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.
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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.
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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. 

 

Tonight! DISAPPEARING LEGAL PRESUMPTIONS on the Neil Garfield Show 6PM EDT With Charles Marshall, Esq. and Bill Paatalo

Just the Facts, Ma’am!

Thursdays LIVE! Click in to the The Neil Garfield Show

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

Charles Marshall, California attorney and Bill Paatalo, private investigator, discuss the implications of two Hawaii cases that are mirroring other decisions across the country.

Hawaii Schranz Case

Hawaii St. John Case

The above links go to two recent Hawaii cases dealing with legal standing. The fundamental fact of law is that standing must be ACTUAL NOT PRESUMED.

Specifically the issue is whether the foreclosing party actually had the original note at the time the foreclosure was commenced. Reasserting that standing is jurisdictional and therefore must be proven (with actual facts) present before a party takes any action, the courts here reversed (not for publication) Summary Judgments in favor of U.S. Bank and BONY Melon respectively.

The basis of the ruling is really that summary judgment could not have been granted based upon the submissions of so-called trustees of the probably nonexistent trust that never owned the debts. These decisions can be read as brushing aside presumptions and requiring actual proof of the facts that were heretofore assumed or presumed. The reason is simple. Standing is jurisdictional. Since any case that proceeds without jurisdictional is void and subject to being vacated, the proof must be actual and not presumed.

The interesting reasoning in these decisions is that many courts, including these decisions in Hawaii are starting to rethink their formal and informal presumptions. At the height of the tidal wave of foreclosures the courts took to the notion that the foreclosing party would not have filed if they were not the creditor or at least the possessor of the note with rights to enforce. The giant leap that came thereafter was a ruling that presumed the foreclosing party had possession of the note and the right to enforce it.

These decisions show that there is more movement toward requiring proof rather than the sue of legal presumptions. In plain language the courts are beginning to distrust the banks who bring these actions on behalf of alleged trusts.

Since there was question of fact, the summary judgment could not be granted. Thus the court decisions lay out the procedure, requiring actual proof of contested facts rather than resolving them strictly on the basis of applying legal presumptions which we all know leads to erroneous factual and legal conclusions.

Modification Muddle

There is a great deal of conflict and confusion in the world of foreclosure defense about the prospect of modification. It is obvious that approvals are random only to create the impression that an entire system devoted to foreclosing on as many homes as possible is purportedly attempting to work with homeowners.

We all know that we are dealing with entities who have no right, title or interest to the loans or the servicing or the administration of them. Yet we are presented with a crazy hodgepodge of demands for paperwork so that the unauthorized servicer can “consider” and “get approval” from the “investor.”

If the terms are favorable to the homeowners, many homeowners are advised by me and others to accept the modification even though we know that we are not settling with anyone who has the right or authority to bring the claim, much less settle it. But the process of settlement/modification brings with it some potential opportunities to drill home your primary defense narrative.

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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Tens of thousands of homeowners have reported to us that they are in conflict with their own attorneys about how to proceed — litigation or modification. This article is meant to convey the complexity of strategic legal decisions. Your attorney has not been bought off by the other side. Suggesting settlement is not a betrayal. It is called doing the job of a lawyer. The justice system runs on money. If you want all out war, then you must pay for it. If you can’t or won’t pay for it, then you must accept the probability of achieving less than your main goal.

Unless you are wiling to spend large amounts of money on fees such that the attorney is being paid to do all the research, all the analysis and all the strategic planning required to litigate, then you must accept the consequences of limited strategies in place of strategies that are designed to win the case. But modification represents a backdoor to beating your opposition using the same defense narrative as you are presently using in litigation.

We should not be annoyed with local counsel. We defer to local counsel always. This is not a contest. If local counsel deems it best that the homeowner settle then it should at least be pursued, but in the end it is the homeowner who decides what to accept.

The findings in the TERA report can be used as a reason to demand that the named Trustee of the named Trust acknowledge a settlement and the authority of whoever is negotiating the settlement.
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When the intermediary “servicers” refuse to present any signature from any officer of the purported “Trustee” of a purported “Trust” that owns the subject debt, the homeowner can go to court. This time the homeowner is armed with inequitable conduct by purported agents of the purported Plaintiff or foreclosing party.
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In court, the homeowner would say the purported “servicer” has proposed a settlement/modification that the homeowner has already accepted; but now the “servicer” refuses to have the Plaintiff (foreclosing party) execute any document memorializing the settlement/modification. Instead they are requiring acceptance of a signature from a person of unknown authority on behalf of a self-proclaimed servicer of unknown authority.
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Reports from forensic experts show that none of the parties have any right, title or interest in the debt or servicing; however homeowner is willing to accept the risks of dealing with an unauthorized entity, as long as the named Trustee executes the settlement on behalf of the Plaintiff Trust.
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A close examination of the proposed modification document will usually show that the creditor is being subtly changed. Payments are now owed to the servicer and there is no mention that the servicer is accepting those payments on behalf of the named creditor who is named as the foreclosing party. At best the creditor is being changed from the foreclosing trust to unknown. At worst the debt is being joined with the note and mortgage and changed to being presumptively owned by parties who, to the detriment of the owners of the debt, have never paid for ownership.
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The defending homeowner would be saying that the intermediary with whom she has been corresponding is acting in bad faith and/or without authority. He/She would be seeking relief in the form of a court order requiring an officer of the named Trustee Bank, as trustee for the named Trustee appearing as the Plaintiff and foreclosing party to either sign the deal or reject it if the current servicer had no authority to offer it.
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This is akin to cases in which there is a settlement and the attorney executes documentation or a pleading; the court most often rejects the “acceptance” by the attorney even though he/she is an officer of the court. The court, especially in foreclosures, will almost always require the signature of the homeowner. What is good for the goose is good for the gander.
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The purpose of going through all that is to force the other side to offer a better deal or back away. I can virtually guarantee that the “Trustee” for the “REMIC Trust” will NOT sign a document in which they admit to being a player. The way it is set up now, the “Trustee’s” name is falsely used and the bank named as Trustee can claim plausible deniability in any given case in the event that the situation explodes and there is liability for false claims. In all likelihood the Trustee doesn’t even have a retainer agreement with the law firm that is falsely reporting that they are representing a nonexistent client Trust.
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Using this strategy drives the opposition to the wall. They know that the “Trustee” has no authority or interest in the litigation. They know the Trust is empty and most likely nonexistent. They know that without the subject loan being entrusted to a trust, no amount of writing can authorize the administration of the loan on behalf of the trust. They know there is potential liability for sanctions and punitive damages that could reach into the millions, but more importantly reach the press where homeowners will get the idea that maybe they can and ought to win.
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In my experience, the end result is usually a vast reduction in the amount demanded that is so steep that the homeowner feels constrained to accept it in exchange for accepting the risk that the parties with whom he/she is doing business have no right, title or interest in the loan.
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If the opposition were to produce a newly fabricated document the homeowner’s position strengthens. First the homeowner can seek to confirm the execution of the document by named “Trustee, on behalf of the named ‘Trust'”. Second the existence of a newly executed document may be used to argue that there was no privity or authorization before.

Wells Fargo “Lending” Securities It Didn’t Own

Translation: WFB was the “custodian” of alleged “mortgage-backed” certificates issued for the benefit of investors who paid billions of dollars for ownership of the certificates. WFB “Loaned” those alleged securities to brokers. The brokers in exchange provided “collateral” the proceeds of which were reinvested by WFB. In short, WFB was laundering the investors money for the sole benefit of WFB and not for the investors who owned the certificates and certainly to the detriment of the brokers and their buyers of derivative instruments based upon the loan of the securities.

This case reveals the flowering of multiple levels arising from false claims of securitization. First WFB issues certificates from a fictitious trust that owns nothing. Then it keeps both the money paid for those certificates and it keeps the certificates as well. On Wall Street this practice is called holding securities in “street name.” Then WFB engages in trading on securities it doesn’t own, but which are worthless anyway because the certificates only represent a promise from the REMIC trusts that exists only on paper.

It is all based upon outright lies. And that is why the banks get nervous when the issue of ownership of a debt, security or derivative becomes an issue in litigation. In this case the bank represented the trades as ownership or derivative ownership of “high grade money market instruments” such as “commercial paper or bank time deposits and CDs.”

None of it was true. WFB simply says that it thought that the “instruments” were safe. The lawsuit referred to in the linked article says they knew exactly what they were doing and didn’t care whether the instruments were safe or not. If the attorneys dig deeper they will find that the certificates’ promise to pay was not issued by an actual entity, that certificates were never mortgage-backed, and that WFB set it up so when there were losses it would not fall on WFB even though WFB was using the named trust basically as a fictitious name under which it operated.

So I continue to inquire: why does any court accept any document from WFB as presumptively valid? Why not require the actual proof?

Let us help you plan your 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).

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

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Hat Tip Bill Paatalo

see  WFB Securities Lending Scheme

The investments by WFB went into “mortgage backed assets.” Really? So let’s see how that works. First they create the certificates and sell them to investors even though neither the investors nor the trust have any interest in mortgage assets. Then they “loan” the same certificates to brokers, who provide collateral to WFB so that WFB can “reinvest” investor money using commingled investor money from a variety of sources.

Then derivatives on derivatives are sold as private contracts or insurance policies in which when the nonexistent trust assets are declared by WFB to have failed, in which WFB collects all the proceeds. The investors from all layers are screwed. And borrowers, as was originally planned, are screwed.

The lender to the borrower in the real world (where money is exchanged) are be the investors whose money was in the dynamic dark pool when the loan of money occurred. But the investors have no proof of ownership of the debt because of the false documents created by the “underwriter” bank.  The money from the second tier of investors is used to “purchase” the certificates WFB is “printing”. And then derivatives and hybrid derivatives and synthetic derivatives are sold multiplying the effect of every certificate issued. Such has the control over currency shifted from central banks who control around $8 trillion of fiat currency to the TBTF banks who boast a shadow banking market of $1 quadrillion ($1,000,000,000,000,000.00).

This every loan and every certificate is multiplied in the shadow banking market and converted into real money in the real world. Based upon prior securities analysis and review of disclosures from the publicly held banks it thus became possible for a “bank” to receive as much as $4.2 million on a $0.1 Million loan (i..e, $100,000). But in order to maintain the farce they must foreclose and not settle which will devalue the derivatives.

Then having done all that through control of a dynamic dark pool of investor money they must of course create the illusion of a robust lending market. True this particular case involves a business acquired when WFB acquired Wachovia. But WFB acquired Wachovia because it was the actual party in control of a false securitization scheme in which Wachovia acted primarily as originator and not lender.

WFB barely cares about the interest rate because they know the loans that are being approved won’t last anyway. But its trading desk secures extra profits by selling loans with a high interest rate, as though the loans had a low interest rate thereby guaranteeing two things: (1) guaranteed defaults that WFB can insure and (2) buying low (with investor money) and selling high (to investors).

All of which brings us back to the same point I raised when I first wrote (circa 2007) about the systemic fraud in securitization not as an idea, but in the way it had been put into practice. Using established doctrines in tax litigation there are two doctrines that easily clear up the intentional obfuscation by the banks: (1) The single transaction doctrine and (2) the step transaction doctrine. Yes it is that simple. If the investors didn’t part with their money then the loan of money would have never reached the desk of the closing agent. If the homeowners had not been similarly duped as to who and what was being done, they would never have signed on the dotted line.

To assume otherwise would be the same as assuming that borrowers were looking for a way to waste money on non-deductible down payments, improvements and furniture in exchange for a monthly payment that everyone knew they couldn’t afford.

 

BONY Mellon Sues Chase Bank et al for Misrepresentation

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

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see BONY Mellon Sues Chase et al Over Misrepresentations on Loans

It is interesting that at the same time that BONY Mellon has its name attached to foreclosures it is claiming exactly what the borrowers are claiming — misrepresentations about the loans themselves as well as misrepresentations about the mortgage backed securities allegedly issued by trusts in the name of BONY Mellon as Trustee.

The problem here is that while there are tantalizing hints about what was wrong with what Chase did, they don’t go so far as to say anything that would actually help borrowers (homeowners). Several commentators have singled out this pattern of non disclosure even in lawsuits and settlements. Elizabeth Warren brought it to light when she questioned investigators who found fatal defects in many if not most foreclosures. Matt Taibbi in Rolling Stone last week found that the settlements with the banks were really PR stunts to appease the public and confuse the judiciary.

The point is that all these cases are being settled for what appears to be big money. But if the allegations are true, then the settlements are actually fractions of a penny on the dollar. But everyone is afraid that if they blow the whistle on everything the repercussions will be vast — affecting the credibility of the Federal Reserve, the Department of Justice, and other regulators and officers of law enforcement. The fact that the effect has already been unimaginably vast — with 6+ million foreclosures and over 15 million displaced by crooked deals apparently is of no concern to the players, the government or even the insurers and investors.

Investors fail to realize that they can offset their losses by dealing directly with homeowners through servicers that actually represent their interests and that the investors are not bound by the pooling and servicing agreements because the loans never made it into the trust.

Verifying that the ‘Substitute Trustee’ is indeed a TRUST

BTW, I ask about verifying that the ‘Substitute Trustee’ is indeed a TRUST since I saw a post that made a point that any named ‘TRUSTEE’ must really be a TRUST.

Quality Loan Servicing was nominated by Litton Loan Service’s employee (via MERS) as the Substitute Trustee in place of ReconTrust.

I may have a case where BofA was in too many of the ‘roles’. The servicing was transferred on the very day the modified payments were to start per a signed and notarized mortgage modification agreement. The transfer was an attempt to justify the ‘mod’ not ‘happening’. RESPA does not agree with that. They ignored me. They never contacted me about any reason the mod was not occurring. I had been assured it was ‘my mod’. The BofA employees have stated that ‘all AG Mods’ were canceled. Well, they think that is the word. Actually the correct term is ‘BREACHED’.

So now I have some funny-looking documents being filed and what appears to be a bogus attempt to foreclose. Who knows who really has the note. Litton has filed documents saying that the ‘investor’ is CWABS with BoNY-MELLON as the trustee. Strangely BofA claims to be the beneficiary in more-recently filed documents in my court case. If BofA is ACTING for the investor, what the hell is Litton doing? The beneficiary LITTON should be ‘working for’ would seem to be the CWABS trustee. Certainly, I question whether BofA would have bought the mortgage back from the pooling (CWABS) once it was in litigation without advising the court at least. I do not understand how I can have BofA make the claim that they ARE the ’successor beneficiary’ when CWABS was otherwise identified as the ‘investor’.

Also, how would they deal with the original ‘Lender’ being a fictitious business name and the only beneficiary named is MERS as ‘nominal beneficiary’? Will I have more fictitious assignments to be looking for?

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