RESCISSION: How Judges Are Still Getting it Wrong Because They Don’t Like TILA RESCISSION

For more information please call 954-495-9867 or 520-405-1688.

This is not a legal opinion on your case. Get a lawyer.


It is no surprise that Judges are STILL trying to take the teeth out of TILA rescission. In one case in bankruptcy, the judge twists the court into knots avoiding the obvious —- the debtor was right and the bank blew its opportunity to either comply with the duties under TILA rescission or file suit to vacate the rescission, which is effective by operation of law.

In this case the Court ignored those duties despite the unanimous Supreme Court decision stating that the statute is clear on its face, no interpretation is allowed or required, and the parties are bound by the procedures set forth in the statute. Judges don’t like TILA rescission and they don’t like the Jesinoski v Countrywide decision. They also don’t like minimum mandatory sentencing for criminal defendants. But in both rescission and sentencing they MUST follow the law.

And the law says that first the homeowner sends the rescission, second the rescission is effective upon mailing, third, that makes the note and mortgage void, fourth, the creditor or lender must comply with three duties BEFORE the demand for payment. The statute says that the creditor may not demand payment until after it has fully complied with the three duties (return canceled note, release encumbrance of record, and pay money TO the “borrower.”)

The Judge in this case obviously thinks that leads to an absurd result. Even if one were to agree philosophically with the Judge’s opinion of the statute, the rescission is still effective, was effective and will now always be effective. Case over. Upon appeal to either the Federal District Court Judge or the Circuit Court of Appeals, the Judge will be overturned — or else the thousands of courts who got it wrong on the first go around will get yet another tongue lashing from the U.S. Supreme Court. If they don’t like the statute, then they should be trying to Change the statute, not ignore it.

I have been advising my clients to record the rescission in the County records where deeds and mortgages are recorded. They can then assert that not only has the mortgage been rendered void by operation of law, but it also has been recorded giving notice to the world that the mortgage encumbrance has been rescinded and is void. In Florida we do that using a Notice of Interest in Real Property under F.S. 712.05 with exhibit “A” (The legal description and street address) and “B”(the notice of rescission).

This Judge gets that wrong. The Bankruptcy Judge is still reading into the statute that tender of money or property is required in order to have an effective rescission, which is opposite of what is stated in the statute, and opposite to the unanimous Supreme Court decision.  In fact, if the lender/creditor fails to act for more than one year after receiving the rescission they lose the right to collect on the debt completely.

Note that in this case the rescission was apparently sent within the time limit allowed by the statute and the Judge still chose to ignore it. The Courts don’t have the right or power to ignore a TILA rescission, since it is effective by operation of law. If an adversary had been filed, the creditor would lose for lack of standing, lack of compliance and the statute of limitations in the TILA rescission provisions 15 U.S.C. §1635 et seq.—- but the point here is that a legal action must be brought by a party who can assert standing (without the void note and the void mortgage) to vacate the rescission. Without that the rescission stands.

So the Judges who are trying to angle away from the effective rescission and thus ruling on motions are entering orders that are void, in my opinion, because they rest on the premise that the rescission was not effective by operation of law. In effect they are over-ruling the U.S. Supreme Court and changing the wording of the statute. There is no jurisdiction to do anything other than to treat the mortgage and note as void. AND in this case the self-proclaimed creditor apparently did what all the banks and servicers did — NOTHING. The statute says if they continue to stonewall the rescission for more than one year, they lose the right to make demand for ANY payment FROM the “Borrower.”

The issue of what that does to the bankruptcy action is a separate issue. Obviously it changes the amount of liabilities and the the assets of the debtor and probably would lead to a dismissal of the bankruptcy petition unless there are other debts and assets that are still subject to being processed through the bankruptcy action.

Here is the quote from the Court, which is most likely going to be appealed laterally to the District Court Judge, who has superior jurisdiction to the Bankruptcy Judge.

Debtor’s counsel argues that the debtor and her husband rescinded the loan in March 2010. It is not entirely clear what counsel was arguing. If she was arguing that rescission ipso facto changed the secured loan to an unsecured loan, the debtor is significantly over the unsecured limit. If her argument is that rescission eliminates that loan, she overlooks the debtor’s rescission obligation to put the lender in the same position, less certain fees and costs, as the lender was in before the transaction. It appears that debtor’s counsel relies on Jesinoski v. Countrywide Home Loans, Inc., 574 U.S. ___, 135 S.Ct. 790 (2015). She appears to focus on that portion of the opinion discussing the elements of the common law right of rescission. Reliance is misplaced. The sole issue in that case was whether the borrowers timely rescinded the loan, not the effect of the rescission notice on the borrowers’ obligations when they rescinded the transaction. They gave their rescission notice within the three-year period but did not file suit until after the three-year period. The lender argued that they were time-barred and that the transaction was, therefore, not rescinded. The lender argued that the common law doctrine of rescission applied and required that the borrower tender the loan amount at the time of rescission for there to be a valid rescission. The borrowers gave notice of the rescission but did not tender the rescission payment. The Supreme Court acknowledged the elements of the common law rescission but held that Congress created a new right of rescission that superceded common law rescission and that notice of the rescission was all that the statute required. Debtor’s counsel appears to be arguing that because the common law element of rescission — making a tender of the rescission amount — is not required, the loan is rescinded on notice and the debtor has no further obligation. In fact, the debtor has a further obligation upon giving notice of rescission and that is to make the appropriate rescission payment. This obligation is a claim in bankruptcy. 11 U.S.C. §101(5). Nor does it matter in this case whether the claim is a secured claim or an unsecured claim. Either way, the amount of the claim exceeds the applicable limit.

Rescission Legal Procedures and Strategies for Mortgages

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



Homeowners are encountering the same resistance and frustration they did when I started pushing rescission that the nuclear option. Lawyers, too busy or not willing to do the research, analysis and thinking on the subject give a wrong incorrect advisory opinion and tell the homeowner that nothing has changed. They are right. The statute still says what it says. But they are wrong when they think they understand TILA rescission which is a specific statutory scheme for non-judicial cancellation of a loan that makes the note and mortgage void. They still can’t believe how simple it is. And they think the US Supreme Court was wrong in Jesinoski vs Countrywide. My answer is simple: Even if the unanimous decision of the Supreme Court in January was wrong, it is, according to our system of laws, still FINAL.
It all comes down to this: Patrick Giunta in Fort Lauderdale and several other lawyers (see Charles Marshall in California and the recent shows on the Neil Garfield Show), have all come to the same conclusions, after playing devil’s advocate against each other to sharpen the understanding of TILA Rescission (non-judicial cancellation of mortgage and note and loan contract).  and I believe that the Federal Judge in most cases is going to be very narrow in the way he/she looks at your case. But in BKR we get more than one bite of the apple — the administrative proceeding and the adversary complaint we file to either enforce rescission or quiet title. We think that recording the rescission which is effective by operation of law, puts the homeowner on firmer footing.
And remember that the three duties imposed by TILA rescission are (a) return of the cancelled note, removal of the encumbrance from the property records, and PAYMENT TO THE BORROWER of all money ever paid by the borrower PLUS all money paid to any third party as compensation for origination of the loan. If the one year statute to enforce has expired, then two things are true: (1) you can’t sue to enforce the rescission but you scan still sue to quiet title and (2) the creditor can no longer ask for repayment of the debt. And by the way, if they ever DID come up with such a creditor (in reality or through fabrication) they could only ask for the principal due, without finance charges or fees).
The banks are in damage control and panic mode. They know we are right. But that has not  stopped them from asserting claims, defenses and arguments that are completely unsupported by the law.
It seems to me and other lawyers whom I have studying this issue, that while we believe we are dead-on right, history is going to repeat itself — i.e., Judges are not going to want to enter a ruling that they perceive gives you a “free house.” We like to stay in the Federal system because it is going to be less difficult than the State system, and Bankruptcy is the only other venue.

On the first go-around, despite the clear language of the statute, thousands of Judges, state appellate courts and even Federal appellate courts decided that the TILA rescission statute SHOULD not mean what it says. And they literally wrote in provisions that were exactly contrary to the express wording of the statute. I endured considerable ridicule (2007-2015) when I said that rescission levels the playing field without a lawsuit and without any tender of money or property. I also endured ridicule when I said that the loans were all subject to false claims of securitization and that the investment banks had no idea who the creditors were in any one loan.

I was cast as a fringe conspiracy theorist when I suggested that the paperwork from the false “closings” were destroyed or lost. I had proof. I identified a system and infrastructure of falsifying and fabricating documents with forgeries, robo-signing and now Robo-witnesses.  It didn’t matter and even today Judges are ruling as though that makes no difference — because they see their primary responsibility as one Judge in Sarasota said in open court was to “protect the banks.”

The Banks realize they have a  devastating problem but they are coming up with vocabulary and arguments that the Judges want to hear about rescission. They are throwing everything including the kitchen sink at rescission. They could avoid that by showing a real creditor with standing and taking issue with the notice of rescission. But they can’t because they cannot come up with a real creditor for a number of reasons and they dare not because it would reveal deep defects in the claimed securitization process. It could literally destroy most of the big banks.

So in our judgment we are going to be confronted with resistance from the bench. The laws, rules and procedures for the TILA rescission could not be more clear — as the opinion written by Justice Scalia stated with dripping sarcasm. BUT the Judges and many lawyers believe that the statute was framed incorrectly and that Congress never anticipated the problems that we face today with these wild, convoluted claims of securitization. So they are basically taking the faith-based legal approach instead of the “nation of laws” approach provided in the Constitution. They are saying the US Supreme Court was wrong or didn’t mean what it said, just as they said before when hundreds of thousands of decisions came down requiring a lawsuit claiming fraud, and tender to property or money to even have standing to enforce rescission. The assumption, even by fervent advocates of the rights of homeowners, was that it just wasn’t possible that Congress meant to give homeowners that much power to cancel a loan contract, note and mortgage. They are wrong. That is exactly what Congress wanted to do.

Judges want to believe that argument that somehow homeowners are twisting the law around in order to get a free house. But if they get a free house it is only because the banks could not come up with a party who had standing to VACATE the rescission within the 20 day time limit.

Ultimately the issue will be decided through litigation. But there ARE some Federal judges who never made the mistake of the thousands of other judges who “interpreted” a statutes that was clear on its face and who recognized that there was no ambiguity to resolve.
It is ONLY in a situation where the Court determines that something is ambiguous that they can resolve the ambiguity through interpretation. The Supreme Court says that the statute is clear and unambiguous. it says it applies to all rescissions and makes no distinctions between disputed and undisputed rescissions. It says that the rescission is effective when mailed. And it provides a window for compliance of 20 days. Any “interpretation that there was more than 20 days to comply — or file suit during that time to vacate the rescission — would effectively change the plain meaning of the statute — that the rescission was effective when mailed.

So we strongly believe we are right but we strongly believe that we encounter a lot of resistance from bank lawyers and the bench. Lawyers must be prepared to move to strike any “motion” that attempts to skirt the issue of standing. There is no valid motion if the “standing” of the proponent of the motion was established on the basis of the note and mortgage which are now void, once the notice of rescission was mailed.

The banks don’t feel comfortable ignoring rescission anymore. But they are trying to get the Judge to “ignore” the rescission without asking for the Court to vacate the rescission. They know that requires a lawsuit and that in order to file a lawsuit the actual creditor would need to be presented because the note and mortgage are void and nobody can assert either standing nor a claim upon which relief could be granted on the basis of void instruments.


Our legal history has many examples of enormous errors committed by the Courts that were obvious to some but justified by many. The result is usually mayhem. The cause is a bias toward some underlying fact that was untrue at the time. Some examples include
  1.  the infamous Dred Scott decision where the Supreme Court ruled that a black man is not a person within the meaning of the constitution and therefore could not sue to protect his rights because he was not a citizen by virtue of the FACT that his ancestors had been brought to America as slaves. The underlying bias was considered axiomatically true: that “negroes” were fundamentally subhuman. It took a civil war that took 500,000 casualties and a constitutional amendment to change the results of that decision. We are still dealing with lingering thoughts about whether the color of one’s skin is in any way related to our status as humans, persons and citizens.
  2. the internment of Japanese Americans during World War II. The Supreme Court upheld that decision on the basis of national security. The underlying bias was considered axiomatically true: that people of Japanese descent would have loyalty to the Empire of Japan and not the United States. People of German descent were not interred, probably because they looked more like other Americans. As the war progressed and the military realized that people of Japanese descent were resources rather than enemies, the government came to realize that acknowledging these people as citizens with civil rights was more important than the perception of a nonexistent threat to national security. Americans of Japanese descent proved invaluable in the war effort against Japan.
  3. the Citizens United decision in which the Supreme Court gave the management of corporations a “Second vote” in the court of public opinion. The underlying bias was considered axiomatically true: that entities created on paper were no less important than the rights of real people as citizens. The additional underlying bias was that corporations are better than people.
  4. the hundreds of thousands of decisions from thousands of courts that relied on the fictitious power of the court to rewrite legislation that Judge(s) didn’t like. A current perfect example was reading common law (inferior, legally speaking) precedent to override express statutory procedures for the exercise and effect of statutory rescission under the Federal Truth in Lending Act. Over many years and many courts at the trial and appellate level the Judges didn’t like TILA rescission so they changed the wording of the statute to mean that common law procedures and principles apply — thus requiring the homeowner to file suit in order to make rescission effective, and requiring the tender of money or property to even have standing to rescind. This was contrary to the express provisions of the TILA rescission statute. Approximately 8 million+ people were displaced from their homes because of those decisions and the property records of thousands of counties have been forever debauched, likely requiring some legislative action to clear title on some 80+ million transactions involving tens of trillions of dollars. The underlying bias was considered axiomatically true: that the legislature could not have meant that individuals have as much power as big corporation and they should not have such power. Then the short Supreme Court decision from a unanimous court in Jesinoski v Countrywide made the correction, effectively overturning hundreds of thousands of incorrect decisions. A court may not interpret a statute that is clear on its face. A court may not MAKE the law.
  5. the millions of foreclosures that have been allowed on the premise that the “holder” of a note should get the same treatment as a “holder in due course.” More than 16 million people have been displaced from their homes as a result of an underlying bias that was and often remains axiomatically true: decisions in favor of homeowners would give them a free house and decisions that allow foreclosure protect legitimate creditors. Both “axioms” are as completely wrong as the decisions about TILA Rescission.
It is the last item that I address in this article. A holder in due course is allowed to both plead and prove only the elements of Article 3 of the UCC. Article 3 of the UCC states that a party who purchases negotiable paper in good faith without knowledge of the maker’s defenses and before the terms are breached is presumed to be entitled to relief upon making their prima facie case — which are the elements already listed here. Even if there were irregularities or even fraud at the time of the origination of the loan or at a later time but before the HDC purchased the paper, the HDC will get judgment for the relief demanded. A “holder” (on the other hand) comes in many flavors under Article 3 but they all have one thing in common: they are not holders in due course.
The fundamental error of the courts has been to treat the “holder” as a “holder in due course” at the time of trial. It is true that the holder may survive a motion to dismiss merely by alleging that it is a holder — but fundamental error is being committed at trial where the holder must prove its underlying prima facie case. It should be noted that the requirement of consideration is repeated in Article 9 where it states that a security instrument must be purchased by a successor not merely transferred. So regardless of whether one is proceeding under Article 3 or Article 9, no foreclosure can be allowed without paying real money to a party who actually owned the mortgage. The Courts universally have ignored these provisions under the bias that it is axiomatically true that the party seeking to enforce the paper is so sophisticated and trustworthy that their mere request for relief should result in the relief demanded. This bias is “supported” by an additional bias: that failure to enforce such documents would undermine the entire economy of the country — a policy decision that is not within the province of the courts. And deeper still the bias is that it is axiomatically true that the paper would not exist without the actual existence of monetary transactions for origination and transfer of the paper. These “axioms” are not true.
As a result, courts have regularly rubber-stamped the extreme equitable remedy of foreclosure in favor of a party who has no financial interest in the alleged paper, nor any risk of loss or actual loss. The foreclosures are part of a scheme to make money at the expense of the actual people who are losing money. If this was not true, there would have been thousands of instances in which the “holder” presented the money trail that supposedly was the foundation for the paper that was executed and delivered, destroyed or lost. They never do. If they did, the volume of litigated foreclosure cases would drop to a drizzle. And these parties fight successfully to avoid not only the burden of proof but even the ability of the homeowner to inquire (discovery) about the “transactions” about which the paper is referring — either at origination or in purported transfers. Backdating assignments and endorsements would be unnecessary. “Robo-signing” would also be unnecessary. And the constant flux of new servicer and new trustees would also be unnecessary. Many of these events consist of illegal acts that are routinely ignored by the courts for reasons of bias rather than judicial interpretation.
A holder in due course proves their prima facie case by
a) proffering a witness with personal knowledge
b) proffering testimony that allows the commercial paper to be admitted as evidence (the note). This evidence need only be to the effect that the witness, or his company, physically has possession of the original note and presents it in court.
c) proffering testimony and records showing that the paper (the note) was purchased for good and valuable consideration by the party seeking to enforce it. This means showing proof of payment for the paper like a wire transfer receipt or a cancelled check.
d) proffering testimony and records showing that the mortgage, which is not a negotiable instrument, was purchased withe the note.
e) proffering testimony and records that the transactions were real and in good faith
f) proffering testimony that the purchaser of the paper had no knowledge of the maker’s defenses
g) proffering testimony that no default existed at the time of purchase of the paper.
Because of bias, the Courts, just as they did with TILA rescission, have mostly committed fundamental error by allowing to alleged “holders” a lesser standard of proof than the party who is legitimately in a superior position of being a holder in due course. It starts with a correct decision denying the homeowner’s motion to dismiss but ends up in fundamental error when the court “forgets” that the enforcing party has a factual case to prove beyond mere possession of an instrument they say is the original note.
The holder, in contrast to the holder in due course, is not entitled to any such presumptions at trial, except that they hold with rights to enforce. They don’t hold with automatic rights to win the case however.
A holder proves its prima facie case by
a) proffering a witness with personal knowledge
b) proffering testimony and records that allow the commercial paper to be admitted as evidence (the note). This evidence need only be to the effect that the witness, or his company, physically has possession of the original note and presents it in court.
c) proffering testimony and evidence as to the chain of custody of the paper the party seeks to enforce.
d) proffering testimony and records together with proof of payment of the original transaction (a requirement generally ignored by the courts). This means proof that the original party in the “chain” relied upon by the party seeking to enforce actually funded the alleged “loan” with funds of its own or for which it is responsible (e.g., a real warehouse credit arrangements where the originator bears the risk of loss).
e) proffering testimony and records showing that the paper (note) was purchased for good and valuable consideration by the creditor on whose behalf the party is seeking to enforce it. This means showing proof of payment for the paper like a wire transfer receipt or a cancelled check.
f) proffering testimony and records showing that the mortgage was also purchased by the creditor for good and valuable consideration. This means showing proof of payment for the paper like a wire transfer receipt or a cancelled check.
g) proffering testimony and records that the transactions was real and in good faith
h) proffering testimony that no default existed at the time of purchase of the paper. Otherwise, it wouldn’t be commercial paper and the party seeking to enforce would need to allege and prove  its standing and its prima facie case without benefit of the note or mortgage.
It should be added here that the non-judicial foreclosure states essentially make it even easier for an unrelated party to force the sale of property. Those statutory procedures are wrongly applied leaving the burden of proof as to UCC rights to enforce squarely on the homeowner who in most cases is not even a “borrower” in the technical sense. Such states are allowing parties to obtain a forced sale of property in cases where they would not or should not prevail in a judicial foreclosure. The reason is simple: the procedure for realignment of the parties has been ignored. When a homeowner files an action against the “new trustee” (substituted by virtue of the self proclaimed and unverified status of a third party beneficiary under the note and mortgage), the homeowner is somehow seen as the party who must prove that the prima facie case is untrue (giving the holder the rights of a holder in due course); the homeowner is being required to defend a case that was never filed or alleged. Instead of immediately shifting the burden of proof to the only party that says it has the rights and paperwork to justify the forced sale. This is an unconstitutional aberration of the rights of due process. The analogy would be that a defendant accused of murder must prove he did not commit the crime before the State had any burden to accuse the defendant or put on evidence. Realignment of the parties would comply with the constitution without changing the non-judicial statutes. It would require the challenged party to prove it should be allowed to enforce the forced sale of the property. Any other interpretation requires the the homeowner to disprove a case not yet alleged, much less proven in a prima facie case.

CA Lawyer Charles Marshall Return to Talk About Rescission Tonight on Neil Garfield Show 6PM EDT

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California Attorney Charles Marshall Returns for Talk on Rescission and Foreclosure

Charles Marshall returns tonight to delve deeper into the non-judicial cancellation of loans (TILA Rescission). We are getting reports of seminars across the country devoting a large part of their presentation to rescission. The Banks know they are in trouble — rescission levels the playing field and will force the disclosure of the identity of the true creditors. The answer is likely to be they are unknown because investor money was (a) never delivered to the trusts that issued the certificates that investors thought they bought and (b) investors money was never segregated into separate accounts, never subject to the control of the trustee or its trustee, and was all mixed together from thousands of trusts. There is most likely no way to determine whose money was used to fund any loan.

Rescission could clear the path to solutions for homeowners and Federal, State and Local governments deprived of revenue by entities that existed only on paper to obscure the real transactions and avoid taxes, fees and costs.

Musical Chairs: The music is slowing down — HSBC Goes Down in Flames in Florida

For more information please call 954-495-9867 or 520-405-1688.

This is not a legal opinion on any case. Get a lawyer.


see Parent Company Cannot Pretend the Subsidiary Doesn’t Exist

The devil is in the details. The article in the above link is by Brendan Sweeney. His point is that the existence of corporate entities may not be ignored. You would think that any large bank with a huge legal department would understand that, and you would be right. But they have a strategy that is working. Their strategy is to pick an entity that has no connection with the loan transaction, either in origination or in acquisition. This ensures that the records of that entity cannot be used to blow up the failed securitization scheme. And then by using a Robo witness from an entity that is referred to as a servicer, they can be sure that the witness knows nothing about the origination or acquisition of the paperwork and certainly knows nothing about the money trail.

Over the last 10 years the courts have disregarded or overruled the objections and defenses of borrowers that rely on the application of existing law. One of those things has been that the names on the documents don’t match up with the names used in the foreclosure. Most judges, believing that this is an inconsequential error, and also believing that a bank like HSBC would not be attempting to foreclose unless they actually had the right to do so, thus rule against the homeowner who is gratuitously described as “The borrower.” Of course just referring to the homeowner as a borrower prejudges the entire case.

Now the courts are starting to take a closer look at these transactions which appear to be facially valid on paper, but nonetheless do not exist. Simple application of black letter law is all that is needed for a borrower to win in foreclosure, if the judge is willing to apply the law in a proper fashion. In this case the party chosen to be the foreclosing party was HSBC Bank. But the paperwork whole pointed to a subsidiary of HSBC Bank.

The homeowner argued that the subsidiary was not the same as the parent and that therefore the action should be dismissed for lack of jurisdictional standing. HSBC argued that they owned all of the subsidiary and that it was the same thing, knowing full well that there was no legal support for their position. If you form a corporation it creates what is known as a corporate veil. In fact had HSBC Bank been successful in this case it would have provided the groundwork for Discovery and claims against parent companies and affiliated companies — something that none of the securitization players would allow or want.

Court in this case simply decided that simple law should be directly applied. So it wasn’t up to HSBC Bank to initiate a foreclosure action, Based upon the paperwork in the court record, then it should’ve been done in the name of the party to whom the paperwork was assigned or endorsed — and not in the name of any other entity, even if the other entity was the parent company.

The Court stated that Florida law is clear in that “[a] parent corporation and its wholly-owned subsidiary are separate and distinct legal entities. . . . As a separate legal entity, a parent corporation . . . cannot exercise the rights of its subsidiary.” Wright v. JP Morgan Chase Bank, N.A., 169 So. 3d 251 (Fla. 4th DCA 2015) (quoting Am. Int’l Group, Inc. v. Cornerstone Bus., Inc., 872 So. 2d 333, 336 (Fla. 2d DCA 2004)). Despite this, HSBC Bank put forward two documents to establish standing: (1) an Assignment and Assumption Agreement from HSBC Mortgage to HSBC Bank; and (2) a Secretary’s Certificate (dated after the commencement of the action) from HSBC Mortgage indicating that HSBC Bank is the sole shareholder of HSBC Mortgage. The Court concluded that neither document could be utilized to demonstrate that HSBC Bank had standing.

Illinois Indictment for Recording Back-Dated Instrument: The Key to Future Indictments?

It is always the cover-up that gets people in trouble for what they did. It’s time for DOJ and law enforcement across the country to pursue crimes being committed hundreds of times per day in our court system and recording offices and in correspondence between a false servicer and a clueless homeowner who thinks they are bound by an illegal defective loan contract. recording false instruments is a crime.



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

This article is no substitute for a legal opinion from an attorney licensed to practice law in the jurisdiction in which your property is located. Get a lawyer.



CHICAGO—A former clerk for the Cook County Recorder of Deeds accepted a $200 cash bribe in exchange for preparing and agreeing to record a back-dated deed on an Oak Park home, according to a federal indictment announced today.

The indictment was returned Thursday in U.S. District Court in Chicago. It charges Taylor, 59, of Chicago, with one count of mail fraud and two counts of wire fraud. Taylor will be arraigned before U.S. District Judge Sara L. Ellis on Sept. 24, 2015, at 10:00 a.m.

According to the indictment, Taylor offered and agreed to prepare a false quit claim deed that added the purported relative to the deed of the Oak Park property, which was allegedly owned by three deceased individuals. Taylor told the undercover agent that she usually charges $500 to prepare and record the fraudulent documents, but that in this instance she was willing to charge only $200, the indictment states.

This indictment opens up the area of inquiry that homeowners have been raising for years. In many, if not most cases, the assignment of mortgage has been back-dated. That is the equivalent of “uttering a false instrument.” It is a criminal act carrying pretty strong penalties under state law. The ancillary charge is even worse for the perpetrator: using the US Postal Service as part of an illegal scheme (mail fraud) or using the banking system to commit a crime (wire fraud).

There might be many false instruments recorded and there may be more than one recording clerk that allows it and even assists in the process. The judges in foreclosure actions don’t seem to be interested. But it looks like the FBI may have different ideas and perhaps the local prosecutor’s office might also want to look at this. Certainly, considering the scale of the problem (millions of false instruments recorded including assignment and even satisfaction of mortgage), the DOJ and the state Attorney General SHOULD be looking at these crimes as they are having widespread negative effect on the community at large.

Filing a report with law enforcement is the first step. Making sure you have all the paperwork in order so that law enforcement is not required to get documents that you could have otherwise given to them. If the charge is brought there is an argument to say that there is an intervening criminal act involved and that the act of foreclosure is in equity; courts generally do not grant equitable relief to a party with unclean hands — one of the many reasons we have seen the game of musical chairs with Trustees and servicers.

But the real issue is getting convictions. This will inhibit anyone from executing an instrument they know nothing about (robo-signor) at the instruction of people who know the instrument is wrong, back-dated or otherwise false. A good prosecutor will get several indictments and several convictions from each event. In my opinion this criminal behavior is ongoing, not barred by any statute of limitations and if prosecuted, would do more to stabilize the economy than many other policies.

The inquiry could go on to include “modification” where the false “servicer” reports that the investor rejected the modification; in nearly all cases, no presentation of the modification is ever made to the investors. Representing to the Court that the modification was rejected by the investor is perjury, suborning perjury or simply fraudulent misrepresentation to the court by the attorney.

My reason for saying “false servicer” is that in virtually all cases, the “servicer” has no legal authority to act and knows it. The trustee for the alleged REMIC Trust has no authority to act and knows it. The Master Servicer (Investment Bank) sits in the background calling the shots. But none of these entities actually have any relationship to a particular loan — if, as seems to be universally true, there )a) was no consummated loan contract or (b) the “loan” never made it into the REMIC Trust.

Unless the servicer, Trustee or other “representative” has some OTHER valid contract allowing them to service or enforce the alleged “loan documents” they have nothing. If the loan wasn’t purchased by the Trust, the trust doesn’t own it. And the Trust does not own it in most cases. The assignment is false, not supported by consideration (a false claim frequently found in assignments), and is void, if it was not purchased and certainly void if performed after the cutoff date. In virtually all cases the REMIC Trust exists only on paper — never in the real world of the marketplace. A trust without a business, assets, liabilities, income and expenses is no trust at all — it lacks the “res.” That is Trust talk for lack of consideration.

So you can see that in ALL cases, the truth of the document lies in the money trail. AND THAT is what should be relentlessly pursued in discovery and on appeal.

The Real Problem in the Wall Street Crisis

see Anh N. Tran, et al. v. Bank of New York COMMENTARY Mortgage Securitization and Lender’s Ability to Foreclose_SRCH

A fairly well written and well-reasoned article. But absent from the article is the fact that homeowners are not just asserting some technicality. If the Trust actually paid real money for a legally binding loan contract with an enforceable promissory note and enforceable mortgage then it would seem to be the kind of internal affair that some courts have tried to fashion by reading the word “voidable” into a statute that clearly says “void.”

But if there was no transaction and the Trust stands to lose nothing by losing a case in which it had no standing, ab initio, then you would find the same courts — that are looking for a way out of the void transaction — instead accepting the idea that the whole thing was a sham transaction. Yes, the cutoff date is important, but more important, especially in a court of equity, is whether the Trust can prove it paid consideration for the alleged “loan” transaction. It is ONLY THEN that one argue the “free house” myth that the banks have been advancing against the homeowners. The truth is the reverse; if the Trust never paid for the contract, then why should it get the house?

The real problem is that nearly everyone is still drinking Wall Street Kool-Aid. Wells Fargo and the remaining mega banks have successfully convinced almost all the people that there was a lender in these transactions who consented to put their money into a guaranteed losing proposition. Worse, Wells Fargo and the other mega banks have convinced almost everyone that somehow the bank lost money on defaulting loans and the bank lost money on “defective” mortgage backed securities. The banks were not funding or buying mortgages or mortgage backed certificates; they were SELLING them.

As long as the current myth is perpetuated, we will never drill down to the real solutions. We will continue to process and handle solutions to nonexistent problems. Wall Street traders are laughing all the way to their employer banks. They have actually succeeded in making enormous “profits” based upon intentionally induced losses incurred by the use of Other People’s Money. It is the ultimate con game.

These transactions cannot be explained as loans. They can only be explained by theft and dumping some of the proceeds on disadvantaged people, waiting patiently for the rolll-back. The banks made money coming and going while the rest of the world went into a tailspin, deprived of cash liquidity that was siphoned not only out of our economy, but every economy.

Think of it this way: if the “loan” transactions were real, why did the banks need to resort to fabrication, forgery, perjury, robo-signing and robo witnesses? Even defective loan documents can be cured through a variety of legal procedures. Why did the banks need to resort to illegal means?— unless the transactions they were claiming to exist were in fact absent?

Homeowners didn’t receive loans; they received the proceeds of an illegal scheme, and then were prevented from being in communication with the pension funds whose money was stolen. The banks created a vacuum and then stepped in to fill the void with false representations to the U.S. government, to the public, to the investors and to the homeowners. There is no creditor or debtor in these transactions — only victims.

The real solution must include as a core principle that the current group of “servicers” and “trustees” have no standing to service anything nor any right to represent the investors. That right could only have come from a Pooling and Servicing Agreement, which doubles as the Trust instrument for REMIC Trusts that never entered into any transaction in which the Trust acquired or originated a loan. If the transaction with the homeowner did not result in a loan contract that was acquired by the Trust then it follows that the Trust lacks any legal standing to assert any rights.

If such a transaction did not occur then there is no loan, there is no loan in the trust, there is no servicer, and there is no trustee.  Without a disclosed lender there is no loan contract. If the Trust owns nothing, the Trustee of the REMIC Trust has no authority or rights to the so-called loan. And it follows logically that a “substitution of trustee” on a deed of trust cannot be valid because it was authorized by persons who neither owned the loan nor had any rights to represent the victims who are called investors. None of the successors qualify as beneficiaries under a deed of trust except by self-proclamation. And the same logic holds true for successors who try to cast themselves as mortgagees through the use of fabricated illegal documents.

The real solution should be cast as restitution bringing the pension funds and the homeowners together under a new infrastructure that excludes any of the mega banks or their current army of “servicers.” We should not be looking for creditors. We need only find the victims and the perpetrators.


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