Why You Need an Expert Witness and Why You Should be Aggressive in Discovery

MISSION STATEMENT: I believe that the mortgage crisis has produced manifest evil and injustice in our society. I believe our recovery will never reach the majority of struggling Americans until we restore equal protection for all citizens and especially borrowers in our debt-ridden society. LivingLies is the vehicle for a collaborative movement to provide homeowners with sufficient resources to combat bloated banks who are flooding the political market with money. We provide thousands of pages of free forms, articles and discussion of statutes, case precedent and policy on this site. And we provide paid services, books and products that enable us to maintain an infrastructure to provide a voice to the victims of Wall Street corruption.

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There are three central strategies that need to be pursued with vigor. The Banks have once again moved the goal posts because they are starting to lose cases with increasing frequency when confronted with the requirement that they actually prove their case with facts instead of presumptions. They are attacking the need for discovery, the need for an expert witness, and the need for foundation of fabricated documents by leveraging certain legal presumptions to achieve results that were never intended to be used to win a case that they would lose if they had to prove their case with actual facts from a witness who has personal knowledge.
Yet that is exactly what is happening. It happens almost automatically in non-judicial foreclosures and it happens most of the time in judicial states. “Legal presumptions” are being manipulated to win an unwinnable case. Those presumptions are for expedience and not to slant cases in favor of a litigant who is wrong.
In Discovery it is important to set a hearing on the blanket objections that are commonly filed by the Banks without any obligation on their part to set those objections for hearing. So it is up to the borrower to set the objections for hearings. Lawyers are finding that they must also file a motion to compel and that without a compelling memorandum of law supporting discovery or supporting the need for an expert witness, the banks will control the narrative by maintaining the impression that laws and presumptions about negotiable instruments are the only issues.For the Judge, the real issues are hidden from view, so you must reveal them. The latest iteration the the Bank tactics is the “Self-authenticating” document which is the subject of another article.
The central theme is always the same. The Banks can’t win on the actual facts, so they are relying upon and leveraging certain rules of evidence that allow certain documents to be admitted into evidence, where the contents of those documents are taken as true (despite the fact that they are barred by the hearsay rule) and the Judges are treating the contents as true over the objection of counsel for the borrower. Like Judicial notice, such documents might be admissible for the limited purpose of acknowledging their existence, but their contents are very much in issue.
However, many judges disregard the notion that the contents are at issue unless the borrower produces compelling evidence that the facts in the document are false. In my opinion, it is wrong to require a defendant who has no access to the actual facts — the money trail — to bear the burden of proof and doubly wrong when the borrower has asked for exactly that information through statutory, formal, informal and discovery requests only to be met with stonewalling.
My thought is that this is an opportunity to educate the judge — against what he or she wants to hear. It is an opportunity to get him to hear YOUR narrative twice. Iadvise lawyers to file a memorandum in opposition to objections and file a motion to compel to make your record. Present a credible argument for the need for the borrower to get information that either lies solely in the hands of theforecloser or in the hands of others who are co-venturers with theforecloser.The need for an expert is evident from the section of the PSA which is entitled “Definitions” which uses words, concepts, business processes, lending and practices that are outside of the statutory scheme for the transfer of loans. The same arguments exist for enforcing discovery. Attach a copy of the PSA Definitions section to your memo. Despite the current trend of the Banks toward introducing the PSA as an exhibit at trial, they continue to argue that the borrower has no standing to contest whether the procedures and restrictions of the PSA are relevant in a foreclosure case. Many judges agree. I believe they are wrong and that this is an evasion of the truth with the help of the Court.

They may seem unrelated but they are identical — only the other side has or does not have the actual evidence of the transactions that are presumed to exist by virtue of some document they are producing like an assignment, a mortgage, a note, or a notice. To the extent that they are responsive to discovery, the need for an expert diminishes or is reduced.

The plaintiff is alleging that a trust owns the mortgage and that various parties have authority to service, receive documents and pay for the the origination of acquisition of loans. It is only the PSA that establishes the right of the Plaintiff forecloser or beneficiary under a deed of trust to pursue foreclosure.

The very essence of the defense is that the Plaintiff does not own the loan, is not a holder with rights to enforce and is not a holder in due course because the plan laid out by the PSA, was never followed. That starts with the conclusion that the trust was never funded and therefore could not have the resources to pay for the origination or acquisition of loans. The defense theory is that based upon the pleadings and proof of the Plaintiff, it is a stranger to the loan transaction despite a snow storm of paper creating appearances to the contrary.

The Plaintiff has not alleged it is a holder in due course. Thus by law they are subject toall of the potential defenses of the borrower starting with the processes that began in the application stage for the loan, the presence of an assignment and assumption agreement that governed theactual events that occurred at closing — includingthe fact that the named party identified as “lender” was not the source of the loan and had no rights under the agreement with third parties toperform any act with respect to the loan except topermit their name to be used as a nominee.This was a table funded loan in which an undisclosed third party funded the loan. The importance of that is that the third party should have been identified on the note and mortgage and the mortgage should not have been executed, delivered or recorded. It is ONLY with the help of an expert who understands the terms and processes that are outside the norm of conventional lending — which is already so complex that Federal law requires that summaries and good faith estimates and disclosure are required to be delivered to the borrower prior to closing.

The plaintiff is taking two opposite positions at the same time — first that they have a trust that exists, that has engaged in business pursuant to the requirements of the PSA and who has paid for the origination or acquisition of the loan. Second, that it doesn’t matter whether the trust exists or owns the loan because they are a holder, and they want this court to presume that being a holder creates a presumption under state law that as such, they have the rights to enforce. Hence they want presumption to triumph over fact.
Theirposition is that they can close the matter of refunds and repurchasing obligations with the creditors by foreclosing the mortgage and getting a judgment on the note. Both the investors and the borrowers think otherwise.The defense theory of the case is that the trust was never funded nor used in this transaction and thus should not be allowed to enforce a loan that it never owned, funded, originated or acquired. The initial proof lies in the pleading of the Plaintiff in judicial cases. They never assert that they are a holder in due course, the elements of which are payment of value for the loan, acting in good faith and without knowledge of the borrower’s defenses. Through aggressive and relentless pursuit of truth in discovery (which only requires the possibility that it might lead to admissible evidence) you can easily establish that they are not claiming that the Trust was acting in bad faith or with knwoeldge fo the borrower’s defenses (although in some situations that might also be in issue). That leaves the single element of payment for the loan.

Each PSA sets forth the elements of a holder in due course for the loan to be accepted by the trustee. If the allegation is onlythat that there is a holder, or even a holder with rights to enforce, the only conclusion, from their own pleadings is that the trust has not paid for this loan. If it has not paid for the origination or acquisition of the loan, the Trust has no reasonable basis for claiming any interest in it. Hence it shouldn’t be suing for collection or foreclosure. And the allegation that the Trust or representative is a holder is contrary to the presumption underlying court proceedings that the Trust has paid money and will lose money if the loan is not enforced. The truth is that the investors will lose money if the loan IS enforced.The defense theory of the case is that there is a direct debtor-creditor relationship between the investors, as creditors and who should have been on the note and mortgage but were not, in order to create the illusion of a veil in which the investors would not be liable for fraudulent, deceptive or shady lending practices.

And the defense theory of the case is that the securitization plan under which the investors were supposedly parties through the Trust and the PSA never occurred and that therefore the mortgage was defective on its face for naming the wrong lender and for not disclosing, as required by Federal and Florida law all the parties to the transaction and all the intermediaries were were receiving compensation and profits arising from the origination of the loan. — since it was the investor funds that were used in the origination or acquisition of the loan.

Since we can presume that the distance of the Trust from theactual origination eliminates any questionas to whether they were proceeding in good faith IF they accepted the note and mortgage, we must then presume that were acting in good faith and without notice of the borrower’s defenses. Those are two out of three of the elements for a holder in due course.By alleging that the Trust owns the loan, that would by definition mean that that if the PSA was followed the Trust was intended to be a holder in due course — having paid value for the loan in good faith and without knowledge of the borrower’s defenses.

That would mean that the PSA requires the Trust to be a holder in due course, because that would prevent the borrower from raising most defenses against the Trust when it seeks to enforce the loan. If it is not a holder in due course, the Trust provisions bar acceptance of the loan. Hence any allegation to the contrary is void under New York State law.

Thus the plaintiff is trying to slip by on two conflicting theories — that the trust owns the loan and that the trust can enforce it just by alleging it is a holder despite the fact that the trust is a stranger to the loan transaction and never transacted any business in which it acquired ownership of the loan. This leaves the actual creditor — a group of investors who were in the same darkness as the borrower — without having received the truth when the transaction was proposed to either of them.
What is interesting here is that the allegation is not that the trust is a holder in due course which can only mean that the Trust never paid consideration for the ownership of the loan. And the acceptance of the loan by the trustee has not been alleged because it most likely never happened because the transfer was outside of the cutoff period.The cutoff period exists for two reasons — to get certain tax advantages for the trust beneficiaries who are the real creditors and to prevent any defective loans from coming into the trust that would have an adverse consequence to the trust and its beneficiaries.

And the fact that the Trust is governed by New York State law means that any act that is expressly prohibited by the PSA is void not voidable. So the assignment is a cover-up for what really happened.

For the loan to be included in the pool of loans that form the res of the trust, the trustee must accept the loan. That acceptance is manifest after the cutoff period when the pool is closed. After that individual acceptances based upon opinions of counsel must be documented. None of that happened.

At best it is an offer that could never be accepted by the trust — because there was no acceptance by the trustee who could not accept because it would be a void act both because of the cutoff period and the fact that it produce adverse consequences in both tax treatment and actual money paid to them to allow the late deposit of a loan that has been declared in default). See the provisions for acceptance by the Trustee.

An expert witness steeped in the language and practice of investment banking and the securitization of loans is necessary to explain how this transaction must be interpreted and the conclusion that the investors are the direct creditors — not the trust — because their money was mismanaged, as the investors have alleged in their own complaints against the underwriters.

At worst, it is, as the investor suits and the suits by government and insurers allege outright fraud in which the money and the documents were intentionally managed in a way that was to the detriment of both the creditors and the debtor and ultimately the government and society.

The second point in the defense is that the documents submitted by the Plaintiff are not supported by anything because they have refused to provide appropriate responses to discovery that would show the actual authority to represent the actual creditors, based upon the actual creditors granting them that authority.At trial documents will be admitted for the forecloser if you have failed to enforce discovery. Admission into evidence is barred if they have failed to respond even after being ordered to do so by the court — but those cases don’t go to trial. They are settled. And that is the point.

It Was the Banks That Falsified Loan Documents

I know it doesn’t make sense. Why would a lender falsify documents in order to make a loan? I had a case in which a major regional bank had their loan representatives falsify loan documents by having the borrower certify that there were houses on his two vacant lots. The bank swore up and down that they were never involved in securitization.

When the client refused to make such a false statement — the bank did the loan anyway AS THOUGH THE NONEXISTENT HOMES WERE ON THE VACANT LOTS. Thus they loaned money out on a loan that was guaranteed to lose money unless the borrower simply paid up despite the obvious loss. The borrower’s error was in doing business with what were obviously unsavory characters. True enough. But he was dealing with the regional bank in his area that had the finest reputation in banking.

He figured they knew what they were doing. And he was right, they did know what they were doing. What he didn’t know is that they were doing it to him! And they were doing it to him in furtherance of a larger fraudulent scheme in which investors were systematically defrauded.

When I took the client’s history all I had to hear was this little vignette and I knew (a) the bank was involved in securitization and (b) this loan was securitized BEFORE the closing and even before any application for loan was solicited or accepted by the bank. The client balked at first, not believing that a bank would openly declare its non-involvement with Wall Street when the truth would so easily be known.

But the truth is not easily known — especially when the bank is involved in “private label” trusts in which there are no filing with the SEC or other agencies.

The real question is why would the bank ask the borrower to certify the existence of two homes that were never built? Why would they want to increase their risk by giving a loan on vacant land that supposedly had improvements? Or to put it bluntly, Why would a bank try to cheat itself?

The answer is that no bank, no lender, no investor would ever try to cheat themselves. The whole purpose of our marketplace is to allow market conditions to correct inefficiencies and moral hazards. So if the bank was cheating or lying, the only rational conclusion is not that they were lying to themselves, but rather lying to someone else. They were increasing the risk of non repayment and decreasing the probability that the loan would ever succeed, while maximizing the potential for economic loss to the lender. Why would anyone do that?

The answer is simple. These were not “overly exuberant” loans, misjudgments or “risky” behavior situations. The ONLY reason or bank or any lender or investor would engage in such behavior is that it was in their self interest to do it. And the only way it could be in their self interest to do it is that they were (a) not lending the money and (b) had no risk of of loss on any of these loans. There is no other conclusion that makes any sense. The bank was being paid to crank out loans that looked valid and viable on their face, but in fact the loans were neither valid nor viable.

Why would anyone pay a bank or other “originator” to pump out bad loans? The answer is simple again. They would pay the originator because they were being paid to solicit originators who would do this and then aggregate over-priced, non-viable loans into bundles where the top layer contained apparently good loans on credit-worthy individuals. And who would pay these aggregators? The CDO manager for the broker dealers that sold toxic waste mortgage bonds to unwitting investors. As for the risk of loss they created an empty unfunded trust entity upon whom they would dump defaulted loans after the 90 day cutoff period and contrary to the terms of the trust.

So it would LOOK LIKE there was a real lending entity that had approved, directly or indirectly, of the the “underwriting” of a loan. But there was no underwriting because there was no need for underwriting because the originators and aggregators never had a risk of loss and neither was the CDO manager of the broker dealer exposed to any risk, nor the broker dealer itself that did the underwriting and selling of the mortgage bonds.

Reynaldo Reyes states that “it is all very counter-intuitive.” That is code for “it was all a lie.” But we keep treating the securitization infrastructure as real. In the 2011 article (see below) in Huffpost, the Federal Reserve cited Wells Fargo for such behavior — and then the Federal Reserve started buying the toxic waste mortgage bonds at the rate of some $60 billion PER MONTH, which is to say that approximately $3 Trillion of toxic waste mortgage bonds have been purchased by the Federal Reserve from the Banks. The Banks settled with investors, insurers, guarantors, loss sharing agencies, and hedge counterparties for pennies on the dollar, but so far those settlements total nearly $1 Trillion, which is a lot of pennies.

Meanwhile in court, lawyers are neither receiving nor delivering the correct message in court. They seek a magic bullet that will end the litigation in their favor which immediately puts them in a classification of lawyers who lose foreclosure defense cases. The bottom line: the lawyers who win understand at least most of what is written in this article, have drawn their own conclusions, and are merciless during discovery and/or at trial. Then the opposition files a notice of voluntary dismissal or judgment is entered for the homeowner “borrower.” Right now, these losses are acceptable to banks who are still playing with other people’s money. If lawyers did their homeowner and litigated these cases aggressively, the bank’s illusion of securitization would end. And THAT means most foreclosures would end or never be started.

Wells Fargo Illegally Pushed Borrowers into SubPrime Mortgages

JP Morgan Sues FDIC for WAMU Cash Over Disputed Mortgage Bonds

EDITOR’S NOTE: The dots are starting to get connected. Here JP Morgan who said they were the successor for everything that was WAMU turns out to be arguing that this didn’t actually happen and that some money is still left in the WAMU “estate.” The issue that is not raised is what else is in the WAMU estate? I content that there are numerous loans or claims to loans that were never transferred to anyone successfully and I think the FDIC and JPM both know that. Chase is trying to limit its exposure for bad bonds while at the same time claiming ownership or servicing rights for the underlying mortgages.

Which brings me to a central procedural point: if these cases are to be properly litigated such that the truth of the transaction(s) comes out, then it cannot be done on the rocket docket of foreclosures. It should be assigned to regular civil litigation or even better complex litigation because the issues cannot be addressed in the 5-10 minutes that are allowed on the rocket docket.

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  • JPMorgan (JPM) has sued the Federal Deposit Insurance Corp. for a portion of the $2.7B remaining in the FDIC receivership that liquidated Washington Mutual following the sale of its branches and deposits to JPMorgan for $1.88B during the financial crisis in 2008.
  • The lawsuit is the latest development in the dispute between JPMorgan and the FDIC over who should assume Washington Mutual’s legal liabilities, such as those related to the sale of problematic mortgage bonds.
  • Meanwhile, JPMorgan has been sued by the State of Mississippi for alleged misconduct while going after credit-card users for missed payments. The bank’s sins include pursuing consumers for money they didn’t owe, Mississippi said.
  • The state is the second to sue JPMorgan over the issue, the other being California, while 15 others are examining the matter. JPM is already in early settlement talks with 14 of them.

Read more at Seeking Alpha:
http://seekingalpha.com/currents/post/1470511?source=ipadportfolioapp_email

Modifications Up, Foreclosures Down, Scams Up

Thanks to all who inquired about my health. I am fine. Just busy with cases getting ready for trial.

Recent trends show a number of things. First, more actual judgments are being rendered in favor of borrowers. Sometimes, it is procedural, like the statute of limitations that limits actions to 5 years in Florida. But most times, it is simply that the Plaintiff or forecloser could not make its case. They produce professional witnesses who know nothing, were previously employed outside of the industry and are basically being thrown under the bus by the banks who already know they will lose if the homeowner’s attorney is an experienced trial attorney.

Recent laws and local rules are getting more and more judges applying laws and rules that require the forecloser to have their ducks in a row. The answer is that they have no ducks, so they can’t get them in a row or any other configuration. They are strangers to the transaction with the homeowner. And there is a growing awareness that homeowners are not seeking a free house but a true lender or creditor with whom they can engage in meaningful discussions. But the banks are still successful in insulating the real parties in interest from any contact with each other or even any knowledge of who the other party is or where they can be contacted.

As one Judge told me recently, he has come to realize that clearing his docket is easier than he thought. Just require the a party seeking foreclosure to prove that they or the predecessor actually made a loan to the homeowner. Add to that a comprehensible chain of documentation that tracks actual transactions, and you end up with nearly zero foreclosures. This is especially true where the foreclosing party has failed to allege the existence of a loan and instead has alleged only that paperwork was signed. Judges who continue to “infer” that the loan was made are skipping a basic premise of pleading. Either it happened or it didn’t. The use of inference requires the homeowner to state an affirmative defense and prove it when he should only be required to deny that allegation. Motions to dismiss based on that premise are starting to be granted.

So it is no wonder that I am getting daily calls from previously intractable parties seeking foreclosure pursuing a global settlement. They want it “Global” because they know we will pursue damages for slander and wrongful foreclosure. They also want “settlement” because they know they can’t win in court. But it remains true that where the client comes to a lawyer after judgment has been entered or after the sale, the road remains rough and unpaved. And the fact remains that if they can’t make case for foreclosure they don’t have the authority to settle or modify the loan. But that can be bridged if the Judge approves the settlement in words that prevent anyone else from making a claim, and if a Guarantee of Title is issued by the title company. (Different from the normal owner’s policy).

Modifications are being offered with increasing sincerity as lawyers start balking at filing documents that they know or believe were fabricated and forged. The recent tribulations of David Stern and Marshall Watson sounds a warning bell to all firms “processing” foreclosures that they might face disbarment or worse.

But wherever there is desperation and fear and vulnerability, the scam artists come out of the woodwork spouting phrases, laws and rules they know nothing about and promising to end the ordeal of the investor who bought homes during the mortgage meltdown or the homeowner who bought or refinanced homes during that period. Some of them use the word “asset protection” which is in reality a highly complex world in which navigation is extremely challenging. The bottom line is that if the person is not a licensed professional with some obvious credentials their advice should be neither sought nor taken with anything larger than a grain of salt. That ought to get some more hate mail coming my way. Some of the old-time tricksters are finding it difficult to get gigs as “experts” because, well, they are not experts, they have insufficient knowledge, and they don’t know how to explain anything to the court.

In the end, you must accept the premise that the transactions were fatally defective from the beginning (most of them). Signing a note might enable someone to START a lawsuit but it doesn’t allow them to win it. A judge is committing error when he or she denies a motion to dismiss based upon the fact that the “lender” failed to allege that he ever fulfilled his side of the bargain — i.e., that he made a loan to the “borrower.” That allegation alone will knock out at least half of all foreclosures. Judges who are faithfully following the rules of pleading and proof are having no difficulty in clearing their dockets because most of the foreclosures are being initiated in judicial and non-judicial states by parties who, as the San Francisco study put, are “strangers to the transaction.”

While the paperwork on loans is mysterious and opaque the facts of the deal are not. Either there was a transaction for which the paperwork is evidence, or there was no transaction, in which case the paperwork is worthless.

Report of Referee: Former ‘Foreclosure King’ David Stern Could be Disbarred for Foreclosure Fraud
http://4closurefraud.org/2013/10/30/report-of-referee-former-foreclosure-king-david-stern-could-be-disbarred-for-foreclosure-fraud/

Financial Crime: Foreclosure Rescue Schemes Have Become More Complex, and Efforts to Combat Them Continue
http://gao.gov/products/GAO-14-17

Increased mortgage modifications have scaled foreclosure down
http://www.foreclosuredefenseinny.com/2013/increased-mortgage-modifications-have-scaled-foreclosure-down/

Danielle Kelley Looks at New Florida Law: Pitfalls and Possibilities

The fundamental paradigm shift that is coming is that the banks are the deadbeats, not the borrowers. The borrowers are seeking to enforce a fair deal; the banks are seeking to steal and lie their way through the PONZI scheme we called “Securitization.” —Neil F Garfield, Livinglies.me
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.

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

Danielle Kelley, Esq. is a partner in Garfield, Gwaltney, Kelley and White located in Tallahassee. She has been a constant contributor to the dialogue on wrongful foreclosures and has been quoted recently in a number of articles in mainstream media. For further information on the firm’s services please call 850-765-1236.

Editor’s Comment: The Florida bill was clearly meant to speed up the “inevitable” foreclosure process, which is the wrong assumption right off the bat. If the foreclosures are wrongful we are not talking about some “i” that wasn’t dotted or some “t” that wasn’t crossed. We are talking about foreclosures that (a) didn’t need to happen and (b) couldn’t happen legally if the party  bringing the foreclosure had no right to do so.
The fundamental paradigm shift that is coming is that the banks are the deadbeats, not the borrowers. The borrowers are seeking to enforce a fair deal; the banks are seeking to steal and lie their way through the PONZI scheme we called “Securitization.”

Verification of the complaint has taken another bizarre turn. In reading the testimony and affidavits of those who “verified” the complaint, it turns out they signed the verification but knew nothing about the case. The only thing they verified was that the complaint contained information that was given to her or him by unknown parties through computer via a computer monitor.

Banks are using the verification aspect to bolster their false claims to the business records exception of hearsay. They are wrong and any judge who rules that is wrong if the verifier or affiant (a) is not the records custodian and (b) had no basis for personally knowing the truth. Pressed to give an accounting for how they know what they know, the verifier will answer “it’s in the complaint.” They often express confidence that it wouldn’t be in the complaint if it wasn’t true. Talk about circular logic!

The recent revelations about Bank of America are the tip of the iceberg of lying and deception that started when the first mortgage bond was sold and the first loan application was taken within the scope of the PONZI scheme that required bonds to be sold in order to make payments to the investors.

The fact that BOA told its employees to lie to customers in order to get them into foreclosure is enough to infer the truth, to wit: the goal was foreclosures and not financial recovery. How is that possible? What bank would not want the most it could get in mitigation of a “loss” it supposedly incurred as a result of a “default” by a “borrower” on a “debt” that was owed to the bank because the bank funded the origination or acquisition of the loan?

The questions answer themselves. If the Bank had a real loss they would want to mitigate the loss as quickly as possible. In the past that has always meant some sort of workout when that possible. Now we find out that BOA was paying its employees to lie and deceive the “borrowers” for the express purpose of getting the property into foreclosure even though that means getting a lot less money for the “creditor” than any modification, settlement or workout. So the answer is that they had no real loss and they must want the foreclosure for some other reason.

The “other reason” is simply that foreclosure is the cover-up for the PONZI scheme. And the government feels stuck by assurances it gave the large banks (see statements of future whistle blowers) when they forced the banks to acquire the investment banks, the aggregators and other players in this scheme, before the government knew that the scheme existed. So the government is buying up worthless mortgage bonds with no loans backing them and pretending that the bonds are really worth something. This is supposed to shore up the financial system by avoiding massive failures of the largest banks — something that is eventually going to happen anyway because the $ trillions that were siphoned off from from investors were then siphoned off from the banks and management now controls that money.

If you look at the merger and bond activity you can see the banks acquiring other institutions in order to provide a safety valve through which part of the ill-gotten gains from the PONZI scheme can be repatriated and the “earnings” of the bank can be seen as stable or increasing even while the rest of the world goes to hell in a hand basket. (see below). The rest of the money is being controlled by a handful of people (see future whistle blowers) who are actually controlling world events by controlling the purse strings of all world economies.

Sounds like a conspiracy theory, doesn’t it. Maybe a little less crazy now that we know that BOA was rewarding employees for lying to customers. And maybe a little less so now that we know the bonus was paid with a Target gift card. If it was a legitimate bonus, why use Target as the intermediary? Answer: the auditors of the bank probably would not like seeing bonuses paid to people who were supposedly working with borrowers on modification or settlement of the loan — especially when the record shows that the bonus was for getting the case into foreclosure rather than settlement.

As you can read for yourself below, the pace of foreclosures is picking up and is going to accelerate under the new Florida law. They are in a rush to hush up any further whistle blowers who might blow the whole thing wide open. But the carrot they held out to homeowners might be the bank’s undoing if the borrower moves promptly and fights the foreclosure on the basis of ownership of the loan. There is only one way to really own a loan and that is by paying for it. The argument has been rejected by many judges, but now it is right in the statute that the proof of ownership must be present as a condition precedent which means that the real burden of proof is switching back to the banks, where it belongs.

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Danielle Kelley, Esq. June, 2013

The banks wanted this bill – so let’s take a look at the “consumer friendly” portions and get ready.  Keep in mind the act is remedial in nature.  All complaints filed after June 7, 2013 will be subject to a motion to dismiss if the plaintiff does not meet the requirements of the new bill:

1) they must give affirmative allegations that at the time foreclosure is filed they are the holder of the original note, allege with specificity the factual basis by which they are entitled to enforce the note under 673.3011 (no more either/or pleading),

3) a plaintiff given authority to sue (i.e. servicer or someone coming in with a POA like we’ve been seeing) – the Complaint shall describe their authority and identify with specificity the document that gives them authority to act on behalf of the Plaintiff.

Given what we know about how they verify complaints, they will have a hard road showing they can verify the plaintiff actually “has” the original note.  I won’t settle for anything less than a declaration that they have seen it in person – not on a computer screen.  The bill states, “The term “original note” or “original promissory note” means the signed or executed promissory note rather than a copy thereof.”  I don’t want to hear about a janitor who was adopted as assistant vice president through corporate resolution and is verifying they saw the “original note” on a screen.  Keep in mind that they executed the complaints filed this month months ago – they sign right after they send off for verification usually. 

If they file a lost note count they must attach an affidavit under penalty of perjury to the Complaint that
1) details a clear chain endorsements, transfers, or assignments Note;
2) set forth facts showing the Plaintiff is entitled to enforce the lost instrument (Note); and
3) attach documents to the affidavit such as copies of the Note, allonges, audit reports, or other evidence of acquisition, ownership, and possession.  
 
Relevant portions of the bill below:
(2) A complaint that seeks to foreclose a mortgage or other lien on residential real property, including individual units of condominiums and cooperatives, designed principally for  occupation by from one to four families which secures a  promissory note must:
(a) Contain affirmative allegations expressly made by the plaintiff at the time the proceeding is commenced that the plaintiff is the holder of the original note secured by the mortgage; or
(b) Allege with specificity the factual basis by which the plaintiff is a person entitled to enforce the note under s. 673.3011.
(3) If a plaintiff has been delegated the authority to institute a mortgage foreclosure action on behalf of the person entitled to enforce the note, the complaint shall describe the authority of the plaintiff and identify, with specificity, the document that grants the plaintiff the authority to act on behalf of the person entitled to enforce the note. This subsection is intended to require initial disclosure of status and pertinent facts and not to modify law regarding standing or real parties in interest. The term “original note” or “original promissory note” means the signed or executed promissory note rather than a copy thereof. The term includes any renewal, replacement, consolidation, or amended and restated note or instrument given in renewal, replacement, or substitution for a previous promissory note. The term also includes a transferable record, as defined by the Uniform Electronic Transaction Act in s. 668.50(16).
(4) If the plaintiff is in possession of the original promissory note, the plaintiff must file under penalty of perjury a certification with the court, contemporaneously with the filing of the complaint for foreclosure, that the plaintiff is in possession of the original promissory note. The certification must set forth the location of the note, the name and title of the individual giving the certification, the name of the person who personally verified such possession, and the time and date on which the possession was verified. Correct copies of the note and all allonges to the note must be attached to the certification. The original note and the allonges must be filed with the court before the entry of any judgment of foreclosure or judgment on the note.
(5) If the plaintiff seeks to enforce a lost, destroyed, or stolen instrument, an affidavit executed under penalty of perjury must be attached to the complaint. The affidavit must:
(a) Detail a clear chain of all endorsements, transfers, or assignments of the promissory note that is the subject of the action.
(b) Set forth facts showing that the plaintiff is entitled to enforce a lost, destroyed, or stolen instrument pursuant to s. 673.3091. Adequate protection as required under s. 673.3091(2) shall be provided before the entry of final judgment.
(c) Include as exhibits to the affidavit such copies of the note and the allonges to the note, audit reports showing receipt of the original note, or other evidence of the acquisition, ownership, and possession of the note as may be available to the plaintiff.
(6) The court may sanction the plaintiff for failure to comply with this section.
SEE ALSO
Unnatural Disaster How mortgage servicers are strong-arming the victims of the Moore, Oklahoma tornado (among others)
http://www.newrepublic.com/article/113496/moore-oklahoma-tornado-victims-strong-armed-mortgage-servicers
HAMP Extension 2015 Could Help Millions More Avoid Foreclosure, LoanLove.com Reports
http://www.sys-con.com/node/2700128

Bank of America gave bonuses for hitting foreclosure quotas, suit alleges
http://www.bizjournals.com/orlando/morning_call/2013/06/bank-of-america-gave-bonuses-for.html

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

13 Questions Before You Can Foreclose

foreclosure_standards_42013 — this one works for sure

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

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

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

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

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

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

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

 At the hearing against BOA on an old case of mine and Bill’s [William GWALTNEY, partner in GGKW] today I moved to enforce settlement. They actually agreed to a trial payment with my client in writing at mediation 2 years ago. The Judge granted the motion and wants a hearing in 60 days on the arrears (which he agreed my client isn’t liable for), sanctions and fees. She made her payment post-mediation and they sent the checks back. I gave him the Massachusetts affidavits from the BOA employees.  The Judge looked shocked. Opposing Counsel argued the Massachusetts case had nothing to do with our case.
Judge said “Mrs. Kelley how about I enter an order telling Plaintiff they have so many days to resolve this?”  I said “with all due respect your Honor BOA hasn’t listened to the OCC and followed the consent order, they haven’t listened to DOJ on the consent judgement and they are violating the AG settlement. I can assure you 100% they won’t listen to this Court either. Once we leave this room we are at the mercy of BOA actually working with us and their own attorney nor this court can get them to.  Their own attorney couldn’t reach them yesterday or today.  My client was to send in one utility bill two years ago. She sent it the day after mediation and they’ve sat and racked up two years of arrears and fees. This court has the power to sanction that behavior under rule 1.730 and should because this was orchestrated. The Massachusetts case is a federal class action which includes Florida homeowners like my client. It says Florida on the Motion for class certification so it does matter in this case. This was a scheme and a fraud.  It was planned and deliberate”.
Opposing counsel wanted to start the modification process over because the mediation agreement said “Upon completion of the trial payments Defendant will be eligible for a permanent modification”. Opposing counsel said “just because they meet the trial payments doesn’t mean they get a permanent mod.”  I said “under the consent judgment they better” and told the judge we were not going through the modification again, my client had already been approved. He agreed and said that the trial would become permanent and ordered BOA to provide an address for payment. He told opposing counsel that the argument that a trial period wouldn’t become permanent wasn’t going to work for him.
I love the 14th circuit. There is a great need from here to Pensacola and in the smaller counties like I was in today you can actually get somewhere.
Now the banks won’t even say impasse at mediation. It’s always “no agreement”.   But they’ll tell you to send in documents the next week only to say they didn’t get them. Now after those affidavits I see why.

Danielle Kelley, Esq.

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

 FOLLOW DANIELLE KELLEY, ESQ. ON HER BLOG

BANKS STOP FORECLOSURES AS THEY REVIEW COMPLIANCE WITH CONSENT ORDERS

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):

 

 

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

 

 

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}

 

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

Student Loans, Housing and Poverty in the U.S.

“Bottom Line: Foreclosures need to stop, student loans need to be modified and return to pre-2005 rules for dischargeability, wages need to rise and the number of people earning wages needs to rise. If you don’t have those ingredients, the economic “recovery” will forever be fragile and will forever be in danger of a much deeper collapse than we saw in 2008 because underlying conditions are worse. That’s why American companies are holding trillions in cash and assets overseas. They don’t trust us anymore.” — Neil F Garfield, livinglies.me

For assistance with presenting a case for wrongful foreclosure and student loans, please call 954-495-9867 (East Coast) 520-405-1688 (West Coast), customer service, who will guide you to our information resources and upon request put you in touch with an attorney in the states of Florida, Tennessee, Georgia, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Analysis: According to the official figures there are around 50 million people living below the poverty line. Surveys show that the number of people who can’t buy essentials for their family actually total close to 150 million people, which is half the country. The unemployment rate, if one were to add the number of people who are underemployed or who have given up looking for work, is probably over 20% — 60 million people!

The chasm referred to as income and wealth inequality is growing daily. $1 trillion in debt burdens students who could be far more productive. Until 2005, this debt was dischargeable in bankruptcy. But the banks managed to get changes made in the bankruptcy code equating student debt with alimony and child support and further requiring means testing in chapter 7 thus inhibiting the discharge of debts on credit cards charging 20% or more per year in interest and medical costs, which if you read Brill’s article in Time Magazine last week, are marked up 3000%.

Some $13 trillion in mortgage loans were faked and the banks continue to lie to the President, the Congress, the state legislatures, governors and Attorneys general.

If you add it all up, it isn’t hard to see why economists refer to the “recovery” as fragile. If you ask me it is unjust, wrong and impractical to continue on the same path we are on in the hopes that down the road somehow we will grow out of the problem we have — an economy that benefits a few people while the number of people falling behind, with lower and lower wages and decreased accessibility to credit increasing every month. Billions are added each month in student loan debt which is fast becoming a cancer on our society simply because of the new bankruptcy provisions.

The 7 year experiment in making student loans non-dischargeable is a miserable failure. It is a major contributor to the impending decline in the credit rating of the what was once the strongest nation on earth in every way. Because we allowed the banks to get the TARP funds and all the other forms of bank bailouts, and because we ignored the real victims — the investors and the homeowners who were tricked into deals that could not possibly work, the foundation of the country has been so undermined that we now rank #10 behind France and Spain in upward economic mobility. That means that the chances are better in those countries to climb the ladder of success than they are here.

This is not a piece suggesting we convert to socialism as our economic path. It is rather a call-out to our government that it cannot continue to bow to the will of the banks and expect the country to hold together. With half the country gasping for air, we must jettison our ideology and go for the practical solutions — most of which already exist or existed until a short while ago.

The problem is not that capitalism isn’t working. The problem is that capitalism is being used as a cover for the creation of illusions of prosperity and the reality of a near fascist state. That is what happens when someone corners the market on oranges and that is what happens when the someone is allowed to corner the market on money. And THAT is why we need government regulators and legislators who are NOT permitted to go through the revolving door from government to business and back again. If you take the referees off the field, don’t be surprised with what happens next.

For better or worse our economy is still 70% dependent upon consumer spending. Yet we pursue policies that diminish the ability of consumers to spend and diminish the number of consumers. The fact that there is still some muscle in the our system is testament to our inner strengths and prospects if we make the necessary changes to our democratic institutions and reign in those who are admittedly too large to govern or regulate.

Despite the obvious fundamental defects in the loan originations and transfers of loans that were the products of imagination and illusion, we treat them as real and even sacred. The playing field has been tilted so that all the benefits roll into one corner while the rest of us scramble to  make ends meet. The risk factors in any loan or program have been pushed entirely over into the public sector when the government should be able to stop the foreclosures, cure the student defaults and renew the progress of wage growth.

The keys to end this nightmare here and abroad is housing, student loans and employment. Students who have unpayable student loans are refused employment because many employers do credit checks. The same holds true for the millions of Americans who have been victims of fake foreclosures by strangers who never put up a dime to fund or purchase the loan and then submitted a credit bid at the “auction.” The private student loans arose because somebody thought it was a good idea to raise the cost of student loans by inserting profit seeking banks as intermediaries. Now that is corrected as to future loans, but it does nothing to correct the problems of past mistakes by government.

This isn’t just theory. Trillions of dollars are being held off shore by companies who legitimately are not convinced that the U.S. will actually pull out of this spiral anytime soon. So they are investing in capital and labor elsewhere. No effort has been made to claw back the trillions of dollars that disappeared in the maelstrom of the mortgage meltdown. Those funds are hidden off shore too.

And even more importantly, no company wants to invest in a marketplace where the laws are not enforced with consistency. If you speak with many CEO’s in private they will tell you that jail time for bankers would be a stimulus to confidence in the U.S. marketplace. What we have is a marketplace without boundaries as to the the fraud and other criminal behavior that was never before tolerated in our system.

Large and medium sized organizations holding trillions of dollars in liquid assets and other investments overseas see this very clearly. They have no more reason to commit to the U.S. economy than they do to any other banana  republic.

Why Student Debt Will Make U.S. Insolvent
http://www.business2community.com/finance/why-student-debt-will-make-u-s-insolvent-0430373

Wall Street turns profit in student loan debt
http://www.wsws.org/en/articles/2013/03/11/loan-m11.html

Student Debt Crushes Borrowers And Threatens The U.S. Economy
http://www.addictinginfo.org/2013/03/09/student-debt-crushes-borrowers-and-threatens-the-u-s-economy/

http://blog.credit.com/2013/03/do-we-need-to-change-bankruptcy-rules-for-student-loans/

Don’t Panic: Wall Street Is Going Crazy For Student Loans — But It’s Not a Bubble http://www.theatlantic.com/business/archive/2013/03/dont-panic-wall-street-is-going-crazy-for-student-loans-but-its-not-a-bubble/273682/

You Know What Sucks? Your Student Debt. You Know What’s Great? The Solution.
http://beingliberal.upworthy.com/you-know-what-sucks-your-student-debt-you-know-whats-great-the-solution-2

700 Illegal Foreclosures and Evictions Against Active Duty Military: Tip of the Iceberg

For those seeking analytical services or legal representation call our customer service number 520-405-1688. Active duty law enforcement and people in are active duty military or foreign service qualify for discounted or free services. Major geographical areas covered by our attorneys are Florida, Georgia, California, Ohio, and Nevada. Jurisdictions include Federal Civil Court, Federal bankruptcy Court and state court proceedings, judicial and non-judicial.

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Amongst the most despicable aspects of the job the banks did on against our society was the foreclosure and eviction of families of servicemen and women who were on active duty 7,000 miles away from home. This is patently against existing Federal Law, as well as public policy on the Federal level and all 50 states. The banks promise “compensation.”

My answer is that wrong is wrong. The evictions should be vacated, the foreclosures should be reversed, the sales cancelled, the deed on foreclosure nullified and the parties returned to their original position. Treble damages, punitive damages and/or exemplary damages should apply. Credit reports to the credit agencies should be removed. To think that one of our people in active service is losing life and limb at the same time these banks willfully ignored their rights is shameful. It should shock the conscience of any court.

The compensation offered by the banks to military families and other families for wrongful foreclosures is arbitrary, capricious and against common sense. It is all predicated on the assumption that there would have been a foreclosure anyway. But the San Francisco study and others around the country, all independently and objectively produced using scientific method have shown that at least 65% of all foreclosures were wrongful. “Wrongful” means they should not have been permitted to proceed. It means shouldn’t have happened at all.

So it is a drop in the bucket to allow these investment banks to claim losses not their own, claim insurance not their own, claim proceeds of credit default swaps on mortgage bonds not their own, claim losses from defaults on mortgages not their own and then to settle for pennies on the dollar.

Hidden in the last settlement with OCC, is a provision that says if the bank gives $10,000 toward principal reduction on a $100,000 loan they get credit for $100,000 (the principal demanded for the loan, which is wrong, as we all well know) instead of the $10,000 they allowed. My opinion is that this is precedent. What is good for the goose is good for the gander — if the bank gets credit for a $100,000 settlement then the borrower’s principal due should  be reduced proportionately by the CREDIT received by the bank who at all times has been claiming they are agents for the investors EXCEPT when they get money from the government, insurance, or credit default swaps.

see http://dealbook.nytimes.com/2013/03/03/banks-find-more-wrongful-foreclosures-among-military-members/?emc=eta1

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

For information on our services call our customer service number at 520-405-1688. Services include legal representation in Florida, Nevada, Ohio, California and other states. Neil Garfield is a member of the Florida Bar. Readers should consult with an attorney licensed in the jurisdiction in which their property is located before deciding or acting upon anything seen on this blog.

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Neil F Garfield, February 28, 2013

If you are directly talking to the bank you are talking to people who have been carefully scripted in what they are supposed to say. The goal of the bank is to get you in foreclosure. That is why they tell you that in order to be considered for modification or relief you must stop paying on your mortgage. Then they lead you along in the so-called modification process extending the time you are in default so that it is unlikely that you will have the money to reinstate.

After they are pretty sure you can’t reinstate they tell you your request for permanent modification has been denied and they give crazy reasons like someone didn’t call them back (after they have repeatedly “lost” the documents). In judicial states they file a foreclosure lawsuit. When you call them up and ask what is going on, they tell you your loan modification is denied and they proceeding with foreclosure unless you have the money to reinstate, which includes fees and costs that are probably fabricated. Meanwhile they refuse to provide you with proof they have any right to collect anything from you much less foreclose.

In the judicial states and sometimes even in the non-judicial states the banks encourage homeowners to write “hardship” letters to the Judge. This is a very clever way of getting a lot of people to file a paper with the court that essentially admits all elements of the foreclosure and creates a default situation because you didn’t file a formal answer. The next thing you know a final judgment is entered setting the date for the auction of your property stating the amount due based upon a flimsy affidavit filed by someone with no idea who you are, what the history has been on your file, and what amount is owed to the actual creditor.

In a sense, as pointed out to me by some other lawyers, the banks are practicing law without a license when they give legal advice to borrowers and they have a blatant conflict of interest when doing so. Do NOT follow the advice of the bank representative as he or she is only parroting what they have been told to say. They are all going after foreclosures with the same frenetic energy that went after the loans because if the loans don’t end up in foreclosure they have some questions to answer to the insurers who already paid them (several times over) on the markdown of the value of the pool claiming an interest in your loan.

Here is a simple example: Imagine your call is stolen and your insurance company cuts you a check for the loss. And then another insurance company cuts you a check for the same loss. In real life this doesn’t happen to insured motorists. But in finance the loan insurance works exactly that way. So now you have twice the value of the car that was stolen. Suddenly the police call and tell you the car has been found. If you follow the law, you give back the insurance money and take the car back but that is not what the banks do with your loan. They make sure the car gets buried so they can keep the insurance money which is twice the value of the loan (or ten times the value of the loan). In your case “buried” means foreclosure. It is only through foreclosure that they can demonstrate the claimed loss was real.

Another way they get you is with force placed insurance. They get a “notice” from the carrier that the insurance has lapsed and then contrary to law, without notice to you they get insurance that costs three times what you were paying. This raises the payments to a level you can’t pay and then they give you a notice of default that you failed to make your payment, even though the payment they are demanding is wrong. Then they foreclose, give the same advice over the phone to write a hardship letter to the Judge which admits the debt, note, mortgage and default and then raises the issue of force placed insurance which the average pro se litigant doesn’t really know how to state in a formal pleading. The judge takes the letter to be your answer and with little fanfare enters final judgment for the bank.

6th Circuit Court of Appeals Rules FDCPA Applies to Foreclosures

OPINION APPLIES TO BOTH JUDICIAL AND NON-JUDICIAL STATES

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For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, Tennessee, Georgia, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

EDITOR’S ANALYSIS: The Fair Debt Collection Practices Act (FDCPA) 15 USC Sec 1692, has been treated as “off-limits” in mortgage foreclosure actions. The principal thrust of the action is to protect consumers from unfair practices and to prevent debtors from paying a “collector” and finding out they still owe the money because the “collector” was a sham operation. The opinion of many trial judges based upon some appellate decisions was that the FDCPA expressly excluded foreclosure actions.

In this Opinion, the 6th Circuit Court of Appeals, using common sense and basic rules of statutory construction, came to the opposite opinion and it would appear that the opinion will be followed in most states. As it is, anecdotal evidence from Connecticut and other states suggests that trial judges were questioning the legal theory that foreclosures were not about the collection of money.

“Chase and RACJ fraudulently concealed the fact that Fannie Mae owned the loan, and that the original note was not lost or destroyed and was being held by a custodian for Fannie Mae’s benefit. The complaint named plaintiff Lawrence Glazer as someone possibly having an interest in the Klie property, and RACJ served Glazer with process. Glazer answered and asserted defenses. He also notified RACJ that he disputed the debt and requested verification. RACJ refused to verify the amount of the debt or its true owner.”

DENY AND DISCOVER: It is the failure to verify the very thing that lies at the heart of foreclosure defense, nullification of instrument aimed at the mortgage and note, that makes this opinion so powerful. BY re fusing to verify the true owner or the amount of the debt, RACJ was attempting to get around normal due process — that the charges against the debtor be clearly stated and verified. Allowing violations of the FDCPA under the mistaken notion that foreclosure is not about the collection of money allows the collector to finesse the issue of who owns the loan and how much is due. This opens up discovery against the Master Servicer, Subservicer, investment banker, Trustee of the Trust and the trust itself to determine if the trust even exists.

“we hold that mortgage foreclosure is debt collection under the Act. Lawyers who meet the general definition of a “debt collector” must comply with the FDCPA when engaged in mortgage foreclosure. And a lawyer can satisfy that definition if his principal business purpose is mortgage foreclosure or if he “regularly” performs this function. In this case, the district court held that RACJ was not engaged in debt collection when it sought to foreclose on the Klie property. That decision was erroneous, and the judgment must be reversed.7″

Worst Years Still Ahead in Florida Foreclosures

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For assistance with presenting a case for wrongful foreclosure, please call 520-405-1688, customer service, who will put you in touch with an attorney in the states of Florida, California, Ohio, and Nevada. (NOTE: Chapter 11 may be easier than you think).

Editor’s Comment: Why is it that we are willing to sacrifice vital government services and hard earned taxpayer dollars to prop up banks that committed the largest economic crime in human history?

We all know the banks sold “securities” in a “securitization” scheme to investors and used investor money for fees, profit, fun and funding of of mortgage loans that were doomed either because they couldn’t work to begin with or because the Master Servicer had the power to pull the rug out from under them. So why are we even talking about the losses the banks took? The only thing they lost is the steady stream of illicit cash plundered from pension funds on the Ponzi sale of bogus mortgage bonds.

Everyone knows the facts, so why are government officials telling citizens that the banks gete priority and immunity from prosecution whereas the pension funds and borrowers get the shaft? The taxes, fees, fines and penalties that the banks owe each state is enough to take any state out of budgetary crisis even if it means dismantling the mega banks.

The spin line circulating around the media by paid political consultants for the banks is that the problems all stem from the slow pace of foreclosures and that we should speed it up to get it behind us. THAT is only going to attack what is left of middle class wealth. The real solution is restitution by those mega banks for perpetrating a fraud on the stable funds managed by professionals, on homeowners who had no access to the information that would have given them a clue that the closing was a sham, and the taxpayers that keep bearing the brunt of the enormous cost that siphoned out trillions from our economy.

If you or I defrauded someone we would at a minimum be required to make restitution — giving back what we took. In many cases, in a pattern of fraud and Ponzi schemes the perpetrators go to jail and pay fines. Here part of the scheme was the use of improper means to avoid recording and other fees, costs and taxes. The unwillingness of states to pursue all of this revenue can only be traced to dire warnings that are completely false: that the whole economy will drop like a stone if the mega banks get hit with paying back their illicit gains.

The opposite is true. 7,000 banks, savings and loans and credit union are currently operating and using the same financial data processing platform as the mega banks. The only thing that would happen is that our financial sector would return to a free market  economy where healthy competition and risk analysis would take the place of gambling with money and property that was always owned by others. The banks never owned the loans and never owned the mortgage bonds. They have no loss and yet we keep paying for this fictitious loss.

PRACTICE TIP: It is absolutely essential that you keep your eye on the ball — the flow of money, not as recited in documents but as shown in actual receipts and from secure original financial data processing logs showing that real money exchanged hands between the parties recited in the documents. It didn’t happen. Whether it was the original note, or an alleged sale or assignment, “for value received” are just words.

The value, the consideration, the money was never paid. The loans were passed around as Mike Stuckey said from MSNBC.com, like a whiskey bottle at a frat party. There was no payment, there was no transaction, because the entire monetary transaction never hit the books of any of the securitization players, except for the fees they took out fo the flow of money generated from tier 2 yield spread premiums, insurance, hedges and federal bailouts.

When a person asks for a loan at a real bank, they are frequently asked fro bank statements and proof of the ability to pay the down payment and to show their pattern of spending. If the borrower later claims to have made a payment that the bank says was not received, he needs to show a canceled check.That’s evidence. “Take my word for it” doesn’t get credit nor would it be very persuasive in court.

If the borrower says someone else made the payment for him, and the bank denies it then they are subject to discovery, an accounting and even a receivership. Looking for the real money and not just data entries that can be changed by anyone and certainly not in documents that can recite just about anything.

Enterprising lawyers should approach agencies they think have been cheated by the system and offer their services for a contingency fee. There is a lot of money in those hills.

Worst years Still Ahead in Florida Budgetary Crisis

Obama Won: Now What?

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Now that Obama has won a second term he is unencumbered by the need to run for re-election. But he is still stuck with a Congress that is largely bought by the banks. There are a lot of things he can do administratively without Congress and that is the path he should take.

The first issue is of course what is best for the Country and he has answered that in both word and deed — developing the middle class to restore prosperity and the hope of the American dream. The biggest thing available to him is the fiscal stimulus that would result from resolving the foreclosure crisis which is ongoing along with the corruption of title throughout the United States creating uncertainty in real estate transactions that will haunt us for decades.

That resolution is going to involve a choice of one of two paths. The one most of his agencies are following is predicated upon the assumption that the loan closings were bona fide and for value. This assumption leads to such narratives as “reckless” lending by the banks etc and leaves some room for punishing them, and providing relief for homeowners — past, present and/or future — as to wrongful foreclosure or wrongful closings. The relief for people who “borrowed more than they could pay” is going to be minimal.

The second path is the path we have been advocating here for years. It is simple. If we assume that the loan closing was defective and fraudulent (fueled by fraudulent appraisals) then the administration has a free hand to fashion resolution and settlements that are in the national interest.

By defective I mean that the mortgages were never perfected and that therefore the amount “due” is not secured. AND we have the whole issue of what is the amount due on a loan receivable that was converted to a receivable from a bond that contained vastly different terms than the note that was signed to the order of the wrong payee.

If we force an accounting for exactly where the money came from, what route it took and how the paperwork does NOT match up with the road taken by the money, then the transactions with Federal Reserve and the resolution with investors (pension funds) as well as borrowers (homeowners) can be much more easily achieved administratively.

The first route might just lead to window dressing on a crisis that will erupt in the coming year as pension funds, now underfunded through losses on the so-called mortgage-backed securities (backed by loans that never made it into the pool), start announcing that they do not have enough money to meet the pension obligations that were promised or even vested. In short, another huge bailout is on the way if he moves in that direction, this time paying for the banks’ misbehavior by giving money to the pension funds again from taxpayer dollars.

The second route relieves the banks bulging pockets of off-shore and on shore funds taken during the mortgage meltdown and distributes it as restitution for fraud against the investors and the homeowners. As I have repeatedly said, the day will come that we will be required to grant amnesty to everyone and simply share the losses in some proportions that make sense.

In the courts meanwhile, we will continue to press for the DENY and DISCOVER  strategy of following the money and opening up that can of worms. We are making progress with that as more and more judges are starting to understand that the failure to register the the REMIC as the owner or payee on the note according to state laws regarding the recording of interests in real estate, is indicative of a systemic fraud that was intended to deprive the investors of the protections they were promised through insurance and credit default swaps (the banks pocketed that money) and eventually federal bailouts (the bank pocketed that money also).

Many lawyers and pro se litigants are understandably intimidated by the prospect of taking a transaction that was once fairly simple and straightforward and denying that it ever took place. Lawyers are afraid of looking stupid denying the obvious.

But that, according to our information here, is exactly what did occur. The transaction documented at closing was NOT the financial transaction that occurred in which money actually exchanged hands.  The REMICs were excluded from the paperwork because the banks hijacked the loans in order to get the insurance and credit default swaps payable to the banks instead of the investors who put up the money.

So we are left with an actual transaction in which money exchanged hands but which is undocumented except for the wire transfer receipt and the wire transfer instructions. At the same time we are left with a documented transaction based upon a loan that never occurred between the parties to that documentation.

Obama has a lot of political capital and the bank-bought politicians in Washington and state legislatures had better take notice: the demographics won this election for Obama and those demographic include people hardest hit by foreclosures or the threat of foreclosure. Despite all the money spent, the bank-owned politicians are in a far weaker position than they thought they would be this morning.

It’s time for the President to take the initiative and push for a final resolution of this crisis, lest it fester for decades.

How Foreclosures Are Impacting Election Prospects

First, let’s clear out one thing: neither Romney nor Obama caused the wave of millions of foreclosures. In fact, while the Republicans are guilty of obstructionism in Congress and across the country, the most you could say about Republicans is that they didn’t do enough to stop the foreclosures. The same is true for a portion of Democrats. Wall Street created a scheme where the only possible ending was an enormous wave of fraudulent foreclosures.

Second as to the positions of the two presidential candidates, neither one has any bragging rights.

Romney in true Republican style said let the housing market “bottom out “— the market will take care of itself. That’s like saying to guests on a sinking ship, we’ll wait until after it sinks and then the natural action of the currents will bring your bodies up for recovery.

Romney was dead wrong on that, doesn’t understand the importance of housing in the economy and is completely out of touch with the idea that government is “of the people, by the people and FOR the people.” He said the same thing about the car industry and was dead wrong on that, so we shouldn’t expect any help from a Romney administration when it comes to housing, and therefore we shouldn’t expect anything more than a sluggish economy during his tenure, if he has one.

Obama has made some baby steps in the right direction but did not understand and perhaps still does not understand the scope of the crimes committed on Wall Street and is still acting as though the fall of the mega bank empires will have devastating results to our economy. Quite the contrary is true. And his estimates of how many homes he saved is about 10 times thee actual number.

As long as Obama listens to Wall Street about what to do about Wall Street crimes his policies are held prisoner to the people who ought to be in prison. And the criticism of his aloofness in dealing with Congress is justified. Not that Romney would be any better after more than 800 vetoes in Massachusetts as Governor.

So this isn’t about who SHOULD be president or who SHOULD control congress, it is about who WILL be president and who WILL control Congress.

The metrics are unavoidably simple and direct. Millions of people have been ejected from their homes. That is a fact. There are more than 10 million registered voters who were ejected from their homes. Why neither candidate has courted these people as voters is beyond comprehension. But the fact is that without registering to vote in their new places of abode, they won’t be voting in this year’s election.

The overwhelming majority of homeowners who were illegally foreclosed and ejected from their homes were from so-called minority groups. They included single mothers, some of whom were married to men fighting overseas — a foreclosure that is specifically prohibited under law, but that didn’t stop the banks from carrying out their illegal and fraudulent claims of securitization, assignment and keeping the huge profits from recurring resales of the same mortgages to multiple counter-parties.

In this group of foreclosures composed of “minority” or specially described voters, the overwhelming majority of them would vote for the President and Democrats running in their districts. But many of them won’t vote because of various reasons that either prohibited or interfered with their registration to vote — like desperate trying to find a job.

I cannot put an exact metric on it because all I have is anecdotal evidence. But from ALL ends of the political spectrum, it is clear that a high percentage of evicted homeowners will not vote this November. That could easily swing the election one way or the other. With more than 10 million disenfranchised voters (or some portion thereof), the deal is stacked for Romney and the Republicans.

 

South Florida Foreclosures Rising Sharply

For Legal Representation in South Florida call 520-405-1688. Neil Garfield has established an office there again, where he practiced for 30 years.

Editor’s Notes: With the increase of over 37% over last year, S. Florida is becoming a hotbed of foreclosure activity just as some “old” foreclosure areas are rising and a lot of new areas are suddenly experiencing a vast increase in foreclosure activity.

The Banks are on the move again and all I see, with a few exceptions, is lawyers and pro se litigants admitting practically everything, not knowing when to object or take control of the narrative, and then asking for relief. If you do that, you are not giving the Judge any choice.

Once you have admitted all the essential elements of the foreclosure, the forecloser has “proven” its case in satisfying the doctrine of a prima facie case. Even if you only admit most of what is alleged the rest will likely be presumed. And then, your affirmative defenses and counterclaim sound like hollow protests against the bad guys or pleas for mercy.

The judicial system exists in order to bring finality to any controversy that is properly brought within its jurisdiction. Judges are not there to give you mercy or to fashion their own ideas of justice. And the system is not  corrupt just because you lost.

Even in the appellate decisions the courts are telling us over and over again that the “facts” of the case clearly show the loan, obligation, note and mortgage were all valid. The loan receivable account is presumed to exist, and the obligation of the  borrower to repay the loan is not subject to any effective defense even if you find some evidence of fabrication or even forgery. (More on forgery and fabrication later this week).

This is why I have coined the defense tactic “Deny and Discover.” The tactic is nothing more than a restatement of common litigation where the party sued denies anything that is either not known by them or is arguably deniable, which simply means that the allegations must be PROVEN not accepted as the truth.

The wording varies but you will notice in many cases that the pleading states that the borrower entered into a deal with the mortgage originator in which a mortgage was executed. Denied. You don’t know that the originator was actually the source of the loan funding so why would you admit that? In fact, you will also find that through discovery and information obtained from Title and Securitization Analysis and Commentary that the funding came from an undisclosed third party.

So if you look at yesterday’s post on interrogatories you can see what you you should be looking for. The point is that I have decided to get personally involved in cases in South Florida (especially since I am moving back to Florida soon).

If you represent a client, be careful what you admit and don’t refer to the note as evidence of the loan because in most cases it probably is not evidence at all but rather an executory contract in which the loan was NOT funded by the originator (the payee on the note and mortgage).

You should be directing the attention of the court to the obligation, not the note. You will remember, lawyers, from first year law school, that the note is not the the obligation. It is supposed to be evidence of the obligation. And the mortgage is the tail of the dragon that can only be a perfected lien capable of foreclosure if it refers to a valid note.

If the note contains the wrong payee because that payee funded nothing and if the note differs from the repayment terms presented to the lenders (i.e., the mortgage bond issued by an unfunded and therefore non-existent REMIC) then the note is invalid both because it names the wrong party and because the terms are different than the real lender was offering.

You end up with an obligation for which there is no documentation other than the closing instructions and wire transfer receipt from a third party that shows that the transaction is not FBO (for benefit of the originator) but rather creating a common law obligation of repayment, the terms of which are yet to be determined.

There is nothing under Florida law or the law in any state that allows for imposition of an equitable mortgage with terms that are determined by the Court. Thus the obligation, while owed is not subject to a mortgage and thus not capable of being foreclosed.

If the Banks were playing this straight up, they would have funded the REMIC and put the name of the REMIC on the mortgage or the actual funding source (investment bank) on the note and mortgage, but that would have subjected them to lender liability under various laws (TILA, RESPA, Deceptive Lending) and other misbehavior.

Instead they put the name of a nominee on the note and mortgage (deed of trust) so that they could control the APPARENT movement of the loan through a false chain of securitization starting with an originator who never funded or purchased the loan in a transaction in which money exchanged hands.

This is what enabled the banks to divert money from the investor lenders and money and property from the homeowner borrowers into a wheel and spoke system of multiple sales of the loan for 100 cents on the dollar even if it was known with 100% certainty that the loan would be in default. It was all possible because the actual funding source was left off the documents.

The borrower didn’t mess this up and no incentive to do so. The borrower was required to have disclosure and choices under TILA and state laws, but didn’t get it because of the sneaky game in which they “borrowed” the loan to trade on it, get insurance, credit default swaps and bailouts for loans that the banks never funded not purchased with money.

Thus the loan closings were intentionally “botched” and designed to mislead both the borrower and the lender which was done quite successfully. Recognition of this simple fact, would stop foreclosures and restore the wealth of the middle class partially because the investor lenders would easily be able to recover their full investment from the banks that sold them.

Those investors, lest we forget are not fat cats. They are managed pension and retirement funds, for the most part, that will be begging for federal bailouts next year because of losses caused solely by the misbehavior of the banks and had nothing to do with the borrower. Those retirement accounts and pension funds are the lifeblood of the middle class.

MIAMI—South Florida recorded more than 13,200 foreclosure actions in the third quarter, a 36% year-over-year rise. Lenders also filed 35,700 notices of default so far this year in Miami-Dade, Broward, and Palm Beach counties, according to new report from CondoVultures.com.

Still, that’s a far cry from previous years. In 2009, there were 75,500 foreclosure actions in the same period and in 2010 there were 49,000 through the first three quarters, according to the report based on filings with the Clerks of the Court for each county.

Peter Zalewski, a principal with Condo Vultures, points to administrative irregularities that he calls “robo-singers” in the repossession process that caused a hiccup in the process. He tells GlobeSt.com robo-singers first surfaced late September 2010, creating a foreclosure freeze.

That slowdown continued through 2011. The nation’s five largest mortgage servicers reached the National Mortgage Settlement Agreement with the federal government and the attorneys general from 49 states to provide at least $25 billion in relief to borrowers in February 2012.

“We are tracking roughly 330,000 foreclosure filings and we’ve seen about 182,000 bank repossessions or forced sales of the properties,” Zalewski says. “Those numbers may be inflated by condo foreclosures, which usually result in multiple filings. So it appears that the worst part of the foreclosure mess is over.”

Zalewski says investment groups set up to buy the bank-owned property are waiting in the wings. As soon as the banks process the repossessions, he says, chances are the product is going move relatively quickly.

“If I were going to guestimate I’d say we are in the seventh inning of a nine inning ballgame,” Zalewski says. “We anticipate there will continue to be foreclosure filings in the upcoming quarters, then you will start to see a slow down. All indications are pointing toward 2014 getting into a growth phase.”

 

CFPB Safe Harbor Rule Would Allow Homeowners to Fight Bad Mortgages

Editor’s Comment: The practice of disregarding normal loan underwriting standards creates a claim that homeowners were tricked into loans that they could never repay. The Consumer Financial Protection Bureau, built by Elizabeth Warren under Obama’s direction is about to pass a rule that addresses that very issue. The new Rule would allow homeowners contesting foreclosure to introduce evidence challenging whether the “lender” correctly determined a borrower’s ability to repay the loan.

The details of the test for the “safe harbor” provision that is being contested are not yet known. The objective is to separate those who are using general knowledge of bad practices in the industry from those who were actually hurt by those practices. It would provide the presiding judge with a simple, clear test to determine whether the evidence submitted (not merely allegations — so the burden is still on the homeowner) are sufficient to determine that the “lender” wrote a loan that it knew or should have known could not be repaid.

The game being indirectly addressed here is that the participants in the fake securitization scheme intentionally wrote bad loans and then were successful at entering into contracts that paid insurance, credit default swap and federal bailout proceeds to the participants in the scheme even though they neither made the loan nor did the forecloser actually buy the loan (no money exchanged hands).

Those who do not meet the test would have “frivolous” claims dismissed summarily by the Judge. But they would have other grounds to sue the “lender” or the party making false claims of default and foreclosure. Those who do meet the test, would defeat the foreclosure leaving the loan in a state of limbo.

The net legal effect of the rule could be that the mortgage is void and the note is no longer considered evidence of the entire transaction — because the risk of loss on the homeowner shifts to the lender, at least in part. This would clear the path for principal reduction and new loans that would correct the corruption of title in the county title records.

The rule is coming at the behest of the Federal Reserve, which has is own problems on how to account for the trillions they have advanced for “bad” mortgages or worthless bogus mortgage bonds.

The question remains whether the purchase of these bonds conveys some right of action to collect money that the investors advanced, and who would receive that money. It also leaves open the question of whether a mortgage bond purportedly owned by the Federal reserve or even sold by the the Federal Reserve changes the players with standing to bring lawsuits or other foreclosure proceedings.

This rule, when it is finally written and passed, won’t solve all the problems but it could have a cascading effect of restoring at least some homeowners to at least a better financial condition than the one in which they find themselves.

The issue that would be interesting to see litigated is whether the homeowners who meet the test now have a claim to recover part or all of the money they paid on the mortgage thus far or if they are given an additional credit for the overage they paid — another way of reducing principal.

The bottom line is that there is recognition at all levels of government agencies —Federal and State — that there are problems with the origination of the loans and not just with the robo-signed assignments, allonges endorsements and fake powers of attorney. This recognition is going to be felt throughout the regulatory and judicial system and will redirect the attention of Judges to the reality that Wall Street banks wanted bad loans so they could make millions on each bad loan through multiple sales of the same loans using insurance, credit default swaps, TARP and other schemes to cover it all up.

http://www.housingwire.com by John Prior

Consumer Financial Protection Bureau Director Richard Cordray told a House committee Thursday that mortgage lenders would still not be safe if the bureau elects to grant a safe harbor provision to the upcoming Qualified Mortgage rule.

“The safe harbor versus rebuttable presumption is a mirage,” Cordray said. “Even safe harbor isn’t safe. You can always be sued for whether you meet the criteria or not to get into the safe harbor. It’s a bit of a marketing concept there. The more important point is are we drawing bright lines? If someone were to say to me safe harbor or anything else, I would go with a safe harbor. But I don’t think safe harbor is truly safe. And I think it oversimplifies the issue.”

Rep. Michael Grimm, R-N.Y. then right away pressed Cordray on which he would choose: a safe harbor or rebuttable presumption. The director was forced to remind him the rule was still under development and would be finalized in January.

“I have not taken a position. I have discussed the issue,” Cordray said.

Mortgage industry lobbyists have been pressing the bureau since it overtook QM rulemaking responsibility from the Federal Reserve last year to install “clear, bright lines” and a legal safe harbor that protects lenders from future homeowner suits during foreclosure.

A rebuttable presumption provision allows homeowners to introduce evidence in court challenging whether the lender correctly determined a borrower’s ability to repay the loan before it was written. But a safe harbor allows a simple test for a judge to find if the mortgage met the QM rule, and frivolous suits could be dismissed early.

The Mortgage Bankers Association even showed the CFPB that attorney fees go up to an average $84,000 for a summary judgment from $26,000 if it’s dismissed. The risk of this increased cost would be passed on to borrowers, they claim.

Some consumer advocacy groups previously said such suits are rare, and a safe harbor could clear lenders from risks down the road rule makers cannot anticipate now.

Cordray repeatedly said in the hearing Thursday that his goal on QM and upcoming rules for the mortgage market is to protect consumers but not cut off access to credit. Forcing courts to define areas left gray by regulators is not something he would permit.

“As a former attorney general in Ohio, gray areas of the law are not appreciated,” Cordray said. “They’re difficult for people trying to comply. If we write rules that are murky, they’ll end up getting resolved in courts and it will take years and be very expensive. We are making real efforts to draw very bright lines.”

jprior@housingwire.com

Illinois Tops List of Most Foreclosures

Starting last month, the mega banks began an aggressive campaign to avoid modification, settlements or principal reductions and seek foreclosures before they are forced to modify.

Yes, we can help at livinglies, but the numbers are so high that there is no way we have the resources to help everyone. I am pitching in too, having become attorney of record for some. Like you, I am tired of waiting for lawyers who get it. I get it and although I am licensed in Florida we can help anyway.

Lawyers, accountants, analysts and others should be seeing this as a major opportunity to do well for themselves and for the owners of these homes by challenging the rights of the those collectors who are taking their money now, or demanding payment or threatening foreclosure. Lawyers have been slow on the uptake and in so doing are potentially setting themselves up for future malpractice claims for anyone, whether they aid or not, who received advice from the lawyer that was not based upon the realities of the securitization scam.

Call 520-405-1688, where you can get help in documenting the fraud, help in drafting the documents, and help in finding a lawyer. If you are a lawyer involved in foreclosure defense, bankruptcy or family law, you need to to start studying the real facts and the strategies that get traction in court.

We are planning a possible new Chicago seminar for lawyers, paralegals and sophisticated investors or homeowners. But we will only schedule it if we get enough calls to indicate that the workshop will at least pay for itself and that there will be volunteers to help on the ground to set up the the venue. It is a full day of information, strategy, role-playing and tactics to use in the court room.

Editor’s Analysis: Despite loosening standards for principal reductions and modifications, the foreclosure activity across the country is increasing or about to increase due to many factors.

The bizarre reason why the titans of Wall Street want these homes underwater combined with the miscalculation of the real number does not bode well for the housing market nor the economy. With median income now reported by the Wall Street Journal at 1995 levels, and the direct correlation between median income and housing prices you only need a good memory or a computer to see the level of housing prices in 1995 — which is currently where we are headed. As the situation gets worse, the foreclosure and housing problem will become a disaster beyond the proportions seen today. And that is exactly what Wall Street wants and needs — the investors be damned. Millions of proposals far  in excess of foreclosure proceeds have been rejected and forced into foreclosure and millions more will follow.

Wall Street NEEDS foreclosures — not modifications, principal write-downs or settlements. Foreclosures are food for the lions. The reason is simple. They have already received trillions in bailouts from the Federal Government. All of that was predicated upon the homes going into foreclosure. If the loans turn out to be capable of performing, many of those trillion of dollars ( generally reported at $17 trillion, which is more than the total principal loaned out to all borrowers during the meltdown period), the mega banks could be facing trillions of  dollars in liability as the demands are properly made for payback. The banks should not be allowed to collect the money and the houses too. Neither should they be allowed to collect the bailout money and keep the mortgages.

The “underwater” calculation is far off the mark. If selling expenses and discounts are taken into consideration, the value of homes used in that calculation is at least 10% less than what is used in the underwater calculation, which would increase the number of underwater homes by at least 15% bringing the total to nearly 10,000,000 homeowners who know now that they will never see valuation even coming close to the amount owed. The prospect for strategic defaults is staggering —- totaling more than 10 million homes  — or nearly twice the number of foreclosures already “completed”, albeit defectively.

Illinois is now getting hit hard, as the foreclosure menace spreads. Jacksonville up 30% in Florida, South Florida at 22 month high, Arizona with more than 600,000 homes underwater, all the paths lead to foreclosure. With that bogus deed on foreclosure in hand, Wall Street figures it is a  get out of jail free card.

Wall Street wants the foreclosures, needs the foreclosures and is going to get them — unless they are stopped in the courts. Don’t think you won’t end up in foreclosure just because you are current in mortgage payments. They have playbook that will trick you too into a foreclosure. If anyone tells you to stop making payments, watch out!

There’s A NEW Worst State For Foreclosures

By Mamta Badkar

Foreclosure activity in the United States fell 15 percent year-over-year in August. But housing is a local story and a few regions in the country were exceptions to the trend.

With one in every 298 properties receiving a foreclosure filing, Illinois had the highest foreclosure rate in the country for the first time since 2005, according to RealtyTrac’s latest foreclosure report.

Illinois pushed usual suspects like California, Arizona, and Nevada down the list.

The prairie state’s foreclosure rate jumped 29 percent month-over-month (MoM), and 42 percent year-over-year (YoY), with 17,781 properties in the state received a foreclosure filing in August.

And every detail in the state’s foreclosure report was ugly. Foreclosure starts – the pace at which mortgages enter the foreclosure process – were up 18 percent on the year. Scheduled foreclosure auctions were up 116 percent YoY. Bank repossessions climbed 41 percent YoY.

As a state that requires foreclosures to go through the judicial process, Illinois’ foreclosure rate was “artificially low” last year, according to Daren Blomquist, vice president of RealtyTrac.

5,268 homeowners in Illinois received a total of $357.3 million in assistance as part of the $25 billion national mortgage foreclosure settlement as of June 30, 2012, according to a report by the Office of Mortgage Settlement Oversight. That’s roughly $67,817 per borrower but it’s unlikely to have a large impact in reducing foreclosures in the future.

Foreclosure activity in the Chicago-Naperville-Joliet metro area was up 44 percent YoY, making it the metro with the eighth highest foreclosure rate in the country.

Blomquist told Business Insider in an email interview that in the case of the Chicago metro area, a land bank, like the ones set up in Cleveland and Detroit that rehabilitate properties or demolish them, could help ease the burden of distressed properties.

He doesn’t however expect any improvements in Illinois’ foreclosure rate anytime soon. “The foreclosures coming through the pipeline in Illinois and other states now are likely on mortgages that the banks do not deem are a good fit for any of the foreclosure alternatives outlined in the mortgage settlement.” He does however think that a program similar to Oregon’s foreclosure mediation program could help slow down foreclosures.

This chart from RealtyTrac shows the recent surge in Illinois’ foreclosure activity as its banks and courts push through foreclosures:

illinois foreclosure activity

RealtyTrac

RealtyTrac’s report also broke down US metropolitan areas with the highest foreclosure rates.

Click Here To See The 20 Metros Getting Slammed By Foreclosures

Shadow Foreclosures: Over 500,000 Az Homeowners Underwater

Yes, we can help at livinglies, but the numbers are so high that there is no way we have the resources to help everyone. Lawyers, accountants, analysts and others should be seeing this as a major opportunity to do well for themselves and for the owners of these homes by challenging the rights of the those collectors who are taking their money now, or demanding payment or threatening foreclosure. Arizona lawyers have been slow on the uptake here and in so doing are potentially setting themselves up for future malpractice claims for anyone, whether they aid or not, who received advice from the lawyer that was not based upon the realities of the securitization scam.

Call 520-405-1688, where you can get help in documenting the fraud, help in drafting the documents, and help in finding a lawyer. If you are a lawyer involved in foreclosure defense, bankruptcy or family law, you need to to start studying the real facts and the strategies that get traction in court.

We are planning a possible new Arizona seminar for lawyers, paralegals and sophisticated investors or homeowners. But we will only schedule it if we get enough calls to indicate that the workshop will at least pay for itself. It is a full day of information, strategy, role-playing and tactics to use in the court room.

Editor’s Analysis: Despite loosening standards for principal reductions and modifications, the foreclosure activity across the country is increasing or about to increase due to many factors.

The bizarre reason why the titans of Wall Street want these homes underwater combined with the miscalculation of the real number does not bode well for the housing market nor the economy. With median income now reported by the Wall Street Journal at 1995 levels, and the direct correlation between median income and housing prices you only need a good memory or a computer to see the level of housing prices in 1995 — which is currently where we are headed. As the situation gets worse, the foreclosure and housing problem will become a disaster beyond the proportions seen today.

Wall Street NEEDS foreclosures — not modifications, principal write-downs or settlements. The reason is simple. They have already received trillions in bailouts from the Federal Government. All of that was predicated upon the homes going into foreclosure. If the loans turn out to be capable of performing, many of those trillion of dollars ( generally reported at $17 trillion, which is more than the total principal loaned out to all borrowers during the meltdown period), the mega banks could be facing trillions of  dollars in liability as the demands are properly made for payback. The banks should not be allowed to collect the money and the houses too. Neither should they be allowed to collect the bailout money and keep the mortgages.

The “underwater” calculation is far off the mark. If selling expenses and discounts are taken into consideration, the value of homes used in that calculation is at least 10% less than what is used in the underwater calculation, which would increase the number of underwater homes by at least 15% bringing the Arizona total to nearly 600,000 people who know now that they will never see valuation even coming close to the amount owed. The prospect for strategic defaults in Arizona and elsewhere is staggering —- totaling more than 10 million homes  — or nearly twice the number of foreclosures already “completed”, albeit defectively.

As stated in the article below there is, as we have been saying for years, a huge difference between home prices and home values. Home prices can be pushed up or down based upon external factors In this case it was a flood of what looked like cheap money that is now apparent was neither cheap nor even money (because the named lender never made the loan). Home values and home prices should over the long run track each other given no manipulation of the marketplace which is exactly what Wall Street did. Home values, based upon the Case-Schiller index and thousands of other economists are based upon one simple variable — median income. Median income is now at the lowest point since 1995. That means home values are, after selling expenses and discounts, less than 90% of 1995 prices.

It is simply inevitable that people will take the hit on their credit and walk away from the homes rather than pay $200,000 for on-existent equity and that is exactly what Wall Street is counting on, forcing through its manipulation of government policy and spinning to the public media. If those homes do not go into foreclosure the mega banks’ scam will reveal itself, the assets on their balance sheet will vanish because they never existed anyway and the banks will fall. Whether they are too big to fail or not, they will fail — unless foreclosures spread out across the land.

by Kristena Hansen, http://www.bizjournals.com

Roughly 40 percent of all mortgaged homes in Arizona were under water during the second quarter of 2012, the third-highest negative equity rate in the nation, according to a report released Wednesday by CoreLogic Inc.

In raw numbers, that translates to about 521,600 homeowners statewide being under water for the quarter out of roughly 1.31 million total mortgaged homes, the report said.

Arizona’s negative equity rate was much higher than the national average of 22.3 percent (10.8 million homes) of all mortgaged homes that were underwater during the same period. That nationwide figure was also a gradual improvement from the first quarter’s 23.7 percent negative equity (11.4 million homes).

CALCULATING NEGATIVE EQUITY

Negative equity, or being under water, refers to homeowners who owe more on their mortgages than their home’s present estimated value. CoreLogic determines negative equity rates by the number of underwater homeowners versus all residential properties in a certain area with an outstanding mortgage.

CoreLogic experts say the improving negative equity landscape nationwide is largely due to the recent rebound in home prices, dwindling sales of lender-owned properties and low inventory of existing homes.

Home prices and home values, however, are distinctly different. Prices represent how much homes actually sell for, while home values are only an estimate and are therefore much harder to determine.

Michael Orr, a real estate expert at Arizona State University, said home value estimates will vary widely depending on who is making the assessment. That makes it tricky to hone in on best practices for calculating negative equity, he said.

Sam Khater, deputy chief economist for CoreLogic, explained how his firm makes its determinations.

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