid detection (which is a crime in itself) and (c) each time a Judge enters an order allowing or ordering forced sale, the Court itself is complicit in the cover-up, even if the Court is “unaware” of it.

All of this is presumptively true because of the findings of fact by the investigative and regulatory agencies, whether they are admitted or not by the mega banks. The burden should be placed on the foreclosing party, whose history of fabrication, lying under oath, and forgery SHOULD make the testimony, documents, and representations proffered by counsel for banks presumptively NOT CREDIBLE. Instead Judges have treated them like they are holders in due course where the risk falls entirely on the homeowner who also has the burden of proving defenses against a holder in due course who is not subject to those defenses (but who also doesn’t exist).

In my opinion policy makers, regulators and law enforcement are still functioning under the Wall Street myth that if the mega banks fall so does the economy. It is quite the reverse. If the mega banks fall then banking becomes local again, and there is no such thing as too big to fail. There is not single function performed by a mega bank that couldn’t be done by a small community bank or credit union. The current policy has allowed the mega banks to raise a cloud over everything with their unregulated “Shadow banking” sector which now accounts for around 15-20 times the amount of all the money in the world. That being the case, we are allowing our institutions to be marginalized. When the Fed, or Congress or anyone else attempts to address the problems of economic growth and inequality they are using primitive tools without any real effect.

We have replaced income and currency with debt that is “cash equivalent”. As long as allow that, we will forever be on the brink of the worst depression in history — which history tells us frequently leads to war. As a distraction there are those who point to the National Debt without making any reference to the more important household debt. It is an irrefutable fact that out economy is built on consumption. 70% of our gross domestic product is consumption of goods and services by ordinary consumers. Thus the only rational, practical policy is one that increases consumption. Instead politicians are creating ideological talking points. Where does consumption ordinarily come from? Do those people have the money or credit to make purchases? If they don’t, then what policy will put money in their hands in a manner in which overall consumption increases.

Menendez and Booker Take on Zombie Foreclosures

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

This is for general information only. Get a lawyer.

======================

see http://dsnews.com/news/10-30-2015/senators-call-federal-regulators-to-action-on-zombie-foreclosures

It seems ridiculous. Why would a lender reject a workout, reject modification, reject a short sale and insist on a foreclosure — and then walk away from the property? Why has this not been a center of attention as hundreds of communities, cities and states have been decimated by this phenomenon?

The answer turns on the themes of this blog and several other media outlets but nobody in a position to change the conversation wants to face up to the single true statement about this: somehow the banks are making more money going to foreclosure (and walking away from the property) than doing a workout to save the loan as a valuable asset. The foreclosure sale is worth more to them than the property.

The banks are not stupid. They know that destroying neighborhoods and cities results in a precipitous drop in home values (going to zero in many places). They know that this results in a disastrous deterioration of the value of the security for the alleged loans.

So we are faced with a second undeniable truth: the banks are not losing money on foreclosures, they are making money.

So when Senators like Menendez and Booker from New Jersey write a letter to federal regulators asking them to look into the wild phenomenon of Zombie foreclosures, we can only hope that such Senators and the federal regulators will ask themselves some very simple questions. That is the only way this crisis will be averted and it is a vehicle for bringing down the largest banks who are performing illegal acts every day in foreclosures across the country.

If we go beyond the basic questions, then we start to drill down to the real facts — not the ones that practically everyone assumes to be true.

How could the banks not be losing money on Zombie foreclosures? The loss of the loan and the loss of the property securing the loan obviously reduces the value of the alleged loan to zero. In fact, it creates a liability to the bank for walking away after they kicked out the people who own the house. The City can go after them for taxes and the prospect of liability for attractive nuisance and other torts requires them to pay for insurance or brace for impact when the lawsuit happens. Any normal banker will tell you that this is not an acceptable scenario nor is it industry practice amongst banks who make loans.

Hence the conclusion that the parties who invoking the foreclosure procedures did not make loans — nor did anyone else in their alleged chain. The part of the deal where the lender hands over the cash to the closing agent never happened in those loans. If it had happened then the loan and the property would have value to these banks and other entities. Since it was “other people’s money” involved in that “loan” transaction, the banks simply don’t care what happens to the loan or the property except that THEY want the foreclosures to the detriment of the owners of the property, the detriment to the Pension funds whose money was somehow used to make the alleged loans, the detriment of our communities, and the detriment of government which ramped up to handle all the new housing only to find that their tax base vanished.

So if the banks are not losing money on the alleged default of the borrower, it opens the door to understanding that practically anything else they do would result in profits to the banks who are illegally and fraudulently controlling the foreclosure process. When they bring a foreclosure action they use self proclaimed authority that is presumed to be true even though truth is not involved. They have credibility even though they lack the truth.

It’s a perfect world to Wall Street. They use nonexistent entities as claimants in the foreclosure process thus insulating themselves from liability for wrongful foreclosure when those few cases actually get decided on the merits. The money from the pension funds goes into the pocket of the Wall Street banks instead of those empty Trusts.

The pension funds gets a certificate of ownership and debt from the empty trust and they are contractually bound not to ask questions about any specific loan. Ever wonder why that provision is in every Pooling and Service Agreement. So while intermediary parties have a party with pension money, the pension money was used to fund loans that were underwritten for the purpose of loss instead of the usual profit motive. And by knowing that the loans would fail the banks were able to get even more money by betting on loans that they knew would fail. And then they got even more money by betting on the loss of value of the certificates. And they got even more money when they engaged in the Re-REMIC practice of closing out the old trust and starting a new one. And to add insult to injury, the pension fund keeps getting paid by the wrongdoers from a “reserve fund” consisting entirely of pension money. Pouring salt on that wound is the bank’s hubris in claiming the right to recover “servicer advances” made from the reserve pool — only upon foreclosure sale. And the cherry on top is that the “servicers” who are not servicers sell the right to recover servicer advances in additional securitization schemes.

Homeowners take it personally when the servicer tells them  they were rejected by the investor for a modification (false claim). They think it must be personal because no other explanation makes sense to them. But that is because they don’t have the information on “securitization fail.”

The BIG LIE is that lenders are foreclosing. They are not. In fact, there are no lenders in the legal and conventional use of the word. There are only victims of fraud.

Old Habits Die Hard: Rescission Confusion Continues Despite Supreme Court Clarity

You know something stupid is going on when you see tens of millions of dollars spent on ads enticing consumers to get a loan at 2.99%. There is no profit at that rate so something else is going on — leading to the conclusion that disclosure from the start has been misleading — unknown to the borrower.

===================================

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

This is not a legal opinion on your case. Consult a qualified, knowledgeable licensed attorney in the jurisdiction in which your property is located.

====================================

Let me put it this way: even the borrower lacks the authority to undo the rescission which is effective by operation of law. The loan, the note and mortgage are canceled. If the borrower wants to reinstate them, the borrower would need to get together with the creditor and sign new documents for a new loan transaction.

see Hiding-in-Plain-Sight_-Jesinoski-and-the-Consumer_s-Right-of-Rescind

A recent law review article from the law school at Duke University gets a lot of things right. But it still gets some key points wrong. You will see highlighted portions that raise questions if you click on the link above. But overall it does provide excellent background on the Truth in Lending Act and rescission.

Some of the errors I found —-

The twenty days applies to the duties of the “lender” or “creditor” not to the borrower and the writer completely misses the point in that sentence when he says that the lender must “return the property.” The creditor does not have the property. It might be that this is just poor wording. But as it is written, it is wrong.

There is no procedural bar to asserting the rescission. It is effective by operation of law. That means it is a fact — not a claim yet to be determined. Whether he meant to say that he agreed with what the court was doing or he just got it wrong, I don’t know. Once again we see some very intelligent people who have done a lot of study but still can’t get their heads around a very simple proposition — the statute says the rescission is effective by operation of law. There is nothing left to be done. That means the note and mortgage are void (REG Z and Jesinoski). This is substantive law and not subject to change by any procedural rules.

Footnote 102 is also poorly worded indicating that rescission under common law can be effected without suit. It is ONLY TILA rescission that can cancel the loan without suit.

His conclusion is also poorly worded adding to the confusion out there. He should have said that the rescission is effective by operation of law and that from that point forward the loan contract, the note and the mortgage have been nullified and are void, as stated under Reg Z.

Without this point of clarity the simple TILA rescission “procedure” is lost. The big mistake is that people, judges and lawyers continue to view rescission as a pending claim — despite the US Supreme Court stating that courts cannot interpret a statute without finding ambiguity (and being right about that) they don’t have power to change, add, amend or modify the the express wording of the statute. After rescission is sent there is no pending claim. After rescission is sent there is only the fact that the note and mortgage are gone.

My attempt at clarification would be said as follows: if you are in a court or in a transaction after a notice of rescission has been sent, then the previous note and mortgage no longer exist. No court action may be undertaken on an instrument that does not exist. No transaction can ignore the fact that the note and mortgage were canceled and under Reg Z are void.

Lawyers and some scholars continue to miss the point — despite the Jesinoski decision, unanimously in the US Supreme Court (a place where all arguments cease because it is the court of last resort). Old habits die hard. Sanctity of contract seems to be causing a kind of mental pollution causing many people to continue to assert positions based upon the premise that in order for the loan, mortgage and note to be canceled and rendered void upon mailing the notice of rescission, some court action is required or permitted. Let me put it this way: even the borrower lacks the authority to undo the rescission which is effective by operation of law. The loan, the note and mortgage are canceled. If the borrower wants to reinstate them, the borrower would need to get together with the creditor and sign new documents for a new loan transaction.

Florida Supreme Court Considers Clearing up Conflicts on Statute of Limitations

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

==============================

http://www.dailybusinessreview.com/home/id=1202719316326/Florida-Supreme-Court-to-Visit-LenderFriendly-Foreclosure-Rulings?mcode=1202617073880&curindex=0&slreturn=20150203104522

“Kafaesque” is the term being applied to the state of Florida law on foreclosures. If you have commercial property then you have rights, but if it is your home, then maybe you don’t. Due process has been shattered for homeowners while complete strangers take their homes with the cooperation of Judges who are struggling with the caseload and their own bias about how damaging it would be if debts were not paid. What they are missing is that none of the people foreclosing own any debt and nobody is going to get paid as a result of the foreclosure except third parties with breadcrumbs, if any, left to the actual source of funds for the origination or acquisition of the loans.

Depending upon where you live in Florida the results are different. If you beat the foreclosing party in court, then at least one court thinks that the “bank” can re-foreclose on a subsequent default on a loan and default they failed to prove. Florida’s rule HAD BEEN clear. Banks get one chance to foreclose and if the case goes against them, they get nothing in foreclosure and if the statute of limitations has run they can’t collect on the note either. They can’t come back over and over again until they a get a judge who thinks they got it right. And it didn’t matter before whether the property was commercial or residential.

So now because various districts have interpreted the law differently, the Supreme Court must decide what it had already decided. It is reviewing teh Bartram case and will consider the arguments of all sides. For me, the issue is simple. If the borrower wants to file claims against the lender and he is barred by the statute of limitations, he is done regardless of the merits. What is good for the goose was good for the gander until the courts starting bending the rules to the breaking point. They should be corrected by the Florida Supreme Court.

Fla. Supreme Court Amends Rules For Foreclosure

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

=================================

see 2014-sc13-2384

It would seem that the Florida Supreme Court has been listening and watching very closely. The new rules corroborate many things stated in this blog. Still to come are ruling or rules dealing with discovery in support of the homeowner’s defenses. This is effective for cases filed on or after July 1, 2013.

“After considering the proposed amendments and reviewing the relevant legislation, we amend the Florida Rules of Civil Procedure and forms as reflected in the appendix to this opinion. New language is indicated by underscoring; deletions are indicated by struck-through type. The amendments shall take effect immediately upon the release of this opinion. Because the amendments were not published for comment prior to adoption, interested persons shall have sixty days from the date of this opinion in which to file comments with the Court.2

APPENDIXRULE 1.110. GENERAL RULES OF PLEADING

(a) [No change]

(b) Claims for Relief. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, crossclaim, or third-party claim must state a cause of action and shall contain (1) a short and plain statement of the grounds upon which the court’s jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds ofjurisdiction to support it, (2) a short and plain statement of the ultimate facts showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief to which the pleader deems himself or herself entitled. Relief in the alternative or of several different types may be demanded. Every complaint shall be considered to pray for general relief.

When filing an action for foreclosure of a mortgage on residential real property the complaint shall be verified. When verification of a document is required, the document filed shall include an oath, affirmation, or the following statement:

“Under penalty of perjury, I declare that I have read the foregoing, and the facts alleged therein are true and correct to the best of my knowledge and belief.”

(c) – (h) [No change]

Committee Notes        1971 Amendment. Subdivision (h) is added to cover a situation usually arising in divorce judgment modifications, supplemental declaratory relief actions, or trust supervision. When any subsequent proceeding results in a pleading in the strict technical sense under rule 1.100(a), response by opposing parties will follow in the same course as though the new pleading were the initial pleading in the action. The time for answering and authority for defenses under rule 1.140 will apply. The last sentence exempts post judgment motions under rules 1.480(c), 1.530, and 1.540, and similar proceedings from its purview.

2014 Amendment. The last two paragraphs of rule 1.110(b) regarding pleading requirements for certain mortgage foreclosure actions were deleted and incorporated in new rule 1.115.

Page 5

RULE 1.115. PLEADING MORTGAGE FORECLOSURES

(a) Claim for Relief. A claim for relief that seeks to foreclose a mortgage or other lien on residential real property, including individual units of condominiums and cooperatives designed principally for occupation by one to four families which secures a promissory note, must: (1) contain affirmative allegations expressly made by the claimant at the time the proceeding is commenced that the claimant is the holder of the original note secured by the mortgage; or (2) allege with specificity the factual basis by which the claimant is a person entitled to enforce the note under section 673.3011, Florida Statutes.

(b) Delegated Claim for Relief. If a claimant has been delegated the authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note, the claim for relief shall describe the authority of the claimant and identify with specificity the document that grants the claimant the authority to act on behalf of the person entitled to enforce the note. The term “original note” or “original promissory note” means the signed or executed promissory note rather than a copy of it. The term includes any renewal, replacement, consolidation, or amended and restated note or instrument given in renewal, replacement, or substitution for a previous promissory note. The term also includes a transferrable record, as defined by the Uniform Electronic Transaction Act in section 668.50(16), Florida Statutes.

(c) Possession of Original Promissory Note. If the claimant is in possession of the original promissory note, the claimant must file under penalty of perjury a certification contemporaneously with the filing of the claim for relief for foreclosure that the claimant is in possession of the original promissory note. The certification must set forth the location of the note, the name and title of the individual giving the certification, the name of the person who personally verified such possession, and the time and date on which the possession was verified. Correct copies of the note and all allonges to the note must be attached to the certification. The original note and the allonges must be filed with the court before the entry of any judgment of foreclosure or judgment on the note.

(d) Lost, Destroyed, or Stolen Instrument. If the claimant seeks to enforce a lost, destroyed, or stolen instrument, an affidavit executed under penalty of perjury must be attached to the claim for relief. The affidavit must: (1) detail a clear chain of all endorsements, transfers, or assignments of the promissory note that is the subject of the action; (2) set forth facts showing that the claimant is entitled to enforce a lost, destroyed, or stolen instrument pursuant to section

Page 6

673.3091, Florida Statutes; and (3) include as exhibits to the affidavit such copies of the note and the allonges to the note, audit reports showing receipt of the original note, or other evidence of the acquisition, ownership, and possession of the note as may be available to the claimant. Adequate protection as required under section 673.3091(2), Florida Statutes, shall be provided before the entry of final judgment.

(e) Verification. When filing an action for foreclosure on a mortgage for residential real property the claim for relief shall be verified by the claimant seeking to foreclose the mortgage. When verification of a document is required, the document filed shall include an oath, affirmation, or the following statement:

“Under penalties of perjury, I declare that I have read the foregoing, and the facts alleged therein are true and correct to the best of my knowledge and belief.”

Page 7

FORM 1.944(a). MORTGAGE FORECLOSURE

(When location of original note known)COMPLAINT        Plaintiff, A. B., sues defendant, C. D., and alleges:

1. This is an action to foreclose a mortgage on real property in ……………. County, Florida.

2. On …..(date)….., defendant executed and delivered a promissory note and a mortgage securing payment of the note to …..(plaintiff or plaintiff’s predecessor….. The mortgage was recorded on…..(date)….., in Official Records Book ………. at page ………. of the public records of ……………… County, Florida, and mortgaged the property described in the mortgage then owned by and in possession of the mortgagor, a copy of the mortgage containing a copy of and the note being attached.

3. Plaintiff owns and holds the note and mortgage. (Select a, b, or c)

(a) Plaintiff is the holder of the original note secured by the mortgage. (b) Plaintiff is a person entitled to enforce the note under applicable law because …..(allege specific facts)…..

(c) Plaintiff has been delegated the authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note. The document(s) that grant(s) plaintiff the authority to act on behalf of the person entitled to enforce the note is/are as follows ……………….

4. The property is now owned by defendant who holds possession.

5. Defendant has defaulted under the note and mortgage by failing to pay the payment due …..(date)….., and all subsequent payments …..(allege other defaults as applicable)…….

6. Plaintiff declares the full amount payable under the note and mortgage to be due.

Page 8

7. Defendant owes plaintiff $………. that is due on principal on the note and mortgage, interest from …..(date)….., and title search expense for ascertaining necessary parties to this action.

8. Plaintiff is obligated to pay plaintiff’s attorneys a reasonable fee for their services. Plaintiff is entitled to recover its attorneys’ fees under …..(allege statutory and/or contractual bases, as applicable)……

WHEREFORE, plaintiff demands judgment foreclosing the mortgage, for costs (and, when applicable, for attorneys’ fees), and, if the proceeds of the sale are insufficient to pay plaintiff’s claim, a deficiency judgment.

NOTE: An action for foreclosure of a mortgage on residential real property must contain an oath, affirmation, or the following statement as required by rule 1.115(e).

VERIFICATION        Under penalty of perjury, I declare that I have read the foregoing, and the facts alleged therein are true and correct to the best of my knowledge and belief.

Executed on this …..(date)…..

/s/_________
[Person Signing Verification]

CERTIFICATION OF POSSESSION OF ORIGINAL NOTEThe undersigned hereby certifies:

1. That plaintiff is in possession of the original promissory note upon which this action is brought.

2. The location of the original promissory note is: …..(location)…..

3. The name and title of the person giving the certification is: …..(name and title)

Page 9

4. The name of the person who personally verified such possession is: …..(name)…..

5. The time and date on which possession was verified were: …..(time and date)

6. Correct copies of the note (and, if applicable, all endorsements, transfers, allonges, or assignments of the note) are attached to this certification.

7. I give this statement based on my personal knowledge.

Under penalties of perjury, I declare that I have read the foregoing Certification of Possession of Original Note and that the facts stated in it are true.

Executed on …..(date)…..

/s/_________
[Person Signing Certification]

NOTE: This form is for installment payments with acceleration. It omits allegations about junior encumbrances, unpaid taxes, unpaid insurance premiums, other nonmonetary defaults, and for a receiver. They must be added when proper appropriate. Copies A copy of the note and mortgage must be attached. This form may require modification. This form is designed to incorporate the pleading requirements of section 702.015, Florida Statutes (2013) and rule 1.115. It is also designed to conform to section 673.3011, Florida Statutes (2013), except that part of section 673.3011, Florida Statutes, which defines a person entitled to enforce an instrument under section 673.3091, Florida Statutes. See form 1.944(b). Pursuant to section 702.015, Florida Statutes (2013), a certification of possession of the original promissory note must be filed contemporaneously with the Complaint (form 1.944(a)) or, in the event that the plaintiff seeks to enforce a lost, destroyed, or stolen instrument, an affidavit setting forth the facts required by law must be attached to the complaint (form 1.944(b)).

Page 10

FORM 1.944(b). MORTGAGE FORECLOSURE

(When location of original note unknown)COMPLAINT        Plaintiff, ABC, sues defendant, XYZ, and states:

1. This is an action to foreclose a mortgage on real property in ………. County, Florida.

2. On …..(date)…… defendant executed and delivered a promissory note and a mortgage securing the payment of said note to …..(plaintiff or plaintiff’s predecessor)….. The mortgage was recorded on ……(date)….. in Official Records Book …… at page ….. of the public records of ………. County, Florida, and mortgaged the property described therein which was then owned by and in possession of the mortgagor. A copy of the mortgage and note are attached to the affidavit which is attached hereto as Composite Exhibit “1”; the contents of the affidavit are specifically incorporated by reference.

3. Plaintiff is not in possession of the note but is entitled to enforce it.

4. (select a, b, c, or d) Plaintiff cannot reasonably obtain possession of the note because

(a) the note was destroyed.

(b) the note is lost.

(c) the note is in the wrongful possession of an unknown person.

(d) the note is in the wrongful possession of a person that cannot be found or is not amenable to service of process.

5. (select a, b, c, or d)

(a) At the time the original note was lost, plaintiff was the holder of the original note secured by the mortgage.

(b) At the time the original note was lost, plaintiff was a person entitled to enforce the note under applicable law because …..(allege specific facts)…..

Page 11

(c) Plaintiff has directly or indirectly acquired ownership of the note from a person who was entitled to enforce the note when loss of possession occurred as follows: …..(allege facts as to transfer of ownership)…..

(d) Plaintiff has been delegated the authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note, and the document(s) that grant(s) plaintiff the authority to act on behalf of the person entitled to enforce the note is/are as follows ………………………..(attach documents if not already attached).

6. Plaintiff did not transfer the note or lose possession of it as the result of a lawful seizure.

7. The property is now owned by defendant who holds possession.

8. Defendant has defaulted under the note and mortgage by failing to pay the payment(s) due …..(date(s))….. , and all subsequent payments …..(identify other defaults as applicable)…..

9. Plaintiff declares the full amount payable under the note and mortgage to be due.

10. Defendant owes plaintiff $………. that is due on principal on the note and mortgage, interest from …..(date)….. , and title search expense for ascertaining necessary parties to this action.

11. Plaintiff is obligated to pay its attorneys a reasonable fee for their services. Plaintiff is entitled to recover its attorneys’ fees for prosecuting this claim pursuant to …..(identify statutory and/or contractual bases, as applicable)…..

WHEREFORE, Plaintiff demands judgment foreclosing the mortgage, for costs (and, where applicable, for attorneys’ fees), and if the proceeds of the sale are insufficient to pay plaintiff’s claim, a deficiency judgment.

NOTE: An action for foreclosure of a mortgage on residential real property must contain an oath, affirmation, or the following statement as required by rule 1.115(e).

VERIFICATIONPage 12

Under penalty of perjury, I declare that I have read the foregoing, and the facts alleged therein are true and correct to the best of my knowledge and belief.

Executed on …..(date)…..

/s/_________
(Person Signing Verification)

*****AFFIDAVIT OF COMPLIANCESTATE OF FLORIDA
COUNTY OF ………………..

BEFORE ME, the undersigned authority, personally appeared …..(name)….., who, after being first duly sworn, deposes and states, under penalty of perjury:

1. I am the plaintiff (or plaintiff’s ……….) (identify relationship to plaintiff).

2. I am executing this affidavit in support of plaintiff’s Complaint against defendant and I have personal knowledge of the matters set forth herein.

3. On …..(date)….. , the public records reflect that defendant executed and delivered a mortgage securing the payment of the note to …..(plaintiff/plaintiff’s predecessor)…… The mortgage was recorded on …..(date)….. , in Official Records Book ………. at page ………. of the public records of ………. County, Florida, and mortgaged the property described therein, which was then owned by and in possession of the mortgagor, a copy of the mortgage and the note being attached.

4. (select a, b, c, or d) Plaintiff cannot reasonably obtain possession of the note because

(a) the note was destroyed.

(b) the note is lost.

(c) the note is in the wrongful possession of an unknown person.

Page 13

(d) the note is in the wrongful possession of a person who cannot be found or is not amenable to service of process.

5. (select a, b, c, or d)

(a) At the time the original note was lost, plaintiff was the holder of the original note secured by the mortgage.

(b) At the time the original note was lost, plaintiff was a person entitled to enforce the note under applicable law because …..(allege specific facts)…..

(c) Since the note was lost, plaintiff has directly or indirectly acquired ownership of the note from a person who was entitled to enforce the note when loss of possession occurred as follows: …..(allege facts regarding transfer of ownership)…..

(d) Plaintiff has been delegated the authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note, and the document(s) that grant(s) plaintiff the authority to act on behalf of the person entitled to enforce the note is/are as follows …………………………(attach copy of document(s) or relevant portion(s) of the document(s)).

6. Below is the clear chain of the endorsements, transfers, allonges or assignments of the note and all documents that evidence same as are available to Plaintiff: …..(identify in chronological order all endorsements, transfers, assignments of, allonges to, the note or other evidence of the acquisition, ownership and possession of the note)….. Correct copies of the foregoing documents are attached to this affidavit.

7. Plaintiff did not transfer the note or lose possession of it as the result of a lawful seizure.

FURTHER, AFFIANT SAYETH NAUGHT.

/s/_________
[signature]

/s/_________
[typed or printed name of affiant]

Page 14

STATE OF FLORIDA
COUNTY OF…………..

BEFORE ME, the undersigned authority appeared …..(name of affiant)….. who ….. is personally known to me or ….. produced identification …..and acknowledged that he/she executed the foregoing instrument for the purposes expressed therein and who did take an oath.

WITNESS my hand and seal in the State and County aforesaid, this …..(date)……

/s/_________
NOTARY PUBLIC, State of Florida

Print Name: …………………………

Commission Expires: ……………..

Committee Note        2014 Adoption. This form is for installment payments with acceleration. It omits allegations about junior encumbrances, unpaid taxes, unpaid insurance premiums, other nonmonetary defaults, and for a receiver. Allegations must be added when appropriate. This form may require modification. This form is designed to incorporate the pleading requirements of section 702.015, Florida Statutes (2013), and rule 1.115. It is also designed to comply with section 673.3091, Florida Statutes (2013). Adequate protection as required by sections 702.11 (2013) and 673.3091(2), Florida Statutes (2013), must be provided before the entry of final judgment.

Page 15

FORM 1.944(c) MOTION FOR ORDER TO SHOW CAUSE

PLAINTIFF’S MOTION FOR ORDER TO SHOW CAUSEFOR ENTRY OF FINAL JUDGMENT OF FORECLOSURE        1. Plaintiff is a lienholder of real property located at …..(address)…… or is a ….. Condominium Association/Cooperative Association/Homeowner’s Association……

2. The plaintiff has filed a verified complaint in conformity with applicable law, which is attached.

3. The plaintiff requests this court issue an order requiring defendant(s) to appear before the court to show cause why a final judgment of foreclosure should not be entered against defendant(s).

4. The date of the hearing may not occur sooner than the later of 20 days after service of the order to show cause or 45 days after service of the initial complaint.

ORCOMMENT: Use the following when service is by publication:

4. When service is obtained by publication, the date for the hearing may not be set sooner than 30 days after the first publication.

5. The accompanying proposed order to show cause affords defendant(s) all the rights and obligations as contemplated by applicable law.

6. Upon the entry of the order to show cause, plaintiff shall serve a copy of the executed order to show cause for entry of final judgment as required by law.

7. This is not a residential property for which a homestead exemption for taxation was granted according to the rolls of the latest assessment by the County Property Appraiser.

Plaintiff requests the court review this complaint and grant this motion for order to show cause for entry of final judgment of foreclosure, and grant such further relief as may be awarded at law or in equity.

Page 16

/s/_________
Plaintiff

Certificate of Service

Committee Note

2014 Adoption. This form is designed to comply with section 702.10, Florida Statutes (2013).

Page 17

FORM 1.944(d) ORDER TO SHOW CAUSE

ORDER TO SHOW CAUSE        THIS CAUSE has come before the court on ….. plaintiff’s/lien holder’s….. motion for order to show cause for entry of final judgment of mortgage foreclosure and the court having reviewed the motion and the verified complaint, and being otherwise fully advised in the circumstances, finds and it is

ORDERED AND ADJUDGED that:

1. The defendant(s) shall appear at a hearing on foreclosure on …..(date)….. at ……(time)….. before the undersigned judge, in the …..(county)….. Courthouse at …..(address)…… to show cause why the attached final judgment of foreclosure should not be entered against the defendant(s) in this cause. This hearing referred to in this order is a “show cause hearing.”

2. This ORDER TO SHOW CAUSE shall be served on the defendant(s) in accordance with the Florida Rules of Civil Procedure and applicable law as follows:

a. If the defendant(s) has/have been served under Chapter 48, Florida Statutes, with the verified complaint and original process has already been effectuated, service of this order may be made in the manner provided in the Florida Rules of Civil Procedure; or, if the other party is the plaintiff in the action, service of the order to show cause on that party may be made in the manner provided in the Florida Rules of Civil Procedure.

b. If the defendant(s) has/have not been served under Chapter 48, Florida Statutes, with the verified complaint and original process, the order to show cause, together with the summons and a copy of the verified complaint, shall be served on the party in the same manner as provided by law for original process.

3. The filing of defenses by a motion or verified answer at or before the show cause hearing constitutes cause for which the court may not enter the attached final judgment.

Page 18

4. Defendant(s) has/have the right to file affidavits or other papers at the time of the show cause hearing and may appear at the hearing personally or by an attorney.

5. If defendant(s) file(s) motions, they may be considered at the time of the show cause hearing.

6. Defendant(s)’ failure to appear either in person or by an attorney at the show cause hearing or to file defenses by motion or by a verified or sworn answer, affidavits, or other papers which raise a genuine issue of material fact which would preclude entry of summary judgment or which would otherwise constitute a legal defense to foreclosure, after being served as provided by law with the order to show cause, will be deemed presumptively a waiver of the right to a hearing. In such case, the court may enter a final judgment of foreclosure ordering the clerk of the court to conduct a foreclosure sale. An order requiring defendant(s) to vacate the premises may also be entered.

7. If the mortgage provides for reasonable attorneys’ fees and the requested fee does not exceed 3% of the principal amount owed at the time the complaint is filed, the court may not need to hold a hearing to adjudge the requested fee to be reasonable.

8. Any final judgment of foreclosure entered under section 702.10(1) Florida Statutes, shall be only for in rem relief; however, entry of such final judgment of foreclosure shall not preclude entry of an in personam money damages judgment or deficiency judgment where otherwise allowed by law.

9. A copy of the proposed final judgment is attached and will be entered by the court if defendant(s) waive(s) the right to be heard at the show cause hearing.

10. The court finds that this is not a residential property for which a homestead exemption for taxation was granted according to the rolls of the latest assessment by the county property appraiser.

Page 19

DONE AND ORDERED at …..(county)…..Florida …..(date)……

/s/_________
CIRCUIT JUDGE

Copies to:

Committee Note        2014 Adoption. This form is designed to comply with section 702.10(1), Florida Statutes (2013).

Page 20

FORM 1.996(a). FINAL JUDGMENT OF FORECLOSURE

FINAL JUDGMENT        This action was tried before the court. On the evidence presented

IT IS ADJUDGED that:

1. Amounts Due. Plaintiff, …..(name and address)……, is due

Pretender Mender: Foreclosure Crisis Continues to Rise Despite Obama Team Reports

Despite various “reports” from the Obama Administration and writers in the fields of real estate, mortgages and finance, the crisis is still looming as the main drag on the economy. Besides the fact that complete strangers are “getting the house” after multiple payments were received negating any claim of default, it is difficult to obtain financing for a new purchase for the millions of families who have been victims of the mortgage PONZI scheme. In addition, people are finding out that these intermediaries who received an improper stamp of approval from the courts are now pursuing deficiency judgments against people who cooperated or lost the foreclosure litigation. And now we have delinquency rates rising on mortgages that in all probability should never be enforced. And servicers are still pursuing strategies to lure or push homeowners into foreclosure.

For more information on foreclosure offense, expert witness consultations and foreclosure defense please call 954-495-9867 or 520-405-1688. We offer litigation support in all 50 states to attorneys. We refer new clients without a referral fee or co-counsel fee unless we are retained for litigation support. Bankruptcy lawyers take note: Don’t be too quick admit the loan exists nor that a default occurred and especially don’t admit the loan is secured. FREE INFORMATION, ARTICLES AND FORMS CAN BE FOUND ON LEFT SIDE OF THE BLOG. Consultations available by appointment in person, by Skype and by phone.

———————————

Most people simply allowed the foreclosure to happen. Many even cleaned the home before leaving the keys on the kitchen counter. They never lifted a finger in defense. As predicted many times on this blog and in my appearances, it isn’t over. We are in the fifth inning of a nine inning game.

Losing homes that have sometimes been in the family for many generations results in a sharp decline in household wealth leaving the homeowner with virtually no offset to the household debt. Even if the family has recovered in terms of producing at least a meager income that would support a down-sized home, they cannot get a mortgage because of a policy of not allowing mortgage financing to anyone who has a foreclosure on their record within the past three years.

To add insult to injury, the banks posing as lenders in the 6 million+ foreclosures are now filing deficiency judgments to continue the illusion that the title is clear and the judgment of foreclosure was valid. People faced with these suits are now in the position of having failed to litigate the validity of the mortgage or foreclosure. But all is not lost. A deficiency judgment is presumptively valid, but in the litigation the former homeowners can send out discovery requests to determine ownership and balance of the alleged debt. Whether judges will allow that discovery is something yet to be seen. But the risk to those companies filing deficiency judgments is that the aggressive litigators defending the deficiency actions might well be able to peak under the hood of the steam roller that produced the foreclosure in the first instance.

What they will find is that there is an absence of actual transactions supporting the loans, assignments, endorsements etc. that were used to get the Court to presume that the documents were valid — i.e., that absent proof from the borrower, the rebuttable assumption of validity of the documents that refer to such transactions forces the homeowner to assume a burden of proof based upon facts that are in the sole care, custody and control of the pretender lender. If the former homeowner can do what they should have done in the first place, they will open up Pandora’s box. The loan on paper was not backed by a transaction where the “lender” loaned any money. The assignment was not backed by a purchase transaction of the loan. And even where there was a transfer for value, the “assignment turns out to be merely an offer that neither trust nor trustee of the REMIC trust was allowed to accept.

All evidence, despite narratives to the contrary, shows that not only have foreclosures not abated, they are rising. Delinquencies are rising, indicating a whole new wave of foreclosures on their way — probably after the November elections.

http://www.housingwire.com/blogs/1-rewired/post/31089-are-we-facing-yet-another-foreclosure-crisis

http://www.newrepublic.com/article/119187/mortgage-foreclosures-2015-why-crisis-will-flare-again

http://susiemadrak.com/2014/08/25/here-comes-that-deferred-mortgage-crisis/

Why You Need an Expert Witness and Why You Should be Aggressive in Discovery

MISSION STATEMENT: I believe that the mortgage crisis has produced manifest evil and injustice in our society. I believe our recovery will never reach the majority of struggling Americans until we restore equal protection for all citizens and especially borrowers in our debt-ridden society. LivingLies is the vehicle for a collaborative movement to provide homeowners with sufficient resources to combat bloated banks who are flooding the political market with money. We provide thousands of pages of free forms, articles and discussion of statutes, case precedent and policy on this site. And we provide paid services, books and products that enable us to maintain an infrastructure to provide a voice to the victims of Wall Street corruption.

For further information on donations, services and assistance, please call 954-495-9867 nor 520 405 1688.

There are three central strategies that need to be pursued with vigor. The Banks have once again moved the goal posts because they are starting to lose cases with increasing frequency when confronted with the requirement that they actually prove their case with facts instead of presumptions. They are attacking the need for discovery, the need for an expert witness, and the need for foundation of fabricated documents by leveraging certain legal presumptions to achieve results that were never intended to be used to win a case that they would lose if they had to prove their case with actual facts from a witness who has personal knowledge.
Yet that is exactly what is happening. It happens almost automatically in non-judicial foreclosures and it happens most of the time in judicial states. “Legal presumptions” are being manipulated to win an unwinnable case. Those presumptions are for expedience and not to slant cases in favor of a litigant who is wrong.
In Discovery it is important to set a hearing on the blanket objections that are commonly filed by the Banks without any obligation on their part to set those objections for hearing. So it is up to the borrower to set the objections for hearings. Lawyers are finding that they must also file a motion to compel and that without a compelling memorandum of law supporting discovery or supporting the need for an expert witness, the banks will control the narrative by maintaining the impression that laws and presumptions about negotiable instruments are the only issues.For the Judge, the real issues are hidden from view, so you must reveal them. The latest iteration the the Bank tactics is the “Self-authenticating” document which is the subject of another article.
The central theme is always the same. The Banks can’t win on the actual facts, so they are relying upon and leveraging certain rules of evidence that allow certain documents to be admitted into evidence, where the contents of those documents are taken as true (despite the fact that they are barred by the hearsay rule) and the Judges are treating the contents as true over the objection of counsel for the borrower. Like Judicial notice, such documents might be admissible for the limited purpose of acknowledging their existence, but their contents are very much in issue.
However, many judges disregard the notion that the contents are at issue unless the borrower produces compelling evidence that the facts in the document are false. In my opinion, it is wrong to require a defendant who has no access to the actual facts — the money trail — to bear the burden of proof and doubly wrong when the borrower has asked for exactly that information through statutory, formal, informal and discovery requests only to be met with stonewalling.
My thought is that this is an opportunity to educate the judge — against what he or she wants to hear. It is an opportunity to get him to hear YOUR narrative twice. Iadvise lawyers to file a memorandum in opposition to objections and file a motion to compel to make your record. Present a credible argument for the need for the borrower to get information that either lies solely in the hands of theforecloser or in the hands of others who are co-venturers with theforecloser.The need for an expert is evident from the section of the PSA which is entitled “Definitions” which uses words, concepts, business processes, lending and practices that are outside of the statutory scheme for the transfer of loans. The same arguments exist for enforcing discovery. Attach a copy of the PSA Definitions section to your memo. Despite the current trend of the Banks toward introducing the PSA as an exhibit at trial, they continue to argue that the borrower has no standing to contest whether the procedures and restrictions of the PSA are relevant in a foreclosure case. Many judges agree. I believe they are wrong and that this is an evasion of the truth with the help of the Court.

They may seem unrelated but they are identical — only the other side has or does not have the actual evidence of the transactions that are presumed to exist by virtue of some document they are producing like an assignment, a mortgage, a note, or a notice. To the extent that they are responsive to discovery, the need for an expert diminishes or is reduced.

The plaintiff is alleging that a trust owns the mortgage and that various parties have authority to service, receive documents and pay for the the origination of acquisition of loans. It is only the PSA that establishes the right of the Plaintiff forecloser or beneficiary under a deed of trust to pursue foreclosure.

The very essence of the defense is that the Plaintiff does not own the loan, is not a holder with rights to enforce and is not a holder in due course because the plan laid out by the PSA, was never followed. That starts with the conclusion that the trust was never funded and therefore could not have the resources to pay for the origination or acquisition of loans. The defense theory is that based upon the pleadings and proof of the Plaintiff, it is a stranger to the loan transaction despite a snow storm of paper creating appearances to the contrary.

The Plaintiff has not alleged it is a holder in due course. Thus by law they are subject toall of the potential defenses of the borrower starting with the processes that began in the application stage for the loan, the presence of an assignment and assumption agreement that governed theactual events that occurred at closing — includingthe fact that the named party identified as “lender” was not the source of the loan and had no rights under the agreement with third parties toperform any act with respect to the loan except topermit their name to be used as a nominee.This was a table funded loan in which an undisclosed third party funded the loan. The importance of that is that the third party should have been identified on the note and mortgage and the mortgage should not have been executed, delivered or recorded. It is ONLY with the help of an expert who understands the terms and processes that are outside the norm of conventional lending — which is already so complex that Federal law requires that summaries and good faith estimates and disclosure are required to be delivered to the borrower prior to closing.

The plaintiff is taking two opposite positions at the same time — first that they have a trust that exists, that has engaged in business pursuant to the requirements of the PSA and who has paid for the origination or acquisition of the loan. Second, that it doesn’t matter whether the trust exists or owns the loan because they are a holder, and they want this court to presume that being a holder creates a presumption under state law that as such, they have the rights to enforce. Hence they want presumption to triumph over fact.
Theirposition is that they can close the matter of refunds and repurchasing obligations with the creditors by foreclosing the mortgage and getting a judgment on the note. Both the investors and the borrowers think otherwise.The defense theory of the case is that the trust was never funded nor used in this transaction and thus should not be allowed to enforce a loan that it never owned, funded, originated or acquired. The initial proof lies in the pleading of the Plaintiff in judicial cases. They never assert that they are a holder in due course, the elements of which are payment of value for the loan, acting in good faith and without knowledge of the borrower’s defenses. Through aggressive and relentless pursuit of truth in discovery (which only requires the possibility that it might lead to admissible evidence) you can easily establish that they are not claiming that the Trust was acting in bad faith or with knwoeldge fo the borrower’s defenses (although in some situations that might also be in issue). That leaves the single element of payment for the loan.

Each PSA sets forth the elements of a holder in due course for the loan to be accepted by the trustee. If the allegation is onlythat that there is a holder, or even a holder with rights to enforce, the only conclusion, from their own pleadings is that the trust has not paid for this loan. If it has not paid for the origination or acquisition of the loan, the Trust has no reasonable basis for claiming any interest in it. Hence it shouldn’t be suing for collection or foreclosure. And the allegation that the Trust or representative is a holder is contrary to the presumption underlying court proceedings that the Trust has paid money and will lose money if the loan is not enforced. The truth is that the investors will lose money if the loan IS enforced.The defense theory of the case is that there is a direct debtor-creditor relationship between the investors, as creditors and who should have been on the note and mortgage but were not, in order to create the illusion of a veil in which the investors would not be liable for fraudulent, deceptive or shady lending practices.

And the defense theory of the case is that the securitization plan under which the investors were supposedly parties through the Trust and the PSA never occurred and that therefore the mortgage was defective on its face for naming the wrong lender and for not disclosing, as required by Federal and Florida law all the parties to the transaction and all the intermediaries were were receiving compensation and profits arising from the origination of the loan. — since it was the investor funds that were used in the origination or acquisition of the loan.

Since we can presume that the distance of the Trust from theactual origination eliminates any questionas to whether they were proceeding in good faith IF they accepted the note and mortgage, we must then presume that were acting in good faith and without notice of the borrower’s defenses. Those are two out of three of the elements for a holder in due course.By alleging that the Trust owns the loan, that would by definition mean that that if the PSA was followed the Trust was intended to be a holder in due course — having paid value for the loan in good faith and without knowledge of the borrower’s defenses.

That would mean that the PSA requires the Trust to be a holder in due course, because that would prevent the borrower from raising most defenses against the Trust when it seeks to enforce the loan. If it is not a holder in due course, the Trust provisions bar acceptance of the loan. Hence any allegation to the contrary is void under New York State law.

Thus the plaintiff is trying to slip by on two conflicting theories — that the trust owns the loan and that the trust can enforce it just by alleging it is a holder despite the fact that the trust is a stranger to the loan transaction and never transacted any business in which it acquired ownership of the loan. This leaves the actual creditor — a group of investors who were in the same darkness as the borrower — without having received the truth when the transaction was proposed to either of them.
What is interesting here is that the allegation is not that the trust is a holder in due course which can only mean that the Trust never paid consideration for the ownership of the loan. And the acceptance of the loan by the trustee has not been alleged because it most likely never happened because the transfer was outside of the cutoff period.The cutoff period exists for two reasons — to get certain tax advantages for the trust beneficiaries who are the real creditors and to prevent any defective loans from coming into the trust that would have an adverse consequence to the trust and its beneficiaries.

And the fact that the Trust is governed by New York State law means that any act that is expressly prohibited by the PSA is void not voidable. So the assignment is a cover-up for what really happened.

For the loan to be included in the pool of loans that form the res of the trust, the trustee must accept the loan. That acceptance is manifest after the cutoff period when the pool is closed. After that individual acceptances based upon opinions of counsel must be documented. None of that happened.

At best it is an offer that could never be accepted by the trust — because there was no acceptance by the trustee who could not accept because it would be a void act both because of the cutoff period and the fact that it produce adverse consequences in both tax treatment and actual money paid to them to allow the late deposit of a loan that has been declared in default). See the provisions for acceptance by the Trustee.

An expert witness steeped in the language and practice of investment banking and the securitization of loans is necessary to explain how this transaction must be interpreted and the conclusion that the investors are the direct creditors — not the trust — because their money was mismanaged, as the investors have alleged in their own complaints against the underwriters.

At worst, it is, as the investor suits and the suits by government and insurers allege outright fraud in which the money and the documents were intentionally managed in a way that was to the detriment of both the creditors and the debtor and ultimately the government and society.

The second point in the defense is that the documents submitted by the Plaintiff are not supported by anything because they have refused to provide appropriate responses to discovery that would show the actual authority to represent the actual creditors, based upon the actual creditors granting them that authority.At trial documents will be admitted for the forecloser if you have failed to enforce discovery. Admission into evidence is barred if they have failed to respond even after being ordered to do so by the court — but those cases don’t go to trial. They are settled. And that is the point.

It Was the Banks That Falsified Loan Documents

I know it doesn’t make sense. Why would a lender falsify documents in order to make a loan? I had a case in which a major regional bank had their loan representatives falsify loan documents by having the borrower certify that there were houses on his two vacant lots. The bank swore up and down that they were never involved in securitization.

When the client refused to make such a false statement — the bank did the loan anyway AS THOUGH THE NONEXISTENT HOMES WERE ON THE VACANT LOTS. Thus they loaned money out on a loan that was guaranteed to lose money unless the borrower simply paid up despite the obvious loss. The borrower’s error was in doing business with what were obviously unsavory characters. True enough. But he was dealing with the regional bank in his area that had the finest reputation in banking.

He figured they knew what they were doing. And he was right, they did know what they were doing. What he didn’t know is that they were doing it to him! And they were doing it to him in furtherance of a larger fraudulent scheme in which investors were systematically defrauded.

When I took the client’s history all I had to hear was this little vignette and I knew (a) the bank was involved in securitization and (b) this loan was securitized BEFORE the closing and even before any application for loan was solicited or accepted by the bank. The client balked at first, not believing that a bank would openly declare its non-involvement with Wall Street when the truth would so easily be known.

But the truth is not easily known — especially when the bank is involved in “private label” trusts in which there are no filing with the SEC or other agencies.

The real question is why would the bank ask the borrower to certify the existence of two homes that were never built? Why would they want to increase their risk by giving a loan on vacant land that supposedly had improvements? Or to put it bluntly, Why would a bank try to cheat itself?

The answer is that no bank, no lender, no investor would ever try to cheat themselves. The whole purpose of our marketplace is to allow market conditions to correct inefficiencies and moral hazards. So if the bank was cheating or lying, the only rational conclusion is not that they were lying to themselves, but rather lying to someone else. They were increasing the risk of non repayment and decreasing the probability that the loan would ever succeed, while maximizing the potential for economic loss to the lender. Why would anyone do that?

The answer is simple. These were not “overly exuberant” loans, misjudgments or “risky” behavior situations. The ONLY reason or bank or any lender or investor would engage in such behavior is that it was in their self interest to do it. And the only way it could be in their self interest to do it is that they were (a) not lending the money and (b) had no risk of of loss on any of these loans. There is no other conclusion that makes any sense. The bank was being paid to crank out loans that looked valid and viable on their face, but in fact the loans were neither valid nor viable.

Why would anyone pay a bank or other “originator” to pump out bad loans? The answer is simple again. They would pay the originator because they were being paid to solicit originators who would do this and then aggregate over-priced, non-viable loans into bundles where the top layer contained apparently good loans on credit-worthy individuals. And who would pay these aggregators? The CDO manager for the broker dealers that sold toxic waste mortgage bonds to unwitting investors. As for the risk of loss they created an empty unfunded trust entity upon whom they would dump defaulted loans after the 90 day cutoff period and contrary to the terms of the trust.

So it would LOOK LIKE there was a real lending entity that had approved, directly or indirectly, of the the “underwriting” of a loan. But there was no underwriting because there was no need for underwriting because the originators and aggregators never had a risk of loss and neither was the CDO manager of the broker dealer exposed to any risk, nor the broker dealer itself that did the underwriting and selling of the mortgage bonds.

Reynaldo Reyes states that “it is all very counter-intuitive.” That is code for “it was all a lie.” But we keep treating the securitization infrastructure as real. In the 2011 article (see below) in Huffpost, the Federal Reserve cited Wells Fargo for such behavior — and then the Federal Reserve started buying the toxic waste mortgage bonds at the rate of some $60 billion PER MONTH, which is to say that approximately $3 Trillion of toxic waste mortgage bonds have been purchased by the Federal Reserve from the Banks. The Banks settled with investors, insurers, guarantors, loss sharing agencies, and hedge counterparties for pennies on the dollar, but so far those settlements total nearly $1 Trillion, which is a lot of pennies.

Meanwhile in court, lawyers are neither receiving nor delivering the correct message in court. They seek a magic bullet that will end the litigation in their favor which immediately puts them in a classification of lawyers who lose foreclosure defense cases. The bottom line: the lawyers who win understand at least most of what is written in this article, have drawn their own conclusions, and are merciless during discovery and/or at trial. Then the opposition files a notice of voluntary dismissal or judgment is entered for the homeowner “borrower.” Right now, these losses are acceptable to banks who are still playing with other people’s money. If lawyers did their homeowner and litigated these cases aggressively, the bank’s illusion of securitization would end. And THAT means most foreclosures would end or never be started.

Wells Fargo Illegally Pushed Borrowers into SubPrime Mortgages

JP Morgan Sues FDIC for WAMU Cash Over Disputed Mortgage Bonds

EDITOR’S NOTE: The dots are starting to get connected. Here JP Morgan who said they were the successor for everything that was WAMU turns out to be arguing that this didn’t actually happen and that some money is still left in the WAMU “estate.” The issue that is not raised is what else is in the WAMU estate? I content that there are numerous loans or claims to loans that were never transferred to anyone successfully and I think the FDIC and JPM both know that. Chase is trying to limit its exposure for bad bonds while at the same time claiming ownership or servicing rights for the underlying mortgages.

Which brings me to a central procedural point: if these cases are to be properly litigated such that the truth of the transaction(s) comes out, then it cannot be done on the rocket docket of foreclosures. It should be assigned to regular civil litigation or even better complex litigation because the issues cannot be addressed in the 5-10 minutes that are allowed on the rocket docket.

——————————————————————

  • JPMorgan (JPM) has sued the Federal Deposit Insurance Corp. for a portion of the $2.7B remaining in the FDIC receivership that liquidated Washington Mutual following the sale of its branches and deposits to JPMorgan for $1.88B during the financial crisis in 2008.
  • The lawsuit is the latest development in the dispute between JPMorgan and the FDIC over who should assume Washington Mutual’s legal liabilities, such as those related to the sale of problematic mortgage bonds.
  • Meanwhile, JPMorgan has been sued by the State of Mississippi for alleged misconduct while going after credit-card users for missed payments. The bank’s sins include pursuing consumers for money they didn’t owe, Mississippi said.
  • The state is the second to sue JPMorgan over the issue, the other being California, while 15 others are examining the matter. JPM is already in early settlement talks with 14 of them.

Read more at Seeking Alpha:
http://seekingalpha.com/currents/post/1470511?source=ipadportfolioapp_email

Modifications Up, Foreclosures Down, Scams Up

Thanks to all who inquired about my health. I am fine. Just busy with cases getting ready for trial.

Recent trends show a number of things. First, more actual judgments are being rendered in favor of borrowers. Sometimes, it is procedural, like the statute of limitations that limits actions to 5 years in Florida. But most times, it is simply that the Plaintiff or forecloser could not make its case. They produce professional witnesses who know nothing, were previously employed outside of the industry and are basically being thrown under the bus by the banks who already know they will lose if the homeowner’s attorney is an experienced trial attorney.

Recent laws and local rules are getting more and more judges applying laws and rules that require the forecloser to have their ducks in a row. The answer is that they have no ducks, so they can’t get them in a row or any other configuration. They are strangers to the transaction with the homeowner. And there is a growing awareness that homeowners are not seeking a free house but a true lender or creditor with whom they can engage in meaningful discussions. But the banks are still successful in insulating the real parties in interest from any contact with each other or even any knowledge of who the other party is or where they can be contacted.

As one Judge told me recently, he has come to realize that clearing his docket is easier than he thought. Just require the a party seeking foreclosure to prove that they or the predecessor actually made a loan to the homeowner. Add to that a comprehensible chain of documentation that tracks actual transactions, and you end up with nearly zero foreclosures. This is especially true where the foreclosing party has failed to allege the existence of a loan and instead has alleged only that paperwork was signed. Judges who continue to “infer” that the loan was made are skipping a basic premise of pleading. Either it happened or it didn’t. The use of inference requires the homeowner to state an affirmative defense and prove it when he should only be required to deny that allegation. Motions to dismiss based on that premise are starting to be granted.

So it is no wonder that I am getting daily calls from previously intractable parties seeking foreclosure pursuing a global settlement. They want it “Global” because they know we will pursue damages for slander and wrongful foreclosure. They also want “settlement” because they know they can’t win in court. But it remains true that where the client comes to a lawyer after judgment has been entered or after the sale, the road remains rough and unpaved. And the fact remains that if they can’t make case for foreclosure they don’t have the authority to settle or modify the loan. But that can be bridged if the Judge approves the settlement in words that prevent anyone else from making a claim, and if a Guarantee of Title is issued by the title company. (Different from the normal owner’s policy).

Modifications are being offered with increasing sincerity as lawyers start balking at filing documents that they know or believe were fabricated and forged. The recent tribulations of David Stern and Marshall Watson sounds a warning bell to all firms “processing” foreclosures that they might face disbarment or worse.

But wherever there is desperation and fear and vulnerability, the scam artists come out of the woodwork spouting phrases, laws and rules they know nothing about and promising to end the ordeal of the investor who bought homes during the mortgage meltdown or the homeowner who bought or refinanced homes during that period. Some of them use the word “asset protection” which is in reality a highly complex world in which navigation is extremely challenging. The bottom line is that if the person is not a licensed professional with some obvious credentials their advice should be neither sought nor taken with anything larger than a grain of salt. That ought to get some more hate mail coming my way. Some of the old-time tricksters are finding it difficult to get gigs as “experts” because, well, they are not experts, they have insufficient knowledge, and they don’t know how to explain anything to the court.

In the end, you must accept the premise that the transactions were fatally defective from the beginning (most of them). Signing a note might enable someone to START a lawsuit but it doesn’t allow them to win it. A judge is committing error when he or she denies a motion to dismiss based upon the fact that the “lender” failed to allege that he ever fulfilled his side of the bargain — i.e., that he made a loan to the “borrower.” That allegation alone will knock out at least half of all foreclosures. Judges who are faithfully following the rules of pleading and proof are having no difficulty in clearing their dockets because most of the foreclosures are being initiated in judicial and non-judicial states by parties who, as the San Francisco study put, are “strangers to the transaction.”

While the paperwork on loans is mysterious and opaque the facts of the deal are not. Either there was a transaction for which the paperwork is evidence, or there was no transaction, in which case the paperwork is worthless.

Report of Referee: Former ‘Foreclosure King’ David Stern Could be Disbarred for Foreclosure Fraud
http://4closurefraud.org/2013/10/30/report-of-referee-former-foreclosure-king-david-stern-could-be-disbarred-for-foreclosure-fraud/

Financial Crime: Foreclosure Rescue Schemes Have Become More Complex, and Efforts to Combat Them Continue
http://gao.gov/products/GAO-14-17

Increased mortgage modifications have scaled foreclosure down
http://www.foreclosuredefenseinny.com/2013/increased-mortgage-modifications-have-scaled-foreclosure-down/

Danielle Kelley Looks at New Florida Law: Pitfalls and Possibilities

The fundamental paradigm shift that is coming is that the banks are the deadbeats, not the borrowers. The borrowers are seeking to enforce a fair deal; the banks are seeking to steal and lie their way through the PONZI scheme we called “Securitization.” —Neil F Garfield, Livinglies.me
If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available TO PROVIDE ACTIVE LITIGATION SUPPORT to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Danielle Kelley, Esq. is a partner in Garfield, Gwaltney, Kelley and White located in Tallahassee. She has been a constant contributor to the dialogue on wrongful foreclosures and has been quoted recently in a number of articles in mainstream media. For further information on the firm’s services please call 850-765-1236.

Editor’s Comment: The Florida bill was clearly meant to speed up the “inevitable” foreclosure process, which is the wrong assumption right off the bat. If the foreclosures are wrongful we are not talking about some “i” that wasn’t dotted or some “t” that wasn’t crossed. We are talking about foreclosures that (a) didn’t need to happen and (b) couldn’t happen legally if the party  bringing the foreclosure had no right to do so.
The fundamental paradigm shift that is coming is that the banks are the deadbeats, not the borrowers. The borrowers are seeking to enforce a fair deal; the banks are seeking to steal and lie their way through the PONZI scheme we called “Securitization.”

Verification of the complaint has taken another bizarre turn. In reading the testimony and affidavits of those who “verified” the complaint, it turns out they signed the verification but knew nothing about the case. The only thing they verified was that the complaint contained information that was given to her or him by unknown parties through computer via a computer monitor.

Banks are using the verification aspect to bolster their false claims to the business records exception of hearsay. They are wrong and any judge who rules that is wrong if the verifier or affiant (a) is not the records custodian and (b) had no basis for personally knowing the truth. Pressed to give an accounting for how they know what they know, the verifier will answer “it’s in the complaint.” They often express confidence that it wouldn’t be in the complaint if it wasn’t true. Talk about circular logic!

The recent revelations about Bank of America are the tip of the iceberg of lying and deception that started when the first mortgage bond was sold and the first loan application was taken within the scope of the PONZI scheme that required bonds to be sold in order to make payments to the investors.

The fact that BOA told its employees to lie to customers in order to get them into foreclosure is enough to infer the truth, to wit: the goal was foreclosures and not financial recovery. How is that possible? What bank would not want the most it could get in mitigation of a “loss” it supposedly incurred as a result of a “default” by a “borrower” on a “debt” that was owed to the bank because the bank funded the origination or acquisition of the loan?

The questions answer themselves. If the Bank had a real loss they would want to mitigate the loss as quickly as possible. In the past that has always meant some sort of workout when that possible. Now we find out that BOA was paying its employees to lie and deceive the “borrowers” for the express purpose of getting the property into foreclosure even though that means getting a lot less money for the “creditor” than any modification, settlement or workout. So the answer is that they had no real loss and they must want the foreclosure for some other reason.

The “other reason” is simply that foreclosure is the cover-up for the PONZI scheme. And the government feels stuck by assurances it gave the large banks (see statements of future whistle blowers) when they forced the banks to acquire the investment banks, the aggregators and other players in this scheme, before the government knew that the scheme existed. So the government is buying up worthless mortgage bonds with no loans backing them and pretending that the bonds are really worth something. This is supposed to shore up the financial system by avoiding massive failures of the largest banks — something that is eventually going to happen anyway because the $ trillions that were siphoned off from from investors were then siphoned off from the banks and management now controls that money.

If you look at the merger and bond activity you can see the banks acquiring other institutions in order to provide a safety valve through which part of the ill-gotten gains from the PONZI scheme can be repatriated and the “earnings” of the bank can be seen as stable or increasing even while the rest of the world goes to hell in a hand basket. (see below). The rest of the money is being controlled by a handful of people (see future whistle blowers) who are actually controlling world events by controlling the purse strings of all world economies.

Sounds like a conspiracy theory, doesn’t it. Maybe a little less crazy now that we know that BOA was rewarding employees for lying to customers. And maybe a little less so now that we know the bonus was paid with a Target gift card. If it was a legitimate bonus, why use Target as the intermediary? Answer: the auditors of the bank probably would not like seeing bonuses paid to people who were supposedly working with borrowers on modification or settlement of the loan — especially when the record shows that the bonus was for getting the case into foreclosure rather than settlement.

As you can read for yourself below, the pace of foreclosures is picking up and is going to accelerate under the new Florida law. They are in a rush to hush up any further whistle blowers who might blow the whole thing wide open. But the carrot they held out to homeowners might be the bank’s undoing if the borrower moves promptly and fights the foreclosure on the basis of ownership of the loan. There is only one way to really own a loan and that is by paying for it. The argument has been rejected by many judges, but now it is right in the statute that the proof of ownership must be present as a condition precedent which means that the real burden of proof is switching back to the banks, where it belongs.

————————————————-

Danielle Kelley, Esq. June, 2013

The banks wanted this bill – so let’s take a look at the “consumer friendly” portions and get ready.  Keep in mind the act is remedial in nature.  All complaints filed after June 7, 2013 will be subject to a motion to dismiss if the plaintiff does not meet the requirements of the new bill:

1) they must give affirmative allegations that at the time foreclosure is filed they are the holder of the original note, allege with specificity the factual basis by which they are entitled to enforce the note under 673.3011 (no more either/or pleading),

3) a plaintiff given authority to sue (i.e. servicer or someone coming in with a POA like we’ve been seeing) – the Complaint shall describe their authority and identify with specificity the document that gives them authority to act on behalf of the Plaintiff.

Given what we know about how they verify complaints, they will have a hard road showing they can verify the plaintiff actually “has” the original note.  I won’t settle for anything less than a declaration that they have seen it in person – not on a computer screen.  The bill states, “The term “original note” or “original promissory note” means the signed or executed promissory note rather than a copy thereof.”  I don’t want to hear about a janitor who was adopted as assistant vice president through corporate resolution and is verifying they saw the “original note” on a screen.  Keep in mind that they executed the complaints filed this month months ago – they sign right after they send off for verification usually. 

If they file a lost note count they must attach an affidavit under penalty of perjury to the Complaint that
1) details a clear chain endorsements, transfers, or assignments Note;
2) set forth facts showing the Plaintiff is entitled to enforce the lost instrument (Note); and
3) attach documents to the affidavit such as copies of the Note, allonges, audit reports, or other evidence of acquisition, ownership, and possession.  
 
Relevant portions of the bill below:
(2) A complaint that seeks to foreclose a mortgage or other lien on residential real property, including individual units of condominiums and cooperatives, designed principally for  occupation by from one to four families which secures a  promissory note must:
(a) Contain affirmative allegations expressly made by the plaintiff at the time the proceeding is commenced that the plaintiff is the holder of the original note secured by the mortgage; or
(b) Allege with specificity the factual basis by which the plaintiff is a person entitled to enforce the note under s. 673.3011.
(3) If a plaintiff has been delegated the authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note, the complaint shall describe the authority of the plaintiff and identify, with specificity, the document that grants the plaintiff the authority to act on behalf of the person entitled to enforce the note. This subsection is intended to require initial disclosure of status and pertinent facts and not to modify law regarding standing or real parties in interest. The term “original note” or “original promissory note” means the signed or executed promissory note rather than a copy thereof. The term includes any renewal, replacement, consolidation, or amended and restated note or instrument given in renewal, replacement, or substitution for a previous promissory note. The term also includes a transferable record, as defined by the Uniform Electronic Transaction Act in s. 668.50(16).
(4) If the plaintiff is in possession of the original promissory note, the plaintiff must file under penalty of perjury a certification with the court, contemporaneously with the filing of the complaint for foreclosure, that the plaintiff is in possession of the original promissory note. The certification must set forth the location of the note, the name and title of the individual giving the certification, the name of the person who personally verified such possession, and the time and date on which the possession was verified. Correct copies of the note and all allonges to the note must be attached to the certification. The original note and the allonges must be filed with the court before the entry of any judgment of foreclosure or judgment on the note.
(5) If the plaintiff seeks to enforce a lost, destroyed, or stolen instrument, an affidavit executed under penalty of perjury must be attached to the complaint. The affidavit must:
(a) Detail a clear chain of all endorsements, transfers, or assignments of the promissory note that is the subject of the action.
(b) Set forth facts showing that the plaintiff is entitled to enforce a lost, destroyed, or stolen instrument pursuant to s. 673.3091. Adequate protection as required under s. 673.3091(2) shall be provided before the entry of final judgment.
(c) Include as exhibits to the affidavit such copies of the note and the allonges to the note, audit reports showing receipt of the original note, or other evidence of the acquisition, ownership, and possession of the note as may be available to the plaintiff.
(6) The court may sanction the plaintiff for failure to comply with this section.
SEE ALSO
Unnatural Disaster How mortgage servicers are strong-arming the victims of the Moore, Oklahoma tornado (among others)
http://www.newrepublic.com/article/113496/moore-oklahoma-tornado-victims-strong-armed-mortgage-servicers
HAMP Extension 2015 Could Help Millions More Avoid Foreclosure, LoanLove.com Reports
http://www.sys-con.com/node/2700128

Bank of America gave bonuses for hitting foreclosure quotas, suit alleges
http://www.bizjournals.com/orlando/morning_call/2013/06/bank-of-america-gave-bonuses-for.html

The Goal is Foreclosures and the Public, the Government and the Courts Be Damned

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available TO PROVIDE ACTIVE LITIGATION SUPPORT to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Danielle Kelley, Esq. is a partner in the firm of Garfield, Gwaltney, Kelley and White (GGKW) in Tallahassee, Florida 850-765-1236

EDITOR’S NOTE: SOMETIMES IT PAYS TO SHOW YOUR EXASPERATION. Danielle was at a hearing recently where all she wanted was to enforce a permanent modification for which her client had already been approved by Bank of America and BOA was trying to get out of it and pursue foreclosure even though the deal was done and there was no good or valid business reason why they would oppose a modification they already approved — except that they want to lure people into defaults and foreclosure to avoid liability for buy-backs, insurance, and credit default swap proceeds they received.

They need the foreclosure because that is the stamp of approval that the loans were valid and the securitization wasn’t a sham. Without the foreclosure, they stand to lose not only a lot of money in paybacks, but their very existence. Right now they are carrying assets that are fictitious and they are not reporting liabilities that are very real. At the end of the day, the public will see and even government officials whose “Services” have been purchased by the banks will not be able to deny that the nation’s top banks are broke and are neither too big to fail nor too big to jail. When that happens, our economy will start to recover ans the flow of credit and funds resumes and the banks’ stranglehold on government and on our society will end, at least until the next time.

THIS IS WHAT DANIELLE KELLEY WROTE TO ME AFTER THE HEARING:

 At the hearing against BOA on an old case of mine and Bill’s [William GWALTNEY, partner in GGKW] today I moved to enforce settlement. They actually agreed to a trial payment with my client in writing at mediation 2 years ago. The Judge granted the motion and wants a hearing in 60 days on the arrears (which he agreed my client isn’t liable for), sanctions and fees. She made her payment post-mediation and they sent the checks back. I gave him the Massachusetts affidavits from the BOA employees.  The Judge looked shocked. Opposing Counsel argued the Massachusetts case had nothing to do with our case.
Judge said “Mrs. Kelley how about I enter an order telling Plaintiff they have so many days to resolve this?”  I said “with all due respect your Honor BOA hasn’t listened to the OCC and followed the consent order, they haven’t listened to DOJ on the consent judgement and they are violating the AG settlement. I can assure you 100% they won’t listen to this Court either. Once we leave this room we are at the mercy of BOA actually working with us and their own attorney nor this court can get them to.  Their own attorney couldn’t reach them yesterday or today.  My client was to send in one utility bill two years ago. She sent it the day after mediation and they’ve sat and racked up two years of arrears and fees. This court has the power to sanction that behavior under rule 1.730 and should because this was orchestrated. The Massachusetts case is a federal class action which includes Florida homeowners like my client. It says Florida on the Motion for class certification so it does matter in this case. This was a scheme and a fraud.  It was planned and deliberate”.
Opposing counsel wanted to start the modification process over because the mediation agreement said “Upon completion of the trial payments Defendant will be eligible for a permanent modification”. Opposing counsel said “just because they meet the trial payments doesn’t mean they get a permanent mod.”  I said “under the consent judgment they better” and told the judge we were not going through the modification again, my client had already been approved. He agreed and said that the trial would become permanent and ordered BOA to provide an address for payment. He told opposing counsel that the argument that a trial period wouldn’t become permanent wasn’t going to work for him.
I love the 14th circuit. There is a great need from here to Pensacola and in the smaller counties like I was in today you can actually get somewhere.
Now the banks won’t even say impasse at mediation. It’s always “no agreement”.   But they’ll tell you to send in documents the next week only to say they didn’t get them. Now after those affidavits I see why.

Danielle Kelley, Esq.

Garfield, Gwaltney, Kelley & White
4832 Kerry Forest Parkway, Suite B
Tallahassee, Florida 32309
(850) 765-1236

 FOLLOW DANIELLE KELLEY, ESQ. ON HER BLOG

BANKS STOP FORECLOSURES AS THEY REVIEW COMPLIANCE WITH CONSENT ORDERS

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

 

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

 

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

EDITOR’S NOTE AND PRACTICE SUGGESTIONS: The approach taken by federal agencies and law enforcement with respect to illegal behavior on the part of the Wall Street banks and their affiliates, subsidiaries and co-venturers has basically been a collection of smoke and mirrors designed to create the illusion that the problems are being fixed. In fact the reality is that the problems are being swept under the rug leaving the economy, the middle class, and the title records of nearly all real estate transactions in shambles.

The temporary hold on foreclosure actions is the result of further scrutiny by federal agencies and law enforcement AND  the growing trend of lawyers for homeowners citing the consent orders in their  denials, defenses, and counterclaims.

The problems are obvious. We start off with the fact that  the notes and mortgages would ordinarily be considered unenforceable, illegal and possibly criminal. Then we have these consent decrees  in which administrative agencies and law enforcement agencies have found the behavior of the parties in the paper securitization trail to a violated numerous laws, rules and regulations. The consent decrees and settlements signed by virtually all of the players in the paper securitization chain require them to take action to correct wrongful foreclosures. Of course we all knew that  they would do nothing of the kind, since the result would be an enormous fiscal stimulus to the economy and restoration of wealth to the middle class at the expense of the banks who stole the money in the first place.

You can take it from the express wording as well as the obvious intention in the consent orders and settlements that most of the prior foreclosures were wrongful and then it would be wrongful to proceed with any further foreclosures without correcting or curing the problems caused by wrongful foreclosure on unenforceable notes and mortgages that are not owned by the originator of the alleged loan or any successor thereto. The further problem for them is that none of them were ever a creditor in the loan transaction.

There can be little doubt now that the principal intermediary was the investment bank that received deposits from investors under false pretenses.  There is no indication that the deposits from investors were ever credited to any trust or special purpose vehicle. Therefore  there can be no doubt that the alleged trust could have ever entered into a transaction in which it paid for the ownership of a debt, note or mortgage. It’s obvious that they are owed nothing from borrowers through that false paper chain and that there obviously could be no default with respect to the alleged trust or any of its predecessors or successors. Therefore the mortgage bonds supposedly issued by the trust were empty with respect to any mortgages that supposedly backed the bonds.

By the application of simple logic and following the actual money trail from the investors down to the borrowers, it is obvious that the investors were tricked into making a loan without documentation or security. This is why the megabanks and all of their affiliates and associates have taken such great pains to make sure that the investors and the borrowers don’t get together to compare notes. Most of the notes signed by borrowers would not have been acceptable to the investors even if the investors were named on the promissory note and mortgage. And both the investors and the borrowers would have been curious about all of the money taken out of the funds advanced by investors as undisclosed compensation in the making of the loan.

 So the banks are facing a major liability problem as well as an accounting problem. The accounting problem is that they are carrying  mortgage bonds and hedge products on their books as assets when they should be carried as liabilities.

The liability problem is horrendous. Most of the money taken from investors was taken under false pretenses. In most cases a receiver would be appointed and the investors would claw back as much as possible to achieve restitution.

This is further complicated by the fact that the homeowners are entitled to restitution as well as damages, treble damages and attorneys fees for all of the undisclosed compensation. This is why the banks want foreclosure and not modification or settlements. They need the foreclosure to complete the illusion that the alleged trust or special purpose vehicle was the proper owner of the debt, note and mortgage despite the fact that the trust neither paid for it nor accepted the assignment.

Thus  lawyers are now directing their discovery requests to the methods utilized by the banks and their affiliates to determine whether a particular foreclosure was wrongful and if so to determine the required corrective action.  It is perhaps the most appropriate question to ask and the most relevant as well.

The required corrective action should be the return of the home to the homeowner. That is what  would ordinarily happen if the scale of the problem was not so huge.

But the law does not favor that approach when applied by judges, lawyers, homeowners, legislators and law enforcement.  Instead, investors and homeowners alike are stuck in a web of politics instead of the application of black letter law that has existed for centuries.  As a result the government response has been tepid at best misleading virtually everyone with so-called settlements that work out to be a fraction of a cent on each dollar  that was stolen by the banks and a fraction of a cent on each dollar representing the value of homes that were taken in illegal foreclosures.

Fortunately none of these consent orders or settlements bar individual actions by homeowners against the appropriate parties. Below are the links to consent orders that may apply to your case — even where the Plaintiff or party initiating foreclosure sales is NOT named as one of these. One or more of them is usually somewhere in the so-called securitization chain. Hat tip to 4closurefraud.org.

Links to the OCC and former OTS Enforcement Actions (Issued April 2011):

 

 

Links to Enforcement Action Amendments for Servicers Entering the Independent Foreclosure Review Payment Agreement (Issued February 2013):

 

 

Wells, Citi Halt Most Foreclosure Sales as OCC Ratchets Up Scrutiny
http://www.americanbanker.com/issues/178_96/wells-citi-halt-most-foreclosure-sales-as-occ-ratchets-up-scrutiny-1059224-1.html

Thousands of Days Late, Billions of Dollars Short: OCC
http://4closurefraud.org/2013/05/18/thousands-of-days-late-billions-of-dollars-short-occ-correcting-foreclosure-practices/

US BANK: Lawsuit to Take Aurora Woman’s House is Guaranteed
http://4closurefraud.org/2013/05/17/us-bank-lawsuit-to-take-aurora-womans-house-is-guaranteed/

Short sales routinely show up in credit reports as foreclosures
http://www.latimes.com/business/realestate/la-fi-harney-20130519,0,111610.story {EDITOR’S NOTE: SEND OBJECTION TO CREDIT REPORTING AGENCIES}

 

Wells Fargo Wrongful Foreclosure Kills Elderly Homeowner?

see http://livinglies.me/2013/04/29/hawaii-federal-district-court-applies-rules-of-evidence-bonymellon-us-bank-jp-morgan-chase-failed-to-prove-sale-of-note/

“The administrator of the estate of Larry Delassus sued Wells Fargo, Wachovia Bank, First American Corp. and others in Superior Court, for wrongful death, elder abuse, breach of contract and other charges.

Delassus died at 62 of heart disease after Wells Fargo mistakenly held him liable for his neighbor’s property taxes, doubled his mortgage payments, declared his loan in default and sold his Hermosa Beach condominium, according to the complaint.”

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-296-1960. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Comment and Analysis: There are two reasons why I continue this blog and my return to the practice of law despite my commitment to retirement. The general reason is that I wish to contribute as much as I can to the development of the body of law that can be applied to large-scale economic fraud that threatens the fabric of our society. The specific reason for my involvement is exemplified in this story which results in the unfortunate death of a 62-year-old man. I have not reported it before, but I have been the recipient of several messages from people whose life has been ruined by economic distress and who then proceeded to take their own lives.  In some cases I was successful in intervening. But in most cases I was unable to do anything before they had already committed suicide.

It is my opinion that the current economic problems, and mortgage and foreclosure problems in particular, stem from an attitude that pervades corporate and government circles, to wit: that the individual citizen is irrelevant and that damage to any individual is also irrelevant and unimportant. If you view the 5 million foreclosures that have already been supposedly completed as merely a collection of irrelevant and unimportant citizens and their families then the policies of the banks on Wall Street and the politicians who are unduly influenced by those banks, becomes perfectly logical and acceptable.

I start with the premise that each individual is both relevant and important regardless of their economic status or their political status. In my opinion that is the premise of the Declaration of Independence and the United States Constitution. The wrongful foreclosure by strangers to the transaction is not only illegal and probably unconstitutional, it is fundamentally wrong in that it is founded on the arrogance of the ruling class. Our country is supposed to be a nation of laws not a nation of a ruling class.

If you start with the premise that the Wall Street banks want and need as many foreclosures as possible to complete transactions in which they received the benefit of insurance proceeds and proceeds of head products like credit default swaps, then you can see that these “mistakes”  are in actuality intentional acts intended to drive out legitimate homeowners from their homes. These actions are performed without any concern for the legality of their actions, the total lack of merit of their claims, or the morality and ethics that we should be able to see in economic institutions that have been deemed too big to fail.

The motive behind these foreclosures and the so-called mistakes is really very simple, to wit: the banks have nothing to lose by receiving with the foreclosure but they had everything to lose by not proceeding with the foreclosure. The problem is not a lack of due diligence. The problem is an intentional avoidance of due diligence and the ability to employ the tactic of plausible deniability. Mistakes do happen. But in the past when the bank was notified that the error had occurred they would promptly rectify the situation. Now the banks ignore such notifications because any large-scale trend in settling, modifying or resolving mortgage issues such that the loan becomes classified as “performing” will result in claims by insurers and claims from counterparties in credit default swaps that the payments based upon the failure of the mortgage bonds due to mortgage defaults was fraudulently reported and therefore should be paid back to the insurer or counterparty.

In most cases the amount of money paid through various channels to the Wall Street banks was a vast multiple of the actual underlying loans they claimed were in asset pools. The truth is the asset pools probably never existed, in most cases were never funded, and thus were incapable of making a purchase of a bundle of loans without any resources to do so. These banks claim that they were and are authorized agents of the investors (pension funds) who thought they were buying mortgage bonds issued by the asset pools but in reality were merely making a deposit at the investment bank. The same banks claim that they were not and are not the authorized agents of the investors with respect to the receipt of insurance proceeds and proceeds from hedge product’s life credit default swaps. And they are getting away with it.

They are getting away with it because of the complexity of the money trail and the paper trail. This can be greatly simplified by attorneys representing homeowners immediately demanding proof of payment and proof of loss (the essential elements of proof of ownership) at the origination, assignment, endorsement or other method of acquisition of loans. In both judicial and nonjudicial states it is quite obvious that the party seeking to invoke  foreclosure proceedings avoids the third rail of basic rules and laws of contract, to wit: that the transactions which they allege occurred did not in fact occur and that there was no payment, no loss and no risk of loss to any of the parties that are said to be in the securitization chain. The securitization chain exists only as an illusion created by paperwork.

The parties who handled the money as intermediaries between the lenders and the borrowers do not appear anywhere in the paperwork allegedly supporting the existence of the securitization chain. Instead of naming the investors as the owner and payee on the note and mortgage, these intermediaries diverted the ownership of the note to controlled entities that use their apparent ownership to trade in bonds, derivatives, and hedge products as though the capital of the investment bank was at risk in the origination or acquisition of the loans and as though the capital of the investment bank was at risk in the issuance of what can only be called bogus mortgage bonds.

Toward that end, the Wall Street banks have successfully barred contact and cooperation between the actual lenders and the actual borrowers. These banks have successfully directed the attention of the courts to the fabricated paperwork of the assignments, endorsements and securitization chain. The fact that these documents contain unreliable hearsay statements about transactions that never occurred has escaped the attention and consideration of the judiciary, most lawyers, and in fact most borrowers.

It is this sleight-of-hand that has thrown off policymakers as well as the judiciary and litigants. The fact that money appeared at the time of the alleged loan closing is deemed sufficient to prove that the designated lender on the closing papers was in fact the source of the loan; but they were not the source of the funds for the loan and as the layers of paperwork were added there were no funds at all in the apparent transfer of ownership of the loan that was originated by a strawman with an undisclosed principal, thus qualifying the loan as predatory per se according to the federal truth in lending act.

The fact that the borrower in many cases ceased making payments is deemed sufficient to justify the issuance of a notice of default, a notice of sale and the actual foreclosure of the home and eviction of the homeowner. The question of whether or not any payment was due as escaped the system almost entirely.

Even if the  borrower makes all the payments demanded, the banks will nonetheless seek foreclosure to justify the receipt of insurance and credit default swap proceeds. So they manufacture excuses like failure to pay taxes, failure to pay  insurance premiums, abandonment, failure to maintain or anything else they can think of that will justify the foreclosure and a demand for money that far exceeds  any loss and without giving the borrower an opportunity to avoid foreclosure by either curing the problem for pointing out that there was no problem at all.

As I have pointed out before, the entire mortgage system was turned on its head. If you turn it back to right side up then you will see that the receipt of money by the intermediary banks is an overpayment on both the bond issued to the investor (or the debt owed to the investor) and the promissory note that was executed by the borrower on the false premise that there had been full disclosure of all parties, intermediaries and their compensation as required by the federal truth in lending act, federal reserve regulations and many state laws involving deceptive lending.

Wells Fargo will no doubt defend the action of the estate of the dead man with allegations of a pre-existing condition which would have resulted in his death in all events. The problem they have in this particular case is that the causation of the death is a little easier to prove when the death occurs in the courtroom based upon false claims, false collections, and probably a duty to refund excess payments received from insurers and counterparties to credit default swaps.

The cost of the largest economic crime in human history is very human indeed.

 

Elderly Man Allegedly Dies in Court Fighting Wells Fargo ‘Wrongful’ Foreclosure
http://www.alternet.org/economy/elderly-man-allegedly-dies-court-fighting-wells-fargo-wrongful-foreclosure

%d bloggers like this: