Bartram: The Missing Links

Why did the Plaintiff lose in its “standard foreclosure”?

The decision on acceleration is essentially this: If the banks do it, it doesn’t count.

While Bartram didn’t turn out the way we want, there are two paths that nobody is talking about — logistics and res judicata.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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The Florida Supreme Court decision in Bartram reinforces the absurd — that after losing in trial court, the pretender lender can sue over and over again for “new defaults.” The court has re-written the alleged “loan contract” to mean that a loss in court means that their acceleration of the entire loan becomes de-accelerated, meaning that acceleration is merely an option hanging in the wind that doesn’t really mean anything. The decision might have consequences when the same logic is applied to other actions taken pursuant to contract. The decision on acceleration is essentially this: If the banks do it, it doesn’t count.
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But two things remain outstanding, one of which the court mentioned in its opinion. Why did the Plaintiff lose in its “standard foreclosure”? The issues that were litigated as to the money and/or documentary trail have been litigated and are subject to res judicata. The Plaintiff, if it is the same Plaintiff, is barred from relitigating them.
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If Plaintiff failed to prove ownership of the loan and was using fabricated void assignments and endorsements, the lifting of the statute of limitations should not help them in attempting to bring future litigation. Many other such issues were undoubtedly raised in the original case. The Plaintiff would be forced to argue that while the issues were raised, they were not actually litigated and a judgment was not entered based upon those issues.
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The Florida Supremes took away the Statute of Limitations, up to a point (see below) but gave us the right remedy — res judicata. Even if a new Plaintiff appears, the questions remain as to how the alleged loan papers got to them remain open, as well as whether the paper represented any actual loan contract absent an actual lender.
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And then there are the logistics that I don’t think were considered in its decision. According to the Bartram decision the act of acceleration vanishes if the Plaintiff loses. The statute of limitations does apply for past due payments that are more than 5 years old. That means, starting with the date of the lawsuit (not the demand), you count back 5 years and all payments due before that are barred by the SOL.
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So if a Plaintiff loses the foreclosure, it can bring the action again based upon missed payments that were due within the SOL period. Of course if the Defendant won because the Plaintiff had no right or authority to collect on the DEBT, the action should be barred by res judicata. But putting that issue aside, there are other problems.
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“Servicing” of a designated “loan account” is actually done by multiple IT platforms. The one used for foreclosure comes out of LPS/Black Knight in Jacksonville, Florida. This is the entity that  fabricates documents and business records for foreclosure. It is not the the actual system used for servicing that deals in reality with the alleged borrower and accepts payments and posts them. It is incomplete. This system intentionally does not have all the documents and all the “business records” relating to the loan. For example there is no document or report that shows who was and probably still is receiving payments as though the loan were performing perfectly.
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The decision on when and if to foreclose is always performed by LPS/Black Knight in order to prevent multiple servicers, trustees, banks and “lenders” from suing on the same loan, which has happened in the past. LPS assigns the loan to a specific party who is then named by Plaintiff. And LPS creates all the fabricated paperwork to make it look like that party is the right Plaintiff and that the business records produced by LPS can be presented as the business records of the party whose name was rented for the purpose of foreclosure. It is LPS documents that are produced in court, not the records of the named Plaintiff.
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So here is a sample simple scenario that will illustrate the logistical problem created by the Florida Supremes: LPS issues a notice of default letter naming the claimant as XYZ, as trustee for XYZ series 2006-19B Pass Through Trust Certificates. Previously XYZ lost the foreclosure action by failing to prove that it had any relationship with the loan. The Notice of Default and right to reinstate issued by LPS on behalf of XYZ must be for payment that was within the SOL. This action of course waives the payments, fees etc that are barred by the SOL. It also assumes that the date of the letter AND THE LAWSUIT will be within the SOL period. So for example, if the last payment was on December 1, 2006 and the letter refers to a missed payment starting with January 1, 2012, the letter is proper. But if suit is not commenced until January 2, 2017, the letter is defective and the lawsuit is barred by the SOL. Further the doctrine of res judicata bars any cause of action that was litigated previously.
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All of this leads to a court determination of what issues were previously raised, when they were raised and whether the Final Judgment in favor of the homeowner means anything.

Why Are Trusts Alleging Holder Status and Not Holder in Due Course?

THEY ARE ADMITTING THEY DIDN’T PAY FOR THE LOAN

THIS CORROBORATES THE ALLEGATION THAT THE TRUST WAS UNFUNDED

IF THE TRUST WAS UNFUNDED IT COULD NOT HAVE ORIGINATED OR ACQUIRED THE LOAN

In situations where the alleged REMIC Trust is the party initiating foreclosure, you will find in most instances that they are alleging that they are the holder. The fact that they are not alleging that they are the holder in due course raises some interesting questions. First, it is an admission that they did not pay for the loan for value in good faith and without notice of borrower’s defenses.

This in turn leads us to the PSA where you can see for yourself that only good loans properly underwritten can be included in the trust based upon the procedures for transfer and payment that are set forth or implied in the trust instrument (the PSA). Remember that the ONLY reason the party is appearing in court as the foreclosing entity is by virtue of the Pooling and Servicing Agreement (PSA). Their ONLY authority, as a “holder with rights to enforce” derives from the trust instrument (PSA). So any argument that the PSA is irrelevant is nonsense — it should be an exhibit in court or else the foreclosure should be dismissed. If they want to argue to the contrary, they must reveal the creditor and reveal the alternative authority to enforce apart from the trust instrument. If it has anything to do with the trust or trust beneficiaries however, the document (Power of Attorney) derives its power from the trust instrument as well (PSA).

The way the Banks tell it, an assignment dated not only after the cutoff date, but after the alleged declared default of the loan forces investors to accept that which they specifically excluded in the  trust instrument (PSA) — a bad loan that violates the REMIC provisions of the Internal Revenue Code subject them to adverse tax consequences and economic losses that were NOT built into the deal. How can a state judge in Florida or any other state order or enter judgment that forces a bad loan on investors who specifically called fro a cutoff of any new loans in the pool years before the foreclosure? If the loan was already declared in default. how can the trust beneficiaries be forced to accept a bad loan?

At the very least these John Does must be given notice and since the servicer knows who they are (because they have been paying them) they should give notice to the investors that their rights may be significantly impacted by a court decision in which the servicer or trustee of the REMIC trust is taking a position adverse to the interests of the trust beneficiaries and in violation of the trust indenture.

Since the requirements of the PSA always provide for circumstances that are identical to the definition of a holder in due course, why is the allegation that they are just a holder? The answer is plain: in order to establish that they are a holder in due course their proof would be limited to the fact that they paid for the loan, in good faith and without knowledge of borrower’s defenses. That proof would insulate the trust and trust beneficiaries from borrower’s defenses by definition (see Article 3, UCC). The allegation of only being a holder, exposes the trust and trust beneficiaries to defenses that were intended to be barred by virtue of being holders in due course of each and every loan. Thus this too is an allegation contrary or adverse to the interests of the trust and the trust beneficiaries. Again without notice to the trust beneficiaries that the trustee or at least lawyers for the trustee are taking positions adverse to the interests of the investors and the trust.

What difference does it make? It makes a difference because of money which is after all what this case is supposed to be about. The investors’ money either went into the REMIC trust or it didn’t. If it did, then the trust is the right vehicle for the transaction although most PSA’s say the trust cannot bring the foreclosure action. But if it didn’t go into the REMIC trust account, and the trust was ignored in the origination and/or acquisition of the, loan then the borrower is even more entitled to know what payments the investors (f/k/a/ trust beneficiaries) have received. If there have been settlements, then how much of the original debt is left? If there were servicer payments, was there ever a default and how much of the original debt is left? If there were third party payments to the creditors then how much of the original debt is left?

What seems to be an elusive concept for judges, lawyers and even borrowers is that their debt was paid by someone else. That is what happens when you have fraudulent transactions and the perpetrators get caught. In this case, there was plenty of money available to private settle more than $1 Trillion in claims of fraud from investors and fines that are steadily increasing into the tens of billions of dollars. Because the intermediary banks had essentially stolen the identity of the lenders and the borrowers, they made claims and got paid as though they were the lenders. Now they are using the proceeds of what were disguised sales of the same loan multiple times to settle with investors and settle only with those borrowers who present a credible threat. In the end the banks are wiling to pay trillions because they got illegally trillions more.

The big question is when it will occur to enough enough judges, lawyers and borrowers that they are entitled to offset for those payments that were actually received or on behalf of the actual creditors. It isn’t a difficult computation. Thus the notice of default, the notice of the right to reinstatement, the end of month statements, and the acceleration letter all state the wrong amounts and are fatally defective. They are misrepresentations that are part of a string of misrepresentations starting with the lies told to the managers of stable managed funds who purchased, and kept on purchasing mortgage bonds issued by an apparent REMIC trust whose terms were being routinely ignored.

Thus it is not RELIEF that the borrower is asking, it is JUSTICE. The creditor is only entitled to get paid once on each debt. The creditors are the investors or trust beneficiaries. The demands made on borrowers for the last 7 years have actually been demands from the intermediaries for payment of fees, commissions and advances made or earned by them, according to their story. They are not claims on the mortgage loan, which was either paid down or paid off without disclosure to the borrower. Had the pay down or payoff been recorded and applied, virtually all of the loans that were improperly foreclosed by strangers to the original transaction (no privity) would have been avoided because the amount of the payment could have been dropped easily under HAMP. As stated repeatedly on these pages, this is not a gift of principal REDUCTION. It is justice applying a principal CORRECTION due to payment received — the ultimate defense under any lawsuit for financial damages.

For more information please call 954-495-9867.

The Devil Is In the Details: Summary of Issues

Editor’s note: in preparing a complex motion for the court in several related cases I ended up writing the following which I would like to share with my readers. As you can see, the issues that were once thought to be simple and susceptible to rocket docket determination are in fact complex civil cases involving issues that are anything but simple.

This is a guide and general information. DO NOT USE THIS IF YOU ARE NOT A LICENSED ATTORNEY. THESE ISSUES ARE BOTH PROCEDURALLY AND SUBSTANTIVELY ABOVE THE AVERAGE KNOWLEDGE OF A LAYMAN. CONSULT WITH AN ATTORNEY LICENSED IN THE GEOGRAPHICAL AREA IN WHICH THE PROPERTY IS LOCATED.

If you are seeking litigation support or referrals to attorneys or representation please call 520-405-1688.

SUMMARY OF ISSUES TO BE CONSIDERED

 

1)   Whether a self proclaimed or actual Trustee for a REMIC Trust is empowered to bring a foreclosure action or any action to enforce the note and mortgage contrary to the terms of the Trust document — i.e., the Pooling and Servicing Agreement (PSA) — which New York and Delaware law declare to be actions that are VOID not VOIDABLE; specifically if the Trust document names a different trustee or empowers only the servicer to bring enforcement actions against borrowers.

2)   Whether a Trustee or Servicer may initiate actions or take legal positions that are contrary to the interests of the Trust Beneficiaries — in this case creating a liability for the Trust Beneficiaries for receipt of overpayments that are not credited to the account receivable from the Defendant Borrowers by their agents (the servicer and the alleged Trustee) and the creation of liability to LaSalle Bank or the Trust by virtue of questionable changes in Trustees.

3)   Whether US Bank is the Plaintiff or should be allowed to claim that it is the Trustee for the Plaintiff Trust. Without Amendment to the Complaint, US Bank seeks to be substituted as Plaintiff in lieu of Bank of America, as successor by merger with LaSalle Bank, trustee for the Plaintiff Trust according to the Trust Document (the Pooling and Servicing Agreement) Section 8.09.

a)    A sub-issue to this is whether Bank of America is actually is the successor by merger to LaSalle Bank or if CitiMortgage is the successor to LaSalle Bank, as Trustee of the Plaintiff Trust — there being conflicting submissions on the SEC.gov website on which it appears that CitiMortgage is the actual party with ownership of ABN AMRO and therefore LaSalle Bank its subsidiary.

b)   In addition, whether opposing counsel, who claims to represent U.S. Bank may be deemed attorney for the Trust if U.S. Bank is not the Trustee for the Trust.

i)     Whether opposing counsel’s interests are adverse to its purported client or the Trust or the Trust beneficiaries, particularly with respect to their recent push for turnover of rents despite full payment to creditors through non stop servicer advances.

4)   Whether any Trustee for the Trust can bring any enforcement action for the debt including foreclosure, assignment of rents or any other relief.

5)   Whether the documentation of a loan at the base of the tree of the assignments and transfers refers to any actual transaction in which the Payee on the note and the Mortgagee on the Mortgage.

a)    Or, as is alleged by Defendants, if the actual transaction occurred when a wire transfer was received by the closing agent at the loan closing with Defendant Borrowers from an entity that was a stranger to the documentation executed by Defendant Borrowers.

b)   Whether the debt arose by virtue of the receipt of money from a creditor or if it arose by execution of documentation, or both, resulting in double liability for a single loan and double payment.

6)   Whether the assignment of mortgage is void on its face as a fabrication because it refers to an event that occurred long after the date shown on the assignment.

7)   Whether the non-stop servicer advances in all of the cases involving these Defendants and U.S. Bank negates the default or the allegation of default by the Trust beneficiaries, the Trust or the Trustee, regardless of the identity of the Trustee.

a)    Whether a DEFAULT exists or ever existed where non stop servicer advances have been paid in full.

b)   Whether the creditor, under the debt obligation of the Defendant borrowers can be allowed to receive more than the amount due as principal , interest and expenses. In this case borrower payments, non stop servicer advances, insurance, credit default swap proceeds and other payments by co-obligors who paid without subrogation or expectation of receiving refunds from the Trust Beneficiaries.

c)    Whether a new debt arises by operation of law as a result of receipt of third party defendants in which a claim might be made by the party who advanced payment to the creditor, resulting in a decrease the account receivable and a corresponding decrease in the borrower’s account (loan) payable.

i)     Whether the new debt is secured by the recorded mortgage that the Plaintiff relies upon without the borrower executing a security instrument in which the real property is pledged as collateral for the advances by third parties.

8)   Whether turnover of rents can relate back to the original default, or default letter, effectively creating a final judgment for damages before evidence is in the court record.

9)   Whether the requirements of a demand letter to Defendants for turnover of rents can be waived by the trial Court, contrary to Florida Statutes.

a)    Whether equity demands that the turnover demand be denied in view of the fact that the actual creditors — the Trust Beneficiaries of the alleged Trust were paid in full up to and including the present time.

b)   Whether, as argued by opposing counsel, the notice of default letter sent to Defendant Borrowers is an acceptable substitute to a demand letter for turnover of the rents if the letter did not mention turnover of rents.

c)    Whether the notice of default letter and acceleration was valid or accurate in view of the servicer non-stop advances and receipt of other third party payments reducing the account receivable of the Trust beneficiaries (creditors).

i)     Whether there was a difference between the account status shown by the Servicer (chase and now SPS) and the account status actually shown by the creditor — the Trust Beneficiaries who were clearly paid in full.

10)         Whether the Plaintiff Trust waived the DUE ON SALE provision in the alleged Mortgage.

a)    Whether the Plaintiff can rely upon the due on sale provision in the mortgage to allege default without amendment to their pleadings.

11)         Whether sanctions should apply against opposing counsel for failure to disclose essential facts relating to the security of the alleged creditor.

Whether this (these cases) case should be treated off the “rocket docket” for foreclosures and transferred to general civil litigation for complex issues

Challenging Deeds Issued After Auction (Sale) of Property

One of the rewarding aspects of what I do is to see more and more people not only hopping on board, understanding securitization, but adding to the body of knowledge I have amassed. In the following article Bill Paatalo, who has done the loan level accounting for many of our readers, expands upon a topic that I have introduced (and of course Dan Edstrom) but not explained nearly as well as Bill does: see http://bpinvestigativeagency.com/time-to-challange-those-trustees-deeds/

EDITOR’S NOTE: I would add that where servicer advances are paid to the creditor (or who we think is the creditor), then there is often an overpayment, which might account for why the “credit bid” is lower than the total amount demanded by the servicer for redemption or reinstatement. This anomaly could void the notice of default and notice of sale and create a problem on the amount required for redemption after the so-called sale.

The legal issue presented by Bill is whether the party who submitted the bid satisfies the state’s legal definition of a creditor who is allowed to submit a credit bid at closing in lieu of cash. This issue is fairly easily analyzed before any order or judgment is entered by a court.

But afterwards, because of the rubber stamping, the judgments mostly state something along the lines that $XXXX.XX is owed by the borrower to the opposing party in litigation. The judgment is final until overturned by appeal or a motion to vacate.

That Judgment makes them a possible creditor and even raises the presumption that they are a creditor when in fact there was no evidence to support that finding in the order or judgment. And ordinarily the courts require that the motion or other attack be verified by a sworn statement from the homeowner. That gets tricky because without having an actual forensic report in your hands, how would the borrower even know about such things?

The judgment can be attacked for fraud because the opposing party had never entered into a transaction wherein it paid value (see Article 9 of UCC) to originate or acquire the loan. Procedural rules vary from state to state on  how this is done and the time limit fro such challenges. In fact, none of the people in the cloud of “securitization” paid anything for the loan, with the exception of the servicer who is credited with having paid servicer advances to the creditor when in fact it appears as though the servicer advances were paid by the investment bank who reserved money out of the pool of money advanced by investors to pay the investors out of their own money. Hence, we see the reason for calling the scheme a PONZI scheme. This is why the issue of STANDING keep bouncing back front and center.

Without an attack on the Judgment I doubt if your state law will allow you to challenge the sale or the sale price. Obviously, before you act on anything on this blog, you need to consult with an attorney who is licensed and experienced in such matters and who practices in the jurisdiction in which your property is located.

For those who are good with computer graphics, here are two drawings I recently made to describe the process of securitization as it played out. The bottom line is that the investment bank diverted the money from the trust and diverted the documentation that was due to the investors to its own strawmen, trading on that documentation and making a ton of money while the investor/lenders and homeowner/borrowers lost either everything or a substantial amount of their wealth that ended up in the pocket of the banks. Anyone who is good with graphics is invited to donate their time to this website and make my hand drawn sketches easier to read and perhaps animated. Neil Garfield Securitization Diagrams 12-20-13

Posted by BPIA on December 18, 2013 bi Bill Paatalo:

For the past couple of years, I have been providing clients with the internal loan level accounting data, which reveals in most instances of private securitization, that all payments “due” on the notes have been paid regularly by undisclosed “co-obligors.” Thus there becomes an issue of fact as to whether or not the “note” is actually in “default.” Word through the grapevine is that this particular argument is gaining some momentum in certain jurisdictions throughout the United States.

Well now it’s time to use the same internal accounting data to attack those dubious “Trustee’s Deeds.” In non-judicial foreclosure states, a ”Trustee’s Deed Upon Sale” or Trustee’s Deed” is recorded after the foreclosure sale. Often, the property is sold back to the supposed creditor into what is called “REO” status. In cases where the subject loans were alleged to have been securitized, the Trustee’s Deed will typically state that the Trustee for “XYZ Mortgage-Backed Trust” was the “highest bidder” at the sale and paid cash in the amount of $………..(whatever dollar figure.) There are many reasons to question the validity of these documents; such as the actual parties submitting the “credit bids,” and whether or not any actual cash exchanged hands as attested to under notary acknowledgment. However, there is a way to provide evidence and proof that no such payment ever exchanged hands.

The following language was extracted from a typical Trustee’s Deed:

Trustees Deed language snip

In this particular case, the alleged amount owed in the “Notice of Default” was roughly $314,000.00. A check of the internal accounting for this particular loan (6-months after the sale) shows the loan in “REO” status with no such payment having ever been applied. In fact, the certificateholders (investors) are still receiving their monthly payments of P&I with the trust showing “zero” losses.

This is good hard evidence that the sale and subsequent Trustee’s Deed filed in this case was a “sham” transaction.

If your loan was alleged to have been securitized by a private mbs trust, and your home sold in similar fashion with a recorded Trustee’s Deed, contact me today (bill.bpia@gmail.com) to see if your Trustee’s Deed matches up with the internal accounting data.

Living lies now offers Expert Affidavits showing what was stated in the Trustee’s Deed as opposed to what has actually occurred behind the curtains. See www.livingliesstore.com. Most people ask for consults with me and/or the expert, like Bill, so their lawyer understands what to do with this information.

The Notice Letters and Legal Strategies

Now that I am actively practicing law I see the reasons for the anger and recriminations regarding the conduct of proceedings involving foreclosure. But whether the judge likes it or not the law is very clear regarding a condition precedent to the filing of foreclosure action. The borrower must receive notice. The notice must state that the borrower is in default and must also state the conditions for reinstatement to cure the default. The law is very clear that failure to give proper notice is reason enough to deny the foreclosure. It doesn’t stop the bank from coming back later after giving proper notice, but it does stop the current foreclosure proceeding.

Generally speaking you’ll find the required language in the mortgage in paragraph 22. There are other paragraphs that speak to default have the right to reinstatement —  usually in the preceding paragraphs to the paragraph 22.

Notwithstanding the law, I am finding that there are many judges who consider it to be their political mandate to push the foreclosures through to sale. They may be right as to the political mandate but they are wrong to use it in a court of law. Failure to give proper notice or any other material fact that might be in issue is sufficient to defeat a motion for summary judgment as long as it is clearly in the record at the time the order on summary judgment is entered. In Florida at least I detect an attitude from the bench which disregards the facts of the case in favor of entering judgment for the banks.

Having the facts and law on your side does not mean that you will be able to stop the foreclosure. This does not stop judges from blaming borrowers for delays in the proceedings despite the fact that it is the obligation of the foreclosing party to prosecute the action. And yesterday I saw a judge enter an order granting summary judgment despite the fact that there were dozens of facts in dispute. His reason appeared to be that the case had been hanging around for four or five years —  during which time the homeowner could have filed a motion to dismiss for failure to prosecute the action at least twice.

Of course homeowners do not know the Rules of Civil Procedure which is why I have stated so strongly and so often why they should retain counsel if they really want to keep their home.

In the course of my research on a related topic I uncovered the information shown below. It is obvious that under federal and Florida law the notice must contain information concerning the right to reinstate the loan and a demand for a specific amount of money required for reinstatement. Some banks have chosen to ignore the right to reinstatement because of their enthusiasm for obtaining a foreclosure judgment. And there are judges that will ignore the issue of notice and enter judgment for the bank. But on appeal there seems to be little doubt that the judges order will be reversed, the sale will be reversed, and the foreclosure action will be dismissed (without prejudice to refile).

Most judges appeared to approach a foreclosure case as a fairly simple matter that is very annoying to them. Instead of asking the attorney for the bank to present his/her case there are several judges who are announcing that everything seems to be in order and so judgment will be entered. While this is wrong I would caution the reader not to draw the  further conclusion that the judge is corrupt or has an agenda designed to hurt homeowners. In the eyes of the judge, based upon actual experience for several years, most defenses that have been presented to judges have been for the purposes of delay. In part this was allowed and even encouraged by the banks who were unready to fully prosecute the foreclosure action because of the potential liability for taxes, insurance and maintenance.

In my firm we generally refer clients who are simply looking for delays to other attorneys whose down payment and monthly payment is far less than what we charge. After years of writing about it I have reentered the practice of law and I am attempting to set a standard of vigorous and aggressive prosecution of the case against the bank. This of course is only possible if the bank has done something wrong. But you are not going to know that without someone going through the entire process starting with the application for mortgage and going through the present time. It also requires discovery in the form of interrogatories, requests for admission, requests to produce, and subpoenas issued to appropriate witnesses requiring them to bring documents with them.

In my opinion the more lawyers that aggressively pursue the case, the more judges will start questioning why the bank is backpedaling. Once you get a judge thinking that you are the aggressor, you have succeeded in taking control of the narrative. Once you have taken control of the narrative you can raise questions in the judge’s mind as to whether or not there might actually be something wrong with this particular foreclosure action.

I don’t deny that there is a value to any homeowner in getting free rent or no mortgage payment and that an attorney might be useful in maximizing the length of time in which the homeowner is not required to pay anything. It might be the only way that the homeowner can recover part of his or her investment. But delay tactics seem to dominate the litigation landscape. So it should come as no surprise that any judge would approach a foreclosure case with the assumption that the debt is valid and that the documents are in order; the only question left is when will the sale take place.

My mission, as I conceive it, is to make some changes in the litigation landscape. Specifically, I think that with proper pleading and discovery, it may be revealed that the party seeking the foreclosure lacks any ownership interest in the loan and lacks any authority to represent anyone with an ownership interest in the loan. I also think that the amount demanded for reinstatement or redemption is also misstated in that the borrower is not getting the benefit of offset from third-party payments that should be credited to the account in which the loan receivable is held. In short, I still believe what I said six years ago, to wit: as crazy as it might seem, the loan was prepaid at the time of origination and then repaid several times over after which it was then sold to the Federal Reserve probably multiple times  and sold two government-sponsored entities multiple times. If the loan is paid (several times over, no less) then there can be action to collect on it, least of all foreclosure.

While the presumption is on preventing a homeowner from getting a free ride, courts have been giving the financial industry the equivalent of corporate welfare with each  foreclosure sale. And in doing so they have actually stripped the true creditor from any collateralized claim and further stripped the true creditor from making any claim at all. The beneficiaries of this idiotic system are obviously the banks. The victims include everyone else including the investors, insurers, taxpayers, borrowers, and the Federal Reserve. Of course in the case of the Federal Reserve, it knows that it is a victim and that it is buying completely worthless paper from the banks who have previously sold the same paper to others. That doesn’t seem to matter to the federal reserve and so far it doesn’t seem to matter to any of the judges sitting on the bench.

http://www.credit.com/credit_information/credit_law/Understanding-Your-Foreclosure-Rights.jsp

http://floridaforeclosurefraud.com/2010/03/notice-of-default-prior-to-acceleration-whats-in-your-mortgage/

http://stopforeclosurefraud.com/2011/06/09/fl-2dca-reverses-sj-acceleration-letter-failed-to-state-the-default-as-required-by-the-mortgage-terms-konsulian-v-busey-bank-na/

Wake Up Georgia: Courts Are Opening the Door on Wrongful Foreclosure

PRACTICE AND PROCEDURE IN GEORGIA
If you are seeking legal representation or other services call our Florida customer service number at 954-495-9867 (East Coast, including Georgia – the Atlanta Area) and for the West coast the number remains 520-405-1688. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.
The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Note: For years Georgia has been considered by most attorneys to be a “red” state that, along with states like Tennessee showed no mercy on borrowers because of the prejudgment that the foreclosure mess was the fault of borrowers. For years they have ignored the now obvious truth that the defective mortgages and wrongful foreclosures do make a difference.

Now, reflecting inquiries from Courts below who are studying the the issue instead of issuing orders based upon a knee-jerk response, the State has taken a decided turn toward the application of law over presumption and bias. There is even reason to believe that the door is open a crack for past wrongful  foreclosures, as the Courts grapple with the fact that thousands of foreclosures were forced through the system by strangers to the transaction and thousands of wrongful foreclosure suits have been dismissed because of the assumption by judges that no bank would lie directly to the court. It was a big lie and apparently the banks were right in thinking there was little risk to them.

Look at Pratt’s Journal of Bankruptcy Law February/ March Issue for an article on “Foreclosure Law in the Wake of Recent Decisions on Residential Mortgage Loans: The Situation in Georgia” by Ashby Kent Fox, Shea Sullivan and Amanda Wilson. Our own lawyers have out in front on these issues for a couple of years but encountering a lot of resistance — although lately they are reporting that the Courts are listening more closely.

The Georgia Supreme Court has now weighed in (Reese v Provident) and decided quite obviously that something is rotten in Georgia. Focusing on Georgia’s foreclosure notice statute but actually speaking to the substantive defects in the mortgages and foreclosures, the majority held, as a matter of law, that

o.c.G.a. § 44-14- 162.2(a), requires the person or entity conducting a non-judicial foreclosure of a residential mortgage loan to provide the borrower/debtor with a written notice of the foreclosure sale that discloses not only “the name, address, and telephone number of the individual or entity who shall have full authority to negotiate, amend, and modify all terms of the mortgage with the debtor” (the language that appears in the statute), but also the identity of the “secured creditor” (not required by the statutory language, but which the majority inferred based on legislative intent). the majority further found that the failure to identify the “secured creditor” in the foreclosure notice renders the notice, and any subsequent foreclosure sale, invalid as a matter of law.

Once again I caution litigators that this will not dispose of your case permanently and that such rulings be used strategically so that you are not another hallway lawyer explaining how you were right but the judge ruled against you anyway. Notice provisions can be cured, non-existent transactions cannot be cured. Leading with the numbers (the money trail” and THEN using decisions like this to corroborate your argument will get you a lot more traction than leading with defective paperwork.

As I have said repeatedly, no judge, no matter how sympathetic to borrowers is going to give much relief when the borrower has admitted the debt, note, mortgage and default. These must be denied and lawyers should study up on the subject as to why they can and should be denied, and to persevere through discovery to show that the note, mortgage, default and even the debt have all been faked by strangers to the transaction.

Forcing the opposing side to show that they are a bona fide holder FOR VALUE  will flush out the truth — that originator in nearly all cases was never the lender, creditor or even broker. They were simply paid naked nominees just like MERS, leaving no real party in interest on the note or mortgage, no consideration between the parties stated on the note and mortgage or notice of default, and no meeting of minds between the real lender (who is NOT in privity with the nominee lender) who, as an investor received a prospectus and Pooling and Servicing Agreement and advanced money under the mistaken belief they were buying bonds of an entity that either did not exist or was simply ignored by the investment banker and the other participants in the false securitization scheme that was used to cover-up a PONZI scheme.

Practice tips: DENY and DISCOVER. Ask for proof of payment and proof of loss. The assignments, the note and the mortgage are not proof of the debt, they are potentially evidence of the debt and the security agreement ONLY if the foundation is there (testimony by witness with personal knowledge, with exhibits of wire transfer receipts and wire transfer instructions, cancelled checks etc.) to show that the originator shown as payee and “Secured party” or “beneficiary” was lender of money.

Make them show that they booked the loan as a receivable with a reserve for default. Discover that they actually booked the transaction as a fee for service (shown on the income statement) and never entered it on their balance sheet.

And PLEASE study up on voir dire, objections and cross examination. If you are not quick and ready objections to leading questions and other issues might well be waived unless you interrupt the questioning as fast as you can stand up. If you study up on hearsay and the business records exception to hearsay you will discover that in practically no case were the business records qualified as exceptions to the hearsay rule. But if you don’t raise it, if you don’t have statutory and case law and even a memo on the subject the judge is going to rule against you. We are talking about good lawyering here and not bias amongst judges.

Assignment must exist in writing, even if the court says it doesn’t need recording

Dan Hanacek, who will be at the conference in Emeryville tomorrow, and Charles Cox can be reached through our customer service number 520-405-1688. Dan is a lawyer with whom I am engaged in mentoring and resourcing in Northern California cases and Charles helps people all over the country. The tide is turning. The basic principles of title in place for hundreds of years, TILA in place for dozens of years and RESPA in place for dozens of years will yet win the day. Title analysis and attorney advice is crucial to making the write choices and communication with a party purporting to be either a lender or servicer. Don’t assume you know what they are saying is correct. Not even the original note can be admitted because of the thousands of instances in which the “original” is a Photoshopped version that is not the original note and therefore does not contain the original signature of the borrower.

Editor’s Note:

With Banks and servicers playing fast and loose with the rules of procedure, the rules of evidence and black letter law it well to remember BASIC BLACK LETTER LAW. An assignment without delivery is probably a nullity. An assignment that isn’t even in writing is (a) not proper under most existing laws and (b) requires the allegation of an oral “assignment” to be explained as to why it wasn’t in writing before, just like a lost or destroyed note.

The assignment can only be valid and used if the assignee is capable of accepting it, paying for it and either acceptance is for the assignee or as an authorized agent. The Notice Default does not give the Trustee or even the original mortgagee where there has been an assignment, the right to declare default. Then it becomes the representation of the trustee, who is supposed to be objective and disinterested in the result.

For the Trustee to issue a notice of sale and notice of default on behalf of the supposed beneficiary, means that the trustee is no longer accepting the responsibilities of the trustee to act with due diligence and good faith toward both the trustor and the beneficiary.

Hence the substitution of trustee is an offer which has not and cannot be accepted. Any actions taken by the trustee in a notice of default or any other notice or collection letter is out of bounds. The only reason the banks do this is to hide behind yet another layer of people and entities so when the arrest warrants are issued, they can claim plausible deniability that the wrong procedure was being followed. This is poppycock. The beneficiary supposedly knows whether or not he is the creditor entitled to submit a credit bid at auction based upon the the existence of a properly kept loan receivable account reflected on the CREDITOR’s books.

This is just another example where the banks and servicers have borrowed the identity of the creditor, claimed that said identity is private and privileged, and then used it for their own advantage to the detriment of both the lender-investor and the borrower.

Witness this exchange between two of our golden boys — Dan Hanacak and Charles Cox:

Dan wrote:

1624.  (a) The following contracts are invalid, unless they, or some
note or memorandum thereof, are in writing and subscribed by the
party to be charged or by the party's agent:
   (2) A special promise to answer for the debt, default, or
miscarriage of another, except in the cases provided for in Section
2794.
   (3) An agreement for the leasing for a longer period than one
year, or for the sale of real property, or of an interest therein;
such an agreement, if made by an agent of the party sought to be
charged, is invalid, unless the authority of the agent is in writing,
subscribed by the party sought to be charged.
 
Would this section not require the following:
  1. Assignments must be in writing as they are “…for the sale of real property, or of an interest therein.”
  2. Immediately contradict the Gomes holding as it assumes that the authority of the agent has already been subscribed by the party to be charged and pre-empts any challenge by the injured party to the alleged contract.

And Charles Cox wrote back:

I’ve just been drafting argument against TDSC (in opposition to their demurrer)  for the proposition of their authority (as an agent for the beneficiary) in which (as is common) they attempt to use an agent they have assigned, to record a NOD (usually prior to an assignment being recorded) which I refute as follows:

In P&A p.10:26-p.11:27: TDS wrongfully states a “title company representative as agent for T.D.” could validate a Notice of Default which by the terms of the purported Deed of Trust (“NOD”.)  By the terms of the purported Deed of Trust, a NOD is required to be executed or caused to be executed by the “Lender” not the trustee nor the Trustee’s sub-agent as was done here (see Compl. Exh. 1 p.13 ¶ 22 second paragraph.) TDS’s citations are inapposite relating to “authorized agents” (meaning, authorized by the principal, not by another agent.)  Pursuant to CCC § 2304, an agent cannot act for an agent without the express authority of the principal.  CCC § 2322(b) does not allow an agent to define the scope of the agency (which TDS is attempting to do here).  CCC § 2349(4) requires authorization by the principal.  CCC § 2350 states an agent’s sub-agent is the agent of the agent, not of the principal and has NO connection to the principal.

TDS misstates CCC § 2349(1) as it relates to allowing an agent to delegate acts which are purely mechanical.  The statute actually states:

“An agent, unless specially forbidden by his principal to do so, can delegate his powers to another person in any of the following cases, and in no others:
1. When the act to be done is purely mechanical (emphasis added)”
   Note the statute states “another person” not another agent or sub-agent.  The alleged “notice of default” TDS refers to (Plaintiffs are not sure which one, having not been identified in TDS’s P&A but assume as follows:) was signed by “LSI TITLE COMPANY AS AGENT FOR T.D. SERVICE COMPANY,” NOT merely by “a title company representative”  or “person” as statutorily authorized.  This, notwithstanding that authorizing recording a Notice of Default is hardly “purely mechanical.”  This is yet another attempt by TDS to mislead the Court.  
   TDS’s citation of Wilson v. Hyneck cannot be relied on because it is an unpublished opinion and is inapposite anyway. 
    TDS’s further arguments (P&A p.11:5-27) fail for the reasons detailed above.

Plaintiffs Complaint contains sufficient facts constituting Plaintiffs’ cause of action specifically against TDS.  Nothing stated in this section of TDS’s Demurrer provides available grounds sufficient to sustain Defendants’ Demurrer (see p.2:19-25 above.)

Defendant fails to meet the legal standards to sustain its Demurrer.  See Plaintiffs’ Section III below.

Defendant’s Demurrer is without merit and must be overruled.

Amazing how these guys fail to accept responsibility for anything they do!

Charles
Charles Wayne Cox
Email: mailto:Charles@BayLiving.com or Charles@LDApro.com

 

Aztec Foreclosure Corp Antics Analyzed

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BY ‘NANCY DREW”

In California, OR, WA, CO (non judicial states) place an Automatic Stay one must file Bankruptcy “BK” which stops notice of defaults?
sadly allowing substitute trustee to act as robo-mill and includes bank attorneys who don’t have to reveal ‘security’ the mortgage note as collateral attached.

‘substitute’ trustees file falsified documents as does the documented LPS/DOCX employees, just the employee may be a contractor such as Aztec Foreclosure Corp.

The falsified documents as required by the BK courts excludes the same transactions in judicial states just the ‘Trustee’ and Substitute Trustee don’t have to disclose the ‘name of the loan trust, trust fund, certificates, the ‘mortgage note’ as collateral attached inside and sliced and diced when sold to FREDDIE MAC and others Institutional Investors.

You are forced to fight harder under COTA and Accounting GAAP to reveal what is not recorded with county recorder. You are forced to fight pro pe and when 90 days in default of any amount, the SERVICER of the asset as a receivable – advances funds and tracks the debt they will claim when they liquidate your mortgage.
You are fighting with the ‘Servicer’ who has to advance funding to the ‘Master Servicer’ get it! The party before BK does not have legal standing and the CA Courts ignore? WHY?

Aztec Foreclosure Corp

Aztec Foreclosure Corporation is a full service foreclosure trustee concentrating its practice in the representation of mortgage lenders and other financial institutions in foreclosure of residential real estate collateral in the States of California and Nevada.

Aztec Foreclosure Corporation of Washington is a full service foreclosure trustee serving the State of Washington.

Who is Robbie Weaver Office Manager in CA and Elaine Malone Foreclosure Supervisor? Who is the ‘attorney’ providign due dilligence? Kelly D. Sutherland ‘Managing Attorney’ in state of Washington? Is she licensed to practice in CA?

Look at the 21 Pages of Completed RESALES of Properties!
Please take NOTICE that
THe ‘LIST’ 21 pages of sales REPORT generated by data extracted from databases in which somebody programmed the appearance of the data in a report form all CREATED BY A COMPUTER

A LIST OF ‘COMPUTER GENERATED SALES’ ALL PURCHASED AT THE ‘OPENING BID’ WERE THE HIGHEST BID’
WHO WAS AT THE SALE? WHAT ‘TRUSTEE’ SIGNED C/O …. generated 8/12/2011 @ 3:00:50 PM

Report Date 8/12/2011 (Note the report is generated bya computer from database) organized by Case#, Sale Date, Property Address, Bids in which then the ‘security’ identified. Get that information while you are in BK!

http :// www . aztectrustee . com / Reports / CAZ_WebCompSalesRpt . pdf

Aztec Foreclosure Corporation | Professional Foreclosure Trustee Serving California and Nevada

Aztec Foreclosure Corporation of Washington (Washington State only)

Aztec Foreclosure Corporation has the necessary experience working with lenders to protect their delinquent mortgage assets. Our tenured staff has assisted lenders in their default management department, providing unique insight and an ability to better communicate with our clients. Our knowledge and experience extends beyond the routine foreclosure process into the daily operations of the default management industry. Aztec Foreclosure Corporation of Washington provides the same services in the State of Washington.

STATE OF CALIFORNIA:
Notice of Default – State of California
Upon receipt of the foreclosure referral package, the Notice of Default (“NOD”) is prepared and forwarded to the title company for recording along with the executed Declaration from the lender. Recoding of the NOD constitutes ‘first legal’ when recorded. Once recorded, a copy of the NOD and Declaration will be mailed to all parties to the Deed of Trust and parties having recorded a request for notice.

A Trustee Sale Guarantee (“TSG”) will be ordered from the title company and reviewed upon receipt that will disclose all parties entitled to notice, as well as any other encumbrances recorded against the Deed of Trust and reviewed for any possible defects which may exist that would prevent continuation of foreclosure. The one-month mailing notices are sent to any parties requiring notice.

Notice of Sale
A Notice of Sale (NOTS) will be recorded in the appropriate county and all parties requiring notice will be sent certified and regular mailings of the upcoming foreclosure sale date. The NOTS will be published for three successive weeks in a newspaper of general circulation for the city and county the property is located. A copy of the NOTS will be posted on the property itself and recorded in the county recorder’s office. The sale will be conducted at the time and place set forth on the NOTS.

Bidding instructions will be requested from the client and should be submitted to our office no later than 5 days before the scheduled sale date. Aztec will bid according to the client’s instructions. If there are no competitive bidders, the interest of the property will revert to the beneficiary. Third party bidders must outbid the beneficiary to obtain the property, and the sale proceeds are distributed in the order of priority, with the beneficiary being satisfied first.

The sale may be postponed pursuant to the client’s instructions without an additional publication. The sale may be postponed up to a maximum of 365 days after the original sale date. After that a new publication will have to be set with a new sale date, mailings, etc.

Redemption
There is a 3 month redemption period that must run from when the NOD is recorded before a foreclosure sale can be set. Effective June, 2009, CA implemented the CA Foreclosure Prevention Act which required an additional 90 days of redemption:

On February 20, 2009, Governor Schwarzenegger signed ABX2 7 and SBX2 7, which establish the California Foreclosure Prevention Act. The California Foreclosure Prevention Act modifies the foreclosure process to provide additional time for borrowers to work out loan modifications while providing an exemption for mortgage loan servicers that have implemented a comprehensive loan modification program. Civil Code Section 2923.52 requires an additional 90 day period beyond the period already provided before a Notice of Sale can be given in order to allow all parties to pursue a loan modification to prevent foreclosure of loans meeting certain criteria identified in that section.

A mortgage loan servicer who has implemented a comprehensive loan modification program may file an application for exemption from the provisions of Civil Code Section 2923.52. Approval of this application provides the mortgage loan servicer an exemption from the additional 90-day period before filing the Notice of Sale when foreclosing on real property as designated by this Section.

Upon expiration of redemption, sale, publication and posting dates will be set. The sale cannot be held until the expiration of 21 days from redemption.

Sale
The sale will be conducted at the time and place set forth on the NOTS. Aztec will bid according to the client’s instructions. If there are no competitive bidders, the interest of the property will revert to the beneficiary. Third party bidders must outbid the beneficiary to obtain the property, and the sale proceeds are distributed in the order of priority, with the beneficiary being satisfied first.

The sale may be postponed pursuant to the client’s instructions without an additional publication. The sale may be postponed up to three times at the request of the beneficiary, after which it will be necessary to republish a new sale date.

Conveyance & Final Title
After the foreclosure sale is conducted, a Trustee’s Deed Upon Sale is issued by Aztec conveying title to the successful bidder. If the property reverts to the beneficiary, it is sent for recording within a few days of the sale. If a third-party purchases the property, the unrecorded Trustee’s Deed will be sent to the address specified by that party.

If the property is to be conveyed to the Secretary of Housing & Urban Development (“HUD”) or Secretary of Veterans Affairs (“VA”), a Grant Deed from the beneficiary to the agency is sent to the client for execution prior to the sale.

After receipt of the Grant Deed, if it is a VA loan, the deed is sent for recording immediately. Aztec will order a title policy and forward it to VA within their required time line. If it is a HUD loan, Aztec will await instructions to record the deed to HUD. Prior to the deed recording, Aztec will obtain tax and lien information to verify if title is clear before recording the HUD deed. When all taxes and liens are cleared, with the client’s instructions, the deed is recorded. Once recorded, the title policy is obtained and forwarded to HUD within their required time line. The clients are given copies of the title polices and recorded deeds.

The only post-sale right of redemption occurs when an IRS tax lien is recorded against the property. Once the sale is held, the lien is extinguished, but the IRS retains a 120-day right of redemption. During this time frame, the IRS has the right to purchase the property.

Reinstatement and Payoff
The trustors, owners and junior lienholders have a statutory right to reinstate the loan up to five business days prior to the sale. The beneficiary may waive the five-day limit and accept reinstatement at any time prior to the sale. Reinstatement must be tendered in the amount of all sums due the lender plus all foreclosure fees, costs and any attorney’s fees and costs incurred.

Deficiency Judgment – State of California
The right to a deficiency judgment following the foreclosure sale is limited by anti-deficiency legislation. Under California Code of Civil Procedure Section 508b, there can be no deficiency judgment on foreclosure of a purchase-money mortgage or trust deed. Also, under Section 580d, one cannot seek a deficiency after a non-judicial foreclosure sale.

The anti-deficiency rule does make a distinction between vendors and third-party lenders. The vendor is precluded from seeking a deficiency judgment where his loan secures payment of the balance of the purchase price of real property. In respect to a third-party lender, the anti-deficiency rule applies only to a dwelling of not more than four families given to secure repayment of a loan that was used to pay all or part of the purchase price of such dwelling occupied entirely or in part by the purchaser.

Deficiency judgments may be obtained if the obligation is not subject to California Code of Civil Procedure, Section 580. These cases are outside the scope of this synopsis.

Eviction – State of California
The eviction process is initiated by serving the owners/trustors with a three-day Notice to Quit. All other occupants must be given a sixty-day Notice to Quit.
After the 3/60 day period has expired and if the property is still occupied, a Complaint for Unlawful Detainer is filed. The summons and complaint are sent for service upon all defendants. The requisite personal or substitute service of process may take up to two weeks. In cases where service cannot be effectuated, application is made to the court for permission to serve by posting and mailing the summons and complaint to the property.

Defendants have five days to answer the complaint after service, plus ten extra days if service was made by substitute service or posting and mailing. If the defendants do not respond timely, a default judgment is entered. If defendants file an answer and contest the action, a motion for summary judgment is filed and usually granted within two weeks. In those infrequent cases in which summary judgment is not granted, a trial date is requested. A judgment and writ for possession are submitted to the court within 48 hours of a trial, granting a motion for summary judgment or a default judgment is entered. The court is requested to forward the writ to the marshals for posting on the property. Processing of the writ and posting take approximately two weeks.

The defendants have five days to vacate after posting of the writ. The marshal then returns to the property to physically remove the occupants. The servicer must arrange to have a representative present to take possession and secure the property. The majority of eviction cases that are former owner occupied are completed within 60 to 75 days.

SEE AZTEC FORECLOSURE ‘TRUSTEE’

SAME DETAILS ABOVE FOR NEVADA,
AND SAME DETAILs ABOVE FOR ‘WASHINGTON STATE ONLY’

Washington Staff:

Kelly D. Sutherland
Managing Attorney
360.260.2253 ext 281
ksutherland@logs.com

GOLDMAN WEB OF DECEIT AND TAX EVASION: BKR TRUSTEE SUES FOR FRAUD

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Lee Farkas of TBW was right when he said, “I could rob a bank with a pencil.”

AUCTION SALES INCOMPLETE FOR NON-PAYMENT: TRUSTEE DEED SHOULD NOT BE ISSUED

SUBSTITUTE TRUSTEE COULD BE SUED FOR DAMAGES

EDITOR’S COMMENT: It’s like a checklist of things to examine when reviewing the document trail, the money trail and the loan closing procedures. At the heart of it lies not only the usual fraud and deceit, but what emerges is that the “substitute trustee” is no substitute trustee at all. And even if they were the trustee, they breached every duty set forth in the statutes governing the conduct of the trustee on a deed of trust.

The courts have repeatedly confirmed the extra duty of the Trustee on a deed of trust to exercise due diligence and good faith. What the banks have done is literally appoint themselves as the Trustee and then ran amok doing whatever they wanted. But the law catches up.

Virtually all deeds issued upon auction sales where the “credit bid” was entered, resulted in the issuance of a deed without the Trustee ever having received any consideration — no note and no money, leaving the obligation hanging out there. Just an oral “bid” in which the bidder does not identify any creditor and where the bidder does not tender the note as a credit bid or the money for the house. And if you drill down further you find that there is a cause of action for damages and injunctive relief against the original trustee, the substitute trustee and the parties behind this farce.

Here we have laid bare the following:

  1. Defective Notice of Default
  2. Improper Substitution of Trustee
  3. Notary Stamp Fraud
  4. Altered Affidavit of Mailing
  5. Fabricated Assignment of Deed of Trust
  6. Defective Notice of Sale

From Jake Naumer

This article was written by
George W. Mantor
The Real Estate Professor
Founder, American Foreclosure Resistance Movement

“in their rush to steal another home, Wall Street has inadvertently called attention to the massive repledging of the collateral and the tax evasion at the center of the securitization fraud.”

“I have before me six documents that could lead no reasonable person to any other conclusion than this: Bank of America, hiding behind a bogus Goldman Sachs Pooling and Servicing agreement aided and abetted by MERS, Litton Loan Servicing, Lender Processing Services, and Quality Loan Service, have manufactured documents, to try to steal the beneficial interest of an unknown creditor believed to be Washington based lender MILA, the originator, currently insolvent and in Bankruptcy. The Bankruptcy Trustee is suing MILA for fraud.

Robo-Signers, a Tangled Web Indeed

I was about seven years old when I heard my mother repeat this Sir Walter Scott phrase to my sister, “Oh what a tangled web we weave when first we practice to deceive.”

I’ve always thought it was more practical advice than moral lesson. Men who speak their minds tend to have few false friends and too many enemies but they don’t have to work to keep their stories straight. So, when they do say something, people know they mean it.

Where I come from, it’s so sparsely populated that there isn’t anyone to scam. Loggers, miners, and farmers come right to the point, and it makes some people uncomfortable.

Southern California is beautiful, and most of the people are terrific, but what I was not prepared for is the sort of tacit acceptance of bullshit…like an art form. I’ve been here more than thirty years and I still overhear things that make me involuntarily roll my eyes.

Not that long ago I had a conversation with a woman who asked me, “Do you know what your problem is?”

Here we go. I know the answer to that would take longer than a trip to the DMV, but just as I was about to concede one or two obvious shortcomings, she told me. “You are too direct!”

Ouch! Wow! I had no idea. Thanks for sharing. I’ll try to get better. I didn’t know that you could be too direct. You are either direct or indirect.

It got me wondering if it was a problem I wanted to fix. How would I go about it such a transformation? Is there a twelve step program for that where I can master the skills of less directedness? Do I need to set goals? Should I start out slowly with a few little white lies or should I jump right in and get a job at Goldman Sachs?

Because when it comes to tangled webs, Goldman Sachs is the epitome of deceit. They have admitted and substantial evidence exists that the Goldman plan was to deceive everybody and keep right on doing it until the courts stop them. Which the courts seem strangely disinclined to do despite mountains of evidence piling up at every imaginable agency.

So here I sit with the smoking gun, right in my lap.

Today, I have before me the remnants of GSAMP Trust 2006-HE3 and what has to be the clumsiest attempt ever to transfer the asset of another into a trust years after the cutoff date.

Trust me; you’re going to love this story. For in their rush to steal another home, Wall Street has inadvertently called attention to the massive repledging of the collateral and the tax evasion at the center of the securitization fraud.

This little bit of foreclosure fraud is an absolute classic and we just have to thank our friends at Bank of America for a perfect example.

Hold everything, Ladies and Gentleman…We Have a Winner; this has to be the steamiest pile of doo-doo, yet.

For the few people left out there who do not believe that many of the foreclosures are fraud, and Darrell Issa you know who you are, I have before me six documents that could lead no reasonable person to any other conclusion than this: Bank of America, hiding behind a bogus Goldman Sachs Pooling and Servicing agreement aided and abetted by MERS, Litton Loan Servicing, Lender Processing Services, and Quality Loan Service, have manufactured documents, to try to steal the beneficial interest of an unknown creditor believed to be Washington based lender MILA, the originator, currently insolvent and in Bankruptcy. The Bankruptcy Trustee is suing MILA for fraud.

A Defective Notice of Default

A document purporting to be A Notice of Default was prepared by LSI Title Company dated July 7, 2009 and signed by Merrilyn L. Aguas as Agent for Beneficiary. LSI Title is a division of Lender Processing Services recently under heavy fire for forging loan documents to accommodate illegal foreclosures.

But every indication is that the document was printed at foreclosure mill, Quality Loan Servicing in San Diego. I’m looking into that.

The Notice of Default was recorded on July 9th, 2009 by Elena Davis representing LSI Title Company (CA). But only against one of the borrowers, a husband and wife. Absent from the notice of default was the name of the husband.

This may have been an error, but the result is that the notice of default is defective. One of the very few requirements of a non-judicial foreclosure concerns the filing of the NOD.

Improper Substitution of Trustee

Coincidentally, also on July 7, 2009 in faraway Harris County Texas, a document purporting to be a Substitution of Trustee was prepared.

This is signed by Marti Noriega, who according to his or her LinkedIn page is AVP of Foreclosures at Litton Loan Servicing.

On this document she is representing herself as an Assistant Vice President of Mortgage Electronic Registration Systems, Inc.

She identifies LANDAMERICA/SOUTHLAND as the original Trustee, and Mortgage Electronic Registration Systems, Inc., as Nominee For MILA, as the Original Beneficiary.

Based on this representation, Quality Loan Service Corporation, a law office and well known foreclosure mill becomes the new Trustee under the original Trust Deed.

See how easy that was?

A trustee is supposed to protect the interests of the trustor as well. How a law firm working for the bank trying to steal the home can be the trustee is beyond me.

Notary Stamp Fraud

If that isn’t bad enough, we have notary fraud on the document.

This document purports to have been notarized by a Melissa Bell on 07/14/09, in Harris, Texas. A week after it was signed in San Diego. No big deal you say? Fair enough.

The notary signed the name M Bell, but her stamp clearly shows Melissa Bell. The law in Texas is that the notary must sign exactly as the name appearing on the stamp. Still too picky? They were busy? Okay.

The stamp has a commission expiration date of March 28, 2011. Multiple inquires to the Texas Secretary of State produced no evidence of a Melissa Bell whose commission expires on that date and if anyone knows where she is, we have some questions we’d like to ask her.

There is a Melissa Bell who works or did work for Bank of America. You don’t suppose…?

But wait, there’s more. This document, provided to the borrower, is not the same document recorded on file at the San Diego County Recorder’s Office.

The recorded document, not recorded until August 21, 2009 has been altered. Lined out are the words, “who proved to me on the basis of satisfactory evidence and hand printed “personally known to me”.

The unnotarized document without the interlineation obviously was the original? What effect does this change have? Why was the borrower or borrower’s attorney never provided a copy of the new and improved version?

In recording this document, there is no reference to the borrower so it does not show up in the County Recorders main public portal, the Grantor/Grantee Index, making it virtually invisible to the property owner.

Altered Affidavit of Mailing

An Affidavit of Mailing for Substitution of Trustee By Code was executed by Cynthia Tran representing that she is an employee of Quality Loan Service Corp., an agent for beneficiary whose business address is: 2141 5th Avenue, San Diego, CA 92101.

Herein she swears that she mailed a copy of the substitution on or before 7/16/2009. The copy she mailed to the borrower predated the altered copy in regard to the notarization.

There are two different versions of this as well; the recorded copy was signed by Ms. Tran, if she even exists. The signature line above the name Cynthia Tran is blank on the copy sent to the borrower. In addition, “/s/”, is on the signature line but absent from the recorded copy.

The Substitution wasn’t recorded until August 21, 2009. Why was the borrower mailed a different copy six weeks before it was recorded?

Fabricated Assignment of Deed of Trust

Frankly, I consider this the absolute masterpiece. Also dated 7/7/2009 1:50 PM is an Assignment of Deed of Trust signed again by Marti Noriega, who this time purports to be:

“Assistant Vice President of Mortgage Electronic Registration Systems, Inc., As Nominee For MILA, Inc., DBA Mortgage Lending Associates, Inc. A Washington Corporation.”

(And you think your job title is too long.) (Oh, and the DBA, well, it’s DOA. The original lender and beneficiary under the deed of trust was Mortgage Investment Lending Associates who ceased operation in 2007 and is in bankruptcy as mentioned above.)

Herein, Noriega names, “Bank of America, National Association as successor by Merger to LaSalle Bank National Association, as trustee under the Pooling and Servicing Agreement dated as of May 1, 2006, GSAMP Trust 2006-HE3.”

Of the Documents created in Harris Texas on July 7/7/2009 this is the only one that is time stamped.

Though purportedly created on 7/72009, it wasn’t notarized until November 20, 2009.

Further, this Assignment was not recorded until December 2, 2009 nearly a month after the posted sale date. Had the homeowner not filed a lawsuit, the property would have already have been sold before the assignment was recorded. Now that’s a slandered title.

The borrower was never provided a copy of this document and absent from the recording was any mention of the borrower’s name. As a result this document was not listed in the San Diego County Recorders Grantor/Grantee Index making it virtually invisible to the public and the borrower.

I simply cannot wait to hear the depositions of the people who cooked this up. They want us to believe that a document supposedly created on July 7, 2009 along with two others wasn’t notarized until more than two weeks after the sale date.

They also, and this really is my favorite part, want us to believe that an employee of Litton can transfer an asset from a lender in bankruptcy to a pool of loans that is closed and, by its own rules, cannot accept assets in default and cannot accept any but a performing replacement loan after mid-2006. It stopped reporting to the SEC in 2008, so it must be an empty shell into which they try to launder the theft of the property and disguise the broken chain of title.

So guess what I did? Yup, I picked up the phone and called the Trustee handling the MILA bankruptcy.

Keep in mind that he had been in control of the company for more than two years, winding down MILAs assets and liabilities. He will provide an affidavit to the effect that it did not happen.

Another complete fabrication.  According to him, MILA originated loans to sell them and did not retain notes or trust deeds.

I can’t wait to have Marti Noriega explain this.

What this blizzard of phony documents reveals is the biggest crime in history.

The Pooling and Servicing Agreements are a complete fiction. The loans that are referenced are just that, a reference to something seemingly tangible and yet diluted to worthlessness.

The Pooling and Servicing Agreement, by its very language, requires that all loan documents go to the trust properly assigned and endorsed upon closing and no later than 180 days in rare circumstances which do not apply here.

That means the Mortgage or Trust Deed and the Note should have been with the custodian of the trust documents long before August of 2009.

But wait. The loan, or at least the pledge of the loan, already shows up in the GSAMP Trust 2006-HE3. Out of more than 10,500 loans this is referenced as number 4,067.

That means that MILA did not comply with the terms and did something else with the note and deed of trust. Now an employee of a division of Goldman Sachs, Litton, is trying to use the opportunity to seize a property to which they have no legal right.

The Assignment of the Trust Deed was assigned to the trust three years after closing. So why wasn’t it assigned at origination?

Where oh where might it have been for three years? Is it referenced in multiple pools and legally assigned to none?  Was it used to double or triple fund the loan? And where oh where do you suppose the promissory note might have gone to?

More importantly, this activity causes the trust to lose its status as a REMIC with preferred tax provisions. These cases would be a slam dunk for the IRS. But the IRS, just like every other agency responsible for this economic Katrina, has much smaller fish to fry. Doesn’t anyone, anywhere, in a position of authority, have any balls?

Also, at the exact same time the loan was being originated by MILA, MILA also registered a pool of mortgage backed securities with the SEC. But there is scant information and it appears that it may never have been completed. Why? Would its existence allow MILA to re-pledge the obligation?

MILA owner Wayne Sapp, like Taylor Bean and Whitaker CEO Lee Farkas was, in all likelihood, pledging the loans to multiple pools, submitting the same loan to multiple warehouse lines of credit and keeping the proceeds from those repledgings and destroying the original notes and trust deeds.

According to the MILA bankruptcy trustee, MILA was insolvent as far back as 2004 and covered their position through fraud. Selling the loans to multiple pools and destroying the original Note and Trust Deed would be an easy way to do that because the aggregators of the loan pools knew it was all designed to implode and provide plausible deniability when it did. Knowing the pools were destined to fail, Wall Street bought Credit Default Swaps.

Litton Loan may claim they have the note and trust deed but if they did, why would they produce all of the forged documents to try to justify the foreclosure? And if you knew the documents had been destroyed, why not just launder the theft and the title through a confusing, possibly nonexistent Goldman Sachs Trust on its way to Bank of America and get a kickback?

In a Florida lawsuit Bank of America says the following in one of their pleadings, “Indeed, it appears as though many loans and other mortgage assets have been double-and even triple-pledged to various constituencies.”

Or maybe more, way more. If you do it twice, you might as well do it over and over.

Defective Notice of Sale

On October 13, 2009, Quality Loan Service issued a Notice of Trustee Sale Scheduled for November 4, 2009. This document was recorded on October 16, 2009, six weeks prior to the recording of the Assignment of the Deed of Trust.

Here again the borrower’s copy is unsigned.

In this case, it isn’t just the borrower whose home they are trying to steal, they are also trying to steal an asset from the true beneficiary who may actually possess the note and the Deed of Trust. These aren’t scrivener’s errors or the result of overworked employees. This is RICO.

This is a conspiracy against a presently unknown entity because we know from the documents recorded by the servicer, Litton; that it isn’t that entity.

The evidence in this case, as submitted by the foreclosing attorneys, shows that the loan was originated by MILA and that MILA although a bankrupt entity is the beneficiary under the Deed of Trust and the only party with standing to foreclose.

The MILA bankruptcy Trustee who has been overseeing the company since 2007 denies that Marti Noriega had any authority regarding MILA.

What does it all prove? It proves that Lee Farkas of TBW was right when he said, “I could rob a bank with a pencil.”

And you can steal people’s homes the same way. But beware the web you weave; Bank of America, you sure got some ‘splaining to do. Let the “disco” and the “depos” begin, this is gonna’ be some fun.

Bank of America to Pay $108 Million in Countrywide Case

GET LOAN SPECIFIC RECORDS PROPERTY SEARCH AND SECURITIZATION SUMMARY

FTC v Countrywide Home Loans Incand BAC Home Loans ServicingConsent Judgment Order 20100607

Editor’s Comment: This “tip of the iceberg”  is important for a number of reasons. You should be alerted to the fact that this was an industry-wide practice. The fees tacked on illegally during delinquency or foreclosure make the notice of default, notice of sale, foreclosure all predicated upon fatally defective information. It also shows one of the many ways the investors in MBS are being routinely ripped off, penny by penny, so that there “investment” is reduced to zero.
There also were many “feeder” loan originators that were really fronts for Countrywide. I think Quicken Loans for example was one of them. Quicken is very difficult to trace down on securitization information although we have some info on it. In this context, what is important, is that Quicken, like other feeder originators was following the template and methods of procedure given to them by CW.Of course Countrywide was a feeder to many securities underwriters including Merrill Lynch which is also now Bank of America.

Sometimes they got a little creative on their own. Quicken for example adds an appraisal fee to a SECOND APPRAISAL COMPANY which just happens to be owned by them. Besides the probability of a TILA violation, this specifically makes the named lender at closing responsible for the bad appraisal. It’s not a matter for legal argument. It is factual. So if you bought a house for $650,000, the appraisal which you relied upon was $670,000 and the house was really worth under $500,000 they could be liable for not only fraudulent appraisal but also for the “benefit of the bargain” in contract.

Among the excessive fees that were charged were the points and interest rates charged for “no-doc” loans. The premise is that they had a greater risk for a no-doc loan but that they were still using underwriting procedures that conformed to industry standards. In fact, the loans were being automatically set up for approval in accordance with the requirements of the underwriter of Mortgage Backed Securities which had already been sold to investors. So there was no underwriting process and they would have approved the same loan with a full doc loan (the contents of which would have been ignored). Thus thee extra points and higher interest rate paid were exorbitant because you were being charged for something that didn’t exist, to wit: underwriting.
June 7, 2010

Bank of America to Pay $108 Million in Countrywide Case

By THE ASSOCIATED PRESS

WASHINGTON (AP) — Bank of America will pay $108 million to settle federal charges that Countrywide Financial Corporation, which it acquired nearly two years ago, collected outsized fees from about 200,000 borrowers facing foreclosure.

The Federal Trade Commission announced the settlement Monday and said the money would be used to reimburse borrowers.

Bank of America purchased Countrywide in July 2008. FTC officials emphasized the actions in the case took place before the acquisition.

The bank said it agreed to the settlement “to avoid the expense and distraction associated with litigating the case,” which also resolves litigation by bankruptcy trustees. “The settlement allows us to put all of these matters behind us,” the company said.

Countrywide hit the borrowers who were behind on their mortgages with fees of several thousand dollars at times, the agency said. The fees were for services like property inspections and landscaping.

Countrywide created subsidiaries to hire vendors, which marked up the price for such services, the agency said. The company “earned substantial profits by funneling default-related services through subsidiaries that it created solely to generate revenue,” the agency said in a news release.

The agency also alleged that Countrywide made false claims to borrowers in bankruptcy about the amount owed or the size of their loans and failed to tell those borrowers about fees or other charges.

New Workshop on Motion Practice and Discovery

why-you-should-attend-the-discovery-and-motion-practice-workshop

VISIT LIVINGLIES STORE FOR FREE VIDEOS AND OTHER RESOURCES

START WINNING CASES!!

May 23-24, 2010 2 days. 9am-5pm. Neil F Garfield. CLE credits pending but not promised. Register Now. Seating limited to 18. INCLUDES LUNCH AND EXTENSIVE MANUAL OF FORMS, NARRATIVE AND CASES. An in-depth look at securitized residential mortgages and deeds of trust. Latest cases on standing, nominees, splitting note from security instrument, bankruptcy strategies, expert declarations, forensic analysis reports.

Lawyers, paralegals, experts, forensic analysts will all benefit from this. This workshop includes monthly follow-up teleconferences and continuing on-going support with advance copies of articles, cases and analysis.

  1. STRATEGIC REVIEW: WHY THESE CASES ARE BEING WON AND LOST IN MOTION PRACTICE.
  2. SECURITIZATION REVIEW
  3. USE OF FORENSIC REPORTS AND EXPERT DECLARATIONS
  4. RAISING QUESTIONS OF FACT IN CREDIBLE MANNER
  5. SETTING UP AN EVIDENTIARY HEARING
  6. FOLLOW THE MONEY
  7. OBLIGATION, NOTE, BOND, MORTGAGE, DEED OF TRUST ANALYSIS
  8. TILA, RESPA, QWR, DVL AND RESCISSION — WHY JUDGES DON’T LIKE TILA RESCISSION AND HOW TO OVERCOME THEIR RESISTANCE.
  9. NOTICE OF DEFAULT, TRUSTEE, STANDING, REAL PARTY IN INTEREST EXAMINED AND REVIEWED
  10. INVESTORS, REMICS, TRUSTS, TRUSTEES, BORROWERS, CREDITORS, DEBTORS, HOMEOWNERS
  11. FACT EVIDENCE ON MOTIONS
  12. FORENSIC EVIDENCE ON MOTION
  13. EXPERT EVIDENCE ON MOTION
  14. ORAL ARGUMENT
  15. WHAT TO FILE
  16. WHEN TO FILE
  17. EMERGENCY MOTIONS — MOTION TO LIFT STAY, MOTION TO DISMISS, TEMPORARY RESTRAINING ORDERS, MOTION TO COMPEL DISCOVERY
  18. DISCOVERY: INTERROGATORIES, WHAT TO ASK FOR, HOW TO ASK FOR IT AND HOW TO ENFORCE IT. REQUESTS TO PRODUCE. REQUESTS FOR ADMISSIONS. DEPOSITIONS UPON WRITTEN QUESTIONS.
  19. FEDERAL PROCEDURE
  20. STATE PROCEDURE
  21. BANKRUPTCY PROCEDURE
  22. ETHICS, BUSINESS PLANS, AND PRACTICAL CONSIDERATIONS

Discovery Issues Revealed: PRINCIPAL REDUCTION IS A RIGHT NOT A GIFT – CA Class Action V BOA on TARP funds

REGISTER NOW FOR DISCOVERY AND MOTION PRACTICE WORKSHOP MAY 23-24

PRINCIPAL REDUCTION IS A RIGHT NOT A GIFT. IF THE OBLIGATION HAS BEEN PAID BY THIRD PARTIES, THEN THE OBLIGATION HAS ALREADY BEEN REDUCED. THE ONLY FUNCTION REMAINING IS TO DO THE ACCOUNTING.

There should be no doubt in your mind now that virtually none of the foreclosures processed, initiated or threatened so far have been anything other than wrong. The payments from third parties clearly reduced the principal due, might be allocable to payments that were due (thus eliminating even the delinquency status) and thus eviscerates the amount demanded by the notice of delinquency or notice of default.

Thus in addition to the fact that the wrong party is pursuing foreclosure, they are seeking to enforce an obligation that does not exist.”

Editor’s Note: This is what we cover in the upcoming workshop. Connect the dots. Recent events point out, perhaps better than I have so far, why you should press your demands for discovery. In particular identification of the creditor, the recipients of third party payments, and accounting for ALL financial transactions that refer to or are allocable to a specific pool in which your specific loan is claimed to have been pledged or transferred for sale to investors in pieces.

This lawsuit seeks to force BOA to allocate TARP funds to the pools that were referenced when TARP funds were paid. In turn, they want the money allocated to individual loans in those pools on a pro rata basis. It is simple. You can’t pick up one end of the stick without picking up the other end too.

The loans were packaged into pools that were then “processed” into multiple SPV pools, shares of which were sold to investors. Those shares “derived” their value from the loans. TARP paid 100 cents on the dollar for those shares. Thus the TARP payments were received based upon an allocation that “derived” its value from the loans. The only possible conclusion is to allocate the funds to the loans.

But that is only part of the story. TARP, TALF and other deals on a list that included insurance, and credit default swaps (synthetic derivatives) also made such payments. Those should also be allocated to the loans. Instead, BOA wants to keep the payments without applying the payments to the loans. In simple terms they their TARP and then still be able to keep eating, even though the “cake” has been paid off (consumed) by third party payments.

Now that the Goldman Sachs SEC lawsuit has been revealed, I can point out that there are other undisclosed fees, profits, and advances made that are being retained by the intermediaries in the securitization and servicing chains that should also be allocated to the loans, some of which are ALSO (as previously mentioned in recent articles posted here) subject to claims from the SEC on behalf of the investors who went “long” (i.e., who advanced money and bought these derivative shares) based upon outright lies, deception and an interstate and intercontinental scheme of fraud.

In plain language, the significance of this accounting is that if you get it, you will have proof beyond any doubt that the notice of default and notice of sale, the foreclosure suit and the demands from the servicer were all at best premature and more likely fraudulent in that they KNEW they had received payments that had paid all or part of the borrower’s obligation and which should have been allocated to the benefit of the homeowner.

There should be no doubt in your mind now that virtually none of the foreclosures processed, initiated or threatened so far have been anything other than wrong. The payments from third parties clearly reduced the principal due, might be allocable to payments that were due (thus eliminating even the delinquency status) and thus eviscerates the amount demanded by the notice of delinquency or notice of default.

Thus in addition to the fact that the wrong party is pursuing foreclosure, they are seeking to enforce an obligation that does not exist. This is a breach of the terms of the obligation as well as the pooling and service agreement.

INVESTORS TAKE NOTE: IF THE FUNDS HAD BEEN PROPERLY ALLOCATED THE LOANS WOULD STILL BE CLASSIFIED AS PERFORMING AND THE VALUE OF YOUR INVESTMENT WAS MUCH HIGHER THAN REPORTED BY THE INVESTMENT BANK. YOU TOOK A LOSS WHILE THE INVESTMENT BANK TOOK THE MONEY. THE FORECLOSURES THAT FURTHER REDUCED THE VALUE OF THE COLLATERAL WERE ILLUSORY SCHEMES CONCOCTED TO DEFLECT YOUR ATTENTION FROM THE FLOW OF FUNDS. THUS YOU TOO WERE SCREWED OVER MULTIPLE TIMES. JOINING WITH THE BORROWERS, YOU CAN RECOVER MORE OF YOUR INVESTMENT AND THEY CAN RECOVER THEIR EQUITY OR AT LEAST THE RIGHTS TO THEIR HOME.

On Thu, Apr 15, 2010 at 9:35 PM, sal danna <saldanna@gmail.com> wrote:

California homeowners file class action suit against Bank of America for withholding TARP funds

Thu, 2010-04-08 11:43 — NationalMortgag…

California homeowners have filed a class action lawsuit against Bank of America claiming the lending giant is intentionally withholding government funds intended to save homeowners from foreclosure, announced the firm of Hagens Berman Sobol Shapiro. The case, filed in United States District Court in Northern California, claims that Bank of America systematically slows or thwarts California homeowners’ access to Troubled Asset Relief Program (TARP) funds by ignoring homeowners’ requests to make reasonable mortgage adjustments or other alternative solutions that would prevent homes from being foreclosed.

“We intend to show that Bank of America is acting contrary to the intent and spirit of the TARP program, and is doing so out of financial self interest,” said Steve Berman, managing partner of Hagens Berman Sobol Shapiro.

Bank of America accepted $25 billion in government bailout money financed by taxpayer dollars earmarked to help struggling homeowners avoid foreclosure. One in eight mortgages in the United State is currently in foreclosure or default. Bank of America, like other TARP-funded financial institutions, is obligated to offer alternatives to foreclosure and permanently reduce mortgage payments for eligible borrowers struck by financial hardship but, according to the lawsuits, hasn’t lived up to its obligation.

According to the U.S. Treasury Department, Bank of America services more than one million mortgages that qualify for financial relief, but have granted only 12,761 of them permanent modification. Furthermore, California has one of the highest foreclosure rates in the nation for 2009 with 632,573 properties currently pending foreclosure, according to the California lawsuit.

“We contend that Bank of America has made an affirmative decision to slow the loan modification process for reasons that are solely in the bank’s financial interests,” Berman said.

The complaints note that part of Bank of America’s income is based on loans it services for other investors, fees that will drop as loan modifications are approved. The complaints also note that Bank of America would need to repurchase loans it services but has sold to other investors before it could make modifications, a cumbersome process. According to the TARP regulations, banks must gather information from the homeowner, and offer a revised three-month payment plan for the borrower. If the homeowner makes all three payments under the trial plan, and provides the necessary documentation, the lender must offer a permanent modification.

Named plaintiffs and California residents Suzanne and Greg Bayramian were forced to foreclose their home after several failed attempts to make new arrangements with Bank of America that would reduce their monthly loan payments. According to the California complaint, Bank of America deferred Bayramian’s mortgage payments for three months but failed to tell them that they would not qualify for a loan modification until 12 consecutive payments. Months later, Bank of America came back to the Bayramian family and said would arrange for a loan modification under the TARP home loan program but never followed through. The bank also refused to cooperate to a short-sale agreement saying they would go after Bayramian for the outstanding amount.

“Bank of America came up with every excuse to defer the Bayramian family from a home loan modification which forced them into foreclosure,” said Berman. “And we know from our investigation this isn’t an isolated incident.”

The lawsuits charge that Bank of America intentionally postpones homeowners’ requests to modify mortgages, depriving borrowers of federal bailout funds that could save them from foreclosure. The bank ends up reaping the financial benefits provided by taxpayer dollars financing TARP-funds and also collects higher fees and interest rates associated with stressed home loans.

For more information, visit www.hbsslaw.com.

Court Denies Motion to Dismiss and Holds Backdated Mortgage Assignments May be Invalid

The bad news is that the Court mistakenly assumes that MERS must be the party to enforce because the MERS assignment was backdated. MERS specifically and publicly disclaims any interest in the mortgage, note or obligation. How can MERS assign something it disclaims? MERS internet site and promotional literature all say the same thing — use us to record your assignments and transfers, we promise we’ll never assert any interest or ownership in the property, loan, note or mortgage.

The court also mistakenly quotes statute saying that a beneficiary under a deed of trust need not record the assignment of the beneficial interest. That may be true, but if the assignment is of the DOT without concurrent assignment of the note (and notice to the Trustor/Homeowner) the assignment is of dubious quality.

It is also curious why anyone would assign the deed of trust or a beneficial interest, since the assignment of the note would incorporate all interests under the security instrument under NORMAL conditions. But this isn’t normal, is it. They split the note from the mortgage and both the note and mortgage are split from the original obligation because the actual creditor is not even mentioned in the closing documents.

On March 30, 2010, in the case of Ohlendorf v. Am. Home Mortg. Servicing

, (2010 U.S. Dist. LEXIS 31098) on Defendants’ 12(B)(6) Motion, United States District Court for the Eastern District of California denied the motion to dismiss Plaintiffs wrongful foreclosure claim on grounds that the assignment of mortgage was backdated and thus may have been invalid.

“On or about June 23, 2009, defendant T.D. Service Company (a foreclosure processing service) filed a notice of default in Placer County, identifying Deutsche Bank as beneficiary and AHMSI as trustee. In an assignment of deed of trust dated July 15, 2009, MERS assigned the deed of trust to AHMSI. This assignment of deed of trust purports to be effective as of June 9, 2009. A second assignment of deed of trust was executed on the same date as the first, July 15, 2009, but the time mark placed on the second assignment of deed of trust by the Placer County Recorder indicates that it was recorded eleven seconds after the first. In this second assignment of deed of trust, AHMSI assigned the deed of trust to Deutsche.  This assignment indicates that it was effective as of June 22, 2009. Both assignments were signed by Korell Harp. The assignment purportedly effective June 9, 2009, lists Harp as vice president of MERS and the assignment purportedly effective June 22, 2009, lists him as vice president of AHMSI. Six days later, on July 21, 2009, plaintiff recorded a notice of pendency of action with the Placer County Recorder.  In a substitution of trustee recorded on July 29, 2009, Deutsche, as present beneficiary, substituted ADSI as trustee.”

The court stated that “while California law does not require beneficiaries to record assignments, see California Civil Code Section 2934, the process of recording assignments with backdated effective dates may be improper, and thereby taint the notice of default.”

Plaintiff’s argument was interpreted by the court to be that the backdated assignments were not valid or at least were not valid on June 23, 2009, when the notice of default was recorded. As such the court assumed Plaintiff argued that MERS remained the beneficiary on that date and therefore was the only party who could enforce the default.

Judge Lawrence K. Karlton invited Defendants to file a motion to dismiss as to plaintiff’s wrongful foreclosure claim insofar as it is premised on the backdated assignments of the mortgage.

Dean Mostofi

301-867-3887

MERS Admits NO Interest in Mortgage and No Loss On Default

see MERS INSTRUCTIONS TO TRANSFER RIGHTS OPTION 1

MERS INSTRUCTIONS TO TRANSFER RIGHTS OPTION 2

PRECLOSING REG SHOWS PRE-KNOWLEDGE OF SECURITIZATION

Arnold admitted MERS does not have a beneficial interest in any mortgage; does not loan money; does not suffer a default if monies are not paid; etc...the internal agreement used by MERS expressly disavows any beneficial interest.

By Mark Mausert, Nevada  mark@markmausertlaw.com

On September 25, 2009, R.K. Arnold, the President and CEO of MERSCORP, Inc. — the parent corporation of Mortgage Electronic Registration Systems, Inc. was deposed in Alabama. Arnold is also an Officer of MERS. Arnold admitted MERS does not have a beneficial interest in any mortgage; does not loan money; does not suffer a default if monies are not paid; etc. etc. On November 11, 2009, William C. Hultman was deposed in Alabama and made the same admissions. And, of course, the internal agreement used by MERS expressly disavows any beneficial interest.

One tactic, if confronted with a foreclosure in Nevada, is to elect mediation. At the mediation, demand the assignments, i.e., the assignments which would cure the problem (according to Judge Riegle’s March 31, 2009, opinion, as affirmed by Judge Dawson on December 4, 2009). MERS and/or the lender has been unable to produce any such assignments — because they almost certainly do not exist.

Request the Mediator to check the appropriate box, i.e., the box which memorializes a failure by the lender to produce all required documents (all assignments must be produced per AB 149 — incorporated into Chapter 107 of the Nevada Revised Statutes). The requisite Certificate will not issue as a result. The Notice of Default is effectively negated. The “lender” must thereupon issue a new Notice and the borrower is again at liberty to elect mediation within 30 days of receipt thereof. The borrower should pay his or her taxes, and insurance, but not the mortgage — especially if upside down. It is an effective stopgap measure.

If the courts continue to follow the reasoning of Judge Riegle and Dawson a borrowr may, if otherwise eligible, declare bankruptcy; bring an adversary proceeding within the bankruptcy; and discharge the “mortgage” debt (which re a MERS mortgage is not really a mortgage but rather an unsecured debt — per Judge Riegle).

Or the borrower may initiate litigation based on causes of action for breach of contract, fraud by omission and racketeering (Chapter 207 of the Nevada Revised Statutes). By conducting systemic predatory lending, and coupling predatory lending with credit default swaps, i.e., bets homes would be foreclosed upon, the lenders breached the implied duty of good faith and fair dealing — the duty to refrain from frustrating the purpose of the contract. Borrowers generally harbored two main purposes — to secure a place to live and to safeguard/create an investment. By engaging in systemic predatory lending the banks frustrated the second purpose. They devalued the collaterized asset and breached the lending contract. Because this information was not disclosed, fraud by omission occurred. A series of fraudulent act constitutes racketeering, which gives rise to a claim for treble damages, plus fees and costs. Those are the theories.

How To Stop Foreclosure

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.

Foreclosure Defense: Objecting to Trustee sale

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california-statutes-foreclosure

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Letter of Objection to Trustee in Non-Judicial Sale States

SEE three-day-rescission-three-year-rescission-and-general-rescission


NOTE: THERE ARE ACTUALLY THREE LETTERS OF OBJECTION AND RESCISSION THAT COULD BE SENT: (1) THREE DAY NOTICE OF RESCISSION, (2) THREE YEAR NOTICE OF RESCISSION AND (3) GENERAL CLAIMS NOTICE OF RESCISSION OR NULLIFICATION. IN ALL CASES, THE NOTICE SHOULD CONFORM TO STATE LAW AS TO FROM, SUBSTANCE AND METHOD OF MAILING. GENERALLY IT SHOULD BE SENT CERTIFIED MAIL RETURN RECEIPT REQUESTED. IN ADDITION, A FILING OF LIS PENDENS OR NOTICE OF PENDENCY TOGETHER WITH YOUR NOTICES AS ATTACHMENTS WOULD GUM UP THE WORKS ON THE PROPOSED SALE AND PROBABLY FORCE THE ACTION TO CONVERSION FROM NON-JUDICIAL SALE TO JUDICIAL SALE. THE ADVANTAGE IN CONVERTING TO JUDICIAL SALE IS THAT THE TRUSTEE OR “LENDER” MUST FILE A COMPLAINT AND ALLEGE THINGS THAT WILL EXPOSE THEM TO LIABILITY BECAUSE THE ALLEGATIONS ARE NOT TRUE. IT KEEPS THE BURDEN WHERE IT BELONGS — ON THE LENDER.

The Trustee has an obligation of fair dealing with both the borrower and the lender. All to often the Trustee’s loyalties follow the money, for it is the Lender that pays the bills. A Notice of Non-Judicial sale is very much like a Motion for Summary Judgment in Judicial Foreclosure States. It is designed to take the case off the docket and the get the sale over with as little trouble as possible — where the facts are not in dispute, the borrower is in default, the lender has followed all the necessary procedures, and the Lender is in fact collecting on a debt that is owed. The Lender, by having the property sold is recovering part or all of the debt owed to the lender.

In the Mortgage Meltdown context however, everything is turned on its head for mortgages originated between 2001-2008. The Lender has already been paid, doesn’t won the note and is attempting to score a windfall by getting the property in addition to the money it received from the REAL source of the financing. And the Lender has received an undisclosed fee of around 2.5% of the total “loan.” The mortgage broker, the appraiser and other participants were also overpaid by as much as seven or eight times their normal fees to keep their mouths shut. The borrower’s reliance on the good faith of these people was misplaced.

Thus when a property owner receives a notice of delinquency, notice of default or notice of sale, the borrower should write a letter that says something along these lines (subject to checking the verbiage with local counsel):

Dear Trustee:

I am in receipt of (fill in the notice you have received) dated (fill in the date). I hereby object to the Notice. I hereby give notice that as Trustee, you have an obligation not only to whom you perceive as the lender, but to perform due diligence as to the status of the note and the true owner of the note and the true party in interest who might be entitled to enforce the note or mortgage. Based upon my information, you already had notice of the fact that the true lender was undisclosed at the time of the loan closing, and therefore breached your fiduciary duty to me and all other parties affected and/or committed acts of negligence, gross negligence or malpractice such that you are presently liable for civil remedies for attempted conversion, fraud, civil theft, and usury. Under State Law you are obligated to file either a judicial foreclosure procedure procedure, a petition for declaratory relief and/or an interpleader.

I hereby request that you send a copy of this letter to your insurance carrier, the title insurance carrier and all other interested parties as described herein for the following reasons:

  • There is no delinquency or default. The Lender has been paid in full plus a fee for standing in for an undisclosed third party lender that was not properly registered or regulated as a financial institution or lender at the time the transaction took place. IN ADDITION I HEREBY EXERCISE MY RIGHTS TO RESCIND THE LOAN TRANSACTION IN ITS ENTIRETY UNDER THE THREE DAY RULE, THE THREE YEAR LIMITATION, AND UNDER THE USURY AND GENERAL CLAIMS THEORIES AND CAUSES OF ACTION. BY FAILING TO DISCLOSE THE TRUE LENDER AND USING SUBTERFUGE TO HIDE THE FACT THAT THE “LENDER” AT CLOSING WAS PAID TO POSE AS THE LENDER WHEN IN FACT AN UNDISCLOSED UNREGISTERED THIRD PARTY HAD RENTED THE CHARTER OR LENDING LICENSE OF THE “LENDER”, THE LIMITATIONS ON MY RIGHT TO RESCIND WAS EXTENDED INDEFINITELY. UNDER STATE AND FEDERAL LAW, THE MORTGAGE IS NOW EXTINGUISHED AND YOUR RIGHTS UNDER THE TRUSTEE DEED HAVE TERMINATED.
  1. The Lender has failed to state the name or address of the holder in due course, John Does 1-1000, being the holders of certificates of asset backed securities, which are backed by the security instrument (mortgage) on the subject residential property.
  2. The Lender does not own, possess or control the note or the mortgage,which has been satisfied in full. Demand is herewith made for satisfaction of mortgage to be filed in the appropriate county records.
  3. Your authority as Trustee has also been transferred to the Trustee of the pooled mortgages and/or notes on various properties, real and personal, that were included in an asset pooled that was eventually securitized and sold to investors, who along with others in the chain of securitization acquired rights and obligations to the note, mortgage, and stream of revenue eventually due to the investor.
  4. Because of the known presence of necessary and indispensable parties to any dispute that the true holders in due course might have against me, only a judicial proceeding in which all parties are included will provide a fair determination of the rights, obligation and title to the property, mortgage and note.
  5. The “loan closing” was in fact a scheme to trick me into issuing a negotiable instrument that was pre-sold to investors as an unregulated security. The parties and their fees were not revealed nor was the true APR disclosed, as it was inflated considerably by the intentional overstatement of the appraisal on the property.
  6. The title agent, which might well be the same as the Trustee also has insurance for errors and omissions and the title insurance company that issued the policy will have total liability for this fraudulent transaction to the extent it had knowledge through its agents of the fraudulent scheme.

The totality of the transaction violates numerous state and federal laws including usury, Truth in Lending, deceptive business practices, and administrative standards for the practice of professions.

Therefore, please confirm the filing and recording of the satisfaction of mortgage, send the original note back to me (or tell me where it is), and confirm the retraction of the attempt to collect a debt which is incorrectly stated, improperly computed, improperly obtained, and fraudulently produced and transmitted.

THIS LETTER SHALL NOT BE CONSTRUED AS A WAIVER OR ELECTION OF REMEDIES.

Sincerely,

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