The Deliberate Destruction of Evidence

By William Hudson

To Listen:  https://youtu.be/jOeAe9zT5D0

Attorney Neil Garfield and James “Randy” Ackley got into a discussion on the Neil Garfield Show about why the courts were allowing loan servicers to present evidence that was hearsay, often fraudulent and did not comply with the rules of evidence. Ackley stated that, “The court is allowing evidence to be introduced that would not be admitted in any other type of case.”

The discussion brought up the fact that courts are making erroneous presumptions in favor of the banks despite the fact that there is now a public record of banks fabricating evidence, robosigning documents, false notarizations and bank employees testifying under oath about facts they know nothing about. The argument dovetails back to the locus of destroying (or losing) a promissory Note- the central issue in almost every foreclosure to date.

 
Why would a lender deliberately lose a promissory note when the note has cash value? Why deliberately destroy or lose a promissory note? Last summer, after 13 years of Litigation- a client of Neil Garfield’s said their servicer wrote a letter saying, “oops we can’t seem to find your promissory note.” They did this about the same time the client discovered that they had fabricated the Note and the employee who they claimed signed the Note hadn’t endorsed Notes for 13 years.  The “lost” Note appears to be the strategy du jour for 2016 (better to “lose” a Note than go to prison).

 
And yet, it is now clear that promissory notes underlying mortgage backed securities were deliberately lost or destroyed on a systematic basis, in what can only be deemed as outright fraud at this point.  The Florida Bankers Association already admitted to the Florida Supreme Court that banks destroyed notes after e-recording the notes to “avoid confusion” and that this was a standard business practice. Professor Katherine Porter wrote way back in a 2008 Texas Law Review article that examined the loan documentation from 1700 bankruptcy cases and discovered 41.1 % of the files audited lacked a promissory note to support the proof of claim.

 
Nothing has changed, other than the banks now have the ability to hire firms that will forge the documents for them (although they typically do a poor job with their sloppy photoshop attempts). It is now FACT that the Notes were almost NEVER delivered to the MBS trusts but the courts continue to pretend that the prima facie evidence before them is legitimate. This isn’t shoddy paperwork- it is flat out criminal conduct. The banks are daily getting away with what would result in you or I going to jail for at least three years or more.

 
Destroying or losing a Note is insane. Promissory notes are negotiable instruments (like checks) and by law only the original (and not any copy) is enforceable against the borrower. Under the UCC (uniform commercial code), section 3-309, a lost note may not be detrimental to recovery by the owner of the note. But the requirements of proof under this section are stringent; the section requires that possession and ownership of the promissory note occur while vested in the plaintiff at the time of loss.

 
Most MBS notes disappeared before being transferred to the trust that allegedly holds the note, which would defeat recovery under U.C.C 3-309. In order to enforce a lost note under the UCC, the court must be stringent to ensure that “the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument.”

 

Yet, on a daily basis homes are foreclosed on with absolutely NO compliance with the Uniform Commercial Code requirements. Furthermore no indemnity bond is posted by the bank to protect the homeowner from another party who actually can prove they own the Note, leaving the homeowner exposed to double-jeopardy.

 

There is a gross DOUBLE STANDARD that applies to foreclosure cases in America. However, look on the bright side- if the courts are this corrupt it is better to fight a foreclosure than a murder charge. If the courts operated the criminal courts the way they do the trial courts, the incarceration rates would quadruple. Can you imagine the same rules of evidence applied to a murder charge that are applied in foreclosure defense? “Your honor, it appears to be blood but it could be ketchup.” Judge, “The prima facie evidence is sufficient. Let’s make sure we can fit him in on the lethal injection schedule for next year.”

 

The fact that the banks do not possess the Notes is not a technicality. Instead, the lost Note issue is a scheme designed to protect the commercial banks with no concern for protecting the borrower from fraudulent claims. The ultimate protection for the borrower is an original canceled note- but even if you pay off your home in full- you will never receive the cancelled Note. Everything has been flipped on its head- Notes are fabricated on a computer, presented as real, and if the paperwork “looks” legitimate- foreclosure can proceed. The consumer has more protection when they register an old vehicle for $500.00 than they do when they purchase a $500,000 home (and the DMV records are much more accurate).

 
The courts have an obligation to homeowners to demand proof that the bank has standing. The banks have gotten away with so much fraud that they are now brazen in their arrogance. On a routine basis banks show up with documentation that is deficient or even fraudulent and the judges are still ruling in favor of the banks. No Note? No problem! No Indorsement? Oh well- go create one and bring it to the next hearing! The courts and banks are concerned that foreclosures will slow and costs will increase but have no concern that the rule of law has imploded and fraud is now considered a standard business practice.

 

The ONLY solution to the current foreclosure crisis is for EVIDENCE to be introduced like it is in ANY other civil or criminal case.  In light of the fact that banks have now admitted they have participated in fraudulent activities- the servicers must turn over their business records to ensure they mesh with both the paper trail and the alleged money trail.  There is simply no other option for homeowners now that banks lie with impunity, law enforcement takes no action, and the courts look the other way.

21 Responses

  1. We got our copy of the Note without our signatures. How do we prove to the police that they sent a forged copy of the Note? The servicer could lie that we have erased the signatures. How do we prove that they forgot to insert our signatures in their Photoshopped or fabricated copy of the Note? Any brilliant suggestions?

  2. @marina…..thank you….I have spent today reading up on RICO….oh my…..Sheri

  3. The banks are not only allowed “hearsay”, but are IN FACT allowed to present FORGED mortgage notes as their evidence. Last time I checked, forgery was a felony and is punishable by a prison term. But instead, the banks and their substitute trustee lawyers are handing the courts fabricated evidence and getting away with it. How pathetic…how disturbing…how disgusting…how sickening.

  4. Sheri,
    You could do a civil rights action but that is only injunctive relief, whereas, monetary damages can be gotten via RICO.

    A judge, or anybody for that matter, is not protected (immunity) in a R.I.C.O. action.

    Study RICO Statutes & Process (Federal) Title18 USC (there is RICO state laws but fed law has more clout.

    Sections
    1951 (relating to interference with commerce, robbery, or extortion),
    1952 (relating to racketeering),
    1962 (conspiracy to racketeer)
    1503 (relating to obstruction of justice pertains to judges and attorneys etc.)
    USC 510 – counterfeit securities e.g. void rulings

    Sue them in their individual capacity. You want to make the impact upon them personal so THEY know they can be gotten,otherwise they will continue to ignore you and the law.

    RICO provides Treble Damages.(1 count = $75,000 … x 3)

    If you are Pro Se Claim yourself under Private Attorney General (PAG you can put forth to collect on your hourly fee/total costs for legal damages.

    Then after you get a favorable judgment execute commercial liens against each and their spouses, recorded with the SOS and local recorder. This will get picked up by title companies and Credit reporting agencies , and will ‘freeze’ their ability to get credit, loans, buy/sell property aka they will have to deal with you directly to get out of situation.

  5. I have been saying this for years.

    stopforeclosurefraud.com/2013/08/31/michael-keane-i-personally-destroyed-thousands-of-mortgage-documents-through-the-same-process-using-a-desk-top-scanner/

    The banks are “Insolvent”. Google: “600 Trillion Dollars”- ten times the combined GDP of every country on the planet. An impossible sum.

    The “Financial Crisis” is a planned, criminal act. Clinton deregulated derivatives and fully dismantled “Glass-Steagall”- now we have “Servicing Banks” masquerading as “Lending Banks”.

    The 600 Trillion are owed to “Naked Short Sale Bets” (derivatives) placed against homes the banks never had an ownership interest in, in the first place.

    The “MERS” is the mechanism through which these “bets” are traced.

    The DTC is the regulatory agency that is supposed to monitor these bets- it doesn’t.

    The REMIC Trusts are all bogus. The PSAs to these “Trusts”, while they exist, are only for show and to keep the bets straight between the criminals involved in the frauds.

    None of the “Trusts” are registered with the SEC. None of the “Trusts” are registered with either Delaware or New York, as the two states wherein such “Trusts”, may register.

    Obama’s salvation of General Motors was used to liquidate whatever mortgages were existing as having been placed in “Bucket Shops”.

    Those “mortgages” then became the “RES” to a hedge fund created by the criminals, once they “Made” a “Market” in “Naked Short Sales”. The foreclosure notices act as “Locators” to that “Market”.

    The notes were destroyed because the criminals needed to move within a closed shop- the MERS.

    The MERS, as an electronic boutique, allowed participants within that closed system to fabricate fraudulent title, even as that closed system allowed multiple “Servicers” to place multiple false claims to titles that are not their own.

    These same false claimants also made multiple
    “Naked Short Sale Bets” on the failure of the “mortgage” to the underlying collateral (the house).

    The reasons no “true” “Holder In Due Course” will ever come forward is because these “Table-Funded” “loans” are the products of “Tertiary Financing (illegal, in-and-of-itself), with funds from terror and drug cartels (Google “HSBC” “Bank of America” and “Wells Fargo” and combine your search with, “terror and drug money”).

    Other reasons include: Tax consequences- placing “loans” that are funded by dark money (third party, criminal, in-and-of-themselves, as “Tertiary Financing”, even as drug and terror money may, or may not be involved), into a “Bucket Trust”, beyond the awareness of the Tax Man, has severe consequences- 100% face value owed as tax.

    Other reasons: Once proven as fraudulent, whether in the inducement or for any number of other reasons – “Tertiary Financing”, as an example- the deal must be returned to the originator who then must pay the value of the original “loan” to the investor- a good example is BOA paying 14 billion to defrauded investors.

    The banks ruined themselves through subprime and then derivatives speculation (600 trillion owed-at least- some say twice that amount).

    Just because they own the US government and the printing machines that create our currency, that doesn’t absolve them of their criminal behaviors.

    The notion that what these criminals have done is just too difficult to understand and “Law Enforcement” isn’t smart enough to internalize this criminal farce, is, in-and-of-itself, beyond criminal and instead, an indictment of the entire system as fraudulent.

  6. @ elexquisitor

    The “Bankruptcy Appellate Panel” (“BAP”) … agrees with you.!!
    California state judges have become “circus contortionists” on the law.!!

    “Even though Siliga, Jenkins and Debrunner may preclude the Riveras from attacking DBNTC’s foreclosure proceedings by arguing that Chase’s assignment of the deed of trust was a nullity in light of the absence of a valid transfer of the underlying debt, we know of no law precluding the Riveras from challenging DBNTC’s assertion of secured status for purposes of the Riveras’ bankruptcy case. Nor did the bankruptcy court cite to any such law.”

    “We acknowledge that our analysis promotes the existence of two different sets of legal standards – one applicable in non-judicial foreclosure proceedings and a markedly different one for use in ascertaining creditors’ rights in bankruptcy cases. But we did not create these divergent standards. The California legislature and the California courts did. We are not the first to point out the divergence of these standards. See CAL. REAL EST., at § 10:41 (noting that the requirements under California law for an effective assignment of a real-estate-secured obligation may differ depending on whether or not the dispute over the assignment arises in a challenge to non-judicial foreclosure proceeding or to a proof of claim proceeding).”

  7. The Stilgar ruling is interesting because it counters the maxim that the deed of trust follows the note; yet it is unnecessary to prove legal possession (by bailment or transfer) to initiate non-judicial foreclosure in California. This rolls back to the Stockwell case of 1906 that found that deed of trust loan assignments don’t have to be recorded because changes of the trustee of the deed of trust is recorded. In other words, the note follows the deed of trust in non-judicial California according to the judiciary. The logic that the note possessor can substitute the trustee, but the trustee can’t assign a new note possessor is totally evaded by the best judges California can buy.

  8. @ Kalifornia

    Clarification of what, exactly … lol?
    I couldn’t identify what you were attempting to clarify.

    Chapter-7 … Liquidation (trustee sells assets to satisfy creditors)
    Chapter-11 … Reorganization (forced cram-down of contracts)
    … the debtor requires approval of her creditors to confirm her Plan.
    … the debtor’s Plan can provide for “no payments” for a year, etc.
    Chapter-13 … Repayment (must qualify to re-pay debts; “Means Test”)
    … the debtor actually has (two payments now) she has to make each month. One payment is based on her “Re-Payment Plan” for her pre-petition-debts-only … and another payment for her regular everyday bills. Failing to timely pay either of these two-separate creditors will get the filer dismissed. (not so in a BK-11)

    “Debtor-In-Possession” is a term of art in bankruptcy that only applies to a chapter-11 filer, because the filer BECOMES THE TRUSTEE (in essence) with similar powers to a chapter-7 trustee … while remaining in possession of the Individual-Corporation. (No Nanny..)

    Chapter-11 bankruptcy IS NOT A PARALLEL to Chapter-13, at all, and there is NO COMPARISON WHATSOEVER when it comes to which “chapter” provides the best results … and that is a Chapter-11 filing.

    Chapter-13 debtors may “strip” a claim that is disallowed … if the chapter-13 trustee agrees, (Nanny..) and can eliminate 2nds & 3rds as unsecured debt if that portion of the [alleged] creditors claim is unsecured. “Re-Payment” [must] begin within the first (30 days) from filing a Bk-13, or the trustee will dismiss the petition.

    Can a homeowner “win” an Adversarial Proceeding (“AP”) in a chapter-13 case? Yes, but it will take years … whereas I can do it with my eyes closed in a chapter-11, without an adversarial proceeding at all, if you know the rules..

    Regards …

  9. We live in Rhode Island. The latest request from our servicer for a certified copy of the Note on our mortgage resulted in sending us one without our signatures! What do we do with this and how do we prove that it was forged by the servicer. PLEASE HELP !

  10. @ Iam Lazarus

    Following up on the prior exchange concerning Ch 11 vs. Ch 13, respectfully, in BOTH chapters, upon a filing of a petition a “debtor in possession” status is established for the purposes of reorganization and repayment. (Bankruptcy Code citation omitted.)

    Generally, Ch 13 is a consumer-based debt reorganization with a repayment plan, whereas Ch 11 is generally a business-based debt reorganization with a repayment plan, but in certain instances an individual may also file a Ch 11.

    As commented, in Ch 13 a BK trustee is automatically appointed as the “collector”, akin to a servicer who is collecting a fee, for compliance with a repayment plan to the purported “creditor(s).”

    As commented, in Ch 11 a BK trustee is not automatically appointed, but in the event that a “debtor in possession” fails to perform according to the confirmed repayment plan, then an interested party/”creditor” can move the BK court for appointment of a BK trustee; in effect, a parallel of a Ch 13 with a BK appointed by the BK court as the “collector”, akin to a servicer who is collecting a fee for compliance with a repayment plan to the purported “creditor(s).” .

    Of course there are many other distinctions between Ch 11 vs. Ch 13.

    Respectfully, this comment is just a clarification, and we can AGREE TO DISAGREE AGREEABLY as to whether a Ch 13 petitioner filing an Adversarial Proceeding can accomplish a same or similar challenge as filing a Ch 11 petition.

    Together in arms, we will move onward.

  11. For the verifying the excerpts of UNPUBLISHED Memorandum by the US Bankruptcy Court for the Ninth Circuit posted by the collegial “Iam Lazarus”:

    http://cdn.ca9.uscourts.gov/datastore/bap/2014/11/24/Rivera%20Memo%2013-1615.pdf.

  12. I know nothing, and if I think I know something, I know no thing.
    I do not give legal advice because I do not know legal things.
    Opinion.
    A long while ago I heard someone state the following.
    I do not live in this state, South Carolina, so I do not know what is true, or fact, or fiction.

    Title 29 Article 1 Section 50
    dual contract mortgages are outlawed in 2005
    if an 80/20 mortgage/loan is signed after 2005,
    and a law firm/lawyer sues on that loan/mortgage; they bring
    fraud upon the court.
    If it’s nonjudicial they bring fraud upon the master of equity
    If the master of equity is made known of this fraud, they may take some action.
    This is even if an attorney brings the 80 or the 20 into court it is fraud upon the court.

    Hoping I re-call what I heard appropriately, but at least if there is an interest, check out the title and look at the date of the mortgage.

    Can someone equitable toll fraud on the court?
    Find out.

    Trespass Unwanted, Creator, Corporeal, Life, Free, People, Independent, State, In Jure Proprio, Jure Divino

  13. hummm maybe go after the judges bond.(since the judge is looking the other way)..they do not like that and neither does the insurance / bond company. Liars and thieves need to be hanged but the bond will do.
    not sure but seems three hits on bond could be very bad for the black robed so called judges. very bad indeed if my memory is correct.

  14. This Bankruptcy Appellate Panel (“BAP”) previously has held that a debtor may object on standing grounds to a proof of claim based on a note secured by a deed of trust and that, unless the creditor establishes that it is a person entitled to enforce the note (or an agent of such a person), the claim objection should be sustained. See Veal v. Am. Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 919-21 (9th Cir. BAP 2011). As stated in In re Veal: When debtors such as the Veals challenge an alleged servicer’s standing to file a proof of claim regarding a note governed by Article 3 of the UCC, that servicer must show it has an agency relationship with a “person entitled to enforce” the note that is the basis of the claim. If it does not, then the servicer has not shown that it has standing to file the proof of claim. * * * As stated before, AHMSI presented no evidence as to who possessed the original Note. It also presented no evidence showing indorsement of the note either in its favor or in favor of Wells Fargo, for whom AHMSI allegedly was servicing the Veal Loan. Without establishing these elements, AHMSI cannot establish that it is a “person entitled to enforce” the Note. The Veals would thus have a valid claim objection under § 502(b)(1). Id. at 920, 21. Here, it is unnecessary for us to decide for purposes of this appeal whether the Riveras’ note is a negotiable instrument within the meaning of Cal. Com’l Code § 3104 and thus subject to California’s Uniform Commercial Code provisions governing negotiable instruments, as specified in Cal. Com’l Code § 3102(a). Even if the Riveras’ note does not qualify as a negotiable instrument covered by the Uniform Commercial Code, for purposes of establishing DBNTC’s standing to file its proof of claim and to overcome the Riveras’ objection to that claim, DBNTC still would need to establish that the payment rights evidenced by the note had been assigned or negotiated to it. As a matter of general California contract law, an entity seeking to enforce contract rights as an alleged assignee of those rights ordinarily must show that the rights actually were assigned to it. See Heritage Pac. Fin., LLC v. Monroy, 215 Cal. App. 4th 972, 988-89 (2013); Fontenot, 198 Cal.App.4th at 270.5 Without such proof, as In re Veal generally teaches, DBNTC’s failure to establish its standing would be fatal to its proof of claim. See In re Veal, 450 B.R. at 919.

    With respect to the Riveras’ challenge to DBNTC’s assertion of secured status, there is a similar dichotomy between the Riveras’ rights for purposes of a nonjudicial foreclosure and their rights for purposes of DBNTC’s assertion of secured status in its proof of claim. California law indicates that, for purposes of a non-judicial foreclosure, a party may foreclose based solely on its status as an assignee of the lender’s rights under the deed of trust without regard to who holds the borrower’s note. See Siliga v. Mortg. Electr. Registration Sys., Inc., 219 Cal.App.4th 75, 84 n.5 (2013); Jenkins v. JP Morgan Chase Bank, N.A., 216 Cal.App.4th 497, 512-13 (2013); Debrunner, 204 Cal.App.4th at 440-42. But outside of the non-judicial foreclosure context, an attempted assignment of a mortgage or trust deed without an assignment of the underlying debt is a nullity. Kelley v. Upshaw, 39 Cal. 2d 179, 192 (1952); Wolfe v. Leisure Time Sports, Inc. (In re Leisure Time Sports, Inc.), 194 B.R. 859, 861 (9th Cir.BAP 1996) (citing Union Supply Co. v. Morris, 220 Cal. 331, 338–39, 30 P.2d 394, 397 (1934)); see also Carpenter v. Longan, 83 U.S. 271, 275 (1872) (“An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”).

    Even though Siliga, Jenkins and Debrunner may preclude the Riveras from attacking DBNTC’s foreclosure proceedings by arguing that Chase’s assignment of the deed of trust was a nullity in light of the absence of a valid transfer of the underlying debt, we know of no law precluding the Riveras from challenging DBNTC’s assertion of secured status for purposes of the Riveras’ bankruptcy case. Nor did the bankruptcy court cite to any such law.

    We acknowledge that our analysis promotes the existence of two different sets of legal standards – one applicable in nonjudicial foreclosure proceedings and a markedly different one for use in ascertaining creditors’ rights in bankruptcy cases. But we did not create these divergent standards. The California legislature and the California courts did. We are not the first to point out the divergence of these standards. See CAL. REAL EST., at § 10:41 (noting that the requirements under California law for an effective assignment of a real-estate-secured obligation may differ depending on whether or not the dispute over the assignment arises in a challenge to non-judicial foreclosure proceeding or to a proof of claim proceeding).

  15. @ Sheri Daniel ,

    Bank of America denying what is in the official record is pretty much SOP for them.. I sent them a rescission notice ,, they claimed to not be involved in my loan/note even though they had paid out $650M in a lawsuit that proved they were (AIG v. BOA) …

  16. “Professor Katherine Porter wrote way back in a 2008 Texas Law Review article that examined the loan documentation from 1700 bankruptcy cases and discovered 41.1 % of the files audited lacked a promissory note to support the proof of claim.”

    Hmm … I wonder what happens to those proofs of claim in that instance?!?

    Are there rules governing such happenings as the good Professor has pointed out to be happening in a minimum of 41% of the claims?

  17. I have been impressed with the articles by William Hudson so I googled Mr Hudson….are you the Prof of Finance from St Cloud, MN?

  18. This says a lot of what I’ve been saying for quite some time now!! Thanks!

  19. I’ve been doing research and the only exception to absolute judicial immunity that I can find is when the court rules and has absolutely no jurisdiction to do so….as in my case since all the paperwork is in the name of BOA and BOA has provided a letter stating they have no record they are the investor.

    I’m ready to sue the officials in their official capacity (including judges) in the Commonwealth of Virginia

  20. until someone finds a way to hold judges accountable for ignoring the law they have sworn to uphold and protect….nothing will change….

  21. Now we’re talking! Time to show settlements, Ocwen, other sales are part of the cover up.

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