Stop Referring to Defaults as Something Real

Referring to the default as real, but with an explanation of how it is subject to rationalization or argument, completely undermines your argument that they have no  right to be in court, to collect, to issue notices or initiate foreclosure. 

…when you refer to the default, you should refer to it as a false claim of default because at no time was Deutsch or any trust or any group of investors ever receiving payments from you as borrower. Nor did they have any contractual right to expect such payments from you as borrower. So Deutsch didn’t suffer any default and neither did the investors who own certificates that are not ownership interests in the debt, note or mortgage. And Deutsch won’t get any proceeds if the property is subjected to a foreclosure sale.

Questions to the servicer about how, when and where they made payments to Deutsch, or Deutsch as Trustee, or any trust, or any group of investors holding certificates will reveal their absence from the money trail. No such payments exist nor will they ever exist.

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 or check us out on Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
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.
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).
I take issue with the practice of referring to “the default.” When someone refuses or stops paying another person that does not automatically mean that a default exists. A default only exists if the the payment was due to a specifically identified party and they didn’t get it. Failure to pay a servicer is not a default. Failure to pay a servicer who is sending your payments to a creditor IS a default.
Since the fundamental defense for borrowers that wins cases is that the claimant has no right to be in court, it seems wrong to refer to”the default.” It should be “the claimed default.”
If your refusal to make payment was in fact a default as to Deutsch as Trustee of a real trust or as authorized representative of the certificate holders (they never make that clear), then all of your arguments come off as technical arguments to get out of a legitimate debt. You will lose.
On the other hand if your position (i.e., your denial and affirmative defenses) is that Deutsch is not a party on its own behalf and that it is being named by attorneys as being in a representative capacity for (a) a trust that does not exist or (b) for holder of certificates that do not convey title to the debt, note or mortgage and are specifically disclaimed, then you have a coherent narrative for your defense.
And if you further that argument by asserting that Deutsch has never received any payments and does not receive the proceeds of foreclosure on its own behalf nor as trustee for any trust or group of investors and will not receive those proceeds in this case then you push the knife in deeper.
So if Deutsch is not appearing on its own behalf and the parties that the lawyers say it is representing either don’t exist or are not identified, then the action is actually being filed in the name of Deutsch but for and on behalf of some other unidentified party who may or may not have any right to payment.
What is certain is that Deutsch is being represented as the owner of the loan when it is not.  The owner of a loan receives payments. Deutsch never receives payment from anyone and the investors never receive payment from the borrowers. If they did the servicer would have records of that. 
So when you refer to the default, you should refer to it as a false claim of default because at no time was Deutsch or any trust or any group of investors ever receiving payments from the homeowner as borrower. Nor did they have any contractual right to expect such payments from you as borrower. So Deutsch didn’t suffer any default and neither did the investors who own certificates that are not ownership interests in the debt, note or mortgage. And Deutsch won’t get any proceeds if the property is subjected to a foreclosure sale. 
If Deutsch didn’t suffer any default it could not legally declare one. If the declaration of default was void, then there is no default declared. In fact, there is no default until a  creditor steps forward and says I own the debt that I paid for and I suffered a default here. But there is no such party/creditor because the investment bank who funded the origination or acquisition of the loan has long since sold its interest in the loan multiple times.
Thus when lawyers or as servicer or both sent notices of delinquency or default they did so knowing that the party on whose behalf they said they were sending those notices had not suffered any delinquency or default.
When homeowners refer to the default as real, but with an explanation of how it is subject to rationalization or argument, they completely undermine their argument that they have no  right to be in court, to collect, to issue notices or initiate foreclosure. 
And remember that the sole reason for foreclosures in which REMIC claims are present is not repayment, because that has occurred already. The sole reason is to maintain the illusion of securitization which is the cover for a PONZI scheme. The banks are seeking to protect “profits” they already have collected not to obtain repayment. That is why a “Master Servicer” is allowed to collect the proceeds of a foreclosure sale rather than anyone owning the debt.
Also remember that while it might be that investors could be construed as beneficiaries of a trust, if it existed, they actually are merely holders of uncertificated certificates in which they disclaim any interest in the debt, note or mortgage.  Hence  they have no claim, direct or indirect, against any individual borrower. 

PRACTICE NOTE: Don’t assert anything you cannot prove. Leave the burden of proof on the lawyers who have named an alleged claimant who they say or imply possesses a claim. Deny everything and force them to prove everything. Discovery should be aimed at revealing the gaps not facts that will prove some assertion about securitization in general. Judges don’t want to hear that.
Appropriate questions to ask in one form or another are as follows:
  1. Who is the Claimant/Plaintiff/Beneficiary?
  2. Who will receive the proceeds of foreclosure sale?
  3. Before the default, who received the proceeds of payment from the subject borrower? [They will  fight this tooth and nail]
  4. Did the trustee ever receive payments from the borrower?
  5. Does the trustee in this alleged trust have any contractual right to receive borrower payments?
  6. Do holders of certificates receive payments from the borrower through a servicer?

U.S. Sues UBS for Fraudulent Sales of RMBS But Still Manages to Get It Wrong

The bottom line is that the loans themselves were fatally defective in terms of the loan documents. The money was delivered but not by the named “lender” nor anyone in privity with the named lender. At all times nearly all of the loans were in actuality involuntary direct loans from investors who had no knowledge their money was being used to originate loans without any semblance of due diligence.

All the other parties were conduits and brokers for conduits. None of them were brokers for a plan of investment to which investors agreed. and all of them were based upon fraudulent inflated appraisals.

In equity, as I have repeatedly said, the debt, regardless of to whom it is owed, should be reduced by the excess appraisal amount, a fact that ought to be presumed when anyone attempts to bring an action in collection or foreclosure.

This is because the source of the loan, regardless of who it might be in actuality, assumed the risk of loss associated with affordability and most importantly the risk from a false inflated appraisal. Licensed appraisers warned congress as early as 2005 when 8,000 of them petitioned Congress to do something about them being forced to either bring in false appraisals or not get any work at all.

Contrary to popular myth there is no such responsibility for borrowers to figure out if they really can afford the loan or if the appraisal is accurate. That is the state of the law under the Truth in Lending Act. The “conventional wisdom” that home buyers and borrowers don’t need a lawyer or a financial adviser on the largest investment of their lives leaves a vacuum where consumers are entirely at the mercy of predatory and fraudulent operators like Wells Fargo, Bank of America, Citi, Chase, US Bank, Deutsch, and others.

“Don’t bother getting a lawyer. Save your money. They can’t change anything anyway.” That is the catch phrase used to make certain that the fraud being perpetrated on consumers will not be revealed until it is too late and the courts presume that the fraud never occurred (or that if it did occur, it’s somehow too late to complain about it).

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.


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).



Hat tip to Dan Edstrom

see United States vs UBS


So once again the Federal government sues a major bank for fraud and corruption causing “catastrophic” damages to investors and fails to mention any losses to homeowners. Piling the entire loss on the backs of homeowners is the third rail. Nobody touches that because of the erroneous perception that the rule of law is contrary to public policy. That may come as something as surprise to those of you who thought we were a nation of laws and not public policy decided behind closed doors.
The successful myth perpetrated by the banks is that since borrowers stopped paying the wrong people on their loan, that they should nevertheless  be held liable and lose their home to the wrong people because otherwise (a) borrowers would get a free house and (b) applying the rule of law would undermine the financial system. Both the premise and result are contrary to good sense and our existing laws. The courts generally twist themselves into pretzels to avoid the law and arrive at the public policy result rather than the legal one.
Everyone is willing to accept that the entire securitization process was a gigantic process to perpetrate fraud and, as some lawyers who resigned rather than draft securitization documents, part of a “criminal enterprise.” But somehow the victims are only investors who are still called “beneficiaries” even though it is well established that the trusts named in foreclosure lawsuits never participated in a single business transaction and were neither organized nor existing under the law of any jurisdiction, much less the owner of loans..
Once again the suit fails to state that the loans were at best problematic in the sense that transactions utilizing undisclosed third party money compromised the efficacy of the loan closing documents.

And once again it doesn’t say that the securitization plan itself was fraudulent in that the entities represented as owning the loans did not exist and/or did not own the loans. It also doesn’t say that the use of fraudulent inflated appraisals (a) hurt homeowner and and that therefore (b) UBS lured investors into an investment plan fraught with liabilities.

Nor does the new lawsuit say that investors were promised that their interests would be remote enough to avoid liability for lending violations and bankruptcies of the originators but in fact the money from investors was directly used in the loans and did not go through the alleged “Trusts” that were supposedly purchasing loan portfolios from aggregators who in fact had no interest in the loans and were merely conduits for a paper chain bearing no relationship to the money trail.
But it does hint at what the banks were doing. The review of the loans by UBS was simply a sampling and that sampling, was in fact a method of picking low hanging fruit to serve as benchmarks. From that false process of sampling, UBS hoped to avoid liability for mischaracterizing the real defects in the securitization process. In other words they were using their cherry-picked samples to describe the entire “loan portfolio” which in fact was neither owned nor conveyed to the special purpose vehicle (REMIC Trust) that was created (on paper only).
You may remember that in my seminar in Malibu in 2008, I described this process as covering a pile of dogshit with gold plating. In the end it is still almost entirely dogshit.
Thus we have revealed the unwillingness of Federal law enforcement to get to the real issue, which would in fact protect both investors and homeowners — the fraudulent nature of the loans themselves, the fraudulent nature of the so-called loan portfolios, and the fraudulent enforcement of documents that fraudulently named the wrong party as the lender and are fraudulently brought to courts on a mass basis for fraudulent enforcement that keeps adding to the pain  and anger of Americans who continue to suffer from the discard of the rule of law in favor of “public policy.”

How Servicers Engineer Defaults Using the Escrow Accounts, Forced Placed Insurance and False Projections

Servicers are creating the illusion of defaults by manipulating the escrow accounts even when no escrow account exists. So even where there is no agreement for the “lender” to maintain an escrow account, they will create one anyway and engineer circumstances to make it seem like a default occurred not just in the “escrow account” but in the accounting for principal and interest.



I have two cases involving this right now where I am attorney of record and several dozen where I am guiding lawyers and pro se litigants through the intricate process of showing that no reconciliation is possible between the payments actually made by the homeowner, the taxes that were paid, the insurance that was paid and who paid it or failed to pay it.

In one case in point, the servicer, as part of a modification required my client to fund the escrow in full with a lump sum payment, which they did. The “servicer” (BOA) failed to pay the insurance, which was then canceled and could not be reinstated without having an active policy in force.

My clients had to wait until forced placed insurance was established thus raising their total monthly PITI payment into the stratosphere, with BOA getting its usual kickback from BalBOA. Then my clients got regular insurance at a quarter of the premium that was charged to their account for forced placed insurance. Eventually BOA reconciled the “deficiency” without payment from my clients. But BOA continued to keep their account flagged as delinquent even though they had been paid in full for everything. Eventually BOA stopped accepting payments because the account was “late.” And then BOA filed suit to foreclose. Stay tuned on this one.

I have seen dozens of cases where the escrow is manipulated by either projecting taxes and insurance too high or projecting them too low. In the first case the homeowner instantly can’t afford the payments and in the second case they are suddenly hit with a demand for a large lump sum payment that most people can’t afford. Tens of thousands of homeowners have lost their homes this way even though they were completely current on their payment of interest and principal.

By the way these practices are illegal. But that hasn’t stopped the foreclosures.

Hat tip to Mark Chapin

Here is a more technical explanation for the accountants to ponder.

Re: Engineering default through leveraging projections and ignoring the law.

See Merger Rule

Leveraging the escrow disbursements through projections with assumptions for the future.

The Escrow low point projection makes assumptions into future periods and converts those to real time current cash requirements.

The escrow projection calculation assumes the projected disbursement of the inflated premiums of Force placed Insurance policies are repeated. That calculation incorporates that inflated projected payment into the Low Point Calculation for the Escrow Account by combining the projected with the actual disbursement. The projection is a phantom mirage at the time of the calculation which is converted into a real time cash requirement under the calculation employed by Citimortgage. A full payment of the actual escrow disbursement advance by the mortgagor or even more telling, the placement of mortgagor insurance would extinguish the reality of the base escrow advance. The basis for the calculation of the leveraged projection would not exist, but the real time billing based on the projection would remain.

The leveraged payment increase was in this case used to increase the monthly billing, from the previous monthly principal and interest billing for the note payment, by adding billing for the obligation suspended under the UCC 3 Merger Rule. The suspended obligation of escrow disbursements under the mortgage. The suspended obligation was maneuvered through engineering a default to a presentation as an unsuspended obligation.

The Engineered Default:

The new leveraged payment billing was then used as a measure, to compare regular payments of principal and interest that were maintaining the promissory note in a state of non-default, to make a decision to (1) to misapply payments, which should have been credited first to principal and interest as per TILA servicing requirements and the note itself. The misapplication created the illusion in the servicer records of partial payments, phantom escrow projections; and (2) then return the whole monthly principal and interest payments properly tendered as un-deposited and rejected payments. This action was necessary to further engineer the default by artificially creating the dishonor of the note itself. This action thereby was used by the servicer as a pretext to declare the entire loan: the note and merged, deferred obligation in default. to schedule CONSULT, leave message or make payments.

Big Banks Headed For Break-Up

“What policy makers are starting to realize is that the absence of prosecutions and regulatory action against these banks has produced a profound loss of confidence not only in the financial markets but in the leader of the financial markets (the United States) to control itself and its own participants in finance. It’s not just fair to enforce existing laws and regulations against the banks who so flagrantly violated them and nearly destroyed all the economies of the world, it’s the only practical thing to do.” — Neil F Garfield,
If you are seeking legal representation or other services call our Florida customer service number at 954-495-9867 (East Coast) and for the West coast the number remains 520-405-1688. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.
The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Comment: There is an old expression that says “At the end of the day, everybody knows everything.” The question of course is how long is the “day.” In this case the day for the bank appears to be about 10-12 years. The foibles of their masters, the conduct of their policies, and the arrogance of their behavior has led them into the position where the once unthinkable break-up of the bank oligopoly and their control, over our government is coming to a close.

The titans of Wall Street have thus far avoided criminal prosecution because of the misguided assumption — promulgated by Wall Street itself — that such prosecutions would destroy the economic systems all over the world (remember when Detroit arrogance reached its peak with “what’s good for GM is good for the country?”). But the Dallas Fed are joining the ranks of of once lone voices like Simon Johnson stating that Too Big to Fail is not a sustainable model and that it distorts the markets, the marketplace and our society.

It is virtually certain now that the mega banks are going to literally be cut down to size and that some form of Glass-Steagel will be revived. As that day nears, the images and facts pouring out onto the public and the danger to the American taxpayer facing deficits caused by the banks in part because they siphoned out the life-blood of liquidity from the American marketplace will overwhelm the last vestiges of resistance and the same lobbyists who were the king makers will be the kiss of death for re-election of any public official.

As they are cut down, the accounting and auditing will start and it will take years to complete. What will emerge is a pattern of theft, deceit, fraud, forgery, perjury and other crimes that are most easily seen in the residential foreclosures that now appear to be mostly illusions that have caused nightmare scenarios for millions of Americans and people in other countries. Those illusions though are still with us and they are still taken as real by many in all branches of government. The thought that the borrower should never have been foreclosed and that the amount demanded of them was wrong is not accepted yet. But it will be because of arithmetic.

Investment banks sold worthless bonds issued by empty creatures that existed only on paper without any assets, money or value of any kind. The banks then funded mortgages of increasingly obvious toxicity to people who might have been able to afford a normal mortgage or who couldn’t afford a mortgage at all but were assured by the banks that the deal was solid. Both investors and homeowners were taken to the cleaners. Neither of them has been addressed in any bailout or restitution.

It is the bailout or restitution to the investors and homeowners that is the key to rejuvenating our economy. Trust in the system and wealth in the middle class is the only historical reference point for a successful society. All the rest crumbled. As the banks are taken apart, the privilege of using “off-balance sheet” transactions will be revealed as a free pass to steal money from investors. The banks took the money from investors and used a large part of it to gamble. Then they covered their tracks with lies about the quality of loans whose nominal rates of interest were skyrocketing through previous laws against usury.

For those who worry about the deficit while at the same time remain loyal to their largest banking contributors, they are standing with one foot upon the other. They can’t move and eventually they will fall. The American public may not be filled with PhD economists, but they know theft when it is revealed and they know what should happen to the thief and the compatriots of the thief.

For the moment we are still rocketing along the path of assuming the home loans, student loans, credit cards, auto loans, furniture loans et al were valid loans wherein the lenders had a risk of loss and actually suffered a loss resulting from the non payment by the borrower. As the information spreads about what really happened with all consumer debt, housing included, the people will understand that their debts were paid off by the investment banks, the insurance, companies and the counterparties on hedge products like credit default swaps.

A creditor is entitled to be repaid the money loaned. But if they have been repaid, the fact that the borrower didn’t pay it does not create a fact pattern under which the current law allows the creditor to seek additional payment from the borrower when their receivable account is zero. Yet it is possible that the parties who paid off the debt might be entitled to contribution from the borrower — if they didn’t waive that right when they entered into the insurance or hedge contract with the investment banks. Even so, the mortgage lien would be eviscerated. And the debt open to discussion because the insurers and counterparties did in fact agree not to pursue any remedies against the borrowers. It’s all part of the cover-up so the transactions look like civil matters instead of criminal matters.

Thus far, we have allowed windfall after windfall to the banks who never had any risk of loss and who received federal bailouts, insurance, and proceeds of credit default swaps and multiple sales of the same loan — all without crediting the investors who advanced all the money that was used in the mortgage maelstrom.

The practical significance of this is simple: the money given to the banks went into a black hole and may never be seen again. The money given BACK to (restitution) investors will result in fixing at least partly the imbalance caused by the bank theft. It will also decrease the loss suffered by the lenders in the loans marked as home loans, auto loans, student loans etc. This in turn reduces the amount owed by the borrower. Their is no “reduction” of principal there is merely a “deduction” or “correction” to reflect payments received by the investors or their agents.

The practical significance of this is that money, wealth and income will be  channeled back to the those who are in the middle class or who belong there but for the trickery of the banks and the economy starts to hum a little better than before.

It all starts with abandoning the Too Big To Fail hypothesis. What policy makers are starting to realize is that the absence of prosecutions and regulatory action against these banks has produced a profound loss of confidence not only in the financial markets but in the leader of the financial markets to control itself and its own participants in finance. It’s not just fair to enforce existing laws and regulations against the banks who so flagrantly violated them and nearly destroyed all the economies of the world, it’s the only practical thing to do.

Big Banks Have a Big Problem

We The Taxpayers Are On The Hook For Mortgages, Student Loans, Banks

Documentary Co-Produced by Broker Exposes Foreclosure Devastation, Housing System Flaws, in Low-Income Hispanic Neighborhood of Phoenix

Housing advocates accuse Wells Fargo of damaging communities through foreclosures


Truth Coming Home to Roost: JPM Knew the Loans Were Bad

In a statement shortly after he sued JPMorgan Chase, Mr. Schneiderman [Attorney general, New York state] said the lawsuit was a template “for future actions against issuers of residential mortgage-backed securities that defrauded investors and cost millions of Americans their homes.”


What’s the Next Step? Consult with Neil Garfield

For assistance with presenting a case for wrongful foreclosure or to challenge whoever is taking your money every month, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, Tennessee, Georgia, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).


Editor’s Comment and Analysis: It’s been a long pull to get the real information about the misbehavior of the mega banks and their officers. But Schneiderman, Attorney general of the State of New York, is drilling down to where this really needs to go. And others, tired of receiving hollow assurances from the mega banks are suing — with specific knowledge and proof that is largely unavailable to borrowers — a good reason to watch these suits carefully.

Both internal emails and interviews have revealed that they repeatedly were warned by outside analysts of the perils of the mortgage lending process. The officers of JPM chose to change the reports to make them look more appealing to investors who gave up the pension money of their pensioners in exchange for what turns out to be bogus mortgage bonds issued by a non-existent or unfunded entity that never touched a dime of the investors’ money and never received ownership or backing from real loans with real security instruments (mortgages and deeds of trust).

A lawsuit filed by Dexia, a Belgian-French bank is being closely watched with justified trepidation as the onion gets pealed away. The fact that the officers of JPM and other mega banks were getting reports from outside analysts and took the trouble to change the reports and change the make-up of the bogus mortgage bonds leads inevitably to a single conclusion — the acts were intentional, they were not reckless mistakes, they weren’t gambling. They were committing fraud and stealing the pension money of investors and getting ready to become the largest landowners in the country through illegal, fraudulent, wrongful foreclosure actions that should have been fixed when TARP was first proposed.

The Dexia lawsuit focuses on JPM, WAMU and Bear Stearns, acquired by JPM with government help. The failure to provide bailout relief to homeowners at the same time sent the economy into a downward spiral. Had the Federal reserve and US Treasury department even ordered a spot check as to what was really happening, the “difficult” decisions in 2008 would have been averted completely.

Receivership and breakdown of the large banks would have produced a far more beneficial result to the financial system, and is still, in my opinion, inevitable. Ireland is doing it with their major bank as announced yesterday and other countries have done the same thing. Instead of the chaos and trouble that the banks have policy makers afraid of creating, those countries are coming out of the recession with much stronger numbers and a great deal more confidence in the marketplace.

The practice note here is that lawyers should look at the blatant lies the banks told to regulators, law enforcement and even each other. The question is obvious — if the banks were willing to lie to the big boys, what makes you think that ANYTHING at ground level for borrowers was anything but lies?  They went to their biggest customers and lied in their faces. They certainly did the same in creating the illusion of a real estate closing at ground level.

Lawyers should question everything and believe nothing. Normal presumptions and assumptions do not apply. Keep your eye on the money, who paid whom, and when and getting the proof of payment and proof of loss. You will find that no money exchanged hands except when the investors put up money for the bonds that were supposed to be mortgage backed, and the money that was sent down the pipe via wire transfer to the closing agent under circumstances where the “lender” was not even permitted to touch the money, much less use it in their own name for funding.

The diversion of money away from the REMICs and the diversion of title away from the REMICs leaves each DOCUMENTED loan as non-existent, with the note evidence of a transaction in which no value exchanged hands, and the mortgage securing the obligations of the invalid note.

The diversion of the documents away from the flow of money leaves the borrower and lenders with a real loan that, except for the wire transfer receipts, that was undocumented and therefore not secured. Yet nearly all borrowers would grant the mortgage if fair market value and fair terms were used. Millions of foreclosures would have been thwarted by settlements, modifications and agreements had the investors been directly involved.

Instead the subservicers rejected hundreds of thousands of perfectly good proposals for modification that would have saved the home, mitigated the damages to investors, and left the bank liable to investors for the rest of the money they took that never made it into the money chain and never made it into the REMIC.

Add to this mixture the rigging of LIBOR and EuroBOR, the receipt of trillions in mitigating payments kept by the banks that should have been paid and credited to the investors, and it is easy to see, conceptually, how the amount demanded in nearly all foreclosure cases is wrong.

Discovery requests should include, in addition to third party insurance and CDS payments, the method used to compute new interest rates and whether they were using LIBOR ( most of them did) and what adjustments they have made resulting from the revelation that LIBOR was rigged — especially since it was the same mega banks that were rigging the baseline rate of interbank lending.

Once you are in the door, THEN you can do not only your own computations on resetting payments, but you can demand to see all the transactions so that the applied interest rate was used against the alleged principal. At that point you will know if a loan receivable account even exists and if so, who owns it — and a fair guess is that it is not now nor was it ever any of the parties who have “successfully” completed foreclosure, thus creating a corruption of title in the marketplace for real estate that has never happened before.

E-Mails Imply JPMorgan Knew Some Mortgage Deals Were Bad


When an outside analysis uncovered serious flaws with thousands of home loans, JPMorgan Chase executives found an easy fix.

Rather than disclosing the full extent of problems like fraudulent home appraisals and overextended borrowers, the bank adjusted the critical reviews, according to documents filed early Tuesday in federal court in Manhattan. As a result, the mortgages, which JPMorgan bundled into complex securities, appeared healthier, making the deals more appealing to investors.

The trove of internal e-mails and employee interviews, filed as part of a lawsuit by one of the investors in the securities, offers a fresh glimpse into Wall Street’s mortgage machine, which churned out billions of dollars of securities that later imploded. The documents reveal that JPMorgan, as well as two firms the bank acquired during the credit crisis, Washington Mutual and Bear Stearns, flouted quality controls and ignored problems, sometimes hiding them entirely, in a quest for profit.

The lawsuit, which was filed by Dexia, a Belgian-French bank, is being closely watched on Wall Street. After suffering significant losses, Dexia sued JPMorgan and its affiliates in 2012, claiming it had been duped into buying $1.6 billion of troubled mortgage-backed securities. The latest documents could provide a window into a $200 billion case that looms over the entire industry. In that lawsuit, the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, has accused 17 banks of selling dubious mortgage securities to the two housing giants. At least 20 of the securities are also highlighted in the Dexia case, according to an analysis of court records.

In court filings, JPMorgan has strongly denied wrongdoing and is contesting both cases in federal court. The bank declined to comment.

Dexia’s lawsuit is part of a broad assault on Wall Street for its role in the 2008 financial crisis, as prosecutors, regulators and private investors take aim at mortgage-related securities. New York’s attorney general, Eric T. Schneiderman, sued JPMorgan last year over investments created by Bear Stearns between 2005 and 2007.

Jamie Dimon, JPMorgan’s chief executive, has criticized prosecutors for attacking JPMorgan because of what Bear Stearns did. Speaking at the Council on Foreign Relations in October, Mr. Dimon said the bank did the federal government “a favor” by rescuing the flailing firm in 2008.

The legal onslaught has been costly. In November, JPMorgan, the nation’s largest bank, agreed to pay $296.9 million to settle claims by the Securities and Exchange Commission that Bear Stearns had misled mortgage investors by hiding some delinquent loans. JPMorgan did not admit or deny wrongdoing.

“The true price tag for the ongoing costs of the litigation is terrifying,” said Christopher Whalen, a senior managing director at Tangent Capital Partners.

The Dexia lawsuit centers on complex securities created by JPMorgan, Bear Stearns and Washington Mutual during the housing boom. As profits soared, the Wall Street firms scrambled to pump out more investments, even as questions emerged about their quality.

With a seemingly insatiable appetite, JPMorgan scooped up mortgages from lenders with troubled records, according to the court documents. In an internal “due diligence scorecard,” JPMorgan ranked large mortgage originators, assigning Washington Mutual and American Home Mortgage the lowest grade of “poor” for their documentation, the court filings show.

The loans were quickly sold to investors. Describing the investment assembly line, an executive at Bear Stearns told employees “we are a moving company not a storage company,” according to the court documents.

As they raced to produce mortgage-backed securities, Washington Mutual and Bear Stearns also scaled back their quality controls, the documents indicate.

In an initiative called Project Scarlett, Washington Mutual slashed its due diligence staff by 25 percent as part of an effort to bolster profit. Such steps “tore the heart out” of quality controls, according to a November 2007 e-mail from a Washington Mutual executive. Executives who pushed back endured “harassment” when they tried to “keep our discipline and controls in place,” the e-mail said.

Even when flaws were flagged, JPMorgan and the other firms sometimes overlooked the warnings.

JPMorgan routinely hired Clayton Holdings and other third-party firms to examine home loans before they were packed into investments. Combing through the mortgages, the firms searched for problems like borrowers who had vastly overstated their incomes or appraisals that inflated property values.

According to the court documents, an analysis for JPMorgan in September 2006 found that “nearly half of the sample pool” – or 214 loans – were “defective,” meaning they did not meet the underwriting standards. The borrowers’ incomes, the firms found, were dangerously low relative to the size of their mortgages. Another troubling report in 2006 discovered that thousands of borrowers had already fallen behind on their payments.

But JPMorgan at times dismissed the critical assessments or altered them, the documents show. Certain JPMorgan employees, including the bankers who assembled the mortgages and the due diligence managers, had the power to ignore or veto bad reviews.

In some instances, JPMorgan executives reduced the number of loans considered delinquent, the documents show. In others, the executives altered the assessments so that a smaller number of loans were considered “defective.”

In a 2007 e-mail, titled “Banking overrides,” a JPMorgan due diligence manager asks a banker: “How do you want to handle these loans?” At times, they whitewashed the findings, the documents indicate. In 2006, for example, a review of mortgages found that at least 1,154 loans were more than 30 days delinquent. The offering documents sent to investors showed only 25 loans as delinquent.

A person familiar with the bank’s portfolios said JPMorgan had reviewed the loans separately and determined that the number of delinquent loans was far less than the outside analysis had found.

At Bear Stearns and Washington Mutual, employees also had the power to sanitize bad assessments. Employees at Bear Stearns were told that they were responsible for “purging all of the older reports” that showed flaws, “leaving only the final reports,” according to the court documents.

Such actions were designed to bolster profit. In a deposition, a Washington Mutual employee said revealing loan defects would undermine the lucrative business, and that the bank would suffer “a couple-point hit in price.”

Ratings agencies also did not necessarily get a complete picture of the investments, according to the court filings. An assessment of the loans in one security revealed that 24 percent of the sample was “materially defective,” the filings show. After exercising override power, a JPMorgan employee sent a report in May 2006 to a ratings agency that showed only 5.3 percent of the mortgages were defective.

Such investments eventually collapsed, spreading losses across the financial system.

Dexia, which has been bailed out twice since the financial crisis, lost $774 million on mortgage-backed securities, according to court records.

Mr. Schneiderman, the New York attorney general, said that overall losses from flawed mortgage-backed securities from 2005 and 2007 were $22.5 billion.

In a statement shortly after he sued JPMorgan Chase, Mr. Schneiderman said the lawsuit was a template “for future actions against issuers of residential mortgage-backed securities that defrauded investors and cost millions of Americans their homes.”

Deutsch: Trustee in name only

For information on seminars and legal representation in Northern California please call our customer service line at 520-405-1688. Neil is now directly involved in assisting the attorneys plead an script these cases. A new seminar in Auburn, CA which focuses on the bankruptcy venue, is soon to be announced.
Editor’s Comment: Echoing the analyses presented here over the last few weeks, our senior securitization analyst wrote me this note which corroborates the basic assumption that everything is upside down. In the recorded words of Reynaldo Reyes at Deutsch — “it is all very counter-intuitive.” It is also wrong, illegal and probably criminal.
That is a euphemistic way of referring to a shell game that is covering up the largest Ponzi scheme in human history — and one which is still on-going because regulators and law enforcement either refuse to see it or simply don’t have the resources to study it.
We are left with the appearance of a REMIC — the equivalent of what I once called a holographic image of an empty paper bag. We have a paper trust that is both unfunded and in which there are no assets, that was routinely ignored by the investment bankers who directed them to be written but not used. We have beneficiaries who think they are holding asset-backed mortgage bonds when there are no assets to back up the bonds because the bonds were issued by the empty trust. Investors are paid out of their own money and the sale of new “mortgage bonds.” Classic PONZI.
Then as Dan so simply explains it, you have a paper “trustee” over the paper trust, where the paper trustee has been stripped of all powers — powers that are 100% delegated (back to the banks acting as servicers) in the documents written for the trust, unless the investors say otherwise, but there is no way for investors to identify other investors in the paper trust in order to compare notes and give instructions to the trustee.
Same as the homeowner who has kept asking “which trust owns my loan.” The answer is that none of them do. The banks don’t own the loan either. It is the investors who own the loan receivable, but the loan receivable is neither documented nor secured.
Everything else is just paper and ink that didn’t matter to the investment banks who were creating servicing entities and other exotic vehicles through which they could “trade” loans that didn’t belong to them, receive insurance on losses they didn’t have, get federal bailouts on lies about mortgage defaults when it was only the threat of NOT receiving an undeserved windfall that the banks were worried about — 100 cents on the dollar for loans and fictitious pools for each insurance or CDS contract they purchased — using the investors money.
As Dan points out, the entire scam comes back to one thing, as it always does in an illegal fraudulent scheme — control was by the banks who should have only served as intermediaries both on paper and in action. They did neither. They posed as the investor when it suited them and even changed MERS records to show that, as if it were true. They posed as owners of an obligation from homeowners when they neither funded nor purchased the loans.
AND they convinced Judges that millions of foreclosures should be allowed where the bank acting for itself and on behalf of the paper trust, submitted a credit bid from entities that never had any money or assets, much less ownership of the loan receivable.
The plain simple truth is that if you compare what should have been done if this was honest dealing, is that the money invested would have gone into the pool (REMIC, SPV, Trust) and the used to fund mortgages. Instead the money went elsewhere and no loans were assigned into the pool, the mortgage bonds were worthless, and the complexity of the fraud has so far been too daunting for law enforcement and regulators to step in.
If this was a legal transaction in which the  intent of the investment banks was honest, the instructions to the closing agent and the documents and disclosures would have the name of the pool all over them. Instead they put in the names of entities who were neither acting as brokers nor lenders. And the purpose of the banks was to “borrow” the funds from one end and “borrow” the fraudulent documents on the other end and trade for their own benefit. Obama’s advisers are just plain wrong when they tell him that the transactions were bad or wrong, but legal under existing laws and regulations.
I still believe that law enforcement and regulators are both stepping in and getting their ducks in a row. Unraveling something this complex on paper, requires a solid foundation of knowledge in which they can ignore the paperwork just like the banks did. After that it becomes clear that this is just another Ponzi scheme based upon tens of millions of fraudulent documents were produced supporting tens of millions of transactions that were never completed in which tens of millions of recorded documents lie ticking like a time bomb in the county recorders’ offices, only to surface later as a blight on a corrupted title system.
From Dan:
Here is how out of control the situation is. The Trustee (Deutsche in this case) has serious concerns over the servicing and foreclosure activity of the servicers.  Deutsche has (by contract) given control to the servicers.  Deutsche has no ability to interfere with what the servicers are doing (unless instructed by the investors). [Editor’s Note: But they knew this going in meaning they were accepting “trustee” fees without acting as trustees, which is why these paper trusts were never administered from the trust department of ANY of the banks alleging they are trustees for the on-existent trusts. An unfunded trust is no trust at all. It is fictitious.]
On the other side, Deutsche is constrained and cannot exercise control over the servicers unless and until a certain percentage of the investors give written authorization and agree to indemnify Deutsche. [Editor’s Note: That percentage can only be reached when the investors know who the other investors are. So far the banks have succeeded in keeping most of the information secret — as both investors and homeowners unravel the mystery of vanishing documents and money in flight]
The scenario created by Wall Street is a sinking ship that does not allow the officers of the ship (Deutsche), to interfere with workers repairing a hole in the bottom of the ship, unless the ship owners (the investors) get together and give them (the officers) written authorization to remediate the actions of the workers.
This ship is going down and there is no stopping it. [Editor’s Note: When those “assets” on the balance sheets of the mega banks turn out to be at best worthless and at worst fraudulent, the bank’s financial condition will be changed from viable to impossible and they will be broken up. But as Iceland showed us clearly, the other banks pick up the pieces, the household debt is reduced forcing the banks to cooperate, and as much money as possible is returned to the investors who were the first victims in this fraudulent PONZI scheme]
This type of contractual relationship is against public policy and should be unenforceable.
Once again, the principal is not exercising any control over the agent (investors and trustee).
Once again, the principal is not exercising any control over the agent (trustee and servicers).
Once again, the principal is not exercising any control over the agent (foreclosure trustee and beneficiary).  In fact the foreclosure trustee does not even know who the beneficiary is.
Office: 530.392.4681

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

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

Editor’s Note:

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

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

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

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

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

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

Dan wrote:

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

And Charles Cox wrote back:

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

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

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

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

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

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

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

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

Charles Wayne Cox
Email: or




COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary GET COMBO TITLE AND SECURITIZATION ANALYSIS – CLICK HERE


At least one point emerging from all this information is that the basic concepts of default, performing loans and non-performing loans have been perverted by the securitization hoax. If Wall Street’s intention had been something other than deception, all of this would be clear as a bell. But what they were looking for was a way to take money from investors and not give it back, take houses from homeowners and not account for it, and take taxpayer money for losses than never occurred.

I have already written about the fact that the bonds given to the investors (actually non-existent, because they were “uncertificated”) contained vastly different parties and terms than the note signed by homeowners. There are several reasons this is important.

The investor/lenders are the only real source of funds and the only people who actually were at risk to lose money if they were not repaid. Somehow Wall Street managed to insert itself as a mere intermediary and actually claim the houses, the debts and force fees on both investors and homeowners that were improper, undisclosed, illegal and unconscionable.

For purposes the bailout, they took the investor loss and claimed it as their own, taking taxpayer money in the trillions to bailout their ailing enterprises. Most investors received nothing out of that money. And for sure, no borrower ever received a credit for money received on their obligation even though the government waived rights of subsrogation against the homeowner. So the debt was paid by the government and the borrower still owed it, making the obligation worth far more because it was being repaid several times over.

For all other purposes Wall Street took the loans receivables as their own without ever having advanced any money to the borrowers or to the investors for purchase of the obligation. In order to keep the investors placated they made sure the investors continued to get paid regardless of what was really happening with most of the money. They did this first, by using the investors own money to send them payments as though they were from borrowers. That is a fact and it is right in the prospectus of most “securitized” pools (which contain nothing of value).

They did the same thing with insurance, credit default swaps, cross-collateralization payments, over-collateralization payments, etc., and sold the same borrower obligation several times over (as much as 40 times over) by changing the apparent terms of the loan to look like another loan, or by covering the “sale” with language that made it look like a hedge product, like a credit default swap, synthetic CDO, or insurance. In each case, the money was received, sometimes courtesy of the U.S. Government, under an express waiver of subrogation, which means that the payor agreed that this payment ends the matter.

The loss was covered by an actual payment of money but neither the investor/lender nor the homeowner/borrower was ever given the information to allocate it to their bond or note or obligation. But so far, the Banks have succeeded in covering this up. So far, neither the investors nor the borrowers have fully realized that they are entitled to an accounting for ALL money transactions relating to the investors bond and the homeowners loan.

The reason is simple. As for the investor, they don’t want to pay the money to the investor and they don’t want the investor knowing how much money was made using the investor’s partnership (REMIC) in name only. As for the borrower, they don’t want the borrower getting credit for what the investor did or should have received as a result of the payments that were due under the bond. This would defeat the ability of the Wall Street to treat loans as being in default when in fact they were either paid in full or paid ahead.

Thus far, the banks have succeeded in directing the attention of the courts, the lawyers and the pro se litigants to the very narrow accounting provided by servicers as to the payments made by ONLY the borrower. When the time comes that the government payments, the insurance payments, the servicer payments, the counterparty payments, and the proceeds of other credit enhancements are taken into account, the picture will change. It will be obvious that virtually none of the amounts demanded in foreclosures, none of the amounts shown in the end of month statements on loans, and none of the distribution reports to investors were true, correct or even well-intentioned.  

by Consumer in NJ

Maybe you don’t understand the point of the cut/pasting of the original 11 bank credit facility who started this mess connecting Lawyers Title Corporation, LandAmerica, Commonwealth, TD Financial Services, etc.

In good faith, I’ll continue sharing good information. I’m a researcher not a blogger. I’m a consumer harmed finding loopholes that harmed the economy transaction by transaction. What are you doing in good faith? Anyone who is a consumer not a blogger who understand and wants to be the ghost writer fine meanwhile I’m not seeing in the bulic domain the information I’m sharing that is important to how the economy harmed by money laundering a crime against the nation collective acts intentional collaboration, collusion methodical movement of cash right out of the nation c/o Mortgage Servicers affilaites of national banks. Thank you Office of the Comptroller of the Currency Hawke, Duggan, and who is the new guy? .

You need an attorney who knows the law. How are you going to know if you have a good attorney? How will you ask educated questions if the attorney has fiduciary interests of others ?

RED FLAG, attorney who promises you a loan modification connected to REO Lender’s reo broker, lender, dealer agaent affilaite beneficiary of the subservicer, robo-mill default lenders ?

RED FLAG attorney who says you don’t have to pay anything upfront.

Foreclosure was scary until Foreclosuregate. What is scary now is what Congress and the President, has not done about the OCC and CFPA c/o Federal Reserve.

What you don’t understand will hurt you.

We all proved that we are stupid people who signed stupid contracts. The Court will say a prudent buyer beware.

Obligor (Seller of loan) on your behalf signed mortgage backed note separating at time of ‘purchase’ of financial product the note from the debt. The Servicer c/o Purchaser sold back servicing rights takes possession of pledged asset cash of promissory note borrower co-signed.

The Tempory Lender recorded as the only document ‘Mortgage/Deed of Trust’ proves we did not understand that the ‘TRUST’ Cash paid by Purchaser separated the Note and DEED at time of purchase of ‘mortgage’ a financial product placed into public domain.

Alert all you whippersnappers signing the same documents today, ask for access to all of the related governing agreements between Seller and Purchaser, Obligor, Beneficiary, etc.which were intentionally witheld by the Obligor from all who come before you. Make an educated decision that its ok your property deed and note are separated..

The Obligor has the OBLIGATION to pay all principal and interest payments on a debt. We are the debtor c/o Obligor who allowed affilaites as third parties to Sell Loans purchased by …

Because you did not seek a copy of the Obligor’s contract and Agreements Sale & Serive Agrement, Loan Purchase Agreement, etc., and now don’t care to review agreements available on the public domain SECINFO . Com, and FFIEC . GOV Federal Reserve System reveals how the money moves to/from Parent Chase Manhattan Corporation 1998, 1998 with entity – data processing servicer is the Federal Reserve System Classification – Mortgage Electronic Registration Systems, Inc. (MERS). and all MERS Members then by default c/o FREDDIE MAC shareowner are ‘affiliates’ of national banks Mortgage Servicers (Norwest Mortgage, inc, Americas Servicing Co, Premier Asset Services, Wells Fargo Home MOrtgage, Chase Home Lending, GMAC Mortgage Corp of IA, ….
You don’t understand what I’m taling about. Sorry. Call be happy to help you understand what you don’t know that is harming you, your famaily, friends, neighbors, your municipality, your state and nation.

Keep complaining that you don’t understand. I won’t give up.
I don’t wany anyone to roll over and lose their home through ignorance for if you do you are part of the problem and allowing the perpetrators to continue harm the economy one mortgage at a time. ITts bad enough both Houses of Congress, The OCC, The Federal Reserve, 12 Federal Home Mortgage Loan Corporations, FHA, HUD, and they pulled over federal taxes from you for the Consumer Financial Protection Agency who all protect government interest of only GINNEMAE guaranteed loans and self interests of all private wealth institutional bankers and institutional investors. Do you think the FEDERAL RESERVE is the ‘Central Bank’? Nope sorry its not. Do you thing the FHMA lawsutis protect non-conforming loans NOPE does not.

In default, you do not lay down like a dog because your scared.
You don’t have to listen to some REO broker quick move into an apartment
Does the party standing before the court Plaintiff have the right as note holder in due course to take the property. That is all a foreclosure is.due to default (hardship) (loss of job) (sickness) (divorce) all the top 5 stressors in life. My intentions as a consumer harmed to help reveal the loopholes which harmed our economy.

The Agreements governing your mortgage did not start and stop the day you signed the mortgage promissory note.

By the way the Temporay Lender aka Seller of the Loan already authorized the loan and ordered the cash from a purchaser before you signed the promissory note. WHich means legally the loans was already signed and you are a what co-signor?

The harm to the economy methodical c/o money laundering. Corportions are perpetual entities, whose assets include, contracts, agreements, registration statements, T-1 Indenture, Trusts, etc., assets as receivables think of it like if you die and had money a house a busienss a car, another house, another buisness. How would the estate be assigned a value? The business a value? That may help you understand the one loan combined with all loans 2003-2008 which harmed the economy by laundering cash right under the noses of each federal regulatory agency c/o OCC.

2. Seller is sole owner of Loan
Seller has authority to Sell, transfer and assign the same …(see manual not attached)
Seller attests there has been no Assignment, sale or hypothecation thereof by Seller
except the usual hypothecation of the documents in connection with Seller’s normal banking transactions in the conduct of its business.

Hypothecation new word: (for me)

What Does Hypothecation Mean?
When a person pledges a mortgage as collateral for a loan, it refers to the right that a banker has to liquidate goods if you fail to service a loan.

The term also applies to securities in a margin account used as collateral for money loaned from a brokerage.

You are said to “hypothecate” the mortgage when you pledge it as collateral for a loan

New Word: Rehypothecation:
When a broker pledges hypothecated client owned securities in a margin account to secure a bank loan. Rehypothecation also known as a margin loan. Related terms (Banking, Brokers, Pledged Asset, Hypothecation.

Pledged Asset

What Does Pledged Asset Mean?
An asset that is transferred to a lender for the purpose of securing debt.

The lender of the debt maintains possession of the pledged asset, but does not have ownership unless default occurs.

A pledged asset is returned to the borrower when all conditions of the debt have be satisfied.

Home buyers can sometimes pledge assets, such as securities, to lending institutions in order to reduce the necessary down payment. Thus, these securities would not have to be sold in order to meet the down-payment requirements, allowing for any capital appreciation while maintaining the associate mortgage benefits.

Related terms Capital appreciation; Collateral; Default; Hypothecation, Loan, Mortgage, Rehypothecation …
Bonds, Fixed Income, Personal Finance

WHAT ABOUT ‘Sub-Sovereign Obligation – SSO”
What Does Sub-Sovereign Obligation – SSO Mean?

A form of debt obligation issued by hierarchical tiers below the ultimate governing body of a nation, country, or territory. This form of debt comes from bond issues and is issued by states, provinces, cities or towns in order to fund municipal and local projects.

Also referred to as a “municipal (muni) debt obligation”.

This form of debt obligation is commonly created by municipalities in order to meet funding requirements. Issuing bodies are responsible for their own debt issues, which can carry significant risk depending on the financial health of the municipality.

WHAT ABOUT ALL THOSE ‘NIMS’ IN REMIS? Hmmm. Relate back to the ‘cash’ taken out of ‘TRUST’ custody of a pension fund or municipality, c/o Non-Deposit Trust Company Non-Member ‘cash’ purchaser ordered by ‘seller’ originator deposits ‘cash’ c/o depositor individual bank closing agent, …for a new Loan.
If existing loan is placed in default and not really paid off (during a refinance) there are a lot of ifs, but the loan can be placed in forced default over 90-120 days and repurchased depending upon ‘agreements. What does your agreement say? Read a simple one from 9/24/1998 re Countrywide Purchaser and E-Loans Seller (Originator). Google Purchase.
A debt collector robo-firm c/o subservicer instructed by Servicer c/o Investors/Owner of ‘mortgage note’ Pleged Asset

Trying to take your property. How? What in writing gives them the right to attach the debt to the Pledged Asset?
Master Servicer ‘agreeded’ in REMIC SERVICER who purchased servicign rights was in control after 90 days.

A 90 day default common for REMICS, there are other defaults that can occur between buisness entities seller and purchaser.

If mortgage affixed a MIN# that affiliate of a national bank’s Mortgage Servicer did not register transactions at RETAIL with County Clerk/Recorder because the ASSIGNMENT/Mortgage Promissory Note borrower signed with Temporay Lender is the Assignment, statutory taxes paid by borrower for credit line increase in a documented called a mortgage promissory note like an amendment to the exisint mortgage if a refiance – a loan modiifcation.

MERS MEMBERS by default are automaticfally affiliates of a National Bank’s Mortgage Servicer. Keep in mind the OCC since 2003 has protected all MERS MEMBERS c/o Federal Reserve private wealth managers who assigned visitorial powers c/o Supremacy Clause trump State Attorney Generals trying to enfoce laws can’t secure evidence related to any transactions ‘cash’ attached to ‘Mortgage Servicers affilaites of national banks. Chase Bank NA all MERS MEMBERS affiliates of natioanl banks Chase, Wells Fargo BanK NA, GMAC Bank c/o NASCOR dba Wells FArgo Asset Securities Corp. That is one joint venture governing loan originated c/o affiliates of these banks may do business in the names of these banks and the depositor ‘Wells Fargo Asset Securities Corp’….

Every rolling 12 month period, the ‘debt’ serviced, the servicer posts asset ‘receivables’ for 12 months…

Select Servicers maintain huge portfolios of many loans.
The servicer may have made an agreement to pay the P&I pending sale of REO property c/o subservicer for example GMAC Mortgage Corporation who will advance funding as a Tempoary Lender c/o REO Lender of Premier Asset Services affilaite – who is that? an affiliate of a Mortgage Servicer of a national bank, Welsl Fargo Bank NA. Hmmm.

You need to understand what was once illegible to me the agreements and decphier the relationship to secure evidence and to figure out if documents you have are accuate business statements you can pursue through the courts seeking disclosure of the agreements that govern the transactions.

if you want ‘evidence’ there is NO one answer fits all.

You each have a ‘Loan’ 0123456789 that went through an ‘origination’

During that origiantion, a purchaser and seller’ depending upon the governing agreement, exchanged cash. The written agreements provide the ‘agency’ authority. Look for your evidence. Look for loopholes. Find ‘evidence’ or you’ll lose.

Go back — go back — go back and find the original agreements.

1998 is a good place to start, when the integrated networks in place for Origiantions already existed and operating, over the CLOUD, portals connecting bank closing agents, title and settlement agents, MERS Members, TD Servicers, First America, Fideltiy, DocX, LPS, LSI, eLynx, etc., and all of the robo-firms in agreement with all the sub-servicers, servicers, ….

Example: Lawyers Title Services bank closing agents, title agenies, virtual notary services c/o title and settlemetn agencies, etc.

Select a simple one where you don’t have any paradigmns and read and you’ll understand better. Your preconceived ideas divert and hide the truth.

MERS exists c/o Chase Manhttan Corp as Parent of Mortgage Electronic Systems, Inc. Yes you read correct. What does that mean? The ‘joint venture’ between FREDDIE MAC, Chase, WFC, GMAC (private). The dollars ‘income’ flowed to Chase c/o Mortgage Electronic Registration Systems, Inc.

All MERS MEMBERS by default ‘affiliates’ of national banks, federal associations, federal savings banks… 3/13/2000 when Financial Holding Companies now parent money flows through Federal Reserve System in light of day between ‘Real Estate Industry’, ‘Insurance Industry’ and ‘Banking Industry’.

Google Purchase Loan Agreement
Loan Purchase Agreement
Countrywide Home Loans Inc.
E-Loans Inc.





PARTIES AGREE:Seller & Purchaser

“Related terms’ Collateral, Loan, Mortgage, Pledged Asset, Rehypothecation …

1. ELIGIBLE LOANS SELLER MUST BE APPROVED QUALIFIED AND/OR LICENSED TO ORIGINATE SUCH LOANS – so we can assume E-Loans has affiliates who are qualifed in all 50 states.

-Loans sold include
Conforming Conventional (GINNE MAE), Jumbo…not guaranteed by Ginne Mae,, Second Mortgage Loan Program (what is that resale of purcahsed loans after 120 days?), etc. Each defined with a unique set of rules.

GinneMae the only government guaranteed loans regulations govern conforming loanos conforming loans, and all non-conforming loans are considered Alt-A Loans (1) missing GSE requirement (no income verification). How do you know if your loan was conforming or not? Ask? Secure discover and find LPS ‘Non-Conforming’ printed on reports.

Whether conforming or non-conforming all of the loans from Sellter will be purchased by purchaser Countrywide in accordance with this Loan Purchase Agreement, and manual not attached herewith, that you get only if you are an affiliate, member, subscriber, vendors, servicer, whatever.

Have you read your agreements that govern the loan you signed as borrower? It was signed before you signed by the Seller who issued the insurance c/o Temporay Lender, the commitment to issue cash or accept cash, insurance for the event of a default. A default in some agreements may be the interest and late payment fee’ after 90 days if not paid places the loan in forced default. You know how they sent back checks for partial payments the servicer refused to take anything but the total amount owned? Why not take some? Because once 90 days in default, the loanos may be resold and repurchased.

Do you know what the Seller is responsible for? Look at a real agreement and look up the vernacular you don’t understand don’t apply what you think the work ‘lender’ and ‘temporary lender’ mean. And Pretender Lender is not a financial term. Temporary lender is a financial business entity role of some business entity who makes money in 3 different ways. Does not mean all Temporay Lenders do all that.

Countrywide Purchaser of Loans and E-Loans the Seller agree

1. Seller shall fully underwrite each Loan (prior to submission to Countrywide)

9/24/1998 Loan Purchase Agreement refers to ‘must use’ if avaialble’ a Countrywide-approved automated-underwriting system for underwriting the loan.

2. Commitment to Purchase Loaons
Seller may commit to sell a Loan to purchaser Countrywide (refer to manual we don’t have)

Countrywide will confirm conditions of sale of Loan to Countrywide, deliver confirmation Commitment to Seller, set for terms of transaction, Countrise ‘purchaser’ will pay for each Loan (refer to manual affects Purchase Price).

Terms of Commitment
Including Purchase Price Effective Period
Seller is approved by Countrywide to sell Loanos to Country wide on a bulk sale basis …
Countrywide and ‘Seller’ E-Loans shall execute Addendum to ‘Loan Purchase Agreement (BULK SALES) which will be attached and incorporated into this Agreement by reference (not attached).

Countrywide has right (BUT NOT OBLIGATION) to underwrite any Loan submitted for purchase

Seller’s repurchase obligations under Section 9 hereof… 270 days later…

Seller delivers to Countrwide appraisal of real estate security for each Loan
Appraisal signed by a qualified appraiser (see manual not attached) prior to Countrywides approval to purchase loan.

4. Delivery of Loan Documents

When is a loan deemed ‘delivered’ to Countrywide

A) if it is received by Countrywide within the Commitment Period

B) if Loan in compliance with Delivery of Closed Loans and Funding Documentation (see manual not attached)

C) Loan has no outstanding conditions that prevent Countrywide from FUNDING purchase. Example: failure to deliver within 120 days of Loan purchased (forward sold) any of the required documentation Countrywide Assessment fee of $50 per month after initial 120 day grace period. $50 if 1 or more documents.
Failure to deliver to Countrywide one or more of the original documents specified in Delivery of Closed Loans (see manual not attached) within 270 days from date the Loan was purchased by Countrywide shall obligate SELLER to repurchase Loan pursurant to Section 7 of this Agreement.

5. Payment of Purchase Price and Seller’s Wire Instructions
Countrywide Purchaser shall after receipt of loan documentation package TILA – HUD etc., deliver the Purchase Price (less any fees or discounts due to Countrwide)

Commitment to Seller
Seller’s wire instructions ‘Order Cash for Loanj0123456789;’ or in accordance with any bailee letter or trust receipt submittted with the Loan 01234567890 (all as determined in the ‘sole’ and ‘abosolute’ discretion of Countrywide.

6. Sellers Obligations, Representations & Warranties
Seller prepresents and warrrants each Loan offered for sale (purchase by Countrywide)

1 Loan documents duly executed by trustor/mortgagor
Loan documents acknowledged and recorded;

each Loan is valid
Each Loan complies with all cirterial (see manual not attached)
Note and Deed of Trust/Mortgage constitute4 entire Agreement between trustor/mortgagor and the beneficiary/mortgagee

There is no verbal understanding or written modification which would affect terms of note or deed of trust/mortgage

except by written instrument delivered

and expressly made known to the beneficiary/mortgagee and recorded if recording is necessary to protect interests of beneficiary/mortgagee.

2. Seller is sole owner of Loan
Seller has authority to Sell, transfer and assign the same …(see manual not attached)
Seller attests there has been no Assignment, sale or hypothecation thereof by Seller
except the usual hypothecation of the documents in connection with Seller’s normal banking transactions in the conduct of its business.

Hypothecation new word: (for me)

What Does Hypothecation Mean?
When a person pledges a mortgage as collateral for a loan, it refers to the right that a banker has to liquidate goods if you fail to service a loan.

The term also applies to securities in a margin account used as collateral for money loaned from a brokerage.

You are said to “hypothecate” the mortgage when you pledge it as collateral for a loan

New Word: Rehypothecation:
When a broker pledges hypothecated client owned securities in a margin account to secure a bank loan. Rehypothecation also known as a margin loan. Related terms (Banking, Brokers, Pledged Asset, Hypothecation.

Pledged Asset

What Does Pledged Asset Mean?
An asset that is transferred to a lender for the purpose of securing debt.

The lender of the debt maintains possession of the pledged asset, but does not have ownership unless default occurs.

A pledged asset is returned to the borrower when all conditions of the debt have be satisfied.

Home buyers can sometimes pledge assets, such as securities, to lending institutions in order to reduce the necessary down payment. Thus, these securities would not have to be sold in order to meet the down-payment requirements, allowing for any capital appreciation while maintaining the associate mortgage benefits.

Related terms Capital appreciation; Collateral; Default; Hypothecation, Loan, Mortgage, Rehypothecation …
Bonds, Fixed Income, Personal Finance

There are 2 defaults going on at the same time with Countrywide

Simple explanation provided by Investopedia

What Does Default Mean?
1. The failure to promptly pay interest or principal when due. Default occurs when a debtor is unable to meet the legal obligation of debt repayment. Borrowers may default when they are unable to make the required payment or are unwilling to honor the debt.

2. The failure to perform on a futures contract as required by an exchange. Investopedia explains Default

1. Defaulting on a debt obligation can place a company or individual in financial trouble. The lender will see a default as a sign that the borrower is not likely to make future payments. For example, if Company XYZ is unable to make a coupon payment on its bonds, the bondholders would place XYZ in bankruptcy. This would give the company an opportunity to claim XYZ’s assets as a form of repayment for the debt.

2. Defaulting on a futures contract occurs when one party does not fulfill the obligations set forth by the agreement. The default usually involves not settling the contract by the required date. A person in the short position will default if he or she fails to deliver the goods at the end of the contract. The long position defaults when payment is not provided by the settlement date.


Allocation of Third Party Payments and Loans to Specific Loan Accounts


So the question is how would you allocate third party payments and what difference will that make to a Judge hearing the case.

ASSUMPTION: XYZ Investment Banking Holding company has received a total of $50 billion in third party payments from insurance, counterparties, credit enhancements (moving money from one tranche to another within the SPV “Trust”), and federal assistance or bailout. Each one of these is subject to separate analysis, but for simplicity we will treat them all the same.

  • The money received was for “toxic assets” meaning bad mortgages or pools that were written down in value because of the presence of bad loans in the pools. Whether those loans really made it into the pool when the “assignment” was years after the cutoff date in the PSA and was for a non-performing loan which is specifically excluded in the PSA is yet another issue that requires separate analysis.
  • Out of the many SPV entities created and sold to investors, 50 were in the status of default or write-down, triggering the insurance, bailouts etc.
  • Arithmetically, assuming $1 billion goes to each pool under the assumption they were all the same size (not true in reality, so you would be required to make a calculation to arrive at the prorata share of each pool which involve several factors and is subject to a whole separate analysis that will be ignored for purposes of this example).
  • Out of each pool, 50% of the loans were in some stage of negative credit event. Thus we have $1 billion to allocate to 50% of the loans.
  • For purposes of this example, the assumption is that each loan was the same size and that there are 4000 loans each with a nominal principal balance of $350,000 claimed.
  • For purposes of this loan each borrower stopped making payments under identical terms 6 months before the receipt of the third party payments.
  • If we ignore the payments then each loan would be entitled to a credit of $250,000 and the investors in each pool would receive a pro rated share of the $1 billion, which amounts to $250,000 per loan.
  • If we don’t ignore the payments and assume that the payments under the note would have been $2,000 per month principal and interest only, then $12,000 wood first be allocated to the past due payments and the default, in relation to the creditors (investors) would be cured. This would be in accordance with the note provisions that first allocate receipts to the payments due.
  • Then fees and costs would be paid off, which we will assume are $13,000, as per the terms of the note.
  • Thus the $250,000 allocation would be reduced by $25,000 before application to principal. That leaves $225,000 allocated to principal.
  • Reducing the principal by $225,000 leaves a balance due on the obligation of $125,000 ($350,000-$225,000).
  • Reducing the balance for the appraisal fraud at origination: (1) appraisal for this example was $370,000 (2) real fair market value was $250,000 (3) borrower made down payment of $20,000 (4) total damages for appraisal fraud = $120,000.
  • After reduction for appraisal fraud the balance on the obligation in our example here is $5,000.
  • Under TILA the failure to disclose the hidden fees and hidden parties and resulting effect on the APR, would mean that the borrower is entitled to either rescission or return of all payments made including the costs of closing and points on the loan, plus attorney fees and possibly treble damages which would mean that someone owes the borrower money, the obligation has been extinguished, the note is evidence of an obligation that has been paid in full, and the mortgage secured is incident to a note securing a non-existent obligation. Either way, under rescission or allocation, the borrower owes nothing.
  • The net result for the creditor is that they get or should get $250,000 cash plus a claim for damages against numerous parties for ratings fraud, appraisal fraud and securities fraud.
  • The net result for the intermediaries who stole all the money including the third party payments is that they get the shaft including possible criminal liability.

A very similar allocation procedure would be appropriate for the top quality performing loans under the theory of identity theft. Without using these high FICO credit-worthy people’s identity and loan score they would not have had the golden cover to the heap of dog poop stinking underneath.


33-801. Definitions

In this chapter, unless the context otherwise requires:

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

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

3. “Cash” means United States currency.

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

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

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

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

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

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

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

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

BOA Suits Claims Credit Reports Used Instead of Title Searches

BofA Title claims
BofA Wants $535M From Title Insurers

CHARLOTTE, N.C. (CN) – Bank of America claims mortgage insurers owe it more than $535 million for losses it suffered when the housing bubble burst. BofA, which bought the poster boy of the subprime lending fiasco, Countrywide Financial, 2 years ago, says title insurers unfairly refuse to cover busted mortgage loans that originated before the financial meltdown.
Bank of America, one of America’s largest mortgage lenders and the recipient of more than $45 billion in TARP funds from the federal government, claims that United General Title Insurance and First American Title Insurance, now corporate affiliates, insured mortgages for title defects, undisclosed intervening liens and other problems, and to cover equity loans and lines of credit up to $500,000.
Now the insurers are balking at paying the claims, blaming Bank of America and the firms it acquired prior to the global economic crisis for creating their own problems, BofA says in Mecklenburg County Court.
As of February the two insurers have denied at least 2,200 of Bank of America’s claims, representing more than $235 million in losses, and failed to respond to another 2,300 claims, representing more than $300 million in losses, BofA says.
All of the claims arise from a home equity loan or line of credit that is in default, the bank says.
BofA demands coverage of its losses, plus compensatory and punitive damages for breach of contract and bad faith.
BofA is also a plaintiff in a suit filed in Los Angeles Superior Court by Countrywide Home Loans, demanding $111 million from Triad Guaranty Insurance.
In that complaint, Countrywide and BofA claim Triad is wrongly trying to rescind coverage for high-risk practices that it encouraged.
BofA is represented by Davis Halvreich with Reed Smith in the North Carolina case. 


See Judge Long’s Decision – Make sure you shepardize 384283_Ibanez Larace motion to vacate memorandum Oct2009Misc 384283 and Misc 3867551

when a foreclosure is noticed and conducted for one party
by another, the name of the principal must be disclosed in the notice.

the plaintiffs themselves recognized that they needed assignments in recordable form explicitly to them (not in blank) prior to their initiation of the mortgage foreclosure process, that the plaintiffs’ “authorized agent” argument fails both on its facts and as a matter of law

Editor’s Note: We’ve reported on this case before. And as a caution, there is report that the case was overturned on appeal but I don’t see it. Either way, the reasoning of the case is extremely persuasive and the only basis for reversal would be on procedural grounds, not substance.

Here is the essence of the pretender lender tactic. Their argument is basically that they have the right to foreclose whether or not they are the real party in interest, whether or not they are the holder in due course and especially whether or not they are the creditor in the “loan” transaction with the homeowner(s).

RULES OF ENGAGEMENT FOR FORECLOSURE DEFENSE LAWYERS: If you engage the “enemy” on their terms you will most likely lose. After all they created a narration that they think they can win. So YOUR strategy should be to change the narrative to YOUR points that can win.

In this case, it was simple. The Judge simply saw that the creditor was not involved in the foreclosure process and that the sale was therefore invalid. Implicitly the Judge was protecting both the real creditor and the homeowner from financial double (or multiple jeopardy).

So the Judge helped out the homeowner here by giving the homeowner the correct narrative. to wit: even if the party seeking to initiate the collection on the note or the foreclosure of the mortgage is an authorized agent (by virtue of possession or holding the note, etc.) the principal MUST BE DISCLOSED. How else can the court or the homeowner or the principal know the matter is subject to disposition through sale or judgment?

In a recent case in Arizona a pro se litigant finally penetrated the fog of Chauncery (see Dickens, BLEAK HOUSE), and the Judge who denied all homeowner motions before the weekend, finally got it and asked the attorney for the pretender lender what was going on (in another case in Ohio the Judge said “what are you trying to pull here?”).

Those cases are now proceeding through discovery (which we all know will never be completed) in which the identity of the creditor and a full accounting of ALL money transacted in connection with the subject loan is fully disclosed.

While there are cases we are tracking in which the homeowner is being bounced on his/her rear end, the tide is turning. The fact that there was federal bailout money and insurance proceeds paid in connection with these loans, is extremely relevant to the amount due and the identity of the current creditor.

This in turn is extremely relevant to the homeowner and the “lender” complying with federal mandate for modifications or state mandate for mediation. If the creditor is unknown how can the court or anyone else know that the “agent” is authorized?

At first the Judge’s knee jerk reaction is “What are you talking about, who else would make payments on this loan.?” But upon hearing the answer that the U.S. Treasury (TARP, TALF etc.), Federal reserve, and counter-parties in credit default swap insurance have made billions of dollars in payments and have not thus far accounted for their use of the money, the Judge may not believe you will succeed in your case but he will agree that you have a right to inquire. And THAT is all you need. because once you make the inquiry, the pretender lender will be on the defensive from that point on, disclosing itself as an impostor and a fabricator.

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