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CHAIN OF TITLE by David Dayen. Available on Amazon

LISTEN LIBERALS! by Thomas Frank. Available on Amazon and Kindle.

Pretender Lenders: How Tablefunding and Securitization Go Hand in Hand” By William Paatalo and Kimberly Cromwell. CLICK:

CFPB: Prohibition of Unfair, Deceptive, or Abusive Acts or Practices in the Collection of Consumer Debts

Business Concepts

Unconscionable Acts by Debt Collectors


Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd Frank Act), all covered entities are legally required to refrain from committing unfair, deceptive, or abusive acts or practices (collectively, UDAAPs) in violation of the Act.
Certain acts or practices related to the collection of consumer debt that could, depending on the facts and circumstances, constitute UDAAPs prohibited by the Dodd-Frank Act. Whether conduct like that described in this bulletin constitutes a UDAAP may depend on additional facts and analysis.

The examples described in this bulletin are not exhaustive of all potential UDAAPs. The Bureau may closely review any covered person or service provider’s consumer debt collection efforts for potential violations of Federal consumer financial laws.
A. Background

UDAAPs can cause significant financial injury to consumers, erode consumer
confidence, and undermine fair competition in the financial marketplace. Original
creditors and other covered persons and service providers under the Dodd-Frank Act
involved in collecting debt related to any consumer financial product or service are
subject to the prohibition against UDAAPs in the Dodd-Frank Act.
In addition to the prohibition of UDAAPs under the Dodd-Frank Act, the Fair Debt
Collection Practices Act (FDCPA) also makes it illegal for a person defined as a “debt
collector” from engaging in conduct “the natural consequence of which is to harass,
oppress, or abuse any person in connection with the collection of a debt,” to “use any false, deceptive, or misleading representation or means in connection with the collection of any debt,” or to “use any unfair or unconscionable means to collect or
attempt to collect any debt.”

The FDCPA generally applies to third-party debt collectors, such as collection agencies, debt purchasers, and attorneys who are regularly engaged in debt collection.

All parties covered by the FDCPA must comply with any obligations they have under the FDCPA, in addition to any obligations to refrain from UDAAPs in violation of the Dodd-Frank Act.

Although the FDCPA’s definition of “debt collector” does not include some persons who collect consumer debt, all covered persons and service providers must refrain from committing UDAAPs in violation of the Dodd-Frank Act.
B. Summary of Applicable Standards for UDAAPs

1. Unfair Acts or Practices

The Dodd-Frank Act prohibits conduct that constitutes an unfair act or practice. An
act or practice is unfair when:

(1) It causes or is likely to cause substantial injury to consumers;
(2) The injury is not reasonably avoidable by consumers; and
(3) The injury is not outweighed by countervailing benefits to consumers or to
A “substantial injury” typically takes the form of monetary harm, such as fees or
costs paid by consumers because of the unfair act or practice. However, the injury
does not have to be monetary.

Although emotional impact and other subjective
types of harm will not ordinarily amount to substantial injury, in certain
circumstances emotional impacts may amount to or contribute to substantial injury.
In addition, actual injury is not required; a significant risk of concrete harm is
sufficient. An injury is not reasonably avoidable by consumers when an act or practice
interferes with or hinders a consumer’s ability to make informed decisions or take
action to avoid that injury.

Injury caused by transactions that occur without a consumer’s knowledge or consent is not reasonably avoidable. Injuries that can only be avoided by spending large amounts of money or other significant resources also may not be reasonably avoidable.

Finally, an act or practice is not unfair if the injury it causes or is likely to cause is outweighed by its consumer or competitive benefits.

Established public policy may be considered with all other evidence to determine
whether an act or practice is unfair, but may not serve as the primary basis for such

2. Deceptive Acts or Practices

The Dodd-Frank Act also prohibits conduct that constitutes a deceptive act or
practice. An act or practice is deceptive when:

(1) The act or practice misleads or is likely to mislead the consumer;
(2) The consumer’s interpretation is reasonable under the circumstances;
(3) The misleading act or practice is material.
To determine whether an act or practice has actually misled or is likely to mislead a
consumer, the totality of the circumstances is considered.

Deceptive acts or practices can take the form of a representation or omission.

The Bureau also looks at implied representations, including any implications that statements about the consumer’s debt can be supported. Ensuring that claims are supported before they are made will minimize the risk of omitting material information and/or making false statements that could mislead consumers.

To determine if the consumer’s interpretation of the information was reasonable
under the circumstances when representations target a specific audience, such as
older Americans or financially distressed consumers, the communication may be
considered from the perspective of a reasonable member of the target audience.
statement or information can be misleading even if not all consumers, or not all
consumers in the targeted group, would be misled, so long as a significant minority would be misled.

Likewise, if a representation conveys more than one meaning to
reasonable consumers, one of which is false, the speaker may still be liable for the
misleading interpretation.

Material information is information that is likely to
affect a consumer’s choice of, or conduct regarding, the product or service.
Information that is likely important to consumers is material.
Sometimes, a person may make a disclosure or other qualifying statement that might
prevent consumers from being misled by a representation or omission that, on its
own, would be deceptive. The Bureau looks to the following factors in assessing
whether the disclosure or other qualifying statement is adequate to prevent the
deception: whether the disclosure is prominent enough for a consumer to notice;
whether the information is presented in a clear and easy to understand format; the
placement of the information; and the proximity of the information to the other
claims it qualifies.
3. Abusive Acts or Practices

The Dodd-Frank Act also prohibits conduct that constitutes an abusive act or
practice. An act or practice is abusive when it:

(1) Materially interferes with the ability of a consumer to understand a
term or condition of a consumer financial product or service; or
(2) Takes unreasonable advantage of –
(A) a consumer’s lack of understanding of the material risks, costs,
or conditions of the product or service;
(B) a consumer’s inability to protect his or her interests in selecting
or using a consumer financial product or service; or
(C) a consumer’s reasonable reliance on a covered person to act in
his or her interests.
It is important to note that, although abusive acts or practices may also be unfair or
deceptive, each of these prohibitions are separate and distinct, and are governed by
separate legal standards.

C. Examples of Unfair, Deceptive and/or Abusive Acts or Practices
Depending on the facts and circumstances, the following non-exhaustive list of
examples of conduct related to the collection of consumer debt could constitute
UDAAPs. Accordingly, the Bureau will be watching these practices closely.

• Collecting or assessing a debt and/or any additional amounts in
connection with a debt (including interest, fees, and charges) not
expressly authorized by the agreement creating the debt or permitted
by law.

• Failing to post payments timely or properly or to credit a consumer’s account with payments that the consumer submitted on time and then charging late fees to that consumer.

Taking possession of property without the legal right to do so.
• Revealing the consumer’s debt, without the consumer’s consent, to the consumer’s employer and/or co-workers.
• Falsely representing the character, amount, or legal status of the debt.
• Misrepresenting that a debt collection communication is from an
• Misrepresenting that a communication is from a government source
or that the source of the communication is affiliated with the
• Misrepresenting whether information about a payment or nonpayment
would be furnished to a credit reporting agency.

• Misrepresenting to consumers that their debts would be waived or
forgiven if they accepted a settlement offer, when the company does
not, in fact, forgive or waive the debt.

• Threatening any action that is not intended or the covered person or
service provider does not have the authorization to pursue, including
false threats of lawsuits, arrest, prosecution, or imprisonment for
non-payment of a debt.

Again, the obligation to avoid UDAAPs under the Dodd-Frank Act is in addition to
any obligations that may arise under the FDCPA. Original creditors and other
covered persons and service providers involved in collecting debt related to any
consumer financial product or service are subject to the prohibition against UDAAPs
in the Dodd-Frank Act. The CFPB will continue to review closely the practices of
those engaged in the collection of consumer debts for potential UDAAPs, including
the practices described above. The Bureau will use all appropriate tools to assess
whether supervisory, enforcement, or other actions may be necessary.

For a copy of this document click here: 201307_cfpb_bulletin_unfair-deceptive-abusive-practices.

Bill Paatalo Investigations: Washington Mutual Bank Sold These 67,529 Toxic Loans, And Not One Single Foreclosure By The Investors?

 Having investigated the WaMu/FDIC/Chase fact pattern for nearly seven-years now, and having investigated hundreds of foreclosure cases where JPMorgan Chase claims sole ownership of specific Washington Mutual Bank loans by virtue of the “Purchase & Assumption Agreement” (PAA) with the FDIC, one fact is now well established – no schedule or inventory of assets listing any specific WMB mortgage loan acquired by JPMC exists, or has ever been produced or disclosed. The reason for this fact is that the vast majority of residential mortgage loans were securitized through WaMu’s “Off-Balance Sheet Activities,” meaning WMB sold their loans prior to the FDIC Receivership. Many of these prior sales transactions by WMB to private investors went undocumented, and were kept outside the prevue of regulators, the borrowers, and the general public. For roughly the past 8-years, Chase has been foreclosing on thousands of these previously sold WMB loans in its own name as mortgagee and beneficiary of the security instruments, when by Chase’s own admissions to numerous borrowers, the loans were sold to private investors.

Chase Admits, Then Denies

In cases I have reviewed all across the country, borrowers have made and continue to make, inquiries to their servicer “Chase” for the identity of the beneficial owners / investor(s) of their WaMu loan(s) only to be told,

“Your loan was sold into a public security managed by JPMorgan Chase Bank, N.A. and may include a number of investors. As the servicer of your loan, Chase is authorized by the security to handle any related concerns on their behalf” (See:   Chase Private Investor Letters ).

In both cases involving these two disclosure letters, after having made these admissions to the borrowers, JPMorgan Chase reversed itself in court by taking the position that it was the sole owner of the loans by virtue of the PAA, and there were no investors associated with these loans because “WaMu never sold or securitized the loans.”

But now Chase has tripped itself by disclosing an actual investor in complete contradiction of its publicly recorded assignment. (See:   Chase Discloses Investor WaMu 2007-FLX1 but assigns deed to itself in 2012.)

Here, Chase executes this self-serving assignment to itself from the FDIC declaring beneficial rights to the deed of trust even though they disclosed to the borrower that the owner of the loan is “Deutsche Bank Nat Trust Co as Trustee for WAMU 2007-FLEX1.” This particular investor trust was the subject of litigation within the Washington Mutual, Inc. bankruptcy proceeding (See:  WaMu Inc Investor Complaint 2010.)

According to the complaint, the WAMU 2007-FLEX1 was a part of three asset trusts set up by Washington Mutual Preferred Funding, LLC (WMPF), who purchased the assets from WMB in 2006 and 2007. The following asset trusts were labeled “Preferred Trust Securities”:


(Washington Mutual Home Equity Trust I)

(WaMu 2006-OA1)

(WaMu 2007-FLEX1)


Per the Complaint:

16. On September 26, 2008, as a result of the FDIC’s takeover of Washington Mutual Bank and the bankruptcy of Washington Mutual, Inc., Plaintiffs’ investments in the Preferred Trust Securities automatically converted into preferred stock of Washington Mutual, Inc., and thereby rendered worthless.  

260. Upon seizing WaMu, the FDIC immediately sold off WaMu’s assets and bank deposits to the highest bidder. (WaMu’s debt and preferred equity securities obligations, such as those owned by Plaintiff, were not part of the transaction.)

Very little information is available regarding these “Preferred Trust Securities” outside of this “Confidential Offering Circular.” (See:  Asset Trusts Offering Circular.)

However, one thing is crystal clear. WMB sold “67,529” of these toxic loans totaling “$10,947,602,313.00” to WMPF, and was reimbursed for the sale of these assets. WMPF then sold all assets backing these “67,529” loans to investors in these securities. (See: “Appendix E” of Offering Circular.)

Combined Asset Trust Data 67529 loans

These loans were some of the worst, fraud-laced loans originated by WMB, yet my initial investigation has yet to find a single foreclosure action (judicially or non-judicially) in the name of any of these investor trusts. How can this be, you ask? Simple, because JPMorgan Chase has decided to claim ownership of these loans, and continues to foreclose and harvest these assets in its own name by concealing these facts, and denying in Courtrooms that WMB ever sold or securitized these loans. This fraud story, which Chase and its attorneys continue to stick to, is no longer believable or sustainable based on the cumulative evidence compiled in the public domain. I can pretty much assure that all 67,529 of these loans have a non-existent and fatally defective chains of title.

But here’s something even more dubious and suspicious. In “JP Morgan Chase & Co.’s” 10-K filings with the SEC for fiscal years 2009-2013, “Washington Mutual Home Equity Trust I,” “WaMu 2006-OA1,” and “WaMu 2007-FLEX1” are all listed as subsidiaries of the company, but vanished as subsidiaries beginning in 2014. What I suspect is that these 67,529 loans, or whatever is left of them, were sold by Chase in hedge fund debt purchases in 2014, along with the non-existent chains of title. I’ll save that for another article.

These trusts were set-up as Delaware Statutory Trusts with REMIC status. In virtually all PSA agreements for DST’s that are visible, to which the DST’s are irrevocable and elect REMIC status, they are required to maintain complete separateness from any other person or entity. Chase’s naming of these trusts as subsidiaries certainly smells “fishy.” At best, Chase acquired servicing rights to these loans, but even this should not be assumed. How a servicer can take control of a REMIC Trust and claim it as a subsidiary on its 10-K is beyond me, but I’d sure like to see the documentation granting this authority.

In the meantime, someone explain to me how tens of thousands of foreclosures have been conducted in the names of private MBS REMIC trusts since the crash in 2008, and not one foreclosure appears to have occurred within this toxic group of 67,529 loans in the name of Deutsche Bank as Trustee for these trusts. The odds are virtually impossible.


Bill Paatalo – Private Investigator – OR PSID# 49411




Vermont Dissent: What’s Wrong with a “Free House?”

As I am on the road, I will limit my comments.

see Cenlar FSB v. Joseph L. Malenfant FREE HOUSE Cenlar FSB v. Joseph L. Malenfant 2016-2015-vt-93

The dissenting justice gets it right. In essence he is saying that it isn’t the borrower’s fault that these files, these loans, these documents are all screwed up and that if that produces a loss for the bank then so be it. But more than that he says outright what nobody on the bench has been willing to say — compared with the importance of the rule of law, what is so bad about a free house to the borrower after the “lender” has lost?

The Neil Garfield Show is cancelled tonight: Tune-in next week to listen to Neil Garfield Discuss Florida Win!

The Neil Garfield Show has been cancelled this evening. Join Neil next week when he will discuss his recent Florida win.  Partnering with Ft. Lauderdale attorney Patrick Giunta, Neil successfully argued securitization.  Neil Garfield will be writing a blog post this week detailing his win.


Call for Evidence. Do you have information or documentation that might help others fight Foreclosure?


In the course of litigation, homeowners often acquire documents through internet searches, discovery and other means that might help others.  Servicing manuals, scripts, proprietary system information, and other documents can prove invaluable in fighting foreclosure fraud.

We encourage people with inside knowledge or in possession of evidence that might help others to send documentation anonymously to our email address at

LivingLies is in the process of creating an interactive website that will allow consumers to share evidence, documents, pleadings, motions and other resources with other homeowners fighting foreclosure.  All submissions will remain confidential.

The Script: Ocwen Lawyer Spoon-Fed Foreclosure Questions and Answers to Robo-Witnesses


“My conclusion is that it’s pretty clear—from what she’s saying and the document that she attaches—that they’ve been doing what I’ve been saying they were doing all along: telling clients want to say. These are listed out for the attorneys to ask the witness, and the answers that the witness needs to give are right there. I find that to be extremely telling. It’s exactly what we thought was going on. When they talk about training of the witness, they’re teaching them what to say at trial, and it doesn’t matter whether it’s true or not.”

The Script: Ocwen Lawyer Spoon-Fed Foreclosure Questions and Answers to Robo-Witnesses

Editor’s Note: Head over to for the rest of this excellent expose on the coaching of Bank robo-witnesses.

Ocwen Lawyer Spoon-Fed Questions and Answers to Robo-Witnesses

Excerpted from @ The DBR

Note: The article from the DBR is about a year old but we now have the documents and emails in question.

A Royal Palm Beach attorney alleges an attorney for embattled mortgage servicer Ocwen Financial Corp. improperly spoon-fed questions and answers to unqualified witnesses testifying in foreclosure cases against Florida homeowners.

Foreclosure defense attorney Thomas Ice said he’s uncovered a script that was provided to Atlanta-based Ocwen witnesses to crush homeowner defenses and allegations of robo-witnesses by financial services sector employees who have no first-hand knowledge of mortgage details.

Ice represents St. Lucie County homeowner Thomas Rolle in foreclosure litigation brought by Deutsche Bank National Trust Co.

Ocwen took over servicing the mortgage in early 2013, and the lenders initially brought in national law firm Quintairos Prieto Wood & Boyer to handle the litigation.

Attorneys for both sides exchanged exhibits during trial preparation, but Ice said a group of documents inadvertently emailed during the exchange exposed an in-house strategy to feed witnesses a list of prepared questions and answers.

In several documents, former Quintairos Prieto Wood & Boyer attorney Erin Prete outlined litigation tactics in a series of emails to colleagues addressing foreclosure defenses and strategies for debunking them. In one email thread, she provided a list of questions focused on default notices sent to homeowners to begin the foreclosure process…………

More at

To Settle SEC Case, Government Pays Itself $100,000

Former Fannie Mac CEO reaches agreement that places no restrictions on future work

Former Fannie Mae chief executive  Daniel Mudd reached a “settlement” with the Securities and Exchange Commission in a crisis-era case it filed against him. The deal, filed on Monday, requires essentially nothing of Mr. Mudd.

The settlement includes a $100,000 payment—to be paid by Fannie Mae, which already pays its profits to the U.S. Treasury because it landed in government conservatorship in 2008. “One could see this as the government paying itself $100k to end the case,” Mr. Mudd said in an email.

The settlement also included no restrictions on Mr. Mudd’s future work, an “unprecedented” win, according to Mr. Mudd’s lawyer, James Wareham.

It is a remarkable end to a high-profile set of lawsuits the agency filed in 2011, when it sued six executives of the mortgage giants Fannie Mae and Freddie Mac, accusing them of misconduct tied to the 2008 financial crisis.

The cases accused the men—three from Fannie and three from Freddie—of allegedly misleading investors in the mid-2000s about the mortgage finance firms’ subprime holdings. It charged them with securities fraud, and announced the cases at a December 2011 press conference in conjunction with “nonprosecution agreements” the SEC reached with the two firms.

Mr. Mudd stepped down from his role as chief executive at Fortress Investment Group LLP the following month.

In the end, the three Fannie Mae cases settled for a total of $135,000 and the three Freddie Mac cases ended for a total of $310,000. The SEC settled five of the cases last year, with the two mortgage firms footing all of the bills.

The SEC settlement says only that Mr. Mudd “agrees to contribute, or cause to be contributed,” the $100,000 amount. Mr. Mudd confirmed Fannie Mae will make the payment. A Fannie Mae spokesman declined to comment.

An SEC spokesman didn’t immediately respond to a request for comment on Tuesday. On Monday, the spokesman declined to comment beyond the settlement.

Both Fannie and Freddie currently pay essentially all of their profits to the U.S. Treasury, after the government took control of them after the housing bubble burst.

The other two former Fannie Mae executives sued in connection with the case— Enrico Dallavecchia, who was chief risk officer, and Thomas Lund, who was head of single family lending—both agreed not to sign SEC reports for one year when they settled the cases last September. That essentially barred them from serving in senior positions at public companies for that period.

Under Mr. Mudd’s agreement, the SEC didn’t require any such bar. Mr. Mudd is currently head of investment firm Paladin Global.


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