ATTENTION LAWYERS: ARE SERVICER ADVANCES ARGUABLY A NOVATION

Where “servicer” advances to the trust beneficiaries are present, it explains the rush to foreclosure completely. It is not until the foreclosure is complete that the payor of the “servicer” advances can stop paying. Thus the obfuscation in the discovery process by servicers in foreclosure litigation is also completely explained. Further this would open the eyes of Judges to the fact that there may be other co-obligors that were involved (insurers, credit default swap counterparties etc.). Thus while the creditor is completely satisfied and has experienced no default, the servicer is claiming a default in order to protect the interest of the servicer and broker-dealer (investment bank). It is a lie. — Neil F Garfield, http://www.livinglies.me

This is not for layman. This is directed at lawyers. Any pro se litigant who tries doing something with this is likely to be jumping off a legal cliff so don’t do it without consultation with a lawyer. If you ARE a lawyer, you might find this very enlightening and helpful in developing a strategy to WIN rather than delay the “inevitable.”

I was thinking about this problem when the servicer advances are paid. Such advances are in an amount that satisfies the creditor. If the creditor is named as the real party in interest in a foreclosure, there is an inherent contradiction on the face of the situation. Someone other than the creditor is alleging a default when the creditor will tell you they are just fine — they have received all scheduled payments. Even though it is most likely that the money came from the broker-dealer I was thinking that this might be a novation or a failed attempt at novation.  A definition of novation is shown below. Here’s my thinking:

1.  the receipt of payment by the trust beneficiaries satisfies in full the payment they were to receive under the contract between them and the REMIC trust.

2.  if the foreclosure action is brought by the trust or the trust beneficiaries, directly or indirectly, they can’t say that they have actually experienced a default, since they have payment in full.

3. Some entity is initiating the foreclosure action and some representative capacity on behalf of of the trust or the trust beneficiaries as the creditor.  If the borrower has ceased making payments and no other payments are received by the trust or the trust beneficiaries relating to the subject loan then it is arguably true that the borrower has defaulted and the lender has experienced the default.

4.  But in those cases where the  borrower has ceased making payments but  full payment has been sent and accepted by the lender as identified in the foreclosure action, does not seem possible for a declaration of default by that lender to be valid or even true.

5. But it is equally true that the borrower has ceased making payments under an alleged contract, which the foreclosing party is alleging as a default relating to the lender that has been identified as such in the subject action.

6. In actuality the servicer advances have probably been paid by the broker-dealer out of a fund that  was permitted to be formed out of the investment dollars advanced by the investors for the purchase of the mortgage bonds. Presumably this fund would exist in a trust account maintained by the trustee for the asset-backed trust. In actuality it appears as though these funds were kept by the broker dealer. The prospectus specifically states that the investors can be repaid out of this fund which consists of the investment dollars advanced by the investors.
7. But these nonstop servicer advances are designated as payments by the servicer.

8.  And it is stated in the pooling and servicing agreement that the nonstop servicer advances may not be recovered from the servicer nor anyone else.

9.  That means that the money received by the trust beneficiaries is simply a payment of the obligation of the trust under the original agreement by which the trust beneficiaries advanced money as investors purchasing the mortgage bonds.

10. In other settings such payments would be in accordance with agreements in which subrogation of the payor occurs or in which the claim is purchased. Here we have a different problem. At no point here is the entire claim subject to any claim of subrogation or purchase. It is only the payments that have been made that is the subject of the dispute. That opens the door to potential claims of multiple creditors each of whom can show that they have attained the status of a creditor by virtue of actual value or consideration paid.

11.  But regardless of who makes payments to the trust beneficiaries or why they made such payments, the trust beneficiaries are under no obligation to return the payments. Hence the trust beneficiaries have experienced no default and the alleged mortgage bond avoids the declaration of a credit event that would decrease the value of the bond. That keeps the investors happy and the broker dealer out of hot water (note the hundreds of claims totaling around $200 billion thus far in settlements because the broker dealer didn’t do many of the things they were supposed to do to protect the investors). NOTE ALSO: The payment and acceptance of the regularly scheduled payments to the trust beneficiaries would cure any default in all events.

12.  But the entity that has initiated the foreclosure action is still going to argue that the borrower has breached the terms of the note and has failed to make the regularly scheduled payments and that therefore the borrower is in default. But they cannot say that the borrower defaulted in its obligation to the creditor since the creditor is already satisfied.

13. Even where we have successfully established that the origination of the loan occurred with the funds of the investor and not the named payee on the note or the named mortgagee on the mortgage, a debt still exists to the investors for the amount that is not paid by anyone. This debt would arise by operation of law since the borrower accepted the money and the investor lenders are the source of that money.

14. So the first issue that arises out of this complex series of transactions and a complex chain of documents (that appear to reflect transactions that never occurred), is whether the creator of this scheme unintentionally opened the door to allow a borrower to stop making payments and require the servicer or broker-dealer to continue making nonstop servicer advances the satisfying the obligation to the so-called secured creditor alleged in the initiation of the foreclosure action. If the obligation is indefinite as to duration, this might have a substantial impact on the amount due, the amount demanded and whether the original notice of default was fatally defective in stating the amount required for reinstatement and even claiming the default.

15.  I therefore come to the second issue which is that in such cases a second obligation arises when the first one has been satisfied by the payment from a third-party. The second obligation is clearly not secured unless a partial assignment of the mortgage and note has been executed and recorded to protect the servicer or broker-dealer or whoever made the payments to the trust beneficiaries under the nonstop servicer advances. This clearly did not occur. And if it did occur it would be void under the terms of the trust instrument, i.e., the pooling and servicing agreement.

16.  The only lawsuits I can imagine filed by the party who made such payments to the trust beneficiaries are causes of action against the homeowner (not to be called a “borrower” anymore) for contribution or unjust enrichment. And as I say, there could be no claims that the debt is secured since the security instrument is pledged to the trust beneficiaries and executed in favor of a third party that is different from the party that made the nonstop servicer advances to the trust beneficiaries.

17.  I am therefore wondering whether or not novation should be alleged in order to highlight the fact that the second obligation has been created. Some sort of equitable novation would also allow the Judge to satisfy himself or herself that he or she is not encouraging people to borrow money and not pay it back while at the same time punishing those who created the mad scheme and thus lost the rights set forth in the security agreement (mortgage, deed of trust etc.). Based on the definition below, it might be that the novation could not have occurred without the signature of the borrower. But  the argument in favor of characterizing the transactions as a novation might be helpful in highlighting the fact that with the undisputed creditors satisfied, that no default has occurred, and that any purported default has been waived or cured, and that we know that a new liability has been created by operation of law in favor of the party that made the payments.

18.  And that brings me to my last point. I would like to see what party it is that claims to have made the non-stop servicer payments. If the payments came from a reserve pool created out of the investment dollars funded by the investors, it would be difficult to argue that the  borrower has become unjustly enriched at the expense of the broker-dealer. The circular logic created in the prospectus and pooling and servicing agreement would obviously not be construed against the borrower who was denied access to the information that would have disclosed the existence of these complex documents and complex transactions, despite federal and state law to the contrary. (TILA and RESPA, Reg Z etc.)

COMMENTS are invited.

————
FROM WIKIPEDIA —

In contract law and business law, novation is the act of either:

  1. replacing an obligation to perform with a new obligation; or
  2. adding an obligation to perform; or
  3. replacing a party to an agreement with a new party.

In contrast to an assignment, which is valid so long as the obligee (person receiving the benefit of the bargain) is given notice, a novation is valid only with the consent of all parties to the original agreement: the obligee must consent to the replacement of the original obligor with the new obligor.[1] A contract transferred by the novation process transfers all duties and obligations from the original obligor to the new obligor.

For example, if there exists a contract where Dan will give a TV to Alex, and another contract where Alex will give a TV to Becky, then, it is possible to novate both contracts and replace them with a single contract wherein Dan agrees to give a TV to Becky. Contrary to assignment, novation requires the consent of all parties. Consideration is still required for the new contract, but it is usually assumed to be the discharge of the former contract.

Another classic example is where Company A enters a contract with Company B and a novation is included to ensure that if Company B sells, merges or transfers the core of their business to another company, the new company assumes the obligations and liabilities that Company B has with Company A under the contract. So in terms of the contract, a purchaser, merging party or transferee of Company B steps into the shoes of Company B with respect to its obligations to Company A. Alternatively, a “novation agreement” may be signed after the original contract[2] in the event of such a change. This is common in contracts with governmental entities; an example being under the United States Anti-Assignment Act, the governmental entity that originally issued the contract must agree to such a transfer or it is automatically invalid by law.

The criteria for novation comprise the obligee’s acceptance of the new obligor, the new obligor’s acceptance of the liability, and the old obligor’s acceptance of the new contract as full performance of the old contract. Novation is not a unilateral contract mechanism, hence allows room for negotiation on the new T&Cs under the new circumstances. Thus, ‘acceptance of the new contract as full performance of the old contract’ may be read in conjunction to the phenomenon of ‘mutual agreement of the T&Cs.[1]

Application in financial markets

Novation is also used in futures and options trading to describe a special situation where the central clearing house interposes itself between buyers and sellers as a legal counter party, i.e., the clearing house becomes buyer to every seller and vice versa. This obviates the need for ascertaining credit-worthiness of each counter party and the only credit risk that the participants face is the risk of the clearing house defaulting. In this context, novation is considered a form of risk management.

The term is also used in markets that lack a centralized clearing system, such as swap trading and certain over-the-counter (OTC) derivatives, where “novation” refers to the process where one party to a contract may assign its role to another, who is described as “stepping into” the contract. This is analogous to selling a futures contract.

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62 Responses

  1. Neil, you said:
    “13. Even where we have successfully established that the origination of the loan occurred with the funds of the investor and not the named payee on the note or the named mortgagee on the mortgage,

    **a debt still exists to the investors for the amount that is not paid by anyone. This debt would arise by operation of law since the borrower accepted the money and the investor lenders are the source of that money.”**

    I just can’t agree with that. You have never supported any of this. What says that if you steal / embezzle my moolah and loan it to Harry that I am the lender and that Harry has an obligation to me? The first debt / obligation which exists imo is the one between the embezzler and me. Disregarding that this involves alleged securitization and trust law, loaning embezzled or stolen money can’t be first impression – somewhere on the books this has been decided. Even if a court decided in equity Harry should pay me (tossing any provisions of the note and the UCC), imo it’d be right after finding you primarily liable to me – I’d have to barrel thru you before going after Harry.
    So then what a cluster-xxxx when third parties have guaranteed the payments on MBS’s which weren’t MBS’s. I think the govt just said everyone pay everyone and we’ll bail it all out because we don’t have time to do anything else – except for the homeowner. For that they threw some money to the very people they knew or it turned out had no motivation to do a thing. It’s hard to think anything other than that our own govt was complicit, so I guess it should be no surprise when some judges say “well, you owe someone”. Except that, no, we don’t; not when third parties got paid to pick up the freight and the payment for that deal is reflected in the rates charged the consumer.

  2. 15-15d says they no longer report because of less than 30 certificateholders. A-Man, get your trust distribution report showing your loan and those that are still in the pipeline.

    and, yes, the trust does exist, just not as what we all thought it was. the trust was funded with the payment streams, not the notes and mortgages.

  3. Johngault–Neil listened to you!

  4. @bobg – I can see where you’re coming from with your comment. Buuut, any number of things could mess up the investors. The servicers could be dunning FNMA, for instance, for phantom advances and not making them. It’s not like there’s any oversight here. it’s a catch as catch can, looks to me. Who looks after the investors’ interests after the pension fund mgrs got wined and dined and received their fees? The secn trustee?! Quelle blage!
    We’re not talking to each other. Seems like the investors should know of the guarantees (etc), but bet they’re not the ones who read the prospectus (also for instance). And if I’m right that the trusts can’t own real estate, they may have found themselves in a take-it-or-leave it situation. We need people with more acumen re: this stuff, not speculation, but speculation, including mine, is what we got.

  5. charles and louise – there never is any evidence presented that MERS accepted its nominee status (which I still call a novation)….it’s a wholey unwarranted presumption. It would require a writing signed by the party nominated and the one to be bound (not the homeowner – take 4,798 since it isn’t the homeowner being replaced by a nominee – its’ the lender).

  6. NPV. Wells Fargo says they own the note !!! Yet the note has a lost note attached only one month after original refinance (long before WF became servicer)……also FANNIE became investor st this time as well ( around March 2002)……WF thru a broken chain and post dated out of order and robo signed assignments of mortgage became servicer in 2005…..They then started Fraudclosure in 2009 , with incorrect balance of notice of intent to foreclose and I fought them for 4 years as I wasn’t even on the mortgage/note as per instructions of original mortgage broker…….I eventually lost this year but never was Fannie on any paper work , which I thought the laws changed since 2009 and the investor needed to be named in foreclosure. …… But of course I lost that argument as well !!!!!

    So I have argued.
    1. I’m not on mortgage and note
    2. Not in default (they started paying property taxes that I was paying directly to town)
    3. Incorrect balance on NOI
    4. Wasn’t give modification as I should have
    5. Broken chain of assignment of mortgage
    6. Wells Fargo has no standing (they lent no money. Paid no money. And own and hold no note)
    7. Fannie Mae not named as the investor and/or foreclosing plaintiff

    Warming up in the bullpen…….. MasterServicer

  7. @ Master Servicer 07:58

    Where does that leave me?

    My trust OOMLT 2007-FXD2 was among the first to be declared failed (by Wells Fargo as both trustee and ms) and seems to have been paid off by AIG before they crashed and TARP came into effect.

    My plaintiff is WF as trustee …

    O-One used BAC table funding (I have the wire info) … and AIG alleges in the AIG v. BAC suit that BAC performed the underwriting (leaving O-One with no role in creating the loan/note) ,, AIG also states that BAC received $40M from AIG which is about 5% of the trusts original valuation.. nothing more about the AIG payout on this WF declared TOTAL LOSS is known to me.. I don’t see it being in MLII on any report I can access..

    Nowhere in the suit does plaintiff mention Bank of America.

    Seems to me the AIG payoff went offshore and whatever transacted between AIG and BAC and WF was never applied to the notes.

    If declared a loss by WF as trustee aren’t the assets written off to $0 ,,, or is it to an amount they resold for in a private sale (WL Ross and Co. , LLC is STRONGLY implicated as the buyer but once again data is shielded) ,, WF recently had a brand spanking new assignment forged for them showing a transfer from O-One to WF (years after cutoff and years after O-One became Sand Canyon) , the judge accepted the forgery (which wasn’t even an original but a “copy”).

    Can you point me in the right direction?

  8. No Novation (didn’t sign anything).
    No Lien on the deed here ….

    The commode is Short & Pink … Waaa!
    I want a Tall White One! LOL!

    Scratch that one!

  9. I was thinking about this problem when the servicer advances are paid.
    **They accrue and are not paid as you say NO SERVICING under 1122 AB

    Such advances are in an amount that satisfies the creditor.
    The bond holders – a foreign national Banking Institution

    If the creditor is named as the real party in interest in a foreclosure,
    ** It is – as bond holders

    there is an inherent contradiction on the face of the situation.

    **Said default is against the lender who is de-recognized as a creditor and held by operation of law as a obligor

    Someone other than the creditor is alleging a default when the creditor will tell you they are just fine — they have received all scheduled payments.

    ** They are receiving all scheduled payments under a DUE ON SALE of ASSETS SCHEME called Economic Recognition.

    Even though it is most likely that the money came from the broker-dealer – – – THE TRANSFEREE

    ** Transferee of Trust common stock sold through the SPE

    I was thinking that this might be a novation or a failed attempt at novation.

    ** No shit Sherlock *** RECONSTITUTION *** of shareholder value after taking a charge on assets written off under TARP / TARP/EESA 2008

    A definition of novation is shown below.
    Here’s my thinking:

    Stop Thinking ….Get off the Commode

    registerclaims@live.com

  10. Causes of Action

    Willful restraint on alienation by inducement, laches and acceleration

  11. Recreate the general ledger …or take what I say to your CPA and verify these facts . This legal mumble jumbo is, by your own admission , not WORKING ! NOT WITHOUT A SUBSTANTIVE ARGUMENT SHOWING WHERE THE ECONOMIC BREAKDOWN TAKES PLACE AND THIS IS BY THE DOT’s OWN ADMISSION –

    Read the TARP and Short title Provisions of the Emergency economic Stabilization Act .

    registerclaims@live.com

  12. Fact – The note is booked as a future value and accrues off balance sheet over a term . The recorded lien is booked at its present value.

    The note ramps by accretion over a corresponding term used to amortize the lens of record. The registrants booked these contra assets accounts as a sinking fund or convergent yields.

    Default Risk: If the borrower cannot make a principal or interest payment when due , the loan is said to be in default. Default risk is is the risk that an issuing member bank (or its SPE counter party to the exchange ) fails to make good under the terms of the Purchase and Sale , PPM, PAS and MLP&AA.

    The Lender is the Trustee “always”in the formation of an indenture. Your Trustee holds the beneficial interest in shareholder assets under the PSA that the Trustee allows to “pledge” to Bond Holders

    Your not getting it – common stock holders are not the bond holders (who are represented by their own trustee) The lender – your lender is an obligor for assets deemed by the DOT as TOXIC and charged off in October of 2008.

    God I feel so so sorry for those who are just guessing and letting go of the chance of a life time —-for claims entitling your estate to a release of lien …….Ego, stubbornness and literacy (read the agreements and your contract for Gods sake)

    Bermuda, Cayman and Geneva …it’s all done off shore !

    registerclaims@live.com

  13. The Kat emerged from the bag and said …

    “You think I’m kidding Bro??? I’ve buried bigger things than you in the litter box.”

  14. @ javagold Does WF plead they own the Note somewhere within the Complain, or do they simply claim “holder status”. If they claim they are a holder, they are required to file the authorization or POA as a debt collector for Fannie.

    It is very weird to see Wells in this action. Wells used to sell all their FHA Tranches to Freddie.

  15. Neil, you said (as far as I’ve gotten):
    “In actuality the servicer advances have probably been paid by the broker-dealer out of a fund that was permitted to be formed out of the investment dollars advanced by the investors for the purchase of the mortgage bonds.”

    With at least FNMA, the servicer is reimbursed by FNMA. I had wondered why FNMA guaranteed the loans / MBS’s it issues (mol) (because how generous of them with taxpayer funds), but didn’t know until recently that FNMA itself charges (sort of) for this guarantee. It’s calculated in the strike price of the loans when they’re purchased from the aggregators (generally the bigger guys) and I’d venture another “so-many” basis points are used in the calculations of the MBS pay outs (so the guarantee is basically paid for on both ends of FNMA’s deals). But it wouldn’t surprise me to learn that the banksters also have a fund created with the investors own monies.
    If so, although I can’t prove it, I’d still say it’s to avoid the fact (imo) that all those loans had to be seasoned to qualify for securitization and they weren’t: a self-styled remedy for unlawfully securitizing unseasoned loans.

  16. This phrase just sticks out in some weird way.
    —————–
    whether the creator of this scheme unintentionally opened the door to allow a borrower to stop making payments and require the servicer or broker-dealer to continue making nonstop servicer advances
    ——————–

    None of this mattered until the money started flowing back to the trust beneficiary, non stop? Is that what this is indicating? I don’t mind being ignorant of the jargon, it is intentionally left incomplete so as not to reveal ‘everything’ lawyers know about these transactions.

    So a novation is a protection for the servicer and broker-dealer who knew what was going on, and allowed it to happen, but now that something has tipped the scales causing money to flow out of them instead of into them, there is a concern of changing the contract or bowing out all together?

    We got HAMP and it should have been our novation.
    the ‘creator of this scheme’. Yes, the Creator is capable of making the impossible possible, and no one can ever be a greater creator than the One Infinite Creator.

    All are endowed by the Creator and some decided they could take what didn’t belong to them under color of law, color of authority, and violated the public trust and totally went against Divine Law.

    By your own Lieber Code, you cannot war with the women and children. You cannot ‘create’ an enemy where there is none. There is no trespassing.

    A novation requires an agreement of all parties, and some people in a position of trust or custodian of someone else’s property can’t make agreements for the property owner to have less property because someone is set up for nonstop payments.

    The rules are clear. No law impairing the obligations of contracts shall be made. No one can make a law to change this. Let the servicer, broker-dealer go into default.

    They are probably the reason the United States doesn’t have creditor status and ended up bankrupt. They are probably the reason people are going through bankruptcy to keep the home they have.

    Black’s Law 5th Editiona page 959
    Novation
    Substitution of a new contract, debt, or obligation for an existing one, between the same or different parties. The substitution by mutual agreement of one debtor for another or of one creditor for another, whereby the old debt is extinguished. The requisites of a novation are a previous valid obligation, and agreement of all the parties to a new contract, the extinguishment of the old obligation, and the validity of the new one. Blyther v. Pentagon Federal Credit Union, D.C..Mun.App, 182 A2d 892, 894.

    If they didn’t enter the instruments into the trust when they should have, and they got unjust enrichment as a result of that, and they didn’t close escrow when they should have and that’s a lot of instruments to not close escrow on. [I remember someone telling me that every account ever opened never closed. That's every bank account, credit card, car loan, student loan, court case, etc.]
    If all of those were to close escrow and never did, well that’s a lot left open and some busy bees trying to close them now that this has been exposed.

    Watching the market hiccup on the first day of the year. Expecting to seem more of that paper wealth they had disappear, and after that some sort of remedy where they have to sell assets to cover their losses. Oops. Have to sell all those silver and gold coins they purchased from the mint? Boo Hoo. Have to sell that million dollar mansion. Whatever. I saw how a hedge fund guy put his 120+ million dollar New York space for sale, and when you look inside, it’s so personalized anyone purchasing it would have to spend even more money to ‘not’ live like them. Then Michael Jordan’s estate goes for sale, and it’s pulled because no one met the reserves. You look there and who wants a full size basketball court where the the word Jordan is imbedded in the court at the goal?

    The first shall be last, and the last shall be first, and judges I’m sure have some open escrow, imagine when they have to clear out their holdings. Oh Yeah!

    My guess is the custodian of a trust handling property for a beneficiary is probably under oath as a fiduciary to get everything that belongs to that trust beneficiary and that would not mean negotiating anything for less than full value, regardless of the mistakes made in the contract, if it wasn’t dealt at arm’s length, then they are bound by the ‘performance’ just like they came after all of us for performance.

    What’s in their laws as enforceable on us and we had been placed as representatives of a corporation created by ‘someone’ is good for ‘them’ representing a corporation created by someone. When the insurance runs out, and there is no bail out; default and file bankruptcy.

    Laughing out Loud. The cat is out of the bag.

    Trespass Unwanted.

  17. KC your on target!

    To the others if I made you a loan for $1,000,000 to $100 million and I know you create loan for a living then what going to be done with the money? I am making you a line of credit with the terms you pay me back the monies.

    According to Ginnie Mae pooling the loan cannot have an outstanding credit (not homeowner) against that loan, because the loan is the underlying collateral for the securities!

    But as KC is saying and is why the are settling is because these clown did not secure these loan and the have “No Standing”!

  18. MERS v. Ditto
    MERS filed suit against Purchaser to invalidate his purchase of property because it had not received notice of the sale even though it was listed as a beneficiary or nominee on the deed of trust. Purchaser claimed that MERS was not entitled to notice because MERS did not have an interest in the property. Purchaser also alleged that MERS failed to properly commence its lawsuit because it did not remit the proper funds pursuant to Tennessee Code. The trial court refused to set aside the tax sale, holding that the applicable notice requirements were met and that Purchaser was the holder of legal title to the property. MERS appeals. We affirm the decision of the trial court

    http://www.tsc.state.tn.us/sites/default/files/dittoopn.pdf

  19. FORECLOSING PARTY’S NAME MATTERS.
    BAC Home Loan v. Blythe
    As we have recently noted, “[a] corporate name is a very precise term” and for this reason even “minor variations in the spelling and punctuation of a corporate name” can have dispositive legal significance. CitiMortgage v. Foster. Appellee, BAC Home Loan Servicing, LP is not Bank of America, N.A. The two are demonstrably separate corporate entities; one is a limited partnership, and the other is a national association; that is, a federally regulated bank. Appellee’s claim that it has holder status by virtue of the merger of two corporate entities other than itself is meritless. Case Reversed and Dismissed.

    http://www.sconet.state.oh.us/rod/docs/pdf/7/2013/2013-ohio-5775.pdf

  20. People what don’t you understand that only a license regulated home mortgage lender can make a home mortgage loan. So whoever the investor is or is not, if they are not in the business (license) to originate a home mortgage loan it don’t happen. The local 7 Eleven can’t originate or buy home mortgage loans. The Federal Reserve Bank does not originate home mortgage loans, McDonald, Wal-Mart, Target or Walgreen does not originate or buy home mortgage loans.

    Now all these companies deposit monies into banks for many reasons, and as anybody can obtain a loan for what ever purpose they want and bank also borrower monies as we seen through the Fed Discount Window, and with the $16 trillion in secret loan that were handed out a zero to .5% and are re-lending that money out at 4% or 5% right now!

    So we are weeding through were a bank gets it money, when the big boys are trillion dollar asset companies? So everybody knew there were warehouse line of money, and that line is a extension of monies!

    You need to be an license Attorney to practice law in court and not some lawyer who is not license!

  21. apologies for truncating the title of the article.

    FINRA Settles Administrative Proceedings Against Clearing Broker-Dealer For Failures to Comply with Anti-Money Laundering, Financial Reporting and Supervisory Obligations

  22. Neil’s piece on Dec 28 is a few days too early to connect the dots with this sanction.

    Best I can say is Neil brings up the responsibilities of broker dealers and what they can and cannot do, and some broker dealer is in trou-blllllle.

    The middle piece of the article What Are You Really Saying in Plain English Posted on December 28, 2013 by Neil Garfield; states: (outside quotations mine)
    —————————————————————————————-
    “The investor money was used for direct funding of the loan origination or direct funding of the purchase of the loan. But the loan documentation named some third party that didn’t loan or purchase the loan. My analysis indicates that not only was there no agency agreement between the investors and the party NAMED as the originator or purchaser, but that this was an intentional act of deception. The broker dealers selling the bond were selling a security issued by a REMIC trust.

    But instead of giving the trust the money, they kept it and tacked on fees. And instead of using the investors’ money to make loans through a trust they converted a direct funding transaction in which the investors should have been named the lenders into an acquisition from a “third party” thus creating a “profit” for the broker dealer. The profit was the sale of the loan the investor already owned to a trust that was never funded. They took junk mortgages and sold them as platinum loans — creating an entirely fictitious profit for the broker dealer and increasing the risk of loss to investors exponentially.

    So the investor had his money split into two pieces — neither of which was the purchase of the bond, which is why all those investors and agencies and law enforcement are accusing the broker dealer of fraud. One piece was used to fund the origination or purchase of the loan and the other piece was a pool of money that would be used for Servicer advances and extra trading profits on fictitious trades generated internally by the broker dealer. This process creates a lying mortgage securing a lying note. And that is why the investors are saying the paper is unenforceable. ” (outside quotations mine)
    —————————————————————————————-

    Would love to be a witness to the inner circle of these broker dealers after this sanction. Do they fess up and hope to get a lesser penalty, or do they hope no one looks at their recordkeeping? Once an enforcement agency knows where the fraud is, or what it looks like, if it’s in their records, till be easy to find no matter where they look. I suggest fess up and do your disclosures to your stockholders and/or board and/or trustees, et al.

    A censure (does that mean they threw someone under the bus – ie. named a name?) and a fine of 1.0 million dollars and now someone is all in their business and they will have to get into compliance and Chief Executive Officer and Chief Financial Officer are on the hook to put their signature on certifications (ie: the formal certification of some fact). Hows that purported immunity looking now? They are in a position of trust, would someone trustworthy or criminal violate the public trust?

    Their world is based on rules. Get the culpability high enough and ‘stuff’ rolls downhill back to the very people that created it.

    http://www.jdsupra.com/legalnews/finra-settles-administrative-proceedings-58676/

    Dealer For Failures to Comply with Anti-Money Laundering, Financial Reporting and Supervisory Obligations 1/2/2014 by Goodwin Procter LLP

    Any mortgage transactions in that financial reporting and supervision obligation they failed to comply with?

    They may get unjust enrichment, but they can’t keep it.

    Trespass Unwanted, Creator, Corporeal, Life, Free, Independent, State, People, In Jure Proprio, Jure Divino

  23. It all comes down to derivatives and greedy, sociopathic assholes…just like weather derivatives with weather control:

  24. People keep the faith as every other day a court is finding what we know to be true is they have “No Standing” and this is why it was taken out of the final draft of the Independent Foreclosure Review Board. This is why the cowards over at the OCC are now working with LPS and they will behind Sen Warren investigating and request have to address this issue.

    I say we are days away as long as we keep on writing to as many places as possible. The attorney are losing out on payday following these let find out who funded what and when and the escrow is still open crap!

  25. Concerned,

    Where are you? One in SFO sent me a great case and I heard of a good one in LAX. Drop me a note and I’ll give you the names. cbrightlife@aol.com

  26. http://www.jdsupra.com/legalnews/allegations-of-wrongdoing-by-bank-of-ame-60631/

    Allegations of Wrongdoing by Bank of America
    1/2/2014 by Perry Draper Law

    Trespass Unwanted

  27. I’m not sure what everyone else is on about here but back to the subject, indeed advances are made and required pursuant to not only the PSAs and incorporated repurchase agreements for non qualified mortgages that go or were “in default” when allegedly the DOT was “assigned” (as usual after the closing of the trust and void…) but all Notes (typically paragraph 9 under “Obligations of Persons Under this Note”) I’ve ever read contain the language for that obligation making co-obligors “any person who is a guarantor, surety or endorser of this Note is also obligated to do these things” meaning “each person is fully and personally obligated to keep all the promises made in this Note, including the promise to pay the full amount owed.” Further “[t]his means that any one of us may be required to pay all the amounts owed under this Note.”

    I would contend, advances by the servicer or anyone else is a novation of the obligation having been “taken over” (related to “[a]ny person who takes over these obligations, including the obligations of a guarantor, surety or endorser of this Note, is also obligated to keep all the promises made in this Note” also contained in this section.

  28. louise great point, how does MERS appear at the closing with getting in on a legal deal as to who was representing MERS legally as part of the deal? Outside of the lender who knew who MERS was or what they actually did?

    Did MERS in all of this have a dual duty to represent both side of the contract?

  29. How do you audit a trust? Borrower was not officially notified what would happen to their loan and not told who the hell MERS was.

  30. concerned this what they do they try to get you on bullshit procedural nonesense. This is how they threaten the Judges. We need to do the same thing. Pretty much do the judge a favor and recuse the Judge in a nice way.

    The reason it is not proceeding is Politics. Dont forget the Banksters killed Jesus.

  31. This is Crazy Talk Neil…

    1. The Trusts do exist (but perhaps not legally). The senior tranches are still intact and continue to hum along, thank you very much.

    Ok Neil, you wanted comments…here they are:

    2. If the investors were continuing to get paid by the servicers or the investment bankers, then there wouldn’t be dozens of institutional and govt lawsuits against the deal principals for hundreds of billions of dollars, and these guys wouldn’t be settling with the plaintiffs for billions of dollars.

    Sorry, Neil…Back to the drawing board

  32. We got to put heat on these clown by as Trespass has said we doing are own discovery outside of court. So in the case of FHFA who put out today that they recovered $8 billion but who was in charge of buying all this crap in the first place, and who got a duty of checking in on the performance of that product they purchase?

    How does these agencies file claims in court that the loan were illegally underwritten but they meaning Fannie, Freddie, FHA & VA purchase these property from these badly written loan, because it only the damage that can be claimed as a result. So how are the foreclosures held up when know that product did not exist in the form it was As with Ginnie Mae they had a underwritten?

    Not only would a pool be effected because outside the requirement of the loan product that were allowed, the borrowers would naturally be effective and were also!

    Responsibility to ensure that what was in its pool was there legally, and process out of it in a legal fashion. The have a duty to all to ensure a legal process in being conducted, not only for the “investors” but also the borrowers who properties are claimed to be the underlying collateral for the securities. Also that going hand in hand with what statutes in liens were the pools using to think that a blank endorse Note without a purchase gave them justification to think they had a right to these properties?

    How did they fix there brains around not paying a price for something, and somehow when thing went bad they would be owner of the property!

  33. correction: create an implied trust by possession.

  34. More than one transaction means more than one trust.

    Think about it, the Deed of Trust is a trust, and the note was supposed to go into a trust.

    Even more trusts could have been created from and around these activities.

    There are many types including but not limited to constructive, directed, expressed, implied, inter vivos, public, private trusts, etc.

    In my opinion, someone can mail you something and you receiving it without rejecting it and returning it to the sender, and in a crazy way they can potentially create a constructive trust by possession.

    Trespass Unwanted.

  35. @ Charles Reed,

    Did you ever see the dispute leveled by a one-time client of Szymoniak’s? I am not sure if that issue is now in court. But, if so, it could be tying up any action by Szymoniak. The dispute is over whether that ‘whistle-blower’ suit was based on the information from that other party or not. If so, then she improperly filed the suit in her name, not just as the attorney.

    That really could be the reason we see nothing proceeding with Szymoniak.

  36. Wait for it, as time goes on, more will be revealed.
    When someone up the chain of trust has more culpability for activity that happened down the chain, they start investigating how the problems ended up on their desk and they are responsible for what went wrong.

    As they ask questions down the chain, people start revealing stuff that was hidden until you get to who did what that should not have been done and they knew better because they were in a position of ‘public trust’.

    Violate the public trust and ooooo, the penalty is….wow! And those that participated with them…more wow. And if you can show they stole the money and came back for the property that didn’t belong to them, that’s even more wow.

    Wait for it. They have to unwind all their false claims and fake wealth.
    They have gotten unjust enrichment, but they don’t get to keep it.
    That’s the beauty of discovery outside of the courts.

    In my opinion, Judges shall be last; first to judge, last judged.

    Disclosure works both ways. As we learn what was done that shouldn’t be done, they are adjudicating those very same things, and they have precedent from higher court rulings and cases being brought into the judicial system. Their immunity is gone because the Pope cannot give them what he doesn’t have; the power to convey immunity over actions against those endowed by the Creator.

    All men are created equal. An equal has no power over an equal.
    They may judge things to make things unequal, but that doesn’t mean they had the power to do it, they just used people to get it done and to force their will, and they have no immunity for what they do of their will, against an other’s will.

    “Keep smiling and waving boys, smiling and waving.” (the penguins in Madagascar 2005)

    Trespass Unwanted, Creator, Corporeal, Life, Free, Independent, State, People, In Jure Proprio, Jure Divino

  37. Doesn’t this post assume there were functioning trusts. I thought it was agreed that the trusts were empty.

  38. Here is what I just wrote the Justice Dept that as Ginnie Mae is a shareholder of MERS and one of its creators, that there is a conflict of interest as the Federal Government is a shareholder of MERS. Why did the Government only address LPSX when in fact the Szymoniak v. Ace addressed both companies equally in creating forgeries!

    Why is the OCC and Federal Reserve Bank only working on an agreement with LPS when Szymoniak said both were creating forgeries!

    Have you notice that Szymoniak not come forward after the payoff and address the names of people she found to be victims of the case she presented?

  39. Susan Batista Gets it. Now it is your job Neil to get her point accross in Ten Minutes with.

    Homework for Neil.

  40. 15-15D why arent they reporting to the SEC because there is nothing to report. The Trust does not exist or never existed. Why do they have to report to the IRS because the Trust does not exist sort of like a 1099.

  41. and any hint of a Judge not understanding the fact of the the broken chain of title is an Unjust enrichment in favor of the bankster is basically a danger to society. We are paying the judge (tax payer) for not doing his/her job. Licensed Corruption.

  42. IT SOUNDS TO ME THAT THIS IDEA OF A NOVATVION IS LIKE A NOVENA. A PRAYER THAT HOMEOWNERS WILL KEEP PAYING INTO THEIR PONZI SCHEME. THE ONLY UNJUST UNRICHMENT WE RECIEVED IS DISPAIR. WE NEVER AGREED TO ANY OF THIS MONKEY BUSINESS. IT HAS DESTROYED WHOLE LIVES, FAMILIES, NEIGHBIORHOODS, CITIES, COUNTIES, STATES AND OUR COUNTRY. ONLY THE ACTORS AND CREATORS OF THIS PONZI SCHEME SHOULD SUFFER AND BE HELD RESPONSIBLE.

  43. NPV. No Trusts that I am aware of (though wouldn’t be surprised if one popped up after the fact).
    As of now Wells Fargo Plaintiff (though they lent no money and own no note or mortgage) suing for foreclosure with Fannie Mae Investor (hiding behind WF, as Fannie name is nowhere on foreclosure papers). To say nothing about, I WAS NEVER IN DEFAULT IN THE FIRST PLACE !!!!

  44. @ Charles – because of the Glass Steagall repeal, may of the OTS regulated lenders were forced to reach down to pick up the sub-prime just to stay open and competitive with the other lenders who had already begun with their own sub-prime subsidiaries. Long Beach was WAMU’s biggest mistake, and it stood to seal Kerry’s fate years later.

    When you have the treasury police telling you to take the JPM deal, or go to jail, you sell the equity investors right down the river.

    WAMU was no worse off than Chase!!!

  45. Java , any chance that you are being sued by a Plaintiff called Trucap Grantor Trust?

  46. 15-15D only mean they are no longer required to report to the SEC. They still file with teh IRS and reg AB for complioance

  47. I have a bit more of a complicated scenario.

    While sub-servicer B made some advances, they later supposedly credited my mortgage in the REMIC trust with some full payments after they converted the modified payments to ”standard” ones upon breaching the permanent modification agreement.

    They then may have advanced additional payments, but stopped making the advances at some point, entirely.

    Sub-servicer B was bought by another company. I do not know if this impacted the advances of the payments to the trust.

    So now, I’m in BK court. They have not brought any Proof of Claim regarding the debt, nor have they pursued any ‘lift of stay’, although they did add a bill for doing that paperwork on my loan statement.

    That loan was not transferred into the REMIC trust per the IRS time constraints.

    There was fraud at the inducement, in that I had demanded the broker find a NON-Countrywide loan for the RE-FI. Instead, without my knowledge, what he presented to me was a loan that falsely names an entity that did not and does not exist, thus the loan is a void agreement AND represents FRAUD. ALL the attempts by others to transfer this mortgage or other documents related to it, are evidence of the FRAUD. The attempts to use MERS on behalf of an entity that does not have any MERS membership is ridiculous, but I have it in black and white on the various notarized documents.

    Since this was a RE-FI, I was harmed by not knowing with WHOM I really dealing. I could and would have made a number of other financial choices that I later did and/or do not have the option to make. This loan was not essential to me obtaining or keeping my home or any other real estate.

    I fully intend to bring an adversarial action that not only cites the fraud, but also ‘Glaski’. I will also cite that the claimed amount of the secured debt is wrong on two counts: 1) NONE of it is secured due to the void nature of the loan and 2) the monies advanced by the sub-servicer are UNSECURED debt and 3) as noted by Dan Edstrom, this loan could NOT have validly CLOSED since the BROKER and the escrow company he worked with HAD to know of the fact the funding was NOT in accordance with the closing instructions AND that escrow documents/actual funding did not match up with the loan documents.

    I wonder how many of those original escrow companies are still in business? They could have some VERY INTERESTING documents headed at them VERY soon.

    Have any of the ‘big-boys’ started dumping their escrow companies, or striping them to dump them via bankruptcy?

  48. Let take WaMu after Sept 25, 2008 as the bank was closed down as a “fail bank” the issue for government insured loans is that Wells Fargo Bank was acting as the servicer, however as these loan were not involved in the JPMorgan deal the fact are that there was no actul way to determine balances because the payment never went to pay the principal balances as there was no lender.

    At no time after Sept 25, 2008 and actually before could there be a claim that the debt was due. At no time did the actual debt holder come to court claiming a debt due nor did Wells Fargo or MERS come in front of the court claiming that they were working for WaMu as their representation and that homeowner owe WaMu a debt.

    The obvious is that when the alleged lender did not and now cannot now submit to that they are owe a debt should drop all past actions, because the bank is dead and did not have possession of the Notes anyway.

    We only need to bring forward the fact that WaMu ill-responsible action also led to wanting to get deeper in subprime lending in 2006 and having their $308 billion in assets being sold for $1.9 billion. So who know that because the bank had allowed this bad decision to place these loan into Ginnie Mae securities, but allowing the blank Notes to be transferred out their physical possession is an admittance of non ownership!

  49. @Christine,

    Any CA attorneys on your list?

  50. Homeowner Wins on Statute of Limitations
    We are waiting for the order from Texas, but GMAC lost summary judgment due to standing, plus the statute of limitations ran out.

  51. What if you find in the PSA 515-D filing

  52. If the recorded transfer was done after the close of the PSA The loan probably never made it to the PSA. Most Trust are really Dead. Non existent or closed. So where the F*ck did my payments go? The ones before the so Called Transfer and After.

  53. Here the problem with all these other issues is Neil is wanting to prove these monies came from here and they, which in many cases means what? But also bring back into the question did the borrowers pay the debt and how did this effect the borrower from paying?

    Who are you working for? The point is was the correct party being paid and is the correct party calling the Note due. All these other transaction are without the homeowner and has nothing to do with the owner, but was does effect the homeowner is a pass-through payment is paying other than the lender to pay down the principal balance of the homeowner’s loan, and the process of pooling prevented the homeowner from working out any problems of the loan, and they have ended up paying payment to a non-financially interested party!

    Let remember that the only way to foreclose was to use a forgery to claim a party other that the “holder in due course”!

  54. Christine. She never took it on because she felt I was too far down the Fraudclosure pipeline for her to help me ….I met her too late, I suppose.
    I do keep her in the loop as much as I can on my pro-se fight. And she agrees their are mistakes/fraud on WF part and that I am correct in my assumptions. However That still hasn’t helped me breakthrough with victory (yet !!!)

  55. NPV. Yes. Wells Fargo is the SERVICER, by way of two broken assignments.

  56. Java, any chance you have Wells as servicer?

  57. @ Javagold, there are many great lawyers in every state. Unfortunately, they know they are great and bill accordingly. It is my impression that most homeowners do not want to pay for the attorney, because they either do not have the money, or want to get their mess fixed for free. Not everyone, but many.

    @ NG – the term used in every Prospectus Supplement for an MBS pool explains your scenario. The key word is – the Master Servicer / Sub-Servicer (who normally was the loan originator and owns residual certificates in the pool is not required to continue to remit (alleged servicer advances). They only advance 90 days of interest, taxes and insurance, and thereafter only advance monies for escrow so the municipality does not undue their scheme with a tax sale, and they are paid if the homeowner burns the house to the ground.

    It is not the Trustee who requires the escrow advance – it is the investment bank, who remits a very, very small portion of the CDS proceeds to the pool, not the trust, the pool.

  58. Did Helen bail out? Actually, there are a few more. I’ll give you a few names when I come back later.

  59. Now if there Were only some lawyers in NJ (and other 49 states) willing to fight and defend the homeowners !#!#!

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