Ally $52 Million settlement for “Deficient Securitization”

All of these adjectives describing securitization add up to one thing: the claims were false. For the most part none of the securitizations ever happened.

And that means that the REMIC trusts never purchased the debt, note or mortgage.

And THAT means the “servicer” claiming the right to administer a loan on behalf of the trust is false.

And THAT arguably means the business records of the servicer are not business records of the creditor.

And THAT my friends means what I have been saying for 10 years: virtually none of the foreclosures were legal, moral or justified. The real transaction was never revealed and never documented. The “closing” documents were fake, void and fraudulent. And THAT is grounds for cancellation of the note and mortgage.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

see http://www.nationalmortgagenews.com/news/compliance-regulation/ally-to-pay-52m-to-settle-subprime-rmbs-investigation-1091364-1.html

It is hard to imagine any scenario under which Government cannot know what I have been saying for years — that the claims of securitization are false and the documents for the loans were fraudulent. Government has decided to ignore the facts thus transforming a nation of laws into a nation of men.

In plain English the decision was made to let the chips fall on borrowers, who were victims of the double blind fraud, despite clear and irrefutable evidence that the banks malevolent behavior caused the 2008 meltdown. The choice was made: based upon information from the birthplace of securitization fraud, Government decided that it was better to artificially prop up the securities markets and TBTF banks than to preserve the purchasing power and household wealth of the ordinary man and woman. The economy — driven by consumer spending (70% of GDP) — had the rug pulled out from under it. And THAT is why the effects of rescission are still with us 8 years after the great meltdown.

The fact that there are 7,000 community banks, credit unions and savings banks using the exact same electronic payments platform as the TBTF banks was washed aside by the enormous influence exerted by a dozen banks who controlled Washington, DC, the state legislatures, and the executive branch in most of the states.

The American voter came to understand that they had been screwed by their representatives in Government. They voted for Sanders, they voted for Trump and they voted for anyone who was for busting up government. But they still face daunting challenges as they continue to crash into a rigged system that favors a handful of merciless bankers who have bought their way into the Federal and State Capitals.

Chipping away at the monolithic Government Financial complex individual homeowners are winning case after case in court without notice by the media. It isn’t noticed because in most instances the cases are settled, even after judgment, with a seal of confidentiality. Most people don’t fight it at all. They sweep up and leave the keys on the counter believing they have committed some wrong and now they must pay the price. THAT is because they have not received the necessary information to realize that they can and should fight back.

Deutsch Bank: Going Down With the Details

It is getting increasingly obvious to the courts that there is something inherently wrong with foreclosures. The substitutions without leave of court and the repeated filing for foreclosure on the same default are coming back to bite the ‘securitization fail” scheme of the banks.

see http://www.newyorklawjournal.com/id=1202766695379/Deutsche-Bank-Trust-Co-Americas-v-Smith-20152381?kw=Deutsche%20Bank%20Trust%20Co.%20Americas%20v.%20Smith%2C%202015-2381&cn=20160907&pt=Daily%20Decisions&src=EMC-Email&et=editorial&bu=New%20York%20Law%20Journal&slreturn=20160807093854

If you start with the premise that the trusts were never funded and therefore never existed, everything starts to make sense. In ordinary circumstances with ordinary loans the pronouncement of every bank foreclosure attorney rings hollow: “Judge this is a standard foreclosure.” If that were true they wouldn’t be losing cases procedurally, allowing them to linger sometimes for a decade or more, and they wouldn’t be trying to slip in a “substitution of Plaintiff” without leave of court. And they probably would not be foreclosing on so many dead people.

This case, decided today, gives us an example of how things can go wrong for the banks, servicers and trustees. But first I would remind the reader that virtually all foreclosures over the past 10 years have been allowed without admissible evidence or pleading. They have succeeded in foreclosing based upon two elements: (1) fabricated paper and (2) getting a judge to apply legal presumptions that are contrary to the true facts. The banks have been helped by the judicial aversion to the “free house” myth, and the corollary myth that if the foreclosure is allowed to proceed, nobody is getting a free house. Neither myth is true.

So in this case there are two points made. First that New York like many states operates under the rule that if the case has been “discontinued” (i.e., dismissed twice) the third attempt should be dismissed because the two prior dismissals operate, as a matter of law, as an adjudication on the merits, meaning that res judicata applies. This is narrowly applied to those cases where the allegations are essentially the same as the two prior cases.

In prior decades I represented lenders and homeowner associations enforcing their liens by foreclosure. It was a rare occurrence that we ever had to go into court more than once to prove our case, and rarer still that we had our case dismissed because of inaction or refusal to answer discovery. Now it is practically the rule that the foreclosure cases are vetted on whether they are contested or not. Those cases that are contested are pushed to the back of the line because that is where the foreclosing parties, strangers to the transaction, are vulnerable to losing their spurious claims.

Since most foreclosures are uncontested, these banks, servicers and trustees are free to get their foreclosure judgments and forced sales without objection from anyone by a factor of roughly 25:1. So the banks are playing the odds. For every case that is contested it is best for banks to delay it while they get 25 others through without objection. But the Courts are catching up with this strategy and it won’t be long before some very strong orders are entered demanding explanations of what is really going on. The time is coming when we return to the days when judges scrutinized the foreclosures and asked pointed questions even in uncontested cases.

In prior times the lender or association would always show its records if it was demanded by the homeowner or property owner. Now despite a new Federal rule preventing blanket objections, banks routinely object to all or nearly all of the requests in discovery, frequently resulting in an order to compel discovery which is often ignored resulting in dismissal.

The other point raised by the Court was the practice of simply changing the style of the case by inserting a new or “corrected” name of the Plaintiff or foreclosing party. The principle is simple: if you want to substitute parties you need leave of court. In order to get permission you need to recite the facts under which the original lawsuit was correctly filed but now, as the result of intervening events, it needs to be prosecuted in favor of a new party. Often this requires an amendment to the complaint in a judicial state. This general rule is now universally rejected by the banks who have convinced judges to ignore the rules and allow the change in the name of the case — instead of demanding an explanation of the change.

The Banks don’t want to explain it because they have no reasonable explanation for changing the parties around. It is often done for strategic reasons rather than substantive reasons — neither of the Plaintiffs — old or new — having any interest in the loan, debt, note or mortgage.

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.

GET A CONSULT!

https://www.vcita.com/v/lendinglies to schedule CONSULT, MAKE A DONATION, leave message or make payments.

 

“Get three months behind and you’ll get a modification”: The Big Lie That Servicers and Banks are Still Using

The bottom line is that millions of people have been told that line and most of them stopped paying for three months because of it. It was perfectly reasonable for them to believe that they had just been told by the creditor that they must stop paying if they want relief. Judges have heard this repeatedly from homeowners. So what is the real reason such obvious bank behavior is overlooked?

More to the point — what choice does the homeowner have other than believing what they just heard from an apparently authorized service representative?

================================

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

—————-

In the course of the last ten years I have personally interviewed homeowners, reviewed the documents and or received reports from homeowners that were duped into going to default by that famous line: “You must be three months behind.” It is patently true that every homeowner who had that conversation believed that they were being told to stop making payments. No, it didn’t make any sense; but it also was beyond comprehension that the servicers were in fact aiming at foreclosure instead of workouts that would have preserved the value of the alleged loan, and mitigated the rush into the worst recession seen in modern times.

On cross examination the point is always made that the “representative” did not use the words “Stop paying.” And thus the point is made that the announcement that a three month delinquency was necessary for a modification was simply that: just information. Yet the behavior of millions of homeowners shows that virtually every one of them believed they were told to stop paying in “code” language. If that is not reasonable reliance, I don’t know what is.

However there is much bigger point. The three month announcement was (a) false and (b) an intentional policy to lure people into default and foreclosure. It has been previously reported here and elsewhere that an officer at Bank of America said point blank to his employees “We are in the foreclosure business, not the modification business.”

The legal point here is (a) unclean hands and (b) estoppel. In most cases homeowners ended up withholding three months worth of payments, as they reasonably believed they had been instructed to do, many times faithfully paying on a three month trial or “forbearance” plan, and sometimes even paying for many months beyond the “trial” period, or even years. Then suddenly the servicer/bank stops accepting payments and won’t respond to calls and letters from the homeowners asking what is going on.

Then they get a notice of default, a notice of their right to reinstate if they pay a certain sum (which is most often miscalculated) and then they get served with a foreclosure notice. The entire plan was aimed at foreclosure. And now, thanks to recent court doctrine, homeowners are stuck with intensely complicated instruments and behavior, only to find out that despite all law to the contrary, “caveat emptor” (Let the buyer beware).

The trick has always been to make the non-payment period as long as possible so that (1) reinstatement is impossible for the homeowner and (2) to increase the value of servicer advances. Each month the homeowner does not make a payment the value of fraudulent claims for “servicer advances” goes up. And THAT is the reason why you see cases going on for 10 years and more. every month you miss a payment, the Master Servicer increases its claims on the final proceeds of liquidation of the home.

In the banking world it is axiomatic that a loan “in distress” should be worked out with the borrower because that will be the most likely way to preserve the value of the loan. In every professional seminar I ever attended relating to residential and commercial loans the main part of the seminar was devoted to workouts, modification or settlement. We have had literally millions of such opportunities in which people were instead either lured into default or unjustly and fraudulently induced to drop their request for modification or to go into a “default” period that they thought was merely a waiting period before the modification was complete.

The result: asset values tanked: the alleged loan, the alleged MBS, and the value of the subject property was crushed by servicers looking out for their real boss — the Master Servicer and operating completely against the interests of the investors who are completely ignorant of what is really going on. Don’t kid yourself — US Bank and other alleged Trustees of REMIC Trusts have not taken a single action as Trustee ever and the REMIC Trust never existed, never was an active business (even during the 90 day period allowed), and the “Trust” was never administered by any Trust department of any of the banks who are claimed to be Trustees of the “REMIC Trust”. Both the Trust and the Trustee are window dressing as part of a larger illusion.

My opinion as a former investment banker, is that this is all about money. The “three month” announcement was meant to steer the homeowner from a HAMP modification, which was routinely “rejected by investor” (when no contact was ever made with the investor). This enabled the banks to “capture” (i.e., steal) the alleged loan using one of two means: (1) an “in-house” modification that in reality made the servicer the creditor instead of the investor whose money was actually in the deal and/or (2) a foreclosure and sale in which the servicer picked up all or nearly all of the proceeds by “recovery” of nonexistent servicer advances.

It isn’t that the investors did not receive money under the label of “servicer advances.” It is that the money investors received were neither advances nor were they paid by the servicer (same as the origination or acquisition of the loan which is “presumed” based upon fabricated, forged, robo-signed documents). There is no speculation required as to where the money came from or who had access to it. The prospectus and PSA combined make it quite clear that the investors can receive their own money back in satisfaction of the nonexistent obligation from a nonexistent REMIC Trust that issued worthless and fraudulent MBS but never was in business, nor was it ever intended to be in business.

Servicer advances can only be “recovered” when the property is liquidated. There is no right of recovery against the investors. But the nasty truth is that there is no right of “recovery” of servicer advances anyway because there is nothing to recover. By labeling money paid from a pool of investor money as “servicer advances” we again have the creation of an illusion. They make it look like the Master Servicer is advancing money when all they are doing is exercising control over the investors’ money.

Thus the three month announcement is a win win for the Master Servicer — either they convert the loan from being subject to claims by investors to an “in-house” loan, or they take the full value of the alleged loan and reduce it to zero by making false claims for recovery — but only if there is a foreclosure sale. Either way the investor gets screwed and so does the homeowner both of whom were pawns and victims in an epic fraud.

Schedule A Consult Now!

DONATE

The Mortgage Loan Schedule: Ascension of a False Self-Serving Document

At no time were the Trusts anything but figments of the imagination of investment banks.

As an exhibit to the alleged Pooling and Servicing Agreement, the Mortgage Loan Schedule” appears to have legitimacy. Peel off one layer and it is an obvious fraud upon the court.

The only reason the banks don’t allege holder in due course status is because nobody in their chain ever paid anything. The transactions referred to by the assignment or endorsement or any other document never happened — but they are  wrongly presumed to be true.

================================

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

Our Services: https://livinglies.wordpress.com/2016/04/11/what-can-you-do-for-me-an-overview-of-services-offered-by-neil-garfield/

—————-

I’m seeing more and more cases where once again the goal post keeps moving, in order to keep the court and foreclosure defense counsel off balance. Now it is the attachment of a “Mortgage Loan Schedule” [MLS] to the PSA. As an exhibit to the alleged Pooling and Servicing Agreement, the “Mortgage Loan Schedule” appears to have legitimacy. Peel off one layer and it is an obvious fraud upon the court.

Here is my thought. The MLS supposedly attached to the PSA never has any proof as to when it was attached. It has the same problem as the undated endorsement on the note only worse. It is not a facially valid document of transfer. It relies, derivatively on the PSA that was created long before an MLS existed even if they were telling the truth (which they are not — the trusts are empty).

The securitization process is described in the Pooling and Servicing Agreement along with the parties who are involved in the purchase, Sale and ownership of the alleged loans that were “purchased” by the Trust. But there was no purchase. If there was a purchase the bank would assert status as a holder in due course, prove the payment and the borrower would have no defenses against the Trust, even if there were terrible violations of the lending laws.

First you create the trust and then after you have sold the MBS to investors you are supposed turn over the proceeds of the sale of mortgage backed securities (MBS) to the Trustee for the Trust. This never happened in any of the thousands of Trusts I have reviewed. But assuming for a moment that the proceeds of sale of MBS were turned over to the Trust or Trustee THEN there is a transaction in which the Trust purchases the loan.

The MLS, if it was real, would be attached to assignments of mortgages and bulk endorsements — not attached to the PSA. The MLS as an exhibit to the PSA is an exercise in fiction. Adhering strictly to the wording in the PSA and established law from the Internal Revenue Code for REMIC Trusts, and New York State law which is the place of origination of the common law trusts, you would THEN sell the loan to the trust through the mechanism in the PSA. Hence the MLS cannot by any stretch of the imagination have existed at the time the Trust was created because the condition precedent to acquiring the loans is getting the money to buy them.

The MLS is a self serving document that is not proven as a business record of any entity nor is there any testimony that says that this is in the business records of the Trust (or any of the Trust entities) because the Trust doesn’t have any business records (or even a bank account for that matter).

They can rely all they want on business records for payment processing but the servicer has nothing to do with the original transaction in which they SAY that there was a purchase of the loans on the schedule. The servicer has no knowledge about the putative transaction in which the loans were purchased.

And we keep coming back to the same point that is inescapable. If a party pays for the negotiable instrument (assuming it qualifies as a negotiable instrument) then THAT purchasing party becomes a holder in due course, unless they were acting in bad faith or knew of the borrower’s defenses. It is a deep stretch to say that the Trustee knew of the borrower’s defenses or even of the existence of the “closing.”By alleging and proving the purchase by an innocent third party in the marketplace, there would be no defenses to the enforcement of the note nor of the mortgage. There would be no foreclosure defenses with very few exceptions.

There is no rational business or legal reason for NOT asserting that the Trust is a holder in due course because the risk of loss, if an innocent third party pays for the paper, shifts to the maker (i.e., the homeowner, who is left to sue the parties who committed the violations of lending laws etc.). The only reason the banks don’t allege holder in due course status is because nobody in their chain ever paid anything. There were no transactions in which the loans were purchased because they were already funded using investor money in a manner inconsistent with the prospectus, the PSA and state and federal law.

Hence the absence of a claim for holder in due course status corroborates my factual findings that none of the trusts were funded, none of the proceeds of sale of MBS was ever turned over to the trusts, none of the trusts bought anything because the Trust had no assets, or even a bank account, and none of the Trusts were operating entities even during the cutoff period. At no time were the Trusts anything but figments of the imagination of investment banks. Their existence or nonexistence was 100% controlled by the investment bank who in reality was offering false certificates to investors issued by entities that were known to be worthless.

Hence the bogus claim that the MLS is an attachment to the PSA, that it is part of the PSA, that the Trust owns anything, much less loans. The MLS is just another vehicle by which banks are intentionally confusing the courts. But nothing can change the fact that none of the paper they produce in court refers to anything other than a fictional transaction.

So the next question people keep asking me is “OK, so who is the creditor.” The answer is that there is no “creditor,” and yes I know how crazy that sounds. There exists a claim by the people or entities whose money was used to grant what appeared to be real residential mortgage loans. But there was no loan. Because there was no lender. And there was no loan contract, so there is nothing to be enforced except in equity for unjust enrichment. If the investment banks had played fair, the Trusts would have been holders in due course and the investors would have been safe.

But the investors are stuck in cyberspace without any knowledge of their claims, in most instances. The fund managers who figured it out got fat settlements from the investment banks. The proper claimant is a group of investors whose money was diverted into a dynamic commingled dark pool instead of the money going to the REMIC Trusts.

These investors have claims against the investment banks at law, and they have claims in equity against homeowners who received the benefit of the investors’ money but no claim to the note or mortgage. And the investors would do well for themselves and the homeowners (who are wrongly described as “borrowers”) if they started up their own servicing operations instead of relying upon servicers who have no interest in preserving the value of the “asset” — i.e., the claim against homeowners for recovery of their investment dollars that were misused by the investment banks. An educated investor is the path out of this farce.

 

The Truth is Coming Out: More Questions About Loan Origination, Debt, Note, Mortgage and Foreclosure

For further assistance please call 954-495-9867 or 520-405-1688

————————————

Carol Molloy, Esq., one of our preferred attorneys is now taking on new cases for litigation support only. This means that if you have an attorney in the jurisdiction in which your property is located, then Carol can serve in a support role framing pleadings, motions and discovery and coaching the lawyer on what to do and say in court. Carol Molloy is licensed in Tennessee and Massachusetts where she has cases in both jurisdictions in which she is the lead attorney. As part of our team she gets support from myself and others. call our numbers above to get in touch with her.

———————————–

Hat tip to our lead investigator Ken McLeod (Chandler, Az) who brought this case to my attention. It is from 2013.

see New York Department of Housing vs Deutsch

Mysteriously seemingly knowledgeable legislators passed statutes permitting government agencies to finance mortgage loans in amounts for more than the property is worth, to people who could not afford to pay, without the need to document things such as income, and then to allow the chopping up the [*7]loans into little pieces to sell to new investors, so that if a borrower defaulted in repayment of the loan, the lender would not have the ability to prove it actually owned the debt, let alone plead its name correctly. The spell cast was so widespread that courts find almost everyone involved in mortgage foreclosure litigation raising the “Sgt. Schultz Defense” of “I know nothing.”

Rather than assert its rights and perhaps obligations under the terms of the mortgage to maintain the property and its investment, respondent has asserted the Herman Melville “Bartleby the Scrivener Defense” of “I prefer not to” and relying on the word “may” in the document, has elected to do nothing in this regard. Because this loan appears to have been sold to investors, it may be asked, does not the respondent have a legal obligation to those investors to take whatever steps are necessary to preserve the property such as collecting the rents and maintain the property as permitted in the mortgage documents?

It should be noted that in its cross-motion in this action Deutsche asserts that its correct name is “Deutsche Bank National Trust Company, as Trustee for Saxon Asset Securities Trust 2007-3, Mortgage Loan Asset Backed Certificates, Series 2007-3” and not the name petitioner placed in the caption. Which deserves the response “you’ve got to be kidding.” Deutsche is not mentioned in the chain of title; it is listed in these HP proceedings with the same name as on the caption of the foreclosure action in which it is the plaintiff and which its counsel drafted; and its name is not in the body of foreclosure action pleadings. In the foreclosure proceeding Deutsche pleads that it “was and still is duly organized and existing under the laws of the UNITED STATES OF AMERICA.” However, there is no reference to or pleading of the particular law of the USA under which it exists leaving the court to speculate whether it is some federal banking statute, or one that allows Volkswagens, BMW’s and Mercedes-Benz’s to be imported to the US or one that permitted German scientists to come to the US and develop our space program after World War II.

As more and more cases are revealed or published, the truth is emerging beyond a reasonable doubt about the origination of the loans, the actual debt (identifying creditor and debtor), the note, the mortgage and the inevitable attempt at foreclosure and forced sale (forfeiture) of property to entities who have nothing to do with any actual transaction involving the borrower. The New York court quoted above describes in colorful language the false nature of the entire scheme from beginning to end.

see bankers-who-commit-fraud-like-murderers-are-supposed-to-go-to-jail

see http://www.salon.com/2014/12/02/big_banks_broke_america_why_nows_the_time_to_break_our_national_addiction/

The TRUTH of the matter, as we now know it includes but is not limited to the following:

  1. DONALD DUCK LOANS: NONEXISTENT Pretender Lenders: Hundreds of thousands of loan closings involved the false disclosure of a lender that did not legally or physically exist. The money from the loan obviously came from somewhere else and the use of the non-existent entity name was a scam to deflect attention from the real nature of the transaction. These are by definition “table-funded” loans and when used in a pattern of conduct constitutes not only violation of TILA but is dubbed “predatory per se” under Reg Z. Since the mortgage and note and settlement documents all referred to a nonexistent entity, you might just as well have signed the note payable to Donald Duck, who at least is better known than American Broker’s Conduit. Such mortgages are void because the party in whose favor they are drafted and signed does not exist. Such a mortgage should never be recorded and is subject to a quiet title action. The debt still arises by operation of law between the debtor (borrower) and the the creditor (unidentified lender) but it is not secured and the note is NOT presumptive evidence of the debt. THINK I’M WRONG? “SHOW ME A CASE!” WELL HERE IS ONE FOR STARTERS: 18th Judicial Circuit BOA v Nash VOID mortgage Void Note Reverse Judgement for Payments made to non-existent entity
  2. DEAD ENTITY LOANS: Existing Entity Sham Pretender Lender: Here the lender was alive or might still be alive but it is and probably always was broke, incapable of loaning money to anyone. Hundreds of thousands of loan closings involved the false disclosure of a lender that did not legally or physically make a loan to the borrower (debtor). The money from the loan obviously came from somewhere else and the use of the sham entity name was a scam to deflect attention from the real nature of the transaction. These are by definition “table-funded” loans and when used in a pattern of conduct constitutes not only violation of TILA but is dubbed “predatory per se” under Reg Z. Since the mortgage and note and settlement documents all referred to an entity that did not actually loan money to the borrower, (like The Money Source) such mortgages are void because the party in whose favor they are drafted and signed did not fulfill a black letter element of an enforceable contract — consideration. Such a mortgage should never be recorded and is subject to a quiet title action. The debt still arises by operation of law between the debtor (borrower) and the the creditor (unidentified lender) but it is not secured and the note is NOT presumptive evidence of the debt.
  3. BRAND NAME LOANS FROM BIG BANKS OR BIG ORIGINATORS: Here the loans were disguised as loans from the entity that could have loaned the money to the borrower — but didn’t. Millions of loan closings involved the false disclosure of a lender that did not legally or physically make a loan to the borrower (debtor). The money from the loan came from somewhere else and the use of the brand name entity (like Wells Fargo or Quicken Loans) name was a scam to deflect attention from the real nature of the transaction. These are by definition “table-funded” loans and when used in a pattern of conduct constitutes not only violation of TILA but is dubbed “predatory per se” under Reg Z. Since the mortgage and note and settlement documents all referred to an entity that did not actually loan money to the borrower, such mortgages are void because the party in whose favor they are drafted and signed did not fulfill a black letter element of an enforceable contract — consideration. Such a mortgage should never be recorded and is subject to a quiet title action. The debt still arises by operation of law between the debtor (borrower) and the the creditor (unidentified lender) but it is not secured and the note is NOT presumptive evidence of the debt.
  4. TRANSFER WITHOUT SALE: You can’t sell what you don’t own. And you can’t own the loan without paying for its origination or acquisition. Millions of foreclosures are predicated upon acquisition of the loan through a nonexistent purchase — but facially valid paperwork leads to the assumption or even presumption that the sale of the loan took place — i.e., delivery of the loan documents in exchange for payment received. These loans can be traced down to one of the three types of loans described above by asking the question “Why was there no payment.” In turn this inquiry can start from the question “Why is the Trust not named as a holder in due course?” The answer is that an HDC must acquire the loan for value and receive delivery. What the banks are doing is showing evidence of delivery and an “assignment” or “power of attorney” that has no basis in real life — the endorsement of the note or assignment of the mortgage was fabricated, robo-signed and is subject to perjury in court testimony. Using the Pooling and Servicing Agreement only shows that more fabricated paperwork was used to fool the court into thinking that there is a pool of loans which in most cases does not exist — a t least not in the REMIC Trust.
  5. VIOLATION OF THE TRUST DOCUMENT: Most trusts are governed by New York law. Some of them are governed by Delaware law and some invoke both jurisdictions (see Christiana Bank). The laws that MUST be applied to the REMIC Trusts declare that any action taken without express authority from the Trust instrument is VOID. The investors still have not been told that their money never went into the trust, but that is what happened. They have also not been told that the Trust issued mortgage bonds but never received the proceeds of sale of those bonds. And they have not been told that the Trust, being unfunded, never acquired the loans. And that is why there is no assertion of holder in due course status. Some courts have held that the PSA is irrelevant — but they are failing to realize that such a ruling by definition eliminates the foreclosure as a viable action; that is true because the only basis of authority to pursue foreclosure, collection or any other enforcement of the sham loan documents is in the PSA which is the Trust document.
  6. THIRD PARTY PAYMENTS WITHOUT ACCOUNTING: “Servicer” advances that are actually made by the servicer but pulled from an account controlled by the broker dealer who sold the mortgage bonds. These payments continue regardless of whether the borrower is paying or not. Banks fight this issue because it would require that the actual creditors be identified and given notice of proceedings that are being pursued contrary to the interests of the investors. Those payments negate any default between the debtor and the actual creditor who has been paid. They also reduce the amount due. The same holds true for proceeds of insurance, guarantees, loss sharing with the FDIC and proceeds of hedge products like credit default swaps. Legally it is clear that these payments satisfies the payments due from the borrower but gives rise to an unsecured volunteer payment recapture through a claim for unjust enrichment. That could lead to a money judgment, the filing of the judgment and the foreclosure of the judgment lien. But the banks don’t want to do that because they would definitely be required to show the money trail — something they are avoiding at all costs because it would unravel the entire fraudulent scheme of “securitization fail.” (Adam Levitin’s term).
  7. ESTOPPEL: Inducing people to go into default so that there can be more foreclosures: Millions of people called the servicer asking for a modification or workout that the servicer obviously had no right to entertain. The servicer customer representative gave the impression that the borrower was talking to the right person. And this trusted person then started practicing law without a license by advising that modifications could not be requested until the borrower was at least 90 days in arrears. All of this was a lie. HAMP and other programs do NOT require 90 day arrearage. The purpose was to get homeowners in so deep that they could never get out because the servicers are charged with the job of getting as many loans into foreclosure as possible. By telling the borrower to stop paying they were (a) telling them the right thing because the servicer actually had no right to collect the payment anyway and (b) they put the servicer in an estoppel position — you can’t tell a borrower to stop paying and then say THEY breached the “agreement”. Stopping payment was a the request or demand of the servicer. Further complicating the process was the intentional loss of submissions by borrowers; the purpose of these “losses” (like “lost notes” was to elongate the process and get the borrower deeper and deeper into the false arrearage claimed by the servicer.

The conclusion is obvious — complete strangers to the actual transaction (between the actual debtor and actual creditor) are using the names of other complete strangers to the transaction and faking documents regularly to close out serious liabilities totaling trillions of dollars for “faulty”, fraudulent loans, transfers and foreclosures. As pointed out in many previous articles here, this is often accomplished through an Assignment and Assumption Agreement in which the program requires violating the Truth in Lending Act (TILA) and the Real Estate Settlement and Procedures Act (RESPA), the HAMP modification program etc. Logically it is easy to see why they allowed “foreclosures” to languish for 5-8 years — they are running the statute of limitations on TILA violations, rescission etc. But the common law right of rescission still exists as does a cause of action for nullification of the note and mortgage.

The essential truth in the bottom line is this: the paperwork generated at the loan closing is “faulty” and most often fabricated and the borrower is induced to execute documents that create a second liability to an entity who did nothing in exchange for the note and mortgage except get paid as a pretender lender — all in violation of disclosure requirements on Federal and state levels. This is and was a fraudulent scheme. Hence the “Clean hands” element of equitable relief in foreclosure as well as basic contract law prevent the right to enforce the mortgage, the note or the debt against the debtor/borrower by strangers to the transaction with the borrower.

Levitin and Yves Smith – TRUST=EMPTY PAPER BAG

Living Lies Narrative Corroborated by Increasing Number of Respected Economists

It has taken over 7 years, but finally my description of the securitization process has taken hold. Levitin calls it “securitization fail.” Yves Smith agrees.

Bottom line: there was no securitization, the trusts were merely empty sham nominees for the investment banks and the “assignments,” transfers, and endorsements of the fabricated paper from illegal closings were worthless, fraudulent and caused incomprehensible damage to everyone except the perpetrators of the crime. They call it “infinite rehypothecation” on Wall Street. That makes it seem infinitely complex. Call it what you want, it was civil and perhaps criminal theft. Courts enforcing this fraudulent worthless paper will be left with egg on their faces as the truth unravels now.

There cannot be a valid foreclosure because there is no valid mortgage. I know. This makes no sense when you approach it from a conventional point of view. But if you watch closely you can see that the “loan closing” was a shell game. Money from a non disclosed third party (the investors) was sent through conduits to hide the origination of the funds for the loan. The closing agent used that money not for the originator of the funds (the investors) but for a sham nominee entity with no rights to the loan — all as specified in the assignment and assumption agreement. The note and and mortgage were a sham. And the reason the foreclosing parties do not allege they are holders in due course, is that they must prove purchase and delivery for value, as set forth in the PSA within the 90 day period during which the Trust could operate. None of the loans made it.

But on Main street it was at its root a combination pyramid scheme and PONZI scheme. All branches of government are complicit in continuing the fraud and allowing these merchants of “death” to continue selling what they call bonds deriving their value from homeowner or student loans. Having made a “deal with the devil” both the Bush and Obama administrations conscripted themselves into the servitude of the banks and actively assisted in the coverup. — Neil F Garfield, livinglies.me

For more information on foreclosure offense, expert witness consultations and foreclosure defense please call 954-495-9867 or 520-405-1688. We offer litigation support in all 50 states to attorneys. We refer new clients without a referral fee or co-counsel fee unless we are retained for litigation support. Bankruptcy lawyers take note: Don’t be too quick admit the loan exists nor that a default occurred and especially don’t admit the loan is secured. FREE INFORMATION, ARTICLES AND FORMS CAN BE FOUND ON LEFT SIDE OF THE BLOG. Consultations available by appointment in person, by Skype and by phone.

————————————

John Lindeman in Miami asked me years ago when he first starting out in foreclosure defense, how I would describe the REMIC Trust. My reply was “a holographic image of an empty paper bag.” Using that as the basis of his defense of homeowners, he went on to do very well in foreclosure defense. He did well because he kept asking questions in discovery about the actual transactions, he demanded the PSA, he cornered the opposition into admitting that their authority had to come from the PSA when they didn’t want to admit that. They didn’t want to admit it because they knew the Trust had no ownership interest in the loan and would never have it.

While the narrative regarding “securitization fail” (see Adam Levitin) seems esoteric and even pointless from the homeowner’s point of view, I assure you that it is the direct answer to the alleged complaint that the borrower breached a duty to the foreclosing party. That is because the foreclosing party has no interest in the loan and has no legal authority to even represent the owner of the debt.

And THAT is because the owner of the debt is a group of investors and NOT the REMIC Trust that funded the loan. Thus the Trust, unfunded had no resources to buy or fund the origination of loans. So they didn’t buy it and it wasn’t delivered. Hence they can’t claim Holder in Due Course status because “purchase for value” is one of the elements of the prima facie case for a Holder in Due Course. There was no purchase and there was no transaction. Hence the suing parties could not possibly be authorized to represent the owner of the debt unless they got it from the investors who do own it, not from the Trust that doesn’t own it.

This of course raises many questions about the sudden arrival of “assignments” when the wave of foreclosures began. If you asked for the assignment on any loan that was NOT in foreclosure you couldn’t get it because their fabrication system was not geared to produce it. Why would anyone assign a valuable loan with security to a trust or anyone else without getting paid for it? Only one answer is possible — the party making the assignment was acting out a part and made money in fees pretending to convey an interest the assignor did not have. And so it goes all the way down the chain. The emptiness of the REMIC Trust is merely a mirror reflection of the empty closing with homeowners. The investors and the homeowners were screwed the same way.

BOTTOM LINE: The investors are stuck with ownership of a debt or claim against the borrowers for what was loaned to the borrower (which is only a fraction of the money given to the broker for lending to homeowners). They also have claims against the brokers who took their money and instead of delivering the proceeds of the sale of bonds to the Trust, they used it for their own benefit. Those claims are unsecured and virtually undocumented (except for wire transfer receipts and wire transfer instructions). The closing agent was probably duped the same way as the borrower at the loan closing which was the same as the way the investors were duped in settlement of the IPO of RMBS from the Trust.

In short, neither the note nor the mortgage are valid documents even though they appear facially valid. They are not valid because they are subject to borrower’s defenses. And the main borrower defense is that (a) the originator did not loan them money and (b) all the parties that took payments from the homeowner owe that money back to the homeowner plus interest, attorney fees and perhaps punitive damages. Suing on a fictitious transaction can only be successful if the homeowner defaults (fails to defend) or the suing party is a holder in due course.

Trusts Are Empty Paper Bags — Naked Capitalism

student-loan-debt-home-buying

Just as with homeowner loans, student loans have a series of defenses created by the same chicanery as the false “securitization” of homeowner loans. LivingLies is opening a new division to assist people with student loan problems if they are prepared to fight the enforcement on the merits. Student loan debt, now over $1 Trillion is dragging down housing, and the economy. Call 520-405-1688 and 954-495-9867)

The Banks Are Leveraged: Too Big Not to Fail

When I was working with Brad Keiser (formerly a top executive at Fifth Third Bank), he formulated, based upon my narrative, a way to measure the risk of bank collapse. Using a “leverage” ration he and I were able to accurately define the exact order of the collapse of the investment banks before it happened. In September, 2008 based upon the leverage ratios we published our findings and used them at a seminar in California. The power Point presentation is still available for purchase. (Call 520-405-1688 or 954-495-9867). You can see it yourself. The only thing Brad got wrong was the timing. He said 6 months. It turned out to be 6 weeks.

First on his list was Bear Stearns with leverage at 42:1. With the “shadow banking market” sitting at close to $1 quadrillion (about 17 times the total amount of all money authorized by all governments of the world) it is easy to see how there are 5 major banks that are leveraged in excess of the ratio at Bear Stearns, Lehman, Merrill Lynch et al.

The point of the article that I don’t agree with at all is the presumption that if these banks fail the economy will collapse. There is no reason for it to collapse and the dependence the author cites is an illusion. The fall of these banks will be a psychological shock world wide, and I agree it will obviously happen soon. We have 7,000 community banks and credit unions that use the exact same electronic funds transfer backbone as the major banks. There are multiple regional associations of these institutions who can easily enter into the same agreements with government, giving access at the Fed window and other benefits given to the big 5, and who will purchase the bonds of government to keep federal and state governments running. Credit markets will momentarily freeze but then relax.

Broward County Court Delays Are Actually A PR Program to Assure Investors Buying RMBS

The truth is that the banks don’t want to manage the properties, they don’t need the house and in tens of thousands of cases (probably in the hundreds of thousands since the last report), they simply walk away from the house and let it be foreclosed for non payment of taxes, HOA assessments etc. In some of the largest cities in the nation, tens of thousands of abandoned homes (where the homeowner applied for modification and was denied because the servicer had no intention or authority to give it them) were BULL-DOZED  and the neighborhoods converted into parks.

The banks don’t want the money and they don’t want the house. If you offer them the money they back peddle and use every trick in the book to get to foreclosure. This is clearly not your usual loan situation. Why would anyone not accept payment in full?

What they DO want is a judgment that transfers ownership of the debt from the true owners (the investors) to the banks. This creates the illusion of ratification of prior transactions where the same loan was effectively sold for 100 cents on the dollar not by the investors who made the loan, but by the banks who sold the investors on the illusion that they were buying secured loans, Triple AAA rated, and insured. None of it was true because the intended beneficiary of the paper, the insurance money, the multiple sales, and proceeds of hedge products and guarantees were all pocketed by the banks who had sold worthless bogus mortgage bonds without expending a dime or assuming one cent of risk.

Delaying the prosecution of foreclosures is simply an opportunity to spread out the pain over time and thus keep investors buying these bonds. And they ARE buying the new bonds even though the people they are buying from already defrauded them by NOT delivering the proceeds fro the sale of the bonds to the Trust that issued them.

Why make “bad” loans? Because they make money for the bank especially when they fail

The brokers are back at it, as though they haven’t caused enough damage. The bigger the “risk” on the loan the higher the interest rate to compensate for that risk of loss. The higher interest rates result in less money being loaned out to achieve the dollar return promised to investors who think they are buying RMBS issued by a REMIC Trust. So the investor pays out $100 Million, expects $5 million per year return, and the broker sells them a complex multi-tranche web of worthless paper. In that basket of “loans” (that were never made by the originator) are 10% and higher loans being sold as though they were conventional 5% loans. So the actual loan is $50 Million, with the broker pocketing the difference. It is called a yield spread premium. It is achieved through identity theft of the borrower’s reputation and credit.

Banks don’t want the house or the money. They want the Foreclosure Judgment for “protection”

 

%d bloggers like this: