Purchase the Seminar: “Death of a Salesman — when the party who “originated” an apparent loan transaction is dead or bankrupt” A 90-minute seminar, audio file, transcript and materials with Neil Garfield.

Death of a Salesman: When the party who “originated” an apparent loan transaction is dead or bankrupt.

Purchase Neil Garfield’s “Death of a Salesman” seminar including transcript, audio recording, Powerpoint and relevant cases, the seminar at this link: https://live.vcita.com/site/lendinglies/online-scheduling.

Once payment is made you will receive a copy of the Seminar, audio, and related materials by email.

Foreclosure expert and attorney Neil Garfield, M.B.A., J.D.*,  addresses what happens when the putative loan originator no longer exists.  This strategy seminar covers the best way to attack mortgage liens, notes, assignments, powers of attorney and endorsements, when servicers like Ocwen, Nationstar, and others, claim to have a lasting (durable) POA from an originator;  but where the originator or alleged initial lender went out of business in bankruptcy or had another “legal death” years before.

This 90-minute seminar covers how to attack the creation, use, and recording of such documents after the loss of actual POA rights and potential criminal ramifications (in addition to civil fraud or RICO on the county, the court, the homeowner and other potential buyers of the property).   Neil Garfield provides a short examination of this fraudulent scheme, and litigation strategies to overcome deceptive power-of-attorneys.

This seminar is for informational purposes only and is not legal advice.

Original Seminar Date: Monday, December 11, 2017

Death of a Salesman: When the “originator” in a home mortgage situation has gone bankrupt of is otherwise out of business.
  1. Law vs. Politics
  2. Student Loan Analogy
  3. Reality of Loan Transaction With Third Party Originator
  4. Debt vs. Loan vs. Note vs. Mortgage
  5. Negotiable Instruments and Statute of Limitations
  6. Disclosure
  7. Under standing the Premise Underlying the Reality of “Securitized” Transactions: The Real World
  8. What Gets Traction in Court, What to Avoid
  9. Reality vs. Legal Doctrine: Ex dolo malo non oritur actio [“no action arises from deceit”.
  10. Realities for Investors
  11. The Politics of Home Foreclosure
  12. Death of the Salesman or Originator
  13. Nonexistent Transactions
  14. Fabrication of Documents
  15. Strategies for Homeowners When the Salesman is Dead
  16. Interrogatories
  17. Request to Produce
  18. Request for Admissions
  19. Cross Examination
  20. Unfunded Trusts

Credits: 2 CLE hours (pending)

Length: 90 Minutes including Q&A at end of seminar.

Cost: $99 Transcript, Audio File and seminar materials including Powerpoint and relevant cases.


Purchase Seminar here.

Licensed attorneys: may apply to receive 2 CLE hours (credits pending).

Please include Bar and License information on registration or email us at info@lendinglies.com.

Questions?  Please contact us at  202-838-6345, or at info@lendinglies.com.


*About Neil F. Garfield, M.B.A., J.D.
Mr. Garfield has appeared as lead counsel in approximately 2,000 jury, non-jury, and administrative trials and final hearings.
Neil Garfield is a practicing attorney in Florida for 41 years. He is also a former investment banker who worked on Wall Street with several independent firms and his family’s Garfield and Company, Members of all major securities exchanges. He is recipient of numerous academic awards for scholastic achievement and for contributions to the study of law. For 12 years he has been publishing more than 5,000 articles on the securitization of debt (on which he is recognized internationally as a leading expert), home mortgage lending, and foreclosures, especially those involving false claims of securitization. He has personally served as lead counsel in several cases where the homeowner prevailed at trial and has served in hundreds of other cases as a consultant with the same result. He received his M.B.A. from Iona College Graduate School of Business Administration, magna cum laude. He received his J.D. from Nova Southeastern Shepherd Broad Law School, cum laude. His work is cited in thousands of briefs, orders and opinions in American jurisprudence, many of which can be found on his blog that has been visited more than 12 million times. see www.livinglies.wordpress.com.

Eric Mains: #MeToo- Is Social Justice a Viable Alternative to a Flawed and Compromised Judicial System?

La Revolucion

# MeToo and #MineToo revolución!

By Eric Mains, J.D, Former Federal Bank Regulator

In the last few months we have seen a literal wave of the wealthy and influential falling from grace, losing their positions of power and ducking for cover as their conduct becomes scrutinized in media and social media. They have become keenly aware if they have something to hide in their past or present that maybe, just maybe, the specter of justice, fate, retribution… call it what you will, but a reckoning of some sort may finally be coming for them.

The key difference from what we have experienced in the recent past is this is not just a few token individuals who are intentionally being sacrificed by other peers just to placate the masses, to give us a sense that there is justice out there, while a majority of the remaining transgressors remain free to go about business as usual. Until recently perpetrators of sexual harassment could expect their violations to either go unreported, or if reported by a victim to a typically “helpful” HR representative at a major corporation, would likely result in that persons termination shortly afterwards or a hushed payout and dismissal from employment. So, what’s changed? Why this sudden firestorm in the specific areas of sexual harassment & civil rights?

Well for one, the rise of social media giving voice to those who were previously either too intimidated or too ashamed to go through the regular channels of our justice system or report incidents to mainstream media. The lessening of any stigma attached with coming forward over allegations of sexual misconduct or workplace harassment to be sure; but perhaps more overlooked has been the slowly building tension from all corners of America with a justice system that over the past few decades has become ever more inaccessible and ever more compromised for certain victims.

The courts in America have slowly devolved (or evolved, depending on your perspective) into a long, drawn-out, pay-for-play system which favors those with the most money and connections. They can hire consultants to figure out how to pick and influence juries, and to try and maneuver into the most favorable venues with the most sympathetic judges. Whether the offense is sexual misconduct, civil rights violations, foreclosure fraud, etc., in many cases if the transgressors have enough resources, they are likely to see a deminimus sentence and little punishment handed out. This disparity in a lack of justice for victims, as compared with other areas of the law, has long existed due to the perceptions surrounding the victims by those in the public and in the system as well.

The above may sound cynical to some, or simply a self-evident statement of the way things are to others.  Those in the former category, who are true believers in our current justice system, may think that movements like #MeToo are just mob justice, devoid of the kind of impartial and logical dissemination of fact based justice they believe our current system provides.  To them, it represents chaos, it threatens the foundational platitude that, “We are a nation of laws”, with a system that meets out justice in a generally fair and impartial manner while ensuring the innocent aren’t wrongly accused or convicted.  That would be a valid sentiment-IF backed factually by a system that did function as such a majority of the time. Most would simply point out to the supporters of our current system that unless they have had blinders on for the past 200 years, they would notice our system has done a pretty haphazard job at providing for such an idealized form of justice in practice.

Don’t get me wrong, having a law degree and having worked as a government regulator I want to be able to have more faith in our justice system and the rule of law, faith that we do have mostly impartial and fair judges, and a court system accessible and open for equal justice to all. I still remember from my law school days something that particularly offended me at the time, when one of my professors stated matter-of-factly to our property law class the futility of assuming case law or precedent was necessarily going to ensure victory in the court room, “Unfortunately, most of the time the law is what the judge says it is, heh, heh, haauurrgh”. In hindsight, Professor Rooney was right, and the reality of our justice system keeps smacking I & my former classmates in the face daily just to drive home that point. Looking at a crosscut of some recent data and analysis of our nations various court systems shows the general problems petitioners/consumers/victims run into once inside it.

Consider access to the judicial system: In a Propublica study of bankruptcy filings, it found for those residing in majority black zip codes who file for bankruptcy, the odds of having their cases dismissed (and failing to attain lasting relief) were more than twice as high as those of debtors living in mostly white zip codes. Why? In general, it was driven by money. Impoverished filers could not afford to file for the costlier Chapter 7 cases as opposed to Chapter 13’s, resulting in less of their unaffordable debt loads being relieved. They, ironically, could not afford to get lasting relief from the bankruptcy system because of immediate financial distress. See https://projects.propublica.org/graphics/bankruptcy-data-analysis . A facial review of our justice system shows one in which only those with income below stated poverty lines can access free legal help in general, and that help is generally outgunned and outmanned. Got $200-$350 to file your court case and pay for your attorney fees/retainer in a civil matter otherwise? Not likely, and a pretty good chunk of those between the $20K-50K range really can’t afford the cost of entry in civil litigation, and are quickly priced out of the game when litigating against corporations. Why not take advantage of some impartial arbitration if you can’t sue?….don’t make me laugh.

How about impartiality in judicial decisionmaking? In a recent paper, Judging the Judiciary by the Numbers: Empirical Research on Judges, by Jeffrey Rachlinski (Cornell) & Andrew Wistrich (CA Central Dist. Ct.), the authors found that just like most humans, judges succumb to various “mental shortcuts” that can lead them to mistakes. The paper’s abstract reads “Do judges make decisions that are truly impartial? A wide range of experimental and field studies reveal that several extra-legal factors influence judicial decision making. Demographic characteristics of judges and litigants affect judges’ decisions.

Judges also rely heavily on intuitive reasoning in deciding cases, making them vulnerable to the use of mental shortcuts that can lead to mistakes. Furthermore, judges sometimes rely on facts outside the record and rule more favorably towards litigants who are more sympathetic or with whom they share demographic characteristics. On the whole, judges are excellent decision makers, and sometimes resist common errors of judgment that influence ordinary adults. The weight of the evidence, however, suggests that judges are vulnerable to systematic deviations from the ideal of judicial impartiality.” See Cornell Legal Studies Research Paper No. 17-32, July 2017 at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2979342

Racial and gender discrimination in decisionmaking? In Examining Empathy: Discrimination, Experience, and Judicial Decisionmaking, by Laura Beth Nielsen & Jill Weinberg of Northwestern University, a 2012 paper at http://www.americanbarfoundation.org/uploads/cms/documents/weinberg_nielsen_-_examining_empathy.pdf , the researchers reported that white federal judges are about four times more likely to dismiss race discrimination cases outright, and are half as likely as black federal judges to rule in favor of people alleging racial harassment in the workplace.

The authors argue this is because African American judges have likely experienced discrimination themselves, and therefore they can recognize more complex and subtle forms of racial harassment. How about gender bias in sexual assault cases? “A Baltimore detective said 90% of sexual-assault cases are ‘bulls—,’ but that’s just the start of the department’s problems” from  http://www.businessinsider.com/justice-department-slams-baltimore-police-department-gender-bias-2016-8  …and here https://www.justice.gov/opa/pr/justice-department-finds-substantial-evidence-gender-bias-missoula-county-attorney-s-office .

A DOJ investigation in Missoula in 2014 noted the following “Despite their prevalence in the community, sexual assaults of adult women are given low priority in the County Attorney’s Office; The County Attorney does not provide Deputy County Attorneys with the basic knowledge and training about sexual assault necessary to effectively and impartially investigate and prosecute these cases; The County Attorney’s Office generally does not develop evidence in support of sexual assault prosecutions, either on its own or in cooperation with other law enforcement agencies; Adult women victims, particularly victims of non-stranger sexual assault and rape, are often treated with disrespect, not informed of the status of their case and revictimized by the process;  and The County Attorney’s Office routinely fails to engage in the most basic communication about its cases of sexual assault with law enforcement and advocacy partners.” This is a 2014 report of just one city…ever wonder why women from the 1970’s, 80’s & 90’s often never bothered/dared reporting any assaults until now? Enough said.

Racial discrimination in sentencing? In a first of its kind report from 2014-2015 found here http://projects.heraldtribune.com/bias/sentencing/ The Herald-Tribune in Florida spent a year reviewing tens of millions of records in two state databases. Among the stated findings: “Florida’s sentencing system is broken. When defendants score the same points in the formula used to set criminal punishments — indicating they should receive equal sentences — blacks spend far longer behind bars. There is no consistency between judges in Tallahassee and those in Sarasota. • There’s little oversight of judges in FL. The courts keep a wealth of data on criminal defendants. So does the prison system. But no one uses the data to review racial disparities in sentencing. Judges themselves don’t know their own tendencies. Across FL, when a white and black defendant score the same points for the same offense, judges give the black defendant a longer prison stay in 60% of felony cases. For the most serious first-degree crimes, judges sentence blacks to 68% more time than whites with identical points. For burglary, it’s 45% more. For battery, it’s 30%.”

Consistency in decision making and opinions based on case precedent?  In a Nevada Law Journal paper entitled Stare Decisis In The Inferior Courts Of The United States, by Joseph W. Mead, his abstract notes “While circuit courts are bound to follow circuit precedent under “law of the circuit” the practice among federal district courts is more varied and uncertain, routinely involving little or no deference to their own precedent”  While I simply don’t have room for his full analysis here, I will note he concludes his paper in part as follows “But we are now left with a puzzle. If district courts indeed possess the power to either adopt the law of the district or require some other level of deference to precedent, and there are good reasons to do so, why have so few followed this path? I think the answer is not that district courts are choosing not to, but that they have not yet given the matter consideration.”

Foreclosure Bias? That’s an entire book, just ask David Dayen who wrote Chain of Title, or Abigail Field who accurately noted back in 2011 http://fortune.com/2011/04/18/fighting-a-foreclosure-suit-hope-for-the-right-judge/ “Not all judges are confronting the issues in the same way. Many are adopting procedures to stop any fraudulent behavior by the banks and are investigating questionable documents submitted in their cases. Other judges are turning a blind eye, at best.”

While I will save that aspect for a near future article, I will simply note that some judges going beyond turning a blind eye; they are straying into obstruction of justice, using a “selectively creative” doctoring of fact patterns from homeowner complaints to suit their narratives when issuing rulings, or just outright failing to address motions to correct error or address black letter law when challenged by attorneys. Par for the course, especially in the federal court system, which took a shamefully compromised former AG Eric Holder’s call to consider his TBTF/sympathy for the devil ideology in favor of Wall Street banks, and the fed courts ran like Usain Bolt with it (All while Holder’s temporarily vacant office was being kept warm at Covington & Burling, and Fannie Mae & Freddie Mac were being systemically looted by the Obama administration). A recent article discusses how the black community and consumers suffered in the name of this flawed ideology  http://peoplespolicyproject.org/2017/12/07/destruction-of-black-wealth-during-the-obama-presidency/ by Ryan Cooper and Matt Bruenig)

I know what many are thinking at this point: “So What? What are you telling us we don’t already know? The justice system is not perfect, it never will be, but it’s functional, and it’s the best we have to work with!” It would be the last part of that sentence that I would wholeheartedly disagree with, and why a platform like #MeToo is now becoming an important, and I think very valid, social justice alternative. Our system is not the best it can be in part because we have come to accept the fallacy that judges, politicians, prosecutors, police, CEO’s, talk news hosts, etc., those who help to shape, influence, or enforce our justice system in different ways, should be held to a different level of accountability, job performance, and social review than the rest of society.

You screw up on your job, make a bad decision that costs the company, hurts clients/constituents, and choose to allow an illegal or immoral activity to take place?-FIRED! Those in the aforementioned categories? Insider trading based on stock tips you get in office, OK! Screw over constituents/rear end a petitioner because his mother dresses him funny? That’s valid! Harass your office assistant or underling? You gave them a job, and they knew the game, grin and bear it! I could go on, but need not. Not only do those with access and who benefit from the system not want change, but those who work within it often don’t recognize the need for change (See Mead & FL Herald Tribune report, supra). Those within it don’t tend to question the biases that have been ingrained in them when they do make decisions (See Rachlinski, Nielsen, etc., supra). They are subject to undue influence by those with access and money who know how to “work” the justice system.

I routinely quote, and will continue to quote Frederick Douglass, because 150 years later the reality he highlighted has not changed one iota, “Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress.” Church Frederick! If we must accept that our system is biased, broken, and not soon to change, how the hell can we expect to wrangle justice out of it when all avenues for influencing seem out of our control? That’s where Douglass recognized the simplicity of the truth, and so does #MeToo-It’s demand! It’s fear of a collective and sizeable retribution for ignoring social justice & common morality. It’s creating consequences outside of a non-functional system that ultimately can lead to change in that system. Social media has given a voice to those who have not had a simple, affordable, accessible platform to demand justice denied them. Technology has now made that possible, and another old adage has proven itself to be as true as ever-“Cockroaches scurry under the light”

Can the wrong perpetrators of alleged crimes be identified or wrongly harassed by a # MeToo movement? Yes, but that risk is also true in the current system. Laws are in place to protect or compensate the innocent or wrongly accused, as well as punish those who knowingly make false statements. If the law and our justice system is a search for truth and justice, then maybe # MeToo will help expedite the administration of this in a system where it has been delayed and denied those without money and a voice. Maybe it’s time for a few more platforms like it from civil rights violations to fraudulent foreclosure….Maybe it’s time to remind those in our system who they are there to work for, and demand they do a better job of it… to demand a change from them and our system instead of quietly submitting…. Viva la # MeToo revolución!

Editor’s note:  Perhaps the wronged homeowner’s call to arms simply starts with a simple hashtag called #MineToo.  If you have been victimized by a loan servicer or foreclosed on fraudulently tweet #MineToo!!!




Ocwen Boarding Process Was Shot Down Last Year

As foreclosure defense lawyers have been saying for years, the Ocwen Boarding process is a sham. “This boarding process is a legal fiction, and it means something different to every entity,” Butchko ruled from the bench during a March 17 hearing.

Ocwen does not verify any of the data. It downloads it and then “calls it a day.”

“I have done this investigation for a long time,” he said, noting, “The appellate courts are going under this presumption that there is some type of meaningful auditing and verification.” But Jacobs maintained, “You just heard it from a lawyer who knows how to properly phrase the questions that she’s basically testifying to all — all of this is still hearsay.

”Butchko granted an involuntary dismissal in HSBC Bank USA’s suit against Miami homeowner Joseph Buset, whose loan was initially serviced by Litton Loan Servicing LP, which Ocwen acquired in 2011.

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See Home Foreclosure Fails on OCwen Servicing Records

Bruce Jacobs, a Foreclosure defense lawyer won this case. It was in 2016 and was, as usual, under-reported. The case hinged on the prior records of Litton Loan Servicing that Ocwen had acquired. The robo-witness could only testify that Ocwen employees had matched fields and columns on the payment history and had done nothing else. Hence verification was nonexistent.

[Judge] Butchko had to decide how to treat loan documents that became part of Ocwen’s business records but remained subject to hearsay objections unless the company could show it independently verified the data after transferring the loans. She considered evidence on Ocwen’s boarding process — the procedure by which financial services companies transfer account data from one lenders’ management system to another after trading loan portfolios.

Witnesses for lenders in foreclosure cases must show they did independent fact-checking to qualify their files as business records and not hearsay.

All records in  digital or hard copy are hearsay by definition. The only issue is whether a proper foundation has been offered by the robo-witness to claim that the “documents” qualify as an exception to the hearsay rule and that therefore they should be admitted into evidence. This case on Ocwen clearly shows that the testimony by dozens of Ocwen robo-witnesses has been false.

Based upon information I have received from credible sources I think the problem is worse than that. My sources tell me that the records are not uploaded or transferred. The only thing that happens is that the user name and password is changed. That is why the records of the prior servicer are NEVER introduced. It may be that Ocwen changes the fields and columns to make it appear that the records have been processed, but based upon my information the Ocwen records are often taken from the same database. That being the case, the robo-witness should have been an employee of the former Litton servicing.



The Phantoms of Foreclosure: Phantom Creditors, Trusts and Debt

by Jay Guggenheim

Hurry!  Sign up for the ‘Death of a Salesman’ seminar on Monday at 4pm Eastern here.


Neil Garfield, attorney Charles Marshall and investigator Bill Paatalo discuss how mortgage servicers are collecting phantom debt on behalf of phantom creditors by creating fabricated and forged documents on the Neil Garfield show.  Servicers counterfeit mortgage notes and pursue collection of this ‘debt’- but who do they send the proceeds they collect to, if there is no true creditor or funded trust that can be identified, or can accept payments from the servicer?

It is now known that:

  • The banks funded themselves instead of the trusts which never really existed (phantom trusts).
  • The banks covered up their theft of investor money by originating or buying loans with investor money and not trust money.
  • The theft has been the subject of settlements in which the owner of the debt — the investors — is paid off with cash and “resecuritization” in which actual loans were “sold” into a new trust (Like Zuni) by a party who STILL didn’t own them (phantom sales).
  • The proceeds of judicial and nonjudicial sales do not go to investors but back to the “underwriters” of nonexistent worthless certificates issued by nonexistent trusts that are registered nowhere and unfunded (phantom trusts).
  • The underwriter acts as “Master Servicer” for the phantom trust and collects “servicer advances” that were neither advances nor from the servicer, but rather a return of investor capital even if it was OTHER investors.
  • The “Trustee” of the Trust is not a Trustee either in writing nor in practice (phantom trustees).
  • We know the banks are acting on their own behalf and not on behalf of the investors or the trusts.

What we still don’t know- is where do the proceeds collected by the servicers from homeowners go- if there is no Trustee or Trust? 

The servicers are trying a ‘hide in plain site’ strategy by deliberately adding new players to the chain of title and switching servicers so another opaque level is created.

  1. Servicers are often changed the moment a homeowner goes into default.  Therefore, if litigation ensues, the servicer won’t have to reveal who payments are being forwarded to because no payments are being made, and
  2.  Servicers often change immediately after a foreclosure sale occurs so it isn’t disclosed where the sale proceeds went to.

Therefore, Neil Garfield suggests that homeowners and attorneys subpoena, not demand in discovery, who receives/received payments from the servicer, and name not only the current servicer in litigation, but former servicers as well.   Charles Marshall points out that he sees this servicer-switch particularly with homeowners who prove difficult or litigious, and to create an additional layer to conceal the truth.  The servicer transfers are an attempt to launder the papertrail.  He also says that this strategy makes it more difficult to discover who the true lender at origination was.


Neil Garfield says this plan is standard operating procedure now and that he can “imagine a room full of lawyers trying to plan out a strategy to confuse the homeowners, attorneys and courts- first they must make the money and ownership transfers difficult to understand, and then they must devise a system that makes it difficult for pro se litigants to get the information they need to create a defense.”

Back in 2007 and 2008 Garfield said he was sending out QWRs on behalf of homeowners who were not in default and saw an interesting pattern.  The homeowners who were current, and not in foreclosure, would receive letters providing a payoff amount, but no copies of note or assignments; but homeowners in foreclosure would receive payoff amounts including endorsed notes and assignments, to establish a credible chain-of-title.  Thus, those in foreclosure received a full QWR response including fabricated and robosigned documents that created the appearance of legitimacy.

Neil Garfield says that the banks and servicers have created an Industry of Fraud where people can create an entity, purchase lists of old debt that may or may not be valid, and attempt to collect.  Most people will tell the debt-collector to prove it or go to hell, but there is a percentage of poor, disadvantaged or unsophisticated people who will pay up.  Mortgage servicers and REMIC trustees are following the same business model by attempting to collect on debt they can’t prove they own without resorting to fabricated and forged documents.

Investigator Bill Paatalo says that in all of the years of investigating the trusts he has not yet seen any evidence that the trusts were funded or the entity foreclosing on the home purchased the debt legitimately.  In litigation, he never sees a credit or certificate holder identified and the banks rely on smoke and mirrors to collect on the phantom debt.  He said that he recently had a client that was not in default but was curious about who owned his loan.  Bill’s client received a response from Aurora emphatically stating that the note had never been transferred and would never be transferred unless there was a default.  Aurora was perplexed why a homeowner that was not in default was concerned about the ownership of his loan.  Paatalo claims he has called the GSEs and Hud who refuse to return his phone calls so he can verify a Power of Attorney.  He says it is clear that the Power of Attorneys are being substituted for the missing assignment of mortgages- because Power of Attorneys are typically not recorded in the county records.

Phantom debt is being collected on behalf of phantom creditors and the nonexistent party is being papered over by pledging the loan to a trust that doesn’t exist, as agents of agents of agents, and false Power of Attorneys and Attorneys in Fact.  The scheme creates such a convoluted ‘fact’ pattern so that homeowners and their attorneys must try to untangle the ownership knot thus requiring hours and  hours of work.  Garfield points out that this layering, or laddering as Goldman Sachs calls it, id a deliberate attempt by the banks, to confuse whoever is bothering them.

For example, there may be a signature and the name of a corporation on a document, below  it will show Bank of America as successor to Lasalle Bank as Trustee, as Trustee for XYZ trust, as Attorney In Fact, for x entity.  This deliberate obfuscation should be brought to the attention of the court and is a strategy to push out time and space- to buy time and also for attorneys to create additional billing hours.

Neil Garfield calls this strategy of the major investment banks, the “real thiefs in interest” because they do not posses a party who can be identified as the “true party in interest” as required to declare a default or foreclose.  The investment banks create puppet attorneys who do their dirty work, and because of this risk, the lawfirms facilitating this crime are paid handsomely.

Bill Paatalo recently who is an expert on the ‘hide, conceal, and cover’ strategies by the banks, recently obtained a copy of a itemized settlement statement from a lawfirm defending a USBank/Chase foreclosure.  The bank had paid over $450k and over 1,224 billable hours to defend against a simple foreclosure action, to buy a Cynthia Riley issue and hide the fact there was no certificate holders.  Paatalo points out that the head attorney was paid $628 an hour for four months of full 40-hour work weeks.   It is likely the mortgage wasn’t a fraction of this amount, but it shows that the banks are afraid. He points out that it is unlikely that any investors would authorize that type of expenditure if they existed- but would look for an equitable solution.

Garfield says to take the billing expense issue one step further, and states that attorney fees are deliberately ran up by law firms defending the banks due to the risk of the work being done.   Attorneys submitting forged and fabricated documents are putting their careers on the line, therefore they build in a profit for undertaking that much risk.

Additionally, the lawfirms have software that can recreate the record, cover up bonuses, move numbers around and create legitimate billing hours that were never done.  This ‘bonus’ is overlooked by the bank as compensation for risk taking.    Listen to the audio recording above to listen to investigator Bill Paatalo discuss a recent tax settlement where the certificate holders state that they have no right to recover from the homeowner, and no right to enforce the mortgage or note.

And lastly, Neil Garfield educates homeowners that the chances of proving in court ‘what really happened’ will likely not happen for sometime, if ever, and the goal of the homeowner and his or her attorney should be to reveal the GAPS in what is being assumed as the foreclosure path.







Bullseye! Investors Are “Far Removed” from Alleged Underlying Mortgages


It is in tax litigation that some of the truth comes out. While the courts have yet to determine if the REMIC Trust ever existed, they are coming to some interesting conclusions — corroborating all the basic underlying themes of this blog and all my work since 2007.

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Hat Tip Bill Paatalo

see Cashmere Valley Bank v WA Dept of Revenue_Unsecured Mortgages (WA Sup Ct 2014)

Borrowers making the payments that eventually end up in Cashmere’s REMIC investments do not pay Cashmere, nor do they borrow money from Cashmere. The borrowers do not owe Cashmere for use of borrowed money, and they do not have any existing contracts with Cashmere. Unlike HomeStreet, Cashmere did not have an ongoing and enforceable relationship with borrowers and security for payments did not rest directly on borrowers’ promises to repay the loans. Indeed, REMIC investors are far removed from the underlying

mortgages. Interest received from investments in REMICs is often repackaged several times and no longer resembles payments that homeowners are making on their mortgages.

While it is true that the interest received by Cashmere from the REMICs ultimately comes from promissory notes secured by mortgages and deeds of trust, Cashmere has no interest in the underlying mortgages and deeds of trust and is not a beneficiary of those instruments.

In plain language, all cases in which XYZ appears as Plaintiff or the alleged beneficiary under a deed of trust and it asserts its appearance as, for example, US Bank as Trustee for the certificate holders of 2007-A Mortgage pass though certificates it is not possible to ascertain the interests of the certificate holders without examining the certificates, their indentures and any side agreements that apply.

As stated in this Washington Supreme Court case, certificates vary as to whether they grant an interest in notes, mortgages or even a particular income stream. Prepayments by homeowners might not be paid at all to “preserve” the interest income flow. Payments received by way of a foreclosure sale are handled the same way, with deductions for alleged “servicer advances” that are neither advances nor do they come from the servicer.

The ultimate source of cash flow was mortgage payments. However, Cashmere’s investments were not backed by any encumbrance on property nor did Cashmere have any legal recourse to the underlying trust assets in the event of default. Thus, Cashmere’s investments were not “primarily secured”

by mortgages or trust deeds. We affirm the Court of Appeals and deny Cashmere the deduction.


The secondary market buyer acquires the right to receive the borrower’s principal and interest payments on the home loan and also the right to foreclose on the home if the borrower fails to make timely payments.4 The buyer often purchases numerous mortgages from various institutions and then “securitizes” the mortgages by pooling (or packaging) the mortgages and issuing interests based on those pools to investors. These interests-that is, these MBSs-vary in how they are structured and what kind of interest the investors receive. See Cashmere Valley Bank v. Oep’t of Revenue, 175 Wn. App. 403, 305 P.3d 1123 (2013) (explaining creation of MBSs).

The Neil Garfield Foreclosure Show at 6pm Eastern: Phantom Collectors of Phantom Debt

Phantom Debt

Phantom Debt collected from Servicers on behalf of Phantom Creditors

Listen in on Thursdays LIVE! Click in to the The Neil Garfield Show

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

Mortgage servicers are collecting Phantom Debt on behalf of Phantom creditors by creating fabricated and forged documents.  Servicers counterfeit mortgage notes, assign them a value, and pursue collection of this ‘debt’- but who do they send the proceeds to, if there is no true creditor or funded trust that can be identified, or can accept payments from the servicer?
According to Neil Garfield:

  • We know that the banks funded themselves instead of the trusts which never really existed (phantom trusts).
  • We know that the banks covered up their theft of investor money by originating or buying loans with investor money and not trust money.
  • We know that the theft has been the subject of settlements in which the owner of the debt — the investors — is paid off with cash and “resecuritization” in which actual loans were  “sold” into a new trust (Like Zuni) by a party who STILL didn’t own them (phantom sales).
  • We know that the proceeds of judicial and nonjudicial sales does not go to investors but back to the “underwriters” of nonexistent worthless certificates issued by nonexistent trusts that are registered nowhere and unfunded(phantom trusts).
  • We know that the underwriter acts as “Master Servicer” for the phantom trust and collects “servicer advances” that were neither advances nor from the servicer, but rather a return of investor capital even if it was OTHER investors.
  • We know that the “Trustee” of the Trust is not a Trustee either in writing nor in practice (phantom trustees).
  • We know that the banks are acting on their own behalf and not on behalf of the investors or the trusts.

So with this fact pattern, the central question becomes: To whom does the “Servicer” send money after they collect their monthly servicing fee, or after they foreclose?  Based on the aggressive and illegal behavior of mortgage servicers- it would be fair to speculate that the servicer does not forward funds to any party but retains all money for itself.  It would also explain why loan servicers used HAMP to generate payments from the homeowner and sabotage any modification.  Servicers are incentivized to force the loan into default, not to work-out a plan that helps the homeowner remain in their home- because a foreclosure results in massive profits likely retained by the loan servicer.

Investigator Bill Paatalo of BP Investigative Agency will also discuss the fact that he has examined Hundreds (thousands) of cases and has yet to see a single document or any information that reveals the mortgage securitization money trail.   Neil Garfield speculates that “since the underwriter is posing as the Master servicer, even though the trust might not exist, that the money is going to the underwriter. That in turn leads to the question of what the Master Servicer did with the money?”

One thing is known for sure and that is that the servicer is collecting payments from homeowners who are paying. It is also common knowledge that servicer advances have been securitized indicating that “certificate holders” are being paid without recourse. Of course we don’t know how much is claimed as servicer advances and whether the money was claimed but not really paid because the banks have successfully buried this information.   It’s a rat’s nest by design,  but eventually the information will surface.


Paatalo will touch on Cashmere Valley Bank v WA Dept of Revenue_Unsecured Mortgages (WA Sup Ct 2014), where it was discovered that REMIC investors are far removed from the underlying mortgages.  In this case the court ruled that the investor must have some type of recourse against the collateral.  In Cashmere, the REMIC issuers, “offered no interests in mortgage or trust deeds to back their promises to pay investors. Relatedly, Cashmere has no direct or indirect legal recourse to the mortgages that underlie its REMIC investments in the case of default.”  Thus, the court ruled that Cashmere could not claim a tax deduction.

Neil Garfield points out that that in Cashmere, the borrowers do not owe Cashmere because Cashmere never loaned money and there is no contractual relationship between the borrowers and Cashmere. That is especially significant and Garfield reminds homeowners and attorneys that some of the best cases supporting securitization fail are found in tax law.

Cashmere illustrates how different types of interests are given to the holders of certificates and vary. Which means that in cases where US Bank appears as Trustee for certificates or certificate holders that might mean nothing- but homeowners and attorneys should have an absolute right to see the certificates and any indenture or other agreements regarding the certificate and its entitlement to income and the alleged underlying mortgage.

Garfield reiterates that strategy, “might be just what we need to force the opposition to respond to discovery about the nature of the certificates and if the Trustee is asserting a direct agency relationship with the certificate holders (i.e., in cases where a trust is not mentioned), and then we would be entitled to see that agency agreement and very possibly allowed to see the names of the certificate holders.


Excerpts from Cashmere include (thank you Bill Paatalo for providing these excerpts):

Cashmere snip - Investors are far removed from the underlying mortgages.PNGCashmere snip - Investors are far removed from the underlying mortgages(1).PNG

and lastly:Cashmere snip - no direct or indirect legal recourse to the mortgages that underlie REMIC investments.PNG

Bill Paatalo, Private Investigator:
BP Investigative Agency, LLC
P.O. Box 838
Absarokee, MT 59001
Office: (406) 328-4075
Attorney Charles Marshall, Esq.
Law Office of Charles T. Marshall
415 Laurel St., #405
San Diego, CA 92101

Bank Fabrication and Fraud Causes Rise of New “Industry” — Phantom Debt

It was inevitable that smaller players would seize upon the “irresistible” opportunity to create or sell phantom debt. With the justice system lining up to approve the practice of stealing debt owned by investors and claiming the right to collect, it did not take a genius to come up with a plan to invent the right to collect debts that never existed.

It also didn’t take a genius to realize that that if you could pretend to be a servicer or collector of a real debt, it was just as easy to skip the part about real debt.

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Hat tip to Eric Mains

see Therrien

See https://www.bloomberg.com/news/features/2017-12-06/millions-are-hounded-for-debt-they-don-t-owe-one-victim-fought-back-with-a-vengeance

systematic schemes to collect on fake debts started only about five years ago. It begins when someone scoops up troves of personal information that are available cheaply online—old loan applications, long-expired obligations, data from hacked accounts—and reformats it to look like a list of debts. Then they make deals with unscrupulous collectors who will demand repayment of the fictitious bills. Their targets are often poor and likely to already be getting confusing calls about other loans. The harassment usually doesn’t work, but some marks are convinced that because the collectors know so much, the debt must be real.

Phantom debt actually falls into multiple categories all sharing the same fundamental characteristic — there is no right to collect it. The debt might be entirely fictional, partially fictional, or real. The parties seeking to collect on it are either real debt collectors or just scam artists. The owners of the debt have been left in the dust. They are investors who were defrauded and who are being silenced by confidential settlements.

So a small cottage industry has emerged out of the cancerous great mortgage fraud. To make money you merely need to get a list of people and then send out collection notices. Those collection notices look pretty frightening until you scratch the surface.

In the end, it comes down to the same thing we have been facing in wrongful foreclosures (which means virtually all foreclosures). The foreclosing parties are no more than the same scam artist fake debt collectors that has rippled through the financial industry.

They don’t own the debt because they never paid for it either by lending money nor by paying for the debt afterwards. Fake documents are used to paper over the obvious defective nature of their claims. The money collected is never used to forward or pay to the real victims — investors who put up the money in the first place.

All this became possible because the justice system discarded the rule of law. Had it simply stayed consistent with existing case law and statutes, virtually none of the foreclosures would have happened, and the new industry of fraudulent collections would have been limited to just a few scam artists who ended up in jail.

Back when dinosaurs roamed the Earth and I was doing foreclosures for banks and homeowners associations, I can remember judges denying me a final judgment and sending me back to the drawing board because my paperwork was incomplete and therefore “not in order.” Every judge in the country was doing that whether the case was contested or not. The Judge reviewed the documents and if the dots were not connected they threw it back at the lawyer.

What happened to that?

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