Information, Resources and Help with Your Loan Strategy – Serving Over 10,500,000 Visitors

Click in to tune in at The Neil Garfield Show

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

COLLABORATE! LAWYERS, HOMEOWNERS, CONSUMERS, CLICK HERE!

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.

Call 520-405-1688  for West Coast information and 954-495-9867 for East Coast information AND 850-296-1960 for Northern Florida Services. Ask about our rescission package.

Consultations with Attorneys and Borrowers with Attorneys available. Case reviews by Neil Garfield available. Litigation and Expert Consulting in all fifty states.

Educate Yourself and Your Lawyer: Purchase Memberships, Books, Services from our Online Store Customer Service West Coast 520-405-1688 East Coast 954-495-9867 GET HELP!!!

  • GET A CONSULT WITH NEIL GARFIELD
  • GET our Rescission Package
  • GET Litigation support
  • Get our COMBO Title and Securitization Report
  • Select recent articles from the right side of this page

Featured Products and Services

——–>SEE TABLE OF CONTENTS: WHOSE LIEN IS IT ANYWAY TOC

Has LivingLies Helped You? Consider Making a Donation. Call  We appreciate your support!

Call 520-405-1688  for West Coast information and 954-495-9867 for East Coast information AND 850-296-1960 for Northern Florida.

Recording the Rescission

Livinglies Team Services: see GTC HONORS Services, Books and Products

===========================

For more information please email us at gtchonors.llblog@gmail.com or call us at 954-495-9867 or 520-405-1688

This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located.

===========================
LAWYERS AND JUDGES TAKE NOTE: “Section 1635(a) nowhere suggests a distinction between disputed and undisputed rescissions, much less that a lawsuit would be required for the latter.” Justice Scalia, Jesinoski v Countrywide. [EDITOR’S NOTE: The only possible meaning to this is that the homeowner can use a letter and then, if it is disputed, it must BE BROUGHT to A COURT OF COMPETENT JURISDICTION to vacate the rescission. An order that denies a motion to dismiss for lack of jurisdiction based upon the fact that the rescission was sent does nothing to change the fact that the rescission was effective as of the date it was mailed and still is effective by operation of law. The only way it can be removed is with another operation of law that is properly brought by the real party in interest. An order vacating the rescission without any pleading requesting that relief does absolutely nothing except assure that the judge’s order will be reversed. And if the rescission is recorded before the foreclosure judgment (judicial states) or sale (nonjudicial states) the judgment and sale are void respectively.]
 Every state has its own forms and requirements and fees for filing anything in the public records. It is wise to record any rescission that was sent regardless of the timing, in my opinion, but that would be subject to advice from a lawyer in your jurisdiction. Litigation is expected on numerous issues after the nonjudicial cancellation of the loan contract, note and mortgage. Here are some of the issues that might be presented when the rescission is sent and/or recorded:
  1. Since the rescission is effective upon mailing, the loan contract, note, and mortgage are void (not voidable). This means in states whose recording statutes are either “notice” or “hybrid”, anything that transpired after that in which the note or mortgage were used for collection, enforcement or foreclosure are also void. Title would then stay with the homeowner if the homeowner does not know that he/she still has title. Any deed issued in foreclosure would accordingly be a wild deed.
  2. If the state recording statutes are purely “race” then if the notice of rescission was not recorded before the foreclosure, the foreclosure sale and deed might well be binding even if it was “fraudulent” or otherwise wrong or illegal.
  3. State statutes of limitation might effect (limit) the ability to collect damages for trespass or wrongful foreclosure, breach of contract or other common law or statutory remedies. The FDCPA might help depending upon how long it has been since the notice of rescission was sent.
  4. If the notice of rescission is sent and recorded before the foreclosure judgment in judicial states or before the sale in nonjudicial states, then in all states it would appear that the the loan contract, note and mortgage were rendered void at the moment of mailing, by operation of law, which is the same thing as a judge’s order declaring the note and mortgage void.
  5. There is no provision in the TILA rescission statutes that allows any lender, creditor or servicer to contest the rescission with a letter. That power is only given to the borrower. Their subsequent action in proceeding to foreclosure “judgment” should be subject to being vacated because they were obtaining relief based upon a void instrument — the mortgage (and the note).
  6. In a strictly “notice” state, as long as they knew about the rescission the foreclosure is automatically wrongful and actionable, in my opinion. “Notice” might need to include a third party purchaser, who often does know of the existence of the borrower’s defenses and does know about the rescission. The issue here is that at the time of the rescission it was widely and wrongly believed that a lawsuit was necessary to make the rescission effective (i.e., the borrower had to plead and prove a case for rescission under common law rules). TILA rescission is exactly the opposite. So everyone, including appellate courts (other than the Supreme Court of the United States) was proceeding under the wrong assumption.
  7. The action following rescission should not be to establish the effectiveness of the rescission. That is already complete by operation of law.
  8. The action could be enforcement of the rescission if filed within one year of the date of mailing of the rescission. At the end of that period, the borrower is barred from filing an enforcement action and the “lender” assuming they have done nothing, is barred from claiming the debt.
  9. After the expiration of one year from date of mailing of the notice of rescission, the action would be simply for quiet title and perhaps trespass (see above). This action could be brought during the one year period either in lieu of enforcement or with enforcement. An action for injunction preventing the banks, servicers or trustees from attempting to use the void note and mortgage might also be advisable.
  10. If an action for enforcement is brought during the one year period it is important not to plead as though the rescission might not be effective. it is a fact. See Jesinoski. The relief sought is NOT to have a declaration from the court that the rescission was valid. The pleading must assume that it is already legally binding as per 15 USC 1635 et seq and that the only issues remaining are the duties of the “lender” who should not be described as a lender but only someone who has asserted the rights of a lender, holder, mortgagee, beneficiary or servicer or trustee.
  11. An attack on standing is appropriate at every step when the “servicer” or Lender” seeks to challenge the rescission without filing an actual lawsuit or pleading. The banking side of the equation has NOT been granted the power to contest with anything other than some other recognized “operation of law.” The only such exercise would be a lawsuit seeking to vacate the rescission on the grounds that it was wrongful or deficient in some way.
  12. STANDING: This is where most cases will be won or lost. Since the note and mortgage were rendered VOID as of the date of mailing, the party seeking to vacate the rescission would need to plead that they are injured by the rescission, to wit: they are going to lose the ability to enforce a legally binding debt. And they would need to establish standing WITHOUT the note and mortgage, which are void (see above).
  13. Thus the pleader would need to establish themselves as a party who either funded the loan and is still the creditor, or who has purchased the loan from someone who owned the loan because they funded it. This we believe is going to be impossible for the lenders because their money trail leads straight to investors whose money was used improperly and whose money was never paid to the trust that issued the mortgage backed securities. The investors were left out in the cold without a mortgage backed security issued by any entity that had mortgages, without a note and without a mortgage. That leaves them with empty promises from the “Servicer” and no enforcement mechanism to collect from either the borrower or the investment bank. None of that is the fault of the borrower.

Why Are Modifications So Sluggish? Tonight on the Neil Garfield Show 6pm EDT

Click in to tune in at The Neil Garfield Show

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

More than 24,000 people listen to the Neil Garfield Show. Maybe you should too.

===============================

For more information please email us at gtchonors.llblog@gmail.com or call us at 954-495-9867 or 520-405-1688

This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located.

===========================
Everyone has the same question in the back of their minds. The loans should be worked out rather than foreclosed. That is what is done with commercial loans, that is what was done in residential loans and it is still done with credit cards and other consumer loans. So why are we having problems with workouts and modifications?
The answer is simple: we are not dealing with the creditor. We are dealing with an intermediary whose instructions are to get the loan into foreclosure. So they tell borrowers that they can’t qualify for a redo of their loan unless they stop paying, they say and do a lot of things that encourage the borrowers to do things that make them look like deadbeats when the case goes to foreclosure judgments. The borrowers are not deadbeats. They are victims just as the investors are victims. But we never hear from the investors because they don’t know that anything is wrong with their investments — because they are getting paid regardless of whether the “borrower” pays or not.
Many judges have been asking two questions for years even as they give the banks the benefit of the doubt:

(1) why is the modification process so enigmatic and random (and why are there not more workouts like it used to be in civil courts and bankruptcy courts) and

(2) why are we seeing this shell game with first some bank or other entity claiming it is the owner of the loan, denying even the existence of the REMIC Trust, then they admit the existence of the Trust and claim the loan is owned by the Trusts, then they say the servicers have the right to foreclose and not the trusts or the investors, and then they keep switching servicers and trustees? To the Judges that ask these questions, it looks like a shell game but without appropriate pleading and evidence they can’t rule on it — or get the answers to their questions.

The truth has emerged in many cases where it was determined that the trust never owned the subject loan — or any loan. The trust never comes to court. The self-appointed servicer shows up with a robo-witness. Many cases decided in favor of the borrower (and there are thousands of them) show that the “servicer” is (a) not a servicer because it neither accepts nor pays money in connection with “processing the loan,” and (b) not authorized to act as a servicer even with fabricated powers of attorney introduced in court.

All this has everything to do with the modification process. The alleged “servicers” are the only parties that will talk to the homeowner about a workout– modification. But they actually have no power to do so. And what this “servicer” wants is a foreclosure judgment and sale not a modification which of course means they have a conflict of interest with the investors. The “servicer” who is really an enforcer to put up another layer of corporate shield against the borrower, is really doing the bidding of the Master Servicer. The Master Servicer is ordering all cases into foreclosure judgment and sale and to minimize the modifications (but not eliminate them because that would look bad for the banks).

The reason why the Master Servicer orders all cases to be on foreclosure track and a minimum number set for modification is simple: they have been paying the investors to make the investors think that their bonds are performing perfectly when in fact they are not. The bonds the investors have on their statements are worthless because they were issued by a trust that never received the proceeds of sale from the sale of their mortgage backed securities.

In fact the issuing Trust never even started business, much less ended it during the mandatory 90 day period. It never had any money and never even had a bank account. SO it couldn’t have purchased the loan. The lawyers come to court with the “servicer” because they can’t come to court with the owner of the loan (investors). If they came to court with the investors or any representatives of the investors, the investors would say that they have no default because they have been paid. THAT would mean there is no default and that would mean the volunteer payments from the servicer would never be recovered. So they absolutely need the foreclosure and absolutely remain committed to minimizing modifications.

And the enforcer or pretends to be a “Servicer” gets paid to act as a barrier against any inquiry into the inner workings of the fraud practiced on the borrower, the courts, and the investors. The investors end up taking a loss which in the case of pension funds has meant that the funds do not have the resources to maintain the pensions of retired workers. As a result of their reduced income they end up on the bad end of a foreclosure — in some cases by a trust whose investors include the same pension fund that lost money because of the fraudulent issuance of the mortgage backed securities that were never mortgage backed and never issued by an operated entity (Trust) under any theory.

And the whole scheme is to hide the real profits made by the banks in (a) stealing money from the investors and (b) paying themselves unauthorized fees and profits from illusory trades that are booked only at their trading desk and (c) immediately betting against the worthless bonds. .

It is the investment banks that pay the so-called “servicer advances” from a slush fund that is actually disclosed in the prospectus issued to investors. They pay that money as long as it (a) encourages the investors to buy more bonds (b) discourages the investors from suing the investment banks and exposing the entire toxic criminal scheme and (c) they can control the court actions such that most of them end up with a foreclosure judgment or the nonjudicial sale exercised by a power of sale in the nonjudicial states.

If the investment Banks allowed more modifications in would require them to continue making payments as “servicer advances” indefinitely. But even more sinister is the fact that while they could stop paying servicer advances then a whole lot of investors would come to know that their bonds were inf act worthless and the loans were never acquired and the loans were mostly nonperforming and that the foreclosures pressed by the enforcer/servicer is actually costing the investor most of their investment.

Central Florida Flames Over Foreclosure Fraud

Livinglies Team Services: see GTC HONORS Services, Books and Products

===========================

For more information please email us at gtchonors.llblog@gmail.com or call us at 954-495-9867 or 520-405-1688

This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located.

===========================

see http://www.wftv.com/news/news/local/osceola-foreclosure-report-author-holds-news-confe/nm79R/

Krieger is right about the fundamentals. While I have not reviewed his report, it appears from what I have heard about it that in contains misstatements and inaccuracies. BUT the idea that the foreclosures are largely a fraud upon homeowners and the Courts is well-founded.

The parties who are initiating the foreclosures are mostly servicers. They want the foreclosure so they can collect on advances and fees. But they have no right to foreclosure on those claims because they have no contract, no note, and no mortgage in which they have the right to make such collections or enforce the terms of what they claim to be the original note and mortgage. They MIGHT have some equitable claim against the homeowner but it isn’t secured by any security instrument (mortgage).

The banks have painted themselves into a corner and you can be sure that past reports will be combined with new reports about the details of fabrication, forgery, and perjury from robo-signers, robo-witnesses and people with no knowledge of anything other than the script that some lawyer gave them before they appeared in court.

The plain truth is that there are no defaults in nearly all of the claims on which foreclosure is sought. That is because the creditor, frequently identified as a REMIC Trust (but in actuality is a group of investors) have continued to get paid through servicer advances. There is nothing about that in the note or mortgage signed by the alleged borrower. Since they received payment the party claiming to be the mortgagee shows no default on its books but the servicer wants the foreclosure anyway because it makes them money.

Then there is the other problem resulting in the conclusion that there is no legal “creditor” in the conventional sense. When you come right down to it there isn’t anyone who answers the definition of a creditor or lender with rights to enforce either the note or the mortgage because none of them are actually in privity with the borrower and virtually none of the parties claiming to “own” the loan never paid for it, never received it, and have no power to collect, much less foreclose on it.

Take a step back and look at the larger picture. Why wouldn’t the “real parties in interest” end the entire dispute by merely producing proof that they are holders in due course or were the original lenders. This is the essential problem for the banks and it is only in taking the longer view that you can see patterns that cannot be reconciled.

First they said they were no trusts, then they said there were trusts but the authority to enforce was with the servicer, then they kept switching servicers (an illusion) and producing a “power of attorney” instead of a transfer of servicing rights. Why couldn’t they produce a transfer of servicing rights? Answer: because they were not transferring the servicing rights which included the right to collect servicer advances (volunteer payments) made by the master servicer.

Now they are saying the trusts own the loan — but they can’t produce proof of payment. So they are saying we don’t need to produce proof of payment. We only need to show the note. This is circular reasoning but Judges are still going with this faulty line of reasoning. If you analyze the pattern you can see that they are not alleging that the trusts are holder in due course or owners of the debt because the trusts are not holders in due course and not owners of the debt. what does that make the trusts? Perhaps, depending upon the forged, backdated endorsements and assignments, it might make them an accommodation holder.

That still leaves open the essential question: who owns the loan. The investors money was used to originate and/or acquire the loans but they don’t appear on the notes or mortgages. The trust was supposed to pay for the loans but it didn’t. Why not? Because the investment bank diverted (Stole) the money. The key to this puzzle is that the investment banks created unregistered entities on paper and then had them issue “mortgage backed securities”. The trusts never operated, never received any money and therefore could never pay any money for anything. They didn’t even have a bank account.

Why did the world’s largest financial institutions fake the documents and lie to the courts? Because they had to do that. They needed fake documents because none of the real events and real documents would suffice. Hence, the claim of fraud is true even if some of the details were not exactly right. But the fraud is not just upon borrowers and the courts. It starts with the initial fraudulent transaction with investors (pension funds) who gave up their money thinking that the money would go into an operating trust that would then originate and acquire mortgage loans. That never happened. If it did happen the way the investors thought and were promised, (a) there would not have been the rush to push bad loans onto borrowers and (b) the foreclosure battle would be non existent.

Now It’s Your Turn to Help Me!!! Getting lawyers to sign up on common registry.

Every day dozens of people call me asking for referrals to attorneys. I have tried everything I think of to get attorneys to sign up, give resumes, etc. All I want to do is set up something like an Angie’s list for foreclosure defense lawyers. If any of you have an idea about how to do this, even if it is your own venture, that will be fine. I’m not looking to make money on this. I just want to provide the service to people.

Please send email to gtchonors.llblog@gmail.com with some sort of business plan to set up a system where homeowners can get the help they need.

New York: Notice of Appeal May Work as a Cloud on Title

Livinglies Team Services: see GTC HONORS Services, Books and Products

===========================

For more information please email us at gtchonors.llblog@gmail.com or call us at 954-495-9867 or 520-405-1688

This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located.

===========================

see http://www.newyorklawjournal.com/home/id=1202732820636/Appellate-Decision-Unwinds-Foreclosure-Purchase?mcode=1202615326010&curindex=2&slreturn=20150623125150

It’s procedure, stupid! That is the message coming out of several courts who are subjecting foreclosure actions to increasing scrutiny. They apparently are noticing that the facts are not as assumed in most cases and that the true facts are being papered over with instruments that appear facially valid. Now the long standing rule that a person who takes title with knowledge of litigation might not get title after all. In New York, title was unwound. The conclusions of the authors is what I said years ago. There is no way that continuing litigation would allow for any title to be marketable. That is especially true where the allegation is that the sale was wrongful, fraudulent etc. But it is also true where there are other issues that affect title. Title is clouded as long as there is litigation — at least in this case in New York State.

The Looming Fight Over Rescission Strongly Favors Borrowers of all Types

Livinglies Team Services: see GTC HONORS Services, Books and Products

===========================

For more information please email us at gtchonors.llblog@gmail.com or call us at 954-495-9867 or 520-405-1688

This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located. while it is possible that the rescission laws might apply to all consumer loans, the author has researched other types of loans in any detail — student loans, auto loans, furniture loans, credit cards, and other cash advances etc. No opinion is offered on those —- yet.

===========================

Rescission strategies are coming fast and furious and the banks are painting themselves into a corner.  One issue was what happens if the rescission letter refers to the transaction as of a certain date? That is evidence of the consummation but not the total proof. In response to one person who used the date of the instruments in his letter of rescission, I wrote the following:

——————————————

The only problem I see is that the date of the transaction is listed but it is not clear that was the date of consummation. We also found an Orlando case where a Federal Judge did apply the TILA rescission rules as we have described it. The wrinkle is that the homeowner later entered into a modification agreement and then was deemed to have consented to judgment — she was proceeding pro se and seems to have literally snatched defeat from the jaws of victory. SO in her case we don’t hold out much help that we can do anything for her.

These cases are going to hinge on procedure and standing. If the Judge looks at the notice of rescission and decides as a matter of law that the transaction was (a) consummated and (b) on the date shown in the letter he might rule that the rescission was not effective. This would be contrary to law and contrary to what the Supreme Court said, as to procedure, but within the boundaries of what TILA rescission says is a loan qualifying for TILA rescission.

Our view, based upon a literal reading of the statute (the only possible reading according to the Supreme Court in Jesinoski) is that the the issue of consummation is a factual issue that may be raised by the creditor — or waived. They could simply comply without raising the defenses or waive the defenses by failure to to raise their challenge in a court proceeding (i.e., counteracting the rescission which is effective by operation of law with another action that is effective by operation of law).

Failing that, they must bring the claim. But the “they” is the crux of the issue. Who can bring a claim challenging the rescission? The answer can only be a party who has standing. Without standing there is no jurisdiction in the court to consider their claims regarding the rescission. Without standing it doesn’t matter whether they have any legitimate objections to the sending of the rescission or any basis for demanding that the rescission be vacated.

Standing means that the party presenting the claim has or will suffer injury as a result of the sending of the rescission, which became effective (same as a court order) the moment it was mailed. In foreclosure actions most of them have skipped over standing based upon “holding” the note. While we disagree with that interpretation because it treats the “holder” as a “Holder in due course” the procedure changes when a party seeks to vacate the notice of rescission, which as of the the date and time of the challenge is effective by operation of law.

Since the rescission is effective by operation of law as of the date of mailing, that means, according to 15 USC § 1635 et seq., Regulation Z, and the US Supreme Court (Jesinoski) that the note and mortgage were rendered void by the mailing of the notice of rescission. Once something has happened by operation of law, it is a fact whether we agree with it or not. Once it happens not even the party who invoked it can avoid it or seek to ignore it without filing some action which by operation of law would allow the Judge to vacate the rescission.

If the borrower can’t revoke it, then neither can the creditor. The only caveat here is if the borrower and creditor enter into a new agreement that uses the old note and mortgage as the documents that will be used in the new agreement. At that point a new loan arises, along with the rights of rescission, which must be delivered to the borrower as part of the rescission. The TILA disclosure requirements must be met for the “new loan.”

Which brings us to the issues of who can enter into this new agreement and who can ask the court to revoke the or vacate the rescission? The answer is the real creditor (see posts from prior two days). And the real creditor may NOT use the note or mortgage as evidence of their standing. Those instruments were rendered void by operation of law when the rescission was mailed. So the “creditor” must show that it is in fact the real party in interest having funded or paid for the loan — or that they have legal authority to represent a creditor who funded or paid for the loan. They no longer even have the opportunity to use presumptions that might attach to a holder or possessor with rights to enforce because that would mean they are seeking relief based upon claims arising from two instruments (note and mortgage) that are already void by operation of law.

This is why I have repeatedly said that homeowners MUST have an experienced trial lawyer who knows how to argue these points, understands them and can stay on message without getting lured into an argument about whether the rescission was effective. There can be no such discussion. THAT issue — the effectiveness of the rescission is already over and done.

The rescission IS effective upon mailing. That issue is 100% decided by the Supreme Court whose unanimous decision was (a) that the TILA rescission statutes are not ambiguous and that therefore (b) that the Judge has absolutely no right to read anything into the statute.

The Judge’s duty is to read the statute and follow it line by line as to procedure and substance. That means the rescission is effective even if the borrower was wrong in mailing it. It is up the the creditor to decide whether to accept the rescission under TILA or to contest it. If they contest it they must do it within 20 days of receipt. If they don’t do it within 20 days, they waive their potential objections or challenges.

How do we know that? Because the statute, Regulation Z and the Supreme Court have made it perfectly clear that the rescission is not contingent in any way — i.e., the rescission is effective without waiting for any Judge anywhere from interpreting the statute and the actions of the borrower to mean that the rescission was effective. It is effective without the borrower going to a lawyer, without the borrower filing a lawsuit and without any court order being entered. The rescission itself is equivalent to a court order.

As to the “Public Policy” arguments against this procedure and substance of TILA statutes there are several answers. The first and foremost one is that Congress, the President and the Supreme Court have all decided it is just fine and no court can change public policy set by the legislative branch nor is there any power on earth that can overrule the Supreme Court. The second reason is even easier — if the creditor shows up having proof that they funded the loan transaction or funded the purchase of the loan transaction with actual proof of payment, they lose nothing. They can either vacate the rescission or accept it — either way they get paid off — in fact with an easier claim if they accept the rescission. The only parties that will scream here are the ones who have been faking their interest int he loans — and that is exactly what the Truth in Lending Act was meant to prevent.

STANDING MAKES A COMEBACK: Rescission Causing a Stir: Tonight On the Neil Garfield Show

Click in to tune in at The Neil Garfield Show

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

More than 24,000 people listen to the Neil Garfield Show. Maybe you should too.

===============================

With the two back to back decisions in the Florida 2d DCA and 4th DCA, Standing has made its long waited comeback. The question is not whether the borrower stopped making payments as the thousands of Judges have put it. The real question is whether the creditor got paid. Banks have successfully obscured the issue and obtained nearly 8 million foreclosures. What difference does it make if the borrower stopped paying the party who no right to collect the money? If anything, the borrower was mitigating damages against the servicer who was wrongfully collecting and wrongfully foreclosing on the property. All the money that has been paid to a servicer pretending to be the servicer is subject to disgorgement — IF the servicer is claiming to be the authorized servicer by virtue of a grant of power from the Trustee of a Trust that has not been shown to be the owner or authorized representative of the owner of the debt. It’s pretty simple really once you sweep bias aside.

===============================

The question is what do you do after you have sent the notice of rescission? And that extends to rescissions that were sent years ago. There are many nuances here caused by State and Federal law. But one thing cannot denied: the rescission is effective by operation of law when it is mailed and nothing except another operation of law can change that.

Practice Note for Lawyers: Lawyers for the banks and servicers are attempting to use fear and intimidation — trying to grab back the narrative. They can only do that if you let them. When they ask you for tender of payment, the answer is that AFTER they have returned the cancelled note, and AFTER they have filed a release and satisfaction of the mortgage or deed of trust and AFTER they have paid the borrower ALL the money that is due under the statute (all borrower payments plus all compensation paid to anyone) THEN they might be able to demand payment (without the security of a mortgage or deed of trust). BUT — they can’t ask for the money if more than one year has expired since the notice of rescission (assuming they have not complied with the TILA rescission requirements).

It is really much simpler than what is being discussed in the cyber-sphere. There is nothing to interpret — that is a direct instruction from the US Supreme Court. Follow the steps in the TILA statutes and remember at each step that the rescission is effective upon mailing; and remember what that means — that the loan contract is canceled, the mortgage is void, and so is the note. Only the borrower is given statutory authority to cancel the loan non judicially in the form of a letter.

There is no provision in the statute for lenders, creditors, or investors or trustees to challenge the rescission — but we know by black letter law that in the absence of a specific statutory provision, there can be no meaningful non judicial action (i.e., a letter) by those who would claim the right to collect or foreclose even if the State is a nonjudicial foreclosure state. They MIGHT have a right to sue to vacate the rescission. They might have a damage action based upon “wrongful rescission.” And they have probably waived their “defenses” to the rescission if they have not filed the suit within 20 days of receipt of the rescission. And they may have waived the debt if more than one year has passed since the receipt of the notice of rescission.

But in all cases (1) they must act by taking the matter to court (which means pleadings filed with allegations of jurisdiction (standing), cause of action and a short plain statement of ultimate facts upon which relief could be granted and (2) they cannot use the note and mortgage to establish standing (they are “holders” of a void instrument arising out of a cancelled loan deal). They must allege facts that show they were financially injured by the rescission.

And note well that the real parties in interest in most of these foreclosures are neither the Trust (who never owned the loan) nor the investors (who are getting paid through servicer advances, thus nullifying the allegation of default). The servicer needs to push the case to foreclosure, not modification or settlement, because foreclosure is the only way the “servicer” might recover its volunteer payments to the investors who are the the only parties to whom money is owed — albeit by quantum meruit and not by contract or legal instrument.

Rescission threatens those claims for servicer advances — many of which have been securitized themselves!

THAT is why modifications are treated as a game (to satisfy regulators that they are trying to modify loans) — servicers cannot admit that they are really looking to get paid in their own right and not to collect on behalf of the investors, who will lose more money in a foreclosure than they would in a workout of the loan.

All that and more tonight on the Neil Garfield show.

Follow

Get every new post delivered to your Inbox.

Join 3,992 other followers

%d bloggers like this: