Why Fabrications? Why Forgeries?

In an increasing number of foreclosure cases, homeowners are going head to head with the lawyers who file claims on behalf of entities on the basis of fabricated and/or forged instruments that in many cases were also recorded in county records. Lawyers like Dan Khwaja in Illinois are getting clearer and clearer about it. They hire experts who understand exactly how the notes are mechanically created and the endorsements are not real signatures.

The key question is why would the notes have been fabricated and forged when there actually was a closing and a note was actually signed? We’re talking about the financial industry whose reputation depends upon safeguarding all signed documents. If they didn’t safeguard the documents and instead destroyed them or “lost” them, why was that allowed to happen?

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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.
==========================

So we have a case in Illinois where lawyers filed a judicial foreclosure on behalf of Bank of New York/Mellon (BONY) as trustee (i.e. representative of) “holders” of certificates. The lawyers attach a copy of a note and indorsements. Khwaja hired an expert who found quite definitively that the note and the endorsements were all fabricated (forged). Khwaja has filed a motion for summary judgment.

Here is my analysis:

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The lawyers who filed the claim have a serious problem. If they cannot convince the judge that they have no need to respond they are dead in the water. They must either pay someone to commit perjury or seek to amend with an actual original note. In view of prior studies that show that most (or at least half) of all notes were “lost or destroyed” immediately following the “closing” combined with your expert on hand, coming up with the original note is not an option.
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And that brings us to the question of “why?” If there really was a closing at which the borrower signed documents, why do they need fabricated documents? To me, the answer is simple. In order to sell the same loan multiple times they needed to convert from actual to imaged documents. The actual one had to disappear. And the handful of megabanks who had a virtual monopoly on tens of millions of mortgage transactions made it “custom and practice” to use images rather than actual documents. [This practice has spilled over to property sale contracts where neither party gets an original].
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And we have the additional issue which is presented by the foreclosure complaint. It says that BONY appears on behalf of the holders of certificates. The simple question is “so what?”
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Being holders of certificates means nothing. It leaves out any assertion that the holders of the certificates are owners of the certificates, or anything that might identify those “holders”. So the proceeds of foreclosure could then go to whoever was chosen by the parties actually pulling the strings.
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They are asking the court to fill in the blanks. They want the court to draw an inference without ever stating the fact to be inferred, to wit: the holders of the certificates are owners of the certificates who are therefore owners of the debt, note and mortgage. There simply is no such allegation nor any exhibit indicating that is true. The reason is that it is not true.
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So who is really the Plaintiff? Supposedly not BONY who is appearing in a representative capacity.
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If “sanctions” were applied against the “Plaintiff” BONY would claim it is not the actual party and that the unidentified “holders” of certificates are the proper party or perhaps an implied trust.
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So then is it the certificate holders, represented by BONY? But they don’t have any right, title or interest to the subject debt, note or mortgage. The prospectus and certificate indentures make that abundantly clear in most cases.
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Examining what happens after a foreclosure is “successful” provides clues. Neither BONY nor any certificate holder ever receives the actual money from the proceeds of the purported sale of the property.
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So who does?
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As the one party with actual control over the loan receivable, the investment bank that created the “securitization” scheme is the only party that comes close to being an actual creditor. But here is their problem: that loan receivable has been sold multiple times. This not only leaves them with no claim to the debt, but a surplus of funds over and above the amount due on what was the loan receivable. It’s basic accounting and bookkeeping. And if that were not true the banks would not be doing it.
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So in the real world it is the investment bank that gets the proceeds of a foreclosure sale. But they do it as the “Master Servicer” of an implied (and nonexistent) trust. The money simply disappears.
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In order to get away with selling the debt multiple times they had to make each sale a non recourse sale. And they did that. So the buyers of the debt, note and mortgage had no actual legal title to the debt, note and mortgage and no recourse to the borrower to collect on the unpaid debt.
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THAT leaves NOBODY as owner of a debt that has probably been extinguished and reveals the paper issued to buyers/investors as essentially the issuance of cash equivalent instruments (also known as currency). And THAT is the reason the banks, after  two decades of this nonsense, have yet to come to court and simply say “here is proof of our funding of the origination or purchase of the debt, note and mortgage.”
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If they did, they would be admitting to lying in millions of foreclosure cases over at least a 15 year period of time. Their scheme effectively concentrated the risk of loss on investors and borrowers while literally retaining all the benefits of supposed loan transactions for the sole benefit of the intermediaries, who then leveraged loans multiple times.
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This translates as follows: the money taken from investors is an unsecured liability of the investment bank. To be sure that has a value — but not a value derived from loans to homeowners. THAT value was taken by the investment bank who cashed in on it already.
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Note: For certain second tier investment bankers there were transition periods in which they were at actual risk. Examples include Lehman and Bear Stearns. But the top tier was able to sell forward on the certificates and never commit a single dime of their own money into the securitization scheme even in transition. But by pointing to Lehman and Bear Stearns they were able to convince policy makers that they were in the same position. This produced the “bailout” which was essentially the payment of even more money for losses that did not exist.
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In an odd twist of irony, Wells Fargo was the only party (2009) that admitted to no loss but was forced to take bailout money so that other “less fortunate” parties would not be singled out as weak institutions.
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In truth the AIG bailout and similar bailouts were merely payments of extra profits to Goldman Sachs and some other players, leaving investors and borrowers stranded with nearly worthless investments and collapsed markets for both homes, whose prices had been inflated by over 100% over value, and a nonexistent market for the bogus certificates that the Fed chose to revive by its purchasing program of “mortgage bonds” that were neither bonds nor backed by mortgages.
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Despite the complexity of all this, on a certain level most people understand that the banks caused the misery of the meltdown and profited from it.  They also understand that it is still happening. The failure of government to deal appropriately with the existential threat posed by the megabanks clearly played into and perhaps caused the social unrest around the world in the form of “populist” movements. And until governments deal with this issue head-on, people will be looking for political candidates who show that they are willing to take a wrecking ball to the banks and anyone who is protecting them.
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In the meanwhile, an increasing number of homeowners (again) are walking away from homes in the mistaken belief that they have an unpaid debt to the party named as the claimant against them.

Facially Invalid Recorded Documents

The view proffered by the banks would require them to accept declarations of fact from potential borrowers without any indicia of truth or reliability. It is opposite to the manner in which they do business. Currently they have it both ways, to wit: for purposes of borrowing you must submit documents that are facially valid without reference to external evidence and which can be easily confirmed but for purposes of foreclosure, none of those conditions apply. 

As part of the the scheme of “securitization fail” (see Adam Levitin) banks, servicers and third party vendors have been creating, fabricating and executing documents that are not facially valid nor do they comply with industry standards or even common sense. But once recorded judges take them “at face value” by assuming that somehow the document makes sense, when it clearly does not comport with law or logic. Defenders of foreclosure act at their peril when they fail to attack the facial validity of the documents upon which the foreclosure claims rely.

In a recent article written by Dale Whitman for the ABA he states the following “Conclusion. The recording system is archaic and fraught with the potential for yielding wrong conclusions. Conversion by many recording jurisdictions to computer-based electronic indexes has been helpful, but most of the legally problematic flaws continue to exist. Title insurance has been invaluable in making the weight of the recording system bearable, but it adds a further layer of complexity as buyers try to understand the limitations of their title policies. It seems unlikely that major changes will occur, so it is essential that real estate lawyers understand the peculiarities and limitations of our present system.” (e.s.)

As he points out recording is not required to make a document valid, but once it is recorded the document takes on a life of its own. It also presents numerous trapdoors and pitfalls that should be analyzed before answering the initiation of a foreclosure proceeding with any action on behalf of the homeowner including the motion to dismiss in judicial states, the answer, affirmative defenses and the Petition for TRO or lawsuit for wrongful foreclosure.

see what you didn_t know about recording acts_whitman (2).authcheckdam

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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.
==========================

Common sense tells you that for a document to mean anything it must say enough that a reasonable person would be able to confidently draw meaning from it. Analyzing the facial validity of documents used in foreclosure reveals a pattern of misrepresenting the facial validity and misdirecting judges into NOT looking closely at the documents from which they are making assumptions and thence to legal conclusions that bind homeowners into proving matters beyond their control.

I proffer here an analysis that I just completed (our TERA report) as an example.

  1. We have already seen documentary proof that BONY Mellon does not receive the proceeds of the sale of property subject to the power of sale in a nonjudicial state or the forced sale in a judicial state. There are many reasons for this.
  2. Analysis of the facial validity of the use of various names and descriptions reveals the absence of an actual party, unless extrinsic “parole) evidence is added. Hence the documents upon which the above language relies does not support facial validity.
  3. BONY Mellon is said to be the “successor to JP Morgan Chase.” It is not and never has been a successor to JPMorgan Chase. There is nothing in the public domain to support that assertion. There is no instrument attached and no description of any transaction in which, as to this subject property and loan, we can ascertain how BONY Mellon became the successor to JPM Morgan Chase. Hence the documents in which BONY Mellon appears are not facially valid and are defective in terms of proof of title. This could be corrected by affidavit or any process that is allowed in the state where the property is located but it hasn’t been done on record, and there is no evidence to suggest that it has been done but is not recorded. The usual and acceptable manner of phrasing such a succession, if it were true, would be “as successor to JP Morgan Chase pursuant to that certain agreement of transfer by and between JPMorgan Chase (and /or other parties) and BONY Mellon dated July 6, 200X.” The absence of such description leaves the reader to pursue extrinsic or parole evidence to determine if the succession is documented and if so whether that documentation is facially valid. This is all absent.
  4. The succession suggests that it is in the role of trustee. There is no instrument attached and no description of any transaction in which, as to this subject property and loan, we can ascertain how BONY Mellon became the successor Trustee to JPM Morgan Chase. Hence the documents in which BONY Mellon appears as trustee are not facially valid and are defective in terms of proof of title. This could be corrected by affidavit or any process that is allowed in the state where the property is located but it hasn’t been done on record, and there is no evidence to suggest that it has been done but is not recorded. The usual and acceptable manner of phrasing such a succession, if it were true, would be “as successor to JP Morgan Chase, trustee pursuant to that certain agreement of transfer by and between JPMorgan Chase (and /or other parties) and BONY Mellon dated July 6, 200X.” The absence of such description leaves the reader to pursue extrinsic or parole evidence to determine if the succession is documented and if so whether the documentation is facially valid. This is all absent. The absence of a description of a specific trust and trust instrument is yet another factor that renders the instrument facially invalid, but theoretically correctible.
  5. This leads to a further question of extrinsic evidence being required. Other than by the use of parole evidence (outside the information contained on the document itself) the reader cannot ascertain the existence or description of a specific trust organized and existing under the laws of any jurisdiction. In addition, the issue of a transfer or change of trustees of a trust, if one can be found, is not supported by language such as “pursuant to the provisions of the trust agreement dated the 3rd day of May, 200Y in which the trust named ‘Structured Asset Mortgage Investment II, Inc. Bear Stearns ALT-A Trust’ was created under the laws of the State of New York”. Without such reference the facial validity of the instruments remains invalid although theoretically correctible. Without the knowledge of the legal existence of the trust being confirmable by public record, there is no support for the implied trust. Without support for the implied trust and the trust agreement creating it, there is no obvious support for how trustees could exist or be changed. Without support on the face of the instruments for how trustees of a trust could be changed, the description of the change of trustees is merely a declaration that is not supported by anything on the face of the document.
  6. JPMorgan is implied to have been the trustee of the potentially nonexistent trust. Once again the implied assertion leaves the reader to determine if the trust was created pursuant to the laws of any jurisdiction, and if JPMorgan was named as trustee for the trust.
  7. In either event both BONY Mellon and JPMorgan are described to be acting in a representative capacity on behalf of “holders… of pass through certificates” and not as “trustees” of any “trust.” The certificates are identified as Mortgage Pass Through Certificates Series 2004-12. The reference to being a “trustee” and the implied representation of the holders of certificates would be acceptable if the “holders” were described as beneficiaries. The extrinsic evidence often shows that such holders are not beneficiaries. This leads to the question of how and why there is representation of the holders, apart from the alleged trust, Is the representation implied from the trust agreement that is not described? Is the representation the result of some other trust or agency agreement? It is not possible to ascertain the answers to these vital questions without resort to extrinsic evidence, thus making the instruments relying upon such language, facially invalid.

Every state has statutory requirements for an instrument to be facially valid. A deed between Donald Duck and Mickey Mouse as Grantor and Grantee respectively would not be facially valid because both the grantor nor the grantee are fictitious names of cartoon characters and unless used as a egla fictitious name for an actual entity doing business under that name the document could not be corrected to become a valid document suitable for recording.

Yet county recorders are allowing the recordation of millions of documents across the country with exactly that defect. By allowing such documents to be recorded they are lending support to the legal presumption that Donald and Mickey are real people with rights to transfer interests in real property and even foreclose on real property. At the end of the chain of written documents someone holds paper that is recorded but based upon a chain of title with two large gaps in it — Donald and Mickey, and by the time the foreclosure occurs probably Minnie Mouse as well (or maybe Fannie or Freddie whose names are being used, just like the “REMIC trustees”, but who have no part in any transaction involving the subject loan).

Back to Real Property 101.

  1. Who is the grantor? If that cannot be readily determined from the face of the instrument the instrument is facially invalid.
  2. Who is the grantee? If that cannot be readily determined from the face of the instrument the instrument is facially invalid.
  3. What is the effective date of transfer? If that cannot be readily determined from the face of the instrument the instrument is facially invalid.
  4. What is being transferred? If that cannot be readily determined from the face of the instrument the instrument is facially invalid — or, in the case of a mortgage or beneficial interest in a deed of trust if the instrument declares a transfer but without the underlying debt, the instrument is facially invalid and unenforceable both because of state statutes regarding facial validity and the UCC Article 9 requiring value to be paid (see above linked article).
  5. What is the legal description of the property affected? If that cannot be readily determined from the face of the instrument the instrument is facially invalid.

An instrument that is not facially valid should be returned by the recording office with notes specifying what needs to be corrected. This vital step is being overlooked on all documents relating to foreclosures. If rules, laws and procedures were followed with regard to such documents there would not be any foreclosure or, if the corrections could actually be made, there would be no defense. It is in the valley between those two notions that all foreclosures based on “successors” are based.

By overlooking the obvious lack of clarity on the face of the documents county recorders keep creating a vacuum that the banks are only too happy to fill with MERS — an IT platform that is the opposite of tamper-proof allowing virtually anyone with a login and password to create the illusion of authority where none existed before. Hence the use of MERS and other systems to give depth to the illusion of facial validity.

The conclusion is that documents containing the language described above should not have been recorded.  The county recorder should have rejected such documents as being facially invalid, requiring additional documents to be attached, if they existed.

Such language is a substantial deviation from custom and practice as well as common sense and logic.  Custom and practice of the same banks that are listed in the language described above requires that they not accept such language without the additional documentation and confirmation of facts that are declared on the face of the instrument.  Common sense dictates that the reason why such custom and practice exists is that most fraudulent schemes involve written instruments in which various declarations are made that are untrue or lack support.  For purposes of recording, any declaration on the face of the instrument that requires the attachment or description of documents that are readily available in the public domain would be unacceptable, much as, for example, a deed without a signature.  The property must be described with precision (or later corrected by affidavit), the grantor must be described with precision (or later corrected) and the grantee must be described with precision (or later corrected).  Without the required corrections, the documents are facially invalid.

For purposes of case analysis, the absence of facially valid documents, even though they were improperly recorded, negates the potential use of legal presumptions arising from the facial validity of documents.  Therefore such documents should be rejected without proper foundation in connection with the use of such documents for any purpose, and the attempt to introduce such documents into evidence in any court or administrative proceeding.

In the case currently under analysis, this means that the proceedings in which the property was allegedly foreclosed, were themselves all improper and based upon invalid terms.  Whether this renders the proceedings void or voidable depends upon case law and interpretations of constitutional due process.

However it is safe to say that based upon the above analysis, it is obvious that all such documents including the deed upon foreclosure are defective in several material respects.  Therefore, our conclusion is that the current title chain in the county records regarding this property is at best clouded.  The procedures for correcting clouded title vary from state to state and are subject to both federal and state laws.  Individual research on each case in each state is required before taking any action.

The view proffered by the banks would require them to accept declarations of fact from potential borrowers without any indicia of truth or reliability. It is opposite to the manner in which they do business. Currently they have it both ways, to wit: for purposes of borrowing you must submit documents that are facially valid without reference to external evidence and which can be easily confirmed but for purposes of foreclosure, none of those conditions apply. 

 

Rogue REMICs? 2016 Study Reveals Lack of Standing

I read a lot. I came across this article today published in 2016. Nobody has paid attention to it but as far as I can tell on first skim, the author has both coined the name “rogue REMIC” and described it well enough to come to a conclusion, to wit: everything about them is a scam and no legal standing exists with respect to them. I would only add that the author is incorrectly assuming that any securitization took place or if it was, as Adam Levitin coined the phrase, “Securitization Fail.”

see campbell – capstone inquiry into rogue remics

Significant quote from the abstract of the article:

The business of privatized mortgage loan securitization (Real Estate Mortgage Investment Conduits or “REMICS”) is so arcane and specialized that few people outside of that realm of investment knowledge understand, or even care to understand how loan securitization functions. However, if the difference between a legitimate REMIC and a Rogue REMIC is adequately explained, one can begin to understand why Rogue REMICs must be exposed as unlawful enterprises whose affiliates are not only able to disregard existing federal securities and tax laws, but are also able to circumvent state and local foreclosure laws at will. [e.s.] These ongoing violations result from the intentional and commonplace shortcutting of the proper mortgage loan securitization processes during the several years preceding the 2008 financial crisis. This Inquiry will not focus primarily on how and why Rogue REMICS violate federal tax and securities laws [e.s.]; although those aspects are part of the discussion by necessity. I will argue that all Rogues lack the perquisite legal standing to prosecute both judicial and non-judicial foreclosures. I will present compelling evidence that, in the aftermath of the 2008 financial crisis, foreclosures by Rogues may have exceeded 10% of all foreclosures. I will further argue that county officials may be violating state laws by recording the documents that impart false legal standing to the Rogues. I will conclude with a suggestion to homeowners on how to proceed if a mortgage assignment to a Rogue turns up in the local County public records. [e.s.]

And then there is this:

federal government regulators have no will to criminally prosecute the Rogues for financial crimes against individual homeowners even though the crimes are being committed by nationally-chartered investment banks. And so individual homeowners are left to fend for themselves against these behemoths. As a result, a hodge-podge of civil cases in State courts have created such a plethora of conflicting decisions that, in the aggregate, only serve to obfuscate the overriding principle of standing.

and this:

If a borrower’s loan did not leave the “warehouse” timely (if ever) to be incorporated into any REMIC, which includes memorializing that transfer in the local county, the REMIC trustee cannot create standing years later by filing a bogus assignment. As Levitin (2010) explains that “Securitization is the legal apotheosis of form over substance, and if securitization is to work it must adhere to its proper, prescribed form punctiliously” (p. 3).

and finally diagrams of a Rogue REMIC which is an empty pool (something I have been railing about for 12 years). The author describes it as

“A REMIC in name only. A shell of financial instrument. It never had any mortgages assigned to it when it was created and, years later, it is now closed to the introduction of new loans.”

Reaching the conclusion

homeowners were unwitting participants in an elaborate pump and dump scheme to deceive and profit from unwitting REMIC investors. By failing to record assignments during the warehouse phase of REMIC creation, the big investment banks created REMICs that existed in name only; then sold shares of them to the public as if they were the real thing.

And then they foreclosed on homeowners using the fake trusts as the name of the claimant, never revealing the true parties in interest because that would expose them to investigation aid discovery in which their lies would be obvious.

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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.

FLA S Ct Reverses Course on Homeowner’s Award of Attorney Fees and Raises Other Issues for Defense of Foreclosures

For those of us that have access to the data, we know that homeowners are winning foreclosure cases all the time. Nobody else knows because as soon as a homeowner wins or gets into a winning position they are offered money for their silence. The situation worsened when Florida and courts in other states turned down the homeowner’s demand for attorney fees after the homeowner had flat out won the case — especially where the case was dismissed for lack of standing.

Here the homeowner once again wins, having advanced several defense narratives. The homeowner applies for recovery of attorney fees and the demand is rejected because the loan contract no longer exists or because the party seeking to use it was shown not to be party to it, at least when suit was commenced. The Florida Supreme Court reversed that decision and rejected others like it.

Recognizing the danger of the erroneous rulings from the trial court and the district courts of appeal, the Court rejected arguments that a dismissal, voluntary or otherwise, based upon lack of standing meant that the loan contract no longer existed. While not completely abandoning the lower courts the Florida Supreme Court has narrowed the issues such that it is again almost always arguable and even inevitable that if the homeowner wins the foreclosure case an award of fees will follow.

fla s ct attny fees 1-4-19 sc17-1387 Glass v Nationwide

see also Follow Up Article to this Article

==============================
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.
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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This case opens a can of worms for the banks and servicers and corroborates much of what I have been writing for 12 years.

At issue was the homeowner’s right to prevail on an attorney fees award after winning the case in the trial court. This has previously been denied on the basis that cases dismissed for lack of standing meant that there was not contract. But the Florida Supreme Court says that the fact that just because the party involved had no right to enforce the contract doesn’t mean there was no contract.

The clear implication here is that the court did not want the erroneous rulings of trial courts and appellate district courts to be construed as completely canceling the loan contract. Any other ruling would be inherently ruling on the rights of unidentified third parties who DID have a right to collection of payment from the borrower’s debt and who did have a right to enforcement — without any notice to them because they are undisclosed and unknown.

The Supreme Court ruled that failure to allege or prove standing does not negate the fact that the homeowner is the prevailing party and entitled to fees under F.S. 57.105(7).

Citing its own decision in 1989, Katz v Van Der Noord 546 So 2d 1047, the Supreme Court held that even if the contract is rescinded or held to be unenforceable the prevailing party is still entitled to fees under the reciprocity provisions of F.S. 57.105(7).

This upends a basic strategy of the banks and servicers. Up until this decision they were virtually guaranteed an award of fees and costs if they won and immunity to fees if they lost. This reopens the fees issue and may give attorneys a reason to accept foreclosure defense cases — even on contingency or partial contingency.

But the court, perhaps in dicta, also mentions whether the note is negotiable, quoting from the homeowner’s arguments and pleadings.

Up until now the mere existence of the original note and in many cases a copy of the note, was sufficient to regard the note as a negotiable instrument. But the Florida Supreme Court is hinting at something here that the banks and servicers really don’t want to hear, to wit: it takes more that announcing the existence of a note to make it negotiable. This is not so.

Which brings me to my final point: read carefully the day the claimant is introduced and you will probably find that the note and assignment are not facially valid because they require reference to parole or extrinsic evidence. This bars legal presumptions, at least in the absence of a specific reference to the documents supporting the execution of the instrument as a substitution of trustee, an assignment or an endorsement.

The court was more than hinting at the idea that subsequent treatment of the note, which may have been a negotiable instrument at the time of execution (if the “lender” was in fact the lender). The question is whether the note is facially valid, to wit: whether the note specifically names a maker, payee and an unconditional promise to pay. If the originator was not the lender then extrinsic evidence would be required to prove the loan and the debt and the party who would have been appropriately named as payee on the note.

If subsequent indorsements or assignments for a note that WAS negotiable remove certainty from one or more of the elements of a facially valid instruments, then it is no longer a negotiable instrument. And THAT means that the all “reasonable” assumptions and legal preemptions are taken off the table.

The reason is simple. In order to be a negotiable instrument the assignee or successor must have certainty as to the parties and terms of the note. If extrinsic or parole evidence is required to provide that certainty the instrument is not negotiable and thus not entitled to any assumptions or presumptions.

So for example (taken from another case) when a Substitution of Trustee occurs in a nonjudicial state and it is executed by “U.S. Bank National Association, as trustee, in trust for registered Holders of First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-FF I, by Select Portfolio Servicing, Inc., as attorney-in-fact” then there are several points that require extrinsic or parole evidence, making the note non negotiable or at least arguably so.

In this scenario for an assignee to take a note from a party claiming rights to enforce in this instance one must know

  1. The name of the Trust, and the jurisdiction in which it was organized and is now existing.
  2. The instrument by which US Bank claims to be trustee
  3. Identification of “registered holders”
  4. The identification and content of the certificates
  5. The instrument by which SPS claims to be “attorney in fact”
  6. If you look closely you will also see that there is a question as to whom it is claimed that SPS is representing as attorney in fact. In any event “attorney in fact” means that a power of attorney exists but without specific reference to that power of attorney by date and parties, extrinsic or parole evidence is required meaning that no assumptions or legal presumptions may be made.

In other words the note cannot be accepted by anyone without extrinsic evidence. The fact that documents are apparently accepted by the assignees doesn’t change anything as to the facial validity of the document. Without facial validity there can be no negotiability under Article 3 of the UCC. Without negotiability there can be no assumptions or legal presumptions and thus the claimant must prove every element of its claim without presumptions.

And of course when the homeowner wins an award of attorney fees is now once again probable in addition to court costs.

Remember always: the point is not who can get away with enforcement. The point of the law is assuring that the owner of the debt is the one enforcing the debt and collecting the proceeds of enforcement. Before false claims of securitization this premise was almost universally true. Now it is rarely true that the true owner of the debt is represented.

And the apparent absence of such a party due to manipulation of the debt by intermediaries, does not legally create a vacuum into which anyone with knowledge and access to data may step in and claim rights of enforcement. As stated in California Ivanova decision the law does not allow the borrower’s debt to be owed to anyone whose premise is simply that they claim it.

How to Undermine the Credibility of Deutsch, Wells Fargo et al.

The entire securitization strategy is thus predicated upon the ability to convince a judge to presume facts, even if they are untrue.

The pattern of misconduct revealed in the track record of the major banks could be used to undermine the legal presumptions and force the proof of the loan, purchase etc.

BUT the major banks don’t often appear as the claimant in foreclosure cases even though it is they who are pulling the strings and who will receive the proceeds of foreclosure and it is they who receive the proceeds of mortgage payments. Neither the investors nor the nonexistent trusts see one penny.

So the challenge is to tie in the major bank who is the underwriter of the certificates sold in the name of the fake trust and who also names itself as “Master Servicer” of the fake trust with essentially no duties.

This requires a sea change in how foreclosure defense is conducted. And it is a rough road.

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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.
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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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[IN RESPONSE TO SOME QUESTIONS ABOUT THIS ARTICLE, I AM NOT DOING A 180. IN ITS SIMPLEST FORM WE ARE TALKING ABOUT TWO (2) BANKS — ONE WHO RENTS ITS NAME OUT TO BE USED “AS TRUSTEE” TO THE OTHER BANK WHO IS THE UNDERWRITER OR SUCCESSOR TO THE UNDERWRITER AND ALSO WHO SERVES AS “MASTER SERVICER” OF A NONEXISTENT TRUST. — THE UNDERWRITER IS NOT REALLY ACTING AS UNDERWRITER NOR AS MASTER SERVICER. IT IS STILL AN INTERMEDIARY BETWEEN INVESTORS AND BORROWERS BUT ASSUMES THE ROLE OF PRINCIPAL.]

Clients keep asking the same question: they point to the most recent news article detailing the corruption and malfeasance of the banks and ask how knowledge of such behavior could help their foreclosure defense. Remember that the news articles are not convictions proving they did what is alleged. So you would have to prove that the alleged acts in other cases were (a) actual and (b) relevant to your specific case in foreclosure.

People who go to court sounding off about the reportedly bad acts by their opponent gain nothing. In fact, it weakens their case because they sound like conspiracy theorists.

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However, I am working on a strategy of bringing in a pattern of bad acts to use as a prospective tool to defeat the legal presumptions on which the entire foreclosure claim rests. This requires a knowledge of the burden of proof. So in order to defeat the presumptions you only need to show that a reasonable inference can be made that the documents or testimony might be fabricated or misleading and that therefore the court should use no presumptions of fact or law and require actual proof from the claimant. This is possible.
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Such a ruling by the court will most certainly end the case because there are no facts in real life on which the claimants in most foreclosure can win the case. Their success rests solely on presumptions of validity, authenticity and conclusions.
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Legal presumptions can be applied as a convenience if the source of the document or act is credible. The challenge here is to show that the supposed evidence from which the legal presumptions are then applied is self-serving, not produced by a party who is neutral as to the outcome and having a pattern of malfeasance and negligence etc., such that there is a reasonable inference that documents produced by them in a foreclosure case are suspect, and therefore they are not entitled to the presumption. This is not a high bar.
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Hence they must actually prove the loan, the purchase of the loan the ownership, the right to service etc. And they must prove the actual existence of the foreclosing party — remembering that when a trust is implied as the foreclosing party it most likely does not exist and therefore could not possibly own anything much less your loan.
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Your opposition will fight tooth and nail to avoid such a ruling. They know that there is no case they can prove without employing the use of legal presumptions that results in implied findings of fact that are opposite to the true facts. The entire securitization strategy is thus predicated upon the ability to convince a judge to presume facts, even if they are untrue.
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Your strategy should be limited to undercutting those presumptions and raising reasonable inferences and questions about the self-serving documents that are being used by attorneys to lead the court into applying legal presumptions that should not be applied.
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Note to foreclosure defense lawyers: Deep down inside most of you believe that foreclosure defense consists of the use of technicalities to make mountains out of mole hills. You still believe that the debt is valid, your client owes it, your client defaulted and that the foreclosure is a valid exercise of collateral protection. So you don’t want to be associated with game-playing and delays because you think that it will negatively impact your standing in the legal community. What you are doing is erroneously applying the legal presumptions before you enter the courtroom. Take away those legal presumptions and look at the case from a real world prospective, not from what you think must be true. And think about your standing in the your legal community when you start winning these cases.

Losing Strategy: “Getting it on the Record”

I know I am going to take some heat for what I am about to say. In my opinion “getting it on the record” is an excuse for losing and implies that the judge’s decision was wrong and can be appealed when in fact the judge’s decision was correct and will be easily affirmed on appeal.

Clients and lawyers and others frequently ask me to “review” something they have written. Below you will find my usual responses. The main trap door that losing homeowners fall through is that they bury their own argument in an attempt to litigate the entire case (i.e., to get it on the record, AGAIN) on each and every filing they submit to the court.

Let us help you plan your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

Purchase now Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations. Presenters: Attorney and Expert Neil Garfield, Forensic Auditor Dan Edstrom, Attorney Charles Marshall and and Private Investigator Bill Paatalo. The webinar and materials are all downloadable.

Get a Consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Here is my reply to most people whether they professionals or lay people.

The only caveat to this is that I personally know of many excellent legal writers “out there” for whom this article does not apply. They understand that the goal is to win in litigation and that means victory in as many points in the timeline of motions and discovery as is possible. You don’t win without that.

The second caveat is that persuasion and credibility are two sides of the same coin. You gain nothing by tossing out allegations that you can never prove and that are not backed up with foundation and corroboration. Practices like that lead to stuffing pleadings with irrelevant gibberish which might be true, but will dilute the good arguments and will never be considered, much less allowed into evidence.

Here are some of my common replies, shortly before they ask what it will cost for me to rewrite the pleading or memorandum.

In my opinion this needs to be rewritten, it needs to be much shorter and it must focus in on a small number of bullet points. The first points must catch the attention of the judge since it is unlikely that the judge will read beyond page 2.A “Reply” should be exactly that, to wit: something that answers the objection filed by or on behalf of ABC. While components of a reply are present they are buried under what is largely re-litigating the entire case.
Your point about all defendants being represented by the same attorney is well-taken. Do something with that, don’t just say it. Perhaps you could float an argument like “Opposing counsel seeks to invoke alter ego status on the one hand in order to invoke res judicata and on the other hand wants us to believe that ABC is a separate and independent entity with no connections to the alleged violations of law asserted by Plaintiff.
Under either scenario the baseline narrative is completely dependent upon a chain of ownership of the debt that is neither asserted nor substantiated by any foundation or documentary exhibits or evidence. In a sleight of hand maneuver, Defendants instead want us to focus on the note or mortgage (deed of trust), which at best are only paper instruments supposedly memorializing a transaction that is neither asserted nor in existence.
Thus they argue a false equivalency between the debt and the note despite no allegation nor proof that the note accurately memorialized a financial transaction in the real world between maker and payee on the note. They neither allege nor argue the merger doctrine in which the debt is absorbed into the note. This would force them to prove the money trail which nobody in the shoddy history of false claims of securitization is ever willing to allege or even provide a response.
“Getting it into the record” is not a trial strategy. It is a losing strategy both at the trial level and appellate level. That is because the goal is wrong. The goal is really to win, which can be and has been done in tens of thousands of cases. Getting something into the record is a euphemism for negligence, because it means that it is a data dump rather than a compelling narrative designed to persuade the trier of fact. Data dumps are virtually ignored by judges, just as you would if you were sitting on the bench.
“Defendant Counsel’s “Representation” of all defendants, each with supposedly different interests is at odds with his grouping of all the defendants together — ignoring the fact that if the case is decided against one of them it might be applied to them all. Do all the Defendants consent to this representation? Or, as alleged by Plaintiff, are they all sham conduits working for a fee in a common enterprise to create the illusion of an interest in ownership, servicing and transfers of the recorded encumbrance? Does one of them own the debt or are any of the defendants in privity with the owner of the debt?
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