New Jersey Clears Docket: Dismisses 80,000+ cases

Posted on March 13, 2014 by Neil Garfield

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GUEST TONIGHT: KENNETH HANKS, ESQ. TITLE EXPERT

One might ask why a lender would delay the prosecution of their claim. The answer is that they wouldn’t delay if they thought they had a solid claim. I know. I have represented banks on loans, foreclosures, associations in foreclosures etc. And I have proposed that if the Courts were to order the alleged ‘holders” to show the actual money trail so we would all know what transactions actually took place, their dockets would be clear, because most of the transactions described on assignments and indorsements never took place.

We have seen cases dating back to the 1990’s that have not been prosecuted and judges in all states are dismissing for failure to prosecute, which in turn brings up the statute of limitations, which I warn you is applied very differently from state to state. But in many cases they cannot refile because the statute of limitations has run and they are out of luck. So why would a bank (who is representing to the court that it the loser in a transaction with the borrower ) allow so many cases to be dismissed? Is there reason for this madness?

I believe there is. But the reason probably varies from case to case. Suffice it to say that we will see what plays out in New Jersey. My guess is that many of the documents used by foreclosers represent transactions that were fictitious or duplications of other transactions and now they are picking which story to go with in court but he courts are getting annoyed with the actual complexity of what seems to be a “simple” claim. The borrower didn’t pay, isn’t that enough? Actually no.

The essential problem that is now bubbling to the surface after years of suppression is this: the lender is receiving payments based upon a different deal and computation than the deal and computation the borrower is required to pay. The lender’s right to repayment comes from the bond indenture on the mortgage bond issued by a REMIC trust that never had any money, assets, income or expenses.

That indenture doesn’t say the investor will be paid according to the homeowner notes on loans originated or acquired by the trust or with the money from the trust beneficiaries. It provides for a specific yield of interest and principal regardless of what the notes say and even regardless (many times) of whether the borrower pays or not. Those terms are different than the terms signed by the homeowner. And the note and mortgage, were mostly executed in favor of parties who did not make any loan, never received the delivery of the note and never had any interest in the transaction. So what good are assignments from parties with zero ownership interest to convey?

We have reached a turning point where courts and others are saying to the banks, “if your claims are real, why didn’t you prosecute them for years?”

http://www.wnyc.org/story/new-jersey-breaks-foreclosure-logjam-yields-flood-dismissals/

Filed under: CASES, evidence, foreclosure, foreclosure defenses, foreclosure mill, GARFIELD KELLEY AND WHITE, Investor, MBS TRUSTEE, Neil Garfield Show, originator, Pleading, Title, TRUST BENEFICIARIES, trustee | Tagged: , , , , , , , | 42 Comments »

Insurance, Credit Default Swaps, Guarantees: Third Party Payments Mitigate Damages to “Lender”

Posted on March 28, 2013 by Neil Garfield
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Editor’s Analysis: The topic of conversation (argument) in court is changing to an inquiry of what is the real transaction, who were the parties and did they pay anything that gives them the right to claim they suffered financial damages as a result of the “breach” by the borrower. And the corollary to that is what constitutes mitigation of those damages.

If the mortgage bond derives its value solely from underlying mortgage loans, then the risk of loss derives solely from those same underlying mortgages. And if those losses are mitigated through third party payments, then the benefit should flow to both the investors who were the source of funds and the borrowers balance must be correspondingly and proportionately adjusted. Otherwise the creditor ends up in a position better than if the debtor had paid off the debt.

If your Aunt Sally pays off your mortgage loan and the bank sues you anyway  claiming they didn’t get any payment from YOU, the case will be a loser for the bank and a clear winner for you because of the defense of PAYMENT. The rules regarding damages and mitigation of damages boil down to this — the alleged injured party should not be placed in a position where he/she/it is better off than if the contract (promissory) note had been fully performed.

If the “creditor” is the investor lender, and the only way the borrower received the money was through intermediaries, then those intermediaries are not entitled to claim part of the money that the investor advanced, nor part of the money that was intended for the “creditor” to offset a financial loss. Those intermediaries are agents. And the transaction,  while involving numerous intermediaries and their affiliates, is a single contemporaneous transaction between the investor lender and the homeowner borrower.

This is the essence of the “Single transaction doctrine” and the “step transaction doctrine.” What the banks have been successful at doing, thus far, is to focus the court’s attention on the individual steps of the transaction in which a borrower eventually received money or value in exchange for his promise to pay (promissory note) and the collateral he used to guarantee payment (mortgage or deed of trust). This is evasive logic. As soon as you have penetrated the fog with the single transaction rule where the investor lenders are identified as the creditor and the homeowner borrower is identified as the debtor, the argument of the would-be forecloser collapses under its own weight.

Having established a straight line between the investor lenders and the homeowner borrowers, and identified all the other parties as intermediary agents of the the real parties in interest, the case for  damages become much clearer. The intermediary agents cannot foreclose or enforce the debt except for the benefit of an identified creditor which we know is the group of investor lenders whose money was used to fund the tier 2 yield spread premium, other dubious fees and profits, and then applied to funding loans by wire transfer to closing agents.

The intermediaries cannot claim the house because they are not part of that transaction as a real party in interest. They may have duties to each other as it relates to handling of the money as it passes through various conduits, but their principal duty is to make sure the transaction between the creditor and debtor is completed.

The intermediaries who supported the sale of fake mortgage bonds from an empty REMIC trust cannot claim the benefits of insurance, guarantees or the proceeds of hedge contracts like credit default swaps. For the first time since the mess began, judges are starting to ask whether the payments from the third parties has relevance to the debt of the borrower. To use the example above, are the third parties who made the payments the equivalent of Aunt Sally or are they somehow going to be allowed to claim those proceeds themselves?

The difference is huge. If the third parties who made those payments are the equivalent of Aunt Sally, then the mortgage is paid off to the extent that actual cash payments were received by the intermediary agents. Aunt Sally might have a claim against the borrower or it might have been a gift, but in all events the original basis for the transaction has been reduced or eliminated by the receipt of those payments.

If Aunt Sally sues the borrower, it would  be for contribution or restitution, unsecured, unless Aunt sally actually bought the loan and received an assignment along with a receipt for her funds. If there was another basis on which Aunt Sally made the payment besides a gift, then the money should still be credited to the benefit of the investor lenders who have received what they thought was a bond payable but in reality was still the note payable.

In no event are the intermediary agents to receive those loss mitigation payments when they had no loss. And to the extent that payments were received, they should be used to reduce the receivable of the investor lender and of course that would reduce the payable owed from the homeowner borrower to the investor lender. To do otherwise would be to allow the “creditor” to end up in a much better position than if the homeowner had simply paid off the loan as per the promissory note or faked mortgage bond.

None of this takes away from the fact that the REMIC trust was not source the funds used to pay for the mortgage origination or transfer. That goes to the issue of the perfection of the mortgage lien and not to the issue of how much is owed.

Now Judges are starting to ask the right question: what authority exists for application of the third party payments to mitigate damages? If such authority exists and the would-be foreclosures used a false formula to determine the principal balance due, and the interest payable on that false balance then the notice of delinquency, notice of default, and foreclosure proceedings, including the sale and redemption period would all be incorrect and probably void because they demanded too much from the borrower after having received the third party payments.

If such authority does not exist, then the windfall to the banks will continue unabated — they get the fees and tier 2 yield spread premium profits upfront, they get the payment servicing fees, they get to sell the loan multiple times without any credit to the investor lender, but most of all they get the loss mitigation payments from insurance, hedge, guarantee and bailouts for a third party loss — the investor lenders. This is highly inequitable. The party with the loss gets nothing while a party who already has made a profit on the transaction, makes more profit.

If we start with the proposition that the creditor should not be better off than if the contract had been performed, and we recognize that the intermediary investment bank, master servicer, trustee of the empty REMIC trust, subservicer, aggregator, and others did in fact receive money to mitigate the loss on those certificates and thus on the loans supposedly backing the mortgage bonds, then the only equitable and sensible conclusion would be to credit or allocate those payments to the investor lender up to the amount they advanced.

With the creditor satisfied or partially satisfied the mortgage loan, regardless of whether it is secured or not, is also satisfied or partially satisfied.

So the question is whether mitigation payments are part of the transaction between the investor lender and the homeowners borrower. While this specific application of insurance payments etc has never been addressed we find plenty of support in the case law, statutes and even the notes and bonds themselves that show that such third party mitigation payments are part of the transaction and the expectancy of the investor lender and therefore will affect the borrower’s balance owed on the debt, regardless of whether it is secured or unsecured.

Starting with the DUTY TO MITIGATE DAMAGES, we can assume that if there is such a duty, and there is, then successfully doing so must be applicable to the loan or contract and is so treated in awarding damages without abridgement. Keep in mind that the third party contract for mitigation payments actually refer to the borrowers. Those contracts expressly waive any right of the payor of the mitigation loss coverage to go after the homeowner borrower.

To allow all these undisclosed parties to receive compensation arising out of the initial loan transaction and not owe it to someone is absurd. TILA says they owe all the money they made to the borrower. Contract law says the payments should first be applied to the investor lender and then as a natural consequence, the amount owed to the lender is reduced and so is the amount due from the homeowner borrower.

See the following:

Pricing and Mitigation of Counterparty Credit Exposures, Agostino Capponi. Purdue University – School of Industrial Engineering. January 31, 2013. Handbook of Systemic Risk, edited by J.-P. Fouque and J.Langsam. Cambridge University Press, 2012

  • “We analyze the market price of counterparty risk and develop an arbitrage-free pricing valuation framework, inclusive of collateral mitigation. We show that the adjustment is given by the sum of option payoff terms, depending on the netted exposure, i.e. the difference between the on-default exposure and the pre-default collateral account. We specialize our analysis to Interest Rates Swaps (IRS) and Credit Default Swaps (CDS) as underlying portfolio, and perform a numerical study to illustrate the impact of default correlation, collateral margining frequency, and collateral re-hypothecation on the resulting adjustment. We also discuss problems of current research interest in the counterparty risk community.” pdf4article631

Whether this language  makes sense to you or not, it is English and it does say something clearly — it is all about risk. And the risk of the investor lender was to have protected by Triple A rating, insurance, and credit default swaps, as well as guarantees and provisions of the pooling and servicing agreement, for the REMIC trust. Now here is the tricky part — the banks must not be allowed to say on the one hand that the securitization documents are real even if there was no money trail or consideration to support them on the one hand then say that they are not real for purposes of receiving loss mitigation payments, which they want to keep even if it leaves the real creditor with a net loss.

To put it simply — either the parties to the underwriting of the bond to investors and the loan to homeowners were part of the the transaction (loan from investor to homeowner) or they were not. I fail to see any logic or support that they were not.

And the simple rule of measure of how these parties fit together is found under the single transaction doctrine. If the step transaction under scrutiny would not have occurred but for the principal transaction alleged, then it is a single transaction.

The banks would argue they were trading in credit default swaps and other exotic securities regardless of what lender fit with which borrower. But that is defeated by the fact that it was the banks who sold to mortgage bonds, it was the banks who set up the Master Servicer, it was the banks who purchased the insurance and credit default swaps and it was the underwriting investment bank that promised that insurance and credit default swaps would be used to counter the risk. And it is inescapable that the only risk applicable to the principal transaction between investor lender and homeowner borrower was the risk of non payment by the borrower. These third party payments represent the proceeds of protection from that risk.

Would the insurers have entered into the contract without the underlying loans? No. Would the counterparties have entered into the contract without the underlying loans? No.

So the answer, Judge is that it is an inescapable conclusion that third party loss mitigation payments must be applied, by definition, to the loss. The loss was suffered not by the banks but by the investors whose money they took. The loss mitigation payments must then be applied against the risk of loss on the money advanced by those investors. And the benefit of that payment or allocation is that the real creditor is satisfied and the real borrower receives some benefit from those payments in the way of a reduction of the his payable to the investor.

It is either as I have outlined above or the money — all of it — goes to the borrower, to the exclusion of the investor under the requirements of TILA and RESPA. While the shadow banking system is said to be over $1.2 quadrillion,  we must apply the same standards to ourselves and our cases as we do to the opposing side. Only actual payments received by the participants in the overall obscured investor lender transaction with the homeowner borrower.

Hence discovery must include those third parties and review of their contracts for the court to determine the applicability of third party payments that were actually received in relation to either the subject loan, the subject mortgage bond, or the subject REMIC pool claiming ownership of the subject loan.

The inequality between the rich and not-so-rich comes not from policy but bad arithmetic.

As the subprime mortgage market fell apart in late 2007 and early 2008, many financial products, particularly mortgage-backed securities, were downgraded.  The price of credit default swaps on these products increased.  Pursuant to their collateral agreements, many protection buyers were able to insist on additional collateral protection.  In some cases, the collateral demanded represented a significant portion of the counterparty’s assets.  Unsurprisingly, counterparties have carefully evaluated, and in some cases challenged, protection buyers’ right to such additional collateral amounts.  This tension has generated several recent lawsuits:

• CDO Plus Master Fund Ltd. v. Wachovia Bank, N.A., 07-11078 (S.D.N.Y. Dec. 7, 2007) (dispute over demand     for collateral on $10,000,000 protection on collateralized debt obligations).

• VCG Special Opportunities Master Fund Ltd. v. Citibank, N.A., 08 1563 (S.D.N.Y. Feb. 14, 2008) (same).

• UBS AG v. Paramax Capital Int’l, No. 07604233 (N.Y. Sup. Ct. Dec. 26, 2007) (dispute over demand for $33 million additional capital from hedge fund for protection on collateralized debt obligations).

Given that the collateral disputes erupting in the courts so far likely represent only a small fraction of the stressed counterparties, and given recent developments, an increase in counterparty bankruptcy appears probable.

http://www.capdale.com/credit-default-swaps-the-bankrupt-counterparty-entering-the-undiscovered-country

Filed under: CDO, CORRUPTION, currency, Eviction, foreclosure, GARFIELD GWALTNEY KELLEY AND WHITE, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , | 79 Comments »

With All the Settlements, What is Owed on Principal?

Posted on October 10, 2012 by Neil Garfield

CREDITOR HAS BEEN PAID

The complexity and shroud of mystery surrounding claims of securitizations, assignments etc can be simplified if you just look at the money. This is why I have forensic auditors who chase this information down. Call living lies customer service 520-405-1688 if you can’t find an adequate analyst of your own who REALLY dig in.

  1. What money was paid to whom? When? How? Who is a witness that can authenticate and verify the documents used (ACH, Wire transfer, check) the documents used for money transfer?
  2. If the creditor already settled with the investment bank, then is the claim for collection or foreclosure on the mortgage still viable?
  3. How was the settlement allocated as to the investor-lenders?
  4. If the investor-lenders received all or part of the money from the investment bank, how much is owed by the homeowner and to whom?
  5. To whom was money paid? Who received the actual payments from borrowers, co-obligors, insurance, credit default swaps, federal bailouts and civil settlements? How much of this money was received as agent for the investor-lenders (creditors)?

There are lots of questions but they can all be answered with arithmetic. If investor bought a bogus mortgage bond for $100 million and received $50 million in settlement, then they are either owed still $50 million or they settled the claim and if you contact them, they will say they have no interest in pursuing the matter any further. So why the foreclosure? And if there is a foreclosure, who gets the money? Who is the “creditor that submits a “credit bid.?”

People don’t like talking about the free house syndrome, but SOMEONE IS GETTING A FREE HOUSE one way or the other — either the banks or the homeowner.

One thing I am sure about is that there is a claim that can be firmly supported by the presence of a settlement or proceeds from co-obligors (insurers, CDS counterparties etc.). Either the amount due is wrong, eliminated or at least subject to a proper accounting. This would negate the issues of foreclosure, at least for a while, in the notice of default and initiation of foreclosure based upon the assertion that the creditor has been identified as beneficiary or mortgagee and the amount due is as stated. The amount due is probably NOT as stated and the creditor identified might not even have a dog in the race anymore.

Judges get angry at borrowers for bringing this up. I think lawyers should have the guts to stand up to such judges and say your anger is misplaced. Don’t shoot the messenger! The borrower didn’t create this mess, it was the financial industry and this loan was not even originated using standard rules of underwriting and document preparation.

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , | 111 Comments »

OK LAWYERS, STEP UP TO THIS ONE — It is literally a no- brainer

Posted on May 25, 2012 by Neil Garfield

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Editor’s Comment: The very same people who so ardently want us to remain strong and fight wars of dubious foundation are the ones who vote against those who serve our country. Here is a story of a guy who was being shot at and foreclosed at the same time — a blatant violation of Federal Law and good sense. When I practiced in Florida, it was standard procedure if we filed suit to state that the defendant is not a member of the armed forces of the United States. Why? Because we don’t sue people that are protecting our country with their life and limb.

It IS that simple, and if the banks are still doing this after having been caught several times, fined a number of times and sanctioned and number of times, then it is time to take the Bank’s charter away. Nothing could undermine the defense and sovereignty of our country more than to have soldiers on the battlefield worrying about their families being thrown out onto the street.

One woman’s story:

My husband was on active duty predeployment training orders from 29 May 2011 to 28 August 2011 and again 15 October 2011 to 22 November 2011. He was pulled off the actual deployment roster for the deployment date of 6 December 2011 due to the suspension of his security clearance because of the servicer reporting derogatory to his credit bureau (after stating they would make the correction). We spoke with the JAG and they stated those periods of service are protected as well as nine months after per the SCRA 50 USC section 533.

We have been advised that a foreclosure proceeding initiated within that 9 month period is not valid per the SCRA. I have informed the servicer via phone and they stated their legal department is saying they are permitted to foreclose. They sent a letter stating the same. I am currently working on an Emergency Ex Parte Application for TRO and Preliminary Injunction to file in federal court within the next week. It is a complicated process.

The servicer has never reported this VA loan in default and the VA has no information. That is in Violation of VA guidelines and title 38. They have additionally violated Ca Civil Code 2323.5. They NEVER sent a single written document prior to filing NOD 2/3/2012. They never made a phone call. They ignored all our previous calls and letter. All contact with the servicer has been initiated by us, never by them. This was a brokered deal. We dealt with Golden Empire Mortgage. They offered the CalHFA down payment assistance program in conjunction with their “loan” (and I use that term loosely). What we did not know was that on the backside of the deal they were fishing for an investor.

Over the past two years CalHFA has stated on numerous occasions they do not own the 1st trust deed. Guild (the servicer) says they do. I have a letter dated two weeks after closing of the loan saying the “servicing” was sold to CalHFA. Then a week later another letter stating the “servicing” was sold to Guild. Two conflicting letters saying two different things. The DOT and Note are filed with the county listing Golden Empire Mortgage as the Lender, North American Title as the Trustee and good old MERS as the Nominee beneficiary.

There is no endorsement or alonge anywhere in the filing of the county records. We signed documents 5/8/2008 and filings were made 5/13/2008. After two years of circles with Guild and CalHFA two RESPA requests were denied and I was constantly being told “the investor, the VA and our legal department” are reviewing the file to see how to apply the deferrment as allowed by California law and to compute taxes and impound we would need to pay during that period. Months of communications back in forth in 2009 and they never did a thing. Many calls to CalHFA with the same result. We don;t own it, call Guild, we only have interest in the silent 2nd.

All of a sudden in December 2011 an Assignment of DOT was filed by Guild from Golden Empire to CalHFA signed by Phona Kaninau, Asst Secretary MERS, filed 12/13/2011. om 2/3/2012 Guild filed a Cancellation of NOD from the filing they made in 2009 signed by Rhona Kaninau, Sr. VP of Guild. on the same date Guild filed a substitution of trustee naming Guild Admin Corp as the new trustee and Golden Empire as the old trustee, but on out DOT filed 5/13/2008 it lists North American Title as the Trustee. First off how can Rhona work for two different companies.

Essentially there is no fair dealing in any of this. Guild is acting on behalf of MERS, the servicing side of their company, and now as the trustee. How is that allowed? Doesn;t a trustee exist to ensure all parties interests are looked out for? It makes no sense to me how that can be happening. On the assignment I believe there is a HUGE flaw… it states ….assigns, and transfers to: CalHFA all beneficial interest…..executed by Joshua as Trustor, to Golden Empire as Trustee, and Recordeed….. how can you have two “to’s” .. shouldn’t after Trustor it say FROM???? Is that a fatal flaw???

And then looking at the Substitution it states “Whereas the undersigned present Beneficiary under said Deed of Trust” (which on the DOT at that time would show MERS but on the flawed assignment says Golden Empire was the trustee), it then goes on the say “Therefore the undersigned hereby substitutes GUILD ADMIN CORP” and it is signed “Guild Mortgage Company, as agent for CalHFA”, signed by Rhona Kaninau (same person who signed the assignment as a MERS Asst Secretary). I mean is this seriously legal??? Would a federal judge look at this and see how convoluted it all is?

I appreciate the offer of the securitization discount but in out current economic situation and having to pay $350 to file a federal case we just can’t afford it right now. I hope you will keep that offer open. Will this report cover tracking down a mortgage allegedly backed by CalHFA bonds? This is their claim.

Thank you so much for your assistance. This is overwhelming. Do you have any attorneys here in Southern California you world with I might be able to talk to about what they would charge us for a case like this?

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , | 78 Comments »

Now They See the Light — 40% of Homes Underwater

Posted on May 24, 2012 by Neil Garfield

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Editor’s Comment:

They were using figures like 12% or 18% but I kept saying that when you take all the figures together and just add them up, the number is much higher than that. So as it turns out, it is even higher than I thought because they are still not taking into consideration ALL the factors and expenses involved in selling a home, not the least of which is the vast discount one must endure from the intentionally inflated appraisals.

With this number of people whose homes are worth far less than the loans that were underwritten and supposedly approved using industry standards by “lenders” who weren’t lenders but who the FCPB now says will be treated as lenders, the biggest problem facing the marketplace is how are we going to keep these people in their homes — not how do we do a short-sale. And the seconcd biggest problem, which dovetails with Brown’s push for legislation to break up the large banks, is how can we permit these banks to maintain figures on the balance sheet that shows assets based upon completely unrealistic figures on homes where they do not even own the loan?

Or to put it another way. How crazy is this going to get before someone hits the reset the button and says OK from now on we are going to deal with truth, justice and the American way?

With no demographic challenges driving up prices or demand for new housing, and with no demand from homeowners seeking refinancing, why were there so many loans? The answer is easy if you look at the facts. Wall Street had come up with a way to get trillions of dollars in investment capital from the biggest managed funds in the world — the mortgage bond and all the derivatives and exotic baggage that went with it. 

So they put the money in Superfund accounts and funded loans taking care of that pesky paperwork later. They funded loans and approved loans from non-existent borrowers who had not even applied yet. As soon as the application was filled out, the wire transfer to the closing agent occurred (ever wonder why they were so reluctant to change closing agents for the convenience of the parties?).

The instructions were clear — get the signature on some paperwork even if it is faked, fraudulent, forged and completely outside industry standards but make it look right. I have this information from insiders who were directly involved in the structuring and handling of the money and the false securitization chain that was used to cover up illegal lending and the huge fees that were taken out of the superfund before any lending took place. THAT explains how these banks are bigger than ever while the world’s economies are shrinking.

The money came straight down from the investor pool that included ALL the investors over a period of time that were later broker up into groups and the  issued digital or paper certificates of mortgage bonds. So the money came from a trust-type account for the investors, making the investors the actual lenders and the investors collectively part of a huge partnership dwarfing the size of any “trust” or “REMIC”. At one point there was over $2 trillion in unallocated funds looking for a loan to be attached to the money. They couldn’t do it legally or practically.

The only way this could be accomplished is if the borrowers thought the deal was so cheap that they were giving the money away and that the value of their home had so increased in value that it was safe to use some of the equity for investment purposes of other expenses. So they invented more than 400 loans products successfully misrepresenting and obscuring the fact that the resets on loans went to monthly payments that exceeded the gross income of the household based upon a loan that was funded based upon a false and inflated appraisal that could not and did not sustain itself even for a period of weeks in many cases. The banks were supposedly too big to fail. The loans were realistically too big to succeed.

Now Wall Street is threatening to foreclose on anyone who walks from this deal. I say that anyone who doesn’t walk from that deal is putting their future at risk. So the big shadow inventory that will keep prices below home values and drive them still further into the abyss is from those private owners who will either walk away, do a short-sale or fight it out with the pretender lenders. When these people realize that there are ways to reacquire their property in foreclosure with cash bids that are valid while the credit bid of the pretender lender is invlaid, they will have achieved the only logical answer to the nation’s problems — principal correction and the benefit of the bargain they were promised, with the banks — not the taxpayers — taking the loss.

The easiest way to move these tremendous sums of money was to make it look like it was cheap and at the same time make certain that they had an arguable claim to enforce the debt when the fake payments turned into real payments. SO they created false and frauduelnt paperwork at closing stating that the payee on teh note was the lender and that the secured party was somehow invovled in the transaction when there was no transaction with the payee at all and the security instrumente was securing the faithful performance of a false document — the note. Meanwhile the investor lenders were left without any documentation with the borrowers leaving them with only common law claims that were unsecured. That is when the robosigning and forgery and fraudulent declarations with false attestations from notaries came into play. They had to make it look like there was a real deal, knowing that if everything “looked” in order most judges would let it pass and it worked.

Now we have (courtesy of the cloak of MERS and robosigning, forgery etc.) a completely corrupted and suspect chain of title on over 20 million homes half of which are underwater — meaning that unless the owner expects the market to rise substantially within a reasonable period of time, they will walk. And we all know how much effort the banks and realtors are putting into telling us that the market has bottomed out and is now headed up. It’s a lie. It’s a damned living lie.

One in Three Mortgage Holders Still Underwater

By John W. Schoen, Senior Producer

Got that sinking feeling? Amid signs that the U.S. housing market is finally rising from a long slumber, real estate Web site Zillow reports that homeowners are still under water.

Nearly 16 million homeowners owed more on their mortgages than their home was worth in the first quarter, or nearly one-third of U.S. homeowners with mortgages. That’s a $1.2 trillion hole in the collective home equity of American households.

Despite the temptation to just walk away and mail back the keys, nine of 10 underwater borrowers are making their mortgage and home loan payments on time. Only 10 percent are more than 90 days delinquent.

Still, “negative equity” will continue to weigh on the housing market – and the broader economy – because it sidelines so many potential home buyers. It also puts millions of owners at greater risk of losing their home if the economic recovery stalls, according to Zillow’s chief economist, Stan Humphries.

“If economic growth slows and unemployment rises, more homeowners will be unable to make timely mortgage payments, increasing delinquency rates and eventually foreclosures,” he said.

For now, the recent bottoming out in home prices seems to be stabilizing the impact of negative equity; the number of underwater homeowners held steady from the fourth quarter of last year and fell slightly from a year ago.

Real estate market conditions vary widely across the country, as does the depth of trouble homeowners find themselves in. Nearly 40 percent of homeowners with a mortgage owe between 1 and 20 percent more than their home is worth. But 15 percent – approximately 2.4 million – owe more than double their home’s market value.

Nevada homeowners have been hardest hit, where two-thirds of all homeowners with a mortgage are underwater. Arizona, with 52 percent, Georgia (46.8 percent), Florida (46.3 percent) and Michigan (41.7 percent) also have high percentages of homeowners with negative equity.

Turnabout is Fair Play:

The Depressing Rise of People Robbing Banks to Pay the Bills

Despite inflation decreasing their value, bank robberies are on the rise in the United States. According to the FBI, in the third quarter of 2010, banks reported 1,325 bank robberies, burglaries, or other larcenies, an increase of more than 200 crimes from the same quarter in 2009. America isn’t the easiest place to succeed financially these days, a predicament that’s finding more and more people doing desperate things to obtain money. Robbing banks is nothing new, of course; it’s been a popular crime for anyone looking to get quick cash practically since America began. But the face and nature of robbers is changing. These days, the once glamorous sheen of bank robberies is wearing away, exposing a far sadder and ugly reality: Today’s bank robbers are just trying to keep their heads above water.

Bonnie and Clyde, Pretty Boy Floyd, Baby Face Nelson—time was that bank robbers had cool names and widespread celebrity. Butch Cassidy and the Sundance Kid, Jesse James, and John Dillinger were even the subjects of big, fawning Hollywood films glorifying their thievery. But times have changed.

In Mississippi this week, a man walked into a bank and handed a teller a note demanding money, according to broadcast news reporter Brittany Weiss. The man got away with a paltry $1,600 before proceeding to run errands around town to pay his bills and write checks to people to whom he owed money. He was hanging out with his mom when police finally found him. Three weeks before the Mississippi fiasco, a woman named Gwendolyn Cunningham robbed a bank in Fresno and fled in her car. Minutes later, police spotted Cunningham’s car in front of downtown Fresno’s Pacific Gas and Electric Building. Inside, she was trying to pay her gas bill.

The list goes on: In October 2011, a Phoenix-area man stole $2,300 to pay bills and make his alimony payments. In early 2010, an elderly man on Social Security started robbing banks in an effort to avoid foreclosure on the house he and his wife had lived in for two decades. In January 2011, a 46-year-old Ohio woman robbed a bank to pay past-due bills. And in February of this year, a  Pennsylvania woman with no teeth confessed to robbing a bank to pay for dentures. “I’m very sorry for what I did and I know God is going to punish me for it,” she said at her arraignment. Yet perhaps none of this compares to the man who, in June 2011, robbed a bank of $1 just so he could be taken to prison and get medical care he couldn’t afford.

None of this is to say that a life of crime is admirable or courageous, and though there is no way to accurately quantify it, there are probably still many bank robbers who steal just because they like the thrill of money for nothing. But there’s quite a dichotomy between the bank robbers of early America, with their romantic escapades and exciting lifestyles, and the people following in their footsteps today: broke citizens with no jobs, no savings, no teeth, and few options.

The stealing rebel types we all came to love after reading the Robin Hood story are gone. Today the robbers are just trying to pay their gas bills. There will be no movies for them.

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BANKRUPTCY PRACTICE: NAME ONLY THE ORIGINATING LENDER OF RECORD

Posted on October 10, 2010 by Neil Garfield

submitted by Brian Davies

EDITOR’S NOTE: By naming only the originating lender of record — that is, the only instrument in the title record as per the county recording office, you immediately shift the burden onto any pretender lender to explain what they are doing in court. If you look down into the records in the link below you’ll see Davies objection and some excellent points he raises. My opinion is that the property value is unknown and unencumbered by a mortgage, if you know about the securitization path. Combine that with our loan specific title review, you get a value to put in if you want to, and then name only the originating lender as a creditor under unsecured claims because the mortgage was split from the note and note was split from the obligation. The MERS assignment is icing on the cake.

It’s my opinion that if you show the home as encumbered by the mortgage it is an admission of the validity of the encumbrance. That is an admission of a “fact” that is probably false. Why would you do that? In my opinion, generally speaking, NONE of these securitized “mortgages” are secured, NONE of the obligations are properly or legally described in the note and NONE of them are properly secured with a perfected lien in favor of an actual creditor. The security instrument is an “incident” to the note. But the note neither names the actual creditor nor discloses the true facts of the deal. The note is contrary to the Good Faith Estimate in that respect as well (a TILA violation).

So the obligation that arose when the borrower took the money is NOT described in the note, at least not completely. That means that the note, which is normally presumed to be evidence of the obligation, is not a complete description of the obligation and in fact is not even correct insofar as it identifies the creditor or lender. The note also does not contain the terms of the mortgage bond given to the lender (investor).

The mortgage bond received by the lender (investor) contains terms and parties that are not included in the note. Neither the bond nor the note are complete descriptions of the obligation.

Thus neither the note nor the bond can be accepted into evidence as the complete statement of the obligation. Even together they fail to show the actual path that the money traveled and they provide the context and conditions under which the note or mortgage could be accepted by the pool —- conditions that were in nearly ALL cases unfulfilled. There can be no proper accounting of the amount due nor a determination of whether there is  an actual default (failure of the CREDITOR to receive payment, not merely the the failure of the borrower to make a payment which might not be due).

MOTION FOR RELIEF FROM STAY BY ONEWEST. A PARTY NOT EVEN MENTIONED IN THE CHAPTER 7 FILING. HOWEVER, MOVANT ONEWEST COMES INTO THE COURT WITH 1) NO STANDING, 2) FALSIFIED AFFIDAVITS 3) DISCOLORED NOTES NOT COPIES OF THE ORIGINALS 4) SIGNED AFFIDAVITS BY BRIAN BARNHILL THAT ARE INACCURATE 5) DEED OF TRUST THAT IS FAULTY AND NOT PERFECTED 6) A SECOND ASSIGNMENT OF THE DEED OF TRUST WHICH TRIES TO CORRECT SECURITY INTEREST AND TITLE ISSUES.. DEBTOR ASKS FOR SANCTIONS. READ THE ENTIRETY AS IT IS LISTED AS UNSECURED DEBT, ONLY ORIGINATOR IS LISTED

http://www.scribd.com/doc/39002836/ONEWEST-HAS-NO-STANDING-MOTION-FOR-RELIEF-FROM-STAY-WITH-OBJECTIONS

They will get caught

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , | 14 Comments »

TITLE AND SECURITIZATION ANALYSIS

Posted on September 20, 2010 by Neil Garfield

I HAD A QUESTION FROM ONE OF OUR BLOG READER-CUSTOMERS AND I REALIZED EVERYONE SHOULD SEE THE ANSWER.

Chris: Your question is a smart one. Here is the deal. We provide the search capacity and if you want a complete analysis and accounting you’ll need to retain someone for that. we have that available if you want us to do it.

But the main point I want to stress hear is that the subject of securitization was the receivables and not the obligation, note or mortgage from the borrower.

  • The receivables consist of the proceeds of payment from MULTIPLE sources as you have no doubt seen on the blog.

    The borrower signs a note that is never actually given to the investor.

  • The investor receives a mortgage bond or actually evidence of a mortgage bond that was never disclosed, seen or signed by the borrower.

  • In practice, the obligation, note and mortgage (Deed of Trust) are never actually transmitted, transferred, assigned or indorsed to the lender.

  • It is all an illusion. Any transfer is from one intermediary pretender lender to another intermediary pretender lender. The actual loan transaction never actually reaches the loan pool — but in every foreclosure it is claimed to be there.

  • The legal issue that ensues is whether the originating lender still is the only lender of record without any money owed to it (which means the loan is unsecured but does NOT mean there is no obligation) OR whether the pretender lender can convince the Judge that despite the lack of legal proof and legal requirements, the loan should be treated as equitably in the pool even if it is not legally in the pool.
  • The problem is of course there is no such thing. And in Missouri when they tried to make the legal argument, it was soundly rejected and they never tried it again.
  • But they don’t have to try again because Judges are still confused by the legal effect of securitization. In their confusion they are treating the loan as part of the pool even though they have no actual evidence (because none exists) that the loan ever made it into the pool through normal assignments, indorsements etc..
  • As far as they are concerned, the borrower signed a note, owes the money, didn’t pay it and the case is closed.

  • The idea that that there are MULTIPLE channels of payment between the borrower and the real lender and that therefore the documents in the middle tell the real story is not one they really want to hear — it raises a complexity they don’t wish to deal with.

    It also raises a political hot potato. Any one of these cases if they were considered alone and not in the context of millions of others would be decided in favor of the borrower (in my opinion). Judges are loathe to issue an order that in essence turns the entire mortgage mess on its head in favor of borrowers — which really only means that the real parties in interest must come forward and the real parties in interests must strike a deal in light of the obvious defects in the securitization and title process.

  • So we are presently stuck between a majority of Judges who don’t want to apply the normal rules of evidence, pleadings and substantive law and the minority of Judges who see all too clearly the coming title cliff we are heading toward.
  • What this means for you is that you must realize that the title part of your search is the ground level search which shows the breaks in the chain and the securitization portion of your search shows the REST of the terms that were not contained in the note, describes but does not name the real lender, and adds co-obligors who are providing cover for the bond the the investor thinks he bought with virtually no risk.
  • Without the liability of third parties, the investor would not have entered the deal. Just as with knowledge that the home appraisal was falsely inflated neither the borrower nor the lender would have entered the deal and all that money, billions in bonuses and billions in “profits” would never have been recorded.

  • THIS IS WHY YOU MUST POUND AND POUND AND POUND ON THE FACT THAT THIS WAS A SINGLE TRANSACTION BETWEEN BORROWER AND ACTUAL LENDER AND THAT THE ORIGINATING LENDER AND EVERYONE ELSE WERE INTERMEDIARIES IN THE DEAL. THE REQUIREMENTS OF LAW IN PERFECTING A LIEN WERE NOT PRESENT.

livinglies-newsletter-provides-more-strategic-info

WE HEAR YOU! YOU NEED THE TITLE ANALYSIS, YOU NEED THE SECURITIZATION ANALYSIS AND YOU NEED TELECONFERENCES WITH A NEWSLETTER WHERE YOU CAN PAY A MONTHLY AMOUNT FOR SIX MONTHS INSTEAD OF ONE BIG FEE. SO HERE IT IS

COMBO TITLE AND SECURITIZATION ANALYSIS PAY MONTHLY

AND AGAIN — HERE IS WHAT WE HEAR YOU ASKING FOR —-

JUST GIVE THE NAME OF THE TRUST, I\’LL DO THE REST

YOU MUST FILL OUT THIS FORM TO GET THE NAME OF THE TRUST

OR YOU CAN ORDER YOUR ITEMS SEPARATELY —->

ORDER LOAN SPECIFIC TITLE REPORT, COPIES OF DOCUMENTATION AND ANALYSIS HERE

ORDER SECURITIZATION REPORT COPIES OF DOCUMENTATION AND ANALYSIS HERE

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Filed under: foreclosure | Tagged: , , , , , , , , , , | 35 Comments »

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