Livinglies’s Weblog

§ 226.15  Right of rescission. 

  (a)  Consumer’s right to rescind.  (1)(i) Except as provided in paragraph (a)(1)(ii) of this section, in a credit plan in which a security interest is or will be retained or acquired in a consumer’s principal dwelling, each consumer whose ownership interest is or will be subject to the security interest shall have the right to rescind: each credit extension made under the plan; the plan when the plan is opened; a security interest when added or increased to secure an existing plan; and the increase when a credit limit on the plan is increased. 
      (ii)  As provided in § 125(e) of the act, the consumer does not have the right to rescind each credit extension made under the plan if such extension is made in accordance with a previously established credit limit for the plan. 
    (2)  To exercise the right to rescind, the consumer shall notify the creditor of the rescission by mail, telegram, or other means of written communication. Notice is considered given when mailed, or when filed for telegraphic transmission, or, if sent by other means, when delivered to the creditor’s designated place of business. 
    (3)  The consumer may exercise the right to rescind until midnight of the third business day following the occurrence described in paragraph (a)(1) of this section that gave rise to the right of rescission, delivery of the notice required by paragraph (b) of this section, or delivery of all material disclosures, ³⁶whichever occurs last. If the required notice and material disclosures are not delivered, the right to rescind shall expire three years after the occurrence giving rise to the right of rescission, or upon transfer of all of the consumer’s interest in the property, or upon sale of the property, whichever occurs first. In the case of certain administrative proceedings, the rescission period shall be extended in accordance with § 125(f) of the act. 
    (4)  When more than one consumer has the right to rescind, the exercise of the right by one consumer shall be effective as to all consumers. 
  (b)  Notice of right to rescind.  In any transaction or occurrence subject to rescission, a creditor shall deliver two copies of the notice of the right to rescind to each consumer entitled to rescind (one copy to each if the notice is delivered in electronic form in accordance with the consumer consent and other applicable provisions of the E-Sign Act). The notice shall identify the transaction or occurrence and clearly and conspicuously disclose the following: 
    (1)  The retention or acquisition of a security interest in the consumer’s principal dwelling. 
    (2)  The consumer’s right to rescind, as described in paragraph (a)(1) of this section. 
    (3)  How to exercise the right to rescind, with a form for that purpose, designating the address of the creditor’s place of business. 
    (4)  The effects of rescission, as described in paragraph (d) of this section. 
    (5)  The date the rescission period expires. 
  (c)  Delay of creditor’s performance.  Unless a consumer waives the right to rescind under paragraph (e) of this section, no money shall be disbursed other than in escrow, no services shall be performed, and no materials delivered until after the rescission period has expired and the creditor is reasonably satisfied that the consumer has not rescinded. A creditor does not violate this section if a third party with no knowledge of the event activating the rescission right does not delay in providing materials or services, as long as the debt incurred for those materials or services is not secured by the property subject to rescission. 
{{12-31-07 p.6659}} 
  (d)  Effects of rescission.  (1)  When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void, and the consumer shall not be liable for any amount, including any finance charge. 
    (2)  Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest. 
    (3)  If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor or, where the latter would be impracticable or inequitable, tender its reasonable value. At the consumer’s option, tender of property may be made at the location of the property or at the consumer’s residence. Tender of money must be made at the creditor’s designated place of business. If the creditor does not take possession of the money or property within 20 calendar days after the consumer’s tender, the consumer may keep it without further obligation. 
    (4)  The procedures outlined in paragraphs (d)(2) and (3) of this section may be modified by court order.
  (e)  Consumer’s waiver of right to rescind.  (1)  The consumer may modify or waive the right to rescind if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency. To modify or waive the right, the consumer shall give the creditor a dated written statement that describes the emergency, specifically modifies or waives the right to rescind, and bears the signature of all the consumers entitled to rescind. Printed forms for this purpose are prohibited, except as provided in paragraph (e)(2) of this section. 
    (2) The need of the consumer to obtain funds immediately shall be regarded as a bona fide personal financial emergency provided that the dwelling securing the extension of credit is located in an area declared during June through September 1993, pursuant to 42 U.S.C. 5170, to be a major disaster area because of severe storms and flooding in the Midwest. ^36a In this instance, creditors may use printed forms for the consumer to waive the right to rescind. This exemption to paragraph (e)(1) of this section shall expire one year from the date an area was declared a major disaster. 
    (3)  The consumer’s need to obtain funds immediately shall be regarded as a bona fide personal financial emergency provided that the dwelling securing the extension of credit is located in an area declared during June through September 1994 to be a major disaster area, pursuant to 42 U.S.C. 5170, because of severe storms and flooding in the South. ^36b In this instance, creditors may use printed forms for the consumer to waive the right to rescind. This exemption to paragraph (e)(1) of this section shall expire one year from the date an area was declared a major disaster. 
    (4)  The consumer’s need to obtain funds immediately shall be regarded as a bona fide personal financial emergency provided that the dwelling securing the extension of credit is located in an area declared during October 1994 to be a major disaster area, pursuant to 42 U.S.C. 5170, because of severe storms and flooding in Texas. ^36c In this instance, creditors may use printed forms for the consumer to waive the right to rescind. This exemption to paragraph (e)(1) of this section shall expire one year from the date an area was declared a major disaster. 
  (f)  Exempt transactions.  The right to rescind does not apply to the following: 
    (1)  A residential mortgage transaction. 
    (2)  A credit plan in which a state agency is a creditor. 
{{12-31-07 p.6660}} 

[Section 226.15 amended at 54 Fed. Reg. 24688, June 9, 1989, effective June 7, 1989, but compliance is optional until November 7, 1989; 58 Fed. Reg. 40583, July 29, 1993; 59 Fed. Reg. 40204, August 5, 1994, effective July 29, 1994; 59 Fed. Reg. 63715, December 9, 1994, effective December 8, 1994; 66 Fed. Reg. 17338, March 30, 2001, effective March 30, 2001; 72 Fed. Reg. 63474, November 9, 2007, effective December 10, 2007, the mandatory compliance date is October 1, 2008] 

BEWARE OF SCAMS

As though it isn’t bad enough, we are receiving increasing numbers of reports of scams, mistakes and just plain stupidity on the part of lenders, investors who own mortgage-backed securities etc.

Like the woman who just told she is in foreclosure by Wells Fargo on a house she never closed title on. Or the “mortgage workout” specialists who specialize in taking your money and running. Like the lawyers who tell clients they know all about the Truth in Lending Act, RESPA, RICO etc., and in fact either know nothing, or worse, know just enough to really screw the client from whom they squeezed a retainer out of.

And then you have stories like this in the Cincinnati area:

Warren County and state officials want to know how a Deerfield Township man sold a multimillion-dollar Homearama house he apparently never owned.

“It is being investigated by my office and the (Ohio Attorney General) for possible fraud,” Warren County Prosecutor Rachel Hutzel said Thursday.

Francisca Webster, a Westwood resident who makes $49,000 annually, said she was tricked by a friend, Eric Duke, into putting three Warren County homes - worth millions - in her name so he could later resell them at a profit. He promised her $70,000.

• See details of the deal in the settlement statement
• See the home’s listing in Warren County property records
• See previous story: “Homeowner in over her head”

She has sued him in Hamilton County.

Now, documents reveal Duke “sold” one of those houses - 8662 Hampton Bay Place - to Patricia Stevenson for $2.5 million in a March 15 transaction.

The sale was done even though Duke doesn’t own that property. It remains in Webster’s name.

“People just don’t get how devious and conniving he is,” Webster said. “I’m really stunned.”

Duke’s attorney, Steve Wenke, refused Thursday to make his client available for questions and refused to pass messages to him. “I don’t want him to talk to anybody,” he said. Duke’s phone number isn’t published.

In a March 15 transaction, Stevenson paid Rivendale Property Management Group $271,500 in cash to buy the house for $2.5 million. Rivendale is Duke’s company and lists its address at the Hampton Bay Place house where Duke lives, which is down the street from the house sold to Stevenson.

Webster wants to know how Duke can sell a house she legally owns - but never wanted and desperately wants out of her name.

“I don’t know where we go from here,” an exasperated Webster said Thursday.

ReMax Realtor Simon Moksin said he saw nothing crooked about the deal.

“We got an attorney who represented the title company,” said Moksin, who pocketed a $60,000 commission on the deal.

Not so, said John Brandt, owner of River Valley Title Agency.

Brandt was paid $150 to sign some of the financial documents involved in the deal and act as a signatory witness, not as a representative of his title insurance company. The deal was consummated in Brandt’s Sharonville office.

Even though the documents list Patricia Stevenson as the buyer, Brandt said her husband, Mitch Stevenson, was doing the transacting.

“(Stevenson) never requested a title examination. Duke told him I did (a title search). I did not,” Brandt said Thursday.

Brandt said Mitch Stevenson called him this week to complain Duke cheated him in the deal.

“Apparently, (Mitch Stevenson) took Mr. Duke at his word,” Brandt said. “I really feel sorry for Mr. Stevenson.”

The sale involved a land contract. That is a sale where the buyer pays a monthly mortgage directly to the seller but the seller keeps the deed until all of the payments are made. If they aren’t made, the seller keeps the property and the money already paid.

That’s why there was no loan involved in the deal as is usual in home sales and that’s why there was no change in ownership in county auditor records.

“It was what we commonly call in the industry a cash closing,” Brandt said.

The Stevensons shouldn’t have to travel far to complain to Duke - he lives a house or two away.

Both of the houses were featured in Homearama, the new construction showcase, in 2005.

Efforts to reach the Stevensons were unsuccessful Thursday.

Moksin, the Realtor, would only say that Mitch Stevenson was “a businessman” when asked about his occupation.

• More Mason news. Join the discussion.

That confidence in the U.S. dollar is at an all-time low is no surprise. But when countries start propping up currencies that are barely on the radar, you know that central bankers are thinking that the U.S. government is not doing enough to shore up the fundamentals of its economy. This translates to a lack of confidence that the dollar will recover. Like the price of oil headed inexorably toward $200 per barrel, the dollar is seen headed inexorably downward. This kind of thinking leads to self-fulfilling prophecy, so it needs to be taken seriously. 

The plain fact is that we have $500 trillion in derivative securities that are treated, for the most part, as cash equivalents. In the face of a half-gig behemoth of private sector money supply, central bankers understand that their impact on monetary policy, money supply, credit, and economic growth is virtually out of reach. Like it or not, economic policy is in the hands of the private sector now.

More pretense of regulation from a corrupt government will produce less rather than more instability in the financial sector. Government is providing cover for wrongdoers rather than relief for everyone. 

The dangers are obvious. The inevitable conclusion of this paradigm shift can already be seen: a massive shift in the distribution of wealth, with its attendant death grip on government policy and action.

The role of government — to be the referee in assuring a fair playing field — has been subverted beyond recognition.

The tangible results are that millions of homes are being foreclosed, tens of millions of people are being hit with economic losses, and despite even the calls of the conservative Economist magazine for a U.S. “Federal effort to streamline the states’ convoluted foreclosure laws” nothing has emerged thus far.

We are aware and I have assisted in the writing of emergency rules of civil procedure for foreclosures from initiation of proceedings through mediation and judgment. These rules have been submitted to Nevada, Florida and Arizona thus far. The Courts are warming to the idea, but it is likely that a uniform approach will not be adopted, leaving the country in a morass of hoops to jump through before borrowers and lenders and investors can be brought to the table to put a stop to the downward slide. 

Under normal conditions, we would be the first to scream for better regulation, more enforcement and criminal prosecution arising from the massive fraud that killed the residential housing market, and severely damaged the rest of the credit markets worldwide. But we are of the opinion that this is an emergency that transcends normal government response. It is akin to the emergency of war where we are fighting for our very survival. Amnesty for every participant on the investor-lender side and on the borrower loan origination side is essential even if it gives a break to “speculators” and criminal minds that irresponsibly launched this plan to nowhere.

Only then will we demonstrate to central bankers around the world that we are serious about this crisis. Only then will they lose momentum is distancing themselves from the dollar.

LONDON (MarketWatch) - It’s official — overseas central banks stepped in Friday to prop up a beleaguered currency that’s been weighed down by an out-of-control financial sector and an economy on the rocks.

Sounds like the U.S. dollar, but actually, it’s the Iceland krona. See related story.

The central banks of Norway, Sweden and Denmark will each provide up to 500 million euros that the Central Bank of Iceland can swap for krona.

Of course, any central bank intervention to prop up the dollar would have to be done on a far larger scale than chucking in a bit more than $2 billion.

So understandably, the Bank of Japan and the European Central Bank reportedly have kept their ammunition so far to words and arm twisting. See related story.

And U.S. interest rates are just a touch lower than what’s on offer in Iceland — 2.25% compared to 15.5%.

But it’s worth noting that the intervention has worked, on the day at least - the currency is up over 4% against the euro.

If nothing else, the move by the Scandinavian central banks is a game plan that can be dusted off if the dollar really goes into meltdown mode.

– Steve Goldstein 

In this study, the authors provide an exhaustive and invaluable aid, with plenty of charts and explanations of the mortgage meltdown, sub-prime and general credit crisis. This is MUST reading for anyone who is filing securities actions and foreclosure defense. With this paper, you can understand who the players are and what they were doing. This paper is thus far more inclusive than what we have written here which is designed to give you the information in bite-sized pieces.

harvard-paper-diagrams

This is reply to a question which has been posed to us recently by several readers through email and at least one comment. We have advised demanding the alleged lender (the one suing you in foreclosure or who has scheduled the sale) allow you to inspect and provide you copies of original documents so they can prove their standing or authority to proceed — or you can assert they have no standing, no authority because they don’t have the supporting documentation, they don’t own the loan anymore, and they have no written authority to proceed along with bona fide original documentation showing the assignment.  If they do not respond or admit they don’t have the documents, the case is over, you win they lose.

By the way, they are definitely NOT going to want to show you or anyone else that assignment. It has things in it that they don’t want public. 

But what if they come back with something — just not what you asked for, like an affidavit that says the original was lost? The answer is that an affidavit which does not contain an explanation for what happened to the original and does not attach a copy of the original with a person who REALLY knows, signing the affidavit that the copy is indeed a copy of the original, it is worth nothing. You win, they lose.

An affidavit without those components is simply an admission that they don’t have it. Case over.

The explanation must be plausible and be signed by someone who REALLY knows. If such an affidavit is sent in, in all probability is signed by someone who was presented with it along with the instruction “sign this or be fired.”

• So you want to ask by interrogatory
• or bluff them with a request for admissions 
• (or take their deposition), along with a subpoena duces tecum that demands they bring with them all the original loan documents — if they have some of them, they better have a very convincing explanation of what happened tot he rest besides “we can’t find it)
• that establishes that the person who signed it didn’t work for the lender at the time of the loan closing, and/or 
• had nothing to do with the loan closing, and/or 
• never saw the alleged original, and/or if they did see it, 
• whether they are taking the blame for losing it on themselves with again, a plausible explanation.
• whether they have been disciplined or if any change in policy was published for the company at the time of the alleged discovery of the “lost document.”

Without a copy of the original, nothing matters. They don’t have it and it is extremely unlikely that will succeed in proving the “lost document” since these documents are copied all over the place. If the copy doesn’t have your signature on it, it isn’t the original. The copy you have probably doesn’t have your signature on it either. Thus they can’t prove it with their records or even yours.

In response to email from one of our readers who was presented with a “get out” notice and an offer to pay him $1,000 to do so peaceably, which was then later stated to be “negotiable (meaning they would pay more if asked), I wrote:

Sounds like you are on the right track. I am glad to hear you are still there.

If you are inclined to accept the offer, ask for more money. It can’t hurt.

Otherwise, you might want to ask for a copy of any document he has that names him as having authority to make the offer. He could be a scammer that will take the keys from you, make everything look all fine and dandy and then strip the house down right through the walls to the wiring and plumbing.

Then the lender comes in and files suit against you or worse files a criminal complaint against you for trashing the place.

While you are at it, you might want to ask for copies of the assignment or sale documents with which GMAC allegedly bought the mortgage and note. If you really press the point hard, you might get them or even better, you might not get them in which case they might back off completely, or they might negotiate something much more favorable to you.

In many cases, these purchases are not well-documented or they can’t find the documents. It is worth pushing this point.

If they don’t produce the documents you can make the allegation in your petition for BK that the liability is contingent and that your “asset” — the house is a contingent asset as well because it looks like GMAC took title under false pretenses. If things break your way you could end up with the house back and possibly without the mortgage if you announce your rescission due to failure to properly make disclosures in the TILA estimates and loan closing documents.

IN THE SUPERIOR/CIRCUIT COURT OF THE CITY OF xxxxxxxxx LOCATED AT xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx OF THE COUNTY OF xxxxxxxxxxxxx OF THE STATE OF xxxxxxxxxxxxxxxxxxxx.

Your Name  

VS

Trustee Name

1st Mortgage Name

2d Mortgage Name

VERIFIED EMERGENCY MOTION TO SET ASIDE JUDGMENT, CANCEL SALE AND DISMISS ACTION FOR FAILURE OF JURISDICTION AND LACK OF STANDING.

Comes now the defendant, YOUR NAME, Defendant in the above-styled action and move this Court to vacate and set aside the Judgment entered on the xxxx day of MONTH  2008, vacate and set aside the order dated xxxxx day of MONTH 2008 setting the sale date, and canceling the sale of the subject property and as grounds therefore says that the LENDERS/TRUSTEE committed a fraud upon the Court in that the LENDERS/TRUSTEE does not now and did not, at the time of the foreclosure, own the mortgage, the mortgage note, any security agreements, nor have the requisite power to represent the real party in interest, nor did the LENDERS/TRUSTEE allege facts in support thereof. This Emergency motion is not filed for the purposes of delay. The true facts (and consequent fraud perpetrated upon this Court by LENDERS/TRUSTEE) regarding the prior sale of the risk, servicing and ownership of the mortgage and note regarding the subject real property and alleged liability did not come to the attention of the undersigned defendant until the last few days. 

The Trustee does not have the current authority to proceed with the sale or foreclosure, nor to defend the claims of the undersigned Petitioners because of events subsequent to closing that changed both the ownership and authority of the subject note and mortgage, the authority of the Trustee to represent the interests of the real parties in interest and the lack of documentation showing that the real party in interest can be established. Trustee, the lenders, the underwriters and the presence of third party investors.”

The unique context in which this and other mortgages are being foreclosed on primary residential properties has left all affected parties in untenable positions resulting from rules which never contemplated these circumstances. None of the affected parties wish to see the subject property foreclosed, sold or the the property abandoned. All of the parties affected have it in their interest to preserve and maintain the security of the asset which is the subject of the instant action. It therefore falls within the equitable powers of the Court to order mediation, and to require people with decision-making authority to appear at said mediation prior to the consideration of the current motion or any subsequent motion.

WHEREFORE, Petitioner’s pray that this Honorable Curt will vacate the sale and/or judgment, deny any motion or petition for eviction on the grounds of lack of jurisdiction over the parties or the subject property, order mediation, refer this matter for changes in the rules of civil procedure, and grant such other and further relief as the court may deem just and proper. 

[Serve them with summons. You might have to serve the Secretary of state on Mortgage Lenders because they are foreign corporations. The court clerk will tell you the answer to that, I hope. Put the name and address of Lenders in your certification clause at the end.]

I HEREBY CERTIFY that a true and correct copy was sent by FAX and U.S. Mail to the following names, addresses and fax numbers this xxx day of xxxx(MONTH) 2008.to opposing counsel at the following number Attn: Name of Person Trustee Sale Officer. 

YOUR SIGNATURE: 

Notarize your signature

Then add a separate piece of paper that uses the same style, with no certification clause that says:

Proposed Order

This cause having come on to be heard upon emergency motion of the Petitioner and the court having reviewed the documents regarding the subject property, heard arguments regarding the motion, heard and received evidence regarding the motion, and taken judicial notice of the context of the great number of foreclosures of primary residences in the State of xxxxxxxxxxxxx, and the Court being otherwise fully advised in the premises, it is accordingly

ORDERED AND ADJUDGED:

1. This Court reserves ruling and reserves jursidiction to enter such orders on Petitioner’s motion and matters attendant to the Motion and other issues presented in this Order.

2. The sale of the subject property is stayed under further order of this Court. The sale date is hereby cancelled.

3. Petitioner is ordered to maintain the property, pay the utilities and taxes, and to provide proof of same to the Trustee every month.

4. Upon motion of the Trustee, in compliance with the legal requirements of standing, competence, and proof of facts, the Trustee may apply for hearing on motion to lift the Stay herein and reset the the sale date if the Petitioner can be shown to have failed to adequately maintain the property, reasonable wear and tear excepted, pay the utilities and taxes, or upon entry of an order by this or an appellate court vacating this Order and remanding the case for further consideration. 

5. The Trustee shall produce original documentation to the Court proving standing and authority to proceed under California statutes within ten (10) days from the date of entry of this court in the Court records. Time is of the essence. Failure of the trustee to file said documentation, including all original assignments or sales of the risk, security or debt specifically and expressly connected with this Petitioner and this Subject Property shall automatically constitute a dismissal with prejudice of the foreclosure, the sale, the eviction and any claim for past due payments from this Petitioner and shall relieve the Petitioenr from the accrual or payments for principal or interest to any party until such original documentation is produced.

6. The parties are ordered into mediation within 180 days at which the Trustee shall provide proof which maybe used in these proceedings showing the compliance or lack thereof with the applicable laws and rules of the State of California, the Federal government or any agency in connection with disclosures concerning, risk, fair market value, true cost of the loan, the true ultimate source of capital to fund the loan, and any changes in underwriting standards that were not disclosed to the Petitioner/Buyer and such documents shall also be filed with the Court at least ten (10) days prior to actual mediation. Failure of any affected party to appear at said medication shall constitute a waiver of any claim for payment, and claim for security or any other rights under the original transactions by which the loan documents were produced. The failure of any affected party to produce a person at the time and place of the mediation (which shall be set by order of the mediator) who is authorized to make a final decision regarding settlement shall constitute a non-appearance under this paragraph.

7. The mediator shall submit a written report of the agreement(s) of the parties which shall be approved and made binding by order of this Court upon proper notice and hearing of the parties. 

8. This case is hereby referred to applicable rule-making committees and agencies that are empowered to make temporary or permanent changes in the rules of civil procedure to accomodate the overload of forecloosure cases pending before the California Court system. Toward that end this Court suggests the following for consideration by said entities for temporary changes to the rules of civil procedure until the current mortgage meltdown crisis has passed:

Emergency Provisional Rules

Mortgage Foreclosures

These emergency rules of civil procedure apply to all foreclosures on all property, real or personal, initiated on or before January 1, 2007. No Judgment shall be executed, or if already executed, enforced, and no order of removal or eviction or seizure related to foreclosure shall be executed, or if already executed, enforced unless a Court of competent jurisdiction shall have executed an order finding as a matter of law and fact that the foreclosing party(ies) have complied with each and every provision contained herein.

1. Every Petition for Foreclosure and/or every action undertaken by a foreclosing party prior to seeking recovery or seizure, or occupancy of property, shall require the foreclosing party(ies) to file a verified complaint or affidavit alleging the facts supporting the claim for relief, executed by a person with actual knowledge of all facts alleged. The executing party on said verified Petition or affidavit shall affirmatively allege and actually be available for the taking of testimony by deposition or at an evidentiary hearing in the jurisdiction in which the property is located.

2. Each such Petition or Affidavit shall state the names and addresses of all parties involved in the loan transaction and shall be served under the rules governing service of process upon each of said parties as third party non-party litigants, if such parties were not the lender or borrower.

3. Each such Petition or Affidavit shall account for all funds that were passed through or to each party named in the action, the disposition thereof, and the manner and time in which the passage of said funds were dispersed, together with a citation to the mortgage documentation, including a quote of the relevant passages in the body of the Petition or Affidavit wherein said funds are disclosed and wherein said funds are authorized. 

4. Each such Petition or Affidavit shall state with particularity whether any changes occurred after the closing of the subject loan transaction in which parties or persons were changed including the names and addresses of all parties and persons related to the transactions subject to the mortgage.

5. With respect to sale or assignment or any joint or sharing arrangements concerning ownership, distribution of risk, or securitization in which the subject loan was referenced as collateral or otherwise, each such Petition shall state with particularity the details of each such transaction, the distribution or re-distribution of funds, and the documents employed by said parties after said closing.

6. Each and every such Petition or Affidavit shall affirmatively state that the foreclosing party(ies) have standing and authority to bring the action, defend counterclaims and answer affirmative defenses. The signature of the attorney on said pleading shall be mandatory and shall constitute a representation to the COURT that the filing attorney has performed proper due diligence to ascertain the truth of the allegations of legal standing and all other allegations.

7. Each such Petitioner or Affidavit shall be accompanied by attachments of the referenced documents to be included with the first service of such Petition or Affidavit.

8. Each such Petition or Affidavit shall state with particularity and specificity each disclosure made to the borrower and any third parties involved in the transaction under the Truth in Lending Act and the corresponding provision of the mortgage documents executed by the borrower which supports said disclosure.

9. Each such Petition or Affidavit shall state with particularity and specificity each disclosure made to the borrower and any third parties involved in the transaction under the Truth in Lending Act and the corresponding provision of the mortgage documents executed by the borrower which does not support said disclosure. If any allegation other than “none” is made under this paragraph, the foreclosing party(ies) shall state with specificity the law or fact upon which they should be excused from compliance.

10. Each such Petition or Affidavit shall attach a full and complete accounting of all money, value or funds transmitted, paid or or promised between all parties involved in the loan transaction before or after the loan transaction. In the event the borrower has been overcharged, undercharged, or charged correctly, the Petition or Affidavit shall so state affirmatively, providing a full accounting of said funds. 

11. No answer or response from the borrower shall be due unless and until the foreclosing party(ies) are in complete and full compliance with the provisions of these rules. Any prior answer or response may be amended by the borrower after a determination is made that the foreclosing party(ies) are in full compliance. No prior Judgement, order or other document or rule shall prevent the borrower from filing a response or answer after the foreclosing party(ies) are found to be in compliance with these rules.

12. In the event that the foreclosing party(ies) fails or refuses to comply with these rules, the foreclosure shall be barred with prejudice and until the terms of the mortgage are determined with certainty by the Court by clear and convincing evidence, no payments to the mortgagee shall be due. This provision that not apply to payment to taxing authorities. In such event of delay caused by the the foreclosing party(ies) the court may fashion such equitable remedies as the Court deems fit in its discretion. for example, the Court could apply delinquent payments to the end of the mortgage, thus extending the terms. 

13. In the event of non-compliance with these rules wherein the foreclosing party(ies) demonstrate to the Court the probability that they could amend their filing to conform to the requirements herein, the foreclosing party(ies) shall file an amended Petition or Affidavit on or before thirty (30) days from the date of the order of the Court allowing the amendment. Failure to file within said thirty period shall be grounds for a mandatory immediate dismissal with prejudice. 

14. In the event of the filing of a verified amended Petition or Affidavit, Borrower shall have ninety (90) days in which to answer or respond. Failure to answer or respond shall not relieve the burden of proof of the foreclosing party(ies) in compliance with state, local and Federal law, and in compliance with these rules.

15. The Court may grant attorney fees and costs to the prevailing party in each case where a motion or other filing occurs, wherein a determination is made in an adversary proceeding that the filing is in or out of compliance. 

16. In the event a foreclosure has already been completed and all subsequent and customary actions have occurred and no bona fide third party has taken control or occupancy of the property, these rules may applied retroactively. 

17. Once compliance has been established and the issues are joined, the Court shall enter an order requiring the parties to enter into a process of mediation. The purpose of the mediation shall be to fashion a settlement which provides relief and incentives to all affected parties, including non-party litigants. Mediation shall take place no earlier than thirty (30) days after the entry of the mediation order, and not later than is reasonably possibly given the volume of cases and the availability of competent mediators.

These rules are subject to review by the Court but are effective immediately. Comments and applications to be heard shall be available in keeping with the usual and customary methods of proposed rule changes. Said rules shall be effective unless and until stated otherwise by the Court.

DONE AND ORDERED THIS XX DAY OF XXXMONTH, 2008, IN THE CITY OF XXXX, STATE OF XXXXXXXXXXX.

________________________________

CIRCUIT/DISTRICT JUDGE

Provide self addressed stamped envelopes for the Court to use for mailing out the order to the Trustee, and the Lenders. 

Here is a strategy for one person in California whose lenders are GMAC and Countrywide. He is about one week away from sale of his property. Feel free to use what suits you.

• Keep in mind that the hyper-inflated values used by the appraiser, lender, underwriter, and mortgage broker constitute a violation, in my opinion, of the very abuse that TILA (Truth in Lending Act) was intended to stop: hiding the true cost of your loan. 
• If your house is priced at $500,000 and you agree to pay 5% interest, you are agreeing to pay $25,000 in interest. 
• But if the real fair market value was only $350,000 then the $25,000 you are paying in interest is actually 7.14% and that was NOT disclosed in TILA statement and neither was the possibility that the appraisal could be wrong.
• This means that the interest, points, costs and fees were all misrepresented and you are entitled to a full refund, which in the case below could amount to over $100,000 from the lender.

OK, first the disclaimer, since I am a licensed attorney in Florida and the United States Courts and the U.S. Bankruptcy Court. I have not conducted an interview with you, offered you legal advice, nor suggested that you rely upon my advice or use my advice or any facts I share with you without consulting competent counsel in any state or Federal Court or in connection with any communication with your GMAC lender or Countrywide second mortgage. NEEDLESS TO SAY, WITH A SALE DATE LOOMING IN THE NEXT WEEK OR SO, YOU NEED TO MOVE VERY QUICKLY.

The following is an outline of information which you should read, re-read and study from livinglies.wordpress.com. 

Feel free to lift from this email or the blogsite any verbiage that is helpful to you in the pleadings you file in State and Federal Court (Bankruptcy Court). 

As I understand it, your intention is to first file a motion which I assume will look something like the following, and that you will be hand delivering the original to the Clerk of the Court, a copy to the Judge assigned to the case along with a request for an emergency hearing, and a copy to the attorney on the opposing side — and I assume that your local rules require your signature(s) on your Emergency Motion to be Notarized:

VERIFIED EMERGENCY MOTION TO SET SET ASIDE JUDGMENT, CANCEL SALE AND DISMISS ACTION FOR FAILURE OF JURISDICTION AND LACK OF STANDING

Comes now the defendants, xxxxxxxxxx and ___ xxxxxxx his wife, Defendants in the above-styled action and move this Court to vacate and set aside the Judgement entered on the __- day of ___, 2007/8, vacate and set aside the order dated __ day of ___, 2008 setting the sale date, and canceling the sale of the subject property and as grounds therefor says that the Plaintiff committed a fraud upon the Court in that the Plaintiff does not now and did not, at the time of the foreclosure, own the mortgage, the mortgage note, any security agreements, nor have the requisite power to represent the real party in interest, nor did the Plaintiff allege facts in support thereof. This Emergency motion is not filed for the purposes of delay. The true facts (and consequent fraud perpetrated upon this Court by Plaintiff) regarding the prior sale of the risk, servicing and ownership of the mortgage and note regarding the subject real property and alleged liability did not come to the attention of the undersigned defendants until the last 24 hours.

I HEREBY CERTIFY that a true and correct copy was sent by FAX to opposing counsel at the following number _____________________ and by U.S. Mail at the following address _________________________.

SIGNATURE

NOTARY

I further understand that you intend to file a Chapter 13 bankruptcy, await the motion for relief from stay for the foreclosure to proceed and that you intend to contest the motion for relief from stay by alleging the same thing as I have outlined in the State Court action and that in addition you will go to the Bankruptcy clerk’s office to file an adversary proceeding.

I assume you will put the “liability” in your bankruptcy proceeding as a contingent liability since it was procured by fraud along with a statement that the Creditor is not a creditor but claims to be one, and that the mortgage encumbrance is not a valid lien.

1. You have a house that was initially purchased in the year 2000 for $315,000.

2. You have done some refinancing during which your house was “appraised” at $750,000 around 3 1/2 years ago, which is about the middle of the period wherein a scheme had been hatched: money was made free by selling unratable securities to banks, governmental agencies, pensions, mutual funds and individual investors offering (a) a higher rate of return than they could otherwise get and (b) a higher rate of return than the underlying “investment” (mortgage) was paying. These were called collateralized debt obligations (CDOs) or collateralized mortgage obligations (CMOs) or other forms of “derivative securities, including but not limited to mortgage swap and other “hedge products, all of which were outside the regulatory scheme contemplated by the United States Federal Reserve and the various agencies controlling issuance and disclosure and sale or trading of such securities.

3. The seller’s of these securities obtained AAA ratings from Moody’s and S&P who were competing for market share of the ratings business and ended up literally going fishing with the people who were representatives of the securities that were being rated. Analysis was replaced by negotiation and thus AAA rated securities were sold when in fact they should have ben unrated.

4. The securities were sold to investors (including governments around the world, who now must write-off a portion of their “cash on hand” and cut back social services) with “disclosures” that the proceeds of sale would be used to pay the interest and repay the obligation, thus giving rise to an obvious Ponzi scheme, which was a violation of laws and rules under the Federal Securities and Exchange act of 1933, and the Securities and Exchange rules, and applicable and similar State laws and rules

5. The investment bankers and other intermediaries who were selling the securities were making a bundle of money through commissions, fees, and mark-ups from their own portfolio which they bought from mortgage aggregators.

6. The demand for these high rated “cash equivalent” securities sky-rocketed, causing the investment bankers and retail brokerages to step up pressure on mortgage aggregators to come up with more “product” to sell. This aggregation process is either done within the investment banking firm or by a third party who also gets a “mark-up”, rebate or kickback.

7. The aggregators went to mortgage brokers and lending institutions (financial and non-financial) offering financial incentives to the mortgage banks, non-financial lenders, and mortgage brokers to (a) steer customers (borrowers) into mortgage terms that were contrary to the interests of the borrower (b) contained terms that conformed to the needs of the investment bankers that were selling the bogus non-ratable securities and (c) adopting practices and tacit understandings to pressure or trick the borrower to sign the papers that would ultimately be aggregated into pools of the aforesaid bogus securities.

8. The “underwriting” lenders allowed practices of creating fictitious borrower income and assets, fictitious appraised values all driven up by the influx of “free money,” in which all parties to the transaction, except the borrower understood that there was no risk underwritten by the “lender” who was passing along the risk to the aggregator and eventually to the investor in the CDO or CMO.

9. Appraisers understood that they would never be hired again if they did not confirm the value of the property at a high enough level to close the financing deal and the sale of the home and were thus given improper financial incentives and coerced into providing fraudulent assessment of the value of surrounding property and the subject property itself.

10. Borrowers were thus lulled, pressured or tricked into believing that the fair market value was as stated in their closing documents, and that the lender, the underwriter and the insurers of title and property were all relying upon those representations concerning fair market value.

11. In fact, the reverse was true, all participants except the borrower understood full well that the fair market value was over-stated, that the risks were actually being undertaken by the borrower and the investor in the bogus securities and that all the parties in between were profiting from this Ponzi scheme.

12. As a result the borrowers were all overcharged for points, costs, fees, interest, in transactions that they never would have signed had full disclosure been made.

13. Under the above facts, the parties involved in the transaction, except the borrower, were engaged in a comprehensive nationwide scheme violating the provisions of the Truth in Lending Act, Securities Laws, RESPA and RICO and the comparable laws and rules of the applicable state agencies.

14. Multiple investigations of these actions are taking place under actions started by attorney generals of the United States and various state governments and at least one U.S.L Trustee in the Bankruptcy Court of Judge Raymond B Ray in the Southern District of Florida wherein the the trustee has been instructed to investigate the civil and criminal responsibilities of Countrywide Mortgage, the results of which will apply equally to thousands of other parties involved in this scheme which resulted in undermining the economy, money supply and wealth of the United States of America, other countries, and virtually all American citizens.

The New York Times just published an article today summarizing a detailed 580 page report showing that KPMG, the auditor for Century Financial (now defunct) expressly approved a change in accounting method that allowed the company to show a profit when under normal accounting rules the company would have shown a loss. Implicitly this shows the ever-widening complicity of third parties to loan transaction forsaking legal, professional and moral responsibility to get paid an extra fee for looking the other way. Anyone who took a loan based upon the reputation or professionalism of the lender was taken in by a ruse when they looked at the financial statements of the lender.

• Senator Obama is correct when he states that the politics of division has caused us to look suspiciously at each other when we should be looking at predatory corporations stealing our wealth while government either looks the other way or lends a helping hand.  
• Here is the article: 
• Report Takes Aim at Mortgage Lender’s Auditor

By VIKAS BAJAJ

Published: March 26, 2008

In a sweeping indictment of one of the nation’s largest accounting firms, an investigator released a report on Wednesday that said “improper and imprudent practices” by a once high-flying mortgage company were condoned and enabled by its auditors.

Related

Text of the Report (pdf)

KPMG, one of the Big Four accounting firms, endorsed a move by New Century Financial, a failed mortgage company, to change its accounting practices in a way that allowed the company to report profits, rather than losses, at the height of the housing boom, an independent report commissioned by a division of the Justice Department concluded.

The report is the most comprehensive and damning document that has been released about the failings of a mortgage business. Some of its accusations echo charges that surfaced during the collapse of Enron, the energy giant, which collapsed in accounting fraud more than six years ago.

The scathing 580-page report documents how New Century lowered its reserves for loans that investors were forcing it to buy back even as such repurchases were surging. Had it not changed its accounting, the company would have reported a loss rather a profit in the second half of 2006.

The profit was important because it allowed executives at the company to earn bonuses and allay concerns that the company was healthy when in fact its business was coming apart, the report contends.

The report is the result of a five-month investigation by Michael J. Missal, a lawyer and former official at the Securities and Exchange Commission hired by the United States Trustee overseeing the New Century bankruptcy. It may allow New Century, which is in bankrutpcy, to sue KPMG.