non-judicial sale is NOT an available election for a securitized loan

Posted on May 28, 2010 by Neil Garfield

NON-JUDICIAL STATES: THE DIFFERENCE BETWEEN FORECLOSURE AND SALE:

FORECLOSURE is a judicial process herein the “lender” files a lawsuit seeking to (a) enforce the note and get a judgment in the amount owed to them (b) asking the court to order the sale of the property to satisfy the Judgment. If the sale price is lower than the Judgment, then they will ask for a deficiency Judgment and the Judge will enter that Judgment. If the proceeds of sale is over the amount of the judgment, the borrower is entitled to the overage. Of course they usually tack on a number of fees and costs that may or may not be allowable. It is very rare that there is an overage. THE POINT IS that when they sue to foreclose they must make allegations which state a cause of action for enforcement of the note and for an order setting a date for sale. Those allegations include a description of the transaction with copies attached, and a claim of non-payment, together with allegations that the payments are owed to the Plaintiff BECAUSE they would suffer financial damage as a result of the non-payment. IN THE PROOF of the case the Plaintiff would be required to prove each and EVERY element of their claim which means proof that each allegation they made and each exhibit they rely upon is proven with live witnesses who are competent — i.e., they take an oath, they have PERSONAL KNOWLEDGE (not what someone else told them),personal recall and the ability to communicate what they know. This applies to documents they wish to use as well. That is called authentication and foundation.

SALE: Means what it says. In non-judicial sale they just want to sell your property without showing any court that they can credibly make the necessary allegations for a judicial foreclosure and without showing the court proof of the allegations they would be required to make if they filed a judicial foreclosure. In a non-judicial state what they want is to SELL and what they don’t want is to foreclose. Keep in mind that every state that allows non-judicial sale treats the sale as private and NOT a judicial event by definition. In Arizona and many other states there is no election for non-judicial sale of commercial property because of the usual complexity of commercial transactions. THE POINT is that a securitized loan presents as much or more complexity than commercial real property loan transactions. Thus your argument might be that the non-judicial sale is NOT an available election for a securitized loan.

When you bring a lawsuit challenging the non-judicial sale, it would probably be a good idea to allege that the other party has ELECTED NON-JUDICIAL sale when the required elements of such an election do not exist. Your prima facie case is simply to establish that the borrower objects the sale, denies that they pretender lender has any right to sell the property, denies the default and that the securitization documents show a complexity far beyond the complexity of even highly complex commercial real estate transactions which the legislature has mandated be resolved ONLY by judicial foreclosure.

THEREFORE in my opinion I think in your argument you do NOT want to concede that they wish to foreclose. What they want to do is execute on the power of sale in the deed of trust WITHOUT going through the judicial foreclosure process as provided in State statutes. You must understand and argue that the opposition is seeking to go around normal legal process which requires a foreclosure lawsuit.

THAT would require them to make allegations about the obligation, note and mortgage that they cannot make (we are the lender, the defendant owes us money, we are the holder of the note, the note is payable to us, he hasn’t paid, the unpaid balance of the note is xxx etc.) and they would have to prove those allegations before you had to say anything. In addition they would be subject to discovery in which you could test their assertions before an evidentiary hearing. That is how lawsuits work.

The power of sale given to the trustee is a hail Mary pass over the requirements of due process. But it allows for you to object. The question which nobody has asked and nobody has answered, is on the burden of proof, once you object to the sale, why shouldn’t the would-be forecloser be required to plead and prove its case? If the court takes the position that in non-judicial states the private power of sale is to be treated as a judicial event, then that is a denial of due process required by Federal and state constitutions. The only reason it is allowed, is because it is private and “non-judicial.” The quirk comes in because in practice the homeowner must file suit. Usually the party filing suit must allege facts and prove a prima facie case before the burden shifts to the other side. So the Judge is looking at you to do that when you file to prevent the sale.

Legally, though, your case should be limited to proving that they are trying to sell your property, that you object, that you deny what would be the allegations in a judicial foreclosure and that you have meritorious defenses. That SHOULD trigger the requirement of re-orienting the parties and making the would-be forecloser file a complaint (lawsuit) for foreclosure. Then the burden of proof would be properly aligned with the party seeking affirmative relief (i.e., the party who wants to enforce the deed of trust (mortgage), note and obligation) required to file the complaint with all the necessary elements of an action for foreclosure and attach the necessary exhibits. They don’t want to do that because they don’t have the exhibits and the note is not payable to them and they cannot actually prove standing (which is a jurisdictional question). The problem is that a statute passed for judicial economy is now being used to force the burden of proof onto the borrower in the foreclosure of their own home. This is not being addressed yet but it will be addressed soon.

Filed under: CASES, CORRUPTION, Eviction, expert witness, Fannie MAe, foreclosure, foreclosure mill, Forensic Analysis Workshop, GTC | Honor, HERS, investment banking, Investor, MODIFICATION, Mortgage, Motion Practice and Discovery, securities fraud, Securitization Survey, Servicer, STATUTES, trustee, workshop | Tagged: , , , , , , , , , , , , , , , | 7 Comments »

Starting Action AFTER the Non-Judicial Sale: Get the Information

Posted on April 27, 2010 by Neil Garfield

33-809. Request for copies of notice of sale; mailing by trustee; disclosure of information regarding trustee sale

A. A person desiring a copy of a notice of sale under a trust deed, at any time subsequent to the recording of the trust deed and prior to the recording of a notice of sale pursuant thereto, shall record in the office of the county recorder in any county in which part of the trust property is situated a duly acknowledged request for a copy of any such notice of sale. The request shall set forth the name and address of the person or persons requesting a copy of such notice and shall identify the trust deed by setting forth the county, docket or book and page of the recording data thereof and by stating the names of the original parties to such deed, the date the deed was recorded and the legal description of the entire trust property and shall be in substantially the following form:

Request for Notice

Request is hereby made that a copy of any notice of sale under the trust deed recorded in docket or book ___________ at page ________, records of ______________ county, Arizona, _____________________________, _______________________________,

(legal description of trust property)

Executed by ________________________ as trustor, in which ______________ is named as beneficiary and __________________ as trustee, be mailed to _________________ at ___________________.

Dated this _______________ day of _______________, _____.

___________________

Signature

(Acknowledgement)

B. Not later than thirty days after recording the notice of sale, the trustee shall mail by certified or registered mail, with postage prepaid, a copy of the notice of sale that reflects the recording date together with any notice required to be given by subsection C of this section, addressed as follows:

1. To each person whose name and address are set forth in a request for notice, which has been recorded prior to the recording of the notice of sale, directed to the address designated in such request.

2. To each person who, at the time of recording of the notice of sale, appears on the records of the county recorder in the county in which any part of the trust property is situated to have an interest in any of the trust property. The copy of the notice sent pursuant to this paragraph shall be addressed to the person whose interest appears of record at the address set forth in the document. If no address for the person is set forth in the document, the copy of the notice may be addressed in care of the person to whom the recorded document evidencing such interest was directed to be mailed at the time of its recording or to any other address of the person known or ascertained by the trustee. If the interest that appears on the records of the county recorder is a deed of trust, a copy of the notice only needs to be mailed to the beneficiary under the deed of trust. If any person having an interest of record or the trustor, or any person who has recorded a request for notice, desires to change the address to which notice shall be mailed, the change shall be accomplished by a request as provided under this section.

3. For single family residential properties only, to the property address, except that the copy mailed pursuant to this paragraph may be mailed by first class mail.

C. The trustee, within five business days after the recordation of a notice of sale, shall mail by certified or registered mail, with postage prepaid, a copy of the notice of sale to each of the persons who were parties to the trust deed except the trustee. The copy of the notice mailed to the parties need not show the recording date of the notice. The notice sent pursuant to this subsection shall be addressed to the mailing address specified in the trust deed. In addition, notice to each party shall contain a statement that a breach or nonperformance of the trust deed or the contract or contracts secured by the trust deed, or both, has occurred, and setting forth the nature of such breach or nonperformance and of the beneficiary’s election to sell or cause to be sold the trust property under the trust deed and the additional notice shall be signed by the beneficiary or the beneficiary’s agent. A copy of the additional notice shall also be sent with the notice provided for in subsection B, paragraph 2 of this section to all persons whose interest in the trust property is subordinate in priority to that of the deed of trust along with a written statement that the interest may be subject to being terminated by the trustee’s sale. The written statement may be contained in the statement of breach or nonperformance.

D. No request for a copy of a notice recorded pursuant to this section, nor any statement or allegation in any request, nor any record of request, shall affect the title to the trust property or be deemed notice to any person that a person requesting a copy of notice of sale has or claims any interest in, or claim upon, the trust property.

E. At any time that the trust deed is subject to reinstatement pursuant to section 33-813, but not sooner than thirty days after recordation of the notice of trustee’s sale, the trustee shall upon receipt of a written request, provide, if actually known to the trustee, the following information relating to the trustee’s sale and the trust property:

1. The unpaid principal balance of the note or other obligation which is secured by the deed of trust.

2. The name and address of record of the owner of the trust property as of the date of recordation of the notice of trustee’s sale.

3. A list of the liens and encumbrances upon the trust property as of the date of recordation of the notice of trustee’s sale, excluding those matters set forth in section 33-438, subsection A.

If the trustee elects to charge a fee for providing the information requested, the fee shall not exceed five per cent of the amount the trustee may charge pursuant to section 33-813, subsection B, paragraph 4, except that the trustee shall not charge a fee that is more than one hundred dollars or be required to accept a fee that is less than thirty dollars but may accept a lesser fee at the trustee’s discretion. The trustee, or any other person furnishing information pursuant to this subsection to the trustee, shall not be subject to liability for any error or omission in providing the information requested, except for the wilful and intentional failure to provide information in the trustee’s actual possession.

F. Beginning at 9:00 a.m. and continuing until 5:00 p.m. mountain standard time on the last business day preceding the day of sale and beginning at 9:00 a.m. mountain standard time and continuing until the time of sale on the day of the sale, the trustee shall make available the actual bid or a good faith estimate of the credit bid the beneficiary is entitled to make at the sale. If the actual bid or good faith estimate is not available during the prescribed time period, the trustee shall postpone the sale until the trustee is able to comply with this subsection.

G. In providing information pursuant to subsections E and F of this section, the trustee, without obligation or liability for the accuracy or completeness of the information, may respond to oral requests, respond orally or in writing or provide additional information not required by such subsections. With respect to property that is the subject of a trustee’s sale, the beneficiary of such deed of trust or the holder of any prior lien may, but shall not be required to, provide information concerning such deed of trust or any prior lien that is not required by subsection E or F of this section and may charge a reasonable fee for providing the information. The providing of such information by any beneficiary or holder of a prior lien shall be without obligation or liability for the accuracy or completeness of the information.

Filed under: CORRUPTION, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , | 2 Comments »

AZ STATUTE DEFINES BENEFICIARY and CREDIT BID: NOT “NOMINEE”

Posted on April 24, 2010 by Neil Garfield

33-801. Definitions

In this chapter, unless the context otherwise requires:

1. “Beneficiary” means the person named or otherwise designated in a trust deed as the person for whose benefit a trust deed is given, or the person’s successor in interest. [Note that this does not include a nominee like MERS. There is a reason for that. The legislature intended to create certainty in contracts and actions on contracts. Using a nominee immediately creates the question of agency. The question of agency immediately raises the question of “who is the principal?” As long as that question exists, this statute is violated. If this statue is violated the deed of trust is void.]

2. “Business day” means any day other than a saturday or a legal holiday.

3. “Cash” means United States currency.

4. “Contract” means a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty, including but not limited to a note, A promissory note or provisions of any trust deed.

5. “Credit bid” means a bid made by the beneficiary in full or partial satisfaction of the contract or contracts which are secured by the trust deed. [Note that such credit bids are the rule rather than the exception and that the person making the credit bid is almost never the named the beneficiary. hence the sale is void]. [Note also that without an accounting for third party payments to the creditor in the securitization chain who has succeeded to the position of beneficiary BECAUSE THE SUCCESSION IS SHOWN IN THE COUNTY RECORDS, is voidable because the amount is incorrect, which is a question of fact that must be judicially resolved, which is why NO NON-JUDICIAL sale of securitized property is appropriate.] Such credit bid may only include an amount up to the full amount of the contract or contracts secured by the trust deed, less any amount owing on liens or encumbrances with interest which are superior in priority to the trust deed and which the beneficiary is obligated to pay under the contract or contracts or under the trust deed, together with the amount of other obligations provided in or secured by the trust deed and the costs and expenses of exercising the power of sale and the sale, including the trustee’s fees and reasonable attorney fees actually incurred. (e.s.)

6. “Force majeure” means an act of God or of nature, a superior or overpowering force or an event or effect that cannot reasonably be anticipated or controlled and that prevents access to the sale location for conduct of a sale.

7. “Parent corporation” means a corporation which owns eighty per cent or more of every class of the issued and outstanding stock of another corporation or, in the case of a savings and loan association, eighty per cent or more of its issued and outstanding guaranty capital.

8. “Trust deed” or “deed of trust” means a deed executed in conformity with this chapter and conveying trust property to a trustee or trustees qualified under section 33-803 to secure the performance of a contract or contracts, other than a trust deed which encumbers in whole or in part trust property located in Arizona and in one or more other states.

9. “Trust property” means any legal, equitable, leasehold or other interest in real property which is capable of being transferred, whether or not it is subject to any prior mortgages, trust deeds, contracts for conveyance of real property or other liens or encumbrances.

10. “Trustee” means an individual, association or corporation qualified pursuant to section 33-803, or the successor in interest thereto, to whom trust property is conveyed by trust deed. The trustee’s obligations to the trustor, beneficiary and other persons are as specified in this chapter, together with any other obligations specified in the trust deed.

11. “Trustor” means the person conveying trust property by a trust deed as security for the performance of a contract or contracts, or the successor in interest of such person.

Filed under: CDO, CORRUPTION, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , | 6 Comments »

Rally in Tally: Homeowner Relief and Housing Recovery Act is a Sham and Shame

Posted on April 20, 2010 by Neil Garfield

Editor’s Note: Due process requires that nobody be deprived of life, liberty or property without a judicial determination on the merits of claims against them. Non-judicial procedure runs a thin line that has not actually been tested constitutionally. Assuming it is valid by virtue of the “freedom of contract” doctrine, it still cannot be used to abuse and trick people into losing their homes when in fact the trickster has no interest in the loan, the property or the originating transaction. The attempt in Florida to increase the number of states using non-judicial procedure is abhorrent to anybody who conceives this country as a nation of laws. Non-judicial procedure is in my opinion, inapplicable to most, if not all, securitized loans.

The reason is simple: non-judicial foreclosure sales are meant to achieve judicial economy without prejudice to anyone. In securitized loans there are so many potential stakeholders that non-judicial sale prevents notice and due process and even encourages tricksters to use it against the interests of those who might have an interest. It not only increases moral hazard, it assures a growing cloud on the title of all properties that have been or will be the subject of foreclosure sales.

The pandemic effect on an already unstable marketplace is being amplified by these legislative attempts to legalize unjust enrichment of intermediaries who have no financial interest and who who are not subject to any financial loss for a loan, with it is performing or non-performing.

Posted by Malcolm Doney

The following letter was sent to all 14 members of the House Criminal & Civil Justice Council the day before the Bill was killed. We have reason to believe that it was instrumental in causing the death of that Bill and of the Senate Bill. It was authored by me assisted by three other founding members of Mortgage Justice an activist and educational not for profit. It is now widely circulated to many of the people going to the Rally in Tally. Any of your readers is free to use it as a tool to fight the fraudsters.
1. The Florida Bankers Association is attempting to use the power of the Florida State Legislature as an instrument to commit fraud upon its citizens and House Bill 1523 is inappropriately named The Homeowner Relief and Housing Recovery Act.
2. This Bill and its sister Bill in the Senate SB 2270 will not relieve any Homeowners and neither will it aid any Housing Recovery. On the contrary these Bills, if enacted, will add to the personal burdens of this States’ citizens, deepen the recession, add to the destabilization of communities, the breakup of families, an increase in blue collar crime and hundreds of millions of Dollars in lost Court revenue to the State.
3. HB 1523 adds to the deception in its introduction by adding to the ‘deadbeat borrowers myths’ [whereas it was deliberately planned and executed by Wall Street Investment Banks, Main Street Banks, mortgage lenders and their cohorts], falsely suggests that the cure is to expedite foreclosures to bottom out the market and that somehow this unsupportable economic theory will revitalize the economy, allow citizens to pay their taxes and Housing Associations to maintain communities.
4. If enacted, the passage of these Bills would shift the burden of proof to foreclose from the foreclosing parties to the homeowner, thus denying those homeowners their existing rights of due process and simultaneously, circumvent the recently imposed Supreme Court of Florida’s requirement placed upon foreclosing parties to substantiate under penalty of perjury that they have the legal authority to foreclose on real property given as security in a Mortgage to the true Owner of a Promissory Note and to engage in mandatory mediation. These requirements are the real reason for these proposed laws, because they can no longer hide their crimes from our Courts.
5. Because all members of the legislature are unaware of the fraudulent intent behind the Florida Bankers lobbyists who proposed this draft legislation we have concentrated most of our detailed efforts upon exposing the frauds rather than pointing out the serious deficiencies of the Bills as we know that other groups and individuals are adequately bringing such reviews to the attention of the legislature.
6. However, of paramount importance is the fact that lines 216 to 225 of the original draft clearly backdates the effect of these proposed laws to time immemorial. By the clever use of the words “agreed in substance in the security instrument” the drafters are seeking to remove the requirement contained in Florida Mortgages in clause 22 that all foreclosures must be conducted through the Judicial system by obliquely [but not specifically] referring to clause 16 in which the signor has acknowledged that the whole document is subject to Federal and State Law. The intent of the signing parties of all such Mortgages was that clause 22 of that unilateral contract would apply for the life of that instrument and that imprecise words such as “agreed in substance” would not be used in future laws to imply that they had agreed to a major change in the terms of those Mortgages and if enacted it will negatively impact basic human, property and contractual rights guaranteed under the Federal and State constitutions.
7. Mortgage Justice wishes to reveal that the truth behind the mortgage meltdown is:-
(a) The Housing Bubble was deliberately planned and implemented by Wall Street entities and the Main Street Banks.
(b) Mortgage and other loans were deliberately set up to fail.
(c) The lenders shown on Promissory Notes and Mortgages were not the Lenders, but were misappropriating the use of their licenses to transact mortgage business in the various states and were funded by Wall Street Brokers from the proceeds of the sale of Derivatives in wrongly described AAA rated Mortgage Backed Securities, for which they were paid excessive ‘yield spread premiums’ as a commission.
(d) Notes and Mortgages were not sold in the secondary market, neither were they transferred into securitized mortgage pools. It was impossible for pretend lenders to sell what they did not own.
(e) Contrived sales in the secondary market were documented in the Securities and Exchange Commission’s public records to entitle these pretend lenders to avoid paying federal taxes upon their profits by appearing to comply with IRC 860 and ‘selling’ loans into Real Estate Mortgage Investment Conduits (REMIC). Documents filed in the SEC provide proof that all these mortgages failed to comply with IRC 860.
(f) SEC documents establish that none of the mortgage loans that they say were put into REMIC Trusts, ever reached those Trusts and that the majority of the ‘so-called’ Trusts were not Trusts but a form of perpetual LLC with zero reporting requirements filed in the State of Delaware for the benefit of those major Banks and/or GSEs, as the true beneficiaries of all the frauds. These ‘Trusts’ are named Delaware Statutory Trusts, they are neither Statutory, nor are they Trusts.
(g) The true beneficiaries of the frauds also sold undisclosed and unregulated multiple default insurances and credit default swaps sold through the International Swaps and Derivatives Association on every new mortgage created to guarantee receipt of multiples of sums they had pretended to lend as and when the planned defaults occurred.
(h) It is therefore a fact that in almost every mortgage foreclosure action the foreclosing entity is not the owner of the Note or the Mortgage, never lent any money, is an integral part of a criminally motivated group has already reaped criminal profits, will share in multiple proceeds from insurances, all the Notes have been deliberately eliminated as admitted to the Supreme Court of Florida by the Florida Bankers Association and all Notes are already paid in full.
8. Mortgage Justice understands that the above text contains major allegations of fraud levied against some of the biggest and most powerful institutions in the land and does not make these accusations lightly. We are fully prepared upon request given adequate notice to furnish irrefutable documentary evidence supporting those accusations and if required to justify them with documentary evidence are willing so to do in order to demonstrate why this proposed legislation must be unanimously rejected by the Florida Legislature for the benefit of its present and future citizens.
9. We also request Public Hearings be scheduled prior to any passage of these proposals and we suggest inviting all interested parties, including representatives of finance and banking who are apparently promoting these Bills, consumers and their advocates.
10. Finally, we refer you to informative videos that can be accessed via the Internet. In our opinion the most reliably informative and professional presentations of the truth behind the housing bubble are those involving the eminent Academic, Criminologist, Economist, Lawyer, Accountant, author of the book entitled ‘The Best Way to Rob a Bank is to Own One’ and a former lead regulator during the savings and loans crisis. Professor William [Bill] Black. To authenticate what we have revealed, please watch Bill Moyers’ PBS interview of Bill. WE BELIEVE this interview OFFERS AN EXCEPTIONAL OVERVIEW OF THE CAUSE OF THE ECONOMIC MELTDOWN AND FRAUD PERPETRATED BY THE BANKING INDUSTRY ON THE AMERICAN CITIZEN AND WE BELIEVE IT IS IMPERATIVE THAT YOU WATCH AND HEAR THIS VIDEO.
11. Bill Black submitted himself to further questioning in a recent five-part interview on an Internet news channel, Real News. Please watch and listen to these questions and answers also. Political rhetoric, spin and sound bites are no answer to the serious crimes exposed in these interviews. He speaks openly, with a sincere honesty and integrity, almost extinct in our country today. His interview makes us starkly aware that the Banks are striking at the heart of our Republic and government, in all of its branches, but especially the judicial branch. Now that Courts are more closely examining foreclosure cases filed against homeowners in Florida and other jurisdictions the truth is beginning to emerge. Courts in Florida and in many states are finding that the banks lack standing, are filing frivolous lawsuits and are unable to prevail when a homeowner enters a properly pled defense. Mortgage justice strongly believes that the preservation of citizen rights to defend these actions is as vital to the Citizens of Florida as it is to the banks to destroy it. Preserving those rights will establish the truth, disclose extensive violations of state and federal laws by the banking industry, put an end to the power of the banking industry in our state legislature and the resultant backlash of public opinion will reverberate throughout our nation and the world. After nearly destroying the Global Economy, after lowering by twenty percent the net worth of our citizens, and after borrowing billions from them and reaping record profits without any legislative reform or inquiry they now attempt to make it even easier to take the homes of the citizens and deprive them of their legal rights. We urge you to carefully consider, investigate and reject this proposed legislation on behalf of the homeowners and citizens of Florida.
Sincerely,

MORTGAGE JUSTICE,
for our members and the Citizens of the United States, April 12, 2010.

P.S. Internet links – Please copy and paste the following links into your browser:- http://www.pbs.org/moyers/journal/04032009/watch.html

Then listen to – To rob a country, own a bank Pt5 – put this into Google and follow the links to 5 part video of Black on Real News.

Also essential viewing and listening to the latest on MSNBC,
http://www.rumormillnews.com/cgi-bin/forum.cgi?read=170712

Filed under: bubble, CDO, CORRUPTION, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , , , , , , | 17 Comments »

How To Stop Foreclosure

Posted on December 3, 2009 by Neil Garfield

see how-to-negotiate-a-short-sale

see how-to-negotiate-a-modification

See Template-Lawsuit-STOP-foreclosure-TILA-Mortgage-Fraud-predatory-lending-Set-Aside-Illegal-Trustee-Sale-Civil-Rico-Etc Includes QUIET TITLE and MOST FEDERAL STATUTES — CALIFORNIA COMPLAINT

See how-to-buy-a-foreclosed-house-its-a-business-its-an-opportunity-its-a-risk

This is general information and assumes that you have access to the rest of the material on the blog. Foreclosures come in various flavors.

First of all you have non-judicial and judicial foreclosure states. Non-judicial basically means that instead of signing a conventional mortgage and note, you signed a document that says you give up your right to a judicial proceeding. So the pretender lender or lender simply instructs the Trustee to sell the property, giving you some notice. Of course the question of who is the lender, what is a beneficiary under a deed of trust, what is a creditor and who owns the loan NOW (if anyone) are all issues that come into play in litigation.

In a non-judicial state you generally are required to bring the matter to court by filing a lawsuit. In states like California, the foreclosers usually do an end run around you by filing an unlawful detainer as soon as they can in a court of lower jurisdiction which by law cannot hear your claims regarding the illegality of the mortgage or foreclosure.

In a judicial state the forecloser must be the one who files suit and you have considerably more power to resist the attempt to foreclose.

Then you have stages:

STAGE 1: No notice of default has been sent.

In this case you want to get a forensic analysis that is as complete as humanly possible — TILA, RESPA, securitization, title, chain of custody, predatory loan practices, fraud, fabricated documents, forged documents etc. I call this the FOUR WALL ANALYSIS, meaning they have no way to get out of the mess they created. Then you want a QWR (Qualified Written Request) and DVL (Debt Validation Letter along with complaints to various Federal and State agencies. If they fail to respond or fail to answer your questions you file a suit against the party who received the QWR, the party who originated the loan (even if they are out of business), and John Does 1-1000 being the owners of mortgage backed bonds that are evidence of the investors ownership in the pool of mortgages, of which yours is one. The suit is simple — it seeks to stop the servicer from receiving any payments, install a receiver over the servicer’s accounts, order them to answer the simple question “Who is my creditor and how do I get a full accounting FROM THE CREDITOR? Alternative counts would be quiet title and damages under TILA, RESPA, SEC, etc.

Tactically you want to present the forensic declaration and simply say that you have retained an expert witness who states in his declaration that the creditor does not include any of the parties disclosed to you thus far. This [prevents you from satisfying the Federal mandate to attempt modification or settlement of the loan. You’ve asked (QWR and DVL) and they won’t tell. DON’T GET INTO INTRICATE ARGUMENTS CONCERNING SECURITIZATION UNTIL IT IS NECESSARY TO DO SO WHICH SHOULD BE AFTER A FEW HEARINGS ON MOTIONS TO COMPEL THEM TO ANSWER.

IN OTHER WORDS YOU ARE SIMPLY TELLING THE JUDGE THAT YOUR EXPERT HAS PRESENTED FACTS AND OPINION THAT CONTRADICT AND VARY FROM THE REPRESENTATIONS OF COUNSEL AND THE PARTIES WHO HAVE BEEN DISCLOSED TO YOU THUS FAR.

YOU WANT TO KNOW WHO THE OTHER PARTIES ARE, IF ANY, AND WHAT MONEY EXCHANGED HANDS WITH RESPECT TO YOUR LOAN. YOU WANT EVIDENCE, NOT REPRESENTATIONS OF COUNSEL. YOU WANT DISCOVERY OR AN ORDER TO ANSWER THE QWR OR DVL. YOU WANT AN EVIDENTIARY HEARING IF IT IS NECESSARY.

Avoid legal argument and go straight for discovery saying that you want to be able to approach the creditor, whoever it is, and in order to do that you have a Federal Statutory right (RESPA) to the name of a person, a telephone number and an address of the creditor — i.e., the one who is now minus money as a result of the funding of the loan. You’ve asked, they won’t answer.

Contemporaneously you want to get a temporary restraining order preventing them from taking any further action with respect to transferring, executing documents, transferring money, or collecting money until they have satisfied your demand for information and you have certified compliance with the court. Depending upon your circumstances you can offer to tender the monthly payment into the court registry or simply leave that out.

You can also file a bankruptcy petition especially if you are delinquent in payments or are about to become delinquent.

STAGE 2: Notice of Default Received

Believe it or not this is where the errors begin by the pretender lenders. You want to challenge authority, authenticity, the amount claimed due, the signatory, the notary, the loan number and anything else that is appropriate. Then go back to stage 1 and follow that track. In order to effectively do this you need to have that forensic analysis and I don’t mean the TILA Audit that is offered by so many companies using off the shelf software. You could probably buy the software yourself for less money than you pay those companies. I emphasize again that you need a FOUR WALL ANALYSIS.

Stage 3 Non-Judicial State, Notice of Sale received:

State statutes usually give you a tiny window of opportunity to contest the sale and the statute usually contains exact provisions on how you can do that or else your objection doesn’t count. At this point you need to secure the services of competent, knowledgeable, experienced legal counsel — professionals who have been fighting with these pretender lenders for a while. Anything less and you are likely to be sorely disappointed unless you landed, by luck of the draw, one of the increasing number of judges you are demonstrating their understanding and anger at this fraud.

Stage 4: Judicial State: Served with Process:

You must answer usually within 20 days. Failure to do so, along with your affirmative defenses and counterclaims, could result in a default followed by a default judgment followed by a Final Judgment of Foreclosure. See above steps.

Stage 5: Sale already occurred

You obviously need to reverse that situation. Usually the allegation is that the sale should be vacated because of fraud on the court (judicial) or fraudulent abuse of non-judicial process. This is a motion or Petitioner but it must be accompanied by a lawsuit, properly served and noticed to the other side. You probably need to name the purchaser at sale, and ask for a TRO  (Temporary Restraining Order) that stops them from moving the property or the money around any further until your questions are answered (see above). At the risk of sounding like a broken record, you need a good forensic analyst and a good lawyer.

Stage 6: Eviction (Unlawful Detainer Filed or Judgment entered:

Same as Stage 5.

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Foreclosure Defense: Why People are Ignoring Their Rights

Posted on August 3, 2008 by Neil Garfield

Sometimes this mission of mine gets frustrating. I’m trying to provide the necessary information for homeowners and their lawyers to defend their property, get damages from their lender, and potentially walk from the foreclosure house with free and clear title and no note instead of walking from their homes.

Lawyers are mostly skeptical and people are too depressed and beaten to take all this seriously. But you DO have rights, and it isn’t about delaying the inevitable. It is about getting relief you deserve and can legally obtain but only if you assert those rights. The bad guys are betting you will walk away like 57% of homeowners are doing. I’m betting on you — that you will stand up for your rights and stop the current disaster and turn it to your advantage.

Nearly all current foreclosure actions are legally improper in both procedure and substance.

Notice of Sale is not available where there are equitable and constructive rights of third parties (i.e., investors in the securitization chain).

ALL foreclosures involving securitized loans are required to be initiated as judicial foreclosures — not by non-judicial Notice of Sale. This forces the “lender” to prove it is a holder in due course and has the right to foreclose. It also gives the homeowner/borrower the opportunity to find out whether the insurance and other agreements attendant to the pooling and service agreements, actually created alternative sources of payment.

In many cases, the note has been paid in full by a third party AND the monthly payments are being made without contribution from the borrower. These third parties might have rights to collect against the “lender” or the “borrower” but that doesn’t give the “lender” the right to foreclose. Those rights go with the note, according to LAW, and a mortgage servicer by definition does not own the note even if they have possession of it.

In many cases the note was forged in advance of the loan closing in order to pre-sell it (the industry calls it selling forward). Thus there is no endorsement on the note showing a transfer of ownership, and yet the payee “lender” has received all of the principal balance PLUS a fee of around three percent, plus the fee for servicing.

Now they are coming into court, fully paid, and foreclosing on the house, so they want the property too. And they want a deficiency judgment as well. It is highway robbery and the news media is ignoring the black letter law and the rights of homeowners giving the misimpression that this transfer of wealth to the upper echelons of our society cannot be stopped or reversed. It isn’t true. Most homeowners are giving up without a fight (57%). They have rights and meritorious defenses.

They can turn back the tide if they have the information. I am a retired (OK, now semi-retired) attorney who is giving out information for free on my website. More than 100 homeowners nationwide have used the information contained on my blog and walked out of foreclosure proceedings with their house free and clear of the note and mortgage. Lawyers and pro se homeowners are using it. You can too.

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Foreclosure Offense and Defense for Borrower’s and Their Lawyers

Posted on June 21, 2008 by Neil Garfield

Start with GARFIELD’S GLOSSARY ABOVE: HERE IS ARE SOME OF THE RECENT ADDITIONS TO THE GLOSSARY AND TACTICAL CONSIDERATIONS:

Deed of Trust
An instrument signed by a borrower, lender and trustee that conveys the legal title to real property as security for the repayment of a loan. The written instrument in place of mortgage in some states.

AS APPLIED THE CREATION OF THE TRUSTEE AND THE POWERS GRANTED TO THAT TRUSTEE (AND LATER APPLIED) PROBABLY VIOLATE THE DUE PROCESS REQUIREMENTS OF BOTH THE U.S. CONSTITUTION AND THE APPLICABLE STATE CONSTITUTION WHICH ORDINARILY ADOPT IDENTICAL OR NEARLY IDENTICAL LANGUAGE REGARDING DUE PROCESS. THE ABILITY TO POST A SALE NOTICE, ESPECIALLY UNDER THE MORTGAGE MELTDOWN CONTEXT, PROBABLY ALSO VIOLATED THE FIDUCIARY OBLIGATION OF THE TRUSTEE GIVING RISE TO A CLAIM FOR DAMAGES FROM THE BORROWER, THAT IS ORDINARILY COVERED BY THE ERRORS AND OMISSIONS INSURANCE POLICY COVERING THE TRUSTEE. See Non-Judicial sale, Default, Asset Backed Security (ABS).

Default — PRIMARY DEFENSES IN MORTGAGE FORECLOSURE ACTIONS AND BANKRUPTCY ACTIONS:

SEE APPRAISAL, SPECIAL PURPOSE VEHICLE (SPV), STRUCTURED INVESTMENT VEHICLE (SIV), ASSET BACKED SECURITY (ABS)

In a conventional mortgage transaction, a mortgage is in default when any of its terms are breached. While there are cases where the default consists of compromising the security (e.g. failure to insure — favorite among predatory lenders who “force place” insurance at exorbitant rates without just cause), the most common default claimed is in the event that the borrower fails to make the payments as agreed to in the original promissory note.

In the Mortgage Meltdown context, the entire concept of default has been redefined by

(1) disengagement of the borrower’s obligations from the security instrument and note

(2) substitution (novation) of parties with respect to all or part of the risk of default

(3) substitution (novation) of parties with respect to the obligations and provisions of the security instrument (mortgage) and promise to pay (promissory note)

(4) merger of mortgage obligations with other borrowers

(5) addition of third parties responsibility to comply with mortgage terms, especially payment of revenue initiated in multiple mortgage notes and

(6) a convex interrelationship between

(a) the stated payee of the note who no longer has any interest in it

(b) the possessor of the note who is most frequently unknown and cannot be found and therefore poses a threat of double liability for the obligations under the note and

(c) cross guarantees and credit default swaps, synthetic collateralized asset obligations and other exotic equity and debt instruments, each of which promises the holder an incomplete interest in the original security instrument and the revenue flow starting with the alleged borrower and ending with various parties who receive said revenue, including but not limited to parties who are obligated to make payments for shortfalls of revenues.

It may fairly be argued that there is no claim for default without (1) ALL the real parties in interest being present to assert their claims, (2) a complete accounting for revenue flows related to a particular mortgage and note including payments from third parties, sinking funds, reserve funds from proceeds of sale of multiple ABS instruments referencing multiple portfolios of assets in which your particular mortgage and note may or may not be affiliated and (3) production of the ORIGINAL NOTE (probably intentionally destroyed because of markings on it or other tactical reasons or in the possession of an SIV in the Cayman Islands or other safe haven.

In ALL cases, including recent ones in Ohio, New York, Maryland and others, it is apparent that the “lender” is either not the lender or upon challenge, cannot prove it is or ever was the lender. Wells Fargo definitely engaged in the practice of pre-selling loans upon execution of loan applications rather than assignment AFTER a loan had actually been created. In nearly all cases the Trustee or MERS or mortgage service operation has no knowledge of where the original note is, has no interest in the note or mortgage, and has no knowledge of the identity, location or even a contact person who could provide information on the real parties in interest in a particular mortgage note.

The “clearing and settlement” of “sale” or “assignments’ of mortgages, notes, ABS instruments and collateral exotic derivatives whose value is derived from the original ABS of the SPV which received representations from an unidentified SIV (probably off-shore).

The abyss created in terms of identifying the actual owner of the mortgage and note was intentionally created to avoid liability for fraudulent representations on the sale of the derivative securities to investors. The borrower’s signature on an application or closing documents was part of the single transaction process of the sale of ABS unregulated security instruments to qualified investors based upon fraudulent appraisals of (1) the underlying real property, (2) the financial condition of the “borrower” and (3) the securities offered to investors.

Thus the claim of “default” is by a party who has no standing to assert it, no knowledge to prove it, no possession of the original note, and no authority to pursue it. IT IS FOR THIS REASON THAT THE SCHEDULES FILED IN BANKRUPTCY SHOULD NEVER NAME THE ORIGINATING LENDER AS A SECURED CREDITOR FOR A LIQUIDATED AMOUNT. THE “LENDER” MAY BE EFFECTIVELY BLOCKED FROM GETTING RELIEF FROM STAY IF (A) THE SCHEDULES DO NOT SHOW THE CREDITOR AS A SECURED CREDITOR AND INSTEAD SHOW THE CREDITOR AS AS NOMINAL PARTY THAT MIGHT ASSERT A CLAIM FOR AN UNLIQUIDATED AMOUNT AND (B) THE SCHEDULES SHOULD SHOW JOHN DOE ET AL AS PERSONS, ENTITIES OR PARTIES THAT MIGHT ALSO EXPRESS AN INTEREST IN THE BORROWER’S BANKRUPTCY ESTATE FOR AN UNLIQUIDATED AMOUNT SUBJECT TO RESCISSION REMEDIES UNDER TILA, STATUTORY LAWS, COMMON LAW AND SECURITIES LAWS, AND SUBJECT TO REFUNDS, REBATES AND DAMAGES.

IT IS ALSO FOR THIS REASON THAT WE RECOMMEND THAT JOHN DOE BE SUED FOR QUIET TITLE AND SERVED BY PUBLICATION, NAMING ALL KNOWN PARTIES WHO WOULD EXPRESS AN INTEREST, NONE OF WHOM CAN PRODUCE A SINGLE ALLEGATION OR PIECE OF EVIDENCE SUPPORTING THEIR LEGAL STANDING OR LEGAL COMPETENCY AS WITNESSES.

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Foreclosure Defense: Issues, Pleadings and Analysis

Posted on May 22, 2008 by Neil Garfield

We are still in process of revising our manuscript for publication with all the forms we can think of. Here is a  summary of our findings thus far.

Generally we have two types of jurisdictions — the non-judicial sale jurisdictions and the mortgage foreclosure jurisdictions. California, Arizona and Nevada are non-judicial sale jurisdictions as are many others. Florida is a judicial sale (mortgage foreclosure jurisdiction) as are many others

 

We also have numerous possible stages at which a borrower can find him/herself

  1. Loan not in default but TILA claims can still be made. 
  2. Loan approaching default. 
  3. Loan in default 
  4. Foreclosure suit filed or sale date published 
  5. Judgment entered 
  6. Sale occurred to either third party or the lender. I have advised people to go to the sale and inform all potential bidders that the matter is in dispute which usually stops anyone from bidding. 
  7. Notice to Vacate -Forcible Detainer
  8. Eviction notice from Sheriff 
  9. Evicted — but TILA claims survive for (a) recovery of money and (b) possibly recovery of house from lender 

Origination of loan:

  1. REAL BANK THAT GIVES MORTGAGE AND HOLDS NOTE THEMSELVES. Direct relationship between the lender and borrower and it is not sold, migrated or otherwise transferred in any manner shape or form. Borrower gave honest information, tax returns etc. My guess is that the only claim here would be fraudulent appraisal but even that is weak because the bank is actually at risk. 
  2. Mortgage broker steering borrower to worst deal for highest fees. Inflated income and appraisals submitted. Lender is selling off or has entered agreements to provide “inventory” to mortgage aggregators who will sell the aggregated loan portfolio to investment bank who in turn will sell “derivative” securities (CMO – collateralized Mortgage Obligations or CDO — Collateralized Debt Obligations) to investors who are defrauded by representations from the lender, appraiser, mortgage aggregator, investment bank, and intermediate sellers of securities. Bank is NOT in any relationship with borrower but that is not disclosed. Bank has no risk or interest in whether borrower pays on loan or not. 
  3. MOST COMMON: A “bank” that is actually a front for one of the major players. In actuality the bank is a mortgage broker steering customers to worst loans for highest fees. 
  4. While the “lender” takes the position that they were defrauded by the borrower, the mortgage broker and the appraiser, the truth is that they intentionally defrauded themselves by setting up the structure and giving themselves the position of “plausible deniability.” Their intent was to create a plausible record for the mortgages and notes they were selling to mortgage aggregators and investment bankers. 

Types of Loans:

  1. Fixed rate 30 year mortgage fully amortized. 
  2. Fixed rate 30 year mortgage amortized but partially negative — i.e. the borrower is paying less than the full payment and the balance owed on the note is going up. Possible TILA violation. 
  3. Fixed rate mortgage interest only, negative amortization. Clear TILA violations in most cases. 
  4. Adjustable rate mortgage fully amortized. First adjustment after teaser rate in 1, 3, 6, 12 or more months. Borrower “qualifies” for mortgage because income figures support paying the teaser rate. At the first or second adjustment however, they no longer qualify and the lender knows it by definition. TILA violation, fraud, etc. 
  5. Adjustable rate interest only, negative amortization 6. Multiple mortgages and notes for multiple properties for speculators — usually involves falsifying information that buyer is going to use the house as primary residence, falsifying income and falsifying appraised values. TILA, fraud etc. 

Authority and ownership of loans — Legal Standing and Jurisdiction

  1. Originating lender still servicing the loan, holds note and mortgage. No assignment, sale or other fancy financial tricks. 
  2. Originating lender is actually mortgage broker, loan migrates to senior lending institution, to mortgage aggregator to investment banker to seller of securities to investor. 
  3. Trustee in non-judicial sale states posts notice of sale based upon information from a source that (a) does not service the loan and therefore does not know if the borrower is in default or not and/or (b) does not own the mortgage or cannot prove that it owns the mortgage and/or (c) does not own the note or cannot prove that it owns the note. In most cases an investor owns the mortgage and note and the people involved in the foreclosure don’t have a clue as to which bundle of mortgages went into which bundle of securities and how many investors bought into that bundle of securities, and there are no proper assignment documents that were designed much less signed in anticipation of being able to establish legal standing in sale, foreclosure or eviction. 
  4. Originating lender files foreclosure or posts notice of sale and does not have servicing rights, ownership of mortgage or ownership of note. 

Potential Pleadings:

  1. Federal Claim for TILA, respa, RICO, fraud etc. 
  2. Memorandum of Law in support of complaint. 
  3. State Court claim for Fraud 
  4. State court action for stay of sale, eviction etc. 
  5. Emergency Petition for temporary Injunctions- State and Federal Courts and memorandums in support thereof. 
  6. Motion to expedite discovery. 
  7. Interrogatories 
  8. Requests for admission 
  9. Request to Produce 
  10. Notice of deposition duces tecum 
  11. Adversary proceeding in Bankruptpcy Court 
  12. Memorandum and pleading in opposition to Motion for lifting stay 
  13.  Demand letter to Originating lender — for documents tracing where the mortgage went and for refunds and damages, enclosing TILA audit. 
  14. Rescission letter 
  15. Form retainer agreement for audit an checklist for retaining auditor 
  16. Form retainer agreement for attorney and checklist for retaining attorney 

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Mortgage Meltdown: AFTER the SALE

Posted on May 6, 2008 by Neil Garfield

SUING THE LENDER, MORTGAGE BROKER ET AL AFTER FORECLOSURE AND SALE

When it is all over and you have been evicted from your dream home, most people drop the matter and move on, being too distracted by their monetary problems to look back at the painful disaster.

What you should know, however, is that violations of Truth in Lending, fraud and other claims can be brought long AFTER the sale and judgment. 

The first step is to get a TILA audit and that is why we have a link to http://www.repairyourloan.com. So far in our search for competent people who are not out to steal even more of your money, they seem to be the ONLY people who truly understand the process, who have long track records of performing audits for all kinds of clients — government, financial institutions and individuals.

When you are done with your audit you go to a competent, experienced lawyer. If you can’t find one, we can help you.

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TELL ME YOUR MORTGAGE NIGHTMARE STORIES

Posted on May 6, 2008 by Neil Garfield
I WANT YOUR STORIES!!!
HERE IS WHAT I JUST RECEIVED FROM A LAWYER I KNOW —
This one who I have been corresponding with sent me an e-mail describing the events of her “closing” where she was told by the Countrywide loan officer that her dad’s life estate did not need to go on the mortgage, and the “closing” took place at a little table in a Barnes & Noble bookstore with a line of people waiting to “close” in a frantic fashion.
 
Jesus! Assembly-line closings in bookstores, forged signatures on loan documents, etc. all obviously railroaded through to get the “bundle” together for resale to Bear Stearns or whoever. This is beyond ugly.
I had a conversation with guy in California yesterday who had been forcibly evicted by the Sheriff after a “non-judicial” sale resulting from a mortgage financing that had more holes in it than the board in back of the paper target at the firing range.
I spoke to another fellow who did everything right in the State of Washington, made his payments, stayed in touch with the lender, and yet his house was also sold at “non-judicial sale” and he is about to evicted after his mortgage broker stole $5,000 from the closing (claiming the lender wanted a credit card paid off), after the lender took $7,000 from him to reinstate his mortgage, and after he sought relief in all the right ways from State and Federal Courts.  
I WANT YOUR STORIES WHICH YOU CAN EITHER PUT IN THE COMMENT SECTION BELOW OR EMAIL TO ME.
HELP ME SHINE A BRIGHT LIGHT ON THE RED-LINING THE TILA VIOLATIONS, THE HARD CORE PREDATORY PRACTICES OF LENDERS WHO HAVE UNDERMINED THEIR BORROWERS AND THE INNOCENT NEIGHBORS OF THESE BORROWERS. TELL ME YOUR NIGHTMARES.

Filed under: bubble, CDO, community banks, CORRUPTION, credit unions, currency, education, Eviction, foreclosure, foreign relations, GTC | Honor, inflation, interest rates, Investor, Mortgage, Obama, politics, securities fraud | Tagged: , , , , , , , | 3 Comments »

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