The Truth is Coming Out: More Questions About Loan Origination, Debt, Note, Mortgage and Foreclosure

For further assistance please call 954-495-9867 or 520-405-1688

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Carol Molloy, Esq., one of our preferred attorneys is now taking on new cases for litigation support only. This means that if you have an attorney in the jurisdiction in which your property is located, then Carol can serve in a support role framing pleadings, motions and discovery and coaching the lawyer on what to do and say in court. Carol Molloy is licensed in Tennessee and Massachusetts where she has cases in both jurisdictions in which she is the lead attorney. As part of our team she gets support from myself and others. call our numbers above to get in touch with her.

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Hat tip to our lead investigator Ken McLeod (Chandler, Az) who brought this case to my attention. It is from 2013.

see New York Department of Housing vs Deutsch

Mysteriously seemingly knowledgeable legislators passed statutes permitting government agencies to finance mortgage loans in amounts for more than the property is worth, to people who could not afford to pay, without the need to document things such as income, and then to allow the chopping up the [*7]loans into little pieces to sell to new investors, so that if a borrower defaulted in repayment of the loan, the lender would not have the ability to prove it actually owned the debt, let alone plead its name correctly. The spell cast was so widespread that courts find almost everyone involved in mortgage foreclosure litigation raising the “Sgt. Schultz Defense” of “I know nothing.”

Rather than assert its rights and perhaps obligations under the terms of the mortgage to maintain the property and its investment, respondent has asserted the Herman Melville “Bartleby the Scrivener Defense” of “I prefer not to” and relying on the word “may” in the document, has elected to do nothing in this regard. Because this loan appears to have been sold to investors, it may be asked, does not the respondent have a legal obligation to those investors to take whatever steps are necessary to preserve the property such as collecting the rents and maintain the property as permitted in the mortgage documents?

It should be noted that in its cross-motion in this action Deutsche asserts that its correct name is “Deutsche Bank National Trust Company, as Trustee for Saxon Asset Securities Trust 2007-3, Mortgage Loan Asset Backed Certificates, Series 2007-3” and not the name petitioner placed in the caption. Which deserves the response “you’ve got to be kidding.” Deutsche is not mentioned in the chain of title; it is listed in these HP proceedings with the same name as on the caption of the foreclosure action in which it is the plaintiff and which its counsel drafted; and its name is not in the body of foreclosure action pleadings. In the foreclosure proceeding Deutsche pleads that it “was and still is duly organized and existing under the laws of the UNITED STATES OF AMERICA.” However, there is no reference to or pleading of the particular law of the USA under which it exists leaving the court to speculate whether it is some federal banking statute, or one that allows Volkswagens, BMW’s and Mercedes-Benz’s to be imported to the US or one that permitted German scientists to come to the US and develop our space program after World War II.

As more and more cases are revealed or published, the truth is emerging beyond a reasonable doubt about the origination of the loans, the actual debt (identifying creditor and debtor), the note, the mortgage and the inevitable attempt at foreclosure and forced sale (forfeiture) of property to entities who have nothing to do with any actual transaction involving the borrower. The New York court quoted above describes in colorful language the false nature of the entire scheme from beginning to end.

see bankers-who-commit-fraud-like-murderers-are-supposed-to-go-to-jail

see http://www.salon.com/2014/12/02/big_banks_broke_america_why_nows_the_time_to_break_our_national_addiction/

The TRUTH of the matter, as we now know it includes but is not limited to the following:

  1. DONALD DUCK LOANS: NONEXISTENT Pretender Lenders: Hundreds of thousands of loan closings involved the false disclosure of a lender that did not legally or physically exist. The money from the loan obviously came from somewhere else and the use of the non-existent entity name was a scam to deflect attention from the real nature of the transaction. These are by definition “table-funded” loans and when used in a pattern of conduct constitutes not only violation of TILA but is dubbed “predatory per se” under Reg Z. Since the mortgage and note and settlement documents all referred to a nonexistent entity, you might just as well have signed the note payable to Donald Duck, who at least is better known than American Broker’s Conduit. Such mortgages are void because the party in whose favor they are drafted and signed does not exist. Such a mortgage should never be recorded and is subject to a quiet title action. The debt still arises by operation of law between the debtor (borrower) and the the creditor (unidentified lender) but it is not secured and the note is NOT presumptive evidence of the debt. THINK I’M WRONG? “SHOW ME A CASE!” WELL HERE IS ONE FOR STARTERS: 18th Judicial Circuit BOA v Nash VOID mortgage Void Note Reverse Judgement for Payments made to non-existent entity
  2. DEAD ENTITY LOANS: Existing Entity Sham Pretender Lender: Here the lender was alive or might still be alive but it is and probably always was broke, incapable of loaning money to anyone. Hundreds of thousands of loan closings involved the false disclosure of a lender that did not legally or physically make a loan to the borrower (debtor). The money from the loan obviously came from somewhere else and the use of the sham entity name was a scam to deflect attention from the real nature of the transaction. These are by definition “table-funded” loans and when used in a pattern of conduct constitutes not only violation of TILA but is dubbed “predatory per se” under Reg Z. Since the mortgage and note and settlement documents all referred to an entity that did not actually loan money to the borrower, (like The Money Source) such mortgages are void because the party in whose favor they are drafted and signed did not fulfill a black letter element of an enforceable contract — consideration. Such a mortgage should never be recorded and is subject to a quiet title action. The debt still arises by operation of law between the debtor (borrower) and the the creditor (unidentified lender) but it is not secured and the note is NOT presumptive evidence of the debt.
  3. BRAND NAME LOANS FROM BIG BANKS OR BIG ORIGINATORS: Here the loans were disguised as loans from the entity that could have loaned the money to the borrower — but didn’t. Millions of loan closings involved the false disclosure of a lender that did not legally or physically make a loan to the borrower (debtor). The money from the loan came from somewhere else and the use of the brand name entity (like Wells Fargo or Quicken Loans) name was a scam to deflect attention from the real nature of the transaction. These are by definition “table-funded” loans and when used in a pattern of conduct constitutes not only violation of TILA but is dubbed “predatory per se” under Reg Z. Since the mortgage and note and settlement documents all referred to an entity that did not actually loan money to the borrower, such mortgages are void because the party in whose favor they are drafted and signed did not fulfill a black letter element of an enforceable contract — consideration. Such a mortgage should never be recorded and is subject to a quiet title action. The debt still arises by operation of law between the debtor (borrower) and the the creditor (unidentified lender) but it is not secured and the note is NOT presumptive evidence of the debt.
  4. TRANSFER WITHOUT SALE: You can’t sell what you don’t own. And you can’t own the loan without paying for its origination or acquisition. Millions of foreclosures are predicated upon acquisition of the loan through a nonexistent purchase — but facially valid paperwork leads to the assumption or even presumption that the sale of the loan took place — i.e., delivery of the loan documents in exchange for payment received. These loans can be traced down to one of the three types of loans described above by asking the question “Why was there no payment.” In turn this inquiry can start from the question “Why is the Trust not named as a holder in due course?” The answer is that an HDC must acquire the loan for value and receive delivery. What the banks are doing is showing evidence of delivery and an “assignment” or “power of attorney” that has no basis in real life — the endorsement of the note or assignment of the mortgage was fabricated, robo-signed and is subject to perjury in court testimony. Using the Pooling and Servicing Agreement only shows that more fabricated paperwork was used to fool the court into thinking that there is a pool of loans which in most cases does not exist — a t least not in the REMIC Trust.
  5. VIOLATION OF THE TRUST DOCUMENT: Most trusts are governed by New York law. Some of them are governed by Delaware law and some invoke both jurisdictions (see Christiana Bank). The laws that MUST be applied to the REMIC Trusts declare that any action taken without express authority from the Trust instrument is VOID. The investors still have not been told that their money never went into the trust, but that is what happened. They have also not been told that the Trust issued mortgage bonds but never received the proceeds of sale of those bonds. And they have not been told that the Trust, being unfunded, never acquired the loans. And that is why there is no assertion of holder in due course status. Some courts have held that the PSA is irrelevant — but they are failing to realize that such a ruling by definition eliminates the foreclosure as a viable action; that is true because the only basis of authority to pursue foreclosure, collection or any other enforcement of the sham loan documents is in the PSA which is the Trust document.
  6. THIRD PARTY PAYMENTS WITHOUT ACCOUNTING: “Servicer” advances that are actually made by the servicer but pulled from an account controlled by the broker dealer who sold the mortgage bonds. These payments continue regardless of whether the borrower is paying or not. Banks fight this issue because it would require that the actual creditors be identified and given notice of proceedings that are being pursued contrary to the interests of the investors. Those payments negate any default between the debtor and the actual creditor who has been paid. They also reduce the amount due. The same holds true for proceeds of insurance, guarantees, loss sharing with the FDIC and proceeds of hedge products like credit default swaps. Legally it is clear that these payments satisfies the payments due from the borrower but gives rise to an unsecured volunteer payment recapture through a claim for unjust enrichment. That could lead to a money judgment, the filing of the judgment and the foreclosure of the judgment lien. But the banks don’t want to do that because they would definitely be required to show the money trail — something they are avoiding at all costs because it would unravel the entire fraudulent scheme of “securitization fail.” (Adam Levitin’s term).
  7. ESTOPPEL: Inducing people to go into default so that there can be more foreclosures: Millions of people called the servicer asking for a modification or workout that the servicer obviously had no right to entertain. The servicer customer representative gave the impression that the borrower was talking to the right person. And this trusted person then started practicing law without a license by advising that modifications could not be requested until the borrower was at least 90 days in arrears. All of this was a lie. HAMP and other programs do NOT require 90 day arrearage. The purpose was to get homeowners in so deep that they could never get out because the servicers are charged with the job of getting as many loans into foreclosure as possible. By telling the borrower to stop paying they were (a) telling them the right thing because the servicer actually had no right to collect the payment anyway and (b) they put the servicer in an estoppel position — you can’t tell a borrower to stop paying and then say THEY breached the “agreement”. Stopping payment was a the request or demand of the servicer. Further complicating the process was the intentional loss of submissions by borrowers; the purpose of these “losses” (like “lost notes” was to elongate the process and get the borrower deeper and deeper into the false arrearage claimed by the servicer.

The conclusion is obvious — complete strangers to the actual transaction (between the actual debtor and actual creditor) are using the names of other complete strangers to the transaction and faking documents regularly to close out serious liabilities totaling trillions of dollars for “faulty”, fraudulent loans, transfers and foreclosures. As pointed out in many previous articles here, this is often accomplished through an Assignment and Assumption Agreement in which the program requires violating the Truth in Lending Act (TILA) and the Real Estate Settlement and Procedures Act (RESPA), the HAMP modification program etc. Logically it is easy to see why they allowed “foreclosures” to languish for 5-8 years — they are running the statute of limitations on TILA violations, rescission etc. But the common law right of rescission still exists as does a cause of action for nullification of the note and mortgage.

The essential truth in the bottom line is this: the paperwork generated at the loan closing is “faulty” and most often fabricated and the borrower is induced to execute documents that create a second liability to an entity who did nothing in exchange for the note and mortgage except get paid as a pretender lender — all in violation of disclosure requirements on Federal and state levels. This is and was a fraudulent scheme. Hence the “Clean hands” element of equitable relief in foreclosure as well as basic contract law prevent the right to enforce the mortgage, the note or the debt against the debtor/borrower by strangers to the transaction with the borrower.

33 Responses

  1. Who owns the Void note and mortgage? If the note holder is not identified by “document does not exist” in discovery, then how do the documents come to exist in an “evidentiary hearing”? If the note is stamped “Pay to the Order of Without Recourse” and stamped “Void”,
    I would reckon to say that the mortgage is “Void” if the Note is “Void”.
    It seems logical that “Void” on a Note means Note and Mortgage are invalid.

  2. Speaking of appraisal fraud I found a very interesting article about it wherein the WSJ does not really think there is any appraisal fraud
    http://www.opednews.com/articles/2/The-Wall-Street-Journal-St-by-William-K-Black–Banks_Control-Fraud_Crisis_Economic-Crisis-141202-795.html

  3. 3, 4, 5, 6 & 7 here …

  4. And this is for the naive ones who still believe in government, public agencies and whoever else whose salary, health insurance, vacation and retirement they pay federal taxes to cover.

    Not one of those agencies works for you. Not one “public servant” works for you.

    http://www.courthousenews.com/2014/12/03/files-on-wamu-appraisal-scheme-kept-sealed.htm

  5. KC,

    Typically and generally speaking, there really are only 2 contracts: the purchase of the house (with the seller) and the financing of the purchase (with the financial entity. Of course, when people pay cash, that part doesn’t apply.) Both take place at the same time (closing). Later on, there may be a refinancing but it never involves the seller or the original purchase agreement from same. Where people get lost is that they confuse the sale part with the financing part and, when pleading their case, they do not differentiate what is what. They hang themselves for lack of clarity on the issues.

    Anything happening after the original closing should have given rise to the creation of a new contract. MERS took care of that and, right now, it is next to impossible to differentiate it from the original contract… except for shoddy paperwork, which is getting traction.

    From closing on, every possibility exists. Refi, Heloc, reverse mortgage, one party signing, anything. Those subsequent contracts should have overridden the previous one but they didn’t automatically. Some provisions were meant (through MERS) to carry over while others ended. Hence the need for people to be very clear and to draft a timeline listing all the players one by one, with dates, name of documents, and absolutely everything relevant to their being in the house, having paid and how much.

    Ideally, people should sue first. Nowadays, they know enough to be in that position. It wasn’t true 4 years ago: people were on the defensive, paddling upstream. It should no longer be the case. We know enough today to scrutinize our statements, NODs and whatever else.

    I know your case is particular. Hence the need for people to recognize what’s “routine” and what’s not and hire attorneys when necessary. I was just giving a standard run down of what is, isn’t, works and doesn’t.

  6. Christine, there were three contracts, the purchase contract with the sellers estate that I was a party to. The Note contract that I was not a party to. The mortgage contract witch I was a party to along with the WD warranting the title. Upon my desire/demand to a payoff of the note, (I don’t do business with people like them), I found myself having to fix title issues with the sellers estate/the purchase contract. Then there are the discrepencies between the note and the mortgage contracts. Also there is the mortgage they presented as evidence that I didn’t sign. (easily proven). I thought I signed a mortgage granting a lien but I didn’t, it was something else. Do you know what cooked me the most? They didn’t name me on the Trustee Deed with the MIA Trustee Agreement so at the recorders office my husband is listed as sole owner and I warranted the title!!!!!!!!!!!!!!! at closing when them turkeys created a taxable event upon me also.

  7. Jerry,

    As long as it has not been rescinded by the parties thereto, or declared void by a court of law, a contract is enforceable. It is incumbent to you to successfully plead voidability in court but same requires that you meet some very specific conditions outlined below. Short of that, the contract is not voidable and, therefore, valid and enforceable.

    In my experience and based on 7 years of case law, violation of Tila and/or Respa never result in rescission: they are not considered breaches sufficient to squash the entirety of the lending/purchase contracts, so long at all essential conditions are present (offer and acceptance, consideration, competent parties and legal purpose). At best, people can obtain statutory damages, possibly attorney’s fees but courts will still consider the mortgage/loan a valid contract.

    Allegations of tila and respa violations have not fared very well nationwide as a defense to FC. People don’t understand that homeowners in foreclosure are parties to 2 contracts: the loan contract and the house purchase contract. And since the house was put as collateral immediately upon signing the loan contract, judges hands are tied. Standing is still the best defense and even then, it hardly ever flies.

    Consider the source of the advice you follow. If you’re going to attack the contract, there are specific steps you need to take. If you’re in FL, why don’t you contact Mark Stopa?

  8. Jerry, yest you are correct, but the real problem is that the courts do not recognize your documents or your causes of action and do not allow appropriate discovery. It is still going on as we write.

  9. Question if a contract at formation contains violations of Federal and State law is the contract enforceable? If the actor holding out it’s self as a lender but does not really fund the loan and an undisclosed third party actually funds the loan is that not a T.I.L.A. AND R.E.S.P.A. VIOLATION and for Fla. State statues U.D.A.T. the Unfair and Deceptive trade Practices Act.

  10. E.Tolle Shadowcat was thrown off this site some time ago for posting krap over and over. There is some indication that Shadowcat, Ivent and Mycookiejars may be the same person. Do not spend any of your valuable time messing with her.

  11. As a party who plans to use our hard earned retirement savings in just a few short years my investor personality flips the birdie at you. The taxpayer in me. Tells you to sit on it and spin. And finally my homeowner side. Prays for you and pitties you. XXX. XXX

  12. Shadowcat, I’d love to see you in a MN, AZ, NC, or a multitude of other courts across this land. What you see now as ironclad in your defense or offense, as long as you pay your beloved attorney, will prove to be teflon if and when you get into a court ruled over by a pensioner set on retiring in style. You have no clue. You still wave the red white and blue and stand at attention with you arm over your heart. Idiot.

  13. E- Tollee, have I reminded you lately why you lost? Of course Not, I wouldnt do that. Behave!

  14. MERS isn’t legal, anymore than your being allowed to post your every rave thought should be. Buffoon.

  15. Shadowcat, have I told you recently that you’re an idiot?

    Let me count the ways….

  16. Stop whining about it and Get Another Attorney!
    MERS is Legal! If done correctly!

  17. Appraisal fraud is still going on and so is forgery and fraudulent documents filed at the county level. I tried to get and pay for an analysis of my title or title opinion. The lawyer told me he was not risking his insurance to do so. They also still totally recognize MERS, and MERS was not disclosed to anyone who wanted to purchase a house. Yes, the scam continues and hundreds of thousands of people are in on it and make money from it.

  18. Court: “Whichever way one comes at it,
    the McLeods’ Motion to Dismiss must be granted.”
    Deutsche Bank Fails Again
    A prior state court judgment bars the relief Deutsche Bank seeks, so the Bank cannot state a claim upon which relief can be granted. Deutsche Bank refused, in five years of further proceedings following entry of that judgment, to ask the state court to fix the supposed error, and it refuses even now to make that request in post-judgment proceedings. This dismissal will leave Deutsche Bank free to seek correction in the state court, if it can justify its five-year delay, or to reacquire the note and deed of trust from the current holder. Congratulations to attorney Beth Findsen.

    http://www.msfraud.org/law/lounge/deutsche-v-mcleod_dismissed_12-14.pdf

  19. Gordon said that with “limited legal assistance,” he researched his rights under the “claim of right” statute and re-took physical possession of his property because “there is no valid document that Wells Fargo lawyers can present to challenge my claim.”
    Bronx Man Seizes Home from Bank
    A Bronx man says he has used New York’s “adverse possession” law to reclaim his home in, six months after Wells Fargo foreclosed on the property and evicted him. “That is to say, there was no assignment of mortgage in the case file and one was not filed in the City Register until six months after a judgment of foreclosure was signed by the judge,” Gordon explained. “The foreclosure was filed and executed with no assignment in the exhibits.” After a ten-year battle, Gordon said he got his deed restored from the Referee’s Deed to a Corrected Index Deed and a Nullification of the Assignment of Mortgage, by invoking NY PL175.35 offering a false instrument for filing.

    http://www.streethypenewspaper.com/bronx-man-seizes-home-from-bank/

  20. Nice work,I like that your not messing around and just calling these crooks for what they are,but where does it get one at the end of the day when most judges are still dismissing in favor of the lender and most states with bigger populations like Ca,texas,florida,New York those judges pension fund holdings are packed with MBS holdings of all flavors and were not picked up until 2010,2011,2012,and posting 10-18% returns in those years that most every one else has been seriously hurting so what the heck can be done shy of a revolution?Here would be a perfect time for those fake regulatory bodies that are in reality regulating you and I and only have the banks best interest at heart to step up and at least look into the issues in this post and make good to the people that have had to stand and deal with these fools and their silly games [thanx to sites such as this]any person who looks for the knowledge and what is the real cause of why they wont work with you or why they keep asking you to resend the documents and why they so called loan was signed one day yet notarized 7 days later when you werent in town,and like mine where Wells Fargo has on the HUD-1 that they paid my 2nd with proceeds from the closing but I had paid it off 2 months before my broker started soliciting this garbage to me and have the cancelled checks and statements showing a zero balance.Like the escrow would not know and title wouldnt know what is owed?I would like to ask what does one do now,who do you go to when it looks like when they want and its best for them they will tell you that there are no definitive rules or laws for mortgages and even if there were its way past the statute of limitations.Again in my case they could not show that they paid that because now its a law that after a certain number of years they destroy their records and I still had my cancelled checks and statements and she could care less.

  21. For some reason, the Courts just don’t care. They claim that they are not going to give the borrower a free house, so they give the free house to the bank that had nothing tied up in the property. The bank just gets richer while the borrower goes to live on the streets with their kids. I read one time that Goldman Sachs said that only the rich should own houses. I guess that the courts agree

  22. This is just what took place with my second mortgage. For over two years I was trying to get the terms changed to a longer period so that I could have lower payments but the servicer said owner would not give them the authority to make any changes at all to my loan. I finally gave up, stop making any payments and was planning to file bankruptcy. Then after the default the servicers is now saying they are the new owners, have a assignment showing where the old owner assigned it over to them and are now more than willing to make any changes to the terms of the mortgages to help me with lower payments. Now I know I don’t have a PHD, but I am far for being a dumb ass either. Why would a owner of a loan refuse to make any changes to the terms of that loan, when doing so would insure they would receive payment of the full amount loaned out? Sure it might be a longer term, but in the end they would receive all that was due them plus the interest, but no they come out better by selling it to the servicers for nothing??? Somehow it just don’t add up. That is what I told the servicers, that I believed they were screwing me and the real owner of the loan both, that I was not going to pay them one dime, and then I darn them to take me to court. Who walks away from $88K when some redneck is darning them to try and collect? This Jan will be two years and they have not taken any legal action to collect. It tells me that they know, that I know, it’s all a fraud and they don’t want a case like my going to court. I do feel bad that someone, somewhere is out $88K, but how do I find the real owner? The holder in due course of my loan? The name that is on the note has been out of business for a few years now.

  23. re:

    VIOLATION OF THE TRUST DOCUMENT: Most trusts are governed by New York law. Some of them are governed by Delaware law and some invoke both jurisdictions (see Christiana Bank). The laws that MUST be applied to the REMIC Trusts declare that any action taken without express authority from the Trust instrument is VOID.

  24. Just ask them .. Call CHRISTINA TRUST @ 302-888-7448

  25. You can’t sell what you don’t own.

  26. See Christina Bank, Christina Trust .

    Wilimington Savings Fund Society, FSB doing business as CHRISTINA TRUST, not in its individual capacity but soley as Trustee for BCAT2014TT 500 Delaware Avenue 11th floor Wilmington DE, 19801.

    – Scratch!

  27. And separation of power (legislative, judicial and executive) has always looked pretty good on paper but has hardly ever stopped any conflict of interest, such as attorneys (officers of the court) seating in Congress… and lobbyists being appointed to public servants’ positions.

    http://patriotsforamerica.ning.com/forum/topic/show?id=2734278:Topic:765668&xgs=1&xg_source=msg_share_topic

    Until there is a serious overhaul, nothing will change. And since people keep feeding into the problem by paying the salaries, health insurance, vacations and retirement of those attorneys and lobbyists, there really isn’t any urgency to fix the problem…

  28. Which, incidentally, shouldn’t come as a surprise, considering that the fed and JP Morgan are one and the same…

    http://www.zerohedge.com/news/2014-12-03/occupy-fed

  29. The Truth, The Whole Truth and Nothing But the Truth.

  30. With all that truth coming out for… 6 or 7 years, we should be out of the woods. And yet, appraisal fraud on houses keeps on going and going and going…

    http://www.zerohedge.com/news/2014-12-03/housing-fraud-back-%E2%80%93-real-estate-industry-intentionally-inflating-home-appraisals

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