THE MYTH OF FORECLOSURE SINCE 2001: “why would the banks foreclose unless they had to? The banks don’t want the homes and they don’t want to foreclose. The banks just want to get repaid for a legitimate loan.”
There is a natural tendency to believe that the bank would not be in the courtroom seeking a foreclosure in the absence of an actual loan that was unpaid. The presumption of the judge naturally moves towards the statistical certainty that banks would not incur the expense of foreclosing on property in which they had no interest. Thus for all of the flagrant criminal and civil violations committed by the banks in the enforcement of loans, the thoughts of any reasonable judge naturally drift to the idea that our marketplace will be completely corrupted and un-trusted if we let borrowers off the hook on legitimate debts. I think that this is the reasoning that dominates the thinking of judges and justices on the trial bench and the appellate courts. And it is not unreasonable for them to have that knee-jerk reaction after centuries of statistical evidence showing that the above presumption has been correct millions of times.
This is why lawyers are necessary and pro se litigants probably will fare poorly most of the time. As a rule of thumb, I tell attorneys whom I am mentoring that they have approximately 30 seconds to get the judge’s attention before the judge’s mind wanders off into the knee-jerk land that is described above. I suggest that you will get the judge’s attention through the establishment of rapport. Real rapport is established when you introduce your argument using terms and doctrines and common sense that you already know live in the mind of the judge. So you may as well say that all things being equal, you would normally rule in favor of the bank and against the borrower regardless of the hardship and regardless of the empathy that one might feel towards the borrower. You might also say that all things being equal, your empathy toward the borrower would be mitigated by their lack of judgment in taking a loan that they could not afford.
But then it is time to make your point. The reason you are there in court is not because you were paid but because you think the borrower has a case in which the borrower can and should prevail. Your primary point should be that if this was merely about fabrication of documents for an otherwise legitimate debt that was unpaid, you wouldn’t be there. Your secondary point should be that there is a very good reason why the borrower can and will deny the debt, deny the note, deny the mortgage, deny the default, and deny the existence of a creditor who would qualify under state statute to submit a credit bid at any foreclosure auction. And your third point should drive that point home, to wit: the reason is that nobody in this courtroom nor any of their predecessors or successors have any interest in this loan. Instead they are participants in a scheme to prevent the borrower and this court from knowing the identity of the creditor at the time of the loan and the identity of the creditor at this time.
You should express confidence that the facts will show that there is a complete absence of any money exchanging hands between them and the borrower and between them and any “assignee” of any any instrument. In fact, you are confident the facts will show there is a complete lack of privity between the borrower and these people and entities with whom the borrower never did business, except to make monthly payments under the mistaken belief that the servicer was the bookkeeper for the creditor. (That is why they use Limited powers of attorney and false designations of “Signing officer” — you can do it unilaterally and you don’t need to show an underlying transaction for those instruments, but you DO need consideration (canceled check or wire transfer receipt) for the origination of the loan and any assignments claiming there was a transactional sale of the loan).
The next thing I tell lawyers whom I mentor is that they have five minutes to convince the judge and they should avoid any argument that is off-topic, to wit: don’t even think that you can win the entire case in any one hearing. So for example you might tell the judge that the banks are not foreclosing because they have to, they are foreclosing because they want to. This would be a good time to say that things have changed dramatically since traditional foreclosures virtually ended 20 years ago. Then you go on to state that the reason why these parties are attempting to foreclose on this property is because they have already been paid large fees sometimes in excess of the principal amount of the loan demanded; and they will owe those profits and fees back to the investment bankers that paid them to pretend to be lenders and pretend to be creditors and pretend to be parties with the right to foreclose. Sounds crazy but it is true.
And the reason that the investment bankers have paid them to do that is that the investment bankers stole part of the investor money that fueled this scheme, put it in their own pockets and then instead of using the infrastructure of the documented promises made to investors, they claimed to own the loans themselves that were fueled with what money was left after the investment banker skimmed the top. BY claiming they owned the loans they received insurance, credit default swaps, federal money and proceeds of sale to the Federal Reserve and others to the extent of receiving as much as 42 times the principal supposedly due from the borrower, which at all times was due to the investors directly without any intervening entities.
So that leaves the borrower unable to exercise his rights under HAMP and the so-called servicers are prevented from compliance with HAMP because they don’t actually have a debt anymore much less a creditor or any authority to speak for a creditor. By smothering the court with fraudulent paperwork these banks are creating the illusion of a debt, the illusion of a note that can be used as evidence of the debt, the illusion of a mortgage lien that has been perfected and the illusion of a default on a loan that is not in default and which in all probability has been paid by people who have waived their right to contribution and subrogation.
The sole reason we are here, your Honor, is that the banks need this foreclosure to avoid liability to third parties from whom they collected millions of dollars — they are not here to be repaid for a loan that isn’t due to them and never was.
Someone must benefit from these criminal actions. Up till now, it has been the criminals. Now it is our turn.
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