About Neil Garfield and the LivingLies Team
Neil F. Garfield, M.B.A., J.D., 67, is the winner of dozens of academic awards, a popular speaker, and author of articles and technical treatises on law, finance and economics. He has concentrated his law practice for the last 7 years on issues related to structured finance (securitization in particular). As a former investment banker and real estate investor, he knows mortgage securitization issues from the inside out, who the deciders are, and how they arrived at a catastrophic scheme to defraud, people, agencies, institutions, and governments all over the world. As an expert witness and trial lawyer for 37 years, his efforts to spot evolving trends have helped thousands of homeowners keep their home and receive damages as compensation. Having formerly filed hundreds of foreclosure actions as the attorney for small banks, homeowner associations and mechanics liens, he is well suited to provide assistance to investigators, lawyers and pro se litigants.
Garfield has offices in Tallahassee and Fort Lauderdale. He is a licensed member of the Florida Bar and appears as special counsel, trial consultant and expert witness across the United States and in 26 countries. His work includes consulting with State legislatures, law enforcement and bank regulators. In the course of his extensive research, analysis and writing on the mortgage meltdown, he has interviewed dozens of insiders to confirm or corroborate his conclusions.
The former consumer advocate, trial attorney, and economist says that he “can’t watch this meltdown without lending a helping hand to those in distress.” Appearing on TV, Radio, multiple blogs, and live appearances, Garfield offers bold and sound advice for dealing with the “largest economic fraud in human history.” The solution he says lies in a collaborative approach in which the investors who advanced money to buy “mortgage bonds” (derivatives) are brought together with borrowers. His conceptual framework requires replacing existing “servicers” who are not legally authorized to represent the investors with servicers whose mission is preservation of investor capital and acting within the bounds of applicable law. “The problem,” he says is that “the alleged servicers are only incentivized to foreclose regardless of the negative consequences to the lenders, the borrowers, government and society.”
Garfield says the servicers can be fired by any credible group of investors that have been identified as trust beneficiaries of any REMIC trust. “Having ignored the terms of the trust,” he says “the servicers cannot now claim the benefits of it.” Garfield says these investors should name new servicers with whom they have a direct contract for servicing the loan in ways that will result in the greatest recovery of invested capital.
His family owned seats on all major securities exchanges as Garfield & Co. from 1945-1983. He has represented borrowers, homeowners, hundreds of homeowner associations, banks, developers and private lenders.
Garfield has appeared as guest commentator on radio, TV, newspapers and magazines.
Neil has come out of retirement with one purpose in mind — to do all he can to counter the effects of the Mortgage Meltdown and save the people and the country from the disaster created by the creation of “free money” using derivative securities that not even experts understood, and targeting the least sophisticated members of society.
Living in Tallahassee, Florida, Garfield comes from a long line of Garfield creators and innovators: His great-grandfather created the first fully automated pharmaceutical plant in the United States 100 years ago, which now stands as an exhibit in the Smithsonian Institution in Washington, D.C. His cousin, Brian Garfield is a prolific and acclaimed author of fiction and movies (Death Wish, Hopscotch, Kolchak’s Gold) and nonfiction (Currently the “War in the Aleutian Islands” is a popular coffee table book). His family funded research in the 1950′s that resulted in the worldwide production of lanolin from cholesterol. The Garfield Foundation is a major contributor to wildlife refuge and environmental causes.
For over 7 years, Neil Garfield has been researching, writing and collecting information about homeowners in distress and teaching lawyers how to litigate foreclosure defense cases. After correctly predicting the housing crash right down to the last dotted “i” and crossed “t” he began writing his blog http://www.livinglies.wordpress.com. Starting with modest results, the blog took on a life of its own and has enjoyed nearly 10 million visits from readers like you.
His basic premise, set forth in his FAQ and Mission statement is that the foreclosure mess was not a situation where millions of people suddenly appeared needing housing, but where Trillions of dollars appeared and investment banks were in search of vulnerable, unsophisticated, trusting people who could be convinced to sign their names under false pretenses and false representations originating from investment banks and delivered to investors and borrowers. He believes that securitization of debt is a legitimate method of risk diversification but that the investment banks in practice turned it into a PONZI scheme, the full scope of which is not yet fully understood by government, the press or the public.
He was first alerted to the possibility that the investment banks were conducting a fraudulent enterprise when he learned of a study by Katherine Ann Porter at the University of Iowa in 2007 where it was first revealed that 40% of the closing documents, including the promissory notes from “borrowers” had been destroyed or “lost.” Knowing that this percentage was far too high to be dismissed as accidental he quickly concluded that the destruction of notes and other closing documents was intentional. He eventually concluded that the only reason a sophisticated worldwide banking institution would destroy promissory notes (equivalent of cash) was that the notes were created and sold under false pretenses.
It was better for the banks to be guilty of negligence than to have the evidence readily on hand that they had intentionally created and operated a fraudulent enterprise.”You would only shred a $10 bill if its continued existence would implicate you in civil or criminal liability. So you would shred it because you told someone it was a $100 bill and now they want to see it. Better to be guilty of negligence than criminal or civil fraud.”
Examining thousands of closings in the context of his research, investigation, interviews and analysis, he found that there were two central problems to the claims of securitization in practice:
(1) the loans were switched at closing with the borrowers meaning that the documented loan signed by borrower under false pretenses referred to a transaction that never existed and the closing proceeded based upon a prior Assignment and Assumption agreement calling for violation of various State and Federal law and was therefore void as were the acts performed pursuant to the illegal agreement and
(2) that the accounts were switched at closing with the lenders (investors) meaning that the money of investors was not placed in the REMIC trust that was shown to them and that the loans were never delivered or transferred to the Trust. The result was that investor money in many cases came directly to the closing table unknown to both the investors and the borrowers.
Third parties claimed the loan as their own. But the loan relationship or contract was actually created between the investors and the borrowers, for which there was no documentation other than wire transfer receipts in the money trail which had to be traced to their funding sources, since various intermediaries were used to conceal the true nature of the transaction. His conclusion is that in many cases neither the trust documents and related securitization instruments nor the note and mortgage are contractual documents that can be enforced and none of them should have been filed or recorded.
Agreeing with the allegations in the lawsuits of investors, insurers, guarantors, and other third party sources of funding, Garfield concludes that both the Pooling and Servicing Agreement and the the note and mortgage are unenforceable documents because the main premise of each was ignored as were the central terms. Hence neither the investors nor the borrowers are subject to provisions, terms and restrictions contained in the Pooling and Servicing Agreement, promissory note or mortgage each of which is a nullity. The conduct of the intermediary parties created by the investment banks corroborates both the substance of Garfield’s conclusions and the intent to defraud — this fully explaining the need for forged, fabricated, robo-signed documents that were neither authorized nor true.
Garfield’s final conclusion is that only the intermediaries want foreclosures because they are cutting off the liability to refund multiple disguised sales of the same loan. The value of the loan is continually diminished by each step in the foreclosure process despite a majority of cases in which the preservation of the investors’ capital would be far better served by a workout between investors and borrowers, reserving their rights to bring claims against the intermediaries who essentially stole the identity and rights of both the investors and the borrowers. With the investment banks continuing to “settle” claims for misbehavior by payment of fines — using investor money — they continue to diminish the capacity of the investors to be paid in full and the corresponding rights of the borrowers to a lower balance that is due (thus making the workout, settlement or modification far easier than the the current system in which “servicers” use any means possible to lure people into default and then foreclose, this protecting and enriching the servicer while the investor and the borrower suffer).
His central thesis is that BOTH the investor/Lenders who advanced the cash and the homeowners who mistakenly believed they had encumbered their homes have a legal basis to take the driver’s seat. The deal was always between the investors and the homeowners. Instead the banks diverted the money and paper where they claimed ownership of the bonds and loans, (and even claimed losses that were nonexistent) cheating the investors (government, insurers etc) out of money and security and stealing homes on the basis of loans that had already been paid and should be distributed to investors, this reducing or eliminating the original debt, which in all events is not truly secured.