How to Follow the Money

Ultimately all debts, notes and mortgages (or deeds of trust) are about money. They are not about property. The property is incidental to the deal and ONLY comes about if there is a dispute in which there is a claim that you didn’t pay money that is owed to the owner of the mortgage deed or the beneficial owner of a deed of trust. The mortgage deed or deed of trust is conditional, not absolute like your deed to your property that names you as owner. There is no such thing as a fee simple absolute mortgage or encumbrance. It doesn’t exist in our jurisprudence or for that matter any jurisprudence. 

The ONLY reason your property can be legally sold, denying you future title and possession of the property is that you owe money to the party who foreclosed — or on whose behalf the foreclosure was initiated. Mastering this one fact will pull your head and that you attorney’s head out of the weeds. 

We take it as a given that you owe money. The question is whether there is a party that can be identified as the the one to whom the money is owed. If so, who is that? What is the identification, address and contact information for the party who is actually owed money from you.

Spoiler alert: So far the banks have successfully skirted the question of money. From funding of the initial loan to the proceeds of sale fo the property nobody has actually disclosed where the money came from and where the money went when payments were made or the property was liquidated.

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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.
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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And the absolute immutable truth is that the so-called investors (i.e., the ones who bought “certificates” or “mortgage bonds”) do not receive your mortgage payments nor do they receive the proceeds of the sale your home. So who actually wants the foreclosure and why? The truth is that the investors get paid in the sole discretion of the underwriter of the “certificates.” Their payment is not conditioned upon your payment.

They get paid ONLY because the underwriter promised to pay them based upon certain conditions which does NOT include the receipt of mortgage payments. They do not get paid because you promised to pay the investors nor because your promise to pay was sold to either the investors or the trust. That sale never occurred. 

How do I know this? Because I have asked two questions thousands of times in the last 12 years. First, to whom were my payments forwarded by the self-proclaimed servicer? Answer: None of my business. Second, who received the proceeds of liquidation of the foreclosed property? Answer: none of my business. 

Knowing the banking industry as I do, there was only one possible conclusion: if they answered the question they would either perjury themselves or they would be admitting that the party named as being entitled to foreclosure was not really entitled to foreclosure. You see it is well established law — for centuries — that only the owner of a debt can foreclosure on collateral. 

For convenience sake a holder of a promissory note can enforce the note but only the owner of the debt is entitled to foreclose. If the foreclosing party claims a representative capacity the to establish a prima facie case it must disclose the party whom they claim to be representing and prove that the party being represented is the owner of the debt. 

So the one area, pointed out by Charles Koppa in So.Cal. a decade ago is what happens after the sale is authorized and the property is liquidated. He was figuring out the relationship between the bid amount and the amount the underwriter claimed as unpaid servicer advances (in the role of self-proclaimed master servicer for the nonexistent trust). Here we knew the answer but we were lucky enough to get hold of copies of a check made out to BONY/Mellon as trustee (Blah blah). BONY mailed it to the servicer and the servicer mailed it to Chase (i.e., the underwriter and master servicer doing business as the nonexistent trust, like a DBA.

No trust and no investor ever received the money. Chase got it and lest you forget, remember that Chase was all about selling loans and derivatives based upon loans and synthetic derivatives based upon the derivatives. It was never about actually making loans where Chase could lose money or buying loan as that were going to be worthless of worth less. It was about selling them. So the revelation is that BONY never had a claim to the money and either did the nonexistent trust that was ignored once the foreclosure court proceedings were over. 

Our investigations so far, with considerable help from Bill Paatalo, shows that multiple transfers of title occur AFTER the foreclosure sale or shortly before signaling the real player who is going to get the money. So you might want to think about the sale of your property title as the beginning rather than the end. It is the beginning of an action (lawsuit) to vacate the sale and award damages. 

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.

Pay Attention! Look at the money trail AFTER the foreclosure sale

My confidence has never been higher that the handling of money after a foreclosure sale will reveal the fraudulent nature of most “foreclosures” initiated not on behalf of the owner of the debt but in spite of the the owner(s) of the debt.

It has long been obvious to me that the money trail is separated from the paper trail practically “at birth” (origination). It is an obvious fact that the owner of the debt is always someone different than the party seeking foreclosure, the alleged servicer of the debt, the alleged trust, and the alleged trustee for a nonexistent trust. When you peek beneath the hood of this scam, you can see it for yourself.

Real case in point: BONY appears as purported trustee of a purported trust. Who did that? The lawyers, not BONY. The foreclosure is allowed and the foreclosure sale takes place. The winning “bid” for the property is $230k.

Here is where it gets real interesting. The check is sent to BONY who supposedly is acting on behalf of the trust, right. Wrong. BONY is acting on behalf of Chase and Bayview loan servicing. How do we know? Because physical possession of the check made payable to BONY was forwarded to Chase, Bayview or both of them. How do we know that? Because Chase and Bayview both endorsed the check made out to BONY depositing the check for credit in a bank account probably at Chase in the name of Bayview.

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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OK so we have the check made out to BONY and TWO endorsements — one by Chase and one by Bayview supposedly — and then an account number that might be a Chase account and might be a Bayview account — or, it might be some other account altogether. So the question who actually received the $230k in an account controlled by them and then, what did they do with it. I suspect that even after the check was deposited “somewhere” that money was forwarded to still other entities or even people.

The bid was $230k and the check was made payable to BONY. But the fact that it wasn’t deposited into any BONY account much less a BONY trust account corroborates what I have been saying for 12 years — that there is no bank account for the trust and the trust does not exist. If the trust existed the handling of the money would look very different OR the participants would be going to jail.

And that means NOW you have evidence that this is the case since BONY obviously refused to do anything with the check, financially, and instead just forwarded it to either Chase or Bayview or perhaps both, using copies and processing through Check 21.

What does this mean? It means that the use of the BONY name was a sham, since the trust didn’t exist, no trust account existed, no assets had ever been entrusted to BONY as trustee and when they received the check they forwarded it to the parties who were pulling the strings even if they too were neither servicers nor owners of the debt.

Even if the trust did exist and there really was a trust officer and there really was a bank account in the name of the trust, BONY failed to treat it as a trust asset.

So either BONY was directly committing breach of fiduciary duty and theft against the alleged trust and the alleged trust beneficiaries OR BONY was complying with the terms of their contract with Chase to rent the BONY name to facilitate the illusion of a trust and to have their name used in foreclosures (as long as they were protected by indemnification by Chase who would pay for any sanctions or judgments against BONY if the case went sideways for them).

That means the foreclosure judgment and sale should be vacated. A nonexistent party cannot receive a remedy, judicially or non-judicially. The assertions made on behalf of the named foreclosing party (the trust represented by BONY “As trustee”) were patently false — unless these entities come up with more fabricated paperwork showing a last minute transfer “from the trust” to Chase, Bayview or both.

The foreclosure is ripe for attack.

Bank of New York Mellon

WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation.
Our services consist mainly of the following:
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For further information please call 954-495-9867 or 520-405-1688. You also may fill out our Registration form which, upon submission, will automatically be sent to us. That form can be found at https://fs20.formsite.com/ngarfield/form271773666/index.html?1452614114632. By filling out this form you will be allowing us to see your current status. If you call or email us at neilfgarfield@hotmail.com your question or request for service can then be answered more easily.
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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I have periodically reminded people that they should be carefully watching litigation between the perpetrators of the massive false securitization scheme. You really should see those cases, including tax cases, where the admissions and allegations in some cases directly contravene allegations by the same parties in foreclosure cases. It doesn’t bother them taking inconsistent positions because (a) nobody looks and (b) they will get away with it anyway, as long as Judges presume that all is well with the paperwork.
The prime issues in these cases revolve around a simple proposition. If the Trustee of a REMIC Trust was the Trustee of a REMIC Trust, why didn’t they act like it — demanding buy-backs, damages etc. for horrendous underwriting criteria that was opposite to what was promised in the prospectus, what was reported to the rating agencies and what was disclosed through press releases?
The answer is simple — there was no Trust, REMIC or otherwise. Investors who believed that the money would be managed by the Trust were intentionally deceived by the Underwriter/Master Servicer. The money did not go under Trustee management. Instead it went into the pocket of the Wall Street Bank that acted as the underwriter/master servicer.
While the terms of the Trust duties as spelled out in the prospectus and the Pooling and Servicing Agreement are craftily worded, it is apparent that the duties of the Trustee shrink as you read further and further. But under common law and apparently the TRUST INDENTURE ACT, a named Trustee who  accepts the assignment and is named in the Trust has duties that transcend the caveats that essentially leave the so-called Trustee with no duties at all.
Normally this would bother a prospective Trustee (US Bank, DEUTSCH, BONY/MELLON, Citi, BOA, Wells Fargo etc.). But what is STILL not being recognized is that the initial premise of the transaction never occurred. The money from the sale of the MBS to investors never made it into any account under management by the Trustee. It really was THERE that the named Trustee failed to act, even though they were recruited for their name (leasing their brand) for a monthly fee with no Trustee responsibilities. Upon issuance of the MBS from the Trust, the Trust was owed the proceeds. It never received the proceeds and the Trustee either didn’t know, didn’t care or both.
Josh Yager writes the following:

 

The preamble to the Uniform Prudent Investor Act notes, “The tradeoff in all investing between risk and return is identified as the fiduciary’s central consideration.”  For most trustees determining the return that was produced by the assets held in trust is a fairly straightforward exercise. Most investment managers are required to produce performance data that is SEC-compliant. However, defining whether the return experienced was appropriate, given the level of risk that was taken, is more complicated.

The Bogert treatise states, “The trustee cannot assume that if investments are legal and proper for retention at the beginning of the trust, or when purchased, they will remain so indefinitely. Rather, the trustee must systematically consider all the investments of the trust at regular intervals to ensure that they are appro­priate” (A. Hess, G. Bogert, & G. Bogert, Law of Trusts and Trustees §684, pp.145–146 (3d ed. 2009)).

To fulfill this duty to monitor the risk and return of the trust assets a prudent trustee, acting in good faith, will make the following inquiries:

Target Return: The manager’s actual performance will initially be compared to the trustee’s stated return objective. This begs the question whether the trustee has taken steps to define a targeted rate of return for the assets of which they are responsible. If they have not, they are encouraged to do so. The Target Return is stated as an absolute number (e.g., 7.0%) or as a real, inflation-adjusted number (e.g., Inflation + 4.0%).

Strategic Benchmark: The manager’s actual performance will be tested to determine whether any strategic value has been added by the manager.  This test answers the specific question, “Have the manager’s strategic investment choices produced a better outcome than a simple investment in a few major asset classes?”  This is done by comparing the actual performance and risk to that of a simple “vanilla” Strategic Benchmark that is historically consistent with the trustee’s stated Target Return (see above).  The Strategic Benchmark is a combination of Russell 3000 (US Stock), MSCI ACWI ex-US (Int’l stock including Emerging Markets), and Barclays 1-10 Yr Muni (Bonds).  For tax-deferred/free accounts, the bond component will be the BOFAML US Corp/Govt 1-10 Yr.

  1. The stock-to-bond ratio used is a mix of stocks and bonds which historically matched the client’s Target Return over the last 50 years.
  2. The Russell 3000 and MSCI ACWI ex-US are intended to represent the entire stock universe.  For example, the Russell 3000 includes US Small Cap stocks, US Value stocks, etc., and the MSCI ACWI ex-US includes Emerging Market stocks.
  3. The US-to-Int’l ratio is fixed at 70/30 to represent the “home bias” that investors of any given country typically exhibit and to recognize that the client usually spends US Dollars.
  4. For example, if the client’s Target Return is 7.0% (or Inflation + 4.0%), the Strategic Benchmark will be 40% Barclays 1-10 Yr Muni, 42% Russell 3000 and 18% MSCI ACWI ex-US.

Risk: In addition to measuring the manager’s performance against these two benchmarks, there must be an evaluation of the risk that has been accepted by each manager. Some forms of risk are quantitative and can be discovered through statistical analysis. Other types of risk cannot be deduced from statistical inquiry and require a more subjective analysis.

  1. Quantitative Risk Measures
  • Standard Deviation / Downside Deviation
  • Value-at-Risk
  • Beta
  • Max Drawdown
  • High Month Return / Low Month Return
  • Sharpe Ratio (risk-adjusted return)
  • M-Squared (risk-adjusted return)
  • Information Ratio (risk-adjusted return)
  1. Qualitative Risks
  • Lack of Liquidity: The % of the trust that cannot be liquidated within 5 business days
  • Concentration: The % of the trust held in the single largest security
  • Leverage: The % of leverage used by the trust as reflected in a debt-to-equity ratio
  • Lack of Valuation: The % of the trust assets that do not have daily valuation

Most investment managers, if provided with this overview, can help the trustee create a record that these factors have been considered and documented. If the investment manager is unable to help the trustee develop such a record, a prudent trustee will take steps to independently evaluate these factors or find an investment manager that is willing and able to do so.

“FREE HOUSE” in NJ Bankruptcy Court

For further information and assistance please call 954-495-9867 and 520-405-1688. We will be covering this decision on the Neil Garfield show tonight.

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Click in to tune in at The Neil Garfield Show

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

see http://stopforeclosurefraud.com/2014/11/18/in-re-washington-bankr-court-d-new-jersey-morris-county-homeowner-gets-a-free-house/

also see Senator Elizabeth Warren Ramping Up Attack: When Will “Principal reduction” become a reality?

This case is notable for several reasons:

  1. The Judge expresses outright that it is general judicial bias that homeowner should not prevail in foreclosure litigation.
  2. Nevertheless this Judge trashes the the claim of SPS (Specialized Loan Services) and BONY (Bank of New York) Mellon leaving the homeowner with what the Judge calls a free house.
  3. The Judge concludes that the mortgage was unenforceable and that the note was unenforceable after a careful examination of the statute of limitations under New Jersey law.
  4. The Judge concludes that the mortgage is void, not just unenforceable, thus clearing title.

While we can be pleased with the result, some of the reasoning might not withstand an appeal, if the foreclosers take the risk of filing one.

Here are some interesting excerpts:

“No one gets a free house.” This Court and others have uttered that admonition since the early days of the mortgage crisis, where homeowners have sought relief under a myriad of state and federal consumer protection statutes and the Bankruptcy Code. Yet, with a proper measure of disquiet and chagrin, the Court now must retreat from this position, as Gordon A. Washington (“the Debtor”) has presented a convincing argument for entitlement to such relief. So, with figurative hand holding the nose, the Court, for the reasons set forth below, will grant Debtor’s motion for summary judgment.
The Defendants accelerated the maturity date of the loan to the June 1, 2007 default date, as acknowledged in the Assignment (dkt. 7, Exhibit L).[10] Moreover, neither the Debtor nor the Defendants have taken any measures under the note or mortgage, or under the Fair Foreclosure Act, to de-accelerate the debt, and the Defendants have further failed to file a foreclosure complaint within 6 years of the accelerated maturity date as required by N.J.S.A. § 2A:50-56.1(a). Accordingly, the Defendants are now time-barred from filing a foreclosure complaint and from obtaining a final judgment of foreclosure.

11 U.S.C. § 502(b)(1) (emphasis added). 11 U.S.C. § 506 controls the allowance of secured claims and provides that, if the claim underlying the lien is disallowed, then the lien is void:

(a)(1) An allowed claim of a creditor secured by a lien on property in which the estate has an interest, or that is subject to setoff under section 553 of this title, is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property, or to the extent of the amount subject to setoff, as the case may be, and is an unsecured claim to the extent that the value of such creditor’s interest or the amount so subject to setoff is less than the amount of such allowed claim. Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor’s interest.

(d) To the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void, unless [conditions not relevant here exist].
As explained above, by application of N.J.S.A. § 2A:50-56.1(a) and (c), the Defendants are time-barred under New Jersey state law from enforcing either the note or the accelerated mortgage. As a result, Defendants’ proof of claim 7 must be disallowed under 11 U.S.C. § 502(b)(1) as unenforceable against the Debtor or against Debtor’s property under applicable state law. Having determined that Defendants do not have an allowed secured claim, the underlying lien is deemed void pursuant to 11 U.S.C. §§ 506(a)(1) and (d).[11]
In light of Defendants’ acceleration of the maturity date of the underlying debt as of June 1, 2007, and because neither Debtor nor Defendants took any action under either the mortgage instruments, or the Fair Foreclosure Act, to de-accelerate the maturity date, Defendants’ right to file a foreclosure complaint expired 6 years after the June 1, 2007 acceleration date under N.J.S.A. § 2A:50-56.1(a). Given that Defendants’ putative secured claim is unenforceable under 11 U.S.C. § 502(b)(1), by applicable New Jersey statute, their mortgage lien is void under 11 U.S.C. § 506(d), and the Debtor retains the property, free of any claim of the Defendants. Debtor is to submit a form of judgment. The Court will proceed to gargle in an effort to remove the lingering bad taste.
11] In as much as the Court finds that the Defendants are time-barred from enforcing the note or the mortgage, it is not necessary to address Debtor’s arguments that Defendants lack standing to enforce the note and mortgage based on alleged defects in the Assignment or the alleged impact of a Settlement Agreement.

FLORIDA SUPREME COURT RIPS UP BANKS’ PLAYBOOK

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COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary CLICK HERE TO GET COMBO TITLE AND SECURITIZATION REPORT

EDITOR’S COMMENT: Here is the game:

A party comes into court filing a complaint against someone who is essentially unable to defend themselves. The suit is fake and uses fraudulent documents to support it. In the usual course of events the “defendant” defaults, judgment is entered and the faker gets to enforce the judgment, driving the hapless defenseless person who was sued into bankruptcy and depression, marriage breakups etc. You know the routine.

(By the way the North Caroline Court has stated that just because you failed to object doesn’t mean that the party trying to foreclose doesn’t need to prove its case, which is why I think the last couple of days have been the turning point where borrowers get their day in court and pretender lenders get their days or years in jail).

So back to our example. Enter the borrower, usually not represented by counsel because the legal profession is clueless for the most part on the dynamics of fraud in securitized loans. The borrower challenges the attempt at foreclosure (or any other type of lawsuit where this playbook can be used). The borrower shows the court that the suit is a fake and that the documents were fabricated, forged, false — a fraud upon the court. The trial court dismisses the fake action and agrees to hear a motion for contempt at which the faker will be punished for all its wrongdoing, right?

Not so fast. The Bank Playbook provides easy to understand instructions to lawyers representing the fakers. Force the issue as far as you can but dismiss the action before the motion for contempt can be heard. This will deprive the court of jurisdiction over the case and the Judge will be powerless to enter an order for sanctions. End of case, for now, and maybe we will file using other but better fabricated false documents another day. No risk to the lawyer, the Bank or servicer, or anyone else, leaving the hapless homeowner in the dust. This play has been working perfectly for years. Suddenly it ground to a halt yesterday in Florida, and will most likely spread the word like wildfire as Courts across the country realize they have been played for fools.

So the borrower in this case said “wait a minute!” The borrower/defendant filed an appeal that essentially said that the filing of a false lawsuit with false documents invokes the jurisdiction of the Court and that the Court decides when the case is over, not the litigants, if there are any other important issues to be decided — like committing fraud upon the Court.The borrower contends that the filing of the dismissal did not deprive the Court of jurisdiction, it merely rendered the legal issues presented by the lawsuit to be moot, which is the point that the Florida Supreme Court agreed with.

So the case goes up to the District Court of Appeal which says, well, we don’t know for sure, so we certify the question to the Supreme Court. The faker “settles” with (read that “Pays off”) the borrower under some agreement that is sealed under confidentiality. There are thousands of those confidential agreements now.

So the faker and the borrower sign the agreement and sign a notice to the Supreme Court that the case has been settled and that it is over, done, kaput! In the playbook of the Banks this deprives the Supreme Court of jurisdiction even in a case designated by the lower appellate court as being of great public importance and in which the appellate court below cites their own experience with many cases involving fake claims with fraudulent documents. Not so fast.

The Supreme Court of Florida said quite correctly that WE decide when the case is over, especially when it is of great public importance, and you, faker, don’t  dictate to us when we do or don’t have jurisdiction. If you filed a fake lawsuit with fraudulent documents, we want to consider the options of the trial judge and stop such practices from happening. The fact that the case is moot between you and the the victim of your little game does not mean we can’t hear the case. You can come to oral argument if you like, and you can submit a brief or not. But we ARE going to hear this case and we are going to issue an opinion. FINALLY A COURT WITH THE COURAGE OF ITS CONVICTIONS.

OOPS! BONY, US BANK, BOA, Wells Fargo, Ocwen, Deutsch, Countrywide, JP Morgan, et al now have a serious problem. In prior cases where a court levied sanctions against these fakers, the sanctions have been rather high, including one case in Massachusetts where an infuriated judge levied over $800,000 against the lawyers and the client, Wells Fargo.6 million foreclosures nationwide, most of which fall into the faker category.

What could the liability of the lawyers and the banks be? Well just for starters, you can bet that most of the lawyers are going to be referred to their bar associations for discipline which will result in either suspension or revocation of their license. But beside that here is what awaits the financial industry on 6 million foreclosures.

  • If the fine is $1,000, the total fines will be $6 Billion. But sorry boys, that size fine is less than a slap on the wrist these days so its doubtful that the judge upon learning that a fake suit had been filed with fraudulent documents will not fine the participants — lawyer and client—  far more than that. 
  • If the fine is $10,000, then the total fines will be $60 billion. Sorry again, considering the gravity of the situation, the corruption of title registries, the destructive impact on our society as a whole, most courts are going to go for more than that as well as referring for criminal prosecution and bar grievance procedure. 
  • If the fine is $100,000 each against the lawyers and the client, for each case, which is around what I think the fine is likely to be (at a Minimum), then the total exposure is $1.2 trillion, half against the banks and half against the lawyers.
  • And if they follow the model established in other courts, the fine could be $1 million each against the lawyers and the client, FOR EACH CASE, (if the motion for contempt is brought by the borrower) then the total exposure is around $12 trillion, $6 trillion against the banks and $6 trillion against the lawyers. Considering the most recent revelation of $29 trillion bailouts from the federal Reserve alone on false claims of losses, a fine of one-third that amount doesn’t seem out of line even if the dollar amount sounds high. Bankruptcy anyone?

MAYBE THAT BANK PLAYBOOK WAS NOT SO SMART AFTER ALL.

Settlement won’t prevent Fla. foreclosure hearing

By BILL KACZOR

Associated Press

TALLAHASSEE, Fla. — Parties in a Florida mortgage foreclosure lawsuit focusing on allegations of tainted documents will get their day in the Florida Supreme Court even though neither side wants it.

A sharply divided high court on Thursday refused a request by borrower and lender alike to dismiss the Palm Beach County case. They had sought the dismissal after agreeing to settle the case before the justices could hear it.

In a 4-3 opinion, the majority justices wrote that the borrower’s appeal was too important to dismiss, as it raises a question that “transcends the individual parties to this action because it has the potential to impact the mortgage foreclosure crisis throughout this state.”

That question is whether a trial judge can penalize a party for committing a “fraud on the court” if that party voluntarily dismisses the case before it’s resolved. Two lower courts said they cannot. The high court next will consider arguments on that issue.

The majority wrote that judges and litigants also need guidance from the Supreme Court and that the legal issue has implications beyond mortgage cases.

Florida’s collapsing real estate market has resulted in thousands of foreclosures, but officials have turned up many instances of fraudulent and erroneous filings.

They include documents bearing the signatures of so-called “robo-signers” – people hired to sign foreclosure papers in assembly line fashion without necessarily knowing what’s in them.

Those findings resulted in civil and criminal investigations, the collapse of two major foreclosure law firms and the temporary shutdown of foreclosure filings by many lenders.

The high court’s ruling came in a foreclosure filed by the Bank of New York Mellon. The defendant, Roman Pino, alleged the bank filed a forged document to deceive the court. He asked the judge to penalize the bank by denying it any right to foreclose on the mortgage.

The judge denied his request because the bank had voluntarily dismissed the complaint. The 4th District Court of Appeal affirmed that decision but asked the Supreme Court to rule on the issue, certifying it as a “question of great public importance.”

Pino appealed but then joined the bank in asking the Supreme Court to dismiss the case after they settled.

Chief Justice Charles Canady acknowledged in his dissent that the high court has on occasion rejected a stipulation for dismissal, but he argued that retaining jurisdiction before both sides have submitted written briefs is unprecedented.

The ruling will force the parties to argue a case that neither side wants to pursue, Canady noted.

“They should not be dragooned into litigating a matter that is no longer in controversy between them simply because this court determines that an issue needs to be decided,” Canady wrote.

Justices Ricky Polston and Peggy Quince concurred with Canady’s dissent.

The majority justices, though, wrote it’s Canady’s interpretation that goes against precedent. They said it would require the high court to recede from past decisions that denied dismissals in similar circumstances.

They also noted Pino filed an initial brief before the settlement although the bank had not.
Read more: http://www.miamiherald.com/2011/12/08/2537386/settlement-wont-prevent-fla-foreclosure.html#ixzz1g3eoiucH

LAWYER ADMITS SIGNING DOCUMENTS AS OFFICER OF HIS CLIENT

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary SEE LIVINGLIES LITIGATION SUPPORT AT LUMINAQ.COM

EDITOR’S COMMENT: I’d like to see the expression of someone who sits on a Bar grievance committee that meets out discipline to lawyers, when they read this. In any situation, until the mortgage meltdown, if a lawyer signed documents and then presented them as his client’s “evidence” he would be subject to severe discipline if not disbarment. But as long as we have trillions of dollars at stake, nobody at the Bar associations is saying anything. Here we have, courtesy of stopforeclosurefraud.com, part of the transcript in which the lawyer testifies rather arrogantly, that “sure” he signed the documents, so what? No, he didn’t ever speak to anyone about doing it, no he never obtained permission or instructions,  he just did it. 

The bottom line is that as long as we delay applying the law as it was written and followed for hundreds of years concerning property rights, contract rights, lending and attorney misconduct, the foreclosures will continue, the housing mess will get larger, and the economy will continue to sag under the weight of 80 million mortgage transactions that in any other setting would be called grand theft. And as long as we continue to hear that correction and restoration of the wealth taken from investor-lenders and homeowners would be unfair to those who were not defrauded, we will continue to be subjected to Alice in Wonderland policies.

ROY DIAZ TRANSCRIPT

Full Deposition Transcript of ROY DIAZ Shareholder of Smith, Hiatt & Diaz, P.A. Law Firm

Excerpts:

Q. So through that corporate authority as
Exhibit 4 to this deposition, MERS assented to the terms
Of this assignment of mortgage?

A. Through me.

Q. So it was you that assented to the terms of
This assignment of mortgage.

A. The one in this case, yes.

Q. And no one else.

A. Correct

Q. And you signed as vice president of MERS
acting solely as a nominee for America’s Wholesale
Lender; is that correct?

A. Yes, it is.

Q. How did you know that MERS was nominee for
America’s Wholesale Lender?

A. By reviewing documentation.

Q. What documentation?

A. I don’t specifically recall what I reviewed
In this case to see that, to determine that, but I would
have reviewed either the mortgage or I would have
reviewed other documentation that would have established
that to me.

Q. So in this case you don’t remember a single
Document that you looked at that would establish the
Nominee status of MERS for America’s Wholesale Lenders;
Is that correct?

A. I don’t

Q. Did someone at America’s Wholesale Lender
Tell you that MERS was acting as the nominee?

A. No.

Q. Did someone at MERS tell you they were
Acting as Nominee for America’s Wholesale Lender?

A. NO.

Q. Was America’s Wholesale Lender in existence
On May 19, 2010?

A. don’t now.

Q. Did you check that before signing this
assignment of mortgage?

A. No.

<SNIP>

Q. Now, you’ve said you review the MERS
Website and you’ve seen documents like this, like
Composite Exhibit 6. Any reason why you wouldn’t review
the documents contained in Exhibit 6 before executing the
assignment of mortgage?

A. It’s not necessary.

Q. Why not?

A. Because it’s not. Because I decided it’s
not.

Q. You as vice president of MERS?

A. In every possible capacity as it relates to
This case.

Q. Did you sign this assignment of mortgage
after being retained as counsel for the plaintiff?

A. After my law firm was retained?

Q. (Nods head.)

A. Is that the question?

Q. Sure.

A. Yes.

Q. Okay. So you executed an assignment to be
Used as evidence in your case, correct?

A. Sure.

Q. Is that a yes?

A. It’s a sure.

Q. Is that a yes o a no?

A. You said sure earlier. Was that a yes or a
No?

Q. Okay. So…

A. It’s a yes.

Q. It’s a yes.

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