Florida Foreclosure: Where No Case is Over-Ever

I have not commented on the arguments regarding the statute of limitations here in Florida. It is time I did. The article here points out that the 3rd DCA has bent over backward and essentially broken its own backbone by creating legal fictions to save the banks. What they continue to ignore is that saving the banks means screwing the consumer, the citizen and the taxpayer. They also have essentially ruled that the banks can keep coming into court, filing the same lawsuit over and over again, until they win by attrition — few homeowners can afford to contest foreclosures repeatedly. The 3rd DCA decision essentially says that it isn’t over until the bank wins.

 
The obvious premise behind this flawed decision is that somehow this will make everything turn out “right.” It doesn’t. The court completely ignores the huge body of law and information in the public domain that reveals the banks as the perpetrators of epic fraud. Either the court doesn’t know about the fraud or it doesn’t care.

 
And what the court does not address is the nature of the fraud by assuming facts that don’t exist. These banks don’t have a penny invested in any of the loans that they are using for foreclosure and even modification where ownership of the debt gets transferred from the investors who advanced the money to the banks who sold them the bad deals. The investor is left with nothing in most cases while the borrower cleans out his savings account trying to save his/her home only to lose it to a party who is stealing the home from the borrower and the loan from the investor.

 
The court is creating multiple legal fictions. In so doing the court has destroyed the value of stare decisis — legal precedent. Or, if you look from another point of view creating a destructive legal precedent. Instead of taking each legal effective act as something that matters, they have bent and broken the language of the note and mortgage — essentially converting the act of acceleration to an option that means nothing unless foreclosure is successful.

 
If this decision is left standing then no case is over, ever. And lawyers will start arguing that even though their client committed themselves to an act with legal significance, they now choose to disavow that act and proceed on an alternative theory — after they have already lost the case in prior proceedings. This creates an endless chain of alleging “new facts” or “alternative facts” on every case where a party previously lost the legal contest, or where their case was dismissed.

 
The inherent presumption is that borrowers have no voice in this process because they received the benefit of fraudulent schemes. But in the courts where I grew up as a lawyer, no party was allowed presumptions if they had unclean hands seeking the equitable remedy of foreclosure.

 

Nor would a fraudster be allowed to benefit from his schemes once the scheme was revealed. The courts are turning this on its head. As stated in the Yvanova decision in California, it DOES matter if the wrong party is bringing the foreclosure action. It is not enough that the homeowner may owe someone money based upon some equitable theory of law; the homeowner must respond only to a claim from the actual party to whom the debt is owed, i.e., the creditor.

 
That California decision said it well — we don’t enter judgments against people simply because they must owe somebody (or anybody) money. The legal system is only available to those with legal standing — a party to whom the debt is actually owed because they paid for it.

 
This rush to “convict” the homeowner of bad behavior (breach of an unconscionable arrangement where there is no actual enforceable loan contract) is the insidious basis of most of the court decisions where the courts have “read in” fictions that never existed by contract, statute or legal precedent.

 

They did it with due process by putting the burden on homeowners to prove facts that were solely within the care, custody and control of third parties.

 

They rubbed it in when they blocked discovery to get to those facts.

 

They did it again by reading into TILA rescission that the homeowner must file a legal action to make rescission effective (despite the express wording of the statute to the contrary).

 

They did it again by reading into TILA rescission that the homeowner had to offer some tender to the “lender” in order to make rescission effective.

 

And they are doing it again, even after the Supreme Court of the United States told them they were wrong by reading into TILA rescission that the conditions precedent to a valid rescission mean that the rescission is not legally effective until a judge decides the issues raised by the pretender lenders. THAT theory brings us full circle around to the erroneous theory that TILA rescission is not effective upon mailing and that it is not effective until someone files a lawsuit. But they do it again when they say that the Court can decide the outcome of a nonexistent lawsuit filed by a nonexistent party.

 
This won’t end until the Courts return to basic contract law. The courts must abandon their intrusion into the legislative agendas where public policy is declared. They must especially back off when the court doctrines on public policy conflict with the legislators who are the ONLY people constitutionally permitted to make policy. Those legislators have spoken on Federal and State levels. But the courts are unconstitutionally refusing to abide by laws passed by the legislative branch. The statute of limitations is just another example.

 

The way it destroys legal precedent is that it directly conflicts with the doctrine of finality. For example if a person is in an auto accident and chooses to make the claim before they reach maximum medical improvement, the measure of damages is diminished because once they sue the damages are based upon the proven injury. They might even lose because the proven damages are inconsequential. When they later discover they have more injuries and more damages they cannot come back into court and say that their last claim was an option — and more importantly that the fact that their claim was dismissed should be ignored.   And even more to the point, if their last claim was within the statute of limitations and their present claim is outside of the statute of limitations the plaintiff’s claim is dismissed on the basis of res judicata — the matter has already been litigated AND the statute of limitations.

 

If the judiciary is able to rewrite laws of the legislature from the bench in regards to Mortgages, then why shouldn’t the court do the same for ALL legal issues?  It is only a matter of time until these cases are used to circumvent the statute of limitations in other cases- opening up an onslaught of new cases that have already been tried.  Finality will be a thing of the past.

 

There can be little doubt that the banks control the judiciary. The Third District Court of Appeal ruled that the statute of limitations in mortgage foreclosure actions are not applicable. The court had earlier determined in the 2014 Deutsche Bank v. Beauvais opinion that the statute barred Deutsche Bank from filing a foreclosure action five years after the borrower’s default and the lender’s acceleration demanding full payment of the loan.

 
The Third District Court reversed this decision in a 6-4 ruling on April 12 and held that the statute of limitations can NEVER bar a bank’s efforts to foreclose on a Florida homeowner! What does this mean? It means that the banks will have until 5 years after the maturity of the loan to foreclose, and the ability to repeatedly file foreclosure actions until they have outspent and exhausted the homeowner.

 
This decision is a travesty. This decision ensures the foreclosure crisis will continue for decades, and allows the banks unlimited court actions until they can successfully foreclose on the homeowner. Very few homeowners have the financial means to endure decades of litigation, and very few homeowner’s attorneys will have the endurance or desire to defend cases for long durations of time. This ruling allows the banks to regroup, correct the issue, and re-litigate (or fabricate documents to “cure” the error).

 
The Third District’s en banc decision was based on the 2004 Florida Supreme Court opinion in Singleton v. Greymar. In Singleton, the trial court dismissed the lender’s foreclosure action on an accelerated debt with prejudice after the bank failed to appear at a hearing. What is unclear from the Singleton record is why the lender failed to appear. The court should have recognized that there was an agreement to reinstate under which the borrower made payments prior to the dismissal.

 
The lender filed a second foreclosure action after the borrower defaulted on a new, subsequent workout plan. The borrower sought to avoid the second action claiming res judicata. It is noteworthy that the lender’s Supreme Court brief in Singleton was only four pages long, with only one paragraph of actual argument stating that to deny the foreclosure would create “uncertainty” for banks and a “windfall” for homeowners, offering no analysis of res judicata, collateral estoppel or the consideration of the statute of limitations.

 
Even the attorney who represented the lender in Singleton, Mark Evans Kass, said that Singleton has been misinterpreted and misapplied by many courts across Florida, including the Third District in Deutsche Bank v. Beauvais. The Florida Supreme Court found the two actions were different events and the second action involved a new and distinct default by the borrowers.

 
“There really is no mystery as to why the Florida Supreme Court ruled that my client was not barred by res judicata in bringing the second foreclosure action,” Kass stated. “It’s simple. The debtors, Gwendolyn and William Singleton, made payments and reinstated the loan after we accelerated the debt. A few months after reinstating and dismissing the first lawsuit, they defaulted again, which is why we filed a second lawsuit and alleged a subsequent and separate default date — because there actually was a subsequent and separate default.”

 

Kass commented on the Third District’s recent en banc opinion and said, “I would agree with the dissent that Deutsche Bank v. Beauvais has created a new legal fiction. In Singleton, we had a reinstatement and then a new and separate default. For that reason, our second foreclosure was a different cause of action. I understand that the borrower in Beauvais never reinstated the accelerated loan, never made additional payments, and there was never a new or subsequent default.”

 
The four dissenting judges in Beauvais agreed and stated that Beauvais: 1) creates a “legal fiction” that acceleration does not affect the installment nature of the loan; 2) rewrites the contract provisions between the parties; and 3) rewrites the statute of limitations to favor banks. Thus, the only exceptions to the statute of limitations in Florida are capital crimes like murder and now-mortgage foreclosures. However, ONLY murder is an exception actually carved out by a statute enacted by the Florida Legislature.

 

The Florida Supreme Court failed to address is how there can legally be a new default after a debt has already been accelerated. Over the years the banks have worked to convince the courts that Singleton supports the proposition that if a foreclosure is dismissed “for any reason,” there is an automatic reinstatement of the installment nature of the loan, thereby resetting the statute of limitations period for foreclosures.

 
In an unprecedented move, the Third District took Beauvais to an entirely new level claiming that the installment nature of the loan was never affected by the lender’s acceleration of the debt. Thus, even if a bank demands full repayment, the borrower is still obligated to make monthly payments as if there were no acceleration. The courts have opportunistically misinterpreted Singleton and the Florida Supreme Court will need to clarify whether Singleton changes the meaning and effect of “acceleration” and therefore nullified the statute of limitations for mortgages.

 

 

With so many courts misinterpreting the Florida Supreme Court’s Singleton opinion, the Florida Supreme Court must clarify whether Singleton changed the meaning and effect of “acceleration” and nullified the statute of limitations for mortgages. New exceptions to the statute of limitations is a Legislature issue, not for the judiciary to decide.

Rescission Procedure Explained — Tonight on the Neil Garfield Show

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

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

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

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

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

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

California Supreme Court Rules in Yvanova, “The borrower owes money NOT TO THE WORLD at large but to a particular person or institution.”

Yvanova v New Century Mortgage 02182016 Supreme Court of California opinion

By William Hudson

Last week the California Supreme Court ruled in Yvanova v. New Century Mortgage Corporation (Case No. S218973, Cal. Sup. Ct. February 18, 2016) that homeowners have standing to challenge a note assignment in an action for wrongful foreclosure on the grounds that the assignment is void. Obviously if the court had ruled differently, the banks would have had absolute carte blanche to forge mortgage assignments with wild abandon. In fact, without a system of endorsements and assignments it would be almost impossible to determine what party has a legitimate interest in a property and chaos would have ensued (sound familiar?).

 
The Yvanova ruling puts to rest the prior assumption by most California courts that a homeowner lacks standing to challenge a void assignment. This decision has the potential to open the litigation floodgates by borrowers who were improperly foreclosed on due to fraudulent or improper assignments. In fact, you can bet that homeowners who lost their homes due to the court’s resistance to follow established law will be filing suit.

 
In Yvanova, she complained that the bank had resorted to the use of fraudulent documents in order to foreclose. First she identified that a bankrupt entity called New Century assigned a deed of trust years after the company ceased to exist. The mortgage assignments demonstrated that even though New Century was dissolved in 2008, New Century allegedly assigned Yvanova’s deed of trust to Deutsche bank in 2011. It was also discovered that Yvanova’s note could not have been delivered to the Morgan Stanley trust pool because the trust had a cutoff date of January 2007. Deutsche Bank, the servicer, claims to have transferred the deed of trust to that pool in December 2011. Thus, 3 years and 11 months after the trust had closed.

 
By law, and to ensure tax-free pass-through status by the REMIC (Real Estate Mortgage Investment Conduit) notes placed in trusts must be placed into the pool by a certain date. The Morgan Stanley trust had a cutoff date of January 2007 but Deutsche Bank claims the note they received by a zombie assignment was placed in the pool in 2011. Thus, a nonexistent company called New Century transferred a note to a closed trust.

 
Up until Yvanova was settled, the California courts rejected hundreds of similar claims over the years stating that borrowers were not a party to or holder of the debt (see Jenkins f. JP Morgan Chase). The California courts essentially ruled that homeowners may now challenge wrongful foreclosures on the grounds that the assignment of the note was invalid or the chain of assignment was faulty. In securitized trusts, it is fairly common for the endorsements and assignments to be either inaccurate or downright fraudulent (photoshopped, robosigned, etc.). The big securitizing banks like Ocwen, Deutsche, Morgan Stanley and Wells Fargo better prepare for a tsunami of wrongful foreclosure suits in California.

 
The California Supreme Court, by ruling in favor of Yvanova, effectively confirmed the 2013 California Appellate ruling Glaski v. Bank of America, which held that a homeowner facing a non-judicial foreclosure has standing to challenge violations of the pooling and servicing agreement. One of the most insightful quotes in Yvanova states, “The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security.”

 

The California Supreme Court got it right when they elaborated that, “A homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity’s hands. No more is required for standing to sue.” Could it be that the California courts are tired of the 9 years of fraudulent banking games that have clogged the court system with no end in sight?

 
It wasn’t the homeowner who got sloppy, greedy and decided to start forging and photoshopping legal documents. It was the banks that engineered this complete fiasco from the top to bottom. Maybe now the banks will clean up their act, or they will be forced to find a more efficient and convincing way to forge and falsify endorsements and assignments. To date, the left hand doesn’t know what the right hand is doing- and the banks only hope that the homeowner doesn’t discover their deception.

 
I will reiterate again, if a bank claims to own a debt then why not simply show the documentation and prove it? This entire mess could be cleaned up very quickly if the banks would simply show the court evidence of ownership- but the courts know the banks don’t have it. By now we know that this entire debacle was engineered under the premise of plausible deniability and the screws are coming loose.
It is evident that the courts have had enough. The Supreme Court in Yvanova stated that:

 

“… California borrowers whose loans are secured by a deed of trust with a power of sale may suffer foreclosure without judicial process and thus ―would be deprived of a means to assert [their] legal protections if not permitted to challenge the foreclosing entity‘s authority through an action for wrongful foreclosure. (Culhane, supra, 708 F.3d at p. 290.)

A borrower therefore ―has standing to challenge the assignment of a mortgage on her home to the extent that such a challenge is necessary to contest a foreclosing entity‘s status qua mortgagee‖ (id. at p. 291)— that is, as the current holder of the beneficial interest under the deed of trust.”
The decision goes on to state that:

 

“In seeking a finding that an assignment agreement was void, therefore, a plaintiff in Yvanova‘s position is not asserting the interests of parties to the assignment; she is asserting her own interest in limiting foreclosure on her property to those with legal authority to order a foreclosure sale. This, then, is not a situation in which standing to sue is lacking because its ―sole object . . . is to settle rights of third persons who are not parties. (Golden Gate Bridge etc. Dist. v. Felt (1931) 214 Cal. 308, 316.)”

Apparently the California Supreme Court just grew a pair and the remaining 49 states might want to listen up. With all of the fraud settlements that have occurred over the past seven years, it is evident that what is occurring isn’t simply sloppy paperwork or unintentional oversight but blatant fraud, theft and criminal conspiracy if you want to be honest. It is a sad day in America when a homeowner must go all the way to the Supreme Court in order to obtain a fair and just ruling. If the courts had ruled in favor of the banks (and I am sure the judges in Yvanova knew what was on the line), there is no doubt in my mind that banks would have had a foreclosure feeding frenzy.

The court states the obvious, that there is an investor or entity who may suffer an unauthorized loss of its interest in the note if the foreclosure proceeds, “when an invalid transfer of a note and deed of trust leads to foreclosure by an unauthorized party, the ―victim‖ is not the borrower, whose obligations under the note are unaffected by the transfer, but ―an individual or entity that believes it has a present beneficial interest in the promissory note and may suffer the unauthorized loss of its interest in the note.”

And finally, the court gets to the meat of the matter- the issue of standing. “As it relates to standing, we disagree with defendants’ analysis of prejudice from an illegal foreclosure. A foreclosed-upon borrower clearly meets the general standard for standing to sue by showing an invasion of his or her legally protected interests (Angelucci v. Century Supper Club (2007) 41 Cal.4th 160, 175)—the borrower has lost ownership to the home in an allegedly illegal trustee‘s sale. (See Culhane, supra, 708 F.3d at p. 289 [foreclosed-upon borrower has sufficient personal stake in action against foreclosing entity to meet federal standing requirement].)  Moreover, the bank or other entity that ordered the foreclosure would not have done so absent the allegedly void assignment. Thus- [t]he identified harm—the foreclosure—can be traced directly to [the foreclosing entity‘s] exercise of the authority purportedly delegated by the assignment.”

In conclusion, the court clarifies who is allowed to enforce the note without showing overt favoritism to the bank. Please note the eloquence of the last line in this paragraph in the Yvanova decision:

“Nor is it correct that the borrower has no cognizable interest in the identity of the party enforcing his or her debt. Though the borrower is not entitled to object to an assignment of the promissory note, he or she is obligated to pay the debt, or suffer loss of the security, only to a person or entity that has actually been assigned the debt. (See Cockerell v. Title Ins. & Trust Co., supra, 42 Cal.2d at p. 292 [party claiming under an assignment must prove fact of assignment].) The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security.

Again, “The borrower owes money NOT TO THE WORLD at large but to a particular person or institution, and ONLY the person or institution entitled to payment may enforce the debt by foreclosing on the security.” The court isn’t magically creating case law- this is exactly what the promissory note entitles the bearer to do- collect on a debt. The note does not say, “If you have a forged document you randomly printed a copy off the internet or photoshopped- you have standing.”

Only the individual or entity with actual STANDING can foreclose on a home. The fact that the homeowner defaulted on an alleged contract (that probably didn’t happen the way the contract reflects the transaction) doesn’t mean any party claiming to be a note holder can foreclose on the home. Like Jerry McGuire said, “SHOW ME THE MONEY.” Until the mortgagee shows up with actual evidence of ownership- no servicer, “lender” or unknown party should be able to randomly foreclose on a home simply by saying they own the note.

Again, this is the beauty of rescission. By precluding the servicer from walking into court with a forged note, mortgage and alleged contract- and forcing this party to demonstrate contractual standing- many fraudulent foreclosures would be prevented. It is tragic that so many people have lost their homes because the courts permitted a pretend lender with no standing to waltz in and take a home simply by showing fraudulent documents and making false claims.

Finally, the Yvanova ruling leaves us with the crowning glory of this decision, “A homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity‘s hands. No more is required for standing to sue.” Thank you California Supreme Court justices for ruling according to law instead of the banking lobby.

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RECOMMENDED READING:

Pretender Lenders: How Tablefunding and Securitization Go Hand in Hand” By William Paatalo and Kimberly Cromwell. CLICK: http://infotofightforeclosure.com/tools-store/ebooks-and-services/?ap_id_102

MISSION STATEMENT: I believe that the mortgage crisis has produced manifest evil and injustice in our society. I believe our recovery will never reach the majority of struggling Americans until we restore equal protection for all citizens and especially borrowers in our debt-ridden society. LivingLies is the vehicle for a collaborative movement to provide homeowners with sufficient resources to combat bloated banks who are flooding the political market with money. We provide thousands of pages of free forms, articles and discussion of statutes, case precedent and policy on this site. And we provide paid services, books and products that enable us to maintain an infrastructure to provide a voice to the victims of Wall Street corruption.

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LivingLies Announces Columbus Ohio Law Office

If you are looking for legal representation in Ohio, please call our customer service line at 520-405-1688. You will either be interviewed or directed to a form on line to fill out as to the status of your case and various other matters. Or you can call the Columbus office direct. Client intake has already begun under this arrangement.

Editor’s Comment: I am thrilled announce this association with lawyers in Columbus, Ohio who not only understand the intricacies of securitization and not only represent homeowners fighting the banks, but whose mission is to WIN not just buy time. NO guarantees of course, but these guys are the real deal.

They are scholars, writers, creative and innovative as well as knowledgeable in trial practice, bankruptcy and property law. I have associated with them directly as being of counsel, which is not something I ordinarily do, as most of you know.

MEET WITTENBERG LAW GROUP
Please allow us to introduce Wittenberg Law Group, a Columbus, Ohio-based law firm that helps to defend homeowners against foreclosures. The professionals of Wittenberg Law Group stand ready to help you.
Eric J. Wittenberg is the founder and manager of the firm. Mr. Wittenberg is in his 26th year in the practice of law. He is involved in a great deal of litigation with lenders trying to wrongfully foreclose upon homeowners. Mr. Wittenberg shares something important with Neil Garfield–like Mr. Garfield, Mr. Wittenberg is an alumnus of Dickinson College. He has a master’s degree in public and international affairs from the University of Pittsburgh Graduate School of Public and International Affairs, and his law degree from the University of Pittsburgh School of Law, where he was the Head Notes and Comments Editor for the Journal of Law and Commerce. For 25 years, he has worked to protect the rights of individuals and small businesses.
He is also an award-winning Civil War historian and author, with 17 books on the subject in print. Mr. Wittenberg regularly lectures and leads tours of Civil War battlefields and is in great demand. He is also an ardent baseball fan and the co-author of You Stink! Major League Baseball’s Terrible Teams and Pathetic Players.
Jennifer L. Routte is a Columbus native who comes from a background of a successful family business. She worked in the family business for going to law school and understands the challenges faced by small businesses. She is an graduate of The Ohio State University and the Capital University School of Law.
Treisa L. Fox is an associate attorney who works almost exclusively on defending foreclosures. Ms. Fox, a native of West Virginia, is a graduate of Marshall University and of the Capital University School of Law. She has a great deal of experience with challenging the validity of loan documents and of the claims of lenders, and she stands prepared to assist you.
The professionals of Wittenberg Law Group stand prepared to assist you with your efforts to defend your homes.
Eric J. Wittenberg
Attorney and Counselor at Law
WITTENBERG LAW GROUP
6895 East Main Street
Reynoldsburg, Ohio 43068
614.834.9650
Fax: 614.328.0576
eric@wittenberglawgroup.com
http://www.wittenberglawgroup.com

Deny and Discover Strategy Working

For representation in South Florida, where I am both licensed and familiar with the courts and Judges, call 520-405-1688. If you live in another state we provide direct support to attorneys. call the same number.

Having watched botched cases work their way to losing conclusions and knowing there is a better way, I have been getting more involved in individual cases — pleading, memos, motions, strategies and tactics — and we are already seeing some good results. Getting into discovery levels the playing field and forces the other side to put up or shut up. Since they can’t put up, they must shut up.

If you start with the premise that the original mortgage was defective for the primary reason that it was unfunded by the payee on the note, the party identified as “Lender” or the mortgagee or beneficiary, we are denying the transaction, denying the signature where possible (or pleading that the signature was procured by fraud), and thus denying that any “transfer” afterwards could not have conveyed any more than what the “originator” had, which is nothing.

This is not a new concept. Investors are suing the investment banks saying exactly what we have been saying on these pages — that the origination process was fatally defective, the notes and mortgages unenforceable and the predatory lending practices lowering the value of even being a “lender.”

We’ve see hostile judges turn on the banks and rule for the homeowner thus getting past motions to lift stay, motions to dismiss and motions for summary judgment in the last week.

The best line we have been using is “Judge, if you were lending the money wouldn’t you want YOUR name on the note and mortgage?” Getting the wire transfer instructions often is the kiss of death for the banks because the originator of the wire transfer is not the payee and the instructions do not say that this is for benefit of the “originator.”

As far as I can tell there is no legal definition of “originator.” It is one step DOWN from mortgage broker whose name should also not be on the note or mortgage. An originator is a salesman, and if you look behind the scenes at SEC filings or other regulatory filings you will see your “lender” identified not as a lender, which is what they told you, but as an originator. That means they were a placeholder or nominee just like the MERS situation.

TILA and Regulation Z make it clear that even if there was nexus of connection between the source of funds and the originator, it would till be an improper predatory table-funded loan where the borrower was denied the disclosure and information to know and choose the source of a loan, thus enabling consumers to shop around.

In order of importance, we are demanding through subpoena duces tecum, that parties involved in the fake securitization chain come for examination of the wire transfer, check, ACH or other money transfer showing the original funding of the loan and any other money transactions in which the loan was involved INCLUDING but not limited to transactions with or for the fake pool of mortgages that seems to always be empty with no bank account, no trustee account, and no actual trustee with any powers. These transactions don’t exist. The red herring is that the money showed up at closing which led everyone to the mistaken conclusion that the originator made the loan.

Second we ask for the accounting records showing the establishment on the books and records of the originator, and any assignees, of a loan receivable together with the name and address of the bookkeeper and the auditing firm for that entity. No such entries exist because the loan receivable was converted into a bond receivable, but he bond was worthless because it was based on an empty pool.

And third we ask for the documentation, correspondence and all other communications between the originator and the closing agent and between each “assignor” and “assignee” which, as we have seen they are only too happy to fabricate and produce. But the documentation is NOT supported by underlying transactions where money exchanged hands.

The net goals are to attack the mortgage as not having been perfected because the transaction was and remains incomplete as recited in the note, mortgage and other “closing” documents. The “lender” never fulfilled their part of the bargain — loaning the money. Hence the mortgage secures an obligation that does not exist. The note is then attacked as being fatally defective partly because the names were used as nominees leaving the borrower with nobody to talk to about the loan status — there being a nominee payee, nominee lender, and nominee mortgagee or beneficiary.

The other part, just as serious is that the terms of repayment on the note do NOT match up to the terms agreed upon with the institutional investors that purchased mortgage bonds to which the borrower was NOT a party and did not issue. Hence the basic tenets of contract law — offer, acceptance and consideration are all missing.

The Deny and Discover strategy is better because it attacks the root of the transaction and enables the borrower to deny everything the forecloser is trying to put over on the Court with the appearance of reality but nothing to back it up.

The attacks on the foreclosers based upon faulty or fraudulent or even forged documentation make for interesting reading but if in the final analysis the borrower is admitting the loan, admitting the note and mortgage, admitting the default then all the other stuff leads a Judge to conclude that there is error in the ways of the banks but no harm because they were entitled to foreclose anyway.

People are getting on board with this strategy and they have the support from an unlikely source — the investors who thought they were purchasing mortgage bonds with value instead of a sham bond based upon an empty pool with no money and no assets and no loans. Their allegation of damages is based upon the fact that despite the provisions of the pooling and servicing agreement, the prospectus and their reasonable expectations, that the closings were defective, the underwriting was defective and that there is no way to legally enforce the notes and mortgages, notwithstanding the fact that so many foreclosures have been allowed to proceed.

Call 520-405-1688 for customer service and you will get guidance on how to get help.

  1. Do we agree that creditors should be paid only once?
  2. Do we agree that pretending to borrow money for mortgages sand then using it at the race track is wrong?
  3. Do we agree that if the lender and the borrower sign two different documents each containing different terms, they don’t have a deal?
  4. Can we agree that if you were lending money you would want your name on the note and mortgage and not someone else’s?
  5. Can we agree that banks who loaned nothing and bought nothing should be worth nothing when the chips are counted in mortgage assets?

 

New Workshop on Motion Practice and Discovery

why-you-should-attend-the-discovery-and-motion-practice-workshop

VISIT LIVINGLIES STORE FOR FREE VIDEOS AND OTHER RESOURCES

START WINNING CASES!!

May 23-24, 2010 2 days. 9am-5pm. Neil F Garfield. CLE credits pending but not promised. Register Now. Seating limited to 18. INCLUDES LUNCH AND EXTENSIVE MANUAL OF FORMS, NARRATIVE AND CASES. An in-depth look at securitized residential mortgages and deeds of trust. Latest cases on standing, nominees, splitting note from security instrument, bankruptcy strategies, expert declarations, forensic analysis reports.

Lawyers, paralegals, experts, forensic analysts will all benefit from this. This workshop includes monthly follow-up teleconferences and continuing on-going support with advance copies of articles, cases and analysis.

  1. STRATEGIC REVIEW: WHY THESE CASES ARE BEING WON AND LOST IN MOTION PRACTICE.
  2. SECURITIZATION REVIEW
  3. USE OF FORENSIC REPORTS AND EXPERT DECLARATIONS
  4. RAISING QUESTIONS OF FACT IN CREDIBLE MANNER
  5. SETTING UP AN EVIDENTIARY HEARING
  6. FOLLOW THE MONEY
  7. OBLIGATION, NOTE, BOND, MORTGAGE, DEED OF TRUST ANALYSIS
  8. TILA, RESPA, QWR, DVL AND RESCISSION — WHY JUDGES DON’T LIKE TILA RESCISSION AND HOW TO OVERCOME THEIR RESISTANCE.
  9. NOTICE OF DEFAULT, TRUSTEE, STANDING, REAL PARTY IN INTEREST EXAMINED AND REVIEWED
  10. INVESTORS, REMICS, TRUSTS, TRUSTEES, BORROWERS, CREDITORS, DEBTORS, HOMEOWNERS
  11. FACT EVIDENCE ON MOTIONS
  12. FORENSIC EVIDENCE ON MOTION
  13. EXPERT EVIDENCE ON MOTION
  14. ORAL ARGUMENT
  15. WHAT TO FILE
  16. WHEN TO FILE
  17. EMERGENCY MOTIONS — MOTION TO LIFT STAY, MOTION TO DISMISS, TEMPORARY RESTRAINING ORDERS, MOTION TO COMPEL DISCOVERY
  18. DISCOVERY: INTERROGATORIES, WHAT TO ASK FOR, HOW TO ASK FOR IT AND HOW TO ENFORCE IT. REQUESTS TO PRODUCE. REQUESTS FOR ADMISSIONS. DEPOSITIONS UPON WRITTEN QUESTIONS.
  19. FEDERAL PROCEDURE
  20. STATE PROCEDURE
  21. BANKRUPTCY PROCEDURE
  22. ETHICS, BUSINESS PLANS, AND PRACTICAL CONSIDERATIONS
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