In a nutshell, moratoriums will do very little for homeowners or the courts. First unless a specific moratorium order states that it bars sales and evictions it is only the foreclosure action that is temporarily suspended. At some point in the near future, homelessness will spike because of a new tidal wave of foreclosures.

Second a moratorium does nothing to forgive payments. So when the moratorium expires, all the payments are due unless you ask for and receive some sort of forbearance agreement from servicers (who probably don’t have any authority despite all appearances to the contrary).

Third, don’t rely upon your own interpretation of what you read on the Internet. There is no substitute of a three year legal education and law degree and there is no substitute for decades of experience in and out of the courtroom.

Fourth, DO use this time to prepare for a confrontation with the banks and companies claiming to be servicers. Do not admit to anything —even the existence of your obligation even if that makes you feel uncomfortable.

Fifth start the administrative process by sending out a Qualified Written Request under RESPA and a Debt validation Letter under FDCPA. But stop thinking you know how to do that. Overbroad generalizations and conclusions are a perfect excuse not to answer you or evade your questions.

*Neil F Garfield, MBA, JD, 73, is a Florida licensed trial attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.*


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The Neil Garfield Show with Attorney Charles Marshall: What areas should you target when you litigate?

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Or call in at (347) 850-1260, 6pm Eastern Thursdays

What areas should you target when you litigate?

In foreclosure litigation there are many pointless rabbit-holes an attorney or homeowner can attempt to go down, but they serve only to confuse and distract.  Instead, litigants should focus on areas where actual leverage can be obtained.  Neil Garfield has warned litigants not to focus on the lender’s vulnerabilities that are not provable.

Recently Neil Garfield held a consultation with an attorney who requested advice on how to deal with two defective instruments.  His advice to the attorney was to cancel two instruments:

(1) as assignment allegedly signed by an authorized person from MERS as nominee for BNC Mortgage which had ceased to exist 3 years earlier. (2) appointment of substitute trustee by the assignee of the void assignment. The lender was handicapped by the cancellation of these instruments.

Despite all of the fraud and fabrication that continues, it is the bias of the courts which has created an uneven playing field that prejudices homeowners.  Therefore homeowners must obtain meaningful discovery related to standing and questionable transfers.  This should be done by examining the chain of title, a forensic examination of the note, trust closing date, and other violations of law by the servicers.  We also recommend that you hire an experienced investigator upfront to root out any major discrepancies that will be beneficial later in litigation (we recommend Bill Paatalo at

In order to get something tangible that can be used to leverage your case consider strategic depositions of the pawns the servicer uses to verify ownership. The person signing off on the certification of note possession who files an affidavit claiming the servicer has standing to foreclose is vulnerable because they possess limited knowledge about the actual creditor, movement of the note and have no personal knowledge.

If you spoke with the Master Servicer or Trustee of a mortgage-backed trust they would tell you they don’t own anything and they are only a reporting agent.  They would direct you to the loan servicer for anything related to the loan.  The Servicer actually hired the foreclosure mill law firm to file the foreclosure – and is engaged in camouflaged equitable subrogation.

Foreclosure occurs because fraudster servicers routinely create a MERS assignment of mortgage coupled with a fraudulent note, add an undated stamp on a blank page of a note or allonge and create standing where none exists.  Add a corporate witness who knows nothing about the loan’s movement and boarding process, and the fact they are trained to parrot words like, “normal course of business” or “policy and procedure”– and the court will rule in their favor if not challenged.

Even worse, there is a new foreclosure platform that has morphed into a business model where new servicing companies who have nothing to do with the loan are being created out of thin air (think SPS or Ocwen) claiming they are the servicer for a bogus trust and the court requires NO INQUIRY INTO THE PURPORTED TRUST AT ALL!  The court accepts the validity of the trust without proof despite state requirements for a trust to conduct business in the state and be registered.

In order to gain traction you should depose:

  • The Complaint Verifier
  • Certification of Possession of Note Witness
  • Affidavit in Support of Summary Judgment Signers
  • Asset Manager/Trustee/Master Servicer of a Plaintiff Named Trust

Depose the corporate witnesses for trial and subpoena dues tecum the “policy and procedure” manuals, loan transfer histories and any deposition they intend to rely on.  Anticipate heavy resistance but remember if they don’t turn over the necessary documents those claims must be excluded from testimony.

Southern California attorney Charles Marshall advises homeowners to remember that in judicial foreclosure states where typically the borrower is the defendant, counterclaims or cross-complaints can sometimes be used to bring the legal pleading approach described.

In order to prevail in discovery, motions to compel discovery, summary judgment and at trial, you will need an attorney who can litigate like a mad dog and who is not afraid to become a Country Club pariah.  At the end of the day this is about verbal and evidential combat.

This article and the radio show are for educational purposes only and are not legal advice.

Charles Marshall, Esq.

Law Office of Charles T. Marshall

415 Laurel St., #405

San Diego, CA 92101

Phone 619.807.2628

Just another Friday: NY Servicers Dealt Blow- Ocwen’s $30 Million Settlement


NY Servicers Dealt Blow; Ocwen’s $30 Million Settlement; Brexit: Renegotiations and Margin Calls?

At Happy Hour tonight, besides talking about refis, you can throw this one out: the number of homes worth $1 million has doubled in the last 4 years. Of course 2012 was pretty much the bottom of the real estate market, and it has been the big urban areas like San Francisco and Manhattan that have led the charge higher. Heck, in San Francisco, the median home price is over $800k. (One bedroom apartments in San Francisco rent for $3648 a month.) Seems like a little toppy – but rates are helping…


As servicing values continue to slip, and companies question whether or not they want to own a servicing portfolio and who is a natural buyer of servicing if banks stop, New York imposed new requirements yesterday on mortgage lenders to maintain abandoned houses before foreclosure. Viewed as a blow to servicers, the law signed by Gov. Andrew Cuomo threatens banks with civil penalties up to $500 a day for failing to maintain residential properties once they’re aware of vacancies. The new law also establishes an electronic statewide registry of abandoned homes and a state hotline where neighbors can report them, and requires notices to mortgage borrowers emphasizing their right to stay in houses until foreclosure. And a related measure establishes a State of New York Mortgage Agency fund to buy and sell abandoned properties at below-market rates and demolish those beyond repair.


On top of that, the CFPB urged mortgage servicing firms to upgrade their technology to reduce errors and improve efficiency. The CFPB Mortgage Servicing Report is a special edition of its supervisory highlights report focusing exclusively on mortgage servicing. The CFPB found that “some mortgage servicers continue to use failed technology that has already harmed consumers, putting the company in violation of the CFPB’s new servicing rules.” The report did not break new ground but it did serve as a reminder of the structural importance of mortgage technology firms under the new regulatory regime.


“Mortgage servicers have failed to make significant investments in technology and compliance systems, resulting in substantial harm to consumers,” according to the report. It is recent stuff, reflecting a detailed look at supervisory exams of mortgage servicers between January 2014 and April 2016, found that outdated and deficient technology can lead to greater risks for borrowers.


CFPB financial reporter Kate Berry wrote, “The CFPB found that some servicers failed to honor loan modifications after a loan gets transferred. Borrowers also faced substantial delays in receiving permanent modifications because of incompatible systems, the report found.


‘Mortgage servicers can’t hide behind their bad computer systems or outdated technology,’ CFPB Director Richard Cordray said in a press release. ‘Mortgage servicers and their service providers must step up and make the investments necessary to do their jobs properly and legally.’


“The CFPB will be conducting targeted reviews this year of mortgage servicers’ compliance with fair lending laws. The reviews will include looking at servicers that are creditors, such as those that participate in a credit decision about whether to approve a mortgage loan modification… Mortgage servicing has been a top concern for the CFPB since it first began examining financial institutions, but examiners continue to unearth problems. CFPB examiners found problems with loan modification acknowledgement notices, including notices sent too late, with incorrect information or deceptive statements.


“The report cited at least one servicer that failed to send any loss mitigation acknowledgement notices to borrowers due to a ‘processing platform malfunction over a significant period of time.’


‘The magnitude and persistence of compliance challenges since 2014, particularly in the areas of loss mitigation and servicing transfers, show that while the servicing market has made investments in compliance, those investments have not been sufficient across the marketplace,’ the report stated. The agency also updated its mortgage servicing exam manual, which includes a section on how servicers handle complaints and requests by troubled borrowers.”


As servicers wonder if it’s worth it, the government continues to collect fines, contributing to its bottom line, the latest to write a big check is Ocwen – “New Co” spelled backwards. Do you think servicing loans is something you’d really want to do? Ocwen Financial Corp. agreed to pony up $30 million to resolve lawsuits that claimed it didn’t properly include disclosures for loans it was servicing. (After the announcement the stock rose slightly, but is still down over 80% in the last year.) “The lawsuits, which were brought by Michael Fisher and the U.S. Justice Department, alleged that Ocwen didn’t make required disclosures in connection with the Home Affordable Modification Program, a government program introduced after the housing crisis to help struggling homeowners avoid foreclosure.”


Speaking of regulators and mortgages, last week the MBA filed a petition for exemption with the Federal Communications Commission (FCC) seeking an exemption for mortgage servicing calls from the prior express consent requirements of the Telephone Consumer Protection Act (TCPA). The MBA is seeking this limited exception in order to continue to encourage proactive communication with mortgage loan borrowers and early engagement with financially struggling homeowners. “Following the financial crisis, many federal regulators – among them the CFPB, FHFA, FHA and Department of Treasury – have mandated protocols for reaching out to borrowers through outbound communications when a homeowner is delinquent. States have enacted similar requirements. These communications can provide the homeowner with critical information about their options to save their home. In today’s environment, this often means through outbound calls or text messages to a consumer if the outreach is going to be effective.


“Unfortunately, the TCPA can frustrate these communications by imposing the threat of significant liability for making outbound communications to cell phones. Congress recognized this and passed an amendment to the TCPA late last year exempting calls made to collect a debt owed to or guaranteed by the government from the prior express consent requirements. The FCC has promulgated a proposed rule in response to the amendment. MBA appreciates this exemption and filed our comments on the rule.”


This “federal debt” exemption, even if construed as broadly as possible, will not extend to all residential mortgage loans.  FHFA recognized that a mortgage servicing exemption is appropriate and necessary to ensure that all borrowers are able to receive communications they need through a method likely to reach them. The FHFA comments on the FCC’s rule call for just such an exemption. MBA agrees that these communications are vitally important for both borrowers and their communities. Thus, MBA has submitted a petition for a limited exemption from the prior express consent requirements for mortgage servicing calls.”


And, in another PR black eye for the industry, Ben Lane with HousingWire reports that, “According to the FTC, a California-based law firms bilked millions of dollars out of homeowners who were facing foreclosure by telling them that they could join a ‘mass joinder’ lawsuit against their respective mortgage note holders that could discharge their mortgage entirely, provide monetary relief, or both.”


Fannie Mae has made the following updates to the Servicing Guide: Retirement of Delinquency Counseling Requirements for Community Lending Mortgage Loans, Fannie Mae HAMP Modification Termination, Foreclosure Title Costs, Further Reduction of Servicing Requirements for Florida Acquired Properties, Property Insurance Reimbursement Limits, Mortgage Release Policies and Procedures and other Miscellaneous Revisions. Please read the Announcement for details.


Freddie Mac issued a recent servicing bulletin focused on HAMP, lender-placed insurance, and reporting a short sale to the IRS.


In somewhat servicing-related news, Black Knight Financial Services announced that it is continuing its recent expansion efforts with the acquisition of Motivity Solutions, which provides customized mortgage business intelligence analytics to mortgage lenders. The Sherman’s Motivity Solutions offerings will be integrated with Black Knight’s LoanSphere Product Suite, including the LoanSphere Data Hub, which will provide clients with insights into their origination and servicing operations and portfolios.;…………………………….

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