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MISSION STATEMENT: I believe that the mortgage crisis has produced manifest evil and injustice in our society. Pretenders with more money and more lawyers than any consumer or borrower are stealing homes from homeowners while they undermine the investments by  Pensions Funds.

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Illinois Supreme Court: Mortgage Foreclosure Based Upon Payment Default is Same as Action on Note

First Midwest Bank v Cobo

Hat Tip to Daniel Khwaja, Esq.
Attorney at Law
ph (312)-933-4015
 

There are several points in this decision worthy of reading and digesting. The principal point interesting to me is that the court correctly decided that an action on a mortgage for nonpayment is the same thing as an action on the note for nonpayment. They are both alleging defaults on the same instrument — the promissory note.

The banks try to make a distinction particularly where they are filing a second or third or fourth lawsuit on the same deal based upon the same facts. In Illinois they have a very intelligent rule which says that if you sue and then take a voluntary dismissal, and they you sue again and take a voluntary dismissal they can’t sue a third time.

In Hawaii, the banks have brought nonsense to a whole new level. Instead of seeing the mortgage as an incident to the debt or the note there are decisions there that appear to treat the mortgage as a stand alone instrument, as though there was no need for a debt to be secured by the mortgage. The mortgage simply eiss independent of the debt or the note. Going even further, there are some decisions in which the completely irrelevant doctrine of adverse possession was used to justify ignoring the statute of limitations of 6 years and to effectively change the statute of limitations to 20 years. It is difficult to see how those decisions will stand up but who knows?

All of this shows that the courts are struggling unnecessarily.  Judges are ruling like this because they don’t like the result imposed by public policy as expressed by long-standing laws enacted by legislative branches of the federal or state government. They are forgetting the essential constitutional doctrine of separation of powers. If as private citizens they don’t like legislation they can lobby for a change of the law, but like sentencing laws like minimum mandatory sentences, judges as judges have no choice but to follow the letter of the law.

Unfortunately  the myth has grown to epic proportions that judges actually do have a choice no matter what the legislative branch has stated clearly and unambiguously. Rulings based upon that belief that judges discretionary authority extends to a choice as to whether to follow the law or not are literally without authority or as we say in the law ultra vires even if confirmed by appellate courts.

This in turn leads to the uncomfortable fact that trust in our institutions is dropping daily because litigants who are individuals and who seek to invoke the protections of the law as written are routinely steamrolled by banks who are violating the law. Each time a judge does that, they remove another brick of trust in our democratic institutions.

As in Illinois where the bank sought to avoid the 2 strikes and you’re out rule, the banks have in many cases succeeded in persuading judges at every level to twist the statute of limitations into something that is unrecognizable. In Florida, for example, the statute of limitations on  contract actions (e.g. promissory notes) is 5 years. By virtue of the terms of the contract (note) the creditor has an option, upon default, to either sue based upon the missed payments or to declare the entire sum due and payable.

Obviously, if a creditor announced its acceleration of the the entire balance due, such action made the entire balance due which in turn comprised the claim against the borrower. If the creditor declined to sue for more than 5 years (which is an eternity in the banking world) they were barred from collection on the note and therefore the mortgage.

All that was obvious until the courts, including the Florida Supreme Court decided that they would insert a fictitious act by the creditor as a legal fiction such that the claim could be and actually was somehow automatically decelerated (despite the creditor’s action and declarations to the contrary — and therefore suddenly the payments were still becoming due even though no creditor on earth would accept those fictional payments. Hence they reasoned that since they had created the presumption of deceleration the payments subsequently due after acceleration were effectively renewed as to the statute of limitations wherein mortgage foreclosures were allowed even 10-12 years after acceleration. This is something straight out of Gulliver’s Travels or Dickens (see Bleak House).

All this was done because of the POLICY argument that disallowing the foreclosures would cause a financial and societal meltdown. The fact that the meltdown had already occurred anyway did not enter into calculations. The fact that courts are supposed to rule on law rather than policy seems not to have been discussed in case decisions although it was the subject of many discussions behind closed doors, some of which I know intimately well.

In times of all out war it seems logical for democratic institutions to bend far off of what is normally allowed. The mortgage meltdown and Great Recession worldwide were treated as though the government was justified in using what are considered inherent powers in the face of existential emergency. Unfortunately many economists and financial experts bought into the myth that allowing a “free house” to homeowners would be catastrophic, undermining the value of all assets etc. etc. As a result many trillions of dollars was artificially pumped into the artificial world of shadow banking. Tens of trillions of dollars worth of assets was sucked out of the world economies and landed in one place — under the direct or indirect control of bankers. The missing money still dogs us as we try to come out from under the effects of the recession.

Imagine if you will a world in which the courts had continued to apply the same rules as they had done for centuries with respect to collection of debt, foreclosure of mortgages etc.

Borrowers seeking to work out their loans would have been able to do so because the courts, in forcing the parties to mediation, would have also forced the appearance of the actual creditor instead of intermediaries whose sole interest was in pursuing foreclosure. Just like the commercial sector workouts, principal would have been reduced and terms would have been adjusted to reflect economic realities.

Claimants in foreclosure cases would have been required, just as before, to give the judge clear and convincing assurance that they were in fact the owner of the debt and were the holder of the receivable. This would have forced dismissal of most foreclosure cases. The pressure on housing prices would have substantially diminished and the landing much softer after the hyper inflation generated by fraudulent appraisals of homes (putting a price at a multiple of the fair value of the property).

Investors, realizing that their money had been spent ways not even remotely contemplated by them, would have continually sued with success, thus tearing apart the TBTF banks and raising the stature of smaller banks. Bankers would have gone to jail by the hundreds. Investors would have swept aside the convoluted fictional infrastructure of “servicing” loans and placed the loans into receiverships that were governed by people who administer the payments in large settlements to large numbers of people, protecting the rights of both sides. Losses would have been shared and apportioned between investors, banks and borrowers. Zombie foreclosures would have been virtually nonexistent.

Household income and net worth would have declined much less than we saw in the world of TBTF. Hence consumer spending would have rebounded much more quickly, driving the economy back up to full strength without allowing all the money that siphoned out (or bailed out) to stay under the control of bankers whose only thought was somehow to capture more wealth and more power.

The investors and the governments of many nations would have clawed back trillions of dollars parked overseas in a multitude of assets (what do you do with trillions of dollars?). The current threat of the shadow banking market would have been reduced or even eliminated.

And today we would have virtually no continuing fall out from the losses inflicted on everyone by the TBTF banks.

God knows how politics would have gone if Bush, Obama and the regulatory agencies had followed the law instead of letting their fear be stoked by information derived solely from the perpetrators. One thing is for certain, the intense anger of many voters would be muted by comparison and political discourse and faith in our institutions would be running at acceptable levels. The courts would not need to reinvent the Constitution and would not want to legislate from the bench.

Imagine….

How to Apply Federal TILA Rescission Rights

Bottom Line: TILA Rescission is looming as a major risk factor to banks and investors who were not informed about the risk of TILA Rescission. The oddity is that the investors were not purchasing the loans and in fact agreed to replace the income stream from borrowers with an income stream from a fake trust.

Court decisions are inching closer to allowing the explicit language of the TILA Rescission Statute 15 U.S.C. §1635 to control situations like any other law passed by Congress and signed into law, with unanimous approval from the Supreme Court of the United States (SCOTUS).

It is highly probable that TILA Rescission will be the undoing of the mass fraud perpetrated on the word in which the banks unlawfully created an illusion of being principals when there was a profit to be made but as intermediaries when there was a loss.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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  1. If we can show that the TILA Rescission Notice was sent/delivered within 3 years of the date of the presumed consummation, then it would be foolish not to raise the issue in blazing lights. But any pleading based upon the rescission should avoid any semblance of being a claim for rescission or relief based upon rescission (i.e., enforcement of the TILA Rescission statutory duties) because the statute of limitations has clearly run on that in most cases. Any such pleading should emphasize that rescission has occurred — i.e., that the written loan contract has been replaced with the statutory scheme — and that the claimants should be barred from avoiding that simple fact. Further, given the same statute of limitations in TILA, the claimants are now barred from pursuing the debt which has expired. Ignoring the rescission was a fatal decision by the claimants who lost not only their right to enforce the paper instruments, but the debt as well.
  2. Notwithstanding some erroneous decisions rendered by state court and even federal courts (other than SCOTUS) there is no statute of limitations that applies to a notice of rescission sent within 3 years of the supposed consummation. Rescission is an event (like a  deed) not a claim. It is effective “by operation of law.”
  3. If the proof shows that the notice of TILA rescission was sent more than 3 years after the presumed date of consummation it is my opinion that SCOTUS will eventually treat it the same as the above paragraph. BUT, a big caveat here, is that SCOTUS might throw a bone to the banks. They could do that by saying that rescission notices that appear from their face to be sent after the three year “expiration” date could be reviewed by the court and declared void ab initio with affirmative pleading, thus removing the judicial standing impediment that the banks face (they have no creditor who would fulfill the requirements of judicial standing). Thus while my analysis shows that SCOTUS and  Congress clearly see the TILA rescission statute as a procedural statute and not a substantive one, there remains a possible interpretation by the high  court that would eviscerate rescissions outside the three year limitation. This is also the opinion of many lawyers who have carefully analyzed the situation, like Beth Findsen in Arizona. I don’t think that is right, but I can see how that could occur.
  4. The 3 year limitation is a viable defense for the creditor, just as the other restrictions on TILA rescission (lack of disclosures, purchase money mortgage etc.). All defenses must be raised as affirmative pleading to vacate the rescission or they are nothing at all. An affirmative pleading would be a lawsuit to vacate the rescission or affirmative defenses raised in a lawsuit brought by the borrower. But since rescission automatically voids the note and mortgage, those instruments cannot be used to plead or even imply standing. 
  5. Multiple deliveries of the rescission notice are a two edged sword particularly if they each bear different dates. Oddly this draws in a separate analysis. If rescission is truly an event as Congress and SCOTUS (and I) have stated, then NOBODY can rescind the rescission without a court order — not even the borrower. Any act undertaken in spite of the existence of a deed or rescission is void, in the sense of a wild deed, particularly if it is recorded in the county records. A new agreement could be reached but the rescission stands until a court order is entered changing the situation. The new agreement would likely be subject to disclosure requirements.
  6. What all of this means is that title could not have been changed even with court orders after the sending/delivery of the TILA Rescission. Here the high court will have a more difficult time allowing any foreclosure sale to stand in the absence of an affirmative pleading seeking to vacate the rescission and an order granting the demand. Title issues are a matter within the bounds of state law, not Federal law except where preempted, as in the TILA Rescission statute.
  7. But in the absence of an affirmative pleading, a trial on the merits, and a final  judgment or order, the state courts would have no jurisdiction over the subject matter and avoidance of the TILA Rescission would be without authority to do so under the US Constitution Article III. The logic is simple, the paper instruments  upon which the foreclosure was brought do not exist and did not exist at the time of the foreclosure sale. Hence title could not change without due process — i.e., a trial on the issue of whether the rescission should be vacated. The caveat here is that SCOTUS could again carve out something for the banks, because this would leave millions of homeowners retaining title to their homes long after the foreclosure sale. They might invent some doctrine based upon laches or some such doctrine that would bar homeowners from asserting their title after some period of time after the foreclosure sale.

California Form Hiding in Plain Sight

In cases where the CA foreclosure is being filed on behalf of the named Trustee (e.g., US Bank, Deutsch Bank etc.) for the certificates or the certificates holders — or where the it is ambiguous as to what or who the named trustee is asserted to be representing, there is a form demanding disclosure of the certificate holders and a requirement that they file an affidavit stating that they are beneficiaries of the deed of trust and agreeing to which other beneficiaries, owning more than 50% of the beneficial interest under the deed of trust may represent all of them.

Where the assertion is clearly that US Bank (or whoever) is trustee for a specifically named Trust, this would not seem to apply — unless you show that they can’t prove the trust exists and owns the subject loan.

In the absence of an agreement then it would appear that all holders of the certificates must be disclosed. If someone claims to represent the holders of certificates that party would need to show the source of its authority to directly represent the certificate holders. Remember that certificate holders are not, contrary to popular error, beneficiaries.

This might be an effective tool to force the pretenders to assert that the vehicle is the trust which is a beneficiary qualifying under the laws of California or any other states that has passed a similar statute.

Remember there is a huge difference between the beneficiary(ies) under the deed of trust and the beneficiaries (nonexistent) of a REMIC Trust (nonexistent).

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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information on Majority Action Affidavit -3

Majority Action affidavit form – Exhibit B (1) (1)

california/2013/code-civ/division-3/part-4/title-14/chapter-2/article-1/section-2941.9

2013 California Code
Civil Code – CIV
DIVISION 3. OBLIGATIONS
PART 4. OBLIGATIONS ARISING FROM PARTICULAR TRANSACTIONS
TITLE 14. LIEN
CHAPTER 2. Mortgage
ARTICLE 1. Mortgages in General
2941.9
Universal Citation: CA Civ Code § 2941.9 (2013)

(a) The purpose of this section is to establish a process through which all of the beneficiaries under a trust deed may agree to be governed by beneficiaries holding more than 50 percent of the record beneficial interest of a series of notes secured by the same real property or of undivided interests in a note secured by real property equivalent to a series transaction, exclusive of any notes or interests of a licensed real estate broker that is the issuer or servicer of the notes or interests or any affiliate of that licensed real estate broker.

(b) All holders of notes secured by the same real property or a series of undivided interests in notes secured by real property equivalent to a series transaction may agree in writing to be governed by the desires of the holders of more than 50 percent of the record beneficial interest of those notes or interests, exclusive of any notes or interests of a licensed real estate broker that is the issuer or servicer of the notes or interests of any affiliate of the licensed real estate broker, with respect to actions to be taken on behalf of all holders in the event of default or foreclosure for matters that require direction or approval of the holders, including designation of the broker, servicing agent, or other person acting on their behalf, and the sale, encumbrance, or lease of real property owned by the holders resulting from foreclosure or receipt of a deed in lieu of foreclosure.

(c) A description of the agreement authorized in subdivision (b) of this section shall be disclosed pursuant to Section 10232.5 of the Business and Professions Code and shall be included in a recorded document such as the deed of trust or the assignment of interests.

(d) Any action taken pursuant to the authority granted in this section is not effective unless all the parties agreeing to the action sign, under penalty of perjury, a separate written document entitled Majority Action Affidavit stating the following:

(1) The action has been authorized pursuant to this section.

(2) None of the undersigned is a licensed real estate broker or an affiliate of the broker that is the issuer or servicer of the obligation secured by the deed of trust.

(3) The undersigned together hold more than 50 percent of the record beneficial interest of a series of notes secured by the same real property or of undivided interests in a note secured by real property equivalent to a series transaction.

(4) Notice of the action was sent by certified mail, postage prepaid, with return receipt requested, to each holder of an interest in the obligation secured by the deed of trust who has not joined in the execution of the substitution or this document.

This document shall be recorded in the office of the county recorder of each county in which the real property described in the deed of trust is located. Once the document in this subdivision is recorded, it shall constitute conclusive evidence of compliance with the requirements of this subdivision in favor of trustees acting pursuant to this section, substituted trustees acting pursuant to Section 2934a, subsequent assignees of the obligation secured by the deed of trust, and subsequent bona fide purchasers or encumbrancers for value of the real property described therein.

(e) For purposes of this section, affiliate of the licensed real estate broker includes any person as defined in Section 25013 of the Corporations Code who is controlled by, or is under common control with, or who controls, a licensed real estate broker. Control means the possession, direct or indirect, of the power to direct or cause the direction of management and policies.

(Added by Stats. 1996, Ch. 839, Sec. 3. Effective January 1, 1997.)

 

9th Circuit Creeps Up the Ladder in Hoang TILA Rescission Breakthrough

This case comes the closest yet to the truth about TILA Rescission. And it requires that TILA Rescission be applied — if there is an action to enforce within the statute of limitations covering contract actions in the state in which the property is located.

The court’s conclusion that there must be a statute of limitations is derived from its erroneous assumption AGAIN that TILA rescission is a claim rather an event. Jill Smith has done an outstanding job of moving us toward the final step in TILA REscission, to wit: TILA Rescission is procedural and it is an event. Once delivered it has ended the loan, the note and the mortgage by operation of law, just as the statute says. There is no statute of limitations on an event because it is not a claim.

Only a claim for breach of TILA duties could be subject to a statute of limitations. Failure to file suit, as specifically and expressly pointed out by a unanimous SCOTUS decision in Jesinoski does not affect the effect of TILA rescission. Courts don’t like it but that is the law and now this court has moved up to the precipice of saying exactly that.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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Hoang v Bank of America 12-6-18

See also ! Financial Freedom Acquisition LLC v. Standard Bank & Trust Co., 2015 IL 117950

! Financial Freedom Acquisition v Standard Bank -Analysis

! If You Own Your Home in a Land Trust

TILA Rescission is no more a claim than a warranty deed. It just exists. You don’t need to sue periodically because by operation of law (the exact wording of the TILA REscission statute) the deed exists and confirms title. In the same way TILA Rescission eliminated the lien encumbrance, the note and even the loan agreement and replaces it with a statutory “agreement” to unwind the debt.

The note and mortgage remain void throughout any time period after the notice of rescission is sent. This court gets close but veers off what they obviously believe is a radical end result — i.e., that the right to claim the debt expires if the creditor fails to comply with the duties imposed by TILA REscission and refuses to even acknowledge the existence of the rescission. That “radical result” is precisely what is mandated by the statute and the courts have no right to legislate it away. The legislature has that power but not the courts. Simple as that.

Contrary to what this court is saying a demand for injunction (as one would do under authority of a valid warranty deed) is NOT a lawsuit to enforce the rescission. The rescission is already in force. And the note and mortgage no longer exist. A Lawsuit to enforce the rescission would ONLY be a lawsuit that seeks to enforce the statutory duties during the time allowed by the statute of limitations in TILA which everyone agrees does not apply.

Ultimately the statute says that regardless of ANY defense a claimed creditor might have (including limitations which is an affirmative defense) the rescission is effective when delivered (mailed under USPS). Even the three years can only be raised by a party with standing and who can prove it WIThout reference to the note or mortgage. Real facts showing they paid for the debt . Those facts don’t exist and most people know it. But because of the “free house” myth they continue to flout the law and legislature from the bench.

But this case almost gets me over the hump where I can say “I told you so.”

Here are some notable quotes from this very important decision.

If a creditor fails to make required disclosures under the Truth in Lending Act (TILA), borrowers are allowed three years from the loan’s consummation date to rescind certain loans.1 15 U.S.C. § 1635(f). Borrowers may effect that rescission simply by notifying the creditor of their intent to rescind within the three-year period. Jesinoski v. Countrywide Home Loans, 135 S. Ct. 790, 792 (2015). TILA does not include a statute of limitations outlining when an action to enforce such a rescission must be brought

On April 15, 2013 (within the three-year period), Hoang sent the Bank notice of intent to rescind the loan under TILA. The record reflects that the Bank took no action in response to receiving the notice.

Once a borrower rescinds a loan under TILA, the borrower “is not liable for any finance or other charge, and any security interest given by the [borrower] . . . becomes void upon such a rescission.” 15 U.S.C. § 1635(b); see 12 C.F.R. § 226.23(a)(3). Within 20 days after the creditor receives a notice of rescission, the creditor must take steps to wind up the loan. 15 U.S.C. § 1635(b). “Upon the performance of the creditor’s obligations under this section, the [borrower] shall tender the property to the creditor . . . [or] tender its reasonable value.” Id. Once both creditor and borrower have so acted, the loan has been wound up.

However, the Supreme Court altered that usual procedure in Jesinoski. It eliminated the need for a borrower to bring suit within the three-year window to exercise TILA rescission. Instead, “rescission is effected when the borrower notifies the creditor of his intention to rescind.” Jesinoski, 135 S. Ct. at 792. “[S]o long as the borrower notifies within three years after the transaction is consummated, his rescission is timely. The statute does not also require him to sue within three years.”

A party may amend its pleading with the court’s leave, which “[t]he court should freely give . . . when justice so requires.” Fed. R. Civ. P. 15(a)(2). “This policy is to be applied with extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (internal quotation marks omitted). “Dismissal with prejudice and without leave to amend is not appropriate unless it is clear on de novo review that the complaint could not be saved by amendment.” Id. at 1052. Leave to amend can and should generally be given, even in the absence of such a request by the party. See Ebner v. Fresh, Inc., 838 F.3d 958, 963 (9th Cir. 2016) (“[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.”).

 

Tonight! 2 Cases You Should Use Against False Claims of Securitization And Against Fake Defenses to TILA Rescission

Thursdays LIVE! Click in to the Neil Garfield Show

with Charles Marshall and Bill Paatalo

Or call in at (347) 850-1260, 6pm Eastern Thursdays

Today with Bill Paatalo we will discuss the Illinois Supreme Court case of Financial Freedom Acquisition LLC (One West Bank, N.A., Appellee) v. Standard Bank and Trust Co et al., Appellant. This case has many elements of interest to our listeners, and established the following legal points:

1. Illinois Land Trusts can be treated as consumers for purposes of the TILA rescission statute;

2. An Obligor to a TILA transaction need not be the same entity or person as the consumer-borrower, the latter of whom is the party to whom credit is extended–it is the Obligor who has and retains the right to rescind under TILA;

3. Reverse mortgages are by definition consumer credit transactions, an implication of which–to be discussed today on the Show–but not addressed in the IL Supreme Court opinion–is that institutional Defendants who sometimes escape rescission claims through claiming mortgages are not consumer credit transactions–will be barred from so escaping when the mortgage at issue is a reverse mortgage.

4. When certain issues on appeal are not part of a lower court order involving the ending of the lower court case, they may be raised and discussed, on appeal, notwithstanding being absent from the lower court order.

Financial Freedom v Standard

Also time permitting we will revisit the Cashmere Valley Bank case recently discussed on Neil’s Show. The Cashmere case describes fairly clearly the way in which securitization is intended to work in theory.

The Cashmere case must be read in the context of knowledge that (1) the written instruments used in securitization of residential mortgages did not follow the theory and that (2) the actual practices and actions undertaken by the banks did not follow either the theory behind securitization nor the documents or what the documents implied. If the banks had followed the theory, which was perfectly legal and of sound business sense, there would have been modifications and workouts rather than foreclosures and there would have been good loans that didn’t bite people in the arse after they signed.

Cashmere-v-Dept-of-Revenue

Note from Neil: AND BEAR IN MIND: Lending does not occur in a caveat emptor world (Let the buyer beware). Federal law says just the opposite. It is the lender who must beware. Lots (most) people treat the borrowers as though they were the culprits, their eyes were too big, their judgment too poor. Federal law Truth in Lending Act) puts the burden of affordability and viability squarely on the back of the lender, who knows far more about the loan the the context of the loan than the borrower or anyone else.

I would like to see more people asserting assumption of risk or something like that in a court of equity in which the foreclosure is pending. This is not a case where nobody knew the market was going to collapse. All the banks knew it and bet on it.

Assumption of risk is a doctrine that is ordinarily applied in tort actions. But the concept of it is applicable to these loans. The banks knew perfectly well that most of the loans would fail in some respect and frankly didn’t care because they were not lending any money. Yet they were the ones underwriting the loans.

Those facts should have been disclosed and in the latter case are clearly required disclosures to prevent the loan from being dubbed a predatory table funded loan.

The fact that some actions under the statute for monetary relief are barred by applicable statute of limitations should not prevent the borrower from raising these gross violations as defenses in a court of equity where the claimant has unclean hands. Had these malevolent actions not taken place neither the borrower nor the investors would have suffered the catastrophic injuries that overcame everyone except the banks.

Another Glitch from Wells Fargo Admitted by WFB (oops 570 homes foreclosed.)

Wells is trying to buy its way out if this one with offers of $25,000 to people who lost homes worth hundreds of thousands of dollars. This is the tip of the iceberg of liability for WFB, Citi, BofA, Chase and others who have very soft and porous balance sheets where liabilities are reported. Sure they have unreported trillions offshore, but the current reporting doesn’t come close to the actual liabilities of these predatory entities.

see Yes Another “Glitch” by Wells Fargo

To find out if you were one of the 570 start with finding out if Wells caused your foreclosure and the start digging to see how to determine whether your home was one of those foreclosed. We can probably help, first fill out our intake registration form. (FREE) CLICK HERE TO SUBMIT REGISTRATION. 

It may seem like free money but actually it is blood money. They owe you a lot more than $25,000 from what I can see here. Check with counsel before you go accepting pennies on the dollar of a valuable claim. 

 

How to Undermine the Credibility of Deutsch, Wells Fargo et al.

The entire securitization strategy is thus predicated upon the ability to convince a judge to presume facts, even if they are untrue.

The pattern of misconduct revealed in the track record of the major banks could be used to undermine the legal presumptions and force the proof of the loan, purchase etc.

BUT the major banks don’t often appear as the claimant in foreclosure cases even though it is they who are pulling the strings and who will receive the proceeds of foreclosure and it is they who receive the proceeds of mortgage payments. Neither the investors nor the nonexistent trusts see one penny.

So the challenge is to tie in the major bank who is the underwriter of the certificates sold in the name of the fake trust and who also names itself as “Master Servicer” of the fake trust with essentially no duties.

This requires a sea change in how foreclosure defense is conducted. And it is a rough road.

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[IN RESPONSE TO SOME QUESTIONS ABOUT THIS ARTICLE, I AM NOT DOING A 180. IN ITS SIMPLEST FORM WE ARE TALKING ABOUT TWO (2) BANKS — ONE WHO RENTS ITS NAME OUT TO BE USED “AS TRUSTEE” TO THE OTHER BANK WHO IS THE UNDERWRITER OR SUCCESSOR TO THE UNDERWRITER AND ALSO WHO SERVES AS “MASTER SERVICER” OF A NONEXISTENT TRUST. — THE UNDERWRITER IS NOT REALLY ACTING AS UNDERWRITER NOR AS MASTER SERVICER. IT IS STILL AN INTERMEDIARY BETWEEN INVESTORS AND BORROWERS BUT ASSUMES THE ROLE OF PRINCIPAL.]

Clients keep asking the same question: they point to the most recent news article detailing the corruption and malfeasance of the banks and ask how knowledge of such behavior could help their foreclosure defense. Remember that the news articles are not convictions proving they did what is alleged. So you would have to prove that the alleged acts in other cases were (a) actual and (b) relevant to your specific case in foreclosure.

People who go to court sounding off about the reportedly bad acts by their opponent gain nothing. In fact, it weakens their case because they sound like conspiracy theorists.

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However, I am working on a strategy of bringing in a pattern of bad acts to use as a prospective tool to defeat the legal presumptions on which the entire foreclosure claim rests. This requires a knowledge of the burden of proof. So in order to defeat the presumptions you only need to show that a reasonable inference can be made that the documents or testimony might be fabricated or misleading and that therefore the court should use no presumptions of fact or law and require actual proof from the claimant. This is possible.
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Such a ruling by the court will most certainly end the case because there are no facts in real life on which the claimants in most foreclosure can win the case. Their success rests solely on presumptions of validity, authenticity and conclusions.
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Legal presumptions can be applied as a convenience if the source of the document or act is credible. The challenge here is to show that the supposed evidence from which the legal presumptions are then applied is self-serving, not produced by a party who is neutral as to the outcome and having a pattern of malfeasance and negligence etc., such that there is a reasonable inference that documents produced by them in a foreclosure case are suspect, and therefore they are not entitled to the presumption. This is not a high bar.
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Hence they must actually prove the loan, the purchase of the loan the ownership, the right to service etc. And they must prove the actual existence of the foreclosing party — remembering that when a trust is implied as the foreclosing party it most likely does not exist and therefore could not possibly own anything much less your loan.
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Your opposition will fight tooth and nail to avoid such a ruling. They know that there is no case they can prove without employing the use of legal presumptions that results in implied findings of fact that are opposite to the true facts. The entire securitization strategy is thus predicated upon the ability to convince a judge to presume facts, even if they are untrue.
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Your strategy should be limited to undercutting those presumptions and raising reasonable inferences and questions about the self-serving documents that are being used by attorneys to lead the court into applying legal presumptions that should not be applied.
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Note to foreclosure defense lawyers: Deep down inside most of you believe that foreclosure defense consists of the use of technicalities to make mountains out of mole hills. You still believe that the debt is valid, your client owes it, your client defaulted and that the foreclosure is a valid exercise of collateral protection. So you don’t want to be associated with game-playing and delays because you think that it will negatively impact your standing in the legal community. What you are doing is erroneously applying the legal presumptions before you enter the courtroom. Take away those legal presumptions and look at the case from a real world prospective, not from what you think must be true. And think about your standing in the your legal community when you start winning these cases.
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