LSF9: U.S. Bank>Foreclosure Mill Lawyers trying to get Hawaii Supreme Court to Change the Rules Before I Get to Them

Stop complaining about banks and courts. Start writing to everyone. The game is on!

Attorney Gary Dubin has already won the case twice. Now the foreclosure attorneys are trying to resurrect the case involving the LSF9 Master Participation Trust, which has been the subject of numerous articles and radio shows. Bill Paatalo,  Charles Marshall, and I, among many others,l have already completely neutered this sham entity.

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But what they are actually trying to do, is to loosen the rules instead of tightening the rules for the oncoming flood of foreclosure lawsuits in the state of Hawaii and to have that serve as an example to the rest of the country.

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I’m trying to stop them. See https://livinglies.me/2020/12/18/help-me-change-the-rules-if-you-want-a-different-outcome/

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They are staying on message. That means they are directing the court’s attention to possession of the promissory note. From that premise, they are making all of their presumptions and arguments.

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First of all possession of the note does not necessarily mean that the delivery of the note was accompanied by a grant of entitlement to enforce the note. That grant could only come from the owner of the underlying obligation or someone who legally represented the owner of the alleged underlying obligation.
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This is a point that is often missed. However, if physical delivery has occurred between a holder of the note (someone with physical possession who also has been legally granted the right to enforce) then the delivery of the note implies a grant of the right to enforce, which right is then legally presumed to exist — even if there was no such grant. The delivery of the note implies a grant of the right to enforce, which is then presumed. That is the system.
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But you will never find an allegation, assertion or exhibit that the named claimant has paid value in exchange for a conveyance of the underlying obligation. Not ever. If they said that, they would need to prove that. They can’t because it isn’t true. But right now the rules don’t require them to say that and I have announced on these pages that I intend to petition the Supreme Courts of every state to require it.
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So they are mounting a pre-emptive attack to undercut my efforts to reduce the flood of foreclosure cases that will come once the moratoriums are lifted. They should never be lifted. At this point, the regulators have all the information they need to say that the transactions with homeowners do not represent an enforceable obligation because they are merely an attempt to get back consideration paid to the homeowners for their involuntary participation in a concealed business scheme resulting in the sale of securities that had nothing to do with sale or ownership or rights to administer, collect or enforce any alleged obligation from any homeowner.
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All of this can be headed off at least two points in the process: (1) at the pleading stage where they should swear to have paid value for the underlying obligation and (2) in discovery where they should be required, as a condition precedent (H. S. §490:9-203), to present evidence of payment of value for the underlying obligation.

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So the real question is whether anyone in the current foreclosure scheme has ever paid value for the underlying obligation, if it exists, in accordance with H. S. §490:9-203. I raise the question of the existence of the obligation because my investigation, together with interviews of insiders, combined with my own experience on Wall Street has led me to the inescapable conclusion that the obligation was extinguished during the process labeled as securitization.
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As popularly understood, securitization of residential obligations is and always has been a fiction.

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There is no person or company that maintains any entry on any accounting ledger of any legal entity on which the obligation is established as a loan account receivable. Such an entry could only be made if value was paid. No value is paid for ownership of the underlying obligation under the current securities scheme; hence nobody can claim legal ownership of the obligation or any right to enforce it.
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That is the nub of their problem. And that is why they rely on false, fabricated, backdated forged, Robo signed documents. If they had paid value for the underlying obligation, they would say so, since that would eliminate virtually any arguments about the transfer or ownership of the debt, note, and/or mortgage. There would be no viable defense left to homeowners. The fact that foreclosure mills never do so is in itself corroboration of my factual and legal conclusion, to wit: that they don’t own the underlying obligation and that they are faking it.
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And that means that the collection of scheduled payments from homeowners are not being used to reduce any loan account. That is impossible because no such account exists. It also means that the proceeds from the forced sale of homestead after a court or state system allows the sale, also are not being used to reduce any loan account.
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That is why they keep talking about the note rather than the obligation. The rules governing the enforcement of a note or different than the rules governing the enforcement of a mortgage. Foreclosure mills have been informally convincing judges to ignore the current rules. Now they’re seeking to formally change it, step by step.
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First, they think they can get the Hawaii Supreme Court to do it indirectly, and then they are going to ask for a formal rule change. Ownership of the debt, note, or mortgage will be thrown out the window nullifying around 1000 years of legal doctrine and development.
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The enforcement of a note is governed by Article 3 UCC whereas enforcement of a mortgage is governed by Article 9, where there are added protections and restrictions.
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The note is only relevant if it is evidence of the underlying obligation. It is also treated as being something in the nature of a transfer of title to the underlying obligation, so when the note is transferred there is a legal presumption that the underlying obligation has also been transferred. But article 9 says that isn’t enough. It says the claimant must be the one who paid value in exchange for receiving a conveyance of ownership of the underlying obligation.
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The problem for the Foreclosure Mill and the reason that they are trying to get the Hawaii Supreme Court to change the rules, is that no such transaction ever occurred in which value was paid in exchange for receiving a conveyance of ownership of the underlying obligation. without the legal presumption of such a transaction, they are dead in the water because they cannot proffer any evidence that it ever happened. 
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I would also add that LSF9 trust is no trust. it is a fictitious entity. You might analogize it to a hologram of a hologram of an empty paper bag. There are no trustee duties and hence no trustee, regardless of labels used to confound the courts, lawyers, and clients. There is no res or thing (or “loan”) owned by USB or any trust — least of all the sham monstrosity called LSF9 Master Participation Trust.
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Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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DID YOU LIKE THIS ARTICLE?
Nobody paid me to write it. I am self funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you fee you can afford.

Please Donate to Support Neil Garfield’s Efforts to stop Foreclosure Fraud.

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Caliber and LSF9 Trust Example of Smoke and Mirrors

The lesson is keep your eye on the ball. The natural human reaction to an affidavit is to assume it is true. We assume that it would not be submitted if the lawyers knew it wasn’t true. And in most cases people don’t lie in affidavits. But they do mislead sometimes by leaving out context. And then there are affidavits and declarations fabricated, executed, filed and even recorded in  foreclosure cases which are mostly lies and virtually all misleading.

To reveal this you must take your time in reviewing the documents and affidavits submitted. They were created so that at a glance everything would seem in order. On closer reading you can see that they don’t actually say anything of value and therefore should not be considered facially valid documents conveying or certifying anything.

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Bill Paatalo wrote the following in September 2018:

In 100% of the cases I’ve investigated regarding “U.S. Bank Trust, N.A. as Trustee for LSF9 Master Participation Trust,” the servicer (most often “Caliber”) provides the exact same type of affidavit. This is all they ever produce, and here, the court says it doesn’t cut it.

“Moreover, Mr. Cantu is not an employee of Plaintiff or Wells Fargo and therefore can not attest to what is in the possession of the Plaintiff or Wells Fargo. As noted above, the copy of the Note and allonge does not contain any endorsement or date which would support that the Plaintiff had possession when the action was commenced. The affidavits of Caliber’s Default Service Officer did not give any factual details of a physical delivery and, thus, failed to establish that the plaintiff had physical possession of the note at the time the action was commenced, and as such Plaintiff is not entitled to summary judgment. (see Wells Fargo Bank, NA v Burke, 125 AD3d 765, 766 [2d Dept 2015]; US Bank N.A. v Faruque, 120 AD3d 575, 577 [2014]; Bank of NY Mellon v Gales, 116 AD3d 723 [2014]). Accordingly, it is hereby

ORDERED that Plaintiff’s motion is denied, and it is further”

So what foreclosure mill lawyers are doing is filing affidavits and declarations. That part of it is true. They are filed and sometimes recorded.

But what is in those affidavits and declarations is not supported by anything on the face of the instrument, or what is attached to it, nor even by reference within the instrument to a fact or document in the public domain. So it is wholly useless without resort to extrinsic evidence (testimony and exhibits), which means that it cannot be considered a facially valid document.

Putting this into practice is actually not hard. You simply need to break down the wording so that each phrase or statement is analyzed for the truth of the matter asserted.

The LSF9 Master Participation Trust is but one example. It is named but not described. So where normal custom and practice would dictate that it be named and described, the foreclosure mill lawyers are convincing judges to treat it as though it was described.

When the homeowner is described it is usually with a name, and place of residence or as title owner of certain property. When a Trust is described it is named without a place of residence and with no direct statement that it owns anything. In other civil pleadings, if the LSF9 Master Participation Trust was real, it would say that it was a common law (or statutory) trust organized and existing under the laws of the state of XXXXX with its principal place of business at YYYYYYYY in the City of ZZZZZ.

If you do a thorough search of all cases, you will not find a single instance in which a trust is named as Defendant except certain cases where the homeowners are suing the apparent trust under the misapprehension that it is an existing legal entity. On the finance side nobody refers to the trust much less sues it. There are a few cases in which banks claiming to be Trustees of a claimed REMIC Trust sued someone for delivering improperly underwritten loans, but no case in which the allegation is made that the Trust actually purchased those loans. All those cases settle long before trial.

Back to LSF9:

The lawyers submitted an affidavit that was probably forged. But assuming it wasn’t, the affidavit said nothing that could be accepted as evidence of anything because the knowledge of the alleged affiant, the employment of the alleged affiant and the authority of the alleged affiant were nonexistent.

But it gives the appearance of having facial validity even if there is none. It has a named affiant, a statement  and a notarized signature.

As the court found in New York, the affiant failed to state the basis for his knowledge which could NOT be implied from the affidavit since it did not recite that he was an employee of the Trust, the Bank or any other presumed party in interest.

Consider the following hypothetical extreme example which translates the affidavit:

My name is John Smith. I am an independent contractor for Caliber. I was hired to sign this affidavit. I have no knowledge of anything contained in this affidavit. I was not present in any capacity when any of the events or documents recited in this affidavit occurred or were created. I have never been an employee of any entity whose records are described in this affidavit nor did I have any role or knowledge of the events or the documents or records referred to herein. However I am familiar with the name Wells Fargo and I can see the name “LSF9 Master Participation Trust” on the affidavit prepared for me to sign.

Such affidavits are common place ONLY in one place, to wit: in the courtroom where a foreclosure is pending. And in all cases, except foreclosures, such affidavits are instantly rejected.

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