Unless you are banker stealing homes through the fraudulent abuse of the foreclosure process there is no free house.
It is not rationale nor legal for anyone to tell a homeowner that because he or she cannot identify the source of funds for their “loan” the creditor MUST be in the chain of the party making the claim. It isn’t the fault of the homeowner that the paperwork was used to cover up fraud or negligence.
But every time a homeowner wins they do not necessarily get a free house nor exoneration from the debt that is owed to SOMEBODY even if they don’t know who it is.
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The bar remains high and we all know it. The court is not going to hand down a decision for the “borrower” unless there is something plainly wrong about it. In order to be plainly wrong, we need some narrative that puts the court back on its heels and to directly challenge the notions that a victory for Flaherty means that he gets a free house. The banks have stepped up their “free house” mythology in light of the Supreme Court decision in Florida.
The challenge here is to to present the case in a manner that makes the “free house” myth irrelevant and to do it in a compelling presentation. While the easiest way of doing that would be to allege simply that this is a fraudulent scheme, we can’t prove that without adequate responses to discovery. But the Courts are allowing the banks to skate through without responding to discovery even when the allegations clearly make the scheme an issue.
This is why the banks file motions to strike OR simply argue that the homeowner’s pleadings don’t state a case or defense.
So we are left with the consequences of the scheme. But that leaves fertile ground for many approaches. The focus should be on procedural aspects and away from “winning” the case on motions. The object is to win the pending motion on the grounds that due process demands it. The trick here is to find a way to ask the judge “What if all this is an illusion?” without asking it in those words. That is an uphill climb.
We cannot ignore the fact that the bench is biased in favor of the banks. Their presumption that the homeowner received a loan and should be required to pay it back or lose his home permeates everything. The greater hurdle is that their presumption comes from an era when those things were axiomatically true before Wall Street started with this scheme. And now everything is being subjected to claims of “securitization.” Even cell phone payments. “Securitization” has been institutionalized based upon a false foundation, but in theory there is nothing wrong with it.
The money trail remains the primary path toward victory for the homeowner. But it is true that there are certain aspects of the money trail that are none of your business when defending the homeowner. The fact that the banks defrauded investors and stole their money is compelling proof, once established, that the trusts were never funded and thus never purchased the loans. It also suggests but does not prove where the money came from for the “loan closing.” It came from a dark pool formed by the banks and consisting of the stolen money.
Knowing that, rather than proving that, is key to establishing the narrative. And now there are instances in which the “new” REMIC Trust actually does pay for the paper even though the Seller never owned the debt and the paper was based upon a fictitious transaction in which the Payee on the note never loaned any money — leading to the conclusion that the debt was never merged into the note; but this also leads to the conclusion that the risk shifts to the maker of the note when the note is purchased for value, in good faith and without knowledge of the borrower’s defenses. The new Purchaser” who really paid consideration (assuming they REALLY paid) could conceivably be a holder in due course. The focus then shifts to showing that there was no good faith and that there was complete knowledge of the borrower’s defenses on the part of the purchaser.
Filed under: foreclosure | Tagged: dark pool, free house, good faith, HDC, holder in due course, investor fraud, knowledge of borrower defenses, value paid | 6 Comments »