Enforcement of Note vs. Enforcement of Mortgage

Watch out for the discrepancy between enforcement of a note and enforcement of an encumbrance. Enforcement of the note requires proof that the claimant is the owner of the debt, or has been authorized by the owner of the debt to enforce the note. Enforcement of the mortgage requires that the claimant be the owner of the debt. 

Judgment on the note can be rendered based upon legal presumptions arising from the UCC as adopted by state law as it applies to negotiable instruments. Mortgages (deeds of trust) are not negotiable instruments. The courts err when they apply Article 3 presumptions to the enforcement of a mortgage.

And take note that not all promissory notes are necessarily negotiable instruments and that therefore they too are not entitled to the benefit of legal presumptions under Article 3.

Always remember that legal presumptions are not intended to created findings of act that are contrary to reality. Quite the contrary, they are intended only as a convenience by which the court, in the absence of any meaningful objection, can presume such facts as part of its conclusion; no presumption should be employed if the evidence is tinged with a self serving nature and produced by the named claimant, and all such presumptions are rebuttable by exposing the reality. 

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A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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 Possession of the original note usually results in a presumption that the possessor is a holder, and being holder usually results in the presumption that the holder is authorized to enforce as an agent of the owner of the debt.

Those are the rules for negotiable paper (notes). It is easier to state a case for enforcement of the note than enforcement of a mortgage or deed of trust. The intent in the law is to make it easy for notes to flow through the marketplace as cash equivalents. 

It is entirely possible for the same party to be awarded judgment on a note and denied judgment for enforcement of a mortgage or deed of trust, which are not negotiable instruments. An assignment of mortgage without a transfer of the debt is a nullity. But when the note is transferred, that is generally treated as though title to the debt has been transferred. That is an error in most cases involving claims of “securitization.” The reason it is an error is that the transferor of the note did not own the debt.

Both the endorsement of the note and the assignment of the mortgage can be attacked on the basis that authorization from the owner of the debt has not been shown. But the burden is on the claimed debtor (You) to rebut the assumptions and presumptions.

The only way to do that appears to be through discovery in which you request the owner of the debt to be identified. This is tricky and the other side knows it. They will reply that a designated party has some sort of authority to claim ownership without actually saying that they are the owner. So if you merely ask for the owner of the debt to be identified you probably won’t get very far.

You need to probe deeper than that. Go to an accountant and find out what the attributes are under GAAP and the FASB of an owner of the debt. The answer will be that the owner will have entries in its own books and records of an asset consisting of the claimed debt. Those entries must include an entry on the asset side of the amount of the supposed debt. Usually on the liability side there is a reserve for bad debt or default.

Any accountant will tell you that if the loan is not carried as  an asset on the books and records of the named claimant, they are not the owner of the debt.

This dichotomy is revealed easily in Article 3 UCC as adopted by state statute, which applies to notes and Article 9 UCC as adopted by state statute which applies to mortgages.

The legislative intent is that nobody should be allowed to enforce a mortgage without actually owning the debt. This is backed up by your jurisdictional argument, to wit: the party named as claiming the right to foreclose is not the party who will receive the benefits of that remedy because they have no financial injury in the first place. 

It’s one thing to get a money judgment against someone. But the legislature of every state has already decided that is quite another thing to take the homestead away from a homeowner. The big safeguard is the requirement that the claimant in foreclosure actually has ownership of the debt and therefore would be injured financially if the encumbrance were not enforced. 

TPS — Third Party Strangers in Mortgage Cases

I’m sharing the wording I use in my TERA and Case Analysis reports now. I think the benefit of this wording is that it fills in the blank on who is the real creditor (owner of the debt). Hopefully it answers the following informal question lurking in the context of mortgage litigation: “If the parties claiming enforcement rights are not the owners or representatives of the owners then who is?”

Those who have that question in mind are asking the wrong party when they pose it to the homeowner as if the homeowner had an obligation to present a credible narrative of what actually happened to their loan. And the strategy of the foreclosure mills is to keep the questions directed at homeowners instead of themselves so that their prima facie case is presumed and never proven.

Just to be clear — and to avoid confusion sewn by foreclosure mill lawyers — the owner of the debt would have the following characteristics:

  • Paid value for the debt

  • Expecting payment arising from the debt itself (i.e., in accounting terms the subject debt is carried as an asset that falls under the category of a receivable, in this case a loan receivable.

  • Unencumbered authority to transact any business affecting the subject debt .

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Here is the current wording I use in my analysis and reports:

Standards and customary practices in commercial banking, lending, investment banking and auditing require, at a minimum, a reference to the date and parties to a transaction so that the data can be confirmed. This is also required in courts of law under the category of “foundation.” No such references are made in the entire paper chain relied upon by the current claimant. The wording of each document appears to side-step the issue of an actual financial transaction and skips to memorializing the proffered transaction. 

Our conclusion is that the payee on the note is almost certainly part of a failed securitization scheme. It follows then that the alleged loan transaction is a table-funded loan, and described as both against public policy and predatory under REG Z of the Federal Truth in Lending Act. We consider it certain that all actual funds came from a third party stranger (TPS) in a transaction predating the loan itself and/or predating the erroneously implied purchase of the loan or both. Hence in this case the TPS is the party who paid value for the debt and is therefore the owner of the debt. 

Standards and customary practices in commercial banking, lending, investment banking and auditing require, at a minimum, a reference to the TPS and any successors to TPS with sufficient descriptive certainty to confirm the authority of those persons or entities claiming ownership, rights to enforce, or rights to service the subject loan on behalf of the TPS or its successors, if any.

In the absence of any reference or proof of payment, payment is not presumed under generally accepted accounting principles as published by the Financial Accounting Standards Board. The failure to reference actual monetary payment causes a rebuttable presumption in auditing that there is an absence of an actual monetary payment and therefore that the documents memorializing a transaction are fabricated, entitled to no legal presumption of authenticity or validity.

An alternative explanation is that the documents were not fabricated but prepared in anticipation of an actual transaction that failed to occur. Either way the conclusion is the same, i.e., that the documents refer to a nonexistent transaction and should be discarded.

The normal and reasonable presumption is that the “predecessor” would only have transferred a valuable ownership interest in the subject debt upon payment of money or the equivalent; the lack of payment creates a presumption that there was nothing upon which a claim for payment could be made. Therefore the transfer of a promissory note as “title” to the debt from a party who had no right, title or interest in the debt conveys nothing, and a transfer of a mortgage or beneficial interest in a deed of trust would also convey nothing.

Presumptions are intended ONLY as a convenience — not to alter a result. If they would alter the result then they should be discarded. If there are two different results — one based upon legal presumptions and the other based on facts both the auditor and the court should discard the presumptions and go with the facts. 

The only thing I would add is that the title confusion and the convoluted schematics of failed securitization are not the result or fault of any action undertaken by homeowners —- ever. The burden of proving a prima facie case is and always has been on the party making the claim or initiating action for relief through foreclosure of a security interest. In our system of justice that is black letter bedrock of all legal matters in dispute.

Such a party has not proven a prima facie case if the entire body of evidence is based upon various presumptions — unless the homeowner fails to object. The objection does not change the homeowner’s burden of proof; it changes the would-be forecloser’s burden of proof. Upon timely and reasonable objection the presumptions falls away and the foreclosure mill must actually prove the facts they previously sought to be presumed. Theoretically there is no prejudice to the foreclosure mill; but we all know that most foreclosures would fail if actual proof was required.

As for the cataclysmic end of the financial system feared by judges, lawyers and regulators, blind justice requires that the chips fall where the evidence points. Anything less allows the system to punish homeowners for the errors and misdeeds of the banks.

STANDING: THE CRUX TO DEFENDING FALSE CLAIMS OF SECURITIZATION OF MORTGAGE LOANS

Mortgage foreclosure is the civil equivalent of the death penalty. in criminal cases. Many court decisions have enthusiastically supported that notion and attached much more stringent rules to the enforcement of a mortgage or deed of trust than they use in enforcement of a note. That is, until the last 20 years.

If you begin with the assumption that securitization is false, you start looking at the cover-up. Banks continue to win foreclosures because the truth is counterintuitive. Tactically the homeowner does not need to prove securitization fail in order to block a foreclosure. If that was the goal you would need to know and prove things that are in the exclusive possession, care, custody, and control of documents of third parties who are not even parties to the litigation nor mentioned in correspondence, notices or forms.

Successful defenders know that the securitization is faked and use that knowledge to ferret out relevant grounds to undermine and impeach testimony and documents proffered by lawyers for “stand-ins” called “naked nominees”, “lenders,” successors by merger, attorneys in fact, etc. wherein each such designation represents another layer of obfuscation.

Legal standing requires that the party who brings a foreclosure action must have legal injury resulting solely from nonpayment of the debt. The Federal Practice Manual published by and for Legal Aid describes and analyses gives good guidance that should be followed up with competent legal research of statutes and  cases in your state.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consent to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see Legal Aid Federal Practice Manual on STANDING

Published by the Sargent Shriver National Center on Poverty Rights

Here are some of the more salient quotes from the guide.

The law of standing has its roots in Article III’s case and controversy requirement.1 The U.S. Supreme Court has established a three-part test for standing. The “irreducible constitutional minimum of standing” requires the plaintiff to establish:

First … an “injury in fact”—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) “actual or imminent,” not “conjectural” or “hypothetical.” Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be “fairly … trace[able] to the challenged action of the defendant, and not … th[e] result [of] the independent action of some third party not before the court.” Third, it must be “likely,” as opposed to merely “speculative,” that the injury will be “redressed by a favorable decision.”2

So the ONLY party with standing to bring an action to foreclose on a mortgage is (a) the party who would suffer economic loss if the debt is paid (and the party entitled to payments on the debt) and (b) the party who would actually receive the proceeds of sale in a foreclosure action because they are holding a loan receivable reflecting ownership of the debt relating to the subject mortgage.

Both defense attorneys and judges have made the mistake of confusing standing to collect on a note, which does not necessarily require ownership of a debt, and standing to foreclose or otherwise enforce a mortgage which does require ownership of the debt. This is the law in every state under their adoption of the Uniform Commercial Code (UCC — Article 3 (NOTE) and Article 9 (MORTGAGE).

The cover for this erroneous conclusion is amply provided by the failure of homeowners to object resulting in default foreclosure sales. And further cover is provided by the fact that the delivery of the original note is presumed to be delivery of ownership of the debt. However, this is ONLY true if the execution of the note merged with the debt.

Merger ONLY occurs if the note and the debt are, in fact, the same, i.e., the Payee on the note is the same as the creditor who loaned the money. Banks have engaged in various illusions to cause courts to assume that merger occurred. But in fact, the substance of the loan transaction remains the same as what I wrote 10 years ago, to wit: (1) the sale of certificates naming an issuer without existence on behalf of the “underwriter”/”master servicer” of the nonexistent entity, (2) the underwriter taking the money and using it, in part, to fund loans through pre-purchase agreements (before anyone has even applied for loan) and through form warehouse loans that are in substance pre-purchase of loans.

Hence in all cases the money at the closing table came from the underwriter forwarding the funds to the closing agent. Since the money came from parties intending to be investors, the owner of the debt is (a) a group of investors (b) the underwriter or (c) both the group of investors and the underwriter, with the underwriter acting as agent. But the agency of the underwriter is at the very least problematic.

The underwriter may claim that the agency arises because of the Pooling and Servicing Agreement for the nonexistent “REMIC TRUST” to which the investors agreed. But the investors would be quick to point out (and have done so in hundreds of lawsuits) that the PSA and the “Trust” were sham conduits and fabricated documents to create the illusion that investor money would be entrusted to the named Trustee for administration within a trust, not a blanket power of attorney for the underwriter to use the money anyway they wished. It is the opposite of a power of attorney or agency because it arises by breach of the terms and conditions of the sale of the certificates.

While the standing test is easily stated, it can be difficult to apply. The Supreme Court has observed that “[g]eneralizations about standing to sue are largely worthless as such.”3

The Supreme Court also imposes “prudential” limitations on standing to ensure sufficient “concrete adverseness.”4 These include limitations on the right of a litigant to raise another person’s legal rights, a rule barring adjudication of generalized grievances more appropriately addressed legislatively, and the requirement that a plaintiff’s complaint must fall within the zone of interests protected by the statute at issue.5

The Supreme Court has made it clear that the burden of establishing standing rests on the plaintiff.6 At each stage of the litigation—from the initial pleading stage, through summary judgment, and trial—the plaintiff must carry that burden.7Standing must exist on the date the complaint is filed and throughout the litigation.8 Moreover, standing cannot be conferred by agreement and can be challenged at any time (e.s.) in the litigation, including on appeal, by the defendants or, in some circumstances, by the court sua sponte.9 Finally, plaintiffs must demonstrate standing for each claim and each request for relief.10  There is no “supplemental” standing: standing to assert one claim does not create standing to assert claims arising from the same nucleus of operative facts.11

The Supreme Court has held that, to satisfy the injury in fact requirement, a party seeking to invoke the jurisdiction of a federal court must show three things: (1) “an invasion of a legally protected interest,” (2) that is “concrete and particularized,” and (3) “actual or imminent, not conjectural or hypothetical.”12

In foreclosure cases, trial courts have nearly universally found that a party had standing because of legal presumptions without any proof of ownership of the debt. The good practitioner will drill down on this showing that the “presumption” is conjecture or hypothetical and that there is no harm in making the foreclosing party prove its status instead of relying on presumptions.

One last comment on both judicial and nonjudicial foreclosure. In typical civil cases if the defending party makes it clear that he/she is challenging standing, the party bringing the action must then prove it. In foreclosure cases judges typically adopt the position that the homeowner brought it up and must prove the non-existence of standing. This is the opposite of what is required under Article 3 of the US Constitution.

The party who “brought it up” is the foreclosing party. It manifestly wrong to shift the burden to the homeowner just because the foreclosing party asserts, or as in many cases, implies standing, In fact, in my opinion, nonjudicial foreclosure is constitutional but NOT in the way it is applied — by putting an impossible burden on the homeowner that makes it impossible for the homeowner to confront his/her accusers.

WHAT HAPPENS TO THE DEBT IF THE COURTS APPLY THE LAW? The debt still exists in the form of a liability at law and/or in a  court of equity. The creditor is a group of investors who have constructive or direct rights to the debt, and potentially the note and mortgage. The difference is that decisions on settlement and modification would be undertaken by the creditors — or designated people they currently trust. And that  means the creditors would be maximizing their financial return instead of minimizing it through intermediaries. But there is also the possibility that the investors have in fact been paid or have accepted payment in the form of settlements with the underwriters. Those settlements preserve the illusion of the status quo. In that case it might be that the underwriter is the actual creditor, if they can prove the payment.

HOW CAN THE NOTE BE TRANSFERRED WITHOUT THE DEBT?

Here is an analogy that might help this counterintuitive process.

Assume I own a car. I enter into an agreement with my friend Jane to sell the car to her. I sign the title and give it to her. Afterwards we both decide we didn’t want to do that. Jane pays nothing for the car. Jane does not get the car. Jane never uses the car. I still have and use the car and both Jane and I disregard the fact that I gave her a signed title. She does nothing with the title. Later in a loan application she lists the car as an asset. Then the car is stolen from me.

Who gets the insurance proceeds? The question is whether the title represents an actual agreement to buy the car. And all courts that would boil down to whether or not Jane paid me. She didn’t. I get the insurance proceeds because I lawfully applied for a duplicate title and received it.

But Jane still has one copy of the title signed by me in original form. She has also made copies of it that can be printed out with the appearance of an original. So far, she has sold the car 42 times and taken out 7 loans on the car.

One of the people that received the title records it with the DMV. There is a problem with that. I still have title and possession of the car. The gullible person who “bought” the car has a title signed by Jane, who has produced evidence that she received title from me. One Jane’s lenders on car stops receiving payments from Jane’s Ponzi scheme.

They “repo” the car and we go to court. The lender to Jane has no legal title even though they have what looks like an original title that is facially valid. Do I get my car back or does the lender” get to keep it.

One step further: if jane’s lender was actually a co-conspirator who accepted the false title and never gave a loan, does that change anything? I ask because this is exactly what is happening in nearly all foreclosures. The named “successor” in title engaged in no transaction to acquire the debt.

Transfer of the note was without regard to transferring the debt because neither the grantor nor grantee owned the debt. If the truth comes out, the transfer of the note will be seen as a sham paper transfer and the debt will be owned by whoever has money in the loan deal. Hence transfer of the note is not transfer of the debt. By denying the transfer of the note, the burden of proof should be on the would-be foreclosing party to show it was part of a real transaction.

Hawai’i Appellate Court Strikes at the Root of Fraudulent Foreclosures: HSBC Deutsch and PNC Crash and Burn

This decision, although not yet for publication, brings us another step closer to exposure to the largest economic crime in human history. Every lawyer should read it more than once in its entirety. It contains the arguments and the narrative for most successful defense strategies against fraudulent foreclosures.

Fundamental to understanding why foreclosures are fraudulent and why most borrowers should prevail is an examination of how the banks and servicers attempt to paper over the absence of (a) ownership of the debt and the failure to identify the owner and (b) any evidence of an actual nexus with the supposed contract they are seeking to enforce — in the absence of anyone else claiming the right to enforce. Their entire premise rests on bank control of who knows about the subject debt.

That void is what produced this decision and the decisions around the country in discovery, in motions (especially motions for summary judgment), and at trial that have been in favor of homeowners and then buried under settlements restricted by the seal of confidentiality —- thousands of them.

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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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See HSBC, Deutsch, PNC adv Felicitas Moore, Intermediate Court of Appeals, Hawai’i

Hat Tip to Da Goose and Awesome Order on Failure of Qualified Witness and Documents

Special kudos to Hawai’i Dubin Law Offices, representing the homeowner.

Whether this case will stand up to further appeal is a question that can only be answered by time. But I think that it will and that this case, like many in the past few weeks and months, is striking at the achilles heal of fraudulent foreclosures. It is worthy of study because it does much of the research and analysis for you. It is not binding in any other state and may not be binding even in Hawai’i, since it is currently designated as “not for Publication.”

If I were to write an article detailing the many fine points raised by this appellate court, it would be a book. So read the article and look for the following points:

  1. The existence and administration of the books and records of the supposed “REMIC” Trustee for the supposed trust is directly challenged, although indirectly.
  2. Summary Judgment just became more difficult for the banks and servicers, if you use the reasoning in this opinion.
  3. Verification of complaint by “authorized Signor” or the “attorney” does NOT end the inquiry into the facts.
  4. Presumptions work against the foreclosing party in motions for summary judgment.
  5. Courts are getting suspicious of anything proffered by a foreclosing party when there is an alleged “REMIC” “trust” involved.
  6. Affidavits or declarations that the affiant personally has possession of the note do NOT establish (a) possession or (b) the right to enforce before the foreclosure was initiated. [This will lead to even more backdating of documents]
  7. FOUNDATION: Self declaration of knowledge and competency are insufficient. Foundation requires that the affiant or declarant specifically state how he/she came into such knowledge and why he/she is competent to testify.
  8. A self-serving declaration that the affiant is the custodian of records as to one case” raises red flags. Such declarations are only proper when they come from an individual who is, in the ordinary course of business, the records custodian for the business. [This raises some very uncomfortable questions for the banks and servicers, to wit: there are no business records for the trust because (a) the trustee has no right to keep them or even review information that would be entered on such records and (b) the trust has no business that requires record-keeping. So the assumption that the servicer’s records are the records of the trust named as the foreclosing party is simply not true and more importantly, lacks the required foundation to get such records into evidence.]
  9. Self-serving declarations do not necessarily authenticate any documents.
  10. Attorneys for the banks and servicers are put on notice that chickens may come home to roost — for  filing attestations to facts, about which they knew nothing or worse, about which they knew were untrue.

 

A Document labeled “Assignment of Mortgage” Does Not Prove the Sale of the “Loan”

Too many lawyers and pro se litigants look at the title to a document and don’t know what else to do with it. They accept as true that a document is what is stated. That is one of the many trapdoors the banks have laid for us.

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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 “title” to a document is a statement of fact that may or may not be true. The title used is for the convenience of the party who drafted it. In our analysis we do not assume or accept that any  document is what is stated as the title or anywhere else in the document.
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The fact that a document is entitled “Assignment of Mortgage” does not mean that in reality there is either a valid mortgage or that a valid debt, note or mortgage was sold in any transaction.
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Nor does the existence of the document mean that the signatures are authentic and authorized or even that the named entities or signatories actually exist as legal “‘persons.'”
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The admission of such a document into evidence normally proves only that the document exists. While the existence of the document might raise assumptions or even legal presumptions, the document itself is not proof of any statements of fact or issues referred to in the wording of the document.
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Such statements would normally be regarded or should be regarded as hearsay and excluded from evidence unless someone with personal knowledge, under oath, had personal knowledge for their five sense and recalled events that were tied to the execution of the document.
 *

Objections must be timely raised or the objection is waived. Hence, if opposing counsel refers to wording in the document, that wording is hearsay but must be barred by (a) an objection at the moment the wording is the subject of a question to a witness and (b) the court sustaining the objection in the absence of a proper foundation for the admission of what is or ought to be recognized as excluded hearsay evidence.

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The Mortgage Loan Schedule: Ascension of a False Self-Serving Document

At no time were the Trusts anything but figments of the imagination of investment banks.

As an exhibit to the alleged Pooling and Servicing Agreement, the Mortgage Loan Schedule” appears to have legitimacy. Peel off one layer and it is an obvious fraud upon the court.

The only reason the banks don’t allege holder in due course status is because nobody in their chain ever paid anything. The transactions referred to by the assignment or endorsement or any other document never happened — but they are  wrongly presumed to be true.

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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

Our Services: https://livinglies.me/2016/04/11/what-can-you-do-for-me-an-overview-of-services-offered-by-neil-garfield/

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I’m seeing more and more cases where once again the goal post keeps moving, in order to keep the court and foreclosure defense counsel off balance. Now it is the attachment of a “Mortgage Loan Schedule” [MLS] to the PSA. As an exhibit to the alleged Pooling and Servicing Agreement, the “Mortgage Loan Schedule” appears to have legitimacy. Peel off one layer and it is an obvious fraud upon the court.

Here is my thought. The MLS supposedly attached to the PSA never has any proof as to when it was attached. It has the same problem as the undated endorsement on the note only worse. It is not a facially valid document of transfer. It relies, derivatively on the PSA that was created long before an MLS existed even if they were telling the truth (which they are not — the trusts are empty).

The securitization process is described in the Pooling and Servicing Agreement along with the parties who are involved in the purchase, Sale and ownership of the alleged loans that were “purchased” by the Trust. But there was no purchase. If there was a purchase the bank would assert status as a holder in due course, prove the payment and the borrower would have no defenses against the Trust, even if there were terrible violations of the lending laws.

First you create the trust and then after you have sold the MBS to investors you are supposed turn over the proceeds of the sale of mortgage backed securities (MBS) to the Trustee for the Trust. This never happened in any of the thousands of Trusts I have reviewed. But assuming for a moment that the proceeds of sale of MBS were turned over to the Trust or Trustee THEN there is a transaction in which the Trust purchases the loan.

The MLS, if it was real, would be attached to assignments of mortgages and bulk endorsements — not attached to the PSA. The MLS as an exhibit to the PSA is an exercise in fiction. Adhering strictly to the wording in the PSA and established law from the Internal Revenue Code for REMIC Trusts, and New York State law which is the place of origination of the common law trusts, you would THEN sell the loan to the trust through the mechanism in the PSA. Hence the MLS cannot by any stretch of the imagination have existed at the time the Trust was created because the condition precedent to acquiring the loans is getting the money to buy them.

The MLS is a self serving document that is not proven as a business record of any entity nor is there any testimony that says that this is in the business records of the Trust (or any of the Trust entities) because the Trust doesn’t have any business records (or even a bank account for that matter).

They can rely all they want on business records for payment processing but the servicer has nothing to do with the original transaction in which they SAY that there was a purchase of the loans on the schedule. The servicer has no knowledge about the putative transaction in which the loans were purchased.

And we keep coming back to the same point that is inescapable. If a party pays for the negotiable instrument (assuming it qualifies as a negotiable instrument) then THAT purchasing party becomes a holder in due course, unless they were acting in bad faith or knew of the borrower’s defenses. It is a deep stretch to say that the Trustee knew of the borrower’s defenses or even of the existence of the “closing.”By alleging and proving the purchase by an innocent third party in the marketplace, there would be no defenses to the enforcement of the note nor of the mortgage. There would be no foreclosure defenses with very few exceptions.

There is no rational business or legal reason for NOT asserting that the Trust is a holder in due course because the risk of loss, if an innocent third party pays for the paper, shifts to the maker (i.e., the homeowner, who is left to sue the parties who committed the violations of lending laws etc.). The only reason the banks don’t allege holder in due course status is because nobody in their chain ever paid anything. There were no transactions in which the loans were purchased because they were already funded using investor money in a manner inconsistent with the prospectus, the PSA and state and federal law.

Hence the absence of a claim for holder in due course status corroborates my factual findings that none of the trusts were funded, none of the proceeds of sale of MBS was ever turned over to the trusts, none of the trusts bought anything because the Trust had no assets, or even a bank account, and none of the Trusts were operating entities even during the cutoff period. At no time were the Trusts anything but figments of the imagination of investment banks. Their existence or nonexistence was 100% controlled by the investment bank who in reality was offering false certificates to investors issued by entities that were known to be worthless.

Hence the bogus claim that the MLS is an attachment to the PSA, that it is part of the PSA, that the Trust owns anything, much less loans. The MLS is just another vehicle by which banks are intentionally confusing the courts. But nothing can change the fact that none of the paper they produce in court refers to anything other than a fictional transaction.

So the next question people keep asking me is “OK, so who is the creditor.” The answer is that there is no “creditor,” and yes I know how crazy that sounds. There exists a claim by the people or entities whose money was used to grant what appeared to be real residential mortgage loans. But there was no loan. Because there was no lender. And there was no loan contract, so there is nothing to be enforced except in equity for unjust enrichment. If the investment banks had played fair, the Trusts would have been holders in due course and the investors would have been safe.

But the investors are stuck in cyberspace without any knowledge of their claims, in most instances. The fund managers who figured it out got fat settlements from the investment banks. The proper claimant is a group of investors whose money was diverted into a dynamic commingled dark pool instead of the money going to the REMIC Trusts.

These investors have claims against the investment banks at law, and they have claims in equity against homeowners who received the benefit of the investors’ money but no claim to the note or mortgage. And the investors would do well for themselves and the homeowners (who are wrongly described as “borrowers”) if they started up their own servicing operations instead of relying upon servicers who have no interest in preserving the value of the “asset” — i.e., the claim against homeowners for recovery of their investment dollars that were misused by the investment banks. An educated investor is the path out of this farce.

 

PRESUMPTIONS, PLEADING, PROCEDURE AND PROOF REALLY MATTER IN FORECLOSURE ACTIONS

In the final analysis nearly all foreclosures have been rubber-stamped based upon facts that are presumed to be true but which are untrue.
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In my opinion every case lost by homeowners has been the result of the court using legal presumptions and shifting the burden of persuasion onto the homeowner who has been stonewalled, with the court’s help, during discovery and stonewalled before there was any foreclosure when the homeowner submitted qualified written requests and debt validation letters. Hence the court shifts the burden to the homeowner and then helps the bank by not allowing access to information that would prove that the presumed fact is rebutted by competent evidence.
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

Our Services:  www.livinglies.wordpress.com/2016/04/11/what-can-you-do-for-me-an-overview-of-services-offered-by-neil-garfield/

As if it isn’t hard enough to defend foreclosure actions, pro se litigants and lawyers alike get caught up in a spiral of presumptions that are said to apply because of state law.
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Florida Statute 90.302 makes it clear that if there is credible evidence to sustain a finding of nonexistence of the presumed fact then the existence of nonexistence of the presumed fact shall be determined from the evidence without regard to the presumption. In other words the banks must plead the facts upon which they want relief and not rely upon presumptions of fact that are clearly untrue or at least debatable. After they plead those facts they must prove those facts. In other words the burden of persuasion is on the banks to show the fact is true instead of being on the hapless homeowner to show that the fact is untrue. The only party who actually knows, and the only party that has access to the information that would prove it one way or the other is the bank or entity that is initiating foreclosure.
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This provision is often overlooked — especially when arguing to compel discovery. Patrick Giunta, Esq. (Ft. Lauderdale)  has had success in demanding discovery that would rebut the rebuttable presumption. The bank responded with alarm.
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For example, the promissory note that is facially valid (complies with statute to be a negotiable instrument) enables the bank to invoke the legal presumption that everything in the note is true. That in turn gives rise the presumption that the Payee in that note is a lender.
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But that is also a rebuttable presumption. So discovery requests for information that might lead to the discovery of admissible evidence showing that the Payee was not a lender, but rather a broker would be appropriate. Courts have almost uniformly used the rebuttable presumptions as though they were conclusive presumptions. During discovery they will most often deny requests for information about one instrument or another and the underlying presumption of a real transaction for which the note is evidence.
*
The note is evidence of the debt, not the debt itself. Theoretically at least, demanding information about that underlying transaction should produce no prejudice to the bank. But he fight on presumptions is so intense that it leads one to conclude that the banks are winning cases based upon facts that are not true but taken to be true as a result of the application of legal presumptions.
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It isn’t enough to know that the loans and foreclosures are fraudulent generally. It must be specific to the case. But I am leading the attack now on legal presumptions. I am attempting to use the information in the public domain and, where possible, inconsistencies in specific case filings, to show that the rebuttable presumptions that are normally applied should not be applied because of the common wording in the statutes that say if there are circumstances that show lack of trustworthiness about what appears to be a facially valid document then the party who proffers that document must prove their case without the benefit of legal presumptions. This, if accepted, would shift the burden of proof squarely on those attempting to use the vehicle of foreclosure, requiring them to prove the actual loan from a specific party, and the actual ownership of the debt by a specific party.

*
The argument from the banks should be interesting. On its face there is obviously no prejudice requiring the banks to prove a fact that is true. What if the presumed fact is untrue? The banks will fight it because without the presumption they cannot prove the truth of  the matter asserted in the “facially valid” document. My proposition is this: they can’t prove those facts because they are not true. In the final analysis nearly all foreclosures have been rubber-stamped based upon facts that are presumed to be true but which are untrue. In my opinion every case lost by homeowners has been the result of the court using legal presumptions and shifting the burden of persuasion onto the homeowner who has been stonewalled, with the court’s help, during discovery and stonewalled before there was any foreclosure when the homeowner submitted qualified written requests and debt validation letters.
 *
Hence the court shifts the burden to the homeowner and then helps the bank by not allowing the homeowner to access information that would prove that the presumed fact is rebutted by competent evidence.
 *

Whether this attack will be allowed is another story. The underlying bias is that regardless of the malfeasance of the banks, the homeowner shoulders the entire burden of the wrongdoing. As stated in Yvanova while legally it matters whether the homeowner owes any money or anything else to the initiator of a foreclosure, in practice this is NOT followed in most court actions. The simple truth is that the courts are allowing the banks to bend, break or twist the rules and laws — until the bank wins. This obviously is wrong on many levels. The decisions being made during this 10 year holocaust will come back to haunt us on a variety of levels. These cases will be cited to enable fraudsters of all stripes and colors to escape liability and even accountability in civil and criminal courts.

*

I have marveled, for example, at how the small fish have been convicted of white collar crime for issues relating to “mortgage fraud” when in fact they were doing exactly what their “victims” had wanted them to do. They were merely tossed under the bus to make it appear that a mega bank would never have sanctioned such behavior. In truth, they not only allowed continuous violations of lending laws, they invented most of the ways that lending laws were ignored. And the violations continue because the banks are obviously immune from serious prosecution.
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Both political parties are responsible for that and thus all three branches of government are infected with what has repeatedly been shown to be a fatal virus — fatal to the middle class who make up the vast majority of the consumer driven economy. We are undermining ourselves every time another foreclosure is allowed. In each foreclosure we remove another family from the ranks of consumers whose purchases normally make up 70% of GDP.  Look that up — the economists have replaced consumer purchases with the movement of paperwork linked to worthless financial instruments. Where the financial industry pretty much had an important place at 16% of GDP, it is now reported as just under 50%. But Wall Street is allowed to exist because it is a conduit for capital. How could the currently reported figures be right if the middle class has been indisputably decimated? What is so valuable on Wall Street that it now makes up half of our GDP? What are they measuring — inflated salaries and bonuses?
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As long as this bias remains true, the continuing epic financial fraud revealed in 2007-2009 will dominate our legal and living landscape.
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Another Sham: The Sudden Rise of Powers of Attorney in Foreclosure Cases

The entire foreclosure mess has been predicated upon one huge false premise — that by fabricating reams of paper, each one tied to the other or apparently tied to others, rights are suddenly created where none existed. This has never been the law but it suddenly has become the underpinning of most decisions in favor of banks and servicers who are strangers to the transactions upon which they are making claims.

WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation. In order to make it easier to serve you and get better results please take a moment to fill out our FREE registration formhttps://fs20.formsite.com/ngarfield/form271773666/index.html?1453992450583 
Our services consist mainly of the following:
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  2. 60 minute Consult — expert for lay people, legal for attorneys
  3. Case review and analysis
  4. Rescission review and drafting of documents for notice and recording
  5. COMBO Title and Securitization Review
  6. Expert witness declarations and testimony
  7. Consultant to attorneys representing homeowners
  8. Books and Manuals authored by Neil Garfield are also available, plus video seminars on DVD.
For further information please call 954-495-9867 or 520-405-1688. You also may fill out our Registration form which, upon submission, will automatically be sent to us. That form can be found at https://fs20.formsite.com/ngarfield/form271773666/index.html?1452614114632. By filling out this form you will be allowing us to see your current status. If you call or email us at neilfgarfield@hotmail.com your question or request for service can then be answered more easily.
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Just want to point out that the reason why they are using a Power of Attorney (POA) instead of a servicing agreement is that the servicing rights are retained by the Master Servicer and sometimes even the subservicer. While the POA might appear to grant full authority it is missing the servicing functions including accounting for borrower payments and payments to the “investor(s)”. Especially when you add the element of entries made at or near the time of the transaction. This is another reason why homeowners who are alleged borrowers should be able to look at those transactions and see if the “business record” is correct. Once again we come back to discovery as the essential time to bring this up.

All of this makes it impossible for the latest entity to legally receive an application for modification. When you scratch the surface and actually ask the question the answer is always the same — that the “corporate representative” of the latest entity in the game of musical chairs can neither offer nor accept any modification and in fact is there purely for the purpose of getting the foreclosure judgment and forced sale of the property — an event that puts a judges order and a court clerk’s certificate on top what is in actuality a pile of empty, worthless paper.
The inability and/or unwillingness of the Plaintiff or its newest “attorney in fact” to show the actual money trail and actual deposits and disbursements, is a key factor in showing that other documents upon which the  banks and servicing are relying (using legal presumptions to fake their way through the process) are now suspect and thus not deserving of the application of the legal presumptions that ordinarily would apply to facially valid or recorded documents.
Remember the newest entity supplying records is NOT the Plaintiff. Judges tend to treat them as though they w ere the Plaintiff. This element of distraction by the lawyers for the banks and servicers has served them well. The Judge treats the newest entity as the Plaintiff when in fact they are not alleged to be holder, owner or have any interest or authority at all. And for good measure let’s not forget that the newest entity has no authority and possesses no “business records” (as an exception tot he hearsay rules of evidence) if it claims authority from an entity that has no power to give such authority. The entire foreclosure mess has been predicated upon one huge false premise — that by fabricating reams of paper, each one tied to the other or apparently tied to others, rights are suddenly created where none existed. This has never been the law but it suddenly has become the underpinning of most decisions in favor of banks and servicers who are strangers to the transactions upon which they are making claims.
The bottom line is that the party charged with enforcement is not a servicer but rather an enforcer. As an enforcer and since they do not have all the rights, obligations etc of a Master Servicer or subservicer, can their business records still be admissible? If they are only the enforcer and they are relying upon their stringent audit of the business records, that sounds more like a fact witness or even an expert witness than a party who has actual authority to service the loan.

The issue becomes split. The new entity that is not a servicer and therefore not charged with servicing duties, should not be able to claim that it has authority to bring the action in the name of another entity. The servicer clearly could but the attorney in fact is really a material witness whose sole function is to testify about the business records. The assumption is made that as the successor to prior alleged servicers, they can claim a chain of custody. But a company that in actuality is there for e the sole purpose of getting “business” records” into evidence is a fact witness who deserves no more presumptive credibility than any other witness.

The “servicer” claim by way of a POA is therefore a sham.

2014 Dissent Spells Out reasons for Rejecting Presumptions and Assumptions

Justice Rubin correctly anticipates the birth of a new black market industry — stealing debts as part of a larger scheme of stealing money.

In the context of an industry already using dubious tactics to collect on debts they have acquired, the prevailing notions in the minds of most judges allows for the question “Why buy the debts when you can just steal them?”

=================================
WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation. In order to make it easier to serve you and get better results please take a moment to fill out our FREE registration form https://fs20.formsite.com/ngarfield/form271773666/index.html?1453992450583 
Our services consist mainly of the following:
  1. 30 minute Consult — expert for lay people, legal for attorneys
  2. 60 minute Consult — expert for lay people, legal for attorneys
  3. Case review and analysis
  4. Rescission review and drafting of documents for notice and recording
  5. COMBO Title and Securitization Review
  6. Expert witness declarations and testimony
  7. Consultant to attorneys representing homeowners
  8. Books and Manuals authored by Neil Garfield are also available, plus video seminars on DVD.
For further information please call 954-495-9867 or 520-405-1688. You also may fill out our Registration form which, upon submission, will automatically be sent to us. That form can be found at https://fs20.formsite.com/ngarfield/form271773666/index.html?1452614114632. By filling out this form you will be allowing us to see your current status. If you call or email us at neilfgarfield@hotmail.com your question or request for service can then be answered more easily.
================================

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see Justice Rubin CA Dissent

Hat tip to Eric Mains

As a result of my articles on legal presumptions and the havoc they are causing in creating faulty precedent instead of following precedent, Eric Mains found the above Case decision in California. I agree with Eric. The dissent neatly explains why the assumptions and presumptions currently in use are not being applied properly and are resulting in a body of law that has opened the door to unlimited moral hazard. Justice Rubin correctly anticipates the birth of a new black market industry — stealing debts as part of a larger scheme of stealing money.

Indeed there is ample evidence of the spread of imposters who are, under existing law, issuing self serving proclamations that they own consumer debts. Consumers, having no information about what and who manages their debts, will often concede the debt and concede that the debt is owed to the party who proclaimed ownership. And it all comes from a notion that never should have been allowed into American jurisprudence in the first place, to wit: a debtor may not challenge a party who claims to be his/her creditor. Discovery need not be allowed and proof need not be offered as to the veracity of the claims by “strangers” to the debt.

The underlying assumption is that since the debtor owes someone, ANYONE can enforce it. The theory advanced by courts is that the debtor/borrower/consumer has no standing to challenge the self proclamation. The theory advanced by courts is based upon the assumption that even if the debtor is right, it makes no difference to the debtor. The harm, if any, is to someone else who is the real creditor. The remedy can be worked out between the claimant and the real creditor.

The underlying assumption is incredibly based upon the assumption and presumption that the claimants are still acting in good faith and not acting as thieves. This is odd in view of the dozens of cases in which the self proclaimed participants in the securitization of debt have been shown to have committed forgery, fabrication, back-dating, robo-signing in what appears to be a majority of alleged loans to alleged borrowers that are subject to what now is obviously false claims of securitization. None of it is true.

This underlying assumption of good faith is contrary to the facts. It is wrong. And what Justice Rubin seeks to present is simply that any such claimant should prove their status and not be presumed to be a creditor just because they said so. As he puts it, either they are the creditor or they are not. It is an easy task and always has been an easy task to prove ownership of a debt. The fact that the banks have fought so hard to get courts to accept their assertions of ownership and authority just because the bank said so, should in and of itself have raised multiple red flags.  Justice Rubin conceeds that, ” I suspect that creditor-beneficiaries and their trustees do not want to be forced to prove they own a homeowner’s debt and have authority to foreclose because it is now well understood that in too many cases they can’t prove their ownership and authority. I am not prejudging the facts in this case, for that is why we have discovery and a trial.”

And the other underlying assumption is that there is no harm to the debtor who is obviously faced with multiple liability on the same debt, an inability to seek reinstatement, modification or settlement with the real creditor, and a bar to the legitimate defenses in state court, Federal Court and bankruptcy court. The courts routinely order the false creditor and the debtor into mediation. The debtor is forced to either reject a settlement with an unauthorized party and thus lose his or her home or to execute modification agreements that are not worth the paper on which they are written.

Trial courts across the land are still statistically more likely than not to adopt this pattern of abuse of due process. Courts are created to provide a fair forum in which the parties can be heard without presumptions of guilt of those accused of criminal or civil acts that cause harm to society or specific victims. The burden has always been on the accuser or the claimant — until now. For the past 10 years the court system has evaded, avoided, and ignored the reality expressed by claims of the debtor, the proof in court that the self proclaimed enforcing parties were unauthorized strangers — all because the judges started off with the wrong premise when there should have been no premise at all.

The necessity perceived by court administrators was also an incorrect presumption. Had the judges continued processing foreclosures the way they always did it would have resulted in virtually all of the foreclosures being denied. Or, to be fair, it would have resulted in all of the foreclosures being granted because there was nothing wrong. All evidence clearly shows a pattern of conduct of illegal, fraudulent activities in virtually all foreclosures over the past 10 years.

Had the court administrators merely kept to their current systems one of two results would have been clear: (1) the claimants were perpetrating a fraud or (2) the homeowners were putting up false defenses  for the purposes of delay. Either way, there would not have been a glut of foreclosure litigation. Either it would have been obvious that the enforcement claims were bogus thus eliminating the claims, or the defenses would have been revealed as frivolous, thus eliminating the defenses.

Instead the defenses of homeowners were routinely ignored and their lawyers were reprimanded and threatened by judges who believed that their presumptions were proper and that the lawyers were merely hairsplitting to “get a free house.” Experience now shows that these defenses are being upheld in an increasing number of cases and that judges following the the rule of accepting self serving statements from banks and servicers are now being reversed in an increasing number of cases.”

The conclusion to be drawn from these decisions has yet to be enunciated by a majority on the bench with the clarity expressed in Justice Rubin’s dissent.  He admits that, ” The reason I point out the omission is to highlight the difficulty of learning from tangled paper trails “who, what, where, when, and how” in mortgage cases involving lender documents that are sometimes – take your pick – incomplete, lost, inaccurate, post-dated, altered, robosigned, or created after the fact….”  It doesn’t have to be this difficult.  Again, like the Judge opines, ” Chase either had the authority to act when it submitted a credit bid to foreclose on appellants’ home despite having sold appellants’ promissory note to Freddie Mac – and has the evidence to prove it – or it did not. (See Civ. Code, § 2924h, subd.(b) [the “present beneficiary” may credit bid at trustee’s sale].) It really is a simple matter. Is that too much to ask when people are losing their homes? ” 

The glut of claims on mortgage foreclosures caused the judicial system to switch into an emergency mode. In so doing they skipped over the elements of fraud, due process and moral hazard in favor of “processing” the claims as quickly as possible rather than determining if the claims had any validity.

In the context of an industry already using dubious tactics to collect on debts they have acquired, the prevailing notions in the minds of most judges allows for the question “Why buy the debts when you can just steal them?”

TILA (NON-JUDICIAL AND JUDICIAL) Rescission Gets Clearer in Most Respects

For further information please call 954-495-9867 or 520-405-1688

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It is becoming crystal clear that with help from a competent attorney the options under the TILA rescission process are (a) different from common law rescission and (b) very effective against “lenders” who can no longer hide behind “presumptions”. LIKE THE PRESUMPTIONS THAT HAVE BEEN STRICTLY APPLIED AGAINST HOMEOWNERS, BUT WHICH ARE REBUTTABLE, TILA RESCISSION IS STRICTLY APPLIED AGAINST “LENDERS.” Just as presumptions force the borrower to take the burden of proof on basic facts in the pretender lender’s case, TILA rescission forces the “lender” to take the burden of proof in the borrower’s loan, establishing that there was no basis for rescission. This article covers the law regarding those legal presumptions AND the effects and mechanics of a TILA rescission.

Amongst the things that are clear now is the plain fact that rescission is a private statutory remedy requiring only a letter to give notice of exercising the TILA right of rescission. If a homeowner wants to file suit to enforce the rescission, there is a one year statute of limitations to collect damages or get any requiring the “lender” to comply. But the effective date of rescission remains the same even if the one year statute has passed. In plain language that means that by operation of law you don’t have a mortgage encumbrance on your property if more than 20 days has passed since the rescission was effective (the day you dropped it in a mailbox).

But if you are looking to recover the financial damages provided by TILA (disgorgement of payments etc.) then you need to file suit within one year of the rescission. If you want to clear title with a quiet title action my opinion is that the one year statute of limitations does not apply — because the act provides that the mortgage and note are void by operation of law. Thus the title issue is cleared as of the date of rescission. As argued by the ACLU and as stated by a unanimous Supreme Court the rescission is effective upon notice. There is no requirement of notice AND a lawsuit. So the suit to clear or quiet title is merely based on removing the mortgage from your chain of title because it is (and has been) void since the day of rescission.

I cannot emphasize enough the importance or reading the ACLU brief below. Too many judges and lawyers have become confused over the various provisions of TILA. A lawsuit based upon rescission to to enforce the rights due to the borrower because the rescission is already effective. The lawsuit is NOT the exercise of the right of TILA rescission. The letter declaring the rescission is the exercise of the right of TILA rescission. This is far different from common law rescission.

FOR REBUTTING PRESUMPTIONS See Franklin Decision

FOR ADMISSIONS REGARDING FABRICATION OF DOCUMENTS THUS REBUTTING PRESUMPTIONS See Wells Fargo Foreclosure_attorney_procedure_manual-1

FOR THOROUGH ANALYSIS AND HISTORY OF TILA RESCISSION SEE jesinoski_v._countrywide_home_loans_aclu_amicus_brief

And see this explanation which is almost entirely accurate —

Read this excerpt from the CFPB Amicus Brief (Rosenfeld v. HSBC):
” If the court finds the consumer was entitled to rescind, it will order the procedures specified by 1635 and Reg. Z, or modify them as the case requires…Accordingly, if the court finds the consumer rescinded the transaction because she properly exercised a valid right to rescind under 1635, the lender must be ordered [by the court] to honor the rescission, even if the underlying right to rescind has expired.”
 
I needn’t go further…this is the CFPB talking…and they are the sole authority to promulgate the rules of rescission by Congress. They (the lender) must act within 20 days, regardless of the consumer’s perception of whether or not the rescission is timely. It would be up to a court to determine the exercise of the right…but the lender must be ordered by the court to follow the rules of rescission under TILA and the attendant time frames contemplated therein.
The rescission process is private, leaving the consumer and lender to working out the logistics of a given rescission.” McKenna, 475 F.3d at 421; accord Belini, 412 F.3d at 25. Otherwise, to leave the creditors in charge of determining timing, the creditors would no doubt stonewall until the time ran after receipt of the notice of rescission. Thus, even valid rescissions would result in creditors claiming that the time to file suit had run out and the statute is then moot. Congress recognized that TILA rescission is necessarily effected by notice and any subsequent litigation must be accomplished within restrictions set against the creditors…not the consumers. This is non-judicial action at its finest. Just like the non-judicial act of foreclosure (in such forums). 
Consummation is a question of fact that would be determined after the creditor performed its required obligations under 1635 (b)…unless suit is brought within 20 days of the notice of rescission…as is required.
“Everyone is a genius, but if one passes judgment on a fish trying to climb a tree, and then continues to tell him that he is stupid, the fish, and everyone else, will believe that, even though his genius has never been discovered.” Albert Einstein.

Chase Admits Violations of Consent Order

For further information please call 954-495-9867 or 520-405-1688

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see http://dtc-systems.net/2015/03/jpmorgan-chase-admits-failure-comply-april-13-2011-independent-foreclosure-review-consent-order/#more-2157

see also 27_page_settlement2

We already knew that the servicers, banks and trustees were violating the settlements and consent orders that were entered against them for filing fraudulent papers in fraudulent foreclosures. Now the question is what to do about it.

With respect to the 2011 consent orders Chase admitted the wrongdoing and the settlement was supposed to compensate and give notice to borrowers who had been defrauded.

In the proposed settlement, Chase acknowledges that it filed in bankruptcy courts around the country more than 50,000 payment change notices that were improperly signed, under penalty of perjury, by persons who had not reviewed the accuracy of the notices.  More than 25,000 notices were signed in the names of former employees or of employees who had nothing to do with reviewing the accuracy of the filings.  The rest of the notices were signed by individuals employed by a third party vendor on matters unrelated to checking the accuracy of the filings.

The first question that SHOULD come to mind is WHY a multi trillion dollar bank would need or want to engage in such practices? After all they were committing perjury by their own admission. The second question is why borrowers who were hurt by this behavior have not used the admissions to win their foreclosure cases? And the third question is what is the effect of these admissions?

The answer lies in the lies. The plain truth is, based upon my direct knowledge in several cases, that Chase did not own the loans, the Trusts therefore could not have purchased the loans and that not only Chase was lying but so was US Bank when it was named in foreclosure actions as Trustee for a Trust that plainly did not purchase the loans nor was any of the paperwork showing a transfer authentic. The underlying transaction simply isn’t there and Chase (and other banks) successfully hoodwinked courts into applying legal presumptions that were plainly contrary to the facts.

I think the admission could be used as an argument that the banks are not entitled to the legal presumptions that normally apply because of the wrongful behavior that they have admitted. If they want to show that the Trust bought the loan then they must prove it and not just produce a self-serving piece of paper that says it happened. we know it didn’t happen. Why should the burden of proof fall on a homeowner with limited resources?

The bank, with virtually unlimited resources and exclusive access to all the information, should be able to show the transaction date, amount and proof of payment (wire transfer receipt, wire transfer instructions, canceled check etc.) for the loans that were allegedly acquired and/or conveyed by the assignor and the assignee. With obviously unclean hands, the banks should not be rewarded for their subterfuge. The bank should not be allowed to claim any presumptions, legal or otherwise, that are normally applied to documents or commercial paper. If they really have a case, let them prove it — or at least respond to discovery without objection on various spurious grounds.

When I represented banks if someone had said that we didn’t own the loan or never funded the loan I would have stopped them dead with proof of the actual movement of money and that would have ended the discussion. Instead we are splitting hairs in court with the banks saying they don’t want to produce actual proof. All they need, according to them, is some self-serving piece of fabricated paper with a forged signature containing perjurious statements and the court is bound to accept such paper and apply legal presumptions that what is written on the paper is true. They have the temerity to argue that when we all know that the paper is inherently untrustworthy and not credible, given their admissions and continuous behavior.

I think discovery directed at compliance with the settlements and consent orders ought to be pressed against the banks, on the grounds that they could not have fulfilled all conditions precedent because among the conditions precedent are the requirements set forth in the settlements and consent orders. At trial I think the argument should be made, using the settlements and consent orders as exhibits, with Judicial notice, that the banks are not entitled to the presumptions and that they must prove every fact they would otherwise have the court “presume” or “assume.”

Comments invited

see also Katie Porter on servicing

Confusion in The Courts: Pleading vs Proof

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A lot of the questions that come in to me relate to the issue of whether the ability to enforce a set of loan documents is a question of law or a question of fact. The answer, I think, is both.

The confusion seems to be on the issue of pleading vs proof. As a matter of law, the courts are largely correct as to their ruling on whether the Plaintiff in a judicial state is fine with alleging bare statements of ultimate facts upon which relief could be granted. But where the judges go astray, based upon improper legal reasoning advanced by the banks, is that they apply the same pleading requirements at trial or even summary judgment.

At trial they must prove the transactions upon which they rely. If the allegation from the owner or the denial and affirmative defenses of the homeowner raise an issue of fact as to the authenticity, validity or enforceability of the paperwork relied upon by the bank, then the bank must prove the underlying transaction. If the homeowner does not raise that issue of fact, then the court is correct in allowing virtually anything in as evidence and awarding the foreclosure to the bank.

But that said, to return to yesteryear, Judges are supposed to actually review the paperwork even in an uncontested situation to see if there are inconsistencies or even something that jumps out at them this is plainly wrong. for example, if the default letter says that for reinstatement, you must pay $6700 in monthly payments to bring the account current and your monthly payments are $3100, the letter is defective. How many months are they saying you are in default? It’s a simple matter of division. This also throws off the date of the alleged default, so there is no compliance with paragraph 22 provisions.

Similarly, if the foreclosing party is saying they have rights to enforce, that is enough to plead their case. But at trial they must tell the story of how they came into the right to enforce the paper. It is this latter part where the courts have erred and where the reversals from appellate courts are coming from. The presumptions at the pleading stage do not apply to the burden of proving facts.

I think the courts are coming around on this issue but it must be presented properly. A thief can sue on the note he stole even if he forged a blank or special endorsement. He will survive a motion to dismiss although law enforcement might be waiting in the back of the room to arrest him.

The presumption at the pleading stage is that possession implies being a holder. And being a holder implies being a holder with rights to enforce, and potentially one might even infer that the holder is a holder in due course. But at trial where the facts are contested, the thief must tell the story of his possession and rights to enforce. The fact that the actual payee or holder does not know the note was stolen does not or should not shift the burden of proof onto the homeowner to prove facts that are exclusively within the knowledge and care, custody and control of the thief.

The homeowner must merely deny that the thief is a holder with rights to enforce.

Livinglies “Theory” Again Corroborated by 4th DCA in Florida: Proof of transaction IS required.

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see Murray vs. HSBC – 4D13-4316

Having exhausted all possible explanations for the fraudulent behavior of the banks, the 4th DCA has now come to the conclusion that the reason for robo-signing, fabrication, backdating, forgery etc. is that there was no transaction underlying the paperwork that the banks rely upon — at least in this case. In this case in particular, after all the cynics, critics and ridicule I confess my base instincts when I say “I told you so.” Of course the case is remanded, but there is no way HSBC is going to be able to prove anything required by this decision.

For legal practitioners the take away from this case and others being decided in Florida and around the country, is that you should not accept proclamations from either opposing counsel or the bench that the facial validity of a document is enough. In most cases there is no underlying transaction in which a purchase and sale of the loan was completed. So now, at least in the 4th DCA in Florida, foreclosing parties are being returned to the days when they had to prove the actual loan and prove that actual purchase of the loan through proof of payment for the transaction by the party seeking to enforce the loan. And when they don’t or can’t they should be subjected to sanctions against both the conspirators and their attorneys, plus punitive damages.

CAVEAT: THIS CASE DOES NOT APPLY TO ALL CASES. Check with an attorney licensed in the jurisdiction in which your property is located before you make any decisions or start celebrating. But if you check around you will see an increasing number of Florida and other state and Federal decisions, including bankruptcy court, where they found the original note and mortgage void or the transfers to have eviscerated the right to enforce the mortgage through foreclosure. In short, the tide has turned.

A nonholder in possession, however, cannot rely on possession of the instrument alone as a basis to enforce it. . . . The transferee does not enjoy the statutorily provided assumption of the right to enforce the instrument that accompanies a negotiated instrument, and so the transferee “must account for possession of the unindorsed instrument by proving the transaction through which the transferee acquired it.” Com. Law § 3–203 cmt. 2. If there are multiple prior transfers, the transferee must prove each prior transfer. Once the transferee establishes a successful transfer from a holder, he or she acquires the enforcement rights of that holder. See Com. Law § 3–203 cmt. 2. A transferee’s rights, however, can be no greater than his or her transferor’s because those rights are “purely derivative.”

Id. (emphasis added) (internal citations omitted).
HSBC had to prove the chain of transfers starting with Option One California as the first holder of the note. The only document admitted that purported to transfer the note was the PSA. Although the note was included in the PSA, the parties to the PSA were ACE, Option One Mortgage Corporation, Wells Fargo, and HSBC; not Option One California. The loan analyst testified that Option One California was acquired by AHMS, which rebranded to Homeward Residential, which was ultimately acquired by Ocwen. HSBC argues that since “Option One” is defined under the PSA as “Option One Mortgage Corporation or any successor thereto,” and Option One transferred its interest to HSBC through the PSA, HSBC had the rights of a holder. We disagree.

Holder in Due Course and Due Process

The first thing I want to do is add to my previous comments. I believe there is an implicit admission of failure of consideration in any case where a holder in due course is not identified. In addition, where a REMIC trust not alleged or asserted to be a holder in due course it means by definition that they did not purchase the loan for value in good faith without knowledge of the defense of the “borrower” (maker of the note).

 

I believe that what this means is that any court that enters an order or judgment against the homeowner, who was the maker of the note, is implicitly entering an order or judgment against the trust beneficiaries and the trust, resulting in a loss of favorable tax status and just as importantly an economic loss directly resulting from being forced to accept a loan that is presumed to be in default. The failure of the trust to pay for the loan and receive delivery of the loan documents to the depositor leaves one with the question of “what is the relationship of the Trust to the subject loan?”

 

The same logic would apply regardless of whether the citizens trust is in dispute or not. There is circular logic in the argument of the bank. On the one hand they want to be seen as a holder with rights to enforce but on the other hand they don’t want to disclose, alleged, assert, or prove the foundation or source of the right to enforce.

 

Based upon the provisions and restrictions of the pooling and servicing agreement, the investors who purchased mortgage backed securities issued by the Trust were intended to be the collective creditor for loans that were accepted into the Trust. The acceptance is stated in the pooling and servicing agreement and the exhibits to the pooling and servicing agreement should have the loans that were accepted. After the cutoff period, the only way a loan could be accepted was by acceptance by the Trustee. And the only way there could be acceptance by the trustee would be upon receipt of an opinion letter from counsel for the trust stating that they would be no adverse effect on the beneficiaries. The adverse effects are clear. One is the loss of advantageous tax treatment and the other is the economic loss from accepting a loan does not conform to the types of loans that are acceptable to the trust, as per the terms of the pooling and servicing agreement.

 

Pooling and servicing agreement is the trust instrument. Since the pooling and servicing agreement is governed under the laws of the state of New York, a violation of the restrictions and provisions of the trust is void, not voidable. The acceptance of a loan that is in default is not possible. The acceptance of any transaction that would violate the terms of the Internal Revenue Code sections on REMIC Trusts is not possible.

 

Thus the hidden issue here is that the real parties in interest who will be affected by the outcome of the litigation have not been given any notice of the pendency of the action. And the provisions of the pooling and servicing agreement prevent the trust beneficiaries from knowing or even inquiring about the status of any particular loan.

 

The confusion comes from the fact that the investors are indeed the creditors in practice. But because the trust was actually not utilized in the transaction they are direct creditors whose money was used to fund origination or acquisition of loans, contrary to the subscription agreement which promised that their money would be given to the issuer of the mortgage-backed securities that were being issued and purchased by the investors.

 

It seems obvious that the trust cannot be held to have acted in bad faith. It is equally obvious that the trust would have no knowledge of the borrower’s defenses. As the only element left for a holder in due course is the purchase for value. Since there is no allegation that the trust is a holder in due course, the bank is admitting that the trust never purchased the loan. It may be presumed that the trust might have originated or purchased the loan if it had received the proceeds of sale of the mortgage-backed securities issued by the trust. The logical assumption is that the trust never received those proceeds. The logical assumption is that the underwriter used the funds in ways that were never contemplated by the investors.

 

A further logical assumption would be that the underwriter kept the funds in its own name or in the accounts of entities controlled by the underwriter and is operating contrary to the interests of the investors.

 

The logical conclusion would be that the underwriter conducted a series of disguised sales of the same loan to multiple parties. Since the mortgage-backed securities were issued in the name of the underwriter as nominee (“street name”) they were able to trade on the loan and securities in their own name and receive the benefits without accounting to the investors or the borrower. The allocation of third-party funds (servicers, insurers, guarantors etc.) cannot be determined except by reference to books and records in the exclusive care, custody and control of the parties involved in the claims of securitization. It may be fairly concluded that such claims are false.

 

Now I will address the issues presented as to constitutional disposition of the case. It has long been judicial doctrine to avoid constitutional issues if the case can otherwise be decided on other grounds. It is also true that equal protection has proved more difficult than due process as the basis of any relief.

 

The problem in foreclosure litigation is that it must in my opinion include a claim for both due process and equal protection. The claim for lack of due process is not technically true. The true claim, in my opinion, would be lack of sufficient due process.

 

In actuality due process varies from state to state and even from county to county. If a party has been heard in court and presented arguments, then it may be fairly concluded that some due process was provided to that party. If presumptions arise against that party that give rise to orders and judgments that are contrary to the actual facts, a claim for denial of due process could be present. But the better claim, in my opinion, is to look at the state appellate decisions to show that more due process is allowed to debtors who are not involved in foreclosure litigation. I think this is a more accurate description of the actual situation.

 

The due process argument is simple: presumptions are used as shorthand for the facts. In this case the facts don’t match up with the presumptions. The only question is whose burden of proof is it. If the allegation was that a holder in due course was known and identified there is no doubt that anything the borrower had to say would be an affirmative defense, and thus after a prima facie case was made showing payment in good faith without knowledge of borrower’s defenses, the burden would shift to the alleged borrower who definitely was the maker of the note even if they were not the borrower in a loan transaction with the designated “lender.”

 

But, this is not the case at bar. The foreclosing party is asserting “holder” status, with dubious rights to enforce that are denied by the maker/homeowner. Absent is any allegation of status of a holder in due course, and of course noticeably absent is any allegation of the expenditure of funds or other consideration in exchange for delivery of the loan to the Depository designated in the PSA to receive the delivery. Thus neither the purchase nor the delivery are alleged. While being a holder might raise the presumption of being a holder with rights to enforce, it does not remove the burden of proving that said rights to enforce have been delivered from a party who definitely had the right to enforce — i.e., the holder in due course or “owner” of the loan.

 

The absence of the HDC allegation is an admission that the Trust did not buy the loan. The fact that the Trust did not buy the loan means that it is not and cannot be in the pool owned by the trust, with fractional shares owned by the investors who bought the MBS issued by the Trust. And that can ONLY mean that the right to enforce cannot be delivered or conveyed by the Trust because the Trust never received delivery and never had a right to receive delivery because they didn’t pay for the loan.

 

Thus on the face of the pleading it is up to the foreclosing party to prove its right to enforce the note by showing the identity of the party for whom the loan is being enforced, the fact that the party for whom it is being enforced owned the loan at the time the right to enforce was granted, the current balance ON THE BOOKS OF THE CREDITOR, the presence of a default ON THE BOOKS OF THE CREDITOR, and that the loan is still owned by the party who owns the loan (i.e., the HDC). Hence the burden is on the foreclosing party to reach the point where the borrower assumes the burden of refuting the case against him or her. The maker of the note is in an exclusive position of being shut out of the facts that would either corroborate or refute this narrative.

 

If the burden is placed on the borrower, it would be the equivalent of a murder on video in possession of the murderer but the State and the heirs of the victim are charged with proving the case without the video. The facts suggest here that the Trust paid nothing because it had no money to pay for a loan. The facts suggest that if it were otherwise, the Trust would have paid for the loan and be most anxious to plead HDC status. And thus the facts show that the foreclosing party cannot claim the right to enforce based upon a presumption without violating the due process rights of the homeowners here. Only the foreclosing party and its co-venturers have in their care, custody and control, the necessary information to refute or prove the facts behind the presumptions they are attempting to raise.

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What to Do When the “Original” Note is Proferred

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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.
There are two issues when the other side presents original documents. First is that they say these are originals and they do not accompany it with an affidavit from someone with actual personal knowledge of the transactions or the high bar for business records exceptions to hearsay. My experience is that 50-50, the documents are original or fabricated by use of Photoshop and a laser printer or dot matrix printer. So what you need to do is to go down to the clerk’s office and see what they filed. It would not be unusual for them to file a copy saying it was the original. Second, on that same point, the original can be examined. When the signatures are heavy there should be indentations on the back. Also a notary stamp tends to bleed through the paper to the back.

The second major point is the issue of holder v owner. The owner of the debt is entitled to the ultimate relief, not the note-holder unless the other side fails to object. So along with the proffering of the “originals” they must tell the story, using competent foundation testimony, how they came into possession of the note. In discovery this is done by asking to see proof of payment and proof of loss. Which is to say that you want to see the canceled check or wire transfer receipt that paid for the “transaction” in which the possessor of the note became a holder under UCC and is entitled to a rebuttable presumption that they are the owner. If there is no transaction for value, then the note was not negotiated under the terms of the UCC.

Since they possess the note there is a hairline allowance that they may sue for the collection on a note in which they have no financial sake but there is no ability to win if the borrower denies they received the money or that the possessor of the note obtained the note for purposes of litigation and is not the creditor — i.e., the party who could properly submit a credit bid at auction by a creditor as defined by Florida statutes, nor are they able to execute a satisfaction of mortgage because even upon the receipt of the money they have no loss, and under the terms of the note itself the overpayment is due back to the borrower.

And just as importantly, they cannot modify the mortgage so any submission to them for modification is futile without them showing proof of payment, proof of loss and/or authority to speak for and represent the interests of an identified creditor.

An identified creditor is not merely a name but is a report of the name of the owner of the debt, the contact person and their contact information. Then you can contact the owner and ask for the balance and how it was computed. So the failure to identify the actual owner is interference with the borrower’s right to seek HAMP or HARP modifications — potentially a cause of action for intentional interference in the contractual relations of another (asserting that the note and mortgage incorporated existing law) or violation of statutory duties since the Dodd-Frank act includes all participants in the securitization scheme as servicers.

The key is the money trail because that is the actual transaction where money exchanged hands and it must be shown that the money trail leads from A to B to C etc. The documents would then be examined to see if they are in fact relating to the transaction or a particular leg of the chain.

If the documents don’t conform to the actual monetary transaction, then the documents are refuted as evidence of the debt or any right to enforce the debt. What we know is that in nearly all cases the documents at origination do NOT reflect the actual monetary transaction which means they (a) do not show the actual owner of the debt but rather a straw-man nominee for an undisclosed lender contrary to several provisions of the Truth in Lending Act. The same holds true for the false securitization” chain in which documents are fabricated to refer to transactions that never occurred — where there was a transfer of the debt on paper that was worthless because no transaction took place.

One last thing on this is the issue of blank endorsements. There is widespread confusion between the requirements of the UCC and the requirements of the Pooling and Servicing Agreement. It is absolutely true that a blank endorsement on a negotiable instrument is valid and that the holder possesses all rights of a holder including the presumption (rebuttable) of ownership.

But hundreds of Judges have erred in stopping their inquiry there. Because the UCC says that the agreement of the parties is paramount to any provision of the act. So if the PSA says the endorsement and assignment must be in a particular form (recordable) made out to the trust and that no blank endorsements will be accepted, then the indorsement is an offer which cannot be accepted by the asset pool or the trustee for the asset pool because it would violate an express prohibition in the PSA.

And that leads to the last point which is that a document calling itself an assignment is not irrefutable evidence of an actual transfer of the loan. If the assignee does not agree to take it, then the transaction is void.  None of the assignments I have seen have any joinder and acceptance by the trustee or anyone on behalf of the pool because nobody on the trustee level is willing to risk jail, even though Eric Holder now says he won’t prosecute those crimes. If you take the deposition of the trustee and ask for information concerning the trust account, they will get all squirrelly because there is no trust account on which the trustee is a signatory.

If you ask them whether they accepted the assignment of a defaulted loan and if so, what was the basis for them doing so they will get even more nervous. And if you ask them specifically if they accepted the assignment which you attach to the interrogatory or which you show them at deposition, they will have to say that they did not execute any document accepting that assignment, and then they will be required to agree, when you point out the PSA provisions that no such assignment or endorsement would be valid.

If the Bank Filed Foreclosure Papers, that’s good enough for me — Judge Alan Schwartz, Dade Countyz

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On procedure and introduction of evidence and objections relating thereto, you can be as needling as you want to recuse a judge, remembering that you need to recuse the next judge as well and move venue to another county. If you have no feel for the situation, skip it because you will simply look like a fool to the judge, your client and opposing counsel — Neil F Garfield, Esq.

What’s the Next Step? Consult with Neil Garfield

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Editor’s Note: This story will probably not end well for the lawyer or his client but he exactly what I would have done (I have cuffs put on me twice). If you are unwilling to hold the trial judge’s feet to the fire (the rules and laws of evidence and procedure) then do NOT accept any engagement in which you are defending someone’s property from an invalid note, a non-existent debt and a unperfected mortgage lien.

I have conducted several background interviews with Judges in many jurisdictions and 100% of them replied that if the bank was going to the trouble of filing the foreclosure (judicial or non-judicial) then the allegations of the bank are obviously true. This creates a presumption in favor of the pretender lenders who are collectively called “banks” even when they are not banks.

Don’t be intimated by men and women in black robes. On the other hand you must show a respect for the judicial system. You may want say “you are biased.” Aggression in court often backfires unless you are saving the big bang for your finale.

A good question to ask any judge is whether they would agree with the statement that where there is smoke there is fire, i.e., if the foreclosure is filed the borrower is obviously delinquent on payments that are due. The burden of proof is thus turned on its head.

If I sue you for a loan I say I made to you then it is up to me to prove I gave you the money and prove the terms of payback (demand, installment etc.). I would also be required to show the court that the Entire accounting for the loan is in my  regular business records, and show that the borrower made some payments but has been delinquent ever since.

I would also be required to say that if I don’t get paid this money I, as creditor, will suffer a financial loss. AND then I would demand judgment for damages for the losses I proved in court and that were allowable by the original contract for loan.

What is wrong with our judicial system is that the Judges are wrong or not properly informed. But many judicial decisions against borrowers are not wrong — they are inescapably right.This happens when you have tacitly admitted or directly omitted a denial of the debt, the note and the mortgage. I’ve seen a lot of “bad” decisions without a hint of bias. If you are going to admit all the elements of a judicial foreclosure, including the amount owed, you are giving the Judge no choice but to enter a ruling against your client.

In short, it isn’t corruption of the fiduciary at work here so much as the omissions of several essential pleadings and admitting the other side is right before you start. When I sat on the bench I was always looking for admissions against interest — another piece of the puzzle out the window. That is how we manage to cut through the bullcrap to what he honestly believe to be the truth of the matter.

If one side is theoretically right and the other side is theoretically wrong, the side that is wrong will win if the opposition fails to deny facts  that are evident as first  glance at he prospectus and Pooling Servicing Agreement.

Judges presume that there would be no action before them in court unless there existed a valid debt or obligation, a valid note and a perfected recorded lien on the property. Thus the borrower is left holding the holographic image of an empty paper bad. The information as to what really went on with the origination of the loan has already been decided in the Judge’s mind. The information concerning funding of the origination of the loan, and then assignments (“for value received”) are all truthful representations, because a bank said them.

The prevention of voir dire to a witness who is about to introduce a fabricated document forged by a robo-signor is the height of judicial arrogance. Preventing counsel to at least defend based upon cross examination of the bank’s “witnesses” (most of whom are incompetent because they lack personal knowledge) is a complete denial of due process and provides another level of judicial arrogance.

Here is a practice pointer and message to judges: Ask for a sidebar in which you remind the judge that he is not here to decide the case until the case is over and there is no demand for a jury trial. His job is not to assess the veracity of the question but only whether it was properly formulated and relates to any of the claims or defenses filed in the record.

Then comes the zinger. You should say to the Judge that if you are already precluding this case by your own bias arising out of the assumption that the banks wouldn’t foreclose unless their claims were true then he/she must recuse themselves. So what is it going to be Judge — bias or the bliss of blind justice?

As you feel the approach of a enraged Judge who is likely to say that he doesn’t’ need a lecture from you on how to be a judge then you should ask him politely who else he can go to in order to prevent his bias from producing an unjust result. If you think he/she is about to explode then add — because it is obvious that you need a lecture from someone.

Before you travel the recusal route be aware that the Judges all talk about you behind closed doors and while they are not supposed to deal with advice on individual cases or lawyers they do it anyway. When the next Judge is assigned he will have heard only the side of the Judge before him and being a judge and expecting the other judges to cover his back, he will try to mend the record such that the committee in charge of judges does not get wind of these antics.

The new Judge will at first appear to be cold and dispassionate, but he is only waiting for the opportunity to do something that will devastate your case. So ask for a sidebar again. And ask the Judge if he is close friends withe prior judge. Ask if he had any conversation with the prior judge regarding this case? What was said? Given that, Judge, my client feels that a fair trial in this county is probably impossible, asking for a change of venue to another county.

Fireworks in open court today. Matthew Bavaro and Judge Alan Schwartz did not see eye-to-eye in today’s Miami-Dade foreclosure trial.

Tuesday 18th December 2012

by mbavaro

Many of you know that I was in trial this morning for a Miami-Dade County foreclosure client. The judge was the Honorable Alan Schwartz. It was quite the show that left jaws dropping in open court. The judge allowed the note and mortgage into evidence without objection from me. Then the bank tried to introduce the Notice of Acceleration and the loan payment history. I objected and asked the court to allow me to voir dire the witness prior to the introduction of the records. This means I asked for the right to questions the witness about their knowledge regarding the records keeping practices of Bank of America. The judge did not allow me to ask any questions at this stage and allowed the documents into evidence over objection.

 

So, the bank rested and I got an opportunity to cross examine the witness, or so I thought. I was barely allowed to even ask a question. He shot me down almost every time I asked something. When I went to put my position on the record, he would not allow me to open my mouth. Well, I am not a wall flower, I am going to stand up for my clients.

 

The acceleration notice that Bank of America sent was invalid in my opinion and about a dozen other judges around the state have found in favor of the homeowner on this very issue with the same acceleration letter from Bank of America. When I raised this to him, he could not believe that I had the audacity to actually ask him to rule in favor of my client. He implied that he is not going to allow a homeowner to stay in their homes without paying their mortgage even if the bank screwed up. When I asked to read the appellate opinions into the record regarding the paragraph 22 defense, his response was basically that he did not care about the letter they sent and the fact that they filed a foreclosure action alone is good enough for him.

 

At that point I asked the judge to respect my client’s due process rights and pointed out that he was ignoring appellate cases from around the state. At that point he turned to the bank’s lawyer and said “I guess I better let Benjamin Cordozo III ask some questions”. I took this as a personal attack on me, so I asked the judge to recuse himself because by making that statement he showed that he could not be fair to me or my client. He then said that I should take it as a compliment, but he clearly did not mean it as a compliment. He meant to insult me in my opinion. I said that not only was it not a compliment, but I believes that the court intended to slight me in the middle of trial in front of a courtroom full of people. He was not too pleased at this point that I was standing up to him. I started to hand write a motion to recuse him on a piece of yellow notebook paper when he then said that he would recuse himself.

 

Afterwards when the court reporter started to get up, he made a number of personal attacks on me. Fortunately, the court reporter got back in her seat and got the personal attacks on the record (hopefully, I am waiting for the transcript). At one point he even said I would have a “short and unhappy career”. I am not sure if that was meant to be a threat or not. Well, Your Honor, I have been practicing law for over thirteen years and, thank the Almighty above, my career has been extremely successful because I work hard, I fight for my clients, and I never roll over and play dead.

In the thousands of cases I have handled, I do not recall ever asking a judge to disqualify themselves, but what is going on in Miami-Dade county before certain judges is a travesty of justice. I see homeowner after homeowner losing their homes every day without regard to due process of law. I even saw Judge Alan Schwartz force a case to trial when the homeowner had a Motion to Dismiss pending that had not been ruled on yet. So, the homeowner did not even get to file any affirmative defenses! The case was not at issue and it was CLEALRLY error to force the case to trial. Of the 40 or so cases set for trial today, my client was the only one who walked out of their without a sale date, except for a couple of cases where the bank failed to show up.

 

Miami-Dade county is just setting hundreds of foreclosure cases for trial at a time without regard to whether any attorney is available or ready. I think this is a problem and shows that in Miami-Dade county, they are just interested in plowing through foreclosures, not administering justice and due process. I am an experienced trial attorney and I will try foreclosure cases all day long because I love fighting for my clients. However, at least give the homeowners a fair shake and rule in their favor when appropriate.

 

Read the recusal order here.

Foreclosure Defense in Miami-Dade

Posted on December 18th, 2012 by Mark Stopa

I don’t know Matthew Bavaro, a fellow foreclosure defense attorney who practices in Miami. However, the story he posted on his blog today struck a cord with me, as it’s eerily similar to an experience I had in Miami a few weeks ago. At this point, it’s time – perhaps past time – that I shared my experience and voiced my concerns.

I had a trial scheduled in Miami, and when I arrived in court, it was apparent that dozens of other trials had all been set for the same time, before the same judge. While it’s never ideal to have to sit around and wait for your case to be called, it gave me the chance to watch other cases. Wow, what a nightmare. As each trial started, the judge made an unsolicited “offer” to defense counsel of a 120-day sale date, advising the defendant that if he/she did not take the deal, the “offer” would be off the table after the trial. That was the judge’s routine procedure – without hearing any evidence, or knowing anything about the facts of the case, the judge was essentially telling the homeowner “you better consent to judgment and accept a sale date in 120 days or I’m going to rule against you and set an earlier sale date.”

Punishing homeowners for going to trial. Wow. Just … wow. That alone is nuts. Candidly, I told that story to a local judge (not a fellow defense attorney – a local JUDGE), and he couldn’t believe it. There is no circumstance – none – where a judge should be taking it upon himself to tell a defense attorney that he is going to lose at trial and he should accept the judge’s deal, and that’s precisely what this judge was doing.

Can you imagine this in any other context? How about a criminal case … judge tells the defendant “you better accept this plea, as if you go to trial, I’m going to rule against you and impose a harsher sentence.” Totally nuts.

Anyway, it only got worse from there. As the “trials” proceeded, they weren’t trials at all. Nobody even sat at counsel table. Instead, the judge forced everyone to stand, right in front of the bench, for the trial. Clearly, the judge wasn’t intending that the “trials” last very long, not even allowing the homeowners or their lawyers to sit down.

As the trials went forward, to my amazement, it was typically not the plaintiffs’ attorneys who were asking the questions, but the judge himself! Yes, instead of forcing the plaintiffs’ lawyer to question the witnesses and prosecute the cases, the judge took it upon himself to prosecute the cases from the bench. That didn’t just happen once or twice, either – it was the judge’s routine.

The combination of what I observed – the judge trying to coerce defendants into settling, then prosecuting the cases for the plaintiffs – convinced me that I could not get a fair trial. So when my case was called, I moved to disqualify the judge.

Once he saw my case was going to be contested, the judge immediately pushed my case to the end of the docket. Hence, I kept watching the same broken record, one “trial” after another.

Finally, it got to my turn. Before the “trial” started, I finished my motion to disqualify the judge. I explained in detail the facts set forth above and how they caused me a well-reasoned fear that the judge could not be fair and impartial. Motion denied.

Then I moved to continue the trial so I could file a written motion to disqualify. Motion denied.

Then I moved for a stay pending appeal, as I was entitled to have the appellate court rule on whether the judge could preside on the case before the trial proceeded. Motion denied.

Then, before the trial began, I argued the plaintiff should not be allowed to introduce certain exhibits into evidence because plaintiff failed to provide copies to me before trial, as the court had ordered. The judge asked the plaintiff if that was true and counsel admitted it was. The judge asked if counsel had an excuse and he had none. The plaintiff was stuck – they violated an order and failed to provide me documents that I was entitled to receive before trial. But instead of punishing or penalizing the plaintiff, the judge ordered the trial was continued so plaintiff could provide me the documents.

I immediately interjected, telling the judge I did not ask for a continuance. The judge seemed surprised, asking me what I thought the remedy should be. I explained that the trial should proceed, but the plaintiff should not get to use the exhibits it failed to provide to me. That would mean, of course, that the plaintiff could not prove its case (and that I would win at trial), and the judge made it clear that wasn’t an option. So the judge again ruled the trial was continued.

How frustrating. The plaintiff screwed up, but I was being forced to come back again on a different day (from Tampa). So I explained how I had traveled to the trial from Tampa, and that I was prepared, so if I had to come again because the plaintiff screwed up, then I should get fees for having to do so. Motion denied (technically, deferred ruling until after the case was over, but basically denied).

These are the facts, as they transpired, as they would appear on a transcript. What the transcript won’t reflect, however, is the indescribably nasty way the judge treated me. The hostility of his tone. The anger in his voice. HOW DARE I come into his court and ask for – no, insist upon! – due process in a foreclosure case. The hostility was so apparent, I felt compelled to say, as the trial was ending “let the record reflect that the judge is staring at me with an incredibly nasty stare,” or words to that effect.

At that point, the judge was truly irate, inviting plaintiff’s counsel to comment about the judge’s demeanor. That prompted me, of course, to ask why the judge was questioning the factual basis of my motion to disqualify him. Then the judge smiled at me, waved, and said “have a nice trip back to Tampa, counselor,” in the most condescending tone I’ve ever heard – not just in a courtroom, but ever.

Read Matthew Bavaro’s post. This isn’t about me, and it’s not about Mr. Bavaro. This is about a court system that is repeatedly and systematically causing experienced, reasonable attorneys to believe there is nothing close to due process or fair trials transpiring in foreclosure cases in Miami right now. Perhaps most alarming is that the judge with whom I had my bad experience was NOT the judge before whom Mr. Bavaro had his. In other words, the issues in Miami aren’t limited to one judge – multiple judges are causing these concerns.

I get that the judges wear the robes and get to make the rulings. They have the authority, and no matter how much I disagree with the rulings, they have to be respected. I get that. And I’m not suggesting that anyone not respect the judges and not follow their rulings. However, when the judges don’t follow the law, and act in ways that make it clear they aren’t comporting with requirements of due process, it’s up to us, as advocates, to do whatever possible – within the law and professional ethics – to compel them to do so. We aren’t doormats – we’re advocates. Even when it’s uncomfortable, we have to act as advocates for our clients.

I left Miami that day with a continuance. In virtually every other case, the Plaintiff got a foreclosure judgment, often with little or no opposition. I talked to several other defense attorneys about the process, and though most shared my concerns, most of them were afraid to say anything or do anything about it (for fear of upsetting the judge). I’m sorry, but being a doormat isn’t the answer.

From what I understand, the senior judges in foreclosure cases get paid $300/day. I’d very much like to think that the Miami judges aren’t rushing through trials in this manner because they’re trying to get through the work day faster. Whatever the motive, however, it’s time – probably past time – that defense attorneys act as advocates and help the judges understand that the processes being described by Mr. Bavaro and myself are wrong.

Wrongful Foreclosure Hits Cash Short-Sale Buyers Too: What? Ask Bank of America!

SERVICES YOU NEED

“Here is a simpler explanation: the financial services industry is throwing more paper at the system than it can handle. So they are getting away with “representations” rather than solid evidence and proof. If Judges would require at least a copy of the title report, this case would not have occurred — at least not in its current form. Of course THAT requirement would mean that they were looking at the facts, the chain of title and other things that borrowers and their attorneys have been screaming about for years. And the self-serving false affidavits would be tested by actual requirements of proof rather than the current presumptions that Judges are using to clear their calendars.”

EDITOR’S COMMENT: It’s really very simple. This case is not a “mistake”, it is a fatal flaw in the country’s judicial system and a fatal flaw in the country’s property title system. We can kick the can down the road or deal with it.

If this case does not prove to Fort Lauderdale lawyers that there is gold in these wrongful foreclosures (which is virtually every single foreclosure that has ever been started or concluded in the last 9 years) then shame on them for depriving their families of the  riches and luxuries that the owners of the foreclosure mills currently under criminal investigation have enjoyed from their yachts, jets and other perks. Let me put it this way, lawyers, would you rather make $10,000 from a PI case or $100,000 from each wrongful foreclosure case? Do I need to draw you a picture?

This man paid cash and bought the house on a short-sale. The satisfaction of mortgage was recorded and ignored because it is less expensive to use a credit report than to pull down the traditional title report before foreclosure. The satisfaction was a nullity anyway since the party who signed it had no authority to do so and the company for whom the satisfaction of mortgage was signed was not the mortgagee. But the deed was valid transferring title to the new owner. THIS IS WHY YOU NEED the COMBO TITLE AND SECURITIZATION ANALYSIS 6 MONTH SUBSCRIPTION INCLUDES MEMBERSHIP.

So BOA through its brand new BAC (after acquiring Countrywide) forecloses on the house as though the OLD OWNER still owned it and as if the mortgage was a valid encumbrance, and as if the note was evidence of an obligation that was outstanding. They even submitted the same tired false affidavits that caused GMAC to suspend foreclosures.

It is obvious but needs to be stated that ANYONE in the law firm and any person who signed papers in connection with the mortgage that was foreclosed had no personal knowledge of anything because if they did they would have known that the house was sold for cash and that there was no mortgage, even on paper. It is even more obvious that nobody is actually doing their job — not the servicers, not the foreclosure mills, not even the Judges. If they did, there wouldn’t be any foreclosures. But then the billions being made on the new “industry” of foreclosures would stop and that would make some very wealthy people unhappy — especially if they now have to give that back as damages for wrongful foreclosure.

Here is the rub. The old owner does not own it anymore because the old owner signed a deed. But the original mortgage of record is clouded because it is still there and nobody with authority has signed anything to remove it. So now the new owner, who paid cash, must file a quiet title action and maybe a slander of title action, wrongful foreclosure action etc for damages, all because in the magic world of “securitization” the paper doesn’t move, the loan is not securitized, the pool doesn’t own it, the loan was table funded, and there was no valid encumbrance, even though the mortgage was recorded.

Here is a simpler explanation: the financial services industry is throwing more paper at the system than it can handle. So they are getting away with “representations” rather than solid evidence and proof. If Judges would require at least a copy of the title report, this case would not have occurred — at least not in its current form. Of course THAT requirement would mean that they were looking at the facts, the chain of title and other things that borrowers and their attorneys have been screaming about for years. And the self-serving false affidavits would be tested by actual requirements of proof rather than the current presumptions that Judges are using to clear their calendars.

see Man Pays Cash, BOA forecloses and Sells the Property

Foreclosure Wave Hits Cash Buyers, Too

with 29 comments

By James Kwak

Since most of you probably read Calculated Risk, you’ve probably seen the Sun Sentinel story of the man in Florida who paid cash for a house–and still lost it in a foreclosure. Not only that, but he bought the house in a short sale in December 2009, the foreclosure sale happened in July 2010, and only then did he learn about the foreclosure proceeding.

Even after that,

“Grodensky said he spent months trying to figure out what happened, but said his questions to Bank of America and to the law firm Florida Default Law Group that handled the foreclosure have not been answered. Florida Default Law Group could not be reached for comment, despite several attempts by phone and e-mail. . . .

“It wasn’t until last week, when Grodensky brought his problem to the attention of the Sun Sentinel, that it began to be resolved.”

Bank of America now says it will correct the error “at its own expense.” How gracious of them.

If the legal system simply allows Bank of America to correct errors, at cost and with ordinary damages, after they happen, this type of abuse will only get worse. There’s obviously no incentive for banks not to make mistakes, and as a result they will behave as aggressively as possible at every opportunity possible. Yes, this was probably incompetence, not malice, on the part of the bank. But if you don’t force companies to pay for the consequences of their incompetence, they will remain willfully incompetent, and the end result will be the same.

South Florida Sun-Sentinel.com

Lauderdale man’s home sold out from under him in foreclosure mistake

By Harriet Johnson Brackey, Sun Sentinel

2:15 PM EDT, September 23, 2010

When Jason Grodensky bought his modest Fort Lauderdale home in December, he paid cash. But seven months later, he was surprised to learn that Bank of America had foreclosed on the house, even though Grodensky did not have a mortgage.

Grodensky knew nothing about the foreclosure until July, when he learned that the title to his home had been transferred to a government-backed lender. “I feel like I’m hanging in the wind and I’m scared to death,” said Grodensky. “How did some attorney put through a foreclosure illegally?”

Bank of America has acknowledged the error and will correct it at its own expense, said spokeswoman Jumana Bauwens.

Grodensky’s story and other tales of foreclosure mistakes started popping up recently across South Florida. This week, GMAC Mortgage, one of the nation’s largest mortgage servicers and a major mortgage lender, told real estate agents to stop evicting residents and suspend sales of properties that had been taken from homeowners in foreclosure. The company said it might have to “correct” some of its foreclosures, but was not halting those in process.

In Florida courts, which have been swamped with foreclosure cases for several years, mistakes “happen all the time,” said foreclosure defense attorney Matt Weidner in St. Petersburg. “It’s just not getting reported.”

And the legal efforts required to resolve a foreclosure mistake are complicated. “Unwrapping it is like unwrapping Fort Knox,” said Carol Asbury, a Fort Lauderdale foreclosure attorney. “It’s very difficult.”

The process is under increasing scrutiny, as Florida’s court system struggles with the mountain of cases that have resulted from the housing crisis.

Grodensky said he spent months trying to figure out what happened but said his questions to Bank of America and to the law firm Florida Default Law Group that handled the foreclosure have not been answered. Florida Default Law Group could not be reached for comment, despite several attempts by phone and e-mail. Grodensky said he has filed a claim with his title insurance company, but that, too, has not resulted in any action.

It wasn’t until last week, when Grodensky brought his problem to the attention of the Sun Sentinel, that it began to be resolved.

“It looks like it was a mistake in communication between us and the attorneys handling the foreclosure,” said Bauwens.

Court records show Countrywide Home Loans filed a foreclosure case in Broward County civil court against the former owner of the home on Southwest 14th Street in 2008. Bank of America took over Countrywide at the end of that year.

The following year, Grodensky and his father Steven bought the house for cash as an investment property. Jason Grodensky’s brother Kenny Sloan lives in the house now. They negotiated a short sale, which means the lender agreed to accept less than the mortgage amount. Documents show the sale proceeds were wired to Bank of America. The sale was recorded in December 2009 at the Broward County Property Appraiser’s Office.

But in court, the foreclosure case continued, the records show. There was a motion to dismiss the case in July, followed the next day by a motion to re-open it. A court-ordered foreclosure sale took place July 15. The property appraiser’s office recorded the transfer of the title to Fannie Mae the same day.

Bauwens said the lender would go back to court to rescind the foreclosure sale.

Broward Chief Judge Victor Tobin, who set up the county court’s foreclosure system, said this is the first he’s heard of this type of mistake. “From the court’s point of view we have no way of knowing that someone sells a house unless they tell us,” said Tobin. “The bank would first have to tell the lawyers and the lawyers would presumably ask the court for an order dismissing the case.”

Tobin said the court system is under pressure to clear up its foreclosure backlog. This year, the state court system pumped $6 million into the effort, hiring more temporary judges and staffers.

Some say there’s too much effort aimed at simply disposing of the cases.

“The evidence doesn’t matter, the proof doesn’t matter, due process doesn’t matter,” said Asbury, the attorney. “The only thing that matters is that they get rid of these cases.”

Mindy Watson-Cintron of Century 21 Tenace Realty said she was unable to stop a foreclosure even though she had a willing buyer for a Coral Springs home last summer. Watson-Cintron had a letter from GMAC Mortgage, agreeing to sell the house in a short sale. The letter indicates the deal would be accepted through Aug. 20.

Watson-Cintron said she called, pleaded and even spent three hours one day in the lobby of the law offices of David Stern in Plantation trying to get someone to agree to put the foreclosure on hold. Stern’s office is one of the nation’s largest foreclosure firms and, Watson-Citron said, represented GMAC in the foreclosure case.

But the foreclosure continued. The lender took back the home and now has it listed for sale — at a lower price than Watson-Cintron’s buyer offered. “The bank’s not talking to the attorneys and the attorneys are not talking to the courts,” she said.

Stern could not be reached for comment despite several attempts by phone and e-mail to his office. A spokesman for GMAC Mortgage promised to look into the case.

Florida Attorney General Bill McCollum is investigating Stern’s firm, Florida Legal Default Group, based in Tampa, the Law Offices of Marshall C. Watson in Fort Lauderdale and Shapiro & Fishman, which has offices in Boca Raton. Officials have said the investigation centers on whether foreclosure documents submitted by these firms were false, misleading or inaccurate.

In announcing its decision this week to halt evictions and suspend sales in foreclosure cases, GMAC cited a deposition by Jeffrey Stephan in a Palm Beach foreclosure case in which Stephan said he did not verify all the documents and did not sign them all in the presence of a notary. Stephan said he signed as many as 10,000 documents a month.

Some foreclosure defense attorneys have questioned whether similar practices involve other lenders as they push huge numbers of foreclosures through the courts. In one South Florida foreclosure case, Chase Home Finance executive Beth Cottrell said in a deposition in May that her team of eight supervisors signs 18,000 documents a month. Chase’s spokesperson did not comment.

Harriet Johnson Brackey can be reached at hjbrackey@SunSentinel.com or 954-356-4614.

Writ of Mandamus: The Right Procedure

submitted by Frank D’Anna

Writ of Mandate 2 Frank D’Anna

COMMENT: I don’t know if Frank got help, but however he did it, this is a fine piece of work. He obviously understands that if you want to take an appeal, you must state a reason that the trial court erred. If you want to win it, you better come up with a procedural issue that is compelling. Most appeals fail. The reason is that the Appellant wants the appellate court to say the Judge was wrong on the facts. They don’t do that except in the rarest of cases, so don’t bother.

The best appeal is to be able to say and show IN THE COURT RECORD that you didn’t get your day in court, which is to say that the trial judge refused to hear your case on the merits. Any other appeal will get “Per Curium, Affirmed” without comment.

The second best appeal is to imply that the trial judge was tone deaf and ruled based upon presumptions he wasn’t allowed to make. D’Anna’s appeal is a combination of the the two approaches. They both amount to the same thing: you were not heard on the merits and the trial judge prejudged the case based upon incorrect presumptions.

Speaking in legalese this means that the trial judge presumed that YOU had the burden of proof and allowed your opposition, over your objection, to introduce information that was not authenticated, verified or given proper foundation to be taken into evidence. In many cases there is no evidentiary hearing. Your case is a denial of the allegations of the oppositions whether they have filed (judicial states) or they haven’t filed them (Non-judicial states).

The mistake repeatedly made in the trial court is acceptance by the borrower that the borrower has some burden of proof regarding the standing of the opposing party, whether the opposing party is a real party in interest, and whether the note was properly assigned or ever made it into the “Trust.”

This is just plain wrong: There is only party actually seeking affirmative relief — the one who wants to enforce the note and foreclose on the property. The party seeking affirmative relief is the ALWAYS charged with pleading a case upon which relief could be granted and ALWAYS required to prove each and every allegation. The allegations and the proof must line up with the elements of their cause of action as stated by statute, the rules of civil procedure and previous common law decisions.

In non-judicial states these errors are magnified. Because the law is universally misapplied, a party can foreclose through power of sale even if they would have no right to foreclose judicially. That is not the law and if it was the law it would be unconstitutional.

  • The fact that the forecloser ignores the basic elements of law does not shift the burden of pleading or the burden of proof onto the borrower.
  • The fact that the borrower/debtor must bring an action seeking injunction or restraining order to stop the non-judicial sale does not change the burden of pleading or the burden of proof.
  • Once the denial or objection is registered in any fashion, the Trustee in a non-judicial state and the mortgagee in a judicial state MUST, under all conditions, plead and prove their case in a court of law.
  • Non-judicial election is simply not available.

BUT HERE’S THE RUB: IF YOU DON’T OBJECT TO WHAT THE COURT IS DOING, YOUR OPPOSITION IS GOING TO ARGUE, MANY TIMES SUCCESSFULLY THAT YOU WAIVED THAT ARGUMENT. BUT JURISDICTIONAL ISSUES CAN BE HEARD AT ANY TIME EVEN IF THEY ARE FIRST BROUGHT UP ON APPEAL.

False recovery?

Doesn’t anyone see that if “financial services” accounts for 40% of our GDP that it means we are kidding ourselves? THAT only means we are trading from the left pocket into the right pocket into the back pocket and around again — and counting it as GDP. Our real GDP is far lower than anything reported.
Editor’s Note: The U.S. economy depends largely on the the state of the housing market. The housing market is a large factor in determining consumer confidence and consumer spending. Consumer spending accounts for the vast majority of transactions coutned in our gross domestic product, although health-care is certainly on track to over take consumer spending within 5-10 years.
Look around you. Have you noticed that home building is far from dead. Even though millions are homes are vacant and millions more will be vacant, the building continues. Why? Who in their right mind would be building homes in a market like this where the supply of new and existing homes so vastly outstrips demand?
It can only be the result of increasing demand for what they are building — shoddier, lower cost housing.
That is because the housing market is like a glass bowl on the edge of a shaky table. You know it is going to fall (again). It cannot recover because there appears to be serious motivation in the private banking and building sectors to see the housing situation worsen. Just follow the money. Wall Street and builders are set to make a ton of money while the rest of us go down the tubes. Then economic indicators are all there for anyone to see. It’s about time that Mr. Obama abandons conciliation and adopts the arm twisting aggressive tactics of Lyndon Johnson.
It is unfair to compare Obama with FDR’s situation. By the time FDR came to office in 1933, the depression was already 4 years old and there were hardly any Republicans left. This time the crisis was handed to Obama in midstream and now the republicans are working hard to pin the recession on Obama in the minds of gullible citizens who don’t have the time to inquire or research any of these issues.
I’m no fan of Johnson — but when it came to health care and civil rights he pushed it through over the vehement objections of vested special interests.And for all their venting, I don’t see anyone turning in their medicare card and very few people are left who want to go back to when women couldn’t vote (still less than 100 years ago) and minority races were prevented from voting or participating in the economy.
Each day we wait the situation gets worse and harder to reverse. Each foreclosure and each eviction, each time a homeowner leaves the keys on the kitchen counter in search of alternative, less expensive housing, the banks are laughing all the way off-shore where they are parking trillions of dollars in false untaxed profits, threatening the stability of our currency, the viability of our government financial structure and the confidence in our ability to actually start producing goods and services that people want.
We keep moving in the direction of vapor. False demand and dubious supply of things that nobody should be required to buy, much less need or want. Somehow, whether it is the tea party, the coffee party or something else must gain traction to break the death grip big business and Wall Street has on our government.
Doesn’t anyone see that if “financial services” accounts for 40% of our GDP that it means we are kidding ourselves? THAT only means we are trading from the left pocket into the right pocket into the back pocket and around again — and counting it as GDP. Our real GDP is far lower than anything reported.

Right now, our only hope is to convince one Judge at a time to listen to the facts and decide cases on the merits instead of presumptions.
March 3, 2010
Economic Scene

In Tracking Recovery, Jagged Lines

Could the economy be at risk of a double dip?

We’re now in the midst of the worst run of economic news in almost a year. Home sales have dropped. So has consumer confidence. Stocks peaked on Jan. 19.

This Friday may well bring the darkest piece of news yet, at least on the surface. Forecasters are predicting that the Labor Department will report that job losses accelerated in February, perhaps back above 100,000. The main reason will be the temporary hit from the big snowstorms last month. Yet there is reason to wonder if the economy also has bigger problems.

The weekly data on jobless benefits are narrower and less consistent than the monthly jobs report, but they have the advantage of being more current. From early January to late February, the number of workers filing new claims for jobless benefits rose 15 percent. Over the previous nine months, this number was generally falling.

Economies rarely move in a straight line, and — as the better-than-expected numbers on Tuesday on vehicle sales suggested — the recent run of bad data is probably overstating the troubles. But whatever you thought at the start of the year about the recovery — strong, moderate, fragile — you probably need to be more pessimistic today.

“The strength of data we saw at the end of last year exaggerated the strength of the underlying economy,” Richard Berner of Morgan Stanley, says. “And now we’re seeing some pullback.”

This is especially troubling because the economy is still such a long way from being healthy. Lawrence Katz, the Harvard labor economist, estimates that 10.6 million jobs would need to materialize immediately to return the job market to its condition when the Great Recession began. For it to get there four years from now, the economy would have to add 316,000 jobs a month. That pace would be faster than in any four-year stretch of the 1990s boom.

The economy’s biggest problem has not changed. When bubbles pop, they wreak enormous, lasting damage. Credit stays hard to get for years because banks need to rebuild their balance sheets. Families and businesses, whose net worth isn’t what they thought it was, have debts to pay off.

Over the last two years, households have been paying down their debts at a fairly good pace. But they aren’t yet close to being finished.

The average household still has debt that eats up roughly 17.5 percent of its disposable income — in mortgage payments, minimum credit card payments and the like. That’s down from a peak of 18.9 percent in 2008. It is still above the 1980-95 average of about 16.6 percent, according to the Federal Reserve. So debt payments will continue to hold down spending in the months ahead.

The economy did so well late last year in large part because companies began building up inventories they had whittled when they cut production during the recession. What worries some forecasters is that this buildup won’t last. Consumer spending, they say, will remain too weak to get companies to keep increasing production and to begin adding workers. “Not too long from now,” says Joshua Shapiro of MFR, a research firm in New York, “you’re going to need other demand to kick in.”

The second problem is that the stimulus program and the Fed’s emergency programs are in the early stages of slowing down.

These programs have done tremendous good, as I’ve written before. The bubbles in housing and stocks over the last decade were far larger than an average bubble, and yet the resulting bust is on pace to be shorter and less severe than the typical one in the wake of a financial crisis. That’s not an accident. It’s a result of an incredibly aggressive response by the Fed, Congress, the Bush administration and the Obama administration.

Just consider home sales. The stimulus bill last year included a tax credit for first-time home buyers that originally expired on Dec. 1. Like clockwork, home sales fell 16 percent in December. From March to November, sales rose 36 percent.

The credit has since been extended, but if you combine the other fading parts of the stimulus with household debt burdens, you can see why some economists are concerned. Mr. Shapiro predicts monthly job growth will be only 50,000 to 75,000 by the end of this year. To keep up with population growth — to keep unemployment from rising — the economy needs to add more than 100,000 jobs a month.

Recent events in Congress, however, have offered some cause for optimism. Last week, the Senate passed a small-bore $15 billion jobs bill, focused on road building and employer tax credits. But on Monday, Democratic leaders announced a proposal that would do more: a $150 billion bill to extend jobless benefits, Medicaid payments to states and some tax cuts.

Some of the extensions last through the end of the year, rather than for just a few months, as is typical. Senator Jack Reed, Democrat of Rhode Island, told me the bill was meant to prevent what he called the “Perils of Pauline” problem — referring to the silent movie serial that placed its heroine in repeated danger.

The most recent extension of jobless benefits expired on Sunday. The Senate voted Tuesday night to extend the benefits for 30 more days after Senator Jim Bunning, Republican of Kentucky, dropped his opposition to the measure.

If Congress passes a longer-term extension and adds some measures — like more aid to struggling states, maybe the single most effective form of stimulus — it can offset the winding down of other government programs. (Yes, these efforts to prop up the economy will have to end sometime soon, and debt reduction will have to begin. But the main historical lesson of financial crises is that governments are too timid and too quick to step back.)

It’s also possible that Mr. Shapiro and his fellow pessimists are being a bit too dire about the private sector. Inventories are still quite lean, and some restocking is likely to continue. Banks are becoming more willing to lend, Fed surveys show. Strong growth in China and other emerging markets will help American exporters like General Motors and Cargill. To my mind, these forces make a true double dip unlikely.

Still, the jobs number on Friday will be ugly. Macroeconomic Advisers, a research firm, estimates that the snow kept 150,000 to 220,000 people off a payroll when the government conducted its jobs survey in early February. But most of those jobs will reappear in March — the month when many economists think job growth will, at long last, resume.

Here’s the thing, though. Even the optimists are not very optimistic. Morgan Stanley expects average monthly job growth of just 110,000 this year. The great jobs deficit — 10.6 million and counting — will be with us for years.

So no matter when the recent run of bad news comes to an end, the economy is still going to need help.

E-mail: leonhardt@nytimes.com

Florida 2d DCA Gets It — Rules of Evidence Prevail!

See 2D08-3553 Fla 2d DCA BAC v Ginelle Jean-Jacques

This is the reason why I am offering the workshop on Expert Witnesses, i.e. — to highlight the rules of evidence, to coach those who would present opinions as evidence and to hone the skills of the litigator. While apparently narrow in its scope and reasoning, this decision nails down the issue of evidence versus assumptions or presumptions with finality. The case clearly establishes that merely filing papers with “argument” about what they are or what they mean is insufficient to establish anything at all.

The lesson here is not only that you can beat the pretender lenders, but also that YOU must conform to the rules of evidence, establishing a proper foundation and not try to finesse the court. And in non-judicial states the argument is plain: if they could not prevail in a judicial action, why should the court rubber stamp their non-judicial actions?

U.S. Bank filed documents that named other parties along with defective assignments that were not executed in recordable form. They tried to finesse the court by filing “original Note and Mortgage”. The Trial Court granted Summary Judgment, fooled by the appearance of proper documentation and the appellate court said that was an error and reversed the trial court’s summary final judgment.

Notable excerpts follow:

the space for the name of the assignee on this “assignment” was blank, and the “assignment” was neither signed nor notarized. Further, U.S. Bank did not attach or file any document that would authenticate this “assignment” or otherwise render it admissible into evidence.

U.S. Bank failed to meet this burden because the record before the trial court reflected a genuine issue of material fact as to U.S. Bank’s standing to foreclose the mortgage at issue. The proper party with standing to foreclose a note and/or mortgage is the holder of the note and mortgage or the holder’s representative. See Mortgage Elec. Registration Sys., Inc. v. Azize, 965 So. 2d 151, 153 (Fla. 2d DCA 2007); Troupe v. Redner, 652 So. 2d 394, 395-96 (Fla. 2d DCA 1995); see also Philogene v. ABN Amro Mortgage Group, Inc., 948 So. 2d 45, 46 (Fla. 4th DCA 2006)

When exhibits are attached to a complaint, the contents of the exhibits control over the allegations of the complaint. See, e.g., Hunt Ridge at Tall Pines, Inc. v. Hall, 766 So. 2d 399, 401 (Fla. 2d DCA 2000) (“Where complaint allegations are contradicted by exhibits attached to the complaint, the plain meaning of the exhibits control[s] and may be the basis for a motion to dismiss.”); Blue Supply Corp. v. Novos Electro Mech., Inc., 990 So.2d 1157, 1159 (Fla. 3d DCA 2008); Harry Pepper & Assocs., Inc. v. Lasseter, 247 So. 2d 736, 736-37 (Fla. 3d DCA 1971) (holding that when there is an inconsistency between the allegations of material fact in a complaint and attachments to the complaint, the differing allegations “have the effect of neutralizing each allegation as against the other, thus rendering the pleading objectionable”).

U.S. Bank was required to establish, through admissible evidence, that it held the note and mortgage and so had standing to foreclose the mortgage before it would be entitled to summary judgment in its favor. Whether U.S. Bank did so through evidence of a valid assignment, proof of purchase of the debt, or evidence of an effective transfer, it was nevertheless required to prove that it validly held the note and mortgage it sought to foreclose. See Booker v. Sarasota, Inc., 707 So. 2d 886, 889 (Fla. 1st DCA 1998) (holding that the trial court, when considering a motion for summary judgment in an action on a promissory note, was not permitted to simply assume that the plaintiff was the holder of the note in the absence of record evidence of such).

The incomplete, unsigned, and unauthenticated assignment attached as an exhibit to U.S. Bank’s response to BAC’s motion to dismiss did not constitute admissible evidence establishing U.S. Bank’s standing to foreclose the note and mortgage, and U.S. Bank submitted no other evidence to establish that it was the proper holder of the note and/or mortgage. Essentially, U.S. Bank’s argument in favor of affirmance rests on two assumptions: a) that a valid assignment or transfer of the note and mortgage exists, and b) that a valid defense to this action does not. However, summary judgment is appropriate only upon record proof—not assumptions.

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