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Fake Evidence and False Representations

Foreclosure defense litigants usually find themselves in a fog of questions they can’t answer. That is because the banks are using a tactic that I have called “step-over.” If they can’t prove an essential element of a case they step over it and pretend it was already established before.

ADMIT NOTHING. ASSUME NOTHING.

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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Well this is a good example of what I teach lawyers about cross examination for opposition to testimony by affidavit or even oral testimony under oath. It’s easy to say yes, that’s right. Not so easy to say how you know that is right. Good litigators chip away at each component part of each answer. In virtually all cases, the numbers and the documents don’t add up and there is no escape for the banks. They settle those cases under seal of confidentiality.
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The banks have been getting away with this for years.
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The foundation for all evidence of anything in a foreclosure case is whether the foreclosing party exists and whether it has any power to foreclose that has been granted by the owner of the debt. The banks step over this problem by producing a witness that says “we are the servicer of this loan, I am employed by the servicer, these are our business records.” In other words they pretend that they answered the question. But they didn’t. And they know it.
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Other than prior conduct that “speaks” to the issue, there is no testimony from the actual party named as the foreclosing party. This insulates the only witnesses produced from answering any questions about the origin, existence of the foreclosing party or even whether the foreclosing party is a creditor or instead is acting as “holder” which means as a conduit for another party who might also be a conduit. More importantly no witness testifies that the nonparty claiming servicing rights actually has servicing rights and what duties are performed by the servicer at the direction of the undisclosed party behind the scenes. Hence most important of all is the fact that no witness testifies that the servicer’s business records are the business records of the foreclosing party. It is presumed. Attack it and it falls apart.
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Let’s assume that the Trust actually did acquire the debts, notes and mortgages. Exactly how likely is it that the trustee would allow the servicer to see everything in the trust? ZERO. Why would they? Exactly how likely is it that the Trustee would grant total unfettered control over all of its assets without so much as a report to the trustee? ZERO. I could go on forever. Hopefully you get the idea. Exactly how likely is it that a Trustee would allow its name to be used in litigation without its knowledge or consent? ZERO. It’s only when the Trust doesn’t exist and doesn’t acquire anything that such behavior is perfectly OK.
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Here is the truth: no lawyer at any foreclosure mill ever gets a call or even an email from the named foreclosing party nor anyone else. Instead it is all automated in the loose meaning of that word. In truth the referral for foreclosure, the selection of the name of the foreclosing party, and all decisions regarding any given loan are made by people who are employed by an  organization with no right, title or interest in the subject loan. They in turn answer to a higher power — the big banks on Wall Street who are thoroughly insulated from liability as long as they can play trick or treat.

Discovery Changes and Broadens After Hawaii Supreme Court Decision

Based on questions that greeted me when I got to my desk this morning, here are just some of the thoughts that apply — a case review and analysis for each case being necessary to actually draft the right questions and to close any trap doors.

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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NOTE: Procedural questions should be posed to local counsel who knows local discovery rules and court procedure. My answer is based upon general knowledge and not based upon any experience in litigating discovery issues in your state.
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The effect of the new decision in the link above is most probably (a) a broadening of existing discovery requests (b) rehearings on recent decisions denying discovery and (c) an opportunity and a reason to ask the questions you really want to ask.
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The first question is whether the questions you would ask now are already within the scope of the questions you have already asked. If so, generally speaking, there is nothing to do. In this scenario you could send a letter, I think, that clarifies your questions in view of the new Supreme Court ruling. The letter would specifically address certain issues that were raised in questions already asked and tells them the details you expect. This could be done in a supplemental request for discovery citing the new Supreme Court decision. Check with local counsel.
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Second, and this is more likely, your case should be analyzed within the context of the new decision. It seems to me that the decision opens up some broader scope of discovery than had previously been submitted. Your opposition will fight this tooth and nail. Pointing to the Hawaii Supreme Court decision is not going to be enough even if the property is in Hawaii. You need to have a very clear narrative that explains why you are asking for the answers to questions and the production of documents and answers to request for admissions. Without a clear defense narrative your first Motion to Compel them to respond will likely fail. The general rule is that discovery, with certain exceptions, can be any request that could lead to the discovery of admissible evidence. By “admissible” the meaning is evidence that is relevant and “probative” to the truth of the matter asserted. It isn’t relevant unless it ties into either the case against you or the defense narrative. Lack of clarity can be fatal.
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The opposition is going to claim privilege, privacy, and proprietary information. You should force them to be more specific as to how the identification of the creditor is proprietary, or an invasion of privacy or some privilege. Tactically I would let them paint themselves into a corner, so you need someone who knows how to litigate. Once it is established that they can’t or won’t disclose the matters into which you have inquired, then the question becomes how they will prove authority from the creditor without identification of the creditor from whom all authority flows.
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That could lead to a motion for summary judgment wherein you allege that they have failed and refused to make disclosure as to the most fundamental aspect of pleading a case. Since their authorization to initiate and maintain a foreclosure action must relate back to the authorization of the creditor (owner of the debt) and they now have not or will not identify that party(ies), the presumption of authority must be considered rebutted, thus requiring them to prove their case with facts and not with the benefit of legal presumptions.
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Since they have admitted on record that they cannot prove they are acting on behalf of the creditor, it follows that they cannot prove authority to initiate or maintain a foreclosure action. Hence, the outcome is certain. They will not be able to prove standing although they might have made certain assertions or allegations that might pass for standing such that they can withstand a motion to dismiss or demurrer. The essential assertion of standing is either rebutted or barred from proof. Hence judgment should be entered for the homeowner.
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Some of this might come out in a motion for sanctions which is virtually certain to come from you when they fail to properly respond to your requests for discovery. This is intricate litigation that should be handled by a local attorney.
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Again don’t start a second front in the battle if you have already covered it in your previously submitted requests for discovery. I think you have asked most of the right questions, although now with this decision it becomes more refined.Among the questions I would ask in view of the new decision from the Supreme Court of Hawaii are the following presented only as narrative draft, subject to improvement by local counsel:
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  1. Does the trust exist under the laws of any jurisdiction? If yes, describe the jurisdiction in which the trust is recognized as existing.
  2. Was the trust organized under the laws of any jurisdiction? If yes, when and where?
  3. Does the trust own the subject debt? If yes, please explain why the trust is not claimed as a holder in due course.
  4. Does the trust allow the beneficiaries an interest in the assets of the trust?
  5. Please describe the manner in which the certificate holders are beneficiaries of a trust.
  6. Does the named Trustee of the Trust have any rights or obligations to monitor trust assets?
  7. Does the named Trustee of the Trust engage in any activities in which it is administering the assets of the Trust.
  8. Describe the assets of the Trust.
  9. Please identify the Trustor or Settlor of the Trust.
  10. Please identify the date, place and parties involved in any transaction in which assets were entrusted to the named trustee for the benefit of named or described beneficiaries.
  11. Please identify the date, place and parties involved in any transaction in which assets were purchased by the Trust or in which a Trustor or Settlor purchased assets that were then entrusted to the named trustee of the Trust for the benefit of named or described beneficiaries.
  12. Is the named Trust a fictitious name being used by one or more other entities?
  13. Do the certificates contain provisions in which the holder of the certificate disclaims any right, title or interest to assets of the Trust or any right, title or interest to the subject loan? If yes, please describe the provision, in what document it is located, the date of the document, and where that document currently exists in the care, custody and/or control of the Trust or any party doing business as or on behalf of the named Trust.
  14. Please describe the owner of the debt, to wit: describe the party currently carrying a receivable on its books that includes the subject loan, wherein no other party is ultimately entitled to proceeds of payments, proceeds or recovery on the subject loan.
  15. Is it your contention that residential foreclosure is legally allowed without ownership of the underlying debt from the borrower? If so, describe the elements of a party who would be legally allowed to foreclose on a residential mortgage without ownership of the underlying debt.
  16. Does the Trust have a bank account in the name of the Trust?
  17. Does the Trust have a bank account in the name of the named Trustee as Trustee for the Trust.
  18. If the answer to either of the two preceding question is yes, please describe the account, its location and identify the signatories on said account.
  19. Please describe the retainer agreement between the named Trust and current counsel of record including all the parties thereto, the date(s) of execution and date that the agreement became effective, the names of the signatories, and their authority to execute the instrument.
  20. With respect to loans attributed to or allegedly owned by the Trust please describe the parties who make decisions, along with a description of their authority, with respect to the following relating to the subject loan:
    1. Whether to foreclose
    2. When to foreclose
    3. What documents are needed for foreclosure
    4. Applications for modification
    5. Terms of modification
    6. Terms for settlement of the debt

Hawaii Supreme Court: Yes to wrongful foreclosure counterclaim BEFORE foreclosure is completed and no to”plausible” pleading

Now that the courts are no longer in fear of precipitating an economic meltdown, it’s time to return to legal decisions instead of political decisions. The Hawaii Supreme Court has done just that in a common sense decision that sweeps aside most of the Wall Street arguments against allowing homeowners to raise the fraudulent foreclosure issue. The decision goes back decades in reaffirming the law and the intent of the rules of civil procedure.

The bottom line is that homeowners must be allowed an opportunity to prove their claim at the same time they are defending a foreclosure action. This levels the playing field and hopefully is a harbinger of future decisions from the high court in each of the states.

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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see Landmark Hawaii Supreme Court Case

BANK OF AMERICA, N.A., SUCCESSOR BY MERGER TO BAC HOME LOANS SERVICING, LP FKA COUNTRYWIDE HOME LOANS SERVICING LP, Respondent/Plaintiff-Appellee, vs. GRISEL REYES-TOLEDO, Petitioner/Defendant-Appellant,

Remember that while this decision could be used as persuasive authority, it is not binding authority over the courts of any state other than Hawaii.

There are several parts to this decision each consistent with the others.

  1. On a motion to dismiss, plausibility of the allegations are now irrelevant. The homeowner must be given the opportunity to prove the allegations of the complaint. As the Court correctly points out, the plausibility test requires some consideration of some facts that have not been proven or disproven. Hence the plausibility test conflicts directly with the presumption, on a motion to dismiss, that all allegations are true. “Notice pleading” is the law in Hawaii and purportedly is so in many other states where plausibility tests are nonetheless applied. This opinion may go a long way to reversing that erroneous trend.
  2. Notice pleading requires only a short plain statement of ultimate facts upon which the relief sought could be granted. But I would add that the rules about fraud and deceit are still in play, i.e., I don’t believe that any state, including Hawaii would allow a count sounding in fraud without giving some examples in the pleading of the misleading and/or deceitful way that the defendant(s) acted. This decision basically addresses violation of statute and similar kinds of actions.
  3. The implication of this decision is that the pleading should be short and that the homeowner must be given a fair chance to prove his/her allegations.
    1. I am quite certain that this Court would insist on allowing discovery to penetrate far more deeply that is currently generally allowed.
    2. The arguments that the actual transactions and the actual creditor’s identities are private, proprietary and remote was silly to begin with.
    3. This decision will be used by practitioners in Hawaii to demand access to records and to get it through court orders. This alone will result in a landslide of settled cases under seal of confidentiality — if lawyers for homeowners insist on such discovery.
  4. Further moving the ball forward, this Court decided emphatically that claims of wrongful foreclosure can be filed in a counterclaim against the parties involved with the  initiation of wrongful or illegal foreclosure proceedings. That means that contrary to California law and other states, the homeowner does not need to wait to file the claim.
    1. This is a two edged sword. It virtually mandates the filing of the wrongful foreclosure claim because the clock is probably ticking on the statute of limitations the moment the foreclosure is initiated by either judicial or nonjudicial means.
    2. The California doctrine has always been ridiculous and anti-consumer. By denying access to the courts for what is already known to be a wrongful foreclosure based upon false documentation they tie both hands behind the backs of attorneys representing homeowners in foreclosure cases.
    3. Knowing this, most lawyers are now declining representation of homeowners despite clear defects, lies and fabrication of documents relied upon by the lawyers supposedly representing a foreclosing party that many times does not even exist.
    4. Hence the doctrine that wrongful foreclosure claims ONLY arise after the foreclosure is complete produces an absurd result. Once the homeowner proves his/her claims they shouldn’t have lost their home, their life-style and their credit reputation, all based upon illegal acts that were known at the outset, the only remedy under that doctrine is money damages.
  5. The decision also addresses the very important issue of standing. Simply stated, if some party is designated as the foreclosing party, it is the duty of that party and the attorney representing that party to perform sufficient due diligence as to
    1. whether the entity exists,
    2. whether it has possession of the note,
    3. whether the note is endorsed to them by a party who owned the debt,
    4. whether the mortgage or deed of trust was assigned to them by a party that owned the mortgage and the debt, and
    5. whether the debt was in fact transferred from a party who owned the debt to the party claiming the right to foreclose.
  6. If they fail or refuse to perform that due diligence they are violating the law in Hawaii and most likely in dozens of other states. In Hawaii that alone gives rise to a cause of action for damages if damages can be proven, which in most cases is fairly easy. So they are liable for damages if they didn’t perform due diligence.
  7. If they did perform the due diligence and filed knowing that the threshold markers of legal standing are absent, it is malicious abuse of process, it is breach of statutory duties, and it is fraud because the filing of the the lawsuit is a representation that the due  diligence was completed and showed legal standing. And it is probably RICO.

Summary: While it is difficult to predict how and when other states will react to this opinion, it seems likely that this decision in the State of Hawaii will make jurists in other states very uncomfortable. The bias to rule for the alleged foreclosing party just received a blow to any rationality supporting that bias.

TONIGHT! How to Win Eviction/UD Actions

Thursdays LIVE! Click in to the WEST COAST Neil Garfield Show

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

 

Charles Marshall will discuss today two seminal unlawful detainer (UD) cases, in which respectively in each case the lower Court there found per usual for the institutional UD Plaintiff against the ‘former’ homeowner who was foreclosed on by an institutional trust, aka ‘lender-in-succession’. Yet on appeal of the UD judgment, in both these separate cases, the appellate courts reversed the judgment and remanded the cases.

First up for discussion today is Bank of New York Mellon (BNYM) v. Preciado, the appeal decided in August 2013. The second case is US Financial, L.P. v. McLitus, decided on appeal in August of 2016, which appeal decision was published in November 2016.

Both appellate courts found that neither UD Plaintiff had perfected title, as required by CCC 2924. Will discuss the reasons for this on today’s show.

The courts are meandering back to application of basic law, now that their fears of causing global collapse seem behind them. In Hawai’i the Supreme Court decided that subjective criteria used to dismiss homeowner claims were inapplicable and added that a wrongful foreclosure action could be filed BEFORE the foreclosure was finalized.

In Unlawful Detainer (UD) actions brought in nonjudicial foreclosure states (the majority) there has always been tension between the lawsuit that must be filed by the party claiming possession and the burden of proof. Judges seem to perceive it in the past as just another action for TRO where the homeowner must essentially assert defenses to pleadings that are not filed by the foreclosing party and then prove assertions without having access to the records of the opposing party.

Make no mistake about it. The UD proceeding is the first time anyone makes allegations about the change of title through the foreclosure process and therefore is the first time the homeowner is entitled to frame a narrative defense to real allegations ultimately relating to “perfecting title.”

But the key is the willingness to fight despite  apparently long odds against the homeowner. It’s not as bad as it looks, but it is still an uphill battle. 99% of all UD actions are resolved by the homeowner defaulting on either answering the complaint or failing to prosecute the defenses. Of the cases that are hotly contested, my perception is that somewhere between 25%-35% of homeowners actually win. That figure could be low because of the lack of definition of what constitutes a hotly contested case.

Note that the cases scheduled to be outlined by Charles are appellate cases in which the homeowner lost at the trial level. That means a commitment to persist in the fight is the primary factor in winning homeowner cases, one by one.

Not So Innocent: Transfer of Servicing Rights

Fundamental questions:

  • How can a “trust” change trustees without consent of the Trustor and/or beneficiaries? Is this statement true: The position of being a Trustee for a REMIC Trust is a salable, transferrable commodity that can take place without the knowledge or consent of the Trustor or the Beneficiaries? Hence were all those changes in Trustees void or invalid and who has standing to complain about it? If there is no Trustor and there are no beneficiaries it isn’t a Trust so no consent from the trust is required. That still leaves open the question “if not the trust, then who?”
  • How can a “trust” change servicers without the consent of the Trustor and/or beneficiaries? Is this statement true: Servicers can decide amongst themselves as to who will be designated the “servicer” on performing and non-performing loans without the consent and knowledge of the creditor. The corollary is that homeowners are bound to  make payments to whoever declares themselves to be an intermediary for an undisclosed creditor.
  • It all boils down to whether the existence and identity of the creditor matters. If not, anyone with a computer and printer can collect money or even foreclose on a homeowner. That in turn raises an interesting specter: homeowners forming their own servicing companies and challenging the other self-proclaimed servicers for the rights to service or enforce the loan. It seems to me that the only way the homeowner servicing company can lose is if an actual creditor steps forward and says that they want the “other guy.” Otherwise the new servicing company can do everything that the tricksters do until they too have a chain of title. Am I wrong? Comments appreciated.

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 consent 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.

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

Each “notice” that is sent under the letterhead of a self-proclaimed servicer is actually trojan horse designed to provoke no response. Later they will use that notice as “proof of the matter asserted” and get it admitted under the business records exception. Failure to respond to notices is in effect digging your own grave. The most typical example is when the homeowner receives a notice of transfer of servicing. It doesn’t come from the creditor. It comes from one of the self-proclaimed servicers who do not and will not disclose the name(s) of the creditor.

This isn’t just a notice of transfer of loan servicing. The actual outsource vendor “servicing” the account probably doesn’t include either one of the old or new companies claiming they were or are servicers.

The notice is sent to add cement the illusion of chain of title and to invoke “account stated”. (look it up). Most such notices of a change in servicers are for purposes other than those stated in the notice. They are leveraging the law requiring such notices to be sent in the event that a new servicer has been appointed. The change in servicers is actually a fabrication or farce as some judges have described it. No “boarding” occurs. In fact, the only reason they sent this notice was to produce evidence of your acceptance of the terms of the loan and evidence that both the old and new servicers were authorized. Doing nothing is tacit acceptance of everything written on that notice. And it will be used against you.

The hidden agenda is to put another layer between you and the actual creditor. Such a notice, to be valid, must be executed or acknowledged by the creditor to whom the debt is owed. That would require disclosure of the identity of the creditor — something your opposition will never do even under court order.
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So to summarize the real purpose of this notice is to serve as the grease on the rails that lead to the abyss of foreclosure or justification for a past foreclosure.
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Think about it. You owe money. You’ve been paying a company that claims to be an authorized bookkeeper or servicer. They have never identified a creditor — much less an acknowledgement or direction from the creditor as to where to send your payments.  But they do say that the are acting on behalf of a jumble of words that implies that either a big name bank is involved or a REMIC Trust or both.
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They never say that the “Trust” is the owner of the debt. They only say that enforcement of the note and mortgage is legal because they have “possession of the “original” note and/or an assignment of the mortgage. They don’t say that the Trust owns the debt because the assertion would (a) be lying and (b) would need to be proved by the attorneys who represent the servicer who proclaims authority to enforce on behalf of the trust. Using the words “on  behalf of” or “as trustee for” implies that the named entity exists and owns the loan. But it doesn’t say it outright.
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So now the place that had been doing the bookkeeping tells you to now send you the payments to a new bookkeeper. Why would you accept directions from them? Wouldn’t you want to know that the creditor authorized the old servicing and the new servicing?
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The strategy and tactics of the banks are ALWAYS about strengthening the illusion that they are authorized intermediaries for the creditors. The more paper they fabricate, the more “transfers” they “disclose” the easier it is to get a judge to treat the homeowner as a conspiracy theorist.

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This would be an excellent time to fashion a new QWR and DVL and complaints to AG and CFPB. Anyone can do it using the information from this email. But if you want us to do it for you here are the links (the generic one might be helpful but won’t really get to the essential point in this post):
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QUALIFIED WRITTEN REQUEST challenging the notice.
DEBT VALIDATION LETTER challenging the notice.
AG and CFPB COMPLAINTS citing lack of authority from an undisclosed creditor.

HOW CAN THE NOTE BE TRANSFERRED WITHOUT THE DEBT?

For most people, the concept of indorsing a note and delivering an “original” of the note to the indorsee/endorsee can only mean one thing — the note is evidence of the debt and thus, by virtue of the merger doctrine, the transfer of the note means that the note was essentially “title” to the debt. Hence the debt is owned by the transferee. The banks took advantage of this assumption and conducted millions of foreclosures based upon this assumption despite all facts to the contrary. Even if you talk to lawyers or judges their minds cloud over with the argument. It isn’t credible because it isn’t possible — the very definition of the word counter-intuitive.

Breaking through this bias is fundamental to successfully defending foreclosure actions. In every case I know about or was involved as lead counsel, the winning defense was firmly rooted in the knowledge that the debt was never transferred despite a mountain of fabricated documents that say otherwise.

Remember that if the debt WAS transferred, the transferee of the note would have a clear path to asserting the status of HOLDER IN DUE COURSE, which by law defeats virtually any defense that the homeowner might have. That is by operation of law, adopted by all states in the Uniform Commercial Code. The clear path would consist of easy proof: here is the note, here is our proof of payment, we are a holder in due course entitled to enforce both the note and the mortgage.

The plain fact is that nobody is asserting HDC status. And that can only mean that they didn’t pay for the debt. And that means they don’t own the debt. And that means they cannot, under any circumstances, foreclose on the mortgage without showing definitive proof that they are acting as agent for a disclosed creditor.

I added this to yesterday’s post but I think it should be published on its own. 

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 consent 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.

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

see Legal Aid Federal Practice Manual on STANDING

Published by the Sargent Shriver National Center on Poverty Rights

Here is an analogy that might help this counterintuitive process.

Assume I own a car. I enter into an agreement with my friend Jane to sell the car to her. I sign the title and give it to her. Afterwards we both decide we didn’t want to do that. Jane pays nothing for the car. Jane does not get the car. Jane never uses the car. I still have and use the car and both Jane and I disregard the fact that I gave her a signed title. She does nothing with the title. Later in a loan application she lists the car as an asset. Then the car is stolen from me.

Who gets the insurance proceeds? The question is whether the title represents an actual agreement to buy the car. And all courts that would boil down to whether or not Jane paid me. She didn’t. I get the insurance proceeds because I lawfully applied for a duplicate title and received it.

But Jane still has one copy of the title signed by me in original form. She has also made copies of it that can be printed out with the appearance of an original. So far, she has sold the car 42 times and taken out 7 loans on the car.

One of the people that received the title records it with the DMV. There is a problem with that. I still have title and possession of the car. The gullible person who “bought” the car has a title signed by Jane, who has produced evidence that she received title from me. One of Jane’s lenders on car stops receiving payments from Jane’s Ponzi scheme.

They “repo” the car and I go to court. Jane is a witness not a party and only if I can find her. The lender to Jane has no legal title even though they have what looks like an original title that is facially valid. Do I get my car back or does the lender” get to keep it? The title to the car is not a negotiable instrument, so they have no legal presumptions to show that their claim is valid.

One step further: if jane’s lender was actually a co-conspirator who accepted the false title and never gave a loan, does that change anything? I ask because this is exactly what is happening in nearly all foreclosures. The named “successor” in title engaged in no transaction to acquire the debt.

Transfer of the note was without regard to transferring the debt because neither the grantor nor grantee owned the debt. If the truth comes out, the transfer of the note will be seen as a sham paper transfer and the debt will be owned by whoever has money in the loan deal. Hence transfer of the note is not transfer of the debt. By denying the transfer of the note, the burden of proof should be on the would-be foreclosing party to show it was part of a real transaction.

STANDING: THE CRUX TO DEFENDING FALSE CLAIMS OF SECURITIZATION OF MORTGAGE LOANS

Mortgage foreclosure is the civil equivalent of the death penalty. in criminal cases. Many court decisions have enthusiastically supported that notion and attached much more stringent rules to the enforcement of a mortgage or deed of trust than they use in enforcement of a note. That is, until the last 20 years.

If you begin with the assumption that securitization is false, you start looking at the cover-up. Banks continue to win foreclosures because the truth is counterintuitive. Tactically the homeowner does not need to prove securitization fail in order to block a foreclosure. If that was the goal you would need to know and prove things that are in the exclusive possession, care, custody, and control of documents of third parties who are not even parties to the litigation nor mentioned in correspondence, notices or forms.

Successful defenders know that the securitization is faked and use that knowledge to ferret out relevant grounds to undermine and impeach testimony and documents proffered by lawyers for “stand-ins” called “naked nominees”, “lenders,” successors by merger, attorneys in fact, etc. wherein each such designation represents another layer of obfuscation.

Legal standing requires that the party who brings a foreclosure action must have legal injury resulting solely from nonpayment of the debt. The Federal Practice Manual published by and for Legal Aid describes and analyses gives good guidance that should be followed up with competent legal research of statutes and  cases in your state.

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 consent 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.

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

see Legal Aid Federal Practice Manual on STANDING

Published by the Sargent Shriver National Center on Poverty Rights

Here are some of the more salient quotes from the guide.

The law of standing has its roots in Article III’s case and controversy requirement.1 The U.S. Supreme Court has established a three-part test for standing. The “irreducible constitutional minimum of standing” requires the plaintiff to establish:

First … an “injury in fact”—an invasion of a legally protected interest which is (a) concrete and particularized, and (b) “actual or imminent,” not “conjectural” or “hypothetical.” Second, there must be a causal connection between the injury and the conduct complained of—the injury has to be “fairly … trace[able] to the challenged action of the defendant, and not … th[e] result [of] the independent action of some third party not before the court.” Third, it must be “likely,” as opposed to merely “speculative,” that the injury will be “redressed by a favorable decision.”2

So the ONLY party with standing to bring an action to foreclose on a mortgage is (a) the party who would suffer economic loss if the debt is paid (and the party entitled to payments on the debt) and (b) the party who would actually receive the proceeds of sale in a foreclosure action because they are holding a loan receivable reflecting ownership of the debt relating to the subject mortgage.

Both defense attorneys and judges have made the mistake of confusing standing to collect on a note, which does not necessarily require ownership of a debt, and standing to foreclose or otherwise enforce a mortgage which does require ownership of the debt. This is the law in every state under their adoption of the Uniform Commercial Code (UCC — Article 3 (NOTE) and Article 9 (MORTGAGE).

The cover for this erroneous conclusion is amply provided by the failure of homeowners to object resulting in default foreclosure sales. And further cover is provided by the fact that the delivery of the original note is presumed to be delivery of ownership of the debt. However, this is ONLY true if the execution of the note merged with the debt.

Merger ONLY occurs if the note and the debt are, in fact, the same, i.e., the Payee on the note is the same as the creditor who loaned the money. Banks have engaged in various illusions to cause courts to assume that merger occurred. But in fact, the substance of the loan transaction remains the same as what I wrote 10 years ago, to wit: (1) the sale of certificates naming an issuer without existence on behalf of the “underwriter”/”master servicer” of the nonexistent entity, (2) the underwriter taking the money and using it, in part, to fund loans through pre-purchase agreements (before anyone has even applied for loan) and through form warehouse loans that are in substance pre-purchase of loans.

Hence in all cases the money at the closing table came from the underwriter forwarding the funds to the closing agent. Since the money came from parties intending to be investors, the owner of the debt is (a) a group of investors (b) the underwriter or (c) both the group of investors and the underwriter, with the underwriter acting as agent. But the agency of the underwriter is at the very least problematic.

The underwriter may claim that the agency arises because of the Pooling and Servicing Agreement for the nonexistent “REMIC TRUST” to which the investors agreed. But the investors would be quick to point out (and have done so in hundreds of lawsuits) that the PSA and the “Trust” were sham conduits and fabricated documents to create the illusion that investor money would be entrusted to the named Trustee for administration within a trust, not a blanket power of attorney for the underwriter to use the money anyway they wished. It is the opposite of a power of attorney or agency because it arises by breach of the terms and conditions of the sale of the certificates.

While the standing test is easily stated, it can be difficult to apply. The Supreme Court has observed that “[g]eneralizations about standing to sue are largely worthless as such.”3

The Supreme Court also imposes “prudential” limitations on standing to ensure sufficient “concrete adverseness.”4 These include limitations on the right of a litigant to raise another person’s legal rights, a rule barring adjudication of generalized grievances more appropriately addressed legislatively, and the requirement that a plaintiff’s complaint must fall within the zone of interests protected by the statute at issue.5

The Supreme Court has made it clear that the burden of establishing standing rests on the plaintiff.6 At each stage of the litigation—from the initial pleading stage, through summary judgment, and trial—the plaintiff must carry that burden.7Standing must exist on the date the complaint is filed and throughout the litigation.8 Moreover, standing cannot be conferred by agreement and can be challenged at any time (e.s.) in the litigation, including on appeal, by the defendants or, in some circumstances, by the court sua sponte.9 Finally, plaintiffs must demonstrate standing for each claim and each request for relief.10  There is no “supplemental” standing: standing to assert one claim does not create standing to assert claims arising from the same nucleus of operative facts.11

The Supreme Court has held that, to satisfy the injury in fact requirement, a party seeking to invoke the jurisdiction of a federal court must show three things: (1) “an invasion of a legally protected interest,” (2) that is “concrete and particularized,” and (3) “actual or imminent, not conjectural or hypothetical.”12

In foreclosure cases, trial courts have nearly universally found that a party had standing because of legal presumptions without any proof of ownership of the debt. The good practitioner will drill down on this showing that the “presumption” is conjecture or hypothetical and that there is no harm in making the foreclosing party prove its status instead of relying on presumptions.

One last comment on both judicial and nonjudicial foreclosure. In typical civil cases if the defending party makes it clear that he/she is challenging standing, the party bringing the action must then prove it. In foreclosure cases judges typically adopt the position that the homeowner brought it up and must prove the non-existence of standing. This is the opposite of what is required under Article 3 of the US Constitution.

The party who “brought it up” is the foreclosing party. It manifestly wrong to shift the burden to the homeowner just because the foreclosing party asserts, or as in many cases, implies standing, In fact, in my opinion, nonjudicial foreclosure is constitutional but NOT in the way it is applied — by putting an impossible burden on the homeowner that makes it impossible for the homeowner to confront his/her accusers.

WHAT HAPPENS TO THE DEBT IF THE COURTS APPLY THE LAW? The debt still exists in the form of a liability at law and/or in a  court of equity. The creditor is a group of investors who have constructive or direct rights to the debt, and potentially the note and mortgage. The difference is that decisions on settlement and modification would be undertaken by the creditors — or designated people they currently trust. And that  means the creditors would be maximizing their financial return instead of minimizing it through intermediaries. But there is also the possibility that the investors have in fact been paid or have accepted payment in the form of settlements with the underwriters. Those settlements preserve the illusion of the status quo. In that case it might be that the underwriter is the actual creditor, if they can prove the payment.

HOW CAN THE NOTE BE TRANSFERRED WITHOUT THE DEBT?

Here is an analogy that might help this counterintuitive process.

Assume I own a car. I enter into an agreement with my friend Jane to sell the car to her. I sign the title and give it to her. Afterwards we both decide we didn’t want to do that. Jane pays nothing for the car. Jane does not get the car. Jane never uses the car. I still have and use the car and both Jane and I disregard the fact that I gave her a signed title. She does nothing with the title. Later in a loan application she lists the car as an asset. Then the car is stolen from me.

Who gets the insurance proceeds? The question is whether the title represents an actual agreement to buy the car. And all courts that would boil down to whether or not Jane paid me. She didn’t. I get the insurance proceeds because I lawfully applied for a duplicate title and received it.

But Jane still has one copy of the title signed by me in original form. She has also made copies of it that can be printed out with the appearance of an original. So far, she has sold the car 42 times and taken out 7 loans on the car.

One of the people that received the title records it with the DMV. There is a problem with that. I still have title and possession of the car. The gullible person who “bought” the car has a title signed by Jane, who has produced evidence that she received title from me. One Jane’s lenders on car stops receiving payments from Jane’s Ponzi scheme.

They “repo” the car and we go to court. The lender to Jane has no legal title even though they have what looks like an original title that is facially valid. Do I get my car back or does the lender” get to keep it.

One step further: if jane’s lender was actually a co-conspirator who accepted the false title and never gave a loan, does that change anything? I ask because this is exactly what is happening in nearly all foreclosures. The named “successor” in title engaged in no transaction to acquire the debt.

Transfer of the note was without regard to transferring the debt because neither the grantor nor grantee owned the debt. If the truth comes out, the transfer of the note will be seen as a sham paper transfer and the debt will be owned by whoever has money in the loan deal. Hence transfer of the note is not transfer of the debt. By denying the transfer of the note, the burden of proof should be on the would-be foreclosing party to show it was part of a real transaction.

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