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You Can Stop Foreclosure
Over 20 million houses, on any given night in America, are completely sitting vacant. The economy is being helped by “shadow stimulus.” It’s coming from millions of underwater homeowners who have stopped making mortgage payments. Money that would have been otherwise allocated towards a housing payment is going into consumer spending.
“Capital must protect itself in every possible way, both by combination and legislation. Debts must be collected, mortgages foreclosed as rapidly as possible."
"When, through process of law, the common people lose their homes, they will become more docile and more easily governed through the strong arm of the government applied by a central power of wealth under leading financiers."
“These truths are well known among our principal men, who are now engaged in forming an imperialism to govern the world. By dividing the voter through the political party system, we can get them to expend their energies in fighting for questions of no importance."
“It is thus, by discrete action, we can secure for ourselves that which has been so well planned and so successfully accomplished.”
--Montagu Norman, Governor of The Bank Of England, addressing the United States Bankers’ Association, NYC 1924
Two landmark developments on August 16th 2012, give momentum to the growing interest of cities and counties in addressing the mortgage mess using eminent domain:
(1) The Washington State Supreme Court held in Bain v. MERS, et al., that an electronic database called Mortgage Electronic Registration Systems (MERS) is not a “beneficiary” entitled to foreclose under a deed of trust; and
(2) San Bernardino County, California, passed a resolution to consider plans to use eminent domain to address the glut of underwater borrowers by purchasing and refinancing their loans.
MERS is the electronic smokescreen that allowed banks to build their securitization Ponzi scheme without worrying about details like ownership and chain of title. Properties were sold to multiple investors or conveyed to empty trusts, subprime securities were endorsed as triple A, and banks earned up to 40 times what they could earn on a paying loan, using credit default swaps in which they bet the loan would go into default. As the dust settles from the collapse of the scheme, homeowners are left with underwater mortgages with no legitimate owners to negotiate with. The solution now being considered is for municipalities to simply take ownership of the mortgages through eminent domain. This would allow them to clear title and start fresh, along with some other lucrative dividends.
If MERS is not a beneficiary entitled to foreclose, as held in Bain, it is not entitled to assign title. Title remains with the original note holder; and in the typical case, the note holder can no longer be located or established, since the property has been used as collateral for multiple investors. The Court held that if MERS does not hold the note, it is not a lawful beneficiary.
Bain is binding precedent only in Washington State, but it is well reasoned and is expected to be followed elsewhere. If MERS has no rights that it can assign, the parties are back to square one: the original holder of the promissory note must be found. The problem is that many of these mortgage companies are no longer in business; and even if they could be located, it is too late in most cases to assign the note to the trusts that are being tossed this hot potato.
Mortgage-backed securities are sold to investors in packages representing interests in trusts called REMICs (Real Estate Mortgage Investment Conduits), which are designed as tax shelters. To qualify for that status, however, they must be “static.” Mortgages can’t be transferred in and out once the closing date has occurred. The REMIC Pooling and Servicing Agreement typically states that any transfer after the closing date is invalid. Yet few, if any, properties in foreclosure seem to have been assigned to these REMICs before the closing date, in blatant disregard of legal requirements.
Title has been clouded not only by MERS but because the trusts purporting to foreclose do not own the properties by the terms of their own documents. Legally, the latter defect may be even more fatal than filing in the name of MERS in establishing a break in the chain of title to securitized properties.
Under the MERS system, questions of authority and accountability arise, and determining who has authority to negotiate loan modifications and who is accountable for misrepresentation and fraud becomes extraordinarily difficult.
While banks and investors were busy counting their profits behind the curtain of MERS, homeowners and counties have been made to bear the losses. Counties are drowning in debt from a crisis created when Wall Street’s real estate securitization bubble burst. By using eminent domain, they can clean up the destruction of their land title records and 400 years of real property law. And by setting up their own banks, counties and other municipalities can become self-sufficient, using the deposit balances from their own revenues to generate credit for local purposes.
In April, 2011, 14 of the nation’s biggest banks promised federal regulators they would stop robo-signing documents to foreclose on homes. This was part of a settlement to clean up the foreclosure mess caused by wild lending of the banks. Nearly 8 months ago, the banks were caught red handed fraudulently creating fake documents because they lost track of the originals in the haze of creating mortgaged-backed securities. Why is this still going on? More importantly, why are not bank executives going to jail instead of letting them off the hook? Many have called this outright organized crime!!! The implications of this say the mortgage industry and bankers are panicked and desperate. It also signals the real estate market will not recover for many years.
Mortgage industry employees are still signing documents they haven’t read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures. County officials in at least three states tell The Associated Press they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as “robo-signing,” remain widespread in the industry. The documents have come from several companies that process mortgage paperwork, and have been filed on behalf of several major banks.
Last fall, the nation’s largest banks and mortgage lenders, including JPMorgan Chase, Wells Fargo, Bank of America and an arm of Goldman Sachs, suspended foreclosures while they investigated how corners were cut to keep pace with the crush of foreclosure paperwork. The new findings point to a systemic problem with the paperwork involved in home mortgages and titles. And it shows that banks and mortgage processors haven’t acted aggressively enough to put an end to widespread document fraud in the mortgage industry.
Q: What is title in real estate?
A: Title in real estate refers to the right of ownership of real property, as represented by the "Bundle of Legal Rights". It also refers to evidence of that ownership by a deed. Another way to think about title is as the interest one holds in real property.
Q: What is the "Bundle of Legal Rights"?
A: These are rights that come with ownership of real estate; a purchaser of real estate actually buys these rights from the seller along with the land. The rights define and describe the ownership of real property. They include the rights of possession, control (within legal boundaries), enjoyment (use), exclusion (prevent others from using), and disposition (transfer or disposal).
The term "bundle of rights", like many of our legal concepts, originates from old English law, when the seller would give the buyer a handful of earth or a bundle of sticks from the property. This was meant to represent that the buyer now owned the land from whence the earth or sticks came.
Q: Is the title to my property a physical, legal document that proves ownership of real estate?
A: No. The legal document or written instrument that proves ownership of an asset (a "muniment") in real estate is a deed. A deed is also the written instrument used to transfer title to real estate. Title, on the other hand, is the right of ownership of land or the set of circumstances that would allow one to recover or retain ownership of real estate if that ownership was challenged in court. These circumstances include physical possession of the real estate; they also include the existence of a deed of ownership, which should always be legally recorded.
Q: What are the differences between title, estate, and tenancy?
A: Title is ownership of or interest in real property. Estate is commonly described as referring to the degree, quantity, nature, or extent of that interest. Tenancy refers to the form of real estate ownership or the way the interest is held.
It should be pointed out that not all interests in real estate constitute estates. The interest must be possessory in order to be considered an estate. This means that the interest must allow one to possess the real property, either now or in the future. Interest in real property that allows use but not possession, such as an easement, is not considered to be an estate.
Q: Are there different types of title?
A: Yes. Some of these include allodial, feudal, strata, and company title, and the fee simple estate.
Q: What is allodial title?
A: Allodial title is better described as a type of estate. Allodial title is a complete, undivided, and inalienable interest in a parcel of land. Those who hold allodial title are free from any and all encumbrances and obligations, including mortgages, taxes, and liens. In addition, allodial lands ("allodium") are not subject to government police power, eminent domain, or escheat. Allodial title is distinguished from feudal title, an archaic form of property ownership where all lands reverted to the estate of the king following the death of their owners.
Q: What does inalienable mean?
A: Inalienable is a legal term that means "cannot be taken away by operation of law".
Q: What is government police power?
A: Police power is a legal concept describing the right of the government to enact laws, enforce law and order, and regulate the behavior of its citizens. The intent of police power is professed to be the promotion of the health, safety, welfare, morals, and general well-being of the public. Only those rights and powers specifically prohibited by the U.S. or state constitutions limit government police power. Examples of government police power include land use rules such as zoning ordinances, natural resource or environmental regulations, building and fire codes, and traffic laws.
Q: What is eminent domain?
A: Eminent domain is the right of a state, federal, or municipal government to take private property for a necessary public use, with just compensation paid to the owner. For example, a city might "take" a homeowner's property for the construction of a hospital, or a state might do the same for the construction of a new or improved highway. It is called "taking" because there is little the property owner can do to prevent the government from acquiring the property. However, it is not "taking" in the sense that the property owner receives nothing in return. The owner should be paid a fair price based on the market value of the property (just compensation).
Q: What is escheat?
A: Escheat is the process by which property ownership is transferred to the state when a person dies intestate (without a will) and no legal heirs can be located. Usually the property is disposed of (sold), so the state does not have the burden of property upkeep. The funds from the sale of the property are held in trust in for a number of years (the "statute of limitations"), during which time a legal heir may claim them. After this period, which varies by jursidiction, it is next to impossible for legal heirs to claim these funds. The concept of escheat began long ago, when it described the legal process by which feudal land was returned to the ownership of the king or other sovereign upon the death of its owner. Escheat is used today to ensure that property is not left without an owner and in legal limbo.
Q: Does allodial title exist in the United States?
A: True allodial title does not exist in the United States. Most people who make the claim that it does base their argument on a broad interpretation of the Treaty of Paris (1783), which formally ended both the Revolutionary War and American fealty to the English Crown. The Treaty does reject the Crown's feudal interests in American lands, but does not specifically mention allodial title. The fact that privately held lands in the United States are subject to taxation, police power, escheat, and eminent domain means that title to these lands is not and cannot be allodial, according to its legal definition.
Two states, Nevada and Texas, offer limited allodial title, although Nevada stopped accepting applications in 2005. With strict respect to its definition, neither state offers true allodial title. Nevada's process required the payment of all property taxes upfront before the property could be removed from the tax rolls. In addition, both states allow the seizure of property (allodial or otherwise) used in criminal enterprises. With these things in mind, it is clear that title to privately held lands in NV and TX is not complete, unencumbered, and inalienable. Title to lands such as these therefore cannot be considered allodial.
Q: What kind of title system do we have in the United States?
A: The system of title in the United States is best described as a modified feudal system. The fee simple estate is the highest and most complete ownership of land under this system. Title to the land no longer reverts to the king or other sovereign upon the death of the owner, as was the case in the feudal tenure system of title. Title in the U.S. can be passed to heirs, or it can be transferred or assigned to anyone the owner wishes. However, real property is subject to liens, mortgages, taxes, eminent domain, escheat, and police power, and so has more in common with a feudal system than an allodial system of title.
Q: What is feudal title to real property?
A: Feudal title is a system of real estate title based in old English law. Under this system, all lands were owned and taxed by the king or other sovereign, who granted the right to possess real estate. Real estate was held as a life estate only, meaning that ownership reverted to the king or other sovereign upon the death of the grantee. Under the feudal system of title, also known as feudal tenure or land tenure, owners of real property did not have the right to pass the property on to their heirs.
In most cases, the king or queen gave large parcels of land to lesser royalty (lords, dukes, earls, etc.), known as tenants in chief, who divided the land and granted ownership to lesser tenants in return for goods or services. These lesser tenants divided the land in turn and granted ownership to even lesser tenants, and so on. Different types of tenures required different types of services. A very common type of tenure was a miltary tenure, the terms of which dictated that the holder of the tenure and the real property must supply soldiers (knights) to the lord who granted title to the land.
Q: Does the feudal system of title still exist?
A: The feudal system of title prefaced the decline of feudalism itself, beginning in the late 1200's A.D. By about 1650 A.D., military tenure had been abolished, effectively ending the feudal system of title, although its influence still remains. Many of the relationships and concepts that characterize modern leases, tenancies, and estates are directly based on land tenures and the feudal system of title. Two present-day examples are the life estate and the landlord-tenant relationship.
Q: What is Torrens title?
A: Torrens title is a system of title to real property, invented in 1858 by Sir Robert Torrens when he was Premier of South Australia. Under this system, a government Registrar of Titles maintains records of land ownership, including Certificates of Title, in an official Land Register. The Torrens system was implemented due to inconsistencies and problems in proving land ownership under commom law.
In short, the deeds or other instruments registered under the Torrens system are given legal priority over all other documents, claims, or facts, either recorded or unrecorded, that exist in the chain of title. In fact, the Torrens system does away with the need for a chain of title. A prospective purchaser of real estate only has to examine the legal interests and other title information contained in the Land Register to meet his or her obligation of due diligence. This is due to the fact that under the Torrens system, the state guarantees indefeasible title to all registered real property.
Q: What is a Certificate of Title?
A: A Certificate of Title is a document issued by the Registrar of Titles for real estate registered under the Torrens system of title. The Certificate of Title is considered conclusive evidence of the present ownership and state of the title to the property described therein. The state guarantees indefeasible title to lands with a Certificate of Title.
Q: What is indefeasible title?
A: It is a right or interest in real property that cannot be voided, altered, challenged, undone, cancelled, defeated, or annulled.
Q: Does Torrens title exist in the United States?
A: Yes. Iowa is the only state to have the majority of its land area under the Torrens system of title, but the system is also used to a limited degree in Colorado, Georgia, Hawaii, Massachusetts, Minnesota, New York, North Carolina, Ohio, and Washington. Each state implements the Torrens system in a slightly different way, and has a different proportion of its total land area under the Torrens system.
Q: What is strata title?
A: This type of property ownership was first used in Australia in the early 1960's. Strata title began as a form of ownership for buildings with multiple levels or floors, such as condominiums or apartments. It has since been expanded to include most multi-family complexes, even if they have only one story or floor (such as townhouses). With strata title, the property owner has title to the space within the walls of his or her particular unit, as well as an undivided interest in a proportion of all common areas. Strata title has replaced company title in most areas where it exists.
Q: What is company title?
A: Company title is a form of ownership of units of a larger building, such as apartments or condominiums. Under this form of title, the unit owners formed a company, and property title was in the form of shares of the company. These shares allowed owners to occupy a unit in the building. Company title was cumbersome and often did not clearly define who owned a particular unit, leading to inaccuracies and confusion. Company title has been replaced by strata title in most areas.
A couple of years ago, JPMorgan Chase CEO Jamie Dimon told investors that the acquisition of Bear, Stearns & Co. would not be material to investors. In the years that have followed, a tiny group of analysts and managers have watched as the Bear Stearns transaction has festered into a festival of fraud. The basic problem with Bear Stearns was fraud, massive, deliberate fraud. The firm’s activities in the mortgage securities space were so sloppy and negligent as to rise the level of legend on Wall Street. And now, even Eric Schneiderman has finally been forced to take action against JPM.
“The New York attorney general's office has hit JPMorgan with a civil lawsuit, alleging that investment bank Bear Stearns — prior to its collapse and subsequent sale to JPMorgan in 2008 — perpetrated massive fraud in deals involving billions in residential mortgage-backed securities,” reports the Wall Street Journal. JPM did not seem to anticipate that the unliquidated claims against Bear Stearns from creating bad residential mortgage backed securities (RMBS), namely multiple pledges of loans for different RMBS, would eventually come back to haunt the bank. None of the JPM bankersters gave any thought to the real liabilities of the Bear, namely the fraudulent activities of the failed bank’s mortgage securities department.
Politicians like Schneiderman, who have aspirations for higher office, have no problem making an example of a small firm, but will never move directly against the top four banks for their own grotesque errors and omissions. Schneiderman has been dragging his feet with respect to Countrywide and Bank of New York for years, yet suddenly he has time to sue JPM over Bear Stearns? While Schneiderman is making a big fuss about suing JPM over the Bear Stearns RMBS, he refuses to go after Bank of America, Wells Fargo, Citi, Ally and other large banks for precisely the same type of fraud and deliberate criminal acts as were committed by Bear Stearns.
BAC became the owner of the Countrywide mess by acquiring that firm w/o a bankruptcy. Likewise JPM bought Bear Stearns without a bankruptcy. Notice that you never hear anything about claims against Lehman Brothers or WaMu because most of these claims died in bankruptcy. But, JPM also has liability due to the WaMu covered bonds that were conveyed by the FDIC’s receivership after the takeover. The fraud perpetrated by Bear Stearns in creating these rancid securities will eventually force JPM to repurchase some of the bonds from investors. That is tens or even hundreds of billions of dollars of face amount of bad securities.
The whole point of the Robo-signing settlement is not consumer protection, but rather fraud. The key question is: Who’s got the note? If you don’t have to deliver the note into an RMBS trust, then the door is wide open for securities fraud.
The plaintiff is required to show a full and complete accounting of all activity of the subject claimed note, including but not limited to:
• Where the actual funds came from to fund the loan he entered into, and whether they ever actually existed or were fabricated out of thin air.
• The chain of custody of the note he signed, including the consideration paid for its negotiation each time it was negotiated, and that it was pledged and negotiated exactly once into one trust, and that this occurred in a lawful manner on or prior to the closing date of said trust.
• All financial events at a line-item level of detail, identifying each payee and payor along with each event from the date of origination to the averred default being sued under, including not only payments made and alleged payments missed along with penalties and interest but also any and all swaps collected upon or other transactions that acted as insurance or in any other way mitigated the plaintiff’s or any other party at interest’s damages.
The intent here is quite simple — not only is there a judicial interest in guaranteeing that the person who is standing before the judge is really the assignee of the note (or his lawful agent) and there is only one of them out there (who is the one standing before the bar) in addition you can only collect on a loss via lawsuit or other payment once! If you get into a car accident and your auto insurance pays your $20,000 in damage you cannot then sue the person who hit you, as you were made whole and you can only collect once. In point of fact the insurance company will almost-certainly force you to sign over your right to sue to them before they pay you, but if they don’t, you still can’t sue the person who hit you as you have no economic harm as you were already paid!
Recovery by lawsuit, including foreclosure, requires economic harm. If there was no economic harm there is no foul and your judgment, which you may well be entitled to, is for $0.00. Further, if the person who actually suffered the harm isn’t the one in court he can’t recover anything because the wrong person is suing and only a real party at interest with economic harm can sue. So if the bondholder was made whole via a credit default swap or any other act, including rescission, his claim on you is extinguished. The person who sold him the swap may have a legal claim via lawsuit or the person who was forced to buy back the bogus loan may have a right of recovery but he cannot foreclose unless he obtained possession of the defaulted instrument through that process of payment and if he does then he had better be the person standing in the courtroom before the judge.
This is really basic stuff here folks — you don’t get to sue because you’re “butt-hurt” by someone’s acts; you can only sue to recover actual economic injury, whether your requested remedy is foreclosure or simple money damages. If we can get just one honest judge to hear these arguments and force that accounting to take place in his/her courtroom then the game is up.
The U.S. housing crash shows no signs of abating. Real estate construction is absolutely dead. In fact, right now we are on track for the lowest number of total housing completions that the U.S. government has ever recorded in a single year. Without good jobs, the American people cannot afford to buy homes. Many of those that do have good incomes are being turned down by mortgage lenders. The value of U.S. homes has fallen by a total of approximately 6.6 trillion dollars since the peak of the housing market. It isn’t just banks that are kicking people out of their homes. All over the country, homeowners’ associations are aggressively using their powers to boot American families out on to the streets. Instead of being used by families, all over the country, thousands of foreclosed homes are rapidly filling up with mold.
Over 20 million houses, on any given night in America, are completely sitting vacant. The economy is being helped by “shadow stimulus.” It’s coming from millions of underwater homeowners who have stopped making mortgage payments. Money that would have been otherwise allocated towards a housing payment is going into consumer spending.
1. Ask you to pay more than you owe
The collector cannot misrepresent the amount you owe. [15 USC 1692e] § 807(2)(a)
2. Ask you to pay interest, fees, or expenses that are not allowed by law
The collector can't add on any extra fees that your original credit or loan agreement doesn't allow. [15 USC 1692f] § 808(1)
3. Call repeatedly or continuously
The FDCPA considers repeat calls as harassment. [15 USC 1692d] § 806(5)
4. Use obscene, profane, or abusive language
Using this kind of language is considered harassment. [15 USC 1692d] § 806(2)
5. Call before 8:00 am or after 9:00 pm
Calls during these times are considered harassment. [15 USC 1692c] § 805(a)(1)
6. Call at times the collector knew or should know are inconvenient
Calls at these times are considered harassment. [15 USC 1692c] § 805(a)(1)
7. Use or threaten to use violence if you don't pay the debt
Collectors can't threaten violence against you. [15 USC 1692d] § 806(1)
8. Threaten action they cannot or will not take
Collectors can't threaten to sue or file charges against you, garnish wages, take property, cause job loss, or ruin your credit when the collector cannot or does not intend to take the action. [15 USC 1692e] § 807(5)
9. Illegally inform a third party about your alleged debt
Unless you have expressly given permission, collectors are not allowed to inform anyone about your debt except:
• your attorney
• the creditor
• the creditor's attorney
• a credit reporting agency
• your spouse
• your parent (if you are a minor)
[15 USC 1692c] § 805(b)
10. Repeatedly call a third party to get your location information
The collector can only contact a third party once unless it has reason to believe the information previously provided is false. [15 USC 1692b] § 804(1)
11. Contact you at work knowing your employer doesn't approve
A collector is not allowed to contact you at work if you’ve let them know your employer doesn’t approve of these calls. [15 USC 1692c] § 805(a)(3)
12. Fail to send a written debt validation notice
Within five days of the collector's initial communication, it must send you a notice include the amount of the debt, name of the creditor, and notice of your right to dispute the debt within 30 days. [15 USC 1692g] § 809(a)
13. Ignore your written request to verify the debt and continue to collect
A collector can't continue to collect on a debt after you've made a written request to verify the debt as long as the request was made within 30 days of the collector's written notice. [15 USC 1692g] § 809(b)
14. Continue to collect on the debt before providing verification
After receiving your written dispute, the collector must stop collecting on the debt until you have received verification. [15 USC 1692g] § 809(b)
15. Continue collection attempts after receiving a cease communication notice
If you make a written request for the collector to cease communication, it can only contact you one more time, via mail to let you know one of the following: that further efforts to collect the debt are terminated, that certain actions may be taken by the collector, or that the collector is definitely going to take certain actions. [15 USC 1692c] § 805(c)
Read This Book
There are two types of justice: (1) Justice that you get out of statues and case citations; and (2) Courtroom justice meted out by judges (some with agendas). Not every attorney and paralegal understands what you’re about to read. Don’t assume they do either. There are even judges who don’t “get it fully.” Wisdom is fundamentally essential in the application of knowledge.
Some 70,000,000+ titles to property have been slandered, their chains of title disrupted, corrupted and irretrievably broken. State property recordation laws all across America have been subverted. The battle is with a private electronic recordation entity out of Delaware known as Mortage Electronic Registration Systems, Inc. (MERS) and its parent company, MERSCORP, Inc.
Several county recorders/clerks/registers of deeds have either called for attorney general investigations based on allegations of improper and fraudulent recordations or have filed suit seeking damages and remuneration form those parties responsible for failing to record the documents necessary to preserve their property owners’ chains of title.
Two Assistant Attorneys General, under the direction of Florida Attorney General Pam Bondi, were terminated for ”no reason” because their investigations into these fraudulent recordations got too close to the banks that have ties to the Florida legislature.
On October 31, 2011, Duval County, Florida Clerk Jim Fuller filed suit against MERSCORP and MERS, seeking numerous claims and an injunction to keep MERS from doing anything in Florida. Uniquely, his suit included a Writ of Quo Warranto.
Lawsuits against MERS, the banks, their servicers and their third-party document manufacturers are starting to spring up all over the country. There were outside entities assisting the banks in attempting to recreate the chain of title by fabricating documents in robotic fashion. This is where the term “robosigner” came into being. Two alleged title officers from Lender Processing Services, Inc. were indicted by a Clarke County, Nevada Grand Jury in a 606-count indictment; something that could set landmark precedence and start a chain reaction of prosecutions.
Depositions of several of these so-called “robosigners” have revealed that the documents they signed were: (1) signed without personal knowledge of the facts they were attesting to; (2) not witnessed by the notaries public who claimed to have actually witnessed the robo-signatures; and (3) that the documents that were signed were even rubber-stamped or machine-signed and then notarized, at the rate of 350 documents per person per hour! These robosignors claimed to be Vice Presidents and Assistant Secretaries of whatever bank was paying them to sign the documents at $8 to $10 an hour. Generally, these documents would find their way into the land records at the time of foreclosure. These robosignors also claimed to be Vice President and Assistant Secretaries of MERS.
The banks’ attorneys then either came into the judicial courts, claiming these documents were perfectly “legal,” or recorded these fraudulently-prepared documents in the county land records in non-judicial states and proceeded to use these documents as “proof” of their right to foreclose on millions of properties. When challenged by the Court or the attorneys for the Borrowers to produce the original note or some substantive proof of standing, many of these bank attorneys could not; or in lieu of that, produced manufactured promissory notes, which one servicing company’s (Lender Processing Services, Inc.) price list claimed on its website that it could dummy up for $95.00!
Since the financial collapse of 2008, the American court system has had a proverbial shock to its “conscience.” Lack of transparency and bifurcated notes have barely been proven (if at all) and allowed to be investigated through any type of evidentiary process. Most of WHY this hasn’t happened is due to lack of knowledge and understanding; largely because your mind focuses on the NOTE and NOT on the MONEY TRAIL! The district-level judges began to hand over homes to the banks en masse, without question. A lot of things make up the money trail, starting with the original mortgage or deed of trust that was filed in the county courthouse as security for what backs up “the money trail” – that “unsigned lottery ticket.” Yet, instead of analyzing the entire scenario as it presented itself, judges would appear biased and ask the homeowner, “When’s the last time you made a mortgage payment?” Or “Are you in default?”
This is a shock to any homeowner in court, facing foreclosure, that has had them posed to them by a judge, many of which are clearly pro-bank. Instead of looking at the facts before them, the judges instead immediately took the side of the bank, whether the bank’s counsel had “perfected” its paperwork or not. Judges become finders of fact instead of triers of fact.
This is why we have discovery and trials with juries and appellate courts to help sort it all out; because, on occasion, the district court judge will make an error or a ruling that doesn’t comport with the current set of laws. Most of the trials you will see in most of these cases are to the bench, meaning a judge handles the entire matter and decides at some point whether a jury is required.
Contrary to what you may think of today’s justice system, you do have rights as a homeowner. The problem is, however, that by the time you realize what the problem is, most of the rights affecting the loan itself have statutorily lapsed, meaning you are time-barred from seeking damages under those specific statutes.
Not every attorney knows this stuff thus; this area of law is fraught with malpractice. Again, there are judges out there that are clearly biased and prejudiced in favor of the banks. Many of them hold stock in banks and investment firms. This is why there are appellate courts. Appellate court rulings eventually set parameters and curb bad rulings by district-level judges. Some county judges are more notoriously famous for ruling in the bank’s favor while ignoring blatant evidence.
Being a pro se litigant in front of one of these judges is worse. Your mission, should you decide to accept it, is to use wisdom in your approach to everything you do in your effort to resolve issues with or set parameters surrounding your life’s goals.
There are several reasons why homeowners will choose to “go it alone” and not retain counsel:
The difference in how homeowners are treated in each state is based on whether the state itself operates judicially (in 23 states) or non-judicially (in 27 states).
In a judicial state, the typical foreclosure involves the “lender” going to court, filing suit, properly serving the homeowner-borrower and allowing them to file an answer within a limited time frame, allowing them to “have their day in court.” Many attorneys failed to serve the homeowners with proper notice and thus, many homeowners filed counterclaims against the banks and their foreclosure mill attorneys, acting on their behalf for not properly serving them with notice and had their foreclosure judgments vacated. When a homeowner retained counsel and challenged the bank’s standing to pursue a foreclosure, the bank: (1) backed down on its aggressive stance; (2) settled; or (3) ramped up its fight, trying to outspend the homeowner in legal fees.
In a non-judicial state, the typical foreclosure involves the “lender” serving the homeowner-borrower with Notice of Default and then publishing the notice with intent to foreclose and sell the property in a (legal) newspaper of general circulation. To find out what you “State” allows (this is research), look in the Legal Notices of your area newspaper or legal publications and see what’s printed on foreclosures there. Often, the results of title analysis showed that the documents that the banks were relying on to foreclose non-judicially were either manufactured by robosignors, or not filed by the lender to perfect its interest prior to the “substitute trustee’s” appointment for the purposes of foreclosure.
You can also call a lawyer’s referral service or your state bar association and someone there can tell you whether you’re in a judicial or non-judicial State. Either way, the “lender” is going to tell you that you haven’t made your mortgage payments, that you’re in default and that they’re going to foreclose on your home. In lieu of that, other strategies are emerging; like filing quiet title actions BEFORE your home goes into foreclosure!
The money trail goes all the way to Wall Street and beyond. The Securities and Exchange Commission, investor pools and several states’ attorneys general have an ongoing “bone to pick” with all of the “players” in these brokerage houses and financial institutions that structured the deals that convoluted the chains of titles to property all across this nation. If someone goes to prison, it will be the result of the justice system making it happen and not your doing.
All you have to do is look at existing court rulings. Avoid securitization arguments and look at the simple stuff. Follow the path of least resistance, like electricity. Keep it simple stupid, as judges like that approach. As a homeowner, you don’t want to be someone’s guinea pig, so hiring a know-it-all rookie out of law school may not be your smartest move.
Better than 99% of all American homeowners at some point in their lives, took out a single family residential mortgage loan… or two… or three, and then refinanced their home at least once… or twice… or thrice. Your chain of title is affected each time you visit the “closing table.” If “MERS” appears anywhere in that chain of title, you have bigger problems that potentially involve undertaking quiet title actions.
Let’s just hope the judges hearing these cases don’t have the banks in their back pockets. The old tried and true method of challenging the lender’s “standing” or “capacity” seems to be the focal point, whether successful or not.
Judges are supposed to be like referees. However, many of them are also homeowners. And they have a conscience which can be easily “seared” based on their current belief systems. With the advent of frauds being brought on their Courts, judges now have to take extra time and effort to understand how and why this is happening. Even judges are having a hard time believing that their own “court officers” are letting them down. Florida justices are probably more experienced in dealing with “fraud on the court” cases, as lender’s attorneys have presented fraudulent and fabricated evidence there that would totally boggle the conscience.
Expecting an onslaught to the judicial system in that State, filing fees of up to $1,900 are being charged by the Florida courts to bring an affirmative defense in foreclosure cases or original actions. Welcome to the “new and improved” justice system. As much as you the homeowner think they’re being ripped off, you also have to understand that the court systems in this country are already overburdened and there is a price to pay when one wants to step outside the box and file a counterclaim (especially in Florida).
In a jury trial, the judge can strike what the jury hears and can instruct the jury to consider certain things in their deliberations. Unfortunately, just because a judge can tell a jury to “disregard” what they just heard, the jury heard it anyway. Jurors are homeowners too.
With the wide publication of the mortgage lending crisis and record number of foreclosures and arrests of mortgage loan officers, appraisers, real estate agents and the like, jurors are going to have a hard time with the lenders too. Lenders know this and they are scared! The lenders definitely don’t want the truth coming out in court! They don’t want bad case law and they don’t want juries awarding huge damage claims.
In lender liability tort, there are “real issues” involving banking behaviors, like breach of contract that can happen from the inception of the mortgage loan and it follows all the way through to foreclosure. Once you’ve gone through foreclosure, you wake up to some real truths about property ownership.
There is an exorbitant amount of chicanery unleashed by attorneys that represent mortgage lending institutions as well as by banks and Wall Street firms. But two things remain a constant:
These two conditions are on-going, for which there are no statute of limitations. The chain of title began to each piece of property in America when each State’s land recordation systems began to document conveyances between owners of land and their respective buyers. This recordation represented proof of ownership, a symbol of wealth.
If you research foreclosure cases, in most cases, the two preceding constants do not match. One of the options available to homeowners to examine condition of title is called a quiet title action. It is the only scenario where the damage to the chain of title appears to be ongoing with no statute of limitations. As long as the “clouds” on title to property remain, the property remains “technically unmarketable” because clear title cannot be conveyed. When clear title cannot be conveyed, for all intents and purposes, the value of the property is ZERO!
Foreclosure, in and of itself, is mostly a defensive-based term to the homeowner, whereby as the borrower, is in default and the lender is reclaiming their “interest” in the home; or business if it’s in the commercial realm. Lender liability, for the most part, started in the commercial realm.
If the chain of title to your home became flawed at the point your mortgage or deed of trust was recorded; if the subsequent assignments and security interests were never perfected, or worse, never even recorded, you could not produce a clear title and then, you couldn’t legally sell your home without recourse from a future buyer. Do the lenders legally have the right to foreclose if the relationship they have with the investors who really “own” the portfolio is purchased by them under illusory pretenses?
Do the parties attempting foreclosure legally have the right to foreclose if they never advanced any of the money in the transaction and are not the true beneficiaries? Do the judges legally have the right to NOT ask questions about the suspected fraud committed by the lenders? Should judges be allowed to carry on an agenda and just hand your homes over to the lender just because they’re “the lender?” Do attorneys have any kind of duty whatsoever to the distressed homeowner to help them seek relief when their first duty is to the court and their second duty is to the public? What if you’re looking at your Deed of Trust and you see a paragraph containing the acronym “MERS” on it … naming them as a beneficiary? Did MERS loan you any money? Does MERS have standing to remove any case to federal court since it is “bankruptcy remote?”
Few attorneys have attempted to fully educate themselves on this mess. Some of those quests have ended in utter frustration and failure because cases were not properly litigated. Justice for the homeowner has, in many instances, ended up in financial disaster and ruin, due to lack of attorney education in dealing with unscrupulous lenders. Much of these failures were due to a lack of understanding of “false assumptions.”
There are several actual “networks” of “foreclosure mills” throughout the US! These networks of attorneys are well-educated in foreclosure procedure and they have “well-oiled” resource centers and teams of paralegals and researchers they can access to back that up. They have banks that just spit out money in legal fees to outspend homeowners. Knowing this up front can help mentally prepare you for the fight of your life; as you need to research your adversaries.
The rules of the court are also being modified, particularly in Florida, where lenders’ attorneys are told that all of their documents must be in order. Several Florida law firms were forced to shut down and the frauds that these firms allegedly generated in prosecuting foreclosure cases are still being investigated. In New York, according to court rules, any law firm presenting a foreclosure has to attest to the validity of the documents it is presenting or face disciplinary action and possible sanctions. Foreclosure mill attorneys have largely attempted to circumvent those rules.
As long as the distressed homeowner lets the lender get away with filing assignments that “don’t connect the dots” (or not filing assignments at all), attorneys will have no reason to further educate themselves. Therefore, judges will continue to receive limited testimony and evidence on which to base sound decisions.
There are several networks of foreclosure defense attorneys that are sharing information and strategies; and that’s a good thing. Several attorneys have banded together with homeowners in information-sharing networks.
The general public was caught unaware when the foreclosure crisis deepened. Some of the attorneys and their litigation support personnel allege the banking system is responsible for its own demise.
Changes are still occurring that are tilted in favor of the banking lobbyists, who managed to defeat amendments to legislation affecting mortgages and deeds of trusts in Virginia, Georgia, and Arizona, most notably. In Utah, Nevada and Idaho, more teeth went into the deed of trust statutes to the benefit of homeowners. Oregon is going through some revamping as well.
Florida’s foreclosure court system has gone through a serious enema of its own. The State budget for the judiciary was so taxed, and the public outcry so severe, that its “rocket docket” system were nixed as of July 1, 2011, because of the lack of budget. The “rocket docket” was indeed a feeble attempt by the Florida judicial system to bring a consortium of retired judges “out of mothballs” and set them on a mission to clear caseloads of court dockets at rapid-fire pace, funding whatever excuses necessary to hand houses over to the banks, whether their paperwork was in order or not.
As well-intentioned as it was, it was all sorts of wrong. As a result of state budget problems, the average length of time for a foreclosure case in Florida is now over 501 days and the rate of foreclosures in that state continues to increase. Bank of America has announced it is now offering its own version of a “cash for keys” program to get homeowners NOT to trash their houses when they walk away from them. Whether or not Bank of America actually owns the property is another story. Plan to investigate the chain of title for every property that is taken by Bank of America, via this program, if you’re so inclined to buy one.
Loan modifications and the HAMP program are virtual jokes! HAMP programs were abused by the lenders and afforded the homeowners no legal recourse. Only a minute fraction of those homeowners applying for HAMP were actually qualified for the program. A majority of the trial loan modifications resulted in homeowners’ being placed further into default and still ending up in foreclosure proceedings after the lender led them to believe that a resolution was probable. Breach of contract suits erupted as a result of the lenders’ failing to comply with the terms of their own loan mod programs.
Loan modifications have since taken on a new twist. The Federal Trade Commission levies fines up to $11,000 for even taking an up-front fee to start a “loan mod” and up to $11,000 per day for each day that violation is allowed to continue. Sadly, as a result of these loan mod programs, many people lost their homes to foreclosure. The entire time the lender was promising them a loan modification, the lender was foreclosing on the home behind the scenes. Most of the time, the homeowner found out too late what was happening and ended up being tossed out of their home.
According to a brand new ABC News/Washington Post poll, 80 percent of Americans say that they are either dissatisfied or angry with the government. Americans are deeply divided about what the solutions to our problems are, but what almost everyone can agree on is that our problems are getting worse.
Investigative reporter Greg Hunter detailed how foreclosure mills are creating massive amounts of counterfeit promissory notes, so banks could legally foreclose on homeowners. "When you start drilling down on this, you're going to find all kinds of malfeasance," he declared. However, Hunter lamented, unlike the Savings and Loan crisis of the 1980's which saw about 1,000 people sent to jail, the current financial debacle has yet to yield any indictments, despite being forty times bigger. "Not a single person has been charged criminally," he marveled, "with what I think is the biggest fraud in all of history."
Hunter explained that promissory notes are a critical aspect of the unfolding Foreclosuregate. These notes, he said, are supposed to act as proof that the bank has the right to collect on a mortgage. However, Hunter revealed, as the larger banks purchased mortgages in bundles, many of these promissory notes were lost. Likening the notes to physical dollars, Hunter pointed out that they are "financial instruments," and, thus, cannot be recreated or copied for official use. As such, he cautioned homeowners who are currently paying a mortgage that "you don't know what they're going to say at the end of 15, 20, 30 years of you paying." Along those lines, he shared one troubling tale of a man who paid off his mortgage and was then told that the deed to his home was essentially lost in the mire of the Fannie Mae and Freddie Mac meltdown.
Looking ahead to the future, Hunter warned about what he called "the Fed's biggest fear." He noted that many adjustable rate mortgages will be recast over the next year, resulting in a massive increase in payments for homeowners, peaking in November of 2011. However, the stream of income from the homeowners must continue in order to maintain the economy. Therefore, Hunter theorized that the Fed will take a number of dangerous steps in order to "keep interest rates artificially low until this clears out." This course of action would result in people staying in their homes and still paying their mortgages, but would also "destroy the dollar while you're doing it."
You CAN Stop Foreclosure
There are a number of consumer protection laws in place to protect the public from predatory lending practices. The Real Estate Settlement Procedures Act is one of them and The Truth in Lending Act, Regulation Z (12 CFR 226) is another. We use these and others to craft a remedy for you that will allow you to stop foreclosure in its tracks.
In An Emergency
If you are at foreclosure's door, go down to the court house where the sale is to take place, when they call your property, step up and tell them, "There is a claim on this property; buy the property you buy the claim." This will keep anyone from bidding and the bank will have to take the property back. Probably the best solution when you are out of time.
Also, when you sue the bank. If an essentially innocent third party purchases the property, the question before the court will be, "Who has a right to possession." The fact that you may have a claim against the lender will not be considered. By stopping anyone from bidding, the bank must retain the property and then, if you sue the bank for the fraud we find here, the bank will usually stop all efforts to force you out of the building as, if they do, they are responsible for the property and they cannot insure an empty property. The bank will want you to remain in the property until the suit is litigated, which could take a very long time.
This Computer Is Not An Attorney
This program is designed to take your input, run an analysis on it, then merge your data into a lawsuit document. The particular document has been filed in the court a number of times and is intended to be generic. It will address certain issues that pertain to your case in terms of dollar amounts, but the issues brought are issues that exist in every consumer mortgate loan we have seen. It is designed to be used in an emergency to stop foreclosure.
Not Intended To Replace Counsel
This program is not intended as legal advice, but rather, instruction in how to stop the lender and give you time to seek out counsel. It is also the result of considerable research. The issues in this lawsuit have been taken from suits already filed by attorneys in cases. You can file the suite immediately to stop foreclosure, but we suggest you secure counsel to help you with the case. We have been locating and training attorneys around the country to deal with this issue and can give the list we have. If you have your own counsel, we can talk to him and bring him up to speed on the fraud issues common to most all consumer mortgages.
We can also provide you with a mediation service if you are unable to negotiate with the lender. Once you have the information provided, you will be able to specifically demonstrate precisely how much fraud is involved in your note. Then, instead of going to the lender with your hat in your hand for a loan modification, you can go into mediation with your boot up their collective behinds.
You Can Fight the Banks
The money changers are stripping the American people of the equity in this country. If we do not stop them they will wind up enslaving us all. They have used fraud and trickery to get people to speculate with their homes, now they intend to strip them of their homes and equity, then sell them back at inflated prices.
Loan Modification Fraud
The banks are using this loan modification scam to force people into foreclosure. They offer you a modification then tell you that you do not qualify unless you are a couple of payments behind. They then offer to modify and ask you to produce all your private information while they process the foreclosure. If you question the foreclosure notices, they tell you not to worry about that as you are doing the modification and everything will be fine. They will then stall you until just before foreclosure, deny the modification then sell the property.
Forensic Audits Absent Remedy Are Worthless
There are a lot of companies doing forensic audits and most are, we believe, acting in good faith toward the people they are trying to help. The problem is, the audit does nothing but tell you that the lender has violated certain laws. We are focused on remedy and the audit is not remedy. What do you do with the audit? We suggest, do not waste your money on an audit unless you intend to give it to an attorney who understands consumer law so he can sue them as nothing will stop the bank form foreclosing on your property but a nice hefty law suit.
How Things Really Work
1) Briefly, how it works is this, the Lender would secure a large loan from a large bank, convert that loan into 20 and 30 year mortgages, then sell the promise to pay to an investor.
2) Usually a Real Estate Agent would contract with a seller to find a buyer, then bring both seller and buyer to a lender who would secure the title from the seller using the funds borrowed for that purpose then trade the title to the buyer in exchange for a promise to pay over a stipulated term. The lender, however, has created a 20 or 30 year mortgage with money the lender must repay within 6 months, therefore, as soon as the closing is consummated, the promissory note is pooled together with others and sold to an investor.
3) Using the instant case as an example, a $139,200.00 note at 7.8980% interest over 30 years will produce $352,108.80 The lender can then offer up the security at say 50% of the future value to the investor. The investor will, over the life of the note, less servicing fees, realize a profit of $180,466.72 . The lender can then pay back the bank and retain a handsome profit in the amount of $52,429.60. The lender, however, is not done with the deal.
4) The lender who signed over the promissory note to the investor at the time of the trade, did not sign over the lien document. The State of Kansas Supreme Court addressed this issue and stated that such a transaction was certainly legal, however, it created a fatal flaw in that, the holder of the lien document, at time of sale of the security instrument, received consideration in excess of the lien amount, and therefore, the lender could not be harmed and the lien became a void document.
5) This begs a question, if keeping the lien would render it void, why would the lender not simply transfer the lien with the promissory note? As always, follow the money. The lender will hold the lien for three years, file an Internal Revenue Form 1099a, claim the full amount of the lien as abandoned funds, and deduct the full amount from the lender's tax liability. The lender, by this maneuver, gets consideration a second time and still the lender is not done profiting from the deal.
6) After sale of the promissory note, the lender remains as the servicer for the investor. The lender will receive 3% of each payment the lender collects and renders to the investor pool. However, if the payment is late, the lender is allowed to assess an extra 5% and keep that amount. Also, if the loan defaults, the lender stands to gain a considerable amount for handling the foreclosure.
7) The lender stands to profit far more from a note that is overly expensive in the first instance, then slow to pay in the second, then ultimately fails in the third, than from a good stable loan. And where, you may ask, does all this profit come from? It comes from the equity the lender convinced the borrower to invest in the new purchase, and still the lender is not finished profiting from the deal.
8) The last nail was driven in the American financial coffin on the last day of Congress in 2000 , the Graham Bailey Leach Act, was when they removed a restriction that had been in place since the economic collapse of 1907. At that time, investors were allowed to bet on stocks without actually buying them. This unbridled speculation lead directly to an economic collapse so the legislature banned the practice, until the year 2000. The money changers got their way on the last day, the last act of the session, when congress opened the process again and it took only 8 years to crash the stock market.
9) The lender was not done profiting from the loan he created as he was then free to bet on the failure of the security.
10) The unsuspecting consumer was lulled into accepting the pronouncements of the Real Estate agents, the Lenders, Appraiser, Underwriters, and Trustees as all were acting under the cover of government regulation. Unfortunately, the regulations in place to protect the consumer from just this kind of abuse were simply being ignored.
11) The loan origination fee from line 801 of the HUD1 settlement statement is the finder's fee paid for the referral of the client to the lender by a person acting as an agent for the borrower. Hereinafter, the person or entity who receives any portion of the yield spread premium, or a commission of any kind consequent to securing the loan agreement through from the borrower will be referred to as "Agent." The fee, authorized by the consumer protection law is restricted to 1% of the principal of the note. It was intended that the Agent, when seeking out a lender for the borrower, would seek the best deal for his client rather than who would pay him the most. That was the intent, but not the reality. The reality is that Agents never come away from the table with less than 2% or 3% of the principal. This is accomplished by undisclosed fees to the Agent in order to induce the Agent to breach his fiduciary duty to the borrower and convince the borrower to accept a more expensive loan product than the borrower qualifies for. This will generate more profits for the lender and, consequently, for the Agent.
12) It is common practice for lenders to coerce appraisers to give a higher appraisal than is the fair market price. This allows the lender to increase the cost of the loan product and give the impression that the borrower is justified in making the purchase.
13) The lender then charges the borrower an underwriting fee in order to convince the borrower that someone with knowledge has gone over the conditions of the note and certified that the meet all legal criteria.
14) The entire loan process is carefully contrived and intended to induce the unsophisticated borrower into accepting a loan product that is beyond the borrowers means.
15) The trustee, at closing, participates actively in the deception of the borrower by placing undue stress on the borrower to sign the large stack of paperwork without reading it. The trustee is, after all, to be trusted and has been paid to insure the transaction. This trust is systematically violated for the purpose of taking unfair advantage of the borrower.
16) With all this, it should be a surprise to no one that this country is having a real estate crisis.