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.

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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

Chris Hayes: “ALL IN” Keeps the Mortgage Scandal in the Public Eye

Death by foreclosure: This week’s real scandal. See Chris’ report on Death by Foreclosure and then his interview with group in Boston that is coming up with creative solutions:
http://video.msnbc.msn.com/all-in-/51923455 — you can just wait through the commercials to see the interview or click the link below:

See Chris Hayes on ALL IN: Death by Foreclosure

There are only two suggestions I would make to Chris and those who are seeking to provide creative remedies like the Boston Group he interviewed:

1. Do not assume that Wells Fargo owned the loan of the man who died in the courtroom. The odds are, especially since it was a high risk “pick-a-payment” loan, it was securitized — or more correctly stated subject to false claims of securitization, wherein Wells Fargo never had the risk of loss on the loan, because they were using the money of pension funds and other investors. Wells has a history of denying securitization and then admitting it later on in litigation — something which has led to them being cited for contempt of court.

2. The group that is buying the homes through short sales and then selling them back to the homeowner at fair market value is doing a good thing with a good business model. But I would suggest that they get more aggressive with their efforts and demand proof of payment and proof of loss before they make a payment to a bank or other entity that is more than willing to accept the money and execute a satisfaction or release, but who doesn’t have any money in the deal, thus leaving the actual creditor out in the cold in an undisclosed transaction.

I would suggest going into select cases that are in court with financing plans like the hedge fund I am organizing, and disclose that you are willing to refinance 100% of the mortgage with the party seeking foreclosure IF they can come up with a canceled check, wire transfer receipt etc. showing that they are indeed the creditor and that the chain of money  leads and ends to and with them.

If you select your cases properly, the outcome will be that they can’t do it even if the Judge orders them to do it. They will then try to salvage the situation  by making offers which you should refuse because they are in no position to offer anything. This in turn will hopefully lead the Judge to dismiss the foreclosure with prejudice and enter an order declaring the rights of the stakeholders (quiet title).

Under prior agreement with the homeowner, the fund actually loans some money to the homeowner for payment of attorney fees and other expenses and the homeowner executes a mortgage in favor of the fund for an amount that is 75% of fair market value, fixed interest, 30 years, self amortizing — in another words a traditional mortgage.

The mortgage received by the fund is quite a bit more than the amount of the loan funded but pays off the fees and other expenses and risk undertaken by the fund. It also leaves the homeowner with a completely affordable mortgage with equity restored in his home. And it provides the fund with capital to do it again and again, using either the existing plan of short-sales or calling the bluff of the foreclosing party who at least 80% of the time is just playing games aiming for a free house.

The reaction of the party foreclosing is going to be interesting, because the goal is the foreclosure sale and not necessarily getting the house — as they often abandon the home after the foreclosure sale let it get bull-dozed.

They will be forced into the position of arguing against getting paid and demanding that the foreclosure proceed! Why, because the backlash from their previous actions is going to bite them very hard — they might owe the insurers and credit default swap counterparties a truckload of money if those homes don’t go into foreclosure as assumed, and the value is pegged as low as possible — thus maximizing their apparent loss and justifying the maximum recovery of insurance and credit default swap proceeds.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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 AND PRACTICE SUGGESTIONS: The approach taken by federal agencies and law enforcement with respect to illegal behavior on the part of the Wall Street banks and their affiliates, subsidiaries and co-venturers has basically been a collection of smoke and mirrors designed to create the illusion that the problems are being fixed. In fact the reality is that the problems are being swept under the rug leaving the economy, the middle class, and the title records of nearly all real estate transactions in shambles.

The temporary hold on foreclosure actions is the result of further scrutiny by federal agencies and law enforcement AND  the growing trend of lawyers for homeowners citing the consent orders in their  denials, defenses, and counterclaims.

The problems are obvious. We start off with the fact that  the notes and mortgages would ordinarily be considered unenforceable, illegal and possibly criminal. Then we have these consent decrees  in which administrative agencies and law enforcement agencies have found the behavior of the parties in the paper securitization trail to a violated numerous laws, rules and regulations. The consent decrees and settlements signed by virtually all of the players in the paper securitization chain require them to take action to correct wrongful foreclosures. Of course we all knew that  they would do nothing of the kind, since the result would be an enormous fiscal stimulus to the economy and restoration of wealth to the middle class at the expense of the banks who stole the money in the first place.

You can take it from the express wording as well as the obvious intention in the consent orders and settlements that most of the prior foreclosures were wrongful and then it would be wrongful to proceed with any further foreclosures without correcting or curing the problems caused by wrongful foreclosure on unenforceable notes and mortgages that are not owned by the originator of the alleged loan or any successor thereto. The further problem for them is that none of them were ever a creditor in the loan transaction.

There can be little doubt now that the principal intermediary was the investment bank that received deposits from investors under false pretenses.  There is no indication that the deposits from investors were ever credited to any trust or special purpose vehicle. Therefore  there can be no doubt that the alleged trust could have ever entered into a transaction in which it paid for the ownership of a debt, note or mortgage. It’s obvious that they are owed nothing from borrowers through that false paper chain and that there obviously could be no default with respect to the alleged trust or any of its predecessors or successors. Therefore the mortgage bonds supposedly issued by the trust were empty with respect to any mortgages that supposedly backed the bonds.

By the application of simple logic and following the actual money trail from the investors down to the borrowers, it is obvious that the investors were tricked into making a loan without documentation or security. This is why the megabanks and all of their affiliates and associates have taken such great pains to make sure that the investors and the borrowers don’t get together to compare notes. Most of the notes signed by borrowers would not have been acceptable to the investors even if the investors were named on the promissory note and mortgage. And both the investors and the borrowers would have been curious about all of the money taken out of the funds advanced by investors as undisclosed compensation in the making of the loan.

 So the banks are facing a major liability problem as well as an accounting problem. The accounting problem is that they are carrying  mortgage bonds and hedge products on their books as assets when they should be carried as liabilities.

The liability problem is horrendous. Most of the money taken from investors was taken under false pretenses. In most cases a receiver would be appointed and the investors would claw back as much as possible to achieve restitution.

This is further complicated by the fact that the homeowners are entitled to restitution as well as damages, treble damages and attorneys fees for all of the undisclosed compensation. This is why the banks want foreclosure and not modification or settlements. They need the foreclosure to complete the illusion that the alleged trust or special purpose vehicle was the proper owner of the debt, note and mortgage despite the fact that the trust neither paid for it nor accepted the assignment.

Thus  lawyers are now directing their discovery requests to the methods utilized by the banks and their affiliates to determine whether a particular foreclosure was wrongful and if so to determine the required corrective action.  It is perhaps the most appropriate question to ask and the most relevant as well.

The required corrective action should be the return of the home to the homeowner. That is what  would ordinarily happen if the scale of the problem was not so huge.

But the law does not favor that approach when applied by judges, lawyers, homeowners, legislators and law enforcement.  Instead, investors and homeowners alike are stuck in a web of politics instead of the application of black letter law that has existed for centuries.  As a result the government response has been tepid at best misleading virtually everyone with so-called settlements that work out to be a fraction of a cent on each dollar  that was stolen by the banks and a fraction of a cent on each dollar representing the value of homes that were taken in illegal foreclosures.

Fortunately none of these consent orders or settlements bar individual actions by homeowners against the appropriate parties. Below are the links to consent orders that may apply to your case — even where the Plaintiff or party initiating foreclosure sales is NOT named as one of these. One or more of them is usually somewhere in the so-called securitization chain. Hat tip to 4closurefraud.org.

Links to the OCC and former OTS Enforcement Actions (Issued April 2011):

 

• Consent Order for Aurora Bank, FSB (PDF)
• Consent Order for Bank of America (PDF)
• Consent Order for Citibank (PDF)
• Consent Orders for EverBank and EverBank Financial Corp. (PDF)
• Consent Order for HSBC Bank (PDF)
• Consent Order for JPMorgan Chase Bank, N.A. (PDF)
• Consent Order for LPS; DocX, LLC; and LPD Default Solutions, Inc. (PDF)
• Consent Order for MetLife Bank, N.A. (PDF)
• Consent Order for MERSCORP and Mortgage Electronic Registration Systems, Inc. (MERS) (PDF)
• Consent Orders for OneWest Bank, FSB and IMB HoldCo LLC (PDF)
• Consent Order for PNC Bank, N.A. (PDF)
• Consent Order for Sovereign Bank (PDF)
• Consent Order for U.S. Bank National Association, U.S. Bank National Association ND (PDF)
• Consent Order for Wells Fargo Bank, N.A. (PDF)

 

Links to Enforcement Action Amendments for Servicers Entering the Independent Foreclosure Review Payment Agreement (Issued February 2013):

 

• Consent Order Amendment for Aurora Bank, FSB (PDF)
• Consent Order Amendment for Bank of America (PDF)
• Consent Order Amendment for Citibank (PDF)
• Consent Order Amendment for HSBC Bank (PDF)
• Consent Order Amendment for JPMorgan Chase Bank, N.A. (PDF)
• Consent Order Amendment for MetLife Bank, N.A. (PDF)
• Consent Order Amendment for PNC Bank, N.A. (PDF)
• Consent Order Amendment for Sovereign Bank (PDF)
• Consent Order Amendment for U.S. Bank National Association, U.S. Bank National Association ND (PDF)
• Consent Order Amendment for Wells Fargo Bank, N.A. (PDF)

 

Wells, Citi Halt Most Foreclosure Sales as OCC Ratchets Up Scrutiny
http://www.americanbanker.com/issues/178_96/wells-citi-halt-most-foreclosure-sales-as-occ-ratchets-up-scrutiny-1059224-1.html

Thousands of Days Late, Billions of Dollars Short: OCC
http://4closurefraud.org/2013/05/18/thousands-of-days-late-billions-of-dollars-short-occ-correcting-foreclosure-practices/

US BANK: Lawsuit to Take Aurora Woman’s House is Guaranteed
http://4closurefraud.org/2013/05/17/us-bank-lawsuit-to-take-aurora-womans-house-is-guaranteed/

Short sales routinely show up in credit reports as foreclosures
http://www.latimes.com/business/realestate/la-fi-harney-20130519,0,111610.story {EDITOR’S NOTE: SEND OBJECTION TO CREDIT REPORTING AGENCIES}

 

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

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

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

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

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

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

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

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

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

CONVERSION OF PROMISSORY NOTE TO MORTGAGE BOND WITHOUT NOTICE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Wells Fargo Wrongful Foreclosure Kills Elderly Homeowner?

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

“The administrator of the estate of Larry Delassus sued Wells Fargo, Wachovia Bank, First American Corp. and others in Superior Court, for wrongful death, elder abuse, breach of contract and other charges.

Delassus died at 62 of heart disease after Wells Fargo mistakenly held him liable for his neighbor’s property taxes, doubled his mortgage payments, declared his loan in default and sold his Hermosa Beach condominium, according to the complaint.”

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

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

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

Editor’s Comment and Analysis: There are two reasons why I continue this blog and my return to the practice of law despite my commitment to retirement. The general reason is that I wish to contribute as much as I can to the development of the body of law that can be applied to large-scale economic fraud that threatens the fabric of our society. The specific reason for my involvement is exemplified in this story which results in the unfortunate death of a 62-year-old man. I have not reported it before, but I have been the recipient of several messages from people whose life has been ruined by economic distress and who then proceeded to take their own lives.  In some cases I was successful in intervening. But in most cases I was unable to do anything before they had already committed suicide.

It is my opinion that the current economic problems, and mortgage and foreclosure problems in particular, stem from an attitude that pervades corporate and government circles, to wit: that the individual citizen is irrelevant and that damage to any individual is also irrelevant and unimportant. If you view the 5 million foreclosures that have already been supposedly completed as merely a collection of irrelevant and unimportant citizens and their families then the policies of the banks on Wall Street and the politicians who are unduly influenced by those banks, becomes perfectly logical and acceptable.

I start with the premise that each individual is both relevant and important regardless of their economic status or their political status. In my opinion that is the premise of the Declaration of Independence and the United States Constitution. The wrongful foreclosure by strangers to the transaction is not only illegal and probably unconstitutional, it is fundamentally wrong in that it is founded on the arrogance of the ruling class. Our country is supposed to be a nation of laws not a nation of a ruling class.

If you start with the premise that the Wall Street banks want and need as many foreclosures as possible to complete transactions in which they received the benefit of insurance proceeds and proceeds of head products like credit default swaps, then you can see that these “mistakes”  are in actuality intentional acts intended to drive out legitimate homeowners from their homes. These actions are performed without any concern for the legality of their actions, the total lack of merit of their claims, or the morality and ethics that we should be able to see in economic institutions that have been deemed too big to fail.

The motive behind these foreclosures and the so-called mistakes is really very simple, to wit: the banks have nothing to lose by receiving with the foreclosure but they had everything to lose by not proceeding with the foreclosure. The problem is not a lack of due diligence. The problem is an intentional avoidance of due diligence and the ability to employ the tactic of plausible deniability. Mistakes do happen. But in the past when the bank was notified that the error had occurred they would promptly rectify the situation. Now the banks ignore such notifications because any large-scale trend in settling, modifying or resolving mortgage issues such that the loan becomes classified as “performing” will result in claims by insurers and claims from counterparties in credit default swaps that the payments based upon the failure of the mortgage bonds due to mortgage defaults was fraudulently reported and therefore should be paid back to the insurer or counterparty.

In most cases the amount of money paid through various channels to the Wall Street banks was a vast multiple of the actual underlying loans they claimed were in asset pools. The truth is the asset pools probably never existed, in most cases were never funded, and thus were incapable of making a purchase of a bundle of loans without any resources to do so. These banks claim that they were and are authorized agents of the investors (pension funds) who thought they were buying mortgage bonds issued by the asset pools but in reality were merely making a deposit at the investment bank. The same banks claim that they were not and are not the authorized agents of the investors with respect to the receipt of insurance proceeds and proceeds from hedge product’s life credit default swaps. And they are getting away with it.

They are getting away with it because of the complexity of the money trail and the paper trail. This can be greatly simplified by attorneys representing homeowners immediately demanding proof of payment and proof of loss (the essential elements of proof of ownership) at the origination, assignment, endorsement or other method of acquisition of loans. In both judicial and nonjudicial states it is quite obvious that the party seeking to invoke  foreclosure proceedings avoids the third rail of basic rules and laws of contract, to wit: that the transactions which they allege occurred did not in fact occur and that there was no payment, no loss and no risk of loss to any of the parties that are said to be in the securitization chain. The securitization chain exists only as an illusion created by paperwork.

The parties who handled the money as intermediaries between the lenders and the borrowers do not appear anywhere in the paperwork allegedly supporting the existence of the securitization chain. Instead of naming the investors as the owner and payee on the note and mortgage, these intermediaries diverted the ownership of the note to controlled entities that use their apparent ownership to trade in bonds, derivatives, and hedge products as though the capital of the investment bank was at risk in the origination or acquisition of the loans and as though the capital of the investment bank was at risk in the issuance of what can only be called bogus mortgage bonds.

Toward that end, the Wall Street banks have successfully barred contact and cooperation between the actual lenders and the actual borrowers. These banks have successfully directed the attention of the courts to the fabricated paperwork of the assignments, endorsements and securitization chain. The fact that these documents contain unreliable hearsay statements about transactions that never occurred has escaped the attention and consideration of the judiciary, most lawyers, and in fact most borrowers.

It is this sleight-of-hand that has thrown off policymakers as well as the judiciary and litigants. The fact that money appeared at the time of the alleged loan closing is deemed sufficient to prove that the designated lender on the closing papers was in fact the source of the loan; but they were not the source of the funds for the loan and as the layers of paperwork were added there were no funds at all in the apparent transfer of ownership of the loan that was originated by a strawman with an undisclosed principal, thus qualifying the loan as predatory per se according to the federal truth in lending act.

The fact that the borrower in many cases ceased making payments is deemed sufficient to justify the issuance of a notice of default, a notice of sale and the actual foreclosure of the home and eviction of the homeowner. The question of whether or not any payment was due as escaped the system almost entirely.

Even if the  borrower makes all the payments demanded, the banks will nonetheless seek foreclosure to justify the receipt of insurance and credit default swap proceeds. So they manufacture excuses like failure to pay taxes, failure to pay  insurance premiums, abandonment, failure to maintain or anything else they can think of that will justify the foreclosure and a demand for money that far exceeds  any loss and without giving the borrower an opportunity to avoid foreclosure by either curing the problem for pointing out that there was no problem at all.

As I have pointed out before, the entire mortgage system was turned on its head. If you turn it back to right side up then you will see that the receipt of money by the intermediary banks is an overpayment on both the bond issued to the investor (or the debt owed to the investor) and the promissory note that was executed by the borrower on the false premise that there had been full disclosure of all parties, intermediaries and their compensation as required by the federal truth in lending act, federal reserve regulations and many state laws involving deceptive lending.

Wells Fargo will no doubt defend the action of the estate of the dead man with allegations of a pre-existing condition which would have resulted in his death in all events. The problem they have in this particular case is that the causation of the death is a little easier to prove when the death occurs in the courtroom based upon false claims, false collections, and probably a duty to refund excess payments received from insurers and counterparties to credit default swaps.

The cost of the largest economic crime in human history is very human indeed.

 

Elderly Man Allegedly Dies in Court Fighting Wells Fargo ‘Wrongful’ Foreclosure
http://www.alternet.org/economy/elderly-man-allegedly-dies-court-fighting-wells-fargo-wrongful-foreclosure

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

FOR QUALIFIED INVESTORS ONLY:

HEDGE FUND TO

CALL THE BLUFF OF PRETENDER LENDERS

LISTEN TO NEIL GARFIELD INTERVIEW ON PIGGYBANK

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

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

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

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

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

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

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

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

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

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

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

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

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

HEDGE FUND TO CALL THE BLUFF OF PRETENDER LENDERS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

II. BACKGROUND

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

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

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

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

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

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

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

III. STANDARD OF REVIEW

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

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

IV. DISCUSSION

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

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

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

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

V. CONCLUSION

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

IT IS SO ORDERED.

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

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

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

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

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

An Allonge is Not an Assignment: Do the research!

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

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

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

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

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

 

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

Seminars Corroborate Title Problems and HAMP LItigation

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

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

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

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

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

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

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

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

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

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

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

New York Getting Ready to Prosecute Banks for Violations of Settlement

At the end of the day everyone knows everything. If you start with the premise that the securitization of debt was a farce and that the necessary element of the false securitization of mortgage loans was the foreclosure of those loans, then you move one step closer to understanding the mortgage and foreclosure mess and a giant step forward to understanding and implementing a solution. All the actions, statements and myths promulgated by the Wall Street banks become clear, including their violation of every consent decree,order and settlement they ever made with respect to mortgage loans.

Attorney General Schneiderman of New York seems to understand this and he is taking the mega banks to task for violating a settlement that looks like pennies on the dollar. He doesn’t care why they violated the $26 Billion settlement but he is taking action for their consistent violation of the settlement. But I care about the reason and so should you. The reason is nothing less than the obvious: the mega banks expose themselves to liability that far exceeds the terms of the settlement.

In any normal circumstances when a big company enters into a settlement that amounts to pennies on the dollar, the company rushes to make the settlement final by paying the money and performing the actions required in the agreement. Thus they commit illegal acts and get away with it by entering into an agreement that looks big but doesn’t put them out of business. They are nothing but anxious to put the settlement behind them.

So why are the mega banks refusing to abide by a $26 billion settlement on a multi- trillion theft? The answer by pure logic and my sources is that if the banks actually performed on the material portions of the agreement they risk going out of business. Why?

The answer is arithmetic. The purpose of the settlement was to stop illegal foreclosure practices and compensate those who lost their homes in illegal Foreclosures (as opposed to simply reversing the Foreclosures and starting over again which is what any court of law would require if there was an admission that the documents and claims in foreclosure were false).

Arithmetic is the answer. Without Foreclosures, the banks cannot support their claim of failure of the mortgages. If the loans are reinstated then the “sales” of loans and mortgage bonds become immediately subject to an accounting and to payback to investors who bought empty bogus bonds issued by a trust that existed in name only. If the loans must be considered performing loans because of any of the reasons contained in those multistage settlements, consent decrees,orders and agency settlements, then the banks must reimburse the insurers, buyers and counter-parties on hedge products like credit default swaps.

Thus satisfactions the settlement agreement exposes the banks to a reduction in their tier 1, tier 2, and tier 3 capital such that the reality and empty underbelly of the banksia displayed for all to see. Those banks and are not nearly as big as they say they are and must be resolved by the FDIC because they actually do not have the minimum capital requirements that all banks must have to continue operations. That is why the Brown bill in the U.S. Senate is dead on right.

If the Foreclosures were invalid there is only one way to correct them, just like any title problem. Correct the defect In Title by reversing the foreclosure or get an affidavit from the homeowner joining in some correction of the corrupted title resulting from fake Foreclosures.

With trillions in liability at stake of course the banks are violating the settlement agreements and consent decrees. All they can do is try to control state and federal action by providing photo opportunities and planted articles around the media to make people feel good. But neither the housing market nor the economy will get the stimulus necessary for a full recovery until the truth is addressed instead of pretending you can fix this mortgage and foreclosure mess with Tiny settlements and promises that nobody intends to keep.

Wells Fargo, BofA threatened with lawsuit over mortgage allegations
http://www.bizjournals.com/dallas/blog/morning_call/2013/05/wells-fargo-bofa-threatened-with.html

Eric Schneiderman: Banks Have ‘Confidence’ That Law Enforcement Is Not Taking Violations ‘Seriously’
http://www.huffingtonpost.com/2013/05/07/eric-schneiderman-banks_n_3226992.html

Nardi Deposition Reveals All about JPM-WAMU Slick Transactions

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

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

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

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

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

Robo-Litigation: Attorney Misconduct at Foreclosure Mills

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

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

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

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

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