Is Donald Duck Your Lender?

 

I was asked a question a few days ago that runs to the heart of the problem for the banks in enforcing false claims for foreclosure and false claims of losses that should really allocated to the investors so that the investor would get the benefits of those loss mitigation payments. This is the guts of the complaints by insurers, investors, guarantors et al against the investment banks — that there was fraud, not breach of contract, because the investment bank never intended to follow the plan of securitization set forth in the prospectus and pooling and servicing agreement. The question asked of me only reached the issue of whether borrowers could claim credit for third party payments to the creditor. But the answer, as you will see, branches much further out than the scope of the question.

If you look at Steinberger in Arizona and recent case decisions in other jurisdictions you will see that if third party payments are received by the creditor, they must be taken into account — meaning the account receivable on their books is reduced by the amount of the payment received. If the account receivable is reduced then it is axiomatic that the account payable from the borrower is correspondingly reduced. Each debt must be taken on its own terms. So if the reduction was caused by a payment from a third party, it is possible that the third party might have a claim against the borrower for having made the payment — but that doesn’t change the fact that the payment was made and received and that the debt to the trust or trust beneficiaries has been reduced or even eliminated.

The Court rejected the argument that the borrower was not an intended third party beneficiary in favor of finding that the creditor could only be paid once on the debt. I am finding that most trial judges agree that if loss-sharing payments were made, including servicer advances (which actually come from the broker dealer to cover up the poor condition of the portfolio), the account is reduced as to that creditor. The court further went on to agree that the “servicer” or whoever made the payment might have an action for unjust enrichment against the borrower — but that is a not a cause of action that is part of the foreclosure or the mortgage. The payment, whether considered volunteer or otherwise, is credited to the account receivable of the creditor and the borrower’s liability is corresponding reduced. In the case of servicer payments, if the creditor’s account is showing the account current because it received the payment that was due, then the creditor cannot claim a default.

A new “loan” is created when a volunteer or contractual payment is received by the creditor trust or trust beneficiaries. This loan arises by operation of law because it is presumed that the payment was not a gift. Thus the party who made that payment probably has a cause of action against the borrower for unjust enrichment, or perhaps contribution, but that claim is decidedly unsecured by a mortgage or deed of trust.

You have to think about the whole default thing the way the actual events played out. The creditor is the trust or the group of trust beneficiaries. They are owed payments as per the prospectus and pooling and servicing agreements. If those payments are current there is no default on the books of creditor. If the balance has been reduced by loss- sharing or insurance payment, the balance due and the accrued interest are correspondingly reduced. And THAT means the notice of default and notice of sale and acceleration are all wrong in terms of the figures they are using. The insurmountable problem that is slowly being recognized by the courts is that the default, from the perspective of the creditor trust or trust beneficiaries is a default under a contract between the trust beneficiaries and the trust.

This is the essential legal problem that the broker dealers (investment banks) caused when they interposed themselves as owners instead of what they were supposed to be — intermediaries, depositories, and agents of the investors (trust beneficiaries). The default of the borrower is irrelevant to whether the trust beneficiaries have suffered a loss due to default in payment from the trust. The borrower never promised that he or she or they would make payment to the trust or the trust beneficiaries — and that is the fundamental flaw in the actual mortgage process that prevailed for more than a dozen years. There would be no flaw if the investment banks had not committed fraud and instead of protecting investors, they diverted the money, ownership of the note and ownership of the mortgage or deed of trust to their own controlled vehicles. If the plan had been followed, the trusts and trust beneficiaries would have direct rights to collect from borrowers and foreclose on their property.

If the investment banks had not intended to divert the money, income, notes and mortgages or deeds of trust from the creditor trust or trust beneficiaries, then there would have no allegations of fraud from the investors, insurers and government guarantee agencies.

If the investment banks had done what was represented in the prospectus and pooling and servicing agreements, then the borrower would have known that the loan was being originated for or on behalf of the trust or beneficiaries and so would the rest of the world have known that. The note and mortgage would have shown, at origination, that the loan was payable to the trust and the mortgage or deed of trust was for the benefit of the trust or trust beneficiaries, as required by TILA and all the compensation earned by people associated with the origination of the loan would have had to have been disclosed (or returned to the borrower for failure to disclose). That would have connected the source of the loan — the trust or trust beneficiaries — to the receipt of the funds (the homeowner borrowers).

Instead, the investment banks hit on a nominee strawman plan where the disclosures were not made and where they could claim that (1) the investment bank was the owner of the debt and (2) the note and mortgage or deed of trust were executed for the benefit of a nominee strawman for the investment bank, who then claimed an insurable interest as owner of the debt. As owner of the debt, the investment banks received loss sharing payments from the FDIC. As agents for the investors those payments should have been applied to the balance owed the investors with a corresponding reduction in the balance due from the borrower —- if the payments were actually made and received and were not hypothetical or speculative. The investment banks did the same thing with the bonds, collecting payments from insurers, counterparties to credit default swaps, and guarantees from government sponsored entities.

When I say nominee or strawman I do not merely mean MERS which would have been entirely unnecessary unless the investment banks had intended to defraud the investors. What I am saying is that even the “lender” for whom MERS was the “nominee” falls into the same trapdoor. That lender was also merely a nominee which means that, as I said 7 years ago, they might just as well have made out the note and mortgage to Donald Duck, a fictitious character.

Since no actual lender was named in the note and mortgage and the terms of repayment were actually far different than what was stated on the borrower’s promissory note (i.e., the terms of the mortgage bond were the ONLY terms applicable to the plan of repayment to the creditor investors), the loan contract (or quasi loan contract, depending upon which jurisdiction you are in) was never completed. Hence the mortgage and note should never have been accepted into the file by the closing agent, much less recorded.

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61 Responses

  1. Thanks so much I will be in touch with you soon.

  2. 410 916 8863

  3. @ToddW I need to know how to get in touch with you

  4. Take II – the agencies might not be concerned about claw-back potential unless the people who sold to them would be subject to claw back. I’m NO authority on claw-back, not even very knowledgeable. Just have a generic idea of what it means.

  5. I said:
    “(altho I believe it was used /allowed fnma, fhlmc, and gnma to avoid the repurchase part)” What I should have said is MERS has been used or has allowed the avoidance of the repurchase for enforcement by FNMA, FHLMC, and the Issuers on GNMA (fha, va) loans (not gnma).
    Can we agree on this:

    1) F & F must repurchase to end their guarantees. They would then
    be the foreclosing party.
    2) Any payments made on the loan prior to repurchase must be
    credited to the balance.
    3) On gnma loans, the Issuer must repurchase for enforcement of the
    loan. GNMA makes its fha insurance and VA guarantee payable
    to the Issuer, not a trust, but the Issuer, in order to get that
    benefit, must repurchase and be the foreclosing party. If the
    Issuer doesn’t repurchase and foreclose, the ins / guar is foregone.

    Does this p r o v e that the trusts can”t foreclose, i.e., do business?
    No, but it’s certainly indicative and it reads. The fact of any guarantee or insurance – paid for by the borrower – made by the U.S. or its agencies became a sales tool for sec’n. The borrower, in some cases unknowingly, and in others knowingly, pays for that guarantee made by a party (or to be made) who is a third party at the time of loan closing. The borrower is informed, sort of, on fha and va loans, but he believes it’s always his lender who’s the beneficiary of that guar and ins, when in fact, way I get it, on those loans (fha and va), the benefit of the guar and ins will be converted to a third party*, the Issuer, once the loan is securitized. During the time the trust is the alleged loan owner, it apparently has NO right to the fha ins or va guarantee. Once the loan is sec’d, those may only be gotten by the Issuer (whom to get them must repurchase, foreclose and incur a loss).
    On F & F loans, the borrower is not informed that he is paying a
    guarantee fee to a third party, F & F, for the benefit of those who will become the alleged loan owners thru securitization and MBS’s. Then, they don’t even see fit to credit his account with those payments.
    Because the cost of the “g-fee” is built into the interest rate, it would be accounted for in the a.p.r. of the loan, but it’s shown as interest in the p & i calculation, when it isn’t (interest). It’s a payment, a fee, to a third party for its ultimate sale of the loan to yet others

    If, as I contend, it’s so that all U.S. and agency loans are insured / guaranteed and that this arrangement was made because “static” trusts can’t do business (or actually, in conjunction with any other reasons, like sales’ enhancements) of MBS’s, then it stands to reason there are similar agreements in place on sub-prime and non-agency loans. That or tough luck for investors on those loans (and reminds me of the bs ratings) if there aren’t such “arrangements” (if trusts may not themselves enforce).
    Enter MERS, the non-agent, which didn’t really solve the problem for lack of interest in the note imo, plus two parties contracting with a borrower to me is totally tweaked). The agencies, if they followed their own “stuff”, would only be interested in mers for any possible bk remote-ness benefit. Who wants to guarantee / insure and maybe have to fight a claw-back, also? NO one. The claw back potential become more germane with securitization because of the lightening speed with which that gang purported to securitized loans (NO seasoning). Theretofore, the agencies held the loans and bk remoteness was not much of an issue, if any (if it could even be implemented against the U.S. or its agencies)
    lay opinions – if this affects you, ask a lawyer

  6. Those of you who can…. ask for your notes back from anything you’ve ever paid off. Detinue. Everyone should do it, tomorrow it would just be awesome.
    http://mortgagemovies.blogspot.com/2014/03/kingcast-and-mortgage-movies-present_17.html

  7. France bans Monsanto GM maize ahead of sowing season
    PARIS, March 15 Sat Mar 15, 2014 9:11am EDT

    (Reuters) – France’s agriculture ministry on Saturday banned the sale, use and cultivation of Monsanto’s MON 810 genetically modified maize, the only variety currently authorised in the European Union.

    The French government, which maintains that GM crops present environmental risks, has been trying to institute a new ban on GM maize (corn) after its highest court has twice previously struck down similar measures.

    The decision is timed to avert any sowing of GM maize by farmers before a draft law is debated on April 10 aimed at banning planting of GMOs (genetically modified organisms).

    http://www.reuters.com/article/2014/03/15/france-monsanto-idUSL6N0MC0BR20140315

    Positive things are, indeed, happening worldwide. Revisit MERS as much as you want and keep going ’round and ’round about banks. The world is moving forward and away from US crap, including US crap money. It’s all good. One of these days, US people may even wake up… and throw out US crap.

    Naaaah. Not as long as they spend the MERS hair for ever and ever and getting nowhere.

    Action happens at a different level.

  8. SRI LANKA BANS LEADING MONSANTO HERBICIDE CITING DEADLY DISEASE FEARS
    http://www.icij.org/blog/2014/03/sri-lanka-bans-leading-monsanto-herbicide-citing-deadly-disease-fears

    And one country at a time is banning Monsanto. Things are moving worldwide. I knew they would.

  9. THE POWER TO DESTROY
    IRS ACTUALLY FEARS MAN WHO DOESN’T FILE TAXES
    ‘Would blow them out of the water if this became public knowledge’
    Published: 06/02/2013 at 2:55 PM

    Read more at http://www.wnd.com/2013/06/businessman-irs-fears-prosecuting-me/#iZccAmSOD1gSUY3u.99

    So far, it’s true. 80,000 self-employed people have taken the jump and survived. Like everything else, one needs to know what one is doing and to remain focused.

  10. If there weren’t rules regarding agency, particularly in reference to real property, I could say I’m your agent and sell your home while you’re away for 10k. Real property is afforded more protection than wickets, as it should be. The laws say that this agency must be reduced to writing, signed by the principal, and the CA one demonstrates that even if an agent otherwise has authority, sometimes he doesn’t; he doesn’t and can’t commit fraud thru his agency on behalf of his principal. If an agent, by my lay person reading, attempts a fraudulent or suspected (?) fraudulent action, he cannot be doing so under his
    agency (that is, if he otherwise had one with the party he attempts to bind to his act).

  11. As to the S of F, the party to be charged imo is generally what I said, but it’s poss it could also be a grantee, lessee, assignee. In a lease, for instance, looks to me like both the lessee and lessor might be being charged……?

  12. 2010 Tennessee Code
    Title 29 – Remedies And Special Proceedings
    Chapter 2 – Statute of Frauds
    29-2-101 – Writing required for action.

    (a) No action shall be brought:

    (4) Upon any contract for the sale of lands, tenements, or
    hereditaments, or the making of any lease thereof for a longer
    term than one (1) year; or

    (5) Upon any agreement or contract which is not to be performed
    within the space of one (1) year from the making of the agreement
    or contract;

    unless the promise or agreement, upon which such action shall be
    brought, or some memorandum or note thereof, shall be in writing,
    and signed by the party to be charged therewith, or some other
    person lawfully authorized by such party. In a contract for the
    sale of lands, tenements, or hereditaments, the party to be charged **
    is the party against whom enforcement of the contract is sought.

    ** As to the sof and this provision, the ‘party to be charged’ is the grantor or assignor or lessor. This is about the S of F, which altho
    related to the equal dignities rule, is not about agency per se. I had to give it up before finding the TN version of that rule (if any).
    This comment is a lay opinion and I similarly don’t know if this is the current version of this statute or the one below.

    Chapter 1015 SB2890

    Liens – As enacted, makes it a Class A misdemeanor for any person,
    including any individual or entity, to knowingly prepare, sign, or file
    any lien or other document with the intent to encumber any real or
    personal property when such person has no reasonable basis or any
    legal cause to place such lien or encumbrance on such real or
    personal property. – Amends TCA Title 39, Chapter 17, Part 1.

  13. “CA 2306. An agent can never have authority, either actual or ostensible, to do an act which is, and is known or suspected by the person with whom he deals, to be a fraud upon the principal.”

    1) for whom is the MERS the alleged principal? I always say an agent
    executes an assgt in its capacity as the agent for the last, not current,
    note owner.

    2) If MERS purports to act for anyone in assigning notes and dots to a trust after the legal cut-off date, because apparently as a matter of law, this is not allowable, does the act qualify as one of fraud such that
    MERS, pursuant to this CA statute, cannot have any such authority, and if it has no authority, is the instrument void (on this score)? Seems like it’s both void and fraudulent:

    1) is a post – cutoff assgt fraudulent?
    2) is it void for lack of authority of the “agent”?

    Imo, as I always say and am trying to demonstrate, any agency agreement re: real estate must be “actual” by “written expression”, signed by the party to be charged with the agency agreement, the principal.

  14. AZ 44-101. Statute of frauds

    No action shall be brought in any court* in the following cases
    unless the promise or agreement upon which the action is brought,
    or some memorandum thereof, is in writing and signed by the party
    to be charged, or by some person by him thereunto lawfully authorized:

    6. Upon an agreement for leasing for a longer period than one year,
    or for the sale of real property or an interest therein. Such
    agreement, if made by an agent of the party sought to be charged,
    is invalid unless the authority of the agent is in writing, subscribed by the party sought to be charged.

    *jg: non’j (out of court) – haven’t looked yet
    “party sought to be charged” = principal

    CA 1624. (a) The following contracts are invalid, unless they, or some
    note or memorandum thereof, are in writing and subscribed by the
    party to be charged or by the party’s agent:

    (1) An agreement that by its terms is not to be performed within a
    year from the making thereof…..

    (3) An agreement for the leasing for a longer period than one
    year, or for the sale of real property, OR of an INTEREST therein;
    such an agreement, if made by an agent of the party sought to be
    charged, is invalid, unless the authority of the agent is in writing,
    subscribed by the party sought to be charged.

    CA Civil Code Agency:

    2306. An agent can never have authority, either actual or ostensible, to do an act which is, and is known or suspected by the person with whom he deals, to be a fraud upon the principal.

    2309. An oral authorization is sufficient for any purpose, except that an authority to enter into a contract required by law to be in writing can only be given by an instrument in writing.

    2313. No unauthorized act can be made valid, retroactively, to the prejudice of third persons, without their consent.

    2321. When an authority is given partly in general and partly in specific terms, the general authority gives no higher powers than those specifically mentioned.

    2322. An authority expressed in general terms, however broad, does not authorize an agent to do any of the following:

    (b) Define the scope of the agency.

    2338. Unless required by or under the authority of law to employ that particular agent, a principal is responsible to third persons for the negligence of his agent in the transaction of the business of the agency, including wrongful acts committed by such agent in and as a part of the transaction of such business, and for his willful omission to fulfill the obligations of the principal.

    ***********

    (c) Violate a duty to which a trustee is subject under Section 16002, 16004, 16005, or 16009 of the Probate Code. This is for KC fwiw.

    Florida: 725.01

    No action shall be brought….upon any contract for the sale of
    lands, tenements or hereditaments, or of any uncertain interest
    in or concerning them, or for any lease thereof for a period
    longer than 1 year, or upon any agreement that is not to be
    performed within the space of 1 year from the making thereof…..
    …..unless the agreement or promise upon which such action shall be
    brought, or some note or memorandum thereof shall be in writing and
    signed by the party to be charged therewith or by some other person
    by her or him thereunto lawfully authorized.

    jg: this is as to the S of F only. Apparently, as to Florida, the other day
    when I was looking into this, I didn’t get to any FL version of the
    equal dignities rule.

    Anything with my initials by it is lay opinion
    I probably didn’t make absolutely certain the statutes recited were the most current.

  15. This is why under FOIA request the questions i asked about the assets sold and their disposition at certain times during the ” life of the loan” (or should i say debt obligation) re remic trust and other sticky questions has been stonewalled. I still however will not concede to the 1099a issued by the so called lender and it is a point of fact under my current appeal which is awaiting decision. And im waiting and waiting and waiting.

  16. You hit it right on the head, ian…collections…I don’t about “collection” rights? Does one have a “right” to collect on something that has been paid? NO This is why the maze of assignments, to distance themselves from the crime scene…and the lawyers are right next to them, holding their hands, telling them we got this!

    Long-term, we’ll just see about that!

    Not only does the financial sector NEED to purged, but a whole lot less lawyers would work beautifully.

  17. T.I.C. … (is just) Tock

    T.I.E. … Binds

  18. Some states (if not most) understand the difference between tenets in common vs tenets in entirety.

  19. I would say that is How You Wipe Out an Entire Generation of Hard Working People over the age of 50.

    What do you say?

  20. What if you were the certificate holders and counted on the derivative checks to pay your own mortgage, or to live on during retirement?
    What would you do?

    The Triple Whammy.

  21. The Investors were the intentional beneficiaries of the pass thru cash flows (rents) of the trust?

    The REMICs were set up to avoid double taxation of the Owner?

    I know for a fact income derived from derivatives is taxable income for Certificate Holders.

  22. Poppy- yes, no press about anything. Over 16000 foreclosure suicides. Caused by financial/legal/govt entities who only purchase collection rights to charged off, paid off (multiple times), unenforceable, defective predatory loans which breached the reps and warranties in every REMIC thereby becoming “void transactions” under NY Trust law. So what are we all doing about it? Me? Not doing much sad to say. Whole thing is a nightmarish in fathomable horror show

  23. I see there is no press about that, ian…and there is little press about the lawyers masquerading as lender-holders-owners. This crap is all a scam…even if there was a collectable, it is far less than the face value and “should” be reduced to every homeowner in the same way!

  24. Who is the beneficiaries?

    There is NO beneficiary in a MORTGAGE.
    But there is in an Irrevocable Living Trust.
    Ezeekeeo saw the Will!

    Just Sayin …

  25. Good Morning Sunshine!

    RE: ” But IF the notes are converted to securities, then there’d be no note for anyone to repurchase…..???”

    ~And there would be… NO ENFORCABLE MORTGAGE ~

    Conjunction Junction, What is your Function?

  26. Option one tidbits and delightful things to ponder: in a single FLA subdivision, out of 800 OO loans, only one person ever made their first payment. A cheerful fellow by the name of Oscar Benn wrote $600,000,000. worth of loans for option one, most of them fraudulent . He has been erased from the Internet. His wife, Dafnis Benn, covered for him while she masqueraded as a workout specialist for OO. Option One, owned by HR Block, used loan app information to sell people useless overpriced insurance and financial products. Option One sometimes refinanced borrowers via HR Block Mortgage. While speaking with “representatives” from OO, you could immediately realize that you were speaking with an uneducated lower class type, and then they were one of the first to offshore to INDIA. The India website and links make for interesting reading.

  27. But IF the notes are converted to securities, then there’d be no note for anyone to repurchase…..??? Put it back in pot and shake again? I’m just looking for a ben of the trust’s assets because trusts need bens, right? If the income generated by the assets is identical to that commited, than the cert holders could be the bens, right?

  28. Neil said:
    “There would be no flaw if the investment banks had not committed fraud and instead of protecting investors, they diverted the money, ownership of the note and ownership of the mortgage or deed of trust to their own controlled vehicles. If the plan had been followed, the trusts and trust beneficiaries would have direct rights to collect from borrowers and foreclose on their property.”

    I’m just not so sure that’s true, that there would be no flaw if the banksters had acted according to Hoyle. Even if done properly, there
    doesn’t seem to be a real correlation between the payments on the notes (by note makers) and the payments to securities’ holders. Here’s why I’m not so sure fwiw:

    1) a trust needs beneficiaries of its (own) assets, just like the trust in a deed of trust needs a beneficiary. The assets of a trust are the loans. Yes? Or have those assets been thrown into the trust-pot (shaken, not stirred) and come out certificates? IS there an exchange or conversion of the trust’s assets?

    2) the certificate holders are paid by a different scenario, plan, agreement, contract, whatever, at any rate, differently than the notes pay. They are not paid pursuant to the notes; they aren’t paid pursuant to the assets of the trusts.

    3) Certificates are factually only derivative of the income received by the trust (ties to 2 above). They’re not the same.

    4) If the assets of the trust have been converted, back to 1 above,
    a) is this actually possible and b) isn’t is so there’s no longer a note to enforce, and of course, with no note, there’s no security instrument?

    How is it that 1) a trust can either have no beneficiaries of its actual assets or 2) that a trust may pay on non-assets of the trust?

    Did I miss one?
    Maybe one of these is the legit dynamic, but I don’t get it and generally avoid it. But it’s getter harder to ignore.

    If a trust had 5000 loans which paid 10m per month and the certificate holders were paid their pro-rated share (as evidenced by their certificates) of the 10m per month, seems to me that would make the cert holders the ben of the trust. But isn’t it that instead of paying out 10m generated by the loans (p & i), if you added up the commitments to the cert holders, they would not add up to 10m (less legit adminstrative costs of the trust)? I know this may be sophomoric for some here, but no, I don’t get it. I can see how some cert holders could be paid 3% and others 5%. Is that it? Is that how the 10m could be commited at 10.5 million? No, I don’t think that’s it, either.
    I don’t know. But I’d like to if anyone can explain. Aren’t these trusts in fact “static”, being limited to accepting payments and disbursing them to beneficiaries? IS it an absurd concept that these trusts have no way to enforce their assets – loans (which would explain the fnma guarantee, for instance; fnma will repurchase and FNMA will enforce. It also helps explain why gnma makes its guar / ins to the Issuer, who similarly must repurchase to get that guar / ins AFTER foreclosure – a somewhat different scenario than fnma’s, whose guarantee kicks in on missed-payment 1). I once posited these are asset – backed securities in name only, mol, because that’s what they are if there’s no ability to “do business” and enforce them (like I’ve said, see psa re: “doing business” ver batim). If that’s the case, then yes, to me it does explain the FNMA guarantee / buy-back commitment as well as GNMA’s m.o. requiring the issuer to repurchase (because the trusts can’t foreclose, which is doing business). What fha, va, and many conventional, conforming loans are is guarantee-and-repurchase-backed. THEY’RE the ones who rely on the “asset-backed”. So as to f/c and MERS, they really only needed MERS to foreclose for non-agency loans (altho I believe it was used /allowed fnma, fhlmc, and gnma to avoid the repurchase part). Dang.

  29. An Interesting defense, is going on offense.
    ie Prior to being served, this expert suggests transferring ones deed to another, who the Pretender Lender then has to track down to commence foreclosure.
    What if he is out of the country?

    http://truthspress.files.wordpress.com/2011/08/foreclosure-defense.pdf

  30. neidermeyer, others – those guys are nuts if they think their “tardy” assignments to the trusts relieve them of anything or that foreclosure will justify their receipt of those funds. Imo, the ONLY way they’re off the hook as to that receipt is if 1) they actually owned the loan at the time of the third party payment and 2) they were not under an obligation to transfer / assign /convey the note, having been bound contractually and or by their acceptance of note-buyer funds. If they had been paid for a note but not delivered it, they had no insurable interest (pretty sure), at least not with a regulated insurer. Someone else who is not regulated by any agency which demands ins only for insurable interests could’ve taken that “bet, but not AIG imo. Someone, as you surmise, is lying to somebody(ies). Since this is a situtation ‘close to your heart’, maybe you will scour the UCC until you find the answer to this: If Party A is contractually obligated to transfer / assign / convey a promissory note and or has accepted fair value for that t/a/c from party B, but not done any of those, to whom do insurance / guarantee funds, ANY payment or third party payment, belong? One who has obligated himself to t/a/c a note, no longer has right imo to payment from ANYbody (but neither does the party who is to have gotten the t/a/c until it gets it -or – he may have a right to payments actually made, but may not enforce for non-payment without the note). This part of the deal – who has the right to payment during that time – must be found in the UCC. None of these answers will be found in the PSA, that’s for sure, so off to the default-law UCC it is…? If Party A had no right to payment, but accepted it, what is the impact on the note?* I believe it retires the note dollar for dollar, but not sure. It may not. It might be theft or conversion or like that. In your case, you are looking to demonstrate something different, I think – that the party who received those funds was the right party and therefore, to the extent of payment received, the note was paid. But if I were in your shoes, I would see what the UCC says about funds received by the obligated-to-t/a/c party (I don’t like surprises) just in case it’s conversion or like that and the bankster claims you weren’t a party to that deal (they won’t call it what it was, of course) and it isn’t your claim to make. Hope I managed to say what I mean. BAC could trick you and somehow claim you have no standing to argue their wrongful payment. It does seem they’d have to concede some bad act, but you know how slipperty that gang is. It’s of interest to all of us, because apparently, many of those fine folks were paid on claims for our loans.

    *if BAC were obligated to t/a/c the note, but didn’t, according to the way this deal is being played, BAC could yet come into court and say “we’re the holder”, even tho they’ve been paid at least once. Nah, they have no right to payment if they’ve already been paid by anybody. That’s a heck of a note – get paid for a note by a third party and then t/a/c it to another party to collect again from the h.o. – and that’s what’s apparently going on and will continue as long as homeowners don’t support the jurisdiction-invoking injury. imo.
    Buuuut, I really can’t say this minute what’s what in a situation where Party A IS the note’s owner entitled to payment and was paid and still accepts value from another party who might be deemed a hidc (here ‘without notice’ of the payment to Party A). Party A is a bad actor, that’s for sure, but does that impact party B if he meets the reqs for hidc status? Dang, that’s gloomy. Bright spot: no one who takes a note with notice of its dishonor by its maker is a hidc, and since virtually all if not ALL loans (including the stinking note or it’s a false instrument) are assigned by “MERS” post-borrower-default, clearly the trusts aren’t hidc’s, so they may well be subject to the defense of prior payment to A. Prior payment is an aff defense. Does it extend to the prior payment being to a prior owner? I don’t know, but because the trusts can’t claim hidc status on a note allegedly in default, at least there’s hope.
    MERS and secn have to go! Beat it! Am-scray!
    strictly lay opinions as always

  31. neidermeyer I was fooled by Ross when I was watching this dude a few years ago on CNBC and he was talking about purchasing the $1 billion worth of loan for $400 million. I thought this dude was going to write down these loans and have the entire lot rewritten as FHA loan because most of the loan should have given the write down. But if he rewrote them at $600 million he would win and save the day.

    However the dude I guess just wanted to collect the addition $200 million by simply foreclosing on these loans.

    When there was no fear of the Fed Gov coming after these folks they simply will do what they want. But just as your talking about Wells Fargo and the Option One deal, they were foreclosing on Washington Mutual loan as the lender and did not purchase a simple on of those loans. But I see the war now as the FDIC is suing for the LIBOR because the smoke has been clear over the FDIC & JPMorgan non sale of Washington Mutual loans. Once JPMorgan submitted suit against the FDIC, the glove have come off.

  32. “Silence can only be equated with fraud where there is a legal or moral duty to speak or when an inquiry left unanswered would be intentionally misleading.” U.S. v. Tweel,550 F.2d 297(1977).

  33. Neidermeyer, right on to this:
    “… my main point is that BAC was paid directly by AIG after the sale to WF as trustee should have occurred … meaning that AIG, BAC, Option One and Wells Fargo all agreed that Wells Fargo was NOT the owner and BAC was ,,, and the tale they are telling in court via the “ta-dah” assignment (6 years late but mirroring the PSA) is O-One==>WF . ”

    Can there be any doubt? BAC either retained an insurable interest or
    insurance was issued by a regulated insuror on an uninsurable interest. I agree with you that BAC’s acceptance of those funds is or may be postured (go along) as pf evidence. And to the extent BAC accepted payment, then, there was nothing to assign. Sure looks like they fell into or designed a plan to allow the repayment by AIG, say, (some third party) of an asset for which they’d already been paid.

    1) Sell to trust and take trust’s money (or do as NG says)
    2) Don’t transfer / assign / convey
    2) Insure financial instrument in own name
    3) Get paid on that insurance
    4) Assign loan to trust via “MERS” (when loan is in default)
    4a) “Here’s your throat back. Thanks for the loan.” (bob d)
    5) Trust takes any hit (notwithstanding guarantees, etc IF the
    guarantees etc are honored
    6) Borrower and courts unlawfully kept in dark re: material facts
    and rely on article III alleged poss of orig note as if that’s the end
    of the matter (not even counting the guarantees, etc, i.e.,
    other laws in play ) and the handy “MERS assignment”

    I’m telling you (fwiw that I’m the one saying it), they are relying on that
    assignment of the note in the “MERS” assignment of the dot, and to date have with rare exception gotten away with it. It looks a hell of a lot like an article 9 (or some such) assignment.

  34. @ Charles Reed,

    I also have no problem with Option One ,, my main point is that BAC was paid directly by AIG after the sale to WF as trustee should have occurred … meaning that AIG, BAC, Option One and Wells Fargo all agreed that Wells Fargo was NOT the owner and BAC was ,,, and the tale they are telling in court via the “ta-dah” assignment (6 years late but mirroring the PSA) is O-One==>WF .

    Everything after that is a separate story… interesting to me but not affecting the “WF never owned the note” narrative… I would love to nail Ross for treating peoples homes ,, especially the ones in “my” trust ,, where there should have been paid in full notes ,, where the investors should have been made whole (Where did the money go BAC?) and the homeowners issued a satisfaction… as game chips ,, knowing the truth but boldly lying in EVERY foreclosure action.

    After the AIG payout it appears (spoke with the VEAL defendants attorney) that BAC sold the receivables to WL Ross & Co. , LLC …. and WF went along with continuing to process the income stream from AHMSI for the investors in their assigned role of MS and trustee,, Ross sold the receivables to OCWEN in 2012 when the easy money foreclosure flips started drying up.

    Ross never wanted to be in the servicing business ,, his game is getting full value judgements on cheaply bought receivables ,, he became a billionaire filing fraudulent credit card collection lawsuits and he saw the fraudclosure racket as an extension of that business model … The usual JDB gameplan … buy already charged off (uncollectible , $0.00 valuation) receivables for 2.75% of highest booked value from CC company ,, tack on another 50% for BS administrative fees , late charges , attorneys fees and such ,, file 10,000 lawsuits , get 98% of those suits won as uncontested and start garnishing wages on a charged off debt that he never really owned (because the debts were already charged off and the seller had already booked the loss as a debit against earnings to reduce their taxes)… lather, rinse and repeat… SCUMBAG.

  35. Also watch the piece on Fannie Mae securitization which is very different than Ginnie Mae, and you can see why the local counties allowed these bank to deliver these forgeries without a second thought! JPMorgan did not hurry up and settle with the Fed Gov and quick to admit bad underwriting and falsifying documents. The real deal is these clown presented forgeries to the court to foreclose which now involve two sets of homeowners, investors and government!

  36. I hope that the Justice Dept IG audit kick them into high gear as they got exposed for not going tough on this crap. To many articles on the mortgage/foreclosure/securities deal this week to not realize that I believe the newspapers are seeing that they been tricked.

    This administration was in save the bank mode and act like we trying to help the people, as really the other side in the GOP was loving the Obama school of hard love in telling people that the “wanted to live outside their means”! Make the victims are of the illegal activity and the public shut off it’s compassion and this allowed the bank to walk all over the homeowners!

  37. Poppy, that reminds me of the local attorney who threw the documents back at me after I refused to accept his initials as his signature . lol

    Good Morning Sunshine!
    Time to get the Gardening Gloves Out !

  38. Wall Street Investors Take Aim at Farmland

    —Tom Philpott on Fri. March 14, 2014 3:00 AM PDT

    Guess what’s next…the food supply manipulation by Wall St…

  39. I can say with certainty some of the law firms have the wife, husband working in the same office, one using a PO Box to hide. Then you have a lawyer, robo signer….the signatures match everywhere if you check. In my case the notary initials are wrong, How does a notary not know her own initials and BTW: the last name should be signed in FULL, that’s the rule. Then you have the same robo lawyer defending the suit for the substitute trustee who works in the firm and is the partner’s wife…..Hello

  40. This all makes sense but what do you do if your lawyer & Judge are unethical and make a decision that ignores the Facts of Law? Then you find out that there was a conflict of interest because the unethical Judge had a wife who is an attorney and head of the legal department for one of the Bib Banks accused of illegal foreclosures? Any advice is welcome

  41. neidermeyer I got not a big problem with part of what your saying, as long as Option One does the right thing the money is going to come from a bank because Option One is not a bank in the sense that its got any money on hand, so if money being wired in it coming from some bank.

    Now my problem after the criminal acts by the lender is that they simply screwed up and caused the crisis, and tried to hide it by screwing up the title system. Even if the loan got sold a million times but it was done right that just how it goes. However these folks got themselves into a jam by first selling all these adjustable rate loan, stated loan, pick a payment plus 80/20 and that cause all the fix rate loans to collapse due to the widespread unemployment!

  42. @ Charles Reed ,

    *********************
    and these investors or trust or whatever are not working as home mortgage lenders and are listed on the document/contract/Note as owner of and don’t have any proof of a money transfer from the loans in these securities!
    ********************

    I disagree to a point ,, NG likes to go back to the two separate contracts with the (investment bank controlled) trustee and master servicer placed as the go between to block all information flow on the note/mortgage/borrower side and on the consolidator/note selling syndicate/investor side. The investor can never be a lender… they are just the buyer of a packaged dollar amount of a product that is no longer a note…

    I hate to keep going back to my note but it is the one I am most familiar with and it has twists and turns that others don’t…

    Storefront “lender” … collecting fees
    Named lender (Option One) … collecting fees
    Actual money source for notes Bank of America
    Named buyer/trustee/master servicer Wells Fargo
    Selling Syndicate (usual suspects)
    Actual investors (buying certificates)

    Nothing unusual here except Option One was going broke and they used up their credit line for “my” trust on buying back and replacing bad loans in other recently created trusts … leaving Option One unable to pay back Bank of America for approx $700Million of my trust… making Bank of America wait until the certificates were sold to get refunded… unfortunately my trust had an immediate failure with approx. 7% of notes never getting payment #1 from borrowers (over the 5% trigger) and this got AIG involved … so the faked sale to WF from O-One aside Bank of America was still the owner at the time of the insurance payment (documented by AIG) … so in my case the entire payment in full scenario occurred entirely on the borrower side and NOT the investor side…

    What happened next was an asset sale to (believed and hinted at in docs but not yet verified) WL Ross & Co. , LLC dba as AHMSI at a HUGE discount… Ross rode the foreclosures until he got spooked by all the disclosures and fines against the TBTF banks.. and sold out to OCWEN.

  43. A prudent underwriter that should know

  44. Exactly JG. Would a prudent man not question the appeaisals

  45. The banks don’t lend you any money!! Period!! They can’t lend their depositors money nor the bank’s credit by law. So where does the money come from?? Get a copy of the Federal Reserve pub “Modern Money Mechanics”. READ IT. Lookup 12 USC 1813 L (1). READ IT. Promissory notes are converted to a check (lookup up the word “check” in Blacks law dictionary) and the face value of the promise to pay is deposited into an account. Then, using Fed Reserve fractional reserve banking, 9 times the value of the PN deposited into the account is then advanced. $100,000. becomes $1 million. They then: “lend” you back your own money that was created by the PN and take the investors money, pyramiding it into 9 x the amount deposited. WOW! The magic of fractional reserve banking – the scourge on us all!

  46. The latest is that the FDIC after 6yrs since the start of this crisis, and since 2001 it but said by bank insiders that LIBOR was rigged, and the FDIC is suing these banks? Duh most all the subprime adjustable rate mortgages were attached to the freaking LIBOR!

  47. Here the Game, and part of what Neil has said in the past is some what true as with who in a round about way actually funded the loans are these other investors and not the banks.

    What the bank does is upfront monies to close (as it is a bank and banks do have monies), and in a short time frame the loan are placed into these securities in exchange for monies that the bank will receive by drawing on the securities account.

    However there is the chicken or the egg argument the is developing and that is as JPMorgan, BOA, Citi and Wells Fargo had paid and are in negotiations right now as part of the $50 billion settlement, with at least three of the four have admitted to bad under writing with JPMorgan admitting also to falsifying documents, while Wells Fargo is currently in court also for the same FHA & VA crimes as JPM.

    So we got loans being falsely being created for the purpose of creating pools so they can do this again and again, which bring up the chicken or egg coming first. The reason MBS were created was to get more money in the housing area to do more lending for homes. However now with two stream of revenue and the one in Ginnie Mae MBS that are 100% guaranty, makes the one investment a no brainer.

    There is one brain block that Neil has and that is he does not want to understand that every lender of home mortgages in America is license to do so and are regulated either by the state or federal levels, and these investors or trust or whatever are not working as home mortgage lenders and are listed on the document/contract/Note as owner of and don’t have any proof of a money transfer from the loans in these securities!

  48. D Wynn, about those appraisals. In case anyone doesn’t know this, fwiw, loan underwriters are taught to “read” appraisals. They aren’t just to accept them as stated. They are to scour them for appropriate adjustments (for instance), such as to comparable sales for any number of things, like pool (in some geographic areas, a pool is not much of a plus, if any), age, condition, upgrades, lot size, sq footage, neighborhood, and so on. When an appraiser wants to scam a value, the way that’s often done is by making those adjustments improperly in favor of the subject property – and the underwriter is supposed to ferret this out. In fact, FNMA and fhlmc and probably other loan – buyers, “investors’, as they were called prior to sec’n, further mandated a certain percentage of desk reviews, or audits, of appraisals. Bet you’d agree they sort of skipped those. I guess my point is the appraisers didn’t act alone.

  49. btw seems there were overlapping specialists at the time, maybe #6, 10 lost track in past 6 mos.Their supposed compliance and reform is a joke but as Deborah Wynn says we have to keep pushing to expose the theft of our country.

  50. This hits home again. After 6 years the Chase customer service specialist required to know the case and provide real options per the CA Homeowner Bill of Rights claims the previous loan was never paid off! Claims I misunderstood that it was a new loan rather than a refi! Sorry! Then how is the Donald Duck version of Chase on the Note instead of the old lender? What are all the payoffs supposedly done at closing supposed to be? As I keep saying it’s not just MERS or securitization it’s fraud wherever it pops up and the American people need to stand up and quit being manipulated by these thieves and their stand-ins in the Congress and the Administration.

  51. NG, you said:

    “A new “loan” is created when a volunteer or contractual payment is received by the creditor trust or trust beneficiaries. This loan arises by operation of law because it is presumed that the payment was not a gift. Thus the party who made that payment probably has a cause of action against the borrower for unjust enrichment, or perhaps contribution, but that claim is decidedly unsecured by a mortgage or deed of trust.”

    I’m shocked by such an allegation. “This loan arises by operation of law because it is presumed that the payment was not a gift”. I’d sure like to see you support that. “By operation of law”?! At least the last part is accurate, that the claim is decidedly unsecured by the mtg or dot – because there ISN’T a claim for a voluntary payment against a note maker. The ONLY way a payment could create an obligation (“loan”) on the part of the borrower for repayment is if there is a contract by and between the third party and the borrower for subrogation* (at least to the extent of the third party’s payment), and speaking of decidedly, such a contract decidedly doesn’t exist. If a fourth party voluntarily makes a payment for the benefit of a third party or even for the creditor / lender (as to the latter, the fourth party is then a third party), there is no right created as to the note maker / borrower, not even in equity, let alone as a matter of law. Or kindly support that statement. You might as well be saying that Uncle Joe has a cause of action, that there’s a presumption his payment made on my account is not a gift. If I never agreed to repay Uncle Joe, it sure as heck is a gift and I’m pretty certain THAT’s the presumption, the starting place, and he will bear the burden of proving otherwise. Even though he’s my uncle and another third party isn’t, I see no distinction when it comes to “volunteerism”.

    *in which case it would be under the note. Could there be an agreement between me and a third party for repayment other than by subrogation? I suppose, but there isn’t. My major issue is the presumption you allege. I think that’s just dead wrong. I think you should put this to rest by supporting your stmt re: the presumption, and if you do, I’ll eat the appropriate pie.

  52. I want to take this statement of Neils :

    “There would be no flaw if the investment banks had not committed fraud ” and point out some pertinent points of fact in ADDITION to, well known facts,
    and as i raised in my case the appraisal giving the illusion of real market value ( not price) the appraisers role being the only outsider AND without their co operation there would have been no bubble and no robust hedging ( its well known a certain big bank hedged against their own clients, talk about conflict of interest – i digress ) anyhoo the intermediaries as you can guess did not particularly care if the appraisal was inflated because obviously the higher the better for those , (and i like this word of Neil’s ” ) interlopers” the dollar amount given to property value – on which all secondary market participants relied upon, ( the ” value” to the broker dealer meaning something completely different to what it meant to a borrower who thought it wAs a fair deal reflecting real and true market value of their home, and only THE biggest investment of their life. Now , even though the underwriters were insiders and may not give a rats ass whether a) the home was in fact worth risking the loan ( emphasis added), b) the borrowers ability to pay and continue to pay after rate ajustment, or even refinance out of the high payments because of the timely bubble bust, well here we are. The subject property was not even worth the loan amount ( as is evidenced by median home price way outstripped median income, i digress again but my point is the question cant be answered without considering the fact that no one in their right mind would sign for a loan whereby the collateral was worth less than the loan. This is why there was a bubble for the hedging and the insurance fraud. And of course it runs deeper. Its where you place the blame for damages and at what point you discovered evidence and when you became privy to the ” shinanigans” much too tame a word. Im not sure what defences appraisers have but as far as the standards for practice of their profession (USPAI) its pretty clear and even fannie mae revised their guidelines to emphasise the public duty and appraiser will be held to account for.
    And yes boy does each state need to get the class actions going and im not just referring to the inflated market value im talking about clouded title too,THE time IS now.
    Getting all this out in the open is the issue, we can hardly get past due process hence the need for massive class action suits IMHO, who will do it ?? Any takers?? We have some challenges, requests under FOIA are being blocked. Reporters are even talking about it .
    ” nothing happens in a vacuum” Agree on that!
    I hope that attorneys do rise to this historical occasion its an exciting time for them potentially to make a difference a real difference to do great work for their community its never too late to turn the ship around ( strong communities, strong Nations)
    I know we go around and around on here but lets not develop a defeAtist attitude stay on this one for our childrens sake. Phew, thats all i have to say about that. Enjoy your day.

    Not an attorney not legsl advice.

  53. *Would your law firm join a group of atty in SC on a huge law suite? * *\we need help, Robert N Farinacci from Ohio is the lead atty this* *case, with the class action, would be huge, some where around 587* *million dollars involved 4 or 5 Judges will be charged ,this is and* *ongoing corruption case. we could have and conference call, NO* *atty in SC can get involved and remain in practice. we need a 60* *B motion filled it’s headed to Federal Court in Washington DC* *my phone 864-787-2880 e=mail shrylbeemer@gmail.com Shirley* *Beemer Sincerely Shirley*

  54. Neil- I believe in this theory have for years. I would love it if you could please explain how to write FOIA requests for TARP, the FED, and FDIC, and the treasury to get records and accounts of monies paid by 3rd parties to the sevicers and banks. One bank, that claims they own the loan, received billions in TARP…the curtain needs to be lifted on what was done with those funds. Also the “FED” comes and inspects/audits the banks books/loans yearly…which department is the “FED”…the “FED” should have records of the bank audits of the loans and be able to shed some light.

  55. […] which the investment banks have received on our homes should have been credited to our balances. Is Donald Duck Your Lender? | Livinglies's Weblog Reply With […]

  56. LOL Deb! Exactly! The ACME Safe was looted!

  57. We’re starting to employ “litigation communication” and “court of public opinion” in winning this war. I’d suggest “In the Court of Public Opinion”, James Haggerty, Esq. (2nd ed. 2009) and “Stop the Presses” by Richard Levick Esq. and Larry Smith (2nd ed. 2007). Both are on my desk, I refer to them often and we are employing as much the strategy and as many of the tools as possible on a daily basis.

    Note that common theme of both books is that corporate attorneys and corporations in general have no real appreciation of this aspect of winning case. They are also vulnerable in the era of instantaneous communications.

    We’ve settled cases, some confidentially and those settlements are private. But using this tool to bring adversary to their knees with goal of getting what you want and avoiding protracted litigation is incredibly effective.

    I was first told by Robert Steele, former clandestine CIA agent who agreed to help us over a year ago with intelligence gathering on crooked “judges” ,crooked attorneys and crooked bankers that after fighting good fight with sleeves rolled up for several years he said it’s critical to split your time in half with only 50% in day to day litigating and the other 50% winning the court of public opinion to influence litigation.

    After returning from the Liberty Forum in NH a few weeks ago where former NSA whistleblower (pre-Snowden) Thomas Drake, and former DOJ ethics counsel (and whistleblower) Jesselyn Radack were keynote speakers, I got to talk to Drake about how he beat a 9 count felony indictment with full force of White House after him. He said “court of public opinion” was critical in being a free man today. If you watch public opinion over last 6 months on Snowden you can see similar strategy employed. Radack works as human rights atty and has some involvement in that strategy.

    Over the w-end I heard four other speakers talk about the importance of the “court of public opinion”. I’m a little thick sometimes but I finally got the point and hopefully Drake will be able to consult on their strategy as well. I asked if he would help consult with goal of winning more fraudclosure and related cases. That should lead to more whistleblowers having the courage to come forward. Rising tide raises all ships.

    I got last minute spot to speak at forum to smaller group on topic I proposed “Your Property- You’ve Got It, They Want It”. Being targeted myself for exposing rampant judicial corruption after exposing the banking swindle, I have an incredible amount of respect for what Drake and Radack went through.

    The D.C. Bar just a few months ago finally dropped their 10 year attempt to disbar Radack for blowing the whistle while at the DOJ.

    this is how these criminals operate and we can do a lot of good first learning and employing the tools to win the court of public opinion.

    We all know we are on the right side of this argument so we don’t need to be bashful about using these tools to our advantage.
    hang tough
    todd wetzelberger

  58. While trying to solicit my husband into a loan modification, they were soliciting me for a refi in a much much larger amount. I would call each time and ask them where they were getting their information and I got the same answer every time …. in the public records.

    Imagine That!

  59. And the monthly payments went to
    Wile E coyote and of course his accomplice road runner
    I think that’s a fair comparison

  60. Mickey Mouse .. Donald Duck ..

    Then why in tarnations were they He’ll Bent on getting me to admit I was a borrower?

    … Cat in the Hat …. I do not like green eggs and ham!

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