Wells Fargo Wrongful Foreclosure Kills Elderly Homeowner?

see https://livinglies.wordpress.com/2013/04/29/hawaii-federal-district-court-applies-rules-of-evidence-bonymellon-us-bank-jp-morgan-chase-failed-to-prove-sale-of-note/

“The administrator of the estate of Larry Delassus sued Wells Fargo, Wachovia Bank, First American Corp. and others in Superior Court, for wrongful death, elder abuse, breach of contract and other charges.

Delassus died at 62 of heart disease after Wells Fargo mistakenly held him liable for his neighbor’s property taxes, doubled his mortgage payments, declared his loan in default and sold his Hermosa Beach condominium, according to the complaint.”

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 850-296-1960. 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 and Analysis: There are two reasons why I continue this blog and my return to the practice of law despite my commitment to retirement. The general reason is that I wish to contribute as much as I can to the development of the body of law that can be applied to large-scale economic fraud that threatens the fabric of our society. The specific reason for my involvement is exemplified in this story which results in the unfortunate death of a 62-year-old man. I have not reported it before, but I have been the recipient of several messages from people whose life has been ruined by economic distress and who then proceeded to take their own lives.  In some cases I was successful in intervening. But in most cases I was unable to do anything before they had already committed suicide.

It is my opinion that the current economic problems, and mortgage and foreclosure problems in particular, stem from an attitude that pervades corporate and government circles, to wit: that the individual citizen is irrelevant and that damage to any individual is also irrelevant and unimportant. If you view the 5 million foreclosures that have already been supposedly completed as merely a collection of irrelevant and unimportant citizens and their families then the policies of the banks on Wall Street and the politicians who are unduly influenced by those banks, becomes perfectly logical and acceptable.

I start with the premise that each individual is both relevant and important regardless of their economic status or their political status. In my opinion that is the premise of the Declaration of Independence and the United States Constitution. The wrongful foreclosure by strangers to the transaction is not only illegal and probably unconstitutional, it is fundamentally wrong in that it is founded on the arrogance of the ruling class. Our country is supposed to be a nation of laws not a nation of a ruling class.

If you start with the premise that the Wall Street banks want and need as many foreclosures as possible to complete transactions in which they received the benefit of insurance proceeds and proceeds of head products like credit default swaps, then you can see that these “mistakes”  are in actuality intentional acts intended to drive out legitimate homeowners from their homes. These actions are performed without any concern for the legality of their actions, the total lack of merit of their claims, or the morality and ethics that we should be able to see in economic institutions that have been deemed too big to fail.

The motive behind these foreclosures and the so-called mistakes is really very simple, to wit: the banks have nothing to lose by receiving with the foreclosure but they had everything to lose by not proceeding with the foreclosure. The problem is not a lack of due diligence. The problem is an intentional avoidance of due diligence and the ability to employ the tactic of plausible deniability. Mistakes do happen. But in the past when the bank was notified that the error had occurred they would promptly rectify the situation. Now the banks ignore such notifications because any large-scale trend in settling, modifying or resolving mortgage issues such that the loan becomes classified as “performing” will result in claims by insurers and claims from counterparties in credit default swaps that the payments based upon the failure of the mortgage bonds due to mortgage defaults was fraudulently reported and therefore should be paid back to the insurer or counterparty.

In most cases the amount of money paid through various channels to the Wall Street banks was a vast multiple of the actual underlying loans they claimed were in asset pools. The truth is the asset pools probably never existed, in most cases were never funded, and thus were incapable of making a purchase of a bundle of loans without any resources to do so. These banks claim that they were and are authorized agents of the investors (pension funds) who thought they were buying mortgage bonds issued by the asset pools but in reality were merely making a deposit at the investment bank. The same banks claim that they were not and are not the authorized agents of the investors with respect to the receipt of insurance proceeds and proceeds from hedge product’s life credit default swaps. And they are getting away with it.

They are getting away with it because of the complexity of the money trail and the paper trail. This can be greatly simplified by attorneys representing homeowners immediately demanding proof of payment and proof of loss (the essential elements of proof of ownership) at the origination, assignment, endorsement or other method of acquisition of loans. In both judicial and nonjudicial states it is quite obvious that the party seeking to invoke  foreclosure proceedings avoids the third rail of basic rules and laws of contract, to wit: that the transactions which they allege occurred did not in fact occur and that there was no payment, no loss and no risk of loss to any of the parties that are said to be in the securitization chain. The securitization chain exists only as an illusion created by paperwork.

The parties who handled the money as intermediaries between the lenders and the borrowers do not appear anywhere in the paperwork allegedly supporting the existence of the securitization chain. Instead of naming the investors as the owner and payee on the note and mortgage, these intermediaries diverted the ownership of the note to controlled entities that use their apparent ownership to trade in bonds, derivatives, and hedge products as though the capital of the investment bank was at risk in the origination or acquisition of the loans and as though the capital of the investment bank was at risk in the issuance of what can only be called bogus mortgage bonds.

Toward that end, the Wall Street banks have successfully barred contact and cooperation between the actual lenders and the actual borrowers. These banks have successfully directed the attention of the courts to the fabricated paperwork of the assignments, endorsements and securitization chain. The fact that these documents contain unreliable hearsay statements about transactions that never occurred has escaped the attention and consideration of the judiciary, most lawyers, and in fact most borrowers.

It is this sleight-of-hand that has thrown off policymakers as well as the judiciary and litigants. The fact that money appeared at the time of the alleged loan closing is deemed sufficient to prove that the designated lender on the closing papers was in fact the source of the loan; but they were not the source of the funds for the loan and as the layers of paperwork were added there were no funds at all in the apparent transfer of ownership of the loan that was originated by a strawman with an undisclosed principal, thus qualifying the loan as predatory per se according to the federal truth in lending act.

The fact that the borrower in many cases ceased making payments is deemed sufficient to justify the issuance of a notice of default, a notice of sale and the actual foreclosure of the home and eviction of the homeowner. The question of whether or not any payment was due as escaped the system almost entirely.

Even if the  borrower makes all the payments demanded, the banks will nonetheless seek foreclosure to justify the receipt of insurance and credit default swap proceeds. So they manufacture excuses like failure to pay taxes, failure to pay  insurance premiums, abandonment, failure to maintain or anything else they can think of that will justify the foreclosure and a demand for money that far exceeds  any loss and without giving the borrower an opportunity to avoid foreclosure by either curing the problem for pointing out that there was no problem at all.

As I have pointed out before, the entire mortgage system was turned on its head. If you turn it back to right side up then you will see that the receipt of money by the intermediary banks is an overpayment on both the bond issued to the investor (or the debt owed to the investor) and the promissory note that was executed by the borrower on the false premise that there had been full disclosure of all parties, intermediaries and their compensation as required by the federal truth in lending act, federal reserve regulations and many state laws involving deceptive lending.

Wells Fargo will no doubt defend the action of the estate of the dead man with allegations of a pre-existing condition which would have resulted in his death in all events. The problem they have in this particular case is that the causation of the death is a little easier to prove when the death occurs in the courtroom based upon false claims, false collections, and probably a duty to refund excess payments received from insurers and counterparties to credit default swaps.

The cost of the largest economic crime in human history is very human indeed.


Elderly Man Allegedly Dies in Court Fighting Wells Fargo ‘Wrongful’ Foreclosure

Fraud in the Factum: The Core of the Securitization Myth

Dan Edstrom, our senior securitization analyst who will be one of the presenters in both the San Francisco (Emeryville) seminar and the Anaheim Seminar, ran across some material that should assist many homeowners and attorneys representing homeowners. Remember that part of the seminar is devoted to the business model for making money — a lot of it — in representing homeowners in challenges to the pretender lenders. Call Customer Service 520-405-1688.

The basic fact pattern is that through dual tracking (see the last post), the players in this game were playing a shell game that resulted in repeated windfalls to the players while delivering multiple financial body blows to the only two parties in the transaction that counted: the lender and the borrower.

By inducing the borrower to sign documents that recited transactions that never existed nor were they expected to take place, the borrower finds himself owing a third party to whom an obligation is owed while at the same time having executed papers allowing the securitization players to claim that they were the owners of the loan for trading, insurance and bailouts purposes.

The essence of this is agreement and consent. The fact that an offer has been made does not mean the other party concentrated to the terms presented. And if the terms presented are untrue, the asset is as invalid as if assent had never been given.

These are voidable, not void, transactions. As with all foreclosure litigation, the pleading and proof is tricky. If you deny that the document is true and that the signature on it is true, you are denying that you assented to its terms and that your signature was fraudulently induced. It is also highly probable if not definite that most of the so-called promissory notes were destroyed or “lost”, putting the burden on the the party who wishes to use a copy to tell the story of how it was lost or destroyed and proving that an actual financial transaction took place between the pretender lender and the borrower — a fact that cannot be proved without fabricated documents based upon perjury for its foundation.

Pretender lenders get around this impossible burden of proof by producing “the original” which is anything but the original (see Photoshop) and without proper foundation from a competent witness who can testify as to the foundation and introduce documents proving that the payee on the note, the secured party on the note, were each involved in a financial transaction with the homeowner — and that therefore these documents are accurate depictions or evidence of the terms of the transaction.

The trick was simple: present a note that looks like a note and present a mortgage that looks like a mortgage even if they are not the originals, lift the signature of the homeowner from some other document and affix it to the the documentes in quesstion. 9 out of 10 times the homeowner will concede that those are the the documents presented him at closing, that the signature is his and so it goes through the loan, default etc.

By the time the illicit proffer of evidence is completed by opposing counsel (without a single stitch of evidence introduced into the record) the borrower is seen as admitting the loan, the note, the mortgage, the default etc. and thus trying to find some gimmick to get out of the perfectly “legal” obligation.

The perfectly “legal” obligation took place between the homeowner and the lender (Pension Fund) — but here is the rub: there are no documents to show that except for wire transfer instructions. Hence, the mortgage, note and other closing documents are completely fictitious, even without the obvious elephant in the living room — appraisal fraud.

The position of the pretender lenders is simple: even if the actual transaction was between the homeowner and the actual lender, they still own the note and mortgage to the exclusion of the actual lender, until such time as the loan goes into default, is sold in foreclosure and the homeowner is evicted. While it it might be true that they own the pieces of paper depicted as the note, mortgage and HUD closing statement, they certainly did not comply with the disclosure requirements of TILA and RESPA.

They ignore the elements of the PSA and prospectus that certainly imply that the proceeds of insurance, credit default swaps etc should be paid to or credited to the the actual lenders, but they ignore that, thus maintaining a liability to the actual lender from the pretender lender and creating the holographic image of an obligation from the homeowner created on paper but without any factual foundation where money exchanged hands.

Most of all they ignore the time limits placed on the transaction in which the loan must be transferred to the actual lender — 90 days, according to the PSA and the REMIC provisions of the IRC. And worst of all, they ignore the essential premise of the transaction with the lender to wit: “We promise to give you interest and principal based upon payments from borrowers of interest and principal, guaranteed by the subservicer and Master Servicer, who are insured by Triple A rated insurance companies (AIG) on securities that have also been examined and awarded a Triple A rating. These loans will only be funded after being subject to the stringent requirements of the industry standard underwriting practices.” None of it was true, of course.

But more importantly, they are NOW trying to throw the loss of a bad loan over the fence at the investor where the closeout date was years prior to the “assignment” and the loan is already in default thus preventing the manager of any pool from accepting the defective loan without violating every aspect of his authority to act on behalf of the pool.

In short, the players in the myth of securitization (it never happened, none of it) borrowed the ownership as long as it was convenient to do so in trading and purchasing insurance and other hedge products and borrowed the loss of the actual lenders (Pension Funds) in order to receive TARP and other bailouts amounting to more than $17 trillion (which happens to be 5-6 times the actual defaulted loans and 12 times the actual losses on even the toxic loans) and 130% of ALL loans funded during the mortgage meltdown.

And that is why I say ALL the mortgages have been paid — interest and principal and that anyone paying on a mortgage is probably overpaying the creditor — who has been paid in full directly or indirectly multiple times.

Where’s the law on this, is the common question. Here it is, backed up by hundreds of years of common law and case decisions:

Fraud In the Factum

Wells Fargo Compounds Misbehavior with Retaliation

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Bank Closes Accounts of Critics

Editor’s Notes:  

Wells Fargo’s story has been as bad or worse than many of the stories that have been published about banks committing crimes (forgery), misrepresentations is court, and fraudulent foreclosures. But Wells escaped a lot of media attention even with mammoth fines and penalties imposed by enraged Judges. We shouldn’t be too surprised by all this bullying and intimidation — after all, it is even a huge problems in schools which makes one wonder what is happening in the homes.

Their strategy seems to be to say anything that gets the job done (foreclosure) regardless of the facts or the law. It starts off with them having their attorney represent them in court, proffering “facts” that are not in evidence and turn out to be completely untrue. More specifically, they tell the court and the borrower that they are the creditor and then later, when it turns out the representation was completely untrue, and it is time for the homeowners to get attorneys fees and costs, they tell the Judge that they made a mistake and that they are not really the creditor, just the servicer, through America’s Servicing Company, which is not even a legal entity but simply a department within the Bank.

Now they are striking back through their commercial banking operation finding excuses to close or freeze accounts of those organizations that are critical of Wells Fargo behavior. We can expect more of this bullying and intimidation, rather than less. I expect that the other big banks will start doing the same thing. We have already seen how our own effort here at LivingLies have been hampered in getting simple title reports, because the sources of this on-line data, while open to the public, often mislead any inquirer into “plans” that won’t give them the right data.

Matt Weidner has cataloged some of the events in the article below. Hat tip to him for the effort. The media problem will heat up against the banks when the investigative reporters finally get the point: the mortgages are invalid, there was no financial transaction between the parties recited on the “closing” documents, and the terms of repayment shown to the lender (pension funds etc., who advanced the money for the loans) were different from the terms shown to the borrower.

And when the media realizes that the money never followed the document trail from beginning to end the fun will really start. The transaction was between the homeowner and the pension funds through an undifferentiated commingled escrow account where there were no decisions on “bundling” (which never actually took place). It was just money in an account that was used to fund mortgages without getting a signature from the homeowner borrower on the actual transaction and without the investor lender knowing the true nature of the underwriting and funding process.

In order for these proceedings to start leaning toward the borrower, the borrower and their attorney must educate themselves enough to deny the debt, deny the default, deny the note, deny the mortgage and everything else that is being presumed by the would-be forecloser. It is the borrower’s job to to argue passionately and persuasively that there are material facts in issue on which the borrower is entitled to a fair hearing on the merits. Instead borrowers and attorneys are reading the pablum fed to them by the banks’ publicists and they are failing to object to misrepresentations in court without facts in evidence, failing to object to lack of foundation, competency of witness and hearsay.

By the time the case gets argued by the homeowner, it is already established in the Judge’s mind that you took a loan, it was from these people who are foreclosing or one of their affiliates, you failed to pay it and you defaulted on the terms of repayment. Now you want that same judge, with those thoughts in his/her head, to start ruling for you because some of the documents were improperly prepared. The biggest mistake homeowners make is trying to win the entire case in the first hearing or in their first pleading. Any good trial lawyer knows that is impossible. The pleading and argument of the homeowner should focus on denial of any facts that would support any lawsuit, foreclosure or sale. You have had lots of loans, but none of them were with these people or their predecessors. Thus the note was procured by trick (fraud in the execution) based upon false pretenses (Fraud in the inducement) and predatory lending practices (violations of TILA).

It was all a living lie. And instead of taking their just deserved punishment, Wells Fargo is leading the way to punish those who tell the truth. Brad Keiser who co-presented in our first national tour liked to quote George Orwell who said something along the lines of “In a world of lies, the most courageous act is to tell the truth.”

WOW- Writing Against The Banks Can Get You Punished…


By Matt Weidner

Scary stuff from Zombeck:

A wrap-up of stories and posts you might have missed or overlooked — the ones below the fold.

For quite some time Wells Fargo managed to stay below the media’s radar and let the other guys like Bank of America and JPMorgan Chase, for example, bear the brunt of consumer and activist outrage. Lately, it seems, they’ve had to prove that they’re equally nasty and contemptible as the others. Foreclosing on priests and temples; closing bank accounts without apparent reason; promoting and profiting from private prisons; and ripping off towns, states and counties with bid rigging that skimmed money slated for schools, hospitals, and nursing homes.

Wells Fargo can’t seem to get enough bad press these days. While working with the “any press is good press” theory may work for loud mouths like Rush Limbaugh and Glenn Beck, it’s not a strategy normally employed by most consumer based businesses.

In a piece I wrote a couple of weeks ago I speculated that Wells Fargo had closed the bank accounts of ML-Implode’s Aaron Krowne out of retribution for Martin Andelman’s articles about Wells Fargo’s egregious and reprehensible track record in respect to homeowners and foreclosures. It’s important to note that Andelman blogs independently, is not paid by ML-Implode, and ML-Implode does not dictate or control what he writes. His blog, however, is hosted on ML-Implode. In essence, it would be like closing Arianna Huffington’s bank account because of something I wrote on Huffington Post.

Wells Fargo took particular offense, asserting that the headline was factually incorrect, but claimed that for privacy reasons they cannot disclose publicly the specifics behind the decision to close accounts. They asked that the title of the article be changed to not use the word “retaliation” and that somehow the original headline, “Wells Fargo Freezes Account in Retaliation,” was inaccurate since one of the articles mentioned, “Husband’s Suicide Yesterday, Wells Fargo to Evict Wife Tomorrow Anyway,” by Martin Andelman was written after they had made the decision to close the account. Andelman’s article was written on May 14 and Wells Fargo made the decision to close Krowne’s account on May 11.





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