PROOF OF STANDING REQUIRED: SEFFAR v. RESIDENTIAL CREDIT SOLUTIONS INC

It is NOT enough to ALLEGE standing. They must PROVE it. Judges across the country are making mistakes with this simple concept. Standing to SUE is presumed if you allege (in words or by incorporation of exhibits) that you have it. Possession of the “original note” can be alleged but at trial the foreclosing party must PROVE (not argue) that (1) they have the original note and (2) they have the right to enforce it either because they own it or because they have been authorized by a person who owns it or a person who has the right to enforce it. 

Get a consult! 202-838-6345
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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In the end we are closing in on the unthinkable: that anyone who was entitled to be treated as creditor was severed from the transactions leaving all other parties floating and leaving legal analysts to wonder (the borrower, that is) or make fraudulent representations (the banks and servicers) that the putative creditors cannot refute.
In the end, with very few exceptions, none of the trusts own anything and none of the servicers or trustees have any authority over any loans. This is the direct result of asymmetry of knowledge. The investors, the borrowers and the closing agents and even the sales agents do not have sufficient information to know what is going on — forcing everyone to look to the “Bank” who appears to be the source of funding.
And the Banks get to explain it in whatever way benefits them the most. They are thus permitted to explain away any hint that they were stealing investor money on an unprecedented scale. That is what happened in the TARP bailout and that is what happens in court.
Here is a 4th DCA case in Florida that spells out the difference between alleging a case and proving it.

SEFFAR v. RESIDENTIAL CREDIT SOLUTIONS INC

Taoufiq SEFFAR, Appellant, v. RESIDENTIAL CREDIT SOLUTIONS, INC., Appellee.

No. 4D13–3514.

    Decided: March 25, 2015

David H. Charlip of Charlip Law Group, LC, Aventura, for appellant. Raymond Hora of McCalla Raymer, LLC, Orlando, for appellee.

Appellant challenges a final judgment of foreclosure, claiming that the court erred in denying his motion for involuntary dismissal. He claimed that appellee did not prove standing to foreclose at the time suit was filed. We agree that the evidence is insufficient to show the plaintiff had standing and reverse. (e.s.)

Appellant executed a note and mortgage to ABN Amro Mortgage Group [EDITOR’S NOTE: SEARCH ABN AMRO ON THIS BLOG]. (“ABN”) in 2006. In 2009, appellant received a letter from CitiMortgage informing him that the servicing of his note and mortgage was being transferred from CitiMortgage to Residential Credit Solutions (“RCS”). RCS also sent a letter informing appellant of the transfer of the servicing of the loan. When he defaulted on the mortgage, RCS sent him a notice of default and subsequently filed suit, alleging that it had the right to enforce the note and mortgage. [EDITOR’S NOTE: HOMEOWNER DID NOT DEFAULT ON ANY OBLIGATION DUE RCS]

Attached to the complaint was the mortgage and note to ABN. The note was stamped “original” and did not contain any endorsements or allonges. Also attached was an assignment of the mortgage from the Federal Deposit Insurance Corporation (“FDIC”), as receiver for Franklin Bank, to Mortgage Electronic Registrations Systems (“MERS”), as nominee for RCS. [EDITOR’S NOTE: THE PRESENCE OF EITHER FRANKLIN OR MERS TELLS US THAT THE SUBJECT LOAN IS SUBJECT TO FALSE CLAIMS OF SECURITIZATION WHERE THE SOURCE OF FUNDS HAS BEEN CUT OFF FROM ITS INVESTMENT DESTROYING ITS STATUS AS A CREDITOR]

About nine months after filing the complaint, RCS filed what it claimed was the “original” note. Filed with this note was an undated, blank allonge, payable to the bearer, allegedly executed by a vice president of ABN. Nothing about the appearance of this allonge, as contained in the appellate record, shows that it was affixed to the note with which it was filed. (e.s.) [EDITOR’S NOTE: NO PROOF THE “ALLONGE” WAS ATTACHED? THEN THE ALLONGE IS  A NULLITY. NO PRESUMPTION APPLIES].

Just two weeks before the foreclosure trial, RCS moved to substitute Bayview Loan Servicing as the plaintiff, alleging it had transferred servicing of the loan to Bayview. The documents attached to the motion do not mention that the ownership of the loan or mortgage was also transferred. The trial court allowed the substitution over appellant’s objection. (e.s.)

At trial, a litigation manager for Bayview testified. He was not a records custodian for RCS or for Bayview. He was not familiar with the computer systems that either of the prior servicers, CitiMortgage and RCS, used for compiling information on the loan or how it was inputted into the systems. He had no information as to whether the information on the loans was inputted into the prior servicers’ systems correctly. He could not testify to the truth or accuracy of RCS’s records, just that they were provided to Bayview. (e.s. [EDITOR’S NOTE: THESE ARE ELEMENTS OF PROOF THAT ARE ABSENT FROM THE TESTIMONY OF NEARLY EVERY ROBO-WITNESS]

He testified that Bayview was the servicer and holder of the note. He believed that Bayview had acquired the note through a purchase agreement with RCS, but he had not seen the agreement, nor did he have a copy of it. His belief that Bayview was the owner of the note under the purchase agreement was based on “a screen shot of our capital assets systems, which has information in regards to the status of the loan with us.” This screen shot was not produced at trial.

[Editor’s NOTE: Recent case decisions state that screen shots are hearsay and do not fall within any exceptions to the hearsay rule and are therefore barred from being admitted into evidence. The most important point to take away from this is that the witness nearly always knows absolutely nothing other than the script that he was required to memorize. Getting to that is actually fairly easy if you know how to do cross examination.]

 

As to the allonge with the blank endorsement from ABN, he did not know when it was executed or whether the signature on it was a “wet ink” signature or a stamp. He did not know whether the allonge was affixed to the note prior to it being filed in the court file. He did not know if the vice president who signed the allonge on ABN’s behalf was in the employ of ABN in November 2009, when Bayview’s records showed that servicing of the loan had been transferred from ABN to Franklin Bank. (e.s.)

The manager agreed that on January 29, 2010, when RCS mailed appellant a notice of intent to take legal action on the note and mortgage, RCS was not the owner and holder of the note by way of the September 30, 2009 assignment of mortgage, but testified, “[t]here may have been a purchase agreement or some other document.” He testified that, on that date, “I only know that RCS was servicing. I don’t know for a fact who was the holder of the note at the time.” While he did testify that RCS owned the note and mortgage on the date the complaint was filed, he then inconsistently stated that RCS had brought the suit as the servicer of the loan, not its owner. (e.s.)

Although appellant moved for involuntary dismissal on the ground that Bayview had not proved standing because it had not shown that it had the right to enforce the note and foreclose the mortgage, the trial court rejected this claim. It entered a final judgment of foreclosure in which it found that Bayview was due and owing the unpaid balance of the note. This appeal follows.

Appellant argues that Bayview failed to prove that it was the owner or holder of the note and that it had the right to foreclose. Based upon this confusing record, we agree that it presented no competent evidence that RCS was the holder of the note at the time it filed suit or that it was a nonholder in possession and entitled to enforce the note. Therefore, Bayview failed to prove standing.

Standing of the plaintiff to foreclose on a mortgage must be established at the time the plaintiff files suit. See McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So.3d 170, 173 (Fla. 4th DCA 2012). McLean set forth the requirements that a plaintiff may prove standing in a mortgage foreclosure:

Standing may be established by either an assignment or an equitable transfer of the mortgage prior to the filing of the complaint ․ For example, standing may be established from a plaintiff’s status as the note holder, regardless of any recorded assignments․

If the note does not name the plaintiff as the payee, the note must bear a special endorsement in favor of the plaintiff or a blank endorsement․ Alternatively, the plaintiff may submit evidence of an assignment from the payee to the plaintiff ․

Even in the absence of a valid written assignment, the mere delivery of a note and mortgage, with intention to pass the title, upon a proper consideration, will vest the equitable interest in the person to whom it is so delivered.

Id. at 173 (citations and quotation marks omitted).

Appellant notes several deficiencies in Bayview’s proof which result in a failure to show standing to foreclose the mortgage. First, while the note and mortgage were originally held by ABN, the only assignment of mortgage attached to the complaint and introduced at trial was one from FDIC as receiver for Franklin Bank to MERS as nominee for RCS. There is no proof of any transfer of the note or mortgage from ABN to Franklin Bank. Second, while Bayview contends that the undated allonge supplies the connection, as it shows a transfer payable to bearer, there was no proof that the allonge was attached to the note, and Bayview presented no proof of when it was executed. (e.s.) [EDITOR’S NOTE: THE ENDORSEMENT MEANS NOTHING IF IT WASN’T ON THE NOTE. IT WASN’T ON THE NOTE UNLESS THE ALLONGE WAS AFFIXED TO THE NOTE. THE ENDORSEMENT MEANS NOTHING WITHOUT FOUNDATION TESTIMONY PROVING THAT THE ENDORSER HAD THE AUTHORITY TO EXECUTE THE ENDORSEMENT] Finally, there was no competent evidence of what rights Bayview acquired from RCS.

We recently addressed how a plaintiff may show it is entitled to foreclose on a promissory note in Murray v. HSBC Bank, 40 Fla. L. Weekly D239 (Fla. 4th DCA Jan. 21, 2015):

“Because a promissory note is a negotiable instrument and because a mortgage provides the security for the repayment of the note, the person having standing to foreclose a note secured by a mortgage may be ․ a nonholder in possession of the note who has the rights of a holder.” Mazine v. M & I Bank, 67 So.3d 1129, 1130 (Fla. 1st DCA 2011).

A “person entitled to enforce” an instrument is: “(1) [t]he holder of the instrument; (2)[a] nonholder in possession of the instrument who has the rights of a holder; or (3)[a] person not in possession of the instrument who is entitled to enforce the instrument pursuant to s[ection] 673.3091 or s[ection] 673.4181(4).” § 673.3011, Fla. Stat. (2013). A “holder” is defined as “[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.” § 671.201(21)(a), Fla. Stat. (2013). Thus, to be a holder, the instrument must be payable to the person in possession or indorsed in blank. See § 671.201(5), Fla. Stat. (2013).

Although, nine months after filing the complaint, RCS filed what purported to be the original note with an allonge payable to bearer, it was undated and there is no proof it was affixed to the promissory note. “An allonge is a piece of paper annexed to a negotiable instrument or promissory note, on which to write endorsements for which there is no room on the instrument itself. Such must be so firmly affixed thereto as to become a part thereof.” See Booker v. Sarasota, Inc., 707 So.2d 886, 887 n. 1 (Fla. 1st DCA 1998) (quoting Black’s Law Dictionary 76 (6th ed.1990)); see also Isaac v. Deutsche Bank Nat’l Trust Co., 74 So.3d 495, 496 n. 1 (Fla. 4th DCA 2011). The litigation manager did not know when the allonge was executed, or whether it was affixed to the note prior to filing. No evidence was presented that the allonge was executed and attached to the note prior to the filing of the initial complaint. Indeed, RCS did not allege in the complaint that it owned and held the mortgage. It merely alleged that it had the right to foreclose the note and mortgage. Therefore, the allonge provided no evidence that RCS was a “holder” at the time it filed the complaint.

Alternatively, Bayview argues that RCS was a nonholder in possession. However, Murray shows the fallacy of that claim. In Murray, we held that the lender, HSBC, had not proved standing where it had alleged that it was a nonholder in possession of the note and mortgage, because it did not prove that each prior transfer of the note conferred the right to enforce it: (e.s.)

HSBC was thus left to enforce the note under section 673.3011(2) as a nonholder in possession of the instrument with the rights of a holder. The issue then is whether HSBC is a nonholder in possession with the rights of a holder.

Anderson v. Burson, 424 Md. 232, 35 A.3d 452 (2011), is instructive. There, the court held that the plaintiff was a nonholder in possession and analyzed whether it had rights of enforcement pursuant to a Maryland statute that employs the same language as section 673.3011, Florida Statutes. Anderson, 35 A.3d at 462. “A transfer vests in the transferee only the rights enjoyed by the transferor, which may include the right to enforce [ment],” through the “shelter rule.” Id. at 461–62.

A nonholder in possession, however, cannot rely on possession of the instrument alone as a basis to enforce it․ The transferee does not enjoy the statutorily provided assumption of the right to enforce the instrument that accompanies a negotiated instrument, and so the transferee “must account for possession of the unendorsed instrument by proving the transaction through which the transferee acquired it.” (e.s.) [EDITOR’S NOTE: NO PRESUMPTIONS AND THEREFORE NO CASE FOR ENFORCEMENT IF NO TRANSACTION PROVEN. THE TRANSACTION IS NOT PRESUMED] Com. Law § 3–203 cmt. 2. If there are multiple prior transfers, the transferee must prove each prior transfer. Once the transferee establishes a successful transfer from a holder, he or she acquires the enforcement rights of that holder. See Com. Law § 3–203 cmt. 2. A transferee’s rights, however, can be no greater than his or her transferor’s because those rights are “purely derivative.” (e.s.)

Murray, 40 Fla. L. Weekly D239 (emphasis in original) (internal citations omitted). Because HSBC did not offer evidence of one of the prior transfers of the note, we held it did not prove that it was a nonholder in possession.

Similarly, in this case, Bayview did not prove that either RCS or itself was a nonholder in possession. It never connected FDIC as receiver of Franklin Bank, from which RCS acquired an assignment of mortgage, to ABN, the original note holder.

As alternative proof of its “ownership” of the note and mortgage, Bayview relied on a letter from RCS to the appellant, notifying him of the transfer of servicing rights to RCS, and a similar one from Bayview when it became the servicer of the loan. Neither letter addressed a right to enforce the note. None of the servicer agreements were placed in evidence to prove what rights either RCS or Bayview acquired under those agreements. (e.s.) [EDITOR’S NOTE: It is very rare that the servicer agreements are proffered by “Plaintiff” Trust (or other sham nominee) in evidence because those agreements, like Assignment and Assumption Agreements contain information that the securitization players don’t want the borrower, the court or government regulators or enforcers to see].Finally, as to the transfer between RCS and Bayview, the litigation manager testified that while he believed that Bayview purchased the note and mortgage from RCS, he had never seen a purchase agreement, and no document memorializing the purchase was entered into evidence. Therefore, because there is a gap in the transfer of the note and mortgage, Bayview did not prove that RCS, and subsequently Bayview, were nonholders in possession. See Murray, 40 Fla. L. Weekly D239. 

Simply stated, the evidence presented was woefully inadequate to prove standing to foreclose. It was quite apparent from the record that Bayview’s litigation manager did not have the requisite knowledge, nor did he produce documentary evidence, to support the claim.

We thus reverse and direct judgment in favor of the appellant dismissing the foreclosure on the mortgage for failure of the appellee to prove its standing.

Reversed and remanded.

WARNER, J.

CIKLIN and GERBER, JJ., concur.

MERS Ownership Intentionally Obfuscated

By The LendingLies Team

In an ongoing California Appeal (that will go unnamed at this time), a homeowner’s attorney obtained a routine MERS corporate disclosure statement in response to an opening appellate brief he had filed.  The attorney shared the disclosure statement with a colleague in Hawaii who noticed that MERS claimed it was owned by its holding company who was owned by Maroon Holding, an LLC.  Further research revealed that Maroon was more than 10% owned by “Intercontinental Exchange, Inc.” (“ICE”).  Additional digging revealed that ICE was listed as the parent corporation for the New York Stock Exchange.  At that point red flags were raised.

The attorney, flabbergasted, after years of trying to peel the layers off of the proverbial MERS onion, discovered that ICE purchased the New York Stock Exchange (“NYSE”) for around 8 billion dollars, and it is now worth over 11 billion dollars (huge profits fueled by trillions of dollars of foreclosures and the unrecognized devaluation of the dollar) (http://finance.yahoo.com/news/ice-closes-11b-acquisition-nyse-135835485.html) The attorney discovered that ICE also claims to have purchased MERS (so Maroon could not own MERS if ICE does) and when looking into ICE, it is traded (oddly being the NYSE) on NASDAQ.

NASDAQ lists 51 pages of stock ownership in ICE which includes virtually everyone and anyone involved in the financial fraud and corruption scheme.  The pirates include Black Rock who fabricates the forged documents, to Bank of America, N.A., Bank of New York Mellon Corporation; as well as Rothchilds, Rockefellers, Goldman Sachs, T Rowe Price (largest investor), Wells Fargo, Citi, etc…  The list of participants goes on and on with billions of dollars and half a billion shares outstanding.  Not to mention that the government sponsored GSEs Fannie Mae and Freddie Mac are owners as well.

The risk is evenly distributed among the Too Big To Fail institutions with no party owning more than 10% ownership in shares requiring disclosure (of course).  ICE’s ownership, like MERS, is buried in Delaware corporations with 3 different entities claiming the exact same name.  This shell game of mergers and name changes makes it nearly impossible to identify who actually owns anything since no court in the country will enforce discovery or any subpoena on them since each county/pension is invested themselves.

For additional information check out these links:

http://ir.theice.com/press/press-releases/all-categories/2016/06-17-2016-133008963

http://www.nasdaq.com/symbol/ice/institutional-holdings

The bank’s attorneys are also playing the obfuscation game by failing to identify who retained them.

This same attorney reports that he has attempted to sanction opposing counsel for claiming to represent parties that (1) do not exist and/or; (2) were not sued.  In this instance, the lead defendant bounced between two firms, and claimed to represent a party that does not exist.  Nine months into litigation the lender finally admitted they represented the wrong party and then claimed to represent the lender the homeowner first sued instead of who they claimed to currently represent.  The lenders use a game of changing entities, names, servicers and trusts to detract from the real issues while creating such a convoluted mess that plausible deniability can be implied at all junctions.  Outside of foreclosure, no Plaintiff in any other type of litigation would be permitted to act in this manner without being sanctioned.

In this particular case, three different law firms have now made misleading statements and the court takes any lie they spin as fact.  False representations of legal representations for trustees who don’t know or don’t care whether their name is used as Plaintiff or beneficiary are now the norm. Yet, there is no clear procedural method of challenging whether the law firm represents the servicer v REMIC trustee. In a  Florida US bank case,  the Plaintiff’s lawyer admitted to having zero contact with US bank and the attorney could not state that US bank retained him.  It is all but impossible to identify who is truly pulling the strings and violates a consumer’s right to know who their creditor is.

The attorney who brought this situation to our attention writes, “Defendants and their counsel are attempting to obfuscate any ability to identify any actual owner, holder or holder-in-due-course of the purported debt, if such ever existed, its extinguishment notwithstanding.”    When the homeowner, their attorney, the bank, opposing counsel and the judge can’t identify who the true creditor and imposters are, this leads to issues of:

  1. Slander and Disparagement of the Title to Plaintiff’s Property
  2. Lender’s Acts are not Privileged and are without Justification
  3. False Claims
  4. Pecuniary Losses
  5. Fraud
  6. Fraud on the Court
  7. Racketeering
  8. FDCPA and FDCPA violations
  9. Claims are barred for Making False, Deceptive and Misleading Representations
  10. Unconscionable Allegations by Plaintiff
  11. Plaintiff had no Standing to bring Lawsuit

These are issues causing real damages and yet, the Judge in this case will likely ignore the blatant fraud, the use of pseudo-parties and the unconscionable consequences caused by a party with no standing to be in the courtroom.  If you’re a bank you are not required to be honest or have any credible evidence of ownership.  The presentation of fabricated and forged documents, shell companies, and a false affidavit is usually sufficient to foreclose.

Neil Garfield will provide more information on the MERS ownership issue in the next several weeks. Stay up to date at LivingLies.

MERS/GMAC Note and Mortgage Discharged

If only all courts would entertain the possibility that everything presented to them should be the subject of intense scrutiny, 90%+ of all foreclosures would have been eliminated. Imagine what the country would look like today if the mortgages and fraudulent foreclosures failed.

The Banks say that if the mortgages failed they all would go bust and that there is nothing to backstop the financial system. The rest of us say that illegal mortgage lending and foreclosures was too high a price to pay for a dubious theory of national security.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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I received the email quoted below from David Belanger who, like many others has proven beyond any reasonable doubt that persistence pays off. (BOLD IS EMPHASIS SUPPLIED BY EDITOR)

Besides the obvious the big takeaway for me was what I have been advocating since 2007 — if any company in in the alleged chain of “creditors” has gone out of business, there probably is a bankruptcy involved or an FDIC receivership. Those records are available for inspection. And what those records will show is that the the bankrupt or insolvent entity did not own the debt that arose when you signed documents for the benefit of parties other than the source of funding. It will also show that the bankrupt or insolvent entity did not own the note or mortgage either.

This is instructional for virtually all parties “involved” in a foreclosure but particularly clear in the cases of OneWest, whose entire business plan depended upon fraudulent foreclosures, and Chase Bank who bet heavily on getting away with it and they have, so far. BUT looking at the bankruptcy and receivership filings of IndyMac and WAMU respectively the nature of the fraud was obvious and born out of pure arrogance and apparently a correct perception of invincibility.

All such bankruptcy proceedings and receivership require schedules of assets right down to the last nickle in bankruptcy. Belanger simply looked at the schedule, knowing he never took the loan, and found without surprise that the bankrupt entity never claimed ownership of the debt, note or mortgage.

The big message here though is not just for those who are being pursued in collection for loans they never asked for nor received. The message here is to look at those schedules to see if your debt, note or mortgage is listed. Lying on those forms is a federal felony punishable by jail. Those forms are the closest you are ever going to get to the truth. Odds are your loan is nowhere to be found — even if you did get a loan.

And the second takeaway is the nonexistence of the “trust.” In most cases it never existed. Your “REMIC Trust” was almost certainly formed under the laws of the State of New York or Delaware that permit common law trusts (i.e., trusts that don’t need to be registered with the state in order to exist). BUT uniform trust laws adopted in virtually all states require for the trust to be considered a “person” it needs to have these elements — (1) trustor (2) trustee (3) trust instrument (PSA) and (4) a “thing” (res in Latin) that is committed to the trust by someone who owns the thing. It is the last element that is wholly absent from nearly all REMIC “Trusts.”

And now, David Belanger’s email:

JUST WANTED TO TELL YOU ALL SOMETHING,  THAT I JUST GOT DONE , FROM MERSCORP!  ON OUR PROPERTY THERE WAS A 2d MORTGAGE ON IT, IT WAS A LINE OF CREDIT THAT WE DID NOT DO, AND WE DID REPORT IT TO THE RIGHT AUTHORITY’S, BACK IN 2006/2007. NOW THE COMPANY WAS GMAC MORTGAGE CORP.

OVER THE YRS, FROM 2006 TILL NOW, IT REMAINED ON PROPERTY, UNTIL JUST LAST WEEK, WHEN I DEMANDED THAT MERS DISCHARGE IT.  AND AFTER THEY FOUND OUT IT WAS NEVER ASSIGNED OUT OF MERS, THEY HAD TO DISCHARGE IT. BECAUSE GMAC MORTGAGE IS DEAD.  NOW THIS GO TO WHAT WE ALL HAVE SAID HERE.

ANY ASSIGNMENT THAT HAS NOT BEEN DONE, OR RECORDED AT REGISTRY OF DEEDS, OUT OF MERS, AND THE MORTGAGE COMPANY IS A DEAD MORTGAGE COMPANY. THEN MERS WILL DISCHARGE IT . I HAVE A COPY OF THE DISCHARGE IN HAND.

AM STILL FIGHTING, BECAUSE OF THIS NEWS,  I HAVE ASK MY ATTORNEY TO NO AVAIL TO DO A QWR ON THE COMPANY THAT RECORDED AN ASSIGNMENT IN 2012, EVEN THOUGH GMAC MORTGAGE CORP WAS IN BK AND AFTER GOING THROUGH ALL BK RECORDS OF EACH ENTITY, THAT HAD TO FILE ALL ASSET OF THERE COMPANY, AND FOUND THAT NO ONE IN GMAC HAD THE MORTGAGE AND NOTE, 3 MONTHS PRIOR TO THE ASSIGNMENT BEING PUT ON MY RECORD.
https://www.kccllc.net/rescap/document/1212020120703000000000033

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW …
http://www.kccllc.net
Southern District of New York, New York In re: GMAC Mortgage, LLC UNITED STATES BANKRUPTCY COURT Case No. 12-12032 (MG) B6 Summary (Official Form 6 – Summary) (12/07)

THIS IS AGAIN THE REASON, THIS FRAUD TRUST  DOES NOT EXIST, AND I DO HAVE ALL SECRETARY OF STATES, INCLUDING ALL STATING THAT  THIS FRAUD TRUST IN FACT HAS NEVER
BEEN REGISTERED IN ANY STATE. LET ALONG THE STATE OF DELAWARE, THE STATE THEY SAY IT IS REGISTERED IN.  THE SECRETARY OF STATE SAID NO. AND HAS NEVER BEEN A LEGAL OPERATING TRUST, EVER. SIGNED AND NOTARIZED BY THE SECRETARY. THE FRAUD TRUST NAME IS AS FOLLOWS.
GMACM MORTGAGE LOAN TRUST 2006-J1,

FREE HOUSE?

Judges may be biased in favor of “national security” (i.e., protecting the banks), but they have a surprisingly low threshold of tolerance when they are confronted by the bank’s argument that they don’t have to accept the money and that it is the bank’s option as to whether to accept the money or proceed with the foreclosure. To my knowledge that argument has lost 100% of the time. And THAT means the homeowner was able to get the proverbial free house or otherwise settle under seal of confidentiality (which might include the “free house.”)

all too often the Golden Rule of Mortgage Foreclosure is simply ignored and the foreclosure goes ahead as if the rule were not the statutory law of every jurisdiction in the United States — Douglas Whaley

Listen to the Last Neil Garfield Show at http://tobtr.com/s/9673161

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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The article below demonstrates (with edits from me) just how “hairy” these issues get. Things that laymen presume to be axiomatic don’t even exist in the legal world. I just sent my son a mug that says “Don’t confuse your Google search with my medical degree.” The same could be said for law. You might have discovered something that appears right to you but only a lawyer with actual experience can tell you if it will fly — remember that the bumblebee, according to the known laws of aerodynamics — is incapable of flying. Yet it flies seemingly unconcerned about our laws of aerodynamics. Similar to the lack of concern judges have, as if they were bumblebees, for the laws of contract and negotiation of instruments.

“Be careful what you wish for.” We must not give the banks a condition that they can satisfy with a fake. If the statute says that they must come up with the original promissory note, or the encumbrance is automatically lifted by a Clerk’s signature, then that means that (a) the debt still exists (b) the note could still be enforced with a lost note affidavit (which lies about the origination of the “loan” and subsequent nonexistent transactions), and (c) the debt can still be enforced.

A suit on the note or the debt that is successful will yield a Final Judgment, which in turn can be recorded in the county records. A further action for execution against the property owner will cause execution to issue — namely the judgment becomes a judgment lien that can now be foreclosed with no note whatsoever. The elements of a judgment lien foreclosure are basically (I have the Judgment, the statute says I can record it and foreclose on it).

There are homestead exemptions in many states. Whereas Florida provides a total homestead exemption except in bankruptcy court (up to $125,000 value), Georgia provides very little protection to the property owner which means that Georgia property owners are vulnerable to losing their homes if they don’t pay a debt that has been reduced to a Final Judgment and filed as a Judgment lien.

So the upshot is this: if you ask for the original note they might simply change their routines so that they produce the fabricated original earlier rather than later. Proving that it is a fake is not easy to do, but it can be done. The problem is that even if you prove the note is fabricated, the debt still remains. And in the current climate that means that any “credible” entity can step into the void created by the Wall Street banks and claim ownership of the debt for the purpose of the lawsuit.

What you want to do and in my opinion what you must do is focus on the identity of the creditor in addition to the the demand for the “original” note. When you couple that with tender of the amount demanded (under any one of the scenarios we use in our AMGAR programs) on the industry practice of demanding the identity of the creditor before anyone receives payment, then you really have something going.

But the risk element for tender MUST be present or it will likely be brushed aside who sees it as merely a gimmick — using the state law regarding tender as an offensive tool to get rid of the encumbrance and thus prevent foreclosure.

*

So the commitment is to pay off or refinance the alleged debt conforming to the industry standard of giving estoppel information — with the name of the creditor, where the payment should be sent, and the amount demanded by the creditor, and per diem, escrow and other information.

*

The inability and unwillingness of anyone to name a creditor has been credited with eliminating both the foreclosure and the mortgages in several dozen cases.

*

Judges may be biased in favor of “national security” (i.e., protecting the banks), but they have a surprisingly low threshold of tolerance when they are confronted by the bank’s argument that they don’t have to accept the money and that it is the banks option as to whether to accept the money or proceed with the foreclosure. To my knowledge that argument has lost 100% of the time. And THAT means the homeowner was able to get the proverbial free house or otherwise settle under seal of confidentiality (which might include the “free house.”)

Here is the UCC article by Douglas Whaley. [Words in brackets are from the Livinglies editor and not from Mr. Whaley]

the Golden Rule of Mortgage Foreclosure: the Uniform Commercial Code forbids foreclosure of the mortgage unless the creditor possesses the properly-negotiated original promissory note. If this can’t be done the foreclosure must
stop.
 *
all too often the Golden Rule of Mortgage Foreclosure is simply ignored and the foreclosure goes ahead as if the rule were not the statutory law of every jurisdiction in the United States.1
 *
Why is that? The answer is almost too sad to explain. The problem is that the Uniform Commercial Code is generally unpopular in general, and particularly when it comes to the law of negotiable instruments (checks and promissory notes) contained in Article Three of the Code. Most lawyers were not trained in this law when in law school (The course on the subject, whether called “Commercial Paper” or “Payment Law,” is frequently dubbed a “real snoozer” and skipped in favor or more exotic subjects), and so the only exposure to the topic attorneys have occurs, if at all, in bar prep studies (where coverage is spotty at best). Thus many foreclosures occur without it occurring to anyone that the UCC has any bearing on the issue.
 *
If the defendant’s attorney announces that the Uniform Commercial Code requires the production of the original promissory note, the judge may react by saying something like, “You mean to tell me that some technicality of negotiable instruments law lets someone who’s failed to pay the mortgage get away with it if the promissory note can’t be found, and that I have to slow down my overly crowded docket in the hundreds of foreclosure cases I’ve got pending to hear about this nonsense?” It’s a wonder the judge doesn’t add, “If you say one more word about Article Three of the UCC you’ll be in contempt of court!”
 *
The debt is created by the signing of a promissory note (which is governed by Article Three of the Uniform Commercial Code); the home owner will be the maker/issuer of the promissory note and the lending institution will be payee on the note. There is a common law maxim that “security follows the debt.” This means that it is presumed that whoever is the current holder of the promissory note (the “debt”) is entitled to enforce the mortgage lien (the “security”). The mortgage is reified as a mortgage deed which the lender should file in the local real property records so that the mortgage properly binds the property not only against the mortgagor but also the rest of the world (this process is called “perfection” of the lien).1
 *
{EDITOR’S NOTE: Technically the author is correct when he states that a debt is created by the signing of a promissory note governed by Article 3 of the Uniform Commercial Code. But it is also true that the note is merely a written instrument that memorializes the “loan contract” and which in and unto itself constitutes evidence of the debt.
 *
This means that some sort of transaction with a monetary value to both sides must have taken place between the two parties on the note — the maker (borrower) and the payee (the lender). If no such transaction has in fact occurred then, ordinarily the note is worthless and unenforceable. But in the event that a third party purchases the note for value in good faith and without knowledge of the borrowers defenses, the note essentially and irrevocably becomes the debt and not merely an evidence of the debt. In that case the note is treated as the debt itself for all practical purposes.
 *
Such a purchaser would be entitled to the exalted status of holder in due course. Yet if the borrower raises defenses that equate to an assertion that the note should be treated as void because there was no debt (the maker didn’t sign it or the maker signed it under false pretenses — i.e. fraud in the execution) then in most cases the HDC status won’t prevail over the real facts of the case..The corollary is that if there was no debt there must have been no loan.
 *
This would be fraud in the inducement which moves the case into a gray area where public policy is to protect the innocent third party buyer of the note. All other defenses raised by borrowers are affirmative defenses (violations of lending statutes, for example) raising additional issues that were not presented nor implied in the complaint  enforce the note or the nonjudicial procedure in which the note is being enforced by nonjudicial foreclosure.}
 *
The bankers all knew the importance of the mortgage, and supposedly kept records as to the identity of the entities to whom the mortgage was assigned. But they were damn careless about the promissory notes, some of which were properly transferred whenever the mortgage was, some of which were kept at the originating bank, some of which were deliberately destroyed (a really stupid thing to do), and some of which disappeared into the black hole of the financial collapse, never to be seen again.
 *
Filing fees in real property record offices average $35 every time a new document is filed. The solution was the creation of a straw-man holding company called Mortgage Electronic Registration Systems [MERS]. MERS makes no loans, collects no payments, though it does sometimes foreclose on properties (through local counsel). Instead it is simply a record-keeper that allows its name to be used as the assignee of the mortgage deed from the original lender, so that MERS holds the lien interest on the real property. While MERS has legal title to the property [EDITOR’S NOTE: this assertion of title is now back in a grey area as MERS does not fulfill the definition of a beneficiary under a deed of trust nor a mortgagor under a mortgage deed.], it does not pretend to have an equitable interest. At its headquarters in Reston, Va., MERS (where it has only 50 full time employees, but deputizes thousands of temporary local agents whenever needed) supposedly keeps track of who is the true current assignee of the mortgage as the securitization process moves the ownership from one entity to another.3
 *
Meanwhile the homeowner, who has never heard of MERS, is making payment to the [self proclaimed] mortgage servicer (who forwards them to whomever MERS says is the current assignee of the mortgage) [or as is more likely, forwards the proceeds of payments to the underwriter who sold bogus mortgage bonds, on which every few months another bank takes the hit on a multibillion dollar fine]..

Article 3 of the Uniform Commercial Code could not be clearer when it comes to the issue of mortgage note foreclosure. When someone signs a promissory note as its maker (“issuer”), he/she automatically incurs the obligation in UCC §3-412 that the instrument will be paid to a “person entitled to enforce” the note.5″Person entitled to enforce”—hereinafter abbreviated to “PETE”—is in turn defined in §3-301:

“Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person

not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d) . . . .

[Editors’ note: the caveat here is that while the execution of a note creates a liability, it does not create a liability for a DEBT. The note creates a statutory liability while the debt creates a liability to repay a loan. Until the modern era of fake securitization, the two were the same and under the merger doctrine the liability for the debt was merged into the execution of the note because the note was payable to the party who loaned the money.

And under the merger doctrine, the debt is NOT merged into the note if the parties are different — i.e., ABC makes the loan but DEF gets the paperwork. Now you have two (2) liabilities — one for the debt that arose when the “borrower” received payment or received the benefits of payments made on his/her behalf and one for the note which is payable to an entirely different party. Thus far, the banks have succeeded in making the circular argument that since they are withholding the information, there is not way for the “borrower” to allege the identity of the creditor and thus no way for the “borrower” to claim that there are two liabilities.]

Three primary entities are involved in this definition that have to do with missing promissory notes: (1) a “holder” of the note, (3) a “non-holder in possession who has the rights of a holder, and (3) someone who recreates a lost note under §3-309.6

A. “Holder”

Essentially a “holder” is someone who possesses a negotiable instrument payable to his/her order or properly negotiated to the later taker by a proper chain of indorsements. This result is reached by the definition of “holder” in §1-201(b)(21):

(21) “Holder” means:

(A) the person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession . . . .

and by §3-203:

(a) “Negotiation” means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.

(b) Except for negotiation by a remitter, if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.

The rules of negotiation follow next.

B. “Negotiation”

A proper negotiation of the note creates “holder” status in the transferee, and makes the transferee a PETE. The two terms complement each other: a “holder” takes through a valid “negotiation,” and a valid “negotiation” leads to “holder” status. How is this done? There are two ways: ablankindorsement or aspecialindorsement by the original payee of the note.

 *
With a blank indorsement (one that doesn’t name a new payee) the payee simply signs its name on the back of the instrument. If an instrument has been thus indorsed by the payee, anyone (and I mean anyone) acquiring the note thereafter is a PETE, and all the arguments explored below will not carry the day. Once a blank indorsement has been placed on the note by the payee, all later parties in possession of the note qualify as “holders,” and therefore are PETEs.7
 *
Only if there is a valid chain of such indorsements has a negotiation taken place, thus creating “holder” status in the current possessor of the note and making that person a PETE. With the exception mentioned next, the indorsements have to be written on the instrument itself (traditionally on the back).
 *
the allonge must be “affixed to the instrument” per §3-204(a)’s last sentence. It is not enough that there is a separate piece of paper which documents the unless that piece of paper is “affixed” to the note.10What does “affixed” mean? The common law required gluing. Would a paper clip do the trick? A staple?11
 *
a contractual agreement by which the payee on the note transfers an interest in the note, but never signs it, cannot qualify as an allonge (it is not affixed to the note), and no proper negotiation of the note has occurred. If the indorsement by the original mortgagee/payee on the note is not written on the note itself, there must be an allonge or the note has not been properly negotiated, and the current holder of that note is not a PETE (since there is no proper negotiation chain). THE LACK OF SIGNATURE BECOMES A SERIOUS ISSUE IN THE CURRENT ERA BECAUSE OF WHAT HAS BEEN DUBBED “ROBO-SIGNING” THE EXACT DEFINITION OF WHICH HAS NOT YET BEEN DETERMINED BUT IT REFERS TO THE STAMPED OR EXECUTED SIGNATURE BY ONE POSSESSES NO KNOWLEDGE OR INTEREST IN THE CONTENTS OF THE INSTRUMENT AND ESPECIALLY WHEN THE PERSON HAS NO EMPLOYMENT OR OTHER LEGALR RELATIONSHIP WITHT EH ENTITY ON WHOSE BEHALF THE INDORSEMENT WAS EXECUTED. As stated in one case the base of robo-signing is that it is a forgery and therefore amounts to no signature at all which means the note has not really be negotiated, all appearances to the contrary. ]
 *
The Code never requires the person making an indorsement to have an ownership interest in the note13 (though of course the payee normally does have such an interest), but simply that he/she is the named payee, and the Code clearly allows for correction of a missing indorsement. [EDITOR’S NOTE: Here is where the enforcement tot he note and the ability to enforce the mortgage diverge, See Article 9. The possessor of a note that is properly signed by a party to whom the note was payable or indorsed commits no offense by executing an indorsemtn in blank (bearer) or to another named indorse. The author is correct when he states that ownership of the note is not required to enforce the note; but the implication that the right to foreclose a mortgage works the same way is just plain wrong, to wit: foreclosure is ALL about ownership of the mortgage and Article 9 provisions specifically state the ownership means that the purported holder has paid value for it]. 
 *
  1. 13   Thieves can qualify as a “holder” of a negotiable instrument and thereafter validly negotiate same to another; see Official Comment 1 to 3-201, giving an example involving a thief.
  2. 1.  Subsections (a) and (b) are based in part on subsection (1) of the former section 3-202.  A person can become holder of an instrument when the instrument is issued to that person, or the status of holder can arise as the result of an event that occurs after issuance.  “Negotiation” is the term used in article 3 to describe this post-issuance event.  Normally, negotiation occurs as the result of a voluntary transfer of possession of an instrument by a holder to another person who becomes the holder as a result of the transfer. Negotiation always requires a change in possession of the instrument because nobody can be a holder without possessing the instrument, either directly or  through an agent.  But in some cases the transfer of possession is involuntary and in some cases the person transferring possession is not a holder.  In defining “negotiation” former section 3-202(1) used the word “transfer,” an undefined term, and “delivery,” defined in section 1-201(14) to mean voluntary change of possession. Instead, subsections (a) and (b) used the term “transfer of possession” and subsection (a) states that negotiation can occur by an involuntary transfer of possession.  For example, if an instrument is payable to bearer and it is stolen by Thief or is found by Finder, Thief or Finder becomes the holder of the instrument when possession is obtained.  In this case there is an involuntary transfer of possession that results in negotiation to Thief or Finder. 
  3. [EDITOR’S NOTE: The heading for UCC 3-201 indicates it relates to “negotiation” of a note, not necessarily enforcement. The thief might be able to negotiate the note but enforcement can only be by a party with rights to enforce it. While a holder is presumed to have that right, it is a rebuttable presumption. Hence either a borrower or the party from whom the note was stolen can defeat the thief in court. But if the negotiation of the note includes payment of value in good faith without knowledge of the borrower’s defenses or complicity in the theft, then the successor to the thief is a holder in due course allowing enforcement against the maker. The borrower or victim of theft is then left with actions at law against the thief.]
 

New “Original Notes” from Visionet Systems: How False Original Signatures Are Created

reapplying the “signature images” upon stored copies.”

I have obtained confirmation from a large bank vendor (Visionet Systems, Inc.) that it rectifies “lost notes” by reapplying the “signature images” upon stored copies. —- Bill Paatalo, December 10, 2016

Kudos to Bill Paatalo who has quantified and identified what I have been talking about for years — the production of “original” notes that were previously destroyed. The sarcasm from the bench has dripped ridicule on anyone even suggesting that the “blue ink” signature is merely a reproduction on a fabricated document. The revelations in this article might be a step toward changing that attitude. — Neil Garfield

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-
see

http://bpinvestigativeagency.com/automated-affidavit-verifications-and-lost-note-reproductions-for-bank-vendors-its-standard-business-practice/

This is something that everyone ought to read because it not only reveals the details of how consumers are being screwed by illegal actions taken by the banks, but also shows how we have now institutionalized illegal behavior.

Perhaps most important is the take-away question from this revelation: Why is the fabrication and forging and robosigning documents necessary if these were all bona fide loans? Answer: They were not bona fide loans and the loan documents were fabrications that the borrower was fraudulently induced to sign.

The money given to “borrowers” was not a loan, but it was a liability.  The liability arose because the homeowner received the benefit of the money advanced somewhere near the time of the fictitious closing. But because of the larger scheme of stealing money from pension funds et al, the use of their money at the so-called closing was hidden from BOTH the investors and the “borrowers.” No loan contract was ever formed. Hence the need for repeated fabrications to cover up the illegal behavior and to create the illusion of literally “the greater weight of the evidence.”

In virtually every foreclosure case the money trail (i.e., reality) does not in any way dovetail or reconcile with the false paper trail created by the world’s largest banks.

Excerpts from Bill’s Article:

I have obtained confirmation from a large bank vendor (Visionet Systems, Inc.) that it rectifies “lost notes” by reapplying the “signature images” upon stored copies. 

Astonishingly enough, this is not the only business practice that appears to violate the $25B National Consent Judgment. Visionet advertises that it prepares “OCR Legal Packages” which involves the use of a sophisticated computer software program to create and verify foreclosure affidavits. Apparently, humans are too slow, as Visionet points out, “Servicers routinely lag behind on completing the legal package reviews in a timely manne[r.”]

[For reference, here is a copy of the “Consent Judgement” (CJ) signed on April 11, 2012 (consent_judgment_boa-4-11-12)]

This investigation begins with yet another “surrogate signed” mortgage assignment “Prepared By: Visionet Systems, Inc.,” executed and recorded December 2015 in Collier County Florida (see: collier-county-florida-assignment). The assignment is executed by “Stacy Pierce – Vice President – MERS as nominee for Greenpoint Mortgage Funding, Inc.” Of course, this mortgagee went out of business on August 20, 2007.

I looked up “Stacy Pierce” and found her LinkedIn resume which shows “VP of Operations” for Visionet Systems, Inc. (see: https://www.linkedin.com/in/stacy-pierce-53047162)

I visited Visionet’s website (https://www.visionetsystems.com/about) and found this marketing brochure describing a product called “Visirelease.” (see: visirelease-marketing-brochure) I was curious as to the following language located on page 2:

“A database driven Business Engine enables the users to define complex business conditions. These business conditions are associated with the relevant tasks to ensure verification at completion of each task. A powerful and flexible print engine is implemented for printing of release, assignments and lost notes, with or without signature images.”

The persons signing the eventual automated affidavits are simply relying on the auto-produced document, and do little if any human verification. The prime example is the above assignment on behalf of defunct Greenpoint! Still, if the witness was doing the actual verification, then why the need for OARS? In all the cases I have been involved, having read and heard countless servicer witnesses’ testimony, I have yet to hear any of these bank witnesses divulge that the affidavits relied upon in the proceedings were prepared and “verified” by a third-party automated computer program. How’s that for hearsay?

Here is the laundry list of potential violations to the Consent Judgment. Nowhere do I see room for “automated affidavit verification solutions” by undisclosed third-party vendors such as Visionet Systems, Inc.

[(CJ – A1-A3):

2. Servicer shall ensure that affidavits, sworn statements, and Declarations are based on personal knowledge, which may be based on the affiant’s review of Servicer’s books and records, in accordance with the evidentiary requirements of applicable state or federal law.

3. Servicer shall ensure that affidavits, sworn statements and Declarations executed by Servicer’s affiants are based on the affiant’s review and personal knowledge of the accuracy and completeness of the assertions in the affidavit, sworn statement or Declaration, set out facts that Servicer reasonably believes would be admissible in evidence, and show that the affiant is competent to testify on the matters stated. Affiants shall confirm that they have reviewed competent and reliable evidence to substantiate the borrower’s default and the right to foreclose, including the borrower’s loan status and required loan ownership information. If an affiant relies on a review of business records for the basis of its affidavit, the referenced business record shall be attached if required by applicable state or federal law or court rule. This provision does not apply to affidavits, sworn statements and Declarations signed by counsel based solely on counsel’s personal knowledge (such as affidavits of counsel relating to service of process, extensions of time, or fee petitions) that are not based on a review of Servicer’s books and records. Separate affidavits, sworn statements or Declarations shall be used when one affiant does not have requisite personal knowledge of all required information.

5. Servicer shall review and approve standardized forms of affidavits, standardized forms of sworn statements, and standardized forms of Declarations prepared by or signed by an employee or officer of Servicer, or executed by a third party using a power of attorney on behalf of Servicer, to ensure compliance with applicable law, rules, court procedure, and the terms of this Agreement (“the Agreement”).

6. Affidavits, sworn statements and Declarations shall accurately identify the name of the affiant, the entity of which the affiant is an employee, and the affiant’s title.

7. Servicer shall assess and ensure that it has an adequate number of employees and that employees have reasonable time to prepare, verify, and execute pleadings, POCs, motions for relief from stay (“MRS”), affidavits, sworn statements and Declarations.

10. Servicer shall not pay volume-based or other incentives to employees or third-party providers or trustees that encourage undue haste or lack of due diligence over quality.

11. Affiants shall be individuals, not entities, and affidavits, sworn statements and Declarations shall be signed by hand signature of the affiant (except for permitted electronic filings). For such documents, except for permitted electronic filings, signature stamps and any other means of electronic or mechanical signature are prohibited.

 

Problems with Lehman and Aurora

Lehman had nothing to do with the loan even at the beginning when the loan was funded, it acted as a conduit for investor funds that were being misappropriated, the loan was “sold” or “transferred” to a REMIC Trust, and the assets of Lehman were put into a bankruptcy estate as a matter of law.

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

—————-
I keep receiving the same question from multiple sources about the loans “originated” by Lehman, MERS involvement, and Aurora. Here is my short answer:
 *

Yes it means that technically the mortgage and note went in two different directions. BUT in nearly all courts of law the Judge overlooks this problem despite clear law to the contrary in Florida Statutes adopting the UCC.

The stamped endorsement at closing indicates that the loan was pre-sold to Lehman in an Assignment and Assumption Agreement (AAA)— which is basically a contract that violates public policy. It violates public policy because it withholds the name of the lender — a basic disclosure contained in the Truth in Lending Act in order to make certain that the borrower knows with whom he is expected to do business.

 *
Choice of lender is one of the fundamental requirements of TILA. For the past 20 years virtually everyone in the “lending chain” violated this basic principal of public policy and law. That includes originators, MERS, mortgage brokers, closing agents (to the extent they were actually aware of the switch), Trusts, Trustees, Master Servicers (were in most cases the underwriter of the nonexistent “Trust”) et al.
 *
The AAA also requires withholding the name of the conduit (Lehman). This means it was a table funded loan on steroids. That is ruled as a matter of law to be “predatory per se” by Reg Z.  It allows Lehman, as a conduit, to immediately receive “ownership” of the note and mortgage (or its designated nominee/agent MERS).
 *

Lehman was using funds from investors to fund the loan — a direct violation of (a) what they told investors, who thought their money was going into a trust for management and (b) what they told the court, was that they were the lender. In other words the funding of the loan is the point in time when Lehman converted (stole) the funds of the investors.

Knowing Lehman practices at the time, it is virtually certain that the loan was immediately subject to CLAIMS of securitization. The hidden problem is that the claims from the REMIC Trust were not true. The trust having never been funded, never purchased the loan.

*

The second hidden problem is that the Lehman bankruptcy would have put the loan into the bankruptcy estate. So regardless of whether the loan was already “sold” into the secondary market for securitization or “transferred” to a REMIC trust or it was in fact owned by Lehman after the bankruptcy, there can be no valid document or instrument executed by Lehman after that time (either the date of “closing” or the date of bankruptcy, 2008).

*

The reason is simple — Lehman had nothing to do with the loan even at the beginning when the loan was funded, it acted as a conduit for investor funds that were being misappropriated, the loan was “sold” or “transferred” to a REMIC Trust, and the assets of Lehman were put into a bankruptcy estate as a matter of law.

*

The problems are further compounded by the fact that the “servicer” (Aurora) now claims alternatively that it is either the owner or servicer of the loan or both. Aurora was basically a controlled entity of Lehman.

It is impossible to fund a trust that claims the loan because that “reporting” process was controlled by Lehman and then Aurora.

*

So they could say whatever they wanted to MERS and to the world. At one time there probably was a trust named as owner of the loan but that data has long since been erased unless it can be recovered from the MERS archives.

*

Now we have an emerging further complicating issue. Fannie claims it owns the loan, also a claim that is untrue like all the other claims. Fannie is not a lender. Fannie acts a guarantor or Master trustee of REMIC Trusts. It generally uses the mortgage bonds issued by the REMIC trust to “purchase” the loans. But those bonds were worthless because the Trust never received the proceeds of sale of the mortgage bonds to investors. Thus it had no ability to purchase loan because it had no money, business or other assets.

But in 2008-2009 the government funded the cash purchase of the loans by Fannie and Freddie while the Federal Reserve outright paid cash for the mortgage bonds, which they purchased from the banks.

The problem with that scenario is that the banks did not own the loans and did not own the bonds. Yet the banks were the “sellers.” So my conclusion is that the emergence of Fannie is just one more layer of confusion being added to an already convoluted scheme and the Judge will be looking for a way to “simplify” it thus raising the danger that the Judge will ignore the parts of the chain that are clearly broken.

Bottom Line: it was the investors funds that were used to fund loans — but only part of the investors funds went to loans. The rest went into the pocket of the underwriter (investment bank) as was recorded either as fees or “trading profits” from a trading desk that was performing nonexistent sales to nonexistent trusts of nonexistent loan contracts.

The essential legal problem is this: the investors involuntarily made loans without representation at closing. Hence no loan contract was ever formed to protect them. The parties in between were all acting as though the loan contract existed and reflected the intent of both the borrower and the “lender” investors.

The solution is for investors to fire the intermediaries and create their own and then approach the borrowers who in most cases would be happy to execute a real mortgage and note. This would fix the amount of damages to be recovered from the investment bankers. And it would stop the hemorrhaging of value from what should be (but isn’t) a secured asset. And of course it would end the foreclosure nightmare where those intermediaries are stealing both the debt and the property of others with whom thye have no contract.

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Appeals Court Challenges Cal. Supreme Court Ruling in Yvanova/Keshtgar

The Court, possibly because of the pleadings and briefs refers to the Trust as “US Bank” — a complete misnomer that reveals a completely incorrect premise. Despite the clear allegation of the existence of the Trust — proffered by the Trust itself — the Courts are seeing these cases as “Bank v Homeowner” rather than “Trust v Homeowner.” The record in this case and most other cases clearly shows that such a premise is destructive to the rights of the homeowner and assumes the corollary, to wit: that the “Bank” loaned money or purchased the loan from a party who owned the loan — a narrative that is completely defeated by the Court rulings in this case.

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 B246193A-Kehstgar

It is stunning how lower courts are issuing rulings and decisions that ignore or even defy higher court rulings that give them no choice but to follow the law. These courts are acting ultra vires in open defiance of the senior authority of a higher court. It is happening in rescission cases and it is happening in void assignment cases, like this one.
 *
This case focuses on a void assignment or the absence of an assignment. Keshtgar alleged that “the bank” had no authority to initiate foreclosure because the assignment was void or absent. THAT was the first mistake committed by the California appeals court, to wit: the initiating party was a trust, not a bank. This appeals court completely missed the point when they started out from an incorrect premise. US Bank is only the Trustee of a Trust. And upon further examination the Trust never operated in any fashion, never purchased any loans and never had any books of record because it never did any business.
 *
The absence of an assignment is alleged because the assignment was void, fabricated, backdated and forged purportedly naming the Trust as an assignee means that the Trust neither purchased nor received the alleged loan. Courts continually ignore the obvious consequences of this defect: that the initiator of the foreclosure is claiming rights as a beneficiary when it had no rights as a beneficiary under the deed of trust.
 *
The Court, possibly because of the pleadings and briefs refers to the Trust as “US Bank” — a complete misnomer that reveals a completely incorrect premise. Despite the clear allegation of the existence of the Trust — proffered by the Trust itself — the Courts are seeing these cases as “Bank v Homeowner.” The record in this case and most other cases clearly shows that such a premise is destructive to the rights of the homeowner and assumes the corollary, to wit: that the “Bank” loaned money or purchased the loan from a party who owned the loan — a narrative that is completely defeated by the Courts in this case.
 *
There really appears to be no question that the assignment was void or absent. The inescapable conclusion is that (a) the assignor still retains the rights (whatever they might be) to collect or enforce the alleged “loan documents” or (b) the assignor had no rights to convey. In the context of an admission that the ink on the paper proclaiming itself to be an assignment is “nothing” (void) there is no conclusion, legal or otherwise, but that US Bank had nothing to do with this loan and neither did the Trust.
 *
Bucking the California Supreme Court, this appellate court states that Yvanova has “no bearing on this case.” In essence they are ruling that the Cal. Supreme Court was committing error when it said that Yvanova DID have a bearing on this case when it remanded the case to the lower court of appeal with instructions to reconsider in light of the Yvanova decision.
 *
One mistake committed by Keshtgar was asking for quiet title. The fact that the MORTGAGE is voidable or unenforceable is generally insufficient grounds for declaring it void and removing it from the chain of title. I unfortunately contributed to the misconception regarding quiet title, but after years of research and analysis I have concluded that (a) quiet title is not an available remedy against the mortgage unless you have grounds to declare it void and (b) my survey of hundreds of cases indicates that judges are resistant to that remedy. BUT a similar action for cancellation of instrument could be directed against the an assignment, substitution of trustee on deed of trust, notice of default and notice of sale.
 *
Because there was an admission by Keshtgar that the loan was “non-performing” and because the court assumed that US Bank was a lender or proper successor to the lender, the question of what role the Trust plays was not explored at all. The courts are making the erroneous assumption that (a) there was a real loan contract between the parties who appear on the note and mortgage, (b) that the loan was funded by the originator and that the homeowner is in default of the obligations set forth on the note and mortgage. They completely discount any examination of whether the note is a valid instrument when it names not the actual lender but a third party who is also serving as a conduit. In an effort to prevent homeowners from getting windfalls, they are delivering the true windfalls to the servicers who are behind the initiation of virtually every foreclosure.
*
The problem is both legal and perceptual. By failing to see that each case is “Trust v Homeowner” the Courts are failing to consider that the case is between a private entity and a private person. By seeing the cases as “institution v private person” they are giving far too much credence to what the Banks, up until now, are selling in the courts.
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