Source: https://giftoftruth.wordpress.com/foreclosures/
Timestamp: 2019-04-23 08:38:46+00:00

Document:
We, the people have the inalienable right to freedom, life, property and the pursuit of happiness. It is a principle of law that every wo/man’s house is his/her castle; yet, governments of almost every nation and their courts, ignore the widespread abuse by international banks and financial services providers and the resulting eviction and foreclosure mills pandemic; and, are not protecting their people from corporate and economic tyranny which benefits only the less than 0,1% global elite.
Evictions, foreclosures and repossessions are an infringement on basic, unalienable people rights; and, neither banks, nor courts of any country are curbing their own behaviour; none, bar a very few are doing anything about the pandemic; while the endless lists of evicted and foreclosed people continues to grow to crisis levels; without relief or remedy on the horizon unless we, the people ourselves take action.
This amounts to the emancipation of all Americans from personal, national and state debt, purportedly owed to the Federal Reserve Bank. Every American owes it to himself, his country, and to the people of the world, to study and understand this decision, for upon this decision hangs the question of freedom or slavery for the world.
The bank brought an action to recover possession of the property to the Justice of the Peace Court at Savage, Minnesota. The first 2 Justices were disqualified by Affidavit of Prejudice; the first by Mr. Daly, the second by the bank, and a third judge refused to handle the case. It was then sent, pursuant to law, to Martin V. Mahoney, Justice of the peace, Credit River Township, Scott County, Minnesota, who presided at a Jury trial on December 7, 1968.
The Jury found the Note and Mortgage to be void for failure to give any validity to the Sheriff’s Sale.
The banker testified about the mortgage loan given to Mr. Jerome Daly, and then Mr. Jerome Daly cross exemined the banker about the creating of money “out of thin air”.
…He freely admitted that his Bank created all of the Money or Credit upon its books with which it acquired the Note and Mortgage of May 8, 1964. The credit first came into existence when the Bank created it upon its books by ledger entry. Further, he freely admitted that no United States Law gave the bank the authority to do this. There was obviously no lawful consideration for the Note. The Bank parted with absolutely nothing except paper and a bit of ink.
Justice Martin V. Mahoney then said, “IT SOUNDS LIKE FRAUD TO ME” and everbody in the court room nodded their heads indicating that they agreed with Jusice Martin V. Mahney.
…No complaint was made by the banker that the bank did not receive a fair trial. From the admissions nade by Mr. Lawrence V. Morgan, the path of duty was clearly made and very direct and clear for the jury. Their verdict could not reasonably have been otherwise. Justice was rendered completely, and without denial, promptly, and without delay, freely, and without purchase, comfortable to the laws in this Court on December 7, 1968.
This was the first time the question has been passed upon in the United States. This decision is one of the great documents of American history. It is a huge cornerstone wrenched from the temple of Imperialism — one of the solid foundation stones of Liberty.
Banks create money out of thin air. That was the verdict.
The “Credit River” decision (was) where a jury in a Justice of the Peace court trial found that Federal Reserve Notes were not Moneys of Account of the United States and the court in his opinion found them to be ‘FRAUDS’.
This case was on Dec. 7, 1968 before Justice Martin V. Mahoney of Credit River Minn. and the case was about “Failure of Consideration” by a bank in a mortgage foreclosure.
And of course since the Federal Government had been given only 18 to 20 powers under the Constitution it was a “Limited Government”, and according to the 9th and 10th amendments the states and the people were Sovereign, and retained for themselves all of the other rights not specifically given to the Feds.
When news of the jury’s decision was picked up by Vern Myers and written about in his newsletter, “Myers Finance and Commerce” and sent world wide the whole world was afraid to accept FRAUDS and it got so big that they had Justice Mahoney killed within 6 months and Jerome Daly and Bill Brexler had a couple of close calls too.
The jury went out and returned a verdict in favor of Jerome Daly on the basis that the Federal Reserve Notes were not legal and valid consideration for a mortgage note contract.
Five years ago at this time, the Financial Crisis Inquiry Commission (FCIC) presented the President and Congress with its final report on what caused the 2008 financial meltdown that devastated our economy and millions of American families. The report concluded that the financial crisis was avoidable and was caused by widespread failures of regulation, reckless risk taking on Wall Street, and a systematic breakdown in ethics and accountability.
The FCIC’s report included evidence of industry wide fraud and corruption in the mortgage markets, from loan origination to Wall Street’s bundling and sale of mortgage securities to investors. One study obtained by the Commission placed the losses resulting from fraud on mortgage loans made between 2005 and 2007 alone at $112 billion.
New Republic contributor David Dayen’s book Chain of Title focuses on three individuals in South Florida—cancer nurse Lisa Epstein, car dealership worker Michael Redman, and Lynn Szymoniak, a lawyer specializing in insurance fraud— who stumbled upon the biggest consumer fraud in American history. They did so after they fell into foreclosure, and realized that all the documents they were sent by their mortgage companies—the evidence being used to kick them out of their homes—were fake. It turned out that the industry broke the chain of title—the chain of ownership, really—on millions of securitized mortgages, and were using false documents to cover it up.
Every Bubble Bursts. The banks are now struggling to find people who will “find” nonexistent documents without expressly telling their superiors at the bank that the “found” documents were fabricated. The evidence is all over the internet as banks troll for prospective employees who will get their hands dirty and be prepared to get thrown under the bus should the malfeasance be discovered.
The documents are not merely missing. They do not exist. And without the critical documents required in every foreclosure, there can be no foreclosure. The documents must be fabricated because they don’t exist. The documents don’t exist because they were actually intentionally destroyed and because the banks have no interest in the property, the alleged loan, the “original” note (“missing” in most cases), the mortgage or the debt itself. Many documents existed but were destroyed by the banks.
If pushed to open their books we would find a complete absence of any financial transaction in which the banks or their pet trusts were involved. Up until recently the banks were able to get their employees to execute documents that were fabricated for the purposes of presentation in court. But the number of people who are willing to do that is diminishing. Bank employees sense the impending disaster for the banks and they don’t want to take the blame even if it costs them their job.
The entire bank scheme, as I previously reported, is based upon the ability to use legal presumptions. These presumptions create an opportunity for epic fraud and theft. If a document is facially valid, the burden shifts to the homeowner to rebut the presumption that it is indeed a valid, authentic document. But now homeowners are hiring forensic document examiners who are showing that the document presented is not the original even if it looks that way. More and more homeowners, when presented with a “blue ink” document will say they don’t know if that particular signature is their own signature because they know that the documents and signatures are being fabricated. The bank’s witness in court is treading the fine line between ignorance and perjury when they say that the note is the original. The same holds true to bogus assignments, indorsements (“endorsements”), powers of attorney and other documents the banks use to avoid being required to prove their case without the presumptions.
So the banks, without using their own names, are posting job openings for what 4closurefraud.com calls “time travelers.” People get hired for their willingness to create documents that appear to have been prepared and executed years ago. This is required because if there was no transaction years ago, then the sham is exposed — the “loan contract” between the homeowner and the originator never existed. And so when the originator endorses or assigns the note or mortgage to an undisclosed third party, the assignment is completely and irrevocably void as coming from an entity that never owned the loan but was merely named as the Payee or Mortgagee.
BUT if the original loan documents look valid, and the alleged transfers of the loan look valid, then the burden shifts to the homeowner to rebut the presumption that a real transaction took place between the homeowner and the originator and between the originator and the next party in the false chain of possession and ownership of the loan. This is why I have been relentless in insisting that discovery take place and be pursued aggressively. I have already seen many cases in which an order was entered requiring the banks to respond to discovery requests; in virtually all cases someone steps forward and settles with the homeowner. The only exceptions are where it is clear that the judge is going to rule for the banks anyway and will deny subsequent motions to compel the discovery that was previously ordered.
Of course the problem with the settlement is that the homeowner is being coerced into accepting a settlement that acknowledges some bank, servicer or trustee as actually having rights to collect or enforce the loan; since these parties are merely intermediaries who issue self-serving paper designating themselves as real parties in interest, such settlements could result in the homeowner being presented with claims later from the real source of funding in their loan. This is unlikely, but nonetheless possible. The only reason it is unlikely is that the real parties in interest are investors whose money was commingled with thousands of other investors in hundreds of trusts that never received any proceeds from their offering of mortgage backed securities that were neither mortgage backed or securities. The investors need a way to trace their money into the loans or, if they elect not to do so, to settle with the bank that cheated them in the first place with bogus mortgage bonds. There have been many such settlements, most of them unreported.
The fact remains that the “lender” is never part of any documented transaction. Hence the “lender” (the investors) enjoy none of the protections of a holder of a note nor the security of a mortgage. Fabricating documents and forging them is the only way of breathing life into the false loan contract that was documented, even if it never happened. And borrowers and their attorneys should take note that the entire loan infrastructure is an illusion that has been awarded judgments that pretend the illusion is real. we are either a nation of laws or a nation of men. Our Constitution makes us a nation of laws. This is our challenge. Do we allow bankers and politicians to turn back time on paper and treat them as though they are doing something right because NOW it is right because they declared it right, or do we reject that and apply rules of law that have existed for centuries for this very reason.
So for the people who are unemployed due to a recession that won’t really quit until the money stolen from the system is somehow replaced or clawed back, you have a job waiting for you if you can sleep at night knowing that if your activities are exposed, the bank will disavow your “irresponsible” actions, leaving you exposed to jail or prison.
Want to know how they popped up with an “original” note that looked like the original?
Start off with the extensive study performed by Katherine Ann Porter (now running for Congress in California) at the University of Iowa which concluded that at least 40% of all notes were destroyed immediately after execution. There is no reasonable explanation for this behavior except that the banks thought they could come up with a reproduction of the original that was so life-like that it would be taken as the original document — even by the borrower.
Later investigations showed that as many as 99% of all notes were destroyed, lost or sequestered without regard to who or what owned the notes or the debt.
In 2008 I advised all readers to not admit that they were being shown the original note in court. The narrative is that they could not possibly know whether the signature was original or a reproduction (nor how many times the “original” had been reproduced for transactional purposes).
Here is the main point: nearly all promissory notes being used in residential mortgage foreclosures are fabrications with the borrower’s signature forged by mechanical devices that can not only mimic the signature, and the flow of the handwriting, but also create depth of impressions because these mechanical means employ the use of an actual pen.
Practice Pointer: Discovery question; Please describe the conditions under which a mechanical device was used to reproduce documents and/or signatures relating to the subject alleged loan documents.
I think you are referring to the yellow dots which can be seen using a piece of blue Saran Wrap with an LED flashlight shining thru it. And it is a code which is peculiar to each printer, put I. Place in order to help detect counterfeiting of currency. First reported years ago by Mario Kenny on his blog.
So if you use this method, and find out that the “original document” was printed on a laser printer sold to a law firm 500 miles from your home, you can then assume it isn’t an original.
…just looking with a jewellers loupe revealed that it was printed (dots) and not signed. Lawyers are lazy ,, find their mistakes that reveal FRAUD.. and file complaints.
The age of the paper is another giveaway.
It is becoming clearer that the entire securitization fiasco is nothing but a giant Ponzi scheme feeding a shadow banking system. The big banks have created a system that circumvents all safeguards and protections for investors and consumers and is in fact an illegal racketeering operation taking in trillions of dollars offshore beyond the reach of regulators.
What and Who is a Creditor?
Practically everyone thinks they know what is a creditor even if they cannot identify who is the creditor. The reason that this is important is that the lawyers for the banks have created a divergence of the money trial and the paper trail. One is worth every cent claimed and the other is worth nothing, but for the repeated acceptance of a claim as proof in and of itself that a real transaction is referenced in the paper trail. In most cases, it isn’t.
The problem is very real when you look at it through a semantic lens.
What is a creditor? In court it has come to mean anyone with a claim. What it does not automatically mean is that the so-called creditor owns the debt. In normal situations before claims of securitization, ownership of the debt was presumed to be underlying the claim for money and thus the term creditor and owner of the debt were used interchangeably. That is what the TBTF banks were counting on and that is what they got.
The “creditor” in foreclosures is just a party holding paper. If the paper is fabricated or otherwise does not represent an actual transaction in real life it should be struck since the paper doesn’t prove anything. A note is evidence of the debt. It is not the debt. That is why we have the merger doctrine to prevent double liability. But the merger doctrine only operates if the Payee on the note and the owner of the debt are the same.
If the party seeking the foreclosure cannot produce the proof that the Payee and debt owner are the same, then the note lacks foundation and would be disallowed as evidence. The mortgage being incident to the note would therefore secure nothing and would be equally invalid and subject to being removed from the country records. More than a decade of experience shows that you won’t get anywhere at trial with his knowledge UNLESS you have conducted proper discovery and pursued it through motions to compel.
This type of analysis is not well received by courts who come to each situation with a bias toward what they perceive to be “the bank” who wouldn’t be in court if they were not the owner of the debt. But as we have seen in most instances “the bank” is not appearing on its own behalf but merely as a representative of what is most often a nonexistent common law trust. If there is any bank involved at all it must be the underwriter of “securities” that were issued under the name of an alleged REMIC Trust.
This continually reinforces the erroneous presumption that this is a case of a financial institution versus the homeowner; in fact, however, it is a case of an unlicensed unregistered private entity (the alleged REMIC Trust) outside the world of banking or finance whose existence as a trust entity is problematic at best, especially if the subject loan was never purchased by the Trust (acting through the Trustee).
Without the debt being entrusted to the Trustee on behalf of the Trust there is no trust. The existence of an assignment, absent evidence of purchase, merely means that the alleged Trust has “ownership” of the paper, not the debt. But in practice owning the paper raises a presumption of ownership of the debt — which is why so much effort must be made toward preventing the application of the presumption through objections to foundation that are themselves founded on prior discovery showing the failure or refusal to provide proof of ownership and in fact, proof the paper chain being congruent with the money trial.
Hence the claim of creditor status may be true as to the paper but untrue as to the debt or any other monetary transaction in the real world.
Extracts: The Golden Rule of Mortgage Foreclosure: the Uniform Commercial Code forbids foreclosure of the mortgage unless the creditor possesses the properly-negotiated original promissory note. If this can’t be done the foreclosure must stop. — Douglas Whaley, Professor Emeritus, The Ohio State University Moritz College of Law.
The problem with the great tidal wave of foreclosures has been that everyone (lawyers, judges and homeowners) have made great leaps of faith in accepting nonexistent facts. And the other problem is that all foreclosures are governed by the UCC which has been adopted in all 50 states as State Law. It is the source of all governing law as to the ability to negotiate the note, enforce the note and to enforce the foreclosure provisions contained in the mortgage.
Those who created the current infrastructure of what is erroneously referred to as securitization understood that nearly all lawyers — on or off the bench — retained practically nothing about the Uniform Commercial Code. They correctly predicted that the Judge would accept whatever the lawyer for the Bank said was in the UCC. The result was a startling array of decisions twisting and undulating in confusion about exactly who should be paid by the “borrower”, who could modify the obligation, who could enforce the note and who could foreclose.
…So the best minds in the judicial world came together and created a uniform code that everyone everywhere in the country would follow. It was originally a “National Code.” Like all new endeavors there were defects in the structure of laws in the first national code which was based upon centuries of common law decisions from trial and appellate courts. So the next generation of brilliant legal minds came together to fix the defects and create certainty in the marketplace for negotiable instruments and ancillary instruments like mortgages.
The “borrower” is required to sign the note before the loan is funded. Hence the loan contract is not commenced or consummated until funding. BUT the signing of the note created a negotiable instrument. After signing the note, the customary practice is for the closing agent to take delivery of the note. The closing agent thus becomes the first possessor, but without any right to enforce the note.
* Back when I stared law practice a representative of the lender was frequently present at closing. Once all the papers had been properly signed and money was received by the closing agent to fund the loan, the closing agent would physically deliver the note to the representative of the lender or transmit this valuable document (“cash equivalent”) to the lender or its authorized representative. If the lender was the funding source, the loan contract was complete and the the lender was the possessor of the note with direct rights to enforce — i.e., the lender was named on the note as payee just as one would write out a check.
* If the lender sold the loan into the secondary market, the lender would receive a sum of money the amount of which was determined by agreement between the buyer and the lender as seller. The buyer would receive physical possession of the note with an “indorsement” frequently spelled as “endorsement.” The endorsement would generally be made payable to the name of the buyer but it could be endorsed in blank, which would make the loan negotiable or enforceable by anyone who came into possession — even a thief, who could sue but not win once the facts of the theft came out.
* The above description is what most people have in mind when they think about loans today. But their thoughts are antiquated.
* Today, the “loan closing” starts in the usual way — the “borrower” is required to sign the note thus creating a negotiable instrument before any funding takes place. The party named as lender is never present and thus cannot take possession of the note. The closing agent is the first possessor with no rights to enforce. But theoretically the closing agent, if he or she was dishonest, could bring suit to enforce the note. Like the thief, the closing agent can sue but he cannot win. But I digress.
* What happens next depends upon whether the lender is an actual lender who might still be sending a representative to the “closing,” or is an originator who merely sells the loan product to the borrower. 96% of all “loan closings” over the past 15 years were “originator” loans.
* In the case of an originator the physical note, best case scenario, is sent to the party who was instructing the funding source, as a conduit. The originator is not generally allowed to touch, much less possess the note nor does it have any right of enforcement — because the originator has already signed an “Assignment and Assumption” Agreement before the borrower even applied for a loan. Hence the originator lacks both possession and any authority to negotiate the note.
* If the originator is still in business (check the Implodometer.com), at some time in the future a representative of the originator is called upon to execute an indorsement of the note. Lacking both physical possession of the note and the right to enforce it such an endorsement is void. Someone else possesses it and as it turns out, a party other than the possessor supposedly has (or claims) the right to enforce the note.
* The party with possession could theoretically acquire the right to enforce from the party who claims to have the right to enforce — and in today’s market that is exactly what happens. If the originator is not in business the signature nevertheless appears like magic as an officer of an institution that does not exist — but lacking the date on which it was executed. Or, as is usually the case we learned from the robo-signing, robo-witness, robo-officer scandals, we see some signature of a person who either didn’t exist or was not employed by any of the parties in the false paper trail. Neither the lawyer for the homeowner nor the homeowner is able to prove this because the information is in the hands of third parties who are not even parties to the foreclosure litigation.
* Further eviscerating the position of the eventual party who has conducted foreclosure proceedings is the documented fact (see Study by Catherine Ann Porter) that most and perhaps nearly all of the original notes were immediately and intentionally destroyed. Fabrications of the note were created each time the loan was sold. Such sales were often virtually simultaneous so that the party claiming the right to enforce the note and the right to foreclose received multiple payments on the same loan while at the same time retaining the “servicing rights” so that they could foreclose and report to the unhappy buyers that their investment was worthless.
* Hapless homeowners with clueless lawyers were asked at trial if the document before them was the original. The homeowner had no idea that the signature he or she was looking at was forged by high tech mechanical means which today actually employs a ball point pen and created variations in the signature as to pressure, lines and swirls. By saying yes, the homeowner admits that the paper is original which it is not, he admits that it is his signature, which it is not, and he admits that the possession of the original note is unquestionable which is completely wrong because the actual original was “lost” many years earlier.
If the actual facts fail to show ownership of the debt, then paper instruments indicating transfer of a mortgage (or a note) are just that: paper. If what is written on paper conflicts with the facts then the actual facts take precedence. In no case that I have reviewed (among thousands) has there ever been any proof of payment for transfer of a mortgage or deed of trust. If you demand it in discovery your adversary will fight to the death to prevent you from learning what really happened.
It is the absence of assertions regarding the debt ownership and transfer that reveals the truth here. Industry standards for banking require both a warranty of ownership of the debt and the ability to confirm the existence and ownership of the debt. You will never see even an assertion from the parties seeking foreclosure that they are the owner of the underlying DEBT or that they ever paid for the right to collect from the “borrower.” Instead, their assertion is that they own the PAPER, to wit: the note and mortgage.
The absence of consideration is why nobody is alleging that they are holders of the note and mortgage in due course which would eliminate virtually all borrower defenses and shift the risk of loss to the maker of the note.
The logic is irrefutable: the absence of an assertion of being a holder in due course (HDC) is evidence of no consideration, shifting the burden onto the would-be forecloser to show that there was consideration or value paid in hand.
If they did assert the status of holder in due course then they would need to prove consideration as well as that the purchaser was acting in good faith and without knowledge of borrower defenses. By not asserting HDC they create an elliptical argument that they don’t need to prove or even allege consideration or value paid in hand.
They have now elevated that nonsense into the orbit of illusion: they assert that borrowers have no right to challenge the conditions precedent to the effectiveness of the instruments upon which they rely to show legal standing and prima facie elements of a case in foreclosure.
No bank would let you borrow money using a note that had been endorsed or a mortgage that had been assigned unless they received a warranty of title, confirmation of the existence and ownership of the debt, and proof of authority of the person endorsing or assigning the paper. It just doesn’t happen.
And if they DID have proof of paying value for the underlying debt, contests to foreclosure would be virtually nonexistent. The exception being bad accounting and mistakes in the escrow account, or the delivery of default notices. Any party with a portfolio of mortgages on which they seek to foreclose should be more than anxious for the opportunity to show that the loans were properly securitized and that nobody was being cheated.
But the same banks, who set those standards, want us to accept an endorsed (indorsed) note and an assignment of mortgage without any warranty of title, confirmation of the existence and ownership of the debt and proof of authority of the person executing the document.
The industry standard for an assignment of mortgage is clearly set forth in MultiState Mortgage Assignment – Single Family – Fannie Mae Uniform Instrument Form 3741. It starts with “For value received, the undersigned holder of a Mortgage (herein “assignor)…” The instrument itself places two conditions on the effectiveness of the assignment: (1) value received and (2) assignor is a “holder” of the mortgage.
The clear meaning is that the assignor must receive value — which conforms with Article 9 UCC which is adopted in all 50 states of the union. Just like a promissory note where it is customary to execute the note first before receiving a loan, the assignor can sign (if the signature is actually authorized) the assignment of mortgage. Whether it is effective as an instrument is wholly dependent upon whether the facial statements on the assignment are true — unless the homeowner waives an objection to it.
The purpose of the requirement that value be paid in hand is to assure that the debt is being transferred. This refers to the underlying obligation not the note, which is a paper instrument that is also subject to challenge.
Thus at the very least you are entitled to confirm warranty of title, confirmation of the existence and ownership of the debt and proof of authority of the person executing the document.
in 1974, in my first semester of first year in law school, one of the main points drilled in by Professor Sam Bader was that the debt is not the note and the note is not the debt. The note is evidence of the debt but is not the debt itself.
The debt is determined by what actually happened. If someone delivers money to you it is presumed not to be gift; hence a debt is created with or without paper. If you sign a note, expecting to get a loan and you don’t get the loan, the note is subject to some very basic defenses — mainly that the note is evidence of a transaction that never occurred or that the assignment of mortgage or indorsement of a note is evidence of a transaction that never occurred.
Professor Bader also made it clear that the main error in litigation over loan transactions occurs when the Court (the Judge, who also went to law school), makes the error of equating the underlying debt with the paper that has been executed. Blind justice mandates that we apply the rule of law without regard to the external effect of those decisions. Instead, courts have intentionally or unintentionally “forgotten” the most basic principle of contract law.
The absence of any consideration in the origination or transfer of “loans” means that there was no value attached to the execution of the transfer documents or even the original loan documents. And THAT means that the debt is not present in the courtroom where foreclosures are routinely being allowed.
PRACTICE NOTES: What would you expect if you were reviewing an alleged transaction that involved hundreds of thousands of dollars? You would expect correspondence and agreements to reflect the purchase — not a single document out of context that purports to show an origination or transfer.
Houk v. PennyMAC CORP. | FL 2DCA – PennyMac failed to meet its burden of showing the nonexistence of a genuine issue of material fact regarding its entitlement to enforce the lost note.
In this case the Bank was required to prove a chain of transfers starting with the indorsee, GreenPoint Mortgage to the current servicer. The Bank failed to prove the series of transactions through which it purportedly acquired the note from the indorsee and the judge ordered an involuntary dismissal. However, because this is Florida and statute of limitations are not upheld, it is likely that Wells Fargo will have time to regroup, create a new strategy, and file to foreclose again on the tortured homeowners.
In the present case, and because neither party disputes the validity of the special indorsement appearing on the allonge filed with the original complaint, the Bank was required to prove a chain of transfers starting with the indorsee, GreenPoint Mortgage. Aside from the witness’s testimony that EMC Mortgage purchased and acquired Borrowers’ loan from “someone,” the only evidence admitted at trial purporting to transfer the note was the PSA. The PSA, in turn, did not reference GreenPoint Mortgage or Borrowers’ note. Moreover, absolutely no testimony was adduced at trial which explained how the Depositor, Structured Asset Mortgage Investments II, Inc., acquired mortgage loans to convey in the first place. At most, the evidence at trial established that EMC Mortgage acquired Borrowers’ loan in 2006 and placed the loan in the trust, and that the Bank became the trustee. There was nothing, however, connecting the indorsee of the note, GreenPoint Mortgage, to EMC Mortgage or the Bank. In other words, the Bank failed to prove the series of transactions through which it purportedly acquired the note from the indorsee.
Accordingly, we reverse the final judgment and remand for entry of an order of involuntary dismissal of the foreclosure action.
MAY and CONNER, JJ., concur.
Information is admitted in evidence only after a proper foundation has been laid. If the witness knows nothing about the foundation the evidence should not be admitted as evidence. Appellate courts will usually reverse a trial court’s error in ruling on evidence UNLESS the appellate panel decides that the error would not have made any difference in the outcome. The fundamental fact at the root of all foreclosures is that the homeowner owes a debt to the foreclosing party and has not paid.
In the passage below a witness supposedly employed by US Bank displays a lack of personal knowledge on anything that would contribute to foundation for establishing the standing of the foreclosing party. I have inserted in brackets the significance of each answer of an actual witness in a court proceeding.
MERRILL LYNCH COMMITTED BLATANT FRAUD.
Like other Consent Orders, this one reveals the banks as pursuing an on-going pattern of fraud, deception and theft. The problem is that people still can’t quite believe the entire scheme is fraudulent and that the base transactions don’t exist. The banks get away with this because the complexity is so great that nobody but a select few at trading desks understands the true nature of these transactions.
The financial markets are said to be based upon “trust.” The truth is that the only thing anyone on Wall Street trusts is that everyone else will pursue any business model that makes them money, blurring the lines of legality with a cover-up built entirely on creating meaningless complexity.
Bill Paatalo wrote me an email (see below) that is actually an article. If you ever thought that the banks were in any way playing by the rules, maybe this article will be the straw that breaks the camel’s back. The bottom line is don’t admit or even believe that ANYTHING the banks say is true. Starting with the first “transaction” (the origination) right up through the foreclosure and sale, the entire scheme is devoted to defrauding as many people as possible.
We should stop treating the hundreds, even thousands, of known examples of bank fraud by the banks as “one-off” isolated instances in an otherwise legal world. We need to recognize that our economy was severely damaged by these banks and that we continue to be under siege by them.
MEGAN WACHSPRESS, JESSIE AGATSTEIN & CHRISTIAN MOTT published an article that takes dead aim at the “free house” controversy. In the Yale Law Review they come to the conclusion that (1) the house isn’t free to any homeowner even if they escape the mortgage and (2) the projected social cost of market values are wrong. But probably the most stinging criticism of the judicial system is that judges are abandoning the rule of law for ad hoc rulings whose only purpose is to avoid a result the judge doesn’t like.
Unfortunately, the article does not fully address the issue of why the banks are failing to prove what is ordinarily a slam dunk case. The authors seem to assume that the debt is legitimate and that it is mainly a paperwork problem. I would add my usual comment: if the banks simply had continued with the standard procedures they would not have had any paperwork problems no matter how many times the loan was sold. The greater evil that is not addressed in case decisions and law review articles is that this was all part of fraudulent scheme and THAT is why the banks had to resort to more fraud (in documentation).
We should remember that banks basically drafted the statutes and are the source of all paperwork on consumer loans, especially mortgage loans. For hundreds of years they knew how to do it, knew how to keep it and rarely misplaced anything. It strains belief to think that suddenly the banks forgot what took hundreds of years to develop. The more insidious reason is what is feared to be the nuclear option — that the mortgages, notes and loan contracts were all an illusion, even if the money was real.
In the end, for reasons other than those expressed on these pages, the authors come to the same conclusion that I did — the “free house” is going to the banks every time a foreclosure is granted.
Here are some quotes from their article that I think are self-explanatory.
(5) the bank has accelerated that remaining debt in accordance with the terms of the note itself.
When a bank fails to prove these elements, a judge is legally required to rule in favor of the homeowner.
Recently, courts have been inundated with suits where homeowners question the bank’s ability to prove the second element. Litigation over “proof- of-ownership” issues in foreclosures is a growing nationwide problem; sampling suggests a ten-fold increase between the periods immediately preceding and following the 2007 collapse of the housing market.
To demonstrate ownership without expending more resources than pooling and servicing agreements allotted, bank employees signed hundreds of thousands of affidavits asserting that they had seen and could attest to the contents of original documents demonstrating ownership of the underlying mortgage. Although such affidavits were a legally acceptable means of demonstrating such ownership, a significant number of them were actually fraudulent.
…ethical transgressions have affected hundreds of thousands of foreclosures.
Judge Schack, a trial judge sitting in the New York Supreme Court for Kings County, has repeatedly sanctioned law firms for bringing improper foreclosure suits when he has independently discovered the inadequacy of the plaintiffs’ evidence as to defendants’ indebtedness or plaintiffs’ ownership of the note. See, e.g., Argent Mortg. Co. v. Maitland, 958 N.Y.S.2d 306 (Sup. Ct. 2010); Wells Fargo Bank v. Hunte, 910 N.Y.S.2d 409 (Sup. Ct. 2010); NetBank v. Vaughn, 841 N.Y.S.2d 827 (Sup. Ct. 2007).
By focusing on the immediate consequence of a ruling for homeowners, the courts ignore perverse incentives created by allowing banks to continue to externalize the costs of their mistakes.
…one approach—that taken by the Florida and Maine Supreme Courts—is to bend the rules of res judicata to avoid a windfall for homeowners. This approach creates few benefits and significant economic problems. In this Part, we argue that further subsidizing banks’ poor litigation practices results in deadweight loss by contributing to negative public-health outcomes and by disincentivizing banks from improving their servicing and litigation techniques. We also explain how granting winning homeowners “free houses” will not negatively affect the mortgage market.
…broader social subsidization of irresponsible [bank] behavior.
…prolonged foreclosure proceedings create negative social externalities, depressing surrounding homes’ resale value, reducing local governments’ tax revenues, and increasing criminal activity. Foreclosures also appear to have significant effects on community members’ physical and mental health, and correlate with increased rates of depression, anxiety, suicide, cardiovascular disease, and emergency-care treatment.
…although judges have expressed concern about homeowner windfalls, the alternative creates a windfall for banks that cut corners in managing and prosecuting foreclosures. The risk and costs of losing foreclosures should already be internalized in the price of current mortgages. Empirical studies suggest that greater protection for mortgagors historically corresponds to slightly higher mortgage rates among lenders. These studies indicate that lenders adjust the price of mortgages based on what they anticipate the cost, and not just the likelihood, of foreclosures will be.
And for those who thought they could get away with lying and cheating forever, let me say this: anyone can get away with almost anything — at first. But eventually if you keep doing it you are going to pay the price. The 9th Circuit Court of Appeals (Federal) has made it clear that it will routinely reverse any decision that involves the trial court accepting void assignments or in which the court rules that the borrower has no standing to raise the issue of ownership and standing based upon a void assignment on the grounds that the borrower was not a party to the transaction.
Just to be clear, that whole line of reasoning was flawed from the start. If you witness a murder, will your testimony be blocked because you were neither the murderer nor the victim? The very notion of due process means that all parties have an opportunity to pursue the truth and not be stuck with some legal presumption that is based upon a false statement of fact.
The importance of the Geiseke decision is that several states are involved and it likely to have strong persuasive impact on courts across the country. However, don’t think the party is over for the banks. They will continue to raise the standing issue (i.e., the borrower was not part of the assignment transaction) and judges will continue to say to borrowers until they absolutely cannot, that borrowers have no standing the raise the issue as to whether any of the implied transactions actually exist.
This case shows that hearsay evidence is admitted as long as it is a bank claiming an exemption. The witness, devoid of any actual knowledge, is allowed to testify about facts, events and circumstances about which he or she knows nothing. The Judge did enter judgment for the borrowers. But the 4th DCA reversed and ordered foreclosure. At some point the courts are going to roll back these pronouncements when and if the foreclosure crisis comes to an end. The precedent for other cases is against any written or unwritten prior doctrine. But in the meanwhile millions of people will still lose their homes to strangers without any financial interest in the loan.
This case might lead to the conclusion that borrowers should make payments through their own “servicers” who can then testify about the inconsistent, false assertions, and data maintenance standards of the other servicer.
Does the Trust Even Exist? Probably Not.
The biggest mistake we lawyers make is jumping into the middle of a fact pattern instead of starting at the beginning. Most foreclosures involve trusts at some point in the chain. And most trusts do not exist as “legal persons”. Without a legal person there can be no “jural act.” Hence the Court lacks jurisdiction to perform any act other than the ministerial act of dismissing the foreclosure action in judicial states or striking the substitution of trustee, the notice of default and the notice of sale in non-judicial states.
Any recorded document involving a nonexistent legal person should also be removed from the county records.
If a lawyer goes into court claiming he represents X when in fact he never had any contact with X, was never retained by X and is not being paid by X, he is misrepresenting his status and that of X. The fundamental problem is that the lawyer has shown up without a client and X is not present. In judicial states this is simply a matter of jurisdiction or lack thereof. With X not there as Plaintiff there is no case to be decided.
It’s nice to see Gretchen Morgenson back on the beat of financial fraud. We need more exposure to what everyone who has battling foreclosures already knows — that virtually all of the documents relied upon by would-be foreclosers are false, fraudulent, fabricated and forged. These revelations appear to be the only way judges will stop allowing presumptions of false facts to dominate their rulings.
It is safe to assume that if the documents, business records or even correspondence is from Wells Fargo there is a high likelihood that it contains false information. This is most likely true for the other mega banks too.
YOU NEED AN INFINITE NUMBER OF BASES AND PLAYERS TO PLAY BALL WITH THESE GUYS: The Trustee controls the trust as trustee. Oops, wait, it is the Master Servicer who has all the control. No, wait again, it is the subservicer who has the right to administer the loan. But actually if there is an alleged default it is the special servicer who has exclusive authority over decision making. Except that the “Controlling Class” has the last say in the matter. But actually it is the Controlling Class Representative who has the last word.
I have always felt that there must be some way to force the other side into approving a modification or at least providing access by the borrower to the “lender” to discuss or negotiate the matter. I still believe that. Maybe this article will help spur some ideas. Information is leverage, especially in the world of false claims of securitization.
Essentially the banks would have us believe that by magic they created loans without owners or holders in due course. So it might as well be the banks who foreclose under any pretense they choose to offer. The political decision was to let them do it for fear that the banks would bring down the entire system. But if that were true, the bank’s capital would be worthless as would every world currency including the dollar. They bluffed Presidents Bush and Obama and the Presidents blinked. Millions of foreclosures followed because the ordinary guy is just not that important even if it involves a substantial portion of a population.
I will provide my comments and suggestions for discovery or cross examination along with each statement in the above cited article. Keep in mind that the entire article is an exercise in deceit: It is assuming that securitization actually happened. If that were true then they would be more than happy to show that the subject loan was purchased on a certain date by the payment of value to a specific seller by a trust. The trust would then be a holder in due course. But as we have seen numerous times nobody ever refers to the trust as a holder in due course which can only mean there was no such purchase.
The indented portions are direct quotes from the WFDb article cited above.
The thing most borrowers fail to realize about conduit loans is that once a loan has been securitized, they are not working with a “lender” anymore.
There is no legal definition for a conduit loan. The banks would have us believe that if they present any tentacle, that is sufficient for them to foreclose on a loan. But that isn’t legal standing — it is fraud on the court. A loan is a loan, but Wall Street banks don’t want you thinking about that. But by calling it something different it immediately plays into the bias of the court assuming that the big banks know what they are doing and that only they can explain what is going on.
Corroborating my description of the “Conduit”: remark, WFB explains that you are not dealing with a lender anymore. Is that supposed to make us feel better? There is no lender? Was there ever a lender? If, yes, then please identify the party who loaned their money to the borrower.
The Master Servicer is reimbursed when the borrower makes up the payment or when the property goes into foreclosure and is later sold.
So we are being told that the Master Servicer is making payments to investors regardless of whether the borrower makes any payment. First, the payments to investors are made by the Master Servicer because they are the only one with access to a giant slush fund or dark pool created out of money that should have a gone to each trust and been maintained as a trust account, administered by the trustee.
But it is true that the Master Servicer gets paid for the “servicer advances” when the property is sold. So if the investors received 12 months of payments (of at least interest), even though it was taken out of a reserve pool (read the prospectus) consisting of their own money, the Master Servicer gets paid as though it was a reimbursement when in fact it is a windfall. Needless to say the incentive is to let the case languish for years before foreclosure and sale take place.
The longer the time period between the alleged default and the sale of the property, the more money is received by the Master Servicer as “reimbursement” for money it never advanced.
The Special Servicer makes all final decisions about dispositions of defaulted property and Real Estate Owned (REO). Often they are also the holders of the “first loss pieces” of the pool. Because they are taking the most risk, as part of their agreement to take that risk, they usually insist on being the Special Servicer as a requirement of their investment. There are only a handful of special servicers in the country.
Really? So the Master Servicer, the subservicer and the Trustee of the alleged REMIC trust have no say in whether to work out or modify a loan that is economically not feasible but which could be feasible if there was a workout or modification. What is a first loss piece of the pool? What is the account name of the pool supposedly held in a bank somewhere? Does the account name match the alleged REMIC trust in any way? Is there an account administered by the Trustee? Does the Trustee get performance reports or end of month statements?
The PSA also designates a “Controlling Class” who will provide input on recommendations for Special Serviced Loans and REO.
If the Special Servicer is willing to extend the loan, they have to get permission from the Controlling Class Representative (CCR), who is a fiduciary for all the certificate holders.
Anyone who has seen that famous but from Abbot and Costello in the 1950’s understands what is happening here. The Trustee controls the trust as trustee. Oops, wait, it is the Master Servicer who has all the control. No, wait again, it is the subservicer who has the right to administer the loan. But actually if there is an alleged default it is the special servicer who as exclusive authority over decision making. Except that the “Controlling Class” has the last say in the matter. But actually it is the Controlling Class Representative who has the last word.
So in discovery ask which of those entities was contacted about modification and why the borrower was instructed to send the application and documents to the subservicer when the subservicer had no authority?
And let’s not forget the fact that the certificate holders have no right, title or interest in the loans, the debt , the note or the mortgage. So their “Fiduciary” (who apparently is not the Trustee of the alleged Trust) does what? How do we contact these intermediaries to whom powers and obligations of a trustee are passed around like free money? How do we know if the subservicer is telling the truth when it reports that the “investor” turned down the settlement or modification.
And by the way, why do we not have recording of the modification agreement? Why does not the Trustee of the REMIC Trust sign the modification agreement? Instead it is ALWAYS the signature of the servicer who, as we already know, has no power to accept or deny requests for modifications — and of course it is never recorded in county records. Why?
Remember, there are no “pockets of money” to use for refinance. Special Servicers, although legally allowed by the PSA to forgive any portion of the debt, rarely do so because often that would negatively affect one or more of the bondholders at the expense of the others. Instead, the Special Servicer, on behalf of the conduit, will almost always foreclose and sell the asset.
Hmmmm. So the Special Servicer (and the CCR?) ordinarily chooses to drive down the price of the collateral and take a larger loss on the subject loan because it “would negatively affect one or more of the bondholders at the expense of the others.” But the principal reduction would positively affect some bond holders more than others by saving the collateral. So exactly what are they saying as Wells Fargo Bank about the roles and rules of securitization?
And lastly, why did WFB task authors to write about this when their experience is limited to manufactured home communities? Probably the same reason why robo-witnesses know nothing.
Below is a link to a video where GlobalCollateral’s Chief Commercial Officer Ted Leveroni discusses collateral settlement failures and he basically states that the securitization failed. Collateral fail and securitization fail are exactly the same thing. In this case, the evidence is indisputable that most transactions are not in fact settled but that they are held “in street name” which means the brokers own it as “nominee.” And that enables the banks as brokers to assert ownership over what is not theirs to own. Account holders are getting statements and payments from a slush fund. This is partial corroboration of my conjecture that there literally was no actual loan in most cases involving a refinance.
The Officer states USB doesn’t know who the investors are and says you’ll have to go to DTC to likely find out.
Back at the beginning of creating the false pyramid of “Securitization” 9 lawyers in the New York metropolitan area resigned rather than contribute to drafting securitization documents. They all agreed that what was being requested of them was the drafting of documents to cover up a criminal enterprise. This article spells out part of the problem.
The issue of attorney accountability for illegal or even criminal activities of their clients is as old as organized crime. The more money there is to be made, the more willing the lawyers are willing to rationalize their involvement. But when their conduct actually enables or promotes illegal conduct there should be (and actually there is) accountability for their illegal actions.
The problem is not just about the stealing from investors and applying the proceeds of “investments” to enable an illegal enterprise. It is also, as homeowners have long complained, that taking the attorney food chain as a whole, the prosecution of wrongful foreclosure where there was no evidence that their purported “client” knew of the foreclosure and no evidence that the “client” had any interest in the debt, note, mortgage or foreclosure.
If a property owner loses their property through a foreclosure sale initiated by someone who did not validly own the debt, has the property owner automatically suffered enough “prejudice” to pursue a claim for wrongful foreclosure? Or does the property owner also need to show that it would have been able to avoid foreclosure by paying the debt to the true lender?
The California Supreme Court’s recent Yvanova decision (reviewed on Money and Dirt here: California Supreme Court: Borrowers Have Standing to Allege Wrongful Foreclosure Based on Void Assignment of Note) only partially addressed the “prejudice” issue. In Yvanova, the Supreme Court discussed prejudice, but only “in the sense of an injury sufficiently concrete and personal to provide standing,” not “as a possible element of the wrongful foreclosure tort.” The Court held that the plaintiff in that case demonstrated sufficient prejudice — lost ownership of property in an allegedly illegal foreclosure sale — to confer standing to pursue a wrongful foreclosure claim.
A recent opinion by the California Court of Appeal (Fourth District, Division One, in San Diego) — Sciarratta v. U.S. Bank National Association — picks up the “prejudice” analysis where Yvanova left off, and addresses prejudice as an element of a wrongful foreclosure claim.
In 2005, the property owner obtained a $620,000 loan secured by real property in Riverside County. The note and deed of trust identified the lender as Washington Mutual (WaMu).
In April 2009, JPMorgan Chase Bank (Chase), as successor in interest to WaMu, assigned the note and deed of trust to Deutsche Bank. The trustee promptly recorded a Notice of Default, followed by a Notice of Sale.
In November 2009, Chase recorded a document assigning the note and deed of trust to Bank of America (even thought just months earlier, Chase had already assigned the note and deed of trust to Deutsche Bank — oops!). On the same date as the assignment, Bank of America recorded a Trustee’s Deed, reflecting that Bank of America had acquired the property at a trustee’s sale in exchange for a credit bid.
In December 2009, Chase recorded a “corrective” assignment of the note and deed of trust, suggesting that the April 2009 assignment to Deutsche Bank was a mistake, and was really intended to be an assignment to Bank of America.
The property owner sued the banks and the trustee for wrongful foreclosure.
The banks filed a demurrer, arguing that the property owner could not allege “prejudice,” which is an essential element of a wrongful foreclosure claim.
The trial court sustained the banks’ demurrer and dismissed the case.
The Court of Appeal reversed, holding that a property owner who loses property to a foreclosure sale initiated by someone purporting to exercise rights under a void assignment suffers enough prejudice to state a claim for wrongful foreclosure.
The court first relied on the Supreme Court’s holding in Yvanova that “only the entity currently entitled to enforce a debt may foreclose on the mortgage or deed of trust securing that debt.” In this case, based on the clear paper trail of assignments, the entity entitled to enforce the debt was Deutsche Bank, but the entity that foreclosed was Bank of America.
The critical issue is not the plaintiff’s ability to pay, but rather whether defendant’s conduct resulted in the plaintiff’s harm; i.e., a foreclosure that was wrongful because it was initiated by a person or entity having no legal right to do so; i.e. holding void title.
The court also offered policy grounds supporting its decision. The court’s ruling would encourage “lending institutions to employ due diligence to properly document assignments and confirm who currently holds a loan.” A contrary ruling, on the other hand, would subject property owners to unfairly losing their property in foreclosure to someone who does not even own the underlying debt, with no court oversight.
The Sciarratta decision will make it easier for property owners to assert wrongful foreclosure claims…….
Banks use several ploys to distract the court, the borrower and the foreclosure defense attorney from the facts. One of them is citing a merger in lieu of presenting documents of transfer of the debt, note or mortgage. We already know that the debt is virtually never transferred because the transferor never had any interest in the debt and thus had no authority to administer the debt (i.e., as servicer).
So the banks have successfully pulled the wool over everyone’s eyes by citing a merger, as though that automatically transferred the note and mortgage from one party to another. Mergers come in all kinds of flavors and here the 5th Circuit in Florida recognizes that simple fact and emphatically states that the relationship between the parties must be proven along with proof that the note, or authority to enforce the note, must be proven by competent evidence.
This 2016 Illinois case corroborates exactly what I have been saying for 11 years. Sleight of hand accounted for the 1st Mortgage that was payable to Lehman Brothers who funded every loan with advances from Investors who then owned the debt. The investors were cut out of the chain of paper and the chain of money.
Thus equitable principles were attempted in order to establish a right to foreclose. But nothing can take away the fact that the forecloser, as in virtually all foreclosure cases these days, is a complete stranger to any part of any transaction that is memorialized in fabricated, forged, robo-signed, false representations on worthless documents of transfer.
Citi steps into the paper chain based upon nothing and THAT is their legal problem. So they attempt to file multiple amended complaint that only get themselves in worse trouble because in the final analysis, they are making allegations that imply legal standing that they will never be able to prove.
Specifically they seek to have the court declare an equitable mortgage in favor of Citi. For the most part, equitable mortgages don’t exist, but there is a doctrine called equitable subrogation in which title to the existing mortgage shifts to a new owner because the new owner has paid for the debt — something that is impossible because even Citi does not say they paid the investors who owned the debt. Further, as this Court points out such a doctrine won’t do Citi any good if the initial mortgage was defective.
In short the fundamental assumptions (arising from political rather than legal policies) do not apply. Those assumptions are frequently erroneously raised to legal presumptions), that the debt MUST be owed by the homeowners to the putative foreclosing party and that the imperfections in the paper chain are technical in nature and that therefore allowing the homeowner to win would be inequitable.
As the Courts dig deeper they are confronting the fundamental conflict between political doctrine and legal doctrine. Political doctrine mandates that the banks win in order to preserve a financial system that is now largely dependent on a ladder of financial products deriving (hence derivative) their value from each other, but based upon the assumption that the base transaction exists. The base transaction in the paper chain is a loan by the Payee on the note. In this case as in most cases, there is no base transaction in real life that would support the closing documents. Hence all the paper deriving value from the nonexistent transaction is worthless.
The simple truth is that in order for equitable subrogation to apply, one must allege and prove facts that there is injury to the pleading party — something that none of the players could ever claim in this case. Injury could only occur in financial form. And the only thing lost to Citi or even the Lehman estate, which is still in bankruptcy, is the opportunity to make a profit by deceit.
Who Do the Foreclosure Mills Represent?
I received a motion in today’s mail that appears inocuous but is an eye-opener on many levels. Butler & Hoesch, P.A., moved to withdraw as counsel and sought a charging lien on the Plaintiff’s recovery in a pending foreclosure case. The Plaintiff in the case is a securitized trust; Wilmington Trust Company is Trustee. In its Motion to Withdraw, though, the foreclosure mill makes no mention of Wilmington. Rather, the mill says it used to represent the servicer, Litton Loan Servicing, Inc. but that Litton has been sold to Ocwen Financial Corporation and that it has no attorney-client relationship with Ocwen.
Are you confused yet? Read the motion so you see what I mean. This foreclosure mill has been litigating a foreclosure lawsuit on behalf of Wilmington, but as far as I can tell, has never represented Wilmington. Moreover, although the mill talks about its relationships (or lack thereof) with Litton and Ocwen, neither Litton nor Ocwen is a party in the case.
So who, exactly, is the mill trying to withdraw from representing? Presumbly Wilmington, the Plaintiff, as that’s the only plaintiff in this case. But the mill’s own motion makes it clear it has no attorney-client relationship with Wilmington anyway.
Call me crazy, but shouldn’t the mill have an attorney-client relationship with the party who is prosecuting the lawsuit?
First, the Florida Supreme Court requires via Fla.R.Civ.P. 1.110(b) that the Plaintiff verify its Complaint in all residential foreclosure cases. Given the relationship between the foreclosure mills, the servicers, and the trustees, it seems clear the required verifications aren’t being done by the plaintiffs, but by the servicers. Many learned judges in Florida before whom I appear have made it clear that verification by a servicer is insufficient – the complaints are supposed to be verified by the “plaintiff.” Remember, the Rule doesn’t permit verification by a third party, but by “the plaintiff.” In fact, Shapiro & Fishman moved for rehearing of the Florida Supreme Court’s ruling on this precise issue, and the Court rejected its motion.
A bit awkward, eh? Yet that’s the position in which the mills have put themselves (in a large percentage of foreclosure cases in Florida).
Second, though I’m hesitant to call out others on ethical issues where the answer is not black-and-white, I struggle to see how the mills can prosecute lawsuits on behalf of plaintiffs without the plaintiffs’ knowledge or consent in a manner consistent with The Rules Regulating The Florida Bar. I’ve spoken with the Bar on this, and given our conversation, I’m not prepared to say it’s impossible, but I will say this. Personally, I couldn’t imagine appearing as counsel for a party in any lawsuit without that party’s knowledge or consent, much less doing so on a widespread, systematic basis.
Think about it this way. An attorney is able to act on behalf of a client because the attorney’s actions bind the client. Stipulations, representations, court filings, etc. … we as attorneys are, quite literally, agents for our clients. If a client is going to be bound in this manner, the attorney’s authority to represent/bind the client must be clearly established. This is why, for example, there are strict rules about how an attorney may appear as counsel, failing which the attorney’s actions don’t bind the client. See Pasco County v. Quail Hollow Props., Inc., 693 So. 2d 92 (Fla. 2d DCA 1997).
If these foreclosure attorneys don’t have an attorney-client relationship with the plaintiff, it seems to me they cannot represent the plaintiff at all and should be disqualified from doing so. After all, how can an attorney bind the plaintiff when the attorney has no relationship with the plaintiff? Why should any court accept the representations or stipulations of a plaintiff’s attorney when that attorney has no relationship with the plaintiff?
Third, on the issue of a charging lien, Florida law plainly requires that a charging lien be signed, in writing, by the party against whom the lien is sought. How does any foreclosure mill expect a court to award a lien in its favor on the recovery of a securitized trust (in this case, Wilmington), when the attorney has no relationship with Wilmington and no signed fee agreement? Should Wilmington really have to pay some of its recovery to a law firm with whom it has no relationship? And no signed fee agreement?
Fourth, you want to know why the Florida Supreme Court’s mediation program failed? Take another look at this motion. http://www.stayinmyhome.com/blog/wp-content/uploads/2012/01/Motion-to-Withdraw.pdf How can anyone expect to get a binding agreement with Wilmington Trust Company when the attorneys prosecuting this foreclosure case don’t even represent Wilmington? This is a good illustration why loan modifications and reasonable settlements are so hard to get – the appropriate parties aren’t even at the bargaining table.
(2) Require the foreclosure mills to have attorney-client relationships with the plaintiff (not the servicer, the plaintiff prosecuting the case) and disqualify all attorneys who lack such a relationship. That sounds harsh, but it’s ridiculous to inundate our courts with garbage pleadings that languish for years without a resolution when the parties prosecuting them don’t even know they’ve been filed.
With the same false claims of securitization of student debt as purported mortgage loans it is apparent that the courts are treating students differently from homeowners. Although the defenses are identical students are gaining much more traction in collection suits than their counterparts who are battling foreclosure.
The debt is beyond the statute of limitations for collection.
The “creditor” is not licensed to do business in the jurisdiction.
The “creditor” failed to comply with court requests for additional information.
And all that means is that the “creditor” is not a creditor. It is a party claiming to be a creditor when they are not. And just to be even more specific, the salesman of the loan and any purport successors does NOT have any contractual relationship or duty owed to the investors whose money is being spent for the sole purpose of creating paper than can be sold dozens of times.
The daily calls haunt Neil Garfield and his staff. Homeowners facing foreclosure vacillate through a predictable cycle of fear, helplessness, betrayal, confusion, powerlessness and sometimes the desire for retribution. Some callers display a pressured, almost manic-like urgency to correct their situation while some are so beaten down they are complacent. There are also the calls from homeowners who learn that they waited too long- and there is nothing else that can be done. The feeling of hopelessness and despair are palpable. Many homeowners will prevail against their loan servicers and many will lose, but all will come away from the experience emotionally altered.
One of the outrageous abuses taking place under the noses of our courts in SA is the ability of banks to repossess homes when a customer is three months in default, and then sell the property at sheriff’s auctions for a pittance. This leaves the customer without a home, and an outstanding debt to the bank. Needless to say, this abuse was a gift to criminal syndicates and property speculators, who feed on the misery of others by picking up these properties for as little as R100. Well, that just became a whole lot more difficult. New court rules gazetted last week make it far more difficult for banks to get away with this. For distressed home owners, putting up a strong defence against the banks got a whole lot easier.
The government last week gazetted new court rules designed to stop repossessed homes being sold at sheriffs’ auctions for a pittance.
The new rules were motivated by cases of repossessed homes being bought for as little as R10 at these auctions. This was made possible by court rules which allowed repossessed homes to be sold without a reserve price. This opened the door to bid rigging by syndicates, which routinely pick up properties for a fraction of their market worth.
The changes to court rules require the presiding judge in a repossession case to consider alternative means of settling the judgment debt, and whether the property is the primary residence of the debtor. This is more in line with international best practice.
Benjamin adds that most developing and developed nations make it much harder to repossess a person’s primary residence because of default, as the law in these countries understand the actuarial certainty of a debtor losing a job or experiencing financial stress at some point in the 20 or 30 year life of a mortgage loan. Some countries, such as the UK, require banks to reschedule debts to allow defaulting customers to get back on their feet and remain in their houses.
Most countries, including Ghana, Malaysia and Korea, require banks to sell repossessed homes at fair market value or, if no sale has occurred within a reasonable time frame, at marginally lower prices.
Before approaching a court with an application for home repossession in terms of the new rules, creditors will have to attach evidence of the market value of the property in question, the local authority valuation of the property, plus the amounts owing on the mortgage bond and rates and taxes.
Advocate Douglas Shaw highlighted the “medieval” state of SA’s home repossession practices compared to other countries in a PhD thesis entitled The Legality of the Law of Sale in Execution for Substantially less than Market Value in South Africa. This study appears to have influenced the change in rules. Shaw says it is now theoretically much more difficult for banks and other creditors to get away with rushing to court for a summary judgment after a client is three months in default.
Shaw’s PhD thesis estimated that South Africans had lost close to R400bn in home equity value since the Constitution came into effect in 1996, due to the practice of allowing repossessed properties to be sold at a fraction of their market worth. This, he claims, is a gross violation of right to property, dignity and justice.
The change in court rules gives effect to the Constitutional Court ruling in Jaftha v Schoeman, which declared that banks should only sell at auction as a last resort and should find more creative ways to sell repossessed properties.
The change in court rules also prohibits court registrars – rather than judges – from issuing sale in execution orders. This was common practice until the Constitutional Court put a stop to the practice in the Gundwana v Steko case (https://en.wikipedia.org/wiki/Gundwana_v_Steko_Development). Attorneys for the banks would type up court orders and have them stamped by court registrars. The new rules demand that only judges issue such orders, and only after considering all the debtors’ circumstances.
King Sibiya, head of the Lungelo Lethu Human Rights Foundation, has for years been lobbying the Department of Justice to change the rules and introduce more judicial oversight into cases of home repossession and eviction. Sibiya and Shaw spearheaded the R60bn Constitutional Court class action suit against the banks, comprising roughly 400 applicants whose homes were repossessed and sold at auction for a fraction of their worth. The Concourt recently referred the matter back to the High Court.
Sibiya says the change in court rules is a step in the right direction, but further changes are required. For example, how will the courts decide what is fair market value for a property unless estate agents are brought into the loop? This would challenge sheriffs’ grip on the auction business, something many people have argued is necessary to stop corruption, bid rigging and opportunistic speculation at the expense of dispossessed homeowners.
Another change to the rules prevents sheriffs from deducting amounts not authorised in terms of the judgment debt. Benjamin says a common practice in sales in execution is for the banks to load additional charges onto the defaulting customer’s account after the judgment has been issued, and instruct the sheriffs to reclaim this from the auction sale. This is now disallowed.
The final word: always defend a summons!
You can email Armand at crushbankdebt@gmail.com.
In the first of this two-part article, Jack Darier delves into the murky world of securitisation, and how banks are able to side-step the law in grabbing the homes of upwards of 10,000 South Africans each year. It’s all accomplished with legal trickery and the blessing of the courts.
Professor William Black, an expert on banking and economics from the US, testified in 2015 before the Joint Committee of Inquiry into the Banking Crisis in Ireland. In his testimony, he pointed out that the financial crisis of 2008 and 2009 is certain to repeat because none of of the criminal bankers that bankrupted the country had been sent to jail – unlike the “Savings and Loans” crisis nearly two decades earlier in the US, which resulted in more than 1,000 convictions. One of the indicators that tell us banks are making “liar loans” is the speed at which lending is growing. If Prof Black is right, modern banking will sink us all. It is predicated on a business model of bankruptcy for profit. This is a long read, but well worth it for the deep insight Professor Black provides into the crisis and the criminal mentality of the bankers who were bailed out by taxpayers.
In the second part of this series, William Black gives testimony before the Inquiry into the banking crisis in Ireland. He talks from a US perspective, but explains how to tell when banks are behaving recklessly (when their loan books are growing faster than the economy), how bankers have lobbied politicians to get rid of pesky legislation that inhibits their gambling instincts and how they have managed to avoid going to jail. This is fascinating testimony into the dark heart of modern banking.
A big thanks to Ciaran from Acts-Online! He helped us nail it down. Sterling work!
Under the existing paradigm if a buyer of a house wishes to finance it, he/she applies for a loan from a bank and then is required to repay it over a 20 year period plus an annual interest charge of 10% per annum as well as other sundry expenses. Most people are under the impression that the bank loans this capital sum by utilising the savings of a depositor and the difference of 4% in interest rates (10% for the borrower and 6% for the saver) represents the bank’s profit margin.
Provided that the bank has lodged sufficient reserves with the SA Reserve Bank such as cash and Treasury bills, it can lend up to 14 times that amount for home loans. What the bank then does is to credit the home loan account of the borrower with say R500,000, which is then represented as an asset on its balance sheet and at the same time creates a fictitious deposit of R500,000 as a liability in order to balance its books. The bank then charges 10% interest on the loan – money which has been created out of nothing or thin air. This method of finance is not only immoral, it is fraudulent. As a result of this deceitful practice it comes as no surprise that homeowners spend more than 50% of their after tax income on repaying capital and interest (as opposed to the accepted norm of 25%) and that almost everyone is struggling to survive in a sea of debt. The UBUNTU Party proposes to solve this problem with immediate effect, by establishing a People’s or State Mortgage Bank. This bank will issue loans at 0% plus a small handling charge, which is necessary in order to run the system. What do local experts think? In an article in the SA Real Estate Investor of May 2011, Introducing the Sovereign Man Breaking Free from Financial Checkmate, Robert Vivian, Professor of Finance and Insurance at the School of Economic and Business Sciences at the University of Witwatersrand questions the morality of banks not lending their own money, but creating it out of nothing and then charging interest on it. He states that “A management fee payable to the bank managing the system seems more appropriate.” New Zealand provides a good example of a state financed mortgage system that has worked successfully in the past. In 1935 New Zealand’s agricultural exports of meat, wool and dairy products were badly affected by the artificially created Great Depression, and were down by 40% compared to five years earlier. There was much poverty and the unemployment rate rose to 27%. Many home owners lost their properties as they were unable to service their mortgages, and were forced to live in squatter camps. There was rioting as a result of food shortages. In November 1935 the Labour Party came to power and in January 1936 amended the Finance Act, which enabled the establishment of a State Housing Project. The first £10 million was provided at an interest rate of 1% per annum, while further advances in excess of that amount were charged at 1 ½% per annum. Within three years everyone was properly housed. The Act also included a public works programme, which enabled the building of hospitals, schools, airports, dams etc. The unemployment rate declined by 75% to less than 7%. Under the UBUNTU Party’s proposal for 0% home loans it will be possible to house the entire population in proper housing (not RDP or NDP matchbox houses) within a period of five years. Not only will this policy create a boom in the housing industry, it will have a positive impact on many related industries, as well as manufacturers of furniture and other household goods. Millions of new and permanent jobs will be created and all other sectors of industry can follow this simple process, creating financial stability for every South African. This is the short-term UBUNTU plan of action and we have no doubt whatsoever that this will be the outcome, based on sound empirical evidence.
The entire banking system and the industry that supports it is based on an unlawful, exploitative and corrupt foundation. It is the greatest act of deception launched against humanity. The banks break the law thousands of times every day with impunity or or any kind of legal backlash, and destroy the lives of millions of trusting South Africans without an end in sight.
This is the sector of society that has caused the greatest amount of damage to the honest and trusting citizens who believe that the government is their servant and is doing the best it can for our greatest benefit. This is a blatant lie and misperception. Please see the numerous video clips and articles on our research page to learn severe this situation is and how many legal actions there are against banks, governments and ministers around the world.
Together with the legal/justice sector, the financial sector needs a complete overhaul so that it truly serves the people and not the shareholders of the banks or the multinational corporations that are using it as a tool of control over its people.
The misery and hardship caused by the financial industry is almost unimaginable. So much so, that every year many people commit suicide as a result of the unlawful activity of banks. This makes their actions utterly unacceptable in a moral society that upholds human rights above all. Unfortunately the rights of corporations are valued above those of human rights in South Africa. Our personal experience in the Constitutional Court is the living proof of such a statement.
Many have tried to stop the action of the banks in the various courts of South Africa, including the Constitutional Court, only to find that the Justice System is not ‘just’, and not impartial in any way, because even in the face of irrefutable legal argument and evidence against the unlawful activity of the banks, all judgements regarding action against the banks, in the last several decades, have been in favour of the banks.
The Abolition of Income Tax and Usury Party holds that Income Tax is a Marxist invention (point number two of the Communist Manifesto) and should be done away with in a reconstructed South Africa functioning under a new economic system. The system is called Zero Income Tax or Z.I.T.
Income Tax is a system of economic enslavement which is relatively new to this country, only coming into use in 1914 in the greater South Africa. We are convinced that it is a disincentive to economic growth, creating individual misfortune and creating a social climate of dishonesty. The system today is in chaos – many people fall outside “the net” while many others side-step it through “legal” avoidance because they are in a position to pay for the services of so-called tax experts. In a reconstructed South Africa the experts – bookkeepers, tax accountants, and such – will still have work, however, and plenty of it.
During 2014, an extraordinary series of “legislation” was “enacted”.
If seen in context of the financial crisis of 2008 and subsequent, it seems, adoption of “common law” – best evidence and the law of “obligations” the only conclusion can be that these “laws” were introduced in an attempt to sweep the derivative fraud of the period 2004 to 2014 under the carpet and hope nobody would notice.
This fraud is to justify summary and effect judgment where the bank is unable to produce the original agreements they sold in a true sale.
The Judges know – they have been told that there will be a systemic collapse of the financial system if they do not comply.
An unprecedented effort, witnessed by Nedbank’s new add “money is only paper and ink” is made to persuade the sheep that this is ok – and it will succeed!
Subsequently the CRC 11 of 2014 was issued – the only possible reason for this might be to try to hide the CRC 12 of 2007 as is it never existed.
Judgers are applying the new NCA definition of a bond defined as a credit agreement RETROSPECTIVELY to give judgment against the defendant – this is done on purpose to hide the fraud.
One could argue that “you borrowed the money, you got the house, you must pay” NOT SO these bastards stole so much that the “economy” was artificially collapsed in the biggest theft of wealth in the history of modern life – causing untold hardship and loss of income for the man in the street.
You can draw your own conclusion on this one – it is a laughable effort to bypass the rules of banking and legalize theft.
It must be noted that these laws, and I am sure there are many more, were all introduced at the same time in a planned effort to move into the age of the “obligation” with no recourse for the consumer – the banks cannot believe their “luck” that they are not all in jail.
The government of South Africa has, as far as I can determine, remover the Government and Municipal debt bonds from the usual suspect, one such is JP Morgan, and is now depositing it into the Development Bank of Southern Africa – this consists of 70 – 80 % of ALL bonds traded on the JSE / STRATE.
I cannot say is this is a good thing, but it has the potential to keep the money in the local economy instead of siphoning it off shore.
There is also a new Stock Exchange in South Africa – https://www.zarx.co.za/company-list all attempts to contact has so far been futile and what we know is what is on the web page.
It does seem to address the agricultural industry in particular.
My opinion is that this is all a move towards BRICS – or what is left of BRICS – South Africa and China.
Please comment, as I think these developments are of great importance and concern – the theft continues unabated!
Does our government acknowledge the abuse and correct the wrongs? NO! Iceland held the banks accountable and grew their economy. Our government leaders took money from the big banks and therefore turned their backs on the people. In the U.S., Wall Street created the scam and was bailed out and banks merely get fines for scams and abuse.
Millions of homeowners are scammed with fraudulent notes, mortgages, fake ‘trustees’ and servicing company abuse. There is NO STANDING and UNCLEAN hands. There is no legal reason for any home to be taken, yet many judges will rule in favour of and stand by the corporate crooks.

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