CHECKLIST — FDCPA Damages and Recovery: Revisiting the Montana S Ct Decision in Jacobson v Bayview

What is unique and instructive about this decision from the Montana Supreme Court is that it gives details of each and every fraudulent, wrongful and otherwise illegal acts that were committed by a self-proclaimed servicer and the “defective” trustee on the deed of trust.

You need to read the case to see how many different times the same court in the same case awarded damages, attorney fees and sanctions against Bayview who persisted in their behavior even after the judgment was entered.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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This case overall stands for the proposition that the violations of federal law by self proclaimed servicers, trusts, trustees, substituted trustees, etc. are NOT insignificant or irrelevant. The consequences of merely applying the law in a fair and balanced way could and should be devastating to the TBTF banks, once the veil is pierced from servicers like Bayview, Ocwen et al and the real players are revealed.

I offer the following for legal practitioners as a checklist of issues that are usually present, in one form or another, in virtually all foreclosure cases and the consequences to the bad actors when the law is actually applied. The interesting thing is that this checklist does not just represent my perspective. It comes directly from the Jacobson decision by the high court in Montana. That decision should be read, studied and analyzed several times. You need to read the case to see how many different times the same court in the same case awarded damages, attorney fees and sanctions against Bayview who persisted in their behavior even after the judgment was entered.

One additional note: If you think about it, you can easily see how this case represents the overall infrastructure employed by the super banks. It is obvious that all of Bayview’s actions were at the behest of Citi, who like any other organized crime figure, sought to avoid getting their hands dirty. The self proclamations inevitably employ the name of US Bank whose involvement is shown in this case to be zero. Nonetheless the attorneys for Bayview and Peterson sought to pile up paper documents to create the illusion that they were acting properly.

  1. FDCPA —abusive debt collection practices by debt collectors
  2. FDCPA who is a debt collector — anyone other than the creditor
  3. FDCPA Strict Liability 
  4. FDCPA for LEAST SOPHISTICATED CONSUMER
  5. FDCPA STATUTORY DAMAGES
  6. FDCPA COMPENSATORY DAMAGES
  7. FDCPA PUNITIVE DAMAGES
  8. FDCPA INHERENT COURT AUTHORITY TO LEVY SANCTIONS
  9. CUMULATIVE BAD ACTS TEST — PATTERN OF CONDUCT
  10. HAMP Modifications Scam — initial and incentive payments
  11. Estopped and fraud: 90 day delinquency disinformation — fraud and UPL
  12. Rejected Payment
  13. Default Letter: Not authorized because sender is neither servicer nor interested party.
  14. Default letter naming creditor
  15. Default letter declaring amount due — usually wrong
  16. Default letter with deadline date for reinstatement: CURE DATE
  17. Late charges improper
  18. Extra interest improper
  19. Fees even after they lose added to balance “due.”
  20. Notice of acceleration based upon default letter which contains inaccurate information. [Not authorized because sender is neither servicer nor interested party.]
  21. Damages: Negative credit rating — [How would bank feel if their investment rating dropped? Would their stock drop? would thousands of stockholders lose money as a result?]
  22. damages: emotional stress
  23. Damages: Lost opportunities to save home
  24. Damages: Lost ability to receive incentive payments for modification
  25. FDCPA etc: Use of nonexistent or inactive entities
  26. FDCPA Illegal notarizations
  27. Illegal notarizations on behalf of nonexistent or uninvolved entities.
  28. FDCPA naming self proclaimed servicer as beneficiary (creditor/mortgagee)
  29. Assignments following self proclamation of beneficiary (creditor/mortgagee)
  30. Falsely Informing homeowner they cannot reinstate
  31. Wrongful appointment of Trustee under deed of trust
  32. Wrongful and non existent Power of Attorney
  33. False promises to modify
  34. False representations to the Court
  35. Musical entities
  36. False and fraudulent utterance of a document
  37. False and fraudulent recording of a false document
  38. False representations concerning “US Bank, Trustee” — a whole category unto itself. (the BOA deal and others who “sold” trustee position of REMICs to US Bank.) 

Jesinoski Update: Homeowner, Bank and Court All Get it Wrong

We get it. Judges don’t like statutory rescission under TILA. They are not required to like TILA rescission but they are required to follow it. This decision openly defies the SCOTUS ruling and refuses to apply it.

Despite clear legislative intent to prevent banks from stonewalling rescission they are succeeding in doing so nonetheless as they play upon the bias of courts against TILA Rescission.

This Federal Judge attempts to grapple with the issue of damages claimed by Jesinoski’s rescission. It is stunning that these are the same people who argued the case before the Supreme Court of the United States (SCOTUS). The plain truth is that nobody in that courtroom seemed to understand rescission or how to apply it. The singular overriding point is that the only substantive part of the rescission statute is that when mailed, rescission is effective and the loan contract is canceled, the mortgage and note are void.  There is no maybe in that statement. Nor is there a sentence that starts with “well, not if….”.

It appears in this case that this Jesinoski proceeding clouded the issues when plaintiff sued for damages under rescission. In so doing they apparently were trying to prove the basis of their rescission which was sent, as per SCOTUS, within the 3 years. Pleading the basis of rescission was a mistake because it raised the very issue that the statute and the SCOTUS decision said was unnecessary. The factual issue for Plaintiff was whether the rescission had been sent. PERIOD. Whether it was proper when sent was an issue the Defendant was required to raise, not the Plaintiff.

The next move within 20 days of receipt of the rescission would be for a creditor to plead a case to vacate the rescission. The danger here is that this decision could be affirmed because it was Jesinoski who raised the issue of whether or not the rescission was properly sent. Jesinoski might have snatched defeat from the jaws of victory. By raising the issue of whether the rescission was proper, Jesinoski might have waived their objection that would be based upon the fact that no creditor had filed any lawsuit at any time, much less within the 20 day window.

But the court probably erred when it ignored the fact that the rescission was effective, plain and simple. It compounded the error by effectively ruling that rescission was only effective if a Court said it was effective and only if the borrower showed the ability to tender the full amount allegedly owed. In short this federal Judge was effectively overruling SCOTUS — a legal impossibility.

The statute and the SCOTUS decision on Jesinoski both clearly state that neither a lawsuit nor tender nor anything else is required of the borrower in the unique statutory scheme of rescission. The court is once again re-introducing common law rescission in direct contravention of the unanimous SCOTUS decision. Justice Scalia made it clear that NOTHING is required from the borrower after sending that notice.

Once the rescission is effective, the Court can only vacate it upon timely proper pleading from a party claiming injury. All the rest of the rescission statute is procedural. The failure of the creditor to actually bring an action to vacate the rescission within 20 days was fatal. Any other reading would require us to overrule SCOTUS and re-write the statute. It would mean that the rescission is NOT effective when mailed despite the clear wording of the statute that says it IS effective when mailed.

We get it. Judges don’t like statutory rescission under TILA. They are not required to like TILA rescission but they are required to follow it. This decision openly defies the SCOTUS ruling and refuses to apply it.

But the Plaintiff seems to have contributed to the problem. The damages sought are not based upon whether the rescission was proper. It was based upon the statute that says only if all three conditions are satisfied may the creditor demand any money. One of those conditions is the payment of all money ever paid to the “lender”. Those are the damages.

The issue is only the factual determination of the amount of those damages — not whether they are due at all. All three parties seem to have missed that point — Plaintiff, Defendant and Judge.

By inserting the tender requirement the Judge was not only ruling opposite to the content of the statute and opposite to the SCOTUS decision; it was expressly opposite the reasoning behind the “no-tender” component of TILA rescission, to wit: that payment could only be requested after the cancellation of the note, the release of the mortgage encumbrance, and the return of all money paid by the borrower since inception.

The clear reasoning behind this was that legislators in Congress expressly did not want to provide any method of stonewalling rescission. By requiring the disgorgement of money and the release of the encumbrance, the borrower was given the means to pay through application of the money received from the bank and the ability to get a new mortgage without damage to his/her/their credit. It was presumed by Congress that virtually no homeowner would have the means to tender without being able to cancel the old mortgage, release the encumbrance and get back their money FIRST.

Judges seem not to like the punitive nature of the statute. It is intended to be punitive, covering a wide array of possible lending violations and failures — instead of establishing a huge Federal agency that would review every mortgage loan.

The idea was to make the consequences of such behavior so gothic that the banks would police themselves. There is no Judge in the country who has the power or authority to re-write this very clear statute to match their own perceptions and belief that this statute is too draconian in its results. Public policy is for the legislative branch to decide. By resisting TILA rescission courts are encouraging more of the same bank behavior that still threatens all of the world’s economies and societies. By refusing to apply TILA rescission the courts are making themselves complicit in the greatest economic crime in human history.

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Larry D. Jesinoski and Cheryle Jesinoski, individuals, Plaintiffs,
v.
Countrywide Home Loans, Inc., d/b/a America’s Wholesale Lender, subsidiary of Bank of America N.A.; BAC Home Loans Servicing, LP, a subsidiary of Bank of America, N.A., a Texas Limited Partnership f/k/a Countrywide Home Loans Servicing, LP; Mortgage Electronic Registration Systems, Inc., a Delaware Corporation; and John and Jane Does 1-10, Defendants.

Civil No. 11-474 (DWF/FLN).United States District Court, D. Minnesota.

July 21, 2016.Larry D. Jesinoski, Plaintiff, represented by Bryan R. Battina, Trepanier MacGillis Battina, P.A. & Daniel P. H. Reiff, Reiff Law Office, PLLC.

Cheryle Jesinoski, Plaintiff, represented by Bryan R. Battina, Trepanier MacGillis Battina, P.A. & Daniel P. H. Reiff, Reiff Law Office, PLLC.

Countrywide Home Loans, Inc., Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

BAC Home Loans Servicing, LP, Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

Mortgage Electronic Registration Systems, Inc., Defendant, represented by Andre T. Hanson, Fulbright & Jaworski LLP, Joseph Mrkonich, Fulbright & Jaworski LLP, Ronn B. Kreps, Fulbright & Jaworski LLP & Sparrowleaf Dilts McGregor, Norton Rose Fulbright US LLP.

MEMORANDUM OPINION AND ORDER

DONOVAN W. FRANK, District Judge.

INTRODUCTION

This matter is before the Court on a Motion for Summary Judgment brought by Defendants Countrywide Home Loans, Inc. (“Countrywide”), Bank of America, N.A. (“BANA”) and Mortgage Electronic Registration Systems, Inc. (“MERS”) (together, “Defendants”) (Doc. No. 51).[1] For the reasons set forth below, the Court grants Defendants’ motion.

BACKGROUND

I. Factual Background

This “Factual Background” section reiterates, in large part, the “Background” section included in the Court’s April 19, 2012 Memorandum Opinion and Order. (Doc. No. 23.)

On February 23, 2007, Plaintiffs Larry Jesinoski and Cheryle Jesinoski (collectively, “Plaintiffs”) refinanced their home in Eagan, Minnesota, by borrowing $611,000 from Countrywide, a predecessor-in-interest of BANA. (Doc. No. 7 (“Am. Compl.”) ¶¶ 7, 15, 16, 17; Doc. No. 55 (“Hanson Decl.”) ¶ 5, Ex. D (“L. Jesinoski Dep.”) at 125.) MERS also gained a mortgage interest in the property. (Am. Compl. ¶ 25.) Plaintiffs used the loan to pay off existing loan obligations on the property and other consumer debts. (L. Jesinoski Dep. at 114-15; Hanson Decl. ¶ 6, Ex. E (“C. Jesinoski Dep.”) at 49-50; Am. Compl. ¶ 22.)[2] The refinancing included an interest-only, adjustable-rate note. (L. Jesinoski Dep. at 137.) Plaintiffs wanted these terms because they intended to sell the property. (L. Jesinoski Dep. at 125-26, 137; C. Jesinoski Dep. at 38, 46-7.)

At the closing on February 23, 2007, Plaintiffs received and executed a Truth in Lending Act (“TILA”) Disclosure Statement and the Notice of Right to Cancel. (Doc. No. 56 (Jenkins Decl.) ¶¶ 5, 6, Exs. C & D; L. Jesinoski Dep. at 61, 67, 159; C. Jesinoski Dep. at 30-33; Hanson Decl. ¶¶ 2-3, Exs. A & B.) By signing the Notice of Right to Cancel, each Plaintiff acknowledged the “receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” (Jenkins Decl. ¶¶ 5, 6, Exs. C & D.) Per the Notice of Right to Cancel, Plaintiffs had until midnight on February 27, 2007, to rescind. (Id.) Plaintiffs did not exercise their right to cancel, and the loan funded.

In February 2010, Plaintiffs paid $3,000 to a company named Modify My Loan USA to help them modify the loan. (L. Jesinoski Dep. at 79-81; C. Jesinoski Dep. at 94-95.) The company turned out to be a scam, and Plaintiffs lost $3,000. (L. Jesinoski Dep. at 79-81.) Plaintiffs then sought modification assistance from Mark Heinzman of Financial Integrity, who originally referred Plaintiffs to Modify My Loan USA. (Id. at 86.) Plaintiffs contend that Heinzman reviewed their loan file and told them that certain disclosure statements were missing from the closing documents, which entitled Plaintiffs to rescind the loan. (Id. at 88-91.)[3] Since then, and in connection with this litigation, Heinzman submitted a declaration stating that he has no documents relating to Plaintiffs and does not recall Plaintiffs’ file. (Hanson Decl. ¶ 4, Ex. C (“Heinzman Decl.”) ¶ 4.)[4]

On February 23, 2010, Plaintiffs purported to rescind the loan by mailing a letter to “all known parties in interest.” (Am. Compl. ¶ 30; L. Jesinoski Dep., Ex. 8.) On March 16, 2010, BANA denied Plaintiffs’ request to rescind because Plaintiffs had been provided the required disclosures, as evidenced by the acknowledgments Plaintiffs signed. (Am. Compl. ¶ 32; L. Jesinoski Dep., Ex. 9.)

II. Procedural Background

On February 24, 2011, Plaintiffs filed the present action. (Doc. No. 1.) By agreement of the parties, Plaintiffs filed their Amended Complaint, in which Plaintiffs assert four causes of action: Count 1—Truth in Lending Act, 15 U.S.C. § 1601, et seq.; Count 2—Rescission of Security Interest; Count 3—Servicing a Mortgage Loan in Violation of Standards of Conduct, Minn. Stat. § 58.13; and Count 4—Plaintiffs’ Cause of Action under Minn. Stat. § 8.31. At the heart of all of Plaintiffs’ claims is their request that the Court declare the mortgage transaction rescinded and order statutory damages related to Defendants’ purported failure to rescind.

Plaintiffs do not dispute that they had an opportunity to review the loan documents before closing. (L. Jesinoski Dep. at 152-58; C. Jesinoski Dep. at 56.) Although Plaintiffs each admit to signing the acknowledgement of receipt of two copies of the Notice of Right to Cancel, they now contend that they did not each receive the correct number of copies as required by TILA’s implementing regulation, Regulation Z. (Am. Compl. ¶ 47 (citing C.F.R. §§ 226.17(b) & (d), 226.23(b)).)

Earlier in this litigation, Defendants moved for judgment on the pleadings based on TILA’s three-year statute of repose. In April 2012, the Court issued an order granting Defendants’ motion, finding that TILA required a plaintiff to file a lawsuit within the 3-year repose period, and that Plaintiffs had filed this lawsuit outside of that period. (Doc. No. 23 at 6.) The Eighth Circuit affirmed. Jesinoski v. Countrywide Home Loans, Inc., 729 F.3d 1092 (8th Cir. 2013). The United States Supreme Court reversed, holding that a borrower exercising a right to TILA rescission need only provide his lender written notice, rather than file suit, within the 3-year period. Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790, 792 (2015). The Eighth Circuit then reversed and remanded the case for further proceedings. (Doc. No. 38.) After engaging in discovery, Defendants now move for summary judgment.

DISCUSSION

I. Summary Judgment Standard

Summary judgment is appropriate if the “movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Courts must view the evidence and all reasonable inferences in the light most favorable to the nonmoving party. Weitz Co. v. Lloyd’s of London, 574 F.3d 885, 892 (8th Cir. 2009). However, “[s]ummary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed `to secure the just, speedy and inexpensive determination of every action.'” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986) (quoting Fed. R. Civ. P. 1).

The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Enter. Bank v. Magna Bank of Mo., 92 F.3d 743, 747 (8th Cir. 1996). A party opposing a properly supported motion for summary judgment “must set forth specific facts showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986); see also Krenik v. Cty. of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995).

II. TILA

Defendants move for summary judgment with respect to Plaintiffs’ claims, all of which stem from Defendants’ alleged violation of TILA—namely, failing to give Plaintiffs the required number of disclosures and rescission notices at the closing.

The purpose of TILA is “to assure a meaningful disclosure of credit terms so that the consumer will be able to compare more readily the various credit terms available to him and avoid the uninformed use of credit . . .” 15 U.S.C. § 1601(a). In transactions, like the one here, secured by a principal dwelling, TILA gives borrowers an unconditional three-day right to rescind. 15 U.S.C. § 1635(a); see also id. § 1641(c) (extending rescission to assignees). The three-day rescission period begins upon the consummation of the transaction or the delivery of the required rescission notices and disclosures, whichever occurs later. Id. § 1635(a). Required disclosures must be made to “each consumer whose ownership interest is or will be subject to the security interest” and must include two copies of a notice of the right to rescind. 12 C.F.R. § 226.23(a)-(b)(1). If the creditor fails to make the required disclosures or rescission notices, the borrower’s “right of rescission shall expire three years after the date of consummation of the transaction.” 15 U.S.C. § 1635(f); see 12 C.F.R. § 226.23(a)(3).

If a consumer acknowledges in writing that he or she received a required disclosure or notice, a rebuttable presumption of delivery is created:

Notwithstanding any rule of evidence, written acknowledgment of receipt of any disclosures required under this subchapter by a person to whom information, forms, and a statement is required to be given pursuant to this section does no more than create a rebuttable presumption of delivery thereof.

15 U.S.C. §1635(c).

A. Number of Disclosure Statements

Plaintiffs claim that Defendants violated TILA by failing to provide them with a sufficient number of copies of the right to rescind and the disclosure statement at the closing of the loan. (Am. Compl. ¶ 47.) Defendants assert that Plaintiffs’ claims (both TILA and derivative state-law claims) fail as a matter of law because Plaintiffs signed an express acknowledgement that they received all required disclosures at closing, and they cannot rebut the legally controlling presumption of proper delivery of those disclosures.

It is undisputed that at the closing, each Plaintiff signed an acknowledgement that each received two copies of the Notice of Right to Cancel. Plaintiffs argue, however, that no presumption of proper delivery is created here because Plaintiffs acknowledged the receipt of two copies total, not the required four (two for each of the Plaintiffs). In particular, both Larry Jesinoski and Cheryle Jesinoski assert that they “read the acknowledgment . . . to mean that both” Larry and Cheryle “acknowledge receiving two notices total, not four.” (Doc. No. 60 (“L. Jesinoski Decl.”) ¶ 3; Doc. No. 61 (“C. Jesinoski Decl.”) ¶ 3.) Thus, Plaintiffs argue that they read the word “each” to mean “together,” and therefore that they collectively acknowledged the receipt of only two copies.

The Court finds this argument unavailing. The language in the Notice is unambiguous and clearly states that “[t]he undersigned each acknowledge receipt of two copies of NOTICE of RIGHT TO CANCEL and one copy of the Federal Truth in Lending Disclosure Statement.” (Jenkins Decl. ¶¶ 5, 6, Exs. C & D (italics added).) Plaintiffs’ asserted interpretation is inconsistent with the language of the acknowledgment. The Court instead finds that this acknowledgement gives rise to a rebuttable presumption of proper delivery of two copies of the notice to each Plaintiff. See, e.g., Kieran v. Home Cap., Inc., Civ. No. 10-4418, 2015 WL 5123258, at *1, 3 (D. Minn. Sept. 1, 2015) (finding the creation of a rebuttable presumption of proper delivery where each borrower signed an acknowledgment stating that they each received a copy of the disclosure statement—”each of [t]he undersigned acknowledge receipt of a complete copy of this disclosure”).[5]

The only evidence provided by Plaintiffs to rebut the presumption of receipt is their testimony that they did not receive the correct number of documents. As noted in Kieran, this Court has consistently held that statements merely contradicting a prior signature are insufficient to overcome the presumption. Kieran, 2015 WL 5123258, at *3-4 (citing Gomez v. Market Home Mortg., LLC, Civ. No. 12-153, 2012 WL 1517260, at *3 (D. Minn. April 30, 2012) (agreeing with “the majority of courts that mere testimony to the contrary is insufficient to rebut the statutory presumption of proper delivery”)); see also Lee, 692 F.3d at 451 (explaining that a notice signed by both borrowers stating “[t]he undersigned each acknowledge receipt of two copies of [notice]” creates “a presumption of delivery that cannot be overcome without specific evidence demonstrating that the borrower did not receive the appropriate number of copies”); Golden v. Town & Country Credit, Civ. No. 02-3627, 2004 WL 229078, at *2 (D. Minn. Feb. 3, 2004) (finding deposition testimony insufficient to overcome presumption); Gaona v. Town & Country Credit, Civ. No. 01-44, 2001 WL 1640100, at *3 (D. Minn. Nov. 20, 2001)) (“[A]n allegation that the notices are now not contained in the closing folder is insufficient to rebut the presumption.”), aff’d in part, rev’d in part, 324 F.3d 1050 (8th Cir. 2003).

Plaintiffs, however, contend that their testimony is sufficient to rebut the presumption and create a factual issue for trial. Plaintiffs rely primarily on the Eighth Circuit’s decision in Bank of North America v. Peterson, 746 F.3d 357, 361 (8th Cir. 2014), cert. granted, judgment vacated, 135 S. Ct. 1153 (2015), and opinion vacated in part, reinstated in part, 782 F.3d 1049 (8th Cir. 2015). In Peterson, the plaintiffs acknowledged that they signed the TILA disclosure and rescission notice at their loan closing, but later submitted affidavit testimony that they had not received their TILA disclosure statements at closing. Peterson, 764 F.3d at 361. The Eighth Circuit determined that this testimony was sufficient to overcome the presumption of proper delivery. Id. The facts of this case, however, are distinguishable from those in Peterson. In particular, the plaintiffs in Peterson testified that at the closing, the agent took the documents after they had signed them and did not give them any copies. Id. Here, it is undisputed that Plaintiffs left with copies of their closing documents. (L. Jesinoski Dep. at 94-95.) In addition, Plaintiffs did not testify unequivocally that they did not each receive two copies of the rescission notice. Instead, they have testified that they do not know what they received. (See, e.g., id. at 161.) Moreover, Cheryle Jesinoski testified that she did not look through the closing documents at the time of closing, and therefore cannot attest to whether the required notices were included. (C. Jesinoski Dep. at 85.)[6]

Based on the evidence in the record, the Court determines that the facts of this case are more line with cases that have found that self-serving assertions of non-delivery do not defeat the presumption. Indeed, the Court agrees with the reasoning in Kieran, which granted summary judgment in favor of defendants under similar facts, and which was decided after the Eighth Circuit issued its decision in Peterson. Accordingly, Plaintiffs have not overcome the rebuttable presumption of proper delivery of TILA notices, and Defendants’ motion for summary judgment is granted as to the Plaintiffs’ TILA claims.

B. Ability to Tender

Defendants also argue that Plaintiffs’ claims fails as a matter of law on a second independent basis—Plaintiffs’ admission that they do not have the present ability to tender the amount of the loan proceeds. Rescission under TILA is conditioned on repayment of the amounts advanced by the lender. See Yamamoto v. Bank of N.Y., 329 F.3d 1167, 1170 (9th Cir. 2003). This Court has concluded that it is appropriate to dismiss rescission claims under TILA at the pleading stage based on a plaintiff’s failure to allege an ability to tender loan proceeds. See, e.g., Franz v. BAC Home Loans Servicing, LP, Civ. No. 10-2025, 2011 WL 846835, at *3 (D. Minn. Mar. 8, 2011); Hintz v. JP Morgan Chase Bank, Civ. No. 10-119, 2010 WL 4220486, at *4 (D. Minn. Oct. 20, 2010). In addition, courts have granted summary judgment in favor of defendants where the evidence shows that a TILA plaintiff cannot demonstrate an ability to tender the amount borrowed. See, e.g., Am. Mortg. Network, Inc. v. Shelton, 486 F.3d 815, 822 (4th Cir. 2007) (affirming grant of summary judgment for defendants on TILA rescission claim “given the appellants’ inability to tender payment of the loan amount”); Taylor v. Deutsche Bank Nat’l Trust Co., Civ. No. 10-149, 2010 WL 4103305, at *5 (E.D. Va. Oct. 18, 2010) (granting summary judgment on TILA rescission claim where plaintiff could not show ability to tender funds aside from selling the house “as a last resort”).

Plaintiffs argue that the Supreme Court in Jesinoski eliminated tender as a requirement for rescission under TILA. The Court disagrees. In Jesinoski, the Supreme Court reached the narrow issue of whether Plaintiffs had to file a lawsuit to enforce a rescission under 15 U.S.C. § 1635, or merely deliver a rescission notice, within three years of the loan transaction. Jesinoski, 135 S. Ct. at 792-93. The Supreme Court determined that a borrower need only provide written notice to a lender in order to exercise a right to rescind. Id. The Court discerns nothing in the Supreme Court’s opinion that would override TILA’s tender requirement. Specifically, under 15 U.S.C. § 1635(b), a borrower must at some point tender the loan proceeds to the lender.[7] Plaintiffs testified that they do not presently have the ability to tender back the loan proceeds. (L. Jesinoski Dep. at 54, 202; C. Jesinoski Dep. at 118-119.) Because Plaintiffs have failed to point to evidence creating a genuine issue of fact that they could tender the unpaid balance of the loan in the event the Court granted them rescission, their TILA rescission claim fails as a matter of law on this additional ground.[8]

Plaintiffs argue that if the Court conditions rescission on Plaintiffs’ tender, the amount of tender would be exceeded, and therefore eliminated, by Plaintiffs’ damages. In particular, Plaintiffs claim over $800,000 in damages (namely, attorney fees), and contend that this amount would negate any amount tendered. Plaintiffs, however, have not cited to any legal authority that would allow Plaintiffs to rely on the potential recovery of fees to satisfy their tender obligation. Moreover, Plaintiffs’ argument presumes that they will prevail on their TILA claims, a presumption that this Order forecloses.

C. Damages

Next, Defendants argue that Plaintiffs are not entitled to TILA statutory damages allegedly flowing from Defendants’ decision not to rescind because there was no TILA violation in the first instance. Plaintiffs argue that their damages claim is separate and distinct from their TILA rescission claim.

For the reasons discussed above, Plaintiffs’ TILA claim fails as a matter of law. Without a TILA violation, Plaintiffs cannot recover statutory damages based Defendants refusal to rescind the loan.

D. State-law Claims

Plaintiffs’ state-law claims under Minn. Stat. § 58.13 and Minnesota’s Private Attorney General statute, Minn. Stat. § 8.31, are derivative of Plaintiffs’ TILA rescission claim. Thus, because Plaintiffs’ TILA claim fails as a matter law, so do their state-law claims.

ORDER

Based upon the foregoing, IT IS HEREBY ORDERED that:

1. Defendants’ Motion for Summary Judgment (Doc. No. [51]) is GRANTED.

2. Plaintiffs’ Amended Complaint (Doc. No. [7]) is DISMISSED WITH PREJUDICE.

LET JUDGMENT BE ENTERED ACCORDINGLY.

[1] According to Defendants, Countrywide was acquired by BANA in 2008, and became BAC Home Loans Servicing, LP (“BACHLS”), and in July 2011, BACHLS merged with BANA. (Doc. No. 15 at 1 n.1.) Thus, the only two defendants in this case are BANA and MERS.

[2] Larry Jesinoski testified that he had been involved in about a half a dozen mortgage loan closings, at least three of which were refinancing loans, and that he is familiar with the loan closing process. (L. Jesinoski Dep. at 150-51.)

[3] Plaintiffs claim that upon leaving the loan closing they were given a copy of the closing documents, and then brought the documents straight home and placed them in L. Jesinoski’s unlocked file drawer, where they remained until they brought the documents to Heinzman.

[4] At oral argument, counsel for Plaintiffs requested leave to depose Heinzman in the event that the Court views his testimony as determinative. The Court denies the request for two reasons. First, it appears that Plaintiffs had ample opportunity to notice Heinzman’s deposition during the discovery period, but did not do so. Second, Heinzman’s testimony will not affect the outcome of the pending motion, and therefore, the request is moot.

[5] See also, e.g., Lee v. Countrywide Home Loans, Inc., 692 F.3d 442, 451 (6th Cir. 2012) (rebuttable presumption arose where each party signed an acknowledgement of receipt of two copies); Hendricksen v. Countrywide Home Loans, Civ. No. 09-82, 2010 WL 2553589, at *4 (W.D. Va. June 24, 2010) (rebuttable presumption of delivery of two copies of TILA disclosure arose where plaintiffs each signed disclosure stating “[t]he undersigned further acknowledge receipt of a copy of this Disclosure for keeping prior to consummation”).

[6] This case is also distinguishable from Stutzka v. McCarville, 420 F.3d 757, 762 (8th Cir. 2005), a case in which a borrower’s assertion of non-delivery was sufficient to overcome the statutory presumption. In Stutzka, the plaintiffs signed acknowledgements that they received required disclosures but left the closing without any documents. Stutzka, 420 F.3d at 776.

[7] TILA follows a statutorily prescribed sequence of events for rescission that specifically discusses the lender performing before the borrower. See § 1635(b). However, TILA also states that “[t]he procedures prescribed by this subsection shall apply except when otherwise ordered by a court.” Id. Considering the facts of this case, it is entirely appropriate to require Plaintiffs to tender the loan proceeds to Defendants before requiring Defendants to surrender their security interest in the loan.

[8] The Court acknowledges that there is disagreement in the District over whether a borrower asserting a rescission claim must tender, or allege an ability to tender, before seeking rescission. See, e.g. Tacheny v. M&I Marshall & Ilsley Bank, Civ. No. 10-2067, 2011 WL 1657877, at *4 (D. Minn. Apr. 29, 2011) (respectfully disagreeing with courts that have held that, in order to state a claim for rescission under TILA, a borrower must allege a present ability to tender). However, there is no dispute that to effect rescission under § 1635(b), a borrower must tender the loan proceeds. Here, the record demonstrates that Plaintiffs are unable to tender. Therefore, their rescission claim fails on summary judgment.

 

FDCPA Claims Upheld in 9th Circuit Class Action

The court held that the FDCPA unambiguously requires any debt collector – first or subsequent – to send a section 1692g(a) validation notice within five days of its first communication with a consumer in connection with the collection of any debt.

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

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If anyone remembers the Grishom book “The Firm”, also in movies, you know that in the end the crooks were brought down by something they were never thinking about — mail fraud — a federal law that has teeth, even if it sounds dull. Mail fraud might actually apply to the millions of foreclosures that have taken place — even if key documents are sent through private mail delivery services. The end of month statements and other correspondence are definitely sent through US Mail. And as we are seeing, virtually everything they were sending consisted of multiple layers of misrepresentations that led to the detriment of the receiving homeowner. That’s mail fraud.
Like Mail Fraud, claims based on the FDCPA seem boring. But as many lawyers throughout the country are finding out, those claims have teeth. And I have seen multiple cases where FDCPA claims resulted in the settlement of the case on terms very favorable to the homeowner — provided the claim is properly brought and there are some favorable rulings on the initial motions.
Normally the banks settle any claim that looks like it would be upheld. That is why you don’t see many verdicts or judgments announcing fraudulent conduct by banks, servicers and “trustees.”And you don’t see the settlement either because they are all under seal of confidentiality. So for the casual observer, you might see a ruling here and there that favors the borrower, but you don’t see any judgments normally. Here the banks thought they had this one in the bag — because it was a class action and normally class actions are difficult if not impossible to prosecute.
It turns out that FDCPA is both a good cause of action for damages and a great discovery tool — to force the banks, servicers or anyone else that is a debt collector to respond within 5 days giving the basic information about the loan — like who is the actual creditor. Discovery is also much easier in FDCPA actions because it is forthrightly tied to the complaint.
This decision is more important than it might first appear. It removes any benefit of playing musical chairs with servicers, and other debt collectors. This is a core of bank strategy — to layer over all defects. This Federal Court of Appeals holds that it doesn’t matter how many layers you add — all debt collectors in the chain had the duty to respond.
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Justia Opinion Summary

Hernandez v Williams, Zinman and Parham, PC No 14-15672 (9th Cir, 2016)

Plaintiff filed a putative class action, alleging that WZP violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692(g)(a), by sending a debt collection letter that lacked the disclosures required by section 1692(g)(a) of the FDCPA. Applying well-established tools of statutory interpretation and construing the language in section 1692g(a) in light of the context and purpose of the FDCPA, the court held that the phrase “the initial communication” refers to the first communication sent by any debt collector, including collectors that contact the debtor after another collector already did. The court held that the FDCPA unambiguously requires any debt collector – first or subsequent – to send a section 1692g(a) validation notice within five days of its first communication with a consumer in connection with the collection of any debt. In this case, the district court erred in concluding that, because WZP was not the first debt collector to communicate with plaintiff about her debt, it had no obligation to comply with the statutory validation notice requirement. Accordingly, the court reversed and remanded.

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Washington Court Finds Trustee Had No Authority to Foreclose

WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation. In order to make it easier to serve you and get better results please take a moment to fill out our FREE registration form https://fs20.formsite.com/ngarfield/form271773666/index.html?1453992450583 
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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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Finally a decision on the central point of what I have been arguing for years — that the substitution of trustee in nonjudicial states is a sham.
The issue is why is the homeowner stuck with merely getting damages? The homeowner should be getting title cleared.  The foreclosure sale was void ab initio because the “substituted” trustee never had the authority to send the notice of default nor the notice of sale.
We are back to talking about void means void. This is a potential gray area — because the state statute probably says that any sale which on its face complies with state statutes is presumptively valid — which might make the sale voidable instead of void.

COVER-UP: Whatever Happenned to Those Settlements?

This is for general information only.

For further information please call 954-495-9867 or 520-405-1688

Consult a lawyer before making any decisions based upon the content of this article or anything else on this blog.

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see http://www.mpamag.com/news/foreclosure-settlement-funds-misspent-26697.aspx

The media and the Bank lobby keep referring to illegal activity, risky or mismanagement. I call it a cover-up that dwarfs Watergate by comparison. Here are some facts:

  1. Foreclosures are still increasing, despite dozens of articles per day that say otherwise. Those articles are writing about a particular city or county whereas the true numbers can only be measured nationally. Wall Street has creatively used its dominance in the press to get them using the terms that would lead one to believe that the foreclosure crisis in behind us.
  2. This wasn’t negligence. It is intentional, it is fraud, it is illegal and probably criminal. The banks didn’t suddenly wake up one morning with amnesia abut how to make a loan and how to account for it. They also didn’t accidentally destroy the original loan papers. It was intentional. Why did they destroy cash equivalent instruments? Because they had made reports to multiple third parties about the loan that would be readily obvious that (a) the loan did not qualify to be approved (b) that the loan did not qualify for the investment criteria needed by the stable managed funds (pension, for example) and (c) it is much easier on bankers if they admit to negligence than to produce proof of fraud (they obviously had made multiple misrepresentations and sales to multiple third parties).
  3. The foreclosures are for the benefit of the intermediary banks whose self-proclaimed status as agents for unidentified creditors makes a mockery of our marketplace and our judicial system.
  4. The banks were found by administrative and law enforcement agencies to have committed fraud on the courts, to have pushed through foreclosures in which they had no ownership or rights to the alleged loans, that probably was never consummated (in the legal sense) in the first place.
  5. The homeowners whose files were reviewed by investigators and found to have fatal defects were never notified by the investigators or anyone else about the finding and the agreement by the banks. This one example of the wrong-headed policies started by Bush and continued by Obama have been wrong headed and bone-headed.
  6. Hundreds of Billions, approaching $1 Trillion have been paid in settlements by the major banks, many with specific provisions that the settlement was to be to the benefit of homeowners who were illegally foreclosed or who were in foreclosure when the foreclosing party was (a) non existent or (b) a sham naked nominee with no interest in the loan, the note or the mortgage and or (c) a party who has never been disclosed in the courts during foreclosure litigation but who was directing the entire false and fraudulent scheme of “securitization”.
  7. The banks make no bones about it — they admit that the Trusts are and always were empty but have been asserting successfully to Judges who didn’t think through that whether there were actual underlying transcriptions where money exchanged hands or not, is irrelevant because they “hold” the note. So they admit that nobody in the chain of custody upon which they rely ever actually had any financial interest in the alleged “loan” with the homeowner and admit further, upon interrogation that they have no privity of contract with the homeowner.  The banks successfully turned the heads of thousands of judges with the myth of the homeowner getting a free house.
  8. Out of hundreds of billions of dollars in settlements, homeowners have seen virtually nothing — disbursements of less than 1% of the alleged principal or their alleged loan.
  9. It is an inescapable conclusion that the funds for the”Settlements” (a) remain unpaid or (b) resulted in payment of an amount equivalent to a nuisance settlement when the issuer was taking hundreds of thousands of dollars without any right, justification or excuse by proceeding with a foreclosure they have admitted, according to their own audit that the foreclosure was wrongful.

In short what is happening here is that the crimes or illegal activities are ongoing every day and not subject to (a) being barred by the statute of limitations and (b) foreclosure is  a behavior to avoid detection (which is a crime in itself) and (c) each time a Judge enters an order allowing or ordering forced sale, the Court itself is complicit in the cover-up, even if the Court is “unaware” of it.

All of this is presumptively true because of the findings of fact by the investigative and regulatory agencies, whether they are admitted or not by the mega banks. The burden should be placed on the foreclosing party, whose history of fabrication, lying under oath, and forgery SHOULD make the testimony, documents, and representations proffered by counsel for banks presumptively NOT CREDIBLE. Instead Judges have treated them like they are holders in due course where the risk falls entirely on the homeowner who also has the burden of proving defenses against a holder in due course who is not subject to those defenses (but who also doesn’t exist).

In my opinion policy makers, regulators and law enforcement are still functioning under the Wall Street myth that if the mega banks fall so does the economy. It is quite the reverse. If the mega banks fall then banking becomes local again, and there is no such thing as too big to fail. There is not single function performed by a mega bank that couldn’t be done by a small community bank or credit union. The current policy has allowed the mega banks to raise a cloud over everything with their unregulated “Shadow banking” sector which now accounts for around 15-20 times the amount of all the money in the world. That being the case, we are allowing our institutions to be marginalized. When the Fed, or Congress or anyone else attempts to address the problems of economic growth and inequality they are using primitive tools without any real effect.

We have replaced income and currency with debt that is “cash equivalent”. As long as allow that, we will forever be on the brink of the worst depression in history — which history tells us frequently leads to war. As a distraction there are those who point to the National Debt without making any reference to the more important household debt. It is an irrefutable fact that out economy is built on consumption. 70% of our gross domestic product is consumption of goods and services by ordinary consumers. Thus the only rational, practical policy is one that increases consumption. Instead politicians are creating ideological talking points. Where does consumption ordinarily come from? Do those people have the money or credit to make purchases? If they don’t, then what policy will put money in their hands in a manner in which overall consumption increases.

What is Evidence or Proof of the Existence of the REAL Loan?

For additional information or assistance please call 954-495-9867 or 520-405-1688.

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It is a complicated answer. The following is NOT a comprehensive answer which would the length of a treatise.

see also Fla 4th DCA Beauchamp v Bank of New York Mellon, J Shahood reversed — Beauchamp v BONY-Mellon

The Beauchamp case brings to the forefront the issue of redemptive rights which has long been ignored. In short the 4th DCA decided that the redemptive rights are important. They decided that evidence of actual losses or damages must be established without relying on inadmissible hearsay. This is where the rubber meets the road. In order to do so the Plaintiff foreclosing party is open in discovery at the very least to showing actual proof of payment and proof of loss of the actual owner of the debt and/or holder in due course. Presumptions won’t do them any good unless the homeowner’s attorney fails to object.

Thus the real transaction with real money, in a real purchase of the loan must be established by the foreclosing party. That is part of their prima facie case. And these are liquidated contract damages — not subject to anything other than mathematical calculation of net loss. I doubt if the appellate court meant to empower the judge to “estimate” or enter a finding that is “good enough.” The homeowner, like the AMGAR program, has every right to pay off the net debt once it is established and thus prevent the sale of the home. In turn the homeowner is entitled to the recovery of the original note and mortgage or deed of trust.

Be careful because it is evidently a normal practice, contrary to current case law, for the foreclosing party in non judicial states to publish and record a self serving statement of standing in the form of a substitution of trustee. That substitution of trustee must be nullified or else the rest of the theories advanced by the homeowner might be deemed irrelevant.

The interesting thing on remand is what happens when the foreclosing party cannot show proof of payment (proof of actual transaction ) and tries to get the judge to assume that the loss is the amount on the note. If that were the case the 4th DCA would not have remanded for further proceedings to determine damages so that the borrower’s redemption rights could be established. Without a completely transparent introduction of testimony and BEST evidence of original transaction documents, there is no proof of damages and the foreclosure judgment must be vacated.

In loan transactions there usually is no actual written contract that says the creditor will loan money and the debtor will pay it back. So common law and statutory law must make certain assumptions about the loan contract — which still must exist in order for the note or mortgage to be enforced. This is till basic contract law — the elements of which are offer, acceptance and consideration each to the other. The stumbling block for most judges is that the presence of money at the table is automatically construed as consideration for the contract that is sought to be enforced.

In olden times there was no problem in using this heuristic approach to loan contracts, because nobody thought of some third party funding the loan WITHOUT a note and mortgage made out in favor of the actual creditor. But Wall Street found a way to do it and conceal it.

The actual debt — i.e., the duty to pay — arises by operation of law when the debtor receives the money. It is presumed to be a loan and not a gift. The paperwork is intended to provide disclosures and terms and evidence upon which both parties can rely. In this context before Wall Street saw the vulnerability, there was no problem in using the words “debt”, “note”, “mortgage” and “loan” interchangeably — because they all essentially meant the same thing.

The genius of the Wall Street scheme is that their lawyers saw the possibilities in this informal system. The borrower could not claim lack of consideration when he received the money and thus the debt was presumed. And with enough layers of deception, non-disclosure and outright lies, neither the borrower nor even the closing agent actually realized that the money was coming from Party A but the paperwork was directed to Party B. Nobody realized that there was a debt created by operation of law PLUS another debt that might be presumed by virtue of signing a note and mortgage. Obviously the borrower was kept in the dark that for every $1 of “loan” he was exposing himself to $2 in liability.

If the creditor named as payee and mortgagee was not the source of the funds then there is no underlying debt. The rules of evidence are designed to help the court get tot eh truth of the matter asserted. The truth is that the holder of the paper is NOT the party who was the creditor at “closing.” The closing was fictitious. It really is that simple. And it is the reason for the snowstorm of fabricated, forged and robosigned documents to cover up the essential fact that there is not one shred of consideration in the origination or transfer of many loans.

Each assignment, endorsement, power of attorney or other document purporting to transfer control or ownership over the loan documents is corroboration of the lack of consideration. Working backwards from the Trust or whoever is claiming the right to enforce, you will see that they are alleging “holder” status but they fail to identify and prove their right to enforce on behalf of the holder in due course or owner of the debt (i.e., the creditor).

Close examination of the PSA shows that they never planned to have the Trust actually acquire the loans — because of the lack of any language showing how payment is being made to acquire the loans within the cutoff period. THAT was the point. By doing that the broker dealers were able to divert the proceeds of sale of Mortgage Backed Securities to their own use. And when you look at their pleading they never state they are a holder in due course. Why not? If they did, there would be no allowable defenses from the borrower. But if they alleged that they would need to come forward with evidence that the Trust purchased the debt for value, in good faith and without knowledge of the borrower’s defenses — elements present in every PSA but never named as “holder in due course.”

Since the good faith and lack of knowledge of borrower’s defenses is probably not in hot dispute, that leaves only one element — payment. The logical question is why would the assignor or endorser transfer a valuable debt without payment? The only reasonable conclusion is that there is no underlying debt — there is paper but the power of that paper is at very best highly speculative. “Underlying debt” means that the alleged borrower does not owe any money to the party named as payee on the note.
Traveling down the line, seeking for evidence of payment, you don’t find it. Even the originator does not get “paid” for the loan but assigns or endorses the paperwork anyway. No reasonable business explanation can be found for this free transfer of the paper except that the participants knew full well that the paper was worthless. And THAT in turn is presumptive proof that there was a lack of consideration for the paperwork — meaning that the debt was owed to an outside party who was never in privity with the “originator.”
If someone has possession of a note, it is an original and it complies with local statutes as to form and content, the note is accepted as evidence of the debt, and the terms of repayment. The person who signed the note is at risk of a judgment against him only if he defaults or the note falls into the hands of a holder indue course. Of course if the note IS evidence of a loan that WAS funded by the named payee, that is a different story. But looking a little further up the line, you will eventually find that one or more alleged transfers of the paperwork did not involve payment. And the reason is the same as the above. In the end, the money came from illegal diversion of investor funds that were intended to be deposited with a REMIC Trust.

If the signer of the note denies that the transaction was complete — i.e., there was no consideration and therefore there is no enforceable contract, then the burden switches back to the “holder” of the note to step into the shoes of the original lender to prove that the loan actually occurred, the original lender was the creditor and the signer was the debtor.

Banks Use Trial Modifications as a Pathway to Foreclosure — Neil Garfield Show 6 P.M. EDT Thursdays

Banks Use Modifications Against Homeowners

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

It is bad enough that they outright lie to homeowners and tell them they MUST be 90 days behind in payments to get a modification. That isn’t true and it is a ruse to get the homeowner to stop paying and get into a default situation. But the reports from across the country show that the banks are using a variety of tricks and scams to dishonor modification agreements. First they say that just because they did the underwriting and approved the trial modification doesn’t mean that they are bound to make the modification permanent. Most courts disagree. If you make a deal with offer, acceptance and consideration, and one side performs (the homeowner made the trial payments) then the other side must perform (the Bank).

What is really happening is that the bank is converting the loan from a loan funded by investors to a loan NOT funded by the bank. They are steering people into “in house” loans. The hubris of these people is incredible. Why are the investors sitting on their hands? Do they STILL not get it?
Regardless of whether the modification is enforced or forced into foreclosure or converted to an in house loan, the investor loses with the stamp of approval from the court. And the borrower is now paying a party that already collected his loan principal several times over while the real lender is getting birdseed. The investors lose no matter how the case is decided. And the Courts are failing to realize that the fate of the money from a Pension Fund is being decided without any opportunity for the investors to have notice, much less be heard.
Why is this important? Because the banks converted one debt from the borrower into many debts — all secured by the same mortgage. It doesn’t work that way in real life — except now, when courts still refuse to educate themselves on the theory and reality of securitization of debt.
http://www.occupy.com/article/when-fighting-your-home-becomes-biggest-fight-your-life
——————————-FROM RECENTSHOWHOW DO YOU KNOW THAT? — Introducing two upcomingCLE Seminars from the Garfield Continuum onVoir Dire of corporate representatives in foreclosure litigation. The first is atwo hour telephone conference devoted exclusively tovoir dire examination and the second is a full day on onlyvoir dire pluscross examination. The show is free. Topreregister for the mini seminar onvoir dire or the full seminar onvoir dire andcross examination (at a discount) call 954-495-9867.

  • Overview of Foreclosure Litigation in Florida and Other States
  • The need for copies of actual case law and even memoranda supporting your line of questioning
  • The Three Rules for Questioning
  • —– (1) Know why you want to inquire
  • —– (2) Listen to the Answer
  • —– (3) Follow up and comment
  • What to ask, and when to ask it
  • The difference between voir dire and cross examination
  • Getting traction with the presiding Judge
  • Developing your goals and strategies
  • Developing a narrative
  • Impeaching the witness before he or she gets started
  • Preparing your own witnesses for voir dire questions

 

IF YOU MISSED IT: Go to blog radio link and click on the Neil Garfield Show — past shows include—-

News abounds as we hear of purchases of loans and bonds. Some of these are repurchases. Some are in litigation, like $1.1 Billion worth in suit brought by Trustees against the broker dealer Merrill Lynch, which was purchased by Bank of America. What do these purchases mean for people in litigation. If the loan was repurchased or all the loan claims were settled, does the trust still exist? Did it ever exist? Was it ever funded? Did it ever own the loans? Why are lawyers unwilling to make representations that the Trust is a holder in due course? Wouldn’t that settle everything? And what is the significance of the $3 trillion in bonds purchased by the Federal Reserve, mostly mortgage backed bonds? This and more tonight with questions and answers:

Adding the list of questions I posted last week (see below), I put these questions ahead of all others:

  1. If the party on the note and mortgage is NOT REALLY the lender, why should they be allowed to have their name on the note or mortgage, why are those documents distributed instead of returned to the borrower because he signed in anticipation of receiving a loan from the party disclosed, as per Federal and state law. Hint: think of your loan as a used car. Where is the contract (offer, acceptance and consideration).
  2. If the party receiving an assignment from the false payee on the note does NOT pay for it, why are we treating the assignment as a cure for documents that were worthless in the first place. Hint: Paper Chase — the more paper you throw at a worthless transaction the more real it appears in the eyes of others.
  3. If the party receiving the assignment from the false payee has no relationship with the real lender, and neither does the false payee on the note, why are we allowing their successors to force people out of their homes on a debt the “bank” never owned? Hint: POLITICS: What is the position of the Federal reserve that has now purchased trillions of dollars of the “mortgage bonds” from banks who never owned the bonds that were issued by REMIC trusts that never received the proceeds of sale of the bonds.
  4. If the lenders (investors) are receiving payments from settlements with the institutions that created this mess, why is the balance owed by the borrower the same after the settlement, when the lender’s balance has been reduced? Hint: Arithmetic. John owes Sally 5 bananas. Hank gives Sally 3 bananas and says this is for John. How many bananas does John owe Sally now?
  5. And for extra credit: are the broker dealers who said they were brokering and underwriting the issuance of mortgage bonds from REMIC trusts guilty of anything when they don’t give the proceeds from the sale of the bonds to the Trusts that issued those bonds? What is the effect on the contractual relationship between the lenders and the borrowers? Hint: VANISHING MONEY replaced by volumes of paper — the same at both ends of the transaction, to wit: the borrower and the investor/lender.

1. What is a holder in due course? When can an HDC enforce a note even when there are problems with the original loan? What does it mean to be a purchaser for value, in good faith, without notice of borrower’s defenses?

2. What is a holder and how is that different from a holder with rights to enforce? What does it mean to be a holder subject to all the maker’s defenses including lack of consideration (i.e. no loan from the Payee).

3. What is a possessor of a note?

4. What is a bailee of a note?

5. If the note cannot be enforced, can the mortgage still be foreclosed? It seems that many people don’t know the answer to this question.

6. The question confronting us is FORECLOSURE (ENFORCEMENT) OF A MORTGAGE. If the status of a holder of a note is in Article III of the UCC, why are we even discussing “holder” when enforcement of mortgages is governed by Article IV of the UCC?

7. Does the question of “holder” or holder in due course or any of that even apply in the original loan transaction? Hint: NO.

8. Homework assignment: Google “Infinite rehypothecation”

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