Who is the Creditor? NY Appellate Decision Might Provide the Knife to Cut Through the Bogus Claim of Privilege

The crux of this fight is that if the foreclosing parties are forced to identify the creditors they will only have two options, in my opinion: (a) commit perjury or (b) admit that they have no knowledge or access to the identity of the creditor

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.
—————-

see http://4closurefraud.org/2016/06/10/opinion-here-ny-court-says-bank-of-america-must-disclose-communications-with-countrywide-in-ambac-suit/

We have all seen it a million times — the “Trustees”, the “servicers” and their agents and attorneys all beg the question of identifying the names and contact information of the creditors in foreclosure actions. The reason is simple — in order to answer that question truthfully they would be required to admit that there is no party that could properly be defined as a creditor in relation to the homeowner.

They have successfully pushed the point beyond the point of return — they are alleging that the homeowner is a debtor but they refuse to identify a creditor; this means they are being allowed to treat the homeowner as a debtor while at the same time leaving the identity of the creditor unknown. The reason for this ambiguity is that the banks, from the beginning, were running a scheme that converted the money paid by investors for alleged “mortgage backed securities”; the conversion was simple — “let’s make their money our money.”

When inquiry is made to determine the identity of the creditor the only thing anyone gets is some gibberish about the documents PLUS the assertion that the information is private, proprietary and privileged.  The case in the above link is from an court of appeals in New York. But it could have profound persuasive effect on all foreclosure litigation.

Reciting the tension between liberal discovery and privilege, the court tackles the confusion in the lower courts. The court concludes that privilege is a very narrow shield in specific situations. It concludes that even the attorney-client privilege is a shield only between the client and the attorney and that adding a third party generally waives that privilege. The third party privilege is only extended in narrow circumstances where the parties are seeking a common goal. So in order to prevent the homeowner from getting the information on his alleged creditor, the foreclosing parties would need to show that there is a common goal between the creditor(s) and the debtor.

Their problem is that they can’t do that without showing, at least in camera, that the identity of the creditor is known and that somehow the beneficiaries of an empty trust have a common goal (hard to prove since the trust is empty contrary to the terms of the “investment”). Or, they might try to identify a creditor who is neither the trust nor the investors, which brings us back to perjury.

Quiet Title Revisited: Not Quite a Dead End

Void means that the instrument meant nothing when it was filed, not that it is unenforceable now.

 

I know how hard it is to let go of something that you really want to believe in. But for practical reasons I consider it unwise to continue on the QT path until we can find a way to get rid of the void assignment. That unto itself might a form of quiet title action and it is far easier to do. The allegation need only be that neither the assignor nor the assignee (a) had any right, justification or excuse to claim an interest in the recorded mortgage and (b) neither one was ever party to a completed transaction in which either of them had paid value for any interest in the recorded mortgage. Hence the assignment is void and should be removed from the chain of title reflected in the county records. So that takes care of one of several problems and the attack does not seek to remove the mortgage — yet.

 

Quiet title is a very limited remedy. In nearly all cases if the facts are contested it almost automatically means that there is no quiet tile relief available. It is meant to remove wild deeds or any other void (not voidable) instrument. Void means that the instrument meant nothing when it was filed, not that it is unenforceable now.

I contributed to the mystery of quiet title because it was apparent that the mortgage was void because it never named the true lender. In fact the existence and identity of the true source of funds for the transaction was intentionally withheld from the borrower leaving the mortgage with only one party instead of two.

 

The problem many courts are having with this is that the mortgage might still be subject to reformation that would insert the correct name of the actual lender (theoretically, potentially reformation). The fact that there is no such creditor whose name can be inserted does not make the mortgage void. It makes it voidable. Actually proving that there is no such creditor won’t be easy since only the banks have the information that shows that.

 

If there are any future events that could revive the mortgage deed, then quiet title can’t work. Add to that the fact that judges are not treating these attacks seriously and routinely ruling for the banks and you have a what appears to be a dead end.

 

All that said, there ARE causes of action that could attack the void assignment and the voidable mortgage in which the court could theoretically declare that in the absence of information sought from the defendants, who appear to be the only potential claimants, the mortgage is THEN declared void by court order, THEN a second count in quiet title would be in order. I cannot emphasize enough the fact that Judges are going to be very resistant to this but I think that appellate courts are starting to understand what happened with false claims of securitization.

 

Essentially, the Court must state that:

  1. The mortgage failed to name the correct party as lender.
  2. That failure makes the mortgage voidable.
  3. Despite publication and notice, there are no parties who could answer to the description of the creditor whose name should have been on the mortgage.
  4. The mortgage is therefore void
  5. Court declares title to be vested in the name of Smith and Jones without any encumbrance arising out of the mortgage recorded at Page 123 Book 456 of the public records of XXXX County, Florida.
 This of course directly challenges the judicial notion that once the homeowner receives money, it is a loan, it is enforceable and it doesn’t matter who comes into court to enforce it. To say that this judicial “law” opened the door to mayhem and moral hazard would be an understatement. Using the opinions written by trial judges, appellate judges and even Supreme Court justices, people who like to “leverage the system” have seized on this obvious opening to steal receivables from the rightful recipient — with no negative consequences. They write a letter that appears on its face to be correct and valid. According to current practices this raises the presumption that the contents of the letter are true.
 Hence the self-serving letter creates the legal presumption that the writer is authorized to tell the debtor that the writer is now the owner of the debt and to direct payments to the “new owner.” This isn’t speculation. Starting in California this business plan is spreading across the country. By the time the rightful owner of the debt wakes up the Newco Debt Servicing company has collected or settled the account.
Since the presumption is raised that the thief writing the letter is authorized, the real party in interest cannot beat the defense of payment by a debtor who thought they were doing the right thing. Reasonable reliance by the borrower is presumed since the authority and the validity of the letter was presumed. And that is not just a description of some dirty rag tag gangsters; it is a verifiable description of what the banks have been doing for years with mortgage debt, credit card debt, student loan debt and every other kind of debt imaginable.
By the time the investors wake up and find out their money was not used to fund a trust or real business entity, their money is gone and they are at the mercy of the big time banks who will offer settlements of claims that should have resulted in jail time for the bankers. Instead we have literally authorized small time crooks to emulate the behavior of the banks thus throwing the marketplace into further chaos.
So if you start off knowing that the banks can never come up with the name and contact information of a creditor, then you begin to see how there are some attacks on the position of banks that could have enormous traction even though on their face those strategies look like losers.

One Step Closer:It’s Impossible to Tie Any Investors to Any Loan

The current talking points used by the Banks is that somehow the Trust can enforce the alleged loan even though it is the “investors” who own the loan. But that can only be true if the Trust owns the loan which it doesn’t. And naming the “investors” as the creditor does nothing to clarify the situation — especially when the “investors” cannot be identified.

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

—————-

see http://4closurefraud.org/2016/06/07/unsealed-doj-confirms-holders-of-securitized-loans-cannot-be-traced/

I know of a case pending now where US Bank allegedly sued as Trustee of what appears to be named Trust. In Court the corporate representative of the servicer admitted that the creditor was a group of investors that he declined to name. I knew that meant two things: (1) neither he nor anyone else knew which investor was tied to the subject loan and (2) the “Plaintiff” Trust had never acquired the loan and therefore had no business being in court.

The article in the above link demonstrates that not even the FBI could figure out the identity of the investors. And as we have seen across the country whenever the homeowner asks for discovery of the identity of the creditor it is met with multiple objections and claims that the information about the identity of the debtor’s credit is proprietary. This is an absurd claim and it seeks to have the court rubber stamp a blatant violation of Federal and State lending laws which require the disclosure of the identity of the “lender.”

The only thing the article gets wrong is the statement that the loans were sold into a trust. That is obviously false. If the investors are the creditors, then their money was used to fund the origination or acquisition of the loan — without the Trust. Otherwise the Trust would be the creditor. And if the Trust is not the owner of the loan as specified by the Prospectus and Pooling and Servicing Agreement, then it follows that it has no status at all, which means that neither the Trustee nor the servicer have any authority to manage, service or otherwise enforce the alleged loan. The entire strategy of asserting the Trust is a holder of the note is thus unhinged when it is confronted with reality. The whole “standing” argument revolves around this point — that no loan actually made it into any Trust. Many cases have been won by borrowers on that point without the extra step of saying that the creditor is completely unknown.

So the upshot is that there is no known, presumed or identified creditor. Although that seems implausible and counter-intuitive, it is nonetheless true. That doesn’t mean that theoretically there couldn’t be an unsecured claim from the investors to collect from the homeowner under a theory of unjust enrichment, but it does mean that the investors are neither named on the note and mortgage nor are they the current owners of any paper instruments that purport to be evidence of the “debt” — i.e., the note and mortgage. If they are not the current owners of the “debt” originated at closing nor the owners of the paper instruments signed at the alleged closing, then there is no evidence of any contract or privity between the investors and the Trustee or servicer at all. The PSA was ignored which means the entity of the Trust was ignored.  And THAT means lack of standing and lack of any ability to cure it.

Which brings me to one of my earliest articles for this Blog that announced “You Don’t Owe the Money.” Using the step transaction doctrine and single transaction doctrines arising mostly out of tax courts, it was plain as day to me back in 2007 and 2008 that there was no “debt.” And until someone stepped up with an equitable unsecured claim against the homeowner, there wasn’t even a liability. But nobody ever steps up. The banks tell us that is because the whole securitization scheme is to prevent and even prohibit the investors from even making an inquiry into any specific “loans.”

But the real reason is simple and basic — the Trusts were ignored, which means that investor money was deposited with investment banks under false pretenses — the falsehood being that the investors were buying into a specific Trust (which never received any proceeds of sale of the Trust securities) with a specific Mortgage Loan Schedule. The Mortgage Loan Schedule was therefore a complete illusion as an attachment to the Trust because the Trust never had the money to pay for the “pool” of loans. That is why the Mortgage Loan Schedule shows up mainly in litigation in order to confuse the Judge into thinking that somehow it is “facially valid” instead of being the self-serving fabrication of a stranger to the transaction who is engaged in stealing the loans after they already stole the money from investors.

In fact, the “pool” was an ever widening dark dynamic pool of money in which all the money of all investors was commingled with all the other investors of all the alleged Trusts. As I have previously stated the result can be compared to taking an apple, an orange and a banana and setting a food processor on Puree. At the end of that simple process it is impossible for the chef to produce the original apple, orange or banana.

If securitization was real, the banks could have easily done two things that would have completely knocked out any borrower defenses except payment. The first was to show the money chain and the second would be produce the proof that the Trust owned the debt, not the investors. The current talking points used by the Banks is that somehow the Trust can enforce the alleged loan even though it is the “investors” who own the loan. But that can only be true if the Trust owns the loan which it doesn’t. And naming the “investors” as the creditor does nothing to clarify the situation — especially when the “investors” cannot be identified.

As it stands now, the investors continue to allow the banks to act like they are really intermediaries, stealing both the money and the loans that should have been executed in favor of the investors and even allowing claims for collecting “servicer advances” that were not advances (they were return of investor capital) and never came from the servicer. It was and remains a classic PONZI scheme that government is too scared to do anything about and investors are too ignorant of the false securitization (or unwilling to admit human error in failing to do due diligence on the securitization package).

Schedule A Consult Now!

Glaski Court refuses to “depublish” decision, two judges recuse themselves.

Corroborating what I have been saying for years on this blog, the Supreme Court of the state of California is reasserting its position that if entity ABC wants to collect on a debt in California, then that particular entity must own the debt. This is basic common sense and simply follows article 9 of the Uniform Commercial Code. If a court were to adopt the position of the banks, then a new industry would be born, to wit: spying on people to determine whether or not they are behind on any payment to anyone and then beating the real creditor to court, filing a complaint and getting a judgment without the real creditor even knowing about it. The Supreme Court of the state of California obviously understands this.

This is not really complicated although the words used are complicated. If you find out that your neighbor is behind in payments on their credit cards, it is obvious that you cannot serve your neighbor and collect. You don’t own the debt because you never loaned any money and because you never purchased the debt. If you are allowed to sue and collect on the credit card debt, you and the court would be committing a fraud on the actual creditor. This is why it is absurd for lawyers or judges to say “what difference does it make who they owe the debt to?  They stopped making payments and they are clearly in default.”  Any lawyer or judge makes that statement is wrong. It lacks the foundation of the factual determinations required to establish the existence of the debt, the current balance of the debt after deductions for all payments received from all parties on this account, and the ownership of the debt.

In the first year of law school, we learned that the note is not the debt.  The note is evidence of the debt and the terms of repayment but it is not a substitute for the actual transaction documents. Those transaction documents would have to include proof of transfer of consideration, which in this case would mean wire transfer receipts and wire transfer instructions. The banks don’t want to show the court this because it will show that the originator in most cases never made any loan at all and was merely serving as a sham nominee for an undisclosed lender. The banks are attempting to use this confusion to make themselves real parties in interest when in fact they were never more than intermediaries. And as intermediaries that misused their positions of trust to misrepresent and create fraudulent “mortgage bond” transactions with investors that led to fraudulent loans being made to borrowers.

The banks diverted or stole money from investors on several different levels through multiple channels of conduit sham entities that they called “bankruptcy remote vehicles.” The argument of “too big to fail” is now being rejected by the courts. That is a policy argument for the legislative branch of government. While the bank succeeded in scaring the executive and legislative branches into believing the risk of “too big to fail” most of the people in the legislative and executive branches of government on the federal and state level no longer subscribe to this myth.

There are dozens of other courts on the trial and appellate level across the country that are also grasping this issue. The position of the banks, which is been rejected by Congress and the state legislatures for good reason, would mean  the end of negotiable paper. The banks are desperate because they know they are not the owner of the debt, they are not the creditor, they have no authority to represent the creditor, and their actions are contrary to the interests of the creditor. They are pushing millions of homeowners into foreclosure, or luring them into an apparent default and foreclosure with false promises of modification and settlement.

The reason is simple. Without a foreclosure sale at auction, the banks are exposed to an enormous liability for all the money they collected on the alleged defaulted loans. The amount of the liability is vastly in excess of the entire principal of the loans, which is why I say that the major banks are publishing financial statements that are based on fictitious assets and fictitious income. Nobody can ignore the fact that the broker-dealers (investment banks) are getting sued by investors, insurers, counterparties on credit default swaps, government agencies who have already paid for alleged “losses”, and government agencies that have paid on guarantees for mortgages that did not conform to the required industry-standard underwriting practice.

This latest decision in which the Glaski court, at the request of the banks, revisited its prior decision and then reaffirmed it as a law of the land in the state of California, is evidence that the courts are turning the corner in favor of the real creditors and the real debtors. The recusal by two judges on the California Supreme Court is interesting but at this point there are no conclusions that can be drawn from that.

This opens the door in the state of California for people to regain title to their property or damages for the loss of title. It also serves to open the door to discovery of the actual money trail in order to trace real transactions as opposed to fictitious ones based upon fabricated documentation which often contain forgery, backdating, and are signed by people without authority or people claiming authority through a fictitious power of attorney.

Glaski Court Reaffirms Law of the Land In California: If you don’t own the debt, you cannot collect on it.

Banks Won’t Take the Money: Insist on Foreclosure Even When Payment in Full is Tendered

Internet Store Notice: As requested by customer service, this is to explain the use of the COMBO, Consultation and Expert Declaration. The only reason they are separate is that too many people only wanted or could only afford one or the other — all three should be purchased. The Combo is a road map for the attorney to set up his file and start drafting the appropriate pleadings. It reveals defects in the title chain and inferentially in the money chain and provides the facts relative to making specific allegations concerning securitization issues. The consultation looks at your specific case and gives the benefit of litigation support consultation and advice that I can give to lawyers but I cannot give to pro se litigants. The expert declaration is my explanation to the Court of the findings of the forensic analysis. It is rare that I am actually called as a witness apparently because the cases are settled before a hearing at which evidence is taken.
If you are seeking legal representation or other services call our South Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. In Northern Florida and the Panhandle call 850-765-1236. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services. Get advice from attorneys licensed in the jurisdiction in which your property is located. We do provide litigation support — but only for licensed attorneys.
See LivingLies Store: Reports and Analysis

We have seen a number of cases in which the bank is refusing to cooperate with a sale that would pay off the mortgage completely, as demanded, and at least one other case where the homeowner deeded the property without any agreement to the foreclosing party on the assumption that the foreclosing party had a right to foreclose, enforce the note or mortgage. There is a reason for that. They don’t want the money, they don’t even want the house — what they desperately need is a foreclosure judgment because that caps the liability on that loan to repay insurers and CDS counterparties, the Federal Reserve and many other parties who paid in full over and over again for the bonds of the REMIC trust that claimed to have ownership of the loan.

This should and does alert judges that something is amiss and some of their basic assumptions are at least questionable.

I strongly suggest we all read the Renuart article carefully as it contains many elements of what we seek to prove and could be used as an attachment to a memorandum of law. She does not go into the issue of their being actual consideration in the actual transactions because she is unfamiliar with Wall Street practices. But she does make clear that in order for the sale of a note to occur or even the creation of a note, there must be consideration flowing from the payee on the note to the maker. In the absence of that consideration, the note is non-negotiable. Thus it is relevant in discovery to ask for the the proof of the the first transaction in which the note and mortgage were created as well as the following alleged transactions in which it is “presumed” that the loan was sold because of an endorsement or assignment or allonge. To put it simply, if they didn’t pay for it, then it didn’t happen no matter what the instrument or endorsement says.

The facts are that in many if not most cases the origination of the loan, the execution of the note and mortgage and the settlement documents were all created and recorded under the presumption that the payee on the note was the source of consideration. It was easy to make that mistake. The originator was the one stated throughout the disclosure and settlement documents. And of course the money DID appear at the closing. But it did not appear because of anything that the originator did except pretend to be a lender and get paid for its acting service. Lastly, the mistake was easy to make, because even if the loan was known or suspected to be securitized, one would assume that the assignment and assumption agreement for funding would have been between the originator or aggregator (in the predatory loan practice of table funding) and the Trust for the asset pool. Instead it was between the originator and an aggregator who also contributed no consideration or value to the transaction. The REMIC trust is absent from the agreement and so is the ivnestor, the borrower, the isnurers and the counterparties to credit default swaps (CDS).

If the loan had been properly securitized, the investors’ money would have funded the REMIC trust, the Trust would have purchased the loan by giving money, and the assignment to the trust would have been timely (contemporaneous) with the creation of the trust and the sale of the the loan — or the Trust would simply have been named as the payee and secured party. Instead naked nominees and disinterested intermediaries were used in order to divert the promised debt from the investors who paid for it and to divert the promised collateral from the investors who counted on it. The servicer who brings the foreclosure action in its own name, the beneficiary who is self proclaimed and changes the trustee on deeds of trust does so without any foundation in law or fact. None of them meet the statutory standards of a creditor who could submit a credit bid. If the action is not brought by or on behalf of the creditor there is no jurisdiction.

Add to that the mistake made by the courts as to the accounting, and you have a more complete picture of the transactions. The Banks and servicers do not want to reveal the money trail because none exists. The money advanced by investors was the source of funds for the origination and acquisition of residential mortgage loans. But by substituting parties in origination and transfers, just as they substitute parties in non-judicial states without authority to do so, the intermediaries made themselves appear as principals. This presumption falls apart completely when they ordered to show consideration for the origination of the loan and consideration for each transfer of the loan on which they rely.

The objection to this analysis is that this might give the homeowner a windfall. The answer is that yes, a windfall might occur to homeowners who contest the mortgage or who defend foreclosure. But the overwhelming number of homeowners are not seeking a free house with no debt. They would be more than happy to execute new, valid documentation in place of the fatally defective old documentation. But they are only willing to do so with the actual creditor. And they are only willing to do so on the actual balance of their loan after all credits, debits and offsets. This requires discovery or disclosure of the receipt by the intermediaries of money while they were pretending to be lenders or owners of the debt on which they had contributed no value or consideration. Thus the investor’s agents received insurance, CDS and other moneys including sales to the Federal reserve of Bonds that were issued in street name to the name of the investment bankers, but which were purchased by investors and belonged to them under every theory of law one could apply.

Hence the receipt  of that money, which is still sitting with the investment banks, must be credited for purposes of determining the balance of the account receivable, because the money was paid with the express written waiver of any remedy against the borrower homeowners. Hence the payment reduces the account receivable. Those payments were made, like any insurance contract, as a result of payment of a premium. The premium was paid from the moneys held by the investment bank on behalf of the investors who advanced all the funds that were used in this scheme.

If the effect of these transactions was to satisfy the account payable to the investors several times over then the least the borrower should gain is extinguishing the debt and the most, as per the terms of the false note which really can’t be used for enforcement by either side, would be receipt of the over payment. The investor lenders are making claims based upon various theories and settling their claims against the investment banks for their misbehavior. The result is that the investors are satisfied, the investment bank is still keeping a large portion of illicit gains and the borrower is being foreclosed even though the account receivable has been closed.

As long as the intermediary banks continue to pull the wool over the eyes of most observers and act as though they are owners of the debt or that they have some mysterious right to enforce the debt on behalf of an unnamed creditor, and get judgment in the name of the intermediary bank thus robbing the investors, they will continue to interfere with investors and borrowers getting together to settle up. Perhaps the reason is that the debt on all $13 trillion of mortgages, whether in default or not, has been extinguished by payment, and that the banks will be left staring into the angry eyes of investors who finally got the whole picture.

READ CAREFULLY! UNEASY INTERSECTIONS: THE RIGHT TO FORECLOSE AND THE UCC by Elizabeth Renuart, Associate Professor of Law, Albany Law School — Google it or pick it off of Facebook

 

Illinois Takes A Step in the Right Direction

If you are seeking legal representation or other services call our Florida customer service number at 954-495-9867 and for the West coast the number remains 520-405-1688. Customer service for the livinglies store with workbooks, services and analysis remains the same at 520-405-1688. The people who answer the phone are NOT attorneys and NOT permitted to provide any legal advice, but they can guide you toward some of our products and services.
The selection of an attorney is an important decision  and should only be made after you have interviewed licensed attorneys familiar with investment banking, securities, property law, consumer law, mortgages, foreclosures, and collection procedures. This site is dedicated to providing those services directly or indirectly through attorneys seeking guidance or assistance in representing consumers and homeowners. We are available to any lawyer seeking assistance anywhere in the country, U.S. possessions and territories. Neil Garfield is a licensed member of the Florida Bar and is qualified to appear as an expert witness or litigator in in several states including the district of Columbia. The information on this blog is general information and should NEVER be considered to be advice on one specific case. Consultation with a licensed attorney is required in this highly complex field.

Editor’s Comment: Illinois has taken a step forward but they are still plagued by the wrong assumption — that the courts are dealing with a legitimate debt. There is no debt if it is paid and in many cases the original debt has been paid down or paid off by  third party mitigation payments from insurance and credit default swaps.

Remember the note raises the presumption of the existence of the debt which is rebuttable. It does not prove the loss. Without proof of loss there is no foreclosure or any other lawsuit for that matter. The party seeking relief must show they have been or will be injured in some way to get money damages, equitable relief (like foreclosure) or anything else. Without injury they don’t belong in court, which is why we have a jurisdictional rule regarding standing. No injury=no standing.

So the bad point about the new rules is that the forecloser must prove the debt, but it doesn’t specifically say they must plead or prove the loss. The problem with that is production of the note (whether the the real note or something that looks like the real note) raises the presumption of the debt. It also causes Judges to assume that the loss is self-evident — i.e., if someone has the note it is presumed that they paid for it and will suffer a loss of their expectancy of payment under the terms of the note.

If you don’t demand to see the canceled check or the wire transfer receipt and wire transfer instructions or other forms of actual payment of money (where it can be seen that money actually exchanged hands) then there is no consideration, the paper is not negotiable, the UCC doesn’t apply and the party seeking to foreclose has no standing because they have not been injured by the borrower, even if the borrower didn’t make any payments. At the root of this mess is a scheme of illusions created by the banks. Demand reality and you will get traction.

But there are also some good points about the new rules. The one requiring counseling for the homeowners would be good if the counselors knew what they were talking about and understood the perfectly valid defenses available to homeowners who got swindled into signing papers in favor of a company that never made a loan to them. From what I have seen, the counselors don’t have any idea about such things and it is merely a debt counseling session about getting your life in order, which is a good thing, but not what you can do about having your life turned upside down by an illegal foreclosure.

The part I like is the burden placed on foreclosers that would show that a modification is not possible. This is simple: if the results of foreclosure are that the net proceeds are substantially less than what the homeowner is offering, then the loan  can be modified. Demand should be made for the methodology and the person who calculated the modification for the forecloser and their authority to do so. And demand should be made for what contact they had with the “creditor.” Then you contact the creditor and find out (a) if they are the creditor (b) whether they were contacted and (c) how they feel about getting $150,000 from the homeowner rather than $50,000 from foreclosure.

As for the modification part, the banks are going to fake it just like they fake everything else. Be ready with an expert declaration that shows that the modification offered is far better than foreclosure, and that this is evidence of the fact that the servicer never even “Considered” the modification, which is violation of HAMP and HARP.

Discussion Started Between Livinglies and AZ Attorney General Tom Horne

Featured Products and Services by The Garfield Firm

LivingLies Membership – Get Discounts and Free Access to Experts

For Customer Service call 1-520-405-1688

Editor’s Comment:

Dear Kathleen,

Thank you very much for taking my call this morning.

The question that Neil F. Garfield, Esq. had asked AZ Attorney General Tom Horne at Darrell Blomberg’s meeting was:

Why is the Arizona Attorney General not prosecuting the banks and servicers for corruption and racketeering by submitting false credit bids from non-creditors at foreclosure auctions?

Please feel free to browse Mr. Garfield’s web blog, www.LivingLies.wordpress.com as you may find much of the research and many of the articles to be relevant and of interest.

Mr. Garfield wishes the following comments and observations to be added, in order to clarify the question being asked.

It should probably be noted that in my own research and from the research from at least two dozen other lawyers whose practice concentrates in real property and foreclosures have all reached the same conclusion.  The submission of a credit bid by a stranger to the transaction is a fraudulent act.  A credit bid is only permissible in the event that the party seeking to offer the bid meets the following criteria:

1.  The homeowner borrower owes money to the alleged creditor

2.  The money that is owed to the alleged creditor arises out of a transaction in which the homeowner borrower agreed to the power of sale regarding that debt

3.  Any other creditor would be as much a stranger to the transaction as a non-creditor

Our group is also in agreement that:

4.  Acceptance of the credit bid is an ultra vires act.

5.  The deed issued in foreclosure under such circumstances is a wild deed requiring the title registrar to attach a statement from the office of the title registrar (for example Helen Purcell) stating that the deed does not meet the requirements of statute and therefore does not meet the requirements for recording.

6.  In the event that nobody else is permitted to bid, the auction violates Arizona statutes.

And we arrived at the following conclusions:

7.  In the event that there is no cash bid and the only “bid” was accepted as a cash bid from either a non-creditor or a creditor whose debt is not secured by the power of sale, no sale has legally occurred.

8.  The applicable statutes preventing the corruption of the title chain by such illegal means include the filing of false documents, grand theft, and evasion of the payment of required fees.

9.  This phenomenon is extremely wide spread and based upon surveys conducted by our office and dozens of other offices (including an independent audit of the title registry of San Francisco county) strongly suggest that the vast majority of foreclosures in Arizona resulted in illegal auctions, illegal acceptance of a bid, and illegal issuance of a deed on foreclosure-which resulted in many cases in illegal evictions.

10.  Federal and State-equivalent RICO may also apply, as well as Federal mail fraud which should be referred to the US Attorney.

CONSTITUTIONAL CHALLENGE TO THE NON-JUDICIAL SALE STATUTE AS APPLIED.

It should also be noted that all the same attorneys agreed that the use of an instrument called “Substitution of Trustee” was improper in most cases in that it removed a trustee owing a duty to both the debtor and the creditor and replaced the old trustee with an entity owned or controlled by the creditor.

This is the equivalent of allowing the creditor to appoint itself as Trustee.

In virtually all cases in which a securitization claim was involved in the attempted foreclosure the Substitution of Trustee was used exactly in the manner described in this paragraph.  This method of applying the powers set forth in the Deed of Trust is obviously unconstitutional as applied.

Constitutional scholars agree that the legislature has wide discretion in substituting one form of due process for another.  In this case, non-judicial sale was permitted on the premise that an independent trustee would exercise the ministerial duties of what had previously been a burden on the judiciary.

However, the ability of any creditor or non-creditor to claim the status of being the successor payee on a promissory note, being the secured party on the Deed of Trust, and having the right to substitute trustees does not confer on such a party the right to appoint itself as the trustee, auctioneer, and signatory on the Deed upon foreclosure nor to have submitted a credit bid.

We are very interested in your reply.  If your office has any cogent reasons for disagreement with the above analysis, we would like to “hear back from you” as you promised at Mr. Blomberg’s meeting 22 days ago.  We would encourage you to stay in touch with Mr. Blomberg or myself with regard to your progress in this matter in as much as we are considering a constitutional challenge not to the statute, but to the application of the statute on the above stated grounds.

Thank you for your time and consideration,

Sincerely

Neil F Garfield esq

licensed in Florida #229318

www.LivingLies.wordpress.com

%d bloggers like this: