Rescission is a Test of Persistence

The “free house” mythology will have become reality. That is what happens when you break the laws governing deceptive and predatory lending.
… for those who don’t give up, the reward is substantial when TILA rescission is reluctantly recognized by the Courts as effective upon mailing.

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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The current judicial climate regarding TILA Rescission is that it doesn’t count — it means nothign, does nothing and cannot be sued to defeat foreclosure. But the signs are all there showing that the banks are bracing themselves for the real consequences of rescission in which borrowers receive the draconian remedy stated in the statute. For those borrowers who persist, there will ample reward despite the dark clouds that appear in the rear view window.
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On the horizon there are positive signs that the Congressional intent in the Truth in Lending Act will been enforced, to wit: “lenders” and “pretender lenders” will lose both their security interest in residential property and the right to collect any debt. The “free house” mythology will have become reality. That is what happens when you break the laws governing deceptive and predatory lending. And that is what happens when Congress decides what should happen to you when you break those laws.
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The current argument is that if the rescission was sent more than 3 years after consummation, it does not count as anything and the judges can ignore it.
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There is absolutely no doubt that judges want to adopt that  reasoning. But the three year limitation is not the only restriction. The same statute says that if the loan is a purchase money mortgage, TILA rescission is not an option. And there are other restrictions. The whole point of the Supreme Court decision was to say that the rescission WAS effective when it was mailed and not when a court ruled on whether it should have been sent in the first place. And there is a provision in the statute to allow an “injured party” (creditor?) to request a court to adjust the procedures that follow the mailing of the rescission.

So if the court was just saying that it was obvious that this was beyond the three year limitation. Or that it was obvious that this was a purchase money mortgage and that therefore the rescission was void or could be ignored, such a court would be reversing the Supreme Court decision — something no court in our country is empowered to do and is in fact prohibited from doing under the US Constitution. Obviously if the rescission was void there would be no limitation.

But the Supreme Court decision basically says that there is no such thing as a void rescission under the truth in lending act. Whether the borrower is wrong or right, it is effective when mailed and the “lender” (creditor) has 20 days to comply — or, to file an action to vacate the rescission because the borrower has unfairly canceled the loan transaction. The whole point was to make it easy on the borrower who felt that they have been the victim of deceptive or predatory lending. The wording of the statute was carefully crafted.

The obvious intention, which can be seen in many other cases that construe the statute, was to provide a mechanism by which a borrower could throw the burden to justify the practices leading up to the “loan” on to the “lenders.”

Both the statute and the Supreme Court decision make it clear that the borrower does not need any resources (except a pen, paper and a stamp) to trigger the procedures under the rescission statute in the truth in lending act.

The consequence of inaction by the “lenders” are very harsh and even draconian. The idea behind doing this was to force lenders into policing themselves, or upon failing to do that, suffer the loss of the security instrument and even the loss of the right to seek repayment. This legislation was a compromise. Some people wanted the creation of a new agency that would be the size of the Internal Revenue Service to review and police loan transactions. This distrust of the banks goes back to the 19060’s when the TILA legislation was initially enacted.

As I have posted on the blog, even lawyers who represent the banks agree in published articles that ignoring a notice of rescission could come a huge cost. Like me, they do not believe that the current environment will continue wherein Judges ignore the notice of rescission. If the bank lawyers agree with what I have been writing, it would seem that we should take this much more seriously in the expectation that the current climate will change with respect to the sending of a notice of rescission and the recording of that notice in the public records.

I agree that the current climate it is virtually entirely negative. And most people who have sent a notice of rescission and most people who have recorded a notice of rescission will probably never receive the remedy to which they are entitled. This may be because of lack of persistence, ignorance of the change in the judicial climate or because of limitations are upheld in going back in time to the moment of the sending of the notice of rescission. For those people who persist, I still believe that they will prevail in the end. And for those entities who who have identified themselves as creditors or lenders, they will be barred from enforcing the underlying debt for failure to respond to the notice of rescission.

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BOTTOM LINE: For those who persist on the issue of rescission, the ultimate remedy under TILA rescission is coming — mostly too late for those who have had their homes go through forced sales that were void because the loan transaction and the loan documents had been canceled. Many of them have “moved on” albeit hobbled by the bite of the banks in the era of false securitization and fictitious appraisals. But for those who don’t give up, the reward is substantial when TILA rescission is reluctantly recognized by the Courts as effective upon mailing.
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Looming Title Problems from Fabricated, Fraudulent Forged Documents

The one thing that is perfectly clear is that at some point the state legislatures who govern title to property already have a huge problem brewing under their feet. There is no doubt in my mind, that the solution will follow the example of the Murphy Act in Florida when title became unintelligible some 80 years ago.

The new acts will essentially reset title as of a certain date. All the previous illegal and potentially criminal actions will be ignored. All the people who were swindled out of their life savings will also be ignored, because in the end it is the banks who control legislation, not the people.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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see http://www.vice.com/read/when-you-buy-a-house-but-dont-actually-own-it

You have two problems looming here.

The first and largest problem is that most, nearly all, of the foreclosures were void and fraudulent. The credit bid was accepted from a party who was not the creditor. THAT probably means that any deed on foreclosure was and is void. In some states there is a “statute of limitations” on the void title which is waived if you don’t try to make it right before the one-year statute runs out. In Florida, after one year, you can get damages (i.e., money) but you can’t reclaim your title even from a void, fraudulent foreclosure. Hence the Florida legislature institutionalized fraud in exchange for campaign donations.

The second problem is even worse and might not be correctable by legislation or even a court order. For those who sent a notice of rescission and the “lender” did nothing, there is no doubt that if the rescission was sent within 3 years of the fabricated “closing” that the nonexistent “loan contract” was canceled and the note and mortgage were rendered void as of the date of mailing of the notice of rescission.

Under Federal Law that notice of rescission rendered the mortgage or deed of trust void along with the note. Therefore any action on the loan contract, the note or the mortgage or deed of trust after rescission is void because those “instruments” are void. Void=Nothing. As far as I have been able to determine, there is no statute of limitations on “nothing.”

It gets worse. If the homeowner recorded the rescission, then according to State law, there is notice to the world that title derived from the mortgage is void. And there is no statute of limitations on that either, as far as I can tell.

Anyone who has taken title arising from either of the above scenarios has no title. If and when the day comes that they are forced to defend the illusion of their “title” they will quickly find out that the title insurer will be of no help and will deny coverage. And the same holds true for lenders — but the lenders don’t care because their goal is merely to perpetuate the illusion of securitization.

Nearly all the foreclosures in the past 10 years fall under the first category, the second category or both. Any legislation that deprives the owner of property without due process (i.e., judicial action) violates the 14th Amendment to the constitution.

Judicial action is void if it is based upon nonexistent facts. The facts are nonexistent if they were never proffered in court or found, based upon competent evidence to be true, by the trier of fact. That is missing from virtually all foreclosures.

Accordingly, it is my opinion that this another situation where the constitution be damned. The courts and legislatures are continuing to advance nonsense: the pretense of valid loan contracts, valid notes, valid mortgages and valid foreclosure sales to valid creditors submitting a valid credit bid.

Ask these lawmakers and law interpreters four questions:

  • did you hear or see any evidence that identified the party to whom the payments from the borrower were forwarded?
  • If not, why did you assume that such a party existed and had authorized the parties in court to act on collateral for the benefit of the real creditor?
  • did you hear or see any evidence that connects the real creditors with the parties who appeared in court?
  • If not, why did you assume that such a connection existed with an unidentified entity?

 

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

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

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

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see B246193A-Kehstgar

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

rescission-600x400-600x330
I was recently requested to review a 6th Circuit Opinion in which the court stated that the rescission was barred by res judicata — i.e. that the matter had already been litigated and that the homeowner was therefore barred from bringing it up again.
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The Court never considered that it was wrong in the first place and that the decisions that ignored the rescission were themselves void for lack of subject matter jurisdiction. The Court started with the premise that the bank must win on this rather than from the point of view that the law should be applied, not personal preferences. Thus such decisions come down to “because I said so” rather than through any legal analysis.
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I think the court has missed the point completely. A deed has no statute of limitations. Even a mortgage deed or deed of trust has no statute of limitations. It only expires after the contractual terms end. A rescission, especially if it is recorded, has no expiration. All of these things can ONLY be removed by (a) a proper pleading (b) proof that the offending document should be canceled and removed from the chain of title and (c) filed within the time limit prescribed by statute.
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The court has turned this on its head. There is no lawsuit required to make rescission effective. There is no tender. There are no conditions whatsoever — see Jesinoski v Countrywide (SCOTUS). It is effective as a matter of law and if recorded remains a permanent impediment to any subsequent instrument claiming clear title (as though the rescission did not exist) in any instrument executed or recorded after the rescission was sent and/or recorded.
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The borrower is obligated to do nothing. The borrower can do nothing because even if it was the borrower that wanted to remove the rescission it would need to be done through court procedure. Otherwise, any person properly relying upon what appears in the title chain in the county records might act based upon their proper belief that the rescission exist would then find themselves having spent or lent money to a homeowner who in fact either had no title to the home or was already encumbered by the very instruments that were rendered void by operation of law. I can already see how foreign investors and lenders could get stuck by that having read the Federal, State and local laws and thinking themselves perfectly protected, and ending up with nothing.
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The time limit is set on the bank, not the borrower. It is set by the statute as 20 days from receipt of the rescission to (1) comply or (2) file suit to vacate or cancel the rescission. This is a burden on the bank, not the borrower. To construe the statute any other way would be to violate the terms of the statute and to violate the specific explicit instructions from the US Supreme Court. Any decision or ruling that the bank or creditor could contest after 20 days would mean that the rescission is not effective when mailed as set forth by the Statute and Jesinoski. Such a ruling would mean that the rescission is not effective by operation of law; it would mean that the rescission is effective ONLY if and when the bank files suit to vacate or cancel the rescission and loses. How one would logically say that the rescission is not effective until there is a lawsuit is incomprehensible.
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Rescission therefore is a fact and not a claim, pleading or defense. It may be raised as a defense merely to show that the court lacks subject matter jurisdiction, to wit: that the note and mortgage were rendered VOID by operation of law and as specifically stated in Reg Z which carries the full force of law. It follows that nobody can make a claim based upon void instruments. It also follows that the void instrument (i.e., the mortgage or deed of trust) must be removed from the chain of title as a void instrument. Hence quiet title is appropriate.
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Rescission is an event and the recording of it preserves the rights and benefits of rescission against the whole world. What courts and lawyers have failed to comprehend is that the rescission may not be ignored or even canceled or vacated or waived by the homeowner who sent it and recorded it. With a deed you can file a corrective deed but all parties to it must join in the correction. Otherwise it remains. The converse is also true. if as a matter of law the mortgage or deed of trust has been rendered void by operation of law, then it is void for all purposes and against all claims to the contrary from all claimants of every kind, especially if it is recorded.
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The court here has essentially adopted the strategy of the banks. By creating multiple layers of transmission, assignment, delivery and endorsement it gradually appears that the end successor indeed owns the debt, loan, note and mortgage. But if you start at the base of the chain and come to realize that the originator was not the lender and that the first transferee was merely a conduit who paid no money either for the origination nor the acquisition of the loan, one can easily see how the borrower’s rights have been egregiously violated.
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This court has done the same thing. It is taking the original ruling that the erroneous ruling (without subject matter jurisdiction) ignoring but not removing the rescission somehow was valid because the court later said that the claims as precluded by having been previously litigated,a decision later affirmed by appellate court. They can say it but it is erroneous, false and void for lack of subject matter jurisdiction. This is the rule of men rather than the rule of law. If the trial court had ignored the deed, mortgage or deed of trust without proper pleading and proof of a claim upon which such relief could be granted, the same result would apply.
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This is not some technicality. Allowing parties who have no interest or injury to apply for relief that properly belongs to other parties opens up floodgates of malicious practices in the marketplace in which the courts will face in full circle the absurdity of their own prior rulings when they believed that the banks must be right even if what they did was wrong.
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That the previous decisions considered the arguments of the homeowner and rejected them is irrelevant as long as the issue is lack of subject matter jurisdiction. If there was no such jurisdiction then none of the decisions are effective as a matter of law.

Beware of Thieves and Con Artists

I know that the first line of thieves and con artists are viewed by many as the banks and the “servicers” and the “trustees.” But the second wave are those who prey on the emotional turmoil of homeowners and get them to deed their homes into some sort of convoluted entity that will (1) shred the homeowners credibility in court and (2) essentially allow the new thief to get into your living room before the old thief has a chance to do so. In all events none of these schemes will ever do anything substantive to save a home, although some of the schemes may delay the judgment and sale for a short period of time.

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

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With the single exception of recording a notice of rescission I don’t see any plan by which a homeowner can preserve their rights in a foreclosure that is allowed by a judge to proceed. In nonjudicial states there MIGHT be one more: filing a corrective substitution of trustee returning the original trustee to the deed of trust. Anything in the chain of title on public records that is properly filed may well give homeowners a leg up and preserve rights when the issue of title finally comes front and center. The banks are proceeding under cover of title insurance. But in my opinion that cannot last and the title companies will file for bankruptcy protection in many cases.

It will be interesting to see what happens later when courts are faced with the consequences of their own decisions — creating and augmenting a title nightmare. Ultimately I think the rescission will have the effect that Federal law requires. Until then homeowners must seek to preserve their rights. They might find out years later that they still own the home they thought was long gone. This specific strategy requires very little money and certainly does not require deeding your home to another person leaving them to claim the asset and leaving you with the same apparent “debt” you had before.

People facing foreclosures are generally in severe emotional distress. Their home and their lifestyle are being threatened and the likelihood they will lose is in the statistics. As a result their judgment is impaired. In their desperation they will grasp at straws potentially destroying any hope of saving their home.

Although far more homeowners are winning their cases than a few years ago, it is nonetheless true that the deck is stacked against them. Some people, meaning well, have attempted to reverse the schemes from the banks by doing the same crazy documentation tactics that the banks.

Those schemes have failed because of the assumption by the judges that when the banks do it, which might include fabrication and forgery, they are merely patching up the paperwork on a valid debt. When homeowners do it, as Judges see it, it is to escape a legitimate debt. Both assumptions are wrong. Those judges are wrong but it seems counterintuitive.

This underscores the need for a lawyer: just because you found a statute or case that shows you are right and the bank, servicer or trustee is wrong doesn’t mean you will win. Trial court orders and judgments are final even if they are wrong. If you fail to appeal or preserve your rights in some other way, they stay final. Going to a smooth talking nonlawyer is likely the first step in jumping off of a legal cliff. BUT if the nonlawyer is attached to an actual lawyer, the outcome changes.

The problem with some of the schemes is that they are not per se illegal. But they lead to one result — the homeowner pays money and then loses the house. The moral of the story is don’t go with someone who is offering a nonexistent magic bullet. If it is so crispy clear and it works you would have heard about it already. Use a lawyer. Get references. Choose wisely.

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

 

RESCISSION Revalidated in CA Decision

1sT Appellate District US Bank v Naifeh: “… we conclude that a borrower may rescind the loan transaction under TILA without filing a lawsuit, but when the rescission is challenged in litigation, the court has authority to decide whether the rescission notice is timely and whether the the procedure set forth in the TILA (sic) should be modified in light of the facts and circumstances of the case.”

The jig was up when the Jesinoski decision was rendered — courts cannot re-write the statute, although they can consider minor changes in procedure whose purpose is to comply with the statute, not ignore. it.

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

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see US BANK VS NAIFEH

In a carefully worded opinion at least one appellate court seems to be moving closer to the view I have expressed here on these pages. But they still left some simple propositions unclear.

It remains my opinion that a recorded rescission forces those who would challenge it to file suit to remove the rescission from the title record. In that suit they would need to plead and prove standing — without using the note or mortgage to do it because rescission renders them void at the moment the letter of rescission is mailed..

  1. The decision clearly says that for the rescission to be effective (deriving its authority from 15 USC §1635 and the unanimous SCOTUS decision in Jesinoski v Countrywide), the borrower need NOT file suit. That means it is effective when mailed (NOT FILED) just as the statute says and just as the late Justice Scalia penned in the Jesinoski case.
  2. The decision anticipates a challenge to rescission — which in and of itself is recognition that the rescission IS effective and that something must be done about it.
  3. But the court does not clarify what is meant when it said “when the rescission is challenged in litigation.” Clearly the decision stands for the proposition that the rescission stands as effective unless challenged in litigation. The unanswered question is ‘what form of litigation?’
  4. If we apply ordinary rules of procedure, then the decision dovetails with my opinions, the statute and the US Supreme Court decision. The rescission is effective when mailed. So the “challenge” must be “in litigation.” But whether that means a lawsuit to vacate or a motion challenging the rescission is unclear. A “motion challenging the rescission” is problematic if it does not set forth the standing of the party making the challenge and if it does not set forth the plain facts that the rescission, under law, is already effective but should be vacated, then it is trying to get the court to arrive at the position that the rescission can be ignored even if it is recorded (a condition not addressed in the opinion).
  5. The claimant challenging the rescission must state a cause of action, if the rescission is recorded, that is in essence a quiet title claim that needs to be framed as an original complaint in a lawsuit. So far the banks have been successful in getting trial judges to IGNORE the rescission rather than remove it as an effective instrument, whether recorded or not. This only compounds title problems already present.
  6. The procedural oddity here is that in foreclosure litigation the court might conclude (erroneously in my opinion) that the beneficiary under the deed of trust had standing to substitute trustee, standing to to have the trustee record a notice of default, and standing to record a notice of sale.
  7. BUT once the rescission is effective, there is absolutely no foundation for a claim of standing based upon the void note, the void mortgage and the consequential void assignments, which even if they were not otherwise void, are void now because the assignment is purporting to transfer something that no longer exists.
  8. Standing vanishes if it is dependent upon presumptions applied from the assignment, endorsement and other attributes wherein false statements are made concerning purchase and sale of the note or mortgage. The note and mortgage are void the moment the rescission is mailed. No reliance on the mortgage, note or any transfer of same can constitute standing, since those documents, as a matter of law, no longer exist.
  9. Hence STANDING TO CHALLENGE RESCISSION must logically be dependent upon the ability of the challenger to affirmatively plead that they own the debt or obligation and to prove it at a hearing in which evidence is produced. This is the holy grail of foreclosure defense. We know that 99% of the foreclosers do NOT qualify as owners of the actual debt or obligation. They are traveling on legal presumptions as alleged “holders” etc. under the UCC. If the note and mortgage don’t exist then the status of holder is nonexistent and irrelevant.
  10. This court further leaves us in a gray area when it correctly reads that portion of the statute giving the court authority to consider the options, procedurally, but incorrectly states that one of those options is that a Federal Statute that preempts state law could be “modified in light of the facts and circumstances. This is NOT contained in either the statute or the Jesinoski decision. This court is putting far too much weight on the provision of the statute that allows for a petition to the court at which the court could change some of the procedural steps in complying with rescission, and possibly by implication allowing for a challenge to the rescission in order to vacate the legal effectiveness of the rescission.
  11. ANY DECISION ON “PROCEDURE” THAT NULLIFIES THE EFFECTIVENESS OF THE RESCISSION WHEN MAILED IS ERRONEOUS.  Any such decision would effectively be eviscerating the entire statute and the opinion of the US Supreme Court. The simple rule of thumb here (heuristic reasoning) is that the rescission is and always will have been effective when mailed. The parts of the statute that deal with procedure can only be related to a party who claims to be the creditor (owner of the debt or obligation) who intends to comply.
  12. Since tender is expressly excluded in the statute and the Jesinoski decision, the change can not require the borrower to tender money — especially when the statute says that no such demand need be considered by the borrower until there is full compliance with the rescission — return of canceled note, release of encumbrance and payment to the borrower of all money ever paid by the borrower for principal, interest, insurance, taxes, and fees.
  13. Hence the changes are limited perhaps granting additional time, or maybe even to credits against what might be due from the homeowner but even that looks like a stretch. The committee notes and subsequent decisions clearly state that the intent of Congress was to prevent any bank from stonewalling the effectiveness of a rescission, which is what judges have been doing despite the Jesinoski decision and the clear wording of the statute.
  14. And this is how we know that the challenge, if brought, must be within the 20 days available for the creditor, “lender” etc to comply with the rescission. Any other interpretation would mean that the rescission was NOT effective upon mailing and would also mean that the owner of the property cannot get a substitute mortgage to pay off any legitimate claim from a true creditor. Such interpretations, while apparently attractive to bank lawyers and judges, are directly contrary to the express wording of the statute and directly contrary tot he express wording of the Jesinoski decision, decided unanimously by SCOTUS. Hence ANY CHALLENGE outside the 20 days is barred by the statute. Just like any action to enforce the TILA duties against the “lender” must be brought within one year of the mailing and receipt of the rescission.
  15. The failure of either the “lender” to comply or the borrower to enforce simply means that after one year, the rescission is still effective (meaning the note and mortgage are void) the claim for enforcement of the duties of the lender is extinguished, and the financial claim of the lender is extinguished. Hence, the infamous free house — not caused by sneaky borrowers but caused instead of malfeasant banks who continue to use their influence to get judges to re-write the law.
  16. But regardless of how one looks at this decision, the Jesinoski decision or the statute one thing is perfectly clear — vacating the rescission is strictly dependent upon timely filing of a challenge in litigation and a hearing on evidence, because the legal presumptions used in determining standing are no longer available in the absence of the the note or mortgage, which were irretrievably rendered void upon mailing of the rescission.

The banks and servicers have so far been successful in pulling the wool over judges eyes, perhaps because judges have long disliked TILA and especially TILA rescission. The jig was up when the Jesinoski decision was rendered — courts cannot re-write the statute, although they can consider minor changes in procedure whose purpose is to comply with the statute, not ignore. it.

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Quiet Title Revisited: Not Quite a Dead End

Void means that the instrument meant nothing when it was filed, not that it is unenforceable now.

 

I know how hard it is to let go of something that you really want to believe in. But for practical reasons I consider it unwise to continue on the QT path until we can find a way to get rid of the void assignment. That unto itself might a form of quiet title action and it is far easier to do. The allegation need only be that neither the assignor nor the assignee (a) had any right, justification or excuse to claim an interest in the recorded mortgage and (b) neither one was ever party to a completed transaction in which either of them had paid value for any interest in the recorded mortgage. Hence the assignment is void and should be removed from the chain of title reflected in the county records. So that takes care of one of several problems and the attack does not seek to remove the mortgage — yet.

 

Quiet title is a very limited remedy. In nearly all cases if the facts are contested it almost automatically means that there is no quiet tile relief available. It is meant to remove wild deeds or any other void (not voidable) instrument. Void means that the instrument meant nothing when it was filed, not that it is unenforceable now.

I contributed to the mystery of quiet title because it was apparent that the mortgage was void because it never named the true lender. In fact the existence and identity of the true source of funds for the transaction was intentionally withheld from the borrower leaving the mortgage with only one party instead of two.

 

The problem many courts are having with this is that the mortgage might still be subject to reformation that would insert the correct name of the actual lender (theoretically, potentially reformation). The fact that there is no such creditor whose name can be inserted does not make the mortgage void. It makes it voidable. Actually proving that there is no such creditor won’t be easy since only the banks have the information that shows that.

 

If there are any future events that could revive the mortgage deed, then quiet title can’t work. Add to that the fact that judges are not treating these attacks seriously and routinely ruling for the banks and you have a what appears to be a dead end.

 

All that said, there ARE causes of action that could attack the void assignment and the voidable mortgage in which the court could theoretically declare that in the absence of information sought from the defendants, who appear to be the only potential claimants, the mortgage is THEN declared void by court order, THEN a second count in quiet title would be in order. I cannot emphasize enough the fact that Judges are going to be very resistant to this but I think that appellate courts are starting to understand what happened with false claims of securitization.

 

Essentially, the Court must state that:

  1. The mortgage failed to name the correct party as lender.
  2. That failure makes the mortgage voidable.
  3. Despite publication and notice, there are no parties who could answer to the description of the creditor whose name should have been on the mortgage.
  4. The mortgage is therefore void
  5. Court declares title to be vested in the name of Smith and Jones without any encumbrance arising out of the mortgage recorded at Page 123 Book 456 of the public records of XXXX County, Florida.
 This of course directly challenges the judicial notion that once the homeowner receives money, it is a loan, it is enforceable and it doesn’t matter who comes into court to enforce it. To say that this judicial “law” opened the door to mayhem and moral hazard would be an understatement. Using the opinions written by trial judges, appellate judges and even Supreme Court justices, people who like to “leverage the system” have seized on this obvious opening to steal receivables from the rightful recipient — with no negative consequences. They write a letter that appears on its face to be correct and valid. According to current practices this raises the presumption that the contents of the letter are true.
 Hence the self-serving letter creates the legal presumption that the writer is authorized to tell the debtor that the writer is now the owner of the debt and to direct payments to the “new owner.” This isn’t speculation. Starting in California this business plan is spreading across the country. By the time the rightful owner of the debt wakes up the Newco Debt Servicing company has collected or settled the account.
Since the presumption is raised that the thief writing the letter is authorized, the real party in interest cannot beat the defense of payment by a debtor who thought they were doing the right thing. Reasonable reliance by the borrower is presumed since the authority and the validity of the letter was presumed. And that is not just a description of some dirty rag tag gangsters; it is a verifiable description of what the banks have been doing for years with mortgage debt, credit card debt, student loan debt and every other kind of debt imaginable.
By the time the investors wake up and find out their money was not used to fund a trust or real business entity, their money is gone and they are at the mercy of the big time banks who will offer settlements of claims that should have resulted in jail time for the bankers. Instead we have literally authorized small time crooks to emulate the behavior of the banks thus throwing the marketplace into further chaos.
So if you start off knowing that the banks can never come up with the name and contact information of a creditor, then you begin to see how there are some attacks on the position of banks that could have enormous traction even though on their face those strategies look like losers.
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