Peaking Inside the Mind of a Trial Lawyer

Knowing that there was fraud, robo-signing, fabrication, forgery is not enough. The trial lawyer must know how to prevent admission of false facts into evidence and how the robo-witness testimony will be discredited.

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People often ask us to do a title and securitization report, as though that is going to be the golden keys to the kingdom. We tell them that a flat title report and a flat securitization report is not only incomplete it is misleading. For example, when documents are uploaded by an unidentified person to, many people respond by “Found it!!”
In truth all that has been found is the CLAIM that the loan was securitized and the CLAIM that a Trust exists and the CLAIM that the Trust actually acquired the loan. There is no restriction on what can be posted to Many a fraudulent foreclosure has been the result of a legal sleight of hand — uploading what appears to be trust documents even if they are unsigned and lacking the exhibits referred to in the Pooling and Servicing Agreement. THEN they ask the court to take judicial notice or at least to presume that a copy of the document produced in the courtroom is an authentic, valid document giving the Trust the right to appoint servicers, agents etc.
Like everything else in 95% of all foreclosure proceedings, they are based upon self serving documents fabricated by undisclosed third parties who have nothing to do with the creation of the trust, the activities of the trust, the acquisition of loans or the foreclosure of mortgages that were never owned by the trust.

Title and securitization reports should neither be (a) a straight up report on title history (going back 2-3 owners) and securitization search and/or (b) analysis of the real story PLUS ways to undermine the foreclosure case and win the day. I have a track record of winning those cases and the method I used is the basis for all our work.


What lay people do not understand because they have no education and training to understand it, is that trial work is like brain surgery. The brain surgeon knows that genetics and bad life choices are what caused the patient to be in need of his services. He might even believe that companies should not be allowed to push the foods and medications on people that undermine health. But when he/she steps into the operating room, he/she has a much narrower scope — drilling and cutting into the scull to get to the part of the brain where he can perform effective repairs. All the rest doesn’t matter at that moment.


A trial lawyer prepares for trial from the moment he receives a case. A good trial lawyer develops two narratives — one is the internal narrative that he/she knows and will serve as the basis for making decisions and assumptions in discovery and at trial and the other is the external narrative which is the limited story and is directly related to the (a) the things he/she wants to block from evidence and (b) the things he/she wants in evidence. When he/she steps into the court room the internal narrative is good to know but is mostly irrelevant to the issues that will be heard at trial.


So for example, people say securitization is bad or illegal. Actually it is not and there is no reason why it should be. Diluting risk among many investors is the cornerstone of capitalism.


The internal narrative is that the way securitization was practiced in real life was wrong, illegal and probably criminal. The internal narrative is that the Trust was never funded and therefore could never have purchased any loans. These facts are known in the mind of the trial lawyer but he/she will make no attempt to prove them because the Court in all likelihood would not allow it. But KNOWING the internal narrative leads to conclusions about weaknesses in the case of the opposing attorney. If the Trust never acquired the loan, the Trust had no right to be appointing servicers, agents, etc. and the Trustee had no power or relationship to the loan in litigation. The internal narrative is also that the loan contract never existed.

The external narrative (the one used in court) is that there is insufficient evidence that the Trust owned the subject loan, and insufficient evidence that the so-called servicer had any right to service the loan.


Using the external narrative the trial lawyer attacks the inconsistencies between the testimony, the trust documents (paying special attention to the exhibits to the PSA which are frequently blank), and the attempt to hop over those defects by suddenly coming up with a Power of Attorney that STILL comes from the Trust (or a third party who was never in the alleged chain of documents proffered by the attorney for the foreclosing party).


The trial attorney attacks by using objections and cross examination to reveal the defects in the position of the party alleging it has the right to foreclose and in the position of the servicer who sends a representative of the servicer to court as a robo-witness who in truth knows nothing.


We help by preparing the best possible route for discovery strategy and preparation for trial.


For a long time we provided a flat report that was put into the hands of pro se litigants and lawyers who really were not trial lawyers and therefore did not have an adequate strategy for using the reports.  There are many vendors who produce a 2 dimensional report promoted as 3 dimensional. It is a flat report that tells the customer nothing about how to use the report and gives unfiltered opinions about potential defects in the foreclosure case.


We provide guidance as to what services should be ordered but we cannot provide legal advice unless it is (a) me on the phone and (b) a case pending in Florida. That is why we strongly recommend that when booking a consult, you have on the line an attorney who is licensed to practice in the jurisdiction in which the property is located.


After attempting to drive down the price of services by commoditizing the reports, it is now apparent that such reports are at best helpful only in the hands of a good trial attorney and at worst, misleading in that inexperienced pro se litigants and lawyers take the report into court as though it is evidence and attempt to get the court to rule upon what is obviously a document, which is hearsay.


So we are now concentrating on providing highly interactive paralegal services to support lawyers and their clients when litigating a foreclosure case. Yes we still provide reports, but our focus is now on actually drafting the operable pleadings, motions and memoranda needed to properly litigate a case and to provide actual scripts that can be used as guides for what actually happens in court.


Watch these pages for further assistance. We are re-starting our seminar series — “Garfield Continuum” with a short inexpensive seminar called “OBJECTION!” for lawyers and their clients.

Quiet Title “Packages”

The promise by some title search vendors of a cheap lawsuit that will get rid of your mortgage is generally not based in reality. You might be able to beat a foreclosure with title issues but you probably won’t get rid of the mortgage or deed of trust without pleading and proving that the mortgage or deed of trust is completely void — like it never should have existed or doesn’t exist now by operation of law.

Get a consult! 202-838-6345 to schedule CONSULT, leave message or make payments.

There are many people out there who are pursuing a business model of offering a quiet title package, sometimes using the word “Turnkey.” Most of these people are well-meaning but not lawyers and they are lacking basic legal knowledge. While the title work by people like BPInvestigations is excellent, the promise by some title search vendors of a cheap lawsuit that will get rid of your mortgage is generally not based in reality. You might be able to beat a foreclosure with title issues but you probably won’t get rid of the mortgage or deed of trust without pleading and proving that the mortgage or deed of trust is completely void — like it never should have existed or doesn’t exist now by operation of law.

Personally I think that condition is satisfied by TILA rescission, but the courts are still rebelling against the idea of giving that much power to borrowers. So while I am certain it is correct, I am equally certain that the defense shield raised by the banks is working even though it does not pass muster legally and will probably be struck down again by the US Supreme Court.

While these offers may sound attractive there are many pitfalls and trap doors that will prevent a homeowner from actually achieving anything by focusing on a strategy that is dependent upon a court issuing a declaration quieting title. The very word “quiet” should give you a hint. There must be an actual controversy or dispute involving a present situation requiring the court to decide the rights of the parties. Courts are NOT in the business of issuing advisory opinions.

The Marketing title says it all — it is a “turnkey” “quiet title” package suing for damages. There is no such thing as turnkey title — they don’t know all the possibilities of defects in title. And they won’t know it even after they produce a title report either, although they will have a pretty good list of possibilities of title defects.
Without a title expert (usually an attorney) analyzing the title going back to the last time that a real title examiner looked carefully at title to the subject property, nobody knows what is a defect, what can be corrected by affidavit, and what prevents the grantee of an instrument from doing anything with it. This might mean going back 30 years or more.


Quiet title is an action in equity that is a complaint for declaratory relief wherein the court says “here are the names of the stakeholders and here is the stake of each holder.” But no court is going to allow the lawsuit for that without pleading a present controversy — because that would be the Court giving legal advice.

So you would have to say “A is the owner of the property but B (or B, C and D) is/are saying it is the owner of the property (or B is saying that it has a valid encumbrance upon the land. I am trying to sell, refinance the land and I can’t complete the transaction because of B’S claim, which I think is bogus because [fill in the blank, e.g., the mortgage is a void or wild instrument because …]. So in order to complete my pending transaction I need a declaration from the court as to whether B is a stakeholder, like they say or B is not a stakeholder like I say.” If you don’t have those elements present the court will dismiss the lawsuit 99 times out of 100.

The promise of damages is bogus. That is an action at law that could be derived from any number of breaches or torts by the defendant(s). It could never derive from a turnkey quiet title package even if there was one. It would be a different lawsuit saying B had this duty, they breached it, or committed an intentional tort, and that was the proximate cause of actual damages to me that include x, y and z.


And as many people have found out when they sued for quiet title and had their suit dismissed or judgment entered against them there are two main reasons for that. First, they could not properly plead a present controversy or the competing “stakes” in the property. Second, they could not tie in ACTUAL damages to a breach of duty or intentional tort by the defendant. Proximately caused means legally caused.

Most judges view such lawsuits as “”B is bad. Give me title and whatever monetary damages you think will punish them.” The homeowners are skipping the part that where there are no actual damages you don’t get punitive damages. You can’t sue for JUST punitive damages. If you don’t have actual damages you don’t have standing to sue. The Latin for this is damnum absque injuria. Just because somebody was negligent or greedy doesn’t mean you can sue if you are not a party who suffered actual damages from their illegal act.

US Bank Antics versus Their Own Website

Editor’s Note: In answer to the many inquiries we get, I am ONLY licensed in the State of Florida. The reason you see my name pop up in other states is that I am frequently an expert witness and trial consultant on cases, working for the lawyer who is licensed in that state. My law firm, Garfield, Kelley and White provides direct representation in most parts of Florida and litigation support to lawyers in Florida and other states.

Many lawyers are now well versed enough to proceed with only a little help from us. But some need our templates, drafting and scripts for oral argument of motions and other court appearances. I have not appeared pro hac vice in any case thus far and I doubt that I will be able to to do so. So if you want litigation support for your cases, the lawyer should contact my office at 850-765-1236. If you are unrepresented it will be much more challenging to provide such support as it might be construed as the unauthroized practice of law.


US Bank is popping up all over the place as the Plaintiff in judicial actions and the initiator of foreclosures in non- judicial states. It is one of the leading parties in the shell game that is mistaken for securitization of loans. But on its own website it admits against the interests that it has advanced in courts across the country, that it has NO POWER TO FORECLOSE or to pursue any other remedies.

US Bank pops up as the foreclosing party as trustee for some supposedly securitized asset pool masquerading as a REMIC trust ( which we all know now was breached in virtually every way, which is why the IRS granted a one year amnesty for the trusts to get their acts together — an action of dubious legality).

Both US Bank and the the Pooling and Servicing Agreement will usually state flat out that the servicer makes all decisions and takes all actions relating to the borrower and the borrower’s payments. There are several reasons for this one of which is the obvious conflict that could occur if the the servicer and the trustee were both bringing foreclosure actions.

But the other reason, the hidden one, is that the banks want to keep the court’s attention on the borrower’s contract and keep it away from the lender’s contract which is quite different than the borrower’s contract. And THAT will invite inquiry as to how or even if the two contracts are related or connected such that the mortgage encumbrance gives rights to the trust beneficiaries such that the collection and foreclosure efforts will inure to the benefit of the trust beneficiaries in the REMIC trust.

So why is US Bank violating both the content and intent of the PSA and its own website? In my own law firm I have two entirely different foreclosure cases — one in which US Bank is the foreclosing party and the other where the servicer started the foreclosure action. Both loans are claimed to be in the same trust although one is in California and the other is in Florida. Why would Chase bank as servicer started an action? Even worse, why did Chase bank start the action as though it was the creditor and claim that there was no securitization? [In the Florida case I am lead counsel whereas in the California case I am only an expert witness and consultant].

I am not sure about the answers to these questions but I have some conjectures.

In the Florida case, US Bank is bringing the case because the servicer can’t — it knows and its records show non-stop servicer advances to the trust beneficiaries of the REMIC trust that supposedly was funded and who purchased or originated the loans in the trust. In the California case, even though the servicer advances are still present it is non-judicial so it is easier for Chase to slip by without even pausing because unless the homeowner brings a legal action to stop the foreclosure sale it just happens. And then it is over.

But Chase is treading on thin ice here which is why it is now transferring the servicing rights —- and therefore the rights to litigate — to SPS who did not make the servicer advances. Of course the servicer advances are probably actually paid by the broker dealer who is holding the money of the trust beneficiaries without THEM knowing that the broker dealer has not used their money entirely for mortgage loans — and instead took a large chunk out as a “trading profit” when it was a tier 2 yield spread premium that should have been disclosed at closing.

One of the more interesting questions is whether the modification or refi of the loan renews the effect of TILA violations thus enabling the borrower to claim the undisclosed compensation, treble damages, interest and attorney fees. A suggestion here about that — most lawyers are ignoring the damage aspect of these cases and seeing the TILA has a defined statute of limitations that appears to have run. I would take issue as to whether it has in fact run, but even more importantly there is still an action for common law fraud unless blocked by a separate statute of limitations. The extra profits collected by those entities in the cloud of parties who served in various roles in the securitization process are all fair game for recovery or set-off against the amount claimed as due as principal of the loan. It can also be used to cause severe collateral damage — literally — because it would probably reveal that the mortgage encumbrance was never perfected by completion of the loan contract.

Both Chase and US Bank are going into bankruptcy courts in Chapter 11 proceedings and demanding adequate protection payments while the bankruptcy is proceeding, knowing and withholding the fact that the creditor is being paid every month and there is no default from the creditor’s point of view. This would be important information for the debtor in possession and the his attorney and the Judge to know. But it is withheld in the hope that the borrower/debtor will never discover the truth — and in most cases they don’t, unless they get a loan level account report based upon a solid securitization report which is based upon a good title report. see

Both US Bank and Chase are wiling to endure awards of sanctions for misleading the court as a cost of doing business because the volume of complaints about their illegal and fraudulent activities is nearly zero when compared with the total of all state court, federal court and bankruptcy actions. But now they are treading on even thinner ice — they are seeking to get turnover of rents with people who own multiple properties. Their arrogance apparently overcame their judgment. The owners of multiple properties frequently have substantial resources to litigate against the US Bank and Chase and now SPS. The truth is coming out in those cases.

Other Banks who say they are trustees simply direct the borrower or other inquirers to the servicer. But where US Bank is involved it is seeking profit at the expense of the trust beneficiaries and the owners of the real property involved. It seems to me that US Bank has gotten too cute by half and is now exposed to multiple actions for fraud. And I question whether the current revelations about US Bank BUYING the position of trustee has any legal support. I don’t think it does — not in the PSA, not in the statutes nor under common law.

SEE US Bank Role-of-Trustee-Sept2013

Why Title Insurance on “Securitized” Properties are Worthless

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Editor’s Comment:  
If you can’t rely on the title report issued by the title agent and title carrier, what chance do you have of getting clear title to that bargain you were picking up dirt-cheap?

While many writers are theorizing about title problems, there are actual cases being litigated but are largely missed in reporting because nobody catches their significance. It all boils down to this: title insurance companies are (a) going to avoid paying or defending a claim that they deemed is not covered by the title policy and (b) generally, even when you would expect that they would be liable for such damages they cannot responsible for damages caused by title defects arising out off record transactions like in MERS. The courts are heavily favoring the title companies in most cases.

Hot off the presses, Mark A Brown and Christopher W Smart have published an article in The Florida Bar Journal July/August Edition starting on page 47–see link below. While they disagree with some of the rulings contained in that article it is obvious that one way or the other, you are pretty much screwed when dealing with foreclosure properties unless you have safeguards in place by renegotiating the contents of the title policy (something we were successful at here in Arizona), AND by obtaining cures of all potential title defects via Court Order. While this increases the expense of closing, is assures the buyer of something he is not getting now — clear title without clouds or defects and real insurance if the defects cannot be cured.

In cases involving foreclosure resulting from off record activity, even if the title insurer wins it will be years before the issue is resolved and if a temporary injunction is not entered preventing the new foreclosure from a pretender lender, the foreclosure will be allowed and so will the eviction. The worst case scenario is that the person buying such property for use or investment ends up, at a minimum, out of the house, no right to possession, no way to sell it, and no way to refinance it. No title, no possession and clawing their way back to the money or the house with the former “owner” and the title insurer fighting you every step of the way.

As the authors point out, if you have a contract to sell or finance your property, the buyer or financing entity is not going to wait around for 3 years while you figure out how to offer clear title. The very fact that there are many decisions, each in conflict with the other, presents an obvious cloud on title, which will stop any sale or financing, and probably presents a fatal defect in title for which the title carrier should pay you in full but (a) only if you make them through additional litigation and (b) without the damages you suffered during the long delays of seeking curative title instruments and litigating the rest of the case.

Does this make title insurance worthless? Yes, if you allow them to make exceptions for properties on which there was off record activity and they disclaim that that title is as reported in the policy. The position of the carriers, apparently supported by the courts, is that the title report given to you by the title company does not need to be correct and could even be negligent without any liability arising out of their conduct. Their liability is limited strictly to what is in the title insurance contract in its FINAL form, which often differs remarkably from the policy COMMITMENT.

For “unreasonable” delays there are a few scattered cases in which the insured buyer was allowed damages but then there is another fight over the right to recover attorney fees when you finally get them to pay — and no lawyer is going to take one of these complex cases on contingency.

If you already own property and you took no protective measures then you might want to initiate a transaction in which the property is refinanced or title changes to a trust or another party in which new title insurance is required. Then hire someone who knows what they are doing to hammer out the right title policy terms, and file a quiet title action to confirm that title is as reported. If you don’t own the property yet, then operate on the same assumptions and (a) make sure you actually have good title and (b) you actually have a title policy that will pay if the title had defects or was clouded.

It is insane that the title carriers are getting away with this. Everyone relies on the title report from the title agent and the title carrier. The way these cases are going, the buyer must always get an independent title and securitization review if they want to sleep at night. And closing without a licensed, competent attorney who is familiar with off record transactions like MERS, maximizes your risk even though it minimizes your expense. My suggestion is that you treat it as part of the cost of the house. If you spend another $3,000 it is money well spent.

At a minimum it would seem that if you are buying property you should obtain the combo title and securitization report here or elsewhere from someone who knows what they are doing.






COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO TITLE AND SECURITIZATION SEARCH, REPORT, ANALYSIS ON LUMINAQ

The Combo Title and Securitization Search, Report and Analysis, is meant to catalog the confusion created by Wall Street  — the manner in which they intentionally obfuscated the facts and how they are continuing a shell game. Since many people have asked if we can make this simpler I choose to answer their inquiries here. The answer is NO, we cannot make it simpler because it would alter our output into a work of fiction. This is particularly true where there is more than one loan on the property each of which was securitized differently or held differently.

The pretender lenders clearly want the judicial system, the legislative branches of government and the executive branch (particularly law enforcement) to focus exclusively on certain documents created for the express purpose of making the transaction LOOK like a simple mortgage transaction. If we allow our impulses toward simplicity to govern our actions we are falling into the trap they have set.

Here is an example of a recent response I wrote to one such customer who was confused after reading the materials from the COMBO:

What you received can be explained as follows, in brief:

  1. Facts: Documents and transactions of record — that’s the report and the copies of documents. A lawyer can take these facts and exhibits and create pleadings and correspondence based upon them because they are indisputable.
  2. Analysis: Using the facts and documents, you have received a title analysis and a securitization analysis. A lawyer can take this analysis and use it as a guide to focus on those issues that are most promising in your jurisdiction.

Most lawyers have reported to us that these elements are sufficient for them to direct their correspondence, litigation, motions and discovery. Some lawyers need more which might include compliance analysis (TILA and RESPA), loan level accounting, an expert declaration, expert testimony, or strategic advice concerning the use of the litigation support materials we have prepared. In the last 18 months we have seen an upsurge in loan level accounting, an upsurge in TILA and RESPA compliance analysis, and a sharp drop in need for expert declaration, expert testimony or strategic advice.

We are restricted in what services we perform for non-lawyers as it could be construed as the unauthorized practice of law. We cannot give legal advice to you without violating those laws. But we CAN give advice to your lawyer on all aspects of the case.

The materials are always conflicting because that is the nature of securitization as it was practiced by the players. Since their behavior was convoluted and conflicting it is inevitable for us to report that as a fact and include it in our analysis. For example, you might have read in your analysis and on the blog ( that the loans are CLAIMED as being owned by an asset-backed pool, which may only be a general partnership notwithstanding the use of the word “Trust” or “Trustee.” The issue is further complicated by the fact that the loans claimed lack any trail of documentation transferring the loan documents to anyone. Then the issue is further complicated by the fact that the loan originator is either a non-depository lender or a depository institution, either one acting more as mortgage broker than a lender, hiding the real lender from the borrower. These facts and analysis raise legal issues that may apply to your case but only a lawyer licensed in the jurisdiction in which the property is located could advise you as to what to do with these facts and those analyses or what steps to take. Any decision you make should be based on the advice of such an attorney and not merely on the basis of the reports and analysis.

There are many such examples in which the parties claiming to be lenders or creditors are confronted with facts and documents which contradict their position. Thus the intricate and often contradictory information you see is simply a compilation of the information arranged and analyzed in ways that assist attorneys in choosing their strategies and tactics. We cannot change the facts to make them simple without changing the story. Telling you the name of a “Trust” would mislead you into believing that the “Trust” exists or ever held the loan as an asset. The situation is further complicated by the bailouts, subsequent trading of the mortgage backed securities, insurance payments and other payments by third parties. Application of these facts and local law is the exclusive province of a local licensed attorney.


Securitization Search: Why You Need the PSA

Quoted from April Charney — I’m not sure of the source. She is right on every point.PSA= Pooling and Servicing Agreement

EDITOR’S NOTE: Glad to see that April is doing what the rest of us are doing — going deeper and deeper. There are two things you need — the loan specific title search with analysis and the securitization search, report and analysis. One tracks the chain of title the other tracks the chain of money. You must track both in order to avoid the “proffers” and bogus representations of opposing counsel. The only thing I would add is that the Prospectus, Assignment and Assumption Agreement, Distribution reports and “re-stated” agreements tell a long tale as well.

The search for the securitization documents is not as simple as you might think. The claim of some “Trustee” for a “pool” is never backed up by documents showing the full chain of title of the loan, because the receivables were assigned, not the loan. More than one pool can often be found claiming “ownership” of a loan that meets MOST of the characteristics of your loan, but not all of them. It is these inconsistencies that enable you to chip away at the credibility of the pretender lenders.

COMBO TITLE and SECURITIZATION Search, Report, Documents and Comprehensive Analysis

You must realize that while the original PSA is a good starting point, it isn’t the ending point. That is because of the the dissolution of hundreds if not thousands of these special purpose vehicles which was easy because they were never officially formed in the first place. You must realize that the point of fact is that there is a “claim” that the loan is in a “pool” which may or may not have ever existed, but that the the documentary trail shows it was never really assigned tot he pool. So the money trail leads us to those people who have an actual interest in the loan — only after you can make the point that ALL transactions by or relating to the “pool” must be accounted for and allocated to individual loans.

My opinion, is that the the money people, if they can be found, have an interest that can imposed by equity and not by law. Everyone else is simply out to line their own pockets without ever having invested a dime in the loan transaction.


“You have to get the PSA and the mortgage loan purchase agreement and the hearsay bogus electronic list of loans before the court. You have to educate your judge about the lack of credibility or effect of the lifeless list of loans as the Uniform Electronic Transactions Act specifically exempts Residential Mortgage-Backed Securities from its application. Also, you have to get your judge to understand that the plaintiff has given up the power to accept the transfer of a note in default and under the conditions presented to the court (out of time, no delivery receipts, etc). Without the PSA you cannot do this.

Additionally the PSA becomes rich when you look at § 1-302 (b) which says that the obligations of good faith, diligence, reasonableness and care prescribed by the code may not be disclaimed by agreement, but may be enhanced or modified by an agreement which determine the standards by which the performance of the obligations of good faith, diligence reasonableness and care are to be measured. These agreed to standards of good faith, etc. are enforceable under the UCC if the standards are “not manifestly unreasonable.”

The PSA also has impact on when or what acts have to occur under the UCC because § 1-302 (c) allows parties to vary the “effect of other provisions” of the UCC by agreement.

Through the PSA, it is clear that the plaintiff cannot take an interest of any kind in the loan by way of an “A to D” assignment of a mortgage and certainly cannot take an interest in the note in this fashion.

Without the PSA and the limitations set up in it “by agreement of the parties”, there is no avoiding the mortgage following the note and where the UCC gives over the power to enforce the note, so goes the power to foreclose on the mortgage.

So, arguing that the Trustee could only sue on the note and not foreclose is not correct analysis without the PSA.
Likewise, you will not defeat the equitable interest “effective as of” assignment arguments without the PSA and the layering of the laws that control these securities (true sales required) and REMIC (no defaulted or nonconforming loans and must be timely bankruptcy remote transfers) and NY trust law and UCC law (as to no ultra vires acts allowed by trustee and no unaffixed allonges, etc.).

The PSA is part of the admissible evidence that the court MUST have under the exacting provisions of the summary judgment rule if the court is to accept any plaintiff affidavit or assignment.

If you have been successful in your cases thus far without the PSA, then you have far to go with your litigation model. It is not just you that has “the more considerable task of proving that New York law applies to this trust and that the PSA does not allow the plaintiff to be a “nonholder in possession with the rights of a holder.””

Bank of New York Slammed for Misrepresenting Standing


Judge Todd also stated that additional discovery is to be produced when the foreclosure involves a securitization, lost note claims, or a holder in due course challenge (which may arise in the context of the purported assignment of a toxic loan to a securitized trust prior to the trustee of that trust instituting a foreclosure action, as well as any predatory loan claims against the original lender). Judge Todd recognized that there are dozens of legal issues and inquiries where a foreclosure involves a securitization, and that a borrower has both the right to know who owns the mortgage loan and whether a foreclosing party has the legal right to foreclose.


Posted on July 6, 2010 by Foreclosureblues

Editor’s Note….This case and outcome in favor of the homeowner was a direct result of obtaining an accurate title and securitization report from a qualified expert that contradicted the “alleged” evidence of the foreclosing plaintiff and provided substance that enabled the judge to rule in favor of the homeowner.


Today, July 06, 2010, 30 minutes ago

Jeff Barnes Esq.

July 6, 2010

In an extremely well-reasoned and detailed written opinion, New Jersey trial court Judge William C. Todd has issued a 53-page (yes, fifty-three page) Order dismissing a foreclosure action filed by Bank of New York as Trustee for Home Mortgage Investment Trust 2004-4 Mortgage-Backed Notes Series 2004-4, Docket No. F-7356-09, Atlantic County, New Jersey. The matter was decided on June 29, 2010 and the formal opinion was approved for publication this week after the matter was tried at the end of June, 2010.

The opinion sets forth an incredible analysis of a host of issues involving foreclosure in securitization contexts and highlights why a foreclosing plaintiff must comply with its obligations to prove standing in order to be able to pursue a foreclosure action. While we do not summarize the entire holding here, we do want to point out some of the significant findings.

The court found that there was no meaningful attempt by Bank of New York (hereafter “BONY”) to comply with applicable New Jersey procedural rules requiring a recitation of all assigments in the chain of title. BONY simple alleged that it had acquired possession of the note prior to the litigation being filed. However, the evidence at trial failed to establish this allegation, with the Court noting that there were missing documents incident to the securitization of the loan including the mortgage loan schedule that should have been attached to the mortgage loan purchase agreement. The Court also found that the “MERS assignment was potentially misleading”.

The Court found that there was a failure of proof as to BONY’s legal standing, warranting dismissal of the action and conditioning any refiling on a certification that the plaintiff is in possession of the original note at the time of filing. This is in line with the recent action of the Supreme Court of Florida which, as of February 11, 2010 by Administrative Order, requires all residential mortgage foreclosure complaints to be verified. It is no secret that Florida trial courts have and continue to dismiss foreclosure actions which do not comply with the verification requirement. It is hoped that the courts of New Jersey will adopt Judge Todd’s well-reasoned analysis and dismiss foreclosure complaints which do not comply with the New Jersey procedural rules requiring proof of legal standing to foreclose at inception and time of filing a Complaint for foreclosure.

Judge Todd also stated that additional discovery is to be produced when the foreclosure involves a securitization, lost note claims, or a holder in due course challenge (which may arise in the context of the purported assignment of a toxic loan to a securitized trust prior to the trustee of that trust instituting a foreclosure action, as well as any predatory loan claims against the original lender). Judge Todd recognized that there are dozens of legal issues and inquiries where a foreclosure involves a securitization, and that a borrower has both the right to know who owns the mortgage loan and whether a foreclosing party has the legal right to foreclose.

This incredibly significant decision will hopefully become the law in the state of New Jersey, and it is hoped that the Rules Committee for the New Jersey courts will soon adopt court rules requiring that all residential foreclosure complaints filed in New Jersey be accompanied by the filing of an appropriate Certification, and further requiring that all securitization discovery be produced in all foreclosure cases involving a securitized loan. We applaud and salute Judge Todd for his amazing effort to not only streamline foreclosure litigation in New Jersey, but also insuring that borrowers’ legal rights are protected as well.

Jeff Barnes, Esq.,

Moral Hazard in Non-Judicial Sale: Trustee commits violations of FDCPA and other statutes!

From Eaine B

Editor’s Note: I have long advocated sending letters, objections to sale and complaints against “trustees” named (or substituted) on deeds of trust who initiate foreclosure proceedings. Indeed, it is highly probable that because of statutes attempting to protect the trustee from liability, the trustee is at best usually named only as a nominal party in a lawsuit challenging the legality of the non-judicial sale, demanding the identity and contact information of the creditor and getting a full accounting from the real creditor.

I would argue that this reader’s comment is more on target than they even know. Because that is the point — knowledge. If the “trustee” knowingly proceeds when it KNOWS there is a question of title, a question of who is the creditor, and knows that this loan was sold to third parties that have not been disclosed to the Trustor nor the Trustee, then the trustee is more than a nominal party, to wit: they are a co-venturer in a  fraudulent scheme.

Typically non-judicial action commences under a “substitute trustee”.  One would ask why it was necessary to call in a “substitute trustee” from the bullpen, when the current one is just fine. The only possible answer is that the old trustee either doesn’t want any part of this, or won’t do it without following industry standards to confirm ownership etc. It would seem fairly obvious that if the existing trustee is still in business and continues to qualify as a trustee, the only rational reason to change trustees is because the actors wish to do business with people who won’t ask questions.

Often the “substitution of trustee” is backdated, undated or dated after the notice of sale, notice of default etc., so there is a simple procedural angle to set back the sale if you are actually reading the documents, and getting a title report.

More substantively, the “substitute trustee” is granted that position by a party who in all probability does not have the power to grant it — but that requires a forensic analysis, title report, and probably a lawsuit to establish. For example, if some person unknown to MERS assumes the title of “assistant Vice president of Mortgage Electronic Registration Systems” and signs the substitution of trustee or any other document, they probably lack the power to do so, or they lack the documentation showing they have the power to do so.

This actually runs to the core of moral hazard in non-judicial states. Anyone who knows you have missed payments, could file a “substitution of Trustee” document in the county records, send you a notice of default, notice of sale and sell your property to the highest bidder — all BEFORE your real servicer (who we know is only a pretender lender) even knows about it. It is a scam waiting to happen. The scammer then takes the money and runs. Meanwhile you have most likely given up and left the house so it is now abandoned. This scenario can only happen in non-judicial states, where the statute authorizing a non-judicial foreclosure sale ASSUMES that the right party is doing the right thing under proper authority.

When mortgages were simple, and securitization was only an idea, the opportunity for abuse in non-judicial states was present but generally controllable because your true lender had control of the loan, they knew when you were delinquent, and they would be in touch with you, during which time it might come out that you had already received a notice of sale from a “substitute trustee.”

In the world of securitization where the potential real parties in interest are almost infinite in number, where the credit report is used rather than the title report, and where various layers of companies are used to create plausible deniability, insulation from liability and the ability to move things around “off-balance sheet” or “off record” at the county recorder’s office, the potential for abuse is practically infinite. And true to form, my experience is that virtually every foreclosure in a non-judicial state contains at least the taint of this abuse and often facially shows the failure to use proper documentation.

Comment submitted by Eaine B—–

Trustee commits violations of Fair Debt Collections Practice Act!
A good cause of action against Northwest Trustee Services Inc, Routh Crabtree Olsen PS is that I have found they sell your private information to the public. Go to and find your foreclosure….then buy for $39.00 a copy of the title report that is supposed to be private between the trustee and the beneficiary. Any public person can order your report online. This is mail and interstate violations. Make a complaint to the Bar association, and the FTC and your state Attorney General.
Call the title company on the top of the form and ask them. Then perhaps you can file a suit against Routh Crabtree Olsen and Northwest Trustee Services Inc for violations of 15 USC 1692 Fair Debt Collection Practices Act violation. It’s triple damages. Most likely they will have sent you a letter from Routh Crabtree Olsen. One I got even quotes the 15 USC 1692. So obviously THEY know about it. The owner of Routh, Crabtree and Olsen is Stephen Routh and Lance Olsen. Routh has various companies in AK, MT, AZ, CA etc. Just look at the list on the various web sites. has the same address as Routh Crabtree Olsen and Northwest Trustee Services and as Routh in AK.
Also, the process serving company that they use is owned by them.

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