OCC: 13 Questions to Answer Before Foreclosure and Eviction

13 Questions Before You Can Foreclose

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SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Note: Some banks are slowing foreclosures and evictions. The reason is that the OCC issued a directive or letter of guidance that lays out in brief simplistic language what a party must do before they can foreclose. There can be little doubt that none of the banks are in compliance with this directive although Bank of America is clearly taking the position that they are in compliance or that it doesn’t matter whether they are in compliance or not.

In April the OCC, responding to pressure from virtually everyone, issued a guidance letter to financial institutions who are part of the foreclosure process. While not a rule a regulation, it is an interpretation of the Agency’s own rules and regulation and therefore, in my opinion, is both persuasive and authoritative.

These 13 questions published by OCC should be used defensively if you suspect violation and they are rightfully the subject of discovery. Use the wording from the letter rather than your own — since the attorneys for the banks will pounce on any nuance that appears to be different than this guidance issued to the banks.

The first question relates to whether there is a real default and what steps the foreclosing party has taken to assure itself and the court that the default is real. Remember that the fact that the borrower stopped paying is not a default if no payment was due. And there is no default if it is cured by payment from ANYONE after the declaration of default. Thus when the subservicer continues making payments to the “Creditor” the borrower’s default is cured although a new liability could arise (unsecured) as a result of the sub servicer making those payments without receiving payment from the borrower.

The point here is the money. Either there is a balance or there is not. Either the balance is as stated by the forecloser or it is not. Either there is money due from the borrower to the servicer and the real creditor or there is not. This takes an accounting that goes much further than merely a printout of the borrower’s payment history.

It takes an in depth accounting to determine where the money came from continue the payments when the borrower was not making payments. It takes an in depth accounting to determine if the creditor still exists or whether there is an successor. And it takes an in depth accounting to determine how much money was received from insurance and credit default swaps that should have been applied properly thus reducing both the loan receivable and loan payable.

This means getting all the information from the “trustee” of the REMIC, copies of the trust account and distribution reports, copies of canceled checks and wire transfer receipts to determine payment, risk of loss and the reality of whether there was a loss.

It also means getting the same information from the investment banker who did the underwriting of the bogus mortgage bonds, the Master Servicer, and anyone else in the securitization chain that might have disbursed or received funds in connection with the subject loan or the asset pool claiming an interest in the subject loan, or the owners of mortgage bonds issued by that asset pool.

If the OCC wants it then you should want it for your clients. Get the answers and don’t assume that because the borrower stopped making payments that any default occurred or that it wasn’t cured. Then go on to the other questions with the same careful analysis.

http://www.businessweek.com/news/2013-05-17/wells-fargo-postpones-some-foreclosure-sales-after-occ-guidance

/http://www.occ.gov/topics/consumer-protection/foreclosure-prevention/correcting-foreclosure-practices.html

“Untouchables” Touches Nerves

Ken McLeod is a private investigator with 35 years of law enforcement experience in economic crimes. Clients utilize his services for finding individuals (signatories etc.) and developing facts that contradict the facts that the bank attempts to proffer to the Court.

Dear Mr. Smith,

Last night I watched ‘The Untouchables’, for the second time.  This evening a group of my friends and I are going to watch it again.

During your interview of Mr. Brewer and the Agent from the FBI, I was struck by the spin these two individuals used as to their stated inability to find ‘anyone’ who could implicate Wall Street in criminal activity.  I saw the amazement on your face too at their answers, or, really non-answers.

For almost six years thousands of homeowners have been telling their story to uncaring or disinterested law enforcement officials and Judges.  The result has not been criminal prosecutions, but rather, these same people being kicked to the street.  The regular guy who complains about mortgage fraud is simply labeled a nutcase and summarily dismissed.

I am a private investigator and too, battling Wall Street.  However, in my case, I treated my investigation less like a search for civil documents and instead a criminal investigation.  I tracked down the perpetrators of the actual fraud in companies such as Deutsche Bank, Barclay’s Capital, HomeQ and others.  I interviewed these individuals and digitally recorded their conversations.

The recordings tell a chilling first person story of fraud and deceit by organizations worth trillions of dollars.  Corporate signers and notaries admitting that ‘the documents will never see the inside of a courtroom because they look like right, they have stamps and signatures…” and, “…when I got your phone call for an interview, the first thing I thought about doing was creating a dummy log…”.  More importantly though, are the stories about how  these interviewees were instructed by their senior managers to knowingly break the law.

I sent copies of my recordings to every law enforcement agency I could think of, from local police, the state Attorney General, the FBI, and, the Inspector General of the FNMA and its Senior Special Agent Martin Abad (yes, I recorded him too).  Despite pointing out hundreds of millions of dollars in fraud, and an even higher amount in the value of homes taken improperly, the most common response was, as you found out, “This is too big”.  Too big to prosecute – tell that to the families who have been removed at gun point from their homes at the behest of the banks and their lawyers.

Best regards,

Ken McLeod #1624426

Private Investigator

McLeod Investigations
(480) 296-8903

Agenda for Member Only Teleconference Tonight

1. OCC Consent Decrees
2. OCC Guidance — 13 Questions
3. Discovery
4. Pleading
5. GGKW
6. Chris Hayes
7. Rachel Maddow
8. Jon Stewart
9. Bill Maher reversal
10. Occupy and demonstrations, violence
11. IT’S ABOUT THE MONEY! Tracking the money trails before you look to the documents.
12. Lawsuits to recover economic damages on wrongfully foreclosed homes

Sitting on a Powder Keg: Riots and Demonstrations Worldwide

With the addition of Sweden to those countries rocked by and surprised by rioting over economic conditions and inequality, the day of reckoning for the banks and the governments controlled by the banks is nearing. As we saw in the Arab Spring and other social phenomena when passions reach critical mass, things change — and not always for the best, at least not at first.

History shows us that when inequality and social welfare are at their worst, as perceived by the public, a significant minority rises up, changes government and takes their revenge on the wicked and innocent alike. Our own revolution was a minority movement that achieved critical mass with very few people leading to the charge or even attending meetings.

Sweden, a country that prides itself on social justice, was hit yesterday by the fury of rioting citizens. And the Occupy Movement demonstration yesterday resulted in 17 arrests and Taser of at least one demonstrator. Anyone who believes that this will blow over without consequences is mistaken. The underlying problems of inequality were not the result of a business cycle: they were the result of criminal behavior of bankers colluding to take wealth, property and income away from virtually everyone.

The manipulation of LIBOR and the indexes that feed into LIBOR is an example of the arrogance of bankers who seem to know they won’t go to jail and probably will suffer no penalty whatsoever. Meanwhile the loans tied to changes in LIBOR as published by the Wall Street Journal had changes in interest rates dictated not by market forces by by the brute force of arrogant bankers whose religion is money.

The mortgage situation all over the world is what is causing the economies around the world to bleed. It was caused by bankers who cornered the market on money thus acting against free market forces which they pretend to like so much. They created an unprecedented storm by raising asset prices artificially, betting that the prices would come down to normal levels and defrauding pension funds and other investors plus defrauding homeowners, consumers, and tax-paying citizens. In the end they have the money and property and everyone else suffers. This fact is not lost on the public.

If we want to avoid the same fate as dozens of other countries around the world in turmoil we must return to being a nation of laws. It is in the public domain now that the banks have illegally foreclosed on millions of homeowners. Not only have they not gone to jail for mortgage fraud, wire fraud, RICO and other criminal actions, they have been rewarded with both more money and weakening of regulations that might prevent them from doing it again — if we ever get out of this mess.

The right thing to do when the wrong thing was done, is to make it right. If someone was foreclosed upon illegally they should get their house back or bargain for a dollar settlement that takes into account economic loss and the indignities of damage to lifestyle and reputation. As things stand now, this remedy is slipping away — and yet it is the only right thing to do. Millions of people in this country and Europe are falling into poverty, which means they don’t have the resources to put food on the table or a roof over their heads. To add insult to injury when tragedy strikes in places like Moore, Oklahoma the insurance companies are paying the banks that have no loss whatsoever.

I counsel people to avoid violence and to never disobey a direct instruction from anyone in law enforcement. It will only make matters worse. But I can tell from people who contact me and the mainstream news stories that people have no respect left for a legal system that does not respect the right of people and favors corporations and institutions even if they have obviously committed crimes against humanity, the state and millions of individual citizens. We have seen violence before and nobody liked it. I think it might be coming to our shores with a vengeance.

We can save ourselves the trouble if we break up the mega banks, break their hold on government and reduce them to the status of utilities regulated carefully so that they don’t run away with transactions conducted by their customers — which is exactly what happened in the continuing mortgage  meltdown. Occupy is right, Elizabeth Warren is right, and even the rioters are right (even if we disagree with their methods).

Sweden’s capital hit by worst riots in years
http://uk.reuters.com/article/2013/05/22/uk-sweden-riots-idUKBRE94L0C720130522

Millions falling into poverty in recession-racked Italy: report
http://www.reuters.com/article/2013/05/22/us-italy-economy-poverty-idUSBRE94L0AX20130522

Peaceful Foreclosure Protester Tased At Department of Justice
http://crooksandliars.com/susie-madrak/peaceful-foreclosure-protester-tased-

How Foreclosure Undermined Black and Brown Wealth
http://www.theroot.com/buzz/how-foreclosure-undermined-black-and-brown-wealth

Warren asks feds: Why no cases against bankers?
http://www.cbsnews.com/8301-505123_162-57584642/warren-asks-feds-why-no-cases-against-bankers/

Elizabeth Warren Asks New Treasury Secretary If He’ll Be As Bad On Big Banks As The Old One (VIDEO)
http://www.huffingtonpost.com/2013/05/21/elizabeth-warren-jack-lew_n_3315005.html

Banks Win Big as Regulators Refuse to Rein in $700 Trillion Derivatives Market
http://www.truth-out.org/video/item/16500-banks-win-big-as-regulators-refuse-to-rein-in-700-trillion-derivatives-market

“Conversion” of the Note to a Bond Leaves Confusion in the Courts

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Brent Bentrim, a regular contributor to the dialogue, posed a question.

I am having some trouble following this.  The note cannot be converted any more than when a stock is purchased by a mutual fund (trust) it becomes a mutual fund share.

You’re close and I understand where you seem to be going…ie, the loans were serviced not based on the note and closing documents, but on the PSA.  What I do not understand is the assumption that the note was converted.  From a security standpoint, it cannot.

You are right. When I say it was “converted” I mean in the lay sense rather a legal one. Of course it cannot be converted without the borrower signing. That is the point. But the treatment of the debt was as if it had been converted and that is where the problem lies for the Courts — hence the diametrically opposed appellate decisions in GA and MA. Once you have pinned down the opposing side to say they are relying on the PSA for their authority to bring the foreclosure action, and relying on the “assignment” without value, the issue shifts —- because the PSA and prospectus have vastly different terms for repayment of interest and principal than the note signed by the borrower.There are also different parties. The investor gets a bond from a special purpose vehicle under the assumption that the money deposited with the investment bank goes to the SPV and the SPV then buys the mortgage or funds the origination. In that scenario the payee on the note would either be the SPV or the originator. But it can’t be the originator if the originator did not fulfill its part of the bargain by funding the loan. And there is no disclosure as to the presence of other parties in the securitization chain much less the compensation they received contrary to Federal Law. (TILA).

Under the terms of the PSA and prospectus the expectation of the investor was that the investment was insured and hedged. That is one of the places where there is a break in the chain — the insurance is not made payable to either the SPV or the investors. Instead it is paid to the investment bank that merely created the entities and served as a depository institution or intermediary for the funds. The investment bank takes the position that such money is payable to them as profit in proprietary trading, which is ridiculous. They cannot take the position that they are agents of the creditor for purposes of foreclosure and then take the position that they were not agents of the investors when the money came in from insurance and credit default swaps.

Even under the actual money trail scenario the same holds true — they were acting as agents of the principal, albeit violating the terms of the “lender” agreement with the investors. Here is where another break occurred. Instead of funding the SPV, the investment bank held all investor money in a commingled undifferentiated mega account and the SPV never even had any account or signatory on any account in which money was placed.

Hence the SPV cannot be said to have purchased the loan because it lacked the funding to do it. The banks want to say that when they funded the origination or acquisition of the loan they were doing so under the PSA and prospectus. But that would only be true if they were following the provisions and terms of those instruments, which they were not. The banks funded the acquisition of loans directly with investor money instead of through the SPV, hence the tax exempt claims of the SPV’s are false and the tax effects on the investors could be far different — especially when you consider the fact that the mega suspense account in the investment bank had funds from many other investors who also thought they were investing in many different SPVs.

The reality of the money trail scenario is that the SPV can’t be the owner of the note or the owner of the mortgage because there simply was no transaction in which money or other consideration changed hands between the SPV and any other party. The same holds true for all the parties is the false securitization trail — no money was involved in the assignments. Thus it was not a commercial transaction creating a negotiable instrument.

In both scenarios the debt was created merely by the receipt of money that is presumed not to be gift. The question is whether the note, the bond or both should be used to re-structure the loan and determine the amount of interest, principal, if any that is left to pay.

The further question is if the originator did not loan any money, how can the recording of a mortgage have been proper to secure a debt that did not exist in favor of the secured party named on the mortgage or deed of trust?

And if the lender is determined by the actual money trail then the lenders consist of a group of investors, all of whom had money deposited in the account from which the acquisition of the loan was funded. And despite investment bank claims to the contrary, there is no evidence that there was any attempt to actually segregate funds based upon the PSA and prospectus. So the pool of investors consists of all investors in all SPVs rather just one — a factor that changes the income and tax status of each investor because now they are in a common law general partnership.

Thus the “conversion” language I have used, is merely shorthand to describe a far more complex process in which the written instruments were ignored, more written instruments were fabricated based upon nonexistent transactions, and no documentation was provided to the investors who were the real lenders. That leaves a common law debt that is undocumented by any promissory note or any secured interest in the property because the recorded mortgage or deed of trust was filed under false pretenses and hence was never perfected.

The conversion factor comes back in when you think about what a Judge might be able to do with this. Having none of the documentation naming and protecting the investors to document or secure the loan, the Judge must enter judgment either for the whole amount due, if any (after deductions for insurance and credit default swap proceeds) or in some payment plan.

If the Judge refers to the flawed documentation, he or she must consider the interests and expectation s of both the lender (investors) and the borrower, which means by definition that he must refer back to the prospectus and PSA as well as the promissory note.

The interesting thing about all this is that homeowners are of course willing to sign new mortgages that reflect the economic reality of the value of their homes, and the principal balance due, as well as money that continued to be paid to the creditor by the same same servicer that declared the default (and was therefore curing the default with each payment to the creditor).

The only question left is where did the money come from that was paid to the creditor after the homeowner stopped making payments and does that further complicate the matter by adding parties who might have an unsecured right of contribution against the borrower for money  advanced advanced by an intermediary sub servicer thereby converting the debt (or that part that was paid by the subservicer from funds other than the borrower) from any claim to being secured to a potential unsecured right of contribution from the borrower.

To that extent the servicer should admit that it is suing on its behalf for the unsecured portion of the loan on which it advanced payments, and for the secured portion they claim is due to other parties. They obviously don’t want to do that because it would focus attention on the actual accounting, posting and bookkeeping for actual transfers or payments of money. The focus on reality could be devastating to the banks and reveal liabilities and reduction of claimed assets on their balance sheets that would cause them to be broken up. They are counting on the fact that not too many people will understand enough of what is contained in this post. So far it seems to be working for them.Remember that as to the insurance and credit default swaps there are express waivers of subrogation or any right to seek collection from the borrowers in the mortgages. The issue arises because the bonds were insured and thus the underlying mortgage payments were insured — a fact that played out in the real world where payments continued being made to creditors who were advancing money for “investment” in bogus mortgage bonds. This leaves only the equitable powers of the court to fashion a remedy, perhaps by agreement between the parties by which the lenders are made parties to the action and the borrowers are of course parties to the action but he servicers are left out of the mix because they have an interest in continuing the farce rather than seeing it settled, because they are receiving fees and picking up property for free (credit bids from non-creditors).

This is precisely the point that the courts are missing. By looking at the paperwork first and disregarding the actual money trail they are going down a rabbit hole neatly prepared for them by the banks. If there was no commercial transaction then the UCC doesn’t apply and neither do any presumptions of ownership, right to enforce etc.

The question of “ownership” of the note and mortgage are a distraction from the fact that neither the note or the mortgage tells the whole story of the transaction. The actions of the participants and the real movement of money governs every transaction.

Whether the courts will recognize the conversion factor or something similar remains to be seen. But it is obvious that the confusion in the courts relates directly to their ignorance of the the fact that the actual money transaction is not brought to their attention or they are ignoring it out of pure confusion as to what law to apply.

Now UCC Me, Now You Don’t: The Massachusetts Supreme Judicial Court Ignores the UCC in Requiring Unity of Note and Mortgage for Foreclosure in Eaton v. Fannie Mae
http://4closurefraud.org/2013/05/20/now-ucc-me-now-you-dont-the-massachusetts-supreme-judicial-court-ignores-the-ucc-in-requiring-unity-of-note-and-mortgage-for-foreclosure-in-eaton-v-fannie-mae/

High court rules in favor of bank in Suwanee foreclosure case
http://www.gwinnettdailypost.com/news/2013/may/20/high-court-rules-in-favor-of-bank-in-suwanee/

Wells Fargo slows foreclosure sales, BofA not so much
http://www.bizjournals.com/orlando/morning_call/2013/05/wells-fargo-slows-foreclosure-sales.html

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LAWYER BONANZA!: Wells Fargo Foreclosing on Homeowner Who Made all Payments and Paid Extra

WELLS FARGO MAKES HUGE ERROR ADMITTING LACK OF POWER TO BIND CREDITOR TO MODIFICATIONS OR SETTLEMENTS

The simple truth is that the banks are not nearly as interested in the property as they are in the foreclosure. It is the foreclosure sale that creates the illusion of a stamp of approval from the state government that the entire securitization scheme was valid and it creates the reality of a presumption of the validity of the deed issued at the so-called auction of the property upon submission of  false credit bid from a non-creditor who is a stranger (not in privity) to the transaction alleged. — Neil F Garfield, livinglies.me

see also http://livinglies.wordpress.com/2013/05/16/estoppel-when-the-bank-tells-you-to-stop-making-payments/

Editor’s Comment and Analysis: Wells Fargo is foreclosing on a man who has made his payments early and made extra payments to pay down the principal allegedly due on his mortgage. In response to media questions as to their authority to foreclose, the response was curious and very revealing. Wells Fargo said that the reason was that the securitization documents contain restrictions and prohibitions that prevent modifications of mortgage.

The fact that Wells Fargo offered a particular payment plan and the homeowner accepted it together with the fact that the homeowner made the required payments and even added extra payments, all of which was accepted by Wells Fargo and cashed  doesn’t seem to bother Wells Fargo but it probably will bother a judge who sees both the doctrine of estoppel and a simple contract in which Wells Fargo had the apparent authority to make the offer, accept the payments, and bind the actual creditors (whoever they might be).

It also corroborates our continuing opinion that when Wells Fargo and similar banks received insurance and creditable swap payments, they should have been applied to the receivable account of the investors which in turn would have resulted by definition in a reduction of the amount owed. The reduction in the amount owed would obviously decrease the amount payable by the borrower. If we follow the terms of the only contract that was signed by the borrower then any overpayments to the creditor beyond account receivable held by the creditor would be due and payable to the borrower. It is a violation of the spirit and content of the federal bailout to allow the banks to keep the money that is so desperately needed by the investors who supplied the money and the homeowners whose loans were paid in whole or in part by insurance and credit default swaps.

The reason I am interested in this particular case and the reason why I think it is of ultimate importance to understand the significance of the Wells Fargo response to the media is that it corroborates the facts and theories presented here and elsewhere that the original promissory note vanished and was replaced by a mortgage bond, the terms of which were vastly different than the terms of the promissory note signed by the homeowner.

Wells Fargo seeks to impose the terms, provisions, conditions and restrictions of the securitization documents onto the buyer without realizing that they have admitted that the original promissory note signed by the homeowner and therefore the original mortgage lien or deed of trust were never presented to the actual lenders for acceptance or approval of the loan.

CONVERSION OF PROMISSORY NOTE TO MORTGAGE BOND WITHOUT NOTICE

In fact, Wells Fargo has now admitted that the terms of the loan are governed strictly by the securitization documents. How they intend to enforce securitization documents whose existence was actively hidden from the borrower is going to be an interesting question.  If the position of the banks were to be accepted, then any creditor could change the essential terms of the debt or the essential terms of repayment without notice or consent from the borrower despite the absence of any reference to such power in the documents presented to the borrower for the borrower’s signature.

 But one thing is certain, to wit: the closing documents presented to the borrower  were incomplete and failed to disclose both the real parties in table funded loans (making the loans predatory per se as per TILA and Reg Z) and the existence and compensation of intermediaries, the disclosure of which is absolutely mandatory under federal law. Each borrower who was deprived of knowledge of multiple other parties and intermediaries and their compensation has a clear right of action for recovery of all undisclosed fees, interest, payments, attorney fees and probably treble damages.

This case also clearly shows that despite the representations by counsel and “witnesses” Wells Fargo has now admitted the basic fact behind its pattern of conduct wherein they claim to be the authorized sub servicer fully empowered by the real creditors and then claim to have no responsibility or powers with respect to the loan or the real creditors (which appears to include the Federal Reserve if their purchase of mortgage bonds had any substance).

Wells Fargo, US Bank, Bank of New York and of course Bank of America have all been sanctioned with substantial fines of up to seven figures so far in individual cases where they clearly took inconsistent positions and the judge found them to be in contempt of court because of the lies they told and levied those sanctions on both the attorneys and the banks.

It was only a matter of time before this entire false foreclosure mess blew up in the face of the banks. You can be sure that Wells Fargo will attempt to bury this case by paying off the homeowner and any other people that have been involved who could blow the whistle on their illegal, fraudulent and probably criminal behavior.

This is not the end of the game for Wells Fargo or any other bank, but it is one more concrete step toward revealing basic truth behind the mortgage mess, to it: the Wall Street banks stole the money from the investors, stole the ownership of the loans from the “trusts” and have been stealing houses despite the absence of any monetary or other consideration in the origination or acquisition of any loan. This absence of consideration removes the paperwork offered by the banks from the category of a negotiable instrument. None of the presumptions applicable to negotiable instruments apply.

Once again I emphasize that in practice lawyers should immediately take control of the narrative and the case by showing that the party seeking foreclosure possesses no records of any actual or real transaction in which money exchanged hands. This means, in my opinion, that the allegations of investors in lawsuits against the investment banks on Wall Street are true, to wit: they were entitled to an forcible notes and enforceable mortgages but they didn’t get it. That is an admission in the public record by the real parties in interest that the notes and mortgages are fabricated because they referred to commercial transactions that never occurred.

Going back to my original articles when I started this blog in 2007, the solution to the current mortgage mess which includes the corruption of title records across the country is that the intermediaries should be cut out of the process of modification and settlement. A different agency should be given the power to match up investors and borrowers and facilitate the execution of new promissory notes new mortgages or deeds of trust that are in fact enforceable but based in reality as to both the value of the property and the viability of the loan. It is the intermediaries including the Wall Street banks, sub servicers, Master servicers, and so-called trustees that are abusing the court process and clogging the court calendars with false claims. Get rid of them and you get rid of the problem.

http://4closurefraud.org/2013/05/16/wells-fargo-forecloses-on-florida-man-who-paid-on-time-early/

BOA, Urban Lending Sued in Qui Tam by WHistleblower: They never intended to modify the loans

Just a quick note as follow up to my article this morning. Read this qui tam complaint and see how it corroborates the facts and theories presented on this blog. Note the following quote: ” these mechanisms of fraud were and are interconnected and directly observed by Relator Mackler, who worked with various BOA executives while at Urban Lending Solutions beginning in April 2010. BOA outsources various HAMP obligations to Urban. Upon witnessing the unlawful, fraudulent practices listed above, among others, Mackler brought his concerns to the highest levels of Urban and to executives at Bank of America. Eventually, his objections to these practices led to his termination on March 17, 2011.”

US ATTORNEY GOT THIS DISMISSED BUT ANOTHER ONE IS PENDING IN MASSACHUSETTS UNDER SEAL.

Read, plagiarize This, and use it: http://www.documentcloud.org/documents/324428-greg-mackler-complaint.html

http://thinkprogress.org/economy/2012/03/08/440628/whistleblower-claims-bofa-blocked-help/?mobile=nc

Estoppel: When the Bank Tells You to Stop Making Payments

IMPORTANT PRACTICE NOTE: The use of the doctrine of estoppel on the facts presented in this article is only a temporary solution. If a representative of the bank told you to stop paying and then declared you in default and foreclose  it is unfair and that is exactly why we have the doctrine of estoppel. However, on these facts, the doctrine can only be applied for as long as the issue of modification or settlement is on the table. Whether it can be bootstrapped into an action for slander of title or breach of contract is an issue that will be decided by the courts.

My opinion is that on these facts the doctrine of estoppel will not serve as the foundation for an action for slander of title or breach of contract.

However, my opinion is that a lawsuit for intentional interference in the contractual rights of another could be brought if an intermediary between you and the servicer or between you and the creditor instructed you to stop making payments if you wish to seek a modification or settlement. 

If you are making that allegation you obviously want to say that the party who made that representation fraudulently induced you to believe that they have the authority to do it, but in fact lacked that authority inasmuch as  the sub servicer is almost certainly going to deny that they had the authority to make such representations.  In discovery the truth will come out —  the representative had been instructed to make those representations to homeowners by a sub servicer who lacked actual authority to make collections or decisions concerning the disposition of the loan because the entire paper trail of the securitization chain was false. This will enable you to sue both the representative and the sub servicer who gave the instruction. (Make sure you seek the advice of an attorney who is licensed in the jurisdiction in which a property is located and is familiar with these issues and does research to corroborate and fortify the arguments).

If you then received a declaration of default, notice of sale or a foreclosure lawsuit it could be argued that the intermediary was not a party with whom the homeowner was in privity. This argument would be fortified by a denial from the sub servicer that the intermediary had any authority make that statement.

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

EDITOR’S ANALYSIS AND COMMENT:  Judges seem to find it hard to believe that a creditor would tell the borrower to stop making payments. It sounds ridiculous. But the fact remains that the majority of the homeowners who have been declared in default were told exactly that by a representative with apparent authority to speak for the sub servicer and apparent authority to speak for the creditor.

I would suggest that anyone reading this article who has received that instruction from a person, party or institution draft an affidavit that is notarized that can be used by other parties to show the judge that this is a pattern of conduct that permeates the entire foreclosure industry. You can send those affidavits to me at NeilFGarfield@Hotmail.com  and without charge we will make those available to any lawyer or pro se litigant in need of those affidavits.  And by the way, let your lawyer draft the affidavit and retain an original copy which means you should be signing two of them each of which is notarized separately.

Those affidavits should include any information regarding subsequent correspondence, telephone calls or instructions from the same or different representative of the alleged sub servicer or creditor. And it should include any events in which the  sub servicer claim to have lost your submission of documents that were requested. As a practice hand, it is my opinion that no such submission should be made without a specific offer from the homeowner certified by a real estate professional.

This can subsequently be used as corroboration of the allegation that sub servicer neither considered the modification request or the modification proposal.  In addition it will fortify the allegation that the creditor was never informed of the offer and that therefore the sub servicer or representative is in violation of the laws of the nation and potentially of the state in which the property is located.

The Wall Street banks have created the illusion that they don’t want to foreclose but they have no other choice. In fact they have engaged in a pattern of conduct that made foreclosure an inevitable conclusion. Most people believe that the banks don’t want the property and therefore they would not foreclose if there was a real opportunity to settle or modified below with the assistance of the federal government under HAMP and HARP. Of course when you are dealing with Wall Street strategies the situation is  always more complex than the simplistic arguments used by attorneys seeking foreclosure or defending claims from borrowers.

It is hard to argue that the banks don’t want property when they have walked away from hundreds of thousands of homes that were emptied as a result of the wrongful foreclosure and eviction of the homeowner. In places like Cleveland and Detroit tens of thousands of homes were literally bulldozed because entire neighborhoods lost all of their residents and the homes became headquarters for drug deals and other illicit activities.

The simple truth is that the banks are not nearly as interested in the property as they are in the foreclosure. It is the foreclosure sale that creates the illusion of a stamp of approval from the state government that the entire securitization scheme was valid and it creates the reality of a presumption of the validity of the deed issued at the so-called auction of the property upon submission of  false credit bid from a non-creditor who is a stranger (not in privity) to the transaction alleged.

Their motivation is also quite simple, to wit: they have already received insurance proceeds and the proceeds of credit default swaps far in excess of the principal supposedly due on the note. If the loan were converted from “nonperforming” to “performing” it is highly likely that the Wall Street banks and their affiliates would be responsible for refunding the insurance money and proceeds of credit default swaps, all of which frequently amounted to multiples as high as 42 times the amount of the note.

The Dodd-Frank Law  makes it illegal for any servicer or representative of a creditor to engage in the consideration of a modification or settlement regarding the loan and at the same time pursue foreclosure. But even without that law, the doctrine of promissory estoppel accomplishes the same result.

I would point out that the reason that provision was made part of the Dodd-Frank  law was that there was no dispute as to the fact that servicers were encouraging people to stop making payments if they wanted to see an approval on a modification of their loan, a short sale of the property, or any type of settlement whatsoever.

The doctrine of promissory estoppel can be used both offensively in the nonjudicial states and defensively in the judicial states. It is important for a lawyer who is licensed in the jurisdiction in which the property is located to do the research on the statutes and case law dealing with promissory estoppel. The state and federal system do have differences.

In general, the elements of promissory estoppel consists of a promise or representation from one party that leads another party to reasonably rely on that promise or representation and act to their own detriment.  Generally it is not important that the benefits of the statement or action by the first party result in a benefit to that party. It is generally understood that the detriment to the homeowner as a result of the promise or representation may be all that is required in order to establish promissory estoppel, which of course must be properly alleged in a lawsuit or affirmative defenses depending upon whether the case is in a nonjudicial jurisdiction or a judicial jurisdiction.

There is no legal or business reason to tell a homeowner to stop paying if they want their loan modified, or if they want their property approved for short sale, or they want to settle with the creditor or creditors, the identity of which is closely guarded by the Wall Street banks and all of the parties in the securitization chain that turns out to be more of a paper chain of sham transactions than anything else.

The reason why homeowners are being told to stop making payments and why they are given trial modifications that are subsequently denied status as permanent modification is that the goal is foreclosure in order to keep the illicit proceeds of insurance and credit default swaps. As soon as the homeowners are told to stop making payments, and subsequent payments are often returned, the securitization parties are slowly edging the borrower into a position where it is impossible for them to make up the payments and therefore inevitable that the foreclosure will proceed. And the reason why becomes impossible for them to make up the payments is that they are told  that the back payments at worst will be added to the end of the loan. They are told this to make sure that the borrower spends the money and no longer has the money to bring the loan current.  It is a perfect storm for the Wall Street banks.

If the borrower is taken the trouble to send a qualified written request or a debt validation letter and will fortify the claim because the sub servicer or other representative will have failed to  provide proof of payment or funding for the acquisition or the origination of the loan and will have failed to provide proof of authority to represent the creditor and further failed to identify the creditor so that the authority to represent could be confirmed.

Sitting on the desk of the governor of the state of Florida is a crazy bill that would make it impossible for most homeowners to defend wrongful foreclosures. If he signs the bill into law the banks will be cheering, but not for long. Using the doctrine of estoppel the foreclosure will be stopped dead in most cases assuming the homeowner was in fact instructed to  cease making  payments and was promised that if they follow the rules their request for modification would be considered —  which is something which is required under existing federal law dating back to the time of TARP.

If the homeowner takes the position in litigation that all payments that were due were in fact paid, and that in fact the homeowner believes he has overpaid, a question of fact emerges that probably cannot be handled in the summary proceedings under what might be the new Florida law and similar laws passed in other jurisdictions.  If the homeowner also takes the position that he is neither in privity with nor does he owe any money to either the party bringing the foreclosure proceedings, this raises additional questions of fact that must be dealt with under the rules of evidence in a properly noticed hearing.

PRACTICE NOTE: Procedurally I have come to the opinion that in order to take control of the narrative away from parties who are essentially strangers to the transaction, lawyers should issue subpoenas rather than notices under the Rules of Civil Procedure. Those subpoenas should go out immediately upon receipt of any notice of foreclosure or any lawsuit seeking foreclosure. The subpoenas should ask for a competent witness to testify at deposition and require the witness produce proof of payment or consideration in the acquisition or origination of the loan. The subpoena should specify the type of information you are seeking, to wit: a canceled check, wire transfer receipt, and ACH confirmation, or check 21 confirmation. The failure of the opposing party to respond even if they file timely objections are motions to quash will raise issues as to the amount of any payment alleged to have been missed in the amount of any principal alleged to be unpaid. If I am right, the Florida law may well turn out to be a landmine for the banks from which they cannot recover.

Don’t Take Advice from Banks! It’s All Scripted to Get You in Foreclosure and then Default

INVESTMENT OPPORTUNITY: Why Do Banks Walk Away When Proof is Required?

FOR QUALIFIED INVESTORS ONLY:

HEDGE FUND TO

CALL THE BLUFF OF PRETENDER LENDERS

LISTEN TO NEIL GARFIELD INTERVIEW ON PIGGYBANK

http://piggybankblog.com/2010/09/09/donations/

see http://livinglies.wordpress.com/2013/04/29/hawaii-federal-district-court-applies-rules-of-evidence-bonymellon-us-bank-jp-morgan-chase-failed-to-prove-sale-of-note/

If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-296-1960. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

SEE ALSO: http://WWW.LIVINGLIES-STORE.COM

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

THEY DON’T HAVE THE PROOF, THEY DON’T OWN THE LOAN, THEY DON’T HAVE A PENNY INVESTED IN THE ORIGINATION OR ACQUISITION OF THE LOAN — SO WHY DO WE LET THEM COLLECT, FORECLOSE OR SUE?

Editor’s Analysis: If you loaned money to someone and you lost the note or correspondence reflecting the terms of the loan would you forget about getting the loan repaid? Of course not. You would sue anyway and proves that you either directly loaned the money to them or that you paid real money to acquire the debt. You would get a judgment and you would record that judgment in the county records as a lien against any real property in the name of the borrower.

In the states that have passed laws and regulations regarding the collection of debt and the foreclosure of mortgages requiring the party seeking to collect on the debt or foreclose on a mortgage to show that they in fact own the debt and requiring the attorney to verify the debt, note, mortgage, and default, foreclosure activity and collection activity has dropped like a stone. This corroborates the basic premise of this blog.  Despite all efforts to create the appearance to the contrary, there is no debt, note, mortgage or default —  at least in terms of seeking collection and foreclosure.

The apparent presence of money arriving at the loan closing is a red herring that has thrown off the borrowers, their attorneys, and the courts. But the money never came from anyone with whom the borrower was led to believe to be the source of funding of the loan. Therein lies the problem for the Wall Street banks. If you follow the money trail it simply does not and cannot match up with the paper trail. That is why we have consistently told attorneys to hit hard and hit fast with subpoenas directed at producing competent witnesses and real proof that the loan was funded or acquired by anyone in what we now know is a false securitization chain.

As a trial lawyer with decades of experience I can tell you with great assurance that most cases are decided on the basis of who controls the narrative. It is through that lens that all of the so-called facts are perceived by the court. If you failed to object or moved to dismiss pleadings that omit any allegations or attachments showing financial injury to the party initiating collection or foreclosure proceedings, then you are allowing the narrative to slip away from you. The pretender lenders will fill the void you have created with proffers of facts and conclusions that are unsupported by anything in the record.

Analyzing the foreclosure activity on a national basis clearly shows that those states which require the actual proof and verification by the attorney have eliminated the logjam in the courts because there are no claims. There is only one satisfactory explanation for this phenomenon. If the claimants had anything resembling a canceled check, a wire transfer receipt, an ACH confirmation, or a check 21 confirmation, the change in the laws and regulations of those states requiring proof of payment and proof of loss (which are the elements of proof of ownership) would have produced no result in terms of the number of foreclosures filed or the number of servicers claiming to have the authority to collect monthly payments.

Therefore the only logical conclusion is that they do not have anything resembling proof of payment, proof of loss or proof of ownership. This leaves them in the naked possession of attempting to collect or foreclose on a nonexistent or unenforceable debt, note, mortgage or default.  it looks like criminal fraud and civil fraud to me.

 As for collection, the servicers are clearly relying upon the paper trail in the so-called securitization chain.  If the debt cannot be established through proof of payment and proof of risk of loss than the paper trail in the securitization chain is  a sham.  If the debt is not established there is no payment due.  if the debt is not established and there is no payment due, the claim of status as a sub servicer or Master servicer is without merit.  For these reasons  it is incumbent upon the attorney for the borrower to submit a challenge either in court or in accordance with federal law governing collections,  mortgages and foreclosures.

HEDGE FUND TO CALL THE BLUFF OF PRETENDER LENDERS

This is why I have suggested the business plan wherein investors produce hard money offering same to the court registry in bankruptcy or civil litigation. The investor(s) would offer to refinance the entire mortgage balance if the claimant can prove title to the loan — which means that the claimant, starting with origination of the loan would be required to show proof of payment all the way through the assignment or “securitization chain” in order to determine which party should be paid off and which party therefore could execute a release or satisfaction of the loan and mortgage. It’s no bluff on the part of the investor or the homeowner who jointly present the offer to pay off the debt in full. It is calling the bluff of the pretender lender.

If the claimant is able to do so, then they get every penny demanded. If they are not able to produce such elemental proof, the case is still over because they have admitted lack of standing, lack of subject matter jurisdiction, and lack of a qualified party to submit a credit bid at auction. In that case, the homeowner’s agreement with the investor is to execute a note and mortgage in an amount not exceeding 50% of fair market value of the real property at a fixed rate with 30 year amortization.

The return on investment is nearly infinite. GTC|Honors, a trade name of General Transfer Corporation owning this blog, will provide the legal work and packaging of the loans for resale into the secondary market. Since no more than $3 million is required to start this project space is limited to only qualified investors. This is not a formal offering but merely a solicitation of those who may want to receive a prospectus which they can review and decide whether or not to invest. The name of the Hedge Fund will be revealed only to those who request the prospectus and those who demonstrate in advance that they are qualified investors. Management will be by and through GTC|Honors (“Workouts with Honor”) which will receive a fee of 20% of the net profits after payment of all legal, accounting and other professional fees, costs and expenses. By way of full disclosure, the law firm of Garfield Gwaltney, Kelley and White will be getting part of the legal fees.

Proceeds of investment will be used strictly for formation and operation of the Hedge fund, and shall not be used for any salaries paid to management directly or indirectly. Management includes Neil F Garfield, and such other persons designated by him to share in management responsibilities. Do not send money without first receiving the prospectus and consulting with an attorney, accountant or other professional trusted adviser.

California Homeowner Bill of Rights blocks BofA foreclosure
http://www.housingwire.com/news/2013/05/08/california-homeowner-bill-rights-blocks-bofa-foreclosure

Nevada maintains familiar perch atop foreclosure rankings
http://www.vegasinc.com/news/2013/may/08/nevada-maintains-familiar-perch-atop-foreclosure-r/

Mass. AG Coakley unveils anti-foreclosure program
http://bostonherald.com/business/real_estate/2013/05/mass_ag_coakley_unveils_anti_foreclosure_program

Massachusetts foreclosure filings drop 82% in March
http://www.housingwire.com/news/2013/05/13/massachusetts-foreclosure-filings-drop-82-march

Drastic Drop in Mass. Foreclosure Activity in March
http://rismedia.com/2013-05-13/drastic-drop-in-mass-foreclosure-activity-in-march/

Fla. foreclosures up as lenders speed up process
http://www.floridarealtors.org/NewsAndEvents/article.cfm?id=291115

The Constitutionality of Colorado Foreclosure Law: US Bank Walks Away from Foreclosure on Aurora Woman
http://4closurefraud.org/2013/05/12/the-constitutionality-of-colorado-foreclosure-law-us-bank-walks-away-from-foreclosure-on-aurora-woman/

Aurora foreclosure halted; constitutionality issue unresolved
http://www.denverpost.com/breakingnews/ci_23242542/foreclosure-halted-constitutionality-issue-unresolved

Mortgages are investment du jour for hedge funds – The Term Sheet: Fortune’s deals blogTerm Sheet
http://finance.fortune.cnn.com/2013/05/13/mortgages-salt-hedge-funds/

14 American Housing Markets Struggling With Foreclosures
http://www.businessinsider.com/us-cities-with-most-foreclosures-2013-5

What Obama Still Has Wrong and Why the Recession Will Drag On for years

It is encouraging that Obama is the police trying to get the housing and foreclosure situation resolved. But he is starting from a premise that is faulty just as Florida and other states are passing legislation from a similar premise, to wit: that the blame for title corruption, litigation and the court that is clogging the system, and the housing market, together with the bogus mortgage bonds that were issued by nonexistent unfunded special purpose vehicles (“trusts”) is somehow the fault of borrowers.

In his weekly Saturday address, Obama made reference to reckless behavior without specifying that the reckless behavior was that of the banks.  The pervasive and insidious assumption is that 30 million borrowers woke up one morning and decided to enter into a conspiracy that would destroy the countries economy and financial system.  If anything is obvious it is that only the Wall Street banks had the capacity and sophistication as well as the motive and opportunity to ruin the lives of millions of people, corrupt a title system that had been working perfectly for centuries, and control the governmental response using the influence they had acquired through lobbyists and direct financial contributions.

The reason that is so important is not just that the bankers probably belong in jail just like they ended up going to prison in the savings-and-loan crisis of the 1980s;  the real reason it is important to start with the premise that the banks on Wall Street created a fraudulent Ponzi scheme that has not yet been addressed. Neither the economy nor the corrupted title system in our country can enjoy any serious correction without at least considering the idea that the entire bogus plan  of false securitization was premeditated and clearly intentional.

This is not to say that there was no fraud on the part of any of the borrowers. But it is quite obvious from news reports that any prosecutions for mortgage fraud have been directed at borrowers who merely used the same techniques, procedures, tactics and fabricated documents that the banks used when they caused the loans to be originated and caused the worthless paper from the “loan closing” to be assigned, sold, insured and hedged as though the loans were the property of the Wall Street banks who in fact had merely used the deposits of unsuspecting investors. Even a appraisal fraud is being prosecuted against small individual investors who merely followed the directions of the thinly capitalized” originator” and mortgage broker. The reason those loans went through was not because of the fraudulent intent of the actors who were prosecuted but because of the fraudulent intent of the Wall Street banks and their affiliates whose business plan called for the origination of loans in unsustainable amounts and the diversion  of the documents that were supposed to protect the investors whose money was used for the origination or acquisition of loans.

If the securitization of debt had been real, there would’ve been no need for MERS, or  any private system that was used in reality to track transactions that were a complete sham. The Wall Street banks made sure that they used the money of third parties and created “paper closings” in favor of entities, “originators”, and even banks who pretended to underwrite the loans but who never had any risk of loss and in fact in most cases never showed any bookkeeping or accounting entries reflecting the creation of a loan receivable. The amount of “money” in the shadow banking system of insurance, collateralized debt obligations, credit default swaps and other exotic instruments is now said to exceed one quadrillion dollars. It is universally accepted, and I agree, that this amount is geometrically larger than any real money in the system, with estimates of real value varying from $25 trillion-$70 trillion.

My point here is simply that the Wall Street banks entered into a relationship with investors wherein the investors were principles of the Wall Street banks were agents. Regardless of how many layers the Wall Street banks used in terms of the use of subsidiaries and affiliates, their actions were subject to the expectations of the investors and the written promises to those investors, all of which were breached nearly all of the time by the Wall Street banks. Hence their trading in the defect of loans and unenforceable paper created at the “paper closings” produced a volume of “trading profits” which were in reality the proceeds of transactions that should have been used to reimburse the investors.

Once you accept the notion that the above scenario is true, the legal question of whether or not a monthly payment is due or in fact whether any payment is due from the borrower becomes the front and Center question in all action seeking to collect or foreclose on consumer debt including but not limited to alleged “mortgages”.

PRACTICE note:  this is why you want to issue a subpoena or other discovery device that forces the party seeking foreclosure or collection to produce a live witness and documents that shows that there is an actual risk of loss by virtue of an actual transaction on a specific date for a specific amount of money which was paid by the party seeking foreclosure to another party who actually on the loan by virtue of another actual transaction on another specific date for a specific amount of money that was paid by check, wire transfer, ACH, or check 21. All the information that I have indicates that none of those transactions actually occurred, no money ever exchanged hands, and that the assignments and endorsements reflect transactions that were a sham —  including but not limited to the so-called “origination” or assignment or any other form of acquisition of the loan.  This is important not only on the issue of standing and subject matter jurisdiction in which there is no injured party, but on the issue of identifying a party who could conceivably submit a credit bid at the time of the auction of the foreclosed property. In judicial states the final judgment of foreclosure identifies the amount of the judgment awarded without there having been any actual  trial or hearing in which evidence is heard on the actual payment, proof of loss, and the dates and amounts in which money  exchanged hands.  this entitles the foreclosing party to submit a credit bid when in fact they never had paid any money toward the origination or acquisition of the loan. Thus it is important to bring the issue up very early by way of subpoena to show that the party seeking foreclosure lacks standing, and has filed an action for which there is no substantive jurisdiction, nor any remedy without  a financial injury.

Weekly Address: Growing the Housing Market and Supporting our Homeowners
http://www.whitehouse.gov/blog/2013/05/11/weekly-address-growing-housing-market-and-supporting-our-homeowners

Hawaii Federal District Court Applies Rules of Evidence: BONY/Mellon, US Bank, JP Morgan Chase Failed to Prove Sale of Note

This quiet title claim against U.S. Bank and BONY (collectively, “Defendants”) is based on the assertion that Defendants have no interest in the Plaintiffs’ mortgage loan, yet have nonetheless sought to foreclose on the subject property.

Currently before the court is Defendants’ Motion for Summary Judgment, arguing that Plaintiffs’ quiet title claim fails because there is no genuine issue of material fact that Plaintiffs’ loan was sold into a public security managed by BONY, and Plaintiffs cannot tender the loan proceeds. Based on the following, the court finds that because Defendants have not established that the mortgage loans were sold into a public security involving Defendants, the court DENIES Defendants’ Motion for Summary Judgment.

Editor’s Note: We will be commenting on this case for the rest of the week in addition to bringing you other news. Suffice it to say that the Court corroborates the essential premises of this blog, to wit:

1. Quiet title claims should not be dismissed. They should be heard and decided based upon the facts admitted into evidence.
2. Presumptions are not to be used in lieu of evidence where the opposing party has denied the underlying facts and the conclusion expressed in the presumption. In other words, a presumption cannot be used to lead to a result that is contrary to the facts.
3. Being a “holder” is a a conclusion of law created by certain presumptions. It is not a plain statement of ultimate facts. If a party wishes to assert holder or holder in due course status they must plead and prove the facts supporting that legal conclusion.
4. A sale of the note does not occur without proof under simple contract doctrine. There must be an offer, acceptance and consideration. Without the consideration there is no sale and any presumption arising out of the allegation that a party is a holder or that the loan was sold fails on its face.
5. Self serving letters announcing authority to represent investors are insufficient in establishing a foundation for testimony or other proof that the actor was indeed authorized. A competent witness must provide the factual testimony to provide a foundation for introduction of a binding legal document showing authority and even then the opposing party may challenge the execution or creation of such instruments.
6. [Tactical conclusion: opposing motion for summary judgment should be filed with an affidavit alleging the necessary facts when the pretender lender files its motion for summary judgment. If the pretender's affidavit is struck down and/or their motion for summary judgment is denied, they have probably created a procedural void where the Judge has no choice but to grant summary judgment to homeowner.]
7. “When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587.” See case below
8. “a plaintiff asserting a quiet title claim must establish his superior title by showing the strength of his title as opposed to merely attacking the title of the defendant.” {Tactical: by admitting the note, mortgage. debt and default, and then attacking the title chain of the foreclosing party you have NOT established the elements for quiet title. THAT is why we have been pounding on the strategy that makes sense: DENY and DISCOVER: Lawyers take note. Just because you think you know what is going on doesn’t mean you do. Advice given under the presumption that the debt is genuine when that is in fact a mistake of the homeowner which you are compounding with your advice. Why assume the debt, note , mortgage and default are genuine when you really don’t know? Why would you admit that?}
9. It is both wise and necessary to deny the debt, note, mortgage, and default as to the party attempting to foreclose. Don’t try to prove your case in your pleading. Each additional “explanatory” allegation paints you into a corner. Pleading requires a short plain statement of ultimate facts upon which relief could be legally granted.
10. A denial of signature on a document that is indisputably signed will be considered frivolous. [However an allegation that the document is not an original and/or that the signature was procured by fraud or mistake is not frivolous. Coupled with allegation that the named lender did not loan the money at all and that in fact the homeowner never received any money from the lender named on the note, you establish that the deal was sign the note and we'll give you money. You signed the note, but they didn't give you the money. Therefore those documents may not be used against you. ]

MELVIN KEAKAKU AMINA and DONNA MAE AMINA, Husband and Wife, Plaintiffs,
v.
THE BANK OF NEW YORK MELLON, FKA THE BANK OF NEW YORK; U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE ACQUISITION TRUST 2006-WMC2, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-WMC2 Defendants.
Civil No. 11-00714 JMS/BMK.

United States District Court, D. Hawaii.
ORDER DENYING DEFENDANTS THE BANK OF NEW YORK MELLON, FKA THE BANK OF NEW YORK AND U.S. BANK NATIONAL ASSOCIATION, AS TRUSTEE FOR J.P. MORGAN MORTGAGE ACQUISITION TRUST 2006-WMC2, ASSET BACKED PASS-THROUGH CERTIFICATES, SERIES 2006-WMC2′S MOTION FOR SUMMARY JUDGMENT
J. MICHAEL SEABRIGHT, District Judge.
I. INTRODUCTION

This is Plaintiffs Melvin Keakaku Amina and Donna Mae Amina’s (“Plaintiffs”) second action filed in this court concerning a mortgage transaction and alleged subsequent threatened foreclosure of real property located at 2304 Metcalf Street #2, Honolulu, Hawaii 96822 (the “subject property”). Late in Plaintiffs’ first action, Amina et al. v. WMC Mortgage Corp. et al., Civ. No. 10-00165 JMS-KSC (“Plaintiffs’ First Action”), Plaintiffs sought to substitute The Bank of New York Mellon, FKA the Bank of New York (“BONY”) on the basis that one of the defendants’ counsel asserted that BONY owned the mortgage loans. After the court denied Plaintiffs’ motion to substitute, Plaintiffs brought this action alleging a single claim to quiet title against BONY. Plaintiffs have since filed a Verified Second Amended Complaint (“SAC”), adding as a Defendant U.S. Bank National Association, as Trustee for J.P. Morgan Mortgage Acquisition Trust 2006-WMC2, Asset Backed Pass-through Certificates, Series 2006-WMC2 (“U.S. Bank”). This quiet title claim against U.S. Bank and BONY (collectively, “Defendants”) is based on the assertion that Defendants have no interest in the Plaintiffs’ mortgage loan, yet have nonetheless sought to foreclose on the subject property.

Currently before the court is Defendants’ Motion for Summary Judgment, arguing that Plaintiffs’ quiet title claim fails because there is no genuine issue of material fact that Plaintiffs’ loan was sold into a public security managed by BONY, and Plaintiffs cannot tender the loan proceeds. Based on the following, the court finds that because Defendants have not established that the mortgage loans were sold into a public security involving Defendants, the court DENIES Defendants’ Motion for Summary Judgment.

II. BACKGROUND

A. Factual Background
Plaintiffs own the subject property. See Doc. No. 60, SAC ¶ 17. On February 24, 2006, Plaintiffs obtained two mortgage loans from WMC Mortgage Corp. (“WMC”) — one for $880,000, and another for $220,000, both secured by the subject property.See Doc. Nos. 68-6-68-8, Defs.’ Exs. E-G.^[1]

In Plaintiffs’ First Action, it was undisputed that WMC no longer held the mortgage loans. Defendants assert that the mortgage loans were sold into a public security managed by BONY, and that Chase is the servicer of the loan and is authorized by the security to handle any concerns on BONY’s behalf. See Doc. No. 68, Defs.’ Concise Statement of Facts (“CSF”) ¶ 7. Defendants further assert that the Pooling and Service Agreement (“PSA”) dated June 1, 2006 (of which Plaintiffs’ mortgage loan is allegedly a part) grants Chase the authority to institute foreclosure proceedings. Id. ¶ 8.

In a February 3, 2010 letter, Chase informed Plaintiffs that they are in default on their mortgage and that failure to cure default will result in Chase commencing foreclosure proceedings. Doc. No. 68-13, Defs.’ Ex. L. Plaintiffs also received a March 2, 2011 letter from Chase stating that the mortgage loan “was sold to a public security managed by [BONY] and may include a number of investors. As the servicer of your loan, Chase is authorized by the security to handle any related concerns on their behalf.” Doc. No. 68-11, Defs.’ Ex. J.

On October 19, 2012, Derek Wong of RCO Hawaii, L.L.L.C., attorney for U.S. Bank, submitted a proof of claim in case number 12-00079 in the U.S. Bankruptcy Court, District of Hawaii, involving Melvin Amina. Doc. No. 68-14, Defs.’ Ex. M.

Plaintiffs stopped making payments on the mortgage loans in late 2008 or 2009, have not paid off the loans, and cannot tender all of the amounts due under the mortgage loans. See Doc. No. 68-5, Defs.’ Ex. D at 48, 49, 55-60; Doc. No. 68-6, Defs.’ Ex. E at 29-32.

>B. Procedural Background
>Plaintiffs filed this action against BONY on November 28, 2011, filed their First Amended Complaint on June 5, 2012, and filed their SAC adding U.S. Bank as a Defendant on October 19, 2012.

On December 13, 2012, Defendants filed their Motion for Summary Judgment. Plaintiffs filed an Opposition on February 28, 2013, and Defendants filed a Reply on March 4, 2013. A hearing was held on March 4, 2013.
At the March 4, 2013 hearing, the court raised the fact that Defendants failed to present any evidence establishing ownership of the mortgage loan. Upon Defendants’ request, the court granted Defendants additional time to file a supplemental brief.^[2] On April 1, 2013, Defendants filed their supplemental brief, stating that they were unable to gather evidence establishing ownership of the mortgage loan within the time allotted. Doc. No. 93.

III. STANDARD OF REVIEW

Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The burden initially lies with the moving party to show that there is no genuine issue of material fact. See Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323). If the moving party carries its burden, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forwards with specific facts showing that there is a genuine issue for trial.“ Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586-87 (1986) (citation and internal quotation signals omitted).

An issue is `genuine’ only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party, and a dispute is `material’ only if it could affect the outcome of the suit under the governing law.” In re Barboza,545 F.3d 702, 707 (9th Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587.

IV. DISCUSSION

As the court previously explained in its August 9, 2012 Order Denying BONY’s Motion to Dismiss Verified Amended Complaint, see Amina v. Bank of New York Mellon,2012 WL 3283513 (D. Haw. Aug. 9, 2012), a plaintiff asserting a quiet title claim must establish his superior title by showing the strength of his title as opposed to merely attacking the title of the defendant. This axiom applies in the numerous cases in which this court has dismissed quiet title claims that are based on allegations that a mortgagee cannot foreclose where it has not established that it holds the note, or because securitization of the mortgage loan was defective. In such cases, this court has held that to maintain a quiet title claim against a mortgagee, a borrower must establish his superior title by alleging an ability to tender the loan proceeds.^[3]

This action differs from these other quiet title actions brought by mortgagors seeking to stave off foreclosure by the mortgagee. As alleged in Plaintiffs’ pleadings, this is not a case where Plaintiffs assert that Defendants’ mortgagee status is invalid (for example, because the mortgage loan was securitized, Defendants do not hold the note, or MERS lacked authority to assign the mortgage loans). See id. at *5. Rather, Plaintiffs assert that Defendants are not mortgagees whatsoever and that there is no record evidence of any assignment of the mortgage loan to Defendants.^[4] See Doc. No. 58, SAC ¶¶ 1-4, 6, 13-1 — 13-3.

In support of their Motion for Summary Judgment, Defendants assert that Plaintiffs’ mortgage loan was sold into a public security which is managed by BONY and which U.S. Bank is the trustee. To establish this fact, Defendants cite to the March 2, 2011 letter from Chase to Plaintiffs asserting that “[y]our loan was sold to a public security managed by The Bank of New York and may include a number of investors. As the servicer of your loan, Chase is authorized to handle any related concerns on their behalf.” See Doc. No. 68-11, Defs.’ Ex. J. Defendants also present the PSA naming U.S. Bank as trustee. See Doc. No. 68-12, Defs.’ Ex. J. Contrary to Defendants’ argument, the letter does not establish that Plaintiffs’ mortgage loan was sold into a public security, much less a public security managed by BONY and for which U.S. Bank is the trustee. Nor does the PSA establish that it governs Plaintiffs’ mortgage loans. As a result, Defendants have failed to carry their initial burden on summary judgment of showing that there is no genuine issue of material fact that Defendants may foreclose on the subject property. Indeed, Defendants admit as much in their Supplemental Brief — they concede that they were unable to present evidence that Defendants have an interest in the mortgage loans by the supplemental briefing deadline. See Doc. No. 93.

Defendants also argue that Plaintiffs’ claim fails as to BONY because BONY never claimed an interest in the subject property on its own behalf. Rather, the March 2, 2011 letter provides that BONY is only managing the security. See Doc. No. 67-1, Defs.’ Mot. at 21. At this time, the court rejects this argument — the March 2, 2011 letter does not identify who owns the public security into which the mortgage loan was allegedly sold, and BONY is the only entity identified as responsible for the public security. As a result, Plaintiffs’ quiet title claim against BONY is not unsubstantiated.

V. CONCLUSION

Based on the above, the court DENIES Defendants’ Motion for Summary Judgment.

IT IS SO ORDERED.

[1] In their Opposition, Plaintiffs object to Defendants’ exhibits on the basis that the sponsoring declarant lacks and/or fails to establish the basis of personal knowledge of the exhibits. See Doc. No. 80, Pls.’ Opp’n at 3-4. Because Defendants have failed to carry their burden on summary judgment regardless of the admissibility of their exhibits, the court need not resolve these objections.

Plaintiffs also apparently dispute whether they signed the mortgage loans. See Doc. No. 80, Pls.’ Opp’n at 7-8. This objection appears to be wholly frivolous — Plaintiffs have previously admitted that they took out the mortgage loans. The court need not, however, engage Plaintiffs’ new assertions to determine the Motion for Summary Judgment.

[2] On March 22, 2013, Plaintiffs filed an “Objection to [87] Order Allowing Defendants to File Supplemental Brief for their Motion for Summary Judgment.” Doc. No. 90. In light of Defendants’ Supplemental Brief stating that they were unable to provide evidence at this time and this Order, the court DEEMS MOOT this Objection.

[3] See, e.g., Fed Nat’l Mortg. Ass’n v. Kamakau, 2012 WL 622169, at *9 (D. Haw. Feb. 23, 2012);Lindsey v. Meridias Cap., Inc., 2012 WL 488282, at *9 (D. Haw. Feb. 14, 2012); Menashe v. Bank of N.Y., ___ F. Supp. 2d ___, 2012 WL 397437, at *19 (D. Haw. Feb. 6, 2012); Teaupa v. U.S. Nat’l Bank N.A., 836 F. Supp. 2d 1083, 1103 (D. Haw. 2011); Abubo v. Bank of N.Y. Mellon, 2011 WL 6011787, at *5 (D. Haw. Nov. 30, 2011); Long v. Deutsche Bank Nat’l Tr. Co., 2011 WL 5079586, at *11 (D. Haw. Oct. 24, 2011).

[4] Although the SAC also includes some allegations asserting that the mortgage loan could not be part of the PSA given its closing date, Doc. No. 60, SAC ¶ 13-4, and that MERS could not legally assign the mortgage loans, id. ¶ 13-9, the overall thrust of Plaintiffs’ claims appears to be that Defendants are not the mortgagees (as opposed to that Defendants’ mortgagee status is defective). Indeed, Plaintiffs agreed with the court’s characterization of their claim that they are asserting that Defendants “have no more interest in this mortgage than some guy off the street does.” See Doc. No. 88, Tr. at 9-10. Because Defendants fail to establish a basis for their right to foreclose, the court does not address the viability of Plaintiffs’ claims if and when Defendants establish mortgagee status.

An Allonge is Not an Assignment: Do the research!

by Danielle Kelley, Esq., Senior Partner, Garfield, Gwaltney, Kelley and White:

I moved to dismiss two cases on several grounds – one that the allonge was not “firmly affixed”.  This will become an issue as the banks scramble to file pleadings under HB87 that show they have the Note.  The 1st DCA has now admitted there is a lack of caselaw in Florida on this issue – I’m hoping that one of these Judges (the one in Marianna who has already dismissed twice on one case) will issue an order agreeing.

1.                  The allonge attached to the Complaint does not meet the legal definition of what an allonge is:  a firmly attached document to the Note, when there is no space on the bottom of the Note for endorsements.  “An allonge is a piece of paper annexed to a negotiable instrument or promissory note, on which to write endorsements for which there is no room on the instrument itself. Such must be so firmly affixed thereto as to become a part thereof.” Black’s Law Dictionary 76 (6th ed.1990). Florida’s Uniform Commercial Code does not specifically mention an allonge, but notes that “[f]or the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is part of the instrument.” § 673.2041(1), Fla. Stat. (1995). See Booker vs. Sarasota, 707 So.2d 886 (Fla. 1^st DCA 1998)(footnote 1).  See also Isaac v. Deutsche Bank Nat. Trust Co., 74 So. 3d 495 (Fla. 4th DCA 2011)(“An “allonge” is a piece of paper annexed to a negotiable instrument or promissory note, on which to write endorsements for which there is no room on the instrument itself; such must be so firmly affixed thereto as to become a part thereof.”). 

2.                  There is no Florida case on point which provides guidance as to how an allonge must be physically attached to an instrument in order for it to become “firmly affixed” to same.  Recently the First District Court of Appeal took notice of such in Wells Fargo Bank, N.A. v. Bohatka, 1D11-3356, 2013 WL 1715439 (Fla. 1st DCA 2013), stating that “A body of caselaw has developed, primarily in other states and under the UCC, regarding the validity of an allonge and how it must be “affixed” to a note.⁴”).  In footnote Four to that statement, the First District Court of Appeal wrote:

 “See, e.g., Douglas J. Whaley, Mortgage Foreclosures, Promissory Notes, the Uniform Commercial Code, 39 W. St. U.L.Rev. 313, 318–19 (2012) (noting the “many new cases” that deal with allonges and the meaning of “affixed”). Professor Whaley continues, “It is not enough that there is a separate piece of paper which documents the transfer unless that piece of paper is “affixed” to the note. What does “affixed” mean? The common law required gluing. Would a paper clip do the trick? A staple?” Id. at 319 (footnotes omitted). To our knowledge, no Florida court has explored what type of affixation or annexation of an allonge is legally sufficient, nor has any court addressed the possibility of electronic attachment of allonges. See Patricia Brumfield Fry, James A. Newell, & Michael R. Gordon, Coming To A Screen Near You—“Emortgages”—Starring Good Laws And Prudent Standards—Rated “XML”, 62 Bus. Law. 295, 311 (Nov.2006) (noting that Freddie Mac addressed the possibility “that an electronic allonge be added to all eNotes that contains language addressing both the recourse and transfer warranty issues”).”

 

3.                  Thus, with this issue to date still uncertain, the Court can rely on the plain meaning of the words, “firmly affixed” and the Court may look to decisions of courts in other states for persuasive authority.  To begin, two reasons have been cited for the “firmly affixed” rule:  (1) to prevent fraud; and (2) to preserve a traceable chain of title.  See Adams v. Madison Realty & Development, Inc., 853 F. 2d. 163, 167 (3^rd Cir. 1988).  A draft of the 1951 version of the UCC Article 3 included the comment that “[t]he indorsement must be written on the instrument itself or an allonge, which, as defined in Section___, is a strip of paper so firmly pasted, stapled or otherwise affixed to the instrument as to become part of it.”  ALI, Comments & Notes to Tentative Draft No. 1-Article III 114 (1946), reprinted in 2 Elizabeth Slusser Kelly, Uniform Commercial Code Drafts 311, 424 (1984).  More recently, however, courts have held that “stapling is the modern equivalent of gluing or pasting.”  See Lamson v. Commercial Cred. Corp., 187 Colo. 382 (Colo. 1975).  See also Southwestern Resolution Corp. v. Watson, 964 S.W. 2d 262 (Texas 1997)(holding that an allonge stabled to the back of a promissory note is valid so long as there is no room on the note for endorsement but affixed does not include paperclips.).  Regardless of the exact method of affixation, numerous cases have rejected indorsements made on a separate sheet of paper loosely inserted into a folder with the instrument and not physically attached in any way.  See Town of Freeport v. Ring, 1999 Me. 48 (Maine 1999); Adams v. Madison Realty & Development, Inc., 853 F. 2d 163 (3d Cir. 1988); Big Builders, Inc. v. Israel, 709 A. 2d 74 (D.C. 1988).  

Seminars Corroborate Title Problems and HAMP LItigation

It might seem to many that the industry is blind to title problems caused by false claims of securitization or even real claims based upon securitization. It might also seem that there is nothing about which you can litigate when it comes to HAMP and HARP modifications. The big seminar promoters are offering a gaggle of of short and long seminars on these subjects, indicating that they recognize that litigation and title snarls are getting traction across the country and they admit that the future litigation will include clearing title and litigating over HAMP modifications.

The principal problem that homeowners and their lawyers are missing is that the duty to consider the modification does not require the the acceptance of a homeowner for modification. Some servicers are getting more lenient than others, including, from what I hear, Ocwen. But the litigation that is being filed and which the pretender lenders are losing is on the precise question of whether the actual creditor was given notice of the offer of modification and whether the servicer did anything to apply any formula to the the almost inevitable denial of modification.

What we have started doing at my firm is (a) supplying the required material, return receipt requested, together with (b) a specific offer of modification on which an expert (real estate broker, mortgage broker or other professional in the real estate industry) gives an opinion that is worded something like the auditors do when they complete an audit, to wit:

“Based upon industry standards and conditions, the enclosed offer of modification reflects actual current conditions in the relevant real estate market and provides the creditor with two benefits that are not present in the event of foreclosure. The first is that the question of the perfection of the mortgage lien and enforcement of the lien is completely resolved, thus clearing title and the second, is that the net proceeds from the enclosed proposal for modification results in a far higher benefit to the actual creditor than the proceeds from foreclosure, which is a fraction of the offer. There is no known criteria in the industry under which this proposal would be rejected under normal circumstances unless the parties rejecting the modification had some risk of loss unrelated to the loan itself.”

When the denial comes back, you have a basis for alleging that they are lying to the court, that the modification was never considered, that inappropriate criteria was used to guarantee denial and that the creditor was never notified. The anecdotal reports I am receiving strongly suggests that this strategy is getting a lot of traction and is resulting in very favorable settlements within hours after the Judge enters an order requiring the servicer and pretender lender to show cause why they should not be ordered to provide a evidence of the “consideration” and the reasons why the proposal or request was denied.

The National Business Institute is offering three seminars that will be the subject of the member teleconferences (become a member of this blog now to get into the discussion: Become a member, for discounts, online teleconferences etc.). I strongly recommend that these short seminars be attended and that you even order the recordings as well.

Go to http://www.nbi-sems.com (livinglies is not paid for this endorsement directly or indirectly). I would suggest ordering the following seminars:

1. HAMP litigation: breach of contract and related claims, June 21, 2013 2 p.m. to 3:30 p.m.

2. Resolving complex commercial title defects June 11 2013 11:00 a.m. to 12:30 p.m.

3. Handling short sales and deed in lieu of foreclosure 2 p.m. to 3:30 p.m. July 11 2013

4. The Role of MERS in Mortgage Origination and Foreclosure June 3 2013 1PM-2:30PM

Nardi Deposition Reveals All about JPM-WAMU Slick Transactions

NOTE IF ANYTHING, THIS DEPOSITION PROVES THE NEED FOR AN EXPERT FORENSIC COMPUTER ANALYST TO ASSIST IN DISCOVERY AND PERHAPS EVEN PLEADING. THAT IS WHY MY LAW FIRMS AND OTHERS ARE CREATING ALLIANCES WITH LAWYERS WHO HAVE EXPERIENCE IN BOTH THE PRACTICE OF LAW, LITIGATION AND DETAILED KNOWLEDGE ABOUT WHAT TO LOOK FOR, HOW TO LOOK FOR FACTS LEADING TO THE DISCOVERY OF ADMISSIBLE EVIDENCE IN A COURT OF LAW.

I am going through the Nardi deposition a line by line. I have completed the first 50 pages. If you have a case where JPM is foreclosing even if it is doesn’t involve WAMU, you should read the whole thing. I have the link below. Below the link are my notes and comments on the first 50 pages of the deposition. IN the context of other things we know this is a picture of fraud in the making while at the same time keeping the people who are the boots on the ground actors unaware of the consequences of what they are doing.

http://www.scribd.com/doc/102949976/120509-JPMC-v-Waisome-FL-Lawrence-Nardi-Deposition

Garfield Notes on Nardi deposition JP Morgan Chase, as successor to Washington Mutual v. Waisome, 5th Judicial Circuit, Florida Case NUmber 2009-CA-005717, May 9 2012

1.  No prior banking experience. No education in banking or finance. No academic degree. No direct knowledge as to any of the events, documents, or transactions relating to the subject loan because her scope of employment was to assist in litigation or settlement of contested cases. Worked at Citibank dealing with credit cards and assisted in programming.
2. Worked with PHH on loan originations. Line 21, Page 9, I was the originations or preserve rare. I worked with the borrowers on collecting documents, getting them prepared for eventual closing of their loan, working with underwriting and making sure that the documents they needed to push the loan package forward were provided. Basically kind of the air traffic controller of the loan origination’s part of the business.
3. Line 12 page 10 I was not a supervisor. I had a support staff but they were pooled into groups that basically support in five or 10 other loan officers. So I was supervised. We were in a pool.
4. Worked with Merrill Lynch as a series 7 and series 66 broker.
5. Worked at Washington Mutual starting in September 2007.
6. My duties were to work with deceased borrowers estates at Washington Mutual
7.   line11 page 16 I didn’t have anything to do with loss mitigation. I was focusing on establishing that line of communication verifying that these people have the authority to act on behalf of of the deceased.
8. RECORDS SYSTEMS CHANGE:  line 18  page 16 I was actually going back and kind of redoing some of the filing systems that they had an kind of getting that more modernized. And that probably took me through the first 1 1/2 years or thereabouts.
9. SHELLY TREVIN BECAME MY SUPERVISOR
10. Worked with a guy named Vinnie and a lady named Laura.
11. Assigned different states. i was assigned Florida and some smaller states (line 20 page 24)
12. Line 5 page MSP: mortgage servicing platform. It’s a widely used system. In fact all of the major services I have ever worked for have used it. So Washington Mutual was using it. Chase was also using it so I had the benefit of that. So the training for that for me was kind of redundant.
13. LIne 6 page 27 (question was whether Fidelity LPS developed the software).  I am not an expert on everything at Fidelity. My understanding is that fidelity developed this software and licensed it to individual servicers. So that’s my understanding is that actually they own it. It’s their property. Where releasing it as a servicer.
14 line 3 page 28. IMAGE WEB: I believe it was called image web. Image web Wesley default software for any time you need to look up image documents, whether it be notes, mortgages, origination packages, applications. You know, whatever was deemed worthy of saving where necessary to save for servicing purposes.
15. line 13 page 28  a separate servicing system for the home-equity loans.  I think it was called ACLS.  And they had a customer service collection system called CACS  that was used for home equity collections.  those are example of systems they had that we would have used at Washington Mutual that weren’t used at the majors. The major system used being MSP.
16. LIne 21 Page 28 Outlook email was major server for communication within Chase.
17. Line 23, Page 28, MSP is really the central repository for all information related to a loan so most people work out of that anytime they’re coming in contact with, you know, servicing.
18. everyone has a unique identifying usually three digit code assigned to them and they have to set their own password.
19. I have the ability you know part of my duties were to document the things that I was doing. So yes I have the ability to enter data into certain areas. Not all areas can be manipulated. I could enter notes into the system. I could change stop code so that if I was dealing with alone that was in litigation and it needed to stop certain things like collection activities or foreclosure processing, I could put stops on the system. (line 13 Page 29)
20. Lin  se 9 page 31.   We had different client numbers that were assigned to different sets of loans. The Washington Mutual client was 156. The Chase client was like 465.
21. MAJOR PROJECT INTEGRATING CHASE AND WAMU LOANO PACKAGES: LINE 2 PAGE 33:  my understanding is that they drew resources from all areas of the business. I don’t think there was any one department that was involved in handling that transaction or that project.
22. Line 8 page 33: I don’t know if there was a specific person in charge of it. I can imagine based on my experience in some of the projects that I’ve seen in other places that there is probably a project manager and several business heads of business people that were running it but I wasn’t in charge I wasn’t part of the project specifically so I don’t really know.
23. LIne 6 page 39: CHASE LOANS VERSUS INVESTOR LOANS:    if you are looking for specific investor or owner information you would go into a screen called MAS1. And then there is a sub screen within that called INV1 which would tell you, if there is an investor, who it is. And if it’s Chase owned, it would say Chase owned.
24. line 17 page 40:  I believe that we keep records of these investor codes potentially outside the system. I’ve never accessed an investor list with an MSP, so it’s possible it’s there. I just don’t know.
25: NO NEED TO MEMORIZE THE USER ID: LINE 6 PAGE 41:  it’s not something you necessarily have to memorize because when you login using your password is going to tell you it’s going to memorialize everything. You don’t have to memorize it. I think mine was OY$.
26. IDENTIFICATION OF INVESTOR: line 17  page 41:   I believe there are also three digits for the investor codes. But when you go into MAS1 and INV1 it actually spells out the name of the investor,.    so if it’, for instance, a chase loan, it will say J.P. Morgan Chase. If it’s Bank of America, it will say Bank of America. It will spell out the name and the address of the investor or owner for you right there on the screen. So you don’t have to interpret a code it’s right there.
27. EXISTENCE OF PRIVATE INVESTOR KEPT HIDDEN FROM EMPLOYEES GIVEN THAT 96% OF ALL LOANS WERE SUBJECT TO CLAIMS OF SECURITIZATION. THIS SHOWS HOW THE BANKS TEMPORARILY CLAIMED OWNERSHIP OF THE LOANS FOR PURPOSES OF TRADING, HEDGING AND COLLECTING INSURANCE, FEDERAL BAILOUTS AND PROCEEDS OF CREDIT DEFAULT SWAPS LEAVING THE PRIVATE INVESTORS OUT IN THE COLD AND THEREFORE PREVENTING OR INTERFERING WITH THE PROCESS OF ALLOCATING SUCH PAYMENTS TO THE ACCOUNT RECEIVABLE FO THE INVESTOR AND DECREASING THE ACCOUNT PAYABLE OF THE BORROWER. LINE 11 PAGE 42:  I don’t remember a specific instance where I was dealing with a private investor loan.
28. COLLATERAL FILE SHIPPED OUT WITHIN 15 DAYS OF THE NOTICE OF CHANGE OF SERVICER — BUT HOW DOES SHE KNOW THAT ACTUALLY HAPPENED? AND WHAT DO WE KNOW ABOUT WHAT WAS IN THE COLLATERAL FILE? LINE 2 PAGE 45
29. HANDLING OF FILES AND SHIPPING OF FILES. WHO IS AUTHORIZED. collateral file and credit file: line 8. page 47:  you referenced a collateral file. There is also a credit file. Sometimes you need stuff from the credit file and sometimes you don’t. The collateral file you know sometimes you need it sometimes you don’t. So depending on what you need, there is an electronic request for each one. You send it to the customer service folks. The credit file and there is certain restrictions as to who can actually order it. You have to have certain authorization. You can only send it certain places. You have to either send it to someone if you are sending it to someone within the company they have to have it’s a very short list within the company who can get it. Generally we ship it only to counsel when it needs to go out of custody and services. So you would include your identifier to show you have the authority to order it. You need to identify where it’s going so the firm it’s being shipped to, custody services, will accept that. Basically it’s an email transmission, and that works constantly. So they will go in, pull up the work order, have a person that’s designated to be able to enter the file room, go in and pull the file, and then ship it off to the firm was requesting it. I’m almost 100% certain that they use FedEx almost exclusively for the shipping.
30.  Inside counsel is ANITA Smith or Kendall Forster LINE 3 PAGE 50.
31. NO PERSONAL KNOWLEDGE OF EXISTENCE OF THE PHYSICAL FILES. HEARSAY ON HEARSAY. LINE 10 PG 50. This would seem to indicate that all her testimony about the movement of the physical files is hearsay based upon computer entries by people she doesn’t know, or things she was told by counsel or someone else working for other departments, indicating multiple records custodians.

Robo-Litigation: Attorney Misconduct at Foreclosure Mills

Millions of dollars per month are being paid to foreclosure mills employing young attorneys who are probably not aware of the fact that they are participating in fraud, forgery, perjury, and fabrication. Even those who suspect that there are problems with the cases that they are filing wish to keep their jobs just as their employer will do virtually anything to maintain the relationship with pretender lenders who do not have any stake or risk of loss in loans that were funded by third parties.

Dustin A Zacks  has written an extensive article in the Cleveland state law review that details the various dubious acts by the law firms and the attorneys that they hire. The article challenges courts and the Bar Association to get more involved in discipline of attorneys who are consistently breaching their code of ethics and the disciplinary rules of their Bar Association.

Specifically, the article examines how the foreclosure mills differ in makeup from  traditional large law firms.  The article presents an examination of three policy options to prevent another surge in attorney misconduct: changing ethical rules, improving ethical education, and increasing state bar association funding and authority.

Strategically it is important for those attorneys who challenge the enforceability of the debt, note, mortgage, default, sale or even the right to collect on these  fatally defective documents that are regularly used in litigation against consumers and homeowners. I encourage all practitioners to read the article in its entirety, since it contains numerous clues as to what to expect from the other side as they pursue claims without merit.

“Robo-litigation”
http://www.legalethicsforum.com/blog/2013/05/robo-litigation.html

CBO: principal reduction best for economy

Three cheers for Chris Hayes on MSNBC. In his new show, ALL IN, last night he reported and editorialized on the mistakes of giving banks relief and “screwing” homeowners since 2008. On his show he had Elliot Spitzer who took the administration to task for not doing something before this time. And to top it off DeMarco, the head of the former government sponsored entities (GSE), who has single-handedly blocked principal reduction is being removed and his replacement is an ardent consumer advocate currently a Representative from North Carolina. Things are changing.

The Congressional Budget Office is accepted as a non-partisan agency which has torpedoed both Democratic and Republican proposals on the economy. Upon request from Congress, the CBO studied the mortgage and foreclosure market and concluded that principal reduction should be the keystone of policy for Fannie and Freddie because it is a win-win that will return money to the taxpayers, spur the economy with an fiscal stimulus with a program that costs nothing, increasing GDP and employment. The CBO unequivocably recommended immediate implementation of large-scale reductions in mortgage principal.

The momentum is growing for the reduction of household debt just as this blog, numerous economists and financial experts have been virtually demanding. Iceland has proved the point. We have there a live experiment. Iceland has adopted a policy of continual reduction of household debt. The result was a healthier economy growing at a higher pace than any other country hit by the world- wide recession because consumer wealth, confidence and earnings increased allowing for consumption of goods and services that are in sharp decline in the U.S. and Europe. And the banks in Iceland are healthier and better regulated than at any time before the crash.

It is clearly a win- win situation for all stake holders. All this is providing fuel for the policy of principal reduction in household debt, including mortgages, forcing the banks to eat the difference. Of course Iceland also jailed the bankers who created the conditions that caused the Iceland economy to crash n 2008. Now you wouldn’t know it ever happened — but only if live in Iceland. Policy experts here and the CBO that measures past, present and future effects of economic policies are now moving away from the disastrous European experiment in reduced spending (“austerity”) which kicked the Euro economy when it was already down.

This means that homeowners will fight even harder to stay alive while the new policies go into effect and the right thing is done for consumers and homeowners in particular, that will provide trillions in fiscal stimulus for the economy with little negative impact on the banks who were using other people’s money to fund the mortgages, suffered no loss in mortgage defaults and only reported losses on bogus mortgage bonds backed by mortgage loans, which in turn were guaranteed by Fannie and Freddie 90% of the time. Those GSE entities under a single Federal Agency now guarantee or own more than 90% of all U.S. mortgages.

The remaining correction in describing the mortgages that were supposedly filed on record is that the mortgages were for the most part unenforceable, as is consistently alleged by investor lawsuits against investment banks that created and sold the bogus mortgage bonds AND that the “reduction” is really CORRECTION to adjust for fraudulent appraisals on which homeowners, the government and investors relied.

For the first time the reception of homeowners has changed from deadbeat to the ultimate resource to restore economic growth and who were screwed worse than anyone in the criminal enterprise that Wall Street called “securitization.” There was no securitization. Wall Street banks put the money in their own pockets instead of funding the so-called asset pools, “trusts” and other special purpose vehicles that the investors belied was receiving their money. The paperwork is all a sham from origination, where the “lender” never loaned a penny through assignments that conveyed nothing and were completely unsupported by value or consideration.

CONGRATULATIONS TO THE SOLDIERS IN THIS WAR AGAINST OPPRESSION OF THE AVERAGE CITIZEN.

The Truth: Was the Loan Sold or Not?

see http://livinglies.wordpress.com/2013/04/29/hawaii-federal-district-court-applies-rules-of-evidence-bonymellon-us-bank-jp-morgan-chase-failed-to-prove-sale-of-note/

If you are seeking legal representation or other services call our Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Analysis: Suppose you wanted to foreclose on property for which you never made a loan. Suppose you don’t have a lien and never did. Suppose you wanted to do this on a grand scale. How could you get away with it?

If you start with the premise in the preceding paragraph then the entire foreclosure and mortgage mess comes into focus and makes a lot of sense. Conversely if you start with the premise that all mortgage claims are presumptively valid then nothing makes sense and when you try to fix it you get nowhere. That’s what the Florida legislature is attempting to do with Senate Bill 1666 (appropriately numbered).

If you start with the premise that the mortgage claims are valid then it is quite logical and appropriate to conclude that the attempts by borrowers to escape inevitable consequences of their own bad judgment are clogging the court system and that borrowers are essentially abusing their due process rights costing each state billions of dollars in one form or another. But you have to ask yourself why there has been a sudden meteoric rise in the percentage of cases in which the borrower vigorously defends and brings claims against the supposedly valid holder of the note. What if all your assumptions and presumptions are not valid?

This is the essence of the issue confronting the courts, borrowers and their attorneys. And in a display of extreme irony the Wall Street banks even have the borrowers and their attorneys convinced that the loan was closed and the loan was sold. “The Loan”  refers to the transaction that is memorialized in the loan documents. “The sale” refers to the transaction in which  the loan was sold by the owner of the loan to a buyer of the loan.

There are two key questions:

1. The first (origination) fact pattern is usually the same.  A borrower applies to an entity that advertises itself as a lender and that “lender” agrees to loan the money to the borrower.  A closing agent contacts the borrower  with information concerning the closing of the loan.  The borrower goes to the closing,  the money appears, and the borrower signs a myriad of documents.  Here’s the question:  what if the  “lender” did not loan the money and either played the part of an undisclosed nominee, and unlicensed mortgage broker or licensed mortgage broker, and never had a valid legal claim to collect on the note or enforce the mortgage?
2.  The second (assignment) fact pattern is also usually the same. In cases where there is litigation documents magically appear showing the assignment or endorsement of the loan using a claim of authority or the production of an apparent power of attorney. The assignment or endorsement frequently occurs more than once. There are actually two questions here: (A) assuming the facts in paragraph 1 above are true what difference does it make if there were one or 100 assignments? If there is no valid or perfected lien and the assignor never had a claim to collect on the “loan,” the assignment may give the appearance of propriety but it conveys nothing; (B) If the assignee never paid for the sale of the note how could the assignment transaction be considered complete?  The Uniform Commercial Code governing the creation and sale of negotiable instruments indicates that each transaction must be for value received or consideration.  Is the so-called assignment merely an offer lacking acceptance and payment?

 You can have 100 or 1000 pages of documentation, but without a completed underlying transaction nothing in the documentation will have any legal effect on anyone despite the apparent “weight of the evidence.”

 The point is actually very simple. Don’t get lost in the weeds of the documentation. The first question to be asked at the threshold is whether or not a transaction actually occurred containing the legal elements required for a completed transaction. If there is no consideration there is no transaction. If there is no transaction then there are no rights to enforce by or against anyone.

 The arguments about the holder of the note are frankly silly. In the absence of consideration the party holding the note is merely possessing the note without any rights of collection or enforcement. If it were otherwise then  any Courier, attorney or closing agent would be able to collect on the note and even foreclose on the mortgage leaving the lender out in the cold.

 Whether or not a party is a holder or holder in due course  is a question of law which raises presumptions if the proper foundation is established in order to conclude that a party is a holder or holder in due course. These are all legal conclusions and not factual issues.  In order to establish the legal conclusion of holder or holder in due course the proponent of that legal conclusion must have a prima facie case showing a legal transaction in which ownership of the loan was transferred. Imagine if it were otherwise: accepting the circular logic of the banks, if six people were sitting around a table with a note in the middle the one with the fastest hands would be able to collect on a note and foreclose the mortgage. This is not the law.

 As a tactical note, the practitioner should be relentless in the pursuit of the actual proof of payment (at origination or purported sale of the loan) without which there can be no proof of loss. If there is no proof of loss than there is no creditor. If there is no creditor there can be no credit bid at the time of auction of the property. And since that has occurred on a regular basis in all 50 states it would be fair to say that the sale of the property in foreclosure was never completed and that the homeowners still owns the home —  or is entitled to compensatory damages equal to the value of the home because of breach of contract,  slander of title, fraud etc.  I believe that the claim that is easier to pursue is the one for compensatory and punitive damages plus attorneys fees and costs of the action.

 In discovery what you are looking for is the actual wire transfer receipt, wire transfer instructions, ACH confirmation, cancelled check or Check 21 confirmation,  showing the name of the party who paid and the name of the party who received the payment.  Whether you are in small claims court or federal court the requirement is always the same. Any party seeking affirmative relief from the court must show that they were injured or damaged by the party whom they have sued. If they can’t show the payment and an unbroken chain of payments leading up and including the supposed assignment, then they have no claim because the court lacks jurisdiction and the party lacks standing to enforce or even consider a claim in which there is no injury.

 So the answer to the question posed in the title of this article is no, the loan was never sold. We know that because the investors deposited money with the investment bank and it was the investors’ money that funded the loan. Contrary to popular misconception the money from the investors was never used to fund any pool of assets or trust. It was used directly to fund loans and the various fees to undisclosed third parties contrary to the requirements of the truth in lending act. The investment by the investors into each loan was the only time  money changed hands which in turn means it was the only time that consideration existed.

 That is why you will never find payment from one party to another in the alleged securitization chain.  the truth is that there is no securitization chain and the banks intentionally failed to document the interest of the investors in each mortgage because the banks wanted to assert their own claim to ownership of the loan and the bogus securities allegedly backed by the loan. If they had been honest, then they would have taken the investor money, put it into an account that was owned by the asset pool, fund the loan from the asset pool and then document the transaction showing the interest  of the asset pool at the time of origination of the loan or at the time that the loan was in fact sold to the asset pool for payment received.

And THAT is why I say that the existence of MERS is proof of fraudulent intent. There would have been no need for MERS or anything like it (See Chase Bank and Wells Fargo) if the Banks were not going to trade securities based upon THEIR ownership of a loan they never made.

 If you prove these points in court I believe you will win the case.

SB 1666: Fast Foreclosure Bill Resurrected in Senate After Thought Dead
http://4closurefraud.org/2013/05/01/sb-1666-fast-foreclosure-bill-resurrected-in-senate-after-thought-dead/

WOULD THEY STILL BE TIGHT LIPPED IF THE NEWS WAS GOOD FOR THE BANKS? Regulators to Keep Tight Lips on Foreclosure Improprieties
http://www.truthdig.com/eartotheground/item/regulators_keep_tight_lips_over_foreclosure_improprieties_20130430/

Foreclosure Scams Rampant in Florida
http://www.jdsupra.com/legalnews/foreclosure-scams-rampant-in-florida-21904/

UBS faces calls for break-up at investor meeting
http://www.foxbusiness.com/news/2013/05/02/ubs-faces-calls-for-break-up-at-investor-meeting/

Macro Factors and Their Impact on Monetary Policy, The Economy and Financial Markets
http://www.ritholtz.com/blog/2013/05/macro-factors-and-their-impact-on-monetary-policy-the-economy-and-financial-markets/

Roubini: Fed Risking Sequel to 2008 Financial Crisis
http://www.cnbc.com/id/100698405

Quiet Title Claims Explained

see also http://livinglies.wordpress.com/2013/04/29/hawaii-federal-district-court-applies-rules-of-evidence-bonymellon-us-bank-jp-morgan-chase-failed-to-prove-sale-of-note/

If you are seeking legal representation or other services call our Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.

The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Analysis: If you are thinking that with all the publicity surrounding the obvious fatal defects in the millions of foreclosures already completed, quiet title should be unnecessary, you are probably right. The fact is that the real world is more complicated and as Elizabeth Warren and several dozen bloggers and journalists have pointed out the average of $300 per homeowner being paid to settle the matter is not just inadequate it is stupid. No amount of money will actually cure the current title corruption on record in all 50 states due to practice of allowing complete strangers to the transaction to self-anoint themselves as creditors, foreclose on property and submit a credit bid at auction when they were not owed any money and there was no credit relationship between the homeowner and the bidder.

Quiet Title is an effective tool but it is not a silver bullet. It is about what is contained in the county records. If someone accidentally (or on purpose) records a lien against your property and they refuse to retract it, then you are forced to file an action with the Court that says I own the property and my title is clouded by documents that were recorded as liens against my title.

Those liens are not lawful, and they should be declared null and void or at a minimum the court should issue a declaratory statement based upon facts of the case that sets forth the stakeholders in the property and the nature of their claim.

In order to claim the latter, you would need to state that while the lien is unlawful, the party named on the lien, or the party claiming to hold the right to the lien, refuses to cooperate with clearing title or to explain the nature of their claim. Thus the homeowner is left with a lien which is unlawful and a claimant who insists that it is lawful. The homeowner is in doubt as to his rights and therefore asks the Court to quiet title or declare the rights of the parties.

In filing quiet title claims the mistake most often made is that it is being used defensively instead of offensively. The complaint that fails merely attacks the right of some pretender lender to foreclose. That is not a quiet title action. That is a denial of the debt, note, mortgage, default, notice etc.

And the Courts regularly and correctly dismiss such claims as quiet title claims. You can’t quiet tile because someone does not have a right to foreclose. You can only quiet title if you can assert and prove to the Court that the items on record do not apply to you or  your property and therefore should be removed.

AND you can’t get through a motion to dismiss a declaratory action if you don’t state that you are in doubt and give cogent reasons why you are in doubt. If you state that the other side has no right to do anything and end it there, you are using quiet title defensively rather than offensively in a declaratory action.

Stating that the pretender lender has no right to foreclose is not grounds for a declaratory action either. If you make a short plain statement of FACTS (not conclusions of law) upon which the relief sought could be granted you survive a motion to dismiss. If you only state the conclusions of law, you lose the motion to dismiss.

In such a declaratory action you must state that you have doubts because the pretender lender has taken the position and issued statements, letters or demands indicating they are the owner of the lien but you have evidence from expert analyses from title and securitization experts that they are not the owner of the line and they never were.

Remember in securitized transactions you would need to name the original named payee on the note and the secured party(ies) and state that they never should have recorded the lien because they did not perform as required by the agreement (i.e., they didn’t loan you money) and/or because they received loss mitigation payments in excess of the amount due. If you want to get more elaborate, you can say that they now claim to have nothing to do with the loan and refuse to apply loss mitigation payments to the loan even though they were received.

The problem in Florida is that such claims may be interpreted by the Clerk as claims relating to land and title which requires the ungodly amount of $1900 in filing fees alone, which I personally think is an unconscionable and unconstitutional denial of access to the court to all except people with a lot of money.

So you might want to go with slander of title seeking money damages or failure to refund over-payments received from sale or mitigation payments relating to your loan. That COULD be the basis of a claim in which the property is already sold at auction, short-sale, or resale. If the pretender lender received the payoff or the property illegally and then fraudulently executed a satisfaction of mortgage even though they were never the lender nor the purchaser of the loan, then you, as the owner of the property are probably entitled to that money plus interest and probably attorney fees.

PRACTICE NOTE: Strategically it seems like it is tough going if you attack the title under correct but unpalatable causes of action (i.e. actions that the judicial system already has decided they don’t like the outcome — a free house to the homeowner). So the other way of skinning the cat is to file actions for damages and that I think is the future of mortgage litigation. The basic action is simple breach of contract (the agreement to enter into the loan transaction and/or the note).

Filing suit for damages AFTER the sale gives you playing field without moving goal posts and allows fairly simple straightforward causes of action which many attorneys will soon realize they can take strictly on contingency or mostly on contingency. The net result may well be either the tender of money and/or the tender of the property back to the homeowner or former homeowner in lieu of payment for damages.It also opens the door to the possibility of punitive, treble, or exemplary damages or some combination of those.

At my firm we are looking hard at closings where the pretender lender took the money and ran on a short-sale or resale. It is clear-cut. They either had a right to the money or they didn’t. IF they didn’t have the right to execute the satisfaction of mortgage or if they fraudulently diverted the money to their own benefit in lieu of the creditor from whom they did receive authority, then you still have a right to refund of the money that unjustly enriched the pretender lender.  The money goes to the former owner/seller and to nobody else. If there is a claimant that wishes to step forward to attack the award, then we will deal with it, but based upon my information such claims will not be made.

More News:

Error Claims Cast Doubt on Bank of America Foreclosures in Bay Area
http://www.nbcbayarea.com/investigations/series/mortgage-mess/Error-Claims-Cast-Doubt-on-Bank-of-America-Foreclosures-in-Bay-Area-204764581.html

Number of homes entering foreclosure plunges in California
http://www.latimes.com/business/la-fi-foreclosure-report-20130424,0,6017958.story

Politics: While Wronged Homeowners Got $300 Apiece in Foreclosure Settlement, Consultants Who Helped Protect Banks Got $2 Billion
http://m.rollingstone.com/?seenSplash=1&redirurl=/politics/blogs/taibblog/while-wronged-homeowners-got-300-apiece-in-foreclosure-settlement-consultants-who-helped-protect-banks-got-2-billion-20130426

Minnesota Supreme Court Affirms That Foreclosing Parties Must Record Mortgage Assignments Prior To Initiating Foreclosure By Advertisement
http://www.jdsupra.com/legalnews/minnesota-supreme-court-affirms-that-for-50369/

Presenting: The Housing Bubble 2.0
http://www.zerohedge.com/news/2013-04-29/presenting-housing-bubble-20

 

Housing Will Make or Break US Economy

Az becomes the second state in recent years to adopt gold and silver coin as legal tender. Utah was first. And over the years several successful experiments have occurred wherein a city or county issued its own currency. This should come as no surprise to sophisticated investors. while there is considerable historical support for leaning on gold and other precious metals to protect one’s wealth and liquidity, we should always be cognizant of the fact that precious metals are only precious if they perceived that way.

The U.S. dollar has been propped up using artificial means employed by the Federal Reserve and market makers. There is little doubt that the dollar has been under intense pressure arising out of decades of foolhardy economic policies.

By substituting debt for wages, the appearance of a healthy economy has been maintained. But a quick look at the underlying fundamentals by anyone capable of arithmetic reveals an economy in trouble and a society in turmoil.

This is the result of two factors: (1) we lost our manufacturing base to third world countries and (2) we are in a state of self delusion. We fail to account for many economic events and transactions when we compute our Gross Domestic Product. And the latest trend is to replace real economic activity with trading activity from the financial services industry.

The trigger for what is now seen as the coming devaluation of the dollar has been the essential housing component. The administration and congress, and now state legislatures are setting the stage for a crash that does not have any bottom. In 1983 the financial services industry contributed about 16% of U.S. GDP. This was a fair representation of actual productivity in the country arising out of tangible goods and services created by banks and insurance companies. Now the figure is around 48% of GDP.

The tell-tale sign is that financial service “revenues” and “profits are going up while median come and household wealth has been declining. The extra 32% of GDP does not come from traditional bank intermediation as a payment service, with hedging and other tools to mimicked risk on the purchase of goods and services. It isn’t fees that have increased the apparent increase of the illusion of economic activity from Wall Street and insurance companies. It is proprietary trading profits claimed by the banks and insurance premiums that are artificially inflated by insertion of both banks and insurance companies into economic activity (such as medical care) into commerce that is essentially utility in nature.

The proprietary profits claimed by the banks were predicted here in 2007-2008 and resulted in a projection of a stock market crash and a prediction of the freezing of the credit markets around the world. It was clear then just as it is clear now that Money was being synthesized by the private sector which only means that banks and insurance companies were in essence printing their own money. The dangers of this predicament were apparent and written about by economists whose credentials far exceed my own.

In plain English the banks were stealing money from the marketplace in off balance sheet transactions. And both the banks and insurance companies have been feeding at the public trough for decades. Thus the sole purpose for the existence of investment banks was turned on its head. They were supposed to create active markets in which liquidity (access to capital) was enhanced; instead they surreptitiously siphoned out the liquidity to off-shore accounts and let the markets collapse when investors stopped buying bogus mortgage bonds issued by non-existent trusts. Like any PONZI scheme the entire marketplace collapsed when investor stopped buying the mortgage backed bonds. The correlation is unmistakable and irrefutable.

The insurance companies have been inserting themselves into markets whey contribute no value like medical services and pharmaceutical products.

The end result is that one-third of our entire economy has been eliminated. Taking into account certain productive activities that are not counted (but should be) the real GDP of the U.S. is around $9 trillion but reported at $14 trillion. Using the same logic I pinpointed in 2007, the DOW is actually worth around 8,000, which is where it will go regardless of any remedial policies put in place.

Throughout the world, which is now heavily if not exclusively monetized, obvious steps are being taken to get out of the dollar and into other currencies or assets. The hyper inflation everyone was worried about a few years back was only delayed. And the economic argument of using the dollar as the world’s reserve currency has not been weaker in recent memory.

Accumulation of gold and fixed assets has been responsible in part for propping up our currency. But for our military strength there would be no basis to refer to the U.S. as a world leader. The remedy is obvious — use the reversal of the PONZI scheme to finance new business, expansion of existing business and job training. If that was adopted as policy we would not face an immediate hit to our GDP, equity indexes, and pentup consumer demand together with actual capacity to consume goods and services without plunging into debt would enable us to create fundamental economic activity that would be the envy of the world.

The banking oligarchy currently running our country has a goal that is the anti thesis of the role of government. The oligarchy has profit and wealth accumulation as its goal. The government is required to assure that the referees stay on the playing field and nobody gets an unfair advantage. Just as separation of church and state protects citizens basic rights under natural, constitutional and statutory law, so too should the separation of the banking industry from the government should be well-guarded, lest the power sought by leaders of church, banking and even military and medical services result in the relinquishment of both our freedoms and our prospects.

Arizona Set To Use Gold & Silver As Currency
http://www.zerohedge.com/news/2013-04-22/arizona-set-use-gold-silver-currency