Evidence: Produce the Witness


In practice, this surfaces as a demand letter, affidavit or assignment or other document used by the pretender lender to establish its case. The path to defeat of the homeowner is paved when they fail to object to the introduction of these documents as anything other than an allegation that raises a question of fact. If you make the objection then you are conforming to the rules of evidence and enforcing your rights under the the U.S. Constitution. By directing the Judge’s attention to the question of fact, you then open the door to discovery and an evidentiary hearing. Without that, the allegations of the pretender lender will be taken as true and you are just about done.
The 6th Amendment, part of the Bill of Rights, guarantees people the right to confront witnesses who are offering “evidence” against them. This basic right has often been eroded by bad decisions by Judges who do not understand the rules of evidence — but more often affidavits, reports and other documents are often admitted into evidence because of the failure of the opposing party to object. In a great many cases, “evidence” becomes what is allowed by the failure of the party to understand their right to cross examine a witness in live testimony.
RELEVANCE: Neither the computer generated reports nor the affidavits or correspondence of the pretender lender is evidence unless you fail to object to it for (a) lack of foundation and (b) violation of your right to confront the PERSON who entered the data or information written or the PERSON who prepared the document. The same holds true for your forensic report. You can use it to raise a question of fact, but when it comes down to actually proving your case the report is useless without the live testimony of the forensic analyst and the live testimony of an expert who explains what it means.

In practice, this surfaces as a demand letter, affidavit or assignment or other document used by the pretender lender to establish its case. The path to defeat of the homeowner is paved when they fail to object to the introduction of these documents as anything other than an allegation that raises a question of fact. If you make the objection then you are conforming to the rules of evidence and enforcing your rights under the the U.S. Constitution. By directing the Judge’s attention to the question of fact, you then open the door to discovery and an evidentiary hearing. Without that, the allegations of the pretender lender will be taken as true and you are just about done.
There are exceptions to allowing a document in as evidence to prove the truth of the matter asserted but they are limited exceptions and contain numerous conditions, mostly in the form of providing a foundation for the introduction of the document, the reason for the absence of the witness and whether the witness is actually available to testify and if not, why not.
The parallel tactic used by pretender lenders is to produce a witness that is a shill for the real thing. This comes down to the conventional definition of competency of a witness to testify. In nearly all cases, the witness the pretender lenders offers has no direct personal knowledge of anything contained in the written document, has been recently hired, is not in the department that would have any knowledge and/or is not the true custodian of records who could identify where the data came from, who provided it, when it was created, and the method by which the document is created. In nearly all cases, these documents are fabricated in “service mills” which might actually be in the office of the attorney for the pretender lender where an employee of the law firm or service mill executes the affidavit or document as “limited signing officer,” “assistant secretary,” etc. MERS documents are virtually always executed by people with no connection with MERS and where MERS has no knowledge of the existence of the person nor that they executed a document in the name of MERS.
A competent witness is ONLY a live person in court who has PERSONAL KNOWLEDGE and personally remembers the transaction(s) about which they are offering testimony. The pretender lenders merely grab someone and tell them what to say in court like “I am an authorized representative of Pretender Lender and I am familiar with the facts regarding this loan.” Your objection should be accompanied by a request to voir dire the witness. Who is your employer. what is your job? where do you work? When were you employed? Did you get information about this transaction from documents you were given or that you found? Did you get your information from another person?
Test them on conflicts of the numbers shown in different documents. Ask them if they have personal knowledge of the two documents. You probably will find that they have no personal knowledge of one of them. Ask them to explain the difference if they manage to qualify the witness, as it lessens their credibility to have conflicting demands from the same party.
Establish that the witness doesn’t really know anything on their own because they had nothing to do with the origination or servicing of the loan and nothing to do with the securitization of the loan.
On the securitization of the loan sometimes they will bring in a person who has some connection with the loan from the servicing company. Establish that the servicing company is a bookkeeper and conduit for payments and not the creditor (the obligation, as evidenced by the note is not owed to the witness or their employer).
After establishing that they otherwise do have personal knowledge not gleaned from someone else (hearsay), you ask them if they have any access to the the records of the other parties involved in the securitization of this loan.
Then you establish that therefore they only have the records of a specific period of time involving transactions between the borrower and a particular servicer and NOT the full record of all transactions that occurred as credit or debits to the obligation created when the loan was originated. So they don’t know whether the obligation was transferred or sold or paid by federal bailout or insurance. They don’t know the identity of the creditor.
As soon as they admit lack of knowledge you object to the witness as not having the required personal knowledge and personal recollection of the entire transaction or even parts of it. You therefore object to the the document or report or affidavit they are offering as lacking proper foudnation and as violating your right to cross examine witnesses offering to testify against you.
While the 6th Amendment is often cited just in criminal cases, it is the basis for the rules of evidence in every state in the union. The purpose is not some legal trick. It is to provide the court with some assurance that the information being offered to the court has the required amount of credibility to be useful in finding the facts of the case.
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New York Times
January 11, 2010
Editorial

The Right to Confront Witnesses

Just last June, the Supreme Court decided that when prosecutors rely on lab reports they must call the experts who prepared them to testify. It was an important ruling, based on a defendant’s right to be confronted with witnesses against him, but the court is about to revisit it. The justices should reaffirm that the Sixth Amendment requires prosecutors to call the lab analysts whose work they rely on.

On Monday, the court hears arguments in Briscoe v. Virginia, in which a man was convicted on drug charges. The prosecutors relied on certificates prepared by forensic analysts to prove that the substance seized was cocaine. They did not call the analysts as witnesses.

The defendant should be able to get his conviction overturned based on Melendez-Diaz v. Massachusetts, the ruling from last June, which held, by a 5-to-4 vote, that using lab reports without calling the analysts violates the Sixth Amendment.

The amendment’s confrontation clause guarantees defendants the right to see prosecution witnesses in person and to cross-examine them, unless they are truly unavailable. In cases that involve drugs, and many that do not, lab analysts’ work can be a critical part of the prosecution’s case. If the prosecutors want to use the reports, they should be required to call the analysts as witnesses.

Critics of the ruling last June argue that it imposes too great a burden and excessive costs on prosecutors. But in states where analysts have to testify, the burden is easily manageable. Ohio’s 14 forensic scientists appeared in 123 drug cases in 2008, less than one appearance each per month.

It is not clear why the Supreme Court is rushing to reconsider this issue. There are some differences in the rules on witnesses between Virginia and Massachusetts. But it may be that with Justice Sonia Sotomayor having replaced Justice David Souter, the dissenters believe they have a fifth vote to erode or undo last June’s ruling.

As a former assistant district attorney, some court analysts argue, she may be more sympathetic to the burden on prosecutors. As a circuit court judge, Justice Sotomayor did often rule for the government in criminal cases, but making predictions of this sort is perilous. Justice Antonin Scalia, one of the court’s most conservative members, wrote the majority opinion in Melendez-Diaz.

If the court changes the rule, it would be a significant setback for civil liberties, and not just in cases involving lab evidence. Prosecutors might use the decision to justify offering all sorts of affidavits, videotaped statements and other evidence from absent witnesses.

Mortgage Meltdown Casualty: Trust between banks — Time for Truth

Another casualty of the Mortgage Meltdown induced paranoia that is sweeping the credit and money markets: Banks no longer trust the indexes which they have relied upon for decades. In other words, they don’t trust each other. And they don’t trust the people who report on what is happening out in the financial marketplace. The simple fact is that they do NOT know how much they are paying or how much they are going to pay, or the actual trend lines in inter-bank lending. This basically slips the rug out of the entire credit infrastructure. 

What this means to the average Joe or Jane is that it adds uncertainty to an already chaotic marketplace. Uncertainty produces fear and fear produces increased risk aversion. Bottom Line: Interest rates are going up no matter what the central banks do. Loans will be harder to get. Asset values will decline because of the difficulty in obtaining financing that is usually associated with the purchase of those assets — like housing and mortgages. 

In terms of policy, it means that decision-makers in government and the private sector need to be honest and straightforward in their reporting of data.

Making lemons appear to be lemonade is going to further erode trust and confidence in the financial systems.

THOSE WHO COUNSEL CAUTION IN GIVING THE PUBLIC THE REAL FACTS ARE PROLONGING THE AGONY. HISTORY SHOWS THAT WHEN THE BAD NEWS IS OUT AND THE PUBLIC BELIEVES THAT IT IS ALL OUT, THE PROCESS OF HEALING AND REJUVENATION BEGINS. Until then, we are headed at best for a limping economy, with declining prospects. 

Pointing out sectors that have upticks does nothing to restore confidence in the overall system. Everyone understands that the failure here was systemic, not economic. Failure to address that issue will simply produce declining confidence in the markets until people start believing what they are told. They won’t believe it unless they can confirm it. And we all have access now to information that will confirm or deny the spin or reports that government and private sector leaders publish.

Time to fess up boys!!!!

N.Y. Libor alternate tries to avoid London’s pitfalls
Still, upcoming interest rate is unlikely to show bank risks have improved
SAN FRANCISCO (MarketWatch) — A New York-based measure of how much it costs banks to borrow money will try to circumvent problems dogging Libor, the London benchmark that sets rates for everything from adjustable-rate mortgages to interest rate futures.
Successful avoidance of some pitfalls that have undermined bankers’ trust in Libor, however, is unlikely to prevent ICAP Plc’s New York Funding Rate from mimicking at least one of its London counterparts’ key traits. That is, a gap with other interest rates that suggests borrowing conditions for the world’s largest banks are still quite stressed.
“At this point, the U.S. index won’t make much difference, but it may be a good idea six months from now,” said Brendan Brown, head of research at Mitsubishi (UFJ) Securities International, in London.
Bankers point to a raft of other indicators, from currency forward rates to swap spreads, to show that bank borrowing costs are still high even while other measures of credit risk have fallen. That discrepancy has been a source of nagging worry for investors and economists looking for proof that the worse of the credit crisis has truly passed.
In fact, an interest rate that side-steps some of the problems that have recently undermined investors’ trust in Libor may even show banks are paying higher rates than shows up in Libor.
A month ago, Libor made its steepest five-day advance since August after concerns emerged that some banks had been underreporting their rates, out of fear they would be penalized if outsiders knew how much they were paying for funding.
Icap (UK:IAPnewschartprofile) , a London-based inter-dealer broker that specializes in handling over-the-counter transactions like currencies and interest rates, is trying to discourage banks from fibbing about their borrowing costs by making its survey of 40 global banks anonymous.
Plus, rather than ask banks for the rate at which they can borrow short-term, unsecured loans — as the British Bankers Association does — ICAP will ask banks for their estimates of what the going rate is for the average bank.
There’s some urgency among banks, borrowers and the Federal Reserve to know just how costly it is for banks to tap the money market for their borrowings.
These funds are one of the main ways U.S. and overseas banks get capital for their own lending activities. If their costs are running high, they are likely to lend less, a headache for consumers and businesses that rely on flush conditions at banks to fund new mortgages, new auto loans, student loans, acquisitions and expansions.
And if the new measure does show Libor has been printing lower than the true cost of interbank borrowings, a lot of consumers and businesses with loans tied to Libor could get a nasty shock. It’s been estimated that loans and derivative contracts totaling roughly $150 trillion (more than $20,000 for every person on earth) are indexed or tied to Libor in some way.
In fact, the universe of financial instruments tied to Libor is so huge that some bankers are nervous that any efforts to tweak the way Libor is collected could make a bigger mess.
Libor “is extremely important,” said Terry Belton, head of fixed income strategy at J.P. Morgan Chase. “We would probably create more problems by changing it in a material way than we would solve,” he said.
Libor rises…
ICAP’s efforts to publish a new bank lending rate follows an unusual period where Libor as well as other bank lending rates have frequently topped central bank policy rates, meaning banks are paying more to borrow because of heightened credit and liquidity risk
The difference, or spread, between the three-month U.S.-dollar Libor and the effective federal funds rate rose to more than 80 basis points on Wednesday. Usually, dollar-denominated Libor tracks closely with the fed funds rate. See earlier story on Libor’s rise.
By other measures, costs for banks’ borrowing needs have also been rising. The spread between three-month Libor and overnight index swaps has been climbing since February. What’s known among credit analysts as the BOR-OIS spread gives a view of Libor that strips out expectations that central banks will raise or lower rates.
These spreads “are all signs that there is stress in the market,” said Eoin O’Callaghan, market economist for BNP Paribas in London.
Such signs of stress are worrisome for the Fed, which has $462 billion in special lending programs to financial institutions as it tries to get money flowing in frozen pockets of the credit market.
Notwithstanding efforts by the Fed and other central banks to “meet panic demands for liquidity” by making more funds available to financial institutions, still “many markets are not functioning normally,” noted Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, in a speech Tuesday.
In contrast to rates that reflecting bank costs, indexes that track perceived credit risk and rates paid by corporations have been tumbling. Markit’s index of high-grade, North American credit default swaps has fallen about 27% since late-March. The spread between safe-haven 10-yield Treasury notes and bonds issued by companies with Baa ratings, which indicate riskier but still investment-grade companies, has also narrowed since mid-March.
… But not by enough?
Amid these concerns, other measures of short-term borrowing, such as the over-the-counter market to buy currencies like euros or sterling for future delivery, also suggest Libor just may not be high enough.
The British Bankers Association gets the Libor “fix” by polling global banks including Citigroup’s Citibank (C

and Lloyds TSB Group (UK:LLOYnewschartprofile) every day on what they are paying for funds.

The group says it doubts its Libor panel banks are contributing to deliberate distortions of the rate. Still, it has brought forward a review of how the rate gets calculated. See related story. And banks may be paying more for their loans than Libor suggests for purely innocent reasons.
It’s just not that liquid a market, bankers note.
Plus, the massive and surprise losses resulting from the U.S. housing market collapse have created a lot of variation among financial institutions when they try to borrow money. Banks that are light on funding or carry poor credit are likely to pay a far higher rate in the forward currency market, for instance, than the Libor panel would reflect.
“This is a problem that is temporary in nature and reflects the dislocation in the financing market,” J.P. Morgan Chase’s Belton said. He predicts that as central banks inject more money into the financial system “and as things there improve, we’ll move back to a world where all banks in panel have similar financing rates.”
Banks are likely paying more to borrow money, whether that’s reflected in Libor or another indicator, simply because supply has dried up. Banks, mutual funds and corporations that lend in the bank borrowing market are keeping more cash to themselves.
“Confidence in and between banks has been dented significantly after the Bear Stearns Cos. (BSC

) episode. Investors and banks are reluctant to lend cash to banks, effectively wondering who the next casualty will be,” said economists at Societe Generale in a report.

In mid-March, Bear Stearns came close to collapse, causing fears of a run on Wall Street.
“Also, money market funds, which are liquidity providers, continue to fear redemptions and invest at very low maturities,” they noted.
New York fixing
Since the NYFR will be based on a survey, rather than actual transactions, there still will be no way of telling if banks are giving an honest assessment of borrowing costs.
“There’s not really an ultimate check on whether the rates banks are reporting are the right rates,” said Brown of Mitsubishi Securities.
One thing that will change, however, is the time zone.
The British Bankers Association gets the so-called fixing of rates at 11 a.m. London time, or about 6 a.m. New York time. That’s about three hours before banks in the United States can start borrowing money in U.S. dollars, so may not accurately reflect the price of costs facing banks trying to tap these dollar markets.
ICAP’s planned NYFR rate instead will query banks at 9:30 a.m. New York time.
ICAP’s planned rate will also attempt to give a better view of what’s going on in the market for dollar-based bank borrowing than one of its current measures, eurodollar deposits. It gets this data from bid-ask spreads ICAP users provide for these deposits and supplies it to the Fed, which publishes the bid rate daily on its H. 15 statistical release. Go to the Fed’s Web site.
As the financial markets have convulsed, those eurodollar deposit rates have increasingly reflected a wider bid-ask spread, perhaps skewing the published rate.
“Since August, and especially since Bear Stearns, our desk has been setting that range very wide to reflect that trading is a lot messier,” said Lou Crandall, chief economist at Wrightson ICAP, the New York research arm of ICAP.
“It made us look for a more objective way to say where rates are trading,” he said.
NYFR is designed to give a clearer snapshot of bank borrowing costs. But it’s not designed to become the next Libor, which is the benchmark for so many loans and derivatives, Crandall stressed.
“This is designed to supplement Libor, not replace it,” Crandall said. “The series we had been publishing was no longer adequate for that purpose.” End of Story
Laura Mandaro is a reporter for MarketWatch in San Francisco.
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