The Goal is Foreclosures and the Public, the Government and the Courts Be Damned

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

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 PROVIDE ACTIVE LITIGATION SUPPORT 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.

Danielle Kelley, Esq. is a partner in the firm of Garfield, Gwaltney, Kelley and White (GGKW) in Tallahassee, Florida 850-765-1236

EDITOR’S NOTE: SOMETIMES IT PAYS TO SHOW YOUR EXASPERATION. Danielle was at a hearing recently where all she wanted was to enforce a permanent modification for which her client had already been approved by Bank of America and BOA was trying to get out of it and pursue foreclosure even though the deal was done and there was no good or valid business reason why they would oppose a modification they already approved — except that they want to lure people into defaults and foreclosure to avoid liability for buy-backs, insurance, and credit default swap proceeds they received.

They need the foreclosure because that is the stamp of approval that the loans were valid and the securitization wasn’t a sham. Without the foreclosure, they stand to lose not only a lot of money in paybacks, but their very existence. Right now they are carrying assets that are fictitious and they are not reporting liabilities that are very real. At the end of the day, the public will see and even government officials whose “Services” have been purchased by the banks will not be able to deny that the nation’s top banks are broke and are neither too big to fail nor too big to jail. When that happens, our economy will start to recover ans the flow of credit and funds resumes and the banks’ stranglehold on government and on our society will end, at least until the next time.

THIS IS WHAT DANIELLE KELLEY WROTE TO ME AFTER THE HEARING:

 At the hearing against BOA on an old case of mine and Bill’s [William GWALTNEY, partner in GGKW] today I moved to enforce settlement. They actually agreed to a trial payment with my client in writing at mediation 2 years ago. The Judge granted the motion and wants a hearing in 60 days on the arrears (which he agreed my client isn’t liable for), sanctions and fees. She made her payment post-mediation and they sent the checks back. I gave him the Massachusetts affidavits from the BOA employees.  The Judge looked shocked. Opposing Counsel argued the Massachusetts case had nothing to do with our case.

Judge said “Mrs. Kelley how about I enter an order telling Plaintiff they have so many days to resolve this?”  I said “with all due respect your Honor BOA hasn’t listened to the OCC and followed the consent order, they haven’t listened to DOJ on the consent judgement and they are violating the AG settlement. I can assure you 100% they won’t listen to this Court either. Once we leave this room we are at the mercy of BOA actually working with us and their own attorney nor this court can get them to.  Their own attorney couldn’t reach them yesterday or today.  My client was to send in one utility bill two years ago. She sent it the day after mediation and they’ve sat and racked up two years of arrears and fees. This court has the power to sanction that behavior under rule 1.730 and should because this was orchestrated. The Massachusetts case is a federal class action which includes Florida homeowners like my client. It says Florida on the Motion for class certification so it does matter in this case. This was a scheme and a fraud.  It was planned and deliberate”.

Opposing counsel wanted to start the modification process over because the mediation agreement said “Upon completion of the trial payments Defendant will be eligible for a permanent modification”. Opposing counsel said “just because they meet the trial payments doesn’t mean they get a permanent mod.”  I said “under the consent judgment they better” and told the judge we were not going through the modification again, my client had already been approved. He agreed and said that the trial would become permanent and ordered BOA to provide an address for payment. He told opposing counsel that the argument that a trial period wouldn’t become permanent wasn’t going to work for him.

I love the 14th circuit. There is a great need from here to Pensacola and in the smaller counties like I was in today you can actually get somewhere.

Now the banks won’t even say impasse at mediation. It’s always “no agreement”.   But they’ll tell you to send in documents the next week only to say they didn’t get them. Now after those affidavits I see why.

Danielle Kelley, Esq.

Garfield, Gwaltney, Kelley & White
4832 Kerry Forest Parkway, Suite B
Tallahassee, Florida 32309
(850) 765-1236

 FOLLOW DANIELLE KELLEY, ESQ. ON HER BLOG

Reuters: BOA Paid Bonuses of Target Gift Cards To Modification Employees For Steering Cases Into Foreclosure, Fired Them If They Didn’t Go After the Foreclosure

SIX FORMER BOA EMPLOYEES TESTIFY THAT BOA MODIFICATION AND FORECLOSURE SPECIALISTS WERE PAID AND INSTRUCTED TO LIE TO HOMEOWNERS, PAID WITH GIFT CARDS IF THEY SUCCESSFULLY THREW THE HOMEOWNER INTO FORECLOSURE AND WERE DISCIPLINED OR FIRED IF THEY FAILED TO TURN OVER THE REQUESTS FOR MODIFICATION INTO THE RIGHT NUMBER OF FORECLOSURES.

IF YOU WANT A MODIFICATION, YOU NEED A LAWYER TO CHALLENGE THE REPRESENTATIONS OF LOST DOCUMENTS AND INCOMPLETE APPLICATIONS FOR MODIFICATION. AND YOU ESPECIALLY NEED A LAWYER OR HUD COUNSELOR TO SUBMIT THE COVER LETTER AND THE SPECIFIC PROPOSAL FOR MODIFICATION WITH AFFIDAVITS FROM EXPERTS — (usually absent because the bank doesn’t request it). LIVINGLIES PROVIDES SUPPORT TO ANY ATTORNEY NEEDING ASSISTANCE IN DRAFTING THE COVER LETTER, AFFIDAVITS AND PROPOSAL. CALL CUSTOMER SUPPORT EAST COAST 954-495-9867 OR CUSTOMER SERVICE WEST COAST 520-405-1688 FOR PRICE QUOTES AND REQUIREMENTS. GGKW PROVIDES LEGAL SERVICES ONLY IN FLORIDA.

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 PROVIDE ACTIVE LITIGATION SUPPORT 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. Garfield is a partner of Garfield, Gwaltney, Kelley and White

Danielle Kelley, Esq. is a partner in the firm of Garfield, Gwaltney, Kelley and White (GGKW) in Tallahassee, Florida 850-765-1236

Our very own Danielle Kelley was quoted in a Reuters article yesterday that laid out in exquisite detail the endemic practice of lying, layering, laddering and forcing homeowners into foreclosure when a modification was better for both the homeowner and the investor. The article is by Michelle Conlin and Peter Rudegeair, Reuters, News Agency. Article carried in New York Times and other periodicals. Story picked up by several investigative reporters for in depth reports on TV, radio and other news media.

Since BOA might be successful in killing story, we produce most of it here:

The full article can be found at: FORMER BANK OF AMERICA WORKERS ALLEGE IT LIED TO HOMEOWNERS

EDITOR’S NOTE:  As we have been saying for 6 years, sometimes alone in the wilderness, this is not a conspiracy theory, it is a fact. The entire securitization scheme was a lie, a Ponzi scheme to steal trillions of dollars from the U.S. Economy, and trillions of dollars from other countries around the world.

In order to make it work, the big banks had to set up an infrastructure in which they would lie, cheat and steal, sending the profits off to other jurisdictions and covering up the crimes by using companies at each layer of the scheme who channeled a large portion of investor funds and most of the recovery from insurance, credit default swaps, and government bailouts away from the investors and away from the borrowers.

The essential capstone of the strategy was the foreclosure sale and the expiration of the right of redemption. Without it, the banks could owe as much as $25 trillion back to insurers, credit default swap counterparties, government agencies, government sponsored entities (Fannie and Freddie) and the investors who provided all the money that was used to create the largest liquidity boom in history. And then there were the extra fees for servicing a loan that was deemed non-performing (even though it was the bank who lied to homeowners telling them to stop paying). So far it has been the perfect crime.

And the underpinning of the strategy was that the banks could control the narrative — that it was about borrowers who were intentionally getting into deals they could not afford — when it was just the opposite, to wit: it was the banks acting through many layers of nominees, conduits and intermediaries whose goal was to rid themselves of the money on deposit from investors (money that should have been entirely into a REMIC trust account and never was). Much of the money successfully stolen was in the form of a second tier yield spread premium that was created in the spread between the loans that were promised to investors and the actual loans made to borrowers.

It was all a lie. The borrowers believed the lender was the lender and that the lender would not assume a high risk on a loan that was doomed to fail. The investors believed that since most of them were managed funds who were required to invest only in triple A rated securities that were insured and guaranteed that industry standard underwriting was under way. Nothing could have been further from the truth.

The Banks were lying and paying for others to lie about the property valuation, the safety of the collateral, the existence of the collateral for investors, and the existence of insurance and hedge products for the investors. They lied to investors, they lied to the press, they lied to the government agencies, they lied to the two presidents that were caught in the web of deceit, and they lied to the secretaries of the treasury.

And now, as predicted the tsunami is going the other way as the truth sloshes over all the lies they told. We start with the story of modification of loans which could have resulted on most of the foreclosed homes being modified. Now we have strong evidence from the actual people who worked for BOA and other large financial institutions that their strategy was to use the promise of modification to lure homeowners into default on loans owned by unidentified parties, and stretch out the time so that the hole dug for the homeowner was too deep to get out of, and eventually put a cap on the well that could spray liability all over the mega banks and end their existence.

PRACTICE HINT: WITHOUT EXPERTS IN E-DISCOVERY, YOU WILL BE UNABLE TO WIN YOUR CASES OR GET ENOUGH TRACTION TO FORCE MODIFICATION ON THE TERMS OFFERED BY THE BORROWER. GGKW, IN WHICH DANIELLE KELLEY IS  PARTNER, IS DEVELOPING RELATIONSHIPS WITH PRIVATE INVESTIGATORS AND FORENSIC  COMPUTER SPECIALISTS WHO ASSIST US ON MOST OF OUR CASES. WHEN YOUR GOAL IS TO WIN RATHER THAN DELAY, IT COSTS MONEY. ANTI-FORECLOSURE MILLS CHARGING LOW MONTHLY PAYMENTS ARE EFFECTIVE AT DELAYING THE FORECLOSURE BUT USUALLY INEFFECTIVE AT STOPPING IT OR EVEN WINNING THE CASE. YOU GET WHAT YOU PAY FOR.

 FOLLOW DANIELLE KELLEY, ESQ. ON HER BLOG

Significant quotes from Reuters article:

Borrowers filed the civil case against Bank of America in 2010 and are now seeking class certification. The affidavits, dated June 7, are the latest accusations over the mishandling of mortgage modifications by some top U.S. banks.

Six former Bank of America Corp (BAC.N) employees have alleged that the bank deliberately denied eligible home owners loan modifications and lied to them about the status of their mortgage payments and documents.

The bank allegedly used these tactics to shepherd homeowners into foreclosure, as well as in-house loan modifications. Both yielded the bank more profits than the government-sponsored Home Affordable Modification Program, according to documents recently filed as part of a lawsuit in Massachusetts federal court.

The former employees, who worked at Bank of America centers throughout the United States, said the bank rewarded customer service representatives who foreclosed on homes with cash bonuses and gift cards to retail stores such as Target Corp (TGT.N) and Bed Bath & Beyond Inc (BBBY.O).

For example, an employee who placed 10 or more accounts into foreclosure a month could get a $500 bonus. At the same time, the bank punished those who did not make the numbers or objected to its tactics with discipline, including firing.

About twice a month, the bank cleaned out its HAMP backlog in an operation called “blitz,” where it declined thousands of loan modification requests just because the documents were more than 60 months old, the court documents say.

The testimony from the former employees also alleges the bank falsified information it gave the government, saying it had given out HAMP loan modifications when it had not.

Mortgage problems have dogged Bank of America since its disastrous purchase of Countrywide Financial in 2008. The bank paid $42 billion to settle credit crisis and mortgage-related litigation between 2010 and 2012, according to SNL Financial.

Bank of America and four other banks reached a $25 billion landmark settlement with regulators in 2012, following a scandal in late 2010 when it was revealed employees “robo signed” documents without verifying them as is required by law.

But problems have persisted. Since 2012, more than 18,000 homeowners have filed complaints about Bank of America with the Consumer Financial Protection Bureau, a new agency created to help protect consumers. Recently, the attorney generals of New York and Florida accused Bank of America of violating the terms of last year’s settlement.

The government created HAMP in 2009 in response to the foreclosure epidemic and to encourage banks to give homeowners loan modifications, allowing some borrowers to stay in their homes.

THE BLITZ

The court documents paint a picture of customer service operations where managers roamed the floor with headsets, able to listen into any call without warning. Service representatives were told to lie to homeowners, telling them their paperwork and payments had not been received, when in reality they had.

“This is exactly what’s been happening to homeowners for years,” said Danielle Kelley, a foreclosure defense lawyer in Florida. “No matter how many times they send in their paperwork, or how often they make their payments, they simply can’t get loan modifications. They wind up in foreclosure instead.”

The former employees said they were told to falsify electronic records and string homeowners along in foreclosure as long as possible. The problem was exacerbated because the bank did not have enough employees handling modifications, adding to the backlog of cases purged during the “blitz” operations.

 

 

What to say about BOA

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

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 PROVIDE ACTIVE LITIGATION SUPPORT 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.

My partner, Danielle Kelley, Esq.  was in a hearing for the simple purpose of enforcing a modification agreement that had been approved by Bank of America. In typical style the bank was now saying that the homeowner was not entitled to a permanent modification even though the client had satisfied all of the terms of the trial modification. You might think this should be easy and you would be right.

Sometimes it is good courtroom strategy to show your exasperation with the system, with the court and with banks that are so arrogant that they think that they can continue to violate court orders, consent decrees, laws, rules and regulations.

Here is part of what Danielle wrote to me shortly after the hearing:

 At the hearing against BOA on an old case of mine and Bill’s [William Gwaltney of GGK] today I moved to enforce settlement. They actually agreed to a trial payment with my client in writing at mediation 2 years ago. The Judge granted the motion and wants a hearing in 60 days on the arrears (which he agreed my client isn’t liable for), sanctions and fees. She made her payment post-mediation and they sent the checks back. I gave him the Massachusetts affidavits from the BOA employees.  The Judge looked shocked. Opposing Counsel argued the Massachusetts case had nothing to do with our case.

Judge said “Mrs. Kelley how about I enter an order telling Plaintiff they have so many days to resolve this?”  I said “with all due respect your Honor BOA hasn’t listened to the OCC and followed the consent order, they haven’t listened to DOJ on the consent judgement and they are violating the AG settlement. I can assure you 100% they won’t listen to this Court either. Once we leave this room we are at the mercy of BOA actually working with us and their own attorney nor this court can get them to.  Their own attorney couldn’t reach them yesterday or today.  My client was to send in one utility bill two years ago. She sent it the day after mediation and they’ve sat and racked up two years of arrears and fees. This court has the power to sanction that behavior under rule 1.730 and should because this was orchestrated. The Massachusetts case is a federal class action which includes Florida homeowners like my client. It says Florida on the Motion for class certification so it does matter in this case. This was a scheme and a fraud.  It was planned and deliberate”. 

Opposing counsel wanted to start the modification process over because the mediation agreement said “Upon completion of the trial payments Defendant will be eligible for a permanent modification”. Opposing counsel said “just because they meet the trial payments doesn’t mean they get a permanent mod.”  I said “under the consent judgment they better” and told the judge we were not going through the modification again, my client had already been approved. He agreed and said that the trial would become permanent and ordered BOA to provide an address for payment. He told opposing counsel that the argument that a trial period wouldn’t become permanent wasn’t going to work for him.

I love the 14th circuit. I talked to a potential client last night in Santa Rosa county briefly (giving him to Danielle G) who said the judges in Pensacola are pro-bank.  But in between here and there its different. He said he hired Matt Weidner (who referred him to me) because he couldn’t find an attorney in North Florida who did foreclosure defense. There is a great need from here to Pensacola and in the smaller counties like I was in today you can actually get somewhere.

She was pro se at mediation but that agreement is a blessing. Now the banks won’t even say impasse at mediation. It’s always “no agreement”.   But they’ll tell you to send in documents the next week only to say they didn’t get them. Now after those affidavits [in the class action in Massachusetts] I see why.

Michigan Appellate Court Dismisses BOA Foreclosure for Lack of Standing — but for the wrong reason?

CHASE-WAMU MERGER CONSIDERED IN MICHIGAN COURT OF APPEALS AS NOT AN ASSIGNMENT.  BOA FORECLOSURE DISMISSED AND REMANDED FOR LACK OF STANDING.

And next is an interesting favorable decision in the State of Michigan entered June 6, 2013 but not yet published. Sobh-v-Bof-A, Chase et al

Bank of America was found to LACK STANDING to Foreclose. So far so good. But the reasoning of the Court leads me to question whether the right record was in front of them. They ASSUME that the Chase-Wamu merger transferred the loans only because, as I see it, nobody read the merger agreement. The receiver, as I pointed out in prior posts, acting on behalf of the FDIC, the trustee in WAMU bankruptcy, Chase and WAMU executives were sort of playing fast and loose with the rules.

It turns out that Chase never paid for anything. While it could be argued that they assumed the liability on billions of dollars in deposits, they also got the money that was on deposit. The agreement says the consideration is zero in no uncertain language. In fact, later on in the agreement and then again outside the agreement, they slipped in a provision wherein Chase was putting up $1.9 billion, but getting more than $2 billion back out of a tax refund owed to WAMU, so they had negative consideration and there is no recital of any net loss they were taking when they assumed the deposits of WAMU.

It also turns out that, straight from the receiver’s lips, if you are looking for an assignment, you won’t find one because there isn’t one. And the merger and assumption agreement specifically does NOT include the bogus mortgage loans and other liabilities (put back) in the securitization scheme which is most of all loans originated by WAMU. Chase didn’t want to buy the loans because they correctly perceived that the liabilities on those loans and the liabilities to alleged REMIC structures that never received an interest in the loans, and the liabilities to insures, counterparties on credit default swaps and to the Federal government and Federal Reserve might vastly exceed the nominal value of mortgages originated by WAMU. Then there was also the liability for predatory or fraudulent loan practices. Altogether, Chase didn’t want to be saying it owned ALL the loans. It just wanted to be able to say it some of the time when they had an uncontested foreclosure and they could get a free house.

So Chase got an affidavit from the receiver that said that Chase owned the loans by operation of law because of the merger. That affidavit has been used hundreds if not thousands of times in foreclosures where Chase perceived the risk to be low. Thus in uncontested cases, Chase alleged it owned the loans even if they were “securitized” and got away with it because, well, there was nobody to say otherwise.

A good thing that the Michigan court said was that the Chase had the burden of proving the chain of ownership which was the history of the piece of property. A bad thing that the Court said was that Chase “acquired” the loans but that the foreclosures were voidable because the assignment was never recorded. In Michigan the absence of a recorded assignment is deadly so they ran with that idea and decided fro the borrower and against Chase who will no doubt now enter into a settlement or modification for which they have no authority to even talk about because they do not now nor did they ever own the loans.

Just because the loans were considered a hot potato and nobody wanted them doesn’t mean that anyone can claim them. But that is exactly the plan of engagement adopted by Chase. So all that happened here was that Chase was chased out of Court with permission to come back when it had the assignment recorded. tricky business there. Will they fabricate that instrument or will they simply settle with the borrower for what they can get? Whatever they get, it is free money because at no time in the history of the loan has Chase ever been at risk unless, now that they are acting as though they have control over the loan portfolio, a court decides that if you fake it or made it. Greed has no bounds. If Chase had simply left the loan portfolio to wallow in its own crud, no argument could be made against Chase for all the chicanery that went on with the borrowers and investors. Now that they have led courts to believe they have apparent authority, maybe they have apparent liability as well.

BOA “SENIOR COLLECTOR”: “I lied because I was told to lie.”

Want to know why the blog is called “Living Lies”? Then read this:

see affidavit.boa3.djk

see also Memorandum to Certify Class: Editor’s Note: This is where the banks are at their most vulnerable.. They have gone to great lengths to create the illusion that they were modifying loans or even willing to do so when in fact what they really wanted and needed is a foreclosure sale to prevent them from getting hammered on liability for stealing the investors’ money and for diversion of both assets and money from the investors and from what would have been a benefit to borrowers. memotocertifyclass. I believe that there are monetary damages that could be awarded particularly when the pretender lender cannot come up with an allegation and proof of financial injury. Opportunities to sell or refinance the home were thwarted both by the pending foreclosure action and the negative credit reporting from non-creditors. People who have had their credit scores tanked by the pretender lenders should write to the credit reporting agencies and tell them that the report is false and fraudulent — that you never owed any money to the entity that entered the negative report.

Practice Hint: Get the name of the person and confirm their telephone, email, fax and physical address. Tell them you are recording the conversation for training purposes. And then record it.

This affidavit shows exactly why you need people are both lawyers and forensic computer experts to assist on most cases. Law firms lacking these resources and lacking private investigators, are not equipped well enough to do battle with these lying behemoths. If they are charging low fees just to sign you up, their chances are diminished that they can do anything besides delay a wrongful foreclosure instead of beating it.

This affidavit is an example of why the entire foreclosure process is going to unravel in the near future. Previously judges were resisting pleading, argument and discovery direct it at the credibility and truthfulness of affidavits and live testimony in court if they were submitted by a well-known bank or other institution supposedly acting on behalf of a bank. As time passed more and more judges were beginning to discern inconsistencies in the pleading and proof of the banks. But they still thought that the banks were most likely in possession of “the truth” and that any representation from the bank should be treated as credible whereas any representation from the borrower should be treated as dilatory at best.

Bank of America has taken the position that its house is totally in order. They even got the Atty. Gen. of the state of New York to back off of a lawsuit that was eventually filed only against HSBC. Danielle Kelly, Esq., of the firm of Garfield, Gwaltney, Kelley and White is writing an article about affidavits (in support of foreclosing) signed by people with no idea of what they contain (or knowing that they are lies), including the description of the signor as someone with authority to do so. You’ll see that article shortly, so I won’t belabor the point. I’ll simply quote the following from an affidavit of a supposedly senior person at BOA filed in United States District Court for the District of Massachusetts.:

Using the Bank of America computer systems I saw that hundreds of customers had made their required trial payments, sent the documents requested of them, but had not received permanent modifications. I also saw records showing that Bank of America employees have told people that  documents had not been received when, in fact, the computer system showed that Bank of America had received the documents. This was consistent with the instructions my colleagues and I were given. We were told to lie to customers and claim that Bank of America had not received documents it had requested, and that it had not received trial payments (when in fact it had). We were told that admitting that the bank received documents would “open a can of worms” since the bank was required to underwrite a loan modification within 30 days of receiving those documents and it did not have sufficient underwriting staff to complete the underwriting in that time…. Site leaders regularly told us that the more we delayed the HAMP modification process, the more fees Bank of America would collect. We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending the lay of the … modification process by any means we could —  this included lying to customers. For example, we were instructed by our supervisors at Bank of America to delay modifications by telling homeowners who called in at their documents were “under review,” when, in fact, there had been no review or any other work done on the file.

Employees who were caught admitting that Bank of America had received financial documents or that the borrower was actually entitled to a permanent loan modification where discipline and often terminated without warning.

The only other thing that I would state at this point is that Bank of America did not merely lie to its customers. Bank of America makes a practice of lying to its own staff. While the use of a “nonperforming” loan are higher than the fees paid on a  “performing” loan, the real reason for this outrageous behavior is that the banks are attempting to protect and maintain their receipt of outrageous sums of money that they have declared to be proprietary trading profits. As I have stated before these banks are intermediaries. They are not and never were principals or real parties in interest in any transaction between the homeowner and the investors who put up the money.

As partial explanation of what I am talking about, consider this: you order a brand-new TV on Amazon using one of your many plastic cards. The vendor is (by way of example) Best Buy. Your account is debited $1000 which is exactly the amount you agreed to pay. Later, you find out that Best Buy accepted $600 for the TV and the intermediaries kept the other $400.  You also find out that during the shipping process the intermediaries took possession of the TV and intentionally dropped it 30 times to make sure that it wouldn’t work. During that process you learn that the intermediaries each paid for a contract of insurance using your money. Sure enough, the TV arrives in 1000 pieces. Each of the intermediaries receives full payment for the TV probably at the original purchase price of $1000. The intermediaries tell you that your problem is with Best Buy because that is the vendor in the transaction. Best Buy tells you that the TV was just fine when it left its distribution center and directs you to one of the intermediaries that handled either the shipment or the payment for the shipment. You are left going around in circles and you get worn out or you accept a settlement that is worth far less than the TV you purchased.

Now comes the fun part. The issuer of the credit card wants you to repay them $1000 at the end of the month or pay monthly installments with an interest rate of 24%. All you know is that you got screwed but you’re not entirely sure how that happened. The purpose of this blog is to educate you gradually on how you got screwed and why you are not a deadbeat; instead, you are a pawn in a very large Ponzi scheme.

Garfield, Gwaltney, Kelley & White

4832 Kerry Forest Parkway, Suite B

Tallahassee, Florida 32309

(850) 765-1236

More News:

http://www.fbi.gov/lasvegas/press-releases/2013/former-chief-executive-officer-of-mortgage-servicing-company-pleads-guilty-to-bank-fraud-in-scheme-to-withhold-funds-from-wells-fargo-bank  – But they won’t go after Wells?  Makes a lot of sense

From Danielle Kelley, Esq. : The affidavits filed with the Court in Massachusetts by BOA and Urban employees are infuriating.   I particularly like the one that talks about the gift cards and $500 bonus payments to employees who had high foreclosure numbers and the one about the “Blitz” where as many as 1,500 modification applications would be denied several times a month based on production numbers whether the homeowners truly qualified for a modification or not. Selling out homeowners while collecting federal incentives to “pretend” to consider them for a federal modification program and then behind closed doors giving Target gift cards to employees who have high foreclosure numbers? 

4th DCA Florida: Trustee of Asset Pool Must Join or Ratify

 

“servicer may be considered a party in interest to commence legal action as long as the trustee joins or ratifies its action.”

ElstonLeetsdale LLC v CWCapital Asset Management LLC-1

This ought to be interesting. If Deutsch, or U.S. Bank, or Bank of New York, or any of the other “Trustees” join or ratify the action then they are asserting, under oath (if the lawyer for the homeowner knows what he or she is doing) that (1) the Asset pool is exists, (2) that the subject loan is in the asset pool (i.e., consideration paid by the Trust and assignment before cut-off date) and (3) that the trust was properly organized and (4) that the Trustee is authorized by [fill in blank here, if the lawyer of the homeowner knows what he or she is doing] to accept the assignment, join in the lawsuit and ratifies the representations and claims made on behalf of the REMIC trust and (5) signed by  a trust officer for the bank who says it is the trustee for the asset pool.

You might want to ask while you are on the subject, exactly why the Trustee wants to bind the beneficiaries of the trust to ownership of a worthless loan. This is a question raised by Judge Shack in New York 5 years ago. Nobody was listening. Now maybe some people are starting to see the wisdom of Shack’s question. If securitization was on the level, then the funding, assignment, assumption and payment would have all occurred as set forth under New York Law, the Internal Revenue Code, the provisions of the Pooling and servicing Agreement, which means underwriting according to industry standards and procuring insurance and credit default swap protection FOR THE INVESTORS, NOT THE BANKS WHO HAD NO MONEY IN THE DEAL.

So while you are on the subject, you might want to ask the trustee why they have made no claim against the insurance, credit default swaps and other payments received from co-obligors that were not disclosed to the borrower. In fact, you might want to ask whether the trustee views this as an account receivable, bond receivable or note receivable? If he or she doesn’t know, ask who would know — after all a trustee is like a receiver with special skills and experience in keeping the books for each trust and assuring customers there would be no commingling of funds. If the trustee doesn’t think the trust is owed any money other than the payments from the borrower, ask him or her, why not?

Once the trustee acknowledges that there were payments which should have been allocated to the bond receivable account or account receivable for the investors, then ask the big question, to wit: do your books and records show the same flow of money in and out of the trust as the figures used by the subservicer in declaring the default, and bringing the foreclosure action. Once you get by “I don’t know” the answer is going to be “NO” if you drill deep enough and keep asking the questions who knows, what do they know, how do they know it and is the party claiming to be the trustee really a trustee?

I ask you this: with each of these fine banking institutions maintaining separate corporations or divisions that provide trust services for even a few hundred thousand dollars, why wasn’t the same trust department used to provide trust services to the REMIC trust? Why is it managed by Reynaldo Reyes, VP, Asset management at Deutsch Bank? What fees were received by the trustee? What services did it perform?

Suddenly a new dawn is upon us. The banks knowing full well they were going to claim and get free houses started early and effectively in persuading the media, government and the public, including the borrowers themselves that to defend the foreclosure was immoral because the borrower was seeking a free house. The banks were smart enough to get out in front of that one, but it is coming back around to bite them. The homeowners are not seeking free homes, they are seeking reasonable deals based upon true facts instead of false representations, withholding of disclosures required by law and lies from the intermediaries who pretend to be the lenders or to act for the lenders when they do not.

Is there a free house? Yes, every time another Judge rubber stamps another foreclosure and allows a non-creditor to submit a “credit bid” (non-cash) and take title to a home they advanced no money to finance or purchase any loan.

 

WHY JOIN ORIGINATOR AND THE PARTY WHO PARTICIPATED IN THE ILLEGAL TABLE FUNDED LOAN

Amongst the cases I review and manage, the question was raised by one of the homeowners as to why I insisted on holding both the originator and subsequent intermediaries in the alleged securitization chain and/or table-funded loan where both the party alleging having (1) the capacity to sue see SEC Corroborates Livinglies Position on Third Party Payment While Texas BKR Judge Disallows Assignments After Cut-Off Date, (2) the standing to sue and/or the authority to initiate foreclosures and (3) financial injury where they allege sale or assignment of the note. The reason is simple from a tactical and legal point of view. I wish to close out their options to keep moving the goal posts.

Here is the answer I wrote to the customer, whose property is located in a judicial state. This particular person is being pro-active — always a wise choice — in that he has been making his payments, was told to to stop making payments if he wanted a modification which he did initially and then changed his mind and reinstated, and remains convinced he was the victim of various forms of fraud and crimes including false Appraisals of the supposedly fair market value of the property at the time of the loan closing or the alleged loan closing. His goal is not a free house. His goal is to pursue any rights you might have for modification or settlement of his claims with respect to the illusion of a loan closing and the office of a closing agent. As any reader of this blog knows, it is my opinion that any such loan closing was in fact an illusion and that all the parties participating in that illusion were paid actors pretending to be something they were not —  less creating plausible deniability for any of the improper actions of the intermediaries at the “loan closing.”

There is a reason why I insist on continuing the joinder of those two defendants. Embrace wants to be dismissed out with prejudice because it says that sold the loan to Wells. I want to say that they didn’t sell the loan to Wells.  If I prevail on that point then Wells Fargo is out as a plaintiff in any foreclosure they might file, and potentially out as a servicer since they might not be able to show any authority.  If that is the case then they owe you an accounting for all of the money they collected from you and a statement of what they did with the money that they collected from you. You might well have a cause of action against Wells Fargo for taking money under false pretenses.

 If I don’t Prevail on that point and somehow they are able to show that Wells Fargo paid for the loan and owns the loan by virtue of that payment, then Embrace is still a proper party in the action because they are the owner of record of a mortgage based on a note that was never funded by Embrace.  The issue here is whether or not the mortgage was transferred with the debt and that issue is tied closely with the issue of securitization, which both of them deny. I believe that I will be able to show that the loan is subject to claims of securitization on behalf of a loan pool that may never have existed or which might not exist now.  and if I am able to show that the loan pool was never funded and therefore could never have paid for the loan then the apparent authority of both defendants is eviscerated.

  Either way, I don’t want to let either of them out of the litigation quite yet.  If we prevail on the question of whether or not there was an actual sale and the sale was authorized (see my blog article from yesterday) then Embrace is the only party left on record in the recording office. At that point I would drill down on them to see whether or not they can show that they fulfill their part of the bargain with you, to wit: that you sign a note and they give you adequate disclosure under the law and they fund a loan to you. It is my position that they did not give adequate disclosure and that they did not fund a loan to you even if the loan was not securitized. The best they can say is that this was a table funded loan which is according to Reg Z of the Federal Reserve a predatory loan  per se if it was part of a pattern of conduct.

 Given the statistics and information we have about both defendants it is my opinion that the chances are 96% that the loan was allegedly sold into the secondary market where it is the subject of a potential claim from an asset pool. The problem I wish to reveal here is that the entire chain of ownership collapses on itself. The other problem that I want to addressed is who actually received the money that you pay every month and what did they do with it (who did they pay).  the strategy here is to show that regardless of whether or not a claim of securitization exists, there were co-obligors (Wells Fargo),  insurance payments and proceeds of credit default swaps and multiple resales all of which should be applied against the amount owed to the real creditor, whoever that might be, thus reducing the loan receivable.

 If I can tie the loan receivable to one which derives its value from the alleged loan made to you, even if the originator paid for it, then there is a strong argument for agency and allocation of receipts under which the payment of monthly payments and the receipt of insurance proceeds and the proceeds from other obligors (including but not limited to counterparties on credit default swaps) were received and kept, like in the Credit Suisse case. 

From that point forward it is a simple accounting task to allocate third-party receipts of insurance and hedge money to the benefit of the investors whether they received it or not. The auditing standards under the rules of the financial accounting standards Board would require a further analysis and allocation of the money received —  specifically the reduction of the loan receivable or bond receivable held by the investors (directly if the REMIC trust was ignored or indirectly if the agents for the trust purchased insurance and hedge products, the proceeds of which should have been credited to the investors.

 If the investors are the real creditors than the amount that they are entitled to have repaid to them does not exceed the amount they advanced. It practically goes without saying that if the money advanced from investors was based on their reasonable belief that they were acquiring title to the loans funded by the money advanced by the investors, they should recover part or all of their investment to the extent that the other players (see the SEC order against Credit Suisse) paid for insurance and hedge products using the money of the investors and kept the proceeds for themselves —-  thus explaining rising reports of profits in the banks who are supposedly merely intermediaries in the conduct of commerce which was in sharp decline.

 In the end, under a series of unjust enrichment and other common-law actions, as well as the requirements of statute and the terms of the promissory note executed by the borrower, all money received in that manner should reduce the principal balance due from the borrower because the creditor has already been paid either directly or indirectly through its agents who were either authorized or possessed of apparent authority.

In fact , the great likelihood is that the banks received substantial overpayments amounting to multiples of the original principal amount of the loan.  According to both law and the terms of the proposed agreement between the borrower and the apparent lender, subject to the terms of the documents themselves as well as state and federal law, the borrower is entitled to recover all such undisclosed payments and receipts which are defined under the truth in lending act as “compensation.”

 Thus while the creditors not entitled to any more recovery than the amount advanced under an alleged loan, the borrower is entitled to full recovery of all money paid in connection with or related to the loan received by the borrower, regardless of the original source of the loan and any agreements between the intermediaries in the alleged securitization chain that do not have the signature of the borrower on them. The reason is public policy. While securitization was not considered in the original passage of laws  it was the overreaching by banks to the disadvantage of consumers and borrowers that was sought to be discouraged by penalties that would be so great as to prevent the practice altogether.

 Usually it is money that is taken under false pretenses and the illusion of securitization claims is no exception. But in the case of the borrower it is the signature of the borrower that was obtained under the false pretenses that  the party obtaining the borrower’s signature. The consideration was the money advanced by an unrelated party tot he transaction (investor) who thought their money was first going through a REMIC trust that would give them certain tax advantages.

Regards

Neil

 Garfield, Gwaltney, Kelley & White

4832 Kerry Forest Parkway, Suite B

Tallahassee, Florida 32309

(850) 765-1236

SEC Corroborates Livinglies Position on Third Party Payment While Texas BKR Judge Disallows Assignments After Cut-Off Date

Maybe this should have been divided into three articles:

1. Saldivar: Texas BKR Judge finds Assignment Void not voidable. It never happened.
2. Erobobo: NY Judge rules ownership of note is burden of the banks. Not standing but rather capacity to sue without injury.
3. SEC Orders Credit Suisse to disgorge illegal profits back to investors. Principal balances of borrowers may be reduced. Defaults might not exist because notices contain demands that include money held by banks that should have been paid to investors.

But these decisions are so interrelated and their effect so far-reaching that it seems to me that if you read only one of them you might head off in the wrong direction. Pay careful attention to the Court’s admonition in Erobobo that these defenses can be waived unless timely raised. Use the logic of these decisions and you will find more and more judges listening with increasing care. The turning point is arriving and foreclosures — past, present and future — might finally get the review and remedies that are required in a nation of laws.

 

Courts and SEC Drilling Down on Reality of BANK Fraud.

The effects will be far-reaching. The complexity of the false securitization scam was intended to shield Wall Street from continuing its endless pattern of conduct of fraud, misdeeds, perjury and other crimes and other acts of contempt for the courts. The result was that the entire finance system and the economies of the world were turned upside down. Now we are going to see them turn right-side up.

It has taken years, but the SEC and the Courts are now unraveling the mysteries behind the secret curtains of the scam of securitization, which turns out to be nothing more than a cover for a giant PONZI scheme that fell apart as soon as investors stopped buying mortgage bonds. That is the hallmark of PONZI schemes — using the new investor money to pay the expected returns to the older investors.

If it was a legitimate business plan, the failure of the investors to buy more mortgage bonds would have no effect on the rest of the system. Each bond, each mortgage would have either succeeded or failed on its own merit. But that is not what happened.

As can be seen by the decisions noted below, Wall Street defrauded investors on many levels, defrauded the government, and defrauded the borrowers on mortgages they knew with certainty would never survive even a few months.

In confidential deals, the banks entered into agreements to be compensated for the failure of the mortgage bonds and defaulting loans and then simply lied to regulators, investors and borrowers — and kept the money for themselves instead of turning over the money to the investors who were going to lose more money than they had ever dreamed on “triple A” rated “insured” and “hedged” (credit default swaps).

The SEC is now ordering Credit Suisse (and soon others) to disgorge $60 million that clearly should have been paid to investors and thus reduced the accounts receivable of investors. A much better educated SEC and much better educated Judges are peeking behind the curtains and they don’t like what they see. These decisions are, in my opinion, the precursors of a wave of decisions that overturns the entire foreclosure tragedy.

The bottom line is that investors funded the mortgages (plus a lot of fees and “proprietary trading profits” that were hidden from the investors and indeed the world), the banks stole the money, the accounts due to the investors is much lower than what is alleged in foreclosure actions, and none of the foreclosers have any right to be in court because (a) they have no capacity to sue in the absence of financial injury caused by the borrower and (b) they are relying on assignments that in the eyes of the law never happened. They not only didn’t lose money, they made more money than most people imagined. Now they are being ordered to pay back the money they promised to investors whose losses will be correspondingly reduced.

How this will be apportioned to the principal balance supposedly due from borrowers has yet to be determined. But it is clear that the receivable from the only real lender is being reduced by the amount of money received by the intermediaries in the securitization chain — in deals that were intended to defraud investors on two levels — not giving the money that the investors should have received and withholding disclosure about the actual quality of the loans.

The reduction in loss or accounts receivable of the investors should proportionately reduce the amount due from borrowers, which means that most foreclosures were based upon a number of false premises: a balance due, a default by borrowers, and the right to submit a false credit bid at auction from a non-creditor on a “foreclosure” that should never have occurred in the first place. Ownership of the note can only be proven if the would-be forecloser received the actual note (not a photo-shopped “original”) in a transaction in which it paid money pursuant to the actual authority to enter into the transaction. That is three elements: the real note, real ownership of the note and real authority to enter into the transaction by which the loans were allegedly assigned years after the cut-off date. The authority for this position is (a) New York Law, (b) the Internal revenue Code, (c) constitutional requirements of due process, (d) the UCC requiring an instrument to be “negotiated rather than just delivered (meaning payment was involved) and (e) common sense, to wit: lenders are entitled to be repaid but only once.

It has been argued here that the REMICs were ignored and that therefore they could not possibly be in the ownership chain of the note and mortgage. We have also argued that the originator of the mortgage has originated nothing if they didn’t pay anything.

With the help of the SEC and the these two court decisions we can see that there are many reasons why the REMIC could not be the owner of the loan and that no party in the securitization chain could be secured unless we invent a new entity in which all the parties in the securitization chain are rolled into one entity.

In the absence of such an entity or the lawful ability to create one retroactively we are left with an unsecured debt — the amount of which runs the gamut from the banks owing the borrower money to the substantial reduction of the principal due after credit is given for the ill-gotten gains stolen by the banks from the investors. Given these facts, there is no legal justification for even contemplating the purported existence of a default by the borrower since the amount due, and the amount of the required payment are both unknown without an accounting from ALL parties in the securitization chain.

If the cut-off date and the Internal Revenue Code and the Pooling and Servicing Agreement all state that any transaction assigning a loan after the cut-off date is not allowed, then the assignment is void. Add to that New York law that expressly states that the transaction is void, not voidable, (see below) which means that legally it never happened. Without a valid assignment, there can be no foreclosure. Add to that the lack of any consideration, and you have a dead shark on your hands —something that struck fear into the hearts of homeowners, governments, and investors but is now lying, gasping for breath, as the finale nears.

There is nothing left to hide because the doors are all open. It will still take years to unravel the financial mess, but now we have a chance to change policy and direct relief to where it belonged all along — to the investors who supplied the money and the homeowners who were duped into crazy, exotic mortgages that hid the real objective: foreclosure.

REQUIRED READING: Read Carefully and Take Notes

“Plaintiff’s ownership of the note is not an issue of standing but an element of its cause of action which it must plead and prove.(e.s.) … 

… dismissal on a pre answer motion by the defendant and are waived if not raised in a timely manner.” (e.s.) Wells Fargo v Saitta 4/29/13 Slip Op 50675

140156203-Ero-Bobo

PRACTICE AND DISCOVERY NOTE: “

In fact, the identity of the owner of the note and mortgage is information that is often in the exclusive possession of the party seeking to foreclose. Mortgages are routinely transferred through MERS, without being recorded. (e.s.) The notes underlying the mortgages, as negotiable instruments, are negotiated by mere delivery without a recorded assignment or notice to the borrower. A defendant has no method to reliably ascertain who in fact owns the note, within the narrow time frame allotted to file an answer. In light of these facts and the fact that Defendant contested the factual allegations asserted in Plaintiff’s pleading, Defendant’s general denial is sufficient to contest whether Plaintiff owns the note and mortgage.”

4^th paragraph, page 11

“Since the trustee acquired the subject note and mortgage after the closing date, the trustee’s act in acquiring them exceeded its authority and violated the terms of the trust.The acquisition of a mortgage after 90 days is not a mere technicality but a material violation of the trust’s terms, which jeopardizes the trust’s REMIC status.”

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SEC FINDS FRAUD, ORDERS DISGORGEMENT OF ILLEGAL PROFITS.

http://www.sec.gov/litigation/admin/2012/33-9.368.pdf

This SEC decision is one that deserves several readings. It essentially condenses 6 years of teaching on this blog into one decision, although they have still not quite drilled down all the way on the money trail. But they have drilled down far enough to discover that the banks made settlements on buy-backs, kept the money and didn’t give to the investors because (1) they wanted to keep it for themselves and (2) the huge number of early defaults would have led the investors to question whether industry standards were being followed in the underwriting of these loans. Had that happened, the well would have dried and nobody would be buying mortgage bonds because they would be revealed as PONZI certificates.

Even if you have been following this blog for years, as I know many of you have done, reading this decision from the SEC will bring it all together as to who , what, where, why and when. Anyone who takes another step in litigation without reading this is stepping into the darkness.

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Next Case: Saldivar

And then there is this: the assignment is void, not voidable and therefore the banks can’t attack the ability of the homeowner to attack the assignment since they are arguing that the assignment never really took place. It puts the burden of proof back on to the banks, where it belongs — a burden they cannot sustain because they cannot prove anything that would give traction to their position of keeping the money, taking the houses, taking the insurance taking the credit default swap proceeds, and taking the federal bailouts, all without giving an accounting other than the subservicer’s partial snapshot consisting of accounting records reflecting ONLY transactions with the borrower, neither proving nor offering to prove the validity or existence of the assignment. What you have essentially is what I have said a few times before on this blog — offer, without acceptance or the right to accept and no consideration.

saldivar-memo-opinion

This decision is important because of the reasoning, the logic and most importantly the application of New York law. Virtually all the REMIC trusts were common law trusts formed under New York law for a lot of reasons. So this decision is extremely important as persuasive authority in its finding that if the REMIC is closed, there is nothing to make the assignment TO after the close-out date, which as the Judge points out is the start of business for the trust.

He reasons that if the assignment after the close out date could be ratified then it is voidable and not void. If it is voidable then the homeowner has no standing to challenge the validity of the assignment. But, the Judge says if the assignment was void ab initio then there is nothing to ratify because the event never happened. If the event never happened then the homeowner does have standing to challenge the validity if the assignment. Essentially the homeowners saying that he denies there was any assignment. If there was no assignment then any action by the assignee is without any right, justification or excuse.

It is potentially standing which is jurisdictional to be sure but it is in personam jurisdiction now instead of subject matter jurisdiction — or perhaps both.

As pointed out above, the capacity to sue involves the basic elements of any lawsuits for money or equitable relief based upon a money debt: (1) duty, (2) breach of duty, (3) injury and (4) causation — the injury was caused by the borrower. As pointed out by these cases, NONE of the required elements are present and therefore, there is no capacity to sue. Capacity to sue is close to the issue of standing but it isn’t the same thing. While standing involves jurisdictional issues over the parties, capacity to sue involves jurisdictional issues over the subject matter. There is no subject matter jurisdiction unless the foreclosing party can make a case for stating the four elements of any lawsuit.

The keys here are the Judge’s citation to two things. First that the law of New York says it is void and the court must use the laws of the state of New York — a position mercilessly pounded into the courts by the banks. Now that position is blowing up in their faces. Second, he points out that under the Internal Revenue Code contains huge penalties and negative economic consequences if the REMIC was still accepting assignments after the cut- off date. Thus the Judge used reason, logic, New York law, and the negative effect imposed by the IRC if the REMIC provisions were violated. We might also add that the PSA contained the same restrictions. He concludes that the assignment 3 years after the cutoff was void, not void able and that it was void ab initio which means that there was no effective assignment despite the fabrication of a piece of paper.

This puts Deutsch and others who have stated they are the trustee for the REMIC in a no-win position. To the extent they have corroborated the assignment they have delivered an economic blow to the investors in the REMIC — and are now subjected to potential liability in the trillions of dollars. If they have not tried to back up the assertions of those bringing foreclosure then they clearly won’t do it now. And it explains why no actual signature for an actual Deutsch officer or employee is on any document used in bringing the foreclosure.

The further interesting point is that this is the fire in the brush that flushes the investors out. They must corroborate what we have been saying — that their agents violated the restrictions of the pooling and servicing agreement and that they, the investors, cannot be held to be bound to the ultra vires actions of their agents. And it raises the question of what else did these intermediaries do that violated the terms of the investment in mortgage bonds? It raises, most importantly, the question of WHY they violated the terms of the PSA and prospectus.

The only rational answer is MONEY — like the insurance and CDS proceeds. But beyond that and tantalizingly raised in this decision is — if the investors gave up money and it wasn’t through the REMIC — then you have two choices, to wit: either they invested in nothing or, as I have repeatedly stated on the blog and in my expert testimony, they became involuntary common law partners in a common law general partnership.

This raises issues that Wall Street wants to stay very far from. All their authority comes from a PSA that is now revealed to have been violated resulting in the inescapable conclusion, using the logic from this Texas bankruptcy judge, that Wall Street has no power over these transactions — including servicing loans. This means we can insist on the identity of the investors and that the ONLY people to go to for HAMP are the investors or some new authorized agent. But remember that in a true common law general partnership with no documentation there are some real knotty problems as to how investors could hire a Servicer without 100% of the holders of what might indivisible interests in loans, insurance proceeds and credit default swaps bought with money from the investors.

Unrhetorical Questions — Money, Lies and Accounting Records: Gander and Goose

Why are our courts routinely accepting allegations and documents from foreclosing banks that they would summarily throw out if the same allegations and documents came from borrowers?

 How can possession of an ALLONGE construed as ownership

of the debt without any other evidence being presented?

Why is the standard definition of “Allonge” ignored?

IF THE COURT IS USING THE TERMS OF “ALLONGE”, “ASSIGNMENT”AND “ENDORSEMENT” INTERCHANGEABLY, WHY DOES ALL THE LITERATURE ON LEGAL DEFINITION AND ELEMENTS SAY OTHERWISE? ARE WE MAKING A NEW UCC?

WHY ARE COURTS ALLOWING ENDORSEMENTS (SHOULD BE SPELLED “INDORSEMENT”) IN BLANK TO TRANSFER THE LOAN WHEN THE BASIS OF THE PROPONENT’S AUTHORITY TO FORECLOSE IS A DOCUMENT THAT FORBIDS ACCEPTANCE OF  ENDORSEMENTS IN BLANK?

 I recently received a question from an old friend of mine who was a solicitor in Canada and who is frustrated with our court system that continues to assume the validity of loans that have already been thoroughly discredited. He has attempted on numerous occasions to get information through a qualified written request or a debt validation letter and has attempted to verify the authority of any party to whom he would address a request for modification of his loan in Florida. While chatting with him online I realized that this information might be of some value to attorneys and borrowers. The principal point of this article is the old expression “what is good for the goose is good for the gander.” For those of you who are unfamiliar with the old expression it means that there should be equality of treatment, all other things being equal. In mortgage litigation is apparent that when an allegation is made or a proffer is made through counsel rather than the introduction of evidence, the courts continue to function from both a misconception and  misapplication of the Rules of Court and the rules of evidence.

 When the case involves one institution against another, the same arguments that are summarily  rejected when they are advanced by a borrower are given considerable traction because the argument was advanced by a financial institution or financial player that identifies itself as a financial institution. In fact, a review of most cases reveals a much heavier burden on the party defending against the loss of their homestead than the party seeking to take it —  which is a complete reversal of the way our justice system is supposed to work.  The burden of proof in both judicial and nonjudicial states is constitutionally required to be on the party seeking affirmative relief and not on the party defending against it.

In the nonjudicial states, in my opinion, the courts are violating this basic constitutional requirement on a regular basis under circumstances where the party announcing a right to enforce a dubious deed of trust, collection on a dubious note, and therefore having the right to sell the property without judicial intervention despite the inability of the foreclosing entity to produce any evidence that it owns the debt, note, mortgage rights,  or even demonstrate a financial interest in the outcome of the foreclosure sale; to make matters worse the courts are allowing trustees on deeds of trust to be appointed or substituted even though they have a direct or indirect financial relationship with the alleged lender.

These trustees are accepting “credit bids” without any due diligence as to whether or not the party making the offer of the credit bid at auction is in fact the creditor who may submit such a credit bid according to the statutes governing involuntary auctions within that state.  In nonjudicial states the burden is put on the borrower to “make a case” and thus obtain a temporary restraining order preventing the sale of the property. This is absurd. These statutes governing nonjudicial sales were created at a time when the lender was easily identified, the borrower was easily identified, the chain of title was easily demonstrated, and the chain of money was also easily demonstrated. Today in the world of falsely securitized loans, the courts have maintain a ministerial attitude despite the fact that 96% of all loans are subject to competing claims by false creditors. The borrower is forced to defend against allegations that were never made but are presumed in a court of law. If anything is a violation of the due process requirements of the United States Constitution and the Constitution of most of the individual states of the union, this must be it.

 In the judicial states,  the problem is even more egregious because the same presumptions and assumptions are being used against borrowers as in the nonjudicial states. Thus in addition to being an unconstitutional application of an otherwise valid law, the judicial states are violating their own rules of civil procedure mandated by the Supreme Court of each such state (or to be more specific where the highest court is not called the Supreme Court, we could say the highest court in the state).  This is why I have strongly suggested for years that an action in mandamus be brought directly to the highest court in each state alleging that the laws and rules, as applied, violate constitutional standards and any natural sense of fairness.

 Here is the question posed by my Canadian friend:

(1)  The documents are phony documents (copies) produced by Ben Ezra Katz. It will cost me several thousand dollars to have a document expert evaluate the documents and then testify if they find them to be copies. At the beginning of this case, The Plaintiff’s attorney (Ben Ezra Katz associate) told the court (I do have a transcript) that they has found the ORIGINAL documents (note, mortgage, etc.) and that they had couriered the ORIGINAL documents to the clerk of Court. They did a Notice of Filing which on its’ face states ORIGINAL documents. I can not afford a document expert, however the AG in S. Florida has an open investigation into this case. Would I be out of line in requesting that they include this case per-se as part of their investigation and accordingly make a determination as to if or if not the subject documents which are on file with the clerk of court are originals or copies ??
(2)  The only nexus that Wells Fargo produces to establish themselves as a real party in interest is a hand filled out allonge (copy attached). Please note that the signer only signs as “assistant secretary” without further specifics. On the basis of what they provide it is virtually impossible to depose this person to determine if she actually did or did not sign this document, and if so what is her authority to do so.  I want to launch some sort of discovery that seeks to discover what else the Plaintiff has which would support the alleged allonge. Things such as any contracts, copies of any consideration, what was the consideration, who authorized the transaction, etc.  Do you have any suggestions in this regard. I bounced this off my attorney and I am not sure that we are on the same page. He wants to go to trial and have the proven phony documents as the main thrust. I agree with that, however I also would feel far better if we were able to cut them off at the knees as to standing such as the alleged allonge is part of the phony documents, and there are no documents that the Plaintiff can produce to support not only its’ authenticity, but its’ legitimate legal function. I do not like to have all of my eggs in one basket.

 And here is my response:

 You are most probably correct in your assessment of the situation. If they lied to the court and filed phony documents you should file motion for contempt. You should also file a motion for involuntary dismissal based on the fact that they have had plenty of time to either come up with the original documents or alleged facts to establish lost documents. The affidavit that must accompany the allegation of lost documents must be very specific as to the content of the documents and the path of the documents and it must the identify the person or records from which the allegations of fact are drawn. They must be able to state with certainty when they last had the original documents if they ever did have the original documents. If they didn’t ever have the original documents then an affidavit from them is meaningless. They have to establish the last party had physical custody of the original documents and establish the reason why they are missing. If they can’t do those things then their foreclosure should be dismissed. The more vague they are in explaining what happened to the original documentation the more likely it is that somebody else has the original documentation and may sue you again for recovery. So whatever it is that they allege should result in your motion to strike and motion to dismiss with prejudice. As far as the attorney general’s office you are correct that they ought to cooperate with you fully but probably incorrect in your assumption that they will do so.

I think you should make a point about the allonge being filled out by hand as being an obviously late in the game maneuver. You can also make a point about the “assistant Sec.” since that is not a real position in a corporation. Something as valuable as a note would be reviewed by a real official of the Corporation who would be able to answer questions as to how the note came into the possession of the bank (through interrogatories or requests for admission) and  what was paid and to whom for the possession and rights to the note, when that occurred and where the records are that show the payment and how Wells Fargo actually came into possession of the note or the rights to collect on the note. As you are probably aware the predecessor that is alleged to have originated the note or alleged to have had possession of the note must account for whether they provided the consideration for the note and what they did with it after the closing. If they say they provided consideration than they should have records showing a payment to the closing agent and if they received consideration from Wells Fargo they should have those records as well.

But the likelihood is that neither Option One nor Wells Fargo ever funded this mortgage which means that the note and mortgage lack consideration and neither one of them has any right to collect or foreclose.   In fact, since they are taking the position that the loan was not securitized and therefore that no securitization documents are relevant,  neither of them can take the position that they are representing the real party in interest as an authorized agent for the real lender.  And the reason you are seeing lawsuits especially by Wells Fargo in which it names itself as the foreclosing party is that the bank knows that Iit ignored and routinely violated essential and material provisions of the securitization documents including the prospectus and pooling and servicing agreement upon which investors relied when they gave money to an investment banker.

In that case, since you seek to modify the loan transaction and determine whether or not it is now or is potentially subject to  a valid mortgage, you should seek to enforce a request for information concerning the exact path of the money that was used to fund the mortgage. And you should request any documentation or records showing any guarantee, payment, right to payment, or anything else that would establish a loan to you where actual money exchanged hands between the declared lender and yourself. The likelihood is that the money was in a co-mingled account somewhere —  possibly Wells Fargo —  which came from investors whose names should have been on the closing and the closing documents.  Those investors are the actual creditors. Or at least they were the actual creditors at the time that the loan money showed up at the alleged “loan closing.” Since then, hundreds of settlements and lawsuits were resolved based upon the bank tacitly acknowledging that it took the money and used it for different purposes than those disclosed in the prospectus and pooling and servicing agreement. These settlements avoid the embarrassing proof problems of any institution since they not only ignored the securitization documents, more importantly, they chose to ignore all of the basic industry standards for the underwriting of a real estate loan because the parties who appeared to be underwriting the loan and funding the loan had absolutely no risk of loss and only had the incentive to close deals in exchange for sharing pornographic amounts of money that were identified as proprietary trading profits or fees.

And the reason why this is so important is that the mortgage lien could never be perfected in the absence of the legitimate creditor who had advanced actual money to the borrower or on behalf of the borrower. This basic truth undermines the industry and government claims about the $13 trillion in loans that still are alleged to exist (despite multiple payments from third parties in multiple resales, insurance contracts and contracts for credit default swaps). The abundant evidence in the public domain as well as the specific factual evidence in each case negates any allegation of ultimate facts upon which relief could be granted, to wit: the money came from third-party investors who are the only real creditors. The fact that the money went through intermediaries is no more important or relevant than the fact that you are a depository bank is intended to honor checks drawn on your account provided you have the funds available. The inescapable conclusion is that the investors were tricked into making unsecured loans to homeowners and that the entire foreclosure scandal that has consumed our nation for years is based on completely false premises.

Your attorney could pose the question to the court in a way that would make it difficult for the court to rule against you. If the lender had agreed to make a loan provided you put up the property being financed PLUS additional collateral in the form of ownership of a valid mortgage on another piece of property,  would the court accept a handwritten allonge from you as the only evidence of ownership or the right to enforce the other mortgage? I think it is clear that neither the banks nor the court would accept the hand written instrument as sufficient evidence of ownership and right to collect payment if you presented the same instruments that they are presenting to the court.

PRACTICE HINT: In fact, you could ask the bank for their policy in connection with accepting its mortgages on other property as collateral for a business loan or for a loan on existing property or the closing on a new piece of property being acquired by the borrower. You could drill down on that policy by asking for the identification of the individual or committee that would decide whether or not a handwritten allonge would be sufficient or would satisfy them that they had  adequate collateral in the form of a mortgage on the first property and the pledge of a mortgage on a second piece of property.

The answer is self-evident. No bank or other lending institution or lending entity would loan money on the basis of a dubious self-serving allonge.  There would be no deal. If you sued them for not making the loan after the bank issued a letter of commitment (which by the way you should ask for both in relation to your own case and in relation to the template used by the bank in connection with the issuance of a letter of commitment), the bank would clearly prevail on the basis that you provided insufficient documentation to establish the additional collateral (your interest in the mortgage on another piece of property).

The bank’s position that it would not loan money on such a flimsy assertion of additional collateral would be both correct from the point of view of banking practice and sustained by any court has lacking sufficient documentation to establish ownership and the right to enforce. Your question to the court should be “if justice is blind, what difference does it make which side is using an unsupportable position?”

HSBC Hit with Foreclosure Suit; FHA’s $115 Billion Loss Scenario; Return of the Synthetic CDO?
http://www.americanbanker.com/bankthink/hsbc-hit-with-foreclosure-suit-fhas-115-billion-dollar-loss-scenario-1059622-1.html

HSBC Foreclosure Law Violations
http://www.wealthdaily.com/articles/hsbc-foreclosure-law-violations/4356

Trouble Looms For Bank Of America, AIG’s Objections Have Merit
http://www.forbes.com/sites/halahtouryalai/2013/06/05/trouble-looms-for-bank-of-america-aigs-objections-have-merit/

Massachusetts foreclosures decline 79% as local laws stall the process
http://www.housingwire.com/news/2013/06/05/massachusetts-foreclosures-decline-79-local-laws-stall-process

———————————————–

Money from thin air? If the bank does not create currency or money then where does the money come from? Answer investor deposits into what they thought was an account for a REMIC trust. And if the money came from investors then the banks were intermediaries whether they took money on deposit, or they were the underwriter and seller of mortgage bonds issued from non existent entities, backed by non existent loans. And any money received by the banks should have been for benefit of the investors or the REMIC trust if the DID deposit the money into a trust or fiduciary account.Dan Kervick: Do Banks Create Money from Thin Air?
http://www.nakedcapitalism.com/2013/06/dan-kervick-do-banks-create-money-from-thin-air.html

Supreme Court foreclosure ruling tilts toward banks
http://www.bizjournals.com/portland/blog/real-estate-daily/2013/06/foreclosure-ruling-tilts-toward-banks.html

Your student loan isn’t really a loan!
http://www.salon.com/2013/06/05/let_college_students_go_bankrupt/

How, When, Where and Why to Hire an Attorney

REMEMBER TO DIAL IN ON NEW NUMBER FOR MEMBERS’ TELECONFERENCE TONIGHT: 1-626-677-3000

Editor’s Comment: Every case is different so this is not a comment on any specific case nor should you act on anything you read here without in-depth consultation with a trusted adviser.

As I have stated many times in my appearances at seminars, radio and television the first rule is don’t exchange a predatory lender for a predatory attorney. The same holds true for any organization offering services to consumers or homeowners in financial distress. The more popular ones may have achieved that status by good marketing and advertising rather than by efficient use of their skills which produces a satisfactory result to the client.

On the other hand, homeowners and consumers must understand that the practice of law is a business. None of these businesses played any major part in creating your distress. None of them owe you anything; nonetheless most homeowners and consumers contact my organizations do so under the mistaken belief that we are a foundation with infinite resources or that because they were screwed by the banks there is some special obligation on the part of the attorney, counselor, or other service provider. No such obligation exists.

The amount of money that such service providers charge is determined by the marketplace, ethical rules and disciplinary rules, and in certain cases by a web of regulatory or statutory restrictions or prohibitions. As soon as any service provider accepts you as a customer they are creating a liability for themselves and if they are offering a payment plan they are creating a risk that they will not be paid a reasonable fee for the services that they provide.

The second rule is that anyone who guarantees you a result is either lying or stupid. Stay away from them. Anyone who will tell you that they can do anything a lawyer can do for much less money is essentially offering their services under the banner of “unauthorized practice of law” which in some states is an actual felony. But that doesn’t mean that you can’t use alternative service vendors to assist you in getting information, analyzing information and presenting the information in a format that would be useful to an attorney or judge.

When speaking to a prospective client I often hear that other lawyers are charging much less than what I charge. My answer is always the same, to wit: if you’re shopping for price than you are in the wrong place; if you want Neil Garfield to represent you then you are in the right place but you have to choose whether you are willing to pay a higher price for a 66-year-old veteran of Wall Street, real estate investments and trading, and 34 years as a trial lawyer.

In places like South Florida where competition has become intense, several law offices have created the illusion that they are an anti-foreclosure mill by offering low down payments and low monthly payments. Such law firms are concentrating on developing volume rather than developing their skills and prowess in the courtroom. I have had to clean up the mess of many prior attorneys in order to present the case to a new lawyer. And of course the prospective client has mistaken the actions or inaction of prior counsel as a reason to distrust any member of the bar; such prospective clients jump from the frying pan into the fire when they enter into various agreements involving the execution of documents transferring title and contingency fee agreements which lack specificity on how they will be applied.

Back in 2007 and 2008 couldn’t find a lawyer that understood what I’m talking about or who would be willing to defend a foreclosure action for any amount of money because they thought they would lose every one of those cases. Now a number of cases are being lost not because there are no lawyers, but rather because the lawyers have taken on a large caseload without enlarging their staff to handle it. Therefore they end up unprepared in court conceding points that should be in issue.

As I have been saying for the last two or three years we are far beyond the point where a homeowner representing themselves is likely to get any satisfactory result. You will hear anecdotal stories where sometimes the homeowner was able to get a good result; but for the most part these cases are won on a knowledge of civil procedure and a use of strategy and tactics based upon prior experience in motion practice and trial practice. In this case you also want people who are already knowledgeable about negotiable instruments, the UCC,  contract law, property law, and the actual workings of Wall Street. The lawyer should be competent to be able to follow both the money trail and the paper trail and to compare the two as part of his preparation for his appearance in court.

The time to consult with an attorney is at the first moment that you think you might have a problem. Going to a neighbor or friend and following advice based upon a small number of anecdotal tales will probably result in you producing documents or making statements that will be later used against you. Like when the bank tells you what to say in a hardship letter making it clear that you couldn’t possibly pay any mortgage when in fact you could make mortgage payments based upon reasonable terms. Also, when a representative of the bank tells you that you should stop making payments they are telling you to breach the contract you signed. I make it a practice never to advise clients to do anything that puts them in a worse position than they are already in.

There is a built-in conflict between lawyer and client that is not ever likely to be resolved. The client wants a particular result and the lawyer wants to get paid for the work he has done regardless of the result. They are both right. The reality is that the lawyer should get paid for the work that he does and hopefully client has chosen a lawyer carefully bus and enhancing the likelihood that they will get a satisfactory result.  There is also the age old conflict over contingency fees and how they should be applied. At the moment my opinion is that the use of a contingency fee when the only result is a reduction in the amount of the principal demanded is probably going to be hard to enforce and may violate ethical rules and disciplinary rules governing how attorneys charge for their services. On the other hand where there is a recovery of an actual cash payment, a contingency fee is perfectly valid.

The argument over how attorneys get paid a lot of money on a contingency fee can be avoided simply by paying the attorney for the work he does. In the absence of being paid a reasonable fee in full the attorney is entitled to enhance the likelihood of him being paid with a contingency fee. Contingency fees vary from 10% or the way up to 50% depending upon the state, local rules and the situation at hand and usually do not cover the cost of attorney’s fees for an appeal or an administrative action that is ancillary to the civil proceedings in state or federal court.

The time to change attorneys is when you have lost faith in the capacity or willingness of the attorney or law firm to advocate on your behalf with all available resources. You should be aware that the successor attorney will be completely disinterested in what you have already paid the prior attorney. As far as the new attorney is concerned, it is a new case and requires a retainer and monthly payments, if that is what the attorney offers.

When you interview an a prospective attorney you should take the lead and inquire about his or her experience and what the reasonable expectations should be on the outcome of the case. AND if you know about a deadline, then keep after the lawyer and make sure they don’t blow the deadline.

I’ll be taking questions tonight on the members teleconference. REMEMBER TO USE THE NEW NUMBER: 1-626-677-3000

Short sales may show up on credit reports as foreclosures
http://www.inman.com/2013/06/04/short-sales-may-show-up-on-credit-reports-as-foreclosures/

WANT TO KNOW WHY NO PROSECUTIONS OF TOO BIG TO JAIL BANKERS? LOOK NO FURTHER THAN ERIC HOLDER: http://www.huffingtonpost.com/2013/06/04/eric-holder-1999-memo_n_3384980.html?ncid=txtlnkushpmg00000029

Rapid Fire Foreclosure Trials Clear Cases, Concern Attorneys
http://4closurefraud.org/2013/06/03/rapid-fire-foreclosure-trials-clear-cases-concern-attorneys/

EVERYONE EXCEPT THE BANKS: Feds Target Bid-Rigging Scams at Foreclosure Auctions
http://realtormag.realtor.org/daily-news/2013/06/04/feds-target-bid-rigging-scams-foreclosure-auctions

Florida’s Foreclosure Act HB 87 May End Up in Legal Battle
http://4closurefraud.org/2013/06/04/floridas-foreclosure-act-hb-87-may-end-up-in-legal-battle/

The Stealth Problem of Predatory Mortgage Modifications
http://www.nakedcapitalism.com/2013/06/the-stealth-problem-of-predatory-mortgage-modifications.html

WHAT HAPPENED TO ALL THE DATA COLLECTED WHEN THE OCC WAS REQUIRING REPORTING? WHY CAN’T HOMEOWNERS AND THEIR ATTORNEYS GET THAT INFORMATION? Where Has All the Info Gone, Long Time Passing?
http://www.huffingtonpost.com/joel-sucher/where-has-all-the-info-go_b_3356243.html

New York attorney general sues HSBC over foreclosures
http://www.latimes.com/business/la-fi-hsbc-sued-20130605,0,709209.story

HSBC in dock for ‘flouting US laws on mortgage foreclosures’
http://www.independent.co.uk/news/business/news/hsbc-in-dock-for-flouting-us-laws-on-mortgage-foreclosures-8644770.html

Elizabeth Warren Calls for Grassroots Movement on Student Loan Debt
http://www.motherjones.com/mojo/2013/06/elizabeth-warren-grassroots-movement-student-loan-debt

Why is the Media Ignoring the Obvious?

My consistency should be lauded instead of ignored. I represent one of the few people left who were on Wall Street in the late 1960′s and early 1970′s and who used layered bundling of derivative securities in the 1980′s to finance investments in commercial and residential real estate. Back when I started on Wall Street in my early 20′s I fell right in with those who set the tone and culture of Wall Street that frankly has not changed since the dawn of securitization (the breaking up of an investment into smaller shares so that more people with more money could provide capital to capitalist enterprises). We are talking about 2,000 years of human history where the Romans invented the idea of condominiums and cooperatives, the prejudices against Jews forced them into the jewelry and lending business because they were not allowed to do anything else, and the first appearance of pieces of paper used interchangeably with the actual exchange of goods and services.

When I was on Wall Street, the last thing on our minds was the quality or risk of any deal. We were there to make money move and that is what produced revenue. Eventually in economic history. it was discovered that once you could convince people to leave their gold, or securities with you, there were open ended moral hazards that were made legal by control of the purse strings by Medici, Rothschild, Warburg, Morgan and dozens of others. They did it quite simply through blackmail, bribery and intimidation. Nothing has changed. The result is always the same — the money moves up to the people who already have it while the rest of the population is enslaved. And about every five years, as Mayer has always said, bankers tend to step on a rake — only this time they are getting away with it, which is a first. They never even bothered  to throw a scape-goat under the bus because they didn’t need to — they were immune.

So we have bankers moving with impunity in our society making your money THEIR money by tricks of the trade. Case in point: student loans, where banks were allowed to insert themselves into a system that was already working, rake in enormous profits and leave students’ future mortgaged beyond any hope of repayment. Same as with mortgages. Any economist or businessman will tell you the same thing: without educated, trained workers, developing and evolving in a society, the work and the opportunities are going to shift geographically to where the workers are educated, trained and able to handle the jobs. We currently have 3 million jobs that are unfilled because we have seen education as an expense rather than an investment. It is like not saving for retirement and then being surprised, when you can’t work anymore (because of physical limitations or because you don’t know a damn thing about how business is conducted by the younger generations) and suddenly you are shocked to discover you are broke and depending upon social security and the largesse of family who are only recreating the same cycle you started and your father started in the first place.

And of course, the student loans won’t be repaid anymore than the mortgage loans are getting repaid. That is because the loans were stupid, they included marketing and sales commissions for people to encourage young, inexperienced people to take out loans for more than they needed with little or no hope of ever repaying the loans. Since they were guaranteed by the government, thanks to the banking lobby, and since they couldn’t be discharged in bankruptcy (mostly) thanks to the banking lobby and since in the last 15 years the loans were securitized removing the last vestiges of risk, the increasing interest rate (set to double soon if congress doesn’t act) and onerous terms of repayment are going to force graduate to seek out anything that provides immediate income instead of find their unique fit and contribution into society and developing new ideas and innovating because of their newly acquired knowledge,  skills and creativity.

Now we have banks reporting profits that are stupendous. I use that word because it is plain stupid. Banks are supposed to make money by lending at a higher rate than their cost of capital. But now they are lending the money of investors with no cost and stealing around 25%-30% of the investor money right off the top (tier 2 yield spread premium). Is it legal? NO! But our attorney general chooses to see it another way or to look away entirely.

The “free” press has slashed budgets for investigative reporters, and is simply parroting what government, Wall Street and big business are telling them to say. So when I am interviewed, my answers are and have been the same since the  1980′s when I was a talk show host on South Florida radio — people, consumers of information from the Press, and citizens who elect public officials must insist on something different. The pronounced apathy of the American voter is equivalent to the boss taking a ten year holiday — what did you think was going to happen in your absence?

Here are some issues I always bring up and those of you who get to speak to other people, the media or government should keep these in mind:

Why are you not investigating the representations on bank balance sheets in view of the fact that they are losing in Foreclosures suits — whenever they are required to show proof of payment and proof of loss?

How can banks be making money when they loan less money? How could banks own mortgage bonds when we know they were only created when they had investors committed and then sold forward without actual loans backing them?

How can the mortgage bonds be “mortgage-backed” when the entity that issued them never received any funding and never received the loan receivables? Why can banks claim the loss when the loss belongs to investors?

Why didn’t the banks instruct the closing agents to name the asset pools as the lender, the payee, the secured party on new or acquired mortgages?

Why are you not asking your own legal department how a mortgage can be perfected lien when the named “lender” never funded the loan and never funded the acquisition of the loan?

How hard is to see that the trail of real transactions (where real money exchanged hands) doesn’t match up with the paperwork given to borrowers and violates the terms of the paperwork given to lenders)?

I could go on with a hundred more questions, as you readily see from my blog www.livinglies.wordpress.com. Believe me, I know what these bankers did. The roots of this crisis were planted in the 1960′s and 1970′s. I was there working on Wall Street as an investment banker and a principal in a small brokerage firm.

I helped create what people now call derivatives and I was there when the bond traders and creative minds figured out how to create junk bonds, replacing the search for undervalued bonds.

I was there when the first flicker was conceived of masquerading junk bonds as investment grade if they were backed by mortgage loans. And I was there when they realized that they could be sure of the failure of mortgage loans and make a fortune betting on it without ever putting up a dime. The trick on Wall Street has always been to take the profits and allocate losses to investors. Why is this so difficult for the media when the facts are all in the public domain?

Mortgage Investors Get Blindsided

MORTGAGED DIPLOMAS

The Sub-Prime Mortgage Market Is Heating Up Again
http://www.businessinsider.com/sub-prime-mortgage-market-is-heating-up-2013-6

GRETCHEN MORGENSON: http://http://www.nytimes.com/2013/06/02/business/in-bank-earnings-quantity-over-quality.html?emc=eta1&_r=0

BofA $8 Billion Mortgage Deal Before Judge After 2 Years – Bloomberg
http://www.bloomberg.com/news/2013-06-03/bofa-8-billion-mortgage-deal-before-judge-after-2-years.html

Feds crack down on foreclosure auction scams — aiming at everyone except the banks, who submit “credit bids”instead of cash at each alleged auction.
http://bigstory.ap.org/article/feds-crack-down-foreclosure-auction-scams

Banks Traded on Inside Information on Mortgages

Despite the pronouncements by Eric Holder, the chief law enforcement officer of the United States, and the obvious reticence of the Securities and Exchange Commission, the vast majority of securities attorneys believe that the banks were (a) trading on inside information and (b) committing securities fraud when they funded and then traded on mortgages that were too toxic to ever succeed.

The first, trading on inside information, is regularly prosecuted by the justice department and the SEC. It is why Martha Stewart went to jail in rather flimsy evidence. The catch, justice and the SEC say is that this only applies to securities and the 1998 act signed into law by Clinton makes mortgage bonds and hedges on mortgage bonds NOT securities. It also makes the insurance paid on the mortgage bonds NOT insurance. This is despite the fact that the instruments meet every definition of securities and both the insurance contracts and credit default swaps appear to meet every definition of insurance. But the law passed by Congress in 1998 says otherwise, so how can we prosecute?

The second, securities fraud meets the same obstacle they say because they can’t accuse anyone of committing fraud in the issuance or trading of securities when the law says there were no securities.

So goes the spin coming from Wall Street and as long as law enforcement in each state and the DOJ keeps listening to Wall Street and their lawyers, they will keep arriving at the same mistaken conclusion.

If Wall Street had in fact followed the plan of securitization set forth in their prospectuses and pooling and servicing agreements, assignment and assumption agreements and various other instruments that were created to build the infrastructure of securitization of debt — including but not limited to mortgages, credit cards, auto loans, student loans etc. — then Wall Street would be right and the justice department and the SEC might be stuck in the mud created by the 1998 law. But that isn’t what happened and therefore the premise behind the apparent immunity of Wall Street Banks and bankers is actually an illusion.

Starting with the issuance of the mortgage bonds, most of them were issued before any mortgage was originated or acquired by anyone. In fact, the list attached to the prospectus for the mortgage bonds said so — stating that the spreadsheet or list attached was by example only, that these mortgages do not exist but would be soon be replaced with real mortgages acquired pursuant to the enabling documents for the creation of the REMIC “trust.” But that is not what happened either.

In no way did the Banks follow the terms of the prospectus, PSA, assignment and assumption agreements or anything else. Instead what they really did was create the illusion of a securitization scheme that covered up the reality of a PONZI scheme, the hallmark of which is that it collapses when investors stop buying the bogus securities and more investors want their money out than those wishing to put money into the scheme. There was no reason for the entire system to collapse other than the fact that Wall Street planned and bet on the collapse, thus making money coming and going and draining the lifeblood of capital worldwide out of economies and marketplaces that depended upon the continued flow of capital.

The creation of the REMIC “trust” was a sham. It was never formalized, never funded and never acquired any mortgages. hence any “exempt” securities issued by it were not the kind intended by the Act signed into law in 1998. It was not a mortgage-backed security, or credit backed security, it was an illusion designed to defraud anyone who invested in them. The purpose of issuing the mortgage bonds was not to fund and acquire mortgages but rather to steal as much money out of the flow as possible while covering their tracks with some of the money ending up on the closing table for newly originated or previously originated bundles of mortgages that were to be acquired. That isn’t what happened either.

Wall Street bankers put the money from investors into their own private piggy bank and then funded and acquired mortgages with only part of the money while they made false “proprietary trades” in the “mortgage bonds” that made it look like they were trading geniuses making money hand over fist while the rest of the world saw their wealth decline by as much as 60%-70%. The funding for debt came not from the unfunded REMIC “trusts” but from the investment banker who was merely an intermediary depository institution which unlawfully was playing with investor money. The actual instruments upon which Wall Street relies to justify its actions is the prospectus, the PSA, and the Master Servicing agreement — each of which was used to sell the investors on letting go of their money in exchange for the promises and conditions contained in the exotic agreements containing numerous conflicting clauses.

Thus the conclusion is that since the mortgage bonds were issued by an unfunded and probably nonexistent entity, the investors had “bought” an interest in an incoherent series of agreements that together constituted a security or, in the alternative, that there was no security and the investors were simply duped into parting with their money which is fraud, pure and simple.

I would say that investors acquired certain passive rights to the instruments used, with the exception of the bogus mortgage bonds that were usually worthless pieces of paper or entries on a log. In my opinion the issuance of the prospectus was the issuance of a security. The issuance of the PSA was the issuance of a security, And the issuance of the other agreements in the illusory securitization chain may also have been the issuance of a security. If cows can be securities, then written instruments that were used to secure passive investments are certainly securities. The exemption for mortgage bonds doesn’t apply because neither the mortgage bond nor the REMIC “trust” were ever funded or used — except in furtherance of their fraud when they claimed losses due to mortgage defaults and obtained federal bailouts, insurance and proceeds of credit default swaps.

The loan closings, like the funding of the “investments” was similarly diverted away from the investor and toward the intermediaries so that they could trade on the appearance of ownership of the loans in the form of selling bundles of loans that were not even close to being properly described in the paperwork — although the paperwork often looked as though it was all proper.

The trading, hedging and insuring of investments that were not only destined by actually planned to fail was trading on inside information. The Banks knew very well that the triple A rating of the mortgage bonds was a sham because the mortgage bonds were worthless. What they were really trading in was the ownership of the loans which they knew were falsely represented on the note and mortgage. They thus converted the issuance of the promissory note signed by the borrower into a security under flase pretenses because the payee on the note and the secured party on the mortgage never completed the transaction, to wit: they never funded the loan and they made sure that the terms of repayment on the promissory note did not match up with the terms of repayment set forth in the prospectus, which was the real security.

Knowing from the start that they had the power (through the powers conferred on the Master Servicer) to pull the rug out from under the “investments” they traded with a vengeance hedging and selling as many times as they could based upon the same alleged loans that were in fact funded directly by and therefor owned by the investors directly (because the REMIC was ignored and so was the source of funding at the alleged loan closing).

Being the sole source of the real information on the legality, quality and quantity of these nonexistent investments in mortgage bonds, the Wall Street banks, their management, and their affiliates were committing both violation of the insider trading rule and the securities fraud rule ( as well as various other common law and statutory prohibitions and crimes relating to deceptive practices in the sale of securities). By definition and applying the facts rather than the spin, the Banks a have committed numerous crimes and the bankers should be held accountable. Let’s not forget that by this time in the S&L scandal more than 800 people were sent to jail despite various attempts to mitigate the severity of their trespass and trampling on the rights of investors and depositors.

Failure to prosecute, while the statute of limitations is running out, is taking the rule of law and turning it on its head. The Obama administration has an obligation to hold these people accountable not only because violations of law should be prosecuted but to provide some deterrence from a recurrence or even escalation of the illegal practices foisted upon institutions, taxpayers and consumers around the world. Ample evidence exists that the Banks, emboldened by the lack of prosecutions, have re-started their engines and are indeed in the process of doing it again.

Think about it, where would a company get the money to have a multimedia advertising campaign blanketing areas of the the Country when the return on investment, according to them is only 2.5%? Between marketing, advertising, processing, and administrative costs, pus a reserve for defaults, they are either running a going out of business strategy or there is something else at work.

And if the transactions were legitimate why do the numbers of foreclosures drop like stones in those states that require proof of payment, proof of loss, and proof of ownership? why have we not seen a single canceled check or wire transfer receipt that corroborates the spin from Wall Street? Where is the real money in this scheme?

James Surowiecki: Why Is Insider Trading on the Rise?
http://www.newyorker.com/talk/financial/2013/06/10/130610ta_talk_surowiecki

FROM OTHER MEDIA SOURCES —-

Foreclosure Victims Protesting Wall Street Impunity Outside DOJ Arrested, Tasered
http://www.truth-out.org/news/item/16527-victims-of-foreclosure-arrested-tasered-protesting-wall-street-impunity-outside-doj

Watch out. The mortgage securities market is at it again.
http://money.cnn.com/2013/05/23/news/economy/mortgage-backed-securities.pr.fortune/

Wall Street Lobbyists Literally Writing Bills In Congress
http://news.firedoglake.com/2013/05/27/wall-street-lobbyists-literally-writing-bills-in-congress/

Time to Put the Heat on the Fed and FDIC to Fix Lousy Governance at TBTF Banks
http://www.nakedcapitalism.com/2013/05/so-if-shareholders-wont-rein-in-jamie-dimon-time-to-put-the-heat-on-the-fed-and-fdic.html

West Sacramento homeowner uses new state law to stop foreclosure
http://www.sacbee.com/2013/05/23/5441875/west-sacramento-homeowner-uses.html

The Foreclosure Fraud Prevention Act: A.G. Schneiderman Commends Assembly for Passing Foreclosure Relief Bills
http://4closurefraud.org/2013/05/23/the-foreclosure-fraud-prevention-act-a-g-schneiderman-commends-assembly-for-passing-foreclosure-relief-bills/

Where did the California foreclosures go? Level of foreclosures sales dramatically down. Foreclosure legislation and bank processing. Subsidizing investor purchases via HAFA.
http://www.doctorhousingbubble.com/california-foreclosure-process-hafa-program-subsidize-investor-purchases/

Wasted wealth – The ongoing foreclosure crisis that never had to happen – The Hill’s Congress Blog
http://thehill.com/blogs/congress-blog/economy-a-budget/301415-wasted-wealth–the-ongoing-foreclosure-crisis-that-never-had-to-happen

Oregon Foreclosure Avoidance Program gets tuneup
http://www.oregonlive.com/opinion/index.ssf/2013/05/oregon_foreclosure_avoidance_p.html

12 QUESTIONS THAT COULD END THE CASE

http://dtc-systems.net/2013/05/top-democrats-introduce-legislation-protect-military-families-foreclosure/

CALL OR WRITE TO FLORIDA GOVERNOR — THE CLOCK IS TICKING

Veto Clock Ticking on Florida Foreclosure Bill HB 87
http://4closurefraud.org/2013/05/30/veto-clock-ticking-on-florida-foreclosure-bill-hb-87/

DISCOVERY TIP: Has anyone asked for a received the actual agreement between the party designated as “lender” and MERS? Please send to neilfgarfield@hotmail.com.

Questions for interrogatory and request to produce, possible request for admissions:

(1) If we accept the proffer from opposing counsel that the transaction (i.e, the loan) was done for the express purpose of fulfilling an obligation to investors for backing mortgage bonds through a REMIC asset pool, then why was MERS necessary?

(2) Why wasn’t The asset pool disclosed to the borrower?

(3) Why wasn’t the asset pool made the payee on the promissory note at origination of the loan?

(4) Why wasn’t the asset pool shown on a recorded assignment immediately after closing as the new payee and secured party?

(5) What was the business purpose of using MERS?

(6) Was the lender the source of funding on the loan or was it too just another nominee?

(7) Is there any identified real party in interest on the note and mortgage as the creditor?

(8) If there is no real party in interest on the note and mortgage, then how can the mortgage be considered perfected when nobody has notice of who they can go to for a satisfaction or release or rescission of the mortgage?

(9) In which document and what provision are the parties at the loan “closing” empowered to identify a party other than the source of funds as the payee and secured party?

(10) Who were the parties to the loan? — (a) the borrower and the source of funds or (b) the borrower and the holder of paper documenting a transaction that is incomplete (the payee and secured party never fulfilled their obligation to fund the loan)?

(11)If the servicer’s scope of employment, authority or apparent authority was limited to tracking the payments of the borrower only, and did not include accounting for the creditor, then how does the servicer know what is contained in the creditor’s accounting records? — Since the creditor in any loan subject to claims of securitization received a bond whose indenture provided repayment terms different than those terms signed by the borrower to another party entirely, how can any finding of money damages be determined by any court without a full accounting for all transactions relating to the loan?

(12) What is the identity of the party who was injured by the refusal of the borrower to make any further payments? To what extent were they injured? Are they qualified to submit a “credit bid” or must they pay cash for the property at auction? If they are not qualified to submit a credit bid then (see below) then under what legal theory should they be permitted to foreclose or for that matter seek any collection? Are these intermediary parties violating the FDCPA because they are neither the creditor nor the agent of the creditor and yet demanding payment for themselves?

THE COURTS ARE STARTING TO GET THE POINT:

FLORIDA 5th DCA: To establish standing to foreclose, Plaintiff must show that it acquired the right to enforce the note before it filed suit to foreclose. Important: the right to enforce the note means either they were the injured party or they represent the injured party. An assignment from a party who is proffered to be the injured party must be established with proper foundation from a competent witness.

GREEN V CHASE 4-5-2013

————-

FLORIDA 4TH DCA: DATES MATTER: While the note introduced had a blank endorsement (note conflict with PSA, which is supposedly source of authority to represent creditor: note may not be endorsed in blank and in fact must be endorsed and assigned in recordable form and recorded where the law allows or requires it) and was sufficient [under normal rules governing commercial transactions --- except if the parties agree otherwise which they certainly did in the PSA) to prove ownership by appellee, who possessed the note, nothing in the record (e.s) shows that the note was endorsed prior to filing of the complaint (or if you want to use this decision by analogy prior to initiation of the notice of default and notice of sale in non-judicial states). The endorsement did not cotnain a date, nor did the affidavit filed in support of the motion for summary judgment contain any sworn statement that the note was owned by the Plaintiff on the date that the suit was filed. [PRACTICE TIP: THEY DON'T WANT TO GIVE A DATE BECAUSE THAT WILL LEAD TO YOU ASKING FOR DETAILS OF THE TRANSACTION, PROOF OF PAYMENT, THE ASSIGNMENT AND WHETHER THE TRANSACTION CONFORMED TO THE PSA, NONE OF WHICH WILL BE PRODUCED. But  considering past behavior it is highly probable that they will fabricate documents that ALMOST give you a copy of the canceled check or wire transfer receipt but don't quite get them to the finish line. Being aggressive on this point will clearly  put them on the defensive].

4th DCA Cromarty v Wells Fargo 4-17-2013

2d DCA: IS THE TRANSACTION GOVERNED BY THE UCC PROVISIONS EVEN IF THE PARTIES HAVE AGREED OTHERWISE? This is the nub of the issue in the Stone case (link below). We think that the courts are confused i applying ordinary rules from the UCC regarding the negotiation of commercial instruments and certainly we understand why — the UCC is the basis upon which we can conducted trusted business transaction and maintain liquidity in the marketplace. But if the party attempting to foreclose derives its powers from the Prospectus, PSA,or purchase and Assumption Agreement, then they cannot invoke the powers in those instruments on the one hand and disregard the provisions that prohibit blank endorsements of loans of dubious quality without an assignment that can only be accepted by the supposed creditor if it complies with the assignment provisions of the agreement under which the foreclosing party is claiming to have authority to enforce the note and mortgage. And this is precisely the risk and consequences of a lawyer not understanding claims of securitization and the reality of what the UCC means when it says things like “unless otherwise agreed” and “for value.” Without raising those issues on the record, the homeowner was doomed:

Stone v BankUnited May 3 2013

OCC: 13 Questions to Answer Before Foreclosure and Eviction

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

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.

Kickbacks at Fannie, Freddie Explain a Lot

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

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 COMMENT AND ANALYSIS:  The criminality of the Wall Street banks for the last 15 years has been so widespread and pervasive that it is difficult to imagine a scenario under which such behavior could have gone undetected.  The questions are unending. One particular answer to those questions stands out far above all the other possible answers, to wit: the actions of Wall Street did not go undetected.

The banks and Wall Street in general practically invented the process of due diligence, which is an examination of a proposed deal to determine whether the representations of each side are true, exaggerated or just plain false.

The government-sponsored entities of Fannie and Freddie clearly had the resources to perform extensive due diligence before they put their stamp of approval and guarantee on loans and investments that were clearly not originated or issued in accordance with government guidelines or industry standards.

The same thing may be said for the rating agencies that “got it wrong” or the insurers who presumably evaluated the risk that they were undertaking, and of course the counterparties to the hedge products including but not limited to credit default swaps.

The Wall Street Journal published a number of articles about the close relationship and economic pressure existing between the banks that were underwriting the bogus mortgage bonds and the rating agencies, insurance companies, and counterparties to credit default swaps.  these articles in the Wall Street Journal and other periodicals in mainstream media started back in 2007.

Similar articles appeared in the blogosphere  before that time warning of the coming catastrophe. Anyone with a background similar to mine on Wall Street could easily see that the underwriting of loans to consumers (especially mortgage loans) did not and could not conform to any known standards for risk assessment.

Why would a bank loan money in the knowledge (and indeed the hope) that the money would never be repaid? Why did government-sponsored entities, insurance companies, rating agencies, securities regulators, and counterparties to exotic hedge instruments turn their heads the other way, with full knowledge of the impending disaster? The answer is as old and simple as the history of commerce —  kickbacks, payoffs, bribes and promises of lucrative employment.

The Wall Street Journal told the stories where individuals working for rating agencies and insurance companies were taken on fishing trips and other junkets following which they received threats from the Wall Street banks that if the rating and insurance contracts were not to the liking of the Wall Street banks, the banks would go elsewhere.

Considering the creation of such entities as mortgage electronic registration systems (MERS)  and the financial strength of the banks, it was easy to see that if the banks didn’t get what they want from existing rating agencies and insurance companies they would create their own. Thus in addition to direct payoffs to individuals the management of old established institutions was put under pressure to play ball with Wall Street or go out of business.

The same playbook was used with appraisers who were promised higher fees if they continue to raise the stated value of the real property as they were instructed to do. In 2005 8000 appraisers warned Congress that this would happen. They were ignored. All the information that was needed for due diligence was easily accessible to the institutions that ignored red flags and eventually became part of the largest case of criminal fraud in human history.

If you look at the history of organized crime in this country you will see substantial similarities between the crime syndicates and the behavior of Wall Street. Payoffs and kickbacks to law enforcement, agencies, government officials, and legislators in the governing body of states and Congress became the ultimate protection and immunity from prosecution regardless of the severity of the crime or the damage caused to society.

While it is true that most such syndicates and eventually fail we cannot wait for time to run its course. That is why the demonstrations by occupy Wall Street and others are so important to bring pressure on those who are protecting multinational banks and the people who run them. It is not going to be easy because the amount of money is staggering. Trillions of dollars have been siphoned out of our own economy and the economy of dozens of other countries. With that kind of money you can pay off a lot of people with more money than they ever dreamed of having.

So it should come as no surprise that a “foreclosure specialist” at Fannie Mae was caught picking up $11,200 in cash in a sting operation. The problem here is that we are catching the smallest fish in the pond instead of removing those who control the action. It is interesting that the case reported below involved steering foreclosure listings to particular brokers. By focusing attention on activities far from the core of evil emanating from Wall Street many of us are distracted from looking at the real cause and the real problem not only still exists, but is being renewed as we speak in new schemes not very different from the old schemes.

The arrogance of Wall Street is either well-founded or stupid. At the present time it appears to be well founded. It remains to be seen whether we the people force our representatives, regulators and law enforcement to reject the carrot and stick from Wall Street and return to a nation of laws.

Kickbacks as ‘a natural part of business’ at Fannie Mae alleged
http://www.latimes.com/business/la-fi-fannie-mae-kickbacks-20130525,0,6280041.story

Banks Hedging Their Bets on Wrongful Foreclosures

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

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.

The need for continuing pressure on state and federal legislators who are relentlessly pursued by Bank lobbyists has never been greater.  Anyone who cares about the state of our economy and the state of our justice system needs to be writing and calling state and federal legislators as well as state and federal agencies to oppose these naked attempts to seal the deal against the homeowners.

Anyone who thinks that our falling bridges and decaying infrastructure is going to be fixed without fixing housing is dreaming. Both the tax revenue and the potential for private investment are severely diminished by the failure of this government and governments around the world to take actual control of the situation, return wealth to those from whom wealth was stolen, and recover taxes from those who have failed to report and pay taxes on transactions that were conducted in the United States but never reported in any detail as to the method utilized to create “off balance sheet” and “offshore” transactions.

Michigan homeowners in foreclosure would have less time to save, sell home under new proposal
http://www.mlive.com/politics/index.ssf/2013/05/michigan_homeowners_in_foreclo.html

In Michigan the proposal put forth by the banks would extend the time that borrowers could contest an impending foreclosure but shorten the time that borrowers could attack a wrongful foreclosure seeking monetary damages or to overturn the fraudulent auction sale awarded to a party who submitted a credit bid but who was not a creditor.  It is a tacit admission by the banks that they are doing well before a foreclosure judgment is entered but they are afraid of the consequences after the sale.

The fact that they were not a creditor obviously also brings in the issues of jurisdictional standing and whether they have any potential rights to initiate foreclosure. The confusion here is closed by rulings in many states which seem to indicate that almost anyone can initiate a foreclosure proceeding. The mistake made by both pro se litigants and attorneys for homeowners is that they concede the rest of the case once a decision is made that a non-creditor can initiate foreclosure proceedings.

In the initial phase of litigation those early motions will obviously have an effect on the momentum of the case in favor of either the banks or the borrowers. But the fact remains that if the party initiating the foreclosure was doing so in a representative capacity, or if they were doing so in their own name lacking any history or facts supporting their assertions of being a “holder” then the point needs to be made to the court that there is no creditor based upon any evidence in the court record who can submit a credit bid.

The court is presented then with the choice of either dismissing the case because of lack of jurisdiction over the subject matter and potentially lack of jurisdiction over the parties or entering a final order or judgment allowing the foreclosure to proceed but stipulating that the party conducting the auction may not accept a credit bid  in the absence of uncontested proof of payment, proof of loss and proof of ownership of the loan receivable. This step has less far been ignored in nearly all cases of foreclosure litigation throughout the country. It is time to invoke it.

The initiative in Michigan reflects the tacit admission of the banks that while they can still easily prevail in pre-judgment motions, they are highly vulnerable to enormous liabilities after the sale of the property at auction or at a closing table. The fact remains that they must show a canceled check, wire transfer receipts, ACH confirmation or check 21 confirmation in order to establish the loss;  in addition, they must show the same facts for each and every predecessor in the alleged securitization chain which we already know has been falsely presented.

 By hammering on the money trail, you will be educating the judge as to the difference between the actual transactions in which money was exchanged or in which consideration was exchanged and the paper  documents that refer to transactions which never actually occurred. Each transaction requires, for enforcement, and offer, acceptance and consideration. If you closely examine the documents used by the banks in the falsely presented securitization chain you might find an offer but you probably won’t find acceptance and you definitely won’t find consideration. The same holds true in the origination of the loan wherein the designated payee and secured party had nothing to do with the funding of the original loan. It is all smoke and mirrors.

The point needs to be made that if the judge is all fired up about whether or not the borrower made payments that the attorney representing the homeowner agrees that payments are an important issue which is why he is requiring the other side to present proof of their payments to creditors and their receipt of payments from parties other than the borrower. Your argument is obviously that either payments matter where they don’t. It should be pointed out to the judge that a double standard is being applied if the borrower’s payments are at issue but the so-called lenders’ payments and receipts are out of bounds. The point should also be made that rather than arguing about it, if there was no defect in the money trail and if there was therefore complete compliance between the money trail in the document trail, the party initiating foreclosure should be more than anxious to display the canceled check and end the debate.

JPMorgan exposed: Company found guilty of masterminding ‘manipulative schemes’
http://www.naturalnews.com/040481_JP_Morgan_Jamie_Dimon_too_big_to_fail.html

Wasted wealth – The ongoing foreclosure crisis that never had to happen – The Hill’s Congress Blog
http://thehill.com/blogs/congress-blog/economy-a-budget/301415-wasted-wealth–the-ongoing-foreclosure-crisis-that-never-had-to-happen

Negative Home Equity Still Plagues 13 Million Mortgage Loans
http://247wallst.com/2013/05/23/negative-home-equity-still-plagues-13-million-mortgage-loans/

Jon Stewart Tears Apart Obama, DOJ For Prosecuting Whistleblowers And Potheads But Not Bankers
http://www.mediaite.com/tv/jon-stewart-tears-apart-obama-doj-for-prosecuting-whistleblowers-and-potheads-but-not-bankers/

How Many People Have Lost Their Homes? US Home Foreclosures are Comparable to the Great Depression
http://www.globalresearch.ca/how-many-people-have-lost-their-homes-us-home-foreclosures-are-comparable-to-the-great-depression/5335430

As Of This Moment Ben Bernanke Own 30.5% Of The US Treasury Market… And Will Own All By 2018
http://www.zerohedge.com/news/2013-05-23/moment-ben-bernanke-own-305-us-treasury-market-and-will-own-all-2018

Fannie and Freddie Ignore Homeowners in Detroit

LAW FIRM OFFERS CONTINGENCY ON SOME CASES

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 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.

————————————-

In the upside down world of the foreclosure of mortgages that are neither in default nor owned by the parties initiating foreclosure, and where applications for modification are submitted that clearly exceed federal standards for approval (and are denied)  and should come as no surprise that the government sponsored entities, Fannie and Freddie, canceled their appearance at a Metro Detroit foreclosure hearing which they had scheduled.

These are essentially federal agencies. Their first duty is to serve the country and its citizens. But they canceled their appearance because of pending litigation against them. Here was an opportunity for them to understand the impact of foreclosure on families, businesses, investors and the government. Here was an opportunity for them to utilize information provided to them by people on the ground to fashion remedies that are appropriate and legal.

This is all part of state and federal government policy to sweep the mortgage tragedies under the rug. Despite the fact that we know that most of the foreclosures that have already been deemed completed were in fact illegal, we have had millions of “auction sales” in which strangers to the transaction were awarded title to the house without ever having made a single payment of any amount of money to originate or acquire the loan that was allegedly in default but which was fatally defective and certainly not in default  despite the illusions created by Wall Street banks.

I am leading the charge on this one. It is my intention to file suit against the Wall Street banks who have accepted monthly payments, short sale payments, and full payments on loans that were subject to claims of securitization. In fact, my law firm is offering to represent homeowners who lost or sold their homes on a contingency fee, as long as only economic damages are sought. It is my goal to show payments to the sub servicer or anyone else in the false securitization chain should never have been made and were never due. It is my opinion that these payments are owed back to the homeowner in all events, together with interest, costs of the court action, and attorney fees where those are provided by statute or contract.  Each case will be evaluated as to viability utilizing this strategy.

If Bank of America or any other bank responds to an estoppel letter for payoff or short sale without knowing or showing that they have paid for the origination or acquisition of the loan, then they have no business providing the estoppel information or approving or denying a request for a short sale. Their acceptance of the money at closing and their execution of a satisfaction of mortgage or release and reconveyance is a sham. In the absence of any other creditor demanding payment and showing that they are in fact a true creditor (having paid actual money for the origination or acquisition of the loan), proceeds of all such closings should, in my opinion, go to the homeowner. If the bank got the money, it is my opinion that the bank should be sued for recovery of the entire proceeds of the closing.

Each of those closings described above represents a gift to the banks and a horror show for the homeowner and many attorneys for homeowners. The spin machine for the banks has created the illusion that homeowners are seeking a free home when in fact it is the banks that are seeking and getting free money and free homes. In auction sales where the banks are submitting a credit bid, they do not qualify as a creditor who can submit a credit bid. But the credit bid is accepted anyway and the bank gets the house for free despite the fact that the bank has no status as a creditor or even the authorized representative of a creditor.

Fannie and Freddie are colluding with the banks and the federal reserve  to maintain the illusion that the notes and mortgages are in proper form, were properly executed, and contain true representations concerning the real parties in interest. Many theories have been advanced as to why the Federal Reserve and other agencies are colluding with the banks. I think the reason is because many layers of policies are based upon the false assumption that the origination of the loans complied with existing laws, rules and regulations. The federal reserve and other federal agencies would look pretty stupid if they had paid or advanced trillions of dollars for worthless notes and mortgages and worthless mortgage bonds.

It is highly probable that the reason why the real lenders (investors) have not pursued loss mitigation with homeowners directly is that they know the note and mortgage is unenforceable and they have said so in their lawsuits against the investment banks that sold them the bogus mortgage bonds. What they don’t fully appreciate is the fact that most homeowners would willingly give them a valid mortgage and note based upon the reality of the current market. But the intermediaries (servicers) are doing everything possible to prevent modification or successful mediation of claims; which of course results from those intermediaries falsely claiming to be owners of loans that were funded by investors and falsely claiming losses on those loans that were paid by insurance and credit defaults swaps. Those intermediaries are the leading Wall Street banks in this mortgage mess. As long as we include them in the process of resolving the mortgage meltdown, the problems will be compounded rather than cured.

http://www.huffingtonpost.com/2013/05/18/detroit-foreclosure-hearing-fannie-mae-freddie-mac_n_3293854.html

Fed Pours Huge Sums Into Foreign Bank Coffers
http://www.ritholtz.com/blog/2013/05/fed-pours-huge-sums-into-foreign-bank-coffers/

Nearly half of all US homeowners with a mortgage still ‘underwater’ in Q1
http://www.inman.com/2013/05/22/nearly-half-of-all-us-homeowners-with-a-mortgage-still-underwater-in-q1/

Foreclosure Victims Protesting Wall Street Impunity Outside DOJ Arrested, Tasered
http://www.truth-out.org/news/item/16527-victims-of-foreclosure-arrested-tasered-protesting-wall-street-impunity-outside-doj

Foreclosure Fraud Failures Come To A Head In Justice Dept. Protest
http://jdeanicite.typepad.com/i_cite/2013/05/foreclosure-fraud-failures-come-to-a-head-in-justice-dept-protest.html

Bank of America Zombie Foreclosure Protest (VIDEO)
http://4closurefraud.org/2013/05/22/bank-of-america-zombie-foreclosure-protest-video/

This is what it looks like when foreclosure fighters demand Wall Street criminals be prosecuted
http://www.youtube.com/watch?v=zvwaFJdr13Q

Chasing The Shadow Of Money
http://zerohedge.blogspot.ca/2009/05/chasing-shadow-of-money.html

OCC: 13 Questions to Answer Before Foreclosure and Eviction

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

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 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. If you are in need of his services he has asked that you call  our customer service number so that your call can be logged in. He does not maintain a call center. 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.

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