2012 Abstract Shows Absence of Data Credibility for Borrowers, Lenders, Investors and Government Regulators

Hat tip to Bill Paatalo who brought this to my attention.

see: Abstract – US Residential-Mortgage Transfer Systems – A Data Management Crisis

U.S. Residential-Mortgage Transfer Systems: A Data-Management Crisis

John Patrick Hunt† , Richard Stanton‡ , and Nancy Wallace§ May 16, 2012

Abstract

This paper reviews the current state of residential-mortgage data structures from origination through the securitization supply chain. We discuss the various uses of these data, their limitations in mortgage-risk management, and the current lack of transparency in important segments of the mortgage market.

We conclude that despite the size and importance of the mortgage market in the overall U.S. economy, current data-management practices make it difficult or impossible for borrowers, lenders, investors and government regulators to perform the oversight and analysis functions necessary to maintain an orderly market and to ensure fair pricing of securities backed by those mortgages.

Editor’s Note: Except for the seminal study by Katherine Ann Porter that she conducted at the University of Iowa in 2007, there is no study concluding the obvious — that the banks deliberately chose to use and invent systems that make it difficult and in fact, usually impossible, to track any residential loan in either the money trail or the paper trail.

The two things that stand out from this very comprehensive report, are that there is no common number used to identify loan documents and  their finding that the alleged REMIC Trusts are composed of multiple pools. These are high value financial instruments. In the securities markets we use a CUSIP number for every stock and bond purchased and sold. No such control number is used on mortgage loans.

The finding that the alleged REMIC Trusts are at least theoretically composed of MULTIPLE LOAN POOLS corroborates a basic tenet of my analysis, to wit: there is no single pool of loans that is attributable to a REMIC Trust and therefore, the mortgage loan schedule (MLS) presented in court does NOT represent the entire asset picture of the Trust. It’s very clever. If they are caught red handed they only need say that they didn’t think the other loan schedules were relevant. Nonetheless they proffer the MLS as THE MLS when the Trust was formed and that the MLS represents a current picture of the ownership of the PAPER even though it does not represent that the Trust is the obligee of the borrowers’ debts.

Katie Porter, now running for Congress in California, came to a more sinister conclusion that turned out to be true. She predicted that the original note would not be available at time of enforcement because it had been destroyed. I corroborated this conclusion when I surveyed multiple “lenders” who only claimed to be the “holder” of the note, not the obligee of the debt,  and not the holder in due course (i.e., where the REMIC Trust paid for the debt, and didn’t even receive a copy of the note.)

Like many other reports and abstracts prepared by eminently qualified experts in economics, securities, underwriting of loans and underwriting of securities, the conclusion is real, obvious and not contested by anyone representing the banks. The system was rigged to enable all loans and all paper trails to be shifted around at will to suit the needs of the TBTF banks — leaving the borrower, the borrower’s attorney and the court with only clouds of smoke and mirrors.

Let us help you plan your defense or offense: 202-838-6345. Ask for a Consult.

On Sale NOW: Video of 3.5 hour seminar entitled “Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar.”
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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Royal Bank of Scotland Trained Employees on How to Forge Signatures

Fraud for the first time in history has been institutionalized into law.

It is foolishness to believe that the banking industry is trustworthy and that they have the right to claim legal presumptions that their fabricated documents, and the forged documents are valid, leaving consumers, borrowers and in particular, homeowners to formulate a defense where the banks are holding all the information necessary to show that the current foreclosing parties are anything but sham conduits.

Here we have confirmation of a practice that is customary in the banking industry today — fabricating and forging instruments that sometimes irreparably damage consumers and borrowers in particular. Wells Fargo Bank did not accidentally create millions of “new accounts” to fictitiously report income from those accounts and growth in their customer base.

Let us help you plan your narrative : 202-838-6345. Ask for a Consult.

Video available now for Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar.

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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Across the pond the signs all point to the fact that the custom and practice of the financial industry is to practice fraud. In fact, with the courts rubber stamping the fraudulent representations made by attorneys and robo-witnesses, fraud for the first time in history has been institutionalized into law.

RBS here is shown in one case to have forged a customer’s signature to a financial product she said she didn’t want —not because of some rogue branch manager but because of a sustained institutionalized business plan based solidly on forgery and fabrication in which employees were literally trained to execute the forgeries.

The information is in the public domain — fabrication, robo-signing and robo-winesses testifying in court — and yet government and the courts not only look the other way, but are complicit in the pandemic fraud that has overtaken our financial industries.

Here are notable quotes from an article written by J. Guggenheim.

Once upon a time, in a land far, far away- forgery, fabrication of monetary instruments, and creating fake securities were crimes that would land you in prison.  If you forged the name of your spouse on a check it was a punishable crime.  The Big Banks now forge signatures and fabricate financial instruments on a routine basis to foreclose on homes they can’t prove they own, open accounts in unsuspecting customer’s names, and sign them up for services they don’t want.  If this isn’t the definition of a criminal racketeering enterprise- what is?

RBS, following the Wells Fargo Forgery model, conceded that a fake signature had been used on an official document, which means a customer was signed up to a financial product she did not want.  RBS’s confession comes only two weeks after whistle-blowers came forward claiming that bank staff had been trained to forge customer signatures. [e.s.]

The confession comes only two weeks after The Scottish Mail on Sunday published claims by whistle-blowers that bank staff had been trained to forge signatures.

At first, RBS strenuously denied the allegations, but was forced to publicly acknowledge this was likely a widespread practice. [e.s.]  The bank was forced to apologize publicly after retired teacher Jean Mackay came forward with paperwork that clearly showed her signature was faked on a bank document.  The great-grandmother was charged for payment protection insurance (PPI) back in 2008 even though she had declined to sign up for the optional product.

At first the bank refunded her fees but refused to admit the document was forged.  [e.s.]A forensic graphologist confirmed the signatures were ‘not a match’, forcing the bank to concede and offered her a mere £500 in compensation for their fraudulent act.

Forensic Graphologist Emma Bache, who has almost 30 years’ experience as a handwriting expert, examined the document and said the fundamental handwriting characteristics do not match.

The Banks in Britain, Australia, New Zealand and Canada, along with the United States include forgery and fabrication in their business models to increase profits.  Why shouldn’t they?  There is NO THREAT because they know they will not be held accountable by law enforcement or the courts- so they continue to fleece, defraud, and steal from their customers.

Homeowners must force an urgent investigation into claims of illegal practices by the banks.  Wells Fargo is not doing anything that CitiBank, JPMorgan Chase, Bank of America and others aren’t doing.  To remain competitive in an unethical marketplace, you almost have to resort to the same fraudulent tactics.[e.s.]

However, whistle-blowers have now revealed that managers were coached on how to fake names on key papers.  Whistle-blowers said that staff members had received ‘guidance’ on how to download genuine signatures from the bank’s online system, trace them on to new documents then photocopy the altered paperwork to prevent detection.  When in fact the bank taught its employees how to engage in criminal conduct.

Although clearly against the law, the whistle-blowers claim it was “commonly done to speed up administration and complete files.”  Just like American banks forge notes and assignments to ‘speed up foreclosures and complete files.’  They claim the technique was also used to sign account opening forms – and even loan documents. [e.s.]

Forgery

According to Justia.com, the “criminal offense of forgery consists of creating or changing something with the intent of passing it off as genuine, usually for financial gain or to gain something else of value.” This often involves creation of false financial instruments, such as mortgage notes, assignments, checks, or official documents. It can also include signing another person’s name to a document without his or her consent or faking the individual’s handwriting.  Forgery often occurs in connection with one or more fraud offenses. 

Attorney Fee Debate Heats Up as Florida Supreme Court Accepts Case

https://www.law.com/dailybusinessreview/sites/dailybusinessreview/2018/02/14/attorney-fee-debate-heats-up-as-florida-supreme-court-accepts-case/

CFPB: Declaration of Dependence

https://www.propublica.org/article/consumer-financial-protection-bureau-declaration-of-dependence#140472

Born as a fiercely independent agency meant to protect citizens, the Consumer Financial Protection Bureau has quickly been subsumed into the Trump administration. Banks, student-loan agencies and payday lenders are the winners.

In early February, the Federal Reserve delivered its most significant punishment of a major bank in a generation, sanctioning Wells Fargo for its pattern of customer exploitation.

A few blocks away, meanwhile, another of the giant bank’s regulators, the Consumer Financial Protection Bureau, has recently displayed a different attitude: It has been softening on scandal-inundated Wells Fargo. After an edict about data handling from Mick Mulvaney, the man Donald Trump installed as acting head of the agency late last year, the bureau’s enforcement lawyers suddenly found their hands tied, according to three CFPB staffers. The attorneys weren’t permitted to upload information the bank supplied about its auto insurance business, one of the areas in which Wells Fargo has been accused of malfeasance.

Another probe of bad behavior — this one involving Wells Fargo’s treatment of its checking customers — has bogged down, ProPublica has learned. And a third investigation of the bank (for mortgage abuses) that was about to yield tens of millions of dollars in fines, according to Reuters, now languishes unresolved. Staffers fear they will be ordered to reduce the penalty that Richard Cordray, the previous head of the agency, approved before he left, according to people familiar with the probe.

To continue go to ProPublica….

Fla. Supreme Court Takes Jurisdiction Over Attorney Fees Controversy

Under current doctrine, banks can continually file baseless claims against homeowners until they win — mostly because the homeowner does not have infinite resources. In the meanwhile each time the banks lose they are not liable for attorney fees. But if they win they get attorney fees under F.S. §57.105. If the homeowner prevails on the theory that the named Plaintiff is an imposter having nothing to do with the loan, then, according to current doctrine, the basis for recovery of attorney fees (as set forth in the mortgage and note) does not apply.

The basic injustice of this doctrine has attracted the attention of the Florida Supremes. The logic should apply both for the homeowner and for the bank. That is what we mean by blind justice. If someone takes a position in court and ultimately prevails then they are entitled to fees if the contract provides for fees. The appellate courts have erroneously concluded that this can only be applied for the banks, not the borrower.

Let us help you plan your case narrative and strategy: 202-838-6345. Ask for a Consult.
Register now for Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar.
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.
—————-

See Fla. Supreme Court Weighs in on Homeowner’s right to Recover Attorney

The current doctrine is that once you have prevailed on the issue of standing you have also disproved your right to recover attorney fees. The problem is that the decisions have focused on the wrong thing: the contract exists regardless of who is asserting rights for or against the contract. If the finding of the court was that no contract ever existed, then it would make sense that neither party could claim any benefit from a contract that never existed.

But that is not what is happening. The courts have gone off the tracks and hopefully the Florida Supremes will fix the problem. The current doctrine assumes that for purposes of the case the contract does not apply to the party who filed the case seeking relief pursuant to the contract (the note and mortgage). The current process requires a homeowner to defend a baseless action. But having asserted rights under the contract, the banks should die by their own sword. Otherwise the banks can keep coming into court under the same named Plaintiff forcing the homeowner to defend the same action repeatedly — until they run out of money.

Failure to award fees to the homeowners presents a clear strategy to the banks. Since there is no risk of loss, they will keep filing actions in which their named Plaintiff has no standing until they win by default because the homeowner simply can’t afford to litigate forever.

If fees were awarded, as they always were until the courts  invented a doctrine to deny the fees, then the banks would have risk of loss and would therefore be inclined to file only file actions that had merit.

Neil Garfield’s Evidence in a Nutshell: SILENCE IS DEADLY!

 

Click Here to sign up:Mastering Discovery and Evidence in Foreclosure Defense

Preface from Neil Garfield:

In my nearly 41 years as a litigator, I have won many (but not all) cases. Over the past ten years those include foreclosure cases that were given up for lost by preceding lawyers. The reason I won is simple: the entire foreclosure scheme is basically a fraud. So I was able to direct my requests for discovery, my objections at trial and my cross examination of witnesses towards the missing links that never existed.

I don’t prove fraud. I reveal the absence of evidence that should be present if the foreclosure was real. I didn’t prove anything except the absence of critically important transactions and documents, thus undermining the prima facie case of the alleged foreclosing party.

It is impossible to impart our knowledge of what works and what doesn’t in a simple 30 minute or even a one hour consult. So I made the decision to offer a seminar that costs a third of what such a seminar would charge in order to get people to learn how to line up their defense strategies.

The single most common reason for homeowner losses in foreclosure cases is lack of knowledge on procedure and substantive law. And the single most prevalent piece that lawyers and pro se litigants are missing is understanding the rules of evidence. That lack of knowledge affects everything, but especially discovery requests.

So although the topic may appear too technical or boring for your taste, attendance is required for anyone who really wants to start winning cases. No guarantees of course — except that you will almost certainly lose if you don’t know the laws and rules affecting discovery and evidence.

THIS SEMINAR WILL NOT BE DISCOUNTED.

Defending your home from foreclosure? Suing a servicer?  Approaching trial with a wish and hope instead of a prepared trial strategy? Register now for Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense webinar.

This online webinar will provide instruction on establishing your narrative, making objections, conducting cross examinations and how to blow up the robo-witness. It will also cover the foundation for objections through attempts at getting discovery and the use of Motions in Limine based upon the inability or unwillingness of the attorneys to provide any meaningful response to discovery.

Knowing the laws of Evidence is critical in preparing discovery requests. Cases often end during discovery when you get the order (on a Motion to Compel) you want requiring the foreclosing party to open up its books and records. At this point our experience is that the other side immediately makes a credible settlement offer. But even if you don’t get that order or are not interested in the settlement offer the failure to respond to discovery serves as the foundation for Motions in Limine, objections at trial and cross examination of the robo-witness.

 

Every successful trial strategy for winning a foreclosure defense case rests on the ability to blow up the robo-witness and to deny the foreclosing party the ability to get documents (hearsay) into evidence. You will learn why the most common question asked is the wrong question. It isn’t a matter of proving the fraud. Good defensive trial strategy does not prove anything; it reveals the gaps in the prima facie case of the foreclosing party.

Forensic experts will also demonstrate the value of investigation and how that helps the attorney or pro se litigant create a narrative and case strategy that works.

 

Date: February 16, 2018

Time: 1:00pm Eastern/12:00pm Central/11:00am Mountain/10:00am Pacific

Delivery: Webinar via Computer (WebEx platform) for visual presentation, or by Skype or Phone.

Who Should Attend: Real estate attorneys, homeowners, and title agents who insure title following a foreclosure (and their support staff).

Presenters include:

  • Attorney and Foreclosure Expert Neil F Garfield for GTC Honors, Inc.
  • Securitization Expert Dan Edstrom, DTC Systems, Inc.
  • Investigator Bill Paatalo, BP Investigative Agency
  • Attorney Charles Marshall of the Marshall Law Firm/California.

REGISTRATION: $149-Hurry and Register

Seminar Length:  Estimated 3-Hours including post-seminar Q&A session (30+  minutes)

Materials for Participants:

  • PowerPoint Printouts (delivered with log-in and by email)
  • Transcript of Seminar (delivered post-seminar)
  • Recording of the Seminar
  • Transcript of Cross Examination (delivered by email)
  • CLE Credits Requested: 2 Civil Litigation

Lecture Topics:

  1. Law vs. Politics
  2. The Politics of Home Foreclosures
  3. Realities for Investors
  4. Reality vs. Legal Doctrine: No action arises from deceit
  5. Strategies for Homeowners When the Salesman is Dead
  6. Information v Evidence
  7. Reality v Paper
  8. Void v. Voidable
  9. The Fictional Boarding Process
  10. Standing and Jurisdiction
  11. Objections
  12. Motions in Limine
  13. Cross examinations
  14. Robo-witnesses and signatures
  15. Negotiable Instruments
  16. Nonexistent Transactions
  17. Fabrication of Documents
  18. Who’s on first?
  19. Unfunded Trusts
  20. Inside & Outside of Discovery: Requests for Production, Interrogatories, Request for physical access (computers) and Request for Admissions
  21. Motion for Summary Judgement
  22. Admitting information into evidence
  23. Reveal Absence of Evidence
  24. Fraud on the Court
  25. Compliance with Pre-Trial Orders

 

The seminar is conducted by computer or by phone.  However, to access all webinar visuals you must log in by computer into the webinar.  Registrants will receive directions within 24 hours prior to the seminar with instructions to access the WebEx seminar.

Discovery is where the rubber meets the road. This seminar will help you navigate the discovery and evidence minefield with skill.  

What is Discovery?

Discovery describes the process of requesting information from the other party in a lawsuit.

It is an invaluable weapon in the fight to defend your home against the banks. If you are being sued by the bank and they are alleging that they are entitled to foreclose on your home, you must find out exactly what evidence, if any, they are basing these allegations on.

You’ll want to see a copy of the original promissory note to determine if your original lender endorsed this evidence of the debt through an assignment of mortgage. Filing for discovery can help you formulate your defenses and build the strength of your case prior to any trial or final summary judgment.

In order for parties to obtain discovery, the Florida Rules of Civil Procedure have set forth a means by which to accomplish this end, and those legal avenues are specifically outlined in Rules 1.340, 1.350 and 1.370. Most states have comparable civil procedures.

Three Kinds of Discovery:

Discovery can be grouped into three categories: oral discovery (depositions), written discovery (interrogatories and requests for admission), and visual inspection (requests for production). These are collectively referred to as “discovery requests.” As a handy rule of thumb, you can think of discovery requests as requests to either discuss something (depositions), answer something (interrogatories), admit or deny something (requests for admission), or produce something (requests for production).

A Foreclosure Cannot Proceed when Discovery is Pending:

Discovery is critical because it enables the parties to properly develop their arguments, it can also be a strategic tool in preclude the bank from getting a Final Judgment (loss of the home) entered against the borrower. Florida case law states that Courts should NOT enter Final Judgments while the discovery process is still on-going.

Specifically, “Summary judgment should not be granted until the facts have been sufficiently developed for the court to be reasonably certain that no genuine issue of material fact exists.”Singer v. Star, 510 So.2d 637, 639 (Fla. 4th DCA 1987)

And furthermore:

“As a general rule, a court should not enter summary judgment when the opposing party has not completed discovery.” Singer; Colby v. Ellis, 562 So.2d 356 (Fla. 2d DCA 1990)

Thus, if you’ve filed discovery and that discovery has not been properly responded to by the banks, then the Courts should NOT enter Final Judgment against the homeowner!

Only 30 Requests for Discovery Per Case:

There is a limit to the number of times you can make a request for discovery and that number is in the Rules of Civil Procedure. It could be 25, 30, more or less as amended by court order.

With a limited number of Admissions and Interrogatories you can seek, you need to know what requests will maximize traction. If the Bank refuses to respond to your discovery requests or if their responses are less than satisfactory you must file a Motion to Compel and move the Court to require the bank to provide the information you seek.

The Banks and Servicers are going to object to most of your demands.  Now What?

While both the attorneys and the judges might contest your right to receive information about the origination or sale of the loan, you are absolutely entitled to inquire about whether anything they said is true or if it is all a lie. And the only party who has that information, and the only party resisting with all their considerable might is the originator and the participants in the chain of the alleged securitization or even in the chain of the securitization which is denied by them.

The scope of discovery is intended to be broad but to prevent mere fishing expeditions that are intrusive on the other party toward no end. They will argue that holding the note closes the issue and the judge will agree with them until you pull out the statute and point out that the proof of the actual loan is necessary in all cases except where they allege to be the holder in due course, which they never do.   Register now for the seminar to advance your understanding of handling discovery and evidence in foreclosure defense.  Click here to register.

About the Presenters:

Neil F. Garfield, M.B.A., J.D., is the winner of many of academic awards, a popular speaker, and author of articles and technical treatises on law, finance and economics. He has concentrated his law practice for the last 10 years on issues related to structured finance (securitization in particular). As a former investment banker and real estate investor, he knows mortgage securitization issues from the inside out, who the deciders are, and how they arrived at a catastrophic scheme to defraud, people, agencies, institutions, and governments all over the world. As an expert witness and trial lawyer for 41 years, his efforts to spot evolving trends have helped thousands of homeowners keep their home and receive damages as compensation. Having formerly filed hundreds of foreclosure actions as the attorney for small banks, homeowner associations and mechanics liens, he is well suited to provide assistance to investigators, lawyers and pro se litigants.

Investigator Bill Paatalo has been a licensed private investigator since September of 2009. He has 17 years combined experience in both law enforcement and the mortgage industry which he has utilized to become a leading expert in the areas of chain of title analyses and securitization. He was a police officer with the St. Paul, Minnesota Police Department from 1990-1996 where he was assigned “Field Training Officer” duties in only his second year on the job, and received multiple commendations.  Mr. Paatalo has worked exclusively since 2010 investigating foreclosure fraud, chain of title, the securitization of residential and commercial mortgage loans, and accounting issues relevant to alleged “defaults.” Mr. Paatalo is also a Certified Forensic Mortgage Loan Auditor through (“CFLA”), and has spent more than 10,000 hours conducting investigatory research specifically related to mortgage securitization and chain of title analysis. He has performed such analyses for residential real estate located in many states, including but not limited to, Washington, Oregon, California, Nevada, Florida, Montana, Texas, Arizona, Ohio, New Jersey, and several other states. To date, Mr. Paatalo has conducted nearly 1,000 investigations across the U.S., and has provided written expert testimony in the form of affidavits and declarations in approximately 120 -130 cases nationwide. Mr. Paatalo has been qualified in both state and federal courts as an expert.

Dan Edstrom, of DTC Systems, performs securitization audits, and spent a year putting together a diagram that traced the path of his own house’s mortgage securization that went viral in 2012-2013.  DTC Systems provides research services to lawyers, paralegals, loan auditors, and government agencies for securitization of residential mortgages.  DTC Systems is adept at locating the trusts that loans were pooled into as well as monthly certificate-holder statements and monthly loan level files.

The West Coast Foreclosure Show with Charles Marshall: Table Funded Loans, Consummation and the Courts

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The West Coast Foreclosure Show

Thursdays LIVE! Click in to the The Neil Garfield Show

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

Attorney Charles Marshall and Investigator Bill Paatalo will discuss the issues resulting  from table funding today on the West Coast Foreclosure Show.
Table Funding is a legal theory of liability Charles Marshall is applying in several of his California cases.   The theory has only received limited traction so far. Some judges are starting to accept that many loans were table funded and thus concealed the true lender, while other judges continue to reject the theory in fear that over a decade of table-funded loans would open up the floodgates.
Courts that have considered the argument that when “a borrower’s mortgage loan documents allegedly fails to identify the borrower’s ‘true lender’ that the mortgage loan was never consummated”— and have unanimously rejected it. (Marquez v. Select Portfolio Servicing, Inc. (N.D. Cal. Mar. 16, 2017, No. 16-CV-03012-EMC) 2017WL 1019820,  citing Sotanski v. HSBC Bank USA, Nat’l Ass’n, (N.D. Cal. Aug. 12, 2015) No. 15-CV-01489-LHK, 2015WL 4760506, at *6; Mohanna v. Bank of Am., N.A. (N.D. Cal. May 2, 2016, No. 16-CV-01033-HSG) 2016WL 1729996, Ramos v. U.S. Bank (S.D. Cal. Sept. 14, 2012,No. 12-CV-1820-IEG) 2012 WL 4062499, (holding that where “a lender was plainly identified … the loan was consummated regardless of how or by whom the lender was ultimately funded”)).

Table funded loans, according to Reg Z of the Federal Reserve, are predatory loans  per se especially if it was part of a pattern of conduct by the originator.

“Table Funding” now comes in many flavors:

1. The one addressed by TILA and required disclosures of the identity of the lender (giving the consumer choice over who he/she decides to do business with) has some basics to it. You have a real lender with real money making a real loan. But the disclosures say that the originator is the lender and do not disclose thee existence or identity of the real lender. Regulators have often treated a pattern of table funded loans as “predatory per se.” Back in the 60’s the banks were changing things at closing giving the borrower no option but to close with a “lender” who was different from the entity identified as lender in the original documents (application) and disclosures (GFE etc).

2. So the banks set up what they called warehouse lending in which the originator was borrowing money from the real lender and therefore really was the lender.

3. But in the customary purchase and assumption agreement with the “warehouse lender” it is clear that the so-called “warehouse lender” is the real lender, since it asserted ownership of the loan starting before the closing of the new loan.

4. In the era of claims of securitization, most such claims were completely false. But it created a vehicle in which sham conduits could be used to such an extent that it was virtually impossible to identify ANY real lender. This was done to cover-up theft of investor funds who thought they were buying certificates in a viable REMIC Trust that turned out not to exist and whose name was never used in the purchase of loans although it was used in foreclosures — only after the banks swore up and down that the trusts didn’t exist back in 2006-2009.

5. It was those stolen funds that funded “trading profits” from sham transactions including paying fees to originators who would have the borrower execute the note and mortgage in favor of the originator, who in turn transferred the paper to the various sham conduits. The actual debt never changed hands in any transaction because the owner of the debts, whether secured or not, was the investors whose money was illegal used to fund the whole venture.

This can demonstrated by using glasses of water. You have the investors pour some of their water (money) into a glass whose name is the underwriter of a so-called REMIC trust. The investor water is controlled by the underwriter who created a fictional entity (REMIC Trust) to issue bogus certificates that were entirely worthless. The water is owned by the investors. It never goes into the trust. It stays under the control of the underwriters. Just this week there was another multi-billion dollar settlement with investors who sued not for beach of contract (Bad loan underwriting) but for fraud.

So at all times the water is controlled, every drop of it, by the underwriter and the only movement of the water is when it is poured into separate pockets of the underwriter whose name does not appear on any of the so-called loan documents that are based upon a transaction that never happened — a loan of money by and from the originator to the borrower.

The underwriter used SOME of the money from investors to create the illusion of a loan transaction with the originator. So neither the originator nor the warehouse lender has any money in the deal (i.e., water). But endorsements and assignments are fabricated to create the illusion that someone purchased the loan. The only way that could have happened is if someone paid the investors. So the transaction didn’t happen but the paper did happen. All smoke and mirrors.

 

Please refer to page 24 of the attached brief (this was the appellate case Charles Marshall orally argued by phone this morning) for a negative spin on why table funding as a viable legal theory.
Charles Marshall, Esq.
Law Office of Charles T. Marshall
415 Laurel St., #405
San Diego, CA 92101
Investigator Bill Paatalo
BP Investigative Agency, LLC
P.O. Box 838
Absarokee, MT 59001
Office: (406) 328-4075
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