Notice of Violation Under California Bill of Rights

“If we accept the Bank’s argument, then we are creating new law. Under the new law a borrower would owe money to a non-creditor simply because the non-creditor procured the borrower’s signature by false pretenses. The actual lender would be unable to retrieve money paid to the fake lender and the borrower would receive credit for neither his own payments nor any payment by a third party on the borrower’s behalf.” Neil F Garfield,


What’s the Next Step? Consult with Neil Garfield

For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Barry Fagan submitted the Notice below.

Editor’s Notes: Fagan’s Notice gives a good summary of the applicable provisions of the Bill of Rights recently passed by California. The only thing I would add to the demands is a copy of all wire transfer receipts, wire transfer instructions or other indicia of funding or buying the loans. everything I am getting indicates that in most cases they can’t come up with it.

If you went into Chase and applied for a loan and they approved your application but didn’t fund it, you wouldn’t expect Chase to be able to sue you or start foreclosure proceedings for a loan they never funded. It’s called lack of consideration.

If you actually got the loan from BofA but they forgot to have you sign papers, you would still owe the money to them but it wouldn’t be secured because there was no mortgage lien recorded in their name. And BofA would have a thing or two to say to Chase about who is the real creditor — either the one or advanced the money or the one who got documents fraudulently or wrongfully obtained.

So then comes the question of whether Chase could assign their note and lien rights to BofA. If TILA disclosures had been made showing the relationship between the two banks, it might be possible to do so. But in these closings, the actual identity of the creditor (source of funds) was actively hidden from the borrower.

Thus we have a simple proposition to be decided in the appellate and trial courts: can a party who obtains signed loan documentation including a note and mortgage perfect the lien they recorded in the absence of any consideration. The floodgates for fraud would open wide if the answer were yes.

If the answer is NO, then the origination documents and all assignments, indorsements, transfers and allonges emanating from the original transaction without consideration are void. AND if each assignment or transfer recites that it is for value received, and they too had no money exchange hands thus producing lack of consideration, then they cannot even begin to assert themselves as a BFP (Bona Fide Purchaser for value without notice). The part about “without notice” is going to be difficult to sustain in proof since this was a pattern of table funded loans deemed “predatory per se” by Reg Z.

The reason they diverted the document ownership away from the creditor who actually advanced the money was to create the appearance of third party ownership (and transfers, which was why MERS was created) in the documentary chain arising out of the original of the non-existent loan (i.e., no money exchanged hands pursuant to the recitals on the note and mortgage as between the payor and payee). They needed the appearance of ownership was to create the appearance of an ownership and insurable interest.

Thus even though the money did not come from the originator, the aggregator or even the Master Servicer or Trustee of the pool, affiliates of the investment bank who underwrote and sold bogus mortgage bonds, were able (as “owners”) to purchase insurance, credit default swaps, and receive bailouts because they could “document” that they had lost money even though the reality was that the the third party source of funding, and the real creditors were actual parties suffering the loss.

Had those windfall distributions been applied to balances due to the owners of the mortgage bonds, the balance due from the bond would have been correspondingly reduced. AND if the balance due to the creditor had been reduced or paid in full, then the homeowner/borrower’s obligation to that creditor would have been extinguished entitling the homeowner to receipt of a note paid in full and a release of the mortgage lien (or at least cooperation in nullification of the imperfect mortgage lien).

PRACTICE TIP: Don’t just go after the documents that talk about the transaction by which they claim a liability exists from the borrower to one or more pretender lenders. Push for proof of payment in discovery and don’t be afraid to deny the debt, the note or the mortgage.

In oral argument before the Judge, when he or she asks whether you are contesting the note and mortgage, the answer is yes. When asked whether you are contesting the liability, the answer is yes – and resist the temptation to say why. The less said the better. This is why it is better preempt the pretender lenders with your own suit — because all allegations in the complaint must be taken as true for purposes of a motion to dismiss.

Don’t get trapped into disclosing your evidence in a motion to dismiss. If it is set for a motion to dismiss the sole question before the court is whether your lawsuit contains a short plain statement of ultimate facts upon which relief could be granted and all allegations you make must be assumed to be true. When opposing counsel starts to offer facts, you should object reminding the Judge that this is a motion to dismiss, it is not a motion for summary judgment and there are no facts in the record to corroborate the proffer by opposing counsel.

From Barry Fagan:

Re:  Notice of “Material Violations” under California’s Newly Enacted Homeowners Bill of Rights pursuant to California Civil Code sections, 2923.55, 2924.12, and 2924.17.
See attached and below

Reference is made to Wells Fargo’s (“Defendant”) December 13, 2012 response to Barry Fagan’s (“Plaintiff”) October 25, 2012 request for copies of the following:

(i)           A copy of the borrower’s promissory note or other evidence of indebtedness.

(ii)         A copy of the borrower’s deed of trust or mortgage.

(iii)       A copy of any assignment, if applicable, of the borrower’s mortgage or deed of trust required to demonstrate the right of the mortgage servicer to foreclose.

(iv)        A copy of the borrower’s payment history since the borrower was last less than 60 days past due.

Please be advised that I find Defendant’s response to be woefully defective. This letter is being sent pursuant to my statutory obligation to “meet and confer” with you concerning the defects before bringing an action to enjoin any future foreclosure pursuant to Civil Code § 2924.12.

Defendant’s are in violation of both the notice and standing requirements of California law, and the California newly enacted Homeowner Bill of Rights (“HBR”). In July 2012, California enacted the Homeowner Bill of Rights (“HBR”). Among other things, the HBR authorizes private civil suits to enjoin foreclosure by entities that record or file notices of default or other documentsfalsely claiming the right to foreclose. Civil Code § 2923.55 requires a servicer to provide borrowers with their note and certain other documents, if the borrowers request them.

Civil Code § 2924.17 requires any notice of default, notice of sale, assignment of deed of trust, or substitution of trustee recorded on behalf of a servicer in connection with a foreclosure, or any declaration or affidavit filed in any court regarding a foreclosure, to be “accurate and complete and supported by competent and reliable evidence.” It further requires the servicer to ensure it has reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose.

Civil Code § 2924.12 authorizes actions to enjoin foreclosures, or for damages after foreclosure, for breaches of §§ 2923.55 or 2924.17. This right of private action is “in addition to and independent of any other rights, remedies, or procedures under any other law.  Nothing in this section shall be construed to alter, limit, or negate any other rights, remedies, or procedures provided by law.” Civil Code § 2924.12(h). Any Notice of Default, or Substitution of Trustee recorded on Plaintiffs’ real property based upon a fraudulent and forged Deed of Trust shall be considered a “Material Violation”, thus triggering the injunctive relief provisions of Civil Code § 2924.12 & § 2924.17(a) (b).

I therefore demand that Wells Fargo Bank, N.A. provide Barry Fagan with the UNALTERED original Deed of Trust along with the ORIGINAL Note, as the ones provided by Kutak Rock LLP on October 13, 2011 to Ronsin Copy Service were both photo-shopped and fraudulent fabrications of the original documents, thus not the originals as ordered to be produced by Judge Tarle under LASC case number SC112044. Attached hereto and made a part hereof is the October 13, 2011 Ronsin Copy Service Declaration with copies of the altered and photo-shopped Note and Deed of Trust concerning real property located at Roca Chica Dr. Malibu, CA 90265.

Judge Karlan under LASC case number SC117023 “DENIED” Wells Fargo’s Request for Judicial Notice of the very same Deed of Trust, Notice of Default, Substitution of Trustee and the Notice of Rescission concerning real property located at Roca Chica Dr. Malibu, CA 90265.
Attached hereto and made a part hereof is the relevant excerpt of Judge Karlan’s October 23, 2012 Court Order along with a copy of Wells Fargo’s Request for Judicial Notice of those very same documents. Court Order: REQUEST FOR JUDICIAL NOTICE “DEFENDANT’S REQUEST FOR JUDICIAL NOTICE IS DENIED AS TO EXHIBITS A, B, C, D, K, L, & M.” 

As a result of the above stated facts, please be advised that the fraudulently altered deed of trust and photo-shopped Note that you claim to have been previously provided to Barry Fagan shall not be considered in compliance with section 2923.55 and therefore Wells Fargo Bank, N.A. has committed a “Material Violation” under California’s Newly Enacted Homeowners Bill of Rights pursuant to Civil Code sections, 2923.55, 2924.12, and 2924.17 (a) (b).

Please govern yourselves accordingly.


/s/Barry Fagan

Barry S. Fagan Esq.

Thank you.

Barry S. Fagan Esq.
PO Box 1213, Malibu, CA 90265-1213
[T] +1.310.717.1790 – [F] +1.310.456.6447

What Lawyers Are Being Taught in Current Seminars About Foreclosure

It might strike a note of dissonance when you realize that all the knowledge, facts and theories are well-known by title experts and they are teaching mostly correct things to lawyers. The problem is not whether the information is being disseminated. The problem is that the Lawyers are either not paying attention at these seminars or they are refusing or failing to follow what they have been taught. That includes lawyers who become Judges.

If you don’t know these things, you should be a member of this blog, participate in our twice monthly teleconferences, and attend any seminar you can lay your hands on. NBI has several although they shy away from the third rail of securitization.

In the end BOTH the Max Gardner of approaching the documents and the Neil Garfield method of following the money will be needed to drill the point home — i.e., that the mortgages, notes and obligations were faked from beginning to end and then covered up with false assignments, indorsements, “allonges” and other affidavits or instruments that make it look pretty but fail to meet the test of a proper foreclosure.

And you arrive at the same conclusion regardless of whether you start with first money exchanging hands with the investor or first funding with the borrower at the time of origination.

As the pace picks up on government, borrower and investor lawsuits that soon will be facing statute of limitations arguments from the banks, the realities are closing in on the banks and servicers. Any Bank will tell you that you can’t go in in with a gun, make a “withdrawal” and then settle the case with pennies on the dollar. ALL the money is seized, and the perpetrator goes to jail. I predict some nasty surprises for the megabanks next year and some of those will lead to break up of those banks into smaller banks that are more easily regulated. Glass Steagel might not come back completely but administratively we are headed in that direction.

The following is from my notes taken from many different seminars at which the presenters were title examiners, real estate lawyers, professors of law and even executives from the title insurance industry who articulated the situation quite clearly. Title is corrupt, but they fault the banks for misleading the title carriers as to the character and content of the closing. They understand the problems with “credit bids” and that is why they charge extra for a title guarantee — an instrument that is usually not even mentioned to ordinary people buying property.

Heads up to those on the fringe of real estate transactions. Title must be clear, not clouded or defective and must be insurable. In the case of transactions in which securitization and assignment claims are being made, the “economic interest” rule of thumb and industry standard is the sticking point. When you actually follow the money the documents don’t add up, which is layman’s way of saying what lawyers call an absence of a nexus between the transaction and the documents.

This is where the giants will fall. In fact, it was the the improper, illegal and fraudulent use of the money and the signatures of the parties that got them to appear so fat to begin with. When the dust clears, banks like BOA, (which is already executing on a contingency plan for a breakup by quietly dumping all contested foreclosures into third party hands), will not exist in their present form.


1. Title insurance only applies if there is an insurable interest. It was universally
accepted by the conference (including those who were there to protect the interests of the banks and pretenders), that an insurable interest includes two elements: (a) a recorded instrument naming that party and (b) an economic interest in the property. Thus if we take the position that an insurable interest is based upon law and not just policy, it can be argued that in the absence of an insurable interest, the title company will not issue the policy and the Court should not and may not validate the interest, since it is ipso facto, uninsurable.
2. As the number of transfer of the “indebtedness” (the note) increases, the duty to inquire increases, and the more nervous the title examiner or transactional lawyer becomes.
3. Producing the note is universally accepted as law despite some court decisions to the contrary. In Florida and other states the forecloser must produce and tender the original note to the court in order to obtain an order from a Judge to sell the property, and without the note, the forecloser cannot submit a credit bid. So even if the Judge lets the case go through, the sale can be attacked as being no sale (Void, not voidable) because the forecloser did not comply with the requirements of law to establish itself as the creditor.
4. Title insurance policies universally have an exception for the rights of the parties in possession. Presumably that means at the time of the transaction. So if the transaction was are financing (which accounts for more than half of all mortgage transactions, the party in possession is the homeowner. The argument can be made that the title carrier made the exception — and that assuming they are experts in title — that exclusion should be used in any litigation of the parties regardless of whether the issue involves the title policy. Thus the homeownerʼs rights include multiple affirmative defenses, counterclaims and cross claims which need to be heard in a hearing in which actual evidence is heard which means that actual COMPETENT witnesses must be heard to authenticate any documents proffered into evidence.
5. Any situation in which the named insured on the title policy is different than the instrument on record identifying the mortgagee or beneficiary results in an uninsurable interest which can be translated as non-marketable title. Hence the originated loan documents prove that the transaction was a table-funded loan in which the true lender was not disclosed. This means the original documents are fatally defective and cannot be cured without the signature of the borrower or a Court order which would require a hearing in which actual evidence is heard which means that actual COMPETENT witnesses must be heard to authenticate any documents proffered into evidence.
6. Only a creditor may submit a credit bid. If anyone else bids, the Trustee or clerk usually has no discretion but to issue a certificate of title (deed) which gives clear title to the grantee, which can either be the borrower or someone standing in for the borrower.
7. Title insurance is not a magic bullet. It does not prove the status of title.
8. Generally unrecorded instruments are not covered by title insurance. In Arizona and other states there is general acceptance of the idea that based upon statute and ATLA standards successors in interest to the debt do not need a new title policy. By inference this would mean that they are giving credence to the idea that the mortgage follows the note, whether the transfer was recorded or not. But upon questioning the experts who delivered the presentation agreed that as the number of transfers increased the transaction becomes suspicious and that the rule regarding successors was probably meant for single transfers.
9. A transfer by a corporation not in good standing in the state or states in which it is required to be registered may not transact business nor bring any judicial proceeding. Mere ownership of property is not considered doing business. But a pattern of conduct of transactions is all that is needed. If the entities (any of them) that are involved in the chain of title are either defunct or in bankruptcy, any assignment, allonge or other instrument is invalid. It can be cured but there are time limits on how long they have before they cure, and it may be that reinstatement may require a name change. After 6 months in Arizona the name of the entity that should have registered is up for grabs which means you can incorporate under that name. What you can do with that name is an interesting proposition that was not discussed.
10.Conflicts of interests apparent on the face of the document or otherwise known to the title examiner create a duty to inquire. Therefore, since the usual pattern is that these documents are created after notice of default and usually after the matter is in litigation and sometimes not until hours or days before a hearing in which the documents need to be produced, the matter is a question of fact that needs to be decided after hearing evidence which requires competent witnesses testifying from personal knowledge.
11.BOARD RESOLUTION REQUIRED: No officer may sign a deed without board resolution. It is possible that estoppel, waiver or apparent authority might apply in the situation where the complaining party is a bona fide third party arms length purchaser for value.
12.In Arizona the knowledge of the Trustee is not imputed to the Lender, but there is no reference or prohibition against imputing the knowledge of the Lender to the Trustee. The practice of ALWAYS substituting trustees instead of using the old one is a cover for the fact that the old trustee would probably ask some questions rather than simply follow orders and send the notice of default, notice of sale etc.



Somebody get me the complaint so I can post it here.

Editor’s Note: AMBAC is one of the insurers of loan portfolios, like AIG. The insurance paid off when the Master Servicer declared the portfolio had “failed,” based upon standards that were set by the Master Servicer and Underwriter. The insurer had waived its right to challenge that assessment and waived subrogation. It is through this mechanism that many loans that are still performing, many loans that are in current foreclosure proceedings, and many loans that were foreclosed were either paid off or the delinquency was paid by the carrier. In the contract of insurance the insurer expressly waives any right of subrogation. Thus the receiver of the proceeds of insurance gets to keep the money and the portfolio too which was largely performing.

This is why we have said that the defenses of payment and denial of default are entirely meritorious defenses and claims along with claims for slander of title (preventing people from refinancing) and wrongful foreclosure. The fact is that upon delivery of a proper accounting from the creditor side (rather than the debtor/borrower side) you will discover that the notices of default are fatally defective and even fraudulent. The fact that the borrower did not make a payment was used as an excuse to invoke a contractual right to receive payment on the entire portfolio based upon a formula that was determined solely in the discretion of the underwriter and Master Servicer. This overpayment was hotly contested by the insurers and the U.S. government although eventually they gave in and paid 100 cents on the dollar.

The investors were kept ignorant of the receipt of these payments by the underwriter and the borrower got the same treatment of non-disclosure. Thus the distribution report to the investor never mentioned receipt of the insurance money and the borrower’s end of month statement never mentioned the credit against the obligation due. No allocation was ever made in favor of either the investor or the borrower. This was an instant replay of the fact that no disclosure or allocation was made to the benefit of either the investor or the borrower for the tier 2 yield spread premium: the money that was taken out of the funds advanced by the lenders before actually applying it to funding loans.

What was missed completely by AMBAC, AIG and other insurers is that the party who received the proceeds of insurance lacked an insurable interest and therefore had nothing to insure. The fraud they cite is correct but they are missing the forest for the trees. It’s true the loans were improperly described and that no underwriting process was used in accordance with industry standards. That was a lie. But the bigger lie was that the insured had any asset to insure. If they kept the money, which they did, then the insurance company has a claim to recapture at least some of that money. Or, more likely, the investors should have been given the money which would have reduced the obligations, which should have been credited to the borrowers.

2010-09-29 19:00 (UTC)

By Jonathan Stempel

NEW YORK, Sept 29 (Reuters) – Ambac Financial Group Inc sued Bank of America Corp, alleging a ‘massive fraud’ that caused it several hundred million dollars of losses from insuring mortgage securities that went sour.

In a complaint filed Tuesday in the New York State Supreme Court in Manhattan, Ambac said the bank’s Countrywide mortgage unit misled it about loan quality and underwriting guidelines when sponsoring $16.7 billion of residential mortgage-backed securitizations between 2004 and 2006.

According to the complaint, the transactions concerned home equity loans, and contained more than 268,000 loans that backed the $16.7 billion of securities, some of which Ambac insured.

Ambac said it has paid $466 million on claims after an ‘extraordinary’ $2 billion of the loans went into default or were written off.

It also said that 97 percent of the 6,533 loans it has reviewed did not meet Countrywide’s underwriting guidelines, and that Countrywide has refused to meet its obligation to buy back some of these loans or bring them into compliance.

‘Countrywide’s pervasive misrepresentations and breaches pierce the very heart — and amount to a total repudiation — of the bargain struck by the parties,’ the complaint said.

Ambac is ‘entitled to redress for Countrywide’s massive fraud,’ it added.

Bank of America bought Countrywide in July 2008. A spokeswoman, Shirley Norton, said the Charlotte, North Carolina-based bank had no comment. Peter Tomlinson, a lawyer for Ambac, had no immediate comment.

Based in New York, Ambac had been the second-largest U.S. bond insurer before losses on risky debt, including mortgages, caused it in 2008 to lose the ‘triple-A’ credit ratings on which it had depended to insure bonds, mostly municipal debt.

Earlier this year, Ambac said its liquidity might run out before the second quarter of 2011, and said it might try to restructure its debt through a prepackaged bankruptcy.

In March its primary regulator, Wisconsin Insurance Commissioner Sean Dilweg, seized $64 billion of its worst assets and put them into a segregated account.

Bank of America has faced many lawsuits over Countrywide’s lending and disclosures. Late Tuesday, a Manhattan federal judge dismissed a lawsuit by two investment funds accusing Countrywide of misleading it about risk..

An Oct. 19 trial is scheduled in a U.S. Securities and Exchange Commission civil fraud lawsuit over Countrywide.

The SEC accused onetime Chief Executive Angelo Mozilo and two other executives of hiding Countrywide’s worsening loan portfolio. Mozilo also faced an insider-trading charge. The defendants have denied wrongdoing.

In afternoon trading on the New York Stock Exchange, Bank of America shares fell 9 cents to $13.18, and Ambac fell 1 cent to 56 cents.

The case is Ambac Assurance Corp et al v. Countrywide Home Loans Inc et al, New York State Supreme Court, New York County, No. 651612/2010.

(Reporting by Jonathan Stempel; Editing by Lisa Von Ahn and Gerald E. McCormick) Keywords: BANKOFAMERICA/AMBAC LAWSUIT

( +1 646 223 6317; Reuters Messaging:

How to Find “Who Owns The Note” – Who has an “Insurable Interest” !!!!

How to Find “Who Owns The Note” – Who has an “Insurable Interest” !!!!

It is basic insurance law that in order to become named as a loss payee – that is, to get an insurance policy issued to you to indemnify you against loss – you have to have an “insurable interest.” MERS doesn’t ( as far as I know). It is not a “loss payee”. Every assignment of a mortgage (when the mortgage is sold in the securitization process is insured:

(I think I posted this here before, because Eagle9 warns of a loss of assignment if the assignment or hypothecation (sale of chattel paper/mtg) is not recorded under state law AND there is an intervening BANKRUPTCY that supersedes UCC automatic perfection under UCC 9-301 – 304

(yes, I did: )

Follow the insured interest.

Then you will know who does or does not have an interest in your mortgage.

And thanks to Brad Keiser for reminding me of this again in our telephone conversation yesterday.

Steven K. Kop
Attorney at Law
(310) 721-8557

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