“True Lender” Lawsuits Causing Business and Legal Headaches for Banks

hat tip Bill Paatalo

You can’t pick up one end of the stick without picking up the other end as well. Or, if you like, you can’t eat your cake and still have it.

Banks used third party intermediaries all the time, and in non-mortgage loans they are considered as the real lender for purposes of being able to charge the interest rate stated in the consumer loan agreement.

But the situation is quite different and maybe the reverse in most alleged mortgage loans for the past 20 years. Usually a non-bank funding source was using a third party intermediary to originate the loan. Hence the term “originator” which in reality means nothing more than “salesman.”

The actual party funding the loan is not disclosed at all, ever. In most cases it is an investment bank which is different from a commercial bank, but the investment bank is not funding the loan with its own money but rather using money diverted from the advances of investors who thought they were purchasing mortgage backed securities.

In other words the investors think they are getting certificates that are backed by mortgage loans when in fact, in most cases, the certificate holders have no claim on any debt, note or mortgage executed or incurred by a borrower.

Since the loans are mostly originated rather than purchased by a Trust as advertised to investors, the actual ledner is neither disclosed nor shown on any of the closing documents possibly because it is impossible to determine the identity of a “Lender” whose money was  used from an undifferentiated slush fund in which money from investors is intermingled. Information ascertained thus far indicates that the slush fund includes money from the sale of certificates in the name of multiple nonexistent trusts.

Hence the issue of who is the “true lender.” But the Bank’s position in court in unsecured loans may be its undoing when it pretends to litigate a loan in which it was never actually a party to the loan transaction or the loan documents.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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see https://www.americanbanker.com/opinion/a-remedy-for-true-lender-lawsuits-already-exists

So if you think about it, you can explain why most documents in foreclosures are pure fabrications reflecting nonexistent transactions. If you look closely at these documents you will nearly always be able to ascertain a gap which makes the documents NOT FACIALLY VALID. Or, in the alternative, if the documents are facially valid, it is because of forgery, robosigning and fabrication.

Such a gap might be the oft-used “attorney-in-fact” designation. Without reference to a specific power of attorney and a warranty that it has not been revoked and that it covers the execution of the proffered document, the reference to “attorney-in-fact” is meaningless. Hence the document signed by Ocwen as attorney in fact, is really just a signature by Ocwen who is not in the chain of title, making the document facially invalid. In most cases Ocwen (or whoever is the claimed “servicer” is executing as attorney in fact for a real entity (like US Bank) with a nonexistent role — trustee of a nonexistent trust. Remember that US Bank is a real bank but is not acting in a real role. 

By attacking the facial validity of such false documents you are also attacking jurisdiction, which is a deal killer for the banks. Bank lawyers are coming to their own conclusions — independently of their arrogant bank clients and independently of the foreclosure mills who blindly follow whatever instructions they receive electronically. Bank lawyers see trouble on the horizon coming from TILA REscission, and the lack of REAL facial validity of the documents being used in foreclosure which are at odds with the documents used to sell derivatives, synthetic derivatives and hedge products all based upon the same loans.

Here is a quote from the above-referenced article on “true lender lawsuits” brought by borrowers who seek to avoid interest from a non-bank as being  contrary to state law:

As a general rule, the fact that a bank subcontracts marketing, loan servicing or other “ministerial,” or nonessential, lending activities to third-party service providers has no effect on the bank’s ability to export its home state’s interest rate under federal law. To this end, the Bank Service Company Act expressly authorizes banks to utilize the services of third-parties. In short, under the federal banking laws, there is no “tipping point” beyond which a servicer becomes the lender in lieu of the bank — so long as the bank remains the party that is performing the primary, or “non-ministerial,” lending activities laid out in the three-part test, the bank is the only lender.

Yet federal bank agency guidance is silent regarding true lender risk, despite the growing number of states in which such lawsuits have arisen. The FDIC published draft third-party lending guidance in July 2016 that had the potential to provide some clarity, but it is still pending. Moreover, the guidance merely observes in a footnote that “courts are divided on whether third-parties may avail themselves of such preemption.”

As to whether a bank’s status as the lender could be undermined by its use of agents, the guidance says nothing. This silence is problematic because, as things stand, one could evaluate the facts of the same loan program and reach opposite conclusions with respect to the program’s status under usury laws depending on whether federal interest rate preemption rules or judge-made, state true lender rules are applied.

MERS Is NOTHING — The Correct Translation of “MIN”

Without a contract in writing executed with the formalities required for transfer of interests in real property, it is highly probable that any instrument executed on behalf of MERS means nothing without the necessity of drilling into the authority or knowledge of the signor. In fact, it might just be that the execution of an assignment might be the utterance of a false instrument for purposes of recording, which in and of itself constitutes illegal activity.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
==========================
Upon close inspection, investigation and research of hundreds of cases we have found no evidence that MERS ever enters into any contract for agency or anything else with originators who are not lenders. So we conclude that in cases where the originator is named on the note as Payee and on the Mortgage as Mortgagee or on the Deed of Trust as beneficiary, no such written contract exists and no correspondence or other communication exists between the originator and MERS.
*
The current consensus is that MERS is a naked nominee, something I have repeated myself. But that appears to be true only in cases where the originator is a member of MERS and has therefore entered into an agency agreement with MERS.
*
Entities like Broker One and American Brokers Conduit, whose name tells the whole story, are not likely to have had any contract, email, correspondence directly with MERS and are probably not party to any agreement in which the originator, if it exists at all, has agreed to let MERS be its agent and if so, under what conditions and for how long.
*
I think the mistake we might have all made is in accepting the implied agency contract inferred from the face of the Mortgage or Deed of Trust. In many if not most courts the assignment by MERS of a Mortgage or Beneficial interest in a Deed of Trust is seen as the act of a “disclosed” naked nominee.
*
First, basic law dictates that any contract in which the transfer of title to real property is involved must be written not oral, inferred or implied. Second, each state varies but all require the recording of the instrument.
*
Third, there was no disclosure prior to closing which violates TILA disclosure requirements. This raises possibilities  of claims in a lawsuit by the homeowner or affirmative defenses of a homeowner if they are sued. As affirmative defenses they would claims of recoupment.
*
Nobody tells the prospective borrower that when they sign the Mortgage or Deed of Trust they will be handing over an interest in their new or existing home to an entity that might serve the interests of just anyone. But, in fact, that is what is happening which means that on the face of the Deed of Trust or Mortgage, the originating parties are violating the provisions of TILA that make table funded loans against public policy. And as any 1st year law student will tell you any contract that violates public policy is probably void.
*
At closing, if the borrowers are reading at all, MERS doesn’t show up until the day of closing and it is never pointed out by closing agents, originators or anyone else acting as mortgage broker or lender. Nor is the written agreement appointing MERS as “nominee” appear anywhere ever.
*
If the appointment of MERS is void it might void the Mortgage or Deed of Trust. Or, it might be surplusage which is more likely. That means the mention of MERS means nothing.
*
Hence the assignment of the Mortgage or Deed of Trust would be required to be executed by the named lender, who in turn probably could not assign the mortgage because at the time they are asked to sign such an instrument they (a) don’t exist and/or (b) don’t own the debt and probably never did. As such they would be uttering a false instrument for recording which amounts to two illegal acts probably constituting crimes.
*
PRACTICE NOTE: ASSIGNMENT OF A MORTGAGE WITHOUT TRANSFER OF THE DEBT IS A NULLITY. Lawyers for the foreclosure mills are often using MERS assignments as a substitute for transfer of the debt.

Tonight! Steamrolling Using Judicial Notice 6PM EST

Thursdays LIVE! Click in to the Neil Garfield Show

Tonight’s Show Hosted by Charles Marshall, Esq.

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

 

One of the things that irritates most homeowners and lawyers for foreclosure defense is how “evidence” is admitted that “proves” a fact that doesn’t exist. One of the tools for doing that is Judicial Notice or as we call it, “JN.” JN is used for documents that are inherently credible — not some document created by one of the litigants and uploaded to a quasi government site without any validation by any government entity. They are inherently credible because they were prepared by or taken from the records of a credible source — a party with not relationship to the parties in litigation and no stake in the outcome.

If you read the statute in your state you will see plenty of reasons why most documents proffered as being subject to Judicial Notice (JN) should be rejected as evidence without proper foundation and specific foundation for each issue addressed in the document. Foundation means testimony and maybe other documents for which there is a witness to provide the foundation.

In truth when the lawyers for the fictional claimant does this they are opening up the door as well as virtually admitting that they can’t prove the false fact without JN. By aggressively preserving and invoking objections and using motions to strike and motions in limine, as well as effective cross-examination, the truth of the matter asserted by the document can be eliminated.

Institutional litigants are misusing the court system throughout the dozens of state and Federal jurisdictions to get into evidence matters which are and should be barred from evidence or at least subject to dispute, and about which these same litigants often have no or little independent evidentiary support. One such major vehicle for advancing this practice is the use of Requests for Judicial Notice (RJN).

Documents uploaded to SEC.gov, for example, are proffered as subject to judicial notice, even though the SEC website acts merely as a platform for publication, and not a proper registry, and neither monitors nor validates any documents placed on their site.

In California, StorMedia,, Inc. v. Superior Court (1999) 20 Cal.4th 449, 457, fn. 9, has long controlled among other Cal cases RJNs in California litigation.  This case holds that “When judicial notice is taken of a document…the truthfulness and proper interpretation of the document are disputable.”

Yet it is very common in California foreclosure litigation for courts to treat RJNs as if they do establish the truth of the matter asserted within the documents. This enables institutional defendants in Cal. borrower foreclosure litigation, to point as evidence to Plaintiff’s presenting recorded documents only to dispute their content, as if the documents so presented and disputed are not subject to dispute, because of the taking of judicial notice.

Solving the Puzzle: Settlements with Homeowners Are Rising

Hat tip Michael Bazemore

It’s not easy to see but if you look at the court docket after a ruling against the parties designated as “foreclosing parties” you can see that these cases are often dismissed with reference to an agreement or settlement between the parties.

The typical pleading asking the court to dismiss the case will read as follows:

IT IS HEREBY STIPULATED by and between Plaintiff X and Defendant Y that pursuant to [Federal][State] Rule of Civil Procedure (41(a)(2) [Federal] this action and all causes of action contained therein shall be dismissed with prejudice.

It is further Stipulated by and between Plaintiff and Defendant that each party shall bear their own costs and attorney fees associated with this action.

The parties are submitting a proposed order of dismissal concurrently with this Stipulation.

I took that wording from a case involving a homeowner asserting rights, among other things, that focussed on TILA Rescission. We all know that the consensus is that no court will rule in favor of homeowners. But here you have a settlement that the bank considered too risky to bet on — a case that could have served as precedent for the proposition that there is no note, there is no mortgage and the debt that could have been pursued under 15 USC §1635 (TILA Rescission) is now barred by Statute of Limitations (often stated as “SOT).

I am seeing more of these of late indicating that homeowners who fight aggressively are winning their case and forcing the banks to settle.

PRACTICE NOTE: I think it is error to predicate your thinking about settlement value on the value of the case as it is conventionally determined. The banks are not evaluating cases for settlement based upon what a particular homeowner might gain from a particular verdict. They are evaluating the case based upon potential exposure of the entire fraudulent scheme of foreclosure and the liability associated with false claims of securitization, dubbed “securitization fail” by Adam Levitin.

The threshold question of whether they will settle at all is answered by their evaluation of exposure. The amount of money damages paid is based upon the likely verdict in the case. But it remains to be seen as to whether those with an appetite for risk might bargain based upon the exposure in all cases rather than the risk of a negative verdict in this one particular case.

The index for such valuation could be based upon the amount of gain realized by the investment bank who posed as underwriter and perhaps Master Servicer of a nonexistent trust. Through sales and trading of derivatives based upon the signature of the borrower the investment bank collects as much as 40 times the principal due on the note without any allocation to the benefit of the investors or the borrowers. My opinion is that both investors and borrowers should share in the bounty of $10 million taken in on a $250,000 loan. My opinion has always been that the notion of a default or even a loss should be off the table. The question should not be one of foreclosure but of disgorgement of ill-gotten gains.

Litigating foreclosure defense in this context requires the mindset of a solving a puzzle. Like any word puzzle or video game you need to stare at it for a while. At first you see nothing there. It’s like a painting that upon longer viewing reveals a face. After awhile of looking at the names of parties or their purported roles your mind will kick in and you will see the gaps in their asserted roles.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
==========================

 

Example of Homeowner Winning in Sarasota Florida

Ryan Torrens, Esq., a Florida attorney who apparently does his homework, posted this article on his website.

see Summary Judgment for Homeowner – Don’t give Up

For those of you in foreclosure who may wonder if you have any rights, the answer is yes, you do! I recently won a summary judgment against a foreclosing bank in a foreclosure case in Sarasota, Florida.

The bank was attempting to foreclose on a loan modification, which is not a negotiable instrument. [e.s.] See Bank of New York Mellon v. Garcia, 2018 WL 3286488 (Fla. 2d DCA 2018). The bank contended that it had standing to foreclose on the loan modification by an assignment of mortgage. However, the assignment of mortgage did not transfer the note, but only the mortgage. An assignment of mortgage that only assigns the note, not the mortgage, does not convey standing to the Plaintiff. See Peters v. Bank of New York Mellon, 227 So. 3d 175 (Fla. 2d DCA 2017).

Due to this defect, I moved for summary judgment on behalf of the homeowner. The Court agreed that the bank could not prove standing in the case and that the homeowner was entitled to summary judgment as a matter of law. Accordingly, the Court entered this summary judgment in favor of my client.

If you are being foreclosed on, don’t give up. Stand up and fight for your family and your home. The banks are used to getting away with everything, but you have rights too. This case is just one example of a homeowner who stood up and fought, and won!

Thanks for reading.

Best,

Ryan Torrens

Foreclosure Defense Attorney

EDITOR’S NOTE: The only thing I would add, for clarification, is that the reason for the finding of lack of standing is that an assignment of mortgage without the debt is a nullity.

The assignment or indorsement of the note to the assignee of the mortgage is a transfer of “title” to the debt on its face.

Hence the presumption that is used, sometimes erroneously, that the claimant is the owner of the debt, note and mortgage or the authorized agent of such a party.

But it is often true that neither the assignor of the mortgage nor the previous “holder” of the note actually owned the debt nor were they authorized representatives of any party who could claim ownership of the debt, note or mortgage.  Accordingly, no effective transfer occurred as to the debt, note  or mortgage.

The fact that all this happened after a modification is worthy of mention. Most modification agreements contain intentional obfuscation of the true parties in interest and do not qualify as negotiable instruments nor do they effectively try to transfer anything other than the mortgage. Without a separate instrument transferring the debt from an owner of the debt (or an authorized agent of the owner of the debt) the modification  does NOT create standing.

The reason why the modification agreement does not make any express reference to the debt or the note is that doing so would be a direct or implied representation of ownership of the debt — a statement that would be patently untrue in most cases.

Distilling the 20 Points of TILA Rescission: 9th Circuit Allows “Claim” for Rescission Under WA Statute of Limitations

I have distilled the legal points and procedure of TILA Rescission down to their essentials and specifics as you can see below. In the case presented the 9th Circuit ruled in favor of the homeowner but in so doing continued to violate the law of the land enunciated by the Supreme Court of the United States and Congress.

Yes the homeowner should win but no, the homeowner should not be treated as having any burden of proof as to effectiveness of the TILA Rescission because the TILA Rescission statute is a self-executing statute that is effective by operation of law. It is not and never was a claim.

Astonishing. The 9th Circuit is drilling down on the premise that TILA Rescission is a claim rather than a self executing statutory event. This decision, favorable to the homeowner, not only engraves the “claim” theory in concrete, it applies a 6 year statute of limitations in Washington State.

The fact that the statute says the rescission is effective “by operation of law” is once again ignored. This may cause the Supreme Court of the United States (SCOTUS) to finally accept certiorari in cases involving TILA Rescission and to once again (See Jesinoski v Countrywide 135 S. Ct. 790, 792 (2015) scold all the lower courts for their excess in reading into the statute what is either not there at all or which is in direct contradiction to what the TILA rescission statute says. 15 U.S.C. §1635(f).

The message from SCOTUS should be clear: Just because you don’t like the result doesn’t mean you can reinvent the statute to say what you think it should have said. Both the trial court and the 9th Circuit were massively wrong, and eventually that will be made clear — but not until considerably more damage is done to American homeowners, the real estate market, our society, and the financial system generally. If you really want to see a correction to bad bank behavior this is the tool.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
==========================

see 9th cir hoang v bank of america 17-35993

Had they accepted the simple wording of the statute and the wording of the SCOTUS decision in Jesinoski, the decision of the 9th Circuit would have been on target. As it is, they have muddied the waters even further.

They continue to regard TILA Rescission as a claim, thus applying the statute of limitations and avoiding the distasteful issues (for the courts) that would be raised by recognizing what SCOTUS and the TILA Rescission statute have already said: the TILA Rescission statute is procedural.

Upon sending the required notice the claim of the creditor is changed from the note and mortgage to a claim under the statute. The note and mortgage vanish just like the debt vanishes and when the note is executed (assuming the Payee is the same party to whom the debt is owed). The purpose both the TILA Rescission statute and the merger doctrine is to to bar two claims on the same debt.

The problem that the courts have manufactured is based upon the premise of “I don’t’ like that statute.” But if the statute is to be changed it MUST be done ONLY by Congress. SCOTUS (Jesinoski) has already pronounced the TILA Rescission statute clear and unambiguous permitting no interpretation based upon any perceived “ambiguity.” The courts hands are legally tied but they continue to operate in derogation of the statute and SCOTUS.

Here is the ONLY correct application of the statute — according to 15 USC §1635 and SCOTUS in Jesinoski v Countrywide 135 S. Ct. 790, 792 (2015):

  1. Upon sending a clear notice of a desire or intent to cancel the loan contract, and either its actual or presumed receipt (i.e. US Mail) by the owner of the debt or the owner’s authorized representative (or agent with apparent authority) the loan contract is canceled “by operation of law”.
  2. This renders the note and mortgage void. There is no “but”.
  3. The statute substitutes a different creditor claim for what was the note and mortgage, to wit:  a statutory obligation to pay the debt after the owner complies with three conditions: (a) payment of money to the borrower (b) cancellation of note and sending it to borrower and (c) satisfaction of mortgage filed in the county records.
  4. The three duties are conditions precedent to demanding tender of property or money to pay off the debt.
  5. The fact that the three duties MAY be subject to an enforcement action by the borrower does nothing to change the effect of the cancelation of the loan contract by notice of TILA Rescission.
  6. There is no claim for enforcement of the three duties if the TILA statute of limitations has run.
  7. There is no claim for TILA Rescission. Either it was mailed or it wasn’t. There is no case or prima facie case except in enforcement of the three duties.
  8. There is no lawsuit required or even applicable to demand a court declare that the Rescission was effective. It is already effective simply by mailing. It already happened by operation of law. All decisions by all courts to the contrary are wrong. SCOTUS already said that.
  9. If the owner of the debt fails to either sue to vacate the rescission and/or follow the statutory duties, the statute of limitations under TILA is running and they may lose their right to demand payment of the debt completely. Once the TILA SOL runs out the right to collect the debt is dead after TILA Rescission.
  10. If the borrower fails to sue to enforce the three creditor duties, he/she is gambling on the TILA SOL cutting off the debt. The same statute of limitations cuts off the right of the borrower to sue based upon TILA claims.
  11. If the borrower does sue to enforce the three statutory Rescission duties the ONLY thing he/she should be claiming is that the statutory duties exist by virtue of 15 USC §1735 and that the Defendants failed to comply. Such an action could be after the SOL has run out seeking a declaration that the debt is dead (depending upon how SOL is treated).
  12. Neither the borrower nor the owner of the debt can reverse the effect of the TILA Rescission law. It is effective by operation of law and self-executing.
  13. Whether the notice is sent within 3 years or outside of the 3 years could be grounds to vacate the rescission which was already effective by operation of law. But that creditor lawsuit must be brought within the 20 days due for compliance with the three statutory duties. Minutes of the congressional discussion on this statute are quite clear — there should be no possibility at all for the presumed creditor to stonewall the borrower. SCOTUS said as much in Jesinoski, when it declared that no further action is required from the borrower other than the sending of the notice.
  14. The notice of rescission is facially valid if it declares the intention or desire to cancel the loan contract. There are dozens of cases saying exactly that. But it might be facially invalid if it expressly states that the contract it seeks to eliminate is outside of the three year limitation of “Consummation” (otherwise the 3 year limitation requires parole or extrinsic facts and requires finding of facts). This admission on the face of the instrument used to declare TILA Rescission MIGHT enable the presumed creditor to ignore it and ask the court to ignore it, at their own peril.
  15. If the creditor’s claim is that the rescission should be vacated (especially if it is recorded) or ignored because of the three year limitation or for any other reason, that is a lawsuit or an affirmative defense requiring allegation and proof of facts that are parole or extrinsic to the fact of the notice of TILA Rescission.
  16. There is no statute of limitation on anything that is effective by operation of law. It is an event, not a claim. Hence notice of TILA Rescission cannot be subject to interpretation as a claim and therefore cannot be subject to any statute of limitations.
  17. Thus all claims upon which courts took action or are taking action or will take any action based upon a loan contract that was canceled are VOID and completely undermine judicial standing and jurisdiction of the court. Subject matter jurisdiction is absent because the loan contract no longer exists. The creditor may either sue to revoke the rescission and cancel the instrument of rescission if recorded or make a claim based upon the statutory debt created by 15 USC §1635.
  18. The ONLY thing that could make void “sales” (of title to real property) final is Adverse Possession which typically takes around 20 years to establish. Check state statutes. The elements of adverse possession include but are not limited to continuous, open, notorious, peaceful, hostile (to actual owner), actual, visible, exclusive, and adverse. This is the “reset” that I forecasted 12 years ago. State legislatures are being lobbied to make such sales final even though they are legally void.
  19. All attorneys for the financial industry are in agreement with this analysis. The industry rejects the analysis because they correctly believe that they can persuade judges to act and rule opposite to the express provisions of the statute. So far they are right — except for the the  Supreme Court of the United States who is the sole source of a final definition of the law in this country.
  20. Anyone who seeks a change from the the current statute or the Supreme Court decision must do so through efforts to have Congress change the law.  If the rule of law is to prevail, the above procedural analysis must be followed in every instance.

SCOTUS Oral Argument Illuminates the Main Question in Foreclosures: What are the roles of the parties?

Two days ago in the case of Obudskey v McCarthy and Holthus LLP the  Supreme Court of the United States (SCOTUS) heard oral argument on issues relating to the application of the Federal Debt Collection Procedures Act (FDCPA).

The argument for including the law firm pursuing foreclosure was presented by DANIEL L. GEYSER, Esq. in a case that started in Texas.

In the course of reading the oral argument and comments by the court it is clear that everyone is struggling with defining the roles of each of the players in foreclosure.  The fact that such a struggle exists is a testament to the credibility of arguments raised by homeowners that claimants are misrepresenting their roles and capacity to pursue foreclosure or at least on dubious ground for claiming any rights in relation to the subject debt. While the SCOTUS ruling could go any number of ways, the fact that they took the case for review combined with the content of the oral argument, shows that the roles of all the parties who line up to pursue foreclosure are obscured.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
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see scotus oral argument on fdcpa 17-1307_apl1

Hat tip to Charles Cox

Claims under the FDCPA are very interesting because in order to determine of the party that is acting is a debt collector you must first determine if they are a creditor and then determine whether their activities fall within the FDCPA. By alleging they are a debt collector you are implicitly stating that they are not a creditor — i.e. an owner of the debt seeking to collect it.

This opens discovery on the issue of who owns the debt and wether the party demanding payment is representing the owner of the debt . We know they are not representing the owner of the debt (there probably is no “owner of the debt”) and they are not owners of the debt — unless a presumption is made that possession of the original note raises the presumption of transfer of the debt.

That in turn raises the question of whether the note was delivered by someone who owned the debt.

And THAT is at the heart of the game for the banks. They lead foreclosure defense counsel, homeowners and the courts into believing that the existence of the chain of paper is sufficient to raise a virtually irrebuttable presumption that what is written in the chain of paper is true. It is not true. So the entire tsunami of foreclosures was based upon the premise of the banks that it is true because they say it is true.

This is accepted by courts because they automatically accept representations of bank counsel as credible —- and automatically reject assertions of foreclosure defense counsel —- as either not credible or just technical ways to either delay the inevitable (which is a prejudgment) or get out of a legitimate debt (making the frequently erroneous assumption that the debt is legitimate) without regard to whether it is owed to the claimant who is named in the foreclosure proceedings — or whether the claimant has a legal relationship (privity) with the owner of the debt.

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