Realities of Rescission Litigation

Since it appears that Judges around the country are finding wiggle room where none exists, it may be wise to add the fraud charges to the initial complaint seeking enforcement of rescission, injunction, and quiet title.

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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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Just a short note on why people should have us analyze their situation before they get into rescission litigation. It is true that there should not be any litigation where the rescission was sent, received and the “creditor” did nothing for more than 20 days and frequently more than 1 year and even several years. But Judges are continuing to resist the application of the procedure clearly set forth in TILA rescission slamming the door, where they can, based upon a presumptive finding of fact that the loan contract was consummated, and presuming it was consummated when the documents were apparently signed. Once again we are dealing with presumed facts that are most likely untrue.

And once again, despite Jesinoski, the courts are reading into the statute on procedure and saying that various conditions apply when the statute and the Supreme Court say otherwise. All rescissions are effective when mailed regardless of whether or not they are disputed.

So after due consideration I am inclined to say that even though it goes against what I think is correct procedure, it might be wise to consider filling the complaint with your allegations of fraudulent concealment etc that might equitably toll the 3 year expiration of rescission, and might convince the judge that there are questions of fact that need to be raised and just possibly might force the defendants to answer instead of relying on their motion to dismiss.

And this would enable the filer to argue against the use of common legal presumptions because the documents are not trustworthy when they are backdated, fabricated, forged, robo-signed etc. If the Judge agrees with that proposition then there is no basis on which the Judge can say the three year expired, the loan was purchase money, etc. It’s all thrown back on the “lending” side to allege the facts and prove them with legal standing — i.e., without the use of the note and mortgage.

Their singular problem might be revealed — that they don’t have an identified creditor and they have no way of finding the creditor because the money for the loans actually came from a dynamic dark pool.

Comments welcome.

https://livinglies.wordpress.com/2016/05/09/how-to-prepare-for-a-consult-with-neil-garfield/

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PRESUMPTIONS, PLEADING, PROCEDURE AND PROOF REALLY MATTER IN FORECLOSURE ACTIONS

In the final analysis nearly all foreclosures have been rubber-stamped based upon facts that are presumed to be true but which are untrue.
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In my opinion every case lost by homeowners has been the result of the court using legal presumptions and shifting the burden of persuasion onto the homeowner who has been stonewalled, with the court’s help, during discovery and stonewalled before there was any foreclosure when the homeowner submitted qualified written requests and debt validation letters. Hence the court shifts the burden to the homeowner and then helps the bank by not allowing access to information that would prove that the presumed fact is rebutted by competent evidence.
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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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As if it isn’t hard enough to defend foreclosure actions, pro se litigants and lawyers alike get caught up in a spiral of presumptions that are said to apply because of state law.
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Florida Statute 90.302 makes it clear that if there is credible evidence to sustain a finding of nonexistence of the presumed fact then the existence of nonexistence of the presumed fact shall be determined from the evidence without regard to the presumption. In other words the banks must plead the facts upon which they want relief and not rely upon presumptions of fact that are clearly untrue or at least debatable. After they plead those facts they must prove those facts. In other words the burden of persuasion is on the banks to show the fact is true instead of being on the hapless homeowner to show that the fact is untrue. The only party who actually knows, and the only party that has access to the information that would prove it one way or the other is the bank or entity that is initiating foreclosure.
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This provision is often overlooked — especially when arguing to compel discovery. Patrick Giunta, Esq. (Ft. Lauderdale)  has had success in demanding discovery that would rebut the rebuttable presumption. The bank responded with alarm.
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For example, the promissory note that is facially valid (complies with statute to be a negotiable instrument) enables the bank to invoke the legal presumption that everything in the note is true. That in turn gives rise the presumption that the Payee in that note is a lender.
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But that is also a rebuttable presumption. So discovery requests for information that might lead to the discovery of admissible evidence showing that the Payee was not a lender, but rather a broker would be appropriate. Courts have almost uniformly used the rebuttable presumptions as though they were conclusive presumptions. During discovery they will most often deny requests for information about one instrument or another and the underlying presumption of a real transaction for which the note is evidence.
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The note is evidence of the debt, not the debt itself. Theoretically at least, demanding information about that underlying transaction should produce no prejudice to the bank. But he fight on presumptions is so intense that it leads one to conclude that the banks are winning cases based upon facts that are not true but taken to be true as a result of the application of legal presumptions.
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It isn’t enough to know that the loans and foreclosures are fraudulent generally. It must be specific to the case. But I am leading the attack now on legal presumptions. I am attempting to use the information in the public domain and, where possible, inconsistencies in specific case filings, to show that the rebuttable presumptions that are normally applied should not be applied because of the common wording in the statutes that say if there are circumstances that show lack of trustworthiness about what appears to be a facially valid document then the party who proffers that document must prove their case without the benefit of legal presumptions. This, if accepted, would shift the burden of proof squarely on those attempting to use the vehicle of foreclosure, requiring them to prove the actual loan from a specific party, and the actual ownership of the debt by a specific party.

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The argument from the banks should be interesting. On its face there is obviously no prejudice requiring the banks to prove a fact that is true. What if the presumed fact is untrue? The banks will fight it because without the presumption they cannot prove the truth of  the matter asserted in the “facially valid” document. My proposition is this: they can’t prove those facts because they are not true. In the final analysis nearly all foreclosures have been rubber-stamped based upon facts that are presumed to be true but which are untrue. In my opinion every case lost by homeowners has been the result of the court using legal presumptions and shifting the burden of persuasion onto the homeowner who has been stonewalled, with the court’s help, during discovery and stonewalled before there was any foreclosure when the homeowner submitted qualified written requests and debt validation letters.
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Hence the court shifts the burden to the homeowner and then helps the bank by not allowing the homeowner to access information that would prove that the presumed fact is rebutted by competent evidence.
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Whether this attack will be allowed is another story. The underlying bias is that regardless of the malfeasance of the banks, the homeowner shoulders the entire burden of the wrongdoing. As stated in Yvanova while legally it matters whether the homeowner owes any money or anything else to the initiator of a foreclosure, in practice this is NOT followed in most court actions. The simple truth is that the courts are allowing the banks to bend, break or twist the rules and laws — until the bank wins. This obviously is wrong on many levels. The decisions being made during this 10 year holocaust will come back to haunt us on a variety of levels. These cases will be cited to enable fraudsters of all stripes and colors to escape liability and even accountability in civil and criminal courts.

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I have marveled, for example, at how the small fish have been convicted of white collar crime for issues relating to “mortgage fraud” when in fact they were doing exactly what their “victims” had wanted them to do. They were merely tossed under the bus to make it appear that a mega bank would never have sanctioned such behavior. In truth, they not only allowed continuous violations of lending laws, they invented most of the ways that lending laws were ignored. And the violations continue because the banks are obviously immune from serious prosecution.
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Both political parties are responsible for that and thus all three branches of government are infected with what has repeatedly been shown to be a fatal virus — fatal to the middle class who make up the vast majority of the consumer driven economy. We are undermining ourselves every time another foreclosure is allowed. In each foreclosure we remove another family from the ranks of consumers whose purchases normally make up 70% of GDP.  Look that up — the economists have replaced consumer purchases with the movement of paperwork linked to worthless financial instruments. Where the financial industry pretty much had an important place at 16% of GDP, it is now reported as just under 50%. But Wall Street is allowed to exist because it is a conduit for capital. How could the currently reported figures be right if the middle class has been indisputably decimated? What is so valuable on Wall Street that it now makes up half of our GDP? What are they measuring — inflated salaries and bonuses?
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As long as this bias remains true, the continuing epic financial fraud revealed in 2007-2009 will dominate our legal and living landscape.
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Hunter vs Aurora: Fla 1st DCA Business Records Gets Tougher

Show me any other period in American history where banks lost so many cases.
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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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see http://caselaw.findlaw.com/fl-district-court-of-appeal/1664754.html

The heat on the banks has been steadily increasing for the last three years and has increased at an increasing rate during the past 18 months. More and more banks are losing in what the bank lawyers call a “Simple, standard foreclosure action.” Show me any other period in American history where banks lost so many cases. There is obviously nothing simple and nothing standard about these foreclosures that have caused ruination of some 25 million people living in around 9 million homes.

If things were simple, we wouldn’t be looking at musical chairs in servicing, plaintiffs and “holders.” If things were standard, the creditor would come forth with clear proof that it paid for this loan. Nobody I know has EVER seen that. I have written about why. Suffice it to say, if there was a real creditor who could come forward and end the argument, they would have done so.

Two years ago the Hunter case was decided. The court was presented with a panoply of the usual smoke and mirrors. The court took on the issue of the business records exception as a guide to the trial judges in the 1st District and to the trial lawyers who defend homeowners in foreclosure. This is a sample of the part of the analysis we do. Here are some quotes and comments from the case:

Aurora alleged in its “Complaint to Foreclose Mortgage and to Enforce Lost Loan Documents” that it owned and held the promissory note and the mortgage, [note that the allegation is never made that Aurora was the owner of the debt or was the lender. Why not? Who is the actual creditor?]
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original owner of the note and mortgage was MortgageIT, and that MortgageIT subsequently assigned both to Aurora. A letter dated January 27, 2007, from Aurora to Mr. Hunter entitled, “Notice of Assignment, Sale, or Transfer of Servicing Rights,” directed him to remit mortgage payments to Aurora beginning February 1, 2007. The “Corporate Assignment of Mortgage” executed on June 11, 2007, and recorded on January 8, 2008, showed MortgageIT as the assignor and Aurora as the assignee. [MortgageIT was a thinly capitalized originator/ broker who could not have made all the loans it originated. Hence the presumption should be that it didn’t loan money to Hunter. Logically it follows that it never owned the debt and should not have had its name on the note or the mortgage. Nor did the source of funds ever convey ownership to MortgageIT. So what value or validity is there in looking at an assignment or endorsement or even delivery from Mortgage IT? And given that behavior (see below) do we not have circumstances in which the paperwork is suspect? Should that be enough to withhold the statutory presumptions attendant to “holding” a note?]
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To establish that it held and had the right to enforce the note as of April 3, 2007, Aurora sought to put in evidence certain computer-generated records: one, a printout entitled “Account Balance Report” dated “1/30/2007,” indicating Mr. Hunter’s loan was sold to Lehman Brothers—of which Aurora is a subsidiary and for which Aurora services loans—and payment in full was received on “12/20/2006;” the second, a “consolidated notes log” printout dated “7/18/2007” indicating the physical note and mortgage were sent—it is not readily clear to whom—via two-day UPS on April 18, 2007. Neither document reflects that it was generated by MortgageIT. -[Interesting that Aurora is identified as a subsidiary of Lehman who was in bankruptcy in October of 2008. Aurora usually represents itself as a stand-alone company which is obviously not true. Equally obvious (see discussion above) is that the reason why Mortgage IT was not identified on the printout is that it had nothing to do with the actual loan money — neither payment of the loan as a lender nor payment for the loan from the homeowner. Mortgage IT, for all intents and purposes, in the real world, was never part of this deal.]

Section 90.803(6) provides one such exception for business records, if the necessary foundation is established:

A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinion, or diagnosis, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity and if it was the regular practice of that business activity to make such memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, or as shown by a certification or declaration that complies with paragraph (c) and s. 90.902(11), unless the sources of information or other circumstances show lack of trustworthiness. (e.s.) – [THIS is the point of my article. Under current circumstances both in the Hunter case and in the public domain the court should have considered the fact that the parties were well known to have fabricated, forged and otherwise misrepresented documents, together with outright lying about the existence of underlying transactions that would track the paperwork upon which courts have heaping one presumption after another. My argument is that Aurora should not have been given the benefit of the doubt (i.e. a presumption) but rather should have been required to prove each part of its case. My further argument is that virtually none of the foreclosure cases should allow for presumptions in evidence after the massive and continuing settlements for fraud relating to these residential mortgages. If this doesn’t show lack of trustworthiness, then what would?]

— If you want this kind of analysis done on your case —
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Why We Developed the TILA Rescission Package

We start with the simple and irrefutable premise that if the parties are NOT in litigation, only a timely lawsuit filed by a party with legal standing could be considered to vacate the TILA rescission that is effective, as a matter of law, when it is mailed. The note and mortgage become void at that moment. Any claim of standing based upon the void note and void mortgage is by definition frivolous.

The banks want to place the burden on the homeowner to explain why this court should consider the rescission effective. But that is not the law. The burden is on the Banks to bring a timely action by a party with legal standing explaining why the rescission should be set aside or vacated.

Despite the simplicity of 15 USC §1635 it appears that the entire TILA rescission issue is being re-litigated even in the face of a unanimous Supreme Court decision that made it abundantly clear that what you read below is not theory, claim or defense: it is a fact.

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We are offering a Rescission Package for those lawyers and homeowners who are considering rescission as a potential strategy in their fight against the banks.

The whole point of the TILA rescission statute was to enable homeowners to avoid lawyers and judges when they canceled their loan contracts. Most jurists think this is a ridiculous thing to do. But their job is to enforce the law not make the law or “interpret” a statute that is perfectly clear on its face — especially when the highest court in the land (the boss of bosses in the judicial system) says there is no right, power, or authority possessed by ANY judge on ANY level to interpret this particular statute. The Jesinoski court said unanimously that this statute is clear on its face. THAT is the law of the land and the final instruction to every judge dealing with TILA rescission.

It should not be necessary to offer such a Rescission package. And considering the wording of the statute and the Supreme Court, there ought not to be litigation on whether the TILA rescission was effective when mailed — but that is exactly what is happening anyway. Judges who don’t like this statute should take it up with the legislature; they cannot and should not attempt to over-rule their boss — SCOTUS.

It is also true that the parties who brought the foreclosure have neither the legal standing nor (in most cases) a timely claim to vacate the rescission. So it is important to know what is happening on the ground with trial judges and appellate cases in order to anticipate how and when you will be met with opposition to a rescission that was and remains effective when mailed, as a matter of law. Despite the simplicity of 15 USC §1635 it appears that the entire rescission issue is being re-litigated even in the face of a unanimous Supreme Court decision that made it abundantly clear that what you read below is not theory, claim or defense: it is a fact.

The banks clearly have a problem with legal standing as they are losing an increasing number of foreclosure cases on exactly that point. And they already lost the fight over what TILA rescission means, when it is effective and how it is accomplished (i.e., a letter). But they continue to litigate, filing improper motions without standing and making all sorts of arguments that have already been heard and rejected by SCOTUS. The problem is that no matter how empty the arguments of the banks, if you don’t vigorously oppose them, the judge will “go with his gut” rather than the law.

It has become necessary to inform the public of what options exist for those who have sent notices of rescission either long ago or in the present and the answers differ. It also is necessary to know what to do with the rescission whether foreclosure has been started or not.

We start with the simple and irrefutable premise that if the parties are NOT in litigation, only a timely lawsuit filed by a party with legal standing could be considered to vacate the TILA rescission that is effective, as a matter of law, when it is mailed. The note and mortgage become void at that moment. Any claim of standing based upon the void note and void mortgage is by definition frivolous.

The problem seems to be that most of the discussion and litigation regarding rescission occurs in the context of litigation already exists. In that context the rescission is attacked by motion by the same parties who are pursuing foreclosure allegedly on behalf of some unknown real creditor. They do not allege they own the debt or that they are holders in due course.

Instead they say they are “holders” or “possessors” of the note with rights to enforce. They are appearing in a Representative capacity using the note and mortgage, and assignments and endorsements and even powers of attorney upon which they rely to have the court infer the existence of a right to foreclose. But when rescission becomes effective (upon mailing) the note and mortgage are void — and no legal claim or relief or legal standing exists when it is based upon a void instrument.

Once we read the Statute (15 U.S.C. §1635) and Regulations and supplement that with the unanimous ruling of the Supreme Court of the United States (Jesinoski v Countrywide) there is and can be no doubt that the loan contract has been lawfully and non-judicially canceled, and the note and mortgage are void.

Hence the foreclosing parties lack legal standing to oppose the rescission not only because it is already effective but also because even if they had legal standing and they were bringing a proper lawsuit the time is over. And unless the foreclosing party forgot to mention that they own the debt and thus fulfill the definition of the word “creditor” or “lender” they don’t have legals standing either. This is counter-intuitive for those who have not studied and analyzed the procedural remedy of TILA rescission.

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So we provide elaboration in our package that shows the lawyer options on how to argue the points in each particular case, where the facts always differ in some small way.

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I seem to be getting the same questions. All of then are essentially the same — “The TILA Statute says that TILA rescission does not apply to [fill in the blank]. Why are you saying that rescission is still effective where there are potential claims that would result in the rescission being vacated or set aside.?” The answer is that all TILA rescissions are effective when mailed, regardless of whether they are disputed or whether they could be disputed. The questioners are assuming that the “facts” are true and that they would lose if the pretender lender goes to court and shows that the subject alleged loan contract was for a purchase money mortgage, or was more than 3 years ago etc.
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Yes, my answer is that the rescission is effective and yes, it seems like a good strategy in many cases. In a nutshell the reasons are that (1) the actual creditor with standing has made no claim that the rescission should be set aside or vacated and (2) they have missed their opportunity to do so. (20 days from receipt of the notice of rescission). Third, there has never been such a lawsuit. And the reason for that lies deep within the analysis of “securitization fail” (see Adam Levitin) which produces an anomalous result that is nevertheless the consequence of bad actors on Wall Street, to wit: there appears no “party” who could meet the definition of an actual creditor to whom the money is actually owed (i.e., the party at the end of the line of the money train).
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And because this seems impossible, it is assumed to be untrue. Yet that is precisely what the Banks are counting on when they assert status as “holder”, or that they are possessed with rights to enforce even if they don’t disclose the identity of the creditor.
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The best analogy I can conceive is in contract law. If A makes an offer to B and B accepts the offer, they have an “executory” but not enforceable contract. But once A gives something of value to B and B gives something of value to A, pursuant to the terms of the oral or written contract, the contract becomes enforceable. All this occurs without any judge, and perhaps without any lawyer involved in the mix.
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The contract (a) exists and (b) is effective as a matter of law without judicial intervention. If there is a lawsuit it is going to be about whether there was a breach of the contract, not about whether the contract exists or was legally effective (except for some rare exceptions).
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Nearly all social and business contracts are meant to occur without court intervention and are valid and enforceable, as a matter of law, because the statutes and common law say they are. If you think that no contract shoudl be considered effective until a judge rules on it, then we would need to add about 1 million more judges.
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Here is the analogy to TILA Rescission: Add to our example above a VALID statute that is clear on its face that says that B can cancel the entire contract with a letter. Then add the Federal Regulation that states everything that was signed or done after the start of the enforceable contract (consummation) becomes VOID at the moment the letter is sent.
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Assume B sent the letter canceling the contract. What do you have? Answer — an unenforceable contract and a bunch of void instruments and acts that were performed pursuant to the enforceable contract. The issue of fair or not was taken up by the legislature and they decided that this is fair. Can a judge over-rule a valid statute? No. Now add SCOTUS saying that the statute is valid and clear and no interpretation is allowed. What can a Judge do about the letter canceling the contract. Nothing — unless A sues B, alleging that it is still the party to an actual transaction that occurred between A and B and alleges facts supporting a conclusion that B was wrong to cancel the contract, and A asks the court, in a timely lawsuit, to vacate the cancellation.
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The problem might best be expressed as procedural law versus substantive law. The rescission statute is a procedural law passed by Congress to administrate the substantive provisions of The truth in lending act.

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As pointed out by the Supreme Court of United States, this statute expresses how TILA Rescission is initiated and when it is effective. This statute makes no distinction between disputed an undisputed rescissions. And that point was expressly stated by Justice Scalia when writing for a unanimous Supreme Court. All rescissions are effective on the day they are mailed regardless of whether the thinking of the borrower is ignorant, defective, or arguable.

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The rescissions are effective by operation of law. By the express wording of the statute, the regulations, in the Supreme Court of United States, the mailing of a notice of rescission makes the rescission of effective as a matter of law.

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The position staked out by Congress and the Supreme Court of United States does not limit access to the courts for an aggrieved creditor. Such a creditor may file a complaint against the borrower seeking to vacate the rescission which is now effective as a matter of law. Obviously such a complaint could only be filed by a party possessing legal standing to contest the statutory nonjudicial rescission.

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Your questions are about how to deal with a prospective lawsuit that has not been filed. And your question presumes that the creditor would win that lawsuit based on the assumption that a court would interpret the consummation of the transaction to have been a purchase money mortgage.

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But the procedural question is whether the creditor can actually bring such a claim not only because of the question of legal standing but also because more than 20 days has elapsed since the rescission was received.

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The Creditor only has a 20 day window in which to file any contest of the rescission. We know this because of the wording in the rescission statute and the interpretation of that statute by the Supreme Court of the United States. That court overturned thousands of decisions from trial court and appellate courts that required a lawsuit to be filed by the borrower in order to make rescission effective. In The unanimous Court rejected that interpretation for two reasons, to wit:

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(1) the statute was clear on its face and the TILA statute made it clear that the notice of rescission was effective when it was placed in the mail. Therefore no lawsuit was required to determine whether or not the rescission was effective. It was effective as per the express wording of the statute. The only time limit expressed in the statute for compliance by the”Lender” is 20 days from the date of receipt. The banks want to place the burden on the homeowner to explain why this court should consider the rescission effective. But that is not the law. The burden is on the Banks to bring a timely action by a party with legal standing explaining why the rescission should be set aside or vacated. 

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By combining the first day of TILA rescission as being the date of mailing and the last day of TILA rescission being 20 days from the date of receipt by the “lender”, it is obvious that any attempt to extend that period of time would essentially translate as meaning that the notice of rescission was not considered effective until a judge ruled upon it. This is opposite to what Congress said, what the Supreme Court said, and what the Federal regulations say. Banks are attempting to re-litigate this despite the fact that the highest court in the land rejected their argument already.

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(2) the Supreme Court of the United States (SCOTUS) has expressly ruled that this statute is clear on its face and is not subject to any interpretation of any kind. Specifically the court simply restated the content of the statute which provides that the notice of rescission is effective upon mailing, which means that there is no lawsuit required to make the rescission effective, and the court noted that the statute made no distinction between disputed an undisputed rescissions.

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Hence it is premature to attempt to resolve questions relating to prospective issues which might be alleged in a lawsuit directed at vacating the rescission.

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This is only counter-intuitive if you assume that borrower’s should not have such power to cause such a huge impact by merely writing a letter. But the law is filled with such examples, most notably the Power of Sale in nonjudicial states. In both instances a private action carries the force of law.

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In nonjudicial states the consequence is the most severe remedy allowed in civil litigation — loss of property and in most  cases, the homestead of the property owner. In the case of rescission, the borrower procedural removes any allowed use of the alleged loan contract, debt, note or mortgage. But it is entirely possible and even probable in many if not most cases that no loan contract was ever consummated in actuality by consideration from the payee on the note to the maker of the note.

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Consummation is another “fact” that can only be determined by a court after due process — pleading, defenses and a trial. Such a case is NOT about whether the rescission was effective. It is about whether the rescission should be vacated or enforced as to the three duties of the “lender” after receipt of the TILA Rescission.

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If that lawsuit is not currently pending and timely filed, there is no option for the creditor except compliance, to wit: (a) return canceled note (b) release encumbrance and (c) disgorgement and payment of of money to the homeowner. Only AFTER those duties are fully satisfied may a creditor make any demand for payment, and even then there is no collateral for the debt that the creditor says is due.

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Table Funded: The Student Loan Scam

The essential question I pose is this: if the student loan was table funded (and it does appear to me that they were, in many cases), then why is the originator/broker receiving the government guarantee and the exemption from discharge? By definition they didn’t loan any money to the student. It seems to me that government, lawyers, and courts are overlooking the fact that many banks (large and small) have been acting as brokers and not as lenders.

Like the so-called mortgage loans, the underwriting decisions lie outside of the organization that “granted” the alleged loan from an undisclosed third party. Yet they claim and receive and sell government benefits as though they were lenders.

My theory under current law is that if the loan was funded from the sale of student debt pools there are two outcomes, to wit: (1) the government guarantee does not attach because there is no loan or risk of loss to guarantee and because the actual lender is not the broker, pretender who appears on the note, (i.e., they were not entitled to the government protections because they brokered the transaction instead of loaning the money) and (2) since the government guarantee and other conditions are no longer involved, there is no reason to prevent discharge in bankruptcy.

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

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see http://www.rollingstone.com/politics/news/how-wall-street-profits-from-student-debt-20160414

Wall Street is like that closet in your house where you throw everything in that you probably won’t need for a while or maybe not at all. When you open the closet door everything falls out on top of you. In this case it is $1.2 Trillion on student debt with “default” rates rising sharply and interest rates rising into double digits. We are in effect making it impossible for the brightest minds to get the education we need for the sake of our society. Anyone want a doctor or lawyer who has been poorly education or not educated at all?

It’s all about money in education. Like medical insurance, the more distance you put between the consumer and the the actual delivery of the service, the less people think about it and the the more the vendors charge. In the end education becomes a process of justifying the cost of a commodity rather than creating the best possible education possible.

Somehow the banks managed to intervene between students and institutions of higher learning, such that they enjoy very high interest rates (after the student completes education) and a guarantee from the Federal government or at least a guarantee that the debt cannot be discharged in bankruptcy.

The government loans work the way they are intended and there are many programs to provide relief to students who in many cases are burdened for life with student debt. But the private loans, which now dominate the marketplace, are putting a drag on our prospects as a nation — but still great business for the banks. Most other countries do not allow graduating students to be burdened by this debt; and those countries that provide free tuition (up to a point) or who pay for their citizens to travel and learn in countries who have quality institutions for higher learning, end up with an increasing GDP stemming from the contribution and productivity of highly educated, trained people who became employees, officers and leaders.

But here is the rub — banks making student loans in most cases  enjoy immunity from bankruptcy and so they use all sorts of sales techniques to get the prospective student to borrow as much as possible for tuition and”expenses.” They do this for the same reasons that homeowners or home buyers were encouraged to put as much into  their alleged mortgage loan as possible — landscaping and other improvements to the house that did not raise the value of the home.

The game, once again, is securitization. Even if we assume that the claims of securitization of these loans are true, we see a basic inconsistency in the choices the banks make as to how to deal with the risk of loss. The answer, like the mortgage loans, is that they have no risk of loss. They have already sold the student loans into a secondary market for securitization. That being true, the premise behind the exclusion of student debt from the benefits of bankruptcy is false.

The first premise is that banks would not provide funding for higher education without the guarantee that the loans cannot be discharged in bankruptcy and, in other cases, without the guarantee of repayment by the government. This is not true. By securitizing the loans (or at least subjecting them to claims of securitization in the secondary market), the banks are making tons of money as brokers and conduits without any risk of loss whatsoever. Our previous system of public loans for high learning worked far better than the current one in which private lenders dominate the market despite the “reforms” that have been enacted.

The second premise is that both the loans and these government guarantees are salable to “investors.” This is the controversial part. Given the premise behind the government guarantees, why should a broker be able to sell that government guarantee at a profit? What gives them the right to sell government promises? The object was to provide capital to students — not to increase the number of arcane financial products in the marketplace. If the loans are not salable without those government guarantees, it is because (as we know from the mortgage market) the loans make no sense. These are flawed financial products based upon the same “bad underwriting” we have seen in the continuing mortgage crisis.

Thus my premise and my question are the same: why should a bank or other “lender” make a profit on a bad loan? Why should banks be freed from the risk of loss that the government guarantees are meant to cover? Why have we strayed from existing law in which the “banks” (which we have all presumed to be “lenders”) are the party primarily responsible for the viability of the loan? Why should these bad loans be subject to sale to “investors” whose only interest in the student loans is the elimination of risk because the government has guaranteed benefits? Why should young people, before they get their education, be held to a higher standard of responsibility than the banks who are setting them up for failure?

My proposed legal theory is that once a bank makes the election to sell the student loan into the secondary market, the government guarantees should vanish. My theory under current law is that if the loan was funded from the sale of student debt pools there are two outcomes, to wit: (1) the government guarantee does not attach because there is no risk of loss to guarantee and because the lender is not the broker, pretender who appears on the note, (i.e., they were not entitled to the government protections because they brokered the transaction instead of loaning the money) and (2) since the government guarantee is no longer involved, there is no reason to prevent discharge in bankruptcy.

Then we will have close attention paid to the value of the loans and the manner in which they were sold. Once sold, these loans should be dischargeable in bankruptcy. Once sold these loans should offer no safe haven to investors that the loan will be paid by the U.S. government. Whether this can be done in the courts under current law is debatable. But it can and should be done through Congress and state legislatures. Without these reforms we are essentially eating our young.

MISSION CREEP NOTICE: Wall Street is now looking to “Securitize” health care loans. There is hardly anything they are not claiming to securitize.

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For further information please call 954-495-9867 or 520-405-1688. You also may fill out our Registration form which, upon submission, will automatically be sent to us. That form can be found at https://fs20.formsite.com/ngarfield/form271773666/index.html?1452614114632. By filling out this form you will be allowing us to see your current status. If you call or email us at neilfgarfield@hotmail.com your question or request for service can then be answered more easily.
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Rescission Procedure Explained — Tonight on the Neil Garfield Show

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

More than 40,000 people listen to the Neil Garfield Show. Maybe you should too.
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https://www.vcita.com/v/lendinglies to schedule, leave message or make payments.

For further information please call 954-495-9867 or 520-405-1688.  If you call or email us at neilfgarfield@hotmail.com your question or request for service can then be answered more easily.

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

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The following is lifted from the content of a report you can get by clicking on https://www.vcita.com/v/lendinglies. The review, report and analysis includes a 30 minute consult. Legal opinions are rendered to attorneys in all 50 states and to clients in the State of Florida.

  1. TILA Rescission is an event. It is not a theory, claim or defense. It is a nonjudicial procedural remedy. It is accomplished by mailing a letter. In most cases it is an event that has indisputably occurred. The effect of TILA Rescission is, as a matter of law and by operation of law, to cancel the loan contract, and to render the note and mortgage void. In its Motion to Dismiss, the pretender lenders seek to have courts assume that the rescission exists but is not effective, despite all law to the contrary. The matter is well settled, to wit: if the rescission exists, it is effective as a matter of law.
  2. The effectiveness of a TILA Rescission is not predicated upon any judicial analysis of the likelihood of the borrower’s success if a lawsuit to vacate the rescission is filed by a party with legal standing. Any such interpretation would be opposite to the holding in Jesinoski that the rescission is effective upon mailing, whether disputed or not.
  3. The pretender lenders do not dispute that rescission has occurred but seek to invoke issues in a case that is not and cannot be before any Court, to wit: whether the rescission is effective. And they seek to do so through motions in which they deftly avoid the requirement of pleading and proving facts in a proper lawsuit to vacate the rescission, thus depriving the homeowners of their right to raise appropriate defenses to the non-existent lawsuit seeking to vacate the rescission.
  4. Pretender lenders want the courts to enter an order that would impliedly vacate the rescission.

The pretender lenders seek to have the court assume facts about the consummation of the alleged loan including the date or dates when consummation occurred and the source of funding for the alleged loan. They even want the court to assume that disclosures were adequate. These are questions of fact requiring a lawsuit, discovery and trial. They seek to have courts adopt the premise that the rescission is not effective upon mailing if there are potentially defects in the reasoning or actions of the borrower. SCOTUS has expressly rejected that argument. (Jesinoski v Countrywide). SCOTUS clearly stated that the rescission is complete upon mailing, regardless of whether it is disputed or not.

This does not remove the ability of the creditor to vacate the rescission but it does eliminate the right of any creditor to raise a challenge based upon the theory that the rescission was not effective when mailed. That issue is completely settled by SCOTUS.

All three branches of government are in unanimous agreement: TILA Rescission is effective upon mailing by operation of law. Nothing further is required from the borrower.

Another Sham: The Sudden Rise of Powers of Attorney in Foreclosure Cases

The entire foreclosure mess has been predicated upon one huge false premise — that by fabricating reams of paper, each one tied to the other or apparently tied to others, rights are suddenly created where none existed. This has never been the law but it suddenly has become the underpinning of most decisions in favor of banks and servicers who are strangers to the transactions upon which they are making claims.

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 formhttps://fs20.formsite.com/ngarfield/form271773666/index.html?1453992450583 
Our services consist mainly of the following:
  1. 30 minute Consult — expert for lay people, legal for attorneys
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  3. Case review and analysis
  4. Rescission review and drafting of documents for notice and recording
  5. COMBO Title and Securitization Review
  6. Expert witness declarations and testimony
  7. Consultant to attorneys representing homeowners
  8. Books and Manuals authored by Neil Garfield are also available, plus video seminars on DVD.
For further information please call 954-495-9867 or 520-405-1688. You also may fill out our Registration form which, upon submission, will automatically be sent to us. That form can be found at https://fs20.formsite.com/ngarfield/form271773666/index.html?1452614114632. By filling out this form you will be allowing us to see your current status. If you call or email us at neilfgarfield@hotmail.com your question or request for service can then be answered more easily.
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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Just want to point out that the reason why they are using a Power of Attorney (POA) instead of a servicing agreement is that the servicing rights are retained by the Master Servicer and sometimes even the subservicer. While the POA might appear to grant full authority it is missing the servicing functions including accounting for borrower payments and payments to the “investor(s)”. Especially when you add the element of entries made at or near the time of the transaction. This is another reason why homeowners who are alleged borrowers should be able to look at those transactions and see if the “business record” is correct. Once again we come back to discovery as the essential time to bring this up.

All of this makes it impossible for the latest entity to legally receive an application for modification. When you scratch the surface and actually ask the question the answer is always the same — that the “corporate representative” of the latest entity in the game of musical chairs can neither offer nor accept any modification and in fact is there purely for the purpose of getting the foreclosure judgment and forced sale of the property — an event that puts a judges order and a court clerk’s certificate on top what is in actuality a pile of empty, worthless paper.
The inability and/or unwillingness of the Plaintiff or its newest “attorney in fact” to show the actual money trail and actual deposits and disbursements, is a key factor in showing that other documents upon which the  banks and servicing are relying (using legal presumptions to fake their way through the process) are now suspect and thus not deserving of the application of the legal presumptions that ordinarily would apply to facially valid or recorded documents.
Remember the newest entity supplying records is NOT the Plaintiff. Judges tend to treat them as though they w ere the Plaintiff. This element of distraction by the lawyers for the banks and servicers has served them well. The Judge treats the newest entity as the Plaintiff when in fact they are not alleged to be holder, owner or have any interest or authority at all. And for good measure let’s not forget that the newest entity has no authority and possesses no “business records” (as an exception tot he hearsay rules of evidence) if it claims authority from an entity that has no power to give such authority. The entire foreclosure mess has been predicated upon one huge false premise — that by fabricating reams of paper, each one tied to the other or apparently tied to others, rights are suddenly created where none existed. This has never been the law but it suddenly has become the underpinning of most decisions in favor of banks and servicers who are strangers to the transactions upon which they are making claims.
The bottom line is that the party charged with enforcement is not a servicer but rather an enforcer. As an enforcer and since they do not have all the rights, obligations etc of a Master Servicer or subservicer, can their business records still be admissible? If they are only the enforcer and they are relying upon their stringent audit of the business records, that sounds more like a fact witness or even an expert witness than a party who has actual authority to service the loan.

The issue becomes split. The new entity that is not a servicer and therefore not charged with servicing duties, should not be able to claim that it has authority to bring the action in the name of another entity. The servicer clearly could but the attorney in fact is really a material witness whose sole function is to testify about the business records. The assumption is made that as the successor to prior alleged servicers, they can claim a chain of custody. But a company that in actuality is there for e the sole purpose of getting “business” records” into evidence is a fact witness who deserves no more presumptive credibility than any other witness.

The “servicer” claim by way of a POA is therefore a sham.

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