RESCISSION: Reviewing Wells Fargo v Frazee, NJ App.

Posted on June 25, 2018 by Neil Garfield

At what point does a final decision of SCOTUS actually mean anything? When confronted with TILA rescission, virtually all lower courts, state and federal, have taken up legislating from the bench, essentially over-ruling the Supreme Court of the United States (literally legally impossible).

Agree or disagree — everyone has that right. But to obey or not obey a SCOTUS decision attacks the foundation of our democratic and judicial institutions and makes the U.S. Constitution into a optional guide to the universe of disputes, delegating the real power to lower courts and removing the power and finality of SCOTUS as delineated in our Constitution.

Opinions like the one reviewed in this article are thus both irrelevant and irreverent — unless we amend or abandon our Constitution as the highest law of the land.

see Wells Fargo v Frazee

This case is just another example of a judicial tantrum defying the ultimate authority of SCOTUS. Unless the Supreme Court itself reverses the Jesinoski decision, it is quite obvious what the next SCOTUS decision is likely to be on the issue of TILA (Truth in Lending Act) rescission 15 USC §1635. Here is what I expect and hope for:

  1. Any court entering a decision or opinion after a notice of notice of TILA Rescission has been delivered must vacate such orders and must dismiss any pending foreclosure.
  2. Failure to dismiss the foreclosure is acting ultra vires — outside their authority.
  3. Dismissal of foreclosure is mandatory inasmuch as notice of TILA rescission removes the operative documents — note and mortgage — from consideration, rendering them void, by operation of law.
  4. As to all prior decisions, judgments and orders that ignored TILA rescission, all such decisions are void, the title consequences of which are left to state legislatures to decide, so long as the Federal Statute is obeyed and the law does not nullify the effect of delivery of a notice of TILA rescission.
  5. Any claims to vacate the effect of the TILA Rescission must be brought within one year from date of delivery.
  6. Neither tender nor a lawsuit is required for TILA rescission to become effective. An Aggrieved party with standing has adequate remedies at law to vacate a notice of TILA rescission, that must be raised as a new claim for relief from TILA rescission  based upon the pleading that the homeowner was wrong in sending the notice.
  7. TILA Rescission is an event, not a claim that a trial or appellate court can grant or deny. The legislature (Congress) has already granted the remedy. As stated in the Jesinoski SCOTUS decision, the statute is clear and unambiguous on its face, thus barring interpretation by a court. That is the difference between the rule of law vs. the rule of man.
  8. The Courts may neither overrule legislative action nor overrule a decision from the U.S. Supreme Court. Legislative action may not be overruled by a court unless there are clear violations of constitutional provisions and restrictions.

It’s possible that we will see the above menu in more than one decision from SCOTUS. The essential focus is going to be this: The rule, as stated repeatedly over decades by SCOTUS in admonishments to lower trial and appellate courts is that if it isn’t broken you can’t “fix” it to suit your personal views. 

Now we turn to the unlawful, ultra vires decision of the Superior Court of New Jersey, appellate division in Frazee (See link above).

The Court starts its analysis on page 6.

The opinion of the court is that Wells Fargo had standing because of its possession of the note and mortgage. But the note and mortgage are and were void at the time of this decision. So there is no standing to enforce except by the actual creditor, i.e., the owner of the debt.

This court recognized a potential “issue” (invented by the court, in opposition to the final decision that no court has any authority to interpret the TILA rescission statute). So it creates its own quagmire and falls deeper and deeper into trouble.

The panel obviously recognized that there could be no standing for Wells Fargo unless the TILA rescission could somehow be ignored without a claim to vacate the rescission from a party who owned the debt where the claim was that the rescission was unwarranted because all necessary disclosures had been made.

Diving right in this appellate court immediately misquotes and totally ignores the 2015 Jesinoski decision. It is only by mangling both the statute and the SCOTUS decision that this court can arrive at its predetermined destination. It intentionally misstates the law and effect of Jesinoski. If TILA Rescission was not effective without tender, there would be no TILA rescission.

The whole purpose and methodology of the statutory procedure was to first void the loan contract, second void the encumbrance by operation of law, third void the note, thus allowing the borrower to obtain refinancing from another institution. The key points of the Truth in Lending Act were (1) make certain the borrower knew who he/she was dealing with and (2) make certain the borrower had a fighting chance of understanding the enormously complex loan products being sold, dating back to the 1960’s when TILA was first passed.

In order to be certain these two disclosures were made, Congress had a choice. They could either greatly enlarge an existing agency to enforce these goals, laws and rules, or they could create a new administrative agency. Neither of those choices were remotely acceptable by most legislators. So they agreed on a plan that would force the banks to comply with TILA with consequences so horrendous that no bank in their right mind would transgress.

Enter TILA Rescission. By putting enormous power in the hands of borrowers that shifted the entire burden of pleading and proof to the banks it was thought that banks would comply. The statute provides for an order of things (a statutory scheme not unlike nonjudicial foreclosure) after notice of rescission is delivered. Like nonjudicial foreclosures it is a form of extrajudicial relief for homeowners who believe they were not protected at closing.

Within 20 days they must either comply or seek relief from a court of competent jurisdiction. The statute was designed to completely bar stonewalling. But like any law, if nobody enforces it, the statute does not enforce compliance with the two main goals of disclosure requirements — the identity of the lender and the breakdown of the main characteristics of the proposed loan.

Failing to seek relief puts them in violation of the statute, and enables a borrower to sue to enforce the three statutory duties under TILA rescission: return of the cancelled note, release of encumbrance and return of moneys paid by the borrower. If the borrower does not bring such suit within 1 year he/she loses the right to enforce compliance with those three duties.

THIS DOES NOT CHANGE THE EFFECT OF RESCISSION. THE MORTGAGE AND NOTE ARE STILL VOID BY OPERATION OF LAW.

If the bank does not comply with the three statutory TILA duties the bank has no right to demand tender or any relief. If the banks fails to comply within the same one year, they lose the right to demand the money under any scenario. The court goes off the tracks when it states

“nothing in the Supreme Court’s opinion . . .would override TILA’s tender requirement”. Jesinoski v. Countrywide Home Loans, Inc., 196 F. Supp. 3d 956, 962 (D. Minn. 2016), aff’d, Jesinoski v. Countrywide Home Loans, Inc., No. 16- 3385, 2018 U.S. App. LEXIS 4974 (8th Cir. Feb. 28, 2018).

 

That statement on its face is true. But ignores the content of TILA’s tender requirement. It only arises AFTER the “lender” fulfills the three statutory duties.

That is what Congress wrote. That is what they meant. And that was the substitute for an unwieldy bureaucracy.

The court confirms the content of the statute but repeats the tender “error” when it says

With regard to an alleged TILA violation, it is not enough to seek rescission and stop paying the mortgage to gain ownership of the home outright. Defendants argue they own the home outright because Wells Fargo failed to respond to the rescission notice within twenty days. Although failure to respond to a rescission notice within twenty days would constitute another TILA violation, TILA also explicitly states that if a “creditor does not take possession of the property within 20 days after tender by the obligor, ownership of the property vests in the obligor without obligation on his [or her] part to pay for it.” 15 U.S.C. § 1635(b) (emphasis added).

The problem here is the term “own the home outright.” That’s another way of repeating the myth about the “free house.” More importantly it is contradicting the express wording and purpose of the statute — to force banks to comply with TILA disclosure requirements. The ultra vires interpretation of this court, like so many others, gives the banks a way out without ever being penalized for their lack of proper disclosure.

NOTE: THIS DOES NOT CREATE A FREE HOUSE. If the parties seeking foreclosures were not creditors, the actual creditor can still bring an action for legal and equitable relief. But in order to do so, they would need to show that the parties seeking relief were not in any way authorized to do so by the real creditor.

But the court nevertheless faults the homeowner for not tendering even though tender was not due.

 

The erroneous nature of the court’s decision becomes crystal clear when it says

Additionally, Jesinoski did not overturn Third Circuit precedent that “a notice of rescission is not effective if the obligor lacks either the intention or the ability to perform, i.e., repay the loan.” Sherzer v. Homestar Mortg. Servs., 707

F.3d 255, 265 n.7 (3d Cir. 2013). Jesinoski also did not take away a court’s discretion to modify the rescission procedures. See 15 U.S.C. § 1635(b) (stating that the rescission “procedures prescribed by this subsection shall apply except when otherwise ordered by a court”) (emphasis added); see also 12 C.F.R. 226.23(d)(4) (stating that the rescission “procedures outlined in paragraphs (d)(2) and (3) of [§ 226.23] may be modified by court order”) (emphasis added).

It is quoting yet another court who has put blinders on and is disregarding the intentionally punitive aspect of TILA rescission. In most cases the homeowner cannot perform unless the “lender” gives up the note and mortgage and returns money paid under the canceled loan contract. The homeowner can ONLY perform if the deck is cleared for them to get a new loan from a new lender and to apply the proceeds of disgorgement required by the statute.

And to add insult to injury the court is putting yet another constraint on the borrower that TILA does not mention, to wit: the intention of the borrower to perform (tender). Forget the logistics of “intention” which is ridiculous — any such requirement places TILA rescission in the position of a claim instead of the event that the statute says has occurred by operation of law at the moment of delivery of the note of rescission. In direct contradiction to the TILA rescission statute (and SCOTUS in Jesinoski), this requires the borrower to submit to a trial before the rescission is effective.

The bottom line is that it appears that all courts are only interested in treating rescission under common law in which the rescission would only be effective upon a court order after a trial. The fact that the TILA Rescission statute clearly and unquivocably says otherwise won’t stop them, because they have prejudged the case as presenting a choice to the courts that can only be made by the legislature — who pays the price for violation of disclosure requirements under the Truth in Lending Act.

 

Filed under: burden of persuasion, burden of pleading, BURDEN OF PROOF, CORRUPTION, foreclosure, legal standing | Tagged: , , , , , , , , | 10 Comments »

9th Circuit: Assignment in Breach of PSA is Voidable not Void. Here is why they are wrong

Posted on June 21, 2017 by Neil Garfield

The thousands of trial court and appellate decisions that have hung their hat on illegal assignments being “voidable” demonstrates either a lack of understanding of common law business trusts or an adherence to a faulty doctrine in which homeowners pay the price for fraudulent bank activities.

Get a consult! 202-838-6345
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

see Turner v Wells Fargo

Some of the problems might be in the presentation of evidence, failures to object and failure to move to strike evidence or testimony. But most of it deals with the inability of lawyers and the Courts to pierce the veil of uncertainty and complexity with which the banks have covered their fraudulent tracks.

Here are the reasons the assignment might be void. No self-serving newly invented doctrine can overcome the failure of an illegal assignment.

  1. Common Law Trusts are almost always formed under New York State law that allows unregistered trusts to be created for business purposes. Any act in contravention of the express provisions of the trust instrument (usually the Pooling and Servicing Agreement) is void, not voidable. It cannot be revived through ratification — especially when there is nobody around to change the trust instrument, thus ratifying the void act.
  2. Many if not most assignments are fabricated for foreclosure and either nonexistent or backdated to avoid the fact that the assignment is void when it is fabricated — years after the so-called trust was described in a trust instrument that is rarely complete because no mortgage loan schedule at the time of the drafting of what is in most cases an incomplete trust instrument.
  3. Assignments are clearly void and not entitled to any presumptions under the UCC if they are dated after the loan was declared in default (albeit by a party who had no right to declare a default much less enforce the debt or obtain a forced sale of homestead and other residential properties) schedule existed at the time of the drafting of the trust instrument. The application of UCC presumptions after the alleged date of default is simply wrong.
  4. The fact that an instrument COULD be ratified does not mean that it WAS ratified. What is before the court is an illegal act that has not been ratified. The possibility that the parties to the trust instrument (trustor, trustee, beneficiaries) could change the instrument to allow the illegal act AND apply it retroactively is merely speculative — and against all legal doctrine and common sense. These courts are ruling on the possibility of a nonexistent act that without analysis of the trust instrument, is declared to be possibly subject to “ratification.”
  5. Assuming the trust even exists on paper does not mean that it ever entered into an actual transaction in which it acquired the “loan” which means the debt, note and mortgage.
  6. Any “waiver” or “ratification” would result in the loss of REMIC status under the terms of the Internal Revenue Code. No rational beneficiary would ratify the act of accepting even a performing loan after the cutoff period. To do so would change the nature of the trust from a REMIC vehicle entitled to pass through tax treatment. Hence even if the beneficiaries were entitled to change, alter, amend or modify the trust instrument they would be firing a tax bullet into their own heads.  Every penny received by a beneficiary would be then be taxed as ordinary income including return of principal.
  7. No rational beneficiary would be willing to change the trust instrument from accepting only properly underwritten performing loans to loans already declared in default.
  8. No Trustee, or beneficiary has the power to change the terms of the trust or to ratify an illegal act.
  9. In fact the trust instrument specifically prohibits the trustee and beneficiaries from knowing or even asking about the status of loans in the trust. Under what reasonable scenario could anyone even know that they were getting a non-performing loan outside the 90 day cutoff period.
  10. The very act of introducing the possibility of ratification where none exists under the trust instrument is the adjudication of rights of senior investors who are not present in court nor given notice of its proceeding. Such decisions are precedent for other defenses and claims in which the trust instrument could be changed to the detriment of the beneficiaries.

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Rescission and Subject Matter Jurisdiction

Posted on August 10, 2016 by Neil Garfield
rescission-600x400-600x330
I was recently requested to review a 6th Circuit Opinion in which the court stated that the rescission was barred by res judicata — i.e. that the matter had already been litigated and that the homeowner was therefore barred from bringing it up again.
 *
The Court never considered that it was wrong in the first place and that the decisions that ignored the rescission were themselves void for lack of subject matter jurisdiction. The Court started with the premise that the bank must win on this rather than from the point of view that the law should be applied, not personal preferences. Thus such decisions come down to “because I said so” rather than through any legal analysis.
 *
I think the court has missed the point completely. A deed has no statute of limitations. Even a mortgage deed or deed of trust has no statute of limitations. It only expires after the contractual terms end. A rescission, especially if it is recorded, has no expiration. All of these things can ONLY be removed by (a) a proper pleading (b) proof that the offending document should be canceled and removed from the chain of title and (c) filed within the time limit prescribed by statute.
 *
The court has turned this on its head. There is no lawsuit required to make rescission effective. There is no tender. There are no conditions whatsoever — see Jesinoski v Countrywide (SCOTUS). It is effective as a matter of law and if recorded remains a permanent impediment to any subsequent instrument claiming clear title (as though the rescission did not exist) in any instrument executed or recorded after the rescission was sent and/or recorded.
 *
The borrower is obligated to do nothing. The borrower can do nothing because even if it was the borrower that wanted to remove the rescission it would need to be done through court procedure. Otherwise, any person properly relying upon what appears in the title chain in the county records might act based upon their proper belief that the rescission exist would then find themselves having spent or lent money to a homeowner who in fact either had no title to the home or was already encumbered by the very instruments that were rendered void by operation of law. I can already see how foreign investors and lenders could get stuck by that having read the Federal, State and local laws and thinking themselves perfectly protected, and ending up with nothing.
 *
The time limit is set on the bank, not the borrower. It is set by the statute as 20 days from receipt of the rescission to (1) comply or (2) file suit to vacate or cancel the rescission. This is a burden on the bank, not the borrower. To construe the statute any other way would be to violate the terms of the statute and to violate the specific explicit instructions from the US Supreme Court. Any decision or ruling that the bank or creditor could contest after 20 days would mean that the rescission is not effective when mailed as set forth by the Statute and Jesinoski. Such a ruling would mean that the rescission is not effective by operation of law; it would mean that the rescission is effective ONLY if and when the bank files suit to vacate or cancel the rescission and loses. How one would logically say that the rescission is not effective until there is a lawsuit is incomprehensible.
 *
Rescission therefore is a fact and not a claim, pleading or defense. It may be raised as a defense merely to show that the court lacks subject matter jurisdiction, to wit: that the note and mortgage were rendered VOID by operation of law and as specifically stated in Reg Z which carries the full force of law. It follows that nobody can make a claim based upon void instruments. It also follows that the void instrument (i.e., the mortgage or deed of trust) must be removed from the chain of title as a void instrument. Hence quiet title is appropriate.
 *
Rescission is an event and the recording of it preserves the rights and benefits of rescission against the whole world. What courts and lawyers have failed to comprehend is that the rescission may not be ignored or even canceled or vacated or waived by the homeowner who sent it and recorded it. With a deed you can file a corrective deed but all parties to it must join in the correction. Otherwise it remains. The converse is also true. if as a matter of law the mortgage or deed of trust has been rendered void by operation of law, then it is void for all purposes and against all claims to the contrary from all claimants of every kind, especially if it is recorded.
 *
The court here has essentially adopted the strategy of the banks. By creating multiple layers of transmission, assignment, delivery and endorsement it gradually appears that the end successor indeed owns the debt, loan, note and mortgage. But if you start at the base of the chain and come to realize that the originator was not the lender and that the first transferee was merely a conduit who paid no money either for the origination nor the acquisition of the loan, one can easily see how the borrower’s rights have been egregiously violated.
 *
This court has done the same thing. It is taking the original ruling that the erroneous ruling (without subject matter jurisdiction) ignoring but not removing the rescission somehow was valid because the court later said that the claims as precluded by having been previously litigated,a decision later affirmed by appellate court. They can say it but it is erroneous, false and void for lack of subject matter jurisdiction. This is the rule of men rather than the rule of law. If the trial court had ignored the deed, mortgage or deed of trust without proper pleading and proof of a claim upon which such relief could be granted, the same result would apply.
 *
This is not some technicality. Allowing parties who have no interest or injury to apply for relief that properly belongs to other parties opens up floodgates of malicious practices in the marketplace in which the courts will face in full circle the absurdity of their own prior rulings when they believed that the banks must be right even if what they did was wrong.
 *
That the previous decisions considered the arguments of the homeowner and rejected them is irrelevant as long as the issue is lack of subject matter jurisdiction. If there was no such jurisdiction then none of the decisions are effective as a matter of law.

Filed under: foreclosure | Tagged: , , , , , , , , , , | 7 Comments »

Quiet Title Revisited: Not Quite a Dead End

Posted on July 21, 2016 by Neil Garfield

Void means that the instrument meant nothing when it was filed, not that it is unenforceable now.

 

I know how hard it is to let go of something that you really want to believe in. But for practical reasons I consider it unwise to continue on the QT path until we can find a way to get rid of the void assignment. That unto itself might a form of quiet title action and it is far easier to do. The allegation need only be that neither the assignor nor the assignee (a) had any right, justification or excuse to claim an interest in the recorded mortgage and (b) neither one was ever party to a completed transaction in which either of them had paid value for any interest in the recorded mortgage. Hence the assignment is void and should be removed from the chain of title reflected in the county records. So that takes care of one of several problems and the attack does not seek to remove the mortgage — yet.

 

Quiet title is a very limited remedy. In nearly all cases if the facts are contested it almost automatically means that there is no quiet tile relief available. It is meant to remove wild deeds or any other void (not voidable) instrument. Void means that the instrument meant nothing when it was filed, not that it is unenforceable now.

I contributed to the mystery of quiet title because it was apparent that the mortgage was void because it never named the true lender. In fact the existence and identity of the true source of funds for the transaction was intentionally withheld from the borrower leaving the mortgage with only one party instead of two.

 

The problem many courts are having with this is that the mortgage might still be subject to reformation that would insert the correct name of the actual lender (theoretically, potentially reformation). The fact that there is no such creditor whose name can be inserted does not make the mortgage void. It makes it voidable. Actually proving that there is no such creditor won’t be easy since only the banks have the information that shows that.

 

If there are any future events that could revive the mortgage deed, then quiet title can’t work. Add to that the fact that judges are not treating these attacks seriously and routinely ruling for the banks and you have a what appears to be a dead end.

 

All that said, there ARE causes of action that could attack the void assignment and the voidable mortgage in which the court could theoretically declare that in the absence of information sought from the defendants, who appear to be the only potential claimants, the mortgage is THEN declared void by court order, THEN a second count in quiet title would be in order. I cannot emphasize enough the fact that Judges are going to be very resistant to this but I think that appellate courts are starting to understand what happened with false claims of securitization.

 

Essentially, the Court must state that:

  1. The mortgage failed to name the correct party as lender.
  2. That failure makes the mortgage voidable.
  3. Despite publication and notice, there are no parties who could answer to the description of the creditor whose name should have been on the mortgage.
  4. The mortgage is therefore void
  5. Court declares title to be vested in the name of Smith and Jones without any encumbrance arising out of the mortgage recorded at Page 123 Book 456 of the public records of XXXX County, Florida.
 This of course directly challenges the judicial notion that once the homeowner receives money, it is a loan, it is enforceable and it doesn’t matter who comes into court to enforce it. To say that this judicial “law” opened the door to mayhem and moral hazard would be an understatement. Using the opinions written by trial judges, appellate judges and even Supreme Court justices, people who like to “leverage the system” have seized on this obvious opening to steal receivables from the rightful recipient — with no negative consequences. They write a letter that appears on its face to be correct and valid. According to current practices this raises the presumption that the contents of the letter are true.
 Hence the self-serving letter creates the legal presumption that the writer is authorized to tell the debtor that the writer is now the owner of the debt and to direct payments to the “new owner.” This isn’t speculation. Starting in California this business plan is spreading across the country. By the time the rightful owner of the debt wakes up the Newco Debt Servicing company has collected or settled the account.
Since the presumption is raised that the thief writing the letter is authorized, the real party in interest cannot beat the defense of payment by a debtor who thought they were doing the right thing. Reasonable reliance by the borrower is presumed since the authority and the validity of the letter was presumed. And that is not just a description of some dirty rag tag gangsters; it is a verifiable description of what the banks have been doing for years with mortgage debt, credit card debt, student loan debt and every other kind of debt imaginable.
By the time the investors wake up and find out their money was not used to fund a trust or real business entity, their money is gone and they are at the mercy of the big time banks who will offer settlements of claims that should have resulted in jail time for the bankers. Instead we have literally authorized small time crooks to emulate the behavior of the banks thus throwing the marketplace into further chaos.
So if you start off knowing that the banks can never come up with the name and contact information of a creditor, then you begin to see how there are some attacks on the position of banks that could have enormous traction even though on their face those strategies look like losers.

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Does Yvanova Provide a Back Door to Closed Cases?

Posted on March 18, 2016 by Neil Garfield

That is the question I am hearing from multiple people. My provisional answer is that in my opinion there is a strong argument for using it if the property has not been liquidated after the foreclosure auction. There might be a grey area while the property is REO and there might be a grey area where the property has been sold but the issue of a void assignment is raised in an eviction procedure. It will strain the minds of judges even more, but these issues are certain to come up. As things continue to progress Judges will shift from looking askance at borrowers and thinking their defenses are all hairsplitting ways to get out of a debt and get a free house. Upon reflection, over the next couple of years, you will see an increasing number of judges taking the same cynical view and turning it toward the banks and servicers who in most cases function neither as banks or servicers.

The Yvanova court took great pains to say that this was a very narrow ruling. Starting with that one might argue it only applied to that specific case. But they went further than that and we all know it. SO it stands for the proposition that a void assignment can be the basis of a wrongful foreclosure. AND most BANK LAWYERS agree that is a huge problem for them, at least in California but they think it will adopted across the country and I agree with the Bank lawyers on that assessment.

The reason is simple logic. If the foreclosure is wrongful then it seems stupidly simple to say that it was wrong in the first place. If it was “wrong” the questions that emerge in legal scholarship arise from two main paths.

What does “wrong” mean. Or to put it in Yvanova language is wrong the same as void or is it voidable. This would have a huge impact on issues of jurisdiction, res judicata, collateral estoppel etc. Does it mean that it was wrong and you can get damages or does it mean that it was wrong and therefore the homeowner still owns the house. I lean towards the former not by preference but by what I think the court was saying between the lines. The whole point of nonjudicial foreclosure (amongst two other points that are obvious) is to provide stability and confidence in the title system. So if a wrong foreclosure occurs the title would most likely remain in whoever bought it at auction — although the purgatory in which many properties remain (REO) might create a grey area in which there is no prejudice in vacating the sale. Indeed if the party holding the “FINAL” title did so by fraud (using a void assignment) then equity would seem to demand return of title to the homeowner. AND THEN you still have the problem of evictions or writs of possession or whatever they are called in your state. Title is one thing but possession is another. If you raise the void assignment can you defeat possession even if you can’t defeat the title transfer? It would SEEM not but equity would demand that a thief not further the rewards of his ill-gotten gains.

Next path. Procedure, evidence and objections. Going back in time the homeowner might have objected or even alleged things that the Yvanova court now finds to have merit. So a lay person might think that is all they need is to show the void assignment and presto they have title or money or both in their hands. Not so fast. Due process is intended to allow a person to be heard and the justice system is designed and created to FINALIZE disputes, whether the decision is right or wrong. SO questions abound about what happened at the trial court level. But there was a remedy for that. It is called an appeal. And there are choices to even go to Federal Court if the state court is rubber stamping void instruments. But the time for doing that has expired on all but a few cases and the judicial doctrine of finality is the most difficult to overcome. Even a condemned man usually will be put to death even if there is actual evidence of innocence after a period of time has expired and a number of appeals have been exhausted.

SO that is my long winded way of saying I don’t know. If Yvanova opens the door to many new openings of closed cases, it certainly doesn’t say so. But a defense of a current case — even one amended to cite Yvanova, might fare much better.

The real answer: pick a path and try it.

Filed under: foreclosure | Tagged: , , , , , , , , , , , , , | 19 Comments »

My Take on Quiet Title

Posted on March 3, 2016 by Neil Garfield
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================================

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

—————-

In my opinion, the party that should be seeking to quiet title is a creditor to whom the debt is owed. Nobody is doing that. And I believe that the reason for this is that there is no party who could actually answer to the description of a creditor. And even if there was, the “creditors” don’t want to be asserting the right to foreclose and getting involved in foreclosures.

* Lawyers who are rejecting rescission as a strategy are doing so because they think they WOULD lose in a challenge to the rescission. They have not considered whether that attack will ever come. From my perspective with hundreds of thousands of rescission notices sent, it speaks volumes that no such action for declaratory relief has ever been filed. If anyone has an example where such an action was filed, I invite you to send me the pleadings at neilfgarfield@hotmail.com.

*Quiet title is a very restricted remedy saved for things like wild deeds and other VOID instruments (not voidable). If the instrument is voidable then you must win that point first before you can seek quiet title. My short answer is that you probably can’t get quiet title without making the mortgage or deed of trust void. And remember that the note in all probability was intentionally destroyed just as it was in most “loans”.

*One way to void the mortgage is to send rescission notice. They will probably send a letter back saying it’s beyond three years or asserting something else. But all that does is confirm receipt. Then an action to enforce rescission after the 20 days has run from date of receipt. That would be coupled with an action for injunction to prevent the parties from using the note and mortgage because they are void. Lastly the third count would be for quiet title because only a void instrument, in my opinion can be ignored for purposes of title chain. It isn’t enough to presume that the “creditor” with standing (apart from the note and mortgage) WOULD win — the creditor with true legal standing (i.e., direct financial injury from the “default” must file a declaratory action to declare that the rescission is vacated because of whatever reasons they assert and they must actually win it. Procedurally it is almost a sure thing that they have no party that can fulfill the standing requirement.

*Many lawyers are saying that they want nothing to do with rescission without realizing that it is a very strong procedural tool. The issue is not whether the rescission can withstand an attack in a declaratory action filed by a creditor who does NOT rely upon the void note and mortgage. The issue is whether that attack will EVER come from a party with standing.

 

*The other way of getting the mortgage void is to file an action asserting that the original loan was NEVER consummated. This could even be added as an alternative action to the the one outlined above. If the originator and payee on the note was not the party who loaned any money they had no right to be on the note or mortgage. The execution of the instruments would be fraud in the execution and possibly fraud in the inducement. The release of the instruments for transfer and recording would be wrong, which is to say that they were void despite their execution. In addition it is predatory per se under REG Z, which means at the very least they can’t enforce the note and mortgage in a court of equity. But note that just because a document of record cannot be enforced, does not in and of itself mean that it is a wild deed or a void instrument. It remains in the chain of title.

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BKR TRUSTEE SEEKS TO VOID THE LIEN (MORTGAGE): BAC NOT A CREDITOR

Posted on August 2, 2011 by Neil Garfield

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

MORTGAGE IS VOID NOT JUST VOIDABLE

MISSISSIPPI BKR TRUSTEE TURNS THE TABLES ON BANKS: 

STATES NO EVIDENCE REQUIRED TO PROCEED TO DECLARE THE LIEN IS VOID

SEE BROTHERS V BAC ET AL Memorandum Brief Partial Summary Judgment FINAL-1

SEE BROTHER V TRUSTMARK-BAC ET AL Mtn Partial Summary Judgment FINAL-1

EDITOR’S NOTE: Now we are getting down to business and moving into the 5th inning of 9 inning game. As stated on these pages (resisted by virtually everyone) this Bankruptcy Trustee is seeking to have the court declare that the lien is VOID. That means they have nothing that gives them the right to foreclose and it means that the title to the property is subject to a court order declaring the rights of the parties, to wit: that the homeowner, as petitioner in bankruptcy, has plenty of equity because the home is not being used a security for the loan, even assuming that the loan created a legitimate obligation and even if you assume that the obligation is in fact owed to BAC Home Loans (Bank of America).

BAC WAS DETERMINED TO AS TO ITS STATUS: IT IS NOT A CREDITOR, which means that it cannot neither pursue payment as an unsecured claimant nor pursue foreclosure (which is pursuing payment) using foreclosure.

BUT REMEMBER THIS: YOU CAN’T WIN THE LOTTERY WITHOUT BUYING A TICKET: IF YOU DON’T OBJECT, IF YOU DON’T FILE THE SCHEDULES SHOWING THE PARTIES CORRECTLY ALIGNED, YOU STAND A HIGH RISK OF LOSING DESPITE THE OBVIOUS REALITY PRESENTED BY THIS WELL-WRITTEN MOTION AND MEMORANDUM.

AND REMEMBER THIS: YOU CAN GET RID OF THE LIEN ON THE PROPERTY, BUT THAT DOES NOT ELIMINATE THE OBLIGATION TO SOMEONE (I.E., THE INVESTOR/LENDERS).

 

Section 506(d) states: “To the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void, unless – (1) such claim was disallowed only under section 502(b)(5) or 502(e) of this title;; or (2) such claim is not an allowed secured claim due only to the failure of any entity to file a proof of such claim under section 501 of this title.”

Following consideration of evidence, testimony of witnesses and argument of counsel, this Court ruled from the bench finding that the claim of BAC was disallowed as a secured claim. An order (Dkt. # 49) consistent with the Court’s ruling was entered herein on August 31, 2010.

Based upon the Amended Proof of Claim and its attachments, Trustee filed an Amended Objection to Proof of Claim alleging, among other things, that BAC lacked standing as a secured creditor to file its claim in the bankruptcy case. (Dkt. #31, Amended Objection, ¶ 2)

After consideration of all matters properly presented, the Court ruled that BAC failed to offer evidence that the trust CWMBS 2005-­R1 held both the Note and the Deed of Trust and, therefore, it was not a creditor of the debtors.    (Dkt. Entry dated August 18, 2010, Dkt. #49)

 

 

Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , , , , , , , , , , , | 67 Comments »

AZ STATUTE DEFINES BENEFICIARY and CREDIT BID: NOT “NOMINEE”

Posted on April 24, 2010 by Neil Garfield

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.

Filed under: CDO, CORRUPTION, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: , , , , , , , , , , , , , , | 6 Comments »

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